A year in Abbottland

Twelve months into the Abbott government, its misdeeds could fill an entire book. But here I’ll attempt to summarize them, as it’s important we remember them all to maintain the rage. If you think this article is too long, blame Tony Abbott.

For 28 months, they promised to reveal all their policies and budget cuts ‘in good time before the next election’. In reality, they walked away from unwanted questions, hid major policies and cuts until 36 hours before the election, hid others until after the WA by-election, and continue to hide behind a series of reviews stacked with hand-picked ideologues who anyone can see will recommend a radical right-wing agenda.

They promised to govern for all Australians, and not pick winners. In reality, their every decision makes the rich richer, the privileged more privileged, and the powerful more powerful, while finding ever more humiliating ways to bully the poor, disadvantaged, and powerless. Abbott (along with his unprecedentedly powerful chief of staff Peta Credlin) has appointed a cabinet containing just one woman, no non-Christians, and no climate or science minister; surrounded himself with advisors who look, talk, and think like him (i.e. old, male, conservative, climate-change-denying business lobbyists); sacked public servants perceived as disloyal; abolished multiple expert advisory bodies; reinstated knights and dames; and failed to condemn extreme views expressed by colleagues and advisors.

They promised strong, stable, accountable government with a long-term vision for the future direction of the nation. In reality, they are not delivering this because their ideology is to palm off major decisions onto unelected corporate leaders ruthlessly pursuing short-term self-interest. The supposed wisdom of the market is disrupting, among other things, the formerly stable climate that has sustained humanity for millennia.

They promised to address climate change at no cost. In reality, they have approved, subsidized, and talked up relentless expansion of the fossil fuel mining industries driving the problem (including Clive Palmer’s mega coal mine); purged the words ‘climate change’ and ‘renewable energy’ from government communications; misquoted Wikipedia to deny the link between climate change and worsening extreme weather; attacked the Australian Research Council for funding too much climate science; abandoned the upper end of Australia’s emissions target range; snubbed then played an obstructive role at Warsaw climate talks; refused to contribute to a global climate fund; left climate off the agenda of the upcoming G20 conference; scrapped or scaled back their proposed climate programs; abolished most existing policies on climate, renewables, and energy efficiency (cutting total spending by three-quarters); and tried to abolish the few remaining ones (including the Renewable Energy Target, being reviewed by a panel stacked with deniers). These policies are to be replaced by paying polluting companies to do essentially nothing.

They promised household compensation without a carbon tax. In reality, they are trying to increase fuel tax for ordinary motorists while compensating mining companies and repealing the carbon price paid by polluting companies. (There is of course an environmental argument for raising fuel tax, but the inequity in Abbott’s strategy cannot be overlooked.)

They promised to improve the environment. In reality, they have slashed federal environmental programs; turned the Great Barrier Reef into a coal shipping lane; sought to revoke the World Heritage status of Tasmanian forests and claimed loggers are conservationists; suspended all new marine parks; presented redirected funds for tree-planting as new; delegated their environmental protection powers to the states; and granted themselves legal immunity from challenges to past environmental approvals.

They promised to look after rural communities, in particular, to protect agriculture by reining in coal seam gas (CSG). In reality, the Coalition is dominated by the Liberals (who have boasted about hoodwinking the Nationals); their policy is to extract every molecule of gas and they’ve attacked NSW’s CSG restrictions; and they are ignoring the climate crisis threatening the very existence of agriculture and rural towns.

They promised to protect Australia's sovereignty. In reality, they are agreeing to investor-state dispute settlement (ISDS) in free trade negotiations, giving multinational corporations the power to sue a government for any policy that hurts their profits. This will have a gagging effect on the ability of governments to introduce laws to hold corporations accountable. They continue to negotiate the Trans-Pacific Partnership (TPP) which involves ISDS.

They promised to liberate us from big government, and no mandatory data retention. In reality, only corporations and other elites will be freed from regulations which hold them accountable to the voting public, while women are held back, minorities and disadvantaged groups punished, and asylum seekers imprisoned with no right to know why. They’ve stymied the ACT’s marriage equality laws. They’ve cut funding to the Human Rights Commission and appointed as ‘freedom commissioner’ an ideologue who advocated shutting down the Occupy protests and believes corporations have human rights. They’ve withdrawn a grant to the Jewish Holocaust Centre, among others, that they see as pork-barrelling to minority groups. They’ve abolished an advisory body on corporate crime, cut funding to the corporate regulator, and watered down consumer protections on financial advice amid a banking scandal. They’ve abolished the independent monitor of anti-terrorism laws. They’ve announced draconian security policies which would remove a sunset clause on police powers to detain and search people, make it easier to arrest suspects without a warrant, ban Australians from visiting certain countries, allow ASIO to suspend passports, and remove the presumption of innocence for terrorist offences. They’ve defended spying on behalf of fossil fuel companies, and they want the power to routinely spy on every Australian online, a policy even they can’t explain — supposedly to prevent terrorism and crime when it’s difficult not to conclude the government represents a more present threat.

They promised to increase free speech (especially for criticism of powerful people), protect media and political freedoms, and support public broadcasters. In reality, they’ve attempted to promote free speech only for racists; cut funding for research they don’t like; cut funding to anybody who supports a divestment campaign against Israeli apartheid; appointed a blatantly biased Speaker; negotiated draconian copyright laws in TPP talks; secretively courted supposedly independent commentators at parties; intimidated the ABC for reporting allegations against them; cut funding for ABC, SBS, and community radio (and launched a further ‘efficiency study’ into the ABC by a former head of Seven); put right-wing ideologues in charge of public broadcaster appointments; banned Community Legal Centres from advocating policy changes; cut legal aid for Indigenous Australians, asylum seekers, and environmentalists (as demanded by the mining lobby); cancelled all funding to international NGOs; defunded artists who refused sponsorship from a company owning refugee detention centres; defunded the Refugee Council because of its advocacy; forbidden public servants to criticise the government online; demanded a refugee activist remove from their Facebook page a photo of protesters blockading a bus transferring asylum seekers; removed the tax-exempt status of environment groups; replaced secular social workers with chaplains in schools; and established a national curriculum inquiry by two ideologues advocating right-wing propaganda be taught in schools. They are investigating trade unions (a rare voice opposing the present economic system) while ignoring corruption in more powerful institutions; they will reinstate a commission with draconian powers to investigate building unions; they propose to outlaw environmental boycotts; they’ve backed Queensland laws banning G20 protests; and their state-level colleagues are passing draconian anti-protest laws designed to silence political opponents.

They promised transparent government. In reality, they have attempted to shut down the flow of information by axing the Climate Commission; renaming coal seam gas to ‘natural gas’; barring Indonesian journalists from a press conference; requiring ministers to seek approval from the PM’s office before giving interviews (with calls frequently going unanswered); refusing FoI requests for incoming government briefs; claiming Abbott was ‘too flat out’ to talk to the media; deleting pre-election speeches from their website; announcing major environment-destroying policies over the Xmas break; defying a Senate order to release the TPP text; taking down a government website on nutrition; refusing to explain its claim that Edward Snowden has endangered Australian lives; allowing the infant formula industry to oversee its own honesty in advertising; misrepresenting a media release as a ‘Treasury analysis’; refusing to release a budget audit (by a leading business lobbyist) during a by-election; blocking Senate scrutiny of new government surveillance powers; criminalizing whistleblowing; and gagging the media on allegations that senior Australian bankers bribed government officials. On ‘Repeal Day’, they removed 10,000 regulations in one fell swoop without time to review the implications of the changes. They’ve admitted they want sport on the front page.

They promised to save the lives of asylum seekers, and not detain children. In reality, they instructed the Navy not to respond to distress calls, leading to a boatful of people drowning at sea. They’ve employed unlicensed guards; threatened to report gay asylum seekers to PNG police; denied facial reconstruction surgery for gunshot wounds; and scrapped an advisory group on asylum seeker health. Several asylum seekers allege their hands were deliberately burned while in a boat being towed back to Indonesia by the Australian Navy. One person has been killed and seventy-seven injured on Manus Island. They have now been detaining children for a year (and pregnant women), separated a newborn baby from his mother, and sent unaccompanied minors to Nauru. They revoked the community detention status of two children and kidnapped them from school, frightening other children at the same school into running away. They’ve attempted to reintroduce temporary visas meaning genuine refugees won’t be permanently settled in Australia, and eventually gave the Immigration Minister discretion to deny permanent residence based on secret conditions with no right of appeal. They try to coerce asylum seekers into ‘voluntarily’ going home, want to send them home if there’s only a 49% chance they’ll be tortured, have sent some back to war-torn Iraq, handed others (after superficially screening them by teleconference) over to Sri Lanka where they are likely to be tortured, and are negotiating to send detainees to Cambodia which is known for human rights abuses. These policies breach the UN refugee convention.

There is considerable overlap between the broken promises on transparency and saving asylum seekers, with Abbott and Scott Morrison denying media access to immigration detention centres, instructing asylum seekers not to talk to visitors, hiding information about boat arrivals (and justifying this by comparing them to a military enemy), fleeing reporters asking questions about the drowning incident, instructing public servants to incorrectly call them ‘illegals’, defying a Senate order to release documents on the issue, stopping media briefings on boats, refusing to place any credence in the burns allegations because Australian naval officers are above suspicion, making false claims about events on Manus Island, and agreeing with PNG to shut down an investigation into human rights abuses there. They denied the existence of an entire boatful of asylum seekers before detaining them at sea for a month then trafficking them to Nauru — and we would never have known about it if the refugees hadn’t contacted the media. Details are now finally beginning to come out at a Human Rights Commission inquiry, where it’s been revealed that the treatment of detainees is ‘torture’, staff call the detainees ‘clients’ to dehumanise them, guards have sexually abused child detainees, medication was confiscated from a 3-year-old epileptic girl, a psychiatrist was told to suppress evidence of detained children showing mental health issues, children are self-harming and attempting suicide, and generally the place is even worse than where the refugees came from. That shouldn’t be surprising because the entire purpose of the policy is to crush their hope.

They promised a foreign policy based on advancing freedom, decency, and poverty reduction rather than just security and economics. In reality, despite one commendable UN resolution on MH17, let’s not forget some of their less humane foreign policy decisions. They have apologised for (in opposition) having rightly criticized Indonesia, Malaysia, and PNG for human rights abuses; refused to help West Papuan activists against Indonesia’s abuses; banned a Malaysian democracy activist from visiting Australia; were slow to advocate for Australians jailed overseas; condoned torture and war crimes in Sri Lanka because otherwise would mean admitting people fleeing the country are legitimate refugees; gave the Sri Lankan government navy patrol boats to block said refugees; sent border protection vessels into Indonesian waters; authorised raids on an East Timor lawyer possessing evidence of Australian spying; opposed a UN resolution for an inquiry into Sri Lankan war crimes; defeated a UN move to ban use of nuclear weapons; raised the possibility of allowing Chinese troops to train in Australia; praised the ‘skill and honour’ of Japanese WW2 soldiers; and claimed Australia’s involvement in WW1 was in ‘a good cause’. They have cut $8 billion from foreign aid and removed poverty reduction from Australia’s foreign policy goals.

They promised to end class war. In reality, their policies are redistributing wealth upwards.

They promised to improve our country by growing its economy, creating a land of opportunity that would allow everyone to get ahead. In reality, the social health of developed countries like Australia is impaired less by poverty than by the economic, social, and political inequalities (not to mention environmental crises) promoted by an unrestrained market. The Liberals aim to remove all restraints from the free market system that tends to entrench these problems.

They promised to protect and create jobs by fighting restrictions on mining, supporting manufacturing industries, and promoting free trade. In reality, unemployment has grown to its highest level in 12 years; they are sacking government employees; they are allowing employers to hire an unlimited number of foreign workers; they dared a company to leave Australia; they are killing the renewable energy industry; and they are sitting back and watching the death of Australian manufacturing, caused partly by the mining boom and free trade which they continue to promote.

They promised to protect workers’ pay and conditions. In reality, they have reduced the wages of aged care and childcare workers and low-paid cleaners, have advised Fair Work Australia to cut penalty rates, will pay Green Army employees half the minimum wage and exempt them from work safety laws, have defunded Ethical Clothing Australia, have proposed to exclude the Northern Territory from labour laws, and are bullying companies (by threatening to withdraw industry subsidies) into cutting wages and blaming the carbon tax for job losses. They are forcing under-30s to wait up to six months before getting the unliveable unemployment benefit, then apply for 40 jobs a month to be eligible for benefits for six months, then repeat the cycle until they get a job. Yet, they are simultaneously cutting programs that would have helped people find work, implying they are trying to drive up demand for jobs so that people will settle for lower wages.

They promised to cut wasteful spending to reduce out-of-control debt and deficit. In reality, Australia’s national debt is smaller than that of most countries, and Hockey’s budget is neoliberalism masquerading as fiscal responsibility: it doesn’t significantly improve the fiscal position, it just transfers wealth from poor individuals to rich corporations. It pays for corporate tax cuts, fossil fuel subsidies, roads, fighter planes, and refurbishing the PM’s house through new taxes and spending cuts that hurt the poor, the unemployed, young people, university students, schools, families, women, domestic violence victims, the sick, the disabled, pensioners, charities, small businesses, emerging and struggling industries, public broadcasters, public servants (thousands of whom lost their jobs), local councils, Indigenous Australians, poorer countries, scientists whose research would advance human knowledge, and the environment which sustains us all. Despite increasing defence spending, it cuts soldiers’ wages by $20,000, and cuts welfare for orphans of soldiers. The only costs for politicians and high-income earners are blatantly tokenistic and temporary.

They promised to not cut education or health funding. In reality, they’ve made massive cuts including the Gonski schools program and National Disability Insurance Scheme. Their budget starves state governments of schools and hospitals funding to force the issue of delegating those responsibilities to them; increases student debt by deregulating university fees and lowers the income threshold for repayment; cuts numerous educational programs (though they somehow found money for more school chaplains, ignoring a contrary High Court decision); introduces co-payments for GP visits, emergency department treatments, diagnostic tests, and prescription drugs; reduces Australia’s contribution to the World Health Organization; cuts preventative health measures (eg. anti-smoking campaigns); and cuts myriad health programs (including for mental health which we’ll probably need more than ever in Abbott’s Australia). And they’ve proposed giving control over GP treatments to private health insurance companies.

They promised to relieve the cost of living for ordinary Australians through tax cuts, no new taxes, and no cuts to pensions. In reality, their tax cuts favour big business (and they’ve watered down Labor’s planned crackdown on multinational tax dodging); they’ve cut a tax break for low-income superannuation; they’ve imposed fees on those who become bankrupt; they’ve scrapped the first home buyers scheme; and their budget introduced several regressive taxes and harsh cuts to welfare. The latter include increasing the retirement age, cutting retiree concessions, cutting various family benefits (illustrating the government’s disregard for unpaid work), suspending welfare payments for parents of truant children, restricting and constantly reviewing access to disability payments while cutting services for disabled people, cutting payments for dementia carers, and a web of technical changes to indexation and eligibility thresholds across all payments. Moreover, they’ve set up a welfare review that is not consulting with community groups, and has canvassed simplifying 75 payments into four and restricting what recipients can spend their money on.

Abbott promised to be a Prime Minister for Aboriginal affairs and spend his first week as PM in an Aboriginal community. In reality, he has gone nowhere near said community, consolidated 150 Indigenous programs into five, paid Indigenous staff in his office less than others doing the same job, and described Australia as ‘unsettled’ before the British arrived.

They promised paid parental leave. In reality, it is nowhere in sight.

They implied by their attacks on Labor that they would not misuse taxpayer money or protect corrupt individuals. In reality, they have been caught claiming expenses for attendance at weddings and suchlike; ministers are now allowed to hold shares in companies; and they’ve redirected funds from one Royal Commission on institutional child sexual abuse to another on home insulation. Abbott, in response to a report exposing the role of his friend Cardinal George Pell in covering up Catholic child rape, falsely claimed Pell was the first senior cleric to take the issue seriously.

They promised hope, reward, and opportunity. In reality, ‘opportunity’ was code for ‘if you’re unlucky you’re on your own’, ‘reward’ meant ‘we’ll feather your nest if you’re already doing well’, and ‘hope’ meant ‘dream on’.

They promised to govern competently. In reality, when occasionally diverted from their script by an intelligent questioner, their ministers reveal a laughable ignorance about even their own policies.

To add insult to injury, Abbott promised to be trustworthy and not talk down to voters but in reality has treated us with thinly disguised contempt. In opposition they blatantly misled us about their intentions, repeatedly assuring us there would be no surprises and no broken promises. Then in government they blindsided us with extreme right-wing policies, breaking too many promises to count. They have arrogantly insisted that they are the adults (particularly disturbing when you recall Abbott endorses smacking naughty children), and expect us all to support their government and everything it does because it represents ‘Team Australia’. They have taken our votes for granted, refusing to even acknowledge that 100,000 Australians marched against their government, and that Western Australia resoundingly rebuked them at a by-election. They have demanded the Senate rubber-stamp policies opposed by the majority of Australians. They feed us a never-ending stream of blatant lies and assume we are too stupid to notice.

Abbott is evidently following the Institute of Public Affairs’ blueprint to transform Australia in three years, like a right-wing Whitlam. Some educated guesses at what’s coming soon: abolition or sabotaging of the Renewable Energy Target; more cuts to the ABC; more welfare cuts; more regressive taxes, such as an increased Goods and Services Tax; more tax cuts and loopholes for the rich; more cuts to corporate regulations and the public service; more restrictions on workers’ rights; abolition of penalty rates; privatisation of public assets; school curricula promoting right-wing beliefs; delegation of more federal responsibilities to the states where Christian fundamentalists and other right-wing ideologues can push their agenda under the radar; and the implementation of as many IPA policies as possible.

When the next election rolls around, Abbott will do whatever it takes to try to lure us into voting him back in — but I reckon it won’t fool anyone. Abbott has shaken Australians out of our apathy; we have woken up to the fact that politicians are not acting in our interests. The rise of the internet means Australia can no longer be governed through the mushroom treatment, because we can all remind each other about the government’s litany of lies and bad behaviour.

The Abbott government represents an extreme version of the neoliberalism that has dominated politics for three decades, an ideology that when put into practice has been described as ‘totalitarian capitalism’. Its rhetoric about ‘individual freedom and free enterprise’ is acted on only when convenient to its true obsession — rewarding the ‘good people’ at the top of society and punishing the ‘bad people’ at the bottom. For all their talk about ‘progress’, they want to drag us back to the 19th century, before the welfare state.

If you’ve been reading this article and congratulating yourself that Abbott has yet to hurt or take rights away from you, how many more groups does he have to attack before you speak out against his government?

If you’ve been reading and nodding along, don’t just sit on your hands. Why not come along to your local March in August this weekend? Let’s show Abbott we know what he and his colleagues are up to, and we won’t stand for it.

Image source

Editor’s Note: Every claim made by James Wight in this piece is backed by reference to news sites and reports. So well researched is James’ original piece that a single paragraph could contain twenty links.

The editors at TPS removed all of those links but only for ease of reading. If anyone wishes to see all the links, James has kindly posted the unedited version with all links on his own blog at http://precariousclimate.com/

Whose freedom?

Many years ago, I think during the Reagan years, the US was on one of its regular attacks on China’s human rights record and the lack of freedom for its citizens, and I recall someone from the Chinese side replying to the effect that Chinese citizens could walk their city streets at night without fear. That response raises important questions about how we view freedom.

What is this nebulous thing that is freedom? (Note that ‘freedom’ and ‘liberty’ are generally interchangeable, partly because some languages, such as German and French, have only the one word for the concept while English uses both.)

The philosophers argue that there is a logical difference between freedom and matters such as justice, equality and morality but generally concede that these play a part in our perception of freedom.

A basic definition of freedom, that is still used, is that of John Stuart Mill who wrote in On Liberty in 1859:

The only freedom which deserves the name is that of pursuing our own good in our own way, so long as we do not attempt to deprive others of theirs, or impede their efforts to attain it.

There have been two basic approaches to freedom:

  • One, that freedom comes from being rational and making one’s own choices on that basis, which includes the rational decision not to harm others by one’s actions. The ultimate (utopian) outcome is a society that does not require rules because everyone behaves in a rational manner — the perfect form of anarchy, not that any of the mainstream philosophers actually recommended anarchy.
  • The other, that freedom occurs when one is free from coercion and interference, that one is not forced to undertake activities or make choices over which one does not have some control.
In 1958 Isaiah Berlin called these ‘positive’ (meaning ‘freedom for’) and ‘negative’ (meaning ‘freedom from’) concepts of freedom. The ‘positive’ concept comes from a long tradition going back to the ascetics and was popular after the Enlightenment, arguing that a rational approach gave an individual the ability to determine which desires are ‘true’ (should be pursued) and which ‘false’ (should be ignored), which was seen as essential to genuine freedom.

The problem, even for those early proponents of the rationalist view, was that not everyone may have achieved the level of rational thought necessary to achieve that degree of freedom. For Isaiah Berlin, that gave rise to the totalitarianism of both the Right and Left (remembering he was writing only a decade after WWII and during the Cold War) because someone other than the individual could decide what was required to achieve freedom and impose on others their view of freedom and of what was necessary to achieve that higher level of rational thought.

Another criticism is that, like religious ascetics, one can achieve this personal freedom by reducing or eliminating desires and wants. In this situation, the person no longer desires to take any action that may run up against constraints, so it can be said that all actions they do desire to take are ‘free’. This can, however, lead to the acceptance of situations that are inherently not free — for example, a well-treated slave being content with their lot.

The slave analogy was also used to criticise the ‘negative’ concept because it is possible that a slave may be allowed to live a normal day-to-day existence without coercion or interference but still remain a slave. Under the definition, that is ‘freedom’ but it ignores that the slave is still liable to renewed demands (interference) from their master.

That has led to many attempts at refinement of the definition of freedom. This has meant such approaches as identifying those areas where we should expect to be free to make our own decisions: this is our emphasis on so-called ‘inherent’ human rights, such as freedom of expression, freedom of association, freedom from arbitrary arrest, freedom in our personal/private lives and so on. To make it easier, we often break it down into those component parts, so, rather than talking about freedom as a whole, we argue about the specifics of each of those freedoms. There has been, and is, much debate about what should be included.

In January 1941, Franklin D Roosevelt spoke of four freedoms: freedom of speech, freedom of worship, freedom from want and freedom from fear. He spoke in the context of the war that was then raging in Europe, and in terms of a new world order following the war, but the underlying aspects of those freedoms remain relevant, particularly the latter two which are not commonly picked up in the current liberal views of freedom.

Attempts to define freedom also led to consideration of the nature of the constraints that are imposed. At different times, words like ‘intentional’, or ‘offensively’ have been added to the definition of what limits one’s freedom: that is, the act that limits your freedom must be intentional and not merely an accident, or in some manner be offensive rather than defensive, to count as a genuine constraint. An element of ‘domination’ has also been considered: that covers the slave ‘problem’ in the sense that even if a slave is allowed to act in a free manner by their master the slave is still subject to ‘domination’. This, however, can also be answered by the earlier approaches to freedom, on the basis that a rational human being would not choose to be a slave and therefore runs counter to Mill’s condition that freedom includes not impinging on the freedom of choice of others.

The difficulty is matching the philosophic logic to the reality of society. Even the philosophers recognised that some rules were required, that we could not each be left to pursue our own ends without some constraints that protected the rights and freedom of others. This is the ‘social contract’ that became necessary when humans began living in societies rather than small or extended-family groups of hunter-gatherers. In the larger groups we gave up some of our freedom for the benefits, including the security, that society conferred. And when our societies became democracies, we were said to be free because people gained an active role in their own government or, in other words, became involved in determining the authority that was exercised over them, rather than being subject to the arbitrary will of a monarch.

The two shapes of freedom actually overlap to a considerable extent (as you may have guessed from what has already been said) but also give rise to the different political approaches of the Right and Left.

The Left emphasises the ‘positive’ freedom in its approach, considering that an individual cannot achieve freedom, or the higher level of their rational being, if they are poor, uneducated, condemned to no choice but physical labour, are part of a persecuted minority, and so on. Or, as some have said, freedom is meaningless to someone who is starving or has no home, although by the technical definition they may well be ‘free’. That gives rise to the Left and progressive view that physical and social conditions are also determinants of freedom and need to be addressed. In this view, removing constraints to freedom includes improving the individual’s capacity to exercise his or her freedom.

The Right, the neo-liberals (libertarians) and the economic rationalists, are more concerned about ‘negative’ freedom, the reduction of constraints, particularly by government, to individual decisions. They place a high priority on property rights, both physical and intellectual, (which was included by some early philosophers) as a way to maintain freedom, and include in that the capacity of labourers to ‘own’ and trade their labour. But this ignores the history of how many property rights were acquired: the landless peasants of South America, for example, had their land stolen and, if freedom means defending property rights, whose rights should prevail, those of the peasants or the current landholders? That is not an issue the Right likes to address.

G A Cohen, a Marxist political philosopher, also argued that lack of money is a constraint to freedom and attacked the logic of the Right’s view, describing it in this way:

Freedom is compromised by interference, but not by lack of means.
To lack money is not to suffer interference, but lack of means.
So poverty does not carry with it lack of freedom.
The primary task of government is to protect freedom.
So, relief of poverty is not part of the primary task of government.

C B Macpherson, a trained economist and also a political philosopher, developed an argument in the 1960s that early philosophers on freedom, like Hobbes and Locke, were bound by the values of their time and so developed their concept of freedom around the market, contractual obligations and property: the concept that an individual is the sole proprietor of his or her skills and owes nothing to society for them — what Macpherson called ‘possessive individualism’. Macpherson was criticised by both Right and Left. He also engaged in a debate with Milton Friedman. While Friedman claimed that history showed ‘that capitalism is a necessary condition for political freedom’, Macpherson countered that Friedman’s own examples showed ‘that political freedom actually came first and that those who gained that freedom, the property-owning elites, used it in their own best interests’, opening the doors to unrestrained capitalism.

Marx’s view of alienation relates to the disconnect between labour and its product. In Britain, it arose following the enclosures, whereby the peasants lost their access to the commons. Despite a considerable lack of freedom in feudal times, the serfs had access to land to provide for themselves and it has been estimated that they were able to retain anything from 50% to 70% of the product of their own labour. The loss of access to land meant that they had only their labour to sell, even to obtain the basic necessities of life. In essence, one form of a lack of freedom was exchanged for another. If I have no choice other than to sell my labour to survive, is that freedom?

In Nazi Germany, an Aryan German citizen could be quite happy and free as long as he or she was willing to accept the pogroms against the Jews, the attacks on the communists, and the denigration and persecution of other minorities, including non-Germanic foreigners. Was that a rational decision? Was it just acceptance of the views of the majority? Or was it manipulated by propaganda? They are questions vital to our sense of freedom.

It also brings us to a very murky area regarding our own society: the role of advertising, government manipulation of popular opinion, and even, as we saw in the lead up to the 2013 election, manipulation by the media. Brainwashing is definitely recognised by the philosophers as being counter to freedom even though the brainwashed person apparently ‘freely’ makes his or her own decision. Advertising and other manipulations may not be brainwashing per se but, to my mind, they are sailing very close, particularly as psychologists provide the manipulators with more and more knowledge about how we, as humans, make our decisions and choices. (I read recently that there are more psychologists employed in advertising in the US than are employed by hospitals.)

Kovie Biakolo, a young American woman who has her own blog, made some perceptive comments about freedom (or lack of it) in this modern context:

I believe that our society enslaves us in many ways. In the first place, consider how we work and why we work and how we are taught to work. … The premise is to pay bills and to buy things, many of which we are convinced to want in the first place. We become enslaved to our organizational practices and to our careers and, of course, to the almighty dollar. … Beyond our financial enslavement, think of the messages we consume everyday. We are told what is beautiful, what is politically popular to ascribe to, and the type of person we ought to want to be.

That raises an issue related to personal freedom and also to the concept of the rational being: that is our view of ourselves, our identity (or identities), and our autonomy in relation to that. It is accepted that many of our identities are socially constructed but we exercise our autonomy by deciding whether or not we accept a particular identity and exercise our freedom in deciding how we authenticate that identity socially. Thus I am a brother, a husband, a grandfather, identities over which I had (and have) no, or little, choice and which have social expectations attached to them but I do, or should, have some freedom to decide how I fulfil those identities. Other identities I may choose, including things like my political character and again I should be free to choose how I express that (writing for TPS for example). Freedom, then, can also be reduced if the choices to express identity are limited, whether by government or social constraints (majority values) — this is one place where issues like gay rights fit into the debate on freedom.

In my pieces earlier this year, ‘Whither the Left’, I raised the issue of the new working class, the university educated whose knowledge and intellect has now also become a commodity, just as labour did, to be sold in the market. Does this change the nature of the debate about the rational person being free? Once education was seen as a means to improve freedom by enhancing understanding and rational thought but if education now merely creates another commodity to be sold, where does freedom lie?

Jeff Sparrow recently addressed some aspects of freedom in a piece regarding comments by the Human Rights Commissioner, Tim Wilson. He concluded with a major issue for the Left and progressives:

… the Left does need to think about freedom. It’s symptomatic of our marginalisation that [the term is] increasingly deployed by conservatives rather than progressives. There’s an urgent need to reclaim freedom, to rearticulate the concept as a synonym for liberation rather than exchange.

What can progressives do to give ‘positive’ freedom a positive image?

What can progressives do to show that freedom is about more than free markets?

How can we put freedom back on the political agenda in a country that already thinks it is free?

What do you think?

What is the Hockey budget all about?

Does anyone out there know? Does Hockey know? Does Cormann? Does Abbott know? Do his Cabinet and his backbench know? The commentators and the voters have their ideas, but do they really know what is behind the Hockey Budget?

Readers will not find a definitive answer here; I don’t know more than anyone else. Rather this piece presents some plausible reasons why Hockey would bring down such a budget. I will leave it to you, the reader, to reach a conclusion, and if you are so inclined to make your suggestions in the comments section.

There is a surprising consensus among political commentators, economists, the Federal Treasury and the people about the effects of the budget, namely that it disproportionately penalises the middle and lower income earners. Proportionately, the wealthy are penalised less. Why is this so? What ideological position finds this acceptable? What economic argument supports this approach?

A superficial answer to the question: ‘Why would Hockey bring down such a budget?’ — the answer the government has used from the outset — is that there is a ‘budget emergency’, that the nation’s finances are ‘in crisis’, a ‘debt crisis’, and therefore radical corrective measures are needed, and now. Yet from the outset this was seen as the charade it is by economists and all but the most sycophantic Coalition commentators. There is no crisis, no emergency demanding immediate and drastic action.

Politicians, economists and journalists alike do agree though that structural defects exist in the budget that have their origins with several previous governments, defects that need correction to enable the delivery of the services that Australians want to be continued into the decades ahead: universal health care for an ageing population, disability care, a good education for all, jobs for all who can work, and infrastructure to support our growing population. Almost universally, the same people agree that corrections need to occur over the years ahead. While some agree that the corrections might usefully be commenced now, the majority does not see that they need to be corrected urgently, in a single budget, and certainly not by draconian measures.

The ‘crisis’, the ‘emergency’, was no more than a political strategy devised by the Coalition to soften up the electorate for the punitive budget it intended to bring down. There was no emergency or crisis, but the strategy served to preemptively answer the question the people were bound to ask: ‘Why would Hockey bring down such a destructive budget’? The Coalition hoped the answer would be obvious.

For the history of the so-called crisis, re-read the excellent piece by 2353 Debt crisis: what debt crisis?

If any reader still needs convincing that the ‘emergency’, the ‘crisis’ was fictitious, read Hockey’s own words, uttered in a radio interview during his July visit to New Zealand: ‘…there is no crisis in the Australian economy, nor is it in trouble.’ He made no mention of a ‘budget emergency’.

Even Tony Shepherd, the hand picked chair of Abbott’s pre-budget Commission of Audit, whose task it was to find budget savings, said there was no budget emergency. Most economists agreed.

So let’s look for what might be behind Hockey’s budget. What would motivate him to bring in such a punitive one?

The possibilities canvassed here are:
1. The budget reflects the Coalition’s political ideology.
2. The budget reflects an economic position.
3. The budget reflects a political intent to reorient the social order.

Proposition 1: The budget reflects the Coalition’s political ideology
The Liberal Party website mirrors its ideology in the statements of beliefs in its Federal Platform. Among the many laudable beliefs listed there, the following are relevant to this discussion:

We believe:

‒ In the innate worth of the individual, in the right to be independent, to own property and to achieve, and in the need to encourage initiative and personal responsibility.

‒ In the creation of wealth, and in competitive enterprise, consumer choice and reward for effort as the proven means of providing prosperity for all Australians.

‒ In the principle of mutual obligation, whereby those in receipt of government benefits make some form of contribution to the community in return, where this is appropriate.

In the section on the economy, we read:
Liberals want an economy that provides quality jobs and high living standards across the nation. Achieving these goals in a competitive global marketplace means we must have on-going economic reform.

Liberals believe the best strategy for jobs and prosperity includes:

‒ giving priority to sound economic fundamentals, including responsible fiscal management, low inflation, low interest rates, rising employment levels, low net debt and high real business investment;

‒ supporting the role of small business
‒ encouraging workplace reform…

Note the words: ‘we must have on-going economic reform’ and ‘workplace reform’.

So is the budget a reflection of those beliefs and preferred strategies? Possibly, but the extreme nature of the budget hardly reflects these benignly stated beliefs.

To get a deeper understanding of Liberal ideology, take a look at the wish list of the extreme right wing think tank, the Institute of Public Affairs, which has an acknowledged and profound influence on Coalition thinking.

It is not afraid to state its views brazenly; it does not sugar-coat them as does the Liberal Party platform.

Among the first seventy-five wishes the IPA published are the following:

‒ Eliminate family tax benefits
‒ Legislate a cap on government spending and tax as a percentage of GDP

‒ Legislate a balanced budget amendment which strictly limits the size of budget deficits and the period the federal government can be in deficit

‒ Allow individuals and employers to negotiate directly terms of employment that suit them.

That comes closer to explaining Hockey’s harsh budget. The IPA loathes government spending and taxes, adores a balanced budget, hates deficits, despises the ‘nanny state’, and advocates economic and industrial relations reforms, born of its fervent advocacy of free markets, minimal government oversight and regulation, and industrial relations that favour the employer.

If you have any doubt about the influence the IPA has on the Abbott government, read the article in Crikey, which reported that the IPA has added another 25 items to its wish list, and that almost half of them are on Abbott’s agenda.

Abbott himself said at an IPA function: ‘So ladies and gentlemen that is a big “yes” to many of the 75 specific policies you urged upon me.’

Crikey reported that in a Sunday Age article last year, John Howard acknowledged the influence of the IPA: ‘…the IPA is a Trojan Horse for scorched earth neoliberals trying to “condition the public attitude on these [policy] matters.”’

It is reasonable to conclude that although the Liberal Party platform reads benignly enough, innocently enough to allay fears about its intent, the Coalition is really following the radical neoliberal free-market ideology of the IPA.

The IPA advocates lower taxes, especially for the wealthy. It wants a return of income taxing powers to the states. The preferential treatment given high-income earners in the budget, and the penalties imposed on the less well off, are consistent with IPA wishes. The Treasury analysis of the budget released early in August starkly revealed the extent of the imbalance between the treatment of the wealthy and the less well off.

It showed that the combined effect of the budget’s saving cuts which disproportionately penalised the lower income earners, and the changes in tax that benefit the wealthy more than the poor, is that ‘an average low income family loses $844 per year in disposable income (earnings after tax and government payments) due to the budget. Middle-income earners forgo $492; while a high income family is down by $517.’

Hockey’s angry response to this revelation in Fairfax Media was: ‘That story is wrong because it fails to take into account a range of things like the fact that higher income households pay half their income in tax, low income households pay virtually no tax’. He went onto say that each wealthy taxpayer pays for the benefits enjoyed by four on welfare — his ‘lifters’ supporting the ‘leaners’. In other words, he is saying that the progressive tax system that this nation has had in place for many years is unfair to the wealthy. Clearly he is opposed to progressive taxation, at least to what we have in Australia. Moreover, are his assertions correct? Do high-income earners pay 50% tax? No. For the current financial year, it is only when taxable income exceeds $180,000 that the taxpayer pays the maximum of 45c for each additional dollar over that figure. The ‘effective tax rate’ for such people is 30 to 45% depending on how much above $180,000 the total taxable income is. So Hockey is exaggerating and is therefore misleading, a misdemeanor for which he chides his own Treasury. Remember that these Treasury figures about the effects of the annual budget on taxpayers are the ones usually revealed in the budget papers, but not this year. With the assistance of ‘Freedom of Information’, we now know why.

In an online survey accompanying the Fairfax article, people were asked: ‘Does Joe Hockey's budget hit the poorest the hardest?’ The options were: ‘Yes’, ‘Yes, but that is fair because they pay less tax’, ‘No’, and ‘Not sure’. 90% answered ‘Yes’. The other figures were 4%, 3%, and 3%. Even allowing for the unreliability of online polls, this result is hardly equivocal; the people (17,292 of them) had made up their minds. Only 3 and 4% thought the budget was fair.

It is reasonable to conclude that political ideology is behind the Hockey budget, an ideology shared by Abbott, Cormann and most of Abbott’s Party Room, and that the more strident version of it, the IPA version, is the real ideology rather than the party platform so soothingly replete with motherhood statements. They seem unaware that the people do not approve of the budgetary manifestation of their ideology, if the above online poll and other polling feedback is any indication.

Proposition 2: The budget reflects an economic position

This follows from the Coalition’s ideological position. It favours free-markets, private enterprise, light government regulation, industrial relations that favour the employer as grossly exhibited in WorkChoices, low taxes for the wealthy, and ‘mutual responsibility’ for those receiving benefits, crudely captured in the words: ‘dole bludgers’ must work for the dole, should be forced back to work, should receive no support for six months, and, more recently, must apply for forty jobs a month. The ‘lifters’, those hard workers who have been doing so much laborious heavy lifting for so long, can no longer support the ‘leaners’, the bludgers who sit around all day watching TV and boozing their welfare money.

What is Hockey’s preferred economic model? We don’t know. We hope he has given it serious thought.

From what we can see, he is not Keynesian. He opposed the second and larger tranche of the stimulus during the GFC, all the time lambasting expenditure on the Home Insulation Program, which the Coalition classed as a catastrophic disaster that killed people and burned down houses, as well as roundly criticizing the Building the Education Revolution Program, which was labeled as a grossly mismanaged, overly expensive and an unnecessary exercise. Clearly Hockey would not have used such stimulatory measures.

If you asked him whose economic model he prefers, which would he chose? Is he a follower of the Chicago School of Economics, a neoclassical school of economic thought that rejected Keynesianism, (which favours higher government spending in a recession to help the economy recover quicker, rather than waiting for markets), in favour of Milton Friedman’s ‘monetarism’, (which emphasises the importance of controlling the money supply to control inflation). Monetarists criticize expansionary fiscal policy arguing that it will cause inflation and therefore will not help. Does Hockey subscribe to the thinking of Friedrich Hayek from the Austrian school, who advised Margaret Thatcher, and later joined the Chicago school? His seminal book, The Road to Serfdom, became widely popular among those advocating individualism and classical liberalism, a position close to Hockey’s.

Does Hockey subscribe to the trickle-down theory of economics that proposes that supporting the wealthy with tax breaks and incentives will create jobs and grow the economy, the benefits trickling down to those at the bottom of the pile? If so, does he realise that ‘trickle down’ has been debunked by hard data that shows that it increases inequality? The poor get richer along with the wealthy, but at a slower rate, so that the gap widens. John Quiggin has shown this in his book Zombie Economics: How dead ideas still walk among us (Princeton University Press, 2010), described in the TPS piece Joe Hockey should read about John Quiggin’s Zombie Economics.

Ronald Reagan and his economics adviser David Stockman were ‘trickle down’ believers. Renowned economist John Kenneth Galbraith rejected it, noting that ‘trickle-down economics’ had been tried unsuccessfully in the United States in the 1890s under the name ‘horse and sparrow theory’: 'If you feed the horse enough oats, some will pass through to the road for the sparrows’.

There is ample evidence that inequality results in discord, civil dispute, and when gross, revolution. Nobel Laureate Joseph Stiglitz has documented this in The Price of Inequality, reviewed in the TPS piece Focus on political ideology: Joseph Stiglitz More recently, Thomas Piketty, in Capital in the Twenty First Century traced the path of inequality as far back as the eighteenth century, proposed that it results from the growth of income from capital exceeding the rate of economic growth, and described its adverse effects.

Does Hockey think inequality, increasing inequality, is acceptable in this country?

Already in Australia we are seeing the harmful social effects of a budget that is bound to increase inequality, one judged by a large majority of the people as simply unfair.

So what is Hockey’s preferred economic model? Does he have one? Does he know what it is? We can judge only from his actions, and they point inexorably to a belief in trickle down economics. We seem to be headed for another version of Reaganomics, this time Hockeynomics. That is what his budget advances: more inequality and more unfairness, unless his extreme budget can be stopped in its tracks.

Proposition 3: The budget reflects a political intent to reorient the social order

This is a plausible proposition. We know how vindictive Abbott is. We know how he delights in punishing his enemies. In the piece, Say no, no, no to Tony Abbott , it was predicted that if elected he would be vengeful and weak. We have now seen both attributes on display. His vengefulness has been exposed in his Royal Commissions into the HIP and unions, and more recently the Bill Scales inquiry into the NBN. He is determined to pillory his political enemies. Is this budget another act of vengeance against his traditional enemies — the workers, those on lower incomes, those on welfare? It looks like it.

Abbott operates in George Lakoff’s ‘Strict Father’ mode, as it seems does Hockey and Cormann too. Even when Hockey seems reluctant to do so, he goes along with Abbott — his future depends on it!

Take a glance at the TPS piece about Lakoff’s book Moral Politics: How Liberals and Conservatives Think titled The myth of political sameness to check the words used habitually by those who use the Strict Father model of political morality: ‘discipline, tough it out, get tough, tough love, strong, self-reliance, individual responsibility, authority, competition, earn, hard work, enterprise, property rights, reward, freedom, punishment’, and so on. Recognise this language?

Look at the Hockey budget and ask yourself if it is an act of vengeance, an act of retribution against those who are not traditional Coalition voters: the workers, the less well off, those on welfare; and a leg up for those who are: the wealthy, the elite, the business people. It looks that way.

It looks like this Hockey budget accomplishes the Abbott agenda of hurting those he despises, those who don’t support him, those who are not in his camp. Is this at least part of the answer to ‘What is the Hockey budget all about?’

Where does all that leave us?

I don’t know. I don’t know why Hockey brought down the budget he did, and why he continues to defend it so strongly despite opposition from much of the Senate, disapproval among commentators and economists, and dismay in much of the electorate? We can only surmise.

Does Hockey himself know why he has produced such a budget?

Is it partly because of his Liberal political ideology, one influenced by the extreme neoliberal position of the IPA? Is it partly influenced by his preferred model of economic thought, perhaps the views of Friedman, Hayek or the proponents of trickle down economics? Is he familiar with these economic models? Has he studied them closely? If so, has he reached a rational conclusion about the most appropriate for this nation at this moment in time? Or is he wedded to one no matter what the nation’s economic situation, like so many mainstream economists?

We hope he has studied economics. We hope he knows about and understands the various models that exist. We hope he has selected one rationally after careful consideration. We hope his actions are not ad hoc, carelessly adopted to match his political position, or his prime minister’s agenda.

Is Hockey’s budget partly the result of the intent to reorient the political order to one more in tune with his and Abbott’s political philosophy? Where everyone works hard for whatever wage is available? Where those who don’t, the bludgers, the leaners, are punished, forced into work or suffer the consequences of their reluctance, their resistance? Where those who provide employment, the lifters, are held in high regard, and supported with tax breaks and enticements?

I don’t know the answers to the questions I pose. I can only surmise, only hypothesise. But I suspect that all these propositions are valid, and operate in varying degrees.

I do hope, perhaps vainly, that Joe Hockey — not your ordinary Joe — has thought deeply about what his budget is all about, that he has arrived at his budget conclusions after searching his mind and his soul about what his budget is intended to achieve, why this is so, and whether his fashioning of it is likely to achieve its purpose.

I hope too that he has reflected deeply on his budget’s fairness, and whether it is consistent with what the majority of the electorate appears to want for this nation, an egalitarian society where the ‘fair go’ reigns supreme, where opportunity is available to all, where harmony pervades and unites our people.

What do you think Hockey’s budget is all about?

Debt crisis — what debt crisis?

Let’s face it; the Australian public has been bashed around the ears for years by the LNP about the level of government debt. Some economists would contend that Australia doesn’t have any debt — and certainly not a debt problem.

Unfortunately, this piece has to contain some history and economics to illustrate the point.

Australia started issuing currency in its own name in 1910: previously each bank issued its own currency (banknotes). In general, banknotes had a promise to pay the denomination in gold coins at a fixed rate should the bearer deliver the note to the issuing banking institution. The first ‘Australian’ currency was the private bank issued banknotes overprinted with ‘Australian Note’, followed in 1913 by the first government issued ten shilling note. Other denominations soon followed. Australian Government notes could be converted into gold coins at the head office of the ‘Commonwealth Treasury’ — the government body responsible for issuing the notes. Effectively, early banknotes in Australia and around the world were freely convertible for gold.

Countries also operated on a similar basis. An agreement between a number of countries in the early 1900’s (as represented by the USA’s Gold Standard Act) meant that gold was the world currency and that countries had to have sufficient gold in their reserves to ensure prompt payment should every banknote holder decide at the one time to convert their banknotes to gold. While a number of countries banned the holding of gold by their citizens during the period between World War 1 and World War 2, the Breton-Woods Agreement reinforced the ‘gold standard’ between countries from the conclusion of World War 2.

The Breton Woods Agreement meant that signatory countries could convert their gold to US currency at a rate of USD35 per ounce of gold, and the exchange rates between signatory countries’ currencies were fixed in advance. While countries could change the exchange rate between their own and other currencies, changes were infrequent and certainly were not quoted in the media on a daily basis. President Nixon removed the USD35 per ounce trading in gold in 1971.

Following the repeal of ‘the gold standard’ by the US, Australia fixed its currency to the Trade Weighted Index, prior to Hawke and Keating ‘floating’ the currency in 1983. Greg Jericho does a much better job than I can of explaining the whys and wherefores of fixed versus floating currencies here.

Now the history is over, we’ll start the economics. Economists will tell you that all the actions you take today will be made with an economic intent. Should you choose to purchase some milk, the rationale is that the milk is available at a price you consider to be reasonable for your purposes — whether it be to make your coffee taste better or to give nourishment to a child. You will purchase the milk knowing that your $1 per litre could be put to other purposes, say a few apples, but the ‘need’ for the apples does not rate as highly as your ‘need’ for milk.

For the milk to get to your refrigerator, there are a number of economic decisions made: including the farmer raising cows rather than say sheep; the processor deciding to purchase raw milk from the farmer; and the supermarket choosing to purchase milk from the processor. The entire production chain relies on people making a ‘rational’ (and this word is important later) decision that the milk production, retailing and consumption is the best possible use for the money expended in the exercise of getting milk into a cup of coffee.

Economists will tell you that ‘the market’ has full knowledge and is always rational. To an extent it is. If Australians suddenly developed a love of the coffee creamer powders so loved by those on the other side of the Pacific, it stands to reason that there would be a lessening demand for milk — meaning that the farmer would lower his price in an attempt to supply the same amount to the processor. If, on the other hand, in 2015 Australia sold twice as much powdered milk to the US to make additional coffee creamer than we did in 2014, the demand for raw milk would increase, ensuring our farmer better prices for his product.

So how does a discussion on banknotes and coffee creamer relate to Australia’s debt level? Glad you asked – here we go.

Under the gold standard banks needed to have sufficient reserves of gold to pay out anyone that presented a banknote to them in exchange. This process finished prior to World War 2. People still trusted banknotes after the abolition of the ability to hold a private stock of gold, even though the banknote (and coins) used as legal tender were only backed by a government promise rather than a token of some real value. There was a rational belief that sufficient reserves were available to exchange the tokens (banknotes) for intrinsic value at a rate set by the government of the day — even though it was probably illegal to have the intrinsic value in your possession. To this day, we all have sufficient trust in the economic system to accept that the $50 note we receive from the ATM will be accepted by the shop to buy the milk and, as milk costs $1 a litre, we will get some other readily acceptable tokens of value back to make up the difference between the value of the milk and the $50 note (token) we gave the shop. This system is known as fiat money.

Definition: Fiat money is money that is intrinsically useless; is used only as a medium of exchange.

In 2011, the Reserve Bank requested the scrapping of the 5 cent coin, as it cost more than 5 cents to make the coin. It stands to reason that it costs considerably less than the face value to make the rest of our currency tokens.

We still have a rational belief that the currency we use has a value, even though the tokens — plastic banknotes or metal coins — are clearly not worth the face value attached to them and there is no implied promise of backing by intrinsic value.

There is a worldwide demand for currency to pay for imports and exports — and some currencies have greater acceptance for this purpose. In essence, there is also a supply and demand for currency, similar to the discussion on milk prices above. Where there is a market for a commodity, there are also people who will speculate on the ongoing supply and demand of the item. So in addition to the use of a currency for the payment of goods and services, there is also a speculation market for currency, just as there used to be for pork bellies, an indicator of pork production — apparently! Both systems rely on trust and a rational belief that the currency they purchase today will have a value tomorrow — of course, the speculator hopes the value is higher!

Australia has a Council of Financial Regulators (more detail here) that:

… is a non-statutory body whose role is to contribute to the efficiency and effectiveness of financial regulation and to promote stability of the Australian financial system.

Effectively it monitors the health of Australia’s financial system; there is no overarching reference to an external value base or agreement as there was until the 1980’s.

Following conventional economic theory, the value of the Australian Dollar since 1983 has not been tied to the value of a gold brick but whatever the market decides is the correct price at the time of the transaction. In effect, while the Reserve Bank does buy and sell currency in foreign markets to ‘manage the currency’, it is not the final arbitrator of the value of the dollar in relation to other currencies.

The US Federal Reserve and the Bank of England have been using a policy of ‘quantitative easing’ to generate some life into their respective economies for the past few years, following the GFC (‘Global Financial Crisis’) of 2008. The US Federal Reserve has at times effectively printed USD40 Billion per month, after trying a number of more ‘conventional’ strategies such as reducing interest rates (which failed to achieve the desired results) in order to generate spending in the community.

L. Randall Wray is a Professor of Economics at the University of Missouri, Kansas City, and Senior Scholar at the Levy Economics Institute of Bard College, New York. His full biography is here. He writes a blog Great Leap Forward and explains a concept called Modern Monetary Theory here. Very briefly, the theory suggests that while most will pay taxes to the Government and rely on others to provide them with a source of income (salary, wages, welfare, dividends and so on), Governments are the source of money and can clearly manage the supply and demand for money to suit their own purposes. Bill Mitchell, the Professor of Economics at Charles Darwin University has a blog site where he frequently writes about Modern Monetary Theory and argues that poor economic choices, such as austerity (frequently used as an economic tool to ‘pay back debt’), contribute to social problems.

While countries as far back as Germany, in the period between the World Wars, and more recently Zimbabwe and Japan, have attempted to print their way out of economic recession and failed, the US and UK have maintained the confidence of the financial markets. They are issuing the money by way of issuing securities to financial intermediaries and claiming they are producing assets, not currency. The financial intermediaries then profit from the interest paid by the government ‘borrower’. It is worth mentioning here that while the UK and USA were printing money and remaining ‘solvent’, the so-called ‘PIGS’ of Europe (Portugal, Ireland, Greece and Spain) didn’t have the option as they use the European Community currency known as the Euro. It was impossible for the “PIGS’ to print their way out of trouble as they couldn’t manufacture the underlying ‘security’ as well as control the issue of the currency — Euros are not country specific.

Rudd’s $900 cheques issued to a majority of Australians during 2008/9 was another method of ensuring there was a significant input of money into the economy. It really doesn’t matter how much of the money was used for ‘useful’ endeavour or spent at the TAB, the spending of the money keeps people employed, and they then go and spend money and so on.

John Kelly, writing on the Australian Independent Media Network website claims there is a Ridiculous Debt and Deficit Scam where 90% of us pay to benefit the remaining 10%. Basically we all pay taxes which go to the government — the government then pays interest on debt over securities it created and borrowed against in the first place in the commercial money market. The lenders in the commercial money market include those same financial institutions that collectively report billions in profit each year.

So while most of us have three options to ensure we have sufficient income to pay our debts — receive a higher income, reduce expenditure or win the lottery — governments have a far ‘better’ option: they can make more currency by issuing intangible assets, borrow on them and then pay interest to the finance industry.

Evidence of the reality of Australia’s debt crisis is the country’s current credit rating which is a reflection of how concerned lenders would be if approached by Australia for a loan. Issuing intangible debt will not work forever as there has to be an element of trust to a rational person that the currency does represent something, and the US and UK seem to understand this.

However, if the current Australian Government’s low percentage of debt to GDP suggests we have a ‘debt crisis’, why isn’t there continual coverage on when the US or UK economies will collapse, causing a global financial depression greater than the GFC and Great Depression combined, together with ‘experts’, time clocks and the usual level of media hyping. Could it be that Australia’s debt crisis is politically motivated rather than a reflection of the current global perception of our ‘national debt’?

Is the current rhetoric to repay debt necessary?

Should the Australian Government be attempting to improve the wealth of all Australians rather than reducing expenditure?

What do you think?

The government doesn’t understand

For those who have followed my comments on TPS, you will probably know by now that my working life was spent in Aboriginal and Torres Strait Islander affairs — and I still prefer that nomenclature even though the government changed it to indigenous affairs some time ago. This piece is about a basic problem faced by government in Aboriginal and Torres Strait Islander affairs, although couched in a more personal account of those years.

The main problem most governments have had in Aboriginal and Torres Strait Islander affairs is that they just don’t get where the people are coming from; they fail to understand what it is that Aboriginal and Torres Strait Islander people really care about. Or, if they do understand, it certainly does not seem to the people that it is reflected in government policy.

I will focus on Aboriginal people because there is a slightly different set of issues, although related, regarding Torres Strait Islander people.

I worked in this area for thirty years and like to think that I did develop a reasonably good understanding. Perhaps some of my old Aboriginal friends will tell me otherwise, but I was at times recognised as a whitefella that people could come to for assistance even if it was for matters that weren’t technically my responsibility within the public service structure. But I knew the importance of personal relationships to the people and I would chase up the issue and get back to them, or make sure the person responsible did. In some cases I was picked out as the go-between in negotiations between communities and government officials who were senior to me. I understood the importance of a go-between in Aboriginal culture: a person often used to avoid any sort of embarrassment for important people in the community (for example, to avoid having a senior elder speak only to have his ideas rejected by a young government official — I could take the views back and forth and save face for everyone). And they trusted me to present their views in the way they wished.

Too often governments and public servants have not understood.

One of the first examples I came across, and partly where my learning began, was the written minutes of a meeting between a community and government officials in the mid-1970s which referred to an elder of the community making a speech for his land. An Aboriginal officer, who had attended the meeting, pointed out that this was actually a significant and heartfelt speech in the best Aboriginal oratorical tradition but it had been dismissed in a single short sentence by the white official recording it.

On a later occasion I was accompanying a local departmental officer on a visit to a community in WA when we got word that the elders wished to speak to us. (I should point out that elders are not necessarily old. I have personally known of instances where men in their 20s and early 30s have become elders owing to deaths within the family.) We were led to the edge of the community where the elders were sitting in a circle in the red dust. We joined the circle and sat. One by one the men rose to speak. I recognised this as a traditional formal meeting. Each person would rise and state their view, often (at least in English) interspersed with phrases like ‘this is only what I think’ or ‘I might be wrong’. In such meetings, the most senior person is usually the last to speak. When he rises, he does not get up and say I agree with what has already been said, he, just like everyone else, makes a speech stating his view: if that view is the same as the others then an agreement has been reached but, if it is different, the meeting will break up and will come together again in a few days, or even a few weeks, and that will continue until such time as everyone expresses the same view. That traditional way does not contain the cut and thrust, and questioning and clarification that we are used to in meetings. I knew this, but I was surprised when the local officer, who supposedly knew these people, began interrupting those speeches and asking questions.

Another example arose after viewing artworks by a community in the east of WA. We were having tea and coffee afterwards and I was at a table with two of the old men and a young white woman who worked with a local Aboriginal organisation. She began asking one of the men about his painting — a painting about Aboriginal knowledge of Lasseter (of lost gold reef fame) — about its track and where it went. I could see both of the men avoided giving a clear answer and as the young woman persisted, I thought they looked uncomfortable while still not answering her. When she left the table, I continued talking with them and discovered, as I had suspected, that they could not talk about the other end of the track because that belonged to the ‘Docker River mob’. Traditional people can only talk about their own country — if the young woman wanted to learn more she would need to speak to people at Docker River (now Kaltukatjarar). I did mention the situation to the chairman of the organisation the woman worked for and he said: ‘She should know that.’

That capacity to only speak for one’s own country has been a problem for government in creating Aboriginal representative organisations, whether elected or appointed. Although a person may be chosen to represent all of Cape York, they cannot speak with authority or make decisions for people on other country, even within Cape York. I have witnessed situations where, like the old artists, the representative avoids giving a straight answer because he knows he must go back and pass the information to the right people and wait for their decision before he can give an answer. In some ways he is still like a go-between, although the government and many public servants think he is a representative in the political sense we use the word and are surprised that he will not make a decision.

I used to remind my colleagues that, as public servants, we go into meetings with other public servants not expecting firm answers immediately (that is, we don’t expect other public servants to have plenipotentiary powers) but expect that they will go away and consider the issues and come back with an answer when they have spoken to the right people and received approval for their answer. Yet, for some strange reason, we often expected Aboriginal people to give us an answer straight away and did not extend to them the same courtesy of needing time to discuss and confirm the decision they might need to make. Traditional decision making can take time, which was something the people were rarely granted. Government invariably wanted a quick decision so it could announce the next grand scheme.

Related to that is the issue that governments seem to want Aboriginal people to speak with ‘one voice’. Ministers have become frustrated that they can’t get a single decision, or even position, on an issue. I do not understand why that is so. After all, they are politicians and operate in a world of competing interests and yet, when it comes to Aboriginal people, they often seem to think there should be no competing interests.

The idea of ‘one voice’ seems to spill over into a ‘one size fits all’ approach to much of the delivery of services, which becomes almost integration by stealth. The emphasis on education, jobs and housing may not be as relevant to some of the more traditional communities as it is to urban Aboriginal communities. I recall a small group in the Kimberley who were allowed to design their own houses. What they came up with was a large concrete slab covered by a corrugated iron roof, with one or two small lockable rooms at the centre. The living and sleeping areas were the large verandah created by the design. It was what the people wanted at the time but not the sort of dwelling the politicians could show the media as a sign of ‘improvement’.

Similarly when one community was given local council powers to manage its own affairs, it was thought that this would create opportunities for local people to fill the management positions for council services. A few years later it was found that all those positions were filled by white people. Why? — because the local people saw that as ‘whitefella business’, while they were busy with important ‘blackfella business’.

Education, health, housing, economic development and so on are important but, unless government comes to grips with the differences between, and even within, communities, many programs will continue to fail.

Over the years the government has tried at times to bring an Aboriginal perspective to government policy and service delivery. It could be argued that the appointment of an Aboriginal man, Mr Perkins, as Secretary of the Department of Aboriginal Affairs was one such attempt.

ATSIC was another: although there were rumours that ATSIC was also a means of depoliticising Aboriginal affairs by allowing the minister to rise in parliament and say issue ‘x’ or ‘y’ has ‘nothing to do with me’, it is a matter for ATSIC.

ATSIC was heavily criticised but often for the wrong reasons. It had no control of Aboriginal health or education funding — they rested with mainstream government departments. Much of the funding it did receive was locked into programs determined by the government: so even if ATSIC thought the priorities for funding should change, it had little scope to do that without prolonged argument with the government. The government, in my view, was more often concerned about how things would appear to the wider electorate, rather than what the Aboriginal people actually wanted — such as the difference between a conventional three-bedroom house and the type of house I described above.

Despite that, ATSIC did bring a greater understanding (for the most part) to Aboriginal issues, and a large number of Aboriginal staff also helped. Even with ATSIC in operation, some traditional communities were still critical of its approach.

How to deal with the more traditional communities is a problem that has never been solved by the politicians or public servants.

When ATSIC was abolished in 2005 it was not only the Aboriginal commissioners who disappeared from the scene. What many may not know, is that there was also a purge of Aboriginal and Torres Strait Islander staff. It was claimed that many were not good enough public servants, ignoring the understanding they brought to dealings with Aboriginal people. For me, the attitude of some of the new staff who came into Aboriginal affairs was frightening: they knew almost nothing about Aboriginal people, their thinking or their values.

Now I come to the politicians themselves.

Politicians regularly visit Aboriginal communities, sometimes too often. One community I visited had had five fly-in-fly-out visits by federal and state politicians, and senior public servants, in the space of two to three weeks. Each visit disrupted normal community activities and it wanted the visits to stop or, at least, be limited.

Communities do view visits by prime ministers as significant but I don’t think the prime ministers understand the experience in the way they should.

The community acknowledges the high office of the prime minister but I think it is rare that prime ministers acknowledge the high office of the elders to whom they may speak. And our prime ministers fail to understand the significance of some of the gifts bestowed on them because they do not understand the depth of feeling behind them.

In 1998, John Howard visited Galiwinku in Arnhem Land and was given the great honour of having the group’s Dhulmi-mulka Bathi hung around his neck. These were the equivalent of their traditional ‘title deeds’. ‘By doing this the leaders hoped to impress upon him the inherent depth of Yolngu law.’ In my view, it was tantamount to making him an honorary member of the clan, giving him a responsibility to maintain those ‘title deeds’.

I recall thinking at the time that Howard had completely failed to understand the significance and value of what he had been offered: that he had been allowed to meet the leaders of a nation who also had their own parliament (the Ngärra), on their own land, and they had granted him access to their country and effectively welcomed him into their clan.

Once on a visit to a community in the Kimberley I had been taken by the old men and shown important objects. I understood the honour and trust that this bestowed and I did feel a sense of obligation to that community afterwards. Politicians should understand this. After all, they receive donations and then have a sense of obligation to the donors, but they are blind to the value of what Aboriginal people offer them.

Abbott is now promising he will, in September, fulfil his promise to spend a week in Arnhem Land. I have no doubt that he will be the same as previous prime ministers and completely fail to understand the experience.

I will finish with a couple of quotes from Galarrwuy Yunupingu who, although he has moved in the highest political circles, remains a traditional man and these quotes give a glimpse of what the politicians and many public servants are missing:

The clans of east Arnhem Land join me in acknowledging no king, no queen, no church and no state. Our allegiance is to each other, to our land and to the ceremonies that define us. It is through ceremonies that our lives are created. These ceremonies record and pass on the laws that give us ownership of the land and of the seas, and the rules by which we live. Our ceremonial grounds are our universities, where we gain the knowledge that we need. The universities work to a moon cycle, with many different levels of learning and different ‘inside’ ceremonies for men and women: from the new moon to the full moon, we travel the song cycles that guide the life and the essence of the clan — keeping all in balance, giving our people their meaning. It is the only cycle of events that can ever give a Yolngu person … the full energy that he or she requires for life. Without this learning, Yolngu can achieve nothing; they are nobody.

My inner life is that of the Yolngu song cycles, the ceremonies, the knowledge, the law and the land. This is yothu yindi. Balance. Wholeness. Completeness. A world designed in perfection, founded on the beautiful simplicity of a mother and her newborn child; as vibrant and dynamic as the estuary where the saltwaters meet the freshwaters, able to give you everything you need.

What do you think?