Services Rendered: Clive's Worked Out What Tony Has Missed

Throughout the tenure of the current federal government, there has been a steady undercurrent of resentment in the rhetoric surrounding welfare.

We’ve seen proposals for a renewed and revitalised Work for the Dole scheme (which I covered earlier this year), increased requirements for jobseekers, tighter restrictions on those seeking disability payments, and we’ve heard an awful lot about how welfare spending stops people from helping themselves.

This thread of individual responsibility and austerity has weaved itself throughout almost every comment or statement regarding social policy that heard coming from Canberra since the Abbot administration took office in September last year.

However, this recent comment from Liberal backbencher, Ewan Jones has highlighted the logical extension of this argument: people on the dole are just plain lazy.

"Is it better to have someone earning and learning… (or) is it better to say to them, there's your dole, go home eat Cheezels, get on the Xbox?" Jones asked media representatives in Canberra a few days ago, defending the recent proposition that would see jobseekers under 30 wait six months before receiving their Newstart payments.

"There are no free lunches, that's what we must be saying to people in this space."

I agree with the Member for Herbert, those lunches aren’t free. Mostly because people receiving income support have usually been earning wages and paying taxes directly before applying for Newstart, or will be earning when they re-enter the labour force within 12 months, as the vast majority of unemployed people do.

As Greg Jericho found in his recent analysis of unemployment trends, even though we’ve seen a sharp increase in long term unemployed in recent history, only 20 per cent of unemployed persons (approximately 1 per cent of the Australian population) are unemployed for longer than 52 weeks.

Almost 60 per cent find work within 12 weeks.

This means that the people who are unemployed are either contributing to their own income support payments through personal taxation, or will continue to ‘pay it back’ long after they stop receiving those payments. In most cases, it’s both.

By asking those most in need to forgo those payments, the government is actually asking them to pay for services that will no longer be rendered. Which is exactly what they’re trying to avoid asking the more well-off to do – pay for services they will not be receiving.

Even worse, when you consider that consumption or value added taxes (the GST in our case) have a greater effect on those less fortunate (as it takes a larger portion of their purchasing power away from them, and places it in the government’s coffers) we’re asking the unemployed to take two for the team.

All this aside, there is something much more important underlying Jones’ comments – they’re actually antithetical to the LNP’s own ideology.

If we take the Member for Herbert at his word and assume that the unemployed use their Newstart payments to buy junk food and gaming systems, then that is fantastic for the economy. They’re consuming, and they’re paying tax on that consumption to boot.

For every dollar those on income support spend, the government is getting 10 per cent back.

What’s more, they’re keeping demand up on consumables, and if it is for products like Cheezels and Xbox 360s, that means that they’re keeping foreign investors happy, which makes them more likely to invest in expanding their enterprise in our sunburnt country. This means more jobs can be created in Australia, and more profits can be returned to shareholders. Everybody wins, right?

Unfortunately there is an even deeper issue that seems to have escaped the honourable member.

From a political economy standpoint, the greater aim of welfare is to placate those who would otherwise be angered by the economic situation.

From the creation of the modern welfare state under Chancellor Otto von Bismark in 1870s Prussia, to the current struggle in a post-GFC world, income support payments have been used to keep the less fortunate on the side of political elite.

We only have to look to the austerity policies implemented in Southern Europe to see the type of unrest that can be avoided by a little spending on social services.

While those economies across the Mediterranean were nothing to be emulated before the crisis, they’re certainly examples to be learned from when considering welfare retrenchment.

As much as it pains me to say it, there is only one person in the Australian parliament who understands the nature of social policy in the post-industrial capitalist system – Clive Palmer.

In what has come to be a ‘Classic Clive’ move, Palmer has recently announced that he will block (Surprise!) all attempts to pass measures that would see the unemployed lose their income support.

While I don’t dare to claim I know what happens inside the mind of Clive Palmer, I doubt that he is driven by dreams of a progressive and egalitarian Australia. Clive is a businessman.

Clive is capitalism incarnate, he understands that the business of business is business – and business is good.

Clumsy reiterations aside, there is a much greater narrative in political economy that Mr Palmer is tapping into (perhaps unknowingly), stretching back to Adam Smith and David Ricardo.

It is simply that if you want the capitalist system to continue, you’ve only got to give a little to get a whole lot.

Unfortunately, the current government are not giving much of anything – the kind of reform they are proposing is a drive towards austerity, fuelled by more than a bit of ‘dole shaming’.

While this social policy platform might seem unpopular to some of us, the way we have constructed our welfare narrative in Australia means that the comments made by Ewan Jones are considered entirely valid by large sections of the community, albeit a little bit on the inflammatory side.

On the bright side, at least we’ve got junk food and video games.

* Shirley M. Jackson is a PhD candidate, academic tutor, and early career researcher at the University of Melbourne, who examines the political economy of comparative social policy regimes. He blogs at Captives of Industry.