Paul Keat­ing says com­pany tax cut is no holy grail and growth must be in­clu­sive

The Guardian Australia - - News - Gareth Hutchens

Paul Keat­ing has slammed Aus­tralia’s big busi­ness lobby groups for be­ing ob­sessed with tax cuts and lack­ing the imag­i­na­tion to pre­vent the econ­omy slip­ping back­wards.

He has also taken aim at “con­ser­va­tive Aus­tralia”, say­ing it doesn’t un­der­stand that eco­nomic growth needs to be about “in­clu­sion and jus­tice” so ev­ery­one shares in the spoils of ris­ing na­tional in­come.

“We can see in Amer­ica to­day what the loss of these bal­ances means, watch­ing the ex­tremes of in­come and wealth rip at the fab­ric of Amer­i­can so­ci­ety,” Keat­ing said.

In a for­ward-look­ing speech about the unique prob­lems fac­ing Aus­tralia, Keat­ing told the an­nual din­ner for the Com­mit­tee for Eco­nomic Devel­op­ment of Aus­tralia on Tues­day that the coun­try’s po­lit­i­cal and busi­ness lead­ers were fail­ing vot­ers.

He said they were fail­ing to keep up with the changes wrought by glob­al­i­sa­tion, and the econ­omy was slip­ping back­wards as a con­se­quence.

He crit­i­cised the pre­vail­ing nos­tal­gia for the re­form pe­riod of the 1980s and 1990s, say­ing it would not help Aus­tralia get through its cur­rent strug­gles.

He said glob­al­i­sa­tion and digi­ti­sa­tion pre­sented huge op­por­tu­ni­ties for Aus­tralia but the coun­try needed to grasp their ex­plo­sive po­ten­tial.

He said busi­ness and po­lit­i­cal lead­ers needed to re­alise that the use of big data and ar­ti­fi­cial in­tel­li­gence, if har­nessed prop­erly, promised to un­leash a wave of pro­duc­tiv­ity if ap­plied to health de­liv­ery, ed­u­ca­tion, road and trans­port sys­tems, and the gen­eral op­er­abil­ity of cities.

“These are the re­form hori­zons we should be con­cen­trat­ing on, and not the dross handed down from the Busi­ness Coun­cil or the Fi­nan­cial Re­view – with the holy grail sim­ply ar­riv­ing with a com­pany tax cut,” he said.

“Or whing­ing from the Aus­tralian Cham­ber of Com­merce and In­dus­try ... about penalty rates, when the re­al­ity of static wages growth stares us in the face.”

Keat­ing also warned that the ques­tion of in­clu­sive growth would “loom larger” in com­ing decades thanks to the con­tin­u­ing im­pacts of glob­al­i­sa­tion and tech­no­log­i­cal dis­rup­tion.

He said Aus­tralia must pay spe­cial at­ten­tion to the needs of the less well-off as the pace of tech­no­log­i­cal change quick­ens, be­cause labour mar­kets will con­tinue to change quickly in the face of in­ter­na­tional com­pe­ti­tion.

“Large per­cent­ages of the pop­u­la­tion have been able to en­joy the ben­e­fits of trade and open com­pe­ti­tion, while oth­ers have suf­fered the brunt of the con­comi­tant ad­just­ments,” he said.

“This ef­fect, these trends, are likely to am­plify them­selves as the net­work econ­omy moves large chunks of com­merce into au­to­ma­tion un­der the strategem of ar­ti­fi­cial in­tel­li­gence.

“The pro­duc­tiv­ity surges with losses in em­ploy­ment have to mean that man­age­ment of the econ­omy has to fo­cus heav­ily on in­clu­sion. Large bod­ies of peo­ple can­not be left out or be left be­hind.”

Keat­ing also de­fended his eco­nomic legacy in the face of crit­i­cism from peo­ple such as Sally McManus, the Aus­tralian Coun­cil of Trade Unions sec­re­tary, who says the Hawke and Keat­ing era ush­ered in the age of ne­olib­er­al­ism.

Keat­ing said “the Hawke-Keat­ing changes, while mar­ket-ori­ented, dif­fer­en­ti­ated them­selves from ne­olib­er­al­ism and the plain re­ac­tion­ism of the Howards of this world by the com­mit­ment to in­clu­sion”.

“The gov­ern­ment at the time was com­mit­ted to mar­ket re­forms, but up­per­most in its mind were the eco­nomic and so­cial im­per­a­tives of in­clu­sion and jus­tice,” he said.

“We can see in Amer­ica to­day what the loss of these bal­ances means, watch­ing the ex­tremes of in­come and wealth rip at the fab­ric of Amer­i­can so­ci­ety.

“And we can see, now time has passed, how su­pe­rior Aus­tralia’s model un­der La­bor has been to that of the United States, or for that mat­ter, most com­pa­ra­ble in­dus­trial coun­tries.

“This ques­tion of in­clu­sive growth re­mains large and will loom larger be­cause of the con­tin­u­ing im­pacts of glob­al­i­sa­tion and tech­no­log­i­cal dis­rup­tion.”

Paul Keat­ing warns not to fo­cus on the ‘dross handed down from the Busi­ness Coun­cil or the Fi­nan­cial Re­view’. Pho­to­graph: David Moir/AAP

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.