What is welfare? I propose that welfare is the
provision of benefits to individuals or groups, from the common wealth.
Some welfare is provided directly to individuals. Equity
welfare is the provision of financial support to individuals and
families in need. It is designed to help those in society who are
missing out, to catch up. Middle
class welfare is the provision of financial support to
individuals and families who already have sufficient opportunities and resources
to successfully function in the social mainstream.
Some welfare is provided indirectly to individuals through
organisations. Corporate welfare
is the provision of financial support to corporations, in the belief that a
healthy corporate sector is essential to a successful society. This may
occur in the form of tax breaks, or provision of cheap land, or direct funding
of R&D, or the direct funding of industry peak bodies.
Societal welfare is the provision of
financial support to enable the provision of needed goods and services to the
whole society, or to resource the development of goods and service which will be
needed in the future. Obvious examples of societal welfare is the provision of
road, schools or hospitals. These two categories are not mutually
exclusive. For example, provision of overseas aid could be seen as an
investment in the future security of Australia, or, on occasion (often?) as a
form of corporate welfare, when the provision of aid is tied to implementation
by Australian companies. And, they cannot necessarily be disassociated
from individual forms of welfare. For example, subsidies to
individuals for installation of solar panels also supports the solar industry
and contributes to the long term social good.
The task of the national government, is to share the common
wealth in a way that has the best possible outcomes for Australia. The
question of whether this is Australian society, or the Australian
economy, and whether the two can be separated is at the core of our meaning
as a nation.
A Few Examples of the Discrepancies
in the Budget (which I plan to research further) are:
Following release of the budget, the Treasurer admitted that around $550million in funding has
been allocated to gas/oil/coal interests, yet the subsidy for solar panel
installation has been cut for applicants earning less than $100,000(?) per year.
Even with the subsidy, it cost private householders between $4000 and $8000 to
install photovoltaic panels. Clearly, not many families living on incomes
below $100,000 have this kind of money hanging around! The solar energy
industry estimates that 80% of their customers have an income of over $100,000.
At what point of income, and at what stage of life, does $13,000 become disposable income?
It is certainly less likely whilst families are supporting children (and using
optimum levels of power), than after the children have left home!
By weeks end (Inside Business, Sunday 18 May 2008), many solar power companies were talking
about substantial numbers of orders for installation of solar panels being
cancelled. This has not only undermined their future business ... many
under immediate threat due to having to return deposits to customers who have
cancelled their orders.
All the evidence suggests that, in some situations,
supporting individuals and families to act is the most environmentally-friendly
and economically efficient means to address problems such as climate change and
water. For example, a recent study found that it would be cheaper to
provide water tanks to all domestic households in Adelaide, than to build a
desalination plant. The
Industry Association suggest that even major infrastructural stormwater capture
projects would be significantly cheaper, and less environmentally damaging that
desalination plants (http://www.stormwater.asn.au/).
Yet, so-called Labor Governments throughout Australia continue to
subsidise the interests of the big businesses wanting to build major,
environmentally-suspect infrastructure, rather than take the more socially and
economically responsible course.
We must distinguish benefits which serve the interests of
individuals (eg. the baby bonus and family tax benefits ... and, for that
matter, a 5c reduction in petrol tax or GST exemption on petrol!), and those which serve a wider social
interest. Use of renewable energy is critical to the long term survival
and quality of life of our children. Surely, the cut-off point for means
testing should be higher for this socially-important (and relatively
individually expensive) function? Why not apply the same
carrot and stick approach to social responsibility, as the Howard Government
did to supporting big business? Why not impose a 1% tax levy on those with
a taxable income over, say, $250,000, who fail to install photovoltaic panels in
their homes and businesses?
Some might say ... If governments should universally fund
individuals to purchase
environmentally friendly innovations at a household level, then why not a
universal baby bonus? We clearly need more young people to support the
aging Australian population. This could be achieved through either an
increased birth rate or through increased immigration. Having lived overseas,
I am aware of how difficult it is for (even highly skilled people) to migrate to
Australia, and how stringent our conditions on new migrants are. We
effectively close our shores to the very people who could comprise the new,
young, working population of Australia. Is the baby bonus essentially a
reflection of our racism? We live in a global world, where
over-population is one of the critical issues facing the world's survival.
I propose that it is globally irresponsible to provide incentives for Australians to add to
this problem, rather than play a small role (to our mutual advantage) in
alleviating the world population problem. The baby bonus is not about
encouraging individuals to behave in a way that contributes to the long term social good.
It is clearly plays a quite different function to more socially innovative
programs. These are not, to use Kevin Rudd's language, parallel
I need to substantiate the exact taxation rates here, but I
believe that companies pay 30c tax in the dollar. Millionaires have
the means to purchase accounting services that allow them to minimise their
exposure to taxation. Yet, I believe that single parents on Supporting
Parents Benefit effectively pay 67c in the dollar, for the
15 hours they are forced to work each week in order to maintain their benefit. Most single parents are mothers, and the new provisions
for taking into account joint parental incomes when assessing eligibility for
financial support, means that many women and children will face a huge reduction
in income. Further, the
obligation to work 15 hours per week leads to many women being forced to abandon
their children after school, in order to meet this requirement. There
aren't many casual jobs, particularly for women with limited training, which
neatly fit into school hours. The most common (eg. cleaning, retail,
hospitality) function largely during hours when mothers should be free to care
for their children at home. This is in marked contrast with
Middle Class Welfare, which provides tax breaks to mothers in
partnerships/marriages who choose not to work.
We are spending $billions on militarism. The Department
of Defense was the only federal department quarantined from a requirement to
increase productivity and cut costs. We are spending $millions on the
military invasion of Indigenous communities, including spending a large amount
on housing and other services for the personnel implementing the invasion.
Yet, funding to women's centres and safe houses in Aboriginal communities -
critical community safety mechanisms which were defunded early in the Howard era
- has not been reinstated. Governments are quibbling over funding of
housing and support services in Aboriginal communities, and appear unable to
even ensure community members' access to fresh, healthy food. Ironically,
been more substantial progress in installation of police in many communities.
And, internationally, we continue to spend many times the amount on military
interventions, than we spend on international aid - particularly aid focused
I recently wrote a paper on the role of Peak Bodies
(Download available from:
http://www.yanq.org.au/). It demonstrates the
enormous discrepancy in both funding levels and accountability requirements
between corporate industry peaks (eg. the Business Council of Australia) and
not-for-profit community services and health peak bodies - organisations which
advocate the interests of less advantaged members of society.
I strongly support means testing of individual welfare
entitlements - including the hidden entitlements which often go to the very
wealthy via tax minimisation. I believe that wealth equalisation is a key
role of government. The equitable society is one where wealth is shared
- the Common-wealth. Surely, this is the most fundamental of Australian values.
Government is also responsible for looking to the
future, and preparing for changes in common/community interest. It's
critical that governments provide the greatest possible support for innovations
which address critical long term issues such as climate change and water.