PRIME Minister Malcolm Turnbull has refused to say whether welfare spending needs to be reined in as figures show some Australians are better off not working.
Cabinet ministers have this morning admitted new figures showing thousands of parents on family benefits can earn more on welfare than getting a job demonstrate the need to reconsider welfare spending.
But Mr Turnbull has failed to directly address the issue.
I agree with the principle that the welfare system should always encourage people to get into employment, he told Neil Mitchell on 3AW radio on Friday.
Were dealing with peoples lives here.
Mr Turnbull said the government needed to ensure it was providing the right level of support in a fair and compassionate way, but there must also be incentive for people to find work.
The best form of social welfare is a job, he said.
Data published in The Australian showed the top 10 per cent of those on parenting benefits about 43,200 people received at least $45,032 in 2014-15.
The tax-free figure exceeds the national median overall take-home pay, when part-time workers are taken into account, of $39,841, the newspaper reported.
Speaking on Nines Today, cabinet minister Christopher Pyne conceded the governments welfare offering was generous.
We do have a generous safety net, but also, people need to be part of our society, part of our community, working and making a difference, he said.
Mr Pyne said because of this, the government had legislation before the Senate that would rein in welfare.
One of the governments first measures to change the system is a $96 million Try, Test, Learn fund for trials of intervention programs to help welfare-dependent young families.
Mr Pyne said it was designed to help families, especially single parent households, to get back into the workforce with training.
Ninety six million, I can tell you, to try and do that, is a drop in the ocean compared to the billions of dollars that we are trying to save by having welfare reform, which the Labor Party is blocking in the Senate with the Greens, he said.
A new paid parental leave crackdown will leave 47% of new mums worse off. #9
Labor frontbencher Anthony Albanese said the opposition would examine the impact of proposed changes.
He pointed to the governments planned wind-back of paid parental leave to stop some women from double-dipping.
It is a disadvantage for them being in the workforce if these cuts to paid parental leave go through, he said.
Social Services Minister Christian Porter, who is leading the welfare changes, told The Australian depriving people the incentive to work was in no ones interest.
It is morally incumbent upon us in that in developing policy ... and in making the welfare system fairer we look at mutual obligation and the requirement to prepare for, search for and accept work, he said.
We need to find better ways to ensure parents retain current, work-ready skills or develop them, even when receiving welfare so they are prepared for and able to accept work when it becomes appropriate for them to do so.
THE annual ritual of submitting your tax return is about to come to an end as the deadline approaches on October 31 (for those taxpayers who don’t use a tax agent).
Most organised people will have already had it done and dusted and hopefully will have received a tidy sum in return from the Australian Taxation Office.
Its a sign of a financial years hard work done, and a reward for either paying too much tax, or being prudent with your deductions.
However, like a sore thumb, the inevitable question sticks out around how you should use that refund, which for some people could be substantial.
While its always tempting to see that money as free and use it to buy something for yourself, its better to think of the refund as a kind of forced savings the government is giving you those savings back, and they should be put to good use.
Here are a few ways you could make sure that money isnt sitting idle, and maybe making some back for you.
1. INVEST YOUR REFUND
Even refund amounts as small as $2000 are enough to invest, whether in shares or managed fund type investments. Any amount, no matter how small, could become the kick-off to your kids trust fund. While its not enough to begin a sizeable portfolio, wisely investing the amount into one or two stocks could see you benefiting in the long term.
2. PAY OFF YOUR CREDIT CARD AND LOAN DEBT
Minimising the balance on your credit card or loan is another quick and easy way of putting that refund to good use. That way, you can instantly reduce the amount of interest you pay. Even for sizeable balances, putting your tax refund toward those credit card debts and loans can remove the bite from those monthly repayments.
3. PUT SMALL AMOUNTS IN HIGH INTEREST SAVINGS ACCOUNTS AND TERM DEPOSITS
If your tax refund is too small to invest in shares or in a managed fund, a high-interest savings account or term deposit could be an easy way to make your money work for you over the long term. These can provide returns of between 3 and 4 per cent per annum currently, providing a consistent return six or 12 months down the road.
4. PAY OFF HECS DEBTS WHERE POSSIBLE
For those with small HECS/HELP debts, it would be worthwhile using your tax refund toward paying this off more quickly. If you make a voluntary repayment of $500 or more, you will receive a bonus of 5 per cent. This means your account will be credited with an additional 5 per cent of the value of your payment. If you can pay this off in full, you can stop your employer from taking extra tax out of your pay each period.
However, if you have a large HECS/HELP debt, it may be more beneficial to use one of the other options and continue to pay this off through your employer with each pay cheque.
5. LIVE A LITTLE
If youve exhausted the above options, and you still have a little refund left over, live a little! Dont blow it of course, but using that unexpected windfall towards a small luxury can bring you a little happiness.
Disclaimer: Information provided above is of a general nature and is not intended as advice and does not take into account your personal situation. Please consult your financial and/or tax adviser for specific advice.
James Solomons is head of accounting at cloud accounting software firm Xero Australia