1. MMPbk: Rationalising unemployment figures, AFR 2/2/73
2. MMPbk: The unknown bludgers are our problem, AFR, 9/8/74
3. PPMcG: Spectre of Big Brother refuses to fade away, AUS, 15-16/9/90

1.
A Modest Member of Parliament [Bert Kelly], “Rationalising unemployment figures,” The Australian Financial Review, February 2, 1973, p. 3.

There are two reasons for the unpopularity of economists; they have the nasty habit of usually being right and they are sad and arid people, not brimming over with the milk of human kindness.

But the criticism certainly could not be levelled against the economists who bring out the quarterly publication called The Australian Economic Review in Melbourne.

These are the nicest economists known and are so full of the milk of human kindness that you have to be quick to get the bucket under before a lot of milk drips on the cowshed floor.

In the last issue of the Review, they spelt out what should be done to stimulate the economy to relieve unemployment, and to dampen it down to prevent inflation.

This is clearly a complicated process and even Eccles feels himself unable to comment about the general thesis — and that is a pleasant change.

But I would like to examine one part of the thesis and ask, “How much of an unemployment problem have we really got?”

A politician soon learns that he mustn’t call a spade a spade. He learns to refer to pensioners in the most glowing terms as “pioneers who have borne the heat and burden of the day” and who possess virtues few others of the community can claim.

He knows that this is nonsense, that pensioners are the general public grown older and they do not necessarily get more virtuous as this happens.

Similarly, the wise MP soon learns to assume that all the unemployed are desperately trying to get work. But we all know that there is a proportion of the unemployed who are just about unemployable.

We also know that there are others who would work well if they could find exactly the right job in exactly the right place.

There are others again who have just left school and who are wisely looking around first before they commit themselves. And there are hippies who despise those who work, and so on.

That there are others again who are genuinely out of work I do not deny. But we know that much of what we now do to alleviate unemployment adds to the number of unemployed.

BHP recently imported, at considerable expense to themselves and the taxpayer, a number of Spaniards to work in their plant at Whyalla, while at Port Pirie, just a few miles away, there were a large number of people on unemployment relief.

Early last year I visited a native settlement in my electorate and received a gratifying welcome. When I asked the superintendent the reason for this change of attitude he said that I had received the credit for what the Government did during the last week.

“That’s very proper,” I replied, “but exactly what did the Government do last week?”

“It raised the unemployment benefit from $10 to $17 a week,” he said. “I’ve had difficulty in getting many of these men to apply for work before. It will be quite impossible now.”

Now the Melbourne economists want us to increase the unemployment benefit to $[??] a week plus $14.50 for a wife with an allowance of $3 for each child.

They recognise this will present a problem and I quote their report: “We are aware that the objection will be raised to this proposal that it will decrease the incentive to accept employment and will thus make “Living off the unemployment benefit” a more attractive proposition.

“We do not deny that there is a problem here, but the solution to it can only be in improving the tests for genuine unemployment rather than in penalising those who are genuinely unemployed.”

“Improving the tests for genuine unemployment” they say. Well, that’s easier said than done.

We all know that the system is being abused now. How much more would it be abused if the temptation is increased?

There would need to be better and tougher tests than now, and they would have to be toughly administered.

If not, we would destroy the morality of the slackers who are beating the system, and the morale of the genuine worker who sees his slacker mates getting well paid for doing nothing.

We would end up with a much bigger inspection force. Still, I guess it’s one way of solving the unemployment problem. We could employ people to watch one another!

***
2.
A Modest Member of Parliament [Bert Kelly], “The unknown bludgers are our problem,” The Australian Financial Review, August 9, 1974, p. 3.

One of the sacred political cows is unemployment. A member soon learns to talk about unemployment in hushed and reverent voice if his party is in Government or in ringing tones if he is in Opposition.

He soon learns to speak emotively about people being “thrown out of work” or scathingly about the wickedness of creating “a pool of unemployment.” And the unemployed are all painted as long-suffering goodies, in the same way as aged pensioners are all depicted as “pioneers who have developed this great country of ours, who have borne the heat and burden of the day.”

As I get nearer pensionable age I am becoming acutely aware that I do not become better just because I am getting older. I know some pensioners are wonderful people, but many are like me — very ordinary indeed.

So it is with the unemployed people. Some of them are genuinely unemployed but there are few of these now. If you break down the pool of male unemployed as at July, 1972, this is the position. First, 20.8 per cent were temporarily unemployed, were in the process of changing jobs or were seasonal workers. Even in times of fullest of full employment this percentage would remain.

Then there were 32 per cent of what are called the hard core unemployed made up as follows: handicapped 10.9 per cent, aged 5 per cent and personal characteristics 16.1 per cent. The latter would include the social derelicts, the alcoholics and the other flotsam of an affluent society.

This group, totally 32 per cent, would remain whatever the state of the employment demand. I don’t say that we should ignore the personal problems involved in this sector but it is certain that creating more employment wouldn’t solve them.

Of the balance (47.3 per cent) 2.3 per cent were unemployed because of inadequate command of the language. These would remain until they learned English whatever the employment position. Another 3.6 per cent were unemployed because of lack of qualifications and here again the solution is training them, not trying to create more employment.

The balance, 41.4 per cent, were classified by the department as having insufficient labour opportunity and this sector would contain the true unemployment at which any government policy would be aimed. Yet only about 17 per cent of these had been unemployed for more than three months and certainly some would have been in the country and would have been unwilling to go to the city where the work was.

So when you hear politicians emoting about the pool of unemployment we should have a clear look as to how this pool is composed.

And we know that there is a percentage (how big we can only guess) of what the Minister for Labour calls “bludgers.” These are reckoned in the Government’s figures. The minister says there are not many of these but there are more than he knows about. If he knew about them they wouldn’t be there. It is the ones he doesn’t know about that worry us all.

And we should be careful about the phrase “people being thrown out of work.” All over the country at all times people are changing jobs and at times of overfull employment large numbers of people wander round from factory to factory, from job to job, working for a few days and then moving on, knowing that they can get a job anywhere.

Yet when a factory, goaded beyond endurance by transient labour or by silly demarcation disputes or by wildcat strikes, threatens to put men off there is a cry of rage and anguish that people are to be “thrown out of work.” What really happens in times like these is that most employees will go and get another job. I understand that almost all the people stood down by Leyland recently quickly found employment elsewhere.

If the Government is not successful in slowing the present rate of inflation, export industries in particular, the service industries, and even heavily protected secondary industries, will be unable to afford to employ people. Then we will have inflation, plus real unemployment.

I hope we in the Opposition will have more sense of responsibility than the ALP had when in Opposition when they used to talk glibly about “creating a pool of unemployment” while we tried to tackle inflation. We should, instead, be asking ourselves what policies we should have been following had we won the election.

***
3.
Padraic P. McGuinness, “Spectre of Big Brother refuses to fade away,” The Weekend Australian, September 15-16, 1990, p. 2.

The proposal to introduce a national identity card, the Australia Card, was fortunately abandoned by the present Government after a technical defect in the legislation allowed it to be blocked by the Opposition.

But the supporters of such an idea will never give up, and it is clear that those who believe there is no threat to our liberties in having our personal affairs and finances committed to databases which will make it easier for bureaucrats to snoop into and control our lives are still with us.

There has recently been some concern expressed about the use of the tax file numbers, and the extension of access to taxation records. Of course, as is always the case, the introduction of the tax file number, like the ID card, was advocated on the grounds that it would help stop tax evasion. But to some extent these concerns are misguided.

What has happened is that the Government in the Budget proposed that eligibility for concessional drugs through the Pharmaceutical Benefits Scheme should be checked by cross reference to Medicare records, while recipients of welfare benefits will have to provide their tax file numbers for cross-checking of eligibility. It will be noted that both these proposals are conditional — that is, if you do not want to be subject to such checks, then there is a simple answer. Don’t ask for the benefits.

It seems absurd to suggest that the Government should not be able to check on the genuineness of the claims of an individual to welfare and similar benefits.

It is already known that there are ripoffs in the welfare system — how are these to be stopped without some way of confirming that the claimant of a benefit is both entitled to it, and not presenting multiple claims?

Of course it is objectionable that such information should be swapped around. But the major problem is clearly the fact that we have a welfare system which is so universal and so attractive as to make policing of this kind necessary.

It is the welfare system itself that is at fault, and we can rightly object to a government which implements a system so prone to fraud, and so tempting, that it is necessary to produce a mechanism of a police State to deal with the problem it itself has created.

Much the same can be said of the tax file number. It is perfectly true that our present tax system, before the introduction of the new tax file numbers, was open to evasion and fraud. Instead of punishing those of us who feel entitled to keep our financial and personal lives to ourselves, while paying our taxes, it would surely be rational to ask that the Government remove the features of the tax system which make the file numbers necessary.

Then there is the cash transactions recording system under which banks, bookmakers, and anyone else dealing with large amounts of cash has to report to the authorities the identity of anyone making a large payment in cash.

This is meant to pick up black economy transactions, especially involving drugs. The racecourse has always been the place for “washing” black money — and it still is, since I am assured on excellent authority that the criminals have already found a way around the cash transaction reporting system.

As with identity cards, tax file numbers, Medicare cards and the rest, the only real victims are the innocent who lose their privacy. The real criminals soon find a way around the system.

One way to do without all this paraphernalia would be to deduct all tax at source, as happens already with ordinary pay as you earn tax, at the maximum marginal rate. Then at the end of the tax year, or during it, it would be a matter of personal choice as to whether claims for refunds were made for an income tax return was submitted at all. It is a simple matter to extend such a system to payments of interest and dividends.

Of course such a system would present problems for people who were not liable for the top marginal rate of tax or who wished to claim deductions. There is a simple answer.

Abolish all deductions (which are always a second best way of handing out government largesse to preferred activities) and set a single, flat rate of tax at a lower level than the present top marginal rate.

On top of this, institute a single rate goods and services tax, so that even those who escape the income tax net by operating in the black economy end up paying tax whenever they spend money on anything.

Then such a system: tax file numbers, ID cards, income tax returns, and Tax Office access to bank, employment and other personal records would be unnecessary. The reporting of large cash transactions would become irrelevant.

But what about welfare, what about progressive taxation, what about income redistribution, what about helping the poor and the sick?

It would, it is true, be impossible to have a foolproof taxation system which redistributes income without exercising total control and supervision over the financial affairs of every single member of the community.

To do this it is necessary to establish a huge database which will never be totally secure, which will never be totally accurate, and which will make available to bureaucrats information about you and your neighbour which is rightly private.

It is well known that already credit card companies can construct a pretty accurate profile of the habits of their customers. That is one good reason for having more than one credit card.

When such financial information is brought together with tax file information, and other personal information held in various government records, there is virtually no privacy possible.

Every extension of government recording of our financial transactions, our health claims, our welfare receipts, and so on brings us closer to potential total supervision.

When this is complete, we will have a perfect welfare system, not open to abuse and a perfect non-evadable taxation system. We will be prisoners in our own jail.

Of course the well-meaning people who want a cradle-to-grave welfare system will always insist that this is not what they want. And I believe them (some of them anyway).

But since it is impossible to run such a system without cross-checking information to prevent or lessen fraud, it is inevitable that as the system grows so will the database and so will the loss of privacy.

And while I trust our present Prime Minister, and who ever is likely to succeed him from which ever party, I do not believe that all future prime ministers, treasurers, social security measures and so on can be trusted not to abuse a huge database which will contain detailed information on every member of the community.

No one in his right mind would trust even a saint with such a powerful tool — power corrupts, and absolute power corrupts absolutely. The only effective precaution is to ensure that such a database does not exist, and to the extent that it already exists to seek ways of dismantling it.

This means radical reform of our taxation and welfare systems. The do-gooders who bleat about civil liberties rarely, however, accept that you cannot have a socialist system, or an extensive network of discretionary tax-financed welfare benefits, and civil liberties at the same time.