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Towards a fair, secure and equitable society

When in government Labor has always been at the front with balanced social and economic reform, both nationally and internationally.

    • From its earliest days it sought a fair system for determining wages and conditions, the foundation of a fair economy
    • it was a founder member of the International Labour Organisation (ILO) in 1919. It influenced the structure of the UN and the Universal Declaration of Human Rights
    • it governed Australia through WW2 and the post war reconstruction. The Snowy Mountains scheme and migration being two examples.
    • after 23 years of Liberal rule Labor ushered in: No fault divorce, pulled out of Vietnam and ended conscription, recognised China, established Medibank (killed off by Coalition), social welfare reform, supported equal pay, established Law Reform Commission, Family Court, free university, national sewerage program, voting at 18, Order of Australia.
    • in the 80s and 90s it introduced reforms to the economy balanced with benefits for our citizens, superannuation for all.
    • after Howard Labor said Sorry to the Stolen Generations and established Closing the Gap, handled the GFC fairly, introduced Gonski, NDIS, NBN; in 2009 it proposed an ETS but was stopped by the Greens, but made a carbon tax later.

It is critical in 2018 and 2019 for Labor to clearly outline its balanced economic and social reform objectives. In December it will be the 70th anniversary of the 1948 Universal Declaration of Human Rights (UDHR) strongly influenced by the Australia Foreign Minister and his team.

2019 is the centenary of the establishment of the ILO. Its Global Future of Work Initiative requires all member States to bring together organisations of workers, employers and government to prepare for the coming disruption of technological change.

This year or next there will be a Federal election. A Labor Government must continue this balanced approach to reform. Critical areas for reform are:

    • making a fair compact with our First Nations People
    • urgently addressing global warming
    • reforming industrial relations laws, especially broadening the scope of ‘employee’
    • addressing the issue of the future of work in the face of technological disruption
    • spelling out a vision for the society we want, identifying the revenue required and setting taxation policy to achieve it, to pay down the deficit and when that is done to establish a future fund
    • establishing a federal ICAC
    • resolving the situation of off-shored refugees and developing a regional solution.

 


TOWARDS A FAIR, SECURE AND EQUITABLE SOCIETY

The issue:

The coming  ALP National Conference, the Federal election, the 70th Anniversary of the United Nations Universal Declaration of Human Rights (UDHR) and the Centenary of the International Labour Organisation (ILO) provide an opportunity for the Australian Labor Party (ALP) to develop a succinct statement of the society for which we should aim: a fair, secure and equitable society in which every individual and organisation contributes according to a fair and equitable taxation regime and receives the assistance they need to be a fully functioning member of society; in which representative forms of organisation, such as trade unions, are recognised and encouraged to work ONLY in the interests of their members. Despite the assistance granted to corporations by society (society funds the roads, etc, noted by Barack Obama) they have adopted a principle that their ONLY obligation is to the interests of their shareholders.

This has meant tax avoidance/evasion, out-sourcing, off-shoring, wage theft, precarious work, plant closures, environmental degradation (still the greatest moral challenge of our age) and more. Whereas the concept of the triple-bottom line (social, environment and financial obligations) has been side-lined by the neo-liberal agenda, in the U.S. Benefit Corporations have been legislated (these are a type of for-profit corporate entity, authorized by 33 U.S. states and the District of Columbia that includes positive impact on society, workers, the community and the environment in addition to profit as its legally defined goals). Evidence suggests Benefit Corporations perform better and also better meet the needs of society.

Background:

Australia was once heralded as a social laboratory in which the organisation of workers was a key element for developing fair wages and working conditions. In 1904 the Commonwealth established a body to conciliate and/or arbitrate wages and conditions of workers which established many important advances, a good number of which are, sadly, now defunct. Union officials were virtually 'officers of the court’ able to enter workplaces to check wages books that had to be kept on the premises in English, in ink. In the current age Australia lags far behind more progressive and egalitarian lands. The father of the basic wage (see UDHR note below), Justice Higgins, established the idea of a basic wage to which each worker was entitled taking into account:

rent, food, and fuel, light, clothes, boots, furniture, utensils, rates, life insurance, savings, accident or benefit societies, loss of employment, union pay, books and newspapers, tram or train fares, sewing machine, mangle, school requisites, amusements and holidays, liquors, tobacco, sickness or death, religion or charity …  (necessary to rear) a family (of five, in), sobriety, health, efficiency, proper rearing of the young, morality and humanity,

with extra payment for 'skills'. These latter were not narrowly defined as resulting from a formal qualification but, for example, recognised skills of

exceptional heart and physique, as in the case of a gas stoker, exceptional muscular training and power, as in the case of a shearer, exceptional responsibility, e.g., for human life, as in the case of winding or locomotive engine-drivers.

Now ‘employees' are narrowly defined so that contracting out and casual work encourages sham employment contracts, in which wage theft, and insecure, unsafe and unhealthy work are the norm. The result is that a significant proportion of the  ‘workforce’ (not, you may note, the 'employee force') is ripped off, intimidated, and in a word made insecure. Former High Court Justice, Mary Gaudron argues that the definition of ‘employee’ is too restrictive, narrowing access to Fair Work Australia and other relevant legislation.

International aspects:

On 10 December 1948, with the vital assistance of the Australian Minister for Foreign Affairs, H. V. Evatt and his staff, the United Nations passed the Universal Declaration of Human Rights. The General Assembly, in doing so, limited the powers of the US, USSR, UK, France and China (the Security Council). A number of its clauses deal with individual rights of which, for workers, freedom of association, work and a ‘standard of living adequate for the health, and well-being of himself (sic), and of his family, including food, clothing, housing and medical care and necessary social services’ were key requirements (note the similarities to Higgins’ criteria).

Today Australian industrial laws breach a number of clauses in the UDHR: 20, 23, 24 and 25. They also breach numerous UN-based International Labour Organisation (ILO) Conventions and Recommendations. In the immediate post-WW2 era full employment meant 3% unemployed, secure employment meant casuals received higher wages to offset the insecurity of the job, lack of holidays and sick leave. Many awards provided for a casual worker to be made permanent after a certain period of full-time working.

The ILO has 187 member States and is a unique UN body in that it comprises representatives of workers, employers and governments.  Next year (2019) is its centenary. As part of its celebration next year it has commissioned the Global Future of Work Initiative, recognising the prospect of serious disruption in work given new technologies, shifting bases of production and access to education. Greg Vines, an Australian, is Deputy Director, on the Future of Work Initiative and was in Australia last year to see how the forums mandated under the initiative are progressing. Given the attitude often expressed by the Coalition about UN bodies and trade unions it would be interesting to know what, if any, meetings have been held and whether any progress has been made.

The coming election:

The coming election makes it urgent for the Parliamentary Party to identify the core elements of a strategy to ensure Australians live in a FAIR, SECURE AND EQUITABLE SOCIETY. It is vital that all Party propaganda supports that objective. We believe that he Party should demonstrate clearly in what ways Australian society would be different under Labor. A fair and equitable society would include acceptance by all that we have to pay for what we want; that taxes are the mechanism for funding that objective; that everyone and every corporation should pay their fair share with minimal deductions in which the objective is to pay for our societal wants; actually pay off the National Debt; and develop a sovereign debt fund. After 117 years it is time to review the Constitution. It was written by colonial politicians who, following the US model, turned over limited powers to the Commonwealth. In fact some thought the Commonwealth Parliament would need only to meet for a few weeks each year once it had established White Australia, tariffs and defence. There is not a single issue that is not bedevilled by the Constitutional division of powers.

We believe that relations with the First Nations Peoples should also be a major element of constitutional review. The Party must formally accept the proposal made in the Uluru Statement from the Heart and commence, in the pre-election period, consultation with the Uluru representatives about the practical implementation of the proposal. Constitutional renewal should be a key objective to support the achievement of a FAIR, SECURE AND EQUITABLE SOCIETY.

We believe that it is also past time for the Party to accept that the current treatment of refugees who reach our shores is unconscionable. Accepting we have an obligation to protect borders and that there are limits to the immigrant intake, we should work for:

    • the establishment of collection centres in transit countries funded by participating host countries where there is humane treatment and education,;
    • community based reception centres in host countries should be established to welcome and help to settle newcomers, with our intake managed by UNHCR.

The 2018 National Conference has the opportunity to weaken the constant demonisation of trade unions. But the process by which this demonisation may be weakened requires a thorough review of the operations and actions of trade unions, especially of those affiliated to the Party. Some union officers have clearly not acted in the interest of members, but of their own advancement. This review should also deal with the question of the continued value to both the Party and unions of affiliation. In many countries with strong trade unions such a separation has benefitted both.

If affiliation is to continue, we believe that steps should be taken to ensure that affiliated unions (which represent currently about 8% of the workforce) have no more than 20% of the say in various Party bodies. The Conference should turn its attention to mechanisms to strengthen the involvement of Party members, and members of affiliated unions, in all levels of decision-making.

Another key objective should be common rules and procedures throughout the Party, not varying by State or Territory. A particular issue is the role of members in the pre-selection of Senators. Rather than an Australia-wide mechanism involving members in pre-selection each State branch interprets the mandate in their own way. The ACT Branch being the most progressive.

The most pernicious aspect of trade union demonisation is the constant attack on 'the union superannuation funds'. These 'industry superannuation funds' are managed jointly by representatives of unions and of employers, i.e. they are jointly managed funds not union-run funds. What is most egregious about this aspect of demonisation is that the industry funds perform, on average, better than for-profit retail funds. Unlike industry funds for-profit funds are run by unknown directors appointed by banks and insurance companies.

Finally, it is no longer possible to claim that there is no corruption in the Federal sphere. Surveys of Australian public servants indicate that many have seen corrupt practices in their workplaces and in government. A National Independent Commission Against Corruption must be high on Labor’s agenda as Bill Shorten has indicated. It must have, at least the powers of the original NSW ICAC and must be open and public in its investigations. There is no place for secrecy in such a body.

Recommendations:

The ALP should, therefore:

      1. prepare for, widely disseminate and celebrate on 10 December 2018, the 70th Anniversary of the UDHR. Identify, and where appropriate, remove legislation that offends UDHR and ILO Conventions.
      2. prepare for, widely disseminate and celebrate the centenary of the International Labour Organisation, review what progress has been made in Australia on the ILO’s Global Future of Work Initiative, and press the unions, employers and government to be more active in support of the Initiative.
      3. review the current Federal and State legislation affecting the right to organise and the definition of a ‘worker' rather than an 'employee’ 'to any person who for monetary reward provides work and/ or personal services to or for the direct or indirect benefit of a corporation'. A key objective of this review being to establish nationally consistent workplace rules (something for which all corporations, especially multi-national ones, call).
      4. develop a code of conduct to apply to all ALP members, trade union officials and officers of corporations which ensure that the best interests of members, shareholders and our society are protected.
      5. begin a campaign calling for regional meetings throughout the country to review the creaky 117 year old Constitution.
      6. draft legislation to enable and encourage ‘benefit corporations’, if not requiring all corporations to become benefit corporations.
      7. review how industry superannuation funds may be protected from mis-representation and are recognised and encouraged, while also ensuring greater transparency is required of retail funds, including naming directors.
      8. formally accept the proposal made in the Uluru Statement from the Heart and commence pre-election discussion with Uluru representatives about practical steps to be taken.
      9. undertake a root and branch review of the Party’s structures and procedures with a view to increasing the involvement of members in decision-making, candidate selection, policy making; restricting the influence of affiliated unions to 20%; ensuring common rules and procedures at all levels.
      10. pursue a more assertive approach on climate change.
      11. return to the negotiation of regional organisation on refugee policy.
      12. establish a national ICAC with real power, transparent in its investigations.

 

National Conference candidates 2018

Three members of Open Labor, James Button, Kath Cozens and Joel Kennedy, are running for delegate positions at the ALP National Conference in July. If you’re a member of the party in Victoria, please consider giving them your vote.

The times present a great opportunity for Labor. More and more people long for a more equal society, less divided by wealth and privilege and able to give all its members a chance to thrive. 

But as senior federal MP Mark Butler said in a speech in January, and as party leader Bill Shorten said in a speech in 2014, Labor cannot make the most of its opportunities unless it becomes a bigger party, with a much broader base among the population.

A bigger party must be a more democratic one. While factions will always have a place in the ALP, a party that is secretive, closed to outsiders and dominated by factional intrigue will never appeal to a wider public. Ordinary Australians have to see that joining the ALP will give them a real say in its decision-making.

If you are an ALP member, for the first time you have the chance to vote in statewide ballots to elect National Conference delegates. Victoria will provide 86 of the 400 delegates, with half elected by ordinary members and half by affiliated unions. Ballot papers go out at the end of this week.

Briefly, our three candidates are:

James Button: I am a member of the Northcote branch and have been a member of the party since 2011. I was a journalist at The Age for 20 years, then for a year worked as a speechwriter for Kevin Rudd when he was Prime Minister, an experience I describe in my book, Speechless: A Year in my Father’s Business.  I was one of the founders of Open Labor in 2013, and am keen to work with anyone, inside and outside factions and the party, who is committed to ALP reform.

Kath Cozens: I am a high school English teacher at a terrific government school.   I have been a member of the party since 2010, and I joined because I realised that sitting on the sidelines, drinking coffee and complaining about everything wasn't a morally sustainable position. I have never been part of a faction but have been very active supporting Open Labor and other non-aligned movements, and I am hoping that I can represent the interests of ordinary members like me in this important forum.

Joel Kennedy: I am a current state conference delegate, and have actively pursued party reform at two conferences. Giving ordinary members a say in electing the leader in 2013 inspired me to join the party, as this was a sign that it was moving toward democracy, rather than opaque factional control. Reform stalled at the 2015 national conference, so it's crucial to send as many non-factional delegates to Adelaide as possible. I am a Chartered Accountant working in the energy industry, and belong to the Albert Park branch.

 

If elected, Open Labor delegates will work to:

∙      Give ordinary members in each state and territory at least 50 per cent of the vote in the election of Labor Senate and state Upper House candidates. This is a vital reform to increase the accountability and calibre of our representatives in the Houses that play a big role in determining policy.

∙      Increase the vote of ordinary members in elections for party leaders, MPs, office holders and delegates.

∙      Involve registered ALP supporters, as well as members, in party decisions and policy development.

∙      Give members of trade unions affiliated to the party a chance to join the party as individuals, for a nominal sum, and vote in party elections.

∙      Introduce secret ballots for all internal party elections.

∙      Make party decision-making more transparent by requiring it to publicise its structures and decisions, and the reasons for those decisions, so that ordinary members and the public can understand how the ALP works.

∙      Give the directly elected National President and Vice Presidents voting rights on the National Executive.

 

We will also support policies to fight climate change, create fairer tax, wage and welfare systems, increase educational opportunity, fight discrimination based on gender and sexual preference, and implement the Uluru Statement from the Heart to ensure Indigenous people are represented through a proper consultative body.

This list is not comprehensive or final: if elected we will hold a public meeting before National Conference to gauge the views of supporters on policy and party reform. We will also report back to supporters, both through a detailed report on conference, and through a second public meeting if there is demand for it.

The Independents are also running four candidates: Eric Dearricott, Linda CondonJamie Gardiner and Pauline Brown. We will work closely with these non-aligned candidates, and we urge you to also give them your support.

The time to open and strengthen our party to meet the challenges and exciting opportunities ahead is now. Please give Open Labor and other independent candidates your support.

GFC ten years on - take homes from the Ball, Swan & Taylor Melbourne event

22 August Melbourne Town Hall:  There were 250-300 ALP sorts doing some hard listening at The GFC 10 Years On event presented by the Australia Institute and Guardian Australia.  It was a good talk, despite gravel flu voices from both the Lenore Taylor and Wayne Swan, who soldiered on regardless. The conversation (with questions from The Guardian's Lenore Taylor) went something like this:

It’s definitely OK to talk about tax and a bigger state

2 Aug: It was a dark and stormy Melbourne wintry night, but over 100 ALP stalwarts attended a Fabians led rigorous tax event. Quite a few came along with their own proposals in hand.

MPs Terri Butler and Andrew Giles discussed tax reform with Alison McClelland (former Productivity Commissioner). Some take home stories were:

  • Tax is about how we see ourselves in relationship to others (present and future generations). 
  • Tax must be central to our core vision.
  • Inequality is getting worse. 
  • We think progressive taxes are good. We must be bolder at telling this story.
  • Inequality is in particular worsening in Anglophone countries, due to our tax policies. Inequality is bad for wealth for all.
  • A lá Thomas Picketty - power reproduces; rising asset prices result in an increasing accumulation of wealth and falling share going to wages and increases inequality; the relationship between social, political and financial inequality is tight.
  • Our moral position is key. Exactly what tax mechanisms will bring about a fairer Australia is a technical question. It must include the unions.
  • The ALP is doing good policy work on negative gearing, deductions cap for income management, trusts crackdown.
  • Avoid the language of the right. Stop talking about tax payers’ money. Talk about public money.
  • Avoid Rule-In-Rule-Out rules.  We need discussion and debate, not confected outrage.

Thanks to the Fabians, as always, carving out space for social democratic discussion and policy development.

Terri Butler is the QLD Federal Member for Griffith; and Shadow Assistant Minister for Family Violence and Child Safety; Universities; and Equality.

Andrew Giles is the VIC Federal Member for Scullin (north outer metro region); and Shadow Assistant Minister for Schools.

Download Terri and Andrew’s essay.

Report from NSW Open Labor July event

The Open Labor NSW event held at the Toxteth Hotel in Glebe on Wednesday 27 July provided participants with both information and conversation. It's the way we hope to conduct ourselves, always.

Thirty one Party members and supporters assembled to hear Tom Bentley review Labor's progress since the 2013 election debacle, and the issues and challenges for the current Parliament. Tom was deputy chief of staff to Prime Minister Julia Gillard, and from 1998 to 2006 he was director of DEMOS - described by The Economist as ‘Britain's most influential think tank'.

Tom commenced by noting that the 2014 Budget was a galvanising moment for both the Party and unions. There was a coherent response from both. From the Party the response was policy rich, emphasising the visceral community response to the Budget consequently resonating with the electorate.

A lesson learnt from minority government was the need for a disciplined, collaborative approach.

Early introduction of policy pitched to long term priorities, avoiding the small target strategy, worked to make Labor competitive. Stagnation in wages, the electorate’s commitment to policies such as Gonski and NDIS, an ageing population, recognition of rising inequality, concerns about unsustainable climate policies fitted Labor’s strategies.

These and other issues have been bubbling to the surface calling for renewal of progressive politics and commitment to ethical and ideological principles. The campaign was disciplined, mobilised members and unions and combined grass roots and social media.

Following questions to Tom, those attending were invited to converse on issues of interest with a focus on pre-selections and the role of unions in the Party. There was a constant hubbub of conversation and, even after the event was would up discussion continued for some time. Discussion was carried on around the four tables with about 8 participants to each table. Their thoughts were expressed by the groups on butcher's paper.

Group 1 began their discussion by looking at underlying threats and opportunities to be found in issues such as climate change, globalisation and geopolitical tensions. Associated with these were human rights issues expressed in income inequality. By taking up these issues we would be challenging neo-liberal ideology.

The group saw potential policy responses in re-establishing the concept of, and pursuing, a social wage. This could be done through protecting and improving Medicare, education and welfare services, and engaging with particular and pressing issues such as combating domestic violence.

They discussed responses to be made through industry policy. Opportunities were to be found in the field of alternative energy, in start-ups and in supporting and encouraging small business. They saw other possible responses in industrial law and taxation.

They concluded by considering party reform. This would involve restructuring various party forums, broadening branch life, establishing and strengthening networks and ensuring that the Party in its publicly espoused policies and in its internal processes was committed to a genuine form of democracy.

Group 2 focussed on three issues requiring action: the lack of young people in the Party; the influence of the unions in the Party; and lacklustre leadership.

Younger people are not interested. They have no big block of influence in the Party. We need to recruit young people, renewing the Party branch by branch. We should recruit youth by visiting schools and youth clubs, and engaging in and promoting community activities.

The Party should preserve union affiliation. Unions are well organised bodies and the Party needs their support. But there is the question of their influence. They have 50% of the say but represent afar smaller percentage of the workforce.

The leadership needs to improve its relationship with members. They should ensure that democratic principle and practices inform all Party activities, so that, for example, Senate candidates would be elected by members.

Group 3 engaged in a blunt assessment of the Party. The Party’s language is a turn-off. The leaders of factions and other power brokers look like a bunch of bullies. The Party has lost its local roots. At times there seems to be zero differentiation between Labor and the Liberals. Only 17% of the workforce is unionised, yet the unions have what amounts to a controlling influence in the affairs of the Party.

The group asked: “How do you build a relationship with the politically moderate?” and proposed engaging people through social media or webinar forums. This way the Party could reach single parents, young people, shift workers and people living in remote communities. The Party needs to confront and take on board issues that are of importance to the general population. These issues include the environment, the protection of the Great Barrier Reef, and putting a price on carbon. Social justice should be pursued by providing universal health-care, well-funded public education, child-care, parental leave for both parents, and the funding of the arts.

NSW Open Labor reviews the election campaign

NSW Open Labor member Roger Tonkin reviews the election campaign

 

Labor’s 100 Positive Policies

Labor's willingness to take risks and to focus on positive policies has been a refreshing change from the small target strategy and bitterly adversarial election campaigns that we usually get from Labor and the Coalition. That approach together with the increasing sense of disappointment in the electorate with Malcolm Turnbull goes a long way to explain why Labor's stocks and Bill Shorten’s stocks have improved dramatically over the past six months.

 

Economic Management

In this campaign Chris Bowen has emerged as one of the most economically literate Shadow Treasurers Labor has produced. He out-campaigned Scott Morrison on economic management. Chris Bowen was upfront with the electorate and analytical when he needed to be. By way of contrast, to deflect difficult questions, Scott Morrison frequently resorted to bluster, obfuscation and bullying in his trademark machine-gun style. If and when Chris Bowen gets the chance, he will be a superb Treasurer. Like Keating he has the capacity to think outside the square, to develop and extend Labor policy, and to explain Labor policy in ways that lower and middle income earners can understand and accept. In this campaign, like Keating, he demonstrated that he will be an excellent economic manager, an innovator, and an educator.

 

Medicare/’Mediscare’

I support the emphasis in the campaign on saving Medicare. However, Labor could well come to regret the strategy of the last two-three weeks of claiming that the Coalition will privatise Medicare, for two reasons.

First, it drowned out any discussion of other aspects of its 100 positive policies. And second, the ‘mediscare’ claim by Labor that the Coalition will privatise Medicare, without any proof to substantiate that claim, was a disgraceful example of over-reach and distortion. To persist with that claim after Turnbull emphatically stated that the Coalition would not privatise Medicare, and without being able to provide any evidence to substantiate that claim, left Labor open to the accusation that it was lying. Privatising Medicare means selling it lock, stock and barrel to the private sector. It does not mean forcing private individuals to pay more for medical services, and it does not mean forcing individuals to take out Private Health Insurance. The electorate is fed up with lies. It is fed up with politicians and political parties that lie, misrepresent and distort. After the 2010 election Abbott was able to damage Julia Gillard irreparably with the claim that she had lied when she stated there would be no carbon tax under a government she led (even though she had not lied).

After the 2013 election Labor was able to damage Abbott irreparably with the evidence that he had lied when he stated that there would be no cuts to health, no cuts to education and no cuts to the ABC. What Labor has done is ensure that every day from now until the next election the Coalition will attempt to discredit Labor with its ‘mediscare lie’. With this ’lie’ Labor undid the gains it had made in building trust with the electorate. The constant reference by the Coalition to the record high bulk-billing rate of 85% as evidence that its health policies would not damage Medicare was never answered adequately by Labor, when it could have been answered and should have been answered. The reference to the record high bulk-billing rate was always an attempt to deflect Labor from its criticism of the Coalition’s attempts to white-ant Medicare. Labor can justifiably claim that the Coalition has form in trying to destroy Medicare, and that even though the bulk-billing rate is at a record high, the Coalition’s policies will seriously undermine Medicare by forcing patients to pay, or to pay more, for medical services, or even lose services. That is all Labor needed to do. The ’lie’ was not necessary. In defending Medicare, Hawke went as far as it was possible to go: “you don’t set up a task force to investigate privatising Medicare unless you intend to do so”. Hawke adroitly exploited the evidence of an intention to privatise Medicare, but he stopped short of stating that the Coalition will privatise Medicare. Hawke did not lie. Labor did.

 

Housing affordability

I support Labor’s policy to restrict negative gearing to new housing stock, and to increase the tax rate on Capital Gains. Labor argued initially that this would help make housing more affordable for first home buyers by making houses cheaper. For housing to be affordable, house prices need to fall. However, the evidence from its own modelling indicated that the reduction in house prices would be small. Labor also found itself having to defend its negative gearing policy from a dishonest Coalition scare campaign that the housing market would collapse and that the value of houses for low and medium income mum-and- dad investors and home owners would plummet. Labor never managed to reconcile its policy objective of making houses more affordable with the evidence that the fall in house prices would be small. The best it was able to say was that the rate of increase in house prices would be slower.

 

Labor’s Small Business Policy

Two weeks before the election Labor announced its small business policy in which it proposed a small business employment subsidy. In the furore over Medicare that drowned out any focus on Labor’s 100 positive policies, the media did not give this policy the exposure and the analysis that it warranted, and Labor made no attempt to explain or to promote the policy. Labor consciously brought this situation on itself with its ‘Mediscare lie’. That was unfortunate. Even though Labor’s Small Business policy has all the earmarks of an after-thought and as an attempt to dent the impact of the Coalition's Jobs and Growth mantra, the policy has legs. It is well targeted at under-25s, at over 55s seeking to find a job, and at parents attempting to return to the labour market. It involves costs in terms of increased expenditure, but it is claimed to boost employment to the extent of 30,000 full-time jobs each year. In economic terms the policy has multiplier effects which claw back some of the costs as well as the obvious savings to social welfare expenditure (particularly expenditure on Newstart). Together with its Education policy, Labor’s Small Business policy could be argued, with some credibility, to be part of Labor's plan to boost jobs and growth. Labor failed to argue that case.

 

Budget Repair

Very early in the campaign, and even before the election was called, Chris Bowen stated publicly that it was Labor’s aim to protect Australia’s triple-A credit rating. Having set that as a Labor policy objective, Labor had to ensure that the credit-A rating was not put at risk with its budget and debt strategy in both the short to medium run, and in the long run. Its 10 year policy projections did so, but its 4 year projections of bigger budget deficits than the Coalition’s did not. That outcome could have been avoided, but if Labor did not want to make the necessary changes to its policies, the economic argument for those large deficits needed to be defended vigorously on sound economic grounds. They were not, or they were not defended vigorously enough. Very few politicians or political commentators in the media fully understand the difference between projections and forecasts, the role of assumptions and scenario analysis in policy simulations, and the legitimate role of these techniques in comparing the impact of competing macro-economic policies over both the short to medium run and the long run. Labor needed to explain how crucial these techniques are in evaluating and comparing the Coalition’s and Labor’s economic policies and how Labor’s policies achieve budget repair in an acceptable time frame. It did not.

The Coalition relied on its schedule of tax cuts to business over 4 and 10 years to stimulate growth and to achieve budget repair, a strategy referred to during the campaign by Labor and by some commentators as “trickle-down” economics. The major weakness of this strategy for the Australian economy is that a significant proportion of the tax cuts, of the order of 30%, is lost to large foreign corporations. That is, there is a significant leakage of the stimulus out of the domestic economy, but an alternative ‘trickle-up’ set of policies exists which do not give rise to leakages from the domestic economy anywhere as large as 30%. That alternative involves a direct stimulus to demand in the domestic economy, e.g. via income tax cuts to low and middle income earners or infrastructure investment. This alternative is more commonly familiar to economists as a Keynesian demand stimulus. In a period of low inflation as exists now in the domestic economy, that alternative is a valid feasible policy option. Labor’s infrastructure and education policies would provide a stimulus to domestic demand and economic growth, but by themselves they fall short of what is required to avoid increasing deficits between now and the next Federal election due in 2019. Labor could have and should have argued the case against the Coalition’s ’trickle-down’ tax cuts to business in favour of a more ambitious ‘trickle-up’ stimulus over the short to medium run. It did not. In the current low-inflation circumstances, if it had done so, it would have been able to avoid larger deficits than the Coalition’s over the first 4 years of the forward estimates, and quarantined itself against any scare campaign from the Coalition and conservative commentators in the financial media that its economic policies would put Australia’s triple-A credit rating at risk.

 

Debt

The Coalition constantly raises the spectre of an increasing interest burden on future generations arising from government or public sector debt. The Australian public can be forgiven for believing that the Coalition would only ever be happy if public sector debt is zero. There are several things that need to be understood about public sector debt. First, it is true that a large part of the interest burden falls on future generations. Second, that Australian’s public sector debt is low when compared with other G2 economies. Third, that some level of public sector debt is necessary for monetary policy to be a viable option. These things are well understood by the financial sector, if not by the general public. What is not so well understood, except by economists, is that public sector debt has a legitimate role in stimulating economic growth. Debt financing of current expenditure (e.g. social welfare payments) is acceptable only in very rare circumstances (e.g. during the GFC).

However, debt financing of capital expenditure is a valid economic option where future generations benefit from that expenditure (e.g. expenditure on infrastructure). Labor needed to explain the legitimate role of debt financing of capital expenditure, and it needed to ensure that we move as quickly as possible to a situation where debt is not used to fund current expenditure.

As far as I am aware, the distinction between capital and current expenditure was not even mentioned during the campaign, or in any recent campaign where public sector debt has been an issue. If Labor is ever to rid itself of the perception that the Coalition is always likely to be a better economic manager, there is a clear need for it to educate the public about the legitimate role of debt financing of capital expenditure, and it needs to ensure that in future it uses debt only to fund capital expenditure.

 

Union Thuggery and Lawlessness

The Coalition was able to link the Labor Party with examples of Union thuggery and lawlessness.  

In promoting their policy of restoring the ABCC, one of the triggers for the Double Dissolution, they referred constantly to 100 unionists facing over 1000 criminal charges, and they successfully characterised Labor’s opposition to the restoration of the ABCC as condoning Union lawlessness. Labor needs to demonstrate that it is serious in opposing and stamping out thuggery and lawlessness in the Unions. It is not enough to merely state that Labor has zero tolerance for unacceptable Union behaviour.

 

Roger Tonkin

NSW Open Labor member

5/07/2016

Time for a new consensus

Tom Bentley (one of Open Labor's founders) and Jonathan West have released Time for a new consensus: fostering Australia’s comparative advantages, a paper which offers an in-depth and insightful analysis of the Australian political and economic landscape.  

They investigate the growing sense of stagnation in Australia’s approach to public policy and economic reform, and argue that the current sense of political inertia comes from the fact that the whole discussion is taking place within the parameters of a political consensus that was forged in the 1980s, and which has now passed its use-by date.  

You can read it here as a PDF, or download it for ePub or Kindle.

NSW Open Labor on the election

Now is the time

This is a critical moment in Australia’s political history. A historical federal election is looming. The electorate is cynical of politicians. The current government is hustling us towards the inequalities and dislocations of a US style of society under the pretence of ‘small government’ and a ‘free market economy’. We need your help to expose this subterfuge and to ensure we move towards a fairer more equitable Australia.

Our key vulnerability

The ALP was established to improve the lot of the vast majority of Australians, so to demonstrate this, we have to have a genuinely engaged and enthusiastic membership – not a disenfranchised and dispirited one. This is Open Labor’s agenda. Open Labor is a strong presence in Victoria and a developing presence in NSW.

At present all the membership gets are constant exhortations from the top down, to promote policy positions they have not been involved in developing.

Seize the moment

There is hope. The long election period gives us an excellent opportunity to highlight the need for internal party reform. To overcome electorate cynicism and to differentiate us from other Parties, the Australian Labor Party needs to show its true colours through what it promises and how it behaves i.e. both policy and party reform.

During this crucial period, when the electorate is more engaged by politics, and taking more notice of us, the Party leadership should commit to introducing all the reforms proposed by the Bracks/Carr/Faulkner Review via a wide ranging consultation with members and supporters. Such a commitment would demonstrate how we will behave as a Party in the future. If we are to be trusted we have to show we will be an open, honest and transparent Party - and that’s how we should promise to be in government.

Such an approach would be consistent with a party culture based on:

Values: committed to fairness
Policies: delivering fairness
Financial management: enabling fairness Party governance: ensuring fairness

Make a difference

Open Labor NSW conducted a well-attended and stimulating Fringe Event at the February 2016 NSW State Conference. This involved a conversation with Rebecca Huntley, a well-known social researcher and David Hetherington of Per Capita, a progressive think-tank followed by a Q&A.

We videoed the event and now have released it through YouTube. We have edited it into a full version which runs just over one hour with lots of questions and a shorter version which is Rebecca’s initial presentation, a bit short of 15 minutes.

The focus of the conversation was whether Party reform mattered to the electorate. Rebecca explained the distinction between polling which asks questions of interest to the pollsters vs more in-depth, open discussion. She made the point that Party reform is never likely to be high on the electorate’s priorities. But, a Party which seems to allow corrupt, bullying tactics, and which pre-selects poor candidates has an additional hurdle to overcome when the elector considers the Party’s capacity to deliver on the issues which have higher priority.

Rebecca also stressed that support for Rudd and the Party fell dramatically after he dropped the Emissions Trading Scheme. The ETS was not high on the list of electorate priorities but by walking away Rudd lost what had made him electable: that he believed in something. It was that he appeared to walk away from his beliefs that lost him support. Malcolm Turnbull’s honeymoon seems to have ended on the same basis.

Take action

Please watch the videos and pass the link to others who may be interested. Also keep an eye on the Open Labor website (openlabor.net.au) for developments, in NSW.

The full conversation: https://www.youtube.com/watch?v=F5AnEq-nxJY

Rebecca’s initial address: https://www.youtube.com/watch?v=r6gwDHYAbH8

Some observations about Trump, Sanders and the radical moment

In case you missed our last meeting, here are the opening remarks from the chair, Martin Kamener:

 

At Open Labor we are seeking the renewal of the Australian Labor Party and a more open, optimistic and decent politics in Australia.

We want an open Labor Party: open to change, and open to new ideas.

For all that it has achieved over the years, the ALP has in recent years struggled to find the ideas and ideals needed to inspire Australians. Inertia and entrenched self-interest are powerful forces inside the party, as are disengagement and cynicism outside of it, but at Open Labor we believe that in the widespread despair with our politics there lays an opportunity.

Which brings me to tonight’s meeting, its central question, a truly Open Labor type of question, “what does the radical moment, represented by the rise of Trump, Sanders and Corbyn mean for the ALP?

In trying to make sense of this radical moment, I am reminded of Alice trying to decipher her new world after having gone through the looking glass.

Definitions that once seemed certain are suddenly no longer so.

Assumptions which underpinned our political sub-conscious cannot now be assumed, some things that were deemed Left, might now perhaps be Right and vice versa.

And suddenly we find ourselves asking do Left and Right have any meaning in the 21st Century?

In fact much of the political discussion in this radical moment is like having a discussion at the Tea Party with The Mad Hatter, the March Hare and the Cheshire Cat? 

Different as Trump, Sanders and Corbyn might be, they are all a result of this radical moment that is shaking the political systems of many countries, disrupting normal political business and challenging mainstream parties to justify their existence into the 21st Century. The ascendancy of each of these politicians is a reflection of community concerns at the rapid pace of social, economic and cultural changes that is challenging our daily lives.

And in this rapidly changing political world, people are clearly asking new questions, questions which the traditional mainstream politics of Left versus Right is struggling to resolve itself, let alone reassure anxious voters that they may have an answer.

So how does a "mainstream" political party like the ALP find the right response to this radical moment?

Rebecca Huntley on Australians' attitudes to politicians and politics

Rebecca Huntley is one of Australia's most respected social researches, and a good friend of Open Labor.  Here is the footage from NSW Open Labor's state conference fringe event, where she and David Hetherington from Per Capita discuss the suspicion, indifference, nostalgia and optimism that Australians have felt about our leaders in the last fifteen years.

Rebecca's opening remarks:

Watch the full conversation here: