Social Policy Whisperer: 'Having a Go' in the 21st Century

Last Monday I was lucky enough to get along to the John Freebairn Lecture in Public Policy at the University of Melbourne delivered this year by John Quiggin. On ‘Economic Policy for the 21st Century’ it was a great primer on current thinking about economic growth and provided an excellent preparation for making sense of the budget speeches later in the week.

Quiggin highlighted the great transition which has occurred in the 21st century through the emergence of the knowledge economy. The policy ‘burning deck’ today does not concern the shrinking portions of the economy – agriculture, manufacturing and mining – which were the preoccupation of the late 20th century, but rather the need to master the risks and reap the rewards of the now dominant knowledge based sectors.

As I and other contributors to the book edited by Hasmath (2015), Inclusive Growth, Development and Welfare Policy: A Critical Assessment, show, the new social welfare thinking about ‘social investment for inclusive growth’ has exactly this emphasis on human capital as a key policy lever if we are to have the more and better jobs to underpin the Good Society.

Listening to the Federal Budget I didn’t get any inkling of Government recognition of this challenge of the knowledge economy as our new policy imperative. The centre piece economic policy was a hand out of ‘precious tax payer dollars’ to small business and, dare I say, this will ‘turbocharge’ us back to growth.

I imagine this might have satisfied neoliberal diehards. It is reminiscent of John Howard’s splurging of public monies in tax cuts on the principle that individuals know how to invest ‘their money’ so much better than governments ever can. While there may well be a case for this encouragement of small business activity it simply cant be a substitute for the sorts of strategic government investments which will be needed if Australia is to reboot its economy with the ‘human capital’ and internet infrastructure needed in the 21st century. On the social policy side, the maintenance of eighty billion dollars of cuts to education and health indicates no understanding at all of the kinds of investments needed if all Australians are indeed to be able to ‘have a go’ in the new economy.

The Labor reply was a very different proposition. While recognising the importance of encouraging small business this was embedded in a future strategy for the national economy. Having already established strong credentials in the inclusive growth arena in its last terms of office (think COAG, ‘education revolution, Gonski etc) the reply modelled the kinds of deliberate interventions -eg boosting science and maths, investments in teachers, addressing educational equity etc – which will be needed from government if we are going to get markets moving in a coherent way on a twenty first century model.

But the ALP reply was not forthcoming on the funding. In its last terms of office, similar promising agendas were blunted by a commitment to keeping Australia a low tax country (a case of ‘social investment lite’). With Tony and Joe already megaphoning that their growth approach is based on more and more cuts to government services with an ever declining tax base, Labor must show why we need a robust and progressive tax system to underpin a future of inclusive growth in a twenty first century economy.