Middle-Class Australia Has Grown Accustomed to Government Handouts

Everybody feeds at the trough


Physics and economics are bedevilled by the phenomenon known as "hysteresis". It's where, once made, a change can't be easily undone. In the physical world it applies to breaking an egg. In the world of social policy it applies to extending to the well-off benefits that were previously reserved for the poor.

The Baby Bonus is a case in point. By the end of the Hawke-Keating government in 1996 Australia had one of the tightest social security systems in the world. On one estimate, 92 per cent of government payments went to the half of the population that earned the least. By the end of the Howard government a decade later, many more of the payments were spilling over to the top half. A lesser 87 per cent went to the bottom half. …

The number of middle-income Australians with benefits to lose has grown. They are better organised than low-income Australians, better able to use the political process and have entire industries such as superannuation and private health insurance behind them.