Advance Australia Fair - Building Sustainability, Justice and Peace
Sunday morning plenary - Howard's (di)vision for the land of the long economic boom
Sunday 31st July 2005
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Graham Larcombe
Economist
This paper responds to three questions: Firstly, what are the significant developments in the global economy that influence the development of all societies including Australia? What is the Howard Government vision for the Australian economy and how sustainable is it? Thirdly, what alternative policies and political interventions are required to change it?
It is important to place changes in Australia in a global context. The last twenty years have witnessed extraordinary changes in the global economy and politics with significant winners and losers. The Australian economy, as with a small group of advanced capitalist economies and developing economies such as China, the Asian tigers and India, have experienced a long period of economic growth.
There have been major developments at a global, regional and national level that can be briefly summarised as follows:
A small group of advanced capitalist economies have strengthened their position, firstly under the banner of corporate globalisation but more recently under the banner of US Imperial power or what has been termed “Imperial globalisation” (1). By corporate globalisation we are referring to the increasing interrelationships between national economies with unimpeded flows of capital, finance, trade and a liberal approach to movement of people migrating between countries primarily because wealthy capitalist countries were seeking cheap labour to work in low skilled jobs. By Imperial globalisation, we are referring to the determination of the current US administration to reshape global institutions, societies and economies, undermine international treaties and pre-emptively intervene in the affairs of other countries to pursue US economic, military and political objectives. Imperial globalisation may at some stage start to impact corporate globalisation, particularly if the US economy falters or faces intensified competition from countries such as China. The main vehicle for globalisation is the predominantly western-based transnational corporations – which made use of their access to capital, political influence, information and organisational capacity as well as their ability to harness innovations in communication, finance and transport – to expand operations in low wage cost countries, prise open new markets, and to market competitively priced consumer goods in affluent markets. The transnationals were effective in undermining national based companies – putting many of them out of business or taking them over. Intensified competition between transnational corporations and their capacity to pressure wages in poor countries has enabled affluent consumers to benefit from low cost goods including clothes, shoes, garments, computers, TVs and DVDs. This hastened capital accumulation and economic growth in the advanced capitalist countries but had contradictory impacts on poor countries, including dispossession and exploitation. David Harvey refers to this process as “accumulation through dispossession,” where millions of people in poor countries have paid for the material benefits in advanced capitalist countries over the past 20 years [2].
The economic ideology that underpins globalisation is neo-liberalism. The main tenets of neo-liberalism are the belief that the market is the most effective mechanism to allocate resources in economies and the role of government needs to be substantially reduced. The neo-liberal ideology is espoused by an unsavoury alliance of powerful western elites, including the global corporates who fund rightwing think tanks and regularly get together at meetings such as the World Economic Forum in Davos; lazy mainstream economists who are obsessed with the mathematical purity of the neo-liberal economic theory but not actual workings of markets; media commentators attached to the global media corporates, and pragmatic politicians who can say “it’s not us, it’s the markets” when things go wrong. The neo-liberal agenda has been forced on many struggling poorer countries by the “Washington Consensus” institutions, which have been discredited by their close association with US economic and foreign policy interests. The implementation of the neo-liberal agenda has had disastrous consequences on some of the world’s poorest countries.
Market purists argue that markets will bring economies back into equilibrium when they are not distorted by governments “picking winners” and increasing taxes, greedy unions wanting more wages than the market can provide, old people wanting the state to provide them with pensions rather than saving for their old age or unhealthy people having the audacity to expect society to pay their medical bills rather than purchasing health insurance provided by the market. In this idealised world, if wages are too high employers will sack workers resulting in higher unemployment, which in turn will reduce wage demands and move the economy back to full employment. If an economy imports more than it exports, the exchange rate will depreciate resulting in exports being more competitive and imports more expensive, resulting in a magical return to equilibrium. These propositions defy historical experience. The neo-liberal agenda to reduce the role of government in economies emphasises:
o Privatisation of public assets such as financial institutions, insurance companies, airlines, public transport entities, electricity and gas suppliers and distributors and telecommunications;
o Deregulation of key markets including financial and foreign exchange markets, trade and industry liberalisation through the reduction of tariffs and quotas, and deregulation of labour markets through restricting the capacity of unions to protect workers.
o Balanced budgets and restriction on the associated use of government expenditure and revenues (through fiscal policy) to influence economic and social outcomes, as well as stressing the elimination of government debt.
An extraordinary feature of the neo-liberal agenda is how little it is actually practised by the most powerful economies. In the USA, the state has become a more powerful actor rather than less powerful. The current US administration has combined the economic globalisation agenda of the 1990’s guided by American soft power with the post September 11 agenda of political and military domination. The US administration uses fiscal policy to stimulate the economy through providing generous tax cuts to the wealthiest Americans and by substantial increases in military expenditures. America spends more on the military than the combined military expenditure of the next 15 countries combined. The US trade deficits and budget deficit are both as large as the whole Australian economy and yet there have been no interventions from the Washington Consensus institutions such as the International Monetary Fund to correct these economically reckless developments. Whereas serious students of the neo-liberal agenda such as Australia are obsessed with budget deficits and have dramatically reduced debt as a proportion of GDP to 6.0% of GDP, the USA debt/GDP ratio is around 60% of GDP and the OECD average is around 40%. Many conservative commentators argue that US “success” in terms of GDP growth rates has been due to labour market deregulation whereas the data clearly shows that the US administration engages old fashioned pump priming through tax cuts, military expenditure and global borrowings; which is the opposite of the prescriptions of the neo-liberal purists.
Other small countries have succeeded through ignoring the neo-liberal agenda. The Scandinavian countries have some of the highest tax rates in the world supporting very high living standards. Ireland is another success story. It combined substantial access to public funds (through the European Union) to upgrade infrastructure, with a conservative policy instrument (tax cuts for global corporates) and a progressive policy instrument (free tertiary education). This transformed a small backward country that had been losing people through emigration for 150 years into one of the fastest growing countries in the world.
Another important relatively recent development was the demise and dismantling of the Soviet Union and its satellites in Eastern Europe with very mixed results, including some economic regeneration and democratisation. In Russia itself we have disturbing concentrations of economic and political power. These countries represented a non-capitalist path, but deep flaws in centralised economic planning and lack of legitimacy and pluralism hastened their demise. The pressure on the Soviet Union was brought to a head by the acceleration of the arms race by the USA in the 1980s, and finally the massive financing of fundamentalist Islamic groups by the CIA and Pakistani and Saudi intelligence, with the aim of defeating the Soviet Union in Afghanistan and bringing about the collapse of Soviet-styled communism. This project succeeded, resulting in the end for the Soviet Union and the belated attempts by Gorbachev to introduce political and economic reform in a deeply flawed society. But the consequences have been terrible. In Russia, the new regime, encouraged by western economic advisers, put the economy into “cold turkey”. The sudden dismantling and privatisation of the inefficient system of production and distribution inflicted massive hardships on the Russian people. Life expectancy for men declined by 10 years during the 1990’s and corrupt elites were able to carve up strategic manufacturing, financial and energy assets amongst themselves in the world’s largest fire sale. Of course the other consequence of the final assault on the Soviet Union, was the strengthening of the coalition of fundamentalists - between the US administration and fanatical extremists in the Middle East linked to repressive Saudi and Pakistani regimes.
Another important development is that the economies of the world’s two most populous countries – China and India – are sustaining growth. This has lifted hundreds of millions of people out of dire poverty in these countries over the past twenty years, although hundreds of millions remain in extreme poverty. The Chinese revolution in 1949 gave the country independence, which enabled the country to significantly improve the wellbeing of the majority of its population, particularly in the areas of health and education. Life expectancy increased from 41 years to 65 years. But idiosyncratic leadership resulted in dramatic policy swings and political interventions that destabilised the economy until the late 1970s. In 1987, China embarked on a new development model based on market-oriented reforms, openness to the international economy and state control of key policy instruments such as finance, industry and the exchange rate. The economic miracle in China since 1978 is arguably, along with the industrial revolution in Britain, the greatest economic transformation the world has witnessed. Like its British predecessor, the Chinese transformation has also been brutal in terms of human consequences, with hundreds of millions of peasants migrating to large cities in search for work with global corporations looking for cheap labour. China participated in a “race to the bottom” in terms of exploitative wages and conditions, to enable it to compete with other poor countries in attracting foreign capital.
A number of smaller countries have improved living standards by adopting state interventionist strategies. Following Japan, the Asian tigers – South Korea, Taiwan, Singapore – adopted state strategic industry planning, regulated financial and foreign exchange markets to pursue export oriented growth, which were successful in stimulating growth and development, although the Japanese “bubble economy” i.e over-inflated asset prices and speculation – led to a decade of stagnation in Japan, a situation it is tentatively emerging from. The Asian tigers were caught up in the Asian economic crisis of 1997, where capital flight and bad debts from speculators and in many cases corrupt financial deals pushed millions of people back into extreme poverty. Many people, particularly in Indonesia and the Philippines, have not recovered from this experience.
One of the first testing grounds for neo-liberal economic policies was Latin America. Under intensive pressure from the “Washington consensus” institutions – IMF, World Bank, and the World Trade Organisation; and backed up by US military pressure to install and support repressive military juntas, Latin American countries were subjected to harsh measures to constrain social expenditure, constant depreciation of their currencies which encouraged capital flight and repression of trade unions and progressive political parties. This resulted in impoverishment of millions of people in this vast continent. Is it any wonder that the two most popular figures in Latin America are Jesus Christ – who showed love and compassion for the poor, and Che Guevera who fought beside the people to overcome oppression and injustice? In recent years, the countries of Latin America have begun to turn away from the “Washington Consensus” model in their droves and towards greater democracy. Progressive governments are in power in Argentina (which reneged on loan payments stipulated by the IMF), Brazil, Chile, Uruguay, Ecuador, Bolivia and Venezuela. Clearly there are differences between these countries ranging from pragmatism to outright defiance and people’s power – in the case of Venezuela where President Chavez is calling for a “Socialism for the 21st Century”. We don’t know the outcome and the long-term significance of these changes – but they certainly reflect an opening to greater democracy and independence and diversity in economic policy as well as anger and frustration with the neo-liberal experiment as espoused by the US Government and the “Washington Consensus” institutions.
In the age of globalisation, it is deeply disturbing that millions of people are worse off, particularly in Africa and parts of Asia, than their families were 20 years ago. The United States spends as much on the war in Iraq in two weeks (US$2.5 billion) as it does for an entire year for economic development assistance to Africa[3].
The Australian experience with the Howard Government
Australia has enjoyed a long period of prosperity since the early 1980s, punctuated by a severe downturn in 1990-91,which resulted in unemployment exceeding 11%. Our resource endowments - agricultural, mining and energy commodities - as well as a relatively stable political and economic environment and high skilled population underpin this success. By OECD standards, Australia has experienced higher than average economic growth rates. Employment has grown, and real incomes and wealth have increased.
This period of prosperity has had uneven impacts on different groups of Australians. For Australians with assets, high incomes, skills, and those who reside in high growth cities and regions, this has been an era of unprecedented opportunity for increasing incomes and wealth creation. For another significant grouping – termed perhaps inappropriately the “aspirationals”- predominantly younger couples living in outer suburbs of big cities - it signalled a window of opportunity. Work extremely long hours, often with more than one job, somehow juggle childcare, and maximise debt to get into the housing market quickly, buy two cars (because public transport is hopeless) and enjoy the benefits of consumption now, and pay for it later. The fear for many “aspirationals” was that if you don’t buy now – particularly homes – it would cost a lot more later on. The model was based on erroneous assumptions that property prices would keep rising, interest rates would not go up and households could sustain the pressure of long working hours, commuting times and raising children. The third group of Australians: pensioners, Aboriginal Australians and newly arrived migrants, casual and industrial workers, people living in poorer cities and rural regions – representing up to one third of the most vulnerable members of our society - have not shared in the wave of prosperity and most have gone backwards.
At the heart of the Howard Government approach is a neo-liberal approach to economic policy, with exceptions to support particular constituents - and a big C Conservative approach to social policy, associated with growing intolerance and repression of people’s rights whose values and actions don’t coincide with the mainstream economic and social agenda. One of the disturbing features of the dominant leadership grouping is the scapegoating of the most vulnerable members of society. The conditions of these groups are deteriorating. Australian society is becoming like an overcrowded lifeboat, with the most vulnerable pushed overboard. A trivialised and titillating media plays its role in dumbing down debate and desensitising the community to those lost overboard, literally in the horrific case of the SIEV X. The Howard Government has systematically sought to manipulate and exploit differences between Australians and play up the blame game. The treatment of Aboriginal Australians, whose life span is 20 years less than for non-indigenous Australians, remains an international scandal[4]. Howard pointedly refused to intervene to counter the racist ravings of Pauline Hanson, pointedly refused to apologise to Aboriginal Australians for the crimes of removing children from their families, and continually undermines attempts by the Aboriginal community to speak with one voice. Will we ever forgive our Government for denying basic human rights and humanity to desperate refugees fleeing tyrannical regimes such as Iraq and Afghanistan? Ironically, we now have Australian troops in both countries to combat the forces they were fleeing. Workers on Disability Support Pensions and single parents are now in the line of fire. Due to lack of labour market and skills planning, we now have labour market shortages, and hence more pressure through Centrelink to push more vulnerable workers back into the workplace. Organised labour is now firmly in the Government’s sights, with the aim of dismantling an IR system that provides some basic protection of rights and gives consideration to equity as well as efficiency when setting wages and conditions.
Recent studies indicate the growing disparities in Australia[5]:
o Our income inequality is the second to third worst in the OECD, behind the US and challenging the United Kingdom. Since the mid-1990’s, there have been modest increases in disposable income inequality.
o The richest 10% of Australian households own 45% of Australia’s wealth, whilst the richest 20% own 60%.
o Most new jobs created over the past 10 years are casualised and part-time. Casualised workers have poor OHS, super and training entitlements. Although unemployment rates are down, real unemployment and underemployment remain high.
Although Australia has enjoyed higher economic growth rates than the OECD average, it is the composition of that growth that is a cause for concern. In relation to investment, Australia has not made the transformation to a knowledge-based, value added and environmentally sustainable economy. Despite warnings for more than a generation, Australia remains stuck as a commodity producing economy dependent on exports of coal, iron ore, wheat, wool and uranium. The growth of China has spurred demand for commodity exports, with new investment in the mining and energy sectors. We remain over-dependent on imports of computers and software, electronics, consumer durables, clothes, vehicles, defence equipment and industrial machinery. During this age of prosperity we have done nothing to address the imbalance between our high value added imports and low value added commodity exports. A stronger national framework is required to strengthen our industry competitiveness in manufacturing and value added services such as education and cultural industries. Many of the benefits of prosperity have been distributed to wealthy shareholders and wasted on conspicuous consumption of new houses, luxury imported cars and overseas holidays.
In relation to government activities, by OECD standards we are a low taxed country and this limits the resources we are putting into social security and into critical transport, housing, education and health infrastructure. Australia’s public infrastructure is in a state of disarray. We have reduced the share of national resources invested in public infrastructure. Our public transport is rundown and unreliable, forcing more people to depend on cars; public hospital waiting lists are extensive, and public education has been starved of resources. We are experiencing regular electricity shortages and we are making few inroads into solving our looming water crisis. In the case of Australia, one of our critical challenges is how to improve our knowledge infrastructure, which encompasses universities, TAFE colleges, schools, and Research and Development expenditures. In an era when housing affordability is at its worst, we have run down public housing and stigmatised public housing tenants.
Almost 50 years ago the American economist John Kenneth Galbraith published “The Affluent Society”[6], which referred to “private affluence, public squalor” to highlight the contrast between the abundance of private goods for people who can afford them, and the rundown of public goods and services that underpin the functioning of a healthy and prosperous society. Galbraith’s book, focused on the United States, argued that in order to be successful, the country needed to spend much more on public infrastructure including transport, health and education infrastructure as well as social services and recreational resources. This was preferable to relying on the production of trivial consumption goods. As we all know, successive US governments ignored Galbraith’s warnings about the affluent society and embarked on a development path driven by the excesses of consumerism and militarism. The outcome is a material rich but divided society characterised by poor public infrastructure and services, inequality of opportunity and social fragmentation.
Conservative economists who championed the neo-liberal model of economic development argue that the dynamism of the American economy is the result of private sector initiative, small government and low taxes. The same argument is applied to Australia. There is no doubt that the unleashing of “animal spirits” through private sector capitalism can produce material benefits in certain circumstances and the evidence of the US economy in expanding the production of consumption goods supports this. However, America’s economic growth has been sustained by state intervention particularly through substantial expenditure on a “war economy” and through large public sector budget deficits that stimulate economic activity, the latter through the ongoing tax cuts for wealthy households. Economic growth rates tell us nothing about the quality of life. If Galbraith’s advice had been heeded American would have still been prosperous, but much more emphasis would have been given to the production of public goods and infrastructure.
Australia has been a star pupil in the adoption of the neo-liberal economic model. We are now paying a high price in terms of our own public squalor and growing inequalities of wealth and income. National and state governments have sought to rely more on market based solutions rather than good public policy and practice to address society’s challenges. Public borrowings have been reduced and eliminated. Public sector assets and instrumentalities have been privatised. Lower taxes have boosted private consumption. The long-term squeeze on the public sector has resulted in fewer resources available for maintenance of public assets and recurrent expenditures to support wages.
It is in relation to our infrastructure and the services associated with infrastructure that the costs of neo-liberal economics are most apparent. Australia needs to address the “private affluence, public squalor” imbalances in our society.
Most of the emphasis of the Howard Government has been on consumption. In an age of cheap credit and “innovations” such as credit cards and Internet banking, the emphases are on buying now (the home, the car, the DVD) and pay it off later with interest. This is effective for households that have high disposable incomes and when the prices of assets such as houses and shares are expected to continue to rise. The success of Howard is to convince people to hang onto the lifeboat, focus on their household aspirations, and frighten people into believing the alternative will cost them more. But ultimately, shopping with the Howard neo-liberal experiment is a bit like taking the kids to MacDonalds – it seemed like a good idea at the time to get a quick hit, but later it doesn’t feel too good.
The main tenet of neo-liberal economic theory is that the market mechanism is the most efficient mechanism for producing and distributing goods and services and setting wage and salaries. The second major tenet is to reduce market impediments. Most importantly this includes reducing the role of government in managing the economy through reducing public sector expenditures and taxation, industry development and trade policies, and cutting infrastructure investment in areas such as education, health, community assets and public housing. It entailed dismantling the welfare state and standards of universal services in education, health and housing. It involves deregulation of financial and currency markets, and ultimately, as we are well aware, deregulating the labour market.
Alternatives to neo-liberalism
Alternatives to neo-liberalism might include consideration of the following:
1 Markets are necessary but not sufficient
Progressive movements often underplay and undermine the role of markets. This has led to some bizarre outcomes. An efficient economy should involve decentralised decision-making and encourage the constant interaction of enterprises and people selling and buying goods and services. Markets can work very well in guiding people about what skills to acquire, what industry to work in, how much wheat to produce on your farm and how much to pay for a car. When sold, most goods and services should at least cover their costs. Enterprising individuals and firms should be rewarded. Inefficient firms should be able to go bankrupt. Workers in inefficient industries should be supported, retrained and encouraged to move into higher skilled and higher paid industries. Progressive movements often have problems with markets and business. But in many areas business opportunities should be embraced – such as encouraging incubators for young people to test out ideas and products. We should recognise that high taxes on productive small businesses impede reinvestment opportunities, and productivity improvements through technology and investment in skills can support higher wages.
Firms sell goods and services for one reason – to make money. This is OK – it is preferable to selling goods and services that lose money. Markets recognise that humans will act in self-interest. Markets, however, cannot solve societies’ major challenges. Unfettered market forces reinforce wealth and income inequalities, and increase disparities in opportunities. This is simply because the distribution of resources and power is often uneven in markets. The 16 year-old student does not have equal power with MacDonalds to ensure good wages and conditions, just as small businesses don’t have the resources to bargain equally with Westfield over rent payments, and many people are not in a position to sell anything in markets – pensioners, disabled people and single parents. This is why societies such as our own struggled hard to protect and increase resources to the less powerful through strengthening trade unions and ensuring that welfare transfers were available to those not in the workforce.
Another distinguishing feature of markets is myopia – a short-term obsession with economic returns. Markets cannot solve long-term problems. In a recent book Jared Diamond asked why some societies have collapsed and, despite evidence that problems were getting out of hand - they were unable to make adjustments to prevent collapse[7]. The parallels with the current situation are obvious. Society can see growing problems but the market mechanism cannot bring about adjustments. Consider two case studies.
Firstly, we have known since the early 1970s that we were running out of fossil fuels and prices would escalate. We have had a generation to develop renewables, cut down on demand, improve public transport and implement energy efficient technologies. Major political parties paid lip service to the problem but oversaw a dramatic increase in 4 wheel drive vehicles, maximised sales driven competition between energy authorities and ran down public transport. The economic and political clout of the energy establishment has been too great.
Secondly, the scientific evidence on climate change has been overwhelming now for 20 years. And yet powerful vested groups – farming, mining, energy and automobile companies – backed-up by compliant media and political interests; confused and distorted the facts and sought to marginalise those who spoke up about the threat of climate change which, along with nuclear war, represents the greatest threat to humanity. Concerted action to address greenhouse gas emissions might threaten the economic interests of the greatest perpetrators. The failure of the world’s greatest energy consumer the United States, and the world’s greatest producer of fossil fuels on a per capita basis, Australia, to ratify the Kyoto protocols is truly an act of international bastardry. It is interesting to note that President Bush now acknowledges the reality of climate change but believes it is too difficult to fix.
2 Economic planning is important
Lack of planning in relation to industry development, infrastructure, science and technology, and urban development impedes the development of our economic potential. The implementation of neo-liberalism undermined important levers that influenced economic outcomes, specifically ensuring the financial system supported national economic goals; using science, technology and education policy to strengthen industry capabilities; and using regulated investment in skills to constantly upgrade competitiveness of industries. There is poor coordination between federal, state and local government to support economic development, national health and housing objectives.
3 A fairer tax system
Australia is one of the lowest taxed OECD countries. A moderate increase in taxation on corporations and high-income earners would dramatically increase resources available for public transport, public education, public housing, industry development and health, and support growing social security measures for a society undergoing significant demographic and economic change. A 3% increase in the tax rate would increase resources available for public goods and infrastructure by $25 billion per year. A 6% increase would increase resources by $50 billion. A wealth tax would broaden the tax base. The tax system is biased against major infrastructure projects.
4 Increasing expenditure on public infrastructure
Australia needs to substantially increase infrastructure investment to around 5% of GDP. Given the failures and risks associated with public private partnerships, most of the resources should come from public sector, financed through moderate increases in taxation and increased but realistic government borrowings. In a recent report, we have argued for the establishment of a National Infrastructure Council, a national capital formation agency; as well as reducing borrowing constraints and lifting rate caps on local government to enable the councils to address critical backlogs in local infrastructure[8].
5 Strategies to shift to a knowledge-based, high skilled economy
There is no future in being a low-value commodity economy. One of our greatest challenges is to reduce fragmentation in the labour market characterised by the growth of a minority of high paid, high skilled knowledge jobs with workers working long hours juxtaposed with a growing number of lower paid, casualised and vulnerable workers. The assaults on the IR system, if successful, will entrench the polarisation of the labour force. Knowledge and skills are our major national asset, not coal, uranium and beaches. A high standard of living depends on our ability to maintain and increase wages across the board. How can we manage the transformation to a knowledge-based economy when we run down the public education system, treat TAFE with contempt, and put barriers in the way of people wanting to go to university, particularly young Australians burdened by HECS fees? A knowledge-based economy is highly correlated with an open and tolerant society.
6 Build an environmentally sustainable economy
There are some very encouraging developments in relation to sustainability and economic activity, largely brought about as a result of the efforts of environmental groups, farmers, industries, communities and government. The public sector has a critical role in nurturing innovation through support for research and development and appropriate regulatory regimes. New regulatory measures at the state and local level are underpinning improvements in energy and water efficiency and building design. Improved coordination between all tiers of government is required to develop a national sustainability agenda. An important step would be to ratify the Kyoto protocols and to be a strong voice in strengthening global cooperation around environmental industries. It is extraordinary that Australia has led the world in new technologies such as photovoltaics and solar water heaters but hasn’t captured the national economic benefits from these innovations.
7 The importance of the Super funds
One of the major developments over the past 20 years has been the growth of super funds, which now account for around $878 billion in funds. Most super funds invest workers savings in a range of assets, predominantly shares both in Australia and overseas. It is easy to attract super funds into toll roads but much more difficult to attract them into public transport, social housing and aged accommodation. More emphasis is required to build support within the community to broaden the activities of super funds to invest a proportion of the funds in social and economic infrastructure. Currently super funds are obliged to invest in those activities that maximise commercial rates of return over a long period of time. Changes in legislation are required to broaden their charter.
8 A humane and inclusive economy
All citizens have a right to participate and share in the benefits associated with a developed economy. We must reject the overcrowded lifeboat economy where people are marginalised and tossed overboard. More emphasis needs to be given to democratising the workplace. Australian local government needs drastic reform to provide it with more resources and responsibility, and an inclusive charter that enables it to represent and implement programs to benefit all members of our community, particularly the most vulnerable citizens. More emphasis should be given to local economic and skills development strategies for Aboriginal communities, with funds channelled through elected Aboriginal organizations. Australia’s successes over the past 60 years were in large part due to our development of a multicultural society, which in turned supported diversity in our economy.
9 A good international citizen
Small-developed societies such as Australia need to champion strong and representative global governance that addresses the major challenges facing the world including nuclear disarmament, poverty, environmental degradation, AIDS, economic justice and democratic rights. This includes more resources and independence for major international institutions including the United Nations. It may be too late to save the “Washington Consensus” institutions such as the International Monetary Fund, the World Bank and the World Trade Organisation. It is clear that by being an active supporter of the “Coalition of the Willing” or “Coalition of the Oppressors,” as well as mistreating vulnerable members of our community - we are transforming Australia from a respected member of the international community into an unquestioning partner of US Imperial Power. This has lead us into unnecessary wars in Iraq and Afghanistan, led to a situation where governments lie to their own citizens, rejecting longstanding obligations regarding torture and the treatment of prisoners of war, and has sparked a tidal wave of rage and resistance and a downward spiral of violence that endangers all of us. George W. Bush says “if you are not with us, then you are with the terrorists”. This is dangerous nonsense. Our only course is to make our voice heard against fundamentalisms everywhere, whether it be against violent extremists or against those in the United States who seek global domination. We should seek allies committed to peace, economic and social justice and democracy, including the more humane and rational groups in the US, who seek their country to be an important leader in a multilateral world that is actively working towards addressing the serious crises and challenges that confront us all.
1) Richard A. Falk, The Declining World Order – America’s Imperial Geopolitics, Routledge, New York, 2004.
2) David Harvey, The New Imperialism, Oxford 2003
3) Jeffrey Sachs, The End of Poverty, Penguin, London, 2005, p307.
4) Phil Raskall, The truth about Australia’s inequality and how to tackle it, talk given to Sydney politics in the pub, 9 May 2003
5) Ann Harding, Recent Trends in Income Inequality in Australia, Presentation to the Conference on “Sustaining Prosperity: New reform opportunities for Australia”, Melbourne 31 March 2005; Raskall, ibid.
6) John Kenneth Galbraith, The Affluent Society, New American Library, 1958.
7) Jared Diamond, Collapse – How societies choose to fail or survive, Penguin, Camberwell, 2005.
8) Strategic Economics, Financing our Future – the case for change in financing Australia’s infrastructure needs, prepared for the Australian Education Union, AMWU, Australian Nursing Foundation, Community and Public Sector Union – SPSF Group, and the Rail, Tram and Bus Union, June 2005.
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