Social policy begets social misery as the Western world fails the poor

Opinion Article

2011 July, 30

Earlier this year I contrasted Lee Kuan Yew's achievements in the fight against poverty in his 50-year  odyssey turning the city-state of Singapore from a Third World slum to a First World powerhouse with  the performance of Western nations. 

I argued there were more policy lessons to learn from Singapore than from our traditional sources of  inspiration, namely North America and Britain. 

My point was our Anglo-sphere allies hardly had great records in achieving social and economic uplift  of their underclasses mired in poverty. While various commentators chafed at my recommendation, yesterday Ben Jensen from the Grattan Institute confirmed it: "We should turn east and learn from the  world's best school systems." 

Singapore's school system is ranked in the top five of the Organisation for Economic Co-operation and  Development's Program for International Student Assessment survey, along with South Korea, Shanghai, Hong Kong and Finland. "In addition, high performance is matched by high equity," Jensen  writes. "Inequality is greater in Australian education. If you come from a poor family in Australia, you are likelier to drop out and have failing grades than in East Asian systems." 

The lowest classes in Britain are in terrible shape, and poor education not only fails to ameliorate suffering, it becomes one of the driving causes of its perpetuation.

Many things distinguish native Britons from native Australians, but in the details of family breakdown,  intergenerational joblessness and social misery, the story is uncannily similar. 

Across the Atlantic, African Americans of the ghettos and the legions of trailer-park whites tell us plainly that, despite isolated examples of social innovation, it is mostly a miserable scene. 

The situation of Australia's native peoples and the white natives of places such as Macquarie Fields, in  southwest Sydney, tells us that amid plenty we have persistent intergenerational poverty and joblessness. 

Borrowing straight from Tony Blair's New Labour play book, the prevailing policy paradigm in our country is called social inclusion, and, as deputy prime minister, Julia Gillard established a Social Inclusion Board to advise government. It is now astounding to think about Australian perceptions of the social policy revolutions taking place under Blair. Young policy wonks would wax lyrically about  the work of the Social Inclusion Unit, and the rhetoric of New Labour was so compelling. 

I would look askance when east London social entrepreneur Andrew Mawson visited us in Cape York  every few years and gave the thumbs-down on Blair and Brown. Mawson's view was that social change  agents who have only a plane-seat view of the problems can produce great visions, but his advice rang  true: "The devil is in the detail." 

Politicians and public servants who have never built anything from the ground up in such communities  never really get it. Most people in social policy live in a world of programs and plans, bearing scant  relation to realities. 

Goods and services in the marketplace respond to the daily realities of human lives, their needs and  desires. When the people and organisations producing and selling these products fail to understand and respond to demands of the public, they soon lose custom and disappear. Government goods and  services are different: they can fail to understand and respond to what the public needs and demands,  and they never go out of business. The production line of useless or half-useless programs and services  built by erstwhile social policy designers in government keeps producing because there is no nexus  between stratosphere-level policy design and ground-level demands of people who need opportunity. 

Not surprisingly, the government services system ends up, in the words of US senator Daniel Patrick  Moynihan, "feeding the sparrows by feeding the horses".

This week I met former British Conservative leader and present Minister for Work and Pensions Iain  Duncan Smith, who was in Australia as a guest of the Menzies Research Centre and delivered the John  Howard Oration. He is the first politician, and first senior public servant, who has struck me as having  a profound understanding of social disadvantage at the ground level. Through the think tank he  founded, the Centre for Social Justice, Duncan Smith has accumulated a vast and detailed understanding of the many facets of social disadvantage in Britain. He used his long years in opposition to start to design a policy and political program aimed at putting his revolution into effect. 

The striking thing is Duncan Smith claimed social justice for the Conservatives. In his Sydney speech  he said: "For too long Conservatives had left this area to the Left, only occasionally making forays to  attack spending on welfare, and everything was viewed through the lens of saving money or catching  scroungers . . . it remained a wholly negative message and allowed the Left to characterise  Conservatives as simply interested in cutting benefits." 

Duncan Smith's claiming of social justice may cause some discomfiture to his antipodean counterparts,  but his view is that "these terminology arguments were utterly detached from the British people, and  they marginalised Conservatives even further in the eyes of the electorate". They conducted polls on  the public's understanding and found that "they rejected the notion that it meant a bigger state or  increased spending on welfare. Instead they felt it meant support for people in real need and support for  those who are helping them." 

In my view Duncan Smith aims to give real meaning to social justice. It is not about the failed welfarism of the Left but social policy aiming to transform the lives of the disadvantaged. As he says, "income matters, but the root causes of poverty and the source of income matter more". 

In our work in Cape York Peninsula we have focused on three dimensions to our staircase of social  progress where passive welfarism has created problems. 

First, there is the crumbling effect that unconditional welfare and long-term disengagement from the  economy has had on social foundations.

Second, governments invariably distribute resources from the state to citizens in ways that create dependency and fail to enliven them to engage in society and the economy. Instead of distributing  opportunity, the state ends up delivering passive services that are ineffective in addressing needs and  problems, and create new needs and problems. 

Third, there is, at the bottom of the staircase, a pedestal that is priced higher than the first step on the  staircase. The disincentive effect of the welfare pedestal on individuals moving from welfare to work,  or avoiding welfare in the first place, remains a fundamental reform challenge in Australia as  throughout the Western world. 

We have developed innovative approaches to the first and second dimensions of the welfare reform  challenge. It is in relation to the welfare pedestal that we are still bereft of solution. It requires a response that moves from the basis that it must pay to work. Then there is the requirement that  jobseekers take available jobs. 

Australian welfare reforms have still not counteracted the effect of the pedestal. 

This is where the solution hammered out by Duncan Smith to simplify the benefits scheme into a single  "universal credit" most interests me. 

This may be one idea from Britain worthy of careful examination.

Social policy begets social misery as the Western world fails the poor