20/09/2016 10:36 AM AEST | Updated 20/09/2016 12:19 PM AEST

A New 'Investment Approach' To Breaking The Welfare Cycle

Young carers, parents and students are the target.

SYDNEY -- The Turnbull Government is targeting young carers, parents and students in a "revolutionary" new attempt to break the cycle of inter-generational welfare dependency which "too often makes life worse".

The Social Services Minister Christian Porter will outline Tuesday a new "investment approach" to welfare, while releasing an "eye opening" analysis showing the total future cost of Australia's welfare system may spiral to $4.8 trillion.

Mr Porter said "Work is the goal. Unashamedly."

But, he said this new approach - based on a New Zealand model where the government there has claimed to have saved $12 billion - is not simply about saving money in the social services portfolio.

The Minister insists welfare is failing people. "We are trying to move people out of the system," he told the ABC. "We're using employment as a proxy for the better life."

The 15 years' worth of data presented in the "Baseline Valuation Report", prepared by accounting firm PricewaterhouseCoopers (PwC), is the first stage in the Turnbull Government's new approach to tackling inter-generational welfare dependency.

Australia spends $160 billion annually on direct welfare payments and the report reveals, without further restraint by 2026, it will balloon out to $277 billion.

The Social Services Minister is particularly concerned about young people caught in the welfare system.

The analysis reveals:

  • For 11,000 young carers, it is expected, on average, they will access income support in 43 years over their future lifetime at a cost of $5.2 billion
  • For 4,370 young parents it is expected, on average, they will access income support in 45 years over their future lifetime at a cost of $2.4 billion; and
  • For 6,600 young students it is expected, on average, they will access income support in 37 years over their future lifetime.

Mr Porter said welfare is not making life any better for Australians caught in the system and "too often it seems to make life worse over the long run."

"The human cost of lost opportunities, of lost potential, is a terrible result of the system that we have in place at the moment," he said.

The Turnbull Government's will create a $96 million Try, Test and Learn Fund which get key groups such as not-for-profit organisations competing for proposals to get people out of the welfare system.

"The investment approach is about finding new, novel, innovative, brave ways to target policies at that group and break that long-term cycle of dependency," Mr Porter said.

Young carers, young parents and young students will be the first priority groups and older groups will follow in the program's later stages.

Programs that do not work will be discontinued.

Labor's Jenny Macklin wants to see the program in action.

"There are some positive reports, but there are also some examples of where the New Zealand Government too has cut, and left people with nothing to live on and of course that is not going to help them get in to work," the Shadow Families Minister told ABC Newsradio.

"Cutting benefits for young people and leaving them with nothing to live on is not investing in them."

Be honest Christian Porter... real jobs are scarce. Sadly welfare reform is about blame and budget slashing@cporterwa#auspol

— Order No.227 (@AnthonyCole68) September 19, 2016

The Turnbull Government said this "investment" approach was recommended by the McClure review into Australia's welfare system.

"The data we have points to the obvious fact that something must be done," Mr Porter will tell the National Press Club Tuesday.

"Revolutionary change is required, but required in stages, which shifts the focus on to real people for whom the mere passive receipt of welfare is failing, sometimes spectacularly, to actually make their lives better."