Managing the new social risks


Deborah Mitchell

"Globalisation … is creating deep social pain and political costs as sensitive sectors are opened up to outside competition and go through difficult adjustments. The human costs are hurtful and governments have a responsibility to help people through the process."

- John Howard (Prime Minister), Tokyo, 6 July 1999

THE welfare state and its constituent social policies hold a somewhat paradoxical position in debates about globalisation. On the one hand, the social policies that characterise modern welfare states are perceived as luxuries which we can no longer afford in a world of intensely competitive markets. On the other, these same policies are equally claimed as the primary vehicle for governments to "help people through the process" of adjusting to economic change.1 Australian debates about the role of the welfare state in the context of the global economy oscillate between these two positions, as in other nations with developed economies.2

Over the past decade, many of our social policy documents have made passing reference to the changed economic conditions brought about by globalisation, but they have not formulated any strategic policy response.3 In part, this lack of strategic attention may be attributed to uncertainty about the precise nature of the impact of Australia's entry to the global economy, and how this would flow through to social programs. In part, it may be attributed to a domestic social policy agenda that was preoccupied with internal social and demographic changes that were challenging existing policy structures and requiring more immediate attention. Finally, as welfare state analysts such as Ramesh Mishra have observed, "it is not the economic facts about globalisation but their political implications" that may have prevented explicit policy debates about the costs of globalisation and the social policy adjustments that might be required to smooth the transition into the global economy.4 It was not until 1998, when Mark Latham broke the political silence surrounding the impact of globalisation and the necessity to recognise and adapt to both the costs and benefits, that these three strands of the welfare state-globalisation debate came together (see Chapters 2, 9 and 12).5 Like other OECD nations, we are now entering a period where 'new deals' need to be struck to replace the postwar Keynesian consensus that shaped Australia's social policy direction for the latter half of the 20th century.

Already the impact of Latham's challenge to confront the impact of globalisation is being felt in social policy debates. The Howard government's recent review of social policy, undertaken by the Welfare Reform Reference Group (the 'McClure Report'), reflects this change in several ways. Firstly, the review does not take the existing social security system as a given, to be nudged in an incremental fashion towards minor improvements. Instead, it proposes a radical recasting of the existing system with a ten-year transition phase. Secondly, the review seeks to link what have been perceived as purely domestic social policy problems to the larger picture of globalisation. The report highlights the impact of technological change and the global economy as one of four underlying trends that "underpin the need for a bold change to our support system".6 So far, so good. However, the Reference Group's report is not without its negative elements. Its emphasis on a conservative social agenda - reflected in a lengthy discussion of the implementation of 'mutual obligation' - detracts from an otherwise positive attempt to sketch an alternative vision of our social security system.