Let me preface this letter with an upfront statement: I am a Libertarian at heart. The less daddy government in the way, the better. The official definition of libertarianism is a political philosophy that advocates only minimal state intervention in the free market and the private lives of citizens. But even I acknowledge that sometimes capitalism and the free market need a little help.
My second disclaimer is I am also no economist. These thoughts are purely logical, and I’m shocked they haven’t been said before. Or maybe they have, and no one listens. After all, politicians only care when there’s a paycheck in it for themselves. It doesn’t even have to be big. Now with that said, let’s get into it.
An Open Letter to the Australian Government on How to Enact Impactful & Sustainable Economic Growth
By Kyle (Not an Economist)
The response to Covid-19 shook up a lot of things. Who would have thought that shutting down the economy for two years would have had any impact? Apart from anyone with a brain, of course. But alas, what’s done is done, and the fallout from those decisions will be felt and debated about for the next decade, at least. Now that the world is coming to grips with that ever so quick decision to shut down, the rising inflation, and the recession it caused, we’re left looking at ways to restart the economy. Luckily, I have ideas.
For those in government that either can’t, or refuse, to understand the basic principle, let me explain it quick. The economy is based on people earning and spending money. When money sits still, things get dicey. So, the core issue we’re facing is how to get the money rolling again?
The answer is simple: we invest in our country. We don’t send millions, or billions, overseas. Sounds simple right? And yet, money is still sent to just about every other country as if it’s a competition to see who can give away the most. Because I’m based in Melbourne, I’m going to focus here, but there’s no reason this can’t be used elsewhere. I’ll be going between the state and federal level for a few things as well. Simply because I have yet to understand the line between federal and state.
Part 1
Fix The Internet – Create Jobs – Bring Australia into the 21st Century
On a federal level, the NBN (Australia’s plan for “super-fast” internet) has been an abject failure. Even New Zealand is outpacing the fastest internet offered by 100:1. Sure, being a small island of 6 million people makes it easier to roll out fast internet, but Australia has the scale that New Zealand can’t even dream of. We need the federal government to state that broadband is now classified as 1gbps synchronous. That means 1000mbps for download and upload. And then put an extremely aggressive period on it. Say, all urban areas must have the new broadband standard within the next 12 months.
You may be asking what this will accomplish? For starters, it will light a fire under NBN’s bum and get them to upgrade their network, lay new fibre down, and invest. Oh, and they’ll have to hire more people to do it. Bam! Instant jobs. Just add people. Everyone on centre link who is able bodied can now work. More jobs mean more tax. More tax means more can be reinvested into the country. It’s a win-win. All it takes is a leader with the spine to do it. Pity we have Labour in charge, so I’m not holding my breath.
Part 2
Invest In Future Entrepreneurs – Revitalize the City
First, some back story – Melbourne was running a thing called Melbourne Money after the 5th, 6th and 7th lockdown. Basically, the local government would reimburse you 25% of your bill when you eat out. They did this as a way to try to get more people to return to the CBD. What a colossal waste of money. It’s just simply not sustainable. And we saw the very real drop off when that plan came to an end. So, what would be a better use for those millions? What about investing in people instead?
My idea is simple. The government should have taken stock of all the businesses that closed, thanks to their strict lockdowns, and produced a CBD revitalization plan. Have people come to the government with business plans. These budding entrepreneurs would need to present before a committee and should the business plan show some promise, the government would then do the following.
– They would help you secure a loan from the bank to get it up and running.
– They would help you find a store to rent. (I mean the city is full of empty shops and abandoned restaurants still)
– They would work with the local universities to assign you a business mentor. Since most businesses go under in the first two years, this is where the government help would focus. The business mentor would work with the owner day by day for the first year, getting the business going, generating profit. The second year, they’ll be on call to help. The third year, you’re on your own.
But of course, if the government is investing in you, there have to be some terms and conditions. Firstly, the business must have a good business plan. Secondly the business has to employ more than just the owner. Thirdly, the business should be able to scale. Fourthly, the business should be profitable within the first year. If these criteria are met, then away you go. You get access to a mentor, you could get free or discounted courses at the uni, and the government could underwrite or sponsor your loans.
If the business folds within the two years, you owe the government all the money they invested in you. If it folds within 5 years, you owe a percentage. The first 5 years are audited to make sure you’re on the right track.
You have then created a business that creates jobs and enriches the city. More people working means more jobs means more tax means happier people. And you’ll end up with some very interesting businesses around, making your city even more attractive to those from other states…
Part 3
Grow A Spine – Implement A Foreign Buyers Ban
The housing market is a bone of contention in just about every developed county. You have the New Zealand government crying about young people never being able to afford a home of their own, while happily allowing every foreign investor to buy all the property they want. And if they buy enough property, they get citizenship. And Australia is going the same way.
So, let’s prioritize looking after the people that are here. Put in place a buyers ban on everyone who isn’t a Permanent Resident. Simple. Suddenly 80% or more of the apartments in Melbourne will be available for purchase. And limit Permanent Residents to one owner occupied property while allow the citizens to buy as much as they can afford. The fallout from this will be more people calling Australia home, and actually having a vested interested in the country doing well.
When you allow your population to grow wealthy, you in turn make the country grow wealthy. And the outcome of that is overflowing with positives. More education, higher quality of life, a country people want to be in and a part of. And those benefits are immeasurable.
Wrap Up
Like I said, I am no economist. All I know is that the best way out of a recession is to make sure money flows. And the easiest way to do that is to get people into jobs and paying tax. And when people have work to do, they tend to be happier overall. Now, I know I didn’t cover everything that could possibly be done. But I covered the bits that I consider low hanging fruit – stuff that is easy to do with the most bang for buck.
As I said, sometimes the system needs some help. We should help by teaching it how to fish. Not by giving it money so it can go out for a night to eat some fish.
