Government has a role to play in reducing inequality... a role it has largely abandoned over the last few decades, working on the assumption that it is 'not their job'.
There is a large body or research and academic writing that points to our growing inequality and the role it plays in stagnating economies, as well as leading to adverse social outcomes around health as well as Law and Order. If it isn't the government's job to support a thriving economy and to ensure the delivery of a good level of social services to ensure everyone has the same opportunity to flourish, then what is its job? And if it is the government's job, then why aren't they doing more to address inequality?
An excellent example of where the government has failed in addressing (or failing to address) need - as outlined by the Gonski recommendations. It is uncontested that higher levels and higher quality education generally lead to higher income and better health outcomes. By not implementing the Gonski reforms as recommended (not as conceived by Labor or the Coalition), we are ensuring poorer health outcomes for disadvantaged groups.
This is the essence of the last of this year's Boyer lectures - addressing issues of fairness and equity at every opportunity. Professor Marmot refers to the principle as 'make every contact count'.
In the fourth Boyer lecture Sir Michael suggests that we need government action as well as action by communities. He insists we should be seeking to create the conditions for individuals to take control over their lives with the aim of creating a more just society that enables social flourishing of all its members.
This touches on issues such as a fairer taxation system, the better funding and targeting of services, but also the refusal of people to look at a problem and say 'not my job'.
Professor Marmot's fourth lecture is well worth a listen and you'll find it here.
Housing is a significant issue in Australia. We do need to address affordability through removing tax breaks around negative gearing and capital gains tax as per Greens Policy.
This is important for a number of reasons. It is a question of equity and of ensuring our monetary policy doesn’t widen the divide between the haves and the have-nots, between the landlords and the renters, between the young and the older members of our community.
It is also important to ensure that an essential service (or even a right) such as housing is taken out of the hands of those who seek to profit from it (developers, investors and bankers) and put into the hands of end-users… people who actually want a nice affordable place to live.
If it sounds like a pipe dream, it’s not. It’s already happening in Melbourne in an architect-driven project called Nightingale 1.0. You can read about it here.
This development ensures a triple bottom line… of social, financial and environmental sustainability. It delivers affordable, quality house that meets the needs of occupiers, not other rent seekers. And it is very, very popular.
The loser should such an initiative become more widespread would be the rent-seekers mentioned above. People do have a right to invest and to profit, but not on the misery of others and not is such a way that it 'ties up' money rather than allowing it to circulate and create wealth - which is how the current housing market is working.
While this is surely enough reason to drive change, there is another more compelling reason… we are in danger of returning to a situation where large numbers are living in ‘Slum Housing’… a situation we haven’t seen for more than a century.
Issues like overcrowding, houses in a poor state of repair, poor insulation, and insufficient heating and cooling are not just an issue for remote Aboriginal communities. Students and the unemployed (or under-employed) find themselves in similar situations. Not only is this unfair, it also means poorer health outcomes for these people… just as it did over a century ago.
The scale of this issue was recently revealed by researchers from South Australia and Victoria, who applied the HILDA survey and found that more than 100,000 people were living in properties regarded as very poor or derelict.
Many of the people living in this accommodation are already disadvantaged, and the state of their accommodation only increases their disadvantage.
Unless Governments take steps to ensure the supply of affordable, good quality housing we will see the re-emergence of slums, and the associated reduced life chances and shortened lives. The well-meaning architects working on the Nightingale project can’t do it on their own.
In Townsville we are suffering under an economic downturn, with high levels of youth and general unemployment. Some people have moved away, but others are still here suffering in relative silence. We have a responsibility to address these issues now.
There is more we can do. There is more we need to do. These issues are preventable, waiting for a time when we have to resort to the slum-clearing of a century ago is not an approach we should even contemplate.
by Wendy Tubman
The take home message from the recent budget was jobs and growth. We know this because Scott Morrison repeated this mantra 13 times in a 30 minute speech. He also repeated the word plan 21 times, as if to reinforce the idea that economic thought bubbles (like giving States taxing powers) were a thing of the past. And following the speech, Liberal MPs dutifully followed their talking points and repeated key words Ad Nauseum, without actually saying very much.
The only plan the government seems to have is to cut tax for small business and the wealthy, and, over the next 10 years, cut tax to bigger and bigger businesses.
But where is the evidence that this approach leads to more jobs?
And, setting aside for a moment the significant problems of advocating for never-ending growth on a resource-constrained planet, where is the evidence that it leads to growth?
Mike Seccombe pulls the ‘tax cuts leads to more jobs and growth’ approach apart in The Saturday Paper.
In 2012, the US Congressional Research Service looked at the effect of reducing income tax rates since 1945.
It found that, in 1945 the top marginal tax rate was 90% but by 2012 it was 35%, and stated: “Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment or productivity growth.”
It also found that “the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution”.
The Research Service also found that the approach increased growth in inequality (an issue we touched on in a previous blog).
But what about the Australian experience?
Investment - Bureau of Statistics data show that, since 1960, private business investment in Australia has trended slowly down as a share of GDP. Before the late 1980s, corporate tax rates averaged well above 40%. Since then, have been progressively reduced to 30%. But there has been no increase in investment as a result.
Economic growth - Up to 1988, the economy grew, on average, by 3.8% a year. Following reductions in corporate tax rates, growth dropped to 3% and is currently forecast at 2.5%.
Employment and Wages - The data show unemployment rates were lower when corporate taxes were higher, and that, since company tax rates have been lowered, the share of GDP going to wages has declined.
This government has asked as a part of its re-election pitch… who do you trust on the economy?
A sane person certainly wouldn’t trust the Coalition, given the deterioration we have seen since they took charge.
I would suggest putting more faith in a Nobel prize-winning economist such as Joseph Stiglitz who says it is “Those at the top spend far less than those at the bottom, so that as money moves up, demand goes down.”
Numerous Coalition policies are shifting wealth towards the top… to those who won’t spend. It doesn’t take a rocket scientist (or a Nobel Prize winning economist) to tell you that their plans will have disastrous economic outcomes for most Australians.
It’s a recipe for more job losses, less growth, more inequality and social problems, growing deficits, and even more tax cuts for the wealthy.
Who can we trust on the economy… not Scott Morrison for one. And although you wouldn't know it if your only news was from the mainstream media... the Greens do have an economic plan.
by Wendy Tubman
The Townsville Greens will publish blogs considered to be of merit. The opinions expressed are those of the Author.