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Focus question 4: What responsibilities do individuals, communities and governments have for the welfare of Australian citizens?

Teaching and learning activities

Activity 1: Income distribution ESL Activity 1
Activity 2: Social security - different kinds ESL Activity 2
Activity 3: What are the government's responsibilities? ESL Activity 3
Activity 4: An international comparison ESL Activity 4
Activity 5: Budget simulation ESL Activity 5
Activity 6: Debate ESL Activity 6

Activity 1: Income distribution

Many people say that Australians have a strong belief in the equality of people, but Australians are anything but equal in income and wealth. One per cent owns about 25 per cent of Australia's personal wealth; the wealthiest 10 per cent of people own 60 per cent of the total wealth. At the other end of the scale, nearly two million of Australia's 18.5 million people live at or below the 'poverty line' and have difficulty meeting what Australians regard as a minimum standard of living.

1a Look at Table 11 and answer the following questions:

  • On average, how much more per week do the highest 20 per cent earn than the lowest 20 per cent? Work out what percentage of the average weekly income of the highest income group is earnt by the lowest income group.
  • What sort of 'units' are in the highest earning category? In the lowest category? Remembering that 20 per cent is one-fifth of the population, what sort of people might make up the nearly 90 per cent of 'one person' in the lowest category?
  • Where do the highest earning 20 per cent get most of their income from? The lowest 20 per cent? What might 'Other' mean in the section 'Main source of income'?

Table 11 The distribution of income among Australians, 1995-96

  lowest 20% highest 20%
Average total weekly income ($) 117 1469
Main source of income (% of total population)    
Salary earners
. 3
. 0
Own business
. 7
. 3
Government pensions and allowances
. 3
. 1
. 9
. 6
Income 'units' (% of total population)    
Couple with dependent children
. 8
. 2
Couple without dependent children
. 5
. 3
One parent
. 1
. 6
One person
. 6
. 0

Source of data: Australian Bureau of Statistics 1998, 1998 Year Book Australia, cat. no. 1301.0, AGPS, Canberra p 227.

1b Discuss as a class:

  • Is the situation in Australia fair?
  • If so, why? If the differences were more extreme, would that make it unfair? In other words, is it a question of degree or doesn't the idea of fairness apply to personal wealth?
  • If not, what would you do to change it? Would you increase taxes on the wealthy? Would you spend more on education and training to provide extra opportunities so that anyone with ability can reach the highest-paid jobs? Would you spend money on creating jobs (which may also mean increasing taxes)?

Activity 2: Social security - different kinds

Australia's social welfare history

Social welfare means providing assistance (usually money) to people who are disadvantaged for a variety of reasons, for example because they are sick, disabled, unemployed, or otherwise find it difficult to earn a living.

Before 1900 most social welfare came from non-government sources such as churches and private organisations set up to help particular groups, especially women and children in difficult circumstances. Governments provided some help to people such as orphans and deserted children, widows with big families, people who were crippled or old people who were unable to get out of bed (often referred to as 'the deserving poor'). Governments also provided schools and hospitals, which can be considered a form of social welfare.

A century ago reformers argued that because old people had contributed to the economy over their working life, if they had little money they should be supported by the government. The Commonwealth Government established an age pension in 1908, meaning that if you were over a certain age and were not wealthy, you had a right to government financial assistance.

Since that time the range of types of social welfare has increased dramatically. Table 12 lists the dates at which various new types of government allowances were introduced.

Table 12 Commonwealth Government allowances

Year  Social welfare program introduced by the Commonwealth Government
1908 Age pension
1910 Invalid pension
1912 Maternity allowance
1941 Family allowance
1942 Widow's pension
1943 Funeral benefit
1945 Unemployment benefit
1945 Sickness benefit
1948 Rehabilitation allowances
1974 Handicapped child's allowance
1975 Medical insurance ('Medibank')
1983 Family income supplement
1985 Carer's pension
1987 Austudy

2a Make your own list of the years when the welfare programs were introduced and write down the types of people the services were intended to help.

2b To explain the reasons for each program, put a 'D' for 'disability', 'H' for 'health', 'A' for 'age', 'F' for 'support to families' and 'U' for 'unemployed'. There can be more than one reason per program.

2c In a paragraph, summarise why the government provides financial welfare support. Think about the difference between helping people who have problems that they can't do anything about, such as disabilities or injuries, and helping people in areas which the government wants to support, like having a secure family life.

Activity 3: What are the government's responsibilities?

3a There are risks we all experience in life. Should we rely on the government to protect us against them. Copy the list below and mark next to each item:

  • an 'A' if this has affected someone in your family in the last five years
  • an 'H', an 'M' or an 'L' according to whether you think there is a 'high', 'medium' or 'low' risk of this happening to you some time during your life
  • an 'I' if you think it is an individual's responsibility to manage this situation and a 'G' if you think it is the responsibility of the government to bear the main cost.

- Needing health care
- Having a disability
- Not being able to pay the rent or house repayments
- Having no income after turning 65 years of age
- Losing your home, business or farm because you can't pay back to the bank the amount you borrowed to set it up
- Having limited skills
- Not being able to find work
- A family partner dying
- Not being able to speak English

3b In small groups of three or four, compare your lists, particularly the 'I' and 'G' ratings. Explain to the other members of your group why you made your decisions. What do you agree and disagree about?

3c Discuss the following situations.

  • Thanh knows that smoking increases the risk of illness. Should he (and all smokers) have to pay more for health insurance or not be allowed to have health insurance?
  • Knowing that the age pension would be available on retirement, Joe spent a lot of his savings travelling before he turned 65. Should he still be eligible to receive the pension?
  • Sara is unemployed and looking for work. There are jobs available in another part of the State, but her mother is sick and needs help. Should Sara be eligible to receive the unemployment benefit ['dole']?
  • Steve and his family can't meet the payments on their house. Steve gambles and has recently lost a lot of money. His family will suffer if they are tossed out of their house. Should the government meet the payments?
  • Henry and Maria have eight children. Henry works when he can but he has a bad back. Maria doesn't work. The government provides financial support through the Family Allowance Scheme. Should Henry and Maria get extra support because of the size of their family?
  • Rena and Michael are struggling to make ends meet. Michael has a full-time job and when he can, he works overtime. Rena and Michael both believe that Rena should stay home to look after their three children because they think that is best for the whole family. But most other families in their street are getting by because both parents work. Should the government provide help which will enable Rena to stay home and the family to live more easily?

3d Review your ratings for the list in 3a before writing a paragraph that makes clear what you think the government's responsibilities are in relation to supporting people at risk.

Activity 4: An international comparison

Social welfare or social security?

Social welfare can be targeted at those in need or be an entitlement for everyone. In Australia, welfare is targeted.

An academic from Norway who visited Australia some time ago said that she thought that in Australia, welfare was 'handed out' to people who were 'under pressure':

Refer to pages 160-1 of Commonwealth of Australia 1998, Discovering Democracy Middle Secondary Units, Curriculum Corporation, Melbourne.

4a In Australia:

  • Medicare pays for a proportion of some health-care costs, but not all of them.
  • Unemployed people are not eligible for government support from the first day of their unemployment. The payment they eventually receive is not related to their previous income.
  • Payment of the aged pension is based not only on age but also on how wealthy a person is.

Compare the situation in Australia with that in Norway. Discuss whether the differences are 'good' or 'bad'. What do they suggest about the ideas behind providing government support?

4b In your workbook answer these questions:

  • What do you think the Norwegian visitor meant when she said 'welfare can be used as a glue to make the nation work'?
  • Do you think welfare is used in this way in Australia?

Limits to welfare

Government welfare can be limited because public attitudes are in favour of people managing by themselves or by being helped by other people in their communities, or because there isn't enough money to pay for welfare programs. (There are poor countries in the world that have no welfare programs at all.) Often public attitudes and the amount of money a government has to spend go together: richer people decide they are being taxed too heavily and put pressure on the government to reduce spending.

At the time of the Norwegian academic's visit to Australia, Norwegian levels of income tax were similar to those in Australia, but there were also substantial indirect taxes such as sales taxes which increase the cost of living. Other Norwegian taxes to help with social security payments are raised through taxation of foreign companies that use Norwegian mining and other resources to make profits.

But at some point, it is probable that a welfare system which supports all people in need will become a burden on the taxpayer, and cause the potential for high levels of government debt to be repaid by citizens in the future. How do we decide where this point is?

In 1966, about 11 per cent of Australian adults relied on social security payments for their income. By 1990, this figure had grown to approximately 20 per cent. As at 1996-97, social security was receiving more than one-third of the money allocated in the federal Budget, approximately $50 billion in 1996-97.

For most of the last 30 years, the Commonwealth Government has been in deficit, meaning that it has spent more than it receives in revenue (income). All government programs have to be paid for out of revenue, 90 per cent of which comes from taxes. Therefore, any demand for the government to introduce or pay more to a program also creates a demand for more money to finance that program.

Activity 5: Budget simulation

The graphs below show where the Commonwealth Government got its income from and how it spent it in 1996-97.

1996-97 Budget revenue

1996-7 Budget revenue

1996-97 Budget outlays

1996-7 Budget outlays

Parry, G and Kemp, S 1997, Exploring Macroeconomics, 4th edn, Tactic Publications, South Perth, p 185.

5a Read the graphs carefully. In your workbook, list the three main forms of income ('revenue') and the three main types of expenditure ('outlays').

5b Imagine you are the Commonwealth Treasurer. You have the responsibility for deciding how the government will spend its money. Read the situations below and make your decisions:

  • Your government is thinking about increasing the rate of the unemployment benefit. Where will you get the money from? What will the consequences be?
  • There is also a group in your government that believes that the unemployment benefit should be cut back, and that more money should be put into education and training opportunities. What is your view on that issue? Why?
  • Law and order is an issue in the community. People want more police and tougher sentencing, but you realise that if this happens you will also need to build and run more gaols - an expensive business. The people you have spoken to say that the money must come from welfare spending, because a peaceful and law-abiding community is a welfare issue. What might you cut back to meet these demands? Would you do so?

Parliament 5c Use the Budget simulation on the Parliament at Work CD ROM, where you play the role of the Treasurer in developing a Budget.

5d After you have finished, write in your workbook the main types of decisions that you had to make in this activity.

Activity 6: Debate

Debate the topic: 'A country should be judged by how well it cares for its least well-off'.

ESL activities

Back to 'What Sort of Nation? - At a glance'

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