Monday, 18 April 2011

Middle class welfare coming to an end in Australia?

I have never really understood some citizens of the United States and its governments opposition to a balanced welfare system, where the out of work get enough money to live on till they find another job and people who need health care will have it provided to them free of charge. But today I find myself somewhat understanding their sentiments, while I don't agree with their perception of a welfare system what I do agree on is the fact that people who don't need welfare payments shouldn't have them. But I digress this particular piece isn't about the welfare system of the United States that's a whole nother story, this particular article is about the beginning of the fall of middle class welfare in Australia.

Largely thanks to the current economic climate both domestically and internationally the Australian government is rethinking the welfare system in an effort to save money and balance the budget. Of course proponents of stronger conditions for welfare payment recipients are applauding the governments efforts, I however have quite mixed thoughts on the issue. On one hand there are average Joe's just scraping by on the quite frankly pittance they receive from the government which currently stands at $237.45 per week but on the other hand the government is considering taking away the up to $7500 per child, child care rebate from couples earning over $150,000 per year.

To give those unfamiliar with Australian rent and food prices a bit more perspective the median rent for Melbourne (Australia's second largest city) is $360 per week, so even if a recently unemployed person moved in with a friend in the average Melbourne residence they would still only have $115.65 per week to live on after government payments for proving assistance with rental expenses. Simply put not enough for an individual to live off of especially if they have previous financial commitments like loans or contracts for services for example a mobile phone plan.

Now for the scary part, families in Australia are claiming up to $7500 per child regardless of whether their income is $30,000 per year or $300,000 per year. I am all for families being compensated in some way for their child car expenses especially considering they are not tax deductible, but to give every family with a child in care in Australia such a large sum of money irrespective of income is fiscal insanity. The most shocking thing about this issue is the backlash from these families who are allegedly struggling to make ends meet. For example a family with 2 children living in one of Australia's wealthiest suburbs were complaining about not being able to renovate their house if the rebate is taken away, I'm sorry but if your earning $190,000 a year you should be able to afford to renovate your house and then some.

I know this is quite a departure from my usual "big picture" articles but it really gets up my nose the way people who are for all intensive purposes rich complaining about not getting government handouts while the average unemployed Australian struggles to get by. It seems I have come full circle, while I understand the opposition to the welfare state from some parts of American politics, I much more strongly identify with those who believe in proving help for the needy and not subsidising the lifestyles of the wealthy.

1 comment:

  1. Nice blog and good points. But you've only scraped the surface of middle class welfare in Australia. Seriously.

    My gut feeling is that a complete overhaul of the taxation and welfare system is required. And the best proposal I have seen is from the liberal democratic party (I'm not a supporter or member, just happened upon their tax policy once).

    It addresses the pressing problems of middle class welfare and the problem of high marginal tax rates.

    Read it here

    Keep up the blogging and I hope that link is of interest.