The Australian prime minister wants to ‘provoke the “animal spirits” in the economy by removing regulatory and bureaucratic barriers to investment.’ He says he wants to get Australians off the economic sidelines and on the field again. But beyond the first stage of the proposed tax cuts, it’s business as usual: deregulation and trickle-down-economics.
Let’s leave aside for the moment the compelling evidence that trickle-down-economics is an abject failure. Let’s speak instead about deregulation.
The Banking Royal Commission found that the combination of weak regulation and poor enforcement were significant contributors to the sector’s staggering misconduct. Yet it would be unsurprising if, after voting against holding the royal commission twenty-six times, the government now simply disregards its recommendations for better regulation.
Meanwhile, residential buildings in Sydney and Melbourne are beginning to reveal the costs of privatising the regulation of the building industry, when inspections and compliance were taken away from government officers and handed over to private contractors. To remove the red tape. Of course, in pure GDP terms, it worked. Big buildings went up, builders and designers and real estate agents and lawyers were employed… and now, twenty or thirty years later, even more of them will be employed to rectify or replace uninhabitable buildings. This isn’t even planned obsolescence – it’s simply shoddy shonky capitalism. We’ll pay and pay again. Someone will make money, and GDP will grow.
Mr Morrison compares the eighteen months it took to get a nickel mine up and running in 1966 to the ten years it took for a recent iron ore mine to get government approval on 4000 regulations. He doesn’t mention that in 1966 we were just becoming aware of the impact of industrial pollution on our living environment. Since then we’ve created regulations to clean up polluted rivers and creeks, to combat acid rain and industrial air pollution, as well as to protect native plants and species.
We’re on the brink of a mass extinction – 1800 species at risk in Australia alone – while we continue to deforest at a world-leading pace. And Mr Morrison wants to reduce the red tape for investment.
Deregulated, free-wheeling financial dealing led to the GFC. Since the beginning of trickle-down economics – i.e., with Thatcher and Reagan – economic inequality has grown and continues to grow at astronomical rates, with a handful of people “owning” more wealth than 50 or 60% of the planet. Critics have pointed out from the beginning that the results of trickle-down economic policies would be trickle-up wealth creation.
In contrast, the Rudd government’s response to the GFC – widely recognised as having saved Australia from a global recession triggered by a global crisis – is evidence of effective trickle-up economics.
To get businesses off the sidelines, you need to get consumers off the sidelines, which means putting money in the pockets of the people who have less. Henry Ford espoused this principle, recognising that if he didn’t pay his factory workers enough to buy a car, he wouldn’t have a market for his products. It’s also one of the underlying principles in favour of any sort of universal basic income.
Wages are stagnant. Newstart has long stalled. Homelessness continues to rise and home affordability continues to slip further away. The retail sector is sluggish and house prices are falling. The reef is dying, millions of life forms are dying on the brink of a climate crisis…
And Mr Morrison wants to address this by setting the dogs loose.
Evidence is apparently irrelevant when you have absolute faith in your ideology.