It does make me curious that most people on the ‘left’ (I would count myself as being mildly in that direction - full disclosure ) don’t seem to recognise that the tough means-testing of the Hawke/Keating (maybe I should say Walsh/Howe) welfare state bred hostility to social transfers, while Howard’s generous FTB programs have entrenched support for them.

He has handed us a great political victory… but many people on the left prefer to squawk about how FTB reflects his efforts to re-engineer Australian society and keep women in the home. That may be so, but I reckon it is a small price to pay for the greater victory the policy represents.

I suppose admitting that such a victory has been achieved would mean accepting Howard is not really an evil ideological ogre, which is probably pathologically impossible for Phil Adams and his readers.

Ann Harding has apparently said that single parents are in fact one of the groups that has benefitted least under Howard. Part-pensioners are much bigger winners. Doesn’t comment on the effects of his wide-ranging subsidies for ’self-funded’ retirees.

Maybe we should take a cold shower about how ‘generous’ this government is to poor people with children.

We all forget that until 2005, the Howard Government was constrained by the lack of a Senate majority. Remember his first GST proposal was much more regressive than the one which was ultimately forced on him by the Democrats. And now that he has Senate control he has introduced a set of workplace/welfare measures which (at least in the short term) will churn out some absolute (not just relative) losers and they will all be from the low end of the income spectrum. Howard has still to be tested.

At the time that the Coalition came to power, family payments were withdrawn at the rate of 50 cents for each additional dollar of private income, resulting in EMTRs that could be higher than 80%. (According to Labor, the 51.5% that an average earner now faces is way too high!)

In 2000, the Government revamped the system (largely as a political offset to the introduction of the GST), increasing the rates of payment and substantially liberalising the income test by increasing the income limit for maximum assistance and cutting the rate of withdrawal to 30 cents in the dollar. This cut EMTRs by 20 percentage points but pushed the coverage of family tax benefit quite a long way up the income range.

Later increases in rates were through the invention of the end-of-year lump sum, which was a political fix to the problem of lots of people ending up with end-of-year debts, and that seems to have worked albeit at considerable expense.

It’s not entirely clear to me, though, why we needed any further income test liberalisations except that I think John Howard prefers to spend any left-over money at the end of the budget process on family assistance rather than on anything else. And while I know that most people see cash payments as welfare, not a tax offset, I think that John Howard (and possibly also Peter Costello) do genuinely conceptualise FTB as a part of the tax system that, for political and also practical reasons, is better delivered as a fortnightly cash payment.

The other thing that interests me is how difficult it is likely to be for any future government to be able to roll any of this back now that such a large proportion of the middle classes are getting part of this family payment expenditure. Wayne Swan has intimated in recent days that the ALP has a plan to fix the high EMTRs but he hasn’t come right out and said that they will do this by getting rid of middle class welfare.