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26/05/2016
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Ken Wolff
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people first
Tony Abbott liked to scare us with tales of violent terrorists coming to attack us and, therefore, requiring more and more security to protect us. Even if we thought he was crazy or going too far, at least he was addressing us. Think about Turnbull’s approach and ask where are the policies, even the broad approaches, that address us, the people and communities of Australia, and our needs.
Almost every decision is based on economic or fiscal policy and every approach is predicated on supporting business. Funding for social areas of policy has been left at the levels of the Abbott government, cut again, or given only minor increases that do not match the previous cuts.
The one significant social announcement by Turnbull occurred soon after he became prime minister when he announced a funding package addressing domestic violence. That, however, was so soon after he became prime minister that it had obviously been in the making for some time previously, so he cannot be given any credit for it. Otherwise, there have been no announcements on social policy, no education policy, no health policy, no social welfare policy: each of these areas have only been considered in budget terms to address fiscal policy.
Turnbull’s major policy announcement was the
National Innovation and Science Agenda in December last year. At the
launch of the policy he did say:
It is believing in our human capital and remembering that the best assets we have, the most important assets we have in this country are not to be found under the ground, but walking around on top of it is the 24 million Australians, the men and women of Australia, these and their ideas are what secures our future. And this package will incentivise, dynamise [sic], energise that enormous opportunity.
Pyne, also at the launch, made clear, however, that this was ‘
the centrepiece of the Government’s domestic economic policy agenda’. Despite recognising that people are central to economic activity, the innovation agenda remains an economic policy, not a social policy.
The government sees its role as supporting innovation:
… by investing in enablers such as education, science and research, and infrastructure; incentivising business investment; and removing regulatory obstacles such as restrictions around employee share ownership or access to crowd-sourced equity funding.
An emphasis on STEM education could be seen as having some social elements (Shorten had also spoken about that seven months earlier in his 2015 budget reply speech) but it is only as an adjunct to economic policy. Turnbull sees it as necessary for the jobs of the future but, as some have pointed out, there will be students who may need some, but not high levels, of those STEM skills, who wish to be plumbers, bricklayers and similar tradespeople. We will certainly still need such tradespeople into the future. Not everyone will be an entrepreneur or be starting high-tech companies. Turnbull just doesn’t seem to see that side of life. He sees such tradespeople only as small-business people and, while that may be true for a significant number, there are also many others who are employees of both small and large businesses. Where do they fit in Turnbull’s vision? Does he recognise that we actually have a shortage of skilled tradespeople as
reported by the Department of Employment in February? Why don’t we also have a focus on training more people for the trades rather than his continual focus on high-tech start-ups? His only approach to the trades is the re-introduction of the Australian Building and Construction Commission!
A major focus of the innovation agenda is changes to the business environment by such measures as a tax off-set for early stage venture capital, changes to the ‘same business test’ for tax losses and reforming insolvency laws. The idea is to encourage investment in risky undertakings and encourage risk taking and entrepreneurial activity — a cultural shift as he termed it. Turnbull said:
This is not just a list of measures and incentives and the levers that government pull, this package is designed to inspire. It is designed to lead. It is designed to encourage every single business, large or small to be more innovative, to be more prepared to have a go at something new because in the world of the 21st-century, in 2015, that is how you prosper.
Although the Abbott government had cut research funding, the innovation agenda returns some of that money but places a greater emphasis on research collaboration between businesses and universities and scientific bodies for that funding. It is creating a $200 million innovation fund within the CSIRO but the government is providing only $75 million of that (and providing only $5 million a year) and the balance is to come from the CSIRO’s WLAN licence fees and private sector support. Pure scientific research is taking a lower priority and yet it is such research that sometimes makes the breakthrough that leads to other developments that can then be utilised for commercial purposes.
On the other hand, out of the $1.1 billion for the innovation agenda, most of it ($814 million) is actually for existing projects that would likely have received ongoing funding in any case — the
Australian Synchrotron and the
Square-Kilometre Array. So even Turnbull’s commitment to the innovation agenda is a little misleading.
The innovation agenda also gave birth to the jobs and growth mantra: ‘innovation for jobs and growth’.
Just prior to the election announcement Treasurer Scott Morrison
presented the budget but said it was not a budget but ‘an economic plan’. He went on to state:
Australians know that our future depends on how well we continue to grow and shape our economy as we transition from the unprecedented mining investment boom to a stronger, more diverse, new economy.
They know that their future, their jobs and those of their children and grandchildren depend on it. This is a very sensitive time.
Australians have clearly said we must have an economic plan to make this economic transition a success.
This economic plan is the foundation on which we can build a brighter, more secure future, in a stronger, new economy with more jobs.
No mention of social issues.
The focus of the budget is on business: its key initiative is the ten-year reduction of company tax rates (at a cost of $48 billion). Like the innovation package, it is meant to support ‘jobs and growth’ but will also ‘increase real wages’ according to Morrison. The argument used by the government, and supported by many business groups, is that a tax cut will encourage re-investment in and expansion of businesses, leading to additional jobs. Although businesses continually argue this, it is not supported by history. Company tax for small businesses has already been reduced from 30 cents to 28.5 cents in the dollar from 1 July 2015. Historically, company tax has come down from 46 cents in the dollar in 1980. But we are now (again) suffering high unemployment and slow job growth, so why will an additional cut change anything?
The one announcement that may have a social aspect was:
… a new initiative to help more than 100,000 vulnerable young people into jobs, to be part of our growing economy by giving them real work experience with real employers that lead to real jobs.
But as that statement implies, it is all about economics, not the assistance those ‘vulnerable’ young people may actually need. Some may require health and social support before being ready for employment but that does not enter Turnbull’s nor Morrison’s thinking.
Some additional money was provided in the budget for hospitals and schools but it did not make up for previously foreshadowed cuts and was addressed primarily within the fiscal policy of the budget. The government had earlier announced that it would not meet the final years’ funding for education under the Gonski funding model: that model focused additional funding towards the most disadvantaged schools and students. ‘Gonski’ was clearly a social policy (with economic benefits from a more educated population) but the government’s approach shows that it is not interested in social policy — only economic and fiscal policy.
The same can be said of the government’s approach to health: it is primarily based on fiscal policy (and ideology favouring private health providers). There have been continual cuts to Medicare, through freezing the indexation of rebates, and to hospital funding — on 23 May Health Minister Sussan Ley revealed that it was, indeed, the Treasury and Finance Departments not ‘allowing’ her to
end the freeze on Medicare rebates. While the government emphasises economic policy, its approach to health ignores that a healthy workforce is also essential to economic activity.
Turnbull and Morrison claim they are providing record levels of funding for health and education but, given inflation and the fact that government revenue usually increases each year (only the rate of increase varies dependent on the health of the economy), such a statement is no better than stating they are providing more funding than in 1960.
In announcing the election Turnbull continued to ignore social policy:
At this election Australians will have a very clear choice; to keep the course, maintain the commitment to our national economic plan for growth and jobs, or go back to Labor, with its higher taxing, higher spending, debt and deficit agenda, which will stop our nation’s transition to the new economy dead in its tracks.
In Turnbull’s mind there is obviously no room for Labor’s spending on social issues. Such spending will undermine his grand vision of an agile and innovative economy. He went on:
We have an economic plan for growth and jobs. Every single element of it is designed, is calculated, determined, to deliver stronger economic growth and more jobs for Australians. On the other hand, our opponents are promising to increase income tax, they are opposing a tax cut for Australian businesses.
Of course he fails to mention that, after ten years, his business tax cuts will apply to all businesses, including the 6,000 odd large businesses in Australia and the multi-nationals operating here. He fails to consider that some of the $48 billion it will cost could have been used for hospitals and schools. Simply improving business conditions and encouraging business growth does not support people who need the welfare and other services provided by government.
Even his attack on Labor’s negative gearing policy included that it was ‘blocking the road to entrepreneurship’. As a former entrepreneur himself, Turnbull seems to see that as the height of human achievement.
I was surprised that it actually took Barnaby Joyce, in his brief election launch following Turnbull, to add a human dimension to the LNP’s approach. He actually
spoke about people and about politicians as people:
“We see the future of our nation through the regional towns and making sure that the problems in their lives, the concerns of their lives, are dealt with in a way that truly reflects the dignity of the people and how seriously we hold the job that they do. We have proven ourselves but we are merely at the start.”
He says he is looking forward to voicing the concerns of the Australian people in a sometimes fun, unscripted way.
“Making sure that we walk humbly with our people, not in a way that doesn’t let us have fun, not in a way that doesn’t mean that we are not, you know, turn(ed) into some peculiar creature that is completely scripted.”
What Turnbull is missing by his single-minded focus on the economy and business is that a strong economy is supported and underpinned by strong social policies: an education and training system that provides skilled workers and skills for young people entering the workforce (for all levels of jobs); a health system that keeps the workforce healthy and productive; a welfare support system that gives people the resources to be able to re-enter the workforce if they are able. Other social issues also have economic effects such as when people leave the workforce to care for aged parents or sick children and social policies should be in place that recognise this.
Even the concept of ‘healthy’ communities is important. If our communities are falling apart from lack of amenities, or even social dislocation, then that will also impact the economy. If communities are not willing, or are unable to work together, we will not even have a functioning society.
In other words, everything is intertwined. We need good social policies for what they deliver and achieve in their own right but, even in Turnbull’s terms, we need them to support the type of economic policy he is advocating. Why doesn’t he understand that?
Given Turnbull’s approach, Labor’s policy catch-cry, ‘putting people first’, may have some resonance. At least it is recognising ‘us’.
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