Australian Politics

Are We Going To Keep Pushing Our Luck?

By New Matilda

September 18, 2013

This is an edited extract from Miriam Lyons' introduction to Pushing Our Luck.

The 2013 election season felt disturbingly familiar to anyone who was paying attention back in 2010.

One Prime Minister replaced with another on the back of bad polling? Check.

New Prime Minister waters down a controversial tax and creates a big hole in the budget? Check.

Last-minute plan to stash asylum seekers somewhere out of sight and off the front pages? Done.

Opposition leader promises to axe the tax, stop the boats, and balance the budget, and then makes those same promises, over and over again? Yep.

Our public debate is not a civilised contest over policy options but a bare-knuckle boxing match between populist politicians, and the political tide seems to be turning against attempts to put long-term social goals ahead of short-term individual ones. But the contributors to Pushing our Luck argue that, despite appearances, we have not yet reached the peak of Australian progress. Building a society that is more fair, sustainable, prosperous and cohesive than the one we live in today is not just a nice idea, but an achievable one.

The title of this book is both an invitation and a warning. An invitation to take the courageous steps necessary to make a good country into a great one, and a warning of the consequences of coasting on the back of past achievements. The fear that Australia’s good luck will run out if we push it too far can be so paralysing that we neither share it fairly today nor do what it takes to make it last.

In many cases, we’re running down our inheritance, neglecting public assets that took decades of cooperation and hard work to build – from world-class health and education systems to workplace relations that once had others calling Australia a workers’ paradise. But they also show that the political constituency for a more egalitarian approach is strong, and would have serious practical advantages.

Australia is one of the most prosperous countries in the world. We rank near the top of the United Nations’ Human Development Index, based on our levels of health, education and income. The Economist “Intelligence Unit” rates Australian newborns as the second-luckiest babies in the world. It’s time to decide what to make of our status as the rich kid on the block. Do we want to be the world’s Gina Rinehart – eyes only for the next quarry, squabbling with the kids over the inheritance, lecturing those less fortunate on why they deserve their fate?

If our nation were on its deathbed, with the extended family gathered around, what would we be proud of, what would we regret? Would we be passing on a rich legacy, like Norway, or would we have frittered it all away, like Nauru? Would we wish we’d spent more time and effort on the things that really matter?

It used to be said that when America sneezes Australia catches a cold. As the global financial crisis took hold, America and much of Europe came down with swine flu and Australia got a mild case of the sniffles.

Our economy is heading for 22 years of consecutive growth, and unemployment is low. Three in four Australian adults are on the global rich list; counted amongst the world’s top ten per cent of wealth owners. Australia’s economic growth outstripped that of most other developed countries over the past 25 years and came with the third-lowest public debt. The average net disposable household income in Australia is the fifth highest in the world, and we have the have the highest minimum wages in the world. Labor was the lowest-taxing government since the early 1990s. Over its time in government interest rates averaged 5.42 per cent, compared to an average of 4.50 per cent during the Howard government’s time in office.⁠

But we seem to be suffering from a sort of reverse anorexia. The fatter Australia’s economy gets, the more Australians talk as if we’re starving to death. There is a big gulf between the views of Australians who answer surveys on consumer and business confidence and the views of economists in the International Monetary Fund, the OECD and ratings agencies.

We may even be overtaking the Poms in the misery stakes, with one survey finding that we rate our own wellbeing much lower than people in the UK. This is quite an achievement at a point when the Cameron government has responded to their flatlining economy with savage spending cuts and the unpopular “Big Society” policy of privatising everything that isn’t tied down, including the much-loved National Health Service.

So what have we got to complain about? Find Australians defending their right to whinge about the economy and they’ll probably point to the rising cost of living. Of the Australians who thought the economy was in poor shape in 2012, 34 per cent thought living costs were the main culprit.

The Centre for Policy Development’s Ian McAuley delved into the statistics last year in an attempt to find out whether rising living costs really mean that households are “doing it tough”. Over the six years to June 2011, average incomes ran more than one per cent ahead of inflation. In most households, even where spending is heavily weighted towards costs that have been rising faster than inflation, incomes have been rising faster still.

We live in interesting times. History will probably record the Global Financial Crisis as the “Berlin Wall moment” for hardline free-marketeers. Faced with irrefutable evidence of the disastrous impact of the global financial crisis and the human and economic cost of austerity, we are re-learning an old lesson: markets make great servants but terrible masters. Many have not yet accepted this however, and are working hard to shift the blame for current economic conditions away from the finance sector’s excesses and towards the governments that bailed it out and sent themselves broke in the process.

The world is dealing with multiple structural adjustments at once. In a globalised world some of these broad long-term trends are likely to interact with each other in unpredictable ways. The clean energy transition could accelerate, or skillful lobbying and the growth in unconventional oil and gas could derail it. Rising demand for resources from an increasingly affluent population in Asia and the rest of the developing world will push in one direction, while the emerging trend for wealthy consumers to favour services over material goods will push in another. We could see the value of labour decline relative to goods, as more people bid up the price of limited resources. But we could also see a rise in the demand for both skilled and unskilled labour as populations age in the West and in China.

The transitions currently underway will be volatile and uneven, but the broad shift is towards what might be called “human capitalism” – an economy that operates within environmental and resource limits, in which genuine value is created through the investment of human time and ingenuity. For Australia to navigate the coming decades successfully we need to:

Attempts to explain what went wrong for Labor and right for the Coalition over the past three years would resemble the story of the blind men and the elephant, if the men in the story had blogs and newspaper columns in which they could argue at length over whether the elephant was a rope or a tree. No doubt many luminaries are already penning lengthy post-election tomes on why their preferred combination of explanations is the best one. Suffice it to say that Labor’s political troubles have not been caused by the progressive nature of its policies, which are mostly quite popular. The Coalition clearly agrees, as it has adopted many of them.

Australia didn’t become one of the best places to live in the world by accident, but by activism. The stagnant nature of modern politics makes it easy to assume that the river of progress is dammed, or at least heavily silted, but most of the major obstacles are surmountable. In many cases the public support for change is already there, waiting to be mobilised. On the tough sells we can learn, as John Wiseman suggests, from Milton Friedman:

“Only a crisis – actual or perceived – produces real change. When the crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.”

This is an edited extract from Miriam Lyons' introduction to Pushing Our Luck. Edited by Miriam Lyons, Pushing Our Luck is published by the Centre for Policy Development and features NM contributors including Eva Cox and Ian McAuley. Pushing Our Luck is being crowdfunded. Support the campaign here.