The centralized welfare state at the crossroads

Proposals for a basic income are currently being given serious consideration in Finland, Switzerland, and a number of European cities such as Utrecht in the Netherlands. There has already been successful basic income trials in parts of Africa and India.

Some of the key questions around a basic income include: would every adult person receive the income, or only those who have no other source of income; what level of income should be provided; what form of taxation would be used to fund the program; and is it affordable? Critics argue that a basic income would be too costly, and provide a major disincentive for labour market participation.

But supporters insist that it would facilitate high savings by reducing the large bureaucracy required to administer the existing conditional system, and massively reduce poverty associated with unemployment. It would also erode the stigmatizing distinction between the deserving and undeserving poor, promote ecological and inter-generational fairness, and arguably progress both individual autonomy and economic security.

Possibly a GMI would be useful in allowing us to distinguish between those on income security who are not able or willing to work and just want to be left alone, and those who are keen to participate in either socially useful activities and/or paid work (and could potentially be paid a higher income for doing so). But at the same time, it is unlikely to address that core issue of social exclusion I raised earlier.

Hence my preference would be for any reformed welfare state to incorporate a decentralized community-based approach whereby local communities are given the power to make informed judgements about specific programs and needs in their area, and allocated a genuinely major role in the development and implementation of policy strategies.

A particularly innovative strategy for developing local community control called 'associationalism' has been suggested by the British academic Paul Hirst. Hirst proposes the establishment of voluntary self-governing organisations based on partnerships between service users and providers. These organisations would prioritise the empowerment of citizens through maximising consumer choice and control, and preferably operate in tandem with a guaranteed minimum income scheme. The state would continue to provide most of the funding for welfare services, but civil society would take much greater responsibility for the design and delivery of services. Such devolution should contribute to the strengthening of social capital in these communities.

Hirst's proposal is appealing in that it offers the potential for welfare consumers to become genuine players in the service delivery and policy development process. It also suggests the possibility of challenging the structure of the existing government-controlled tendering process, and transforming that model into a progressive form of service delivery. That would mean government granting genuine independence to community forces so that they can both develop policies and deliver services based on the stated needs of consumers.

In recommending greater local community participation in and control of service delivery, I am nevertheless mindful that local communities are not united and homogeneous groups. Rather, they are often divided by class, ethnicity, race and other significant social, economic and attitudinal barriers. It is possible that some local communities will be dominated by traditional charity networks concerned with judging and moralising service users, rather than with empowering them.

But whilst there may be risks involved, I am confident that there are many people in local communities including elected members of local government, business owners, and those involved in a range of sporting, cultural, religious and other community groups or mentoring programs who are generally interested in helping those who are disadvantaged, and open to educating themselves to learning about the lives and experiences of people who have had very different backgrounds to their own. It is that type of supportive relationship representing positive social capital that is crucial to opening up genuine opportunities for welfare recipients.

Some may think this is pie in the sky, but these ideas are neither wild nor new. Here is a quotation from former Social Security Minister Bill Hayden when he introduced the Australian Assistance Plan, a cooperative regional participatory social planning program in September 1973. Hayden emphasized that the Plan would be guided by the needs of recipients of welfare services, and the intention to shift from centralized to local decision making:

It is the role of the Commission to evolve strategies which will enable those people in the problem-situation to take part in the planning of immediate objective and long-term goals…We will ensure that those who use the welfare services are involved in the evaluation of the relevance of welfare programs to their needs…Programs will be developed flexibly and largely guided by priorities identified locally.

In conclusion, we have a choice: either to continue with the existing top-down centralized welfare state which emphasizes control and compliance to ensure the passive subservience of service users, or we can experiment with an alternative bottom-up decentralized approach which seeks to empower service users by partnering them with positive local supports and connections.