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Does the ALP have a social democratic vision?

By Tristan Ewins - posted Friday, 2 August 2013

For anyone who hadn't noticed – Buried at the end of a news story on page nine of the Herald-Sun on July 31st was an announcement to the effect that Labor was pledging "no changes" "to superannuation for at least five years", "locked in" via legislation. Deceitful as always, the Herald-Sun proclaimed this would prevent "tinkering" via "super taxes". (this is deceptive because the issue is with existing TAX BREAKS on superannuation rather than the implementation of any new tax)

And on the same day on page 2 of the Herald-Sun was the proclamation that "households face thousands of dollars in higher bills for fresh food, health and education payments" if the GST is increased and/or expanded in scope – as demanded by the Business Council of Australia. (BCA)

So what's the connection between these?


As the China boom recedes somewhat – and with the prospect of an ageing population - the government is facing a reduction in tax revenues, including revenue from Company Tax and the GST – at the same time as an ageing population will increase health expenditures in the context of a narrowing tax base. Then there's the fiscal impact of winding back the Carbon Tax. And on top of that you can add the fact that the country is suffering a massive infrastructure deficit – with business recognising that crisis – and its impact upon productivity – by demanding that workers, citizens and consumers pay the price.

According to Grattan Institute chief executive John Daley extending the GST to education, health and food "would potentially add $3000 a year to average household costs." And the BCA is also looking to attack organised labour in order to firm up their profit margins.

Malcolm Maiden at 'The Age' puts it this way: that "The BCA wants stronger fiscal discipline and a more flexible industrial relations environment…" Translated that means: curtail industrial liberties, remove safeguards for wages and conditions; cut the social wage and welfare… Maiden also observes that other moves are also apparently 'on the table'; perhaps including massive cuts to Company Tax and a "ceiling on tax revenue as a proportion of GDP." (The Age, July 31st)

To put it bluntly: Labor needs to decide WHAT and WHO it stands for. Does it stand for the traditions of social democracy? Does it stand for the vulnerable, and for the low and middle income earners of the working class? Does it stand for social security and social solidarity? Or does it stand for small government, corporate welfare, regressive taxation, 'survival of the fittest', 'the top end of town', and a preference for abstract economic goals, and increased private dividends and profits –instead of concrete social goals and needs?.

Richard Denniss of the Australia Institute has pointed out that changes to Australia's income tax regime from before the GFC hit (ie: since 2006) were costing $40 billion for the year 2013 alone.

And crucially he has made the additional observation that those superannuation concessions the Federal Government seems so eager to quarantine will cost about $50 billion a year by 2016. And according to Denniss that's with a dominant percentage of superannuation tax concessions of various kinds (ie: tax breaks) going to the top 5% income demographic! This at the same time as the Federal Labor Government continues austerity against pensioners, and considers further cuts to welfare and services!


Of course the BCA will look after its own interests, and the profit margins and dividends of its members. It will try and push the case for effective corporate welfare: for cuts in the tax business pays at the same time as taxes and user charges go up for workers, tax payers and consumers to provide the infrastructure and services its members benefit from. This – and also assaults on workers' wages and conditions – is about shoring up profit-margins and dividends by increasing the intensity and the rate of exploitation.

There are points of 'cross-over' when it comes to the interests of citizens, workers and business. Keeping business generally viable means preserving jobs. But the public interest and business interests should not always be seen as synonymous. We should seek BOTH to divide the pie fairly AND to grow it through technological improvements to productivity, and support for high-wage industry. (ie: NOT by intensifying exploitation through attacks on wages and conditions)

And we need to retain focus on the social goals that underscore our economy. That is: not promoting profit as an abstract end in itself – but promoting economic activity which adds to the quality of life of citizens and workers. This necessarily entails social investment in properly not-for-profit sectors: health care, aged care, public housing, education for human development – and not just for the labour market. It might also mean reductions in the working week, and in peoples' working lives – for concrete human needs that go beyond abstracted goals of growth.

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About the Author

Tristan Ewins has a PhD and is a freelance writer, qualified teacher and social commentator based in Melbourne, Australia. He is also a long-time member of the Socialist Left of the Australian Labor Party (ALP). He blogs at Left Focus, ALP Socialist Left Forum and the Movement for a Democratic Mixed Economy.

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