• Pete Jonson

How to make Australia a high growth nation?

It’s a tough question, says Craig Milne Maybe “developed” economies can never be high growth, if “developed” is taken to mean the kind of post-industrial, services-centred economy we have (along with many other western economies) with a large public sector, a high level of hidden unemployment and a generous publicly-funded welfare system.

Craig Milne, Australian Productivity Council

In the pre-welfare state, nineteenth century Australia for example, if people didn’t work they went without. The family was the main source of welfare support and this encouraged family formation, a settled existence and as large a number of children as possible (to support the parents in their old age). Society was closely knit, small-group based and organised under Christian principles (generally observed even by non-believers). There were always idlers, loafers and tramps, but they were judged severely by nearly everyone as parasites and bludgers. If a workman fell on hard times the church or the family would help, but not for long; people were expected to overcome their predicaments, get off charity and in due course make their own contributions if needed. With the rise of the welfare state (the old age pension established in 1909, was the beginning of the present Australian malaise), the hard discipline imposed by a small-government state started to weaken. This took a while. The work ethic was ingrained in the Australian consciousness and “bludgers” were always treated with contempt, but gradually this leftover cultural artifact faded away. It’s a bit like offering free filet steak to peasants; at first they don’t have the taste for it, being used to flavoursome recipes developed to make cheap muck palatable, but eventually they develop a liking for the better cuts. The same with free university education provided to the working class. Australians won’t pick fruit (which is a bloody awful, poorly paid job) because they don’t have to; they can pick up welfare instead. The fix is work-for-the dole, or better renamed as “community service work” where income from the state is never handed out for nothing; the state becomes instead the “employer of last resort”, able to send work gangs of able-bodied young people seeking income assistance up to Shepparton as fruit-pickers rather than let them sit around getting free money. With this in store, workers will get off their arses to find something better (community service work being always the crap jobs) and fruit growers will either have to automate their picking or pay the real cost of labour needed to get people to do shit jobs. Superannuation needs to progressively replace the pension as well; up the rate to 15% of income and catch everybody, including casuals, contractors and the self-employed, in the net, without fail. Get rid of tax on contributions and earnings as well. Current caps are OK; the wealthy will reach them by middle age, the poor never, but they’ll do well enough. This reform will enable ordinary workers to work for fifty years and accrue a million in present value dollars on retirement (67-70 years rather than 65). A couple would have two million, enough to live well on the dividends alone without wealth-destroying annuities. The capital could go to their children.

Australians would thus become a country of millionaires in fifty years and, if managed properly, start acting more like the Swiss and less like the Irish. It’s important for citizens of a rich country to have a strong sense of their economic duty to be productive and energetic in consideration of their right to enjoy the benefits of prosperity. This means a sustained root and branch grubbing out of every bit of the green/leftist garbage that currently afflicts us. Libs aren’t up to the job; too interested in keeping their own snouts in the trough. Get out of sending everyone to university as well; it’s a waste of earning time and it infantilises young adults. Universities have negative utility at the moment, thanks to leftist infiltration, subversion and capture. Tertiary qualifications should be useful, not subversive, and acquired part time, on-line, while usefully employed. People should be in the work force by eighteen years of age. In considering Australia’s poor growth prospects you should look at the Harvard index of complexity stuff. It rates Australia’s growth prospects as low because we have a low level of economic complexity. It places us down with the African no-hopers. It’s a useful approach although it does have, in my opinion, a fatal flaw; it defines economic complexity in terms of capability, but measures it in trade performance. These do not necessarily correlate and this leads to silly conclusions which suggest that Australia’s prospects are not as grim as they suggest. To illustrate, the Harvard index places Russia between Cyprus and Tunisia.

Seriously! Russia is a scientific and technological superpower, the most autarchic nation on earth, with the capability to produce anything and everything that it needs at the highest level; it just doesn’t trade these things because it has oil and gas instead. It is highly complex in capabilities, but not in its trade profile, because commodities are easy to sell and they get a big balance of payments surplus without much effort. We should learn from this and do the same. Notwithstanding this criticism, we need more complexity if we want to grow and that means a serious attempt at re-industrialisation.


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