Letters from a Labor Activist ; November/December 2016

above:  Humanity does not Live by Bread Alone ; What about Democracy and Political Literacy in our Educational Curricula?

Progressive Letters to 'The Age' and 'The Herald-Sun' ; (November/December 2016) ; Everything from ‘Public Debt Shibboleths’ to Privatisation, Defending Democracy,  The Right Protest, Education for Politically Literate and Active Citizenship, and more ; Please feel welcome to read and comment on the articles, share via Facebook and so on.

Dr Tristan Ewins

Is there a public debt crisis?  Or is the Crisis one of Private Debt?

(Debt letter One)  (Unpublished)  Regularly we are warned of the ‘immense threat’ of government debt.  But its best, here, to use the measure of ‘net debt’ which also includes revenue from government assets.  (instead of ‘gross debt’ - which does not)  For example, with the privatisation of assets like the Commonwealth Bank gross debt fell, but net debt worsened significantly.  Australian Government  net debt was recently measured around 18 per cent of GDP : approximately $285 billion in an economy around AUS $1.6 billion.  But HOUSEHOLD debt – ie: the debt owed by Australian individuals and families – is over 100% of GDP -  over $2 TRILLION.  Private debt is clearly the bigger threat. The Liberals try and offset private debt with public austerity – in health, education, welfare, infrastructure. But these areas are often more crucial to our well-being than private consumption.  So arguably we need a BIGGER social investment in these areas as opposed to cuts. We need a more balanced approach ; containing debt long term – without gutting public services and infrastructure, or destroying  jobs and growth.  And now is a good time to invest in potential income bearing (and other) government assets – on account of low interest rates.  A big investment in public housing could also make housing more affordable –  making significant inroads into private household debt.  We also need an industry policy to achieve full employment –and full time jobs for those who want them.  That could offset an ageing population without resort to measures like raising the age of retirement.

References:

http://www.natsem.canberra.edu.au/natsem-budget/natsem-pre-budget-2016-state-of-play/how-much-public-debt-do-australians-have/

https://theconversation.com/election-factcheck-has-100-billion-been-added-to-australias-national-debt-under-the-current-government-60701

(Debt letter Two) (Published) Bruce Hambour (Herald-Sun Letters, November 2016)  writes that debt is getting so out of control that welfare must be cut to rein it in. But why start by cutting the payments for some of our most vulnerable and disadvantaged Australians when there are other options?  Why not drop massive corporate tax cuts, and other tax cuts for the well off?    Why not cut back Superannuation Tax Concessions – mainly beneficial to the well-off – whom taxpayers are effectively subsidising by tens of billions every year?   Also public sector debt is actually negligible compared with private debt.  (approx. 30% of GDP compared with 200% of GDP)  The housing bubble hasn’t helped ; and what’s needed are big investments in public and social housing (to increase supply), and in infrastructure and services (to ensure quality of life).  Also Conservatives attempt to play the working poor of against the vulnerable welfare-dependent.  (divide and conquer) That’s better fixed by raising the minimum wage, and improving the social wage for the working poor.

Herald-Sun Op-Ed Describes Labor Left Opposition to Privatisation as “Extremist”.

(Published)  James Campbell (Herald-Sun, 24/11) depicts Labor Left opposition to privatization as ‘extremist’.  But what grounds are there for this opinion?   Most Australians did (and still do) oppose privatization of important government assets.  And the longest-serving Australian Liberal Prime Minister, Robert Menzies, presided over a relatively larger public sector (and more steeply progressive income taxes) than Labor governments of the 80s and 90s.  The ‘extreme’ tag is a flippant way of dismissing an argument without having to engage or justify your position.  ‘Natural public monopolies’ (eg: in water, communications, energy) would reduce costs for the broader economy.  And Medibank Private’s recent privatization saw private health insurance costs rise as the newly-privatizated corporation arguably began abusing its market power.   The Commonwealth Bank can also make profits close to $10 billion now.  That means our net government debt position is much worse now because of its privatization.  Since its privatization there have also been problems with fees, and the quality of services for regions and financially disadvantaged customers.

Herald-Sun letter calls for ‘Technocracy’ in place of Democracy

(Unpublished)   Simon Hammond (Herald-Sun, 26/11) claims democracy is to blame for weak and indecisive government .  Instead he suggests a kind of ‘government of experts’. (a technocracy) But the problem is not democracy ; it is particular practices such as poll and focus-group driven politics ; and ‘gotcha’ politics’ which neglect the substance of policy choices.   Another problem is the major parties all aiming for ‘the centre ground’ ; not standing up for their beliefs. (‘Convergence politics’)   That means weaker pluralism. That is, less choice.  In fact we need a stronger democracy.  A free multi-party system is meant to ensure scrutiny of public policy and social issues ; but often media neglect the substance ; and politicians respond by playing to shallow agendas.  We need to transform our society ; which could be achieved partly through educational curricula for active and politically literate citizenship ; which is ideologically inclusive and  encourages students to think about – and stand up for - their rights and interests. 

Responding to Andrew Bolt on the causes of the Trump Victory

(Unpublished)  Andrew Bolt calls the Trump election victory “a revolt against the Left’s arrogance” (Herald-Sun, 10/11). But reality is more complex than this.  A neo-liberal consensus  - a particular INTERPRETATION of ‘globalisation’ - has prevailed around much of the world, facilitated by BOTH the parties of the Right and of the ostensible Centre-Left. Working class people who had lost their identity, as well as their economic and social security with the destruction of their jobs – gravitated towards a promise to restore America’s industrial base.   Trump’s old school protectionism might not be the answer, but Nordic-style, targeted industry policy might serve better.   Policies which promote high value-added manufacturing alongside Research and Development, and promotion of information and communications technology industrial development.   The US Left needs to actively court the working class – including white males – with policies that offer the respect and security which could be key to building a broad electoral bloc, and rolling back Trump’s support base.

Why Scott Morrisson and the Liberals are Wrong on Company Tax Cuts

(to both the Herald-Sun and The Age ; Unpublished)  Today (28/11)  it was distressing to see Treasurer Scott Morrison in Question Time defending massive cuts to Company Tax.   He referred to Trump’s objective of a 15% corporate rate, and suggested Australia needs to be ‘competitive’.  But the United States had enjoyed a maximum corporate rate of 35% for many years under both Republican and Democrat Administrations.  Elsewhere, the reality is that high quality social services, education, infrastructure are ‘pull factors’ for investment as well.   And this needs to be paid for somehow.  The Conservative approach is ‘corporate welfare’.  That is: the corporate rate is cut - but workers, pensioners, families ‘pay the price’ one way another.  Through unfair ‘replacement taxes’ like the GST , or through a neglect of services and infrastructure which is arguably bad for investment anyway. We need international agreement to stop ‘the race to the bottom’ in corporate taxation.  Without this the economy will suffer anyway – as ‘corporate welfare’ takes income away from the very workers  whose consumption supports the domestic economy. 

Feminist Revolution must take account of class ; must be based on Mutual Respect and Empathy

(Unpublished)  Trish Thompson (‘The Age’, letters;  30/11) reminds us of “the privileges of being a white heterosexual male”.  But she makes no mention of social class .  That determines our quality of life ; where our kids go to school ; often the quality of our diet and health care; whether we can pay the bills and put a roof over our heads ; what else we can enjoy outside of work.  Other factors include whether or not our work is fulfilling ; and what economic (and hence political) power we have.  Why is class usually forgotten today ; or otherwise relegated to a subordinate position?  Age, body image and disability are also relatively neglected. We are in the midst of what might be called a feminist revolution.  What’s at stake is whether or not that revolution is broadened in pursuit of genuine mutual solidarity and liberation.  Or whether there is a kind of ‘turning of the tables’.  Many men are reacting against discourse they see as inferring ‘masculinity’ and male sexuality are ‘essentially bad’.   Without mutual respect and empathy there will be a reaction and the feminist revolution might fail.

Working Class Men don’t have ‘a lot to gain’ from Deindustrialisation and the Consequence is Unemployment and Poverty

(Unpublished)  Jacqueline Maley  (‘The Age’, 3/12/16)  writes as if men have more to gain than lose through deindustrialisation. The reality, though, is that older skilled manufacturing workers will not find replacement work making use of their skill sets.  And service industry jobs are unlikely to make up for the 50,000 jobs lost in the car industry and supporting industries .  The notion that when men take up service industry jobs that these will rise in stature is questionable.   The balance of trade is another associated concern.  It is a function of capitalism more so than patriarchy that ‘unprofitable’ service jobs are devalued. For example, a better deal for both aged care workers AND residents might ‘eat into corporate profits’ – directly (eg: through higher corporate tax) or indirectly (with a reduction in private consumption power with higher income or consumption  taxes). That said we do need to ‘valorise’ caring (often ‘feminised’) professions.   We need a re-regulation of the most-highly-exploited end of the labour market.  To reform the tax mix and extend the social wage.  Resistance to the extension and improvement of social services is most likely to come from capitalists and their advocates in the so-called ‘political class’ rather than from working class men.

We Must be unambiguous on the Right to Protest ; and stand against even more regressive User-Pays in Tertiary Education

(Part-Published)  David Penberthy  (Herald-Sun 4/12/16) condemns the protestors who disrupted parliament the other day as ‘ratbags’. He goes on to support user-pays in Higher Education, arguing ‘Why should blue collar workers pay for someone’s Law degree?”   In response ; democracies must defend liberal and democratic rights, including speech, association and assembly.  But arguably a mature democracy – which feels secure in itself - accepts there will be occasions where differences of principle become so steep that accommodation must be made for civil disobedience as well.  Such flexibility helps define us as a genuinely *liberal* democracy.   Furthermore: Penberthy’s defence of user pays in Higher Education ignores the fact that were a greater portion of education costs shouldered through income and corporate taxes – then roughly people and interests would pay in proportion to the financial benefit gained.  And if we wanted to reform the Higher Education Contribution Scheme (HECS)  to make it fairer, then we might raise repayment thresholds.  There are many former students on less than the average wage who are forced to repay loans that bear no relation to their actual incomes.  Repayment thresholds have fallen relative to the average wage: and that is unfair.

 

Why Political Literacy, and encouraging Active Citizenship must Have Their Place in Educational Curricula ‘in a strong democracy’

(Unpublished)  There is a developing view (Herald-Sun Editorial, ‘Teach don’t Preach’ , 7/12/16) that ‘politics should be kept out of the classroom’; and that means not only that teachers ‘should not be advocating causes’ – but also that there should be a ‘back to basics’ movement emphasising science and maths.  The problem with this is that education needs to be for life – and while maths and science have their place,  education for politically literate and active citizenship can strengthen our democracy and empower our citizenry to work for their beliefs, rights and interests. To achieve bipartisanship – there needs to be a reformed National Curriculum – which exposes students to the ideas of BOTH the Democratic Left and the Democratic Right, while also imparting an understanding of other ideologies.  As the saying goes ‘man does not live by bread alone’.   An active and informed democracy should have bipartisan support across the Democratic Right and the Democratic Left.

(Unpublished)   Greg Byrne (Herald-Sun, 10/12/16) refers to  education about “gender, ethnicity and class” as “nonsense” that has nothing to do with finding jobs.   But the Humanities and Social Sciences involve research and writing skills ; the construction of detailed arguments , and evaluating complex information.  Also humanity ‘does not live by bread alone’.  (ie:  the labour market and work)  A stronger democracy (based on understanding and participation) rests on citizens’ political literacy (understanding political ideologies, values, movements, processes) and on their powers of expression.   The Humanities and Social Sciences drive us to ask fundamental questions about the human condition ; about ethics ; and thinking critically about democracy, economy and society.   In a strong democracy we must be empowered to make informed choices as citizens – regardless of whether we perceive ourselves as being of  “the Right” or “The Left”.  That means imagining alternatives to current social and economic arrangements in pursuit of ‘The Good Society’. Here,  assessing the balance of wealth, power  and opportunity in society is a legitimate question.

From Privatisation to the GST - Letters of Relevance to Labor

Above:  South Australian Labor Premier Jay Weatherill has Upset and Awful Lot of People in the ALP with his Position on the GST!

Dr Tristan Ewins


Comrades and others; The following are a series of letters I've written over the past couple of weeks - in the hope of being published in The Age, The Herald-Sun, The Saturday Paper...  I'm hoping by republishing them here I can spur further debate.  Topics covered include 'How Federal Labor Must Respond to Jay Weatherrill on the GST', 'Privatisation Now and Then', 'the Holocaust and Cold War Atrocities - Never Forget',  'Why Isn't Shorten Cutting Through?', 'Infrastructure and Population'.  Most of the letters were never published debate here could help make up for that I think! :-)

Privatisation Doesn't Make Sense - Never did make Sense!

The Herald-Sun (27/1) makes a point of the fact the Liberal NSW Liberal Government will have $20 billion to spend following privatisation of electricity.  But it ignores the associated cost of this privatisation.  To pay for private dividends and corporate salaries increased structural costs will be passed on to consumers in full.  Energy will be more expensive – and that includes businesses as well as voters.  Dividends from the energy sector will also be lost to NSW voters – probably forever.  To get a picture of this: The Commonwealth Bank privatisation brought in about $7.8 billion (the total for the sale of the entire business!!!   )after being privatised by the Keating Labor Government.  But in 2015 the Commonwealth Bank registered a PROFIT (for only one year) of over $9 billion!  Meanwhile the Federal Government is having to pay Telstra several billions to access the very pits and wires that were privatised under John Howard.  How has any of this ever been in the public interest?

Remember the Holocaust - and ALL other Atrocities - So they are never repeated

Dvir Abramovich (Herald-Sun 27/1)  makes some crucial points about teaching young people of the dangers of hatred and prejudice, as epitomised most horrifically by the Holocaust, and the associated industrial scale murder and persecution of Jews, Poles, Russians, Roma, the disabled, and political dissidents. (mainly Leftists)  Such a public education program could be incorporated into a broader critical/active civics and citizenship curriculum reform agenda.  That is: reform the curriculum to empower all students to understand their rights and interests; to commit politically on the basis of their interests and acquired values; and to participate deeply in a truly and meaningfully pluralist democracy.  He also mentions Cambodia, Bosnia, Rwanda and others.  But one aspect that he neglected (unintentionally I believe) was the record of atrocities on the ‘anti-Communist’ side during the Cold War.  Over half a million leftists and trade unionists were murdered in Indonesia in 1965-66. And genocidal attacks during Guatemala’s civil war claimed between 200,000 and 300,000. As well as political mass murders in El Salvador, Nicaragua and elsewhere. Truly we must remember ALL of history’s shameful passages that we do not repeat them.  And that includes those committed ostensibly by ‘our side’. 

Why Isn't Shorten 'Cutting Through'?  And how can he change this?

Mark Kenny (28/1) argues Bill Shorten has failed to cut through since the elevation of Malcolm Turnbull as PM.  Yet the Liberal Party stands on the verge of another bout of bitter austerity: of the proportions which brought former Treasurer, Joe Hockey , undone.  For too long Labor has pinned its fortunes mainly to ‘socially liberal’ issues like Equal Marriage: neglecting robust social and distributive justice policies.  Hence the ‘socially liberal’ but ‘economically neo-liberal’ Turnbull has capitalised on the prevalent discourse.  Labor needs to change the prevalent discourse – and quick.  Labor’s strong endorsement of Gonski –  $3 billion on average a year - may show that Labor strategists are starting to learn their lesson. Other options could include more robust reform of superannuation concessions for the well off.  Superannuation concessions may cost taxpayers $50 billion/year by 2019, and Labor should be able to shave $20 billion of that from the well-off. Other areas of tax reform could include no further Company Tax cuts; gradually rescind Dividend Imputation; index the bottom two income tax brackets for fairness.  That could pay for a National Aged Care Social Insurance Scheme, reform of pensions and more, while improving Labor’s economic credentials, reining in the deficit.

The Infrastructure Crisis and Population: A Response to a Herald-Sun Reader

 

Nola Martin (Herald-Sun, 1/2) blames the transport infrastructure crisis – crowded trains – on overpopulation. Increased population has good and bad consequences.  On one side we will run into difficulty if schools, hospitals, roads, public transport – fail to keep up with population.  On the other hand higher population creates ‘economies of scale’ in the public service, defence and other areas. (ie: we can get away with paying proportionately less there)  But the real problem is that public investment in infrastructure and services – like roads – is not ‘keeping up’ on account of ‘corporate welfare’ and subsidies for the well-off.  Company Tax cuts mean corporations aren’t paying for the infrastructure they benefit from.  And superannuation concessions for the well-off might cost taxpayers $50 billion by 2019 according to Richard Denniss of the Australia Institute.  When there’s not enough public money for infrastructure like roads this also leads to privatisation.  The problem here is since the private sector cannot borrow as cheaply as the public sector, and must pay dividends to shareholders,  the increased ‘cost structures’ are passed on – hurting the entire economy.  But as the Federal Election approaches Malcolm Turnbull is considering more tax cuts. (eg: Company Tax)  When will we learn our lesson?

SA Premier Jay Weatherill and the Debate on the GST; And the 'Revenue Problem' for Health and Education

Regarding his discussion of raising the GST; On the positive side at least South Australian Labor Premier Jay Weatherill IS saying there’s a revenue problem we have and not a spending problem. It’s good to actually confront that issue - and to prioritise health and education. The problem is that he's undermining Shorten on the GST – which could be crucial in the coming election. The best reply Shorten can come up with is promising to address BOTH the revenue problem and the Health crisis - including Aged Care. There are a host of possible measures. Hit superannuation concessions. Gradually rescind dividend imputation. Reform capital gains tax concessions. Rescind negative gearing. Restructure and increase the Medicare Levy. DON'T cut Company Tax.  Shorten has options! Outlining those options NOW - AS OPPOSED TO THE GST can answer Jay Weatherill's concerns re: 'the revenue problem'.   And we can then enjoy serious reform of Education and Health including Aged Care - where tens of billions new funding combined are necessary to make a serious difference. In response to the answering of those concerns Weatherill will probably then 'fall into line' on opposing the GST.

Andrews Labor Win in Victoria means Challenges and Opportunities for Change

 

 

above:   Daniel Andrews' convincing win for Victorian State Labor provides a window for change: hopefully a opportunity that he will make the most of

 

Tristan Ewins

Daniel Andrews is set to take office for Labor in Victoria with a resounding electoral endorsement.

But one crucial issue was neglected by everyone during the campaign. 

Arguably no state government in the country has secured the revenue necessary to sustain government provision of public infrastructure in everything from transport to public housing and education over the long term.

Interestingly, former Conservative Victorian Premier Denis Napthine himself had argued at one point for a higher GST.   This could deliver the necessary funds to the states generally. Though the measure would have hit low income groups hardest, and hence would have been unfair. 

Meanwhile so-called ‘Public Private Partnerships’ (and ‘full-blown’ privatisation as well) also inevitably involve regressive user-pays mechanisms; and arguably are less efficient means of finance.  ‘The Age’-columnist Ken Davidson has long made this argument to the chagrin of Labor and Liberal state governments alike.    This makes the cause of progressive tax reform all the more pressing.

Progressive tax reform is necessary to provide for working families who increasingly cannot afford a roof over their heads; or who endure insufficient transport infrastructure; or who may be the targets of future unfair  ‘user-pays’ mechanisms via toll-roads and the like.  We need to sustain more public spending, not less – to provide the roads, public transport, schools and public housing necessary to ensure no-one ‘gets left behind’; to gently deflate the housing bubble; and so services and infrastructure are funded sustainably and fairly.  Again: That MUST mean increasing progressively sourced revenue Federally and ‘locking in’ the provision of necessary funds on to the States.  The states desperately need certainty on this point.

During the Victorian State election campaign both sides committed to ‘no new taxes’.  Immediately, therefore, apparently Andrews ‘hands appear to be tied’ on the revenue front.  Although perhaps  the way may still be open to increase existing taxes.   The dilemma is achieving this progressively.  

But none of this is to say Andrews Labor cannot agitate loudly and clearly – along with the Weatherill South Australian State Labor Government – on a  ‘new front’: refuting Abbott’s Ideological commitment to a ‘small government’.

Incidentally the ‘small government mentality’ – with all its consequences – appears to be prevalent at a Federal Labor level as well.  A long-time member of the Victorian Socialist Left, it would be well for Andrews to publicly adopt the cause of proportionately increased, fairly structured and progressive social expenditure.

In the meantime Andrews Labor is committed to suite of policies including support for social and public housing – with regulations aimed at ensuring affordability for the aged and the disabled.  As well there is Andrews Labor’s commitment to removing dangerous level crossings;  and delivering enhanced fire services and reduced ambulance waiting times.  There is also Labor’s popular commitment to restoring funding for TAFE campuses; and establishing jobs, education and training as a ‘top priority’.  Finally the public voted for Labor on a platform of cancelling the expensive Public Private Partnership on ‘East-West Link’.

But limited Victorian State revenues remains the bugbear that may come back to haunt the new government.   Over the short-term Labor can afford to spend; and indeed needs to spend in order to deliver the Victorian jobs recovery it has promised.  But for this to be sustained over the long term something has to change federally.   And arguably failure to build crucial infrastructure would mean ‘bottlenecks’ which over the long term do much more damage to the economy than increased public debt.  Abbott must take responsibility, here, rather than follow through his political blackmail of withdrawing federal funds.

These arguments need to be addressed by Federal Labor also if Shorten is to deliver the full NDIS, as well as Gonski, and other potentially popular initiatives.  That should include a National Aged Care Insurance Scheme;  as well as Medicare dental, physio and optical; and for much more public and social housing to ‘gently deflate’ the housing bubble.  Also crucial are funds and programs ‘close the gap’ on life-expectancy,  and provide life opportunities for the mentally ill.  And finally we have to reiterate that federal tax reform is crucial if efficient public investment in state infrastructure (roads, public transport, schools, energy, public housing) is to be sustained over the long term.

It is also regrettable that Andrews Labor  has provided for its promise on level-crossings through privatisation of the Port of Melbourne.  Definitely it was smart politics; and the role of ‘smart politics’ in the Andrews Labor victory should not be understated.  But arguably inferior cost structures (including profit margins) will now flow on to the broader economy over the long term.  This is a ‘once-off’ shot to public revenue that once implemented cannot be reversed.  There is a comparison, here, with Abbott’s privatisation of Medibank Private.  Although that policy will have specific ramifications: creating a near-private monopoly in private health insurance, with the market-dominance of the newly-private player working against the interests of consumers.  Also hundreds of millions will be lost to the public in revenue every year.  

Finally, Andrews Labor has the opportunity to pursue other progressive reforms; not least of all developing a progressive agenda on secondary curriculum that takes on the Conservative education orthodoxy championed by the likes of Liberal stalwart Kevin Donnelly.   As against Donnelly’s professed narrow emphasis on numeracy and basic literacy there is a place in secondary curricula for the imparting of critical thinking and textual deconstruction.  That applies the English, the Social Science  and Humanities as well.  Education should not merely apply to ‘labour market requirements’, but also must promote the demands of active and critical citizenship, as well as political literacy, and cultural literacy, participation and inclusion.  Curricula should  aim to develop ‘well-rounded human beings’.  

There is no need for bias in such a curriculum, however.  The Liberal Party itself is struggling to survive organisationally as the young increasingly abandon political activism. Rather a ‘critical/active’ curriculum could promote an appreciation of interests and ideologies which was inclusive and balanced.  As against Donnelly’s fears, it need not preach moral and cultural relativism.   Such reform could be ‘streamlined’ through English, History, a new ‘Political Economy’ subject, and should attract support from all who are serious about of robust democracy. 

Under Joan Kirner curriculum reform was a top priority.  So too should it be under the Andrews Victorian Labor Government.

 

Australia: The Consequences of Privatised Infrastructure

In this article Left Focus publisher Tristan Ewins considers the problems associated with privatised infrastructure: especially privatisation of roads.  He critiques the abandonment of the mixed economy by Labor, and urges a return to that model: but also the extension of a more progressive "democratic mixed economy'.  Debate welcome!

Readers are also welcome to join our Facebook group which hosts regular debate, and publishes notice of new material at the blog.   See:  http://www.facebook.com/groups/58243419565/

Tristan Ewins

In Melbourne’s “The Age” on July 17th the headlines proclaimed “Tolls urged on existing freeways”. Apparently advisory body “Infrastructure Australia” is frustrated with ever worsening infrastructure log-jams. Whether we’re talking about ports, roads, public transport or new utility infrastructure (gas, water, electricity) – the trend for many years now has been towards infrastructure privatisation – usually in the form of Public Private Partnerships. (PPPs)

In fact both Labor and Liberal governments have been guilty of jumping on the “PPP bandwagon” – to the benefit of their friends in the private sector for whom PPPs were often akin to “a license to print money’. Now ‘Infrastructure Australia’ is urging either public finance of new infrastructure – or privatisation of existing infrastructure and imposition of user-pays charges in order to provide the funding for new roads especially.

Tim Colebatch – also of ‘The Age’ has explored the associated issue in depth. Colebatch poses the question as follows: Australia has a choice in how it pays for an estimated $700 billion in socially and economically necessary infrastructure over the coming decades. See: http://www.smh.com.au/opinion/politics/heres-a-way-to-get-700bn-of-infrastructure-we-need-20120716-226gi.html

In fact we have three options.

a) We can continue to allow the infrastructure backlog to accumulate – actually damaging our productivity and quality of life – especially for families in emerging suburbs where transport infrastructure is negligible.

b) We can impose user pays charges upon existing roads or privatise them outright

c) We can actually raise taxes and invest in infrastructure the old way – via public borrowings and infrastructure bonds

In fact the neo-liberal Ideology is so entrenched now that the prospect of public investment in new infrastructure might be viewed by some as kind of radical. This is patently ridiculous - but we have an entire generation who have known little except PPPs and other forms of privatisation. The combination of mixed economy and welfare state – for decades taken for granted during the post-war period – is now thought of as belonging to the ‘political fringe’. Indeed our friends in the hard Right of the NSW branch of the Labor Party might now consider the model of traditional social democracy as “extreme”. Even Anna Bligh’s government in Queensland – Bligh herself hailing from the Left (!) – privatised energy and rail assets – in a move that led to extensive defections from Labor and Queensland unions to the Greens. And now the neo-liberal ideologues are pursuing a new wave of privatisation at a level that once upon a time would have been considered outrageous. Yet the arguments for a return to the mixed economy are clear and they are sound.

Tim Colebatch raises the spectre of Australia and its various state governments losing their AAA credit rating were we to lift our borrowing ceiling. But what if said borrowing was clearly established as being fiscally sustainable by raising taxes to the level necessary to service and repay the debt? And if increasing a nation’s debt ceiling results in a reduced credit rating – regardless of said states’ structural capacity to service the debt – does this make sense? Or is it an Ideological prejudice that ‘locks in privatisation’?  Indeed: Can global or regional social credit provide an alternative?  Such questions need to be posed now more than ever.

The problem is that the alternative to higher taxes and higher public investment is much more worrisome. So public finance of infrastructure is preferable for a number of reasons.

Firstly the Federal and State governments can borrow at a more competitive rate than any private sector operator.

Secondly, the argument that PPPs ‘pass on risk’ is fallacious – as when PPPs fail governments inevitably have to step into the breach and pick up the pieces.

Thirdly, privatised infrastructure involves user-charges that operate like regressive, flat taxes. Not only are the increased cost-structures of private finance passed on to consumers: but low and middle income groups are disproportionately affected.

The following is most crucial: Under privatisation most citizens pay much more in their capacity as consumers than they would in their capacity as tax payers with public finance. Privatised infrastructure is bad for equity purposes – with the increased cost structures flowing on to business as well as consumers. The consequence of this is that infrastructure privatisation is bad for capitalism in addition to being bad for equity.

We need only look to the costs of energy infrastructure privatisation in Australia to grasp the consequences of infrastructure and utility privatisation for a spiralling Cost-of-Living. Private investment in new energy infrastructure is being passed on in the form of consumer charges that have largely seen energy prices in Australia rise by 40 per cent over the past five years. http://www.abc.net.au/news/2012-03-21/australians-pay-highest-power-prices-says-study/3904024

Full privatisation of infrastructure is obviously the greatest threat – as compared with imposition of tolls on public-owned infrastructure – as user charges become entrenched permanently, rather than comprising an ‘emergency measure’.

But how and why has the ideology of privatisation taken hold – even within the ALP itself? What are the consequences? What is the alternative?

For decades progressives and social democrats have been on the back foot when it comes to privatisation. It is the author’s opinion that many younger members of the Australian Labor Party cannot imagine what a real mixed economy would look like; or conceive why it would be desirable; or conceive anything outside of the neo-liberal framework. Within the ALP there is even scepticism with regards reform of tax and meaningful extension of the welfare state and social wage.

Even on the ALP Left there is an ‘ideological drift’: a loss of a sense of perspective and purpose as the substance of democratic socialist policy is increasingly seen as ‘unspeakable’ even in internal forums.

Without being regularly reinforced through a vigorous and participatory counter-culture traditional Left ideals are fading. Liberalism is filling the void. By while liberalism is part of the answer, it is not sufficient to meet the ‘social question’ which provided the original source of inspiration for Labor. While worthwhile causes such as the rights of refugees and the right of those of queer sexuality are important, any critique of neo-liberal capitalism is relegated to the far margins. Such a critique could advance to cause of moving back towards a mixed economy - including natural public monopolies, as well as government business enterprises which actually enhance competition while providing cross subsidies for disadvantaged consumers.  And more particularly progress could be made towards a democratic mixed economy, which could also be marked by co-operative and mutualist enterprise and co-determination.

The power-brokers do not seem to understand that the firmer the control they exert over the grassroots, and the more grassroots initiative is obstructed, the consequence is the decline of the ALP as a movement, and the loss of democratic socialist ideology, culture and identity. At this rate all that will remain ultimately is a patronage machine – which is how some people seem to like it. The disillusioned flock to the Greens – and yet even amidst the current crisis of support for Labor, the Greens’ mass electoral appeal remains largely confined to inner suburbs. Labor remains a crucial electoral bastion that must be contested by progressive forces.

There has been a steady line of retreat since the 1980s on the Left - from a perspective favouring economic democracy, to a rearguard action in defence of a robust mixed economy, to neo-liberalism and a minimal public sector sustained by some residual ‘natural public monopolies’ – and finally now the almost absolute expunging of the public sector from even those sectors of the economy where it is in capitalism’s own interests to contain its cost-structures via public ownership.

We need, now, to return to the theme of the democratic mixed economy: in a sense to ‘save capitalism from itself’ – not necessarily because all facets of capitalism are worth saving – but to prevent the human suffering that comes in the wake of capitalist contradictions. And over the long term we can still aspire to the extension of political, social and economic citizenship – culminating in a qualitatively better social order.

For now a hybrid system can provide the best mix of socialist efficiency and fairness, and market-facilitated innovation and choice. This is the democratic socialism the Labor Left – and the Centre-Left more broadly – needs to return to. It demands a robust counter-offensive against neo-liberalism – not merely another faltering rearguard action in the face of this latest ideological and public policy assault. It requires pro-active advocacy in favour of a democratic mixed economy. And it requires the implementation of these principles by Labor in the field of public policy.

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