Welfarism

CHAPTER 2

THE PURPOSES OF WELFARE

The Welfare State is an attractive notion.  Here, it seems, is the ultimate ideal -- the most powerful of all social agencies harnessed to the most beneficent of all possible aims.  At last we have created a society which functions as a true community, caring for the weak, the old and the poor, and at the same time considerate of the interests of all.  Indeed, the state now seems like one big happy family, the family at its best, warm, accepting, generous and kind.  Better than a family even, because it transcends the family, overcoming the pettiness, the privacy and the emotionalism of family life.  The Welfare State is the family writ large, but writ according to impartial and publicly-ascertainable rules.  It provides something for everyone, at little or no obvious cost.

And yet there is no doubt that the Welfare State is beginning to lose some of its appeal.  In Britain and the United States debate has raged back and forth for a decade now about the merits of welfare systems.  In Australia, it is true, we are more circumspect:  little work has been done from a sceptical viewpoint, and most criticism is dismissed on moralistic grounds, as if suspicion about such a noble enterprise could only derive from base motives.  Yet even democracy, the best of our social achievements, is only the least bad form of government.  Defences of the Welfare State should be aimed at showing it to be not the best of all possible societies, but the least bad of all possible arrangements.  That way we might be able to get a clear idea of its weaknesses, and perhaps learn to adapt to them.  Analysis of the Welfare State must aim to show not merely that it has good intentions, nor that it partly achieves good ends;  it must also consider its failings, and weigh them up against other ways of achieving the same ends.

One of the most striking features of the Welfare State (and perhaps of any state) is that it has a real talent for disguising its costs and failings.  When, for instance, a major review of the social security system is announced by government, and dozens of capable researchers are assigned the task of analysing the system from every possible angle, somehow we can know in advance that no major criticisms of the status quo will emerge in the final deliberations, nor will basic doubts be lavishly entertained and vigorously argued along the way.  The federal government's Social Security Review (now in its fourth year of deliberations) will cost the Australian taxpayer something over $15 million, but it will not reach any incisive or decisive conclusions.  At most, we know, such a review will recommend that the system remain the same, only more so.  The underlying principle is Colonel Blimp's "Gad, Sir, reforms are all right as long as they don't change anything".  Such caution is not necessarily a bad thing, nor is it done through any ill-intent.  It may be a side-effect of the way welfare systems are structured:  the attempt by welfare systems to do two things at once, to save the poor and weak and to insure the fit and strong, makes it practically impossible to discover how well it is managing to do either.  What is clear is that sceptical analyses of welfare realities will have to come from outside the system.  Such analyses will necessarily lack the statistical wealth and research resources of government-sponsored work.  What they can do is focus attention on the central question:  is the welfare system really helping the disadvantaged?  To answer that question we need to grasp the complexities of the wide-ranging international debate about welfare, and attempt to measure Australia's welfare achievements and failings in the light of those arguments.

There are perhaps two main views about the development of the Australian welfare system.  Commentators sometimes contend that the system has changed very little since the main categories of pensions and benefits -- child endowment, unemployment and sickness benefits, pensions for widows and deserted wives, and automatic cost-of-living adjustments to age and invalid pensions -- were laid down in the mid-1940s.  The history of Australian welfare written from this perspective would see it as running parallel to the British welfare state.  This viewpoint tends to hold that the rapid growth in welfare expenditure in the early 1970s was the product of demographic and economic changes.  It will concede that payment levels for unemployment benefits also grew rapidly in that period, and that a new category, the supporting parents benefit, was created at that time;  but it will see these as responses to social causes rather than causes themselves of social change.  The Australian welfare system also tended not to follow the more complete commitment to universalism of Britain and the European social democracies -- in that respect we have been closer to the minimalist tradition of the United States.  Henry J. Aaron's summary of the Australian income support system seems a fair one.  He regards it as a hybrid between a universal benefits system and a system which regards the state as a repairman or an agent-of-last-resort "called upon to act only if all voluntary or private measures have failed".  The Australian system follows the repairman model in that payments are flat and income tested.  But, he adds, "some benefits under some programs (age pensions, for example) are high enough so that most people eligible on non-economic criteria also qualify on economic grounds.  Other programs (unemployment benefit and supporting parents benefit, for example) have some features that are quite generous, at least by US standards". ⁽¹⁾

An alternative view would look at the past two decades in Australian welfare history as running parallel to the American experience when Americans set out to overthrow their traditional minimalism.  It could be argued that since the 1972 election of the Whitlam government Australia has attempted its own "War on Poverty" similar to that launched by Presidents Kennedy and Johnson.  The scale is very different but the aims and ethos have been comparable.  The general expenditure picture -- counting education as a form of welfare expenditure -- is summarised by Budin, Barnard and Pincus as follows:  "The share of all governments' outlays devoted to welfare (excluding housing and grants for private capital purposes) rose from an average of a quarter in the second half of the 1930s to a third during the 1960s and a half in the 1970s". ⁽²⁾  Between 1966 and 1986 government spending on welfare and social security (not counting education) rose from 3.5 per cent to 7.5 per cent of gross domestic product. ⁽³⁾  It is this rapid rise which is in question here, and which might be thought of as constituting Australia's "War on Poverty".  Some of the optimism and idealism of the American effort surrounded the Henderson Poverty Commission.  The underlying belief that poverty could be eradicated by generous social support was the same.  There has been a similar interest in guaranteed minimum income schemes.  State welfare bureaucracies also grew rapidly.

The crucial difference, of course, is that the ten-year time gap between the American and Australian examples meant that the stagflation of the mid-1970s hit our effort before it could get off the ground.  It is an important fact about the Australian welfare effort that its most rapid growth has coincided with a period of economic slowdown.  Unemployment benefit payment levels increased rapidly just as unemployment rates rose.  (Similarly, benefits for single parents were expanded just as divorce was made easier.)  This may not seem surprising because hard times make for increased welfare needs.  But welfare spending need not correlate with economic decline.  It may grow out of prosperity.  To discover what might have happened here had we enjoyed the prosperity to carry through a US-style anti-poverty campaign we would need to look at the American experience between 1965 and 1975.  The American welfare debate has centred on the question whether, controlling for changes in general economic conditions, working-aged poverty has increased or decreased with increases in welfare expenditure.  Many have now concluded that, paradoxically, welfare expenditure increases have caused an increase in poverty.  Understanding how this result might be possible is now a major focus of thought about welfare systems, and forms the central question for what will be called in the next chapter "welfare scepticism".

Many in the welfare industry now think that the economic slowdown and consequent cutbacks have been the principal reasons why we do not seem to be making much headway against poverty in Australia.  But whether these are the reasons is very debatable.  Popular wisdom on this matter tends to disagree with the welfare consensus:  it is commonly thought that welfare assistance is as much part of the problem as it is part of the solution.  It may be that the assumptions and methods upon which our welfare efforts are based are as much at fault as the general state of the economy, particularly the assumption that more is better.  In any case, as the Social Security Review demonstrates, it can hardly be said that the welfare industry is alive with new ideas and approaches to this ancient problem.  And this is surprising because there are many ways of viewing the phenomenon of poverty.  This survey of the welfare debate will try to sketch some of them.  To do so will require us to go beyond the narrow horizons of conventional welfare discussion.

Loss of faith in state welfare is far from universal, and there are varying degrees of support for the different elements of the system.  Before we can be more particular here we need a rough taxonomy of welfare structure and aims.  The first and most obvious distinction to be drawn is between government welfare transfers and government welfare services.  The transfer system has three main functions:  poverty alleviation, social insurance and "horizontal equity".  The first two concepts correspond very roughly to the contrast sometimes made between "welfare" and "social security", with the former including unemployment and sickness benefits and the latter old age and widows pensions.  There is no ultimate distinction between transfers and services.  The difference has to do with the manner of funding and the degree of choice allowed to the consumer.  Exactly the same questions about aims and justice arise for welfare service funding criteria as arise for welfare transfers.  State welfare services are especially vulnerable to the theory of government failure.  Both are susceptible to interest group analysis.

Poverty alleviation is often referred to as "vertical equity", equity between the relatively well-off and the relatively poor.  Exactly what "equity" means and whether it is being correctly used in this context is rarely discussed.  The standard assumption is that equity requires that the distribution of social goods be in some proportion to needs.  Needs are usually taken to be a function of income and wealth per person dependent on those resources.  This test, very deliberately, takes no account of how that poverty was caused, but the question of causation is ethically important.  Poverty can be chosen -- for religious or ideological reasons, for instance -- or it can be assumed as a means of living off others, or it can be simulated.  Whether poverty alleviation is to be defended on grounds of justice or equity for the victims of society or is to be seen as an act of compassion and humanity permits of no single answer because the nature of the poverty depends in part on its origins.  "Equalisation" is a less morally loaded and question-begging term than "equity", and from here on it will be used in preference to "equity" except when the stricter moral implications of "equity" are intended.

That welfare spending serves an insurance function is sometimes denied on the grounds that most or many recipients take more out of the system in benefits and pensions than they put in in taxes.  Whether this is so is not easy to determine in a system where welfare monies come out of consolidated revenue and not out of individual accounts or ear-marked budgets.  Australia is unusual in having no ear-marked welfare spending (the Medicare levy is the closest we come to this).  Yet it seems hard to deny that our old age pensions are analogous to compulsory government-administered retirement insurance.  It might be objected that our pension system is not sufficiently like a genuine insurance scheme, or that we should move towards compulsory private insurance.  But these objections make sense because the present system is sufficiently similar for such comparisons to take hold.

Some of the contingencies against which we use the state as an insurance agency are relatively predictable, such as old age.  Others, such as disability, are not.  Both the risk of disability and the chances of reaching old age are fairly evenly spread across the community (although women live longer than men).  Whether unemployment benefits can be seen as a form of income insurance is more doubtful, since the threat of unemployment is spread unevenly across the workforce.  Unemployment benefits are more like a transfer to the vulnerable.  Whether we could move towards a private system of unemployment insurance depends upon whether it is reasonable to expect the high risk group to bear the cost of self-provision.  More generally, while the insurance function of state welfare systems might be replaced by (perhaps compulsory) self-provision through the private sector, it is more difficult to see how poverty alleviation can be handled privately.  To what extent these two functions can be disentangled is a matter which requires careful thought and analysis.

"Horizontal equity", which is also sometimes listed as one of the goals of a welfare system, is a notion even more resistant to easy definition than vertical equity.  The basic idea is that social policy ought to treat like cases alike.  The usual application of this notion is to taxation, where it is said to be "horizontally" inequitable for some taxpayers to be able to spread their taxable income across their dependants while others with the same gross income and family responsibilities are unable to do so.  By extension the notion has been applied to justifying any policies which take account of the number of dependants affected by it.  While "equity" can be correctly used in the taxation context, in the extended sense of the word it is preferable to use "equalisation", for the same reasons as applied to the vertical concept

All three welfare aims are in some way relative to the whole pattern of a person's life.  Poverty and need can be short-lived, or they can be chronic and inter-generational.  Assessments of need, in the course of assessing the urgency of need, must choose the time-span over which need will be measured.  Responsibilities for dependent children are a temporary phase for most of us.  Because of this, horizontal equalisation becomes in effect a cross between vertical equalisation and an income insurance scheme.  Horizontal equalisation equalises income across the life-cycle, making us more self-supporting in those periods when our income would be inadequate to our family needs.  In a sense, then, horizontal equalisation is a compromise between poverty alleviation and insurance.  It is the latter two which seem to be the basic functions of welfare systems.

Although most matters in this field are controversial, there is general agreement that the most urgent and most perplexing poverty issues today concern children and families.  The primary emphasis of this book will be on "the family in the welfare state", taking that phrase to refer to families with children.  However, issues of old age and the extended family network may also come under that description.  For the most part, as an issue in welfare policy old age is regarded as a matter for a "social insurance" approach, whereas issues to do with children and their parents fall under the headings of "poverty alleviation" and -- as this book will emphasise -- "horizontal equity".  Old age can then be treated as a separate matter, and will be discussed in Chapter Eleven.  The remainder of the book, and the remainder of this discussion of the wider welfare debate, will mainly concern dependent children and their parents.

"POVERTY"

Welfare spending, however much it has grown in the past two decades, is still only one segment of total government expenditure, and the taxes collected to pay for it are still only one part of total revenue collection.  It is generally accepted that welfare spending has to be viewed within the whole framework of government taxing and spending.  Thinking along these lines suggests the conclusion that the purposes of welfare spending reflect the general purposes of government taxing and spending.

The main purpose of government is the provision of public goods, goods which individuals cannot supply by and for themselves, goods which can be had only by communal effort.  Defence and foreign relations, public order, a system of justice, and many but not all public works (altogether about 40 per cent of all government outlays) are taken to fall into this category.  Using government taxing and spending as a form of social insurance -- as distinct from a form of redistribution -- is, rightly or wrongly, to treat that insurance as a kind of public good, even though to some extent the benefits could be provided by individuals for themselves.

Most of us accept that government has some role to play in redistributing income from the relatively rich to the relatively poor, and we support welfare transfers, government services and progressive taxation on the grounds that they are structured so as to tend towards achieving that end.  Welfare spending to alleviate poverty serves as the most direct application of this principle.  So too does spending on education, health, housing and employment.  Together social security, education, health, housing and employment outlays constitute more than half of all government expenditure.  If the principle that personal income taxation (PIT) should be progressive is controversial, the argument is mostly about the degree of progression appropriate and about the counter-productive effects of high marginal tax rales on personal income.  As a matter of fact, the total Australian tax system (as distinct from PIT) is proportional, not progressive -- a point which will be elaborated upon in Chapter Six.  However, because most government services and welfare payments are allocated "progressively" so that they favour the poor, the lack of progressiveness in the total tax system does not defeat the poverty alleviation objective.

Until recently, little was known about the degree to which public policy succeeded in redistributing income from rich to poor.  This deficiency has now been corrected (so far as such complex questions can ever be resolved) by the work of the Australian Bureau of Statistics in conducting Australia's first ever fiscal incidence study, published in 1987 under the title The Effects of Government Benefits and Taxes on Household Income. ⁽⁴⁾  This study enables us to measure with some degree of confidence the net effect of government on material well-being, and to compare its impact on different segments of society.  It is based on a variety of sources:  an analysis of the 1984 Household Expenditure Survey which covered 10,000 households;  estimates of direct and indirect taxation paid by those households;  and ABS public finance data covering the consolidated outlays of all three levels of government (federal, state and local) in the four main social expenditure areas:  education, health, housing and social security and welfare.  The study excludes outlays and revenues which cannot be allocated to individual households, such as those from defence, law and order, company tax, and the operations of public trading enterprises.

The most important results for our purposes are shown in Figure 2.1.  It appears that a substantial redistribution of income takes place through the Australian tax and welfare system.  All household income deciles (tenths of the population) get roughly equal benefits from government, with most going to the second and third deciles;  but the cost of these benefits is borne roughly in proportion to income rather than in proportion to apparent need.

Figure 2.1:  Benefits & Taxes per Household
by gross income decile (average, $ per week)

Source:  ABS 1984 Household Expenditure Survey, Table 3.1.

This, however, is not the whole story.  In a broader perspective it is not too much to say that "the Australian social welfare system is pervasive throughout the Australian economy".  This observation is made by P.P. McGuinness, who adds that "social welfare is the sole justification for the enormous network of regulations in Australia.  They are always defended because of their impact on social welfare and their presumed redistributive effect in favour of the poor".  McGuinness lists tariffs, farm product stabilisation, minimum wages, interest rate controls, housing for the poor, free education, various fringe benefits and concessions for pensioners, and publicly subsidised child care as instances of such quasi-welfare expenditures and regulation.  As McGuinness points out, economists tend to argue that such intervention and regulation very often favour the relatively well-off rather than the poor. ⁽⁵⁾  The economic effects of some of these forms of regulation are not likely to be captured well by the ABS study.

The primary purpose of redistribution and welfare spending is to prevent or at least alleviate poverty.  But to do this with any confidence we need some account of what poverty is and some understanding of what causes it.  This first problem, the definition of "poverty", is very much more vexed than is commonly realised.

What is poverty?  Consider a variety of possible candidates for the description:

• students living away from home with no family assistance, but with good job prospects in a year or two;
• unemployed teenagers living at home, receiving the dole and help from their families, paying no rent;
• a farmer in a bad year, with no income at all but with perhaps $1,000,000 worth of assets;
• a family of newly arrived migrants, from a country in which their income was lower than Australian minimum wages, prepared to work long hours at low wages in their new home;
• Aborigines on a reserve outside a country town, some chronically alcoholic, others willing to do some seasonal work but often living off unemployment benefits for long periods of time;
• a large, lower-working-class family, relatively happy and stable, with the father in continuous but low-paid work;
• old age pensioners, with low incomes but with a modest, fully paid-for suburban house;
• a depressed, bored fifty-five year old single man who gave up his job to go on unemployment benefits, who has saved nothing, and who rents a room in an inner-city boarding house;
• a childless couple buying and running a suburban delicatessen, working long hours and clearing little profit, with uncertain future prospects;
• a well-qualified middle-class family man, living for a few months on unemployment benefits while looking for a more attractive job than the one he has just given up;
• a young sickness beneficiary with a dubious case of "back trouble";
• a young sickness beneficiary with agonising back trouble;
• a businessman bankrupted by injudicious share dealings;
• an angry, disturbed homeless twenty-year-old living in a squat, supplementing the dole with petty theft to pay for his drink and drugs;
• a middle-class single parent with one school-age child living for a number of years on state benefits in low-rent shared accommodation;
• a young couple attempting to live self-sufficiently on a few acres of marginal farm land;
• a school-leaver or a person just reaching retirement age who is in the workforce for only part of any one year;
• any long-term resident of prison, hospital or mental institution.

Which of these persons is poor?  According to the dominant definition of the term, in which poverty is simply low income relative to the number of dependants supported by that income, they all are.  But very obviously these categories have almost nothing in common apart from their lack of income.  Disregard that single characteristic, lump them together, and the result might well be in every other way an ordinary cross-section of the Australian population.  They might have as much in common as all left-handed persons or all persons with good singing voices have in common.  It would be absurd to devise social policies for left-handed persons.  It might be equally absurd to devise comprehensive policies to deal with "poverty".  At least, any such policies will need to recognise the enormous variety of cases which fall under that description, and to be prepared to differentiate between them.

The notion of poverty conceals other conceptual illusions.  In most accounts poverty is defined in relation to average earnings.  This seems at first reasonable, until it is realised that on this definition (all other things being equal), the faster the growth of the economy and of average earnings, the faster may be the increase in those defined as being in poverty.  Even worse, some definitions tie the notion to average household earnings.  The problem here is that household earnings rise with women's workforce participation, not just with average weekly individual earnings.  In a period in which women's workforce participation has risen steadily the definitional increase of those in poverty must also rise.  But the increase is merely definitional.  Actual living standards for the lowest ten per cent of the population may well have risen at the same time as these accounts show poverty to be increasing.  The effect is that of a hall of mirrors in which the same figure appears larger looked at in one way and smaller viewed in another.

Poverty-line statistics similarly fail to make the distinction between short-term and long-term poverty, a distinction which makes a world of difference.  They do not usually include as income the market value of government-provided in-kind assistance and services such as housing, health care or education.  By this way of reckoning the matter, people may have all their needs catered for and yet still be counted as poor because they earn no income.  The focus on monetary income also means that no account is taken of a person's non-monetary resources -- fixed assets, education, qualifications, family support and social status.  A person may be income-poor but resource-rich, and it is not at all obvious that a resource-rich person is in need of "income support".

Income relativities are of little interest for another equally compelling reason.  The fact that one group of incomes is rising faster than another group does not by itself show that it is rising at the expense of the other.  The two groups may be quite independent of each other.  The arrival of computers, for instance, provides a lucrative opening for a whole class of persons who would not have done so well in a world dominated by conventional literacy and numeracy skills.  If the incomes of the middle class are rising faster than those of the poor this may be due to the advantages of such innovations.  And the composition of the newly wealthy class may be quite different from that of the old.  Good social policy will do what it can to open up these opportunities to the poor;  but this can be done only if we are able to identify where these opportunities lie, and this information is not to be acquired from bald income statistics.

If our aim is to minimise and alleviate poverty we need some accompanying theory to account for changes in the "gap" between rich and poor.  Only then can we hope to be able to devise appropriate policies to help the poor.  It is these theories which are crucial, and which are so difficult to establish.  Suppose the gap is widening.  This may just show that excessive wage rises have put more people out of work, or it may show that more people are becoming chronically dependent upon welfare benefits.  Suppose it is narrowing.  Then -- it can be claimed -- we can see that free enterprise does tend to raise the relative position of the lowest income groups. ⁽⁶⁾  These are not conclusions that welfarists are accustomed to draw.  But unless we concentrate our efforts on understanding the mechanics of poverty, they are just as good as any other theory.

None of this is to be read as showing that there is no poverty, or at least .serious hardship, in Australia.  What it does show is that the orthodoxies of welfarism provide us with no credible means of measuring its real extent, though we can at least be sure that it is very much less than the figures commonly produced by welfare advocates.  One British assessment of poverty, using not income statistics but a standardised list of household "necessities" such as a refrigerator, annual holidays and new clothes, seems to show that only 1.5 per cent of the British population is poor. ⁽⁷⁾  Australia is generally assumed to have less poverty than Britain, but welfarists do not speak of a poverty rate of one per cent.

We may also be led to suspect that poverty is not a one-dimensional function of low incomes, but -- as we shall suggest -- a complex social and personal phenomenon.

CAUSATION AND THEORY

The question of the causes of poverty is even more contentious than that of its definition.  It is, unfortunately, not enough to assume that because poverty is an absence of adequate income it can be cured simply by supplying "income support".  If we are mistaken about the causes then any intended cure may simply make the problem worse.  There are in fact quite a few moderately plausible theories about the causes of poverty, and about the justification of welfare spending, and the conflicts between them cannot be ignored.  The most general causes of poverty are no great mystery.  Unemployment.  Family breakdown.  Old age.  Chronic illness and disability.  Alcoholism.  Drug abuse.  Laziness.  Welfare dependency.  Educational deprivation.  Cultural demoralisation.  Racial and sexual discrimination.  Political persecution.  Observers will rank these causes differently.  Even more difficult is to get some grasp of the interaction between these elements.  It may be that there are no valid generalisations in this field.  Many people face poverty because of a combination of these factors;  many others experience the same conditions and yet manage to overcome them.

Considering the complexity of these possible causes, it is surprising to find so much agreement about basic matters of principle amongst those who shape welfare policy and advocate on behalf of welfare recipients.  For convenience this consensus can be designated "welfarism".  Angered at the existence of poverty in a prosperous society, welfarists conclude that economic growth by itself is no solution to the problem.  "Poverty is not just a personal attribute;  it arises out of the organisation of society", as the Henderson Report put it. ⁽⁸⁾  Others go further and contend that the causes of poverty are not in any way personal:  to suggest otherwise is to indulge self-righteously in "blaming the victim".  Poverty, we are told, is "structural";  it arises out of the "social system".

Unfortunately, the metaphors of "system" and "structure" are not very helpful.  These terms have been so prevalent but have remained so opaque that it is difficult to avoid the conclusion that welfarism lacks any discussable social and economic analysis.  Such analysis as welfarism supplies usually consists of attacks on the greed of other interest groups.  However justifiable these criticisms might be, they do not by themselves lead to the desired conclusion that the illicit gains of these other groups ought to be transferred to the welfare budget.  (The Henderson Report is an exception to this rule because it rightly took inflation very seriously as a threat to the welfare of the poor.  It wanted both greatly expanded welfare spending and controls on inflation.  But how these two aims were to be reconciled it did not explain.)  While it very probably is true that a society dominated by narrow interest groups is unhealthy for the poor (just as it is unhealthy for families), so far welfarists have net drawn the obvious conclusion that we should move towards a deregulated society in which economic well-being depends more upon effort than on access to government.

For a long time now criticism of the welfare system has been stifled and obstructed by moralistic counter-objections.  Welfarists have been able to divert attention from any failings of welfare practice by accusing the critics of meanness and greed.  The objections are moralistic rather than genuinely moral because they rely for their effect upon an artificially restricted moral vocabulary.  The argument is patently ad hominem, but it is not less effective for that.  All too often debate in this area sinks to a level where it seems as if welfare supporters need an enemy of this rampaging ogre-like kind -- Margaret Thatcher, Ronald Reagan and Malcolm Fraser have all been fitted out for the role, none of them very plausibly -- to restore their faith in their own failing solutions.  The fact that per capita welfare expenditure has continued to rise seems not to register in their calculations. ⁽⁹⁾

Beyond attacking other interest groups, welfarism seems barren.  It becomes reduced to seeking solutions to welfare problems from entirely within the framework of the existing welfare system.  The universal remedy seems to be bigger welfare budgets, with a few percentage increases in payments here and another few million dollars' worth of services over there.  No doubt keeping track of the ever-shifting "needs" of the community is a necessary exercise, but when "needs" seems always to increase it becomes difficult to know whether this whole approach is really achieving what it says it aims to achieve.  Maybe instead of more welfare we need more thought about the origins of real wealth and well-being.  Instead of grimly pursuing the same old one-track solutions we ought to be opening up new lines of thought, new theories and new hypotheses.  The orthodox theory of poverty itself suffers from a poverty of theory. ⁽¹⁰⁾

Marxist theory has exercised a strong pull on welfarist thinking, mainly because welfarism lacks any strong or distinctive framework of its own.  The welfare state, some have gone on to claim, is only one stage in the long march of the working class towards equality and justice.  Society's debt to the poor goes beyond the mere prevention of pauperism or the mere provision of opportunities for self-improvement.  The social order itself must be restructured.  No real change can be expected until this is done, and indeed welfare assistance may merely delay the onset of genuine advances.

Marxists are divided at this point between those who accept the welfare state as a necessary but temporary expedient and those who see it as a bribe by the rich to prevent the poor from recognising that their real interests lie in class struggle.  The best-known Marxist work on the subject, Ian Gough's The Political Economy of the Welfare State, ends with a distinction between those who see the welfare state as "a socialist island within a capitalist sea" and those who see it as "a creature of capital, pure and simple, [and] will have nothing to do with extending or defending it".  Gough thinks that the concept of "human needs" helps to clarify what is positive and what is negative in the welfare state, yet the substance of his book does nothing to justify this claim, and the concept seems impossibly general to perform such a task.

Reading Gough, it soon becomes apparent that this ambivalence is no temporary difficulty but is rooted in an ambivalence towards the state itself which goes back to the initial premisses of Marxism.  In Marx the state is at once both an "epiphenomenon" and an instrument of class domination.  It will become the instrument by which the proletariat sets the world to rights, and yet it will wither away as an unnecessary fiction.  Marxism has difficulty supplying a coherent account of the welfare state because the welfare state throws its historical scheme into confusion.  If we presently live in the bourgeois era -- as we must because the means of production are mostly still in private hands -- then the state cannot really be aiming to raise the well-being of the working class.  But if the welfare state is a foretaste of socialism then it cannot suffer retrenchment and must be carried forward with the march of history towards the future full triumph of socialism.

Marxist optimism about the welfare state is intellectually unsatisfying:  it simply asserts something which contradicts Marxist premisses.  Marxist pessimism about the welfare state goes further than most welfarists are prepared to go, partly because it seems too cynical (radical libertarians may find it more congenial), and partly because it leaves welfare agencies with no useful role to play.  Pursuit of a consistent Marxist theory ends only in intellectual schizophrenia.  The difficulty for those who resist Marxist conclusions is to define the causes for which their activities are meant to be the cure.  Here welfarism has bogged down.  It is no longer adequate to talk abstractly of "society" or "the system", yet a class analysis leaves welfare with little role to play.

The Marxist contention that welfare assistance serves the needs of "capitalist society" is not wholly mistaken.  Our form of capitalism is democratic capitalism, and it may be that welfare provision has a special role to play in a democratic society.  A democracy which allowed some of its members to degenerate to the point that they became incapable of playing their part as competent citizens would to that extent be failing as a democracy.  Citizenship requires, at the very least, basic literacy;  to be uneducated in a modern society is to be disenfranchised.  It was Aristotle who first observed, in his Politics, that in a democracy it "is in the interests of all classes, including the prosperous themselves" that "measures should be taken to ensure a permanent level of prosperity".  Far from being a devious and sinister form of exploitation by the ruling classes, as it sometimes is made to appear, this is a feature of our society which should be welcomed and supported.  The real difficulty is in how to achieve it, not whether to try to achieve it.

There are two other voices to be added to the welfarist consensus, those of the feminist and the Christian.  It is increasingly being recognised that women bear the burden of poverty more acutely than do men.  Perhaps it should be added that women increasingly bear this burden more than men, for the evidence suggests that the proportion of women in poverty is larger than it was in the past.  There are a number of partial explanations of why this is occurring.  Bettina Cass has listed these as:  "women's discontinuous workforce participation, lower rates of full-year, full-time employment, lower pay when in work, responsibility for child care and the ideology of women's dependency on a male income earner". ⁽¹¹⁾  A strictly feminist account would want to reduce the first four factors here to functions of the fifth.  Cass omits to mention one other obvious factor, divorce and family breakdown.

Usually, however, feminist accounts of the causes of poverty are not sharply distinguished from the more general welfarist position, and it is as difficult to discover any distinctively feminist social theory as it is to discover any distinctive welfarist theory.  Feminism, like welfarism, has tended to rely on other theories such as socialism to provide it with an account of the causes of women's economic vulnerability.  But, as some feminists have noted, it is not at all obvious why male socialists should be friendlier to women's interests than any other group of men.

Many who enter the welfare field do so from motives of Christian charity and compassion.  They may see welfare work as a practical extension of the commands of the gospels.  In this they stand in a long and continuous historical tradition.  The Churches have always been the main source of voluntary welfare workers in Western society, and they still are today.  (Even the term "the welfare state" seems to have been coined by Archbishop William Temple.)  However, whether there is a distinctively Christian view of poverty and society is very doubtful.  "Blessed are the poor".  "The poor will be with you always".  "Consider the lilies of the field".  "If any will not work, neither shall he eat".  Christian origins and tradition are in this matter, as in much else, fairly complex.  Nevertheless, in recent years most Christian discussion has been from a welfarist viewpoint.  If the poor are "blessed", as the Beatitudes insist, then blaming them for their sufferings will seem at once both uncaring and un-Christian.  (Few Christian spokesmen seem to ask whether the decline in Christian belief and affiliation might not be an important cause of social disarray and deprivation, though this hypothesis is not obviously more implausible than any other.)  The New Testament ethic on poverty is matched by an equally categorical position on divorce.  Considering the demonstrable connections between poverty and family instability it may be apposite for the churches to consider whether there are internal connections between these two ethical imperatives.  Liberal church leaders tend to emphasise one, evangelicals the other, and both seem smaller than the original.

What Christianity might also contribute to welfare discussion is some understanding of the nature of compassion, upon which Christian faith is founded.  Compassion is easy to feel but difficult to practise, and not just because it involves self-sacrifice:  it may be misplaced, and its misplacement may be destructive.  It is also subject to the "small is beautiful" principle.  Institutionalised compassion is necessarily depersonalised compassion, and may not count as compassion at all.  In many of life's crises what is needed is not money but the patient care even of someone who is otherwise a stranger.  In the past Christians have understood these matters and specialised in their practice;  but to the extent that they now turn to "social justice" as their central tenet they cease to contribute what once made them a distinctive presence in society.

NEED AND EQUALITY

If welfarism is not illuminated by its intellectual allies, Marxism, feminism or Christianity, what content can we give to the notion?  Two deep-seated moral convictions hold welfarism together.  One is the belief that under no circumstances must commentary on welfare matters engage in "blaming the victim".  This view is often asserted but rarely examined or discussed.  The phrase "blaming the victim" derives some of its power from the fact that it comes close to being tautological.  If a person really is a victim of society then of course it would be reprehensible to blame them for their situation.  The difficulty is to know whether they are or are not to be thought of as a victim.  The fact that they are at the bottom of the social pile is no proof that they are the victims of those above them.  The causes may lie in their own actions, or there may be no particular causes.  Any society which does not enforce perfect equality will have some "above" and some "below".

The second binding assumption of welfarism is a belief in the moral importance of equality.  Welfare politics is dominated partly by the notion of rights, but even more by the notion of equality.  A great deal of comment and research on poverty in Australia is preoccupied with the question of whether incomes and wealth are or are not becoming more equal.  But the question of equality is, by itself, of little interest.  There is no good argument to show that equality is by itself morally desirable.  Sometimes it is desirable, as in equality before the law;  at other times it is not, as in the awarding of prizes after a race.  If equality were intrinsically desirable then it would be impossible to account for those cases in which clearly it is undesirable.

Rights, including welfare rights, if they exist at all and if they are to be more than just assertions of wishes, must be based on some deeper and more useful moral criterion.  So also must the notion of the public interest, if it is to be distinguished from the multitude of special interests masquerading as public.  So too must the notion of equality, if we are to determine which forms of equality are desirable.  That criterion is justice.  This is a conclusion which welfare advocates might happily accept, for many of them feel that welfare systems are aimed at providing "not charity but justice", but this assumption is very doubtful.  The beauty of the concept of justice is that it ties together two apparently disparate notions:  needs and deserts. ⁽¹²⁾

We commonly assume that justice is about needs.  At the back of our minds we perhaps have the slogan "From each according to his abilities, to each according to his needs".  Unfortunately, applying this principle by itself would devastate the living standards of the Australian poor in very quick time.  Our planet contains perhaps a billion inhabitants whose needs are, by any objective measure, very much more urgent than those of the poorest of the Australian poor.  If justice is about needs then their needs come first.  Very few of us believe that they do come first, and even fewer of us put that belief into practice.  Perhaps the world's poor should take precedence.  But, at least, we cannot justify anything like our present preference for helping our fellow countrymen first on the simple ground that justice requires us to help the needy.

What is it that creates obligations to our fellow Australians stronger than those to starving Sudanese or homeless Bangladeshis?  Is welfarism just a species of moral parochialism?  The fact that Sudan and Bangladesh are relatively remote is irrelevant:  there are many destitute in Indonesia and New Guinea to whom we feel very little national sense of obligation.  The only possible answer seems to be that those who benefit from the Australian welfare system would, if they could, willingly contribute to the well-being of other Australians.  If an unemployed or disabled Australian suddenly came into a fortune he might expect to pay out a large part of the windfall in tax.  If Sudan suddenly became rich in oil or gold it would not be expected to do more than pay off any debts it may have to those countries who previously gave it assistance.  It is of course morally plausible and logically consistent to argue that we should seek to eliminate world poverty before we worry about the considerably lesser hardships of Australian citizens, but that line of argument will not be pursued here.

Welfare entitlements within the Australian system, if they have any moral foundation, must rest on the recipient's willingness to become a welfare contributor.  Needs should be regarded as deserving of recognition only when the person in need has shown himself willing but unable to be self-supporting.  We presume that net beneficiaries are willing but not able to be net benefactors.  It is for this reason that the question of why someone is unable to contribute is morally sensitive.  A claim upon the system of benefits requires a demonstration of willingness to contribute as well as a demonstration of need.  A person may be unable to contribute because he (or she) is disabled, though many disabled can undertake some kinds of work.  He may be unable temporarily to find work, though many unemployed could contribute to community projects or voluntary welfare activities of the kind promoted by "workfare" programs.

Justice, then, involves effort, or at least willingness to contribute.  Need alone may supply a reason for being generous, but it alone does not establish entitlement to benefit.  The distinction between the deserving and the undeserving poor, which welfarists have so often regarded as obnoxious, is inescapable if we are to regard welfare as a matter of justice and not as a matter of charity, which they also regard as unacceptable.

Nor can welfarism fall back comfortably upon the claim that its purpose is to equalise incomes.  Exactly the same objection to needs-based policies applies to equalisation strategies.  The most conceptually-articulated discussion of equality in Australian welfare writing is that to be found in Alan Jordan's contribution to the Social Security Review, The Common Treasury:  The Distribution of Income to Families and Households.  Jordan himself prefers to start from the egalitarian proposition that "none of us owns, as of prior right, that whose possession denies others the possibility of as good a life". ⁽¹³⁾  Positively, Jordan's egalitarianism amounts to

a feeling of solidarity based on each person's rational belief that on balance his life is as good, and worth as much, as other people's, that any dissatisfaction is either within his power to overcome or results from accidents that can happen to anybody and not from unfair treatment, and that he can enter into transactions with others not as a supplicant but as one who asks for no more than he can give. ⁽¹⁴⁾

But (following Ronald Dworkin) he is prepared to subject this preference for equality to an "envy test" to ensure that differences in ambition and different tastes for leisure are taken into account.  From this it follows (as he notes) that inequalities of income "do not necessarily represent or correspond to inequalities in a more basic sense".  He also recognises that "many of the relevant inequalities [that egalitarians wish to minimise] originate or can be redressed only outside the actual and proper domain of public policy". ⁽¹⁵⁾  The obligations of public policy are to ensure equal access to education, equal access to careers and to a minimum income, conceived as a form of collective insurance policy against the contingencies of talent and fortune.

All this is arguably fairly close to the institutional arrangements that we presently have.  Jordan allows that

We may, like Pareto, argue that historically the condition of the poor has been improved by economic growth rather than the redistribution of existing wealth and therefore that the best distribution [of incomes] is whichever maximises work incentives, capital accumulation and so on, or argue that the important value is not equality but equity and therefore that a fair distribution is whatever results from fair rules of allocation. ⁽¹⁶⁾

These would not be egalitarian positions, though he offers no reason for thinking of them as less plausible than egalitarianism, and there is considerable overlap between their practical implications.  What Jordan's position -- like other forms of egalitarianism -- lacks is any reason for restricting an equalisation program to Australians alone.  And related to that, he has no account of the obligations entailed by membership of a mutually-supportive society.  Jordan quotes Dworkin's judgement that a person can demonstrate need "by attempts to find employment that have failed, or by evidence of less than average general physical and mental abilities, and so forth". ⁽¹⁷⁾  The vagueness of these criteria hardly does justice to the importance of the issue.  It makes a very large difference whether or not the benefits of society's support systems are available irrespective of effort and willingness to contribute.  Someone who holds that "a fair distribution is whatever results from fair rules of allocation" can argue that society need only supply the opportunity for self-sufficiency.  Egalitarians who want to go beyond equality of opportunity seem committed to the implausible view that society must assist a person regardless of his willingness to support himself.

Showing that "equality" is by no means synonymous with "equity" does not by itself show that we should not pursue social policies which tend in some degree to equalise the well-being of persons who would otherwise be markedly unequal.  What it does show is that the pursuit of equality is not a goal binding upon governments.  Likewise, there are no "welfare rights" which arise solely out of "need".  Governments may well wish to eliminate poverty, though more from motives of charity, prudence and a sense of social solidarity than from obligations arising from a sense of justice.  The importance of this is that it introduces an element of discretion into policy-making which would not obtain if welfare was straightforwardly a matter of seeing that justice be done.  Under this way of thinking the primary consideration is the pragmatic question:  what works?  If a policy visibly tends to reduce poverty in an enduring way or if it promotes family success and stability, then very probably it will win strong support from the taxpaying electorate.  But if it tends to have the opposite effects then the electorate will be well within its rights to seek to veto such a policy.  And the question of what works is an empirical question, the answer to which has to be discovered by trial and error and by relevant description of the phenomena.

DESCRIPTION

If welfarist writing is lacking in argument, it is also surprisingly deficient in description.  It is often almost impossible to see beyond the veil of statistics to the life stories which the statistics purport to describe.  To take a simple example, it would be impossible to discover from the orthodox writing on one-parent families that female sole parents are (with the exception of a small sub-population) just an ordinary cross-section of the female population, with exactly the same educational and vocational qualifications as their contemporaries.  They are not generally resource-poor, whatever their income statistics might suggest.  Similarly, welfarists rarely discuss the relation between welfare dependency and crime, alcoholism or domestic violence, though analysis of possible connections between these is commonplace in the welfare literature of other countries. ⁽¹⁸⁾  Saunders and Whiteford report that they know of no work in Australia "exploring the relevance of the behavioural approach embodied in the concept of the underclass, or applying the methodology developed overseas to investigate whether an Australian underclass exists". ⁽¹⁹⁾

Exceptions to this rule are rare but they do exist.  Jean McCaughey's A Bit of a Struggle:  Coping with Family Life in Australia is one model of how it can be done.  McCaughey's work is set in Geelong, and describes the lives of sixty-four families most of whom were not well-off and who made use of the welfare system in one way or another.  The general picture which emerges is of a stable society with functioning family networks and a relatively modest usage of welfare services and income support, but the detailed evidence can be read in a variety of ways.  In summing up, McCaughey comments, "It often seemed that the families whose needs were greatest received the least help;  and the very problems which created the need, such as alcoholism and domestic violence, were among the chief causes of their isolation". ⁽²⁰⁾  This might be taken as evidence of a poorly-targeted welfare system.  She reports that many respondents chose not to use community facilities even when they were eligible to do so, preferring help from within their families if they could get it, and sometimes retreating into their own lives if they could not.  But she also notes many cases of persons living for long periods, and for no obvious reason, on welfare benefits.

The distinction between welfare services and welfare benefits is a crucial one here.  Australian welfare expenditure for families is heavily skewed in favour of spending on unemployment and supporting parent benefits rather than on local-level services for people with a variety of needs.  McCaughey's respondents disliked the large impersonal bureaucracies, particularly the Department of Social Security and the Commonwealth Employment Service.  On the other hand, she found that ethnic clubs, sporting organisations, churches, childcare cooperatives, financial counselling services and neighbourhood houses played a vital part in supplementing family resources and opening up opportunities for their members.  The message here is certainly that small is not only beautiful but very likely more effective.  The small voluntary welfare agencies were thought to be helpful, innovative and imaginative, and in no way demeaning.  Although such agencies have been for long unfashionable there is considerable evidence now, from both here and overseas, that they work very well.

McCaughey notes also -- as others have found -- that deprivation is intergenerational and is bound up with poor family relationships.  On this evidence there are good grounds for thinking seriously about how to help families improve those relationships, difficult and delicate though that task may be.  Even with "long-standing and intractable problems such as alcoholism, domestic violence or psychiatric illness", she sees self-help organisations as vitally important, because they provide friendship and mutual support.  Yet, as she observes, these organisations are "still the Cinderellas of both State and federal governments and can be cut by arbitrary decisions". ⁽²¹⁾  McCaughey includes childcare as one of these essential family support services, though she notes that most families had little wish to use it when it was available.

The importance of family life is also painfully evident in the more desperate existences described by John Embling in his book Fragmented Lives.  Embling works in west Melbourne with the children, teenagers and mothers of broken families, providing in his Families in Distress Foundation a relatively stable home and refuge for many local youths, the calm eye in the centre of a social cyclone.  Violence, suicide, crime, promiscuity, drunkenness, drug addiction and aimlessness are routine in Embling's world.  In his rare spare moments Embling has given a great deal of thought to the causes of and possible cures for this chaotic condition.

The most instructive lesson here is the way Embling tries to reproduce in almost impossible circumstances the moral order that most parents convey almost without thinking about it to their children, which he describes as "a pragmatic blend of love and discipline". ⁽²²⁾  Without this central structuring experience, he has found, all else is a waste of effort.  The people he works with may be poor and may lack community facilities, but that is not their essential problem.  What they lack most of all is the inner stability which comes from receiving and learning to practise that crucial combination of authority and affection.  Enabling believes that easy-going liberalism is often deeply destructive:

I hate the old-style authoritarianism, but some of the freedom-at-any-cost brigade are even more repressive in their own licentious way.  They free children to destroy themselves.  That's not freedom, it's an outburst of infantilism. ⁽²³⁾

This important point has implications for welfare policy.  He accepts that "handouts are necessary in a crisis, but I don't believe it is healthy to treat them as a matter of course". ⁽²⁴⁾  The Foundation's motto is, very aptly, "No Rights Without Responsibilities".

A third example of illuminating welfare writing is David Pollard's Give and Take.  The Losing Partnership in Aboriginal Poverty.  The title is well chosen, reflecting as it does the importance of reciprocity in constructive welfare practice.  His book is an attempt to understand why extensive funding for Aboriginal welfare seems to have done so little to lift the recipients out of persistent poverty and dependency, "the reappearance -- generation after generation -- of almost identical indicators of social deprivation". ⁽²⁵⁾  In Pollard's view, the key mistake has been the absence of a realistic appraisal of Aboriginal skills and of Aboriginal aspirations.

Policy making has now to come to terms with the lack of communal skills among Aborigines, collectively, and their desire, individually, for participation in mainstream social experiences, especially workforce participation. ... Aboriginal employment has, until the 1986 Miller Report, only rarely been addressed in the Commonwealth literature as the key issue affecting dependency. ... It may be the advent of stable or declining funding which acts as a spur to putting into place programs which actually deal with the clearly expressed needs for work and other forms of social participation.  It may be the relative shortage of resources which contributes to ending the dependency that so characterises Aboriginal history. ⁽²⁶⁾

Pollard rejects mystiflcatory talk about Aboriginal unity and the assumption that the channelling of funds to Aboriginal "community" organisations will by itself permit "self-determination".  Aboriginal society is not, he says, "a seamless garment linking leadership to people, community to community, and community to community-based organisation*.  The "chief constraint" upon Aboriginal advancement is the lack of Aboriginal "managerial expertise". ⁽²⁷⁾  He argues that we should emphasise the differences between black and white poverty less, and stress the similarities of circumstance awl ambition more.

There will be no special discussion of Aboriginal welfare issues in this present book.  Interested readers should refer to Pollard's work, which is perhaps the most astute white analysis of the subject.  There is of course plenty of important Aboriginal description of the failures of past white policy, though rather less has been said about the ill-health, alcoholism, petrol-sniffing, educational failure, welfare dependency, factional conflict, poverty, unemployment and general demoralisation still suffered by many Aborigines. ⁽²⁸⁾  This dark side is far from being the whole story, however.  Pollard argues that Aborigines are gradually finding a place in the larger society, a place closer to that envisaged by the old integrationist position than to the separatist vision implied by some of the land rights and self-determination rhetoric.  In Pollard's view, "large sections of the Aboriginal community wish to enjoy the same benefits from society that whites are perceived as enjoying.  In expressing these needs -- a steady job, a good house, a real education -- Aborigines are expressing an implicit intention of conforming to the sets of white values associated with them". ⁽²⁹⁾  A realistic policy should seek to build upon this wish, in order to combat the legacy of demoralisation and displacement.

What McCaughey, Embling and Pollard describe is real lives, not ideological abstractions or statistics.  But when we see these lives close up we begin to see that their problems are rather different from those depicted by the welfarist consensus.  Large and vague generalisations about "society", "class", "gender" and "poverty" are replaced by particularity and variety.  The main social failure, in their accounts, appears to be not a lack of "income support" but our inability or unwillingness to provide access to work.  The agency most closely involved, the Commonwealth Employment Service, is held in low regard.  And our system of almost unlimited access to welfare benefits for the workforce-aged appears to be a highly dubious solution to the problem.

If any single valid generalisation emerges from McCaughey's and Embling's work (Pollard's subject is rather different) it is the overwhelming importance of family life in preparing people for the adult world of work and marriage.  If welfare policy is to match the realism of this writing then it will have to take those matters as seriously as it presently takes the secondary question of income support.  There are some signs that the more thoughtful and perceptive of welfarists are beginning to take an interest in these issues.  Adam Jamrozik, for instance, has argued that welfare debate should concentrate on "the forces at play" which lead to poverty.

In the prevailing perspectives in social research and in social policy the focus of attention tends to be on the outcomes of these forces (whatever they are) but not on the forces themselves;  that is, the focus is on the outcome of inequality rather than on the mechanisms that lead to inequality. ⁽³⁰⁾

In another paper Jamrozik has cautiously approached the thorny question of the family.  He concludes his discussion by observing that

If ... it is true that a high proportion of families and chikiren who need attention and assistance from State and non-governmental welfare agencies come from one-parent families, it then would seem logical, for social and economic reasons, to allocate more resources to the two-parent low-income unit so as to maintain its economic viability and thus lessen the need for some of the remedial measures which are now used after that family unit breaks down. ⁽³¹⁾

Jamrozik argues that we need to rethink the treatment of the family unit in the taxation system.  He believes that fairness for low-income families requires an adjustment of tax thresholds.  However, he regards any proposal for family unit taxation as "a utopian suggestion, because, for political reasons, no government would consider it". ⁽³²⁾  About this, however, opinions are changing.  A National Social Science Survey in 1987-88 found that 74 per cent of Australians would prefer tax cuts to increased spending on social services. ⁽³³⁾  This is not because Australians are an ungenerous people -- a survey reported in the same paper showed that they give $869 million a year to charities, or about $70 per adult annually, the second highest level of giving of any country.  Disillusion with our present welfare expenditure policies rests not on selfishness but on the suspicion that the present forms of spending are not giving good value or serving desirable social ends.

Supporting the low-income two-parent family through the welfare and taxation systems does now appear to be a high priority, but getting the best combination of policies without creating poverty traps is no easy matter.  Whether the present Family Allowance Supplement will achieve that goal is still highly debatable.  Later chapters in this book will attempt to unravel the complexities of these questions.  But before tackling them we need to pursue further the alternatives to welfarism.

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ENDNOTES

1.  Henry J. Aaron, "Social Welfare in Australia", 384.

2.  Butlin et al, Government and Capitalism, 194.

3.  See EPAC Council Paper 35, Chart 2.1.

4.  ABS Cat. 6537.0.  For some general cautionary comments on statistics of this sort see Piggott, "Statistical Incidence Studies:  An Economic Perspective".

5.  P.P. McGuinness, in Conference Discussion Relating to the Paper "Social Welfare in Australia". 60.

6.  It is interesting to note that, among the rapidly growing economies of East Asia, the country with the least government economic and welfare intervention, Taiwan, seems also to be achieving the most equal distribution of the benefits of growth.  See e.g. Kasper, Accelerated Industrial Evolution in East Asia.

7.  This is the average of the third column of Mack & Lansley's figures shown in Saunders & Whiteford, Measuring Poverty, Table 2.

8.  Henderson Report, 1, 1.

9.  See Hendrie & Porter, "The Capture of the Welfare State", 20:  "per capita real expenditures (1986 dollars) on social security have risen from $514 in 1970-71 to $1300 in 1986-87, ... with similar escalations in spending on health and education, in the name of the less advantaged".  Daryl Dixon has shown that under the Fraser Government the number of social security pensioners and welfare beneficiaries rose by almost one million, whereas under the Hawke Government it has fallen by 77,000.  He adds that "In only one of the seven Fraser Government budgets was welfare spending cut in real terms" (Review, March-May 1989, 5).

10.  This conclusion is not idiosyncratic.  The most recent work on the subject, Saunders and Whiteford's Measuring Poverty, seems to share this sense of frustration with the existing poverty measurement techniques.  They speak of the "risk of undue obsession" with details, and complain about "the almost total lack of effort put into developing an alternative" to the Henderson poverty line.  They emphasise the weakness of taking money income as a measure of well-being.  Their own discussion, like most others, has nothing to say on the causes of poverty.  See ibid. 34.

11.  Comments in Targetting Welfare Expenditure on the Poor, 4.

12.  In Giving Desert Its Due, Wojciech Sadurski provides a full-scale defence of a needs-and-desert account of justice (one quite independent of the partly ad homlnem argument to be offered below).  For a well-argued attempt to rehabilitate the notion of rights (partly against the kind of arbitrariness which fails to distinguish between wants and rights) by tying rights to social roles, see Ewin's Liberty, Community and Justice.  (Both Ewin and Sadurski are Australian philosophers.)

13.  Jordan, The Common Treasury, 2, 203.

14.  Ibid. 206.

15.  Ibid. 206, 204.  See also Dworkin, "What is Equality?".

16.  Ibid. 202.

17.  Ibid. 201.

18.  See, for instance, Wilson & Hermstein, Crime and Human Nature, 315-35.

19.  Saunders and Whiteford, Measuring Poverty, 34.

20.  A Bit of a Struggle, 219.

21.  Ibid. 229f.

22.  Fragmented Lives, 100.

23.  Ibid. 16.

24.  Ibid. 23.

25.  Give and Take, 126.

26.  Ibid. 132-34.

27.  Ibid. 118, 123.

28.  See also Collman, Fringe-Dwellers and Welfare.  Collman's description of life on the fringes of the outback towns is realistic and penetrating.  In his view, "The basis of Aboriginal ingenuity with respect to whites is a battery of techniques whereby they gain access to white-controlled resources but minimise their debt to, and involvement with, white [welfare and other] agencies" (8).  The irreverent, cliché-free style of the book is suggested by the following:  "The Mt Kelly people describe their escapes from the welfare authorities with great enthusiasm and they boast of houses they have rejected or destroyed.  They deny that they are poor and take great pride in the amount of money that flows through the camp.  They are conscious and inveterate spendthrifts.  Many Mt Kelly people spend large amounts of money on items most white officials consider wasteful, particularly liquor" (108).  The book includes important discussions of family structure and of the social role of drinking.  However, Collman's "Epilogue" (entitled "The Bureaucratic Expropriation of Aboriginal Culture") has little to offer towards the improvement of welfare policy.

29.  Ibid. 122.

30.  Jamrozik, "Are there Alternatives to the Welfare State?", 136f.

31.  Jamrozik, "Social Security and the Social Wage", 27.

32.  Ibid. 21.

33.  The Australian, 11 December 1989.