The Road to Wellbeing, part 3: policies worth putting on the map
Image by Annie Spratt (Unsplash)
Introduction: how do we make our economic system value what we value?
I began this series of articles talking about a conference room, a gathering of civil society CEOs, and a very big question that I couldn’t answer: how do we transform our economic system to value what we value? What could an economy for the people look like in practice? Where are the paradigm shifts, bright spots, and where is the momentum building for wider reform?
I wanted to challenge us as leaders, change-makers and citizens not to leave the economic stuff in the too-hard basket, but to see how it underpins everything else we care about.
I also wanted to offer our network of reMAKERS thoughts on a starting point for a shared, transformative economic agenda: both the high-level shifts required (part 2), and the pointier end of the policies we might champion (here, part 3).
Two things are clear to me now:
Firstly: government’s role in a wellbeing economy is much bigger than policy, or even how we tax and spend. Its job is to set the strategic direction and goals of our economy overall.
That includes good regulation, planning, procurement, taxes, advice, subsidies and other incentives that steer our economy in the right direction.
Secondly: when it comes to policy-making, the ‘what’ of our policies must go hand-in-hand with the ‘why’ of our purpose and the ‘how’ of our process.
Image by Taras Zaluzhnyi (Unsplash)
There are no silver bullets. Governments won’t be bold and take risks without strong community buy-in and backing. Anything that is the least bit radical or transformative is going to be met with strong resistance from vested interests, and there will be real trade-offs to navigate. Even the most well-intentioned policies could serve as mere bandaids at best, or trojan horses at worst, for more of what we don’t want — unless we’re clear on what we’re aiming for and why, bring people with us and shift power.
Amanda Janoo, Economics and Policy lead for the global Wellbeing Economy Alliance (WEAll), told me, “having worked in policy for a long time, I personally think the ‘how’ matters a lot more than the ‘what’ when it comes to policies.”
Her team led the creation of the Wellbeing Policy Design Guide, a fantastic resource that lays out a process for governments, along with tips and case studies from around the world.
The steps start with co-creating a shared vision of success like they’ve done in Wales, and then designing a high-level wellbeing economic strategy.
That strategy could look like moving to a more circular economy as they are in France, or taking community wealth building seriously as they’re doing in Scotland. It could be based on regenerative economics, as they’re doing in Melbourne; as well as embracing Doughnut Economics as they’re doing in Amsterdam. Again, a wellbeing economy is about good government regulation and direction-setting.
Then comes designing and assessing specific policies, and finally implementing and assessing your efforts. As the guide notes,
“Transformation of systems rarely occurs from the introduction of a single policy, but rather through a series of policy reforms that redefine rights and responsibilities and encourage certain activities and behaviours relative to others.”
Encouragingly, Australia’s government has applied to join the Wellbeing Economy Government alliance, WeGo, to learn from others about how to go about this, and currently has observer status.
But in the meantime we can’t just wait for government to act. There’s genuine urgency here to move the Overton window.
Climate change, natural disasters, AI, automation, global conflicts and wars, the cost of living crisis and the long tail of the pandemic — our goal must be to navigate change and disruption as proactively as possible, for our collective wellbeing and benefit. Without systems change, we will be left ricocheting from one crisis to the next, scrambling to pick up the pieces and spending billions wiping up preventable messes instead of building more of the world we want.
In every emergency there is emergence; in every crisis, opportunity. As Milton Friedman famously said:
“Only a crisis — actual or perceived — produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.”
Photo: Tabea Schimpf (unsplash)
So what do we want next, at this juncture of disruption, crisis and opportunity?
There are many worthy contenders to explore: in particular, food, housing, healthcare (including mental healthcare) and education are basic human rights, and our government can be doing more in Australia to make these universally available and of high quality for everyone.
We know that our social determinants of health matter a great deal, and a wellbeing economy needs to promote things like social inclusion, good employment conditions, a sense of belonging and economic security.
A wellbeing economy also needs to tackle shareholder primacy and implement true cost accounting reforms to bring in ‘market externalities’ and better value what we value in our financial reporting and decision-making.
And of course, a wellbeing economy needs to prioritise operating within nature’s limits, restoring and regenerating our ecosystems. In all of that, it needs to serve humanity justly — particularly those who have been exploited, excluded and overlooked in our current model of what ‘success’ looks like.
As WEAll’s co-founder Katherine Trebeck says, a wellbeing economy is a thousand piece puzzle, and everyone is working on their part.
While no policy is a silver bullet and no shortlist could ever be perfect or complete, from Australia reMADE’s work, research and conversations, there are some key policies worth putting on our Road to Wellbeing map — particularly when it comes to how we design our labour market — that would be life-changing for Australians.
We’ve chosen policy ideas that are individually as well as collectively beneficial, apply to everyone, tap into systemic drivers of transformation, align with our vision and values and have a basis of existing research, support and momentum behind them.
Each one might be considered ridiculously ambitious from where we are, while not nearly radical enough for where we’d like to end up…such is the nature of change. But the ideas we’re talking about here don’t just add up to something better, they multiply.
To note: while learning from many, this work is our own and not aligned with any other organisation or group. We are grateful to the many trailblazers — the rebel economists, systems thinkers, ecologists and humanitarians promoting a fair and flourishing world from their own vantage points. We know this kind of reimagining work is never truly complete, so we embrace the process, and find way stations on the journey to aim for and celebrate. Our radical ideas become our children’s new normal, one utopian vision at a time.
Three policies that would be life-changing for Australians:
We start with the question: does the economy provide everyone with the necessary foundations to live a life of dignity and purpose? Does it provide us all with what matters most: the right to build good lives, on a healthy planet? In a wealthy country like Australia, do most of us feel we’re working to contribute something useful or meaningful to society (or merely to survive and earn income, afraid of what will happen if we fall behind)? If not, how might we fundamentally transform our labour market so our economic system better values what we value?
Three ideas:
See how they sit together, help the environment, and how we pay for them.
Let’s look at each one in turn.
Photo: Christine Roy (unsplash)
ONE: A Universal Basic Income (UBI) – a basic living allowance for all, no strings attached
What is it?
Think the pension, but for everyone.
The goal is to give everyone a floor of security. As the UN Development Program puts it: “A UBI should be sufficient, to sustain a person at a modest minimum, leaving sufficient incentives to work, save, and invest.”
Where have we tried it?
It has now been trialled all over the world (not just in rich countries), and The Washington Post argues that “if empirical evidence ruled the world, guaranteed income would be available to every poor person in America, and many would no longer be poor.” Indeed in the 1970s it was nearly enshrined into US legislation under President Nixon, but progressives in the Senate held out, thinking they could win a higher rate of pay.
There has been an “explosion of trials” since the start of the pandemic. To highlight a few: Canada has had several wide-scale trials and is considering legislation. California is launching a UBI pilot program for youth who’ve been in foster care. Ireland is giving a minimum income payment to artists, to help them focus on making art instead of just paying the bills; and England currently has a new basic income trial where a small number of recipients will receive no-strings-attached payments for two years.
What about in Australia?
It’s worth remembering we once had a universal basic income in retirement in this country, before we decided to means-test the pension. We also used to have a child endowment. And in our very recent Covid past, we came close to a universal floor of basic income again when the conservative government doubled the rate of JobSeeker and introduced JobKeeper. So these are not unheard of notions for Australia.
Is it popular with the public?
Research shows a majority of Australians are in favour of some kind of basic income (from slightly more than half of us, according to the 2022 poll by the Australian National University, to a whopping 77% in a 2021 poll).
What are the benefits?
A basic income has strong potential to curtail many devastating and expensive societal problems, while also supporting people to study, travel, make art, care for their communities, start businesses, care for their families, reduce their stress levels and improve their overall quality of life. It also re-shapes power in the labour market, as well as in the home, by giving people a new floor of economic security independent of their employer or partner.
From the government’s perspective, rather than spending huge amounts of time and resources trying to sort the ‘worthy’ recipients of support from the ‘undeserving’ (and removing income as soon as someone does get a bit of money coming in), or shaming people when they need help, UBI prevents the harms and costs associated with poverty and financial insecurity in the first place.
Indigenous systems thinker and advocate for a relational economy, Jack Manning Bancroft, says in an era of Big Tech, automation and AI, a UBI is a powerful way to tip the scales back in favour of humanity. He writes:
“Universal basic income is one pathway — tax the robot companies that munched up the jobs, and make the robots provide us with a living wage. Then our life is not live to work, but live to learn, to relate, to know, and to be.” - Hoodie Economics, page 92.
In his Tedx talk, historian and author of Utopia for Realists Rutger Bregman says basic income has been shown to lead to “lower inequality, lower poverty, obviously; but it also results in less infant mortality, lower health care costs, lower crime rates, better school completion records, less truancy, higher economic growth, better emancipation rates, and all kinds of other positive social outcomes.”
“Time and time again, researchers have shown that free money may be the most efficient, the cheapest, and the most civilised way to combat poverty,” Bregman says.
A basic income has also shown to boost happiness, health and trust in social institutions in trials around the world.
What are the risks?
Historically, concerns were that a UBI would cause people to quit their jobs or turn down work, leave their marriages, and that it would cause inflation. Studies have found the first two concerns overblown: it can actually increase workforce participation when you don’t lose income for also picking up a few more paid hours, and it’s not a bad thing if people leave unhappy jobs or marriages because they have more financial security! The third risk can be managed through good fiscal policies, including taxation.
There’s also a risk in how it’s implemented: that it becomes compensation for more neoliberal systems and structures that increase inequality and involuntary unemployment, or further degrade public services. That’s why any basic income policy must go hand-in-hand with a process of defining our goals and values, and ensuring we back those in across the board.
Who are the key supporters and players?
The Australian Basic Income Lab is a collaboration of three Australian universities modelling what a UBI could look like. Stanford University also has a Basic Income Lab. Local advocates include Anglicare and the grassroots Basic Income Australia coalition. There’s support from the Australian Greens (in the form of a ‘liveable income guarantee’), but it’s still considered fringe by the major parties and will need more champions across the board. Overseas, Barack Obama, hardly a starry-eyed neophyte, believes a UBI will be harder to ignore in coming decades.
Do advocates agree on the model?
There are different views among proponents of a basic income as to whether it should be truly universal, or something more akin to a ‘participation income’, which requires people to do something for a basic income, but gives a lot more leeway as to what that is (eg, learning another language, artistic pursuits, volunteering or care work). Some say we should start with a participation income, which we can eventually make universal if we so decide.
At Australia reMADE, we’re inclined towards universalism from the start, because creating universal public goods destigmatises using public goods, while strengthening the social capital, trust and infrastructure of a good society. We don’t prevent wealthy citizens from accessing Medicare, or have an income test to enrol your child in public school. If basic income is to become a right, let it be for everyone. Wealthy citizens can always opt to decline their payment, donate it to charity, or find other ways to put it to use for the common good (including paying their fair share of tax).
Photo: Ali Elliott (unsplash)
TWO: A job for everyone who wants one – using the power of the federal government to create meaningful jobs, contributing to the public good
What is it?
Sometimes known as a ‘federal jobs guarantee’ or a ‘good jobs guarantee’, it involves expanding our public sector to offer people good and meaningful jobs, where people can use their time, energies and talents to directly contribute to the wellbeing of their communities and ecosystems.
“Rather than offering unemployed and underemployed workers job-finding programs or training opportunities, under the jobs guarantee, the government would offer them actual jobs,” according to an article for Australia’s Parliament.
Where does this idea come from?
It’s often associated with Modern Monetary Theory and economists like Stephanie Kelton, but you don’t have to be a full MMT enthusiast to embrace its appeal. Nor is it an entirely new idea. When covid hit, economists began calling for more infrastructure projects to “build our way out of recession” and provide immediate jobs with long-term benefits for the country, a strategy that’s been used since the Great Depression.
Why do we need this?
We know from our own research that people want to care, connect and contribute; and that there are essentials like housing, access to nature, healthcare and education that people want to be available for everyone.
There are many important things that need to be done, and the private market consistently fails to do many of them well, if at all; locking people out of paid work in the process. Involuntary unemployment causes real harm, including intergenerational poverty and even suicide, yet has been seen as an acceptable fiscal policy tool to try to manage inflation.
At the other end of the spectrum, even among highly-trained, well-paid workers, there’s the problem of ‘bullsh-t jobs’ — jobs perceived, by the very people doing them, to be meaningless and of no value to society. Research finds Australians want meaningful work, not just income; and expanding the public sector can offer people more opportunities to contribute to the public good, serving their communities and ecosystems. Now that the Albanese Government has re-committed Australia to a policy of full employment, a jobs guarantee is a logical future step.
How would it work?
Advocates say the program could be federally funded, locally administered and linked in with non-profits — to create community job banks that address local needs largely ignored by private markets; as well as offering a floor of security and good conditions for people in paid work.
A few years ago, GetUp published Future to Fight For, a manifesto for economic reform, which explained a Jobs Guarantee this way:
“Imagine living in a world where our transport network didn’t run into constant delays due to understaffing. Or where you could call Centrelink and not have to wait hours for someone to answer. Or where aged care and childcare were offered as plentiful and affordable public services — and all our parks and public spaces were kept clean…Everywhere you look there are opportunities to connect the untapped potential of people with the unmet needs of the community.”
In essence, it’s about funding the public sector well enough so that services provided meet everyone’s needs, and everyone has an opportunity to contribute to the public good. Note this proposition sometimes gets framed not just around job creation, but service provision — with the call for Universal Basic Services or “UBS”. We believe both starting points can get us to the same place, if we align the two goals.
Who would benefit?
Everyone, whether you had a public sector job or not. Imagine more well-run services meeting the needs of our communities. Imagine not having to fear unemployment because the public sector could provide a decent job, even in times of economic downturn. It would empower private sector workers at the lower end of the pay scale to negotiate better terms and conditions, because private operators would have to compete with public sector alternatives. It would also help lift people out of insecurity and financial stress when they are unable to find enough pay or hours through the private sector alone.
And it would give more people currently working in jobs they don’t find particularly meaningful new alternatives. Imagine more public sector jobs in research, development, design and solutions for common good, as we’ve seen in the US with the space program, and in Australia with the CSIRO. As economist Marianna Mazzucato argues, this kind of market-shaping entrepreneurial state creates incredible value and benefits for us all.
What about people who can’t or don’t want to do paid work?
A federal jobs guarantee does not say that everyone can, wants to or must participate in paid work to be valued. It’s not ‘work for the dole’. Nowhere is it written that you’d lose income or other benefits if you turn down a federal job.
Who are the key supporters and players?
In addition to those already mentioned, think tank Per Capita calls it a “lodestar idea in a time of uncertainty”. High-profile experts in favour include economist Bill Mitchell, as well as Stephen Hail of Modern Money Lab.
The Australian Council of Trade Unions (ACTU) calls for “full and secure employment” supporting the government’s policy of full employment as well as improvements and expansion of public services, but has not framed this around a ‘jobs guarantee’ as such.
Photo: Daniil Silantev (unsplash)
THREE: Shifting to a 4-day standard working week – valuing and enabling a full life outside of work
What is it?
It’s redefining the standard working week, giving people the same money for fewer hours. It could also be thought of as a 20 per cent pay rise, by reducing standard working hours by 20 per cent for no loss in pay. But fear not, economists say workers are long overdue for one, and that rising wages are not the cause of our current cost of living crisis. Wage increases haven’t kept pace with rises in productivity, executive pay or company profits in recent decades, so this offers a way forward that promotes wellbeing, as well as better sharing the wealth and value workers create.
It’s also an opportunity to share shorter working hours across more people. Going back to our high-level principles, this is about prevention and pre-distribution (or getting the market to serve society better in the first place), rather than only treating symptoms downstream.
Who’s doing it?
While the 4-day week has grown in popularity since the pandemic, many in government as well as the private sector have offered some version of a shorter working week for a while now, such as 9-day fortnights for full-time pay. (This Australian job search engine conveniently lets a person search for 9-day fortnight jobs.)
Global trials took off in 2022, with some of the largest in the UK and US. As of last count, 21 countries have currently either proposed a bill, implemented it as law, or are trialling it in some way.
More than 300 companies are trialling or implementing the change at last count. In Australia that includes Unilever, Medibank, Bunnings, Oxfam and a range of smaller businesses, with local trials reporting positive results. (And yes, there’s a rudimentary search function for 4 day-week jobs, too.) At Australia reMADE we support this policy, but as a small non-profit organisation do not have the resources to implement it ourselves currently, so we acknowledge it’s not easy for everyone and see it as a goal to work towards!
Meanwhile, the Australian Council of Trade Unions backs it as a shift whose time has come, and are calling for more trials to learn how to do it best.
What are the benefits?
Non-profit 4 Day Week Global reports 63 per cent of businesses find it easier to attract and retain workers with a four-day week, and 78 per cent of employees report being happier and less stressed (prevention).
Global trials so far have found employees report “less stress, burnout, fatigue and work-family conflict, and better physical and mental health,” while employers report a boost to morale and generally no loss in revenue or productivity. There are also benefits to our climate and environment, gender equality, community wellbeing and volunteering, as well as tourism (prevention, prevention and more prevention!).
Making four days the new full-time at no loss of pay normalises work-life balance and full lives outside of work, including time to care for and contribute to your family and community. Instead of having the day off but being stressed that your colleagues are carrying on with the work mounting up without you, trial participants say it’s genuinely relaxing because everyone in the organisation is on the same page. Broaden that out to the wider society sharing a three-day weekend or working more flexibly, and you can really begin to imagine the collective benefits to our mental health.
Might it mean working longer hours, but over four days?
Advocates at 4dayweek.au say we should aim for a reduction in hours, not cramming 40 hours into four long days (something that wouldn’t work for people with caring responsibilities, and has been found to lead to lower employee satisfaction and greater stress). We agree wholeheartedly.
How can people do the same amount of work in less time? Is this only realistic for office workers?
This is probably the thorniest issue from our perspective. While some employers are finding ways to adapt workloads and hire more people, others are effectively demanding their employees work harder or ‘smarter’ to accomplish the same output/workload in less time.
That may be possible for office-based and managerial roles, but how does the shopping centre cleaner clean 20 per cent more toilets in 4 days, or the worker in aged care shower 20 per cent more residents in 4 days? For public-facing service jobs and for many manufacturing jobs that have already been ‘sped up’ there’s also not much room to increase daily productivity.
This illustrates the importance of how this is implemented and the values behind it. For individual workplaces, it means setting some explicit new goals, defining new norms and co-creating new measures of success – beyond just productivity, according to guides like this from the Harvard Business Review.
We would argue against an approach that demands productivity gains at the cost of relationships – fewer chats in the kitchen, fewer ‘wasteful’ team meetings and individuals encouraged to speed up. Relationships are the connective tissue and lifeblood of our organisations; they’re key to our wellbeing, as well as the success of all that we do.
How would a 4-day standard working week affect people who work fewer than 4 days/week currently?
If a four-day week becomes the new standard of full-time employment, then through Australia’s industrial relations system, part-time workers on fewer hours would automatically get a pay rise, according to economist Prof John Quiggan.
We’d need to ensure part-time workers especially didn’t unsustainably have their hours cut but not their workloads. We’d also need to ensure casual workers weren’t left behind. Our goal here is to transform for our collective benefit, not to exclude or exploit.
We’d lose a few public holidays in exchange for long weekends, and there would no doubt be other details to hammer out; so again, the process matters and who’s at the table in deciding how it all works is really important.
What about schools?
Freeing up parents to work less would allow more schools to consider a four-day week as well. Schools are being allowed new flexibility in Queensland to move to a 4-day week; and one Catholic high school in NSW has announced plans to do so. A four-day school week is also being trialled in schools across the US. But it’s hard to do it in schools if parents are still working five days.
Where to next?
The Senate inquiry on Work and Care recommended the Australian government start a widespread four-day work week trial, but at the time of publication that hadn’t been taken up yet, and public service unions had their request for a four-day week knocked back.
However, an ACT committee has also recommended a 4-day week trial for those employed by the ACT government (including staff in government departments, public hospitals and public schools), with the government due to respond.
Remember, the 8 hour day and weekends were once considered radical, too.
Photo: Nathan Dumlao (unsplash)
How do these three policies sit together?
A UBI gives people income security, regardless of their status in paid employment.
A Jobs Guarantee builds out more opportunities for people to secure good jobs contributing to the public good, recognising that income is necessary but not sufficient for a good life.
A 4 day-standard working week rounds it all off, by supporting people to have lives outside of paid work, whatever job they do; and changing long-hour cultures that prevent many (especially women and people with caring responsibilities) from having better career opportunities.
A UBI and Jobs Guarantee sometimes get pitted against each other, as though one big idea at a time is all society can manage, so one must be right or wrong. We would argue, along with experts like economist John Quiggan, that they complement each other well and work best hand-in-hand.
A UBI by itself, without improving universal access to high quality public goods and services, is potentially regressive if it becomes compensation for mass involuntary unemployment and degrading public services.
A jobs guarantee, by itself, could reinforce the neoliberal idea that paid work should have primacy in people’s lives at all times; or that people must all be in paid work to be valued and contributing (a problematic notion for all of us; but particularly felt by those who are younger, older, carers and living with disabilities).
The 4-day standard working week by itself isn’t all that revolutionary, but it does set a healthier new normal, just as the two day weekend did more than 150 years ago. The sky didn’t fall in when we did that, either.
All these policies together help strengthen the enabling infrastructure of time and income that people need to live well.
“And... we have time. Time to care and be cared for. Time to enjoy our families and each other, to savour this beautiful earth, to be creative and to rest.”
Pillar 6: A Country of Flourishing Communities, from the the Vision of an Australia reMADE
Photo: David Tapia (unsplash)
How do these policies help the environment?
Firstly, building an economy fit for the planet is a huge undertaking. From advancing the rights of nature, to transforming our energy and transport systems, centring Indigenous systems thinking and working to address intergenerational equity, there is fortunately way more happening than we can cover here.
In terms of these policies, each of them would potentially offer some big environmental benefits, but they’re not without questions.
Namely, would people use more time and money to shop for more imported consumer goods; or to enjoy themselves with friends and family, be in nature, get more involved in their local communities, look after their health and volunteer more?
Interestingly, research finds more egalitarian societies tend to correlate with less wasteful, consumer-oriented societies. People tend to be less individualistic, more pro-social and environmental in their values and behaviour. So which comes first, and could policy change influence values and behaviour; or do we need the values and behaviours as a precondition for policy change?
Some environmentalists argue a UBI can support our transition to a low-carbon, post-growth economy, with activists agreeing a UBI could help us to work less, consume less, and still meet our needs. So far, in Australian polling about one third participants said being given a regular basic income wouldn’t change how many hours they would work. 15 per cent said they’d spend more time socialising with friends and family, while 11 per cent said they’d spend more time exercising or doing sports, and around 4 per cent said they’d take more time for their creative hobbies if they began receiving regular basic income payments. That does suggest that if given more financial security, Australians would be keen to focus on some of life’s other elements besides earning and spending.
This should be clearly in the environmental “win” column. Imagine more people being paid to care for Country, regenerate land and waterways, retrofit buildings to be more energy efficient, build low-carbon public and active transport infrastructure, roll out renewable energy and improve local disaster resilience — to name but a few opportunities. That’s why the youth-led Tomorrow Movement are calling for a ‘climate jobs guarantee’ to help us through the transition to a low-carbon economy, similar to how the The Inflation Reduction Act is expanding green jobs and investment in the US.
There are some obvious potential benefits to reducing carbon emissions. One study found that “a worldwide shift to a shorter working week over the course of this century could almost half the carbon dioxide emitted into the atmosphere, depending on the baseline scenario for each country,” according to an article in Green Agenda.
Most companies that have participated in trials report a reduction in resources and emissions thanks to reduced commuting and fewer days in the office. Additionally, staff have chosen to get more involved in nature-based activities, climate activism and volunteering in their own time.
In Australia reMADE’s work on Care through Disaster, we’re calling on a more collective approach to preparing for and recovering from climate-fuelled natural disasters — which includes giving people more time off to build strong, connected and resilient communities. Policies like a 4-day work week, UBI and more paid jobs caring for our communities and Country would allow us to build the kinds of communities that are more resilient to disaster, and better places to live, 365 days a year.
Photo: Jan Kopriva (unsplash)
How do we pay for them?
Firstly, budgets are about choices, values and priorities. As mentioned in part 1, decades of neoliberalism have trained us all to have rather low expectations of government. That needs to change.
Furthermore, wellbeing economic policies like these promote prevention and ‘pre-distribution’ — by preventing problems associated with poverty, inequality, economic insecurity and overwork in the first place; as well as by asking the market to do more of the heavy lifting to distribute wealth fairly. Both these things reduce unnecessary harms and free public money up for other priorities.
Ultimately, any policy and service we decide to prioritise can be paid for in a range of ways: including beefing up the Petroleum Resource Rent Tax (see: Alaska’s oil dividends, Norway’s sovereign wealth fund), repatriating lost billions in public revenue from overseas tax dens, and reallocating some existing funds (for example, we spend around $69 billion in tax transfers to the wealthy every year in Australia). The World Economic Forum has a long list of suggestions to pay for a UBI in particular. Marianna Mazzucato suggests a ‘citizen’s share’ of wealth generated through public investment in technologies and industries could also be passed on in a form of basic income.
"*If the top 1,000 corporations in the world were fairly taxed, it would allow for a modest UBI to be tightly and reasonably dispersed across the world." - UN Development Program
The bigger goal is this: we need our tax system to be purposeful, smart and fair, in service to our shared goals and values. Tax reform is a key part of a transformation towards a wellbeing economy in its own right, as well as a way to pay for the policies, programs and public goods we choose to prioritise.
Despite the accelerating climate crisis, the Australian government is subsidising the fossil fuel industry to the tune of billions of dollars in forsaken revenue.
We tax wages far more than we tax “unearned” capital growth and other forms of wealth, even though such wealth vastly outweighs Australia’s GDP.
We have a tax system that tilts heavily in favour of older, wealthier citizens more broadly, at a time when intergenerational equity is a huge challenge.
We let people and corporations legally avoid contributing billions in tax owed to Australia through global profit shifting and overseas tax dens. As Assistant Minister for Competition, Charities and Treasury Assistant Minister for Employment Andrew Leigh said in his keynote speech for The Australia Institute’s 2023 Revenue Summit:
“Estimates of the amount of corporate tax revenue lost annually due to big multinational firms minimising tax through low or no tax jurisdictions range from $500 billion to $600 billion. A race to the bottom between nation states has seen average corporate tax rates fall from 49 per cent in 1985 to 24 per cent in 2019.”
We’ve made superannuation a vehicle for wealthy tax minimisation and estate planning, something Treasurer Jim Chalmers has started to address.
The Albanese Government is still planning to implement “Treasurer” Scott Morrison’s stage 3 tax cuts as of the time of this publication.
The Albanese Government appears to be backing down on multinational, country-by-country corporate tax disclosure, after intense lobbying.
"We need a real root and branch look at our tax system and start to tax wealth and assets much more than we rely on taxation from working families and younger people while they’re building their lives."
Emma Dawson, CEO of Per Capita, ABC Radio National 22/11/23
Taxes are a tool for incentivising what we want, and discouraging what we don’t. So if we want to encourage more pro-social business models, such as employee-owned companies or BCorps, we can offer those companies tax incentives. If we want to spark innovation to build a more circular economy and reduce waste, we can tax waste more, as they’ve done in Spain. If we want to reduce extreme income inequality, we can tax companies that underpay their staff relative to their CEOs, like they’ve done in Portland. And if we want to reduce houses being used as a financial investment but sitting empty, we can tax vacant properties far more heavily, as they’ve done overseas for years in places like Vancouver, and are starting to ramp up in Australia.
While it’s clear that debt fears are exaggerated for political purposes — and, as economist Richard Denniss argues, the federal government “doesn’t need a big vault of money in advance to pay for stuff” — even leading Modern Monetary Theorists like Stephanie Kelton agree taxes and revenue are really important.
The first problem is who isn’t here: whose voices are largely under-heard and unrepresented?
The kind of groups that typically drive the conversation about tax reform are business-led and aligned. The people around the table of the tax debate are typically business talking to business about how to make tax work better for business. That’s why conversations like the Australia Institute’s Revenue Summit stand out. We need more people talking about tax in terms of citizens, our national purpose, shared goals and values. And we need proactive work, not just defensive campaigns.
Key organisations and voices to follow in this space include The Australia Institute, the Grattan Institute, Per Capita, Centre for Policy Development, Tax Justice Network, Foundations for Tomorrow and Think Forward.
The Australian Council of Social Service has been active for a long time in work to stop the Stage 3 Tax cuts, end Robodebt and raise the rate of income support, as part of their work for tax reform for the common good.
Economists talking about this include Alison Pennington, Steven Hamilton, Joseph Stiglitz, Thomas Piketty as well as journalists including George Monbiot, Anand Giridharadas and Ross Gittins.
Tax may be boring to the average person, but it’s how we pool our collective resources to provide for our collective wellbeing. Self-sufficiency has noble and well-intentioned elements, but remains a myth, and a privileged one at that. A “healthy me” is inevitably bound up in a “healthy we”. Tax, when fairly collected and wisely spent, is society’s love made visible.
Ultimately, any one of the tax reforms or policies discussed here will be met with fierce resistance from vested interests and political operators (remember franking credits?) and will require brave leadership to build support, both within and beyond government.
Photo: Julentto Photography (unsplash)
Moving forward: “it always seems impossible until it’s done”
At Australia reMADE we support a National Conversation in Australia, like they did in Wales, to really begin to set the vision of the kind of country we’re aiming for and define some tangible wellbeing goals we can go about putting into practice.
We know from our own work the power of asking people from all walks of life: ‘what matters most to you and your community? What is the Australia you want? What kind of legacy do you want to leave?’. The process itself, when done well, promotes wellbeing and builds social capital, so it would be an incredible experience for our country to have this conversation at scale.
As people get excited and get serious about our shared goals, what matters most and what kind of country we want to leave for our children, we can start to get everyone pulling in the same direction. We can give our leaders, not just in government but in all sectors of society, a mandate to be bold and work together. We can go beyond measuring what matters, to using wellbeing goals to guide decision-making, spending and priorities.
We mentioned at the top that the Australian government now has observer status with the Wellbeing Economy’s government partnerships, WEGo. Encouragingly, our states and territories are getting on board, too: the ACT has its own wellbeing framework and South Australia is set to create one. Victoria has a world-leading early intervention and prevention framework, and VicHealth has published this excellent guide to building a wellbeing economy, echoing much of what we’re talking about here.
Building a wellbeing economy is a thousand piece puzzle, with everyone working on their part. Here we’ve talked about the role of government, with key labour market policies highlighted in particular, but we know that policy isn’t the solution alone. The real opportunity is for government to go from market-fixing to market-shaping, using all the tools at its disposal to steer our economy in a new direction.
We know that good policy only gets built, implemented and sustained when countervailing power exists: when people join unions and campaign collectively; when civil society is unmuzzled, when citizens have the right to protest and community voices aren’t drowned out by monied interests. The ‘why’ and ‘how’ of any policy change will only be as good as the organised push behind it, so we need those fighting for people and planet to have real influence at the board table, at the tax summit, inside Parliament, in the press, online and on the streets.
Bottom-line: crises will force us to change, but we don’t have to wait for that to happen. Nor do we have to be at the mercy of disruption designed to enrich a small few. People overwhelmingly want the same things, and we can build an economic system that values what we value.
So we invite you to take these ideas and more out into your organisations, communities and networks. Test them out, listen to different views, explore and refine. Engage in polling and research. Ask your union to support them. Pitch ideas to journalists, to your elected representatives, to policy conventions and conferences. Write letters to the editor and op-eds. Follow groups who are active and share their content. Make art, tell new stories, host events and create campaigns that move the Overton window of possibility towards a new common sense.
Know that good change is possible, and that every piece of human progress we take for granted once sounded ridiculously far-fetched. As historian Rutger Bregman reminds us, “utopias have a way of coming true.”
Acknowledgements
AUTHOR’S NOTE: THE IDEAS PRESENTED ABOVE BUILD ON THE WORK OF AUSTRALIA REMADE, AS WELL AS MANY OTHER EXPERTS.
IN PARTICULAR, I’M GRATEFUL TO KATHERINE TREBECK AND JEREMY WILLIAMS, Amanda Janoo, KATE RAWORTH, MARIANNA MAZZUCATO, JOHN QUIGGAN, TIM HOLLO, STEPHANIE KELTON, GEORGE MONBIOT AND ROB HOPKINS; ALONG WITH THE WELLBEING ECONOMY ALLIANCE, THE CENTRE FOR POLICY DEVELOPMENT, THE AUSTRALIA INSTITUTE AND THE WONDERFUL LEADERSHIP OF SOPHIE HOWE AND THE PEOPLE OF WALES. FINALLY, A HUGE THANK YOU TO EVERYONE WHO’S COME ONTO THE REMAKERS PODCAST IN SEASON 3 TO EXPLAIN IDEAS FURTHER AND OFFER UP SOLUTIONS.
THERE TRULY IS AN INCREDIBLE ECOSYSTEM OF THINKERS, LEADERS AND ADVOCATES FOR ECONOMICS SYSTEM CHANGE — FROM CONTEMPORARIES LIKE JOSEPH STIGLITZ, RUTGER BREGMAN, AMARTYA SEN, RICHARD WILKINSON AND KATE PICKETT TO GIANTS OF MODERN HISTORY INCLUDING JOHN MAYNARD KEYNES, MARILYN WARING, JOHN KENNETH GAILBRAITH, AND HERMAN DALY… MAKING FOR AN IMPOSSIBLY LONG LIST TO ACKNOWLEDGE THEM ALL.
I RECOMMEND WEALL.ORG, THE GLOBAL WELLBEING ECONOMY ALLIANCE, OF WHICH AUSTRALIA REMADE IS A MEMBER, FOR A WIDE RANGE OF RESOURCES, EXAMPLES AND EXPERTISE. WEALL’S AUSTRALIAN HUB IS GETTING UP AND RUNNING IF YOU WANT TO GET INVOLVED.
While informed by many, this work is our own, and so are any errors or omissions. Constructive criticism, contributions, feedback and other ideas are invited in the comments or via email (info@Australiaremade.org).
LILIAN SPENCER
Lily Spencer is the Co-Director of Australia reMADE. She believes that the secret to change is to, ‘focus your energy not on fighting the old, but on building the new.’
Selected Other blogs by LILY:
If a tree falls in your front yard, who comes to clean it up?
What is our why? Reclaiming our sense of purpose as a country
