Do more than half of voters really rely on the Government for 'most of their income'? (spoiler: no)

The Claim

“more than half of voters rely on government for most of their income”

This claim has been repeated across the media and by politicians, including Sussan Ley in her time as Leader of the Opposition. The claim is often made in the context of alarmism about “big government” or a “culture of dependency”.

Where does this idea come from? The original source is an offhand remark in an analysis paper by the Centre for Independent Studies (CIS):

“When we add public and quasi-public employment to the substantial part of the population that relies heavily on government welfare payments for their income, it is likely that more than half of voters rely on government for most of their income.”

Despite all the attention this has received, it doesn’t appear in the paper’s summary and isn’t backed up by any calculation. So, what happens if you actually run the numbers?

The Facts

It is not true that more than half of voters rely on the government for most of their income. CIS try to assert this claim based on an incredibly broad definition, but even if this definition is accepted, the claim is still untrue.

Let’s run through some numbers.

There are about 21.4 million adults in Australia; while this is not strictly the same as ‘voters’, it is close enough for reasonable calculations.[1]

So, for the claim to be true, 10.7 million adults in Australia must ‘rely on government for most of their income’.

While readers likely assume that ‘reliant on government’ means getting most of your income from welfare payments, the CIS definition also includes public sector and ‘quasi-public sector’ wages.

How many people get most of their income from welfare?

Analysing ABS microdata shows that roughly 20% of adults draw on government welfare as their main source of income, or about 4.3 million. The largest categories of these welfare recipients are people receiving the Age Pension (by far the largest group), Jobseeker (unemployment benefit) and the Disability Support Pension. The proportion of working-age Australians receiving welfare payments is currently at a near record low.

How many public sector workers are there?

Under the CIS definition, every public sector worker is defined as ‘reliant on government’, including every police officer, public servant, soldier, public school teacher, and public hospital nurse. There are about 2.5 million public sector workers in Australia. However, combining this number with the 4.3 million above only gets us to about 6.8 million Australians, nearly 4 million short of more than half of adult Australians.

What even is the ‘quasi-public sector’?

CIS draws the net even wider. Under their definition, not only is every public sector worker ‘reliant on government’ but more broadly anyone working in the large industries of: public administration and safety, education and training and healthcare and social assistance. This includes Australia’s entire private health and private education sectors and everyone from dentists to ballet school operators, to child and aged care workers, to ski instructors. This hugely broad definition expands the total ‘reliant on government’ to 9 million Australians. This is likely an overestimate due to issues such as double-counting.

Even using a bizarre definition, the claim is still untrue

You might have noticed we are still nearly 2 million short of ‘more than half’ of Australians (10.7 million). In other words, even if you define ‘reliant on government’ to include everyone from a pensioner to a tennis coach to a psychologist, CIS’s claim still falls short.

Verdict

The claim is completely untrue. Even using the original paper’s bizarre definitions, it is still untrue.

Additionally, it wouldn’t even matter if the claim were true. Despite handwringing about ‘big government’, Australia is actually a low-tax country with low public spending. Many countries have higher taxes, bigger public sectors, and a better quality of life than Australia, such as Nordic countries like Sweden and Norway. In fact, many of the ‘quasi-public’ jobs identified by the CIS would be better performed by the actual public sector; the history of privatised education, health and social care is littered with failure and scandal.

[1] The word ‘voters’ implies only counting Australian citizens. However, this distinction would not significantly impact calculations. The vast majority of adults in Australia are citizens, and many non-citizens are part of groups (eg permanent residents and New Zealand citizens) eligible to work in Australia and receive government welfare.