Of all the issues which the 2020 Summit in Canberra needs to address the most pressing is modernising Australia’s social security system. The first Commonwealth social security legislation, providing for age and invalid pensions, was passed in Australia in 1908. Until that time, social welfare had been managed entirely by the states. The states inherited the British poor law system of financial assistance, but without work houses. The system was imbued with the poor law mentality of “lesser eligibility” whereby it was intended that any person assisted would always be better off working than receiving assistance.
Not surprisingly, the Commonwealth adopted a similar mentality to the states. The government of the day insisted that various eligibility criteria and means tests were incorporated into the legislation to ensure that only the very ill and financially distressed were assisted. This form of targeted assistance was a far cry from the widespread European tradition of social insurance and is even further removed from the system of Basic Income which is currently being considered in a number of countries.
During the first half of the 20th century, an applicant for a pension had to establish they were of good character. This requirement remained in place until 1973 when Bill Hayden ordered it be dropped. As late as 1972, I saw files where applicants for invalid pensions were advised, “That they were not deemed worthy to receive a pension”. The poor law system sought to erode citizenship rights of claimants whereas Hayden attempted to implement a social security system based on entitlement.
Stigma is embedded in every targeted welfare system, mainly because of the detailed inquisitorial nature of assessing who is and who is not “worthy” to receive the payment. The more discretion given to the dispenser of assistance the greater the danger of abuse by the assessor and the less certainty of eligibility there is in the mind of the applicant. In 1870, Charles Lamport, wrote of the British poor law system, “Society, before it yields what it dare not refuse, so embitters the morsel by contempt that neither giver nor receiver is blessed in the act”.
With the demise of the Whitlam Government, Australia’s social security administration retreated towards noblesse oblige until the late 1980s when the establishment of a moral entitlement was mediated through what came to be called “reciprocal obligation”.
In 1996, the incoming Howard Government pursued this policy relentlessly; renaming the process “mutual obligation” and insisting that if people were to be supplied with poverty-line income support “then it was only fair that they gave something back in return”. It was like throwing a dollar into a blind person’s cup and then threatening to take the dollar back if the blind person continued to refuse to see.
Howard (The Australian, May 4, 1999 and January 12, 2000) set out his plans for social welfare in this country; the social security system became more selective and targeted, and recipients were forced to meet increasingly oppressive requirements. Although the Howard Government claimed that its policies were aimed at getting recipients of income support back into work, the Brotherhood of St Laurence (PDF 263KB) and St. Vincent de Paul [Ziguras, Dufty and Considine (2003)] argued that the excessive obligations imposed on recipients (in return for payment) amounted to a policy of “welfare as work”.
The Howard Government rhetoric about obligation was at its shrillest during the Intervention into Aboriginal communities in the Northern Territory where all Indigenous recipients of social security living on communities had half their payments earmarked for approved purchases. Here was a perfect example of how the very poorest citizens of the nation were expected to make the greatest return to the Government for benefits that other citizens received without having to make an equivalent return. (Tomlinson 2008)
The Rudd Government has persevered with the Northern Territory intervention in relation to quarantining half of people’s social security payments, in the short term, although it has attempted to accommodate Aboriginal objections to other aspects of the intervention. Somewhat similar interventions have recently been embarked upon in several Indigenous communities in the Kimberlies and on Cape York.
However we look at “mutual obligation”, “reciprocal obligation” or the quarantining of welfare monies under such interventions, each of them amounts to a form of paternalism. In fact most, if not all, of the requirements imposed on social security recipients allegedly “to assist them to return to work” or to “rehabilitate themselves” are paternalistic in so far as government agents assert they are helping people who otherwise would not be clever enough to help themselves.
Why should governments be allowed to impose paternalistic obligation upon social security recipients just because they need the benefits to survive? Professor Guy Standing in his book Beyond the New Paternalism (2002) provides hundreds of reasons why we should trust social security recipients to celebrate their autonomy and why we should oppose income support policies which interfere with the liberty and initiative of social security recipients.
Governments since 1908 have maintained that targeted means-tested benefits are the “most efficient” (cheapest) way to help people avoid poverty and assist “the needy”. One hundred years of poverty traps and enduring poverty should be long enough to convince even the most obtuse that they are wrong.
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