Dog Days: Australia After the Boom (Redback) by Garnaut Ross

Author:Garnaut, Ross [Garnaut, Ross]
Language: eng
Format: epub
Publisher: Black Inc.
Published: 2013-11-15T00:00:00+00:00

CHAPTER 7: POPULATION, PARTICIPATION AND EQUITY

A reform programme must be widely seen to be fair if it is to have any chance of enduring success in our democratic polity. The economic underperformance that would be the future companion of a ‘business as usual’ approach tends naturally to generate unfair outcomes. It concentrates the burden of reduced living standards on the unemployed, on those who are discouraged from work, on those whose skills lose value because they are unable to use them, and on owners of small businesses which are forced to close.

Full employment with high participation, adequate income support for disadvantaged Australians, universal access to good basic health and education, and an effective progressive tax system are the most important contributors to equity in Australia. The recent election campaign confirmed that there is common ground across the polity on the need for a more effective provision for the advancement of Indigenous Australians and a more substantial provision for that of Australians with disabilities.

The big challenge in the period ahead is a conservative one: to maintain these elements of an equitable society through tough times. A number of things will make this difficult: pressure on the budget and incomes through the adjustment to the end of the resources boom; the increased cost of an ageing population; the corrosion of the tax base through piecemeal reduction and abolition of taxes, especially over recent times of high prosperity; and the political barriers facing reform to raise efficiency in the delivery of government services at the mature end of the Great Complacency.

The challenge is to raise adequate revenue to fund the state and its education, health and social security programmes without unnecessarily reducing investment and economic growth. More generally, an economically successful society – with rising productivity, average incomes and taxable capacity – is more likely to be able to provide adequately for public services and transfer payments. The productivity agenda discussed in the previous chapter is therefore important to equity.

This chapter discusses a few other issues important to equity – issues related to population, participation and employment. I begin with a discussion of immigration and population, because it is sometimes thought that pulling back on them in hard times will help Australians who are already here. These issues are bound to arise again when jobs become more difficult to find as the resources boom recedes.

IMMIGRATION HELPS POORER AUSTRALIANS

Since World War II, high immigration has kept the Australian population growing much more rapidly than in other developed countries. As a result, our population has also aged much more slowly than that of comparable nations. This has been a source of continuing economic dynamism.

Will this continue in the Dog Days? If the economy slows and jobs are fewer, population growth will automatically ease back. Migrants from New Zealand, and family reunion and business migrants, will come in fewer numbers. Other immigration categories are capped, and the caps tend to be wound back at times of economic downturn and high unemployment. The combination of these two

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