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Saturday, July 23, 2016

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

above:  ALP Shadow Treasurer, Chris Bowen (a member of the NSW Right) has argued for "Equal Outcomes in Health" ; Let's see that principle fully acted upon in Labor policy approaching the next Federal Election.

In the wake of the federal election result there has been a good deal of introspection and analysis of the result: including analysis of Labor’s strengths and weaknesses. 
But leading up to and after the election I was saddened to see some in the Party inferring Greens policies were ‘unaffordable’. Arguably that is not the right way to differentiate ourselves from the Greens party.  Rather Labor needs to consolidate its credentials as the party of the ‘Red Left’ in Australia ; with strong social justice policies which inspire our organisational and electoral bases.
Dr Tristan Ewins

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

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

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

But despite claims to the contrary, people who were insisting that we needed Greens preferences to win were proven right.  We cannot escape from the fact Labor and the Greens need each other.
So for the most part "big spending" promises are 'not the problem'. Promoting incremental extension of social insurance, social welfare and the social wage - should go without saying for Labor. We did not go far enough on tax reform and superannuation concessions reform. Yet nonetheless it was the most promising economic platform we've promoted in years. By this I mean it was the first election in years where we had not locked ourselves arbitrarily in to a policy of holding spending and tax down as a proportion of GDP.  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

·         Fully Implement the Gonski education reforms, and NDIS

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

·         increase investment in public and social housing

·          implement a National Aged Care Insurance Scheme

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

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

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

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

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


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

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

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

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

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

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

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


  1. Yes, public policy designed to distribute the prosperity of modern technological capitalism more fairly would win votes if the public imagination is captured by moderate proposals to so do.

    A more inclusive prosperity, as opposed to the increasing inequality that free trade unfettered laissez faire requires the government to time limit intellectual property rights so that IP property holders the 1% don't get richer and richer.

    And, unless the rich pay their taxes, there will be only mean inadequate welfare. And corporations too! A broad good mix of fair taxes on various income and revenue streams and on types of assets licence fees and fines can supply the revenue needed to do things. But in today's incrementalist class war the right now side with tax avoidance every which way. Perhaps white collar criminals need prison time in old fashioned bluestone prisons to give tax avoidance a bad name, to get the message through that it's wrong??

    Getting the rank and file active in demands for social reform is important. The bankrupt idea that a few votes electing a simple majority to parliament will abra cadabra lead to instant equality instant utopia is long exposed. Parliaments only make progressive reforms if pushed by social movements from below!

  2. As a sympathetic fellow traveller, I support your view that Labor should:
    begin a debate sooner rather than later: moving Labor onto ‘the front foot’. This means shifting straight away to a ‘permanent campaign mode’ based on ‘solid but partial mobilisation’ through the activism of our rank and file.

    In my experience, Labor’s greatest and most underutilised resource is its rank and file, the significant network of geographically based branches and special interest groupings such as LEAN and L4R. The importance of branches is underestimated by the party hierarchy who see them as useful foot soldiers at election time and not worthy of much attention otherwise.

    Imagine what could be gained by diverting funding away from the focus group fiasco and directing it towards talking with Labor’s own people on the ground. It is these people who understand the need for specific policy initiatives, who can identify the drawbacks and positives that make a policy workable and saleable and who will be the frontline in selling the message to the community.

    Engaging the rank and file early on is essential in developing policy and identifying priorities that are relevant to people in the here and now. Branch members and interest groups can be a source of ideas, a tool in preparing the ground for policy change, a way to identify priorities and potential blocks, a means for testing reactions to the policy and providing feedback on how to structure the message. If ordinary members have ownership of policy by participating in the development process, they will become the most effective ambassadors for selling the message to their family, friends, neighbours and the larger community.

    To mobilise the rank and file, the party must take a long hard look at how it relates to its ordinary members. Organisation around geographically based branches in community halls using old fashioned formal meeting procedures is a distinctly old fashioned way to keep your members interested and involved. The party must move away from the approach that worked in the early to mid 20th century. It needs to go out and meet its members wherever they are and to use modern communication tools and protocols that encourage greater participation by the rank and file.

    The non-binding policy conference you propose could well be a first step in this process of establishing a more effective dialogue with the party’s grass roots.

  3. Thanks Tristan. If we look at the OECD figures Australia is a low tax, low spending country as a percentage of GDP on a par with Turkey and Japan in terms of tax take. Increasing the tax take to the OECD average would raise about an extra $100 bn a year. While I support your suggestions I don't see Labor doing much of what you suggest because they are a party of managing capitalism, and hence in the current epoch a party of neoliberalism. That is why it is losing lots of members over time.

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

    What you describe falls into the rubric of 'human security'.

    The main objective of the state is to secure the security of its citizens. This is traditionally regarded as referring to military security - the ADF and wasted billions on subs and jet fighters that don't work etc etc.

    It's time the ALP thought long and hard about adopting the human security concept to wrap its policies in, since it is so fearful of 'socialism' these days (always?).

    It could even be built into a meaningful definition of 'the national interest', which would be a novel move.

  5. All good, but more of the "same old". A positive policy to assist young home buyers would be a radical and good start. Not the old grant give away scheme. A "housing help fund" secured by mortgage could be an idea to be tossed around as i would not like to see this done via superannuation. A variable repayment schedule could be deducted based from income as with HEX. It should be clear from the start the defaulters would be treated as any housing lender would do in similar instances. A total purchase price could be based on a number times income earnings but with an upper limit of disqualification on annual earnings. Mortgage rates could be in line with or slightly lower than the market average. This type of policy could run in conjunction with the party's negative gearing policy. The fund could even be run independent of direct government control. New building costs are not that prohibitive so as to prevent this scheme being a success. A capital injection from Government on an annual budget basis could be considered until the fund becomes self supporting after a satisfactory level of profitability is reached including repayments to Government of that capital. In general it is socialist inspired but with a capitalist bent and therefore difficult to argue against with each buyer being responsible for their own economic decision. I am sure many will remember the outcry when the Commonwealth Bank was privatised. This is simply an old idea given a new life and would in my opinion undoubtedly have widespread support.