Letter from The Cape - March 9, 2023

Good evening.

The federal election in October 1961 saw the Menzies Liberal government scrape back into office by 130 votes, courtesy of James Killen's win in the inner-Brisbane seat of Moreton.

The irony was that the government, which conceded 15 seats to the Labor Party in that election, was returned to power on the back of Communist Party preferences.

Irony, because Killen was not only associated with the League of Rights, a rather nasty right-wing, anti-semitic group, but he also was pro-apartheid and opposed the struggle against white rule in what became Zimbabwe.

He was also vehemently anti-Communist.

So what was that all about?

The prosecution of the Second World War taught governments that fiscal policy initiatives - spending and taxation - could generate enough spending to ensure that there were jobs available for all who wanted to work.

The military spending in the late 1930s is what ended the decade-long Great Depression and the challenge after the War ended was how to maintain full employment when nations were no longer pounding each other into oblivion.

The grand statements that came in the early years of the peace - in Australia it was the White Paper on Full Employment - saw governments pledging to use their fiscal capacities to build public infrastructure, widen and deepen the public services, run large enterprises that provided essential services - electricity, water, transport, telecommunications, postal and the like - all with the aim of nation building and sustaining work for all who wanted it.

Measured unemployment during the next decade or more never moved above 2 per cent of the available labour, and that unemployment was considered 'frictional' - in the sense that it was just counting workers moving between jobs to new employers.

The Menzies government nearly came unstuck in 1961 because after cutting spending and increasing taxes in the late 1950s, unemployment rose quickly and ultimately, reached 3.2 per cent in 1962.

The fact that the unemployment rate breached the almost sacrosanct 2 per cent barrier was considered totally unacceptable by the voters who interpreted that as a major failing of the federal government.

The near rejection of the Menzies government demonstrated how embedded the collective will supporting full employment was in Australian society.

We understood that our federal government could always ensure there was enough work available for all.

We didn't classify the unemployed as 'dole bludgers', 'job snobs', 'cruisers' or other nasty terms that are now in common usage.

The societal consensus of the day was that unemployment above 2 per cent arose because of a systemic failure to create enough jobs.

There were differences as to how that aim would be made operational - direct public employment versus private sector stimulus, but everyone accepted that sustaining full employment was the responsibility of the federal government, which had the currency purse.

And the fact that unemployment was typically below 2 per cent was not because the private sector provided sufficient work.

The full employment was achieved and sustained during this period because the government stood to provide work on demand in a range of public activities - transport, council work, railways, roads, infrastructure and the like.

Anyone could get work - those with low education and training, new arrivals without English skills, criminals just released from prison, those with mental disabilities - in other words the type of person that we now consider to be 'unemployable' and leave to rot in the unemployment queue and churn through sociopathic case management within the job services industry, while providing below poverty-line income support.

There was intergenerational value in this approach because children were not forced, as they are now, to grow up in jobless households and inherit their parent's disadvantage.

I grew up in a poor household in the housing commission suburbs east of Melbourne. My father always had work even though he earned the minimum wage. We learned that work was an activity that generated self esteem, social connection and self reliance.

What was patently obvious then, and remains so today - is that Australian government, as the issuer of the currency we all use to purchase goods and services, is able to purchase whatever is for sale in that currency, including all idle labour.

Which means that mass unemployment and underemployment are political choices.

It is not a complex problem, the government can always ensure there are enough jobs.

The persistence of mass unemployment just means they don't want to.

A few weeks ago we saw that the unemployment rate was starting to rise again and the Treasurer claimed it was all to do with the RBA pushing up interest rates.

He claimed the elected government could do little about it.

You should now know he was lying to us.

The Australian government can always reduce unemployment if it wants to. There is never a valid reason for allowing unemployment to increase.

Next time you run into a government MP, ask them why they are choosing to deliberately force people to be without work and incomes.

That is enough for today - I will be back next time.

848 words.