Is it social inclusion or social illusion?

ON LINE opinion – Australia’s e-journal of social and political debate

Posted Monday, 8 December 2008

In Australia, since at least the first decade of the 20th century, the income support system was supposedly based on the “need” of the recipient. Those who were assisted were, in the language of the day, considered to be “in need” of financial assistance from the government. Indigenous Australians, despite being the most impoverished, were not included in the income support system.

Running in parallel with calculations of need were deliberations about “desert”. People had to be considered to be of good character to receive government assistance. Those who were assisted were compelled to conform to the behavioural mores of the day.

The Whitlam Government attempted, via the Australian Assistance Plan, to involve ordinary citizens in a major community development – civic improvement campaign. Conservatives, in the mid 1970s, derided such mass mobilisation as “social” and even “socialist” engineering. They sought to return determinations of welfare eligibility to traditional ways.

The language employed by Conservatives in this ideological struggle avoided any notion that the traditional method of determining who would be paid was equally a form of social engineering. This was because it attempted to get recipients to conform to Conservative moral imperatives. The language of both the right and left of this argument obfuscated their real political and social intentions.

Many different income support schemes exist around the world. Payments may be directed to all permanent residents (as is the case with the Alaskan Basic Income or to every person in a specified social category, for example the elderly. Child Endowment in Australia (from 1942 to 1976) was paid (without a means test) to permanent residents with children (Department of Families, Community Services and Indigenous Affairs). Current family allowances are means tested in Australia.

Some payments, like most Australian social security benefits and pensions, are categorical benefits which are means and asset tested. At the other end of the income distribution system some privatised welfare benefits (such as superannuation) are subsidised by the government through preferential tax treatment – the greatest benefits flow to those who can afford to make the largest personal contributions. Then there are social insurance schemes which fund government superannuation in New Zealand and pensions in many parts of Europe.

There are also guaranteed minimum income schemes such as Minimum Insertion in France and other parts of Europe which guarantee a minimum income to all permanent residents. The groups which benefit the most from such social minimums are people who are unable to establish eligibility for standard social benefits. These payments are paid at a lower rate than social insurance payments or other categorical benefit levels. Until the mid-1980s Australia had a special benefit scheme which fulfilled a similar function.

In 2007, Jurgen De Wispelaere and Lindsay Stirton wrote:

Any welfare scheme must perform three essential tasks. First, a welfare scheme must establish the operational criteria of eligibility that define the intended beneficiaries. Second, it must identify those within the population who meet these criteria of eligibility and distinguish them from those who are not eligible. Third it must transfer eligible beneficiaries’ payments correctly (p.528).

There have always been eligibility conditions applied to welfare payments in Australia. With the exception of Child Endowment and the Blind Pension, means and asset tests have also been applied. Unemployment benefits have always had activity tests, for example applicants had to establish they were fit, ready and able to work.

In 1986 Minister Brian Howe set up an internal Social Security inquiry headed by Professor Bettina Cass who recommended that many social welfare payments have activation/participation eligibility requirements added. Her recommendation was adopted by the Labor Government. Howe at the time insisted at many conferences that such policies undermined dole bludger rhetoric and led to greater support for government-provided unemployment benefits. He and Professor Cass also argued that activation/participation policies helped people find work and eased their integration into the broader community.

In England in 1996, Professor Tony Atkinson, argued the case for a non-means tested basic social benefit but one which had participation requirements such as establishing that an applicant had caring responsibilities or was undergoing training. His reasoning was not dissimilar to that of Cass and Howe in Australia. Both the Australian income activation/participation and Atkinson’s policies are forms of participation income which claim to achieve social inclusion, greater work readiness, and public acceptability. De Wispelaere and Stirton (2007) strongly dispute such claims.

By the time the 12-year rule of the Hawke/Keating Labor was drawing to an end, this activation/participation rhetoric had evolved into “Reciprocal Obligation” with the associated claim, inherited from Blair Labour in the United Kingdom, that such policies promoted “Social Inclusion” (Lund 2008). The incoming socially conservative Howard government metamorphosed reciprocal obligation into “Mutual Obligation” and Jocelyn Newman, the social welfare minister shrilly denounced the propensity of welfare clients to sink into “welfare dependency”. (Tomlinson 2004)

Promoters of participation income claim that by insisting that people who are out of work make some effort to gain a job, such as undergo training, look for jobs, or engage in community service, they are making it more likely that those out of the paid workforce will find employment.

The reciprocal/mutual obligation brigade claim it is more acceptable to those in employment for the government to pay income support to those out of work when people who are unemployed give something back to society by undergoing training, looking for jobs or engaging in community service.

Welfare officers claim that they legitimate the paying of benefits when they establish that clients have less wealth than the means tests allow and also meet all the applicable eligibility criteria.

As one wanders through the endless Australian welfare debates since 1908 (when the first Commonwealth social security legislation was enacted) to the present time, there is an amazing similarity of tone. There are short periods of aberration where joy and a generosity of spirit prevail: the Whitlam period, the 1941-49 years, 1908- 12, and 1983-4 when Don Grimes was masterminding social policy. For the rest, one is struck by a mealy- mouthed meanness, an absence of trust in welfare beneficiaries, a sense of parsimony – of eking out a living out of the parish poor box and a smell which is reminiscent of the stale musky interior of a medieval dole cupboard.

As I write this article I have just witnessed the generous government bail-outs of financial institutions both here and overseas. It was with some amusement that I listened to Senator Carr who was defending the $6.5 billion bail-out of the automotive industry: “We are operating on the basis of mutual obligation. This is not a blank cheque, this is about developing capability and it’s about ensuring long-term high skilled, high-wage jobs,” he said (Rodgers 2008). I recalled my mother saying “One law for the poor and another one for the rich”.

Third way politicians who claim to be implementing socially inclusive policies, social scientists who promote participation income schemes, public servants pushing mutual obligation regimes and welfare workers who support categorical or means tested benefits all have at least one thing in common. They are all responsible for implementing non-universal policies.

As politicians go about saying they are assisting people to be socially included they are enforcing policies which, because they don’t embrace everyone, necessarily exclude some. As social scientists go about denying assistance to some people on the basis that they have not met their requirement to participate they are consigning some to exclusion. As public servants determine who has and who has not met their obligations or contributed sufficiently they relegate some citizens to the margins of society. As welfare workers decide who is eligible for payment on account of whether they have met all the applicable criteria and have not exceeded the income/asset means test they are dividing the population into those worthy and those unworthy to receive the payment.

Universal payments such as the Basic Income operate quite differently. By their very nature, universal payments are made to everyone: that is everyone is included.

At the end of 2008, Australia has a Deputy Prime Minister whose portfolio responsibilities include “Social Inclusion”. If the past is anything to go by, it will be a long while before we get around to including every permanent resident in a universal income support system.