ALP must make a Newstart on its broken welfare policy

Jenny Macklin has found herself in hot water over comments about the dole. AAP/Alan Porritt

There seems little doubt that Families Minister Jenny Macklin’s office attempted to “fix up” her extraordinary faux pas last Tuesday – her claim that yes, she could live on the daily income of $35 received by people on Newstart.

Macklin has properly endured some opprobrium for what is plainly an attempt to edit her comments out of the official written record. She probably regretted her response as soon as she uttered it, and the temptation to “clean up” unintended utterances in the transcript is always there. Journalists must be vigilant to such attempts, and no doubt they are aided by the political opponents of the person in question.

The real story here, however, is the policy that Macklin was selling during Tuesday’s press conference, and how it relates to core Labor values.

The competence equation

When it was announced last year that single parents would be taken off the parenting payment and placed on the dole, which not only leaves them $100 worse off every week but also forces them to apply for at least 10 jobs every fortnight, there was widespread acknowledgement that the measure was part of a suite of “tough” fiscal decisions that needed to be made so that the budget could be returned to surplus.

Now Wayne Swan has withdrawn his previously iron-clad promise to run a budget surplus in the current financial year, there seemed little stopping Macklin from delaying or reversing her decision about parenting payments – especially when almost everyone else, from ACOSS to the Business Council and even Parliament itself – is strongly opposed to it.

But there was always going to be one reason in particular that would drive the government to press on with its cost-cutting measure. The government is determined to be seen as being led by competent economic managers, and competency has been determined in this respect as the ability to run a budget surplus.

The pursuit of economic folly

Very early on in her prime ministership, Julia Gillard took up her predecessor John Howard’s crude formulation of competent economic management, and committed her government to achieving surplus by 2012-13.

This was always economic folly: a budget surplus is what a government should aim for in economic boom times so that it can keep inflation under control while the private sector bubbles along creating jobs and wealth. But in recessions, downturns or periods of sluggish growth, deficits are preferable so that governments can inject some otherwise-absent cash into the system.

It’s true that the Liberal Party has not furthered the cause of economic literacy. Tony Abbott and Joe Hockey have been happy to trade on the cart-before-the-horse idea that “surplus equals good economic manager”. But that’s hardly surprising: the Liberal Party is in opposition, and it propounds a belief in small government.

More surprising – and disappointing – is Labor’s initial commitment to a surplus in order to prove its economic credentials, and the fact that it chose to reduce payments to single parents in order to achieve it.

The death of the welfare state

The 20th century idea of the welfare sate says the state should raise enough taxes to ensure the quality of any individual’s health care or education does not depend on their income, wealth or social standing. Traditionally, Labor fought for and defended this idea as a pillar of the social democratic society it sought to build through its reforms. For a time, the Liberal Party under Robert Menzies also defended a limited welfare state.

But for the past 30 years, both parties have been gradually dismantling the structures of the welfare state. John Howard won the battle of minds inside the Liberal Party during the 1980s, and it’s now standard fare for its agents to mount arguments, however spurious, against borrowing money to fund infrastructure and social spending in downturns.

Unfortunately for Labor, and for the country, the ALP also took up these ideas during the 1980s, to the point that it is no longer able to argue with the Liberal Party’s emphasis on budget surpluses. Representatives of the ALP can no longer articulate a social democratic defence of the welfare state.

There were plenty of line items the budget a social democratic government could have attacked if it wanted to save money, such as subsidies to oil and gas companies. That Labor chose single, stay-at-home parents reflects its unwillingness to defend the welfare state, which is widely acknowledged as one of the most important social democratic institutions in history.

A party without a philosophy

Macklin’s attempt to rationalise the policy last week – she claimed it was simply to ensure that all parenting payment recipients were assessed according to the same rules – reflected the worst kind of bureaucratic thinking, devoid of any fundamental political philosophy.

Her office’s attempt to “fix up” the minister’s comments for the record does little to displace the damaging perception that the Labor Party seems unsure as to the grounds for its own existence, beyond winning and retaining power.

One week on, it seems the government will eventually be forced into at least raising the meagre unemployment benefit from an appalling $245 per week.

That figure probably won’t rise by much. Meanwhile, the government suffers more damage from another backflip that could have been avoided if it was more philosophically certain of what it is trying to achieve.