There is a well organised and vociferous welfare lobby in Australia that keeps pushing for even higher government spending. To justify their claims, they often refer to poverty statistics, arguing that poverty is widespread and getting worse. Part of the work of CIS has been to challenge these claims by showing how definitions of ‘relative poverty’ have exaggerated the scale of the problem, and how measures have been based on unreliable income statistics.

To the extent that it exists, poverty in Australia is a product of joblessness. The solution is not to increase welfare payments but is to get more claimants into work. In the 1960s, just 3% of working-age adults relied on welfare payments as their main source of income. Today the figure is around 16%. Much of the work published by CIS has focused on how to reform the welfare system in order to reduce this high level of dependency.

It is also important to re-examine the way the tax and welfare systems interact. Many households today pay large amounts of income tax to the government every fortnight only to get their money churned back to them in the form of family payments or other government welfare services. Australians could be much more self-reliant if they were allowed to retain more of their own earnings in return for reducing their dependence on what government provides.

Key questions:

• Is poverty a serious problem in Australia and what kinds of policies are most appropriate for reducing it?
  
  
• Why has welfare dependency escalated over the last forty years and how can it be reduced?
  
  
• How can people be enabled to take more responsibility for their own lives rather than relying on the state to provide services for them?