The World Today – ABC – Tuesday 21 October, 2014

NICK GRIMM: The Federal Minister for Social Services Kevin Andrews says the Government will need to spend at least a billion dollars to rebuild the “antiquated” computer system underpinning welfare payments. Mr Andrews says substantial welfare reform will take two terms of government, citing the need to modernise the IT system first. He’s expecting to receive the final McClure Inquiry recommendations next month. He spoke to Alexandra Kirk.

MINISTER ANDREWS: If we can’t upgrade the system, then that holds back what we’re capable of doing.

ALEXANDRA KIRK: Is there money in the budget to upgrade the system?

MINISTER ANDREWS: Well, the budget is just being started, the process of looking at the 2015/16 budget; that process is just starting now. But, obviously there is some recognition that, if we want to make changes, we need to have up to date IT and that’s what I’ll be proposing.

ALEXANDRA KIRK: And how outdated do you think it is?

MINISTER ANDREWS: It’s frankly antiquated. It’s been there for decades and it does need upgrading and, if we want to make changes and we want to have a more efficient system, and indeed a much more user friendly system, then we’ve got to make the upgrades, because information technology, IT, progresses at a very fast rate, and to have a system which is years and years old now, just is out of date.

ALEXANDRA KIRK: Do you know how much it would cost to upgrade it in the way you would like?

MINISTER ANDREWS: Look, these costs will probably be in the order of at least a billion dollars. IT upgrades and putting in new systems are not cheap, but we’ve got to look at this in terms of something that would probably last another two or three decades once it’s put in place, if we go on the history of the previous system. So, whilst there is a big upfront investment, obviously that is something which is in effect appreciated over a long period of time.

ALEXANDRA KIRK: Have you talked to the Prime Minister about freeing up the money to do it?

MINISTER ANDREWS: Look, I’m not going to go into the detail of the budget discussions, but obviously this is something which I believe is important.

ALEXANDRA KIRK: Is it necessary before you really embark on any substantial changes to the welfare system?

MINISTER ANDREWS: Some changes we can make but others would be very much compromised by not having a modern IT system, and it would be much slower to implement, and some we would have difficulty in implementing without changes to the IT system. So I see the IT system as integral to any reform of welfare, and it’s for that reason that, whatever Mr McClure suggests, there may be aspects of it that would require the rebuilding of the IT system, which would take a number of years before they could be put in place.

ALEXANDRA KIRK: And, would that be needed in order to reduce the number of payments, or types of payments, in other words, to rationalise the plethora of welfare payments that exist now?

MINISTER ANDREWS: To reduce the current 75 or so payments, allowances and supplements down to a more manageable number of perhaps somewhere between 20 and 30, does require very substantial and significant changes in the IT system, and to do that, at least in many instances, we would need to upgrade the IT system.

ALEXANDRA KIRK: So you’re not of a view that one core payment or basic payment is the way to go, which is what the original McClure report suggested, nor the four or so that he’s recommended in his latest report?

MINISTER ANDREWS: He looked again at one universal payment, and the interim report wasn’t in favour of that. The interim report was suggesting that there should be four core payments – obviously some other allowances and supplements, and how many of those would depend on the detail. So, whether it’s four or five or six core payments and then some number of allowances and supplements, overall what we hope that we can achieve is that we get down from the 75 to somewhere in the order of perhaps 20-25, including the core payments and a lesser number of supplements and allowances.

But, in the end, this is a balance because, the more of these supplements and allowances you have, the more you can actually target to individual circumstances, but the problem is, this system has become so complex over time that it’s very difficult to navigate through it, and so we’ve got to find some compromise between the two.

NICK GRIMM: The Minister for Social Services Kevin Andrews, speaking to Alexandra Kirk.