Putting our money where Rudd’s mouth is

ON LINE opinion – Australia’s e-journal of social and political debate

Posted Thursday, 5 March 2009

Kevin Rudd claims the essence of his 2009 stimulus package is to get the economy moving again and to safeguard jobs. It is interesting that the rhetoric about employment in 2009 is less exuberant now than in December 2008 when he handed out cheques to pensioners, seniors, families with kids and nearly everyone who was poor. There was one exception. Those who were unemployed got nothing. Labor, in government, considers those of working age who are not receiving wages to be social pariahs. There is little in the 2009 package, apart from training initiatives, for people who are jobless. The only exception to this is that those who undertake specified training programs will qualify for a similar handout to those in employment earning less than $80,000 a year. Unemployed people in rural and remote Australia would have to pack up and head for the cities to find a qualifying training program and the $900 handout would not meet anything like the cost of shifting.

Many Aboriginal people living in remote Australia are being told that their outstations are unviable and that they will need to move to larger towns. Such shortsighted policies ignore the fact that people living on outstations have healthier diets than many living close to supermarkets. There is often less drinking and social disruption on outstations built on traditional lands than in the larger communities where people from disparate language groups are forced to live cheek by jowl. People living on their own land are likely to be productively engaged in craft or hunting and gathering.

It is interesting to compare the differing treatment being meted out to Aboriginal people in remote Australia and non-Indigenous people in the small hamlets of fire-ravaged Victoria. The Victorians whose houses burnt down have been told they will be given assistance to rebuild both their houses and community infrastructure. They are not being told that living in small communities in fire-prone areas is unviable and that they should shift to the larger towns.

If the Government is to succeed in getting the economy out of recession and keeping it out of financial trouble, it will need to do a lot more than prop up the banks with guarantees that it will bail them out if they make a mess of deciding to whom they should lend.

It will need to do more than promise to lend to developers who can’t get foreign banks to lend them money.

It will need to do more than hand out cheques from time to time to boost consumer spending.

It will need to work with the productive sectors of the economy which are socially and environmentally sustaining, to promote improved community services and increased production of manufactured goods.

Most importantly, it will need to stop dividing the population against itself. We can no longer afford to have a government denigrating those who have lost their jobs or any other group of people who fall from favour.

Assuming the government wants to maximise the number of people in paid work, then there are some things it can do:

  • it can announce a three-year guaranteed minimum funding package for the entire health, education, and community service sector. This will allow schools, hospitals, and community agencies to forward plan and ensure that employees in these sectors feel secure;
    on top of the public and social housing expansion already announced it could undertake to abolish it should immediately, as Professor Jon Altman of the Australian National University suggests, commit itself to continue the Indigenous Community Development Employment Program (CDEP) until such time as all the participants have been found other employment. (Altman 2009);
  • it might defuse the Opposition’s objection that the stimulus package is creating a debt burden for future generations if it ensures that the infrastructure developments it promotes will actually result in less pollution or greater efficiency in the future;
  • it could take up Professor Bill Mitchell’s suggestion of a “Job Guarantee” for those who can’t find paid work. Bill Mitchell and others from the Centre of Full Employment and Equity at the University of Newcastle point out that this would require the government to become the employer of last resort;
  • it could ensure, as several industry groups have suggested, that trade apprentices who are retrenched by their employer are found another employer or supported by taxpayers until they complete their apprenticeships; and
    it should ensure that whenever people who are unemployed decide they want to undergo training at school, TAFE, or university, they are assisted to undertake that training. In this way when we eventually escape the current downturn, we’ll have people ready to take up emerging employment opportunities.

There are several things a government, which is intent on seeing Australia emerge from the current economic doldrums, must avoid doing:

  • it must stop compelling unemployed people to undergo a merry-go-round of short-term Mickey Mouse training programs which do nothing to increase the long-term employment skills of participants;
    it must stop blaming those who are sacked for losing their jobs;
  • it should end the various rates of payment in the social security system. The differing rates discriminate against those who are unemployed and those who are students. They particularly discriminate against young people. Woolworths does not have a youth price for a can of baked beans; and
  • it must stop breaching people who, for whatever reason, displease their Job Network or Centrelink constabulary.

The reason it must avoid doing these things is that they destroy the morale of unemployed people, thereby making it more likely they will become homeless or have to rely on crime to survive. In the e-book Income Insecurity: The Basic Income Alternative, I expand on the socially destructive effects of existing social security payments and argue for a flat-rate universal “basic income” for all permanent residents irrespective of their marital, economic, or employment status. If we are to escape the economic stagnation which is about to descend upon us we must all (or as many as possible) pull together and we will only do that if we first build a social unity among all our citizens.

Putting in place a basic income is the first step in building the social solidarity necessary to have everyone working together. In the absence of a basic income, people willing to engage in and capable of doing whatever work was available under a job guarantee would be provided with a secure income. Those who are not willing to do that work or who are judged (by the job guarantee administrators) to be unsuitable would not be assured of a secure income. Basic income advocates argue that applying conditions to income support erodes freedom and that there is an ever-present danger that some people will be unjustly excluded in any conditional scheme.

It may seem a semantic debate as to whether the introduced scheme is a job guarantee scheme supplemented by a basic income, or a universal basic income supplemented by a job guarantee (for all who want to work) but I think it is more important than that.

If the basic income is not of central importance the job guarantee becomes the driving ideological force. This leaves the labourist/production ideological position in the box seat. We have witnessed how the Howard government used the work ethic to justify the exclusion of some very poor Australians from the social security system. The ideological message can be distorted by the suggestion that work has to be compelled when the central focus is on work and the job guarantee.

With a basic income as the central focus, the emphasis is on income security provided as a right of citizenship and quite different ideological forces come into play. Thomas Paine’s Agrarian Justice, published in 1797, gave birth to the idea that the right to a basic income stems from our right to use the commons. The ideological emphasis which a basic income brings is inclusive citizenship: the duty that each of us owes to all and the equally pressing duty that all of us owe to each.

With a basic income in place, the duration or depth of the recession will be less drastic than if the nation perseveres with the existing social security and industrial systems. This is so because a basic income provides sufficient money to each individual to ensure that no one starves, whereas under the existing system of social security many poor underemployed people are refused assistance and become destitute. In addition, the money provided by a basic income ensures that grocery and other stores supplying household necessities continue to generate income and in turn help power the wider economy.