Keynote Paper given at the bi-annual Queensland State Youth Affairs Conference, Mackay April 2003.
Over the last 40 years the social welfare system in Australia has experienced a major ideological shift from social democratic noblesse oblige to a compelled conservative compact. I shall examine the underlying forces that have fuelled this change and point to two possible directions this nation might take. One is optimistic and the other less so. The optimistic choice will require a move away from the mean mindedness of the present Government. The other is a more ruthless extension of ‘mutual obligation’. Whichever of these directions Australia takes, the choice will impact substantially impact upon the way services to young people are delivered.
The things which structure Australian society are:
These structures manifest themselves in the prevailing ideologies of racism, sexism, classism, ageism, urbanism and ableism. Those who are rich, white, able-bodied, middle-aged, city-living and male may not notice these features of Australian society. The privileges each of us enjoys – we take for granted. We often prefer to overlook the disadvantage faced by others.
Economic fundamentalism and conservative social values frequently go hand in glove. John Howard in his1999 Roundtable paper declared his view of the world to be predicated upon an amalgam of neo-liberal economics and social conservatism. His Government has promoted a deregulated economic policy for business but a highly prescriptive (and increasingly proscriptive) social welfare policy.
Perhaps the most blatant example of the present Government’s approach towards unemployed people comes from ex-Minister Jocelyn Newman’s 1999 paper The Challenge of Welfare Dependency in the 21st Century with her suggestion that “good economic policy is good welfare policy (p.2)”. This paper provided the tracks on which the McClure Report (2000) ran and on time. The concept of ‘participation income’ is a euphemism for compulsory labour. The staff of Centrelink may not wear the uniform of Mussolini’s ‘black shirts’; but many researchers have described the philosophical underpinnings of participation income as unethical (Kinnear 2000, Goodin 2001, Hammer 2002, Tomlinson 2002[a], [b]). The practical outcomes for those who are breached are socially disastrous (ACOSS 2002, 2001, Schooneveldt 2002, Tomlinson 2001 [a], [b]).
There has been a constant chorus of denigration of people who are forced to rely on social security through the failure of the Government and industry to create sufficient jobs. Whether it’s Howard’s 2000 “social coalition”, Abbott’s “job snobs”, Brough’s “losers and cruisers” or his claims that “Compliance is a strong motivator and it also flushes out dole cheats” (Brough 2001 p.2), the message is the same depressing monotone. The hysteric denunciation of ‘welfare dependency’ and particularly intergenerational ‘welfare dependency’ is based on a myth. There have been no intergenerational studies of long-term social security receipt in Australia. Using long- term panel studies, Goodin, Headey, Muffels and Dirven (1999) have demonstrated that the overwhelming number of poor people – in Germany, Netherlands and the US – do not remain poor indefinitely and that the Dutch welfare system, which is the most generous of the three, is:
“…the Netherlands-managed to sustain economic growth at a rate certainly on par with (and in ways higher than) the other countries (pp.260-261)”.
The welfare dependency explanation for the persistent unemployment (in Australia) since 1975 fails when confronted with the evidence. With the Unemployment to Vacancy (UV) ratio averaging around 11 since that time, it is a fallacy of composition to consider that the difference between getting a job and being unemployed is a matter of individual endeavour. (Cook, Dodd and Mitchell 2001 p.24).
As we saw in the run up to the last election (with the children overboard claims) this Howard Government will not let the truth get in the way of a good political campaign. The Howard Government has engaged in a latter-day Salem witch-hunt of unemployed people in general and young unemployed people in particular.
They portray anyone who is poor and in receipt of social security as ‘dependent’, a drain on the system and as someone who should give something back. The driving mindset of ‘mutual obligation’ is downward envy. On the other hand they give a $14 –17 billion annual handout to business that they assert is money well spent – though the Government does not demand from business that corporations meet their ‘mutual obligation’ to society in return (Van Dyke 2000). One way that businesses, which receive such corporate handouts, might meet their obligation to society would be by creating sufficient jobs to provide work for all people unemployed for more than a year. As a first step they could give priority to employing people who have been out of work the longest.
The legislated handover of your superannuation contributions to an incompetent if not corrupt Insurance industry (which in the last 12 months couldn’t even manage to fake a profit) is an additional subsidy to prop-up the insurance business. As the collapse of HIH demonstrated the private insurance industry cannot be relied upon. Yet the bulk of Australian’s retirement income security is in the hands of the private insurance industry. The Federal Government regulator of superannuation recently warned that 10 per cent of superannuation funds “fell into the ‘high or extreme risk’ category (Hayes 2002 p.1)’. The 1/3 subsidy to the rich to subsidise their health insurance is a further $3 billion subsidy to the insurance mafia. Recent cutbacks to public liability, medical negligence and workers compensation insurance jeopardise the financial security of any victim of misadventure. What started as an attack on the social security eligibility rights of young unemployed people has expanded, within 6 years, into a full-scale assault upon the social and economic rights of all Australian people.
The task, which confronts youth workers wanting to get the best for their clients, is how to challenge this prevailing worldview in a manner which does not take them or their agencies out of the game. To the extent to which human service workers accept the prevailing conservative prescriptions for the “pooer” is the extent to which they fail themselves and their clients.
The Australian system of Social Security evolved slowly, but deliberately from the introduction of the Age and Invalid Pensions in 1908 until it became a fairly comprehensive welfare state by the mid 1970s. Australia continued to improve the delivery of some disability services until the mid-1990s.
From 1986, Brian Howe as Minister for Social Security, under the cover of social justice rhetoric, began to clawback welfare entitlements through increased targeting and the amalgamation of benefits. Howe, like his Howard Government equivalents: Vanstone and Newman, when ever he amalgamated two types of benefits always chose the lower payment as the rate for the newly combined benefit. Howe used equity arguments to justify his shrinking of entitlement (increased targeting). For instance, when he decided to bring into line the waiting period for school leavers for unemployment and sickness benefits, he claimed it was only fair to treat unemployed people and the sick people in a similar manner. Seemingly oblivious of the fact that to treat unequals equally is as unjust as to treat equals unequally. The main group adversely affected by the extension of a waiting period for sickness benefit were unmarried school girls who had to leave school to have and care for a baby. The Howard Government has extended Howe’s policy with alacrity with: its ‘oh so’ common youth allowance, the amalgamation of Aboriginal Benefits Study Scheme and AuStudy and the abolition of unemployment benefits to under18 year olds.
Howe broadened the work test requirement for unemployment benefit to include an increased number of obligations which he added to the existing activity test. Labor in its 1994 Green Paper: Working Nation imposed reciprocal obligations on unemployed people. In return for meeting the activity test requirements, the Labor Government undertook to help unemployed people find work through the CES, promised six months of work after 18 months, and provided training where appropriate. From 1996, the incoming Howard Government, using the rhetoric of ‘mutual obligation’, dramatically increased the requirements it imposed on unemployed people. It privatised the CES, then Christianised the Job Network. It imposed its ‘work for the dole’ policy, demanded young unemployed people with literacy and numeracy difficulties attend classes on threat of reductions in benefits, and increased three fold the number of Social Security breaches it inflicted on Social Security recipients in the three years to 2002. Centrelink imposed 386,946 breaches for 2000–2001 (ACOSS 2001, 2002,p.2). In return the Government provides an income which is less than the poverty line.
The Howard Government uses the concept of ‘participation income’ advocated in the McClure Report to ‘justify’- or is it mystify- its extension of job search activities and ‘work for the dole’ compulsion to include not only unemployed people but also those who are single parents and others who receive disability payments. The Government claims its agenda is to confront ‘welfare dependency’. ‘Dependency’, according to Government luminaries, is the automatic result of people receiving welfare benefits (which have no ‘mutual obligations’ attached to them). The Government suggests that unless people in receipt of benefits meet their ‘mutual obligations’ to the Government then their lives will sink into a state of slough and licentiousness.
The Howard Government says it has to adopt ‘mutual obligation’ policies in order to avoid the scourge of ‘welfare dependency’ which it claims is sweeping this nation. On the 27/8/2000, Ray Cassin wrote in The Sunday Age:
You can be ‘on’ Social Security in the literal sense of receiving benefits, but this usage does not carry the pejorative flavour of being ‘on’ welfare. The reason is not mysterious: we do not talk about social-security dependency, or social-services dependency because ‘social security’ and ‘social services’ are bound up with an older notion of entitlement, and an understanding of mutual obligation that goes beyond tit-for-tat reciprocity.
The ideal of mutual obligation underpinning a system of Social Security is not one of reciprocity, but of obligation borne by all of us to contribute to the support of people who would otherwise be destitute (p.22).
Migrants found the Labor Party imposed a 6 month wait before they were eligible for Social Security – Howard increased that to 2 years. These waiting periods were imposed to satiate the xenophobia of the ‘little Aussie battler’. Labor began the policy of mandatorily detaining asylum seekers who arrived on our shores without visas. Howard has expanded it to include removing parts of the nation from the definition of Australia for the purposes of the Migration Act. It has stepped up the repression of asylum seekers in our outback privatised Wackenhut concentration camps and even adopted the ‘Pacific solution’ in an attempt to avoid honouring international treaties and other instruments Australia has freely signed and ratified. The ‘Pacific solution’ has an annual price tag of $500 million. Prior to this extravagance, the total cost of locking up asylum seekers was $97 million annually.
The shear brutality of the Australian Government’s treatment of asylum seekers is revealed in the Annual Report (2001) of Human Rights Watch, in numerous 7.30 and 4 Corners programs, occasionally in the Fairfax, Packer and Murdoch dailies, weekly in the Green Left newspaper; and in statements emanating from Amnesty International, The Australian Refugee Council, Senator Bob Brown and the UN Human Rights Commissioner. For those who wanted to know the truth about the people on the Tampa there were credible news sources in Australia. But perhaps it was the Prime Minister’s claim that he believed that people would flee thousands of miles, escaping war, poverty, malnutrition and persecution and then as soon as they were in sight of Australian war ships would start throwing their children overboard which most accurately reflects the extent of xenophobia which drives this Government.
In the wake of the High Court’s Mabo Decision No 2, Paul Keating introduced the Native Title Act which provided Indigenous Australians with extremely circumscribed rights to claim ownership of some of the land that two centuries of colonialisation had removed from them. Following the High Court’s Wik judgement Indigenous Australians had their right to claim ownership of land significantly reduced by the Howard Government though its 1998 amendments to the Native Title Act. Howard has offered them a welfarised ‘practical reconciliation’ policy in the place of self-determination and justice.
Finally, under the guise of fighting ‘terrorism’ the Howard Government is undermining many civil liberties. Its package of ‘terrorism’ bills presented to the Parliament:
Labor and the minor parties blocked some of these draconian amendments in the Senate. The import point here is to note the extraordinary restrictions which the Coalition wanted to impose on Australian citizens.
The Howard Government has undermined:
Asylum seekers insecurity has been dramatically escalated by the Tampa episode, the ‘Pacific solution’ and by the 2002 refusal to grant visas to 160 Afghan asylum seekers who the Government had found to be ‘genuine’ refugees fleeing political persecution. The Howard Government has succeeded in undermining our security whilst simultaneously dramatically increasing its surveillance of us.
I will now set out two scenarios for the direction Australia might take: the first is a logical development of existing welfare, health, industrial and education policies of the present Howard Government, the second is the polar side of such policies. These scenarios are realistic predictions of the possible future written in line with Toffler’s (1971) suggestion of predicting the future with one eye in the rear vision mirror. The arguments set out here are not straw men set up simply so they can be knocked down. They are based on a careful reading of our political leaders’ past actions and current pronouncements. In addition to monitoring what has been happening to income support, education, community services, health insurance and in the industrial arena in Australia, I have been reading about social policy developments in New Zealand, Britain and the United States.
The construction of the two scenarios has been affected by my reading of two books: Hazel Kemshall’s (2002) Risk, social policy and welfare, a depressing account of where British social policy is heading and Piotr Sztompka’s (1999) Trust: A Sociological Theory which has informed the second scenario. These books provide an important lesson. The direction from which one approaches a topic determines in large part what one sees. If you look at risk, then uncertainty and danger are ever- present. If you seek trust, you may not find it, but you have less fear of encountering a catastrophe at every corner.
Whilst writing this paper I re-read “Policy and future prospects: Income guarantees and future choices”, my 1998 prediction of what would happen to young people under the Howard Government. If anything, I underestimated the extent of the income support and other welfare services cutbacks, which the Howard Government has succeeded in imposing since that time. I failed to foresee the manufactured ‘crisis’ in medical negligence and public liability insurance which has resulted in both state and Federal Governments combining to decrease the compensation available to those who are injured or who suffer misadventure. Nor did I foresee the diminution of the amounts available to compensate workers killed or injured at work. Whilst none of these is a youth specific issue, they all have the capacity to impact to the detriment of young people because they erode the social and economic rights of all Australians.
Kemshall (2002, pp.129-130) asserts that universalism is no longer present in neo- liberal welfare policy, having been replaced by residualism, targeting and selectivity; private provision is applauded; demonstrated productivity is the basis of social inclusion and the self-providing individual is the model citizen. On top of this there is increasing surveillance and imposed virtue (Kemshall 2002, pp.120-122). The Howard government’s imposition of market values and conservative patriarchy via the mechanism of ‘mutual obligation’ is aimed at ending ‘dependency’ upon government whilst foisting ‘dependency’ upon the family. The trumpeters of the Third Way are intensely aware of the ‘moral hazard’ faced by the young unemployed person receiving income support from the State (in the absence of jobs) but they blissfully ignore the ‘moral hazard’ experienced by those employed citizens who would deny such welfare payments to their fellow unemployed citizens.
It started with some states and territories cancelling the car registration or the driver’s licence or both of people who failed to pay their parking fines. The transport authorities claimed that they wrote to the driver’s last registered address informing the person of the administratively imposed penalty. One of the things that happens to poor people is that they move around a lot and frequently do not notify transport authorities of their whereabouts. The end result was that people could, without knowing it, be driving an unregistered car without a licence. This is criminalisation by stealth.
The Federal Government detains all asylum seekers arriving by boat in Australian waters. The detention camps are predominately in outback Australia in revamped ex- military camps. Upon release from such concentration camps whether the individual is granted a temporary protection visa or deported they are issued with an account for their “accommodation” at $147.50 per day for each day of their detention. Many are forced to remain in these camps for years. If the person, with a temporary visa, leaves Australia and then tries to re-enter this country the Government claims they have an unpaid debt to the Commonwealth and refuses entry (Lock, Quenault and Tomlinson 2002). This is exclusion by fraud. It is also a bizarre example of the stated “user pays” principle.
Before going on to detail a possible bleak disciplinary future for Australia under the current extreme economic fundamentalist regime there are other pieces of the jigsaw, which need to be laid on the table.
The Howard Government has imposed a series of obligations upon its poorest citizens, which it quaintly but inaccurately calls “mutual obligation” and which it enforces through a cruel “breaching” system. For a critical assessment of Howard’s “mutual obligation” regime see (Hammer 2002, Kinnear 2000, ACOSS 2001, 2002, Tomlinson 2002 [a], [b], Schooneveldt 2002).
Students who do not pay up front fees for their tertiary education amass a Higher Education Charge; the Taxation Office monitors that debt and when their income reaches a certain point the Taxation Office insists they start repaying the debt. Labor introduced this scheme. The level at which ex-students have to start repaying was significantly lowered by the Coalition. The rate of repayment has also been increased.
Another piece of the jigsaw is the Child Support Agency set up by the Labor Party to collect child maintenance payments from non-custodial parents. This Agency is part of the Taxation Office. Unless custodial parents take maintenance action against the non-custodial parent the Commonwealth Government denies benefits to the custodial parent. This change introduced by Labor is a return to the 1960s. “Targeting is, of course, as much about who is excluded from welfare provision as it is about who is included (Kemshall 2002 p.27)”.
If governments, obsessed by neoclassical economics and market-oriented welfare, remain in office for a further two terms a dark scenario is possible:
In September 2002 a leading Federal National Party backbencher Deanne Kelly, responding to Bruce Chapman’s suggestion that farmers who receive exceptional circumstances assistance be forced to repay it in good times said “It would be like expecting people to repay Age Pensions or other Social Security when their house was sold.” She went on to say “I don’t think the Australian people would accept that. (Country Breakfast 28/9/2002). In February 2003 the New Zealand National Party finance spokesman, Don Brash, said that unemployment numbers could be reduced by abolishing the unemployment benefit. He suggested that local government offer a job to anybody who turns up at a local post office at 8am, and pays them for that day’s work at the end of it, in cash (The Jobs Letter 2003 No. 179 p.1.)
Describing “the responsibilization of the individual and advanced liberal governance” Kemshall (2002) relying upon a Foucauldian critique asserts “the primary function of the welfare state is not the alleviation of poverty or the reduction of social exclusion, but the identification, classification and regulation of deviant individuals and groups (p.120).” The really depressing aspect of this scenario is that the conceptual gap between Howard’s fixation with a compelled conservative compact and Labor’s Third Way theoreticians such as Latham (2001) is infinitesimally small. There will not be an easily achievable escape from this quagmire. Kemshall (2002 p.30) cites Bill Jordan analysis suggesting that the Third Way political constituency consists of those who have most to fear from global markets and technological change who are told they have been forced to assume too much of the tax burden and that social services benefits are redirected to those barely less well off than themselves. The forces of downward envy once unleashed can consume all in their path as they join the race to bottom. It is interesting that it was exactly this segment of the working and lower middle classes that most opposed their taxes going to assist the poor at the time of the 1834 Poor Law reforms in England (Henriques 1979 pp.23-25).
Clearly full citizenship will, if current practices continue, be available only to those able to completely provide for themselves. Those forced to rely upon State provided services will be marginalised and stigmatised and the responsibility, once borne by the State, will be transferred back to the individual. As Kemshall (2002) put it:
‘Public Issues’ are literally transformed into ‘private troubles’ (Wright Mills 1970). Failure to negotiate risk adequately is rewritten as an individual failure rather than understood as a result of social processes outside the individual’s control. The danger of such individualisation is that social inequalities remain hidden and collective responses are delegitimated (p.8).
It does not have to be this way. There are alternatives. We just have to learn from Eric Bogle’s lyrics:
Hard times put us to the test.
We held our wallets to our chest
and said that I’m alright Jack
and to hell with all the rest
and stop doing it before we become blind to the alternatives.
There is an infinite variety of ways to create a better and fairer system than that which prevails at the present time in Australia. I will outline just one alternative that returns us to the optimism and hope of the 1920s, the determination to abolish poverty of the post-World War II period yet one that is capable of equipping 21st Century Australians with the capacity to compete in a globalised world. What is needed is a universal income support system which would guarantee every permanent resident a Basic Income at least at the level of the Henderson Poverty line. It would be paid to each person irrespective of:
In 1848 Karl Marx and Friedrich Engels wrote The Communist Manifesto which heralded a system where the basis of production and distribution would be ‘from each according to ability and to each according to need’. Though such a system has not been implemented in any country, the promise of the Manifesto has presented a challenge to all other systems of income distribution since that time.
At the time of the creation of the modern welfare state in Britain, it was recognised that citizens collectively paid taxes which the government used to fund pensions and services in order to overcome Beveridge’s five giants of ‘squalor, want, ignorance, disease and idleness’ (Timmins,1995). Equivalent thinking emerged in Australia leading to the 1947 consolidation of social security legislative provisions.
In Britain the earliest fully elaborated (book length) Basic Income proposal was put forward by Dennis Milner (1920, Van Trier 1995). After a brief flurry of activity between 1918 and 1922, his contribution disappeared from policy debates about income support for over half a century. The British Liberal economist Lady Rhys-Williams, in 1943, set out a plan to introduce a guaranteed minimum income. In her book, entitled Something to look forward to, she aimed to provide an income floor without interfering with earnings. The economic fundamentalist writer Milton Friedman claims he developed his ideas on a form of income guarantee (the Negative Income Tax) during that year but it took him a further 18 years to publish his ideas. In 1975 Professor Ronald Henderson in the Main Report of the Poverty Inquiry, borrowing heavily on Rhys-Williams’ ideas, advocated a Guaranteed Minimum Income for Australia.
Since that time many different forms of income guarantees have been promoted around the world. The major point of difference is the degree to which authors wish their income guarantee to ape the welfare income support system with its various categories of payment and means tests or instead argue that income support should be universal: available to all as a right of citizenship. For more detail of such income support proposals see (UBINZ, BIEN and BIGA websites)
These are some of the historical ingredients from which to start building our alternative scenario. There are two more necessary components, which I will now consider: developing a moral community and building a counter hegemony. Sztompka (1999) suggests the “moral community is a specific way of relating to others whom we define as ‘us’. …’Us’ means those whom we trust, towards whom we are loyal and for whose problems we care in the spirit of solidarity (p.5)”. Such a delineation of function may have use in some small-scale community. In a modern nation state it is necessary to create a system of interaction which can cope with the care and maintenance of all citizens, many of whom we cannot know and at whose problems we can only guess. There is a need to develop a solidarity not only with ‘us’ but with ‘others’ – with strangers. The adage that ‘it is not possible to be free whilst others are in chains’ translates to income support in the form of it being impossible to satiate hunger whilst others starve.
In order for our alternative income support system to be truly emancipating, it will need to have embedded within it the capacity to build a counter hegemonic critique of the existing structure of Australian society. In other words, it must confront and remove discrimination based on age, gender, race, disability, class and locality which is explicit in the existing structure of this society.
The existing system of income support – based on residualism, selectivity and targeting – is overseen by a political elite (driven by an economic fundamentalist mindset) which is obsessed with narrow accounting outcomes that concentrate on targeted efficiencies. Target efficiency processes give no measure of how efficient the entire system of social security is.
What our alternative system would seek to do is put the security back into social security. To create a system which was socially effective. Some of the system-wide measures, which need to be taken into account if the efficiency of the system is being calculated, are:
Governments seem determined to specify what they deem to be an acceptable ‘mutual obligation’ contribution, but are oblivious to the daily acts of good neighbourliness which many unemployed people engage.
A Basic Income has the capacity to supply benefits efficiently, in the least stigmatising fashion, to all who need them. A Basic Income regime does away with the need for the entire government income support surveillance apparatus, creating savings to government expenditure. Exponents of a secure equitable income support system would therefore regard a Basic Income as politically efficient.
But there are arguments which can and should be mounted in support of an unconditional Basic Income in relation to other efficiencies engendered:
However, a Basic Income is just that – an unconditional universal income guarantee. It delivers an income floor without interfering with productivity. It is a vast improvement on categorical selective social services. It is an advance on all social insurance and private provision schemes which invariably result in the ‘individualisation of risk’ (Lerner, Clark & Needham 1999 p. 11) and as a result create a ‘do it yourself welfare state’ (Klein & Millar cited in Page 1998 p.307).
A Basic Income is not a utopian panacea – it will not abolish all social difficulties. But, it will allow the State to construct other social welfare, health, education, disability, ethnic and community service policies on a firm and known foundation. It is a far cry from the Communist Manifesto‘s promise to create a society based on the principle: ‘from each according to ability to each according to need’. In this regard it may not be the best income support policy, in any absolute sense, just the best income support policy capable of being implemented in the early 21st. century.
If we’re going to build a new world from the ashes of the old
the first thing we have to do is ignore what we’ve been told.
The workers and the workless, the young and very old
will celebrate their union and join the common fold.
We will need to talk to people and to give away our gold
and refuse to join a system where lives are bought and sold.
For those who find they’re hopelessly tied to yesterday
we’ll show the path to victory, that there is another way.
From the city and the country, from women and from men
joined together in the struggle, together we will win.
We’ll pool our strength and disability, building mutuality
and bound in our unity we’ll find creative solidarity.
The included and excluded, those marginalised from birth
will come to share resources, to find their place on earth.
Each must give their utmost, as much as they can spare
so we can build a commonwealth for everyone to share.
When people come together, when we march hand in hand
Black and white together will make others understand.
When people join together, rich and poor throughout this land
we’ll show whoever’s watching – we are beyond command.
Copyright © 2023 John Tomlinson