Advancing Australia: Ideas for a Better Country
By John Watson and Amanda Dunn
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About this ebook
We have the diagnosis, but what’s the cure? In this collection of essays, the country’s best academic minds look at the key issues and chart a way forward. They examine how Australia’s taxation system could be fairer; the priorities in progressing Indigenous Australians’ rights; the absurdity of the constant ‘left versus right’ debate; how to fix private health insurance; and how to settle the conflict between population and migration policies.
Here are innovative and bold ideas to advance Australia.
John Watson
John Watson is Professor of Electrical Engineering and Optical Engineering at the University of Aberdeen, Scotland, UK.
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Advancing Australia - John Watson
Lockie
CHAPTER ONE
Thinking big: What the major parties should do if they win government (and even if they don’t)
Win or lose the next election, it may be time for the Liberals to rethink their economic narrative
Carol Johnson
In the heady political days of late 2018, former federal treasurer Peter Costello argued that the Liberals need to unite behind a clear economic narrative. He claimed that this would avoid Liberal politicians defining themselves on the ‘social issues’ that have divided the government.
However, the ideological problems in the Liberal government go beyond the evident, and electorally damaging, differences over social issues. The Liberals’ economic ideology, which often cuts across their internal division between conservatives and moderates, may also be contributing to their difficulties.
Is it now time for the Liberals to reconsider their free market, neoliberal economic policy narrative? It emphasises lower taxes combined with radical deregulation, privatisation, corporatisation, major cuts to government spending on services and the dismantling of Australia’s century-old industrial arbitration system.
But it is a narrative that contributed to the 2014 budget cuts that helped undermine the Abbott government. It gave rise to the proposed tax cuts for big business that con tributed to the poor results in the 2016 election and 2018 byelections. It also made it harder for the Liberals to accept a range of regulatory policy issues, including the need for a banking royal commission.
Costello’s critics claim that his own tax cuts significantly reduced government revenue. This made it much more difficult for future governments to return the budget to surplus.
Has neoliberalism’s time passed?
The Liberals have always argued that they would be better economic managers than Labor; that they supported individual rights and free enterprise and opposed Labor’s so-called ‘socialism’. Nonetheless, their economic narrative has not always been the neoliberal, free market one that Costello and others have espoused from the Howard government on. The Liberals originally believed in a more substantial role for government.
Labor has been quietly moving away from some neoliberal positions that it embraced during the Hawke and Keating years. For example, it is now more supportive of government regulation and has re-embraced Keynesian perspectives that see a major role for the state in managing capitalist economic cycles.
It has also questioned some neoliberal aspects of past Labor government industrial relations policy, such as an over-reliance on enterprise bargaining, acknowledging that this has contributed to reduced wages and conditions.
The Liberals have introduced some electorally opportunistic economic measures. These include funding for industries in sensitive electorates, energy price measures and backing down on tax cuts to big business that they couldn’t get through the Senate. But they have not undertaken a major reconsideration of their economic ideology despite the related policy problems, from unpopular budget and tax cuts to originally opposing a banking royal commission.
Yet Robert Menzies, the founder of the party, decried laissez-faire economics and argued for more controls, not fewer. He boasted of reading Keynes, given that politicians need to know ‘a great deal about applied economics’.
Menzies championed the role of Liberal administrations in establishing an industrial relations arbitration and conciliation system that gave ‘to organised labour the basic wage, the standard working week, the protection of employees and the enforcement of their legally established rights’. Nonetheless, the Howard government largely abolished such a system in its neoliberal- influenced (and electorally unpopular) WorkChoices legislation.
In short, the Liberals were originally more influenced by social liberalism, rather than neoliberalism, in that they were more willing to endorse state intervention to protect the welfare of citizens and the smooth functioning of markets.
So why might it be important for the Liberals to reconsider some of their economic policy narrative now?
Time for a rethink
Social democrats are fond of claiming that it has been their historical role to save capitalism from its own excesses, including during the global financial crisis. However, social liberals can argue that they have also aimed to do