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An agenda for Labor

By Tristan Ewins - posted Thursday, 22 February 2007


As Australia heads inexorably towards the next Federal election, there will be a host of issues confronting Kevin Rudd and his inner circle of shadow ministers and advisers.

Will the Australian Labor Party cave in to corporate interest on the issues of workers’ rights and collective bargaining, or will a new and comprehensive regime of minimum wages and conditions be established - which defends the right of collective bargaining and protected industrial action?

What kind of agenda will the ALP adopt on the question of tax reform: a plan to progressively restructure the system in favour of workers, the poor and the marginalised, or an agenda (maybe including a “flat tax”), which provides sweeping corporate tax cuts, and tax cuts at the upper end of the spectrum, while tightening public expenditure and welfare, and further crushing the aspirations of the needy?

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And what agenda will the ALP bring to the field of compulsory and tertiary education? Will Labor respond to demands for the establishment of a single, and most likely conservative national curriculum or will Labor work with the states to re-energise education, retain critical content and diversity in English and the humanities, and provide beneficial standardisation only where the states co-operate to achieve this end?

Many peak corporate bodies, including the Business Council of Australia, are concerned that any incoming Labor government not wind back the clock on industrial relations.

Additionally, they are interested that any development of infrastructure - which, incidentally, the BCA reasonably craves - be provided for by the public, and not through impositions on the corporate sector. The preference, here, from the finance capital sector will be for Public Private Partnerships: arrangements that do not “crowd out” private investment in public infrastructure - and which fleece the public for hundreds of millions of dollars.

From both major parties, the BCA will be looking for generous company tax cuts: and it will not care what forms of austerity for public programs and welfare accompany such largesse.

Does Labor accommodate such desires in order to avoid a business scare campaign, or should Rudd have the courage to put the public interest ahead of sectional business interest?

The key here is to dull any negative reaction by the business community by dividing it on the basis of posing as the only party willing to invest in the infrastructure necessary to the nation’s future competitiveness. The Coalition, as a consequence of its fiscal conservatism, and an ideological hostility to the development of public infrastructure, has proven itself incapable of this task. Many business leaders have already recognised that the neglect of Australia’s infrastructure has already reached crisis-point.

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Insofar as the business community benefits from this infrastructure, the corporate sector ought to be made to pay its fair share through the maintenance of Company Tax, and perhaps even the implementation of a new “infrastructure levy” of up to 4 per cent. Such reforms would still leave effective corporate tax rates lower than is the case in the United States.

From ports to rail, and from public transport to roads, water, health, aged care, energy and education infrastructure and services, Australia suffers from a lack of investment in these critical fields, impacting upon our overall economic performance.

The states, in particular, require additional grants from the Federal Government if they are to respond adequately to crises in public health, housing affordability and education. Additional tied state grants could also negate the demand for private toll roads and other inequitable means of infrastructure finance (i.e. varieties of “Public Private Partnerships”) - so long as State Labor governments were to overcome their irrational aversion to debt finance.

Any development of a proactive industry policy also holds the prospect of co-opting those sections of the business community who are likely to benefit For example, the provision of research and development credits, and targeted tax breaks for export and import-replacement industries which promise to create high wage local jobs. This way Labor can gain vital economic credibility in pursuit of its broader agenda.

Health and education are always strong areas for Labor but if Labor combines fiscal conservatism with an agenda of personal and corporate tax cuts, what room is there for Labor to live up to this reputation? Ideally, Labor ought to aim to provide additional grants to the states with the purpose of lowering student to teacher ratios and providing for the development of new infrastructure in our schools and hospitals, while expanding federal funding to provide for a more equitable regime of fees and charges at our universities.

Such an agenda of expanded public expenditure necessarily involves a re-ordering of priorities: where the Private Health Insurance Rebate is means tested, tax cuts are put on hold, and potentially where new revenue measures are considered to fund social wage expansion, industry assistance and essential infrastructure.

Labor should be considering the progressive expansion of its revenue base, rather than succumbing to the “razor gang” mentality regardless of the worth of public programs and industry policy. Potential revenue measures could include wealth or inheritance taxes, a carbon tax, an increase in and progressive restructuring of the Medicare Levy, and the abolition or halving of dividend imputation.

Labor could seek to harmonise a carbon tax with similar levies in other countries, while diverting any revenue thus generated into research into, and investment in, renewable energy. Such an agenda could be sweetened by an adjustment of the PAYG tax-free threshold, combined with full indexation of the bottom three income tax brackets.

Preventing bracket creep at the lower end of the tax scale would also sit admirably with Labor’s commitment to social justice and equality.

Finally, as an alternative to raising the tax-free threshold, Labor ought to also consider the introduction of income tax credits as an alternative to tax cuts for low-income Australians.

In the field of education, the ALP needs to be cautious about demands for a national curriculum. Over decades, a progressive educational culture has evolved around outcomes-based education: which sees the process of learning, and the aptitudes gained from the learning process as being of more value than learning by rote.

Any development of a national curriculum ought to occur as a consequence of interstate co-operation rather than through the establishment of a new federal body that reflects the prejudices of the current government.

In the field of higher education, meanwhile, Labor must promise the abolition of full fee places for domestic students, combined with standardisation of HECS rates, an increase in the HECS repayment income threshold, and possibly the introduction of a bracketed HECS repayment scheme. Such a scheme could adjust the proportion of debt due to be repaid in total: where such an amount is indexed according to income. Furthermore, Federal grants for independent research in our universities must be expanded to overcome dependence on corporate funding.

In health, a commitment of $5 billion for additional hospital beds and for the education of extra medical professionals would do much to solve the waiting lists crisis: the situation has long been beyond modest half-measures, and requires robust action now.

Additional funds ought to also be provided to expand the scope of Medicare into dental care and other areas of essential service. Beyond this, the ALP ought to be aiming to lower Pharmaceutical Benefits Scheme (PBS) co-payments - especially for pensioners - and expand the scope of the program.

In the case of aged care, the Howard Government’s commitment of an additional $1.5 billion for the sector, with associated equity measures to lessen the cost burden for those elderly citizens least able to pay, has raised the stakes for Labor. As the party of social democracy, Labor needs to demonstrate its commitment to care for all Australians.

Howard has now set one benchmark which the ALP ought to trump with additional equity measures, easing means tests and fees for those least able to pay, increasing funding and raising standards for the sector with the aim of improving the quality of life of our most vulnerable citizens, and providing a credible long term plan to deal with an ageing population.

In industrial relations Labor needs to be forthright about its values. The government has specifically targeted building industry unions, and has introduced draconian laws which outlaw strike action in the construction industry, threaten jail of six months for those workers who refuse to answer questions under interrogation, and impose barbaric fines amounting to tens of thousands of dollars - not only upon unions, but also upon individual workers.

As Chris White has noted (PDF 76KB) in the Journal of Australian Political Economy, government legislation includes measures to outlaw pattern bargaining strikes, limit or withdraw protected industrial action, and ban strike action as a means of political protest outright.

Following the introduction of the WorkChoices legislation the vast majority of Australian Workplace Agreements (AWAs) have seen at least one protected award condition traded away. And according to the latest statistics explored in The Age, one in six AWAs “paid staff only five basic entitlements, depriving them of 11 other award conditions such as overtime, rest breaks, holiday leave loading, and extra pay to work on public holidays”.

Furthermore, “[more] then 60 per cent of contracts scrubbed leave loading, 63 per cent wiped out penalty rates and more than half dumped extra pay for shifts outside of normal business hours”.

Fortunately, Labor has not backed away from its commitment to “tear up” the WorkChoices legislation. What is not at all clear, however, is what will take its place. As of late Julia Gillard has voiced her preference for a simplified award system with “some legislated minimum conditions”.

There are also other factors at work: questions that will not be resolved until the ALP National Conference in April.

Further policy shifts should include the rescission of outrageous laws aimed at curbing building industry unions, ensuring union access to workplaces, abolishing requirements for regular secret ballots in the course of any industrial action, and entrenching the right to strike action as a form of political protest.

The ALP ought to accept all such proposals as put forward by the ACTU and individual unions. Labor cannot accept a scenario where, for the labour movement, even the election of a more sympathetic government amounts to “one step forward, two steps back”.

Although there is much talk of a “simplified” industrial relations system, the removal of protected conditions will hurt those in a weak bargaining position: typically those without a strong union. Labor must be forthright about the role of trade unions in defending workers rights through collective bargaining - including the right to protected industrial action, and should restore a comprehensive award system which protects the entitlements of even the most industrially weak workers.

There are many other issues that will also be critical to Labor in the upcoming Federal election: but we can only touch upon these here. The war in Iraq remains deeply unpopular, and Labor remains on course to withdraw Australian troops from this disastrous quagmire. The inaction of the Howard Government over the detention of David Hicks also severely compromises its credibility in the field of human rights.

Furthermore, welfare groups will be looking for Labor to reverse punitive reductions in welfare payments for single parents and the disabled, as well as embracing a broader expansion of Australia’s social wage.

Many voters will also be concerned that any moves to remedy Australia’s water crisis not prove a slippery slope to water privatisation.

Labor also has a decisive advantage over the Coalition on environmental questions. Rather than squandering this advantage, Labor needs to commit to barring uranium exports to countries not already signed on to the Nuclear Non-Proliferation Treaty; to sign the Kyoto Protocol; introduce a carbon tax; and support the development of renewable energy alternatives through research and public infrastructure investment. Importantly, moves to introduce a carbon tax or emissions trading scheme should be combined with tax and welfare reform that fully compensates those on lower incomes.

Finally, Labor should not shy away from visionary policies aimed at establishing economic democracy. A “co-operative incentive scheme” which included tax breaks, assistance and advice for co-operative enterprise, and the provision of cheap credit would be one ideal mechanism for enhancing democracy in the workplace.

Furthermore, a “wage earner scheme” which reserved a portion of corporate profits for the issuing of shares for democratic funds, comprised of unions and regional communities, ought to also be brought into the debate. Such a scheme, if implemented, could finally properly compensate workers for wage restraint embraced in the 1980s.

While such forward steps seem far away for a labour movement which has been on the defensive for over a decade, radical ideas need to be introduced in order to relativise the debate, and provide room for the emergence of progressive policy. Another positive step would be proposals to re-socialise Telstra and re-establish a public bank as has already occurred in New Zealand under Labour - hastening the development of new infrastructure, improving competition and moving Australia on course for a democratic mixed economy.

Labor has established a commanding lead over the government in some opinion polls, with Rudd scoring an impressive 65 per cent approval rating in the AC Nielson poll. Now is the time to capitalise on such success, taking Australia forward towards a more progressive tax system, a fair and just IR system, an expanded social wage and visionary nation-building and industry policies.

Labor needs to build for the future rather than embracing a policy that relegates the movement to “one step forward, two steps back”.

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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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