Have a read of this excerpt from Prime Minister Julia Gillard’s speech, delivered at the Sydney Institute (Luna Park “campus”), 13 April 2011:
“Friends, we have a fiscal framework aimed at making the boom last and not adding to the boom’s inflationary pressures.
And we have a policy framework aimed at ensuring all Australians benefit from the opportunities created by the boom.
To appreciate this policy framework, I think it is necessary to appreciate some of the contradictory elements of the economic context.
What I think of as “patchwork pressures” in our economy, where some parts of the economy are strained by growth while others risk being left behind.
Because mining is especially profitable at the moment, it rewards investors and pays workers well.
Investment, equipment and workers are drawn from other parts of the economy, like a magnet dragging iron filings towards it.
In mining areas, the boom has lifted housing costs, it forces non-miners to raise wages to keep workers and it puts pressure on infrastructure like roads, ports and rail.
The record high for the Australian dollar lowers prices for imports – which is good for consumers – but it does make it harder for our exporters to compete.
Mining’s hunger for equipment and workers can also raise costs and make it harder for these non-mining sectors to compete, compounding the high dollar’s effects.
All these pressures require careful management.
So to manage these pressures we have sought to bolster productivity and balance growth:
By improving vital economic infrastructure – roads, rail and ports so we better get goods to market and people to work – with the NBN providing the most vital infrastructure of the future.
Connecting regional Australia – regions of growth and regions needing more growth – to the economic capitals of this country, and the world.
By cutting company tax cut and increasing tax breaks for small businesses, all funded by the mineral resource rent tax, so the most profitable miners increase economic reward and opportunity in other parts of the economy.
By revolutionising our approach to human capital – the most important asset for dealing with structural economic shifts – with deep integrated reform policies to improve the quality of education in schools today.
By record skills investments and growth and reform of universities.
By developing a new, detailed regional agenda so that we understand each part of the nation and engage its local leadership.
By reviewing the GST carve up in order to marry up the “fair go” principle which informs federal financial relations with the realities of today’s economy and today’s reform needs.
By reforming our skilled migration 457 visas to end the rorts and get skilled labour to employers who need it.
Friends, these are economic reforms and responses to deal with the “patchwork economy”.
But “patchwork pressures” are not only felt by industry or something to be distilled in a set of statistics.
These patchwork pressures have a human face as well.”
What was most salient in Gillard’s speech was that her government’s natural response to economic “pressures”, seeks “to bolster productivity and balance growth.” And by balancing growth, I take it that they mean providing other areas of the economy with the opportunity to grow, so that there is growth, somewhat, across the board. The balance would also be achieved by slightly constraining those areas where increased growth has started to have unhealthy effects on the economy.
What is a seemingly benign remark on the surface is actually a core dilemma. Have we consciously considered what economic growth means to Australia? Have we asked, how much growth is sustainable? What are the positive and negative consequences? In which sectors and regions should growth be encouraged?
We may have addressed these concerns in passing and at a very superficial level, but I haven’t seen a public throw down over the concept of growth. What was once a description rightly used decades ago, “growth is good for the economy” has now become an economic and political prescription, “we must have growth, it is always best.”
I’d bet that the average Australian does not think to question what they are told when it comes to growth and economics, and who could blame them? It’s dry, incomprehensible at times and the ideology behind the economy as a whole is not an everyday concern. There are other things to worry about. Issues that affect us much more directly in our day-to-day activities (except if you’re in the financial sector, of course) than whether the economy grows, where that growth occurs and what the practical, ideological and political effects of that growth is.
Of course we all want our economy to travel well. Every government and nation does. It usually means that we materially prosper. But what if there were other ways of measuring the success of our economy and the prosperity of our society? I know, you may have just panicked. What? We’re questioning growth? Just pause for a moment and consider what Professor Tim Jackson has to say (take note, he advises governments, including the British, about economic growth and sustainability).
In his book, ‘Prosperity Without Growth’, Jackson writes a comprehensive analysis of the global economy in general and suggests a different kind of ‘economics for a finite planet’. Now I don’t want to give anything away because Jackson is so eloquent and fascinating to listen to that it would be much better for you to encounter his ideas first-hand.
Watch this 20-minute video of a lecture he delivered at TED talks, it is mind-boggling. I had to watch it twice. But keep in mind it is only a brief run down of his main arguments.
And if you’re curious and want to understand his proposition fully, check out the 2010 Deakin Lecture he delivered in Australia on podcast at Radio National. It’s well-worth the time.
Please, if you have any responses to the video or podcast, I’d love to know what you think.
Thanks for reading.