My blog suggestion yesterday that ‘working couples with children’ deserve ‘much less’ welfare assistance attracted some questioning in the post’s comments. NPOV asks
is this from the starting point that you believe almost everyone deserves “less”, and couples with children deserve “much less” because they already get more than everyone else?
Certainly my starting point is the classical liberal one that people are entitled to keep their earnings unless there is some strong reason to tax it away from them. Among the reasons given for taxing, redistribution of cash to families seems to me to be among the weakest. It is not specifically aimed at meeting any need that is generally agreed upon, such as for education or healthcare. It is given to people with incomes that are well above average, who are quite capable of giving their children food, clothing and shelter without any outside help at all.
Though some family welfare meets genuine needs, much of it is redistribution between family types irrespective of need. Recent years have seen a significant improvement in the financial position of families relative to single people and couples without dependent children (though people in the latter still generally have the most to spend on themselves).
This can be seen in the equivalised disposable income measures in the ABS Household Income and Income Distribution survey. What equivalised income measures do is try to account for the fact that the number of people in the household affects living standards. Though there are economies of scale in living together, it recognises that children and non-working adults add expenses to the household. Obviously there are contestable assumptions here, such as what weight to give each household member. But the process gives us a way of comparing the financial position of different kinds of households.
For example, in the 2000-01 survey a couple with their eldest child under 5 had a median equivalised disposable income of 78.5% of a lone person under 35. The family’s median gross income was 59% higher, but the extra mouths add expenses so equivalised income is lower.
By the time of the 2005-06 survey things had changed a lot. The couple with their eldest child under 5 had increased their gross earnings advantage to 91% more than that of a single person under 35. Their equivalised earnings were now slightly above that of the lone person, though only by 1%.
Similarly, the family with young children has improved its position relative to couples without children aged under 35. In 2000-01, the loss of some or all of the mother’s income and one or more extra mouths to feed meant that in equivalised terms the family’s median income was only 61% of that of the childless couple. By 2005-06, this had increased to 75%.
This is not all due to welfare changes – more women working and general prosperity contributed. But the Howard government’s familist policies certainly would have played a part.
The logic of the familist position, in combination with entitlement feminism, seems to me to be that people should suffer no financial disadvantage from having kids. If the baseline is younger couples we are not there yet. But already young families have pulled ahead of young singles living alone in equivalised terms, despite the former’s higher expenses.
Even for egalitarians, these trends should be of some concern: that too much is going to people who are already relatively well off in financial terms, simply because they decide to add to their emotional well-being and spend some of their money on children. Though the public’s view of these things is not based on any intellectual egalitarianism or classical liberalism, the support for means testing of family benefits revealed in yesterday’s Newspoll suggests that there is something counter-intuitive about welfare for the affluent, even where kids are involved. I’m I hard person to impress where Commonwealth budgets are concerned, but I think I will like the small steps away from family welfare to be announced this evening.