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Six Pillars of Wisdom

Have you picked up on the government’s latest three word slogan, “paid with savings” yet? Each new initiative announced recently, where money is involved, comes with the new mantra “paid with savings.”

The government has got the ever vexing question from the media covered. “How are you going to pay for it?” they ask. “Paid with savings,” they answer. How cute.

Meanwhile, we read that Labor, via Jenny Maklin, will release its review, “Six Pillars of Social Policy” early in the new year. Maklin, an economist and Opposition spokeswoman for families and disability payments reform, has said that central to Labor’s social policy framework will be employment. What? Surely not!

She also revealed that in framing social policy she had spoken with Nobel Laureate, Joseph Stiglitz who, it would seem, has convinced her that inequality is bad for growth. Did she need convincing?

The six pillars revolve around Early Childcare, Education, Employment, Work and Family Life, Active Ageing and Community Cohesion.

mak Macklin told Guardian Australia the review, which will be released before parliament sits next year, would place employment at the centre of social policy framework.

To say that this is a refreshing approach and long overdue would be putting it mildly. Any economist, not hamstrung by sectional interests, would tell us full employment is the key to a growth economy.

A successful economy must include everyone, fairly and inclusively, not submit to sectional interests, or rewarding friends to the exclusion of the broader community and it staggers me that it should even be necessary to say this.

One can only wonder what drainpipe has our nation been flushed down that we need to have a new social policy framework that includes full employment explained to us? But the fact is, we do need it explained.

The present government does not care about employment beyond lip service and a large body of corporate advice comes to them upholding this view.

They uphold this crazy piece of wizardry called the NAIRU. It stands for the Non Accelerating Inflationary Rate of Unemployment. Without sending you to sleep with the boring detail, it means simply that there is a rate of unemployment we must not fall below, for fear of inflation taking hold of the economy.

pool It means, there must always be a pool of unemployed to protect the super wealthy from a decline in their living standards. And, believe it or not, western styled governments everywhere accept this rubbish.

Jenny Maklin’s six pillars of social policy would appear to see it differently. Let us hope so. But the real barrier to convincing a greedy, self-centred, wealth oriented nation that this could work, will be that haunting and much feared question that has a tendency to kill off any Labor initiative: how are you going to pay for it?

Maklin says, since Labor lost government she has consulted over 100 experts in their field on the changes necessary to address today’s family and work life. The present, outdated formula dates back to the 1950s, when the existing social policy legislation was framed.

“Some people just see these things as a cost,” she says of the NDIS (the National Disability Insurance Scheme) which she introduced in the dying days of the Labor government. Yes, they do. So how does she propose changing the nation’s mindset to one of recognising that social policy is an investment?

And more importantly, how does Labor plan to demonstrate that social protection and social investment can be used in the same sentence? One can just see the Coalition salivating at the thought of fighting an election on the issue of a social investment.

“More welfare,” will be the cry. “Labor will bankrupt the nation,” they will scream in panic. It’s all too familiar. The idiot majority out there fell for it once, doubtless they will fall for it again.

A platform dedicated to full employment that embraces targeted educational skills and is a companion to dedicated childcare, health and family needs, is a no-brainer, so what’s the problem?

stupid The problem will be explaining it in words of one syllable sufficiently simple to rise above the negativity that the Turnbull government will thrust at it, a negativity the Australian public finds so easy to digest.

I just hope Labor have taken that minor piece of detail into consideration. And I hope they can explain how they plan to pay for it without exposing themselves to ridicule.

Somehow I don’t think ‘paying with savings’ is going to cut it.

22 comments

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  1. king1394

    The failure to recognise that people are the major asset in the economy leads to such nonsensical thinking as believing we need a certain level of unemployment (read poverty) to hold the economy in check against runaway inflation. The sooner productivity is seen as being about people living well and contributing to society, either through paid work for an employer, OR through generous government supports that encourage learning, social activity, volunteering etc. The wealthy freeloaders in our society avoid paying taxes for the many needs of all, and our foolish government manages its revenue problems by cutting the programs that most benefit society in general – and things that were once recognised as a ‘social wage’ – parks, swimming pools, sports fields, national parks etc. The Government even fails to provide infrastructure that would support business and provide worthwhile jobs, due to its fear of spending.

  2. stephentardrew

    Tear my hair out, grind my teeth, sleepless nights, anxious days of unending stupidity presented as reasonable discourse completely undermined by the demonstrable failure of predictors of growth, saving, you name it, these fools, one an all, get it wrong for decades yet claim they are purveyors of truth, a truth that is no more than a viscous lie meant to keep the gravy train rolling and inequality on the move. No politician will lose. I bet you cannot say that fellow citizens. Look at the US and EU the great Ponzy scheme in the sky that is about to collapse once again meanwhile you sleep in complicit ignorance. Already the EU are using client savings, that is your savings, to bail out Banks mired in derivatives. Savers can lose everything. The farce that was meant to replace Glass/Steagle and the separation of savings and finance, Dod/Frank is riddled with holes inserted by too big to fail banks to allow 10 trillion dollars worth off balance sheet derivatives to remain untouched.

    Meanwhile the great thinkers of our time, Mosely, Mitchell, Keen, Kelton, Hudson, Picketty etc., who have a critical theory for the resolution of the debt nonsense, are kept out of the mainstream. Modern Monetary Theory is the way to the future and if you do not listen many will lose everything and there will be drastic consequences simply because people could not admit they are being shafted by pure greed and avarice.

    If this does not wake you out of your party bias stupor then nothing will.

    Your Life Savings Could Be Wiped Out In A Massive Derivatives Collapse by Ellen Brown

  3. John Hermann

    No sovereign nation that issues its own currency can go bankrupt. It cannot happen, unless that nation foolishly gives away all of its sovereignty (as members of the Eurozone have done). And no sovereign nation whose political leaders have a moderate understanding of macroeconomic principles (a big ask, I know) needs to worry about undue levels of inflation. As long as government spending does not exceed the nation’s capacity to produce goods and services, there is nothing to worry about. At present Australia has a vast level of unused capacity, made worse by the coalition’s misguided program of deep budget cuts austerity. The risk to this country that we need to confront is not inflation, but rather, it is the prospect of deflation.

  4. Matters Not

    Macklin was once Deputy Leader of the ALP and was a rather poor performer in that role.

    Having said that, she is a policy developer extraordinaire. Further, she is across the detail. Expect her efforts to have conceptual consistency. Hope she is working on the financial detail with Bowen and Leigh who are also across their portfolios. It will be the ‘cost’ that will be most under scrutiny because that’s all the MSM can grasp.

  5. John Hermann

    Bowen is no better than Swan (or for that matter Hockey, or Morrison) in his understanding of basic macroeconomics. Having a degree in economics seems to be of little use to them in acquiring such understanding.

  6. diannaart

    How Labor can answer the “how do you pay for it?” question.

    The same way the LNP pays subsidies to big business and the ever expanding defence budget.

    Imagine the outcry…

  7. cartoonmick

    In general, the judgement of many pollies over the last 10 years or so, indicates they’re not very clever in most areas.

    I guess we can’t have perfection in leadership, but gawd knows how the hell some of them got into power.

    There’s certainly an underlying flaw somewhere, as indicated in this cartoon . . . .

    Editorial / Political

    Cheers

    Mick

  8. Richard Leggatt

    When faced with the accusations of “More welfare,” “Labor will bankrupt the nation,” The response is simple; In implementing the NDIS we will be creating employment in this valuable services area whilst also lifting people up who might otherwise be struggling with their disability. Some of these people will then also seek employment where previously they were unable! By implementing Gonski, we will be employing more tradespeople to repair those schools that have been allowed to fall into disrepair by previous conservative governments. We will be employing IT professionals to improve the schools computer systems. We will need to hire more teachers because retention rates will be rising and class numbers will be falling! Any other questions?

  9. Matters Not

    John Hermann:

    Bowen is no better than Swan (or for that matter Hockey, or Morrison) in his understanding of basic macroeconomics

    Re the understanding of basic macroeconomics, could you name a few Treasurers who did? Costello? Willis? Dawkins? Kerin? Hawke? Keating? and so on.

    Or do they all fail the test?

  10. kerri

    I like Jenny Macklin’s thinking! I have told all and sundry for years that the three things that hold a progressive nation together are Education, Policing and Health.
    Coincidentally they are the first three areas the conservatives slash!
    How can a society progress if it is lawless? Take the gun riddled parts of the US or the middle east?
    How can a society progress if it is uneducated? Take the superstitions and consequent mob mentality of any underdeveloped nation? And the US of course!
    How can a society progress if it’s members are continually ill and disease and damage is rife?? Take the US private health insurance rip off?
    This is what the conservatives dont get because, after all, they can afford all of that and then some, so what is everyone else’s problem?
    How can a society progress is private industry is not making squillions?
    Do I really need to answer that?

  11. John Hermann

    Matters Not:

    “Or do they all fail the test?”

    The answer is obviously yes, however I thought two examples from each of the Labor and two Liberal parties would suffice to make the point.

  12. Ginny Lowndes

    Have you picked up on the LNP’s ‘new’ trickle down economic theory that is using the Digital Disruption to mask the re-distribution of education, health, internet access, transport & renewable energy taxpayers’ dollars upwards for the sole benefit of the wealthy?

    As TAFE closes in favor of ‘private colleges’, Gonski is ended in favor of private schools who need a second Olympic pool, Medicare is denying access to its services & shoving people towards the more expensive ‘private health insurance’, the NBN is denied/by-passed to poor postcodes who will have to buy access from private companies like Murdoch’s, a private form of transport that is solely about roads not public transport & renewable energy that has been de-funded first by Howard who blocked solar, Abbott who blocked renewables and Turnbull has blocked both plus easy and cheap access to the NBN.

    AlI can say is boot this mob out – the sooner the better.

  13. flohri1754

    Very insightful column …. and very thoughtful responses! Good to see …..

  14. Wally

    “paid with savings”

    If it looks like bullshit, smells like bullshit, sounds like bullshit or squashes between your toes you can be pretty sure it is bullshit!

  15. OldWomBat

    Any deviation from the self-destructive path that we as a nation are following, and have been for many years, requires a fundamental change in how we view our own needs and the inherent responsibility we have for others. This is not easy. We all complain about big business and their tax avoiding and other schemes. We quite legitimately ask: rather than an annual profit of 6 billion why can’t they be satisfied with 5 billion and return the 1 billion to the nation, via taxes or some socially responsible endeavour? Business will respond that they aren’t doing anything illegal, they are just using the system and they are responsible to their shareholders, most of whom are other businesses like themselves. Are we, as individuals, any different? In general we seek to use the system to minimise our taxes and maximise our incomes. Admittedly the options open to the average person are rather limited and the “gains” rather small compared to those open to large companies, but the thinking is the same. In doing so we have removed from our thinking any moral or ethical consideration of the impact of our own actions on other people. It may be chicken-feed relative to the impact of big business, but every bit adds up – relative size doesn’t matter. The approach being advocated by Ms Maklin is welcome, but until the collective mindset, business and individual, changes from its self-centred me-me-me attitude to one of understanding that we have a wider responsibility beyond ourselves, the LNP “how will they pay” argument, unfortunately, will continue to be a winner. Sadly all our institutions, religious, business, unions , government, who would notionally provide the real leadership required, have failed us. But more sadly, we have failed ourselves, for it is through our own actions that we all march down this self-destructive path.
    A bit rambling but I hope you get the drift.

  16. Matthew Oborne

    Technological unemployment alone will see unemployment rise beyond critical levels. The guardian wrote an article saying rather than look at home ownership as a measure of growing up we need to look elsewhere.

    Are we giving up on our children?

    There are people in our communities who help others, who have hobbies that products goods art and crafts, India has long been able to sell the labours of individuals crafts to itself and the world, we should embrace many of the human assets we already have.

    Working with people to help them realise their goals whether it be self supported employment or someone needing to find themselves or someone just happy with a simpler hassle free job.

    There are retired engineers who have metal lathes in their sheds, turning out ideas, Lovers of wood making dolls houses, furniture and goods. People who like to sew, knit, do leadlighting yet no Australian government has ever really bothered to connect these people with a market.

    There are programs in third world countries providing sewing machines and help for people to turn their labour into goods themselves yet we seem to think people wouldnt want that here.

    Would you prefer a rocking horse made in china or one made by a retired person who has perfected their skill and does it because they enjoy it?

    In a world or throwaway rubbish we have many people who value craftsmanship enough to do it and to pay for it.

    If we have right to work that is a step forward, if we recognise people of all ages can contribute within their ability and on their terms we have made a great leap.

    Take the authors on this page as an example, some have learnt the art of Journalism, some still are, some study politics to such a degree it is a calling. The value of opinions that can easily reference political issues far into the past to put an issue into context is invaluable.

    Why shouldnt an activity like this be supported?

  17. CommonA

    Given that you do not agree with the no-value labour in “work for the dole” schemes (does not build esteem)
    That means you agree with some-value labour for all those not currently employed (gainful employment)
    That means that the new government work force will compete with businesses who already perform those tasks
    Which will inevitably result in some businesses closing down, resulting in a larger government employed workforce.

    At this point either more people do the same jobs, and the government is a monopoly in those service areas with less and less actual work performed by those “employed”, which eventually makes government work expensive and ripe for “privatisation”…. Or you expand the scope of the work performed by the government work force, competing with more non-government businesses, until they too fold, and so on… resulting in a Communist/Socialist government where everything is run by and for the government.

    At the moment I can’t see Modern Monetary Theory as more than communism by stealth.
    Tell me, at which point does my logic break down?
    What safeguards would be put into place that would protect current jobs/businesses from government competition?
    Are private schools an example of how I am wrong, and could that apply to all sectors?

  18. Matthew Oborne

    In another article I posted what I believe, I believe many people already have hobbies and ways they contribute which should be seriously looked at in terms of helping them support others and themselves.

    I.E. an old retired carpenter making toys and doll houses should be helped in selling his goods, or an unemployed or disabled person the same thing. One size doesnt fit all and many could find their own ways to contribute, painters actually getting their works sold and hung in public areas embracing peoples willingness to want to create.

    You dont have to support business to support people, and the economy wont collapse if people have ready markets made to sell their hobbies and crafts for them.

    The world you propose is black and white one gains another loses, yet that is not the case.

    Yes business would have to offer the same conditions and wages of other schemes to attract workers, but that is putting market forces in the hands of people not capital.

  19. diannaart

    I often wonder where “business needs to attract workers” went.

    In this back to the future world businesses don’t have to do anything except call the shots.

  20. Pingback: Six Pillars of Wisdom | THE VIEW FROM MY GARDEN

  21. Wally

    diannaart

    Unfortunately nowadays too many businesses do believe it is up to them to call the shots and therefore we have a greater percentage of casual employment than ever. Once upon a time (fairy tale nowadays) casual employment was a means to see if an employee was suitable for the job be it full time position or permanent part time and there was a limit on how long an employee could be a casual for.

    How does a casual worker obtain a loan or commit to anything to benefit their future?

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