Hockey's budget black hole solution

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Image courtesy of The Roast TV 21 April 2014)

As an increasing number of large and small Australian companies outsource jobs to countries like the Philippines, Arthur Burgif asks whether keeping these jobs in Australia would mean more income tax and a smaller hole in Hockey's budget.

JOE HOCKEY and Co believe that the Australian economy can be fixed if they get the pennies back from the pensioners and those with long term illnesses whose medicines are covered by the Pharmaceutical Benefits Scheme.

Hockey and Co believe “with their handsome salaries and benefits” our working poor should be denied penalty rates and weekend shift allowances.

They have solid faith in their inter-generational report and that a GP co-payment will fix the budget.

Pennies won't make significant changes to the economy but getting millions of outsourced jobs back along with their income tax will. An investigation into Filipino call centres by Fairfax journalist, Lindsay Murdoch on 13 January 2013 highlighted the scale of outsourcing:

‘638,000 Filipinos crowd into open-plan offices in purpose-built centres across the Philippines in an industry that reaps a phenomenal $11 billion a year for the impoverished country, which is overtaking India as the biggest call-centre operator in the world.’

But here’s the problem. Outsourcing work such as call centres to improve the bottom line is no longer just the practice of large corporations. Smaller companies have caught on and even complex specialised services are outsourced. This translates to more jobs lost in Australia:

‘An increasing number of large Australian companies - including Telstra, Vodafone, ANZ, Westpac, Jetstar, Foxtel and Macquarie Bank - are using what are known as business-process outsourcing (BPO) companies in the Philippines to make or receive Australian calls or to communicate with customers via the internet. But many smaller Australian companies are also using Filipinos for often complex specialised services, such as accounting, chasing debts, responding to complaints, writing software, file transcriptions, organising internet and social media campaigns, activating sales accounts, dealing with dissatisfied customers, reactivating subscriptions or insurance covers, and organising loans.’

Outsourcing has occurred under successive governments although it peaked during Howard’s era when the economy was in good shape. With plenty of jobs around, it went unnoticed.

Unemployment figures 1/1/06-1/1/15. Source: tradingeconomics.com

Over the years, many businesses closed their Australian operations and moved overseas driving thousands of Australians to join jobless queues. We’ve seen our iconic Qantas move thousands of jobs offshore. To add insult to the injury, in 2012, the federal Labor government approved an Enterprise Migration Agreement for Gina Rinehart’s $9 billion Roy Hill Iron Ore project in the Pilbara, allowing her to ‘import more than 1,700 foreign workers to a mining project in Western’ as reported by ABC News.

Just imagine if all these companies operating on Australian soil – profiteering from Australian citizens and resources – did the right thing and hired an Australian work force. They might not make the same profit on wages but would surely profit from a stronger economy boosted by a stronger job market. Rather than the budget being in a "black hole", it would be "back in the black" in no time. 

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Hockey's budget black hole solution

As an increasing number of large and small Australian companies outsource jobs to ...  
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