Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Social Policy Research Centre Director predicts social welfare policy for the 1990s.

MATT ABRAHAM: The policy buzz word of the `90s, as the tough times continue, is targeting. It will be the word under which a major cut to Australia's welfare bill will be announced if the Opposition wins the next election. And it has entered the phrase book of the Social Security Minister, Senator Graham Richardson.

Well, what will the social security landscape look like in the `90s under targeting? A major conference canvassing social policy options gets under way today in Sydney, and the co-ordinator is Dr Peter Saunders, Director of the Social Policy Research Centre at the University of New South Wales, and he's on the line now.

Dr Saunders, what do you believe Australia's social policy will look like at the end of the decade?

PETER SAUNDERS: Well, that's very difficult to say in any specific way because it's going to depend upon a number of factors, I think, and one of them is going to be the direction that policy takes and which governments we have. But there are a number of other factors that are going to be equally important. One of them will be, of course, the state of the economy and what sorts of problems that throws up. Another one will be how the demographics of this country changes. I mean, we've been experiencing a general ageing of the population for the last couple of decades - low births rates and longer life spans and so on. That may change, however, and if the birth rate starts to go up again, that itself is going to create pressure for new thoughts on social policy and so on.

And I think the third thing, and the thing that we forget, is public opinion. Social policies, particularly those financed by governments, have to be paid for through taxes. And the willingness of people to pay those taxes, which in part depends upon the benefits they receive from them, will be another factor that will determine what can be done and what's possible.

MATT ABRAHAM: Now, when we talk about targeting, what do you understand by the term?

PETER SAUNDERS: Well, I think the term means that there should be an attempt to try and identify better what Government programs are intended to do and to identify better the groups that are intended to benefit from them, and to try and direct the programs simply to those people and not have any, as it were, spill over of benefits into people who either don't need the program or for whom the programs weren't intended in the first place. And if that can be done - this is the theory of the approach - if that can be done, if one can identify those groups better, narrow down the groups, then one can, of course, provide the benefit at a lower cost to the community and therefore give more room, if you like, for reductions in taxation and so on.

MATT ABRAHAM: Well, in an ideal world you would have everything targeted in the right place, hitting the bull's eye. But that third point you mentioned in looking at the social welfare landscape is probably the wild card, and that is what the public wants, what it is prepared to pay for, and the anomalies it's prepared to tolerate.

PETER SAUNDERS: Yes, well that's certainly true, and I think there's been some interesting things going on in this regard in the United Kingdom in recent years where they have, for the last 10 years or so, suffered a fairly large cutback in their public sector and in their social policies. And one of the things that I think has prevented, certainly under the Thatcher years, the Government going as far as it might have liked, was the public backlash against cuts, particularly in the health service but also to some extent in the school system, the education system. And at the moment, where the political ground in Britain is shifting with the new Prime Minister and so on and an election in the air, I think that public opinion is becoming stronger and the public are saying to the politicians: look, we don't want our health system cut any more, we don't want these cutbacks in our schools, and we are, if necessary, prepared to pay taxes to keep the standards up.

And I think that that's something which one can see to some extent happening in Australia as well. I mean, here we've had quite a long period of restraint; it's not been cut back to the level of the United Kingdom. But I think people do begin to appreciate, when those services are cut, what is there and what the Government provides, and do begin, in their own minds, to make the link between taxes paid and benefits received.

MATT ABRAHAM: The Coalition has talked of the privatisation of welfare delivery. Is that a viable option?

PETER SAUNDERS: Well, I think it depends. I mean my own view, and I think the view of a lot of people working in social policy, is that privatisation is an option that should be given very serious consideration. One of the reasons why, I think, that that happens in the welfare area - and let me first of all make a distinction between privatisation of the big corporations like Telecom and so on, when we talk about privatisation there we're normally talking about the Government selling off assets to the private sector. In the welfare area privatisation doesn't normally mean selling off things. I mean, no one's talking particularly about selling off hospitals or selling off schools or selling off roads. The issue is not selling assets, the issue is trying to introduce more competitive, more competition into the way that services are provided on the one hand, and to introduce more choice for consumers of those services on the other. And it's that second one I think, choice, which gives power to the people for whom the services are directed. It's because privatisation attempts to do that, that many people in the welfare area think that it's an option worth considering.

So, in general terms, I think there's an open mind on it. In relation to specifics, I think we simply have to look at each option on its own merits. Delivery of welfare services, I think one has to distinguish there between delivery of the services as such - this is things like Meals-on-Wheels for elderly people and child care and so on - they have to distinguish between those and paying cash transfers to people, pensions, benefits and so on.

Now, on the services side, a lot of that is in fact already privatised. A lot of the services that are provided are already done so, often by voluntary organisations. Meals-on-Wheels, for example, is a good example. It's funded through money given by the Government but basically run by volunteers.

MATT ABRAHAM: Privatisation, of course, is one thing, but the other aspect is cutting and taking a razor to social welfare budgets. Now, how much fat is there in the system at the moment. I mean, how much cutting can it stand?

PETER SAUNDERS: Well, I think that the amount .. the term `fat in the system' implies that there's money there which can be saved without affecting the benefits that people get. I think if you define fat in those terms it's pretty small. I mean, we have had a series of years of restraint of Government spending, of social spending in particular. There was fat in the system, I don't think anyone denies that. But I think we're really at the point now where, if you're going to start cutting again, you have to face the fact that that's going to make people who are benefiting from those programs directly worse off. The political choices now are much harsher than they were some time ago.

One can, of course, try and redefine the categories in ways which save money. For example, one could raise the pension age from 65 to 66, 67, or what have you. That sort of policy has been pursued in other countries because, as I talked about earlier, the ageing population, the pension bill is increasing and that can be a way of saving money and meeting those problems. But there are going to be groups badly affected by that and those groups are vocal groups and not frightened to express their view. And what often happens, of course, is that when they do express their views the public is on their side. They get public opinion behind them and governments find it politically difficult to introduce these things.

MATT ABRAHAM: We come back to that point, then, of what people want and what they're prepared to pay.

PETER SAUNDERS: Yes, I think that's essentially really where the debate is. On the welfare state, the welfare state is an expensive instrument and if you want a good welfare state you've got to pay for it, and that's really the bottom line, I think.

MATT ABRAHAM: All right. Dr Peter Saunders, we wish you well with the conference. It sounds like an interesting forum.