Poverty: lazy louts or in need of aid?

The latest phase of the Australian poverty wars began in May 2005 when the prominent Catholic charity, the St Vincent de Paul Society, issued a discussion paper warning that income inequality was growing in Australia.

According to the paper, The Reality of Income Inequality in Australia, high income earners enjoyed a rise of $156 in their real mean weekly income from 1994 to 2003, compared with only $62 per week for middle incomes, and a mere $32 per week for low incomes. St Vincent de Paul argued “income inequality would grow even further once the government’s tax cuts and welfare reforms were implemented”. The charity recommended increased government spending (of up to 2 per cent of the gross domestic product) in order to lift all Australians out of poverty.

The St Vincent de Paul paper was promptly attacked by the leading neo-liberal think tank, the CIS (Centre for Independent Studies). In two reports titled A Headlong Dash into the Chasm of Hyperbole (also at On Line Opinion as A chasm of inequality? Really?) and Clearing Muddy Waters: Why Vinnies are Wrong on Inequality, the CIS argued that the claims of increased income inequality were greatly exaggerated. The CIS suggested that income inequality could potentially be a good thing if it rewarded hard work and accused the charity of being influenced by a Marxist, anti-capitalist political ideology.

The CIS critique was reinforced by The Australian which published an editorial rejecting the notion that more government money would assist the poor. Further articles in that newspaper by conservative journalists Christopher Pearson and Frank Devine also rejected the efficacy of a structural analysis of poverty, and suggested that the charity’s intervention in public policy debates was an unnecessary diversion from their prime mission of relieving the misery of the poor.

St Vincent de Paul replied to these criticisms in a report titled Stats and Stones which justified their original findings, and emphasised the core Catholic social justice teachings and principles which underpin their interventions. They also reaffirmed the link between providing coalface services which help the poor, and advocating broader social justice that addresses the societal structures which create and reinforce poverty.

Not surprisingly, little of this debate is new. The CIS has a long history of attacking church and welfare groups which advocate a fairer distribution of wealth and income dating back to 1984. The CIS’s attack on what they describe as “the radical, egalitarian political agenda” of welfare lobby groups reached a crescendo in early 2002 when the Centre attempted to discredit a joint report by the Smith Family and the National Centre for Social and Economic Modelling (NATSEM) documenting an alleged increase in poverty levels in Australia.

What is at stake here (as noted by Peter Saunders of the University of NSW in his new book The Poverty Wars) is a fundamental ideological, philosophical and moral division over the causes of poverty, and consequently the potential solutions.

On one side of this debate are non-government welfare groups providing direct services to the poor and advocating social policy on behalf of the poor. Some are secular and some are religious-based. They range from the ACOSS (Australian Council of Social Service - the peak body of the community welfare sector which admittedly serves no direct function in delivering services, but claims to represent the views of all its affiliates which are mostly involved in service delivery) to the major Christian charities (also affiliated with the ACOSS) such as the Salvation Army, Anglicare, and St Vincent de Paul. St Vincent, for example, has over 40,000 volunteers who provide material aid and financial assistance to more than 800,000 poor Australians each year.

Overall welfare lobby groups hold what may be called a traditional social democratic agenda. They define poverty as a condition of relative deprivation or exclusion from normal social and economic activities and participation. They believe poverty is primarily related to broader structural inequities produced by the free market, rather than to the individual characteristics of the poor. They favour increased government spending to relieve immediate financial poverty and to promote greater long-term opportunities for those who are disadvantaged.

The welfare lobby does not deny that individual behaviour and choices can influence social outcomes. Most would acknowledge that some of their service users engage in anti-social behaviour - drug or alcohol use, criminal activities, gambling, violence towards family members, and refusal to seriously seek employment - which does not improve their life situations.

They, however, would argue that most poor Australians are heavily constrained by their limited life opportunities (deficits such as physical, psychiatric, intellectual, social disability and or language and literacy issues), and blaming them for their plight reflects a lack of compassion and is unlikely to improve their prospects. Moreover, such judgments are arguably discriminatory in that many others in the community (including some very affluent business people and sports stars) also engage in anti-social activities but are rarely targeted for collective condemnation.

The key strength of their agenda is that it is based on direct everyday contact with large numbers of poor and disadvantaged Australians, and an informed knowledge of the problems they experience. To be sure, some of their poverty estimates may be less than rigorous, but as Peter Saunders notes in The Poverty Wars, their general concerns about both the increasing rates and social costs of poverty are correct. The key weakness is that many of their services arguably serve to maintain the poor in their poverty, in that they emphasise compassionate assistance to individuals, rather than organising the poor for collective political action. And the structural reforms they seek concerning the distribution of wealth, income and power are rarely implemented by government.

In contrast, the CIS and its supporters in the Coalition Government and the media adhere to a neo-liberal ideological agenda. This means that they view the economic inequality produced by the operation of the free market as by-products of the engine of economic and social progress. They are firmly opposed to the redistribution of income from the rich to the poor on the grounds that it will unfairly limit the freedom of those who create wealth, and encourage laziness and other forms of unproductive behaviour.

The CIS attributes poverty to behavioural explanations such as incompetence, immorality or laziness. Welfare recipients are constructed as fundamentally different from the rest of the community. The CIS rejects the welfare state and any other forms of government intervention that provide extra resources to the poor on the grounds that such schemes produce poverty instead of relieving it. Instead, they favour reliance on private charities, families, and what they call “self funded benefits and services”.

The key strength of their agenda is that their prescription for less government spending is likely to prove politically influential, given it fits comfortably with the current global drive for lower taxes and reduced social expenditure.

The key weakness is that the CIS seems to have little, if any, actual experience of working with and assisting poor Australians. Their proposed solution to poverty appears to be completely utopian, likely to produce enormous social damage, and based solely on ideological preconceptions rather than any genuine desire to improve the life chances of the poor.

It is likely that we will hear more verbal assaults around both the accuracy of poverty statistics, and the legitimacy of those who produce such research. But the question of how we measure poverty is arguably a mere distraction from the fundamental division over how we define the causes of poverty and identify potential solutions. Those who view poverty as produced by structural inequalities will continue to advocate increased government intervention to promote greater opportunities for the disadvantaged. And equally those who view the poor as largely to blame for their own predicament will continue to urge that the free market be allowed to allocate resources without undue interference.