17 ideas for Labor to fight inequality in NSW

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A direct assault on inequality is the idea of our time.

No idea could be closer to Labor’s original purpose.

Labor’s Leader, Bill Shorten acknowledged this recently when he spoke about this as Labor’s “defining mission”.

Shorten said: 

"Inequality kills hope. Inequality feeds the sense that the deck is stacked against ordinary people, that the fix is in and the deal is done...it fosters a sense of powerlessness that drives people away from the political mainstream.”

That’s also how the issue is talked about by our sister parties. Inequality is an issue that unites Hilary and Bernie in the United States, Corybn and the Milibands in the United Kingdom.

It is in tune with the views of the world’s key economic institutions. The International Monetary Fund, the OECD, and the World Bank have all stated the case against inequality and its stifling effect on growth.

Thomas Piketty’s influential work “Capital’ assembled an army of data to show that inequality was bad and getting worse.

When the Governor of the Reserve Bank is calling for workers to fight for pay rises, you know something is up.

Even Chris Bowen, the most articulate modern spokesman for the Labor tradition that prefers to emphasise the principle of equality of opportunity has moved on. He recently gave a speech on the Case for Action on Inequality. He has acted too, championing restrictions on negative gearing and capital gains tax.

The Whitlam, Hawke and Keating tradition tended to emphasise opportunity. The dominant view was that if you gave our people an equal chance they would succeed. That view was right for the times.

Today we need to tackle inequality head on.

That recognition globally and within Federal Labor reflects that after three and half decades of economic liberalisation, launched by Thatcher and Reagan, income and wealth disparities have become too wide, including in Australia.

Not everyone in Labor got the memo though.

At this annual conference the policy committee charged with setting Labor’s economic policy has gutted an attempt to focus NSW Labor on this goal of fighting inequality. They have rejected platform resolutions with thirteen new ideas for NSW Labor to combat inequality.

They have preferred to defend a platform which remains largely unchanged since Labor lost Government in 2011.

What would it mean to make this change?

NSW increasingly has a two-speed economy. A globally integrated Sydney is growing faster, and its wages are growing faster, than in the regions that surround it. This is made worse by a government concentrating its infrastructure spending in Sydney. In NSW, tackling inequality means addressing the two-speed economy.

Why do we need to do this?

We can’t close the gap for indigenous citizens, or include disabled citizens in work and society, or keep older blue collar men in useful work or address pay equity without declaring we will tackle inequality head on. Progress is simply too slow in these areas.

The following ideas are a start. They represent a modest attempt to arm Labor in the fight against inequality in NSW.

I am sure there is more we could do.

There is one thing we must do.

That is to put fighting inequality at the heart of our platform and objectives.

I intend to move this way at the conference.

If the economics committee has its way, my resolution will be rejected.

That would put us out of step with our sister parties, with the Federal Parliamentary Labor Party, with the current economic consensus and with the electorate.

NSW Labor should commit to this fight.

 

John Graham

July 2017

 

Combatting the two-speed economy

17 ideas for Labor to fight inequality in NSW

 

Fighting inequality should be central to Labor’s platform

The first step is to state clearly our determination to fight inequality. We should make it clear in Labor’s economic platform that this is central to Labor’s cause.

1. Amend Labor’s platform to read

NSW Labor believes reducing inequality produces happier, healthier citizens and will boost economic demand and productivity.

Status: Rejected by the Our Economic Future Policy Committee

2. Amend Labor’s platform to read

Creating a more economically equal society, which requires the redistribution of income, wealth and economic power.

Combating poverty and supporting disadvantaged NSW citizens with adequate welfare support and services.

Status: Rejected by the Our Economic Future Policy Committee

You can’t fix what you don’t measure

Labor should properly measure inequality in Government. This is especially important in NSW to combat the two-speed economy. The current statistical measures of regional inequality are inadequate and infrequent.

The current Government’s approach is to turn a blind eye to this problem. Labor has to do better.

3. Add to Labor’s Platform – measuring wellbeing

That NSW Labor will ensure that NSW budget measures will include both the traditional budget measures such as the Gross State Product, as well as broad measures of the community’s economic, social and environmental wellbeing.

Status: Rejected by the Our Economic Future Policy Committee

4. Add to Labor’s Platform – measuring inequality

NSW Labor will implement an annual report into the state of inequality in NSW.

Status: Rejected by the Our Economic Future Policy Committee

5. Add to Labor’s Platform – measuring regional inequality

NSW Labor supports more detailed and more frequent reporting by the Australian Bureau of Statistics of state and regional economic data. Key state data is currently only available annually. Regional data is essential to measuring difference in economic conditions in cities and the regions where parts of the state are increasingly integrated into the global economy.

Status: Rejected by the Our Economic Future Policy Committee

Building the machinery of government to fight the two-speed economy

Even when Labor makes this a priority when it comes to power, the machinery of government to combat inequality isn’t strong enough. An Economic Development Council, regular jobs forecasting study, and a renewed commitment to a state plan would all help fix this.

6. Add to Labor’s Platform – state plan

NSW Labor will implement a state plan with measurable targets and priorities, as a way to drive government performance and the rapid implementation of Labor’s Platform.

Status: Rejected by the Our Economic Future Policy Committee

7. Add to Labor’s Platform – jobs forecasting

NSW Labor will implement a jobs forecasting study to indicate what the areas of growth are expected to be over a medium term horizon, including an analysis by region.

Status: Rejected by the Our Economic Future Policy Committee

8. Add to Labor’s Platform – NSW Economic Development Council

NSW Labor will establish a NSW Economic Development Council, comprised of key employers and trade unions which will focus on productivity growth and significant state infrastructure.

Status: Rejected by the Our Economic Future Policy Committee, note the Committee has supported a change to the Platform to establish an Office of Future Industry and a Future Industry Taskforce.

Funding the fight against inequality

We should launch a broad review of taxation measures in NSW. It should examine options in relation to stamp duty. Housing is the source of the greatest divide in wealth today.

One of the major gaps in regional development is still financing for job creation. Labor should examine the Clean Energy Finance Corporation model to assist to leverage private sector investment into our regions – combatting the two speed economy. The British Labour party in particular has a much more developed discussion about overcoming financing gaps to drive regional development.

State funding, especially in the sports and the arts, should be tied to improving gender equality outcomes.

9. Reviewing taxation measures, including stamp duty

Add to Labor’s Platform

NSW Labor will review taxation measures in NSW, including consideration of a shift from stamp duty to a broad based land tax.

Status: Similar wording supported by the 2016 NSW Annual Conference

10. Add to Labor’s Platform

NSW Labor will adopt measures to finance economic development including manufacturing, through the introduction of a NSW Development & Innovation Investment fund or bank along the lines of the Clean Energy Finance Corporation. Such a bank will have a mandate to seed fund key job opportunities within the state of NSW.

Status: Rejected by the Our Economic Future Policy Committee

11. Add to Labor’s Platform – arts funding tied to equality

 “…and gender equality.”

Status: Supported by the Building Sustainable Communities Policy Committee

Inequality in the information age

In the information age, if you can’t read, you can’t keep up. Whether it’s reading an article or a map, literacy is more important than ever, and government needs to play a more hands on role giving people support to read.

Libraries are engines of equality in the digital era. Labor should boost their funding.

We should tip the balance in favour of consumers and small businesses by supporting an open data agenda.

12. Add to Labor’s Platform – the right to read

NSW Labor believes that literacy is one of the keys to be able to participate as a full citizen in society in the digital era. NSW Labor supports the principle of the right to read – a guarantee to NSW citizens that they can expect support to learn to read, regardless of their age. NSW Labor supports a massive lift in our literacy effort, with stronger programmes in schools and TAFE, and an outreach program in our public libraries.

Status: Rejected by the Building Sustainable Communities Policy Committee

13. Add to Labor’s Platform – library funding

NSW Labor recognises that local libraries have a vital role to play in getting books and information into the hands of people regardless of their wealth. NSW Labor notes that the state share of library funding has fallen to under 10% from 23.6% in 1979/80. NSW Labor supports adequately funded NSW Libraries and will increase the current state share of library funding.

Status: Supported by the Building Sustainable Communities Policy Committee

14. Add to Labor’s Platform – open data

NSW Labor supports the role of a Data Custodian at state and federal level to guide and monitor new data access and use arrangements, including proactively managing risks and broader ethical considerations around data use.

NSW Labor supports a new Comprehensive Right for consumers that would give individuals and small/medium businesses opportunities for active use of their own data and represent fundamental reform to Australia’s competition policy in a digital world. This right would create for consumers: i) powers comparable to those in the Privacy Act to view, request edits or corrections, and be advised of the trade to third parties of consumer information held on them ii) a new right to have a machine-readable copy of their consumer data provided either to them or directly to a nominated third party, such as a new service provider.

Status: Rejected by the Our Economic Future Policy Committee

Federal measures to combat inequality

Federal Labor can, and is, taking steps to address inequality. We can do more.

15. Add to Labor’s Platform – Buffett rule

NSW Labor supports the principle of the Buffett Rule – that is a tax principle that a minimum level of taxation should be paid by all individuals, set at the level of the average wage earner.

Status: Currently in the National Labor Platform, rejected by the Our Economic Future Policy Committee

16. Add to Labor’s Platform – expand the role of the Reserve Bank

NSW Labor supports the Reserve bank of Australia offering low cost, internet delivered financial products direct to Australian consumers.

Status: Rejected by the Our Economic Future Policy Committee

17. Add to Labor’s Platform – Petroleum Resource Rent Tax review

That NSW Labor supports a fair share being paid by resource companies under the Petroleum Resource Rent Tax. A future federal Labor government should review the legislation to ensure this is the case.

Status: Supported by the Our Economic Future Policy Committee

 

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