Whiteford, Peter: is welfare sustainable?

Whiteford, Peter

Is welfare sustainable?Inside Story, 22 November 2015

Looks at recent government statements about social services expenditure then moves on to detailed historical consideration of the issue. Most of the graphs go back to 1995 and cover, for example, the proportion of aged people receiving income support (note big reduction in numbers receiving Department of Veterans’ Affairs support), proportion of working-age population receiving income support (big decline), age group trends, payments to women, disabled people, sole parents, and overall trends in spending.

The article concludes:

  • there has been ‘a prolonged fall in the number of welfare recipients since the mid 1990s’;
  • there has been no evidence of major increases after 2008 in spending in this area as a percentage of GDP;
  • while ‘past trends are not necessarily a reliable guide to the future … numbers of recipients and levels of spending relative to GDP are unlikely to grow in the near future unless there is some form of economic shock’;
  • ‘[w]hile concerns about relentless growth are difficult to substantiate – particularly when the total number of welfare recipients is close to its lowest level in the past twenty years – we should not be complacent’;
  • ‘[o]ur main concern should be to avoid any significant blow-out in unemployment’ and we should look closely at the problems some people face in moving from welfare to work; and
  • ‘the growth in the size of the population aged sixty-five and over will put upward pressure on spending over coming decades. Preparing for the continued ageing of the population, however, does not necessarily imply that the solution is to seek to further cut spending on working-age payments.’

The article links to a 2014 piece by the same author covering similar issues. More on inequality and related subjects in our collection.

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