Mutual Obligations

“Mutual Obligation: Ethical and Social Implications”, is the name of Discussion Paper Number 23 August 2000 published by the Australia Institute and written by Pamela Kinnear.

She manages to summarise her conclusions very well in the executive summary of this document (pp v - vi) and I have reproduced extracts from this below to highlight her presentation as the start of this brief discussion stimulator.

The rhetoric of mutual obligation often uses ethical principles drawn from social contract theory. A close examination of this ethical tradition reveals that it does not apply to welfare programs that aim to help the society’s most disadvantaged. The modem contract theorist John Rawls, argues that individuals incur obligations only when two conditions apply:

1. society’s institutions must be just and
2. individuals must have freely accepted the benefits provided by society.

Are the circumstances that give rise to unemployment just?

Australia ’s system of economic management has relied on the creation of joblessness to sustain economic growth. In addition, policies to promote rapid economic restructuring have created structural unemployment in an endeavour to strengthen the economy as a whole.

If this is true, then it can be argued that the unemployed have made an involuntary sacrifice for the economic well being of employed people. The starting point for obligations to accrue is therefore not just.

Is acceptance of unemployment benefits a choice?

For people to incur obligations from accepting benefits they must exercise choice in the context of meaningful alternatives. In a modem economy subject to structural unemployment, for many people there is no alternative to accepting benefits. This is especially true for people with few skills and capacities, with disabilities or with circum stances in their lives that are disadvantageous or who suffer from discrimination in the labour market for one rea son or another.

The current government’s Mutual Obligation program thus fails the principle of fairness on both counts. Unemployed people are subject to a double penalty by society, they are denied the means of making a living and penalised for accepting support.

The ethical case for a social contract is further eroded, because only the least well off in society have obligations imposed upon them. Other recipients of government largesse do not. Witness for example the investment incentives to industry, payment to landowners to better care for the environment or the incentive payments to trainee doctors in the hope that they will then work in rural areas. These groups are not required to give something back to society, even though they are in a much better position to do so.

Fair welfare policy should acknowledge that the need for support arises from the failure of society to provide opportunities rather than the personal failings of recipients. It should also acknowledge that the rest of society has benefited from the misfortune of others and on this basis develop policies that reflect true mutuality.

One can find a considerable level of detail in Brian Cheer’s book “Welfare Bushed: Social Care in Rural Australia” especially in his chapters on In come Support and Housing (pp 109 - 129) that help explain, the policies of consecutive governments that have played such a central role in the creation of the current social and work environments in rural Australia.

Mr Cheers says that, “Australia’s income security system provide an impressive array of pensions, allowances and other benefits for people who are unable to earn basic income either permanently or because of temporary circumstances such as illness or unemployment.” He goes on to say that primarily these payments have been considered from within a framework where a wage earner has lost income and has not, until relatively recently dealt with what to do with people who are self employed and get into financial trouble as a result of events that are outside their span of control.

“From a rural perspective, Australia ’s income security system reflects urbo-centric, reactive, residualist and, in relation to primary industries, developmental policy frameworks.”

He goes on to describe the present discussions as ways to ‘remove these anomalies’. In essence he asserts that prior to 1993 Australia ’s mainstream income security provisions had two major limitations in relation to farmers and other low-income rural private entrepreneurs. Because of the net value of their assets, many were ineligible for assistance or received reduced payments even though their real income was low or in some instances negative income. Special ‘hardship provisions’ since 1994 have reorganised the way in which assets are considered and the provisions that deal with a requirement to seek full time employment as part of an activity test have been considerably ‘adjusted’ to deal with the situation that farmers find themselves in as they cannot abandon their land and seek work if they are to have any chance of restarting their rural businesses. Several disastrous attempts (e.g. Farm Household Support Scheme, Rural Adjustment Scheme) later it is fair to say that the attempts made sense from a point of view that looked rural industry restructuring, but were indefensible from a social justice point of view. On the one hand they discriminated against fanners com pared with unemployed wage earners while, on the other hand they discriminated in favour of farmers compared with other rural business people.

What is interesting about the current arrangements for rural Australians is the extent to which the notion of mutual obligation does not appear to feature heavily in them for farmers. Cheers, does not address the differences and the relative inequalities that appear as a result of this in his book. Nor are the issues canvassed in Kinnear’s study. What should impoverished farmers do?

The fact that they work more or less full time on their farms, to try and get their business back on the road, is this a form of mutual obligation? In the view of this author, they are contributing nothing ‘back” to society they are merely having a taxpayer subsidised time frame within which they can try and restore themselves to profitability. A similar situation is NOT available to people in the city or indeed in any other rural industry besides farming.

If you own a small business in rural Australia you are not assisted to try and reform your business. You are paid an allowance the terms and conditions of which require that you meet your mutual obligation requirements to an extent that precludes your focusing on restarting your business.

Yet, your business may very well have been affected by exactly the same flood or the same fire or the same drought, either directly in terms of destroying your premises and/or stock or by creating a situation in the area in which you work where the business is no longer viable simply because your customers have been negatively impacted.

Newly graduating doctors, are ‘bribed ‘to work in rural environments rather being told that in return for the support that the state has given to them for their education they have a mutual obligation to work in areas where there is a need for their services.

There is no similar incentive for people in other walks of life to go to rural communities and make a difference. Fairness and equity and social justice should not be selective and should not be based on notions that suggest that farmers are ‘different’ because they produce our food or because we do not want to be dependent on others for our food supply.

So what is the answer?