The Australian welfare state

The Australian welfare state has always been largely a ‘residual’ welfare state based on the targeted direction of means-tested payments to the poor and disadvantaged. Welfare programmes have generally involved a combination of public funding and private provision. This mixed economy of welfare includes Commonwealth, state and local governments; private employers providing wages and superannuation; the market or private sector that is involved in the commercial provision of services such as health, education and housing; voluntary agencies; and the informal sector where care is provided by families and individuals. In practice, voluntary agencies, including church groups and other private charities, have historically played a central role in the provision of health services and other social programmes (McDonald, 2000; Bryson and Verity, 2009).

The Commonwealth government takes responsibility for all income security, but the state and territory governments retain responsibility for indigenous peoples and most forms of social welfare service delivery including education, health, and housing and community services (Bryson and Verity, 2009). There is considerable regional variation in these welfare frameworks, as is reflected in the case of child and youth welfare especially.

At the national level, Australia developed a unique welfare state model which concerned itself primarily with the protection of wage levels (at least for white male breadwinners), rather than the provision of supplementary welfare benefits. Castles (1985) called this model a ‘wage earners’ welfare state and contrasted it with both a residual model of welfare (because Australia had a relatively generous minimum living wage) and the institutional model of welfare (because full inclusion in the system depended on one's status as a wage earner rather than one's status as a citizen).

Australia spent $90 billion on welfare payments and services in 2005–6, which is the equivalent of 66.49 billion euros. This figure included expenditure by governments, non-government community services organisations and households. Of the total, $61 billion was social security benefits and other cash payments while the other $29 billion was expenditure on the provision of welfare services. The largest overall share of spending went to older people ($34 billion), followed by families and children ($27 billion) and people with disabilities ($17 billion) (AIHW, 2007).

Australia possesses one of the most selective income support systems in the Western industrialised world. Financial assistance is provided on a flat-rate basis, funded from general revenue rather than via insurance schemes.