It’s an article of faith in politics that the Liberals are the party of welfare cuts — and one not discouraged by Liberals, who portray themselves as the best fiscal disciplinarians (despite their record as Australia’s biggest taxers and biggest spenders), the most devoted enemies of “waste” and the most committed advocates of the principle that the best form of welfare is a job.
It’s also linked to the belief on the left that welfare cuts are central to neoliberalism. A writer at Overland accused the Liberals of a “campaign to undermine welfare through continual cuts to unemployment spending” intended “to perpetuate the policies of neoliberalism.”
Australia had become a “post-welfare state”, argues one of the key academic texts on welfare in Australia. Other academics blamed both sides of politics for being the “gravediggers” of the welfare state. An ANU academic claimed “it is well documented that Australia’s Aboriginal and Torres Strait Islander peoples have experienced some of the harshest effects of neoliberal intensification and its continuous pursuit of state welfare retraction and stigmatisation.”
Another group of academics claimed in 2016 “‘neoliberalism’ … is used here to refer to an ideological reaction to the welfare state inspired by Frederick Hayek [sic], popularised by Milton Friedman and manifested in public choice theory. The reaction against the welfare state and increased reliance on market mechanisms has tended to have disproportionate impact on women.”
Indeed, “Frederick” Hayek — AKA Friedrich — had some thoughts about welfare. In Road to Serfdom he wrote “there can be no doubt that some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody … Nor is there any reason why the state should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision.” And Milton Friedman proposed a “negative income tax” akin to the Universal Basic Income idea touted by many on the left now. Still, those are mere details.
It is true that “neoliberalism”, at least in the sense of promoting contestability and use of markets rather than public intervention, has reshaped welfare in Australia in areas like job services. But has neoliberalism forced cuts to welfare expenditure? And has the Liberal Party delivered them?
Two studies contradict this. A 2012 paper by Curtin University academics examining welfare spending in the two decades to 2004 found “far from succumbing to neoliberalism, the Australian welfare state became if anything even larger over this period. Neither bipartisan economic liberalisation, nor competing party welfare policies, made much difference to the welfare state when viewed through a fiscal incidence lens.”
The study found that welfare spending as a proportion of GDP did not shrink; redistribution of income did not reduce; all income quintiles received more benefit payments over the period but the poorest quintiles received more, and all quintiles paid more tax, but the wealthy paid a lot more. A 2018 paper that updated the research to 2008 confirmed those results, while acknowledging an increase in inequality in Australia.
Those papers are based on analysis of historical data. They also reflect how complex any definition of welfare can be, since it combines not just direct income support but indirect forms, via the health and education systems, and the interaction of households with the taxation system.
Moreover, even direct income support is composed of different elements — the number of people who qualify for the aged pension is, some definitional tweaking aside, primarily a reflection of demography adjusted for the income and wealth levels of recipients. The overall level of unemployment benefits, however, primarily reflects the state of the economy. For all the controversy over the level of Newstart payments — which everyone bar the major parties believes is too low — the Rudd-Gillard and Turnbull-Morrison governments have had historically low levels of unemployment.
But if the Howard government didn’t preside over cuts to welfare, surely the Abbott, Turnbull and Morrison governments — especially given the notorious 2014 budget — have?
Next week, we’ll look at that data on welfare over the last decade.
The only welfare the Conservatives are fond of is the vote-buying kind that favours the Upper-Middle class. Meanwhile, the unemployed get chased via Robodebt, & the disabled get chased off of the Disability Pension via government appointed doctors.
I know that Indue & Serco have done very well out of “Welfare” spending by the Librorts Party
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It is true that “neoliberalism”, at least in the sense of promoting contestability and use of markets rather than public intervention, has reshaped welfare in Australia in areas like job services. But has neoliberalism forced cuts to welfare expenditure? And has the Liberal Party delivered them?
Two studies contradict this. A 2012 paper by Curtin University academics examining welfare spending in the two decades to 2004 found “far from succumbing to neoliberalism, the Australian welfare state became if anything even larger over this period. Neither bipartisan economic liberalisation, nor competing party welfare policies, made much difference to the welfare state when viewed through a fiscal incidence lens.”
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Does the expanding welfare budget also include the welfare given to the private enterprises for “job services”?
I would like to know that as well.
The privatisation of ‘welfare’service delivery and huge expenditure on IT for Myagecare, NDIS, Jobnetwork etcera is not money spent on the actual people in need of assistance. Most is siphoned off by unnecessary admin costs and replication of provider organisations. Though the government is happy for this to continue as it creates employment for thousands of people as well as provides plausible deniability when things go wrong.
A figure of $11 for every $1 paid in Newstart was spent administering the first Basics card floats to mind. It would be great to read reliable information showing actual costs alongside amounts actually paid.
I do trust that you do not consider the Age Pension to be “welfare” since it is actually a continuation of payment for services rendered in the past which continue to provide benefit to the present.
For example, my own contribution to air traffic management in the 1970s is still a component of the systems used currently.
If I held an intellectual Property patent on my inputs I would still be receiving financial returns on licencing them.
We all stand on the shoulders of those who created the world which we live in and are duty bound to repay them for the continuing benefits incurred.
It is simply wrong to term the repayments “welfare”.
Nicely put rolly.
As other suggest the concept of welfare is tricky but there sure are some rorters. I’ve known a few outright dole and disability pension scammers in my time. I’ve known others who’ve paid fraud enablers aka tax accountants to neutralise taxable income technically legally but dishonestly when you knew what they really did.
And if imputation refunds on tax not paid isn’t welfare I don’t know what is.
I don’t see how ‘rorters’ are any worse than wealthy people and corporations who use legal tax loopholes to evade millions and billions in taxes. In fact they don’t even compare. The use of deviant language to stigmatise a few naughty welfare recipients is just another way the concept of welfare is undermined and gradually eroded in the service of capitalism. It does nothing more than justify an aloof market logic for organising human relations.
Agree!
Me Three!
“I do trust that you do not consider the Age Pension to be “welfare” since it is actually a continuation of payment for services rendered in the past which continue to provide benefit to the present.”
No it’s not.
It’s welfare.
Your taxes are not a savings account. You are not being “repaid” for “contributions in the past”.
Nonsense.
Firstly you seem not to know the origins of the Aged Pension – a system corrupted by subsequent governments for the usual political purposes, nor do you appreciate the fact that at present many of the structures built and systems initiated in the past are still being used presently.
Can one not claim rent on the use of property built years ago, or does that entitlement cease on retirement?
The fact that formal Patent protection was never applied to these things does not abrogate the moral responsibility for providing a decent standard of living to those from whom you derive much of your own material and social benefit.
The pension is welfare as recognition that you can no longer provide for yourself, otherwise there would be no reason to pay you.
Whilst you seem to want to justify it however you want, don’t kid yourself.
Many people retire at 67 years old when they are still quite capable of supporting themselves by working, should they choose to do so.
Indeed some do choose to continue in employment and recieve Age Pension in part, dependent on the wages received.
Others are able to subsist on the pittance which the Government provides, particularly those who own their own homes, furnishings and the normal trappings of life and no longer need to outlay on such items.
The State Age Pension is a benefit, rightly earned after years of working.
The State Age Pension is a benefit, rightly earned after years of working.
Whatever word you prefer.
The point is it’s the same as the dole, or disability support, or HECS, or rent assistance, or whatever. You’re not entitled to it because you’re old, you’re entitled to it because you’re Australian. It’s not paid out to you from taxes collected from you in the past, in as much as it can be said to be paid out from taxes at all, it’s paid out from the taxes being collected today.
You were remunerated for the work you did in the past, in the past.
(It is odd to hear someone, on the one hand claiming to be implicitly owed a pension by the state, but on the other justifying that with the language of hardcore capitalism.)
Firstly you seem not to know the origins of the Aged Pension – a system corrupted by subsequent governments for the usual political purposes, nor do you appreciate the fact that at present many of the structures built and systems initiated in the past are still being used presently.
I’m confident I have a pretty good handle on both.
Can one not claim rent on the use of property built years ago, or does that entitlement cease on retirement?
No, it never existed in the first place in the quid pro quo sense you are trying to portray.
Firstly, patents apply to inventions, not processes, ideas, improvements, services, contributions or anything else that’s not an invention.
Secondly, in most cases, anything you do invent that’s patentable belongs to your employer. As it sounds like you were employed in a publicly funded organisation, anything you may have been able to patent would belong to the people.
Thirdly, patents expire after 20 years, so even if you did create something patentable, and it was actually your patent (though if that were true, how would it be relevant to the pension?), since the ’70s it would have expired nearly twice over.
The fact that formal Patent protection was never applied to these things does not abrogate the moral responsibility for providing a decent standard of living to those from whom you derive much of your own material and social benefit.
No, the moral obligation is to support those who cannot support themselves, or to provide support based on citizenship, not create some sort of intergenerational transaction system where someone’s right to receive support today is tied to how much ‘patentable value’ they may (or may not) have created in the past.
Taxes are not a savings programme. Your eligibility for welfare today is not a function of how much tax you’ve paid (or any other way you may want to measure such a thing) in the past. Welfare is a governmental opex; in as much as it’s even related to taxation (minimally), that relationship is to taxation today, not generations ago.
You can call it “social security” rather than “welfare” if you prefer. Doesn’t change the point.
Nicely put. The aged pension is not a reward for years spent selling one’s labour, it is a safety net owed to anyone who needs financial support. WELFARE is a safety net owed to anyone who needs financial support, for whatever reason they cannot participate in the labour market – the only way by which we can purchase essentials needed for survival.
the liberals only cut welfare for the poor and then give it to the rich, known as corporate welfare and common in the U.S thats why the conservative parties are being decimated throughout the western world, only the countries whose conservatives have swung left are now electable, and we shouls all be thankful for that.