1. The cost of debt
Treasurer Josh Frydenberg and PM Scott Morrison have been telling us that we need to contain debt, and that is why those on JobKeeper must return to poverty. Frydenberg in particular has been praising himself for his fiscal bravery, and the size of his COVID-19 rescue package.
Greg Jericho has identified how much the extra debt has cost. The answer is – nothing. See The government is stuck in the fallacy of debt and deficit while ignoring the climate crisis:
- The PBO estimated that in the December quarter last year debt interest repayments were $4.1bn – the same amount it was in December 2016 when total debt was half the current level.
- In December 2016 the government paid around 2.8% interest on a 10-year bond; right now it is paying around 1.2%.
2. Ross Garnaut’s vision
Last Thursday I managed to buy Ross Garnaut’s new book Reset: Restoring Australia after the Pandemic Recession. His article in The Guardian The prize for Australia’s post-Covid restoration is large. But fairness must be integral is an excerpt from the Introduction.
I’d like to highlight these two paragraphs:
- Restoration will require acceptance of a high degree of income restraint by Australians, who have already endured the longest period of income stagnation in our history, through the dog days and then the Covid-19 recession. This is regrettable, and many Australians will see it as unfair, since the wealthy continued rapidly to increase their wealth and incomes through the dog days, and most also did well in the pandemic recession. Experience has demonstrated that such restraint in the public interest is possible in our Australian democracy if most people accept that the benefits are distributed fairly.
There will be widespread support for the necessary reforms only if the many people on low incomes and with insecure employment and little wealth – those who were damaged most by the pandemic recession – gain from the change. Fairness is integral to any program to lift productivity, employment and incomes. Fairness has to be achieved by means that do not block the path to higher productivity, employment and incomes. That requires reform in our personal income tax and social security arrangements, built around a guaranteed minimum income: the new Australian income security payment.(Emphasis added)
Garnaut is not a modern monetary theorist. He believes that while the government needs to spend a bit to renovate the economy, fairness is essential if productivity is to be increased.
Garnaut’s new Australian income security payment is in fact a ‘universal basic income’ proposal. Our government will never agree to that because they clearly believe that poverty is necessary to make sure unemployed people are motivated to work.
3. New JobSeeker is a shocker
Here from the New Daily is what JobSeeker will be from April 1:
That’s $50 per fortnight, or $3.57 per day plus CPI compared to pre-COVID.
Those who thought the Government had changed ideology or found a heart have been rudely disabused.
Greg Jericho says The jobseeker increase is pathetic – and so is the spin to justify the paltry amount. He says the previous base rate of $40 per day:
was completely unfit for purpose – and it was politically untenable to have 800,000 extra people suddenly discover just how unfit.
Now most of those people have gone back to some form of work and so the government can return to treating the unemployed with the contempt it always has – including increased mutual obligations and employer dob-in call lines just to ensure they feel suitably dehumanised.
The claim is that JobKeeper is now commensurate with what it was during the Howard years. Jericho shows how it declined during the Howard years, and is now only commensurate with the end days of Howard.
Minimum wages have fallen against average wages, and unemployment has fallen against wages:
When the Howard government came into power in 1996, Newstart was worth 20.6% of the average male full-time weekly earnings; by the end of 2007 it was down to 17.5%; now it is 14.9%.
Jericho says that if Newstart and JobSeeker had risen in line with earnings over the years, it would be at least $100 a week higher.
4. Australia excels at punishing the jobless
Cait Kelly at the New Daily tells of the reaction of some unemployed people in ‘My gut dropped’: Job seekers confused and angry about being left in poverty.
Euan Black finds that Countries with higher unemployment benefits have lower jobless rates. Our replacement rate is less than half the OECD average:
The Australia Institute Study he’s following does not find a causal link, but report author Matt Grudnoff said:
excessively low unemployment benefits like those found in Australia could actually act as a disincentive to find work.
“[Having such] punitive payments actually acts a problem for people seeking out jobs,” he said.
“If you need to travel, if you need to dress appropriately, if you need to be at a certain place at a certain time for a job interview and you don’t have the money to do those things.
Black points out that the new liberal think tank Blueprint Institute have suggested a 70% replacement rate, capped at $35,000 and limited to six months at that rate, funded by a 1% tax levy as a form of income insurance.
Black consulted other economists who find that the ‘dole bludger’ argument doesn’t stack up. After all JobSeeker will only amount to 41.2 per cent of the minimum weekly wage. Chris Richardson said that if the Government went back a quarter of a century they would have handed over $250 a fortnight not $50 a fortnight.
Citing the annual cost as $9 billion makes it sound large, but that is over four years – the annual cost is small change.
We know there are other large areas of need, such as aged care, and housing, but Australia is looking like a country where an effective social safety net does not exist, not because we can’t afford it but as a matter of government choice.
In the budget the government found $98 billion in new measures designed to return the economy to health including tax relief for businesses and low-and-middle-income earners. However, if you are out of work the government does not consider it should provide you food and shelter.
Here’s a graph of JobKeeper in relation to pensions, the poverty line and the minimum wage, courtesy of the AFR:
The Government is actually proud of what it has done, saying it got the balance right.
5. Do extraterrestrials exist?
Probably, says Professor Avi Loeb who has just finished his stint as longest serving Chair of Harvard’s Department of Astronomy. He says billions of the suns in the Milky Way Galaxy have planets similarly placed in relation to their sun, and similar to Earth in size, so it would be arrogant to think we are alone.
His latest book Extraterrestrial: the first sign of intelligent life beyond earth is based on an object picked up by astronomers at the University of Hawaii in 2017. From the New Scientist:
- In 2017, something strange came hurtling through our cosmic neighbourhood. Astronomers only spotted it once it was already on its way out, so they didn’t get a proper look. But from the few observations we did get, it was clear that the object wasn’t from around here – its trajectory indicated that it came from another star system. It was dubbed ‘Oumuamua, which means “scout” in Hawaiian, and categorised as the first interstellar object we have ever seen in our cosmic neighbourhood.
It was shinier than anything that has shown up before, shiny enough to suggest it might be burnished metal and was just weird:
- Observations suggested it is likely to be either flat or cigar-shaped, tumbling end over end every 7 hours or so and accelerating at a pace seemingly greater than could be accounted for by gravitational forces alone.
Loeb’s bottom line is that we just don’t know, but we should not rule out that it was made by intelligent beings elsewhere.
Unfortunately no-one got a photo of it, so I’d ignore artist versions, which suggest rock. The acceleration, which suggested propulsion, except there was no evidence of such, came as it departed.
Loeb points out that we are actually hurtling in space, so it could be still and we hurtled by.
New Scientist may be pay-walled, so here are some other links:
Scientific American – Astronomer Avi Loeb Says Aliens Have Visited, and He’s Not Kidding
- ABC RN Conversations – Oumuamua’s secrets
With the Scientific American, remember authors don’t get to write the article headings. He worries about science when possible solutions are ruled out because they are inconvenient or unsettling.