By Dick Nichols
Jobs are the centre of this election. The Liberals say their GST will create them; Labor says the GST will destroy them; and in reality (as shown in One Nation and the appendices to Fightback) neither party sees any chance of getting official unemployment below 8% until 1996.
However, among the "third parties", there's general agreement that unemployment has to be fought through government spending on a much greater scale than that implemented by the Keating government.
So what are the Greens, Democrats, Rainbow Alliance and Democratic Socialists saying about how to fight unemployment? Here we look at two questions: how much devoted to job creation and how should it be funded?
First we need to grasp the full size of the unemployment problem — so badly understated by the official statistics that studies by Australian National University economists place it between 30 and 40% above the official rate. Indeed, the figure (September 1992) for those who would work if they could stood at 2 million (984,400 "actively looking for work" plus 1,042,400 "not actively looking for work".)
These figures tell us that only a vast and sustained increase in investment can cut back unemployment in the Australian economy — investment that won't be forthcoming from private capital. Add the fact that the amount of equipment per worker in the economy always tends to rise, and it becomes clear that scores of billions in investment will be required to create the jobs needed.
Billions needed
The Australian Democrats' proposal, Getting to Work, calculates that their proposed 1.25% income tax surcharge would raise $2.5 billion annually and would create 150,000 jobs, at an average cost of $16,666 a job. The Rainbow Alliance's proposed job creation levy would raise $6.7 billion a year, rising to $9 billion by the year 2000, funding the creation of 200,000 to 250,000 jobs in the first year (an average of between $26,000 and $32,500 a job).
From these figures alone it's clear that the amount of employment growth that can be won from increasing government spending will depend on how much capital is employed per worker in new jobs.
But, even taking the Australian Democrats' very optimistic figures of $16,666 a job, the increase in investment needed to fund full employment would amount, over time, to $32 billion.
In round figures, therefore, eliminating present levels of unemployment would require an increase in investment of anything between $30 and $50 billion, roughly between a third and a half of the federal budget.
Looked at from this perspective, the Democrats' proposals on job creation seem rather mild. Indeed, if One Nation could be called micro-Keynesian (adding only $3.7 billion to government expenditure over five budgets), then the Democrats $2.5 billion a year is mini-Keynesian. True, it would create more jobs than One Nation (150,000 a year), but this would reduce the official unemployment rate by only 1.7 percentage points a year. At that rate it would take 13 years to provide jobs for the 2 million who want to work.
The Democrats' youth jobs and incomes package would create another 5000 jobs directly, but this doesn't change the picture very much, especially since more than 300,000 of the official unemployed are young people.
Rainbow Alliance does better with its Emergency Employment Program. Here the target is not only more ambitious (200-250,000 jobs annually), but the level of expenditure per job ($30,000) is more realistic than the Democrat proposal.
The Australian Greens' summary of principles and policies for this election states their "intention to pursue employment for all" and affirms the right for everyone to participate in paid employment. The Australian Greens also propose "permanent and temporary public sector job creation in service industries, infrastructural development and ecological restoration programs". There is, however, no information as to specific projects or job creation targets in their document.
The Democratic Socialists also affirm the goal of full employment. Their job creation proposals include quadrupling One Nation expenditure on rail upgrading ($2 billion), the establishment of a federal public housing authority to tackle the 200,000 waiting list for public housing and an emergency program of environmental repair and restoration. The Democratic Socialist proposals would devote at least $10 billion a year to socially useful work.
Funding
Where's the money coming from? The Democrats propose a 1.25% income tax surcharge, like the Medicare levy. It's hard not to
agree with Rainbow Alliance when it describes this funding proposal in the following terms: "This is a regressive impost and whilst administratively efficient it is unfair especially given the 'concentration effect' of current unemployment on low-income families".
(The Democrats also propose an increase in the company tax rate from 39 to 42%, as in Fightback.)
Rainbow Alliance plans to fund job creation with a progressive levy on income. From $21,000 to $39,000 the levy would be 0.5% (raising $3.5 billion); from $40,000 to $59,999 it would be 0.75% and from $60,000 to $79,999 1.5% (raising $2.4 billion); above $80,000 a 10% levy would draw in $860 million.
The Democratic Socialists state that "the funds ... can be drawn from three sources without further reducing the living standards of workers still in work — company profits, the luxury expenditure of the wealthy and superannuation savings".
The Victorian Green Alliance (one of the Green formations independent of the Australian Greens) advocate some specific measures and ways of paying for them. Loretta Asquini, a Green Alliance Senate candidate, says, "Homelessness and the environmental waste of empty high-rise buildings could be tackled through the redevelopment of underused commercial buildings as public housing.
"Job creation through a massive public works program in health, education and transport as well as housing could be funded by a cut in military spending."
The Australian Greens support a "National Employment Fund to further job creation in areas of greatest social, environmental and regional need. This will be funded through a progressive employment levy of limited life span."
On February 22 Democrat leader Senator John Coulter described this proposal as "a ringing endorsement of Democrat policy" which, along with other Australian Green proposals, "clearly indicated there was no real need for two green parties in the Federal arena".