Abbott’s road to widening inequality
“In the end, we have to be a productive and competitive society and greater inequality might be inevitable” – Tony Abbott 2013.
It’s no surprise that the Coalition are polling rather poorly at the
moment. As the electorate is beginning to realise, pre-election Tony and
post-election Tony are two very different creatures. Either that or
we’ve all been subjected to a mass alien memory wipe and he really did
campaign vigorously to scrap the payments to war orphans, re-index HECS
and introduce a $7 GP charge. With even Liberal backbenchers decrying
Hockey’s fiscal ambitions and Abbott’s signature Paid Parental Leave
policy as unfair, one has to wonder if this vindictive budget might not
perhaps betray some sinister ulterior motive?
Are massive cuts to health and education just the lever needed to
force the states to sell off assets? Or do they point to an inevitable
increase to the GST? In case anyone hasn’t noticed, Australia currently
has practically wall-to-wall Liberal state governments, and Abbott seems
to be taking aim at the Federation through massive changes to funding.
Meanwhile, as we tread through the smouldering ashes of what once was
our manufacturing sector, the path to a third world resource based
economy has never seemed clearer. The live export trade has been given
the all clear, Tasmania is preparing to tear up the Forests Peace Deal,
and Queensland is set to start dumping dredge spoil into the Great
Barrier Reef for a new coal terminal. Exploitation would seem to be
economics a la mode.
In his latest adventure our fearless leader has jetted off to the far
away land of Canadia spruiking once in a lifetime investment
opportunities in our wide brown land (read: sale of public assets). But
while he trumpets that Australia is open for business, make no mistake,
the Abbott/Hockey agenda is about privatising profit and socialising
cost.
In 1949, Robert Menzies’ Liberal Party was to be one of small
government with limited impact on the lives of individuals. Befitting
the post war mood, individual prosperity was high on the agenda.
Following 20 odd years of more or less stable government, the public
mood had changed considerably by the early 1970s and Australia’s
involvement in the war in Vietnam had become increasingly unpopular with
voters. The Whitlam Government was swept to power promising a different
take on foreign policy and bold new ideas for sharing our prosperity.
Whitlam legislated an unprecedented raft of reforms during his single
term in office, but faced a hostile Senate and eventually a
constitutional crisis led to a double dissolution. Malcolm Fraser was
appointed caretaker and served three terms as Prime Minister.
Fraser rolled back a lot of Whitlam’s reforms and hobbled Medibank.
His time in office was marked by modest growth and rising unemployment,
but I would be remiss not to mention Fraser’s support of
multiculturalism, establishing the Special Broadcasting Service (SBS),
expanding immigration and allowing more refugees to enter Australia. In Whitlam’s own words “Multicultural
Australia exists because of the Whitlam Labor Government’s initiatives.
It will endure not least because of Malcolm Fraser’s endeavours“.
While Abbott may lament the sins of the Whitlam era politically,
socially and economically, Labor has long been closer to the centre
right. It was Keating who made the permanent structural changes that
redefined our economy through the 80s and 90s; introduced us to the
global market and saw us through its birth pains; floated the dollar;
sent interest rates skyward; lowered wages and tipped us into recession:
all paving the way for 22 years of continuous economic growth. (We had a
lot of catching up to do). He also set up a superannuation scheme which
had extraordinary benefits for the very well-off.
It’s hardly surprising that by 1996 a few people were starting to
think Keating was a bit too right-wing and voted for John Howard
instead. Howard went to the polls with the promise of NO GST, NEVER,
EVER (at least until his second term of government). The Howard
Government grew fat off the profits of the mining boom and threw some
scraps to middle income earners through family payments. Howard
campaigned tirelessly against unionism, persecuted the unemployed
through polices such as work for the dole, and unequivocally backed
Bush’s invasion of Iraq in the face of massive public dissent. Where
Hawke had introduced mandatory detention for asylum seekers, Howard in
true neo-liberal style outsourced it. WorkChoices was his crowning
achievement, and a bridge too far for the electorate. He was rolled in a
landslide victory to Labor in 2007, in which he lost his own seat.
Enter Labor Mk III. Kevin Rudd was an adept policy engineer and a
great apologist but not well liked for his narcissism. Julia Gillard was
competent and amiable but dogged by a minority government and internal
division, and not well liked by the press. The carbon and mining taxes
were poorly executed compromises and not well liked by anyone. GONSKI,
the NBN, and NDIS were the three big policy initiatives which might have
been the legacy of the Rudd/Gillard years, had they been realised.
My point is this: Whether you lean to the left or the right of the
political divide, you should at least know where the centre is. Abbott
and his band of white shirt and blue tie wearing thugs aren’t
conservatives – they are radical libertarians; a government of, by and
for the very rich. If Sir Robert Menzies could see today’s Liberal party
he’d turn over in his grave. Honestly, this mob are so on the nose a
rotting corpse would run the other way.
They speak of ‘cutting tape’ and ‘taking the chains off the economy’
as they dismantle the legacies of previous governments. one policy at a
time. Even their much beloved John Howard has not been spared, with
family payments and the renewable energy target sent to the scrap heap.
‘Smaller government’, ‘Stop the boats’, ‘the Age of Entitlement is over’
they chant, while sticking a knife into the backs of the young, the
unemployed, the sick, the homeless, pensioners, war veterans, and anyone
else they deem undeserving. Because let’s face it, we’re a wealthy
country where everyone has equal opportunity, so if people are living in
poverty it must be through choice, right?
Unfortunately these mantras don’t bear close scrutiny. It is one
thing to say the age of entitlement is over, but what does this really
mean at a time when Australia’s GDP per capita is at an all time high?
How is it that one of the IMF’s top rated economies can suddenly no
longer afford staples such as free education and universal healthcare?
Hockey bangs on about the moral depravity of burdening future
generations with debt, but he’s quite happy for them to pay three or
four times more for their HECS. loans. Twenty somethings are told they
must earn or learn, while funding is cut from apprenticeships and more
457 visas are flagged. Do you ever get the feeling you’re being lied to?
Or are they doing such a good job selling their spin that it all sounds
reasonable? As reasonable as selling off public assets that have taken
decades to build up in order to service a relatively small short term
debt. Get ready for the fire sale. Mike Baird is already talking about
selling off power lines and poles in NSW (because that worked out so
well in Victoria, didn’t it?).
I don’t think I’d be going too far out on a limb to say that Labor’s
NBN was less about providing fast affordable broadband than breaking
Telstra’s stranglehold over the telecommunications industry. Remember
that great national company Telecom Australia? What do you suppose
happened to it? Oh don’t tell me, it was one of the first things to go
in John Howard’s fire sale, and with it went the copper network.
I am reminded of this quote from Hugo Chavez: “Privatisation
is a neoliberal and imperialist plan. Health can’t be privatized
because it is a fundamental human right, nor can education, water,
electricity and other public services. They can’t be surrendered to
private capital that denies the people of their rights”.
Think about this. When you privatise prisons, prisoners become
capital. That’s why the U.S. has 4% of the world’s population and 25% of
its prisoners. The states spend millions enforcing punitive laws and
waste resources on a ‘war on drugs’ whose sole purpose is to create yet
more prisoners. When you privatise health, sickness and disease become
capital. That’s why for all the hundreds of cures for cancer discovered
in recent decades we still don’t have any effective treatments.
Newsflash: The cancer industry is worth $160bn annually in the U.S.
alone. Do we really want to go down this path?
Sure, markets are good at supplying goods and services, and consumer
choice should be respected. But some things; health, education,
communication, correction, have proven disastrous when left to market
control. Sometimes you don’t just want to deliver the most efficient
outcomes, but the right outcomes. In these instances it is
incumbent upon governments to make sure the job is done properly.
Whether that be through provision, regulation or merely oversight of
essential services, the role of government is to look after the
interests of its citizens. I’m not talking specifically about a welfare
state, or even a social safety net. Such ideas are not the end, but
rather the means of sensible and proper governance.
The Resource Super Profits Tax was a 40% tax on mining profits over
and above normal company tax. The fact that Rudd failed to sell it to
the electorate was probably the single greatest failure of his political
career. Why should the Commonwealth not be paid a royalty when mining
companies which are 80% foreign owned dig up our coal and iron ore and
sell it to overseas markets? Why instead are mining interests the
biggest recipients of corporate welfare, receiving $4bn annually in
diesel rebates, while the rest of us are told we must do the ‘heavy
lifting’? Andrew Wilkie has the right idea
when he says the banking sector should also be paying a super-profits
tax. Policies like these could ensure that the cost of healthcare and
education never have to fall on those who can least afford it.
Economic management is about adapting to changing conditions. To
assume that policies which worked 30 years ago should and must work
today misses the point. Thatcherism may have been appropriate, even
necessary, for Britain in the 70s, but this is Australia 2014 and we are
facing a different set of challenges. Global markets, rising
inequality, and climate change are just a few. The Abbott/Hockey
response seems to be to drive the resource sector down through
oversupply, send the economy into recession to force down wages, and
take an opportunistic stab at those who contribute and consume the
least. Abbott keeps telling us that average families will be $550 a year
better off when the carbon tax is repealed, but surely this is cold
comfort when low and middle income earners will face a 12 – 15% rise in
the cost of living under the proposed budget measures.
Meanwhile middle class welfare will continue as usual, and those in
the highest income brackets will contribute virtually nothing to the
so-called budget repair job. The property market will remain inflated
due to negative gearing, keeping young families out of the market while
the rich buy up investment properties. Big business will continue to be
under-taxed and we will all pay more for basic services. Lack of early
intervention will lead to an overall decline in our health and a greater
burden on hospitals. Deregulation of the education sector will be a
disincentive to higher learning and those who do graduate will face
years of debt.
Hockey is reading the ledger book upside down. Health and education are assets, not
liabilities. Action on climate change now is essential if we are to
have any sort of future at all. These are the real tough choices we
should be making now.
Alas, we seem to be headed in the opposite direction, gathering pace
as we speed down Abbott’s big new road to greater inequality, paying
more for our health and education, whilst hemorrhaging money on weapons
of war for which we have no foreseeable use. Not to mention those pesky
asylum seekers. We hand over billions to lock them away in other
countries in private prisons with private security guards and turn a
blind eye when they are raped and beaten to death, as long as they never
come here. Hey Tony, here’s a thought, why not privatise the armed
forces? In 12 years the U.S. has poured trillions into the war in
Afghanistan, while Halliburton has made a fortune. Australia has just
pledged $58bn to Lockheed Martin for the new F-35 which is by all
accounts a lemon, while sending our navy ship building offshore. One
thing is certain; war is good for business, but who are we going to war
with? Indonesia? China? If so, God help us, because the U.S. certainly
won’t.
Speaking of the U.S., Obama seems somewhat more relaxed now toward
the end of his final term and is talking about real action on climate
change. China is also taking the problem of carbon emissions seriously,
leaving us pretty much on our own. As the Chinese economy slows the
price of iron ore is in free-fall, and the world is waking up to the
environmental cost of thermal coal. This does not bode well for our
economic future. How blinkered do you have to be to not even consider
other options? At least there should be a plan B, right? When questioned
by Greens MP Adam Bandt in parliament recently as to what his plans
were for the future of Western Australia at the end of the mining boom, Abbott responded that his plan was “to restart the mining boom”. Apparently his plan A is his plan B.
In contrast, Germany now gets 30% of its energy from renewables.
Imagine that in terms of job creation. Norway has set up a state oil
fund which has made all of its citizens crown millionaires; Finland’s
state funded education system produces the best education outcomes in
the world; Iceland responded to the global financial crisis by sending
crooked bankers to gaol and now has a thriving economy; and Sweden is
about to introduce a 30 hour work week.
These are some of the highest taxing and highest servicing countries
in the world. They are not socialist states, they are not third world
countries. They are the world’s best performing economies. Economics
isn’t rocket science, but it is a science, and policy decisions tend to
have predictable outcomes. In case you haven’t figured it out yet,
Abbott is really not the sharpest tool in the shed, and as for Hockey,
really, would you buy a used car from this man? Never mind, if it all
goes tits up I suppose he could always get a job in real estate. I’m
sure there’s plenty of money to be made selling beachfront retirement
homes. In Antarctica.
Other great articles by Sean Stinson:
Catholic Schoolboys Rule: Neo-Conservatism and the Sociopathy of the Religious Right
The Wheat and the Chessboard
The toll road to serfdom
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