[WS:] Thanks for your input. However, I am not sure how racism affected welfare policies in Australia. It is quite possible to have welfare state for whites only as it was the case of South Africa under apartheid. In SA, apartheid was a response to labor militancy in the early 20th century that was particularly strong among Black working class. Apartheid effectively split the working class by creating welfare state for whites only and excluding blacks altogether. So if racism were a factor in Australia's welfare policies, one would expect a similar outcome - welfare state for the whites and exclusion of the aborigines. The later were excluded in Australia, but welfare state for the whites only did not quite materialized even under Labour governments. Why? I do not think racism can explain this, but institutional policies can.
Again, my hypothesis is that that socialist vs trade unionist influence account for the difference. Trade unions, especially those of skilled trades, went mainly for higher wages, wheras socialists demanded social protection policies. In Australia, socialists had limited influence as major fault line lied between Communist/anarcho syndicalist influences fighting against the war (WW1) and more conservative unions demanding high wages. The unions won. In Sweden, by contrast, labor was organized by socialists, hence the welfare state. This is not far from the Leninist line on limits of trade unionism.
-- Wojtek
"An anarchist is a neoliberal without money."