|

Editorial : Amidst dark clouds, a precious silver lining.

Homeless Sales. Fran Urbano. flickr cc.

Once again, we are battered by bad news of the possibility of widespread malpractice in another major sector, as Prime Minister Morrison has announced a royal commission into aged care, with allegations of price gouging by some pro-profits, chronic understaffing, appalling wages for staff, and poor nutrition for many of those in aged care.

Coming on the heels of the royal commissions into sex abuse in churches and other institutions, and into the banking, insurance, and finance sectors, no wonder public trust in major institutions has been so damaged. Our political systems and media are taking their own share of opprobrium.

Yet there is a precious silver lining in all this: in Australia abuse and malpractice can be exposed. In many places in the world this is not the case. Corruption can be so systemic that one risks one’s life to speak up.

In Australia, fortunately, we have the means to combat corruption and exploitation, though not without struggle. Here we have to thank all those working to preserve ethical standards and good practice wherever they work, and are prepared to stand up against greed and corruption, often at risk to their careers and at significant cost to themselves and their families.

Australians may take it for granted that we have a reasonably just and fair society. But this only happens because generations of people in Australia have fought for decent wages and reasonable equity, with education for all, and democratic governance to ensure stability and security.

Alas in many areas, not least in major international companies and financial institutions, that ancient enemy of the human race, greed, is still driving exploitation and corruption. John Quiggin deplored the ‘fraud and misconduct on a massive scale’ exposed by the banking royal commission, amounting to $1 billion or more. But this pales beside the criminal activity and large-scale fraud ‘by the world’s biggest and most respected financial institutions.’

Failures in neoliberal markets

Commentators have been reflecting on what we have learnt from the Global Financial Crisis ten years ago, warning that the lessons have not been learnt, and that we risk an even worse economic meltdown.

In the view of Ross Gittins, the neoliberal mantra that privatisation and free market competition would optimise services has proven illusory in outsourcing of unemployment services, child care, vocational training, the electricity market and aged care.

Professor Ross Garnaut attacked the rent-seeking and huge profit margins in the Australian economy. He quoted the Productivity Commission’s report that the return on banking in Australia was some five times higher than in France or Japan, and even higher than in Britain and the USA.

‘The financial oligopoly’ with ‘unrestrained pricing power’ has swollen to become the biggest sector of the economy, with profits rising another $7.5 billion in 2017-2018, a growth of 7.4 per cent. In contrast, the ‘average compensation per employee was 1.7 per cent wrote Tim Colebatch in Inside Story.

‘There is a deep-seated culture among the business elite that expects and welcomes big pay rises at their own level yet suppresses them among their workers. Menzies would have taken business leaders on over this class warfare’, Colebatch concluded.

As others have noted, especially through the Royal Commission, the regulators ASIC and APRA have been asleep at the wheel.  Richard Dennis from the Australia Institute has called for a royal commission to find out why.

Housing & homelessness

The housing crisis in another instance of the failure of government policy to provide decent housing for our people. The housing bubble will have lasting consequences for younger generations especially, pricing many out of home ownership, one of the great stabilisers in our society. The consequences of the housing bubble were entirely predictable and preventable, but too many people were making too much money out of it.

Stable, affordable and safe housing is essential for basic human wellbeing, providing a secure environment for families and fostering community links. Consider how stressful it would be sleeping in a car with small children or desperately searching for shelter, not being able to afford even a single room during cold, wet weather.

As the Catholic bishops point out in their social justice statement 2018-19, A Place to call Home: Making a Home for Everyone in our Land, the issues are complex but it is unacceptable that over 116,000 people in 2016 had no stable housing.

Many people are of course aware how serious is the housing problem. Peter Mares in his book No Place like Home: Repairing Australia’s Housing Crisis quoted Robert Pradolin, a senior executive at Frasers Property, that ‘We are creating an intergenerational time bomb’.

Growing inequality

Housing problems are exacerbated by low wages and growing inequality, including the ‘huge increase in the incomes of the top 1 per cent of households’, in the words of Ross Gittins.

Professor Peter Whiteford disputes claims by the government that everyone is better off financially. He argues that increases in the age pension have disguised increases in inequality elsewhere, and that 40% of Australians ‘were in a lower income group in 2016 than they had been in 2001, for reasons ranging from retirement to disability to unemployment to family breakdown.’

Australia’s treatment of unemployed people is particularly abysmal, leaving many people quite destitute. In March 2018, nearly 828,000 people were receiving Newstart and Youth Allowance. Some 64% were unemployed for more than a year, and 15% for more than five years, half of these being over 49 years old, 29% of these with a disability. The Newstart allowance for a single person with no children is $550.20 a fortnight. Who could afford food and rent on that miserable amount?

The good news, however, is that we can solve many of these problems if we have the good sense to listen to sound advice, resist the corrosive pressure of rent-seekers and special interests, and choose social and political leaders with the skill and insight to work for a more equitable prosperity.

 

 

“>

Posted by on Sep 19 2018. Filed under Economic issues, Feature, Recent articles by SPC members. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

Leave a Reply