Prelude to major system change?

The objective of this article is to demonstrate that major system and ideological changes are needed to take Australia forward. The Australian voters may well be desperately looking for political leadership to generate such changes.  The Golden Age myth may not be a particularly relevant concept now unless one refers to a period like the early 1900s when Australia introduced a series of remarkably progressive social and political reforms. Some of these were quite heroic and advanced by then contemporary standards.

In addition, there was the short burst of major reforms, in the Whitlam period (1972 – 1975) that many seem to have forgotten now: establishing Telecom and Australia Post, withdrawing troops from Vietnam, abolishing university fees, establishing Medibank, ending conscription, releasing conscientious objectors from jail, opening diplomatic relations with China, giving independence to PNG, amalgamating the army, navy and air force, taking sales tax off women’s sanitary products, appointing the first women’s adviser, ending appeals to the Privy Council in England, instituting an Australian honors list, pushing land rights for indigenous Australians and introducing the policy of multiculturalism. These were partly policy and partly governance changes.

They frightened the conservative horses greatly. Whitlam was removed but, to his credit, his successor Malcolm Fraser basically maintained the new policies. But something else had emerged in the Western world, post WWII Keynesian policies were phased out and neo-liberalism began to take hold: keep governments small, let the markets rip, deregulation and privatisation and competition policy were praised for their own ideological sake. People were encouraged to talk about “customers” everywhere instead of passengers, clients, students, patients, etc. Even Labor Governments in Australia adopted a large chunk of the neo-liberal agenda, e.g. the Hawke and Keating Governments. Many of the privatisations were actually introduced in that period, others under Howard. The reintroduction of uni fees started in 1988. However, governance changes, as system changes, hardly happened. Local government inclusion in the federal constitution failed on two occasions, on account of Coalition opposition in Referendums. Hawke rejected the European type industrial relations reforms recommend in the 1987 Australia Reconstructed Report. Even a very minimalist Republic favoured by Keating and Turnbull was unachievable.

What is perhaps of more direct relevance now is the notion that Australia has come through the Global Economic Crisis successfully, thus far. That crisis, almost entirely an inexplicable surprise to the neo-liberal gurus and corporate executives, is still with us. Australia’s four major banks, not de-regulated, and a major mining boom, helped to withstand the threat thus far. However, this success masks structural, economic and environmental problems that could seriously threaten the future. Many of these problems are the direct result of governance weaknesses; and a deplorable reluctance to political, industrial relations, electoral and constitutional reform by both major parties. Several community groups and social media channels have emerged in recent years that do show great awareness and keenness  but their capacity to actually influence system changes is still rather limited. Voters have very limited choices even though, as in 2010, many voted for non-major parties’ candidates. Moreover, their positions are largely shaped by powerful traditional media who consistently fail to promote debate about system alternatives.

The dominance of neo-liberalism is being questioned.

A few days ago Frank Stilwell, retiring first Professor of Political Economy of Sydney University, was honored at a special conference devoted to the discipline and his innovative career. Political economists favour a heterodox approach instead of the orthodox classical approach that chiefly inspires the neo-liberal economists. There were a great number of contributions by other political economists covering several sub-disciplines. Stilwell’s own contribution, explained in his 2000 book Changing Track - the Fourth Way, tackles the inequalities, insecurities and alienation resulting from the neo-liberal domination. He also points out that the notion of 5% - 6% unemployment being satisfactory is false, that measurements like GDP are inadequate for many social and environmental purposes. Governments have a major role to play in the capitalist economy, as Keynes, not a socialist himself, already demonstrated in the 1930s.

It was interesting that Griffith Uni academics Murray, G. and Peetz, D. demonstrated in their joint presentation that inequality of incomes had grown significantly since the early 1970s in the Western world, especially in the Anglo sphere. However, at the same time, productivity of the workforce had steadily declined over the same period. That is certainly the case in Australia. Furthermore they demonstrated that, as have many other researchers in the US as well, that there is no correlation between executive achievement and their salary packages. Thus the absurdly high executive incomes have no real justification on the basis of merit. This was also established by the Productivity Commission during its Inquiry in 2009. Disappointingly, we find that only a weak response by the Federal Government resulted. Providing some additional power to shareholders to question the Corporate Remuneration Reports suggests that they baulked at taking on the big end of town. If this continues Australia will end up as a plutocracy rather than a democracy, which it still claims to be.

The Traditional Media role.

The role of the traditional media in Australia to promote the fortunes of political parties sympathetic to neo-liberal values and interests has been given considerable attention in recent weeks in Australia following the half-baked attempts to introduce six laws aiming to create more diversity in the media.

Some journalists, the political commentariat, operate as a group of extra-parliamentary, unelected politicians. They seem to function plainly as agents of the growing plutocracy. This is particularly the case with News Corporation’s media outlets. The onslaught against the Gillard Government has been relentless. As they have 70% of the newspaper circulation, plus airtime on radio and TV stations, this has been a major handicap for the Gillard Government, in spite of a mainly credible performance.

Fairfaxpapers have also undermined the Gillard Government consistently. Several keep telling their readers that Gillard has been a “poor campaigner” and a “disaster” as a PM. These same apparently highly qualified writers informed readers that the winner of the drama was Tony Abbott. Their favourite PM appeared to be Kevin Rudd but the spill was a non-event because his backers stuffed up and he didn’t want to be a candidate any way. Notions that the Gillard Government is virtually certain to lose the September federal election are basically presented as fact. In reality such claims are irresponsibly premature, superficial and/or based on wishful thinking. The polls favour Abbott but they do not indicate the intensity of support for the Coalition under Abbott at all. If Gillard came up with bold new policy, favoured by the voters, the tide could well turn rapidly. Apart from shooting themselves in the foot a couple of times, they haven’t done much wrong. We should ask what areas of system change could be identified other than the long overdue media diversity?

Areas of system change and governance reform.

Top of the list would be federal-state relations – a continuous sore aggravated by often having opposing parties at federal and state levels resulting in endless blame games between them. The increasingly counterproductive nature of this system need not be labored here. Many politicians and academics have written about it most still arguing for “saving”, “repairing”, “rescuing” the existing federation rather then abolishing that structure of divided sovereignty. Some are talking about a “new” federation or “tomorrow’s federation”. But Australia needs to talk about BEYOND FEDERATION because the conditions that gave rise to federation in the 1890s, which, at the time, made very good sense, have long ceased to exist. So, lets start talking about a national unified state with a high degree of decentralization. Of course this involves major constitutional change. Major constitutional change in many areas would be very desirable altogether. Do I hear you say “but that is so difficult, it won’t work”? That need not be so at all.  A new constitution can be discussed in a consultative process, written up and presented to the people in one document, and be treated as an amendment to the existing constitution, in a Section 128 referendum. Can we start with a competent, progressive Government appointed committee to Inquire into the need for constitutional change with a mandate to write a new constitution?

Secondly, our electoral system is grossly biased in favour of the major parties. This is the result of the 1918 Commonwealth Electoral and the 1924 Electoral Acts. The compulsory preferential system, based on single-member-districts is a grossly undemocratic system unlike what it was purported to be. Proportional representation, used by 89 countries in the world, would end this situation and would make it possible for new parties and Independents to gain representation.  Australia does have a kind of PR system, the Hare-Clark system (Tasmania, the Senate and ACT) but there are serious design problems with that system. The best system would be an Open Party List system as used in most European countries, simple, cost effective, flexible, above all democratic. Its introduction would create a very different political culture where common ground has to be found by elected political parties to create majority government. This is quite different from the adversarial system of which we have seen quite enough in recent years. Australia needs to move away from the two party hegemony and, also, consider coopting Ministers from outside the Parliament. The area of choice is simply inadequate. The result is that there is not enough quality. 

In the area of industrial relations Australia is still grounded in the same adversarial mode as emerged in the beginning of the 20^th century: trade unions and the IR club versus employer organisations; a tug-o-war at every election period, reflecting a zero-sum culture.  Can Australia move on to workplace place democracy, participative-decision-making structures and, where appropriate, employee share ownership? These structures of industrial relations, old AND new workplaces are increasingly common in many other countries, since the 1950s actually. Talking about productivity? Surely, this is the way to go.

Then of course the growing transport conundrum, especially in the big cities. Why not go ahead with Sydney’s second airport? After more than 25 years of federal-state haggling and indecision the need for a second Sydney airport is plainly overwhelming. None of the options is totally perfect but Badgery’s Creek has a lot going for it and very few residences would be directly affected. It seems the obvious choice. Superannuation funds can be tapped into for sound investment. Of course there are a lot of other infrastructural needs, like rail in particular, that require investment and doing.

Should we continue along the path of combatting climate change to the extent that we can – or turn the clock back?

Are we on right track with a carbon price or not? The evidence of climate change is unmistakable, right here in Australia and elsewhere.  If anything, we should do more, much more. Be a leader for other countries dragging their feet.

Conclusion.

Can we expect from either major party to at least make a start with major system changes like these? I would say it can hardly be expected from a conservative party led by Tony Abbott. Neo-liberalism is their ideology. We can expect, at best, a mirror image of the Howard years.

Can we expect dramatic, bold initiatives from the Gillard Government? Perhaps, if they get their act together very soon and abandon the archaic idea that they need to be governing in their own right. That is the past. Move on ALP. All social democratic parties form partnerships with Greens and Independents. It works in Tasmania.

A Hung Parliament is again possible, even more Hung than the one we have now. Expect a large number of voters not to vote for the major parties, even more so than in 2010. At present neither major party leader has strong support. Many people didn’t vote in 2010. That could happen again as well.