Labor needs to Develop Stronger Policies and Mobilise Early to Beat the Liberals Next Time

 

 

 

 

The Following is an internal view of where Labor needs to lift its game for the next Federal Election ; in terms of Policy, Strategy, and mobilisation of its Rank and File.  NON-Labor people  (Including Greens Activists)  may be interested in the broader implications for Australian politics.  And there are areas of possible shared ground on Policy between the ALP and the Greens.  The election demonstrated that currently ALP and the Greens still need each other to maintain an electoral bloc capable of displacing the Liberals.....

Dr Tristan Ewins


It's upsetting when some of us in Labor complain about "unaffordable" "pie in the sky" Greens policies. The Greens' policies were more ambitious than Labor's policies, yes. And perhaps were less credible as a consequence of their lacking access to quality costings. But at the end of the day the difference between Labor and the Liberals is perhaps around one per cent of GDP annually. (also add other policies not related to spending – like support for penalty rates) And the 'unaffordable' Greens policies maybe add up to in the vicinity of one to two per cent of GDP/year more than ours at the most. (these are just rough estimates though I admit)

The problem with the Greens is not 'unaffordable' policies. That's 'Liberal-Speak'. It’s rhetoric which can rationalize opportunism on austerity for instance. It’s loaded-rhetoric which ‘locks in’ small government.

The real problem for the SL is that Greens gains are losses for the ALP Left within the PLP (Parliamentary Labor Party): affecting our policy influence as far as policy is determined by Cabinet. (or the Shadow Cabinet as it is for the time being) And a common accusation is that sometimes the Greens distort facts on Labor Policy to achieve that.

But despite claims to the contrary, people who were insisting that we needed Greens preferences to win were proven right. We cannot escape from the fact Labor and the Greens need each other.

So for the most part "big spending" promises are 'not the problem'. Promoting incremental extension of social insurance, social welfare and the social wage - should go without saying for Labor. We did not go far enough on tax reform and superannuation concessions reform. Yet nonetheless it was the most promising economic platform we've promoted in years. By this I mean it was the first election in years where we had not locked ourselves arbitrarily in to a policy of holding spending and tax down as a proportion of GDP.  

Probably  we retreated on policy in the face of bad responses in focus groups and polling. (take our retreat on Aged Care funding)  This suggests that while we began selling our message earlier than usual, we could have began even sooner. Because selling a message which challenges 'common sense' Ideological assumptions (as Gramsci may have put it) takes time and effort. (especially with a hostile media)   Our aspiration should be to raise social expenditure and investment by perhaps 2.5 per cent of GDP upon taking government after the next election.  (maybe more if you factor in cutting superannuation concessions)

If people want evidence of the need to begin campaigning early then look at the disinformation on Medicare privatisation in the media and from the Liberals. Privatisation was narrowly interpreted as ‘selling an asset off’. Labor’s message was therefore deemed a ‘scare’. Yet upon reflection Labor’s implicit definition of privatisation is legitimate. Medicare is a relatively modest scheme of socialized medicine by some international comparisons:  providing for the costs of a variety of consultative services and procedures publicly.  Nonetheless, Medicare (and the PBS – Pharmaceutical Benefits Scheme)  contain national health costs radically compared with the overwhelming dependence on private health cover in the United States. The danger, though, is that we are nonetheless developing into a ‘two tiered’ health system in health as in education. With increasing degeneration into Galbraith’s ‘private affluence, public squalor’.   The more this progresses the more entrenched the situation becomes ; and the more divided the country grows on the basis of social class.

This - accompanied by growing out-of-pocket expenses - would be both inefficient and unfair: an expression of the principle of privatisation as opposed to socialisation. 

But Medicare must be extended as well as defended. Medicare does not currently include comprehensive dental, podiatry and physiotherapy , or medical aids like glasses, hearing aids or prostheses.  We need a reforming government which provides for this through the progressive reform and extension of the popular Medicare Levy without austerity elsewhere.

It’s also notable that we sold NDIS (National Disability Insurance Scheme) well in the past. But we can't sustain an argument that improved social wages and social insurance can be provided without significant tax reform elsewhere. $7 billion from negative gearing and Capital Gains Tax concession reform was important. (adding up to 0.4% of GDP)  At least we were somewhat on the front foot. And Labor’s defensive stand against $50 billion in Company Tax cuts was crucial to its message ; and to a revolt in sections of the electorate against ‘corporate welfare’.

But I think we can and should do better. It requires planning and arguments put well in advance. It requires promoting a public debate which challenges peoples' assumptions about the desirability (or undesirability) of 'small government', low taxes, the importance of social investments, social insurance and so on.  It requires a party of activists – mobilized to a significant degree throughout the whole electoral cycle.

In short: we need an ALP with a vision reconceiving of a 'forward march of labour'. An idea of what 'progressive' actually means. That is 'how we want to progress things’. And that must mean an extension of social insurance and the social wage ; an emphasis on public infrastructure and services ; a more progressive tax system - and so on. Which takes real resources- Hence the emphasis on tax reform.



But both sides capitulated to short-term opportunism on superannuation concessions - which will be costing tens of billions to benefit the rich and the unambiguously well off. With the new parliament it is to be hoped that the impending $50 billion bill for superannuation concessions will drive policy by necessity. And Labor can use its position in the Senate to ensure these changes are fair for middle and lower income Australians. Hopefully Xenophon can be convinced of this also. His votes will be crucial. Also thankfully while Labor did not develop a strong enough policy, here, at least at the early leaders’ debate Shorten kept his options open on future reform. Turnbull by comparison locked into ‘no further reforms’. It will be interesting to see if he sticks to that.



The Liberals will accuse us of being 'big-spending'. But that is rhetoric we need to refute vigorously. My personal ambition was to see Labor increase tax and related social expenditure by maybe 2.5% of GDP in its first term. (that that is considered 'radical' shows how far we've regressed in this country from anything like social democracy)

But even increasing progressive tax and associated expenditure by 1.5% of GDP (or $24 billion/year out of a $1.6 trillion economy) in a first term Labor government would be meaningful. That should be ‘the policy floor’ – which we resort to only if necessary - and below which we compromise no further.



Crucially: there are vulnerable people who need our help sooner and not later. That includes the elderly, the ill, the disabled, the poverty-stricken, and the long term unemployed for a start. This requires tens of billions new spending to be meaningful.

With Shorten’s election campaign appearance on QandA, he was confronted by an aged pensioner who argued that an unforeseen contingency (eg: a broken washing machine) could send her broke. In other words, that it may come down to a choice between paying bills, seeing the doctor, or feeding oneself. Shorten conceded there was ‘nothing he could do’. Which probably translates as: ; ‘internal polling shows people don’t want higher taxes’ or that they ‘resent pensioners’, and hence Labor was ‘cutting some of the most vulnerable loose’. We have to do better than this next time. And the way we do that is through a solid campaign footing for a full three years between now and the next election.



But keep in mind that's in the context of a $1.6 TRILLION economy. We're talking about affordable reforms that the media and Conservatives will portray as 'radical' and 'irresponsible'. The Liberals especially don't want to compromise at all on their 'small government, neo-liberal, laissez faire' Ideology and agenda. No matter what the cost to vulnerable and disadvantaged Australians.

In fact we need to develop a public debate about how low social spending and how small the public sector are in this country - and why moving closer to the OECD averages - even if only gradually - would be a good thing.

I have argued to increase spending and taxes by roughly 2.5% in the past.  I don't think we can just transplant the entire Swedish model over two or even three terms. But I do think gradual progress is possible. And depending on unforeseeable circumstances perhaps it could be less gradual.  (history is interspersed with ‘watershed’ moments which had not been predicted)

Let's say we had a pool of $40 billion extra a year to work with out of a $1.6 trillion economy. (ie: 2.5 per cent of GDP) And then maybe cut superannuation concessions by around $15 to $20 billion to start as well. (out of approximately $50 billion)

With that we could do a great deal if not all of the following:   

·         Fully Implement the Gonski education reforms, and NDIS

·         reform and extend Medicare into dental, prostheses, optometry, physio, psychology, podiatry ; cut waiting lists ; stop the encroachments of increasing co-payments

·         increase investment in public and social housing

·          implement a National Aged Care Insurance Scheme

·         reform Mental Health with more proportionate resourcing of the sector and policies to tackle mental-health related early mortality – with perhaps 300,000 Australians suffering schizophrenia, for example,  dying 25 years earlier than the general population. ;

·         introduce a Universal Basic Income (UBI)  as proposed by NSW Labor policy activist Luke Whitington, and begin eliminating poverty.

·         also fund various infrastructure projects publicly as opposed to creeping privatisation- with the consequence of passing efficiencies on to the broader economy.

·         top up local government with federal funding - redistributing resources to help local government in working class and disadvantaged areas to provide better quality services and infrastructure.

·         Pay for a reparations component of a Treaty with indigenous Australian peoples

 

·         Implement a trial 'co-operative incentive scheme' to support the development of co-operative enterprise in Australia  - supported by tax breaks, cheap credit, advice., and in some instances government co-investment

·         Reform welfare payments – Aged, Disability, Sole Parents; Student Allowance; Carers etc; increasing by $50/week plus inflation perhaps over two terms

 

·         Finally we could reform higher education and make the HECS system far more progressive. Raise the minimum repayment threshold for a start.   And implement Industry and Labour Market policies which bring us closer to full employment: with a big boost to the Budget bottom line.

What's important over the next year or so it that we adopt the posture necessary to promote the next wave of reforms in what they used to call ‘the forward march of labour'. ALSO even in the wake of our election loss we should still aim for a Company Tax rate of 30 per cent or higher and not back down from that. (ie: whether in government, or vetting legislation in the Senate)  Because it is both necessary and reasonable for the corporate sector to contribute to the services and infrastructure it benefits from. The alternative is neglect - or otherwise 'corporate welfare'. 

Sam Dastyari’s estimate that corporate tax evasion is costing $31 billion a year is also relevant here.  And you would think Labor needs a stronger policy than it took to the last election.  That is: Labor’s policy only aspired to claw back $2 billion of this over 4 years.

Labor desperately needs a sense of what its professed ‘forward march’ comprises ; and why that is desirable and right.  Let’s begin a debate sooner rather than later: moving Labor onto ‘the front foot’.  This means shifting straight away to a ‘permanent campaign mode’ based on ‘solid but partial mobilisation’ through the activism of our rank and file.  (full mobilisation throughout the entire electoral cycle could prove exhausting, however)  Also we need to implement an early release of ambitious policies which our activists and supporters could mobilise around.  We don’t want to be pressed again to retreat on crucial policies (for example Aged Care funding)  due to public fears re: the presumed need for a Budget surplus and low taxes – as occurred in the recent federal election campaign.

A non-binding ‘policy conference’ some time over the next year could also help mobilise the enthusiasm of Labor’s rank and file ; inspiring innovative policy development to drive Labor towards the next federal election.  Contrary to Bowen this Conference should not replace the binding ALP National Conference which determines Labor's Platform.

Critique of Labor and The Greens on ‘Policy Compromise’

 above: Labor and the Greens can work together; But need to be conscious of each others' electoral imperatives ; Carbon Tax was good policy ; but a 'political death warrant' for Labor

 

 

Dr Tristan Ewins


Recently the Australian Greens negotiated a compromise with the Liberal Federal Government in Australia on the question of pursuing tax evasion by “Australia’s wealthiest private companies”. ‘The Age’ reported that as part of the compromise “Up to 300 of Australia's wealthiest private companies will be forced to disclose their annual tax bill for the first time.” But that the legislation also will “shield up to 600 more companies that would have been brought under new transparency requirements.”

Labor has branded the deal “a sellout”. They had pressed for all companies with revenues of over $100 million to be affected by the reform – whereas the Greens negotiated a compromise with a threshold of of $200 million. Labor argued a compromise was not necessary – on the assumption the Government itself would have been forced to compromise before the end of the sitting of Parliament.

(Read more: http://www.smh.com.au/federal-politics/political-news/greens-deal-with-scott-morrison-on-tax-shield-sparks-labor-fury-20151203-gle9ft.html#ixzz3taKrNOA9
Follow us: @smh on Twitter | sydneymorningherald on Facebook )



Also considered recently in discussion has been the decision by the Greens several months ago to agree to another compromise - tightening means tests on Aged Pensions in order to save $2.4 billion over four years.

By contrast Labor was arguing for reform of Superannuation Concessions delivering windfall gains to some of the very most wealthy: though arguably Labor wasn’t considering a broad enough base (including the upper middle class) in order to bring in serious revenue without need for unfair austerity elsewhere.

To summarise: Shorten’s plan foreshadowed savings of $14 billion OVER TEN YEARS. But the Government is facing a deficit ballooning to over $40 billion a year ; and root and branch reform of tax is what is necessary – not only to get the deficit under control, but to pave the way for a reforming Federal Labor Government which actually improves the social wage, social insurance and social welfare by tens of billions in the context of a $1.6 trillion economy.

Again by contrast: The deal agreed to by the Greens with the Liberals had 170,000 of the most financially disadvantaged Pensioners standing to gain $30/week as of 2017; But approximately 330,000 (relatively better-off) Pensioners would see cuts through tougher means tests ; and more than double that into the future.

(See: http://www.smh.com.au/federal-politics/political-news/pension-assets-test-deal-with-greens-secures-coalitions-changes-20150616-ghplxg.html )  

The following are some excerpts regarding my thoughts: not only on this specific compromise, but on the ALP working with the Greens generally.


SL in relation to the Greens ; Is it right for the SL to Criticise ALP Policy?


At the ‘ALP Socialist Left Forum’ Group we’ve had plenty of debate on the place for criticisms of the ALP. Should criticism be considered ‘treason’ of some kind? Should we work for co-operation with the Greens – or should we fight them tooth and nail on account of the threat to several of our most talented Left MPs ; and the likelihood of declining Socialist Left influence in Caucus and Cabinet?


Nonetheless: Labor often gets it wrong on policy. For instance, we often pursue symbolic policies for appearances sake which are far from the ‘root and branch’ reform needed to serve the interests of our constituents. Shorten’s Superannuation Concession reforms are very modest , and at this rate Labor will be pressed to pursue extensive austerity if we regain government. Perhaps regressive policies such as more attacks on vulnerable groups such as Sole Parents. Or an increase in the Age of Retirement. And yet Labor’s Platform leaves the way open potentially for an expansion of progressive tax and social expenditure. Labor still has options for a genuinely progressive mandate.

If as the most significant Left formation in the country (The broad ALP Socialist Left) we do not criticise our own party's policies when our leaders get it badly wrong - then who will step into that space? There are a number of possibilities. Either groups like the Greens will step into that space ; or because of our silence the Left more broadly will be demobilised. This would especially be a threat if the Greens’ tending towards compromise marked ‘a move to the Centre’ which again would leave a space in the Left of the Australian political milieu. A new challenger on the Left of Australian politics could take a long time to re-emerge therefore ; just as it has taken decades for the Greens to establish themselves properly. This would simply assist the broad Australian Right in consolidating their hegemony.


 Don't get me wrong:... I'm all for staying and fighting within the Party. But when the Party leadership gets it badly wrong its up to us whether we vacate that (public) Left space and/or demobilise the Left - or whether we choose our battles - and publicly dissent at times – in the context of important debates – such as a much more robust winding back of superannuation concessions for the wealthy and the upper middle class. We must do this because there is the alternative of Left demobilisation. And before we know it even our own people don't know what we're supposed to be fighting for anymore... (take privatisation, tax reform, social wage and welfare expansion and reform, industrial rights and liberties etc)


Insofar as criticism is constructive we shouldn’t just tolerate criticism of Labor policy - indeed it must be encouraged.

Nonetheless, the trend towards Labor and Greens just trashing each other always seems to involve a degree of 'spin' and is not necessarily 100% honest. What we need is honest, reciprocal criticism.


 There's also the urgent question: What will WE (ie: Labor) do on Company Tax? Here we really need ALP and Greens to team up and vote down Company Tax cuts - because that is Corporate Welfare. That is business avoiding paying their share for the services and infrastructure they benefit from! So instead ordinary citizens, workers, taxpayers - are left to pick up the tab – directly or indirectly. (whether with an increased GST, or austerity elsewhere) Where does Shorten line up on this? (seriously) There are many billions at stake.


More on Greens Compromises


Regarding Greens’ compromises it must be observed: It’s the old dilemma over whether to compromise and get something 'right here right now' - or whether to hold back - in the hope of discrediting the Conservatives - and getting something much better with the next change of government. Labor has faced these dilemmas itself at times.


 For instance, the Carbon Tax was the best policy - but was politically impossible after Gillard’s commitment "There will be no Carbon Tax in a Government I lead". The Greens should have recognised this. There were other options. Like billions in annual direct public investment in renewables research and infrastructure. In a convoluted kind of way the Greens’ insistence on the Carbon Tax could even have been considered an instance of opportunism in its own right. The Greens got their policy – and it granted them prestige with their constituencies. But arguably it sealed the fate of the Labor Government. This is not to say the Greens shouldn’t press their leverage to get robust policy compromises from Labor. And arguably Julia Gillard should never have backed Labor into that corner in the first place. But direct investment in renewables research and public infrastructure would not have involved a blatant, high-profile broken promise. Of note: Labor must not back itself into a corner on ‘small government’ now either!



What Reforms must Labor and the Greens pursue now as the 2016 Federal Election approaches?

Instead of just positioning against each other with the hope of gaining an electoral advantage over largely ‘cosmetic’ policies, again Labor and the Greens should be projecting root and branch reform in any Labor Government where the Greens hold decisive sway over the cross-benches


 More specifically: Labor and the Greens need to move together to secure a minimum $35/week increase in all full pensions INDEXED upon Labor taking government.
This must include Newstart and Student Allowance. Although I've been arguing for this for years already and $35/week isn't as much as it used to be. Full indexation is crucial, and perhaps now the figure should be somewhat higher. (eg: $40/week


Also in an exchange at the ALP Socialist Left Forum Facebook Group I accepted the need for subsidies to help the elderly invest in air conditioning and heating. Increasing the Aged Pension should be part of that. Existing pensions and payments make insufficient consideration of contingencies which vulnerable Australians may be faced with. From a visit to the dentist to having to replace a washing machine – such everyday challenges can leave our most vulnerable destitute.

Some would call the Greens' compromises through 2015 opportunism. Labor would attract that claim from the Greens themselves if it was Labor who had made the compromises. The Greens are trying to shake off their reputation as a ‘protest party’ – which never has to compromise. Labor argues the Greens are about appearances re: policy protest – but are not about outcomes.



But there is the argument that some of the compromi...ses the Greens have pursued have helped the most vulnerable. Though in a way which has hardly been fair to some people who would not fairly qualify as 'rich'.

There are two sides to this. What matters is that if we get a Labor Government - and if the Greens hold the cross-benches - there will be no more need for 'compromise with the Liberals'. And in that case we should see the whole policy schema recalibrated in a way which is truly fair - and doesn't involve 'compromises' whereby one constituency (not really 'privileged' by any reasonable measure) is played off against another (truly, genuinely disadvantaged). Better to target the top 15 per cent income and wealth demographics for redistributive measures aimed at improving the lot of those on low and middle incomes ; workers and vulnerable welfare recipients.


Target 'the top 15 per cent' as it is a narrow enough constituency for redistribution to be fair ; narrow enough to be electorally viable ; and broad enough to bring in serious revenue for serious reforms...
 

The problem right now is that most in the Parliamentary Labor Party will oppose taxing the sole residence of the elderly - fair enough - but they may not support other progressive measures (as listed) necessary to repairing the welfare state, social insurance and social wage.

Ideally we should pursue a more progressive tax mix which does not necessitate the elderly being forced to sell their home towards the end of their lives when familiarity can be so important. We should hit superannuation concessions for the wealthy and the upper middle class. We should restructure the income tax mix radically. We should consolidate Company Tax and begin to gradually wind back D...ividend Imputation - which most advanced economies manage to do without. (worth over $20 billion now) Perhaps we should tax the banks. And perhaps we should tax the largest inheritances ; and introduce a Tobin Tax on financial transactions. Finally we should definitely raise the Medicare Levy - and progressively restructure it into more progressive tiers.

With this we can bring in tens of billions. We can introduce National Aged Care Social Insurance ; we can implement Medicare Dental, Physio and Optical and cut waiting lists. We can fully implement NDIS. We can implement Gonski and transform HECS into a genuinely progressive tax. We can invest billions into social and public housing, as well as infrastructure of all kinds – increasing housing supply , making housing affordable , providing transport and services to new suburbs. We can revivify Legal Aid, and we can provide Federal Funding for Local Government - to make Local Government less dependent on relatively regressive levies/council rates. And we can reform welfare, support payments and pensions and lift the most vulnerable out of poverty. Finally, we can invest in the ABC and SBS. That's what we should do ; and it doesn't necessitate driving the elderly from their homes - even if their homes are valuable. And especially if their residence is their major asset - and they are not wealthy aside from this by any reasonable measure.


In conclusion – Labor needs to settle on policies of depth and substance. Because while ‘cosmetic’ policies may win over some voters – that is not our ‘reason for being’. Labor should not be driven by the quest for government purely for its own sake: outside the context of winning deep, meaningful reforms. Before Thatcherism and the decades-long retreat of the Left there was reference to the notion of “The Forward March of Labour’. We need to reconceive of our reform trajectory. Of what comprises our ‘forward march’ on policies which reform social wage, social insurance, welfare, personal and collective liberties, the extension of democracy – and more.

And we need to establish our reform trajectory quickly and soon if we are to have the time and the opportunity to sell such a package to voters ahead of the Federal Election in 2016.