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Sunday, July 24, 2016

Labor needs to Develop Stronger Policies and Mobilise Early to Beat the Liberals Next Time

 
 
 
 
The Following is an internal view of where Labor needs to lift its game for the next Federal Election ; in terms of Policy, Strategy, and mobilisation of its Rank and File.  NON-Labor people  (Including Greens Activists)  may be interested in the broader implications for Australian politics.  And there are areas of possible shared ground on Policy between the ALP and the Greens.  The election demonstrated that currently ALP and the Greens still need each other to maintain an electoral bloc capable of displacing the Liberals.....


Dr Tristan Ewins


It's upsetting when some of us in Labor complain about "unaffordable" "pie in the sky" Greens policies. The Greens' policies were more ambitious than Labor's policies, yes. And perhaps were less credible as a consequence of their lacking access to quality costings. But at the end of the day the difference between Labor and the Liberals is perhaps around one per cent of GDP annually. (also add other policies not related to spending – like support for penalty rates) And the 'unaffordable' Greens policies maybe add up to in the vicinity of one to two per cent of GDP/year more than ours at the most. (these are just rough estimates though I admit)

The problem with the Greens is not 'unaffordable' policies. That's 'Liberal-Speak'. It’s rhetoric which can rationalize opportunism on austerity for instance. It’s loaded-rhetoric which ‘locks in’ small government.

The real problem for the SL is that Greens gains are losses for the ALP Left within the PLP (Parliamentary Labor Party): affecting our policy influence as far as policy is determined by Cabinet. (or the Shadow Cabinet as it is for the time being) And a common accusation is that sometimes the Greens distort facts on Labor Policy to achieve that.

But despite claims to the contrary, people who were insisting that we needed Greens preferences to win were proven right. We cannot escape from the fact Labor and the Greens need each other.
So for the most part "big spending" promises are 'not the problem'. Promoting incremental extension of social insurance, social welfare and the social wage - should go without saying for Labor. We did not go far enough on tax reform and superannuation concessions reform. Yet nonetheless it was the most promising economic platform we've promoted in years. By this I mean it was the first election in years where we had not locked ourselves arbitrarily in to a policy of holding spending and tax down as a proportion of GDP.  

Probably  we retreated on policy in the face of bad responses in focus groups and polling. (take our retreat on Aged Care funding)  This suggests that while we began selling our message earlier than usual, we could have began even sooner. Because selling a message which challenges 'common sense' Ideological assumptions (as Gramsci may have put it) takes time and effort. (especially with a hostile media)   Our aspiration should be to raise social expenditure and investment by perhaps 2.5 per cent of GDP upon taking government after the next election.  (maybe more if you factor in cutting superannuation concessions)


If people want evidence of the need to begin campaigning early then look at the disinformation on Medicare privatisation in the media and from the Liberals. Privatisation was narrowly interpreted as ‘selling an asset off’. Labor’s message was therefore deemed a ‘scare’. Yet upon reflection Labor’s implicit definition of privatisation is legitimate. Medicare is a relatively modest scheme of socialized medicine by some international comparisons:  providing for the costs of a variety of consultative services and procedures publicly.  Nonetheless, Medicare (and the PBS – Pharmaceutical Benefits Scheme)  contain national health costs radically compared with the overwhelming dependence on private health cover in the United States. The danger, though, is that we are nonetheless developing into a ‘two tiered’ health system in health as in education. With increasing degeneration into Galbraith’s ‘private affluence, public squalor’.   The more this progresses the more entrenched the situation becomes ; and the more divided the country grows on the basis of social class.


This - accompanied by growing out-of-pocket expenses - would be both inefficient and unfair: an expression of the principle of privatisation as opposed to socialisation. 


But Medicare must be extended as well as defended. Medicare does not currently include comprehensive dental, podiatry and physiotherapy , or medical aids like glasses, hearing aids or prostheses.  We need a reforming government which provides for this through the progressive reform and extension of the popular Medicare Levy without austerity elsewhere.


It’s also notable that we sold NDIS (National Disability Insurance Scheme) well in the past. But we can't sustain an argument that improved social wages and social insurance can be provided without significant tax reform elsewhere. $7 billion from negative gearing and Capital Gains Tax concession reform was important. (adding up to 0.4% of GDP)  At least we were somewhat on the front foot. And Labor’s defensive stand against $50 billion in Company Tax cuts was crucial to its message ; and to a revolt in sections of the electorate against ‘corporate welfare’.


But I think we can and should do better. It requires planning and arguments put well in advance. It requires promoting a public debate which challenges peoples' assumptions about the desirability (or undesirability) of 'small government', low taxes, the importance of social investments, social insurance and so on.  It requires a party of activists – mobilized to a significant degree throughout the whole electoral cycle.


In short: we need an ALP with a vision reconceiving of a 'forward march of labour'. An idea of what 'progressive' actually means. That is 'how we want to progress things’. And that must mean an extension of social insurance and the social wage ; an emphasis on public infrastructure and services ; a more progressive tax system - and so on. Which takes real resources- Hence the emphasis on tax reform.



But both sides capitulated to short-term opportunism on superannuation concessions - which will be costing tens of billions to benefit the rich and the unambiguously well off. With the new parliament it is to be hoped that the impending $50 billion bill for superannuation concessions will drive policy by necessity. And Labor can use its position in the Senate to ensure these changes are fair for middle and lower income Australians. Hopefully Xenophon can be convinced of this also. His votes will be crucial. Also thankfully while Labor did not develop a strong enough policy, here, at least at the early leaders’ debate Shorten kept his options open on future reform. Turnbull by comparison locked into ‘no further reforms’. It will be interesting to see if he sticks to that.



The Liberals will accuse us of being 'big-spending'. But that is rhetoric we need to refute vigorously. My personal ambition was to see Labor increase tax and related social expenditure by maybe 2.5% of GDP in its first term. (that that is considered 'radical' shows how far we've regressed in this country from anything like social democracy)

But even increasing progressive tax and associated expenditure by 1.5% of GDP (or $24 billion/year out of a $1.6 trillion economy) in a first term Labor government would be meaningful. That should be ‘the policy floor’ – which we resort to only if necessary - and below which we compromise no further.



Crucially: there are vulnerable people who need our help sooner and not later. That includes the elderly, the ill, the disabled, the poverty-stricken, and the long term unemployed for a start. This requires tens of billions new spending to be meaningful.

With Shorten’s election campaign appearance on QandA, he was confronted by an aged pensioner who argued that an unforeseen contingency (eg: a broken washing machine) could send her broke. In other words, that it may come down to a choice between paying bills, seeing the doctor, or feeding oneself. Shorten conceded there was ‘nothing he could do’. Which probably translates as: ; ‘internal polling shows people don’t want higher taxes’ or that they ‘resent pensioners’, and hence Labor was ‘cutting some of the most vulnerable loose’. We have to do better than this next time. And the way we do that is through a solid campaign footing for a full three years between now and the next election.



But keep in mind that's in the context of a $1.6 TRILLION economy. We're talking about affordable reforms that the media and Conservatives will portray as 'radical' and 'irresponsible'. The Liberals especially don't want to compromise at all on their 'small government, neo-liberal, laissez faire' Ideology and agenda. No matter what the cost to vulnerable and disadvantaged Australians.

In fact we need to develop a public debate about how low social spending and how small the public sector are in this country - and why moving closer to the OECD averages - even if only gradually - would be a good thing.


I have argued to increase spending and taxes by roughly 2.5% in the past.  I don't think we can just transplant the entire Swedish model over two or even three terms. But I do think gradual progress is possible. And depending on unforeseeable circumstances perhaps it could be less gradual.  (history is interspersed with ‘watershed’ moments which had not been predicted)


Let's say we had a pool of $40 billion extra a year to work with out of a $1.6 trillion economy. (ie: 2.5 per cent of GDP) And then maybe cut superannuation concessions by around $15 to $20 billion to start as well. (out of approximately $50 billion)

With that we could do the following:   *


·         Fully Implement the Gonski education reforms, and NDIS


·         reform and extend Medicare into dental, prostheses, optometry, physio, psychology, podiatry ; cut waiting lists ; stop the encroachments of increasing co-payments


·         increase investment in public and social housing


·          implement a National Aged Care Insurance Scheme


·         reform Mental Health with more proportionate resourcing of the sector and policies to tackle mental-health related early mortality – with perhaps 300,000 Australians suffering schizophrenia, for example,  dying 25 years earlier than the general population. ;


·         introduce a Universal Basic Income (UBI)  as proposed by NSW Labor policy activist Luke Whitington, and begin eliminating poverty.


·         also fund various infrastructure projects publicly as opposed to creeping privatisation- with the consequence of passing efficiencies on to the broader economy.


·         top up local government with federal funding - redistributing resources to help local government in working class and disadvantaged areas to provide better quality services and infrastructure.


·         Pay for a reparations component of a Treaty with indigenous Australian peoples





 


·         Implement a trial 'co-operative incentive scheme' to support the development of co-operative enterprise in Australia  - supported by tax breaks, cheap credit, advice., and in some instances government co-investment


·         Reform welfare payments – Aged, Disability, Sole Parents; Student Allowance; Carers etc; increasing by $50/week plus inflation perhaps over two terms


 
·         Finally we could reform higher education and make the HECS system far more progressive. Raise the minimum repayment threshold for a start.   And implement Industry and Labour Market policies which bring us closer to full employment: with a big boost to the Budget bottom line.


What's important over the next year or so it that we adopt the posture necessary to promote the next wave of reforms in what they used to call ‘the forward march of labour'. ALSO even in the wake of our election loss we should still aim for a Company Tax rate of 30 per cent or higher and not back down from that. (ie: whether in government, or vetting legislation in the Senate)  Because it is both necessary and reasonable for the corporate sector to contribute to the services and infrastructure it benefits from. The alternative is neglect - or otherwise 'corporate welfare'. 

Sam Dastyari’s estimate that corporate tax evasion is costing $31 billion a year is also relevant here.  And you would think Labor needs a stronger policy than it took to the last election.  That is: Labor’s policy only aspired to claw back $2 billion of this over 4 years.


Labor desperately needs a sense of what its professed ‘forward march’ comprises ; and why that is desirable and right.  Let’s begin a debate sooner rather than later: moving Labor onto ‘the front foot’.  This means shifting straight away to a ‘permanent campaign mode’ based on ‘solid but partial mobilisation’ through the activism of our rank and file.  (full mobilisation throughout the entire electoral cycle could prove exhausting, however)  Also we need to implement an early release of ambitious policies which our activists and supporters could mobilise around.  We don’t want to be pressed again to retreat on crucial policies (for example Aged Care funding)  due to public fears re: the presumed need for a Budget surplus and low taxes – as occurred in the recent federal election campaign.

A non-binding ‘policy conference’ some time over the next year could also help mobilise the enthusiasm of Labor’s rank and file ; inspiring innovative policy development to drive Labor towards the next federal election.  Contrary to Bowen this Conference should not replace the binding ALP National Conference which determines Labor's Platform.

Saturday, July 9, 2016

Turnbull by the Narrowest Margin - And Why a Return to Abbott and Conservatism is not the Answer for the Liberals



Much has been made of the so-called Labor 'Medi-scare' Campaign.  But reflection suggests Turnbull has only himself to blame for pandering to the 'big 'C' Conservative' wing of his Party - with the profound disillusionment from liberal-minded voters who were originally so encouraged by the departure of Abbott.  For the same reason 'a return to Abbott' is not the answer for the Liberals. In the end the Liberals did not 'tack to the Centre' after all.  And if the Liberal Party swings Right chasing after the votes of the Hansonites that will only provoke further disillusionment from the 'liberal relative Centre' voter demographic.

  

Dr Tristan Ewins
 
With the cliff-hanger/apparent-Liberal victory in the 2016 Australian Federal Election there have been calls from Conservative quarters for the removal of Malcolm Turnbull.  The argument goes something along the lines that because Turnbull abandoned the Liberal base he was punished accordingly.  And that a more decisive Liberal victory would have been possible under Tony Abbott.

Certainly the cross-benches will likely be volatile.  The Government could expect to be put into difficult positions on gambling regulation (Xenophon), law reform and legal euthanasia (Hinch), protectionism (Katter), and totally-unworkable policy objectives based on xenophobia. (Hanson)   Cathy McGowan will probably tend towards to the liberal Centre.  Lambie can be unpredictable – but also in some ways progressive on the economy. (take her support for a financial transactions tax)  She also opposes Same Sex Marriage. 

The Greens will quite possibly enter into negotiations with the Nick Xenophon Team to link their agendas in the context of balance of power in the Senate. The hope is that they will oppose austerity and regressive re-casting of the tax mix – leaving fair tax reform as the only remaining option for budget repair.  (though some are saying the Conservatives may respond with a new election)  But the Greens have failed to pick up new Lower House seats from Labor.   In the Lower House Wilkie can be depended upon to be critical, consistent and progressive – as past experience shows.
 
Already there are arguments to the effect that a hung parliament threatens Australia’s AAA Credit Rating.  The arguments can be summed up in that the various sectional interests will get in the way of ‘hard headed action on budget cuts’.  Though again: few are considering the genuinely-existing alternative of budget repair without austerity – on the basis of progressive tax reform.   Budget cuts also threaten the infrastructure and services the economy craves: resulting in something of a ‘false-economy’.  If possible Labor needs to link-up with Xenophon and the Greens in the Senate to progress the agenda of budget repair without austerity. 

Those Liberals who aren’t braying for Turnbull’s blood are indignant about the so-called ‘Medi-scare’ from Labor.   Yet the reality is that the fear out there in the electorate goes back to the 2014 Hockey Budget ; with its various Medicare co-payments, and other ‘cuts to the bone’.  Labor’s efforts here were nowhere near as objectionable, say, compared with the Howard-Era Liberal government’s ‘children overboard’ panic,  or more recent talk of a ‘war on business’; and so on.  In fact Labor’s interpretation of Medicare privatisation is entirely reasonable if realised as opposition to the winding back of socialised medicine in this country. That the Federal Police are being deployed apparently as a Liberal political asset is perhaps a threat to our democracy.

Turnbull’s alleged ‘Centrism’ is not the cause of the ‘political-near-death’ of the Federal Liberal Government. Turnbull had extensively compromised in order to keep the big ‘C’ Conservatives within the so-called ‘big house’ that is the Liberal Party.  He compromised on same sex marriage ; and on climate change and refugees.  He made billions in inhumane and profoundly regressive cuts in areas like Aged Care.  As opposed to the line being drummed up by Andrew Bolt and other arch-Conservatives : if anything it was sheer disappointment from the ‘small ‘l’ liberal’ demographic in the broader electorate that resulted in the hung parliament. 

Talk now of a ‘new Conservative movement’ – and hints from Bernadi of a ‘new Conservative Party’ illustrate a bitterness within the Liberal Party that goes back to the palace-coup against Abbott.  Regardless of this –any new Conservative movement will need to navigate the contradictions between Liberalism and Conservatism.  For self-espoused Christians heartless LNP policies on defunding an Aged Care sector already characterised by regressive user-pays mechanisms - need to be rejected utterly. Hence ‘Compassionate Conservatives’ have cause to oppose ‘Austrian School-style small government’ and its human consequences.  While small ‘l’ liberals have cause to fear regressive Conservative encroachments on civil and even industrial liberties.   Perhaps the Liberals could even learn from the example of the post-war (1950s) German Christian Democrats and their aim of 'a social market economy'.

By tearing themselves apart the various LNP Liberals and Conservatives may well prove themselves unready for government.  But would a Liberal Party freed from its right-wing once again embody the spirit, say, of Don Chipp; of the later Fraser ; or even the critical disposition embodied by internal critics such as former Liberal leader John Hewson?  Would it become a ‘small ‘l’ liberal party?  Could the Liberal ‘Wet’ faction re-emerge somehow from oblivion?  Or would the LNP  still adhere to ‘large ‘L’ economic Liberalism – leaving dominant narratives of austerity, privatisation and laissez faire untouched?   Turnbull’s capitulation to the ‘big ‘C’ Conservative’ right-wing of his Party during the campaign suggests the latter scenario is more likely.  As they do tend to embrace 'big 'L' economic Liberalism as opposed to 'small 'l' liberalism'.
 
There was talk under Turnbull of the Liberals ‘shifting to the Centre’.  But remember that the Centre is always relative ; and what matters most is the substance which prevails beneath the relative labels.  Moves amongst parts of Australia’s ‘liberal establishment’ (eg: in Fairfax) suggests all-too-ready a willingness to ‘settle’ with the Liberalism of Turnbull ; even when much of it proved to be compromised and hollow.

The real problem with the Turnbull campaign was its shallowness.  That is, the shallowness of mantras of ‘jobs and growth’, and the incredibility of the notion $50 billion in Company Tax cuts  (and even more over time) would ‘trickle-down’ to benefit everyone.  And this at the same time as the government proclaimed a ‘Budget Emergency’.  This was not small ‘l’ liberalism. It was the spirit of Reagan and Thatcher.

It wasn’t political and social liberalism that ‘did Turnbull in’ with a ‘near-political-death experience’.   It was laissez faire : with the LNP apparently having learned nothing from the overwhelming public rejection of the attempted hard-line Hockey Austerity Budget of 2014.


(Postscript: A friend in the Labor Party cautioned me that an open split in the Liberal Party could have bad ramifications long term. He argued that at least the LNP is not radically nationalist and openly accepting of racist Ideology. And who knows what might fill any vacuum? Though I still think LNP members need to reflect seriously upon two policy fronts : The incompatibility of heartless neo-liberalism and attacks upon the vulnerable with the 'compassionate conservatism' some Christians would like to profess ; and the infringements upon civil liberties arising from 'Big 'C' Conservatism' in this country. We need the Liberal Party (and hence the whole relative political milieu in Australia) transformed as a consequence of pressures on both these fronts.)
Our next post will consider the dilemmas facing Labor following the election outcome.

Sunday, June 5, 2016

From the place of socialism in modern Australian politics, to 'Record High Taxes', and Police Powers

 
 
 
above:  In the Herald-Sun (4/6/16) Joe Hildebrand laments the decline of  'Third Way Centrism' and the rise of the 'margins' in European (and to his mind probably Australian) politics.  But democracy must mean pluralism and real choices.  In this the real history of socialism and Marxism must be kept in mind. Regardless of the horrors of Stalinism, it is time to reclaim the traditions of the Democratic Left.
 

LETTERS LATE MAY AND EARLY JUNE:    The following are a series of letters written to ‘The Herald-Sun’ and ‘The Age’ over the course of late May and early June 2016.  The issues discussed include the place of socialism, liberalism and Marxism in Australia.  As well as police powers, and whether or not Australia faces ‘record high taxes’.  At the time of posting only one of the letters had been published – in The Age. (though edited for length)

 

(Published) “Waleed Aly (The Age ; 26/6) regrets the marginalisation of political ideologies like socialism and liberalism, and the rise of disengagement, cynicism, right-wing populism.  But Sanders in the US and Corbyn in the UK show that with the distance of time the damage caused to the democratic Left by the example of Stalinist totalitarianism is finally being overcome.  Australia needs progressive leadership – articulating the best of political and social liberalism, and economic socialism.  There is a constituency waiting for the right leadership: articulating ideas of social justice and compassion.  For Labor to articulate a vision based on provision for human need through social insurance, the social wage, social welfare, the democratic mixed economy, as well as labour market regulation and industrial/civil liberties.  Shorten has moved in the right direction with very modest proposals to reform tax. Though his back-down on crucial Aged Care funding suggests Labor is too sensitive to empty claims of ‘over-spending’:  In fact Labor has a record of bipartisanship on ‘small government’.  In fact our taxes are only approximately HALF of Sweden’s’! A new Labor government needs to be more ambitious fully-funding perhaps $40 billion (or 2.5% of GDP) in new progressive commitments without austerity elsewhere.

 
(NOT PUBLISHED)  Democracy must mean a real choice! ; Joe Hilebrand (Herald Sun 4/5/16) laments the decline of ‘Third Way Centrism’ and the rise of the ‘fringes’, with Marxist voices finding a place in the public sphere.  A few points, though. First, a true democracy finds itself in pluralism.  That is: if voters do not have real choices on the democratic Left and on the democratic Right then the meaning of those choices is diminished. Secondly, fear of ‘Marxism’ in Australia ought not be overstated.  Labor has moved marginally Left of Centre – but only marginally.  Its reform agenda is modest.  Finally, we could do to remember that while Marxism was crudely distorted under totalitarian Stalinism, that it nonetheless began as a democratic movement. Indeed it was one of the first social movements to propose free, universal and equal suffrage (ie: votes for all adult men and women) from the late 1840s and into the early 20th Century.  Those who remain true to Marxism’s democratic roots would seek “a democratic road to socialism”, with an important place for parliamentary democracy.  As such today’s democratic Left – partly inspired by Marxist traditions – is one of the real, substantial choices Australians should enjoy, informed by a vision of social and economic equality and democracy.  


(NOT PUBLISHED)  (late May 2106)  The Herald-Sun has been depicting Labor as ‘irresponsible big spenders.’ But taxes have hovered around 25% of GDP across BOTH Labor and Liberal governments for many years now. In fact both Labor and Liberal have maintained a regime of ‘small government’, and any Australian government would need to double spending by approximately $400 BILLION a year to reach Swedish levels of expenditure! (ie:  at approx. 50% of GDP)  In fact, if we want to INVEST in education, health, aged care, transport and communications infrastructure, then we need more progressive tax and higher spending. The alternative is that our services and infrastructure will decay. People will suffer ; and so will the economy.  To provide a sense of proportion: Labor’s proposed changes to Capital Gains Tax and Negative Gearing will save only $7 billion a year.  But Malcolm Turnbull’s approach of cutting Company Tax by $50 billion over ten years cannot but result in a massive hit to Education and Health, services and infrastructure.  At the same time it could make any return to surplus impossible.  (once the tax cut reaches its full amount it will cost the Budget more over time)

 
(NOT PUBLISHED)  (Late May 2016)  The Herald-Sun AGAIN publishes information to the effect that cuts must be made “to avoid record high taxes”. (HS 28/5, p 9)  What the Herald-Sun does NOT publicise is the fact that for decades there has been bipartisan commitment from the ALP and Liberals to holding taxes down as a proportion of GDP.  Both ALP and the Liberals have kept taxes down so far that we are one of the lowest taxing countries in the OECD.  We would need to raise spending by $400 BILLION/year to match Sweden for example!  Instead Shorten is proposing modest Capital Gains Tax and Negative Gearing changes that will bring in only $7 billion annually.  The idea of ‘record high taxes’ appears ludicrous in light of all this! 

But without higher levels of fair taxation we will ALL pay more through user pays. User pays for roads. The end of bulk billing and Medicare.   $30,000 a year to send your kids to private schools because the public system is neglected.  Working class people forced to sell the family home to access an aged care system which is grossly under-resourced and understaffed.  This is the price we will all pay for lower taxes!

(nb: DEAR Editor - You keep publishing information to the effect we are faced with the prospect of 'record high taxes' ;  This verges on misinformation when put in context.  It is only reasonable during an election campaign to give significant space to 'the other side of the story'. Not just my own critique ; But a wide range of respectable opinion which would question the notion we are 'heavily over-taxed' ; or that Labor is 'high taxing and high spending' when compared with other governments ; or even with the  Liberal Party itself)

(NOT PUBLISHED)  A Sense of proportion on Company Tax

(Herald-Sun Early June)   In his letter John Morrissey argues  that Australia’s Company Tax regime is “uncompetitive”.   Yet the United States’ Federal rate of Company Tax is 35% ; and in some states goes higher than 39%.  The problem with lower Company Tax is that there isn’t the money left over for infrastructure and education. (that is, without ‘corporate welfare’. ie: workers/taxpayers ‘picking up the tab’ for the services and infrastructure corporations use)  Our Company Tax regime is not ‘uncompetitive’ when compared with the United States itself, and top quality infrastructure and a skilled workforce (paid for by tax!) will attract more of the right kind of investment. Australia also has one of the lowest overall levels of tax in the OECD – at approx. 25% - compared with 50% in Sweden.  To get a sense of proportion: Shorten’s $7 billion of tax reforms re: Negative Gearing and Capital Gains Tax Concessions accounts for less than half a percent of GDP.   A massive $400 billion would be necessary to match Sweden and provide a Nordic-style Welfare State. So keep a sense of proportion when talking about tax in Australia   (source:  Wikipedia)

(NOT PUBLISHED)   Police Powers

The Herald-Sun has been running hard on the issue of Police “move on” powers, and has given voice to those within the force who want a return of those powers.  A couple of points.  Firstly, the role of the Police is to enforce the laws of the day rather than to lobby the government of the day.  The police as such should not be politicised like that against civil liberties which many of us cherish as part of our liberal society.  Secondly, our civil liberties are too valuable to sacrifice in response to the actions of a couple of dozen of people – perhaps including provocateurs.  There are already laws dealing with those who engage in violent behaviour.  But we should be wary of the ‘heavy hand’ where it restricts rights of assembly, association and speech – or even civil disobedience.  Neither should civil liberties be curtailed because they are an ‘inconvenience’ to some.  This is the SUBSTANCE of the liberties and rights we are regularly reminded that our men and women fought for in WWII.  Rights and liberties should not be sacrificed for a headline.

Monday, May 30, 2016

Reflecting on the Leader’s Debate and what it means for Australia




above: Arguably
Bill Shorten won the recent Leaders' Debate for Labor ;
But the leader needs to make clearer the connection between education and infrastructure, and a strong and fair economy.  Labor could also do with more policy ambition ; and needs to 'do the right thing' for the elderly, and other vulnerable people.

Tristan Ewins

IN the recent Leader’s Debate (29/5/16)  for the coming Australian Federal Election it could reasonably be argued that Labor leader Bill Shorten did a pretty good job.  Slogans such as ‘Budget Repair that is Fair’ are arguably cutting through ; though Labor needs to come up with more detail as the election day approaches.  

Shorten’s approach is basically to defend Australia’s minimalist welfare state and social wage – but without such significant new initiatives – say on the scale of the NDIS. (National Disability Insurance Scheme)  His strategy is ‘to hold the line’ against Turnbull’s Ideological drive for ‘smaller government’ at the expense of pensioners and other vulnerable Australians. The opposition of the Australian Medical Association to the erosion of Medicare and bulk-billing could be crucial.  Shorten is also ‘holding the line’ on Gonski and against the projected deregulation of Higher Education.

But Labor’s back-down on restoring Aged Care funding was especially disappointing: and will have bad consequences for some of our most vulnerable Australians.   Labor needs to revisit these areas if actually elected.  Labor Governments cannot take it for granted they will enjoy the protracted time in office as enjoyed during the Hawke/Keating years.  Labor has to ‘seize the day’, and entrench important reforms while it can.  Personally I have advocated for the vulnerable elderly and the mentally ill: suggesting the importance of addressing a mental-health related life expectancy crisis. (where
about 300,000 people are dying 25 years earlier that the general average)  And also I have suggested the necessity of tackling unfair user-pays in Aged Care ; as well as the crisis there with regard quality of life, and in resourcing and staffing the system.

But Shorten needed to do a better job making the connections between education, infrastructure, human capital and a strong economy. He was spot-on identifying the waste and unfairness of Turnbull's $50 billion corporate tax cut over 10 years.  (A measure which will likely result in real increased economic growth over decades of only a tiny fraction of one per cent according to Treasury.)

But cuts to public investment in education and infrastructure especially are bad for the economy, bad for growth, bad for investment. Businesses will take what they can get. But they also look for an educated workforce and top quality infrastructure.  The ‘trade off’ between reduced Company Tax, and reduced spending on infrastructure and education – will leave the Australian economy worse off. 

Amidst talk on the economy Labor’s Negative Gearing measure is perhaps its most significant new initiative: with the hope it will make housing more affordable, partly as a consequence of encouraging investment in new stock.  This would also stimulate growth.

Ultimately, there is the choice of whether we pay for infrastructure and Education fairly through progressive tax;  or unfairly through 'corporate welfare' (an unfair tax system); or whether we just cop out entirely - 'leaving it to the market' - which will mean privatisation.   Turnbull is suggesting  an arbitrary ‘locking in’ of smaller government, aiming for around 23.9% of GDP  . By locking into the 'even smaller government' option (by some tens of billions) Turnbull will have no choice except to privatise.  But privatisation comes with big inefficiencies. The higher cost of private finance ; the costs of marketing;  private dividends; corporate salaries and so on.  And there is the possibility of private monopolies or oligopolies with unacceptable market power to fleece consumers.  Not only will that create unfairness - it will also create inefficiencies that flow on to the whole economy. Shorten needs to be crystal clear that not only is Labor strongest on health and education - But that Labor's commitment to public education and infrastructure is best for the economy as well. This is a great Labor strength if only Shorten is willing to play to it!

Turnbull argues he ‘has a plan’.  But all this ‘plan’ boils down to in the end is a massive corporate tax cut: premised on discredited ‘trickle down economics’.  The expected ‘surge in new investment’ will never come.  As opposed to an economic plan, Turnbull’s approach is only to ‘talk about having a plan’.  There is no substance.  Just a mantra about ‘jobs and growth’, and references to Turnbull’s past business background.  Turnbull assumes a highly conditioned electorate will ‘trust’ the Liberals on the economy: and will trust in his business background as opposed to Shorten’s personal background representing workers.

Also importantly: Turnbull is attempting to trade on his commitment to build new subs in South Australia.  
Building the subs will cost $50 billion and create 3,000 jobs.   But by comparison the Conservative LNPs withdrawal of only modest support for the auto industry will cost 50,000 jobs.    And it was projected about half of those jobs (about 24,000 of them) are lost in South Australia alone.   Hopefully workers have long memories; and if not so then Shorten should remind them! 

This is also an area that Shorten should arguably revisit if he wins the election.  Former Prime Minister Kevin Rudd had suggested an initiative which may have saved those 50,000 jobs for only a $2 billion subsidy.  Australia could potentially develop an ongoing ship-building capacity: building vessels not only for ourselves, but for the world.  But if the auto industry could be restored, arguably there are more jobs in the balance there.  Winning back the trust of the auto-manufacturing companies would be difficult, though, after Tony Abbott effectively ‘drove them out of town’. 

Tellingly, during the debate Turnbull suffered on the theme of climate change.  The problem with high expectations is that when they fail to be realised the disappointment is all the more bitter.  There is a Centrist, politically and social liberal demographic out there which may have swung the election for Turnbull.  But Turnbull’s compromises have given the impression of ‘weak leadership’.

Finally: during the debate both leaders were asked to clarify whether or not either one of them would ‘lock in’ with no further changes to superannuation concessions.  In an act of irresponsible opportunism, Malcolm Turnbull indicated he would make just such a commitment.   But Shorten did not answer the question clearly. 

Let’s be upfront. According to many commentators superannuation concessions could soon cost close to $50 billion a year.  That is: more than the entire Aged Pension budget.  This will be partially mitigated by the modest measures taken by both the major parties: reducing concessions for the richest of the rich.  But while average income earners should not be targeted, there arguably remains a broader demographic including the indisputably well-off and the upper middle class.  Let’s say at least the top 10% income and wealth demographics.   In order to reel in this massive imposition on average tax-payers  a broader base needs to be targeted.   Broad enough to save tens of billions , but narrow enough to be fair.  Labor itself has not yet found this balance -aiming for too-narrow-a-demographic to make the difference to the Budget which is needed.

For Shorten what is also absolutely necessary is to create a ‘sense of proportion’ around claims in the Conservative tabloid media that Labor are ‘irresponsible big spenders.’ Spending has hovered around 25% of GDP across BOTH Labor and Liberal governments for many years now. In fact both Labor and Liberal have maintained a regime of ‘small government’, and any Australian government would need to double spending by approximately $400 BILLION a year to reach proportionate Swedish levels of expenditure! (ie:  at approx. 50% of GDP)   As an admirer of the Swedish welfare state, nonetheless that may not be within our grasp!   But in fact, if we want to INVEST in education, health, aged care, transport and communications infrastructure, then we do need more progressive tax and higher spending. The alternative is that our services and infrastructure will decay. People will suffer ; and so will the economy.  

To reinforce that ‘sense of proportion’: Labor’s proposed changes to Capital Gains Tax and Negative Gearing will save only $7 billion a year.  And Labor’s measures on superannuation concessions will save only $14 billion over ten years.   (which is not so much as it sounds when you consider it is staggered over a decade!) 

But Malcolm Turnbull’s approach of cutting Company Tax by $50 billion over ten years – while opposing Labor’s savings via progressive tax measures - cannot but result in a big hit to Education and Health, services and infrastructure.  At the same time it could make any return to surplus impossible.  (once the tax cut reaches its full amount it will cost the Budget even more over time)

All in all Shorten ‘won the debate’.  But this is no guarantee of winning the election.  Shorten’s defensive posture - for the most part ‘protecting what we’ve got’ – will appeal to many people.  But ultimately we need more if we are to protect the vulnerable, and promote the rights and interests of the working class, and of low to middle income earners. Here’s hoping for more ambition from Labor as the campaign continues.

Saturday, May 21, 2016

Refuting Rita Panahi on Melbourne's Homeless ; Opposing Small Government; Rejecting the Character Assassination of Duncan Storrar



above:  An Iranian refugee, Herald-Sun columnist Rita Panahi has little tolerance for Conservative Islam when it comes to the role of women ; But since being a Labor Party activist in the 1990s Panahi has now 'swung Right' , and seems to have little patience for the liberal rights of Melbourne's Homeless.
 
What Follows are a number of Letters – written by Tristan Ewins to the ‘Herald-Sun’ and ‘The Age’ around May 2016 ; This time the topic matter includes ‘The Cost of Small Government’, ‘the Character Assassination of Duncan Storrar’, and ‘attacks on the liberal rights of the Homeless made in the Herald-Sun by columnist, Rita Panahi’….  At the time of my posting these none of these letters had been published.   Sometimes I succeed, though, so I am trying to persevere. :-)

 
 
The following was a response to Herald-Sun columnist, Rita Panahi – who attacks some of Melbourne’s homeless for daring to make a political protest against their plight
 
Rita Panahi and Intolerance for the Homeless: What of liberal rights?
Rita Panahi’s attack on the Homeless (HS 18/5) is distressing.  She argues that the protest in the City Square has become “political” because protestors are standing in solidarity with others for a more permanent solution to homelessness rather than just accepting the short-term solutions offered to them personally.  Here, Panahi’s comparison with the “Occupy” movement also displays an intolerance for political activism and protest.  Too often amongst more-conservative commentators there is an almost-systemic promotion of intolerance with regard rights of protest and civil disobedience underscoring our liberal society. Panahi admits that amongst these people there are “physical and mental health issues”, but she does not consider in depth the nature of those afflictions, and how they affect peoples’ capacity to provide for themselves long-term.. Also there is the question of housing affordability, including rental-affordability for those in poverty– the consequence of the housing bubble.  Panahi observes the social programs offered by the Salvation Army, inferring the solution is for individuals to give generously to charity. But while charities do valuable work, nonetheless homelessness and other social problems require resources that only government can bring to the table. It is entirely legitimate to demonstrate in favour of that kind of solution.
 

 
The following two letters cover very similar terrain to each other.  Their non-publication (so-far) is suggestive that the Herald-Sun may not accommodate debate on the issue of ‘small government’ – as if ‘both sides’ should take it  as a ‘given’.  The comparison with the Nordics illustrates just HOW small ‘small government’ is in this country ; and the social and economic consequences…. The example of Nordic Health Care versus US Health Care speaks volumes: Hence I tried twice to get that information published in the Herald-Sun…  'The Age' had published that information in a different context earlier in 2016.

 
The cost of ‘Small Government’: Letter One’

Malcolm Turnbull warns Australians to watch out for “Labor’s big spend”. Yet tax, in Australia is approximately  25% of GDP compared with approximately 50 per cent in the Nordic countries.  The Nordics understand that you must INVEST resources to reap the rewards.  Neglect of services and infrastructure saves money short term – but harm the economy long term. Transport and communications infrastructure add to productivity, and there is the prospect of new industries arising from Labor’s world-class National Broadband Network. ‘Human Capital’ means more high-wage, high-skill jobs – but requires an investment in Education. An interventionist Industry Policy can get unemployment sustainably down well below 5% boosting tax revenue and growth - but also requires resources. -(The Swedes demonstrated a sustainable rate of unemployment around as low as 2% was possible for several decades during the 20th Century)  Social consumption (via tax) can also provide better value and free-up wealth for private consumption elsewhere.  Nordic universal health care costs around 9% of their GDP, whereas the US system of (mainly-private) health insurance costs 18% of their GDP for only 40% coverage.  (from ‘Governomics’ by Lyons and McAuley) Finally we are a society, not merely an economy ‘in abstract’.  Health, Education, Aged Care, ABC and SBS, Roads, Rail, NBN – are ‘social goods’ which improve our security and quality of life.  These things are worth investing in if they make us happier and healthier.   If anything Labor’s policies are exceedingly-modest ; but still far-preferable to Conservative austerity.

The cost of ‘Small Government’: Letter Two’

The Herald-Sun (21/5/16) observes that “record high” taxation will soon be necessary without big spending cuts.  But Australian taxes are already extremely low (24.2% of GDP) compared with Denmark and Sweden. (at around 50%)  We would need to raise tax by approximately $400 billion to match!  Also, the economies of European and Nordic countries don’t seem at all worse off – despite Conservative warnings only ‘small government’ delivers prosperity. Higher taxes can mean better industry policies and better education opportunities – with the growth and prosperity which follows. Without so-called ‘bigger government’ we have regressive charges for higher education, the neglect of state schooling, and the destruction of public health (Medicare). Also, private consumption can offer bad value for money compared with ‘collective consumption’ via tax. The Nordics spend around 9% of their GDP on universal public health care, compared with the US whose private system soaks up 18% of their GDP for only 40% coverage.   So low-taxes are a ‘false economy’ leaving  Australians worse-off. And Labor’s proposed reforms (eg: $7 billion saved from Negative Gearing and Capital Gains Tax) are very modest when put in the global context.  (editor pls note: The stats on health care come from “Governomics” by Lyons and McAuley)


The following was in response to attempts to demonise Duncan Storrar in the Murdoch Press:  A low income worker with a family – Storrar pointed out on QandA how Scott Morrison’s election Budget provided very little for those on low incomes: 

Character Assassination to Stigmatise the Working Poor

Much of the mass media sees fit to dig up the past of Duncan Storrar apparently with the aim of discrediting arguments that have arisen around him about distributive justice in this country. But Duncan’s history in no way detracts from the needs of his family, or the needs of others on low incomes.  That includes millions of working people: in aged care, child care, hospitality, cleaning, retail, cab driving and more.  Some on around $40,000/year ; some on much less.  These are the people who suffer most from the GST – which is a flat (regressive) tax on consumption. They are the people who have suffered most from the user pays which followed privatizations.  They are the people who would suffer most from cuts in penalty rates. Indeed: in some ways the exploitation of the working poor props up the material living standards of others: and that is not fair.  Fairness demands a restructuring of the tax mix.. It requires a stronger welfare state,  social wage, and stronger labour market regulation.  The average wage in Australia is around $60,000/year: and even that is distorted by the weight of those on very high incomes.  Why is it that calls for fairness for workers and pensioners are branded ‘class warfare’ but measures which hurt the poor and vulnerable do not attract the same label?

The following was written in response to an ideological attack on the Left  published in the Letters section of the Herald-Sun around April-May

Response on ‘The Left’ re: Herald Sun

Anthony Gilchrist attacks ‘The Left’ on a number of fronts, and in a way which warrants a response.  Firstly, it is true that there is a double standard from many when it comes to the treatment of Christianity and Islam. As a Left-Wing Christian this disturbs me greatly. On the other hand our accepting and pluralistic culture has if anything provided a shield against Terrorism - ameliorating the alienation that can lead to Terrorist acts. Meanwhile with regard Indigenous Australia, closing the gap on Education and Life Expectancy remain legitimate objectives ; and a Treaty might provide the kind of reconciliation that enables us to ‘move forward together’ as a nation.  Gilchrist condemns multiculturalism ; but while there are crime problems in some migrant communities is it the ‘Christian’ thing to do to turn refugees away?  (Many of whom are Christians themselves, fleeing war and persecution)  Meanwhile, of course we should never forget or disrespect the sacrifice of the ANZACs.  But neither should we be uncritical with regard this nation’s participation in wars.  60,000 Australians died in World War One – many others horribly maimed and mentally scarred.  Only resistance from within the labour movement prevented the death of many thousands more.  That war was an Imperialist bloodbath more so than ‘a fight for freedom and democracy’.  Some people on the Left have drifted away from engagement, preferring to silence their ideological enemies. But calling the Left ‘un-Australian’ is just a way in itself of silencing critical opinions.
 

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