Has it frustrated you that parliamentarians from the two major parties cannot seem to agree on much at all? Is this due simply to cussedness, an intention to disagree on virtually everything, or is there a more deep-seated reason? In the case of the Coalition, opposition for opposition’s sake seems to be a conscious strategy of negativity that it has exhibited now for the last two years. Under the surface though, there seems a deeper stream of dissent, dissent that seems to be born of ideological positions, positions that differ from those of the Government. This piece explores those differing positions in just two aspects of policy: education and the economy, to ascertain how ideological differences sharply separate the two major parties.
Perhaps the subtitles ‘progressive’ and ‘conservative’ that apply to the Labor Party and the Coalition respectively, express some of these differences.
Education Labor’s vision for the nation is focused on opportunity and fairness for all, from the poorest, the least advantaged, and the disabled, right across the spectrum of society to those with the best opportunities in life. Labor believes that opportunity is best mediated through education from preschool through school to university or TAFE training and apprenticeships.
We know this even before taking a look at the official
Labor Party website. There, clicking on the ‘Agenda’ tab, or on ‘Policy’ at the foot of that opening page reveals several policies
illustrated in graphic form; clicking on
‘More Policies’ reveals still more. Each graphic is linked to a page that elaborates.
For example, the
School Reform page begins:
“The Gillard Labor Government’s vision is to make every school a great school – because in the 21st century, a great school and a great education are the keys that unlock an individual’s potential and the nation’s future. Only with world class schools can we build a high-productivity, high-participation economy that gives all Australians the opportunity of rewarding and satisfying work.” It continues:
“In government, Labor is delivering ambitious reforms that are already changing Australia’s schools – achieving more for our schools in less than three years than the Coalition delivered in almost 12”, pointing to the relative activity of the two Governments.
What is the Coalition’s vision? It’s hard to discern. Tony Abbott doesn’t speak about his vision for the nation. He spends so much time criticizing Labor and PM Gillard that he seems to have no time to tell us where he would take the country should he become PM. One has to go to the Liberal Party website to get any idea of the Coalition vision; there is no Coalition website. Three words are centre stage:
Hope. Reward. Opportunity, under the heading:
Real solutions for all Australians, whatever that means. There is no elaboration. A search for a ‘Liberal policy platform’ yields no results. I could not find a coherent policy statement, but there are tabs for several policy areas.
Since Labor has a strong focus on opportunity and education for all, let’s see what
Liberal Party education policy is.
We will protect choice is the prime theme, with an elaboration:
“Protecting parental choice: All Australian children deserve a high quality education that enables them to develop the skills necessary to realise their potential. Unlike Labor, the Liberals support parental school choice because we actually believe in it. We will not punish parents for investing in their children’s education.” They are some links to more detailed policy. The one on school education begins:
“The Coalition is committed to quality schooling for all children. Schools should be about achieving excellence and equipping our children for happy and productive lives. Education should be a pathway towards prosperity – for individuals, their families and our nation as a whole. Yet under Labor it has been about spin, waste, bureaucracy and ineptitude.
“Nowhere has the waste and incompetence of the Labor Government been more apparent than in our schools. Promising an ‘education revolution’, the Rudd-Gillard Government has instead recklessly wasted billions of taxpayer dollars, leaving countless families disappointed by broken promises and ignored the needs of teachers and schools that face uncertainty about their future funding.
“This gross waste and mismanagement has compromised the education, services and assistance that our students need and deserve. Australian schools are clearly no better off than they were three years ago.” There is more.
Note that the first paragraph begins with laudable principles, but even before it ends, there is trenchant criticism of Labor – in Liberal Party policy! And the censure goes on through the next two paragraphs, reflecting the Coalition’s incessant negativity towards the Government, which it cannot even keep out of its own policy statements.
The contrast in these two education policies is stark. While both embrace commendable principles, Labor’s is largely positive with scant reference to past governments, the Coalition’s includes many negative comments about the Rudd/Gillard governments.
Labor, through its many statements has made it abundantly clear that a great education is for all, not just for those who can afford private schooling. The Coalition is focused on choice, giving parents the right to choose where their children are educated, and not penalizing those who choose private education, which it claims Labor’s policy does. Clearly, it’s more concerned with choice than equity, which is not featured in its policy.
Labor’s policy has been implemented through initiatives such as the MySchool website, the National Curriculum, NAPLAN, computers in schools, the BER that provided thousands of new school buildings and amenities, enhanced teacher training, performance pay for teachers, smaller class sizes, and the assignment of a vast increase in funding of all sectors from preschool to university and skills training. It has put its money where its mouth is.
The Coalition emphasizes teacher training but eschews smaller class sizes, and believes that giving more money to education is not the answer. The actions of the Baillieu Government in Victoria in substantially reducing TAFE funding to the extent of forcing closure of some campuses, even in regional areas where educational opportunity is limited, illustrate the Coalition principle that reducing funding will produce better and more affordable results.
There you have the contrast – Labor’s equity and opportunity for all wherever they live, as against opportunity limited by funding, and a priority for parental choice and private education that characterizes Coalition policy.
It is sad that there is so little unanimity between the major political parties about education, which is so basic to our future. The economy
Even more striking is the contrast between Labor and Coalition policies on the economy. Labor’s policies for the economy are featured under several headings, but the overriding concept is:
“A strong economy is important – it generates jobs for working families and helps us build a fairer society. The Labor Government’s response to the global financial crisis protected jobs and small businesses. This has placed Australia in a strong position to capitalise on future opportunities and to confront the economic challenges of the future.” It’s policies are detailed under several headings:
Creating jobs and skills in Australia Investing in a creative Australia Science for Australia’s future Advancing Australia’s Interests Internationally A Good International Citizen Labor’s plan for all small business Increasing your superannuation to 12 % My Super Protecting Workers’ Entitlements National Trade Cadetships Tax plan for our future Mineral Resource Rent Tax Connecting Renewables Building Better Regional Cities Reward for Early Action Strengthening Australia Cleaner Power Stations National Broadband Network Innovation Fairer Simpler Banking Carbon farming initiative A secure and fair Australia There is not room for them here in detail, and anyway you have heard them all. There are linked for reference.
The Coalition has similar statements on economic management under the heading
Our Plan to get Australia Growing Again suggesting in the title that it is not growing now, which it is, at a substantial rate.
Unsurprisingly, it begins with a tilt against Labor:
“Tony Abbott and the Liberals stand for real action to end wasteful spending and real action to grow our economy. Labor, on the other hand, has turned a $20 billion surplus into record debt and has no plan to pay it back. We will continue to fight for Australian families who are paying the price for Labor's record debt with higher interest rates and rising living costs.” There is no explanation of the meaning of ‘real’, and of course the ‘wasteful spending’ meme recurs, and incongruously ‘higher interest rates’ crops up despite them being at record lows, much lower than during most of the Howard era.
Beginning with a heading:
Rebuilding Sustainable Prosperity, its substantive policy statement implies rebuilding is required. The general statements are reproduced below in some detail, as we have not heard much about them.
They begin:
“The Coalition is committed to sound, sustainable and consistent economic policy.
“Sound and sustainable economic policy leads to strong economic growth with low inflation.
“Sound and sustainable economic policy provides the resources to meet the community’s long term social needs on health, education, aged care, housing and income support.
“Sound and sustainable economic policy provides maximum opportunity for individuals to prosper and pursue their dreams and aspirations.
“Consistent policy based on consistent principles reduces sovereign risk and gives investors confidence for long term decision making.” There could be little argument about these principles. The statements continue:
“The Coalition’s approach to achieving sound, sustainable and consistent economic policy will be based on a number of key principles.
“At the core is the belief that free, fair and competitive markets should form the basis of our economic system. The rights and choices of individuals are paramount. Individuals, rather than governments, are usually best placed to make decisions that maximise community well being.” Note ‘free, fair and competitive’ and ‘rights and choices’, and that ‘individuals are best placed to make decisions’.
“The Coalition believes in small government. The Coalition acknowledges that government has a role in raising taxes and other revenue, formulating laws and regulations, and spending money to achieve legitimate social objectives.” Note ‘small government’.
“However, the government’s powers to spend and to regulate need to be exercised with caution. Taxes must be as low, as fair, and as simple as possible. The Coalition is acutely aware that taxes are other peoples’ money.” Note ‘taxes must be low’ despite the Howard Government being the highest taxing in Australia’s history.
“The Coalition strongly supports sustainable economic growth. Strong economic growth provides economic security. Strong economic growth ensures rising living standards.
“Fostering strong growth in productivity is an important element of this because it is ultimately the level of productivity that determines our standard of living. The Coalition believes that quality education is a foundation for high productivity. Policies which boost participation in the workforce are also of key importance.” Note the emphasis on ‘productivity’.
”The Coalition strongly supports the small business sector. The Coalition believes small business is the engine room of the Australian economy.” Note the emphasis on ‘small business’.
“The Coalition believes in a strong, prosperous and vibrant regional Australia.
“The Coalition believes in fiscal conservatism. The Coalition will restore fiscal rectitude. We will run a budget surplus over the cycle. We will repay Labor’s debt as quickly as we can.” Note the emphasis on 'fiscal conservatism', 'fiscal rectitude', ‘a budget surplus’ and ‘repay Labor's debt’.
”The Coalition is committed to “light touch” regulation. Australia’s system of financial regulation weathered the global storm better than almost any other developed country. The Coalition will be cautious in saddling the Australian financial sector with more onerous regulation, which arises from the shortcomings of less well-supervised markets overseas. Financial Services is a truly global industry but its impacts are dramatic locally. More regulation constrains credit and inhibits innovation. Australia has led the world in prudential supervision, corporate regulation and market oversight. We must continue this global leadership.” Note ‘light touch’ regulation, and be amazed at the concession that we have ‘weathered the global storm better than almost any other developed country’.
”Finally, the Coalition believes that government policies must lead to a sustainable Australia. Economic, population and environmental policies must take into account social harmony, quality of life, the provision of adequate infrastructure and the preservation of the environment.” The details are given to enable comparisons to be made. Most of what is in Coalition policy is also Labor policy. The differences revolve around issues such as ‘free markets’, ‘rights and individual choice’, ‘small government’ and ‘light touch regulation’. Labor also wants low taxes, a budget surplus and to repay debt.
Superficially, it may seem that the differences are minor, yet they influence behaviour in a major way. During the GFC, the Government took the Keynesian approach of ‘pump priming’, stimulating the economy with cash grants, infrastructure projects such as the HIP and BER, and small business tax breaks, as well as bank guarantees. While the Turnbull-led Coalition supported the first tranche of over just over $10 billion, it opposed the second, preferring tax cuts. The consensus by economists and international agencies is that the stimulus was appropriate and is the reason why Australia came through the GFC better than any other developed country, and continues to be the most robust economy in the world and the envy of other major nations, with its steady growth to trend, low unemployment, low debt to GDP ratio, low inflation and record low interest rates.
What we see here is a stark contrast between Keynesian thinking and that of Milton Freidman, who developed his macroeconomic ‘monetarist’ policy and extolled the virtues of a free market economic system with minimal intervention. He opposed ‘naïve Keynesian’ thought and action, which has now been replaced by neo-Keynesianism.
Another aspect of Friedman’s mode of thought is preference for ‘small government’ and implicitly, low spending government, and low taxes, especially for the wealthy on the grounds that the wealthy generate more wealth, create jobs, and that the wealth generated at the top trickles down to those at the bottom, so-called ‘trickle down economics’. In his book,
Zombie Economics (Princeton University Press, 2010), which has the subtitle:
How dead ideas still walk among us, Queensland University Professor John Quiggin, shows how a number of economic theories, although now debunked, don’t die, nor are they alive, they are simply ‘un-dead’ – zombie like. I have reviewed his book in
Joe Hockey should read John Quiggin’s Zombie Economics.
Quiggin describes trickle-down economics as an idea that whatever benefits are given to the wealthy, they will filter down to the poorest. Quiggin begins:
“As long as there have been rich and poor people, or powerful and powerless people, there have been advocates to explain that it’s better for everyone if things stay that way.” While great economists such as Adam Smith, John Stuart Mills and John Maynard Keynes have supported income re-distribution through progressive taxation, and most economists still do today, there are still some who argue that we should let the rich get richer and wait for the benefits to trickle down to the poor. One could be forgiven for thinking that is what Joe Hockey and the Coalition believe, as they insist on giving tax relief to the wealthy.
Quiggin gives example after example showing the trickle down hypothesis is false, and caps this with a telling graph of household income distribution in the US from 1965 to 2005 that shows that those on the 95th percentile for income steadily improved their position by over fifty percent, while those on the 20th percentile and below were static.
The contemporary debate in the US revolves around this trickle down notion. The extreme elements of the Republican Party, the Tea Party, are strong advocates of tax cuts for the wealthy and reduced government spending, even if that means repealing social benefit programs such as ‘Obamacare’ upon which so many of the poor rely for health care. Tea Party pressure has pushed the Republicans to oppose bills that would tax the rich higher so that social benefits could be offered, to the extent that if these bills are not passed by next year, the US might have to default on its obligations, a disastrous state of affairs for such a massive economy, which would have immense flow-on effects to the world economy and our own. This is why Wayne Swan has described these Tea Party elements as "cranks" and "crazies", as they push the US economy towards default, towards ‘falling over a cliff’, as Swan puts it. It is noteworthy that Joe Hockey and Tony Abbott have been quick to criticize Swan, presumably because they hold views similar to those of the Tea Party.
The now infamous Cory Bernardi, previously Abbott’s Parliamentary Secretary, is a strong advocate of these Tea Party policies, so much so that he is said to be ‘Sarah Palin without lipstick’.
In short, this comparison of policies on education and the economy, serves to illustrate that the ideologies behind these aspects of policy starkly differ between Labor and the Coalition, and that it is the ideology that drives the vigorous debate between the parties rather than the policy details. Ideologies are deep seated and invite contention and division. There could scarcely be more profound differences than those that exist on economics between the two parties. While both want a strong and growing economy and higher productivity, with one party focused on equity, the redistribution of wealth, and the provision of social services, and the other on boosting the wealthy at the inevitable expense of the less wealthy, it should not surprise us that ideological agreement between them is impossible. We saw this starkly exhibited on this week’s
Q&A when Tanya Plibersek and Kelly O’Dwyer had a sharp clash, not on economic policy, but on ideology.
While Labor accepts debt as necessary to provide services, especially at times of recession, the Coalition regards debt as a sign of failure, and is only too willing to sacrifice expenditure on essential services such as education and health in order to 'repay debt', as we have seen LNP governments doing in Queensland, New South Wales and Victoria in recent times.
We ought not be surprised that because there is so much disagreement on ideological grounds, agreement on policy details is impossible. It seems that as their ideologies can never meet, as compromise of these fundamental principles is unattainable, dissent is inevitable. What do you think?