Tony Abbott's call for “firm but fair” welfare reforms should make us all stop and think about the state of welfare in Australia today. There are indeed too many people excluded from the economic mainstream. The question is, why? Mr Abbott focuses on the supposed role of income support in undermining the incentive to work. His reform pathway relies on tougher compliance regimes.  We would support an emphasis on individuals doing their bit. But today unemployment is essentially a structural problem. Being unemployed is not primarily about the money, it’s about the lack of skills, relevant work experience and often robust health. A new social contract is needed which demands responsibility but also guarantees individuals’ effective access to the support and resources they need to make effective choices about their lives.  

The “tough love” approach is too tied to the negative welfare thinking of the 1990s, when unemployment welfare was seen as at odds with the free market economic agenda. Australia’s distinctive form of welfare protection through the wage system was largely dismantled, social services were deemed to be better off privatised, and commentators were inclined to proclaim the end of welfare as we know it. Social policy shrank to the dimensions of “welfare,” and “reform” became identified with getting people off income support.

But surely this agenda belongs to the past. It didn’t work for the unemployed, and it doesn’t meet the needs of employers for job ready workers. Moreover, this old style thinking underestimates the importance of social investment not only for the economy but for ensuring that growth is inclusive. Around the world, the thinking behind the 1990s paradigm is in decline. The new imperative is what the World Bank calls “inclusive growth.” This is the new social policy approach that Australia sorely needs.

Work for the Dole was the flagship program of the old agenda and the research shows that it actually reduced employment outcomes. The current employment assistance system works reasonable well for the majority of “job ready” unemployed. But it continues to fail highly disadvantaged job seekers, with participants churned through the system, placements in meaningless activities which don’t build job readiness or skills matched to labour needs and high drop-out rates from the labour force. Only a quarter of highly disadvantaged job seekers achieve a positive outcome comprising either full or part-time work or training.

Convinced by the need for a new approach for the long-term unemployed, the Brotherhood of St Laurence has created a new program which it calls the Line of Sight. Working with our clients we saw that overwhelming they are not morally or behaviourally impaired individuals dodging their responsibilities. What they lack is an accessible service which shows them a clear pathway to a decent job via integrated support, work placement and training. What works is not the “big stick” approach but a commitment to connecting disadvantaged jobseekers with decent sustainable work.

We see integrated models as the icons of a new welfare policy and practice in Australia. Through these we can offer excluded people a meaningful investment in a future they value. And this approach will better meet the growing recruitment needs of employers for entry level workers who have the foundational skills to sustain paid work. We are delighted that the Victorian government is making a major new investment in these programs. The British government is also showing the way forward through its new Work Programme, which will invest in disadvantaged job seekers to enable a pathway to sustainable employment. One approach that should be developed is the “off benefits” model, whereby the government uses future savings from reduced income support payments to provide paid real work opportunities directly with employers, who are then assisted  through the delivery of an integrated package of support and foundational training by contracted organisations.  

More generally the emerging political debate points to the need for a social policy paradigm shift in Australia. What we need is a model which better integrates our social and economic goals. Economic growth alone is not enough. It must translate into individual flourishing and social inclusion. International policy agencies from the UN to the EU are adamant today that while growth can be inclusive it won’t be without an appropriate social policy regime. This is the inclusive growth agenda.