Sunday, August 8, 2010

Abbott a threat both to fairness and prosperity

above: Australia's Federal Parliament House

In this article Tristan Ewins considers the coming Australian Federal election, incuding what the consequences of an Abbott conservative government would be in terms of social justice and economic prosperity.

As the 2010 Australian Federal election nears the future of our nation hangs in the balance. A few months back many would have thought the prospect of an Abbott Coalition government unlikely at best. Labor was riding high in the polls: credited with navigating our way from the dangerous shoals of recession. And the government had done this with an eye to social justice, not only reforming pensions, but also buoying consumer confidence with direct payments to those on welfare and low incomes.

As opposed to the conservatives, Labor looked to the future; with a promise to build the National Broadband Network, laying the foundations for the future knowledge economy. By comparison, in this regard the conservatives have been short-sighted and opportunistic.

Further: the Abbott ascension to Opposition leadership initially underscored divisions amongst the conservative parties, and their lack of substance and credibility on climate change.

But since then – and for some months – it has been mainly downhill for Labor.

There were issues that had weakened the government for some time, but Labor's re-election chances remained strong.

The home insulation and school infrastructure programs are now widely believed to have been poorly managed. In reality, though, the school infrastructure program added to the stimulus when it was needed most; and for many schools the product of the expenditure has been of real value: its benefit long-lasting. Genuine shortcomings in regulatory oversight were partly the fault of public servants who should have advised the government, but the government could not avoid responsibility for flaws in policy implementation.

As a consequence, the conservatives have been able to make up ground on the theme of “competency” outside any values context.

More recent developments, however, have threatened the survival of the Federal Labor government.

The mining industry fear campaign over resource rent taxation had saturated the media, marking a turning point with Labor put decisively onto the defensive. Suddenly Rudd’s leadership was seen as a liability, with a ‘fresh start’ perceived as the only way to stem the haemorrhaging of the government’s support.

With Julia Gillard now catapulted into the office of Prime Minister, Federal Labor’s support in the polls appeared to firm. Gillard thus resolved to take advantage, and seek for herself a mandate, calling an election for August 21.

But since then Gillard’s proposal for a ‘Citizens Assembly’ to work for consensus on climate change has been interpreted as indecision. Further, Abbott has whipped up groundless fear over debt (Australia’s government debt is amongst the lowest in the world), and has outflanked Labor in trumping the government with commitments to aged care and mental health funding.

Finally: Sensational leaks from within the government have overshadowed policy debate, and for many the removal of Rudd has left a bitter aftertaste.

Importantly, here, areas of the media are to blame for focusing on this drama of leaks from within the government, and even an intervention from Mark Latham: when in the public interest they should have been focusing on substantial policy debate. (across the spectrum, and including the Greens)

The ‘bigger picture’ – what’s really at stake

But there are broader concerns at stake in this election: and neither the government nor the Opposition seem to be planning ahead more than maybe a term or two. Labor’s commitment to the National Broadband Network, school infrastructure and increased employer superannuation contributions are very notable exceptions. (although the problem of a two-tiered Aged Pension remains with regard to superannuation – as always) And as we will see, Labor’s policies are more sustainable in a social sense over the long term.

To begin, there are structural fiscal challenges associated with the ageing of Australia’s population, and what this means for health, aged care and welfare: with flow-on effects elsewhere, including transport infrastructure and education.

At the outset, therefore, it is important to note Abbott’s commitment to cutting the tax base beyond what is sustainable, including effective cuts in overall Company Tax beyond what has been promised by Labor, and the scrapping of the Resource-Rent (ie: mining) tax that rightly gives taxpayers a share of the benefit from exploitation of minerals and other resources that belong to all of us. As a consequence, increases in employer superannuation contributions would also be dropped under an Abbott government.

Further, Abbott’s parental leave plan promises to direct what sparse budget funds remain away from where they are needed most: welfare, health, education; in a move that will effectively see those on lower incomes subsidising those on higher incomes. Specifically, the program would “cost more than $8 billion during its first two years”, and a mother on an income as high as $75,000 would receive six months leave at full pay.

Australia needs progressive tax reform, with the aim being to support an expanded social wage to ensure certain ‘baseline’ needs are met for all of us. This must encompass health (including aged care), welfare, education and other areas such as communications and information, social housing, social recreation facilities and transport.

Without reform, as the proportion of our population outside the taxable labour market increases, shortfalls in social services will become increasingly critical. Here also a ‘two-tiered’ and polarised system comprising the market and a residual public social wage will deepen: what John Kenneth Galbraith encapsulated with the term “private affluence, public squalor’.

The crisis is further compounded by a rising cost of living: especially in areas such as water and energy – where the public are now paying the price for privatisation. And with high property prices the impact of interest rates when they rise is magnified as a legacy of the Howard-era housing bubble, with home ownership now out of reach for many.

To put none too fine a point on it, without progressive tax reform there just won’t be enough public money.

So public hospital waiting lists will worsen; dental care will remain inaccessible for many, and there won’t be enough money to include crucial medicines on the Pharmaceutical Benefits Scheme. Public education will continue to be chronically under-resourced as compared to privileged private establishments.

Insufficient public funds, here, will undermine even the meagre liberal principle of ‘equal opportunity’; disadvantaging less-privileged citizens, and failing to provide for the demands of an ever-evolving economy.

And again: whatever short-term commitments Abbott makes on mental health; a dwindling pool of public funds under the Liberals will translate into savage austerity elsewhere. An example of this is Abbott’s dumping of plans for ‘Super Clinics’ which would take pressure from desperately over-stretched public hospitals. Or else mental health commitments will themselves be fudged on over the longer term.

Other consequences could include insufficient public funds for infrastructure such as roads and public transport.

In keeping with this logic, we may see a further deepening of the ‘user pays’ principle. Where access to such infrastructure and services takes this form, and is levied at a flat rate, those on lower incomes are again disadvantaged or even excluded entirely.

Tendencies towards labour market polarisation also mean that there are many who are adversely affected by this deepening of ‘user pays’, especially in the absence of a sufficient social wage.

What we certainly don’t want in this country is a slippery slide towards an American-style polarised labour market, with the material needs and rights of citizens undercut further as a consequence of only-threadbare social services and protections.

And again: a strong social wage is necessary to provide a fair baseline with regards access to services and amenities; and to make up for distributive injustices that arise as a consequence of unequal bargaining power amongst workers in the labour market.

Abbott in strategic play regarding some of our most vulnerable

Abbott has provided strategic policy announcements in areas of special concern to the public. Although the overall picture under Abbott would be one of savage austerity, the would-be Prime Minister has attempted to trump Labor with announcements of funding for mental health and aged care.

In aged care the Opposition has pledged a “$935 million package” including “21 days of convalescence care for around 20,000 eligible patients at a cost of $300 million”, “$14 million for pet therapy programs”, and “$12 million to promote wellbeing and funding for companionship programs.”

And in mental health Abbott has promised a $1.5 billion package including “800 new hospital beds”, “$440 million for the creation of 20 Early Psychosis Prevention and Intervention Centres” and “$225m would be allocated to build 60 Headspace services - treatment centres for young people.”

Importantly, though, experts remain critical. Australian Nursing Federation (ANF) spokesperson Yvonne Chaperon has highlighted insufficient wages for qualified aged care nurses, with the consequence of many skilled professionals leaving the system. In turn, this leaves aged care facilities with an insufficient skills mix.

And Australian Medical Association (AMA) president Dr Andrew Pesce has slammed Abbott’s proposal to cut Labor’s $98.4 million in incentive payments for GPs to provide services in aged care homes.

This is an area of desperate need for those in aged care.

In the bigger picture it is well worth noting that the Australian economy is valued well over AUS $1 Trillion.

The commitments of the major parties seem paltry in this context. Quality of services in aged care and mental health fall way short of the real human need, and that needed to uphold human dignity for our most vulnerable. Across the political spectrum parties are ‘scraping the bottom of the barrel’ for desperately needed funds in these and other critical areas: but few confront the need for progressive tax reform to turn the situation around.

Nevertheless and again:, despite shortcomings Abbott appears so far to have ‘trumped’ Labor in these sensitive areas. In effect he is challenging Labor on its own traditional terrain of Health services. Labor cannot afford to cede this terrain: the consequence of doing so would be to lose crucial credibility and support.

Perhaps the best response would be for Labor to announce a National Disability Insurance Scheme (NDIS). Such a scheme would need to be implemented in a fashion which valued and promoted the human worth and social participation of recipients. And in freeing up crucial additional funds, further action would become possible: reform of pensions and disability services: as well as commitments to mental health and aged care.


There are many reasons to vote against Abbott in the coming election: and not only those already alluded to in this essay.

Abbott has no credibility on the environment, having famously proclaimed that “climate change is crap.” And despite the conservatives’ emphasis on internal ALP division, the Liberal Party itself remains divided – as Malcolm Turnbull and others remain philosophically committed to a price on carbon.

Further, Abbott remains committed to the spirit of WorkChoices, despite proclaiming the policy “dead”.

As Abbott himself stated “the word WorkChoices is dead”. But even if a Liberal government did not change the existing legislation, it could legislate outside that framework, effectively circumventing it regardless.

Crucially, Abbott is ‘running scared’ from a debate with Julia Gillard on the economy. Wanting to rely on pre-existing prejudices in the electorate, the last thing he wants is to provide Labor a platform from whch to spruik the ‘good news’: recession avoided as a consequence of Labor stimulus, interest rates low, and investment in education in infrastructure essential to the future of our economy. And then there’s Labor’s National Broadband Network (NBN), and its crucial role in paving the way for the future knowledge economy.

Abbott’s claim to greater ‘competency’ in managing the economy doesn’t stand up to scrutiny. And anyway: politics concerns values: matters such as distributive justice and compassion for the poor and oppressed that run deeper than “technocratic management.”

Finally: as we have considered in depth here already, Abbott is attempting to deceive us with a “sleight of hand” on austerity. He wants us to focus on conservative initiatives on mental health and aged care: but in doing so he wants to distract us from savage austerity elsewhere – health, education, infrastructure, welfare – cuts that could spiral into the tens of billions.

Labor is not yet committed to tax and social wage reform of the scale that this author is fighting for. But the difference between Labor and the Conservatives is tens of billions in austerity, the abandonment of crucial infrastructure such as the NBN, an uncertain future on industrial relations, and an outdated neo-liberal economic outlook that would have seen Australia into recession if Abbott had had his way.

Vote 1 for Labor; or for the Greens: but for Australia’s sake put the Liberals and Nationals last.

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