Does anyone know if Australia’s mutual obligations were inspired by the model used in the US? I was listening to an episode of Reveal about work requirements in their welfare system and it was eerily similar. If not for the accents, you barely would have been able to tell the difference. It had all the same similarities: private companies full of unqualified staff, useless and condescending “training” that doesn’t help people at all, job “providers” claiming all the credit for progress people made on their own, etc.
@Ilandar@vividspecter The short answer is yes. A lot of Australia’s mutual obligation system was created by the Howard government, copying what Bill Clinton was doing in the US, and Tony Blair in the UK.
But it was also underpinned by the same neoliberal ideology as the US and the UK.
Basically, up until the late 1970s and early 1980s, Australia’s official government policy was to have full employment. It was a minor scandal when unemployment skyrocketed to around 3% under Malcolm Fraser.
Especially after the oil shocks that followed the Suez Canal crisis, inflation was running quite high through the late '70s and early '80s.
To try to curb this high inflation, the US, UK, and Australia all adopted a range of neoliberal economic policies advocated by people like Milton Friedman and Friedrich Hayek.
The idea was that if everyone had a job, when inflation rose, workers would demand higher wages, and those wages would put further pressure on inflation, creating a cycle.
So one of the main ways the Hawke Labor government sought to stop this inflation cycle was by stopping wage growth.
As part of this policy shift, The Australian government walked away from the idea of guaranteeing full employment.
As part of a set of policies called the Accord, Hawke and the unions basically agreed to wage increases below the rate of inflation, in exchange for the introduction of Medicare.
The Reserve Bank got an independent board that would raise Interest rates if inflation got above 2-3%.
Importantly, if unemployment rates ever fell too low, the Reserve Bank would see it as an inflationary risk, and have to raise interest rates to slow the economy (which increases unemployment) to stop inflation.
So instead of seeking full employment, the idea that there’s a “natural rate of unemployment” (as economists call it) became part of our economic system.
But, instead of properly explaining to the public that there was inevitably going to be this natural rate of unemployment, governments from Hawke and Keating onwards instead blamed the victims and called them “dole bludgers”.
In the early '90s, the Keating government followed this up by bringing in a limited form of work for the dole as part of his Working Nation policy.
Around this time, in the US, Bill Clinton, and in the UK, Tony Blair, brought in tough new welfare policies. They were built around mutual obligation.
In the late '90s and early 2000s, the Howard government followed in the footsteps of these crackdowns and made mutual obligation a core part of the Australian welfare system.
He also privatised a lot of the old Commonwealth Employment Service, outsourcing its training services to private “Jobs Network” providers. What was left over became Centrelink.
Thanks for the detailed comment and links. I knew about the general neoliberal consensus of the 80s and 90s and the increasing stigmatizing of welfare, but not the connection with mutual obligations between the US, UK, and Australia.
Also explains part of the motivation behind the Abbott/Hockey 2014 budget with its aggressive attacks on welfare, particularly welfare for the young.
Does anyone know if Australia’s mutual obligations were inspired by the model used in the US? I was listening to an episode of Reveal about work requirements in their welfare system and it was eerily similar. If not for the accents, you barely would have been able to tell the difference. It had all the same similarities: private companies full of unqualified staff, useless and condescending “training” that doesn’t help people at all, job “providers” claiming all the credit for progress people made on their own, etc.
@Ilandar @vividspecter The short answer is yes. A lot of Australia’s mutual obligation system was created by the Howard government, copying what Bill Clinton was doing in the US, and Tony Blair in the UK.
But it was also underpinned by the same neoliberal ideology as the US and the UK.
Basically, up until the late 1970s and early 1980s, Australia’s official government policy was to have full employment. It was a minor scandal when unemployment skyrocketed to around 3% under Malcolm Fraser.
Especially after the oil shocks that followed the Suez Canal crisis, inflation was running quite high through the late '70s and early '80s.
To try to curb this high inflation, the US, UK, and Australia all adopted a range of neoliberal economic policies advocated by people like Milton Friedman and Friedrich Hayek.
The idea was that if everyone had a job, when inflation rose, workers would demand higher wages, and those wages would put further pressure on inflation, creating a cycle.
So one of the main ways the Hawke Labor government sought to stop this inflation cycle was by stopping wage growth.
As part of this policy shift, The Australian government walked away from the idea of guaranteeing full employment.
As part of a set of policies called the Accord, Hawke and the unions basically agreed to wage increases below the rate of inflation, in exchange for the introduction of Medicare.
The Reserve Bank got an independent board that would raise Interest rates if inflation got above 2-3%.
Importantly, if unemployment rates ever fell too low, the Reserve Bank would see it as an inflationary risk, and have to raise interest rates to slow the economy (which increases unemployment) to stop inflation.
So instead of seeking full employment, the idea that there’s a “natural rate of unemployment” (as economists call it) became part of our economic system.
But, instead of properly explaining to the public that there was inevitably going to be this natural rate of unemployment, governments from Hawke and Keating onwards instead blamed the victims and called them “dole bludgers”.
In the early '90s, the Keating government followed this up by bringing in a limited form of work for the dole as part of his Working Nation policy.
Around this time, in the US, Bill Clinton, and in the UK, Tony Blair, brought in tough new welfare policies. They were built around mutual obligation.
In the late '90s and early 2000s, the Howard government followed in the footsteps of these crackdowns and made mutual obligation a core part of the Australian welfare system.
He also privatised a lot of the old Commonwealth Employment Service, outsourcing its training services to private “Jobs Network” providers. What was left over became Centrelink.
If you’re interested, there’s a lot more details about how mutual obligation came about under Howard here: https://www.theguardian.com/australia-news/2022/jan/01/where-mutual-obligation-began-john-howards-paradigm-shift-on-welfare
And there’s also in this government research paper from 1999: https://aifs.gov.au/research/family-matters/no-54/welfare-reform-britain-australia-and-united-states #auspol
Thanks for the detailed comment and links. I knew about the general neoliberal consensus of the 80s and 90s and the increasing stigmatizing of welfare, but not the connection with mutual obligations between the US, UK, and Australia.
Also explains part of the motivation behind the Abbott/Hockey 2014 budget with its aggressive attacks on welfare, particularly welfare for the young.
Thank you for the detailed answer, I will definitely check out the provided reading.