Tristan Ewins
As the year draws to an end the new Abbott Conservative
government is in something of a crisis, perhaps ameliorated only by the
favourable treatment it continues to receive in the Murdoch press. The forced backflip on Christopher Pyne’s
planned dumping of the ‘Gonski-derived’ education reforms suggested a
government which was breaching its trust with the public even at this early
stage. That the Conservatives maintain
the fiction that education standards are purely about teacher quality, and has
nothing to do with resources – is simply a smokescreen for a class-driven
agenda. This is also evident in the
Coalition’s decision to cut superannuation subsidies for low-income workers –
and to shift those resources instead towards superannuation concessions for the
wealthy.
More recently, General Motors Holden has made clear its
intention to leave the country. The
result will be a loss of economies of scale in the components industry, with
the probable consequence that what remains of the auto industry will also cease
to be viable. There is a possible ‘multiplier
effect’ here: with job losses in
components and small businesses (combined with core auto-industry job losses)
adding up to approximately
50,000 jobs gone (a conservative
estimate ), and maybe as many as 90,000.
In this context, government
investment of $150 million a year seems reasonable compared with the cost of
losing the industry.
Abbott and Hockey have made themselves clear that they
(supposedly) oppose ‘corporate welfare’. But the meaning of ‘corporate welfare’
is up for interpretation. Arguably cuts
in corporate taxation, as well as wage restraint, and ‘user pays’ mechanisms
for students all amount to a subsidy for corporations with regard the
infrastructure, labour and services they benefit from. But there is little objection from the
Abbott government with regard this trajectory.
By comparison the ‘corporate welfare’ Abbott refers to has
been characterised by Labor shadow-minister Kim Carr as an ‘investment’. Perhaps the truth with regard the
auto-industry was somewhere in the middle.
There was an effective subsidy – but the government and the people
received much more in return than what they lost. Again: because of a positive economic
multiplier effect flowing on to communities, businesses, government, citizens –
from relatively high wage manufacturing jobs, and the strategically important
capacities involved.
Abbott will try and shift the blame to Labor now. Already we are hearing about Labor’s ‘reckless
spending’ as a trigger for savage cuts. But it is Abbott and Hockey who have chased
the auto-industry out of town; and they must take responsibility for the
falling employment and the falling revenue which follows.
All that said: it is not as if they didn’t have
options. The floating dollar could have
been temporarily suspended – and maybe pegged at 75 cents US – to bolster
struggling industries – also including tourism for instance. But this was ruled
out for frankly ideological reasons. And
there are plenty of revenue options to plug the structural deficit without
savage cuts. Hockey’s admonition that ‘no
jobs were ever created by raising taxes’ is ridiculous. Contrary to neo-liberal ‘common sense’ public
sector jobs in health, education, welfare, public works/infrastructure – ARE ‘real
jobs’. And for instance funding cuts to
Centre-Link will result in waiting periods for clients of over one hour for
advice and service. Probably the ‘welfare
bogey’ will receive special attention now – as the government seeks to vilify
the most poor and vulnerable in order to pay for its ‘big ticket’ policies like
Parental Leave, and Corporate tax cuts.
It’s also interesting how amidst all this the Conservatives
are considering raising the GST. Perhaps
they realise that things cannot go on as they are – because of a huge
infrastructure deficit – that will hurt business and not only workers and
consumers. And yet they have an
Ideological opposition to progressive taxation.
Again: for all their talk of Labor and ‘class warfare’, it is the
Conservatives who have the class agenda.
Meanwhile Qantas is also on the brink. Qantas is important not only because it is ‘iconic’,
but for the practical reason of having reserve air lift capacity.
Unfortunately the ideological climate is not supportive of
nationalisation. But
arguably the Holden brand could be re-acquired, and workers convinced to take a
partial stake in a revivified Holden by degrees (paid for through a
wage-restraint deal), re-orientating towards the production of smaller,
cheaper, energy efficient vehicles. The
result would be a joint co-operative/public enterprise. With the support of the federal government,
theoretically at least Holden could play a trail-blazing role in developing energy
efficient, environmentally friendly transport.
But we have an Abbott government, and frankly even under Shorten Labor
such a scenario would likely remain ‘purely theoretical’.
But there are also other reasons behind the Abbott
Conservative government’s attempts to ‘soften us up’ for savage cuts next
year. To begin with the Howard era tax
cuts had locked in a structural deficit; and the situation has been made even
worse by the current government’s decision to slash the mining tax, and to
significantly cut back Company Tax. Then
there are instances of ‘middle class’ and even ‘upper middle class’ welfare;
with the elimination of private health insurance means tests for upper income
earners for instance. Also notable, here, is Abbott’s plans for Parental Leave
on full pay for the wealthy; potentially paid for through cuts to the National
Disability Insurance Scheme. Finally – both Labor and the Liberals refuse to
touch superannuation concessions for the wealthy – whose removal (for the top
5% alone!) would rein in at least $10
billion (Richard Denniss’s figure). And depending on the scope of measures
(eg: perhaps removing concessions from the top 15%) taken – perhaps even $20
billion. (a rough estimate)
Also interesting amidst all this is a shift in the media (especially
the Herald-Sun) and the rhetoric of the Napthine Conservative government in
Victoria – to ‘get tough’ on East-West link protestors and ‘make them pay’. There is a real danger, here, of a gradual
reversion to the kind of draconian laws that were common many years ago under
the government of Joh Bjelke-Petersen in Queensland. If governments escalate civil conflicts by
violently repressing relatively peaceful civil and low intensity disobedience
actions – eg: pickets, sit-ins etc – then Australia’s relatively liberal political
culture could be sacrificed, leading to a culture of fear and intolerance –
cultivated by the monopoly mass media. For the Conservatives especially – there is a
choice between liberal conservatism – or outright reaction. Politically liberal conservatives especially
should be raising concerns about this escalation of intolerance and repression.
And yet there are objections to Victorian Labor’s strategy
of paying for transport infrastructure through privatising the Port of
Melbourne as well. Years ago such plans
would have provoked protest and hostility on the Labor Left. Today there is barely a whimper. As usual with privatisations of this kind the
competition that flows in reality will be minimal – even assuming two major
ports in to the future. Consumers could
also have to pay over the long term, and it would make more sense for Labor to
borrow in order to fund its public works agenda. Yet this is also ‘ideologically difficult’.
As the New Year approaches, though: at least amidst all this
it is cause for hope. Hope that Abbott’s administration could well turn out to be a one-term
government. To make that a reality, however, what we need
now is a Federal Labor Opposition which stands up on tax reform , distributive
justice, infrastructure and services, civil rights.
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