Economics and religion usually do not talk to one another. So Pope Francis' message to the World Economic Forum at Davos aroused some interest. It was brief. It developed the Catholic understanding that government and business economic actions should be governed, not by trust in the benign working of the free market, but by care for the good of the whole human community.
Coincidentally in Australia Social Services Minister Kevin Andrews announced a review of welfare payments. It is instructive to reflect on the review in the light of the Pope's approach.
The Pope commended to the delegates at the Forum a view of economic growth governed by ethical reflection on the human good:
In the context of your meeting, I wish to emphasise the importance that the various political and economic sectors have in promoting an inclusive approach which takes into consideration the dignity of every human person and the common good. I'm referring to a concern that ought to shape every political and economic decision, but which at times seems to be little more than an afterthought. Those working in these sectors have a precise responsibility towards others, particularly those who are most frail, weak and vulnerable.
He insisted that the economy should serve human beings, and not human beings the economy. He proposed a view of economic equality that 'demands first of all a transcendent vision of the person. It also calls for decisions, mechanisms and processes directed to a better distribution of wealth, the creation of sources of employment and an integral promotion of the poor which goes beyond a simple welfare mentality.'
This vision of equality demands that the most disadvantaged in society can enjoy the conditions that the better-off members of society would regard as essential for themselves to live with human dignity.
The Australian proposal to review welfare payments is in itself compatible with this Catholic vision. Its goal of helping people to find work and so connect with society is laudable. Regular review is essential to guarantee that government resources are directed to the frail, weak and vulnerable. Over time needs change and policies have unintended consequences.
The review of course will not be judged by the goals set for it but by how it enables those who are frail, weak and vulnerable to live in a way that respects their human dignity and removes the obstacles to finding employment that face those able to work.
The current system certainly has limitations. The Newstart allowance needs to be increased. It is indexed to the cost of living, whereas the disability allowance is indexed to the average wage that rises more rapidly. Those living on it struggle to shelter and feed themselves and their families.
The difficulty facing the review, and the reason why it has alarmed many commentators, lies in the difficulty of reconciling the two goals enunciated by the minister. It is to reduce the cost of welfare payments in the light of the claimed impossibility of funding it in future. The second goal, seen as the means to reducing the burden, is to encourage the unemployed to find work.
These two goals may be compatible in a rising economy when employment is growing and resources are available to assist people to enter or rejoin the work force. But in coming years the unemployment rate seems likely to grow. The Government's decision not to subsidise businesses such as General Motors, and presumably Toyota, will bring abrupt and unplanned closures with the resultant pressure on employment by suppliers and local businesses. The increased unemployment will leave more people reliant on Newstart and disability.
It is difficult to see how expenditure on welfare can be reduced by people finding work at a time when large numbers of employees are losing their jobs. The difficulty for the review in cutting costs is exacerbated because expensive programs like pensions and paid maternity leave from which better-off Australians also benefit have been exempted from review.
So there are reasonable grounds for fear that the review will focus simply on cutting the welfare budget. It will not raise the allowances of people who are unemployed, will make it more difficult for them to live with dignity, and so extend the inequality between them and working Australians.
In previous times of financial stringency governments have cut costs by imposing on recipients of benefits such onerous conditions that the most disadvantaged will not be able to meet them. Their loss of benefits is then justified by fanning public scorn for 'dole bludgers'. The poor then must beg and live in constant humiliation.
It is to be hoped that the review will not lead to such a result and that the measures taken embody Pope Francis' Catholic insistence that they are 'directed to a better distribution of wealth, the creation of sources of employment and an integral promotion of the poor which goes beyond a simple welfare mentality'.
Andrew Hamilton is consulting editor of Eureka Street.