Friday, July 13, 2001

Rejoice, For the Choice is Yours

In recent days, Tony Abbot has drawn down the predictable, intemperate responses for his startling revelation that even poor people exercise choices in their lives which affect their well-being.

Before considering this as a social proposition it is worth looking at the proverbial big picture.

Are we, as a society making an effort to ease poverty?

The figures seem to say yes.  At the beginning of the new millennium we are spending close to one-tenth of our national income through governments on social security and welfare.  This compares with a figure of 5% in the early sixties and 7.5% in the early '80s.  Given that real national income has doubled in the last 20 years, it means that real welfare spending almost tripled in that time.

Then there are tax concessions -- about two thirds of the $19 billion in annual tax expenditures are attributable to social security and welfare -- around 2% of GDP.

The flip side of this is that there is some pretty savage levelling down as well as up.  To pay for these income transfers we have one of the most progressive income tax systems in the world and, in this process, make the rich and the not so rich significantly poorer than they would otherwise be.

Nevertheless, Australians still manage to give to charity out of their net incomes.  There are a myriad of private charitable organisations.  These are supported by public and private donations, the latter worth about $3 billion annually at last count.  About half a million Australians work in the welfare sector, many of them unpaid.

None of this takes into account the additional one-eighth of national income we spend on other social programs -- education, health, housing and community amenities.

In all, this is a solid effort to help the poor directly.  It is nothing to be ashamed of.  Both the Australian public and, I suggest, Mr Abbot, are a long way from taking the Marie Antoinette line of "Let them eat cake" as alleged in Mr Beazley's simplistic sound bite yesterday.  We are working off a high baseline.

Are the numbers of the poor increasing?

Here the debate takes off in all directions.  Commentators of different political persuasions deploy aggregate statistics or upwardly mobile poverty lines or specific instances of hardship or simply what they think ought to happen.

The fact seems to be that neither relative nor absolute poverty has increased in the past two decades and that the poor, along with the rich, are getting better off.  Both have shared in a very long period of economic growth.  And it would be a very serious indictment of all the governments of the past 20 years if the massive and massively increased public spending on welfare had produced no net gain for the poor.

It is worth noting that this gain is despite adverse trends such as throwing many older males on the unemployment scrap heap, a huge increase in single supporting parents, more aged pensioners and a much bigger tertiary student population (who will go on to earn well above-average incomes for the rest of their lives).

Can poverty be eradicated?

Two thousand years ago, a famous welfare activist -- Jesus Christ -- said "The poor are always with us".  He combined this acceptance that the problem was enduring with an exhortation to extend charity to the poor and sick.

In some ways we have not moved on -- the poor are still with us.  In other ways we have -- to be poor in Australia in 2001 bears no relation to the same state in the year AD 1.

If Jesus agrees with Tony Abbot that we can't eliminate poverty, what can we do to reduce it?

If we want to do this we need a much more intelligent discussion than we are having or we will be stuck with the policies that have failed for 2000 years or more.

When welfare activists say that government can do much more for the poor it is fair to ask is that "much more" than the $70 billion we already spend.  If so, then we will need big tax increases to bring it about.  Politicians jumping on the Abbot-bashing bandwagon should come clean on this.

If they mean that we need to have more effective programs they are right.  After all, we have put enormous resources into programs and the poor are still there.  What we do now know with certainty is that simple income transfers don't lift people out of poverty, they may keep them there.  Some solid new proposals would help here, together with performance forecasts showing how many people would be lifted out of poverty.

This brings us back to Mr Abbot and a group of other disparate characters, including Jesus, who think that this is not a one-way street.

One of our most revered institutions, the Salvation Army, was built partly on the belief that poverty and alcohol were inextricably linked and that an individuals could "take the pledge" and assume control of their lives.  John Wesley preached the same message of self-reliance to the poor and it brought a better life for many.  Smoking Quit lines and Gamblers Anonymous know that the start of long term recovery is when the individual decides that he or she has a problem and determines to do something about it.

They need the programs but there has to be a personal commitment too.

More fundamentally, if you take away that personal power of choice, you rob the individual of an important element of their self-respect and hope.  And you rob society of the principle that we all need to contribute as well as take -- the widow's mite.  If you tell people that they are victims without any control over their fate then poverty programs will be self-perpetuating.  In a separate context, the (now politically incorrect) Noel Pearson has seen these dangers of long-term welfare reliance and the role of self-help.

In the end we all have choices.  The way we exercise those choices affects our lives, rich and poor.  We can all help ourselves and others.

Is it really "insensitive" (words of yesterday's SMH editorial) to suggest that individuals might have choices in their own lives?  Or is it patronising to suggest that they don't?


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