Most Australians see the government as a vast public utility established to take care of us when we need it by providing a ‘safety net’ for the destitute. The logic is as follows: we’re a community, and it’s our responsibility to collectively provide for those who can’t provide for themselves.
There’s no doubt that it feels good to have people take care of us. When our girlfriends, wives, mothers, fathers or brothers buy us presents and show they care about us by hugging us and saying nice things, we feel a sense of connection to them.
Similarly, Australians feel protected when government sets up paternalistic agencies like the Department of Human Services (responsible for Medicare, Centrelink, Child Support, Disability Services and Hearing Services). The welfare state is a necessary function of government, according to its proponents, because it shows that we’re part of a community that cares about each other.
That’s the argument anyway.
There are a few problems with this fairytale story (which is taught almost without question in schools and universities throughout Australia).
First of all, caring and sharing is great – but only if you do it without hurting anyone else. If I steal $50 from my friend Peter and then use that $50 to pay Paul, I haven’t done anything commendable and don’t deserve to be treated like a saint. On the contrary, I’ve done a despicable thing. I’ve taken something that doesn’t belong to me. While it may be true that Paul needs the money more than Peter, that doesn’t in any way justify my actions, either legally or morally.
The problem with a welfare state is that it relies on theft to finance its operations. I am speaking of course, of taxation.
There are many people in Australia today who don’t like paying taxes. If they could avoid paying, they would. It’s easy to call these people selfish, but it’s actually more selfish to insist they pour their hard-earned money down a drain when it’s abundantly clear that governments don’t spend money wisely.
Recently, for example, the Australian government spent $11 million subsidizing The Wolverine. I think movies are great too, but does egalitarianism demand governments fund them?
Governments as a rule of thumb tend not to care if they obtain the best value because they’re spending your money, not their own. Indeed, if states ran more efficiently, they would probably only need a fraction of what is spent now.
Besides, welfare states have deviated far from the purpose of taking care of the least fortunate among us. Welfare now helps everyone – from the rich (who receive corporate welfare), to the middle-class, to the poor.
The main problem with Australia's public health insurance scheme, for instance, is that it’s not means tested. This simple fact is in large part responsible for out of control costs increases. Providing below-cost medical care to those earning enough to be in the upper tax brackets, while politically palatable, isn’t really what assisting the least fortunate is about.
The alternative to this blanket ‘freebies for everyone’ policy isn’t to shift towards a means-tested system; rather, the alternative is to abolish the welfare state altogether. The welfare state insidiously corrupts the moral fabric of society, encouraging sloth, dependence and an entitlement mentality that justifies trampling over private property rights and sanctioning theft. Moreover, welfare is used as a political tool to buy votes, to the detriment of the public interest in low taxes and balanced budgets.
Each of the assertions made in this article will elicit consternation from those currently on benefits and those who have been taught that eliminating the welfare state would result in the poor crawling on the street digging for worms for sustenance. And certainly, I don’t expect anything to change in the next 50 years since a sizable majority of public opinion supports massive government intervention in every aspect of our lives.
Yet we only need to go back to the first decade of Australia’s federation, between 1901 and 1911, to see how a society without a welfare state could work. In his book Australia’s Welfare Habit and How to Kick It, Peter Saunders writes of the friendly societies that used to provide unemployment insurance. It’s likely that eliminating government welfare would see the rise of voluntarily funded (as opposed to coercively acquired taxpayer funded) civil society organizations to fill the gap.
We could also help people find gainful employment by abolishing the minimum wage, which most economists say discourages hiring by pushing up the cost of labour. What this means is that it’s often better to allow someone to work at $10 an hour and get valuable experience that can be useful later, then to price them out of the labour market altogether.
In addition, eliminating a plethora of taxes would undoubtedly stimulate business investment and create jobs. The objective is to make it easier for entrepreneurs to start businesses and hire workers.
There will always be people who are at risk of falling through the cracks, and in particular the disabled, the elderly and young children without parents. It's for these individuals that charity should be reserved.
What we don’t need however, is to encourage a culture of welfare by providing Centrelink payments that come with very few strings attached to hundreds of thousands of able-bodied people.
Mere articles don’t bring about change. But crises, and especially the bankruptcy of Western nations stretched thin by their social security systems, do bring about change. At some point the endless demands of the welfare lobby will force governments to consider the idea of living within their means. A budget deficit, as in the United States and as we currently have in Australia, can often spur otherwise complacent voters.
Perhaps then the notion of self-reliance will be popular again.