Watch Australia Institute's Richard Denniss deliver his keynote speech at the QCOSS 2018 Conference Movement for Change. He discusses econobabble and why we should ask politicians to speak in plain English.
Look, thank you very much not just for inviting me, that’s the small thing. Let me thank you for the important work that you and your organisations do.
Unfortunately, in Australia when we talk about the economy, and I’ll unpack that for you a bit later, when we talk about the economy, pretty much every time you see a politician talking about the economy they're very keen to pop a hard hat on themselves maybe a bit of high vis these days.
But of course, your sector, your sector contributes far more to the Australian economy creates far, far more jobs than the mining industry.
Well don’t cheer me, cheer the Australian Bureau of Statistics, this is what we call true ok, this is a fact.
But of course, politicians don’t cue up to stand in front of the services that employs so many people that you work in. They don't queue up to talk about, be photographed in front of homelessness shelters, aged care centres, youth outreach centres.
Because they're not real jobs are they? I don't understand what that means I'm just trying to go with the vibe of Australian public debate.
Real jobs is typically blokes making something, sounds about right? Now that's the real jobs.
You know saving people's lives me, meh. Supporting people in times of crisis.
Making some bit of crap that gets thrown out and never used, heroes.
Now don't get me wrong someone made this lectern and someone made this microphone and someone made the chairs.
But you know what the people that educated the people that made that stuff perform just as important function as the people that make the stuff.
So, if teaching people how to make physical stuff matters then services matter.
But we've got this bizarre political demarcation where we put some jobs up on a pedestal.
And we talk about the service sector and god forbid the not-for-profit service sector as somehow being somehow being leaners rather than lifters.
We don't talk about the banking system as being the parasites sucking the blood out of the economy, well we should because the economists would agree with you.
Okay the, the, financial services sector, I don't even know what services provides but I know that it's grown and grown and grown in Australia that's not the case in other countries.
We've just got this enormous financial sector that pays enormous wages and politicians very quick genuflect before them.
But when a bunch of people get together to perform essential services and do so at low cost because they don't have to post a dividend cheque to someone.
We talk about your sector as if it's not not central to the creation of jobs and central to the creation of welfare in our country
Now, I don't know whose fault this is, I don't know who it is in this room that lacks the confidence to speak out and call horseshit as Jane so politely called it.
But collectively you guys have got a great story to tell, not just about helping people which you do, but you guys contribute an enormous amount to the economy, that we hear so much about.
So I'll come back to that, but that's my challenge to you guys is to not see yourself as apart from the economy but to see yourselves in the centre of it, not just as an enormous creator of jobs.
More people work for Anglicare and the Uniting Care than work in coal mining. More people work for Anglicare and Uniting Care than work in coal mining in Australia.
I’m not making this up, these are things called facts and they're freely available.
But the story that you guys tell is not that story and I think that's one of the stories that you can tell, not the only one.
So the good news is sitting here today in one of the richest countries in the world at the richest point in world history.
We've had 27 years of continuous economic growth, politicians love to brag about 27 years of economic growth.
Indeed they tell you that we should vote for them because they and they alone have the key to creating more economic growth in the future.
Well if 27 years of economic growth hasn't made us rich enough to provide high-quality services to people in need, high quality aged care services the people regardless of their income, high quality disability support services, rape and domestic violence services, if after 27 years we're not rich enough to do that, why do you think another couple of years of economic growth is gonna do it?
When I go on a long drive with my kids they sit in the back saying are we there yet, that's if I don't let them play with their iPads, if they play with their iPads they don’t care how long we drive.
But 27 years of continuous economic growth the politicians state and federal love to brag about, well are we there yet? Or do we need another 27 years of economic growth before we can treat people in need with dignity. Do I need another 27 years of economic growth before your sector can, can, pay people the kind of wages they deserve.
Because if people want to brag about 27 years of economic growth the question is well what's it delivered, mate?
Which bit of the economy is grown for 27 years because my bit hasn’t.
Or if economic growth is the answer, if economic growth is going to solve our problems then have much more of it do we need?
How much more economic growth do we need before people in need of crisis housing can find it?
Because I have no idea because I don't think the question is got anything to do with economics and I don’t think the questions got anything to do with economic growth.
I think it's got everything to do with what kind of society we and the rest of the people in Australia are prioritising.
Last year the federal government spent four hundred and sixty billion dollars on stuff.
Four hundred and sixty thousand million dollars on stuff, that's a lot of money.
But we can't afford, we’re told, to do a whole bunch of things.
Now I know you guys like to tell positive stories that's great, we should tell positive stories about how to fix things. But we also need to confront people with the reality of Australia today.
I hate telling stories like this but here's an important one. A woman called Shirley Carter died and in New South Wales 18 months ago. She had dementia she was in an aged care home.
She died with maggots in her mouth. Shirley Carter died the day after her daughter found maggots in the mouth and an aged care centre. Remember when I said we are one of the richest countries in the world. This happens in Australia.
We’ve just had a Royal Commission, sorry a parliamentary inquiry into abuse in aged care in South Australia, it wasn't pretty.
And you know all the people falling through a whole bunch of cracks that I'm not even aware of.
Richest country in the world apparently we cannot afford to fix problems like that well can’t afford is a nice little bit of econobabble.
Let me decode can’t afford for you. What can't afford means next time you hear a politician say can't afford in your head just substitute the following words don't want to. It's not complicated. When you hear a politician say we can't afford to do something just think hang on, richest country in the world, richest point in world history, 27 years of economic growth can't afford to spend more money on important services.
About to spend, desperate to spend 80 billion dollars on tax cuts.
Alright, let's, let's now play the game. Government can afford 80 billion dollars on tax cuts government can't afford to spend more on your
sector hmm if that's confusing substitute want to and don't want to we've can't afford and can't afford.
Government wants to spend 80 billion dollars on corporate tax cuts.
Government doesn't want to spend more money on your sector.
Confronting when you put it that way isn't it?
That's why they talk about economics all the time, that's why they talk about the budget, that's why they talk about the markets, that's why they talk about the debt, that's why they talk about everything except what they want to do and what they don't want to do.
Now, it's okay to lie. I lie to my kids all the time. I know that you don’t oyur better people than me. But faced with the choice between negotiating with my children or lying to them I often take lying. So when my kids say dad can we go Disneyland this Christmas I say oh great idea son, can’t afford to.
Now I'm comfortably middle class if I wanted to blow the cash actually we could but I'd rather rot in hell.
So rather than confront my children with the simple truth that I can think of, of other things that I think would be a better thing to do with the cost of flying overseas and going to Disneyland.
Rather than speak truth to lack of power I just lie. But it's okay because my family's not a democracy. My kids didn't elect me dad and I don’t have to tell them how much I earn and what I rather spend the money on.
But you live in a democracy and your elected representatives are telling you but they can't afford to do a whole bunch of things, your elected representatives of telling your employees, your customers, your communities, that they quote can't afford to do things.
When what they mean to say is we don’t want to. Now that’s okay it’s a democracy alright. 24 million people aren't going to agree on everything. 24 million people aren’t going to agree that your priority is their priority.
24 million people might be determined to give the big banks a tax cut and spend less on your sector, that's possible.
There's nothing right or wrong about a democracy, we're entitled to our views.
But when your elected representatives tell you that one of those courses of action is essential and the other is unaffordable you're being lied to.
There’s nothing complicated about this, it's they make it seem complicated that's where the econobabble comes in. They make it seem complicated for the very reason that they don’t want to have an honest democratic conversation about people's priorities.
They don't want you or the communities you work in or you know the communities that QCOSS have just by having consulted, they don't want your communities to have a sense of what the options are what the choices are.
Again don't, don't, trust democracy to look after you when people want to do some crazy stuff.
But to suggest that we can't do something rather than don't want to do something I think eats away not just that your sector, but I think it eats away at our democracy.
People begin to think well what's the point of government if it can't do anything. Well it can do a whole bunch of things. Which is currently choosing not to do them.
So let's come back to that four hundred and sixty billion dollars that the federal government spent last year. okay if they want to spend more money on your services there's a hint in the budget it would be an announcement that they wanted to spend more money on your services but they didn't.
They announced new tax cuts, and that's okay Australia, is as I said one of the richest countries in the world we can afford to do anything we want but we can't afford to do everything we want. We have to make choices we have to prioritize things.
So when a government prioritises tax cuts and says well we'd like to collect a lot less revenue and then it turns to you and says we can't afford to spend more on your services. Can't afford is a meaningless concept.
We chose to spend money on tax cuts we now don't have as much revenue as we used to and that means I'm choosing to spend less on your sector that means I'm choosing not to give you the new funding you said you wanted
Again there's nothing wrong with that the only thing that's wrong with that it's the lies that have been used to justify those choices.
Now how should we as a society make these choices? Well you know I think it's quite simple you start the kind of conversations QCOSS and you are already involved in.
We inform people about the choices we have, we inform people about the options we have and then we have a public debate about them and then people vote. It’s not perfect.
But we're told in Australia, that we can't do anything, we can't do anything, we'll be the scariest of neo-liberal words will become uncompetitive. Uncompetitive. Australians apparently are competitive people and we hate being told will be uncompetitive.
But I assure you as an economist I don't even know what that means.
No, I'm serious I don't know what it means and most of the politicians talking about it and most of the business leaders they think they know what they means but you know I'll challenge you a bit on this in a minute.
The point is that when people talk to you about can't afford or uncompetitive or start raving on about marginal tax rates and incentive effects, excuse me, all of the econobabble that's used to kind of take up all the room in our public debate, room that should be full of conversations about options alternatives and consequences, whenever that a kind of econobabble is being used, what it's actually doing is silencing most people.
It's deliberately designed to keep non-Economist's and non self-important business people out of the debate.
I'll give you an example, the Catholic Church used to preach to people in Latin. most of the people in the audience didn't speak Latin.
It’s not a new idea for powerful people to stand up on a platform and speak at people in a language they don't understand it's a very old trick and it works.
But only works when people are actually whatever lacking in confidence afraid bored fatigued. But it only works when peopleare actually unwilling to actually question. To demand that the people standing on the platform speak in the language they speak.
So keep in mind that 99% of the population has never studied economics.
Let's do a little straw poll, put up your hand if you studied economics. Oh, over-represented room.
That’s alright, put up your hand if you haven’t studied economics. Look hold them up if you didn’t study economics. Now look around people, look around.
This is important, so very good so you can put them down.
So if I was a non-economist politician and this room was full of non- economist, non-economist voters why would I ever speak in ecobabble?
Why would I ever stand up here and rabbit on in terms and language you didn't understand? It's only two options, one I understand the econobabble and I know you've don’t and I'm trying to keep you out of the conversation. Or two, I don't understand it either but I'm getting away with it.
Now if I do understand it if I can decode my own jargon and you ask me politely say, hey Richard I don’t understand a word you just said. Can you say it again in plain English? If I understand it then sure I can say it in plain English what would my apologies for using jargon I shouldn't use plain English.
But if I can’t or I won’t, what do you think that means? It's not an
accident that our politicians, our business leaders, our people who like things the way they are go to so much trouble around the Democratic preferences up in all this economic language.
They don't want you to see that you have options they don't want you to see that you have choices.
Give you a specific example in Australia for decades we've been told that if we don't cut wages and we don't cut taxes will become uncompetitive.
And if we go we become uncompetitive all the jobs will go offshore. So if you're calling for more taxes to fund higher quality health and aged care services, according to Australian public debate, you're an evil job-destroying idiot, who doesn't understand economics.
Okay, the hardheads know that we have to cut taxes so we can compete with China. And the woolly, the woolly headed soft-hearted people, not you, the person sitting next to you. They all think there's this magic pudding and we can just increase taxes.
But that might feel good, that might feel good to increase taxes and spend more money so that people like Shirley Carter don't die. That might feel good but you don't understand, you don't understand the consequences, you don't understand that fair wages for people in the service sector, or taxes to fund our quality services, you don't understand that that'll mean all the jobs go overseas.
And then that unemployment will be your fault, you'll have made people poor. Well that's the argument, isn't it? That's all they're really saying.
And if you demand a country that provides the high-quality services that we had 20 years ago, if you want that back you will be responsible for unemployment.
Well if that was true, if it was true that countries that didn't cut taxes and didn't cut wages lost all their jobs if that was true that wouldn't just apply in Australia would it. There are 194 countries in the world.
So if, and it’s a big if, but if we actually gave a shit about any of this stuff and by we I mean you know the people that stand up on platforms talking about it, they might do a little research, test with their gut instinct that the way to help the poor is to cut their wages.
Sounds ridiculous when you say it like that isn't it? If we cut wages we can help poor people.
Just think about that but they could get away with it in Australia. But if that was true then it must be true everywhere and every country that doesn't have low wages and low must be losing all the jobs.
So I did an experiment once I got on a plane then I went to this place called Sweden. Has anyone heard of Sweden? Anyone else been, can anyone confirm the existence of Sweden. No seriously, this is important, yeah, we can win this argument maybe if Sweden exists.
So Sweden is what we call a high wage, high tax country, yeah, high wage, high tax, so it must be very, very uncompetitive yeah? Has anyone ever see a Volvo?
Do Volvo exist or are they a left-wing conspiracy? No seriously, have you seen a Volvo has anyone been to IKEA. Right so let's be clear we know there are countries that have higher wages than us and we know they make stuff and sell it to other countries.
We know there are countries with higher taxes than us and we know they still have very high quality of life, in fact the highest quality of life in the world. Not just Sweden, Norway, Denmark, those Scandinavian countries, there's uncompetitive countries exist, they make stuff and they export it.
And you know what, people in China buy Volvos. How weirds that? And they buy, has anyone heard of Germany? People in China buy cars made in high way, high tax countries like Germany. In fact, they pay a lot of money for it.
How can this be? Well, there’s a simple answer everything you've heard is shit. I’m not kidding, it's just made-up nonsense.
But when you subject a population to decades of this stuff people get bored they get drum down, so they just kind of give up and tune out.
If the only way to attract investment into Australia was to cut our tax rates, if the only way to attract investment was to lower tax our rates, that well that would be odd, but that's theoretically possible.
But you’ve heard of China right? China's got lower taxes than us let's call that fact one. Then over here fact two - a lot of people on the right of Australia are worried that China invests too much in Australia.
Now let's introduce fact one, China has low taxes to fact two – china invests a lot in Australia. Why would the low tax country invest in a high tax country? If tax was the only thing that mattered? It’s just nonsense.
And by the way Australian companies invest in other countries often that have higher taxes than Australia. The companies in the business Council of Australia the ones saying we have to cut taxes to make Australian competitive those same companies invest in countries with higher taxes than Australia.
I'm sorry if this seems confusing and ridiculous it's because these people are confusing and ridiculous.
Yes it just doesn't make any sense but it doesn't have to make any sense when it's spoken in Latin. It doesn't have to make any sense when it's just projected at you in econobabble about markets reacted angrily today at suggestions that than capitalisation rules might be modified. Yeah your bored already aren’t you but that's the point.
Because if we decode markets reacted angrily, so substitute rich people who own shares reacted angrily, that’s what markets reacted angrily means.
How can a market react? Think about that, market reacted. Interesting. Anyone ever been to a fish market or fruit and vegetable market. Okay, let's think about a fruit vegetable market, I don't want it's like in Brisbane. Thinking a big shed, yeah you got fruit markets up here yeah a big shed? People selling fruit? People buying fruit? Complicated? So we’ve got a fruit market, how do you think a fruit market would react to something? What would that look like if the fruit market reacted? I don’t know I’m asking you, I’ve got no idea.
It’s a bit hard for a building to react isn't it? So, if we understand that fruit markets can't really react to things, maybe people that sell fruit reacted, I get that. But people who sell fruit reacted angrily at suggestions they should pay tax, fair enough. I get that. Customersreacted angrily to suggestions that they should pay more for bananas. I get the people in a market might react to something. But the markets reacted. Well, when you hear that the share market reacted angrily, it didn’t, it’s a building. But people who reacted angrily are the people who own a lot of shares.
Now if we increase taxes on, on share transfers and you were in the business of buying and selling shares, I don't blame you for reacting angrily to that. But can you see how important it is if we wanted to co-op democratic debate but not use words like people who owned a lot of shares reacted angrily as most people think that's not them okay when we think the markets reacted angrily. Because a lot of people think that’s not me, don’t care.
When we say the markets reacted angrily that’s a far more powerful statement to make especially when we combine it with the markets demand attack cutting taxes. The markets want to cut the tax, do they? Markets do? No, some people do but in a democracy they'd rather hide themselves. They’d rather suggest some existential falls.
Greek gods reacted angrily and throw lightning bolts at a popular that wouldn't listen. Stock market reacted and really when it was suggested rich people actually makes an effing tax.
I’m glad you're laughing because they're getting away with this stuff. So to conclude as it said at the beginning we are one of the richest countries in the world, living at the richest point in world history. We spent four hundred, in a federal government alone, we spent four hundred and sixty billion dollars on stuff last year.
Pick up the papers today you can read that we're over paying how much we're going to spend on, on frigates we're going to spend more than we need we can spend. Millions of dollars subsidising new coal mines if we want to. Alright the alleged free marketeers in the National Party want to nationalise the electricity system, because they don't trust markets anymore.
Alright the people that were elected saying they wanted to tackle a budget emergency, even now they will introduce enormous tax cuts even though the budget deficit is bigger than when they said we had a budget emergency.
These people are just talking horseshit. If you thought we had a budget emergency in 2013 and it didn't. It’s thought we had a budget emergency in 2013, if you're worried about our level of dead 2013 well it's far bigger now than it was then.
Don't worry about it, we're gonna cut taxes for big business. And it will cost ninety billion dollars but we think it'll help. How much? We don’t know it’s just the vibe, it feels like the right thing to do.
Now this is important because when you guys go and say I want to spend a million bucks on preventative health, they prove, prove that if I spend a million bucks on preventative health, I'll get more than a million bucks back, in the next couple of years.
When you ask for money to provide more of an important service, they tell you that there's no money. Or they say you have to do a lot of work to prove to us that the benefits will far exceed the costs
Yet when we say can we see the evidence that eighty billion dollars worth for tax cuts is the best way to create jobs and growth they say of course it is, divine.
I’m not kidding, that's it, there's no proof there's been no cost-benefit analysis that compares spending eighty billion dollars on tax cuts to spending eighty billion dollars investing in your sector or comparing spending eighty billion dollars building new infrastructure.
Here’s a tip when you spend eighty billion dollars on anything you'll create some jobs. that's going to happen the question is of all the ways to create some jobs what's the best way?
Well what an economist might advise you that the best way to create jobs would be to spend money on services that people want that are what we economist call, a bit of econobabble here, labour intensive.
Okay some industries create a lot more jobs per million dollars spent than others. It’s all top secret it’s buried on something called the Australian Bureau of Statistics website.
Anyone want to guess what the most labour-intensive sector in the Australian economy is? Health and community services. You spend a million bucks on health and community services you will create around 13 direct jobs, you spend a million bucks on mining you create about two.
I’m not making this up this is the Australian Bureau of Statistics. So when people say we have give a billion dollars to the Adani Mine and create some jobs. Well yeah create a billion on anything and you’ll create some jobs. The question is are you creating the kind of jobs we need more of and of all the ways to create jobs is that a good way?
If we went and poured concrete in the middle of the desert, we’d create some jobs. Not hard to create jobs. The hard part is creating the kind of jobs that the community needs.
Now most people say they want better health, most people say they want better education, most people think they want their parents in better aged care homes.
It’s not an unpopular suggestion saying that we should spend more money improving services and it's not an uncontroversial economic statement to suggest that spending more money on other services or create far more jobs. far more jobs than spending the same amount of public money subsidising a coal mine.
It’s not complicated, but for reasons that I struggle to understand we've let people get away with this complete nonsense for decades.
So to conclude if and to begin but if Australia wanted to have the kind of community, the kind of public services, that can be found in other countries with lower incomes than ours we could.
There's nothing stopping us. Sweden’s not a theory, Scandinavia is not an abstract concept. Scandinavia is collectively about the size of Australia's population, smaller landmass. Scandinavians decided yeah they liked the idea of paying a bit more tax having like quality public services.
They haven't gone broke, they haven't all moved to China, sitting up there with their cute accents, making their Volvos, selling us their IKEA crap. And having the highest quality of life in the world.
So we think it's a kind of trick with all this econobabble is to tell us that we don't have any choices. And it's really the most disempowering part of it, it’s leave it to the experts but if you want to dabble in it you'll wreck everything and you'll cause unemployment. Well that's nonsense but it's very powerful nonsense.
My advice to you is the easiest way to deal with nonsense is just call it out. Just ask simple questions, demand simple answers, and laugh at people that try to speak to you in language that you don’t.
Because if they do not make themselves clear they're either bullshitting you or they're bullshitting themselves. Thank you, very much.