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Wednesday, July 31, 2013

Does the ALP have a Social Democratic Vision beyond Austerity and Small Government?

above: Treasurer, Chris Bowen and Finance Minister, Penny Wong need to decide between 'Labor Values' or Austerity
There is an urgent debate that needs to be had in Labor before any commitments to further austerity writes grassroots Labor activist, Tristan Ewins.  Five-year commitments to 'quarantining' unfair superannuation concessions could prove to be costly to both the 'Budget bottom line' and to broader goals of social welfare and distributive justice.

Tristan Ewins,  July 31st 2013

For anyone who hadn’t noticed – Buried at the end of a news story on page nine of the Herald-Sun on July 31st   was an announcement to the effect that Labor was pledging “no changes”  “to superannuation for at least five years”, “locked in” via legislation.  Deceitful as always, the Herald-Sun proclaimed this would prevent “tinkering” via “super taxes”.  (this is deceptive because the issue is with existing TAX BREAKS on superannuation rather than the implementation of any new tax)

And on the same day on page 2 of the Herald-Sun was the proclamation that “households face thousands of dollars in higher bills for fresh food, health and education payments” if the GST is increased and/or expanded in scope – as demanded by the Business Council of Australia. (BCA)

So what’s the connection between these?

As the China boom recedes somewhat – and with the prospect of an ageing population - the government is facing a reduction in tax revenues, including revenue from Company Tax and the GST – at the same time as an ageing population will increase health expenditures in the context of a narrowing tax base. Then there’s the fiscal impact of winding back the Carbon Tax.  And on top of that you can add the fact that the country is suffering a massive infrastructure deficit – with business recognising that crisis – and its impact upon productivity – by demanding that workers, citizens and consumers pay the price.  

According to Grattan  Institute chief executive John Daley extending the GST to education, health and food “would potentially add $3000 a year to average household costs.”   And the BCA is also looking to attack organised labour in order to firm up their profit margins.

Malcolm Maiden at ‘The Age’ puts it this way: that “The BCA wants stronger fiscal discipline and a more flexible industrial relations environment…”  Translated that means: curtail industrial liberties, remove safeguards for wages and conditions; cut the social wage and welfare…  Maiden also observes that other moves are also apparently ‘on the table’; perhaps including massive cuts to Company Tax and a “ceiling on tax revenue as a proportion of GDP.” (The Age, July 31st)

To put it bluntly: Labor needs to decide WHAT and WHO it stands for.   Does it stand for the traditions of social democracy?  Does it stand for the vulnerable, and for the low and middle income earners of the working class?  Does it stand for social security and social solidarity? Or does it stand for small government, corporate welfare, regressive taxation, ‘survival of the fittest’,  ‘the top end of town’, and a preference for abstract economic goals, and increased private dividends and profits – instead of concrete social goals and needs?.

Richard Denniss of the Australia Institute has pointed out that changes to Australia’s income tax regime from before the GFC hit (ie: 2006 - under Howard)  were costing $40 billion for the year 2013 alone.

And crucially he has made the additional observation that those superannuation concessions the Federal Government seems so eager to quarantine will cost about $50 billion a year by 2016.  And according to Denniss that’s with a dominant percentage of superannuation tax concessions (ie: tax breaks) going  to the top 5% income demographic!   This at the same time as the Federal Labor Government continues austerity against pensioners, and considers further cuts to welfare and services!   (see:   (See: )

Of course the BCA will look after its own interests, and the profit margins and dividends of its members.  It will try and push the case for effective corporate welfare: for cuts in the tax business pays at the same time as taxes and user charges go up for workers, tax payers and consumers to provide the infrastructure and services its members benefit from.  This – and also assaults on workers’ wages and conditions – is about shoring up profit-margins and dividends by increasing the intensity and the rate of exploitation.

There are points of ‘cross-over’ when it comes to the interests of citizens, workers and business.  Keeping business generally viable means preserving jobs.  But the public interest and business interests should not always be seen as synonymous.  We should seek  BOTH to divide the pie fairly AND to grow it through technological improvements to productivity, and support for high-wage industry.  (ie: NOT by intensifying exploitation through attacks on wages and conditions)

 And we need to retain focus on the social goals that underscore our economy.  That is: not promoting profit as an abstract end in itself – but promoting economic activity which adds to the quality of life of citizens and workers.  This necessarily entails social investment in properly not-for-profit sectors:  health care, aged care, public housing, education for human development – and not just for the labour market.  It might also mean reductions in the working week, and in peoples’ working lives – for concrete human needs that go beyond abstracted goals of growth.

All sides of politics recognise the infrastructure deficit and the need “to do something about it”.  It is hurting our productivity – and in so doing hurting both workers and business. But we have  a CHOICE in the WAY in which we respond to that crisis. 

The Labor government can choose a path of austerity – attacking pensioners, the social wage, the welfare state, and industrial rights and liberties.  Or it can choose to embrace social democracy more than merely rhetorically – returning to questions of distributive justice and ‘the social good’.   And Labor can choose to act on those principles of distributive justice by committing to a gradual expansion of the social wage and welfare state as a proportion of GDP -  instead of embracing socially damaging ‘ceilings’ on tax and social expenditure.  Such ‘ceilings’ would only flow into greater social disadvantage and injustice - and most likely into infrastructure privatisation whose inefficiencies hurt both business and consumers. 

Notions of the social wage, public infrastructure and welfare ‘crowding out’ the private sector also need to be challenged.  A benefit of relative economic abundance is that consumers can potentially have significant room for discretion in their spending priorities at the same time as a decent proportion of peoples’ incomes is diverted into the ‘social infrastructure’ of services, physical infrastructure (eg; transport, communications, schools, libraries) and welfare – without which society itself would collapse, or lapse into barbarism.  It also means that people can potentially enjoy earlier retirement ages and shorter working weeks – as technological improvements to productivity make this possible over time without hurting absolute material living standards.   Though progressive taxes (ie: not the GST) would need to rise in order to maintain that “social infrastructure”.  (a fair ‘trade off’) The Nordic countries, and other European countries such as Denmark and the Netherlands – give us some idea what might be possible.

But in order to pursue such a social democratic vision Labor cannot and should not ‘hem itself in’ with ill-thought-out five year commitments on superannuation concessions which do not even have the authority of a National Conference position behind them! 

Also, another hung parliament cannot be completely ruled out, and the Greens will likely want reform on tax and tax concessions in that event.  ‘Locking itself in’ to such a position simply leaves Labor open to further accusations of promise-breaking should reforms in that area become necessary; or are seen as preferable after a meaningful, inclusive and genuine internal debate.

If removing superannuation concessions, reforming dividend imputation, and restructuring the broader tax mix can bring in tens of billions there is simply no need for the kind of austerity Labor is contemplating in order to return to surplus.  What’s more – Labor can implement such a program WITHOUT harming the low and middle income demographics which it depends upon for its electoral base.   It can aim at a fairer contribution from the wealthy and the upper middle class.  And through reform of tax, welfare and the social wage – Labor can pursue a distinctively social-democratic vision of ‘the good society’ which is much deeper than simply ‘more and more’ private consumption and production – regardless of the social cost.

But by contrast – allowing social and economic infrastructure to ‘wither on the vine’ will hurt everyone – workers and business included.   And turning to privatisation of infrastructure also passes the price of inferior cost-structures on to consumers – including both citizens and businesses.

Standing for the same agenda of austerity and distributive injustice as the Liberals – but ‘not quite as much’ isn’t enough to cut it for Labor; to inspire and mobilise the people we need behind us to win this election. 

ALP activists need to make their voices heard on these issues: regardless of whether they do so through the decision making forums of the Right or the Left; and/or through their local branches; and by writing to their local members.  We need to signal our intention to fight the ‘small government’ template: to stand for social welfare and social justice; and a distinctively social-democratic vision of ‘The Good Society’. 

References: ‘The Age’ and the ‘Herald Sun’, July 31st 2013; and Richard Denniss at:



  1. While it is possible to formulate any number of social democratic policies and future visions, the reality is that Social Democracy as a social movement is dead. It began to wither in the 1950s and the Hawke/Keating governments played an important role in arranging the funeral.

    In the absence of a social movement to support social democratic politics, appeals for the ALP to embrace a 'Good Society' vision are, to be blunt, a waste of time.

    At the moment there is no movement in civil society capable of sustaining a radical-progressive politics against the electoralism, technocratic ideologies, and apolitical populism that define the upper echelons of the ALP.

    Such a movement will not emerge from within the ALP. The Party is too debased as a political organisation for that to happen. It is not clear where it will emerge from - perhaps a climate movement revitalised by a growing number of environmental disasters and extreme weather conditions?

    But urging change on the Federal caucus is just pissing in the wind.


  2. Mark; on the other hand we have new technologies which hold the prospect of organisational and mobilising capacities that have never existed before. Higher levels of education also hold the potential to encourage a more active society. A modest voluntarism would argue that we can make the most of those technologies to remobilise the Left. One strategy could be an agenda of active/critical civics education - striving to encourage ideological and political literacy as well as an active society.

    Within the ALP there are still plenty of believers in liberalism - even if there's little recognisable as Social Democracy in the more radical, original sense. I think open defeatism leads to passivity and weakens the Left even further than is already the case. By contrast the optimistic discourses of nineteenth and early twentieth century Social Democracy assisted in the mobilisation of Social Democracy as a mass movement.

    Anyway - think of Europe on the verge of WWII - Highly authoritarian or Fascist regimes in just about every country. And yet the Left emerged from WWII quite strong. I think we are again at a point where parliamentary democracy and civil liberties are under threat - assisted by growing cynicism with regards democracy as most people actually experience it. I think if we don't fight for it, now, we may well lose it... But in order to fight for it - we need a mobilising narrative.

  3. Though those social democratic movements of the late 19th and early 20th centuries had a problem with passivity also; they were optimistic (a mobilising) factor; but many also believed 'the revolution would fall into their laps' because of the apparently intrinsic dynamics of capitalism. (a demobilising factor) Bolshevism changed everything - but with the transition to Stalinism this came at a terrible cost.

  4. In terms of a movement to support social democratic politics - I think we are beyond the point where we can rely on the labour movement to play the overwhelming role. Rather we need a 'movement of movements' - with solidarity based on 'chains of equivalence' with regard a wide variety of groups' experiences of subordination, exploitation, oppression, exclusion... Perhaps this is just harking back to New Left politics - But what has gone missing in modern 'identity politics' is the notion of broad reciprocal solidarity. We need to restore the principle and the spirit of solidarity in a movement of movements where no-one is 'left behind' and forgotten.

  5. Many of the optimistic discourses of 19th century derived their optimism and mobilising force from their promise of a post-capitalist society - a promise that appealed to millions of workers because many were economically and politically excluded from the capitalism of that time.

    Today much of the working population has been partially integrated into capitalism via the franchise, debt, consumerism, home ownership, mass media etc. Therefore social democracy as a transformative project holds little credibility or appeal.

    I agree we need a mobilising narrative - but to be credible and workable the narrative has to be connected to a political party that is capable of acting as the political vehicle for a mobilisation.

    There are few parties less likely to play that role than the contemporary ALP. The leadership regard the membership with contempt. Important parts of the party are simply corrupt. Much of the membership are passive and depoliticised. Decades of endless compromise, opportunistic vote-chasing and making cosy deals with business have robbed the party of any coherent political ideology.

    Passivity and cynicism are the enemies of progressive politics. But the battle against these enemies was lost inside the ALP many years ago.


  6. Mark, I agree with you that much of the working population has been co-opted to capitalism. And you may be right there are significant elements of the ALP hierarchy who view the membership with contempt – viewing grassroots initiative as ‘disruptive’ or as ‘a pest’. And while there are moves to open up election of the leader, as far as Chris Bowen is concerned this is to be combined with the annulment of National Conference as an effective and binding decision-making body – making its decisions merely ‘a guide’ rather than binding in any sense. There is a need for the grassroots from which to adopt staffers, advisors and candidates. But real grassroots activism and initiative is seen as ‘threatening’ as it cannot be completely controlled via the usual channels.

    And yet Bowen is also open to a directly elected component of Conference (300 delegates) – which would open the process up somewhat – and involve a more rigorous contest for the formation of the Platform. This could be meaningful if Bowen did not get his way making Conference a ‘toothless tiger’.

    I also think there are possible options and strategies.

    I believe that there is still a substantial potential social base for social wage, welfare and social insurance policies. I believe that arguments for progressive tax could resonate if only enough people of sufficient profile were out there arguing for it. And if there was an organisation behind it too. This is not ‘socialism’ in the sense the Left used to mean. But it’s a progressive platform that I think is ‘doable’ over the next decade.

    And again I believe that an active/critical component in secondary curricula could be won on the basis of liberal arguments for active and informed citizenship. And that could have a transformative effect on young citizens.

    Yes I’d like to see a new party rise on the Left – a ‘Red Left’ Party embodying a cross-section of ‘red left traditions’. And networking with a wide range of sympathetic and allied social movements – again a ‘movement of movements’ – based on reciprocal solidarity founded on values of liberty and equality. I’d love to see such a Party rise in Australia along similar lines to similar parties in Europe. I wish someone would do something about that… Though the Socialist Alliance and Socialist Alternative are still too narrow ideologically to form the basis for such a challenge. (A challenge aimed at contesting the mainstream from the Left) And I don’t see anyone else moving to found such a Party… At least not on the scale that could pose a genuine challenge to the ALP; or complement The Greens by helping mobilise a broader base including those who identify with “red left tradition’.

    But even then what we call a ‘broad left electoral bloc’ would still need to include the ALP. There’s still a need for good people in the ALP. We need progressives in the ALP to maintain enough of a ‘shared ideological ground’ with the broader Left so we end up with that ‘broad left electoral bloc’ – based on negotiation and compromise – rather than having the main parties combine to ‘lock out the Left’.

    Reading Bowen he is arguing for ‘no compromises’ with the Greens; If that outlook were put into practice small (Left) parties would lose their leverage; and the ALP would only damage itself because of the consequent instability.

    Also if we get the right kind of organisational reform –ie: grassroots election of Conference delegates – WITHOUT a ‘toothless’ Conference – then suddenly there’s an awful lot more at stake. And maybe this could help revive Party activism.

  7. I don't think a radical/progressive politics can be built from within the ALP.

    In part this is because of factors particular to the ALP (the internal dysfunctionality, the recent history of the party as an agent of neoliberalism, the overwhelming dominance of technocratic conceptions of politics and policy).

    It is also because of the general nature of contemporary parties from the labourist/social democratic tradition who contend for national government (the ALP, British Labour etc).

    The pressure on such parties to shape policy to maximise votes (and particularly the votes of floating voters whose intincts on many issues tend to the right) to win government are so intense that they leave little internal space for radical thinking and policy alternatives.

    In short, the 'taut electoralism' of contemporary centre-left parties provides a deeply inhospitable climate for any policy agenda that does not have the potential to appeal to parts of the centre-right.

    Attempts by the left to push policy in radical directions can be easily countered by the argument that such radicalism will likely alienate the very voters the party needs to win office. End of argument.

    In conclusion, the constituency for radical politics in contemporary Australia is small. To attempt to pursue such politics within the ALP will fail.

    This conclusion flows not from pessimism, but from what I believe to be a reasonable assessment of the structural characteristics and dynamics of the contemporary ALP.


  8. Mark; the problem is - what is the alternative? Where is there a 'broad left' 'red' political party in which, say, I could feel comfortable - given what could be called my 'liberal-left social democracy' or 'liberal democratic socialism'. (for instance, identifying historically with traditions like Austro-Marxism, Eurocommunism, the more radical streams of Swedish social democracy, Radical Left revisionism etc)

    And if Labor is necessarily part of any 'broad left electoral bloc' - how to keep Labor within the scope of such a potential bloc if all the good people leave? That said - I understand what you mean about the pressures towards opportunism... But if we accept parlimentarism as a big part of our strategies - can we afford to just abandon Labor to its fate?

    Importantly, in the 19th Century Marx argued that socialist transition would comprise a "civil war" lasting 10, 20 or maybe 50 years... It's turned out to have been a lot longer than that - and still not a kind of socialism that I think Marx would have been completely comfortable with... But it does underscore that we need a long term perspective...

    But the small Marxist-Leninist organisations have been preparing for a future that never came - for decades and decades and decades... Where is there an political party - which seeks a mass base in a realistic way - which seeks to organise the working class politically - as well as allied social movements?

  9. I think there is a degree of self-delusion among those on the left who think their presence within the ALP can counter the logics of electoralism that have increasingly defined the ethos and behaviour of the ALP since the 1950s.

    The fate of the ALP will be decided by a largely autonomous Federal caucus and the technocrats they employ to make policy and win votes.

    The left at branch and community level are irrelevant. I know this because I was a left activist within the ALP for 6 years.

    As for the 'alternative' - it depends what you want to achieve.

    If you want a more human capitalism (which is an entirely honourable position to hold) then it is possible that a future ALP government will implement some reforms in that direction.

    But contemporary left reformism is a fundamentally parasitical politics (rather than an oppositional one). Therefore, such reforms will come at a price: namely the deepened integration of Australian capitalism into the world economy and a related strengthening of neoliberal ideologies and practices within workplaces and communities.

    So reforms will entail a further erosion of those social forms which are vital to building and sustaining a progressive movement.

    Of course, reforms that build collective identities and capacities that empower working people to challenge prevailing power structures would be very welcome. But no one seriously thinks that any ALP govt will do that.

    So any furture Labor reforms will be 'neoliberal' in character: more spending on health and education in return for increasing competitiveness (increased labour market and workplace flexibility). In this context the future for organised labour is bleak: a choice between confrontation with a Coalition govt, or co-operating with managing decline under a Labor one.

    An alternative must involve doing what the ALP has no interest in doing: mobilising, politicising and empowering working people. To do so, and to then render such a mobilisation subordinate to the electoralism of the ALP machine would be a tragic waste of time and politically irresponsible.

    In the short term The Greens offer some hope. They are internally democratic and they value member participation. They offer a credible political vehicle for progressive politics that involves mobilising and politicising people. That is a vitally important step in the right direction.

    Those socialists inside the ALP must stop deluding themselves that if they leave the party it will fall apart and the Coalition will reign supreme. Nonsense. The ALP will stagger on, fuelled by its integration into the state and federal bureaucracies, an increasingly desperate union movement, and the donations of big business.

    Within the ALP there is no battle for the left to have with the likes of Bob Carr and Chris Bowen. They have already won. In the words of Ralph Miliband to the British Labour left, 'it is time to move on'.


  10. Mark; Ideally I'd like to transition to a democratic socialist economy. But you're right the prospects aren't so good for the immediate future. Moving back to a mixed economy is possible. But displacing the capitalist class over the short-medium term is not.

    I agree, therefore, its entirely legitimate for us to fight for 'the best we can get' form capitalism in the meantime. For me that involves expanding government expenditure on infrastructure, the welfare state and social wage by about 4.5 per cent of GDP over about 10 years per cent. And also reversion to a mixed economy. Especially I think a fairer welfare system and expansion of services in aged care, dental etc - are very desirable ends.

    Though at the same time I want to keep talking about democratic socialism too; and maintain a sense of socialist identity and tradition.

    And I think collective capital formation and state aid for co-operatives are possible; though state aid would originally be on a small scale...