The Australian Welfare System: A Case Study

The 2106-2017 Australian budget is the result of over twenty years of neoliberal policy reforms. This paper examines the key strategies designed to support the Australian welfare system in the budget. These measures include; more jobs, economic growth, tax reform and cutting Government expenses. A discussion on how tax expenditures in the 2016 budget oppose the Australian welfare system. Similarly, the Jobs for Families Package (JFP) are discussed as a tax expenditure that opposes the Australian Welfare system/state. Definitions of key terms such as, tax expenditure, revenue forgone, quality of life, neoliberalism and rich elite are presented. Finally, the proposed tax expenditures in the Budget are targeted at wealthy Australians thus ineffective

Firstly, people that choose to work will be supported by the Government with a child care subsidy funded by the restructuring of the Family Tax Benefit payments. Changing the eligibility requirements of current welfare recipients and denying new applicants access to carbon tax compensation funds. Closing current health schemes and nationalising future schemes such as the Child and Adult Public Dental Scheme and The National Disability Insurance Scheme. Further, they intend on reviewing and insisting on medical revaluations of Disability Support Pension recipient’s. Conversely, all of these measures mentioned above are the current Governments design to support the Australian welfare system. For example, “The Government is committed to maintaining a sustainable welfare system by ensuring that those who are able to work are supported and encouraged to do so” (Commonwealth of Australia 2016, Budget Overview, p.

1, s. 4, p. 20) or forgone earnings. Forgone earnings are basically the earnings that could have been achieved and/or obtained had the circumstance been different (BusinessDictionary.com, 2016). Income is defined as reward for service, profit on business, return of an investment or some form of regular payment (Redfern Legal Centre 2014, p.1272 ) However, the Government defines revenue forgone as an approach whereby tax revenue is estimated between the existing and normal income tax treatment of its citizens (Commonwealth of Australia 2016, Budget Paper No. 1, s. 4, p. 20). Further, the Government states that these expenditures may be contentious because they treat tax payers differently based on their economic activity and/or their economic class. In addition, the expenditure is not considered revenue and warns that, if tax expenditures were abolished, revenues may not increase due to changes in the behaviours of the recipients of the tax benefits (Commonwealth of Australia 2016, Budget Paper No. 1, s. 4, p. 20). Howard (2007, p. 56-57) states that people who benefit from the tax expenditures have a louder political voice because they fund, and actively participate in policy formation thus shape the governing power of a nation. For these reasons, tax expenditure hinders the fair distribution of tax revenue. The Government’s failure to collect