Good parents tell their children, “money does not grow on trees”. Unfortunately, some people did not get the memo and reached adulthood assuming the government functions like a pushover of a parent. ACTU secretary Sally McManus is calling for wage subsidies to continue for as long as COVID-19 remains an issue. But even the government cannot keep printing money while the economy barely coasts along. 

Unions calculate fair wages based on what a worker would like to earn to subsidise a certain lifestyle. For most of us, there is no upper limit on what we would like to make. Even now the Maritime Union of Australia (MUA) is asking for fewer hours and a minimum wage of $119,000. The average wage in Australia is only $64,000. 

Businesses calculate wages according to the value a worker can provide. For example, a barista takes coffee beans, milk, and sugar and turns them into a flat white worth more than all the ingredients combined. They created value which every person standing in line at the cafe and offering up their $4 recognises.   

The business owner adds less tangible, but equally important, value by bearing risk. Even if no one buys a coffee on a given day, she still pays her baristas for their time and takes a loss assuming tomorrow customers will come. However, no business can survive without customers forever.  

Currently, the government is paying out wages through JobSeeker and JobKeeper and bearing some of the cost of lockdowns. They assume the economy will rev back to life and the tax dollars will come pouring in. However, right now we have yet to see the light at the end of lockdowns. 

The dollar is only worth the sum of the goods and services produced by people. Right now people are generating fewer life-enhancing assets, while the amount of money circulating in the economy increases thanks to government handouts. As a result, each dollar represents less real value. 

The government, much like the business owner hoping for more customers, is betting on future tax dollars. But until the government stops locking down and causing uncertainty, businesses can’t take on risk to produce real assets that make our lives better.   

Proponents of Modern Monetary Theory believe the government can and should spend money to create wealth. But by pumping money into the economy we get inflation.  

While taxing more and paying back some of the government’s debt helps restore some balance, the government generates an arbitrary inequality.  

Currently, income inequality occurs between those who successfully take on risk and add value to society versus those who produce less. 

We can complain about Jeff Bezos’ massive net worth, but few can say we haven’t benefited from the conveniences of Amazon. We can rant on Facebook about Mark Zuckerberg (assuming the bots don’t block us), but he invented a medium we use almost every day to connect with friends and family. Few people inspire as much hate as Charles and David Koch. But Koch Industries have manufactured many of the primary and intermediary goods that make up things we use every day, from the petroleum that comprises our plastics to the fertilizers that grow our food.    

When unions call for salaries that are not tied to the value a worker adds, and when governments give away money, we get the worst kind of inequality. Instead of wealth tying itself to merit, the government decides who wins and who loses. Society is divided into those with government jobs, government contracts, and government subsidies and those without.  

The government needs to open up Australia and get out of our way. The Australian people are grownups, capable of generating real wealth and adding value which will be backed up by real earnings. We do not need the government to give us an allowance or entitled unions to beg for more lunch money. 

Emilie Dye is the Executive Director of the HR Nicholls Society.