Unpublished Letters from a Labor Activist ; March-July 2017

The following are a series of unpublished letters to ‘The Age’ and ‘The Herald-Sun’ from Labor activist Dr Tristan Ewins from March to July 2017.

They are presented chronologically.

Increasingly I'm finding it impossible to get any of these letters published ; I hope at least they may spur some discussion here at this blog.

Please feel welcome to link to this page via Facebook.

The position of modern Christianity is complex

(Herald-Sun, March 2017) As a democratic socialist I am loathe to concede anything to Andrew Bolt.  But regarding his recent op-ed on Christianity I had to concede there is a growing ‘cultural assault’ against the faith.  In some quarters there seems to be a double standard in how Christianity is treated in comparison with other faiths.  During the French Revolution – which Bolt alludes to – Catholic clergy enjoyed entrenched privileges as the so-called ‘First Estate’.  More recently (from the 1930s) the Roman Catholic Church was involved in fascist regimes in Spain (Franco) and Austria (Dolfuss)   The Papal Encyclical “Rerum Novarum” also alienated many Catholics from the Left.  But there is more to Christianity than this.  Churches – including wings of Catholicism – have been vehicles for progress also.   Consider Martin Luther King Junior,  Desmond Tutu, Oscar Romero ; and even consider Francis’s attempts to reform Catholicism.  And across the country various churches and various denominations have embraced causes like indigenous rights, the environment, civil rights, peace, the fight against poverty and homelessness, queer rights and so on.  Today’s diverse Christian church is not uniformly the bastion of privilege and conservatism it once was.  That said, Christians must enjoy the same dignity and liberal rights as everyone.

What’s wrong with the Swedish Model?

J.Muir (Herald-Sun ,Letters 18/4) suggests those who look to the Swedish (democratic socialist) model have let go of all “logical thinking”.  Yet for decades Sweden’s famous welfare state has been the source of greater happiness, equality and security compared with the US, Australia and Britain.  At its height the ‘Swedish model’ also achieved close-to genuine full employment (hence ‘running the economy at full bore’) ; and that was comprised largely of high wage jobs thanks to Sweden’s interventionist industry policies.  The Swedish welfare state and industry policies also meant Sweden could revolutionise its industries without displacing and impoverishing workers in the process.  The Swedish welfare state’s universality also meant there was little in the way of resentment from the well-off.  All this was not a disincentive to work ; but nonetheless Swedes have enjoyed very high quality public health, education, and social security systems.  What is ‘illogical’ about all that?

What does Peta Credlin know about ‘Australian values’?

Peta Credlin (Herald-Sun, 23/4) argues we must “Stand Up for our Values”. (that is, ‘Australian Values’) But who determines what Australian Values are?  Traditionally we have thought of ourselves as an egalitarian nation.  Historically that was confirmed with our labour market regulation (with a fairer go for the low paid) ; through the rights enjoyed by workers and their trade unions ; and through our progressive welfare state (including Medicare), and our mixed economy. ( which involved cross-subsidies for the poor)  Further ; Australian POWs in Changi survived through human solidarity ; which is the opposite of the ‘survival of the fittest’ Ideology preached by today’s Right-wing. Those egalitarian values have been under siege for a long time now ; including from Peta Credlin’s Liberal Party. Just remember when you hear Conservatives speaking of ‘Australian values’ that we don’t all agree on what those values actually are.

Bolt wrong on Education Again

Andrew Bolt (4/5/17) argues there is at best little connection between levels of funding for schools and actual results.  And yet there has been a trend to a growing defection of parents to the private school sector on account of better infrastructure (eg: libraries, computers and so on), as well as better student to teacher ratios. Some private schools also offer better wages and conditions which enables them to ‘take their pick’ when hiring staff.  Clearly the emphasis on ‘teacher quality’ is a means of distracting from the question of funding ; providing an excuse for education austerity which is destroying ‘equality of educational opportunity’ in this country.  Here Malcolm Turnbull’s ‘Gonski 2.0’ needs to be considered in its context of an actual multi-billion dollar  annual cut compared with the original Gonski agreements. Further: If we are to attract the best teaching staff arguably we need to hold the profession in higher esteem. And more could be done, here, with reductions in course fees and improvements in wages, conditions and career paths for teachers. Instead the government is putting tertiary education fees and repayment schedules through the roof : even for those on roughly HALF the average yearly salary.  (ie: approx. $40,000/year)

Is Turnbull really ‘Turning Left’?  Ask Abbott: ‘What happened to Catholic Economic Centrism?”

Andrew Bolt (11/5) claims Turnbull and the nation are ‘turning Left’ on the basis of insufficient austerity and new tax measures intended to ameliorate the deficit. In reality, however, Turnbull is hitting students and the unemployed hard – with policies which target students on half the minimum wage for thousands ; and which could force low income earners to exhaust their meagre savings before receiving Newstart only after 6 months should they lose their job.  Despite this the Budget does move the Government closer to the relative economic centre in the sense that overall cuts are ameliorated by comparison with the disastrous Hockey Budget of 2014.  And there is finally acceptance that there was ‘a revenue problem’.  Ironically,  the “Abbott Purists” will likely claim the austerity has not gone far enough. Though they may be upset by the attacks on Catholic education.  But it is THEY who have abandoned ‘traditional Catholic Centrism’ on welfare, labour and the economy.  (a tradition which interestingly had parallels with other ‘Christian Democratic’ parties in Europe)  By comparison Abbott, Bolt and others would have us drift into a US style scenario with a class of utterly destitute, and a class of working poor.

Robert Menzies was a Social Conservative ; But might appear ‘leftish’ on the Economy by Today’s Standards ; Bolt wrong again

In the Herald-Sun (May 22nd) Andrew Bolt compares today's Liberals with Robert Menzies - and finds them wanting. Specifically he infers that Menzies would have nothing to do with narratives of fairness. (narratives Bolt rejects)  But in reality Menzies presided over a much more steeply progressive income tax system than we have today - with a top rate around 67 per cent.  Both Labor and the Liberals have moved way-Right on the economy since then.  In reality 'market forces' do not guarantee just economic outcomes. And as against narratives of meritocracy, most of the very rich inherit rather than earn their wealth.  Inequality is not 'natural' or 'inevitable'.  But a degree of redistribution can ensure equal opportunity in education, equal outcomes in health, and 'baseline' living standards that no citizen should be allowed to fall beneath. It is a matter of compassion ; but also of decency and justice. Australia's egalitarian traditions and culture are worth saving. Bolt is wrong.

Slashing the HECS Repayment Thresholds is Unjust by any Reasonable Measure

Ross Gittins (‘The Age’ , 24/5) rightly condemns the Federal Government’s assault on job seekers, including requirements that those people exhaust much of their personal savings before receiving a cent. It received very little coverage in Budget analyses.  Perhaps there is a cold calculation that ‘no one has sympathy for job seekers’ given the constant resentment and callousness whipped up in much of the monopoly mass media.  There wasn’t a word from Labor that I saw. But I don’t understand Gittins’ attitude towards students.  Someone on $42,000 a year is better off than a person struggling to feed themselves on Newstart.  But the Government is abrogating basic principles of progressivity by reducing the repayment threshold to $42,000/year ; or approximately only half the average wage.  Those on half the average wage are not receiving a significant financial benefit compared with workers and tradespeople who had not attended university.  And given other pressures – including housing unaffordability and a rising cost of living – surely HECS repayment thresholds and rates need to be fairer.  Just because you can make ends meet doesn’t mean principles of progressivity and fairness should not apply.  The minimum repayment threshold should be raised to at least $60,000/year ; then indexed.

Root and Branch Reform of Tax and the Social Wage Necessary

“Peter Martin (‘The Age’ 25/5) makes a good case to get rid of poverty traps in the tax and welfare systems which hurt vulnerable groups like single parents and provide little incentive for work.  We have a tax system which needs root and branch reform.  The whole tax mix needs to be restructured for fairness ; as do the PAYE income taxation scales on their own – which thereafter ought be indexed.  Dividend Imputation could be gradually withdrawn to a 50% rate (maybe more over time), saving  $10 billion a year. Superannuation concessions could be withdrawn for the wealthy , but also the upper middle class ; saving over $20 billion.  A ‘Buffet Tax’ (minimum income tax for the wealthy) could bring in over $2 billion.  The Medicare Levy could be reformed on a progressive scale ; where everyone contributes – but by an increasing proportion depending on income.   Finally inheritance taxes ought be reconsidered for those with truly large inheritances ; say over $2 million.  All this could be passed on with a mix of tax cuts for low to middle income earners, improvements in social security , and improvements in the social wage.  (including infrastructure, health and education)”

Terms like ‘Class Warfare’ and ‘Soak the Rich’ Demand Criticism

Peter Hartcher (‘The Age’ June 13^th) seems critical of the recent upsurge in Left-wing politics, with good performances by Sanders and Corbyn , and the return of democratic socialism to ‘respectability’. Terms like ‘class warfare’ and ‘soak the rich’ are thrown around without any real critical consideration of the meaning, assumptions and historical context behind that kind of language.  Progressive taxation hence appears summarily dismissed, despite the fact  that taxes were effectively more steeply progressive under Menzies then they ended up being under any government since Hawke and Keating.   Regressive taxes, ‘small government’ and austerity are today considered ‘natural’ despite impacting negatively against the majority on lower and middle incomes. There is no talk of ‘class warfare’ where it is workers and the vulnerable under attack.  But somehow a fairer spread of taxation is dismissed as ‘redistribution’ – which apparently has been established as a political and economic ‘cardinal sin’.  Australia needs a new culture of social solidarity – where everyone contributes on the basis of their capacity – and where health services, aged care, social security, education, social and public housing – as well as transport, energy and communications infrastructure and services – are made fully available on the basis of need.

Terms like ‘Labor Lite’ to Describe Turnbull Expose Loaded Political Assumptions around the Australian Economy

Andrew Bolt describes Malcolm Turnbull as ‘Labor Lite” - ‘big spending’ and ‘high taxing”.  (3/7)  But in reality taxes and spending have over the long term been falling effectively by tens of billions under both Labor and Liberal Governments.  Compared with the OECD average Turnbull is low spending and low taxing.  Policies that Abbott and Bolt describe as ‘Left’ would be considered ‘neo-liberal right-wing’ in much of Europe and Scandinavia – including by Christian Democrats and Centrists.  Is so-called ‘small government’ really a good thing?  Paying for goods and services: including health, aged-care, education, infrastructure – through progressive taxes – gives citizens in general better value for money than if they paid for these as private consumers.  Look at the outrageously-expensive US private health insurance system for proof of this. This ‘social wage’ also means we don’t have a US-style underclass.  To get an ‘angle’ from which to undermine Turnbull Abbott is also betraying the traditions of Christian Democracy and Catholic economic Centrism which have historically supported welfare and labour market regulation.

What does Bolt know about Socialism?

Andrew Bolt (13/7) writes of Venezuela that it should “be taught in schools” how “socialism ruins countries”.  But surely that kind of official indoctrination would itself be a hallmark of totalitarianism? Instead we need a curriculum that informs students about the interests and value systems of both the Left and the Right , and of different social groups – and encourage them to make their own commitments – in an active and informed democracy. As for socialism: done correctly it has resulted in full employment, high wages, equal educational opportunity, and health care based upon need.  Consider Sweden, Finland, Denmark, Norway. But capitalism increasingly survives on unsustainable private debt ; and ‘corporate welfare’ as big business escapes taxation for the infrastructure and services it benefits from. (the rest of us must pay)  Also there is abuse of market power in the wake of privatisation of natural public monopolies.  (eg: energy) ; and this is why those on lower incomes are suffering.

Scott Morrison’s 2017-18 Federal Budget: Some Good Measures Amidst the Typical Austerity

Admist the Usual Austerity there are some Welcome Surprises in this 2017 Morrison Federal Budget. Though the monopoly mass media is tending to overstate any perceived 'leftward shift' ; inappropriately using terms like 'Labor lite' , where in reality there are very significant assaults on the rights of students and job seekers.

by Dr Tristan Ewins, 10/5/2017

Many media commentators are responding to the 2107-18 Morrison Federal Budget by branding it as ‘Labor Lite’ or ‘worse’.  But how much of that actually stands up to scrutiny? 

Yes the Government is attempting to appear ‘fair’.   And many media figures are throwing around terms like “cash splash” which are commonly reserved to use against Labor governments.  There are pressures in the right-wing monopoly mass media for a ‘right-turn’ in response to any moderation of economic policy under Turnbull.   Bernardi’s ‘Australian Conservatives’ and the libertarian ‘Liberal Democrats’ stand to gain most from this.  But despite years of conditioning from the monopoly mass media Australians may resist these trends given the remnants of our ‘egalitarian spirit’.   The point of all this appears to be stigmatisation of social investments and expenditure ; ultimately leading to a US-style political culture.  Which in turn would support a US style class system based on the absolute destitution of many , and the blatant exploitation of a class of working poor. To the extent Turnbull and Morrison resist pressures for an ‘economic hard right turn’ then that is welcome.

Some Budget changes do appear at the least superficially ‘Labor-esque’.  Many of the billions in cuts and savings originally proposed in the nightmare 2014 Hockey Federal Budget are laid to rest permanently here. The increase to the Medicare Levy will be welcomed by many, and will help provide for the NDIS. (National Disability Insurance Scheme)  The Government claims a ‘$56 billion shortfall’ for the NDIS ; though most of that could have been made up for immediately by jettisoning the Government’s $50 billion in planned corporate tax cuts over 10 years.  (much more over time) $8.2 billion will be taken via the Medicare Levy increase over the first four years.  

A so-called ‘Google tax’ targeting corporate tax evasion is also expected to net more than $3 billion over four years.   (though it is quite insignificant compared with corporate tax  cuts elsewhere)

Further, the ‘big banks’ (including CBA, ANZ, Westpac, NAB) will be hit for $6 billion over 4 years ; apparently including an effective payment in return for the ‘government guarantee’ for the sector. (which began with Rudd’s response to the Global Financial Crisis)   In response there is the question : will the banks hit customers or will they hit shareholders?  If somehow larger shareholders could be targeted that would ensure the most equitable outcomes.  A payment by the big banks in return for an effective government insurance policy makes sense.  Without it ultimately there could be impositions on workers, citizens, tax-payers.  So on this front at least the Government is doing the right thing.  And if the Banks respond by upping fees and charges arguably the co-operative and mutualist sector could ‘step into the breach’.   Were the Commonwealth Bank still in public hands then assuming a ‘competitive charter’ it could have held the rest of the sector accountable , countering tendencies to pass costs onto consumers.  That’s also a good reason for Labor to consider restoring a public-sector bank – perhaps taking advantage of existing Australia-Post infrastructure.

Meanwhile, foreign home owners who leave properties vacant six months or more will be taxed – a measure apparently borrowed from the Andrews Labor State Government in Victoria.  As well as raising some revenue, this measure should also influence investor behaviour ; and effectively increase available housing supply ; with downwards pressure on housing and rental affordability. 

The ‘Gonski 2.0’ measures, meanwhile, are a significant improvement on past Liberal policy, and include needs-based funding.  David Gonski is due to present another report by the end of the year.  The Catholic sector appears to be in the firing line.   More broadly, Shorten points out that despite the gains, here, (including some cuts to some of the richest private schools) the proposals nonetheless still involve an overall $22 billion cut to the sector over ten years compared with the deals previously negotiated by Labor. 

Other constructive policies include significant tax breaks for ‘empty nesters’ to ‘downshift’ to smaller, lower-maintenance accommodation.  That could also increase effective housing supply.  The housing bubble will eventually deflate (or ‘burst’ disastrously). But government could step into the economic breach with public housing.  There is still the need to expand supply to meet underlying human need.  Planned Negative Gearing and Capital Gains Tax reforms from the Government are welcome, but do not go anywhere near far enough, saving just $1.6 billion over 4 years . Stronger action on Negative Gearing is necessary to lessen competition between first home buyers and investors , correcting the Housing Bubble over time.

Also there’s $10 billion for rail as part of a suite of infrastructure commitments. (though these are not as significant as some think when compared relative to infrastructure investment under a ‘traditional’ Labor Government)    

A once-off payment of $75 for singles, $125 for couples – to assist with energy costs – is very insignificant when you consider the rising cost of living.  The Liberals point to renewable energy as the alleged ‘culprit’ here ; but what of privatisation? 

Finally ;  Annual TV Licenses are scrapped in favour of a much lower ‘spectrum fee’ – which makes sense given the changing media landscape – which is hurting traditional media. Arguably the licenses aren’t worth as much anymore.  But diluting media ownership laws will still enable the likes of Murdoch to dominate traditional media.

The Down-Side

But there’s a very significant ‘down-side’ to this Budget as well ; including ‘traditionally Liberal’ attacks on vulnerable groups ; and treating tertiary students like ‘cash-cows’.

Higher Education stands to lose almost $3 billion a year – with students hit hardest.  The Turnbull Federal Liberal Government claims that its fee increases – and its reduction in the minimum repayment threshold to $42,000 a year (down from $55,000) “better reflects the lifetime benefits reaped by higher education graduates”.  But these measures will start ‘kicking in’ affecting people on approximately half the average wage.  Hence in places the measures really bear no relation to any alleged private financial benefits for students. The logic behind these measures also neglects entirely the gains by business and society at large from a more highly educated populace.   There is some progressivity as those with much higher incomes will repay at a significantly higher rate.  But this does not excuse or make up for a 7.5% average increase in tuition fees.  In response Labor needs to raise the threshold somewhere much closer to the average wage ; and higher over time ; while entrenching a progressive scale in the rate of repayments.   Exceptional groups such as the disabled should probably be forgiven their debts, here : or at least have them frozen. The inevitable effect of this will be to deter many poorer students from study, reducing the nation’s pool of ‘human capital’ over time, and impacting on ‘equal educational opportunity’.  It is dubious at best to consider educational investments a ‘bad debt’.

The 0.5 per cent increase in the Medicare Levy is supposed to reassure voters that Labor’s warnings on health are only a ‘scare campaign’.  But while the Levy is re-indexed the forsaken increases to Medicare’s coverage in recent years are not made up for.  Medicare might still be eroded by stealth ; and that is ‘de-facto privatisation’ in the sense of intermittently eroding the coverage of ‘socialised’ public health proportionately.  This was always what Labor alluded to , but for some reasons ‘the waters were always muddied’ in the mass media, with throw away lines like ‘Mediscare’.

Also , while the Medicare Levy is rising, the 2 per cent Deficit Levy is gone – directly benefiting the wealthy in the final balance. There are ‘traditionally Liberal’ distributive  outcomes, here, despite claims of the Budget being ‘Labor Lite’.   (that is, the Budget favours the wealthy) 

Payroll tax on foreign workers will also be replaced with a levy of $1500 to $5000 per employee raising $1.2 billion over four years “to improve Australian workers’ skills”.  To an extent this will take some of the wind from Labor’s sails on related issues. 

Other measures include punitive attacks on the rights of the  unemployed, with the threat of payment suspension for those who miss a job interview or refuse a job offer they don’t want.  And reversion to a ‘cashless welfare card’ for anyone found to have illegal drugs in their system.  5000 people will by thus tested – and effectively humiliated – in order to create a ‘Trojan Horse’ for the introduction of cashless welfare.   Already Australia has one of the most negligent and punitive unemployment benefit regimes in the advanced capitalist world.  But ‘cashless welfare’ will see Australia revert to Depression era ‘Susso’ style ‘payments’.  The ‘Susso’ basically provided threadbare material subsistence (rations and vouchers) for the long-term unemployed.



Conclusions

Claims to the effect this Budget is ‘Labor Lite’ do not really stand up in the longer view historically when you consider pre-1980s relativities on the Economy ; and more recently with the ‘relative economic centrism’ of former Liberal leaders like John Hewson. The reality is ‘convergence’ on right-wing, economically Liberal policies ; though Shorten has begun to ‘break away’ to something more recognisably ‘left of centre’. Ironically,  the “Abbott Purists” will likely claim the austerity has not gone far enough. Though they may be upset by the attacks on Catholic education.  But it is THEY who have abandoned ‘traditional Catholic Centrism’ on welfare, labour and the economy.  (a tradition which interestingly had parallels with other ‘Christian Democratic’ parties in Europe)

This government is restrained by its own inflexible “small government no matter what” Ideology.  (spending is set at no more than 26 per cent of GDP ; well below the OECD average)  This drives various ‘cuts to the bone’ (as Gillard would have put it) , because it leaves no other option than harsh austerity.  Ultimately, Scott Morrison will have to make a choice: real people or Economically Liberal ‘small government’ Ideology.

Terry McCrann of the Herald-Sun calls the Budget ‘a disgrace’ for not sufficiently addressing government debt.  And Jeff Whalley (also of the Herald-Sun) argues that government debt amounts to “$375 billion” or “$15300 for each man, woman and child” .   But while government spending can have a positive ‘multiplier effect’ on economic activity,  austerity also has a negative multiplier effect ; dragging the broader economy down in sympathy.  

Also we must remember  that private household debt is the much bigger problem, and is connected with falling real wages.  (Why the cuts in Penalty Rates, therefore, we might ask! ; which will lead to lower tax revenue also)  And reducing investment in PUBLIC owned infrastructure presents its own associated problems of passing inferior cost-structures on the broader economy. Indeed, investments in some services (eg: Education) and infrastructure add to productivity – and the public sector (natural public monopolies) can often do the job more efficiently.  So Morrison’s ‘good debt’ and ‘bad debt’ has some substance. (a pity in the past they did not apply those principles to Labor governments!)

In conclusion ;  The Herald-Sun reports with an air of alarm that taxes will be up $23 billion over four years ; and spending up $15.7 billion over four years.   Indeed, Commentators are complaining that income tax is becoming more significant proportionately.  Though really, this need not be a problem if total income tax is progressively restructured, and also the rest of the taxation mix.   Also keep in mind the economy is worth approximately $1.6 trillion.  So in reality spending is up by less than a quarter of one per cent of GDP.  The revenue gap has at least been appreciably narrowed.

In some ways this Budget is better than we might have expected from the Liberals after the horror Hockey ‘Lifters and Leaners’ Budget from 2014. But a lot of that Ideology is still there.  And the cuts are still significant ; with the introduction of ‘cashless welfare’ setting a precedent for the further future humiliation of job-seekers.  And shutting many lower-income Australians out from Higher Education.  An Opposition with strong, traditional Labor policies on distributive justice can still ‘outflank’ a Liberal Government which cannot help but govern primarily in the interests of its core constituency: the unambiguously well-off.