The more you earn, the more you burn

Work is central to any society. Many, certainly in developed nations, question the validity of the notion of work. After all, don’t we dream of an island life, cocktail in hand, footloose and fancy free? How would we fund such a lavish occasion without first having earned the money to pay for it? Work has evolved throughout centuries from forming the basis of an agrarian society to a capitalist one. With a transition from the production of necessities consumed by oneself or production of surplus, consumed by others. Through observing a work deficit, welfare States a changing labour force and a capitalist economy we begin to unravel the complexities of the role of work in modern society.


A work deficit
 

With the global economy at an all time low, families across the world suffered incredibly during the Great Depression of the 1930’s. With people being laid off and not enough work, people’s living standards dropped dramatically with many unable to afford basic necessities. I recall the story of my 95-year-old grandfather, who starving at the time, was caught stealing a few potatoes and running across the rail tracks. Juxtaposed to my current situation where most days include a lavish meal with friends at a trendy establishment. In the developed world unemployment is relatively low with most members of society able to participate actively in the workforce. This in turn increases living standards and the ability to afford to maintain material subsistence.

In developing countries many jump at the opportunity to undertake any form of paid labour (hence increased sex work and slavery), while work opportunities are rare. In Australia there are increasing numbers of internships being taken by students in order to get ahead and get their first break. The sad reality is that many of the popular employers harvesting this unpaid labour can afford it. When you think of slicing a tiny percentage from one person’s bonus that could probably pay an intern for a year it begs the question, are internships fair? How do we as a collective balance too much work with not enough work? These examples illustrate the importance of a stable economy in not only producing excess but simply creating paid employment for people to maintain material subsistence.  


Support from the State

Welfare States across the world are characterised by the measures with which any Government allocates taxes in order to support its citizens. In Sweden we see a society safeguarded on many levels by the lenient tax system affording many Swedes reasonably priced childcare, sickness benefits and retirement fund models. In contrast, Australia is a ‘wage earner welfare state’ based on the stale concept of a nuclear family, with male breadwinner financially supporting his family while women typically care for the home and family. Welfare is distributed when citizens of a society cannot work. Possibly due to illness, misfortune, trouble securing work, retirement or incentives to care for family members and reduce time spent working.

While the age-old debate over ‘lifters vs. learners’ continues, it should be noted that work benefits citizens beyond the financial return. Work brings routine, discipline, respect and drives self-actualisation through interacting with various people and situations outside your normal lifestyle. The concept of valuing what you spend if you have earned it is too beneficial. Studies have shown that those who are employed are less likely to engage in anti social behaviour. This can range from unlawful activity (crime, drugs) to unhealthy pastimes that can lead to a deterioration in healthy both physical and mental, thus causing a raft of direct public health costs. Of course it can be argued that overworking is detrimental to health, on the whole, not working where you are not incapacitated, is more detrimental.


The changing labour force

The reality in the modern world is that women no longer need to rely on men to financially support them, divorce is on the rise and there are same sex marriages, single mothers and even single fathers. It is estimated women will acquire considerably less superannuation than men due to the role they take on as caregiver when they bear children. Is all of the cooking, cleaning, caring for children and potentially partners factored by the State? After all, we do still require a labour force to be produced in order to ensure labour productivity and a stable economy.

Due to WWII and the birth of the baby boomers our population and resources will be skewed toward retirees over the next few years. It will be important for retirees to have access to pensions and sufficient superannuation funds. This a policy masterstroke by the Labour Government ensuring that citizens are forced to save a portion of their salary across their lifetime in order to reduce the pressure on the welfare system come retirement. Technology has certainly created a shift from the industrial economy to a service economy. While many complain that they have lost their jobs e.g. car manufacturers, while being replaced by machines it could be argued many jobs have been created, particularly in the technology sector. If you can’t stop technological progress it appeals the solution is to embrace it.  


The more you earn, the more you burn
 

Its human nature to never be satisfied. I have personally experienced the same ability to enjoy life whether being paid a nominal fee or a competitive full time salary. You seem to find more things you don’t need to purchase with a ‘surplus’. Financial speculation can drastically increase income based on speculation and little labour productivity, which becomes detrimental to income equality. Consider the wealthiest few people earning more than millions of Australians. So is this race to enjoy a high salary really worth it after all? I am another living experiment of work life balance. After having worked many a full time role I fell into a four day work week and boy has it been refreshing. For what has been largely an incremental decrease in salary I find myself able to do the things we as a society enjoy, such as caring for my grandfather, enjoying the fresh air and achieving self-actualisation through more reading and writing.  


Can’t live with it, can’t live without it…

So it would appear that work is a valuable component of any society. Whether it affects social cohesion through a work deficit as seen throughout the Great Depression or whether citizens need to rely on the Welfare state to support material subsistence. It has been proven that work ismore bountiful than simply being a mechanism to earn a living. It unleashes potential, brings order, routine and discipline and can ensure we cherish time off and don’t take our freedom for granted. This of course not always the case when corporations are overworking people. We see a changing role in the labour force that includes the changing role of women, an ageing population and the rise in technology. Respective policies such as Australia’s wage earner welfare state largely founded on the basis of the nuclear family must be revitalised to reflect the changing nature of the labour force.

We must support policy instruments such as superannuation to eventually support retirement. Finally we must adapt and embrace with the birth of new technologies and their effects on the labour force and work. Society should analyse the effects of a capitalist ideal and consider the collectivist notion that includes spending more time caring for friends and family (and oneself) and less time supporting the pursuit of profit. Working is ideal to ensure a stable standard of living and of the formulation of oneself, however, it’s when the balance begins to erode the sense of self and supporting others that we should really question our approach to work.

What goes around comes around

After much debate over the latest ‘work for the dole’ scheme and attending Nobel Laureate Prof. Joseph Stiglitz’s ‘Income Inequality’ lecture I thought it timely to revisit the concept of lifting vs. leaning. I touched on this in an earlier post.

Anti-narcissism

For right winged liberal capitalists, time on earth is typically measured by a key metric, money. How much can I make, how fast can I make it and how can I use it to improve my living standards.

Consider a collectivist notion of thinking about other people. Perhaps supporting your partner, family or children. Statistics prove that we are ALL going to need to rely on welfare at some point in our lives. Whether we become ill, need time off work to grieve or grow old – welfare is a social functioning instrument that can be described perfectly by the old saying ‘what goes around comes around’.

The launch of Superannuation by Keating in 1992 was a masterstroke by the Labor Government.  Mandatory savings that can be accessed upon retirement.  If only we all saved a little extra that could be accessed when we needed time off work , were grieving, had fallen ill etc too? I know I used a huge chunk of savings when I was sick for while.  Then we really wouldn’t need welfare!

Work, more than just an income

After studying ‘Work and employment’ copious amounts of research proved that work fuels social cohesion and reduces anti-social behaviour. Having routine, discipline, respecting authority, exercising the mind, having daily contact with a variety of different people all maintain a level of emotional health otherwise unattainable from choosing your own adventure each day.

The recent budget delivery proved labour productivity was key to maintaining our high living standards in Australia. Yes from an economic perspective, but from a social perspective it also is keeping people off the streets and mentally stimulated. Most of the homeless people you will meet have low emotional wellbeing. It’s all too often forgotten that such a huge component of our makeup as people is mental, as well as physical.

I support Tony Abbott’s new work for the dole scheme and believe it is a strategic policy making initiative not aimed at reducing the amount of leaners to reduce the tax burden but also to improve their overall wellbeing. Work is VIP beyond the fact that you earn money and pay taxes to support the community!

Quotation-Friedrich-Nietzsche-dance-day-inspirational-Meetville-Quotes-231250

Breaking the cycle

Statistics show that intergenerational poverty is rife. Many perpetuate the characteristics of the people and environments they grow up in and it can be hard to break the cycle. University in Australia is currently accessible by most thanks to a policy that ensures repayments are only made once you earn a reasonable salary. However, statistics have shown that those accepted into university have typically had a stable upbringing and are financially secure and therefore access is not representative of the diverse socio cultural make up of Australia.

Growing up in whatever environment you may find yourself in naturally causes a bias. I grew up very privileged and before I was educated enough in the area of sociology, assumed that there were those who chose to work hard to make a living and those who lived off those who worked hard. I honestly feel like a spoiled brat when I venture out to some areas of Sydney. There are people trying to scramble together money for bread and milk and I’m over here planning my next cocktail night and trip to NYC. And yet here many of us are wishing we could trade places? Working is more appealing than relying on welfare after all…

So how can we all run the same race?

Society and its diverse backgrounds need to be better represented at a policy making level via Politicians and Government representatives. If we embody the true values of democracy for example, we would see politicians in Australia encompassing a variety of ages, genders, cultures and backgrounds. I see a trend toward middle aged, caucasian middle class male politicians.

Did you know that 1% of the population in the US earn 25% of the total income? Financial speculation and making money without the production and consumption of goods and services also takes its toll on a well oiled economy. Perhaps taxes may increase for this type of income ?

Government’s can also focus their efforts on collecting the vast array of unpaid taxes, before developing new taxes. Think of speeding tickets = fair’s fair! We are only incentivised not to speed to save our own lives and those of others, when we bend the rules we pay. Or fuel taxes, those who consume the most petrol pay the most tax that can then be attributed to supporting investment in roads. Which is one pricey business. Taxing savings and income incentivises people not to save or work… So creative policymaking comes into play.

Social functioning spend

Or “the budget” as most of us may be familiar with.  I touched on this in an earlier post as I have now entered the world of taking an interest in “the budget”. It really isn’t branded appropriately because what the budget aims to do is increase social cohesion, or functioning.  That is, the reduction in anti social behaviour (largely crime related) and increased welfare of citizens.

I was privileged to attend the NSW budget briefing delivered by the NSW treasury secretary and what an inspiring man.  Treasury have a pretty tough job – keeping millions of people happy through maintaining our living standards through effective fiscal planning!  He said if he could summarise the FY15 budget in a sentence, it would be through Ross Gittins’ (SMH economics editor) remark the new Premier ‘Mike Baird is nothing if not game. His first budget as Premier is a model of fiscal rectitude.’.  The >$60b tax payer funded fiscal plan takes us through to a surplus, which is ideal to maintain our strong economy.

Protecting and supporting fellow Australians

The NSW Government has said it will invest heavily in:

  • Child protection “Keeping them safe reform” – which is a sound strategy as a supportive childhood often leads to increased wellbeing as an adult.  Which in turn produces labour that is productive and enhances economic stability therefore leading to increased wellbeing due to sufficient living standards.
  • National Disability Insurance Scheme (NDIS) – ensuring that those who are less able have greater choice as part of their care plans. This scheme also seeks to support carers in their quest to support themselves and others.
  • Home owners grant extension – likely due to promote property ownership which in turn leads to greater labour productivity through motivating citizens to work to pay off their mortgage.  In turn, also creating a more stable lifestyle ensuring adequate housing and a potential profit making asset when sold to downsize upon retirement, or later enter an aged care facility.  The ageing population, as a result of the Baby Boomers post WWII, will put pressure on resource allocation through increased demand for aged care facilities, more health services and increases in welfare / pension distribution and reduced labour productivity.

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Revenue sources

  • Payroll tax reductions – ensuring revenue can be raised from a variety of sources and that low income earners see increased take home pay as the cost of living continues to rise.  In ACT for example, Land Tax is one of the greatest revenue raisers.
  • Asset recycling – will play a large role in heading to surplus by, for example, outsourcing infrastructure projects to international investors.  For example, the $400m Pacific Highway upgrade.
  • Private investment opportunities and partnerships – It’s no secret Australia’s federal treasurer has slashed health funding from 26% of the total budget to just 13%.  However it should be noted that there are greater incentives in place to keep people out of hospital and the health care system.  Another example of state’s increasing revenue bases from outside sources include private investment into the new Northern Beaches hospital to be built.
  • Potential for revisiting older models e.g. use of funds / source of funds.  Fuel excise at 3% goes straight back into maintaining and developing road infrastructure.

The end of the mining boom

One of the stand out components of the NSW budget delivery is the huge impact reduction in demand for Australia’s natural resources that are being mined which has affected Gross National Investment (GNI). This relates to income and subsequently affects expenditure, thus reducing Gross Domestic Product (GDP) i.e. production.

In good hands

In order to maintain a strong economy based on equal parts production (supply) and consumption (demand) we need strong labour productivity.  This in turn will continue to drive Australia’s largely globally envied living standards, ‘the lucky country’ and ‘the Australian way’.

Innovation in the public service is key with bureaucracy and old ways of doing things no longer feasible.  In order to serve the citizens of NSW effectively public servants must embrace change and new, more efficient and innovative ways of creating best practice service delivery and “unleashing talent”.  An example more recently of this has been the roll out of Service NSW branches, a one stop shop for many of your administrative needs e.g. licence, etoll, seniors card.

The NSW treasury secretary ended by saying he sees tax as needing to be fair and efficient and that effective roll out of the forecast budgeted projects requires collaboration, trust and clarity.

My take is that as long as we stay passionate about being educated, work hard, buy a property and stay healthy we will be all good! And for those of us who may be disadvantaged and unable to, those who can will support you.  Any criminals who impede achievement of these ideals will be punished….

I think we are in good hands…

#1stworldproblems

We all have complaints, some of us more than others, but how relative are our woes to the woes of others?  A quick snapshot of recent events aims to put into perspective first world problems.


We will never be royal…

Many Australians recently got up close to the Duke and Duchess of Cambridge on their royal visit to Australia.  Little girls dressed as princesses, little boys wore crowns.  If nothing but a monarchistic PR exercise, a fabulous community engagement tool and effective vehicle for raising awareness about the need for support for terminally ill children and their families.

I recall chatting to fellow female friends about my desire to step out each day, like Kate, in exquisite dresses with her immaculate make up and hair.  A desire no doubt shared with many women around the globe. However, at that moment did I stop to think of what it would really be like to be the Duchess of Cambridge?

Their tour was pre scheduled to the minute with briefings and casts of hundreds from various international and local organisations supporting them, after they had been screened of course.  It seemed tiring just looking at all the people involved in greeting and protecting them!

Your every move captured, including you in your “civilian wear” snuggling up to your husband while he has a beer at the football?  Needless to say no holiday snaps were required as their every second was captured professionally, and shown to everyone globally first.

Imagine the pressure on your family to ensure there was never a scandal. Never a family row, a moment of weakness, a fashion faux pas, a broken business deal, a display of raw emotion. Superhuman expectations perhaps?

Is it really so enticing the thought of having your 9 month old son minded majority of your waking hours by a professional nanny.  I think its fair to say no CV can ever prove how well one of your own will be looked after. Imagine if Prince George grows up with the first person he calls mum his nanny?

The expectation to predominantly bear and care for heirs to the throne is high, what if Kate wanted to be a career woman and provide for her family.  There is still time we can only hope…

 

We will remember them

We then look at preparations for the upcoming Centenary of Anzac in Australia, commemorating moments that have shaped the nation and provided the freedoms we enjoy today.  Gallipoli saw the highest number of Australian casualties in the Great War with the impact far reaching to families and society back home.

Pop WW2

When I asked my 95 year old grandfather about what had been some of the biggest changes Australia had seen over his time, he was quick to respond but slow to elaborate, “Growing up during the war and the life of an army man was hard, you had no choice but to live with it, and I did”.

Would I give my life to fight for the safety and freedom of others? I think we can all agree servicemen and servicewomen past and present deserve our utmost gratitude and support, whether they have fallen or are still standing tall for the rest of us today.

 

Spending our taxes wisely

With federal treasurer Joe Hockey recently announcing the FY15 budget, there has been community uproar at a few cuts in particular, to education and to health.

Have we considered the difficulty of someone in their professional role trying to make the best possible decisions for our democratic State? There are winners and losers in the budget but at the end of the day we all benefit in some way.

Take the forecast $7 Medicare co-payment.  That is the cost of 1 beer at a pub.  1 beer to see a fully qualified medical practitioner for what we can only hope is not a life threatening disease.  While society is finding it difficult to accept this proposal, that $7 doesn’t go into no mans land.  It then fuels the budget in other areas that deliver beneficial outcomes for Australians.

We are a democracy, famous globally for our lifestyle and the Australian way.  A culture largely developed by laws and policies that govern our relatively young country.  We should embrace the work of our elected representatives and leave any cast of doubt for the authorities.

 

Challenge your thinking

In essence, this post serves to remind us to challenge our thinking and explore all of our options.  The next time we wish for something, like royalty, ensure a balanced perspective and whether its as appealing as first thought.

The next time we complain about having to take an exam, speak in public or care for someone instead of a more favoured pass time – think of the sacrifices our forebears and current military personnel make.

And finally, the next time we cast doubt over our politicians and their proposed policies, remember that there is a lot more to each policy than meets the eye. A policy delivered by the media without the policy documents in total is an unfair assumption.  We have publicly elected representatives to aid a functional society,  they won’t always get it right but they can try. After all we certainly don’t get everything right in our own professions.

Former client and terminally ill cancer patient – puts things into perspective

Gross World Product vs. Gross National Happiness

I have always argued that corporations and their pursuit of profit is largely damaging to society socially and environmentally. Particularly in light of the recent community support against sledge dumping in the Great Barrier Reef. However without Mark Zuckerberg’s ingenious corporation Facebook would we indeed have been able to galvanise such support as effectively? These three academics discuss their view on the pursuit of economic growth.

  • Dr Chris Dey, Senior Researcher (Physics) at the University of Sydney believes the world’s fundamental physical limits come before economic limits with economic growth ‘the strongest doctorate in society, more so than religion’.
  • Dr Vandana Shiva is an Indian environmental activist that focuses on ‘Gross National Happiness’ as opposed to ‘Gross World Product’.  Dr Shiva questions the popularity of the term GDP and believes it to be more reflective of ‘an abstract number that can destroy everything that is real that sustains us socially and ecologically and it measures everything except that which makes life worthwhile’. Dr Shiva discusses how debt in India is pushing farmers to commit suicide with ‘annihilation of life the consequence of growth…the multiplication of money to mobilise others and not all’.
  • Durkheim argues that contemporary work societies, otherwise now known as market societies focus on organic forms of solidarity which ‘foster a sense of disconnection and alienation’ associated with higher rates of suicide.

However, when you begin to unravel the complexities of the economy you can deduce that corporations do also increase social capital.  It sounds outlandish I know, even for me…

  • Ross Gittins, Senior Economics Editor for the Sydney Morning Herald discussed how reduced consumption can also reduce employment and this in itself creates a dysfunctional society at a recent Sustainability forum.  Obama asks major corporates in the US to create jobs to curb their unemployment rate.
  • For centuries work has been vital in organising millions of people and minimising the impact of anti-social behaviour.  Unilever alone has created jobs for over 200,000 people worldwide.
  • Through creating favourable policies for transnational corporations Singapore was able to increase real income and employment with an increase in public revenues resulting in increased expenditure on health, housing and education (Hobson & Ramesh 2010).  Singaporeans saw the stable global economy that had been constructed critical to increased social capital and the State was favoured by most (Hobson & Ramesh 2010).
  • Galbraith discusses the positive attributes of consumption with many products enabling good health, happiness, social achievement or improved community standing (Galbraith 1972).  Over 95% of households in the UK, Canada, Indonesia and Vietnam use Unilever products each year (Roach 2005).

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Interestingly, at the recent Sustainability Forum by Collaborate Lab on Collaborative Consumption, Air BNB and Garage Sale Trail propose their sustainable business models around reuse and recycling.   It is evident though that the two Managing Directors of both organisations are happy to use the commercial acumen and sound profit making business models acquired from those corporations with which they condemn!

The World Trade Organisation is responsible for determining the rules governing international trade but is renowned for its ‘free trade committment’ (Stilwell 2012).  The State can impose tighter regulations on the market but often its the State that relies on the market in achieving a fully functioning society.  For example, the NSW Government’s re brand to ‘NSW Now, the new State of Business’ with the aim to attract international investment to build the infrastructure required to sustain employment.

The solution could be to impose tighter restrictions on trade  but what about the rules the State places on society like the new 1:30am lock out rule to reduce alcohol fuelled violence? When do we ever follow all the rules imposed on us anyway! Should corporates be expected to as well?

An example of the market overthrowing Government policy was the mining tax proposed in 2010 to curb ‘super profits’, which mining companies retaliated through political advertising resulting in the tax becoming only a modest reform.  In contrast, in 2012, Australia’s Health Minister announced the plain packaging policy to reduce tobacco related issues (SMH 2014).  Large global tobacco companies invested heavily in advertising and other tactics but were unsuccessful in overturning this policy, demonstrating the resilience required by policy makers in serving the best interests of citizens as oppose to corporations.

The challenge is to ‘engineer a new balance between market and society, one that will continue to unleash the creative energies of private entrepreneurship without eroding the social basis of cooperation’ (Guillen 2001). From the detrimental health impacts tobacco firms perpetuate to the life saving medicines developed by pharmaceutical firms,  society has faced challenges for centuries and it seems there is valid place in society for corporations after all.

http://clivehamilton.com/books/growth-fetish/

Tax. “The Budget”. NDIS. No comprende? Mucho importante.

I have avoided trying to understand the complexities of anything finance related my whole life.  I knew taxes existed, I always paid them, I knew they were partly used to subsidise ‘communal’ services and that they went to the Government…but that’s about the extent of my knowledge on tax. Until recently.

I was asked to complete an analysis of the FY14 Commonwealth Budget and boy was I excited!  Not really.  However, in pushing through this riveting piece of work I discovered that I genuinely found it interesting.  I decided to concentrate my analysis on the reform of key welfare initiatives and finished it feeling a lot less mystified and repelled by the notion of tax.

Did you know 35% of our taxes in Australia go toward supporting the welfare of our citizens? New initiatives like the National Disability Insurance scheme which will see a $20.3b investment over 7 years, will sure go a long way to providing much needed support to people with disability.  People with disability is a phrase that describes the 460,000 Australians who are less able than most as well as family, friends, carers or organisations that actively support them (Budget 13-14 2013 NDIS Policy).  The scheme will see increased supports so that people with disability can exercise more choice and control over their lives and achieve their full potential.  This in turn maximises the potential of the support networks of those with disability by broadening the support available to them.

Commonwealth Budget 13-14

I was recently privileged to hear Sally Richards (Australian disability advocate) speak at the International People with Disability Day.  One of Sally’s four sons was born severely intellectually disabled with her husband taking his own life a few years ago, unable to cope with the added pressure while battling mental illness.  I was truly moved by Sally’s story and her commitment to ensuring that people with disability are able to make a valid contribution in society.  Sally’s amazing courage, determination and sacrifice have led her son to now live in his own townhouse, with a carer, and work part time delivering mail.  Sally believes the NDIS is just one more step in fostering better access and inclusion for people with disability, which then has the flow on effect of supporting carers and family members in maximising their potential too.

For Australians not living with disability the increase in Medicare levy from 1.5%-2% of taxable income may not be welcomed, although this is an incremental investment compared to the $20.3 billion forecast to be generated for people with disability as a result of the increase in Medicare levy. We will all be touched by disability at some point in our lives, whether we obtain a disability or know someone who requires assistance.  DisabilityCare Australia will also incorporate the National Injury Insurance Scheme (NIIS), ensuring those who are affected by a ‘catastrophic’ injury can receive supports on a no-fault basis with reduced litigation and greater access to care required (Budget 13-14 2013 NDIS Policy).

http://everyaustraliancounts.com.au

Policymakers and Treasury aim to strike a balance between the State’s economic priorities and social outcomes through varying the investment allocated to certain initiatives every financial year. The key initiatives across welfare reform demonstrate a focus on research for informed policy making, inflation adjustments and labour force participation incentives to drive increased spending.  Effective budget allocation ensures resources are allocated to increase social capital through reducing the costs of anti-social behaviour and driving social cohesion for a fully functioning society which results in a strong economy (Cox 1995).