Australia risks echoing Greece's financial mess if it fails to address ballooning welfare spending, the federal government says.
Social Services Minister Scott Morrison believes there's no better example of what happens with an unsustainable welfare system than the debt-ridden EU nation.
"While that may seem a remote prospect for a country like Australia, 20-30 years ago I suspect people in Greece felt the same way," he told a conference in Sydney on Thursday.
Greece's situation was no accident, he said, but eventuated because entitlements ran rampant and appetite for payments was greater than the government's capacity to meet them.
"It is important these sorts of changes and things we have seen overseas - although they may be a distant warning for us - they are a warning nonetheless," Mr Morrison said.
Instead, Australia should look for ideas in New Zealand, which has shaved billions of dollars off its balance sheet and prevented thousands of children from a lifetime of welfare dependency, the minister said.
It's done that with an intervention method which assesses early on if some Kiwis are at risk of going on welfare.
The Abbott government is adopting that approach with $20 million going towards a similar study at home.
Mr Morrison also suggested Australia copy the US's philanthropic tradition, saying the government must be careful not to discourage private sector involvement in social change.
"There can be a culture in this country which says, `well, I pay my taxes, that is what my taxes are for and so I don't need to support organisation x, y, z'.
"Our responsibility as citizens doesn't end with our taxes."
The federal government will also pursue social impact bond programs where corporates, government and civil groups join together to fund solutions to social problems.
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