JOIN LABOR'S CULTURE OF IDEAS

Demonising disability pensioners won’t help them into work.

The government needs to find a better way.

Manufacture a crisis. Find a scapegoat. Vilify them. Take ‘drastic’ action.

It is policy making straight from the conservative playbook. Yet again we have seen it from Liberal Minister Kevin Andrews as he ramps up his attack on disability pensioners and their carers.

Claims of an unsustainable welfare system are all about laying the groundwork for deep cuts to some of the most vulnerable in our community. As with all scare campaigns, the truth is a little different to the myths being peddled.

 

Myth #1: Disability Support Pension numbers are growing too fast

There are more than 800,000 Australians on the disability support pension. That’s a lot. It is around one in twenty working-age Australians. About the same ratio as it was in 2000 and close to the OECD average. One of the factors driving growth is simple: the number of people on DSP has grown as our total population has also grown.

Due to a series of reforms enacted by the previous Labor Government, growth in the number of people moving onto the DSP has slowed dramatically. In the last twelve months overall growth has stopped, and declined.

The statistical report released last week by the Minister showed that on 30 June 2012 there were 827,460 people on the DSP. What the report didn’t show – but Senate Estimates did – was that one year later, on 30 June 2013, this had fallen to 821,738.

That’s a decline of almost 6,000 in the last twelve months. While not numerically significant, it is the first time this has occurred in thirty years.

And by September 2013 (the latest publicly available figures), at 825,238 there will still be fewer people on DSP than in July 2012.

A far cry from the ‘relentless growth’ as claimed by the Minister.

 

Myth #2: People on DSP aren’t really that disabled

Listening to the way conservative politicians talk about people on a disability pension, you would think that everyone on DSP has a dodgy claim to have a dodgy back. Or worse, that for some reason having a mental illness shouldn’t be good enough to qualify for the disability pension.

In 2012-13, just 212 DSP recipients were found to be ineligible for the DSP on medical grounds. That’s less than half of one per cent of all disability pensioners.

Disability pensioners are subject to medical review by Centrelink if they advise their condition has improved, or suspicion is raised that they may no longer be medically eligible, though a tip-off or other reporting mechanism.

Systematic medical reviews of disability pensioners were abolished by the Howard Government in 2003 – saving nearly $90 million.

Doing more reviews of disability pensioners didn’t find them any less disabled; it just cost the taxpayer a lot more money.

 

Myth #3:  Costs of pensions are unsustainable

Actual expenditure on the Disability Support Pension in 2012-13 was $14.99 billion. By 2016-17 this will be $17.86 billion.

The DSP is currently the fifth single largest item in the Commonwealth Budget, behind grants to the States, the age pension, family payments, and Medicare. By 2015, the DSP will have dropped from fifth place to sixth place on this list, overtaken by ‘assistance to the States for healthcare services’. The relevant Budget table (Table 3.1) is available here.

Overall welfare spending is not the fastest growing area of the Budget. In fact Commonwealth Budget papers say “health spending is forecast to grow at a faster rate in real terms than … social security and welfare spending over the forward estimates period” (BP 1, p. 6-8). The same analysis was also in the last Intergenerational Report for the period to 2050. Furthermore Australia ranks near the bottom of OECD nations when it comes to total welfare spending as a proportion of GDP.

The fastest growing area of government health expenditure has been rebates for private health insurance. This will grow even faster once the Government reverses all of Labor’s changes that made the private health insurance rebate more sustainable.

Four years ago Tony Abbott, Joe Hockey and Kevin Andrews voted for the largest dollar increase in the disability pension in our nation’s history. At the time they supported disability and carer pensioners getting an increase in their payments. Now they say these pensions are unsustainable. The hypocrisy is breathtaking.

 

Attacking disability pensioners grabs the headlines, but it may be their carers who are in the firing line. While the age pension and family payments were exempted from review, carers were not. Using the Minister’s ‘crisis’ logic, the number of people on a carer’s pension, and spending on that pension, has grown far more dramatically than the DSP. The 2012 statistical report shows that over the last ten years the number of Australians on the DSP has grown by 26 per cent; the number on the Carers Payment (the pension for carers) has grown by 206 per cent – or eight times as fast. By the end of the Budget forward estimates, spending on payments to carers will overtake higher education on the ranking of top items of Commonwealth spending.

People with disability, their families, and carers should be rightly concerned about the rhetoric and approach of this Minister and this Government.

Responsible government should always be looking at ways to keep spending under control. No area of government should be off-limits from regular examination. But deliberately peddling myths to set up a vulnerable group in our community for cuts is mean and tricky.

A proper and thorough review of social security payments, their adequacy and interactions should be welcomed. These issues were briefly addressed in the 2010 Henry Review, but understandably was not the main focus of that exercise.

This thorough review should examine, as a priority, how do we encourage more disability pensioners to try and get back into work. Currently only eight per cent of disability pensioners have any earnings from work. Given the rhetoric from government, many are afraid that if they try work, then Centrelink will come knocking and subject them to a medical review. One of the policies adopted by Labor in 2012 was to increase to 30 hours per week the number of hours someone on DSP could work before they were ineligible for DSP on work capacity grounds. We need to see whether this policy change is working, or what other changes might be worth trying, before needless threats of ending entitlements cause many to give up their efforts.

Getting people with disability into work will also need support from the employment service and disability employment service system.

To do the job of a review properly more time and more consultation is needed.

The record of the previous Government’s slow and steady reform approach – free of demonising rhetoric – can yield results.

Labor’s series of disability reforms were undertaken methodically, over a number of years, working together with the disability sector.  Not everyone agreed with all of the changes, but worked together on policy detail and implementation.

The best example of this was the complete overhaul of the DSP assessment procedures, including a 2010 re-write of the Impairment Tables that assess level of disability needed to qualify for DSP. This was a long and consultative process, it had its critics, but was led by the disability sector and it worked. It should be a template for future reform.

If disability pensioners think the Government is out to get them, then they won’t take a chance on work. Lifting the rates of participation of people with disability and their carers is far too important to be scuttled by the sort of rhetoric that has kicked off this debate.

The Government should try a different approach.

About Ryan Batchelor

Ryan Batchelor

Ryan is a member of the Board of Directors of the Chifley Research Centre. He served the previous Labor Government as Policy Director to Prime Minister Julia Gillard and as Chief of Staff and Senior Adviser to Minister Jenny Macklin. He also worked as Labor’s Campaign Policy Director during the 2010 and 2013 Federal Elections. After spending some time living and working in Timor-Leste, he is currently a graduate student in the United Kingdom.

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