Why doesn’t Australia raise its job seeker welfare allowance rate? A political science mystery.

EDIT: There’s a glaring mistake here. It doesn’t really change the analysis though. As of July 23 this year apparently Labour announced that it would support a raise to Newstart, but refused to confirm a figure. I follow this stuff pretty closely and thought I would have known had any such announcement been made, I was wrong and apologise. It doesn’t really change what I’ve written here though. The mystery of why they took so long to do this (the measure had popular and elite support for the better part of a decade), and why their support is not far more full-throated remains a puzzle for pretty much every pol-sci perspective.

In Australia there’s a policy which:

1. 72% of the public support.

2. The business council supports.

3. A variety of interest groups support passionately, and no one opposes passionately.

4. And the beneficiaries of said policy win out a lot by it, while the losses of the losers are spread very thinly.

All the major theories of democracy that I am aware of indicate that such a policy should pass. Someone who believes in popular sovereignty will point to the 72% support rate. Marxists will note the support by the business council. Public choice theorists will note the support by special interest groups, and the concentration of winnings compared to the diffusion of losses.

However, not only has this, policy not been made law, neither party major party supports it. Further, all the factors indicating that they should support it have been true for a very long time, and if anything one of the major parties has actually gone backwards on it.

The policy I am talking about is raising the job-seeker allowance, aka “Newstart”.

If I had to take a stab at what is going on here I’d say it must have something to do with the importance of legitimating ideologies. Both major parties in Australia are fairly neoliberal and committed to the so called “reform agenda”. Perhaps parties need a rigid ideology, more so than groups like the business council which can afford to be more pragmatic. The party’s need for a coherent project to sustain their morale (and prevent infighting?) drowns out other considerations. I’m not really happy with this explanation though.

Another possibility from a Marxist point of view is that groups like the business council are publicly supportive (in order to not seem like grinches) but privately opposed. Certainly possible, but again, I find it unsatisfactory as an explanation.

Give me your theories in the comments.

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