The Albanese government released its employment white paper last week.

It presented the document as a major piece of work, comparable to white papers from past eras.

It outlined the government's ambition to fix major problems in our labour market, and it contained a new definition of "full employment."

But was it ground-breaking? Will it lead to cultural change?

The scourge of involuntary unemployment

Let's start with some positives.

The government says the concept of "full employment," as the Reserve Bank defines it these days, is inadequate.

It says what the RBA considers full employment has co-existed with a large amount of "involuntary unemployment" in the economy, and it wants to change that.

This is important.

The debate about involuntary unemployment stretches back more than 80 years and it's really interesting to see the government resurrecting it.

I'll show you what I mean.

In 1936, British economist John Maynard Keynes published an influential book called The General Theory of Employment, Interest and Money.

It inspired a wave of "full employment" policies that washed across the democratic world in the 1940s and 50s.

Keynes showed, in that book, that the traditional way of thinking about unemployment was ignorant and damaging.

He said orthodox economists assumed there were only two types of unemployment: frictional and voluntary unemployment.

But there was actually a third type — involuntary unemployment — that described the reality of millions of people who wanted to work but couldn't get work because there wasn't enough demand for their labour.

He said "full employment" would only exist when involuntary unemployment disappeared (leaving only frictional and voluntary unemployment).

And his book opened peoples' eyes.

It inspired policymakers in countries like Australia to deliberately stimulate economic activity to create enough demand for labour so involuntary unemployment would collapse as a category.

See the graph below.

It shows what happened to Australia's unemployment rate in that post-war era of full employment policy.

Full employment and unemployment average

Now, fast forward to today.

The government's Employment White Paper is clearly drawing on some of that thinking.

It says the modern definition of "full employment" used by the RBA is far too narrow, and our conversations about full employment have to admit the reality of involuntary unemployment and high levels of under-utilisation of Australian workers in the modern era.

It's also revived some wisdom from older conceptions of full employment by reminding us that genuine full employment has qualitative aspects too.

What does that mean?

It means the quality of a job is also important for people, and jobs should pay fair wages and be reasonably located. And if someone's unemployed, it should never take them so long to find a job that it starts to demoralise them.

Those qualitative aspects of full employment were emphasised by William Beveridge in 1944, in his landmark work "Full Employment in a Free Society", which I wrote about a few months ago.

According to Beveridge, if full employment meant anything it meant an abundance of jobs that paid decent wages, where unemployed people don't languish in unemployment, and where labour markets slightly favour workers, not employers.

So, the Albanese government is drawing our attention back to the scourge of involuntary unemployment, and it's emphasising the qualitative aspects of abundant work, to say that that's what full employment really is.

So that's all really interesting.

A bit of courage, but not too much

Strangely, after building the case for a "new" definition of full employment, the government's white paper feels like it melts away.

It doesn't promise to use a muscular set of policies to drive involuntary unemployment out of the system quickly.

Instead, it uses a lot of words (the paper has 264 pages) to explain something meek, which is: it doesn't actually want to be too disruptive.

So, the paper says the Reserve Bank will continue to use its too-narrow concept of full employment to make decisions about monetary policy, but the government will try very hard to remove supply-side barriers to employment to help structural unemployment decline over time.

That way, it says, if things go according to plan, the RBA should eventually be able to sustain a much lower level of unemployment than it has for decades, with much lower rates of labour under-utilisation.

Does that sound revolutionary to you?

It doesn't to me. It sounds like the same ambition successive governments have had for 30 years, ever since the Reserve Bank began targeting inflation in the early 1990s.

And in a moment of cognitive dissonance, the white paper even criticises the outcomes of that familiar policy approach.

"Despite its many successes, the Australian economy has rarely achieved full employment for extended periods and there have been prolonged periods when the available labour force was under-utilised to a much greater extent than it is today," it says.

So, it's hard to avoid the feeling that this white paper is slightly confused, or is saying a lot about not very much.

But then, maybe that's unfair.

Maybe it does have a big ambition but it's obscured by verbiage. Or maybe it's deliberately obtuse, and we'll have to wait to see what type of legislation the government tries to pass through parliament before we understand what its ultimate agenda is.

Would it survive a change of government?

So where does it leave us?

Would it be easier to be enthusiastic about the white paper if its vision was clearer and its ambition bolder?

On that score, it does compare unfavourably to the 1945 White Paper on Full Employment.

That 1945 paper was much smaller (it only contained 131 paragraphs), was written in the simplest language, and it had a major impact.

It declared its intentions from the start: it wanted to change Australia.

When John Dedman, the minister for Post-War Reconstruction, presented the paper to parliament on 30 May 1945, he didn't mince his words:

"I believe that this white paper constitutes a charter for a new social order.

"The old order of the inter-war years had as its prime objective rigid adherence to a certain financial policy. If this entailed 30 per cent unemployment and dwindling world trade, then, according to the pundits of that day, these were necessary evils.

"What a miserable social structure they built on their own false foundation."

He explained clearly how the white paper was structured:

"First, it sets forth boldly and unequivocally the government's intention to secure full employment for the people of Australia after the war.

"Secondly, it outlines the method by which the government proposes to achieve this aim.

"Thirdly, it examines the special problems which will face the Australian economy in the transition from war to peace."

And he said Commonwealth and State governments had to accept responsibility for stimulating spending on goods and services to the extent necessary to sustain full employment, because the welfare of everyone depended on it:

"The policy of full employment is the government's positive contribution to the security of the individual. Full employment spells opportunity, and opportunity opens the way for achievement [...]

"This white paper is an affirmation by the government of Australia that it intends to pursue that policy with the utmost energy and determination."

Clear and digestible. There was no guessing what the policy was or what the government planned for the country.

And when the government lost power four years later (for a variety of reasons), that full employment policy was popular enough to survive the change.

In fact, the victorious Liberal Prime Minister, Robert Menzies, adopted it as his own and pursued full employment for the next 16 years.

Can we see that happening with this white paper?

The special commission of inquiry that opened in November 2022, is examining unsolved deaths suspected of being LGBTIQ hate crimes in NSW between 1970 and 2010.

Justice John Sackar, who is presiding over the inquiry has described police conduct as "unprofessional" for failing to produce documents in time.

He was due to submit his final report by August 30, 2023, but the deadline has been extended to December 15, after police delayed providing documents and the discovery of new forensic evidence.

Today Counsel Assisting Peter Gray SC, said the inquiry had partly been extended after NSW Police submitted more than 50 new witnesses should be spoken to before any findings are made.

Mr Gray said the 50 individuals have been asked to provide statements, but nearly half have not responded.

He said that since at least 2016, "serious ongoing difficulties in locating documentary records and exhibits in unsolved cases" has been well known within the police force.

This is making it difficult to reinvestigate unsolved homicides.

Mr Gray referred to a police internal document submitted to the inquiry, dated 2018, which outlined the task officers were facing.

"One internal police document in recent years estimated that if the unsolved homicide team continued to review cases at its then current rate, it would take 900 years for existing cases to be reviewed," he said.

"I note in passing that even as late as last week, in mid-September, yet more belated documentary production was still being made by the NSW Police Force.

"That production of material last week, was in response to a summons issued in August 2022, more than a year ago."

Mr Gray told the inquiry NSW Police represents itself to the community as having a "competent and adequately resourced team to deal with unsolved homicides".

He noted it was common for a coroner to refer matters to the unsolved homicide team.

"It is assumed that, when doing so, the coroner and relatives of a deceased person expect ... the matter will be considered by the unsolved homicide team within a reasonable time, and not a period of time that can be measured in centuries."

A number of high-ranking officers have been questioned at the inquiry about incomplete records, lost exhibits, and investigative failures into unsolved LGBTQI deaths

we have reached out to @Dirt_Owl@hexbear.net for comment

down with cis

The national children's commissioner says she has written to the Northern Territory's police minister, calling for an NT Police promotional video of officers chasing and arresting two teenagers to be taken down.

Key points:

• Bodycam vision showing the arrests attracted hundreds of comments
• The majority of users praised police with some calling for dogs to attack the youths
• Police and the NT government have defended the content as showing the reality for police

WARNING: This story contains details some readers may find distressing.

The video, which is overlaid with up-tempo rock music, shows officers and a police dog pursuing one of three teenage boys through bushland outside of Darwin after intercepting a vehicle.

The arrests, made on Wednesday afternoon, came after the three 16-year-old boys allegedly stole two vehicles.

The boys were intercepted using tyre deflation devices in Darwin's rural area and charged with multiple property offences.

After being posted to the Facebook page of the Northern Territory's Police Fire and Emergency Services on Thursday evening, the video had received over 1,100 reactions and 220 comments.

The vast majority of comments praised the actions of police.

But several comments — which were removed after the ABC approached NT Police — included remarks such as "hope the dog had a taste" and "let the dogs take a couple of chunks".

The big four accounting giants racked up billions of dollars in auditing fees in the private sector as the quality of auditing declined, heightening concerns it could trigger another Enron-type corporate collapse.

The infiltration of the big four — EY, Deloitte, KPMG and PwC — in government departments has been well documented. What is less well known is their role in the private sector as auditors sprinkling holy water over company financial accounts, as well as offering consultancy services spanning tax minimisation advice, cyber security, IT and strategy.

Their power extends to the boardrooms of corporate Australia, where hundreds, possibly thousands, of alumni are directors of the most powerful organisations.

Governance and proxy adviser Ownership Matters crunched the numbers for 7.30, using four years of data, to unveil a series of uncomfortable truths about the depth and breadth of the big four across the country's ASX 300 companies.

Until now, the big four accounting firms had built themselves an aura of credibility and trust in government and corporate Australia.

The data reveals that 97 per cent of the external audit work of the ASX 300 companies was done by the big four.

These companies shelled out an estimated $4 billion in auditing and consulting fees to the big four between 2018 and 2022. But the concentration is in the biggest companies, with the top 20 ASX companies accounting for 50 per cent of the fees.

Even more concentrated are the big four banks — CBA, Westpac, National Australia Bank — and Macquarie Group, which spent a combined $832 million over four years, making them the biggest users of the big four's services.

But the real figure is unknown as listed companies only disclose consulting work done by their auditors, not other consultancy work.

And when it comes to servicing the $3.5 trillion superannuation industry, unlisted companies and trusts, the figures could be even more.

Alarmingly, while the big four have been dominating auditing, corporate watchdog ASIC has found the quality of auditing is declining. It is something Professor Allan Fels told 7.30 is a sleeper issue that could trigger a corporate collapse.

"We know that the global financial crisis of 2008 was partly triggered by bad auditing," Professor Fels said. "I have deep fears that something similar could occur to topple the global and the Australian economy in the coming period."

Last year, ASIC's inspection reports found deficiencies in a third of the biggest firms. Separate reviews found negative findings in 50 per cent of Deloitte's auditing cases and 48 per cent of KPMG's.

Accounting professor John Dumay described it as a market failure.

"To me, the value out of the audit is to be able to go to the investor and say, 'we have a good company, we're performing well, the auditors come and have given us a tick in a box, a clean bill of health, you can trust what we've got to say.' That's what an audit is supposed to do," he says.

"When it doesn't do that, because there are deficiencies in the audits themselves, then the system breaks down." People silhouetted against a white and blue KPMG logo.

Auditing plays a crucial role in the integrity of the financial system. Banks, investors, staff, suppliers and superannuation funds all rely on an auditor's independent assessment of financial accounts to ensure they can be trusted to make informed decisions.

When it fails it can be catastrophic. The collapse of Enron torched tens of billions of dollars of shareholder and employee money after it emerged that its financial accounts were a sham and it couldn't pay the bills.

In Australia, there are at least 10 legal actions underway, all alleging substandard auditing and advisory work across the big four firms. The cases include Noumi (formerly called Freedom Food Group) and its auditor Deloitte, the collapsed construction group Hastie Group and sandalwood producer Quintis, all of which misreported their accounts despite their auditors giving their stamp of approval. When the truth came out, shareholders took a drubbing.

Against this backdrop, Labor senator Deborah O'Neill recently reopened a parliamentary inquiry into the auditing industry to investigate the structure, deficient regulation and conflicts.

She will also look at why ASIC decided as part of a restructure it would abandon inspection reports, shrink the audit team and dump its highly regarded chief accountant, Doug Niven.

"It's hard to believe that this relatively new program, which was actually shedding some light on what was going on inside the big four, has been lost in a reshape of ASIC," she says. "I have grave concerns if nobody is watching. That's the perfect conditions in which further degrading of the quality of audit is likely to occur."

Senator O'Neill said conflicts had become the business model of the big four. "What we're observing is a business model where the conflict of interest is the model of business. That's how you grow your business," she told 7.30. "It's a failure of regulatory oversight that's allowed this to fester. And we cannot allow it to continue."

She says the longer an audit firm is inside a company, the more enmeshed relationships become.

It means the independence of the audit firm becomes questionable, which can impact their appetite to stand up to clients if accounting irregularities are suspected. If auditors act in the dual role as consultant, that independence can be further compromised.

Ownership Matters found that non-audit fees as a proportion of audit work for the audit firms was 39 per cent across the ASX300 companies between 2018 and 2022. This is where the big four act in the dual role of independent auditors and consultants, which is fraught with conflicts of interest.

Construction and developing giant Lendlease has had KPMG as its independent auditor for more than 65 years and their head offices are in the same building in Sydney.

They are also embroiled in a tax scandal with whistleblower Tony Watson, a tax lawyer whose career fell apart when he accused his client Lendlease of double dipping on tax, which he believed was wrong.

"I told them that they were stealing from our children, they were stealing from taxpayers," he told 7.30.

He joined law firm Greenwoods & Herbert Smith Freehills in 1985, quickly moving up the ranks to become partner, managing its biggest client, Lendlease.

But things started to unravel when he told a senior executive he disagreed with a tax scheme that related to their retirement village acquisitions. He estimates it boosted profits by up to $300 million, which he says they weren't entitled to.

He says PwC was brought in for advice and backed the scheme. KPMG signed off on the accounts.

Mr Watson alleges in a court case lodged in the Federal Court against his law firm and Lendlease that by 2014 he was dumped from the Lendlease account. He spiralled into depression and while he was on unpaid sick leave, he was terminated.

"I just got a letter from them saying we've decided to terminate you," he tells 7.30

When he recovered from his breakdown, he says, he decided to revisit his concerns about Lendlease and its tax scheme, this time meeting senior Lendlease officials and a partner at PwC as well as writing letters to the company.

In one email, he says Lendlease is "taking an aggressive and wrong view" in its tax deductions. In another, he warns the ATO will not fall for it. He also tipped off the ATO, which is auditing this aspect of the company.

Now he is waiting for the ATO to give its verdict and for his legal action to go through the courts.

In a statement, Lendlease said it "periodically conducted robust audit tender processes," and that its auditor "KPMG had the strongest credentials and commercial insights" after its last tender a decade ago. Last year, it said it would conduct an audit tender process in 2023.

In a statement, it said, "in May 2023, we paused this process with the intent for it to be resumed at a later date". The company said it was confident its tax treatment was consistent with the law.

KPMG said in a statement: "We believe directors are best placed to determine the need for a change of auditors." It said its focus was on "delivering high-quality audits, and a deep understanding of the business is critical to achieving this". It added that "KPMG has comprehensive policies and processes in place to manage potential conflicts".

KPMG said ASIC's inspection reports were disappointing. It said it agreed with some but not all of ASIC's findings and it had launched an audit quality transformation program.

Deloitte said it was committed to delivering the highest quality audit services to clients and it remained focused on doing everything it could to deliver "trusted and expert" audit services for its clients.

ASIC said moving forward, it would combine its annual audit reviews with surveillance of financial reporting and that "targeted reviews of the quality control systems of the largest six firms will also be undertaken from time to time".

It said continuing to provide annual individual reports on the biggest firms "would not provide a meaningful measure of overall audit quality".

PwC declined to comment on Mr Watson's allegations but said: "PwC firms are subject to our global tax code of conduct, which requires tax positions be supported by credible basis in tax law."

desu