From a Wage Earners’ Welfare State to Work-First: Australian Unemployment Policy

The Australian welfare state has historically been characterized by an underlying liberal ideology, minimalist government protection and the importance of wage protection. The Australian liberal ideology, which values individual responsibility and self-sufficiency, is similar in its approach to other liberal welfare regimes (Esping-Andersen, 1990; Saunders 2002; Cooper and Ellem, 2008), like the UK and the US. The Australian welfare state has only a minimum of social policy to cover social risks and many welfare state arrangements are means-tested, including pensions, permanent disability and child care subsidies. Wage protection, whereby social welfare was initially managed through the industrial relations system, was also integral to the Australian welfare state. By providing wage earners with sufficient salary or a ‘social wage’, social protection was ensured through collectively negotiated high wage levels, rather than through social policy. Australia is therefore known as being a ‘wage earners’ welfare state (Castles and Mitchell 1991). While the liberal ideology of the Australian welfare state remains, Australia is no longer a wage earners’ welfare state. Throughout the 1980s and 1990s a path of economic liberalization was followed, shifting the focus to activation (Ramia & Wailes, 2006) and ‘work first’ policies (Carney, 2006). In the contemporary Australian welfare state, anyone who can work is expected to work, and the welfare state is primarily focused on supporting participation efforts (Carney, 2006; Gray & Agllias, 2009; Ramia & Wailes, 2006). Using Australian case study data from research carried out in 2012-2013 (including qualitative interview material from interviews with union experts, document analysis and analyses of occupational welfare arrangements), this paper offers a ‘thick description’ of important changes to collective social risk protection for unemployment in Australia in the analytic sociological tradition. We focus on changes in both the welfare state and industrial relations domains, explaining these changes by looking at union behaviour within the Australian institutional setting. In doing so, this paper provides an empirical base for understanding the shift to a work-first welfare state and the implications of this shift from a global social policy perspective. We find that the total level of protection for unemployment has declined in Australia. Welfare state reforms have changed the obligations of benefit claimants, broadened the scope of who is obliged to meet the ‘activity’ requirements, reduced training possibilities and has possibly increased the chance of ‘creaming’ of clients in a fully privatized job placement market. Unions and collective agreements have offered some indirect compensation through training and redundancy clauses or arrangements in collective agreements, but there is little interplay between welfare state and occupational protection. In Australia, the total level of protection afforded to social risks is increasingly focused on improving labour market participation through workfare-style activation requirements in unemployment. The liberal ideology, characteristic of the Australian welfare state, continues to shape the total level of collective protection, with a focus on flat-rate benefits and minimalist government involvement. The result is a deregulated and partially dualized labour market in which class cleavages remain an important driver of social policy (Deeming, 2013). Collective risk protection is largely individualized (Deeming, 2013; Cooper and Ellem, 2008), with the exception of investments geared towards improving employment, similar to social investment patterns in many European welfare states. The result is limited collective protection geared towards activation and emphasizing individual responsibility. We discuss our findings in comparison to developments in European welfare states in terms of what can be learned from the Australian case.