WHAT CAN AND SHOULD AUSTRALIA DO NOW ABOUT INEQUALITY
Updated: Jun 26, 2020
In 2014 and 2018, in a collaboration with the Australia Institute, Australia21 brought together experts from around the nation to consider the issue of social inequality.
In the context of the COVID-!9 pandemic we have invited each of the 38 experts who contributed to the 2018 Roundtable report . "A fair Go for All Australians : Urgent Action required", to propose briefly how they think Australia could most effectively act to mitigate the inequality that now faces the nation.
You can view the first three succinct proposals here:
PROFESSOR JOHN QUIGGIN
Prof. John Quiggin is an economist and commentator on public policy, based at the University of Queensland. His latest book, “Economics in Two Lessons: Why Markets Work so Well and Why They can Fail so Badly” published by Princeton University Press in 2019.
"We need to admit that financialised capitalism will never deliver sustainable full employment. Crises occur regularly and the existing system is incapable of managing them without publicly funded bailouts.
The temporary measures currently in place should be replaced by a Livable Income Guarantee, available to anyone seeking work, or willing to make a contribution to society in other ways. These would include raising children, full-time study, volunteering, creative and artistic activity and starting a small business. The Guarantee should be provided at the same level as the Age and Disability pension and subject to similar income and asset tests.
Such a policy would represent a reversal of the punitive logic embodied in the failed Robodebt scheme and in compliance measures such as ‘work for the dole’ and ‘cashless welfare’. The common feature of all of these measures is that recipients of benefits are assumed to be ripping off the general public and misusing the support that is provided to them. Under the Livable Income Guarantee, the onus of proof would be reversed. Australians would be assumed to be willing to make a positive contribution to society; exclusion from the Guarantee would require positive evidence of their failure to contribute. The cost of a measure of this kind would be around $20-$30 billion per year. This is a substantial sum, but less than the likely cost of income tax cuts for high income earners, legislated to come into effect in 2024-25.
It is appropriate that those doing well should not have their contribution to society reduced at a time when millions of others are unable to secure a decent income".
EM PROFESSOR BOB DOUGLAS
Bob is a retired epidemiologist and former Chair of Australia21. who co-chaired two round table discussions about Australian inequality in 2014 and 2018. He is Secretary of the Commission for The Human Future www.humanfuture.net
"Governments everywhere are in a mood for quick responses to the extraordinary circumstances that have followed the impacts of climate change and the coronavirus pandemic.
Inequality, which has been increasing in Australia, will unquestionably increase dramatically in coming weeks, unless immediate action is taken to protect those who are most vulnerable. The “sacred money and markets” story that has been driving our world for forty years is failing us. And I agree with David Korten, who argues for an alternative narrative of “sacred life and living earth.” And with Kate Raworth’s concept of “a doughnut economy.”
We must change the story from a preoccupation with growth in GDP as our marker of progress, to one that recognises the need for every person to be able to contribute meaningfully to the integrity and well-being of the community in which they live, and to protect the living planet at the same time.
Having a guaranteed basic income (UBI) would enable us all to optimise our creativity and our ability to contribute to the well-being of the community. While recognizing its complexity, I would favour an attempt to test the feasibility of something like a UBI that guarantees a “living wage” to every Australian for the next two to five years".
Emma Dawson is Executive Director of public policy think tank Per Capita. She has worked as a researcher at Monash University and the University of Melbourne; in policy and public affairs for SBS and Telstra; and as a senior policy adviser in the Rudd and Gillard Governments. She is co-editor, with Professor Janet McCalman, of an upcoming collection of essays “What happens next? Reconstructing Australia after COVID-19”, MUP Sep 2020.
"The recession caused by COVID-19 requires a collective effort to rebuild the Australian economy. It is critical that this be done with the explicit purpose of reducing inequality and constructing an economically and ecologically sustainable world.
Firstly, we must listen to First Nations people, and work with them to end the unacceptable rates of poverty and ill-health in their communities, and to stop their deaths at the hands of the state. This must start with a Treaty, and enshrining their voice in our constitution by embracing the Uluru Statement from the Heart. Government leadership is needed to create secure jobs in new, carbon-neutral industries, recover our manufacturing capability, lift wages and conditions for key workers in care and services, and revive the construction sector through a massive investment in public housing. Income support for those unable to work must be permanently increased, and essential services returned to public provision where necessary, and effectively regulated where not.
We must recognise the value of unpaid work and care and distribute it more equally between men and women. Critically, we must decarbonise our economy, while leaving no-one behind. This means investing in new industries that can be powered by renewable energy and provide secure jobs to replace those that rely on fossil fuels. We can grow our economy sustainably, with the wellbeing of people and the planet at the centre of our approach, but only if we reject austerity and invest in our most important asset – the Australian people"
PROFESSOR BRIAN HOWE AO
Professor Brian Howe AO. University of Melbourne and Former Deputy Prime Minister of Australia 1991-95 writes
The fact that social protection for employees is very weak in Australia is underlined by the Immediacy with which key changes to welfare (the ‘Job Seeker’ and the ‘Job Keeper’ programs) were introduced by the federal government to address the Coronavirus crisis. Bob Gregory has demonstrated that income support for the unemployed and under employed is Australia has been declining in real terms ever since the Whitlam Government established a benchmark for social security of 25% of average weekly earnings in the mid 1970’s. As Peter Whiteford at the ANU has been reminding Australians, aside from the Job Seeker payment, Australia has now the lowest level of income support for unemployed people in the OECD. The reality is that successive governments in Australia have frequently turned to social security payment as a source of savings by taking people off higher payments (lone parent and disability pensions); tightening eligibility requirements; or by income matching schemes which have been found to be unlawful in the case of so called ‘robot debt.’
Incremental changes to social security have been a substitute for recognition by government of the fundamental changes in work and in the Australian labour market over the past fifty years. Increased equality between men and women has diminished the distinction between paid and unpaid work and undermines the traditional work test which is based on an understanding of work that is too narrow. Surely it is now time to revisit Professor Henderson’s Guaranteed Minimum Income (GMI), or as is now being promoted by many a Universal Basic Income (UBI). Henderson recognized the fundamental importance of linking the tax system much more closely to income protection. In taxation equity is a prime consideration, however in social security it is often an after-thought.
PROFESSOR PAUL SMYTH
Paul is Honorary Professorial Fellow University of Melbourne. Co-editor , Social Policy in Australia, 4th edition, OUP (2020).
Equality reframed, If equality is the answer then what is the question? This ‘Social Question’ has been framed quite differently in Australian history, resulting in two major policy settlements: the ‘Fair Go’ of the late nineteenth century and the Welfare State of the mid twentieth. How can they inform our thinking today?
The first concerned the ‘productive rights of citizens ‘ensuring full employment and at conditions enabling workers to participate fully in the ‘civilisation’ of the day. The second, more universal charter, built on the first, but looked beyond the sphere of paid work aiming to guarantee ‘social rights’ to all citizens.
Both speak to us today. Productivist social policy is once again central. What should be the future role of paid work in our Australian social charter? Can we reclaim the older ‘right to work’ tradition? Will paid work enhance or undermine equality? Or is it something no longer for all with some taking up a welfare option? Momentous questions, warranting a review no less than Working Nation 1994 or the White Paper on Full Employment 1945.
Secondly, the Covid experience speaks to us the limits of productivism. It reminds us how much our ‘economies’ are embedded in families and communities which need to be resourced and organised by governments if all citizens are to be housed, healthy and educated. And a strong society underpins a strong economy.
A new equality agenda should encompass these past ‘productivist’ and ‘social’ dimensions adding of course the third: sustainability.
HON DR ANDREW LEIGH MP
Andrew Leigh is the federal member for Fenner, and a former professor of economics. His website is www.andrewleigh.com
Education as Equaliser. According to Harvard scholars Claudia Goldin and Larry Katz, inequality is a race between education and technology. When technology speeds ahead, the gaps widen. When education advances, the gaps narrow. From automated factories to computerised offices, technology tends to raise wages at the top and lower them at the bottom.
From telecommuting software to online shopping, COVID-19 has accelerated the uptake of technology in Australia. Without a commensurate increase in education, this will exacerbate inequality. But as it turns out, this is the best time in three decades to be increasing educational opportunities, because the alternative to studying isn’t working, it’s unemployment.
When the last Australian recession hit, many young Australians responded by staying on at school. With double-digit unemployment, this was a smart choice. Why chase non-existent jobs when you could raise your future earnings by acquiring new skills? My research suggests that each additional year of education raises earnings by around 10 percent, making human capital one of the best investments around.
Now, a generation on from the early-1990s slump, the equivalent to completing year 12 is to attain a post-school qualification. So it would make sense to ensure that any young Australian who has the talents to complete an apprenticeship, TAFE qualification or university degree has a place awaiting them. With the fall in international student numbers, higher education institutions have the space available to accommodate more domestic students. It would improve the wellbeing of young Australians, and make us a more productive and egalitarian nation.
DR ALEX WODAK AM
Alex, a retired physician, is a Director of Australia21. He is also President of the Australian Drug Law Reform Foundation, and a Director of the Australian Tobacco Harm Reduction Association and the Progressive Public Health Alliance.
In the two years since the Australian21 report on Inequality was published, the evidence that inequality in Australia has been increasing to a concerning extent has grown. Support among highly respected experts for reducing inequality has further increased. The COVID pandemic has already, and will further, exacerbate inequality in Australia. Climate change is also worsening inequality. Fortunately a wide range of effective policies are available to reduce inequality. Some of these options will be unattractive to some community members and politicians but there are other policies which should be acceptable across the political spectrum.
Allowing excessive inequality to persist in Australia is a statement about our values. Do we really want to think of our nation, and do we want others to think of us, as a nation that cares little about fairness? COVID demonstrated that Australians understood that making individual sacrifices for the collective benefit was also in our best interests as individuals. Inequality will only be reduced in Australia if we impress upon our politicians that this is an issue we really care about. We do not want to see so many of our First Nation people with inadequate housing, education, healthcare and employment. We do not want to see so many homeless.
Reducing inequality should be an issue that all political parties regard as a critical priority. It’s high time that Australia started debating the best ways of reducing inequality. Decisions made now will greatly affect future generations