On the climate crisis, housing and more, politicians avoid clarity because it demands action

Our leaders may prefer complexity because it means they can defer taking action – but doing something about emissions reduction or slow wage growth is actually not that complex

After spending any time analysing policy you quickly realise that politicians expend a supreme level of effort to avoid doing the obvious, and instead they do complex things that neither solve a problem nor appease their opponents.

For politicians, the problem with clarity is that it demands action. Complexity provides safety because action can more easily be avoided. And so the obvious and clear are painted as “extreme”, while the complex is regarded as “mature”.

For example, rather than reduce emissions or prevent commercial activity and expansion in areas where native species are under threat, the government has hosted a “Global Nature Positive Summit”. Apparently helping to “build consensus on the economic settings needed to increase investment in nature” is better than doing what scientists say is needed.

It might seem obvious that companies will not solve the climate crisis nor save threatened species, but instead we get wrapped in the mature and complex world where “corporate leaders will explore the pivotal role businesses play in achieving our national and global biodiversity goals and highlight ways to embed nature into corporate strategy”.

Complexity hides things. But Australia’s emissions reductions are actually not complex.

Almost all the reduction in emissions since 2005 has come from not clearing as much land as we did in 2005 (the “land use” category of emissions). Conversely, all the reductions to be madefrom now into the future (or at least until 2030) will need to come from reducing actual emissions.

When the Albanese government was elected, there were 92 months to go till 2030; now there are 63.

To state the obvious, a third of those 92 months are used up, and Australia’s emissions have not fallen at all.

It seems pretty clear that offsetting increased emissions will not actually reduce emissions. And yet that is the policy the government is committed to.

Similarly, we are told the housing affordability crisis is complex. The solution is multifaceted and might even require introducing tax incentives to get older couples to rent out their spare rooms.

Or perhaps, as the Queensland government has shown, the solution is rather more obvious and involves buying up vacant properties and using them for low-cost housing.

I am often told that it is too simplistic to point to the fact the 25-year decline in housing affordability occurred after fewer public-sector homes were built and the tax system was changed to incentivise speculation and tax avoidance.

Saying it’s more complex avoids stopping what hasn’t worked (and which has made things worse).

The cost-of-living crisis is also, we are told, a very complex thing.

As an economist I could write about the interaction of demand and supply pressures to ensure you stopped reading because it is all too much to understand.

But we saw last month that companies such as Woolworths and Coles have massive pricing power – the prices they set have little to do with costs and more to do with profit.

They set the prices – you don’t go in and haggle over the price of a packet of chips.

Regardless of potential breaches of law, those companies have obviously abrogated their social licence and need greater oversight by a body that can actually demand explanations for why they have coincidentally decided to take it in turns having Coke on special every other week.

Also, rather obviously, the main reason for the cost-of-living crisis is that wages have grown much slower than prices.

Back in March 2020, the average annual full-time wage was about $90,000. Had a person earning that received pay rises in line with the wage price index, their wage would now be worth $4,300 less in real terms.

In effect, they can now buy as much with their wage as they did back in 2009.

An obvious solution is that wages need to grow faster than prices.

We will be told this is too simple – we need to care about productivity (and we’ll ignore that measuring productivity is actually complex, and instead pretend it is simple and accurate) and that prices might rise if wages start to grow too fast.

After the past three years, we know that is just an argument by business groups to not have to pay workers more.

It’s the same thing we see with calls to abolish the junior award rates.

Everywhere in society someone aged 18 is treated as an adult, except when they get paid.

That seems obviously wrong, especially when you consider that even with award rates set by the Fair Work Commission, in real terms someone on the award has a wage worth less than was the case 5 years ago

The ACTU is arguing that those who earn up to 30% less than the award because they are under 21 should be paid as the adult they are.

Business groups and major supermarkets will argue, however, the issue is more complex and that it will cause prices to rise and reduce employment. These, of course, are the same companies that now get their customers to effectively work for free by checking out items, and which have profited nicely during the cost-of-living crisis.

But we know that raising incomes reduces poverty (I know … obvious). It happened during the pandemic when the Morrison government doubled jobseeker briefly

Prevent the destruction of native habitats, reduce actual emissions instead of offsetting them, build more homes, pay adults as adults, increase welfare payments so that people don’t live in poverty.

Are these ideas too obvious? Not mature enough? Maybe someone might think them “extreme”? But they don’t hide behind a facade of complexity to avoid fixing a problem.

 

Cover photo: By The  Guardian