Neo-liberalism and impoverishment

As a result, today we may have the worst of both worlds. It is portrayed by today’s social reality that the rich are getting richer, while the poor are getting poorer. In the case of people with disabilities, their capacities under such a system are rarely deemed worthy of reward as being meritorious.

More than 20 years ago, Hugh Stretton told us of a “Cult of Selfishness” in his book Political Essays that spoke of the emergence of neo-liberalism which now provides us with significant cultural hindsight.

Other interests saw opportunities to change the direction of development: to improve the mixed economies’ efficiency by means which would incidentally make the rich richer, business freer, welfare cheaper and the poor more self-reliant. Those means were described as deregulating, privatising, restoring competition, cutting welfare, rolling back the boundaries of government.

Neoliberals cutting welfare

This is further acknowledged in the Australian government’s (ALP) Shut Out report which is a broad government publication of issues confronting people with disabilities:

The extraordinary gap between the level of income support and the cost of disability was seen as restricting the ability of people with disabilities both to live independently and to enjoy a decent standard of living … Disability support recipients live lives of fear and desperation. Sooner or later every disability support recipient I know has confessed to the concern they feel over the “what if” factor - what if government stops paying social security/disability support?

This horrifying issue for many people with disabilities may again be on the neoliberal agenda. For example, in the 2010 election campaign the leader of the Coalition, Tony Abbott, pledged to reduce government spending by $47 billion. It is something that he believes will take pressure off interest rates. Does this mean there is a possibility that disability funding will also take a cut as it is part of the government spending?

Looking at the recent past policy agenda, the proposed welfare/pension reforms by Australia’s Federal Liberal coalition, I feel is just one attempt to "reform" welfare/pensions that was part of the Federal Liberal Coalition's policy prior to the October 2004 federal election. At the time a federal Liberal coalition cabinet submission concerning welfare was leaked. According to Josh Gordon, in The Age, the plan was that more than one million Australians would have their, necessary, disability pension payments eroded. This was part of a secret Coalition bid to save money.

The leaked submission of the federal Liberal coalition argues that the current social security system undermines the policy goal of increasing labour market participation and that it is in the best interests of the Coalition parties to fix the welfare/pension problem immediately, as each year of delay will result in greater costs to the state.

The government spends about $24 billion each year on working-age income support, with the cost rising by about $1.5 billion each year. The cabinet submission highlights the problem that since 1997 pension payments have been locked in at 25 per cent of average male weekly earnings, while allowances have always been linked to changes in inflation. For example, disability support pensioners now get $37 a week more than people receiving the single allowance, compared with a gap of $22 in 1999. The gap was expected to widen to $50 by 2006 on past trends. Instead, the submission urges cabinet to “seriously consider” the indexation arrangements, suggesting that the government’s guarantee to maintain pensions at 25 per cent of male earnings should be abandoned.

The submission stated that such welfare payments should be merged with those, such as, Newstart and Youth Allowance to enable a single working age welfare payout, saving the government about $1.3 billion.

To succeed in reforming the discrimination of people with disabilities, the economic system must undergo serious practical changes which allow for an ethical and social focus on people with disabilities in society. Neo-liberal economic processes are a contributing factor in the backlash against the social policy agenda, blaming the poor structure and enforcement of such policies for the failure of people with disabilities to seek social inclusion and find work. The result of the dominance of neo-liberal political economics has been a system of ongoing rising inequalities.