Income Security Programmes and the Philosophy of Social Security Policy

Abstract

Social security programmes may be divided into two broad groups of pro grammes, those concerned with income security and those concerned with op portunity security. Income security programmes may be further divided into positive transfer programmes, where there is a cash flow from the government to the individual, and negative transfer programmes, which are a component of the taxation system. Positive transfer programmes may be universal or limited, the main limitation being benefits subject to a means test. Positive transfer programmes may also be classified as to whether they are income based measures, distinguish- . ing between income replacement and income supplement programmes; or whether they are expenditure based, whereby the beneficiary receives either full or partial campensation for expenditure he has made or is assumed to have made.

The philosophy lying behind income security programmes may be related to the principle of either individual need or social right. The former principle tends to be associated with programmes which are limited in nature while universal programmes tend to be based on the principle of social right. In the past most of the income security programmes in Australia have been based on the principle of individual need, but since 1972 there has been a marked shift to programmes based on social right, particularly the policy of abolishing the means test on aged pensions and the introduction of Medibank. Social right policies, in general, tend to be more costly and alleviate less need per dollar of outlay than individual need programmes.

Apart from the move towards social right programmes, there has been an increasing lack of coordination between existing and proposed programmes. Although an inter-departmental committee has been established to investigate this problem, it is unlikely that any real change will eventuate from that source in the near future. What is required in Australia today is not further studies of poverty or the prescription of new programmes, but an explicit statement of social welfare philosophy on which programmes are to be based, and the establishment of an organisation whose primary and perhaps sole task is to co-ordinate social security programmes.

1. J. Cutt, New perspectives on welfare reform, Social Security Quarterly, 1973-74 (3), 1.

2. A universal scheme is one applicable to what is known in statistics as the 'population', which is the number of individuals with the specified characteristics. In this sense, the 'population' does not mean all individuals in the nation.

3. See Compensation and Rehabilitation in Australia, Report of the National Committee of Inquiry, Canberra: Australian Gov ernment Printer, 1974. On the other hand the National Superannuation Committee of Inquiry did not come down in favour of either kind of benefits scheme. See National Superannuation in Australia, Interim Report of the National Super annuation Committee of Inquiry, Canberra : Australian Government Printer, 1974, p. 20 and Chapter 9.

4. The distinction between an income supplement programme and an expenditure based programme is somewhat arbitrary in that income supplement programmes are also inherently designed to provide additional funds to the individual to offset assumed higher expenditure because of prescribed circumstances (for example having children under 16 years of age). In this paper the distinction is based on the degree of regularity of the payment. Continuing payments are classified as income supplements, while once-for-all payments are classified as expenditure based. Of course, an individual may receive more than a single such payment during the year, the number depending on the occurrence of the event which generates the expenditure — visits to a doctor, confinements.

5. See C. P. Harris, Economic Aspects of Social Security Programmes : an application to age pensions, Social Service 1969, 21 (2), 2-15.

6. A. M. Haveman, R. H. Haveman and A. V. Kneese, The Economics of Environmental Policy New York : Wiley, 1973, p. 77.

7. The best recent example of this is the Australian government Commission of Inquiry into Poverty.

8. See C. P. Harris, Welfare and the Tax System : personal income tax and social security programmes, Social Security Quarter ly, 1973-74, 1 (3), 16-19.

9. Taxation Review Committee Full Report, Canberra : Australian Government Printer, 1975. Inflation and Taxation. Report of the Committee of Inquiry into Inflation and Taxation, Canberra: Australian Government Printer, 1975.

10. It must be admitted that concern about lack of coordination existed within the labour government. It existed in 1972 because the need for coordination was inherent in the functions given to the Social Welfare Commission when it was later establish ed. The fact that the Commission did nothing about coordinating anything reflects not only its own failing but also to a large extent the lack of willingness of a departmentalized structure of administration and its ministers to be coordinated, a lack illustrated by the subsequent establishment of another coordinating review body. This ludicrous position was heigh tened by the submission of numerous reports to the government on welfare matters, all of which represented individual assessments of the nation's ills and prescriptions for their alleviation. In 1975 it was decided to appoint an interdepart mental committee to report on coordination, and presumably to indicate how this can be achieved. Little can be expected from this because the real solution is the necessity to reform the structure of government by converting its existing depart mental structure into a functional structure, with a significantly smaller number of separate functions than the number of existing departments. Hence it is likely that this IDC will conform to the definition given to that term by outsiders—an Inter-Departmental Confrontation designed to Create Intense Delaying Camouflage as justification for the absence of Intel lectually Demanding Consideration of the need for Integrated Dynamic Change.