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"Menzies, liberalism and social justice", Sir Robert Menzies Lecture Trust, the 1999 Menzies Lecture, 6.30 pm, Thursday 18 November, 1999, Monash University, Caulfield Campus, Melbourne.

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6.30 PM

















It is sometimes said that we Liberals pay too little tribute to our historic figure s.  There is some truth in this.  Hard won victories, substantive achievements and dramatic political successes are too often relegated to the historical closet.


The exception is Sir Robert Menzies. Monuments have been erected to Menzies: Menzies Trusts established, Menzies Lectures and even a Menzies Research Centre.  We have invoked his standing at every possible turn in the contemporary life of the party.  And we have had good reason to do so.


Menzies was a great figure in Australian history. His task in founding the Liberal Party cannot be over-estimated.  Those who have lived through oppositions and appreciate the fragility of even an established party, can only wonder at his achievement in constructing the modern Liberal Party.


Menzies did not just win elections; his electoral success is unparalleled in Australia’s history.


He was not just a man who led the nation during a period of remarkable prosperity and growth.  Menzies forged the organisational structure and the political philosophy of the Australian Liberal Party.


The Liberal Party website states: “ the name Liberal was chosen deliberately for its associations with progressive 19th century free enterprise and social equality ”.  It quotes Menzies’ opening address at the 1944 Canberra Conference where he outlined his design for his new party by saying “ what we must look for, and it is a matter of desperate importance to our society, is a true revival of liberal thought which will work for social justice and security B. ” 


Alongside Menzies’ philosophical commitments to enterprise and initiative, to the incentive to prosper and create, was a commitment to social justice.  A commitment embracing a better distribution of wealth, and giving people protection against misf ortune, a protection consistent with their independence and dignity as democratic citizens.  He saw government as playing a central role in achieving these ends.


Today, social justice is not a phrase on the lips of every Liberal.  The fact that social jus tice has been a central philosophical plank of the Liberal Party from its very origins, and that its founder was a strong and persistent advocate, may surprise many Australians who came to political maturity after his retirement.


In case I am accused of e litism or even ageism, I should say that a recent work by the Menzies Research Centre is a case in point.  The Menzies Research Centre is “ a national policy research institution dedicated to the liberal philosophy of Australia’s longest serving Prime Minister. ”  Its first publication is a book called “Social Justice: Fraud or Fair Go”.


Many of the essays undertake a critique of the idea of social justice, affording scant attention to the fact that social justice was a key part of Menzies’ philosophy. The D irector of the Centre describes social justice as a “propaganda tool” which does not “pay any attention to human nature”.  Others see it as coercive, antithetical to individual justice and corruptive of the welfare ethos.


It is true that many of the posit ions Menzies embraced, as part of an Australian consensus, have been superseded.  White Australia went a third of a century ago.  The imperial connection is now vestigial.  Many of the great public enterprises have been sold off, privatised first by Labor, and later by this government.  Protection has been worn to the bone by governments pursuing policies of deregulation, tariff and subsidy reduction.


Political parties do grow and change.  Different emphases are given, alternative means are adopted.  But I believe that fundamental philosophical values to which Menzies subscribed  - private enterprise, social justice and the great function of Government - remain relevant.


I think we all appreciate that in the ebb and flow of politics, consistent reference to philosophical foundations cannot always be achieved. Politicians are not philosophers. The impulse is to govern, to exploit political advantage and minimising weakness , rather than philosophical reflection.


The risk is that the demands of the day and the year can move a party from its philosophical roots.  Core values can be submerged by immediate imperatives.


Tonight, I want to take the opportunity to restate the ca se for Menzies’ vision of social justice as a central tenet of the Liberal Party, one which continues to be relevant and important to the well being of the Australian people.




Social justice has a distinguished pedigr ee in Australian Liberalism.  Alfred Deakin, who presided over the passage of age and invalid pensions legislation, highlighted its centrality, saying, “the Liberal Party has been distinguished by two or three leading principles.  It has sought social justice by trusting the people and developing the power of self government.”


Menzies was of this persuasion.  As Paul Hasluck has said:

“Although a traditionalist, Menzies was not a conservative in any doctrinal sense.  I do not know what part he had in choos ing the name ‘Liberal’ for the new party he formed and led but the name would certainly fit his political creed.  His political thinking was in accord with the liberalism of Alfred Deakin and the liberalism of late nineteenth century England.


In Oppositio n, during a series of radio broadcasts in1942, Menzies set out his view of the duty of government to promote the four freedoms, embracing not only civil and political rights but also social and economic ones. With respect to  “Freedom from Want” Menzies stated:

“The country has great and imperative obligations to the weak, the sick, the unfortunate.  It must give to them all the sustenance and support it can.  We look forward to social and unemployment insurances, to improved health services, to a wiser con trol of our economy to avert if possible all booms and slumps which tend to convert labour into a commodity, to a better distribution of wealth, to a keener sense of social justice and social responsibility.  We not only look forward to these things; we shall demand and obtain them.  To every good citizen the State owes not only a chance in life but a self-respecting life.”


Menzies saw social justice as an issue of rights rather than charity.

“The purpose of all measures of social security,” he said, “ is not only to provide citizens with some reasonable protection against misfortune but also to reconcile that provision with their proud independence and dignity as democratic citizens.  The time has gone when social justice should even appear to take the form of social charity.”


Charity is a benevolence to be given or withheld to supplicants at will.  Social justice is a defined right of respected citizens to social security in times of need.


Menzies, who had seen the excesses of laissez faire and the effec ts of boom and depression, rejected the view of government as merely “ holding the ring, while private enterprise fought and won on the basis of the fight going to the strongest and the devil take the hindmost ”.

Liberalism was not to be the servant of priva te enterprise.  Again and again, using remarkably similar words, Menzies rejected this notion.


“We stand for the dynamic community force of private enterprise; we are its protectors and encouragers but we are not its servants.  We prefer the live hand of the private entrepreneur to the dead hand of socialism; but if the individual is to have social and industrial justice and to be guarded against what might become the tyranny of the strong, private enterprise must accept its duties or even its burdens.”


M enzies was committed to an active and progressive role for government as the servant of the people, not its master.  Government, he said, has “ great functions to perform which are far beyond the scope of private enterprise ”. 


Menzies’ commitment to socia l justice was not mere rhetoric.  In 1939 when the Lyons Government failed to proceed with the National Insurance Act providing extended social welfare benefits, Menzies resigned from the Cabinet.


As Prime Minister, Menzies translated his commitment to social justice into innovative policy achievements that have shaped the character of both this nation and the Liberal Party for decades.


He oversaw the rapid introduction of child endowment for the first child, free pharmaceutical and medical benefits for pensioners, and a national health scheme.

Menzies recognised the importance of education as a means of promoting citizenship, personal development and social mobility, as well as the national econ omy. Under his leadership, the government inspired and supported an unprecedented expansion of education in areas that had traditionally been the preserve of state governments.  New universities were established, as was a generous Commonwealth scholarship scheme, placing tertiary education within reach of those who could not otherwise have afforded it.


He broke the shackles of sectarianism by providing State aid to non-government schools.


Towards the end of his Prime Ministership he proudly declared:

“We have greatly aided social justiceB we have shown that industrial progress is not to be based upon the poverty or despair of those who cannot compe te.  After over fourteen consecutive years of political office at the centre of the nation, we can point to a range of achievements in industrial justice and peace, in social services, in a growingly successful attack upon poverty, in widely distributed rising standards of housing and of living generally, which can be matched by very few countries in the world.”




Over the past thirty years however, the notion of social justice has come under intense and systematic attack from v arious quarters, among them social libertarians, economic liberals and social conservatives. The dimensions of this attack are many.


Some, while philosophically interesting, are, in the real world, not particularly pertinent and I will not dwell on them. There are those who argue that it is not possible to evaluate the justice or injustice of the distribution of wealth emerging from the operation of a free market.  They conclude that the concept of social justice therefore rests on a fallacy .  Or, there is the surreal proposition that Government taxation without the free agreement of individuals is morally indefensible.  Neither of these two theories are relevant to the operation of a modern democratic society.


However, there are other dimensions of the attack that are increasingly prevalent.  The first is that social justice is a disguise for a discredited socialism.  The second, that it unduly interferes with the freedom of the marketplace. And finally, that social justice leads to an unacceptable welfare system.


The first dimension, emanating from British free marketeers, sees social justice as a Trojan Horse.  These critics argue that social justice is designed to disguise with attractive, acceptable language, the new socialist objective of equalising individual incomes and possessions.


Whatever the case may be in Britain, it is absurd to suggest that the idea of social justice espoused by Robert Menzies might be an invitation to socialism by stealth.


Menzies was under no illusion that socialism was a potent force because it offered solutions to so many issues of popular concern - the horrors of child labour, the denial of the rights of employees and suppression of trade unions, extremes of wealth and poverty.  For democracy to survive the challenge of socialism and of fascism, it had to demonstrate that it could deal with these issues, and the vehicle for doing so was social justice.


For Menzies, there was no conflict between vigorous opposition to state control of the means of production, distribut ion and exchange, and advocating an active role for government in the economy, in welfare and education.  He believed that poverty should be attacked and that vast differences in wealth were corrosive to the nation.  But he was no leveller.  He believed that people should be rewarded differently in accordance with their skills, their achievements, their enterprise and initiative, and because of their frugality and foresightedness.  He also believed that all people were entitled to a decent life.


Menzies, the founder of the Liberal Party, reconciled these views.  He believed that they were all essential prerequisites of a healthy free enterprise system.  Those who argue that social justice is a Labor plot devised by social engineers in the Hawke/K eating years should reflect on the reality that social justice was one of our Party’s foundation stones.


Unlike Labor, Liberals oppose cutting down the successful, or denying incentives to those prepared to use initiative.  It is not our aim to reduce all to the lowest common denominator.  We support diversity, incentive and choice.


But a belief in social justice is not antithetical to those ideals.  One of the hallmarks of a healthy free society is that we believe that we are strengthened by a commitment to imperative obligations to the weak, the sick and the unfortunate.


The second dimension of the attack on social justice rests on the claim that it interferes with the operation of the free market, which is ultimately the guarantor and deliverer of prod uctivity, choice and freedom.  There is no disputing the effectiveness of the marketplace.  The market allows individuals to make choices they believe to be in their best interest.  It is the engine of creativity and responsiveness on the part of producers, and it is essential to human liberty.


The pro-market purists however do not just laud the achievements of the market economy and its effectiveness.  Their fundamental commitment is to reducing the role of government to little more than providing public goods, a subsistence safety net and law enforcement.


The fact however is that a society is more than the outputs of market exchanges flowing from the interactions of individuals.  Our society and its constituent individuals do demand other things of their governments, a sense of collective purpose and vision, the provision of effective health and education systems, addressing disadvantage, and expanding opportunity.


A liberal commitment to social justice complements and underpins a free market economy.  F rankly, the Australian community, with its innate sense of fair play and concern for maintaining the self-respect of others, would not tolerate a system which does not make adequate, fair provision for the disadvantaged.


The third dimension of the attack on social justice is that it leads to a social welfare system which results in rorting, undermines personal responsibility, erodes the incentive to work, and impedes the operation of the market.


It is timely to examine these critiques, particularly in lig ht of the fact that welfare is the next reform priority on the Commonwealth Government’s agenda.


One focus of ongoing commentary is that many Australians are rorting the welfare system.  Rorting is a term with many nuances in the Australian language.  One aspect is widespread fraud.  And yet the evidence is that the incidence of fraud by welfare recipients is extremely low.


Australia has some of the most advanced and effective welfare fraud detection capacities in the world, including data matching betwee n Centrelink and the Tax Office.  Last month, the Government released a report on social security compliance for the 1998-99 financial year. The report followed 2.7 million entitlement reviews of welfare recipients.


Out of more than 6 million welfare rec ipients there were 3,011 convictions for welfare fraud.  Approximately .05 percent of recipients fraudulently obtained benefits.


There are currently more individuals in Australia who win first and second division Tattslotto each year than there are indivi duals engaged in welfare fraud.


A small element in our community, as in all modern societies, do try to benefit from the welfare of the state, while seeking to avoid their own responsibilities.  Clearly, the avoidance of responsibilities by a minority war rants the imposition of effective compliance and administrative measures.


However, we need to guard against characterising the incidence of fraud in a way that becomes a sweeping attack on the integrity and social responsibility of the overwhelming major ity of social security recipients, seeking to rise above their difficult circumstances.


Another form of rorting the system is presented as people failing to take up available job opportunities.  The colloquial term for such people is ‘job snobs’.  But I think we need to ask ourselves the question - how many jobs are available out there?


Th ere is a diversity of evidence and anecdotes about the number of jobs available in our labour market.


According to the ABS there are 80,000 jobs available.  According to the ANZ job advertisement survey there have been a maximum of 30,000 unfilled positio ns at any one time, a substantial percentage of which are for highly skilled positions for which there is a shortage of the appropriately skilled personnel.


Whichever figure one takes there are abundantly more jobless than there are job vacancies.


Furthermore, the existence of 30,000 or 80,000 job vacancies does not mean that unemployment has the potential to fall by 30,000 to 80,000.  Many of these jobs will be filled by people already in employment.  Of the remainder, a significant proportion will go to people outside the labour force. Only a proportion of job vacancies go to the unemployed.  In fact the latest ABS Labour Force statistics show that twice as many jobs currently go to people who have not previously been in the labour market than to people who have been unemployed.


It is vital to facilitate the path of those on welfare back to the workforce, wherever that may be possible.  It is also vital for us to recognise that there are not unlimited masses of job vacancies in the marketplace that remain unfilled due to the provision of welfare undermining the incentive to work.


Another perspective is provided by the experience of the Work for the Dole scheme, which reflects the Government’s commitment to strengthen the principle of “mutual obligation ” + that is, requiring people to contribute to the community in return for the community’s support.


Early indications from the Work for the Dole scheme also sit at odds with the suggestion that our unemployed are ‘job snobs’.


Evidence from the May 1999 ev aluation of the Work for the Dole pilot study points to the fact that of those who entered the scheme 34 percent had found employment three months after leaving it.


More illuminating still, is that it underscores the desire of unemployed Australians to vo luntarily seek and benefit from the scheme.  Indeed, the evaluation found that 48 percent of those who participated in it had volunteered to do so. And whilst the scheme was initially targeted to 18-24 year olds, at least 10 percent of participants were above that age group. They had no requirement to join the scheme but voluntarily did so to gain the experience and opportunities it offered.


Another basis for criticism of social justice is the perception that Australian social security benefits are so gen erous and readily available as to represent a disincentive to work.  This also does not stand up to scrutiny.


The OECD has concluded that

“the level of generosity of unemployment benefits in Australia remains below the OECD average, particularly with regard to shorter duration unemployment.  This, combined with ongoing measures to tighten the administration of the activity test, means that it is unclear that the unemployment benefit system, when taken as a whole, has contributed significantly to the rise in structural and long-term unemployment.”

Regarding the impact of social security benefits on employment and the economy as a whole, the OECD comments :

“Comprehensive means-testing of social security benefits in Australia has constrained expenditure on them to levels far below those in most other countries.  This has enabled Australia to combine a comprehensive social safety net with low tax wedges on labour income and hence, an ‘employment-friendly’ taxation environment.”


The evidence is that overwhel mingly Australians do not rort the social security system, nor do they shirk their responsibilities when they are given the opportunity to meet them. The evidence is that the provision of benefits does not make impossible impositions on our economy.  People are dependent on benefits because they cannot find opportunities to work or are old, sick, disabled, caring for dependants who rely on them or face other difficulties.  In the case of unemployment an entitlement that was designed to cover short periods now has to cover longer and longer periods. 


The unemployed, and others who are heavily dependent on welfare, cannot be held unilaterally responsible for their condition.  They are not dependent from desire, but from a genuine lack of opportunity and the structures through which they can contribute.  


We should not forget that it was the structural adjustments of the 1980’s and 90’s that contributed on the one hand to increased prosperity, but on the other, to an increased number of victims of market failure legitimately seeking assistance from the State.


But let me also make it clear, that for those consigned to prolonged periods of dependence on government welfare, through lack of opportunity, the personal consequences can be destructive.




The reality is that welf are dependence creates challenges for our community. Noel Pearson has highlighted for us how communities dependent on welfare because of lack of work opportunities can become caught in an endless cycle of poverty, depression and reliance with tragic social consequences.


Speaking of Aboriginal communities on the Cape York Peninsula displaced onto welfare from the pastoral industry, Pearson said:

[Negative welfare] “that is the provision of income support to able-bodied, working age people without reciprocity is the source of our social problems… We need to insert the principle of reciprocity … If we do this we will leech out the destructive element in the welfare resource.  We will turn negative welfare into positive welfare.”


Pearson highlights how the p rovision of welfare without reciprocity has corroded incentive and contributed to a helpless social dysfunctionalism.


To address this, Pearson advocates a partnership between Aboriginal communities, State and Commonwealth governments and private enterpris e.  He emphasises that in this partnership:

“the critical ingredient will be the provision of resources by the State.  When we say that negative welfare is destructive, we mean that it needs to be changed, not that the resources should be denied or diminished.  In fact, the process of social and economic recovery will require significant increases in access to resources by indigenous communities.”


Within the framework that Pearson advocates for welfare reform, he acknowledges that it will take increased f inancial support.


Social justice requires the provision of a safety net while encouraging people who can do so to return to independent living as quickly as possible.  And it also involves obligations to provide real opportunities, real programs and real financial support.  That does not mean that it undermines a Liberal commitment to incentive which lies at the very philosophical roots of the founding father of the Liberal party.


It was Robert Menzies who argued in The Forgotten People that:

“To every g ood citizen the State owes not only a chance in life but a self-respecting life. But this does not obscure the fact that the State cannot and must not put a premium on idleness or incompetence. It must still offer rewards to the enterprising. It must at all times show that security is to be earned, to be merited, and is not to fall like manna from heaven.”


Social justice means that governments have obligations to ensure that welfare support for those in genuine need is adequate and effective.  We have obli gations to ensure that payments do not fall below minimum levels, reinforcing rather than relieving dependence. We have obligations to prevent the descent into dependence and to accelerate the path out of it.


There are high social costs that come with inc reased inequality. The dislocation of society, disenchantment with authority and the political process, social alienation, hostility to those perceived as privileged and, of course, an increase in anti social behaviour such as violence, crime, alcoholism, drug dependence and so on. All of this translates into long term dependency traps with huge social and economic consequences for the community.


The Hawke/Keating Governments, while strong on the rhetoric of equality, oversaw major damage to the social fab ric of our society.  Their policies saw average household incomes fall in real terms amongst the least affluent neighbourhoods and a proportional reduction in access to higher education for the poor.  Their policies saw earnings for the lowest paid fall in real terms to 10 year lows, whilst for highest paid workers earnings soared by almost 20 percent.  That was Labor’s legacy to social justice.


That was the inheritance that the present government found when it entered office in 1996. A society with an emerging picture of groups not only out of work - but with little hope of ever returning to work - the spectre of generational unemployment and en trenched disadvantage. An unacceptable gap between rich and poor.


This, together with a $10 billion Budget deficit from Labor, was the present government’s starting point. The overriding priority facing it was to reduce the deficit. We achieved this throu gh a variety of measures - including significant expenditure reductions across the board.


The results of those cuts are enduring. The Budget has been put into surplus, and on the basis of estimates in the 1999/2000 budget papers, will exceed $11 billion i n 2002-03.


The deregulation of the economic life of the country has been a largely successful prescription for prosperity. The increase in competition, the privatisation of many state entities and services, the reduction in subsidies and free trade barri ers, and the deregulation of the labour market have all been fundamental to the strength of Australia’s economy today.


We have created a strong economy with lower government debt, and a prosperous private sector.


We have substantially reformed family as sistance payments and we have secured the pensions of aged people by legislatively tying them to 25 percent of total male average weekly earnings.  We have significantly reduced unemployment and created 570,000 new jobs. But long-term unemployment still makes up more than one-third of the total unemployment figure - some 200,000 people. 


For the 680,000 unemployed, the 18 percent of dependent children who live in a family where no parent is employed, Aboriginal communities where life expectancy is 20 year s less than other Australians and the 1.8 million Australians today who live below the poverty line - the legacy of Labor is still very much with us. The deep and enduring social damage left in their wake is in many ways more difficult to repair than the economic damage.


It is clear that in addressing Labor’s legacy, Menzies’ view that government has a responsibility to social justice is pertinent and relevant. The market will not of itself resolve these problems. 

Today, however, despite the fact that by OECD comparisons we have a small government sector, there are still some who call for the role and size of government to be even further reduced.


When it comes to government, most critics of social justice still argue “small is beautiful”.  But accordin g to the OECD June 1999 Economic Outlook, government expenditure for Australia is below that of almost all OECD Members.  In terms of gross public social expenditure by government, Australia, at 17percent of GDP, is one of the lowest compared to other OECD countries, many of whom are expending 25 percent or more of GDP.


Size may be important, but it is not an absolute.  Australians believe government has an important role to play in society, and there has been a steady fall in support for smaller governmen t.


According to Quantum Market Research Annual Monitor of Social Values, there is growing community concern that the disparity of wealth is increasing, and that people who need help are missing out.


The criteria by which governments should be judged is not their size, but rather their effectiveness and efficiency in discharging their responsibilities.




In concluding tonight let me briefly bring together the issues I have canvassed.


Robert Menzies outlined a profound and enduring commitment to social justice, the legacy of which I believe remains integral to the modern Liberal Party.


If we are to invoke Menzies’ mantle we cannot do so whilst assailing his legacy of social justice.


If we are to reform our provision of social programs, we sho uld look to the framework of Menzies’ and the Liberal Party’s principles of social justice.


We are a wealthy nation that has experienced impressive growth under this government. With wealth and capacity comes responsibility and obligation.


Liberating peo ple from welfare dependence does not involve blaming the victim.  It will need effective government action in concert with the community.


The reality of welfare rorting and the avoidance of job opportunities, lies more in the exception than in the rule.


We do not pay excessive benefits to those in need, encouraging them to pursue an expensive high life.


I do not believe that we can meet our responsibilities + to the weak, the poor, to those in need + whilst subjecting them to unfettered market forces.


There are limits to the role of the State in our society. But there are also basic obligations. As a party our philosophical foundations risk being compromised or lost if we do not periodically refer to our core values.  We must continually reflect on the correct balance between the freedom and liberty of a free market economy and the imperative welfare obligations of the State.


Australian liberalism is a broad church. Within that church are two fundamental arches. Under one arch rests the market, free enterprise, opportunity and incentive. Under the other rests stability , security, social justice and equity. The mortar that binds those two arches is the State.


Menzies saw a free market society enriched by a commitment to its imperative obligations to the weak, the sick, and the unfortunate.  To ensure that to every good citizen the state owes not only a chance in life, but also a self-respecting life.  Not as charity.  But as a fundamental right.


They are the foundations upon which the modern Liberal Party was built.  They are the foundations that will endure.


Thank you , and Goodnight.




jy  1999-11-19  16:29