Australia is a land of immigrants and a multicultural society with a strong sense of social justice. The notion of a ‘fair go’ for all is deeply embedded in Australian culture and has always been part of its national identity. Further, there has always been a strong relationship between social work and social welfare in Australia.
During the colonial settlement period, the colonial governments and private associations assisting people in need preferred a labor-related system wherein wage arbitration and the delivery of high-wage outcomes were the principal means of social protection.
Introduction of Social Welfare in Australia
The welfare system of Australia, devised since the federation, has evolved since 1901. The discussions surrounding the establishment of the Australian welfare state have revolved around finding a balance between the principles of fairness and equal opportunity, economic growth and advancement, and government-mandated social welfare safeguards.
Australian governments have swayed between a residual welfare model that favors the minimum cost of welfare delivery and a universal welfare model that aims to develop welfare as every citizen’s right. Globalization, neo-liberalism, and technological transformations have increasingly impacted this balance.
Given these structural trends, the Australian welfare system is compared with comparable social expenditure and welfare delivery in the Organization for Economic Co-operation and Development (OECD) countries. Prior to discussing the current changes to the Australian welfare system, it is important to examine the historical trends and understand the evolving nature of the welfare system. This will help establish a foundation for analyzing current welfare policies.
Timeline History of Social Welfare in Australia
1901 to 1930s: The Commonwealth of Australia was founded in 1901. One of the positive outcomes of establishing the Commonwealth of Australia was the implementation of fair wages that allowed a man to support his wife and three children, as illustrated by the Harvester Judgement in 1907. Moreover, the system of compulsory arbitration was set in place soon after the federation established the Commonwealth Court of Arbitration in 1907.
Australia adopted the English Poor Laws, which primarily favored individuals who were of Caucasian descent, male, and able-bodied. As an illustration, the 1908 Old Age Pension Act excluded certain individuals from receiving a pension, including Asiatic, Aboriginal, and Torres Strait Islanders, African people, the islanders of the Pacific or New Zealand, and the women married to them. Unsurprisingly, the Australian welfare state is often seen as prioritizing the needs of wage earners.
Wage-earners Welfare State
The “wage-earners welfare state” had two key elements:
- Work-related benefits
- Mixed Economy of Welfare
Wage-related Benefits
The wage-earners welfare state was built on four pillars:
- Arbitrated minimum employment conditions to protect workers.
- Selective inward migration is perceived as a means to avoid migrants who would accept lower than Australasian-standard wages and working conditions.
- Industry protection is the main economic incentive for employers to maintain labor conditions.
- A market-oriented, ‘residual’ state welfare system designed as a last-resort safety net for those (mainly males) whose living standards were not otherwise protected.
Due to the impact of the First and Second World Wars, women in the early 1900s had the chance to participate in various industries such as food, clothing, printing, and even the military. They also took part in voluntary organizations like the Australian Red Cross, the Country Women’s Association, and the Australian Women’s National League. Under the guidance of dedicated individuals, welfare services in Australia have become increasingly diverse.
1940
Shaped by the profound impact of the economic depression and World Wars, Australia took steps to establish a social security system in the 1940s. This marked a pivotal moment in the development of Australia’s national welfare. A number of welfare initiatives in the 1940s were proposed and advocated for by the Joint Parliamentary Committee on Social Security. This committee, established in 1941, consisted of members from various political parties in both houses of Parliament.
1941
1941 the Child Endowment Act (the Child Endowment) was issued, and children under sixteen in families with more than one child were entitled to an endowment. The Child Endowment was funded by the general revenue and supported by employers’ payroll tax. It provided a fixed-rate cash payment without any means-testing.
An important milestone was reached with the establishment of the Widow’s Pension. It followed the same structure as other Commonwealth Pensions and was funded by general revenue. Women who, through no fault of their own, have lost the support of their partners are eligible for the widow’s pension.
1942
Additional women who were eligible for the Widow’s Pension were those who had been abandoned by their husbands, divorced women, and women whose husbands were imprisoned or receiving treatment in a mental health facility. In 1943, a Widow’s Allowance was introduced, comparable to the 1942 Widow’s Pension, and was specifically provided to women who were the reliant wives of disabled pensioners.
1945
1945 witnessed the introduction of the Commonwealth unemployment and sickness benefits, which provided a fixed-rate payment for those who were unemployed or unable to work because of sickness. The payment was withdrawn from the Commonwealth government’s general revenue based on tight means tests. For example, the recipients were required to be available and willing to work and not have a history of joining strike actions.
One could make the case that the welfare initiatives in the 1940s primarily involved expanding the existing ‘white worker welfare’ model that was first introduced in the early 1900s. The Commonwealth government implemented a program to provide financial assistance to the dependents of workers, aiming to support both the workers and their families.
In addition to its commitment to ensuring full employment, the Commonwealth Government implemented the means test tool to encourage recipients of unemployment benefits to search for employment actively. The Commonwealth Employment Services was created to provide support to individuals seeking employment.
During the 1940s, there were strict rules in place for women who were seeking welfare benefits, requiring them to prove that they were not at fault and deserving of assistance. Despite the removal of racial barriers, Aboriginal and Torres Strait Islanders continued to face numerous restrictions when it came to accessing welfare support. As an illustration, in order to access welfare assistance, Aboriginal and Torres Strait Islanders were expected to conform to the expectations of mainstream society.
Overall, the 1940s witnessed the Australian national welfare system, financed from general revenue, with benefits based on means testing and achieving full. Along with constructing the national welfare system, in 1942, the Australian Commonwealth government gradually acquired the authority to levy income tax, shifting the power from the states.
It ensured its legislative power towards social security through a referendum in 1946 (Regan, 2014). Australia’s comprehensive social security system was built upon the national welfare initiatives of the 1940s.
1950 to 1960
During the 1950s and 1960s, Commonwealth Australia primarily concentrated on strengthening the welfare initiatives implemented in the 1940s. There were small changes that occurred over time;
- Extending child endowment to the first child in the family.
- Introducing free medical and hospital treatment for pensioners.
- Providing rent assistance for single pensioners and for married pensioners whose spouse was not a pensioner.
- Providing a higher pension rate for single pensioners.
- Extending the allowance for wives to all pensioners’ wives who did not qualify for a pension.
- The removal of the five-year residence qualification for widow’s pension and the elimination of means tests for age and invalid pension eligibility for individuals with permanent blindness.
The 1950s and 1960s were essentially periods of full employment, which probably explains much of the stability of welfare policy.
1969
In 1969, Australian women achieved a significant victory in their fight for gender equality by securing the right to equal pay with men. This milestone marked a significant moment in the global feminist movement.
1970
In the 1970s, Aboriginal and Torres Strait Islanders initiated various campaigns to fight for their rights in areas such as land, welfare, and health. These efforts resulted in significant victories, including the restoration of land rights and the attainment of equal opportunities under the law. It is worth mentioning that during that period, there were more equitable and inclusive welfare programs in place. As a result, women, migrants, individuals with disabilities, and those over the age of 70 experienced substantial advantages.
In the early 1970s, there was a growing awareness and concern regarding the causes and conditions of poverty, as well as the effectiveness and adequacy of the social security system in addressing poverty. Additionally, there were numerous inquiries and investigations into the effects of the social security system on work and saving incentives, as well as its exclusion of certain groups that faced considerable hardships. Because the economy was relatively healthy and strong at that time, many welfare initiatives were made in the early 1970s.
1972
The Labor Party, under the leadership of Gough Whitlam, successfully advocated for the government to embrace the principle of social democracy. This involved implementing policies to redistribute revenue through welfare payments and services, with the aim of providing support to vulnerable groups in society.
During the Whitlam years, there was a shift towards a universal welfare system that prioritized social security and a strong safety net, rather than a residual model that focused on minimal spending. The Whitlam government introduced several universal welfare programs that sought to benefit the community in general as well as alleviate particular inequalities.
A wife’s pension was provided to wives whose husbands were aged, invalid, or repatriated. This replaced the wife’s allowance and was more generous than that.
1973
The Supporting Mother’s Benefit was implemented to provide assistance to single parents who were not eligible for a widow’s pension (including single fathers in 1977).
1974
The Handicapped Child’s Allowance was established to provide parents of children with disabilities with a fixed-term payment, regardless of their income.
1975
Eliminating means-testing for individuals over the age of 70 to access a pension.
Medibank proposed constructing a national scheme of universal health insurance.
1976
The Family Allowance replaced the old child endowment and child tax rebates. It was funded through general revenue to offer a payment to the primary caregiver, benefiting parents with low incomes.
1977
The rates of pensions automatically increased following the Consumer Price Index changes.
During the late 1970s, economic stagnation led to a decrease in government intervention in the economic and welfare sectors of many Global North countries. They began placing their trust in the market to address social issues. Keynesianism declined in favor, while Milton Friedman’s neoliberalism gained widespread acceptance.
Neoliberal economists argue that the welfare state restrains the development of the market economy and the freedom of individuals. Individuals were considered rational beings capable of controlling most life circumstances. Therefore, a comprehensive welfare system is inefficient or even harmful to individuals achieving their values. This thinking became the cornerstone of the Australian government’s welfare policy in the late 1970s.
1980
In the 1980s, welfare increments were introduced, and several government actions were taken to reduce welfare interventions and tighten the means test or assessment for welfare recipients.
1983
A new income supplement for low-income working families with children. Providing a mobility allowance to individuals with disabilities to help support their transportation expenses for work and vocational training.
1984
A pension for caregivers of a spouse with disabilities.
1986 and 1988
The income and assets tests were successively introduced for family allowances.
1987
The widow’s pension for those without children in their care was abolished.
1988
A new assessment was introduced to evaluate the liabilities of non-resident parents in supporting their children, and a job, education, and training scheme was created to encourage lone parents to actively look for jobs.
1990 to 2000
Due to the economic recession in the early 1990s, Australia experienced a peak unemployment rate of 11 percent. As a result, the government implemented stricter regulations to manage the number of individuals receiving welfare benefits, with the aim of reducing welfare spending.
Despite the preference for a free market strategy during the Hawke/Keating government (1983 to 1996), efforts were made to safeguard a social security net rooted in the principle of social justice. On the other hand, the Howard Coalition government in Australia, elected in 1996 and re-elected in 1998, 2001, and 2004, had a strong belief in the market’s ability to drive social prosperity. As a result, they chose not to support universal welfare provision.
Despite the rising standards and stricter requirements for welfare recipients, the Howard government implemented stringent measures to limit the number of working-age individuals who could receive assistance. This included unemployed individuals, single parents, and those with disabilities.
The Howard government extensively utilized the concept of ‘mutual obligation’ when formulating welfare policies, requiring working-age welfare recipients to engage in specific work programs in exchange for government payments. This is evident in the Work for the Dole Act passed in 1998, which highlighted the obligations of individuals receiving unemployment benefits to enhance their skills by completing a specified number of approved activities and addressing personal weaknesses in order to secure employment.
In addition, there have been increases in penalties for not meeting activity testing requirements, and various measures have been implemented to encourage unemployed individuals to utilize their own resources before relying on public assistance. Given this context, working-age welfare recipients faced stigmatization for being perceived as idle and were derogatorily referred to as ‘dole bludgers.
Furthermore, during the 1990s, there was a noticeable shift towards governments outsourcing their welfare services. Nonprofit and for-profit organizations vied for shrunken welfare grants from governments. Efforts were made to enhance service efficiency through the implementation of new managerial practices, which involved intricate cost-benefit analyses. Larger organizations had a greater advantage in securing funding, while smaller organizations faced challenges in managing costs and delivering a wide range of services.
Furthermore, with the increasing focus on marketization and managerialism in welfare services, the perception of receiving welfare benefits shifted towards being seen as a form of consumption. Welfare recipients have transitioned from being citizens in need of social security benefits to becoming consumers of service-providing organizations.
Social Welfare in the 21st Century
The themes of developing welfare in the 21st century are similar to those in the 1990s. In the twenty-first century, welfare provision based on mutual obligation has become the norm, reflecting the progress of the economy. It prompts us to consider if the provision of welfare is founded on the ideals of fairness and the goal of diminishing social and economic disparities.
In the 21st century, the Australian welfare provision has become more complex, with a range of services, financial assistance, and tax benefits. There is also a connection between general welfare payments and the social insurance system, which includes pension funds and Medicare. There are various welfare providers available, including government institutions like the Department of Human Services (DHS) and the Department of Social Services (DSS), market-based services, nonprofit organizations, and community groups.
In recent times, Australian governments have placed a significant emphasis on social tax expenditures. This includes measures like raising payment rates for the Family Tax Benefit scheme and enhancing tax concessions or rebates for superannuation and private health insurance.
It is worth noting that the current Australian welfare system is often seen as egalitarian due to its emphasis on protecting the rights of wage-earners and promoting full employment, which has resulted in a relatively low level of ‘working poor. However, the implementation of welfare policies is influenced by the neoliberal ideology, resulting in a residual welfare regime that prioritizes cost-benefit efficiency and minimizing welfare spending.
Welfare Assistance by the Australian Government
Welfare is commonly seen as a form of assistance provided by governments through the redistribution of taxes. It aims to ensure the basic survival of citizens and eligible residents by offering cash and service support. Typically, when examining welfare, the focus is on public or formal welfare programs implemented by governments.
According to the Australia Institute of Health and Welfare, the Department of Social Services is responsible for managing Australian social security payment policy. Income support payments are distributed by the Department of Human Services, now known as Services Australia, through its network of Centrelink offices. Approximately 35% of the Australian Government’s budget is allocated to social security and welfare programs.
These programs cover a wide range of support, including pensions and services for the elderly, assistance for the unemployed, support for individuals with disabilities and families with children, as well as income support and compensation for veterans and their dependents. Additionally, there are various forms of assistance provided to Indigenous Australians that fall under these functions.
Assistance for Aged
Support for the elderly represents the highest portion of social security and welfare expenses in the Australian government’s budget, totaling approximately $66,771 million from 2018 to 2019. The Aged Pension serves as the primary source of income support for elderly Australians who meet the necessary age and residency criteria, as well as the means test for income and assets. In fact, it accounted for over 70 percent of the assistance provided to the elderly in 2018-19.
The allocation of funds for aged care services in 2018-19 accounted for 26 percent of the assistance provided to the elderly. However, there have been concerns raised about the adequacy and effectiveness of these funds in meeting the specific service needs of the elderly. Several concerns have been brought up regarding aged care services in Australia.
These include the scarcity of both skilled and unskilled workers, the inadequate availability of professional services for elderly individuals with dementia and disabilities, the low wages and high turnover rate in the industry, and the unequal distribution of resources between urban and rural areas.
Assistance for Disables
Support for individuals with disabilities is a significant area of focus for the Australian government’s social security budget. In the fiscal year 2018-19, a substantial amount of $47,966 million, accounting for 27.26 percent of the total social security spending, was allocated to this cause. The National Disability Insurance Scheme embraces the idea of marketization in its framework and regards service users as rational consumers who decide which organization they want to receive services from. There are differing opinions on the advantages and potential drawbacks of this.
For instance, individuals can have a wider range of options when selecting the service they desire, while organizations can enhance their service structures. However, it is important to recognize that individuals with various disabilities, especially those with intellectual disabilities, are capable of making rational economic decisions. This can pose challenges for smaller organizations that have a local focus, as they may struggle to invest in expanding their services and competing with larger organizations.
Assistance to Families
The fourth highest social security expense is assistance to families with children, 20 percent of the total in 2018-19. Different kinds of family payments include the Family Tax Benefit, Parental Leave Pay, Dad and Partner Pay, Child Care Subsidy, Additional Child Care Subsidy, and Parenting Payment.
The Australian government generally applies income and assets tests to determine whether a family is eligible to receive some kind of family payment. Nowadays, providing family support payments differs from the universal provision issued in 1941. Instead of ensuring all families have access to income support, today’s family income supports mainly target families with lower incomes. The ideology is to provide sufficient income support for most needy families.
No matter that the provision methods become more and more complex, family income support always targets the child’s main caregivers. Given that women often take on the role of primary caregivers in families, family payment can serve as an incentive for them to consider expanding their families. It provides more flexibility for women to decide to what extent they want to participate in the workforce.
However, there is a challenging situation that arises for a woman who is the main caregiver for her children. If she decides to work, most of her salary will be spent on child care because the government uses income tests to determine how much child care subsidies the family can get. If she decides to stay at home and look after the child, she will experience the loss of her career development and superannuation accumulation.
Assistance to Unemployed and Sick
The Australian government’s expenditure on support for the unemployed and the sick ranked fifth on the list, amounting to less than one-third of the funding allocated to families with children. The Unemployment Benefit was implemented in 1945 to offer financial assistance to individuals who were unemployed and actively seeking employment.
During that period, individuals seeking unemployment benefits were not required to engage in any form of strike. However, individuals must meet certain criteria, including income and residence qualifications, and be open to participating in necessary training and appropriate assigned tasks. By the start of the 1970s, there was a significant improvement in the Unemployment Benefit.
As an illustration, back in 1973, the unemployment benefit was paid at the same rate as pensions, and standard payment rates were established for both married and unmarried recipients. The Fraser government in Australia, elected in November 1975, implemented significant cuts to government spending and resources for public welfare, emphasizing the importance of individuals as rational economic actors.
Since the 1980s, Australian governments have implemented various measures to determine payment rates, assess income, and evaluate work and activity for different recipients of unemployment benefits. In 1991, the Newstart Allowance took over from the Unemployment Benefit.
As the Australian government maintained its focus on economic rationalism and the power of the market, individuals receiving the Newstart Allowance were expected to actively engage in the Employment Pathway Plan or the Work for the Dole program. This involved completing up to 25 hours of work-related tasks each week, typically in a community or government setting.
The government determines the Newstart Allowance payment rate to provide job seekers with a minimum standard of living, which increases following the Consumer Price Index (CPI).
The government aims to keep income support for job seekers low because it wants to create an incentive for people to gain paid work and support themselves as much as possible. The rationale for implementing a job seeker payment program is that individuals should strive to enhance their knowledge and skills and prevent any personal deficiencies or shortages that may lead to unemployment.
Organizations in Australia
Government institutions, nonprofit organizations, private companies, and community groups are all engaged in welfare delivery in Australia. Australia has a long tradition of governments outsourcing services to nonprofit organizations and community groups. The end of the 1960s and mid-1970s witnessed a vast expansion of nonprofit organizations and vigorous social movements.
Consequently, Australian governments retreated from direct service delivery and outsourced more social services to nonprofit organizations. With the increasing influence of neoliberalism and managerialism, Australian governments largely adopted contracts to purchase services. Competition between nonprofit sectors has increased and private sectors have expanded their involvement in social service delivery.
Large nonprofit organizations have more opportunities to win government contracts and attract donations in the current welfare delivery market. With the increase in private institutions in the welfare service delivery market, small and local-focused nonprofit organizations experience many difficulties developing and surviving.
Services Australia (formerly known as the Department of Human Services) provides a variety of health, social, and welfare payments and services through programs like Medicare, Centrelink, and Child Support. It collaborates with various government, private, and nonprofit agencies to establish service delivery policies and ensure the provision of services.
Centrelink delivers social security payments and services, an important part of Services Australia. It is Australia’s biggest employer of social workers (750 persons in 2017). But more recently, it has been criticized for focusing on economic efficiency and requiring users to be economically rational.
Nonprofit organizations strive to enhance their management and achieve tangible service outcomes in order to thrive in the marketized welfare system. However, they also face the challenge of effectively empowering service users and addressing unequal structures in a sustainable manner.
Nonprofit organizations are often seen as more adaptable and compassionate than governments. However, the effectiveness of their serving methods depends on factors such as their ideology, goals, leadership, personnel structure, and available resources (including funding and external connections). Therefore, embedded in diverse nonprofit organizations, social workers’ practices present differences.
