THE CHURCH, THE WELFARE STATE, AND THE NEW CHALLENGES

Presentation to the Seminar on “Social Services: Church-State Relationships” sponsored by the New Zealand Council of Christian Social Services, at Connelly Hall, Guildford Terrace, Wellington, July 28, 1994.

Keywords: History of Ideas, Methodology & Philosophy;

While the origins of the Christian Church are humble – itinerant preachers living on the hospitality of those who revered their message – for most of its long history, the Church has been extremely rich and extremely powerful. The combination of its message – encapsulated, for instance, in the parable of the good Samaritan – and it having the means to practice that message, meant for much of its history the Church was the central player in the provision for the welfare for the poor and needy.

The rise of industrial society in the nineteenth century undermined that role. The Church had been based on pre-industrial society – even today its ministers talk of their “pastoral” responsibilities. Industrial society created new forms of wealth at increasing rates, in which the Church with its assets based in the rural world could not join. Moreover industrial society was a secular society. Even in societies which still claim to be dominated by religion, that command is very different from, and less than, the intellectual and moral authority of the past.

Industrial society bred the welfare state, partly because the Church was no longer able to provide social services at the level and extent that was now necessary. To give a simple example, the traditional levy of the tithe was ten percent of income. To provide for the modern welfare state we all pay something in excess of a quarter of our income, including indirect taxes.

Nevertheless the Church continued to play an important role in the provision of social services in the modern welfare state, if a more specialized one.

For some services it became the delivery agency of for the state: most notably in the care of the elderly who might even choose a religious context for that care. A secular state is not an anti-religious state, and individuals are entitled to be able to pursue their spiritual needs.

An even more vital role was filling in the gaps which the state system failed to observe or, very often, which were opening up as a result of social change. It was an complex symbiosis. The state acknowledged its policy responses tended to be sluggish, and needed some non-state system to cover for them in the short and medium run, while at the same time using this cover to neglect difficult areas and reduce state outlays. At the same time the voluntary social service groups were pleased to have a role in the provision of the welfare state which depended on their energy and goodwill, yet they were loathe to give up their activities when the time was ripe for the state to take full responsibility.

This symbiosis created a further role for the Church as an advocate for development of the welfare state. It was in a muted advocacy. This was partly because ever since it became a part of established society the Church has faced a tension between speaking on behalf of those who were marginalized, and cooperating with those who were in power. But also for much of the mid twentieth century there was a general agreement that a welfare state was an integral part of modern industrial society, and so the need was only of quiet affirmation rather than strident defence.

Choices and Paths

At the end of the twentieth century we face a new challenge, although we are not even sure of its exact form. At the simplest level there are one of three possibilities, of social choices or paths.

The new right path is that the welfare state as we knew it is no longer necessary, and needs to be replaced by what is technically known as a “residual” welfare state, the best example of which might be the United States one, although this should be an even purer form. In it the state withdraws from provision of traditional welfare activities such as education, health care, housing, provision for retirement, and social security. Not does it even fund them, handing that over to private purchase and insurance, although there may have to be some income redistribution, It is a view you will find in Roger Douglas’ Unfinished Business, which is the manifesto for the new party he is founding. It would also appear to be the view of the more strident advocates in the Business Roundtable, and various New Right institutions.

While this view has had most of the running in the last decade it is not the only possibility. The traditional left path is one of returning to the past form of the welfare state, in effect reversing the reforms of the last ten years. In one respect it is a return to nostalgia; in another it is a strong commitment to the principles of human dignity which under-pinned the traditional welfare state. One formulation of these principles – an excerpt from those set down by the 1974 Royal Commission on Social Security – are in listed as

” These are the essential principles on which we consider our social welfare system and its administration should be based:

(a) The community is responsible for giving dependent people a standard of living consistent with human dignity and approaching that enjoyed by the majority, irrespective of the cause of dependency. ….

(b) Need, and the degree of need, should be the primary test and criterion of the help to be given by the community irrespective of what contributions are made.

(d) …

(e) The aims of the system should be

(i) First to enable everyone to sustain life and health;

(ii) Second, to ensure, within limitations which may be imposed by physical or other disabilities, that everyone is able to enjoy a standard of living much like that of the rest of the community, and thus is able to feel a sense of participation in and belonging to the community.

(iii) Third, where income maintenance alone is sufficient (for example, for a physically disabled person), to improve by other means, as far as possible, the quality of life available.”

Royal Commission on Social Security, 1974

The New Right will tell you that world view of the traditional left is obsolescent. But that does not mean we need abandon the principles on which it was based. The approach of accepting that the economy and society has changed, but the ideals of the welfare state are as relevant today as when their founders – Jesus included – first enunciated them, is a third approach. One might call it the modernizing central path. It is a strategy to renew the welfare state, rather to maintain it or replace it.

As a child of the traditional welfare state I am committed to the central path. Let me explain why modernization of its institutions is necessary, and why abandonment of the principles on which the institutions are based unnecessary.

Changing Circumstances

I begin by listing figure 2 some of the most important changes which have pressured us for reform of the economic and social mechanisms which regulate our society.

The globalization of the world economy;

The structural diversification of the New Zealand economy, following the ending of the dominance of the pastoral economy in the mid 1960s;

The severe fiscal stress which began with the budget deficit being opened up in the mid 1970s to above sustainable levels, and which is still not resolved in the early 1990s;

The shift in world real interest rates around 1980, which seems to have changed fundamentally the distribution of factor incomes;

The liberalization of economic management;

The slowing of the growth performance after 1966 (and the stagnation after 1985);

Rising unemployment;

The changing composition of the work force, including rising shares of female, part-time, and (latterly) self employed activity;

Increasing technological sophistication which impacted on the demand both for labour and for tertiary education (and the supply of health services);

Changing demographics as the population aged;

Increasing urbanization (among other things, the urbanisation of the Maori was critical in the Maori Renaissance of recent decades);

Rising proportion of dependent children living in single parent homes;

The increasing recognition of the rights and specific needs of women, the Maori, dependent children, and minority groups such as gays and the physically or mentally disabled;

The lack of agreed overall social morality;

The increasing prominence of Te Tiriti o Waitangi, the treaty between the British Crown and the Maori;

The evolution of New Zealand nationalism.

Any one of these changes would have been sufficient to change markedly the traditional social policy. Collectively the impact was devastating. If I had to chose two key ones, they would be the ongoing fiscal crisis which meant that the country could not buy its way out of any policy conundrum, and the rising unemployment which meant that it could not work its way out either.

It is only if we can reverse all, or most, of these changes that we can envision returning to the traditional welfare state. I leave that heroic tasks to others – indeed some of the changes I welcome – and turn to the question of what are their consequences?

Renewing Principles

One response is to say that we must abandon the principles on which the welfare state was founded. People are perfectly entitled to that view, but personally I do not find it compelling.

Nor, if I interpret them aright, did the churches. It is instructive to recall the sequence of events. The social security cuts announced in the 1990 Economic and Social Initiative converted a gap in the welfare system into a yawning chasm. Because the church social service agencies were on the frontline of dealing with the gaps in the old welfare state, they were overwhelmed by the personal and family agony that the new one created.

To get some idea of the magnitude involved the cuts were in the order of $1 billion to $2 billion a year, and represented an average cut in income for lower income families of around a quarter in real terms. Using some Treasury derived statistics I have estimated that the numbers in poverty increased by around 40 percent as a result of the cuts and other measures, to over half a million people below the poverty line at the level set by the Royal Commission on Social Security in 1972.

Another way of thinking about the cuts is that the every household would have had to donate an average between $20 and $40 every week to compensate the poor and needy for them. In practice the generosity of private contribution was insufficient to meet that challenge.

The various social service agencies did the best they could, but the churches also prepared a joint statement on the issue which was released last year. I shall not repeat or excerpt it here. But I want to emphasize that it was a part of a long tradition of Christian social teaching. It would have been more radical if the Church had not stated these values they did. Those values had underpinned the traditional welfare state, which Michael Savage described as “applied christianity”.

However reaffirming principles is not the same as reconstructing institutions.

A Residual Welfare State?

One option is to pursue the logic of the policies which have given us the current path. It is true that there is an economic expansion at the moment, but important for the social service community is the following three features:

– there is no provision for real increases in social security benefits, even if there is an increase in average standards of living. That means there will be an increasing divergence between beneficiary and average standards of living;

– the wages of the unskilled are not expected to rise as fast as the wages of the skilled and professional classes. That means there will be increasing divergences between the standards of living of the best off and worse off in the work force;

– the forecasters expect unemployment levels to remain above 8 percent of the labour force for the rest of the decade, or higher than the level when the cuts were first introduced. That means there will be more beneficiaries in the future than in 1990.

Combining the three points together

at the end of the decade there will be more poor, and

they will be worse off than they were at the beginning of the decade,

even if the rest of the nation is markedly better off.

We are pursuing a social policy of national bifurcation; of the creation of classes; of the residual welfare state.

What is to be the response? Clearly there are those who would be willing to join the new strategy. I was surprised that this includes a number of voluntary providers if a report on a seminar sponsored by the Institute of Policy Studies is any indication. Now the Institute is a well known lobbyist for current government policies, so it is no surprise that it should support the residual welfare state. What surprised me is that on the basis of the publication there appears to have been little concern expressed about that strategy by the seminar participants. The voluntary societies seem happy to go down the path of becoming paid agents of the Crown, even meekly corporatizing themselves to be more acceptable. [1]

Before we accept that direction we might reflect on the US experience, which is the best example of the residual welfare state which seems to be planned for us. Let me quote some people with more authority than I of its consequences. In 1984 the US Catholic Bishops put out a pastoral letter in which they set down their priorities.

“Fulfilment of the basic needs of the poor is the highest priority;

“Increased participation in society by people living on its margins takes priority over the preservation of privileged concentrations of power, wealth, and income; and

“meeting human needs and increasing participation should be priority targets in the investment of wealth, talent, and human energy.”

Pastoral letter on Catholic Social Teaching and the US Economy, 1984

That is a much more radical statement than any comparable body has pronounced in New Zealand. It is however a statement which the founder of christianity would have no difficulty living with, if we are to judge from the accounts of his trip to the Temple in Jerusalem. That radicalism by the Catholic Bishops reflects the much harsher regime that exists in the United States. Perhaps in a few years we will see the New Zealand Church being as challenging.

Towards an Alternative

What is the alternative? It seems to me that the social services of the church will continue to attempt to cover the gaps created by the failure of the recent reforms. The point I want to make here is that, as magnificently as they will carry out the tasks, the social service organizations are going to fail in everything but the most limited goals. The Church no longer has the wealth and the power to replace the state as a source of social support. It can only attain its wider social goals by reforming the state institutions.

Because it will succeed only in very limited goals, the Church will have to speak out. How it does that, and how well it does that is in its hands. But allow this observer one caution.

There is on ongoing tension between working with the existing regime to improve attainment of the limited goals on the one hand, and reforming the state institutions to attain wider goals on the other. Cooperating with the powerful is seductive, to the point that people of goodwill can end up supporting that which on reflection they abhor.

I do not think that most of the representatives of voluntary societies which attended the IPS seminar really want the outcome they seemed to be agreeing to. Similarly much of the current research on poverty is not intended to support the current social security regime. But it does, while it undermines the research which critiques the establishment. It is a difficult line to walk between the needs of the poor and the power of the wealthy. The church has been doing this for 1600 years, not always with success. The path today is no less difficult and relevant.

The modern welfare state is a gift of Christianity to the industrial society, for it came out of its most fundamental social principles. Today the Church can no longer to apply directly the principles on the required the scale. That gift is under extreme pressure from those who would replace the principles with sole self-interest under the disguise of “liberty”.

The ability of the Church to renew its gift, by reaffirming its principles is one of the greatest challenges it faces to day. Instinctively we know if it fails in this task, then the Church itself is likely to disappear shortly after.

[1] G.Hawke & D.Robinson (ed) Performance Without Profit: The Voluntary Welfare Sector in New Zealand.