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Where is Australia’s balanced political commentary?

By Chris Lewis - posted Monday, 1 September 2008


So how long will Australia’s simplistic Right continue to deny the difficulties ahead? It seems that it will be until Australia experiences relative economic decline and governments are forced to respond, perhaps through significant deficit spending. Remember, even US governments have increased their spending to help the vulnerable and low-income workers from 13 to 16 per cent of GDP between 1990 and 2003.

Certainly, there is a need to ensure that the Australian economy remains competitive and attractive to investment. This is a prime reason why I argue that both centre-left and centre-right governments are needed at times to correct the excesses of each other.

But contrary to what Australia’s economic Right may suggest, Australian governments will long have to address the needs of the majority. Fortunately, Australians are astute enough to temper the pace of any economic reform. With the Australian economy booming, it was always unlikely that the majority was going to accept the open promotion of AWAs which clearly favoured employers.

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Quite simply, bargaining power is increased through a right to collective bargaining. As Bruce Einhorn noted in BusinessWeek (July 25, 2008), even though Chinese workers cannot form independent unions and can only “criticise the government’s labour policies at their peril”, the All China Federation of Trade Unions (representing the government) forced Wal-Mart to sign a new collective bargaining deal guaranteeing workers in two Chinese cities (Quanzhou and Shenyang) a pay rise of 8 per cent in 2008 and again in 2009.

Of course, such a development hardly diminishes the immense advantage that China and other developing nations will long have in labour cost terms when compared to Western nations.

But while Kelly calls for Labor to further lower corporate taxation (The Australian, August 9, 2008), although he hardly ever offers any advice about how or why Labor can help battlers address record home unaffordability and a higher cost of living, it remains to be seen how long such an approach will allow Australia to meet a variety of domestic policy needs, especially if Australia experience an economic decline.

For those political commentators of the simplistic Right who are obssessed with global economic realities, they downplay the effects of greater income disparity in terms of reduced purchasing power opportunities in the belief that higher aggregate wealth will increase, and that any inequality can be offset by greater income support from government.

But for myself and others who believe that the facts suggest that all is not well, there is a need to take on the simplistic Right just as much as the simplisitc Left. In other words, balanced political commentary based on the facts should be the name of the game rather than childish accusations that greater government intervention is another push for socialism, as suggested by Albrechtsen.

The days of awakening may be coming soon. As Colin Barr noted on the CNNMoney online site (August 14, 2008), though rising inflation does lead government officials and employers to oppose large wage rises, a view aided by rising unemployment levels, things are likely to get worse for many American households which may lead to the further impoverishment of workers.

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And with lending practices so important to any capitalist economy, the US government is unlikely to ever allow Fannie Mae and Freddie Mac, the two mortgage giants, to collapse, thus providing a scenario that will probably lead to greater demands for regulation as the US taxpayer bears the huge cost.

Greater protection and regulation will probably have a negative effect on the growth of the international economy, although the US, EU (25 nations), Japan, Canada and Australia still comprise about 69 per cent of world GDP (nominal terms) in 2007 compared to 13 per cent for the four largest developing economies (China, Brazil, Russia and India) with their large population.

Freer trade does remain the best way for promoting peace and prosperity, but it will never follow the same recent policy trends should the majority of Westerners experience hardship.

For now, Australia does remain a lucky country. Though it has adopted significant reform in recent decades to maintain a high standard of living, its fortune to benefit from the Asian economic boom is indeed masking the difficulties that have already confronted many other Western nations as any reliance upon high levels of debt begins to show obvious policy limitations.

It is time that the simplistic Right wises up to discuss the difficult issues, or they too will remain just as simplistic as the far Left.

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About the Author

Chris Lewis, who completed a First Class Honours degree and PhD (Commonwealth scholarship) at Monash University, has an interest in all economic, social and environmental issues, but believes that the struggle for the ‘right’ policy mix remains an elusive goal in such a complex and competitive world.

Other articles by this Author

All articles by Chris Lewis

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