Catholics want a seat for the poor on the RBA board

Australian Financial Review Oct 18 2017 6:15 PM

Laura Tingle

The Catholic Church is calling for welfare payments to be set by an independent board – not the government – to depoliticise them, and for a new position on the Reserve Bank board representing the poor, in a push against the free market, neoliberal policies which it says dominate our politics.

Catholic Social Services Australia released a policy document on Wednesday, which reflects a statement from Catholic bishops distributed in churches around the country in recent weeks, which argues Australia's political leaders have to radically rethink policy settings, which are leading to growing inequality and exclusion.

The intervention is significant at a time when both major political parties are recognising – privately and publicly – the need to address the issue of economic inequality.

"We need our leaders to acknowledge that our economic system has lost its way, giving preference to the purity of the market without due regard to the society in which it operates," Catholic Social Services Australia chief executive Frank Brennan said at the launch of the policy paper.

After more than four decades of the neoliberal paradigm, "there can be no doubt that 'trickle-down' economics has been of great benefit to those at the top of the pyramid".

"However, the promise of riches from the trickle-down effect is at best patchy for many Australians, and non-existent for others."

Independent commission

The paper says an independent commission needs to be established "to develop evidence-based benchmarks to ensure that income support payments are adequate for people to live a frugal yet dignified life, and have realistic opportunity of securing a job".

"Our politicians don't set wages on budget night. Neither should they set welfare payments," the paper says.

There has been significant pressure placed on the transfer system over the last decade in light of the position of the budget, the paper says, and governments on both sides of politics have resisted increases to payments such as Newstart, although both civil society and the business community have identified them as being inadequate.

The bishops pointed out to their congregations that Newstart recipients are $110 per week below the poverty line and youth allowance recipients are $159 below the poverty line.

The paper calls for a strengthening of the tax and transfer system to put the needs of the poor and vulnerable first, and particularly targets corporate profit shifting while calling for better targeting of "concessions available to businesses and high-wealth individuals".

The paper calls for a "new national accord" between government, civil society and business and for the public release of government economic modelling of all budgetary measures that affect the economic wellbeing of Australians".

It says a new position should be created on the RBA board so that "a pre-eminent Australian who has knowledge of and experience of the consequences of monetary policy on the poor and marginalised to reinforce the inter-connectedness of economic and social policy and acknowledge the role the RBA can play in using monetary policy to improve the lives of the poorest and most marginalised in our society".