Peter Saunders (1)

Australia’s Welfare Habit (2004) by Peter Saunders is a fascinating book by one of the rarest of things, a sociologist who is not left wing.

Saunders looks at what has happened to Australian welfare, how it compares to welfare in other countries and goes on to make recommendations as to what he thinks should be done. The first two things are done better than the last. Welfare is a really hard issue to discuss. Saunders points out that the welfare lobby, comprised of academics who study the issue and lobby groups are effective at blocking much change that they do not agree with. He also makes the point that welfare lobby is also fairly candid about wanting higher taxes.

In the book Saunders makes the huge point that Australia’s welfare spending and the proportion of people who are dependent has exploded. In 1969 just 2% of the working age population received unemployment, disability and the single parent allowance while in 2002 around 14% do. It’s a serious problem. The growth in unemployment is part of the issue as is the increase in single parents, but to see that disability pensions have more than doubled as a percentage of the workforce is really surprising. People do less physical work and are generally healthier than in 1969. Fewer smoke and we live longer.The increases have also occurred while society has gotten considerably richer, with the economy doubling in the period. Welfare continues to solidly rise. Under the Howard government, which many of the Left attempt to present as a hard right ‘neo-liberal’ regime social spending increasing from 40% to 44% of government spending.

Saunders look at Australian social spending and does point out that it is amongst the most efficient in the OECD with payments being directed towards those with the least money. This in turn has the effect of creating enormously high Effective Marginal Tax Rates ( EMTR s ) that provide a dis-incentive for people on welfare to find work. He also points out that Australian social security spending is different from most countries social spending because the money comes out of general revenue and that our benefits are paid without end. Saunders looks at how the US 1996 welfare reforms had a considerable effect. The participation rate grew and people were able to find jobs.

The book is really, really interesting. I’d recommend it to anyone who is interested in social policy at all. Saunders solid presentation of clear data is excellent. Even if you disagree with Saunders his views are well worth reading. It’s also hard to imagine that people looking at balancing the Australian budget have not read his book. With much public support for some of the changes shown in polls, a centre left Australian government could easily implement some of his suggestions.… (mais)