• Prime Minister Tony Abbott and Andrew Forrest in Sydney (AAP)
Andrew 'Twiggy' Forrest has released a new plan to change the way Australia deals with welfare.
Amanda Cavill

1 Aug 2014 - 12:03 PM  UPDATED 1 Aug 2014 - 7:54 PM

Mining magnate Andrew "Twiggy" Forrest has released an ambitious plan to change the way Australia tackles welfare, challenging the Abbott government to act.

Under the scheme all welfare recipients, except aged pensioners and veterans, would be forced into income management with no discretionary spending.

Mr Forrest also wants all families receiving family tax benefits to have their access to the money directly linked to their children's school attendance.

The government has labelled the report as worthy of consideration but ahead of its time.

Initially Twiggy Forrest was asked by Prime Minister Tony Abbott to look at ways to get the Indigenous unemployment rate down.

But the report he's handed to the government is much broader than that, tackling school attendance, housing, and welfare for all - not just Indigenous - Australians.

Under the proposals all welfare recipients, other than age or veterans' pensioners, would have their payments put into a savings account that could be drawn on only with a so-called 'healthy welfare' card.

The card would restrict spending to purchases that sustain and support a healthy lifestyle.

It would be programmed to block cash withdrawals and the purchase of alcohol, gambling and illicit services and gift cards at the point of sale.

Mr Forrest says it's time the issue is tackled as a national one, and not merely an Indigenous one.

"I stand here as a servant of the Indigenous people," he said.

"Right across Australia and in the review which may I assure you I was able to guide, but the ideas, the initiatives and the courage came from the Indigenous people themselves, came from the most vulnerable people, Indigenous first Australian and Australian."

"This is their review. This is their day. This is their change of direction - if we can muster that will."

His recommendations also include providing comprehensive case management for vulnerable children up to the age of three to allow for early detection of developmental delays.

A Creating-Parity website would monitor efforts to end welfare dependence and close the disadvantage gap.

Mr Forrest wants new job centres in remote areas that fund training only when it is linked to a guaranteed job.

The report also recommends linking the Family Tax Benefit to school attendance so parents could be penalised if their children failed to attend school regularly.

He also wants Commonwealth funding to the states to be tied to school attendance.

Mr Forrest has called for courage from the Prime Minister and for bi-partisan support to change the system once and for all.  

"I reach out now to Opposition Leader Bill Shorten, Tania Plibersek, opposition spokespeople, and government. Lay aside the political cudgels. Lay aside short-term thinking. Lay aside that vain belief that you will achieve something totally different by just doing more of the same."  

Tony Abbott says he is prepared to consider the idea of a welfare card to determine how recipients spend their money.
However, the government has ruled out quarantining income for everyone who receives welfare payments.

Mr Abbott describes Mr Forrest's report as bold, ambitious and brave but says some elements, like the increase to income management, are ahead of public opinion.

He says his review challenges Australians to do more to ensure kids are in school and adults are at work.

"What we've got to try to ensure is that we do things differently because if we don't do things differently nothing will change."

"I mean that old phrase, if you always do what you've always done you will always get what you've always got, and this idea that we can just keep doing more of the same and expect that we're going to get dramatically different outcomes is wrong."

Opposition Leader Bill Shorten says he disagrees with a one-size-fits-all approach but he has welcomed the report.

Mr Shorten says cash management for all Australians won't work.

"I think a one size fits all approach underestimates people. Income management has been used by Labor in the past in selected circumstances so we are not putting down the shutters for some change," Mr Shorten said.

"But I think the proposition that all two and a half million people of working age who receive a government payment can't be trusted to make decisions - that'll be a bridge too far."
Welfare management already applies in the Northern Territory, and is being trialled in parts of New South Wales, Western Australia, Queensland and South Australia.