The case for change
An unsustainable budget position and high government spending growth, particularly in welfare payments, requires decisive action.
An unsustainable budget position
Government spending has grown rapidly. From 2007‑08 to 2013‑14, government real spending has outgrown the growth in the economy by over 13 per cent.
As a result, the Government has inherited a budget position that is unsustainable for the long term.
This requires firm and decisive action to put the Budget back onto a secure and sustainable footing. To delay action would only exacerbate the problem, imposing an ever increasing financial burden on future generations.
Changes to our population
The ratio of people of traditional working age to support those aged over 65 will decline from five in 2010 to just under three in 2050.
Between 2010 and 2050, the number of people aged 65‑84 will more than double and those aged 85 and over more than quadruple. This will present further challenges for economic growth, living standards and government revenue.
Given these pressures, government spending on many welfare programmes will continue to grow strongly unless changes are made to their structure.
(includes Government decisions)
There are periods in life when people are unable or not expected to participate in paid employment, for example if they are caring, or retired. During these times the Government will continue to support those who need it most.
However, we have made tough decisions to pull back payments where it is too easy for capable and able people neither to work nor study. This will support the sustainability of Australia's finances and the welfare system as the population ages.
Supporting individual responsibility, contribution and workforce participation
The Government's welfare changes pare back the widening gap between community expectations and what governments can - or should - realistically do.
Individual responsibility should be a driving force for building a stronger and more prosperous Australia.
While the Government will continue to support the most vulnerable, it will do for people only what they cannot do for themselves.
The changes are also designed to support people entering and staying in the workforce to the greatest extent possible. This will not only ensure a more sustainable welfare system, it will provide individuals with the incentives to support themselves and their families.
