Recent discussions of welfare reform have been unusually divided between those who see Australian welfare transformed by neoliberalism and those who argue social spending has increased. This chapter explores this tension. It argues economic restructuring has significantly increased market inequalities, undermining an older ‘wage earner’ consensus. Social spending has increased to mitigate these changes, but is increasingly inadequate. It argues that conventional analysis obscures large increases in far less equitable support provided through the tax system, while spending for those on the margins is increasingly conditional and paternalistic. This reflects ‘actually existing neoliberalism’ and the emergence of a dual welfare state that does less to ‘shrink’ the state than to transform its role from decommodification to enforcing market norms.
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