A welfare state is the combination of welfare, capitalism and democracy. The Australian welfare state, having one of the highest economy in the world, focuses a lot on the social policies and social welfare their citizens. Since the last three decades, there have been significant shifts in the social policies and social welfare both worldwide as well as within Australia. These policy changes are going to be changed further due to vast economic changes worldwide. This study helps to demonstrate the social policy domains and the impact of these policy changes by the Australian welfare state, on the relevant populations of the society.


Definition of the population group Unemployed people There are certain population in the society who are unable to support their family or themselves due to lack of employment. Since Australia became colonised, there has been two economic downfalls, the first one in the late 19th century and another in the early 20th century. During these times, people faced a lot of economic crisis. There was a scarcity of jobs and people had to stand in long queues in order to get a job even for a day. There was income insufficiency for purchasing the basic needs like food and clothes. Its main consequence was poverty and high rates of resources. During and post the second world war, there was economic stability and a time full of employment. It was the golden era of the Australian welfare state. Since the 1970s, there was growing incidents of poverty, despite having an established economic system, particularly due to recession. Many Australians do not even have knowledge of the hardships two million other Australians face due to income poverty. Australian government set up the Henderson commission of enquiry into poverty. The inquiry gave certain findings, which served the principle for the policy of the Whitlam government. The Henderson commission laid down a poverty line. Inequality is the measure of wealth and poverty. In the context of Australia, poverty is measured: income from all sources like salaries, pensions, taxes, etc; availability and affordability of the services provided; assets, etc. There has been a noticeable increase in the inequality in Australia, with increase in both poverty and wealth. Between 1973-1976, the risk of poverty increased among the unemployed people from 17% to 74% (King cited in ACOSS,2003, p. 10). Outline of the social policy domains In a democratic country, policies are determined by agents selected by its people and implemented in public offices. Australia is run according to the British Westminster system of governance consisting of parliament, judiciary and government agencies. The institutions of the state have authority to make policies. Policies are the instrument of governance that directs resource allocation. The prime ministers and his cabinet of ministers have the main leadership role in establishing these policies. Central government agencies are the coordinating authority. The cabinet is responsible for making policies at the macro-level. Government departments are there to turn these policies into action. The state gets its fund by taxation and has the authority of resource allocation. Then there are regulating authorities who regulate the policies.  The state has distribution policies to distribute the financial resources. Social policies are the subsets of public policies through which the government maintains social orders and welfares. It is the mechanism of resource allocation which are influenced by social values and are implemented for providing social welfare of the population. Jamrozik’s (2009, p. 1) described social policies as the allocation of human resources and materials maintaining certain theories in order to provide social, economic and political stability to the population. The Australian income support policy gives access to employment and social wage for its people. The Australian welfare state is often referred to as wage earners’ welfare state. The political system, including trade unions and industrial relation systems play an important role in this aspect. Social policies aimed to produce a social and moral workforce consisting of hard working population. They allocated land to freed convicts, spreading a sense of social mobility. In the beginning of the federation of Australia, labour was considered as the main economic and social wellbeing. There was a demand for employment for all and adequate wages. In 1907, the Hervestor judgement established the policy of basic or minimum wage for all. This policy was set to the level of being sufficient for a man to support his wife and three children. The living wage system gave the foundation of the industrial Arbitration system., till 1960s. Commonwealth age pension was introduced as a residual pension, being available only for selected sections of the society. In 1912, maternity allowance was introduced. Currently ‘baby bonus’ is given to single mothers for supporting childbirth expenses. In 1939 the National Insurance Act was introduced. The period of the second world war is considered as the golden era for the Australian welfare state. The objective to obtain full employment was promoted by implementing certain protective taxes on imported goods and increasing social wage. In 1941, widow’s pension system was started, which was exempted from the wages system. Other than the income support, policies to support people to return to work were started, like the Commonwealth Employment Service. In 1945, Pharmaceutical, Hospital and Tuberculosis benefits were introduced. There were other initiatives like voluntary private health insurance designed by medical professionals; support for science laboratories, especially in private school; and the Child Care Act,1972. Impact of the social policy domains Government plays the most essential role in creating a stable economic and social condition. Social policy domains include employment, income support, healthcare, family and child welfare and similar others. The major focus of social policy is social diversity or the differences in different sections of the population. These include equality, social justice and social responsibilities. Thus we can see social policies have different impact on different population, gender, age, demographic location, caste etc. In a democratic country, social policies differ according to different political systems and are undoubtedly controversial. The welfare state is having two important functions in a country, one among which is the facilitating function. It enables the market to operate and its people to function in order to participate in the production and consumption of the country’s resources. The social policy helps to give economic stability in the form of income stability and proper access to basic survival services. It gives targeted pensions and services and access to services like healthcare, transport, housing and development and similar other aspects. The main objective of the income support policy was to reward the people for their service in the country’s economy, both when working as well as when unable to work, such that they can sustain themselves and their dependents. there are two presumptions  in this regard. Firstly, the citizens would perform much better when assured that they get the basic requirements like food, clothing, education and health. Secondly, their security would benefit towards the prosper of the society and the country. This would erase all the social insecurities, inequalities as well as decrease individual risks, and poverty. T. H. Marshall proposed that the development in citizen’s rights would encompass social, legal and political rights. Australian welfare accepted that it is better to have relative poverty in order to reduce absolute poverty. If the citizens are facing economic crisis, they would not be willing to take the risk of investing in the country’s economy. Therefore, it is better to provide basic needs like education and healthcare in order to maintain a proper standard of living such that the citizens participate in the country’s economy. The state implements economic policies, taxation as well as managing the interest rates. The state also compensates those who are affected by the negative effect of the capital, by avoiding structural unemployment and also work injury, inability to work or old age. With changes in time, the state has evolved as the provider of health care, childcare, old age care and many more services. This has resulted in the participation of more and more women of the society who were earlier not allowed to leave household work and participate for the economy. In addition to these, the society is moving from the industrial to technical basics, thus there is a need for a more healthy and skilful workforce. It is well known that business organisations would not establish institutions to teach their workforce but they would help the government to get more skilled and literate workforce. Potential future issues face by the group under current policies Extensive changes have been introduced to the Australian welfare state since the 1980’s. Australia can be divided into a two-tier society consisting of the haves and the have-nots. The haves are those who are enjoying all the diversified productivity, and ever-growing range of products and services. The have-nots are the excluded ones who are restricted from getting the services under certain laws and agencies of the country. Raper, 2000, p. 140) described this inequality of wealth. Top 20% of the income holders earn 50% of the total income of Australia, while the bottom 20% earns only 5% of the income. Among the list of developed countries Australia dropped from seventh to 15th position according to UN Human Development Index. This makes Australia to be one of the most unequal countries (Australia is second to the United States in terms of inequality). The social vulnerability is due to lack of participation in the social economy. Taxation is the source of social provisions; while government has reduced the cost of welfare by reducing the rate of taxation system, they must put extra effort to encourage the citizens in social participation by increasing the privileges and market initiatives. The amount of interest by the state and public agencies in social spending is extremely low when compared to other OECD countries. However, recently it is slowly increasing. Thus, the increase in social spending is described as more by the state when compared to the government spending as a whole. This growth has been most rapid in the field of healthcare and social security and welfare, which increased by 37% and 54.4% respectively, while the total outlays increased by 15.3%. The Australian government introduced 10% Goods and Services Tax (GST) and reduced income tax rates on the higher income groups. This created a bigger impact on the lower income group. The state has an array of legal tax avoidance choices, which increased the neo-liberal economic reform for example the taxation is divided between spouses to reduce liability of the higher earner. The neo-liberal policy in context of the social and economic conditions will undoubtedly have winners and losers. According to findings the rate of poverty is highest among single aged people, then sole parents, and aged couples. Poverty is lowest in the population of non- aged coupled with or without children.


Australia’s Reconstructed welfare state has emerged subsequently but is not exhausted. Positive and negative aspects of freedom are important in a liberal democratic country. Therefore, it is important to give that freedom to the people such that they are encouraged to take part in the country’s economy. There are people in the country who can develop only with the help of other individual and services. Therefore, it is the responsibility of the common people to help others in need of the freedom and also know the way this system that they are a part of, operates optimally.


Bridgman, P., & Davis, G. (2000). Identifying Issues, and Policy Analysis. The Australian Policy Handbook (2nd Edition), cap4. Carson, E., & Kerr, L. (2017). Australian social policy and the human services. Cambridge University Press. Fenna, A. (2004). Australian public policy. Pearson Longman. Hugman, R. (1998). Social welfare and social value: The role of caring professions. Macmillan International Higher Education. Nitz, T., & Brown, A. L. (2001). SEA must learn how policy making works. Journal of Environmental Assessment Policy and Management3(03), 329-342. Stilwell, F., & Troy, P. (2000). Multilevel governance and urban development in Australia. Urban Studies37(5-6), 909-930.