Joe Hockey ends the idea that Australia can help make poverty history

Yesterday Treasurer Joe hockey announced that next year’s international aid budget would be slashed by $1 billion. This decision marked much more than the cutting of the aid budget. It marked the end of the idea that Australia could play a significant role in bringing extreme poverty to a halt.

In the last decade a revolution occurred in the Australian aid program. Inspired by the Millennium Development Goals, first the Howard government then the Rudd government started to increase both the volume of aid Australia offered to the world’s poorest countries and the quality of the aid. We started to measure our aid program by its effectiveness in things like reducing child mortality, improving people’s access to clean drinking water, and halting the spread of infectious diseases.

For years Australia had held an “aspirational” goal of lifting its aid program to 0.7% of our national income. But “aspirational” really meant “ignored”. In 2007 that changed when Kevin Rudd announced the ALP would lift aid to 0.5% of national income by the year 2015. The Coalition embraced the same goal and we embarked on an era of bipartisan commitment to substantial increases in the quality and the quantity of Australian aid.

In the last couple of years this commitment stumbled. The target date for reaching 0.5% was pushed out by a few years, but yesterday Joe hockey brought the idea of achieving this target to an end. Not only did he announce that aid would be slashed, but the principle he articulated was that aid would be returned to the levels it was when it was last funded out of surplus and that into the future increases would be made in line with the consumer price index. As a result the aid program as a proportion of national income will soon fall to 0.21%, the lowest level in more than 50 years, and will remain parked there.

What a monumental failure! If the past 15 years have shown anything, they’ve shown that well targeted, well-managed aid investments can result in wonderful outcomes. Who can’t be excited by the fact that child mortality rates have plummeted, the number of children in school has risen, income poverty has been slashed, hundreds of millions of people have access to clean drinking water? Australian aid played a part in making that possible.

Yesterday’s announcement did much more than massively reduce the aid program. It marked the end of Australia’s commitment to a growing aid program. It marked the end of the idea that we could help bring extreme poverty to a halt. Apparently we have much more important things to do.

Did you see the dancing bear? A reflection on the conclusion of Micah Challenge Australia

A few years back a brilliant tv ad was created which showed 2 teams of people passing a ball. You the viewer were asked to count how many times the white team passed the ball. And so you count…1,2,3,4,5. The ad ends, the correct answer is given and just as you are basking in the glory of getting it right the narrator asks “but did you see the dancing bear?” Dancing bear? The ad is replayed and you see some guy in a bear suit dance right through the middle of the teams passing the ball. And you missed it! It should have been bleedingly obvious but you missed it!

I grew up in a church that knew Micah 6.8: God has shown you what is good and what the Lord requires of you: to do justice, love mercy and to walk humbly with your God. We even immortalised the words in a popular Sunday school song, but somehow we didn’t see the call to justice. We were big on mercy and walking humbly with God; it was a church where people were extraordinarily generous and sacrificial in showing kindness; that nurtured a deep devotion to Jesus, but justice? It just didn’t register on our radar, and when it took the form of social justice it sounded altogether suspicious. To paraphrase a South American bishop, when he fed the hungry we called him a saint; when he asked why they were hungry we called him a communist.

The church of my youth, like most Baptist churches of the era, embraced a theology known as premillenial dispensationalism.Indeed to be a member one had to agree with this doctrine. Among other things this held that the world is getting worse and until Jesus returns would continue on a downward spiral to chaos. To this worldview individual acts of mercy made sense, but the pursuit of social justice was futile. It simply could not be achieved, and if by chance we did have some limited success, we would only be delaying Christ’s return.

Your church may have theologised it differently, but with a few notable exceptions, in mid twentieth century Australian churches justice was a missing dimension of discipleship.

By the turn of the millennium this had started to change. Churches were learning to see all of micah 6:8 – justice, mercy and walking humbly with our God.

Micah Challenge both reflected this changing paradigm and helped shape it. We were a campaign that did 4 things:

1. MC helped Christians see that poverty was an issue that should be front and centre for us. I remember reading John Stott’s Issues Facing Christians Today when it was first released in, I think, the early eighties. Stott observed that every generation of Christians has a blind spot and that in his opinion the blind spot of Western Christianity was the scandal of global poverty. MC set out to change that, to help us see the great focus on poverty in the bible.

2. MC helped Christians see that engaging with those living in poverty demanded more than personal acts of kindness. It meant grappling with the fact that poverty is created by systems that are fundamentally unjust. If you were a follower of Jesus your generosity in sharing your wealth must be matched by a commitment to buying goods made ethically, to a lifestyle that was ecologically sustainable, and wherever and however one could to combat the deleterious impacts of social, economic and political systems that trample on our fellow human beings

3. MC helped Christians see that following Jesus had a prophetic edge, that the Church’s role was not to be chaplain to the state nor a sect cut off from the state but to be prophet, to call the State to a just use of power. One of the great tasks of the church of our age is to discover what it means to be the church in a post-Christendom world. What does it mean to be the church in a world where we are no longer at the centre, where what was, I suspect, only ever a thin veneer of Judaeo-Christian values is replaced with a commitment to pluralism? MC helped us see that in part at least, it means becoming prophets, advocates and agitators for change.

4. MC gave Christians the tools they needed to exercise their prophetic voice. Once we discovered the call to justice we needed a way to do it. For many MC was that tool. For the first time ever they wrote a letter to a politician or signed a postcard or mustered the courage to visit their MP. Church leaders were emboldened to preach about poverty and not only our responsibility to share but our culpability in creating the conditions that kept people poor.

Of course MC was not the only factor responsible for this shift, nor for many even the most significant factor. Like most shifts in communities the shift to justice was multidetermined. But for many of us MC was our entry point to lived justice, the movement that helped us see the dancing bear. For others MC was a valued partner in a journey they had already begun. But for all of us mc helped us see and live all of micah 6.8: to do justice, to love mercy, and to walk humbly with our God.

TRANSCRIPT OF A TALK DELIVERED TO MARK THE END OF MICAH CHALLENGE AUSTRALIA (TO BE REPLACED WITH MICAH AUSTRALIA LTD)

Tony Abbott, Aid and the National Interest

The Greens are currently running a campaign that declares “Tony Abbott has removed poverty reduction from the goals of the aid budget.” My politics lean more toward the Greens than the Coalition, but this campaign is outrageously misleading.

This was the stated objective of Australia’s government aid department prior to the Coalition coming to power:

AusAID advances the Government’s objective of assisting developing countries to reduce poverty in line with Australia’s national interest and where we have the capacity to make a difference (2013-14 Budget Portfolio Statement).

Outcome 1 is listed as

To assist developing countries to reduce poverty and achieve sustainable development, in line with Australia’s national interest

This is the “change” the Abbott government has made:

From 1 November 2013, the department will advance the Government objective of assisting developing countries to reduce poverty and achieve sustainable development, in line with Australia’s national interest (Portfolio Additional Estimates 2013-14)

So it’s just plainly wrong to clam poverty has been removed from the goals of the aid budget.

But neither does this mean aid will remain the same or improve. Four things are critical:

1. how aid is thought to reduce poverty;
2. how development is understood;
3. how the national interest is understood;
4. the value placed on aid.

On the first two areas the Government looks like it will place a much greater emphasis on economic growth. The updated portfolio statement referred to above includes this:

The department will deliver an effective and high-quality aid program that promotes Australia’s national interests by contributing to international economic growth and poverty reduction.

And in his speech to the World Economic Forum Prime Minister Abbott described economic growth as the key to solving almost every global problem.

Just how strongly the Government runs this line into the aid program remains to be seen, but I am waiting with apprehension. There is no doubt that economic growth is important for poor countries to sustainably lift out of poverty. But this doesn’t mean aid should be linked to economic growth. It has proven notoriously difficult for economists to demonstrate the impact of aid on economic growth, and a focus on economic growth easily bypasses the poorest. It is however clearly demonstrable that aid can impact positively on social dimensions of wellbeing, such as education, health, and public infrastructure, and that this yields strong outcomes for the poorest.

On the matter of national interest it seems there is a narrowing of focus. The notion of “the national interest” rose with the development of the modern nation state, but is notoriously difficult to agree upon.

In a democracy, the national interest is simply the set of shared priorities regarding relations with the rest of the world. It is broader than strategic interests, though they are part of it. It can include values such as human rights and democracy, if the public feels that those values are so important to its identity that it is willing to pay a price to promote them. (Rye, Joseph, “Redefining the National Interest”, Foreign Affairs, July/August, 1999)

More often than not our shared priorities regarding relations with the rest of the world are understood in terms of securing our material wellbeing. Taking this line on aid would take us into pretty dark territory, where aid would really be about giving to ourselves. I believe that we need to see our shared priorities as including our vision for a just world where everybody has sufficient to lead a decent life and experiences peace and freedom. This would place aid in an entirely different light.

Finally, regarding the value placed on the aid program, the Government sent a pretty strong signal when it abandoned the previously bipartisan commitment to increase aid by $4.5 billion over the coming three years, and Treasurer Joe Hockey justified it on the basis that we needed more money for infrastructure.

No Tony, economic growth is not the answer to everything

In his speech to the World Economic Forum  last week, Australian Prime Minister Tony Abbot made this incredible statement:

As always, stronger economic growth is the key to addressing almost every global problem.

It summed up the direction of the speech, which was a plea for small government and freer markets. But if the two greatest global problems of our time are extreme poverty and environmental degradation economic growth is not the key.

POVERTY

Economic growth has no doubt been the greatest driver of poverty reduction in the last three decades, and it has been remarkable. But there are important caveats to put on that.

Caveat 1:It is questionable whether what has occurred in China, India and the Asian “tiger” economies will be repeated any time soon for the world’s poorest countries. In his book The Bottom Billion, economist Paul Collier notes that there has been a structural shift in the global economy in which large slabs of  manufacturing shifted from industrialised nations to places such as South Korea, Taiwan, and China. This drove massive economic growth and poverty reduction. Manufacturing in particular , provided a more equitable distribution of wealth than commodities, for where commodities can be controlled and run by an elite, manufacturing is labour intensive, requiring more people to share in the fruits of growth. Collier points out that many poor countries have not shared in the shift of manufacturing to the developing world, and are not likely to very soon. Manufacturing thrives in agglomerations, that is, when many manufacturing plants can be located near each other. So manufacturing will only shift to the poorest of countries when the wage gap between them and places like China is so large that it is worthwhile taking the risk to leave an agglomeration. And that, says Collier, is unlikely to happen for some time.

Caveat 2: Free markets are the stuff of fairytales.  In Bad Samaritans. The Myth of Free Trade and the Secret History of Capitalism economist Ha-Joon Chang shows that the world’s industrialised nations, such as the USA, England and Australia, were rabidly protectionist during their history. That is, the governments of those countries used taxes, tariffs, subsidies, quotas, and the intellectual property of others, to drive the direction of their economies. The newly industrialised economies like South Korea and Taiwan did the same thing, as are emerging nations like China and India. Free market economists argue that this were a drag on development, that growth would have been even faster had these countries not been protectionist, where economists like Chang argue the protectionism was a critical factor in economic success. Maybe we’ll never know, but it’s worth pointing out that no country has ever moved out of widespread poverty by the free trade route.

Caveat 3: economic growth alone is not sufficient to drive poverty reduction. There must be mechanisms for ensuring the poor share in the fruits of a growing economy. Wealth is all too easily captured by powerful elites that exploit and oppress the poor. Equity and justice are not merely the fruit of economic growth, but come from the  human values that must shape and drive it.

ENVIRONMENT

The world faces a series of threats to ecological health: climate change; the acidification of the oceans; biodiversity loss; the disruption of the nitrogen cycle. Far from economic growth being the solution, it has been the cause of these problems. Economic growth is driving a global consumer binge that is making unsustainable demands on the environment.Between 1970 and 2010 global consumption grew from a spend of $9.3 trillion to $31.8 trillion, with 80% of that growth in demand coming from affluent nations (World Bank online data sets). Simply letting the markets rip will only exacerbate the problems even further.

CLOSER TO HOME

And what of the problems confronting us closer to home: the treatment of asylum seekers; extreme poverty in remote indigenous communities; the rise of mental health problems; economic disadvantage; over 100,000 people homeless? Australia has experienced an unparalleled run of economic growth to become one of the world’s wealthiest nations, yet these challenges persist.

Economic growth will not resolve these problems for the simple fact that we are people, not merely consumers, and we live in communities, not simply economies. Human well-being derives from a broad range of things, of which economics is just one part. Sure, economic growth has allowed us to explore options previous generations might only have dreamed of. It has also allowed us to indulge our greed to a degree previously unimaginable. But it has never solved any problem. People and communities solve problems.

 

Where Have all the Dole Bludgers Gone?

So where have all the dole bludgers gone? Growing up in an affluent part of Sydney, where unemployment rates were low and incomes high, the standard orthodoxy was that the ranks of the unemployed were filled with people who didn’t want to work and were living the life of Riley on unemployment benefits. How we resented them, these “dole bludgers”, wantonly living off our taxes while we were hard at work.

The 2012 poverty report by the Australian Council of Social Services, updated earlier this year, puts this myth to bed.

In Australia poverty is usually measured in terms of inequality. A person is considered to live in poverty if their income is less than 50% of the median income for their household type.  When income is this low you simply don’t have the opportunities that most of us would consider the minimum required to live a decent life. For example, the report describes the situation of an elderly pensioner:

Mary is a 78 year old pensioner who lives in Perth. Due to the cost of high rent and utility prices life has become a battle for survival. During winter Mary would turn her heating on for only one hour a day. She would spend much of the day in bed to keep warm. Her food budget each week is $40. This means a diet of baked beans, bread, and a small amount of fruit, and vegetables. Once a month she buys a small piece of chicken. Once a week she eats a hot meal provided at a local church.Mary considers herself lucky as at least she has a roof over her head.

According to the report 2,265,000 live below the poverty line and find themselves in circumstances like Mary. And the single biggest driver is that social welfare payments are set lower than the poverty line. The maximum receivable age pension for a single person, at $366 per week, is $22 per week below the poverty line for a single aged person.

So what about those dole bludgers? It seems they might not be living the high life after all. The chart blow shows the weekly gap between maximum Newstart payments and the poverty line:

poverty line in australia

 

The stark reality is captured by John Falzon, CEO of the St Vincent de Paul Society National Council, in a preface to the report:

The truth told by those on the margins is louder than the lies told about them.

Our problem in Australia is not the “idleness of the poor.” Our problem is inequality. This is a social question, not a question of behaviour. We do irreparable harm when we turn it into a question of individual behaviour, blaming people for their own poverty. It is a matter of deep shame for a wealthy nation like ours that our unemployment benefits, for example, have been kept deliberately low as a means of humiliating the very people they were originally designed to assist.

Charities like the St Vincent de Paul Society will always be there for the people who are waging a daily battle from below the poverty line, but the message we are hearing is that people do not want charity. They want justice. And we support them in this struggle for their rights.

We support helping people into the paid workforce. The time has come, however, to abandon the foolish notion that forcing them into deeper poverty improves their chances of employment. You don’t build people up by putting them down. You don’t help them get work by forcing them into poverty.

We stand with all who are trying to create a good society; a society that does not accept the scourge of rising inequality and exclusion from the essentials of life; a society that does not humiliate people. New passions are springing up. They point to glaring contradictions. They also offer the promise that another kind of society is possible, and can be created collectively under the guiding stars of struggle and hope.

Better Ways to Spend our $8 billion

According to the Commonwealth Bank, Australians are set to spend more than $7.9 billion this year on Christmas gifts. Here are three ways we could collectively better spend this money.

1. Reinstate our spending on global poverty. The Federal Government has slashed $656 million from this year’s budget. Surely if we can send $8 billion on Christmas presents, we can give back the $656 million we have taken from the poor?

2. Lift our refugee resettlement intake from 6,000 to 27,000. The Federal Government spends $550 million per year on resettlement services for refugees. Lifting the intake from the current 6,000 pa to the 27,000 recommended by the Refugee Council of Australia would cost an additional $1.93 billion. Mmm…another pair or red undies or a refugee finding safety?

3. Lift the value of welfare payments. According to the Australian Council for Social Services 2012 Poverty Report, 2,265,000 Australians (12.8% of all people) are living below the poverty line, defined as 50% of median income. Unemployment benefits are as low as $35/day. ACOSS is calling for a $50/week increase, which would cost $1.5 billion.

These three alternatives would eat up just half of our Christmas gift spending. What else/different would you suggest?

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