Wednesday, July 31, 2013

Does the ALP have a Social Democratic Vision beyond Austerity and Small Government?


above: Treasurer, Chris Bowen and Finance Minister, Penny Wong need to decide between 'Labor Values' or Austerity
There is an urgent debate that needs to be had in Labor before any commitments to further austerity writes grassroots Labor activist, Tristan Ewins.  Five-year commitments to 'quarantining' unfair superannuation concessions could prove to be costly to both the 'Budget bottom line' and to broader goals of social welfare and distributive justice.

Tristan Ewins,  July 31st 2013

For anyone who hadn’t noticed – Buried at the end of a news story on page nine of the Herald-Sun on July 31st   was an announcement to the effect that Labor was pledging “no changes”  “to superannuation for at least five years”, “locked in” via legislation.  Deceitful as always, the Herald-Sun proclaimed this would prevent “tinkering” via “super taxes”.  (this is deceptive because the issue is with existing TAX BREAKS on superannuation rather than the implementation of any new tax)

And on the same day on page 2 of the Herald-Sun was the proclamation that “households face thousands of dollars in higher bills for fresh food, health and education payments” if the GST is increased and/or expanded in scope – as demanded by the Business Council of Australia. (BCA)

So what’s the connection between these?

As the China boom recedes somewhat – and with the prospect of an ageing population - the government is facing a reduction in tax revenues, including revenue from Company Tax and the GST – at the same time as an ageing population will increase health expenditures in the context of a narrowing tax base. Then there’s the fiscal impact of winding back the Carbon Tax.  And on top of that you can add the fact that the country is suffering a massive infrastructure deficit – with business recognising that crisis – and its impact upon productivity – by demanding that workers, citizens and consumers pay the price.  

According to Grattan  Institute chief executive John Daley extending the GST to education, health and food “would potentially add $3000 a year to average household costs.”   And the BCA is also looking to attack organised labour in order to firm up their profit margins.

Malcolm Maiden at ‘The Age’ puts it this way: that “The BCA wants stronger fiscal discipline and a more flexible industrial relations environment…”  Translated that means: curtail industrial liberties, remove safeguards for wages and conditions; cut the social wage and welfare…  Maiden also observes that other moves are also apparently ‘on the table’; perhaps including massive cuts to Company Tax and a “ceiling on tax revenue as a proportion of GDP.” (The Age, July 31st)

To put it bluntly: Labor needs to decide WHAT and WHO it stands for.   Does it stand for the traditions of social democracy?  Does it stand for the vulnerable, and for the low and middle income earners of the working class?  Does it stand for social security and social solidarity? Or does it stand for small government, corporate welfare, regressive taxation, ‘survival of the fittest’,  ‘the top end of town’, and a preference for abstract economic goals, and increased private dividends and profits – instead of concrete social goals and needs?.

Richard Denniss of the Australia Institute has pointed out that changes to Australia’s income tax regime from before the GFC hit (ie: since 2006)  were costing $40 billion for the year 2013 alone.

And crucially he has made the additional observation that those superannuation concessions the Federal Government seems so eager to quarantine will cost about $50 billion a year by 2016.  And according to Denniss that’s with a dominant percentage of superannuation tax concessions of various kinds (ie: tax breaks) going  to the top 5% income demographic!   This at the same time as the Federal Labor Government continues austerity against pensioners, and considers further cuts to welfare and services!   (see:   (See: )

Of course the BCA will look after its own interests, and the profit margins and dividends of its members.  It will try and push the case for effective corporate welfare: for cuts in the tax business pays at the same time as taxes and user charges go up for workers, tax payers and consumers to provide the infrastructure and services its members benefit from.  This – and also assaults on workers’ wages and conditions – is about shoring up profit-margins and dividends by increasing the intensity and the rate of exploitation.

There are points of ‘cross-over’ when it comes to the interests of citizens, workers and business.  Keeping business generally viable means preserving jobs.  But the public interest and business interests should not always be seen as synonymous.  We should seek BOTH to divide the pie fairly AND to grow it through technological improvements to productivity, and support for high-wage industry.  (ie: NOT by intensifying exploitation through attacks on wages and conditions)

And we need to retain focus on the social goals that underscore our economy.  That is: not promoting profit as an abstract end in itself – but promoting economic activity which adds to the quality of life of citizens and workers.  This necessarily entails social investment in properly not-for-profit sectors:  health care, aged care, public housing, education for human development – and not just for the labour market.  It might also mean reductions in the working week, and in peoples’ working lives – for concrete human needs that go beyond abstracted goals of growth.

All sides of politics recognise the infrastructure deficit and the need “to do something about it”.  It is hurting our productivity – and in so doing hurting both workers and business. But we have  a CHOICE in the WAY in which we respond to that crisis. 

The Labor government can choose a path of austerity – attacking pensioners, the social wage, the welfare state, and industrial rights and liberties.  Or it can choose to embrace social democracy more than merely rhetorically – returning to questions of distributive justice and ‘the social good’.   And Labor can choose to act on those principles of distributive justice by committing to a gradual expansion of the social wage and welfare state as a proportion of GDP -  instead of embracing socially damaging ‘ceilings’ on tax and social expenditure.  Such ‘ceilings’ would only flow into greater social disadvantage and injustice - and most likely into infrastructure privatisation whose inefficiencies hurt both business and consumers. 

Notions of the social wage, public infrastructure and welfare ‘crowding out’ the private sector also need to be challenged.  A benefit of relative economic abundance is that consumers can potentially have significant room for discretion in their spending priorities at the same time as a decent proportion of peoples’ incomes is diverted into the ‘social infrastructure’ of services, physical infrastructure (eg; transport, communications, schools, libraries) and welfare – without which society itself would collapse, or lapse into barbarism.  It also means that people can potentially enjoy earlier retirement ages and shorter working weeks – as technological improvements to productivity make this possible over time without hurting absolute material living standards.   Though taxes would need to rise in order to maintain that “social infrastructure”.  (a fair ‘trade off’) The Nordic countries, and other European countries such as Denmark and the Netherlands – give us some idea what might be possible.

But in order to pursue such a social democratic vision Labor cannot and should not ‘hem itself in’ with ill-thought-out five year commitments on superannuation concessions which do not even have the authority of a National Conference position behind them! 

Also, another hung parliament cannot be completely ruled out, and the Greens will likely want reform on tax and tax concessions in that event.  ‘Locking itself in’ to such a position simply leaves Labor open to further accusations of promise-breaking should reforms and that area become necessary; or are seen as preferable after a meaningful, inclusive and genuine internal debate.

If removing superannuation concessions, reforming dividend imputation, and restructuring the broader tax mix can bring in tens of billions there is simply no need for the kind of austerity Labor is contemplating in order to return to surplus.  What’s more – Labor can implement such a program WITHOUT harming the low and middle income demographics which it depends upon for its electoral base.   It can aim at a fairer contribution from the wealthy and the upper middle class.  And through reform of tax, welfare and the social wage – Labor can pursue a distinctively social-democratic vision of ‘the good society’ which is much deeper than simply ‘more and more’ private consumption and production – regardless of the social cost.

But by contrast – allowing social and economic infrastructure to ‘wither on the vine’ will hurt everyone – workers and business included.   And turning to privatisation of infrastructure also passes the price of inferior cost-structures on to consumers – including both citizens and businesses.

Standing for the same agenda of austerity and distributive injustice as the Liberals – but ‘not quite as much’ isn’t enough to cut it for Labor; to inspire and mobilise the people we need behind us to win this election. 

ALP activists need to make their voices heard on these issues: regardless of whether they do so through the decision making forums of the Right or the Left; and/or through their local branches; and by writing to their local members.  We need to signal our intention to fight the ‘small government’ template: to stand for social welfare and social justice; and a distinctively social-democratic vision of ‘The Good Society’. 

References: ‘The Age’ and the ‘Herald Sun’, July 31st 2013; and Richard Denniss at:

Wednesday, July 17, 2013

Aged Care Crisis - Australia’s Greatest Shame

And What Will Rudd, Milne and Abbott do about it?

above: The needs of Australia's Aged citizens are just as urgent as the needs of the Disabled - sometimes more.  There is no excuse for not implementing National Aged Care Insurance along similar lines to the NDIS - or 'Disability Care Australia'.


In this article ALP Socialist Left activist, Tristan Ewins takes a look at the recent report on Aged Care at ABC's "Lateline" program - and puts the argument for comprehensive Aged Care Insurance - how it should be funded - and the services it should provide...


Earlier this week ABC’s ‘Lateline’ lifted the lid on an Aged Care Crisis which I hav e been trying to draw attention to for many years .    

In light of the revelations arising from the Lateline program, we will begin this article by recalling the basic substance of that recent (July 15th ) story.

ABC investigative journalist Margot O’Neil constructed a report for ‘Lateline’ after conducting a year-long investigation that common complaints about the quality of aged care in Australia included residents:

“being left in faeces and urine, rough treatment, poor nutrition, inadequate pain relief, verbal abuse, and untreated broken bones and infections.

And  further:

“one woman has told the ABC that her grandmother, who survived Nazi concentration camps, believes her experiences in aged care are worse than her wartime ordeal.”

Jane Green – daughter of former high intensity aged care resident Margaret McEvoy – recalled her own specific story to the ABC how, explaining how:

“For five days, staff tried to make Ms McEvoy walk. In fact, she had an undiagnosed broken thigh bone, a raging infection, and severe dehydration.”

The ABC further observed that:  “Ms Green, who is also a nurse, had to fight to get her mother taken to hospital, where she was immediately put into palliative care. She died six weeks later.”

In a similar story nurse and health care lecturer Mardi Walker:

“was horrified when she found her [91 year old] grandmother with exposed raw ear cartilage due to lack of turning, and one of her arms immobilised after staff botched injections.”

She recalls that: "They would just keep injecting into the same spot and she would scream. My mother said it was horrific, because she would scream.”

The ABC also made the accusation:  Repeated surveys find that 20 to 50 per cent of nursing home residents are malnourished, and the Australian Medical Association says there are not enough doctors to visit residents.” 

And meanwhile: “The Nursing Federation says there are not enough properly trained carers, while Palliative Care Australia says only one in five residents receive proper palliative care.”

New Aged Care and Mental Health Minister Jacinta Collins responded by reaffirming that the Government had  a “10 year plan.”

When asked by ‘Lateline’ the Minister had no credible answer to why the government has failed to act decisively in response to Aged Care abuses and systemic failures when compared with its response to abuse of cattle in Indonesia. 

Lateline journalist Emma Aberici further pressed Minister, Jacinta Collins on why Aged Care accreditation processes do not include assessments of the mental and physical well-being of aged care residents, including dehydration, malnutrition, depression, bedsores, falls, chronic pain, pain-management, over-use or inappropriate use of anti-psychotic medication, forced restraint and so on.

Collins was uncertain what research was being conducted in these fields.  She asserted that families can discern between different providers in the best interests of their loved ones.

But if there is a SYSTEMIC failure due to chronic LACK OF FUNDS and failure to enforce sufficient standards, then it stands to reason that families often have little choice.   And that is especially so when they are looking for a residence relatively close-by to enable regular visits.

Collins observed that over 200,000 Australians are currently in residential care – and that is going to expand dramatically with the ageing population. She also suggested that staff to resident ratios might be considered ‘in the future’. 

Finally, the Minister proclaimed she would visit Aged Care facilities ‘on the ground’ to see for herself the quality of care.   

But time is of the essence and action needs to be ‘locked in’ now  to be implemented in the near future – as a matter of urgency.   Collins also needs to visit a very wide range of facilities without notice in order to get a better idea of what conditions are really like ‘on the ground’ , while consulting closely with families who have reported neglect and abuse.

While Collins deserves to be given a degree of slack on account of only recently taking the Ministry, the Lateline Report shows that the time for procrastination and empty rhetoric is over. 

Rudd, Milne and Abbott need to immediately form a response to this story, and to the many stories provided by some residents and many families who have been trying – often without success – to bring this issue to the forefront of public discourse for years.  They need to devote new funds – many billions of new funds for every year. 

Alberici observed that most high intensity care resident spend less than 2 years in care.  And yet those can be two years of Hell. Whereas improvements in the standard of care could provide much greater comfort, better health, and perhaps extended (quality) life-spans.

I will now re-iterate what needs to be done; and what I hope others – including our politicians and political parties - will now demand to be done:

Firstly a National Aged Care Insurance Scheme needs to be established along similar lines to the National Disability Insurance Scheme – which in 2010 was estimated to cost $15 billion a year.  ($22 billion by 2020)   

A National Aged Care Insurance Scheme demands a similar commitment of resources; implemented as quickly as possible given the urgency of the suffering of our families and loved ones.  Immediate funding options include further increases to the Medicare Levy, cutbacks in superannuation concessions for the wealthy and the upper middle class, and reductions in the rate of Dividend Imputation. (reverting to 75% would save about $6 billion)

Such funding needs to secure the following outcomes:

·        Official quality control that includes comprehensive ongoing assessments of the mental and physical well-being of aged care residents, including dehydration, malnutrition, depression, bedsores, falls, chronic pain, pain-management, over-use or inappropriate use of anti-psychotic medication, forced restraint and so on .


·        Generous nurse/staff to patient ratios – improving the quality of care by freeing nurses and staff to turn residents to avoid bedsores;  wash residents whenever necessary; provide comfort and social interaction; ensure food is of decent quality and is actually eaten;  constantly monitor residents and ensure that health needs are always addressed as a matter of urgency.


·        Weekly visits by doctors and immediate provision of dental care for any who have the need .


·        Better training, pay scales and career paths for Aged Care professionals including nurses and other qualified staff.


·        Privacy for aged care residents including private rooms and other personal space.


·        Daily facilitated Social interaction; outings to shops, gardens and churches; access to information and communications technology and services; libraries; facilitated reading; discussions and games – A better life than being sat down to stare at a television, or perhaps just at walls all day!


·        Better programs encouraging volunteers to visit residents and provide conversation and comfort.


·        Provision of gardens and similar space to provide greater tranquillity and a change-of-scenery; as well as time in the sunlight during the warmer months


·        The best quality palliative care for all who have the need

Meanwhile for low-intensity care residents, and those being cared for by loved ones, greater financial support is necessary for Carers, as well as regular respite, and institutionalised support when it comes to health, outings, diverse social interaction, home help, and construction of extensions or ‘granny flats’.

Stop Regressive User-Pays!

For all levels of care, meanwhile, User-Pays mechanisms need to be immediately wound back.  This in itself will cost billions – on top of the cost of actually improving the quality and legislated standards of care.   

Again – we need to see this as a comprehensive National Aged Care Insurance Scheme along similar lines to the National Disability Insurance Scheme. (NDIS)  Those needing care should not be driven to take out tens or even hundreds of thousands of equity against their houses. This operates as a grossly regressive ‘flat tax’.  Residents from relatively poor and working class families especially don’t deserve this ‘final cruel blow’.

Residents who need only low-intensity care, meanwhile, need to enjoy the appropriate level of care, enabling greater flexibility and freedom as long as possible.

Finally Funding for Advocacy groups is necessary in order to empower families; and for purposes of supporting advocates for those not in a position to stand up for themselves against abuses.  (Eg: those without family, and those with dementia)

This issue will resonate powerfully with families: families who love their elders dearly, and those who (legitimately) fear for their own futures.   The mainstream parties – Greens, Labor, Liberals – all need a comprehensive response to the issues raised by Lateline – culminating in a consensus on a National Aged Care Insurance Scheme along similar lines to what occurred with the NDIS.  Procrastination, opportunism or mean-spiritedness on this issue need to be condemned in the strongest possible terms.

For those of us who care about this issue we need to maintain the pressure – and maintain the profile of the cause of reform.  We need to ensure the fullest possible reform over the shortest possible passage of time – as the needs of our most vulnerable are urgent – their sufferings neglected until now - demanding immediate action.

This issue is out in the open now for everyone to see.  There are no more excuses.


Friday, July 12, 2013

ALP Organisational Reform; and Urgent Policy Prescriptions


above: Could Rudd 'break through' on ALP internal organisational reform?

In this two-part article, Tristan Ewins responds to critical perspectives on ALP internal organisational reform put forward in the 'Herald-Sun' and 'The Age'. In part-two he also argues again for a definitive policy agenda from Rudd in the run up to the Federal Election, including National Aged Care Insurance.

Tristan Ewins

As Kevin Rudd settles in again as Australian Prime Minister there is ongoing speculation in the media with regards the election date, and the substance of Rudd’s proposed ALP internal organisational reforms.  

The Herald Sun holds that the latest possible day for the election  would be October 19th, with parliament likely reconvening in August.  And as I’ve argued before, I believe this option is to be preferred – as it provides Rudd with an opportunity to assert a credible policy agenda of his own for the next term;  and perhaps even ‘get some policy runs on the board’ – helping him acquire a more distinct and ‘up-to-date’ political profile.   We will return to the matter of policy soon; but first we will turn to Rudd’s proposed organisational reforms.

Rudd’s ALP Organisational Reforms

Also of concern is the response to Rudd’s projected organisational reforms in the “Herald-Sun’ and ‘The Age’.

In the ‘Herald-Sun’, (10/7/13, pp 22-23)    James Campbell tries to dismiss the reforms as a “Labor Power Grab” and effectively argues that the so-called ‘faceless men’ should keep their power in order to prevent grassroots influence shifting Labor policy to the Left!   Not only does Campbell make the outrageous assertion that grassroots members just “do as they are told” by “The barons and their henchmen”.  He makes the blatantly contradictory argument that: “the candidates would have to parrot their members’ opinions rather than attempting to appeal to the broad mass of uncommitted and moderate voters.” Hence  Campbell seems confused, making mutually exclusive claims about who’s really in control.  Though he makes a more insightful observation that spending caps would be necessary for campaigns to stop costs from getting out of hand.  

Meanwhile in ‘The Age’ (10/7/13) David Day makes a more credible argument.  Day apparently accepts Rudd’s proposal of a vote for party leader based on 50% rank and file votes, and 50% of caucus. But he points out that the requirement for 75% of the caucus to support any party-room spill before any change in leadership between terms leaves parliamentary Labor with very little room to move.   So perhaps a 60% or 65% requirement would be more appropriate, setting the bar higher for leadership challenges – but not too much so.  And such mechanisms would need to be deployed with great reservation –due to the logistics of organising ballots.    (and the destabilising effect of ballots too often)

The question of a union component in electing the leader is a complex one, and it seems to work in Britain.  There are arguments both for including the unions in this process, or instead emphasising the empowerment of the rank and file- which could be necessary to boost critically declining member levels.

Day also makes the valid observation that a more ‘presidential style’ in elections and politics is probably bad for Australian democracy: making politics more about personalities than policy. (and in a way which really doesn’t fit the Australian Constitution)   Though restoring the federal caucus’s role in electing the Cabinet is a check against such reversion to a presidential style of politics.

There are a number of observations that should arise from this discussion.

Firstly the ‘faceless men’ rhetoric is stale, and could just as easily be deployed to refer to internal Liberal Party power-plays by Costello, Kroger, Kennett and the like.  Though the proposed reforms would dilute greatly the power of union leaders – who are often relatively unknown by the public – to influence leadership ballots.   Yet as things stand affiliated unions would still influence pre-selections and the Party Platform.  

This flows in to broader debates about the proper role of unions in a party of labour – if that is to be what Labor remains. (at least as one facet of a multi-faceted party) One option would be to have direct election by the Labor members of National Conference delegates and of parliamentary candidates.  This would give local Conference delegate elections much greater relevance and urgency – revitalising local branches – who would have more immediate influence over the Platform.  Though unions would also continue to contribute with the election of 50% of the Conference delegates, and therefore 50% of the National Executive – hopefully on the understanding that the Party Platform would be respected, and only diverted from as a consequence of dire tactical or strategic necessity.  (and if the reform could be secured - with the consent of at least 60% of the National Executive) 

Former NSW treasurer Michael Costa is effectively arguing for union representation at Conference be brought down to less than 17 per cent – the rate of unionization in the broader workforce.

Arguably, though, maintaining an organisational link with the unions is an important means of anchoring Labor in the needs of labour, and preventing a populist drift to the right on industrial rights.  Even were unions not included in the leadership ballot a renewed culture of respecting the decisions of Conference could empower organised labour on that front relative to today.  Of course there is the common argument that some union leaderships have abused the trust of their members; and some have used unions as personal fiefdoms and power-bases. And this author is uncertain of the balance of factional forces in affiliated trade unions. But promoting a political outlook (rather than and purely industrial outlook) is a good thing. And conceding the decline in the collective organisation of workers, and their ability to exercise solidarity through mutual association is not the answer.  Building ‘chains of equivalence’ amongst diverse social movements, however, is part of the answer; and hence union control of certain ‘economic chokepoints’ could one day be central to defence of our rights and liberties.    A novel option could be to broaden the ALP’s social base by allowing other genuinely progressive environmental, civil rights and social welfare organisations to affiliate.

And in response to James Campbell:  Apart from the contradictions in his argument, he is also assuming that the Labor rank and file have no self-restraint, and no independence of thought.  But in reality, even at the furthermost organised reaches of the Labor Left there is an appreciation, these days, of the need to develop electorally sustainable policies.  (If anything, re-active (rather than pro-active) electoralism has gone too far, with insufficient emphasis on grassroots mobilisation, and on the ability to carry a debate on the basis of mobilisation and quality of argument)  

If Labor moves to the Left – and I believe it should in a range of areas from fiscal policy to welfare and a liberal, civics-oriented National Curriculum – it needs to do so in such a way that carries the relative centre of debate and opinion with it.  Or failing that, to carry some radical reforms through at the relative margins.  (curriculum reform for instance)  Rank and file members understand this.  And given the vigorous promotion of a robust culture of internal debate, new members would most likely understand this as well.

Further: were significant organisational reforms instituted there could be a massive influx of (tens of thousands of) new members. The groundswell could overwhelm the capacity of the factions to control assuming the Party wanted to promote and accommodate independent grassroots activism and organisation.  Independent candidates could arise for Conference; as could new formations.  (perhaps with the re-emergence of a ‘Centre-Left’)  But self-discipline would arise in the context of an internal discourse on having to carry the relative electoral centre and shift it in real terms towards greater social equality, and greater personal and collective liberties over the long term.

Big Policy Options for Rudd

Above: Compassion, Social Responsibility and Distributive Justice needed on Aged Care

National Aged Care Insurance

An important and central policy initiative could be National Aged Care Insurance: again paid for either from superannuation concession reform, reduction in the rate of Dividend Imputation to a rate of 75%,; and/or extra tiers in the Medicare Levy.   

As 2013 Australian of the Year and President of Alzheimer’s Australia, Ita Buttrose has pointed out, the quality of residential aged care especially is a ‘running sore’ for the country. This is especially the case with the treatment of residents suffering from dementia – with over-medication and forcible restraint employed far too liberally.   And premature or unnecessary residential accommodation is common in Australia compared with other nations, sometimes leading to a swift mental and emotional decline.  See:

But a National Aged Care Insurance Scheme could ensure  high quality aged care of whatever kind  is needed - whether residential, low-intensity or at home.  This care would be provided on the basis of need, and not on the basis of user pays.  

As the Combined Pensioners and Superannuants Association argues (NSW):

While there are many practical problems associated with making equity release work as a significant funding source for aged care, CPSA is fundamentally opposed to forcing people who have no other significant assets to sell or reverse mortgage their home to pay for residential or community aged care. Their home is all they have got and it is something they have worked long and hard for. They need to keep control of their home ownership for as long as they want or need to for the sake of their dependant/s.” (see: )

For those needing residential care, the package I am suggesting would include further improvements in wages, conditions and career paths for Aged Care workers and nurses.  And there could be mandated improvements in staff-resident ratios;  provision of private rooms; new standards with regards regular outings, social visits and other facilitated social interaction; provision of information and communications technology; standards for the quality of food and to ensure that food is actually eaten; incentives for nursing homes to provide garden space for residents; provision of dental care for all with the need. Aged citizens in residential care need much more to do than be sat in common rooms starting at walls, or at the television all day.

And for those wanting and able to remain at home; including with the support of personal carers (often family), such a scheme could also increase the level of support in similar ways.

Importantly: The Combined Pensioners and  Superannuants Association has also observed that the National Disability Insurance Scheme cuts out at 65.  Arguably this can only be justified if ‘the slack is picked up’ (completely!) by Aged Care Insurance – with no loss in quality of support or care. (and indeed there must be improvement of care regarding the specific needs of aged disabled Australians)  National Aged Care Insurance can ensure support for these needs can be ‘locked in’!   See:

Aged Care Insurance would resonate strongly with many Australian voters.  Like disability, problems of aged care and support in the community is something that any Australian might have to confront one day – whether for themselves or for their loved ones.  Extra funding is already necessary to meet the needs of some of our most vulnerable; and with an ageing population there is a stark choice between fiscal pressure and neglect – or fiscal reform and improved services for all in need.  The fear of relatively low income and working class families of being forced to sell their only significant asset (their home) is also great and cannot be understated.  Much political kudos could be gained by meaningfully addressing those fears.

Movement on ETS still Vital

Finally and as I’ve also argued before – and as I emphasise again -  Rudd would be wise to revert early to an emissions trading scheme (ETS), while placating the Greens with extra resources for the Clean Energy fund. This would free Labor from the impression of having ‘broken a promise’ on the carbon tax.  (sadly, that is regardless of the real substance and value of the policy, which I personally supported at the time; Perhaps the backlash could have been contained with earlier implementation – but it is too late now…)  Such an early reversion could be paid for with further superannuation concessions reform; and with plenty of funds devoted to tax breaks and cost of living measures for low income Australians. These would be specially targeted to neutralise the anticipated response of bosses to increases in superannuation contributions. (ie: holding back on wages)  A legislated increase in the minimum wage could also help, as could further Federal Government subsidies for skilled low-income workers in areas like child care and aged care.

These are interesting times.

Sunday, July 7, 2013

Observations in the Wake of the Rudd Restoration

above: Julia Gillard
A Retrospective on the  Gillard Leadership - and Last Chance Policy Fixes for Rudd Labor

i)                    Much to be treasured from the Gillard Leadership: and Rudd’s motives more complex than recognised by some Feminist critics

Recently I read an article claiming that the core issue behind Julia Gillard’s loss of the Labor leadership was a ‘boy’s club mentality’; that is put simply: patriarchy re-asserting itself…  (See: )

I think, though, that things are more complex than the author of that article acknowledges. I agree that Rudd took advantage of the ‘blue tie factor’ in response to the Gillard speech. Responding to male resentment following Gillard’s recent speech on the threat to women’s participation in public life, it was a clever ploy – underscoring impressions Gillard was being divisive, and appealing to a mass male demographic which felt threatened by Gillard’s stand.  I agree this was a form of destabilization – and even if effective, it was the [ethically] wrong ‘symbolic tactic’. And I agree there have been men – powerful right-wing men – who have subjected Gillard to constant mockery in order to weaken her authority and credibility – and sometimes in the most debased and sexist form.   And that sexism still comprises a problem in parts of the broader electorate as well.

But this was also personal vindication for Rudd in a way that goes way beyond gender… If Rudd had been ‘done in’ by another man his bitterness was have been just as palpable. Arguably, there was also bitterness in the 'Rudd camp' because it appears Rudd as PM was removed at the behest of Australia’s powerful mining industry – after he had attempted to introduce a Mining Super Profits Tax to spread the benefits of our mining boom… As I’ve said before – both ‘camps’ in Labor tried to set a precedent.  Each side attempted a ‘political scorched earth’ strategy against the other – and that only escalated the division and crisis. That an accommodation and reconciliation was not achieved earlier led us to this point – with the caucus elevating Rudd as their ‘only hope’ due to his consistent ascendancy in the polls.

Importantly – the monopoly mass media in this country (largely controlled by Rinehart, Murdoch etc) exploited the internal conflict to destabilise the ALP.  But now that Rudd has returned he is enjoying a ‘honeymoon’ courtesy of previous ‘oxygen’ he was provided by that very media establishment… But will the media continue to ‘give Labor a fair go’ now?  Some are talking of Rudd reforming the compromise mining tax we ended up with – But what chance of this with Rinehart dominating the traditionally (and still relatively) liberal Fairfax media assets?

IN the final analysis, though, Gillard deserves credit for pursuing education reform, implementing disability insurance, promoting a better deal for low paid workers (mainly women) in the community services sector and elsewhere, and improving diplomatic relations with China. Though there were bad policies too: Sole Parent Pensions reduced; Disability Pension eligibility narrowed etc… Recognition of all this is part of the answer for future healing in the ALP – for the same reason that the former Labor leaderships’ past attempts to ‘airbrush’ the Rudd governmentt’s prior achievements only escalated and deepened the internal conflict… And in any case Gillard DESERVES recognition for her policy achievements under the most difficult circumstances of minority government…

Here’s hoping Labor now has a chance of fending off the prospect of an Abbott Liberal Government – which could be the most right-wing government we have had in decades should it come to pass…

ii)                  Conclusions: Possible Election-Winning Rudd ‘Policy Fixes’ as the ‘Day of Reckoning’ Draws Nearer

above:  Will Rudd take the Opportunity for Bold Reforms that take the Fight to Abbott?

Superannuation Concessions Reform to pay for ETS reversions: and Tax Breaks to pay for wage cuts flowing from Superannuation Increases

To go early? Or go later and maybe reconvene parliament?

I believe it would just be good for Rudd to "get some reforms under his belt" before the election if possible; including restructuring the tax and spending mix in such a way as to pre-empt Abbott... (For example: if we remove superannuation concessions from the wealthy and the upper middle class to pay for winding back the carbon tax to an ETS...)  If we don't do this and Abbott wins - he can use fiscal pressures as a rationale to wind back social expenditure and welfare. So if possible we should get the reforms in place while taking away the Abbott excuse/rationale for austerity. Getting 'reforms under his belt' could also give Rudd more credibility - a concrete indicator of the direction he intends to take Labor should he win the election.

Not to mention we should have an interest in distributive justice for low and middle income Australia regardless of pragmatics. In 2012 Dr Richard Denniss of the Australia Institute argued that removing superannuation concessions from the top 5% would save over $10 billion.   (See: )

Meanwhile, today that figure would be significantly higher: and targeting the top 10% demographic would presumably bring in much more.  

So not only could this money pay for an early reversion to an ETS. (which is a very regrettable political imperative)  The removal of subsidies/concessions for the wealthy and upper middle class could pay for an expansion of the Clean Energy Fund. And it could also pay for improved welfare - and make room for tax cuts for low income groups to overcome the effect of the increase to 12% superannuation contributions for these already-struggling families.   

To clarify on superannuation: veteran Fairfax journalist Ken Davidson made the point in 2010 that those on low incomes cannot afford to lose disposable income.  And he has pointed out that the extra employer contributions will largely be ‘swallowed up’ as bosses hold back on wage increases.  (see: )

Davidson is right that today the superannuation industry comprises a private pension system – where risk is privatised – and within a highly inegalitarian framework.  While the Aged Pension was once a great leveler – in the future retirement income will be greatly stratified and effectively discriminate against women, and low income, part-time and casual workers.  The Aged Pension itself faces potential future marginalisation as a second-class, residual system. 

And as Davidson notes there is growing pressure for governments to privatise their remaining assets by selling them to the superannuation funds.   This is presented as saving governments from the need to invest in future infrastructure. But what would the ultimate consequence be?

There remain potential problems, here, even where those funds are union-controlled.  There is the potential that they may increasingly comprise ‘corporate interests’ – which pursue their own particular interest rather than the general interest. 

As the important socialist thinker Eduard Bernstein pointed out as far back as the 1890s - as the “mistress of a whole branch of production” even unions theoretically have the potential to  become “a monopolist productive association…antagonistic to socialism and democracy…”  Here,  “Associations against the community are as little socialism as the oligarchic government of the state.” (Bernstein; pp 114-119, pp 138-141)    Of course there is a difference between Bernstein’s example here, and that of Australian unions – but the theme of general versus particular interest is the same. (the answer, of course, is natural public monopolies where appropriate)

Referring to the Superannuation Industry, Ken Davidson wrote for the Sydney Morning Herald in 2012:

“Specifically, the superannuation industry has its eye on existing water, road, rail and port assets, which are largely monopolies with assured income streams. To reveal what is at stake, assume that, as state monopolies, these assets earn 5 per cent on capital for the government and would be expected to earn 10 per cent on capital for private investors… This means that the assets worth $100 billion on the government's books, would only be worth $50 billion to the private operators if the prices for the services remained the same. The government might get $100 billion for the assets if it allowed the new owners to double prices for the services.” (Read more: )

It is too late to substantially alter Labor’s 12% superannuation promise, and too difficult to sell Davidson’s complex message to the electorate on the eve of the election. Especially when Labor has been selling this policy unequivocally for so long, and many of our supporters are convinced it is ‘free money’.

But the government has options in creating a more egalitarian system.

Again this should involve cutting superannuation concessions for the wealthy and the upper middle class – which could bring in well over $10 billion. (I have no modeling beyond Richard Denniss’s figures ** – but extrapolating from that a minimum of $15 billion seems credible for 2014) And using some of those proceeds, in addition to paying for an early reversion to an Emissions Trading Scheme, and an increased Clean Energy fund - it must also mean further restructuring of the tax mix. Further, it should also involve easing of means tests for some partial self-funded retirees. And what is more, this could involve another real increase in the Aged Pension, and improvements in social wage benefits for pensioners of all kinds. This should include improved cost-of-living subsidies (energy, water), and free or discounted access to the NBN and public transport. Finally, here, the funds released by superannuation concession reform could be ploughed into infrastructure and completely bypass pressures for privatisation.

Concluding, though, the most industrially strong unions could attempt to hold onto their share (ie: the labour share) of the economic pie – even in the context of increasing superannuation contributions from employers - but also in the hope that this could occur in the context of a squeeze on profits, rather than a squeeze on consumers. Whether or not this happens also depends on how profitable and how competitive the economic sectors in question are. Competitve sectors with lower profit margins would have little room to move.

The election is far from over; and neither are Labor’s policy options exhausted even at this late point in the electoral cycle. Let us hope Rudd Labor governs and reforms in the interest of justice and equity for most of what remains of 2013 – and that the consequence is another reforming Labor government.


Allison Pearson from ‘The Telegraph”

Bernstein, Eduard  “Evolutionary Socialism”, Shocken Books, NewYork, 1961

Ken Davidson at ‘The Age’ and the SMH::

** Denniss argues removing superannuation concessions from the top 5% income demographic alone could bring in $10 billion in 2012; For my purposes I am assuming the top 10% should be targeted in the reforms I am suggesting.

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