One is immigration broadly, a specific area of that is investment in education for immigrants, some improvements might be:
- mandatory/freely available remedial english classes;
- HECS-type loans for immigrants with no qualification period; or
- forgiveness of those loans or part thereof for work in the above English classes.

They are just top-of-my head examples and I am really not an expert there. But your vague and rather motherhoody statements look like leading where my previous comment suggested.

For example, take your specific comment that

We already do indirectly compensate people for being born into dysfunctional parents (or for any reason that they might not be capable of fully supporting themselves)

Wel, yes, but only in a manner which is besides the point. Your point is that not everything is the result of choices. Mine was that probably the biggest non-choice influence (as well as arguably the biggest influence on choices) is parents. Plato knew this, and dealt with it explicitly.

You seem reticent to come out and endorse either the idea that we should severly curtail or pre-empt the capacity of, essentially, poor people, to choose, or the idea that we should pay for the comfortable existence of people who choose to be indigent. Both are prett big ideas!

We already do indirectly compensate people for being born into dysfunctional parents (or for any reason that they might not be capable of fully supporting themselves). The question is whether we can afford to do it more generously or more effectively than we do now.

‘unfairness’ is just so vague - what is fairness? Birth into a good family? Should we compensate people for being born to dysfunctional parents? In my experience that is probably the single biggest factor in how people turn out, so someone with ambitions as broad as yours must, it seems to me, tackle that issue head-on.

I would imagine that if bad parents is unfair, and we continue to value equality, the ‘fairest’ outcome is found in Plato’s Republic!

BG: yes, I think on the broad points we agree.

While you say that you don’t have the expertise to know what should be done, the issues that Patrick, Ken and I raise are precisely those that need to be taken account of in the process of making policy decisions. If you just assume that most poor people are involuntarily in that situation and would be supporting themselves if only they could and go ahead and formulate your policy to make life easier for them, in no time at all you will find the welfare rolls populated with lots of people who are much less deserving of public sympathy and support. “No questions asked” welfare might well make life easier for the poor and downtrodden but it is also much easier to rip off than welfare that comes with strings attached and a certain degree of intrusion into personal lives.

NPOV - it really is pretty difficult to compare what we have with what is on offer in most Scandinavian countries, given that they decided long ago to go down a completely different track to the one Australia and New Zealand followed. However I think it is fair to say that, while the social insurance benefits offered by Scandinavian countries tend to look fairly generous compared with unemployment benefits here, life in their social assistance system (which is what you fall back into if you don’t qualify for social insurance) is probably considerably more ‘miserable’ than life on benefits here.

Those benefits are much more tightly income-tested than ours (typically withdrawn ‘dollar for dollar’ for earnings), there is an asset test that eventually requires you to sell your car and even your house if you want to continue to receive assistance and the whole thing is managed by social workers.

But the whole thing is underpinned by a much stronger social norms around labour force participation, particularly for mothers of young children, than we have in Australia.

I should note that I would support more investment in training - but I would not like to force people to do it nor to take up jobs. I would not like to compensate people for making the ‘wrong’ choice either, at least not any further than existing family benefits do.

people should be able to have what they want to have, within reason

, surely this discussion is all about what you mean by ‘within reason’. It seems to me that reasonableness is a very subjective test. Should people who could work but don’t really feel like it be entitled to sufficient income to provide them with their own definition of an adequate standard of living, for example?

Most of the countries that you appear to admire, like the Scandinavian countries, are much more rigorous than we are in making people seek work. In most, mothers are expected to return to work once their youngest child is a year old. I suspect that the main reason those countries have lower income inequality than we do is precisely this strong emphasis on labour force participation. I just don’t think you can allow people the degree of latitude in deciding their own level of labour force participation that our system does and expect to achieve levels of income inequality similar to those in countries where nearly everyone is expected to work to support themselves.

NPOV - to be fair, I think you should tell us exactly what you think Australian governments should do in order to improve things. I have pointed out some of the reasons why I think it is difficult to achieve much more improvement through income transfers, but I’d be interested to know what kinds of policy solutions you would favour.

I wish I did have that next installment ready to go. It’d be great to have a post that lays out all the policies we need to implement to fix the problem.

But if I had all the answers, I would have finished my PhD thesis years ago (that’s where most of this post comes from).

I’ve got a major in psychology, honours in philosophy and some post-grad political science. What I don’t have is the economic expertise to model how changes to benefit rates, minimum wages etc would affect economic outcomes.

If you’re waiting for me to write a policy manifesto you’ll be waiting a long time.

The FaCS research paper you quote was published in 2000 and must therefore have been relying on OECD cross-country analysis from the 1990s. Since then, the previous Government poured so much money into the social security system (particularly for families with children) that more recent comparisons show us doing even better relative to other countries.

In particular, the Australian combination of high minimum wage, which you alluded to, generous family benefits and methods of topping up people in low-paid employment through means-tested benefits mean that on the OECD’s analysis we are second only to the UK in the level of income (relative to the median) that we provide to households with one earner on the minimum wage. With the exception of single people without children, our out-of-work benefits also compare very favourably relative to all other countries in the analysis, including Scandinavian countries.

As for the comparative level of unemployment benefit/Newstart Allowance, this federal government research paper finds:

Because of differences in the role of employer social security contributions, it has been argued that replacement rates-which compare benefit levels to wage rates-do not provide consistent measures of benefit generosity across countries (Whiteford 1995). The preferred methodology in this study therefore was based on comparisons using absolute benefit levels adjusted by purchasing power parities.41 When benefit levels were averaged over all the household types noted,42 Australian benefit levels were ranked eighth before housing costs and sixth after housing costs. Australian benefit levels were well above the OECD average, being 29 per cent higher than the mean before housing costs and 39 per cent above the mean after housing costs. Overall, Australian benefit levels were very similar to those in Sweden and the Netherlands, with most of the countries with higher benefit levels-Switzerland, Norway, Luxembourg and Canada-having substantially higher levels of national income.

Just to pre-empt any nitpicking, in fact while Switzerland, Norway and Luxembourg certainly have higher national incomes per capita than Australia, Canada was only a shade higher on the most recent figures.

Anyway, the point is that Australian levels of both inequality and poverty are very respectable by any global standard. Whether we could actually achieve greater equality (or greater “well-being” for the poor without reducing income inequality, which seems to be the possibility Don is foreshadowing however coyly) without simultaneously effectively reducing incentives to work hard, take risks, be innovative etc thereby making all of us poorer in the process is another question. Somehow I doubt it, but I’ll await Don’s next instalment with interest.

Even ignoring that, is it a wild goose chase for the reasons outlined by myself and BG?

You can see that there are plenty of ways in which this chain of logic might come unstuck.

The ironic thing is that defining poverty in terms of deprivation is supposed to get us away from an unhealthy pre-occupation with trying to define poverty in terms of income, but as far as I can work out you always come back to income in the end.

So I would be ver leery of being embarked on an absurdly expensive wild goose chase trying to spend other peoples’ way out of bad choices.