Government does not go far enough on Aged Care reform, while Labor is too-light on the Details

 

above:  Aged Care residents need  more to do than to be sat in front of a television all day

Dr Tristan Ewins

The recent Budget announcements are a mixed bag for Aged Care.  They represent a step in the right direction ; but much is still left to be done.  Specifically the Budget outlines an extra $17.7 billion over five years in new funding ; but with an upwards trajectory.  This is intended to provide an additional 80,000 home care packages over two years, while increasing the Basic Daily Fee by $10 a day. This will provide for things such as better food.   And average staffing levels will increase, with 200 minutes of personal attention allowed for, with 40 minutes of this with a registered nurse.   By comparison,  the Royal Commission concluded that residents require at least 215 minutes of personalised care a day.  (including 44 minutes with a Registered Nurse)  And while the Budget initiatives will see an increase in the numbers of  Aged Care workers attaining a Certificate III qualification, they have stopped short of mandating this as a minimum standard.   

The Conversation concludes that while the changes, including a new Aged Care act in 2023, are significant, they stop short of the ‘needs based’ model demanded by the Royal Commission.   We still need minimum staffing ratios.  Mandated personal time with staff needs to go further.  To attract and keep the best workers we need significantly better wages and conditions for all staff.  A landmark improvement in wages of at least 20 per cent, and end casualisation for those who prefer part time or full time work.  This is also a matter of fairness in relation to the demanding nature of the work.  We require more workers with a Certificate IV minimum.  We need as many workers as possible with a Certificate IV, and none with less than a Certificate III. What’s more we want better standards without falling back on user pays to provide for this.  In Paul Keating’s words, we don’t want people to have to ‘eat their house’ and die broke.   This also requires an improvement in the Aged Pension, with an easing of means tests. And we need to provide for a waiting list of around 100,000 for at home care. We also need stringent regulation to ensure new funding goes entirely towards staff, infrastructure and services, and not profit margins.   

There’s also the problem of Aged Care homes being ‘warehouses for old people’. People are just sat down in a common room in front of a television all day.  Tied funding needs to be provided for facilitated interaction ; outings for those interested and capable ; visits, gardens and access to a variety of books and information technology ; as well as interesting and engaging activities.  Once everything is accounted for we’re looking at something more like a minimum of $10 billion new funding every year indexed to account for rising costs and inflation.  This is necessary just to make up for the money withdrawn from the system in the form of ‘efficiency dividends’ over the past 20 years.   The public sector also needs to take more responsibility, with more public investment in aged care facilities.  For profit aged care does not have the interests of residents at heart, and even not-for-profits can be prone to diverting funds for expansion.

But by comparison Labor has made little in the way of monetary commitments in its Budget Reply.  Nonetheless it’s true, Albanese has hinted at ratios.  He argued that :  “a Labor Government will deliver that care by ensuring that every dollar spent in aged care goes to employing a guaranteed minimum level of nurses, assistants and carers and to daily needs like decent food – rather than into the pockets of the more unscrupulous providers.”   This includes a registered nurse on site 24/7.  And a commitment to levels of personalised care recommendation by the Royal Commission. He backs the Royal Commission findings ; though he does not commit in areas where there was disagreement ; such as funding.  Albanese also mentions issues like the wages and conditions of staff, which the Liberals did not even touch upon.   The bottom line is that while Labor is saying some good things, it needs to commit on funding.  And that funding mechanism should be as progressive as possible.  For a start, tax cuts for the well-off need to be stopped or reversed.  It needs to provide at least twice the monetary commitment made by the Conservative Government in Aged Care ; or at least an additional $10 billion a year.  And that funding needs to kick in as a matter of urgency, as soon as possible.

Albanese is also highlighting Labor’s ambitious child care policy, as well as its high tech industry policy, an emphasis on wages, and a big commitment to social housing  - with 20,000 new social housing dwellings,  including 4,000 places for women and families escaping domestic violence.  There is no explanation how wages will be driven upwards however, or why social housing is thought preferable to public housing.  After all, public housing would ultimately be more affordable for recipients. If the Fair Work Commission will not lift Aged Care workers’ wages significantly enough Labor needs to intervene more directly.  And the NDIS needs support so recipients are not adversely affected by cost-cutting.

As the Federal election approaches, the issue of revenue and funding will become unavoidable.  A ‘small target’ will not suffice when people are demanding details. An Aged Care Levy could be progressively structured, and would probably be relatively popular if linked directly with Aged Care funding.   The Coalition has been driven by the findings of the Aged Care Royal Commission to go further than it is probably comfortable with.  But Labor needs to go further still if it is to address the findings of that Commission, and clearly distinguish a superior policy from that of the Coalition.

Labor must draw lessons from Electoral Defeat - But not Compromise its Values

Sco-Mo ; supposedly 'the every-man's politician'

Dr Tristan Ewins

Labor has lost what had been seen as an unlosable election. How could everything go so wrong? How could the polls have got it all so wrong?

Firstly, here, is the United Australia Party vote and Clive Palmer’s money. Regardless of whether he achieves a Senate seat, Palmer is channeling roughly 3.5% of the vote in the form of Liberal preferences.   What can Labor do about ‘big money’ in politics?   Nothing straight away ; but over the long term the rules must be changed so billionaires cannot ‘buy their way into parliament’. Or otherwise 'harvest preferences' for the Conservatives.  Labor needs to run hard on this over the long term.

Secondly, there was the re-invention of Scott Morrison – as ‘Sco-Mo’.  ‘Sco-Mo’ was supposed to be ‘an everyman’s politician’.  With his baseball cap ; at various sporting events ; a dad and a Christian. 

This may have been clearly shallow for many of us ; but obviously it gelled with a great number of people. The Liberals chose to focus on ‘the character of Sco-Mo’ and to distract from the dysfunction within ‘the Liberal Team’.  The strategy was reinforced in Newscorp media over months.  Labor failed to smash this invented idea of ‘Sco-Mo the every-man's politician’ when it should have tackled it head on.

Thirdly: the Liberals turned to all the usual prejudices against Labor. The propaganda asserted ‘Labor can’t handle money’ ; and warned of  ‘the Bill Australia can’t afford’.  The fear campaign was not sufficiently interrogated in the media ; and ultimately it worked.  Labor failed to establish that deficits have continued under the Liberals – and much more than necessary because of measures enhancing the incomes of the –already-rich; and that a deficit was in fact necessary under Rudd in order to stimulate the economy and avoid recession.

In fact there was a narrow base to much of Labor’s tax reform.  Measures on franking credits affected less than 5% of the population.  But Labor did not establish this in the public consciousness  either.

Further, there is the melding of neo-liberal Ideology and the legacy of 80s ‘reconciliation politics’.   

The Hawke-Keating governments delivered Medicare, superannuation and various tax reforms.  But they also consolidated in the public consciousness that class conflict was ‘bad’.  And it was up to unions to ‘take a hit’ with wage restraint for the sake of the economy ; but without the delivery of anything ‘Nordic’ in return.  The problem was that once the unions traded away a general right to withdraw labour, and conceded to enterprise bargaining – as its position further weakened it had little else to bargain with.  And ‘reconciliation’ was seen as organised labour’s responsibility to be flexible in response to ‘employer needs’.

The ALP started talking about reducing the number of days lost to strikes as a virtue in of itself ; when in fact it was also a signal of a weakening movement.  Where the legitimacy of industrial action itself had been reduced to an impression of ‘disruption, thuggery, and unnecessary inconvenience to the public’.    Here all redistribution is also reduced to ‘the politics of envy’. 

The Liberals speak of “a fair go for those who have a go”.  But was Morrison arguing that cleaners, nurses, child care workers, aged care workers, teachers – do not ‘have a go’?  This is the same kind of warped take on ‘meritocracy’ which ‘naturalises’ privilege and inequality.   But Gina Rinehart did not ‘work her way to prosperity’.  And yet inheritance taxation is still stigmatised as a ‘death tax’ ; and this also featured in Liberal disinformation and scare campaigns.

Morrison tried to ‘shame’ Shorten for ‘not looking a man on a $200,000 income in the eye’ that he was increasing his tax by 2 per cent. (!)  Shorten should have responded strongly that the flattening of the tax system had to stop ; and everyone else was paying the price.  But he did not confront Morrison directly on this.  This was a wasted opportunity that let Morrison off the hook in constructing his ‘meritocratic mythology’. 

For decades the ALP was also complicit in the politics of ‘small government’.  Breaking that consensus was always going to be difficult after all this time.   As things are reform here has to be slow, deliberate and cautious.  But without such a plan Labor cannot achieve any significant reform agenda.

Also there was the question of Morrison’s alleged Christianity and the case of Israel Folau.  Themes of ‘freedom of religion’ could have been a real sleeper issue which influenced a significant number of votes.  Labor needs to balance freedom of religion with anti-discrimination measures. Much scripture in many faiths contains elements which grate against the grain of modern liberal society.  But effectively repressing the expression of the contents of scripture might simply consolidate a significant portion of ‘the Christian vote’ in the Conservative camp.  There’s a clash of liberties and rights which simply cannot be resolved: it can only be negotiated.  But even accepting religious freedoms, there will be no ‘turning back the clock’ on minority rights when it comes to issues like  equal marriage.   At the same time we cannot make it easy for the Conservatives to 'divide and conquer'.

This is a devastating loss for Labor. It amounts to a victory of fear over hope and vision.  But Labor cannot give in.  It needs to draw tactical and strategic lessons without abandoning its values.  Labor cannot give in on the project of re-structuring the tax mix to pay for social wage and social insurance measures.   Next time Labor needs to look at tax reform in the vicinity of 1% to 1.5% of GDP: but squarely aimed at the top 10% demographic.   And Labor needs to establish that the remainder will not be adversely affected.   With the exception that superannuation tax concessions still need to be tackled ; and may cost the Budget tens of billions into the future if this is not done. And perhaps with the additional exception of a dedicated progressive levy to fund a National Aged Care Insurance Scheme.  The Aged Care Royal Commission should provide momentum.

Labor also needs to establish that a ‘flattening of the tax system’ means that most of us pay proportionately more: not just through the tax system itself ; but also as a consequence of the user pays which ensues.

The coming term will be marked most likely by economic crisis – intensified by the trade war between the US and China.  And by the moral imperative of responding to the Royal Commission on Aged Care.  If the Liberals take Australia into recession Labor needs to punish them on this relentlessly.  And ‘burst the bubble’ of ‘Liberal economic management’.  In addition to pressing hard for a full implementation of Royal Commission recommendations on Aged Care, Labor needs to continue focusing on restoration of funding for the NDIS and Gonski education recommendations.  Next time we need to provide certainty that we will legislate for a higher minimum wage ; and also address the income of low-wage workers more broadly.  (that includes through the social wage)

Most importantly Labor needs to debunk the Liberals’ warped construction of ‘meritocratic Ideology’.   Labor needs to establish that all kinds of people work hard ; and we should not be naturalising privilege.  This is a core Ideological battleground which Labor must contest if it wants to embrace policies involving distributive justice.  And to make sure the public is fully aware of the arguments next time the entire movement needs to begin campaigning on these principles and issues immediately.  We have three to four years and we cannot afford to waste a single day.

Finally there is the question of the labour movement and broader social movements’ response to inevitable Conservative austerity.   Progressive social forces need to prepare for a defensive fight against austerity ; and continue the fight for wage justice at the industrial level.

The danger is that Labor will retreat into a conservative ‘small target’ strategy.  Instead Labor needs to draw tactical and strategic lessons while remaining true to its values.

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.