Retrenching or renovating the Australian welfare state: the paradox of the Howard government's neo-liberalism

Most conventional studies of the former Australian Liberal–National Coalition government refer to its neo-liberal ideological agenda: its concern to reduce government interference with free market outcomes by restricting access to social security payments. That analysis suggests a substantial retrenchment of the Australian welfare state based on redirecting responsibility for the disadvantaged from government to corporations, private individuals and families. Yet there is increasing evidence from reliable sources that the government has not reduced social expenditure, and that increasing resources have been directed, particularly via the family payments system, towards some disadvantaged groups such as low-income families and the aged. Utilising the theory of the US political scientist Paul Pierson, this article explores the joint paradox of Australian neo-liberalism: the punitive treatment of some disadvantaged groups such as the disabled and lone parents versus the generosity towards other groups and, more generally, the growth rather than decline in social expenditure. The author asks what this paradox tells us about the likely future of the welfare state in Australia and elsewhere.