The Abbott government is cutting and freezing a host of benefits. The age of entitlement is over, apparently. They need to go further. They need to axe them completely, slash the welfare bureaucracies, close down Centrelink, and give students, the old and the poor back their dignity.
The idea for an alternative has been around since the sixties; one version was even thought up by the Right’s favourite economist, Milton Friedman; it has been trialled at least twice around the world, and been shown to work; even the Swiss are toying with the idea.
Welfare, as we currently practice it, is a mess. It’s inadequate, and under this government, it’s getting worse. It is complex, difficult and expensive to administer. It’s deliberately designed to be vindictive, punitive, intrusive, demeaning and degrading, even though the vast majority need it through no fault of their own. And it’s riddled with inconsistencies and unfairnesses. Stop tinkering and abolish it.
The following is from the US, but the arguments are the same:
We have to have regulators making sure the recipients aren’t on drugs, administering expensive drug screening. Instead of cash we administer a food stamp program to make sure recipients don’t buy the wrong things. . . What if the money spent on that bureaucracy was directly applied to people in poverty? How much abuse would we really see if we simply trusted the people in poverty and offered direct cash transfers with no strings attached?
The alternative? Pay every citizen of working age a guaranteed minimum income, replacing all existing government benefits and pensions. Centrelink (and a whole host of other overlapping agencies administering the plethora of benefits), with all the concomitant spying, intrusion and means testing disappear, because they are no longer be necessary.
Milton Friedman talks about his version of the idea – a negative income tax – here:
If you want more information on other similar proposals, and the arguments for and against, you need only google “guaranteed basic (or minimum) income”. For example: a keen advocate of a guaranteed annual income, Canadian Senator Hugh Segal, explains why they – and we – need a new national approach to tackling poverty. It’s long, but well worth a watch.
You think it won’t work? That people will abuse it? There have been numerous trial programs around the world, and all have been judged successful. Levels of abuse and failure were minimal. There’s a lengthy article, again from Canada, here.
The idea of a guaranteed annual income has been tested before in Canada – in the mid-1970s, in Dauphin, Man., a farming town with then about 10,000 residents.
In the only experiment of its kind in North America, every household in Dauphin was given access to a guaranteed annual budget, subject to their income level. For a family of five, payments equalled about $18,000 a year in today’s dollars.
Politicians primarily wanted to see if people would stop working. While the project was pre-empted by a change in government, a second look by researchers has found that there was only a slight decline in work – mostly among mothers, who chose to stay home with their children, and teenaged boys, who stayed in school longer.
Evelyn Forget, a researcher in medicine at the University of Manitoba, reports that Dauphin also experienced a 10-per-cent drop in hospital admissions and fewer doctor visits, especially for mental-health issues.”
The article goes on to discuss other programs around the world. Of course, they don’t come cheap, and Australia would need to have a major conversation about the level to be paid, and exactly how to pay for it. But on the strength of what has been demonstrated so far, a few points are clear:
- Most poor people, given this kind of non-judgemental help, do improve their lives
- Most don’t waste the money on drugs and drink: those that do, would do so whatever kind of dole they were on
- It cuts crime and prostitution, because people are no longer forced to desperate measures to survive, thereby cutting the costs of policing and prisons
- It empowers people to lift themselves out of poverty, increasing their confidence and ability to re-enter the job market.
- It reduces the demand on health services, because people are far less stressed and far better able to feed, clothe and house themselves properly
- It cuts depression and suicide, because people are no longer driven to despair
There is more. I encourage you to investigate for yourselves. It makes sense, in a counterintuitive fashion. And it is affordable in a rich nation such as Australia.
To those who say it would only encourage an underclass of idle bludgers, I would point out that we have that already, and treating them even more toughly will only drive more of them either to despair and suicide, or into crime and prostitution.
If you want to take a cynical view, a potential burglar who has enough to live on, plus his beer and smokes, is not going to be out stealing your car or breaking into your house. It’d be too much bother. He’s a lazy bugger who doesn’t want to work, remember?
My view is simple. Much of the misery associated with being on welfare is not due to being out of work. It is due to the additional stress we pile on people who are already devastated by redundancy, age, sickness, lack of education . . . take your pick. In all compassion, we should take that away if we really want people to flourish and grow.
Above all, trust people. As in the rest of life, a few will let you down. But the vast majority will repay trust with trust and generosity with gratitude. Stop being so mean and suspicious, and take the risk. It’ll make you happier, too.
Businessmen are fond of telling me, “you have to spend a dollar to make a dollar.” If you really want to cut poverty, crime, healthcare and policing costs, Canberra bureaucracy and more, then you need to spend a dollar investing in the people at the bottom, instead of crushing them deeper into the abyss.
Trust. Generosity. Compassion. Three virtues strangely absent from the argument, and from our nominally Christian Prime Minister and government.