During the coronavirus pandemic, with mandated business shutdowns and stay-at-home orders, government welfare programs have been ramped up.
In Australia, the Newstart unemployment benefit has been doubled and renamed the JobSeeker allowance which 1.4 million Australians are receiving. A wage subsidy called JobKeeper has also been introduced to help businesses keep stood-down employees in jobs, with 835,000 businesses and 5.5 million workers enrolled.
Federal Treasurer Josh Frydenberg on Tuesday gave a grim economic and budget update. This year’s federal deficit is projected to be $100 billion, the largest on record. Economic growth is projected to contract 10% during the June financial quarter. Close to 600,000 Australians have become jobless during the month of April. Before the pandemic, Frydenberg was intending to deliver a budget surplus on that day.
Now is the time to remember the dangers of government welfare as we emerge from this pandemic. Governments have a long history of implementing flawed social welfare policies. For example, some stood-down workers are ineligbile for JobKeeper while some workers who are eligible receive more money from the scheme than they did when they were working.
No government intervention can end poverty or build an economy. Historically for the enormous sums spent on social welfare, the rate of poverty does not decrease and the colossal volume of programs deliver very little.
In Australia, the top 1% of earners pay approximately 40% of the total national income tax. Governments are spending a lot on welfare (37% of GDP) despite the Guardian and the ABC saying we need more social welfare spending. Those still in business and employment during the pandemic are keeping the government and public servants on full salaries.
The spruikers for egalitarianism should know that if you were to divide the world’s entire wealth between everyone, each person would receive $US 20,000. Australia has a colossal system of charities, organizations, therapies, and so on.
Welfare invites citizens to rely on the state for their every financial need. Then their own volition deteriorates. As welfare benefits and the systems working within it expand, they serve as a substitute for working. Rolling back JobKeeper and JobSeeker payments will be a monumental national challenge by itself.
Welfare and Children
The theory goes that welfare reduces poverty, and so increasing welfare will increase children’s lifetime well-being and success. Untrue. Higher welfare payments do not help children at all; they actually increase dependence which has disastrous results on children’s development.
Divorce has gone hand-in-hand with welfare benefits and has a very negative effect on children’s development and their later behaviour as adults. The destruction of marriages and increase in the number of children raised in single parent households has led to higher levels of behavioural and emotional problems, a tripling in the level of teen sexual activity, and a dramatic increase in the probability that a boy will engage in criminal behaviour.
There has been a relentless decades-old campaign to increase welfare benefits. Welfare reduces work efforts. It has proven to be very ineffective at raising incomes and reducing poverty. Australia’s welfare system has this flaw as well. The war on poverty has failed miserably here just as it has in the USA and Britain.
No matter what issue, those greedy capitalists take the blame. Despite the mountains of red tape costing about $176 billion per year in Australia and stalling any development and business growth, the Guardian and other socialist supporters will ask for more controls, more regulations, more redistribution, and more taxes.
The state cannot build a society nor a business nor the economy. The state nurtures prosperity when it allows people to become capitalists. We ran the argument of capitalism vs socialism for 100 years and capitalism won. Freeing up our capitalist economy is what will see Australia rise again post-pandemic.
Welfare increases poverty. The evidence of failure is all around us. The welfare state has substituted the father, created a social worker for a caring mother and myriad organisations for voluntary helpers. The policy choices this nation has made under misguided compassion has had huge unintended consequences.
Throwing more money at poverty does nothing to reduce it. It keeps people in a trap of poverty and unfulfilling lives. No results of welfare resemble anything of the promises made by its proponents.
The more loudly the progressives, the activists and the left complain about income inequality and the plight of the poor, the more policies are rolled out making life much more expensive for everyone, especially the middle to lower classes which they wish to help.
Welfare policies always disproportionately hurt working people and make it extremely hard to grow wealth over time. Welfarism is hellish-the cushioned progressives call for it loudest even though their programs are an abysmal failure. Let’s not see Australia repeat the same failed policies going forward.