A JOB GUARANTEE FOR THE BOTTOM MILLION
In this lecture I will put the case that the recognition of Indigenous Australians in the Constitution is critical to closing the gap on social and economic disparity.
Our Cape York Agenda is based on the metaphor of the staircase. The staircase to development and freedom. It has three parts: its foundations, its underpinning support structure and the stairs themselves.
The foundations of any healthy community are social and cultural norms.
The underpinning support structures for the staircase are the opportunities - education, health, infrastructure, property - that support individuals and families to build their capabilities.
Finally, individuals and families choose to vote with their feet to ascend the stairs of opportunity.
It is families who climb stairs. No one has come up with a mechanism for social uplift that involves a mass elevator for a community to ascend all at once. Stairs are climbed by families urging their individual members to climb with them and investing in them to be climbers.
That’s our three-part formula for community empowerment: a strong foundation of social norms, investment in opportunity so that individuals and families can build capabilities to make choices to improve their lives in pursuit of their own interests. Properly understood, self-interest is the engine of development for families and for societies. No development is possible without it.
This is how development occurs. The idea of social and cultural norms is conservative. It is about personal and family responsibility.
That is why we start with a budget at the level of personal responsibility. We say to our mob: ‘a better life begins with a budget’. That’s how we start the journey of family empowerment and social change. There is no getting around the need for personal responsibility.
But our people also need opportunities to make a better life. This is the next step. Supporting families to get their domestic lives sorted out – income for basic needs, education for the children, health services for each individual and a prideful home for the family – by providing opportunities in return for exercising personal responsibility. We always want this to be based on reciprocity. A hand-up not a handout.
But responsibility and opportunity must be supported and enabled by structural change that allows Indigenous communities to take responsibility for our own empowerment. That is the top level: the structural reforms so that government support enables us to develop, rather than weakening us with passive welfare. The ultimate structural reform is constitutional recognition, from which everything else cascades.
This is the arc that connects the constitutional recognition of our people with the personal responsibilities and opportunities of every individual and family. This is why I support a constitutionally guaranteed Voice in our affairs, because, properly designed, it will enable Indigenous peoples to take responsibility for the problems we face. Our communities live our problems. No one is better placed to solve them. This is the only path to closing the gap.
Over the past two decades we have made certain progress with structural reforms. We created new forms of government partnerships that show promise for the future if they were formalised, and if they were scaled. We worked with Queensland Premier Peter Beattie to implement Cape York Partnerships. We worked with his successor Anna Bligh and John Howard’s federal government on the Cape York Welfare Reform trial. Bligh legislated the Family Responsibilities Commission, a decisive structural reform that enables our Elders to oblige community members to uphold family responsibilities in relation to school attendance, child protection, housing tenancy and local laws. This restoration of cultural authority at the local level is revolutionary.
One thing we are unable to get governments to understand is that reform requires us to transition from paradigm A to paradigm B. It is not a matter of fiddling around with A. A is the world of passive welfare and disempowerment. B is the new world of self-determination, true responsibility and empowerment. Our challenge is to leave A behind and do everything to create B. The problem is governments want to twiddle the social knobs to adjust A. They don’t see that an entire paradigm shift is required.
We have still not broken through with our reform argument.
The ultimate structural reform – and most challenging – is constitutional recognition. We have been working on this large and seemingly impossible project even as we have been working on building the family budget, building school attendance and building pride in the family home. Even as we have been building Indigenous capabilities.
We have been multi-tasking and multi-tracking our reform efforts, from building domestic livelihoods to government partnerships. From families saving money in children’s education trust accounts to advocating legislative and constitutional reform.
In 1999 I launched my critique of passive welfare as foundational to understanding the deep social and cultural dysfunction and disadvantage of my own home community and other Aboriginal communities of Cape York Peninsula.
Nothing over the course of the past two decades has caused me to resile from this analysis. Whilst conservatives instinctively supported our policy from the beginning, the left did not, and it is probably fair to say largely still do not today. Witness the rolling back of alcohol bans in the Northern Territory and Queensland, both instigated by the left on the basis of lofty principles with little regard to the practical realities in many Indigenous communities. Is there a better example of why local communities need a constitutionally guaranteed say in decisions made about them? Those decisions should have been undertaken in true partnership with local communities. That is what a constitutionally guaranteed voice is intended to ensure.
Let me turn to the entrenched problem of welfare dependency in Indigenous communities – a problem that also besets many non-Indigenous families, and requires innovative solutions. The centrality of long-term unemployment and its long-term effects on individual mastery, family cohesion and neighbourhood social capital is still denied by the left, who are supposed to be the champions of the underclass. But I urge both sides to look this problem squarely in the face.
My account of my community’s descent into passive welfare and that of other Cape York communities was not different from Stanner’s description in 1968:
Homelessness, powerlessness: there is a third and fatal element. In a hundred local patterns they drifted into a vicious circle of poverty, dependence and acceptance of paternalism. Every act of paternalism deepened the poverty into pauperism and the dependence into inertia. The situation was self-perpetuating and self-reinforcing.
There it is. Dependence and the acceptance of paternalism. Every act of paternalism deepening the poverty into pauperism and the dependence into inertia. I would speak about this 30 years after Stanner with paternalistic dependency now well entrenched and its effects on social and cultural functioning impossible to deny.
Paul Collier the development economist’s 2007 book The Bottom Billion argued that a billion of the world’s population living predominantly in Africa and Central Asia were not beneficiaries of development, stagnating at best and more often declining. They constitute peoples and nations caught in one or more of four traps: a conflict trap, a natural resource trap, the geographic trap of being landlocked by bad neighbours and bad governance in a small country.
Collier’s framework was useful to me thinking about the situation of Australia’s indigenous peoples, for whom development indicators are as parlous as the Bottom Billion, but whose context – a fourth world population within a wealthy first world country – is distinct. Indigenous communities constitute stranded pockets of un-development.
Using Collier’s development frame I zeroed in on the particular development traps indigenous communities are caught in. Our communities are part of the Bottom Million in Australia, which like Collier’s Bottom Billion, is not advancing and who suffer from intergenerational disadvantage and dysfunction – and nothing is working to change their prospects.
Underclass whites and migrants are also caught in the same traps as the indigenous underclass.
In a 2017 report the Productivity Commission quantified three per cent of Australians – roughly 700,000 people – who were in income poverty continuously for at least the previous four years. They come from single parent families, the unemployed, people with disabilities and Indigenous Australians who were particularly likely to experience income poverty, deprivation and social exclusion.
The Commission’s numbers are open to debate. They are likely an underestimate.
I propose this Bottom Million is caught in four traps:
- the trap of the natural rate of unemployment
- the trap of the middle class welfare service industries
- the trap of the vice industries
- the trap of voicelessness
The trap of the natural rate of unemployment is ultimately the trap of passive welfare. It is the product of the macroeconomic policy management of the Australian economy, founded on the idea that there is natural rate of unemployment – historically around 5 per cent. Orthodox economists hold that this ‘natural rate of unemployment’ is needed to control inflation. It is this conventional approach that keeps a cohort of Australians permanently unemployed. This is Australia’s Bottom Million. They are inter-generationally disengaged from the economy, with deeply embedded cycles of disadvantage and dysfunction. They do not just include people with disabilities but people debilitated by their situation in the underclass. This group includes many Indigenous Australians.
Across the Anglosphere, governments have developed welfare-to-work policies that have been a charade, a cruel con against the poorest and least powerful. The bottom million have been exhorted and told to get off welfare while macro-economic policy has been deliberately aimed at keeping them unemployed.
By using unemployment to control inflation, the NAIRU anchors the lowest price of available labour not at the minimum wage, but at the rate of welfare payments – which is below the poverty line. A group of Australians are kept in poverty to discipline wages.
The trap of the middle class welfare service industries. The welfare state has created a vast middle class of bureaucrats, academics, non-government (and now for-profit) organisations whose raison d’être is to fund, organise and deliver “services” and “programs” to the underclass. All pursuant to a “social policy” of the state. The underclass are diagnosed as having “needs”, those needs are deemed to require a service or program which is then “delivered” to a passive clientele. The assumption is that services are solutions and people with needs can never have enough of them.
This is a parasitic industry. A vast and invested industry. Politicians. Senior bureaucrats. Middle bureaucrats. Minor bureaucrats. NGOs and now outsourced private sector organisations. This is the middle class harnessing the underclass as clients and as subjects of their social policies and services. It has delivered no social change in the circumstances of the underclass, and is yet the primary expression of governmental compassion for the down-trodden. But this industry is really a callous and relentless boot on the throats of the poor. It accepts that poverty is permanent.
But if we accept that the poor will always be with us – and that’s that – then there is no solution to Closing the Gap. Given remote Indigenous communities form this welfare dependent population, then no gap will close if we accept that class advancement for the underclass in Australia is impossible.
The problem is that essential and beneficial government service delivery is mixed up with a vast panoply of services that displaced Aboriginal individuals, families and communities from taking up their own responsibilities. Instead of investing directly into families in order to build their capabilities, we have a self-serving industry of service delivery.
The trap of the vice industries. The African-American economist Thomas Sowell, said: ‘The poor are a goldmine’. The powerful and predatory gambling, grog, and illegal drug industries are ruthless when it comes to the poor and the underclass is riddled with addiction epidemics which are now well entrenched. No great policy energy is displayed by governments to tackle these industries and the disproportionate misery they cause to poor families. In respect of gambling, the state itself is a co-profiteer from this misery. They let these parasites literally take food off the table of the children of the poor. This will happen again in Australian homes this very night. How can we sleep knowing our governments are causing thousands of children to go without because of the stranglehold these vice industries have on those who otherwise love them? A Voice should partner with government to address grog, violence and suicide in Indigenous communities. It should also urge policy change in relation to gambling, which is destroying so many families.
Which brings me to the trap of voicelessness. The Indigenous underclass have no voice, they have no power to change the policies that are made supposedly to address their problems. If a Voice is to be effective and meaningful, it must be about giving the Wik people a Voice, so that they can take better responsibility for their people. It must be about giving the Yolngu a Voice, so that they can take be empowered to solve their problems. It must be about giving the Yorta Yorta a voice. This must not be a top-down, socialist structure. This must be about empowering the ‘small platoons’ to take responsibility in their own affairs. I urge the Coalition: do not let this be a Labor Voice. Let this be an Australian Voice. Do not let this be a Voice for Opportunity alone, but a Voice for Opportunity and Responsibility. This must be a structure to facilitate local responsibility. We need conservative and liberal input to make this work, as much as we need the input of the social democrats. Do not be bystanders in finishing the work first precipitated by John Howard’s commitment on election eve, 2007.
I do not accept my people should remain perpetually locked out of social and economic opportunities. I believe the children of today’s Indigenous underclass can climb the staircase of opportunity and enjoy a life better than their parents. This transformation will require a long and determined commitment to ensure these children can build the capabilities to choose lives they have reason to value.
My life’s work in Cape York has been dedicated to finding the methods and mechanisms for individuals and families to move from passive welfare dependency and disempowerment to agency, responsibility and empowerment. That is why I advocate for a federal job guarantee.
The problem is we have locked out the lowest strata of our society from the opportunities of Australian life. We have come to accept that they will be denied a fundamental right of their citizenship, to have a job and earn a living wage.
Reflect on the obscenity: the most disadvantaged prop up the macroeconomic system to manage wages and inflation: 3 to 5 per cent of the country enable the 95 per cent to enjoy the advantages and prosperity that are the right of all Australians but not available to all.
The Australian structure of economic prosperity and wellbeing sits on top of a buffer of permanent unemployment representing the bodies of the underclass and their children. This is ground zero of the deaths of despair: suicide, addiction, violence and chronic disease. If we truly fix unemployment, we will be well on the way to closing the gap.
But this requires confronting the reality of the public policy choices that are made by the Treasury and the Reserve Bank for the underclass. These decisions could not have be more careless of the impact on Australia’s poorest citizens, of whom Indigenous Australians remain the most downtrodden.
Economist William Mitchell’s proposal for a federal Job Guarantee would provide minimum wage jobs to everyone who need a job, with government acting as employer of last resort. Through the minimum wage inflation could be managed via an employment buffer rather than an unemployment buffer.
If we are going to close the gap, not only between Indigenous and non-Indigenous people but between the unemployed and the rest of Australia, we must ensure there are enough jobs for all those able to work and who want work.
Mitchell’s Job Guarantee would pay the minimum wage, superannuation contributions and leave entitlements. It would bring the dignity of work to every Australian including the disabled, mentally ill and extremely disadvantaged. And it is a completely superior alternative to passive welfare.
The first benefit of the Job Guarantee is that it lifts the income of the poorest Australians to a decent level. Only those who have never lived on the dole can say that people can live on the dole.
The second benefit of the Job Guarantee is that it will give people all of the intangible personal, psychological and social benefits, that come with work. Only those accustomed to the opportunity of work can afford the luxury of the idea that work is not foundational to the wellbeing of all humans. The best answer to welfare dependency is a guaranteed job.
With Mitchell’s Job Guarantee, we have the means to achieve full employment without increasing inflation. This is the third benefit. It works as an automatic stabiliser in the economy: the pool of workers in the scheme rises and falls with the economic cycle. In a downturn the pool grows and when the labour market picks up the pool shrinks close to zero.
A Job Guarantee will heal these individuals and families and their communities. It is the best solution to the despair and mental un-wellbeing that engulfs our saddest fellow Australians. It will lift them out of poverty and deprivation instantly. It will provide solace and purpose as well as hope, responsibility and self-esteem. It will provide a new logic and trajectory for children to have better chances. This is what we must do to change the game for the Bottom Million, and to close the gap between Indigenous and non-Indigenous Australians. And a First Voice will be crucial in co-designing the locally tailored jobs that will facilitate economic development that is the right of every Indigenous community in the country.
Let us hold this referendum. Let us create a Voice that will enable Indigenous people to take back responsibility for our future, supported by the wider society but always us making the changes we want to see for our people. And let’s work to replace guaranteed welfare with guaranteed work, and to end the scourge of welfare dependency and its twin – poverty – once and for all.