After McClure - 'upgrading' the public debate on welfare

The McClure Review provides us with the opportunity to 'upgrade' the welfare policy debate and start to genuinely frame welfare as social investment. Prof. Paul Smyth explores that there needs to be a real understanding of what welfare as investment actually means, with the right social policy nous and frameworks to ensure it is not another punitive measure to individualise social policy problems.

At his National Press Club speech on the McClure report Minister Morrison spoke of the need to ‘upgrade’ the public debate on welfare in Australia.  My first suggestion is that he starts with his own Department and whoever was responsible for the centrepiece of the McClure Report: the social investment model in Australia.  It’s not a failure, mind you, but it’s a long, long way from a H1.

I have read countless student essays on ‘welfare as investment’ over the last decade and can soon spot those students who have done their homework and those who have not.  Here I have to say I was pleasantly surprised to see that the idea of social investment had in fact been taken up in the report and that the explanatory text featured long familiar characters like Sen and capability, the life course approach and even enabling good ‘transitions’.  To be sure it is a welcome distance from the world of Charles Murray and Larry Meade which informed welfare reform in the Howard years.  But it is the superficiality of the discussion of these ideas which has one reaching for the red pen.

Alarm bells soon ring when authors make bold claims totally out of keeping with the research literature.  Declaring New Zealand as the international exemplar of social investment policy for Australia to follow is nothing short of silly – especially when it was your own Whisperer who introduced the idea of the social investment state to that country.  Way back in September 2010, I spoke at a conference convened by the Child Poverty Action group at the University of Auckland to discuss welfare reform

The Minister responsible was present and I was later informed that although the investment concept had been taken up it was within a policy practice hard to distinguish from the pre-existing punitive ‘welfare to work’ approach.  Now I see NZ academics ridiculing the McClure claims of NZ world leadership with Michael Fletcher, for example, in The Conversation (9\3\15), warning ‘Australia to think twice before adopting the New Zealand Model’.

This NZ blunder could never have occurred if the authors had even an undergraduate familiarity with the social investment literature.   The international transition from the welfare state to the social investment state goes all the way back to the turn of the century and the work of people like Giddens, Esping Andersen, Hemerijck and others.  This international experience is set out in Towards a Social Investment Welfare State? edited by Nathalie Morel and others (2012) showing clearly that the narrow identification of investment with ‘welfare to work’ as in New Zealand was a very early stage in this policy development soon superseded in most countries.

But the Report’s invincible ignorance of the research literature even embraces the Australian experience.  The transition to social investment thinking here was underway in the early noughties in the work of agencies like the Federal Treasury, the Cape York Institute, The Brotherhood of St Laurence and the Melbourne Institute. In ‘Social Investment after Neoliberalism: Policy Paradigms and Political Platforms’ Deeming and I (2015, Journal of Social Policy) follow through the implementation of the social investment paradigm under the Rudd and Gillard governments adjudging it a ‘lite’ rather than ‘heavy’ version by international comparison.  For the Report to announce the beginning of an investment approach in Australia can only mean authors with little or no background in social policy research.

Even while the Report rouses grave misgivings in terms of its research capacity, if we think of it as a political document it does stand out as a welcome statement of the Conservative side of politics finally making the transition to the positive reappraisal of welfare as investment.  Of special note is the discussion of who is responsible for employment creation?  Til now, ‘welfare to work’ was more or less premised on the fact of unemployment being the responsibility of the individual.  This McClure report actually asks where the jobs are going to come from?  It points to G20 agreements on employment creation which set out government’s positive role. Cynics of course will ask how this gels with other arms of policy which insist on a 5% unemployment rate to keep inflation in check, but it does begin to make government once again a part of the mutual obligation necessary if we are to have growth that actually offers economic participation to all who want it.

All of this fits nicely with the idea of Inclusive Growth which I have explored with John Buchanan and others (see Inclusive Growth in Australia 2013).  This idea is a significant step beyond ‘social investment’ and more or less frames current social policy thinking at the OECD and World Bank; but of which the McClure Report authors were apparently oblivious.

All in all The Report should tell Minister Morrison that his Department is lacking in the research capacity needed to ‘upgrade’ welfare policy debate in the Australian community.  To me it is no surprise.  As an advocate of the social inclusion agenda I was frankly amazed when the Rudd government adopted it to discover there were scarcely any public servants who had any idea of what the term meant. The situation was entirely aggravated by the public service policy of circulating ‘generic managers’, meaning people being placed in social policy leadership roles with no expertise in policy content.  No wonder the agenda floundered.

It is inconceivable that economic policy would be handled in the same way.  Heads of Treasury for example command respect among the academic, business, union and wider community because of their eminent expertise.  A semi independent Productivity Commission is well resourced to secure well informed policy opinion to elevate public debate.  These are the kinds of capacity Minister Morrison will need to build if he wants social policy advice and debate of comparable quality.