Michael McGuire: People lost their jobs but the pandemic was boom time for billionaires

It’s time Australia’s leaders woke up to coronavirus’ new world and to admit the old ways don’t work, writes Michael McGuire.

Prime Minister Scott Morrison visits HVTC Training Company at Rutherford in NSW’s Hunter Valley. Picture: NCA NewsWire/Peter Lorimer.

The coronavirus pandemic has turned so much of society upside down, it would be a shame not to try to extract some benefit from all this chaos.

It would be a particular shame if we did not take this chance to build a fairer society. A society where more people have more opportunity and fewer people are held back by grinding, exhausting poverty.

It’s doable. The effort, discipline and imagination that Australians have diverted towards battling the pandemic should be ample demonstration of what is possible when sufficiently motivated. If the past 12 months have taught us anything, it’s that the old rules don’t apply any more.

In The Advertiser this week, figures as diverse as businessman Darren Thomas and AFL executive Tanya Hosch have noted how the pandemic has changed Australia.

Thomas believes the hardship of the past year will prompt some to re-evaluate what’s important in life. Hosch believes the response to the Black Lives Matter movement shows Australia is ready for a serious discussion about racism.

Darren Thomas of Thomas Foods at his property in the Hay Valley near Nairne. Picture: Brad Fleet

Talk of a fairer Australia are not suggestions from the fringes or the extremists.

They come from people such as Reserve Bank governor Philip Lowe. Not a noted revolutionary, Lowe last week said the dole should be lifted permanently.

“For me, it’s not a macro-economic management issue, it is a fairness issue and what is the appropriate level of support we should provide to people who are unemployed,” Dr Lowe said at the National Press Club.

This is not a new idea, of course. Many welfare groups, unions, even the Labor Party, have floated this idea before.

During the pandemic, the Federal Government lifted the rate of the JobSeeker payment by $250 a fortnight, which was subsequently lowered to $150.

That JobSeeker payment is due to end on March 31 and will return to its pre-pandemic levels.

At that point, the base rate will return to $565.70 a fortnight, or about $40 a day.

This at a time when the unemployment rate is predicted not to return to pre-pandemic levels until 2023.

Even the Business Council of Australia believes the rate should rise “because it’s the right thing to do’’.

People queue up outside a Centrelink office. Picture: William West/AFP

The BCA also makes the reasonable point the payment is so low, it creates another barrier to employment because it makes it difficult for people present themselves well or maintain a readiness for work.

Perhaps one way to pay for an increase to JobSeeker, and maybe even provide more funds for health and education, would be to lift taxes on the rich.

While many around the world have lost jobs and businesses, the pandemic has been a boom time for the world’s billionaires. According to one US study, that country managed to produce another 56 billionaires between March and December last year – at a time when many Americans were waiting in line for food parcels.

A report published in December by the London School of Economics concluded that tax cuts provided in 18 countries, including Australia, to the very wealthy over the past 50 years had really only benefited one group of people. Those who were already wealthy. Yes, the rich got richer and everyone else can please themselves. “The results suggest that tax reforms do not lead to higher economic growth,’’ the report says. “Major tax cuts for the rich do not lead to higher growth in either the short or medium run.’’

The report also found the same when it came to lowering unemployment.

In short, the whole concept of “trickle-down economics’’ is crap. It’s not so much trickle down as hoarding up economics.

The next stage of the Morrison government’s tax cuts are heavily slanted towards those who are already well off.

If the Prime Minister genuinely wants to create a fairer Australia, an Australia where “if you have a go, you get a go’’ then he needs to become a little more creative.

The impulse to reach for the tax-cut lever for the wealthy first time, every time, must be resisted. The evidence suggests it’s not doing much good.