Is this mutuality? No, but it is mutual obligation

Published in Parity not sure when.

One solution to poverty, as the sage suggested would be to ‘get the hungry to eat the homeless’. However such a solution seems to have fallen from favour in most countries many centuries ago. As too had the idea that strangers could be left at the cross roads outside the village to starve. By the Elizabethan period, in the 17th Century, a system of poor laws based on the parish had been established to assist the very poor in their communities. Such Elizabethan poor laws were, according to British researcher Karl Polanyi, predicated on a number of interwoven ideas:

  • productivity was not to be interfered with, so the amount of welfare assistance provided was to be less than could be obtained from working; this process has come to be known as the principle of less eligibility,
  • only ‘the worthy’ were to be assisted, out of a sense of duty to those who ‘through no fault of their own’ had been injured or otherwise prevented from working,
  • this, of course, meant rejecting the undeserving poor, and
  • as funds were limited, assistance was to be directed to those in most need, whilst ensuring people met their responsibility to the Parish and simultaneously felt grateful for the pittance they received.

Such views about the functions of welfare provision have a resonance in current Australian income support debates. In 1988 Professor Robert Goodin argued that “what distinguishes a welfare state from a poor law state is that agents of a welfare state must have no discretionary power over those resources that the state allocates for the relief of people in distress”. Goodin’s view of appropriate welfare services is not to be found in Jocelyn Newman’s pronouncements on what she calls ‘welfare dependency’, nor her fear that such ‘dependency’ is widespread and about to become intergenerational. Prime Minister Howard consistently refers to helping the ‘needy’ by maintaining the current austere social safety net whilst ensuring that unemployed people meet their ‘mutual obligations’. Some Labor parliamentarians such as Mark Latham and Wayne Swan seem equally fearful that Australian productivity is about to be swamped in a sea of ‘welfare dependency’.

In late August the Final Report of the Reference Group on Welfare Reform was welcomed by the Government, Labor and the Democrats. Michael Raper, president of ACOSS, saw it being a bridge over troubled waters -even if it had a few planks missing. The mainstream press response has been generally positive, praising the way in which the Reference Group had attempted to reinterpret Howard’s hardline ‘mutual obligation’ as expressed in the 200,000 of the poorest Australians subjected to benefit cuts for ‘breaching’ a Centrelink dictate, his ‘work for the dole’ and his attack on young illiterate unemployed people. The press took heart in the Report’s suggestion that sanctions should be a last resort and that the emphasis should be on a ‘partnership between income support recipients and the government designed to encourage participation in the economy and society’.

It is true that in the section of the Report dealing with ‘mutual obligation’ there was a recognition that “Some responses (to their interim report) argued that placing conditions on income support diminishes citizenship rights to an adequate minimum income.” However this did not stop the authors of the Report claiming “Nevertheless, compulsion will be required for a minority of income support recipients and to ensure that governments, businesses and communities meet minimum standards in ensuring access to economic participation opportunities.” At least 200,000 income support recipients in the last 12 months were breached by Centrelink -for them compulsion is an ever present threat. Government however has no legislative provisions in place which can compel “businesses and communities meet minimum standards in ensuring access to economic participation opportunities”. It would seem reasonable to ask what organisation is going to materialise so as to be in a position to compel governments to ensure “access to economic participation opportunities”. The Australian Government’s response to the reports of the United Nations Human Rights and Elimination of Racism Committees concerning the present Government’s breaches of international agreements, which Australia has signed and ratified, was to tell the UN to stay out of ‘Australia’s business’. Given such a response I am at a loss to identify the vehicle which the Reference Group thinks will compel the Australian Government to ensure economic participation.

This is in fact the crux of the mutual obligation debate: legal powers exist to compel income support recipients to reciprocate. But those who receive income support have no way of compelling the Government to meet its ‘reciprocal obligations’ which the Report identifies as being necessary if there is to be increased participation in the economic and social life of the nation. Under the title of Participation Support for a More Equitable Society the Reference Group advocates removal of the current legislated right of people with parenting responsibilities to not work until their youngest child turns 16 years. This right been reduced to when the youngest child turns 6 years after which they will be required to attend yearly interviews. Then when the child turns 13 parents will have to demonstrate how they intend to access economic participation opportunities. A variant of ‘work for the dole’ or other compelled activity will be extended to some Disability Support Pensioners.

The trade off that income support recipients are offered is a single rate payment for all ‘working age’ recipients plus a number of add on payments to: ‘increase participation’, cope with special ‘needs’, family circumstances or disabilities. Howard’s introduction of the oh so Common Youth Allowance saw 46,000 16-18 year olds have their payments diminished or cut completely. Such reductions in benefit has occurred under both Labor and Liberal administrations since 1986 when ever common payment regimes have been installed. There is no reason to believe something different will happen this time. The Government has loudly proclaimed it will retain the value of benefits but, since 1986, such promises have always been given before the cuts occurred. Even if the rates are not cut recipients are having the conditions under which they receive payment eroded by the imposition of compelled activity.

If there is a logic in having the same base rate for all ‘working age’ recipients why should it not be extended to older and younger people. Many people older than 65 years work as do many under the ‘working age’. There are two reasons why this has not been done, firstly the age lobby is united and powerful compared with working aged groups who have been divided amongst themselves; and secondly to include the young would mean relating to the reality of a group who have been successfully marginalised. On top of this it would mean having to admit the present income support discrimination against the young is unjustified.

The Reference Group Report may have portrayed a kinder face of ‘mutual obligation’ than the Government has, hither too, been able to present; but it has not been able to escape the inherent miserly conservative agenda which has been part and parcel of the administration of welfare services in this country since the invasion. The parish has been replaced by the Commonwealth but the values of the Elizabethan poor laws still stick to the soles of our shoes.

It is as if governments believe there is no other way to ensure a productive society other than to compel those who have the least opportunities. Just take one example: wealth taxes are an anathema to the rich in this country so we don’t have wealth taxes in the form that many OECD countries have. But we do have wealth taxes. They are called asset tests and are imposed on many forms of social security payments. Our wealth taxes are applied at the very time when people are experiencing financial crises and result in only small savings to government outlays. It would be possible to tax all wealth and vastly increase government revenue.

There is nothing wrong with encouraging people to play a part in society and the economy. Compulsion can be replaced with trust, enablement, mutuality and assistance. People will take opportunities to engage. Only those addicted to a poor law view of the world want to force the poor to sing for their supper. There is nothing wrong with having one rate of social security income support for all permanent residents in this country -but it does not need to come with strings attached. There is no need to link work readiness and income support. In 1975 Professor Henderson recommended a Guaranteed Minimum Income. Nowadays many are promoting the introduction of a universal Basic Income paid to each individual and at a rate at least that of the age pension. Once such a program was in place Governments would no longer be able to threaten the livelihoods of those most marginal to the productive process. For this to happen it will require Australian’s to choose between a poor law state and a welfare state.