Class Wars Aussie style

Having been a "client" of Centrelink over many years and seeing the way they assume everyone is out to rip off the Social Security system, I was very interested to read this article in the Sydney Morning Herald which makes comparisons between the way the Government pursues welfare cheats as against the way it fails to pursue tax cheats.

A couple of key paragraphs and then a link to the full article follows:

If tax cheats were hounded as assiduously as welfare cheats, Australia would be better off. But under the old regime, welfare cheats - so-called - were pursued to the ends of the Earth while tax cheats slid under the radar.

Millions of dollars were poured into detecting welfare fraud while in the last years of the Howard government one-third as much was spent tracking down tax cheats, according to budget papers.

Hardly a day went by without the subject of welfare fraud exploding into tabloid headlines, bolstered by a ministerial announcement - a new dob-in-a-cheat hotline or the jailing of a particularly evil fraudster.

It gave a false impression that welfare fraud was rampant and committed by savvy criminals. In most cases, in fact, the sums involved were small and the causes complex. Little was ever said about tax cheats, though they were likely to have robbed the revenue of much more money than any single mother.

In 2004-5, Centrelink did 3.8 million reviews of social security payments while the Australian Taxation Office did fewer than 2 million reviews, despite its much larger client base.

The Centrelink reviews identified $390 million in debt while the Tax Office reviews identified $5.14 billion plus $1.6 million in penalties and interest owed. The average social security debt was less than $1000 while the average tax debt was many times greater.

Research by Greg Marston and Tamara Walsh, of the University of Queensland, who tracked 80 social security fraud cases, found the defendants to be needy rather than greedy. They were more likely to be uninformed, sad people, living close to the poverty line. The most common violation was to under-declare to Centrelink income earned from casual or intermittent work, and so be paid an incorrect welfare benefit. A good behaviour bond was the typical penalty.

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