The welfare state has enormous shortcomings, but the left's job is to protect it.

The labour movement was once about the dignity of labour, now too often it's about the dignity of welfare. The welfare state was designed to remove the ancient fear of sickness, old age and accident. People were to get an adequate income as they recovered, retrained and moved back into the workforce, or as they retired after a lifetime of work.

It was socially just and made economic sense.

The class system stole from the economy the talents of the many who could not contribute to the maximum of their ability because education was beyond their financial or social reach. Cutting people out of the productive economy because they were women or the wrong colour or wrong class was a cruel abomination and economic stupidity.

The welfare state was meant to be a springboard, not a way of life.
In New Zealand, Labour leader, Peter Fraser hated loafers and told the New Zealand parliament in 1945 that the treatment of such people should be to put them in a large tank, pour water into it and give them a pump to keep the water level down. If they didn't pump continuously, they would drown.

Now what's happened? Thirty years ago in New Zealand there were 28 full-time workers for every person on a full-time benefit, now it's just four to one.

Over the past 30 years, beneficiaries have increased tenfold, from 35,000 to more than 350,000. The number of solo parents has exploded from 12,000 to 120,000. In just 20 years, the number on sickness benefit has risen from 8000 to 43,000, and those on disability benefit from 18,000 to 72,000. One child in three lives in a family supported by benefits, and a quarter of all children live in a solo-parent home. Include pensions, and welfare accounts for more than a third of all government spending, dwarfing investment in education and health.

Just in case Aussies think this is a Kiwi problem, 40 years ago in Australia, 3 per cent of the working population was on welfare, now it's 16 per cent. The proportion of workers to beneficiaries is slightly better than New Zealand at five to one, yet 40 years ago it was 22 to one. New Zealand historian and former labour minister Michael Bassett recently pointed out that "an iron triangle of politicians, bureaucrats and beneficiaries band together to resist change". Any questioning of the status quo is greeted with cries of heartless, cruel, unchristian by pressure groups who harvest headlines and live good lives running this industry.

Bassett suggested that "increased welfare dependency coincided with the declining role of religion in people's lives. Churchmen and women, having lost their congregations, found a new missionary role in promoting welfare". They capture the process posing piously as principled, but the process and its ownership become more important than the objective to get beneficiaries back into the mainstream.

Chairman Mao also proudly proclaimed "rather socialist weeds than capitalist crops".

It's about incentives. People are not dumb. If working means only a few dollars more than being on benefit, you'd have to be a mug to go to work. But, what happens next to people? What happens when there's two, now close to three, generations of people who have never worked? Is this a socialist solution? Hell, no.

The other great change is that some in the new left have moved the goalposts dramatically.

Labour has always believed in the equality of opportunity. That's why there is a labour party. However some social scientists, puzzled that in the end people are not the same, now talk of equality of outcomes, not equality of opportunity. That's a profound change, which takes us down the slippery road to quotas, rigging examination results, social engineering, and the softening of standards.

Labour's policy must be to recreate the social and economic mechanisms to provide greater opportunity and have a welfare state that is a liberator of the people, not a straitjacket or a prison to trap people into dependency. Just as it took labour governments in both Australia and New Zealand to open our economies, the benefits of which are now so apparent, it should be labour's modern mission to redesign the welfare state.

In Australia, with an election just having been called, the mission of Latham's Labor should be to radically remodel and save the welfare state. Because sure as hell the others will sell it off.