Left Focus

Socialism and the ‘Rebuilding of Capitalism’ – A response to Nigel Farndale

2012-01-28T12:28:00.009+11:00

Above: Swedish Political Economist Rudolf Meidner was partly-responsible (along with Gosta Rehn) for the "Rehn-Meidner" model of the Swedish economy, and the radical attempt to institute democratic wage earner funds.

In the following article Tristan Ewins argues that capitalism must hybridise and adopt socialist aspects if it is to survive. In criticising the position taken by writer, Nigel Farndale, he argues there is a different socialism than the Stalinism which imploded in the late 20th Century.

All readers are welcome also to join the 'Left Focus' Facebook group as well. We regularly discuss all kinds of issues, including the issues debate here at the blog. Notice is also given of new articles.

See: http://www.facebook.com/groups/58243419565/

Just recently Nigel Farndale has had published an interesting article in ‘The Age’ concerning the future of capitalism. The financial crisis of 2008 and the more recent degeneration of the US and European economies suggested a crisis – perhaps a collapse – not seen since the 1930s. That being the case Farndale chooses to explore the means in which capitalism might be reformed – perhaps ‘to save it from itself’.

Addressing this question, Farndale explores a number of economic movements. First the ‘decroissance’ or ‘decrease’ movement in France – which denies the centrality of General Domestic Product (GDP) to ‘economic success’ – pursuing ‘quality’ for all rather than mere ‘quantity’. Hence (quoting economist, George Magnus “the need for a happiness index, or an economic and social well-being index”). And secondly, Fardale mentions the “PARECON” movement – which promotes ‘participatory economics’ – with worker’s self-management and solidarity, and greater equality. (involving people in their status as consumers as well as workers) These are all very interesting developments, and Farndale is to be thanked for drawing public attention towards them.

So far, so good. But Farndale finds it necessary to pitch all this in the context of the dominant discourse. Although otherwise sympathetic, he dismisses the concerns of the PARECON movement for equality in terms of economic power as “back to basics communism”. And he damns communism as bringing genocide as if this were the inevitable consequence of seeking to creating of some “New [Soviet] Man”. But the repressive Stalinist state was radically at odds with the spirit of the early Marxist movement; as well a variety of more liberal Marxist successors.

Farndale then returns to consider ideas of ‘noblesse oblige’ – as alternative to equality. He argues that capitalism is a dynamic and evolving system; and claims basically that ‘capitalism is to thank’ for the welfare state. He seems to agree that only capitalism – through competition and enterprise – can provide growth and recovery. After all – what alternative is there if capitalism ‘has been [with us] through antiquity, feudalism” and so on? And if capitalism is reducible to the existence of markets surely it is inevitable in one form or another… Apparently, as with Churchill’s observations about democracy, capitalism is “the worst form of government [read economy], except for all the others that have been tried”….

In response to Farndale, it is important to challenge his conception of both modern capitalism and socialism.

To begin with, let’s look a capitalism. For Marx modern capitalism meant more than the existence of private ownership and markets. Although these were surely important components, in some form or another they had been with us for centuries and centuries. But the modern capitalism identified by Marx moved affairs to a different level. Production for profit, and the rise and dominance of a specifically capital-owning bourgeois class came to eclipse the remains of feudalism, and the privileges of the aristocracy. It also saw the demise of artisanship and craft labour and the marginalisation of old forms of self-employment. It saw the end of the guild system that had itself lasted centuries. In their place capitalism brought mass production, mechanisation, deskilling, and an unprecedented commodification of labour. With access to ‘seed capital’ successful capitalists could well sustain profits even in the face of interest repayments. This only expedited the overshadowing of the old ruling classes.

These circumstances also involved the rise of a new proletariat – and consequently an increasingly conscious working class – who had nothing to sell but their labour power. And during this early period this was basically in return for a meagre subsistence: workers realising little of the increased productivity for themselves. What is more – unlike in the condition of artisanship and the craft economy, the product of the worker did not belong to him, but was expropriated for sale by the capitalist. (Hence for workers there was – and still remains - a degree of unpaid labour time and effort) This was in addition to the alienation resulting from brutally demanding and unsafe work practices, involving men, women and children on 14 hour days, with night labour, and worse.

Increasingly, however, the capitalists who expropriated surplus from these workers were seen to develop into a ‘rentier’ class: who by virtue of their wealth could delegate matters of management and live a live of pure leisure. Of course it wasn’t all like this: there were innovators and visionaries (as there are today); and there were the small capitalists who worked as hard as anyone; who often went bust in the face of competition; and more particularly in the face of increasing monopolisation. (which meant they could not compete) These petty-bourgeois – or intermediatory classes – found themselves in a constant struggle for survival against the monopolists; and in those days there was no ‘social safety net’. While Marxists such as Karl Kautsky appealed to the petty bourgeoisie that socialism would provide them with security, Conservative, fascist or economically-liberal forces (a mixed bunch) tried to turn their attention against the organised working class as a threat to their survival in the capitalist context.

But the boom and bust cycle – and capitalist crisis more generally - was more than the ultimately ‘creative destruction’ Farndale refers to. There arose structural and functional unemployment – with a ‘reserve army of labour’ exploited to inhibit working class organisation; driving down wages and conditions, as well as inhibiting employment security. There was immense waste as competition forced the premature and continuous modernisation of the means of production - even when existing machinery had not yet been sufficiently utilised. Only the monopolists with huge reserves of capital could survive in this environment – so this process hastened concentration of ownership - AND power. And in the event of cyclical crises immense amounts of capital and produce were destroyed because unprofitable in the marketplace– even where there was massive unmet human demand and need. Inequality of wealth amongst consumers narrowed the market and thus actually inhibited the system. Hence the ‘overproduction’ identified by the Marxists.

Moreover, in the modern day, with rapidly evolving technologies – there has emerged the practice of planned obsolescence: unnecessarily staggered release of technology intended to maximise sales.

Farndale is right, though, that capitalism has evolved. In different guises it survived the 20^th Century in the sense of becoming a HYBRID system.

On the one hand - From laissez-faire origins and the age of the individual entrepreneur there emerged the joint-stock company, the trust, the rise and interpenetration of industrial and banking capital. There arose what ‘Austro-Marxist’ Rudolf Hilferding called ‘Finance Capital’ – with unprecedented centralisation of ownership, control, and hence political-economic power. Capitalism evolved in diverging directions with the rise of imperialism, and the competition between nation-states and their constituent capitalist classes for control of markets. At various times capitalism has adopted an ‘organised’ form: especially under conditions of total war. And fascism comprised not a qualitatively different kind of system – but rather an authoritarian, nationalist, militarist and corporatist variation upon the capitalist theme.

On the other hand post-war hybrid economies saw the introduction of the advanced welfare state; of labour market regulation and rights for organised labour; of the mixed economy – with emphasis on areas of ‘natural public sector monopoly’. In countries such as Sweden and the other Nordics there emerged some of the most extensive welfare states anywhere: where security was combined with efficiency to provide ‘the best of both worlds’. Innovative ideas also included collective capital formation and co-determination. Even in 20^th Century Australia a compromise developed involving labour market regulation and strong unions, as well as socialised health-care, and ‘natural monopolies’ in energy, gas, water, communications, and other crucial infrastructure. Also there was strategic public ownership in areas like banking and insurance to actually maintain competition in the face of collusion, and provide for consumers otherwise excluded or discriminated against because of lack of market power. For a long time even political conservatives in Australia - in the Liberal Party and Democratic Labor Party - supported much of this compromise.

In recent decades these variants have themselves been displaced by resurgent laissez faire capitalism. Falling profits have been responded to with assaults on the rights of labour and labour’s share of the economy. Hence exploitation has intensified with a mix of ‘labour market deregulation’ and increasingly draconian limits on the industrial action available to workers. (so much for the ‘liberty’ held high by faux-liberals!) Various forms of ‘corporate welfare’ have emerged. This has involved an effective subsidy through maintained provision of infrastructure, education and training even in the context of corporate tax cuts, and increasingly regressive taxes for workers, consumers and citizens. But the myth of triumphant capitalism has remained partly through the effect of technological innovation on peoples’ lives; and partly because of enduring myths about socialism; and the reality of Stalinist implosion in the late 20^th Century.

In the short to medium term capitalism must again hybridise if it is to survive, and if it is to provide security and happiness for citizens, consumers and workers. It must again incorporate significant socialist aspects. That capitalism itself did not implode entirely in the 20^th Century was ironically due to the social forces Marx himself had helped mobilise for the cause of reform; and by reform spurred by the threat of a ‘Soviet pole of political attraction’.

A mixed system including economic socialisation and democratisation, here, is one possible response. In Sweden socialists attempted to extract a greater share of democratic ownership in the economy as a trade-off for years of restrained wages; as compensation for resulting excess profits in some areas; and as a response to centralisation of private capital ownership. That effort (for ‘Meidner wage earner funds’) failed because it attempted too much too quickly – and because it promoted exclusively wage earner funds rather than funds controlled by ALL citizens. But many of its principles remain valid and instructive.

Many of the problems identified by Marx still exist for modern capitalism. There is a tendency for profits to fall – though ameliorated by the countervailing impact of qualitative technological leaps in productivity and material living standards. Labour and Nature remain the sources of all material goods: and regardless of objectivist and subjective interpretations of value, the reality of surplus extraction remains – even if it cannot be nailed down with precision. (there is the question of fair return on investment; considering the deferred gratification of small investors; as well as return for innovation and initiative) For capitalists there remain uncomfortable questions about distributive justice – and the impact of plutocracy upon attempts to forge real democracy.

Capitalism remains unstable. As well as demand management there is a need to capture the forces of innovation and efficiency that are unleashed by competition, while at the same time experimenting with more co-operative forms, and countering the effects of unnecessary and counter-productive cost-structure duplication and private monopolistic abuse of market power. Hence strategic re-deployment of natural public monopoly and other appropriate forms of public sector extension. Finally, collective consumption via the social wage and welfare state provide the most efficient and equitable means for citizens and consumers to access essential services in health, aged care, education, unemployment insurance, and other necessities.

Farndale mocks the idea of some ‘New Man’ he sees as embodied in the Marxism of Stalin and Mao. But for earlier moderate and democratic Marxists such as Karl Kautsky one of the most noble aims of socialism was to democratise culture – to bring culture to the people. Since then we have seen the rise of universal education including a critical element incorporating the humanities and social sciences. For a long time the creation of public libraries further epitomised this vision. Meanwhile abundance that Marx could barely dream of has brought music, literature and new information technologies to the masses. Rather than some Stalinist caricature – the aim of socialists today is to further extend the democratisation of culture – through further extension of critical participation in the humanities and social sciences; through a culture of active citizenship; through the development of a participatory media and public sphere.

Rather than repression, democratic socialists today seek the combination of a rational, innovative and participatory Democratic Mixed Economy. There is a need to combine the efficiencies of markets, while doing away with unnecessary cost-structure duplication, massive overproduction, demand-crises rising from inequality, and other forms of excess and waste.

In bringing our attention to the PARECON and ‘decroissance’ movements Farndale does readers a genuine service, however. These movements continue to demonstrate some of capitalism’s greatest failings; and show that current-day crises can only be fought off with compromise – with a HYRBID system – as much liberal democratic socialist as capitalist. But for radicals over the longer term there is still the dream of genuine democracy: of government by the people and for the people; where real popular sovereignty displaces the power of an economically and hence politically and culturally dominant capitalist class.

Labor‘s Socialist Objective in the 21st century - principles for economic democracy and equity ?

2012-01-05T20:42:00.000+11:00

From the author, Geoff Drechsler: The following is an open letter to Australian Fabian News. I posted it here in the hope it will generate some discussion on some of the issues raised in the book 'Looking for the Light on the Hill: Modern Labor‘s Challenges.' ---------------------------------------------------------------------------------

by Geoff Drechsler

One of the 'more' curious aspects of the current debate around modernising Australian Labor is the recurring proposal to abandon the party’s socialist objective, and commit Labor wholeheartedly to a neo liberal economic model. Troy Bramston‘s Looking for the Light on the Hill: Modern Labor‘s Challenges takes up this theme also. This is 'curious' because we are presently witnessing the greatest failing of free market neo liberal economics since The Great Depression, largely stemming from a lack of regulation and governance. So, it is a strange time to be advancing a position supporting free market economics, particularly in a debate about the future of a social democratic party, when one looks at the concrete realities of the current situation.

In this debate, the reality is that the choices being presented are between the principles of economic democracy and of equity of the socialist objective or a neo liberal agenda of privatisation and deregulation that has progressive social policy grafted to it, with the aim that the latter will mitigate the effects of the former. Since the late ‘80s, there has been a shift to the right in terms of economic policy by social democratic governments internationally, and all these experiences have shown the reality that such programs have meant less equitable outcomes for Labor’s people, and led to declining electoral support.

Locally, this approach is exemplified by the recent activities of the current Queensland state government and the former NSW government. Both have driven supporters away electorally, and are unlikely to deliver equitable outcomes in the long term.

Many of the opponents of the socialist objective use warnings of some grim imagined Sovietesque economic basket case, that they claim would be the practical manifestation of any implementation of the socialist objective too. This is disingenuous.

As a social democratic party, participating in politics in an advanced industrial country like Australia, it would be much more instructive to look to the labour and social democratic parties of Europe and their experiences, in regards to economic policy and programs.

In this debate, one country’s experience is informative, Sweden, because the Swedish social democrats developed an alternative economic model that achieved economic growth and equity in the post-war period. And the Swedish social democrats understood that free market economics were incompatible with the interests of working people and social justice, so attempted to develop their own economic model, rather than rely on existing mainstream economics. Just like the first Labor activists in Australia who drafted the original socialist objective here. The Swedish social democrats goal of economic democracy centred around 2 themes-industrial democracy and collective capital formation, which it was envisaged would lead gradually to the transformation of private ownership of the means of production to social ownership.

The Swedish economic model is also interesting because nationalisation as a strategy was rejected early on, and Sweden has also never had a large public sector either.

Practically, this alternative economic model lifted Sweden out of the Great Depression earlier than other advanced economies and, in the post-war period, led to high rates of economic growth and lower rates of unemployment than comparable economies. The Swedish social democrats themselves experienced an unprecedented period of electoral success over the same period.

The end result is a country with a high standard of living, more equitable distribution of wealth and a modern dynamic developed economy. All in all, an economic program worth further examination in any debate around the socialist objective.

We need to see this debate in terms of the need for an economic model that meets both the party’s economic and social goals, and clearly free market economics has already discredited itself, as recent history shows. Sadly, one only needs to look to the US to see the shrinking middle class, the product of a sustained neo liberal economic agenda over the last few decades.

A quote from Keynes’s is probably an apt conclusion at this point-“Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually slaves of some defunct economist.”

Important Book Review: Reviving the Strike

2011-12-04T10:36:00.001+11:00

Over recent decades the right to strike in Australia and elsewhere has been steadily eroded. The consequence: a lack of bargaining power for workers under pressure from aggressive employers and Conservative/neo-liberal governments. In this latest 'Left Focus' article, life-long labour movement activist, Chris White reviews Joe Burns ‘Reviving the Strike: How Working People Can Regain Power and Transform

America

’ (2011 IG Publishing) The implications of this review for Australian unions are obvious and important.

nb also: If you find this article interesting PLS join our Facebook group - to link up with other readers, and to receive regular updates on new material.

see: http://www.facebook.com/group.php?gid=58243419565

A review by Chris White

Joe Burns has a stimulating analysis and conclusion in this readable and topical book on US strikes.

I conclude as well that we can revive the strike in

Australia

and working people can regain power and transform

Australia

’s labour relations system differs historically and institutionally from the

, but working people experience the same repression of strikes (just recently Qantas, Victorian Nurses, Baiada Chicken etc) and the decline of the strike.

Our corporate and state rulers dominate the labour law system, and as in the

, deny workers and their unions any effective right to strike.

PM Gillard’s regime the ‘Fair Work Act’ retains the ‘Work Choices’ excessive legalistic penalising of strikes and the Building Industry Act (2005) with the ABCC severely threatens and penalises building and construction workers organising. (See arguments on my blog http://chriswhiteonline.org and put in search ‘ABCC’ and ‘the right to strike’.)

After reading this book, the same arguments apply in

Australia

- that unions have to revive the strike weapon.

US and

Australia

has experienced the near disappearance of strike struggle, although there are some recent struggles.

The task is how the strike revival is to be done.

This is a serious challenge for Australian unionists in this era of capitalist instability, corporate attack, a likely Abbott government and more repression.

Yet resistance grows, the Occupy Wall Street movements and strike waves in many countries against severe austerity and/or dictatorships and strikes to improve workers economic and social lives.

More workers power

Burns argues that

history shows the working class became more powerful and improved their lives by winning strikes.

“By wielding the threat of a powerful, production halting strike, trade unionists forged a better way of life for millions of working class Americans during the roughly fifty year period from 1930 though 1980. …The strike is by far the most important source of union power…Collective bargaining made little sense unless it was backed by the threat of a strike that halted production.”

Burns cites US labour relations scholars with stories of union leader militancy, solidarity and secondary boycott strikes, industry-wide and pattern bargaining strikes, mass pickets to stop ‘replacement workers’, sit-down strikes and occupations. Such strategies are to cripple economically the corporations and force management to negotiate until union demands are met.

From the 1930s unions organised militant strikes in response to management’s serious class war. Unions defeated employer solidarity. Industrial action ensured wage increases and standardisation.

Unions defied unjust anti-strike laws. Despite key defeats some worker control prevailed against management despotism.

From the 1980’s, with capital’s fierce attack on unionism, union leaders retreated from these strike tactics. Unions became weaker. The employers’ counter offensive cut wages and conditions.

AFL-CIO President Richard Trumka said in the early 1990s,

“Unions need their only true weapon—the right to strike. Without that weapon, organized labour in

America

will soon cease to exist.” (p20)

The

labour control system, like

Australia

, allows only a limited lawful strike.

Arbitrators and judges interpret labour laws within the acceptably narrow ‘free market’ enterprise bargaining. Orders are made for strikers to return to work and legal sanctions against industrial action deemed “unlawful” are enforced. Corporate lawyers with the state’s legal forces penalise strikers and their unions. Withdrawing your labour is risky and largely ineffective.

The effective picket?

Burns gives one illustration with the legal restrictions on the picket line - similar to

Australia

, e.g. at Baiada – see posts http://chriswhiteonline.org).

Due to the law, the picket as practiced is ineffective with protesting strikers having to walk around in a circle with placards, while watching scabs walk through taking their jobs.

Burns goes through the legal decisions that enforce for the employer the right to use ‘replacement labour’, scabs.

Pickets to be effective have to peacefully block all access for the strike to win.

But judges rule the effective picket line ‘unlawful’.

In past strikes, winning meant defying judicial injunctions.

Despite the strengths of today’s union leaders, Burns argues they do not use the strike to seriously challenge employer power - stopping production and work is a fringe idea.

Young radical union organizers today organize social campaigns with community support. But union leaders working within the system do not allow these organizers to plan industrial action to defy the law as being too risky.

Earlier, industry or pattern bargaining with mass strike pressure to make labour costs uniform was achieved. But this is union bargaining is also ‘unlawful’ and rarely attempted today – the same as in

Australia

The extreme Tea Party Republican Governors in 2011 passed legislation where the public service unions are denied the right to collectively bargaining at all, leading to mass protests such as in Wisconsin - but this movement, with some success, was channelled into community organizing for re-call ballots and Democrat politics, but not strike action. (See Wisconsin in http://chriswhiteonline.org ).

Solidarity strike?

Burns regrets the demise of the solidarity strike. “Solidarity Forever” is indeed just a song.

“Solidarity is the heart and soul of unionism—the only force capable of confronting power and privilege in society. To revive unionism, we must recover labour’s long-lost tools of workplace-based solidarity.”

Today, union activists join each other’s picket lines and hold fundraisers for striking workers. While important, these acts of solidarity are largely conducted away from the workplace.

In contrast, labour’s traditional forms of workplace-based solidarity allowed workers to join across employers and even industries to confront bosses with tactics of secondary strikes and industry-wide solidarity strikes.

What’s a secondary strike? Say workers at a small auto parts plant in Indiana walked out. If they enlisted the support of the Teamsters to refuse to transport the parts, the United Auto Workers to refuse to assemble a car with the parts, and employees of car dealerships to refuse to sell the cars, their power would be multiplied. The original strike would be a primary strike and the others would all be secondary strikes.

In the past, solidarity tactics allowed workers to hit employers at multiple points in the production and distribution chain. By impeding the flow of supplies into a plant, unions pressured the employer to settle a strike or recognize the union. Similarly, secondary boycotts pressured retailers to stop selling struck goods.

Solidarity tactics expanded the site of the conflict, allowing workers to confront employers as a class.” http://www.labornotes.org/2010/10/secondary-strikes-are-primary-labor-revival

Burns documents how the

judicial system outlawed the secondary and solidarity strike.

“At a deeper level, modern labour law forces unions to bargain with individual employers rather than establish standards on an industry basis.”

Australia

’s outlawing of secondary boycotts began in the 1970's through the Trade Practices law and remains a key part of the employers’ legislative armoury to weaken and penalise union solidarity actions.

US labour control system

As I have a law degree and write on labour law, I learnt from Burns’ recounting the history of the

labour control legislation. Burns discusses the Taft-Hartley 1947 Act know as the ‘Slave Labor Act’, the judicial cases against basic union organising such as allowing companies to move to defeat union drives and years of courts penalizing union action, such as employers’ rights to permanently replace strikers, see in Chapter 6.

The corporate lawyers and judges have indeed worked remorselessly to limit unions’ ability to have workers organize and win.

The US restrictive labour control shows how difficult it has been for unions getting workers to join - let alone assisting members to organize a successful strike.

Today union leaders do not risk defying judicial injunctions against strike activity because of the penalties.

But union leaders did so before - with some wins and some serious defeats depending on the contested conflict.

Burns makes this telling point.

“To be clear, the downfall of solidarity cannot be attributed solely to legal factors. Unions willingly agreed to no-strike clauses.

Over the years, many focused on just the needs of their own members, failing to embrace a social unionism that looked out for the interests of all workers. In the 1980s and afterwards, unions often failed to defend their pattern agreements, allowing special deals for particular “troubled” employers until the pattern was no more. And union officials all too often squashed rank-and-file attempts to join together across bargaining units, even at the same employer.”

What has occurred with current union leaders is an abandonment of the practice of the strike and class politics.

Although the AFL-CIO is strong rhetorically, the labour movement is trapped in no strike business and social unionism.

Burns looks at inadequate union alternatives to the strike in chapter 4.

"With the production-halting strike becoming a relic of the past, union activists of the last 20 years have had to turn to other mechanisms to try to pressure employers during collective bargaining. Thus, we have seen the rise of strike ‘alternatives’ such as the one-day publicity strike, the corporate campaign and the inside strategy. “

Each strategy, while supposedly an attempt to revive trade unionism, instead adheres to a system that has been established over the past 75 years to guarantee labour’s failure.

Without the traditional tactics of solidarity and stopping production behind them, none of these strategies had proven powerful enough to make an employer suffer economically.

In many ways, these strategies are a reflection of the current state of the labour movement.

Rather than putting forth bold ideas calculated to challenge the current system of labour relations in this country, contemporary trade unionists have instead adopted a philosophy of pragmatism, of making do with what the existing system offers, instead of trying to break free of that system, as traditional trade unionists once did. (p71)"

“Nonetheless, in recognizing the limitations of these tactics, we must still acknowledge how creative and refreshing they have been in an era of union busting and decline. They have kept alive the fighting spirit in the labour movement, particularly in situations where a traditional strike would have meant crushing defeat.”

One-day publicity strikes

“In a one-day publicity strike, the union informs management that its workers will be going on strike, but will return to work in 24 hours. Due to the short duration of the ‘strike’ and the advance notification of the return to work, there is no opportunity for the employer to permanently replace the strikers.

However, due to their limited timeframe, one-day strikes have little impact on the operations of a company. Since the union announces its intention to strike in advance, the employer is typically able to make alternate arrangements to cover the work for the day that the workers are on strike.

The main goal of the one-day publicity strike is, as the name implies, publicity, as the union tries to bring public and media attention to the grievances of its workers. Consequently, one-day publicity strikes have generally been used against employers who are susceptible to public pressure. Frequent targets have included hospitals, universities and public employers. (p72)"

The one-day protest strike strong in the public sector became the only strike action for many US unions, with some gains, but anti-union employers survived, as the union economic pressure was not sufficient.

“…The one-day strike supplies the illusion of struggle, distracting from the real problems facing the labour movement, which is the lack of an effective traditional strike. (p73)”

Working to rule keeps within employer boundaries but has limited success.

On the job go-slows or the ceaseless rolling intermittent strikes, in and then out and return and effective bans - again made illegal - have greater bargaining force.

Union strategists for decades used anti-corporate campaigns, with a range of community and public lobbying tactics to pressure the employers and governments. Despite some impressive wins, they are not as effective as the strike weapon.

Social unionism ineffective

Burns supports the organising strength of social unionism with union and community coalitions, union media and public pressure on employers.

But he argues such a strategy, without the strike, has not seen the union renewal promised.

“Social unionism is not a replacement for direct struggle against employers. In social unionism, the strike is abandoned, and in the process, the central role of workers at the point of production is lost.

Although appearing progressive, social unionism in fact represents a shift in power from workers to union officials and non-profit staff…social unionists also sidestep the key economic concerns that must be at the centre of labour’s revival, namely that any trade union strategy must be capable of redistributing wealth and power. Organization and community ties alone do not lead to power. (p81)”

Burns’ criticism is levelled not only at the conservative and right wing ‘business unionist’ leaders but the left union leaders and progressive labour academics.

As I implemented with other unions social unionism in Australia with many good campaigns, Burns’ arguments means I reconsider past practices.

Burns takes us through key examples of successful strikes with members’ democratic control of the union and the militant strike struggle. Strengthening unions relies on internal union democracy (p92).

Organizing model not working

Chapter 5 “Why organizing cannot solve the Labor crisis” is important for the debate on new strategies.

Despite union leaders successfully shifting resources to organizing the un–unionized sectors from the 1990s until now, Burns argues this strategy has failed to revive unions.

“In fact, the idea that the labour movement can resolve its crisis simply by adding new members - without a powerful strike in place - actually constitutes one of the greatest theoretical impediments to union revival (p95).”

Burns does not reject the practice of increasing union density and organizing in the industry of competitors. He argues it is not sufficient without the effective industry or pattern-bargaining strike and the ability to have sufficient power at work to force the collective agreement. Unions may succeed at times with skilled or professional workers able to control the supply of labour in any industrial action.

But with the low levels of unionization continuing, union leaders - and I was one of them – just advocating organizing the unorganized is not good enough. I admit more clearly past weaknesses in my union practice.

Even when union density increases, the power to beat the employer does not necessarily follow. In the US, the labour laws allow aggressive employers to wage successful anti-unionizing drives and to defeat union elections.

Burns accuses the union reformers’ organizing model as “abandoning the goal of creating the type of labour movement capable of transforming society (p113).”

He gives historical examples of militant strikes that had surges in workers joining unions. In 2011 during the Wisconsin struggles many workers joined unions.

In Australia, employers and particularly those powerful corporations that used AWAs under Work Choices still have in the FWA many legal weapons to weaken unionism.

What about amendments to labour legislation?

President Obama promised unionists labour law reform ‘The Employee Free Choice Act’. Such a reform was to make it easier for workers to unionise and bargain. Burns argues that this is not sufficient for union revival. In any event, President Obama failed to even look like delivering.

Labour rights

In Chapter 7 Burns cites principles of labour rights.

“Labour must develop a working class perspective that establishes a set of principles that clearly justify the refusal to follow unjust and illegitimate restrictions on the right to strike. (p137) …it was labour’s agitation and the open and principled defiance of judicial orders, that won workers the right to strike and stop production.”

Unionists use key principles to argue the case - such as

“labour is not a commodity”,

“labour creates wealth”,

“the right to strike is a basic freedom that distinguishes us from the slave or bonded labour”

Regarding progressive principles from socialists and those political activists with a class analysis: these principles are returning. But the struggle is to reform the labour relations system so these principles predominate over HRM ideology and employer power.

“Trade unionists need to envision a world where labour’s conception of striking prevails over that of management. Otherwise, labour can construct a solidarity grounded in weakness.”

International strike action

The US government constantly ignores international labour rights from the ILO, but Burns does not take this breach up. Australia agreed to the ILO standards to protect workers’ rights to strike, but our FWA is in breach (see my posts).

With the power of giant US multi-national corporations, the unions challenge is not only to develop the ability to take strike action locally but internationally. International strike action is done but mostly limited to a day’s protest stoppages or across regions industrial action for collective agreements.

International labour solidarity has to challenge global corporate power. “The real question is whether a strike based on stopping production and international work-place solidarity could successfully combat global corporations.(p134)” Can the effective strike be organized across countries?

Where do we go from here?

Burns in chapter 8 argues a labour movement in the US is possible if we learn lessons.

The details are instructive and the conclusion is critical - rejecting the whole labour control system is necessary.

I conclude by citing sections from Chapter 9 “Where do we go from here?”

“After watching the labour movement—and the strike—wither over the past 30 years, trade unionists today need to answer several big questions if they wish to revitalize unions in this country. How should the labour movement deal with the current system of labour control? How should human labour be treated in relationship to capital? How can workers act as a class to advance their common interests? What are the best forms of organization to carry on the fight for workers’ rights? And finally, what is the role of the strike?”

The answers—or non-answers—to these fundamental questions will shape labour’s future in America.”(p171)

“To point the labour movement in a new direction will require a large group of people willing to challenge the status quo, people who have the ideas, organizational skills and self-confidence to give voice to a workers’ movement capable of transforming America.

This will have to start with the activists in the movement—shop floor militants, progressive union staffers and officers, worker centres’ activists, and friendly academics.

However, the debate over the future of trade unionism must grow beyond this committed, but small group if the there is to be a true labour revival in this country.”

So how does one build such a trend? Again, we can learn from labour history.

In the 1920s and early 1930s, the labour movement was stuck in a narrow form of craft unionism that was unable to win gains from employers. Craft unionists viewed only skilled workers as deserving of union representation, and they rejected attempts to organize all workers into one union.

However, a counter current developed that argued that industrial unionism was the road forward for the labour movement. This trend industrial unionism toward was driven by the political left of the era (socialists, anarchists and communists), who had a program that, although varying in its approaches, shared one guiding principle: the strength of the overall trade union movement.

Eventually, the years of agitation paid off as the idea of industrial unionism gained popularity, first at a grassroots level, and then broadly within the entire working class. Thus, when the economic crisis of the 1930s hit, workers were ready to embrace a new form of unionism…

The task today is to build such a broad-based understanding within the labour movement of the need to change the present system.

How can this be done? During the decades-long push to establish industrial unionism in the first half of the twentieth century, industrial union activists repeatedly raised their issues at union conventions.

Following their historical lead, trade unionists today could adopt the position that the system of labour control is illegitimate, and support efforts to break free from it. Just as it was once official AFL policy to disobey injunctions, trade unionists today could debate whether or not to comply with the different facets of the system of labour control.

No matter the issues, reviving the strike — and by extension, the labour movement — will require a single-minded focus by trade unionists.

Right now, the left wing of the labour movement lacks a common agenda, as it advances a hodge-podge of ideas of what it will take to save unionism in this country. If one agrees with the analysis in this book, then the one unifying factor that can achieve the myriad goals of the labour movement is the revival of the effective, production-halting strike. This must become labour’s primary focus.

Additionally, if trade unionists ever decide to embrace a new militancy in order to smash the system of labour control, they will need the support of their union brothers and sisters.

Historian Nelson Lichtenstein, in the conclusion of his influential history of the labour movement, ‘State of the Union’, lists the failure to support militancy as one of the major weaknesses of the modern labour movement. Discussing what the movement needs to succeed, Lichtenstein writes,

‘The first is militancy. The union movement needs more of it, but even more important, American labour, as a whole needs to stand behind those exemplary instances of class combat when and if they occur.

The 1980s were a tragic decade for unions, not because workers did not fight, but where labour did take a stand…their struggles were both physically isolated and ideologically devalued.

Instead of being engulfed in the solidarity of their fellow trade unionists, workers today who choose to fight back often do so on lonely picket lines, with little support from the official labour movement. Without a broad trend that promotes effective tactics, striking workers are not exposed to ideas that can help them win strikes, nor are they supported when they engage in militancy.”

While the strike might seem like a relic of the past too much of the contemporary labour movement, as labour historian Peter Rachleff writes,

“it would be a mistake to leap to the conclusion that strikes are on their way to the dustbin of history. As long as the capitalist economy rests on the employment and exploitation of labour, the organized withdrawal of labour is bound to remain a central expression of working class protest and power.”

Remember that the strike is only a means and work resumes with greater strength for workers. Whether workers control prevails is another project.

With militant right-wing management attacking workers with the lock out, then workers have to also learn militancy by winning the strike. Such education will take years – such as the preparation in Australia in the 1960’s that defeated the then penal powers with the O’Shea national strike. We can do it again.

If working people are to regain power and transform the US and Australia, the winning strike has to be revived.

Chris White was the Secretary of the United Trades and Labor Council of SA and worked for unions for 30 years. He now lives in Darwin. Read his daily Left Union blog on http://chriswhiteonline.org

ALP National Conference 2011 needs to Clear the Way for Genuine Reform

2011-11-20T11:33:00.008+11:00

above: The 2011 ALP National Conference is swiftly approaching. Below are a series of motions/proposals that could be crucial in reviving Labor's heart and soul: reaching out to voters, and giving Labor a chance in 2013.

By Tristan Ewins

Dear friends;

The following below are a series of motions that I am trying to have adopted in substance at the 2011 Australian Labor Party (ALP) National Conference this December. While not exhaustively addressing the issues I am concerned with, the most important change Labor must make is to drop its commitment not to increase the tax intake as a proportion of GDP. Even a small increase in the Federal tax take of 1.5% of GDP would bring in new funds in the vicinity of $20 billion a year. This could be a modest progressive tax rise which nonetheless could deliver very significant reform of this country's welfare state, social wage and public sector.

Without change here Labor will lack the flexibility it needs to implement the kind of genuine and robust reform that alone can win back voters' confidence. The prevailing policy straight-jacket means Labor cannot initatiate substantial new initiatives (eg: the National Disability Insurance Scheme) without defunding other important programs. (for instance, there are much tougher eligibility rules for the Disability Support Pension - even affecting people whose job prospects are very significantly reduced by their disability.)

For a reforming, progressive Labor government we need to do more than 'tread water' when it comes to the welfare state and the social wage. There is desperate need for more funding for Aged Care - where our most vulnerable are facing degradation, loneliness and untold suffering. And the National Disability Insurance Scheme will cost many billions if it is genuinely to serve its purpose.

Bill Shorten, in particular, was at the forefront of the push for the NDIS. Now he needs to take the lead publicly to ensure Labor raises new funds to implement the program as soon as is possible. And also to fund stop-gap measures in the mean-time - so Labor is seen 'to deliver the goods' well before the next election.

The Greens, meanwhile, are talking about incorporating dental into Medicare. And Labor's best chance of achieving re-election will be to meaningfully and extensively address the Cost-of-Living crisis where it comes to energy, water and housing stress. 'Cost-of-Living' is the mainstream issue that will 'make or break' Labor at the next Federal election.

The plight of the unemployed must also be addressed with reform of the punitively-meagre "Newstart Allowance". And all this must also involve billions in new funds if Labor is to achieve its object - and win over voters. Labor needs to show substance in the face of an electorate sceptical about half-measures and spin.

Finally Labor needs to reconsider its policy of privatisation, looking to the market forces which see privatised energy, water and infrastructure costing consumers more than would have been the case had these remained in public hands. This is as a consequence of higher borrowing costs, the need to internalise profits into cost-structures, and the lack of market power of small consumers. A long-term re-orientation to the mixed economy, with strategic re-socialisation - is where Labor must therefore position itself. Efficiencies, meanwhile, can be retained as a consequence of co-operation with unions - sharing the benefits of increasing productivity where possible. Increasing public housing supply to create downwards pressure on housing affordability could also be crucial.

I will be working through the Left to try and have the substance of the motions represented below adopted, even though there may need to be re-wording. (without change of substance) Whether or not these proposals actually get to Conference is uncertain, though. I am hoping figures such as Shorten - in Labor Unity and Doug Cameron on the Left - will take these kind of proposals seriously, and indeed take the lead publcily in advocating the cause. Again: Shorten needs to apply the same principles of decency and compassion he has applied to the NDIS more broadly - and especially into Aged Care where the need as especially dire. And Cameron's high-profile and leadership could bring these concerns 'into the public eye' ahead of Conference. My hope again is that they and other relatively progressive figures will see the need to adopt the substance of these proposals on a cross-factional basis.

For other Labor activists, MPs, officials who are interested in running with these proposals please let me know. I probably will not be at Conference (I am not a delegate) - but I am passionate about these causes.

The draft motions are below.

sincerely,

Tristan Ewins (Left Focus)

Motion: Enabling an expansion of progressive taxation as a proportion of GDP to fund crucial social programs

The Australian Labor Party 2011 National Conference adopts the following position.

The ALP National Conferences adopts changes to the ALP National Platform enabling an increase in progressive taxation as a proportion of GDP by the Labor Federal Government.

While not binding the Labor federal government to increase the overall rate of taxation as a proportion of GDP, the ALP National Conference supports changes in the National Platform to make this possible at the government’s discretion.

The 2011 ALP National Conference supports this position so that the government will have the flexibility to make the necessary decisions to fund crucial policies and social programs.

To pay for a wide variety of initiatives the 2011 ALP National Conference is open to the prospect that Federal progressive taxation be expanded during the current term of government by as much as 1.5% of GDP.

The 2011 ALP National Conference supports this position underscored by a desire that significant new funds (overall and proportionately) be dedicated towards a mix of initiatives in the fields of aged care, mental health and the incorporation of dental care into Medicare.

In addition to this, the 2011 ALP National Conference states its desire that such new funds be dedicated towards ‘stop-gap’ improvements in disability support and services, including Carer’s pensions – well ahead of the actual full implementation of the National Disability Insurance Scheme. (which the government anticipates will take many years)

The Conference states its desire that such new funds also be dedicated towards very significant Cost of Living measures to tackle housing stress, increased energy and water costs, and other stresses upon average and lower income individuals and families. The Conference supports this position on the understanding it is essential to reconnect with mainstream working class Australia which is struggling under these Cost-of-Living pressures.

The Conference supports this position on the understanding that Labor needs to ‘deliver the goods’ by implementing very significant new policy initiatives in order to secure the confidence of the electorate, and re-inspire its own organisational and core support base.

Moved: Tristan Ewins

Motion: National Aged Care Guarantee

The 2011 ALP National Conference supports a change in the ALP’s National Platform to mandate the implementation of a Universal Aged Care scheme along similar lines as the proposed National Disability Insurance Scheme. (NDIS)

The Conference supports this position on the understanding that our aged citizens’ rights and humanity should be respected fully at the time when they are most vulnerable.

The Conference will specifically support a scheme which provides for the following, financed by a progressive ‘insurance levy’ along similar lines to that considered for the NDIS.

a) That all aged Australians, including those in high intensity care have provided for them heating, air conditioning, dental and broader health care, and nutritious and varied food .

b) That staff numbers and the skills mix be improved in Aged Care facilities with mandated standards for all facilities, including ratios for registered Aged Care nurses, and other aged care workers. Apart from anything else this is necessary to ensure all residents eat properly, are regularly turned when necessary to prevent bed sores, are promptly assisted in instances such as incontinence, and are engaged socially by staff.

c) That Aged Care workers receive decent and better wages, subsidised training, recognised career paths, all of which are necessary to attract the best quality carers to the sector. And in accordance with this, that Aged Care Nurses receive pay rises so that their remuneration is closer to nurses working in other sectors.

d) That new mandated standards be phased in to ensure genuine opportunity for privacy for aged Australians in care, including private rooms.

e) That the costs of Aged Care be gradually and increasingly socialised, with initial emphasis on ensuring distributive justice for poor and working class families – that they are not forced to pay a devastating effective ‘flat tax’ through the sale of their homes, or by being forced to take out equity against their homes.

f) That as part of this approach the costs of low-intensity care also be socialised for poor and working class families – so that residents are not forced into high intensity care because of financial pressures when not appropriate.

g) That additional funding be provided for community and family advocacy groups to ensure greater accountability and provide protection for vulnerable residents who may not be able to stand for their own rights because of dementia and other debilitating conditions.

h) That the elderly be treated with dignity and respect in the broader public health system and not be forced into nursing homes at short notice and without consultation simply to free up beds.

i) The other initiatives be implemented to ensure meaningful quality of life for aged care residents. This to include: pastoral care, facilitated interaction between residents, opportunity to enjoy television, radio, internet access (for those interested), outings, and other forms of recreation; as well as enjoying a variety of surroundings, including access to gardens.

j) That much greater financial and other support be provided for Carers, to make it viable for the frail and aged to remain at home and in familiar surrounds as long as possible if that is their desire.

Moved: Tristan Ewins

A Mixed Economy to Contain Cost-of-Living Pressures

The 2011 ALP National Conference notes that Cost-of-Living pressures are impacting severely upon average and lower income Australians. In particular the Conference recognises pressures in the areas of energy, water, user-pays mechanisms for transport and other infrastructure, and housing stress.

While supporting broader initiatives to tackle this Cost-of-Living crisis, the Conference notes that the problem has arisen in part as a consequence of past privatisations.

The Conference notes the following:

Private enterprise for energy, water and infrastructure passes on a higher cost of borrowing to consumers, while also having to internalise the cost structures involved in paying dividends to private investors in the sectors concerned.

Investment in new infrastructure also has to be sourced by the enterprises concerned, with the consequence that again costs are passed on to consumers.

Competition is also sporadic as many feel uncomfortable ‘shopping around’ for energy and water.

And finally, small consumers do not have the market power of large enterprises, with the consequence that where they do not bargain collectively, they are discriminated against on price.

The Conference also notes arguments that privatisation can drive productivity, but asserts that productivity gains can instead be made with the co-operation of unions – on the understanding that workers share in the benefits of increased productivity.

This being the case the Conference supports a position of altering the ALP National Platform to reflect these facts, and to mandate the following action.

a) In-principle commitment to the future re-socialisation of energy and water concerns, as well as public finance and provision of essential infrastructure. (this is important in containing Cost-of-Living pressures for Australian families, including user-pays mechanisms that act effectively like ‘flat’ - ie: regressive - taxation.)

b) Also to tackle Cost-of-Living pressures, the Conference will support and advocate a change to the ALP Platform to mandate a very significant increase in public housing stock. This is important to increase supply, hence making housing more affordable – especially for those in need.

Moved: Tristan Ewins

Chris White on Qantas, employer lockouts, and the Fair Work Act

2011-11-06T12:49:00.006+11:00

Above: Alan Joyce is not very popular these days amongst the Australian trade union movement...

In this article Chris White gives his opinion on the recent Qantas lockout in Australia, and the changes he thinks are necessary to the Fair Work Act to prevent lockouts, and protect the right of workers to take industrial action.

Chris White is the former Secretary and Assistant Secretary of the United Trades and Labor Council of South Australia and remains active in the Australian labour movement.

His blog is here: http://chriswhiteonline.org/

Qantas CEO Alan Joyce, Board Chairman Leigh Clifford from Rio Tinto, Richard Goodmanson Board member and former Rio Tinto Director, and Dr John Schubert a director of foreign multinational BHP-Billiton and former President of the Business Council of Australia (the BCA is the peak body for multinational corporations) not surprisingly militantly employed rightwing anti-union practices with the corporate union busting legal firm of Freehills.

They were most incensed by pilots wearing red ties –unionism! Baggage handlers were stopping for short periods and on TV marching with placards through the airport. Engineers had responsible limited bans. None were in force on the day of the lock out during so-called ‘good faith bargaining’.

Qantas' aggressive lock out power was to defeat legitimate workers’ industrial action.

The very powerful corporation secretly planned after the AGM to ground the airline without notice to anyone, disadvantaging the flying public and politically challenging the Gillard government.

The lock out was in response to legitimate job security claims

See:

http://afr.com/p/business/companies/what_the_unions_want_1XPzVNsdfoO8ijqgol4e1O.

Now from the ASU

http://www.asu.asn.au/media/airlines_general/20111104_aviation.html

And see this re: the engineering alliance

see: http://www.amwu.org.au/read-article/news-detail/810/Unions-combine-to-secure-Qantas-engineering-jobs-/

Many unionists now say that employers ought not to have the right to lock out.

An amendment to the Fair Work Act FWA that removes the lock out must be introduced.

The more powerful corporations instead are to be required to negotiate a collective bargaining settlement with their workers.

Qantas management tactics shows why the lock out ought not to be available in any reasonable collective bargaining system.
The unions had to go through technical process requirements, applications to FWA for protected action, ballots with members voting in favour and technical notice processes and constant negotiations. If unions make any technical defect, Freehills seeks that the industrial action is “unprotected” and huge fines threatened.

However, Qantas management simply plans that after the AGM we will immediately ground and lock out.

Now the Fair Work Act FWA (the same as WorkChoices) allows this management tactic. The FWA has no requirement for the employer to give notice to lock out, nor balloting of shareholders at the AGM and certainly not the processes forced on unions for strikes. This is a serious process deficiency and yet another rule for the 1%.

For our collective bargaining system to work for employees against the more powerful corporations, lock outs ought not to be allowed at all.

Some nations prohibit lock outs on the basis that they tilt bargaining power too far towards employers.

The International Labour Organization ILO principles and most labour relations systems are based on the widely accepted reality that employers have the greater power over their workforce.

In any decent labour law, the lawful right to strike is necessary to afford some ability of workers and their unions to counter that employer power. The lock out as shown with Qantas denies any such balance: the effectiveness needed for workers to bargain in their interests. Gillard claims balance – but this is just spin.

In any case, most employers legally reserve lock outs as a genuine option of ‘last resort’, rather than the Qantas ambush of ‘first resort’.

Some labour relations systems require notice and some balloting of their shareholders. The principle is some notion of ‘proportionality’ to govern the usage of lockouts.

But not in Australia. Our right-wing corporates with their law firms are gearing up to emulate the Qantas tactic against any industrial action.

Unions’ experience is that disputes are not resolved by the lock out but by sitting around the table negotiating an outcome, a real agreement. At the end of the dispute and the industrial action management and their workforce have to continue to work with each other.

Unionists remember. There are long-term consequences.

Workers are in a difficult position facing the lock out. Here is a film of a US workers’ struggle against Rio Tinto’s lock out:

See: - www.lockedout2010.org

For a reference on

Australia

lock out read ‘Lockout Law in

Australia

: Into the Mainstream?’ Dr Chris Briggs University of Sydney acirrt working paper 95.

Suspension only

My next point is to support suspension only of the lawful strike - what the Qantas unions wanted.

The Qantas tactic forced the Minister’s application for an order to terminate protected industrial action rather than suspend it.

Suspension first means no industrial action - here I believe the unions suggested 120 days. At the end of that negotiating period if no agreement is reached, then protected industrial action can resume.

Fair Work Australia due to the lock out instead terminated all action. The parties are now in a FWA conciliation process for 21 days. If no resolution is reached, FWA imposes an arbitrated outcome on Qantas and unions and the workforce. We shall see what happens.

See: Shae McCrystal University of Sydney http://theconversation.edu.au/why-fair-work-australia-terminated-the-qantas-industrial-action-4092

The FWA provision is rarely used even when the economy is significantly damaged. On the day I did not believe union action was causing significant damage to the economy, now held to be the case by FWA. But due to the lock out FWA said such action was enough threat to the economy and terminated both actions.

I believe it would have been fairer if the lock out had been terminated and the unions’ protected action suspended.

There are alternatives

The Fair Work Act has alternative devices as well as the lock out for Qantas to halt the limited lawful union industrial action. As I write I watch the Senate hearings and Senator Doug Cameron asking Joyce about alternatives and why he did not ask Fair Work to intervene rather than to lock out.

For the employees’ right to strike to be effective, their protected action has to be allowed – to mitigate against the power of the corporations - and ensure a settlement between the parties.

The ability of employers or the Minister to halt protected action ought not be available because it undermines the effectiveness of strike action as a bargaining tool.

Any reasonable collective bargaining regime has to have employees and their unions be able to organise and strike – which we would prefer to be without government interference.

See: http://chriswhiteonline.org/2009/09/right-to-strike-restrictions-4/

Political dictatorship

I comment about Abbott urging what he would have done, now trumpeted widely by the political right, namely to use section 431 - unprecedented direct Ministerial power to stop a strike.

PM Gillard in the Fair Work Act (FWA) retained WorkChoices’ many repressive measures to stop lawful strikes and this included s431. I repeatedly argued that all restrictions on the withdrawing of labour have to be repealed for an effective freedom for workers to take industrial action without being ordered back to work.

The FWA sections terminating a lawful strike require at least an independent hearing with evidence and merit submissions before the umpire or a court makes the order – hence the reality of the weekend Fair Work hearing.  

But in section 431 of the FWA, the Minister simply has to form an opinion about damage to the economy and then proclaims the termination of protected action - no independence, no evidence, no merit argument, no process is required – simply the Minister not liking a strike and employers asking him to stop it.

This political power to affect the lives of workers and their right to collective bargaining and to strike is an outrage.

I criticized Howard for introducing s431 into Work Choices after lobbying by the rightwing mining corporations such as Rio Tinto. Gillard should not have been retained it in the FWA. It has not been used and rightly would be subject to legal challenge. Section 431 breaches existing international standards.

Only a political dictator would use it. Abbott is proud to say this is how he will act. Section 431 and indeed all of the Work Choices anti-strike provisions have to be repealed.

On 71% Joyce salary increase, the Gillard government’s reforms to CEO salary rises is proved to be inadequate and again this Parliament has to act.

Overall what Qantas does is how corporations work in this capitalist crisis outsourcing jobs and why workers and their unions reasonably resist.

See useful further comments by Ben Eltham here http://newmatilda.com/2011/11/01/naked-conflict-between-profits-and-wages

Again - for Chris's blog see: http://chriswhiteonline.org/

After the Melbourne ‘crackdown’; Rebuilding the ‘We are the 99 per cent’ movement

2011-10-22T17:13:00.004+11:00

above: Victoria Police's idea of 'Minimum Force'

In this article Tristan Ewins refutes criticisms of the "We are the 99 per cent" movement and considers tactical questions facing that movement. He also considers the implications of violent tactics on the part of police for the liberal rights of all Australians.

nb also: If you find this article interesting PLS join our Facebook group - to link up with other readers, and to receive regular updates on new material.

see: http://www.facebook.com/group.php?gid=58243419565

Tristan Ewins

At the time the author began writing this article (21/10/11) police in full riot gear had smashed a peaceful protest in Melbourne that was organised in solidarity with the 'We are the 99 per cent’ and 'Occupy Wall St' movements in the United States and around the world. Peaceful protestors have been left bruised and bleeding, many suffering the effects of capsicum spray, choke-holds and pressure-point tactics. The protestors were engaging in peaceful ‘sit-in’ tactics of the kind popularised by the anti-segregation movement in the United States in the 1960s. And yet the Melbourne Herald-Sun (22/10/11) labelled them a “defiant mob”, and a “threat to [the] Queen’s visit”, while also claiming the brutal crackdown comprised “[the] police [taking] back OUR city”. But citizens would be better advised to consider what this precedent means for all of us – for our right of free assembly. At the time of writing apparently at least 50 protestors have also been arrested by police; but perhaps the figure is much higher.

In Australia we are supposed to be a liberal democracy. Again: this should mean we enjoy certain rights - freedom of speech, of association and of assembly. If citizens do not have the right to freedom of assembly in a dedicated public square - then is this a violation of those same liberal rights? What would we have said 25 years ago if a similar kind of occupation was forcibly and violently dispersed in East Berlin? If people will not stand up for their rights - or are contemptuous of those who do - then they have to be prepared to lose those rights - not because this would be right, but because that is the logic of their attitude.

Right-wing critics attempt to portray the “We are the 99 per cent” movement as being hypocritical. Apparently partaking of any of the benefits of modernity makes one unqualified to criticise the excesses of capitalism – which have almost brought the United States and Europe to ruin. If I own an I-Pod apparently I am unqualified to complain if after losing my job and my home I am thrown onto the street. Apparently I am a ‘hypocrite’ if a own a mobile phone, but being unable to afford private schooling for my children instead watch them flounder in a state system starved of funds, resources, staff and infrastructure. In reality poverty is relative. In today’s information age internet access is crucial for the most basic social inclusion; and even for job-seekers to have the opportunity to find employment in the first place. The fallacies of the political Right, here, need to be refuted clearly and logically.

It's important to recognise the core message of the protests also. In Australia and worldwide extreme inequality is rife.

In the US the top 1% own about 43% of all wealth and the bottom 80% have only about 7% total wealth between them. See: http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

In Australia, meanwhile, the top 20% have on average *40 times* the wealth of the bottom 20%. See: http://evatt.labor.net.au/publications/papers/226.html

Elaborating further: according to the ACTU (Australian Council of Trade Unions) in Australia “the ‘top’ 20 percent own 61 percent of the wealth while the ‘bottom’ 20 percent own just one percent of the wealth.” (See: http://enpassant.com.au/?p=11270 )

This translates into lopsided power relations - culturally, economically, politically. It is anathema to democracy. Meanwhile there is a massive shortfall in disability services, aged care and public education. There are cost of living pressures for ordinary people with energy, water, and housing stress stemming from privatisation and the Howard era housing bubble. Taxes are gradually ‘flattened’ over the decades, becoming less and less fair, and providing the context for increasing ‘corporate welfare’. The needy go without to pay for the privileges and excesses of the few.

The consequence of such extreme disparities in wealth is also to be found in increasing rates of poverty.

Peak welfare-body ‘ACOSS’ (the Australian Council of Social Service) claims that “ 2.2 million people, or 11.1% of Australians were living in poverty in 2006” “compared with 9.9% in 2004, and 7.6% in 1994.” The trend has been towards higher and higher levels of poverty, so updated figures would likely reveal an even more disturbing reality. http://www.thebigissue.org.au/Facts_Figures_Poverty_Homelessness_Australia.pdf

Inadequate pensions have also been identified as one of the main causes of poverty in

Australia

. Dr Cassandra Goldie of ACOSS has stated that Australia spends 3.2% of GDP on income support compared with the OECD average of 6.5%. And yet for “73% of households with the lowest incomes, these government pensions and allowances are their main source of income.” http://www.thebigissue.org.au/Facts_Figures_Poverty_Homelessness_Australia.pdf

But all our varied movements around the world - against inequality, for social justice and for peace - each needs a minimum program: a clear set of demands to rally around. Indeed, we could also do with an international minimum program – for the global movement – as well as national positions. A process needs to be initiated to determine what form this will take.

Here in Australia the first step must be progressive reform of tax so the wealthy pay their fair share; so the vulnerable get the services they desperately need; and so ordinary working people get a fair go. This author intends to go into greater detail in the future as to what may comprise a viable ‘minimum program’ for the Australian movement.

We will not achieve all the demands we make in the near future; but we must set out to build the kind of mass movement that will influence a generation, and begin to ‘turn the tide’ against neo-liberalism. This necessitates careful planning to ‘appeal to the mainstream’ and build a broad base of popular support.

Conservative ‘Herald-Sun’ columnist Miranda Devine fears an “opportunistic” Left will “co-opt” the movement and enforce ‘its own agenda’. (20/10/11) Yet while the movement needs to be broad, the organised Left (broadly defined) brings crucial insights to the movement, and is the only force capable of organising and sustaining this kind of mobilisation over the long-term.

We can’t allow ourselves to be divided either – or our base narrowed - on the basis of caricatures of the Left.

We know that capitalism involves tendencies towards class bifurcation and monopolisation. We know that the rate of exploitation has intensified in recent decades; that the wage share of the economy has been shrinking; that there is greater inequality in the labour market; and that there is a social services shortfall to pay for effective corporate welfare. We know that we are experiencing a ‘two speed economy’: with mining prosperity driving up the dollar and making other industries (eg: manufacturing, tourism) uncompetitive. And yet tens of billions of mining profits – from our resources that can only be extracted ONCE – are heading overseas. (see: http://www.abc.net.au/news/2011-06-29/mixed-reaction-to-greens-mining-profits-report/2776784 )

Meanwhile the rise of new competitors (China, India) increases the future risk of war as Great Powers strive to dominate a finite world market.

In short: we know there is a problem with capitalism.

At the same time, though, the Left needs discipline in leading the movement: to maintain and appeal to that ‘broad base’ and avoid unnecessary confrontations that could see the movement isolated. ‘Ultra-leftism’ – an indulgence in confrontation that serves no strategic purpose – needs to be rejected. If the Queen’s visit comprises a flashpoint from which we have nothing to gain, perhaps the movement would be better advised to re-establish a presence after she has left Australia. Thereafter: rather than a large ongoing occupation, perhaps a vigil and information table could be maintained in the city with rolling rallies and a ‘carnival-esque’ atmosphere in which participants from all walks of life feel welcome. Here a balance must be maintained between keeping momentum on the one hand, and avoiding exhaustion of new and casual participants such that they ‘drop away’ from the movement. The aim must be massive mobilisation and retention at a variety of levels over the long term.

We also need to be prepared for defensive struggles in the event that a world-wide economic downturn leads to further attacks upon our social wage, our welfare state, and our liberal rights. (including industrial rights) This would necessitate co-operation with the broad labour movement. In the face of austerity there could be need for industrial actions that serve a very real and clear strategic purpose.

We must have resolve that the recent excess on the part of police in Melbourne is not the end of our campaign, but only the beginning. And we must resolve to broaden the appeal and the base of our movement to maximise our impact.

Tristan Ewins is a freelance writer, blogger, qualified teacher and long-time member of the Socialist Left of the Australian Labor Party.

above: Protest image from the Vietnam War

nb: Readers may also be interested that John Passant has also written a compelling article on some of these issues over at ‘En Passant’. See: http://enpassant.com.au/?p=11270

How to improve social wages with tax reform: Labor’s mission

2011-10-15T12:07:00.004+11:00

above: Labor activists need to mobilise for this year's National Conference to ensure the ALP Platform is altered to allow a modest increase in overall taxation to provide real improvement to social services for the Aged, for the Disabled, and Cost-of-Living Assistance for ordinary families.

Readers are also welcome to join our Facebook Group at this URL: http://www.facebook.com/#!/groups/58243419565/

Tristan Ewins

15/10/11

Former NSW Labor Premier Kristina Keneally has argued recently that Labor needs to ‘get back to basics’. This doesn’t have to mean dropping a price on carbon or forgetting the rights of minorities. But to actually deliver on cost-of-living pressures before the 2013 federal election, as well as desperately-needed programs for the vulnerable, would require a significant ongoing public investment. The next two years offer the Labor Party the opportunity of delivering real reform, thus reviving Labor’s electoral and organisational fortunes.

The recent tax summit had all manner of people arguing that the wealthy ought pay more tax. Through tax reform, restructuring and the closing of loopholes (including unfair superannuation concessions for the rich) Labor should aim to expand annual social expenditure by at least 1.5 per cent of GDP over the next two years - a little short of $20 billion in today’s terms (in the context of an economy valued at approximately $1.2 t rillion). But this would require a change in the ALP Platform at the Party’s next National Conference, due in December 2011.

Already Labor Senator Penny Wong has warned that with rising pension, health care and aged care demands the Australian government could be “tens of billions of dollars short by 2050”. Meanwhile the National Disability Insurance Scheme (NDIS), if implemented in the near future, in today’s terms would come at an annual $6.5 billion price tag. And yet legitimate demands for cost-of-living relief, for fairer pensions, higher quality aged care and improved disability support and services loom immediately ‘in the here and now’.

Speaking recently to Paul Versteege from the Combined Pensioners and Superannuants Association (CPSA) I was told that “nursing homes are like warehouses for old people.” Now I was already under this impression but I felt it to be a very powerful and accurate metaphor. Usually there is little to do for residents in nursing homes. Even in ‘common rooms’ residents are simply sat down to stare at walls hour after hour, day after day. There is no variety in life, no change of scenery. Usually these facilties are stark, there are no gardens in which to find peace and comfort.

Many of our aged citizens spend years in these facilities, years of acute suffering admist death and awaiting death. Often there is a lack of qualified staff, especially nurses. This means residents can acquire bed sores if not turned at the necessary intervals, and sometimes residents can be left in soiled beds. Food is often of poor quality, and low staff-resident ratios mean that aged care workers do not always check to ensure residents have actually eaten their meals. Malnutrition and weight-loss can compound each other in a ‘downward spiral’. In the past lack of dental care has led to infections and even death. In the future access to information technology will be crucial.

The indignity and suffering of the aged deserves much more attention than it is receiving. An ageing population will demand an increse in funding. But we also need to improve services now, not just ‘tread water’. Crucially, many of us that live to old age will one day need aged care. And so will our families and loved ones.

It is essential that we move away from user pays models in aged care. Despite claims to the contrary the Gillard Labor governemnt is still effectively demanding that aged Australians sell their homes in return for sub-standard care. The mechanism operates like a massive regressive tax. We need to ensure that all aged Australians receive the same very high quality of care on the basis of need and regardless of wealth. And such high-quality universal aged care must be funded progressively, not through what the Combined Pensioners and Superannuant’s Association calls a “pre-death death tax”.

Meanwhile there is some hope on the disability support and services front with Julia Gillard’s annoucement earlier this year of the government’s intent to implement the NDIS. Crikey reports that the scheme will offer “financial cover for services including for respite care, vehicle modification, accommodation support, therapies and prosthetics,” It is “expected to cost the government an extra $6.5 billion a year.”

And yet while the Productivity Commission suggested a 2014 implementation it is not certain that the government will meet this time-frame, with some suggesting a delay of seven to eight years. This simply is not good enough. Properly a NDIS should also involve construction of dedicated care facilities for the disabled who require intensive care so they are not left in aged care facilities in which they are isolated and do not ‘feel at home’.

But importantly the needs of the aged are just as desperate as those of the disabled and their carers. If there is $6.5 billion in additional funds that will be devoted to a NDIS then surely a similar amount must be devoted to improving the quality of Aged Care, supporting carers and removing user-pays mechanisms for poor and working class families. The government could begin with an annual $5 billion injection with more ‘in the works’ for the future.

Then, of course, there is the question: Where is the money coming from?

There could be progressive levies for the proposed NDIS and for aged care – or maybe some kind of single shared levy. And perhaps some of the funding gap could also be met with progressive reform and restructure of income tax. Venture capitalist Mark Carnegie thinks the wealthy (including himself) need to pay their ‘fair share’. Specifically he has suggested at the recent tax forum that 15 per cent extra in tax ought be levied from the wealthy top 15 per cent. Yet Assistant Treasurer Bill Shorten has dampened expectations claiming such measures would be unlikely to be implemented.

Shorten has been an eager proponent of the NDIS, but he needs to start thinking of progressive ways to actually fund and implement the program. And hopefully he will apply the same standards of decency and compassion by popularising a similar program for aged care as well. John Passant has suggested other measures: an inheritance tax, minimum company tax, end capital gains tax concessions, tax trusts as companies, implement land tax for properties valued over $1 million, apply stronger economic rent taxes on mining, banking, and supermarket oligopolies.

Some of these proposals could form part of a more long-term agenda of reform, with Labor aiming to expand the social wage proportionately by 1.5 per cent of GDP per term of government, levelling out after several terms.

Nonetheless, funds levied over the next two years could then be deployed to provide stop-gap services and support in anticipation of a broader NDIS by 2014, with a similar scheme for aged care. Such ‘stop-gap’ measures could be crucial in that the government would be seen to be ‘delivering the goods’. This is always more valuable than promises only ‘for the distant future’.

By locking such investments in and implementing the necessary funding mechanisms pressure would also be applied upon Opposition leader Tony Abbott to maintain bipartisan support. Abbott would appear callous were he to sabotage or obstruct such programs, and in contravention of self-professed Catholic/Christian convictions of compassion towards the vulnerable.

After reform of Aged Care and Disability Support and Services, much of the remaining funds (from an $18 billion pool) could then be dedicated to a major cost of living package aimed at mainstream working Australia as well as the most vulnerable. Tax reform measures as alluded to earlier could be deployed to provide robust subsidies for energy and water in the case of low-middle income households, and for new public housing (increasing supply, and hence enhancing affordability). Broader tax restructure could also benefit these households, and comprise part of the package.

Over the long term, meanwhile, Labor could move to gradually resocialise energy and water, perhaps on a national basis, while moving away from user-pays mechanisms for roads and other essential infrastructure. Lower public sector borrowing costs could be passed on to consumers, while small consumers (individuals, families) would no longer be discriminated against because of lack of market power. Finally, productivity agreements with unions - including retraining and active industry policies - could deliver the best value for the public over the long term while providing justice and security for workers. Such initiatives would thus negate the core arguments for privatisation. Tighter regulation of energy/water over the trasnsitional period necessary for resocialisation could also be an essential part of a cost-of-living package.

Some of this money could also go towards funding the realisation of the Australian Service Union’s (ASU) community sector wage claim, which would make a massive difference mainly for women but also for men, working in that field. This could also lead to an influx of skilled labour and a big increase of morale in aged care.

Finally, the dire need to improve poverty-level Newstart benefits (even in the midst of harsh active labour market policies) demands action. And stricter conditions for the Disability Support Pension need to be reconsidered in light of the reduced job prospects and capacity of those genuinely disabled nonetheless judged able to work in someform.

Some funds could flow to the public coffers by cutting Dividend Imputation from 100 per cent to 75 per cent. Dividend Imputation involves ‘credits’ applied so that dividends are not taxed ‘a second time’ after Company Tax. But the measure – not applied widely outside of Australia – overwhelmingly favours the wealthy and in any case Company Tax rates have been steadily eroded in recent decades.

Partial withdrawal of Dividend Imputation could be crucial in reaching the $18 billion target. John Quiggin has argued for half dividend imputation in the past (which would yield over $10 billion). But getting ‘a foot in the door’ for tax reform (with 75 per cent imputation) could be a precursor for further reform in the future.

Targeting Dividend Imputation like this is a good strategy because, as opposed to raising Company Tax, the costs are less likely to be passed on to workers and consumers through reduced wages and increased prices. As a strategy it would target the ‘rentier’ capitalist class and thus would be a fair and egalitarian measure.

Assuming the implementation of such a reform agenda, even were Labor to lose in 2013, there would be a valuable and lasting legacy of which Gillard, Swan, Shorten, Wong and the federal Cabinet could be proud. Indeed, such programs would comprise a veritable ‘rallying cry’ for Labor’s eroding membership and core support base.

But by actually deliving such a big $18 billion/year package and making a real difference for mainstream working Australia as well as the most vulnerable Labor can still hold hope of victory in 2013.

Ammending Labor’s National Platform this coming December 2011 to enable an expansion of social expenditure by 1.5 per cent of GDP would provide hope for Labor and for Labor’s constituency.

Tristan Ewins is a freelance writer, qualified teacher and social commentator based in Melbourne, Australia. He is also a long-time member of the Socialist Left of the Australian Labor Party (ALP).

Media Diversification and the Question of ‘Neo-Racism’

2011-09-21T09:36:00.003+10:00

above: The meaning of the Hijab is largely a matter of personal perspective

In this latest article, Tristan Ewins examines further the arguments around media diversity and the Media Inquiry in

Australia

. But what is more, he engages with recent arguments made at ‘The Drum’ to the effect that there is a ‘new form of racism’: ‘neo-racism’. Ewins disagrees with the Greens’ position on media reform – but we would definitely welcome sincere and respectful debate on all these issues here at the blog!!

nb also: If you find this article interesting PLS join our Facebook group - to link up with other readers, and to receive regular updates on new material.

see: http://www.facebook.com/group.php?gid=58243419565

Tristan Ewins

21/9/2011

Aurelien Mondon makes some interesting points in his recent article over at ABC’s ‘The Drum’ from 19^th September 2011.

In this article we will be considering the issues of ‘free speech’ and ‘neo-racism’ – both developed in Mondon’s piece..

To begin with a couple of select quotes, Mondon writes:

“What is interesting in today's so-called battle for freedom of speech is that it does not come from minorities who are oppressed. It comes from white (mostly male) 'radical' conservatives. The question is: why has the conservative right so suddenly decided to defend freedom of speech?”

And then with a heavy tone of irony:

“Of course, these writers and politicians would tell us, as Howard did, that it is because the left has imposed a political censorship and stifled debate. Indeed, everybody knows that the 70 per cent of the Australian media owned by Rupert Murdoch [Ed: in fact 70% of print media] has been unashamedly left-wing over the past decades, leaving little space to debate without an outright socialist bias.”

For the whole of Mondon’s article see here:

http://www.abc.net.au/unleashed/2906420.html?WT.mc_id=newsmail

Mondon is ‘spot on the money’ when he identifies the hypocrisy of so many on the Right – of effectively opposing media diversification, and so in effect opposing practical and meaningful pluralism – on the basis of ‘freedom of speech’.

Both Fairfax and NewsCorp are provoking unwarranted fear when it comes to the issue of censorship. Overwhelmingly – from Labor – there is talk of diversification and stemming undue concentration of ownership.

There is also talk of protecting personal privacy.

But while some from the Greens had considered more thorough-going regulation of content, even including licensing for newspapers, Labor’s response has been far more cautious, and Labor is not likely to bow to Greens pressure on this issue. See: http://greens.org.au/content/greens-move-inquiry-media-ownership-and-regulation-australia

Indeed – it is difficult to understand how some of the proposals put forward by the Greens ‘gained traction’ within that party in the first place. (Yes the Murdoch press has been conducting a blatant campaign against the Greens; but surely opposition to censorship is a ‘fundamental’…) Given the party’s location on the relative Left, the threat censorship has historically posed to the Left itself, and the possibility therefore of setting a dangerous precedent, one would have expected a more cautious approach on the part of the Greens as well.

But as we have considered at ‘Left Focus’ before, freedom of speech is a complex issue. In the context of a public sphere dominated by private wealth; where ‘cultural gate-keepers’ determine the bounds, terms and tenor of debate – ‘positive’ freedom of speech is limited. By this we mean the capacity of diverse and otherwise marginal voices to be included authentically in the mainstream.

Indeed, in Australia the public sphere is increasingly manipulated, insincere and exclusive . The dominance of the monopolists and their billions in the Australian mass media makes this increasingly so. And where public-owned media has in the past helped provide a counter-balance (eg: in the case of the ABC) conservatives have responded by enforcing their own notion of ‘balance’ - which in fact has undone the tendency towards meaningful and effective pluralism.

‘Freedom of speech’ as a ‘positive and enabling liberty’ ought to mean inclusive and participatory pluralism in the public sphere. Only the worst of extremes should be marginalised – for instance, Holocaust denial and race hatred. For some liberals, the Habermasian principle of the ‘Perfect Speech situation’ may serve as a guide. (although conflicting values and interests cannot necessarily be resolved by rational exchange)

Where wealth inhibits this, it is the duty of governments to intervene: not to censor – but to provide the means and support for the development of that inclusive, diverse and participatory public sphere. (including but not limited to online)

Tokenism or half-measures here are not sufficient. We need an inclusive and participatory mainstream: and robust public support for diversification towards this end. Ample public funds need be provided such that inclusive, democratic and participatory media challenge the existing mainstream meaningfully, comprehensively and deeply.

And again without censorship, principles of honourable journalism ought to be promoted. Publications which maintain the pretence of presenting opinions, events and policy authentically and inclusively ought attract robust and high-profile public criticism where they fail to live up to their own self-proclaimed standards.

These issues need to be considered in depth in the coming media review; and Labor would be well-advised to implement a robust policy - not just half-measures.

Returning to the Aurelien Mondon article, however: Toward the end of his commentary Mondon develops a concept which he calls ‘neo-racism’. This in of itself is a separate issue: but one no less worthy of criticism.

Specifically, Mondon argues:

“As opposed to crude biological racism, widely discarded after the Second World War and whose use remains political suicide, neo-racism is a lot harder to outright condemn, yet it is no less damaging to society, democracy and ... freedom of speech. Neo-racism does not rely on biological superiority or inferiority, or even any form of hierarchy. Instead, it states the incompatibility of cultures and the necessity to keep such cultures apart. Cultures are equal in their inability to cohabitate; therefore the neo-racist can even appear tolerant. Of course, the use of neo-racism, like the use of common racism, is always to the benefit of the powerful.” http://www.abc.net.au/unleashed/2906420.html?WT.mc_id=newsmail

Even in France today individual liberty is increasingly pressured by an assertive secularism. Properly, the rights of both secularists and faith communities ought to be protected in the context of liberal and democratic pluralism. Attempts to ‘ban the hijab’, for instance, themselves set a dangerous precedent – and abrogate the liberal rights of minorities. Some secularists may think of the hijab as a by-product of women’s oppression. But in a society where women are empowered to choose - not just legally but culturally - surely the right is that of the woman to decide for herself.

The same principle ought to apply to both socially conservative and liberal faith communities – which on the principle of voluntary and free association determine their own internal rules and doctrines.

But are all cultures compatible in all contexts and on any scale?; And should the contention they are not attract the tremendous stigma involved with the charge of ‘racism’?

Liberal democratic pluralism infers acceptance of difference: and of the right of individuals to move freely between voluntary associations. But has political liberalism the potential to become so open as to leave exposed its own roots?

Even in socialist Yugoslavia – where the principles of internationalism were openly and sincerely proclaimed for decades– ultimately there proceeded a degeneration into nationalist chauvinism, brutality, and the settling of historical vendettas. Even with the passage of decades conciliation had not been achieved. A more robust truth and reconciliation process over those decades may have been able to prevent this: but now we will never know. The point is that we ought not deny and be closed-minded about the risks.

Like socialist internationalism, liberal democratic pluralism is not incapable of being eroded or even uprooted. As socialists learned during the 1980s, history should not be seen inevitably as a ‘Forward March’. Political ideologies are also cultures; and that includes the nationalist-chauvinist political cultures of the far-right, including the religious far-right. Political Ideologies – including nationalist, ‘ethno-nationalist’ and religious varieties – as cultures – are not universally compatible: and to point to this is not to engage in racism. In fact – to ignore these forces could be to court disaster.

And on a brief partial-tangent: integrationism should not be considered to be the same as assimilation either. Every society needs a social contract including minimum assumptions regarding human rights and the rights and duties of citizenship. (including personal liberty and at least a minimum of social solidarity) And this cannot work if not invigorated by communication and exchange made possible by common language and social engagement.

But yes: Mondon is correct to infer that these debates will be exploited by the powerful. During the 1980s the West supported the Mujahideen against the Soviets in Afghanistan for geo-strategic purposes: ostensibly against tyranny. But today the West is again involved with a war in Afghanistan for geo-strategic purposes – legitimised by some as being for the sake of the rights of women.

And by the same token unfair and warped cultural prejudice can be deployed cynically to justify policies of colonialism and imperialism. Perhaps this is the reality Mondon is alluding to; but nonetheless it does not follow that all cultures are compatible in all contexts.

Let us maintain the principles of liberal democratic pluralism, including a meaningfully participatory, inclusive and authentic public sphere. But let us also be aware of the dangers. Liberal pluralism (and tolerant/harmonious multiculturalism) is not necessarily eternal and unassailable. The future depends upon the political and cultural choices we make now.

Tristan Ewins

This author has also considered issues of culture and nationalism in-depth before

So also see:

http://leftfocus.blogspot.com/2009/02/multiculturalism-and-false-lure-of.html

http://leftfocus.blogspot.com/2010/01/australia-day-2010-celebration-and.html

http://www.onlineopinion.com.au/view.asp?article=4944

Media Bias Systemic and Rife

2011-09-04T17:16:00.011+10:00

above: Rupert Murdoch- Absolute Power?

In this new article Tristan Ewins holds that Australia's monopoly media is widely encouraging fear and resentment of refugees to create a 'wedge' against Labor. Change is needed to genuinely promote the principles of inclusive and democratic pluralism in the Australian public sphere. A media-democratisation fund - equally empowering all Australian citizens - could be part of this picture...

nb also: If you find this article interesting PLS join our Facebook group - to link up with other readers, and to receive regular updates on new material.

see: http://www.facebook.com/group.php?gid=58243419565

Tristan Ewins, September 4, 2011

Reading Melbourne’s ‘Herald-Sun’ today this author was reminded of just how far the Murdoch media (and other media interests) have been willing to descend in order to destabilise the Federal Labor government in Australia.

The underlying implication is that those who wield real cultural power in this country by virtue of outrageous wealth will not tolerate Labor governments that attempt to introduce real Labor policies: that actually behave like real Labor governments.

Labor is expected, ultimately, to ‘get the message’, ‘fall into line’ and then somehow we can continue with the charade of supposedly liberal democratic pluralism.

Most commonly the behaviour of Australia’s right-populist monopoly media has involved the cultivation of anger, fear, resentment and intolerance via various shades of spin, and sometimes outright lies.

One core aim of this policy has been to fatally undermine Labor’s core working class electoral base.

The means to achieve this include monopolisation of the print media market in Australia (approx 70% of the market is controlled by NewsCorp/Murdoch); a monopoly of the dominant tabloid market in many Australian states; and the dominance of broadcast media by concentrated interests willing to abuse their control to promote their agendas.

As this author has already noted on occasion: mildly redistributive elements of the proposed carbon tax have been consistently and repeatedly reviled as ‘class war’ in the Herald-Sun. Individuals on well over $100,000 a year have been portrayed as ‘working class battlers’; and the government’s policies ‘an assault on aspiration’.

Apparently, however, the flattening of tax scales, deregulation of the labour market, assaults on trade unions, and the dual phenomena of privatisation and user-pays – which see wealth redistributed from ‘battlers’ to the wealthy - ‘do not count as class war’ for the Herald-Sun, Daily Telegraph – and other vehicles of Murdoch propaganda.

Furthermore, the fiction of the ‘burden’ of any carbon tax is repeated like a mantra in the right-populist monopoly media; with rarely any recognition that the vast majority of revenue is pegged to be returned in one form or another to trade-exposed industry, to taxpayers, to consumers. The writers who beat up fear in this regard know very well the fiction they propagate: but apparently they are without conscience.

And today, on September 4^th 2011, there were another two prime examples of propaganda ‘Murdoch-style’ on pages 1, 8 and 9.

One headline proclaimed “Flying into Rage grounds refugees”.

Much of the monopoly media in Australia – in tandem with the Conservative parties – and especially Tony Abbott himself - has striven to dehumanise and vilify refugees.

Again the intent has been to create a ‘wedge’ against Labor.

The monetary costs of detention, and on one occasion the cost of flying refugees to the funerals of their family members (after the Christmas Island shipwreck tragedy) have been portrayed as a ‘burden upon the taxpayer’. (not for a moment is recognition of their basic humanity allowed, with the sympathy this might engender) And in today’s Melbourne Herald-Sun refugees who have been incarcerated in intolerable conditions – often for several years – were once more portrayed as ‘violent’.

And yet there has been precious little mention of the violence of incarceration which has driven so many detainees to the point of self-harm – and on many occasions now even to suicide. Rarely ever is the question put seriously: In a country of well over 20 million what ‘cultural threat’ are a few thousand refugees supposed to pose?

Whatever flaws there have been in Labor’s asylum-seeker policies (and there have been many): so much of the monopoly media have chosen to portray the High Court’s recent decision on offshore processing as ‘yet another’ confirmation of the government’s ‘incompetence’; its ‘loss of authority’; its ‘instability’ – and as further cause for an early election.

These themes have been systematically emphasised - again and again - by the likes of Andrew Bolt and Miranda Devine as a part of a deliberate tactic of destabilisation. No doubt this has comprised part of a broader strategy by this country’s dominant media ‘billionaire puppet-masters’: Murdoch, Reinhart, Packer and others. Such that Australia’s media is increasingly characterised by the kind of blatant abuse many thought only occurred in Italy at the hands of Silvio Berlusconi.

Underscoring this assumption: there has been precious little focus upon the accompanying consequence of the High Court’s recent decision that the legality of the Conservatives’ migration policies – and their long history of offshore incarceration and processing – is ALSO seriously in doubt.

And outrageously: much of the right-populist monopoly media has tried to ‘play the refugee issue from both sides’ – painting ‘desert wasteland’ Nauru incarceration as the more ‘humane’ policy – with Shadow Immigration spokesperson Scott Morrison posing as the ‘staunch defender of human rights.’

Another Herald-Sun Article today (4/9/11, pp 8-9) epitomised the ‘quality’ of tabloid journalism in this country. The article was presented under two titles: ‘Rudd’s Ambush’ and ‘One Moon, Two Fallen stars’.

To begin, the authors emphasised the “dysfunctional state of the federal Labor Party”, reiterating the ‘official’ line intended to wear down confidence in Labor, and erode Labor’s core base -via ‘cultural attrition’ over the long term; and promote instability.

This attempt at ‘spin’ was further emphasised with another suggestion that Kevin Rudd may be intending ‘another tilt’ at the Labor leadership; and with the contention that separate meetings between Rudd and Gillard with UN Secretary General Ban-Ki Moon were ‘unusual’. In reality such separate meetings might be considered ‘routine’; but nonetheless the ‘angle’ was played for all it was worth.

That said: again the Herald-Sun attempted to ‘cover its bases’. With some of the media having been willing to suggest the viability of a Rudd leadership-challenge to ‘revive’ Labor’s fortunes – but only so far as to create instability in the current context - again now the authors attempted also to prepare the ground to meet any such ‘new threat’. While such rumours are intended to destabilise, Rudd himself ‘would ultimately have to be dealt with’ were they ever to ‘come to fruition’.

Hence the quote printed from ALP parliamentarian Michael Danby that Rudd is “seemingly devoid of any lightness or humour”; and from other ‘sources’ that “there is…loathing at the prospect of Mr Rudd’s return” and “fear he could seek revenge.”

Finally: a brief and isolated quote from Gillard was represented in an attempt to maintain the fiction of balance and inclusiveness:

“Every day between now and then I will be fighting for Labor values, for the things I believe in, for jobs, for education, for opportunity.”

But as usual this is but a ploy on the part of the Herald-Sun: which includes pretty much every day articles full-to-the-brim with prejudice, misrepresentation and spin: but with a token sentence or two at the conclusion of their articles – to maintain credibility as ‘serious journalism’. The token nature of such quotes is reinforced by the failure of Herald-Sun journalists to develop them fully: such that they could be interpreted and read as substantial and convincing perspectives.

So what should Labor conclude from all this?

To begin Labor needs itself to recognise the increasing tendency that liberal pluralism in this country is becoming nothing but a convenient legitimising fiction. As is the accompanying fiction that billionaire media proprietors ‘do not intervene’ in the editorial policies of their ‘assets’.

Just as when - for whatever reason - Channel Ten seemed to be ‘going against the trend’ - adopting a moderately and relatively leftist profile – multi-billionaires Murdoch, Reinhart and Packer intervened. Almost overnight the political profile of the network began to change. Right-populist writer Andrew Bolt was given his own program; and employed regularly in other contexts as a political and social commentator. While direct intervention has not been proven surely it seems a credible supposition.

The direct cultural power of big capital was also underscored by the earlier scuttling of the original ‘Rudd era’ ‘Resource Super-Profits Tax’ (RSPT); assaulted by a massive media propaganda campaign by the mining giants to destroy the policy and ‘send a clear message to Labor.’ Somehow the threat of an investment strike has been internalised alongside the fiction of liberal and democratic pluralism – despite the fact that the one is in contradiction with the other.

The original Resource Super-Profits Tax could have rectified this nation’s “two speed economy”; diverting some windfall mining profits (from the natural resources belonging to all Australians) to bolster superannuation, and support manufacturing, tourism and education. This at a time when a high Australian dollar is ‘supercharging’ mining industry profits; but undermining other exports. (that is, industries that between them employ many times more people than the mining industry)

At the time other areas of industry would not break the ‘united front of capital’ against any impositions; but surely the crisis is now so pronounced that this must again be questioned.

In the face of such abuses for Labor the challenge is to turn the fiction of liberal and democratic pluralism in Australia’s public sphere into a reality.

Attempts to promote media-diversification would no-doubt be (ironically) depicted as ‘assaults on free speech’. But the tendency towards monopolisation in Australian media – and the abuse of that power - is itself an assault upon the inclusiveness of our public sphere. And such inclusiveness is itself a precondition for genuine democracy.

Labor has nothing to lose at this point by going ahead with a full media enquiry.

But in the process the government must be careful not to reproduce the same kind of abuses as those they would be seeking to challenge. Rules regarding “fit and proper” people to own media could set a dangerous precedent. Today the power of wealth contracts and shackles the public sphere: backed by state recognition and enforcement of the ‘rights’ that accompany wealth. But EXCESSIVE or inappropriate state regulation of media could also set a dangerous precedent which could ‘come back to haunt’ the Left; providing a pretext for ideological censorship.

The aim of a media diversification policy ought to be the creation of an inclusive and pluralist public sphere. This is not compatible with the domination of the industry by a handful of billionaire puppet-masters. Nor is it compatible with the monopolisation of sectors of the industry – for instance the tabloid market in Melbourne where the Herald-Sun has no real competition. (and in the broader market has a readership of about 1.5 million as compared with ‘The Age’ with a “Monday to Friday readership average of 668,000” – source: Wikipedia)

Cross-ownership laws need to be tightened and effective monopolies broken up.

Certainly that would be a start.

We need at least two major players in every significant market: effectively representing a wide and inclusive spectrum of viewpoints. This includes more specialised markets: for instance whether we speak of tabloids or broadsheets.

But we need a more pro-active policy as well.

To that end: a ‘media-democratisation fund’ could be a visionary solution to the question of representative and inclusive media in this country.

A fund – perhaps $5 billion to begin at a very rough estimate– could be established and then distributed equally in the form of non-tradeable shares – to all eligible Australian voters regardless of personal wealth. (ie: as a right of citizenship) Shareholders would then be encouraged – and a framework established – for them to organise their investments collectively, equally and democratically in new media intended to create genuine diversity and inclusion of perspectives and viewpoints.

All profits would be returned to the scheme to be reinvested: the motive being diversification and inclusiveness – not private financial gain. This would not be an effective expansion of the state sector, however: as all citizens would have individual rights to determine their investments as equal and private shareholders.

But to achieve the end of real and effective diversification – a real shift of cultural power – and in favour of diversity and inclusion - the scheme would need to apply in the billions - or at least hundreds of millions. A ‘token’ scheme would not achieve that. (Pls note again, though: I am providing only very rough estimates here as the author does not have access to such modelling as to accurately determine what would be necessary)

Maintaining and bolstering existing public media such as ABC and SBS undertakings: and ensuring a genuinely pluralist, participatory and inclusive outlook in these – would also serve these crucial ends.

If we’re serious about liberal pluralism: about democracy and inclusion – the time has come for change.

Rethinking Marx, the market and Hayek

2011-08-23T16:25:00.000+10:00

Above: David McKnight

In this article David McKnight takes another look at Eric Aarons's analysis of the work and belief systems of Karl Marx and Friedrich Hayek; McKnight was a long-time member of the Communist Party of Australia; but more recently has promoted an agenda which - in is own words - attempts to venture 'Beyond Right and Left'. This article will also be published at a dedicated website on 'Hayek versus Marx'; and an earlier review - written by the blog publisher Tristan Ewins - can also be found here:

See: http://hayekversusmarx.blogspot.com/2011/07/responding-to-eric-aarons-hayek-versus.html

By David McKnight*

Most people who reach 90 years of age would be enjoying their retirement, perhaps reminiscing, probably relaxing. Instead, veteran political activist Eric Aarons has spent the last five years researching the conservative philosopher and economist Friedrich Hayek and re-reading Karl Marx. While Marx is familiar to many people, Hayek is less well known. Yet Hayek’s ideas have provided the intellectual foundation for the neo-liberal Right which has been so globally influential for the last 30 years. In Australia Hayek’s influence is now better known thanks to Kevin Rudd’s various essays attacking neo-liberalism. Occasionally, Hayek is discussed and defended in the columns of The Australian.

Eric Aarons’ reason for researching these two towering figures has been to produce a substantial book Hayek vs Marx which not only explores their work but also suggests vital theoretical tools to deal with today’s challenges. The central challenge facing the world, he argues, is climate change but this is merely the earliest manifestation of a profound crisis of sustainability for a planet with seven billion people and growing.

His book, produced by a major British publisher, appears at an auspicious time. The free market and the dogma of deregulation have been discredited, and in the mass media there has been talk of ‘the crisis of capitalism’ and references to Marx. As a consequence of the global financial crisis many hope that the radical decline of the left will now go into reverse. Eric Aarons doesn’t comment on such hopes but it is clear that he thinks that a profound theoretical re-thinking is necessary rather than any movement ‘back to Marx’.

In some ways the book’s title is misleading. The framework of ‘Hayek versus Marx’ suggests that the author (and readers) will fall on one side or the other. In Eric Aarons’ view, both thinkers have deep flaws in their theories as well as valuable insights. The great strength of Hayek was to explain why market mechanisms have virtues which are indispensable in a complex economy and society. He saw markets as a device for the rapid sending of information via prices through a network. On this level, compared to alternatives such as a central planning, they are useful and flexible devices for signaling to producers what their buyers wanted and in what quantity. On this insight Hayek erected a vast intellectual system in which all other social, moral and cultural values had to be subordinated or discarded in favour the market and its central value: freedom.

Marx’s great strength was something about which Marx himself said little but which imbued all his writing. Marx’s ethical values lead him to see the extraordinary injustices that flowed from inequalities of wealth and the 19^th century system of industry. Yet these values are buried within his work and instead Marx tried to erect a scientific theory of social development and to discover the laws of history.

The flaws in Marx’s world view were not simply wrong predictions but go deeply to his methodology. Marx argued in Capital that history changed according to ‘natural laws’ and tendencies which worked ‘with iron necessity towards inevitable results’. On this basis he predicted the immiserisation of the working class. The labour theory of value and his concept of the falling rate of profit have also been shown to simply be wrong, according to Eric Aarons.

Hayek’s methodology is also flawed. Hayek posited the existence of sets of rules which, if followed by societies, enabled them to flourish. As Eric Aarons points out Hayek never simply and clearly identified these rules but they tend to be those commercially based rules which allow markets to function with little restraint. Interference to shape the spontaneous evolution of markets thus becomes the philosophical equivalent of sacrilegious acts ‘against nature’.

Hayek’s proof of this idea was to assert that it was analogous to Darwinian evolution through natural selection. One of the consequences of this approach is that if society has ‘evolved’ then it becomes meaningless to talk about whether that social order is just or unjust; it simply is. Hence one of Hayek’s pet hates -- the notion of ‘social justice’. But as Aarons says this is pure assertion and not backed by any factual evidence.

As his introduction suggests, this book represents the latest stage of a personal quest that began in the early 1970s when Eric Aarons realized that the theoretical apparatus inherited from Marx and Lenin was inadequate and flawed. His conclusions about these flaws are remarkable considering that he was a leading figure for decades in the Communist Party of Australia. Today his commitment is to rethinking a social philosophy in which traditional Left concerns find a place within a framework dominated by the political need to forestall an impending ecological crisis.

Like a number of other contemporary thinkers Eric Aarons also sees the need to discuss questions such as: what does it mean to be human, and is there a human nature. These take us back to the long time span before capitalism, indeed back to the evolution of humans from more ape-like creatures. And then to varieties of human society from the hunter gatherer society to agricultural and to modern industrial society. Like the philosopher Peter Singer, Eric Aarons rejects the widespread Marxist view that no human nature exists and that humans behavior, needs and outlook are entirely formed by their social and cultural circumstances. Such assumptions, apart from being factually wrong, he argues, fed the mistaken belief that a perfect economic system could lead to a perfect society.

The central assumption of the book is that relevant and useful theories arise from the problems posed by the objective circumstances. That expresses it rather formally. But what it means is that just as Marx responded to the objective circumstances of cataclysmic changes wrought by industrial capitalism, so we must now develop new theories in the face of the slow but relentless crisis developing around climate and sustainability. This is not to ignore the enormous concentration of wealth and the social power it brings but to acknowledge that the struggle for social equality will take place within a framework dictated by the ecological crisis.

The scope of the book is sometimes frustratingly limited. As Eric Aarons says, neither Marx nor Hayek had a developed notion of politics and both minimised its importance. Democracy was barely mentioned by either of them. This is something which will strike even adherents as surprising even staggering. Yet to understand the implications of this absence in their theories requires deeper discussion of what occurred when Marxists and neo-liberals actually gained government. Also useful would have been references to the debate on the strengths and flaws of Marx’s ideas that emerged when the Left revived in the 1970s and 80s. A whole generation of Left intellectuals revived Marxism but then abandoned it in favour of other radical analyses of oppression, racism and sexism. Addressing this experience may have gained significant readers for the book.

The book takes up a number of themes which Eric Aarons has explored in recent years. One of the centrality of values and morality as the foundation of a progressive world view. The significance of this is that it implies that a comprehensive ‘theory of everything’ is not the foundation. Trying to ground a radical analysis in yet another creative revision of Marxism is a road to nowhere. That may sound obvious but all over the world such attempts are being made and most are not even creative re-thinkings of Marxism but rather the re-affirmation of eternal truths said to be found in orthodox Marxism.

Eric Aaron’s own view that so far, no ‘internally coherent and viable alterative to capitalist society’ has yet been found. He believes that the single most important step ‘is for every society to reverse the priority capitalism gives to individual material betterment and gain and give that priority instead to social needs’.

--------------------

David McKnight works at the Arts Faculty at the University of New South Wales. He is the author of Beyond Right and Left: New Politics and the Culture War. He can be reached on d.mcknight@unsw.edu.au

Hayek vs. Marx and today’s challenges

Routledge, London and New York, 2009.

above: Eric Aarons's 'Hayek versus Marx'

Critical Review of "Hayek versus Marx - and today's challenges' by Eric Aarons

2011-07-24T13:02:00.000+10:00

above: An image of Eric Aarons, who is also a dedicated sculpture artist

Tristan Ewins, the publisher of this blog, has just self-published a critical review of Eric Aarons' book 'Hayek versus Marx - and today's challenges'. The essay is very long - but the topic matter is very substantial and varied - so warrants it I think. I'm hoping to attract readers and debate with this article - so looking forward to hearing from you. The introduction - and a link to the full article (at a separate page) are below...

see: http://hayekversusmarx.blogspot.com/2011/07/responding-to-eric-aarons-hayek-versus.html

24/07/11

"Hayek versus Marx" is the culmination of over a decade of study - and a lifetime of practical experience. Eric Aarons - the former National Secretary of the Communist Party of Australia - and the author of several important books - has taken upon himself an imposing task. This task is that of interrogating the work of Hayek and Marx rigorously and open-mindedly: taking from each, exposing each to searching criticism, and ultimately urging a new social, economic and political paradigm.

Considering in depth the life's work of both these giants of social theory, Aarons urges what is ultimately a synthesis of socialism and economic liberalism. While recognising the necessity of markets and competition; the author is also insistent of the indispensability of co-operation, the struggle against alienation, and the fight for economic empowerment and social justice.

Firstly, we will summarise Aarons' account of Hayek. From there we will consider his account of Marx. Thereafter we will consider both the ideas of Marx and Hayek in further depth, and in light of Aarons' own ideas and criticisms.

In the process, we will consider such themes as economic democracy, alienation, markets and planning, and the 'clash' of free markets and nature.

To conclude we will consider the consequences of Aarons's analysis and conclusions for a Left that has been grappling with its very identity, and its core values since the collapse of "really-existing socialism".

Again: For the rest of this article see:

http://hayekversusmarx.blogspot.com/2011/07/responding-to-eric-aarons-hayek-versus.html

Carbon Tax Package finally Unveiled

2011-07-12T13:17:00.008+10:00

above: Julia Gillard announcing the government's Carbon Tax package

Julia Gillard's Carbon Tax package has suffered a very critical reception despite extensive compensation for trade-exposed industry and low-middle income households. So how will the tax work to reduce emissions? And what are we to make of charges of 'redistribution' made by Abbott and others? In any case - is 'redistribution' such a bad thing?

nb also: If you find this article interesting PLS join our Facebook group - to link up with other readers, and to receive regular updates on new material.

see: http://www.facebook.com/group.php?gid=58243419565

Tristan Ewins

12/7/2011

In the face of an almost all-pervasive fear campaign, what is the truth concerning Gillard Labor’s carbon tax? How will it really be implemented? Who will it affect – and how? Can it succeed in its object of restructuring the economy? Does it involve elements of economic redistribution; and if it does, is that necessarily a bad thing?

According to ‘The Age’ (11/7) The Gillard government’s carbon tax will provide “tax cuts for those on incomes under $80,000” leaving “6 million households better off or fully compensated.”

Peter Martin has noted how “for more modest earners, the benefits are large: $626 a year for a single earner on $20,000; $1226 for a dual-income couple with two children on $75,000.”

(see: http://www.theage.com.au/environment/climate-change/cuts-for-everyone-but-some-worse-off-20110710-1h8zv.html#ixzz1RmjetGLR )

Some of this compensation will be provided for by a restructuring of the tax system.

For instance; the tax-free threshold will be “more than trebled to $18,200”. And individual pensioners will receive compensation of up to $338 a year; with up to $510 for couples.

Furthermore: $9.2 billion will be provided in the form of business compensation over a three year period – aimed largely at trade-exposed industries

But “more than three million households” – those on the highest incomes - will lose out to some degree. Some will only be partly compensated. Around “one in ten” – the wealthiest of all - will receive nothing. (‘The Age’, 11/7, p 1)

The most intensely affected areas of the economy will be energy generation and distribution.

Again, Peter Martin has noted how:

“From mid-next year, the price of electricity will rise a further 10 per cent as a result of the carbon tax and the price of gas a further 9 per cent.”

But:

“The price of food is expected scarcely to move, advancing less than one-half of 1 per cent.”

(Read more: http://www.theage.com.au/environment/climate-change/cuts-for-everyone-but-some-worse-off-20110710-1h8zv.html#ixzz1Rmkguly2 )

The response from the Conservative side of politics was predictable. Tony Abbott argued:

“[This is] socialism masquerading as environmentalism… This is redistribution pretending to be compensation. It’s a tax increase pretending to be an environmental policy.” (‘The Age’, 11/7/11, p 1)

And in the Herald-Sun in Melbourne reporter Steve Lewis seemed to be echoing Abbott by referring to tax cuts for struggling lower-income workers as a “classic ‘soak the rich’ Labor program.” (11/7, p 7)

In assessing the government’s policy it is best to respond to the claims of critics directly.

But to begin we should first return to basics: and that is recognising the virtual consensus in the global scientific community that global warming is real, and that carbon emissions by human beings contributes to this.

So to what extent will the carbon tax and associated programs add up to a reduction in emissions?

The carbon tax will give a strong market signal for both investors and consumers to reduce emissions however practicably possible. Indeed, Prime Minister Gillard has stated that this will result in:

“a reduction in carbon pollution of 160 million tonnes by 2020. [That’s] the equivalent of taking 45 million cars off the road.'” (See: http://www.skynews.com.au/topstories/article.aspx?id=636042&vId= )

Businesses will seek energy-saving measures, while households will do likewise – and also consider investment in renewable energy. Indeed, there could well be a boom in the micro-renewable energy sector. Overwhelmingly this will occur without financial pain for middle and low income households - as with compensation the main aim is to provide the market with a ‘price signal’ and not to raise revenue.

Meanwhile a “$2 billion-a-year Clean Energy Finance Corporation” will drive investment for research and development of clean energy technologies. In this field Australia stands to become a genuine ‘world leader’. ( see: http://www.theage.com.au/opinion/politics/gillard-makes-tentative-steps-towards-a-greener-cleaner-future-20110710-1h8zu.html )

Finally, Adam Morton from ‘The Age’ has noted how

“some carbon tax revenue will also be spent buying out and shutting down about 2000 megawatts of coal power, most likely either the Hazelwood or Yallourn power plant in the Latrobe Valley, plus the smaller Playford station in South Australia.” (See: http://www.theage.com.au/opinion/politics/gillard-makes-tentative-steps-towards-a-greener-cleaner-future-20110710-1h8zu.html#ixzz1Rmn33ELS )

Morton has also observed how:: “the money to shut the plants will be from tax revenue paid by ''big polluters'', not budget cuts that reduce services.” (See: http://www.theage.com.au/opinion/politics/gillard-makes-tentative-steps-towards-a-greener-cleaner-future-20110710-1h8zu.html#ixzz1Rmn33ELS )

This is absolutely crucial because Tony Abbott has committed to expensive forms of “direct action” on climate change running into billions and billions - which would be paid for through savings elsewhere in the Budget. Refusing to submit his proposals to Treasury for costing, Abbott must nonetheless be aware that his proposed initiatives could not be funded simply through “efficiencies”. They would inevitably involve austerity measures. Perhaps these would apply in health and education; or perhaps through further privatisation of roads and imposition of flat ‘user-pays’ tolls - for which working class Australians would pay.

So before we even begin to address accusations of “socialist redistribution” we need to observe that price signals and direct intervention will make significant inroads into

Australia

’s carbon emissions, and as such is well-justified on environmental grounds alone.

That said, however, Abbott and right-populist elements of the media are raising alarm at the prospect of even mild redistribution via the chosen structures for compensation via direct payments and restructure of the tax system.

In Melbourne on July 11th the Herald-Sun alone ran the headline ‘Kick in the Teeth for Hard Workers’ referring to a family on a combined annual income of around $130,000. Another article in the same Herald-Sun supplement concerned ‘Sparkie’ (ie: electrician), Luke Peterson, who earns $150,000 - with his partner remaining at home to raise their children. In this instance the headline ran: “ ‘Punished’ for wife staying at home with kids’.”

Like several previous articles in the ‘Herald-Sun’ accusing Gillard Labor of ‘Class War’, these articles attempted at the same time to portray higher income groups as ‘average working Australians’ being ‘punished’ for effort. Indeed the term ‘Sparkie’ could be interpreted as a colloquialism inferring working class status.

But both the households considered in the Herald-Sun articles concerned would occupy a position in at least the top 20% of household incomes. A single-income household with one income-earner bringing in a $150,000/year income would not be considered by most as ‘working class’ – colloquialisms aside. Indeed, in this day and age few households servicing a mortgage and raising a family can afford for one partner to remain at home.

This raises the question that if action must be taken on climate change, how should we balance the burden? The principle concerned could also be extended to other necessities: for instance, provision of health care, education, aged care, social housing, welfare and infrastructure.

Many Australians work hard for comparatively little return compared to the Herald-Sun’s chosen examples. There are some dual-income households – with members employed in cleaning, retail, childcare, hospitality, textiles, and manufacturing – who bring in barely $50,000 before tax. To speak of ‘punishment for effort’ for higher income households, and yet to prefer putting a disproportionate burden upon these families - would be revealing of the priorities and values of those concerned.

In the labour market scarce skills usually bring in greater return, but many of these lower income individuals and households work under unpleasant and alienating circumstances – and with sometimes inconvenient or onerous hours. In

Australia

, also, there is a recent history of falling minimum wages being compounded by housing market stress, past regressive restructure of tax, and increased energy costs as a consequence of privatisation. It is not at all radical – or necessarily ‘socialist’ – to support a degree of redistribution to compensate those Australian workers and pensioners affected by these trends.

And while there has to be reward to give incentive for workers to acquire skills, other ‘middle income’, ‘average’ individuals and households also deserve a ‘fair go’. A worker on a wage of, say, $50,000/year should not be paying the same kind of tax as a worker on $150,000/year. Under circumstances where both workers were applying themselves with comparable levels of effort and effective sacrifice, skill differentials alone do not justify massive discrepancies in income.

Finally there are the truly vulnerable: those who are unable to work as a consequence of illness or disability. Or those who have worked all their lives and deserve a peaceful and fulfilling retirement. And to this we could add the unemployed: those who overwhelmingly are searching for work – and are subject to harsh active labour market provisions – but who need our assistance to ‘keep their heads above water’ and avoid social disengagement and isolation during the interim. (such isolation can provide a ‘self-fulfilling prophecy’ of long-term unemployment)

A progressive taxation system is therefore well justified in moderating discrepancies of income which are unjust, and ensuring universal access to social necessities . And the tax system more broadly is justified in providing best-value ‘collective consumption’ of essential social services from which most Australians benefit. Again: whether we speak of health, education, aged care, social security, social housing or other infrastructure – often these are provided more fairly and more efficiently via the ‘social wage’ than would be the case if ‘left to the market’.

Such principles have historically been acceptable to a variety of ideological perspectives – whether we speak, here, of liberalism, or of social democracy, or indeed of socialism. It is only at the extremes propagated by the likes of Hayek and Rand – that the principles of progressive taxation, the welfare state and the social wage – have been rejected sweepingly. But such is the ideology which ‘has a grip’ on some parts of the Liberal Party of Australia today. It is an ideology which threatens the ‘Americanisation’ of Australian society, with greater extremes of poverty, and a lack of basic social solidarity. And it is an ideology that needs to be criticised explicitly by Labor.

All this said, there are dangers for Labor. In regions such as the LaTrobe Valley in Victoria there are well-grounded fears that the shift to renewable energy will ultimately cost jobs in coal-fired energy, and as a consequent will destroy many ‘flow on’ jobs which use that industry as their economic base. Hazelwood power station is very likely to find its operations scaled back.

According to ‘The Age’ Greg Combet has announced that the LaTrobe Valley alone will receive “a $200 million package over seven years for ''strongly affected'' regions, with help in training and diversifying.” But in the same article Electrical Trades Union state secretary Dean Mighell is quoted as arguing more needs to be done to create local jobs. This begs the question of whether government ought ‘get its hands dirty’ with more direct industry policies – reforging the ‘economic base’ in the LaTrobe valley and other affected regions – which would ‘flow on’ in maintaining thousands of other ‘peripheral’ jobs.

(See: http://www.theage.com.au/environment/climate-change/brown-coal-cloud-of-doubt-hangs-over-latrobe-valley-20110710-1h8zg.html#ixzz1RnEZ7q9D)

And in another concern, the Financial Review has reported an impending $4 billion ‘budget toll’ over the next four years in order to pay for industry and household compensation. Labor is flagging its intent to make ‘savings’ in order to reach its projected surplus for 2013, but had already been struggling to find savings for 2011-12 without impacting on crucial programs and initiatives.

(See:http://www.financialreview.com.au/p/national/gillard_carbon_blueprint_gfV7V7WexwrES8lrl47yaI )

Between now and the next Federal Budget, therefore, progressive forces across the factional divide in Labor need to build momentum behind an alternative response for the government to this shortfall. Importantly, Labor has the choice of revising its party platform in December to open the way for a moderately increased tax take as a proportion of GDP.

Such a decision could be followed with modest tax reform to the extent necessary to avoid austerity, or to the extent necessary to fund a bold package of initiatives addressing what is seen in this country as a ‘cost of living crisis.’ This would also attract the charge of ‘redistribution’, but there is the potential that by improving the circumstances of average Australian families this is a debate Labor could well win. Indeed, that could properly be the object of an article in of itself.

A ‘National Disability Insurance Scheme’ is another potential choice for Labor in seizing the initiative and delivering on a reform agenda – but would also need to be backed by tax reform and increased revenue. That would be another reform Abbott would find very difficult to undo.

One option in this context could be a 1 per cent increase in Company Tax – which would still leave

Australia

way short of Company Tax rates in the

United States

. Another option could be a modest reduction in dividend imputation to 75%.

In conclusion, Labor has a long way to go in convincing voters of the merits of this carbon tax package. What is interesting is that Gillard’s carbon tax package is very similar in its dimensions to the earlier proposed Emissions Trading Scheme. But what is notably different is the word ‘tax’.

The fear campaign spread in the right-populist monopoly media has found its mark. And many Australians are angry that Gillard is exceeding her mandate in this way – despite the fact she has had no choice in the context of minority government.

This will only change once the package is implemented and most people see for themselves they are no worse off. Most Australians will only pay with the costs of structural adjustment being passed on over the very long term. We talk here of large-scale future investment in renewable energy. But the same could be said with Abbott’s ‘direct action’ – where the costs of industry adjustment could be paid for with direct subsidies from tax-payers: paid for via sweeping austerity.

And yet we all should be willing to make small sacrifices in fighting climate change – for the sake of our planet, and for the sake of our children. If all comparable nations also refused to take action the effect would be to cripple the global movement to address this crisis.

But by putting implementation off until mid-next year Labor is giving time for fear and anger to fester. All those political, environmental, industrial and social movements which support the policy therefore need to begin a mobilisation immediately if the situation is to be saved. An information campaign involving all these movements needs to begin, even including advertisements and letter-boxing – as surely as if the election were this year.

Double Standards when its comes to talk of ‘Class War’

2011-06-26T11:54:00.007+10:00

above: Prime Minister Julia Gillard

Increasingly - in the Murdoch press especially - there has been talk of 'class war' in response to even modest proposals for progressive economic redistribution. But redistribution against the interests of the disadvantaged and ordinary struggling workers has been going on for decades; intensifying under Liberal governments. In this article Tristan Ewins works to illustrate that point, showing such examples as the increasingly regressive tax mix, and falling minimum wages. Ewins argues for Gillard Labor to be brave in pursuing distributive justice for the disadvantaged, and orindary struggling Australian workers.

Tristan Ewins

June 26th 2011

In a column appearing in both the Herald-Sun and The Daily Telegraph recently Miranda Devine has had another go at Julia Gillard and the carbon tax.

Condemning Gillard and the proposed tax, she characterises it as:

“Wealth redistribution, pure and simple. A year on, there’s no secret what Gillard stands for. It’s just no one can believe it.” http://blogs.news.com.au/dailytelegraph/mirandadevine/index.php

And this isn’t the first time Miranda Devine has used such language either.

For instance in the Herald-Sun on May 12^th 2011 she beats up the spectre of “class war taxes” in response to Labor’s Budget. ( see: http://www.heraldsun.com.au/news/special-reports/federal-budget-2011/story-fn8melax-1226054252544 )

In response:

Briefly, the main aim of the carbon tax is to create market signals to drive changes in investor and consumer behaviour: to do our part (as all nations must) in reducing emissions .

But that established: it is possible that modest distributive goals could be pursued as a by-product of overcompensation. And why not?

This brief article will consider inequality, redistribution and the double-standards at play with language of ‘class war’ which has been so common recently.

It’s interesting, isn’t it, how attempts to tax the wealthy and relatively wealthy – to give a fair go for ordinary workers and the poor; or improve the wages and conditions of the most disadvantaged workers – is labelled “class war” in the right-populist monopoly media. And yet all these years that

Australia

has been drifting towards greater polarisation of wealth and income, and greater disadvantage for the poor: this has not aroused the same kind of ‘outrage’.

The wage share of the economy has been falling for decades; with an accompanying intensification of the rate of exploitation.

Larvatus Prodeo reported this year that the wages share of national income was at its lowest level since 1964; slightly over 52%. And to be fair the wage-share of the Australian economy had been contracting for decades under both Labor and Liberal governments; as the leadership of both parties accepted the notion that wages need be depressed to restore profitability.

See: http://larvatusprodeo.net/2011/01/06/labour-market-myth-busting/] ; And: http://mattcowgill.wordpress.com/2011/01/03/the-state-of-the-labour-market/

Yet if structural forces in the capitalist economic system were driving these changes; why then were workers not at least duly and properly compensated with collective capital share?

Even under Hawke in the 1980s, celebrated increases in the ‘social wage’ came in the form of tax cuts; and so necessarily led to a smaller pool of funds for welfare and services. A veritable ‘double-edged sword’.

But there is more.

Under both Labor and Liberal governments – but especially under the Conservatives - the ‘tax mix’ has been restructured as to be less progressive. Income tax had been gradually ‘flattened’. Dividend imputation has reduced the proportionate tax burden of the wealthy; and the GST in taxing consumption has affected the poor disproportionately. Accompanying compensation for lower-income demographics, here, was largely neutralised by regressive restructuring of the tax and welfare mix elsewhere.

Meanwhile, concessions and incentives in superannuation for the relatively wealthy and the outright wealthy have come at the cost of potential social programs in health, education, aged care, infrastructure and welfare.

Privatisation of retirement pensions may well lead in the future to the marginalisation of the public aged pension, with impoverishment for many women, and those disadvantaged whose labour market participation has been sporadic, or who have been trapped in ‘low-end’ jobs.

It begs the question of whether the government should rather be pursuing a more progressive and democratic model of collective capital formation.

Furthermore for decades there has been increasing labour market deregulation, and an end to the old style of progressive cross subsidies for essential utilities as a consequence of privatisation – or of corporatisation in-anticipation of future privatisation.

Privatisation has also resulted in falling government revenues for vital social programs, and increased costs for everything from power and water, to the use of private toll roads.

‘User pays’ ends up having the same effect as regressive-flat taxation. And demand for increased profit margins with privatisation have seen structural increases in the cost of basic necessities; while the added cost of borrowing for the private sector in order to modernise infrastructure has also been passed on to consumers. And in these new markets – eg: for power – ‘small consumers’ are disadvantaged due to their limited purchasing power.

With regard to minimum wages, recently the ACTU has noted:

“While the average Australian income has jumped 21 per cent in real terms since 2000 and company profits have increased by 50% in the past five years alone, the real value of the minimum wage has increased just 7.1 per cent.”

And also importantly during the Howard years:

“Average award wages dropped by around $30 a week and some award workers had their real wages cut by almost $100 a week.”

The ACTU has observed that falling minimum wages have affected over 1.4 million workers in recent years. (See: http://www.actu.org.au/Issues/MinimumWagesCase.aspx )

And in addition to all this - there are many workers – including on low incomes – who have faced reduced wages and/or conditions under the government’s ‘Award modernisation’ process – despite promises to the contrary.

Importantly: There are many who have no sympathy for the unemployed as a result of constant campaigns of vilification on the pretext that ‘dole-bludging’ is rife. And yet

Australia

has stringent active labour market policies, pursued under both Labor and Liberal governments, with provisions that could reasonably be described as ‘punitive’.

Under recent changes long-term unemployed will be compelled to work two days a week ‘for the dole’, and yet no corresponding increase in payments for these people has been announced. http://thecourierpigeon.com.au/government-gets-tough-on-the-unemployed/851664/

The OECD has seen fit to criticise Newstart as woefully inadequate compared to unemployment pensions elsewhere. Writing in late 2010 for ‘Inside Story’, Peter Whiteford reported how under Newstart “unemployed adults receive about $470 per fortnight”, and how

“Since 1996 the level of Newstart for a single person has fallen from around 54 per cent to 45 per cent of the after-tax minimum wage.” (despite the fact minimum wages themselves have fallen)

(see: http://inside.org.au/why-unemployment-benefits-need-to-be-increased/ )

Finally, during the Howard years a number of programs sprung up that were lambasted as ‘middle class welfare’. Included, here, were Family Tax Benefits ‘A’ and ‘B’ – introduced to assist in the costs of child-rearing- and provided even to those on high incomes. http://en.wikipedia.org/wiki/Child_benefit

There has been confusion, here, on the Left, with some arguing in favour of ‘universalism’. But while many of us (this author included) support in-principle Swedish-style social-democratic universalism, the facts ‘on the ground’ in

Australia

are those of a relatively tight social wage and tax regime. With a limited scope to expand progressive taxation, and hence expand welfare and social programs - a higher degree of targeting and means testing is necessary in the Australian context.

Interestingly, though, Bernard Keane notes at ‘Crikey’ how Labor has failed to markedly reform the Family Tax Benefits regime. He concludes how:

“In [Labor’s recent]…budget…[Family Tax Benefit payments are] forecast to cost $18 billion in 2011-12.”

And thus

“…FTBs are now Labor’s as much as they are Howard’s, which makes the “war on the middle class” rhetoric from News Limited and its journalists even more risible.” http://www.crikey.com.au/2011/05/12/why-labor-now-owns-middle-class-welfare/

All these years ‘redistribution’ has been going on.

Redistribution from low and middle income earners to the wealthy, and to the upper middle class.

Redistribution from workers to the ‘corporate bottom line’ as a consequence of eroding real wage share, labour market deregulation, privatisation (including ‘Public Private Partnerships) and user pays.

And more redistribution from workers to big corporations with effective ‘corporate welfare’, as corporations no longer contribute adequately or proportionately towards the costs of education and infrastructure from which they benefit.

There has been impoverishment of pensioners – and especially the unemployed. (again I reiterate: despite stringent and indeed punitive active labour market policies)

And there has been vilification of trade unions and stigmatisation/criminalisation of industrial action even where only used as a last resort. This has resulted in a greatly reduced capacity for workers to fight back in the face of these changes.

So amidst all these changes over the past thirty years or so: how often have we heard terms like ‘class war’ thrown around in the mass media as a response?

The answer: Not often. Not often at all.

And yet if there is the prospect of even a mild degree of redistribution in the context of overcompensation for the proposed carbon tax, the ‘class war bogey’ is brought out just as it always is when it comes to the interests of the privileged, and the relatively privileged.

If those on lower and middle incomes are to receive a ‘fairer slice of the pie’ in terms of the tax mix, provision of social services, and welfare for those in need, it is only reasonable that those in the top 20% of incomes demographic pay their fair share one way or another. If those on low to middle incomes are to enjoy a ‘fair go’ it can be no other way.

That said, Prime Minister Julia Gillard has recently announced that families on incomes above $150,000/year will miss out on carbon tax compensation. That’s roughly 10% of Australian families. (‘The Age’ 25/6/11)

Unfortunately – as far as redistribution via overcompensation goes, the kind of strategy it seems Gillard is suggesting would provide a far shallower pool of funds to work with than would be the case were the top 20% incomes demographic excluded.

Perhaps given this context pensioners will miss out on overcompensation even under Labor; and those on low to middle incomes won’t receive the more robust degree of overcompensation they deserve. This could prove a missed opportunity for Labor – in maximising the reconsolidation of its ‘class base’. Although doubtless Gillard sees it as a strategic choice to keep more voters ‘on side’.

Nonetheless, perhaps it’s not too late for compromise. Perhaps if pressured by the Greens and Labor’s Left Prime Minister Gillard could strike an agreement to withhold compensation for the top 15% of households, to be redistributed to those genuinely ‘doing it tough’. A higher carbon tax rate in this context could be another option - an alternative to lower compensation 'cut-off thresholds' - to increase the total pool of funds available for redistribution from the top 15% to those in genuine need.

Regardless of the very cautious and modest nature of Gillard’s proposal, doubtless it still will not please critics such as Miranda Devine, and other Murdoch writers. Devine seems to have an aversion for the very concept of progressive redistribution – no matter how mild. But as far as this author can tell she has barely considered the situation of those who have been left disadvantaged by decades of “neo-liberal reform”; and the very real process of redistribution which has occurred to the detriment of workers and the poor. Indeed: After all these years of redistribution from low and middle income groups TO the wealthy and the upper middle class, the modest forms of progressive redistribution suggested here should simply be seen as a tentative move towards some kind of 'correction'.

Yes Labor is struggling in the polls. Elements of Labor’s core class support base have been drifting away gradually for a long time under the perception that Labor no longer represents their interests. But the prospect of progressive redistribution to the advantage of the vast majority of Australians who are on low to middle incomes is what the conservatives are scared of. They’re afraid of a Labor Party which takes action to re-consolidate its class base.

By contrast when the Conservatives speak of cutting taxes to reward ‘hard work’, they’re usually talking of ‘relief’ for those on higher incomes. The underlying assumption is that ‘the market is just’: that those on higher incomes deserve increased benefits for their effort. The implication is that they work harder than others.

But in an Abbott ‘tax reform’ package, you can be certain that it is those on low incomes – including some very hard working people – who would miss out in outright terms compared with upper-middle class and wealthy taxpayers.

We speak here of people on minimum wage and thereabouts: cleaners, child care workers, retail and hospitality workers, textiles workers, and many manufacturing workers. These are the same people who would suffer from a winding back of the social wage, or the effective introduction of ‘flat taxes’ with user-pays mechanisms in the context of Public Private Partnerships. And Abbott’s proposed tax cuts must draw from the Budget bottom-line somewhere.

Too many people have been disadvantaged and suffered injustice in recent decades. And it is a process which always accelerates under Conservative governments.

Increasingly, though, there are those who once felt they could depend on Labor to defend their rights and interests – who no longer believe this to be true. This is even undermining Labor’s membership base; its mobilisation as a social movement.

Now, though, is Labor’s opportunity to re-establish its credentials as a party with values; a friend of the disadvantaged, and true to its class base.

Labor needs a policy ‘circuit breaker’ - NOW

2011-06-18T16:12:00.013+10:00

In the following article Tristan Ewins argues that overcompensation is key to 'selling' the carbon tax' - and that welfare recipients should not be 'left behind'; But also that Labor needs a 'policy circuit breaker' NOW if it is to have any hope of re-election in 2013. A National Disability Insurance Scheme, and pay parity for community sector workers - could provide 'a way forward'.

nb also: If you find this article interesting PLS join our Facebook group - to link up with other readers, and to receive regular updates on new material. see: http://www.facebook.com/group.php?gid=58243419565

Speaking to Melbourne’s ‘Herald Sun’ on June 18^th Australian Prime Minister Julia Gillard seemed calm in the face of appalling poll results. In an article titled: “Why I Rolled Kevin Rudd”, the Prime Minister seemed to hold out hope for a Labor victory in 2013. (nb: we will assume PM Gillard did not anticipate the choice of title used by the Herald-Sun, with the usual loaded language and negative connotations)

Specifically, Phillip Hudson reported how Gillard:

“warned that poll numbers might not lift until after the tax begins in July next year and anxious voters "live it" and see the effect of the whole package and compensation on their daily life.” http://www.heraldsun.com.au/news/more-news/why-i-rolled-kevin-rudd-prime-minister-julia-gillard/story-fn7x8me2-1226077339474

What is most crucial at this point is for Labor to implement some kind of policy “circuit breaker”, to stop voters from ‘switching off’ before it is too late.

On 18th June 2011 “popular support for the Federal Government [had] fallen to its lowest level in 39 years, with a…Nielsen poll putting approval for Labor at only 27 per cent.” http://www.efarming.com.au/News/general/18/06/2011/80081/abbott-blames-policies-for-labor-slide.html

This was a devastating result for Labor.

Gillard cannot afford for everything to hinge upon reception to a carbon tax a whole year into the future. (ie: mid-2012) Even if compensation (and overcompensation) does emerge as intended, voters may already have firmed in their judgements before then…

But a National Disability Insurance Scheme could provide the vital ‘policy circuit breaker’ needed so desperately by Labor. We will return to this issue later.

The carbon tax is perhaps the most problematic issue for Labor, as fear has been whipped up so effectively by Abbott and by sections of the media.

There are also tensions between the Greens and Labor.

The Channel 7 website has published an article reporting a developing impasse between Labor and the Greens on the form any future carbon tax will take.

Specifically, Jeremy Thompson reported that:

“It is understood the Greens are unhappy with the Government's preferred deal on industry compensation, including substantial assistance to coal miners.” http://au.news.yahoo.com/a/-/australian-news/9660562/carbon-tax-rift-emerges-between-labor-greens/

Here assistance to coal miners seems pointless. Already low and middle income consumers – as well as trade-exposed industries - should be compensated for any increased flow on costs from coal-fired energy. If coal-fired energy plants are directly compensated, however, then where are the ‘market signals’ driving a shift to renewables?

The other question, here, is what rate the carbon tax will be set at. Ross Garnaut has argued that a carbon tax at $26/tonne would raise $11.5 billion in its first year. http://www.smh.com.au/business/carbon-tax-to-raise-115b-in-year-one-garnaut-20110531-1fdvi.html?skin=text-only

This author has argued in the past that there will likely be a rate of $20/tonne: a position that seems to be popular with Labor. But in the past the Greens have argued for a rate as high as $40/tonne.

Also notable (again as I’ve reflected elsewhere) is Garnaut’s argument that pensioners ought not be ‘overcompensated’ because of previous improvements to pensions. Garnaut had also argued that compensation to be phased out only for incomes “well north” of $80,000/year. http://www.theaustralian.com.au/national-affairs/early-carbon-compensation-plan-under-garnaut-review/story-fn59niix-1226066805423

It’s important to note here that even before carbon tax implementation electricity prices have risen in

Australia

by about 30% in recent years, and already this has hit pensioners hard. (see: http://theconversation.edu.au/increasing-electricity-prices-watts-the-culprit-1408 )

Melbourne University Researcher, Roger Darville blames this situation on the troika of renewable quotas, the need for new infrastructure, and increased demand. But privatisation is the real ‘elephant in the room’ with increased finance costs and profit margins for the private sector, and reduced market power for small consumers. (see: http://leftfocus.blogspot.com/2011/06/right-populist-monopoly-media-attempts.html ) And in any case increased demand should not simply translate into higher charges pocketed by private companies in the form of profit.

Pensioners are already absorbing these and other costs (eg: water), and so should not be ‘left out of the equation’.

From this it’s possible to draw a number of conclusions.

Firstly, a higher carbon tax rate could provide more scope for overcompensation for pensioners, as well as low and middle income working families.

As this author has argued elsewhere, Newstart recipients are ‘doing it tough’ – to put it mildly. Indeed, Newstart is currently only $474.90/fortnight, and has not kept up with a rising basic cost of living. (See: http://www.centrelink.gov.au/internet/internet.nsf/payments/newstart_rates.htm )

In light of existing punitive active labour market policies there are no decent or valid arguments not to reform Newstart. And real increases to Austudy are also crucial to provide conditions where students can apply themselves fully to study, rather than risk failure or underperformance as a consequence of the pressures of part-time work.

And here a ‘loans scheme’ is neither equitable nor fair.

If reform is not implemented here in the context of carbon tax overcompensation, then it needs to be achieved separately; But progressive Labor figures on a cross-factional basis, and the Greens - need to demand reform one way or another during the current term of Labor government. Ultimately carbon tax overcompensation may prove the easiest path to reform regardless.

But to achieve robust overcompensation for low and middle income groups difficult decisions need to be made about ‘cut off’ thresholds.

Based on previous modelling for a CPRS (carbon pollution reduction scheme – ie: via emissions trading), it has been argued that a carbon tax at $30/tonne would cost families $863.20/year. http://www.adelaidenow.com.au/ipad/pms-carbon-tax-to-cost-households-1660-a-week-treasury-figures-show/story-fn6bqpju-1226032314762

It’s difficult to extrapolate a figure for single income earners from this, but it would be reasonable to assume the costs could be easily absorbed by individuals on $80,000/year. (as well, the rate is unlikely to be $30/tonne) Therefore, in order to maximise the scope for overcompensation for low-middle income groups – including pensioners and the vast majority of workers (that is – the vast majority of voters as well) compensation could begin to be ‘phased out’ at around $70,000/year (or maybe somewhat higher), dissipating entirely at $80,000/year. (ie: for those who could reasonably be described as occupying that range from 'upper middle class' to 'wealthy')

Robust overcompensation for low-middle income groups will be crucial if Labor is to retain government in 2013; but must be paid for somehow. Therefore after reconsidering, the author believes that to provide the scope for such extensive overcompensation, a rate of at least $26/tonne – as preferred by Ross Garnaut – and with the ‘cut-off points’ suggested here - is preferable. And of course the rate and cut-off thresholds would have to be properly indexed.

Finally, compensation might best be provided in the form of regular cash supplements (also indexed) – as otherwise tax cuts could be ‘taken for granted’ and forgotten. With regular cash payments there would be a constant reminder of compensation provisions.

A ‘circuit-breaker’ for Labor

Labor has been taking ‘hit after hit’ in the polls and in popular media for a long time now. There are many publications which will put a ‘negative spin’ on pretty much anything and everything Labor says and does. The danger is that voters will ‘switch off’, virtually determining the government’s fate more than two years ahead of the next election. The carbon tax may turn out well ultimately, but a year from now it may be ‘too late’ for the government.

The government needs a ‘circuit breaker’ and needs it now. Labor needs to break the cycle of fearful speculation now - with an agenda of constructive and visionary reform with which to inspire and engage the electorate. The National Broadband Network (NBN) helped Labor ‘across the line’ last time; but the government needs new initiatives, as well as substantial progress on the NBN.

A National Disability Insurance Scheme has long been touted as an option by rising Labor parliamentarian Bill Shorten.

According to the ‘Every Australian Counts’ website, a NDIS would:

maximise employment opportunities for the disabled, with comprehensive support services and any necessary equipment

provide similar support to assist in providing education opportunities

“provide funding for home modifications and specialised equipment and support to ensure people are able to live as independently as possible in their own homes”

provide support for family and carers

provide “early intervention and support” for children with disabilities

(see: http://everyaustraliancounts.com.au/changing_lives/for_families/ )

In addition to this a NDIS needs to provide substantial new funds (ie: several billions every year) via a Medicare Levy-like mechanism rather than just a restructuring of the funding mix. New funds are necessary to increase Disability Support Pensions and Carers’ Pensions; extend support services and provision of necessary home infrastructure; and to bring more crucial medications under the umbrella of the Pharmaceutical Benefits Scheme.

Specifically as a consequence of a NDIS, in current terms carers and disability pensioners should also receive a rise in their pensions of at least $25/week; indexed on top of existing pension formulae.

A NDIS could also source additional funds for improvement of mental health services: an issue which is resonating strongly with the electorate.

While a NDIS could disrupt the cycle of fearful speculation about a carbon tax, it would also comprise a landmark reform – a genuine record of achievement for Gillard Labor.

Finally, the government could move onto the front foot regarding the ‘equal pay’ campaign being driven by the Australian Services Union – to provide effective pay parity for workers (mainly women) in the community services sector.

Because it is mainly women who are employed in the sector, this issue has been raised as one of effective gender discrimination. But not-for-profit organisations providing aged care and other services (as well as in the public sector) will need support from the government in adapting to any improved regime of pay and conditions. Hence for these – and other vital reforms – the government needs to aim during this term for a sustainable expansion of social expenditure in the vicinity of 1.5% of GDP; backed by progressive tax reform.

Generous superannuation concessions for the wealthy could also be wound back.

But until the carbon tax is implemented – with accompanying compensation and overcompensation – some degree of fearful speculation will continue. Labor needs to finalise its carbon tax package soon – to put fears to rest.

But speeding up implementation could also be crucial; and Labor could do well to aim for the end of this year, rather than allowing damaging speculation to continue until mid-2012. Again: by then it could be ‘too late’.

Debate welcome as always!

Right-Populist monopoly media attempts to ‘deprive carbon debate of oxygen'

2011-06-02T13:38:00.007+10:00

above: Cate Blanchett in the recent advertisement backing action on climate change

In this article Tristan Ewins reflects upon the Australian carbon tax debate as transpired recently on the ABC television program 'QandA'. (Questions and Answers) He considers issues such as compensation, welfare reform, and 'trivialisation' in Australian politics. The treatment of Cate Blanchett for participating in a related commercial is a case in point.

nb: If you find this article interesting PLS join our Facebook group - to link up with other readers, and to receive regular updates on new material. see: http://www.facebook.com/group.php?gid=58243419565

Tristan Ewins, 2nd June 2011

In a recent episode of ‘QandA” (Questions and Answers) the debate over the Australian Labor government’s proposed carbon tax continued in the same manner as it has for quite some time now. In particular, the representative on QANDA for the conservative parties, Liberal Senator George Brandis, repeated the usual line citing cost-of-living pressures and job destruction as the essential reasons the tax ought be rejected. While Labor MP Kate Lundy repeated again and again that low and middle income groups would be fully compensated (the point of the tax being not to raise revenue - but to create ‘market signals’ and so change patterns of consumption and investment) Brandis calculatedly avoided engaging in his response – as to give any recognition here would ‘give the debate oxygen’ and reveal the ‘convenient fictions’ propagated by the conservative parties in attempting to build up pressure for an early election.

Brandis ignored the issue of what would have happened to the Australian economy without Labor’s stimulus; and the extent to which the most recent budget deficit was exacerbated by natural disasters beyond the control of any political party. He also continued with the same ‘line’ that ‘Labor is addicted to debt’, ‘cannot handle money’ etc: not because it is true, but rather because Liberal focus groups must be reporting that these kind of truisms ‘resonate’ with the public. But if this is so it is only because these kind of ideas have been reinforced again and again over decades by the right-populist monopoly media. The same focus groups must be telling Abbott that opportunist ‘lowest common denominator’ politics – especially in the case of vilification of refugees - are eroding Labor’s support base; ‘backing Labor into a corner’. The human suffering of refugees is little consequence for many on the Right: ‘Anything goes’ for Abbott, and for ‘fear campaign shock troops’ like Scott Morrison in pursuit of personal ambition.

Debate on the proposed carbon tax had intensified as a consequence of a recent advertisement in favour of action on climate change – sponsored by progressive lobby association ‘GetUp!’, the Australian Conservation Foundation and the Australian Council of Trade Unions (ACTU). Australian actress Cate Blanchett in particular had ‘come under fire’ from conservative forces, including most of the right-populist monopoly media, for taking a stand on this issue. Opposition leader Tony Abbott, George Brandis and others had accused her of being ‘out of touch’ with struggling Australian families trying to make ends meet as a consequence of her personal wealth. And yet the conservatives and their media allies want to attack truly vulnerable pensioners, while pleading for upper-middle class welfare for those on $80,000/year and more…

If anything the focus on Cate Blanchett as a personality detracted from the real debate over climate change. This was no accident – but was a tactic of distraction intended to avoid engaging on the issues; to prevent the message of this campaign from ‘getting through.’ This ‘trivialisation’ of politics in Australia is a regular phenomena – and perhaps a deliberate one – having the effect of weakening our democracy. Australian social commentator, Guy Rundle – also a participant in the ‘QandA’ episode - observed tellingly that the conservative response was ‘a beat-up’.

Perhaps the greatest deception of all by the conservatives, here, is the underlying assumption that a carbon tax would see cost-of-living pressures passed on to the public: while an Emissions Trading Scheme or Abbott’s so-called ‘direct action’ would not. This is crucial as an ETS has in the past been supported by past Liberal Party leaders John Howard and Malcolm Turnbull.

In reality a market-driven ETS would see the price paid for carbon credits being passed on to the public in about the same dimensions as with a carbon tax. And Malcolm Turnbull has estimated the cost of Abbott’s ‘direct action’ approach could approach the vicinity of $18 billion a year were the government “buying offsets or otherwise directly paying for abatement”, and aiming for an 80 per cent reduction of emissions by 2050, as urged by scientists. A much more modest target of a 5% overall cut in emissions by 2020 would cost $2.1 billion/year in today’s terms.

These costs would of course be passed on to Australian families also – via the tax system. Only it would be ‘hidden’ in a wide range of other different taxes – rather than an overt and obvious carbon tax.

It should be noted, of course, that Ross Garnaut also argued in ‘The Age’ on 1^st June that a carbon tax at $26/tonne would rase $11.5 billion in the first year. But the overwhelmingly vast majority of this money would be returned to low and middle income families. Again – the point is not to raise revenue, but to change consumer and investor behaviour. While the ultimate rate is probably more likely to be $20/tonne, once compensation is provided low and middle income groups will actually be better off. Although over the longer term any kind of structural adjustment to deal with climate change will come at a cost (even if only as a ‘once off’) as it will necessitate investment in new technologies and infrastructure. (including under Abbott’s ‘direct action’)

The point is that any kind of action on climate change will cost elements of the public directly or indirectly. By raising the spectre of ‘cost of living pressures’ while supporting ‘direct action’ Abbott is obfuscating this essential truth, and deceiving voters.

That said, there are some kinds of ‘direct action’ that make sense; and others that don’t. At QandA Guy Rundle pointed out that Abbott’s program was one of ‘socialising’ the costs and losses of business – to be paid for by the public – while ‘privatising the profits’. An example is Abbott’s preference to pay businesses directly for changed practices on climate change. This kind of ‘corporate welfare’ has become standard fare in recent decades. And it also begs the question: where has the rationale for privatisation gone – supported by both Labor and the Liberals - where there is effectively no ‘risk'? (ie: when things go wrong ‘government picks up the pieces’) The same could be said of Public Private Partnerships – also supported by ‘both sides’ of politics.

But the right kind of direct investment in renewable energy could make a very significant difference, combined with other incentives. In particular new public initiatives in the power industry could be combined with a German-style program mandating compulsory purchase of energy from renewable sources fed into the national energy grid. In 2009 Germany enjoyed a share of over 16% of the power supply provided from renewable sources.

But in Australia the figure is only slightly over 5 per cent.

Writing for Green Left Weekly, David Nichols also explained in 2008 how the costs of power privatisation in Australia have been passed on to the public. He explains that “private capital has to earn a higher rate of return than public investment” and this means large enterprises with significant purchasing power can bargain for a better deal then, say, pensioners and others on low incomes. He explains also how according to privatisation consultant KPMG, “the rate of return on publicly owned electricity generation capacity [was] 7.1% in Queensland and 10.6% in NSW, while corporate investors wouldn´t touch electricity generation until the rate was 15%.” Finally Nichols contended “private debt is more costly than public debt.” The consequence of this is that public ownership could deliver a 30 per cent cut in costs as flowing from lower finance costs alone.”

As Guy Rundle effectively contested at QandA – privatisation is the ‘elephant in the room’ that the conservatives will not acknowledge when it comes to cost of living pressures. But for that matter – neither will Labor – which had long since assimilated the privatisation ideology and effectively abandoned the mixed economy.

Perhaps now there is a need for introspective reflection within Labor on a cross factional basis – to reconsider the mixed economy, and concede past mistakes. And even within the Liberal Party there could well be recognition that the mixed economy was undisputed under Menzies.

The final issue we will consider here will be the nature of carbon tax compensation.

In ‘The Age’ on 1^st June 2011 Ross Garnaut was quoted as arguing for 55% of carbon tax revenue to be passed on to tax-payers, rising to 64 per cent by 2021-22, with industry receiving 35 per cent, moving down to 20 per cent by 2021. (presumbly as industry adapted and modernised) But ‘The Age’ also reported him as arguing that there should be “less compensation for pensioners and welfare recipients…because of [the] 2009 rise in benefits.” Effectively this would mean ‘no overcompensation for pensioners’.

There are a few issues here.

Firstly overcompensation is essential for Labor in ‘selling’ the carbon tax. This is as much the case for pensioners as for anyone else. Pensioners vote!

It is also key for social justice imperatives. Pretty much all pensioners struggle, and many disability pensioners and carers in particular don’t have many options in improving their financial circumstances.

Writing in February 2011, Peter Martin noted that :

“Working households faced extra costs of 4.5 per cent in the year to December, age pensioners 3.1 per cent and welfare recipients 4.5 per cent. The CPI grew 2.7 per cent.”

He also noted how the Bureau of Statistics had argued:

“Age pensioners spend a relatively high proportion of their income on utility bills and fruit and vegetables, both of which shot up in price in the year to December.But while aged pensioners had their payments adapting to “either the CPI [or] the pensioner living-cost index or male total average earnings (whichever is most favourable), Newstart Allowance is only adjusted to only “what is…the lowest of these.”

This means that even in the face of onerous active labour market policies and ‘work for the dole’ programs, Newstart has been eroding greatly relative to other pensions for a long time.

Carbon tax overcompensation is a great opportunity to finally provide for the basic cost-of-living pressures faced by all pensioners, and especially by Newstart recipients. Most Newstart recipients ought receive overcompensation of $50/week. And those working two days a week under the government’s new ‘work for the dole’ provisions could receive overcompensation of at least $100/week. (for progressives this would be ‘making the most of a bad situation’)

Other full-pensioners (disability, carers, aged pensioners), whose financial situation is not necessarily so dire as that of the unemployed, could receive overcompensation starting at $25/week. Single Parents also deserve a significant extension of benefits.

And all such increases should be fully indexed on top of existing formulae.

Although improvement for Disability and Carers pensions – and associated services- could also be achieved via a National Disability Insurance Scheme; which would have Labor seen as ‘moving onto the policy front foot’. Perhaps providing such reform for Disability Pensioners and Carers separately would enable proportionately greater carbon tax-related compensation for other low to middle income groups, making the carbon tax ‘easier to sell’. But on social justice grounds Gillard Labor would still have to provide for Disability pensioners and Carers separately via a National Disability Insurance Scheme (NDIS) well before the end of the current term. Labor needs a positive message to re-engage with voters, and a NDIS could be crucial here.

The Greens and Independents especially need to make the most of their leverage over Labor to promote this reasonable and achieveable social justice agenda.

Here’s hoping that conservative forces fail in their strategy of attempting to ‘deprive the climate and carbon tax debate of oxygen’; manipulating voters through distraction and focus on trivalities. The issues are just too important to be engaging in these kind of cynical games.

Is this a real Labor Budget?

2011-05-14T17:08:00.009+10:00

above: Treasurer Wayne Swan thinks he has the economic policy settings right

In this latest 'Left Focus' article Tristan Ewins asks: What are the high and low points of Federal Labor's 2011-12 Budget? Labor seems to be prioritising return to surplus, and containing inflation. But has social justice been lost in the process?

nb: If you find this article interesting PLS join our Facebook group - to link up with other readers, and to receive regular updates on new material. see: http://www.facebook.com/group.php?gid=58243419565

Federal Labor’s 2011-12 Budget is framed by a variety of political and economic imperatives: fear of being outflanked by the Conservatives on the populist right with welfare and refugees; fears of inflation and increased interest rates as the economy picks up; and the symbolic drive for a surplus by 2013 – regardless of natural disasters at home and abroad which have impacted upon our economy. I intend to consider the high points and low points of the budget, with some views on how it may have been improved, and what progressives ought be aiming to achieve in the future.

Firstly, the high points

The $1.5 billion in new initiatives for mental health is both welcome and necessary. ‘The Age’ has observed there are an estimated 600,000 Australians “with debilitating mental illness”, with the most severely affected second only to indigenous Australians in mortality rates. (presumably including suicide) http://www.theage.com.au/business/federal-budget/new-services-to-benefit-mentally-ill-20110510-1ehin.html

The emphasis on ‘early intervention’ for young people is notable – as surely prevention is better than cure – most importantly in terms of preventing human suffering, but also for the budget bottom-line. Though more resources should be devoted to improving social participation and reducing social isolation.

Meanwhile some of Labor’s savings make good sense. The practice of parents using children for purposes of ‘income splitting’ in relation to the low income tax offset on unearned income will be cut back severely to $416 per annum. Tighter superannuation contribution caps for the over-50s demographic comprise an attempt to stem an effective tax-minimisation strategy, and reduced concessionary arrangements for upfront payment of HECS debt by students will save $480 million over four years, affecting mainly higher income groups. http://www.news.com.au/money/federal-budget/the-budget-what-it-means-for-you/story-fn84fgcm-1226053524859

Also very notable was the government’s announcement that it intends to enact separate legislation to means test the Private Health Insurance Rebate. http://news.ninemsn.com.au/mobile/article.aspx?id=8247906&_sp=2045&noid=6303&_s=eb0745b1-ffdd-4839-b584-91e50ee86c21

These savings are targeted for fairness, and are welcome insofar as the alternative may have involved further cuts to health, welfare, education, or crucial infrastructure. They are welcome in providing the scope to increase income support for families with teenagers in study aged 16-19, as well as ‘bringing forward’ the Low Income Tax Offset to apply to workers’ weekly pay instead of being accessible only with their end-of-year tax return. http://www.abc.net.au/news/stories/2011/05/09/3210940.htm

In relation to the government’s skills policy Treasurer, Wayne Swan had observed that: “skills shortages could constrain our economic growth and mean missed opportunities for Australians". http://www.smartcompany.com.au/economy/20110510-federal-budget-2011-3-billion-workforce-training-and-participation-projects-to-combat-skills-shortages.html

In this context the government has committed $3 billion in new money over six years including a National Workforce Development Fund (industry-based training with 130,000 places over four years), support for new apprenticeships, and incorporating a renewed commitment to skilled migration. This is the Budget’s true centre-piece. http://www.smartcompany.com.au/economy/20110510-federal-budget-2011-3-billion-workforce-training-and-participation-projects-to-combat-skills-shortages.html

There are also some bright spots amidst a largely disappointing welfare agenda. Employer subsidies aimed at helping the long-term unemployed and the disabled to re-enter the workforce are welcome: as is a restructuring of Disability Support Pension eligibility enabling the retention of some payment up to a maximum of 30 hours a week. For some disability pensioners – for instance those suffering mental illnesses – this is welcome on the basis that such peoples’ capacity to work fluctuates irregularly. http://www.jennymacklin.fahcsia.gov.au/mediareleases/2011/Pages/b05_10052011.aspx

Single Parents will also face incentives to work, with an easing of means tests. http://www.theage.com.au/business/federal-budget/tough-love-work-rules-20110510-1ehi8.html

Finally, a record $4.3 billion is being provided for the regions, targeting areas like health, infrastructure, and vocational and higher education. And an emphasis on skilled migration - with 16 000 places allocated to the Regional Sponsored Migration Scheme - will prove crucial to regions facing critical skills shortages in areas such as health services. http://www.minister.immi.gov.au/media/cb/2011/cb165287.htm

The commitment to regional Australia illustrates that where country-independent MPs hold leverage over a minority Labor government they will be in a position to ‘deliver the goods’. A mutually beneficial move could be for these independent MPs to enter into a ‘pact’ with Labor now, foreshadowing the possibility of another minority government, involving guarantees of a continued flow of resources for regional Australia. This could even provide a spur for additional independent contenders: and at least in theory provide impetus for a new party. Emphasis on consolidating regional population centres could ultimately be crucial in ameliorating the effects of urban sprawl in the major cities.

But Tony Windsor must reconsider his demand that Carbon Tax money be diverted from compensation for affected groups to investment in renewable energy programs. If there is to be new investment here it needs to be funded separately. Overcompensation and support for trade-exposed industries are just too crucial for Labor in ‘selling’ the Carbon Tax and achieving re-election. And despite talk of ‘cash churning’ the resulting market signals should still provide the desired effect.

Disappointments

Perhaps the most glaring disappointment is the government’s capitulation regarding the never-ending campaign of vilification against the unemployed, single parents and to some extent disability pensioners.
Disability Support Pension (DSP) recipients under 35 will face a more stringent “impairment test” . They will also be compelled to attend regular interviews (every three months) reassessing their capacity to work. This will apply to those “assessed as having a work capacity of at least eight hours a week.” http://www.jennymacklin.fahcsia.gov.au/mediareleases/2011/Pages/b05_10052011.aspx

With regard to ‘NewStart’, the unemployment benefit: long-term unemployed will now be compelled to ‘work for the dole’ 11 months of the year, two days a week. http://thecourierpigeon.com.au/government-gets-tough-on-the-unemployed/851664/

And unemployed 21 year olds will be shifted to the ‘Youth Allowance’. (at a rate $43 a week less than the poverty-level Newstart allowance). The targeting of this demographic seems largely arbitrary, and hence unfair. Many people will be of this age upon completion of tertiary study. For young people thrown into unemployment, and yet struggling to pay rent and bills, search for work, and feed themselves – this is a cruel blow. Perhaps some of the costs will simply be passed on to parents.

And yet Single Parents will be shifted on to Newstart Allowance (a $56/week reduction) when their child/children reach the age of 12. (down from 16) http://www.businessspectator.com.au/bs.nsf/Article/Groups-question-tough-love-welfare-GQGNM?opendocument&src=rss

One wonders whether the politicians, who expect these women (and some men) to raise a young family, and balance this task with paid work, understand the pressures and demands of raising a family alone. Do they really suppose a 12 year old child is in a position to care for themselves? The stresses of these new arrangements will undoubtedly also ‘flow through’ to young dependents in the form of emotional pressures and academic disadvantage.

The unemployed and single parents comprise ‘soft targets’, the vilification of whom is regularly beat up in the dominant right-populist monopoly media. And even still, expectations that savings can be made by targeting ‘rorting’ of the Disability Support Pension betray a lack of understanding of how debilitating some conditions – for example, mental illness - can be.

It warrants the question: does Labor accept the logic of its own policies, or is this a ‘sacrifice’ to placate those looking for scapegoats? Already Abbott is claiming so-called ‘tough love’ measures do not go far enough. So if Labor’s policies do comprise some strategic ‘sacrifice’ – then will this logic of retreat know any end??

Yet even amongst these attacks upon the most disadvantaged, ‘The Australian’ and Tony Abbott are talking of ‘class war’ against ‘middle Australia’ with some welfare cutbacks for households on $150,000/year and more. http://www.theaustralian.com.au/national-affairs/budgets/thats-not-a-knife-wayne-swan-as-budget-cuts-middle-class-welfare-but-increases-jobs/story-fn8gf1nz-1226053971008

Assaults upon the rights of pensioners, the introduction of regressive user-pays principles for everything from roads to schools, the gradual abandonment of progressive distributive mechanisms – these are considered ‘objectively sound policy’. But any attempt to achieve a modicum of distributive justice involving a greater proportionate burden upon the upper middle class is branded by the Conservatives a ‘war on middle Australia’.

Labor needs to press home the argument that someone must pay for health, education, infrastructure and the social security safety net. And if those on relatively high incomes do not pay their share then who will pay instead? Also while the very rich should pay their fair share, the tax system needs a broad enough base to fund the social necessities provided by government.

Chris Lewis, writing for ‘Online Opinion’ and quoting The Household, Income and Labor Dynamics in Australia Survey points out that restricting welfare payments to households on incomes of $150,000 and more “will [only] exclude about 15 per cent of income groups.” http://www.theaustralian.com.au/national-affairs/budgets/were-not-rich-but-wealthier-than-most-sydney-family/story-fn8gf1nz-1226054297260

Class interest is an unavoidable factor of political and economic life -although the Conservatives attempt to obscure the issue with false appeals to the principle of ‘classlessness’; where distributive justice is labelled ‘class war’ but assaults upon the most vulnerable are unquestioned. At other times fears about refugees and resentment against marginal groups are beaten up as a ‘wedge’. Finally there is appeal to ‘competence’ on ‘economic management’: usually constructed as adherence to the dominant neo-liberal ideology.

Many a radical in the 19th and early 20th Century imagined an in-built working-class majority would make transition to socialism inevitable in the context of universal suffrage. Since then, however, the class homogenisation imagined by Karl Marx was replaced by many layers of differentiation within the working class. The idea of a (predominantly white collar) middle class self-identity has long since impeded working class solidarity. Essentially, though, the Conservatives are still afraid of a Labor Party which appeals consistently, unashamedly and unambiguously to the class interests of the majority; a move which could reconsolidate Labor’s ‘natural base’.

Conclusions

This Budget – including its welfare and training provisions - is about pushing the economy to full capacity – anticipating a reinvigorated mining boom . There is the accompanying goal of containing inflation and hence interest rates and cost of living pressures. Greater participation should also ‘increase the size of the pie’ from which a larger and proportionate investment in infrastructure and social services could spring.

Labor governments of times past would attempt to contain inflation by working with the trade unions. But with the lack of such arrangements so-called ‘tough love’ measures on welfare aim to increase labour market participation by ‘any and all’ means necessary. Apparently this includes labour conscription, pressures upon the disabled and vulnerable single mothers, and continued relegation of the unemployed to dire poverty. By expanding a ‘reserve army’ at the bottom end of the labour market, Swan supposes he can contain the inflation genie.

It is conceded that labour market participation can ameliorate social isolation; though this can be pursued without the punitive elements contained in this Budget. As suggested, there are better ways of promoting growth and containing inflation than these. (ie: via agreements with organised labour which nonetheless do not erode real wages; but also through tax measures targeting consumption at the upper end to reduce inflationary pressures in the most equitable manner possible)

Despite this it is notable that Gillard Labor has broken with a long tradition amongst both Labor and Liberal governments of delivering income tax cuts ‘as a matter of course’. The political pressure to return to surplus by 2012-13, and pressures to maintain some modicum of social justice have ensured that.

Yet a higher and progressively-structured flood levy could have stemmed pressures to enact austerity. And delivering on an unnecessary and costly cut in Company Tax simply put the government under more pressure. However, a National Disability Insurance Scheme could have seen Labor ‘on the front foot’ – pursuing a big ticket reform agenda re-establishing Labor’s ‘can-do’ credentials. A ‘NDIS’ especially could have been crucial in expanding by billions real funding for disability services and income support to meet the true level of human need.

Instead the government is ‘dying a death of a thousand cuts’, depicted as indecisive, and victim to a deceptive fear campaign on the Carbon Tax.

The question that arises, therefore, is: ‘where to now’ for the government?.

Harsh ‘Work for the Dole’ provisions could actually spur public sympathy for reform of Newstart. The best could be made of a bad situation by tying these provisions to significant across-the-board increases in the Newstart pension (perhaps $50 a week), and signficantly greater increases for those directly involved in the program. Its severity could also be diluted with time; with more ‘carrots’ and less ‘sticks’. The Greens should demand such compromise through the negotiation process.

It is also crucial for Labor to drop its commitment to restrain proportionate growth in public expenditure ‘no matter what’. A NDIS must deliver significant NEW funds into the system. And in addition to existing shortfalls for services, welfare and infrastructure, sooner or later Labor must address in a progressive manner the pressures of an ageing population and a growing population.

Tens of billions are needed for aged care, health, medium-high density social housing, and transport infrastructure. This expansion cannot go on forever, but a reasonable goal for the time being would be to increase the tax base progressively by 1.5% of GDP per term of government. As this author has argued before, Labor should consider restructure of income tax or dividend imputation, a wealth tax, or a National Disability Insurance Scheme - or a mix of these options. And following a broader restructure and indexation of the bottom two income tax brackets, Labor could also let bracket creep ‘do some of the work’.

Only by meaningfully grappling with these issues can Labor overcome the impression of indecisiveness; reclaiming its status as a real electoral contender; as a government of vision, social conscience, and active social and economic reform.

Budget Austerity and Small Government not the Answer – A response to Wayne Swan

2011-04-23T23:02:00.016+10:00

above: Australian Treasurer and Deputy Prime Minister Wayne Swan

The following essay is a response to Australian Treasurer, Wayne Swan - who has recently written a Fabian Essay - whose obvious significance concerns the coming Australian Federal Budget for 2011-12. While the author is highly sympathetic with the Treasurer's defence of Labor's record fighting the Global Financial Crisis (GFC), he nonetheless insists that - with the recovery - 'small government' is not the answer. Tristan Ewins responds that rather, a government committed to human need - and facing the consequences of an expanding and ageing population - should further reform tax, invest in necessary infrastructure and incrementally expand the social wage...

By Tristan Ewins
23/04/2011

In a recent Fabian Essay, ‘Keynesians in the Recovery’, Australian Treasurer and Deputy Prime Minister, Wayne Swan, has defended the Labor Federal government’s legacy in preventing recession at home, and contributing to a global recovery in the wake of the Global Financial Crisis. (GFC) It is a crucial narrative for Labor to contest: restoring a practical Keynesian orthodoxy in striving towards an implicit social-democratic consensus, and achieving generational change in perceptions of Labor on economic management.

And it is all the more important in wake of other policy failures and forced back-downs which have harmed the government, and left behind an impression which obscures and detracts from Labor’s very significant achievements.

With the Resource Super Profits Tax (RSPT) Labor had ‘bitten off more than it could chew’: taking on the mining giants close to an election. Combined with Labor’s back-down on its original CPRS (Carbon Pollution Reduction Scheme), these presented an impression of a government in retreat. That on its own shook – and continues to shake - public confidence.

And while compared with the scale of other major initiatives the real level of waste in the government’s home insulation rebate program was minor, nothing can make good the loss of life which followed the lack of sufficient regulatory oversight.

But where would Australia have been had the Conservatives been in government with the onset of the Global Financial Crisis? (GFC) Most likely a Conservative government would have implemented deflationary policies which would have sent the economy into freefall, with an ever-escalating toll of human misery.

In 2008 the world teetered upon the precipice of a potential economic Depression. In his Fabian Essay
Swan refects upon Australia’s position at the time as follows:

“It is too easy to forget just how exposed Australia was to the crisis. Eight out of ten of our major trading partners went into recession. Our banks faced dislocated global capital markets and calls from bank customers flowed into my office. The decline in production, investment and exports affected jobs, with unemployment rising by 175,000 within months. Our economy contracted by almost 1 per cent in the final three months of 2008.” (p 5)

In the face of this looming catastrophe, Swan defends the government’s response:

“Underpinning our policy response were the principles of fiscal and monetary action to boost aggregate demand set out by Keynes in his General Theory and his activist publications of the Great Depression era: immediate stimulus measures to boost consumer spending and confidence; useful public works to create employment; lower interest rates to boost investment and spending; and concerted international action to strengthen the world financial system.” (p 5)

“Labor, guided by Keynes, is driven by a morality that regards unemployment, ruined businesses, foreclosed mortgages and myriad other signs of economic distress not as part of an inevitable and desirable cleansing process for the economy, but as the symptoms of a recession that should and can be avoided with the necessary will. (p 8)

How the government gets this message out to the public is a different matter, though. How can Labor contest and ultimately determine the narrative – that is, ‘popular wisdom’ - on its response to the Global Financial Crisis?

Part of the answer is rebuilding Labor as a social movement; a mass party which promotes the activity and real policy influence of its members; and so remobilising its base, places itself on a permanent campaign footing on a wide variety of fronts.

But there’s another side to the story Swan is trying to sell on the economy. With the 2011-2012 Federal Budget about to be passed, it seems he’s preparing us for austerity.

Swan writes of the importance of being “Keynesians in recovery” as well as in the downturn.

“With private demand strengthening, unemployment falling and our economy pushing towards capacity, we need to restrain public spending, and stay the course back to budget surpluses. Just as it was the right thing to step in and support demand during the GFC, the right thing to do is to take a step back as private activity recovers.” (p 1)

[This means] “making room for the private sector when economic growth is strong.” (p 1)

And he takes the argument further:

“[The very] phrase ‘counter- cyclical’’….implies the opposite of the critics’ claim that Keynesian policies constitute a recipe for ever-increasing rates of public spending as a proportion of GDP. (p 7)

“[While] governments have a responsibility to increase public spending going into a recession, once growth and prosperity have been restored, they have an equal responsibility to restrain public expenditure, budget for surpluses and reduce debt in climbing out.” (p 7)

Finally Swan indicates his preference, now, to promote:

“reforms to strengthen and broaden our economy by cutting business taxes, investing in infrastructure and boosting national savings.” (p 8)

While Swan’s message on counter-cyclical demand management is crucial to Labor’s intellectual armoury, and its credibility on the economy, there are other aspects of his account that need to be challenged. This is regardless of Swan’s (correct) assertion that ‘big government’ is not the necessary or inevitable counterpart to Keynesian counter-cyclical demand management.

Specifically: Swan’s concern to keep taxes low – and hence ‘government’ ‘small’ has real-life consequences. His call to government to ‘make room’ for the private sector seems reminiscent of old Conservative claims that the welfare state and social wage were ‘crowding out’ private economic activity. But the services in the firing line are so often in the realm of social necessity, and are most efficiently provided through the public sector or other forms of collective consumption in any case.

Meanwhile the investment in infrastructure that Swan champions is difficult to achieve except in the context of maintaining and expanding the tax base. A growing population, and an ageing population will mean increased pressures on transport infrastructure, housing and health services now and into the future.

Even considering the current (modest) correction in the housing market, thousands of families experience housing stress, which is a drain upon their incomes and other areas of the economy. The situation is exacerbated by rapidly growing populations – such as in Melbourne – where young families are driven to the urban fringe; but once there have inadequate access to public transport. There is a cost to the economy in terms of transit expenses including petrol. But there is a hidden social cost also, including to families, where transit times detract from time for recreation, including time with spouses and children. Less time for recreation resulting in obesity and ill health could flow on to the Health sector over the long term as well.

More investment in social housing and transport infrastructure – including urban consolidation - is essential for economic and quality of life purposes; but requires a commitment of resources inconsistent with ‘small government’.

The ‘ageing population’ also demands a rethink by policy makers, including by Wayne Swan, on the theme of Aged Care and welfare, and how this relates to restraining the size of government – partly for Ideological purposes.

Social democrats once stood indignantly against demands under capitalism that workers continue in sometimes alienating, monotonous or physically demanding jobs practically until their grave, or to physical and mental ruination. (whichever came first)

A key social-democratic tenet was the placing of real life quality for workers ahead of the abstract-economic; ahead of profits outside the context of real social benefit. Yet now in pursuit of ever lower taxes, less welfare and ‘smaller government’, Labor seems itself resigned to raising the age of retirement, and in so doing denying older Australians the opportunity for fulfilment with cultural participation, civic activism, education for life, and time with family and community. This at a time in people’s lives where ‘every year’ of relative good health can feel precious.

What is worse, the Productivity Commission is promoting a user-pays agenda for the Aged Care sector: a move which Ben Spies-Butcher, a lecturer in sociology at Macquarie University, argues will actually deter the less-wealthy from accessing services for which they may have an acute need. And Charmaine Crowe of the Combined Pensioners and Superannuant’s Association (CPSA) has pointed out that Australia already only spends only 0.8 per cent of GDP on Aged Care compared to 3.5 per cent in the Netherlands and 3.6 per cent in Sweden. http://www.agedcareinsite.com.au/pages/section/article.php?s=News&idArticle=19979

This cannot fail to have a devastating impact on the quality of life of our most vulnerable Australians. We are a wealthy nation and can afford to do better. It is a matter of priorities.

As a basic question of humanity we must make the necessary commitment to ameliorate suffering as much as possible, and provide opportunities for life quality. This must include outings, pleasant surrounds including gardens, opportunities for personal and social interaction; provision for privacy and personal space, access to medical (including dental) care, air conditioning and heating, and into the future access to information technology including internet.

And as this author has argued elsewhere: quality aged care must involve sufficient nurse to patient ratios, and decent conditions for aged care staff. (this dovetails with the Australian Services Union campaign for fair wages – mainly for women – in the sector) Many residents need acute care whether for showering, dressing, eating, being turned regularly to prevent bed sores, or using the toilet. For many such circumstances will continue for years, and it simply is not good enough to ‘let the market sort us out’.

Even for less-robust ‘Third Way’ interpretations of social democracy such standards for inclusion and protection of the vulnerable are core. And by comparison with progressive funding, ‘user pays’ would act like a regressive flat inheritance tax anyway, hitting overwhelmingly low and middle income families, while eschewing a more direct and formal inheritance or wealth tax - which would affect the more affluent.

To improve quality of service – and quality of life – requires a commitment of resources. And to meet the scope of commitment made by the Netherlands and Sweden would require new money (perhaps an extra twenty billion a year) out of an economy valued somewhere over $1.2 Trillion This has to start somewhere.

Meanwhile increased demand upon the Disability Support Pension (DSP) is partly the consequence of a genuine mental health crisis, and also cannot be addressed in the context of small government. And in light of recent debate it is worth noting that extensive and punitive active labour market policies already exist for Newstart recipients. The DSP and other pensions remain in need of extension to meet a rising cost of living without further ‘punishing the victim’.

For the chronically-ill, and for their carers - especially those without any prospect of steady, decent-paying employment – there must be provision for a decent material quality of life. Easing of income/means tests for recipients, and introduction of incentives for employers – without effective discrimination against the disabled themselves on wages and conditions – could be part of a constructive government response. And a National Disability Insurance Scheme (NDIS) which provided significant new money to address these and other areas of concern - could also secure support from a public not only on compassionate grounds - but with the realisation potentially every individual and every family can be vulnerable.

So where should Labor start in addressing these issues in the process of framing the 2011-12 Federal Budget?

As noted at this blog recently - The Greens have already provided research demonstrating “that at 30 per cent, the current company tax rate is still below the Organisation for Economic Co-operation and Development's (OECD's) "weighted average" of 36 per cent.” Where business stands to share in the gain from necessary infrastructure investment (eg: transport) surely it should continue to ‘pay its fair share’. The 1% Company Tax cut has to go. http://au.news.yahoo.com/thewest/business/a/-/national/9091822/greens-want-to-restrict-company-tax-cut-to-small-business/

Apart from this, Gillard Labor could aim to increase social expenditure in the critical fields mentioned in this essay by around 1 per cent to 1.5 per cent of GDP (not including Carbon Tax compensation) over the course of the current term. (the first step of a long-term plan for reform) In the context of an economy valued at over $1.2 Trillion, this would provide a starting pool of approximately $12-$18 billion annually which could be gained via reform of income tax or dividend imputation, a wealth tax, or a National Disability Insurance Scheme. (or a mix of these options)

If the government still has to find savings over the relative-short term, with a new Senate it could realistically implement means-testing of the existing private health insurance rebate. This could be combined with means testing child care rebates to exclude families with combined incomes over $150,000 – which despite complaints is a threshold beyond what most families can aspire to.

Meanwhile national savings should be promoted through democratic collective capital formation amongst the great mass of citizens and workers - rather than further ‘incentives’ for the wealthy in Superannuation and elsewhere. Further tax reform could also help fill any void left by removing superannuation concessions for the wealthy, redirecting monies into a public pension fund.

To be competitive at the next Federal election Labor needs to restore its status as a ‘can do’ government after successive retreats on several fronts. National Broadband Network (NBN) rollout and Carbon Tax ‘overcompensation’ could form part of this picture, but funds for social housing, transport, welfare and aged care could finally establish solid credentials for Gillard Labor as a government of genuine reform.

There is a particularly noteworthy quote from Swan’s recent ‘Fabian Essay’ that is worth reproducing here to put in an interesting context.

Swan writes:

“…in contrast to our opponents – we understand that economic policy must bend to the needs of the times, not the other way around.” (p 4)

This could be interpreted in the sense that the economy must serve human interests first: not some abstract logic or goal. In this sense attacking pensioners or neglecting the aged, the mentally ill, or the disabled in pursuit of a surplus reminds the author of the Vietnam War-era statement that it was ‘necessary to destroy the village in order to save it’.

There are political reasons for pursuing a record-fast return to surplus - hence the scepticism of some with regard to the government's amitions here. Although allowing deficits to consistently spiral out of control over the course of the entire economic cycle will bring ruin in the end. But if we are pursuing the kind of economy that serves truly human needs and purposes, surely a narrow and timid Ideology of ‘small government’ is not the answer.

Nb: The full version of Wayne Swan’s essay can be found at the URL below:
http://www.fabian.org.au/1140.asp

Tristan Ewins is a freelance writer and grassroots Labor activist based in Melbourne, Australia. He maintains and publishes the 'Left Focus' blog

AND FINALLY: If you found this article interesting PLS join our Facebook group - to link up with other readers, and to receive regular updates on new material.
see: http://www.facebook.com/group.php?gid=58243419565