Monthly Archives: April 2011

Australia’s dubious and enduring political mantra, ‘Go For Growth’

Have a read of this excerpt from Prime Minister Julia Gillard’s speech, delivered at the Sydney Institute (Luna Park “campus”), 13 April 2011:

“Friends, we have a fiscal framework aimed at making the boom last and not adding to the boom’s inflationary pressures.

And we have a policy framework aimed at ensuring all Australians benefit from the opportunities created by the boom.

To appreciate this policy framework, I think it is necessary to appreciate some of the contradictory elements of the economic context.

What I think of as “patchwork pressures” in our economy, where some parts of the economy are strained by growth while others risk being left behind.

Because mining is especially profitable at the moment, it rewards investors and pays workers well.

Investment, equipment and workers are drawn from other parts of the economy, like a magnet dragging iron filings towards it.

In mining areas, the boom has lifted housing costs, it forces non-miners to raise wages to keep workers and it puts pressure on infrastructure like roads, ports and rail.

The record high for the Australian dollar lowers prices for imports – which is good for consumers – but it does make it harder for our exporters to compete.

Mining’s hunger for equipment and workers can also raise costs and make it harder for these non-mining sectors to compete, compounding the high dollar’s effects.

All these pressures require careful management.

So to manage these pressures we have sought to bolster productivity and balance growth:

By improving vital economic infrastructure – roads, rail and ports so we better get goods to market and people to work – with the NBN providing the most vital infrastructure of the future.

Connecting regional Australia – regions of growth and regions needing more growth – to the economic capitals of this country, and the world.

By cutting company tax cut and increasing tax breaks for small businesses, all funded by the mineral resource rent tax, so the most profitable miners increase economic reward and opportunity in other parts of the economy.

By revolutionising our approach to human capital – the most important asset for dealing with structural economic shifts – with deep integrated reform policies to improve the quality of education in schools today.

By record skills investments and growth and reform of universities.

By developing a new, detailed regional agenda so that we understand each part of the nation and engage its local leadership.

By reviewing the GST carve up in order to marry up the “fair go” principle which informs federal financial relations with the realities of today’s economy and today’s reform needs.

By reforming our skilled migration 457 visas to end the rorts and get skilled labour to employers who need it.

Friends, these are economic reforms and responses to deal with the “patchwork economy”.

But “patchwork pressures” are not only felt by industry or something to be distilled in a set of statistics.

These patchwork pressures have a human face as well.”

‘The Dignity of Work’, speech delivered by PM Julia Gillard at the Sydney Institute (Luna Park), 13 April 2011.

What was most salient in Gillard’s speech was that her government’s natural response to economic “pressures”, seeks “to bolster productivity and balance growth.” And by balancing growth, I take it that they mean providing other areas of the economy with the opportunity to grow, so that there is growth, somewhat, across the board. The balance would also be achieved by slightly constraining those areas where increased growth has started to have unhealthy effects on the economy.

What is a seemingly benign remark on the surface is actually a core dilemma. Have we consciously considered what economic growth means to Australia? Have we asked, how much growth is sustainable? What are the positive and negative consequences? In which sectors and regions should growth be encouraged?

We may have addressed these concerns in passing and at a very superficial level, but I haven’t seen a public throw down over the concept of growth. What was once a description rightly used decades ago, “growth is good for the economy” has now become an economic and political prescription, “we must have growth, it is always best.”

I’d bet that the average Australian does not think to question what they are told when it comes to growth and economics, and who could blame them? It’s dry, incomprehensible at times and the ideology behind the economy as a whole is not an everyday concern. There are other things to worry about. Issues that affect us much more directly in our day-to-day activities (except if you’re in the financial sector, of course) than whether the economy grows, where that growth occurs and what the practical, ideological and political effects of that growth is.

Of course we all want our economy to travel well. Every government and nation does. It usually means that we materially prosper. But what if there were other ways of measuring the success of our economy and the prosperity of our society? I know, you may have just panicked. What? We’re questioning growth? Just pause for a moment and consider what Professor Tim Jackson has to say (take note, he advises governments, including the British, about economic growth and sustainability).

In his book, ‘Prosperity Without Growth’, Jackson writes a comprehensive analysis of the global economy in general and suggests a different kind of ‘economics for a finite planet’. Now I don’t want to give anything away because Jackson is so eloquent and fascinating to listen to that it would be much better for you to encounter his ideas first-hand.

Watch this 20-minute video of a lecture he delivered at TED talks, it is mind-boggling. I had to watch it twice. But keep in mind it is only a brief run down of his main arguments.

And if you’re curious and want to understand his proposition fully, check out the 2010 Deakin Lecture he delivered in Australia on podcast at Radio National. It’s well-worth the time.

Please, if you have any responses to the video or podcast, I’d love to know what you think.

Thanks for reading.

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The perversion of social democracy in Australia

This post: ‘The Perversion of Social Democracy in Australia’, was originally published here at the ABC ‘The Drum’ website 11 April, 2011.

The somewhat under-recognised British historian Tony Judt (1948-2010) delivered a landmark lecture in 2009 called, ‘What Is Living and What Is Dead In Social Democracy?’ In it he raises remarkably poignant and palpable points regarding the origin, the flourishing success and the latent decline of the social democratic tradition. What is most haunting is just how closely Judt’s observations can be applied to the nebulous operation of social democracy in Australia today and its place within its local ideological home, the Australian Labor Party.

I don’t think I’m taking a great leap in saying, we all have an intuitive feeling that Labor has a pervasive inability to communicate its policies to the public. We might even be tired of hearing about this communication and identity crisis that never seems to die. To further state the obvious, even the primary objective stated in Labor’s constitution appears somewhat dislocated from those quintessentially “Labor values” of greater social and economic equality, public ownership and services, fairness, labour rights, social justice and equal access to opportunity.

“The Australian Labor Party is a democratic socialist party and has the objective of the democratic socialisation of industry, production, distribution and exchange, to the extent necessary to eliminate exploitation and other anti-social features in these fields.” (National Constitution of the Australian Labor Party, 2009)

This contemporary Labor values confusion was also plainly obvious when Prime Minister and Federal Labor Leader Julia Gillard delivered the Inaugural Whitlam Institute Oration in Western Sydney on March 31, 2011.

In her speech she defensively distanced Labor from the past and its former values and actively pushed the Party’s agenda towards “the future” which just happened to include a suite of more liberal, fiscally focused and socially moderate values:

“The historic mission of our political party is to ensure the fair distribution of opportunity. … Creating opportunity and enabling social mobility has required different policies in every age. We have moved beyond the days of big government and big welfare, to opportunity through education and inclusion through participation.”;

“And we are the party of the future. From our earliest days we have always known that you don’t turn back; you can’t turn back. There will always be those who say the way ahead for Labor is to go back.”;

“We are a party of government with all the attachment to the political centre and to pragmatic decision making that comes with being a party of government.”

This repeated desire of Gillard’s to distance Labor from their past, and instead be “interpreters of the future” comes with unintended negative connotations and is a sign of intellectual naiveté. Nineteenth-century German philosopher, Friedrich Nietzsche, would strongly challenge Gillard’s propensity to brush aside Labor’s public policy history, because some ideas, people and moments in history are useful to be remembered when they can propel an individual into action and lead to personal flourishing. This theory should hold true for Labor’s predicament.

In Julia Gillard’s Whitlam Institute Oration there seemed to be a littering of underlying messages produced by this overt tension between the status of old Labor values and the new. To paraphrase the messages that emerge from Gillard’s speech; “we are not our past”, “we are a party with similar values that have been tailored to respond to a new conservative and uncertain context”, “the ways in which our values will be cautiously promoted will result in comparatively unremarkable policies and outcomes”, “our dutifully open striving for the middle and for pragmatism might conceal and excuse our policy-values disjunction” and above all else, “the situation we find ourselves in is not our fault, it is the harsh reality of the globalised and liberalised world we live in.”

Whilst listening to Julia Gillard’s speech, it became immediately apparent that we have been conditioned by successive federal governments to shudder when “welfare” is uttered, a now inherently dirty word. “Intervention(ist)” is another such word that we may never retrieve from the graveyard of Australian social democratic language.

Furthermore, a linguistic and conceptual change has recently emerged, such that the (blue-collar) “worker” now equates to (low- and middle-class) “working families”. That’s fair enough. Society has naturally progressed with class distinctions in politics subtly evolving and becoming less publicly referred to. But even this modern reference to a foundational Labor principle, that of labour rights and equality of access to opportunity, has amalgamated so much into the mainstream that it is merely an empty signifier of what once was a strength and distinguishing feature of the Labor Party.

Labor’s once radically left values and accompanying language has been adopted by society to become the political syntax of the many. Subsequently, Labor has been led into an impossible fight for the middle with the Liberal Party, because their once exclusive “turf” has submerged into an accepted Australian hybrid of socio-democratic liberalism.

This submersion has led to an inevitable fusion of Labor’s egalitarian moral and ethical values with liberal economic structures. Our problem is that political parties and society in general, have unhealthily absorbed Bill Clinton’s 1992 election campaign slogan, “It’s the economy, stupid.” Whilst this is fairly unproblematic for the Liberal Party, whose traditional objectives of a free market economy and minimal government intervention in individual and private-sector affairs, marry with this econo-centric rhetoric, it conversely leaves the Labor Party in a real bind.

Tony Judt is able to shine light on the disappearance of social democratic values in public policy-making. The following are excerpts from his lecture, ‘What is Living and What is Dead in Social Democracy’:

“There is this curious cognitive dissonance between the ends that people are willing, in very large numbers, to approve and even seek, than the means that they are willing to consider.”

“Our problem is not sociological, it’s not economical, it is… discursive, we don’t know how to talk about these things anymore.”

“We have lost the capacity to think of public affairs except in, and in a very restricted sense, in economic terms. When we ask of a policy or a proposal, is it good or bad? We don’t actually ask, is it good or bad? We ask, is it efficient? Is it productive? Would it benefit gross domestic product? Would it be efficient in that respect? Would it contribute or not contribute to growth and so on. We ask, in a very restricted sense, economic questions, we talk economics as a language of public policy. That is not a natural condition, it is an acquired one.”

“How did we come to think in exclusively economic terms, such that, when we have a purportedly national debate about whether or not we (Americans) should fix our collective arrangements for health care, we can only ask, how much will it cost? Who will pay? How much are we willing to sacrifice? And will it be efficient? Rather than, is it good? Is it right? Is it wrong? Is it bad? Is it just? Is it fair?”

Some recent Australian public policy debates came to mind when encountering Judt’s thesis:

– The need and disputed measures required to address climate change (Outcome: Economic cost and efficiency must naturally take priority over what is good and right for the environment now and in the long-term. A good economy is what keeps society thriving.)
– The introduction of a Paid Parental Leave Scheme, the level of financial support a government should provide and where the money should come from. (Outcome: Providing equal opportunity for individuals to participate and succeed in all aspects of life, including both work and family, through comprehensive paid parental leave? A utopian myth.)
– The often avoided question of an undervalued tertiary sector (Outcome: Technological innovation? We’re proud when innovation does eventuate but we’re doing enough and Australia doesn’t traditionally support intellectual elitism.)
– The allocation of public health care funding and the particular areas that should be prioritised (Outcome: So what about mental health?)
and
– The question of significant public investment in vital infrastructure like the National Broadband Network versus the alternative – a minimally regulated public-private sector collaboration (Outcome: If the NBN is built solidly and cohesively by the government using public finances this will lead to definite increases in work productivity. This is good for the economy and that is why it must go ahead.)

I must admit I was initially surprised by Tony Judt’s suggestion that we could or even should be considering and debating these moral aspects so directly, forcefully and in such prominent focus. Yes, these moral questions are always considered to be of great importance by politicians and society in general, but rarely do they seem to be the tipping point towards a greater social outcome in public policy.

It seems to me that Judt is suggesting, for a social democratic agenda and corresponding real outcomes to actualise, asking the moral and ethical questions of public policy, “… is it good? Is it right? Is it wrong? Is it bad? Is it just? Is it fair?” and thereby determining collective values, is just as important as managing economic concerns.

This is what Labor must recognise as essential to their ability to create a distinctive, courageous and confident narrative for itself in public policy creation and reform. Or as Judt suggests, for all political groups and societies with a social democratic foundation, “they need to begin by asking, how should we talk politics? Before asking, what are our policies?”

Some of the policies Labor has been most proud of, the introduction of Medibank (now Medicare), the Snowy Mountains Scheme and even the eight-hour working day, have been significant milestone’s in the progression and renewal of social democratic values and labour rights, all critical to the Labor identity, hence this reformist tradition must continue.

Bestowing equal consideration to social democratic values and liberal values is a sure path for Labor to follow in order to become a credible, robust and distinctive long-term alternative to the Liberal party. And personally, I am concerned about the current and future implications of the Labor Party’s current direction on balanced liberal and social democratic policy creation in Australia. Foresight and innovation is required for this country to transition into a new carbon-conscious and sustainability-focused world. The same great and somewhat risky step is required for Labor to transition into a truly progressive party for now and for the future.

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