A decent society is one whose institutions do not humiliate people – Avishai Margalit
The Great Depression stripped many Australian workers of their dignity. For many, applying for government relief was like begging for charity. Instead of giving unemployed workers cash, state governments doled out relief through tickets that could be redeemed for food. The recipient would then present their ticket to the milkman, the baker, the butcher and the grocer and recieve their rations. Often they would have to work for this ‘dole’. To get any kind of relief, applicants had to show that they had exhausted all their resources and were incapable of supporting themselves or their families. Many found this means test humiliating.
In the wake of the depression it was harder for people to believe that unemployment was always the result of laziness or personal inadequacy. To many Australian, it no longer seemed decent to humiliate unemployed workers as a way of deterring idleness and dependency. When legislation to create unemployment benefits came before the House of Representatives, Labor MP Thomas Willams declared that the scheme: "will go a long way towards ensuring that the precious children of this vast and undeveloped continent will never suffer the shame and degradation which seared the souls of the children of this country during the depression" (p 2353 pdf).
But while the major political parties agreed that Australia needed a modern social security system, they could not agree about how it would work. The Labor government wanted unemployment benefits to be funded out of tax revenue. But Robert Menzies wanted an insurance scheme funded out of contributions. He argued:
… contribution preserves self-respect; it enables social security schemes to be kept solvent; and it dispenses with the humiliation that is involved in a means test. Humiliation is involved in such a test. The moment we establish, or perpetuate, the principle that the citizen, in order to get something he needs, or wants, and to which he has looked forward, must prove his poverty, we convert him into a suppliant to the State for benevolence. That position is inconsistent with the proper dignity of the citizen in a democratic country. People should be able to obtain these benefits as a matter of right, with no more loss of their own standards of self-respect than would be involved in collecting from an insurance company the proceeds of an endowment policy on which they have been paying premiums for years (p 2263 pdf).
Menzies argued that a insurance system based on worker contributions was "an approach of virility and self-reliance and that Labor’s scheme based on "non-contributory benevolence" would pauperize people (p 2264). Another UAP MP, Rupert Ryan, argued that "People who contribute personally to these funds must develop a sense of responsibility, and they must also have a sense of entitlement which is necessarily missing in relation to funds established on a dole or charity basis" (p 2375 pdf).
Of course there was another reason conservatives opposed a non-contributory scheme — it redistributed income. As Mr Ryan explained "The steep graduations of tax impose excessive burdens on all classes of the people, but particularly on the high and middle income groups."
This debate between contributory and non-contributory schemes of social security is almost forgotten now. Few politicians talk about humiliation and shame. Instead we seem to be falling backwards into to the kinds of policies Australia had before the war — income management, punitive work for the dole and the deliberate shaming of unpopular groups like the young unemployed.