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There are no benefits in the welfare state

By Gary Johns - posted Tuesday, 21 July 2015


The Australian Labor Party national conference begins this week. Among other matters, Labor has to rid itself of the socialist objective and, in the process, find a new objective.

The ALP is described as "a democratic socialist party and has the objective of the democratic socialisation of industry, production, distribution and exchange, to the extent necessary to eliminate exploitation and other anti-social features in these fields". The qualifiers "democratic" and "to the extent neces­sary" were added in 1957. At the 1981 national conference, numerous additional statements of principle were added. But the socialist objective remains.

Last year, on the same day the NSW Labor conference voted, sensibly, to do away with the party's socialist objective, the Tasmanian Labor conference unanimously supported this motion: "Conference recognises the Australian Labor Party's socialist objective as the great ideal from which our movement draws its common purpose." Do those donkeys not know the wall came down in 1989? Do they not know that, outside of some trade unions and some academics, generations of Australians despise socialism?

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Labor is right to civilise capital, a shared project with conservative liberals and the country party, but it is wrong to persist in socialism, and its handmaiden, welfarism.

Labor, at its best, understood the power of a lightly regulated market in all things. Still, it has not seen the bad in the welfare state and the incentive it provides to duck responsibilities. Australia has a problem of intergenerational welfare dependency. Australians love their benefits but are not at all keen on the downside: those stuck on it, generation after generation. The same families turn up seeking and, no doubt needing, assistance. Endless incantations from Laborites of how unequal, or how unfair, or how unjust society is are wearing thin.

As at December last year there were almost 900,000 jobseekers assigned to employment service providers and on the benefits ­(Department of Employment figures). About 330,000 have been reported for noncompliance. About 70,000 had five or more reports. Too many think work is optional. Granted, many have serious problems and these are addressed through a welter of agencies. Australia is a good and generous society. Labor could start its platform with such an ­acknowledgment.

And the Liberals can stop smirking. Their little experiment in welfarism, the baby bonus, was a disaster. A bribe gone wrong. One estimate was about 108,000 babies were born because of the inducement of the bonus. The cost per extra child, for example in healthcare costs and other payments, has been calculated at $43,000. Worse still, the bonus provided an incentive for women to leave the workforce or remain outside it. Teenagers showed the greatest increase in the NSW birthrate. Others were left to deal with the outcomes of pregnancies that, but for the baby bonus, might not have occurred.

This extract, from a letter to a federal MP by a social worker, tells a sad tale: "I work with mums and dads with children under the age of eight years running parenting courses … I have worked in this field for more than 20 years, and I feel I am working with a lost generation of parents ... I don't believe it is rocket science that if the baby bonus was attached to parenting programs things would change for the better … Perhaps then we would not see so many of our parents failing and their children taken into care."

The baby bonus encouraged childbearing without offering any incentive for women to maintain or strengthen their workforce involvement. As researchers have concluded, "when combined with other maternity-related benefits such as the Family Tax Benefit B", the baby bonus "rewarded women for staying out of the workforce". Moreover, "the baby bonus policy had the strongest incentive effect on women from lower-income households". The bottom line was "the baby bonus may well have had the effect of exacerbating welfare dependency".

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Labor's, indeed, the Coalition's purpose is not to find new ways to spend money. Among other things, it must be to uncouple the lives of a significant group in Australia from the clutches of the ­welfare state.

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This article was first published in The Australian.



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About the Author

Gary Johns is a former federal member of Parliament and served as a minister in the Keating Government. Since December 2017 he has been the commissioner of the Australian Charities and Not-for-profits Commission.

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