Menzies, Liberalism and Social Justice

It is absurd to suggest that the idea of social justice espoused by Robert Menzies might be an invitation to socialism by stealth.

Menzies was under no illusion that socialism was a potent force because it offered solutions to so many issues of popular concern – the horrors of child labour, the denial of the rights of employees and suppression of trade unions, extremes of wealth and poverty. For democracy to survive the challenge of socialism and of fascism, it had to demonstrate that it could deal with these issues, and the vehicle for doing so was social justice.

For Menzies, there was no conflict between vigorous opposition to state control of the means of production, distribution and exchange, and advocating an active role for government in the economy, in welfare and education. He believed that poverty should be attacked and that vast differences in wealth were corrosive to the nation. But he was no leveller. He believed that people should be rewarded differently in accordance with their skills, their achievements, their enterprise and initiative, and because of their frugality and foresightedness. He also believed that all people were entitled to a decent life.

The second attack on social justice rests on the claim that it interferes with the operation of the free market, which is ultimately the guarantor and deliverer of productivity, choice and freedom. There is no disputing the effectiveness of the marketplace. The market allows individuals to make choices they believe to be in their best interest. It is the engine of creativity and responsiveness on the part of producers, and it is essential to human liberty.

The pro-market purists however do not just laud the achievements of the market economy and its effectiveness. Their fundamental commitment is to reducing the role of government to little more than providing public goods, a subsistence safety net and law enforcement.

The fact however is that a society is more than the outputs of market exchanges flowing from the interactions of individuals. Our society and its constituent individuals do demand other things of their governments, a sense of collective purpose and vision, the provision of effective health and education systems, addressing disadvantage, and expanding opportunity. A liberal commitment to social justice complements and underpins a free market economy.

The third dimension of the attack on social justice is that it leads to a social welfare system which results in rorting, undermines personal responsibility, erodes the incentive to work, and impedes the operation of the market.

Rorting is a term with many nuances in the Australian language. One aspect is widespread fraud. And yet the evidence is that the incidence of fraud by welfare recipients is extremely low.

Australia has some of the most advanced and effective welfare fraud detection capacities in the world, including data matching between Centrelink and the Tax Office. Last month, the Government released a report on social security compliance for the 1998-99 financial year. The report followed 2.7 million entitlement reviews of welfare recipients.

Out of more than 6 million welfare recipients there were 3,011 convictions for welfare fraud. Approximately .05 percent of recipients fraudulently obtained benefits. There are currently more individuals in Australia who win first and second division Tattslotto each year than there are individuals engaged in welfare fraud.

Another form of rorting the system is presented as people failing to take up available job opportunities. According to the ABS there are 80,000 jobs available. According to the ANZ job advertisement survey there have been a maximum of 30,000 unfilled positions at any one time, a substantial percentage of which are for highly skilled positions for which there is a shortage of the appropriately skilled personnel. Whichever figure one takes there are abundantly more jobless than there are job vacancies.

Another basis for criticism of social justice is the perception that Australian social security benefits are so generous and readily available as to represent a disincentive to work. This also does not stand up to scrutiny.