[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
versus 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 VORs some politicians in the
United States have spoken about makers
versus 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
taxpayers versus beneficiaries it’s the
idea that the
world 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
surrounding newspaper in 2014 at
beginning of 2014 this was the literally
the front page picture which compared
two 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 criticized you had an adverse
judgment against 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 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 a picture
of Swedish University students but
thought the purposes of the comparison
it served the the editors of the news
kayvon 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 of 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 tickity 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
at 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 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 when 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 TAFE s– 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 a hundred years and over there are
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 who 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 and asks them about their
income it ask them about their earnings
their hours of work it asked them about
their health dicen 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 than 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 10 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 two 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 peoples 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
left-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 the 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 state
so 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
versus 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 VORs some politicians in the
United States have spoken about makers
versus 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
taxpayers versus beneficiaries it’s the
idea that the
world 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
surrounding newspaper in 2014 at
beginning of 2014 this was the literally
the front page picture which compared
two 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 criticized you had an adverse
judgment against 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 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 a picture
of Swedish University students but
thought the purposes of the comparison
it served the the editors of the news
kayvon 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 of 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 tickity 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
at 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 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 when 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 TAFE s– 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 a hundred years and over there are
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 who 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 and asks them about their
income it ask them about their earnings
their hours of work it asked them about
their health dicen 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 than 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 10 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 two 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 peoples 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
left-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 the 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 state
so 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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