News Release:
Bring Super funds back home to create jobs and profits
| 12/1/04 006/04 Australia could reach the holy grail of full employment and low inflation through better targeted investment of workers' superannuation funds, a University of New England researcher suggests. Tony Ramsay of the School of Social Science says national unemployment and underemployment, contrary to Federal government pronouncements, now stands at 12 per cent and would continue to rise. Free market policies had failed to come to terms with unemployment and it was in the interest of both business and workers to increase productivity through a new full employment policy. He rejects as "unworkable" the Newcastle model, put forward recently by Professor Bill Mitchell, to create a safety net of low paid public sector jobs to protect the casualties of private sphere redundancies and downsizing. Mr Ramsay says this scheme would be rejected by workers and proposes a different model based on three institutions that would balance free market forces without over regulation. It would include re-introduction of the Arbitration and Conciliation Commission to pin down wages in line with profits and productivity, establishment of an institution to control investment and stimulate demand in the economy to create jobs and a further body with representation from labour, capital and government to invest in long-term strategies to retain full employment. The key is the nation's superannuation funds, 19 per cent of which are presently invested overseas. Mr Ramsay says the superannuation contribution from employers should be increased from the current nine per cent to ten per cent and that the 19 per cent overseas investment of super funds, now permitted, should be cut by four per cent to 15 per cent.
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Reassigning this four per cent, representing 22 billion dollars to the domestic pool, would supply a funding base for the activities of the new authorities. He proposes a 15-year transition period where existing privatised superannuation arrangements would remain unchanged but new entrants to the labour market would have 7/10ths of their super directed into the new national fund and three per cent directed according to individual choice. Benefits of this system would be to balance wages with profits, stimulate demand in the economy to create jobs and long-term investment in strategies to retrain workers and create new industries. "The old tax and spend methods of controlling the economy are now regarded as impotent instruments given the degree of financial liberalisation," he said. "However, acceptance that a pool of unemployed is an inevitable part of any successful global economy is also wasteful and unprofitable. "Thirty years of neo-liberalism and free markets have failed in their own terms. The demise of Keynesian economic primacy with the oil price hike in the 1970's was replaced with the free market theory promising prosperity and full employment for all and growth without inflation. It has not happened and what we now face is persistent unemployment which is an economic and social catastrophe." Mr Ramsay said unemployment acted as "a handbrake on the economy" involving massive costs in welfare, social disruption and loss of capacity. "Governments are obliged to pursue full employment policies, not only because it is a matter of social equity and justice for workers but because it will also deliver higher profits to the private sector through extra productivity." Media contact: Tony Ramsay, UNE, Armidale (02) 6773 3521. |
