Financialisation is potentially the most significant, yet challenging, aspect of liberalisation to assess. Where residualisation and marketisation can be understood through discrete changes within areas of social policy – payments and social services – financialisation involves a more complex interplay between policies we think of as ‘social’ and changes that are ordinarily understood as ‘economic management’. That interplay reflects how finance reworks and reimagines ‘risk’, the social relationship at the heart of the welfare state. Financialisation also describes a shift in the organisation of the economy, towards a model of profitability increasingly centred on capital gains and asset ownership. This asset economy is, ironically, increasingly underpinned by the streams of money households spend on social needs in the absence of a strong welfare state (Adkins et al. 2020; Bryan and Rafferty 2018).

Australia's retirement income system has proven particularly susceptible to the processes of financialisation. Our wage-earner model created modest pensions and a reliance on home ownership, leading households to rely on private savings in asset-based welfare (ABW). Deregulation of housing finance has made borrowing cheaper, but housing much more expensive. Efforts to expand the narrowly means-tested pension have focused on building a new market-based pension system – superannuation. Unlike other areas of social policy, where fiscal welfare was converted into social spending, retirement incomes have grown by encouraging private savings, which has expanded fiscal welfare. As money has flooded into super and housing, dual welfare has steadily increased. Retirement incomes have increased for many as a result, reflecting the success of union demands. But that increase has come through a much more technocratic and individualised system, tied as much to macroeconomic goals as tangible social needs.

The rise of ‘asset-based welfare’ within social policy mirrors a shift in how risk is imagined and economies managed. Rather than managing social risks by redistributing income in the present, states increasingly see their role as helping citizens manage their individual finances over time, by saving and investing in assets. This is most obvious in retirement incomes policy, where pensions and superannuation are explicitly framed around the life course, but it is also true of changes to higher education, framed as an investment in ‘human capital’.