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!

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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.

Gonski … just do it

[Public Education] IT’S BROKEN...FIX IT...

Above: Julia, implement Gonski now!!! 

The following article by Jenny Devereaux explores the case for implementing the Gonski Education recommendations which would deliver an additional $3.8 Billion for state education in Australia. This is crucial to restore confidence in state education and avoid its marginalisation over the long term. Arguably such major initiatives are crucial if Labor is to seize the initiative and inspire on the basis of real achievements. PM Julia Gillard - Implement Gonski now!!    DEBATE WELCOME!


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By Jenni Devereaux

The Prime Minister, Julia Gillard, is on the defensive where the Government’s commitment to the Gonski Review is concerned.

Responding to a question on the implementation of the Gonski recommendations during her recent Q&A appearance, she said that we could expect the Government “to say something in response to Gonski in the months ahead”:

... in the meantime, we’ve got all of our education reforms flowing, including almost doubling the amount of money going into school education with special arrangements to inject money into disadvantaged schools and special arrangements to inject money into the care and support of kids disabilities.

There’s a lot one could say about the wider question of the ALP’s education reforms, but let’s look just at the question of Gonski and school funding since the ALP took office in 2007.

The Gonski Review was commissioned in April 2010 by Julia Gillard, then the Federal Minister for Education. Acknowledging that Australia’s system of schools funding is “one of the most complex, opaque and confusing in the developed world”, she said the Review was expected to conclude in 2011, with new funding arrangements in place for the next schools’ funding agreement beginning in 2013.
 
Gonski and his review panel consulted widely, commissioned a body of research on key issues around the funding of Australia’s schools, and received more than 7000 written submissions. The report was delivered on time to the government in December 2011 and publicly released in February.

As widely expected it confirmed that Australia’s system of schools funding is unfair and inequitable. Not only does it lack coherence and transparency, it is also unsustainable, and contributes to widening resource gaps between schools and sectors and schooling outcomes for students from different backgrounds; so much so that students who live in disadvantaged areas are up to three years behind their peers in more affluent areas.

In short, several decades of funding arrangements largely driven by political accommodations rather than educational policy imperatives have entrenched a deeply flawed funding system which delivers a disproportionate share of Commonwealth funding to Australia’s private schools at the expense of our public schools and the majority of students who attend them.

Gonski found that Australia is investing far too little in education and, in particular, in public schools. The Report recommends a $5 billion a year increase in funding (2009 dollars) with $3.8 billion to public schools which are in the greatest need, and major changes to the way money is allocated to schools to ensure it is better targeted to the meet the needs of students.

· A School Resource Standard [SRS] which sets a per student dollar amount for primary and secondary students (Primary – $8,000 & Secondary - $10,500 – in 2009 figures);

· A series of loadings depending on the size and location of the school; the concentration of students from low SES backgrounds; students with a disability; Indigenous students; and language background/proficiency of students;

· Capping the SRS for private schools at 90% which will reduce according to their capacity to attract fees – potentially to 20-25% of the SRS.

Despite Gonski’s insistence that “Australia will only slip further behind unless, as a nation, we act and act now”, there has been no commitment by the Government to deliver the urgently needed additional funding, while the Coalition says there should be no changes to the existing system until at least 2017. Rather, the Government says, more consultation is required.

While there is no question that the Rudd and Gillard Labor governments have significantly increased schools funding, there are two significant problems with Gillard’s Q&A response in this regard.

Firstly, a substantial proportion of the increased funding has been of a short-term nature. The $16 billion Building the Education Revolution infrastructure funding program has now wound-down, and a number of short-term programs being funded through National Partnerships Payments [NPPs] are in the process of being wound-down.

Secondly, the underlying Commonwealth funding arrangements for public and private schools remain. The most recent analysis of these arrangements by Dr Jim McMorrow, a leading schools funding analyst, is based on the May Federal Budget. It shows that Commonwealth funding for public schools is projected to decrease in real terms for each of the financial years from 2011-12 to 2014-15. While it is projected to increase in 2015-16 due to the re-introduction of some NPPs, the overall effect is that public schools would receive $673 million less in real terms in 2015-16 than they received in 2011-12, a cut of 12%. In ‘per student’ terms, this would see each public school student receiving $385 (or 16%) less.

The reduction is mainly due to the cessation of short-term programs like the NPPs; programs from which public schools have received more than their enrolment share of funding because they are targeted to schools and students with higher concentrations of low SES backgrounds and those needing greater literacy and numeracy support. These are the schools and students hardest hit by the effects of the Budget; the very schools and students who would benefit most from the implementation of the Gonski recommendations.

By contrast, Commonwealth funding to private schools is projected to increase in real terms by more than $1.3 billion (or 15%) by 2015-16; a $495 (or 7%) for each private school student. And the reason for the increase? 

“The assumptions built into the Budget estimates and projections that preserve and protect the Commonwealth’s current funding scheme for non-government schools. In particular, the ongoing indexation of general recurrent grants ... at a level that exceeds increases in the real costs of schooling overcompensates for the non-government sector’s share of the budgeted reductions in National Partnership and DEEWR-administered programs.” (http://www.aeufederal.org.au/Publications/2012/JMcMorrowBudget.pdf)

This highlights both the “fragility and vulnerability” of public school funding and the “inequity of an indexation measure which applies increase to non-government schools regardless of relative need” and is what the Government’s lack of commitment on Gonski is defending and protecting. No amount of talk about education reform and (short-term) funding increases can justify that.

McMorrow argues cogently that the Budget analysis both encapsulates the very problems identified by the Gonski review, and demonstrates the urgent need for the recommended reforms including replacement of the existing indexation measure with a more equitable measure and better targeting real increases to the needs of schools and students. This requires new legislative arrangements in place before the current inequitable funding arrangements end in 2012. The Government needs to be reminded, as Gonski says, that “Australia will only slip further behind unless, as a nation, we act and act now”.

Jenni Devereaux is a Federal Research Officer of the Australian Education Union. 

In the Wake of the Greek elections: Is there a way out of the Recessionary Spiral?

above: The Symbol of the Rising SYRIZA Left-Coaltion in Greece

In this article Tristan Ewins discusses the aftermath of today's Greek Election.  Debate very welcome here - and at our Facebook page.  See:  http://www.facebook.com/groups/58243419565/

Tristan Ewins; June 18th 2012

There is some interesting analysis of the Egyptian and Greek elections over at radical-left blog 'En Passant'. Here at “Left Focus” I would like to take a moment to consider the consequences of the election in Greece – and alternative ‘ways forward’ – out of the depressive spiral which is engulfing much of Europe.
(See: http://enpassant.com.au/2012/06/18/greece-and-egypt-a-tale-of-two-elections/ )

In Greece, specifically, the Conservative “New Democracy” Party is set to form government – but with only approximately 30 per cent of the total vote. As a consequence of the specifics of the Greek electoral system the largest single party receives a 50-seat boost. This makes it very likely that New Democracy will attempt to ally itself with the pro-austerity PASOK. (Pan-Hellenic Socialist Party)

Nonetheless PASOK has historically supported a more moderate approach to austerity: the consequence of which must mean that any new coalition government between New Democracy and PASOK will see bailout conditions re-negotiated to “slow the cuts [and] introduce more generous unemployment benefit[s].” (See: http://blogs.telegraph.co.uk/news/danielhannan/100165822/another-non-result-in-greece-how-much-longer-can-this-go-on/ )

But in any case - it would be ‘the same poison’ of recessionary austerity - even if a milder variety.

At ‘En Passant’ John Passant further reports that while “left-wing radical group SYRIZA came second with just under 27%”, PASOK received “a little over 12%.” Meanwhile, “the Democratic left, a moderate split from SYRIZA on just over 6% and the KKE, the Greek Communist Party [managed] about 4.5%.”

The fascist, so-called ‘Golden Dawn’ party was thankfully contained on just under 7% of the vote: but it is nonetheless a significant precedent and could bode ill for the future.

The division of the Left in Greece has therefore been crucial for the Conservative victory. Had SYRIZA maintained internal unity it clearly would have emerged as the largest party in the Greek parliament rather than ‘New Democracy’. While the Left broadly defined was a hair’s breadth from securing a majority of votes, the additional 50 seats that would have been delivered to SYRIZA in the event of maintained internal cohesion would have been enough to deliver a clear Left victory. The Greek Left needs to think upon this should continued instability create another opportunity for a Left majority in the near future.

According to one website, SYRIZA leader Alexis Tsipras “called Samaras to congratulate him but later rejected any notion of dealing with New Democracy or PASOK.” Tsipras stated:

“We shall be present in any developments from the position of the main opposition,” he said, stressing that that “everyone must know that the measures of austerity and the selling off of state property will not be able to move forward because they lack popular legitimacy.” http://greece.greekreporter.com/2012/06/17/final-exit-polls-show-new-democracy-leads-syriza-in-tight-race/

The refusal of SYRIZA to deal with PASOK leaves PASOK in a potentially fatal union with New Democracy. Without very substantial re-negotiation continued austerity in Greece will see ongoing unemployment, poverty and even homelessness. The privatisation agenda, meanwhile, is blatantly Ideological. By maintaining its distance from the austerity policies of a PASOK/New Democracy government, SYRIZA is likely to rise as the main beneficiary at the next Greek election; more decisively displacing a relatively marginal PASOK. This is exactly why PASOK is refusing to agree at this point to a coalition without the inclusion of a very reticent SYRIZA.

One online news source has reported that:

“The results should bring a sigh of relief to Greece’s lenders, the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) who provided Greece with an initial bailout two years ago of $152 billion and approved a second in February for $173 billion more, but said it depended on Greece continuing with more reforms, including privatization and another $15 billion in cuts.”
http://greece.greekreporter.com/2012/06/17/final-exit-polls-show-new-democracy-leads-syriza-in-tight-race/

Rejecting the assumptions of this reporting, however, what is the answer for Greece?

As John Passant notes at En Passant:

“Unemployment Is running at over 22% and for the young it is approaching 50%. Growth fell last year by up to 7% and is predicted to fall again this year by around the same or slightly less.”

Firstly – as these figures demonstrate, a recessionary spiral is NOT the answer. Greece – as well as other affected countries such as Spain and Italy – need a plan for socially and economically sustainable debt repayment over the long term. Though this author does not claim to be an authority, it seems rational that if privately-financed bonds cannot provide Greece and other countries with fair repayment rates and schedules, then Europe as a whole needs to step in collectively at a public sector-financial level. As recognised above the IMF, European Union and European Central Bank are already providing a bailout. But this bailout has been offered under the wrong (ie: recessionary) terms.

Greece is currently caught between the toll of an eroding credit rating – with spiralling debt-repayment levels enforcing a macabre ‘discipline’ – and the real economic and human cost of austerity and enforced recession.

As an alternative, Greece’s effective credit rating needs to be fully restored in return for ‘locking into’ a European ‘economic contract’ aimed at restructuring the Greek economy, and repaying debts in the most efficient and sustainable manner possible – under conditions of full employment.

Only Europe-wide planning and co-ordination, now, can provide for such a process of restructure – mobilising the capital and the skills necessary to forge new and sustainable export markets – maximising that potential for debt-repayment under conditions of full employment. This applies as much for Spain and Italy as it does Greece.

The alternative is recessionary austerity: again with the consequence of homelessness, deskilling, poverty – in short, social and economic disintegration.

The SYRIZA anti-austerity platform can be found here and makes interesting reading:

(See:  http://www.solidarity-us.org/site/node/3620 )

From 1929 until the dawn of the Second World War the world suffered a Depression the consequences of which radicalised a generation, and with the experience of war-time economies entrenched a Keynesian orthodoxy, providing the basis of the Post-war boom. With SYRIZA refusing to join a unity government the battle in Greece is far from over. Do we really have to learn all the old lessons over again – with the associated toll in human misery?

Debate very welcome!

Responding to the 2012 Federal Budget – Better Late than Never!

above:  Treasurer Wayne Swan looking very satisfied with the 2012-13 Federal Budget

In this 'Left Focus' article Labor activist Tristan Ewins examines what Labor got right in its Federal Budget; what it got wrong; and the what the Conservative Federal Opposition's response says about Liberal Party Ideology.  Debate welcome!

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Tristan Ewins, May 24th 2012

Recently at this blog we discussed what would be desirable for the 2012 Federal Budget.   A few weeks after we ask the question: Was this the ‘battler’s budget’ Swan and Gillard have claimed it to be?; and on the other hand – have there been missed opportunities?

Summarising the coverage in ‘The Age’ and elsewhere the following features were notable:

Firstly there was a threadbare surplus of $1.5 billion – with over $30 billion of savings – but nonetheless a surplus.  Whether a surplus was actually necessary or desirable at this point is open to question.  On the southeast coast there appears more of a need for stimulus rather than austerity.  Bringing forward infrastructure projects there would therefore seem advisable. Certainly achieving a surplus has loomed as a political imperative for Labor, and despite recent (and rare) questioning of this ‘imperative’ in the media, past coverage had consolidated the impression that consistent and continuous surpluses were equal to “sound economic management”.  Liberal claims that Labor had not delivered a surplus since 1989-90 were hurting in the wake of that past, basically uncritical media discourse.  On the other hand a balanced budget over the course of the economic cycle is desirable; with debt servicing weighed against growth, improved capacity and productivity stemming from social investments.

Some of the largest savings were made from Defence – “Cut by $5.5 billion over four years”.  Certainly this was preferable to savings in social programs and welfare; although a growing Australian nation holds the prospect of more self-reliance in Defence over the long term.  This also could mean the prospect of greater foreign policy autonomy.

The Government has also saved approximately $1 billion, cutting by half Superannuation tax concessions for income earners on over $300,000/year: which surely was welcome, but arguably did not go far enough.   

Indeed the Australia Institute has argued that the cost of superannuation concessions has blown out to about $30 billion a year; and Richard Denniss specifically has claimed that $10 billion of this goes to the top 5% of income earners. (!!!) This money could have provided a fair go for single parents; improved the shamefully regressive ‘Newstart’ unemployment allowance by $50/week, and radically improved the quality of Aged Care for those needing high intensity care; and those preferring low intensity care in a more social environment. It also could have been redirected into mental health services where the government has a record of “robbing Peter to pay Paul” rather than sufficiently expanding funding for all areas of real need.  Setting the ‘high income benchmark’ at $300,000/year is being far too generous for many who are on ridiculously high incomes: and yet single parents are singled out to be pushed on to the Newstart Allowance if they do not find work – with the welfare of their children cast into serious doubt.   The rationale is not to upset so-called ‘aspirationals’ – But arguably there is more to gain electorally by consistently and visibly assisting low to middle income groups.

(See: http://www.abc.net.au/news/2012-05-08/swan-scrapping-company-tax-cut/3998784 ;  http://www.tai.org.au/?q=node/277 ; and http://www.abc.net.au/pm/content/2012/s3499255.htm )

A key theme for Swan was ‘spreading the benefits of the boom’; and yet the mining tax was not expanded in scope or degree.  Previously the Greens had been on record claiming that the cost to the Budget bottom line, here, was in the vicinity of $100 billion over ten years.   This begs the question: What kind of social and infrastructure investments could have been gained through a revision of this policy?  And what kind of effective cross-subsidies could have been provided for manufacturing, retail, tourism, education – all sectors struggling in the wake of the high dollar driven by the mining boom?   (See: http://greens.org.au/content/mining-tax-needs-review-ensure-revenue-australias-future )

The projected cut in Company Tax has been deferred – but should have been shelved entirely.  By ‘trumping’ Abbott with a similar 1.5% levy on big business as planned with his own paid parental leave scheme,  Labor could redirect that money to further initiatives in Aged Care, mental health or further cost of living relief for low and middle income Australians.  This would ‘back Abbott into a corner’, making it hard for him to justify his priorities; and making it difficult for him to impose a further Company Tax levy on top of Labor’s levy. 

Money could also have been directed in future social finance and ownership of transport, energy and other infrastructure – with the savings from lower borrowing costs, productivity agreements with unions, and a non-profit footing – delivering very significant savings for consumers.

Meanwhile – though Foreign Aid is rising by $300 million, Labor’s promises to more radically increase aid have been reneged upon – at least for the time being.  This will save an approximate $2.9 billion annually. But the question nonetheless looms: with more far-reaching tax reform could Labor have avoided having to make such “Hard Choices” on Budget priorities?   (See: http://www.smh.com.au/opinion/blogs/the-party-line/should-a-promised-boost-to-the-foreign-aid-budget-be-deferred-for-a-year-to-help-return-the-budget-to-surplus-20120510-1yei6.html )

Other crucial policy areas included $1 billion over four years “to kickstart the National Disability Insurance Scheme (NDIS)” ; “$577 million over five years to help aged Australians remain at home” and additional payments “of up to $210 a year for unemployment and similar benefits.”  (‘The Age’, May 8 and 9 2012)  

Providing tangible results for the NDIS ahead of the next election could be crucial in establishing the credentials of the government as being based on more than just ‘talk and distant commitments’.  So bringing forward the NDIS as much as possible is a very welcome development.  Though as this author has also argued in the past: the proposed Aged Care reforms while welcome do not go nearly far enough to provide for the basic needs of some of our most vulnerable aged Australians.  More financial support is needed for Carers; and more funding is necessary for residental care for those who choose it – and those who require high level care and do not have a  choice.  Sustainable quotas are also necessary for aged care workers and nurses; and resources to improve quality of life for all kinds of aged Australians suffering social isolation, financial stress, difficulty with day-to-day living, and the indignities that come from an under-resourced, sometimes profit-driven and under-regulated residential care sector. 

Over at ‘The Conversation”, meanwhile, there has been the observation that the Federal Budget “includes $515.3 million dentistry package” with  “$345.9 million…used to treat patients on long waiting lists and providing other vital services to adults.”  See:  http://theconversation.edu.au/what-the-budget-means-for-dental-care-in-australia-6792    But the Greens were justifiably critical of Government plans to axe the Medicare Chronic Disease Dental Scheme,  and have argued for means-testing of the scheme instead. 

However the flagship programs of Labor’s 2012 Budget were definitely its Cost-of-Living initiatives.   The Labor website proudly proclaimed the following initiatives on May 8^th” aimed squarely at “low and middle income families”: 

• An expansion in FamilyTax Benefit A with an increase of the benefit to low and middle income families with two children to $600/year, and $300/year for families with a single child.

• A “Schoolkids Bonus” to help 1.3 million low and middle income families meet the costs of schooling: $410 for each primary school child, and $820/year for each child in high school.

• Support for “the most vulnerable Australians”; Cost of Living Assistance for a million Australians: “$210 a year for singles or $350 a year for couples”; with “lump sum payments will be paid twice yearly”

• “tax cuts will be delivered in 2015‑16 for all taxpayers with incomes up to $80,000” through an increase in the tax-free threshold”

In ‘The Age’ such new initatives were given a price tag of about $5 billion – So they are inarguably very significant!

The government also stood on its record of increasing pensions in past years, promising “a new Low Income Supplement of $300 per annum” for “Any low income households that do not receive enough assistance through tax cuts and increases to payments to cover their average expected price impact”. (presumably in reference to the Carbon Tax)   (See:  http://www.alp.org.au/federal-government/news/helping-households-with-the-cost-of-living/  )

Imaginably this could be the beginning of an ideological offensive by Labor on the issue of distributive justice.  For years now the monopoly mass media have reinforced the perception that redistribution equals ‘class war’; while attacks upon welfare and organised labour apparently do not!   Abbott and the monopoly mass media have directed salvo after salvo against the very principle of redistribution to correct injustices inherent in unregulated laissez faire capitalism.  Facing very little criticism or scrutiny in the media,  Abbott even begrudged the very basic social solidarity of the once-off flood tax – to assist those effected by the Queensland disasters. 

Meanwhile important social initiatives have been dismissed in the press with the loaded expression “cash splash” – the intent clearly being to infer economic irresponsibility in a blatant piece of popular-psychological manipulation.

Yet as against this cyncial and socially damaging political tactic this author remembers very clearly former PM John Howard supporting the principle of progressive taxation some time before being defeated by Kevin Rudd in 2007.

And a very different Tony Abbott seemed to emerge from the Opposition Leader’s book ‘Battlelines’.   The following observation was made at the ‘Left Focus’ blog in 2010:

Interestingly, Abbott raises the opposition between compassionate conservatism and the kind of ruthless neo-liberalism that cares nothing for the social consequences of austerity (pp.xii-xiii). Here the author juxtaposes the “[single-minded] cutting [of] public expenditure … striving to deliver smaller government” to “compassionate conservatism, stressing solidarity with those who are doing it tough” (pp.xii-xiii). By this reckoning the “social fabric … has to be respected and preserved”, while individuals should enjoy such circumstances that they are “empowered, as far as reasonably possible, to live the life that he or she thinks best” (p.xii).  (references from ‘Battlelines’ by Tony Abbott) 

(see:http://leftfocus.blogspot.com.au/2010/04/battlelines-whats-tony-abbott-really.html )

The Conservatives need to decide whether to pursue a mix of economic conservatism and political liberalism; or whether to adopt a ruthless neo-liberalism which cares little for the poor and disadvantged; and for the political and civil liberties of citizens.  It is important to observe, also, that ‘economic conservatism’ need not imply economic liberalism, but rather could accept Keynesian assumptions (in past accepted by Liberal governments) on the mixed economy and counter-cyclical demand management.  Yet Joe Hockey seemed to be quite clear recently on QandA that he cared little for the traditional Australian spirit of egalitarianism.

But for Labor stronger action is necessary to place class faultlines and class interests in clearer relief.  The principle of class struggle is seen by many as being discredited even on the Left – which has reverted to a kind of modest social liberalism. But when we speak of class interests and class struggle this need not imply terroristic Stalinism; or to begrudge citizens their human and civil rights on the basis of class.  Rather the purpose of democracy is at least in part to set free oppositions of interest and provide a framework for their peaceful resolution.  Or where this does not work, to contain conflict to forms of civil disobedience which do not descend into an escalating cycle of violence. 

It warrants the question:  What problem does Tony Abbott and the Liberal Party have with workers and disadvantaged groups organising industrially and politically to pursue their legitimate interests; Indeed – to pursue justice, compassion, and  ‘the fair go’?  

And if he desires an agreed class peace, how does Abbott suppose this is possible on the basis of ruthless neo-liberalism – as opposed to the kind of Centrist Catholic Social Welfarism (or a ‘Social Market’ such as exisited under the Christian Democrats in post-war Germany) this author had hoped (but not dared to believe) he may have been open to? * 

Further, if redistributive policies are nothing but a ‘bribe’ (as according to Abbott) what are we to make of the ‘upper middle class welfare’ of the Howard years: and of Abbott’s own paid parental leave which offers leave with full pay to workers on as much as $150,000/year?  (See: http://www.news.com.au/money/cost-of-living/paid-parental-leave-scheme-stays-abbott/story-fnagkbpv-1226286894077 )

For Abbott, though, this is ‘non-negotiable’ as the polls consitently inform him he ‘has as problem with women’…

Conclusion

Having to achieve more but with less can drive efficiency – so there is some benefit in a government operating under tight fiscal circumstances.  Indeed, a comrade in the Socialist Left of the ALP recently commented to me that rather than spending billions more in areas like Aged Care that we could achieve more ‘electoral kudos’ (my term) with well targeted and innovative initiatives.

But sometimes there is no getting around the need for an injection of greater resources.  Much of this year’s Federal Budget was just reprioritisation – with little new money. Again: In accepting this framework Labor will repeatedly find itself in the position of ‘having to rob Peter to pay Paul’.  In public education, aged care, mental health, welfare, public housing, disability support and services, and crucial transport and other infrastructure: ‘trying to do more with less’ can only take you so far.  For instance: the Gonski recommendations for Education simply cannot be implemented without billions in new funding; nor can a sustained introduction of Medicare Dental.

By comparison – moving initially from 100% to 75% Dividend Imputation, further cutting superannuation concessions for the wealthy top 5% of income earners, reforming the Mining Tax, and applying an ‘Abbott-esque’ levy on business via Company Tax – along with other reforms – could have grown social expdeniture by 1.5% of GDP – or approximately $22 billion in new and improved initiatives.

And yet with $5 billion of largely redistributive, social-justice, Cost-of-Living oriented policies - this is arguably a traditional Labor Budget.  It puts many of Labor’s core low to middle income constituencies first in way we haven’t seen so much in quite some time.  

Now, though, Labor needs to turn the to source of the Cost-of-Living crisis.  Firstly, this must include implementation of the Gonski recommendations – so low and middle income families can feel secure sending their children to State and poorer Independent schools – at peace in the knowledge they will not be disadvantaged, and that there is no need to ‘go beyond their means’ in providing a private school education.   And reversing privatisation, and promoting public housing and infrastructure for emerging new suburbs also need to find themeselves to Labor’s ‘policy radar’ with policies that attack Cost-of-Living pressures at their very root. 

(*though for the record this author supports an outlook of sustained class struggle; even though it is notable that the kind of semi-corporatist structures such as have existed in Sweden provided channels of mediation of interest to citizens across class lines)

For a budget both sustainable and fair

 

Above: Wayne Swan is under political pressure to produce a surplus for May 8th. But to re-engage with voters Labor needs to do a lot more; delivering truly meaningful and substantial social programs that appeal both to Labor's working class and liberal middle class electoral bases. This needs to be provided for through a progressive tax restructure including reform of superannuation tax concessions, dividend imputation and consideration of further 'super profits' taxes where appropriate.

Readers also please feel welcome to join our Facebook discussion group!: See: 

http://www.facebook.com/#!/groups/58243419565/

By Tristan Ewins

As the May 8^th 2012 Federal Budget approaches top Labor policy-makers will be nervous. While there is enormous political pressure to deliver a surplus only very substantial progressive new initiatives hold the prospect of re-engaging with Labor's traditional working class and liberal middle class support bases. 'Treading water' on policy simply will not do at this point. So many voters are 'disengaged' after years now of systemic smears and disinformation in the media. Very substantial new programs are the only chance, now, of breaking through: at the very least saving the Senate, and leaving behind a reform legacy that Abbott will not be able to uproot.

But what specific programs could Labor embrace in order to re-engage with voters; perhaps even to win in 2013?

Immediately there are a number of options which spring to mind:

• Medicare Dental
• Gonski recommendations on education
• Stop-gap measures in anticipaiton of the National Disability Insurance Scheme (NDIS)
• Further funding to improve the quality and equity of Aged Care; with a long-term official policy of establishing universal Aged Care Social Insurance
• Robust Cost of Living initiatives for disadvantaged and working class Australians, including pensioners and Newstart recipients
• Substantial investment in public housing to assist those low income families and individuals experiencing housing stress; with the additional benefit of increasing housing supply, driving down rent costs
• Targeted tax-driven cross-subsidies for sectors struggling under the weight of the 'two speed economy'; to include tourism, education and manufacturing;
• Fast rail and other infrastructure projects (eg: infrastructure for emerging suburbs) expedited along the East Coast, with the additional benefit of stimulus in states which are economically struggling.

It is difficult to estimate how much would be necessary in way of funding for industry cross-subsidies. Although a fast-rail line along the Australian East Coast – costing $100 billion - could "dramatically cut emissions" and provide great convenience for travellers, and those utilising rail freight.

Such infrastructure initiatives could be financed via the issuing of government bonds, which could spread debt repayments over decades, with competitive annual repayment rates.

Development of infrastructure in new suburbs is also crucial on practical, environmental and equity grounds: and could create jobs along the economically languishing South-East Coast. Urban design, including public transport, parklands and other social facilities are crucial for the quality of lives of those young families who have been driven by the Howard housing bubble and population growth onto the 'urban fringe'.

And while Cost-of-Living subsidies should aim to deliver a minimum of an additional 1 per cent of Male Average Weekly Earnings (approximately $600/year for individual adults) to assist mainstream working class and disadvantaged families with energy, water, mortgages and rent, this author does not have access to modelling to determine the cost.

Yet 'Cost of Living' is THE issue 'out there' with Australian families, including those working class and disadvantaged families it is Labor's duty to protect and assist. A big initiative, here: as significant or more significant than already suggested – could be THE crucial factor in re-engaging with Australian voters.

Labor also stands to gain, here, by linking Carbon Tax relief with broader Cost-of-Living Relief. In such a way Labor needs to develop a package in which all disadvantaged and mainstream working class Australians are significantly better off. By linking these issues Labor has a chance of changing public perceptions of the Carbon Tax, while addressing genuine Cost of Living stresses for those in need.

And tax cuts would be quickly forgotten, so Cost of Living Relief will be better addressed through a dedicated supplement, to be paid twice-yearly.

Public construction of new energy and water infrastructure could also have savings flowing on to consumers because of the lower cost of public borrowing.

Nonetheless, despite our lack of access to modelling in some areas it can be stated that were the government to reform taxation so as to bring in around an additional 1.5 per cent of GDP in taxation (approximately $22 billion out of a $1.5 trillion economy), this would provide substantial scope for the social welfare and industry assistance packages hinted at here, while also providing for the politically-desirable surplus.

Potential fund-raising mechanisms could include a move to either 75% or 50% Dividend Imputation (saving between $5 billion and $10 billion/year); eliminating superannuation concessions for the wealthy (saving approximately $10 billion/year); restructuring of income tax, reversion to the original Resource Super Profits Tax template, and reneging on projected Company Tax cuts.

There is even the prospect of emulating Abbott in terms ofa 1% increase in Company Tax for large enterprises, ploughing the proceeds into Aged Care. Given his own position on Paid Parental Leave and his eagerness to appeal to aged Australia Abbott would be hard-pressed to oppose such an initiative. It is worth noting that Company Tax in Australia is 30% as compared with 35% in some areas of the United States – so there is 'room to move'.

For now, though, it is also worth observing those initiatives for which we do have costings.

Implementing the Gonski recommendations for education could ultimately cost an estimated $5 billion/year. Although the Gonski report itself suggests the Federal Government would only have to pay for 30% of the Education initiative ($1.5 billion) – with $3.5 billion shouldered by the States.

Detractors have attempted to conceal their own vested interests with calls of 'class warfare', but the reality is that 'class warfare' has been waged not against the wealthy, but against poor and mainstream working class Australia with the neglect of public education and health care, and increasing dependence on levies for essential school infrastructure which are 'voluntary' in name only. The appeal of Gonski is in its emphasis on all students, including those most struggling – with a further emphasis on improving state school funding, but without withdrawing existing funding from the private sector. Implementation of Gonski would mean improved infrastructure, smaller classes, more teachers and more subject choice for all schools.

Meanwhile projected public dental initiatives have variously been estimated to (ultimately) involve costs running into the billions annually. Apart from crucial equity and human interest ramifications of universal public dental care, preventative public dental care could save the economy billions over the long term. Though according to the proposal put to Labor by the Greens the first phase of new public dental programs– focusing on the needs of children and low-income groups - need only cost the government $400 million for the upcoming financial year, and as much as "$8.4bn to $14.4bn across four years, depending on the options chosen".

The final expenditure priority we will consider, here, is Aged Care.

The Federal Government's standing Aged Care policy provides a real funding boost of only $577 million over 5 years.

Much more is needed,yet nonetheless by shifting its priorities and implementing means tests an improvement in service will be experienced by many.

While $1.2 billion has been devoted to providing better salaries and conditions with the aim of retaining aged care staff, user-pays mechanisms will not include any forced sale of the family home. User pays charges will apply for many – both for residential and at-home care. But full pensioners will pay no fees.

There will be 40,000 new home care places (Up to 100,000), relieving the impact upon the Aged Care budget of expensive residential care, while providing many aged Australians with the preferred option of staying at home. Further initiatives include $269.4 m for dementia, $1 billion for Carers' Respite (over several years) and the removal of the low care/high care distinction - which in the past saw aged Australians diverted into high intensity care facilities prematurely in order to save money. The 'My Aged Care website' is another good initiative, and the government has wisely avoided a 'free market in Aged Care'. Many amongst the aged are vulnerable and on their own enjoy little consumer choice or market power. ('The Age', 21/4/2012)

Yet again the initiatives go nowhere near far enough.

The Combined Pensioners and Superannuant's Association New South Wales (CPSA – NSW) has long argued for a Aged Care 'social insurance' model. While CPSA NSW is encouraged by the government's emphasis on at-home care, however, those most in need do not always have the choice. Billions in new funding are necessary to improve the quality of residential care, and to give the aged the choice of high quality low-intensity care in a social environment. (eg: hostels) Staff to resident and nurse to resident ratios are also crucial that those needing high intensity care.

And even for those remaining at home more programs are necessary to keep aged Australians socially engaged, and happy.

The problem with Aged Care is that for many it remains a 'hidden issue'. Aged Australians are suffering – for lack of care; because of poverty; because of social disengagement; and because of the dehumanisation and loss of individual identity that often goes with high-care accomodation.

As an absolute minimum Labor needs to devote an additional $1 billion for Aged Care in the financial year 2012-13; and announce a progressively-structured Aged Care Social Insurance Scheme over the long term – similar to the agreed 'National Disability Insurance Scheme' (NDIS). (covering care, but not pension entitlements) Specifially this author challenges Government Minister Bill Shorten to champion this cause – no less worthy as it is – as he championed the cause of disability insurance.

'The Surplus'

There are sound political arguments for Labor's pursuit of a surplus in the year 2012-13. The level of economic debate in Australia is for the most part quite low. The perspective on the Federal Budget is akin to peoples' ideas on managing a family budget. Hence apparently 'The books must be balanced'. But failure to produce a surplus will result in opportunist media-grabs by the Opposition – which irresponsibly maintains popular mythologies on economic management in order to hold on to political advantage re: perceived competency.

Deeper arguments and realities do not always 'sink in'. Media speculation about the political imperative of a surplus is usually shallow and uncritical. Many voters do not seem to comprehend that investment in infrastructure can increase capacity, improving quality of life and increasing growth over the long term. And there are those who do not seem to see how stimulus is still warranted in many state economies as a consequence of the high dollar, and with falling confidence alongside the decline of tourism, education and manufacturing. Nor how lack of transport infrastructure in developing suburbs is a drag upon the broader economy – making investment there not only sustainable, but of positive benefit.

On the other hand Jessica Irving from the Sydney Morning Herald predicts that after already-projected cuts Swan will needto "raise taxes by $7 billion to achieve his surplus." And also that: "Tax increases on foreigners earning profits in Australia, say mining companies, would also have less of an impact on domestic demand, as would reduced spending on foreign-produced defence equipment."

Were the revenue proposals in this article adopted, alongside other measures suggested by Irving such as increased taxation of foreign profits in mining, that could still leave $15 billion for social programs, while the surplus was achieved.

But regardless of the perceived political imperative of a surplus for 2012-13 Labor still needs truly substantial policy initiatives if it is to re-engage with voters who have 'switched off' or 'turned away' after almost two years of sustained media onslaught. This can only be achieved with a commitment of resources which is truly substantial and appreciable in the 'big picture' of an economy valued at over $1.5 trillion.

Yet if Labor does produce such initiatives it might also manage to rally its own base, as well as the sympathetic social movements which could provide for social base for a real fight-back; and perhaps even a Labor victory in 2013.

Abbott a'Courting and Conservative? PPL, Nannies and the Nanny State

above: Tony Abbott
In this guest-post article Tom Holland provides a critique of Tony Abbott's complex ideological contortions.  Holland explores the tensions between 'Abbott the Conservative' and 'Abbott the economic liberal'.  Holland thinks it ironic that Abbott puruses policies for parental leave and elsewhere that could be described as 'socialist'.  The blog publisher (Tristan Ewins), however, observes that populist social programs have been implemented in the past by Conservative social forces seeking to broaden their appeal. (eg: Bismarck's 'practical Christianity' - Social Programs implemented in 1880s Germany partly intended to undercut the Social Democrats)

This article was originally published at Tom's blog on March 31st 2012. 

See:  http://cousinzoidfarb.blogspot.com.au/2012/03/abbott-acourting-and-conservative-ppl.html

Tom Holland

Tony Abbott has gone a'courting this year with big ticket policy proposals for women voters, and in the process has exposed confused purposes at the heart of Coalition policy formation and an ideological departure that will disappoint conservatives.

The extremely generous proposed Paid Parental Leave (PPL) scheme, and the recently announced plans to extend the child-care rebate to in-home nannies are policies designed to woo women voters to Mr Abbott and the Coalition. Both of Mr Abbott's proposed schemes have their merits and are likely to appeal to voters. But both policies are decidedly 'big government' initiatives, and are at odds with Abbott's attacks on the Government, most notably over the Carbon Tax and the NBN, and more broadly with 'small government' conservatism that underpins Liberal thought. Recent weeks have produced friction and confusion for the Coalition party room accommodating the growing divide between the tenets of their faith and the approach of their leader. Does this change in policy sit with Abbott's political philosophy, or does it represent a divergence in favour of populism?

Abbott, the Conservative

The Liberal Party in Australia is the custodian of two ideological traditions - Liberalism and Conservatism. One champions the importance of the individual while the other places faith in the importance of our society's institutions. The contentions of both philosophies create a natural contradiction, which continues to this day. But with the emergence of socialism, to which both were opposed, a pragmatic union of the traditions occurred in the modern Australian context in the form of the Liberal Party. Party members still identify as liberal or conservative, known as 'wets or 'dries', with Tony Abbott very much in the latter camp.

Damien Freeman wrote an interesting analysis of the the political philosophy of Tony Abbott in Quadrant in 2010, examining what Abbott saw as the obligations for a conservative politician to justify policy decisions. He notes that Abbott, in his book Battlelines, explains that a conservative is not burdened to produce a unifying ideological justification for policy in the same way as socialists or liberals.

Abbott argues that the other ideological traditions are obliged to impose and justify change based on their philosophical model on how they wish the future to be. He argues that progressive conservatives, rather than opposing change, accept the inevitability of a changing society and need to ensure that this change occurs in deference to the past and its institutions - “achievement is possible because ‘pygmies are standing on the shoulders of giants’”.

Whilst Abbott argues that an all-encompassing ideological justification is not required of the conservative, Freeman does enumerate a few ways Abbott believes policy can be explained. Firstly, the ideological explanation from either a liberal or conservative perspective. Secondly, an 'approach that transcends ideology' and goes to nationalism and the national interest. Thirdly, a purely pragmatic policy approach without ideological abstraction. And finally, what Freeman calls the 'counter-ideological approach' where policy is directed towards frustrating an opposing abstract idea rather than promoting one's own.

When Abbott defeated Malcolm Turnbull and Joe Hockey, both liberals, for the leadership of the party, he restored a conservative approach to politics and brought with him his political philosophy. Through the prism of Freeman's analysis, one can identify where Abbott would justify his efforts up until this year. He opposes the Carbon Tax on counter-ideological grounds, takes a hard stand on asylum seekers on what he sees as nationalistic grounds and could justify his opposition to pokies reform on liberal ideological grounds. But when one considers recent policy announcements, it is difficult to explain these using Abbott's own methods.

The Nanny Scheme and Paid Parental Leave

This week it was announced that a Nanny scheme would be referred to the Productivity Commission by a new Abbott Government as a matter of priority. It would entail extending the non-means-tested child-care rebate to nannies, who are not currently covered. The child-care rebate increased under the Rudd Government to 50% of costs to a maximum of $7500 per annum per child with child-care subsidies already costing $3 billion dollars a year. The nanny scheme threatens to increase this burden.

While it is likely to produce some migration of children from centre to nanny care, thus ameliorating the expense, it will still be a costly undertaking for the tax-payer. Mr. Abbott has said the scheme must come from within the constraints of the "existing budget envelope", but given that he rejected the proposal at the last election due to its sizeable cost, this does not seem a realistic expectation. More recent comments from Liberal sources have suggested that Abbott knows this.

The other key policy announcement by the opposition recently was the PPL scheme, which is more starkly contrary to their aims of minimising government spending. The Coalition's PPL scheme will pay a new mother a full replacement wage for 6 months, including superannuation, of up to $150,000 per annum and is expected to cost $3.2 billion. Counter-intuitively for the Coalition, it will sting its natural business constituency to pay for it. Under the scheme, a levy of 1.5% tax will be applied on businesses earning over $5 million.

In this sense, it is not dissimilar to the Carbon Tax which Mr Abbott has lambasted as overreaching government interference in the economy, and has routinely warned will drastically increase the cost of living with flow-on costs to consumers. Perhaps this is not lost on some members of the Coalition with the scheme drawing uncharacteristically public opprobrium from the Liberal backbench and mixed signals from the front bench.

Abbott, the Populist

So lets return to Abbott's methods for explaining conservative policy. These policies are contradictory from a conservative point of view with government funding of the family unit via the PPL, only to disband it with incentives for carers to return to work through the Nanny scheme. Neither scheme is easily justified through nationalism, nor pragmatism when there are adequate existing schemes. And they can hardly be described as counter-ideological as each are 'big government' policies which will spend more on these issues than the social-democratic government of the day.

The Abbott opposition has spent much of its tenure attacking Labor for imposing a nanny state on Australians. Yet now, they have introduced two cornerstone policies, which have been described as close to Abbott's heart, which are closer to socialist in philosophy than liberal or conservative. As Emma Alberici put to Barnaby Joyce on ABC's Lateline programme, if "the Coalition in government would reverse the nanny state, [why are you] saying the state should pay for nannies?"

The answer lies with Abbott, and a departure from the political philosophy that guided him this point. Perhaps a still personally unpopular Abbott, faced with a re-united Labor Party, even with a recent thrashing in Queensland and abysmal polling at present, senses that he must lift his efforts to personally appeal to voters. The PPL and Nanny scheme are policy for populism's sake, and we may see more of it yet before the next election.

Talking about Aged Care

The following article by Tristan Ewins examines the huge deficit of Aged Care services in Australia; and the need for progressive tax reform to fund a radical improvement in the sector. The author regrets that Aged Care did not seem to have been prioritised by the Greens in a recent survey: but is hoping this will change with a shift of policy by botht the ALP and the Greens.  At its conclusion, the article also includes a response to ALP activist Daniel Pocock on the question of the appropriate funding mechanisms for Aged Care and similar social services.  At the Facebook 'ALP Socialist Left Forum' page Brenton Baldwin has argued that Aged Care will be a priority for the Federal Government in the coming Budget.  Let's hope they get it right!

by Tristan Ewins

The Greens are to be applauded for their recent web-video putting the case for a reformed Mining Tax to fund social welfare and services, and to invest for the future.

See: http://greensmps.org.au/mining-tax

But while the Greens provided a survey asking people which areas they think the money from such reform ($100 billion) should be spent, they did not include Aged Care. I was upset at this for a number of reasons – all related to the urgent need for reform in that area.

Firstly: We have an ageing population. Even to maintain current quality of service will require greatly increased funding.

Secondly: Staff including nurses are underpaid, and there are inadequate ratios. This impacts upon residents’ quality of life – as staff need to turn residents in their beds to avoid bedsores; check to ensure residents are eating their meals; facilitate exchange and communications between residents to ensure they remain socially engaged… Not having enough nurses and staff to check that residents eat their meals can result in starvation and literally a physical 'withering away' so that those concerned cannot even stand up or walk.

Thirdly: The current funding mechanism is grossly unfair: requiring families to sell or take equity out against their homes operates like a regressive tax. Yet levying more proportionately from the wealthy and the upper middle class is considered ‘taboo’ and referred to as ‘class war’.

Finally: There are broader questions of quality of life for these most vulnerable Australians that barely register in our public discourse. Provision of gardens could provide an escape and a diversity of scenery that in its way could radically improve quality of life. Private rooms could help maintain a sense of dignity, private space and connection with past and one’s identity which could also radically improve quality of life. In the future information technology could be crucial in keeping residents socially and intellectually engaged.

Furthermore where possible residents should be taken on outings to create diversity and quality of life. And those aged Australians who would be better suited to lower intensity care – eg: hostels – should not be forced prematurely into high intensity care in order to ‘save a buck’.

By the same principle there must be greater assistance for aged Australians to remain living in their homes – if that is what they choose; and for family/carers’ to provide the necessary support without having to make too great a sacrifice.

When the shortfalls are considered: service quality, the funding mechanism, the wages and conditions of staff – and the ageing population is also taken into account – a figure of an additional $3.5 billion/year to be invested in the system -  is not unreasonable at this point, with 'more in the pipeline' for the future.    Though this should be in the context of a funding mechanism which operates like a progressive tax – and enables investment in the quality of life for vulnerable families, and working class families who deserve better after spending a lifetime paying their taxes. A more robust mining tax could pay for such Aged Care reform.

My hope is that the Greens and the ALP will respond to this issue and run with it as we approach the next election. But the Coalition often takes the votes of many aged Australians for granted. They should also be pressed to ‘put their money where their mouths are’ when it comes to Aged Care. The bottom line is that this is a matter of basic human rights – and of the acute suffering of our most vulnerable spending their final years in circumstances of public neglect, dehumanisation and despair.

If any of you reading this are Greens/ALP members I urge you to take this issue up in your branches and via your parliamentarians. For the Greens especially – their survey should have included reference to this most critical of issues. Here at ALP Socialist Left Forum I think we would all appreciate an official response.

And if by some miracle there are Conservatives reading this – I ask them to look within their hearts – to their basic underlying humanity – To confront the suffering and neglect experienced by our most vulnerable aged – and to DO SOMETHING.

In place of tax cuts instead commit funds for aged Australia.

Tristan Ewins

Around March 16 2012 Daniel Pocock at Facebook argued against using MRRT money this way:

“I definitely think the bias should be on construction of long-lasting public infrastructure. That will create jobs, more taxes, and the taxes on salaries should fund the welfare state. I think it is actually dangerous to use taxes from non-renewable resources (like mining) to fund ongoing expenditures (like welfare).”

To which I respond here:

I appreciate that the MRRT money isn’t going to last at current levels forever. Hence I can understand Daniel’s concern about being ‘structurally locked in’ to funding Aged Care or other social wage measures via the MRRT.

On the other hand BOTH investment in infastructure AND welfare measures are necessary - and using the MRRT money could be part of that picture - using MRRT money to 'free up' *other* money for Aged Care.

MRRT money could also be put in a Sovereign Wealth Fund with the profits from that being directed - sustainably - into Aged Care and other services as well. The point, here, is that Sovereign Wealth Fund investments could provide a source for social wage expenditure for decades into the future. But since then that fund would be slow to build up it begs the question where the money would come from for Aged Care now.

That means there would have to be tax reform elsewhere. I support such an agenda 100% - raising in the vincinity of $20 billion new money a year for programs like Gonski, the National Disability Insurance Scheme, Aged Care and welfare reform. The question is whether Labor and the government can be convinced of the need for such a far reaching agenda.

Arguably Labor is now in the position where only a radical policy shift – only a radical ‘delivering of the goods’ – can shift voters’ perceptions and voting intentions. Radical reform of Aged Care could be part of this ‘big picture’ policy agenda which could turn the tide for Labor again by re-engaging with working class Australia.

Book Review: Life Without Money

above: 'Life without Money'

The following book review explores the themes covered in the recently published book,               'Life Without Money'.  'Life Without Money' is edited by both Anitra Nelson and Frans Timmerman.  Anitra herself provides this glimpse at the themes explored in a book which seeks a way beyond market and money economies - towards a co-operative and sustainable future.  This review is reproduced with her permission.

By Anitra Nelson

When Time magazine announced “The Protester” as 2011 Person of the Year, we had to ask: Is this a signal of radical worldwide change? Did something special start to stir in 2011?

Certainly 1911 was such a momentous year: cities fell like dominoes across China so that, on New Year’s Day 1912, Sun Yat-sen became the provisional president of a liberal republic; civil strife was breaking out in Mexico, by May ending Porfirio Diaz’s dictatorial reign from 1877; and, in Russia, a brief restoration of conservative order was crumbling under the onslaught of Bolshevik and anarchistic activities. Lenin observed “increasing signs that the era of so-called peaceful bourgeois parliamentarianism is drawing to an end”.

Of course, it is only due to the dizzying events which followed through that decade and culminated in revolutions in all three countries – and more – that 1911 is now recognised by historians as such a momentous year. Still those alive at the time felt the winds of change. In some parts popular wisdom blamed Halley’s Comet, which had appeared in April 1910.

When New York’s Mayor Michael Bloomberg ordered police to clear Zuccotti Park of Occupy protestors on 15 November he called on the protesters “to occupy the space with the power of their arguments”. Starting out in the North as a movement against corporate greed, the Occupy movement quickly developed demands for grassroots democracy. The economic became political. But right at the moment it seems to have fizzled out. Or is this the quiet before the storm? What arguments might fill this space?

Whether or not 2011 becomes known as the turning point will mainly depend on whether or not the “99 per cent”, as we have nominated ourselves, take up Bloomberg’s gauntlet. It’s rather hard to imagine, with mainstream politics focusing on unremarkable presidential electioneering in North America; a pretence by the Australian media that Julia Gillard must fall and a real (read “male”) leader, such as Kevin Rudd or Tony Abbott, take her place; the UK and Europeans struggling with integration as a real, not simply nominal, Eurozone; and hard-fought-for “freedom” in the Middle East looking more and more like a mirage. Sorry, Lenin, world bourgeois parliamentarianism still seems alive and strong.

However, the 10 contributors to a new book, Life Without Money: Building Fair and Sustainable Economies, offer strong and radical responses to defenders of capitalism and the so-called “free world”. Most are activist scholars in universities in the UK, USA, Spain and Serbia. Both the book’s editors are Australian. They set out money-free models of community-based governance and collective sufficiency, arguing that production for trade contorts and destroys humane and natural values. They offer strategies for undercutting capitalism by refusing to deal in money, arguing that we need to replace monetary values and relationships by accounting directly in social and environmental values.

There are numbers of alternative communities, as well as movements such as squatting, freeganism and collaborative consumption, experimenting with non-market models. A decade ago they might have been considered marginal. However, their activities are gaining greater currency (pardon the pun) and coming into sharper focus as capitalists and workers alike fear more and worse instability in global financial markets. All this uncertainty, endemic to any market economy, threatens the viability of businesses, job security, house prices and home ownership, the worth of assets and superannuation savings. It makes people question the basis of our economy within which money is the operating principle, dominating value and determining so many relationships.

Even those of us who are not managers or workers are intimately integrated into the monetary system; everyone’s fortunes seem to rise and fall depending on satiating Mammon. The other failing of the economy is in not – or only very inadequately – accounting for environmental factors: increasing carbon emissions in the atmosphere leading to global warming, heightening the frequency and intensity of bushfires and floods; the erosion of natural ecosystems from deforestation; and the exploitation and pollution of the world’s oceans.

Environmental crises – runaway carbon emissions being but the tip of the iceberg – pose a massive threat to capitalism by laying bare the simplistic and inefficient rigidity of a system of production and exchange that focuses on price signals and that depends on growth. For the North, overconsumption is a very real sustainability-cum-economic challenge: if everyone decided to live modestly capitalism would disintegrate. Growth is capitalism’s Achilles’ heel. While overconsumption in the North demands that we develop less materialistic ways of living, it is simply impossible to imagine either individual entrepreneurs or national GDP “degrowing” without a planned economy, at which point we have only two options.

There is the option of state planned economies, which are out of favour among left and right alike. The problem with planned economies is working out how everyone gets a say in what is produced. If distribution is more on the basis of need, it would appear that money has little function. If we were to have less we would be very concerned to make sure we had enough and the kinds of things we feel we need, or badly want. Could we really leave such decisions to the kinds of politicians we have today?

No, we’d like a direct say in how we live.

Non-market forms have the distinct benefit of offering individuals and neighbourhoods economic democracy. It is precisely the importance of such democracy that lies at the heart of Occupy movements worldwide. Occupy politics focus on general assemblies (GAs), allowing everyone a say in decision-making. Clumsy, you say, impossible, not feasible. You’re right, under current economic conditions, under capitalism.

But the economic infrastructure of a world in which we could all have a say in how we live our lives is sketched out in the final chapter of Life Without Money, which builds on key arguments and examples in previous chapters to offer a model of a “compact society”. “Compact” because all the main relationships and structures would be based on legally enforceable voluntary agreements, rather than monetary contracts.

Instead of establishing tiny self-sufficient households, we’d work collectively, with a range of connected local households occupying a basic unit of a neighbourhood, the size of which would be flexible and dependent on the local ecology. Local collective sufficiency would be the key aim of every neighbourhood, sourcing materials for, and making, food, clothing and shelter as well as other basic needs, through appropriate technology. Of course, there would be likely to be needs or wants that people could not source or create locally. Ideally, these would be obtained from a neighbouring area or through the least environmentally and socially expensive option available at the time.

Establishing and maintaining collective sufficiency would require every individual to work out what they would need over a year, assessing local potential, planning how to meet the needs listed, working out how surpluses might be generated, and negotiating with other units to fulfil their needs. The internet facilitates this kind of collective research, planning and negotiation, which would involve numerous compacts.

In 1990 the Global Commons Institute established the idea of addressing the problem of global climate change by a contract-and-converge strategy – contracting emissions and converging by demanding big reductions from the largest polluters so everyone ends up with a similar carbon footprint. A contract-and-converge strategy can be applied to achieve fair and equitable production and distribution in a money-free world. We’d need to redistribute power over the means of production in a radically fair way.

A main focus of the Occupy movement has been working out how to develop and embed processes for direct decision-making. Only by expanding such experience can we decide what practices work, are efficient, effective and really democratic. At the same time, as developments that stimulated the Occupy movement show, the economic systems by which we live have to be reclaimed as our cultural inventions.

A massive decade of engaging with our current economic, environmental and political challenges might well have just started.


Anitra Nelson is an Associate Professor in the School of Global Studies Social Science and Planning, RMIT University, and co-editor of Life Without Money. She will be a Visiting Scholar in the Economics Department of the New School for Social Research in New York, March to May 2012.

This article is an expanded version of a guest post, “Occupy! and Radical Politics Part 2 – Beyond Money”, which appeared in a series at the Pluto Press Blog on 21 December, 2011.