Earn over one million dollars a year – and receive welfare benefits!

In the 2011-12 budget, spending on social security and welfare is $121 billion – almost one third of total Commonwealth government spending of $365 billion.

How could we be spending such a massive amount of money on welfare?

Well, one reason is the careless way that benefit money gets splashed around – including going to people who do not need it.

There is a remarkable table in the 2009-10 Annual Report of the Department of Families, Housing, Community Services, and Indigenous Affairs, which indicates that in 2008-09, six families with incomes of over one million dollars received Family Tax Benefit A, and three families with incomes of over one million dollars received Family Tax Benefit B.

True, these are small numbers of families.  But why should any family earning one million dollars need to be paid benefits by the federal government?

I asked a question on notice of the Minister, Jenny Macklin – not someone who gives much evidence of having a burning passion for securing cost efficiencies.  Her answer was not reassuring.  One reason, she said, might be people who received income support for part of the year and earned higher incomes for the rest of the year. Another might be Age Pension recipients who are legally blind and hence not required to declare their income or assets.

Each of these answers raises some obvious questions.  If you finished the year earning an income exceeding one million dollars, why would you not be required to repay the amount you received earlier in the year?  And if you have a high income, why are you automatically entitled to receive benefits if you are legally blind?

Quite apart from these specific issues, what is troubling is the complacent mindset which Jenny Macklin’s answer reveals.  There seems little enthusiasm or energy for protecting taxpayers against making unnecessary payments; and no embarrassment about administering a system which can result in people earning over a million dollars a year getting government benefits. 

Of course we must support those in need who cannot support themselves – but why is the system so carelessly designed and administered that money is being splashed around to people who have no need of it?  We need to fix this system – but as long as Jenny Macklin is in charge there is not much prospect of that happening.