‘Mutual obligation’ policies do little to help the poor and underemployed

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

Posted Friday, 20 February 2004

The Howard government purports to be a pragmatic government interested in achieving practical outcomes. It claims the imposition of its “mutual obligation” regime upon social security recipients is designed to sort out the “needy from the greedy” and to prevent recipients becoming “welfare dependent”.

Many scholars argue that social security regimes like Australia’s fail to assist many poor people simply because of design faults in every targeted welfare system. Other writers declare the concept of “mutual obligation” in income support systems as ethically unsupportable. A leading ethicist, Catriona McKinnon, mounts a sustained argument that reciprocal obligations should not be attached to elementary income support programs but should govern the distribution of privileges. Professor Robert Goodin and other researchers have established that the problem of “welfare dependency” is of little consequence because, even if it is a real phenomenon then, it affects very few recipients. A much more widespread problem, which is exacerbated by the imposition of “mutual obligation”, is the fact that so many of the people who are eligible for targeted income support programs fail to be paid. Still others point out that design faults in tax/social security claw-back system create a far greater problem for people on lower incomes (pdf, 132Kb) than does any alleged recipients’ fecklessness induced by receiving social services. Even the Health Minister, Tony Abbott, acknowledges that the Australian tax/social security claw-back system creates substantial poverty traps.

Federal legislation and regulations create these poverty traps. It would be possible for any reasonably competent parliamentary legal counsel, working with economic advice, to remove such poverty traps within a matter of months. Such action or failure to act is entirely the prerogative of the Government.

The Howard government claims to believe in the economic rational person who is motivated by economic self- interest. Instead of removing any financial incentives to choose welfare over work, it has set out on a far more contentious course to discover the “unworthy” and assist the “worthy” to avoid the scourge of “welfare dependence”. This is a paternalistic imposition upon the entire community in an attempt to change the motivation of a few.

If economic pragmatism were the force driving the Howard Government, the most effective way to end the alleged propensity of social security recipients to remain in receipt of income support, as a result of poverty traps, would be to remove the poverty traps. Such an action is clearly within the competence of this Government.

Even the most ardent supporter of “mutual obligation” policies would admit that “weeding out the unworthy” and assisting people to escape from the clutches of debilitating “welfare dependence” is an inexact science. Despite his Department informing him they had no evidence as to why people had dropped out of “mutual obligation” programs the then Minister for Employment, Mal Brough, commented “Compliance is a strong motivator and it also flushes out dole cheats.” Such a statement implies an unwarranted certitude.

The importance of being worthy

The fact that the Howard Government has chosen to undertake an indirect rather than a direct route to ending “welfare dependence” raises the possibility that “weeding out the unworthy” has a greater attractiveness to this government than ending “welfare dependence”.

The paternalism implicit in the imposition of “mutual obligation” upon social security recipients would seem to derive from Howard’s social conservatism rather than his economic fundamentalist form of liberalism. Certainly none have suggested that the imposition of duties enhances the individual liberty of recipients of social security. Instead, Howard Government Ministers, echoing Lawrence Mead, one of the architects of “workfare”, speak of enforcing “tough love”.

It would be churlish to suggest that the entire Howard Coalition Government and their senior bureaucrats have chosen to ignore the substantial body of literature which points to the impossibility of ensuring that all the “worthy needy” and only the “worthy needy” are paid. Assuming they are aware of such literature, and that they are committed to identifying and paying “the needy” then it is important to test the proposition that “mutual obligation” is a pragmatic method of pursuing that goal.

Given that the “mutual obligation” regime has been in place, in one form or another, for six years, it raises the question as to either the competence of this Government or the bona fides of the Government’s pronouncements in this area of social concern.

The Howard government prefers a liberal utilitarian rather than a universal rights-based approach to welfare (pdf, 59Kb). It frequently speaks about a preference for pragmatism over theory in social policy. Such an abhorrence of planned social change, often expressed as “social engineering”, has been part and parcel of conservative regimes since at least the 18th century. Additionally the Howard government has assertively set out to win the “culture wars”. The sacking of Dawn Casey, the ex-director of the National Museum for not following the Government’s colonialist rewriting of Indigenous/white history and the recent attack on the state school system for failing to impart values of national identity are just two of many examples of Howard’s culture wars.


In late 2003 St Vincent de Paul and the Brotherhood of St Laurence produced a report (pdf, 263Kb) listing many problems that some recipients encountered with the “mutual obligation” regime. The authors of this report concluded that obligations, which many social security recipients are forced to meet, result not in a “welfare to work system” but a “welfare as work system”.

Not everyone has equal difficulty meeting the “mutual obligations” imposed upon them. Unemployed, white, middle class, organised, well educated, good looking, compliant, nicely dressed, Australian born people who are skilled communicators and who are not having family or transport difficulties don’t seem to have any difficulty gaining and retaining social security benefits. Clearly they must be both “needy and worthy”.

The St Vincent de Paul and the Brotherhood of St Laurence report, replicated in Schooneveldt’s research, identifies particular groups which have more difficulty obtaining and retaining social security benefits under a “mutual obligation” regime. These groups are composed of people who have social, intellectual, mental health, addiction, educational and communication difficulties. Indigenous people, recently arrived migrant and refugees also encounter disproportionate difficulties meeting the dictates of Centrelink staff.

It may be that ministers in the present government would judge some of these people as “unworthy”. It is unlikely that the Government, as a whole, would hold the view that simply experiencing one of more of these difficulties should automatically disqualify a person from obtaining benefits.

If the government were of that view then it would be appropriate for it to attempt to legislate to that effect. If it is of that view but convinced that the Parliament would not pass such legislation then it seems an unethical approach to impose roundabout sanctions on such groups. This amounts to a less than transparent process of exclusion that is not only unconscionable but is a denial of natural justice that no affluent group would tolerate.

Within such groups some are cut off benefits more than once. Clearly the greater the disadvantage a person experiences the more difficult they will find it to establish their eligibility for benefit. They are the ones who have the greatest difficulty meeting imposed obligations. They may not understand they are required to meet such obligations. They often don’t understand why they are expected to meet such obligations. They are more likely to interpret the imposed obligation as an imposition rather than assistance. They are often living in extreme poverty having lived with their disadvantage for many years. The reality is that the most disadvantaged are the ones most adversely affected by increased targeting, “mutual obligation” surveillance and compliance measures.

The “mutual obligation” regime is not a pragmatic way to ascertain “the worthy and the needy”. Nor is it a way to deter “the greedy”. It imposes paternalistic obligations without assisting people find work or alternative income sources to social security. It diminishes the liberty and self–respect of recipients by saddling them with stigma. It is neither a direct nor efficient way to run a welfare system. It is a misnomer to call “mutual obligation” pragmatic. Given that the policy has, in one form or another, been in place for over six years it would seem a legitimate question to ask, “What use is the ‘mutual obligation’ regime to the government?”

The number of people receiving social security is limited by the generic design faults in targeted welfare assistance systems and by the imposition of stigma. Such difficulties are exacerbated if recipients lack bureaucratic sophistication or experience a disadvantage. Apart from such shortsighted savings, there seems little apparent advantage deriving to the Howard Government. It is cheaper because it fails to pay many people who are eligible for a benefit. The savings that accrue to the federal government are, in substantial part, displaced onto the various state governments, charitable bodies and to poor families themselves. “Mutual obligation” may be cheaper, but it is poor policy because it fails to ensure that all eligible people are provided with a liveable income. Its cheapness is not a sufficient explanation. It does not explain the ardent promotion of the “mutual obligation” regime by so many Ministers in the Howard government.

The underlying use of “mutual obligation” is an ideological one. It provides the Howard government with a tool to berate the poor for their poverty while absolving the Government of the need to pay them. It reinforces middle-class preconceptions about people who are poor and excuses their failure to help those less fortunate than themselves. It undermines feelings of noblesse oblige and portrays as ridiculous any idea of socialist solidarity with such “unworthy” people. In an insidious fashion, it erodes the viability of many poor families. It destroys the social cohesion of this nation as it undermines egalitarianism. In fact, “mutual obligation” is a weapon of mass distraction in Howard’s culture wars.