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Coalition Save $1.1 Billion In Election Costings With Welfare Crackdown

There's another judgement day on the horizon.
More than $2 billion in savings over the next four years will come from a welfare crackdown.
More than $2 billion in savings over the next four years will come from a welfare crackdown.

A crackdown on Australians misusing the national welfare system will help the Coalition deliver $1.1 billion in savings this election.

Treasurer Scott Morrison and Finance Minister Mathias Cormann delivered the final costings of the election campaign in Canberra on Tuesday afternoon, revealing the Coalition's $1.2 billion in spending announcements during the campaign would be allocated in $2.3 billion of savings measures. Both are figures projected over the next four years.

By implementing smarter technology and strategies within the welfare system, the Coalition will claw back more than $2 billion in funds from welfare recipients claiming more than they are entitled to, as well as preventing further misuse. This includes Australians on the pension.

"We are not weakening the system, we at strengthening it, so those entitled to those payments and support... they get that support. But to ensure that the system doesn't have the leakage and the waste and the overpayments or the abuse of the system -- which at the end of the day cost Australian taxpayers -- we are strengthening it," Morrison told reporters in Canberra on Tuesday afternoon.

"The efficiencies we believe we can achieve through these additional measures represent 0.3 percent of the spending of the Commonwealth in four years," Cormann added.

"The Commonwealth is expected to pay $688 billion on welfare payments."

The savings measures announced on Tuesday -- which are in addition to any savings announced in the May budget -- were costed by the finance department before the election, and consequently, before the Government went into caretaker mode.

To clarify what the "use of smarter technology" is exactly, the Coalition's Social Service's Minister Christian Porter released a statement breaking down the changes to the welfare system.

The welfare system will be further overhauled with these changes:

  • enhance the integrity and compliance of social welfare payments through improved employment income and non-employment income data matching.
  • improve engagement with welfare recipients to better ensure they meet their obligations before problems arise.
  • ensure welfare recipients accurately disclose assets and investments.
  • improve the capability for the identification and recovery of debt owed to taxpayers.

The Coalition also announced $864 million of uncommitted funds in the budget would contribute to the $2.3 million in savings.

The election savings, which are the final costings to be released before July 2, are a stark contrast to Labor's costings which put the Government into further deficits over the next four years (you can read all about those here).

Shorten was criticised for banking the Coalition's $3 billion in superannuation cuts without releasing a Labor policy. The Opposition leader also did not reinstate the $57 billion in health funding which was promised after the Coalition made cuts in the 2014 budget.

On Tuesday afternoon Labor's shadow Treasurer Chris Bowen returned fire, and questioned the Coalition's savings measures. Bowen demanded to know how many people the welfare crackdown impacts and how these savings differ to the $5.7 billion in savings announced in the budget under "compliance measures".

"This government has a habit of announcing compliance measures with very significant amounts of money attached to them but, of course, we would like to see a report on just how successful those measures have been in considering the government's [new] measures."

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