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

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

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

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).

Labor needs a policy ‘circuit breaker’ - NOW

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!

Election 2010: Final thoughts as Australia goes to the Polls

above: Fibre Optic Broadband is essential to Australia's economic and cultural future

In this article Tristan Ewins examines some issues that could be crucial for Australians still to decide their vote for the August 21 2010 Australian Federal Election. Indeed, there are many issues who haven't received anywhere near enough exposure.

Australia goes to the polls this coming Saturday: August 21st 2010. But some voters will not make their decision until the final day. Others might not even decide until they arrive to vote.

That said, what kind is issues might play on such voters minds as they make their decision?

What follows is a consideration of some questions which might influence voters – even this late in the campaign.

Would-be-Prime Minister, Tony Abbott opposes the National Broadband Network; claiming it's too expensive, and that it shouldn't be public. But privatisation of Telstra created a private INTEREST which obstructed modernisation of communications infrastructure to defend its own profits. Does Abbott want to repeat this mistake?

He is also proposing an alternative to the National Broadband Network which makes use of inferior technology. This infrastructure should last decades; but if we don't invest in fibre optic broadband now, we will have to do so in the future. Tony Abbott talks of ‘waste’, but given his $6 billion commitment to broadband based on inferior technology, and its probable short-term life span, does he really know what he is talking about?

As compared to the Abbott proposal, Communications Minister Stephen Conroy expects under the NBN “speeds of up to 1000 megabits per second”, 10 times the speed originally envisaged by the government. Conroy described Labor’s NBN investment as being "truly about future-proofing". http://www.theaustralian.com.au/national-affairs/taxpayers-to-pay-no-more-for-nbn-with-even-faster-download-speeds-labor/story-fn59niix-1225904313190

Another commitment from the Abbott campaign is their determination to drop the resource rent (ie: mining) tax which gives the people a share of profits which come from resources belonging to all of us. Rio Tinto and BHP now accept the tax. But Abbott’s plan to drop the tax would cost the budget bottom line over $10 billion a year.

This, in turn, raises the question: What SPECIFICALLY will Abbott cut - amounting to a full $10 billion a year - in order to pay for this promise? Will he take the knife to Health again? Already we know he plans to abandon GP ‘Super Clinics’ designed to take the pressure from hospitals.

Abbott wants to implement a Parental Leave scheme which will discriminate against parents on low and middle incomes. According to Jenny Macklin, Abbott’s scheme: “would provide high income earners living in cities with up to $75,000 and hairdressers, cashiers and hospitality workers much less.” http://www.alp.org.au/federal-government/news/abbott-team-question-his-judgement-on-paid-parenta/

But even voters on low incomes would pay as a proportion of costs from Abbott’s Company Tax levy would flow through to all consumers.

Abbott’s parental leave scheme would initially cost over $8 billion over the first two years. Voters on low and middle incomes would effectively subsidise those on high incomes. Is this fair? Why should voters on low and middle incomes vote for this?

By comparison Labor’s existing scheme “provides 18 weeks' pay at the minimum wage, currently about $570 a week”: a flat rate for all. http://www.smh.com.au/federal-election/gillard-fires-up-over-parental-leave-20100731-110q0.html

There are crucial questions on taxation policy, also, which have barely featured in media coverage. Abbott is considering the Henry Tax proposal for a flat 35 per cent rate for earnings from $25,000 up to $180,000. Michael Stutchbury of ‘The Australian’, however, thinks there may be complications. http://www.theaustralian.com.au/national-affairs/commentary/no-wonder-hes-cautious-on-tax/story-e6frgd0x-1225902762475

These concerns, and also some of my own, are as follows.

How will this affect overall revenue? Where's the money coming from? Will the GST rise? And where's the fairness taxing an average income earner at the same rate as a person on $180,000/year? Will Abbott announce the FULL details of his plans for tax well ahead of the election day? Voters deserve the full story.

Then there are Liberal claims about ‘debt’ and ‘waste’.

In fact, Liberal claims of ‘stimulus waste’ are greatly exaggerated; and their advertisements downright deceptive. At first, Liberal ‘attack ads’ accused Labor of an ‘$8 billion waste’ on ‘school halls’. This has now been revised to ‘UP TO $8 billion’.

‘The Age’, however, reported that the costs of Labor’s ‘Building the Education Revolution’ (BER) infrastructure program “blew out by [only] up to 12 per cent”. Any blow-out is obviously a problem; but the Liberal response via their ‘attack ads’ has been one of extreme and deliberate exaggeration. http://www.smh.com.au/federal-election/school-building-costs-blew-out-by-up-to--12-per-cent-inquiry-20100806-11lpi.html

Despite the hype, the Sydney Morning Herald has reported that only 2.7% of all schools engaging in infrastructure projects funded by Labor's BER program have reported problems with the program! See SMH: http://www.smh.com.au/business/claims-of-stimulus-waste-were-greatly-exaggerated-20100808-11qdj.html

And meanwhile the BER program provided economic stimulus when it was desperately needed: with school communities all over the country now enjoying vital infrastructure which will enhance education processes and outcomes for generations.

Tim Colebatch - Economics editor of ‘The Age’ - has also blown Liberal claims to the ‘high ground’ on debt out of the water. Writing on August 12th, Colebatch claimed that the Coalition “has used up almost all its budget savings for new spending and tax cuts, leaving it with a bit over $1 billion of net savings over the next four years - on its own costings.” http://www.nationaltimes.com.au/opinion/coalition-cuts-amount-to-just-01-of-budget-spending-20100811-11zss.html

To put that in context, with an economy valued at over Aus $1.1 Trillion, we’re referring to less than 0.0025% of GDP in additional surplus for the Coalition as opposed to Labor.

Here would-be-PM-Abbott is playing upon negative preconceptions built up with regards Labor and economic management: but the reality is that Labor stimulus prevented recession, and Coalition claims on debt management simply have no substance.

Recession under Abbott would have meant a downward spiral of unemployment, falling public revenue and government debt. Abbott has been ‘running scared’ from a debate with Gillard on the economy. He doesn’t want his policies subjected to real scrutiny.

Under Labor Australia has maintained its ‘AAA’ credit rating, aiming for a return to surplus – after the critically-required stimulus - within 3 years. http://www.factsondebt.com/Fact-1.aspx

And drawing on Treasury statistics: “Australian Government net debt is expected to peak at 6 per cent of GDP in 2011-12 compared with a peak of 94 per cent of GDP for the G7 economies.” http://www.factsondebt.com/Fact-1/Fact-3.aspx

And regardless of this, fears about public debt need to be placed into perspective.

Reduction of public debt under the Howard Coalition government came from privatisations – asset sales which saw reductions in debt matched or outstripped by reductions in government revenue.

And neglect to modernise infrastructure and invest in education - as typified under Howard - costs the economy in the long-run. Obviously what’s needed is a balance between managing debt, and investing for the future.

Neglected issues and final observations

There are other issues which also have been neglected during the campaign, and in media analysis of policy.

Firstly: affordability and availability of housing.

Under Howard a housing bubble developed which grossly inflated property values. This means that even modest movements in interest rates have a greatly magnified effect on mortgage repayments. Many can no longer afford home ownership.

What is needed is a massive investment in social housing; not only to provide for the poor and vulnerable; but crucially - to increase supply and make housing affordable again. Simply releasing new land alone isn't enough, though - because there is the added cost of new infrastructure. Neither major party is leading on this issue, afraid to make an investment of the necessary scale to make a real difference. Greens policy on this issue seems deeply-thought-out; but on their policy websites they provide no costings. http://greens.org.au/policies/care-for-people/housing

Secondly, there is the demographic challenge, and the need for a reformed social wage

Australia has an ageing population; which means in the future we'll have lower labour market participation. This will effect revenue and squeeze funds for services, infrastructure and welfare. We also have tendencies towards labour market polarisation which means we need a stronger social wage in areas such as health, education, welfare and transport. This needs also to be complemented with subsidies for energy and water, as well as communications; and intervention to support social participation. The consequence is that we need progressive tax reform to maintain welfare, infrastructure, services. Who will do the right thing and progressively reform tax?

Finally, there is the matter of a National Disability Insurance Scheme (NDIS).

Australian Medical Association (AMA) President, Dr Andrew Pesce, stated in July of this year:

“Labor’s draft National Disability Strategy is based on the right for people with disability to enjoy full and effective participation and inclusion in society, and the right to have respect for inherent dignity, individual autonomy, including the freedom to make one’s own choices, and to be independent.” http://www.ama.com.au/node/5906

According to the Australian Institute of Health and Welfare estimates there are 1.5 million people [in Australia] with a severe disability and that will grow to 2.3 million by 2030. http://www.theaustralian.com.au/national-affairs/commentary/disability-group-mad-as-hell-and-ready-to-fight/story-e6frgd0x-1225845897896

All of us; and all our families are potentially at risk. Therefore: providing dignity, security and participation for those affected is a matter of personal interest to all of us. It is also a matter of human decency.

According to ‘The Australian’ an NDIS would come “with a price tag: a net $4bn to $5bn a year to cover people aged under 65.” http://www.theaustralian.com.au/national-affairs/commentary/disability-group-mad-as-hell-and-ready-to-fight/story-e6frgd0x-1225845897896

That’s about half of what it would cost for Abbott to cut the resource rent (ie: mining) tax.

And of course the elderly must be fully covered also.

A new levy similar to the Medicare Levy could be established at a rate of 1% or 1.5% for taxpayers.

But regardless of the human need it appears the major parties are shying away from such fundamental and urgently needed reform: as a consequence of the price tag.

Again, the Greens have supported an NDIS type scheme in principle, but haven’t put a dollar-amount on that commitment. http://greensmps.org.au/content/media-release/transformative-change-disability-services-essential-equal-future-greens

This author is still hoping Labor will announce a NDIS as a last minute ‘drawcard’ establishing Labor’s superior credentials in Welfare and Health, and providing scope for enhancement of mental health services.

Conclusion

There are many important issues facing voters in this election. Labor acted quickly in response to the Global Financial Crisis. Labor stimulus was swift – as necessary – but moving so quickly inevitably involved some waste. The alternative was recession.

Although forced to compromise, Labor’s resource-rent tax will take in approximately $10 billion a year: providing scope for the Company Tax cuts that underpin an increase in employer superannuation contributions to 12%.

Labor rolled back the worst of WorkChoices – but there is more to be done. No worker should be worse off under Award modernisation; and workers deserve the right to pattern bargaining.

There are many other issues as we have discussed here also.

In the face of Liberal deception on debt, waste and stimulus, the real choice for socially and economically-conscious voters is between parties of the Left and Centre-Left.

There’s the choice of rewarding Labor for what reform it has achieved; or trying to nudge Labor into further action by voting for the Greens.

Some will not be able to stomach the kind of pragmatic electorally-driven decisions Labor has made: for instance with regard to refugees. And Green balance-of-power in the Senate may spur more of the kind of reform as we saw with Labor and the Greens having worked out reform of Disability and Aged Pensions in response to a rising cost of living.

But rewarding Labor for what it HAS done right may provide the motivation – and the self-interest - for more reform as well.

This election will be close. Every vote matters. Make your vote count on August 21st.

AND ALSO: If you enjoyed this article 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

FINALLY: This article should be re-appearing in On Line Opinion Wednesday or Thursday this week - before the August 21 election.   Feel welcome to let your friends and contacts know, and contribute to this last minute debate at On Line Opinion when it takes place.  It's worth contributing as there should be thousands of readers.