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McClure Welfare Reform Report Provokes Debate

The release yesterday of the McClure report on social welfare reform has met with largely bipartisan support from Australia’s political parties, although this is likely to change when the government announces which recommendations it intends to adopt.

The report recommends the replacement of a range of welfare payments with a single payment accompanied by a series of rewards and penalties.

The welfare debate forms part of the Howard Government’s policy of “mutual obligation”, a philosophical idea that calls upon welfare recipients to do something in return for government assistance.

An interesting article in today’s edition of the Australian Financial Review, “Get our corporations off the dole”, by Brendan Pearson, argues that there is a paradox at the heart of this debate:

“Payments to the unemployed and the disadvantaged are welfare, while handouts to the business sector, whether through direct payments or tax breaks, are an “investment”. One creates a culture of dependency, the other is a crucial element of a vibrant industry policy.”

The news media in its reporting this week of the McClure report makes repated references to the $50 billion welfare budged. Pearson gives instances of corporate welfare – the “$2.75 billion of assistance to the automotive and textile sectors over the next five years… hundreds of millions of dollars in taxbreaks for research and development, hundreds of millions of dollars in innovation support and export assistance, not to mention the billions of dollars in special favours for the health insurance and superannuation sectors.”

Pearson concludes: “Discussions of welfare reform should not be limited to 16-year-old single mothers and other welfare dependents. The corporate sector is not immune to the temptations of an entitlement mentality. It should also not be immune from reform.”

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