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 21st. 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.

Other privatised solutions

Some workers, particularly those who in recent years have been forced by their ‘employer’ to become contractors, have private unemployment, sickness and accident insurance. The premiums are expensive, and as many found, following the collapse of a major insurance firm (HIH), the certainty that such insurance offered was illusory. In any case, even if an insurance company could be relied upon to pay out ‘entitlements’ in respect of private unemployment, sickness and accident insurance, it is not an affordable option for the majority of workers. Such schemes provide, for those who can afford them, some protection against misfortunes encountered.

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.

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. He wrote:

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.


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:

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


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