From Government Budgets to Sustainable Social Policy Community Forum

The Australian Budget came down last night. I had a quick look over it without going into the detail, as I am not interested in the details but am feeling for another way of looking at Government budgets with a new future in mind. So I will just write a stream of consciousness here, without any real analysis just allowing myself to play with the knowledge I have and where it takes me. I am not an expert on Government Policy or indeed ecological issues, just a citizen starting a discussion around a new future.

First I’d like to just offer a reflection on the prevailing economic system within an Australian context and the social system. Then I will venture into the place where the pink elephant is – climate change and just simply suggest a few ideas for debate and reflection. I am not beholden to my ideas but I am venturing over the ledge with them and speaking them out as I feel it and as I perceive the reality we face.

So let’s start with an economic and political discourse for illumination, to feel our way.

The justification for the existence of Governments is their ability to provide leadership, goods and services that the population needs and stability. The deal between the public and the government is the agreement to legitimate taxation of each citizen in exchange for the needed goods, services and infrastructure. In Economics we call goods and services that service the whole population as ‘public goods’. Traditionally these were government owned and cross subsidized without income as a factor. They would include: utilities (electricity, water, telephones), ports, roads, railways, health, schools, libraries, swimming pools etc. Since the adoption of the philosophy of the Users Pay Principle in the 1980s the trends have been more towards you pay for your service, rather than receiving it free as it is cross subsidised through paying taxes. Public goods were available to everyone regardless of whether they use it or not. Users Pay paved the way to the Corporatisation of Government with contracting out of Government Services to the private sector and legislating to partially Corporatise Government Departments into Statutory Authorities with 51% public ownership or golden shares, in some cases a full sell off. Thus the balance of power has shifted into private hands. I remember shaking my head at the sell off of Telecom and its float as a publicly listed company and then the public share offer to the community. What I couldn’t understand is if we own Telecom (public asset) how is it we have to buy it through shares? Seems like we are being used to raise funds. I never bought shares for that reason.

Australian society experienced the redistribution of wealth particularly in the 1980’s dramatically redistributed to Corporations or what was termed the ‘high end of town’ and we are witnessing overtime the disappearance of the middle class, as both extremes are becoming polarized into ‘haves and have nots’.

The private sector philosophically is different in its aims and objectives to the rationale of Government as a public servant. The private sector justifies its existence to shareholders or owners of the business and its focus is to profit maximize (net revenues less net costs) and if it takes ownership of traditional public goods then cross subsidisation becomes a false economy, as the purpose in business is to increase profits not ensure social equity. Moreover, as private property rights occur then the public loses control of those assets purchased by taxes. Thus, psychologically the shift from community ownership to private ownership changes public space and entitlement.

There were arguments justifying this shift that the private sector was more efficient than Government. However, I often wondered if that were so then employ private sector managers, even that notwithstanding, the argument continued. Some Human Resource issues were raised regarding the inability to sack public servants who were deemed inefficient again giving kudos to the private sector as efficient from a profitability perspective. The efficiency was linked to productivity and profit within competitive markets. This is the economic paradigm not social policy perspectives of not seeking profit but social equity and stability. Yet weaknesses within the private sector (capitalist economy) such as no incentive to cross subsidise, wages distortions, longer working hours and the notion that the private sector not responsible for social inequities (externalities) was not raised or heard. The dichotomy between Government and the private sector was a line drawn between societal impacts and profit maximisation the former the responsibility of Government, the latter the responsiblity of business.

In Australia, we saw increasingly public goods or assets sold off and the diminishing of cross subsidization. This happened in telecommunications, electricity, water, minerals and contracted government services. Telecoms are a good example. When Government owned telecommunications 100% they serviced remote rural areas and cities. It is more expensive to service remote areas but the principal of Government ownership is 100% coverage of the whole population and the idea of equality and equity, all pay the same price. In the private sector there is no incentive or social commitment beyond profit maximization which may increasingly truncate services that are deemed not profitable or find ways to make them profitable, thus raising the cost of living. Moreover, in recent years telecommunications companies across the world (formerly owned by Governments) now employ Call centre staff in developing countries not with the predominant philosophy of helping poor people, but to take advantage of lower costs of staff rather than adhering to social obligations to employ local people in the home country. Thus the clear face of profit becomes clear as distinct from local social advantage.

Water is another public good whereby citizens pay rates. In other countries the privatization of water has brought protests as the very poor cannot afford water (Bolivia is a case in point), that should be a public good (Government subsidized). The debates ranged from something that falls from the sky should be free, others argued the catchment and treatment of it enabled private rights. So it was very much a rights issue that was determined by private ownership or community ownership or a global commons.

Another area of significant change has been wages and the implications of a changing social demographic and changing aspirations as a result. Back in the 1970’s Australia established an Australian Industrial Relations Commission (1973-1988) to conciliate disputes, set Awards and determine capacity of industry to pay. Moreover, the IRC managed the Centralised Wage Fixing System. The IRC standardized industrial Awards and conditions (up to 30 conditions) to ensure fairness in equal work, equal pay, conditions and unfair dismissal etc. So no matter what State of Australia you lived or industry employed in, citizens of Australia were paid at the very least an Award wage which did not fall below the poverty line, hence ensuring a Living Wage. This is to ensure a social policy of fairness and was based on egalitarianism. It is to ensure that people are not being exploited and instills equity and standardization across all industries. Over time the Prices and Incomes Accord process (1983-1995) was introduced whereby wage increases were traded off for Superannuation deductions from wages. Superannuation was a system of enforced saving as investments to pay for retirement in response to projected ageing of the population.

No Prime Minister had removed the wage setting powers until John Howard. During the Liberal Government (Howard years) the introduction of the Workplace Relations Act enabled the implementation of Enterprise Bargaining to enter the industrial system increasingly giving power to employers to set their own wages on an individual basis and on contracts. The arguments against this were the disproportionate power of employers over employees who did not have sufficient bargaining power to negotiate better conditions, particularly during times of higher unemployment. Moreover, contracts meant that jobs were less secure and if not meeting employers expectations they could fire employees and protections under unfair dismissal were removed. The contract system also had implications on the ability to own a house, if an employee wanted to have a mortgage, when applying to the Bank they could not guarantee employment longer than 1 year. Banks require certainty. In addition, the de-unionisation through voluntary representation meant less representation of workers with management and increasingly silencing of workers and marginalization their voices at work to speak up if they are adversely affected. Therefore what we saw was Democracy or what was termed Industrial Democracy structurally and legally weakened in the workplace in the interests of profits and productivity and enabling unquestioned dictatorial management styles. This was also coupled with further uptake of technology which replaced labour (as a cost of production) with efficient technology (to lower costs). This was particularly evident in the Manufacturing Sector. Therefore, employees were faced with the imbalanced deal of taking the wage and conditions offered or go somewhere else if dissatisfied. To leave became the only vestige of democracy, the right to leave (resign). This of course was not democratic it is the visibility of disproporationate power and property rights (paying for labour) and it is why the idea of wage slavery arises, in that people do not have a choice or any power to affect their wages or conditions or they feel they cannot speak up and risk losing their job. That was the set up. Wages were determined by market forces of demand and supply and that would be calculated by market trends and the perceived income generating capacity of an employee rather than task oriented. If employees are faced with higher costs of living then their living wage becomes a wage that may or may not let them live (cover bills) and not save disposable income. This is the meaning of wage slavery. As the power of employees diminished and their ability to negotiate higher wages so did their ability to save enough to live the dream of owning their own home. That now days, is seen as remote or impossible given the rising real estate valuations, overseas speculators buying property for investments and increasing prices of rental properties. This combined with rising food prices, separated parents (higher costs), children’s demands, utility costs and wage disparities (professional, blue collar) means that mainstream people are working to survive and the incentive to work is slowly disintegrating as people are not able to cope with work pressures, hours, little choice, family break up and a world that appears through the media lens as increasingly unstable, out of control and fearful.

So in essence the Government/Private orientation comes down to collective rights versus private rights. Although Government adoption of Users Pay mirrors the demand and supply economics of the private sector. This is often regarded as politically moving to the right away from the Welfare State. The private sector accords rights through ownership rather than citizenship and this is decided by income. The structural changes whereby Government divests itself from services increasingly moves from a society being serviced by an economic structure to an economic structure served by society. Increasingly the discourse has business interests defined as public interests such as employment, training, enterprise bargaining, competitiveness, lower business taxation and concessions and prosperity for all. Rather than a societal discourse that focuses on quality of life, work/life balance, parenting, education, health, aspirations, potential, values that determine who we are rather than what we do.

Increasingly life becomes about work and if you do not fit into the working paradigm you are somehow an outsider or ‘loser’. This marginalizes artists, philosophers, children, the elderly, stay at home parents, part-time workers, inventors, naturalists, those who don’t want to work, unemployed who are not economically valued, yet they are part of the society that makes life diverse rather than a workforce that are within the 17-45 age bracket. As a society we lose touch with the other members of society and increasingly our values become materialistic rather than aspirational. This is not mentioned in the Government Budget. As it is more about a Taxation and Expenditure then real social understanding that rises to the demands of the times we are moving through. I say this in general. I do accept there are those who would like to see more societal needs met as they can see the social disintegration.

In the Australian Budget the area of mental illness got top billing. This is very important and it reveals the cracks in society showing, given this is a priority. People are not coping and the negativity we see so widespread these days is having an impact on our ability to function. The sadness through marriage breakup and coping alone, the lack of support systems of friends, increasingly turning to drugs and alcohol to cope and the seriousness that is taken for granted as normal, all impacts our emotional wellbeing.

We have created an paradigm whereby the economic analysis dictates the structure and rights of society. Rather than an economy serving the needs of society. When we hear calls of jobs being important, that means that government needs business to expand output, to profit maximize in order to employ more staff. Yet with increasing technology and cheaper labour overseas, expansion of outputs does not necessarily translate into more local jobs which is regarded as stabilizing society (groups of disadvantaged people) and lifting revenues through taxation. So the Government has a vested interest in economic growth and public spending or economic activity. That is seen as the only way to ensure social stability and to win votes at an election. Overall, it is a system of co-dependence where people depend on employers to pay them, they depend on organizations to meet their needs for goods and services and they depend on governments to provide services such as education, health, welfare and infrastructure. Therefore, the society is in effect dependent on the economic system as few people know how to meet these needs outside of the system. This is where it becomes a catch 22. Moreover, social norms consider working as responsible, having children and having a mortgage as the way you move through life. In effect, people become tied for 20 years plus into a system financially that forces them to work. It is the going to work and the increasing pressures there and the increasing neglect of children that creates stress, exhaustion, physical illness and mental illness. An economic system increasingly technological that did not free up a leisure society but actually enslaved the population into a working scenario that dominates life rather than serving people to enjoy more of life. Moreover, these stresses and materialistic values are creating fractures in families where 1:3 families are breaking up or perhaps closer to 1:2. This is not a stable society socially and when you add in the increasing drug issues with youth and domestic violence there is another side of the balance sheet that has neglected the emotional wellbeing of people and their need for happiness. Yet we focus on the numbers of the Budget but not the real social issues percolating beneath the surface, that is relegated as left wing and not the responsibility of business given work pressures are central to this externality.

I feel it is important to enter at this point the environmental challenge. For the prevailing economic paradigm and focus is unable to respond to the reality of environmental shifts. At no point in history has the environmental message been louder. With the world acceptance and acclaim of the Stern Review, the InterGovernmental Panel on Climate Change, Kyoto, Al Gore’s message, World Scientists Warning to Humanity, and many other environnmental forums this issue is on the table globally and will not be retracted. The greatest challenge for Governments with capitalist systems is how do they reconcile a system designed to maximize profits through expanding output and the taxes that Governments derive from consumption with sustainability and learning to live in a new way within natural limits? This is indeed a paradigm shift of monumental proportions. To-date there has been no radical change and business as usual is the norm. There has been no significant political leadership to move society into a new direction based on a new social/ecological paradigm as the system is so politically compromised by vested interests and the mainstream societies are largely disempowered and ignorant of the future their children are facing.

New voices are what we are seeking and new ways to transition society from a carbon based society to a ecologically sustainable social system in balance. This is not simply adopting carbon taxes to dissuade polluters, the current industrial practices are not feasible in the future. As Nicholas Stern said the carbon pollution is the greatest externality the world has ever seen. The fact that most industry is carbon producing means we have to shift to new ways and this also means changing values. If profit is driving a system maximizing profits through maximizing outputs and minimising costs without costing the environmental damage then we have to find a new incentive or goal, such as maximizing community happiness and living in ways that promote balance with nature and each other. Profit cannot exist in this type of new paradigm as it fosters greed not the common good or well-being as a first thought (principle). This is the dilemma every business person and world leader is grappling with. Rather than coming together as community to tackle this major challenge we have seen industry sponsoring campaigns to place doubt in the minds of people about the issue being carbon based pollution and using Scientists to offer other plausible reasons. This would not be a major issue if it was to truly work towards a balanced future, but as Stern says the argument about the science and whether it is a problem is over, the issue now is policy formulation and action. The majority of the Nobel Prize Winning Scientists came together to state the problem is real and urged for action. That is enough to get a reality check that the problem is real. The very fact we can see major climate changes that are firsts on climate records and are manifesting as cataclysmic events makes the reality clear. So now is the time for real leadership, for principled leadership to rise above vested interest, self interest towards best interests in the interests of the future of our children. This is where courage and commitment to change must replace policy documents pronouncing the same doctrine which is sinking the planet. If the reality is those in power do not know what to do, then open it up to the public, they will have the answers and make a global forum.

I would like to propose that rather than a Budget Night what we need now a Sustainable Social Policy Community Forum (SSPCF) that looks at social/ecological/business issues on one side and the financial arrangements on the other and the real priority areas to focus change. This SSPCS predominantly spells out a Blue Print for Change and then goes into the current economic situation and inspires people to think about becoming ecologically sustainable. This type of delivery within a community forum framework (so people feel involved) could venture into innovative ideas such as investing in market gardens that can support Regional areas rather than importing food, subsidizing water tanks, free solar panels (to get people off the electricity grid), steam run cars, returning to cottage industries to rekindle trades, agriculture, hand made skills, survival skills rather than job skills. Self sufficiency ensures social stability but within a changing discourse that encourages self sufficiency and values as the future. I think this is what could happen. Without doubt I recognize the challenge here and this is just a few ideas off the top, it would have to be really thought through to ensure no panic and to further empowerment and more realistic appraisals of the future we are facing. These tough decisions have to be made and certainly Nicholas Stern is advocating serious change. We can’t pretend all is well when the ice is melting and the climate is erratic we have to face this challenge with honesty and invite community input and action. This will be a tool for empowerment itself.

My idea of starting a International Peace and Sustainability Award for Children could be a great way to move forward. To have a World Peace Sustainability Clown visit schools and communities and have children engaged in projects that design the process of change. That would then inspire their parents and communities to jump on the band wagon and to consider new ways that they have never thought of. I can’t think of better teachers than children. Then we get the focus clear it is about children for which we are prepared to change. The delivery of this message by a clown is fun and not confronting and opens creativity in a way that is enthusiastic and positive. This could get the ball rolling.

If Australia could take the lead then other Governments may find the courage to bite the bullet here. I understand the fear is chaos of populations becoming alarmed at change. There is no doubt this is a challenge, the way around this is community funded forums to start dialogue, problems solving, conflict resolution and solutions. I see no other way if we seriously want to tackle the challenges before us. It is going to be a rethink of the entire system. This is a first in history, or we can wait for what I perceive as a collapse coming. We do have choice here and democracy as the vehicle.