Crunchtime: Australia’s policy future

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Who would have thought that three weeks ago when the International Monetary Fund was announcing its latest downward revisions of its forecasts for the impact of the global financial crisis that a two day gathering of 120 thoughtful, intelligent and well informed people could be characterised by optimism? The Centre for Policy Development with Catalyst Australia, The Australia Institute, Per Capita, the SEARCH Foundation and the Evatt Foundation co-hosted this group at Crunchtime - Australia’s first progressive policy conference. Smart minds were brought together on April 22 – 23, 2009 to find solutions for the economic, environmental and resource crises facing the world today.

A diverse array of speakers and participants took up the challenge of
identifying the priorities for Australia in the next year, six years and the next century. Interestingly, there was considerable consensus around the proposition that, while you cannot downplay the direness of the crises we are facing, you can feel optimistic about the future. The mood was surprisingly upbeat; there seemed to be broad acceptance that the crisis – the economic, environmental and resource “crunch” – does not have to end badly. How so? The lesson from Crunchtime was that simple and stark policy choices can transform our society and our economy to reach a sustainable accommodation with the planet on which we live.

Speakers put some pretty compelling evidence on the table to support their optimism. For example, what would Australian society look like in ten, 20 or 30 years time if we:

1. Fundamentally overhauled the tax system to remove perverse incentives, remove wealth transfers to the rich, and support savings for all life stages and purposes, not just superannuation? Read more

2. Adopted a Green New Deal, where up to 70% of all stimulus spending was devoted to the creation of green jobs and clean energy? Read more

3. Embraced business practices that redressed the distribution of global wealth? Read more

4. Based policies on evidence, not evidence on policies? Read more

The answer is it would look clean, green and healthy.

What would Australia look like if we don’t adopt these policies?  Speaker Dr Kuiper put it most succinctly – we’ll be at least 7 metres further under the sea, and the “war on terrorism” refugees arriving on our shores this week will be nothing to the climate refugees we will need to host from the Pacific Islands, Indonesia and the lowlands of Bangladesh and Vietnam.

Unfortunately, these solutions are premised on an assumption that the Business Council of Australia and the Opposition would vehemently reject, and which Mr Rudd and Mr Swan may fail to embrace sufficiently strongly: that the global financial crisis has proven the failure of the neoliberalist approach to the market. There seems to be a belief in the halls of Parliament that just a little tweaking of the current economic system, just a soupcon of regulation to reign in executive salaries and restrain banks from gambling in highly speculative market products, will let us return to the comfort zone of business as usual. Will it? Or is it Crunchtime?

Crunchtime on tax | Crunchtime on the Green New Deal | Crunchtime on social entrepreneurship | Crunchtime on evidence based policy

Crunchtime on tax

Reforming the tax system can deliver the transformation needed to restore equity of access and quality of service delivery to public services; it can ensure the repayment of current and impending stimulus outlays does not cripple future generations and can underpin the creation of a Green New Deal and sustainable economy. However, as the Australia Institute’s Richard Dennis noted in his closing remarks, all of the current tax solutions and priorities – whether for health, education, public transport and the environment, for paid parental leave or indigenous communities – you name it – need money.

Submissions to the Henry Tax Review ended on Friday 1 May 2009. The direction the government takes in response to this Review will be critical.

Professor Julian Disney (who you can read in the upcoming InSight) explained that existing tax structures are biased towards debt and property speculation instead of equity and social enterprise.  Julian’s great list of priorities for reform – for workers and families, housing and transport and savings – all present opportunities to support the values of fairness and community. Julian Disney’s conference paper will be available along with others shortly on the Crunchtime website.

Further reading: National Tax Reform Symposium Paper 1

Crunchtime on the Green New Deal and developing a
sustainable economy

It’s hard to believe but Al Gore’s “An Inconvenient Truth” was released three years ago. Now there is much more scientific evidence about climate change and the issues Gore discussed – much of which Dr Gabrielle Kuiper used to update the conference on the latest science around climate change. The outlook was bleak – the most conservative of estimates (based on the older data) acknowledge there will be a one metre rise in sea levels by 2100.  However, new data is available on the extent of damage to the “melting canary” that is the Artic ice mass. If it follows this current trajectory, the ice mass will disappear in the summer of 2012, causing temperatures in the area to rise by more than 3 degrees. This is likely to be the tipping point for the melting of the Greenland ice shelf, a catastrophe which would result in a seven metre rise.

Dr Kuiper and climatology scientists tell us we have less than six years to act and our targets need to be stronger and reached sooner. A safe level is 325 ppm or less.  Australia is both uniquely vulnerable and (as a big polluter) in a unique position to make major changes to our emissions. It’s time to cancel all leave and chain yourself to the nearest coal loader!  It’s time to emulate South Korea and Japan and invest in the Green New Deal.
Further reading: The document that started it all, the Green New Deal by the New Economics Foundation. See author Ann Pettifor speaking at Crunchtime – unmissable!

Crunchtime on social entrepreneurship

Cheryl Kernot (read more from her in the upcoming edition of CPD’s InSight) talked about the quiet revolution of social enterprise –  a global phenomenon where the relationship between economy and society is recrafted to address inequities in who gets a share of the world’s wealth. Cheryl explained the social entrepreneurs are change agents who take market oriented action, augmented with the concepts of reciprocity and the common good, to achieve social benefits.

Two great examples of social entrepreneurship you will already be familiar with are micro loans and fair trade.  Micro loans started with $27 (there are no noughts missing there!) in Bangladesh, and now 8 million poor Bangladeshi women are borrowers. The model’s replicability and sustainability has meant it has been used to reach half of the world’s poorest families.

Fair trade products (such as all Cadbury Dairy Milk chocolate in the United Kingdom) pay a fair price to producers of coffee and cocoa, delivering wage justice, educational outcomes and environmental protection in developing countries more directly and effectively than grants of aid or world trade talks. Find out more about more about supporting social businesses in the Centre for Policy Development’s next edition of InSight magazine – out mid May 2009.

Crunch time on evidence based policy

Richard Dennis reminded us how often evidence is the last (or the least) factor to determine policy direction – politics, ideology and “the market” prevail to produce policies that fly boldly in the face of the evidence. Richard underlined that this is not satisfactory – and that think tanks play an important role in gathering the relevant evidence.

Larissa Behrendt outlined how potentially disastrous it can be to place
ideology ahead of evidence based policy by sharing with us some data on outcomes from the Northern Territory intervention.  She contrasted the evidence given by the Government to support their contention that the quarantining of welfare payments is working –  because more fresh food is being consumed in the affected regions –  with the data collated before and during the intervention by the Sunrise Health service.

The Government’s evidence was obtained by a ministerial staffer making 10 phone calls to community stores operators, 6 out of 10 of whom agreed that yes, more fresh food is being sold. (They didn’t ask whether it was the influx of police and health workers who were buying it).

Sunrise Health Services has been working in a key intervention region, where quarantining was applied to all of the communities. They collected data relating to 96% of children in the region on key health indicators when they arrived in the region, well before the intervention, and during the intervention.  Before the intervention, the service had succeeding in getting anaemia rates down to 20%.  By December 2007 they had risen to 36%, and by June and December 08, they were up to 55%. A rate of greater than 40% is a severe public health problem.  The incidence of low birth weights rose from 9% pre intervention to 19% by December 2008.

Read Larissa’s keynote address, Where social policy has gone bad and how we can avoid repeating the mistakes of the past, which examines the ideological constraints behind past indigenous policy failure and looks to evidence based policy for a way forward.

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