Income Maintenance Archive - Page 2 of 2

The downsides of the Social Security breaching regime

Written in 2001.

Strike a light-it’s dark
Where ya living?
In the Park.
Going ok – so they say;
not like Ben, he sleeps on the railway roof
failed to meet his mutual obligation
now he’s living above his station.

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The history of income insecurity: There is an alternative

Paper presented at Queensland State Youth Affairs Network Conference Mackay April 14-16th 2003.

Abstract

Australia has never succeeded in ensuring all its permanent residents had access to a secure income. In 2003, many people are living in poverty (ACOSS 2003). The Government could guarantee every person sufficient income to lift them above the Henderson Poverty Line instead it prefers to be preoccupied with what it quaintly calls ‘welfare dependency’.

This paper will examine the various ways Australian Governments have sought to supply reliable incomes to its citizens, the reasons such policies have not delivered security and outline alternative approaches that would ensure that no Australian permanent resident lived in poverty.

Pre-Federation

Prior to Federation the various Australian colonies organised their own welfare services and relied heavily on voluntary charities, particularly those which were church based; some states provided substantial subsidies to such agencies (Kewley 1977, Ch.1, Dickey 1981, Chs. 1-4, Kennedy 1982 Chs.1-4, Campbell 1976, Cairns,1976). There were some income support and other welfare policies emerging in the colonies which were quite advanced and there was the emergence of the trade union movement (Cairns 1976). This, not inconsequential point, is important to remember because the States continued to play a vital role in income support welfare policies for many years.

During the Second World War, with t he Commonwealth taking a far greater role in income tax collection, the states began to withdraw from their income support programs as they were taken over by the Commonwealth. But the States maintained some income support functions well into the 1970s (Client Power Groups in Brisbane 1975,Tomlinson 1975) and have maintained responsibility for much of the health, education, child and disability policies to this day.

A brief look at the Australian welfare state

Professor Frank Castles (1985) said that the Australian Welfare State emerged as a result of a combination of industrial award provisions and the social welfare, health and educational systems. In his February 2001 article in Eureka Street he claimed the welfare state has been constantly eroded since the mid 1980s.

The Harvester Judgment in the Arbitration Court in 1907 set a minimum basic wage. This minimum wage judgment was designed to support a man, his wife and 3 kids. Women got 60% of the minimum wage and this continued for 60 years.
The Federal Income support system started with age and disability pensions legislation in 1908. The Department of the Treasury paid and administered pensions until 1927. There were no Federal unemployment payments but several state governments provided some relief schemes. The 1930s brought the Depression during most of which male unemployment was over 30 percent. In the 1930s most States had the Susso – a ‘work for the dole’ scheme.

Chain Gang
Work for the dole
well “Bless my soul”
what an interesting idea.
You would have thought
that someone ought
to have thought
of that before this year.

Didn’t they try to do it in 1929?
Wasn’t it then the susso scheme?
When men had to leave their families
to go the great outback?

It was the stamp of feet
on the dusty street,
which ensured that they would eat.
The Susso was what it was called
and civilised folks were quite appalled
that men were forced from town to town,
with a swag on their back
and an old corn sack,
as they headed for the great outback.

They have a scheme just like it
for those who are born black;
they work from home,
aren’t forced to roam,
’cause they live in the great outback.
Of course we only pay a pittance,
a charitable remittance,
but what do you expect in the country
when you live so far from town.

The one good thing I have to say
is the Government has promised it will pay
three dollars an hour for a twenty hour week.
Now that’s the going rate.
Dole bludgers don’t be late!!!
It will only apply to the young,
and of course the rural poor,
and the rundown areas of cities
where unemployment is a running sore.

During the Second World War widows’ pensions and child endowment were introduced. The Commonwealth brought together its Social Security legislation in 1947 with unemployment, sickness and special benefits, child endowment, maternity allowance, age, invalid and widows pensions (Kewley 1977). By the 1950s the Arbitration Commission in most awards made provision for workers compensation, sick pay, long service leave and other occupational benefits. In 1967 it held equal wage cases for women and Aborigines. The Aboriginal wage determination was hedged around with slow worker provisions and many Aborigines were run off pastoral properties by white pastoralists in the wake of this 1967 judgment.

In the 1940s Australian born Asians were included in the social security system.
City based Aborigines and Torres Strait Islanders were included in social security system by early 1960s. Indigenous people living in rural and remote areas excluded until early 1970s and even then many did not receive social security. Many remote regions were substantially ignored. In the mid 1970s in some remote Indigenous communities the Community Development Employment Program (CDEP), a form of ‘work for the dole’ paid at about social security rates, was instigated (Coombs 1994, pp. 80-84, Tomlinson 2001 Ch.6).

State governments still looked after single mothers until 1973/4 when Labor’s Bill Hayden introduced supporting mothers benefit. In 1977 Liberal Senator Margaret Guilfoyle introduced supporting parents, thus providing for children being cared for by a lone father. By early 1980s there were1500 different forms of government provided income support payments (Joint Committee of Public Accounts 1983).

In 1975 Professor Ronald Henderson brought down the first main report of the Poverty Inquiry in which he argued for the introduction of a two-tiered Guaranteed Minimum Income.

In 1986 with Brian Howe as a Hawke Government Minister of Social Security Australia began to witness its first significant cutbacks in public provision. Though he spoke frequently about social justice when he did so I got the impression that he envisaged social justice as a stand-alone policy connected to nothing else. How else does one explain:

his widespread promotion of “welfare dependency” and reciprocal
responsibility;
the fact that when ever he amalgamated two social welfare payments he
reduced the payment for all to the lowest amount paid in either category,
the social security cut backs through increased targeting,
the imposition on migrants of a six month wait before they became eligible for social security benefits, and
his crackdown on the unemployed particularly the young unemployed through the false start of Newstart?

Howard’s policy has further weakened the social security system through:

the compulsion of ‘mutual obligation’ and his ‘social coalition’,
his accelerated cutbacks in social provision, for example his abolition of 16-18 year old people’s unemployment benefit and its replacement with his oh so common youth allowance – with its ‘work for the dole’ tyranny.

The severe expansion of social security surveillance and breaching regimes have threatened the security of all recipients (Goodin 2001, Kinnear 2000, Schooneveldt 2002).

Howard has imposed upon migrants a 2 years waiting period for social security eligibility and has imposed significant limitation upon the conditions and payments to recently arrived refugees holding temporary protection visas. The high point of income support policies was between 1980 and 1988 during that period young homeless persons allowance and family income support policies had been added and the social wage had been expanded under the accord agreed to by the Labor Government and the trade union movement. Still income security was not guaranteed to all Australians.

From the Poor Law to Poor Laws

“The Poor Law was not so much intended to help the unfortunate as to stigmatise the self-confessed failures of society (Professor Hobsbawm cited by Higgins 1982 p.202).” In Australia from, at least, the mid 19th century there was an increasing rejection of the British poor law system (Roe 1977 p.4-5). Yet in colonial Victoria according to Kennedy (1982)

The bourgeois myth that the poor were most unlikely to be deserving justified harsh inquiry procedures. The myth justified niggardly and irregular doles; it justified humiliating terms on which relief was offered; and it justified the policy of forcing ‘objects of charity’ back onto the labour market… often to
do the worst jobs at the lowest rate of pay (p.54).

This prescription for income support policies has a remarkable resonance in current Howard Government social security policies of ‘mutual obligation’, ‘participation income’ and ‘work for the dole’.

From the early days of the Australian colonies there was a rejection of the British Poor Law system of workhouses, which Higgins (1982) aptly described when he said: The workhouse, the true shrine of the work ethic, was a sort of concentration camp in which were incarcerated and held up as an example, those who admitted their inutility to capital – the sick, the mad, the handicapped, the
unemployed – and in which conditions were even more monstrous than in the factories (p. 202).

The consolidation of the social security provisions in the 1947 Act made a significant contribution to the development of the Australian welfare state. By the early 1970s the main planks of what was to be a fairly comprehensive system of income support – ‘a safety net’- were in place. Yet there was emerging a consolidated critique that the ‘safety net was full of holes’. Enthusiasm was growing for universal systems of income support predominantly amongst left wing academics.

Henderson’s (1975) first main report of the Poverty Inquiry, Pat Tulloch’s (1979) Poor Policies Australian Income Security 1972-77, my book 1977 Is Band-aid Social Work Enough? Brian Dickey’s (1980) No Charity There, Jill Roe’s (1976) Social Policy in Australia, Rob Watts 1984 PhD Thesis and Richard Kennedy’s (1982) Australian Welfare History; Critical Essays were just some of the critiques of the failure of Federal policies to ensure every permanent resident received a secure income. In 1996 Hugh Stretton wrote Poor Laws of 1834 and 1996, which drew the connection between the policies practiced in Britain in the early part of the 19th century and the Australian welfare policies of the late 20th century.

A review of the present Government’s policies in relation to ‘mutual obligation’ (Howard 1999) and the ‘social coalition’ (Howard 2000) which takes account Polanyi’s classic 1945 text, Henriques (1979) and the recent work by Goodin (2001), Kinnear (2000), Hammer (2002), Schooneveldt (2002) and Tomlinson (2002 [a]) would lead to the conclusion that there is a continuity between the social attitudes towards welfare assistance which informed the 1601 Poor Laws in Britain and those driving the Howard Government’s social welfare policies at the present time.

The essential reason permanent residents of A ustralia have never been able to feel secure in the belief that they will have an income is that Australian Governments have relied upon a combination of the capitalist labour market and a categorical welfare system (rather than universal provision) to supply income to citizens. The increasingly precarious, part-time and casualised nature of work coupled with cutbacks and increased targeting of the categorical benefits system underpinned with increased surveillance and breaching has significantly increased uncertainty in recent years.

All categorical systems exclude some people from eligibility (Boston and St. John 1998). This is the old worthy/unworthy debate, which has underpinned the poor law system since 1601. The enforced ‘mutual obligation’ is part and parcel of the ‘less eligibility’ process that has been integral in all poor law administrations. The principle of less eligibility was an integral part of the poor law administrations England from 1601 until the early 20th. Century was designed to ensure that whatever assistance was provided via the welfare system was less than could be obtained from working and was provided in a demeaning manner in order to discourage people applying for welfare relief. The process of determining, who would be assisted and who would be refused, divided applicants for assistance into the worthy and unworthy poor. Receipt of categorical payments depend on discretionary judgements being made in favour of the applicant. Taxpayers may pay for the benefit but it is conceived of as a charity rather than an entitlement of permanent residence. Though the workhouse system of indoor relief of Victorian England has not been re-established here ‘work for the dole’ is (at least at the conceptual level) the exact equivalent of the 1834 Poor Law out door relief system.

Choose an alternative

There are many alternatives to the compelled, constrained, mean minded, narrowly targeted income support policies which started under Labor in the mid 1980s and have been exacerbated by the present Government. Many may feel we’re come too far down this slippery slope of self-provision to even regain the heights we once reached but together young and old, Indigenous and non-Indigenous, male and female Australians can reinstate pre-existing welfare provisions. Better still, we might decide to improve upon the best of our past income support policies.

If anyone doubts that we can turn the ship around then I would urge you to read Jane Kelsey’s 1995 seminal work on the failure of economic fundamentalism in Aotearoa (New Zealand), Sue Bradford’s 1996 “Daring to Dream a New Tomorrow: An Unemployed Response to a decade of Structural Adjustment in Aotearoa, New Zealand.” and to look at the way the Labour Government in Aotearoa has dumped the social welfare policies of previous conservative Labour and National Governments (The Jobs Letter).

We don’t have to follow the prescription outlined in Hayek (1944) The Road to Serfdom. There are far more useful ways to proceed if we set out to learn the lessons from Frank Stilwell’s (2002) carefully argued Political Economy: The Contest of Economic Ideas, the first six chapters of Lindy Edwards’ (2002) entertainingly written How to Argue with an Economist, Bob Ellis’(1998) hilarious First Abolish the Customer: 202 Argu ments Against Economic Rationalism, Will Hutton’s (2002) The World We’re In, and Goodin, Headey, Muffels and Dirven’s The Real Worlds of Welfare Capitalism (1999). Thus armed we can then set out to change the world. Charity or Universal provision

To end the handout mentality, which surrounds social security in Australia, we require at a minimum a move to universal entitlement and preferably universal provision of an income sufficient to sustain each permanent resident, for example a universal Basic Income.

The question as to whether to have categorical charity style welfare or Universal welfare provision is by no means a new debate in Australia (Mendes 2003, Dickey 1980,Ch. 4, Cairns 1976, Kewley 1977, Kinnear 2000, Tomlinson 1989). Perhaps one sub-question, which has had insufficient discussion, is whether it is possible to have a categorical system that might provide a secure income for all.

Boston and St. John (1998) have set out a cogent argument that it is not possible to provide categorical benefits in a manner that ensures that even all who have an entitlement will receive it –let alone those specifically excluded by eligibility policy. All the Howard Government Ministers who have entered this debate seem incapable of moving beyond the argument tha t welfare recipients need to be divided between the “needy and the greedy”. They are content to assume that all “the needy” get paid. Many of the researchers attached to Centre for Full Employment and Equity (see CofFE website) argue strongly for a job guarantee (that is for Government to become an employer of last resort) rather than simply providing a secure income. In a current CofFE poll visitors to that website have voted 52% in favour of that proposal and only 28% in favour of a guaranteed income without any eligibility requirements. Providing a job guarantee would provide a secure income for all people who have the capacity and the desire to work but it would do little for many who on account of illness, incapacity, child minding difficulties or other reasons were unavailable for employment. There is nothing incompatible with the idea of combining these two programs and I have argued for both a universal Basic Income and a job guarantee Tomlinson 2002[b].

In Australia arguments have been mounted fo r a two-tiered Guaranteed Minimum Income (Henderson 1975 Ch. 6) or a single Guaranteed Minimum Income (Tomlinson 1989) essentially the thinking has centred around the political feasibility of introducing a welfare style guaranteed safety net. Arguments have been mounted for a Negative Income Tax and Tax Credits schemes in Australia have mainly come from right wing economists and a less generous than fully universal Basic Income proposals (McDonald 1995, Tomlinson 2001). I will conclude by providing a brief history of Basic Income in Australia.

Summary

The concept of Basic Income in Australia is at one level a recent arrival in this country at another level it can be seen to have evolved out of the Trade Union and welfare activists’ struggles to improve upon the conditions of the working class. The division between the worthy and unworthy, integral to the British Poor Law system, has been part of the welfare traditions here since the earliest times. The British Trade Union tradition influenced the struggle here for an arbitration system that might provide increased security for workers from want, exploitation, and insecurity. Throughout most of the 20th Century the system of welfare income provision became more widespread, generous and comprehensive. But with the exception of the 1947 consolidation of social security legislation, there was little effort made to conceive of it as a unified system of income support. The first serious attempt to cut back on the comprehensive nature of income support began under the Hawke Labor Government and has proceeded apace under the Howard Coalition Government.

Australian Income Guarantees

Overseas writers have significantly influenced the development of the Basic Income debate in Australia. In particular the British Liberal economist Lady Rhys-Williams 1943 book called Something to look forward to. Lady Rhys-Williams’ aim was “To provide a floor below which no one could fall without imposing a ceiling beyond which no one could rise.” The economic fundamentalist writer Milton Friedman claims that year also as the time during which he developed his ideas on his form of income guarantee (the Negative Income Tax) but it took him a further 18 years before he published his ideas. Though there was some minor acknowledgement of Dennis Milner’s (1920) important book on Basic Income his ideas have not until recent times received the attention of Australian researchers and then mainly due to Walter Van Trier’s (1995) research.

In 1975 Professor Ronald Henderson in the Main Report of the Poverty Inquiry, borrowing heavily on Lady Rhys -Williams’ ideas, advocated a Guaranteed Minimum Income for Australia. There had been some earlier articles written about the need for income guarantees in Australia which can be found on this site. Bill Hayden the Minister for Social Security and subsequently a Treasurer in the Whitlam Labor Government essentially endorsed the idea put forward by Professor Henderson. Also in1975, a group of Australian Finance and Treasury officials using the collective name, Priorities Review Staff, put up a counter proposal to Henderson. It was to the right wing economic fundamentalist Milton Friedman’s Negative Income Tax model they turned. The dismissal of that Government effectively ended Federal Government support for generalised income guarantees.

Throughout the period 1975 to the present some social welfare activists and academics continued to advocate general income guarantees. Initially promoting a Guaranteed Minimum Income and subsequently a Basic Income [Watts (1984, 1995), Tomlinson (1989, 2001), McDonald (1995) VCOSS and Good Shepherd (1995)]. There have also been economists promoting Tax Credit and Negative Tax schemes such as ‘The Five Economists letter to the Prime Minister, 28th October 1998’ Dawkins (1999).

The major overseas academic influences impinging upon the history of income guarantees in recent years have been scholars associated with the Basic Income European Network BIEN, the Universal Basic Income New Zealand web sites: notably Van Parijs, Standing, Gortz and Goodin. The last of these authors is currently researching in Australia. There has also been some input from Learner, Clark and Needham (1999).

Now

In recent years there has been renewed interest in Basic Income. The idea has yet to blossom but the tree is alive and the buds have formed. The renewed interest may be substantially due to the intractability of widespread unemployment, the increasing casualised and precarious nature of work, the adoption of economic fundamentalist economic policy and the imposition of ‘mutual obligation’ upon social security recipients. The last Labor and the present Liberal Governments have substantially reduced certainty in the social security system. Those in the Basic Income campaign want to see the introduction of a universal income guarantee and expanded social wage provisions. The Australian Government’s prescription for what it terms “welfare reform” is enforced obligation, highly targeted benefits and tighter surveillance of recipients. The major point of difference is the degree to which each side wishes their income guarantee to ape the welfare income support system with its various categories of payment and means test or instead argue that income support should be in the form of a truly universal payment to all as a right of citizenship/permanent residence.

Bibliography

ACOSS (2003) The Bare Necessities: Poverty and Deprivation in Australia Today. (Submission to the Senate Inquiry into Poverty and Hardship.) ACOSS, Sydney.
Basic Income European Network BIEN web site:
http://www.etes.ucl.ac.be/BIEN/bien.html
Boston, J. & St. John, S. (1998) “Targeting versus Universality: Social Assistance for All or Just for the Poor.” in Dalziel, P., Boston, J. & St. John, S. Fair and Affordable ? Oxford University, Auckland.
Bradford, S. (1996) “Daring to Dream a New Tomorrow: An Unemployed Response to a decade of Structural Adjustment in Aotearoa, New Zealand.” in Tomlinson, J. Patton, W., Creed, P. & Hick, R. (eds.) Unemployment Policy and Practice. Academic, Brisbane.
Cairns, J. (1976) “Working Class Foundations of the Australian Welfare State.” in Roe, J. (ed.) Social Policy in Australia. Cassell, Stanmore.
Campbell, C. (1976) “Liberalism in Australian History: 1880-1920.” in Roe, J. (ed.) Social Policy in Australia. Cassell, Stanmore.
Castles, F. (1985) The Working Class and Welfare. Allen & Unwin Port and Nicolson, Wellington.
Castles, F. (2001) “A farewell to the Australian welfare state”, Eureka Street. 11 (1), pp 29 – 31.
Client Power Groups in Brisbane (1975) Client Power Manifesto: An Open Letter to our Politicians. in Throssell, H. (ed.) University of Queensland, St Lucia.
(CofFE website) Centre for Full Employment and Equity http://e1.newcastle.edu.au/coffee/
Coombs, H. (1994) [ed.] Diane Smith, Aboriginal Autonomy: Issues and Strategies. Cambridge University, Cambridge.
Dawkins, P. (1999) ‘A Plan to Cut Unemployment in Australia: An elaboration on the ‘Five Economists’ Letter to the Prime Minister, 28th October 1998’, Mercer- Melbourne Quarterly Bulletin of Economic Trends, 1, 48-57.
Edwards, L. (2002) How to Argue with an Economist. Cambridge University, Cambridge.
Ellis, B. (1998) First Abolish the Customer: 202 Arguments Against Economic Rationalism. Penguin, Ringwood.
Dickey, B. (1980) No Charity There: A Short History of Social Welfare in Australia. Thomas Nelson, Melbourne.
Goodin, R. (2001) “ False Principles of Welfare Reform.” Australian Journal of Social Issues. Vol. 36, No. 3, August. pp.189-206.
Goodin, R., Headey, B., Muffels, R. & Dirven, H. (1999) The Real Worlds of Welfare Capitalism. Cambridge University, Cambridge.
Hammer, S. (2002) The Rise of Liberal Independence and the Decline of the Welfare State. PhD Thesis, Queensland University of Technology, Brisbane.
Hayek, F. (1944) The Road to Serfdom. Routledge, London.
Henderson, R. (1975) Poverty in Australia Vol I. Australian Government, Canberra.
Higgins, W. (1982) “‘To Him That Hath…’. The Welfare State.”in Kennedy, R. (ed.) Australian Welfare History; Critical Essays. MacMillian (Aust.), Crows Nest.
Howard, J. (2000) “Quest for a decent society” The Australian 12th. Jan, p.11. Howard, J. (1999) “Building a Stronger and Fairer Australia: Liberalisation in Economic Policy and Modern Conservatism in Social Policy.” Address to ‘Australia Unlimited Roundtable.’ 4th. May http://www.pm.gov.au/news/speeches/1999/AustraliaUnlimitedRoundtable.htm
Hutton, W. (2002) The World We’re In. Little Brown, London.
Henriques, U. (1979) Before the Welfare State: Longman, New York.
Joint Committee of Public Accounts (1983) Income Maintenance Programs Vol. I &II Australian Government, Canberra.
Kelsey, J. (1995) The New Zealand Experiment: A World Model for Structural Adjustment. Auckland University & Bridget Williams, Auckland.
Kennedy, R. (ed.) (1982) Australian Welfare History; Critical Essays. MacMillian (Aust.), Crows Nest.
Kennedy, R. (1982) “Charity and Ideology in Colonial Victoria.” in Kennedy, R. (ed) Australian Welfare History; Critical Essays. MacMillian (Aust.), Crows Nest.
Kewley, T. (1977) Social Security in Australia: 1900-72. Sydney University, Sydney.
Kinnear, P. (2000) Mutual Obligation: Ethical and social implications. Discussion Paper No. 32, The Australia Institute, August.
Lerner, S., Clark, C. & Needham, W. (1999) Basic Income: Economic Security for All Canadians. Between the Lines, Toronto.
Mendes, P. (2003) Australia’s Welfare Wars. University of New South Wales, Sydney.
Milner, D. (1920) Higher Production by a Bonus on National Output: A proposal for a minimum income for all varying with national productivity. George Allen & Unwin. London.
Polanyi, K. (1945) Origins of our Time: The Great Transformation. Victor Gollancz, London.
Priorities Review Staff (1975) Possibilities for Social Welfare in Australia. Australian Government, Canberra.
Rhys-Williams, J. (1943) Something to look forward to. MacDonald, London.
Roe, J. (1976)[ed.] Social Policy in Australia. Cassell, Stanmore.
Roe, J. (1976) “Leading the World 1901-1914.” in Roe, J. (ed.) Social Policy in Australia. Cassell, Stanmore.
Schooneveldt, S. (2002) Do the lived experiences of people who have been breached by Centrelink match the expectation and intent of the Howard Government? M.Soc.Sc. Thesis, Queensland University of Technology, Brisbane.
Stilwell, F. (2002) Political Economy: The Contest of Economic Ideas. Oxford University, South Melbourne.
The Jobs Letter website http://www.jobsletter.org.nz/
Tomlinson, J. (2001) Income Insecurity: The Basic Income alternative. http://www.geocities.com/ubinz/JT/IncomeInsecurity/
& (2003) http:www.basicincome.qut.edu.au
Tomlinson, J. (2002[a]) “Income Support for Unemployed People: Human Rights versus Utilitarian Rights.” Journal of Economic and Social Policy. Vol. 6, No.2, Winter, pp.36-55.
Tomlinson, J. (2002 [b]) “How dare we.” Paper given at the 9thNational Conference on Unemployment. http://e1.newcastle.edu.au/coffee/conferences/2002/abstracts.html#tomlinson Tomlinson, J (1989) “Income Maintenance in Australia the Income Guarantee Alternative.” PhD Thesis. Murdoch University, Western Australia.
Tomlinson, J. (1977) Is Band-Aid Social Work Enough? Wobbly, Darwin. Tomlinson, J. (1975) “Client Power: Helping Clients Gain Their Welfare Rights.” Social Work: Radical Essays in Throssell, H. (ed.) University of Queensland, St Lucia.
Tulloch’s (1979) Poor Policies Australian Income Security 1972-77. Croom Helm, London.
Universal Basic Income New Zealand web site: http://www.geocities.com/ubinz/
Van Trier, W. (1995) “Every One A King.” PhD. Thesis Department of Sociology, K.U. Leuven.
Van Parijs, P. ( 1992) Arguing for Basic Incomes. Verso, London.
VCOSS and Good Shepherd (1995) Income Support in an Open Economy: Basic Income Revisited. VCOSS & Good Shepherd, Melbourne.
Watts, R. (1984) “The Light on the Hill: The origins of the Australian welfare state.” PhD thesis, University of Melbourne.
Watts, R. (1995) “Unemployment and Citizenship: Reconstituting Social Policy in the Twenty First Century” in Hicks, R. Creed, P., Patton, W., Tomlinson, J. (eds.) Unemployment: Developments and Transitions. Australian Academic, Brisbane.

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The Howard Anthem*

* any similarity between this anthem and The Red Flag is incidental.

First published Project SafeCom News and Updates 21/4/2006
http://listsperthimc.asn.au/pipermail/safecom- announce2006-April/000125.html

also published Green Left 31/5/2006 p.21

Battlers all, come rally round
keep your noses to the ground.
Doff your caps to interest rate
feed off loathing, fear and hate.
Praise the Leader one and all
at 5 foot 2 he’s standing tall.
He’s deaf and mean, he is obscene.
Small government – small mind, I glean.

Attack the unemployed and poor
kick single mothers out the door,
disabled people must work more
and send the refugees off-shore.
Don’t worry about the young and old
they should just do what they’re told.
Eulogise the go-getting rich
stay in tune with your betters’ pitch.
Sing in praise of every boss
ignore awards and workers’ loss.

Smash the arbitration law
it helped the victims even the score.
No place for unions in our regime
we’ve defused their head of steam.
Might is right – we’re never wrong
come Battlers, sing the Liberal’s song.

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The ideological implications inherent in social work: Their relevance to teaching

Paper given at the Australian Social Work Education Conference, Launceston
14 – 17 July 1984.

Recent Editorial comment has been added in RED.

Abstract

The, Australian social welfare system consists of a confusing array of programs. Politicians and administrators claim that the ultimate aim is to provide a comprehensive caring network which will ensure that those in greatest need are. helped. Welfare programs purport to support motherhood, the family, the aged, youth, widows, orphans and other worthy groups. There is a generally accepted assumption that in this country we are moving to abolish poverty.

In effect many welfare policies reinforce inequalities, destabilise families, are riddled with stigma, divide the workers from the workless, maintain the poor in poverty, assist the service providers avoid poverty, and because they interfere with necessary structural adjustments to the work force ill serve the interests of capital.

Arguing from a socialist humanist perspective (informed by some recent feminist literature and through involvement in Aboriginal issues) I wish to look at some welfare debates and point to the role of social work teachers in the struggle for a more sane, equal and fair society – one which might provide the base to challenge the racist, classist, sexist, urbanist and ageist welfare system on the way to an attack on capitalist social relations.

Before we start on this paper I would like you just to spend a minute thinking about why we are engaged in the process of training students in social welfare. Are we training them to become:

soft cops
activists
ideological purists
future tutors
husbands and wives of the bourgeois malcontents
helpers
departmental operators administrators
cool out caseworkers

Richard Nies may be content to train SAITerist* and Jim Ife WAITerist** hopefully others are training them to become:

empowerers
whistle blowers
urban guerillas
or at least urbane social critics.

* Richard Nies was, at the time, head of social work at SAIT, the South Australian Institute of Technology
** Jim Ife was, at the time, head of social work at WAIT, the Western Australian Institute of Technology.

We know that by the time most students have passed through our courses we have trained or is it drained their sense of empathy with the poor out of them, we’ve taught them to distance themselves from the horror of poverty through non-emotional involvement. Often confidentiality means we encourage students to ignore the harm which agencies cause clients.

But just sometimes a few students get through the courses with their sense of anger intact. I wish we provided courses which trained students to understand other people’s plight and to do something about poverty and misdistribution, courses which sharpened their anger and showed them how to tear down the existing system on the way to building a better, more equal world.

Throughout this paper I shall be speaking of the state and I will be concentrating upon the repressive aspect of state intervention in the lives of poor people but I don’t want to give the impression that I conceive of the state as a unidimentional repressive apparatus. The state supplies benefits and protection to the powerless, at the same time it controls them. [1]

In much the same way as the basic physics of light can be understood either from the perspective of light as wave theory or light as a particle, and that a fuller understanding is often obtained using both explanations of the behaviour of light because light sometimes behaves as if it were a particle and at other times as if it were a frequency: the contradictions within the state manifest themselves in different ways. Some writers have conceived of the state as a superstructure [2] and others have seen it as a system of relationships. [3] When I speak of the state I am referring to both the superstructure (its physical presence and hierarchical service systems) and the system of relationships. The relations influence the simultaneously affect the system of relations. Perhaps more clearly than in any of its other forms the state or that part of it called welfare state expresses these contradictions most clearly. Those of us who bled through the years of Fraser’s* fascism witnessed cutbacks in welfare provisions. Aborigines in particular suffered massive expenditure cuts during the reign of those born to rule, whilst they paraded on the world stage as the bearers of the white man’s burden in Southern Africa. We now have a reformist social democrat government in power, but even if the Hawke Government claimed to be doing so, “it is not good enough to talk simply of ‘restoring the Welfare State’ ….. Too often the Welfare State reflects and feeds the class, sexual and racial inequalities …… we need …… an alternative social policy to complement and build on the alternative economic strategy. ” [4] or strategies.

*Malcolm Fraser was Prime Minister of Australia 1975 – 1983.

Need or the satisfaction of need has been the justifying ideology of the welfare state [5] and I would like now to quickly review the meaning of need but before doing that I’ll explain what I mean by charity. Charity is a concept derived out of a belief system started by some Jewish bloke who began the first cost cutting exercise at excutions when he agreed to cross his legs because the legionnaires only had three nails. I am indebted to Helen Creed who pointed out that if he had clasped his hands they’d have only needed two nails. There would be nobody here today who is not aware that the social work profession grew out of the charity organisations of the last century. We all know agencies where the charity tradition is alive and well which employ social workers. We realise that integral to the helping professions is the concept of doing good. Yet we often get well paid for our work. It really is a case of “doing well by doing good.” I realise that this phrase was used by Tom Lehrer, the American comedian, to describe the old dope peddler who gave free samples to school kids, but it also seems to have widespread applicability to the social work profession.

Need

The concept of assisting people in need is predicated upon the liberal desire to assist those having difficulty coping with the diswelfares caused by market forces. The liberal view of need embodies a “passive” conception which is closely interrelated to traditional worthy categories and administratively defined wants. [6]

The liberal desire to assist all those “in need” is in effect a determination to refuse assistance to all those whose circumstances do not fit into some societally approved, arbitrarily defined (albeit undeclared and somewhat flexible) set of rules. Such a concept of need is a far call from the way that socialists conceive of need.

The clearest expression of the socialist conception of need is found in and Engles* famous dictum “from each according to his (or her) ability, to each according to his (or her) needs”. Need, as described in much socialist theory, is difficult to translate into material terms because the concept has generally been taken over unreflectively from Marxist/Leninism and many socialists consider that real needs will only be addressed after there has been a progression through the phase of the dictatorship of the proletariat. Need in this sense is seen in utopian terms. But socialist practice has meant that it has been necessary to satisfy basic needs by historically specific, ideologically specific, emotionally specific, and economically specific means. In a true state of communism the individual would satisfy his or her needs within a context of the collective definition of wants and where the individual in satisfying his or her needs would at the same time be striving to satisfy all. [7]

*It was in fact Marx who wrote this in : Marx, K. “Critique of the Gotha Programme” http://www.marxists.org/archive/marx/works/1875/gotha/ch01.htm

Until we reach such a state of bliss, socialists have to content themselves with a definition of recognised need (the acceptability of being defined by the state) = but socialists do demand that such definitions of need are clearly spelt out, that they are universal and are widely publicised, e.g. aged pensions. Socialists see such a process as a step towards the ideal. Bob Deacon makes the point that “under socialism what constitutes human needs and how they are to be satisfied becomes for the first time the central question of politics.” [8]

The relationship between needs, services and the family is a very close one in the social work field. Often the justification given for recognising and responding to particular needs is that such services are necessary to support the family. The use and abuse to which the family is put in the social welfare industry suggests it could be helpful to make a few passing comments about it.

The family

A lot of social work teaching, even some of the more progressive, stressed the importance of the family, kids we know are better off in most families than in most institutions. The whole decarcaration debate is centred on such thinking. But we do not ask at what cost to caring parent (who are overwhelmingly women). If the State is really concerned about the rights of and well being of children, why does it give so little to support children in their own homes and so much to support children in institutions. If the family is so important why is it that the state usually intervenes only after it breaks down? Why is so much of the social work literature dealing with family related to the stereotypical nuclear family when we all know that the stereotypical nuclear family constitute something like 20% of the households with children in this society?* Perhaps the answer lies in the fat that the society avoids or limits its responsibilities for children by relying on the family and often in so doing oppresses those family members who are left with the responsibility of caring for children. The myth of the stereotypical nuclear family provides a useful support for capitalist patriarchy. That is why activists have suggested that the “struggle against sexism and the many aspects of the family that seem to us constraining and deforming is an essential part of the struggle against the ‘state form’.” [9]

* Footnote ASW Impact March 1984 p12 Man and Woman households with dependent children. 1971 – 30.55% 1981 – 28.64%

The workers

There is no major structural distinction between the lady bountiful distributing largesse and the professional caseworker helping a client maximise his or her innate potential. The professionalisation of welfare ensures that the workless are devalued in the presence of a paid professional.

There is a major segmentation in our society between workers and workless and the welfare industry, with the exception of the Family Income Support and family allowances, is structured in such a way as to reinforce that divide. The terms employee and “client” appear at times to be mutually exclusive categories.

I want to look at the effect that the exclusion of low paid workers from the benefits of the welfare industry has had in holding back more progressive advances in the welfare state. The average man or woman on mean (no pun intended) wages is aware of the fact that their income is not far above some welfare beneficiaries. The Henderson 1966 poverty line was set a little above the then minimum wage. [10] These low wage workers are, well aware that everyone else in on the take but being PAYE taxpayers they don’t have much room to manoeuvre. Social work lecturers at this conference are writing off their expenses against their tax. But if our low wage man, lets call him Bob, has a wife Heather and they decide that Heather should go to work, then they know that it will cost them $1500 over the next year for child care for each preschool child and they can’t claim that on tax* nor can they claim fares to work – yet we can claim the cost of the fares to this conference because we claim it is necessary for our employment. Bob and Heather have been hearing about the Bottom of the Harbour and Cherry Picking tax scams. The lawyer he saw last week had just come back from a weeks holiday in Hong Kong, in fact everyone who worked in the legal office went on that yearly junket. The bloke who built the spare room on their house wanted to be paid in cash. Heather’s sister has never had it so good since her old man left, she gets the supporting parents benefit and has a new boyfriend. The house next door is full of young people, most of them are on the dole, who never seems to go to work, and seem to coincide their late parties with those nights when he’s got an early morning shift. When an interviewer knocks on Bob’s door and asks him what he thinks about people on welfare it is of little surprise to find that the interviewer, after deleting the expletives, can codify his answer in the square “feels they are getting too much”. Do we lump him with the Stephen Lushers** of the world or do we try to link the tax and social security systems together and work to introduce processes which eliminate fraud at both ends? Wouldn’t this be a slight improvement over the present system which discriminates against the honest and rewards the cheats. Is there any justification for having a tax system which can’t make the rich pay any tax and 86% of income tax is paid by PAYE earners.

* In 2006 it is now possible to gain some assistance from the tax system in instances where a licensed Nanny is employed. This assistance goes to highly paid workers. There is also a means tested child care subsidy which assists low paid workers.

** Stephen Lusher was a conservative Federal politician who spent a deal of time waging verbal assaults on unemployed people.

The working class pay for the social security system and yet low paid workers are prevented from obtaining benefits from that system. It is therefore hard to convince workers to forgo wage increases to extend the welfare system.

A Guaranteed Minimum Income, integrated with the tax system, plus increased surveillance of tax avoiders, particularly if combined with effective wealth and capital gains tax would create the situation where by low paid workers as well as the workless would obtain benefits from the state and that would lessen workers’ resistance to improvements in the welfare state.

But we have a social welfare industry which would rather concentrate on the very poor and leave the issues affecting low income earners to one side

Poverty

We need to move away from a concern with poverty and begin to address the real issue of equal and/or equitable distribution of wealth and income. Adam Jamrozik’s 1984 ANZAAS paper makes the point at least for Sydney that inequalities of average household income between different local government areas was only of the order of 2 to 1, that inequalities of wealth were of the order of 9 to 1. [11] Australia wide the average income of the top 10% of individuals is 18 times greater that the average income of the bottom 10%. [12]

As long as we tie our thinking to the issue of the alleviation of poverty (in Pat Tulloch’s term “poverty engineering”) then we are automatically trapped by two constraints:

We are forced to conceive of the alleviation of poverty in terms of crumbs from the table – the charity debate;
Our time is taken up in deciding what constitutes poverty – in arguments over whether one artificial poverty line is better than another. The Fraser government provided us with a perfect, though expensive, example of that when they instructed the Social Welfare Policy Secretariat to find out what poverty was. Their report entitled Report on Poverty Measurement determined they could not measure poverty.

Redistribution

There are some real obstacles to redistribution in Australia and many of them hold senior tenured positions in the schools of social work I know one shouldn’t speak ill of the dead, but I will because they have one real advantage over the moribund. The dead can’t sue for libel yet. Though if Gareth Evans* has his way they will still be able to for three years after doctors have managed to rip what parts they want from the skeleton, the undertaker has got his cut, and the social worker has completed bereavement counselling.

* Gareth Evans was Attorney General at the time.

Tom Brenan, one time Head of the Social Work Department, at the University of Sydney said “the social services should not be used as political tools. They are not designed to redistribute income nor should they specifically preserve the status quo. They provide a line below which people are not allowed to fall”. [13] Just in case someone is going to claim useless reactionary old fools have a right to one stupid statement I refer you to his article in Mendelsohn’s Social Welfare: Selected Papers.

Now lets return to the Bulletin article for it represents the sort of lies which in social work academe sometimes pass for scholarship. The suggestion that the social security system provides a line below which no-one falls is crap. The holes in the safety net are there and they’re there for a reason: to force compliance of the workless, particularly the unemployed, dependent women and Aborigines. The only accurate statement in the whole quote is when Brennan says the social services “are not designed to redistribute income”. The working class pays for its own welfare services because there has always been too little political will to force the rich to pay their taxes. If you are serious about changing the welfare system towards a more equitable one then it is important to seek out the reactionary members of staff and confront them – if they don’t change – expose them for the fascists they are. After that you can start on the fence-sitters. After all you’ll be doing them a favour because if you let them remain fence-sitters all they’ll get is splinters up their arse.

Expose the system

I don’t want to depreciate the efforts of those of us who spend a lot of our time teaching students to understand the existing system or the historical basis for the programs which now operate, but if that is all we do then we fail to help students to see what possibilities exist to change current welfare programs. A significant part of Marxist analysis relies on placing processes in their historical as well as materialist context. But any critical appreciation of social processes is dependent; upon the depth of explanation of the ideological as well as the physical manifestations of events. The “objectified” historicism of social events makes unintelligible the underlying ideologies – it reifies the past and weakens current analysis.

Perhaps I should give an example of what I mean. As a student I was told that the existing welfare system grew out of the poor law administration in England and that somehow we arrived at a phase where along with the South Sea Island Poms* we became “the social laboratory of the world” – we had created “socialism without theory”. I never quite got to understand how the transition occurred. Then a couple of weeks later someone told me about the Bismarkian social insurance programs of Germany in the 1880’s.

* Colloquial name for New Zealanders

But I did not tie the two systems together; no-one pointed out to me the underlying unity between laboratory of the world and Bismarkian social insurance; it was not until some years later that I realised that both system underlay the benefit-control nexus. No-one bothered to explain how it was that Aborigines and Asians were excluded from all social security payments until 1942 when some became eligible for unemployment benefit, or why it took until the 1960’s before Aborigines began to get pensions and benefits on similar terms to whites.

There was no discussion of the fact that though the state paid more women than men, that it “was often a more jealous husband than the man they’d left”. *

*This concept was first used by Carol Glassman “Women and the Welfare System” in Morgan R, (ed) Sisterhood is Powerful, Vintage, New York 1970

There was little acknowledgement of the plight or rural people nor of the way that the young and the old were often discriminated against in social policy.

Now, of course things have changed, and we all know that it is racism, sexism, ageism and urbanism which are the underlying ideologies which result in the segmentation of welfare recipients and that these ideologies added to classiest values result in the division between the workers and the workless.

Now that we all have an understanding of the major ideological forces informing the welfare debate in this country, we need to confront our past reluctance to look beyond superficial explanations of the Australian Welfare state.

The lack of debate

An interesting difference between the Australian social welfare scene and its British and American counterparts has been the relative absence of detailed ideological debate here. Britain has had its Beverages, Laskis, Crosslands and Titmuss’ on one side and conservatives on the other. In America there were the New Dealers and the old Republicans. In both these countries a very real divide separated the opposing ideological forces during the 1930’s and 1940’s.

In Australia, the State undertook responsibility for income maintenance earlier, and with the exception of the social insurance/non-contributory wrangle there was general agreement that the aged, invalid, then widows and finally the unemployed were worthy and should somehow be assisted, the arguments centered around how much rather than why we paid income maintenance. Both major political groupings happily excluded Asiatics, aliens and Aborigines.

Daniel Bell in his end of ideology thesis argued that in America and Britain there was a merging of ideological perspectives in the post industrial, era of the 1950’s [14]. In Australia the debate had not really begun although the first signs, of emergence from the stultifying Menzies period were starting to become obvious in the Aboriginal Land rights and supporting mothers campaigns of the late 1960’s and early 1970’s. By then the Vietnam War, Civil Rights and welfare campaigns had successfully challenges Bell’s end of ideology thesis, in the United Kingdom and the United States.

The importance of this point for Australian social welfare lies in recognising the ease with which we have avoided coming to terms with the underlying ideological features which structure Our welfare services. The discussions get bogged down in party political factionalism at one end and the complexities of administrative minutiae at the other thereby ignoring the central arguments which would allow an understanding of the reasons we have income maintenance payments at all. This has two effects, firstly it allows the continuance of the ‘conservatising adhocracy’ which passes for social policy and secondly it mystifies the failure to confront the maldistributive nature of the Australian economy [15]. The result is we have a social welfare system which ignores the financial needs of many of our poorest citizens because equity and/or equality are excluded from consideration.

One does not need to be a futurologist to have a conception of improvements which might be actualised in social welfare. The existing criticisms provide the directions for future changes. To take just one example, there are over 1,000 different eligibility tests for welfare services provided directly or indirectly by the state. This does not take account of minor discretionary decisions, such as, whether the Cunnamulla CWA will assist or refuse assistance to the Aboriginal unmarried (in the Christian sense) mother of six whose humpy was bulldozed by the local council last week.

If it is not possible for people who teach welfare to know and understand all the welfare programs which exist in Australia, let alone the various detailed eligibility tests, then poor people, with little education have no chance of understanding what they are entitled to. Just making the welfare system simple enough so that poor people could understand it would be a major improvement.

I would like to leave you with one final thought as to how we might set about improving the existing system.

Accountability

During the last two years of the Whitlam Government, evaluators of social welfare programs started to appear. The years of Frasers’ fascism saw them proliferate like rabbits, they left few minor program unravaged but virtually ignored evaluating the major income maintenance programs. The reason for this is clear – if evaluators had been let loose to look at the failure of the incorrect maintenance programs to deliver stigma free welfare in an efficient manner, in a way clearly understood by the recipients, based on equity considerations then the evaluators would have actually been evaluating the performance of the government of the day.

Recently I was at ANZAAS and heard a paper delivered on the consultative process which a committee of child welfare experts had been engaged in by way of grounding their recommendations for revised child welfare legislation in Victoria. The speaker claimed that the best way to come up with a detailed and wide-ranging review of child welfare practice and needs was to engage in a multidisciplinary approach through consultation [16].

One alternative would be to proceed to extensive funding of actions by clients for professional malpractice; but such proposals would operate against the interests of front-line workers and leave the agency administrators free to carry on their existing practices.

There is another approach which would provide a direct incentive to encourage welfare ministers to implement decent welfare legislation and would ensure that welfare workers and their agency administrators provided a service in line with clients’ wants. This would consist of a WELFARE CRIMES TRIBUNAL based on the Nuremburg War Crimes Tribunal. The welfare crimes tribunal would have all the powers of a Royal Commission plus the power to sentence welfare workers, their agency administrators, and in certain cases the relevant minister. Special legal and social work advocacy centres would need to be set up to monitor a department’s performance and collect complaints from clients of the department and to initiate prosecutions before the tribunal.

I realise that this process would turn on its head the current review tribunals, and inter-departmental review procedures. The Welfare Crimes Tribunal would by due legal process proceed to hear clients complaints of the treatment they received rather than simply determine whether an officer had acted according to the orders of his or her superior. It needs to be remembered that at Nuremburg the defense that one was carrying out orders (in social welfare jargon “operating according to the act”) was not considered a sufficient defense for crimes against humanity [17].

Bibliography

Blagg, H., and Derricourt, N., “Why we need to construct a theory of the state for community work” in Craig, G., Derricourt, N. and Loney, M. , (eds) Community Work and the State. Routledge and Kegan Paul, London, 1992, p.19.
Althusser, L., For Marx. Penguin, London, 1969.
Corrigan, P., Ramsay, H., and Sayer, D., Socialist Construction and Marxist Theory. Macmillan, London, 1978, p.11

Quoted in Deacon, B. , Social Policy and Socialism: The Struggle for Socialist Relations of Welfare. Pluto, London, 1983, p.250.
See Taylor – Gooby, P. and Dale, J. Social Theory and Social Welfare. Edward Arnold, London, 1981, p.22.
Mayo, M., “The European Poverty Programme: why reinvent the broken wheel?” in Craig, G., Derricourt, N., and Loney, M., (eds) op cit, p. 139.

Galper, J. The Politics of Social Services.Prentice Hall, Englewood Cliffs, 1975, p.46.
Deacon, B., op cit. p.25.
The London Edinburgh Weekend Return Group, In and Against the State. Pluto, London, 1980, pp.83-84.
Manning, I., “The Henderson poverty line in Preview”. Social Security Journal. June, 1982, p.7.
Jamrozik, A., “The Welfare State: An Instrument of Redistribution or of Inequality. “Paper given at the Australian and New Zealand Association for the Advancement of Science (ANZAAS) Conference, Canberra, May 1984, p.9.
ibid. p. 3.
quoted in: The Bulletin April 7, 1981, p.37
Bell, D. The End of Ideology. Freee Press, New York, 1960. See also Lipset, S. Political Man. Heinemann, London, 1959.
This point is elaborated upon in Tomlinson, J., and Creed, H., “Ideology of the Family: The Demystification of Social Welfare Provisions relating to Youth and Income Maintenance Policies.” Paper given at ANZAAS Conference, Canberra, May, 1984.
Carney, T., ‘Deforming child welfare law: diverting by-ways on the road to Utopia.” Paper given at ANZAAS, Canberra, May, 1984.
The work of the legal centre in Redfern is a step in the right direction.

More Info

The importance of trust

Paper given at the 6th National Conference on Unemployment, University of Newcastle, 23-24 September 1999.

Abstract

The major problem facing Australian people without paid employment (or sufficient paid work) is not the absence of work but the absence of a decent income support mechanism.

There are many way of providing sufficient paid employment to all who desire it. Identifying ways to surmount the obstacles to full employment are by no means intellectually challenging. Langmore and Quiggan (1994) set out a detailed blueprint to reduce unemployment to 3%. Governments, since 1974, have failed in this important task. The last Labor Government at least presented a coherent plan to train unemployed people and reduce the level of unemployment to 5% by the end of this century (Keating 1994).

In this paper I concentrate upon ideological impediments to policies which would ensure both full employment and a decent universal income support system because there are no economic obstacles which would preclude such social advances (Saunders 1995, Rankin 1999).

There are underlying reasons successive Australian Governments have rejected both full employment and decent income support. The on going debate about:

inclusion versus exclusion,
the fiscal drain of what the Labor and Liberal Parties call “dependency”,
universalism versus targeted benefits (thread bare safety-nets for the “deserving”),
compulsion and punishment,
neglect versus liberation, and
the confused dependency rhetoric and moral jeopardy arguments

is sucking this nation into a cesspool of policy busyness rather than a determination to get on with the business of sorting out both income support and the labour market. The interplay of these debates has resulted in the hegemonic economic fundamentalist preoccupation with small government leading in turn to the loss of commercial opportunities and wasted social opportunities.

I seek to follow on from the paper I gave at the 5th National Conference on Unemployment ( NZUBI Web site) to further tease out the reason we fail to trust ourselves (and others) and why this leads in turn to our failure to introduce an unconditional basic income.

A regurgitation of the Latham/Pearson line

I will begin by looking at recent commentaries given by Mark Latham and Noel Pearson because they exemplify the essence of the current misdirection in employment and income support policy debates in this country. If ex-front bencher Latham was an isolated backbencher he could safely be ignored. However, in relation to welfare to work (workfare), incentives to get off welfare, mutual responsibility and dependency rhetoric, it is becoming increasingly difficult to separate his views from those of Wayne Swan (1999[a, b, c]), the Shadow Minister for Family and Community Services, Jocelyn Newman the Minister for Community Services (Newman and Swan 1999), Tony Abbot (1999) Minister for Employment Services and John Howard (1999). Equally Noel Pearson is a significant indigenous leader who played and extremely important role in the post Mabo debate on native title.

On the 26/7/99 Mark Latham and Noel Pearson spoke at the Brisbane Institute. As Ken Davidson (1999) writing in the Age a few days later pointed out Latham’s rediscovery of “mutual obligation” was particularly timeless“. In one way or another mutual responsibility has been part of Anglo-Saxon society since the Tudors – the Poor Laws, the susso in the 1930s, and the work test for most of the post-war period.” (p.15). Reading Latham’s writings on “dependency”, one is reminded of Karl Polanyi’s (1944) recounting of the nineteenth century analysis of the 1795 Speenhamland system.

Latham(1999[a]) concentrated much of his talk on “dependency” and the alleged cure for it provided by Tony Blair’s Third Way (see also Mead 1997), he claimed:

One good thing about the Third Way is that it is absolutely obsessed with finding solutions to the problem of social exclusion. It wants to reform the welfare state, not to abolish it, but to help it survive.

Before going on to state:

The main drivers of dependency are social, they are not financial. Basic relationships of self-esteem, recognition and trust have broken down. At its core, long-term poverty is a problem in the relationship between people. This is something I think the other side of politics, the Left wing, have ignored.

He then suggested:

Even though the Left has always expressed its concern for disadvantaged people, it has neglected the importance of these social relationships. It has positioned welfare policy solely as a relationship between government and its citizens. Its only answer to poverty has been to try and change the material conditions of welfare recipients, and while this remains an important policy goal, it is not sufficient to break the cycle of welfare dependency. People will only use the material gifts of government productively if they have the self- esteem and the confidence to build social relationships.

He returned to this theme later in his talk:

Commonsense of course tells us that people can’t build recognition with their fellow citizens unless they are active in society. They need to be doing things in a positive way, to find that sense of belonging, that sense of self-esteem from positive social behaviour, developing new skills, engaging in productive work, participating in civic life, creating interests and purposes in common with the rest of society. Without activity of this kind, there can be no end to the culture of welfare dependency. (italics in original)
This is why unconditional welfare is such a crime against the poor. It gives people material support without requiring from them a positive engagement in society.

Such analysis reiterates the now discredited Oscar Lewis (1966) Culture of Poverty thesis contra Valentine (1968), Keedie (1973) and Ternowsky (1980).

Latham went on to suggest:

Giving people public housing does not change their place in society. Giving people improved transfer payments does not change the way in which they are perceived by other people. Giving people improved access to services does not change the way in which they relate to the rest of community.

Echoing Cox (1996) echoing Putnam (1993) he glorified the importance of becoming “actively” involved in civil society. This theme is currently also preoccupying Pearson (1999[a, b]). As it has Cass (1988), Pixley (1993), the Green (Committtee on Employment Opportunities 1993) and White (Keating 1994) Papers.

Latham continued:

The Left, as in so many areas, has been well motivated but basically misguided. It has used the welfare state as a substitute for social relationships. It has positioned the poor as passive clients to the patronage of government. It has tried to shift material resources around society under the banner of redistribution. Yet it has overlooked the key resource, the key resource in our society, the one that is created between people – the human resource of mutual recognition, self-esteem and trust…..

Here Latham is confusing the absence of compulsion with passivity, before proceeding to argue:

that welfare dependency has an even more damaging effect. It locks people into a lopsided patron/client relationship and this has been one of the unintended impacts of the welfare state. Patrons exercise their power and control without an expectation of reciprocity. Clients are denied a sense of social worth and equality, and out of this, dependency is the inevitable and unhappy result. We need to level out these relationships and to create what is known as social capital – that is a society based on mutual recognition and mutual trust.

Latham conveniently ignores:

the currently enforced obligations which attach to receipt of single parent, disability, education and unemployment payments and Howard’s new literacy requirements for the young unemployed
the proposition that it is the form of capitalist relations (particularly as they are played out in a globalised economic fundamentalist world) which creates the pressing shortage of meaningful paid employment,
the possibility that it is stigmatised, targeted , mean (insufficient) income support which exacerbates “the problem” that he calls “welfare dependency” (Boston and St. John 1998, Goodin 1992),
the idea that demanding people are actively involved in some State approved activity contributes to their “dependency” because it can encroach on their autonomy, undermine their dignity and impinges on the time they have available to undertake activity which is meaningful to them.
the fact that universal provision of public health is welfare, as was free state education and universal Child Endowment, and that none of these programs demanded any specific reciprocal obligation.

Latham does not explain the mechanism by which young unemployed people, compelled to engage in forced labour in return for a welfare payment of substantially less than the Henderson Poverty Line, have their stigma removed and replaced by dignity. One wonders how anyone so abysmally ignorant of what the Government already requires from welfare recipients in return for inadequate social security payments would feel they had something to contribute to the reciprocity debate.

B. Campbell (1999) points out the greatest success of economic fundamentalism is that it allowed us to forget the victories of the welfare state, that those victories were the expansion of public health, education and income support. She also makes the point that these benefits flowed disproportionately to the middle class and the upper working class, and that many in the lower working class, in current Strayan jargon read “little Aussie battler”, were still waiting to obtain benefits from the expanded service provision. Campbell (1999) makes the point that conservatives from Thatcher to Hanson, Latham and Howard find their message appealing to many in the lower classes because they speak to their disillusion.

Latham’s (1999[a, b, c]) preoccupation with his “active society” led him to expose his real agenda. He announced that in his opinion 400,000 of the 550,000 disability pensioners should be working or making some other contribution to the society. [The comedy writers of “Back Burner” (19th August, 1999) portrayed this suggestion as black comedy.]

Latham also has a bit of a problem with the way single mothers are assisted in Australia. As Davidson (1999) put it, Latham’s fascination with making teenage mothers work is revealed in his suggestion that “Australia should follow United States policy of mutual responsibility for teenage mothers, with a special package of training , child care and transport services to move them into jobs. (Teenage mothers are 3 percent of the total women with dependents on welfare.”(p15)

Latham’s (1999[a, b, c]) preoccupation with activity and responsibility reveals itself as an obsession:

A good society has each of its able-bodied citizens in active work, in learning, in civic life. Only by staying active can people maintain a proper sense of well- being and self-esteem. This is the basis of mutual responsibility. It accepts public responsibility for government doing the things, the training programs, the employment schemes, the opportunities in life that can help people move out of welfare dependency, but it also demands responsibility from welfare recipients – the responsibility for positive behaviour in society, the responsibility of effort and achievement, because in the end, without achievement and effort, there can be no end to this welfare cycle.

Such themes are taken up by Pearson (1999[a]) in a book length paper entitled “Our Right To Take Responsibility.” He lists three important influences: a mate from Hopevale, concerned by the damage drinking is having on indigenous society, a book about drink and societal breakdown in one indigenous Canadian community and Latham’s (1998) book. His paper (1999[a]) has three major themes:

the right to take responsibility for self,
the right to reinforce traditional reciprocity, and
the right to a real economy.

Each of these points would be unremarkable to most progressive social scientists. However as is obvious from the beginning and reiterated in Pearson(1999 [b]), and Koch (1999), Allum (1999), the paper sets out to:

drive a stake through the heart of the welfare system,
to denigrate the Left for their good intentions in ensuring people have a right to welfare without a mandated responsibility to reciprocate,
to promote what he interchangeably calls “reciprocity” or “responsibility”, and
to develop a real economy.

He praises two pre existing periods: pre1967 and pre-invasion when he asserts his people on Cape York, were part of a real economy. He is remarkably silent about the mission economy. He acknowledges colonialism and racism as problems but decides not to deal with them. His glorification of the real economy of pre-1967 I find remarkable. I visited Hopeville for a week in 1963 when it was run by Lutheran missionaries. At the church service I attended the Devil got star billing but j,christ@heaven hardly a mention. I spoke with many of the men who complained they were prevented from engaging in any individual or family economic enterprise on the reserve by the missionaries. Stories supported by Campbell et al (1958), Reynolds (1998), Bennett (1957). The story of the disappeared money of those who worked off missions is told by Kidd (1997).

Having said it was all right for “non able-bodied” people to be assisted without conditions being attached to that assistance Pearson saves his most intense vitriol for forms of what he terms “negative welfare”. In the opening pages he asserts:

assistance without reciprocation – is in all cases, destructive. It is destructive of individuals and communities. No able-bodied person should be provided with any assistance or help without some form of reciprocation.

Later he notes:

The first step in leeching out the poison from welfare is to ensure that Government stops dealing poison to individuals in our society, through sending cheques in the mail. It is the direct corruption of individuals through the provision of resources via the government’s welfare mode that is the source of the problem.
Government has to kick its inherent habit of trying to improve Aboriginal society by “giving” assistance, and “giving” help and “giving” support , through the welfare system. And our people have to stop relying on government providing these “gifts”.

Towards the end of the paper he writes “welfare is a con. It is a fraudulent excuse for an economy. It is flour laced with cyanide trace.”

Trying to ascertain what Pearson actually means by his interchangeably used terms reciprocity, responsibilities, mutual obligation is difficult. For instance he says:

the attack on Abstudy (for secondary and tertiary education) is so tragic. Abstudy is the one government program that has produced results- the thousands of indigenous tertiary graduates today would not exist if there was no affirmative action. It is not a welfare program – it is the best kind of reciprocity program: you get financial assistance to gain qualifications to help yourself and your people.

As someone who was associated with Abscol (the charity forerunner to Abstudy) I agree that the abolition of Abstudy was a deplorable decision. If there were any equity arguments for amalgamating Abstudy and Austudy then the extra benefits available to indigenous students should have been extended either to all students or at least to all students subject to a generous means test. It is difficult to understand how Pearson makes a distinction in terms of reciprocity between:

Abstudy where the Government sends checks to individuals in an attempt to encourage them to stay at school, or at least reduce some of the financial pressures causing children to leave school, and
the single parent allowance where the Government sends cheques to individuals without partners, who have the custody of children, to assist them feed and clothe their children.

Though claiming to have opposed the introduction, in the 1980s, of the Community Development Employment Program (CDEP) at Hopevale he now claims to have had a conversion on the road to Damascus. Pearson (1999[a]) wrote:

The CDEP has had and continues to enjoy mixed success – but it is based on the reciprocity principles advocated in this paper. Some communities, particularly smaller ones, run very successful CDEP programs whereas others, particularly larger ones, run programs that are often not very distinguishable from the dole – in terms of achieving the reciprocity principle.

The larger communities are “amalgamated communities” where people from many clans and diverse language groups have been forced by government and mission policy to live in the one area. In such communities the power structures are diffuse and it is difficult to get agreement as to what should be required of CDEP participants. In smaller communities there is frequently more equal power relationships, clan homogeneity or compatibility, and obtaining agreement about what participants must do is easier. Yet, there is always the possibility of the tyranny of local expectations being enforced on a minority, as all of us who left country towns in our youth know only too well. Pearson continues:

Suffice to say that some of the observations made in this paper about governance and the failure of communal work based on “State Farm” approaches will be relevant to reform. Also we need to break out of the white fella definitions of reciprocity and allow maximum community definition and imposition of responsibility.

But perhaps the biggest reason for the relative lack of success with CDEP is the fact that there are numerous other programs administered through the social security system – and indeed through all programs administered by the State, Commonwealth and ASTIC – which are not based on reciprocity but are located within the welfare paradigm.

The CDEP is a form of the work for the dole (compulsory labour) which, in the 1930s, was called “the Susso”. It might have passed as policy then but now puts us in breach of a number of international covenants and conventions Australia has signed and ratified (The United Nations Declaration of Human Rights, the Covenant on Economic, Social and Cultural Rights, the Covenant on Civil and Political Rights and several International Labour Organisation Conventions (Australian Government 1985).

An analysis

The essence of Latham’s and Pearson’s attack upon the alleged lack of reciprocity, imbedded within welfare, places them at the ideological centre of the current Government’s mutual obligation policy. The depth of the ideological intensity of the current mutual obligation debate is revealed in the extremely circumscribed exemptions from the compulsory involvement in literacy training which the Howard Government is prepared to contemplate. The Government has a determination to enforce compliance as was revealed in the Government’s Mutual Obligation Taskforce press release of the 28th January 1998 which declared:

Young people who live more than 90 minutes commuting time from any mutual obligation activity and for whom literacy numeracy distance education is not suitable, may be exempt from mutual obligation. (italics not in original).

Or as Howard put it in a recent speech:

Economic policy liberalisation and a modern conservatism in social policy share important common values and objectives…….
Both promote opportunity, incentive and responsibility over dependence and welfarism…….
Another defining aspect of our modern conservatism in social policy lies in our strong support for the principle of mutual obligation.

Pearson is absolutely correct when he says that indigenous people and indigenous communities have not been incorporated into the market economy in this country. They have been intentionally marginalised from economic activity by hegenomic racism which inspired the invasion and has continued in its aftermath (Tomlinson 1998[b]). If indigenous communities are going to escape from fourth world conditions there will need to be a massive expansion of economic development, controlled by Aborigines and Torres Strait Islanders themselves, on indigenous land (Crough 1993). Only the foolish ever believed that the extension of welfare to indigenous communities would integrate those communities into what Pearson calls the “real” economy. Pearson in attacking welfare rather than the deliberate underdevelopment of indigenous communities is simply attacking the wrong problem (Tomlinson 1998[b]). Setting out to attack “welfare” (the last bulwark of many indigenous and non- indigenous poor people against globalised economic fundamentalist policies) for failing to include indigenous communities within the “real” economy seems bizarre. If indigenous communities want to be included in the “real” economy there are many ways in which that might be done and some indigenous communities are finding ways to enter the economic mainstream (Crough 1993). Generally the welfare system is largely peripheral to such economic developments.

Latham and Pearson are not breaking new ground in their advocacy of reciprocity. Their belief in the efficacy of imposed reciprocity as the basis for integrating people into civil society, decreasing stigma, and diminishing feelings of powerlessness whilst providing meaning to currently excluded individuals is touching but naive. They, like their comrades in the Howard Government, assume that compelling people to do something somehow teaches them to be better citizens.

If they were really seeking people’s active involvement in the “real” economy they would demand at a minimum that the Government became an employer of last resort for all who wanted paid employment. They would insist that the jobs to which people were allocated were paid at a rate commensurate with others in the “real” economy, that the jobs were meaningful jobs, with socially useful outcomes capable of providing a sense of satisfaction to the employees. This might provide a good starting point on the road to building a civil society in which all might find mutual rewards in return for their contribution to the “general good”.

Their assertions about the failure of the left to be concerned about the powerlessness and marginalisation of those who receive social service payments ignores the work of a multitude of writers and activists from the 1930s to the present: Reynolds (Specht and Courtney 1994), Piven and Cloward (1979), and Alinsky (1969) in the United States; Orwell, (1967) Jordan (1973), Corrigan and Leonard (1978), and Galper (1975) in Britain; Bradford (1997), Easton (1980) and the Nelson Unconditional Universal Income Group (NZUBI Web site) in New Zealand; Benn (1981) Inside Welfare (Flaskas, Parkinson and Simpson 1979) Watts( 1996) and Client Power (Throssell 1975) in Australia to name a few.

It is clear that Latham, Pearson, Swan, Abbott, Newman and Howard conceive of employment, the active society and the system of income support from a particular ideological perspective. They see government in the late 1990s and into the next millennium as being small, hands off “steering instead of rowing”, providing incentive for the self motivated, compelling the feckless, and above all they envisage welfare being residual, selective, targeted, means tested and requiring reciprocity from the recipient. When it comes to welfare they see the role of government as a public philanthropist. They are obliviously unaffected by the definition in The Wit’s Dictionary (Bowles 1993) which defines a philanthropist as “someone who gives away what he should give back.” (p.52).

There are many ways to construct government income support policies which do not involve governments behaving as if they are doling monies out of the parish poor box. The Australian Government is preoccupied with tax reduction. If it were not it would be possible for it to decide what level of health, education, income support, community services, etc. are required and then levy a rate of tax sufficient to afford such programs. Government could accept there is a public property right that entitles the sovereign people to claim a significant share of the national income as public income and this could provide the source of funds to institute enhanced levels of health, education and community services underpinned by a livable universal Basic Income (Tomlinson and Rankin [forthcoming]).

Even if one accepted that “people should not get something for nothing” it is important to realise that all who pay taxes contribute to the pool from which welfare payments are taken. So if there is a debt, it is a debt to society – not the Government – it is a debt to us all. Many might feel that anyone who can survive on the enforced poverty levels of unemployed payments without having to resort to criminality has more than acquitted the debt. Those of us who have worked alongside unemployed people in Unemployed Workers Unions or other progressive organisations know the many other ways unemployed people contribute to society. We understand that many wish to reciprocate and in situations where they are not compelled we support their involvement. For a government to assume the unemployed, have a debt to them seems unnecessary given they are but the agent of a sovereign people. The real price of global economics, is already being paid by those excluded from the paid labour force.

Perhaps the most objectionable feature of the Latham/Pearson line is the assumption that without compulsion those who have been intentionally excluded from Pearson’s “real” economy have no desire to play their part in civil society. They provide no evidence for such an assumption. Having spent most of the last 40 years working with low income and indigenous groups I believe there are obstacles which prevent people contributing to societal progress and if Government has any role in this regard it should be confined to removing the obstacles to contribution by the excluded – the marginalised. Targeted payments such as unemployment payments often interfere with the degree of involvement that recipients can have in educational programs of their choice, they dictate where people must live, they restrict volunteer activity eg. governments have not sanctioned unemployed recipients helping to end logging in old growth forests, working in Unemployed Workers Unions, or fighting for human rights. Low levels of payments reduce the capacity for people to become involved in many societal activities. The cut back in funding in many community welfare areas means that unless social agencies are prepared to be complicit with work for the dole compulsion they often can’t utilise all the volunteer labour available.

Latham, Pearson, Swan, Newman, Abbott and Howard all claim to be concerned about the breakdown in trust between those who are defined as beneficiaries of the welfare system and the rest of society. They are silent on the breakdown of trust between the real beneficiaries of governmental largesse and the working and workless classes. The real beneficiaries of Government largesse are those who will get inordinate tax breaks in the forthcoming GST round, those high income earners whose superannuation payments are subsidised by inordinately generous tax breaks, those who will have their company tax rates lowered from 36 to 30% in the next round of business tax reviews, those who bought into the subsidised share sales of publicly owned assets, those high income earners who have their private health insurance subsidised by a third, these are the people the Government incorrectly calls self- providers or self-funded. It is little wonder people surviving on low incomes lose trust in a Government which could spend $1.8 billion annually to subsidise the health insurance costs, including dental costs, of high income earners but claims not to be able to afford $400 million to subsidise the dental costs of the poorest people in Australia.

Conclusion

In this paper I have looked in detail at Noel Pearson and Mark Latham’s analysis of how unemployment and income maintenance affects both indigenous and non- indigenous Australians. I argued that their analysis depends in large part on an ideological preoccupation with their lack of trust of those who are in receipt of income support payments. They rely on moral jeopardy arguments and they assume that reciprocity needs to be compelled if “dependency” is to be avoided because, for them, “dependency” is soul sapping, unaffordable, ever present when compelled reciprocity is not mandated, and that it results in marginalisation/exclusion. At the same time they contend that if welfare recipients can be forced to actively engage in civil society then they will swell the ranks of the included in our society.

Implicit in their analysis is the need for targeted benefits because of their belief that unconditional universal payment would lead to “dependency” and a never ending “cycle of poverty” from which the bulk of the recipient community would never, without the required reciprocity, escape.

I argue that there is another way to approach unemployment and income support. That way is to provide jobs to all who want them. To institute an unconditional universal Basic Income as the foundation for a liberated and including society. I argue that people are already reciprocating and the major obstacles to further involvement of people in receipt of income support payments, are impediments which any government intent on including as many citizens as possible in society has an obligation to remove.

Post script

I undertook this analysis because I believe that Latham, Pearson, Howard, Swan, Newman and Abbott put mutual obligation and moral jeopardy arguments as an ideological smokescreen in the hope of deflecting criticism of their denigration and repression of the unemployed. I further believe that their criticism of the unemployed is undertaken in an attempt to discipline those in paid work and to appease the transnational conglomerates which control the global market.

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The real moral jeopardy of ‘Welfare Dependency’

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

Posted Wednesday, 29 September 2004

When I started studying social work in the early 1960s I focused on the alleviation of poverty rather than some of the more up-market options being touted at the time. Central to my thinking now, as then, is that unless someone has enough to eat, somewhere safe to live and enough money to cover essential expenses it is little wonder they are depressed and anxious.

The Depression of the 1930s alerted Australians to the horrors of poverty. The expansion of the social security system during World War II and immediately afterwards came to be viewed as an important marker of our civilised way of life. In the post war period, Australians had a sense of building and sharing the common wealth. The Menzies’ Liberal Coalition, which replaced Labor in 1949, retained the main planks of the Australian welfare state. By the mid 1970s people started to conceive of social security as an entitlement that ensured sufficient income on which to survive the misfortunes of life. Many of the residues of the British Poor Law administrations of 1601 and 1834, particularly the distinction between the deserving and undeserving poor, had started to erode.

In the mid-1980s, Brian Howe, the Labor Minister for Social Security began stressing the propensity for people on social security to become “dependent”. Similar rhetoric had long preoccupied American politicians who sought to destroy the American welfare system. Howe set up a review of social security, headed by Professor Bettina Cass (1988), which recommended moving towards an “active” employment policy. This policy was code for adding some extra obligations to the unemployment benefit work test, which had existed since 1947. The “active employment” theme continued to inform policies and was spelt out in detail in Keating’s 1994 Working Nation. This document specified that unemployment benefit recipients would have to meet “reciprocal obligations” in return for income support and “active” labour market strategies.

Upon assuming office in 1996, the Howard Coalition Government set out to abolish Working Nation’s labour market programmes and to enforce a range of so called “mutual obligations” upon recipients of
the unemployment benefit. On November 9, 1999 the Minister for Family and Community Services, Jocelyn Newman launched “The Challenge of Welfare Dependency in the 21st Century”, which she described as a “discussion” paper designed to inform submissions to her review of Australian social security.

Minister Newman established an enquiry, headed by Patrick McClure, to investigate ways of ending the “welfare dependency” of social security recipients. McClure dutifully reported that there was a need to end “passive welfare” and to extend “active” labour market programs. The McClure Report went on to argue that “mutual obligations” should be extended beyond those who are unemployed and that the introduction of “participation income support programs” was a way of requiring recipients to meet their “mutual obligations”. The newly targeted groups were single parents and people with disabilities.

Ray Cassin (2000) senior writer for The Age suggested:

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.

Guy Standing, Director of the Socio-Economic Security Programme of the International Labour Organisation, notes that governments around the world are increasingly using social policy terms to convey false or misleading ideas. In his book Beyond the new paternalism he wrote:

The notion of active labour market policy is equally disingenuous. The word “ active” seems virile and strong, whereas its opposite, “ passive”, suggests laziness, and lack of initiative. In fact, active policy is little more than having the state telling people what they must do in order to receive some modest benefit, directing them to training or job schemes. By contrast, the much-derided passive policy entails giving funds to individuals or families with minimal conditions, leaving them to make choices about how to conduct their lives and allocate resources (2002, p. 104).

The Howard “mutual obligation” bandwagon rolled on undeterred. But it hit a brick-wall in the Senate when it tried to undermine the disability support pension. If the Howard Government is re-elected, on the October 9, 2004, it will no doubt try again. Signs are already emerging in the media (Kelly 2004, Mead 2004, Australia Talks Back 2004). Paul Kelly enthusiastically endorsed the call of right wing propagandist, Peter Saunders of the Centre for Independent Studies, for time limits on unemployment and other social security payments and for weeding out the disguised unemployed from amongst the ranks of disability support pensioners. Lawrence Mead one of the architects of the US welfare cutbacks is a frequent guest of right-wing think-tanks in Australia. He incessantly prescribes the same medication of “tough love” and “hassle” to end Australia’s “welfare dependency”.

Mead and other right-wing commentators suggest that the nation “has to be cruel to be kind” to recipients of social security in order “to encourage them to do the right thing by themselves and the nation”. That is, recipients must be hassled in order to help them escape the moral jeopardy of receiving something for nothing. Since 1999, Noel Pearson has regularly trotted out a not dissimilar line when he suggests that Aborigines are the victims of the “poison of passive welfare” when they need instead to refocus upon taking responsibility for their own economic success. Opposition Leader, Mark Latham has for a long time been obsessed with the idea of moving people from welfare to work. In the 2004 election campaign he is running on clichés of either “learning or earning” as the way to escape poverty. Such ideas are explicit in the reward structures of the ALP’s Family and Tax Policy.

Two things are remarkable about the moral jeopardy argument put by Mead and his ilk. Firstly, how far we have moved from the ideas which inspired the post World War II welfare state; and secondly, how the concept of moral jeopardy is distorted. From 1947 to the early 1980s, Australians were not blind to the financial costs of providing welfare services to the less well off but they saw such spending as an important part of being citizens of the Commonwealth. They realised that the quality of citizenship was enhanced by free education, basic health and community services. It provided a sense of social solidarity.

There was no suggestion that such social spending was an optional extra. Certainly, some begrudged their less affluent neighbours getting benefits they themselves weren’t entitled to and they expected unemployed people to seek work and to support themselves whenever possible. Yet, most Australians would have felt that failing to provide such basic services was the moral equivalent of the medieval practice of leaving paupers (who were not from the parish) at the crossroads to starve to death. Most Australians at that time would have considered themselves to be socially and personally diminished by such neglect.

Since the rise of economic fundamentalism in Australia there have been incessant calls to limit welfare assistance. The mythology of distorting phrases like “the level playing field”, “trickle down prosperity”, “user pays” and “rising tides lift all ships” have befuddled many. In this country many even call economic fundamentalism “economic rationalism”, which somehow implies that this form of economics is not only rational but “TINA – there is no alternative”. Economic fundamentalism promises that by accumulating inordinate wealth the rich will enjoy heaven on earth. It simultaneously promises salvation for the poor if they avoid the moral jeopardy of becoming “dependent” on welfare.

Nowhere do the economic fundamentalists or the Lawrence Meads and Peter Saunders of this world admit that well-off people arguing that Commonwealth tax revenue should be diverted from income support, health and community services (used by the less affluent) to areas of interest to the well-off is the ethical equivalent of rich people stealing money from the parish poor box. Nowhere do these pundits acknowledge that such actions place the rich in moral jeopardy.

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The strange irrationality of neo-liberal economics

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

Posted Wednesday, 2 September 2015

Neo-liberal economics has travelled under many names since the late 1970s. Throughout most of the 1980s in Australia its supporters proudly called it economic rationalism implying that neo-liberal economics was not only sound but rational. Their promotion of economic rationalism often went so far as to suggest it was the font of all wisdom.

Many strange bedfellows were swept up in the rise of neo-liberalism at the expense of Keynesian economics that had prevailed between the late 1930s to the mid-1970s. People began talking about the Natural Rate of Unemployment (which was invariably claimed to be about, or slightly above, the existing rate of unemployment). As a result the government of the day was absolved from having to do anything about lowering the high rate of unemployment because it was the natural rate – almost God given.

The essence of neo-liberal economics was the belief that governments should not interfere in anyway with the invisible hands of the market. Few questioned the mental health of those who spoke of the invisible hands and those who had not seen them dared not question what mechanisms or actors controlled such unseen hands. People everywhere spoke glibly about the importance of level playing fields.

Keynesian economics had, like most previous economic thought, come imbued with a series of ethical and moral precepts. But the late 1970s until well into the first decade of the 21st century was a time when post-modernism held sway. Morality, if raised at all, was considered relative, never absolute. Almost anything could be justified from one perspective or another.

Neo-liberal economists wanted to weaken or dismantle the welfare state because, to them, it was an impediment to the unfettered enterprise of the entrepreneurs who somehow were going to prosper and their wealth would consequently trickle down to the poor. Clichés abounded about rising tides lifting all boats. When a small amount of liquid falls from a great height most of it evaporates before it reaches the bottom.

Some neo-liberals intensified their attack on the welfare system by returning to 14th century beliefs about the propensity of less affluent people to malinger or shirk from employment. They simultaneously argued that whilst industrial and commercial arrangements needed to be unregulated but in order to avoid the slothfulness of the poor, any welfare provided to them had to be more highly regulated than in the past.

The Howard government, tightened eligibility first on the unemployed and single parents before moving on to cancel payments to about a third of disability support pensioners and shifting them to Newstart benefits or other lower paid benefits. It suspended the Racial Discrimination Act in order to force Aboriginal people living in remote Northern Territory communities to receive half their social security by way of a credit card which could only be used to purchase approved goods. The Rudd, Gillard, Rudd, Abbott governments all followed in Howard’s mean-minded footsteps. In the run up to the 2014 Budget the Treasurer couldn’t find sufficient opportunities to tell Australians that the age of entitlement was over.

The ascent of Keynesian economics had coincided with the expansion of unions and increased egalitarianism. Not surprisingly neo-liberal economists sought to have the power of unions curbed because it interfered with the perquisites of the bosses. First Fraser attacked the union movement generally but the Royal Commission into the Painters and Dockers turned round to bite the bosses on the bum. Hawke followed with his attacks upon the Builder’s Labourers and commercial pilots.

Howard’s ferocious assault on unions was at first very successful but when he got control of both the House of Representatives and the Senate the extent of his hatred of working people’s organisations was revealed. His Work Choices legislation was so unfair that the Australian Council of Trade Unions was able to mount such an effective campaign that the Coalition was removed from office and Howard lost his seat.

It was John Dawkins, Minister for Education in the Hawke Labor government, who had received a free university education at the University of Western Australia who adopted one of the “user pays” arguments of the neo-liberals. He reimposed university fees under a scheme that allowed students to defer payment until they graduated and were earning a decent wage. It was obvious then, as it is now, that the imposition of fees discourages some from proceeding to higher education.

The neo-liberal argument in favour of imposing educational fees was that because students personally gain from such education it is unfair to expect the State to pick up the tab. So now students leaving university have substantial student tuition debt. Changes the Abbott government is attempting to introduce could see some students leaving university with debts of $100,000. This means many can’t afford to put a deposit on a house, set up a family or engage in more education.

The failure to maximise every person’s capacity to engage with education to their fullest capacity limits his or her individual life chances, but more importantly, it cripples the productivity of the nation. Australia can’t remain a coal and iron quarry forever its only chance to compete with Asia is to become a clever value-adding country. We can’t dig our way to the future we have to think our way there.

But perhaps worst of all is the resulting mentality of those who have paid their higher education fees is that it generates a mentality which says “I paid for my education so I’m entitled to gouge as much profit as I can from that knowledge.” These self obsessed individuals create a different form of social organisation around them than do those who acknowledge the benefits they received from a society which grew them up and to which they want to contribute.

Whatever the past logic of imposing user pays fees on education or health, the time is fast approaching when such logic will be questioned. Precarious employment is fast becoming the new order of things. Trade union membership in Australia has fallen to about 17%. The neo-liberal economic pundits must be pleased with their pyrrhic success. Yes the ten per cent at the top of the economic ladder are gaining much more than the bottom 90 per cent. The number of people who are homeless is increasing. The number of prisoners is increasing. Our indifference to the plight of others is skyrocketing. Such a trajectory can’t sustain itself forever – there will be a correction.

New jobs non-routine

Josh Zumbrun writing in the Wall Street Journal reported in August this year that in the period beginning in 2001, the economy’s job growth has come entirely from non-routine work. He says that:

In recessions of the 1960s and 1970s, routine jobs would fall during the recession but quickly snap back. But after the recession in 1990, something changed. Routine jobs fell and, as a share of the population, never recovered. In the recessions in 2001 and in 2007-09 they fell even further. The snapback never occurred, suggesting that many firms began coping with recessions by scrapping tasks that could be automated or more easily outsourced.

Greed is good for the one per cent but terrible for the rest of us.

Those unabashed neo-liberals who pursue profit ahead of everything else loudly proclaim, “Greed is good”. Clearly, the Wall Street bankers and share dealers in the run-up to the 2007 recession thought along such lines. The Occupy movement did not share their enthusiasm and for a brief period it looked as if there might be a halt to uncontrolled accumulation of wealth by a few at the expense of the many. This will eventually happen – but not yet.

If we are to return to the days of greater egalitarianism without a prior violent clash between the haves and the have-nots then this will necessitate either the top 10 per cent willingly distributing a substantial part of their wealth or a government getting elected with a mandate and a willingness to engage in wholesale redistribution from those at the top to those below them.

Either way, the obfuscation, mystification and irrationality of the neo-liberalism agenda will have to be sacrificed on the altar of decency.

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There are solutions

Chapter in Hicks, R., Creed, P., Patton, W. and Tomlinson, J. eds. (1995) Unemployment Developments and Transitions, Australian Academic, Brisbane. pp.353 –

The economic fundamentalists tell us the cost of solving unemployment is too high, attempts to lower the rate of unemployment would result in a distortion of the market, and amount to an interference with liberty. In any case unemployment may be God given, beyond our control, beyond our interest, too complicated to solve, an externality, necessary to keep at the present level in the general interest of the economy, or perhaps it is some how the unemployed’s fault.

There are those who claim Australia doesn’t have an employment problem, that unemployment is sectional – affecting only marginalised groups like the young, the old, the uneducated, those who are not job ready, people with a disability, migrants, and Aborigines.

If instead of the press bombarding us hourly with economic statistics over which average Australians have no control, we had the Hang Seng suicide series, the Dow Jones depression index, health and happiness calculations, daily social weighted index, daily job creation figures, and the Nikkei Nirvana Series we might come to understand the social and personal dimensions of joblessness and we might determine to do something about it.

Possible causes

High rates of unemployment have been thought due to a multitude of causes including: downturns in the economy, too many migrants, the work-shy nature of the unemployed or their lack of skills, technological change, the payment of unemployment benefits (Gregory & Patterson, 1980; Dollery & Webster, 1995; contra Manning, 1981, p.17; Patterson et al., 1983, p. 100), the nature of our society – sometimes expressed as the natural rate of unemployment (contra Omerod, 1994, Ch. 6), the rise of part-time work, women (particularly those who are married) entering the labour market, the high costs of labour, or by intentional government and industry policy.

Perhaps the problem of large scale widespread unemployment is unsolvable. Except for the period 1945 until 1973 the rate of unemployment has always been over 3% in peace time in Australia. If that’s the case, then that’s a relief we can stop worrying about it and get on with life. It certainly makes it harder to sustain the argument that high levels of migration cause unemployment. We might try to explain what does cause high levels of unemployment just out of academic interest. There is however another reason why it is necessary to look at the cause of unemployment because – when citizens come to decide who should bear the cost of high unemployment or the cost of solving it then decisions on who should pay are likely to be determined by how voters account for the creation of the problem.

It could be that unemployment is fixed by forces beyond humans’ control – God? the market? For economic rationalisers this amounts to the same thing (Pusey, 1991). Perhaps it’s just that some people are so lazy they wouldn’t work in an iron lung. If this is the answer we would have to account for the reasons why the level of unemployment fluctuates so widely – perhaps laziness is seasonal. Keith Windschuttle (1981) in his ground breaking book Unemployment discovered that many parents were more likely to believe media stereotypes about young dole bludgers than objectively evaluate the efforts which their own children were making to find work.

Defining the problem

Some have suggested that unemployment is an economic problem, something determined by the market, by balance of trade, by cyclical downturns in business activity, and so forth. But unemployment is not just and maybe is not even an economic problem – it is a social, political, moral and ethical question. If it were an economic problem, capable of economic solutions then why have the econocrats not solved it? The highest levels of unemployment in recent times in Australia have coincided with the rise of neo-classical economics to the pinnacle of decision making in this country (Pusey, 1991). A thorough criticism of economic fundamentalism and its failure to solve unemployment is provided by Omerod (1994) in his Death of Economics.

We reached a stage a few years back when people with brain tumours no longer consulted neuro-surgeons. They took their problem to an economic rationaliser because they were so good at cutting everything and were reputed to be able to downsize anything. What they were unable to explain away or remove from the equation – they simply termed an externality: they not only had an answer to everything, they were the answer and that answer was the market, the final arbiter. In grim reaper fashion they cut a swathe through common ownership of public assets then told us we were not saving enough – they instituted policies which let private business blow our private foreign debt out of all proportion, used taxes paid by PAYE tax-payers to subsidise these borrowings, and eventually Christopher Skase got away with the lot and Bondy paid less than a cent in the dollar. At the same time they cut our public borrowings which might have let us invest in social and economic infrastructure and in jobs for our future. In order to reinforce the fact that we had missed the point on savings they instituted compulsory superannuation to prop up a corrupt insurance industry and at the same time undermined public confidence in the social security system (ACTCOSS, 1991; Pha, 1992).

If unemployment is not an economic problem but rather a political, social, moral and ethical question then being a non-economist does not rule ordinary citizens out of the debate – rather it rules us in. If we are prepared to make the social, political, moral and ethical decisions which can solve unemployment we may need to utilise technical economic tactics to help us come to solutions but we won’t need to embrace the ideologies of the current plague of economic rationalisers (contra Rees, Rodley & Stilwell, 1993; Vintila, Phillimore & Newman, 1992; Stilwell, 1993; Collan, 1993). We would not be able to ignore the costs, personal or social, which unemployment causes. We would not be able to define such problems away as externalities. We could not prolong solutions to the despair facing the jobless for years while we waited for economic recovery to trickle down from the rich to the poor. We could not, in all conscience, continue to allow people without work to bare a grossly disproportionate share of the cost of unemployment. We would remember that those who are without work don’t want a job in the long run, they want one now.

Of course the scenario I have just painted is predicated upon the belief that Australians want to live in a humane, socially inclusive society, committed to egalitarianism, solidarity and social justice. To the extent that I may be wrong about my fellow citizens, then, were we to make the political, social, moral and ethical decisions which would move us away from a reasonably inclusive, caring and sharing society towards one which rewards the clever, the sneaky, the lucky and criminal individuals we would usher in the sort of divided society about which Professor Gregory warned us in his 1995 National Press Club Address.

Quite frankly I have a preference for the first scenario but am preparing for the second. It would be irresponsible for social scientists to ignore the second scenario or to not make choices as to which side they would be on should the economic fundamentalist succeed in convincing Australians to discard the social and to go with individualised market solutions. I am working on a new cook book with detailed home economics hints entitled Avoid rising food prices – Eat the rich, a cheap entertainment guide called How to bring the Revolution into others’ Living Room, its sequel will be Utilise unused infrastructure – Hang the bourgeoisie from every lamppost in Australia. As part of this series there will be a religious guide to shop lifting entitled God helps those who help themselves, a series on street games starting with Money or your Life, Class War, Blazing Suburbs – 101 ways to ignite your interest in Arson. I trust it wont be necessary to move down this path but just in case there are people who like John Hewson are content to dismiss the needs of what he chose to call the “army of the jobless” (Liberal and National Parties, 1991) I am developing plans to invigorate the Unemployed Workers Army (Tomlinson, 1994a).

At the end of the Second World War servicemen would have come home to high unemployment had it not been for Curtin’s and Chiffley’s fear that the returning troops who had been trained to kill might start culling politicians if there were no jobs. We need to convince the unemployed to stop blaming themselves – turning their despair inwards (Fanon, 1963, p.248) and to understand the reason they don’t have jobs is that government and industry have failed to create employment. If we could evoke the same fear of the unemployed which Labor leaders had at the end of the last World War then sufficient jobs would be created overnight to solve unemployment. Government would soon define the solutions proposed in the White and Green Papers (which might reduce unemployment to 5% by the end of the century) as totally inadequate documents which trivialised the problems confronting unemployed people and would institute full employment programs (Committee on Employment Opportunities, 1993; Australian Government, 1994).

Peaceful ways to solve the jobless question

It is still possible, without any mass outbreak of violence directed at those who have decided levels of unemployment at 8-9% are sustainable, that governments might come to realise they have to jettison their plans to keep over 2 million Australians unemployed, underemployed or discouraged from seeking work.

The authors of Work for All have laid out a blue print which could reduce unemployment to 3% in a couple of years (Langmore & Quiggin, 1994). Their plans include massive job creation in the human services and environmental projects, governments becoming an employer of last resort, social and economic infrastructure developments, some redefinition of work, job sharing, humanising employment and redirecting macro-economic policy away from narrowly defined eiticiency targets towards social and economic effectiveness targets (Langmore & Quiggin, Chs. 8-1 1). Their plans are predicated upon a Keynesian boost to the economy, the installation of a far more progressive taxation regime than the Hawke-Keating Government has been able to implement, and some borrowings. Their plans are in no way economically irresponsible, given that budget outlays and losses to revenue as a direct result of our levels of unemployment cost us presently $20 billion annually. “The proposed net increases in government expenditure would be less than three per cent of GDP and would still leave Australia as one of the lowest taxing, lowest spending countries in the OECD, with a similarly low level of public debt” (Langmore & Quiggin, 1994, p. 144). The major shortfall in Langmore and Quiggin’s analysis is that they are still tied to the idea that the poor should sing for their supper – that the unemployed should in some way justify their being provided with income support by undergoing training or study, volunteering, or making some other contribution to society. This active citizenship concept is enshrined in the White and Green Papers, in the Cass’ review of the Social Security System, in the works of writers like Pixley and Probert and which is supported by the current Minister for Social Security (Committee on Employment Opportunities, 1993; Australian Government, 1994; Baldwin, 1995; Cass, 1995; Pixley, 1993; and Probert, 1994).

There are additional progressive ways to remove the scourge of unemployment entirely which could be built upon the Work for All framework. The first step is to introduce a non-presumptous social security system (Goodin, 1993). This would necessitate severing any link between income support and employment, jettisoning targeted income support, ending once and for ever the artificial distinctions which our current worthiness based categories of assistance maintain. That is, introduce a guaranteed minimum income as the social base on which we set out to build a solidarity between all permanent residents of this country. Secondly we need to place this nation on a PEACE FOOTING. Build sufficient houses to accommodate the homeless, upgrade community services to a point where we might take pride in the way we treat those of our citizens who experience disability or disadvantage, ensure our educational facilities have sufficient resources to allow all residents the opportunity to reach their optimum education, expand our environmental research in order that we are able to halt species extinction and ensure a sustainable future. Meet at a very minimum the UN target of 0.7% of GDP in untied peaceful foreign aid and add a further 1% of tied aid. Recognise Aboriginal sovereignty as coexisting with other forms of sovereignty in the land mass the invaders chose to call Australia. This would necessitate coming to a proper reconciliation with Aborigines in relation to land, resources and the criminal justice system. Dismantle our armed services beyond that which would he necessary to maintain fisheries, customs, and immigration functions and to meet our obligations to UN peace keeping.

Of course such a change would necessitate expanding massively our intellectual and productive effectiveness, we would no longer be able to ignore the creative ideas of our citizens or to let their creative ideas drift off shore as we did with the orbital engine and gene shears. It would mean we could not afford corrupt business practices and non productive investments – we would not be able to afford the 1980s style of entrepreneurial arrogance, criminality and stupidity but we would in Eric Bogle’s words “live in a land that’s fit for heroes and you and me as well”.

We would have to let go of some very silly thinking predominantly inspired by the economic rationalisers and other reactionary elements. We could no longer be content to recognise that with unemployment at anything like its current levels, “The loss of production through unemployment is the single greatest source of inefficiency in our economy’ (Committee on Employment Opportunities, 1993, p. 1) and then cut $400 million from the Working Nation expenditure as was done in the 1995 Federal Budget. We could no longer afford to prop up the corrupt insurance/superannuation industry with ever increasing amounts of public money, when they have patently shown that without massive tax advantages superannuation is a very inefficient savings or investment process. Even if it was an effective way of increasing personal wealth there is nothing in the corporate make up of the people who decide investment priorities for the funds to suggest they would ever put long term national interest ahead of turning a quick buck for the company.

We would have to let go of the myth that the increasing ageing of the Australian population will necessarily create an unaffordable drain on public provision of retirement incomes. We are going to have to recognise that overall dependency ratios – those in and those out of work in 2040 are not necessarily going to be very different from the 1995 dependency ratios. We would have to get serious about abolishing ageism and utilising the skills of Australians who wanted to work. The adoption of universal income support (whether in the form of a basic income or guaranteed minimum income) based on the individual and which made no presumptions about social features would be integral to such processes.

We still have Neanderthals who oppose foreign aid on the basis that it always exports resources and therefore jobs out of Australia. It certainly is possible to construct foreign aid programs in this way. However, even in relation to totally untied aid, there is a trade off between peaceful aid and savings which result from military expenditure foregone (Smith & Smith, 1983), and even cash aid can finish up being spent within Australia if we can produce goods required by the recipient country. I am suggesting we devote a further 1% of GDP (on top of 0.7% in untied aid) to tied aid. This tied aid should be made up predominantly of environmentally sensitive and technologically appropriate equipment (e.g. developing fuel from coconuts for diesel generators, solar cell technology), medical technology and services or food aid. These types of “aid” actually generate jobs in this country, may enhance our environment, and help to cross subsidise environmental research and development into issues of particular concern to citizens in this country. To the extent that we can solve some of our environmental problems, e.g. salination of the Murray/Darling River system via CSIRO developed “smart trees”, we create economic efficiencies which lower the cost of rural products and hence enhance export opportunities which creates work in Australia. To the extent that we can help solve medical problems in the third world we increase poorer countries’ economic efficiency and their buying power and perhaps our exports to them. But more importantly if we are able to find cures for newly discovered diseases such as the Ebola virus which kills within 7 days 90% of those affected (they die an excruciatingly painful death bleeding from every orifice) then we are not going to suffer massive economic dislocation should outbreaks occur in this country. And even if after finding a cure for the disease, establishing treatment regimes, and finding a preventive vaccine, we discovered that it was highly improbable that the virus would have ever come to this country we could still sit back with a sanctimonious smug grin on our collective face.

To the extent we can ensure environmental sustainability and diversity we enhance the prospects of increasing eco-tourism (the largest growth area of world tourism). As Australians become obsessed with the beauty of nature in this country the greater will be the number of them who choose to tour here, creating jobs locally and limiting the outward flow of capital.

In coming to find a way to recognise the sovereignty of Aborigines of their country we would have to come to an understanding with Aborigines and Torres Strait Islanders in relation to the rape, invasion, murder, brutality, theft, cultural imperialism, attempted genocide, and our ignorance. We would have to do something about our entire criminal justice system which incarcerates far too many Aborigines – ten times the rate for whites (Australian Government 1992, Tomlinson 1994b). The money we waste jailing Aborigines could be put towards Aboriginal communities controlling the economic development on their land. We are also going to have to put an end to the class war we wage against low income earners of all races in this country.

Conclusion

Government and industry policies cause unemployment. The solution to unemployment does not lie in economic policy but in social, political, moral and ethical choices capable of being made by Australian citizens. Solving unemployment is not without pain nor without gain – it is not only economically achievable it is an economic necessity. Langmore and Quiggin have laid out a workable blue print which could go a long way towards the solution. Unfortunately they, like Baldwin, Cass, Pixley and Probert are ideologically tied to the crucifix of active citizenship.

If we are going to abolish unemployment then we need to trust our fellow Australians enough to install a guaranteed minimum income, based on the individual, as the corner stone of social welfare and labour market programs. This would ensure a citizenship which was productive and effective to replace active citizenship. This would be a vast improvement on Keating’s inactive (unemployed) citizenship or Howard’s moribund economic rationaliser agenda for the citizenry. Howard’s agenda would ensure that many of those who work full time would still be living in poverty. The guaranteed minimum income policy proposed here would free all Australians to be productive.

References

ACTCOSS, (1991). The Super Tax Rort, Canberra ACTCOSS.
Australian Government (1992). Royal Commission into Aboriginal Deaths in Custody.
Canberra AGPS.
Australian Government (1994). Working Nation. Canberra, AGPS.
Baldwin P (1995). Beyond the Safety Net. Canberra, Department of Social Security.
Cass, B. (1995). “A Participation Income” in VCOSS & Good Shepherd. The Future of Income Support in an Open Economy: Basic Income Revisited. Melbourne, VCOSS & Good Shepherd.
Committee on Employment Opportunities, (1 993). Restoring Full Employment.
Canberra, AGPS.
Dollery, B. & Webster, S. (1995). ‘Unemployment Benefits and Unemployment in
Australia, 1950-89. Australian Journal ofsocial Issues. Vol. 30, No. 1, Feb.
Fanon, F.( 1963). The Wretched ofthe Earth. Harmondsworth, Penguin.
Gollan, R. (1 993). The Myth ofthe Level Playing Field. Sydney, Catalyst.
Goodin, R. (1992). ‘Towards a Minimally Presumptuous Social Welfare Policy in Van Parijs P. (ed.) Arguingfor Basic Income. London, Verso.
Gregory, R. (1 995). National Press Club Address 261419 5 Canberra.
Gregory, R., & Patterson, P. (1980). ‘The Impact of Unemployment Benefit Payments on the Level and Composition of Unemployment in Australia.’ Discussion paper No. 1 1, Canberra, ANU Centre for Economic Policy Research.
Langmore, J. & Quiggin, J. (1994). Work for All. Carlton, Melbourne University.
Liberal and National Parties (1991). Fightback@. Taxation and Expenditure Reform for jobs and Growth. Coalition Parties, Canberra.
Manning, 1. (1981). ‘A Decade of Social Security Policy’. Australian Economic Review. No. 53, First Quarter.
Omerod, P. (1 994). The Death ofeconomics. London, Faber & Faber.
Pha, A. (1992). How Super is Super? Surry Hills, Socialist Party of Australia.
Patterson, P, et. al. (1983). Youth Wages, Employment and the Labour Force. Canberra, Bureau of Labor Market Research.
Pixley, J. (1 993). Citizenship AndEmployment. Cambridge, Cambridge University.
Probert, B. (1994). ‘The Employment White Paper: Proposals for New Directions.’ in Smyth, P. (ed.). The Employment White Paper: A New Social Charter. Melbourne Seminar. Discussion Paper No. 3. Sydney, Uniya.
Pusey, M. (1991). Economic rationalism in Canberra. Melbourne, Cambridge University.
Rees, S.’ Rodley, G., & Stilwell, E (eds.) (1 993). Beyond the Market. Leichhardt, Pluto.
Smith, D. & Smith, R. (1983). The Economics ofmilitarism. London Pluto.
Stilwell, E (1 993). Economic Inequali@y. Leichhardt, Pluto.
Tomlinson, J. (1994a). ‘Application for Funds to Establish an Unemployed Workers Army.’ Anarchist Age Monthly Review. No. 4 1, May.
Tomlinson, J. (1994b). ‘The Role of Police in Marginalising Young people from low Socio – Economic groups in Australia.’AnarchistAgeMontbly Review. No. 38, Feb.
Vintila, P., Phillimore J. & Newman, P (eds.), (1 992). Markets, Morals and Manifestos.,
Murdoch, Institute for Science and Technology Policy.
Windschuttle, K. (1981). Unemployment. Ringwood, Penquin

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There but for the grace of wealth go I

Paper presented at the Beyond Poverty: Citizenship, Welfare and Well-being in the 21 st. Century Conference Massey University, Auckland, 14-16 March 1997.

Abstract

Dependency as well as implying looking to another person or institution for support also means subordination or subjection; (for example) the dependence of the church upon the state (Delbridge, et al 1987 p. 476).

Those who are dependent are of less importance than those on whom or that on which they depend – in this sense the welfare client is subordinate to and of less importance than the state. But the state lacks legitimacy without a citizenship which supports it. The state is the totality of its citizenship even though it serves not the totality of interests the citizenry but the interests of those who command the hegemonic forces of the day (Gramsci 1978, Bottomore et.al. 1983, pp. 201-203).

The process of assisting welfare clients, because it provides them with insufficient income to become full participants / consumers of the range of services which might assist them to become active political players, results in their marginalisation. As part of their subordinate status they are expected to remain silent except when they are expected to express gratitude. In a nation where large numbers of people are consigned to marginalised dependent citizenship roles, there exists at least the potential for such marginalised people to reject the legitimacy of the state.

The one consistent feature of dependency, whether it is expressed in the form of subordination, subjection or marginalisation, is that it involves a power differential – only the giver has control of the outcome, the recipient is always uncertain what will be received and for how long.

In the 1960s and early 1970s when a group of radical social workers helped mobilise clients to confront a Queensland Government Department which provided them with relief, the Department’s officers did what they could to divide clients from each other and discourage their having contact with us (Tomlinson 1975). The major demand of the group of clients was that they wanted a published code of practice which listed: rates of payment, eligibility conditions, and a guarantee that all clients of the Department would be treated equally. The Department preferred to rely on unspecified criteria and the unjustified assertion that it assisted “according to need” (Client Power 1975).

There is an interesting process of denial involved in current Australian political debates where welfare clients and unemployed people are often treated as if they are non-citizens. The recent Mabo and Wik High Court decisions in Australia have been followed by talkback discussions on commercial radio which assumed that the original inhabitants of the country were being totally irresponsible in using the judicial institutions of the invaders to assert their rights.

Welfare recipients and Aborigines are expected to vacate the debate – their rights to engage in the democratic process are suspended. The poor and indigenes are disappeared except when they are needed in order that they might be denigrated. Greg Crough (1993) in his study of the importance of Aboriginal economic development in Northern Australian, entitled Visible and Invisible, pointed out that indigenous successes are ignored when they succeed economically but where Aborigines fail to achieve economic self sufficiency their “failures” are readily acknowledged. It seems they exist only to be held up as negative role models for self righteous, uptight, competitive, white, economic self-actualisers.

Somewhere in the convolutions of the construction of citizenship there developed the concept of dependency of the recipient equating with the creation of obligations to the giver – thus reinforcing subordination and subjection. This form of relationship was clearly played out in the charity soup kitchens in the early part of this century in the United States of America where those who were fed were expected to sing for their supper; parodied in the Wobbly rejection:

Work and pray,
live on hay.
You’ll get pie
in the sky,
when you die. (Joe Hill)

Disability and citizenship

At a recent disability conference Michael Bleasdale and I (1996) reviewed the way dependency is utilised by governments to deny people with disability appropriate services, we suggested:
Citizenship debates need to refocus on the duty of the state to its citizens, and benchmarks should be established that audit social progress and not just economic statistics. Unless we do so there is a danger that those who have been systematically denied opportunities within our society will be blamed for their own disadvantage, and the state be relieved of a further responsibility. In recent years a disturbing trend has developed amongst those British social policy analysts who want us to return to the days when the Charity Organization Society forced the poor to meet their obligations to their benefactors; they rail against the development of what they define as “dutiless rights” (Green 1996 Chapter 5, Selbourne 1994). Driven by an intense fear of the dependency rhetoric they themselves created, they are determined to limit social services and demand the poor meet their obligations to the society. Selbourne and Green have their Australian imitators. When it comes to unemployment benefits they demand that those excluded from work by Government and industry policy demonstrate their commitment to “the active society” (Cass 1995, Pixley 1993, Baldwin 1995, contra Watts 1995).

Unless we as a country come to understand that the dual nature of rights and responsibilities is as integral to the State as it is for citizens then we will continue as the State does now – to mouth platitudes about rights when what the State is really saying is that citizens have responsibilities, and in return for meeting those responsibilities the State grants conditional benefits. The present debate fails to acknowledge that even in the most highly authoritarian structure consent cannot be divorced from control (Selznick 1948). We argue that there is a clear connection between rights and responsibilities: but that the way this connection is currently played out prevents the State recognising the reciprocal efforts made by many people with disability or those who experience disadvantage. The dual nature of the relationship between the State and its citizenry is further confounded because of the failure of the State to specify what responsibilities to its citizens the State is prepared to meet.

When it comes to people with disability, because the State fails to ensure that such citizens are enabled (empowered) to contribute to their optimum, it limits their citizenship whilst simultaneously undervaluing the contribution they do make. It is the insensitivity of the State which exacerbates this propensity to undervalue or ignore the reciprocity which its most vulnerable citizens offer (Bleasdale & Tomlinson 1996).

Less eligibility and economic fundamentalism

The concept of less eligibility, developed to a fine art in the work houses of Victorian England, is alive and well in charities throughout Australasia. It never disappeared from the social security system in Australia ( Tomlinson 1978 Chapter 1, Tomlinson 1996). Federally provided assistance differed from handouts provided by voluntary bodies in that whilst the recipients were still expected to ‘sing for their supper’ their obligations were codified, at least in Departmental regulations, and often in legislation.

The obligation to the state was more transparent and it was a liability to a reified collective entity as opposed to a bounden duty to particular individual in a local charity. Those who failed to meet their obligations to the state may well have felt less shame than those who failed to meet their obligations to the local charity: certainly the nature of the dependent relationship with the state was more anonymous. This was particularly so when the duty was specified in legislation because it was less likely to be capricious. Whilst the enforced obligation may well have served the interests of the powerful, it usually reflected what middle Australia regarded as reasonable.

Following the election to office of the Whitlam Labor Government there was a concerted effort to further decrease the arbitrary power of Social Security officials. No longer was it regarded as acceptable to reject applications for invalid pensions, made by people such as alcoholics, on the grounds that “You are not deemed worthy to receive a pension” (Jordan 1984). There was a concerted effort made to enable unsuccessful applicants to appeal decisions and in order that they might do so meaningfully to have departmental operatives clearly specify reasons for grant or rejection.

Whatever, if any, form of agency accountability is put in place (beyond that to their particular god) will not be consistent across the nation, will frequently be arbitrary, rarely committed to written form, difficult to challenge and oozing sanctimonious parsimony.

There is no ideological mystery as to why the Nationals in New Zealand and the Liberals in Australia want to demolish government’s involvement in the welfare state. At the most superficial level economic fundamentalists assert that private is always more efficient than public. Such a claim has been exposed as a mystification in Britain, New Zealand and Australia (Le Grand 1982, Omerod 1994, Hodge & Russell 1996, Kelsey 1995) without decreasing its attractiveness to the economic fascists.

There is a clear ideological connection between the desire to return the welfare state to the machinations of the church/private/voluntary mafia and the desire to introduce/expand economic fundamentalism. In the early writings of the doyen of economic fundamentalism, Milton Friedman (1968), the desire to decrease the size and complexity of the welfare state is apparent. Unlike many of his followers, Friedman (1968) was an advocate of a guaranteed minimum income in the form of a Negative Income Tax.

The conservative liberal

The idea that someone should be (usually economic fascists suggest that welfare clients choose to be) dependent on others is an anathema to the economic rationalist. The current Australian Prime Minister describes himself as an economic radical and a social conservative. This is not an uncommon condition found amongst econorats (Pusey 1991).

The preference for the unplanned, and even the irrational, as opposed to conscious government policy….is a fundamental conservative theme, (portrayed in) the nostalgia for the vanished Gemeinschaft, the suspicion of the contemporary Gesellschaft. From Burke to Dostoyevsky to Spengler it has been at the very centre of conservative thought (Harrington 1977, p. 290).

The central feature of the conservative position, in the twentieth century, is support for traditional values – hence the importance placed on the family, sexual restraint, work and the sanctity of private property. Conservatives support the continued existence of inequality and minimal welfare (of the residual kind) because of their fear that planned change will undermine the natural order. They are driven by a naive belief that the non-owners of the means of production will only work if driven to it by economic necessity or totalitarian compulsion.

Economic rationalists who declare themselves liberals derive support from a very selective reading of Hobbs who conceived of the natural state of humans as resulting in the “war of all against all” in which life is solitary, poor, nasty, brutish and short and therefore in need of regulation by some form of social contract (Sills 1968, p. 230). They couple this acquaintance of classical liberals with Locke’s modification that the contract should not be with the sovereign but that through mutual contracting people would be freed to pursue their individual self-interest (Sills 1968, pp. 226-231). They are equally selective in what they incorporate from the writing of Adam Smith neglecting those inconvenient parts of Smith’s writings which would place a break on economic fundamentalist’s celebration of inequality or their exploitation of others (Agyrous & Stilwell 1996).

The left

Given the challenge waged by socialists and Marxists over much of this century and the commitment which many mid-left have to the welfare state, it might be expected that the conservative and liberal promotion of inequality would encounter strong opposition throughout the left. Unhappily no. Social Democrats support equality of opportunity- happily ignoring the fact that without a deep commitment to equality – such Fabian mystification invariably results in inequality of outcome.

Only socialists and Marxists are committed to equality, freedom and mutuality.

Basic Incomes

As a socialist I abhor inequality. As an anarchist and a humanist I resist dependency. I believe that only in situations where people are provided with the certainty that they will have an income sufficient to maintain themselves with dignity, irrespective of circumstance, can they be truly free. That is when they are provided with what Goodin (1992) described as a non-presumptuous income guarantee. In order to ensure that the state does not transfer dependency from the collective to the family, the income guarantee must be paid to the individual.

The confusing appeal of dependency

Conservatives, because of their attraction to inequality, their abhorrence of society-wide plans, find great attraction in residual welfare run by charities. Liberals, and economic fundamentalists of all hues celebrate ‘self provision’ and therefore inequality. Their promotion of individualism and freedom from restraint in the market place leads them to denigrate social security because it requires tax raising to fund it and because they believe it saps people’s initiative to provide for themselves.

Debates about income provision get smothered in rhetoric about undeserved benefits accruing to many recipients. They argue that welfare should only be provided to those “who are truly needy through no fault of their own”. It is denied that whenever discretion, about eligibility and amount of assistance, is allowed there is at least the potential for errors of judgement being made by the people administering the scheme.

In 1983 a group of low income earners in the Northern Territory describing the Territory’s welfare department wrote:
It is not possible to obtain clear guidelines from this Department as to whom it assists, under what conditions, or at what rates it pays people who approach it. The Community Welfare Section of the Department hides behind the oldest trick in the welfare system: it claims to assist people in NEED but then refused to specify what it considers to be need. The combined experience of our members is that there is no consistency in the way this Department handles people who approach it (Colie 1983, p. 1).

David Griffith (1975) had reviewed emergency relief distribution throughout Australia some 8 years previously he concluded “Discretion as it applies to the present provision of emergency relief is a euphemism for discrimination” (p. 27). Twenty years later little has changed in the provision of emergency relief; yet this is the direction in which governments on both sides of the Tasman would like to see the welfare system including income support move.

Income guarantees

One question which those of us who want to see every person in our nations guaranteed an income capable of sustaining them in dignity have to address is: If such an income support system was implemented would it result in the fears of economic fundamentalists, liberals and conservatives being realised?

A related but far less politically important point is:Should such an income support regime be implemented would it meet the aspiration which socialists have of it?

A confounding feature is: Following such a change to income support would many people who are advantaged by the existing system (including those who make their living out of other people’s poverty) be detrimentally effected?

The last question we must address is: What would be the major advantages to society and to individuals in moving to introduce a basic income scheme?

It will be obvious that I have not asked: Can we afford to introduce a guaranteed minimum income scheme? I have not done so because the answer has already been provided by leading economic writers in many countries. (Rhys-Williams 1943, Friedman 1968, Henderson 1975, Gorz 1985, van Parijs 1992, Stilwell 1996, VCOSS & Good Shepherd 1995, Watts 1995, Richie 1997, Rankin 1996).

Question 1 If a universal income support system was implemented would it result in the fears of economic fundamentalists, liberals and conservatives being realised?

To answer this question we have to admit that once a basic income was in place people would not be able to be forced to work by sheer economic necessity. The entire sociology of work is predicated on the belief that people work for many reasons other than economic necessity (Tomlinson 1991) and the Australian experience in relation to the one income guarantee experiment supported such a belief (Liffman 1978). In any case even if there was a 10 per cent decrease in the labour force this would not affect the total number of employed people in Australia. It would result in a dramatic drop in the number of people recognised as unemployed.

We would have to admit also that stigma, uncertainty, capricious rejection and enforced poverty would in large part be removed from the income support system. There would be a decrease in dependency thereby lessening subordination and marginalisation as people came to treat the receipt of their basic income as a right of citizenship or permanent residency.

But conservatives and liberals could console themselves with the knowledge that eventhough we had in Lady Rhys-Williams’ words put in place “a floor below which he cannot fall without installing a ceiling beyond which he cannot rise” (1965, p. 163). There would be continuing inequality, the system of market democracy would still hold sway, class antagonisms would still be there, they would still be able to assert their superiority over non-owners of capital.

Conservatives might initially fear that the nuclear family could dissipate once the traditional dependency ties were no longer in place. We would need to point out that, compared with the existing income support system, payment to individuals would actually provide a financial incentive to keep families together in order to share rent and household costs. Currently in Australia people deemed to be cohabitating couples are financially penalised by the existing system of income support.

The market liberals and economic fundamentalists would quickly find that the provision of a basic income would increase the spending power of less affluent households thereby expanding the size of the market economy. They would also find that many people used the basic income as a launching pad to get into business. Because some of every bodies wage would be paid by the state, employers would find the price they paid for labour (excluding taxation) would actually decrease without the dissatisfaction which reduced wages usually bring in their wake.

Question 2 Should such a universal income support regime be implemented would it meet the aspiration which socialists have of it?

Because whatever form of income guarantee, which might conceivably be introduced on either side of the Tasman Sea, would at best provide a modest level of income it will not satisfy socialists’ aspirations for full blown equality. It would provide a sound basis from which to work for more egalitarian societies and to build “empowerment through solidarity” (Bleasdale & Tomlinson 1996).

Question 3 Following a change to universal income support would many people who are advantaged by the existing system (including those who make their living out of other people’s poverty) be detrimentally effected?

Existing categorical benefits and pensions differentially reward some categories of recipients compared with those who are less socially valued. A Basic Income would distribute funds equally, whilst a Negative Income Tax and a Guaranteed Minimum Income would distribute funds in inverse proportion to other income obtained by an individual. Therefore were an income guarantee introduced then some who are currently advantaged by the existing system of income support would be treated equally with those who are currently disadvantaged.

There are people employed to categorise income support applicants who, once an income guarantee scheme was introduced, would be no longer required to exercise such functions. They would need to find something socially constructive to do with their lives. At least they, unlike many of the people they now cut off benefits (leaving them without any form of income support), would have an income guarantee to sustain them in their search for a socially productive job.

Question 4 What would be the major advantages to society and to individuals in moving to introduce a basic income scheme?

The main advantages of introducing an income guarantee would be that it would lessen dependency, create greater certainty amongst vulnerable people, inhibit bureaucratic pettiness, lessen stigma, ensure people were financially capable of having sufficient on which to live with modest dignity, provide non-threatened flexibility in the labour force, ensure that no permanent resident of the country was excluded incorrectly from income support and free people to make a socially useful and environmentally sustainable contribution to their society.

Conclusion

Governments, conservatives and economic fundamentalists are unified in their use of dependency rhetoric to reinforce the subordination and marginalisation of welfare recipients. They happily suggest the poor are dependent without asking why, or what that “dependency” means. They happily ignore the fact that, it is the failure of government to provide low income earners with a Basic Income which causes their “dependence”. People need an income to survive and if it cannot be obtained through paid labour then it is hardly surprising that they rely upon the income support provided by the state.

If dependence was really the problem then dependency could be abolished by introducing a universal income guarantee for all permanent residents of a country. What we know is that governments, conservatives and economic rationalists believe if they constantly harp about dependency then they increase the stigma associated with income support receipt, thereby limiting outcomes and reinforcing recipients’ need to express gratitude. For governments, conservatives and economic fundamentalists then dependency is the solution rather than the problem.

In this paper I have shown that many of the conservatives’ fears about the introduction of a Basic Income are unjustified and that many of the hopes that socialists might have for a Basic Income would not be attained. But that following the introduction of a Basic Income life would go on much as it does now except that:

workers could not be coerced,
dependency amongst income support recipients would dramatically decrease,
independence and interdependence would be encouraged, and
we would have laid the foundation to create what Eva Cox (1995) called A Truly Civil Society.

It would be a society which really could claim to represent what conservatives choose to describe as the “common good” though it would be one which remained a long way from installing what socialists call the “general will”.

Bibliography.
Agyrous, G. & Stilwell, F. (eds.) 1996 Economics as a Social Science. Pluto, Leichhardt.
Bleasdale, M. & Tomlinson J. (1996) “Holding the State Accountable – the Quest for a Bill of Rights.” Paper Given at the Justice for Everyone, Intellectual Disability and the Law; Illawarra Disabled Persons’ Trust Conference, University of Woollongong, NSW. 28-29 November 1996.
Bottomore, T., Harris, L. Kieman,V. & Miliband, R. (eds.) (1983) A Dictionary of Marxist Thought. Harvard University, Cambridge.
Client Power (1975) “Client Power Manifesto: An Open Letter to Our Politicians.” in Throssell, H. (ed.) Social Work: Radical Essays. University of Queensland, St Lucia.
Colie (1983) Low Income Earners Survival Booklet No. 2. Coalition of Low Income Earners, Darwin.
Cox, E. (1995) A Truly Civil Society. ABC, Sydney.
Crough, G. (1993) Visible and Invisible: Aboriginal People in the Economy of Northern Australia. ANU & The Nugget Coombs Forum for Indigenous Studies, Darwin.
Delbridge, A., Bernard, J., Blair, D., Peters, P. & Butler, S. (eds.) (1987) The Macquarie Dictionary. Macquarie Library, Sydney.
Friedman, M. (1968) “The Case for Negative Income Tax.” in Laird, M. (ed.) Republican Papers. Anchor/Double Day, New York.
Goodin, R. (1992) “Towards a Minimally Presumptuous Social Welfare Policy.” in Van Parijs, P. (ed.) Arguing for Basic Incomes. Verso, London.
Gorz, A., (1985) Paths to Paradise: On the Liberation from Work. Pluto, London.
Gramsci, A. [trans. Hoare,Q.] (1978) Selections from Political Writings (1921-1926 ). Lawrence & Wishart, London.
Griffiths, D. (1975) Emergency Relief. Social Welfare Commission, Canberra.
Harrington, M. (1977)The Twilight of Capitalism. MacMillian, London.
Hodge, G. & Russell, B. (1996) Contracting Out Government Services: A Review of the International Evidence. Monash University, Melbourne.
Henderson, R. (1975) Poverty in Australia. AGPS, Canberra.
Jordan, A. (1984) Permanent Incapacity:Invalid Pension in Australia. Department of Social Security, Canberra.
Kelsey, J. The New Zealand Experiment: A World Model for Structural Adjustment? Auckland University & Bridget Williams, Auckland.
Le Grand, J. (1982)The Strategy of Equality. George, Allen & Unwin, London.
Liffman, M. (1978) Power for The Poor. George Allen & Unwin, Sydney.
Omerod, P. (1994) The Death of Economics. Faber & Faber, London.
Pusey, M. (1991) Economic Rationalism in Canberra. Cambridge University, Cambridge.
Rankin, K. (1996) “The Standard Tax Credit and the Social Wage: Existing Means to a Universal Basic Income”, Policy Discussion Paper Series Department of Economics, Auckland Business School, University of Auckland 20, October.
Richie, I. (1997) “The need for a new approach to our society which includes a universal basic income.”in Tomlinson, J., Patton, W., Creed, P. & Hicks (eds.) Unemployment: Policy and Practice. forthcoming.
Rhys-Williams, J. (1943) Something to Look Forward to. MacDonald, London.
Rhys-Williams, J. (1965) A New Look at Britain’s Economic Policy. Penguin, Harmondsworth.
Sills, D. (ed.) (1968) International Encyclopedia of the Social Sciences.
Vol. 17, pp. 226-231 MacMillian, New York.
Stilwell, F. (1996) “Fraught with contradictions: Work, wages, welfare.” in Wilson, J., Thomson J. & McMahon, A. (eds.) The Australian Welfare State. MacMillian,South Melbourne
Tomlinson, J. (1975) “Client Power: Helping Clients Gain Their Welfare Rights.” in Throssell, H. (ed.) Social Work: Radical Essays. University of Queensland, St Lucia.
Tomlinson, J. (1978) Is Band-Aid Social Work Enough? Wobbly, Darwin.
Tomlinson, J (1991) “Work and Income Guarantees.” Social Alternatives. Vol. 10, No. 3, pp. 5-8.
Tomlinson, J. (1996) “Building a Real Workers Welfare State.”Anarchist Age Monthly Review. No. 66 June, pp. 24-28.
Van Parijs, P. ( 1992) Arguing for Basic Incomes. Verso, London.
VCOSS & Good Shepherd (1995) Income Support in an Open Economy: Basic Income Revisited. VCOSS & Good Shepherd, Melbourne.
Watts, R. (1995) “Unemployment and Citizenship: Reconstituting Social Policy in the Twenty First Century.” in Hicks, R. Creed, P., Patton, W. & Tomlinson, J. (eds.) Unemployment: Developments and Transitions. Australian Academic, Brisbane.

More Info

There but for the grace of wealth go I

Beyond Poverty: Citizenship, welfare and well-being in the 21st century. In: Conference Proceedings, Mike O’Brien and Celia Briar (editors). Published by Peoples Centre, Box 3813, Auckland. ISBN 0-473-04665-2
pp. 160 -166.

Abstract

Dependency as well as implying looking to another person or institution for support also means “subordination or subjection; (for example) the dependence of the church upon the state” (Delbridge, et al 1987 p. 476).

Those who are dependent are of less importance than those on whom or that on which they depend – in this sense the welfare client is subordinate to and of less importance than the state. But the state lacks legitimacy without a citizenship which supports it. The state is the totality of its citizenship even though it serves not the totality of interests of the citizenry but the interests of those who command the hegemonic forces of the day (Gramsci 1978; Bottomore et al. 1983: 201-203).

The process of “assisting” welfare clients, because it provides them with insufficient income to become full participants/consumers of the range of services which might assist them to become active political players, results in their marginalisation. As part of their subordinate status they are expected to remain silent except when they are expected to express gratitude. In a nation where large numbers of people are consigned to marginalised “dependent” citizenship roles, there exists at least the potential for such marginalised people to reject the legitimacy of the state. The one consistent feature of dependency, whether it is expressed in the form of subordination, subjection or marginalisation, is that it involves a power differential – only the giver has control of the outcome. The recipient is always uncertain what will be received and for how long.

There is an interesting process of denial involved in current Australian political debates where welfare clients and unemployed people are often treated as if they are non- citizens. The recent Mabo and Wik High Court decisions in Australia have been followed by talkback discussions on commercial radio which assumed that the original inhabitants of the country were being totally irresponsible in using the judicial institutions of the invaders to assert their rights.

Welfare recipients and Aborigines are expected to vacate the debate – their rights to engage in the democratic process are suspended. The poor and indigenous have disappeared except when they are needed in order that they might be denigrated. Greg Crough (1993) in his study of the importance of Aboriginal economic development in Northern Australia, entitled “Visible and Invisible”, pointed out that indigenous successes are ignored when they succeed economically but where Aborigines fail to achieve economic self sufficiency their “failures” are readily acknowledged. It seems they exist only to be held up as negative role models for self righteous, uptight, competitive, white, economic self-actualisers.

Work and pray,
live on hay.
You’ll get pie
in the sky,
when you die. (Joe Hill)

Disability and citizenship

At a recent disability conference Michael Bleasdale, and I (1996) reviewed the way dependency is utilised by governments to deny people with disability appropriate services. We suggested that citizenship debates need to refocus on the duty of the state to its citizens, and benchmarks should be established that audit social progress and not just economic statistics. Unless we do so there is a danger that those who have been systematically denied opportunities within our society will be blamed for their own disadvantage, and the state be relieved of a further responsibility. In recent years a disturbing trend has developed amongst those British social policy analysts who want us to return to the days when the Charity Organisation Society forced the poor to meet their obligations to their benefactors; they rail against the development of what they define as “dutiless rights” (Green, 1996, ch. 5; Selbourne, 1994). Driven by an intense fear of the dependency rhetoric they themselves created, they are determined to limit social services and demand the poor meet their obligations to the society.

Selbourne and Green have their Australian imitators. When it comes to unemployment benefits they demand that those excluded from work by Government and industry policy demonstrate their commitment to “the active society” (Cass, 1995; Pixley, 1993; Baldwin, 1995; contra Watts, 1995).

Unless we as a country come to understand that the dual nature of rights and responsibilities is as integral to the state as it is for citizens then we will continue as the state does now – to mouth platitudes about rights when what the state is really saying is that citizens have responsibilities, and in return for meeting those responsibilities the state grants conditional benefits. The present debate fails to acknowledge that even in the most highly authoritarian structure consent cannot be divorced from control (Selznick 1948). We argue that there is a clear connection between rights and responsibilities: but that the way this connection is currently played out prevents the state recognising the reciprocal efforts made by many people with disability or those who experience disadvantage. The dual nature of the relationship between the state and its citizenry is further confounded because of the failure of the state to specify:

What responsibilities to its citizens the state is prepared to meet.
When it comes to people with disability, because the state fails to ensure that such citizens are enabled (empowered) to contribute to their optimum, it limits their citizenship whilst simultaneously undervaluing the contribution they do make.
It is the insensitivity of the state which exacerbates this propensity to undervalue or ignore the reciprocity which its most vulnerable citizens offer (Bleasdale & Tornlinson 1996)

Less eligibility and economic fundamentalism

The concept of less eligibility, developed to a fine art in the work houses of Victorian England, is alive and well in charities throughout Australasia. It never disappeared from the social security system in Australia (Tomlinson, 1978, ch. 1; Tomlinson, 1996). Federally provided assistance differed from handouts provided by voluntary bodies in that whilst the recipients were still expected to “sing for their supper” their obligations were codified, at least in Departmental regulations, and often in legislation.

The obligation to the state was more transparent and it was a liability to a reified collective entity as opposed to a bounden duty to particular individuals in a local charity. Those who failed to meet their obligations to the state may well have felt less shame than those who failed to meet their obligations to the local charity: certainly the nature of the dependent relationship with the state was more anonymous. This was particularly so when the duty was specified in legislation because it was less likely to be capricious. Whilst the enforced obligation may well have served the interests of the powerful, it usually reflected what middle Australia regarded as reasonable. Following the election to office of the Whitlam Labour Government there was a concerted effort to further decrease the arbitrary power of Social Security officials. No longer was it regarded as acceptable to reject applications for invalid pensions, made by people such as alcoholics, on the grounds that “You are not deemed worthy to receive a pension”(Jordan 1984). There was a concerted effort made to enable unsuccessful applicants to appeal decisions and in order that they might do so meaningfully to have Departmental operatives clearly specify reasons for grant or rejection.

The current fixation of governments on both sides of the Tasman to privatise as much as they can of nationally provided services, including income support mechanisms, is an attempt to return those who need to call on others for support to a more personal responsibility and a more direct relationship with the dispensers of charity and no doubt a more intense shame, thereby reinforcing their subordination. Whatever, if any, form of agency accountability is put in place (beyond that to their particular god) wi11 not be consistent across the nation, will frequently be arbitrary, rarely committed to written form, difficult to challenge and oozing sanctimonious parsimony.

There is no ideological mystery as to why the Nationals in New Zealand and the Liberals in Australia want to demolish government’s involvement in the welfare state. At the most superficial level economic fundamentalists assert that private is always more efficient than public. Such a claim has been exposed as a mystification in Britain, New Zealand and Australia (Le Grand, 1982; Omerod, 1994; Hodge and Russell 1996; Kelsey, 1995) without decreasing its attractiveness to the economic fascists.

There is a clear ideological connection between the desire to return the welfare state to the machinations of the church/private/voluntary Mafia and the desire to introduce/expand economic fundamentalism. In the early writings of the doyen of economic fundamentalism, Milton Friedman (1968), the desire to decrease the size and complexity of the welfare state is apparent. Unlike many of his followers, Friedman (1968) was an advocate of a guaranteed minimum income in the form of a Negative Income Tax.

The conservative liberal

“The preference for the unplanned, and even the irrational, as opposed to conscious government policy …. is a fundamental conservative t eme, (portrayed in) the nostalgia for the vanished Gemeinschaft, the suspicion of the contemporary Gesellschaft. From Burke to Dostoyevsky to Spengler it has been at the very centre of conservative thought” (Harrington, 1977: 290).

Economic rationalists who declare themselves liberals derive support from a very selective reading of Hobbes who conceived of the natural state of humans as resulting in the “war of all against all” in which life is solitary, poor, nasty, brutish and short and therefore in need of regulation by some form of social contract (Sills, 1968:230). They couple this acquaintance of classical liberals with Locke’s modification that the contract should not be with the sovereign” but that through mutual contracting people would be freed to pursue their individual self-interest (Sills, 1968:226-231). They are equally selective in what they incorporate from the writing of Adam Smith, neglecting those inconvenient parts of Smith’s writings which would place a brake on economic fundamentalist’s celebration of inequality or their exploitation of others (Agyrous and Stilwell, 1996).

The left

Given the challenge waged by socialists and Marxists over much of this century and the commitment which many mid-left have to the welfare state, it might be expected that the conservative and liberal promotion of inequality would encounter strong opposition throughout the left. Unhappily, no. Social Democrats support equality of opportunity, happily ignoring the fact that without a deep commitment to equality such Fabian mystification invariably results in inequality of outcome. Only socialists and Marxists are committed to equality, freedom and mutuality.

Basic incomes

The confusing appeal of dependency

Conservatives, because of their attraction to inequality, their abhorrence of society-wide plans, find great attraction in residual welfare run by charities. Liberals, and economic fundamentalists of all hues celebrate “self provision’ and therefore inequality. Their promotion Of individualism and freedom from restraint in the market place leads them to denigrate social security because it requires tax raising to fund it and because they believe it saps people’s initiative to provide for themselves.

Debates about income provision get smothered in rhetoric about undeserved benefits accruing to many recipients. They argue that welfare should only be provided to those “who are truly needy through no fault of their own”. It is denied that whenever discretion about eligibility and amount of assistance is allowed there is at least the potential for errors of judgement being made by the people administering the scheme.

In 1983 a group of low income earners in the Northern Territory describing the Territory’s welfare department wrote:

It is not possible to obtain clear guidelines from this Department as to whom it assists, under what conditions, or at what rates it pays people who approach it. The Community Welfare Section of the Department hides behind the oldest trick in the Welfare system: it claims to assist people in NEED but then refused to specify what it considers to be need. The combined experience of our members is that there is no consistency in the way this Department handles people who approach it (Colie, 1983:1).

David Criffith had reviewed emergency relief distribution throughout Australia some eight years previously. He concluded: “Discretion as it applies to the present provision of emergency relief is a euphemism for discrimination” (Griffith, 1975:27). Twenty years later little has changed in the provision of emergency relief; yet this is the direction in which governments on both sides of the Tasman would like to see the welfare system, including income support, move.

Income guarantees

A related but far less politically important point is: Should such an income support regime be implemented would it meet the aspiration which socialists have of it?

The last question we must address is: What would be the major advantages to society and to individuals in moving to introduce a basic income scheme? It will be obvious that I have not asked: Can we afford to introduce a guaranteed minimum income scheme? I have not done so because the answer has already been provided by leading economic writers in many countries. (Rhys-Williams, 1943; Friedman, 1968; Henderson, 1975; Gorz, 1985; van Parijs, 1992; VCOSS and Good Shepherd, 1995; Watts, 1995; Rankin, 1996; Stilwell, 1996; Ritchie, 1997).

Question one

If a universal income support system was implemented would it result in the fears of economic fundamentalists, liberals and conservatives being realised?
To answer this question we have to admit that once a basic income was in place people would not be able to be forced to work by sheer economic necessity. The entire sociology of work is predicated on the belief that people work for many reasons other than economic necessity (Tomlinson, 1991) and the Australian experience in relation to the one income guarantee experiment supported such a belief (Liffman, 1978). In any case even if there was a 10 per cent decrease in the labour force this would not affect the total number of employed people in Australia. It would result in a dramatic drop in the number of people recognised as unemployed.

But conservatives and liberals could console themselves with the knowledge that even though we had in Lady RhysWilliams’ words (1965:163) put in place “a ” floor” below which he cannot fall” without installing “a ceiling beyond which he cannot rise”. There would be continuing inequality, the system of market democracy would still hold sway, class antagonisms would still be there, they would still be able to assert their superiority over non- owners of capital.

Choosing the individual rather than the family or the household as the unit of income for the purpose of the income guarantee would, in Australia, bring the income support system into line with the taxation system and lead to greater efficiencies. This simplification, this (in econorat jargon) “removal of an inefficiency” should endear itself to the economic fundamentalists. Conservatives might initially fear that the nuclear family could dissipate once the “traditional” dependency ties were no longer in place. We would need to point out that, compared with the existing income support system, payment to individuals would actually provide a financial incentive to keep families together in order to share rent and household costs. Currently in Australia people deemed to be cohabitating couples are financially penalised by the existing system of income support.

The market liberals and economic fundamentalists would quickly find that the provision of a basic income would increase the spending power of less affluent households thereby expanding the size of the market economy. They would also find that many people used the basic income as a launching pad to get into business. Because some of everybody’s wage would be paid by the state, employers would find the price they paid for labour (excluding taxation) would actually decrease without the dissatisfaction which reduced wages usually bring in their wake.

Question two

Should such a universal income support regime be implemented would it meet the aspiration which socialists have of it?
Because whatever form of income guarantee, which might conceivably be introduced on either side of the Tasman Sea would at best provide a modest level of income, it will not satisfy socialists’ aspirations for full blown equality. It would provide a sound basis from which to work for more egalitarian societies and to build, empowerment through solidarity” (Bleasdale and Tomlinson, 1996).

Question three

Following a change to universal income support would many people who are advantaged by the existing system (including those who make their living out of other people’s poverty) be detrimentally affected?
Existing categorical benefits and pensions differentially reward some categories of recipients compared with those who are less socially valued. A Basic Income would distribute funds equally, whilst a Negative Income Tax and a Guaranteed Minimum Income would distribute funds in inverse proportion to other income obtained by an individual. Therefore were an income guarantee introduced then some who are currently advantaged by the existing system of income support would be treated equally with those who are currently disadvantaged.

There are people employed to categorise income support applicants who, once an income guarantee scheme was introduced, would no longer be required to exercise such functions. They would need to find something socially constructive to do with their lives. At least they, unlike many of the people they now cut off benefits (leaving them without any form of income support), would have an income guarantee to sustain them in their search for a socially productive job.

Question four

What would be the major advantages to society and to individuals in moving to introduce a basic income scheme? The main advantages of introducing an income guarantee would be that it would lessen dependency, create greater certainty amongst vulnerable people, inhibit bureaucratic pettiness, lessen stigma, ensure people were financially capable of having sufficient on which to live with modest dignity, provide non-threatened flexibility in the labour force, ensure that no permanent resident of the country was excluded incorrectly from income support and free people to make a socially useful and environmentally sustainable contribution to their society.

Conclusion

Governments, conservatives and economic fundamentalists are unified in their use of dependency rhetoric to reinforce the subordination and marginalisation of welfare recipients. They happily suggest the poor are dependent without asking why, or what that “dependency’ means. They happily ignore the fact that, it is the failure of government to provide low income earners with a Basic Income which causes their “dependence”. People need an income to survive and if it cannot be obtained through paid labour then it is hardly surprising that they rely upon the income support provided by the state.

workers could not be coerced,
dependency amongst income support recipients would dramatically decrease,independence and interdependence would be encouraged, and
we would have laid the foundation to create what Eva Cox (1995) called A Truly Civil Society.

Bibliography

Agyrous, G., Stilwell, F. (eds.) (1996) Economics as a Social Science. Pluto, Leichhardt.
Bleasdale, M. & Tomlinson J. (1996) “Holding the State Accountable – the Quest for a Bill of Rights”. Paper Given at the justice for Everyone, Intellectual Disability and the Law; Illawarra Disabled Persons’ Trust Conference, University of Woollongong, NSW.
Bottomore, T., Harris, L. Kieman, V., Miliband, R. (eds.) (1983) A Dictionary of Marxist Thought. Harvard University, Cambridge.
Client Power (1975) “Client Power Manifesto: An Open Letter to Our Politicians” in Throssell, H. (ed.) Social Work: Radical Essays. University of Queensland, St Lucia.
Colie (1983) Low Income Earners Survival Booklet No. 2. Coalition of Low Income Earners, Darwin.
Cox, E. (1995) A Truly Civil Society. ABC, Sydney.
Crough, G. (1993) Visible and Invisible: Aboriginal People in the Economy of Northern Australia. ANU & The Nugget Coombs Forum for Indigenous Studies, Darwin.
Delbridge, A., Bernard, j., Blair, D., Peters, P., Butler, S. (eds.) (1987) The Macquarie Dictionary. Macquarie Library, Sydney.
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Hodge, G. & Russell, B. (1996) Contracting Out Government Services: A Review of the International Evidence. Monash University, Melbourne.
Henderson, R. (1975) Poverty in Australia. AGPS, Canberra.
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Pusey, M. (1991) Economic Rationalism in Canberra. Cambridge University, Cambridge.
Rankin, K. (1996) “The Standard Tax Credit and the Social Wage: Existing Means to a Universal Basic Income”, Policy Discussion Paper Series Department of Economics, Auckland Business School, University of Auckland.
Ritchie, I. (1997) “The need for a new approach to our society which includes a universal basic income” in Tomlinson, j., Patton, W., Creed, P., Hicks, R. (eds.) Unemployment: Policy and Practice. Forthcoming.
Rhys-Williams, J. (1943) Something to Look Forward to. MacDonald, London.
Rhys-Williams, J. (1965) A New Look at Britain’s Economic Policy. Penguin, Harmondsworth.
Sills, D. (ed.) (1968) International Encyclopedia of the Social Sciences. Vol. 17, pp. 226-231 Macmillan, New York.
Stilwell, F. (1996) “Fraught with contradictions: Work, wages, welfare” in Wilson, J., Thomson J. & McMahon, A. (eds.) The Australian Welfare State. Macmillan Melbourne
Tomlinson, J. (1975) “Client Power: Helping Clients Gain Their Welfare Rights” in Throssell, H. (ed.) Social Work: Radical Essays. University of Queensland, St Lucia.
Tomlinson, J. (1978) Is Band-Aid Social Work Enough? Wobbly, Darwin.
Tomlinson, J. (1991) “Work and Income Guarantees” in Social Alternatives. Vol. 10, No. 3, 5-8.
Tomlinson, J. (1996) “Building a Real Workers Welfare State” in Anarchist Age Monthly Review. No. 66 June, pp. 24-28.
Van Parijs, P. ( 1992) Arguing for Basic Incomes. Verso, London.
VCOSS and Good Shepherd (1995) Income Support in an Open Economy: Basic Income Revisited. VCOSS & Good Shepherd, Melbourne.
Watts, R. (1995) “Unemployment and Citizenship: Reconstituting Social Policy in the Twenty First Century” in Hicks, R. Creed, P., Patton, W., Tomlinson, J. (eds.) Unemployment: Developments and Transitions. Australian Academic, Brisbane.

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There is a ladder in my stocking of opportunity

Published in New Matilda January 19th 2005 https://newmatilda.com/2005/01/19/there-ladder-my-stocking-opportunity/

The ALP Opposition Leader, Mark Latham, in his address in reply to the 2004 Budget announced that unemployed people, particularly those who are young and unemployed, would be either “earning or learning” (Jennett 2004). In the 2004 election campaign he tied such pronouncements to his “ladder of opportunity” rhetoric. Mark Latham made it clear that young people not at work and not in formal study would not receive Commonwealth assistance. At one level his “learn or earn” scheme is an unremarkable policy, well within the traditions of John Howard’s socially conservative youth policies. The targeting of young unemployed people was exactly what Howard did when he set out to introduce his “work for the dole” policy. He subsequently extended it to older unemployed people.

Latham’s policy is also well within the labourist traditions of a party still emotionally aligned with the industrial age. In addition, it is possible to see the links between such a “learn or earn” policy and those Hawke/Keating policies, such as the active employment strategy (Cass 1988). As at other times in the past, when Latham was devoid of original ideas, he turned to Tony Blair’s participation income and other third way policies for inspiration.

Whilst such similarities demonstrate apparent links with past social democratic thought, there are aspects of Latham’s approach that reveal a departure from previous Australian social welfare policy and a further move in the direction of neo-liberal exclusionist policies. Certainly, the “learn or earn” option is a considerable departure from the social policy directions of the Fraser and Whitlam Governments. From 1908 on in Australia, even conservative administrations had seen their social policy initiatives as providing a floor below which income or services would not fall – at least for those covered by the policy. Likewise, the 1907 Harvester Judgement introduced a system of minimum wages providing an income floor for those employed under award conditions.

In 1986, Australian social security policy began a retreat from its post Second World War aim to become a comprehensive and adequate means to provide social assistance to all in need. Latham’s “learn or earn” policy continues the regression from universalism. British Academic, Hazel 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 virtue imposed by the State. (Kemshall 2002, pp.120-122).

Latham’s “learn or earn” scenario is not the policy of inclusion it purports to be, but rather a way of refusing income support to those who don’t exactly fit two narrowly defined moulds – worker or student. These days, more and more students are working before and after classes and many workers are studying and working. Workers are often learning/up-skilling on the job and some are in traineeships or apprenticeships.

There are people with severe disabilities who might never be employed and are unlikely to benefit from further education. There are many young people who, because of their homelessness, are not able to find employment or stay at school. There are other people who due to personality disorders, mental illness, addiction or chronic ill health are unable to cope with either learning or earning.

A report commissioned by the Brotherhood of St Laurence and St Vincent de Paul found that the Coalition Government’s increasingly stringent “mutual obligation” policy adversely impacts on people with multiple disabilities – further marginalising them. It concluded the “mutual obligation” regime “is failing the most disadvantaged job seekers. Overall the system operates…not as ‘welfare to work’ but ‘welfare as work’ (Ziguras, Dufty and Considine 2003 p.43).

Both Howard and Latham fail to come to terms with the reality faced by unemployed people struggling to cope on below poverty-line income. They fail to adequately acknowledge the diverse challenges faced by many trying to find employment. The disability debate is beyond their ken. In his “learn or earn policy” Latham just ignores the extra difficulties posed by social disadvantage, disability or the combination of both (Marino 2004).

Howard has been trying far more devastating tactics by extending his “mutual obligation” and “welfare reform” policies so as to enmesh people with disabilities. His plans have been held up in the Senate in recent years, but by the 1st July 2005 he will have control in the Upper House. Now nothing will stop him proceeding. Western Australian scholar, Rose Galvin, in August of 2004, warned against the substantial financial losses which would accrue to people with disabilities if Howard pushes through such changes in the Senate. She wrote: “welfare reform intends to remove only the protective classification of “disability” in an attempt to make disabled people, as a category, disappear without doing much, if anything, to remedy the actual conditions of exclusion that this term represents” (p.345 italics not in original).

Latham’s “learn or earn” income support policy forces unemployed people into one of two compartments. It erodes autonomy, denies the possibility that unemployed people, with support, might find more productive solutions outside the confines of such constrained choices and simultaneously decays dignity. It is a further example of increased targeting of income support. “Targeting is, of course, as much about who is excluded from welfare provision as it is about who is included (Kemshall 2002 p.27)”. Since 1986, such increased targeting has been a mechanism, increasingly employed by both Labor and Coalition governments to reduce the generosity and universality of the Australian system of income support.

But increased targeting is just one of many tools used by neo-liberal economic fundamentalists in their assault upon communal provision of income support and other features of the social wage. The neo-liberal economic fundamentalist mind-set gained some early traction in the dying days of the Whitlam Government. It has been in ascendency since the middle years of the Hawke/Keating Governments. During the Howard period, it has led Government ministers to respond as if they were Board members of Australia Inc. Alistair Mant (2004) reminds us that “The French have a wonderfully dismissive term for government ministers of limited capacity who conduct great offices of state as if they were suburban service stations. The term is ‘garagiste’.

There are alternatives

Australians do not have to proceed down the path that the neo-liberals want to lead us. We don’t have to become blind to the issues and possibilities that the 21st century presents. There are many creative and humane ways to construct social policy which might lead us to reinvigorate the more universal policies of the Australian welfare state (BIGA and BIEN websites). We cannot afford the massive economic and social losses which mass unemployment and precarious employment create. Above all, we need to look beyond the 20 second sound-bites which pass for social policy analysis nowadays and search for realistic explanations of and solutions to social difficulties.

If Mark Latham had sought a more elaborate understanding of the lives of those who work in industries where jobs, rather than the products, are being exported and had he been willing to look seriously at the complexity of situations facing unemployed people, then he might have gained a fuller appreciation of the fact that his “learn or earn” option would constrain rather than assist many people wanting secure, socially meaningful employment or appropriate training.

The game of life involves more than a relentless climbing some ladder of opportunity like a breathless aspirational voter from a suburban marginal seat. Such aspirational voters are, as Clive Hamilton (2004) reminds us, a close cousin to middle-class whingers. Whether in or out of work, most Australians find that in the real game of life they are playing includes both snakes and ladders.

Bibliography

BIEN (2004) Basic Income Earth Network (formally Basic Income European Network) web site
http://www.etes.ucl.ac.be/BIEN/Index.html
BIGA (2004) Basic Income Guarantee Australia web site http://www.basicincome.qut.edu.au/index.jsp
Cass, B. (1988) Income support for the Unemployed in Australia: Towards a more Active System. Social Security Review. Social Security, Canberra.
Galvin, R. (2004) “Can welfare reform make disability disappear?” Australian Journal of Social Issues. Vol. 39, No. 3, August.
Hamilton, C. (2004) “The Good Life That Politics Can’t Buy.” Sydney Morning Herald. 13th January http://australianpolitics.com/words/daily/archives/00000161.shtml
Jennett, G. (2004) “Latham delivers budget reply” Lateline, ABC. 13th May. http://www.abc.net.au/lateline/content/2004/s1107915.htm
Kemshall, H. (2002) Risk, social policy and welfare. Open University, Buckinghamshire.
Mant, A. (2004) “Australia embraces an American way” The Age, 10th October. http://theage.com.au/articles/2004/10/09/1097261862658.html
Marino, M. (2004) “Not earning or learning.” The Age.15th May. http://www.theage.com.au/articles/2004/05/14/1084289883655.html#
Ziguras, S., Dufty, G. & Considine, M. (2003) Much Obliged: Disadvantaged job seekers’ experiences of the mutual obligation regime. Brotherhood of St Laurence and St. Vincent de Paul
http://bsl.org.au/pdfs/MOreportV2.pdf

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Third way policies

Prof. Bob Gregory told me at the 7th National Unemployment Conference that Prof Robert Goodin was asked about Blair’s third way.

Goodin replied that he did not know what it was but believed it was something that fitted between the second coming and the fourth dimension.

written 2002

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Timor Leste: Minimum Wages, Job Guarantees, Social Welfare Payments or Basic Income?

Paper given at The Basic Income Earth Congress, University College, Dublin 2008

In Timor Leste, the majority of the population lives on less than a dollar* a day. Subsistence agriculture is the main industry outside the major towns. By world standards it is a poor country but it has, in recent years, obtained access to oil royalties which have the potential to increase the incomes of all its citizens.

There are a number of social policies available to the Government of Timor Leste which would improve the lot of its citizens. This paper will explore just some of them concentrating upon; minimum wages, job guarantees, social welfare payments and Basic Income. If the Government aims to alleviate poverty, promote autonomy and social stability then a Basic Income is the best option.

A brief history of East Timor

Portuguese involvement with Timor began in the second decade of the 16th century. “The first two centuries of Portuguese influence were largely taken up with missionary activities, although the priests eagerly participated in the sandalwood trade (Dunn 1983, p. 16).” It was a time when the Dutch and Portuguese struggled with and against various Indigenous leaders for control of what was then called the Dutch East Indies. The Portuguese did not establish a colonial government on Timor until the early 18th century. The Dutch eventually forced the Portuguese out of the western part of Timor, and in 1913, the Island was divided between the two colonial powers (Dunn 1983, pp. 15-18). Throughout the colonial period, there were numerous large- scale uprisings by Timorese chieftains and Portuguese control could best be described as tenuous. Colonial control was dependant upon successfully dividing and conquering Timorese resistance.

During World War II, the Australian army landed in Timor Leste, despite the declared neutrality of Portugal and the Portuguese colonial authority in Timor. This in turn led to the Japanese invasion of the country and the subsequent death of over 40,000 of its citizens (Scott 2006, Dunn 1983, pp. 22-28).

Following the coup by the Armed Forces Movement in Portugal in April 1974, the move towards independence gained traction. I visited Timor Leste in that year and found the political tension in the major cities was palpable. There was an obvious tension between a conservative coalition, the Timorese Democratic Union (UDT) supported by Chinese and Portuguese bourgeoisie and conservative Timorese leaders and Fretilin (the Revolutionary Front for an Independent East Timor), a socialist party. There was also a small party in favour of integration with Indonesia.

In early August 1975, UDT staged a coup against the Portuguese administration in Timor. Fretilin responded by calling on the loyalty of the Timorese troops who had been under Portuguese control. A couple of weeks of civil war erupted between UDT and Fretilin supporters; but the fighting was largely over by the end of August with Fretilin prevailing (Dunn 1983, Ch.8).

It is probable that more than 3,000 people died. The Portuguese administration withdrew to an island a short distance off the capital of Dili. Fretilin tried to persuade the Portuguese administration to return and to work with the Indonesian and Australian Governments – but they did not return. Indonesia mounted covert military operations against Fretilin from early October 1975 and Australia did next to nothing to prevent them (Dunn 1983, Ch. 9, Scott 2006). In the face of a feared Indonesian invasion and in the hope of generating international support, Fretilin declared the country independent on the 28th November 1975. Indonesia launched a massive land, sea and air attack on Dili on the 7th December 1975.

At the time of the invasion the country had a population of between 800,000 and 850,000. That invasion and the subsequent 24 years of occupation led to the deaths of between 200,000 and 300,000 Timorese. In 1991, one violent incident (subsequently know as the Dili Massacre or the Santa Cruz Massacre) occurred in which 400 Timorese were killed, the Western press managed to get TV footage out of Timor Leste showing Indonesian soldiers firing on unarmed students at the funeral of a murdered colleague, Sebastian Gomes, in the grounds of the Santa Cruz cemetery (Peace is Possible in East Timor Ecumenical Association 1992). In 1992, I joined an international peace mission intending to journey to Dili on the Portuguese vessel Lusitania Expresso. We were turned back by Indonesian war-ships and planes at the 12 mile limit (McMillan 1992, Tomlinson 1992, p. 11).

Throughout the entire period of occupation, the Timorese resistance waged an insurgency campaign against the Indonesian administration. By the late 1990s the Indonesian military was using militias to attack the resistance and, in 1999 I wrote:

Tourism in Timor

Visit Militia City,
admire their home-made guns,
count the dead
from your hotel bed;
daughters, mothers, sons.

Tour the burnt out suburbs,
fondle a hand grenade,
bury a battered body –
democracy, militia-made.

You can bathe in blood and gore.
Shoot the fleeing by the score.
See freedom delayed
and justice betrayed.

There is a whole lot more.
We’ll show you Kopassus compassion.
You can dig an unmarked grave.
Teach you how to kill the wounded.
It’s cheap you’ll save
and save.

A United Nations plebiscite was held in 1999 in which 80% of the Timorese voted for Independence from Indonesia (Taudevin and Lee 2000, p. vii). In the lead up to and aftermath of the plebiscite, Indonesian-influenced militias and military killed 1,400 people and wounded thousands and destroyed much of the physical infrastructure of this tiny nation (Taudevin and Lee 2000, Robinson 2003, Tanter, Ball and van Klinken 2005). When I visited in 2005 I was amazed that the telephone wires between Los Palos and Tutuala, a distance of 50 kilometres, were missing though the poles were still standing. I was told that the Indonesians had taken the wire when they left (Tomlinson 2005).

In 2002, Timor Leste became an independent nation and Fretilin won government. In 2006, following the sacking of 600 police and army officers, internecine violence broke out in Dili leading to widespread burning of houses and intermittent killings (Brewer 2007). Thirty-seven people were killed in the initial period and up to 200,000 people became displaced from their homes. By mid September 2007, following a relatively peaceful election in which Fretilin lost its majority and was replaced by a coalition of parties, there were still between 100,000 and 150,000 internally displaced people living in refugee camps and the countryside. The fighting, which broke out between Fretilin supporters and those who favoured the coalition of parties headed by Xanana Gusmao, led to a further 300 houses being destroyed (Leopold 2007).

Last Flight out of Dili provides an interesting account of what David Scott terms Australia’s “Four Betrayals”:

despatching troops into East Timor during WWII, which ended East Timor’s neutrality and provoked the Japanese invasion of that country, leading to the deaths of 40-60,000 Timorese;
Gough Whitlam’s “acquiescence” to the integration of East Timor into Indonesia;
not ensuring security in East Timor prior to the Independence vote in 1999; and
not protecting East Timorese people from the Indonesian Army and the militias’ onslaught after the vote.

To these “betrayals”, I would add: the connivance of successive Australian governments with Indonesia during its 24 year occupation of Timor and the recent Howard Liberal-Coalition Government negotiations over the distribution of Timor Sea oil revenues (see also Aarons and Domm 1992). On January 12, 2005, Timor Leste and Australia signed a treaty to share equally the revenues of the Greater Sunrise oil and gas field in the Timor Sea. This brought prolonged negotiations to an end but left in abeyance for up to 50 years a final determination on the seabed boundary between these two neighbours. To the uninformed, this might sound like a fair agreement between David and Goliath, but the real winner is Australia which will benefit from processing the oil and gas in Darwin.

In addition, there are many who believe that most of the hydro-carbon resources in the Timor Sea rightly belong to Timor Leste. The Australian Government recently withdrew from the jurisdiction of the World Court, in relation to the Law of the Sea, to avoid the possibility of an international juridical determination on a boundary between the two countries.

Timor Leste is a country with about one million people. It “is one of the world’s poorest nations, ranking below Congo and Sudan in its indicators of human development. It is the poorest country in Asia. Life expectancy is 56 years, the adult literacy rate is only 58 per cent and one child in ten can expect to die before they reach five years of age. The average East Timorese woman gives birth to nearly 8 children and 42 per cent of the population is under 15 years of age. Population growth is a massive 5.36 per cent per year. Annual GDP per capita is only USD$367 (AusAID 2007).” Ten per cent of the population is under five years of age (Brewer 2007, p. 63).

Given widespread poverty and unstable political conditions, coupled with the absence of a thriving technical, administrative and commercial infrastructure, the Government of Timor Leste does not have the luxury of doing nothing to improve the lot of its citizens. This paper will now consider some social policies which might be pursued. They are: minimum wages, job guarantees, social welfare payments and Basic Income.

Minimum wages legislation

In this section of the paper, I will draw heavily upon a report prepared for the World Bank by Das in June 2004 entitled “The Labour Market Impact of Minimum Wage Policy: The Case of Timor-Leste in Comparative Perspective.”

The United Nations administration, in the lead up to independence, attempted to set a minimum wage of $4 a day for workers in the formal economy- that rate is twice as generous as the minimum wage in West Timor (Das 2004, p. 4 & p. 24). He argues that minimum wages raise the “incomes of the poorest workers and thus protect them from vulnerability” yet the increased costs of such wages may lead employers to dismiss or not employ those workers who have the least skills and who are most in need of income (p. 4). He points particularly to young people as likely to encounter such obstacles to employment in a minimum wage situation but suggests that young workers might be more attractive to employers if a lower minimum wage was paid to them.

He suggests that the presence of a minimum wage might indirectly raise the wage rates paid in the informal sector of the economy because such minimum rates might come to be seen as a reasonable rate of pay. But he cautions that in 2001, even in the formal sector a quarter of all workers were paid less than the minimum wage and that minimum wages were not paid in the subsistence agriculture sector (Das 2004, p. 5). He also recognised that trade unions are still at a developing stage and there is little capacity at the government or union level to enforce compliance with the minimum wage. He concludes that the positive effects of minimum wages are likely to accrue to the “most elite sections of the workforce (p. 5)”.

Das (2004, p. 22) notes that the unemployment rate is 20% in the two largest cities, with men having double the participation rate of women. He points to people in the age range of 15-24 years as having more than double the unemployment levels of 25- 34 year olds. This is of particular concern when, as we saw earlier, 42% of the population is under 15 years of age.

From the picture painted by Das (2004), it would seem that in the absence of a well- oiled industrial arbitration system and/or strong union enforcement, a minimum wage policy is a distant dream, even in the cities, of Timor Leste. The judicial system is, at late 2007, showing little capacity to deal effectively with the backlog of law and order offences and criminal activities sweeping the country. There is no capacity for the subsistence agriculture sector to afford a $4 a day minimum wage in the countryside.

This said, there may still be a case a minimum wage rate for the cities and a lower one for rural areas. It would at least set a wage standard which workers and unions could use in their bargaining with employers.

The argument that if employers are forced to pay minimum wages then the least skilled and the young will be displaced from employment, might have some resonance in economic fundamentalist circles, but it is a self-serving argument. Employers are only going to pay wages for work they want done and will only employ workers whom they believe are capable of doing that work. Least-skilled workers will always be sent to the back of the queue. There is no necessary correlation between age and competence and younger workers may be fitter or more willing to learn new skills than older workers. Yes, some people may be displaced, but if employers want certain jobs done, they will have to pay someone to do them. If a minimum wage was enforced then the employed will be better paid for any work they are able to obtain.

Still, it is clear that for the foreseeable future, a minimum wage will not (on its own) lift all Timorese (living in cities) above the poverty-line and will do little, if anything, for the majority of citizens living in rural areas.

Job guarantees

The provision of meaningful employment, particularly for young people in urban centres, is one of the most pressing problems confronting the Government of Timor Leste.

The Fretilin Government attempted to set up employment schemes in various places around the country. People built schools and repaired roads. Some NGO aid groups funded work projects to re-establish farms and develop arts and craft centres. But a national job guarantee scheme has never been established. Initially, the provision of employment schemes was delayed by a lack of funds, but since the oil revenues have started to flow, a major problem has been that the Timorese Government has not had appropriate administrative and financial arrangements in place to keep pace with the number of jobs which need to be created if a real dent is to be made in the unemployment figures.

Another problem is that nearly all of the job schemes are short-term, having a duration of only a few months. This is partly because the government does not have the capacity to roll out a fully national job creation scheme and partly because they wish to avoid being seen to favour some parts of the country over other districts. Throughout Timor Leste here is a widespread need for jobs and/or income.

If it were possible to introduce a national job guarantee (with the Government as employer of last resort) then this could play a major part in reducing poverty providing the rate of pay is high enough. There are many useful things which need to be done. A job guarantee scheme could help rebuild the semi-demolished houses or build new ones, upgrade roads, improve villagers’ access to clean drinking water, expand the number of schools, increase agricultural production, improve sanitation and rubbish collection and assist with other community services.

A job guarantee might also go some way towards settling some of the continuing tensions between sections of society in Timor Leste. International forces operating under United Nations control are managing to maintain a relatively peaceful situation but the Government of Timor Leste must create the social cement necessary for a functioning society.

Social welfare payments

Prior to 2006, no social security payments were made by the Government of Timor Leste – that is, there were no unemployment, sickness age, invalidity or widows payments. Social welfare is mainly left to family, the Church and NGO welfare groups. The 2006-7 Budget foreshowed specific benefits to veterans who fought in the resistance (Ministry of Planning and Finance Democratic Republic of Timor-Leste [MPFDRT-L] 2006 pp. 9, 23-24, 303). Basic housing was offered to veterans [one million dollars allocated] and pension payments [two million dollars allocated] were to commence in August 2006 (MPFDRT-L 2006 pp. 39-40, 303).

Following the 2007 elections, a Coalition government led by Xanana Gusmao indicated it intended to extend the government-funded social welfare system. This was opposed by Fretilin, whose parliamentary leader Aniceto Guterres declared:

We also do not know whether this government will continue to provide school feeding, which has been undertaken by the previous government. Sections 57 and 59 of the Constitution, already guarantees to each and every citizen their right to free health services and universal basic education in accordance with the ability of the State to deliver these services.

But on the other hand, the Government wants to payout pensions, subsidize and provide social assistance to the poor, the aged and the vulnerable. This means that this government has every possibility to continue to provide free health services to all of our people, as it can also with free education to all of our children.

What does this then mean? Does it perhaps mean that there is a political intention to privatize health and education services (Guterres 2007 p. 2)?

Setting up a social welfare system in Timor Leste with its underdeveloped administrative capacity is fraught with difficulty. Apart from all the usual problems with welfare assistance encountered in countries like Australia and New Zealand (Ziguras, Dufty, and Considine 2003, Boston, Danziel and St. John 1998, Goodin 2001, Kinnear 2000, Tomlinson 2003, 2007) Timorese public servants have not been encouraged to exercise discretion when carrying out their bureaucratic duties. None of the manuals which, in developed countries, inform social welfare officials about the appropriate interpretations of the vexed issues surrounding determination of “need”, have been written. The more targeted the benefits which might be introduced in Timor Leste, the greater the difficulty in determining eligibility (Boston and St. John 1998).

Past and present Timorese governments have established community infrastructure projects to improve roads, health services, water supply, schools, electricity infrastructure, housing, agricultural practices and aquaculture projects in rural Timor. Such communal community work projects are easier to administer than are individual welfare assistance programs particularly in areas outside major towns.

Basic Income

Basic Income systems can take many forms. I would argue that the most appropriate form of Basic Income in Timor Leste would be an above-the-poverty-line payment made to every permanent resident irrespective of their income or assets. The payment would be made to each individual irrespective of whether they live alone, with a partner, with children or in any other form of relationship. There would be no requirement to demonstrate a willingness to work or carry out any other civic duty. In short a Basic Income is a universal payment made as a right of citizenship (or permanent residence).

In September 2007, Casassas, Raventos and Wark proposed the introduction of a Basic Income in Timor Leste as a way of abolishing (or at least substantially reducing) poverty, increasing solidarity and hence social stability and reinvigorating local entrepreneurial efforts. This paper updated an earlier report on East Timor which they co-authored in 2004. Casassas, Raventos and Wark (2007 p. 4-5) described a Basic Income as:

a modest income that, in order to be effective, must be above the poverty line and sufficient for the survival of each and every citizen in the geographic- administrative area under consideration. It is unconditionally paid by the Administration to everyone, regardless of origin, age, gender, race, civil status, religion and socioeconomic situation.

Many writers Casassas, Raventos and Wark (2007), Van Parijs (1992, 1997), Standing (2002), Raventos (2007), all the basic Income advocates who contributed to Rutgers Journal of Law & Urban Policy (2005, Volume 2, Number 1) and many other Basic Income proponents since Thomas Paine’s Agrarian Justice, published in 1797, have argued for an above-the-poverty-line Basic Income (Cunliffe and Erreygers 2004). In addition, Casassas, Raventos and Wark (2007, pp. 9-13), like so many others before them, consider that even a partial Basic Income along the lines of the Alaskan model, set well below the poverty line, could have considerable advantages. They believe that, as in Alaska, a partial Basic Income would increase the egalitarian nature of Timorese society.

Timor Leste shares at least one similarity with Alaska where the Basic Income was initially financed by royalties on oil production and is now paid for mainly from interest on investments made from oil royalties (Goldsmith 2004). In 2005, the Alkatiri Fretilin government set up a petroleum fund to safeguard a considerable proportion of the oil royalties for the use of future generations. The total petroleum royalties from just one field, Bayu Undan is estimated to be $9.4 billion (MPFDRT-L 2006 p. 299). In late September 2007, Alfredo Pires, Energy Minister in the Gusmao Coalition Government estimated that, over a twenty year period, the value of the petroleum fund could exceed $100 billion (Grigg 2007, p. 33). The money currently held in the fund is more than five times the annual budget for Timor Leste.

Casassas, Raventos and Wark (2007 p. 10) calculated that:

For a total population of 1.2 million, the overall annual sum of a universal BI of US$30 per person per month would be US$432 million. Another BI scheme could be a BI of US$30 for people over 15 years of age (US$216 million) and US$15 for children under 15 (US$108 million), some fifty percent of the population, a total of US$324 million. A poverty-line BI paying just over 60 US cents per day for the entire population (US$20 per month), would cost US$288 million.

A Basic Income transfer cost of $432 million in a country where the Government’s total budget spending in 2005-6 was only $316 million (MPFDRT-L 2006 p. 23) is a significant amount. Even a Basic Income of 60 cents per day is not far short of the total budget spending in 2005-6. But the estimated oil revenue from the Timor Sea is more than enough to pay for the $432 million annual cost of the more generous proposal whilst leaving a considerable revenue stream for the petroleum fund. Once a Basic Income scheme was installed then, as Casassas, Raventos and Wark (2007 p. 14) suggest, tax regimes could be altered to recoup some of the money and other budget priorities could be altered.

Thus, poverty could be abolished, the economy would expand considerably, people would be more likely to feel they have a stake in the nation and the civil unrest which has plagued Timor Leste might start to dissipate.

Discussion of the alternative policies

Given the massive violence, destruction, upheaval and disruption which have been inflicted on this small nation since the early 1940s, it is quite remarkable that Timor Leste nowadays is relatively peaceful. It is, however, a nation whose fragile democracy faces many challenges both from without and within. If it is to survive as a political entity, it will need to address its people’s poverty, the shortage of employment, literacy difficulties, health and housing needs as well as finding a way to surmount the many political and regional dissentions which currently cause tensions between various sections of Timorese society.

This paper has described four different ways to ameliorate some of these social issues confronting the people of Timor Leste. Attempting to compare and contrast the benefits and disadvantages of minimum wages, job guarantees, social welfare assistance and Basic Income creates certain difficulties. It is not a case of comparing apples with apples. Each of the “solutions” addresses only some aspects of the totality of issues faced.

A good example of this is provided by the 2006-7 Budget which foreshadowed specific benefits to be paid to veterans who fought in the resistance (Ministry of Planning and Finance Democratic Republic of Timor-Leste [MPFDRT-L] 2006 pp. 9, 23-24, 303). Such assistance will help those who are recognised as veterans of the resistance with housing and pensions and certainly many of them are in dire poverty. Yet it will do nothing for the majority of the population whose lives were also disrupted by the 1975 Indonesian invasion, the 1999 militia violence or the current unrest. This is not an argument against assisting veterans of the resistance: it is simply an acknowledgement that these veterans are only a small proportion of the population whose lives have been disrupted since the civil war in 1975.

A minimum wage for city workers and a lower one for rural workers would have the capacity to provide unions and workers with a solid basis to argue their rate of pay with employers. The capacity of government bureaucrats to enforce such rates of pay has proven to be less than optimal and the fledgling union movement is not powerful. Two rates of pay will reinforce the lower pay rates for the majority who live in rural areas compared with their city cousins. Still, a minimum wage might lift many workers in the formal economy to a level above the poverty line.

There has been no commitment in Timor Leste for any government to become an employer of last resort on an on-going basis. So far, governments have provided short-term (one to three months) work in many areas across the nation. Roads have been improved, schools built, health centres constructed, farm infrastructure improved and houses rebuilt. The funding for much of this has come from the government, Timorese NGOs and international bodies. There does not appear to be the capacity to nor interest in implementing a national job guarantee scheme for all who seek employment in the country. If it were possible to implement a job guarantee scheme for all unemployed people who desire work, then this might go some way towards solving the problem of the gangs of unemployed young men who have been responsible for much of the damage to housing which has occurred in recent years. There are many reconstruction tasks which could be undertaken which would improve the lives of the people of Timor Leste.

As of the end of September 2007, there is no generalised system of social security. Only those who are recognised as veterans who fought in the resistance receive government payments, although the Gusmao Coalition Government has, in the 2007-8 budget debates, signalled an intention to introduce payments to assist “the poor, the aged and the vulnerable” through individual and community grants. Until now, much of the help such people receive has been in the form of charity from their family, the church, Timorese NGOs and international agencies.

There are currently no government plans to introduce a Basic Income in Timor Leste but several advisors to the Coalition Government have argued that unless some form of “independence dividend” is developed social unrest could worsen (Grigg 2007, p. 33). This poses the question “If an ‘independence dividend’ is to be developed, which, if any of the four options discussed above, would be the most advantageous?”

Timor Leste has no categorical social security system currently in place. It has only a limited bureaucratic capacity to administer a categorical social security system and it would therefore appear a wasteful effort to attempt to implement one, because many of its citizens, who are very poor, would not be assisted by categorical welfare schemes. Apart from the difficulties of administration, experience from Australia, New Zealand, the United States of America and Europe demonstrates that the poorest people are those who receive the least benefits from categorical systems (Tomlinson 2003 Ch. 3, Boston and St. John 1998, Goodin and Le Grand 1987, Goodin 1992, Goodin, Headey, Muffels and Dirven 1999). If the intention is to abolish poverty then categorical social security systems are an inefficient way to proceed.

A minimum wage, based on region or age, might assist workers and unions in their negotiations with employers. Such a step would help to lift some employees and their families out of poverty. But as Das (2004, p. 5) recognises the greatest beneficiaries of a minimum wage are the “most elite sections of the workforce”. He also recognises that some poorer workers will gain some flow-on benefits from minimum wages, but the only people who benefit are those who can obtain employment. A minimum wage cannot lift all residents above the poverty line. A minimum wage will not assist the sickest, the most disabled nor the least skilled.

Proponents of job guarantees argue that such guarantees ensure that some of the necessary jobs which communities want done, but for which they are reluctant to pay, will be done. They suggest that job guarantees keep people job-ready, supply income and provide people with something meaningful to do with their day. A major debate between job guarantee proponents and Basic Income advocates can be found in the Rutgers Journal of Law & Urban Policy (2005, Volume 2, Number 1) . There are many reconstruction and development projects to improve the quality of life of residents which the Government of Timor Leste could proceed with. For instance, even in Dili the footpaths’ drainage canal covers are so damaged that people in wheelchairs are forced to take to the streets to go shopping. Life would be less hazardous for those with mobility impairments if the damaged sewerage channels were covered.

Timor could continue to provide short-term job guarantees to upgrade social infrastructure as it has been doing or it could attempt to provide longer-term job guarantee employment in the cities as a way of job training and to provide some of the alienated young people with something socially useful to do. Job guarantees are particularly useful if the period of unemployment is short-term. This is not the case in Timor Leste. Job guarantees do nothing for people who are unable to do the work on offer and so a job guarantee scheme cannot increase the income of all residents to a level above the poverty line.

At the last Basic Income Earth Network Conference in Cape Town in 2006, I argued that a universal Basic Income would:

(1) be economically sustainable,
(2) be easy to administer,
(3) be ethically sound,
(4) be non-discriminatory, and
(5) enhance citizenship (Tomlinson 2007, p. 33).

The level of payment of a Basic Income determines the extent to which it alleviates poverty: if set high enough, it has the capacity to abolish poverty in a country. Frankman (2002, 2004), Van Paris (2002), Kunnemann (2005) and others have put forward Basic Income proposals to abolish absolute poverty throughout the world.

People willing to engage in and capable of doing whatever work was available under a job guarantee would be provided with a secure income. Those who are not willing to do that work or who are judged (by the job guarantee administrators) to be unsuitable would not be assured of a secure income. Mitchell and Watts (2003 p. 188) state “the State would be evading its social responsibilities by providing an unconditional Basic Income or other form of benefit.” Basic Income advocates argue that applying conditions to income support erodes freedom and that there is an ever- present danger that some people will be unjustly excluded in any conditional scheme (Standing 2002, Boston, Danziel and St. John 1998, Raventos 2007).

Bill Mitchell and others see nothing incompatible with a job guarantee supplemented by a “living income” for those unable to work (Mitchell and Watts 2003 pp.187-188, Watts and Mitchell 2004). It may seem a semantic debate as to whether the introduced scheme is a job guarantee scheme supplemented by a Basic Income or a universal Basic Income supplemented by a job guarantee (for all who want to work) but I think it is more important than that.

If the Basic Income is not primary, I believe, the job guarantee becomes the driving ideological force. This leaves the labourist / production ideological position in the box seat (Standing 2002). We have witnessed how the Howard Government has used the work ethic to justify the exclusion of some very poor Australians from the social security system. The ideological message can be distorted by the suggestion that work has to be compelled if the central focus is on work and the job guarantee.

With a Basic Income as the central focus, the emphasis is on income security provided as a right of citizenship and quite different ideological forces come into play. Thomas Paine’s Agrarian Justice, published in 1797, gave birth to the idea that the right to a Basic Income stems from our right to use the commons (reprinted in Cunliffe and Erreygers 2004, pp. 3-16). The ideological emphasis which a Basic Income brings is that of an inclusive citizenship: the duty that each of us owes to all and the equally pressing duty that all of us owe to each.

Conclusion

A minimum wage policy might assist some workers escape poverty but the greatest benefits will flow to the “most elite sections of the workforce (Das 2004, p. 5)”. A minimum wage will not create employment and will do little to build social solidarity. It might enhance the autonomy of the most affluent workers.

Job guarantees might ensure community infrastructure was upgraded, would create some employment and could help train some sections of the workforce, but Timor Leste would have to upgrade its bureaucratic capacity before job guarantees can change from their current regional short-term nature to a permanent national structure. The current short-term structure ensures that the work undertaken is necessary and meaningful to the participants. A move to a permanent job guarantee system could see the scheme degenerate into futile “make work” projects or, even worse, something like Australia’s “work for the dole”. As such, they would decrease autonomy of all who remain unemployed and only raise to a level above the poverty-line those who were desperate enough to be conscripted into the job guarantee.

Introducing government-funded categorical social welfare/social security would be the least effective way of assisting the poorest people escape poverty and would become riddled with stigma (Raventos 2007 Ch. 6). It is an outmoded way of financially helping those in need of assistance. The government bureaucracy in Timor Leste does not have the capacity to manage a categorical social service system efficiently. The payments to the veterans of the resistance should continue but no further welfare payment should be made to individual categories of recipients. Communal projects are easier to administer than are individual welfare assistance programs and this is particularly so in the areas outside the major towns of Timor Leste.

Given current and foreseeable oil revenues, a Basic Income would be economically sustainable, easy to administer, ethically sound, non-discriminatory, and promote social solidarity. Provided it was set above the poverty-line, it would abolish poverty. It would ensure that all permanent residents felt they were gaining some return from their oil resource. A Basic Income has the capacity to promote entrepreneurial developments because villagers could pool some of their income guarantee in order to develop new or improve old industries. If the main aims of the Government of Timor Leste are to alleviate poverty, promote autonomy and social stability, then a Basic Income is the best policy.

* Unless stated otherwise a dollar refers to $US.

Acknowledgement

I am grateful to Penny Harrington for her extensive editorial assistance in writing this paper.

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To each according to need

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

Posted Friday, 23 March 2012

In 1875, in his Critique of the Gotha Program Karl Marx suggested that in a higher state of communism a guiding principle of the system of allocation should be “From each according to ability, to each according to need.” Throughout the period of the 1950s to the late 1980s Commonwealth government ministers responsible for social services asserted that their government “assisted everyone in need”.

Provided one did not look too closely at the legislation and the administration of federal income maintenance then it did appear that most people experiencing financial hardship could obtain assistance of one kind or another.

It had taken until the 1940s for people of Asian descent to be provided with social services – until the 1960s before city-dwelling Aborigines and the 1970s for their relatives living in rural and remote regions to be included. From 1911 until 1973, when Bill Hayden abolished the ruling, people could be refused social services on the basis that they were “not deemed worthy to receive the payment”. By the mid 1960s the bulk of people denied payment in such circumstances had a chronic alcohol problem.

From 1947 until the mid 1980s there existed a Special Benefit paid to people in necessitous circumstances who, for reasons such as not meeting residence requirements, could not be paid another benefit or pension. This Special Benefit operated much like the French Minimum Insertion Benefit in that it inserted an income floor below which people would not fall.

In Australia, there was not the determination to ensure that no one missed out and as a result only “the worthy” were granted the Special Benefit. People applying for unemployment benefit who could not establish they had previously been in employment, or who were unable to prove they were fit, able, ready and willing to work were not considered for Special Benefit. Nor were those who, on applying for an Invalid Pension, failed to convince the Commonwealth Medical Officer that they were 85% incapacitated. Social service officers used their largely unmonitored discretion to decide whom to help and whom to refuse assistance. Such a situation has all the moral hazards of giving the police the power to intervene when they “have reasonable suspicion that a crime is about to occur.”

The contradiction here was that whilst the Special Benefit could, under the legislation and the regulations, be paid to everyone in straightened financial circumstances – it was not. There were people who by any measure were in financial need who were not assisted. Then as now, the Australian government does not assist everyone in financial need.

International lessons

Some recent international events bring home to us that the shame of the poor house did not dissipate at the beginning of the 20th century. On the 22nd February 2012 Tokyo police discovered 3 bodies – a mother, a father (in their 60s) and their 30-year-old son. They had died 2 months earlier of starvation preferring that to asking for help. (“Family choose to die rather than ask for help.” The Dominion Post, page B3). On that same day this paper’s page 1 lead story covered the finding of a Wellington City Council tenant’s body in his flat. He was believed to have died 8 months previously.

The stigma of asking for assistance is what governments around the world rely upon to deter people from applying for financial assistance. Generating such stigma can’t be left to happenchance; governments work hard to ensure the fear of stigma does not fade. The Dominion Post of the 28th February 2012 began its page 1 lead story with the sentence “Sweeping changes implementing National’s promise to crackdown on DPB (single) mothers and jobless teens are underway- and the government warns that sickness and invalid beneficiaries are next in its sights.”

Many of the changes which the conservative Nationals in Aotearoa are inflicting upon their low income earners and beneficiaries have already been implemented by Coalition or Labor administrations in Australia. The antecedents of such “welfare tightening” can be directly traced back to Tony Blair’s Third Way manoeuvres, Bill Clinton’s 1996 cuts to Aid to Dependent Children, to Margaret Thatcher and Ronald Regan and all of them inspired in one way or another by the anti- Keynesian economics of Frederick Hayek and Milton Friedman.

I remember in the early 1980s one of my colleagues, Alec Pemberton, urging me to join with him in writing a critique of the dark forces of reaction he saw emerging which he felt would tear down much of the social security system that had evolved and become more generous throughout the 20th century. I thought at the time that the small setbacks I was observing in income support provision were a minor hiccup. How wrong I was.

Precarious employment and security

Professor Guy Standing’s 2011 book The Precariat: The New Dangerous Class goes a long way to explaining the situation in which Australians and the rest of the world are finding themselves.

In Chapter 2, Standing asserts that since 1975 neo-liberal economic disciples have sought to establish a “global market economy based on competitiveness and individualism.” In Australia, we mistakenly called such neo- liberal ideas “economic rationalism” when they were hardly appealing economics nor particularly rational for the majority of people. Standing notes that in much of the developed world we thought economic growth would make us richer but in order to achieve this outcome we would have to lower taxes and downsize unions and other collectives in order to stop them impeding the neo-liberal agenda. This meant there was less revenue to maintain universal social services and social solidarity was eroded.

Neo-liberals railed against what they alternatively termed “cradle to the grave welfare” or the “nanny state”, berated the unemployed for failing to find work claiming that they, those with disabilities and single parents were an unnecessary drain on society. In what Standing calls one of the “great ‘con tricks’ of economic history” these same neo-liberals promoted tax credits, tax reliefs and tax holidays for the wealthy and the super wealthy. Standing notes, as a case in point, the inequitable tax rightoffs on superannuation available to the well-to-do but out of the reach of average workers.

For a few years the majority in the West enjoyed increased wealth or at least access to easier credit and the opportunity to buy cheaper household goods from the sweatshops of Asia. Those who were not carried along on the rising tide that was supposed to lift all boats had few if any friends in high places – they were expendable. In Eric Bogle’s words:

We held our wallets to our chest
and said that “I’m all right Jack
and to hell with all the rest.

Then came the global recession, with it the sub-prime housing crisis in the United States and not dissimilar housing affordability issues in much of Europe. Suddenly the Greek, Irish, Portuguese, Spanish and Italian governments appear as if they may go the way of Iceland. There is a crisis in world banking. There is massive unemployment throughout the OECD that once might have been lessened by counter cyclical spending. The unemployed who might have in the past relied upon universal social insurance to tide them over find the coffers are bare.

The future

Guy Standing looks in his last two chapters at alternative scenarios. If governments continue to allow further erosion of social support systems he envisages wages in the developed world converging towards those paid in China and India. He predicts that the precariat will continue to move away from social democratic parties and shift support to neo-fascist anti-immigrant parties. One has only to look at the way those who arrive by boat seeking asylum are treated here and in Italy to see how real such possibilities are.

In his final chapter, Standing examines a much happier option. He argues that people shouldn’t be forced to undertake employment noting William Morris’ 1885 comment that “It has become an article of the creed of modern morality that all labour is good in itself – a convenient belief to those who live on the labour of others”. He then makes the point that:

It is not idleness which damages society. Really idle people may damage themselves, if they dissipate their lives. But it costs society much more to police and punish the tiny minority than would be gained by forcing them to do some low-productivity job.

Later in the chapter Standing writes “If jobs are so wonderful, people should be drawn to them, not driven into them.”

He lays out the case for the creation of a universal Basic Income arguing that for most rich countries introducing a Basic Income would be relatively simple. It would involve consolidating existing income maintenance schemes and “replacing others that are riddled with complexity and arbitrary and discretionary conditionality.” Such a Basic Income would be paid to every individual legal resident without conditions.

Such a Basic Income would provide the foundation on which to phase out all other subsidies to labor and capital. It would abolish workfare and all other conditionalities imposed on those seeking social assistance. This universal income support would help citizens recover lost social solidarity and help give voice and agency to the precariat.

On the way we might rescue the educational system – turning it away from a training regime designed to make students into commodified alienated individualistic competitors for the global market place – guiding it towards again becoming an institution devoted to scholarship and the promotion of republican freedom.

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Two edged sword

Economic fundamentalism promises that by accumulating inordinate wealth the rich will enjoy heaven on earth. It simultaneously promises salvation for the poor if they avoid the moral jeopardy of becoming “dependent” on welfare.

Written but not published 2004

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Understanding world hunger*

First published in National Indigenous Times 2005
http://www.nit.com.au/secure/story.aspx?storyid=4980

There are many ways to understand world hunger. We could:
look into the eyes of a child dying of malnutrition,
talk to the owner of an arms manufacturing firm,
watch looters raiding an aid convoy,
sit in the office of engineers building huge dams in Laos,
speak with Monsanto about it patenting peasants’ seeds,
watch the American military’s invasion of Iraq,
walk for sixty miles beside a mother carrying her malnourished child,
observe Janjaweed militias burning villages in Darfur,
tour every refugee camp in the world,
go to lunch at Maxim’s, in Paris, with a foreign currency trader,
ask the Australian Prime Minister why he’s cut the foreign aid budget,
sit with Aborigines in their camps on the fringes of country towns,
try to understand why you did not donate to the last African appeal,
listen to the cries of the hungry, or
watch the crops withering on the vine.
We could, we could ….we could do lots of things.

* If one twelfth of the money which is spent on the world’s military was diverted we could feed, house, clothe, educate and provide basic health services to every person on the planet. Feed, house, educate or bomb, maim, kill – your choice.

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Unemployment

When John was growing up, the unemployment rate was in the order of one per cent, it was usually of short duration, the Commonwealth Employment Service (CES), was available to assist people find jobs and to pay unemployment benefit. The CES would only refer people to jobs paying the award wage.

Now the CES has been abolished and replaced by a motley collection of privatised job agencies that only continue if they can make a profit out of the unemployed people they process. John has been writing about unemployment for many years and has been active in various unemployed workers unions.

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Universal Basic Income 2018: imbedded contradictions.

There are contradictions and tensions imbedded within the concept of a universal basic income at both a national and supra-national level. These tensions and contradictions are tied to the purposes intended for this form of income guarantee.

Some essential questions, contradictions and tensions are considered below. They substantially revolve around the reason/reasons we might choose a universal income guarantee in preference to other forms of income maintenance. If there are readers who think that the central question is simple or straightforward, I would suggest reading Kate McFarland’s 2017 comprehensive summary of “basic income” pilots planned or in-train around the globe; she details some of the complexities revealed by these diverse pilot schemes.

What is a universal basic income?

Many models of basic income have been suggested over the years. Standing (2017, pp.9-10) notes that Sir Thomas More is often mentioned as the originator of the concept of a basic income in his book Utopia, originally published in Latin in 1516: Standing suggests though that the idea stretches back at least to the Plebeians in Athens in 461 BC. Australian Aborigines have lived on the continent of Australia for between 65,000 and 70,000 years, no member of a clan was left without food or shelter as long as there was food to share. Elaborate protocols developed over time designed to ensure no clan member was left without sustenance (Oodgeroo Noonuccal 1963, Rowley 1972). Cunliffe and Erreygers (2004) link the basic income to several European thinkers from the 15^thcentury onwards. Others attribute the modern version of basic income to Thomas Paine’s 1797 pamphlet “Agrarian Justice”. In England, Denis Milner (1920) and his fellow Quakers (his wife Mabel and Bertram Pickard in the period 1918-1920) proposed a form of basic income similar to that envisaged by most current basic income advocates.

In 2017, I gave a paper at the Basic Income Earth Network Congress in Lisbon in which I suggested:
The ideological underpinnings of supporters of a universal basic income are not unidimensional. If one were to include all supporters of introducing generalised income guarantees, then it would be a very broad church indeed. It would include supporters of Friedrich Hayek, Milton Friedman and all those who want to replace the welfare state with a minimalist income support base. The Atkinsons and Casses of the world who argue for a participation income would be represented. It would extend to those like Phillipe van Parijs who see a basic income as a capitalist road to communism. And there would be many people in between these opposed and opposing ideological positions.

I think it makes more sense to put to one side all who march to the Hayek drum, and their fellow-travelling participation income advocates, and those enamoured with tax credits and negative taxes – in fact all who would impose any obligation on those who receive the income guarantee. We should leave behind those who wish to diminish the generosity of publicly provided social welfare provisions and income guarantees.

We should regard basic income proponents as only those who would provide the income guarantee as a right of citizenship/permanent residency to every individual at the same level, irrespective of whether they work, are willing to labour, have assets or are impecunious, irrespective of whether they live alone or with others and disregarding any other social status.

In late 2016 Troy Henderson stated:
The progressive case for a universal basic income in Australia means providing an unconditional income to all Australians alongside – not as a replacement for – the welfare state… (the progressive case rests on basic income’s) potential to reduce inequality, improve social security and enhance personal freedom through the introduction of a new universal right.

Some tensions / questions / contradictions

It has been suggested that we might move towards a basic income in order to: boost the economy or as an act of justice or to cope with robots taking our employment or to deal with inequality. A basic income would promote social solidarity and avoid income insecurity (or, at least, provide income security as a part of social welfare or social assistance). It could be seen as a component of social sufficiency. Some have suggested that a basic income is an efficient way to supply economic sustainability in the face of the expansion of the gig economy. Latour (2017) and Standing (2011, 2014) sees it as a way of providing the Precariat with stability and a chance to operate in a world of increasingly changing circumstances.

The Canadian Association of Social Workers believes a universal basic income to be a more efficient way of providing a liveable income compared with a negative income tax system. The social workers take as their model the cost of administration of the Old Age Security program; which was 0.3% of the total annual program compared with the 8.1% administrative cost of Employment Insurance – with its high gate-keeping and extensive eligibility criteria (Kennelly 2017).

A basic income has been proposed as a way of avoiding poverty or at least as a means of alleviating poverty. A basic income has been seen as a way to mitigate political unrest. This is so because, as a universal citizenship right, it would promote social solidarity. It is also a type of social protection which has the capacity to ensure a liveable income for all. A basic income is considered by some as a way to enhance occupation, to promote entrepreneurship, to encourage education and as a way of encouraging people be productive because it frees individuals to choose the type of work they undertake. Yet it can also free people from a duty to labour. A basic income has the capacity to promote freedom because it could, in extreme situations, act as a permanent strike fund (Offe 2008). Some union leaders have opposed introducing a basic income because they fear it will (over time) lower wages by becoming the accepted wage rate. Other union leaders have argued it has the potential to raise wages particularly for those forced to take jobs which are dangerous, socially harmful or demeaning (Tomlinson, Harrington and Schooneveldt 2004). A basic income would avoid the need for charity, social insurance, or any other form of state guaranteed income provision.

A basic income has been described as a minimally presumptuous form of income guarantees (Goodin 1992), by some, such as Van Parijs (1997), as a libertarian freedom from obligation and by others as a communal or republican freedom to accomplish things (Raventos 2007).

Some point to the Alaskan Permanent Fund Dividend (BIEN Alaska), which is paid from a sovereign wealth fund accumulated from oil royalties, as an existingpartial basic income scheme. Others point to the New Zealand government Superannuation (a non-means tested age pension) or the Australian Blind Pension as a form of basic income albeit for specified segments of the population. Yet others argue that the entire concept of a basic income is utopian. To counter them a supporter of basic income, Dutch historian Rutger Bregman’s short title for his 2016 book was Utopia for Realists.

There have been proposals for a basic income for every citizen of the world.They have not suggested that every person on the planet would receive the same amount as every other person because what would be an austere, above the poverty line income, for a person in a rich country like Australia or Britain would provide a person in sub-Saharan Africa with a life of luxury; at least until inflation eroded the value of the income guarantee.

Worldwide universal basic income schemes propose variable amounts for different countries. Initially a substantial part of the funds necessary to provide a global basic income would need to be generated in more affluent countries and from supernational entities capable of imposing Tobin taxes on money transfers (the bulk of which originate in richer countries).

The ethical imperative driving such transfers of funds from the North to the South is based upon the centuries long exploitation of developing countries by developed countries either by way of explicit colonial imposition or by indirect economic exploitation of poorer countries by more financially better off ones.

Some basic income proposals have involved considering different amounts for city and country dwellers within the one country on the basis that the cost of living in cities is usually greater than for those in the country. But engaging in such a system would hardly promote social solidarity. Such arguments fail to acknowledge that the standard of living in cities is often higher than in rural areas. For example, the cost of salad products, green vegetables and other fresh food in many remote Indigenous communities in Australia is many times that paid by city slickers. People living in Australian cities have access to public health, community and transport services which are non-existent in the bush. The real advantage of having one universal payment in a country is that it does not create perverse inducements to move to other regions and it enhances citizenship within the entire nation.

Why are we doing it?

We might introduce a basic income because many people are “in need” (Tomlinson 2003, Chapter 2) or because it is good form – it could be the correct thing to do or because we are obligated to do it (noblesse oblige). On the other hand, we might introduce a basic income to gain, or retain status. Were we in impecunious circumstances we would expect others to do it for us. We might implement a basic income to make amends or because it is a right, a due. A basic income might be regarded as an “entitlement” because of earlier contributions made: prior service in military or civil society, or something flowing from contributions made in previous employment.

Table 1: We might introduce a UBI

to boost the economy	as an act of justice
to cope with robots taking our employment	to deal with gross inequality
to promote social solidarity	as a way to mitigate political unrest
to encourage education	to free people from taking jobs which are: dangerous, socially harmful or demeaning
because it’s an efficient way to supply economic sustainability in the face of the ever-expanding gig economy	to alleviate poverty / avoid income insecurity
to assist environmental sustainability	to promote efficient income distribution

It needs to be remembered that The Devils Dictionary suggests that “a Philanthropist is someone who gives away what he should give back”. Daniel Raventos and Julie Wark (2018) argue that income distribution is not a question of charity but one of justice. Writers like Standing (2017) and Van Parijs (1997)point out that almost every invention and most likely every idea has been built on the back of concepts and ideas which have gone before and are, or rather should be regarded as part of the commons rather than being entirely owned by an individual or organisation.

We might introduce a basic income whether or not robots are going to take our jobs (Ip, 2017) because it is a worthwhile thing to do. It might boost the economy or it might result in ecological advantages: through people choosing to work in more environmentally sustainable ways. It could involve more recycling and less extraction or just more efficient ways of achieving what we intend to accomplish. It may lessen environmental damage and boost the economy simultaneously. It is worth remembering that there is no economy without a liveable environment.

A longitudinal study of 1,000 unemployed respondents in the United Kingdom aged between 35-75 recently found that those who obtained low-paying or highly stressful jobs did not enjoy better health than those who remained unemployed. Whereas those who obtained good-quality jobs did enjoy better health outcomes (Chandola and Zhang 2017). This study replicates several of the findings of a seven-year longitudinal Australian study conducted by Peter Butterworth of the Centre for Mental Health at ANU who “found that moving from unemployment to a poor-quality job was actually associated with a significant decline in those people’s mental health and well-being compared with staying unemployed”: Butterworth also found that obtaining a poor-quality job did not increase that person’s chances of subsequently obtaining good quality employment (Long, 2011 p.1).

Specific groups of people who would be advantaged by a UBI

The Australian social security system is categorical, means-tested, and encased in an envelope of imposed obligations which must be met prior to receiving payment. The social security system is based on the fallacious assumption that if one person in a nuclear family has money then that money will be shared equitably with all other members of the family. In 2003, I wrote Income Insecurity: The Basic Income Alternative which documented the way Australian governments act to prevent some of the poorest people in Australian receiving income support. I argued that there are a number of non-affluent communities who would be helped by the introduction of a universal basic income.

Such communities include those asylum seekers who arrived by boat, recently arrived migrants and those with a series of marginal disabilities, which, singly, may not be sufficient for them to be regarded as having a disability sufficient to incapacitate them but when taken together results in their not being able to seek or hold employment.

In Australia, there is one community in particular which would be advantaged were a universal basic income introduced. That community is the Indigenous community.The reason is simple, non-Indigenous Australians have waged a race war for 230 years against the original owners of this land (Cromb 2018, Wilkinson 2018, Dovey 2017, Tomlinson 2005). As Dr Morgan Briggs (2018) says about the foremost piece of Federal legislation designed to recognise Indigenous land title, that “After 25 years of administration the native title regime is predominantly a vehicle for the ongoing subjugation and assimilation of Indigenous peoples, in line with the logics of the settler-colonial state upon which Australian law is built.”

On Friday, the 2^ndMarch 2018 John Lawrence Senior Counsel said “Aboriginal people never get justice in this country.” He pointed out that there had been virtually
no consequences for those adversely named in the Northern Territory Royal Commission into Youth Detention. He pointed to many of the senior staff of Corrections still being employed in exactly the same positions as previously. He went on to quote Eugene O’Neill saying ‘There is no present or future there is only the past happening over and over again – now’ and that this has been the situation since 1788.

Dr. Linden Wilkinson (2018) studied Prime Minister Keating’s famous Redfern Reconciliation Speech of December, 1992, and identified:
five persistent narratives that continue to frame the failure to establish new models of co-existence, models that address the past, heal the present and ensure a more inclusive future. These narratives predictably concern land rights and Aboriginality, or the perception of and respect for difference. The remaining three narratives are more subtle but equally potent: the inconsistency of vision in non-Indigenous leadership; the ongoing presence of the past in the now; and the assumed supremacy of non-Indigenous knowledge, which over time contributes to paternalism, arrogance and intractability. … (Before concluding that in Australia) as yet, there is no reconciliation narrative. It doesn’t exist, yet.

As Indigenous woman Natalie Cromb (2018) wrote:
Indigenous people are viewed as a problem in this country. We are a problem that is met by the powerful with “solutions” brandished like weapons to beat us down –from historical solutions such as murder, massacre, sexualised violence and slavery to the historical and continuing practice of child removal, to the contemporary policies of intervention, work for the dole and cashless welfare. The past 230 years has seen systematic annihilation of a population undeserving of the abhorrence of dispersal, dispossession, disenfranchisement and the destruction of the essence of our culture – land, language and lore.

What would a UBI accomplish?

A universal basic income introduced at a level above the poverty line would enhance social solidarity. It would ensure that fewer people could be conscripted to work in socially demeaning jobs. They could not be forced to engage in socially or environmentally destructive industries. It would mean that there was less poverty, less oppression, less exploitation of our fellow residents. There would be less need to engage in criminal activity to survive. When a person came out of jail they would automatically have a liveable income to sustain them whilst getting back on their feet. If nothing else it would diminish recidivism. Our citizenship would be enhanced. It would expand freedom, if for no other reason than that none of us can truly be free when our comrades, neighbours or fellow citizens are incarcerated or impoverished.

Were we to have a basic income we would need fewer prisons. The average cost of keeping a prisoner in jail for a year in Australia in 2013-14 was $292 a day. That works out in 2018 figures at about $110,000 a year for each prisoner, a total cost of approximately $3 billion (Special Broadcasting Service [SBS], 2015). Indigenous people are at least 16 times more likely to be in jail than other Australians.

There will be some people, irrespective of the type of income support system operating in a country, who are such a danger to themselves or others that they need to be separated from the general populous so the entire $3 billion won’t be available to boost the social provision budget. Many of the people currently in jail have: low intelligence, acquired brain injury, mental health or drug problems and could be more adequately cared for in less restrictive (but more therapeutic and educational) environments and at a much lower cost (Human Rights Watch 2018). Many of them could be assisted to become productive and so contribute to the common wealth if our politicians could relinquish their obsession with various law and order agendas.

The greater social solidarity which a basic income would provide nationally, would free many of us to work to expand the idea of a basic income to other countries and were we, over time, to succeed in ensuring that everyone in the world had sufficient food, adequate shelter, decent health and education services we would substantially increase the social solidarity across the globe. Eventually fewer and fewer people would be drawn towards inter-country or civil strife and the money saved could be put towards increasing the standard of living for all on the planet.

Cooperation between citizens and between countries would lessen and hopefully replace the desire for war. We could bend our minds to eradicating famine, and pestilence and disease in the knowledge that everyone had sufficient to provide for themselves and their families. Military units could be transformed into civic production enterprises until the soldiers, sailors and air force personnel learnt how to utilise the economic security, which a basic income provides, to find their own way to become productive or at least fulfilled. The war museums in countries could be converted into peace museums. Politicians would be freed of the need (desire) to glorify war. They would not need to genuflect before the tomb of the unknown soldier, celebrate the glorious fallen, the lost, the missing in action and the dead. They would be better placed to enhance the interests of the living.

Table 2: Other reasons for promoting UBI

freedom would be increased / citizenship would be enhanced	people would have a livable income to sustain them in hard times – poor people would have less need for criminality to survive / recidivism would diminish – there would be less need for prisons
world-wide basic income would promote greater social solidarity between sections of society and between countries; there would be less conflict	world-wide basic income would promote peace
cooperation between people and between countries would hopefully replace the desire for violence and war	we could work on eradicating famine, pestilence and disease in the knowledge that everyone had sufficient to provide for themselves and their families

Two questions which we need to consider are: “What would it cost to feed house clothe and educate everyone in the world?” and second “How much do we spend on military expenditure each year?” The United Nations calculated that the cost of solving the crisis of global hunger to be in the order of an additional $30 billion a year (Borgen Project). This is a large sum but in 2012 the United States alone spent $737 billion on the military. The National Priorities Project estimated that the world’s military expenditure in 2015 was $1.6 trillion; the United States’ share of which was 37% and was equal to the combined military expenditure of the next seven largest national military budgets.

So, even if the cost of a global universal basic income capable of providing every individual with the wherewithal to feed, house, clothe and educate themselves was three times the cost of just abolishing hunger that is still less than $100 billion. Total annual military expenditure stands at more than $1.6 trillion; so, we could introduce a global universal basic income without affecting the budget bottom line of national budgets provided we just shaved $100 billion off war games. There is so much graft, feather bedding, inefficiency, kick-backs and corruption involved in military purchasing that $100 billion would hardly be noticed.

There is a further question we might ask: “What is the economic cost of unnecessary pollution caused by military adventures each year?” Were we able to avoid the economic cost of unnecessary pollution caused by military forces we could make gains on many fronts not least on the amount money we need to put aside to help stave off climate change, to save the world’s reefs and ecosystems, and meet rising health costs. There are many environmental and health costs associated with the use of depleted uranium, the widespread use of polluting fire retardants and the maintenance of nuclear waste dumps. Extraordinary amounts of greenhouse gasses are produced as a by-product of the fuel expended by military ships, planes and vehicles. The Gerald R Ford Class Aircraft Carriers cost $7 million a day to run (Wikipedia 2017). Just think what such sums could do in remote areas of the world if they were spent to end famine, provide health services or to educate.

Which way will we wander?

I have presented many reasons why we may decide to introduce a universal basic income, I have also provided what I think constitutes sound arguments as to why we should move to introduce a universal basic income. Alongside that I have mentioned some of the arguments of opponents of universal income guarantees in general, and basic income in particular. By now it should be apparent that I consider that opposition to a basic income is based on outmoded thinking.

There are many people who work in the social welfare system who argue that there is or even that there can only be a finite amount available in any one country to be spent on income support. They propose therefore, that the entire amount should be directed towards those most “in need” (Tomlinson 2003, Chapter 2). They suggest that providing money to every individual permanent resident of a country must mean that those most “in need” will receive less than if all the available funds were directed to those “in need”. Superficially this is a very attractive proposition.

If I look at the Australian system of income support then it is immediately clear that that system does not provide the most financial support to those in the direst financial circumstances. Age pensioners are provided with an above the poverty line income adjusted in line with rises in average wage rates. Unemployment payments are loosely tied to Consumer Price Index rises. Pensioners have all sorts of write-offs on assets, particularly privatised superannuation, which are not available to those who are unemployed. Pensioners are allowed to earn much more than the unemployed before means tests come into effect.

The level of payment for people who are unemployed has not substantially increased in real terms since 1996 (Fact Check 2017). Young people who are unemployed can receive as little as 40% of the poverty line. Aborigines, the poorest peoples in Australia, particularly those living in remote regions are the least likely to get any assistance and when they do it is hedged around with many more obligations than imposed upon unemployed people living in cities and towns. Many severely disabled individuals and the least bureaucratically sophisticated citizens seldom get their full entitlements. The existing Australian system does not provide income support commensurate with the extent of a person’s financial need.

Robert Goodin and Julian Le Grand demonstrated, in 1987, that universal systems of income support are likely to be much more generous than targeted systems; and because they are paid to everyone, they generate much stronger community support. The levels of payment are more likely to increase over time because of that support.

The suggestion that, there is a static pool of funds available to provide income support and that it is a finite amount, is an absurd proposition. In Australia, over the last decade, successive governments of Labor and conservative persuasions, have cutback and/or abolished various types of income support payments particularly those directed towards assisting people who are unemployed and lone parents. The conservative Turnbull Government attempted to provide $50 billion in tax concessions to companies and tax cuts to those receiving salaries in excess of $100,000 a year whilst simultaneously increasing education, pharmaceutical, and health charges and reducing some forms of income support. Rather than assistance in Australia being provided to those “in need” assistance is provided to those “in favour”.

There are some writers such as those in the trickledown brigade and other neoliberal proponents who are never going to be convinced by the basic income trials in Holland, Finland, Scotland, Namibia, India, Kenya, Uganda, Brazil, Dauphin in the 1970s (Lum 2014) or other parts of Canada in 2018. This is because, they believe it is not in the economic interests of the affluent to adopt arguments in favour of increasing assistance to those in necessitous circumstances.

The suggestion that “the presence of a basic income would discourage work willingness” or more commonly “people would leave work in droves” is attractive to reactionaries. It is a hard idea to dislodge because the idea of sharing of “their” wealth with anybody else is an anathema to them. Their philosophical outlook and their psychological makeup predisposes them to accept only “evidence” which allows them to exploit their fellow citizens and keep their ill-gotten gains to themselves. Ideas about humans being cooperative or contributing to the common wealth is beyond their ken.

There is an obvious reasons the rich and super-rich and even the better off members of the middle classes are likely to oppose a basic income; namely, it would substantially improve tax compliance. There are two reasons for this:
first, a basic income (because of the simplicity of its eligibility requirement) frees the State from chasing diddly squat amounts from people defrauding social security; this, in turn, allows the tax authorities to concentrate upon pursuing tax avoidance and evasion.

Second, (because everyone receives the same payment) downward envy is avoided; consequently, permanent residents are reinforced in the idea that everyone is entitled to a liveable income and everyone should pay their fair share of tax.

This is not to suggest that the well-off are insincere. I am sure that many believe the neoliberal mantra they spout. It is a convenient yet happy coincidence that the views they hold justify being self-serving, egotistical or even just plain mean. It is easier to get people to accept new ideas than let go of old ones. It is almost impossible to get people to relinquish an outmoded idea if all the economic and psychological rewards to which they are preprogramed are supportive of their existing ideas.

But there are enough people in the world ready, willing and able to promote caring, sharing and the cooperative pursuit of putting the interests of the many ahead of those of the few. Our job is to help them form a movement powerful enough to do just that.

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More Info

Universal Basic Income is the policy that an innovative society needs

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

Posted Friday, 15 January 2016

Australia currently has a Prime Minister who claims he wants to create an innovative nation. I lost sight of how innovative we truly are whilst driving through the smog haze caused by the coal fired electricity generators around Yallourn in Victoria and similar monstrosities in the Upper Hunter in New South Wales. Our previous Prime Minister thought wind turbines an eyesore but at least you can see them clearly in the absence of choking smog.

We used to ride on the sheep’s back until the wool market collapsed. Then we put our trust in extractive industries, particularly coal, other hydrocarbons and iron ore, but the price we are getting for them has gone through the floor. Prices do not appear likely to recover in the foreseeable future.

We have a well-developed tax avoidance industry propping up the big end of town and giant multinationals, which appear to believe that tax on profits is something that bears no relation to their operations. When we create an innovation we are often too mean to develop it here and happily let it go overseas to find risk capital and a new home.

Along with New Zealand we once had the most advanced universal social welfare and generous industrial protections in the world, which European observers described at the time as “Socialism without doctrine”. But that was over a century ago.

Since the mid 1980s we have turned away from generous universal social protections and towards loading onerous obligations upon those who apply for working age social security. We have made their lives increasingly unbearable by extensive means testing. “Reciprocity” and “mutual obligation” have been the catch cries of Labor and Coalition governments respectively.

Tristram Hunt, a British MP, writing in the Guardian about the English Labour Party’s continuing obsession with the Blair/Brown governments, but with equal relevance to the Australian Labor Party’s preoccupation with the Hawke/Keating governments suggests we need to develop a:

socialism that embraces technology and modernity and sees the function of the state as supporting and empowering citizens in an age of insecurity.

The quickening pace of globalisation, changes to the labour market, the rise of robots and supercomputers, and the urgent need for social security reform are here to stay. And we need credible answers, which embody our values, to all these challenges.

Another Guardian writer John O’Farrell writing about the current Dutch pilots of universal basic income (UBI) makes the point that a UBI is about to be paid in Utrecht and 19 other municipalities in the Netherlands:

Everyone will get about £150 a week, whether working or not. The unemployed won’t find themselves penalised for finding work, and the hope is that the state will spend less money snooping on benefit claimants, moving on the homeless or locking up those driven to crime.

The idea is so refreshingly contrary to the petty conditionality that is killing the welfare state that it began to fill me with optimism that there may be a few people lying in this political gutter still looking at the stars. Once upon a time, universality was the underpinning principle of welfare. Every mother got child benefit; every child got free school milk, until that was snatched away …

In Namibia and India pilot programs have demonstrated that people who are guaranteed a non-conditional minimum survival payment are far more productive, less criminal, more innovative, more inclined to send their children to school and health clinics than those without such a guarantee.

Finland is preparing to run a series of pilot programs to test whether universal basic incomes are an appropriate way to proceed in that country. They are employing a number of university-based institutes to run evidence- based experiments.

In Australia the Jenny Macklins, Tony Abbotts, Mal Broughs and other self-justifying politicians claim to have utilised evidence-based social policies to promote the Intervention in the Northern Territory, income support tied to compulsory school attendance, the need to cutback the universality of the income support system, workfare and other attacks on the less fortunate in this country.

Their claim to have evidence for their policies is nonsense. Julia Gillard’s justification for imposing increased obligations on unemployed people because of “The simple dignity that work brings” still jars in my ears. Some forms of employment do increase dignity but many of the jobs that the precariat are forced to take in order to avoid social security sanctions are belittling.

An innovative society is not one where multinational conglomerates pay large amounts to those they consider the best scientists to work on inventions for the armament, chemical, electronic and pharmaceutical industries: that is a failed late capitalist model.

An innovative society is one in which all citizens are provided with the financial resources necessary to have the opportunity to pursue their dreams. Irrespective of whether they aim to work towards civic improvement, a healthier environment, ecological sustainability, more efficient production or even just an improved life style. Real innovation can only occur in the context of a static growth model of development.

Along the way some will choose to leave jobs in call centres in order to set up a pie shop or such like, others will increase their education, still others will fulfil their creative potential. People will be freed to take on caring responsibilities. Others will remain in the employment they had before a UBI was put in place.

The options of individual choice are limitless – what is limited is that we live in a world with finite resources, a world which can only handle a limited amount of pollution and one in which the population needs to be stabilised or even decreased if we are to avoid impending ecological and humanitarian catastrophes.

This is the sort of innovative society where a UBI is a necessity rather than an option. It is imperative because only a universal income guarantee can provide every permanent resident sufficient income to live in austere comfort. It is paid to each individual without demanding anything in return. It puts an income floor under every individual permanent resident without imposing an income ceiling.

Jenni Mays, Greg Marston and I have just completed editing a collection of articles entitled Basic Income in Australia and New Zealand: Perspectives from the Neoliberal Frontier, which Palgrave Macmillian will release in March. In the preface of the book Professor Guy Standing writes:

Many Australians and New Zealanders receive pocket money as children from their parents. Some receive vast fortunes through inheritance, or receive land or other property that way, without doing a day’s work or labor for it. Yet such lucky people tend to be at the forefront of opposition to providing everybody with a basic income on the grounds that it would be “something for nothing.” If they are against providing a basic income, they should in all consistency be against pocket money and inheritance.

I would encourage all who want to understand our income security options to read this book because “knowledge is power” – but then again “ignorance is bliss”.

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Wages and the contradiction of economic fundamentalism

Written circa 2003

Economic fundamentalists claim:

the market should find its own level.

They campaign against:

minimum wage legislation – suggesting that it inhibits employment because it puts too high a price on labour, and
decent income support payments – suggesting they inhibit the desire to accept work.

Economic fundamentalists oppose tariffs on the grounds they constitute a barrier against free trade.

They oppose farm subsidies on similar grounds.

They are opposed to unions and arbitration systems on the grounds that employers and employees should individually negotiate agreements.

They argue that the rich need to be encouraged and the poor compelled.

Finally, they claim that if the markets are not interfered with some of the prosperity will eventually trickle down to the waged and even unwaged workers.

Apologists for Capital promote such fundamentalist dictates yet simultaneously support:

the use of police and paramilitary forces against strikers,
industry research tax brakes / incentives, and
governments providing incentives for industries to set up.

If the fundamentalists really want the market to be the final arbiter and are not prepared to oppose the things which assist Capital then logically they should not oppose those things which assist workers in their struggle against Capital.

Fundamentalists are content to let workers negotiate with Capital in the absence of unions, arbitration systems, decent income support systems and minimum wage legislation on the grounds that the market must be the final arbiter.

Even if unions, arbitration systems, decent income support systems and minimum wage legislation are in place the market will still determine whether Capital will offer any worker a job and on what basis.

The real objection, of apologists for Capital who rely upon economic fundamentalist’s prescriptions, is not that the market is determining outcomes between workers and Capital but that the worker’s power is increased and the power of Capital to compel is less absolute.

If the fundamentalists were required to logically present their case then they would have to argue that they are opposed to workers selling their labour at a rate satisfactory to the seller rather than at a rate dictated by the fear of impoverishment. If they were forced to argue rationally their message might have less appeal to the bulk of the population.

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War on poverty

Published in Anarchist Age Monthly No.80, July 1998 Pages 32 -34

A lot of nonsense is talked about poverty: clerics see it as a moral quandary, economists conceive of it as an economic question, social workers see it as a social problem, and politicians view it as a political dilemma. No one is prepared to admit there is a military solution. Counsellors are aware of its impact on individuals while social policy analysts interpret its social dimensions. Conservatives point to individuals shortcomings as the cause of poverty, whilst leftist blame the systems of societal distribution for its widespread manifestation. The experts all agree that the solution to poverty lies within their area of competence. Well, all the recognised experts have had a crack at eliminating it. If the experience of the last two decades in the Western World, where poverty and inequality have increased; or the results in the Third World, where there are one million people starving or on the brink of starvation, are anything to go by then we must reluctantly admit the experts have failed us. The time to let the military have a go at solving it is now upon us.

Why the military?

It is probably a bit surprising that in a liberal democracy an anarchist with pacifist and socialist tendencies would opt for a military solution to poverty. The prime reason for this is that the other options currently on offer have failed and despite the fact that the military hierarchy have in the past only shown interest in installing a regime which ensures those in the military hierarchy escape the poverty trap it is reasonable to believe that once assigned the task they will take to it with alacrity – after all they have no other sensible function to fulfil in society.

The strategic plan

Clearly there is sufficient food available in the world to feed everyone. The problem is equitable distribution. There is enough wealth in the world to ensure no one lives In poverty. The problem is equitable distribution. The military can make a real contribution in this regard. If the money which now goes to support war games for just one month of each year was spent on removing poverty there would be sufficient funds available to feed, house, cloth, educate to basic literacy levels and provide basic health services to every human on the planet.

The easiest way to make budget saving in military expenditure would be for all the military forces in the world to take a four week unpaid holiday starting on the first of January each year. Anyone engaging in unpaid overtime for the military during this holiday period would be sacked from the military forces. An alternative way to achieve the same savings would be to stop buying military equipment. As there would be no wars to fight and no widespread insurrections to put down the need for new lethal equipment would evaporate.

The reason why the military machine has not been prepared to divest itself of one twelfth of its income is not that it is thoughtless or greedy but that in the past its entire reason for being has been to ‘go round the world meeting lots of nice people then killing them’. Once the military has been assigned the task of ending poverty it will provide the generals with a socially meaningful existence and they will be able to psychologically cope with jettisoning their previously violent persona.

The military necessity

It is hardly likely that the military will encounter resistance from those experiencing poverty as it sets out to end their poverty and or starvation. The military would not need to divide the reserve army of labour, benefits would in any country be paid universally, thereby increasing workers solidarity with those excluded from the paid work force.

But it could be expected that there will be privileged sections of society who may find that the military’s policy of equitable distribution could conflict with their desire to amass inordinate wealth. Some of the top hundred billionaires who own as much wealth as 40 per cent of the world’s population, and even less rich people who have constructed their personalities around their capacity to take more from the common wealth than others, might have difficulties adjusting to the new world order.

It is not contemplated that the military would need to purchase new weaponry to accomplish the necessary re-education – there is more than enough firepower in existing stocks to eliminate reactionary bourgeois elements.

Economic spin off

Once the demand for new lethal technology had disappeared those 50 per cent of scientists in the OECD who get their living developing new weaponry could turn their attention to solving the real problems facing the world. They could devote their time to the issues of environmental sustainability, protection of habitat, the prevention of species extinction, fighting disease and ignorance, developing new antipollution technology, expanding recycling, creating alternative sustainable energy programs and working out ways to enhance food production. All of these research areas would result in a wealthier/healthier world.

Redefining contribution: not as obligation but as a right to contribute

So confused have conservative social policy analysts become that some like the British ideologue, David Green, have railed against the threat of duty-less rights or in John Howard’s terms ‘the need for mutual obligations’. In 1997 in Auckland, the New Zealand Government was so preoccupied by the bogyman of ‘welfare dependency, they hosted a major conference to which they invited right wing ideologues to pronounce upon this perceived threat to civilisation as they know it. The predictable solutions to emerge from the Government conference were: more tightly targeted welfare payments, compulsory ‘work for the dole’, and increased surveillance of welfare beneficiaries.

The real challenge facing the world is not the emergence of ‘duty-less rights’, nor the failure of poor people to meet their ‘obligations’ to the state. The real challenges facing governments are twofold: the state has so far failed to set in place sufficient opportunities for poor people to make a contribution and secondly the equally sanctimonious failure by the state to recognise the contributions that poor people actually make. For example,a person with an intellectual disability who, without support might need to be institutionalised, may make a contribution to the society by undertaking literacy training or by going to cooking classes thereby decreasing the level of support that the person requires to live independently.

Facing the challenge of overcoming years of non-literacy or an inability to cook one’s own meals is of the same order as that faced by a conceptually bright able bodied student getting a PhD. Yet in my country one is rewarded by increased job security and enhanced reputation whilst the other’s contribution is ignored.

In my country the efforts of the managing director of a woodchip company who, through either corruption or by way of government negligence, has a concession to clear fell native forest for an amount less than replacement value, is recognised in the national accounts. Yet the contribution of the young who spend months in the forest protesting the loss of habit of endangered species like the long tailed potoroo goes unrecognised or worse. These young eco-warriors, if recognised, find they are suspended from receiving any social welfare benefits.

The military and contributions

In setting out to eliminate poverty the military will need to utilise the efforts of all people in order to ensure they succeed. One tactic to facilitate such cooperation, which community groups have long realised, is the importance of acknowledging each and every members contribution towards the common ends. Unlike Political leaders who thrive on dividing the electorate in order to promote and retain privilege, the military will not be able to afford to ignore the people’s contribution.

The profound question

Critics of this proposal will point out that, in the past, when the military has been in control repression has increased and inequality has not ended. Why would people living in a liberal democracy willingly let the military attempt to eliminate poverty? The English liberal philosopher John Stuart Mill over a century ago pointed out that ‘while anyone was in chains he could not be free’. Perhaps obesity in the West may be explained by the fact that many eat too much. But this explanation does not explain why they consume too much – could it be they feel that while anyone is hungry their appetite cannot be satiated?

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War, famine, pestilence and neo-liberalism

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

Posted 8 August 2005

Live Aid has come and gone, its floodlights extinguished in the final communiqué of the G8 leaders. The TV images of anti-poverty protesters at Edinburgh were erased by pictures of blasts in the London Underground. World leaders have recommitted themselves to a few more crumbs of aid, a little bit of ‘debt forgiveness’ for 18 African countries, a modicum of posturing about encouraging trade with the third world, a renewed effort to suppress insurgents and to carry on business as usual. All the recipient countries will be expected to liberalise trade with the first world, privatise their utilities and meet the demands of the World Bank and the International Monetary Fund (Monboit 2005).

It will be poverty as usual, business as usual and the usual poverty business – to salve the consciences of those who are doing quite nicely thankyou. As Arthur Daly would say, “It’s a nice little earner.”

The 17 to 20 million refugees and displaced people in camps around the world are poor and are there predominantly because of war or civil unrest, although ecological disasters are increasingly contributing to famine and the subsequent displacement of people. Struggles over scarce resources are a direct result of looming environmental crises.

In much of the third world, poverty can be directly linked to the expropriation of resources during colonial periods or the granting of loans to corrupt leaders in the early post-colonial period. Current poverty-inducing mechanisms manifest themselves in several forms:

dumping surplus farm produce from the developed world which undercuts local producers,
paying too little for agricultural or mineral products from developing countries,
bio-piracy of Indigenous people’s animal and vegetable products,
failing to investment ethicallly in third world companies,
granting easy credit for the purchase of military equipment,
insisting that the third world lowers import tariffs whilst imposing
quotas and tariffs on imports from developing nations, and
using sweatshops to produce goods for multinational firms (Bacon 2005).

Of course, if a third world country has resources, particularly oil, which the world’s superpower wants and that country is not prepared to play ball with the Neo-liberal agenda then, as Iraq found to its cost, war becomes a very attractive option. As the cartoon says, “We’re liberating Iraq – one barrel at a time.”

The first world has denuded tropical rain forests and continues to use a disproportionate amount of carbon energy thereby contributing to global warming and other ecological crises. The failure of governments and leading pharmacological companies to take seriously the health needs of those living in developing countries devastates their productive capacity. The Aids crises in Africa is an obvious example, but it is important to acknowledge that Aids is only one of many diseases limiting the capacity of third world countries to lift themselves out of poverty.

First world countries

Poverty is widespread in countries like the United States, Britain, New Zealand and Australia. In Australia, many of the features found in the third world come into play, albeit in a different form. Money which is spent on waging war in Iraq and Afghanistan could be spent improving the health, social security and education of our poorest citizens. The savings which the Federal Government is hoping to make by converting Disability Support Pensioners into Newstart beneficiaries (Tomlinson 2005) could, instead of going to the military, be put towards improved rehabilitation and other services for people with disabilities. Asylum seekers, slowly being driven mad by being incarcerated in Baxter and other immigration detention centres, could be freed to be productive residents.

There are many low paid workers in Australia. Supporters of the recent Howard Government’s industrial relations changes seem oblivious to the life experiences of low paid workers’ revealed in the Australian Liquor Hospitality and Miscellaneous Workers Union’s (LHMU) submission to the Senate Inquiry into Poverty (2003). There is very little recognition of the demoralisation that follows in the wake of working full-time yet still being in poverty, or only being able to gain casual, poorly renumerated, precarious employment. Australia has very high levels of casual workers compared to other OECD countries (Seventeen academics 2005). The Howard Government’s cutbacks in industrial protection will impinge most acutely on the poorest and least skilled workers.

Indigenous Australians experience poverty more frequently than any other group of citizens. They have much poorer health, die on average 17 years earlier, are more likely to be imprisoned, less likely to own their own home, to be employed, or to be in school or university than other Australians (Steering Committee for the Review of Government Service Provision 2005). The reason for their condition is not hard to fathom. Their country was invaded, their land taken, their way of life largely destroyed, many were institutionalised on missions and settlements or in other ways marginalised from the system of European production. Australian governments have never negotiated a treaty with them, let alone a just treaty.

Governments and industry fail to create sufficient employment for all the available labour yet refuse to provide adequate alternative forms of income support. Many social security applicants are refused benefits either because they don’t meet the totality of eligibility requirements or because they fail to comply with increasingly onerous obligations imposed on social security recipients.

Basic Income

There are alternatives to debilitating poverty in both the developed and developing world. One such alternative is the provision of a Basic Income. The Basic Income Guarantee Australia website describes how this could be done. Brazil has started to phase in a Basic Income for its poorest citizens (Ozanira da Silva e Silva 2004).

Proposals for a Basic Income have been promoted in South Africa in order to eliminate poverty (Nattrass 2004).

Philippe Van Parijs (2002), the doyen of the Basic Income Earth Network, has set out a convincing argument for the introduction of a Basic Income scheme to cover every person in the world. Frankman (2002) concurs pointing out that if:

we assume that the financing of a planet-wide citizen’s income were to fall exclusively on the top 25 per cent of the world distribution who account for 77.7 per cent of world income ($23.6 trillion of a world income of $30.4 trillion), then the cost of a universal global program set at 20 per cent of the per capita income of the world would require an additional tax burden of 26 per cent on the income of the world’s wealthiest. If one considers that the wealthy would also receive the income guarantee, the net additional burden on them falls to19 per cent.

If such a Basic Income scheme were introduced then we could claim to have succeeded in making absolute poverty history.

Bibliography

Bacon, D. (2005) Stories from theBorderlands.
http://www.truthout.org/issues_05/070705LA.shtml
Basic Income Guarantee Australia http://www.basicincome.qut.edu.au/index.jsp Basic Income Earth Network http://www.etes.ucl.ac.be/BIEN/Index.html
Frankman, M. (2002) “A Planet-Wide Citizens Income: Espousal and Estimates.” http://www.etes.ucl.ac.be/BIEN/Files/Papers/2002Frankman.pdf
LHMU (2003) Confronting the Low Pay Crisis: A New Commitment to Fair Wages and Decent Work. Senate Poverty Inquiry submission. http://lhmu.org.au/submissions/lhmu_poverty_submission.pdf
Monboit, G. (2005 [a]) Bards of the powerful. http://www.guardian.co.uk/comment/story/0,,1510808,00.html
Monboit, G. (2005 [b]) Africa’s new best friends http://www.guardian.co.uk/comment/story/0,3604,1521387,00.html
Nattrass , N. (2004) “The Challenge for Basic Income Posed by Aids: Why an Incremental Approach is Inadequate in South Africa.” http://www.etes.ucl.ac.be/BIEN/Files/Papers/2004Nattrass.pdf
Ozanira da Silva e Silva, M. (2004) “From a Minimum Income to a Citizenship Income: the Brazilian Experiences.” http://www.etes.ucl.ac.be/BIEN/Files/Papers/2004Ozanira%20da%20Silva.pdf
Seventeen academics (2005) IR Changes
http://www.econ.usyd.edu.au/content.php?pageid=14896
Steering Committee for the Review of Government Service Provision (2005) Overcoming Indigenous Disadvantage. http://www.pc.gov.au/gsp/reports/indigenous/keyindicators2005/keyindicators2005.p df
Tomlinson (2005) Disability on Howard’s ‘Animal Farm.’ http://www.onlineopinion.com.au/view.asp?article=3491
Tomlinson (2005) Disability on Howard’s ‘Animal Farm.’ http://www.onlineopinion.com.au/view.asp?article=3491
Van Parijs, P. (2002) Does Basic Income Make Sense as a Worldwide Project. http://www.etes.ucl.ac.be/BIEN/Files/Papers/2002VanParijs.pdf

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Way down upon the Swany sliver

Written in Oct 2001

On the 19^th August Wayne Swan, Shadow Minister for forcing responsibilities from the State back on to low income earners shoulders, announced that an incoming Labor Government might have to cut family payments to those families who refused to cooperate with his family visitor programs. He said this would be particularly so if the children in the family were “at risk”. Jocelyn Newman, the relevant Government Minister, correctly pointed out that withholding funds from families in crises would do nothing for the children. It is a pity she did not consider this when she started her operation dole dairies and other enforcement regimes which she has mercilessly inflicted on unemployed people.

The Labor and Liberal Parties are suffering a surfeit of spokespersons concerned that anyone relying on government payments should be subjected to the full force of what they endearingly call “reciprocal obligations” or “mutual responsibility”. Such enforcement procedures have grown out of the 1947 work test provisions of the unemployment benefit program and Brian Howe’s obligations imposed on lone parents in the early 1990s. In recent times the various requirements imposed on recipients of social security have become increasingly defined and extended. They are part and parcel of globalised economic system which demands each State cutback its social wage by restrictive targeting, stigmatising delivery, reduced benefit levels, contracting out, compulsion of beneficiaries and simple denial of benefits though reduced hours of service. Whether it is Tony Blair’s “third way”, Bill Clinton’s “workfare”, New Zealand’s “social responsibility” or Australia’s own “mutual responsibility” they are remarkably consistent.

Swan’s adventure into cutting the family support payments is interesting because Labor, unlike the Liberals, has always waited to get into office before announcing that it intends to cut the social wage. Secondly, it is unusual because state governments not the Commonwealth have responsibility for “children at risk”.

Swan’s interest in families being visited has grown out of an American study which found that if mothers were visited by a trained health employee shortly after birth and in some cases for extended periods following the initial visit, the children did better at school and had less delinquency than the children of families not visited. Of course, this is exactly what used to happen in most places in Australia from the 1950s until the late 1980s. The visits were usually carried out by maternal and child health nurses. It was done because it was felt to be a good thing to do and new mothers, particularly those who were isolated, appreciated it. The cost of the service was not inconsiderable and latterly has been significantly reduced in many places.

Swan, in his Shadow Minister role had, in an address to the Evatt Foundation, on the 4^th May, signaled an incoming Labor Government would introduce a family visitor program. Back then, it was a voluntary program designed to assist families and children. The interesting question is what has occurred between the beginning of May and the middle of August to change the program into one which sets out to reduce the family allowance benefits to families who some visitor considers have “children at risk”.

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We should be turning back – not turning our backs

Paper presented at the Area Pacific Central Social Work Conference, Southport, 10/9/2003.

Australians have been subjected to increasing inequalities in income and wealth distribution during the last two decades due in large part to the general acceptance of economic fundamentalist ideas and our government’s enthusiasm to embrace deregulation and globalism. Michael Costello (2003), former Secretary of the Department of Industrial Relations, succinctly summed up the changes occurring in Australia when he wrote “If you were hard up, you used to get a hand-up from government. Now you get the back of its hand.”

Low paid workers were initially compensated for declining real income from employment by increases in the social wage under the Hawke/ Keating accord.

The advent of the Howard Government has delivered a significant assault upon the social wage. The universality of Medicare has been weakened, the low-income earners’ dental service abolished, and the social security safety-net has been undermined. Job insecurity has increased; the Howard Government is determined to gut the unfair dismissal legislation. Officially recognised unemployment levels have dropped to 6% but if underemployed, discouraged unemployed and disguised unemployed are taken into account the real level of unemployment is in the order of 12 to 18% of the working age population. Unemployment and the weakening of the social security safety net are real issues for low-income wage earners because those workers who find themselves in the bottom 30% of income distribution are the ones most likely to experience periodic unemployment interspersed with short stints in casualised, part-time and precarious employment.

The “economic miracle” of the Howard Government resulted in:

the worst housing affordability figures in 13 years (Commonwealth Bank and Australian Housing Industry 2003),
the meanest social security system since the early 1940s (in the 2001-2002 financial year this Government imposed 386,946 social security breaches on some of Australia’s poorest citizens (ACOSS 2002),
the captains of industry gaining disproportionate rewards – the ratio between Chief Executive Officers’ salaries and those of workers has risen from 3 times workers’ salaries in the 1970s to 74 times workers’ salaries – (Shields, O’Donnell and O’Brien 2003),
the sale of nationally owned assets,
increasingly arduous work “flexibility” arrangements,
draconian industrial relations regimes, and
constant attacks upon the dignity and rights of Indigenous Australians and asylum seekers.

But it is “a miracle”. Yes it is a miracle that we have let them get away with it.

The construction of the Australian income support system

The first Federal social security payments were the Age and Invalid Pensions introduced in 1909. Asian Australians were not paid social security until the 1940s. Child Endowment in 1942 was paid, even in respect of city dwelling Aboriginal children. Those living on missions or settlements were not paid Child Endowment. By the late 1960s Aboriginal people living in the cities and towns were paid social security and this was extended to include rural and remote Aborigines by the mid 1970s. Unemployment benefit is, in 2003, still not paid on many Aboriginal communities. Since 1977, rather than pay unemployment benefits a form of ‘work for the dole’, the Community Development Employment Program (CDEP), was instituted on some Indigenous communities (ATSIC News 2001, pp.6-36, Tomlinson 2003, Ch. 6).

Throughout most of the twentieth century the system of welfare income provision became more widespread, generous and comprehensive. But, with the exception of the 1947 consolidation of social security legislation, there was little effort made to conceive of it as a unified system of income support (Joint Committee of Public Accounts 1983). The first serious attempt to cut back on the comprehensive nature of income support began during the Hawke Labor Government in 1985, under Brian Howe’s reign as Minister for Social Security.

The light on the hill: The period from the very late 1960s until the early 1980s

During the late 1960s, after Menzies relinquished the Prime Ministership, Australia began to adopt more socially progressive attitudes towards people of colour, Indigenous people, migrants and women. The equal pay cases in respect to both women and Aborigines in 1967 resulted in at least formal equality with white men. However, because of the gender segregated nature of Australian industry (Game and Pringle 1983), income equality between men and women has yet to occur.

In 1972, the Whitlam Labor Government came to power with ideas of building a multicultural society, getting out of the Vietnam war, promoting gender equality, improving the welfare system, introducing a national health insurance, improving the lot of Indigenous Australians and promoting the idea that ordinary people (including those receiving welfare payments) had rights which could and should be enforced (Tomlinson 2003, Ch. 8).

The slow movement toward increasing the comprehensiveness of the social security umbrella began during the Second World War. It was driven by two notions firstly universalism and a later a desire not to exclude people on account of a social status. Between 1973 and 1978 sole parents who had custody of children were included under the social security umbrella. In the last years of the Fraser Liberal Government and the early years of the Hawke Labor Government, a system of financial support was introduced for low-income families who worked. This was the last major improvement in income security provision, although during the early Hawke Government, Don Grimes as Minister for Community Services, introduced substantial improvements in disability service delivery.

In the aftermath of the Second World War, the Labor leader Ben Chifley had set out in a series of speeches his optimistic vision for working class. This vision came to be widely known in Australia as Chifley’s ‘light on the hill’. The period, from the late 1960s until the early 1980s, was the closest Australia has come to being able to glimpse Ben Chifley’s ‘light on the hill’. By 1987, it was commonly suggested in social welfare circles that the light on the hill was still there it was just that we had become too mean to replace the globe. Throughout this period there was a contest between a welfare system based on noblesse oblige and a fully articulated system of rights. There seemed to be a feeling that even when people spoke about rights that they were driven by sense of “There but for the grace of God go I”. That is, in the minds of many politicians and bureaucrats, the rights were not securely anchored to international covenants and conventions or to a clear ideological commitment to ideologies predicated upon support for equality, mutuality and freedom or justice.

Howard’s welfare economics

The Howard Government has dedicated itself to installing what Kemsall (2002) terms a ‘market welfare state’ where the only fully functioning citizens are self-providers and the rest are marginalised or stigmatised. It totally rejects the idea of creating what Sztompka (1999) calls a ‘moral community’, based on trust, preferring to individualise risk and creating a ‘do it yourself welfare state’ (Klein & Millar cited in Page 1998 p.307). It has totally forsaken Beveridge’s desire to abolish the five giants of ‘squalor, want, ignorance, disease and idleness’ (Timmins, 1995) which inspired the 1947 consolidation of social security legislative provisions in Australia. The Howard Government has replaced the ideology of noblesse oblige with a compelled conservative compact: one that is becoming increasingly more prescriptive and proscriptive. Its breaching regime is reminiscent of the deserving and undeserving divide enshrined in the 1601 and 1834 Poor Laws (Tomlinson 2002 [a]).

It has imposed this strict regime on Australia’s poorest claiming to be inspired by the highest motives of facing The Challenge of Welfare Dependency in the 21^st.Century (Newman 1999) and imposing “tough love”. It is interesting to note that Henriques (1979), writing about the Elizabethan poor law administration discusses ‘secular Puritanism’ and notes:

The association of words which implied that the destitute, especially those who could be called ‘able bodied’, were destitute by their own fault quietened the conscience of those who suffered from or feared the growing cost of poor relief…the whole moral justification of the deterrent workhouse was that it would drive those able to work into finding employment (p. 23).

Of course, at its base the entire moral justification of economic fundamentalism and neo-liberalism rests on a similar mystification; sometime expressed in terms of the unseen hand guiding the market, sometimes as market equilibrium, sometimes as efficiency, sometimes as survival of the fittest, sometimes as the just reward of high intellect or hard work but always expressed most shrilly when denouncing those forced to rely upon welfare benefits. Such people are presented as feckless, sloughful and licentious. The Government declares that social security recipients who are breached are ‘after all only getting their just deserts’.

In an affluent country a threadbare safety net is a crime against humanity. Inadequate social protection invariably disadvantages many people, but more importantly it most disadvantages the most disadvantaged. (Standing 2002, 2001, Boston and St John 1998).

Income support schemes

Before we can examine Basic Income, it is necessary to outline the advantages and disadvantages of other existing or proposed systems of income support. Other possible forms of income support are

Social Insurance,
Government run Superannuation for all workers,
Private Superannuation,
Other privatised solutions,
Job Guarantee,
Welfare Assistance,
Social Security,
Participation Income,
Guaranteed Minimum Income,
Negative Income Tax, and
Tax Credits

Social Insurance

Social Insurance is a form of communal protection controlled by and often subsidised by the Government. It is common throughout Europe. This form of income support does not assist those without a substantial employment history. Social Insurance comes in several forms including unemployment, disability and sickness insurance. It is usually paid to an unemployed worker at a set percentage of his/her previous rate of pay. In recent years the period of time for which it is paid has been increasingly limited. In France workers under the age of 25 years have been excluded from payment (Farvaque and Salais 2002). In many European countries, the social insurance system is coming under considerable financial pressure due to increased unemployment levels. The advantage of social insurance for those who receive it is that their income is maintained at close to their previous “at-work” income and they perceive the payment as a right rather than as a charity.

Government run Superannuation for all workers

Government run superannuation schemes for all workers are a form of Social Insurance. Such schemes only assist those with considerable employment histories and, even then, only following retirement on account of age or disablement. In recent years such schemes have also come under considerable financial pressure. In France, the Conservative Government legislated in mid 2003 to increase the number of years government employees have to work to get the full payment. The French Government is also engaged upon a campaign to lower retired non-government workers’ benefits. The advantage of this form of retirement income is that it is far more secure than private superannuation.

Private Superannuation

In Australia, private superannuation is the only form of superannuation available to non-government workers. The amount paid is proportional to contributions from workers’ salaries (paid by workers and by their employers) or private investments made during the workers’ employment. However the amount available for distribution is affected by how wise were the investment decisions made by the managers of the superannuation funds. In recent years, in Australia, those workers not in defined benefit superannuation funds have found that instead of accumulating assets their funds have made losses. Higher paid employees gain proportionally more from such superannuation schemes because of the preferential tax treatment the rich receive compared with the treatment meted out to lower paid workers. The inequalities experienced during working lives are extended into the post-working phase of people’s lives. All private superannuation funds are at some degree of risk. The Australian Government Superannuation watchdog recently warned that at least 10% of funds are at considerable risk (Hayes 2002 p.1). The only advantage of such schemes, accruing to individuals, is that they perceive whatever payments they receive as theirs by right of their prior contributions.

The Job Guarantee

A job guarantee can only exist when a government is prepared to commit itself to becoming an employer of last resort. In the last thirty years there have been two forms of limited job guarantee provided by Australian governments. The first in the 1970s, under the Whitlam Labor Government, was the Regional Employment Development Scheme, colloquially named the Red Scheme and the second was the job offer, after 18 months unemployment, under the Keating Labor’s Working Nation package in the mid 1990s. The Centre for Full Employment and Equity (at the University of Newcastle) is promoting the most detailed current Australian proposal for a job guarantee (Mitchell, Cowling and Watts 2003, see also Watts 2002).

Those who are available and capable of doing the work on offer under the job guarantee will be assisted by such a scheme. But the reasons which prevent those who cannot find suitable child care, those who have a disability and those who are discouraged from seeking work under the present employment regime will be prevented from taking up a job under the job guarantee unless such issues are addressed by the architects of the job guarantee or potential employers.

Welfare assistance

Welfare assistance can never provide a guarantee of secure income. It has not had other than a supplementary role in income support since the late 1940s in Australia. It is riddled with all the problems that any highly discretionary handout system is imbued, such as: inadequate coverage of the people affected, inconsistent determinations, stigma and discrimination (Standing 2001). More and more Australians have to call upon welfare relief agencies for assistance as employment becomes more precarious and the system of social security becomes meaner (as a result of increasingly arduous eligibility requirements and a more rigorous social security breaching regime).

Social Security

The greater the universality in any system of Social Security the nearer it comes to being an income guarantee. For instance, all long-term residents in Australia whose age exceeds the specified age limits are entitled to apply for the age pension. The age limits for women are gradually being phased in to equal those of men. If their income and assets are below a specified amount they will receive payment. This is a Guaranteed Minimum Income for older Australian residents. Current age limits are 65 years for men and 62.5 years for women. Yet it needs to be remembered that the average age of death for Indigenous Australian men is 56 years and 62 years for women. This compares with 76 years for non-Indigenous men and 83 years for non-Indigenous women.

The system of social security that existed at a national level in Australia, starting with age and disability pension legislation in 1908 has been paid to specific groups of people. With the exception of blind pensioners and child endowment, social security payments have been means or asset (sometimes both) tested. Thus the Australian social security system is categorical and selective rather than universal. The people chosen to be included in the categories to be paid reflect the positive light in which the needs of such people are held by the powerful. The Commonwealth Government paid widows with children from the mid-1940s but most unwed mothers were not paid social security until 1973. Now the Commonwealth assists all lone parents who meet the specified requirements.

A major problem which social security systems create is that groups who are not highly valued by the powerful can very easily be excluded by the government of the day from payment; for example 16-18 year old unemployed people. Another problem that such systems create is that additional obligations can be imposed upon recipients on the passing whim of a prime minister. The current preoccupation of the Howard Government with so-called “mutual obligation” will be discussed in the section dealing with participation income. The government is very powerfully placed to brand groups of people it does not want to pay as “greedy” rather than “needy” or as “lazy dole bludgers who are not pulling their weight” and “job snobs”(Abbott 1999) or, more gently, as “not making a sufficient contribution to the society” (Howard 2000). The distinction between those eligible for payment, “the worthy”, and those who are deemed ineligible, “the unworthy”, has been an ever present feature of welfare relief and social security since the earliest days of colonial Australia.

Whereas social insurance payments are largely paid for by the contributions of workers, social security in Australia is paid for from general taxation. Complexity, stigma, system failure and recipients’ lack of sophisticated knowledge about bureaucracies results in many eligible people not receiving their proper entitlements (Boston and St John 1998, Standing 2001 pp. 13-14).

Participation income

Participation Income is very widespread in the present Australian system of income support. Essentially if you don’t participate then you are refused assistance. Participation income is a euphemism for the chance to impose an obligation on people who receive government or government-subsidised payments coupled with the paternalistic belief that this will assist the recipient to improve their life. Many researchers have described the philosophical underpinnings of participation income as unethical (Kinnear 2000, Goodin 2001, Hammer 2002, Tomlinson 2002[a], [b]) because the only choice offered to welfare recipients is comply or starve. The practical outcomes for those who are breached are socially disastrous (ACOSS 2003, 2002, 2001, Schooneveldt 2002, Tomlinson 2002 [a], [b], Ziguras, Dufty and Considine 2003). Evidence is emerging from the United States which suggests that having one’s social security reduced or removed creates increased health difficulties for children of beneficiaries who are breached (Cook, Frank, Berkowitz, Black, Casey, Cutts, Meyers, Zaldivar, Skalicky, Levenson and Heeren 2002).

Professor Robert Goodin (2001 p.198) makes the point that:

If we seriously believe that work is good for you and that it is the state’s legitimate role to force you to do it, then we would have no grounds for confining our paternalism to the poor. Paternalistically speaking, it would be equally important to make the rich work too.

The Brotherhood of St Laurence and St Vincent de Paul report entitled “Much Obliged” links the imposition of “participation income” strategies back to the days of Labor Minister Brian Howe’s investigation of social security headed by Professor Bettina Cass (Ziguras, Dufty and Considine 2003). In the late 1980s Cass, in a number of departmental publications, recommended that Australia adopt what she termed an “active labour market strategy”. The history of “participation income” is much longer than this. When, in the 1940s, Unemployment Benefit was introduced as part of the social welfare safety-net, a work test requirement had to be fulfilled prior to the grant of benefit. During the 1930s any unemployment relief provided by government-enforced obligations upon the unemployed to do civil works in return for sustenance – hence the payment was referred to as “the susso”. Hugh Stretton (1996) in an aptly entitled speech “From the Poor Laws to poor laws”, given at the Brotherhood of St Laurence, linked such policies back to the English poor Law of 1834. I had pointed to similar motivations as contributing to the enactment of the 1601 Poor Law in England. But Joel Handler (2002) notes such values were present in the concern expressed about the possibility that welfare relief provided might assist “sturdy beggars” enshrined in the 1348 Labourers Act. “ Mutual obligation”, “participation income” and the “deserving/undeserving” dichotomy have a very long history indeed.

The notion of active labour market policy is equally disingenuous. Who could possibly favour being passive if one could be active? The word ‘active’ seems virile and strong, whereas its opposite, ‘passive’, suggests laziness, and lack of initiative. In fact, usually active policy is little more than having the state telling people what they must do in order to receive some moderate state benefit, directing them to training or job schemes. By contrast, the much derided passive policy entails giving funds to individuals or families with minimal conditions, leaving them to make choices about how to conduct their lives and allocate resources. It could more fairly be described as liberating (Standing 2001 p. 14 [italics in original]).

In Europe, whether it is expressed as the need for contribution on the part of unemployed Germans (Liebig and Mau 2002), the unearned obtaining of benefit in Belgium (Vanderborght 2002), the need for social ‘inclusion’ in Britain (Atkinson 2002), or the French obsession with ‘social insertion’ (Farvaque and Salais 2002) there is a remarkably similar paternalistic tone combined with a sense of blaming the person who is without a job. In the United States the current jargon spread by cheerleader Laurence Mead is “tough love” and “workfare not welfare”(Mead 1986, 1997). There is little recognition that workfare jobs entrench low paid employment by displacing full-time, above poverty-line jobs (Briggs and Buchanan 2000). “Work for the dole” and Community Development Employment Program (CDEP) jobs in Australia have a similar effect of entrenching poverty (Tomlinson 2003 Chapters 4 and 6). The CDEP has operated in Indigenous communities since the late 1970s. The bulk of Indigenous “jobs” on Indigenous communities are CDEP “jobs” – they are paid at about the rate of unemployment benefits and only the most misguided would claim that such “jobs” have abolished poverty in Indigenous Australia.

The remarkable thing about the participation income debate is that it can be tied to Tony Blair’s “third way”, George Bush’s “time limited welfare” and John Howard’s “Mutual Obligation” or “a job is the best form of welfare”. Such pundits are oblivious to the life experiences of low paid workers’ revealed in the Australian Liquor Hospitality and Miscellaneous Workers Union’s (LHMU) submission to the Senate Inquiry into Poverty (2003). There is very little recognition of the demoralisation that follows in the wake of working full-time and still being in poverty, or only being able to gain casualised, poorly renumerated, precarious employment.

The impact of enforcing obligations upon unemployed people, insufficiently employed people, lone parents and people with disabilities is the same whether it is expressed in the considered tones of Patrick McClure’s (2000) Report, or Minister Amanda Vanstone’s (2003) strident suggestion that when clients receive social security assistance without compelled obligations this has the effect “of killing them softly”, Jocelyn Newman (1999) “welfare dependency” or Professor Atkinson’s (2002) gloating that the British Prime Minister Blair chose his suggested participation income over Van Parijs’ (1992) Basic Income.

Whether it is Howard’s (2000) “social coalition”, Abbott’s (1999) “job snobs”, Minister Brough’s 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 hysterical denunciation of ‘welfare dependency’ and particularly intergenerational ‘welfare dependency’ is based on a myth. There have been no intergenerational panel studies of long-term social security recipients in Australia. Recent overseas long-term panel studies do not support such assertions (Goodin, Headey, Muffels and Dirven 1999, pp.260-261).

Such a view is supported by Cook, Dodd and Mitchell (2001 p.24) when they say:

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.

The advantages which proponents of a participation income claim are that it assists people to remain job ready, involves them in the community by assisting them to give something back to the society and that it cuts out fraudulent claims. There is often a subsidiary claim that because it does all the above it legitimises the payment of the benefit in the eye of the public (Howard 2000, 1999). Other researchers (Standing 2002, Handler 2002, Tomlinson 2003) refute such claims. They argue that there is far less support for such services now than at any other period of our post World War II period, as a result of the assault on the legitimacy of welfare services and social security waged ceaselessly by economic fundamentalist and the subsequent divisiveness within the ranks of the working class which has followed in its wake. The Brotherhood of St Laurence and St Vincent de Paul 2003 report entitled “Much Obliged” asserts that people who become long term unemployed have so much of their time taken up just meeting the imposed obligations that they don’t have time to find work:

Currently, in order to receive Newstart Allowance (NSA), job seekers must:

actively look for suitable work
register with at least one Job Network member
accept suitable work offers
attend all job interviews
attend Centrelink offices when requested to do so
agree to attend approved training courses or programs
not leave a job, training course or program without sufficient reason
correctly advise Centrelink of any income earned
enter into and comply with a Preparing for Work Agreement
lodge fortnightly continuation forms
apply for up to ten jobs per fortnight
participate in a ‘mutual obligation’ activity after a certain amount of time on benefits
have certificates signed by employers approached about jobs , if required
complete a Job Seeker Diary with details of job search efforts
not leave their current residence to move to an area with a higher rate of unemployment (cited in Ziguras, Dufty and Considine 2003 p.10)

The report concludes the mutual obligation regime “is failing the most disadvantaged job seekers. Overall the system operates…not as ‘welfare to work’ but ‘welfare as work’ (p.43).

Guaranteed Minimum Income, Negative Income Tax and Tax Credits

A Guaranteed Minimum Income, if it is available to all permanent residents, is very much like a Basic Income except for a requirement to establish that an individual’s income and or assets are below the amount that is allowed. In 1943, Lady Rhys-Williams was the first English writer to provide book length elaboration of the idea of a guaranteed minimum income. The purpose of such an income guarantee was in Lady Rhys-Williams’ (1965) words “to provide a ‘floor’ below which he (or she) cannot fall, but ought not to have a ceiling beyond which he (or she) can rise (p. 163)”.

The conservative economist Milton Friedman also claims he began thinking about the benefits of a Negative Income Tax in 1943, but he did not publish his ideas on that subject until a year after other United States academics had raised the idea in 1961. The major difference between a negative income tax and a guaranteed minimum income is that the negative income tax is paid as a tax transfer in inverse proportion to a person’s other income; whereas a guarantee minimum income is a generalised form of income support paid as a welfare benefit in inverse proportion to one’s other income. The earliest Australian proposal to introduce a negative income tax was that of the Priorities Review Staff (1975).

A Tax Credit is a form of negative income tax paid through the tax system.

The aim of a guaranteed minimum income, negative income tax and tax credits is essentially the same. That is to provide a minimum income guarantee to those whose incomes fall below a specified amount. All these generalised forms of income support differ, in theory, from categorical payments in at least one important regard. They make no presumption about social eligibility requirements. Yet when income guarantee policies are formulated residues from categorical social security policies are frequently present. When Professor Ronald Henderson, Head of the Poverty Inquiry, Henderson (1975) put forward his guaranteed minimum income he wanted a two-tiered structure, using the family as the unit of income, which distinguished between those in receipt of benefits or pensions and those who did not then qualify. Other guaranteed minimum income proposals have used the household as the unit for payment (Edwards 1984). Such proposals ignored the inequities present in intra-family and intra-household transfers (Asprey 1975). The Tax Credit schemes operating in the United States and Britain make payments only to those in low paid work.

What is a Basic Income?

A full Basic Income is a universal payment paid to each permanent resident, as an individual, irrespective of their personal or social circumstances.

The idea of a universal Basic Income is not new. The first fully elaborated book length Basic Income proposal, in the English language, was written by Dennis Milner in 1920. Walter Van Trier (1995) provides a comprehensive account of the history of that proposal and competing ideas for improving the system of income support.

A Basic Income means the richest and the poorest Australian permanent resident would be paid the same amount each fortnight. Men and women, city people and country people, long term permanent residents and permanent residents who have recently arrived, Indigenous and non-Indigenous people, citizens and non-citizens, employed and unemployed, those who are able bodied and those with disabilities, those who live alone and those who live with others would be paid an identical amount.

In the short-term, because of the way we regard the income support needs of children, it may be necessary to restrict the full Basic Income to those over the age of 18 years. Children living at home with their parents would be paid at half the adult rate. Children living away from home, for whatever reason, would be paid the adult rate. No distinction would be made between the children of the rich at private boarding schools and the child living with her grandparents or neighbours because of problems with parents. Young people who are under the age of 18 years, but are living as a couple, whether residing in a parent’s home or living independently of their families, would each be entitled to an adult rate of Basic Income. Once Australians become used to this system of income support the distinction between child and adult rate could be abolished.

In order to ensure that no-one supported by the present social security system is disadvantaged by the change from social security to Basic Income, the rate of the Basic Income would need to be at the single (living alone) age pension rate. This rate would be maintained as at present by indexation with full-time average weekly earnings.

Most existing forms of government-provided social security would be abolished and replaced by the Basic Income. Payments made to meet specific needs, such as allowances paid in respect of caring for a child with a disability, would not be abolished because they are designed to compensate for a specific disadvantage or the extra costs associated with experiencing a disability or both.

A Basic Income is paid to each permanent resident at a flat rate irrespective of assets and means. It is a truly universal payment. It has no social obligations attaching to it. This is why it is sometimes termed a ‘citizens income’ program.

Conclusion

The increasingly casualised and precarious nature of employment means that it alone cannot be relied upon as a way to ensure an income above the poverty line. The increasingly targeted social security system with expanded breaching and imposed obligations has removed any security from the social welfare safety net. Private provision cannot ensure income security for the bulk of the population. A job guarantee cannot, on its own, ensure that all are lifted beyond poverty. Only a fully universal Basic Income is capable of ensuring that all permanent residents are provided with an income above the poverty line.

For further research on “mutual obligation check out the Basic Income Guarantee Australia web site at: http://www.basicincome.qut.edu.au/index.jsp

Please note that the BIEN, Basic Income European Network website can be found at:
http://www.ees.ucl.ac.be/BIENbackup/bien.html
or
http://www.bien.be/Archive/Congress/Geneva2002.htm

All of the 2002 BIEN Geneva Conference papers can be found at this website.

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More Info

What’s wrong with the law as it relates to poor people?

The essential problems relate to:
the powerful desire to protect their perks
the balance of power,
the way discretion is used.

circa 2004

More Info

When repression and injustice become orthodoxy then resistance becomes duty.

A response to – “Five degrees of separation: Why standards will not ensure quality in disability services”.

Written late 1990s. Not published

Michael Bleasdale and Rosemary Kayess have correctly pointed to the reliance of the States, Territories and the Commonwealth on Standards as a tool for improving disability services: and that governments have moved away from a rights focus to a bureaucratised delivery system. The passion for disability rights which was the hallmark of Don Grimes (the Minister) and Netta Burns (his Principal Private Secretary) and the people who worked with them to introduce the Commonwealth 1986 Disability Services legislation has receded.

However accurately Bleasdale and Kayess have described the separation of Standards from rights inspired outcomes it seems to me that the standards issue is not the most important one. Before I explain why I think that let’s take a Cook’s Tour of the process of government.

Governments respond to issues which the party in power sees as important to address: for example, Family Trusts and tax avoidance by the super rich generally are not seen as pressing issues whereas one young unemployed person failing to attend a Centrelink Office to fill out a form soon finds out that the entire weight of government is available to force compliance. This is the policy quaintly named ‘mutual obligation’.

The standard response of Government to an issue which they see as important to address: is to decide if the activity is to be promoted or repressed.

Either way the issue being addressed becomes conceived of as a problem: there is either too little of the approved activity, for instance not enough leaders of industry are involving themselves in St. V de P or too many single mums are luxuriating in ‘welfare dependency’.

Once the issue has become a problem for government then government must do something:
legislate for or against the activity,
or regulate the activity.
If it can’t legislate it might try leaning on bureaucrats: Fraser and Viner made it harder for the unemployed without changing the legislation simply by stepping up their ‘dole bludger’ rhetoric.
Howard and Newman have managed to more than triple the number of unemployed people who have been breached in the last 3 years without substantial amendments to the legislation.
Howard and Newman too, have just increased the intensity of their ‘dependency’ rhetoric and relied on those who are desperate to oblige in Centrelink and the Jobs Network to cut people off payment.
So when it comes to the Disability area the question which needs to be looked at is: What is the issue being addressed by GOVERNMENT?

In 1986 the issues which Don Grimes and Netta Burns were addressing was firstly improving services to people with disabilities and secondly enshrining the rights of people with disabilities in legislation . The Labor Government did this directly by legislating, regulating and setting out guidelines for the behaviour of service providers and agencies. It did it indirectly by funding advocacy agencies.

One and a half decades later the legislation has not changed much, the regulations have not changed much and the Standards (guidelines) have not changed much. But there has been considerable change. Many of the super agencies are no longer capable of totally dominating the lives of the people they purport to serve. Brokerage and other forms of single delivery options exist and some advocacy organisations remain. Group Self Advocacy as a concept is alive and well. The tyranny of the sheltered workshop has been replaced for some by the tyranny of adjusting to the demands of a private employer whereas others who have been displaced from sheltered employment are entirely excluded from the workplace.

The inmates have become client then customer then the raw product of the disability service industry. Whatever their status someone always made/makes a quid out of their impairment.

And Government was there too; making savings, ensuring accountability and enforcing compliance with the legislation, with the regulations, and with the standards of the disability service legislation. If this was not enough there are all the requirements of the multitude of Tax Acts, State workplace legislation, the Federal audit provisions. To make it a bit more complicated the various levels of government often insist on different reporting periods and different statistics being kept on clients and services.

On top of this there is competitive tendering, under-funding (in the guise of accountability) and massive pressure not to criticise the Minister, the Government, the Department, or anyone else who might be friends of the Minister or the Government. All this has drawn many service agencies and some advocacy agencies into a corporatist structure in fine German tradition. It is little wonder that the jackboots of some bureaucrats click when ever the Minister is displeased.

Michael Bleasdale and Rosemary Kayess are correct. Governments have moved a long way from focussing on the rights of people with disabilities to be treated equitably. Governments have moved a long way from focussing on delivering decent services to people with disabilities. The plethora of regulations, standards, service agreement, contracts, tender processes, secrecy provisions, and all the rest are designed to make the third sector (the non-for profit sector) a pale image of the companies against whom they now compete. The inordinate involvement of church agencies in the Job Network, aged and disability services is designed to displace the symbol of worship from God to mammon.

The issue which the Federal Government is currently addressing is no longer the rights of people with disabilities but rather it is compulsion. The Federal Government initiated, funded and dictated McClure Report on “Welfare Reform” proposed that people with disabilities should be compelled to participate. The Government is concerned to compel disability service agencies to compete among themselves to a point where they are often exploiting their workforce, their volunteers and their clients. But above all the Government is determined to compel the agencies to be silent. Government wants the issue of disability disappeared. It wants people with disability silenced.

This silencing of the agencies is an attack on the civil rights of people with a disability. Now, at least as much as ever before, there is the need for people with disabilities to speak out, to refuse to be pushed out of electoral sight. The present Federal Government is not going fund advocacy agencies to speak out against the daily injustices inflicted on the decarcerated ex-inmates of mental hospitals trying to survive in run down boarding houses or the inmates (with intellectual disabilities) incarcertated in overcrowded prisons.

It’s time to insist on a new form of mutual obligation which recognises that when an unjust system of compliance is implemented each of us has a duty to resist. There is a need for an independent disability monitoring and advocacy service explicitly designed to enforce decent service provision for all people with disabilities. Such an agency would have to be provided with secure funding for at least 5 and hopefully 10 years or governments would quickly tire of its complaints against the system and close it down. Such an agency is only a real possibility if sufficient political momentum can be generated by people with disabilities, the disability industry and citizens who desire to live in a socially just society.

In the meantime whilst the existing legislation, regulations and standards have some utility in promoting the wellbeing of people with disabilities they are an inadequate response. They amount to little more than governments’ efforts to defuse disability as an electoral issue. They are the smokescreen which hides the failure of all levels of government to build a society which enshrines as a central feature the equitable treatment of all people with a disability.

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When will the BIG wheel turn? Basic Income in Australia.

Paper presented at the Basic Income Earth Network Congress Lisbon September 2017
Abstract

In this paper I shall attempt to describe the Australian system of “social security/ social insecurity” in relation to universal income guarantees and look at likely outcomes in the near future. Drawing on the Australian experience, I shall argue that there is a pressing need to narrow the concept of universal basic income to a specific form which no longer includes policies which aim to replace elaborate welfare states with ones which provide a minimalist income support base. Such limiting policies aim to reduce the totality of social policies which are needed to complement an income guarantee in an advanced social state.

A potted history

Australia looked seriously at introducing a guaranteed minimum income in 1975, but the Governor General dismissed the Labor Government before it could act on such a widespread reform of our means-tested categorical income support system.

Following that period of intense activity there have been several attempts in my country to revive the idea of introducing more generalised income guarantees but all have failed. Since 2002 a group of us has been active in promoting the idea of a universal basic income. We formed the Basic Income Guarantee Australia (BIGA) which has been a BIEN affiliate since 2008.

In more recent times the basic income debate in Australia has heated up, and in 2016:

A group of mainly computer entrepreneurs had a couple of meetings in Sydney, involving 50 people, attempting to promote the concept of universal income to place an income floor under software developers and others engaged in the gig economy.
In midyear the New South Wales Fabians held a well-attended seminar on the topic of basic income addressed by two academics and a leading trade unionist.
The Victorian Fabians held a number of seminars on the future of work and I was invited to address one of them on the issue of universal basic incomes in November.
The Australian chapter of the Royal Society of the Arts, following the lead of their British counterpart, held a seminar in Brisbane in late 2016 at which Jenni Mays and Greg Marston from BIGA spoke.
There were two half hour programs broadcast on the Australian Broadcasting Commission’s, Radio National, which investigated basic income.
Tim Dunlop produced a book entitled Why the Future is Workless which devoted considerable space to basic income.
Earlier in 2016 Jenni Mays, Greg Marston and myself had edited a Palgrave Macmillian collection entitled Basic Income in Australia and New Zealand: Perspectives from the Neoliberal Frontier. This book brought together 10 academics to look at aspects of basic income in the antipodes. Guy Standing wrote the preface.
Don Arthur from the Australian Federal Parliamentary Library produced a lengthy paper discussing the pros and cons of basic income in November.
Also in November Greg Marston, Keith Rankin (New Zealand), Louise Tarrant and Peter Martin joined a panel discussion about basic income at the Australian Council of Social Service National Conference in Sydney.
As the year drew to a close journalist Mike Seccombe wrote an equivocating piece on basic income and the future shortage of jobs quoting some unnamed “very credible welfare policy expert” saying

For one thing, it would require a massive restructuring of the tax and welfare system, involving punitively high marginal rates on some people to fund the payments. For another, the idea of giving people money for nothing would not go well with people who still had jobs.

He went on to say that in Australia:

“with one of the world’s best-targeted welfare systems, … (the basic income)… is widely seen by experts as an inferior safety net….(the Shadow Assistant Treasurer) … calls the concept ‘un-Australian’ for that reason.”

In mid-December, Emeritus Professor of Economics, Frank Stilwell, from the University of Sydney weighed in with a paper for the Greens political party arguing for a universal basic income. His was one of ten papers discussing universal basic income and a shorter working week. Others arguing the case for basic income included: Elsie Klein, Ben Spies-Butcher, Clare Ozich, Eva Cox, Jon Altman and Greg Marston.
This was followed at the end of December by a scathing contribution by an economist Associate Professor Gigi Foster from the School of Business at the University of New South Wales suggesting that a universal basic income was a dangerous idea.

This paper will review the likelihood of Australia introducing a basic income in the near future and survey some of the probable machinations along the way. Rather than continuing to document the ongoing ups and downs of the basic income debate in 2017 I will concentrate upon the 2016 contributions as they seem to contain the breadth of arguments which has been present in Australia for most of this century.

Introduction

Throughout my teens and early adult life, conservative governments held sway. By the time I was 25 I began to despair that I would live to see a progressive government elected in Australia. A relative who had lived through the Depression, the Second World War and had seen a series of Labor governments prior to the conservatives’ ascendency impressed me. He kept assuring me that “the big wheel turns”. By which he meant that the political complexion of governments eventually changes.

Many times in recent years I have encountered plays on words about “BIG” used as a shorthand version of a Basic Income Guarantee. Hence the title of this paper: “When will the BIG wheel turn?”

A brief history of income guarantees and the rise of neoliberalism

The road to a universal basic income has been a long one, but in recent years I have come to believe it will soon end in success:

There were the early European thinkers of the 15^th century (Cunliffe and Erreygers (2004).
It is 500 years since Thomas More’s Utopia.
Thomas Paine published his 1797 pamphlet “Agrarian Justice”.
Denis Milner (1920) and his fellow Quakers – his wife Mabel and Bertram Pickard in the period 1918-1920 – fought the good fight with their National Bonus Scheme in England.
Then in 1943, Lady Rhys Williams’ book Something to Look Forward to was published.
President Nixon’s attempted to introduce a negative income tax in the United States in 1970s (Moynihan 1973).
The early 1970s abounded with examples of guaranteed minimum income pilot studies and or commissions in Canada, Australia, New Zealand and the United States.

By the end of the 1970s that flurry of activity died away only to be replaced in the English speaking world with a newfound enthusiasm for pre-Keynesian economics. Many were dazzled by:

supply-side economics,
Laffer curves,
trickle down distribution,
rising tides lifting all boats,
level playing fields
monetarism,
neo-liberal economics, which in Australia we were silly enough to call “economic rationalism”,
the infallibility of market mechanisms, and so forth,
some even claimed to have seen the invisible hand of the market.

Commensurate with excessive belief in all things economic came:

downward envy: a belief that the poor were undeservedly getting things that their more affluent neighbours weren’t (Tomlinson 1999),
a “greed is good” mentality,
“work for the dole” and other workfare programs,
state imposed obligations on social security recipients,
a retreat from universal provision, and a meanness of spirit worthy of the charity system of the Elizabethan poor laws.

The essence of neoliberal economic thought involves a rejection of government intervention, demands for low levels of taxation, promotion of untrammelled market forces and private enterprise, self-provision coupled with minimalist public welfare assistance. The only roles envisaged for the state is to diminish the power of organised labour and to constrain the disenchanted. Any welfare assistance that is provided is enmeshed with obligations to be job ready, take whatever work is on offer (at whatever rate), and in the absence of employment to force the unemployed to work without pay for enterprises willing to engage them. The desire of neoliberal ideologues is to have a highly deregulated mode of production but a highly regulated mode of distribution.

Ideologies and Income Guarantees

The ideological underpinnings of supporters of a universal basic income are not unidimensional. If one were to include all supporters of introducing generalised income guarantees, then it would be a very broad church indeed. It would include supporters of Friedrich Hayek, Milton Friedman and all those who want to replace the welfare state with a minimalist income support base. The Atkinsons and Casses of the world who argue for a participation income would be represented. It would extend to those like Phillipe van Parijs who see a basic income as a capitalist road to communism. And there would be many people in between these opposed and opposing ideological positions.

There may have been a time when it was in the interests of those who wanted to see the introduction of non-presumptuous income support systems (Goodin 1992) to claim that people from a wide variety of ideological positions supported the concept of general income guarantees. But those times have past. We need to clearly state our exact aims.

The general picture in Australia: first the critics

As in other disciplines it is not possible to separate the struggles about income guarantees from other social welfare policies, industrial adjudications, political persuasions of the major parties, general economic policy and so forth. In Australia those who argue for the introduction of an above-the-poverty-line basic income have had to confront a neoliberal gale which emerged in the mid-1970s, gained in strength during the next 8 years of conservative Coalition rule, before solidifying under Labor’s governance from 1983-1996. The Howard Coalition Government, in place from then until 2007, prided itself on being socially conservative and ardently economically neoliberal. It was eventually dislodged by Labor’s Kevin Rudd who sold himself to the voters as a safe “economic” manager. Rudd, with the exception of some classical Keynesian pump-priming to ward off recession during the global financial crisis, did little to rock the neoliberal boat. In 2013, Labor was eventually booted out of office by an arch-conservative neoliberal Tony Abbott. His treasurer warmed to the austerity message sweeping Europe and much of the world by constantly reiterating his “The Age of Entitlement is over” message. Even when Abbott made such a mess of governing that he was replaced, in September 2015, by a very rich ex-merchant banker little changed. The Coalition Government has since essentially operated along the Abbott neoliberal austerity line.

In 2017, Labor and Coalition parties are in lockstep in relation to Indigenous policies, asylum seekers arriving by boat, foreign policy, anti-terror policies and defence more generally, and general economic policy. Major points of disjunction between the two are tax policies and health, disability, education and social services. The Coalition is desperately attempting to get business tax cuts worth $50 billion, in the forward estimates, through the Parliament. Labor and the Greens oppose these business tax cuts. Labor and the Greens are fighting cuts to Medicare, education, the National Disability Insurance Scheme, and some social services cuts advocated by the Coalition. This provides the back drop against which we can assess the prospects of basic income becoming a reality in Australia in the near future.

Where is the income guarantee debate in Australia going in the light of 2016 discussions? Again first the critics.

Like many opposed to universal basic incomes, the first hoary chestnut Foster raises is “can we afford it?” before going on to claim that a basic income of $20,000 per year would double the “Cost” of the present welfare system. To come to this position, she does not adequately take account of the tax clawback from the well-off which is part and parcel of every proposal I have ever seen suggested in Australia. She then goes on to acknowledge that economic editor of The Age (1), Peter Martin, suggests that abolishing the tax free threshold for all tax payers would pay for the basic income. Foster counters that there are complexities in simply abolishing the tax free threshold before claiming “but one thing is sure: the income tax bill of most if not all earners would have to rise in order to fund a UBI.” She initially fails to acknowledge that as well as paying tax people would receive an extra $20,000 basic income from the government under her proposal.

Foster then examines what would happen to someone on $80,000 per annum and finds they would end up being ahead if the tax free threshold were to be abolished and they got a basic income of $20,000. She claims that therefore there would be insufficient money to pay the basic income. She does not allow for different rates of tax on earned income or other possible changes to goods and services or other taxes.

Her next problem is that she claims not to have “seen a reliable cost estimate for Australia of the disincentivising effects of the claw-back of social security and welfare payments.” She scoffs at the suggestion:
that the way our present system compensates people in insecure work is inadequate. Yet a social support model like a UBI that makes it even easier for people to be precariously attached to the workplace carries the implication that the workplace is not good for them.

Before going on to warn:
People receiving unconditional handouts every year may feel less pressure to get and keep a job. Secondly, if the UBI were funded by the abolition of the tax-free threshold and/or increases to income tax rates, then people would be more strongly penalised for working additional hours and might hence work less.

For her piece de resistance she offers this insight:
A proposal to throw money at people, while wrapping that proposal in the flags of “equality” and “basic rights”, can be argued to be the lazy man’s face-saving response to the complex, entrenched problems of poverty. The poor arguably lack access and/or skills as much as or more than they lack money.
What’s more, the present Australian social security and welfare system can be viewed as a UBI scheme with exceptions for people who don’t need it.

She ignores Robert Goodin and Julian Le Grand’s 1987 Not only the Poor analysis which demonstrated that state provided universal income provision is far more effective in abolishing poverty than categorical systems because no-one misses out and there is far greater public support for such a system. We will return to Foster’s analysis after looking at what is actually happening in the Australian income maintenance system.

The minister responsible for income support for unemployed people Christian Porter recently said in a National Press Club Address that the fact that people were finding it impossible to subsist on the social security unemployment payment meant that the system is “working okay because the encouragement is there to move off those payments quickly” cited in the Editorial of The Saturday Paper, p.14, 24-30 September 2016. Peter Martin notes that in November 2016, “Social Services Minister Christian Porter revealed …that in the past year 3000 Newstart recipients had turned down offers of employment – that’s 3000, out of roughly half a million.” Presumably the entire 3,000 unemployed people were breached. Martin points out that whilst a basic income of $12,000 per year is “not enough to live on, but a fall-back that would enable hard-up jobseekers to turn down potentially dangerous or illegal jobs such as prostitution.”

Racism is present in the mindset of a majority of Australians. The British colonies were established by way of invasion and dispossession of the Indigenous inhabitants. The first Act passed in the Federal Parliament was The Immigration Restriction Act 1901 which limited “coloured” immigration to Australia and formed the basis of the White Australia policy which sought to exclude all non-Europeans from Australia. Asian residents were not paid social security until the 1940s. Aborigines were largely confined on missions and government settlements or indentured to pastoralists. They were not paid social services in most circumstances until the 1960s and Aborigines living in rural and remote areas were not paid until the 1970s. Aboriginal ex-service personnel from both the First and Second World Wars were seldom granted returned service payments or land grants received by other ex-service people. Writing in the official Australian War Memorial magazine, Professor Mick Dodson and Dr Siobhan McDonnell (2016) note that governments handed over land from some Aboriginal reserves to white ex-service personnel whilst at the same time evicting Indigenous ex-service people from land they had lived on all their lives and denying them any other form of land tenure pp.10-16.

The White Australia policy began to be watered down in the mid-1960s during the last years of Robert Menzies and the procession of Coalition Prime Ministers who followed him. This policy was officially ended by the Whitlam Labor Government in 1973 when overseas posts were instructed to disregard race when assessing applications to migrate. The current Coalition Government and Labor Opposition are in lockstep on policies of shipping asylum seekers arriving by boat to remote Pacific islands where they are effectively incarcerated. Such policies are driven by a combination of racism, xenophobia and islamophobia the intensity of such attitudes is increased by a disproportionate fear of terrorism.

The continuing racism directed towards Indigenous Australians particularly those living in rural and remote Australia should shame the nation but both the government and opposition deliberately ignore Indigenous agency preferring to heed the advice of right wing think tanks (Altman and Hinkson 2007, Tomlinson 2011).

The present conservative Coalition Government has two main forms of work for the dole: one is for city dwellers (which is the least invasive); the other is applied in rural and remote Australia and overwhelmingly applies to Indigenous Australians. The bush “work for the dole” system requires that people must work 5 hours per day 5 days of the week to receive the unemployment benefit. Kate Wild (2016) interviewed an Australian National University researcher, Lisa Fowkes, pointed out that of the 35,000 people involved between July and December 6,000 people had received suspensions from payment of 8 weeks. The interviewer went on to note:
Ms Fowkes said more penalties had been applied to the 5 per cent of Australians on work for the dole in remote Australia than to the remaining 95 per cent of unemployed people in the program across the country.

Dan Conifer reporting for the Australian Broadcasting Commission News on the 23^rd of December 2016 noted that:

More than 20,000 participants were fined last financial year
About 90 per cent of those found to have breached the program were Indigenous
People were fined on 146,654 separate occasions.
The Northern Territory recorded more penalties than every other jurisdiction combined.

Whilst some Indigenous Australians are wealthy the overwhelming majority of the first Australians live in poverty. Indigenous Australians die 10 to 20 years younger than other Australians depending on where they live. The incarceration rate for Indigenous adults is many times that of other Australians. At 30 June, 2016

Aboriginal and Torres Strait Islander prisoners accounted for just over a quarter (27%) of the total Australian prisoner population. The total Aboriginal and Torres Strait Islander population aged 18 years and over in 2016 was approximately 2% of the Australian population aged 18 years and over.

Young Indigenous people are locked up in juvenile remand facilities at grossly disproportionate rates when compared to other Australians (to put these figures into context see Tomlinson 2005).

So how does one account for the fact that the poorest community, the one which encounters the worst health and the most disabilities is the one which is most discriminated against by the social security system and the health and welfare systems generally unless it is recognised that it is the result of widespread racism. Jon Altman (2016) argues that basic income makes basic sense for remote Indigenous people in Australia.

The social security system also discriminates against young people (particularly those who are unemployed), against many with disabilities particularly those with personality disorders, mental health, drug and alcohol difficulties.

Yet we still have economists like Gigi Foster arguing “The poor arguably lack access and/or skills as much as or more than they lack money” and senior journalists like Mike Seccombe who happily suggest that Australia has “one of the world’s best-targeted welfare systems”. Foster claims “What’s more, the present Australian social security and welfare system can be viewed as a UBI scheme with exceptions for people who don’t need it.” Friedrich Hayek would be proud.

Eva Cox (2016), long-time campaigner for the rights of women and children states “it is clear that a universal basic income, if implemented appropriately, could help address historic gender, race and material inequities.

In Australia in early January 2017, The Guardian newspaper brought together Foster and a PhD student from the University of Sydney, Troy Henderson. Foster reiterated her arguments from The Conservation of December 2016 which have been discussed at length above. Henderson made the point that:

The progressive case for a universal basic income in Australia means providing an unconditional income to all Australians alongside – not as a replacement for – the welfare state… (rests on basic income’s) potential to reduce inequality, improve social security and enhance personal freedom through the introduction of a new universal right.

Later he notes that a basic income would free up staff:
to focus on helping people address those multiple layers of disadvantage Gigi (Foster) mentions instead of surveilling clients within a punitive workfare system.

Henderson suggest a progressive trial in the state of Tasmania, which is also our largest island (Tasmania has similarities to Prince Edward Island in Canada and which is considering introducing a basic income). He says we could:
pay every working age Tasmanian (330,000 people) a $15,000 UBI for the next five years? That’s about the same as the maximum unemployment payment and would cost around $5bn a year. That’s easily affordable when you consider that the super(annuation) tax concessions that disproportionately benefit the well-off cost the federal budget over $30bn in 2016-2017.

In November 2016, Gideon Haige in a meandering article entitled “A basic income for all: A 500-year-old idea whose time has come?” Correctly notes that currently:
Most of the (Social Security) bill is absorbed not by the dole but by the aged pension, even if no tabloid has ever sent reporters to scour those opulent retirement homes and bingo halls in search of the sponging workshy elderly.

After recounting much of the history of income guarantees from Thomas More to the present Haige goes on to quote Tim Lyons from a left leaning think-tank who when asked about the welfare nostrums of the current conservative Coalition Government says:

What this mob has returned to is a view that it’s necessary to punish people who are unemployed, … It’s a recurrent right-wing fantasy of the last 25 years that there’s this vast imaginary army of malingerers and a ton of money to be saved in welfare.

Haige warns basic income enthusiasts that:
Welfare in Australia long ago sheered away from a social insurance model; it has traditionally been targeted, generally been niggardly. The idea of money for nothing would go against a deeply grained idea of a reciprocal bond between state and citizen – embedded in our national anthem, of course, is the notion of “wealth for toil”.

Australia in 2017

Australia at present has a “social security” system which is mean-minded, means-tested, highly targeted categorical system which frequently fails to supply benefits to those in poverty, others with severe disabilities, those who are experiencing ill-health, those without housing, others without work or income, victims of domestic violence and others in financial need. It is an anathema to suggest the existing welfare system is anything other than a way of controlling the impoverished, belittling them in the process, criminalising those in poverty who refuse to submit to the dictates of “their betters”, and forcing many into a life of crime or prostitution.

It is a cheap and nasty way to divide the working classes and the precariat (Standing 2014) and a method of ensuring the mystification of the affluent’s hoarding of inordinate wealth at the expense of the rest of us.

In 2016, I compared Guy Standing’s The Corruption of Capitalism and Tim Dunlop’s Why the Future is Workless. Their arguments have several things in common. They believe that in the absence of a basic income, income insecurity will affect substantial sections of the less affluent, that the nature of employment is changing rapidly, that casualised precarious employment will come to dominate the labour market and that most of the work available will increasingly become poorly remunerated.

It will only be when we pay a universal basic income, incapable of being garnished by government or anyone else, at a level above the Henderson Poverty Line, to each and every permanent resident in their own right, irrespective of their race, gender, wealth, employment status, attitudes to employment and irrespective of whether they live alone or with others that we will have any hope of building a decent non-discriminatory society.

The current conservative neoliberal Coalition Government continues to be obsessed by two things: its austerity drive focussed mainly against the least affluent and by an intense desire to provide business with $50 billion in tax cuts over the next decade, whist simultaneously returning to a budget surplus.

In recent years, governments have put huge resources and energy into cross matching a range of government and private databases. Those of the taxation office and social security are two of the main ones, but commercial enterprises are increasingly being drawn into the net with financial enterprises being a frequent focus. In 2015-16 about 20,000 letters were sent out during the year demanding social security clients explain, the reasons for discrepancies between different databases. In the 3 months to December2016, 20,000 such letters were sent out each week. A major explanation for “discrepancies” between the different databases is because the agency responsible for unemployment benefit calculates income on a fortnightly basis, in order to maximise claw-back deductions from those working part-time, whereas the tax office records income annually (for further details see Fergus Hunter 2016).

To add insult to injury this conservative Coalition Government has engaged three private debt-recovery firms to recoup moneys that the Government has decided that people owe to the Commonwealth. These private firms are intimidating people by saying that their car driving licences will be suspended if they don’t repay “the debt”, jacking up the amount of money which people agreed to repay from $50 a week to $700. This Government would shame the Australian Bush Ranger Ned Kelly in their arrogant disregard for the welfare of the least affluent.

As of July 2016, the Remuneration Tribunal advises that government ministers receive a base rate yearly salary of $307,000 and cabinet ministers an additional $29,000. They have absolutely no understanding of the sense of fear experienced by poorly paid precarious workers, unemployed people, or single parents when, out of the blue, they are told that they owe the government a thousand dollars, let alone many thousands of dollars. On the 17^th January 2017 the Department administering these debt letters belatedly agreed to interview clients before sending them letters of demand for repayment.

Ben Spies-Butcher had in 2016 commented:
Campaigns for a basic income therefore have the potential to re-frame the toxic debate around welfare. While ever welfare reform is focused on the most marginalised it will be difficult to ensure (unemployment payments are) adequate or to abolish expensive and demoralising forms of conditionality and surveillance. A basic income would do those things—but through a debate which focuses on collective problems, collective needs and the nature of life and work. And we know from other evidence it would likely be more effective at supporting paid work than our current policies.

He cautioned that looking to a universal basic income:
as a short cut, to create consensus and avoid opposition, or to substitute for other struggles, will not deliver the kind of reform we want. A UBI capable of doing everything would likely face even more political resistance than campaigns for public services or shorter hours. UBI is part of the answer, but only if it builds on a broader project for social change.

The Australian people await with baited breath to see what will be the next giant step forward in fiscal rectitude conjured up by the conservative Coalition Government. It will probably be something like setting up a taskforce to steal pennies from blind men’s cups. There are alternatives. The government could set out to tax multinational and national companies appropriately and to close the multitude of tax loopholes and subsidies provided to the rich and super rich. It would then have sufficient financial liquidity to provide a universal basic income at an above the poverty line level. This will happen but not under the present Australian Government.

Footnotes:

The Age and the Sydney Morning Herald are leading mainstream newspapers in Victoria and New South Wales respectively. The Saturday Paper is a progressive national paper.

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Why a sensible employment policy is unattainable in Australia

Paper given at the 2004 National Conference on Unemployment at Coffee University of Newcastle subsequently published in Rutgers Journal of Law & Urban Policy, Vol. 2, No. 1, Fall. pp.204-216.

In this paper I set out a blueprint for a sensible employment policy. The blueprint takes account of many “solutions” to unemployment suggested in Australia since the end of the Second World War, though I will focus upon more recent suggestions.

I conclude that the prime obstacle to Australian governments embracing a sensible employment policy is closely related to the refusal to adopt a universal Basic Income – or any other non-presumptuous form of minimum income guarantee.

The first national unemployment plan

As World War II headed towards a close, Prime Minister John Curtin was concerned that returning soldiers, with memories of the 1930s Depression and the inadequacies of various “Susso” schemes, might decide to use their recently acquired lethal skills and start culling surplus politicians (Kewley 1973, Wilson, Thomson and McMahon 1996, Higgins 1982). H.C. (Nugget) Coombs and other senior public servants were set the task of ensuring full employment in Australia and, where a person became unemployed, that they be paid an unemployment benefit. The 1945 Commonwealth Government’s Full Employment in Australia (White Paper) emphasised the importance of finding work for the returning service personnel, taking up the slack in production caused by the end of the war and adjusting the economy to peacetime conditions.

Implicit in the 1945 White Paper was the realisation that full employment generates a stronger economy. This idea was to find voice again in the 1993 Committee on Employment Opportunities Report Restoring Full Employment. At page one the Report states: “The loss of production through unemployment is the single greatest source of inefficiency in our economy”. The Keating Government’s White Paper Working Nation (1994) shared similar conclusions. In the same year Langmore and Quiggin (1994) estimated “National income is around $35 million a year lower than it would be if unemployment were only about three percent” (p.2, & Chapter 3). Boreham, Dow and Leet (1999) in their text Room to Manoeuvre: Political aspects of full employment are driven by similar preoccupations.

What employment promoting schemes were suggested between 1944 and 1973?

At the end of the war a government-run national employment service designed to identify and fill job vacancies was established. The Commonwealth Employment Service (CES) only sent workers to jobs where the award wage was paid. The slogans of the time were “A fair day’s pay for a fair day’s work” and “Any job is better than no job at all”. The employment service had a supplementary role of installing a work test to those who applied for unemployment benefit. Women were pressured to leave their jobs in the factories, where they had served during the war, to make way for unfallen heroes. It was a regime typical of the classical labourist tradition. Keynesian economics was in its ascendency. The government paid for training for ex-service personnel and increased the number of public service jobs. Nearly every major business employed ex-service personnel who had quite significant war injuries. Department stores and government departments seemed to have no shortage of one-legged or one-armed lift operators. The Post Master General’s Department (PMG) became the major trainer of technicians through its telephone service (now the semi-privatised Telstra that trains hardly anyone).

This pattern of job search and placement, job-creation particularly in government and semi-government agencies, a commitment to training the young in the PMG, the railways and other government departments, continued well into the 1970s. Except in 1961, unemployment seldom rose above 1%. The commitment to full employment was driven by a memory of the horror of the 1930s Depression, a determination to look after those who had defended their country in war and a sense that unless everyone was somehow assured of a living, the communists or trade unionists would destabilise the society. The prime beneficiaries were white and male.

Menzies, Whitlam and Fraser

The Liberal Coalition Government, which came to power in 1949 and remained in control for a further 23 years, maintained the employment/social security systems and the Keynesian economics of the post-war Labor Government. Then, in 1972, it was time for a change. The incoming Whitlam Labor Government, with Bill Hayden as Minister for Social Security, initially raised the rates of payment for those on social security, abolished the distinction between the youth and adult unemployment benefit rates and struggled to implement a more rights-based approach to social welfare. By 1975, confronted by rising unemployment rates, Government Ministers descended into denigrating unemployed people referring to some as “work shy lion tamers” and “dole bludgers” (Windschuttle 1980 Chapts. 8-10). In that year Hayden, by then Treasurer, adopted several economic fundamentalist ideas in his budget – starting the retreat from Keynesian economics in Australia. Hayden’s budget moved away from counter-cyclical spending designed to boost employment and decreased other social wage spending. The other major change in employment policy introduced in 1974 by Whitlam was the Regional Employment Development (RED) scheme. This program was designed to encourage employers, particularly in the non-profit and local government sectors, to take on subsidised workers in the hope that they would work their way into a standard job.

The Fraser Liberal Coalition Government was no more able to solve the problem of an inadequate number of jobs for all people wanting to work. It set out with considerable alacrity to make it harder for unemployed people to remain on benefits, mainly by urging employment officers in the CES to enforce the existing regulations, particularly in relation to the work test more stringently. Fraser and his ministers increased the tenor of the vitriol they heaped upon unemployed people (Windschuttle 1980). Economic fundamentalism increased in treasury and finance departments. In 1977, influenced by Nugget Coombs (Coombs 1994, Chapt. 7), Fraser introduced the Community Development Employment Program (CDEP) on some Indigenous communities, whereby Aboriginal people who were unemployed weren’t paid unemployment benefit but worked on community projects in return for the equivalent of the benefit rate. This scheme has many similarities with John Howard’s “work for the dole” programs and is in many ways a return to the “Susso schemes” of the 1930s when sustenance was provided in return for forced labour (Tomlinson 2003 Chapts. 4 and 6, see also Tomlinson [forthcoming] 2005). But by the time Fraser lost office, in 1983, little had changed in the benefit or CES legislation.

Hawke and Keating

During the Hawke / Keating Labor year’s economic fundamentalism became more entrenched (Pusey 1991). The Australian dollar was floated, tariffs slashed, union power contained, efficiency became the only game in town, several government corporations were either privatised or corporatised and contracting out began in earnest. There was an attempt to enshrine a corporate form of governance built on a government, business and union structure – the Accord being the most obvious feature. The unemployment benefit system was more tightly targeted and the social welfare income support system became more selective. In the mid-1980s the Minister for Social Security, Brian Howe, set up a review of social security policies headed by Professor Bettina Cass. She argued that there was a need to insist that people in receipt of social security made some contribution, albeit not necessarily as demanding as that which was required by the work test. She called this an active society policy (Cass 1988, 1995, see also Pixley 1993, contra Watts 1995 and Tomlinson 1995). The main unemployment initiative between 1983 and 1996 was the guarantee of a job after 18 months of unemployment, announced in Working Nation. This was part of what Labor referred to as a “reciprocal obligation” compact between the unemployed and the government.

Howard

In 1996 the Liberals returned to power under the leadership of John Howard and began dismantling much of the social infrastructure that supported poor Australians. Howard privatised and then Christianised the CES. First, the CES had many of its job placements and surveillance activities contracted out to either for-profit or non-profit agencies. In 2004, church based agencies hold the majority of such contracts. Economic fundamentalism is now the undisputed focus of government and business economic policy. In 1999, Howard set out his combined socially conservative and economic liberal agenda and in 2000 his plans for a social coalition between the government, business, the churches, families and individuals. This social coalition really amounts to a responsibility-shifting exercise from the government to welfare agencies, families and individuals. The post-war idea of governments striving to put a floor beneath the least affluent citizens has receded leaving in its place an “individualisation of risk” (Lerner, Clark & Needham 1999 p. 11, Beck 1992). As a result, a “do it yourself welfare state” has been created (Klein & Millar cited in Page 1998 p.307). Howard, in a distortion of meaning, calls this social welfare abyss “mutual responsibility”.

Latham

For years, Labor and the other minor parties in the senate held out against the Howard Government’s determination to increase the cost to patients of prescription medicines. In an attempt to establish his economic responsibility credentials in mid-2004 Latham caved in. Labor voted with the Government to raise the charges. It is clear from Latham’s backdown on pharmaceutical subsidies and Labor’s preoccupation with balanced budgets (Hayward 2003) that supporters of economic fundamentalist policies can rest easy. Another depressing aspect of a possible Latham Labor Government is Latham’s support for Blair style “third way” social policies that rely upon forced social engagement in approved programs. I have criticised such programs elsewhere (Tomlinson 2004 [a], 1999, see also Reddel, 2004, Scanlon 2004).

A sensible blueprint

Tempting as it is to suggest that an employment and incomes policy should be based on the proposition of “From each according to their ability and to each according to their needs”, the world has moved on since those words were written. A sensible employment policy would at a minimum set out to abolish Beveridge’s five giants of “squalor, want, ignorance, disease and idleness” (Timmins, 1995).

Assuming that unemployment is as socially debilitating as many commentators suggest then a good start might be to have the government directly (or indirectly by subsidising the non profit sector or industry) accept its responsibility to become an employer of last resort. Such a program could take many forms. The Job Guarantee as proposed by Mitchell, Cowling and Watts (2003) or Mitchell and Watts (2003) just being two of many alternatives.

It may be that is it not unemployment per se or unemployment alone which creates such socially debilitating outcomes for people who are unable to find work. Instead it could be:

the social opprobrium which attaches to unemployment,
the insecurity of income which flows in the wake of being out of a job, and
the failure of the society to respect the integrity of unemployed people and allow them to decide on their future in a non-pressured manner.

Forcing people to do jobs (or engage in other activities) that they regard as meaningless can be as demeaning as not having a job.

The blueprint I would propose is that individuals be guaranteed a universal Basic Income irrespective of their work contribution or any other social status. Additionally the government accepts a responsibility as an employer of last resort and makes every effort to find paid employment for all who seek work. It would be helpful if the government were to refrain from denigrating those who choose to use their time out of the workforce to pursue activities, which they or their community value, but which are not valued by government.

In the last part of this paper I will examine why any likely alternative Australian government is unlikely to accept such a blueprint without a major change occurring in the public’s mind-set. Before doing this, it is necessary to identify the binary divide in ideologies that inform income support policies. This divide can also be seen in the various ideologies that inform alternative employment policies. As Mitchell and Watts (2004) acknowledge “the philosophical notions of citizenship and individual rights that underpin the BI (Basic Income) approach are also the pillars of full employment (p. 2)”.

The binary divide

The binary divide in income support and employment policies, to which I am referring, is the division between those who want to make income support dependant upon the recipient doing something in return for the assistance and those who would pay sufficient income to sustain a person without imposing any obligation to labour or make any other contribution.

From the first social security legislation in the Australian Federal system, in 1908 relating to age and invalid pensions, there was the requirement that one had to be of “good moral character” in order to receive payment. This provision existed up until Bill Hayden, first Minister of Social Security in the Whitlam Government, abolished it in 1973. Since that time, the stated justification for payment is that one meets eligibility criteria and, with the exception of the Blind Pension, that one is also “in need”. Many writers (Boston and St John 1999, Goodin and Le Grand 1987, Watts 1995, Goodin 2001 Castles 2001, Stretton 1996, Tomlinson 1995) have attested, however, the way in which eligibility criteria are written, the manner of administration and the existence of bureaucratic “discretion”, continue to add an element of “desert” in all categorical benefit systems. Governments in Australia frequently claim to use the concept of need as the justification for paying benefits. But, they seldom define need and as a result “being in need” is often a non-explanation (Tomlinson 1989 Appendix C).

It is this element of “desert”, expressed in the 1834 Poor Law in England as the concept of “less eligibility” with its explicit distinction between the “deserving and undeserving poor”, which has been part and parcel of the Australian system of income support since the invasion in 1788. The concept has a long lineage. Joel Handler (2002 footnote 217) has traced “less eligibility” back to the Statute of Labourers (1348) that enshrined the prohibition against giving alms to sturdy beggars.

Almost identical justifications are provided for the work test embedded in the 1944 unemployment legislation in Australia, in Cass’ active society strategy (1986, 1995), in Pixley’s duties and obligations of the unemployed (1993 Chapt. 8), in the reciprocal obligations of Working Nation (1994); they pervade the McClure Report (2000) and are oozing from Prime Minister Howard’s unctuous pronouncements on “mutual obligation”:

Just as it is an ongoing responsibility of government to support those in genuine need, so also is it the case that – to the extent that it is within their capacity to do so – those in receipt of such assistance should give something back to society in return, and in the process improve their own prospects for self-reliance. This is the principle that underpins the Work for the Dole Scheme which we have successfully introduced and expanded over recent years (Howard 1999).

Such thinking is present in European participation income schemes (Atkinson 2002) and some Job Guarantee proposals (Mitchell, Cowling & Watts 2003) – to the extent that such schemes would deny payment to those who do not agree to meet their “participation duties”. There are several differences between the Job Guarantee proposals suggested by Australian Job Guarantee academics and European participation schemes such as that of (Atkinson 2002); however, what places them on the same side of this ideological divide is that both types of schemes want to make income support dependant upon the recipient doing something in return for the assistance.

On the other side of this binary divide are those who would provide a universal Basic Income to all permanent residents of a country without any requirement to work, search for work, or meet any imposed obligation (Van Parijs 1992, 1997, 2000, Goodin 2001, Standing 2002. See also Basic Income Earth Network [BIEN] or Basic Income Guarantee Australia [BIGA] for links to Basic Income web sites world wide).

The opposition

Often objections are raised in connection with the untrusting suggestion that people would leave work in droves if they could obtain an income without working. This suggestion will not be addressed here as I have answered it elsewhere (Tomlinson 2003). It has been argued in Australia and overseas that any non-presumptuous minimum income guarantee is economically unaffordable. Perhaps the clearest and most succinct refutation of the suggestion that Basic Income is unaffordable was put forward by Jose Iglesias Fernandez (2002).He argued for a Basic Income for Catalonia at a rate of half of the per capita income of this region of Spain. He says that since the wealth needed already exits, the question is not affordability but willingness to redistribute that income. Economic historian, Keith Rankin (1998), has demonstrated that a Basic Income is affordable in New Zealand and the Irish Government has come to similar conclusions in their country (Healy and Reynolds 2002).

Two questions face Basic Income advocates in Australia. The first question revolves around the level of income which should be provided by a Basic Income. My heart would prefer an income more in keeping with that of Jose Iglesias Fernandez (2002) but given the history of income support in this country my head tells me that the best which is likely in the foreseeable future in this country is a rate of assistance equal to the single age pension. In the short term the level might need to be in line with the Henderson poverty-line.

The second question revolves around the philosophical justifications for choosing a Basic Income over justifications which support either the existing income support system or the Job Guarantee system. At last years National Conference on Unemployment, Simon Schooneveldt (2003) considered the first part of this question (See also Tomlinson, Harrington, and Schooneveldt 2004). At the last BIEN Conference Guy Standing (2004) considered the second part of this question concluding that a Basic Income was necessary if one wanted to introduce a Job Guarantee (contra Watts and Mitchell 2004) .

Ethics or lack of them

The other justification for not adopting my suggested blueprint is that of “desert”. Sometimes this is expressed in the terms of “need” or lack of it. At its most vicious, it is expressed in terms of paternalism, whether that be Lawrence Mead’s (1986, 1997) “tough love”, or McClure’s (2000) and Howard’s (1999, 2000) ending “welfare dependency”, or Tony Blair’s third way forced “social inclusion” which the French, in a far more phallic interpretation, call “social insertion”. Standing (2002), Goodin (2001) and Van Parijs (2000, 1997, 1992) provide compatible but differing ethical critiques of such paternalism. In an article entitled “The real moral jeopardy of ‘Welfare Dependency’”, Tomlinson (2004[b]) asserts that to suggest that such paternalistic policies assist low income earners avoid “welfare dependency” disguises the fact that the rich are the main beneficiaries of such dependency rhetoric.

When John Howard (1999) says it is only right that people (who in the absence of any viable alternative) must give something back to the community if they are paid social security, he is giving the concept of justice a particular meaning. It is certainly not the concept of justice as understood by Van Parijs (1997, 2000), Standing (2002) or Goodin (2001). Howard is asserting that it is right (just) for the power of the State to be brought to bear to impose a contractual obligation upon some of the most powerless people in our land. Goodin (2001) describes such an imposition as the morality of the highwayman. He says: “The proposition that the welfare worker is putting to her putative ‘client’ is ‘Agree or starve.’ That is the same, in all essentials, to the proposition the highwayman puts to his victim: ‘Agree or die’ (p.191).” Kinnear (2000) accuses the Government of taking without giving. Standing (2002) and Van Parijs (1997) have provided fully elaborated ethically just alternatives to Howard’s pre-Hobbsian contractual arrangements. Both base their ethics upon a more trusting view of their fellow human beings (Sztompka 1999, Tomlinson 2003, Chapt 8).

The degree of resistance to the introduction of more liberating unemployment policies

Due to limitations of space I will provide just one example of the level of resistance to adopting policies in line with my suggested blueprint. I have chosen not to concentrate on the Howard Government nor its Hawke/Keating Labor predecessor but to return to the Fraser years, before economic fundamentalism was the hegemonic driving force in government ranks, leading to massive cutbacks in welfare spending. In July 1977 the Myers report was handed to the Government and as Harding (1985, p.233) notes:

Myers suggested that the work test should be abolished for most unemployment benefit recipients, that school leavers should be treated in the same manner as other new workforce entrants, that benefits should be given to working wives who lost their jobs, and that the seven day waiting period for unemployment benefits be abolished. He also said that he had found little evidence of dole bludging, and that “most people wanted work”. The Government scrapped the major recommendations of the Myers report within a week, on the grounds that an additional $300 million expenditure on unemployment benefits could not be entertained (my italics).

Conclusion

In Australia there is along way to go before we can claim to have sensible employment and income policies. The alternative governments of this country are committed to welfare policies whose ideological base derives from fourteenth century England. Until the public’s mind-set changes it is unlikely that either a Basic Income or a Jobs Guarantee will be implemented.

Acknowledgements

I am grateful to Penny Harrington, Simon Schooneveldt and an unnamed reviewer for their comments on an earlier version of this paper.

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Ziguras, S., Dufty, G. & Considine, M. (2003) Much Obliged: Disadvantaged job seekers’ experiences of the mutual obligation regime. Brotherhood of St Laurence and St. Vincent de Paul http://bsl.org.au/pdfs/MOreportV2.pdf

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Why Australian workers and unions should support Basic Income

John Tomlinson, Simon Schooneveldt and Penny Harrington originally Published on the Basic Income Guarantee Australia website in November 2004, in AVINUS Magazin 2005 and in German in 2006 in a Book edited by Manfred Fullsack. Globale Soziale Sicherheit. Grundeinkommen – Weltweit? Avinus Verlag, Germany, Berlin, pp. 115-127.

The journey to a full universal Basic Income is essentially the search for the answer to just one question: “How do we best meet the income support needs of all those who find they are without the capacity to provide for themselves?” This paper will try to answer that question.

Introduction

Under the Hawke/Keating accord low paid workers were compensated for declining real income from employment by increases in the social wage.

The Howard Government, recently elected to a fourth term, now with ‘control’ of the Senate upper house has assaulted the social wage. The universality of Medicare has been weakened, the low-income earners’ dental service abolished, and the social security safety-net has been undermined. Job insecurity has increased; the Howard Government is determined to gut the unfair dismissal legislation. Officially recognised unemployment levels have dropped below 6% but if underemployed, discouraged unemployed and disguised unemployed are taken into account the real level of unemployment is in the order of 12 to 18% of the working age population. Unemployment and the weakening of the social security safety net are real issues for low-income wage earners because those workers who find themselves in the bottom 30% of income distribution are the ones most likely to experience periodic unemployment interspersed with short stints in casualised, part-time and precarious employment.

The “economic miracle” of the Howard Government resulted in:

the worst housing affordability figures in 13 years (Commonwealth Bank and Australian Housing Industry 2003),
the meanest social security system since the early 1940s (in the 2001-2002financial year this Government imposed 386,946 social security breaches on some of Australia’s poorest citizens (ACOSS 2002),
the captains of industry gaining disproportionate rewards – the ratio between Chief Executive Officers’ salaries and those of workers has risen from 3 times workers’ salaries in the 1970s to 74 times workers’ salaries –(Shields, O’Donnell and O’Brien 2003),
the sale of nationally owned assets,
increasingly arduous work “flexibility” arrangements,
determined attempts to move people off disability pensions onto unemployment benefits with onerous ‘mutual obligation’ activity requirements (Galvin 2004, Ziguras, Dufty and Considine 2003)
draconian industrial relations regimes, and
constant attacks upon the dignity and rights of Indigenous Australians and asylum seekers.

But it is “a miracle”. Yes it is a miracle that we have let them get away with it.

Australia over the last two decades has been converted from a reasonably caring, mixed economy with a frugal but comprehensive social security safety net into a country where private provision, “individualisation of risk” (Lerner, Clark & Needham 1999 p. 11) and a “do it yourself welfare state” (Klein & Millar 1998 cited in Page p.307) is the order of the day. The Howard Government has significantly stepped up the rhetoric about the evils of “welfare dependency” as a way to decrease the legitimacy of the claims of low income-earners for assistance from the government. In doing so it has foisted the obligation to support those in financial need back onto their families. This is simply a cost-shifting exercise (Tomlinson 2003).

Songwriter Eric Bogle saw this coming when he wrote:

Hard times put us to the test,
we held our wallets to our chest
and said “that I’m all right Jack
and to hell with all the rest”.

The various forms of income

In Australia the main sources of income are:

paid employment,
operating a business,
other family members,
social welfare services,
educational allowances,
workers’ compensation,
superannuation,
tax credits,
investments,
Community Development Employment Program (CDEP)
gambling, and
crime.

What is a Basic Income?

A full Basic Income is a universal payment paid to each permanent resident, as an individual, irrespective of their personal or social circumstances.

Why pay millionaires?

There are many, who on first looking at the Basic Income proposal, would argue that only people in financial need should be assisted by the government. Economists claim that paying well-off people then taxing them back, which they call “churning”, is inefficient. Others argue that such payments are simply unjust or wasteful because the well-off don’t need them. But the economists’ objection to “churning” on account of expense is more than offset by the efficiencies obtained in paying everyone. Under present social security arrangements many people who are in the most desperate need do not receive their entitlements. Failing to pay everybody who has an entitlement to benefit is inefficient as is paying people who don’t have an entitlement. Governments are more inclined to recognise the latter inefficiency.

The other major economic reason for paying rich as well as poor is that it improves the integrity of the tax collection system by improving compliance. This is because the tax department is better equipped to understand which Australians are getting paid a Basic Income, what other income sources exist, who is receiving that income and who is utilising more than one tax file number to avoid tax.

The introduction of a Basic Income would necessitate the amalgamation of much, if not all, of the tax and social security departments’ functions creating considerable savings. This is not new; the tax department ran social security in Australia until 1927.

A Basic Income system would be more just than the existing Australian system of income support. Low income-earners would be net beneficiaries of a Basic Income whereas richer Australians would not be economically advantaged by it. Well-off Australians would pay in tax far more than they gain in benefits. All tax free thresholds and social security income wavers would be abolished. These “concessions” at present result in an array of inequities as will be seen later in this paper.

All permanent residents would receive their Basic Income as a tax-free benefit, providing a greater advantage for the bulk of low income-earners than the present tax and social security arrangements provide. But a flat rate of income tax will be paid on every extra dollar earned from work or investments.

The present Australian systems of income tax and social security means tests are designed to build an equity by taxing those on higher incomes a higher rate of tax than lower income earners and providing the most social assistance to those with the least incomes. It has only partly succeeded in these aims because of widespread tax avoidance and its frequent failure to provide assistance to those in greatest financial need. A Basic Income builds the equity in upfront by ensuring everybody gets an income and taxing all other income at a flat rate. Those who have the most income pay the most tax. A flat rate of tax removes some of the incentives/opportunities to avoid paying the appropriate rate of tax.

Income support schemes

Before we can examine Basic Income further, it is necessary to outline the advantages and disadvantages of other existing or proposed systems of income support.

Other possible forms of income support are:

Social Insurance,
Government run Superannuation for all workers,
Private Superannuation,
Other privatised solutions,
Job Guarantee,
Welfare Assistance,
Social Security,
Participation Income,
Guaranteed Minimum Income,
Negative Income Tax, and
Tax Credits

Social Insurance

Government run Superannuation for all workers

Private superannuation

In Australia, private superannuation is the only form of superannuation available to non-government workers. The amount paid is proportional to contributions from workers’ salaries (paid by workers and by their employers) or private investments made during the workers’ employment. However the amount available for distribution is affected by how wise the investment decisions made by the managers of the superannuation funds were. On several occasions in recent years, in Australia, workers who were not in defined benefit superannuation funds have found that instead of accumulating assets their funds have made losses. Higher paid employees gain proportionally more from such superannuation schemes because of the preferential tax treatment the rich receive compared with the treatment meted out to lower paid workers. The inequalities experienced during working lives are extended into the post-working phase of people’s lives. All private superannuation funds are at some degree of risk. The Australian Government Superannuation watchdog recently warned that at least 10% of funds are at considerable risk (Hayes 2002 p.1). The only advantage of such schemes, accruing to individuals, is that they perceive whatever payments they receive as theirs by right of their prior contributions.

Job guarantee

Welfare assistance

Welfare assistance can never provide a guarantee of secure income. It has not had other than a supplementary role in income support since the late 1940s in Australia. It is riddled with all the problems which any highly discretionary handout system is imbued, such as: inadequate coverage of the people affected, inconsistent determinations, stigma and discrimination (Standing 2001). More and more Australians have to call upon welfare relief agencies for assistance as employment becomes more precarious and the system of social security becomes meaner (as a result of increasingly arduous eligibility requirements and a more rigorous social security breaching regime).

Social security

The greater the universality in any system of social security the nearer it comes to being an income guarantee. For instance, all long-term residents in Australia whose age exceeds the specified age limits are entitled to apply for the age pension. The age limits for women are gradually being phased in to equal those of men. If their income and assets are below a specified amount they will receive payment. This is a Guaranteed Minimum Income for older Australian residents. Current age limits are 65 years for men and 62.5 years for women. Yet it needs to be remembered that the average age of death for Indigenous Australian men is 56 years and 62 years for women. This compares with 76 years for non-Indigenous men and 83 years for non- Indigenous women. In Queensland, South Australia, Western Australia and the Northern Territory three-quarters of Indigenous male and two-thirds of Indigenous female deaths occurred before the age of 65 years compared with one-quarter of male and one-sixth of female total deaths in Australia (ABS and AIHW 2003, p183).

From 1942 the Australian Government paid Child Endowment to children’s guardians (for second and subsequent children). No income and or asset test was imposed. It was exempt from income tax. From 1950 Child Endowment in respect of the first child was also paid (Kewley 1973 pp.190-210). This payment was unusual in that it could be paid to “an aboriginal native who was not nomadic or wholly dependent upon the Commonwealth or a State for support” (Kewley 1973 p.195). Child Endowment was intended to be a universal payment paid in respect to any child living permanently in Australia. In 1963 Prime Minister Robert Menzies said “As to this proposal about a means test on child endowment, I have never heard of it before and I do not want to hear of it again.”(Cited in Kewley 1973 p. 209). Child Endowment was not dissimilar to the current Brazilian and proposed South African Children’s Basic Income payment (Suplicy 2002, Matisonn and Seeking 2002). In reality it took many years for Indigenous Australians living on missions and government reserves to be paid. Child Endowment is now paid as a form of family allowance through the tax system, however it is now also income tested, which results in painful overpayment recovery actions, which will be discussed further along .

A major problem which social security systems create is that groups who are not highly valued by the powerful can very easily be excluded by the government of the day from payment; for example 16-18 year old unemployed people. Another problem that such systems create is that additional obligations can be imposed upon recipients on the passing whim of a prime minister. The current preoccupation of the Howard Government with so-called “mutual obligation” will be discussed in the section dealing with participation income. The government is powerfully placed to brand groups of people it does not want to pay as “greedy” rather than “needy” or as “lazy dole bludgers who are not pulling their weight” and “job snobs”(Abbott 1999) or, more gently, as “not making a sufficient contribution to the society” (Howard 2000). The distinction between those eligible for payment, “the worthy”, and those who are deemed ineligible, “the unworthy”, has been an ever present feature of welfare relief and social security since the earliest days of colonial Australia.

Whereas social insurance payments are largely paid for by the contributions of workers, social security in Australia is paid for from general taxation. In some countries a specific tax or tax levy is imposed to pay for social security. Australia once had a specific tax paid into the Welfare Benefit Fund designed to pay for social security but the Menzies Government abolished it in the early 1960s (Smith 1993 pp. 54-55). The advantage of social security is that the benefits are designed to go to those whom the government has decided should be paid. Complexity, stigma, system failure and recipients’ lack of sophisticated knowledge about bureaucracies results in many eligible people not receiving their proper entitlements (Boston and St John 1998, Standing 2001 pp. 13-14).

Participation income

Participation Income is very widespread in the present Australian system of income support. Essentially if you don’t participate then you are refused assistance. Participation income is a euphemism for the chance to impose an obligation on people who receive government or government-subsidised payments coupled with the paternalistic belief that this will assist the recipient to improve their life. Many researchers have described the philosophical underpinnings of participation income as unethical (Kinnear 2000, Goodin 2001, Hammer 2002, Tomlinson 2002[a], [b]) because the only choice offered to welfare recipients is comply or starve. The practical outcomes for those who are breached are socially disastrous (ACOSS 2003, 2002, 2001, Schooneveldt 2002, 2004, Tomlinson 2002 [a], [b], Ziguras, Dufty and Considine 2003). Evidence is emerging from the United States which suggests that having one’s social security reduced or removed creates increased health difficulties for children of beneficiaries who are breached (Cook, Frank, Berkowitz, Black, Casey, Cutts, Meyers, Zaldivar, Skalicky, Levenson and Heeren 2002).

Professor Robert Goodin (2001 p.198) makes the point that:

The Brotherhood of St Laurence and St Vincent de Paul report entitled “Much Obliged” links the imposition of “participation income” strategies back to the days of Labor Minister Brian Howe’s investigation of social security headed by Professor Bettina Cass (Ziguras, Dufty and Considine 2003). In the late 1980s Cass, in a number of departmental publications, recommended that Australia adopt what she termed an “active labour market strategy”. The history of “participation income” is much longer than this. When, in the 1940s, Unemployment Benefit was introduced as part of the social welfare safety-net, a work test requirement had to be fulfilled prior to the grant of benefit. During the 1930s any unemployment relief provided by government enforced obligations upon the unemployed to do civil works in return for sustenance – hence the payment was referred to as “the susso”. Hugh Stretton (1996) in an aptly entitled speech “From the Poor Laws to poor laws”, given at the Brotherhood of St Laurence , linked such policies back to the English poor Law of 1834. In fact, similar motivations contributed to the enactment of the 1601 Poor Law in England. Joel Handler (2002) notes such values were present in the concern expressed about the possibility that welfare relief provided might assist “sturdy beggars” enshrined in the 1348 Labourers Act. “Mutual obligation”, “participation income” and the “deserving/undeserving” dichotomy have a very long history indeed.

The notion of active labour market policy is equally disingenuous. Who could possibly favour being passive if one could be active? The word ‘active’ seems virile and strong, whereas its opposite, ‘passive’, suggests laziness, and lack of initiative. In fact, usually active policy is little more than having the state telling people what they must do in order to receive some moderate state benefit, directing them to training or job schemes. By contrast, the much derided passive policy entails giving funds to individuals or families with minimal conditions, leaving them to make choices about how to conduct their lives and allocate resources. It could more fairly be described as liberating (Standing 2001 p. 14 [italics in original]).

In Europe, whether it is expressed as the need for contribution on the part of unemployed Germans (Liebig and Mau 2002), the unearned obtaining of benefit in Belgium (Vanderborght 2002), the need for social ‘inclusion’ in Britain (Atkinson 2002), or the French obsession with ‘social insertion’ (Farvaque and Salais 2002) there is a remarkably similar paternalistic tone combined with a sense of blaming the person who is without a job. In the United States the current jargon spread by cheerleader Laurence Mead is “tough love” and “workfare not welfare”(Mead 1986, 1997). There is little recognition that workfare jobs entrench low paid employment by displacing full-time, above poverty-line jobs (Briggs and Buchanan 2000). “Work for the dole” and Community Development Employment Program (CDEP) jobs in Australia have a similar effect of entrenching poverty (Tomlinson 2001 Chapters 4 and 6). The CDEP has operated in Indigenous communities since the late 1970s. The bulk of Indigenous “jobs” on Indigenous communities are CDEP “jobs” – they are paid at about the rate of unemployment benefits and only the most misguided would claim that such “jobs” have abolished poverty in Indigenous Australia.

The remarkable thing about the participation income debate is that it can be tied to Tony Blair’s “third way”, George Bush’s “time limited welfare” and John Howard’s “mutual obligation” or “a job is the best form of welfare”. Such pundits are oblivious to the life experiences of low paid workers’ revealed in the Australian Liquor Hospitality and Miscellaneous Workers Union’s (LHMU) submission to the Senate Inquiry into Poverty (2003). There is very little recognition of the demoralisation that follows in the wake of working full-time and still being in poverty, or only being able to gain casualised, poorly renumerated, precarious employment.

The impact of enforcing obligations upon unemployed people, insufficiently employed people, lone parents and people with disabilities is the same whether it is expressed in the considered tones of Patrick McClure’s (2000) Report, or Minister Amanda Vanstone’s (2003) strident suggestion that when clients receive social security assistance without compelled obligations this has the effect “of killing them softly” or Professor Atkinson’s (2002) gloating that the British Prime Minister Blair chose his suggested participation income over a Basic Income.

Whether it is Howard’s (2000) “social coalition”, Abbott’s (1999) “job snobs”, Minister Brough’s 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 hysterical denunciation of “welfare dependency” and particularly intergenerational “welfare dependency” is based on a myth. There have been no intergenerational panel studies of long-term social security recipients in Australia.

Recent overseas long-term panel studies do not support such assertions (Goodin, Headey, Muffels and Dirven 1999, pp.260-261).

Such a view is supported by Cook, Dodd and Mitchell (2001 p.24) when they say: 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.

The advantages which proponents of a participation income claim are that it assists people to remain job ready, involves them in the community by assisting them to give something back to society and that it cuts out fraudulent claims. There is often a subsidiary claim that because it does all the above it legitimises the payment of the benefit in the eye of the public (Howard 2000, 1999). Other researchers (Standing 2002, Handler 2002, Tomlinson 2003) refute such claims. They argue that there is far less support for such services now than at any other period of our post World War II period. The drop in support is a result of the assault on the legitimacy of welfare services and social security waged ceaselessly by economic fundamentalists and the subsequent divisiveness within the ranks of the working class which has followed in its wake. The Brotherhood of St Laurence and St Vincent de Paul 2003 report entitled “Much Obliged” asserts that people who become long term unemployed have so much of their time taken up just meeting the imposed obligations that they don’t have time to find work:

Currently, in order to receive Newstart Allowance (NSA), job seekers must:

actively look for suitable work
register with at least one Job Network member
accept suitable work offers
attend all job interviews
attend Centrelink offices when requested to do so
agree to attend approved training courses or programs
not leave a job, training course or program without sufficient reason
correctly advise Centrelink of any income earned
enter into and comply with a Preparing for Work Agreement
lodge fortnightly continuation forms
apply for up to ten jobs per fortnight
participate in a ‘mutual obligation’ activity after a certain amount of time on benefits
have certificates signed by employers approached about jobs , if required
complete a Job Seeker Diary with details of job search efforts not leave their current residence to move to an area with a higher rate of unemployment (cited in Ziguras, Dufty and Considine 2003 p.10)

The report concludes the mutual obligation regime “is failing the most disadvantaged job seekers. Overall the system operates…not as ‘welfare to work’ but ‘welfare as work’ (p.43).

Guaranteed minimum income, negative income tax and tax credits

A Guaranteed Minimum Income, if it is available to all permanent residents, is very much like a Basic Income except for a requirement to establish that an individual’s income and or assets are below the amount that is allowed. In 1943, Lady Rhys- Williams was the first English writer to provide book length elaboration of the idea of a guaranteed minimum income. The purpose of such an income guarantee was in Lady Rhys-Williams’ (1965) words “to provide a ‘floor’ below which he (or she) cannot fall, but ought not to have a ceiling beyond which he (or she) can rise (p. 163)”.

The conservative economist Milton Friedman also claims he began thinking about the benefits of a Negative Income Tax in 1943, but he did not publish his ideas on the subject until a year after other United States academics had raised the idea in 1961. The major difference between a negative income tax and a guaranteed minimum income is that the negative income tax is paid as a tax transfer in inverse proportion to a person’s other income; whereas a guarantee minimum income is a generalised form of income support paid as a welfare benefit in inverse proportion to one’s other income. Ian Braybrook (1970) wrote the first academic paper on negative income tax in Australia. The earliest Australian proposal to introduce a negative income tax was that of the Priorities Review Staff (1975).

A Tax Credit is a form of negative income tax paid through the tax system.

The aim of a guaranteed minimum income, negative income tax and tax credits is essentially the same. That is to provide a minimum income guarantee to those whose incomes fall below a specified amount. All these generalised forms of income support differ, in theory, from categorical payments in at least one important regard. They make no presumption about social eligibility requirements. Yet when income guarantee policies are formulated residues from categorical social security policies are frequently present. When Professor Ronald Henderson, Head of the Poverty Inquiry, Henderson (1975) put forward his guaranteed minimum income he wanted a two- tiered structure, using the family as the unit of income, which distinguished between those in receipt of benefits or pensions and those who did not then qualify. Other guaranteed minimum income proposals have used the household as the unit for payment (Edwards 1984). Such proposals ignored the inequities present in intra- family and intra-household transfers (Asprey 1975). The Tax Credit schemes operating in the United States and Britain make payments only to those in low paid work.

A Basic Income is paid to each permanent resident at a flat rate irrespective of assets and means. It is a truly universal payment. It has no social obligations attached to it. This is why it is sometimes termed a ‘citizens’ income’ program.

The basic wage

In Australia in 1907 Justice Higgins set down the minimum amount that an able- bodied adult male European worker could be paid for his labours in an arbitration commission judgement against Sunshine Harvesters now known as the Harvester Basic Wage Judgement. Justice Higgins considered an amount of seven shillings per week would be sufficient to support a man, his wife and a small number of children. Women were to be paid at two-thirds of the male rate. This system remained in place until the Equal Pay cases in 1967. The basic wage was a form of minimum wage.

Effective marginal tax rates

The rate of tax people pay is very confusing because of the multitude of tax rates in the Australian income tax system, the presence of family allowances paid through the tax system and because the social security system and the tax systems intersect. Because of the way in which income tax and social security and family allowance tax benefits intersect, many Australian families do not get much benefit from extra income they obtain by working. Many low-income earners pay a far higher tax rate than the richest Australians. They often also pay a greater proportion of their income in direct and indirect tax than do more affluent citizens. Some families and individuals are actually worse off in terms of net cash in the hand when their employment income rises. Such situations are commonly referred to as “poverty traps”. It has been a long acknowledged problem which governments over the years have failed to adequately address (Economic Planning Advisory Council 1988). The present Government is well aware of this situation.

Tony Abbott the Minister for Employment and Workplace relations in an address to the Young Liberals Annual Conference in Adelaide in January 2003 said:

It is generally believed that a 48.5 per cent top marginal tax rate (with Medicare levy included) cutting in at just $60,000 a year constitutes a significant disincentive to earn…
people moving from unemployment to work generally face effective marginal tax rates of nearly 70 per cent and sometimes over 100 per cent. Adults on Newstart who earn an additional dollar pay 17 cents income tax. On top of the 17 cents lost through tax, they lose an additional 50 cents through benefit clawback once they’ve earned $31 a week producing a 67 per cent effective marginal tax rate for part-time work in excess of about three hours a week… a single person on Newstart renting privately whose earned income increases from $75 to $375 a week, after tax and social security clawback, is just $53 a week better off…

Single people whose earned income increases from $20,000 to $30,000 a year keep $6700 of their extra $10,000. By contrast, couples with two children whose earned income increases from $20,000 to $30,000 a year only keep $2542. Single people whose earned income increases from $30,000 to $40,000 a year keep $6850 of their extra $10,000. Couples with two children enjoying the same income boost only keep $3834.

And this is from a Government that claims to be “family friendly”.

They get us coming and going

In Australia, when it comes to calculating our income tax debt to the government we are, for most taxation purposes, assessed as individuals. But eligibility for most social security benefits is calculated in terms of total family income. The government gains and the individuals lose on most occasions. For example, a person applying for social security benefit, can be refused payment if they have a partner who is earning a sufficiently high income. If an employed person is supporting a partner who is without income, that person cannot lower their tax by counting the income as spread between two people. If a Government was really interested in assisting families to stay together it would not persevere with the existing financial social security incentives which discriminate against people for pooling their resources in times of financial hardship.

A brief look at the situation in Australia for low paid workers

This paper will draw heavily upon the work of one union that is responsible for the industrial coverage of a large number of low paid workers. The Australian Liquor Hospitality and Miscellaneous Workers Union’s (LHMU) Submission to the Senate Inquiry into Poverty (2003) provides considerable detail of the poverty-inducing impacts of industrial deregulation, increased workloads, casualisation, precarious employment and uncertainty in the number of hours to be worked each week upon the lives of many low paid workers in the service and hospitality industries.

The LHMU Submission (2003 p. 28) notes that one of the reasons many of its members are living in poverty is that “Australia has not had a minimum wage calculated on an analysis of household budgets since the Basic Wage, derived from the original Harvester judgement, was abandoned in 1967” and there has been a failure to link the salaries of low paid workers to wage growth in the rest of the economy (Briggs and Buchanan 2000). The Submission quotes research that shows there is no clear evidence that higher minimum wages lead to the loss of jobs (p.26). They do note on the previous page that government’s “acceptance of low-pay discourages firms to increase productivity through investment in skills development, service quality and innovation. Instead, it promotes reliance on competition through wage reductions.”

The LHMU Submission (2003 p.33) concludes that if we are to live in a decent society it is necessary to:

Raise minimum wages, so that all Australians receive at least a minimum wage that allows them to participate fully and with dignity in our society… Provide secure, adequate employment for all Australians by attacking the proliferation of short hour jobs and providing greater employment security through reduced casualisation.

Even if the government of the day were to accept the economic direction prescribed in the LHMU Submission (2003), this would only assist those workers who are able to find full-time work. Like the job guarantee mentioned early in this paper, it is only a partial solution to the poverty crisis this country faces.

The LHMU Submission (2003 pp. 23-25) discusses government-provided income support and the suggestion that some at least of the income needs of low-paid workers should be met through the social security system. The Submission specifically considered the British Working Tax Credit, US Earned Income Tax Credit system, the tax credit proposed in Australia by the five economists (Dawkins et al 1998), Dawkins (2002) and the ALP (2002) proposals before declaring that the:

LHMU strongly rejects any efforts to raise the incomes of the low-paid through targeted tax credits to the low-paid employed. Such measures respond to the failure of the industrial system to produce adequate incomes by shifting the responsibility for pay from firms to the government (p.23).

This is not to suggest, however, that there is no role for the tax system in supporting the needs of low-paid workers. The Family Payments scheme is up to the task of meeting the needs of low-paid workers. There is no need to provide a new scheme that separates working from non-working households to ensure adequate incomes to lift families out of poverty. Instead, attention should be paid to ensuring that the income thresholds at which tax relief is provided do not promote poverty traps or employment disincentives (p.25).

The Australian family allowance system is paid through the tax system and is a form of tax credit. The manner in which it is administered, particularly the requirement that recipients are required to guess their income in the coming year, leads to lots of overpayments and painful debt recoveries. Whatever assistance such family allowances provide for workers with children it does nothing for single workers or childless couples. Minister Abbott in the lengthy quotation noted earlier in this paper provides evidence of some of the many poverty traps or employment disincentives in the present system. Poverty traps or employment disincentives will be discussed further below.

It is clear from pages 23-25 that the LHMU sees working tax credits as having the effect of entrenching low pay because employers won’t have to pay a liveable wage if the government subsidises, through the tax or social security systems, the pay from the employer. This objection to such arrangements has been around since at least the early 1800s. British historian and social researcher Karl Polanyi (1945 pp.82-87) described in considerable detail the first standardised employment subsidy that was known as the Speenhamland system 1795-1834.

Polanyi (1945 pp.82-87 & 124-130) points out that in England by the end of the 18th century the money system and market for land had been established but the labour market had not been. Prior to Speenhamland the Elizabethan poor law relief system did not assist people whose employer did not pay proper wages. Earlier forms of poor law administration only assisted those without work “through no fault of their own”. In 1795 the justices of Berkshire, meeting in the town of Speenhamland, set a level of assistance that was to be paid by the parish to labourers. The amount of assistance was to be the difference between what was regarded as the rate of assistance for labourers and what their individual employers were able to pay. The justices’ intention was designed to promote employment and simultaneously ensure “the right to live”. Some objected that this let employers shirk their responsibilities to their workers and others claimed it allowed workers to shirk their responsibilities to employers because they only paid part of their wage.

The value of the rate of assistance was not indexed, and with the passage of years, the rate of assistance dropped below subsistence levels. Organised workers had a further problem with this system, namely that the rate of assistance regarded by the justices as the minimum necessary to sustain labourers and their families gradually eroded the wages of others who worked in the district. The rate of maximum assistance became the rate of pay for most workers and was referred to as “the rate”. The Speenhamland system spread throughout much of the countryside of England until it was abolished by the 1834 Poor Law that also removed the “right to live”.

There would seem little doubt that Speenhamland, in its later years, failed to provide workers with sufficient assistance and was widely blamed for depressing the rate of pay even of those workers who were paid their total amount due by their employers. Polanyi (1945 p.86 & p.126) asserts that the establishment of the rate of assistance as the going rate of pay and the misery it caused to the bulk of the population would not necessarily have occurred but for the existence of other laws, such as Anti- Combination Laws, designed to control trade unions and other labour organisations. Polanyi (1945 p.86) states:

If labourers had been free to combine for the furtherance of their interests…. Speenhamland might have had the effect of raising wages instead of depressing them.

The importance of Speenhamland to the current debate is that the way in which we interpret our history is largely determined by past experiences and our present belief and value systems. We need to be mindful of John Kenneth Galbraith’s oft quoted saying that “It is easier to teach people new ideas than to get them to let go of old ones.” Another thing, which affects our perception of events or options, is that our position in any organisation affects what we see. If you compare a company with a tree full of monkeys, “we find that those on the top of the tree when they look down all they see are smiling faces where as those on the lower branches when they look up all they see are @#%* %^*#@”.

What we can see from the Speenhamland system is that it shares one feature with guaranteed minimum income, negative income tax, tax credits, non-universal social security, participation-income and welfare assistance programs. In every one of them, as income from paid work rises, income from the agency providing assistance decreases. This is one major advantage that a Basic Income has over all the other forms of assistance discussed. It is true the amount of money with which a person receives “in the hand” after payment of income tax (net income) might be less than the total income from the two income sources. But with a Basic Income neither the employment income nor the amount of Basic Income is directly affected by the other source of income. The reduction in income is the income tax rate on earned income. This removes poverty traps and work disincentives simultaneously.

Some researchers (Whiteford 1981) have argued that if a Basic Income was put in place that workers would stay away from work in droves. Whereas other researchers have argued the exact opposite (Widerquist 2002, Milner 1920, Gorz 1999, Van Parijs1997, 1992[a], Tomlinson 1989). The only study conducted in Australia into the impact on work willingness (where low-income families were provided with a guaranteed minimum income), showed these families experienced no decline in work willingness (Liffman1978). Van Parijs (1992[b] p.229) claims that because a Basic Income is paid, irrespective of all other sources of income, it can be used by those who desire work as a wage subsidy; yet, because it provides sufficient income on which to live, it does not compel any potential worker to work under conditions which that worker finds unacceptable. He concludes that “Whereas a rising means-tested benefit makes it increasingly difficult for unskilled people to find a job, a rising basic income makes it increasingly feasible” (Van Parijs 1992[b] p.229).

Organised labour needs to consider whether, in the current climate of individual work contracts and increasingly precarious employment, there is not considerable merit in collective provision of the basic necessities of life compared with relying upon individual employers to pay a wage sufficient to lift workers out of poverty. There are increasing numbers of workers whose only possible employment is in sweatshop conditions. They work full-time and still live in poverty. Advocates of Basic Income, like Philippe Van Parijs (1997) and Guy Standing (2002), argue that a universal Basic Income, because it provides an income above the poverty line, has a greater capacity than other systems to provide workers with the choice to accept or to refuse to work under the conditions on offer. A Basic Income in this sense provides “the right to life” which Speenhamland promised but failed to deliver. A Basic Income decreases work disincentives, compared with a means-tested benefit system, because it ensures that workers are always financially better off as a result of extra income from employment or investment.

Why this country needs a Universal Basic Income

The income support issues with which Australia is grappling at the start of the 21st century are remarkably similar to the income support difficulties which many other countries are confronting. Anyone who reads the seventy odd papers in the Basic Income European Network’s 2002 Geneva Conference Proceedings, which detail the work of researchers from every continent, could not fail to be struck by the similarities in the debates from the United States to England to continental Europe to South Africa, Australia, India and Brazil.

Some presenters want fully universal Basic Incomes introduced yesterday, some argue for partial Basic Incomes now as a step on the way to fully formed Basic Incomes later. Some want participation incomes and some job guarantees. Others argue for guaranteed minimum incomes, job subsidies, negative income tax, or tax credits. In fact, all this is very reminiscent of many welfare conferences in Australia and New Zealand in the last decade.

New Zealand was the first country in our region to embrace economic fundamentalist style employment and welfare policies (Kelsey 1995) and the first, following the election of a Labour Coalition Government to start to move away from it (The Jobs Letter). New Zealand has ended its ‘work for the dole’ program and started to dismantle its form of ‘mutual obligation’ programs. Alaska has for 20 years paid a small Basic Income to all permanent residents (amounting to 6% of total household income) from a fund financed by royalties from its oil fields (Goldsmith 2002). Ireland is moving towards introducing a poverty-eliminating Basic Income (Healy and Reynolds 2002). Brazil has legislated to gradually introduce Basic Income from 2005 (the first nation in the world to do so) and South Africa intends to introduce Basic Income policies for children. There is a plethora of journal articles, conference papers and books recently published advocating various Basic Income proposals from the United States (George 2002, Murray1997), Canada (Lerner, Clark and Needham1999) in Britain and in many other parts of Europe. Links to the most relevant Basic Income websites for Australian readers can be found at the BIGA (Basic Income Guarantee Australia) website: http:www.basicincome.qut.edu.au

There are many forms of generalised income guarantee schemes installed in Europe and there are plans afoot in several countries to move in the direction of a Basic Income (Van Parijs 2000). The actual model of Basic Income implemented in any country will depend on what other social wage components are retained and the capacity of that country to afford it. Van Parijs (2000) outlines many options a government might employ to reshape its tax and social welfare infrastructure as part of the Basic Income implementation process.

Australian readers reflecting on the last two decades in this country will be aware that there has been increased targeting of social security benefits, increased obligations have been imposed upon those who receive benefits, employment has become more precarious, industrial protections have been dismantled. What was once a reasonably egalitarian society with a frugal but reasonably comprehensive social security safety net has become a high risk “do it yourself welfare state” where inequality and inequity abounds (Costello 2003).

It needs to be remembered that in the decade prior to the 1980s there were many social welfare improvements and a great hope for even more. The Henderson Poverty Inquiry’s First Main Report (1975) endorsed the idea of introducing a guaranteed minimum income and the Whitlam Labor Government seemed accepting of the idea. It may seem to some a long time coming but the advances being made in Alaska, New Zealand, Europe (particularly Ireland), Brazil and South Africa mentioned above re- establish the hope that this country will return to its senses. In November 2000 the Committee for Economic Development of Australia acknowledged the need for an income guarantee in Australia. It is of interest that one of the editors of this report is Brian Howe, who, whilst Minister for Social Security in the Hawke/Keating Labour Government, had presided over the increased targeting of social security benefits. On the 4th August 2003 the Australian Council for Social Service (ACOSS) for the first time since the 1970s unequivocally recommended a minimum income guarantee for working age Australians. Rather than being an idea whose time has past, Basic Income is the emerging income support idea of the 21st century.

In the 18th century Thomas Paine argued that the natural resources of a country belong to all its citizens. From this idea emerged the Alaska Basic Income (Goldsmith 2002,Van Parijs 2000). In 1920 Milner argued that all residents of a country were equally entitled to 20% of the productive capacity of a country as their share of the “national dividend”. Rhys-Williams (1943,1965) wanted a guaranteed minimum income to ensure a floor beneath which people’s income would not fall without imposing a ceiling beyond which they could not rise. Friedman (1962) wanted a negative income tax to abolish the family poverty of the employed. Andre Gorz (1999) who, in 1985, had argued that people should receive an income guarantee in return for working 40,000 hours in their lifetime now argues for a right to income without this requirement. The book Arguing for a Basic Income, edited by Van Parijs 1992[a], presented many leading social scientists with the opportunity to suggest that a Basic Income should be provided as a right of permanent residence in a country.

Social protection

The prime reason for supporting a universal Basic Income is that it is the most socially just way of ensuring social protection (Standing 2001, 2002, Van Parijs 2000, 1997, 1992[a]). In an ideal world one might strive to ensure that everyone would have their needs fully met and that all would contribute their utmost to ensure that everyone’s needs were met. This was essentially what, in the post-Second World War period, the welfare state was meant to do. The existing Australian social welfare system, due largely to under funding as a result of constant attacks from economic fundamentalists, is less capable of ensuring social protection for the most vulnerable than the Australian welfare state of the late 1970s /early 1980s. Many of the family support structures, which were the first port of call for help in earlier times, have been eroded; full-time work above the poverty-line is harder to find. There is a very real need to find a way to provide social protection for all of Australia’s permanent residents and one that is sustainable into the future.

Feminism

Feminist writers (Christensen 2002, Schwarzenbach 2002) have mounted arguments in favour of Basic Income. Perhaps the most telling argument was that of Schwarzenbach (2002) who has argued that it is modernist society’s preoccupation with productive labour that blinds it to the need to put as much effort into reproductive (caring) aspects of life. She suggests that it is the idea that the only fully fledged citizens are paid producers that blinds us to these ancient insights. She notes that at the time of Plato’s republic it was the slaves who did the work and the citizens who performed the civic duties.

Intergenerational distribution young / old

In the 1960s and early 1970s age pensioners were often confined to poverty level incomes. The Henderson Poverty Inquiry (1975) exposed this sorry state of affairs and now the Australian social security system treats age pensioners far more generously than unemployed people and younger unemployed people in particular. In Europe similar age delineated inequities have led to intergenerational envy. Older people need to realise that their taxes went to pay the pensions of their parents’ generation. There is nothing left to pay theirs and if they don’t treat younger people better the young might refuse to contribute to older people’s support. A Basic Income, because it is paid equally to all, abolishes such intergenerational envy.

Dependency rhetoric

The Howard Government has set out to attack “welfare dependency” via the mechanism of imposing “mutual obligations” on all people of working age who receive social security. The Howard Government started imposing “mutual obligation” on the young unemployed and found it was able to generate electoral support and downward envy. So it has extended this policy via the McClure (2000) recommendation to envelop older workers, those in receipt of disability pensions and lone parents. It abolished unemployment benefit for 16-18 year olds and extended the period that younger people are forced to be reliant upon their families to 25 years and for some students for even longer periods.

The Howard Government has certainly lessened the degree to which individuals and families can rely on the government for support but this has come at a huge cost to families. This is a pyrrhic victory. The Government can rightly claim to have diminished government funded “welfare dependency” but has accelerated individuals “dependence upon families”.

Affordability

In any social policy process the first and last question asked is “Is it affordable?” No space has been devoted to this question so far and it must be addressed. The Henderson Poverty Inquiry (1975) showed that its guaranteed minimum income scheme was affordable. Keith Rankin (1998, 1997) has written extensively on the economic affordability of Basic Income in New Zealand. George (2002) has specifically addressed this question in relation to the United States. The Irish Government has declared it is affordable there (Healy and Reynolds 2002).

In Australia, Saunders (1995) worried that a full universal Basic Income might require a 50% income tax rate that he considered would make it politically unpalatable. This calculation was made prior to the GST, which now implemented, would lower the required tax rate more in line with what the Irish Government has recently declared would be necessary to pay for an above-poverty-line Basic Income [that is 43 percent.] This would mean that the required tax rate to pay for a Basic Income would be at or slightly below the current tax rate imposed on those whose income exceeds $60,000 [probably in the order of 45 percent]. Low-income earners, not receiving any form of family allowances or social security, who are paying income tax at 17 percent rate might feel that paying nearly half their employment income in tax would be a great imposition. Those who feel that way are not taking into account the fact that, under a Basic Income, though they would pay a higher tax rate they would also receive from the government each fortnight a Basic Income at the rate of the single age pension. That is, their effective marginal tax rate would be lower than they are paying at present.

Many low-income earners who receive social security or family allowances are currently paying, according to Ministers (Abbott 2003, and Vanstone 2003), effective marginal tax rates on earned income in the order of 70%. Two-thirds of Australian workers receive less than the average wage. It would seem from preliminary calculations we have done that workers earning nearly up to the average wage would finish up paying less net income tax or about the same as they do now. But they would have far more certainty and security of income than currently exists.

Perhaps the last word on affordability should be left to Jose Iglesias Fernandez (2002) who proposed a full universal Basic Income scheme for Catalonia (a region with a population of 6 million people) that would be paid at 50% of the average European Union wage. This is essentially double the Basic Income proposed in this paper (the lone age pension rate is 25% of the Average Wage in Australia). Considering whether his proposal was affordable Iglesias Fernandez wrote that since the Basic Income was only half of the per capita income that therefore the money needed to pay for it already existed and that it was simply a matter of redistribution.

Efficiency

There is a lot of confusion present in Australian discussions about efficiency and productivity. Clearly many individual companies and government departments are now more productive because of increased efficiencies in the sense that they can produce more products at lower costs because they have either improved processes or they have fewer staff. But in so doing they have often shifted social costs on to society at large.

In the 1970s the armed services, the railways, local, state and federal government departments and what is now called Telstra provided employment and training to a significant number of young people leaving school. This training provided a subsidy to private firms when, later in life, many of these workers shifted into the private sector. It made Australia as a whole more productive. Such widespread industry funded training is now largely a thing of the past. Nowadays governments employ far fewer young people and provide little training. Since 1974 youth unemployment has skyrocketed. Older unemployed people no longer required by businesses cannot obtain a job on the railways or in the filing rooms of large departments. They are just thrown on the industrial scrap heap where they are harassed by Amanda Vanstone’s (2003) “mutual obligation” Centrelink enforcers.

When Australia has 12 to 18 % of its working age labour force unemployed, underemployed, disguised unemployed or discouraged unemployed this clearly is not making an efficient use of the available labour in this country. The Commonwealth Government’s Committee on Employment Opportunities (1993) at page 1 of its Restoring Full Employment Report commented:

The loss of production through unemployment is the single greatest source of inefficiency in our economy. Unemployment is also the most important cause of inequality and alienation for individuals, families and communities.

Governments in Australia, New Zealand and Britain consistently suggest they are providing social security in an efficient and accountable manner. They are certainly capable of determining the cost of delivering specific categorical benefits to those recipients who are paid. They can and do calculate how much they ‘save’ by cutting people off income support when they do not meet the totality of eligibility requirements for any specific benefit. This is accounting or target efficiency. Governments seem uninterested in how people who are refused benefits get by, or what social costs are incurred in the wake of decisions to remove income support from such citizens. Target efficiency processes give no measure of how efficient the system of social security is as a whole. This is because the central issues, which should be taken into account when assessing the efficiency of a social security system, are not considered.

Some of the system wide efficiency questions, which would need to be answered if the efficiency of the system as a whole was being calculated, would be:

Are any of the people excluded from the social security system poor.
How many people who have an entitlement miss out?
How satisfied are the people who are confined to low levels of income support.
Does the social security system advance social justice for all permanent residents?
Are the human rights of all residents protected (or even enhanced)?
Does the system remove all obstacles to inclusion of people with a disability?
Are all genders, ages and ethnic groups treated equally or equitably?
Is there equitable treatment provided to city and country people, and does the system of income support provide sufficient security to recipients so as to allow them to contribute to society in ways with which they are comfortable?

There may be some jobs offered in any country that are extremely unsafe and poorly remunerated. Once a Basic Income was in place, those jobs would not be done because no one in their right mind would take them on the terms offered. Forcing people to take such jobs on the offered terms by threatening to remove unemployment benefits is unconscionable. Clearly if a society or an employer wants such work done, then the safety situation would need to be improved and the remuneration on offer increased to attract willing labour.

If the intention of those who promote categorical benefits which demand work readiness is to force workers to take every available job then this aim might be more efficiently achieved through a Basic Income than by the enforcement of the old poor law system of ‘less eligibility’. The inordinate invasion of privacy in the lives of applicants for unemployment benefits, the imposition of ‘mutual obligation’ and other stigmatising practices all have to be paid for by governments out of permanent resident’s taxes. If the aim is to ensure that all job vacancies are filled, the provision of an unconditional Basic Income has the capacity to do that without compulsion. This occurs because under a Basic Income system there is always an economic advantage gained from earning extra income. This would be both just and efficient.

Attempting to ascertain the degree of impairment experienced by an individual applicant and then paying those applicants who can establish they have met some predetermined ‘level of incapacity to work’ is very costly and an extraordinarily inefficient method of providing income support to those with a disability. People with equivalent levels of impairments often have widely different employment histories (Perry 1995 p.29). It would be more efficient to provide a universal income guarantee if the desire is to encourage productivity / contribution / inclusion by those who have a disability. Australian governments have recognised this in relation to Blind Pensioners (Jordan 1984, Kewley 1973) but continue to subject others who have severe disabilities to stigmatised, selective, targeted, categorical payments.

Much of the argument about the efficiency of a Basic Income has concentrated on the supply of benefits, 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 wider efficiency arguments that can and should be mounted in support of an unconditional Basic Income.

A Basic Income requires the least interference in the lives of citizens.
It supplies all permanent residents with equal assistance.
It is the most inclusive form of income support payment and the most secure, thus enhancing citizenship.
It provides sufficient income to allow the possibility that people will explore their creative capacity.
It removes many of the obstacles to a reinvigoration of the industrial, technical and computing infrastructure.
It allows the State a fuller understanding of the impact of its other social wage policies.

Conclusion

At the beginning of this paper it was suggested that finding a way to implement a full universal Basic Income is essentially the search for the answer to just one question: “How do we best meet the income support needs of all those who find they are without the capacity to provide for themselves?” We found we were on a merry-go-round from Christ to Marx and back again. When Christ said “The poor are always with us” he was not justifying the presence of poverty rather he was admonishing his followers for their failure to forgive the debt of the poor as they were required to in the scriptures (The Religion Report 2000). Karl Marx and Frederick Engels in The Communist Manifesto set out the promise of Communism to provide “To each according to their need. From each according to their ability.” In much the same way as Christ is yet to convince his followers to forgive the debts of the poor, no-one has yet implemented a way of assisting all in financial need and extracting from the rich their full dues to pay for such assistance. But a Basic Income has the capacity to provide an equal amount of income to all at a rate that lifts every citizen beyond poverty.

A universal Basic Income is not a utopian idea. It is an efficient affordable way to ensure no Australian permanent resident remains in poverty. However, a Basic Income is just that – an unconditional universal income guarantee. It delivers an income floor without impeding 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” and as a result create a “do it yourself welfare state”.

A List of Abbreviations

ACOSS; Australian Council of Social Service
ALP; Australian Labor Party
BIEN; Basic Income European Network
BIGA; Basic Income Guarantee Australia
CDEP; Community Development Employment Program
LHMU; Australian Liquor Hospitality and Miscellaneous Workers Union’s

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Shields, J., O’Donnell, M. & O’Brien, J. (2003) The Bucks Stop Here: Private Sector Remuneration in Australia. Labour Council of New South Wales, Sydney. http://council.labor.net.au/community//public//files/The%20Buck%20Stops% 20Here.pdf
Smith , J. (1993) Taxing Popularity. Federalism Research Centre [ANU], Canberra.
Standing, G. (2001) “Globalisation: The Eight Crises of Social Protection.” http://www.commerce.uct.ac.za/dpru/standing.pdf
Standing, G. (2002) Beyond the New Paternalism: Basic Security as Equality. Verso, London.
Stretton, H. (1996) Poor laws of 1834 and 1996: from Poor law to poor laws. Brotherhood of St Laurence , Fitzroy.
Suplicy, E. (2002) “Legitimising basic Income in Developing Countries:” BIEN 9th International Conference, Geneva, Sept.12-14.
The Jobs Letter http://www.jobsletter.org.nz/
The Religion Report (2000) “Welfare Reform-Whose Responsibility?” ABC Radio National. 23rd August. http://www.abc.net.au/rn/talks/8.30/relrpt/stories/s166582.htm
Tomlinson, J. (2003) “Young people and old struggles.” Keynote Paper given at the bi-annual Queensland State Youth Affairs Conference, Mackay, Queensland, April.
Tomlinson, J. (2002[a]) “Income Support for Unemployed People: Human Rights versus Utilitarian Rights.” Journal of Economic and Social Policy. Vol. 6, No.2, Winter, pp.36-55.
Tomlinson, J. (2002 [b]) “How dare we.” Paper given at the 9th National Conference on Unemployment. Centre for Full employment and Equity, University of Newcastle, December.
Tomlinson, J. (2001) Income Insecurity: The Basic Income Alternative. http://www.basicincome.qut.edu.au/interest/e-books.jsp [also available at] http://www.geocities.com/ubinz/JT/IncomeInsecurity/
Tomlinson, J. (1989) The Political Obstacles to the introduction of a Guaranteed Minimum Income. PhD Thesis Murdoch University. http://www.basicincome.qut.edu.au/interest/theses.jsp
Vanderborght, Y. (2002) “Basic Income in Belgium and the Netherlands:” BIEN 9th International Conference, Geneva, Sept.12-14.
Van Parijs, P. (ed.) (2000) “Basic Income: A Simple and Powerful Idea for the 21st. Century. Background Paper BIEN Conference Berlin 6-7th. October. BIEN Web Site http://www.bien.be/Archive/Congress/Geneva2002.htm
Van Parijs (1997) Real Freedom for All – What (if Anything) Can Justify Capitalism? Oxford University, Oxford.
Van Parijs (1992[a]) Arguing for Basic Income, Verso, London.
Van Parijs, P. (1992[b]) “The Second Marriage of Justice and Efficiency.” in Van Parijs, P. (ed.) Arguing For Basic Income. Verso, London.
Vanstone, A. (2003) “Passive Welfare – Killing Them Softly?” Paper given at Coffee http://e1.newcastle.edu.au/coffee/docs/public_policy/vanstone_21_07_2003.
Van Trier, W. (1995) “Every One A King.” PhD. Thesis Department of Sociology, K.U. Leuven.
Watts, M. (2002) “A system of basic Income Versus the Job Guarantee.” BIEN 9th International Conference, Geneva, Sept.12-14.
Widerquist, K. (2002) “A Failure to Communicate:” BIEN 9th International Conference, Geneva, Sept.12-14.
Whiteford, P. (1981) “Work Incentive Experiments in the United States and Canada.” Research Paper No.12 Research and Statistics Branch, Development Division, Department of Social Security, Canberra.
Ziguras, S., Dufty, G. & Considine, M. (2003) Much Obliged: Disadvantaged job seekers’ experiences of the mutual obligation regime. Brotherhood of St Laurence and St. Vincent de Paul http://bsl.org.au/pdfs/MOreportV2.pdf

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Why Basic Income? Why now?

Posted on September 13, 2015

Written for the Power to Persuade Symposium, in International Basic Income Week 2015.

It has been fashionable to claim that Australia never had a system akin to British Poor Law welfare relief. To some extent it is true that prior to federation there was no formalised poor law system in place but the churches, lodges, state governments and charities ran shelters for orphans, invalids and widows that bore similarities to those, operating in England at the time. The treatment of Aborigines on missions and settlements was not out of keeping with the way Irish peasants were treated by the English gentry in Ireland.

The first Australian federal income maintenance legislation concerned age and invalid pension and was passed in 1908; it came into effect in 1910. This was the first of many targeted, categorical and means tested payments. From 1910 until 1973, when Bill Hayden was the minister responsible for social security, applicants for pensions had to establish they were of good moral character before they would be paid. When I worked in the department (responsible for social security) in the late 1960s and early 70s, I regularly saw letters which had been sent to applicants advising that they were “not deemed worthy to receive a pension”.

At that time a number of staff in the Brisbane office believed that many of those who were unemployed were likely to shirk work and that those applying for sickness benefit or invalid pensions were probably malingerers. Such attitudes were common in English Poor Law institutions and in fact predated the 1601 Poor Law. Joel Handler traced injunctions against assisting “sturdy beggars” back to 1348. (1)

The point I am making is that whilst we may not have had exactly the same welfare institutions as in the British Poor Law system, our social welfare system was imbued with many of the same attitudes that informed English Poor Law administration. Examples abound that these same attitudes exist in the 21st century. For example:

Julia Gillard’s statements about “The simple dignity that work brings.”
John Howard’s oft repeated demand that those who receive social security “should give something back”.
The current claim raised by the Coalition side of the House that women on maternity leave who are assisted both by their employer and by the government maternity leave scheme are “double dipping”.
Mal Brough’s and Jenni Macklin’s bipartisan support for paternalistic intervention into the lives of Northern Territory Aborigines.
The suggestion made by members on both sides of the House that pensions can be cut because they are welfare but that excessively generous superannuation tax concessions are untouchable because they are individually earned.

Hugh Stretton in 1996 entitled his address to The Brotherhood of St Laurence “Poor Laws 1834 to 1996”. He did this to demonstrate the continuation of the British Poor Law belief system in ideologies prevalent in the modern Australian welfare state.

Joe Hockey’s “end of entitlement” 2014 budget was just one outstanding example of the cutbacks to income maintenance that the 21st century has inflicted on disability support pensioners, lone parents, students and those without work. These cutbacks reveal arcane attitudes to welfare assistance that have survived from the earliest days when charity was doled out of the parish poor box.

Though many less affluent people have been assisted by Australia’s income support system, they are not assisted equally. Many do not apply for benefits and pensions to which they may have an entitlement. Discretion is widespread in social security legislation and not all with an entitlement receive their full entitlement. Those less bureaucratically sophisticated, less affluent and less educated are the least likely to receive their full entitlement. One hundred and five years of social security administration has demonstrated that clients of the department are not treated equitably – nor are they treated equally.

The rise of Neo-liberalism with its demand that the mode of production be unregulated whilst the mode of distribution be highly regulated so as to avert “malingering” and “shirking” has underlined the excessive discretion imbedded in the categorical system. This has renewed the need to find other methods of poverty relief besides those of our means tested, targeted, categorical social security system.

There are alternative ways of approaching income maintenance. One option would be to guarantee every permanent resident a minimum income, irrespective of their circumstances.

Universal income guarantees

There have been many advocates of universal income guarantees in Australia, the one who had the greatest impact was Professor Ronald Henderson. In 1975, in the first main report of the Poverty Inquiry, he recommended the introduction of a system of income guarantees that had the potential to ensure that no one remained in poverty. He called this proposal a Guaranteed Minimum Income.

What he proposed was basically a two-tiered system where those who had already qualified for a social security payment would be paid at 100 per cent of the poverty line whilst others in financial need who had not established their entitlement to social security would be guaranteed an income of 55 per cent of the poverty line. Henderson’s proposal resembled that of economist Lady Rhys Williams, a British Liberal MP, who had in 1943 written a book entitled Something to look forward to in which she had championed the idea of a universal guaranteed minimum income.

In 1975, a group of Commonwealth public servants, calling themselves the Priorities Review Staff proposed a different income guarantee in the form of a Negative Income Tax along lines not dissimilar to that put forward in 1962 by Milton Friedman in Capitalism and Freedom.

Whilst the Guarantee Minimum Income and the Negative Income Tax are more comprehensive approaches to the abolition of poverty, both still embody forms of mean testing and claw backs. Both involve complex assessments of eligibility. There is a better way of abolishing poverty and that is by means of a universal Basic Income.

A Basic Income would be paid at a rate above the Henderson poverty line to each and every permanent resident of Australia, irrespective of work contribution, marital status, whom they live with or any other social status. Children would have an entitlement in their own right that would be paid at a lower rate.

A Basic Income has the capacity to abolish poverty. It would end the need for much of the existing categorical system of welfare assistance. One exception to this is the area of disability where special services and payments would be required to assist those who are severely disabled. It would not involve claw backs or means testing. It would be an efficient way of banishing poverty and would end Australian politicians’ capacity to refuse assistance to those they consider unworthy, malingerers or shirkers.

A Basic Income’s only eligibility requirement is the need to establish that one is a permanent resident of Australia. It is essentially a rights based approach to income security based on citizenship/residency that has the capacity to build a more egalitarian society through mutual support and social solidarity. It abolishes the scourge of downward envy that is generated by those who believe that recipients of social security “should give something back”. Yet it allows those who are excluded from the labour market sufficient funds for them to participate and contribute to society on their own terms.

A Basic Income treats everyone equally. It does not purport to treat everyone equitably. But, because the amount of Basic Income is known, it is much easier to then develop other social policies that can then lead to equity.

Acknowledgement

I wish to thank Penny Harrington for her editorial assistance and continuing encouragement.

Footnote

(1) Joel Handler (2004 Footnote 217, p. 56.) traces the English legislative origins of such policies to the 1348 Statutes of Labourers with its concern to avoid assisting the “sturdy beggars”. Handler, J. (2004) “Social Citizenship and Workfare in the United States and Western Europe.” Basic Income European Network 2002 Congress.

http://www.etes.ucl.ac.be/BIEN/Archive/Congress/Geneva2002.htm

(accessed May 2006)

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Why the ALP should introduce a Universal Basic Income

At the July 2018 Basic Income Earth Network Congress in Tampere, Finland, Rutger Bregman author of Utopia for Realists said that when he asked well off people about universal basic income they asked him what the rate of payment would be. He said that when he asked less affluent people about universal basic income they asked what conditions would apply to the receipt of the payment. I am pretty sure he’d find a similar phenomenon in Australia. You only have to look at the increasingly punitive conditions being imposed on recipients of Centrelink payments to understand why.

Unemployment Benefit (now called New Start Allowance) has always required recipients to establish they were fit, able bodied and ready for work. Since the rise of neo-liberalism, in the late 1970s, there has been an expansion of the additional obligations placed upon those forced to rely upon such payments. Keating’s 1994 reciprocal obligations at least came with the promise that the government would guarantee to provide a job to those without work for 18 months. This was just the prelude to Howard’s increasingly onerous mutual obligation and work for the dole regimes.

Aboriginal people, who are living in rural and remote regions, are subjected to the most arduous requirements and are the most frequently breached of all categories of people subjected to work for the dole programs. This is symptomatic of all forms of targeted/categorical/means-tested welfare payments. The least bureaucratically sophisticated, the most remote, the least educated, and the poorest citizens are the ones most likely to miss out on some or all of their income support assistance.

Politicians of all persuasions are fond of suggesting that social security payments are paid to those in most need. During my 50-year involvement in the welfare industry, in Australia, I have never found this to be the case. Instead of assistance going to those experiencing the greatest financial difficulties, it is directed towards those with the most political clout such as age pensioners and others who are the most socially valued. Such evaluations are only tenuously tied to need.

A major problem with selectivity/targeting/means-testing and conditionality occurs at a societal level. Such programs undermine social solidarity, evoke downward envy, devalue citizenship and undermine generosity of spirit. The entire neo-liberal philosophical emphasis is devoted to enhancing a dog eat dog competitive spirit by not relying on others (particularly the state). Such non-reliance on others which neo-liberals mistakenly term “self-help” is in reality a fig leaf for the neglect of less fortunate citizens. At its most extreme it is a call to glorify the survival of the fittest economic players. The end result is a mean-minded society without a soul.

It’s Time

Neo-liberal economics has brought us the global economic recession, precarious employment, declining unionisation, stagnating wages, skyrocketing profits and all the other joys of their dog eat dog world. Now is the right time for the ALP to reject the neo-liberal economic model and return to orthodox social solidarity thinking.

By committing itself to a universal basic income, the ALP would go some considerable distance to demonstrating it was really committed to the welfare of all Australian permanent residents. It would be the 21^stcentury equivalent of Ben Chifley’s “light on the hill”.

Ideally a universal basic income would be paid at an above the poverty line rate to every individual permanent resident whether they lived alone or with others. It would be provided to all irrespective of whether they worked or not and without paying any regard to wealth or income. It would not be able to be garnisheed by governments, companies or other individuals. It would end enforced dependency on others. Such a payment would allow governments to know the minimum income that every citizen had at their disposal and would provide a basis on which governments could develop their education, health, disability, housing and other community services.

The basic income would not be taxed. But all other income, from whatever source would be taxed from the first to the last dollar received. The rate of income tax required to pay for such an income support policy would depend on what other revenue measures, such as consumption taxes, pollution taxes and wealth taxes were imposed. Because everyone would receive the basic income people earning up to average weekly wages would find they were paying about the same net rate of tax as at present. Those earning more than average weekly wages would pay more than at present. It is worth remembering that two thirds of Australians earn less than the average weekly wage.

Many workers are facing the prospect of being replaced by robots, others are experiencing increasingly casualised and precarious employment and all who have to rely on social security will be the big winners once a basic income was in place. As Philippe Van Parijs and Yannick Vanderborght write in their 2017 book Basic Income: A radical Proposal for a Free Society and a Sane Economy a basic income’s “point is not just to soothe misery but to liberate us all.” (p. 12)

The big end of town would be required to pay the appropriate amount of tax, the black economy would need to be decreased, multinational companies and the resource sector would need to pay their fair share of tax. Negative gearing would need to be abolished and capital gains taxes restored to original levels. Family trusts would become a thing of the past.

A universal basic income, unlike the existing targeted, means-tested welfare system with its combine benefit withdrawal and income tax deductions on earned income would not create poverty traps and adverse incentives. Any additional income earned would be taxed and so there would always be an incentive to earn. Under the existing welfare system people can lose between 50 and 150% of additional income once their income free limit has been reached.

A basic income is universal citizenship right not a handout. It increases social solidarity amongst all permanent residents because it treats all equally. It provides the basis for governments to improve equity through its other social programs. It increases personal satisfaction by allowing people to pursue their vocation, education or artistic endeavour whilst encouraging them to engage in whatever employment is available. At the same time, because it provides a guaranteed livable income it prevents people being conscripted to work in unsafe, exploitative or undesirable jobs.

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Work for the dole kills jobs

Green left Weekly 11/2/1998 p.12

Prime Ministers Howard in Australia, Shipley in New Zealand and Blair in Britain all utilise the dependency rhetoric when it falls to them to describe the behaviour of lone parents and the unemployed. They claim the central issue in relation to welfare policies is the need to move people away from welfare ‘dependency’ to independence from welfare. The latest example of this was Howard’s 28 January decision to force all young people unemployed for more than 6 months to join his work for the dole scheme.

Prime Minister Howard is being disingenuous in attempting to suggest that he is really addressing the issue of ‘dependence’ on welfare or independence from welfare. Howard is trying to immerse himself in a false debate because he is not prepared to engage in the real welfare debate – the income security /insecurity debate.

The attempt by political leaders in Britain, Australia, and New Zealand to deflect attention from core welfare issues has not escaped the attention of poverty activists. In 1997 at Massey University, the Auckland Peoples’ Centre sponsored an alternative conference to the New Zealand Government’s Beyond Dependency Conference. The Peoples’ Centre Conference was entitled Beyond Poverty. In October 1997, the New Zealand Council of Christian Social Services published a discussion paper on work for the dole schemes in which they exposed many of the flaws in the ‘dependency’ arguments and went on to strongly reject the need to compel welfare recipients to work.

Clearly politicians in Australia and New Zealand have been impotent in their attempts to solve unemployment. They have not had the wit to create sufficient jobs for all who want them, nor are they willing to shorten the working week so that the available work might be shared by the entire workforce.The Howard Government, following the New Zealand example diminished the welfare state. Coupled with the attack on the workless has been a reduction in the employment conditions of workers.

Under the accord Labor traded off wage increases for an expanded social wage but the incoming Howard Government opted for a more direct attack on working conditions favoured by the conservatives in New Zealand, implemented through employment contract legislation. Governments in Britain, New Zealand and Australia have recognised that unless the reserve army of labour is mobilised as a threat to those in work then a solidarity between workers and workless might develop. The solution proposed by the Howard Governments has been to reinstigate the 1930s”susso” schemes which are compulsory work for the dole programs.

The ideological attractiveness of introducing compulsory work for the dole schemes derives from the economic fundamentalist desire to reward the rich and compel the poor. According to right wing political scientist David Green, the payment of unemployment benefits provides those without work with “dutiless rights” in the jargon of the Australian Prime Minister Howard such social security payments amount to “not being allowed the opportunity to demonstrate they are meeting their mutual obligations to the community”. What they really mean to say is “dole bludgers are getting something for nothing”.

The political attraction of work for the dole to governments is similar to that of the United States where ‘workfare’ schemes have been in place for a few years. Ill informed voters object to their tax dollars being wasted on welfare recipients and the unemployed. Karen Adams researcher with the New Zealand Council of Christain Social Services says “Ordinary citizens either don’t know or refuse to acknowledge that creating workfare jobs lessens the demand for paid labour. This process is called displacement. Many supporters of compulsary work for the dole schemes have little understanding that it might be their job which is displaced.”

Voters don’t have the time to devote to an understanding of many of the subtleties of this complex issue: they are looking for a simple solution and some simply accept what their political masters tell them. There is also the attractiveness in these schemes for the mean who feel that they are getting a return on their taxes by forcing the unemployed to work for a pittance, in one sense they are getting ‘something for nothing’ or next to nothing – well at least they are not paying directly for it.

The average Australian voter is unaware that already in the United States major industry contracts are being let to companies which use ‘workfare’ employees along side prison labour. There is nothing to prevent the present government introducing similar operations here. Australian industry utilises prison labour. If such compelled labour does not take their job it might undercut their next contract to supply goods or services. It is perplexing that voters who fear that welfare recipients and unemployed people might be ‘getting something for nothing’ support programs where the voters hope to ‘get something for nothing’ at the expense of the unemployed.

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Would you buy a second hand war from this man?

Want to buy a second hand war?
Want to buy the war in Iraq?
We went there for oil, made Iraqi blood boil
now we’re asking what for
and wondering how we ever get back.
The profits have gone and hope is forlorn
it’s preloved, it’s used and we feel abused
want to buy a second hand war?
We killed Saddam, it was a great plan
want to buy a second hand war?
We’ve bombed the people, the mosques and the steeple,
we’ve displaced many poor as we wage this war.
We had a great dream but now it would seem
that we are bereft of ideas.
We’ve bombed Shiites, Sunni and Kurds
we killed mothers and left children in tears
want to buy a second hand war?
We’ve murdered at will or just for the thrill
want to buy a second hand war?
We have oil leases but the country’s in pieces
our soldiers are dying, their mothers crying
please buy this second hand war!

First published in Union Song web site 2/4/2007 http://song.com/u490.html
also in Al-Moharer 16/4/2007
http://www.al-moharer.net/ mohhtm/tomlinson255.htm
also published in New Community Quarterly. Vo.5, No.2 Winter 2007

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Would you rather trust Howard or the Dodgy Brothers?

Who do you trust
to rip off workers
to promote the interests
of all rich shirkers;
to smash his antagonists?
Who do you trust
to crack down on unionists?
Who do you trust
to massage the economy
to lie and steal and
invade your autonomy?
Who do you trust
with climate change
with global warming
with your small change
and Iraq storming?
Who do you trust
to help the workers win,
to rip away awards
and make the bosses grin?
Who do you trust
to behave decently
to help the less fortunate
to treat the poor honestly?
Who do you trust
with public health
to connive and cheat
to do deals in stealth?
Who do you trust
with education
to care for your interests
and those of the nation?
Who do you trust
to weave and dodge
and invite bosses to the Lodge?
Who do you trust
to live at Kirribilli
and entertain Liberals willy nilly?

First published Al-Moharer 27/6/2007
http://www.al-moharer/mohhtm/tomlinson259.htm

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Young people and old struggles

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.

Introduction

The things which structure Australian society are:

Race
Gender
Class
Age
Locality and
the way in which we respond to people with disabilities.

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:

best at minimizing inequality,
better at reducing poverty,
equal with Germany in promoting stability, best at promoting autonomy, and

“…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)”.

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 depth of the problem – a brief history of recent cutbacks in social entitlement – they are stealing our security

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:

significantly expanded ASIO’s surveillance powers,
widened the definition of what constitutes an act of terror,
made it an offence to receive unauthorised information about the actions of the Government,
allowed ASIO to hold ‘terrorist’ suspects for 48 hours without access to a lawyer, and
sanctioned jail terms of 5 years for anyone who refuses to answer questions put to them by ASIO. Australians need to remember that “The price of eternal vigilance is Liberty.”

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:

Australians’ Social Security entitlements,
Indigenous Australians’ security of land tenure,
migrants’ security, and
the security of temporary protection visa holders.

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.

Two possible scenarios

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.

Conservative compelled compact: Scenario (1) loser pays

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:

Anyone who has their children taken into care by the state will accrue a debt equalling the cost of the children’s care.
Nursing home costs and any social security benefit or pension paid to the person (and not subsequently refunded to the Tax Office during a person’s life time) will be recovered from that person’s estate.
Administrative penalties imposed by the Federal Government and compliant state and local governments and court imposed fines will be handled by the Taxation Office.
The full cost of maintaining a person in prison or in community correction programs will be raised as a debt to the State.
The cost of all hospital, pharmaceutical, medical, schooling, tertiary education, social security and community services supplied by public instrumentalities which are either not paid for at the time or not covered by private health or other insurance will accrue as a tax debt to be paid off once the person’s income reaches a certain amount.
Fines and government administrative penalties would probably start to be recouped whenever the income of the person exceeds 85% of the established Henderson poverty line.
In the event of some residue of a deceased person’s estate remaining after all the person’s debts to the State have been recovered then the residue will be used to pay any outstanding Tax Office debts owed by the person’s spouse or children. (See Table I for some current developments).

Table 1
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).

Universal rights based provision: Scenario two

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:

their income or assets,
their labour market status,
whether they live alone or with others, and
any other social status.

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:

are any poor people excluded from the social security system,
how many people who have an entitlement miss out,
how satisfied are the people who are confined to low levels of income support,
does the social security system advance social justice for all permanent residents,
are the human rights of all residents protected (or even enhanced),
does the system remove all obstacles to the inclusion of people with a disability,
are all genders, ages and ethnic groups treated equally or equitably,
is there equitable treatment provided to city and country people, and
does the system provide sufficient security to recipients to allow them to contribute to society in ways with which they are comfortable?

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:

A Basic Income requires the least interference in the lives of citizens.
It supplies all permanent residents with equal assistance.
It is the most inclusive form of income support payment and the most secure, thus enhancing citizenship.
It provides sufficient income to allow the possibility that people will explore their creative capacity.
It removes many of the obstacles to a reinvigoration of the industrial, technical and computing infrastructure.
It allows the State a fuller understanding of the impact of its other social wage policies.

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.

Epilogue:

Common cause

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.

Bibliography

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More Info

Archive

Abstract

Pre-Federation

A brief look at the Australian welfare state

From the Poor Law to Poor Laws

Choose an alternative

Summary

Australian Income Guarantees

Now

Abstract

Need

The family

The workers

Poverty

Redistribution

Expose the system

The lack of debate

Accountability

Abstract

A regurgitation of the Latham/Pearson line

An analysis

Conclusion

New jobs non-routine

Possible causes

Defining the problem

Peaceful ways to solve the jobless question

Conclusion

Abstract

Disability and citizenship

Less eligibility and economic fundamentalism

The conservative liberal

The left

Basic Incomes

The confusing appeal of dependency

Income guarantees

Conclusion

Abstract

Disability and citizenship

Less eligibility and economic fundamentalism

The conservative liberal

The left

Basic incomes

The confusing appeal of dependency

Income guarantees

Question one

Question two

Question four

Conclusion

There are alternatives

A brief history of East Timor

Minimum wages legislation

Job guarantees

Social welfare payments

Basic Income

Discussion of the alternative policies

Conclusion

International lessons

Precarious employment and security

The future

Why the military?

The military necessity

Redefining contribution: not as obligation but as a right to contribute

The military and contributions

The profound question

First world countries

Basic Income

The construction of the Australian income support system

The light on the hill: The period from the very late 1960s until the early 1980s

Howard’s welfare economics

Income support schemes

Social Insurance

Government run Superannuation for all workers

Private Superannuation

Other privatised solutions

The Job Guarantee

Welfare assistance

Social Security

Participation income

Guaranteed Minimum Income, Negative Income Tax and Tax Credits

What is a Basic Income?