The Coalition’s latest attack on Labor’s ‘socialism’ would be funny, if it wasn’t so desperate, writes Ben Eltham.
Finance Minister Mathias Cormann gave a speech to the Sydney Institute last week. It’s fair to say it wasn’t one of his best efforts.
Of course, politicians pontificating is scarcely news. But every so often, they give a speech that transcends the moment and betrays something important about their state of mind.
Joe Hockey’s infamous speech about “the end of the age of entitlement” in London in April 2014 provided plenty of headlines. But it was also notable for the insight it gave into his desire to slash and burn Australia’s social safety net.
After his 2014 budget was handed down a month later, it was a desire that would help destroy Tony Abbott’s prime ministership – and Hockey’s own political career.
Cormann’s speech is similarly revealing. It shows us that the Coalition are worried about Labor’s policy initiative on inequality. Very worried indeed.
Cormann’s speech was entitled “The Politics of Opportunity versus the Politics of Envy”, and there are no prizes for guessing which party represents which.
“Bill Shorten wants to stoke grievance and resentment with sneering attacks on millionaires,” Cormann claimed. “And in his pursuit of his personal ambition he has even been prepared to trash the legacy of Hawke and Keating, taking Labor back to its failed socialist roots.
“The Berlin Wall came down 28 years ago,” Cormann informed the well-heeled audience at the Sydney Institute, “which means roughly 18 per cent of Australians enrolled to vote were born after the fall of the Berlin Wall and the failure of a system of Government that destroyed the economies of Eastern Europe.”
Even for a Finance Minister understandably agitated at the current state of the government’s polling figures, this latest attack is pushing the boundaries of everyday reality.
If only younger Australians remembered the Cold War, Cormann was saying, they’d realise Labor are a bunch of socialists! Oh no!
To call the 2017 ALP of Bill Shorten ‘socialists’ is to twist the meaning of the word beyond any sensible or historic standard of meaning.
Throughout its 120 year history, the Australian Labor Party has been many things: rural insurgency, white race supremacy, trade union bureaucracy, governing party and divided rabble. But it hasn’t been ‘socialist’ in any sensible definition of the word.
The early Laborites were radical trade unionists who advocated for many progressive social reforms. But, since Federation at the very latest, the ALP has also been committed to moderate parliamentary democracy. The first Labor government of Chris Watson in 1904 did not expropriate private property or nationalize any key industries. Instead, it enacted an industrial relations law, to establish federal industrial arbitration. Regulating the workplace in favour of workers has been a signature ALP policy ever since.
No less an authority than Vladimir Lenin was so disgusted by the moderate nature of the ALP that he complained in 1913 that “the Australian Labour Party does not even call itself a socialist party”.
“Actually it is a liberal-bourgeois party,” Lenin wrote in Pravda, “while the so-called Liberals in Australia are really Conservatives.”
Fast forward to 2017, and in important respects little has changed. The contemporary ALP is certainly a left-of-centre party. But it is hardly the vanguard of the revolution.
Labor’s current National Platform explicitly endorses free enterprise and private property; on page 16 you can find the decidedly un-socialist statement that “markets have fostered abundance and growth that would be inconceivable to previous generations.”
Labor’s current policies could conceivably be described as ‘social democratic’, but even with this appellation they are a profoundly non-threatening set of policy prescriptions.
The ALP of Bill Shorten seeks to address market failures, wind back inequality and to ensure ordinary citizens have a living wage and decent education and health care. It doesn’t want to impose stringent new fetters on the movement of capital, or dramatically increase the ambit of the welfare state. By its own admission, a Shorten government would not impose onerous new trade barriers, nationalize key industries, or break up any dominant duopolies.
What was Cormann complaining about? Labor’s opposition to company tax cuts, its policy to wind back negative gearing and superannuation tax breaks, and Shorten’s new plan to modestly tax family trusts. As Greg Jericho pointed out this week, if it wasn’t so desperate, it would be laughable.
The very fact that such a mild program produces such mouth-frothing rage from free-market conservatives tells you two important things about Australian politics.
The first is that Labor’s policy program is resonating with voters. Bill Shorten is no-one’s idea of a charismatic leader, so the Opposition’s sustained lead in opinion polls is best explained by perceptions of policy.
Voters have consistently told pollsters they support Labor policies like winding back negative gearing and reducing inequality. They have consistently registered their disapproval for the Coalition’s signature policy of corporate tax cuts.
The second thing it tells you is that the Coalition is getting desperate. The government has no answer to Labor’s agenda. The old talking points of freedom, choice and flexibility aren’t working anymore. As the 1 per cent shoot off into the stratosphere while the bottom half are left behind, voters are increasingly realising that the old policy nostrums of lower taxes and lower regulation produces nothing but insecure jobs, unaffordable housing and stagnating wages.
As I argued earlier this month, Labor’s policy proposals are resonating with voters because inequality is real.
Australia is getting less equal, rapidly and dramatically, as a society based on home ownership for the majority is being turned into a nation of landlords and renters. At the beginning of the Howard years, the dynamism of capital was a phenomenon that played well for a populist conservative prime minister. Economic growth seemed to be lifting all boats, houses were still affordable, and middle-class incomes were rising.
Two decades later, the characteristic word of the era is “disruption”, a word that has come to rival “restructuring” as a harbinger of doom for affected industries. If you are a newspaper journalist or a taxi driver, the dynamism of free enterprise seems rather less attractive than it used to. As middle-class jobs transform into precarious and low-income piece work in the “gig economy”, voters are starting to take note.
The insecurity has penetrated well into Australia’s formerly prosperous middle classes. Short-term contracts and casualised labour are rife in supposedly prestigious professions like higher education, the public services and the law. With industrial relations laws that strongly favour employers and union membership at historic lows, it’s getting harder and harder for organised labour to fight bosses for higher wages and better conditions. No wonder the share of the economy being returned to profits is at a multi-decade high.
At the same time that free market policies have manifestly stopped delivering growth for the bottom half of Australian society, the top echelons of the wealth distribution are shooting ahead. Australia’s CEO’s and top executives like Ian Narev are earning millions of dollars a year, even when their businesses are accused, like the Commonwealth Bank, of money-laundering, corruption and fraud.
Labor’s modest suite of policies are unlikely to do much to stop the international forces of disruption and inequality sweeping the global economy. But they might just make a difference at the margins.
In contrast, all the Coalition can do is call Labor names. On hearing that Labor are a bunch of socialists, voters might well approve.
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