Beneficial Direction of the Welfare State from the Perspective of Poverty Removal in Australia - Coursework Example

A fundamental justification for the welfare forwarded by its advocates (usually those believing in the tenets of democratic socialism) is in the extension of the social right to freedom from poverty for the members in society. Alternatively put, one of the central arguments that validation of the welfare state regime depends upon is ensuring at least a minimum level of living conditions for all members of the society (Goodin et al. 1999). It is thus contented by the advocates that a welfare state regime reduces poverty and ascertains better livelihood for the weaker sections of society. However according to liberal perspectives, due to the increase in state interventionist policies the manoeuvrability of the free market is increasingly constrained and the associated efficiency benefits that enhance productivity and growth may be hindered. Further, the sustenance of the administrative machinery necessary for that is not cost effective and the heavy taxation involved deprives the members of society from the civil rights to liberty. Thus critics of the welfare state regime argue that it may actually lead to increased poverty over time due to inhibited growth of productivity as well as output and employment over the long run. In case of Australia, the present welfare state regime has been debated and a number of changes particularly those focusing upon its tax structures have been suggested all the while keeping reduction of mounting inequalities as the primal objective. The present essay will attempt to analyse information about Australian history to comment upon the desirability and the possibly beneficial direction of the welfare state from the perspective of poverty removal in the nation. Essentially, the debate boils down to one of ideological differences between the liberals who strive for minimalistic state and non-liberals who argue against liberalist principles citing them to be not only aggravating but also engendering poverty. As will be shown, though the history of poverty in Australia justifies active state intervention in protection social rights, the present manifestation of the regime is based on certain fundamentals that require revision in order to serve effectively for the purpose of poverty alleviation. The focus of the present essay shall be upon recent history though references to remote times shall also be brought up to shed light upon certain central arguments to finally elaborate upon the present regime and its validity to the extent of detail allowed by the scope of this brief essay. The tenets of liberalism see poverty as an absolute notion and define it in terms of absolute subsistence focusing upon the bare minimum needs to survive and have the capacity to work. Thus minimal nutrition and some bare minimum shelter qualifying as housing are enough to identify an individual as not in poverty. Poverty, according to the liberals, arises primarily from individual inabilities and lack of capacities or due to unemployment which is in turn created due to distortions like wages set at greater than market clearing levels or unemployment benefits provision that constrain the functioning of the free market forces in the labour market generated due state interventions. The notion of individual inadequacy has also led to the liberal notion of distinguishing between the deserving and the undeserving among the poor in respect to personal aristocratic philanthropy or charity. The fundamental principal that drove the pursuit of this distinction in Australia was to morally reform the released convicts into hard-working individuals in 19th century Australia. State governed benefit provisions fail to maintain this benchmark and in the process motivate idleness and apathy to work to earn. This according to liberalists has contributed significantly in the growth of poverty. However, the 1890s economic depression threw a strong challenge to this school of thought and led to the development of alternative perspectives. During this period the poverty levels rose to heights that warranted state intervention. Further, it became obvious that such mass economic distress could not have been caused by idleness or distorted labour markets (Jackson, 1977) and were related to capitalist development trajectories and reflected the failures of liberal notions of philanthropy based on distinguishing between the worthy and unworthy. The liberal interpretations of poverty are criticised by the advocates of the welfare state. These views define poverty relatively in terms of the visible differences compared to the affluent and it is pointed out that the liberal notion of poverty being addressed in absolute terms by definition leads to social exclusion. Even though a group of people who are able to earn subsistence and thus are not poor in terms of the liberal definition shall exhibit outlying trends compared to the access to resources and decent livelihood of the rest of the community. Given that it is social norms that engender individual needs, such people shall always remain relatively poor as long as the differences persist. The present Australian regime exhibits certain inequality related trends that have generated comprehensive concerns which interestingly mimic the concerns regarding social welfare which surfaced and were addressed during the initial colonial state regime. Australia is unique in the class of welfare states particularly due to its very special history of being a very important colony with heavy government interventions progressing gradually through state led policies. Though the private sector blossomed gradually, the role of the state was always very crucial in the development of the economy. One of the most interesting aspects about the development of the Australian welfare state has been the predominant role of the public sector in activities that are generally observed to be performed by private entrepreneurs in other nations (Jackson, 1997). For instance the state1 was one of the major participants in the financial capital market of London to finance a large number of infrastructure development projects. Private entrepreneurs were often discouraged from active participation until quite some time. The objective was primarily to develop a social safety net that ably assisted the settlers. The system that evolved was thus coined as a regime of “colonial socialism” (Butlin, 1959). However, authors like Cochrane (1980) opine differently. Albeit accepting the high magnitude of state’s involvement, they argue that the role of the state was to serve as an agent for capitalist interests of the British as Australia was a heavily dependent nation at that point of time. However, the trajectory of the welfare state regime has been such that presently the inequality stands broadened for a significant portion of the society and the present day concerns for the poor are very similar to those surfaced during the initial years of the regime and were essentially a poising of liberal versus anti-liberal pro-state ideologies. During the terminal years of the nineteenth century it had become quite clear that the ‘charity approach’ to poverty elimination was not moving the state towards its adopted goals in terms of poverty reduction. The idea behind this approach was to motivate the socially better off to contribute to the poor to eliminate poverty. However as mentioned, this strategy failed miserably as observed in the aforementioned depression of late 19th century and it was realized that a stronger role of the state was necessary. Earlier, the direction of living conditions for the poor followed liberal definitions by “poor laws”, in the sixteenth century Great Britain and essentially was focused upon making the poor work in order to make them worthy of assistance. The notion of deservingness determined by whether individuals who were able worked or not was significant. Idleness was harshly treated and only those who proved themselves to deserve by participating in the labour markets were assisted. The fundamental paradox of promoting inequality through discriminatory assistance was either not recognized or ignored. Further, the laws were revised soon after it was argued that such provision of assistance was belying the principles of self-help and making workers less productive and increasingly dependent upon state provided assistance. The revised law was based on the principle that lives of those dependent on charity had to be made evidently worse compared to worker earning the most meagre wage so that the dependents would rather opt to participate in the labour market (Trattner, 1984 in Williams and McMahon, 2000). Though these were not directly applicable to the Australian colony, the ideals of self-reliance and hard work were the prime determinants to the deservingness of aid. However, the failure of the charity schemes to eradicate poverty did facilitate the perception that poverty was possibly an effect of failed capitalist trajectories rather than personal failures of the poor thereby creating the scope of poverty removal centric social welfare policies. Though the revised mind sets did ease conditions for the poor, the provision of benefits was still discriminatory in the sense that deservingness still was an important determinant, though it’s fundamental form altered in terms of perceptions. The hierarchy in terms of preference was evident with the highest contributors to capital creation enjoying the most beneficial supports and thus the top most position. The present day regime is essentially an extension of the one just mentioned where the social benefits still do not permeate equally to all tiers. (Williams and McMahon, 2000) Stannage, (1976) also has pointed out to the inadequacy in addressing poverty in historical accounts stemming from failure to recognize the various manifestations and resultant adversities and advised utilisation of previously unnoticed sources of information such as rate books, charitable institution records, court records etc to ably unearth the true implications. The sublime benchmark notion of deservingness has led to increasingly difficult conditions for the poor in general and the unemployed particularly. Therefore, we find the structure of benefit provision to be regressive in nature. Over the period of 1972-73 to 1996 poverty rates have worsened for households classified as unemployed, sick/invalid, new migrants as well as single male parent families with the magnitude being maximum for the unemployed (52 percentage points) (ACOSS, 1999 in Williams and McMahon, 2000). Poverty rates have however fallen for most other types such as single female parent families, Aged couples and individuals etc. Therefore, the discriminatory distribution of benefits has in fact belied the principal justification for existence of the welfare state regime itself. Thus, from the discussion above we find that the Australian welfare state has been unable to provide benefits adequate to offset the inequalities particularly due to the underlying principle of deservingness determining the extent of benefits received. It is pertinent to note that the notion of deservingness exists in a form that is hindering the poverty reduction objectives significantly. In spite of realizing that poverty is more due to the asymmetries embedded in the social fabric due to unbalanced growth and capitalist development trajectories the deserving are identified to be those not without jobs, migrants from preferred zones such as the UK, retired soldiers and capitalists. This is the central feature of the Australian Welfare state and its poverty that is unique. The fundamental principle driving welfare policies have to be revised and it has to be reoriented to support the weaker sections of society more in order to effectively address the problem of absolute poverty. References: Butlin, N.G., (1959) “Colonial Socialism in Australia, 1860 – 1900” in Aitken, H.G.J., (eds) The state and Economic Growth, New York: Science Research Council – pp. 26-27, 37-44 Goodin, R.E., Bruce Headey, Ruud Muffels, and Henk-Jan Dirven (1999) The Real Worlds of Welfare Capitalism. New York: Cambridge University Press Jackson, R.V., (1997) “An outline of Australian economic development to 1900” Australian Economic Development in the Nineteenth Century, Canberra: Australian National University Press, pp 8-27 Stannage, C.T. (1994) Uncovering Poverty in Australian History, New Norcia Studies, 2: June, pp 143-162 Williams, C & McMahon, A., (2000) “Back to the future: Deserving and Undeserving in the welfare state” in McMahon, A, Thomson, J, and Williams, C (ads) (2nd ed) Understanding the Australian Welfare State: Key Documents and Themes, Croydon, Vic: Eastern House, pp. 163-171 Read More