Labor and Liberal governments have deliberately maintained an underclass of poor unemployed and insecurely employed people who have been sacrificed to neoliberalism, says Greens leader Adam Bandt as he unveils an economic recovery plan that includes guaranteed jobs and basic incomes.
The Greens’ economic recovery plan, released on Monday, is ambitious in that it focuses not just on increased government stimulus in response to the current crisis but also a fundamental reshaping of the economy to tackle climate change and income inequality.
Under the plan anyone under 30 would be guaranteed a government job or a free place at university/TAFE, while all people would be guaranteed a means-tested basic income without onerous mutual obligations.
Jobs would be created by government in renewable energy, climate adaptation, habitat restoration, aged care, education (childcare, schools, TAFE and universities), building public housing, manufacturing (such as green steel) and the creative/arts sector.
“Everyone deserves a guaranteed income they can live on, and for young people in particular they deserve a guaranteed decent job working on one of these nation building, planet saving projects,” Bandt told Voice of Action.
Australia’s economic indicators are “horrific” and expected to get worse; over 2.7 million Australians either left employment or had their hours reduced between March and April, while over half of young workers are out of work, don’t have enough work, or have stopped looking for work altogether.
Economists and policy experts interviewed by Voice of Action said the only hope we had of avoiding a prolonged and painful downturn was by significantly increasing government spending and pursuing a “full employment” agenda. This includes the government directly employing people for nation building projects.
But Prime Minister Scott Morrison and Treasurer Josh Frydenberg have been clear that they intend to cut Jobseeker/Jobkeeper as soon as possible and would be pursuing a neoliberal recovery agenda of tax cuts for corporates and the wealthy, deregulation and weakening industrial relations protections.
These neoliberal responses to crises such as the 2008 Global Financial Crisis resulted in a decimation of the working and middle classes in the US and Europe as well as increased wealth inequality globally. Cutting government stimulus too early and relying on the private sector to pull us out of the current crisis would result in a deeper more painful depression, economists say.
“Something fundamentally changed in Australia when neoliberalism hit,” said Bandt.
“It used to be that full employment was counted as 2% unemployment and that’s the rate that we had for a very very long time. All of a suddden under neoliberalism 5% unemployment with a huge hidden percentage of underemployment on top of that became the norm.
“Labor and Liberals started saying good we’re at full employment at 5% but meanwhile millions either had no job or were underemployed.”
Asked whether governments deliberately kept a reserve army of poor underemployed people to put downward pressure on wages and conditions for big business, Bandt said “part and parcel of neoliberalism is there being huge numbers of people worried about their future living without jobs or with only crappy insecure work”.
The jobs under the Greens’ proposed job guarantee would have competitive pay and full conditions but would not be compulsory, and people who did not want to work could fall back on a safety net that they could live on.
The Greens would expand eligibility for programs like Jobseeker, Jobkeeper and Youth Allowance, permanently increase social security payments and remove onerous mutual obligations and penalties.
“Where this differs from a Universal Basic Income is that there would still be rules around how much you earn,” said Bandt.
“If you’ve got a couple hundred thousand sitting in a trust fund somewhere, although you’ll be eligible for getting this guaranteed income, the amount you get will taper off as you earn more from other sources.”
Jeremy Poxon, spokesman for the Australian Unemployed Workers Union (AUWU), said it was a mistake not to extend the job guarantees to older people as well.
“Before the crisis, women over 50 were the fastest growing population on Newstart, and groups like this desperately need a job guarantee,” Poxon told Voice of Action.
Connor Jolley, a PhD candidate who is a researcher for AUWU, said: “Economist Bill Mitchell has calculated that, in today’s terms, a job guarantee program could create nearly 600,000 new jobs and, at the upper range of estimates, cost around $28 billion, which is less than we give away every year in fossil fuel subsidies.”
Bandt said he was “not closed to” expanding the job guarantee policy to those over 30 but the initial focus was on young people because they have been the hardest hit by the coronavirus crisis.
“The history of previous economic downturns tells us that if you’re starting your working life during a time of recession you may never recover,” said Bandt.
The Greens plan, which purports to create 870,000 jobs, says Australia should make things again and not rely on imports, and it’s time to “reevaluate the free trade agreements that have decimated our manufacturing sector” and eroded labour standards.
Bandt said the Greens were going through a national consultation process and hoped to have the full suite of its Green New Deal policies available for scrutiny next year.
The Greens propose to pay for their economic policies by winding back unfair subsidies given to fossil fuel corporations, closing off tax loopholes that corporates use to dodge tax and ditching the proposed “tax cuts for millionaires package that Labor and Liberals legislated through parliament”.
High income earners would be forced to pay a minimum proportion of their income in tax and royalties would be increased on resources companies extracting our gas.
Bandt said that proceeding with the tax cuts for the wealthy would cost $281 billion over 10 years and that money could be put to better use serving the people.
“The government seems to think we can cut our way back to recovery, cut corporate taxes, cut welfare payments, cut worker protections, cut environmental protections,” said Bandt.
“That is just going to make life harder for people, now is not the time to take riding instructions from big fossil fuel magnates who head up the government’s recovery taskforce, now is the time for a people-centred recovery because otherwise the inequalities that we had before are going to be exacerbated and people are going to be in a lot of pain for a lot longer.”
Some economists say full employment policies are not pursued because they lead to inflation but Bandt rejected this argument.
“The reserve bank governor has been saying he wished inflation would get a bit higher and that there needed to be a policy to lift wages, and that government public sector wages policy was one of the biggest drag on wages growth in this country,” said Bandt.
“So you now have key players in the economic establishment worried that wages aren’t growing fast enough and they’re scratching their heads wondering why it’s not happening – the answer is three decades of attacks on people’s ability to organise in the way that wages are set in this country.”
The main parts of the Greens economic recovery plan are:
- Guarantees everyone under 30 a free place at university or TAFE, an income they can actually live on or a decent job if they want it on vital nation-building projects.
- Massive government investment in health, education, manufacturing, public transport and renewable energy infrastructure to create jobs paid at industry-standard wages and with full entitlements.
- Keeping the increase to income payments, including JobSeeker and Youth Allowance, and extending eligibility, while removing mutual obligations.
- Extending JobKeeper eligibility to casual, contract and temporary visa holders and ensuring we don’t cut off funding before the economy is ready.
- Ensure people on the Disability Support Pension, Carers payment and other payments receive the coronavirus supplement.
- Investing $12 billion to establish the Manufacturing Australia Fund to modernise and expand Australian manufacturing, including green steel hubs in Queensland and NSW.
- “Create Australia” recovery package with cash for arts, entertainment and creative projects.
- Build 500,000 public and community homes.
- $6 billion Nature Fund with a Habitat Taskforce to restore forests, make rivers/lakes swimmable again and protect wildlife
- Investing $70 million in CSIRO’s vaccine production capacity
- Redirecting health care funding away from private sector back to the public system