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Economy

We can build a more inclusive government and economy out of the pandemic — this blueprint shows us how – The Conversation AU

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When the COVID-19 pandemic transformed our lives earlier this year, our political leaders joined hands and said we were all in this together — and for a while we saw glimpses of a different kind of politics.

But as things got tougher, the cohesive National Cabinet became more fractious. The blame game and “politics-as-usual” took over and distracted from finding new solutions to tough problems.

With the country facing an uncertain economic future, the University of Sydney’s Policy Lab has brought together community and climate groups, unions and business groups to identify strategies for creating a different way of making policy and building a new economy coming out of the crisis.

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The product is our “Real Deal” report released this week.

The Real Deal isn’t a typical policy document that outlines a magic bullet to the problems the pandemic has created.

We tried to break with the old battlegrounds and ideologies that have failed us over the last century. Instead of calling for unfettered free markets or big welfare states, or simple solutions like budget surpluses or endless stimulus packages, we are calling for a new relationship between the markets, government and civil society.

At the centre of this, we are arguing for a more collaborative approach and for mass community participation to be valued in public life.

There is another way forward that isn’t ‘politics as usual’.
Mick Tsikas/AAP

So how would we do that?

Collaboration works when different groups have the authority and ability to negotiate solutions.

We saw this during the second wave of the pandemic in Victoria when United Workers Union members at a Coles distribution warehouse were able to quickly push to make their workplace more COVID-safe by using the Occupational and Safety Act. While initially reluctant, management introduced a series of changes, including a deep clean of machinery and temperature checks upon entrance.

Compared to hot spots like the Cedar Meats warehouse, these workers minimised the transmission of the virus, securing a better deal for themselves and kept food on supermarket shelves.

Novel solutions emerge when unusual partners collaborate. In Queensland, for instance, a diverse coalition of religious organisations, unions and community organisations called the Queensland Community Alliance has worked with researchers and state and federal governments to create a strategy to combat loneliness.

Their solution wasn’t about spending a lot of money, but reshaping how people use the state health system. They created a new health department role called a “link worker” that could help people navigate the maze of services available to them, saving time and money.




Read more:
After COVID, we’ll need a rethink to repair Australia’s housing system and the economy


Policy is also better when it involves the full participation of everyday people.

In the Hunter Valley, Australia’s largest coal-mining region, local unions, environmental groups, community members and businesses have formed an unusual alliance to find solutions for the regional economy, which is threatened by the closure of mines due to climate change concerns.

Having door-knocked residents to ask their opinions, the new group proposed plans for new industries and jobs to create economic security for local residents.

Participatory policy-making like this is easier when the government treats people as co-producers of solutions, not distant observers or barriers to change. It works best when it is built from the lived experiences of people who will be affected by these policies.

This was a weakness during the pandemic when policymakers often overlooked how their policy responses would affect different groups, such as
those with mental illness,the residents of public housing towers in Melbourne or temporary migrants.

The lesson is that effective policy-making puts affected people at the centre of these discussions — much in the way the disability sector has long advocated a “nothing about us without us” approach.




Read more:
Our lives matter – Melbourne public housing residents talk about why COVID-19 hits them hard


Five benchmarks for the solutions we need

In building the “Real Deal” report, we put these ideas into practice. We began our research not with books, but with the lived experience of leaders in civil society — listening to their stories and responding to the challenges their members were facing.

We took this research to a panel of Australian and international economists and academics, then began a slow process of writing a new framework together. We sought case studies — real solutions — tested in the field by our collaborators, like the ones outlined above.

The process took months, but that time enabled genuine collaboration and participation.

The report offers five benchmarks for measuring whether policy-making is contributing to the solutions we need. These include:

  • an awareness that reshaping how the state serves the people is even more vital than big stimulus packages

  • a focus on addressing pre-existing inequalities and injustices laid bare by the pandemic

  • a bold vision that matches the scale of our economic and climate crises

  • the active participation of people in decisions that affect them

  • a deeply collaborative process.

Central to a real deal is that people make a difference. We are the ones who can make the deals for regional economic development in the face of climate change or create a new health system based on people’s needs.

There is a growing lament in Australia that politicians let us down. But the lesson from the pandemic is we have the power to change our economy and politics, and if we do, we might emerge from these crises stronger.




Read more:
Healthcare, minerals, energy, food: how adopting new tech could drive Australia’s economic recovery


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Economy

Britain's economy went into recession last year, official figures confirm – The Globe and Mail

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Open this photo in gallery:

People walk over London Bridge, in London, on Oct. 25, 2023.SUSANNAH IRELAND/Reuters

Britain’s economy entered a shallow recession last year, official figures confirmed on Thursday, leaving Prime Minister Rishi Sunak with a challenge to reassure voters that the economy is safe with him before an election expected later this year.

Gross domestic product shrank by 0.1 per cent in the third quarter and by 0.3 per cent in the fourth, unchanged from preliminary estimates, the Office for National Statistics (ONS) said on Thursday.

The figures will be disappointing for Mr. Sunak, who has been accused by the opposition Labour Party – far ahead in opinion polls – of overseeing “Rishi’s recession.”

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“The weak starting point for GDP this year means calendar-year growth in 2024 is likely to be limited to less than 1 per cent,” said Martin Beck, chief economic adviser at EY ITEM Club.

“However, an acceleration in momentum this year remains on the cards.”

Britain’s economy has shown signs of starting 2024 on a stronger footing, with monthly GDP growth of 0.2 per cent in January, and unofficial surveys suggesting growth continued in February and March.

Tax cuts announced by finance minister Jeremy Hunt and expectations of interest-rate cuts are likely to help the economy in 2024.

However, Britain remains one of the slowest countries to recover from the effects of the COVID-19 pandemic. At the end of last year, its economy was just 1 per cent bigger than in late 2019, with only Germany faring worse among Group of Seven nations.

The economy grew just 0.1 per cent in all of 2023, its weakest performance since 2009, excluding the peak-pandemic year of 2020.

GDP per person, which has not grown since early 2022, fell by 0.6 per cent in the fourth quarter and 0.7 per cent across 2023.

Sterling was little changed against the dollar and the euro after the data release.

The Bank of England (BOE) has said inflation is moving toward the point where it can start cutting rates. It expects the economy to grow by just 0.25 per cent this year, although official budget forecasters expect a 0.8-per-cent expansion.

BOE policy maker Jonathan Haskel said in an interview reported in Thursday’s Financial Times that rate cuts were “a long way off,” despite dropping his advocacy of a rise at last week’s meeting.

Thursday’s figures from the ONS also showed 0.7 per cent growth in households’ real disposable income, flat in the previous quarter.

Thomas Pugh, an economist at consulting firm RSM, said the increase could prompt consumers to increase their spending and support the economy.

“Consumer confidence has been improving gradually over the last year … as the impact of rising real wages filters through into people’s pockets, even though consumers remain cautious overall,” Mr. Pugh said.

Britain’s current account deficit totalled £21.18-billion ($36.21-billion) in the fourth quarter, slightly narrower than a forecast of £21.4-billion ($36.6-billion) shortfall in a Reuters poll of economists, and equivalent to 3.1 per cent of GDP, up from 2.7 per cent in the third quarter.

The underlying current account deficit, which strips out volatile trade in precious metals, expanded to 3.9 per cent of GDP.

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How will a shrinking population affect the global economy? – Al Jazeera English

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Falling fertility rates could bring about a transformational demographic shift over the next 25 years.

It has been described as a demographic catastrophe.

The Lancet medical journal warns that a majority of countries do not have a high enough fertility rate to sustain their population size by the end of the century.

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The rate of the decline is uneven, with some developing nations seeing a baby boom.

The shift could have far-reaching social and economic impacts.

Enormous population growth since the industrial revolution has put enormous pressure on the planet’s limited resources.

So, how does the drop in births affect the economy?

And regulators in the United States and the European Union crack down on tech monopolies.

The gender gap in tech narrows.

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John Ivison: Canada's economy desperately needs shock treatment after this Liberal government – National Post

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Lack of business investment is the main culprit. Canadians are digging holes with shovels while our competitors are buying excavators

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It speaks to the seriousness of the situation that the Bank of Canada is not so much taking the gloves off as slipping lead into them.

Senior deputy governor, Carolyn Rogers, came as close to wading into the political arena as any senior deputy governor of the central bank probably should in her speech in Halifax this week.

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But she was right to sound the alarm about a subject — Canada’s waning productivity — on which the federal government’s performance has been lacklustre at best.

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Productivity has fallen in six consecutive quarters and is now on a par with where it was seven years ago.

Lack of business investment is the main culprit.

In essence, Canadians are digging holes with shovels while many of our competitors are buying excavators.

“You’ve seen those signs that say, ‘in emergency, break glass.’ Well, it’s time to break the glass,” Rogers said.

She was explicit that government policy is partly to blame, pointing out that businesses need more certainty to invest with confidence. Government incentives and regulatory approaches that change year to year do not inspire confidence, she said.

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The government’s most recent contribution to the competitiveness file — Bill C-56, which made a number of competition-related changes — is a case in point. It was aimed at cracking down on “abusive practices” in the grocery industry that no one, including the bank in its own study, has been able to substantiate. Rather than encouraging investment, it added a political actor — the minister of industry — to the market review process. The Business Council of Canada called the move “capricious,” which was Rogers’s point.

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While blatant price-fixing is rare, the lack of investment is a product of the paucity of competition in many sectors, where Canadian companies protected from foreign competition are sitting on fat profit margins and don’t feel compelled to invest to make their operations more efficient. “Competition can make the whole economy more productive,” said Rogers.

The Conservatives now look set to make this an election issue. Ontario MP Ryan Williams has just released a slick 13-minute video that makes clear his party intends to act in this area.

Using the Monopoly board game as a prop, Williams, the party’s critic for pan-Canadian trade and competition, claims that in every sector, monopolies and oligopolies reign supreme, resulting in lower investment, lower productivity, higher prices, worse service, lower wages and more wealth inequality.

(As an aside, it was a marked improvement on last year’s “Justinflation” rap video.)

Williams said that Canadians pay among the highest cell phone prices in the world and that Rogers, Telus and Bell are the priciest carriers, bar none. The claim has some foundation: in a recent Cable.co.uk global league table that compared the average price of one gigabyte, Canada was ranked 216th of 237 countries at US$5.37 (noticeably, the U.S. was ranked even more expensive at US$6).

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Williams noted that two airlines control 80 per cent of the market, even though Air Canada was ranked dead last of all North American airlines for timeliness.

He pointed out that six banks control 87 per cent of Canada’s mortgage market, while five grocery stores — Sobeys, Metro, Loblaw, Walmart and Costco — command a similar dominance of the grocery market.

“Competition is dying in Canada,” Williams said. “The federal government has made things worse by over-regulating airlines, banks and telecoms to actually protect monopolies and keep new players out.”

So far, so good.

The Conservatives will “bring back home a capitalist economy” — a market that does not protect monopolies and creates more competition, in the form of Canadian companies that will provide new supply and better prices.

That sounds great. But at the same time, the Conservative formula for fixing things appears to involve more government intervention, not less.

Williams pointed out the Conservatives opposed RBC buying HSBC’s Canadian operations, WestJet buying Sunwing and Rogers buying Shaw. The party would oppose monopolies from buying up the competition, he said.

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The real solution is to let the market do its work to bring prices down. But that is a more complicated process than Williams lets on.

Back in 2007, when Research in Motion was Canada’s most valuable company, the Harper government appointed a panel of experts, led by former Nortel chair Lynton “Red” Wilson, to address concerns that the corporate sector was being “hollowed out” by foreign takeovers, following the sale of giants Alcan, Dofasco and Inco.

The “Compete to Win” report that came out in June 2008 found that the number of foreign-owned firms had remained relatively unchanged, but recommended 65 changes to make Canada more competitive.

The Harper government acted on the least-contentious suggestions: lowering corporate taxes, harmonizing sales taxes with a number of provinces and making immigration more responsive to labour markets.

But it did not end up liberalizing the banking, broadcasting, aviation or telecom markets, as the report suggested (ironically, it was a Liberal transport minister, Marc Garneau, who raised foreign ownership levels of air carriers to 49 per cent from 25 per cent in 2018).

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The point is, Canada has a competition problem but solving it requires taking on vested interests. Conservative Leader Pierre Poilievre has indicated he is willing to do that, calling corporate lobbyists “utterly useless” and saying he will focus on Canadian workers, not corporate interests.

“My daily obsession will be about what is good for the working-class people in this country,” he said in Vancouver earlier this month.

Even opening up sectors to foreign competition is no guarantee that investors will come. There are no foreign ownership restrictions in the grocery market (in addition to the five supermarkets listed above, there is Amazon-owned Whole Foods). When the Competition Bureau concluded last year that there was a “modest but meaningful” increase in food prices, it recommended Ottawa encourage a foreign-owned player to enter the Canadian market. It was a recommendation adopted by Industry Minister Francois-Philippe Champagne, to no avail thus far.

But it is clear from the Bank’s warning that the Canadian economy requires some shock treatment.

Robert Scrivener, the chairman of Bell and Northern Telecom in the 1970s, called Canada a nation of overprotected underachievers. That is even more true now than it was back then.

It’s time to break the glass.

jivison@criffel.ca

Get even more deep-dive National Post political coverage and analysis in your inbox with the Political Hack newsletter, where Ottawa bureau chief Stuart Thomson and political analyst Tasha Kheiriddin get at what’s really going on behind the scenes on Parliament Hill every Wednesday and Friday, exclusively for subscribers. Sign up here.

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