Dependent on the government

In the early 1960s, 3% of Australians relied on the government for most of their income. By 1980 that had increased to 14%. And now, despite a decade of strong economic growth and increased employment opportunities, 17.5% of Australians rely on the government for most their income — including 5% of Australians who are apparently disabled and 5% who are carers (mostly single parents).

It is easy to sympathise with the social-democratic desire to protect the most vulnerable. But does anyone really believe that nearly one in five of Australians are vulnerable and can’t look after themselves? That is about 4 million people!

And this massive growth in government dependency has happened at the same time as we’ve seen huge increases in total wealth — where the rich have gotten richer and the poor have gotten richer. And we have also seen a consistent growth in private charity, which should mean that fewer people need government hand-outs.

In a CIS publication being released tomorrow, Eugene Dubossarsky and Stephen Samild address the issue of government dependency. One of their suggestions is that people who “declare dependence” on the government are effectively admitting that they are unable to run their own lives… and consequently it makes little sense to give them a vote which lets them contribute to running other people’s lives.

Dubossarsky & Samild also point to the potentially negative dynamic that comes from having a large percentage of the population dependent on government and voting themselves more hand-outs.

Perhaps this dynamic explains the steady growth of government throughout the developed world. If so, it raises some very difficult questions about how this trend can ever be reversed.

7 thoughts on “Dependent on the government

  1. When you say ‘17.5% of Australians rely on the government for most their income’, I’m assuming you mean welfare as opposed to working for a government department?

    (though some wags might argue its effectively the same thing…)

  2. Perhaps this dynamic explains the steady growth of government throughout the developed world. If so, it raises some very difficult questions about how this trend can ever be reversed.

    John,

    Slighly off topic but this prompted a memory. The author I spoke to you about recently (whose name alluded me at that time) was Ibn Khaldun. Whilst I have only read extracts of his work he was very concerned with the rise and fall of empires and the factors at play.

    http://en.wikipedia.org/wiki/Muqaddimah

    In short empires rise, suck resources to the centre and then collapse because of this.

    Back on topic. Political collapse is one extreme way to reverse the dependency trend.

  3. 17.5% still seems high. Does it include recipients of so-called middle class welfare, or just those whose handouts from the government are more than they pay in tax?

    Interesting theory, but what about the other 82.5% of voters – surely they’re not all going to vote for more handouts as well? I would have thought a fair chunk of them would view the 17.5% as bludgers, spurred on by sensationalist ACA and TT reports.

  4. We’ve discussed restricting votes before. Didn’t seem too popular 🙂 Of course, my arguments were primarily on spending (ie, financial conflict of interest).

    How did you come up with a 17.5% figure? Any references?

  5. Papa — if you include recipients of middle-class welfare then the number is 100%. We all take some sort of welfare benefit from the government, even if it’s just a 30% government subsidy for your healthcare. Even if you just include direct cash payments, the number would be much higher than 17.5%.

    The 17.5% number is just for people who get a significant amount of their net income from the government.

    Scary huh?

    Fleeced — the reference is the document being released today. I haven’t linked it because it’s not online yet. I had a pre-released version because I authored another chapter in the document.

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