Don’t be despondent about ‘dependency’

Some people in Australia are concerned about the painful brain condition called dependency. However, the only people who contract this condition are those who believe that the only possible welfare system is a targeted one.

The usual justification for targeted welfare is that it directs the greatest assistance to those in greatest need. Its advocates claim further that it is only being in need which justifies being paid assistance. The attached assumption is that the amount of assistance provided actually meets the recipient’s needs. The argument is more than a little circular and less than convincing, but it has been used in Australia since at least 1908 to justify paying income support.

The main claim of the targeted welfare system was that it assisted all who were in need through no fault of their own. This qualification on eligibility has a long lineage, stretching as far back as the Elizabethan Poor Laws of 16th century England. Under all such welfare systems since, someone has to adjudicate, to judge the difference between the deserving and the undeserving poor, to apportion blame or righteousness to the applicants for assistance. That has been the role appropriated by the targeted welfare system itself. Targeted welfare is a mid-point in Australian welfare debates, positioned between two diametrically opposed views: one view rejects the idea of paying income support to anyone, while the other view upholds the idea that income support should be universal and available to all.

Those who reject income support do so on the basis that if people can’t support themselves, they are a drain on the rest of us and that, if you pander to such people, it drags the rest of us down. Adherents of this view do not support targeted welfare because they claim it leads people to distort their circumstances so as to fit the definition of needy. They claim that providing unemployed people with income support, for example, encourages them to delay seeking work. That is, they argue, targeted welfare rewards the dreaded dependency.

Since the 16th century, those holding this view have largely accepted that leaving people to starve to death in the crossroads is bad form. This position therefore may have some utopian intellectual appeal, but it has little practical use. Advocates of this view therefore tend to claim that they back a targeted welfare system, only one which is even better targeted and discriminates even more sharply between the deserving and undeserving.

Both those who favour abolishing welfare (for the poor) and those who favour targeting claim that universal welfare is too expensive. They also suggest that universal provision is inefficient, because it provides assistance to many who are not in need. Those attached to the abolish assistance position sometimes argue that universalism creates the worst form of moral jeopardy because it ushers in the nanny state which confines all, irrespective of their means, to dependency.

Supporters of universalism claim that their system at least ensures that no-one in financial need is denied the opportunity to survive. No-one is dependent, they argue, because those who have no income besides the universal income guarantee are simply asserting their rights as citizens to the minimum income. The income support they receive is identical to that which all other residents receive. In this way, universal policies are the epitome of an inclusive social policy. Universalists point out that, because there are no means tests, there are no poverty traps and no financial disincentives which discourage engagement in paid work. Further, there is no invasion of people’s privacy and no compulsion. Under universal welfare, there is, in short, more freedom, not less.

An income guarantee is affordable. A universal payment ensures that all in financial need are provided with a minimum level of income, which is surely the base promise (rarely delivered) of the existing welfare system. The amount of income support likely to be paid is about survival level. In Australia it is likely that the rate of assistance would be at about  the official Henderson Poverty Line.

The provision of a sustaining universal payment avoids the flow-on costs which accrue in any society which marginalises some of its residents by relegating them to an impoverished existence.

Supporters of universalism suggest governments require only the taxation system to tax those whose income levels are such that they don’t need the assistance. Such a system does away with the confusing and inefficient
dual taxation and social security means testing withdrawal rates. Further, the Australian welfare budget is allocated out of what is left once government has done all the important things, like subsidies to industry and purchases of the latest military toys. There are certainly savings which could be made by ending these real forms of dependency, namely, the dependency of business on government handouts.

One further question which universal income support answers is how do we keep it simple? Most Australians don’t want all the complexity of the existing welfare system. They want the government to come up with an income support system which even the least sophisticated in this community can understand. John Howard, just after he became opposition leader in the early 1990s, said families should know what their entitlements are. At present families don’t know, social workers don’t know, academics don’t know, even most of the bureaucrats in social security don’t know the amount of income support to which residents are entitled.

The reason we haven’t got an income guarantee is very simple. In Darwin I sat at the feet of a long-term unemployed person, a wise man called Strider, who told me that the reason the government refuses to have a universal income guarantee is because it suffers from a lack of faith in people.

Strider said that governments believe the unemployed wouldn’t work in an iron lung. I agree with him.
There is no evidence that supports such conclusions about those Australian people who are confined to the reserve army of labour. People don’t want to work in dangerous jobs, or in situations where they are sexually harassed, or in a whole range of situations where they are exploited, but that doesn’t mean they don’t want to work.

A universal income guarantee would provide an opportunity for people to participate in a whole range of ways, either in the paid labour force or by undertaking voluntary work. John Howard’s federal government, whilst claiming to be in the vanguard of the push for smaller government, has tied its fortunes to the mutual obligation masthead. This system requires massive intervention in the lives of those who receive income support. The work for the dole scheme and compulsory literacy training are just two obnoxious features of the Howard government’s mutual obligation policy. This socially conservative government compels people to participate in an approved activity in return for receiving income support. This is a long way removed from people voluntarily involving themselves in a community activity. It is like having to sing hymns for your supper in a church-run soup kitchen.

The absence of universal income guarantees is explained by a failure of trust; dependency rhetoric is just a mystification. People should trust each other and be prepared to say, I’m prepared to pay 50% of what I earn in tax, providing that I’ll know that no-one else in this country is without food, housing, education and decent health care. If such a system were to be installed, most Australians would go to bed happy.