If you read my blogs you might come to the conclusion that I am reasonably opinionated. I certainly have shared with you opinions on some of the more controversial subjects such as politics and religion. But I must confess that there are areas where I feel frustrated that I can’t make up my mind. One particular area where I experience ambivalence is welfare.
In a modern prosperous society it is entirely appropriate that we should care for the needy. But the needy are many and varied and consequently it is often difficult to devise a formula that enables us to treat them all justly. And of course welfare comes at a significant cost to taxpayers. Government is therefore obliged to ensure that welfare is only directed to those in real need and that it is not wasted by bureaucratic inefficiencies and rorting by the recipients.
But as much as we wish to help the disadvantaged, welfare brings its own problems. Almost one in six Australians of working age is reliant on income support. Long-term welfare dependence, which is often coupled with drug and alcohol addiction, child abuse and domestic violence, is overwhelmingly concentrated in disadvantaged communities. Children of jobless parents are more likely to end up on welfare. If these problems are to be overcome, the cycle of dependence must be broken.
Forty years ago, only 3% of working age Australians depended on welfare payments as their main source of income. Today it is 16%. There used to be 22 workers to support each person on welfare. Now there are five.
Australians are wealthier than ever before, and with the right mix of tax and welfare policies most of us could look after ourselves with little help from the government. At the moment, high taxes penalise those who are working, and antiquated welfare rules allow hundreds of thousands of people who could and should be working to live off benefits.
Long-term dependency can have major social and economic consequences. It can lead to erosion of work skills, lower incomes, poorer health and risk of isolation from the community. Long-term worklessness and welfare dependency tends to reduce people’s opportunities to participate fully in society. This means that the productive capacity of the nation is not as great as it could be.
New evidence is also emerging about the impact of long term welfare dependency on the next generation. Research by the Department of Family and Community Services has shown that young people from income support recipient families are much more likely than other young people to leave school early, to become unemployed and to become teenage parents. About one in six young people from income support recipient families are themselves highly dependent on income support between the ages of 16 and 18.
The welfare “trap” is exemplified by the Melbourne Institute’s HILDA (Household Incomes and Labour Dynamics in Australia) survey. The survey shows that for those households that received more than 50 percent of their incomes from government payments in the base year (2001), 76% were in the same position one year later, 55% five years later and 45%eight years later.
Welfare dependence is also a serious issue for our indigenous community. Noel Pearson makes a compelling case that welfare has served to excise much of the indigenous community from the mainstream economy and removed incentive to engage meaningfully with the mainstream economy. We are now faced with the prospect of re-engaging these people after a couple of generations have been sacrificed.
There are many similar victims of welfare in the non-indigenous community. It is common to come across families where a couple of generations have not worked. We learn our social mores from significant others. Children who have not had role models to demonstrate that work can be worthwhile, and often stimulating and satisfying, are more than likely to gravitate to welfare.
Recent work in the field of evolutionary psychology shows that altruism is an evolutionary advantage. Not only that, researchers into human happiness and well being show that indulging in altruism promotes our personal sense of well-being. In many ways altruism is good for us. A desire to help the needy is a good and healthy trait of a developed society.
On the other hand, many of us are concerned about issues of justice and equity. Such folk are affronted when welfare is granted to those whose needs are questionable. They would want us to ensure that such people should at least contribute to the economy what they can, and I suppose that is not an unreasonable expectation. Indeed for many people making a contribution is self-affirming and helpful in contributing to the psychological health of the individual.
Also it seems inequitable that welfare can make some of our population better off than some of the poorest, taxpaying workers. Peter Saunders from the University of Sussex related that the Victorians called this the principle of “less eligibility”. In short this principle advocates that people who work should be better off financially than people on benefits. But additionally people claiming benefits should not enjoy better conditions than those who work.
I want to belong to a civilised society that cares for those who are disadvantaged. I don’t have much concern about paying my taxes to see that end realised. And it seems to me that it will always be difficult to get the balance right between looking after the genuine needy and not rewarding the not so deserving. I am also probably disposed to erring on the side of generosity rather than stringency. But there are many taxpayers in our society who are not as well placed as I am and to whom excessive welfare generosity must seem an injustice.
Maybe some of my readers who are wiser than I might suggest how we could get the balance right?