Remember when Labor was the party of work and welfare?

"There was a time when Labor’s aim for the poor and disadvantaged was to end poverty and disadvantage", writes John Quiggin. "Now the best they can hope for is ‘extending opportunity‘."

Under John Curtin and Ben Chifley, Labor was the party of work and welfare. The party stood for both full employment and social security.

Attitudes to poverty had changed in the wake of the Great Depression and both parties saw a need to take action. In 1941 the Menzies government established a cross party Parliamentary Joint Committee on Social Security. The committee’s first interim report declared:

For long it was held that poverty was the fault of the individual and was solely due to inefficiency, improvidence, dishonesty, drunkenness and the like. More modern opinion is that poverty is mostly not the fault of the individual but the environment in which he lives. Social services were developed largely because of the conviction that it is misfortune, not inherent evil, which brings people into want, and therefore it is the duty of the community to mitigate the worst effects of that want.

As always, the responsibility of the community was balanced by the responsibility of the individual: "to contribute to the community welfare to the utmost of his physical and mental capacity."

After Labor won office later in 1941 the committee continued its work. And in 1943 Minister for Post-war Reconstruction, Ben Chifley wrote:

I believe that the time has already passed in Australia when the principle of comprehensive social security has to be advocated or defended. The valuable reports of the all-party Parliamentary Joint Committee on Social Security acknowledge the community’s responsibility for guaranteeing in all emergencies – whether sickness, unemployment, incapacity, widowhood, or old age – a national minimum of income below which none of our citizens can be allowed to sink (SMH, Wednesday 1 December 1943).

Chifley argued that the national minimum should rise over time as the economy grew. By 1945 Labor had added new payments for sickness, unemployment and widowhood to existing schemes for age and invalidity.

But the centrepiece of Labor’s post-war welfare system was its pledge to maintain full employment. For Chifley social security was a palliative measure that would become less necessary as government mastery of the economy increased incomes and made full employment sustainable. According to the government’s 1945 white paper Full Employment in Australia: "The maintenance of conditions which will make full employment possible is an obligation owed to the people of Australia by Commonwealth and State governments."

Labor’s post-war work and welfare policies embodied a kind of mutual obligation. Governments had an obligation to maintain full employment and protect workers from the misfortunes of unemployment, sickness and invalidity. And in return, citizens had an obligation search for and accept paid work.

But in recent years this vision of mutual obligation has collapsed. By 1975 the Whitlam Labor government was overwhelmed by the problem of inflation. Governments lost faith in the idea that they could maintain full employment. Then in the 1980s policy makers became convinced that unemployment had structural causes. The Social Security Review introduced the idea of ‘reciprocal obligation’. Unemployed workers would need to retrain in order to become employable. So in return for government funding for active labour market programs, the unemployed had an obligation to participate. Being willing to work for wages is no longer enough.

In today’s Australia, it’s difficult to know what full employment means. Many policy makers believe that we are close to the Non Accelerating Inflation Rate of Unemployment (NAIRU). This suggests that welfare numbers can’t be driven down simply by stimulating the economy. So over time, obligations have shifted from government to the individual. And the idea that "poverty was the fault of the individual and was solely due to inefficiency, improvidence, dishonesty, drunkenness and the like" is making a return.

Quiggin is becoming increasingly disillusioned by the current Labor government. In a post on Gillard’s Whitlam Oration he accuses her of repudiating Labor traditions and embracing the rhetoric of the Liberal party:

Nothing in Gillard’s speech suggests any awareness that there are Australians who cannot provide for themselves, or any desire to do anything for them. Quite the contrary. The theme of “those who do not work, neither shall they eat” is stated repeatedly, for example with reference to being the “party of work not welfare”.

According to Quiggin: "Any positive thinking about Australia’s future will have to come from outside the Labor party."

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Senexx
10 years ago

In the grand scheme of things I’m nobody but I endorse this post.

Australia, like many other countries, had trouble coming to grips with the end of the Bretton Woods System which gave rise to the mythical monetarist NAIRU which is constantly redefined & gave rise to the Accord, amongst other things.

Remember up until then Full Employment was roughly considered to be ~2% with little to no underemployment.

I haven’t fleshed out thought any further than this following statement, but in some respects we may still be fighting that battle – the end of BW.

Ken Parish
Ken Parish
10 years ago

“Labor’s post-war work and welfare policies embodied a kind of mutual obligation. … But in recent years this vision of mutual obligation has collapsed. … Unemployed workers would need to retrain in order to become employable. So in return for government funding for active labour market programs, the unemployed had an obligation to participate. Being willing to work for wages is no longer enough.”

Don, I’m not quite sure what you’re getting at here. It seems to me that requiring unemployed workers actively to retrain rather than just be willing to seek and obtain work of the kind they were originally trained to do on leaving school is merely the evolution of traditional mutual obligation (going right back to the Webbs) to take account of a rapidly changing economy where everyone needs to be willing to adapt to changing circumstances e.g. post-industrial service-based economy where secondary industry has largely relocated to emerging countries like China etc which enjoy comparative advantage. Workers must be not only willing to work but willing to equip themselves to continue to work in jobs the community needs to have done. That this remains part of a mutual obligation-based social compact is demonstrated by the fact that retraining occurs to a large extent at public expense.

Would you argue that a worker who trained as (say) a fitter and turner at 18 but who lost his job at 30 because the industries in his region that employed fitters and turners have moved offshore should be entitled thereafter to remain idle for the rest of his working life and be supported by the community without any obligation to retrain? Why?

wizofaus
wizofaus
10 years ago

At 30 it’s not much a quandary surely – there’s plenty of time to retrain in a different career (and sufficient income support should definitely be made available to ensure that this training can be completely quickly). If you said “at 55”, I’d say, yes, it’s not unreasonable that sufficient income is guaranteed by taxpayers that they don’t have to suffer the sort of hardship they would currently under NewStart. Ideally they should be able to supplement this income with additional work, which would imply setting a tax-free threshold only on the non-benefits part of the income – not sure how workable that would be, but at least it would give such people a reasonable opportunity at sustaining (and potentially improving) their standard of living despite circumstances out of their control being against them.

Craig
Craig
10 years ago

Any man who wants to work should be given a job for surely it is beter that he do something of even little value than sit at home and suffer idleness.

All this talk of economic inevitability, efficiency and “natural” unemployment is doctrinal rubbish that lacks imagination, memory and humanity.

Russell
Russell
10 years ago

“The real ruptures came with work for the dole …..

I think the ideological rot started in the Hawke/Keating era: Keating’s great ambition seemed to be reduce taxes on the wealthy; John Howard then made it the sine qua non of electoral success.

So the Rudd government followed along – tax cuts, at the same time our unemployment benefit is little more than the bus fare to job interviews. Is that the policy of a social democratic party?

I think Keating and Hawke were genuinely besotted with powerful, wealthy men. Remember who popularised the term ‘losers’? The ALP became so impressed with how some people managed to become wealthy, they concentrated with helping the talented to achieve success, and forgot about the less fortunate. Losers.

It wasn’t just the ALP, or even just Australia. It was the times, and the move to voodoo economics had been well prepared. Only the ALP, as a community-based party of the centre-left, should have known better than to so enthusiastically have jumped aboard the neoliberal bandwagon (or, in Gillard’s case, ute.)

Patrick
Patrick
10 years ago

If the neoliberal bandwagon you wish the ALP hadn’t jumped on is the one that included floating the dollar and privatising CBA and establishing the RBA’s independence, well, I for one wish they would jump back on it…

Russell
Russell
10 years ago

Not those particular things, I was thinking of the ideology of reducing the taxes on wealth, and so having less to spend on government projects, and instead letting markets solve all your problems.

Of course the ALP didn’t do that completely, as the forementioned labour programs prove. But it seemed that they thought it more important to keep trying to make markets solve problems, rather than directly intervening to manage solutions to problems the market wasn’t solving; and especially to reduce any interference with the rich making more and more money. Did they think that if there were more and more money in the system it would somehow trickle down to the unemployed?

Pedro
Pedro
10 years ago

“As always, the responsibility of the community was balanced by the responsibility of the individual: “to contribute to the community welfare to the utmost of his physical and mental capacity.””

Crikey.

“But it seemed that they thought it more important to keep trying to make markets solve problems, rather than directly intervening to manage solutions to problems the market wasn’t solving.”

I wonder which problems the market failed to solve? What’s the current unemployment rate and what was it when market forces were expanded a reasonable way into the labour market?

Craig
Craig
10 years ago

Pedro: What does The Market say about underemployment and when does it plan on solving this little under-reported doozy?

murph the surf.
murph the surf.
10 years ago

The beauty of The Market is that it’s invisible.
You just have to really want to see it( or in this case do something ) and presto! It’s there.

observa
observa
10 years ago

“The beauty of The Market is that it’s invisible.” Well not exactly but it sure beats the dead hand of bureaucratic controls like here typically-
http://www.adelaidenow.com.au/government-charges-employed-teens-to-stay-at-home/story-e6frea6u-1226089328301
Essentially the problem with public housing is there’s never enough of it at the going rate and what there is, is rationed by bureacrats needing the wisdom of Jove when all it needs is a secondary market to squeeze more out of scarce taxpayer dollars, just like the latter’s take home dollars do in the open marketplace. With bum on seat entitlement and not being able to move tenants for changed circumstances politically(eg lone widow in a 3br house after the kids have left home,etc)the stock of housing is poorly allocated and the bad tenant maintenace system persists. As well good tenants have to put up with bad neighbours and hence the social ghetto outcomes.

The solution as always is- It’s the constitution of the marketplace stoopids! What it needs is a secondary market like the open marketplace for the allocation of housing. Basically the available stock is up for auction over the medium to longer term by qualifying tenants with their real dollars and any ‘SAHT dollars’ earned by good tenant behaviour just like fly-buys. Abuse them and lose them and you’ll only afford the bottom end of the stock. Don’t drink, smoke, gamble your real dollars away and look after the joint and get the kids to chip in and you’ll be able to afford the best in the best burbs. Clearly mum and kids can outbid single elderly pensioners for the 3br house, etc. What’s more noone will mind income poor but values rich public housing tenants in their leafier burbs, unlike the rationed system now. In fact the whole sector could be turned over to the private RE sector now with appropriate checks and balances.

Smart leftism always recognises the perpetual failure of graduazzi producer groups cf the power of well constituted specific marketplaces to produce good individual and societal outcomes, with scarce community funding. That appreciation is sorely lacking in Canberra at present with ‘more evil empire is best’ syndrome and the working families know it.

observa
observa
10 years ago

“What does The Market say about underemployment and when does it plan on solving this little under-reported doozy?”
Try comment 8 here Craig-
http://clubtroppo.lateraleconomics.com.au/2011/07/04/aboriginal-heroes-and-adaptation/#comments
It’s always the constitution of the marketplace stoopids unless you believe $90 mill for 408 public servants and growing in the shiny new Dept of Climate Change, not to mention a scattergun, bureaucratic nightmare CO2 tax that will cost Treasury $4bill to gather, is the way to fix that. As for making the BIG POLLUTERS pay and no birthday cakes will be transported in fuel taxed light commercials under any Govt I lead, good luck to all the red-heads wearing out the shoe-leather in the Boeings selling that to their pet working families. Is there anyone left in Australia still game to admit they actually voted twice for this mob? (Abbott’s mob don’t get the market green environment bit by the way but then they don’t have to at present, they just have to stand there and keep breathing)

Paul Frijters
Paul Frijters
10 years ago

aspirational voting again. Rudd tried last year to resurrect the idea that luck might be involved in the division of the nation’s spoils, and got nowhere. People will not vote for the party of losers, not even the losers themselves for they do not want to hear they are the losers. It is the mental desertion of the bottom by the bottom that is the cause, the rest is the consequence of that desertion.

derrida derider
derrida derider
10 years ago

geez, Paul – now you’re even blaming the poor for other’s attitudes towards them. Not that you don’t have a point but –

In every cry of every man,
In every infant’s cry of fear,
In every voice, in every ban,
The mind-forged manacles I hear

If the nation’s “losers” broke those manacles by getting angry at the “winners” then we might see some changes.