Welfare - the Rage of Entitlement

When Treasurer Joe Hockey MP said on national television:

"Medicare is paid for by taxpayers, so it's not free" Q&A, 19 May 2014

He seemed to allude that welfare in general is an expectation, not an entitlement, because someone else will pay for it.

That view would be consistent with his 17 April 2012 Institute of Economic Affairs (London) speech titled 'The End of the Age of Entitlement':

"The problem arises however when there is a belief that one person has a right to a good or service that someone else will pay for. It is this sense of entitlement that afflicts not only individuals but also entire societies. And governments are to blame for portraying taxpayer’s money as something removed from the labour of another person."

To be fair, he is not the only Australian to feel this way and would not be a successful politician if he were. The notion that recipients of medical or unemployment benefits recklessly squander public resources has been around long before it was given voice by A Current Affair in 1996. However, the attitude is so pervasive that it overshadows the virtues of welfare. Even someone like me who believes that unemployment benefits are a good thing can feel ashamed at the thought of taking someone else's money.

Let me explain:
I was recently reviewing my income protection insurance position i.e. whether to alter or simply cancel it. It turns out that my main reason for wanting to keep it was that claiming unemployment benefits (known as Newstart) was gradually becoming more difficult with each successive government. At least, I thought, if I pay a premium then I will be treated better by my compensators.

But then it dawned on me that I have already paid my premium for Newstart and Medicare. And so has every other Australian. To wit:

• Australia Average weekly earnings $1483.5 (Source: ABS)
• $350 per week of which is taxed.
• Budget 2014 = 415.3 billion (100%) (Source: ABC)
• Health = 64.51 billion (15.5%)
• Welfare spend: Total: 140.57 billion (33.8%); Unemployed and Sick: 10.2 billion (2.5%)
• The Australian government does not rely on individual taxpayers alone. Taxation on individuals accounts for 47.1% of government revenue. Its other sources include company tax and GST.

So if I were an average Australian wage earner, I would have paid $108 per week towards national health care, and $17 per week towards unemployment 'insurance'. And even if I were on Newstart (or indeed a child) I would still be funding the government with almost 10% GST every time I or my parents bought something.

A Newstart beneficiary receives $13273-$18543 annually and faces six months quarantining of benefits if they are under thirty under proposed rules, unless they 'earn or learn'. To compare, my income protection policy was approximately $15 per week premium for an agreed sum of $40,000 a year. No condescending bureaucrats, no mutuality to job-seek or study. Just a note from my doctor.

Mr Hockey is correct. Governments are to blame for portraying tax money as something removed from another person's labour. And well they should, for you are that other person. You have paid your own premium, therefore your entitlement should be considered as such.

Sure the financial climate is volatile, but the government is facing exactly the same conditions as insurers, underwriters, and any other financial institution involved with borrowing long and lending short. Directors of those firms would be swiftly removed if they even hinted at blaming customers or shareholders for their companies' financial woes. The stock market, ASIC, and the ACCC would gang-bash any company that used business conditions or the conduct of their stakeholders to excuse a failure to meet expectations. Witness the carnage that results from a disappointing dividend payment. Yet, this is analogous to what Mr Hockey attempts, perhaps because of a general assumption that the government's literal monopoly translates to a moral one.

Once you consider what value for money the Government offers, and the plainly divisive tactics used to stigmatise and withhold benefits claims, you may well feel the rage of entitlement.