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Tuesday, September 27, 2022

Social Justice doesn't need to be 'put on hold' to Fight Inflation

 

above:  Albanese doesn't need to 'put social justice on hold' to fight inflation


In Australia the Labor Government is being warned not to spend too much for fear of exacerbating inflation.  At the same time workers are urged to moderate wage demands to avoid a ‘wage/price spiral’.  This is the ‘common sense’ of the day.  But at the same time the labour share of the economy has fallen by over 10 per cent of GDP since the 1970s.

Furthermore, income inequality is marked.  ACOSS observes that:

“People in the highest 20% income group receive 42% of all national income, which is more than the share of the lowest 60% combined. People in the lowest 20% receive only 6% of all household income, while the second lowest 20% receive 12%.”

Here, those in the lowest 20% bracket earn on average $753 a week. While those in the highest 10% bracket take $5230.

Meanwhile, in terms of wealth the bottom 20% average $36,000, while the top 10% average $4,754,000.

Amidst this the Federal Labor Government’s support for an increase of the minimum wage in line with inflation is welcome. But ‘the bigger picture’ is one of increasing inequality, and an increasingly lower share of the economy going towards the needs of working Australians.  At some point Labor needs to confront inequality ; and rectify these imbalances.  But rather than suppressing wages or implementing austerity, the ‘heat’ could be taken out of the economy by raising tax.  Temporary tax increases could target those on middle incomes, while permanent tax increases could target those on high incomes with the goal on funding social wage measures – like Medicare Dental.   Because of the need to moderate demand at this time, the ‘middle’ will be affected either by interest rates, or wage suppression, or tax.  Choosing ‘the tax lever’ achieves this while providing the means to fund infrastructure, welfare and social wage initiatives.   At the same time wages – especially at the lower end – could rise – with the aim of furthering distributive justice.  Overall wages should also rise where the wage share is lower ; and where rectification is necessary. Labor should make representations to Fair Work Australia to achieve this ; and to increase the share going to lower income earners overall. But in the immediate term demand would be moderated through higher tax.  Over the longer term such taxes on ‘the middle’ could be removed to promote an economic recovery. 

The question Labor needs to ask is: ‘can social and distributive justice be furthered while tackling inflation at the same time?’  In this context, pursuing the Stage Three tax cuts makes no sense economically, and from a social and distributive justice perspective.  They will see a flat 30 per cent tax rate for all incomes from $40,000 to $200,000.   This will see an increase in overall demand rather than have a dampening effect.  (though by then the inflation genie may be 'back in the bottle' so to speak)  It will also minimise progressive redistribution and entrench inequality.   It means proportionately those on lower incomes will pay more for the services and infrastructure functions of government, The Stage Three Tax Cats will also cost the Budget billions: almost $250 biillion over nine years.  This money could fund high speed rail, and Medicare Dental, while improving pensions, and winding back user pays in Higher Education.  It could also fund a massive investment in public housing, while improving the wages of Aged Care workers significantly. And probably much more besides.  Some would say such investment would act as a stimulus ; but again it depends on what temporary and permanent tax increases accompany said measures.  Importantly, if such spending kicked in a bit later down the track, the inflation crisis might be over ; and stimulus may in fact be appropriate once more.

The bottom line is that managing inflation does not have to mean social and distributive justice are put on hold. There is scope to improve welfare and social wage while dampening demand overall in the immediate term ; but also rectifying the imbalance between capital’s share of the economy and labour’s share of the economy.  When we have Labor Governments we need to make the most of such opportunities.  We need an Albanese Government that makes the most of the possibilities of government ; and makes long term structural reforms which further the goals of social and distributive justice.

Tuesday, August 30, 2022

Remembering Mikhail Gorbachev and his Legacy

 


above: Former Soviet leader, Mikhail Gorbachev


Dr Tristan Ewins


Mikhail Gorbachev has passed away at the age of 91.  In the West Gorbachev is still held in high esteem for ‘ending the Cold War’.    His policies of Glasnost (‘openness’) and Perestroika (‘Restructuring’) opened the way for reform, but also perhaps sadly the disintegration that then followed, with the effective theft of peoples’ assets and industry that was later to occur under Boris Yeltsin.  The world of (capitalist) ‘oligarchs’ that has followed the collapse cannot seriously be considered as in any way better than the former state of affairs ; and liberties did not last long in the former USSR following Gorbachev’s fall from power.  Though it’s interesting that we do not call our own billionaires ‘oligarchs’ in the West ; and especially in the United States where corporate lobbyists have unmatched power.

Gorbachev understood that the USSR could not compete militarily with the West while it failed to compete economically.  In the 80s military competition had accelerated and there was a widespread fear of nuclear war which we have now forgotten.  Gorbachev agitated for peace at the same time as Reagan pursued his ‘Star Wars’ plan, which aimed to make a nuclear war ‘winnable’.   At the same time there was repression, Terror and mass murder closer to home, in countries like Guatemala, Nicaragua and El Salvador.  And yet the United States outpaced the East largely because of a ruthless exploitation of its economic periphery. (eg: including Central and South America)  In many ways Gorbachev heralded the kind of reform democratic socialists had long been hoping for, legitimising the USSR for many, but also helping to precipitate a collapse.  In retrospect it would have been better if the USSR had not collapsed.  But decades of Stalinism meant there was little in the way of a mobilised and independent civil society.  The consequence was that when the collapse occurred there was little resistance. In light of all this it would have been better if Gorbachev had mobilised civil society in defence of democratic socialism from the outset.

Gorbachev’s passing reminds us of missed opportunities, and begs the question of whether there was a better way forward.  Today there is war in Ukraine ; and the Russian Government entertains ideas of an Imperial restoration.  Russia may find a place as an important trading partner of China, but cannot really hope to restore ‘former glory’ when opposed by almost the entirety of Europe ; and the US.  Also the rupturing of Russia’s trade ties with Europe is harming both sides immensely. Though Russia’s still-massive nuclear arsenal deters uncontrolled escalation.

In later years Gorbachev commonly referred to himself as a Social Democrat ; and tried to establish a social-democratic party in Russia.  On the other hand, arguably the USSR was still ahead of Western Social Democracy on many fronts prior to its collapse.  Mainly in regard to the spread of socialised industry.  Maybe Gorbachev was trying to move with the times, and promote the best possible outcome available at the time. Though his efforts to promote social democracy in the Russian Federation largely met with failure.  In some ways China demonstrates how in certain respects compromise with capitalism can help an ostensibly socialist state to economically compete with the West. Though this could also lead to a crisis of legitimacy and identity. 

Perhaps attempts to consolidate a democratic USSR might have failed given the influence of various nationalisms, but now we will never know.  In the mid to late 1980s Mikhail Gorbachev represented the best hope for peace, d├ętente and avoiding nuclear war.  With his passing we should also consider the world that ‘might have been’ ; and mourn the ultimate failure of Gorbachev’s reforms ; with capitalist restoration and the rise of an Imperial Russian State.

Sunday, June 5, 2022

Labor in Government provides Opportunities that Should not be Wasted

 




In the run-up to the Federal Election many progressives tried to justify Labor’s small target strategy by arguing that Labor would get things done once in government. But that too much detail beforehand would confuse and overwhelm people.  Now the day has come.  Labor has enjoyed a strong victory. And it’s time to deliver.


The Greens have argued for Medicare Dental ; but Labor could make the policy its own while winning broad and ongoing Greens support for the remainder of the term.  The squeeze on the cost of Gas also demands subsidies in favour of those on low incomes and welfare.  While an increase in the supply of public housing could improve housing affordability. Pressure on the NDIS should be lifted with additional funding ; as should pressure on our hospitals.  Waiting lists have exploded with Covid ; and action is urgently required. Accessibility and affordability in Higher Education should also be addressed with lower fees and an increase in repayment schedules clearly above the average wage.  Tied grants should be provided to the states to fund an increase in teacher numbers ; while a National Curriculum should be designed which promotes active, informed and critical citizenship.   This includes understanding of political processes and opportunities for public sphere participation ; as well as sophisticated ideological literacy. Finally, promises on Aged Care should be implemented. Albanese has promised an increase in care personal attention hours for residents ; but to implement this we need Aged Care Worker Ratios. Winning Government is not the end of the journey ; it is only the beginning.


We also need a sense of scale when talking about funding for reform.  There is often a sense of panic and alarm when talking about policies which go into the billions.   How often do we hear that ‘we cannot throw money at problems’ or that funding policies is dismissed as a ‘cash splash’.  (and hence ‘irresponsible’)  But let’s be clear ; the economy is valued at some $1.7 Trillion a year. That’s ONE THOUSAND AND SEVEN HUNDRED BILLION.  Fear to pursue truly ambitious policy leads to stagnation.  And failure to commit money translates as a failure to commit resources.  Viewed thus, any public policy agenda will fail without sufficient resourcing.  Labor needs to be thinking about what is reasonable in terms of short to long term plans to expand the social wage and welfare state, as well as other programs to provide infrastructure and skill development, and to improve public broadcasting.  We need to develop popular understanding of concepts such as ‘collective consumption’ ; and how the social wage can provide better value for money for workers, consumers, tax-payers.  $17 billion is one per cent of GDP. And over several terms of Government it is a reasonable objective to aim to broaden the social wage and welfare state by 5 per cent of GDP.  

 

This is not an arbitrary figure, but an estimate of what is necessary for ambitious reform.  Again, this could fund public housing, education and health, aged care, welfare and unemployment insurance reform, infrastructure (including renewable energy, rail transport and fiber to the home National Broadband Netowork (NBN) ), and programs to secure guaranteed job placement and experience for the disabled.  Disability Pensions should be reformed also, to increase the scope to supplement income with part-time or casual work, and to take away perverse incentives to avoid intimate relationships.  (eg: measures which radically reduce pension payments to individuals in relationships and marriages)   Further ; local government should be supported so that suburbs who suffer from undeveloped social infrastructure like parks and gardens, sporting and fitness infrastructure, libraries and so on – are able to deliver better quality of life to working class families.

 

Meanwhile ; over the long term there should be plans to resocialise energy and water.  And to reintroduce public-owned competitors in markets like financial services and insurance: to counter collusion and support consumers by providing competition from government business enterprises on a not-for-profit footing.

 

Finally, the labour market demands structural reform to prevent the entrenchment of a class of working poor Australians. This may have a once-off inflationary effect ; but redistribution one way or another is necessary to deliver wage justice.   We need to address the distribution of the economic pie between capital and labour ; but also between labourers themselves as well.  Other innovative policies could include financial support and financial counselling for people planning on developing co-operative enterprise. (on either a large or small scale)  If increases in minimum wages will not eventuate without direct intervention, then there should be direct intervention.  This should be undertaken where the current framework of Fair Work Australia fails to deliver.  Allowing secondary boycotts 'in good faith' could also enable the industrially strong to assist the 'industrially weak' in achieving better outcomes for historically low-paid workers.

 

It's not good enough to put ambitious reforms off until a second term. Policies like Medicare took years to become entrenched ; to the point where any effective frontal assault against basic socialised medicine became impossible.  Here, also, once-introduced and accepted as part of the ‘socialised medicine landscape’, Medicare Dental would be very difficult to dismantle. The establishment of  a Labor Government provides the opportunity to introduce life-changing reforms. It is an opportunity that should not be wasted.

Wednesday, May 11, 2022

Wage Justice can be Delivered While Also Containing Inflation


above: Anthony Albanese wants Wages to at least Keep Pace with Inflation


Dr Tristan Ewins

Anthony Albanese stands besieged for suggesting a minimum wage increase which keeps pace with inflation.  Specifically, that is 5.1%   This would raise full time wages by just $39.40 a week – less than a dollar an hour.  Businesses are claiming such a move would drive them to the wall and fuel inflation.  But since the 1970s labour’s share of the economy has fallen by over 10 per cent, from 58.4 per cent to 47.1 per cent: or $16,800 a year for the average worker.  Especially ; why is it that the Conservatives believe it is the job of the country’s lowest paid to pay the price for inflation when many businesses are experiencing spiralling profits?  If wages cannot even keep pace with inflation, at what point can the structural inequities in the country’s labour market be addressed?

It is true that higher wages may have some impact on inflation.  There are areas where increased costs will at least in part be passed on to consumers. But this is a false economy based on the exploitation of the poorest workers.  It suggests a policy of drifting towards a US style labour market where there is a large class of working poor who can barely keep their heads above water.  Fear of falling into the working poor disciplines the so-called ‘middle class’.  And threat of homelessness and destitution disciplines the working poor themselves. This is the trajectory the Conservatives would take us down.

But arguably in the name of fairness there must be a ‘structural correction’ for low-paid workers at some time or another.  This may have a small, temporary impact on inflation ; but it is necessary if the most exploited are to survive in dignity and make ends meet.  The prosperity of high and middle income earners cannot be based upon the exploitation of a class of working poor.

Also there are other ways of dealing with inflation.  Raising taxation (for those who can afford it) could take the heat out of the economy without depending on the working poor to pay the price.  This is a better, fairer way of dealing with inflation.  But some inflation is inevitable on account of international factors ; and we should share the burden of dealing with this across society and economy.

At the end of the day an even larger correction is justified. That is: to restore labour’s share of the economy, and the grow the social wage and welfare state to support all Australians.  This is necessary as some problems are best faced collectively ; and also the labour market will never deliver full distributive justice to all workers. All workers deserve support ; including those who find it hard to organise ; or who face structural constraints to wage increases. Because of the way the Australian economy is now structured all this is no easy task.  The process could begin with claims for collective capital share in lieu of greatly increased wage levels.  This is a process that could be led by unions ; who could target areas that are not overly susceptible to capital flight.  Also low-paid workers could be assisted by a recission of secondary boycott bans where secondary boycotts are taken by well-organised workers in support of workers with little bargaining power ; and where such action can be shown to be being taken in good faith.

Albanese has promised action on wages.  But even committing to matching inflation does not compensate for falling wages over the course of the last decade and more.  Though Labor’s housing policy – which involves the government taking up to 40 per cent equity in families’ houses – will put home ownership within reach for many who may otherwise have felt the situation hopeless.   As interest rates increase the price of properties will probably fall – a ‘double edged sword’ that – while perhaps necessary – will leave many Australians looking poorer on paper.

One area where Albanese has been unequivocal has been his support for a 25 per cent rise in the wages of Aged Care workers.  This is one of many areas requiring a ‘structural correction’ ; both to deliver wage justice ; and also to improve care, and retain workers in the industry.  Given the taxing and skilled nature of the work there should be a minimum wage of at least $30/hour here. This is more than the existing claim.

In the final analysis the economy makes so much wealth ; and the question is one of distribution, as well as higher productivity ; and industry policy encouraging high wage industries. Increasing the size of the cake is good – but does not solve all problems. At some point we need to confront the question of who gets what share of the cake ; and this will require redistribution. Sometimes it’s possible to have ‘win-win’ – but not always.  We cannot become a US style economy where workers are disciplined by fear of destitution ; and where the living standards of a so-called ‘middle-class’ depend on the exploitation of the working poor.

Wednesday, March 30, 2022

Short term relief in Budget ; but No Long Term Plan

 



Dr Tristan Ewins

If Labor delivered a Budget like we’re seeing portrayed from the Coalition Government in Australia the media would proclaim they were ‘irresponsibly’ ‘spending like drunken sailors’.  But when the Conservatives are trying to revive their electoral fortunes the Melbourne Herald-Sun proclaimed “Hip Pocket Rocket” and “Millions Win”. In fact this is a Budget that effectively increases tax over the medium and long term, however. And much of the much-mooted  'generosity' is illusory. More on that later.

Fuel Excise will be cut with an anticipated 22c per litre drop in petrol prices.  Also interestingly the Government points to low unemployment ; which is largely because of stimulus created by Jobkeeper – albeit badly targeted stimulus. Does this mean they’ll admit they’re wrong on contractionary Budgets more broadly?  Probably not.  Wage subsidies, tax offsets and cash payments figure significantly (for instance a  once-off $250 payment for pensioners) ; but over the longer term this will not properly compensate stagnating wages ; and depressed pension and Jobseeker payments.  Indexation of pensions will continue, but this is merely ‘treading water’.   By default pensions increase as a proportion of average wages ; which means if inflation continues to grow it may continue to outstrip pension indexation.

Frydenberg believes low unemployment will drive wages.  This is possible because there is reduced supply relative to demand. But there are no guarantees: without strong labour organisation and leadership form Fair Work Australia stagnation could well continue.  And wage growth will probably not keep pace with inflation.  In any case the Coalition are luke-warm on wages ; and are just trying to weaken Labor’s narrative. There will also be a $10 billion investment in the Australian Signals Directorate over 10 years ; but there is little in the way of new initiatives in Aged Care, Education or child care for instance.  (except for some subsidies for initial study in aged care)  Previously announced improvements to Aged Care funding will continue ; but this is but a fraction of what was demanded by the Royal Commission.

The Conservatives have had their chance to respond to the Aged Care Royal Commission and are doing not nearly enough. We need to know that Labor will commit the necessary resources to implement quotas - which means more time on washing and dressing, more individual attention with feeding, and more time to interact and get to know residents; Also Labor needs to put a registered nurse in every home 24/7 ; improve wages and conditions for all workers (min $30/hour) ; and implement quality of life and happiness benchmarks that go beyond the basics to deliver happiness and quality of life as much as possible. All residents also need access to pleasant surrounds such as gardens ; and more to do than be sat in front of a television in a common room all day. Also prompt at home care for all who have the need and meet requirements with minimal waiting time. And phase out the user pays model by providing for high quality public, and subsidised not-for-profit and community based care. This will require several billions in new funding.

In the Budget there will be over $350 million in subsidies for apprentices and employers will be rewarded with $120 for every $100 spent training their workforce ; and other incentives for investment in technology.

Encouragingly Pensioners will gain on the medicine front ; with the number of scripts necessary before the ‘safety net’ kicks in reduced by twelve.  While a relatively small measure this is perhaps the most progressive announcement made by the government here.

Over $800 million will address “telecommunications blackspots”  ; while there will be a $480 public investment in NBN speed and reliability. This is necessary because the NBN was never done properly by the Conservatives in the first place.  $600 million will support growth in agriculture ; while $3.7 billion will fund faster regional rail.  Subsidies will also support regional manufacturing ; including the development of export markets.

Schemes will continue which enable 50,000 first home buyers to enter the market with a 5 per cent deposit.  But there is little for public, social or affordable housing – which could be crucial in any attempt to make housing more affordable by increasing affordable supply.  The government’s policies do not address the fact that increasing interest rates could provide a massive shock to personal and household budgets, sending mortgage repayments skyrocketing.  This could lead to another financial crisis and recession.

Importantly many of the cash payments benefiting low and middle income Australians will be a short term splurge ; designed to win an election. Improvements for low income earners and pensions will not be sustained over the long term.  Indeed while it will be increased for its final year, the Low and Middle Income Earner Tax Offset will be phased out in the following year and onwards; hitting low and middle income earners hard over the longer term. Long after the short term handouts fade into memory this could cost low income earners $700 a year.  Somehow most of the mainstream media didn't see fit to mention this.  So in fact this is a 'smoke and mirrors' Budget that tries to convince us of its generosity while hitting us hard into the future. It is no accident that low and middle income earners will be hit, while tax cuts for the wealthy will be pushed through. 

Overall this Budget provides a boost over the short term, but does little to address cost of living over the longer term ; and leaves wages ‘to the market’.  Structural improvements are necessary for Jobseeker and Pensions. And the tax system needs to be adjusted to benefit low and middle income earners relative to high income earners and the wealthy more generally.  Means tests could be eased, also, to make it more attractive for Disability Pensioners to enter the workforce ; and more could be done to help those people gain experience to ameliorate gaps in resumes.

Again, the Budget delivers some relief over the short term but does little long term about poverty, wages stagnation, and cost of living pressures.  Labor needs to do much better on Aged Care, Public and Social Housing, progressive tax system restructure, structural increases to pensions, and initiatives to get disabled Australians into fulfilling work –  with an easing of means tests for fairness. Medicare Dental could also feature ; and Labor could begin the process of winding back user pays in education by reducing student debts and significantly increasing debt repayment thresholds.  Victoria is also significantly short-changed on infrastructure ; and the government will have to find money from elsewhere to pay for transport infrastructure, especially roads.  Some problems never seem to go away ; such as state school class sizes and over-worked teachers.  But this seems to have ‘slipped off the radar’ in recent years.

Labor needs a long term plan ; with immediate reforms that are ‘locked in’ and hard to reverse.  This Budget will convince some ; but over the longer term so many questions remain unanswered.

Sunday, January 30, 2022

Albanese needs to ‘Step up to the Plate’ and not avoid debate on Aged Care, Health and Welfare Reform

 





Dr Tristan Ewins



Labor Opposition Leader Anthony Albanese has come under fire from the Conservative Coalition Government for suggesting on the ABC’s ‘Insiders’ program that extra funding may be made available for Aged Care, Health, and perhaps welfare reform. This in a context where billions of subsidies have been provided to businesses due to Covid, and yet many businesses who managed to remain profitable regardless of Covid have simply kept these subsidies provided for them in the form of pure profit.  While the Federal Government ruthlessly pursues welfare recipients over any debts incurred (and even some that have turned out to be unreal), corporations enjoy public money without accountability.

The simple fact is that public spending commitments in social services and infrastructure are not necessarily ‘irresponsible’ or ‘wasteful’.  Often Government needs to invest in the health and happiness of the people to ensure the best outcomes.  What needs to be understood is that social spending is a form of ‘collective consumption’ where we gain a better deal in areas like health by purchasing crucial services more efficiently and collectively as taxpayers, rather than being isolated and fleeced as private consumers.  Medicare and the Pharmaceutical Benefits Scheme are important examples of collective consumption.

Albanese has spoken of the “habitual buck passing” of the Morrison Government on Aged Care.  Failure to attract new workers into the field with fair wages and conditions, and respect for workers ; and failure to ensure necessary staffing levels including the presence of Registered Nurses – remain sore points even after the Conservatives’ response to the Aged Care Royal Commission.  The training, wages and conditions of Personal Care workers who help many elderly remain in the community are also in need of further funding ; and packages must be available to all with the need upon demand ; and without cruel waiting queues.

The reality also is that Aged Care reform needs to go beyond the bare essentials to address broader quality of life issues ; so that in the future Aged Australians with have access to social engagement ; and where those in residential care will enjoy privacy, access to information technology, access to gardens and pleasant surrounds.  They must not just be locked in their rooms or sat down in front of TVs in common rooms all day.  Our vulnerable elderly need social engagement.  Everything from discussing their lives to enjoying games, listening to music, or discussing the issues of the day.  Dementia training is also essential to ensure the best quality of life to those affected ; and those around them.  Quality of food also needs to be monitored closely ; and without meeting staff quota targets, Aged Care workers will remain rushed in the business of helping to dress and shower residents daily ; or may not be able to respond in a timely manner to situations such as where sheets are soiled.  The consequences of under-resourcing have been trauma and suffering for vulnerable aged Australians. 

Yes this will cost billions on top of those limited initiatives already announced.  But most of us will grow elderly and frail one day ; and even if ourselves we do not experience this, surely we will have family who are affected by a neglected Aged Care sector.  Rather than backing down, Albanese needs to ‘step up to the plate’ and confidently put the case for progressive collective consumption of Aged Care ; and a much better deal for both ‘consumers’ and for workers in the broader Health sector.

There will also be a significant backlog in waiting lists for supposedly ‘elective’ hospital procedures thanks to the pressure Covid has placed the health system under.  This was already a crisis ; but has been significantly magnified with Covid.  Medicare needs to be extended into dental, optical and prosthetics ; but the broader health system needs to be expanded to ensure timely care, breadth of coverage and quality of care.

Australian of the Year, tennis star Dylan Alcott has also highlighted the high unemployment levels (over 50 per cent) for disabled Australians.  The focus here was mainly on those with physical disability ; but exclusion from the labour market also applies to those with psycho-social disabilities.  Exclusion is a vicious circle which needs to be broken.  Sometimes it goes on for years. Often it is permanent.  Government needs to intervene directly to provide opportunity for all ; and employment needs to be made more viable by lessening means tests for Pensioners in the workforce.  Also there need to be viable career paths, and not merely ‘dead end jobs’.

Importantly, Labor needs to pitch to ‘average’ workers as well.  Labor needs to pitch to the majority to enjoy electoral success ; and provision for equity groups alone will not win government.  Delivering wage gains and improving the bargaining position of average workers in the labour market is important here.  As is a restructuring of the broader tax system: delivering distributive justice outcomes not only for the most vulnerable, but also the majority of workers.  Further ; improvement of the Aged Pension could act as a ‘bridge’ which enhances the case for reform of other pensions. Labor needs to build a ‘bloc’ based on solidarity and mutual recognition rather than allowing the Coalition to ‘Divide and Rule’ – which so often has been the case.

So come on Albo, ‘step up to the plate’.  A ‘small target’ can take us so far ; but as the campaign progresses voters will want a clearer sense of what Labor is going to do.  Labor will need to have answers.  And it must not ‘back itself into a corner’ where it cannot deliver significantly to its constituents.  Early signs suggest some hope.

Thursday, October 21, 2021

Rejecting the Cashless Welfare Card a Good Start for Labor ; but further cultural change necessary

 

                             above: Class Struggle has Always been Essential to Social Progress



Dr Tristan Ewins

 

It is now approaching a decade since Andrew ‘Twiggy’ Forrest was approached by then Prime Minister, Tony Abbott, to advise on the creation of a ‘cashless welfare card’.   While Forrest intended for all income to be ‘quarantined’ for use only in approved areas (like groceries), the Indue card which has emerged in trials set a floor of 80% of income to be with-held, and available for ‘approved purposes’. Aimed largely at indigenous peoples, and the welfare-dependent more broadly, the ‘Indue’ card follows after the failed ‘Basics card’ of 2007 - which attempted something similar as part of a government ‘Intervention’ into indigenous communities in the Northern Territory.  The newer ‘Indue’ cashless welfare card applies to the welfare-dependent more generally in the communities in which it is being trialled.  All those affected find themselves in the position of being restricted in what they can spend their money on, including on food and second hand goods. While a relatively small proportion are affected by gambling addiction or alcoholism, the ‘card’ is a source of humiliation and control over the welfare-dependent more generally.   Indue, which includes Conservative Coalition party luminaries as shareholders, stands to make a packet from the humiliation and micro-management of the every-day life of already-disadvantaged Australians.

Instead of humiliating marginalised Australians government ought instead be seeking to empower them, perhaps including through the mechanism of a Guaranteed Minimum Income (GMI).  Arguments against a GMI include the suggestion it may displace some existing pensions. (some of which are less threadbare than others)  But if a ‘no disadvantage’ test were applied this need not be a problem.  ‘Mutual obligation’ provisions have always been worrisome; as in practice they became a source of effective labour conscription.  This might also increase competition for jobs at the ‘lower end’ of the labour market ; and in the process reduce the bargaining power of those workers. 

A good alternative could be the establishment of a ‘Social Bill of Rights’ ; which would include rights to nutrition, adequate and dignified shelter, power, comprehensive health care, communications-related empowerment (eg: internet access), transport, education and social inclusion. A ‘Guaranteed Minimum Income’ could then be deployed alongside pensions and other programs intended to make this vision reality.

In the 18th and 19th Centuries the unemployed were driven into ‘Poor Houses’ where they were exploited, humiliated and robbed of their dignity.  There is a long history of ‘blaming the poor’ for their own disadvantage.  Centuries later some of the same assumptions remain in play beneath the surface.  Labor is arguing it will end the long Conservative experiment with the ‘cashless welfare card’.   The Coalition has so far not mustered the political courage (or political capital) to implement the program more broadly.  But as with ‘WorkChoices’ ; the old agendas continue to ‘fester’ behind the scenes.   The debate needs to be brought into the glare of public scrutiny and buried decisively.

Labor’s opposition to the Indue card is welcome.  But Labor needs a broader, stronger vision, including reform of welfare, minimum wages and labour market regulation, industrial rights, and embedded social human rights.  Its retreat on the tax debate has regrettably narrowed its options.   But a program for change could re-emerge through a determined reform of the social wage and welfare state ; which branched in various directions – including a Universal Aged Care Insurance Scheme, as well as improvement of pensions, with rescission of punitive mechanisms.  And a bold commitment to build a million new public housing units – as suggested by the Greens.  Labor really ought to be coming up with these kind of ideas on its own initiative.

There is a minimum standard of living which must apply to all citizens.  This idea of a ‘floor’ beneath which none are allowed to fall is reminiscent of the more progressive variations of the ‘Third Way’ which emerged in the 1990s.  But to mobilise as broad a base as possible, and provide distributive justice for all a more robust Social Democratic or Democratic Socialist agenda than Blairism is necessary.

It seems Social Democratic Parties have been on the defensive and on the back foot for decades. And indeed they have been.  For some the logic of retreat has been internalised.  We need to re-establish a notion of what comprises ‘progress’.  That means fairer distribution, industrial rights,  social rights, and the re-establishment of a robust mixed economy to help make this vision reality.  The Indue ‘cashless welfare card’ is the current ‘Conservative frontier’ ; where it attempts to reshape public ‘common sense’ on the further rescission of the welfare state, and the re-establishment of a ‘Poor House’ mentality ; which ‘gives the whip hand’ to employers through poverty, compulsion and labour conscription. 

Labor needs to go back to ‘first principles’ and work out the consequences of that.  Which is that being a ‘broad church’, Labor needs to be united behind ‘baseline’ social democratic and democratic socialist values and agendas.  Containing inequality and ending poverty ought be non-negotiable ; as should the proposal that this must be pursued through industrial rights, labour market regulation, a mixed economy, progressive taxation system, expanded social wages and welfare state provisions, and intervention into the capitalist system. (ultimately to end exploitation ; but also to ameliorate the impact of its crises upon workers and the vulnerable in the meantime)

The cashless welfare card needs to be defeated and exposed for the punitive mentality it embodies.  But we need a progressive movement which is willing to ‘go onto the front foot as well’.  A movement which has an idea what ‘progress’ entails, and which rejects a logic of endless retreat ; ameliorated only by the ascendance of ‘social liberal’ agendas as applied to gender, sexuality, and so on.  And in the context of the marginalisation of social conservatism, and its replacement by an ideology of neo-liberal cosmopolitanism. 

A ‘change of direction’ involves accepting class struggle as a progressive phenomenon ; an ‘engine of social progress’.  Only when that logic becomes entrenched does progress become undeniable. And while Hawke’s vision of “Reconciliation” appealed to many ; bosses soon became tired of ‘co-determination’ with unions once they had extracted crucial concessions.  And once organised labour lost its bargaining position. 

‘Reformists’ and Revolutionaries were once agreed on the progressive nature of class struggle.  Within Labor factions and amongst others we need, also, to combine behind such a shared notion. Bringing together Labor members behind the idea of a progressive class struggle is crucial ; an idea that we are all broadly in the same fight.  Reinforced by daily experience everywhere from Party branches to unions, and from student politics to the social movements.   There is a fight for the heart and soul of the ALP, and the heart and soul of Australia. There is no place for a punitive cashless welfare card in a progressive Australia.  May solidarity in the name of renewed class struggle relegate it to history.