Episode 1 Full Transcript FINAL

Glyn Davis: G’day and welcome to Life’s Lottery, a new podcast from the Paul Ramsay Foundation, made in collaboration with our colleagues at the UTS Impact Studios.

Jeni Whalan: In Life’s Lottery, we’re exploring new ways of thinking about disadvantage and how to address it.

Glyn: We’ll be talking to people all over the nation and the world. But we want to acknowledge that we’re recording this on Gadigal land and pay respects to elders past and present.
So I’m Glyn Davis. I’m the CEO of the Paul Ramsay Foundation, an organisation committed to breaking the cycle of disadvantage. And I come to that role after some very good fortune, a chance to work in government, state and federal, and a lifelong career in academia, teaching public policy, working with some very gifted students and colleagues around the pressing policy problems of our moment.

Jeni: And I’m Jeni Whalan, the chief strategy officer at the Paul Ramsay Foundation. Like Glyn, I’ve come to philanthropy from a background in public policy, in international and foreign policy, in education policy, working in government, in universities and in think tanks all over the world. In Life’s Lottery, we’re talking to some of the most imaginative thinkers and practitioners and researchers, people whose lives have been touched by disadvantage themselves and all of them together, helping us imagine better pathways for the future.

Glyn: And we’re recording this series at the end of nearly two years of COVID and all of the disruptions to policy, it’s meant a time when a whole lot of things that were familiar about economic and social allocations have changed. So it’s a great moment to be thinking about the future and what’s possible.

Jeni: In this episode, we’re exploring ideas about merit. And if you ask most Australians, we say we believe in it. We believe that hard work and good choices determine where we get to in life. There’s perhaps none greater proponent than our Prime Minister, Scott Morrison, who says “If you have a go, you get a go”.

Glyn: And yet the statistics are really clear that there’s a proportion of Australians who live in poverty who don’t break out of poverty and whose choices are highly constrained. And we have to ask, what happened to merit?

Jeni: Social Affairs journalist and author Rick Morton has addressed these issues from a personal perspective.

Rick Morton: I think about this a lot with my brother and I. So like, we come from the same family, obviously same mother and father. He was really badly burned when he was nine and I was seven and I watched it happen. We both lost our father through the divorce, both emotionally kind of wrecked by that and then both raised by a single mum. Now he was never in to study books or writing or reading and didn’t seem to have what I seem to have, which was this weird natural talent and interest in these things to the point where my mum concocted a story that I was actually put here on Earth by aliens, and that she was just looking after me because my job was to report back right? And so my brother and I had completely different trajectories from that point where he went into, you know, carpentry, which is a great job. But then because of his own kind of trauma and the inability to attach a narrative to that became addicted to drugs, methamphetamine, spent time in jail. He’s no less worthy than me, and I feel guilty because it’s like, Well, what was it that got me out of there? It wasn’t hard work. Yeah, I worked hard, but so did he. It wasn’t that. It was, I had this natural predisposition towards certain things that allowed me to focus on something outside of myself. And he had something else and he was more interested in motorbikes and friends and all of these things. And I don’t know, I don’t think a system that stratified people or allows access to certain comfort or wealth or resources that is based on something that is just luck, like it is just luck.
And that’s what people don’t understand or don’t want to recognise. Because the moment you recognise that luck is a factor, then all of the people who have all the high powered jobs who are doing really well in the consulting firms and the law firms and in politics, they have to then admit or concede that they didn’t get there by their own merit. And that’s like a really repulsive thought for people, including myself to a degree like it’s, you know, I have to be honest about that. Like, sometimes I’m thinking, you know, I worked hard to get where I am and like, and I did. And it was really stressful and it was really tough and I didn’t know if I was going to make it. But also the reason I’m here at all talking right now is not because of any particular strategy I deployed on my part. It was just complete fatalism like something happened that was set in chain a very long time ago, and I didn’t consciously make any of these decisions along the way. In retrospect, people like to think they made the right decisions, and it’s easy to think you did. If you’ve ended up somewhere nice, it’s really easy to think that. And yet when they see on the news that people who are on the dole or getting welfare payments or people who are homeless or drug addicts, it’s very easy if you’re in a well-off position to look at them and say, well, clearly they made the wrong choices.
Neither my brother nor myself made choices. We had choices inflicted upon us that were really kind of sclerotic and narrow and diminished because of our own circumstances, because of our financial instability and our upbringing. Emotional turmoil, mental health. It’s kind of the alchemy of all of those things that comes into play. And it takes a village. Were it not for like at least 10 different adults who I met along the way from high school all the way through to my mid-20s, were it not for meeting the right adults at the right time in my own development, I still wouldn’t be here. And that’s just luck. So like, there is no formula that you can apply. But people don’t like talking about that because the moment you admit that there’s no formula is when you admit that the whole thing is completely capricious.

Jeni: Our guest today is Alison Pennington, senior economist at the Centre for Future Work at the Australia Institute.

Glyn: We do want to start with the moment, the COVID moment, and we want to start with the fact that the payment of COVID supplements in 2020 and then again in 2021 was the largest poverty reduction measure in Australian history. It made an extraordinary difference to hundreds of thousands of lives. What do we learn from this, Alison?

Alison Pennington: I mean, the first lesson for me in that time was for so long, we’ve been told that it’s impossible to provide above poverty payments to people. That it creates disincentives for them somehow creates systems that we don’t want to encourage in society. But most importantly, from an economic perspective, some of the justifications for these ideas have been on the basis that the government does not have the financial capacity to spend in that way. Really, 2020 was a remarkable time. Historically, some of the biggest fiscal spends of government, any time in history. And a large portion of that went to lifting up people at the bottom and making sure that they could provide for necessities while we were locked down and trying to save ourselves from the virus. But at the same time, also hundreds of billions went out the door for programmes like JobKeeper, which were on paper good but were designed poorly, were rorted. As well as, you know, $30 billion a year in tax cuts for people who don’t need them. So I think from an economic perspective, it showed that we absolutely have the capacity to provide a decent standard of living to people through the mechanisms of government support payments.

Glyn: And, as it turns out, also to provide universal child care and to help every homeless person off the streets.

Alison Pennington: Wasn’t it remarkable? And then it all wound back, and for what reason? We have not been told, but they will, I think, continue to peddle a concept of being responsible with spending.

Jeni: It’s an interesting paradox in crisis, isn’t it, that the moment enables us to do so much more, and yet sometimes we’re only able to do so much more because it’s a moment and things have to go back to the way they were. Do you see any signs of being able to see some of that policy innovation of 2020 to carry through?

Alison Pennington: So I’ve been spending most of my time trying to point out that a lot of the conditions that required the introduction of those sorts of, you know, above poverty payments haven’t really changed. And I think there’s been a really strong narrative through the pandemic of ‘snapback’ – this idea that we want to be able to go back to how things work as quick as we can. And I’ve been to length to try and point out that things weren’t good before we came into this pandemic. I mean, that shouldn’t be our ideal. We should be seeing this time as something that opens up a new way to to do government, a new way to organise society, to undo a lot of the unnecessary poverty, destitution, record low wages growth, decline of job quality, loss of industry policy – There are so many ways in which things were not desirable coming in. And so I guess the short answer is it’s all in motion, and conversations like this are a part of pointing that out and pointing out that we can hold on to some of the gains, including wage subsidies. I mean, that’s a great policy to be using economically to get people into good jobs long term.

Glyn: So, Alison, you just said that things were not good beforehand and reminded us about the pre-COVID economy, and I just pick up that underlying argument that we’re a meritocratic society and that that will ensure that people get lots of opportunity. Of course, the idea of meritocracy, as you know, comes from sociological satire, from Michael Young’s 1958 book. But that formula of IQ plus effort equals merit has become the universally accepted notion of the society we are. So what’s gone wrong with the concept or its operation that hasn’t delivered the sort of society that the concept of merit might have anticipated.

Alison Pennington: Australia is actually quite a remarkable and unique country in terms of our history and the context for which we would understand merit. I trace that back to the very start of how the colony (Australia was federated in 1901) the start of Australia’s working class was convict transportation. You had people brought over in boats for stealing loaves of bread and perhaps being political organisers or union organisers put into galleys and brought over in ships to Australia to create the colony. After that you come into the era of master servant acts, and for me, I do a lot of labour history stuff and labour economics, and I think it’s really important to know that the first laws around how people would conceive of their work, giving them a good life was about them being tied through laws to a single employer.
And in fact, they could be thrown in jail if they didn’t work hard enough or if they didn’t rock up to work at the right time. So there’s that very pernicious model of the organisation of work at the centre of Australian consciousness. And then out of that time comes the birth of the union movement and labour organisations and civil society organisations. And from that basis, those systems created at about 60 percent union density in the 1920s. Around the 1910s you have the creation of this arbitration system, which was the acknowledgement that hard work wouldn’t always get you what was fair and was yours. The value that you created on the job had to be brought to a court where someone could sit down with employers and workers and say, actually, workers had created this much productivity, this much wealth. Therefore, their wages should go up this much. And so you may remember that famous Harvester Judgement that said wages should be high enough to meet normal needs of an average employee regarded as a human being in a civilised society. And that was tied to the reproduction of a family as well. So in that one judgement, in those laws, those collective laws, you have the creation of norms, which I think are still present today.

Glyn: I am trying desperately to remember the wording of the Harvester Judgement you use the word employee and I thought it said, man, that it was, you know, it was assumed that it was about men who supported households rather than about men and women. Yeah, you know, one of the standard critiques of the Harvester Judgement is precisely that it’s set up well, set up essentially and funded a patriarchy.

Alison Pennington: It absolutely did, it created the blue collar patriarchal family in Australia. But they were not poor!

Glyn: Yet it was so foundational to setting up the nation as it as it operated, and awards are about the last vestige of what was, you know, a national complex system.

Alison Pennington: Mm-hmm. Yeah, it’s so working out the future of the awards, what they’re doing now, being part of my work is I don’t want that to become historic relics. I want to find a way to breathe new life into them because they’re a big reason why we haven’t become America.
I think you would find an average working class person in Australia would say ‘If you work hard enough, you should be able to get up.’ And they do say that, 70 percent of Australians in the last Australia Talks survey said ‘Hard work should allow you to be successful regardless of the circumstances you’re born into’, but also about the same amount of Australians say the minimum wage should be lifted higher. And I think in those two pieces of information, you have the key to understanding merit in the Australian context, which is: people through their collective power created institutions that would give us the fair go. That’s where ‘the fair go’ comes from. And so if you work hard enough in those systems, you will be bestowed with what’s rightfully owed to you, at least a decent wage. Now, that was a long way to get to the the answer to your question, Glyn, which is the reason why the fair go or the concept of merit in that context has fallen apart is because those redistributive labour market institutions have fallen apart, alongside, of course, the loss of, you know, important welfare state goods like a well funded health care system and education system. Australians really believe that if you work hard, you’ll get up. And it’s because we used to have systems that supported that, and those systems have been eroded, especially in the last few decades.

Jeni: We want to understand, Alison, a bit about the connection of that sweeping historical narrative to the lives of people experiencing the consequences. Can you tell us a little bit about your background and how in your mind it informs this kind of discussion and the work that you do, as such a committed political economist?

Alison Pennington: There’s a game and it’s rigged. You can never get out of it. And I still consider it a remarkable feat of luck, combined with public investment that helped someone like me to be able to mobilise out of my poorer circumstances growing up. I am the first in my family to go to university. I come from, you know, a proud but a, you know, a family that needed welfare to survive at all points. I can’t remember any time we didn’t need it. My dad is a plumber and my mum’s a nurse and had various bouts of unemployment. if I look back on my life and think about what are those things that helped me to to get through, it was things like the era of free music education for kids in public schools, we do know that 82 percent of poorer, low SES kids are in public schools, so programs that fund things like music, which is so important for brain development, so important for building collective groups, for passion for your studies. I’m just a really passionate advocate of music education for this reason because I think it absolutely changed my life, but those programs don’t exist anymore. I also got free dental care. Those programs don’t exist anymore. For parents when they’re both working full time – I had to care for my younger brothers from a young age, but I wouldn’t have been able to do that if I didn’t have holiday programs, sporting programs, things that were free that we could walk out of the house and I could hold my two brothers’ hands and we could walk to the park and go do something. And so I look back at, you know, some key things in my life, including phenomenal teachers in the public school system who are losing their hair with stress because the behavioural issues in public schools are out of control. Like you’re trying to teach complex concepts to kids while another one is throwing a chair across the table at you. For all sorts of reasons, schools are at the front line of so many issues of social problems, and it’s remarkable to me that I managed to piece together some portion of luck and just good, strong people within those public systems that helped to pull me out the other side.

Glyn: Alison, just to pursue that, a little more about the perception of how merit and luck operate, the author and social affairs journalist Rick Morton has written: “I didn’t know there was a hierarchy because I couldn’t see the rest of the ladder from where I was.” Given that background you’ve just described and perhaps before university, how are you thinking about the world? How do you sort of make sense of the belief in merit as against the world you can see around you?

Alison Pennington: You know, Glyn, it’s amazing because in Adelaide, where I’m from, there is no real wealth. And I’d always grown up thinking that people who owned their houses and maybe one more were the richest people in the world. I really believed that. The thing about Australia’s economic development is that it’s uneven. Investment has been condensed in the big cities of Melbourne and Sydney, and that’s where all the new professional jobs are. That’s where the highest pay are. That’s where the finance sector operates, which is one of the most largest and powerful sectors. What Rick said is so bang on because I didn’t realise what society I was living in until I moved to Sydney. And living in Sydney, I can tell you I was shocked. I was. Everywhere I went my jaw was on the ground. I’m shocked to go to somewhere like Bondi Junction Mall and see what wealth looks like in a consumer sense. None of that world exists in Adelaide. The inequality in Australia, between states, I think, is not discussed. And I think that’s partly because the epicentre of analysis and the media operates out of the big cosmopolitan cities.

Glyn: We’ll hear more from Alison shortly. But now let’s spend a minute with Rick Morton. Hear him reflect on the challenges of buying a house in contemporary Australia.

Rick Morton: There is something of a social media game that has risen to prominence over the past few years, and it is played whenever a news story is published about a young person and how they managed to buy their first home by age 25 in Sydney. Variations abound, of course. Sometimes it’s about a millennial who was able to amass a property portfolio of two, three or more homes by age 30. The game is very easy to play. One simply reads through the article until about halfway down, sometimes right near the end, where they will almost always discover the crucial caveat our story subject or author will mention casually, as if it were scarcely even relevant, that the young investor received a $50000 cash deposit from one or both parents, maybe $100000 again. There are variations. Others may have lived at home with their parents until age 30 and not paid them rent in order to save more of their own income. Their parents may have gone guarantor or even in one particularly egregious example grandparents may have left our property hero an inheritance. These articles are not rare, by the way, and the game works so well because unless the author of the new story is being deliberately vague, there is inevitably a muffled disclosure of these incredibly salient details, which would, in a normal world, invalidate the entire premise of the piece.
But we are not living in a normal world. We are living under the auspices of a meritocracy and in a meritocracy, a satirical term scrubbed of its original intent. We are taught to believe we are the sole authors of our own destiny. Luck is banished under such a system. I don’t blame people for wanting to get a foothold on the property ladder. Were it an option for me to borrow money from my mum and buy my first home in my twenties, I would have done exactly that. Have you seen the prices out there? Because of my bad credit history, itself a symptom of the crisis of financial instability in my family and early adult life, I would need a 20% deposit to buy in Sydney, where I live and where almost all of my work is located, for a two bedroom apartment in an old block, somewhere between the outer inner west and inner south west. I’m looking at at least $100,000 just for the down payment, and at the age of 34, I’m one of the lucky ones, if you can believe it.
My circumstances are such that in the next year or two, I am looking to do just that, and when I get there, it won’t be with the help of my parents or extended family. There will be no inheritances coming my way to soften the blow. No guarantees and no living at home rent free. None of these are options. It is conceivable, because I’ve had these conversations with acquaintances, that when I become a homeowner, others who had all the help they needed will see us as equals. That we both achieved this coveted status in Australian life because we both worked hard. After all, the outcome is the same. So why should we bother arguing over the inputs? This is just one example, of course, but I have spent my entire life running headlong into this attitude. And it is tricky to navigate because one of the defining characteristics of the meritocratic myth is that you only truly see through it when you have been deprived in one way or another. And if you have not been denied something in this life, such as love or stability or resources, it is very hard to see how things might have been.
In the words of Big Yellow Taxi, you don’t know what you got till it’s gone. Similarly, if you have not been tested in the myriad ways that disadvantage can test us, it’s not exactly something a person would like to concede, at least not in a world where we are convinced of our thrilling competency. When I wrote 100 Years Of Dirt, I made the point that privilege is the absence of contest, the privilege you collect through financial power or wealth, being the right skin colour or culture, able bodied, of sound mind, not too queer or gay or confusing, the less friction you experience. At university, I watched the students from well-off families glide through as if on a cushion of air. It’s not to say they did not struggle. Of course they did, but when they did, they had options. In the end, they paid other kids to write their law assignments so they could party, and I was the kid they paid so that I could live. I dropped out of university and never finished. I still see one of those kids on TV regularly now, a high profile criminal defence lawyer, and remember the price of our transactions.

Jeni: So in light of that, Alison, what does the idea of social mobility mean to you, not just as an economist, but as an Australian?

Alison Pennington: For me, social mobility would be all of the human needs being met in the ways that our government and our, you know, financing capacity can. And our policy capacity can. And every generation wants to do better than the one they came from, I think that’s inherent to human beings, that desire to improve. I think it’s inbuilt. And I like to think of that as what a great and beautiful biological kernel that we could be tapping into far more and supporting. But in order to create a society where everyone has the capacity to have a go in and then get a go, as Scott Morrison would say, you have to allow people to have food on the table, a secure roof over their head and security in income. In Australia now, half of all jobs are at the point now where people are working some form of precarity, whether that be casual work or gig work, other forms of, you know, insecure part time underemployment.
What this is doing is creating a society where people can’t think beyond the week that they’re in. They’re riddled with anxiety. They don’t know what comes around the corner. And as someone who has also lived like that, most of my jobs have been precarious ones, and in that type of insecurity, the human brain can’t actually develop properly, and there is so much research that shows what poverty does to the human brain. I remember the day when I was so angry when I realised what was going on with my brain, and that actually three meals a day and a secure roof over my head was allowing me to think in a way that I had never been able to in my life before. And I thought, how many millions of people are denied that opportunity? And I was angry for that. All in all it’s about creating a society where human needs are met and the human brain is given its full capacity to develop, to express itself, to, to find, to be curious, to be able to seek and fulfil that curiosity. I think that’s what it’s about.

Glyn: What does it take to break the cycle of disadvantage? And what was it that helped you move to a different sort of life.

Alison Pennington: I brought up music before and I’ll be forever thankful that I grew up in an environment where… so my parents, they played in a folk band when I was younger, and so I always grew up around music. I think music’s powerful because it gives you an outlet for understanding your pain, understanding the struggle, so to speak, coming together with people, creating things together and that sense of solidarity or that support and connection you have with others, is one of the most powerful things you can learn, I think if you are in circumstances beyond your control because it gives you a format again to express, but then also to to get out and to to to fight, to do things differently.

Jeni: It strikes me that so much of what you’re talking about exists often in the realm outside our economic conversations. As an economist, how should we value those kinds of human experiences in a way that might make a difference to their provision?

Alison Pennington: Contrary to the way that the arts and culture has talked about, it is an incredibly important source of innovation, of creativity and all of the social goods that it brings and those things are imported across the economy. And so the way I see it, arts and culture is like a public good. It’s like health care, it’s like education. And if it’s a public good, it should be accessible, affordable and participatory for everybody because everyone has stories to tell and everyone needs health care and education. We’ve been living since the 1980s in a period which, you know, in political science, we broadly call neoliberalism, but it’s a period where we devalue public goods. We devalue those things that give us good, meaningful, healthy lives. We’ve devalued the things that matter, almost matter most. Every kid, regardless of their background, should have access to a music education because it is just so proven to be so powerful for the way the brain is constituted, as well as social connections and the things that give them all the tools that a human needs really to navigate the world.

Glyn: So can we draw that out a little? Alison, what do you think building back better after COVID looks like? And what are the sort of interventions that you’re looking for in a more equitable meritocratic society in the sense in which it might be understood?

Alison Pennington: For me, the clues are in recreating the world of work, which is the main way that people create meaning in their lives, a sense of contribution and commit to their community and be part of networks. I think work is a really important area. We need to rebuild good jobs, really. And I think a lot of Australians still have this idea of a good job, it’s traditional secure, full time, year round access to basic paid benefits like sick leave and annual leave. And we certainly need things like sick leave in a pandemic. It’s not just the quality of the jobs, there has to be more of them, and for that, we need to have the reinjection of government back into job creation. We need to invest in and expand our Medicare system. It has done a tremendous job through the pandemic, but it desperately needs way more spending, especially to get through the next year or so of the pandemic. But there’s a big case to be made to expand the public health care system to include things like mental health, dental care. We need to be thinking about housing. There are larger and larger layers of Australia that have been locked out of the most important, one of the most important, human needs of secure housing, because we are at this point where all our policies are saying it’s better that we turn housing into an investment good.

Jeni: So these aren’t hypothetical questions at the moment, are they? The discussion around pathways out of COVID is front page. So this COVID moment, it strikes me, is a kind of fork in the road. We might see the embrace of COVID recovery plans that help people not not just bounce back but even bounce forward. Or we might see this pandemic is just another in a series of crises that’s exacerbated inequality and left more people even further behind. How optimistic are you that we will choose the right path out of COVID?

Alison Pennington: Historically, I see a lot of parallels to this time with the 1930s depression. Similarly, people were, you know, fatigued by war. They were fatigued by depression and a great sense of hopelessness existed at that time as well. And they were scared about the prospect of future wars. And basically, I think that we are in similar times now, but for me, where I get great hope from is what happened throughout history is what came after the depression. Yes, there was a bit of a detour through the rise of fascism. We can see some elements of these forces rising in Australia and across the world at the moment. But what also happened is we had a great moment of reconstruction, a huge government public investment into creating a whole new world for Australia. And that was partly because people pushed for it. People were wanting something to look forward to on the other side of government intervention through things like rationing into their lives and of war. They didn’t want to go back to times of war, and I think that’s the kind of thinking we have to be fostering. And that’s where, yeah, government stepped in and spent a lot of money and created a lot of the infrastructure, including things like communications, infrastructure. A lot of the public infrastructure we have now was all built in that time, and we need to recreate strong public institutions that allow for redistribution. And so that means not just ensuring that people receive a decent level of pay and a quality of life from their work, but also the recognition that all of this very valuable work gets done in our society that is not paid for, that is not on the job and that’s unpaid caring work. That is all of the work that gets done to create value. And that’s that work historically done by women, disproportionately done by women. Increasingly, men are doing more of it, but it’s still mostly done by women. Women doing that work should be able to live good quality, above poverty, way above poverty existences because that is valuable work and we should acknowledge that through our income support system. And this is yeah, an area of work I really want to focus on is to point out that we can have a post-COVID national economic reconstruction. We can do it. And I think we are similarly fatigued and I think increasingly people know they don’t want to snap back to what we had before, because we were almost in recession before. We had high rates of poverty, declining quality of lives. It wasn’t a happy picture, but we can absolutely create something on the other side of this.

Glyn: We’ve been listening to Alison Pennington, who’s a senior economist at the Centre for Future Work at the Australia Institute.

Jeni: Alison has this idea that building back better requires equal parts rage and optimism, which is a frame that I love. But what do you think? We’re hoping that you, our listeners, will get in touch. Tell us your thoughts. Give us your feedback. Ask us your questions. If you want to reach out, you can do that at lifeslottery.com.au.
So thanks for listening. I’m Jeni Whalan.

Glyn: And I’m Glyn Davis.

Jeni: Next episode we’re talking to Charlie Leadbeater about possibility thinking, about love and about creativity and their role in getting us to better futures

Glyn: So tell your friends and please join us here on Life’s Lottery.