Those are some funny conclusions.
Of course there's an underclass - when you've got two people,
regardless of how close they are in status, there will already be
an underclass. 
I don't see your figures leading to the conclusion that the welfare
system is specifically to blame, and if drug dealers are so hard to
convict, where are your figures for that? Unlike some places, the
Australian justice system does not presume guilt, and looking at
Indonesia, the presumption of guilt is doing little, if any, to
stop the flow of drugs in places like Bali.
Given the strength of the Australian dollar and how well its
economy has survived the events of recent years in relation to its
neighbouring countries, the idea that Australia is going from First
to Third World is completely laughable, especially in light of
Singapore's slide in previous years.
Do take note that you're talking about reported
crime rates, rather than actual crime rates. Ergo, a lower reported
crime rate in another country may be the result of less faith in
law enforcement, rather than lower rates of incidence per se.
Besides, I'd rather have my house broken into or car stolen than be
assaulted (9 other countries rated higher), killed (10 countries
higher), robbed (14 countries higher) or kidnapped (so many
countries higher that Oz didn't even make the list).
By the way, Cuba has reported a 100% literacy rate to UNESCO - does
that make Cuba a First World country?
The numbers you have posted, unfortunately, make no contribution
whatsoever to your conclusions. I would suggest you develop some
literacy in statictics before proceeding to embarrass yourself any
further.
