Australian liberalism: the rocky road ahead

Forget silly arguments that Australia (and the world) should embrace complete free trade and/or open national borders to immigrants, as suggested by one of Australia's most read libertarians, Chris Berg.

While libertarians offer some useful points within their wishful thinking, common sense demands more sensible commentary that reflects the reality that we do live in a competitive world still struggling for resources and the influence of certain ideas.

As Merv Bundle indicated in Quadrant when reviewing the publication 100 Great Books of Liberty, the evolution of Western civilization cannot be explained by "people who insist on absolutist conceptions of freedom" and view the state as "a gigantic maternal figure over which we must all struggle for control and influence". After all, the state is "a necessary constitutional creation of free people that demands constant vigilance if it is not to destroy the very liberty it was meant to protect".

Frank Salter, in another Quadrant piece, also rightly urges Australia to adopt an immigration program that takes adequate account of concerns about ecological sustainability and national continuity to ensure that one sector of the population does not benefit at the expense of another.

To a large degree, Australia's recent liberal democratic experience has been governed by major political parties (Labor and the Coalition) who have both been committed to pragmatic policy reform that takes account of both national and international considerations, although each seeks to differentiate itself over the degree of government intervention and individual responsibility.

In 2007, the Finance Minister Nick Minchin rightfully refuted criticism by the Centre for Independent Studies for not doing enough by noting that both of Australia's major political parties have "an unavoidable obligation" to hold the middle ground. While the Howard government reduced Commonwealth government outlays and the percentage of the population relying mostly on government pensions and allowances, it also increased spending on health, education and social security. Minchin was just as proud of greater assistance to families with children through the Family Tax Benefit, especially for single-income families, as he was that Commonwealth public sector employees fell from 353,300 in February 1996 to 291,500 in 2007 with over 300 federal government entities (such as bureaus, agencies and similar bodies) being axed ('Prosperity is no accident', The Australian, 1 February 2007, 12).

Labor and Coalition governments, through their interaction with the public, have accepted the important role of government to address old and new issues, although they differ in regard to the extent of government intervention.

While better attitudes towards ethnicity have evolved further since the Menzies Government substantially modified the White Australia Policy in 1956, 1957 and 1964 and the Holt Government softened rules in 1966 for Asians to gain Australia citizenship, the Howard Government rightly addressed increasing public sentiment urging greater leadership towards cultural integration.

Greater adherence to freer trade has been widely accepted in the Western world in recent years, yet significant industry protection remains evident under both Labor and Coalition governments. While Australia now increasingly relies on mining exports, its high-tech manufacturing sector owes much of its existence to significant industry assistance. Further, Australia's relative strengths in mining and services are often maintained by protectionist measures against foreign acquisitions. Just recently, Treasurer Swan rejected the Singapore Exchange's $8 billion merger bid with the Australian Securities Exchange on grounds that jobs and capital would leave Australia.

But even so, as is the case with much of the Western world increasingly relying on debt (including private), Australia is hardly immune from difficulties in terms of government addressing existing policy needs. Just days ago, the Gillard government indicated that the May 2011 budget would have a $4.5 billion shortfall given that personal income tax collections are down by about $1 billion and business tax collections $3 billion, although it remained committed to returning the budget to surplus in 2012-13.

There is a strong possibility that even lucky Australia (minerals in the ground) will have much greater policy difficulties in coming years.

For now, our policy elites appear almost wishful that China's bubble does not falter with Australia's interest rates on hold and the Reserve Bank happy for Australia to save more while the rest of the economy stays sluggish.