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Neoliberalism in Australia

Introduction

According to Clift and Tomlinson (2007), Keynesianism was a political-economic crusade that began in the 1930s and ended in the late 1970s. Its objective was to stimulate economic development by guaranteeing full employment. The model assumes that if people are employed and have money, they have purchasing power and would lead to economic growth. On the other hand, Neoliberalism was a political movement that began in the 1980s as a result of the stagflation that occurred in the 1970s. Its objective was to enhance societal well-being via the encouragement of competition among individuals (companies). The government aimed to guarantee the smooth functioning of the market with minimal distortion. Thus, this paper will aim to assess some of the impacts of the rise of neoliberalism on the Australian social policy by examining relevant recent Australian literature.

Impacts of Neoliberalism on Australian Social Policy

First, neoliberalism fosters inequality in term of social provision (Stebbing and Spies-Butcher, 2013). Given that the Australian welfare state was established on the concept of the “wage earner” which depended on market regulation as opposed to spending policies and direct tax regulation, policies which liberalize capital markets and labor largely affect the country’s social policy (Mendes, 2008). Moreover, given the nature of neoliberalism, social policy in the Australian context has changed considerably as the government pursues to boost “choice and self-reliance” via marketization. One of the key areas that have been impacted by neoliberalism is the Australian tax system. The current tax concessions lower the amount of taxes that are paid by individuals pursuing certain activities such as investing in superannuation or housing (Deeming, 2013). Benefits from these investments are directly proportional to the overall contributions made by these individuals; therefore, those who make huge contributions receive more benefits. Moreover, support relates to these concessional tax rates and as such, the benefits increase respect to an individual’s marginal tax rate. In addition, housing is also subject to this social inequality in relation to savings. In Australia, the public equivalent private housing is stigmatized, lowly financed and restricted to a small populace offering a strict “safety net” despite the fact that housing is key to social participation and individual welfare.

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