The Coalition has some things right.
They are right when they say we must invest to create a better future for our children. Unfortunately, they think this means buying your one year old, or your twenty year old, a negatively geared property.
They are right when they say we should utilise our untapped resources. Unfortunately, they think this means mining coal and selling off public assets.
They are right when they say we should support the lifters in our economy. Unfortunately, they think that means boosting the profits of foreign shareholders.
Investing in the health, education and well-being of our children is both an investment that brings huge economic and social reward and an obligation that we have to preserve what we were given and to pass on a society better than the one we inherited.
Children should not be homeless in this country. They should not be living in poverty. They should not be living in fear of domestic violence.
They should have access to quality universal healthcare and public education. They should have the support necessary to achieve their potential regardless of their socio-economic background. Their aspirations for tertiary education should not be unaffordable dreams.
They should have a realistic expectation of meaningful employment after their education. The dream of one day buying a home should be attainable by hard work and saving without the assistance of wealthy parents.
The greatest untapped resource in this country is the vast number of unemployed and underemployed people. Getting them working would provide a huge boost to the economy just as women did when they entered the workforce in large numbers.
But you don’t achieve this by giving tax cuts to companies, many of whom already reduce their tax obligation to nothing by quasi-legal means, and tax cuts to the megawealthy who would rather pay an accountant than have to pay a cent in taxation.
Fifty-five of Australia’s highest earners paid no income tax at all during 2012-13, not even the Medicare levy.
Between them they reported earning $129.5 million, an average of $2.3 million. By the time their accountants had finished with them they reported losing a combined $12.8 million.
Forty of them claimed an extraordinary $42.5 million for the “cost of managing tax affairs” which is itself a tax deduction.
As Peter Martin suggests, the implausibility of someone earning $2.3 million and paying half of it to a tax adviser suggests some may be understating their earnings.
Most of the 55 claimed nothing for donations. However 10 of them gave between them $10.4 million, also suggesting their incomes were higher than reported. The gifts may not have all gone to charities. The Tax Office also allows deductions for gifts to political parties.
These people are presumably included in the “mum and dad investors with taxable incomes under $80,000” that Scott Morrison keeps talking about though I doubt any of them are nurses or teachers or police.
These people are not lifters. They are takers.
The group with the greatest potential to boost our economy is the group the government and the Murdoch press love to demonise – the unemployed.
To get the unemployed working, the government’s plan is to introduce an intern scheme called PaTH which will give employers a $1000 grant to take on free labour for up to twelve weeks with no sick leave, holidays or superannuation entitlements.
As Paul Syvret asks, “why, in a labour market where there are about 170,000 job vacancies but nearly 740,000 people unemployed, are we introducing this scheme at the same time as continuing to issue tens of thousands of 457 immigrant work visas each year?”
The first thing that should be done is to increase Newstart – even big business agrees.
A report by KPMG recommended raising the payment by $50 a week, an idea which has the support of the Business Council of Australia.
“It is so low that people are not job ready, they don’t have sufficient income to join the workforce, so that was one of our starting points that we need to solve that before we deal with other really difficult issues in terms of cutting expenditure,” KPMG’s head of tax Grant Wardell-Johnson explained.
The cost of this would be about $2 billion per year every cent of which, rather than being stashed in superannuation or negatively geared properties, would be spent and recycled through the economy.
Newstart is also indexed to the CPI rather than average earnings which means they do not share in improvements in living standards. Unemployment benefits have not increased in real terms since 1994.
If the unemployed have sufficient money to pay for essentials like rent, food, healthcare, clothing, transport and phone/internet needs, they will have a far better chance of getting a job and their children will have better health outcomes and education opportunities.
Next, vocational and skills training should be accessible to all ages and affordable. Industry is changing and people may have to reskill several times during their working life.
Rather than vilifying the unemployed, they should be supported and nurtured as they have the potential to truly stimulate our economy and to contribute to productivity, growth, and the increased demand that will drive more jobs. Lift them out of poverty and we will all reap the benefits.
