Contributed by Joe Montero
This week’s federal budget has failed Australia, for it does nothing to tackle the major problems the nation faces. While it is true that the economy was hit by the covid pandemic, the pre-Covid economy was not doing so well. In the real world, the loss of jobs, cost of living pressures, rising poverty, housing affordability and debt crisis, was the reality. On top of this, about a third of the workforces were in insecure, part-time, and low paid work. Real unemployment, according to Roy Morgan’s more accurate estimate, is that the full time unemployed was 9.5 percent of the available workforce in January this year. This does not count the underemployed and those underemployed and those who have given up looking for work.
Australia’s economy is bogged down in the multiple faceted problem of underperformance caused by a declining rate of return on investment, a finance sector increasing divorced form the real economy any reliance on increasing debt, the declining wages share of national income, and lagging consumer spending.
Top this with the fact that unless the problem of climate change is taken on seriously, the economy and living standards are in for a belting. This is already starting, as we can see with the rising extreme climate events. The damage they have caused is only a small taste of what’s waiting around the corner.
All of this has been overlooked by a budget focusing on war preparation and election con instead.
Whether or not Australia is emerging form the pandemic we don’t know yet. What we do know is that the problems that were real before are still here, and if anything, are getting worse. The only exception is unemployment. But this has its dark side. A large part is the transformation of once secure full-time jobs to into casualised insecure ones.
The usual retort is that Australia can’t afford to do anything different because of budget constraints. This is not true.
An investigation by an Australian specialist taskforce, created in the wake on WikiLeaks’s release of the Panama Papers, found that more than $2.5 billion in offshore funds was involved in another form of tax evasion. The Parliamentary Budget Office has admitted that clamping down on tax avoidance would raise $4.5 billion.
Existing tax law allows companies to pay no tax at all. If this is replaced by a minimum compulsory tax rate on gross profit, would return an even larger volume of money to the government.
It is possible to re-arrange the nation’s priorities. Australia does not need to spend up to $171 on nuclear submarines reported by the Australian Strategic Policy Institute, or most of the $575 billion been committed to the military expenditure. Nor should special arrangement that provide lucrative government handouts to large corporations. The fossil fuel industry alone got $10.3 of this corporate welfare last year alone. Another form of corporate welfare is the Cashflow Boost, which awarded the corporate world another $34 billion.
Get the picture? There is plenty of money for priorities.
A budget that changes the priorities to answer the real problems Australia faces would look something like this.
It would move to regulate finance, to ensure that investment will go where its needed and reduce investment that is not good for the economy. What this means is that investment should be channelled into rebuilding the productive economy, ensure that this is done so in a low carbon and sustainable way. It means directing investment away from unsustainable bubbles like the futures marker and real estate speculation.
Regulation of finance can be a means to ensure an end to the industrial scale tax avoidance and money laundering industry. This would raise billions of dollars, which could be put to effective use.
A new regulatory framework setting the limits for investment and the operations of financial institutions, backed by the establishment of important new public banks, namely, a national savings bank to provide an alternative to set the standards for all savings banks, a development bank to concentrate in providing capital for building the economy through providing financial resources to targeted sectors, encourage environmental sustainability, and provide further assistance where it is needed: and infrastructure bank responsible for financing major projects that are necessary for the economic and social health of the nation.
Bring in an industrial relations system that provide workers rights under law, including the right to belong to and be represented by a union, allow unions to properly access their members and shift the balance of power in the workplace. This would do more than anything else to ensure the increase of the wages share of national income and stop the destruction of decent fulltime jobs and he casualisation of work.
Increase all social security payments to enable those who depend on them to participate in society. This means increasing them to the minimum of around $650 a week. The millions of individuals and households benefitting would help to stimulate the economy and create new jobs.
Large scale new investment in affordable housing stock and rent ceilings. This is the best way to take on the problem of falling housing affordability.
Future prosperity will not come, without a population sufficiently educated and skilled to take on the challenges of the day and realising the capacities people have requires good health. This is why it is important to boost investment in education and health and ensure that it is affordable to everyone. Now that we’ve been rudely awakened to the fact that pandemics and other health related crisis are an emerging feature of our reality, Australia must be prepared with the skills and infrastructure to deal with the challenge.
Australia must do a great deal more about the climate crisis. Carbon emissions must be reduced to net zero as soon as possible, and this will only come about with serious policies that go further than talk and impose strict measures connected to a national plan for the transformation of the economy from being carbon fuel dependent to embracing new sustainable technologies and practices. Sustainability would be priorities of the development and infrastructure banks.
This is what a budget that is for people looks like