Sunday, May 30, 2010

The Robin Hood Tax - What's not to like?

above: the author John Langmore

By John Langmore

John Langmore outlines the background to the proposal for a financial transactions tax.  Support for such progressive tax reform is swiftly building to comprise an international movement.   This article is reproduced with the author's permission.

Nearly forty years ago the eminent macroeconomist James Tobin proposed a tax on foreign exchange transactions as a means of "throwing some sand in the well-greased wheels" of financial speculation. The idea attracted little attention at the time, and it wasn't until twenty years later that I first learnt the detail of Tobin's proposal. In the meantime he had been awarded the 1981 Nobel Prize for economics.

By the early 1990s I was deeply concerned by the power of international financial markets to dominate national economic policy. When the Parliamentary Research Service listed an article Tobin had published in the Financial Times in December 1992, I wrote to him and he sent me his original proposal. I was persuaded by his argument and started advocating that the idea be studied more closely.

At the next Labor Party national conference the party platform was amended to include support for a study of the Tobin proposal, and with ministerial support I was able to speak about the idea at preparatory meetings for the United Nations Social Summit in New York in 1993 and 1994.

The concept was generating great interest at the United Nations. Tobin had suggested that the revenue could be used to finance development, and the UN Development Program's Human Development Report for 1994, edited by Inge Kaul, included a short contribution from Tobin explaining his idea and proposing a tax of 0.5 per cent. Dr Kaul organised a conference of leading economists in 1995, where I met Tobin, and the papers were published as The Tobin Tax: Coping with Financial Volatility. The UN secretary-general, Boutros Boutros Ghali, publicly supported the idea.

By then, however, Republican senators in the United States had started misrepresenting Tobin's proposal as a "UN tax." This was nonsense, of course: taxes can only be collected by governments. Yet that fact didn't prevent the Republican-controlled Senate from including in the bill authorising payment of US dues to the United Nations a clause prohibiting payment if Tobin's idea was even discussed in the UN.

So when the book on the Tobin tax was launched the UN editors couldn't speak. As one of the contributors I appeared in their place at conferences on the proposal at Yale and in London. In Washington I discussed the tax with Lawrence Summers, who is now Barack Obama's economic advisor. At the beginning of the nineties Summers and his wife had published an article showing that financial markets are not fully efficient because they overshoot; by the end of the decade, about to become Secretary of the Treasury, he did not feel able to restate that opinion in public.

Since then Tobin's idea has gained widespread support among non-government development agencies and a strong network of advocates - including the France-based Association for the Taxation of Financial Transactions for the Aid of Citizens, and Britain's Stamp out Poverty campaign - have used imaginative campaigns to keep it alive. Political support for the idea endured in a number of countries and reached the United Nations again during the Special Session of the UN General Assembly on Social Development in Geneva in June 2000 (for which the division of which I was by then director had responsibility) when Canada officially proposed a study of the plan and its implications. Following opposition from the United States and some other countries a compromise proposal - for a study of "innovative sources of funding for development" - was agreed on, and the UN University's World Institute for Development Studies was commissioned to do the work. Professor Sir Anthony Atkinson agreed to lead the project and the papers were published as New Sources of Development Finance by Oxford University Press in 2005.

Political momentum was nurtured through the formation in 2006 of the Leading Group on Innovative Finance for Development, of which about fifty-five countries - including Belgium, Chile, South Korea, Finland, France, Germany, India, Italy, Japan, Mexico, Norway, United Kingdom, South Africa and Spain - are now members. In mid 2009 the group appointed an expert group to report on a financial transaction tax.

Meanwhile, quiet work was continuing among scholars. Professor Anthony Clunies-Ross succeeded in raising £60,000 from an anonymous British donor for a study of whether a tax on currency transactions would cause increased exchange rate volatility as a result of the expected fall in volume. The modelling was undertaken by Dr Rodney Schmidt of the Canadian North-South Institute, and the result was encouraging. He found that "a currency transaction tax [CTT] of 0.5 basis points [0.005%] in the major currency markets would reduce transaction volume by 14 per cent. Post-CTT spreads and transaction volumes would be well within the range of recent observations and would not be disruptive. A 0.5-basis-point CTT would raise at least $US33 billion every year, probably more."

Which brings us to the aftermath of the global financial crisis and growing support for a financial transaction tax - an extended version of Tobin's idea - among European governments and public policy economists in the United States. Before Christmas the European Council joined Gordon Brown in encouraging the International Monetary Fund to include a "global financial transaction levy" among the options it is examining to raise revenue from banks and the rest of the finance industry. This followed the request from the G20 meeting in September that the IMF evaluate "how the financial sector could make a fair and substantial contribution toward paying for any burdens associated with government interventions to repair the banking system."

To be imposed almost universally, a currency transaction tax would need only the active cooperation of the authorities that oversee the principal reserve currencies, the US dollar, the euro, the pound and the yen. Because the tax's small direct costs would be concentrated in financial sectors, its impact would be redistributive in a progressive way across nations. It would also be a source of funds for "global provenance," which means that all or a substantial proportion of the revenue should be allocated under global authority. The national authorities collecting the tax would keep a share, but the revenue would have to be distributed globally in proportion to each country's financial transactions.

The global financial crisis has transformed this debate. The Bush and Obama administrations and many European governments were compelled to launch massive rescue strategies for financial institutions, so electorates are demanding ways of making financial institutions pay the cost. Chancellor Merkel, President Sarkozy and Prime Minister Brown have all spoken in favour of looking seriously at a financial transaction tax. On its own, a tax of this type would not resolve the crisis, of course. But it could play an important role in raising funds to pay for the bail-outs. Unlike a currency transaction tax or a Tobin tax, which just covers currency transactions, a financial transaction tax would cover all kinds of financial assets such as shares, bonds, securities and derivatives, both domestically and for cross-border transactions. Technically a financial transaction tax could be levied easily and at very low cost since all such transactions occur through electronic platforms. A simple electronic tag would automatically collect the tax, and such taxes already exist in a number of countries.

In the mid-nineties the Labor government in Australia supported a study of the Tobin tax, but the Rudd government does not seem to have taken the issue up yet - despite the fact that the prime minister attending the G20 meeting in Pittsburgh that agreed to refer the need to raise funds to pay for the bank rescue packages to the IMF. It would be timely for the government to take a serious look at the proposal and participate in international discussions. It would be entirely appropriate for Australia to apply to join the Leading Group on Innovative Finance for Development and to attend its next meeting, in Santiago, at the end of January at least as an observer (four other countries are already observers). Ministers and public servants need to become familiar with the issues and to prepare a position.

The proposal does generate opposition from many bankers, though not all. When I asked Marshall Carter, CEO of Boston's enormous State Street Bank, in 1995 what he thought of the idea he was unfazed, saying "Oh, we would just pass it on to our customers'. But there is strong support and it is growing. Adair Turner, Britain's top financial regulator, called last August for a tax on financial transactions as a way to discourage 'socially useless activities'.

American Nobel economics laureate Paul Krugman argues that a financial transaction tax "would be a trivial expense for people engaged in foreign trade or long term investment; but it would be a major disincentive for people trying to make a fast buck (or euro, or yen) by outguessing the markets over the course of a few days or weeks." "What's not to like?" he asks. Critics claim that it would be avoided, but the centralisation of such transactions makes them relatively easy to monitor - if there is a will to do so. The tax is one way of shrinking bloated financial sectors and of raising revenue from those who have benefited most from the explosive growth in the volume of international financial transactions.

John Langmore is a Professorial Fellow at the University of Melbourne. He is a former federal member for Fraser and was a divisional director at the United Nations. This article was originally published by 'The Evatt Foundation': which  is a member of the alliance supporting the Australian Robin Hood Tax campaign as part of the growing international movement.

Visit the Robin Hood Tax website and join us in the campaign today.

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Sunday, May 23, 2010

Project for a 21st Century Democratic Ecological Socialism

What follows is an essay developed collaboratively by SEARCH foundation members.  SEARCH stands for 'Social Education and Research Concerning Humanity'.  SEARCH is a the successor organisation to the Communist Party of Australia.   The essay below is an attempt to sketch out a future for ecological socialism, addressing issues of global importance - but also some issues specifically critical from the Australian perspective.  This essay is reproduced here with permission. See near the end of this post for further details re: permissions for reproduction.

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Australians together with the whole global community are faced with very big challenges. We need a new approach that looks for the common good rather than narrow interests, considers the long-term rather than the “quick fix”, and draws on all the capacities of humanity and nature. To do this we must enfranchise all kinds of people in a deeper form of democracy in Australia and in all societies. This essay aims to explore this approach, by looking at the challenges facing us and at appropriate responses to those challenges, taking into account the history of previous efforts, and the values which should sustain and inform our decisions.

Social and environmental challenges

Our beautiful blue planet looks more and more like a world in deep trouble, and Australia is as much involved as any nation in contributing to economic and environmental problems and wars. We live in a western culture of affluence, constant innovation and promise of unlimited choice and self-fulfillment, yet at the same time are cynical about powerful corporate interests. Many Australians cannot meet the ideals they set for themselves. And for others, particularly Indigenous Australians, life is a real struggle.

In 2006, carbon dioxide equivalent emissions per person in Australia were 28.1 tonnes per year, nearly twice the average for rich countries and more than four times the world average, according to the Garnaut Report. Today over 580,000 Australians are unemployed, private schools are privileged over public schools, tertiary students have to ‘invest’ in their studies, people have to pay to see a doctor and obtain medicine, and welfare payments, though widely available, are below the poverty line and severely policed.

Less than twenty years ago we witnessed the end of the Cold War, eagerly anticipated a ‘peace dividend’ and were promised real global co-operation on global warming and on global poverty.

These hopes for a better world have been set back by the continuing wars and threats of wars allegedly in reaction to the September 2001 terrorist attacks in the USA, by the blockage of the Kyoto Protocol process, and in the massive global debt binge and ensuing Great Recession, as the International Monetary Fund named it, of 2008-09. This global capitalist crisis is not yet over and the Millennium Development Goals will not be achieved by 2015.

The euphoria of capitalists at the collapse of the Soviet Union in 1991 led to unbridled capitalism which clearly threatens the global environment and cannot deliver decent work and a good life for all, either nationally or globally.

The Cold War from 1946 to 1991 was bloody, hugely dangerous and expensive. But having the US as the sole economic, political and military superpower since 1991 has also turned out to be a scourge, with truly devastating impact in former Yugoslavia, Iraq, Afghanistan, and other vulnerable poor countries.

Struggling with Capitalism - the rise of neo-liberalism

In the late 1960s almost full employment had given workers in the west more confidence in their struggles, the state was taking a larger share of income to support welfare programs, competition between capitalist countries had driven down profits, and spending on the US military-industrial complex during the Cold War, and particularly for the Vietnam War, became unsustainable.

In the mid-1970s, these dynamics sparked a major global capitalist crisis, greatly increasing financial uncertainty and instability. The profits of major corporations fell; unemployment and inflation both surged. Australian workers and their families were hit hard.

The dominant economic and political elites in the USA, Europe and Japan responded to these democratic challenges and the ensuing economic crisis by organising an assault on the welfare state, and the democratic rights and living standards of working people. Led by Anglo capitalism-the UK under Thatcher, the US under Reagan, and later Australia under Hawke and Keating and New Zealand under Lange and Douglas-a new global economic framework known as neo-liberalism or the “Washington Consensus” emerged.

The essence of neo-liberalism is to promote the expansion of capital, regardless of the consequences for employment, social well-being and the global environment. The main driver and beneficiary has been big US capital. The neo-liberal project destroyed the consensus approach of the post-World War II social democratic state. Social democracy had supported full employment, health, education and social safety nets, while affirming a central role for private corporate capital.

Neo-liberalism places economic motives and not compassion at the centre of all human relationships. Individuals are ‘on their own’ and must look after themselves. The neo-liberal view is that markets work best with little or no regulation and that government intervention, workers organised in trade unions, and community and environmental organisations actually cause economic crises.

So neo-liberalism advocates the selling of government assets, which belong to all citizens, and reduction of the government’s role in economic management.

Neo-liberal policies had their first trial run in Chile in late 1973, when the fascist Pinochet dictatorship, with neo-liberal advisers led by Milton Friedman from Chicago, destroyed democracy and workers’ organisations, and privatised key national assets to the benefit of large US corporations.

These neo-liberal policies of deregulation, privatisation and trade liberalisation were then imposed on poor countries by the World Bank, the International Monetary Fund and later the World Trade Organisation. Poor countries trying to borrow funds or repay international loans were required to privatise public assets, reduce social spending and open up their markets for foreign investment. Education, health and jobs were cut; societies were devastated.

Labour shortages in the rich countries were met with an explosion of temporary migrant workers from poor countries, with fewer rights than local workers. Temporary migrant workers were eagerly exploited by employers, and were often the victims of racism, promoted by white supremacist and fascist movements.
Neo-liberalism succeeded as a political project, becoming the ‘conventional wisdom’ of almost all governments and political parties world-wide. Corporations, parts of the middle class and the better-off working class were given a stake in the ‘home-owning and shareholder democracy’, with the promise of ever-rising asset prices, and boosted by conservative and fundamentalist religious groups who linked it all to ‘family values’.

The failure of neo-liberalism

But as an economic and social project, neo-liberalism has ultimately failed.

Firstly, it increased inequality. Most wage earners and those dependent on social security became more insecure, but those living off dividends, rents and bonuses were greatly enriched, especially during hyped-up stock market and housing booms.

Secondly, ‘the state’ got bigger, not smaller.  regulation of capital itself was minimised, but other regulation was made tougher so as to support capital, including the punitive laws for trade unions and for people on social security, weaker environmental laws, and subsidies and tax breaks for large corporations. Corporate political donations virtually bought governments.

Thirdly, the driving force for capitalist expansion became profits from finance itself. Deregulated private banks, hedge funds and exotic finance products came to dominate major economies. Corporations boosted short term profits by selling assets and sacking workers, rather than seeking long term growth through investment in skills and sustainable technologies.

Fourthly, this powerful finance class, mainly in New York and London, supported the extremism of the Bush presidency, whose policies after September 11, 2001, became solely focused on unilateral preemptive wars to assert US corporate interests world-wide. Energy security for US interests and opposition to any global measures against climate change were core components of this aspect of neo-liberal politics.

Finally, neo-liberalism involved intense competition for global markets between the US, European and Japanese corporations, and between them as a whole and the poor countries.

Overall, neo-liberalism led to greater economic and social instability and resulted in the isolation of the Bush presidency. Bush’s legacy became triple disasters: the Iraq War, the drowning of New Orleans by Hurricane Katrina, and then the Global Financial Crisis, which now threatens the entire neo-liberal project under US capitalist leadership.

However this massive economic and social failure has not broken the political power of the neo-liberal corporate establishment. The response of the Obama administration has been ineffectual so far, and the prospect is for severe economic difficulties in the immediate future.

The Great Depression of the 1930s was associated with the rise of fascism and led to the huge devastation of World War II. Today’s global crises certainly contain these dangers.

Australia’s challenges

Many families suffered ever growing insecurity and inequality after the 1970s recession, with the worst experience being in the 1990-91 recession. Some workers defected to Howard in response, but were then hit by his WorkChoices. The Your Rights At Work campaign against WorkChoices was an historic grassroots movement for basic rights, but the workers’ hopes have not been fulfilled by the Rudd government’s new Fair Work Act.

Australian society remains deeply divided by inequality of power and wealth: between the majority of Australians and the small minority of Indigenous Australians, between those who own and control private corporations, often based overseas, and those who work in them, and between men and women.
Industrial laws remain profoundly unfair with hundreds of legal penalties applied to workers and their unions, including imprisonment, particularly for those in the building industry. Most democratic rights and freedoms have been made unenforceable through a wave of anti-terrorism laws and two decades of ‘law-and-order’ auctions at state elections.

Despite great people’s movements for change over the last 50 years in Australia, the stark injustice to Aboriginal and Torres Strait Islander peoples persists. There have been good government initiatives to address some of these problems over recent decades, but the overall outcome remains dismal. Racist policies were imposed by the Howard government and those which underpinned the NT Intervention of 2007 have continued under the Rudd government.

Despite great progress since the 1960s by migrant workers and popular movements, as well as governments, to create an inclusive multicultural identity for Australia, racial prejudice still persists. This is particularly evident in the appalling acceptance by many people of the Howard government’s detention for years of ‘boat people’ in isolated concentration camps.

Women have made great strides in asserting their rights in almost all parts of society since the 1960s. It was a great breakthrough when the Whitlam government created the single parent’s benefit, freeing mothers from abusive relationships and enabling unmarried mothers to keep their children. Yet governments continue with a punitive attitude to single parents, use industrial laws that allow women’s wages and superannuation to continue to clearly lag behind those of men. In most Australian states women do not have full rights to choose when and whether to have children.

Lesbians, gay men, transsexuals and bisexuals have won a degree of equality, freedom and social space also in this period, but continue to be denigrated in official policy measures, at this time through definitions of marriage.

Australia needs structural change to entrench these gains through democratic and equitable processes within the economy as well as the political process at federal, state and local levels. This is the path to a democratic, ecologically sustainable Australia within a new set of global relations.

Ecological sustainability

The complex and delicate network of interlinked ecological units that makes up our planet is resilient, but not infinitely so.

All life forms require biodiversity to survive. As other species and populations are diminished, so too are the ecological foundations for survival of human life on Earth. The United Nation’s Millennium Ecosystem Assessment 2005 showed that approximately 60 percent of the ecosystem services that support life on Earth, such as fresh water and fisheries, are being degraded or used unsustainably. As biodiversity shrinks, the balance of nature is disrupted and the physical, psychological and social basis for the health of humans and other species is threatened.

The potential of life for billions of humans, and millions of other species, is in jeopardy as people living in the world’s wealthiest societies that have historically used a disproportionate share of the world’s resources continue to expand their consumption way beyond Earth’s carrying capacity.

These wealthy societies are driven by a socio-economic system, capitalism, that is addicted to growth in order to survive. Indeed, the Living Planet Report 2008, produced by the World Wide Fund for Nature, indicates that humanity is now consuming resources at a rate that by 2030 will require two planet Earths and that on a per person basis people in the USA, the United Arab Emirates and Australia are consuming about four planet Earths to sustain their lifestyles.

The public debate about ‘sustainability’, as an integrative organising principle for human societies, emerged in the 1980s and refers to the capacity of ecosystems and human societies to persist and to provide the goods and services needed for life into the foreseeable future. Achieving sustainability is an ethical and social justice issue, as well as an environmental issue.

The most obvious way in which human activity is destroying the ecology of the planet today is by the emission of gases which are contributing to global warming. Currently in Australia there is no serious commitment on the part of either major political party to reduce these emissions-618 million tonnes in 2009-half of which are produced by the top 100 corporations, according to the recent VicSuper report.

Because climate change is also an emergent human rights issue, tackling it is integral to the broader goals of enhancing socio-economic development and fairness throughout the world. Linking climate change with broader sustainable consumption and production concerns, human rights and democratic values is crucial to shifting societies towards more sustainable development pathways.

Linked to global warming is the peaking in supply of oil, one of the main fossil fuels which has caused the human-enhanced greenhouse effect over the last 150 years. When new oil fields cannot replace the reserves being used from existing oil fields, and as consumption of oil and gas continues to grow, the price of oil will rise sharply. This will drive up all costs, but especially the cost of producing food and transporting it to markets. The food shortages and increased costs of food in early 2008 provoked riots, and indicate the economic and social difficulties faced by humanity as climate change, water shortages, and energy shortages have their combined impact.

Sustainability as a goal links ecology, justice and democracy. Justice to the environment is a pre-condition for ecologically and socially sustainable societies, and fundamental for human survival. Today, ecological sustainability is the focus of one of the greatest conflicts between corporate interests and peoples’ basic rights and needs.

Human and environmental values

In Australia and globally people have the values, the inspiration and the knowledge to achieve a fair and ecologically sustainable and peaceful world.

Equality of all people, commitment to participatory democracy and freedom, and respect for all cultures are deep values carried from the great democratic people’s struggles of the last three centuries into this 21st century, especially the English Revolution, the French Revolution, the 1848 revolutionary surge in Europe and the Russian Revolutions of 1905 and 1917.

Care for the environment is an underlying value of indigenous cultures, and has also been an underlying feature of social movements in recent centuries, from campaigns to stop the spreading of the Sahara desert, to opposition to the shocking pollution of the industrial revolution, to defence of whales and seals and other species faced with annihilation.

The amazing election campaign of Barack Obama in 2008 showed that the values inspiring the US civil rights, anti-Vietnam War and women’s movements of the 1950s, ’60s and ’70s, and the older labour movement, were alive and well, only waiting for the chance to focus on a credible leader and movement for change. Community organising values and practices contributed greatly to the Obama victory.

It is the same in Australia, where, despite the strength of conservatism, our history is imbued with grassroots democratic movements for freedom, equality, rights, decent lives, peace, and the environment.

The working class values of collective strength based on democratic unity have already made Australian society one of the best parts of the world for most of its peoples. We saw in the great Your Rights At Work campaign in 2005-07 that a broad-based, principled movement of working people can overwhelm the punitive, divisive politics of individual greed which the Howard government and the corporate world promoted.

The Soviet system of the 20th century was a human and environmental disaster because of the failure to respect people’s democratic rights. The neo-liberal capitalism of today is also a profound failure on this score, despite the role of periodic elections for parliaments.

Democracy is all about people with equal rights discussing their problems, getting all the relevant information, and making decisions that they can implement. It is about respect for the majority, and the majority bound by laws and a charter of rights which protect any minority or individual from tyranny. Democracy requires access to quality education and to an open media.

There are all kinds of “communities” which need to exercise democracy, especially workplaces, local communities, cultural communities, cities, regions, nations and also the United Nations. Australian society is yet to achieve genuine democracy and equality because of the dispossession of the Indigenous Peoples in the colonial period, and because of ongoing unfair structures of class, gender and sexuality, nationality and ability, and the gross distortion of the two-party system with single-member electorates.

Solidarity is a value of individual sacrifice for the collective cause, ‘paying the price’ to win an objective that has been widely agreed by a community, despite whatever harsh conditions are imposed by those opposed to change. The strike, the picket line, the fundraising, the election day mobilisation, the many meetings, the common social funds including progressive taxation, the principled compromises for the sake of uniting a coalition, the wonderful celebrations: all are part of solidarity.

Social justice is a value that focuses on fairness and respect, and opposes exploitation, oppression and bigotry. Social justice is indivisible; there is no justice if any group is discriminated against, whether because they are women, because they are children, because they are of a different nationality or religion, because they are employees, because they are poor, or because they are the indigenous people. In the Great Depression and the horror of fascism and World War II, many leaders recognised that social justice and peace were indivisible.

Environmental sustainability is a value with deep roots in humanity because human beings are part of nature and only survive and prosper in a richly diverse, clean and profuse natural environment. Despite the environmental brutalism of capitalism and the Soviet system, the value of caring for nature has driven many struggles in recent centuries, with Australia’s urban ‘green ban’ movement of the BLF and residents of the 1970s, the Franklin Dam campaign in the early 1980s, the Jabiluka anti-uranium campaign in the 1990s and many native forest campaigns being high points.

Intellectual integrity means that we have to seek the truth and be open to new information and new ways of seeing our world. Emotional integrity is all about staying connected with people, not closing out the images of poverty, war and misery which at bottom are what spurs us to band together to rebel against the present order of things.

A socialism which is democratic and sustainable

Based on these values we have to create our democratic ecological socialist 21st century. There is no grand plan or blueprint for this world that we simply ‘adopt’. We have to make this world by our collective actions, inspired by our values of democracy, social justice solidarity, environmental sustainability, and integrity. Particular strategies for immediate demands and for deeper change must be developed by negotiation between all the organisations, groups and movements involved.

We need to renew democratic left organising in Australia to assert people’s democratic control over our social resources, replacing private ownership and control with democratic public ownership and control in co-operatives, new kinds of corporations and a new kind of public ownership. Major planning through national decisions on development and spending priorities made through political processes must be balanced by local democratic processes to counteract the tendency for bureaucratic centralism and the concentration of power.

Corporate power must not be merely replaced with bureaucratic state power if socialism is to remain dynamic and accountable to the people and environment it serves. New measures of well-being and success are needed in place of the fetish of economic growth which underpins capitalism.

The tension between local democracy and public ownership can be managed by ensuring that broad social interests are represented on elected boards and management committees, along with direct employees and consumers, working with a corporate law that puts employment, safety, ecological objectives and social responsibility ahead of profits.

Dealing with the ecological and economic crises

The ecological and economic crises feed off each other. Both are closely related to the corporate capitalist drive for expanding private profit from social production. The solutions to these two crises are inseparably linked. Here are some immediate strategies.

Dealing with global warming, the end of cheap energy, and the environmental crisis

Australia is unique in being an entire continent under one political structure, and so Australia can provide an inspiration to the world by creating a just and ecologically sustainable model for an entire continent.

To respond to the immediate challenge of global warming, Australia could produce more energy than it needs from the sun and wind if enough resources were channeled into this area. A people’s movement has to create a majority in parliament which will confront the energy and finance corporations and demand that governments invest public funds in energy efficiency and in renewables: biomass, wind, solar and tidal.

The United Nations effort at Copenhagen in December 2009 to create a new binding treaty to cut carbon emissions was wrecked by the refusal of the US corporations to commit to any but the most token cuts, despite their historic role in creating the problem. Australia, as a key US ally, can make an important global contribution by confronting the energy corporations and promoting a genuine plan for cuts to carbon emissions based on social and scientific reality.

This plan must aim to contain atmospheric warming to an increase of 1.5 degrees centigrade during this century, by reducing the carbon dioxide equivalent in the atmosphere to 300 parts per million. This is what is necessary to stop vulnerable island, delta and coastal communities from being submerged, and severe drying and rainfall impacts in Australia.

Australia must have a target for 2020 of 25 per cent to 40 per cent cuts on 1990 levels of carbon emissions, rising to 80 per cent by 2050.

A carbon tax, tight regulation of carbon emissions by industry, compensation to consumers, and massive public investment will be effective, but the current emissions trading concept put forward by the Rudd government will have virtually no impact. Privatisation of the remaining electricity systems must be stopped immediately.

Public investment must shift from motorways for both freight and passengers, to building major rail projects and urban light rail and heavy rail networks, and reinvigorating coastal shipping.


The Murray-Darling crisis is only our largest river system problem, repeated on a smaller scale everywhere that water is taken for irrigation.

Governments must develop water policies that are based on an accurate assessment of what water is available, taking into account both ground and surface water, that allow for a projected general decrease in rainfall due to global climate change, and that are, above all, both equitable and sustainable.
Desalination plants are an expensive, polluting way to increase urban fresh water supplies, and place too much control in the hands of their transnational corporate owners.

Large dams, pipelines and associated infrastructure can create their own problems while not actually increasing the total amount of water in the water cycle. Conservation and recycling should be the priorities.
Water is a part of the ‘global commons’, access to drinkable water is a basic human right, and environmental flows are vital to eco-systems and all species. Recent neo-liberal policy to privatise both urban and agricultural water supplies must be reversed to provide a sustainable and fair water regime.


Globally, deforestation continues to be one of the most serious factors damaging the environment. Many species have already disappeared due to loss of habitat caused by indiscriminate logging, and many more are threatened.

Forestry practices in Australia, while not as destructive as those of some other countries, include clear-felling of native and old growth forests, use of aerial spraying of poisons and seasonal burn-offs. Wood-chipping of native and old growth forests has to stop.

Plantations are an alternative, but are a monoculture, requiring massive amounts of chemicals, using poisons against native fauna, and using large amounts of groundwater, often in competition with small farms and domestic supplies. Australia’s forest plantation sector has been caught up in the global financial crisis, and needs far more regulation and social ownership to make it sustainable.

Dry land salinity, caused by clearing native vegetation, is a serious problem affecting the rural economy, especially in Western Australia. The destruction of ecological systems such as those of the Coorong in South Australia goes far beyond economics.

Peak oil

Peak oil means that energy prices will rise sharply in coming years. There is no alternative to oil for its energy content and ease of transporting. Bio-fuels can substitute only to a small extent, because of their own costs of production and competition with food production.

Society is going to have to reorganise to use much less liquid fossil fuel, by shifting to more local production and consumption, less use of chemical fertiliser and pesticides in agriculture, and greater use of public transport systems using renewable energy. Once again, this shift can only be led by a democratically managed public sector.

Dealing with the Global Economic Crisis

The huge finance corporations which brought us the Great Recession have so far defeated any serious reform and are back to ‘business as usual’. Obama, Brown and Rudd are failing. The main countervailing power has to be organised workers and communities, as history shows.

Only strategic unionism and democratic workplace organisation can challenge corporate power and propose new forms of workplace participatory democracy, new forms of ownership and control of production. Reforms must be driven by organised workplaces and communities if they are to succeed.

The Rudd government has won community respect for the stimulus spending in 2008-09 which limited official unemployment to 5.8 per cent. Workers themselves absorbed a lot of the pain by working short-time weeks and taking unpaid and paid leave. The crisis is not over.

The Rudd Government must fund paid training days for all workers who have been put on short-time, and directly fund job creation programs for the unemployed, whose number has increased by 50 per cent since mid-2008.

Democratic re-regulation of the financial system to prevent a deeper global economic crisis in the future means much stronger transparency rules for all financial institutions, outlawing of all forms of predatory lending, strong regulation of lending to buy and trade shares, and regulation of ratings agencies.

Senior executive incomes must be cut from their present obscene levels, and bonuses that reward risk-taking behaviour for short term profit must be outlawed. This can be done using the corporations power in the Federal Constitution.

A uniform national tax on all properties over $2 million would discourage speculation and boom / bust in property prices, and help to lower the absurd prices for homes in Australia and all over the world.

The imposition of a tax of 0.1 per cent on all financial transactions-a modified ‘Tobin Tax’-would contain international financial speculation and help fund international aid to poor countries.

A publicly owned savings bank, with a board dominated by employee and community representatives, can provide low cost banking for consumers and small business as real competition with other banks.

Increased spending on public housing, including community housing associations, and incentives for private investment in affordable housing is at last being provided as part of the Rudd ’stimulus package’, but it is a vital part of a democratic future and should not be ‘wound back’.

The ’stimulus package’ spending on public transport, public education from child-care to TAFE and university, and in the public health system should also be maintained, to overcome decades of reduced public support to these vital sectors.

Public investment and incentives for private investment are urgently needed to create ‘green jobs‘ in energy efficiency, renewable energy, sustainable water systems, including industry and household water recycling, biomaterials, green buildings and waste recycling.

Public investment in partnership with Indigenous communities is vital to close the gap for Indigenous housing, health and education outcomes, and to encourage biodiversity conservation and environmental management on Indigenous lands.

All pensions and benefits must be increased to provide a living income, and the punitive policy of reduced payments to the unemployed and single parents must end.

Superannuation funds must be reformed to remove perks for the wealthy.

The Superannuation Guarantee Levy must be increased immediately. Super funds must be protected from stock market crashes by being diverted into government-guaranteed bonds which are used for ‘green jobs‘ initiatives to shift to an ecologically sustainable economy.

With so much pressure to wind back the emergency role of government in the economy, there has to be a vigorous democratic movement to make progress on these solutions which are all about democracy, equality and ecological sustainability.

Uncovering our socialist heritage

The ideas and values of equality, democracy and solidarity that come from the Australian socialist tradition have been submerged for the last 30 years, by the torrent of nonsense about ’self-regulating free markets’ and ‘let the managers manage’.

The best of these socialist ideas, values and ways of working need to be picked up and reinvented for these times of greater communication, travel, self-expression and aspiration.

After all, it was the rebels of Eureka who won the vote for all men in the 1850s and it was the new Australian trade unions of that era that won the first eight-hour day and minimum wage, and regulated workplaces for better safety and wages. The women’s suffrage movement won their right to vote in New Zealand and South Australia in 1894. Socialists opposed wars of aggression and conscription from 1914, and later opposed nuclear weapons and uranium mining. Socialists stood up with Aboriginal people for their rights from the 1920s. Communists, and socialists in the Labor Party, rebuilt the trade unions and the Labor Party itself, out of the disaster of the Great Depression. They rallied the democratic movement to oppose fascism and Nazism in the 1930s, when the conservative governments of the day were praising Mussolini and Hitler. The BLF Green Bans of the 1970s suddenly brought ‘people power’ to life in Australia.

Socialist women played a key role in the second wave women’s movement from the 1960s, campaigned for equal pay for women, and joined with other women to challenge the very idea of male superiority. Socialists worked with others to end the White Australia Policy and embraced multiculturalism. It was the broad Left and the progressive religious communities which doggedly worked to build solidarity with the South African people against Apartheid. They worked with Indigenous people for the decade to 1967 to overwhelmingly win the referendum to allow the federal parliament to make laws to benefit Aboriginal and Torres Strait Islander peoples. The Vietnam Moratorium Movement eventually transformed Australian society for the better in the 1960s and 70s. The Communist and Labor Left played a big and vital role in all this work. All along the way, writers and artists on the Left made a decisive contribution to Australian culture and fought the basic fight against censorship and for free speech.

These profound social achievements in Australia came through collective discussion and planning, and really determined organising around democratic and socialist principles. The people, by using their strength in numbers, can oppose the power of the big capitalists. It is mainly a patient, ongoing process to convince people that they can make a difference, and that whatever racist, sexist or class prejudices they have must be put aside for the goal of social justice and ecological sustainability.

Socialism’s legacy: heroic achievements and tragic failures

When Karl Marx and Friedrich Engels wrote in The Communist Manifesto in 1848: “Workers of all lands unite, you have nothing to lose but your chains”, they reflected the hopes of many millions of people as they confronted the harsh exploitation of the new capitalist system.

When in November 1917 the Russian revolution created a workers’ state to withdraw from World War I, to distribute land to the peasants and food to the people, it seemed that those hopes would be realised. A new global communist movement took shape.

The Russian revolutionaries of 1917 worked to improve the lot of the people while waiting for the overthrow of capitalism in the industrialised countries of western Europe, which did not happen. After little more than a decade, Stalin seized power and became the dictator of the Soviet Union, with appalling disregard for human rights, purges, oppression, secret police, and the ‘command economy’. The model which emerged in the Soviet Union was wrongly promoted as the only genuine form of socialism, and communist parties elsewhere were moulded to a large extent in its image, regardless of the nature of the societies in which they were formed.

Despite this, the Soviet peoples did industrialise their economy during the Great Depression, and defeated Hitler’s Nazi invasion, at a cost of at least 20 million lives. This major contribution to the defeat of fascism in World War II made socialism even more popular, and, especially with the Chinese revolution in 1949, it continued to inspire colonised peoples to demand and fight for their freedom. Most notable was the defeat of the French and then the US military in Viet Nam by 1975 and the Batista dictatorship in Cuba in 1959. All this transformed the world in many ways, but in the end it did not transform it enough.

From the 1950s, various forms of ‘new left’ emerged in Europe to reassert the democratic character of socialism against the Soviet model. This had a big impact in Australia in the 1960s and ’70s.

The Soviet model, which was not socialism at all, collapsed because it could not provide adequate basic needs, because it was authoritarian and repressive when people expected democracy, and because it could not develop and invest in technologies which would enable its living standards and environment to improve.
Nevertheless, with the Great Recession, and the relative decline of US power, there has been renewed interest in socialist alternatives to capitalism and to the ideology of neo-liberalism. The socialist-style initiatives in Latin America in the last decade are the best example.

This resurgent interest is built on the many gains that the 20th century socialist movements left to the world, above all, strong trade union and political party traditions based on a belief in the equality of humanity and the values of freedom, peace, justice, co-operation and democracy.


Global warming, end of cheap energy, dwindling water supply, profound economic crisis continuing in the USA: the changes are happening now and call for rapid responses. They can’t ‘wait for the revolution’. We must work to respond to these challenges now, but in a way which opens up the chance for a new democratic ecological socialism.

We must use all the techniques and talents of our time to achieve decent secure jobs and good social security for everyone, to profoundly challenge the ideas of exploiting people and nature for private profit, to challenge ideas of male superiority and of racism. We need more profound changes in power relations than those espoused in most of the 20th century.

The democratic grassroots movement we need must have trade unions, community organisations and political parties committed to these values, and committed to coalition building rather than vanguard domination as a key principle in the project.

This is a project for a 21st century democratic ecological socialism. We need great commitment, imagination, freedom of thinking and debate, and massive educating, organising and mobilising efforts to achieve it.
Out of the discussions, the struggles and the experiences of such movements shall come a future which is worthy of the energy and the intelligence which people have applied for thousands of years to the welfare of the planet and all its inhabitants.

This essay was commissioned by the SEARCH Foundation Committee in April 2009, to elaborate on the policy statement for a new democratic ecological socialism adopted by the SEARCH Foundation AGM in November 2008.

It is a collective effort, involving activists inside and outside the Foundation, and a process of consultation with SEARCH members for the 2009 AGM and subsequently, including through our website.

This final version was adopted by the SEARCH Foundation Committee in February 2010 as a contribution to the left renewal process.
The SEARCH Foundation Committee welcomes critical constructive feedback on this essay.

First published by the SEARCH Foundation, March 2010

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Copyright © SEARCH Foundation 2010

Except as permitted under the law, for example a fair dealing for the purposes of study, research, criticism or review, no part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise) without the prior written permission from the publisher.

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1. Australia - Neo-liberalism - Ecology - Socialism

ISBN: 978-1-876300-16-6

Sunday, May 16, 2010

Radical Tax Reform - Henry and beyond

above: Australian Treasury Secretary, Ken Henry

Lev Lafayette calls for a radical review of taxation in the wake of the Henry Review into the Australian taxation system.

BTW also - next week we publish a wide ranging essay on Ecological Socialism - be certain to check back here next Sunday!

Governments and Taxes

As long as there are humans, we will form societies. As a result of those societies there will be governments [1], and in all probability these governments will require a source of human energy. This may be achieved through some fairly blunt means, such as slavery, corvée, a portion of a crop to more abstract methods through the monetary system which generally come in the form of taxes on transactions, taxes on production, taxes on consumption). Almost invariably the people who are required to pay taxes dislike the experience and some aggressively so, claiming that tax is a form of theft or slavery [2]. Others will debate on the proportion that should raised as a function of the total income of a country, or they will argue the relationship of the tax on income (progressive, proportional, regressive), the source of the tax, the most efficient ways of collecting it, and, quite importantly, where the money is going to be spent.

Volumes could be spent on each of these topics, and indeed already have. As a result, the following is only a sketch. But the core premise is for a tax that isn't a tax, nor a form of theft or slavery by any definition, that is a source of public income whose collection is extremely efficient, that spurs productivity rather than acts as a deadweight [3], and a means of expenditure that provides both welfare without corruption. Everyone from the most ardent socialist, to the Austrian-school capitalist should support it. How could such a thing exist? Economics, as a social inquiry, must begin differently to physical sciences. In the social world normative values alter positive values, rather than the other way around. As such, we begin on a normative basis - political-economy.

The Gifts of Providence

Political economy combines the moral justifications of types of property ownership along with the effects of the same. Alas, in contemporary economics it has become a sadly neglected field. Both the neocalssical economists, who prefered not to deal with such troubling concerns like moral justifications, and vulgar Marxists, who lumped all property and property-owners into the same class, led to serious studies in political economy to fall out of favour in the twentieth century. But just because a subject doesn't receive the attention it deserves, this does not mean it has no effect. Rather it means that some older sources must be sought.

Classical economists, including the physiocrats, Adam Smith, David Ricardo, Karl Marx, Léon Walras and John Stuart Mill, all recognised the distinction between the factors of production (land, labour and capital), the respective sources of income derived from each of these factors (rent, wages and interest) and the respective economic classes (landlord, worker and capitalist). An individual can be a member of multiple classes simultaneously and proportional to the way their income is derived. These terms are specific and carefully defined. "Land" includes all natural resources in their unimproved state. "Labour" refers to physical and mental activity including entrepreneurship. "Capital" refer to all products that result from economic activity, both simple and complex, including both commodities and the tools of production. Money itself is not capital, but rather a representation of the value of capital.

Now the various political economists have a diversity of views on the justified income to the various classes. Marx, for example, evocatively argued that "Capital is dead labour, that, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks" [3]. Others were a little more generous towards the owners of capital, arguing that the capitalist's return was morally justified because they engaged in risk. But across the board, none of the political economists - following the footprints of John Locke - could find a justification for the income of rent derived by the landlord. "Land" was a gift of Providence, something that belonged to "nobody" but whose fruits were to be equally shared and holding it was in usufruct. Land ownership was considered a feudal privilege, not a capitalist property right, which can be noted in the title "Real Estate" (i.e., "King's Estate").

The classical economists were also quick to recognise the effects of land ownership. Adam Smith saw it reducing the wages of workers and indeed, laid the foundations for a theory of wage-slavery, also noting that any tax on land could not be passed onto renters in a competitive market [4]. David Ricardo was even more blunt, on how the interests of landlords was always opposite to that of both capitalist and worker [5]. John Stuart Mill was a pains to describe how the 'sacredness of property' did not apply to landed property, and railed against how "landlords grow rich in their sleep without working, risking or economising" [6]. Following Smith, Thomas Paine provided a practical solution: the creation of a common welfare fund, derived from ground-rents. [7]

Some Experiences, Some Theory

Economic theory and practice has not been entirely asleep since the nineteenth century however. Whilst there have been plenty of wars fought over those who sought monopoly profits through resource holdings [8], there have been a handful of isolated cases where natural resources have been used as a source of public income - and with remarkably successful results. Botswana is one such example; whereas nearby African countries have extremely high levels of impoverishment, violence, instability and poor education, Botswana has the highest GDP per capita in the region (despite having one of the lowest at the time of independence), a stable constitutional democracy, lower levels of crime etc. What does Botswana do differently? The public receives most of the monies from diamond mines and other land follows a more tribal, communal distribution - freehold is considered somewhat of a colonial relic [9].

This is not an isolated case. When the Chinese Nationalists retreated to the island of Formosa, they implemented the tax policies of Sun Yat-sen. Whatever one may think of the rest of their politics, the Nationalists did tax land according to its value. Whereas previously, the country was effectively owned by twenty families with widespread hunger, the new tax policy meant that landowners sold off their excess at prices peasants could afford, and for twenty years Taiwan consistently had GDP growth rates of over 10%. Denmark experimented with the policy for three years in the 1960s with remarkable success, followed by equally remarkable failure when they abandoned it [10]. In Hong Kong, the government through leasing land and land taxes, raises over 35% of its public revenue and as a result has very low income taxes.

On a smaller scale, cities like Harrisburg and Pittsburgh, assessed rates on land several times higher than improvements. It should come to no surprise that vacant land or land with dilapidated buildings became quite abnormal. Melbourne, Australia has had the interesting experience of having different councils adopt different rating systems, some based on site-value, some on land and buildings. Again, those which adopted site-rating systems through most of their history have higher standards of living, better buildings, and improved infrastructure [11].

By the second half of the twentieth century, nearly every economist in the world, whether liberal, conservative or radical, agreed that public finances should be largely derived from taxes on resources use rather than labour, productive investments or transactions. People like Milton Friedman, Herbert Simon, William Vickery, Robert Solow, Paul Samuelson, John Kenneth Galbraith, James Tobin, James Buchanan and Franco Modigliani, for example, all spoken strongly in favour of such a policy - and every single one (bar Galbraith) of the just referenced economists are winners of the Nobel Memorial Prize in economics. You may be forgiven for thinking they have some knowledge on the subject.

The opinion of said economists is that land tax is the only tax that does not distort market relations - indeed it returns them to a free market equilibrium as it removes the speculative component of rent-seeking. The tax is Pareto optimal by ensuring allocative efficiency. In stark contrast to all other levies, the payment of site rental retards neither productive activity, nor the supply or demand of resources. It is considered just, as the burden falls entirely on the user of the resources. Because "unimproved" also means "undamaged", it can incorporate ecological tax reform - and by itself it ensures that there is strong motivation to keep the aggregate human footprint on the environment as small as possible. It is arguably not even a tax, for the word itself implies something that is onerous on activity, "a taxing burden". Indeed, it liberates, providing the opportunity for a guaranteed minimum income for all, and for all to receive the fruits of the labour without the government "stealing" their earned income.

Practical Tasks and the Henry Review in Australia

If the empirical evidence consistently shows that this public finance policy works, and almost all economists say that the theory is right, then the practical task is to implement it. This means changing the tax system raising 100% of public revenue from economic land, and 0% from the improvements of labour, capital. There is no suggestion however to introduce such a scheme "overnight", even if the significance of the change can truly be considered "revolutionary", insofar that an entire parasitic economic class would no longer have the systematic foundation to exist. Of course, there are a small number of people who are "asset rich and income poor", often those who have retired from the workforce. Opportunity must be provided for such individuals to shift their investment base.

Ken Henry, Secretary of the Department of Treasury in Australia since 2001, has recently released a major review of the taxation system in that country [12]. Apart from including an increase in superannuation, the development of a infrastructure fund and significant depreciation concessions for small business there are two very major components which affect this discussion. Firstly, there is a 40 per cent resource rent on mining companies receiving above normal profits. Secondly, there was the proposal of removing state stamp duties on homes purchases with a federal land tax. The Federal Labor government has approved the resource rent, and rejected the federal land tax.

Undeniably, the resource tax is a good thing; it means that the mining industry will need to become more competitive, more productive, and it will ensure that the population at large will finally receive a fairer share of what naturally belongs to them anyway. The decision on the stamp duties and the federal land tax is, however, bizarre. Stamp duties punish both buyer and seller by increasing the price of a property, reducing the number of sales. It was the Labor Party which for over sixty years had a federal land tax as part of its platform. When the Menzies government abolished the federal land tax in 1953, the Labor leader of the opposition stated: "We of the Australian Labor Party have always believed that the land is the patrimony of the people and that nobody has a complete and absolute title to it ... The land belongs to the people, and its use must be safeguarded and protected at all times ... We have always believed in the land tax, and when happy days come again we shall restore the measure imposing the tax to the statute book of this country." [13]

What can be done about the Labor government's refusal to implement a Federal land tax? Firstly, an organisation called Prosper Australia has established a petition calling for a review on the effect of land prices on home ownership and the ability and effects of the establishment of a Federal Land tax - even if you don't agree with the proposal to establish such a public finance policy, surely a review is worthwhile. Secondly a mailing list entitled "Land and Labor" has been established with the express purpose to lobby Labor politicians to reintroduce the Party's old commitment for the socialisation of land values for the public benefit [14].

Despite all the evidence on how effective, efficient, fair and transforming such a policy can be, the pessimistic words of Clarence Darrow [15] still echo

The single tax is so simple, so fundamental, and so easy to carry into effect that I have no doubt that it will be about the last land reform the world will ever get.

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[1] This is not necessarily the equivalent of the State, famously defined as the body with a "monopoly on the legitimate use of physical force within a given territory". Max Weber, Politics as a Vocation, 1919.

[2] Murray Rothbard, The Ethics of Liberty, 1982. Rothbard argued that because taxation was theft, it was therefore morally legitimate to resist paying it.

[3] Karl Marx, Capital Volume I, Chapter 10, FP 1867

[4] Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book I, Chapter 8 and Book V, Chapter 2., FP 1776

[5] David Ricardo, On The Principles of Political Economy and Taxation, 1817. Ricardo may have been wrong on this point as people can be members of multiple classes simultaneously. War for resource exploitation invariably come from a alliance between economic landlords and some capitalists.

[6] John Stuart Mill, Political Economy, Book II, Chapter 2, and Book V, Chapter 2, 1848

[7] Thomas Paine, Agrarian Justice, FP 1797

[8] Macartan Humphreys, Jeffrey D. Sachs, Joseph E. Stiglitz (eds), Escaping the Resource Curse, 2007

[9] Fred Harrison, The Silver Bullet, Chapter 2, 2008

[10] "Big Lesson from A Small Country", New York Times, Oct 1960

[11] Phil Anderson, "Victoria's Muncipal Rating System", Australian Institute of Urban Studies, Victorian Division, 1996

[12] Australia's Future Tax System. Available at:

[13] Arthur Calwell, in Hansard of the Australian House of Representatives, Vol 221, pp 165-170

[14] Petition at: Land and Labor at

[15] Clarence Darrow, How to Abolish Unfair Taxation, 1913

Sunday, May 9, 2010

Australian Left Renewal Conference - May 29-30

This week at Left Focus we're promoting the Australian Left Renewal Conference - to be held in Sydney at the end of this month.  (May 2010)  Feel welcome to follow the URLs included in the text below for more information...

Perhaps the most important conference on the future of the Left in Australia in years...  Read on...

Australian Left Renewal Conference

weekend May 29-30, 2010

University of Technology Sydney Building 2

Broadway, Sydney

Democratic responses to the social and ecological failure of global capitalism

International Left responses to the global crises

Alliances between environmentalists and unionists that show the way forward

The Left and its strategic direction

12 Workshops and 4 Participatory Forums

International speakers - from the Philippines, Venezuela, India and South Africa

Be part of the change!

Follow the URL below for Program

Follow the URL below for Registration Form

The SEARCH Foundation’s program of ‘left renewal’ has convened Roundtables in Adelaide, Hobart, Launceston, Melbourne, Brisbane and Sydney over the last three years. This national conference will bring all those efforts together and reach out to more people across movements, organisations and political parties.

The national conference will focus on two levels of change – addressing the global crisis and the need to move to a green future, and the need for the left movement in Australia to change and renew itself as part of
that process.

The Cosmpolitan Civil Societies Research Centre, set up in 2007, is an interdisciplinary research initiative at the University of Technology, Sydney, that brings together scholars from a range of disciplines in the broad social sciences and humanities to investigate the practices that are crucial in enabling social cohesion and change in cosmopolitan societies.

Organised by the SEARCH Foundation & the Cosmpolitan Civil Societies Research Centre, UTS.

Cosmopolitan Civil Societies Research Centre

Level 3, MaryAnn House,

645 Harris Street

Ultimo NSW 2007

SEARCH Foundation

Level 3, Suite 3B, 110 Kippax St

Surry Hills NSW 2010

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Sunday, May 2, 2010

Poverty forces Australian Single Mothers to return to Activism

pls scroll down for article

above: Flyer for Melbourne demonstration May 6th for the rights of single mothers and their kids

Activist, Helen Said demands a fair go for single mothers and their families amidst unfair laws surrounding welfare and work.  Please show your support if you can by attending the rally - or if that is geographically impossible - by passing news of the rally to your friends and through your networks...

From Helen Said, single mother activist

Single mothers are to stage their biggest protest this decade at 11 am on Thursday 6th May in the Bourke Street Mall, Melbourne. The Council of Single Mothers and their Children’s Action Group have planned the rally to coincide with the Mother’s Day shopping frenzy. Calling for an end to poverty for single mother families, the Action Group is urging members and supporters to “dress in style” for the theme “Mothers Day Breakfast in Bed.”

Welfare to Work legislation and changes to the Child Support Payment formula, introduced by the Howard Government in 2006 and retained by the Rudd Government, have plunged many single mother families into dire poverty. ACOSS describes single mothers and their children as “our poorest families.” Single Mothers and their children are now the largest single group of homeless people in Australia. CSMC have experienced a massive increase in demand for food vouchers, shelter and assistance with back to school fees since the implementation of these changes.

Under Welfare to Work, women who separated from their partners after July 2006 are put on New Start Allowance rather than Parenting Payment Single. New Start is a lesser payment with a lower earning threshold before payments start being reduced. Single mothers on both New Start and PPS are classed as “Job Seekers with a part time work requirement”.

As “Job Seekers”, single mothers are forced to either work or search for work 52 weeks of the year, even if they satisfy Centrelink work requirements. There are no aftercare or holiday programs for secondary school children, which means that children as young as eleven are being forced to fend for themselves whilst Mum is pressured to work, under threat of losing her benefits. If a single mother doesn’t find a permanent job with paid holiday breaks it is technically illegal for her to take a holiday with her children. If a mother in casual employment takes time off work for any reason she is expected, as a “job seeker”, to apply for new jobs even if she has a job to return to. This puts more stress on her family and wastes employers’ time with bogus job applications.

The only way a single mother on income support can take a break from the part time work/jobsearch treadmill, for her own health and wellbeing, is to apply for an exemption, often by getting a doctor to declare that she is suffering from an anxiety related medical condition. My own observation as an activist, witnessing the increased pressures on single mothers, is that the “happy housewife pills” of the 1960’s are set to become the “post-separation medication” of the new century.

New Child Support Payment rules reduce the amount of money single mother families receive from their children’s fathers if the children spend increased time with Dad. Whilst this is works out well in families where Dad eagerly contributes to his children’s wellbeing, it has disadvantaged those children whose fathers refuse to foot the bill for their education, recreation or everyday needs.

Welfare to Work legislation was introduced during a period of labour shortage under the Howard Government. Traditional welfare agencies and other employment services are contracted to administer “one size fits all” services to the unemployed and under-employed. Injured workers, mothers returning to work and unemployed school leavers are forcibly lumped together in “job search training” classes regardless of their reasons for being out of work. In some cases these classes have disrupted existing work arrangements and caused people to lose their hard won part time jobs. Some of these employment service providers force job seekers to make ten “job contacts” a day under threat of losing their benefits. In my own case, one of these agencies rewrote my resume, without my knowledge or consent, saying that I was “physically fit for manual work” (when in fact I was a 50 year old university graduate) and put this bogus resume on a nationwide employment database.

Welfare to Work treats single mothers as a reserve army of labour, forcing us to take up menial jobs during labour shortages and granting us “retraining opportunities” when times are tough. Through classifying single mothers as Job Seekers, the nexus between single mother benefits and pension status has been all but broken, hence the government’s decision to deny single mothers the last pension increase in favour of these elusive “retraining opportunities”.

My own experience of such “retraining”, after spending ten years at home with a special needs child, was a seven week “taster course” in teachers aide training accompanied by an empty promise of a traineeship, when in fact underfunded schools are forced to advertise that “junior wages apply” and reject older applicants. After lobbying from unemployed students, the “taster course” was then followed by the offer of a free Cert III course from the Australian Education Industry Centre, which itself received no government funding, and consequently went into receivership half way through our course. This left many single mothers, older job seekers, disabled job seekers and new immigrants in limbo, back at the mercy of the Centrelink sausage machine.

Welfare to Work isn’t working. It has placed many single mother families in dire poverty whilst enabling employers to exploit single mothers as cheap labour in transient jobs. The Council of Single Mothers and their Children has been forced to return to the activism of forty years ago, when unmarried mothers fought for the right to keep their babies rather than giving them up for adoption. Single mothers have now been left with no choice but to take to the streets and protest against this government’s policies during an election year.

nb: the details for the coming single mothers' rally in Melbourne May 6th are above.  Scroll up for details - and PLS attend to show your support if you can!

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