[Music]
good afternoon some time ago I read the
American writer Robert Benchley who
remarked that the world can be divided
into two sorts of people those who
divide the world into two sorts of
people and those who don’t there’s a lot
of stereotypes around about all sorts of
different things but in Australia
recently some of those common
stereotypes have been about our welfare
state so what do I mean by the welfare
state the welfare state is all of the
programs and policies that we have to
protect people at different stages of
their lives so they include things like
hospitals and Medicare services for the
frail aged services for people with
disability and a wide range of Social
Security payments so Age Pensions
disability pensions payments for carers
and parents payments for children and
also payments for the unemployed now
some of those programs are very popular
but when you add them all up they
account for more than half of what all
levels of government spend in Australia
so they’re the biggest set of items that
the government provides and as a result
they also account for about half of all
the taxes we pay as I said some of those
programs are very popular but some are
less popular so we all like Medicare and
most of us seem to be in favor of Age
Pensions
but in particular payments for the
unemployed and payments for people with
disability and some of the other
payments we often see them as them this
is us now in different countries
different people have described to them
and us in different ways in the United
Kingdom media have talked about strivers
versus sky vers some politicians in the
United States have spoken about makers
vs. takers it’s interesting they like to
rhyme in both those places in Australia
we’ve often had debate about lifters
versus leaners and also about tax payers
versus beneficiaries it’s the idea that
the
can be divided into two sorts of people
into the essentially the worthy and the
unworthy a lot of this is based on a
misunderstanding of both the purposes of
these social programs and how they’re
actually distributed as I said we often
have a lot of stereotyping of people who
are unemployed the most common
stereotype is that they’re not actually
looking for work
there’s also people on Disability
Support pension and one of the most
common stereotypes is that actually
they’re not really people with
disability one of the most amazing front
pages of a on a newspaper in the
Australian newspaper in 2014 at
beginning of 2014 this was the literally
the front page picture which compared to
images of a queue of young people on the
left-hand side and a pretty iconic
picture for those of us who above a
certain age of a wounded soldier being
helped in New Guinea and basically it
pointed out that in New South Wales in
2014 the number of people who are on a
Disability Support pension was nearly
the same as the number of people injured
in the Second World War now
statistically this is actually sort of
like comparing apples and pineapples
it’s it’s not a valid comparison I won’t
go into too why particularly but I’m
having to talk to people about it later
but the the main thing is is that well
what happened afterwards is the press
council Krita certainly had an adverse
judgment against that against the
newspaper not on the ground of
statistical sloppiness but on the
grounds of not being an accurate
depiction of what was happening in many
people’s lives the other thing I’m not
sure you’ll be surprised if I point out
that the people on the left-hand side of
this picture are not actually Disability
Support pension errs in New South Wales
they’re not actually in Australia it’s
the picture of Swedish University
students but for the purposes of the
comparison it’s the editors of the news
but why do we have welfare provisions
including Disability Support pension now
there are a number of reasons for
welfare I’m going to talk mainly about
the first two there’s the life course
it’s been referred to earlier today
there are risks that people have in
their lives social programs are also
actually an important aspect of economic
management and of course they’re also
about reducing poverty and inequality
now everyone in this room and in fact
everyone in the world and indeed
everyone who ever lived has at least one
thing in common we all started off life
in the same way we all started off life
in a situation of complete vulnerability
we’re all for quite a number of years
dependent on our parents and for most of
us not for all of us our lives also also
end in vulnerability so at the beginning
of our lives and at the end of our lives
we have these pretty predictable periods
when we’re going to need the support of
other people the length of time that
people need support security in
childhood has has increased over time as
we’ve as young people spend more time in
school and education and of course lots
of people are living longer it’s one of
the great achievements of the 20th
century but more people were living to
become frail frail elderly now these
these life course the life course is is
predictable as I said we know in advance
that we’re going to have these periods
of predictability but what’s
unpredictable are risks now
risks have been around again since the
beginning of human history so we have
natural risks and we’ve seen some we
have them today so like hurricanes and
cyclones tropical storms earthquakes
fires floods and famines so so natural
risks have been a part of human life
since we since before we formed
societies but in addition as we
industrialized particularly
the 19th century onwards we created new
risks our societies became a lot richer
but they also had new risks as we built
factories there was always a risk of
being injured on a farm but we created
the risks of being injured in the
factory we also created unemployment
unemployment exists when we have
advanced labour markets when we have
people who as most of us do and has just
been discussed we spend most of our
lives well a lot of our working lives in
paid work what so we have these new
risks and in fact over the course of the
19th century different societies as they
got richer developed mechanisms to deal
with those risks so the 8-hour a day as
we that has just been referred to the
eight-hour day was basically invented in
Australia in the 1850s we were the first
jurisdiction to to have the eight-hour
day and over the course of the 19th
century old-age pensions were introduced
first in parts of Europe but Victoria
and New South Wales and New Zealand were
were also pioneers so we developed these
mechanisms to deal with them to deal
with risks now what what we also have as
I as I said is the life course if we
look at the distribution of spending
across the life course these are
estimates by people who at the time and
they did it were at the ANU but are now
at the University of Melbourne this is
an estimate of social spending by years
of age it’s not in total how much gets
spent it’s the average amount per person
so you can see that it starts off with a
bump in the early years mainly because
we have childcare we have primary school
and secondary school and then
universities and tapes and then it’s
flat over the course of most people’s
working lives but it starts to increase
significantly after the age of 65 now on
average on average
if you’re a hundred years or over we’re
spending about $75,000 a year per person
aged 100 years and over there only about
three and a half thousand people over
the age of hundred years in Australia
but we’re spending about significant
numbers on people under the age of one
they’re about three hundred thousand
people babies before the age of one
so in fact we spend a lot more at early
ages than we do at older ages but that’s
going to change over time as the
population ages now if you did a chart
of taxes by age what you’d find is the
opposite of this you’d find that we pay
taxes during our working lives and
obviously children and people over 65
people over 65 don’t pay as all that
much in income tax but they pay GST but
of course the important thing is that
children grow up and when they get jobs
become taxpayers and people over the age
of 65 also used to be taxpayers during
their working lives now as I said there
are a range of risks there a range of
risks that just as we need to look at
the distribution of spending across the
life course to understand the nature of
risks we need to look at what happens
over time and we need to follow people
through time in order to assess the
likelihood of risks that this is a
series of snapshots of a boy and a young
man from the age of six to 17 those of
you have seen the movie boyhood will
know this is in fact is a is a series of
stills from that movie this is actually
the same person who was filmed over 12
years so he was an actor but they kept
coming back to a media by a year and to
make the movie so there are certain
sorts of statistics that essentially are
movies so in Australia we have a survey
since 2001
that’s called Hilda it’s the household
income and labor dynamics in Australia
survey and what it’s done is it’s
followed people in
about 7,000 households every year since
2001 every year it goes back to these
people when it asks them about their
income it ask them about their earnings
their hours of work it asked them about
their health last thing about their
wealth and a whole range of other things
so if you were 25 year old at the start
of the survey you’d now be over 40 if
you’re a 50 year old you’d probably now
be receiving an age pension now when you
follow people over time you get a very
powerful picture of what happens in
people’s lives now when you do that you
find as you follow people over time the
there’s some good news and there some
bad news
first the bad news everything that can
go wrong in people’s lives is more
common than we think over time the good
news is it’s less intense and we think
it doesn’t last as long now what happens
is that people experience periods of
illness or injury they experience
unemployment in Hilda if you were over
the first ten years something like 40%
of individuals experience a serious
illness or injury and about two-thirds
of house people also have a member of
their immediate family or a close friend
who experiences a serious illness or
injury when you look at the labor market
you find that the risks are even more
common we often think about the
unemployment rate the number of people
who are unemployed each month at the
moments between 700,000 and 800,000 but
over the course of a year there’s
something like about 2 million people in
Australia who experience a period of
unemployment there’s about 4 million
people who have a change in their labour
market status either they move from
part-time work to full-time work or vice
versa
or from unemployment or to employment or
vice versa
now when people’s in circumstances
change their incomes change and that’s
when the Social Security system comes in
now again when you look at the Social
Security system what you find is that
over time you get a very different
picture of how many people are affected
by Social Security so if you look at the
hand side of this chart in the if you
take the the number of people who on the
30th of June receiving a Social Security
payment in 2015
amongst working age people that below
the age of 65 it was about one person in
six over the course of a year about one
in three households have somebody
contained somebody who were receiving a
Social Security payment now Hilda as I
said has been going for about 16 years
in the first nine years of the survey
two-thirds of households in Australia
included somebody who received a Social
Security benefit at some stage this is
an age pensions and it’s not family
payments it’s unemployment payments
youth payments disability payments and
carers payments the most recent survey
came out earlier this year and follows
people over the first 15 years and you
can see that percentage goes up to about
70 percent so the longer this survey
goes on the more common this is going to
be now the reason is as I said is that
things change in people’s lives
now the stereotype we have of people on
welfare is that their long-term welfare
dependent they’re them what you can see
is if you if you look at this this
survey the proportion of people who
stayed on welfare and got virtually all
of their income for nine years is 1.2
percent of the population so between the
the two-thirds or with a seventy percent
who pass through and the 1.2 percent who
stay on welfare for a very long period
of time there’s enormous ly complicated
patterns which have to do with the
enormous Lea complicated patterns of
people’s lives now what that means is
that the idea of them and us is in fact
we’re all them right you know this is
going to happen to the vast majority of
us over our working lives the America
that over our whole lives the the
American economist and he won a Nobel
Prize for economics Paul Krugman
described the American government as an
insurance company with an army on the
side that essentially is what most
modern
States are insurance companies with an
army on the side the reason why we need
to move beyond the myth of them and us
is that actually we’re all in the same
boat we’re all in this together
[Applause]
good afternoon some time ago I read the
American writer Robert Benchley who
remarked that the world can be divided
into two sorts of people those who
divide the world into two sorts of
people and those who don’t there’s a lot
of stereotypes around about all sorts of
different things but in Australia
recently some of those common
stereotypes have been about our welfare
state so what do I mean by the welfare
state the welfare state is all of the
programs and policies that we have to
protect people at different stages of
their lives so they include things like
hospitals and Medicare services for the
frail aged services for people with
disability and a wide range of Social
Security payments so Age Pensions
disability pensions payments for carers
and parents payments for children and
also payments for the unemployed now
some of those programs are very popular
but when you add them all up they
account for more than half of what all
levels of government spend in Australia
so they’re the biggest set of items that
the government provides and as a result
they also account for about half of all
the taxes we pay as I said some of those
programs are very popular but some are
less popular so we all like Medicare and
most of us seem to be in favor of Age
Pensions
but in particular payments for the
unemployed and payments for people with
disability and some of the other
payments we often see them as them this
is us now in different countries
different people have described to them
and us in different ways in the United
Kingdom media have talked about strivers
versus sky vers some politicians in the
United States have spoken about makers
vs. takers it’s interesting they like to
rhyme in both those places in Australia
we’ve often had debate about lifters
versus leaners and also about tax payers
versus beneficiaries it’s the idea that
the
can be divided into two sorts of people
into the essentially the worthy and the
unworthy a lot of this is based on a
misunderstanding of both the purposes of
these social programs and how they’re
actually distributed as I said we often
have a lot of stereotyping of people who
are unemployed the most common
stereotype is that they’re not actually
looking for work
there’s also people on Disability
Support pension and one of the most
common stereotypes is that actually
they’re not really people with
disability one of the most amazing front
pages of a on a newspaper in the
Australian newspaper in 2014 at
beginning of 2014 this was the literally
the front page picture which compared to
images of a queue of young people on the
left-hand side and a pretty iconic
picture for those of us who above a
certain age of a wounded soldier being
helped in New Guinea and basically it
pointed out that in New South Wales in
2014 the number of people who are on a
Disability Support pension was nearly
the same as the number of people injured
in the Second World War now
statistically this is actually sort of
like comparing apples and pineapples
it’s it’s not a valid comparison I won’t
go into too why particularly but I’m
having to talk to people about it later
but the the main thing is is that well
what happened afterwards is the press
council Krita certainly had an adverse
judgment against that against the
newspaper not on the ground of
statistical sloppiness but on the
grounds of not being an accurate
depiction of what was happening in many
people’s lives the other thing I’m not
sure you’ll be surprised if I point out
that the people on the left-hand side of
this picture are not actually Disability
Support pension errs in New South Wales
they’re not actually in Australia it’s
the picture of Swedish University
students but for the purposes of the
comparison it’s the editors of the news
but why do we have welfare provisions
including Disability Support pension now
there are a number of reasons for
welfare I’m going to talk mainly about
the first two there’s the life course
it’s been referred to earlier today
there are risks that people have in
their lives social programs are also
actually an important aspect of economic
management and of course they’re also
about reducing poverty and inequality
now everyone in this room and in fact
everyone in the world and indeed
everyone who ever lived has at least one
thing in common we all started off life
in the same way we all started off life
in a situation of complete vulnerability
we’re all for quite a number of years
dependent on our parents and for most of
us not for all of us our lives also also
end in vulnerability so at the beginning
of our lives and at the end of our lives
we have these pretty predictable periods
when we’re going to need the support of
other people the length of time that
people need support security in
childhood has has increased over time as
we’ve as young people spend more time in
school and education and of course lots
of people are living longer it’s one of
the great achievements of the 20th
century but more people were living to
become frail frail elderly now these
these life course the life course is is
predictable as I said we know in advance
that we’re going to have these periods
of predictability but what’s
unpredictable are risks now
risks have been around again since the
beginning of human history so we have
natural risks and we’ve seen some we
have them today so like hurricanes and
cyclones tropical storms earthquakes
fires floods and famines so so natural
risks have been a part of human life
since we since before we formed
societies but in addition as we
industrialized particularly
the 19th century onwards we created new
risks our societies became a lot richer
but they also had new risks as we built
factories there was always a risk of
being injured on a farm but we created
the risks of being injured in the
factory we also created unemployment
unemployment exists when we have
advanced labour markets when we have
people who as most of us do and has just
been discussed we spend most of our
lives well a lot of our working lives in
paid work what so we have these new
risks and in fact over the course of the
19th century different societies as they
got richer developed mechanisms to deal
with those risks so the 8-hour a day as
we that has just been referred to the
eight-hour day was basically invented in
Australia in the 1850s we were the first
jurisdiction to to have the eight-hour
day and over the course of the 19th
century old-age pensions were introduced
first in parts of Europe but Victoria
and New South Wales and New Zealand were
were also pioneers so we developed these
mechanisms to deal with them to deal
with risks now what what we also have as
I as I said is the life course if we
look at the distribution of spending
across the life course these are
estimates by people who at the time and
they did it were at the ANU but are now
at the University of Melbourne this is
an estimate of social spending by years
of age it’s not in total how much gets
spent it’s the average amount per person
so you can see that it starts off with a
bump in the early years mainly because
we have childcare we have primary school
and secondary school and then
universities and tapes and then it’s
flat over the course of most people’s
working lives but it starts to increase
significantly after the age of 65 now on
average on average
if you’re a hundred years or over we’re
spending about $75,000 a year per person
aged 100 years and over there only about
three and a half thousand people over
the age of hundred years in Australia
but we’re spending about significant
numbers on people under the age of one
they’re about three hundred thousand
people babies before the age of one
so in fact we spend a lot more at early
ages than we do at older ages but that’s
going to change over time as the
population ages now if you did a chart
of taxes by age what you’d find is the
opposite of this you’d find that we pay
taxes during our working lives and
obviously children and people over 65
people over 65 don’t pay as all that
much in income tax but they pay GST but
of course the important thing is that
children grow up and when they get jobs
become taxpayers and people over the age
of 65 also used to be taxpayers during
their working lives now as I said there
are a range of risks there a range of
risks that just as we need to look at
the distribution of spending across the
life course to understand the nature of
risks we need to look at what happens
over time and we need to follow people
through time in order to assess the
likelihood of risks that this is a
series of snapshots of a boy and a young
man from the age of six to 17 those of
you have seen the movie boyhood will
know this is in fact is a is a series of
stills from that movie this is actually
the same person who was filmed over 12
years so he was an actor but they kept
coming back to a media by a year and to
make the movie so there are certain
sorts of statistics that essentially are
movies so in Australia we have a survey
since 2001
that’s called Hilda it’s the household
income and labor dynamics in Australia
survey and what it’s done is it’s
followed people in
about 7,000 households every year since
2001 every year it goes back to these
people when it asks them about their
income it ask them about their earnings
their hours of work it asked them about
their health last thing about their
wealth and a whole range of other things
so if you were 25 year old at the start
of the survey you’d now be over 40 if
you’re a 50 year old you’d probably now
be receiving an age pension now when you
follow people over time you get a very
powerful picture of what happens in
people’s lives now when you do that you
find as you follow people over time the
there’s some good news and there some
bad news
first the bad news everything that can
go wrong in people’s lives is more
common than we think over time the good
news is it’s less intense and we think
it doesn’t last as long now what happens
is that people experience periods of
illness or injury they experience
unemployment in Hilda if you were over
the first ten years something like 40%
of individuals experience a serious
illness or injury and about two-thirds
of house people also have a member of
their immediate family or a close friend
who experiences a serious illness or
injury when you look at the labor market
you find that the risks are even more
common we often think about the
unemployment rate the number of people
who are unemployed each month at the
moments between 700,000 and 800,000 but
over the course of a year there’s
something like about 2 million people in
Australia who experience a period of
unemployment there’s about 4 million
people who have a change in their labour
market status either they move from
part-time work to full-time work or vice
versa
or from unemployment or to employment or
vice versa
now when people’s in circumstances
change their incomes change and that’s
when the Social Security system comes in
now again when you look at the Social
Security system what you find is that
over time you get a very different
picture of how many people are affected
by Social Security so if you look at the
hand side of this chart in the if you
take the the number of people who on the
30th of June receiving a Social Security
payment in 2015
amongst working age people that below
the age of 65 it was about one person in
six over the course of a year about one
in three households have somebody
contained somebody who were receiving a
Social Security payment now Hilda as I
said has been going for about 16 years
in the first nine years of the survey
two-thirds of households in Australia
included somebody who received a Social
Security benefit at some stage this is
an age pensions and it’s not family
payments it’s unemployment payments
youth payments disability payments and
carers payments the most recent survey
came out earlier this year and follows
people over the first 15 years and you
can see that percentage goes up to about
70 percent so the longer this survey
goes on the more common this is going to
be now the reason is as I said is that
things change in people’s lives
now the stereotype we have of people on
welfare is that their long-term welfare
dependent they’re them what you can see
is if you if you look at this this
survey the proportion of people who
stayed on welfare and got virtually all
of their income for nine years is 1.2
percent of the population so between the
the two-thirds or with a seventy percent
who pass through and the 1.2 percent who
stay on welfare for a very long period
of time there’s enormous ly complicated
patterns which have to do with the
enormous Lea complicated patterns of
people’s lives now what that means is
that the idea of them and us is in fact
we’re all them right you know this is
going to happen to the vast majority of
us over our working lives the America
that over our whole lives the the
American economist and he won a Nobel
Prize for economics Paul Krugman
described the American government as an
insurance company with an army on the
side that essentially is what most
modern
States are insurance companies with an
army on the side the reason why we need
to move beyond the myth of them and us
is that actually we’re all in the same
boat we’re all in this together
[Applause]
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