Kim Macdonald: How AI-driven job losses are undermining public services, prompting calls for a robot tax

Every time someone loses their job to artificial intelligence, government coffers suffer. While we need technological progress, the risk to government income and services presents a public policy problem that needs to be solved. When someone is replaced by a machine, there is one fewer person contributing income tax. There is also less payroll tax going into government coffers from their employer, which again means less money for schools, hospitals, defence and the like. Before you disregard this as a distant problem, let me assure you it is already happening. A friend — who was recently forced to sign a non-disclosure agreement after being made redundant due to AI — has little chance of getting another job in her increasingly automated industry. While her next move is uncertain, the next few months of her life will affect us all because she may — at least temporarily — draw on the public purse through the unemployment benefit. Meanwhile, her employer, who not only saves on her wage and payroll tax, pays only 25 per cent in company tax given his company turnover is below $50 million a year. This represents a net loss for the public kitty. While job losses sting, technological progress is inevitable and even desirable. Without it, night-men would be removing waste and children would be sweeping chimneys. But technological advance is different this time because of the unprecedented scale of job losses about to hit. McKinsey & Company forecast that technological change, combined with other factors such as the ageing population and the move to net zero, will force up to 1.3 million workers — 9 per cent of Australia’s total workforce — into entirely new roles by 2030. That’s a lot of people “between jobs.” McKinsey does not consider if there will be net jobs losses or gains from AI, but the World Economic Forum in 2023 predicted a global net loss by 2027, with 1.29 jobs lost for every new one it created. Microsoft co-founder Bill Gates once suggested a robot tax, which is effectively a levy on the higher profits that come from AI-driven productivity. The trick here is to levy it at a rate that returns money to the public purse without killing innovation.