Saturday, September 24, 2016

Saturday Morning Musings - Christian Porter's overreach?

The announcement on Tuesday 20 September 2016 by Australian Social Services Minister Christian Porter that the Government was adopting the New Zealand investment approach in the social security arena received considerable press coverage. You will find the press release here, the Minister's Press Club speech here, while the Department of Social Services' website provides further information including a link to the PwC baseline report.

In very simple terms, the approach requires you to assemble masses of data. In the Australian case, the Government used PricewaterhouseCoopers (PwC) to mine fifteen years of data. You then use this to estimate future costs of particular programs or types of spend. This generates a baseline report. This might suggest that people in a particular cohort were going to cost so much over a particular time frame. However, if you can spend (invest) now so that those people do not need the later support, you may generate significant future savings. The gain reflects your return on investment. Its the same type of calculation you might do if you were investing in a new machine to lower future production costs.

One of the difficulties with the approach in the social policy area is that calculating returns from particular initiatives is highly problematic. You just don't know what will work because of the number of variables involved. This means that you experiment, trying small things knowing that many will fail in the hope of getting some that do work and can be rolled-out on a larger scale.
In Minister Porter's case, he identified certain key groups from the PwC analysis:
  • 11,000 young carers - it is forecast, on average, they will access income support in 43 years over their future lifetime;
  • 4,370 young parents - it is forecast, on average, they will access income support in 45 years over their future lifetime; and
  • 6,600 young students - it is forecast, on average, they will access income support in 37 years over their future lifetime.
The Government then created a $96 million "Try, Test and Learn Fund" (don't you love the jargon?) to "enable organisations to compete for a chance to try a policy that proposes to create a path out of the welfare system."

I heard the initial interview with Mr Porter just before I left for a training course. I like the investment approach, although I am not blind to its weaknesses. Then I bought The Australian at lunchtime and found the equivalent of a three page spread involving multiple writers and commentators all about Mr Porter and the approach.

It was actually quite funny. The paper wanted to differentiate the approach from that of the Abbott Government, it wanted to put it in a New Zealand context quoting Bill English admiringly, yet it wanted to stick to its traditional lines. For his part, Mr Porter clearly wanted to emphasis the revolution of it all, to place it in a broader policy context, but in so doing used rhetoric that exactly fitted within the ideological frame of the previous Government.

I will call this one now. I think that Mr Porter's approach is likely to fail. I say so for a number of reasons.

The investment approach can be applied in multiple contexts and political frames. It is a tool. In linking it to ideology, in suggesting that it is the start of a revolution, Minister Porter is attempting to use a tool to justify, support, a broader position.

That broader position has been tarnished by the previous over-reach of the Abbott Government. The New Zealand approach of explain, incremental change, test, explain, more change, test, explain etc doesn't work when people don't trust you. Here Mr Porter's position on the New Start Allowance (the Australian equivalent of the dole) is indefensible.

It may be true, as Mr Porter argues, that dole recipients receive (on average) several benefits, but when you total them up, the value of the dole remains penurious. That was accepted several years ago by both business and social welfare groups  It remains true. But the image of a man who receives more in daily travel allowance than anybody on the dole receives in total is not good atmospherics.

Finally, there appears to be a growing disconnect between the data itself and Mr Porter's arguments. The main cost drivers are not those Mr Porter focuses on, but reflect changes (among other things) in the demographic structure of society, including the growing importance of the old age pension.

There are instabilities as well as conflicts in the Australian welfare system. Consider this. The housing that underpins much of our welfare system is based on a single payment, Commonwealth Rent Assistance.  This has been going down in value, but it's still critical.

In Mr Porter's case, rent assistance was one of the benefits that people on Newstart might receive, In the case of the NDIS, the National Disability Insurance Scheme, rent assistance is included in the reasonable rent contribution that people pay. In the community housing sector, rent assistance is absolutely critical to viability because it is included in the rent collected.

So what would happen to all this if the Commonwealth decide to abolish or significantly alter rent assistance?  There is a case to say that they should. Its really not fair that a person on welfare should get rent assistance (it's only paid to people on Commonwealth benefits) while a working person on the same income does not. But the impact would be dramatic.

Writing in The Conversation, Michelle Grattan commented:
But some of the negative reaction this week – for example from young carers and welfare sector representatives – reinforces the point that it’s not easy to prosecute reform. Suspicion about the government’s motives affects the debate, and whenever payments are involved there is resistance to anything that could threaten them.
I think that's a fair summary. The suspicion about government motives is deeply embedded. In retrospect, a key feature of the reaction to the 2014 Australian Government budget is that it was seen as ideological, inequitable, thus creating a climate of distrust, of suspicion. The Government overreached, in so doing damaging the very things it was trying to achieve. I think that Minister Porter has made the same error.

Postscript

The Australian Productivity Commission has released a preliminary report on Human Services delivery that includes some comments on social housing relevant to the discussion here in comments. You will find the report here.

Postscript 2 5 October

Two further links. First, a swinging attack on the Porter approach in the Canberra Times from Jack Waterford. Secondly, a more balanced if still critical editorial in the Melbourne Age. This quote captures one element of the problem.
Mr Porter presented three goals for a new direction in welfare policy: identify those at high risk of long-term welfare dependency and help them find employment; identify and reduce the risk of welfare reliance crossing generations; ensure the long-term financial sustainability of the welfare system. These priorities seem sound and responsible. However, many commentators have pointed out that there was an elephant in that Press Club room: how does Mr Porter define welfare?
Many would accept those first two goals, although some would ask how you achieve the second without more jobs. Many would accept the third as a principle without accepting that the current system is not sustainable, something that Mr Porter and the Government argue. Many would argue, too, that the first and second hold independent of views on the third. Even a financially sustainable welfare system should seek to achieve the first two. But the question is a real kicker, for how does one define welfare?


39 comments:

Anonymous said...

Well, I am writing without the benefit of the articles you cite in The Oz, so am possibly ignorant of the "why" behind both your conclusion: "it won't work", and what comes over as a somewhat personal attack on Porter - a pollie I have some respect for.

What is the "it" in "it won't work"? Having read your post, and the press release, and his Press Club speech, I think the "it" is the targeting of specific groups of recipients, identified and quantified by PwC, by inviting various concerned organisations to submit for testing some revised approaches - and that these be measured against benchmark. Is that "it"?

If so, what alternative/s would you suggest/prefer? If not, what is your "it"?

It seems to me that you are maybe clouding your judgement by mixing together the analysis of Porter's proposal with his obvious political ambitions. Is it not possible to set aside the political and simply provide comment upon the proposed course of action re these identified subgroups? On the face of it, trying something which might lift people out of welfare systems is better than simply going on as we are.

kvd

Jim Belshaw said...

Hi kvd. I'm not sure how you can construe my remarks about Mr Porter as a personal attack. The closest I came to that was in this comment:

"It may be true, as Mr Porter argues, that dole recipients receive (on average) several benefits, but when you total them up, the value of the dole remains penurious. That was accepted several years ago by both business and social welfare groups It remains true. But the image of a man who receives more in daily travel allowance than anybody on the dole receives in total is not good atmospherics."

We start with the investment approach. I made it clear that I supported that, although it has its weaknesses. The idea of early intervention, of action to give people choices that may stop welfare dependence, is not new of course. The problems that can arise, the barriers to success, are reasonably well documented. The "new" element in the investment approach lies in the attempted use of quantification to both identify problems and to provide a logical base for action justified on rate of return. I put the new in inverted commas because things like cost-benefit analysis has been around for a while. However, the investment approach provides a structure and does incorporate new analytical tools.

What is, I think, new is that the approach allows for experimentation accepting that failure will occur. This is generally anathema to government. That can be liberating.

I, too, am concerned about welfare dependence including inter-generational welfare dependence, although Mr Porter and I may not agree on either causes or indeed definitions. I base that only my interpretation of his language. I would certainly support action to help particular groups such as young carers not because they might otherwise become welfare dependent, but because in that particular case they are making a sacrifice that deserves support.

In speaking, I am talking about the Press Club speech here, Mr Porter went beyond what might be achieved by the investment approach or indeed the targeting that might follow to mount a general case. It is here that I part company with him, in part because neither targeting nor the investment approach provide a real answer to the problems that he is trying to articulate. Even if I agreed with him wholeheartedly at a general level, and I do not, I would still conclude that the tools he was presenting as an answer could not support the edifice.

That is partly why I wrote: "I will call this one now. I think that Mr Porter's approach is likely to fail" The other reason was that in formulating his arguments in the way he did he played into the pervading distrust created by the Coalition Govenrment's previous actions.

Anonymous said...

Thanks Jim. Still struggling to understand exactly what you were referring to in your "it won't work" comment? Tried to analyse in my second para - which was all I could glean was new about Porter's proposed approach.

I can't see how his PC speech "went beyond" anything more than outlining his present undertaking to try some new approaches, targeted to specific groups?

I didn't take from his speech that he was presenting "an answer" - as in, a total solution - to the (let's face it) biggest call upon government revenues. Perhaps we are reading two different speeches.

All of which still begs the basic question: if you don't agree with this development, what is your specific suggested alternative/s? It's easy for me; I have none. But you're the (in comparison) expert...

kvd

Jim Belshaw said...

kvd, it all depends on your definition of the problem.

You wrote: "What is the "it" in "it won't work"? Having read your post, and the press release, and his Press Club speech, I think the "it" is the targeting of specific groups of recipients, identified and quantified by PwC, by inviting various concerned organisations to submit for testing some revised approaches - and that these be measured against benchmark. Is that "it"?"

No clearly not. Phrased in the way you have phrased it, I might agree. But that was not what Mr Porter said. He put the initiative in a much broader context. To show this properly, I need to take his speech line by line from a policy perspective. I will try to do so later.

You wrote: "All of which still begs the basic question: if you don't agree with this development, what is your specific suggested alternative/s? It's easy for me; I have none. But you're the (in comparison) expert..."

I clearly agree with part of what he said. However, I disagree with his specification of the general problem. To begin with, I don't accept that the present and projected size of the welfare spend is quite the problem he presents. That holds for both the size and the composition of the spend. Since I don't accept his diagnosis, I don't accept his prescription.

The existing system has problems. I gave one example, Commonwealth rent assistance (CRA). Frankly, this one scares the living daylights out of me for it's now at the centre of the entire structure. Its embedded itself and no one has really commented. Take CRA away and the NDIS struggles. Take CRA away and the community housing sector goes backwards at a fast pace.

Let me try to illustrate.

The NDIS represents a revolution in the way we treat disabled people. Part of the NDIS is to take those living in larger state institutions or younger people living in aged care facilities because they have no choice and place them in smaller residential accommodation of their choice that better meets their needs along with the support that will help them sustain their new homes. Who could argue with that? Certainly I don't.

After the old age pension, the NDIS is the next biggest projected call on the welfare budget.

Now to do all this requires the construction of new homes that will meet the varying needs of the different target groups. This requires private investment. We have a market solution. Again, I am a supporter.

The National Disability Insurance Agency has done a range of complex calculations to create a pricing structure that will encourage private investment in the necessary Supported Disability Accommodation. This provides for a tiered pricing arrangement based on need and required accommodation type. It is meant to make disability accommodation profitable.

Now let me ask you a question. Would you as an adviser suggest to any client that they should invest in disability housing when their return depends on Government decisions on no less than three payments - the disability support pension, the Specialist Disability Accommodation payment plus CRA? You see the problem?

Mr Porter made the point that responses should be based on context not theory. I think that he has failed that test.

2 tanners said...

As a landlord, scares the pants off me. I have to pay contributions to CES (not sure why) for my unemployment tenants. Three contributions per tenant would be worse and with tenancy rights the way they are, I could well end up with 6 months of no rent, and no recourse if the government cancelled even one of some poor sod's entitlements so not being able to afford the full rent they decided to pay nothing. It might be bitter experience that makes me think that way but on the other hand ... no, it's experience.

Anonymous said...

Jim thanks for your reply. If you get bored with my further commentary please feel free to disengage. That said:

1) You said To begin with, I don't accept that the present and projected size of the welfare spend is quite the problem he presents. That holds for both the size and the composition of the spend. - which leaves me wondering just where and by how much is the PwC analysis so objectionable to you?

2) You said Take CRA away and the NDIS struggles. Take CRA away and the community housing sector goes backwards at a fast pace. - which makes me curious as to where you've seen that this is a serious possibility?

3) You said Now let me ask you a question. - to which I'd reply in two ways:

3a) if the proposed scheme were equivalent to (and I accept it is not) the Defence Forces Housing Scheme, then I would not hesitate to recommend such investment.

3b) if the proposed scheme were as loosely administered as the CRA one of my employees is housed under, then I wouldn't touch it with the proverbial barge pole.

Happy to expand upon 3a,3b if you wish, but the overarcing concern you display seems to be that the three elements of payment/benefit are subject to government whim?

Well, such is life - but how to (even remotely) plan anything if that is the position from which you commence?

kvd

Jim Belshaw said...

2t, what is CES?

kvd, I haven't yet read the PwC report in depth, but it has some interesting material. I'm not sure that I have any objections to it.

On CRA, there have been several suggestions for changes but no real push at this point. Could you expand on "if the proposed scheme were as loosely administered as the CRA one of my employees is housed under, then I wouldn't touch it with the proverbial barge pole"? I'm not sure that I understand the housed under point.

Anonymous said...

Jim, I've now read (and mostly understood) the PwC report; it seems unobjectionable to me. On Defence Forces housing, there are many calls for investors in these properties - bare bones of which are 10 year known gross returns, refurbishment upon exit, a known employer with certain control over payment and repair.

On my employee's circumstances, I'll email you with the basis of my impression - gained over 11 years of her casual comments, and my direct knowledge of her income reporting requirements, and the area in which she lives. The contrast is quite stark.

kvd

marcellous said...

Jim

I'm not sure if the availability of Rent Assistance to welfare recipients is such a great unfairness. It seems to me that Rent assistance, at least in Sydney, is such a drop in the bucket that it cannot have a very great market impact, even when welfare recipients and the working poor are trying to rent the same properties.

A bigger source of unfairness is the divide between the poor in the private rental market and either home-owners on welfare and public housing tenants, that is, before we consider how fair or not the circumstances as between home owners and not are (arguably not: eg, the way a welfare applicant's cash is considered compared to a home-owning welfare-owner's house).

2 tanners said...

They probably still are using the old acronym for Commonwealth Employment Scheme. Heaven knows what it is called now, but I get paid with a benefit cheque and the government pings me for cashing it.

Having looked at the economics of the Defence Housing Scheme, I've never been tempted as they appear to price in all the goodies so you are actually paying for the upfront and necessarily have to negatively gear; I prefer positively geared property. Much more so now in view of the speculation that the days of steady rises in property value are over (steady over a 10 year cycle, with little booms and busts of course).

Anonymous said...

Geez, I give up.

tanners I can point you to three homes in Canberra which were slightly cashflow negative but net income very much positive 20 years ago, which now have each (at the least) more than doubled in resale price - to understate the fact. And then we have marcellous speaking in, what is that, Klingon?

kvd

ps Jim, am intrigued by just what you might have been doing on that 'training course'?

Anonymous said...

tanners, marcellous, let me rephrase the above comment - with apologies:

tanners, Jim asked if I would recommend an investment, and my response was not a statement of absolute - more simply contrasting what I've seen between two systems of administration that I am vaguely familiar with.

marcellous, I am having great difficulty trying to understand your comment - particularly your second para?

kvd

2 tanners said...

kvd

I was in the market for properties from about 1998 to 2006. Despite some really low interest rates and property values and good rental returns, the DHS properties never made it through my initial sorting spreadsheet, even after I deducted a month's rent from non-DHS properties for the vacancies to which DHS properties were not subject. So this was defining cashflow positive as including tax perks (before which most properties were negative), but just looking at the cash in and out after the tax return. Maybe I missed out on some deals, but the returns from DHS properties usually came out at about -2% to -5%. I stopped even looking at the ads after a while. The capital value certainly increased in the 2000-2004 period, but I wasn't investing to make a loss now against an expected profit in the future. As I say, you may have seen deals that I did not. DHS had no shortage of takers.

marcellous said...

kvd, I will try to clarify.

A bigger source of unfairness is the divide between the poor in the private rental market and either home-owners on welfare and public housing tenants.

- The unfairness is that the poor in the private rental market receive rent assistance which at least if they live in a capital city is at most one fifth of their weekly rent. For a single person on the dole the rent could well be about the same as dole plus rent assistance, if not more. ie, their net amount to live on is $0. By comparison public housing tenants' rent is capped at 25% of their DSS income (though they don't receive rent assistance) - so they have about $180 to live on per week if single (just keeping it with singles) on Newstart. Home owners receive the dole from which they need to meet rates and maintenance of the property, but are well ahead. So that's the first unfairness.

"that is, before we consider how fair or not the circumstances as between home owners and not are (arguably not: eg, the way a welfare applicant's cash is considered compared to a home-owning welfare-owner's house)."

First of all I mean by that the question of whether there is an equal starting point (Rawls "original position" from memory) so that it can be considered fair that some people own houses and others do not. We all know there is not, of course.

Secondly, I was referring to differential treatment of homes owned and savings. For example, did you know that, if you had a house, and then sold it, for a year, that money is still treated as though it was your house and so not counted as your asset. But if you never had a house, or sold it more than a year ago, then any money you have saved up towards a house (OK, probably flat) will be counted as cash in hand which, if you apply for welfare, will be counted in possibly in reduction of any welfare entitlements and used in calculation of any waiting period during which you are required to live off that (and deplete it) first.

Anonymous said...

Thanks to both tanners and marcellous for those answers; food for thought - particularly m's expanded comment, which I can now understand.

I guess (as seems usual with me) we've now strayed somewhat from Jim's post - but I appreciate (both) your taking the time to pursue the particular area I was interested in, which itself arose because of Jim's note of concern re housing assistance, in whatever form.

kvd

Jim Belshaw said...

Interesting discussion that drew out some of the complexities involved.

Unlike public housing tenants, community housing tenants receive rent assistance. Their rent is defined as 25% of income plus their CRA entitlement. Community housing organisations can also claim GST rebates. Even though the maximum value of CRA is not that high, the two in combination mean that the public housing system is losing money while the community housing sector is more or less breaking even though it loses money on single newstart tenants.

marcellous' point @ 5:28 on the divide between the poor in the private rental market and either home-owners on welfare and public housing tenants is well taken.

2 tanners said...

My internet's awful at the moment so I won't try and link but in the Canberra Times today, Jack Waterford absolutely savaged Porter and his proposals.

Jim Belshaw said...

Thank's 2t. Will bring the link up in the post.

Anonymous said...

Waterford?

http://www.canberratimes.com.au/comment/welfare-solutions-looking-for-problems-20160923-grmq7n.html

I love articles/opinions like his: "that won't work, and you are either smugly ignorant, or politically opportunist, for even suggesting same!".

Get back to me when Waterford proposes any alternative.

kvd

2 tanners said...

@kvd

I only half agree, and some of that may be because Waterford has a track record of researching his subject and commenting on it in a frank way. He is an old model journalist, the kind whose gradual passing we sometimes mourn in this blog.

Implicit in Waterford's article is the thesis that targeting has already happened and that we have a low cost system, by no means perfect. However, we can save $100 million (none of which would go to welfare recipients) by leaving the system as it is and perhaps thinking about new ways of providing welfare that do not target, humiliate and shame. As an example John Quiggin suggests completely non-targeted, non means-tested welfare. Every citizen, from an aboriginal in Nhulunbuy to Gina Rhinehart, gets the same amount regardless. In cash. Don't know if i agree with that, but despite Porter's calls for left field solutions, he has already explicitly written that one off without substantive reason. He only wants targeted solutions which are administratively expensive and service a very few.

Thanks for getting the link - yesterday's internet was like waiting for the NBN.

Anonymous said...

tanners, like you I mourn the passing of 'old model' journalists - but Waterford is not now providing that; he is a writer of opinion pieces, and he is perfectly entitled to do such. And anyone who reads him is equally entitled to disagree or, more specifically, to point out their differences of 'opinion'.

But I am interested in your comment that what Porter was suggesting was in effect proposing to "target, humiliate and shame"? My reading comprehension must be slipping as I did not have that as the main takeaway from his proposals.

Now to pursue that concept (the non-targeting) as primary purpose, you now cite Quiggin (btw, still waiting on his manual of motorcycle maintenance requested long ago :) who suggests that perhaps everyone be treated to an equal share of the welfare pie. Here's a thought: let's do away with welfare payments entirely; on his theory that is as equally fair, no? And I expect also, that Quiggin followed through on his thought with the rider that everyone should pay the exact same amount of tax? Only fair, and certainly non-discriminatory.

And you finish with "He [Porter] only wants targeted solutions which are administratively expensive and service a very few". Well, gordelpus if governments ever get to the point of solutions which are actually 'targeted'. I guess, much betterish to just spray the money round blindly, hoping something will stick.

kvd

2 tanners said...

kvd

I'm never giving you Quiggin's manual on motorcycle maintenance. It would be a crime against machinery. I did express reservations about his proposal, but pointed it out as an example of a left field solution that has already been ruled out.

The proposal is to find the points of inflexion which will provide Government assistance just at the right time to help people raise themselves out of poverty. They have had one significant victory already - PwC has been raised out of poverty to the tune of $100 million. But Government targeting points in people's lives where it can make such a difference? Tosh! And if you aren't in the class 'deserving' hand-up assistance, then you are obviously never going to succeed and you can stay where you are.

I will lay you a bet that only a very very few will be identified by this scheme, whatever it eventually is, and venture an opinion that Waterford is right and it will be used as a moral case against all other welfare recipients.

Why give everyone the same (perhaps limited to an income bracket or employment status, but using and extremely broad brush)? Because Governments are hopeless at finer discrimination. Their duty is to redistribute resources but that must be matched with their ability. Bet that last is not even considered in the terms of reference.

Anonymous said...

tanners, you, and Jim, and also Waterford, may be right in all you say - leaving as unspoken the inevitable corollary that we should just accept what is, and ignore any chance for improvement.

What a desultory view of life, is all I can say - and this from three people who I'd regard as relative 'insiders' - certainly so, compared to myself.

But I would like to correct one minor point: PwC were not "raised out of poverty" by $100M. That, as I understood it, was the figure suggested to be allocated for these proposed trials. PwC's analysis was merely to be used as an ongoing measuring stick.

kvd

2 tanners said...

kvd,

If I am wrong about who gets the $100m, my apologies.

But I think you have missed the central tenet of my argument. The focus of this is too narrow and too unlikely to succeed, because it is already aimed by virtue of its terms of reference at areas where the Public Service performs least well. There also seems to be no real underlying rationale or even study identifying the systematic existence of these points of inflexion. Plenty of work has gone into other schemes which could already be drawn upon.

Of course we should strive for better, but in a way that has some theoretical and empirical underpinnings that could THEN point to a potential new left-field approach. I'm not happy just waiting for the market fairy to land on my shoulder offering inspiration and miracles.

Anonymous said...

by virtue of its terms of reference at areas where the Public Service performs least well

Not sure I'm comfortable with your understanding here tanners. I thought Minister Porter was inviting application to a seed fund of $100M from expert-in-case parties? St Vinnies, and the like, and measured against some sort of yardstick created by PcW.

IOW who gives a bugger where/how the PS performs "least well"? Perhaps you and Porter have more in common than not as regards PS performance...

Also, focus "too narrow"? See my comment 2above "much betterish to just spray the money round blindly, hoping something will stick"

Disappointed to see you agreeing with my throwaway.

kvd

Unknown said...

kvd,

i have the frustrating feeling that I have miscommunicated my message. I'll think about it then try again.

Anonymous said...

But the question is a real kicker, for how does one define welfare?

This is yet another one of those philosophically cute, but practically pointless musings. Reading the Age editorial, I see that the writer wants to throw in the following:

Indeed, he dodged a question on whether tax concessions for superannuation qualified as welfare measures. The question could have included tax breaks for negative gearing, private health insurance, the capital gains tax and family trusts.

Well, here's a hint: the items noted are outside Porter's portfolio.

Why not also insist he includes a reconsideration of the SA submarine decision? After all, many pundits have noted that is as much about propping up South Australia, as our national defence. Where do you draw the line in actually arguing to the point about any proposition? Too hard? Much better to move not only the goal posts, but the 20 metre line and insist upon three refs, two of which must be female.

Meanwhile what is actually, specifically, proposed gets, in any practical sense, lost in what "the meaning of 'is' is".

kvd

2 tanners said...

kvd

What about family tax benefits? [Policy for that IS in his portfolio] Other things, such as negative gearing breaks are predicated as being an investment stimulant and superannuation as a (partly) self-funding pension substitute, so I agree they aren't welfare in the sense that Porter has a brief to look at.

But why is he looking at bits and pieces? What distinguish these issues so much that they deserve intensive study? And reading his releases I get a real feeling of "If you qualify for this, there is a real chance that one day you will be a productive member of society." I for one am reading the subtext as "...and the others never will."

maybe I'm just a grumpy old commentator.

Anonymous said...

"What about family tax benefits?"

tanners, just because his ministry gets to administer a particular benefit does not mean the minister gets to decide either the amount of, or the appropriateness of, the family tax benefits per se. That is, and always was, part of the government's wider financial budgeting; that would be like saying the bricklayer is the architect.

"But why is he looking at bits and pieces?"

I guess because you have to start somewhere - if you percieve a widening gap between the drip-fed public perception that government is the solution and a realisation that unless you just print $50 notes, something has to give?

"I for one am reading the subtext"

You and Jim seem pretty good at such. Me, I just like to analyse what is proposed, and be informed as to its potential in the specific areas identified. Do you know, out of all the commentary I've read since Porter's announcement, the only comment that directly addressed the specific proposals was Jim's "it'll never work" - and even that was given without reasons.

kvd

Anonymous said...

"What distinguish these issues so much that they deserve intensive study?"

Sorry tanners - missed this one.

If you read either his speech or the press release you "will get the feeling" that the group of recipients is:

a) relatively small in number
b) readily identifiable, hence hopefully measurable as to impact
c) suffering from potentially avoidable "outcomes" - to use your language.

kvd

Anonymous said...

tanners, just to really throw down the gauntlet - to call a spade a spade, as it were – I’d like to play devil’s advocate regarding Porter’s position and proposals:

If you accept that we are really at the point where our paying through the nose for welfare is threatening our national nest egg, then it is a time when we must take some hard decisions, regardless of the hue and cry; not just to curry favour, by hook or by crook – because we will sink or swim by decisions now contemplated.

I accept that Porter is not the apple of your eye, but surely – if you have a minister presenting a baker’s dozen of possible initiatives, and just one works, well – that would be a red letter day!

kvd

ps CHALLENGE: re-word to defend your case :)

2 tanners said...

kvd

Snicker!

You are playing the man and not the in ball your suggestion that I am agreeing to rob Peter to pay Paul to afford welfare. It begs the question of when I suggested such a thing. You have appointed yourself judge, jury and executioner, leaving me facing the whole nine yards.

The distraction he is causing is merely bread and circuses, purposed to draw the eye. He does not propose to do these things himself, leaving his idle hands to be the devil's workshop. If he does this over and over again, as you appear to suggest, well, it's no longer cheap as many a mickle makes a muckle.

We want genuine action, not merely some corroborative detail intended to give artistic verisimilitude to a bald and unconvincing narrative.

Jim Belshaw said...

Perhaps time to buy back into this discussion.

I made it clear earlier that I thought the investment approach could be useful. I do have some cautions, however. The idea of early intervention to avoid later costs is not new. The idea of applying cost benefit analysis is not new. Even application of the New Zealand model in Australia is not new. State Governments at least have had variants in place for some time down to calling for innovative ideas and funding pilots.

What is reasonably new are two things. The first is the use of big data, something that was not possible before. The second (and so far it's a hope rather than a reality) is that by specifically identifying and then measuring returns on particular programs you may actually be able to quarantine those programs from budget vagaries. Too many government programs are terminated or changed before they can deliver real results.

I do not accept at present that the total welfare spend is unsustainable. Consequently, I am not inclined to accept policy prescriptions based on that premise.

I do not accept the assertion that policy responses should be limited to Mr Porter's portfolio. That is anathema to everything I have argued. In the Aboriginal policy space, for example, I have long argued for the need to distinguish between an issue that is Aboriginal specific and one that may have Aboriginal implications but is in fact a subset of a broader question. I have suggested that the failure to make this distinction is one of the primary causes of failure in ATSI policy.

I also do not think that one can ignore political atmospherics in achieving change. The legacy of the 2014 budget is still with us. It is, I think, perfectly appropriate to compare the Government's approach to particular spend in other areas with its approach to welfare.

Anonymous said...

I do not accept at present that the total welfare spend is unsustainable. Consequently, I am not inclined to accept policy prescriptions based on that premise.

a) given we are in a prolonged period of budget deficit, with no realistic end in sight, I find this quite unrealistic. b) a 'policy prescription' based upon making better use of what limited funds we have has my vote.

I do not accept the assertion that policy responses should be limited to Mr Porter's portfolio.

Well of course you don't - because it would mean actually addressing the specific policy suggestions put forward by the minister, in his specific portfolio. No doubt his views on coral bleaching, and SSM, also weigh heavily on your view of his administration of his portfolio - where does it end?

'political atmospherics' is the stuff of daytime tv, and shock jocks. Why the unwillingness to address some pretty simple stuff specific to his area of responsibility?

Still waiting on your thoughts as to why "it'll never work"?

kvd

Anonymous said...

Jessica Irvine of Fairfax seems to take your line Jim regarding the Minister's proposals:

http://www.smh.com.au/comment/single-mums-and-students-targeted-again-in-turnbull-government-welfare-revolution-20161013-gs1lfo.html

kvd

Jim Belshaw said...

She does, doesn't she, kvd? Since we started this conversation, The ACOSS report has come out - http://www.sbs.com.au/news/article/2016/10/16/welfare-should-not-be-seen-norm-govt. The story includes the Government's response

" Assistant Minister for Social Services Zed Seselja says the government is very committed is finding ways to encourage people to look after themselves and get those people off welfare who don't need to be on it.

"Our opponents on the left have pushed, I think, a welfare mentality in this country," he told Sky News on Sunday."

"We simply can't go on assuming for huge numbers of Australians welfare will just become the norm."

He said the government is committed to an "investment-led approach" which may result in more training, more mentoring and more opportunities for internships.

You wrote:
"I do not accept the assertion that policy responses should be limited to Mr Porter's portfolio."

Well of course you don't - because it would mean actually addressing the specific policy suggestions put forward by the minister, in his specific portfolio. No doubt his views on coral bleaching, and SSM, also weigh heavily on your view of his administration of his portfolio - where does it end?

'political atmospherics' is the stuff of daytime tv, and shock jocks. Why the unwillingness to address some pretty simple stuff specific to his area of responsibility?

Still waiting on your thoughts as to why "it'll never work"?

Bluntly, that's silly. I have made it clear before that I can see advantages in the investment approach. I have made it clear that I am concerned about welfare dependence, that I see elements in the current system that do create a welfare dependence even though the outcome is entrenched disadvantage. "more training, more mentoring and more opportunities for internships" has all been tried without result.

Welfare has become the band-aid to more deeply entrenched problems, a band aid that fails to keep the wounds either dry or protected from bugs in the atmosphere. Minister Porter's approach cannot address the problems because so many of the problems do not relate to his portfolio responsibilities. At best, he is likely to pick off a few minor issues.

And, as a final comment, why do you think that it will do more than that?

Jim Belshaw said...

Sorry, kvd. That was too negative. I'm just a bit tired of band aids. It deserves a fuller post

Anonymous said...

And, as a final comment, why do you think that it will do more than that?

You mistake my interest in this Jim. As a general rule, it would not matter to me what particular suject we are discussing - it could be a proposed rule-change for Rugby Union, or manned flight to the moon for all it matters.

What does matter - or at least interests, is a comment such as "it'll never work" not being accompanied by a) an explanation as to why, or b) an alternative suggested approach. There is nothing personal in this, save for the fact that yours is an opinion I've come to greatly respect.

kvd

Jim Belshaw said...

I did provide an explanation, kvd, although it may not have been an adequate one.
"I will call this one now. I think that Mr Porter's approach is likely to fail. I say so for a number of reasons.

The investment approach can be applied in multiple contexts and political frames. It is a tool. In linking it to ideology, in suggesting that it is the start of a revolution, Minister Porter is attempting to use a tool to justify, support, a broader position.

That broader position has been tarnished by the previous over-reach of the Abbott Government. The New Zealand approach of explain, incremental change, test, explain, more change, test, explain etc doesn't work when people don't trust you. Here Mr Porter's position on the New Start Allowance (the Australian equivalent of the dole) is indefensible.

It may be true, as Mr Porter argues, that dole recipients receive (on average) several benefits, but when you total them up, the value of the dole remains penurious. That was accepted several years ago by both business and social welfare groups It remains true. But the image of a man who receives more in daily travel allowance than anybody on the dole receives in total is not good atmospherics.

Finally, there appears to be a growing disconnect between the data itself and Mr Porter's arguments. The main cost drivers are not those Mr Porter focuses on, but reflect changes (among other things) in the demographic structure of society, including the growing importance of the old age pension."