The word overcapacity is being used increasingly by economists of late when talking about the global economy. That means people aren’t buying the goods and services being produced, that there is more capital tied up in production than there is money in the hands of people who would otherwise buy those goods and services. In other words, there is too much money at the top and too little at the bottom, a direct consequence of supply-side economics, or trickle down economics as it is more commonly known.

OECD Company Tax Rates

Wrong! Australia does NOT have the highest company tax rate in the OECD.

When the USSR economy started to crumble in the 80s we saw images of people queuing for loaves of bread, the controlled economy didn’t direct production towards the available demand. Too much demand for too few goods and services.

What we’re seeing in the opposite extreme today is diminishing queues, there is lessening demand for the goods and services being produced. Why? Because people don’t have as much money. Australian economic figures released a few weeks ago reinforce this argument, GDP went up, income went down. Australian businesses produced 3.1% more but the people have 1.3% less money. More things to buy, less money to buy them with.

This is where the ludicrousness of the company tax cut being proposed in Australia comes in – it is being used to try and increase the level of investment in an already over supplied economy, and it is being paid for by increasing the cost of government services for people on low income. See it? Less money in the hands of people that would purchase, more money for those producing the things that people have less capacity to buy.

If we are to avert the deflation crisis that is developing, we have to get money into the hands of people who will purchase and money out of the hands of people who are investing in idle capacity.

In Australia that means increases to unemployment benefits and pensions, it means fixing the welfare/taxation nexus so people transitioning from welfare to work keep more of their benefits. It also means directing greater childcare rebates to the lower end of the scale so the fees don’t cut into the income. And it means raising the income level where HECS and HELP repayments kick in, and stretching the scale so that the top rate doesn’t kick in till a lot later.

What we don’t do is lower penalty rates, tighten welfare eligibility, increase health costs, and most importantly, we don’t cut the company tax rate. We should also start to pare back corporate welfare like diesel rebates for miners and direct those resources towards real jobs programs that include a large training component.

As for the intern policy, it makes no sense for businesses with over capacity to take on interns. We’ll end up with interns sitting in the corner doing nothing because the business doesn’t need them but quite like the extra cash, and of course the intern quite likes the extra cash as well. The intern is better off doing something useful, like learning new skills, or playing with the kids at home.

What the above will do is put the spending power into the hands of those who spend, and then businesses will do what they always do, they will follow the money, they will shift their investments towards the production of goods and services that people want and need.

Money will trickle up.

 

The report earlier in the year that the Turnbull government was investigating the privatisation of Medicare’s payment system raised the whole public vs private debate again.

Those against the idea pointed to privatisation debacles such as that that has happened with the Job Network and with education colleges. Those in favour pointed to the debacles with Centrelink and the IT problems that have plagued the Victorian governments over the years. What seemed to be missing from the debate was, “Why are we giving up on the idea that Australians can build and operate world class IT infrastructure?”

As a nation we are very confident that we can build large concrete and steel structures. We might argue over priorities and costs but never over our ability to complete the project, no matter how complex. Even with the NBN rollout, no one doubted that we could do it, we just argued over the cost and the materials. If there was any doubt it was in whether or not Australians would use it for anything other than downloading videos. It seemed few believed Australians would use the NBN to create and deliver high quality IT services to the world.

Throughout the 19th and 20th century Australia built the gigantic physical infrastructure we have today. The huge railway and road system that spans the continent, the telecommunications network, the Harbour Bridge, Snowy Mountains Hydro, and many, many more projects throughout the country. When you look at the list it is pretty impressive. It was also built by governments. And usually built as job creation projects.

Out of those projects we acquired a skilled workforce that is now capable of building anything it wants. We have the engineers, the electricians, the geologists, the architects and the countless number of machine operators that were put to great use building the massive mining infrastructure of the last decade or two.

So why aren’t we thinking along those lines again for the 21st century?

If we really are wanting to build an agile, responsive economy, what are some of the things that we could build that would leave us with a swathe of software engineers, systems developers, electronics experts, testers, interface designers, and the myriad of other skilled workers? True job creation projects that create not just jobs, but professions that don’t even exist yet.

Maybe a large integrated payment system is one of those things. Not just for Medicare but for the whole of government. An Opal card for everything, if you will.

Or maybe something more leading edge that only transhumanists would ever dream about?

Whatever it is, it needs to be large, and it needs to be either a platform for the rest of the economy to run on, like rail and road was for farmers and other businesses, or inspiring, like the space program. It needs to symbolise a new Australia, much like the Harbour Bridge did all those years ago.

Allan Quartly is the Lead NSW Senate Candidate for the Australian Progressives. For further information about his campaign see:
https://www.facebook.com/allanquartly/
https://www.australianprogressives.org.au/candidate-allan-quartly

email: allan.quartly@australianprogressives.org.au

 

It’s time we talked about a treaty.

When I say ‘we’ I mean non-indigenous Australians. For too long the burden of coming up with reasons for a treaty have fallen on one side of the negotiation, yet a treaty involves two parties.

Since around the time the Barunga Statement was presented to Bob Hawke in 1988 and Yothu Yindi had their smash hit Treaty, there has been widespread support for a treaty in Australia but no one’s really been sure just what that would involve. There has been very little discussion on ‘our’ side of the debate about how we want to proceed. This has to end.treaty

The discussions around land, law and sovereignty need to happen. And the responses to these issues are going to be different throughout the continent. How the descendents of the Eora people in Sydney respond is a lot different to how the Yolngu respond in Arnhem Land. And how ‘we’ respond is going to be different again.

One of the more difficult questions will be how to deal with sovereignty. We can no longer deny that people who recognised themselves as a group, with laws that regulated the actions of that group, that allowed for the passing of land from one generation to the next, existed in this continent before 1770, and that the descendants of those people are alive and living amongst us today. We also can’t deny that some, if not all, have never surrendered their land willingly.

The difficulty comes because ‘we’ never recognised their existence, and therefore never recognised their laws and customs. We made laws for them and about them without ever discussing the terms of our co-existence. We assumed ‘our’ sovereignty and ignored theirs. We never sat down and negotiated a settlement between us, we never worked out how we would share land and resources, how we would make laws together. The assumption has always been that everyone in this continent would follow British and then Australian law.

We can’t keep ignoring the question of sovereignty, we have to recognise it, otherwise it will keep eating away at our collective conscience, keep causing dissonance and contradictions in how we see ourselves. We have to face the complex questions around sovereignty: Are we willing to recognise more than one sovereignty in this continent or do we find some other mechanism? Or does one sovereignty cede to the sovereignty of the other? Who has a claim to sovereignty?

The answefirst stepr to these questions will lead to further complex questions which may take a long time to answer but we need to take the first step.

Please sign our petition calling on the leaders of major parties to start treaty discussions:

https://www.change.org/p/non-indigenous-australian-call-for-a-treaty-with-first-nation-peoples

 

Further information:

Treaty – What’s sovereignty got to do with it?

Barunga Statement

 

Allan Quartly is the Lead NSW Senate Candidate for the Australian Progressives. For further information about his campaign see:
https://www.facebook.com/allanquartly/
https://www.australianprogressives.org.au/candidate-allan-quartly