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Saturday, October 5, 2019

Labor Must Ask Serious Questions on Policy and Values

Above:  Albanese corrrectly indentifies the need for policy review and good policy ; But 'root and branch' rejection of Labor's 2019 Platform would be a mistake.  New policies and 'new angles' are necessary.  But let's not jettison our values and abandon our interests on the way.  Labor's problems were largely 'tactical' ; and this also needs recognition.

Dr Tristan Ewins

Labor has been saying relatively little on policy since its defeat at the hands of the Morrison Government.   Many are saying Labor’s ‘move to the Left’ was the problem.  In that process other problems are being neglected.  The Coalition tax scare campaign (including on a non-existent 'death tax'); Shorten’s wooden performance in the final days ;  failure to build a strong enough ‘central narrative’ ; confusion on Dividend Imputation franking credits – and the failure to means test any measures there instead of applying the same rules to everyone.  Also Clive Palmer's $60 million intervention - dwarfing the monetary resources of both parties - changed everything and channeled preferences to the Conservatives.  Shorten also failed to sell the progressive tax reform message ; and avoided the issue when given the opportunity to ‘take it up to Morrison’ in a Leader’s Debate.  (here I'm thinking of Shorten's refusal to engage on Morrison's example of a very-high-wage workers' tax rising by 2%(!) under Labor)  

Expanding social goods and services necessitates progressive tax ; asking more of high income earners ; and that definitely includes the top 10 per cent.  Maybe even the top 20 per cent. Those in lower brackets need to contribute too based on ability to pay, but would receive much more in return.  Those in the lowest brackets may even receive indexed tax cuts.  (Income Tax needs to be radically restructured overall ; and then the lower brackets indexed – to prevent the erosive effect of bracket creep)  Tax indexation can prevent 'a flat tax by  stealth' via such selective exploitation of bracket creep.

In the big picture, though, Shorten led a united team and developed some very  good policy during his years in the leadership.   His modestly reformist policies have widely been portrayed as a ‘lurch to the Left’ ; and that illustrates well the relative right-wards shift in Australian politics where anything in the way of meaningful reform faces that kind of accusation.

But the Coalition’s massively irresponsible policy of tax cuts ($160 billion over the first 10 years, and much more proportionately over the longer term as ‘phase three’ kicks in) for the well-off put the onus on Labor to mount a response.  

We know we have an ageing population.  For the Left at least, we know tougher means tests, a higher age of retirement, failure of benefits to keep up with a rising cost of living and respond to the need to extend pensions more broadly – should be unacceptable.  Undermining the tax base is the road to a US-Style and strongly class-divided economy and welfare state.   An ageing population will also mean more stress on the health system ; and the correct response is to support citizens on need rather than adhering to some arbitrary ‘tax ceiling’ which can only respond with harmful austerity.  Medicare Dental remains an essential policy for Labor to embrace and campaign on vigorously.

To his credit, Albanese has come out against attacks and stigma against the unemployed.  But we need more.  Raise Newstart by at least $75 a week.  Apply active industry policies aimed at creating job opportunities for ‘at risk’ and vulnerable groups.  Not only the young unemployed, but especially the older unemployed ; and the disabled – including the mentally ill.   Highly educated older job-seekers are being forced to drop their qualifications from their resumes to be ‘more attractive’ for cleaning jobs and the like.  Meanwhile, while many look down on the cleaning profession it does involve skills, and it is hard work.  There is cause to reform the Award in these and other fields – for example Aged Care and Child Care. But where the market will not bear this we need government subsidies. Importantly, many of these areas are highly feminised.

Denmark provides an example in a sense.  That is with their active industry policies which seek development of ‘sunrise industries’ that make use of the skill sets from ‘sunset industries’, mixed with retraining. The policies are expensive: but the gains from labour market participation more than make up for that. 

In that process we need to review the  NAIRU – or non-accelerating inflation rate of unemployment – which supports a ‘buffer of unemployment’ (commonly in the vicinity of 5 per cent) to contain the bargaining power of workers and avoid wage inflation.  Hence there are always many more people looking for work than there are jobs – and yet still the unemployed face stigma. Instead we need to look to fiscal policy to contain inflation ; and co-operation with trade unions (eg: accepting higher taxes on high wage workers) in return for expansion of social goods and services and defence of industrial rights.  This would be applied after the Swedish model rather than the Accord – which at the end of the day failed to deliver to workers sufficiently in return for wage restraint.  Full employment makes a massive difference to the Budget and the broader economy if it can be sustained.

In short, Labor needs to take action to raise the status of some of our most exploited professions – while reforming the tax base and making social wage, social insurance, collective consumption, and welfare state expansion possible.   

Let’s explain these one by one to get some sense of what is meant.

‘Social Wage’ refers to the recognition that not everyone receives wage justice. And sometimes it is more effective to receive the proceeds of wages collectively to maximise the collective (and individual) benefit.  Think public health and education.  Corporate Taxation also factors in here as the corporates benefit from a healthy and skilled workforce.

‘Social Insurance’ refers to public-funded insurance against contingencies like unemployment, ill-health or disability via the tax system – which covers everyone.  After all – it could happen to any one of us – or our loved ones.

‘Collective consumption’ refers to when ‘the people’ get a better deal by consuming collectively via tax rather than as isolated consumers.  Leaving individuals with more money to spend at their discretion in other areas at the end of the day.  

It is appreciated that people need a reasonable degree of discretion in terms of determining personal needs structures.  But ‘collective consumption’ delivers massively in the area of pharmaceuticals consumption (think the Pharmaceutical Benefits Scheme or ‘PBS’) ; and could deliver in other areas as well – eg: infrastructure and goods like water and energy – which are becoming more unaffordable following effective privatisation.  Also think public infrastructure like ports, roads, public transport. communications: which should flow from the public purse where the state’s superior rate of borrowing and not-for-profit stance can deliver a better deal.  (water, ports, communications, transport infrastructure - should be re-socialised - reducing overall cost-structures; Though in some areas (eg: energy) some kind of 'market' should still exist ; But in the context of a public monopoly provider ; much more affordable, but still an incentive to regulate usage)

The “Welfare State’” is often taken in a catch-all sense which covers all of this, but for now think of the tax-transfer system and the need to support vulnerable Australians.  Newstart is the area of the most dire need ; but a 15% increase in other pensions can also be justified ; as well as support for the National Disability Insurance Scheme and the implementation of a National Aged Care Insurance Scheme (in response to the Royal Commission) which provides high quality services both for at-home and residential care on demand, and without onerous user-pays policies which send ‘consumers’ broke.  That also includes high quality food, quotas , a registered nurse on-site always , training in the handling of dementia , at-home packages on demand , rehabilitation and exercise on-demand , regular GP visits , private rooms , and meaningful (often facilitated) every-day interaction and outings (where possible) instead of just seating people down in-front of TVs all day.  For those ‘at home’ action to combat loneliness is crucial.

More public housing – perhaps interspersed with private housing to avoid stigma – is necessary too in order to tackle homelessness and housing stress.  But large scale public housing projects should also be considered – also providing quality amenities: laundries, pools, common rooms, internet connectivity – which people can respect and appreciate.  Austria manages a high level of public housing well – with very positive results.  Indeed, over 60% of Vienna’s population live in public or social housing.  It is the legacy of the interwar revolutionary Social Democrats (at the time officially of  a Marxist – but not Bolshevist -  disposition)– who prevailed in Vienna in the 1917-1934 period ; and who took government with a more modest agenda in the post-war period.

Eugene Quinn argues the following ; outlining the difference in culture re: public housing in Vienna which could be promoted in Australia as well:

“People here are used to the communal spaces of the social housing estates and are very comfortable living next to someone from a different background,”  Quinn says. “And because people are not crushed by their rents like in other major cities, they have a bit more time to be creative, to study, to get involved in community work.”

Apart from these areas, Labor also needs to take a strong line against the Coalition's ‘Ensuring Integrity’ union-busting laws.  Some in the Left dislike John Setka.  But more is at stake here than one man.  We are talking about the strategic position of the entire movement.  Which the Coalition well knows.  And Labor must acknowledge that as well.

In short, inevitably there must be a policy review.  But let’s be careful about dumping good policy.  Sure, let’s hone our message and our central focus.  Though we need a tactical campaigning review also: perhaps more so than a ‘root and branch’ policy review overall. If we cannot at least reverse Morrison’s overall tax cuts in a progressive way – focusing on tax cuts for the well-off – then we concede defeat.  That would mean conceding an Australia which retreated from anything recognisably social-democratic , and headed towards the divisions and insecurity we see in the US for example.

Importantly we must embrace the message of progressive tax and its implications rather than running away from that debate.  Trying to be ‘everything to everyone’ and not increase the tax burden on virtually anyone – means we have no way of funding reform at the end of the day.  But an openly progressive agenda would give the vast majority an incentive to vote Labor.

It is nonetheless appreciated that ‘middle income’ is not the same as ‘middle ground’, and some disillusioned voters are embracing a ‘centrism’ which is largely right-wing in practice.  Labor’s response must be tactical: appealing not only to interests but also to values.  A liberal response on social values, and stronger action on climate change can also detract from any ‘small ‘l’ constituency’ for the Liberals ; and pressure the Liberals to reform their own outlook ; shifting ‘the relative political centre’.  Labor must contest values in the economy as well as the 'culture wars' ; and its relative neglect here has marked a defeat for Social Democracy and Democratic Socialism in this country.

One thing is certain. Nothing is gained from a ‘culture of policy defeat’.  Labor must find a way to effectively campaign for government without compromising its values and reason-for-being.  

Wednesday, August 28, 2019

Australia’s Liberal Party no longer ‘liberal’

above: While Menzies was far from without fault, on many issues today's Liberal Party would be unrecognizable for him. 

Dr Tristan Ewins

Much is said about the clash between the liberal and Conservative wings of the Liberal Party of Australia.   Usually leading figures will speak of a ‘broad church’ which includes a diverse membership.  But the truth is that the Liberals continue to drift ever deeper into the hard Right.  Liberals will stand up for religious liberties (which there may be some kind of argument for) ;  but John Stuart Mill would turn in his grave if he was aware of Liberal policies on trade unions, charities, and attempts to shut down grassroots mass organisations such as GetUp!

The Encyclopedia Britannica identifies various rights as central to Classical Liberalism.  Freedom of association, assembly and speech amongst them.  Also: “freedom from fear of reprisal”, and of arbitrary arrest and punishment.   It also identifies free industrial organisation of workers as a necessary counter-balance in the marketplace.

Interestingly, iconic British liberal John Stuart Mill was even in some ways sympathetic with the socialist social experiments of Robert Owen in the 19th Century.  (see: ‘On Socialism’, J.S.Mill, Prometheus Books, New York, 1976)

And while free markets are crucial to classical liberalism, various liberals are divided on the balance between public and private.  All liberals would oppose a ‘command economy’, and would demand a central space for ‘personal determination of needs structures via markets’. For some liberals, however, Hayek and Rand are seen as occupying ‘the extreme end of the spectrum’ ; but those theorists’ ideas are exactly those promoted by the Institute of Public Affairs - which has a powerful role influencing Liberal Party policy.  Before the 1970s, Hayek and Rand were ‘on the fringes’ in most Liberal and Conservative parties. Fanatical commitment to the progressive and open-ended dismantling the welfare state, social wage, social insurance and public sector would have once have been ‘out of place’ in ‘the Party of Menzies’.   Now those ideas are in ‘the mainstream’.  And for Conservatives, adherence to economic neo-liberalism has eclipsed ‘compassionate conservative’ tendencies.

By contrast with the original liberals, today’s Liberal Party of Australia is committed to the total dismantling of the power of organised labour.  Its ‘Ensuring integrity’ Bill has several aims.   Firstly, the bill (if passed) will take non-protected industrial action as being ‘criminal in nature’ ; and union leaders could thus be charged and imprisoned ; and unions themselves deregistered and ‘dismantled’.   It will enable government to “sack” union officials convicted of criminal offenses: which includes ‘industrial’ offenses such as unprotected industrial action, and entering workplaces to organise or inspect working conditions without notice.  Also: even ‘protected’ rights to industrial action will be able to be withdrawn if an ‘interested party’ argues it affects their interests.  The legislation will establish in many ways arbitrary punitive powers for government against workers and union officials.  While freedom to withdraw labour is a liberal right so too is freedom of association.

The Liberal Party is also now endeavouring to have mass-based progressive lobby group ‘GetUp!’ considered a branch of the ALP and the Greens ; and hence to restrict its rights to campaign in the lead up to elections, and on election day.  With a membership base of over a million Australians ‘GetUp!’ is obviously much broader than the ALP or Greens, and has organisational independence.  But these days the Liberal Party is simply interested in shutting down all opposition in a display of crude power politics.  This is the opposite of liberalism ; even if defined narrowly as ‘classical liberalism’.  True, the Liberals abrogated liberalism when they attempted to ban the Communist Party under Menzies as well. ('Doc' Evatt's defense of the liberal rights of Communists was an important victory for Labor at the time)  But the Communists never had over a million members: mums, dads, students, retirees. People who want a political voice: but many of whom are not ready to join a Party.

 Another example of Liberals abrogating liberal principles regards their treatment of charities and other organisations who must fear their tax-deductibility status being withdrawn if they criticise the government.   ‘Political’ speech is seen as compromising the work of charities by the Liberal-National Coalition ; but in fact this is just another rejection of real free speech: sacrificed on the altar of brute power politics.  Despite a decision by the High Court upholding the right of civic organisations like charities to engage in political advocacy, the Liberals and Nationals are still looking for ways to shut-down resistance.  Arguments have been made to ‘withdraw support’ for organisations ‘out of step’ with majority opinion. (whatever that is) 

The other side of this involves calls on the Left to tax churches ; which may include lay organisations at the grassroots level.  While the Liberal Party has largely abandoned liberalism in practice, the Left could do worse than to integrate liberal and socialist principles.

Finally we must consider the treatment of refugees and the unemployed by callous governments of the Australian Right-Wing. Open-ended incarceration with the effect of breaking the spirit and the will to live of those affected has no place in any account of liberal human rights. 

Meanwhile, ‘Work for the Dole’ comprises a form of labour conscription, and we must consider the real power relationships underlying these arrangements – as opposed to the fantasies of Hayek and Rand who only see ‘individuals freely entering into voluntary economic relationships’.  Sophisticated liberals deal with ‘the world as it is’ and not merely as it is supposed to be in the theories of the economic hard right.  In reality, both major parties are supportive of a policy of a “non-accelerating inflation rate of unemployment”. (ie:  unemployment of approximately 5% with the point of containing inflation and wage pressures)  The point of this is exactly to restrict workers’ bargaining power at a time when the unemployed are vilified, wages are stagnant, and there is restricted consumer demand in the broader economy.  (in turn impacting on growth)

 In times past liberals would be capable of recognising the real-world imbalances of power in economic relationships: and hence support rights for trade unions, and a decent welfare safety net without punitive, unfair and unrealistic mutual obligation provisions.  

While some Conservative figures like Barnaby Joyce are finally recognising the threadbare and punitive nature of ‘Newstart’ unemployment insurance in Australia, Prime Minister, Scott Morrison, is determined to keep existing policies as a wedge against Labor.  While 'Robodebt' policies drive innocent people to desperation and suicide, the hope of decent bipartisanship has been cruelly crushed.  An ugly sentiment against the welfare-dependent and job seekers has been whipped up in the monopoly mass media in Australia for decades.  But the Liberals have all-too-readily seized upon the consequent public sentiment ; and have exploited it.

While progressives should always prefer a Labor Government to a Liberal Government in Australia, it is to be hoped that genuine liberals like John Hewson - who have not been ideologically captured by the Institute of Public Affairs – improve their fortunes in internal debates.  While this author is opposed to Blairite ‘Third Ways’ it would nonetheless be a relief to have bipartisanship on issues of basic human liberty and decency.   While the Liberals increasingly embrace Hayek and Rand on the economy, on social liberty they are effectively against libertarianism. (eg: on the rights of organised labour)

In Australia the nominal party of liberalism is anything but liberal. Even in the narrow sense of classical liberalism they fail to uphold core principles.  Labor could reconceive of itself as a liberal Party ; and occupy that space abandoned by the Liberal Party.  But for social democrats and democratic socialists that is not the answer if it means abrogating our own historic principles, and the rights and interests we defend.  But a more libertarian position on liberal rights on the Australian Left would apply significant pressure to the parties of the Australian Right.  To a some degree this is already happening.  It is a trend that needs to be developed further. 

Wednesday, August 7, 2019

Mostly Unpublished Progressive Letters ; May to August 2019 - PLS Have a Read and Discuss

Herald-Sun Letters (mostly unpublished)  May-July 2019

Be Wary of Conservative Double Standards on Free Speech

“Kevin Donnelly (14/5) again makes a case for his version of freedom of speech.  Of course there are problems with free speech as an ‘absolute’.  We cannot allow Holocaust Denial to lead to a culture of forgetting ; or worse – to prepare the ground for future atrocities. But every time you dilute free speech as an absolute you also contribute to a growing wedge with increasing ramifications.  Even as a Christian I recognise that much scripture is at odds with modern thinking , and its expression can be hurtful to various groups.  At the same time faith is central to millions of peoples’ lives ; and criminalisation will lead to repression and polarisation. (Labor is not suggesting any such thing) But Donnelly needs to be more consistent.  ‘Free speech’ means religious doctrines are open to criticism. ‘Free speech’ also means charities and NGOs are not blackmailed to hold their tongues in criticism of government. (as the Howard Government attempted)  It means an organisation with hundreds of thousands of members like GetUp! should not find itself ‘in the crosshairs of government’ – with the intention of silencing it at elections.  By all means campaign for freedom of speech – but be consistent.”

Social Insurance and Infrastructure

“A.Jensen (Your Say 30/5) attacks Labor for making social (public) investments ; and condemns NBN and NDIS as ‘unfunded’.  To begin with, Labor identified a series of tax loopholes (mainly for the wealthy) which could have been closed ; saving tens of billions. But the Liberals ran a scare campaign, including the threat of some totally non-existent ‘death tax.’ Public investments often make sense ; and without them we run the risk of becoming a US-style society with enormous classes of working poor and destitute. Welfare and social insurance provide a safety net without which the unemployed, the mentally ill, the aged and so on  - would find themselves homeless and desperate.  Indeed, we need more money for public housing. NDIS has the potential to greatly improve the lives of some of our most vulnerable Australians.  The NBN, also, was to be the information infrastructure on which the industries of the future arose. But the Coalition went for the cheaper option. Now we have cost blow-outs and inferior technology.   Public investment in infrastructure and services,  and collective consumption (eg: the Pharmaceutical Benefits Scheme) is often in all our interests ; providing a ‘better deal’ ; leaving us all better off at the end of the day. “

Women’s Progress Welcome ; But Men are not ‘Essentially Bad’

“There has been welcome progress towards gender equality in recent years ; with emphasis on women’s sport ; equal representation in parliament ; debate about women’s disadvantage in the labour market, and attempts by the ALP to subsidise child care wages to rectify this in part.  But as Alan Barron (Your Say 3/6) appears to recognise, there has been another side to this story whereby ‘maleness’ appears to be ascribed  a ‘bad essence’.  Messages to the effect ‘girls can do anything’ are positive ; but boys must not feel ‘left out’ ; as if less is expected of them.  And as if ‘maleness’ is ‘toxic’. Women must be encouraged to assert themselves: to assert that “no means no” ; and men must be educated to respect this.  And men and women must take special care to be certain of consent where a couple are under the influence of alcohol. But should we eliminate all spontaneity?  Also the cause of gender equality has advanced in leaps and bounds.  But what about class-based inequality?   The struggle for gender equality needs to be but the first step in a much broader fight for equality.”

The Reality behind ‘Class Warfare’ Rhetoric

“The Herald-Sun (YS 4/6) talks about an end to “retrograde” “class warfare” from the ALP. But why is it not ‘class warfare’ when the Conservatives cut Health, Education, Welfare, public infrastructure and Social Insurance to pay for tax credits and tax cuts for the wealthy?  And gradually there is a vicious cycle of bracket creep and tax cuts for the well-off which is leading in the direction of ‘flat tax’.  Under which low and middle income earners would suffer. The fact is that under the Conservatives there is a constant state of class war ; which is gradually destroying our egalitarian traditions and leading us along the path of the US model: underclass, and great swathes of utterly destitute.  Mixed economies with strong welfare states can be strong economies as the Nordics (Sweden, Finland, Norway, Denmark) have shown.  The Herald-Sun may call it ‘class warfare’ ; but if the ALP gives up on distributive justice for workers and the disadvantaged it is giving up its core reason for being. What we need is a responsible media that stops throwing around loaded language to convince people to vote against their interests out of fear , and provides a balanced analysis instead.”

Labor and Workers must reject ‘Aspirational’ Ideology

“Lou Coppola (Your Say 10/6) condemns a ‘non-Aspirational’ Left which “denigrates” Australia. All countries have events in their histories they may now be less than proud of. But a strong democracy is capable of recognising both the good and the bad ; putting things right ; and then moving forward – our heads a bit higher.  For Australia’s part seminal moments include the granting of the suffrage for men and women ; granting indigenous people the vote, and then the Keating Government observing Land Rights ; and the establishment of Medicare as a more fair and efficient alternative to a US style private health system. This does not mean there’s not room to improve with a Treaty and further extension of universal health care into areas like dental and prosthetics. Meanwhile:  ‘aspirational’ Ideology around personal enrichment is a ploy for working class Australians to turn against their own interests for the sake of a pipe dream.  Most working class Australians see through it ; but even if the Conservatives can convince a minority it can be electorally influential.  Labor needs to confront this Ideology and maintain that tax cuts for the rich and austerity are not in the interests of workers.”

What’s at stake with the  CFMMEU and ‘Ensuring Integrity’

“(14/6)  “The John Setka affair is being exploited as a pretext to push through hard-right-wing anti union laws that are undemocratic and overrun citizens’ liberal rights.  The proposed laws would not only see the prosecution of leaders ; but the dissolution of unions themselves, leaving workers defenceless.   So much for freedom of association!   (and what happens to workers' collectively-held assets via their unions?) Without collective organisation in unions, workers have no defence of their rights and interests but government.  And government definitely cannot always be relied upon.  Without unions and without a right to withdraw labour workers are reduced to a condition somewhat similar to slavery.  Whether in defence of wages and working conditions ; or the promotion of safety ; or political industrial action to protest against unjust laws : industrial liberties must be preserved if a society is to honestly call itself liberal and democratic.  The areas which are the responsibility of the CFMMEU are also highly sensitive to the power of the broader labour movement to defend workers interests’ ; and if it ever comes to it – to defend democracy itself.  The CFMMEU’s strength also provides the opportunity to assist industrially weaker unions.  If necessary the broad labour movement must be willing to take action to render the ‘Ensuring Integrity ‘ legislation ‘the dead letter of the law’.  The case of Clarrie O’Shea in 1969 is instructive here.

Theophanous should rethink Call for Rightward Shift

“Theo Theophanous (17/6) urges Labor to ‘move to the Centre’. But the ‘Centre’ is relative, and with the Conservatives dictating the terms, it usually means shifting Right. He advocates passing the Coalition’s tax legislation in full ; avoiding ‘tax and spend’ policies.  With a Recession probably looming, that would mean redistribution to the wealthy, and massive austerity down the track ; making aged care reform impossible. Without social wage and social insurance expansion ; without progressive tax ; Labor is no longer a Social Democratic Party. Labor’s problems were confusion re: policy complexity; and scare campaigns (eg: the ‘Death Tax’) which cut through ; supported by a $60 million campaign by Clive Palmer which redirected preferences. That, and high unemployment in Queensland, with the misassumption Adani would create many jobs. Labor must be ‘progressively gradualist’, arguing for moderate increased progressive taxes in the vicinity of 1% to 1.5% of GDP.  (in addition to rescinding regressive Liberal Tax Cuts) It must be clear these do no hurt lower to middle income earners ; and that voters get ‘value for money’ in health, education, infrastructure, social insurance. If we accept the Coalition’s terms of reference in tax we let the Conservatives impose a ‘policy straight-jacket’ preventing social wage and social insurance expansion indefinitely.”

Need to Reforge Working Class as a “Class for Itself”

“Jeff Kennett argues that with widespread deindustrialisation and the existence of some very high wage jobs that ‘the working class no longer exists’. The working class has always included wage labourers exploited by business ; but has been widely reinterpreted to include public sector workers such as nurses and teachers.  The most important aspect of being ‘working class’ is not whether one is ‘blue collar’ or ‘white collar’, but that workers must sell their labour in order to survive.  What is true is that consciousness of class is falling ; partly due to a fragmentation of class identity with deindustrialisation.  But the reality is that ‘as a class in itself’ the working class still exists. And the challenge for the labour movement is to restore a sense of shared identity and interest amidst diversity. So the working class arises as 'a class for itself' in the broad sense. As for the prosperity Kennett alludes to ; the median wage is about approximately $53,000.  Which means half of all workers earn $53,000/year or less.

Left must not Shrink Back from the True Reality of ‘Class Warfare’

“There’s an old saying on the Left:  “they only call it class warfare when we fight back”. To its discredit Labor during the election said little about the massive austerity that would necessarily follow those tax cuts. (the Coalition said nothing about this)  Labor proposed a traditional centre-left platform: closing tax loopholes to deliver a modest windfall which would have enabled cancer and dental care, subsidised child care, money for TAFE and more. This is labelled ‘class warfare’.  But when the Coalition restructures the tax system so workers on lower and middle incomes pay proportionately much more of the burden (moving towards a ‘flat tax’) this is lauded as ‘reform’. And also when it abolishes Penalty Rates.  Labor needs the focus and resolve to emphasise the coming austerity (on hospitals, schools, aged care, infrastructure) all through this term of government.  And so (in government) withdraw ‘phase 3’ which delivers $95 billion to the wealthy over only the first five years.  Politics is a continual ‘tug of war’ between labour, capital and citizens.   If we refuse to fight back for fear of the ‘class warfare’ label we have lost before we even begin.  That’s the point of it.”

Unemployed must be Treated with Decency

“A recent Herald-Sun article was Opinion dressed up as reporting. (A.Galloway, Insult to Taxpayers, Payments to Bludgers Withheld ; 31/7)   The object of the article was to inspire ‘outrage’ that job-seekers had missed appointments for possible jobs)  But as the article itself concedes, mutual obligation is very severe when it comes to Newstart, and the people in question had their payments suspended.   Also, Newstart payments are only approximately $40 a day ; imposing harsh conditions of poverty ; and are hardly a ‘lifestyle choice’.  Those on Newstart are hard pressed to feed themselves and put a roof over their head, let alone pay for smart clothes, a computer and so on – necessary in the modern world to search for work.  For many: disabled, older unemployed, regional unemployed – the search for work is almost hopeless. And yet we persist with promoting this loathing for the unemployed.  The real point of this regime is to create a ‘whip of hunger and utter destitution’ so jobseekers are forced to take any job no matter the pay and conditions.  This ‘reserve army of labour’ provides employers with ‘the whip hand’ and helps drive down wages and conditions for hundreds of thousands of other jobseekers.”

‘The Age’ Letters May to July 2019  (Mostly unpublished)

Democracy and the ‘Fair Go’ at Stake as Labor considers its Options

“(26/5) If Labor abandons distributive justice it more or less abandons its reason for being.  Labor needs to commission research from a multiplicity of sources to minimise the chances for error. Then it needs to actively campaign in order to restore support for a traditional social democratic redistributive agenda; which restores progressivity to the tax system with a focus on corporations and the top 10%.  And also full indexation of the bottom few tax brackets. Issues like superannuation tax concessions remain crucial for the Budget and distributive justice ; costing tens of billions annually.  Labor also needs to explain how the mix of bracket creep and regressively-structured tax cuts make the income tax system more and more unfair.  Labor needs a deep and broad policy agenda.  But Morisson’s victory shows how a narrow and negative message can ‘cut through’.  As well as the shallow but effective construction of the ‘ScoMo’ ‘everyman’ persona.  But is democracy viable any longer when the ‘Power Resources’ of the Right are overwhelming ; where a billionaire can buy an election ; where the Murdoch monopoly mass print media has so little effective competition ; and the Government is canvassing legislation to ban GetUp! From campaigning?”

Why the Anti-Union Stance at ‘The Drum’?

“The other night watching ‘The Drum’ on the ABC I was appalled to see a virtual consensus that anti-union laws enabling the deregistration of unions who take unprotected industrial action could be justified. The line of argument seemed to be that since corporations should be accountable if breaking the law, so too should unions.  But what this all really begs is the question of whether or not workers should have a right to withdraw their labour – full stop. This issue is now much bigger than John Setka and whatever indiscretions he has made.  The proposed laws could be a weapon with which to break the labour movement in this country.  As Sally McManus argued some time ago now – laws are not necessarily right.  Sometimes civil disobedience is justified – including industrial action.  If unions cannot take industrial action workers’ options are very limited to defend their interests. We cannot let John Setka be used as a cover for union-busting legislation which will weaken workers conditions, rights, strength and liberties in this country.”

‘The Age’ Shifts Right on Tax Debate

“The Age (22/6) argues that middle and high income earners will pay some of the highest income taxes in the world without the Conservatives’ $160 billion tax cut plan.  But ‘The Age’ has been unclear what it means by ‘middle income’ in the past.  In fact the Median (ie: middle) income is approximately $53,000/year.   $120,000/year is actually a very high income compared with most.  Also the gap between Australian and OECD average tax rates is almost 7 percentage points.  (or approaching $119 billion/year)  The Coalition’s tax cuts would mean massive austerity (worse in a recession) ; and maybe some of the gap would be made up by raising the GST (as in many European countries with their VATs) and a negative distributive outcome for genuine low and middle income earners.  Raising the top threshold of the 32.5% tax bracket from $120,000 to $200,000 would very significantly ‘flatten’ the overall system.  Some other countries may also have inheritance taxes, wealth taxes, strong land taxes ; but Australia has always depended highly on income tax.   The trend is towards less equality. But we don’t HAVE to follow the trend.  And there was a time I expected better from ‘The Age’.”

Welcome Consideration on Civics Education in Victoria: But Stronger Action Necessary

“It was good to read that the Victorian State Government is set to emphasise Civics education (17/7), partly in response to the voices of students themselves.  This must include processes, parties and institutions: but it must be about more than this as well.  Education for active and critical citizenship must explore interests, values and pathways to civic activism.  That includes “ideological literacy”: an appreciation of the political spectrum from far left to centre, and to the far right. As well as libertarian and authoritarian influences.  Importantly: there need to be nuanced understandings. Political categories like ‘social democracy’, ‘liberalism’, ‘democratic socialism’, ‘conservatism’ have historically meant different things to different people.  Opportunities for activism include parties, representative democracy, and social movements. The aim is not to indoctrinate: but rather this calls upon the professionalism of teachers to impart knowledge, wisdom and understanding in an inclusive way. Students should go out into the world ready to participate as active and informed citizens ; always ready to widen their horizons and make informed political decisions and interventions.  This is about empowerment ; and that empowerment is good for democracy.”

Tuesday, July 9, 2019

Can Labor accommodate an inclusive and open internal debate on Tax and the Social Wage?

above: The Ageing Population will have severe Budgetary Implications and Labor need to be planning now ; including for the provision of first class Aged Care for all ; now is not the time to capitulate on 'small government'.  Labor must 'go on the front foot' as the Aged Care and Mental Health Royal Commissions pass down their findings

Dr Tristan Ewins

I’ve been copping some criticism for my decision to publicly disagree with the Parliamentary Labor Party’s decision to waive through the Conservative Government’s tax cuts package – which includes some benefits for middle income earners, but nothing for the working poor, and a massive windfall for the rich.  ‘Phase 3’ – which focuses mainly on tax breaks for the rich – will cost $95 billion over only its first five years.

Many reasons have been given for the decision, including Labor’s desire not to be seen to be ‘getting in the way’ of a tax cut for middle income and higher income workers.  The rationale is that we pick our fights at a time and context of our own choosing.   And don’t give the Coalition a bludgeon to beat us with in the meantime.  And some are arguing we could move to rescind the Phase 3 cuts closer to the next election.

This is problematic for a number of reasons. Generally, it’s easier to legislate tax cuts than to repeal them.  Various ‘pragmatists’ in the Party will point to the need to court ‘aspirationals’ (an Ideological construction meant to promote capitulation on distributive justice) and some will ‘get cold feet’ on any rescission as the election approaches.   Even some figures on the Left are arguing in favour of the tax cuts, not just as a tactical imperative, but on the basis they do not see the social wage as  a priority.  Though I’m sure there are many more who understand the place of the social wage in Labor’s mission and identity.  Some are opposing ‘Laborism’ to ‘Social Democracy’ ; but when pressed I doubt these would implement reforms on pattern bargaining, labour market regulation, secondary boycott, and so on. 

Also ; Labor’s strategy is demoralising and disorienting for many members and supporters.  Labor 'didn't have the numbers' but 'taking a stand' would have been good for morale ; and would have left less ambiguity where we stand. Though that will be ameliorated should Labor commit to rescinding Phase 3 at a  later date “if it proves to be fiscally irresponsible” and “a barrier to provision of front line services”.  Which we know will be the case. 

So can the Party tolerate debate on this issue ; and if so should it be ‘behind closed doors’, or should some of it be public? 

Firstly, if most of the Left (and possibly significant parts of the Right) want to see Phase 3 withdrawn at the next election we need a discussion within the Party as to why this is so urgent. There must be grassroots pressure so even ‘pragmatic’ MPs understand it’s what the Party expects and demands.  And activists and other members must be educated as to the consequences of the policy if it is not withdrawn.  Debate within policy committees and so on is not good enough as it does not engage the majority of members.   Public debate also gives cause for supporters to ‘take heart’ that there are significant forces in the Party fighting to rescind the appalling Phase 3 tax cuts later on. We need to be arguing that we will review the policy next election not only because it is fiscally irresponsible ; but also the distributional impacts, and impact on services.  

And if Party figures think they cannot risk disunity ‘at the top’ ; surely at the least they can see the good of ongoing and permanent debate ‘at the grassroots’. And when the Coalition uses the old ‘class warfare’ label we need to respond that it is they who are waging class warfare ; imposing a greater proportional tax burden on  lower and middle income Australians, cutting services,  removing penalty rates, seeking to smash unions, degrade conditions and so on.

There’s also a problem that if the Coalition gets away with this tactic once, they will try it again.  That is: combining policy which is of some interest to workers in the short term with policies which will be very harmful to most over the long term with damage to the social wage, social insurance and collective consumption, welfare state, and funds for public infrastructure.  And trying to pass them 'as a package deal'.

The  Aged Care and Mental Health Royal Commissions are developing their findings even as this is written.  Action on mental health and aged care will require resources that simply won’t be there if the Coalition gets its way.  We’re talking action on a similar scale to the NDIS. (National Disability Insurance Scheme)   The ageing population makes action there especially urgent.

Labor’s strategy must be to demand action on these fronts, in the full knowledge that this puts fiscal pressure on the Conservatives to pull back on tax cuts.  This is not necessarily because of some cynical partisanship or desire to ‘wreck’, but because the Aged and the mentally ill desperately require our support. More hospital beds, better pensions, psychological counselling and community support.  Enshrined ratios (nurses and aged care workers) in Aged Care and the funds to make that possible.  Better training – including dementia training – and better wages and conditions for Aged Care staff.   Resources for ‘quality of life’ ; private rooms, quality food, access to internet, facilitated discussions and games , a life that is worth living – and more than sitting people down in front of televisions all day.  Also more money for ‘ageing in place’ programs ; ensuring everyone who needs such a package can receive support quickly ; without onerous waiting lists that currently can go on over a year.  And on the way begin winding back regressive user-pays.

In the meantime Labor must resist any austerity ‘brought forward’ to accommodate the Coalition’s tax cuts.

The bottom line is that Labor needs a debate which keeps distributive justice, progressive tax, social wage provision – front and centre of the Party’s agenda.  Over the medium term we need to be moving towards the OECD average tax to GDP ratio.   

Labor also has to head off the so called ‘ensuring integrity’ anti-unions laws ; and should be engaging the crossbenches on this now.  We also need to prioritise the Senate for the next election.  If the anti-union legislation passes the industrial wing needs to be prepared for a fight to render the legislation ‘the dead letter of the law’.

Many Labor activists are now ‘falling into line’ because of the idea that ‘disunity is death’.  And hence a desire from some to enforce conformity. The fight to oppose Phase Three outright from the outset has been lost.  Many are bitter, but we need to plan ahead for the future. The next debate is whether we press for extended services on aged care and mental health we know are incompatible with the Coalition’s vision of ‘ever smaller government’.  And following that: whether we are willing to rescind Phase Three after the next election ; and maybe even modestly raise taxes by around 1% to 1.5% of GDP on top of that to fund an expansion of the social wage which ‘takes us forwards’, not just a ‘rear-guard action’.

Negative Gearing reform and Franking Credits may be off the agenda for now, but the reality is we failed to sell our policies.  Perhaps we should have imposed means tests in places so our policies did not disadvantage any genuine ‘battlers’.  Alternative policies could include a very big commitment on public housing.  As well as a restructuring of income tax, and imposition of indexation at the lower brackets.  Also a progressive increase of the Medicare Levy to fund dental and mental health; and a National Aged Care Insurance Levy to fund  Aged Care reform.  We need a vision which 'takes vulnerable and working Australians forwards'.  Already-progressive forces need to ‘plan ahead’ for the next National Conference.

The election was close and we should not succumb to despair. With reform re: ‘big money in politics’ , and full preparedness for any future Conservative ‘scare campaigns’ we should be able to go into the next election ‘on the front foot’.

Thursday, July 4, 2019

Backing Liberals’ ‘Flat Tax’ Agenda a Bad Move for Labor

above: Morrison's Tax Cuts will lead to over $20 billion in austerity every year 

Dr Tristan Ewins

Figures in the ALP - even including Senior figures in the Left -  are rationalising the decision to back the hugely regressive Morrison income tax cuts in the final instance.  The rationale (given by senior Left figure, Kosmos Samaras)  is that workers do not begrudge the wealthy a tax cut, even though they do begrudge an increase in Newstart.  He concedes it reluctantly, calling it “confronting". For many adapting to the mindset of these people (including ‘working class Tories’) is more urgent than actually trying to win the argument. Or winning those people over on balance on other issues - despite their prejudices.

So now Labor has gone so far as to pass the controversial ‘Phase Three’: which  moves us towards a ‘flat tax’ with those in $45,000 to $200,000 all on the same rate. This is worse than Blairism ;  This is capitulating to Thatcherism. 

Phase Three alone will come at a cost of $95 billion in five years’.

And even before this 'Phase 2' alone will cost
almost $4 billion a year.

Now the Median wage (ie: middle income) is only
approximately $53,000 a year.  Though If you ONLY take FULL TIME wages that equates to $65,577 a year.

But this is NOWHERE NEAR $120,000, say – which is well within the top 10 per cent.

If people on undoubtedly high incomes do not pay their fair share of tax how will the social wage survive - let alone expand?  If the ALP does not stand for the social wage what does it stand for?  Without the social wage Labor utterly turns its back on the Whitlam legacy.  And at least Hawke gave us Medicare.

If we effectively back a flat tax we may as well not exist.

Labor lost the recent election for many reasons. Clive Palmer's money. A deceitful tax scare campaign on ‘retiree taxes’ and ‘death taxes’ that were nowhere on Labor’s radar. A failure to communicate complex policies. Media bias. A 'flat' performance by Shorten in the final days.

What this shows it that we need to be careful how we frame our next Campaign. Simpler but still progressive tax reform. Rescind phase three and increase progressive tax by somewhere between 1% to 1.5% of GDP. Include a progressively structured Medicare Levy increase. Make the connection between the tax reform and the social insurance/social wage reforms we want to make. Aged Care Insurance, Medicare Dental, Child Care. Keep on emphasising we're only talking 1% to 1.5% of GDP. Sell the ideas of social wage, collective consumption, social insurance.

Also: Attack the Liberals relentlessly. Push them hard on the need for cuts under their plan and where the cuts will come from. Use relatively simple negative and positive ideas and slogans - that will 'cut through'.

As for bracket creep ; after adjusting for fairness we need to index the lower brackets. And when the Libs say 'politics of envy' - don't just take it - fight back. $95 billion of cuts over five years is massive. It's not 'envy' ; it's about justice and it's about survival. Emphasise that lower and middle income earners are $53,000/year and under taking the median as a guide.  (or again: approx $65,000 if you’re only considering full time workers)

When we cut taxes for people on $100,000, $200,000 and higher - we are cutting health, education, aged care, and the social safety net. Make sure everyone understands this. And also people on lower thresholds are paying proportionately more of the tax burden. Which is the point. (ie: towards a 'Flat Tax')

These days even The Age is beating the Liberal drum relentlessly. But if we become a Party that no longer sets agendas ; but rather REACTS and capitulates to media spin campaigns - we may as well give in. You're basically saying 'Blair was Right'. And that the cause of a genuine Centre-Left is hopeless.  But even Blair *increased* tax modestly for his programs.  A flat tax is closer to Thatcher than Blair.

If deregistering unions becomes 'popular' do we give in to that too?

We can make tactical and strategic changes without full on capitulation.

I  made the argument thereafter that if workers support the Morrison tax changes it is because they don't understand what it will cost them in the long run. And the ALP wasn’t making that case very strongly either.

For Samaras this was being ‘patronising’ to workers ; and he retorted “yes, those poor uneducated workers.”  The implication is that he thinks workers backing the cuts know exactly what they’re supporting.

This was my response: 

So you're saying people understand Medicare, welfare, public health, schools, public infrastructure, universities, the ABC - are going to be slashed ; and they think a tax cut of maybe $10,000 a year or more for someone on $150,000/year is the better option?

People are immersed in popular culture. A Current Affair inciting hatred against the unemployed and unions. The Herald-Sun selling the narrative of the 'everyman ScoMo'. Yes, there are working class Tories out there. But even still: we have to actively contest the argument.  The Liberals will govern against most workers’ interests, and we need to communicate that.  And somehow begin the work of rebuilding an outlook of solidarity.

I’m no Leninist, but it’s interesting to consider what he had to say here. Before the meaning of 'social democracy' shifted Lenin pointed out the need to impart 'social democratic consciousness' ; but that this did not arise 'organically' from the class struggle, but had to come from the revolutionary party.

Today we have very little left in the way of a class struggle compared with the past. The Accord had something to do with it. So did deindustrialisation. So we don't have class consciousness among many, let alone 'social democratic consciousness'.

That said, an old style vanguard party is not the answer. We need a mass party.  But a mass party which – like a vanguard party – is capable of leading, mobilising and educating.  And is  complemented by sympathetic social movements which it builds strong ties with.

Social Media is a 'leveler' ; but the Conservatives dominate the old media. Over the long term the decline of traditional media will strengthen our hand. If we don't completely roll over into a Party of Liberalism in the interim.

Samaras suggested I was being 'patronising' ; but remember a lot of workers voted for Hitler too. Would it be 'patronising' to say they were wrong? A lot of working people are convinced by the tabloid propaganda. Again, if deregistering the CFMMEU becomes 'popular' do we back that? Or do we fight back ; actively strategizing with everything we've got?  

Yes people got it wrong. No, they didn't fully understand the implications of voting Tory. They don't know what over $20 billion in cuts a year will look like. Van Badham of The Guardian supposes that before too long that will escalate to a figure of $40 billion. (there's a likely recession, and the mindless drive for a surplus 'no matter what") It's partly our fault for not making enough of an issue of it. Our job is to expose that social cost. And when it comes to the next election oppose Phase 3. Which alone will cost over $200 billion across a decade after inflation.  (more if you accept Van Badham's assumptions)

So for those who think it's a good idea to back the tax cuts how about you explain where you think they should make the Budget cuts.

Jacquie Lambie has also totally sold out ; backing the shift towards a flat tax in return for  just over $150 million in relief for public housing debts.

Samaras again backed Lambie on the basis that public housing was a crucial issue in Tasmania , and the money would assist the homeless.  Their circumstances are desperate ; and no-one is saying nothing should be done.

But with the money forgone from the tax cuts (for just one year) we could provide Lambie with that money much more than 100 times over.   Whatever relief the vulnerable get from this, other vulnerable people will pay down the track more than 100 times over in the space of just one year by the time Phase 3 kicks in.  And after that the vulnerable get nothing.

Many people who think about and understand the consequences of this will end up voting Greens or other Left groups out of desperation unless Labor gets it together and commits unambiguously to rescind Phase 3 upon re-taking government.  (The legislation re: Phase Three is not due to take effect until 2024) It’s true in the end that Labor did not have the numbers to stop the legislation ; but ‘taking a stand’ was crucial for morale and for Labor’s credibility.  As well as contributing to a debate which may influence public opinion into the future.  

For those who agree to let the tax cuts to go through instead of addressing aged care, dental, childcare: how about saying EXACTLY where you want Morrison to make the cuts?  More than $20 billion a year is a LOT of money. It's not enough to say 'cut red tape'. Frontline services will be damaged critically.  

And before anyone attacks me: We are coming within a cat's whisker of a Flat Tax.  And that is the politics of Thatcherism.  'Politics' is about 'political capital' ; and progressives who are about social and distributive justice - not just identity politics - will see this as a betrayal. It could colour peoples' idea of Labor for years if not decades.

That’s what we should have thought of before we voted for this package ; even if some people have the intention of trying to revisit the issue come the next election.  No doubt ‘pragmatists’ will try and head any such move off in any case when the time comes.