Jobs and the Economy Debate at Central Policy Branch 29 Oct 2012

Last night the Central Policy Branch hosted the Jobs and the Economy Policy Commission’s open forum on our policy area. This forms part of the JEPC’s consultations with ALP and community members, where we are encouraging people to come forward with ideas on what the ALP should be doing in this vital area.

The forum was broadcast live on the net, and about forty people came along to Trades Hall to participate in person. The speakers were the co-chairs of the JEPC, UnionsNSW Secretary Mark Lennon and Shadow Treasurer Michael Daley, and James White, Senior Economist at Colonial First State Global Asset Management and Alex Sanchez, General Manager Policy Economics and Taxation at the Insurance Council of Australia.

Mark Lennon introduced the speakers with some remarks about maintaining NSW as a high wage economy, being proud of that achievement and making the most of it rather than seeing it as an impediment. He mentioned the role of financial services, telecommunications, construction and retail sectors in providing large numbers of employment opportunities.

James White spoke about the importance of the service sector, and the growth of jobs in that area as the relative cost of manufactured goods dropped. He used the example of the growth in employment of personal trainers to show that in the future more of us (but not all) will be doing jobs that we actually enjoy doing, that are really part of our leisure. He said in terms of policy that he would go into debt to fund massive infrastructure developments, particularly in connecting western Sydney with the city, as a matter of equality, and providing better jobs. He would build a high speed rail from Brisbane to Melbourne, via Sydney, as part of a strategy to ‘regionalise’ our economy better. He spoke of the need to build infrastructure as a public good, and noted that while he had formerly been in favour of public private partnerships to build infrastructure, he had changed his mind after seeing the Chinese approach, where good public infrastructure helps build the tax base through greater economic activity. He outlined how the mining boom had created price and demand pressures because there was no corresponding production boom in things like food or housing, although the corresponding increase in purchasing power over imports (including overseas travel) meant that Australians living standards had increased. James emphasised the competitive advantage that NSW had of being ‘a nice place to live’ and a ‘safe place to put your capital’, and that these things should not be underestimated in thinking about our economic policies.

Alex Sanchez prefaced his remarks by saying that the relatively small size of NSW and Sydney, and the division of responsibilities between State and Federal Govts, made it difficult for a NSW Govt to affect big changes in the economic area. Nevertheless he outlined a list of bold reforms that he would undertake in the first 100 days of a Labor Govt. They included: building Badgery’s Creek Airport; reforming the tax system by removing inefficient and unreliable transaction taxes and replacing them with broad land and payroll taxes; amalgamating local councils and streamlining planning and development approvals processes and liberalising liquor licensing laws (in the hope of making Sydney more like Madrid or Melbourne). He also advocated ‘asset swaps’, ie. selling public infrastructure to invest in new infrastructure, especially transport infrastructure. In response to questions from the audience, he also advocated improving housing stock, especially in public housing estates that were failing and becoming poverty traps. Alex called for the Labor Party to start talking about poverty again and how we can pull people and communities out of it.

Michael Daley had said that he would like the audience to have a turn before giving his comments, and after a few contributions (particularly good ones about the health and community sectors from some members, one of whom was from The Warren Branch) he responded particularly about the impact of the GFC on inefficient state transaction taxes.

In response to to a question from Geoff Derrick asking the panel members whether they would use debt, increased/reformed taxes or selling public assets to fund new infrastructure, White said ‘debt’, Sanchez said tax reform and asset sales, and Daley said tax reform.

The it was my turn!

I thanked the audience and the people tuning in via the net, and our speakers. I said that Labor’s mission was understood by the community to be about greater equality and fairness, and that the majority of people in NSW shared those values of equality, that there should not be massive disparities in wealth and income, health and education, life expectancy and leisure. I said the challenge was to bring those values to bear on a fairly dry, complex and rational area like jobs and the economy. I put it to Alex in particular that his ideas, many of which were admirable and certainly rational, needed to be put to the community (and the Labor Party) in terms of guaranteeing increased equality, because previously ‘rational’ reforms had proven to be pro-inequality, and particularly pro-insecurity. Neither the ALP nor the community would accept policies that increased inequality and insecurity, no matter how rational or sensible they may be. I said that the ALP could have a commitment, for instance, that every policy it pursued had a measurable effect on decreasing inequality, using indicators like the Gini Coefficient or other measures.

In response, James and Alex mentioned the great achievements of the Hawke and Keating years where economic reform was matched with social improvements, such as the introduction of the ‘social wage’ and Medicare.

Michael Daley told a story from his electorate: A group of four teenage boys had started throwing rocks at buses, and the RTBU had decided that in the interests of safety, their drivers would no longer go past Maroubra Junction at night- cutting off services to half his electorate. Daley went to then Police Minister John Watkins and secured two extra constables so that the boys were caught and the attacks stopped. Daley said that the likely cost of the two extra constables was $200,000 p/a, and that was now probably up to $250,000. He said he wants every decision of Government to be analysed for cost effectiveness. He said that, potentially, a $60,000 p/a youth or social worker for the boys would have prevented them from taking up the rock throwing in the first place. And instead of entering the criminal justice system and probably being unproductive guests of Her Majesty right now, the boys would have jobs and be contributing to economic growth. He said he wants a government that does early intervention better and really looks at the relative costs of Government spending on various areas, so that taxpayers are getting value for money.

I thought the evening went really well, and stimulated some good discussion.

I’d love to hear your thoughts, either in person, or in comments below or via email or facebook.

All the best,

Luke

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About lukewhito

Politics, history, cricket, rugby league, bodysurfing. Kids and family. Love it all.
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2 Responses to Jobs and the Economy Debate at Central Policy Branch 29 Oct 2012

  1. Michael Tull says:

    Thanks Luke – That’s a useful report & really helps people feel part of an important process. The big infrastructure project ideas are good to hear – we can all see the obvious benefits in, for example, better transport infrastructure but less clear to many of us ( but still important) are some of the finer economic implciations. And I’m always interested to see sensible discussion about he tax base – with an aging population, big economic changes & ever growing demands on goverment – revenue is the elephnat in the room for all goverments.

    cheers

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