Don't be despondent about 'dependency'

Some people in Australia are concerned about the painful brain condition
called “dependency”. However, the only people who contract this condition
are those who believe that the only possible welfare system is a “targeted”
one.

The usual justification for “targeted welfare” is that it directs the
greatest assistance to those in greatest need. Its advocates claim further
that it is only “being in need” which justifies being paid assistance.
The attached assumption is that the amount of assistance provided actually
meets the recipient's needs.

The argument is more than a little circular and less than convincing,
but it has been used in Australia since at least 1908 to justify paying
income support.

The main claim of the “targeted welfare” system was that it assisted
all who were in need through no fault of their own. This qualification
on eligibility has a long lineage, stretching as far back as the Elizabethan
Poor Laws of 16th century England.

Under all such welfare systems since, someone has to adjudicate, to
judge the difference between the “deserving” and the “undeserving” poor,
to apportion blame or righteousness to the applicants for assistance. That
has been the role appropriated by the “targeted welfare” system itself.

Targeted welfare is a mid-point in Australian welfare debates, positioned
between two diametrically opposed views: one view rejects the idea of paying
income support to anyone, while the other view upholds the idea that income
support should be universal and available to all.

Those who reject income support do so on the basis that if people can't
support themselves, they are a drain on the rest of us and that, if you
pander to such people, it drags the rest of us down.

Adherents of this view do not support targeted welfare because they
claim it leads people to distort their circumstances so as to fit the definition
of “needy”. They claim that providing unemployed people with income support,
for example, encourages them to delay seeking work. That is, they argue,
“targeted welfare” rewards the dreaded “dependency”.

Since the 16th century, those holding this view have largely accepted
that leaving people to starve to death in the crossroads is bad form. This
position therefore may have some utopian intellectual appeal, but it has
little practical use. Advocates of this view therefore tend to claim that
they back a “targeted welfare” system, only one which is even better “targeted”
and discriminates even more sharply between the “deserving” and “undeserving”.

Both those who favour abolishing welfare (for the poor) and those who
favour targeting claim that universal welfare is too expensive. They also
suggest that universal provision is inefficient, because it provides assistance
to many who are not “in need”. Those attached to the abolish assistance
position sometimes argue that universalism creates the worst form of moral
jeopardy because it ushers in the “nanny state” which confines all, irrespective
of their means, to “dependency”.

Supporters of universalism claim that their system at least ensures
that no-one in financial need is denied the opportunity to survive.

No-one is “dependent”, they argue, because those who have no income
besides the universal income guarantee are simply asserting their rights
as citizens to the minimum income. The income support they receive is identical
to that which all other residents receive.

In this way, universal policies are the epitome of an inclusive social
policy. Universalists point out that, because there are no means tests,
there are no poverty traps and no financial disincentives which discourage
engagement in paid work. Further, there is no invasion of people's privacy
and no compulsion. Under universal welfare, there is, in short, more freedom,
not less.

An income guarantee is affordable. A universal payment ensures that
all in financial need are provided with a minimum level of income, which
is surely the base promise (rarely delivered) of the existing welfare system.
The amount of income support likely to be paid is about survival level.
In Australia it is likely that the rate of assistance would be at about
the official Henderson Poverty Line.

The provision of a sustaining universal payment avoids the flow-on costs
which accrue in any society which marginalises some of its residents by
relegating them to an impoverished existence.

Supporters of universalism suggest governments require only the taxation
system to tax those whose income levels are such that they don't need the
assistance. Such a system does away with the confusing and inefficient
dual taxation and social security means testing withdrawal rates.

Further, the Australian welfare budget is allocated out of what is left
once government has done all the “important” things, like subsidies to
industry and purchases of the latest military toys. There are certainly
savings which could be made by ending these real forms of “dependency”,
namely, the dependency of business on government handouts.

One further question which universal income support answers is “how
do we keep it simple”?

Most Australians don't want all the complexity of the existing welfare
system. They want the government to come up with an income support system
which even the least sophisticated in this community can understand.

John Howard, just after he became opposition leader in the early 1990s,
said families should know what their entitlements are. At present families
don't know, social workers don't know, academics don't know, even most
of the bureaucrats in social security don't know the amount of income support
to which residents are entitled.

The reason we haven't got an income guarantee is very simple. In Darwin
I sat at the feet of a long-term unemployed person, a wise man called Strider,
who told me that the reason the government refuses to have a universal
income guarantee is because it suffers from a lack of faith in people.
Strider said that governments believe the unemployed “wouldn't work in
an iron lung”. I agree with him.

There is no evidence that supports such conclusions about those Australian
people who are confined to the “reserve army of labour”. People don't want
to work in dangerous jobs, or in situations where they are sexually harassed,
or in a whole range of situations where they are exploited, but that doesn't
mean they don't want to work.

A universal income guarantee would provide an opportunity for people
to participate in a whole range of ways, either in the paid labour force
or by undertaking voluntary work.

John Howard's federal government, whilst claiming to be in the vanguard
of the push for smaller government, has tied its fortunes to the mutual
obligation masthead. This system requires massive intervention in the lives
of those who receive income support. The work for the dole scheme and compulsory
literacy training are just two obnoxious features of the Howard government's
mutual obligation policy.

This socially conservative government compels people to participate
in an approved activity in return for receiving income support. This is
a long way removed from people voluntarily involving themselves in a community
activity. It is like having to sing hymns for your supper in a church-run
soup kitchen.

The absence of universal income guarantees is explained by a failure
of trust; “dependency” rhetoric is just a mystification.

People should trust each other and be prepared to say, “I'm prepared
to pay 50% of what I earn in tax, providing that I'll know that no-one
else in this country is without food, housing, education and decent health
care”. If such a system were to be installed, most Australians would go
to bed happy.

From GLW issue 442