The great thing about Prime Minister Kevin Rudd’s planned summit is that it represents an opportunity for the trade union movement to shape the politico-economic landscape of Australia. An opportunity which has not been present for at least a generation. I have a policy proposal which combines workign rights with our ongoing sustainability, prosperity, and empowering the most disadvantaged within our community. I call it the Sustainable Development Investment Bank (SDIB).One of the greatest ongoing challenges Australia faces is securing our economic prosperity on an ecologically sustainable foundation. At the same time, despite almost a generation of uninterrupted economic growth there remains groups within our society who have been left behind. The market has failed to provide social equity, or its own ecological sustainability. For instance, the average income of those in capital cities remains 16 per cent higher than those in rural areas, while the poorest 20 per cent of Australian households account for 1 per cent of all household net worth. Further, we hardly need reminding of the disgraceful disparity in living standards between Aboriginal Australia and the rest of the nation. Yet at same time ecosystems are being degraded as species go extinct at an unprecedented rate, resources are depleted and global sinks such as the atmosphere are thrown out of balance. The SDIB is a policy designed to overcome these twin challenges. It is an institution designed to re-direct capital flows for the purpose of securing a prosperous Australia that is both just and sustainable. The SDIB would be in a position to create opportunities for decent work for marginalised Australians, while shaping the market so it becomes ecologically sustainable.
While there are many private sources of capital which can be used to initiate enterprise within our society, such as bank loans, marginalised groups and communities often do not have access to such sources. The central function of the SDIB would be to grant capital to applicants with meritorious enterprise proposals as judged against a sustainability threshold. It would run as an independent statutory body redistributing capital to either new enterprises or certain enterprises looking to alter their business model to fall in with sustainability guidelines.
The sustainability threshold is measured with respect to three key areas; the environment, the community and the ongoing financial viability of the enterprise. The environmental key indicators would include whether the enterprise will contribute to solving a known ecological problem, whether the enterprise will utilise environmental best practice, and an assessment of the wider ecological impacts of the enterprise. Indicators to be considered in relation to a proposal’s benefit for the local community would include whether the enterprise creates decent work, as measured by International Labour Organisation standards, the socio-economic status of the community where the enterprise is located, and an assessment of the overall impact of the enterprise within the target community. Where an enterprise proposal had particularly strong environmental or community benefits but did not negatively affect the other categories then such applications would also be considered.
Using the above criteria the SDIB would be in a position to fund a diverse range of enterprises which would facilitate a just transition to a sustainable future. One of the proposals could include training young people in regions where youth unemployment is high, such as Wollongong, to ‘green’ retrofit building stock in an area like Sydney in order to combat global warming. Another may be the creation of a national Aboriginal artists’ cooperative to market Aboriginal art for a just return for the artist and their community.
The SDIB could also prioritise projects designed to assist communities that would otherwise be disadvantaged by the change to a carbon constrained economy. In such cases, SDIB grants could be used to fund the creation of alternate decent work in areas where the local economy is driven by environmentally damaging industries. For example, the SDIB could fund the establishment of a wind-turbine research and manufacturing facility in the Portland region of Victoria.
Funding is critical. The SDIB would initially be funded by a temporary Sustainability Levy which would consist of an additional 1% tax on the profits gained from exploiting Australia’s mining resources. In the March 2007 quarter the Australian mining industry generated a profit of AU$11.535b; the Sustainability Levy, had it been in effect, would have therefore generated AU$115.35m for the quarter. It would also be possible to supplement this Levy with an obligation on all SDIB funded enterprises to pay a minimum 1% of all profits back to the SDIB until such time as the initial grant plus interest has been repaid. Placing an obligation on profitable community enterprises to pay back the cost of the grant plus interest would also have the additional advantage of mitigating the risk of failure common to new enterprises. Furthermore, in order to phase out the SDIB’s reliance on capital generated from non-renewable sources, a proportion of each funded enterprise’s tax liability could be set aside for the SDIB instead of going to Treasury.
This scheme provides a radical rethink of the relationships between the market, the state and the community, and would therefore be an effective and inclusive way in which to address the market’s equity failure. The SDIB would transcend the ongoing debate between welfare and responsibility, between supporting the needs of people and giving them the freedom to build prosperous businesses. It would give targeted communities the ability to achieve real prosperity in a way that enhances individual creativity and freedom. SDIB grants would also act as an incentive to increase the financial value attached to ecological sustainability. Furthermore, the creation of a new generation of enterprises would engender a widening of Australia’s export base. New and sustainable high-value, low-volume exports would go a long way to ensuring our nation’s prosperity once the mining boom subsides.
Ecological crisis is a reality. There is only a limited period of time in which we can continue to draw on our non-renewable ecological capital. At the same time, it is ethically unacceptable to live in a time of unparalleled wealth while continuing to leave behind important sectors of Australian society. The SDIB is about building a just and sustainable Australia, a place where jobs can be created without eroding fundamental working rights, and a place that we can pass onto the next generation in better shape than when we inherited it.
Do you think is feasible way of building up new green-collar jobs and/or jobs with justice? Feel free to add your own ideas. I have the footnotes to this blog if any one wants them.
