The Legacy of Daniel Andrews. Recognising the Good with the Bad

 

above: Daniel Andrews Triumphant one last time (2022)

Dr Tristan Ewins

Today the impending retirement of Daniel Andrews – Labor Premier of Victoria – has been announced.   For many of us this came as a surprise ; but it seems Andrews wants to leave on his own terms. 

Andrews has led a reforming Victorian Labor Government.   While championing the rights of trans women and men, Andrews also presided over a radical increase in the number of women in Cabinet.  He also oversaw controlled legalisation of euthanasia and medicinal cannabis.  What is more he oversaw the shift towards railway crossing removals as a much-more cost effective means of reducing road congestion.  The Andrews Labor Government also took something of an authoritarian turn during the Covid 19 crisis ; but perhaps the unparalleled times called for this. Andrews also oversaw the beginning of negotiations for a state-based Treaty: blazing a trail ahead of his Federal  colleagues.

On infrastructure and Health, Andrews made big investments in public health: most specifically in increasing the number of nurses on the ground ; and providing incentives and financial support for future nursing graduates.  A total of over $150 million was invested in indigenous Health (with an anticipated 100,000 extra appointments) ; as well as free IVF, women’s health clinics, and a mobile health clinic.  Further, public Aged Care levels were maintained ; and funding provided to assist in ensuring a registered nurse was provided in every aged care facility. Almost $50 million was maintained for GP Respiratory clinics: whose importance I testify to personally as a person whose mother died of Chronic Obstructive Pulmonary Disease after a long and traumatic illness before this was made available.   And since 2021 the Andrews Labor Government has invested over $6 billion in mental health: largely in response to the Mental Health Royal Commission.  This includes the establishment of the new ‘Mental Health and Wellbeing Act 2022’ which will modernise the operation of mental health in Victora, with dialogue and inclusion of families and consumers in decision-making emphasised.

On infrastructure in addition to investments in health infrastructure (hospitals and the like) Andrews Labor also made big investments in public transport which anticipate future need. This includes projects such as the Metro Tunnel, North East Link Program, and West Gate Tunnel – which together have created over 50,000 jobs.  Failing to invest here would come with a huge social and economic cost into the future, with uncontrolled congestion and a decline in the overall quality of the public transport network.

On the other hand, though, it is against these backdrops that the Andrews Labor Government has continued a now long-held Labor government tradition of privatisation.  (acknowledging that 50 year leases are not ‘technically’ privatisation ; though they will effectively operate as such for decades and decades to come)  Amidst a strong sense of irony the Liberals argued in November 2022 that Andrews had raised approximately $20 billion from the (effective) privatisation of the Port of Melbourne, VicRoads,  and the Land Titles Office.   

Consumers will pay the price for this for decades to come. Some of these are now effectively private monopolies in their fields.

But in a seeming Ideological U-turn Andrews Labor also announced the re-establishment of the SECV. (State Electricity Commission Victoria)  Those of us old enough to remember the old SECV may recall a time when energy was provided relatively cheaply ; and natural public monopoly effectively held down cost-structures.  The new SECV will be a substantially different creature – despite the nostalgia.   Beginning with a $1 billion investment, the new SECV will emphasise the building of renewables infrastructure, with (according to Andrews) the creation of 59,000 jobs.  The task will not be the recreation of natural public monopoly , but the re-establishment of a part-public player: which might perhaps be run on a not-for-profit basis – and inject significant competition into the sector.  In this case consumers would stand to gain.  Depending on what the involvement is with superannuation funds, however, there will be pressures to run ‘for-profit’.

In June the Federal Government – in an olive branch to the Greens – announced a $2 billion fund to be provided to the States for the construction of public housing. https://thenewdaily.com.au/finance/property/2023/06/17/labor-pledge-2b-housing/?breaking_live_scroll=1

This was enough to get the Federal Government’s $10 billion public housing fund passed with Greens support for this year. The Greens’ defence of this behaviour was that over the long term a $10 billion fund could not provide enough turn over to substantially increase and improve public housing stock.  But in the future this $2 billion expenditure will have to be renewed every year – or even increased. (perhaps to the vicinity of $3 billion)  This is because State Governments (including State Labor Governments) are pressed for cash and rely on Federal money to get many projects over the line. 

That said, the housing crisis is real, and Andrews Labor’s response has been disappointing on many fronts.  Recently the demolition of 44 public-housing towers was announced – to be replaced mainly by ‘affordable’ and ‘social’ housing (alongside mainly private dwellings) in the form of ‘public private partnerships.’  Social-Housing is ‘broadly defined’ ; and includes so-called public-private partnerships. (which can be light on the public component, and deliver rivers of gold to private investors)  Public land will be made available for private investors in return for a 10% ‘affordable housing component’.  The alternative for developers is to pay a levy accounting for 3% of the project’s worth; then diverted into social housing.

There is a place for ‘affordable’ housing in ‘the mix’ ; but looking to Austria for instance, public housing can be done so much better than this.  In Vienna nearly half of the city’s housing market is covered by co-operatively owned players and city-owned housing.   Not only does this deliver for equity: it provides quality and flexibility. 

Benita Kolovos of ‘The Guardian’ has observed that: “of the 30,000 proposed new dwellings on public land, only 11,000 will be available to public housing tenants.”.  This has led the Greens to brand the policy as ‘the biggest privatisation since Jeff Kennett.’  The continued ‘ghettoization’ of public housing will see it marginalised on an ongoing basis.  To break out of that ‘ghetto’ – and to break prejudices and stigma - public housing needs big ongoing investments ; and it seems now the only hope for that lies in bigger purpose-tied commitments from Canberra.  And this requires Federal Labor to move away from overly-conservative fiscal policy.

Again: State Labor Governments, and State Labor parties – need to be pressing Federal Labor to provide at least $3 billion a year for this purpose.  Andrews Labor’s expansion of the market may increase supply over time, and in-so-doing do something to contain prices. But at the same time quality housing will remain out of reach for many struggling families.  Perhaps if Labor had diverted the $3 billion earmarked for the Commonwealth Games into public housing this would have been more palatable.

 

So in conclusion, there is something of a ‘mixed report card’ for Andrews Labor.  On many fronts – despite absurd jibes about ‘dictator’ Dan (Comparing him to the North Korean despot Kim Jong-Un) - Andrews Labor has proved itself ‘more socially liberal than the Liberals’.  In this day and age that is not all that surprising.  In-so-far as there was a streak of authoritarianism it was only under the unique circumstances posed by Covid 19.  But the structural costs of a suite of privatisations will be passed on to consumers for decades to come.

 

Federal Labor needs to ‘step into the breach’ to remove fiscal incentives for State Labor Governments to ‘sell what’s left of the family silver’ in order to pay for big projects. A good Labor government is one which expands the social wage and welfare state, while also strategically expanding the public sector.  Ideological preference for ‘Small government’ will not do.  (though the source of Andrews Labor’s policy was more pragmatic than Ideological)  Who-ever takes the helm of Victorian State Labor ; and whatever else happens Federally – something needs to change. And hopefully this article is suggestive of where we could start.

 

Dr Tristan Ewins

 

Dr Tristan Ewins is a rank and file Labor member of over 30 years.

 

http s://www.theage.com.au/politics/victoria/bronze-age-how-do-dan-andrews-3000-days-as-premier-measure-up-20230217-p5clb1.html

https://otr.anmfvic.asn.au/articles/budget-delivers-on-andrews-government-election-workforce-commitments

https://www.health.vic.gov.au/mental-health-and-wellbeing-act

https://www.theguardian.com/australia-news/2023/sep/23/daniel-andrews-victoria-labor-government-housing-statement

https://www.politico.eu/article/vienna-social-housing-architecture-austria-stigma/

Australia Day 2023

 

Dr Tristan Ewins

Around about this time of year the nation usually pursues a debate on Australia Day.  What is the Australian identity?  What do we have to celebate?  Is there anything we should regret or mourn?  Is January 26^th really the best date for our national day, or should we reject the idea that Australia’s history only began with colonisation?  After all, January 26^th is the date that the First Fleet arrived in 1788, but indigenous history goes back for some tens of thousands of years.  As such debate on Australia Day also spurs discussion around the formation of an Australian Republic ; on the flag ; on a Treaty and the need for a Voice to Parliament ; and the reality of modern multicultural Australia.

That said, there are things to celebrate in our history which we can construct a national identity around.  Australia played an important role in the defeat of Fascism in World War Two.  The egalitarian spirit of mateship helped the men to persevere during the conflict and sometimes as POWs in Changi and the Thai-Burma railway. The question of the flag is complicated by the fact tens of thousands died fighting under that flag to defeat fascism.  And there are aspects of our working class historical culture which resonate with egalitarianism ; though the Conservatives have worked to minimise the significance of this in our National Identity.

By shifting our national day to the date of Federation we would at least avoid the notion that history began with colonisation.  Though there needs to be simultaneous recognition that indigenous history goes back some tens of thousands of years before that.   Since January 1^st is already a public holiday an additional public holiday would need to be established.  Perhaps this could even be rethemed as ‘reconciliation day’ where we strive to grasp our past and heal for the future.  Such a day could provide focus for discussion on a Treaty ; and once a Treaty is achieved could provide an opportunity to commemorate that achievement.  And to focus on whatever work remains to be done. If a Treaty were established ‘reconciliation day’ could become an annual event.

Australia Day is a time to contest ‘what it means to be Australian’.  The Left has a mission to embed progressive values in our ‘national psyche’. Today is a good day to pursue that mission.   To discuss the Republic and perhaps the flag.  And to pursue far-reaching reconciliation.

Labor's First Budget pitched as "Modest and Responsible' - But more Ambition needed

 above: Federal Treasurer, Jim Chalmers

Labor’s first Budget has been pitched as ‘modest and responsible’, with limited new spending ; and the intent of not fueling inflationary pressures. That said, there are some welcome measures.   $20 billion will be invested towards upgrading the electricity grid ; preparing for a low-emissions future. Promises on Aged Care will be fulfilled, with tougher regulation and an improvement in the wages and working conditions of Aged Care workers. Over $2 billion will go into Education ; with free TAFE, 20,000 university places for the disadvantaged, and money for more qualified teachers and better-resourced schools.  Money will be provided for ‘urgent care clinics’, and reducing the maximum co-payment for medicines from $42.50 to $30. Finally, there will be more support for parental leave and subsidised childcare ; with a plan to promote an increase in housing supply (and hence affordability), as well as an increase in Defence expenditure to over 2 per cent of GDP.  (Herald-Sun 26/10/22)  Though this housing plan appears over-dependent on private investment.

All that said, there are numerous problems as well. Jim Chalmers has flagged possible intervention into the energy market, with power prices set to rise by 40 to 50 per cent.  This will crush struggling individuals and families. Also, Labor is flagging its intention to go ahead with the Stage Three Tax Cuts which will deliver a  $9000 windfall for those earning $200,000 at a cost to the Budget of around $250 billion over 10 years.  Nothing has been projected in the way of energy subsidies, and the price for reining in inflation seems to be falling upon those least able to pay.  Wages are also flatlining, regardless of pre-election commitments to get wages moving.

So – what *should* Labor do?  Some would oppose improvements for those on low wages and welfare as fuelling inflation.   But those people should not be shouldering the burden.  Already the bulk of their income is going towards non-negotiable necessities ; and increases in power costs will challenge their capacity to make ends meet in the most basic sense.  There will be homelessness, skipped meals, and Winters and Summers without heating or cooling. A temporary increase in tax for those on middle and higher incomes could also have an anti-inflationary effect without impacting on the most disadvantaged.  Specifically, temporary tax increases for those on middle incomes could tighten demand significantly.  Without such tax increases, individuals and families will be left to shoulder the burden with higher interest rates, and hence higher home loan repayments.  Some of this will be passed  on to renters as well. The question is: What is the most efficient way of containing inflation? ; and how can this be achieved while lessening the burden on those least able to pay?   Also ; what other measures need to be taken to sustain an improvement in the social wage longer term?  Including the preservation of a truly needs-based National Disability Insurance Scheme. (NDIS) This may mean some other taxes need to increase progressively and permanently.

Over the longer term Labor needs a rethink on tax reform. Ideally the Stage Three tax cuts should be withdrawn completely.  There are so many priorities which demand funding.  But a compromise strategy could be to deliver the same amount of tax relief ; but skewed towards those on lower and  middle incomes.  Median taxable income is just under $50,000/year.  If tax credits are provided for those on low and middle incomes ; relief could be delivered without delivering an expensive windfall for those on higher incomes. By the time the tax cuts are projected to be phased in we will likely be struggling to recover from an inflation-induced slowdown ; or maybe even a recession.  At this point, it makes sense to support the vulnerable and low-paid – as they spend the highest proportion of their income on ‘getting  by’ compared with others.  That is ; they can be depended upon to spend their incomes.

Unemployment is also set to rise to 4.5% over 2023 to 2025.  This begs the question of whether Labor accepts arguments around a supposed Non Accelerating Inflation Rate of Unemployment. (NAIRU) Again ; recession and ‘spare capacity’ are not the only means of containing inflation.  Taxes can achieve this without depending on social misery and wasted human resources.

Also, record profits in the gas industry should be subjected to taxation ; as has occurred in Norway for instance. Those resources properly belong to all Australians ; and any windfall should be shared substantially with the Australian people. This could be redirected to energy consumers with subsidies – especially those on low incomes – while a legislated gas reserve could ensure Australian consumers don’t miss out because of exports and global demand.

Into the future Labor should be seeking to reduce poverty and inequality by boosting the social wage and driving reform of the labour market ; especially for the working poor.  An important improvement in the social wage would be implementation of Medicare Dental.  Earlier in its first term Labor delivered an increase in the minimum wage.  But others on low wages also need urgent assistance.  This is especially the case in feminised industries like early childhood education. Again, any inflationary impact could be countered with strategic and temporary increases in tax.  While impacting ‘the economic middle’ would be regrettable ; the plight of those on low incomes is more urgent ; and Labor needs to prioritise.  

While Labor needs to deliver on promises to improve the Cost of Living, including energy affordability, it also needs to be looking to boost the wage share of the economy. To some extent this should be delivered as a matter of distributive justice ; and not only in return for improved productivity.  In 2018, Jim Stanford explained how the wage share of the economy had fallen from 58.4 per cent in 1975 to 47.1 per cent in 2018. That translated to over $16,000 a year on average per worker ; and $210 billion per year in total.  Not only does Labor need to agitate for improved Awards at the lower end. It also needs to improve workers’ bargaining power more broadly ; and this must include support for pattern bargaining.  Even Secondary Boycott should be legalised in circumstances where the ‘industrially strong’ support the ‘industrially weak’ ‘in good faith’.

Importantly, though, the wage share is lagging in areas like mining ; where regardless of this wages are significantly higher than average.  Profits are that high.  In this case the social wage needs to be factored in ; and again a windfall profits tax ; and a longer-term super-profits tax – could help.   Welfare also needs to be reformed to respond comprehensively to the Cost-of-Living crisis ; including all pensions and unemployment benefits.

Finally, the required strategic expansion of social and affordable housing demands a greater public investment.  While Labor is correct to promote an increase in housing supply in geographic areas of job growth, it also needs to ‘put its money where its mouth is’.

Labor has come to government at an especially difficult time.  But there is a need to deliver on its mandate ; especially for those most in need.  Inflation can be contained without hitting the most vulnerable overall ; and this needs to be Labor’s priority during its first term.

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

 

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

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

Furthermore, income inequality is marked.  ACOSS observes that:

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

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

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

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

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

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

Remembering Mikhail Gorbachev and his Legacy

 

above: Former Soviet leader, Mikhail Gorbachev

Dr Tristan Ewins

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

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

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

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

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

Labor in Government provides Opportunities that Should not be Wasted

 

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

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

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

 

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

 

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

 

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

 

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

Wage Justice can be Delivered While Also Containing Inflation

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

Dr Tristan Ewins

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

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

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

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

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

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

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

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