Tax review time. Word processors are going late into the night. Great new ideas, average old ones and raft of pet projects are being dusted off, dubiously modeled, and cobbled together. Yet tax systems – even the best of them – are often blunt instruments when it comes to achieving larger goals.
How do we best manage the need for collective investment in the social, environmental or cultural life of our communities? There are always easy arguments for tax cuts, someone pointing out that government doesn’t always get it right and the complexity of diverse communities with a range of ideas, priorities and strategies. What if the answer isn’t always through the tax system or even directly through government?
Political winds change. Funding and defunding of social, environmental and cultural projects becomes a political football. Governments pitch to the centre at the expense of diversity. Political influence can triumph over good policy. Legitimate differences of strategy can become outright philosophical hostility towards investing in the collective good.
What if we were all both able and obligated to take a more direct role in investing the public goods we value?
Superannuation provides an interesting model. It demonstrates how government can take a role beyond simply taxing and spending by creating a framework for collective investment on a large scale. In the name of fostering retirement saving it has created a large pool of capital that can and must be invested. What if a similar model was applied to social investment? What if, like the origins of super, a future round or rounds of tax cuts was offered back not as a blank cheque but as an allowance for each of us to invest in our communities and social capital?
Superannuation is a scheme with a different purpose but it demonstrates that workable models of pooled investments could work in the social sphere. It shows that a range of models from not for profit and ethical investment entities to government agencies could coexist and compete within a diverse and varied social investment scheme.
A few percent of our incomes – perhaps a single future forgone tax cut – as a social investment levy would free up billions to invest in a wide portfolio of our social concerns. Equity and simplicity could allow an equal credit per person or a simple proportion of your own income. The money would be yours to invest in good deeds locally, nationally or internationally. It could fund charitable projects, emergency relief, health care initiatives, cultural projects or simple local projects to that fall below the bureaucratic radar. It could be invested in conservative religious charities or to seed funding social entrepreneurs.
Any such scheme comes with risks – not the least of which is undermining the role of the public sector. It would need checks and balances to ensure funds were directed to legitimate not-for-profit, charitable and public organizations and that people did not benefit from their own social investments more than the rest of the community.
For all the risks, such a scheme would have a lot to recommend it. It limits the debilitating debates about government social investment in political or controversial areas. It allows for a range of risks, approaches, priorities and strategies to be applied and tested simultaneously in a way that government projects cannot and philanthropically funded projects are reliant on benefactors for. It creates a viable, independently funded social, cultural and environmental sector that is neither the politicized subject of government, beholden to wealthy philanthropists, nor left to the whims of the commercial markets.
Most importantly, it engages people directly in the development of social capital and in the sense of collective ownership of social problems and their solutions.
The Lateralist is designed to brainstorm different approaches and suggest out of the box ideas in the spirit of advancing discussion. Even the author isn’t always convinced the ideas are good.