About this Post
Libby Coker, Member for Corangamite, invited interested people to join her and Mark Butler in Portarlington on 15th April 2021.
Mark Butler made a very interesting presentation dealing principally with Australia’s vaccine roll-out, rising health insurance premiums, and the quality of aged and home care. He provided opportunity to ask questions and make comments.
Mark also discussed young people’s concerns about education and training, jobs, climate change and much more. Toward the end of his presentation, he drew attention to the Whitlam Labor Government’s education Policies. It abolished abolished tuition fees for students at universities and technical colleges.university fees on 1 January 1974. I then took the opportunity to offer some comments.
Whitlam Labor Government’s Education Policies – my comments
“When government makes opportunities for any of the citizens, it makes them for all the citizens. We are all diminished as citizens when any of us are poor. Poverty is a national waste as well as individual waste. We are all diminished when any of us are denied proper education. The nation is the poorer – a poorer economy, a poorer civilisation, because of this human and national waste”. See Whitlam Education Policies
From January 1, 1974, the Whitlam Government abolished tuition fees for students at universities and technical colleges. This enlightened initiative gave me an opportunity to go to University and join my daughter and niece, they on Campus and me external, providing opportunity for each of us for life-long learning and professional development. Family/Extended Family members used TAFE and other enhanced education and training opportunity. They and a great many others benefited very significantly,
By the mid-1980s there was consensus between both major parties that the concept of ‘free’ tertiary education in Australia was untenable due to the increasing participation rate.
The reason for being ‘untenable’ was really that it required more $$$$s and this was incompatible with the prevailing views of both sides of the Political mob. Had it been about available Resources – lecturers, premises etc, the brakes could have been applied to restrict the less immediately needed courses. Doctors and other Health professionals, Scientists Engineers etc – these are and were needed. Tax Accountants, Economic Geographers, Telemarketers and the like – these can wait!
In 1989, Labor introduced HECS, which was designed to make domestic students pay a proportion of the cost of their degrees. This proportion has grown, leaving graduates with substantial indebtedness. This “user pays” system was designed to push the costs of university funding more and more onto students in order to cut government spending.
After heated debate about the “Overseas Loans Affair” and the state of the economy, the Liberal Party used its numbers in the Senate to defer Supply, leading to subsequent dismissal of the Whitlam Government.
The underlying problem, which in my view and that of far wiser people than me is that Labor then, nor does it now understand how a modern economy works after the Bretton Woods system ended in 1971 and made the US dollar a fiat currency. Other fixed currencies also became free-floating.
A Job Guarantee instead of “Welfare“, JobSeeker and Robodebt etc
Libby Coker’s maiden speech after her election to Parliament advocated providing a Job Guarantee.
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. Abandon the unemployment benefit system. – See this Post ALP Nov 2020 Submission
A Job Guarantee would be an automatic stabiliser that ensures that the Government is doing the necessary amount of spending where it is needed in the right places and right time to achieve full employment with stable prices. When the private sector is recovering, federal government spending would automatically fall as people leave the Job Guarantee for higher paid jobs elsewhere. When the private sector experienced a downturn, federal government spending would automatically increase as people lose their private sector jobs and enter the Job Guarantee. See – http://www.billmitchell.org/Job_Guarantee.php
A Job Guarantee would also mitigate disadvantage and foster valuable skills.
Further comments, after reflecting on those those offered to the Meeting –
Labor’s ‘Fair Go” is incompatible with Fiscal Austerity.
To provide affordable -free?- tertiary education, a Job Guarantee, affordable and humane Aged Care, care of the Disabled, dealing with Climate Change, reversing Australia’s dependence on imports generally and particularly with essentials like Vaccines, liquid fuels; petrol; diesel and much more cannot be done whilst the Australian Government is committed to “minimise the fiscal impact and/or be fully offset by savings within respective portfolios.“
“In a leaked email reported in The Age, the Labor’s Deputy Leader Richard Marles is quoted as saying: “As Anthony (Albanese) has made clear, all policy proposals should consider options to minimise the fiscal impact and/or be fully offset by savings within respective portfolios.” https://johnmenadue.com/opportunity-lost-spark-of-a-healthier-nation-was-quickly-snuffed-out/?
What the Liberal Coalition Government has been doing
The Liberal Coalition Government has been providing essential funding to mitigate the Social and Economic chaos from the COVID -19 epidemic. Although, many aspects of this relief are biased towards Business and Corporate welfare and are fudged and misused, they have got us through, more or less.
Morrison’s mob has been using the insights into how a Monetary Sovereign Government works, which is described in Modern Monetary Theory . See for example – https://theconversation.com/explainer-what-is-modern-monetary-theory-72095
It has been boosting the Economy, issuing currency electronically to fund billions of dollars in expenditure with a resulting ‘Budget Deficit’, It has then sold Government Bonds to extinguish some or all of this ‘Budget Deficit’. Then again using RBA’s computers, bought these Bonds back from investors to cover its tracks!
One wonders how any government could seriously think that it was necessary to borrow its own currency from the private sector when it issues that currency in the first place. If you were running a sausage sizzle and ran out of cooked sausages and decided to borrow some from those who had not yet eaten them rather than cooking more, why should you not be deemed to be a ratbag?
The Australian government says the looming May budget will include an additional $539.2m for hydrogen and CCS, building on investments promised during last year’s budget of $70m over five years for hydrogen and $50m for CCS. The spending on CCS will increase to $263.7m.
More reforms needed to lift economy, warns BCA chief Tim Reed “At last count, on IMF figures, government handouts to boost the economy accounted for 16 per cent of GDP and totalled some $232bn” See The Australian Business Review
Reserve Bank Purchases of Government Securities
Following the completion of the initial $100 billion bond purchase program set out in the Governor’s Statement of 3 November 2020, the Reserve Bank will purchase an additional $100 billion of Australian Government securities (AGS) and securities issued by the state and territory central borrowing authorities (semis) in the secondary market as set out in the Governor’s Statement of 2 February 2021.
The purchases of the additional $100 billion will be made at a rate of around $5 billion a week. See RBA
It seems that the Morrison Government is already well aware that Australia has a Monetary Sovereign Government and uses this knowledge to (sort of ) run the Economy. This is done to accord with the Big Business mob’s wishes. It will be touted and ‘explained’ by a biased Media.
Australia has a Monetary Sovereign Government
When the Government spends it creates money. When the Government taxes it destroys money.
Government ‘debt’ should not be thought of as ‘debt’ in the conventional sense at all. It is better thought of as a form of money.
The Government cannot run out of money, and as long as it doesn’t guarantee to convert its money at a fixed rate into anything it could run out of, it faces no financial constraints at all. However it faces real and ecological constraints, because we can run out of people, skills, technology, equipment, infrastructure, natural resources, and ecological space.
The Government is NOT a household and NOT a business, and has nothing at all in common with a household or a business, where financial matters are concerned. SEE – https://era.org.au/paying-for-public-services-in-a-monetary-sovereign-state/
- Labor should quickly begin an ongoing review of its mind-set about a modern economy, aimed at ditching ideas hanging over from the Bretton Woods era. Monetary policy and Fiscal policy are now the tools by which a modern economy adjusts its spending levels and tax rates to monitor and influence a nation’s economy.
- Labor should widely seek on-going informed input from Economists, Academics, and other relevantly trained and competent persons as well as the broader community. Those with a clear, balanced and informed view of Modern Monetary Theory must be included. (For example, Bill Mitchell a professor at University of Newcastle – also holds the position of Docent Professor in Global Political Economy, Faculty of Social Sciences,University of Helsinki. He has advised Governments in Europe, Japan and elsewhere- recently February 2020 – Presentation to the French Treasury and Presentation to French Senate Commission,)
- Evidenced–based recommendations from the Review should be adopted and incorporated into Labor Policy.
- Labor should assure voters that it will continue to seek a”Fair Go” spending as is necessary to do this but at the same time will seek to reduce taxes.
- It will continue, for the time being, to issue Bonds and buy back Bonds from their holders, just as the Coalition does now. It will adopt a more coherent strategy after advice from the Review process mentioned in 2 above.
- Labor should beware of the Morrison mob’s probable intent to ‘spook’ a large segment voters by proposing that Labor will ‘tax and spend’ wantonly – aided by a largely partisan Media’s onslaught.