Tag Archives: Morrison

Scott Morrison: Look Over There!!

On the 12th September Ben Eltham writing for New Matilda says:

 There’s no sugar-coating it: Australia’s economy is in trouble. Last week’s national accounts figures showed gross domestic product grew  just 1.4 per cent in the past year. Unemployment is trending up. Consumers have stopped spending. Wages are stagnant, living standards are flatlining, while business confidence is falling. Interest rate cuts and the government’s much-vaunted tax cuts haven’t worked.

Growth of just 1.5 per cent a year is the slowest growth since the global financial crisis. With Australia’s population growing at around 1.6 per cent annually, the economy is actually shrinking in per capita terms.

Household consumption is anaemic, also at its lowest point since the GFC. Consumer sentiment is flat; retail spending and business confidence are both falling.

With Queensland on fire and the economy clinging on for dear life, you’d think the government would have all hands on deck.

But no. Consider the items on the government’s policy agenda at the moment: drug-testing welfare recipientsexpanding the cashless welfare card across the country, and legislating to stop animal rights activists trespassing on farms.

Not the most important of issues!  It’s a look over there moment, a distraction.

Why Do We Hate The Unemployed?

There aren’t many groups as pilloried as dole bludgers and welfare cheats so when the Turnbull Government announced a major crackdown in 2016 most Australians were happy to see it.  That move has relied heavily on automation to pursue suspected rorters.“

This was Leigh Sales’ gentle introduction to a story about Robodebt and the victimisation of people on unemployment benefits. The program introduced us to a couple of people who may have been treated harshly but there are always exceptions. This segment was unlikely to shake the standard pejorative view of the unemployed. The majority of these 400,000 Robodebt targets still have the bailiffs at the door.

How did we get to the point where we wake up dilating on those lazy, dole bludging tax sucking low-lifes? How did we decide that these were the appropriate adjectives to describe someone who is unemployed?  If we love our job, shouldn’t we feel sorry for those that don’t have our sense of fulfillment. Shouldn’t we pity those who lack the purpose we enjoy secure in the pay of a loving employer.  Shouldn’t we pity someone living on NewStart? What am I missing?

UNEMPLOYMENT: THE FACTS

According to the latest ABS statistics for May 2019, Australia has 1,160,700 people who are underemployed. We have 704,000 unemployed so that is just under 2 million people or 13.7% of Australians of working age seeking more hours of work.  Further, from ABS figures shown here on the Australian Unemployed Workers Union (AUWU) website, the ratio of workers to jobs is around 15 to 1. That ratio would be even higher for people without the requisite skills that the market needs. A reasonable person should conclude that unemployment is not a choice. It is certainly not a lifestyle.  If you disagree, try it.

Another excellent data source on unemployment analysis is Bill Mitchell’s monthly analysis of the labour market.   For Bill, unemployment is one of the great political failures of the last forty years. His Centre of Full Employment and Equity (CofFEE), out of Newcastle University, has forensically dissected the causes and possible solutions to the problem. His work has inspired my interest in this subject.

WE HAVEN’T ALWAYS HATED THE UNEMPLOYED

Australians once recognised unemployment as a systemic problem.  This is how we viewed it following the Second World War:

“Unemployment is an evil from the effects of which no class in the community and no State in the Commonwealth can hope to escape, unless concerted action is taken.”

The post Second World War politicians and bureaucrats who made this statement believed it to be true. They promised the Australian public they’d use all of the country’s resources to remove this evil.  This commitment, explained in the Dedman White Paper, ran from 1945 -1974 or according to labour market historian, Dr Victor Quirk, starting from mid-war in 1942.

Throughout this period, full employment remained a very popular policy with the Australian public.  The fear of electoral backlash and becoming “the Opposition” prevented Menzies and Liberal Party Governments from walking away from it over 23 years, from 1949.   No doubt the poverty and hardship that accompanied 25% unemployment during the depression gave people a treasured education.  It is also unlikely that people who came back hardened by war were going to accept the market’s need for servility or a belief in its innate generosity.

BRAINWASHING BEGINS

It would take time for us to forget these lessons.  It would also require a massive propaganda campaign to assist the Australian public to forget the systemic nature of unemployment. To achieve this we needed help.

One of the key reasons for this change was a business rebellion.  As ever through history, business and financial interests have always been an enemy of full employment.

“Unemployment is not a mere accidental blemish in a private enterprise economy. On the contrary, it is part of the essential mechanism of the system, and has a definite function to fulfill. The first function of unemployment (which has always existed in open or disguised form) is that it maintains the authority of master over man. The master has normally been in a position to say: ‘If you do not want the job, there are plenty of others who do’. When the man can say: ‘If you do not want to employ me, there are plenty of others who will,’ the situation is radically altered.’
Quote from: The Great Trough in Unemployment by Walter Korpi of Stockholm University.

BUSINESS GOES ON STRIKE

In the early 1970s, business decided it had had enough of competing with decent public sector base wages which were a central element of full employment.  They also resented having to match the related benefits such as sick leave, holidays, overtime and unsocial hours loadings.

So the question was what to do about it. According to Dr Quirk, this required the collaboration of business, media and government to help us forget government’s capacity to control unemployment. The Packer and Murdoch empires were set the task of presenting unemployment as a personal failure, not a system one.

The result over the last 40 years has been the gradual winding back of once accepted labour norms.  Now, penalty rates can be taken from hospitality and retail workers without much fuss. And there are plenty of people to despise and dismiss the concerns of the unemployed.   This is supported by the media lie that there are plenty of jobs if you want one.

A CURRENT AFFAIR

I have watched over the last forty years as our commercial media has demonised the unemployed. One of the leading program’s in this regard has always been “A Current Affair” (see related story on Peter Meakin).  The Murdoch press has also been particularly savage but it’s hard to single out any one organisation. To use a basketball term, it has been a full court press.

Inconveniently for Labor tribe members, the abandonment of full employment took place under the Whitlam Government (search Hansard record text “Employment in Australia” for a very interesting 1974 debate). Since that time it has been standard practice to attack the unemployed as wastrels and thieves of your tax money.

Central to this campaign was convincing people that the money to address unemployment comes out of our own pockets. Are you really the source of money? Is Government really reliant on you to fund its spending? If you believe this perhaps you could tell me where YOU get it from. This lie is applied persistently and strategically to compound our resentment.

IT’S A BIPARTISAN POLICY

The propaganda has worked so well that politicians dare not defend anyone receiving welfare.  Labor refused to promise an increase to “NewStart” during the recent election. It was obvious that pressure from its rank and file was forcing Shorten to at least present an intention to address the problem. Yet, they dare not make a clear commitment. Why? Because the public disdain of those on unemployment benefits has become so deeply ingrained.  This was confirmed this week when Labor Shadow Treasurer, Jim Chalmers, announced the abandonment of a NewStart review. Why pick a fight on behalf of a group that no-one cares about?

Former Prime Minister, John Howard, played a vital role in this game. In many ways, he was a genius; a genius in his capacity to re-shape Australian values or in finding people who could show him how to do it.

As Marion Maddox explained in her wonderful book, “God Under Howard”, John had difficulties with the churches and other agencies in the early days of his incumbency.  They questioned his genius and his compassion.  There was resistance to his “never, ever” GST, the wisdom of privatisations, his robust industrial relations vision and a range of other anti-social targeted policies.  His solution was to put these charities on the Federal Government payroll.  This placed their desire for social justice in conflict with their funding and duty to government.  It worked beautifully.

Howard made charities central to the job network. Their role was to help people find non-existent jobs. The lesson here was if you are unemployed then it is your own fault and the only agency appropriate to deal with you is a charity.  Another boon to government was that this made government services cheap.  Front line staff working in places like Mission Australia, accept part of their pay post-dated to the after-life.  It’s a form of salary sacrifice.

WHAT ARE THESE CHARITIES REALLY DOING?

According to staff working for these charities, it is hard not to develop a somewhat demeaning view of your “client”. When your employer tells you every dollar you get comes out of the money to support your “client”, resentment can’t be far away. Breaching your client for minor infringements such as turning up late or some other triviality must also have sharpened this relationship.

From the unemployed person’s perspective, these are an additional punishment.  The plan of successive neoliberal governments has been to make unemployment such a humiliating experience that only the truly desperate stay there.  Robodebt, media attacks and public embarrassment add to the torture the economic system applies.

This morning when I opened the Australian Financial Review, there was a quarter page advertisement for The Smith Family. These are not cheap.  This follows ads earlier the week in other Fairfax / Channel 9 publications.  Advertisements for similar charities flood our social media pages while pretending to address the disadvantage and desperation that planned unemployment causes. They create the impression that someone is addressing the problem. Yet, these charities lack the financial and organisational means to address issues of this size. We left the charity model behind in the 19th century but can now thank Howard for resurrecting it.

[Following the 1890s depression] the increasing first-hand observation of working-class conditions led churches to revise many of their assumptions. The depression gave them a sharper view of the relationship between labour and capital, which led to stringent criticism of inequality. Consequently, some clergy began to rethink the basis of charitable welfare provision, coming to the conclusion, to quote one historian, that, in place of private philanthropy or church charity, it was for ‘the State itself . . . to direct and finance welfare work’. p232 God Under Howard

IT’S A STRANGE GOD

Sadly, the values and norms of business and finance have become our own. They’ve replaced a sense of our better, more compassionate selves. We have been socially conditioned not to care. We didn’t choose these values but they are now part of us.

Meanwhile, we have regular print, radio and television stories dealing with the rise in mental illness, youth suicide and family  breakdown.  It is all such a mystery.  We ask each other “Are you OK”; give each other hugs; staff crisis lines; run telethons; and helpful governments offer innumerable sums to innumerable organisations. Yet, nothing seems to work.

Even in the last few days Scott Morrison has been reinforcing the unemployed’s unworthiness. As Philip Mirowski said: “We are all neoliberals now”.  And what does it mean to be a neoliberal.  Under this belief system all success and failure is personal. The system is perfect.  The answer to every market created problem is another market.

This world view sits comfortably with the American illness of Calvanist predestination.   This religious form reinforces the notion that life’s rewards go to the chosen and the good.  This is the religion our politicians are dog whistling when they celebrate their Christian values. These chosen are the ones the God of the Market favours. They are the “hardworking Australians”. These are Scott Morrison’s Chosen People. Are you one of those? Not if you’re unemployed.

Warren Ross

Originally posted at Where Does Money Come From on the 30th June 2019.  Republished with permission of Warren Ross.

Why We Should Love Government Deficits

The calls for cutting the federal government’s budget and perhaps even balancing it have continued and are likely to grow louder during this political season. Don’t listen to them unless you want to see a fall in your net financial assets! Government deficits, by definition, create private sector wealth, while surpluses drain it. It’s simple accounting.

To understand this, start by imagining a world in which there is no government and no foreign countries. All economic activity in Australia would take place domestically and be carried out by our private sector firms and households. As a group, they would earn what they spent. If all Australian firms and households spent $1000, then–because one of them was standing on the other side of the cash register for each of these transactions–Australian firms and households would earn $1000. It is logically impossible for them, as a group (though not as individuals), to spend more or less than what they earned–the values must be identical because it’s really double-entry bookkeeping. Every transaction that takes place is both spending (for the person buying something) and income (for the person selling something).

Now create a government. It is only at this point that it becomes possible for one sector (private or government) to spend more than they earned or earn more than they spent. For example, say over its first year in existence, the government takes in $100 in tax revenues but doesn’t spend any of it. You might have something like this:

Government Budget Surplus and Private Sector Deficit

In this case, the private sector spent $1000 on the goods and services it created (which is what created the $1000 in income for them), plus they spent $100 for taxes. The government, meanwhile, earned $100 in income (via taxes), but spent nothing. The government budget is thus is surplus, while the private sector has gone into debt–by the exact same amount, of course. It is impossible for it to work out any other way. The balances must add to zero because, as the last column indicates, total spending must equal total income in a closed system. And with the government in surplus, the private sector goes into debt.

On the other hand, look at what happens when the government spends in deficit:

Now it is the private sector that gets the surplus! In this scenario, the government has collected no taxes, but spent $100 on goods and services produced by the private sector. This creates enough income for the private sector for them to actually save money rather than go into debt.

What the above means is this: government deficits create private sector wealth, while government surpluses drain it. There is no trickery here. When the federal government spends in deficit, it does so by putting financial assets, usually in the form of Treasury Bonds, in the hands of the public; when it spends in surplus, the net quantity of Treasury Bonds held by the public declines. Thus, federal government deficits not only create the extra demand necessary when the economy is at less than full but it puts money in the bank, too. And Australia could never be forced to default on the debt because it is denominated in dollars Furthermore, this is exceedingly unlikely to be inflationary under current conditions..

So, next time you hear Frydenberg or Morrison or Shorten or Bowen or a Coalition or Labor MP talking about reducing the deficit, be sure you put that into the proper context. They are talking about draining your savings account! That’s hardly a sound policy when we have over one million underemployed.

This has been a remix of John Harvey’s article at Forbes for an Australian audience!