A New Case for Small-Government Conservatism

Tony Abbott’s speech at the launch of Jim Allan’s edited collection of essays, Making Australia Right: Where To From Here? (Connor Court, $29.95), received saturation media coverage because Abbott’s remarks were reported through the prism of federal leadership tensions. The immediate result was to inflame the manifest divisions that currently exist between the progressive and conservative wings of the centre-right movement in Australia; many of the former Prime Minister’s parliamentary colleagues lined up to speak out against his allegedly disloyal ‘wrecking’ against the Turnbull Government.

The hostile reaction was unfortunate; there was more substance to Abbott’s launch speech, and to his canvassing of the book’s significance, than the media reports indicated. The important ideas contained in Making Australia Right (to which I contributed a chapter on health policy) are of great importance to the future direction and cohesion of the centre-right. A key idea specifically singled out by Abbott deserves extended exploration because it is highly relevant to how the ‘little local difficulties’ within the broad church of the centre-right can be resolved.

The idea is a socially conservative approach to social policy which, contrary to the conventional political wisdom, utilises state intervention to reduce the size of government. When correctly understood and appropriately applied, this formulation of centre-right principles constitutes a re-branded political philosophy — ‘Small Government Conservatism’ — which illuminates the reasons both wings of the broad church need each other to achieve their objectives. Establishing the common ground on which the progressive and conservative wings can unite around shared political and policy means and ends is essential if the centre-right is to solve the range of complex social and economic problems it confronts — which I describe here as ‘state-sponsored poverty’ — and achieve the ultimate goal of smaller government.

Abbott’s speech drew particular attention to the chapter in Making Australia Right, by Gary Johns of the Australian Institute for Progress, which discusses a centre-right approach to dealing with the entitlement culture.

The entitlement culture refers to the wicked political problem faced by centre-right parties in virtually all western democracies, in which there are more voters who are net recipients of taxpayer-funded welfare, health, education, and other benefits, than there are net taxpayers likely to support tax cuts and economic reform.

Acknowledging that the cause of smaller government is unlikely to win elections, Johns maintains that the centre-right also needs to advance a cultural debate alongside the economic debate — a cultural debate that addresses the way “self-reliance has been undercut [by] the burgeoning welfare state.”

Johns’ argument is that the centre-right’s cultural agenda should not only make the case for economic freedom — important though that is. His counter-intuitive insight is that addressing social problems, such as welfare dependence, will require more state intervention and regulation, not less. Johns cites the example of mutual obligation requirements for the dole.

Johns’ position may be difficult for some on the centre-right to accept, given the premium that economic liberals and libertarians place on individual freedom, and freedom from government control and state intervention. Those who identify as economically dry and socially liberal in outlook, tend also to feel (and not without reason, given the default left-progressive outlook of the vast majority of journalists and other stakeholders) that culture war conflicts over conservative social values create political complications that gets in the way of economic reform and reducing the size of government.

The response from social conservatives tends to be that a centre-right movement that does not stand for traditional social values is not a centre-right movement. There are even suggestions (I have been told) that some members of the conservative wing of the broad church go further than this. According to some economic dries, some social conservatives even think that economic reform is not a first order issue because contemporary Australia is rich enough already. So-called ‘Big Government Conservatives’ therefore believe the real political challenges for the centre-right is instead to promote traditional  social values and protect traditional social institutions such as marriage.

If these positions represent the two polarised wings of the broad church, then both are wrongheaded for different reasons.

It is impossible for the centre-right to deal with the spectrum of policy challenges it faces in the 21^st century simply by trying to universally apply the first principles of either wing — be they economic liberal principles or social conservative principles.

The complexity of the problems confronting the centre-right are illustrated by the following ‘case study’.

Imagine the small business owner who leaves home to drive to work. On the way to the office, they pass a sole parent affected by drugs and pushing a pram with a couple more kids in tow, on the way from their rent-assisted housing commission flat to collect their fortnightly Centrelink payment.

When the small business owner arrives at work, they must spend time complying with a plethora of red tape requirements mandated by government (covering everything from tax to environmental to employment to health & safety laws and regulations), rather than spend time focusing on ways to grow the business, employ more people, and contribute fully to economic growth and prosperity.

This case-study features two different examples of ‘state-sponsored poverty’ afflicting the net welfare recipient and the net taxpayer classes. The salient point to observe, though, is that it is impossible to address both of the social and economic problems the scenario describes simply by applying the principle that less state intervention and more freedom is needed. If only we could so easily solve the dual social and economic challenges the centre-right faces in seeking to reduce the size of government. But the realities of the world as it is, rather than as one might wish it to be, are far more complex than this.

My perspective on these questions of policy and principle have been shaped by working both sides of the street, as it were, as a think tank researcher.  My policy work in the areas of health and child protection directly deals with the relevant matters of principle that divide the progressive and conservative wings of the centre-right.

Healthcare consumers one in every ten dollars in the Australian economy — and the cost will increase as the population ages. The inefficiencies in the public health system means more is spent more on health than should be; and this in turn means that Medicare literally makes contemporary Australia poorer than it should be, as health care consumes more than it should of the pool of scarce resources.

A politically-feasible way to achieve economic reform in health — as outlined in my chapter in Making Australia Right — would be to give people a choice in health, similar to the choice people have between public and private schools in education.

Australians who wish to do so should be free to opt out of Medicare. Individuals should be permitted to cash out their Medicare entitlements and deposit the taxpayer-funding that would otherwise pay for Medicare into a personal ‘superannuation-style’ Health Savings Account. These accounts would free people to use their own money to purchase their own health care and private health insurance — and reap the health and financial benefits of buying more efficient and cost effective health services.

Health savings accounts are a free market policy. This would entail, in essence, a voucherisation of the health system, based on Milton Friedman’s classic ‘freedom to choose’ principle, which would reduce the role of the state in health and allow consumers to sort healthcare out for themselves in the market.

However, in working in child protection policy, I perform a philosophical 180, taking a completely opposite approach to the principle of government intervention and the role of the state in solving the social problem of child maltreatment.

My research has shown that tens-of-thousands of Australian children who are seriously abused and neglected in welfare dependent underclass families need to be rescued, and would be much better off in life if they were removed from their dysfunctional parents and adopted by good families. (This summary cuts short a very long story that can be consulted, along with the supporting evidence, in my book The Madness of Australian Child Protection.)

Some may think it strange that a researcher working at a think tank committed to the principle of limited government is championing government intervention like adoption —the use of the awesome powers of the state to legally sever and transfer parental responsibility for children. The justification for the apparent departure from ideological purity — and the justification for Gary Johns’ like-minded approach to social policy — is that those of us on the centre-right live in a world we didn’t make.

The centre-right did not champion the ‘right’ to unconditional welfare that has entrenched poverty and dysfunction in disadvantaged communities, in which social norms around work, family and the care of children have broken down. Nor did those on the centre-right champion the other so-called progressive social changes since the 1960s that have contributed to the child protection disaster, such as the decline of marriage and the rise of state-supported single motherhood.

However, all citizens and taxpayers have to live with, and pay for the destructive personal, social and political consequences of the rise of the welfare state and the other changes associated with the social revolution and the rejection of traditional social values over the past 50 years — which have increased the size of government.

My position on child protection is that more state intervention is essential; but state intervention to achieve a fundamentally conservative social outcome: more underclass children being adopted into functional families. However, this is not simply a question of promoting a socially conservative agenda for its own sake. Child protection, along with family breakdown and dysfunction, is a social problem — but it is also an economic problem.

The child protection system costs more than $4.3 billion a year nationally and the cost has more than doubled since 2000. This is just the tip of the iceberg in terms of the costs of the social revolution and its contribution to growth in government spending, not only on child welfare, but across the whole of government in health, education, homelessness, domestic violence, justice.

Figures from the UK suggest that the 500,000 most ‘struggling’ families in Britain cost taxpayers more than £30 billion a year. There is no reason to think the costs aren’t comparable here. The implication is that if the centre-right wants to cut the size of government, it needs to support policies that can shrink the underclass — and be prepared to advance a socially conservative social policy agenda where this is appropriate to address welfare dependence and social dysfunction.

The overarching implication for the centre-right, therefore, is that the centre-right must be a genuinely broad church; or, as I prefer to term it, a double sided movement that combines the principles of economic liberalism and social conservatism as complimentary — not antithetical — causes.

The centre-right must stress the importance of individual freedom, and economic freedom, in those policy areas where it is crucial and appropriate to restrict and reduce the role of the state.

But those on the centre-right also need to realise that the objective of limiting government will not be achieved without taking up the cultural challenge of promoting traditional social values; and not without using the authority of the state to advance those social values in conjunction with our economic values, in those policy areas where this is clearly crucial and demonstrably appropriate.

The further implication is that being socially liberal and economically dry can be self-defeating. This formulation of political belief can prove incoherent in terms of the means and ends pursued – an economically liberal order must rest on strong, socially conservative foundational institutions, especially the traditional family.

This also suggests that ‘progressive’ advocates of smaller government who are not prepared to have second thoughts about the social revolution, and about the importance of traditional social values — including the importance of marriage as a social institution crucial to the welfare of children — aren’t really thinking about what is actually required to achieve smaller government.

With regards to the political outlook and objectives of the conservative wing, it is equally misguided for social conservatives to suggest the economy doesn’t matter, and that a socially conservative agenda for its own sake is what the centre-right should be solely focused on prosecuting in un-splendid isolation.  Social conservatives must also cast their values in policy terms, and adopt and adapt the language of economic reform and smaller government, if they want their principles and objectives to have relevance and gain traction across both wings of the broad church.

Neither wing can afford to see the broad church as a dysfunctional marriage of political convenience (let alone inconvenience). Both wings need each other more than they realise to achieve their political goals, because socially conservative means are needed to achieve economically dry ends, and vice versa.

Both sides of the progressive and conservative divide need to be realistic about the practical importance of a socially conservative cultural and policy agenda to reduce the size of government. By adhering to the principles of Small Government Conservatism, a shared commitment to common social and economic policy means and ends can forge a renewed unity of political purpose within the broad church of the centre-right.

Jeremy Sammut is a Senior Research Fellow at The Centre for Independent Studies. This is based on a talk given at meeting of the NSW Young Liberals Movement in Sydney in March.