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May 29, 2005
I read Peter Saunders new book Australia's Welfare Habit and how to kick it whilst travelling to and from Canberra in the last couple of weeks. The book is usefully summarized in this article at the Brisbane Institute's online magazine. It indicates the way the social welfare state that we have grown up is now giving way to the enabling state.
Saunders is a market liberal and the primary reason behind his push for the reform of the welfare state is a small government philosophy. This classic liberalism limits the reach of central government so as to expand individual choice, freedom and opportunity. This presupposes that individuals should be able to take care of themselves; and, given this self-reliance, the proportion of the population needing federal welfare and health assistance should fall. If individuals and families assume more responsibility for their own welfare and employment, then the nanny state can be wound back, if not abolished.
Peter Saunders states that there are two reasons for reducing welfare dependency rates and return more people to economic self-reliance. The first is that:
"...income support is now costing taxpayers $80 billion per year. This expense is a key factor keeping taxes high, even on workers with modest incomes, with the result that work incentives and rewards for effort get eroded. Indeed, we are chasing our tails, for as we increase taxation to meet the growing cost of income support payments, so it becomes less attractive to work, and more people seek welfare as an alternative."
The second reason is that:
"... long periods on welfare corrode people's work skills, destroy their habit of self-reliance and undermine their wellbeing. Children raised in welfare-dependent families perform worse than they should in school, are more likely to end up in trouble with the law, and have a higher probability of winding up on benefits themselves. In short, having one in six of our working-age adults depending on benefits as their main or sole source of income is bad for those who have to support them and is bad for the recipients themselves."
What we have is an argument for a neo-liberal mode of governance. According to this political rationality the state is responsible for law and order; the market is responsible for promoting self-reliance and enterprise; the conduct and subjectivity of individuals needs to be shaped so they become more self-reliant.
Saunders spells out the three ways this neo-liberal political rationlaity will achieve its new market order.
"First, we need labour market reform to create more jobs for people now on welfare...This is why proposed changes to the award system and the unfair dismissal laws are so important, for these reforms will have their biggest impact on the supply of lower-paid jobs...Given the choice between a low-paid job and no job at all, there should be no question which is preferable."
Mark Banisch has comments on this reform over at Larvatus Prodeo.
The second way is welfare reform
"..so that long-term income support recipients who are capable of working are encouraged or required to get off benefits and into employment. This is where recent government proposals to reform Disability Support Pension (DSP) and Parenting Payments are so crucial, for these are two of the main benefit categories which have been expanding rapidly in recent times."
However, welfare reform is not enough.The third leg in the reform triangle is:
"...tax reform, for in addition to ensuring jobs are available, and that people on welfare will apply for them, we also have to ensure that when people do work they are properly rewarded. This is not the case at the moment, particularly at the bottom end of income distribution, for workers are penalized heavily when they increase their incomes through a combination of high taxation and withdrawal of means tested benefits."
Saunders says that the Howard Government Labour is committed to market reform to generate more jobs; is interested in welfare reform to get more people into work; and is largely indifferent to tax reform to make it worthwhile working.
Many in Australia interpret this neo-liberal mode of governance as a return to 19th century laissez-faire liberalism as it represents a loosening or freeing of an existing set of market relations from the social shackles of the welfare state. However, the neo-liberal mode of governance goes further than this, as it more of all aspects of social conduct being reconceptualized along economic lines----as calculative actions governed by instrumental reason of self-reliant and enterprising subjects, which are undertaken through the execise of choice to achieve wealth maximisation.
The key figure here, and one which differentiates the new economic subject from the old one, is 'enterprising' or 'entreprenurial. 'We are entrepreneurs of ourselves as our conduct is now being shaped so that we are disciplined into the business of caring for ourselves. We are now increasingly obliged to make adequate provision for the preservation, reproduction and reconstruction of our own human capital.
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