by a Modest Member of Parliament, “RED jobs will put us in the red,” The Australian Financial Review, January 24, 1975, p. 3.
As the unemployment figures mount, we watch the desperate efforts of the Government to get itself out of its mess.
Mr Cameron has for long been a pin-up person in our family. Mavis says he has a lovely smile and a tender heart, while for years I have admired his polished political footwork.
So I was breathless with admiration when he blamed all our unemployment on the multi-national companies. That’s the kind of action that takes real nerve, particularly when you don’t believe it yourself.
But to set things right, Mr Cameron has announced that the Government is going to spend an extra $20 million a month on the RED [Regional Employment Development] employment scheme. This looks, at first glance, to be an act of real statesmanship, but is it really?
This extra $20 million a month is going to come from one of two sources, either from the taxpayers or the printing press.
If it comes from taxes it will mean that the taxpayers will have $20 million a month less to spend. Evidently the government thinks that it is better able to spend the taxpayers’ money than the taxpayer, and that more employment will follow in the wake of government spending than private spending.
But when you look back on the Government’s performance, surely most of our problems come from the fact that the private industry sector has been starved of resources to keep the government machine from going along at full steam.
If this extra $20 million a month is going to come from the taxpayer, we are going to have another helping of the same mixture that has been so bad for us in the past.
But perhaps the money is not going to come from the taxpayer, but is going to be created by the Government or, in other words, is going to be printed.
Those of us who came through the 1930s depression will know, as we didn’t know then, that there is a time to prime the unemployment pump by wisely expanding credit in times of deflation, as in the 1930s.
But to think that this is the answer to our problem with inflation running at the higher rate in our history and with a budget deficit already running at about $1,000 million, this is surely putting kerosene on the inflationary fires.
Too few people realise that it is the high rate of inflation that is the fundamental cause of our unemployment, because too many people just can’t afford to pay the price of labour. If this $20 million a month is to come from deficit financing, it will add to our problems, not solve it.
From now on we can expect to be deluged by a spate of efforts to “create employment.” We can look forward to such childish illusions as asking employees to work a three day week for a full week’s pay. So the car manufacturer will have to pay even more for his labour and so cars will cost even more, so even less cars will be bought. This is just a sample of nonsense that we will hear from now on.
And we will hear even more about stopping imports from coming in.
Most of our imports come in to service industry and are needed to make the private sector work well. Mr Hawke’s solution is to stop them coming in so we will have to pay more for essential materials so the private sector will get sicker and sicker with disastrous effects on employment. And you do not get good employment figures from a sick economy.
Another solution will be to put more people in the Public Service. We will have more people engaged in cutting up and handing out the economic cake and less people making it. We will all probably end up in taking in one another’s washing. That will cure unemployment, so they say!
It is silly to go around talking about creating employment. Australia is simply bulging with work to be done. What we need is the incentive and the economic climate to go and do it. The economic climate has been spoilt because too many people feel that if they do succeed they will get clobbered and if they don’t succeed they will get looked after.
The President of Uganda has another approach to unemployment. He has decreed that it is illegal to be unemployed. Unfortunately Uganda is about the only country Mr Whitlam didn’t visit.
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