natmarie73 said:
No offence Acey, but I rest my case. How someone who can afford to own multiple properties can still qualify for any form of government assistance at all while children starve on the streets simply defies all logic.
It may defy logic, but the bulk of government expenditure, no matter how worthy, has NEVER gone to the neediest. Just like the income tax system is biased against average PAYE earners and in favour of those in business or investment with smart accountants who can claim a multitude of deductions.
Even where it is explicitly directed to help the needy, if you follow the dollars it ends up employing more public servants, welfare workers, etc. Though that's not to say that giving it straight to the needy themselves will necessarily produce better outcomes. Especially if they don't spend it the way 'we' think they should, and lead virtuous non-drinking non-gambling non-smoking lives in the suburbs!
Think of who has the most political influence to get the subsidies, payments or tax concessions they want. It certainly ain't the poor!
In a society where most see themselves as 'middle class', governments are reluctant to cut 'middle-class welfare'.
And we're not just talking about cash payments in the form of welfare benefits only. Other examples of payments that could be regarded as 'middle class welfare' include:
* Public institutions such as higher education, the ABC, opera, libraries and art galleries receive government support, even though their direct beneficiaries are disproportionately drawn from the middle and upper classes. Thus you could argue that publicly funding them is regressive. Apart from the cultural benefits, you could argue that these institutions can facilitate self-education and social mobility to all who choose to use them, so a strong case exists for public funding.
* Industry regulation, protection and subsidies, including R&D funding
* Some tax concessions (the poor just get dole checks from the government, the rich get theirs, but they have more dignified names - 'industry adjustment subsidies' or 'tax concessions')
Focussing benefits on the very needy only would not necessarily improve their lot long-term. It would produce a more residual social welfare system, much like exists in the United States. Political support for it would be lower than a more universal system which benefits a broader cross-section of the community (an example is Medicare, which despite its problems is a very popular program).
Tighter welfare targetting may mean that instead of stopping at maybe $40-60k per year a family payment may stop at $20k pa, so that a new grouping of have nots is created and incentives between welfare and work due to the perverse interaction between tax, wage rates and social security payments.
However a system that's too universal or too generous (eg workers comp in some European countries) means high taxes and another set of perverse incentives that penalise work and reward bludging. And when taxes are too high people have an incentive to beat them, leading to the rich (successfully) beating them and people on very average PAYE incomes carrying more of the burden.
Regards, Peter