Labor says Coalition's plan to cut welfare benefits not justified PT2M35S http://www.smh.com.au/action/externalEmbeddedPlayer?id=d-3163l 620 349 January 21, 2014 Labor has accused the Abbott government of exaggerating welfare spending to justify cuts, pointing to figures that show Australia spends less on welfare than most developed nations. Figures compiled by the Organisation for Economic Co-operation and Development show Australia's spending on welfare benefits last year accounted for 8.6 per cent of national economic output - well below the OECD average of 13 per cent. Of 34 industrialised nations, only Iceland, which spent 7.3 per cent of GDP on payments, put a smaller level of economic output into welfare than Australia. Social Services Minister Kevin Andrews has flagged an overhaul of the welfare system saying it is unsustainable. Four European nations - France, Italy, Belgium and Austria - were the biggest spenders, each allocating more than 19 per cent of their GDP to welfare payments including age and disability pensions, unemployment benefits and family payments. Britain spent 12.2 per cent of GDP on social security, while the US spent 9.7 per cent. Social Services Minister Kevin Andrews said this week that "relentless" growth in spending on welfare was "unsustainable." He has commissioned former Mission Australia head Patrick McClure to review the welfare system, with a focus on the Newstart Allowance unemployment benefit and the Disability Support Pension. "We've got to ensure in the future we're able to sustain the welfare system, otherwise we'll find ourselves in 10 or 15 years in the situation some of the countries in Europe are in," Mr Andrews said on Tuesday. But Labor's spokeswoman on families and payments, Jenny Macklin, said the OECD figures disproved the government's "scare" on welfare spending. "This clearly shows the government's claims that Australia is heading for some sort of welfare crisis is complete rubbish," she said. The Coalition is trying to scare Australians into accepting a savage round of cuts. Ms Macklin criticised Mr Andrews for excluding the Coalition's $5.5 billion paid parental leave scheme - in which the baby's primary carer would receive six months' leave on full pay, up to a maximum of $75,000 - from the McClure review. "If the Prime Minister wants to tackle welfare reform, he should start by scrapping his ridiculous expansion of middle-class welfare on the back of low-income earners, pensioners, carers and people with a disability," Ms Macklin said. Mr Andrews has defended the parental leave scheme, saying it should not be regarded as welfare but a work-related payment. "It's a measure which ensures two things, one is we continue to grow our population, and secondly we continue to have enough workers in the workforce - that's very much an economic matter related to the future economic growth of the country," he said. Economists have criticised the government for excluding from the review consideration of the age pension which, at a cost of $36 billion a year, accounts for roughly half the welfare budget. The Newstart Allowance and the Disability Support Pension cost respectively $7.5 billion and $15 billion a year.