Australian welfare warning
Australia may be on a perilous slide towards poverty and would do well to heed the example of the Netherlands, an ANU social scientist believes. A study by Professor Robert Goodin in the Philosophy Program at RSSS has found that a "Robin Hood" approach to social welfare provides most benefit to rich and poor. Comparing data from three countries representing the main welfare systems - liberal, corporatist and social-democratic - Prof Goodin and colleagues found the Netherlands' system was fairest while still matching the others economically. Each system valued and excelled at different things, Prof Goodin said. "The liberal US system values economic growth and efficiency. Welfare is means tested, people are discouraged from taking welfare and expected to look after themselves. "The German corporatist system has a conservative foundation and values income stability. Welfare payments are closely linked to previous earnings and aim to preserve the status quo - those who earn more, receive more. "The Netherlands has a social-democratic system or redistributive welfare system which takes from the rich and gives to the poor." Prof Goodwin said the liberal system was a "band-aid" approach "shockingly worse than the others". "There is three times more poverty in the US than the Netherlands. People are in poverty for longer and there is significantly more inequality. Virtually nobody is under the poverty line for more than 10 years in the Netherlands," Prof Goodin said. "The social-democratic system in the Netherlands outperforms the other two systems in eradicating poverty and inequality, and providing income stability." Australia - which has a liberal, US-style welfare system - rates low on an OECD comparison of welfare spending for the poor. However Prof Goodin believes Australia has been sheltered from the negative side- effects of this by high employment and a guaranteed living wage. "These are breaking down on both fronts as unemployment increases and wages decrease. The things that made Australia an exception are disappearing," he said. Prof Goodin is concerned Australia may become like America, where a quarter of the population is on welfare at least once over 10 years. While he recognises that it may be politically impossible to introduce a social-democratic system, he believes a return to a corporatist welfare system is possible. "A move to corporatism would alleviate some of the problems inherent in a liberal system. It would be a reassuringly conservative move which has historical precedent. At the same time it would reduce income instability and inequality." Julian Lee