Fed: Welfare system is counter-productive: report

AAP General News (Australia)
12-10-2003
Fed: Welfare system is counter-productive: report

SYDNEY, Dec 10 AAP - The welfare state and its tax burden are counter-productive, helping
to push more Australians into welfare dependency, according to a new report published
today.

The report, published by the Centre for Independent Studies, said most people could
afford to save for their retirement, education or to insure themselves during periods
of unemployment if they were not being taxed so heavily.

Entitled "A Self Reliant Australia: Welfare Policy for the 21st Century", it outlines
a strategy for welfare reduction by reforming the existing system of income support and
taxation and by boosting job opportunities.

"The current system of government handouts is ineffective, demeaning and perpetuates
welfare dependency rather than self-reliance," argues the report's author, Peter Saunders,
director of Social Policy Research at the Centre.

"Forty years ago, there were 22 employed workers for every one person reliant on welfare
payments.

"Today that ratio is just five to one.

"The more people there are on welfare, the higher the taxes become on those in paid
employment and the weaker become the rewards and incentives for people who work to remain
self-reliant."

His plan suggests several key policy changes to bring the system back on track.

He proposes deregulation of the labour market to get more people back into paid work
combined with a tightening of the eligibility for income support.

This would work in conjunction with tax cuts to allow people to build up financial
reserves, and an end to middle class welfare support.

AAP ceh/was/sjb

KEYWORD: WELFARE

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