If the Howard government failed to make a dent in welfare spending or its incidence in Australia, what’s happened since 2008? The overall level of spending on welfare, health and education can only be a very rough guide to the extent to which governments have cut or increased welfare spending but, based on budget data of actual spending over the last decade, it’s impossible to conclude the Coalition has cut welfare spending since 2008.
Let’s look at the numbers.
In 2005-06, spending classified as social security and welfare in the budget papers was $86.2 billion. This year it’s forecast to be $174.7 billion and rise to more than $182 billion next year (we’ll get updated numbers in the coming budget, of course).
However, welfare spending has declined as a proportion of all Commonwealth spending: it was just under 42% of all Commonwealth spending back in 2005-06, but will be 36% next year. But if you want to blame the Coalition specifically for cutting welfare — at least as a proportion of overall spending — the numbers simply don’t back it up.
In 2012-13, Labor’s last full year in office, social welfare spending was 34.5% of all spending, so it has gone up under the Coalition since then. Similarly, health spending as a proportion of all expenditure has increased (albeit not by much) since the Labor years.
Education spending has fallen slightly as a proportion — but the comparison is fraught given it took a couple of years for Labor’s highly successful Building the Education Revolution (BER) stimulus package to be rolled out, with a corresponding impact on the budget numbers.
But as this graph detailing spending adjusted for inflation since 2013 shows, the Coalition has either maintained real levels of spending from 2012-13 or increased them for welfare, health and education.
You can see both the BER and stimulus handout spikes in that graph, but Labor’s time in office was otherwise noteworthy for its efforts — relentlessly opposed by the Coalition at the time — to curb middle class welfare by cutting family payments to middle-income earners.
That, presumably, is not the sort of thing left-wingers have in mind when they complain about neoliberal cuts to welfare. But this is an important reason why the level of welfare spending to overall spending has fallen since the Howard years.
Once the stimulus payments were out of the way, Labor cut family payments from nearly 13% of all expenditure under John Howard to around 9%; they’re now forecast to be 7.3% next year after family payments were held steady since 2016-17. Otherwise, there’s little evidence that Joe Hockey’s “age of entitlement is over” was ever really delivered, at least in overall spending terms.
And that recent pause in family payment increases has been part of the transition to the National Disability Insurance Scheme. Disability payments (which include the Disability Support Pension) will be nearly $48 billion this year, compared to $29 billion in 2015-16. Disability payments have increased from 7% of all spending then to nearly 10% now and will continue to rise.
Critics may say that NDIS was a Labor initiative, which is true, but the Coalition under Tony Abbott immediately supported it and even — shockingly for an opposition characterised by relentless negativity — backed an income tax rise to pay for it.
That hasn’t stopped the Coalition since then falsely claiming Labor didn’t pay for the NDIS — Finance officials are on record as confirming it was — but nonetheless it’s contradictory to claim a Liberal (and neoliberal) assault on welfare while tens of billions of additional funding are going into the NDIS.
Aged pension spending has also increased slightly under the Coalition, rising from just over 13% of spending in 2012-13 to a forecast of around 13.9% next year. And unemployment benefits have fallen in real terms, reflecting the sustained strong jobs growth achieved by the Turnbull government.
The Coalition is hardly spotless on welfare: the robodebt scandal was a disgrace to both minister Alan Tudge and his bureaucrats; the cashless welfare card infantilises recipients and has no evidentiary basis; its Work For the Dole scheme is unsafe and pointless (funny how the death of a Work For the Dole participant elicited none of the furious reaction from the media and the Coalition that deaths under Labor’s Home Insulation Program did).
But in macro terms, once again the claims that the Liberals are engaged in any attack on welfare — neoliberal or otherwise — don’t stack up.
Bernard, you are so generously providing campaign promo material for the libs. I can hear the crowing already (even as they desperately work out how they got the books wrong). But this analysis only proves one thing: both main parties are screwing us. Welfare spending is not keeping up with need no matter the government of the day. Our tax distribution policy sucks and we are not funding social services as we should. Even if the libs spent slightly more, they sure as hell aren’t doing it out of principle. What they say and what they do is clearly out of step. They attack welfare every chance they get. Are you saying this is a smoke screen? Turnbulls’s 2017 social services legislation amendment would have imposed incredibly regressive measures on unemployed Australians and you yourself offered several examples of welfare attacks. Plus there were cuts to higher education, family spending and an extra year added to new migrants’ wait for welfare. If they spent more than Labour it was not intentional. Scott Morrison himself said, in late 2017, “Across the social services portfolio, payments are expected to be up to 2% lower [over the next four years].”
“This is due to the changes we have put in place, despite the opposition of the Labor Party over several budgets, and getting people back into work. We now have the lowest level of welfare dependency of working age Australians in almost 25 years.”
So what’s going on? The coalition is all about cutting welfare. It’s a core policy platform.
Oh really Lauren does it really matter anymore that Bernard is providing promo material for the libs or the labs for that matter ?
The fact that they are both still pursuing a discredited neo-liberal agenda since the Hawke / Keating years, which, by the way Keating has conceded in response to Sally McManus, has been a failure in reaching a ‘dead end’. No contrition or apology from him mind you !
The greatest reform government I have / will ever experience in my life time was the Whitlam Labor Government which achieved so much in its short tenure in office, particularly in good public policy, only to be hounded out of office by the LNP ,”the born to rulers”, who are running the country into the ground at the moment.
I consider myself fortunate to have experienced the vision of Whitlam and his legacy of equality of opportunity for all Australians,built on valuing our public assets and resources and the public service that manages them, with a strong safety net provided for those in need, of which public housing and welfare spending was an important component.
Certainly Whitlam made mistakes, however surely laughable by today’s shoddy parliamentary standards ? Any government determined to implement a solid reform agenda is bound to, some perspective required here on what his government achieved.
Look no further for evidence than the great man’s State Funeral in November 2014 with eulogies and tributes a testimony to his achievements and set out in “Not Just For This Life – Gough Whitlam Remembered ‘ Edited by Wendy Guest & Gary Gray.
Really all this hand ringing and crying over spilt milk is quite nauseating concerning the mess we are in now !
We have well and truly missed the chance of creating a great, self sufficient and self reliant country like Norway.
I fear the proverbial horse has well and truly bolted.
Perhaps Australia will be able to produce a progressive socialist of the Sanders type and rescue us all from the squalid visions pursued by today’s leaders? Is our crucible capable of such imagination? Ian, save your salty nostalgia and spare some hope Australians can buck the structural predestination, come to our senses and manifest a real revolution. Enough of us, young and old, don’t like where we’re headed and believe equality might not be a radical idea but it will certainly take a radical politics to achieve. We need better political options than what we have now. So uninspiring, so destructive. First things first – the welfare scales need balancing. Both libs and labs don’t have the mettle to organise a better, fairer society. Bernard’s article proves that. So rise up Aussie Corbyn or Aussie Sanders and let’s see if we’re ready to mature and shed this abrasive capitalist mantle.
Oh Lauren what a lovely heartfelt response to my comments !
As one whom I can imagine is old enough to be my granddaughter, you have every right to mention my “salty nostalgia” about what our country could have been, to what it has become.
Perhaps I have every right to my “salty nostalgia”, considering my journey of political activity and interest for over 50 years, commencing with my objection to the Vietnam war as a Conscientious Objector at 18, and all the trials and tribulations that that entailed? More importantly, those that got us into that quagmire, the LNP, and who got us out – the Whitlam Labor Government !
Since then I have not wavered in voicing my objections to the forces of reaction that have devalued our country & its people, LNP & Labor, to the extent of where we are today.
I could go on but our future lies with you Lauren, your generation and the one that follows.
I am embarrassed and angry by the behaviour of my generation and the mess, in its many forms, that we have burdened you with to clean up.
I feel pleased & satisfied that I have done the best that I could to speak up and voice my opinions in forums like Crikey.
Yes, Bernie Sanders is an amazing and inspirational character of a similar vintage. How sad and desperate are we that we need to rely on the Bernie Sanders’ of this world to show us that there is another way, a fairer and just pathway for mankind to follow?
Do read ” Not Just For This Life”, I am sure you will obtain a clearer understanding of where I, and many others are coming from.
Maybe the quality of independent candidates prepared to throw their hats in the ring may well be the breath of political fresh air we need?
Hugs,
Ian
No Bernard, overall spending is not a good guide.
Expenditure per person is much more valid, preferably weighted for changes in population distribution (e.g. the ageing society necessitates more spending on pensions).
More importantly, how much of that spending went to actual recipients rather than to Liberal Party Aligned Private Service providers?
I second Lauren’s comment that spending does not meet need. This is an era of growing inequality and the need grows every day. I would also like to know how much wa spent on things such as unemployment benefits Vs how much was given to the large and profitable job provider networks ,or how much is spent hiring child care workers and providing facilities for young children Vs how much went ono the pockets of those like Dutton who own childcare companies. Spending effectively is as important as spending enough. This government only spends on it’s mates, whatever the official story
Yes!!! THAT is the question: where is the money going? In a pro corporate neoliberal gvt, surely 2+2= kaching for businesses like service providers, not individuals.
….and what percentage of that welfare and health spending actually went to the people who genuinely NEEDED it? From what I can see, a lot of that spending can be explained by Howard expanding Welfare to include the Upper Middle Class, & by paying privately owned service providers to deliver Welfare-based services (just look at Indue & their $10,000 Cashless Welfare Cards).
The attack on welfare is real. Look at the draconian policies single parents and Aboriginal work for the dole recipients live with. The increase in spending is probably due to the NDIS.
The NLP have cruel and heartless policies and target the poorest and least empowered people.
This article is a white wash of NLP cruelty.
ah bernard, you would find a rose tucked into a turd if it suited the story, maybe scommo`s welfare payment have gone up because of all the handouts to his rich mates, you know, corporate welfare, just settle back and enjoy the 20 or 30 years in oppositiong waiting for scummo and co, then you can write a glOwing refernce to their service to Australia, I`M SURE LITTLE JOHNNY AND ABBOTT WILL CO SIGN IT, MAYBE EVEN GEORGE PELL WILL, REMEMBER, HE OWES THEM A FAVOUR.