Economic Policy Framework
We subscribe to the Modern Monetary Theory (MMT) definition of how the economy works. If you're interested in reading about this in detail, check out this surprisingly accessible introduction from Prof. L Randall Wray. If you'd rather not spend the next 6 weeks reading a book on economics, the following summary will suffice.
The role of taxes in the Australian economy is not to fund government spending. The federal government does not need to "raise revenue" in order to "fund spending".
The Reserve Bank of Australia's Domestic Market Operations page has this to say on the matter:
Expenditure by the Government adds (money) to the account of the recipient (or their financial institution), while tax receipts have the opposite effect.
What this means is that the federal government creates money when it spends and destroys money when it taxes. As a result:
- Deficit spending simply means the government has created more money than it has destroyed in a given year. This is almost always good for the economy. A surplus means that the government has destroyed more money than it has created in a given year. This is almost always bad for the economy.
- Taxes don't "pay" for things, and there is no such thing as cost to the taxpayer.
- There is no government debt. We choose to pay interest on treasury securities, and we pay that interest in Australian dollars, which we create in the first place. The Australian Federal Government never has to borrow to fund its operations.
- The ONLY constraint on federal government spending is what it can purchase in Australian dollars without causing excessive inflation. There are no financial affordability constraints on the Australian Federal Government.
Once you learn these things, there are several fiscal policy outcomes, but the primary one is that the Australian Federal Government is free to pursue a policy of full employment.
That means that anyone who wants to work, can have a job.
This is NOT a "work for the dole" proposal. This is voluntary, full time employment, guaranteed by the government. The details of how to implement a programme of full employment are long and complex, but as recently as March 2016 the Australian Labor Party has pledged a return to full employment so it's not some crackpot theory.
Read this excellent post from prominent Modern Money Theorist Bill Mitchell from the University of Newcastle on why the ALP will NOT be able to deliver on their promise, and for all the same reasons, why we WOULD.Become a Member Now!
Some examples of other policy outcomes of MMT:
Currently in Australia almost EVERY policy decision is discussed in the context of affordability. Rather, it should be discussed in the context of inflation. When you frame the discussion about economic policy this way, you realise that the government could dramatically increase spending WITHOUT having to hike taxes or "create savings" in other areas.
Healthcare (including dental) and education (including tertiary) should be free for everyone, with "gaps" occurring only as required to disincentivise overuse of a particular resource. Simple.
Indigenous health and welfare outcomes in this country are abhorrent. With a programme of full employment, any Indigenous person in any area of the country will be entitled to a full time job in their locality, supplied by the government.
This is NOT compulsory, it's there for people who want to work. Providing sufficient employment opportunities in high quality jobs with reliable incomes to Indigenous populations will go a long way towards repairing the damage that has been done since European invasion and settlement of Australia.
Taxing pollution makes sense, because it forces businesses to account for the environmental impacts of what they're doing. The scare campaign run by the Coalition about the carbon tax indicated that everything would become more expensive. What's really happening is that by not pricing pollution we are subsidising their business at the cost of future generations who will have to clean up the mess (this is the "real debt" our grand children will need to "pay back"!!)
Communications infrastructure, ie. the NBN, (and, indeed, any other "natural monopolies" such as power and water infrastructure) should never be privatised. One of the main arguments in favour of privatisation is that it creates efficiencies and reduces cost to the government. Efficiencies in private markets come from competition, so privatising a naturally monopolistic sector has no such benefit and simply means that services are delivered for profit rather than for the public good.
Since the only constraint on government spending is actual resources and not dollars, we should be asking ourselves "Do we have the skills and capacity to build a world class fibre network? If so, is that the best use of those resources?"
The answer to both of those questions is, of course, yes, and we can spend the dollars required to make that happen.
Our Foreign Policy Framework
Foreign policy is a complex can of worms, but we have 2 guiding principles that are both in line with our social and economic policies.
We have a simple policy framework for social issues:
Align with the UN first and foremost, rather than the US.
Australia is already signatory to so many international treaties that we flat out ignore our obligations to. We could improve our foreign policy ten fold by honouring our existing agreements, by upholding the sanctity of the UN, and by not automatically aligning with US interests.
Discourage developing nations from taking loans in currencies they do not issue.
Modern Monetary Theory tells us that a government who issues its own currency, and issues debt only in that currency, can never go broke. The concern is when developing nations take on debt denominated in, for example, US dollars. In that case they can't just create more dollars to make repayments, they have to GET the dollars first. This puts them in a very desperate situation.
Correspondingly, we think that, rather than cancelling debt issued by developing nations, the debts should simply be exchanged to be in the sovereign currency of that government. This would enable them to easily make interest repayments and would then promote investment from those countries that would then hold large sums of that sovereign currency.Become a Member Now!
Who We Are
Who We Are
The Interim Steering Committee of the Australian Employment Party currently consists of: