The following is and extract from Professor Bill Mitchell’s Blog – See Billy Blog
My purpose in distributing this extract is to ‘stir up the possums’ in the hope that some coherent policy re-drafting will be initiated leading to an electable Party and ultimately a Fair Go
This is what Professor Mitchell had to say-
What would I do about this situation?
I am on The Age/Sydney Morning Herald Scope Survey Panel, which comprises most of the prominent economists in Australia who on a semi-annual basis answer questions about the period ahead about likely movement in aggregates (GDP, inflation, employment, unemployment, wages, house prices etc) and other mo1. Fast track the shift to a non-carbon economy – for example, create the Hunter as a Renewable Hub Region and start investing in building that hub, which would span, research and design, innovation, manufacturing, sales, administration, technical support etcre qualitative assessments.
I completed my survey response for the next period ahead this morning and one of the questions was: -Should the federal budget contain extra measures to stimulate economic activity? What sort of measures? Should that include a bring-forward of the 2022 and 2024 tax cuts?
The current fiscal support is more than $100 billion short of what it should be. The Federal government has injected less than 9 percent of GDP and spread it out over several years.
When you think that the Japanese government’s first stimulus injection was around 21 percent of GDP and another injection of similar size is coming, the evidence is obvious.
Their unemployment rate has barely moved, our labour wastage is around 20 per cent (unemployment, underemployment, drop in labour force – hidden unemployment).
Tax cuts will not provide a spending boost – we saw that in the most recent cuts. Why? Because household debt is too high and people used the tax cuts to increase their savings and pay down their debt to make it less precarious.
You saw in the last National Accounts that the household saving ratio went from 6 percent of disposable income to 19.8 per cent as the fear of the pandemic (unemployment, income loss) saw a dramatic cut in consumption expenditure.
It would be better for the government to increase spending substantially, which will allow saving to be supported by the growth in income and will directly boost sales and jobs.
Initiatives the government should pursue:
1. Fast track the shift to a non-carbon economy – for example, create the Hunter as a Renewable Hub Region and start investing in building that hub, which would span, research and design, innovation, manufacturing, sales, administration, technical support etc. The choice of the Hunter is because it will allow local workers to see there is a pathway out of coal.
2. Fast track the design and contracts for a fast train from Brisbane to Melbourne – which should have been constructed years ago. Make it a public corporation which does not have to earn profits.
3. Reassert NBN Co as a public company and abandon its ‘cost recovery’ constraints and offer free services to retailers at fast speeds and regulate low retail charges.
4. Abandon JobKeeper and instead directly pay wages and salaries of all workers in line with their previous tax statements. Work around the edges for those without a tax record.
5. Fund TAFE properly to increase its capacity to train apprentices and fund the creation of thousands of apprenticeships across Australia.
6. Invest in manufacturing capacity to make Australia more self-reliant in a number of areas – health care, transport, renewables, etc.
7. Increase the funding to universities and regulate the salaries of the managerial class in that sector downwards as a condition for adequate funding of research and teaching. End the trend towards casualisation in the research sector.
8. Regulate the GIG economy to bring it in line with other labour market segments – that is, ensure full leave and sick entitlements are paid, no ‘independent contractor’ exceptions, superannuation contributions etc.
9. Require the Fair Work Commission to restore penalty rates to all workers who have lost them.
10. Introducing a Job Guarantee – an unconditional job offer in the public sector at a socially inclusive minimum wage, with full entitlements (holiday, sick leave, super payments etc) which allows anyone to work and choose their hours, choose training and/or formal education. This is not workfare. Abandon the unemployment benefit system. We need a wide ranging discussion about what constitutes productive work to broaden that concept and include many areas of unmet community and environmental care needs in our employment focus.
11. Introduce a state-owned bank that can provide competition to the big 4 and bring down charges, gouging etc.
12. Free child care.
13. Free public transport.
14. Enhance the career public sector in several areas – health, education, occupational planning, regional development – and end the trend to rendering the public sector a contract brokerage for outsourced private contracts for public service delivery.
15. Ensure the CSIRO, the ABC, SBS are adequately funded as public institutions.
16. Increase foreign aid substantially.
17. Abandon the Closing the Gap process, and restart it with proper targets that are properly funded – which will include many of the initiatives outlined above.
18. Stop defunding public education and revise the schooling funding model in favour of public schools.
19. Invest in 400,000 or more social houses to meet the massive excess demand and make housing affordable for low-paid workers and their families. This will be a big boost to the construction sector.
20. Retrofit the existing housing stock to make it more carbon neutral. There is a massive amount that can be done in this area to invest in smart housing technology for all families to militate against the climate emergency.
And that is just for starters!