Sunday, June 30, 2013

Whatever ? Voter Alienation in Australia’s Neo Liberal Capitalist Reality and the Need for a New Democratic Socialist Economic Model


In this latest article, ALP activist and democratic socialist, Geoff Drechsler argues against austerity and for a revived democratic socialist approach to economic management. He argues for the Left to assert itself on the economy - including in the form of economy democracy and full employment.

by Geoff Drechsler

One of the less discussed trends in Australian politics is 'voter disengagement' - the declining rate of voter enrolments, prevalent amongst young voters, and the steady increase in informal voting, particularly in working class areas. At the last federal election, in 2010, in the federal seat of Blaxland, informal votes accounted for 14% of the total votes cast, up from 9% at the previous election in 2007. Before the recent WA state election, one in three 18-25 year olds was not enrolled to vote. Looking specifically at young voters not enrolling, a similar pattern can be observed in other developed democracies, which have predominantly voluntary voting systems. In each new generation in these countries, voter turnout has been steadily declining generally for the last five decades or so. But after decades of economic growth here, why are young Australians so lacklustre about enrolling to vote ??

Could this disconnect be the product of the reality that 20 plus years of economic growth has not led to an increase in economic security, particularly for this group ? The two main political parties have both embraced key neoliberal economic tenets in recent decades, and irrespective of economic growth or not, this still results in greater fluidity in the labour market and less equitable economic outcomes across the community. Also, the high cost of living in major Australian cities then in turn has a multiplier effect on those in this predicament, and delay the events that usually mark the path towards adulthood - starting a family, purchasing a home and getting full-time stable work. Given the dearth of choice politically on economic policy, and the lived reality, the point of voting is maybe somewhat less obvious or attractive ?

Prosperity without Security

* Since 2008, the number of teenagers in full-time jobs has fallen from just under 270,000 to about 200,000 in 2012. In 2012 a quarter of 18-19 year olds were not in full-time study or work.

* Rates of part-time employment have increased significantly. The 2012 edition of How Young People Are Faring indicates that the number of teenagers in part-time work and who were not in education increased from 8.7% in 1986 to 30% in 2012. The proportion has more than doubled for 20 to 24 year-olds from 8.3% to just over 19% during the same period. This reflects a long-term pattern of replacement of full-time employment with more part-time jobs within the teen and young adult labour markets

* ABS data indicates that in 2011, a third of the 814,700 part-time workers who would prefer to work more hours were aged 15 to 24 years. Around 28% of underemployed part-time workers in this age group had insufficient work for a year or more (what the OECD defines as "involuntary part-time work").

Ultimately, it all comes back to economic policy, and the embrace, by centre left parties of neo liberal economics is linked to events at the end of the 20th century. Internationally, there is now a tendency on the Left to focus on social issues and policy because in the 1980s, the failure of the Soviet centrally planned economic model, and the inability of the Scandinavian nation state social democratic economic systems to make the transition to participating effectively in a globalised international economic system undermined the two most widely accepted “left” economic models almost simultaneously. Subsequently, many centre left governments have simply grafted left-wing social policy onto a basically orthodox right wing economic program, seemingly in the hope the former will ameliorate the latter. The absence of a credible "left" economic model has also allowed the Right to dominate economic debate for the last 20 years too. Seizing the opportunity, in countries that have had long term right wing governments during this period, including Australia, these conservative governments have manipulated predictable less equitable economic outcomes (and the inevitable resulting fluidity in the labour market......), and the subsequent insecurity that is generated to undermine the institutions of the welfare state (how popular is Centrelink ?) and promote individual solutions - 'work for the dole', making public sector workers self-employed individual contractors etc etc. This is all enabled by a general loss of faith in collective solutions in the community.

More recently though, due to the 2008 Global Financial Crisis, free market capitalism, and its derivatives, have lost popular credibility as a result of this economic collapse, and failed right wing policy remedies for this. A practical example of this is the UK Conservative Liberal Democrat coalition government austerity program that commenced in 2010. It has all been in pursuit of some ephemeral notion of a 'balanced budget', based on the outdated notion of "the Treasury view"— that fiscal policy has no effect on economic activity. Two years into this austerity program, the UK started 2012 with the biggest trade deficit since 1955, and the government’s adherence to classic neo liberal economic policies has put the UK economy into recession. Fortunately, finally, it appears even the IMF is now questioning austerity budgets. Olivier Blanchard, the IMF chief economist's paper on austerity, at the last American Economic Association's annual meeting, concluded that austerity program's adverse effects are stronger than believed. There is even a new book that claims austerity is seriously bad for our collective health, and that cutbacks have already had a devastating effect across Europe and North America. It points to soaring suicide rates, rising HIV infections and even a malaria outbreak, researchers arguing that in fact governments' austerity drives are costing lives in The Body Economic: Why Austerity Kills.

In contrast, in the post-war period, the one thing that has characterised successful left wing governments of all orientations, whether Chavez's Venezuela or social democratic Sweden has been a successful economic model. These have all also placed a strong emphasis on employment. In Venezuela, between 2002 and 2012, the government has increased social spending by 60.6%, and extreme poverty was reduced from 40% (1996) to 7.3% (2010). Part of this program is the intense political participation that the Venezuelan democracy incorporates, that includes 30,000 communal councils, which determine local social needs and oversee their satisfaction and allows ordinary people to be protagonists of the changes they demand. But also, the Venezuelan economy has low debts, high petroleum reserves and high savings and the Venezuelan economy has grown 47.4% in ten years, that is, 4.3% per annum, and reduced unemployment from 11.3% to 7.7% in the same period. In modern Sweden's case, high rates of productivity, historically low rates of unemployment and high standard of living for all of its citizens in the post war period in one of the world's most highly developed post-industrial societies. Both of these examples show that a viable alternative economic model that has refocused the economy's outcomes more equitably, delivered growth, jobs and development and consequently, unsurprisingly, then led to longer term electoral success. Even at a workplace level, there are numerous examples of successful enterprise level exercises in industrial democracy that have been economically successful, from Ricardo Semler's Semco in Brazil, to the Mondragon Cooperatives in Spain. Ricardo Semler has also been a visiting scholar at the Harvard Business School too, demonstrating the widespread applicability of his ideas.


A viable democratic socialist economic model would be characterised by a mixed economy characterised by a leading role for different forms of social ownership, a proactive role for government and democratic planning, alongside market forces and a viable private sector, introduced incrementally as a consequence of electoral endorsements. The key long term aim of this program is to democratise key economic decision making and incorporate the aspirations of the majority of the population in regards to this process. Undoubtedly, full time permanent full employment being an overt public policy goal (again) is probably one expression of this.This in turn will also lead to more equitable economic outcomes, through moving beyond the pursuit of the profit motive being the sole economic benchmark of success. At a workplace level, alienation would be reduced as workers gained more control by encouraging cooperative and collective workplace industrial democracy process. And a rejection of failed free market orthodoxy will lead to more equitable outcomes that reduce income disparity between the richest and poorest and reverse the trend of Australia being one of the most unequal developed societies.

All of these changes listed above could utilise technological improvements to allow greater distribution of information and participation in workplace decision making in post-industrial white collar workplaces too.

Geoff Drechsler is a Labor Party and trade union activist.

Generation next: where to for Australia’s young people?

Youth face snakes and ladders on the path to full-time employment

Paul Krugman “The Big Fail" - NY Times 6.1.2013
Austerity kills, economists warn



Volume 20, issue 1 of Australian Socialist is now available.
* Accord Politics

* Right to Strike;

* 457 visas

* Left Unity

* Obituary (Pip Duncan)

* Theory of Value

* History of Palestine

* Power of bankers

* Hugo Chavez

* Irish Political Prisoners

To obtain a copy, please send a cheque for $4 made out to "Australian Socialist" (or postage stamps to a value of $4) to:

PO Box 437; Jamison Centre PO; Macquarie ACT 2614

and include a clear return postal address.

Sunday, June 23, 2013

Leadership Speculation Again: Resolving the Crisis with Good Policy

above: With a possible Abbott government looming, Labor needs a clearer sense of where the real threat is coming from;  Tristan Ewins argues that Reconciliation is necessary now if there is to be any hope; And robust policy could be the key!

Tristan Ewins, June 23rd 2013

Regarding ongoing leadership speculation in the ALP: What we have witnessed has been a ‘mutual scorched earth policy’  in the party and the caucus.  We’ve had some figures (Rudd supporters apparently) leaking constantly to the media; and even accusing Gillard of ‘class war rhetoric’.  And on the other side we’ve had high profile Ministers besmirching Rudd’s character and saying they would NEVER work under him again.  In short it is “mutually assured political destruction’: “political scorched earth”…

The ridiculous and self-destructive ‘class warfare’ claims of some have been particularly damaging  – as this has acted to discredit the social democratic and labour cause – the ideology and the principle of socially just redistribution and the liberal and social rights of labour…

The bad blood is now SO bad that I despair the party might never heal…  What is necessary for hope of healing is to have such a powerful policy agenda that it serves as an irresistible catalyst to re-establish solidarity. 

This could involve reform of the mining tax. Regardless of his flaws: even if Rudd does not return to the leadership this could be a kind of ‘vindication’ for posterity.   That could create an environment where all parties could ‘move on’ on the basis on conciliation…   This could also involve clear and public recognition that he provided strong political leadership in response to the Global Financial Crisis, with the Education Revolution   and with the Apology.  For this both  Rudd and the broader party deserve recognition.   Unequivocal recognition of these achievements specifically could do a great deal in achieving healing.

But MOST IMPORTANTLY: Labor needs to revisit the issue of superannuation concessions to fund a strong social wage and social insurance agenda.  A progressive agenda of ‘Whitlamite proportions’ could also be a healing influence – with all parties seeing that with so much at stake their consciences would not allow the currently mutual sabotage and ‘scorched earth’ approaches  to continue.... 

What more could all this entail?  

Firstly it should involve superannuation concession reform – aimed at building in a progressive and sustainable manner a powerful ‘war-chest’ for an ambitious social wage and social insurance agenda.  And a reversion to 75% - or perhaps  50% - dividend imputation – could also provide crucial funds.

So precisely which other policies would this war-chest fund?  The following are a number of ideas which the author remains passionately committed to.

·         National Aged Care Insurance providing for the human rights of all aged Australians; and funding that progressively without driving poor and working class families to sell their only substantial assets for what is inadequate care in any case.


·         More robust funding for mental health initiatives, including public education programs to address stigma and encourage early intervention; and access to psychological counselling.


·         Extensive Cost of Living Assistance for low income individuals and families including pensioners when it comes to energy, communications, transport, medicine and water. Furthermore: Public energy and water ownership can mean cross-subsidy rather than passing the prices indiscriminately on to consumers.  And more federal funding for transport and energy infrastructure could prevent reversion to wasteful and expensive PPPs – or worse, fully private infrastructure.


·         A commitment to keep the NBN public over the long term with cross-subsidised services for poor and vulnerable groups.


·         Sustained support for Australian manufacturing and the liberal and social rights of labour- including encouragement for high wage, high skill manufacturing


·         Welfare reform: especially of Newstart and the Student Allowance.  And Revision of eligibility criteria for the Disability Pension – which have become too narrow and which serve to discriminate against genuinely disadvantaged and vulnerable people. 


·         Tax compensation through restructure of the tax mix for low income Australian workers so that they will not be worse off re: their disposable income ‘living week to week’ when superannuation contributions rise to 12% 


·         Direct public compensation/subsidy  for skilled but low income workers – eg: in child care; and further reform of the tax mix to aid other low income workers. 


·         Federal money for public housing to take pressure from the housing market; And provide education funding of the scope originally envisaged in Gonski. 


·         A rescission of bad and unpopular decisions on university funding and sole parents.


·         Further reform of the National Curriculum to promote a liberal education agenda for active and informed citizenship, including ideological and political literacy


·         Begin a genuine consultation process leading towards a Treaty with Indigenous peoples


·         stamp duty relief targeted for low income individuals and families – so they are free to move to cheaper accommodation without having to pay the tax. For some people that could make a real difference.

Indeed, there are probably a host of other possibilities – but depending on the scope of tax and superannuation reform we would be talking an annual war-chest  for new initiatives of $10-$25 billion in an economy worth about $1.6 Trillion.

Regarding the leadership: there are substantial numbers of Labor parliamentarians, functionaries and rank and file who probably think that they want to set a precedent.  Neither side wants ‘to give in to blackmail’ – but both sides are playing the ‘political scorched earth’ game.

It has to stop – and it has to stop now.

Calls for direct election of the Party Leader could well be a good move for the future – to provide a degree of authority surpassed only by the Conference itself.

Time is of the essence; and the threat of a right-wing neo-Conservative Abbott government far too dire.  “Mutually Assured Political Destruction”; “Political Scorched Earth” – it has to stop now.

And more than leadership – regardless of what happens on that front – the key is a policy agenda to unite the party; recognise past wrongs on all sides; and resolve never to repeat those errors again.

(postscript)  All that said it's important that yesterday 'The Age' in Melbourne was arguing for Julia Gillard to step down so there can be a change of focus to policy and ideas and away from the leadership. It shouldn't HAVE to be like this. We have been trying to put policies out there for MONTHS which have largely been ignored in the monopoly mass media. (including 'The Age' itself for a while) 

So what are our choices? Concerted destabilization during an election campaign and in the face of a prospective Abbott government cannot be rewarded. But there needs to be recognition of past wrongs – and open and emphatic recognition of the earlier place of Rudd in ALP history - re: the GFC, the education revolution and the apology...  This could help in restoring peace and good-will. But what if the media won't let the leadership issue go? And what if the destabilisation continues right up to the election in any case?

So what else could work as a 'political circuit breaker' without setting the bad precedent of rewarding systemic destabilisation? As suggested above a more robust policy agenda could provide an answer.  (you would think this would win over progressive Left parliamentarians including Cameron and Carr)  And some will be considering a ‘third option’ of an untested leader to break the impasse. Possibly the destabilisers might be satisfied with the 'precedent' this would set with regards the original 'coup' against Rudd in 2010.  But would this be seen as a ‘poison chalice’? And would it create the impression of more instability?  Whatever happens – all this needs to be finalised quickly. Labor needs to throw itself into the campaign unreservedly and cannot afford the constant distraction of the leadership as opposed to policy.

Sincere and constructive debate welcome!

Sunday, June 16, 2013

Chris Warren on Green Economics and Capitalism

In this submission to Left Focus by Chris Warren the author argues radical action is necessary to save the environment, as well as transform and 'green' the economy beyond dependence on fossil fuels.  Chris Warren is a long-time socialist activist.

Chris Warren, June 16th 2013

Lets be clear. Throwing millions of years worth of accumulated carbon
into the atmosphere in an geological instant (ie a few centuries, 1700
to 2100) will create chaos and catastrophe even to the point of
regional and possibly global, uninhabitablity. The message is clear –
if you destroy the environment, the environment will destroy you.

So now, in our paper-back littered West, cries are being heard for
Green economics, for prosperity without growth, for downshifting,
and/or for something called deep economy. None of this has any impact
on superannuation funds, bank lending, trading, or fossil fuel
extraction. Faced with all this failure, and electoral explulsion
from Parliaments, all that Green economists can call for now
typically, is civil disobedience. This is a path to extinction.

In all of this, the missing element is politics. After acres of
paperback pages describing symptoms and at the very back of his
Affluenza, Clive Hamilton dips his toe into our future, if we
are to have one – “New Politics”. Unfortunately in this final
chapter, the politics is missing. Challenging the main political
parties to question their assumptions is fatuous. Associating New
Politics with “a right to choose…in a way that rejects market values”
and with “exercising our right to withdraw from the market” (185f) is
naive. Dealing with our attachment to consumption is the wrong end of
the stick. Consumption is a means to an end and capitalists know that
they can rely on 80% plus of the population consuming all of their
income - even as they are criticised by paper-backs from the 2%, or by
any number of ‘progressive’ think-tanks and fancy resolutions from
numerous ALP and Green branch meetings, or from conferences swarming with
upper middle class concern-mongers.

The underlying problems are two. Firstly we must rid ourselves of all
this enclave idealism that just diverts and destroys the movement.
Then we need to rebuild our understanding based on addressing the real
cause and facilitator of fossil fuel exploitation – the capitalist
mode of production. ‘Green economics’ is misleading; we need and must
develop Green ‘political economics’ and an international orientation.

Environmental exploitation only occurs because it delivers competitive
advantage that generates profit. Under capitalism, this profit is not
normal. It is accumulated by politics. This historical process
originated from Roman, Greek and Viking plunder and slavery. It
(accumulation) then, as a historical process, passed through
enclosures and associated massacres, through savage colonialism to the
industrial age where the profit motive was handed the enormous
productive capacity of coke and coal, and then, more ominously, crude
oil and natural gas.

Due to fossil fuels, any one today can hold and control four
horse-power in the palm of their hand and carry around 100 in a hefty
suitcase. Fossil fuel capitalists started and won wars, captured
governments, dominated markets and destroyed alternatives, all for the
sake of their own short-term interests – “returns on capital”,
“growth” and associated “productivity”. Clive Hamilton is right – we
need New Politics, but not as he knows it.

A Green economics needs a Green mode of production. But modern
financial institutions demand rates of profit that are underpinned
only by the enormous competitive advantage of fossil fuels. Competive
plastics and metals manufacturing, airline and shipping fuels, energy
supplying, most modern construction and transport all demand fossil

Fossil fuels represent an old story in new circumstances. Once an
amount of Capital exists outside the normal transactions of society
and in private competition with other amounts of Capital, then this
private interest, now in combination with anti-social Capital and
multiplied a thousand-fold, demands what it always has – more plunder
from the rest of humanity. This leads directly to fossil fuels. Any
other interests, such as of future generations, gets the same
consideration the Vikings showed to early Britons, Amherst to American
Indians, and British and Tsarist rulers to their own poor. Our
present mode of production will sacrifice humanity for the sake of
Capital using fossil fuels because it represents a history of
sacrificing humanity for the sake of Capital using swords, gunpowder,
microbes and the hangman's noose.

You only deal with fossil fuels by recognising and confronting the
same political forces as in their antecedent non-fossil guises – the
politics of private accumulation struggling against the politics of
social production.   

(nb: this text had been edited slightly at the author's request;  17/6/2013)

Sunday, June 2, 2013

Social Justice for the Aged, the vulnerable and Low Income Australians

above: Federal Minister for Ageing, Mark Butler has had some victories for Aged Australians - But there's a lot that's left to be done!!!
In the following article ALP Socialist Left Activist Tristan Ewins argues in favour of reform in the interests of vulnerable and Aged Australians - including tax breaks and national aged care insurance. We need ALP activists to take up these causes and make them a reality before the September election! Mark Butler seems to be interested - But are others in the Cabinet and Caucus listening?

Firstly: Tax Breaks for Vulnerable Australians wanting to ‘shift down’ to a cheaper home

In the Herald-Sun today (June 2nd 2013) Federal Minister for Ageing Mark Butler was on record coming out in support of removing Stamp Duty tax from the sale of the estates of pensioners. The tax is seen as a disincentive to ‘shift down’ to smaller and more manageable properties –and the suggestion of an initiative in this direction is similar to what we have argued for at ‘Left Focus’ and ‘ALP Socialist Left Forum’. This makes good sense for pensioners who can no longer manage a (relatively) large property, including properties with large gardens.

In response the Victorian Conservative government is claiming that this kind of program already exists in the form of a Stamp Duty waiver when shifting to properties up to $330,000 value, and with concessions for properties up to $750,000 value. This may be true, but the Federal Labor government would be right to see these measures as insufficient for pensioners: with Stamp Duty still comprising a major disincentive to “shift down” to a more manageable property. Quite simply there are few decent properties – even small properties – under $330,000 market value these days. And pensioners may not want to move out to the outer urban fringe in order to benefit from such programs.

Also importantly: such schemes could be of interest to low income families as well, and also low income divorced singles who would benefit from ‘shifting downwards’. For those and others of limited wealth and on low incomes for whom a property may be all they have, the option to ‘shift downwards’ to a smaller property could make a great difference in accessing funds from the sale of their residences. It could also potentially make a great difference to disabled Australians for whom the only source of income is the disability pension. Though to avoid the dual outcome of gentrification of some suburbs, and infrastructure and service poverty in ‘low income ghettos’ - such a policy needs to be combined with active intervention to overcome infrastructure and service deficits in affected suburbs.

So at ‘Left Focus’ and ‘ALP Socialist Left Forum’ we are saying ‘Yes’ to the removal of Stamp Duty Tax for aged and disability pensioners, as well as low income Australians and lower income divorcees for whom relocation could make a great deal of difference for their quality of life. Though so the policy cannot be abused we are suggesting it can only apply to specific individuals once in every ten years – with the exception of house sales upon entering care. We are saying ‘Yes’ to Federal compensation of State governments so such a policy can be implemented nation-wide – and for Labor to adopt this as an innovative and equitable policy with the election drawing nearer. Further, we are arguing that this be paid for by restructuring the tax mix rather than through austerity. And we are hoping some people in the Federal and State governments are listening!
Again: Aged Care Insurance
A brief postscript, though!

We are also saying ‘Yes’ to National Aged Care Insurance as a priority comparable to the National Disability Insurance Scheme. But we are opposing regressive user pays charges for aged care services and accommodation.

We are saying ‘Yes’ to further improvements for the pay, conditions and career paths of Aged Care workers – As well as improvements to the quality of service enjoyed by all aged residents in care – whether high or low intensity care. This means good quality food; privacy with personal rooms if so desired; better carer and nurse to patient ratios; facilitated social interaction and intellectual stimulation; and access to IT for those so interested; as well as access to change of scenery including gardens. It means gentle exercise for those capable; and prompt access to dental care if necessary. It also means compassionate care for dementia sufferers, and a big public investment for dementia and Alzheimers’ research. Finally it means support for Carers’ whose intervention could make the difference in preventing premature resort to high intensity care.

Not that long ago Labor figures were speaking of approaching the coming election on the theme of ‘Social Insurance’. This still makes sense! But since Abbott has attempted to neutralise the issue with bipartisan support for disability insurance, Aged Care Insurance as outlined here could reignite that debate. And if Abbott attempts to neutralise this issue by adopting a similar policy – then that is a progressive victory as well!

At ‘Left Focus’ and “ALP Socialist Left Forum’ we have argued that Tony Abbott is betraying his Democratic Labor Party heritage by taking a hard line against social welfare, and policies which punish the poor and vulnerable. ‘Compassionate conservatism’ which has a heart for social welfare may not be our ideal – but it is better than contemporary neo-liberal Neo-Conservatism – which ‘has no heart’. If by some quirk of fate there are Conservatives reading this post, we urge them to consider the positions of the post-war German Christian Democrats and their support for social welfare and a ‘social market’. We are saying this well aware that the other aspect of the DLP was its regrettable role in a split which kept the ALP out of power for decades; and which took an anti-liberal authoritarian line in favour of literally banning the Communist Party of Australia; and opposing militant unionism. But perhaps were Labor to adopt Aged Care Insurance– Abbott might also rediscover his conscience and assert himself publicly and in the Liberal Party Room ahead of the election – in favour of the policy.

And again: win or lose the election – by initiating the policy and potentially securing bipartisan support Labor would have achieved a vital progressive victory.

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