Critique of Labor and The Greens on ‘Policy Compromise’

 

above: Labor and the Greens can work together; But need to be conscious of each others' electoral imperatives ; Carbon Tax was good policy ; but a 'political death warrant' for Labor

Dr Tristan Ewins

Recently the Australian Greens negotiated a compromise with the Liberal Federal Government in Australia on the question of pursuing tax evasion by “Australia’s wealthiest private companies”. ‘The Age’ reported that as part of the compromise “Up to 300 of Australia's wealthiest private companies will be forced to disclose their annual tax bill for the first time.”   But that the legislation also will “shield up to 600 more companies that would have been brought under new transparency requirements.” 

Labor has branded the deal “a sellout”.  They had pressed for all companies with revenues of over $100 million to be affected by the reform – whereas the Greens negotiated a compromise with a threshold of of $200 million. Labor argued a compromise was not necessary – on the assumption the Government itself would have been forced to compromise before the end of the sitting of Parliament.

(Read more: http://www.smh.com.au/federal-politics/political-news/greens-deal-with-scott-morrison-on-tax-shield-sparks-labor-fury-20151203-gle9ft.html#ixzz3taKrNOA9
Follow us: @smh on Twitter | sydneymorningherald on Facebook  )

Also considered recently in discussion has been the decision by the Greens several months ago to agree to another compromise - tightening means tests on Aged Pensions in order to save $2.4 billion over four years. 

By contrast Labor was arguing for reform of Superannuation Concessions delivering windfall gains to some of the very most wealthy: though arguably Labor wasn’t considering a broad enough base (including the upper middle class) in order to bring in serious revenue without need for unfair austerity elsewhere.  

To summarise: Shorten’s plan foreshadowed savings of $14 billion OVER TEN YEARS.  But the Government is facing a deficit ballooning to over $40 billion a year ; and root and branch reform of tax is what is necessary – not only to get the deficit under control, but to pave the way for a reforming Federal Labor Government which actually improves the social wage, social insurance and social welfare by tens of billions in the context of a $1.6 trillion economy.

Again by contrast:  The deal agreed to by the Greens with the Liberals  had 170,000 of the most financially disadvantaged Pensioners standing to gain $30/week as of 2017; But approximately 330,000 (relatively better-off)   Pensioners would see cuts through tougher means tests ; and more than double that into the future. 

 

(See: http://www.smh.com.au/federal-politics/political-news/pension-assets-test-deal-with-greens-secures-coalitions-changes-20150616-ghplxg.html )  

 

The following are some excerpts regarding my thoughts: not only on this specific compromise, but on the ALP working with the Greens generally.

 

SL in relation to the Greens ; Is it right for the SL to Criticise ALP Policy?

 

At the ‘ALP Socialist Left Forum’ Group we’ve had plenty of debate on the place for criticisms of the ALP. Should criticism be considered ‘treason’ of some kind? Should we work for co-operation with the Greens – or should we fight them tooth and nail on account of the threat to several of our most talented Left MPs ; and the likelihood of declining Socialist Left influence in Caucus and Cabinet?

 

Nonetheless: Labor often gets it wrong on policy.  For instance, we often pursue symbolic policies for appearances sake which are far from the ‘root and branch’ reform needed to serve the interests of our constituents.   Shorten’s Superannuation Concession reforms are very modest , and at this rate Labor will be pressed to pursue extensive austerity if we regain government. Perhaps regressive policies such as more attacks on vulnerable groups such as Sole Parents.  Or an increase in the Age of Retirement.  And yet Labor’s Platform leaves the way open potentially for an expansion of progressive tax and social expenditure.  Labor still has options for a genuinely progressive mandate.

If as the most significant Left formation in the country (The broad ALP Socialist Left)  we do not criticise our own party's policies when our leaders get it badly wrong - then who will step into that space? There are a number of possibilities. Either groups like the Greens will step into that space ; or because of our silence the Left more broadly will be demobilised.  This would especially be a threat if the Greens’ tending towards compromise marked ‘a move to the Centre’ which again would leave a space in the Left of the Australian political milieu.  A new challenger on the Left of Australian politics could take a long time to re-emerge therefore ; just as it has taken decades for the Greens to establish themselves properly.  This would simply assist the broad Australian Right in consolidating their hegemony.

 

Don't get me wrong:... I'm all for staying and fighting within the Party. But when the Party leadership gets it badly wrong its up to us whether we vacate that (public) Left space and/or demobilise the Left - or whether we choose our battles - and publicly dissent at times – in the context of important debates – such as a much more robust winding back of superannuation concessions for the wealthy and the upper middle class.  We must do this because there is the alternative of Left demobilisation. And before we know it even our own people don't know what we're supposed to be fighting for anymore... (take privatisation, tax reform, social wage and welfare expansion and reform, industrial rights and liberties etc)

 

Insofar as criticism is constructive we shouldn’t just tolerate criticism of  Labor policy - indeed it must be encouraged. 

Nonetheless,  the trend towards Labor and Greens just trashing each other always seems to involve a degree of 'spin' and is not necessarily 100% honest.  What we need is honest, reciprocal criticism.

 

There's also the urgent question: What will WE (ie: Labor) do on Company Tax? Here we really need ALP and Greens to team up and vote down Company Tax cuts - because that is Corporate Welfare.  That is business avoiding paying their share for the services and infrastructure they benefit from!  So instead ordinary citizens, workers, taxpayers - are left to pick up the tab – directly or indirectly. (whether with an increased GST, or austerity elsewhere) Where does Shorten line up on this? (seriously)  There are many billions at stake.

 

More on Greens Compromises

 

Regarding Greens’ compromises it must be observed: It’s the old dilemma over whether to compromise and get something 'right here right now' - or whether to hold back - in the hope of discrediting the Conservatives - and getting something much better with the next change of government. Labor has faced these dilemmas itself at times.

 

For instance, the Carbon Tax was the best policy - but was politically impossible after Gillard’s commitment "There will be no Carbon Tax in a Government I lead". The Greens should have recognised this. There were other options. Like billions in annual direct public investment in renewables research and infrastructure.  In a convoluted kind of way the Greens’ insistence on the Carbon Tax could even have been considered an instance of opportunism in its own right.  The Greens got their policy – and it granted them prestige with their constituencies.  But arguably it sealed the fate of the Labor Government.  This is not to say the Greens shouldn’t press their leverage to get robust policy compromises from Labor.  And arguably Julia Gillard should never have backed Labor into that corner in the first  place.  But direct investment in renewables research and public infrastructure would not have involved a blatant, high-profile broken promise.  Of note:  Labor must not back itself into a corner on ‘small government’ now either!

 

 

What Reforms must Labor and the Greens pursue now as the 2016 Federal Election approaches?

Instead of just positioning against each other with the hope of gaining an electoral advantage over largely ‘cosmetic’ policies, again Labor and the Greens should be projecting root and branch reform in any Labor Government where the Greens hold decisive sway over the cross-benches

More specifically: Labor and the Greens need to move together to secure a minimum $35/week increase in all full pensions INDEXED upon Labor taking government.
This must include Newstart and Student Allowance.   Although I've been arguing for this for years already and $35/week isn't as much as it used to be. Full indexation is crucial, and perhaps now the figure should be somewhat higher.  (eg: $40/week)

 

Also in an exchange at the ALP Socialist Left Forum Facebook Group I accepted the need for subsidies to help the elderly invest in air conditioning and heating. Increasing the Aged Pension should be part of that. Existing pensions and payments make insufficient consideration of contingencies which vulnerable Australians may be faced with.  From a visit to the dentist to having to replace a washing machine – such everyday challenges can leave our most vulnerable destitute.  

Some would call the Greens' compromises through 2015 opportunism. Labor would attract that claim from the Greens themselves if it was Labor who had made the compromises. The Greens are trying to shake off their reputation as a ‘protest party’ – which never has to compromise.  Labor argues the Greens are about appearances re: policy protest – but are not about outcomes. 

But there is the argument that some of the compromi...ses the Greens have pursued have helped the most vulnerable. Though in a way which has hardly been fair to some people who would not fairly qualify as 'rich'.

There are two sides to this. What matters is that if we get a Labor Government - and if the Greens hold the cross-benches - there will be no more need for 'compromise with the Liberals'. And in that case we should see the whole policy schema recalibrated in a way which is truly fair - and doesn't involve 'compromises' whereby one constituency (not really 'privileged' by any reasonable measure) is played off against another (truly, genuinely disadvantaged). Better to target the top 15 per cent income and wealth demographics for redistributive measures aimed at improving the lot of those on low and middle incomes ; workers and vulnerable welfare recipients.

 

Target 'the top 15 per cent' as it is a narrow enough constituency for redistribution to be fair ; narrow enough to be electorally viable ; and broad enough to bring in serious revenue for serious reforms....

 

The problem right now is that most in the Parliamentary Labor Party will oppose taxing the sole residence of the elderly - fair enough - but they may not support other progressive measures (as listed) necessary to repairing the welfare state, social insurance and social wage.

 

Ideally we should pursue a more progressive tax mix which does not necessitate the elderly being forced to sell their home towards the end of their lives when familiarity can be so important. We should hit superannuation concessions for the wealthy and the upper middle class. We should restructure the income tax mix radically. We should consolidate Company Tax and begin to gradually wind back D...ividend Imputation - which most advanced economies manage to do without. (worth over $20 billion now)  Perhaps we should tax the banks. And perhaps we should tax the largest inheritances ; and introduce a Tobin Tax on financial transactions. Finally we should definitely raise the Medicare Levy - and progressively restructure it into more progressive tiers.

With this we can bring in tens of billions. We can introduce National Aged Care Social Insurance ; we can implement Medicare Dental, Physio and Optical and cut waiting lists. We can fully implement NDIS. We can implement Gonski and transform HECS into a genuinely progressive tax.  We can invest billions into social and public housing, as well as infrastructure of all kinds – increasing housing supply , making housing affordable , providing transport and services to new suburbs. We can revivify Legal Aid, and we can provide Federal Funding for Local Government - to make Local Government less dependent on relatively regressive levies/council rates. And we can reform welfare, support payments and pensions and lift the most vulnerable out of poverty. Finally, we can invest in the ABC and SBS. That's what we should do ; and it doesn't necessitate driving the elderly from their homes - even if their homes are valuable. And especially if their residence is their major asset - and they are not wealthy aside from this by any reasonable measure.

 

In conclusion – Labor needs to settle on policies of depth and substance. Because while ‘cosmetic’ policies may win over some voters – that is not our ‘reason for being’.  Labor should not be driven by the quest for government purely for its own sake: outside the context of winning deep, meaningful reforms.  Before Thatcherism and the decades-long retreat of the Left there was reference to the notion of “The Forward March of Labour’.  We need to reconceive of our reform trajectory.  Of what comprises our ‘forward march’ on policies which reform social wage, social insurance, welfare, personal and collective liberties, the extension of democracy – and more. 

And we need to establish our reform trajectory quickly and soon if we are to have the time and the opportunity to sell such a package to voters ahead of the Federal Election in 2016.