BOUNDARIES OF SOCIAL WELFARE IN AUSTRALIAN

Since the fall of the Whitlam government in 1975, budgetary policy of the Commonwealth has been framed generally in the context of fiscal restraint. The need to fight inflation by reducing budget outlays and deficits remained a constant theme with the Commonwealth governments under Prime ministers Fraser, Hawke and Keating. Commonwealth payments to the States, having reached high levels during the Whitlam years, were targeted for restraint throughout the subsequent years. A distinctive feature of the measures adopted for this purpose by the Fraser governments was the sharp reductions in the specific purpose payments to the States, while general purpose payments were protected by several guarantee provisions. In contrast, the Hawke-Keating governments slashed the general purpose payments to the States, and the share of specific purpose grants increased to more than half of total payments by 1994-95. Against this background, the role of the States in social welfare outlays has been creeping up, especially in the past decade. This paper traces this change in the traditional boundaries of governments and raises several questions about the sustainability of the new trend