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QUARTERLY ESSAY 73 Australia Fair

 

Correspondence

Carol Johnson

In Australia Fair, Rebecca Huntley provides an insightful analysis of the mood of the nation, arguing that in many respects Australians already occupy a social-democratic space – one informed by values of fairness and compassion, as well as concern about issues such as climate change. Labor’s positive strategy in its 2019 election campaign suggested that it shared a similar analysis of the public’s support for progressive change. Indeed, if Labor had won, Huntley would have given a far more profound analysis of why than any other commentator.

As it turned out, Huntley provides an analysis that explains a great deal about the Coalition’s strategy. Faced with such a zeitgeist, it is not surprising that the Liberals’ best answer was to try to instil a fear of change, relying on arguments that Labor’s policies would wreck the economy, that ordinary Australians would be crippled by Labor’s higher “taxes,” and that properties would lose their value while rents would rise. The Liberals claimed they were already tackling climate change but in economically responsible ways, while Labor’s policies would destroy jobs and incomes, increase energy costs and even take away the tradie’s ute and the family car. No wonder, too, that the Liberals denied making substantial cuts to health and education and walked away from former treasurer Joe Hockey’s explicit rhetoric attacking citizens’ entitlements. Scott Morrison stated that there would be “a fair go for those who have a go.”

Overall, the Coalition was offering more of the same while Labor was arguing that things could not stay the same – that Australians need an economy and society that are environmentally sound, fairer and more inclusive. Huntley challenged Labor to listen to the nation and gain Australians’ trust. If Labor had won the 2019 election, she argued that an incoming Labor government should have seized the opportunities offered, both keeping its promises and developing an even more ambitious agenda. Labor should have been “bold,” “unapologetic” and “courageous.”

That Labor program was not to be, at least at this election. The Coalition’s framing of the issues, and its related scare campaign, won the day. It was Labor that was construed as unfair to ordinary voters ranging from retirees to home owners. The risks of change were construed as being greater than the risks of sticking with the political status quo. However, it should be noted that future governments, whether Liberal or Labor, are likely to face significant difficulties in managing the winds of change and in keeping the electorate’s trust. Australia’s economy is one that will neither stay the same nor be easy to make fairer. Climate change is only one of many difficult challenges that need to be faced. Australia will also have to negotiate both the Asian Century and technological disruption and, above all, the interactions of the two.

As I explain in my new book, Social Democracy and the Crisis of Equality: Australian Social Democracy in Changing Times, a future Labor government committed to increasing equality would face significant issues. Successive Australian governments have tended to depict the rise of Asian economies largely in positive terms: for example, as opening up amazing new markets for Australian goods and services as the Asian middle class grows. There are indeed major new opportunities; however, there is also increasing competition from goods and services produced in those countries, with implications for Australian jobs and incomes.

Unfortunately, technological disruption is increasing some negative impacts – for example, by facilitating the off-shoring of work in Australia to employees with lower pay and conditions overseas. While offshoring once mainly affected blue-collar workers in manufacturing or white-collar workers in call centres, it now also affects skilled workers in areas such as accounting, graphic design and law. For example, financial services companies are being offered packages in the Philippines or India in which highly skilled workers process financial data for as little as $7 or $12 an hour (and without the employer having to pay costs such as superannuation or payroll tax). In the longer term, Australian workers in areas ranging from mining to service delivery do not just face being replaced by local algorithms and robots – commentators such as Richard Baldwin suggest they could be replaced by lower-paid overseas employees working virtually onshore using telerobotics and telepresence.

Importantly, classic social-democratic measures such as investing in improving skills and training would not be sufficient to deal with such problems, given that Australian workers would not only be competing with highly skilled, and often English-speaking, workers from overseas, but also with ever smarter machines. Labor governments would certainly need to introduce bolder, more courageous and more imaginative policies.

Coalition governments might not be quite so concerned about some of the industrial relations and other equity issues as Labor would be. Indeed, Joe Hockey once argued that Australia could not afford some of its current welfare benefits, given the competition from Asian countries that spent a lower proportion of their GDP on welfare. However, all Australian governments would be concerned about potentially negative impacts on the Australian economy and their flow-on effects.

In the longer-term best case, the underlying zeitgeist Huntley describes may be able to be harnessed to support government measures that address these challenges in ways that do contribute to a fairer Australia. The many benefits of geo-economic change could be made to outweigh the downsides. Australians could even extend their concerns about fairness to the pay and conditions of workers overseas. Hope could triumph over fear. In the worst case, the social-democratic ethos may not withstand the joint pressures of social and economic change. We may see a less generous and more divided nation emerge that has lost faith in the ability of government to support and protect citizens.

The challenges for governments wishing to provide a better future are therefore substantial ones, and likely to become even more so in the coming years. Whether Australian politicians of any political persuasion are up to the task remains to be seen.

 

Carol Johnson is an adjunct professor in politics and international relations at the University of Adelaide. She is the author of Social Democracy and the Crisis of Equality and The Labor Legacy.

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This correspondence discusses Quarterly Essay 73, Australia Fair. To read the full essay, subscribe or buy the book.

This correspondence featured in Quarterly Essay 74, The Prosperity Gospel.


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