Tag Archives: Morrison

Australia’s Dangerous Myth of ‘Taxpayer Money’

  • This is a remix of the article by Raul Carrillo & Jesse Myerson for an Australian audience. The links are different (most, but not all). The original can be seen here.
There is no such thing as public money, only taxpayer money.” — Margaret Thatcher, 1983

“It’s all taxpayer money, it’s all debt, and it’s got to be paid back,” Prime Minister Scott Morrison speaking about the end of JobSeeker and JobKeeper COVID support scheme.

Australians would agree that taxpayers’ money can’t be used endlessly to run the Australian economy,” the Prime Minister told reporters in central Queensland on Thursday.

The Prime Minister by using the “taxpayer money” frame, they were spreading, however unwittingly (perhaps dog-whistling), a racist, sexist, classist myth.

Although most of us pay taxes of some kind, every time we say “taxpayer money” we prolong the illusion that society depends on certain kinds of people so we can have nice things.

Delton Clark: Transgender Aboriginal Sistagal
Delton Clark: Transgender Aboriginal Sistagal

One quick exercise shows why. Picture a “taxpayer.” What does one look like? A homeless Aboriginal trans teen? A Sudanese immigrant day labourer waiting to get on at the local abattoir?? A young mother trying to cobble together enough income to feed her family, while languishing on the Centrelink disability backlog? Unlikely. Let’s be honest: We know what sort of people “taxpayers” are supposed to be, and they’re not the ones we should be casting as the aggrieved parties.

Calling public money “taxpayer money” implicitly affirms that taxation is theft: If the money is taxpayers’ by right, what business does the government have using it for healthcare, jobs, or clean water? If we’re looking out for “taxpayers” and not the public as a whole, we are favouring wealthier groups over poorer ones—white people over Black people, men over women, Australian-born people over immigrants, and so forth. We’re hiding how the economic order relies not merely on the sacrifices of “taxpayers,” but the contributions of debtors, tenants, workers, and countless other actors. We’re perpetuating the politics behind the 1970s and 1980s demonization of “dole bludgers,” and Pauline Hanson’s One Nation movement—faux-populism that suggests the great majority rely on the wealthy, rather than vice-versa.

Not only is the “taxpayer money” frame damaging, but it doesn’t reflect how public spending actually works. A household or a business may have to stash or borrow money before it can spend any, but we are users of the currency. The Australian government, which is the issuer of the currency, works differently: Parliament votes to spend “new money” on something, then the Treasury and the Reserve Bank credit the relevant bank accounts, and…that’s it.

The government has spent new money into existence. Later, Parliament may tax “old money” back out of existence, but it isn’t collecting money in order to spend it. It’s “offsetting” earlier spending.  It may also “offset” spending in various other ways. Although Parliament taxes everyday people too heavily, calling public money “taxpayer money” makes as much sense as calling it “student debtor money” or “suspicious driver money.”

Look at a dollar bill, and you will see the signatures of its creators: not taxpayers, but the public officials who let the taxpayers hold it in the first place. Money doesn’t grow on rich people. We should heavily tax the billionaire class so we stop living in an oligarchy, but we don’t need private capital for public spending. The federal government doesn’t confiscate dollars and redistribute them. It uses its legal power to create and destroy them. 

Margaret Thatcher’s mantra was backwards: There is no such thing as “taxpayer money,” only public money. Modern money is a creature of the public, and we should use it for public power. We are all the public, and we each deserve a clear, equal say in how our economy and society work, no matter how much we each pay in taxes. It’s time to claim our democratic rights.

There is more than enough housing for the homeless, food for the hungry, and medicine for the sick. There is enough low carbon-emission technology to transform our energy system, quit exacerbating the climate crisis, and hire unemployed people all in one fell swoop. And there is more than enough public money to manage it all. 

Exposing hypocrisy may feel good, but it does little actual good. The people who primarily identify as “taxpayers” are Morrison, McCormack and the coalition’s base. Constantly repeating that their “taxpayer money” is being wasted only pressures them to violently defend their property, as the system encourages us to do under stress.

For over 40 years, Australian Laborhave chided the Liberal-National coalition for fiscal hypocrisy. What do they have to show for it? For over 40 years, the Coalition has controlled the conventional wisdom around budgets, successfully using the “taxpayer money” myth to force Labor to “starve the beast,” i.e., cut social spending to actually starve children, veterans, and many others. 

When we reinforce the right wing’s racist, sexist, classist frames in an attempt to expose hypocrisy, we lose. If instead, we root our politics in what is good and bad, just and unjust, moral and immoral, we can win.

Progressiveness from the Conservatives?

The Morrison government will prioritise reducing the unemployment rate ahead of debt reduction in a significant overhaul of its fiscal strategy in response to the coronavirus-caused recession.

In a major shift away from the Abbott-era hyperbolic rhetoric of “budget emergencies” and “deficit disasters”, treasurer Josh Frydenberg said on Thursday the government would not begin the work of substantial debt and deficit reduction until the unemployment rate was “comfortably” back under 6%.

“With historically low interest rates, it is not necessary to run budget surpluses to stabilise and reduce debt as a share of GDP — provided the economy is growing steadily,” Frydenberg said.

“Even though debt will be at much higher levels than we are accustomed to, it remains sustainable and will be put back on a steady path of reduction.”

Liberals drop obsession with debt and deficit to focus on job creation by Katharine Murphy and Paul Karp in The Guardian.

Australian Real Progressives would argue that under 6% is not enough but the Treasurer did state ‘comfortably’ under six per cent.  That leaves plenty of room for interpretation.

The Queensland Liberal Andrew Laming even said “…“is almost a diluted version of Modern Monetary Theory, a belief that the true crime is to leave the citizenry unutilised or underutilised”.

It’s a start!

Everything is Paid For in Real Terms

Hopefully, you have learned something over the month of April. If we the people can see a problem, an issue, and can come up with a solution, the only question is how do we get the resources to accomplish it.

From a modern money nation like Australia, the debt and deficit are arbitrary numbers decided between the actions of the government and the people.  It’s not the dollars that matter but the idle resources whether that be people, equipment, and/or natural and other resources.

Perceive, Conceive, Achieve.

We can see this in government responses around the world to the Corona Virus.

There are no free-market capitalists in a foxhole

There is a famous saying that means something to the extent that there are ‘no atheists in a foxhole.’ Foxholes are the burrows used during wartime. Well, in the face of a potential global economic collapse, there are no free-market capitalists who suggest responding to the crisis by doing nothing.

None of the measures considered by the Australian government are anything like the free-market rhetoric we were hearing some months ago, particularly the desire to have a budget surplus. So the desire for their previous agenda never had substance to it. It was a smokescreen and an excuse for why they did not want to pursue what would be popular economic policies. But given a crisis lurks on the horizon, their hand is forced.

Why exactly do they do it? Why have a go at the unemployed etc?

We used to let markets keep to themselves for quite sometime when the West first embraced capitalism. Sure, there was protectionism in the form of Mercantilism as countries sought to accumulate gold against one another (keep in mind this was the old gold standard system), domestic economies were comparatively ‘free’ compared to what we have had since the Great Depression. The whirlwind of casino capitalism and stock market speculation in the ‘roaring twenties’ ultimately lead to the 1929 crash that would create the Great Depression, allow for the rise of Hitler, and ultimately WW2.

Since WW2 allowed for full employment as many countries embraced Keynes’ ideas, full employment policies would set the stage for the ‘golden age‘ that culminated in the stagflation of the 1970s. Since with full employment, labour was relatively more powerful than they were before, they could bid up wages in a way that Kalecki foresaw in his article ‘The Political Aspects of Full Employment’.

Unemployment became a policy tool to discipline labour and to avoid stagflation. That is why they do it. So the unemployed are the cost of ‘price stability.’ Keep people unemployed, avoid the economy booming too much, keep workers afraid and encourage them to demonise anyone who is lower than them on the economic ladder, and there’s your answer. That’s why they do it.

But during a time of crisis, the emperor has no clothes.




The Prime Minister’s Speech

The following is a post by Jayne Flanagan of Modern Money Australia.

When a nation needs a leader, when the people need a voice, an ordinary (wo)man would help him find the courage.

My thoughts on what Scott Morrison should have said:

“We need approximately X* number of workers for cleaning and sanitation services, food production, retail and delivery, transport, healthcare, childcare, key manufacturing etc.’ All other people of working age will be ensured a temporary living wage while forced into quarantine. All people of retirement age will also be ensured a living wage. While we can’t overgeneralise from the experience from other jurisdictions, including Italy, it is safe to say that the time is now to shut down all non-essential services including schools, so that we can flatten the curve.

We will ensure the health and safety of all workers in sectors at increased risk of infection due to exposure to the pathogen via person to person contact or infected surface contact, by ensuring essential PPE and cleaning agents, but importantly, by reducing the contact frequency, and therefore the infection rate, in the community by enforcing the shutdown of all non-essential business/services. We will urgently need to increase our testing capacity to ensure our strategies are working and we are effectively protecting our key workers and the broader community.

We will ensure that no-one is at risk of losing their fundamental right to shelter, which means we will need to implement a mortgage holiday and an eviction moratorium. We may also need to commandeer empty accommodation, such as empty investment properties and hotel/motel rooms so to ensure that all have a roof over their heads.

If the COVID 19 pandemic teaches us anything it’s that we were fatally unprepared for a crisis, foreseen by many with epidemiological and public health expertise, of this magnitude. We have learnt our lesson and now will do whatever it takes to build a resilient economy that can withstand future serious, existential shocks such as this, and that guarantees that all of our citizens have the opportunity to flourish, with genuine ability to participate fully in our society – an ability that will be ensured by their democratically-elected, monetarily sovereign government.

For too long, decades, in fact, we have sacrificed the many for the sake of few; through enforced unemployment, through privatisation of public services, through our support of the fossil fuel industry, essentially through our misguided belief that government exists to promote the private gain of the few namely, the finance and corporate sectors. Trickle-down economics is bunk – if we had have paid attention to those that have been challenging this orthodoxy over decades then we might have avoided not only the deaths that are occurring and will continue to occur due to COVID 19, but also the probably millions of deaths that have resulted from the scourge of neoliberalism.

We should have learnt that lesson much sooner than this and so I would like to offer my deepest and most humble apology and my absolute commitment that we will turn this around starting from now. May I not go to hell for my past grave errors.

To achieve this we will:

1. Introduce a permanent, federally funded job guarantee program which will not only provide a guaranteed job for all who want to work, but will also serve as a more superior and humane way of ensuring price stability – time to put an end to the NAIRU approach.

2. We will nationalise and appropriately fund all services with public goods characteristics – hospitals, transport, roads, banks, schools, telecommunications, energy, R&D etc

3. We will appoint Professor William Mitchell as our chief advisor on achieving a JUST TRANSITION away from fossil fuels. This will commence as of immediately, and is of utmost importance in this crisis as our over-dependence on fossil-fuel industry, with the consequent environmental impacts manifested in our extant climate emergency, are inextricably linked to the occurrence of this pandemic and to the risk of future pandemics. A JUST TRANSITION recognises the workers and their communities that rely on this sector should not bear the economic burden and will need to be supported during this transition.

*X is the number determined by reliable modelling

Jayne is an Occupational Therapist and Teacher’s Aide. Jayne works with children with Special Needs.