Monthly Archives: April 2019

Lies, damn lies and the flatlining economy

There are two main layers to the misinformation that dominates coverage of the economy during this election campaign.

The first is the Coalition relying on major media to report its economic narrative for the entire ‘policy’ component of its re-election strategy. Everything else is meat pies and footy, horserace ephemera, church on Sunday, pub on Anzac Day.

Secondly, there is a complacent and unhelpful view which even well-regarded economists and journalists, who know (or should know) better, are kicking down the road. This is the demonstrably false notion that the Liberals and Nationals lack a policy platform.

There is no truth to the Coalition economic narrative, which I refuse to reiterate, we have heard it often enough. Nor is there any truth to the idea that the Coalition has no agenda.

Lets start with some medium-term context on Australian governments and economic management.

The Australian economy was successfully steered through the 2008 Global Financial Crisis (GFC) by the Rudd Labor government. At the time, Treasurer Wayne Swan explained its Keynesian philosophy, which boils down to counter-cyclical government borrowing and spending, to minimise the hardship and cost caused by steep economic downturns, which cause mass unemployment.

Swan and Labor colleague Paul Keating (later Prime Minister, 1991-1996) are the only two Australian treasurers to be recognised internationally for their economic competency. A detailed Labor-Coalition comparative analysis by economist Stephen Koukoulas (disclosure: former Labor advisor) can be found here; and Tim Dunlop wrote a necessary debunking of the debt and deficit hysteria, after the disastrous Abbott-Hockey budget in 2015, here.

The GFC was caused by neoliberal policy settings that peaked during the Howard era (1996-2007).

Neoliberal policy settings, briefly

Neoliberalism transactionalises human relations, and commodifies identifiable sectors of the population, such as First Nations people, welfare recipients, single mums, disabled people, carers – some of whom are ‘dependant’ children themselves – refugees. Many people belong to more than one of these groups.

Like its classical liberal parent, an ideology designed to rationalise the pervasive inequalities produced by the English class system and industrial capitalism, neoliberalism comes with multiple lies of convenience. ‘Trickle-down’, for instance, is reverse rhetoric. It describes the deliberate movement of wealth and assets up the economic scale as its opposite.

One example is the ‘job active’ network. This Howard-era re-structure, which abolished the Commonwealth Employment Service, is made up of ‘small business’ whose only income is from the government. These private sector entities qualify for the $20,000 tax write down pitched to ‘Tony’s tradies’. The ‘business’ is paid by government for doing ‘case work’. Its employees can authorise cutting an unemployed person off Centrelink income for up to three months, for a ‘breach’ of their ‘contract’.

An unemployed person can receive no service at all, while the agency is paid public money for ‘managing’ them.

The Parents Next program is pretty much the same (see Luke Henrique-Gomes’ work on welfare recipients of many stripes here). A ‘provider’ can authorise cutting single mums off Centrelink for not attending an approved activity like playgroup or swimming lessons. This obviously also impoverishes our children, on top of the social stigma we experience. (Disclaimer: I am a single mum, no longer reliant on Centrelink payments. Reports on Parents Next are viscerally distressing to me. I often avoid these news stories for reasons of residual trauma).

So the ‘provider’ agency can cut single mums, and therefore children, off income support for failing to attend an activity – say baby was sick – that mum was otherwise attending before the ‘provider’ got involved. What happens is, Centrelink puts mum on the Parents Next program, and assigns her to a ‘provider’ who gets government money for having her on the books. This person says oh its okay, tick the box for the thing you are already doing.

The agency then claims cash from government, for mum taking her kids to an approved activity like swimming lessons, which she was previously doing, because she is their mum. But now she is subject to surveillance and compliance, and the provider can cut off her income on multiple pretexts. It is traumatising for anyone, but particularly domestic violence survivors, to be subject to this level of control.

A parallel model operates for NDIS and aged care ‘packages’. The money is paid to a ‘provider’, which has no income other than from government. The agency head sets up as a small business, complete with brand new cars and computers and smart phones, all tax deductible.

Does the government check that this public money is spent on the elderly or disabled people who are on their books? Take a guess. Are there any consequences if the provider trousers the cash and does nothing for the client, nothing for their carer, for the household? What do you think?

This is commodification of people, real people, who belong to specific, identifiable sectors of the population. If this shocks you, if it is a thousand miles from your lived experience, if you had no idea, the best response is to listen to those who are affected. If you can, offer support. Real, material support.

Also central to neoliberalism is the transfer of public resources to private interests. In this context, financial markets were deregulated beyond any effective oversight, while public assets were sold off to the highest bidder. In New South Wales, then-Premier Mike Baird sold all the information about all the land. This, in a society where land as the source of wealth (Edgeworth et al 2017 p. 2) is the central organising principle of property law.

A religious man and corporate banker, Baird then handed womens refuges built by feminists to the corporate arms of organised religion, like Mission Australia. Hundreds of women, and many children, have been killed by male relatives since then.

We were also told that ‘competition’ would drive electricity prices down when the poles and wires were flogged off. What happened? Widespread price-gouging, with electricity bills skyrocketing at four times the rate of the general price increases.

Meanwhile, across the globe, political leaders allowed the vested predictions of credit ratings agencies to hold enormous, unwarranted and ultimately catastrophic sway over fiscal decisions. This is the real sovereign risk, a term bandied about by economic illiterates who never point to the austerity imposed by the IMF on developing countries, for example, or by the EU on Greece.

That is neo/liberalism (same thing) in a nutshell.

Back to the federal election campaign

The twin failure by legacy media, of uncritically broadcasting the Coalition ‘going negative’ while pretending that same Coalition has no policy platform, is partly a self-fulfilling dynamic. The prime minister endlessly serves up repetitive and dishonest criticism of Opposition policy. He refuses to campaign on his record.

Reporting whatever lies the Liberals tell about Labor is a reversal of the public interest responsibility of the fourth estate. Major media outlets, or its more romantic conceptualisation the free press, are supposed to report what the government is doing, and what the opposition offers in the alternative.

The point is for voters, in a democracy, to have a meaningful choice at the ballot box.

What is the government doing, you ask? How can we glean the Liberal and National party policy platform from all this carnival barking? Well. First, canvas what the Coalition has done over the past five years in power. Then, check whether any Liberal or National Party candidate or representative – whether officially or by the traditionally worst political gaffe of all (accidentally telling the truth) – has repudiated or deferred or suspended or cancelled that policy position (eg Parents Next), the policy that we can all see with our own eyes, if we care to look.

It is not that hard.

The only actual argument the prime minister deigns to put on fiscal policy – other than the stunts and piecemeal announcements designed to dominate the news cycle – is that he, Scott Morrison, has a better one. Better than what? you may ask. Labor Labor Labor, is the answer, and the answer is not an honest one.

A growing list of eye-wateringly expensive allocations – the preferred unit of cash wastage seems to be a half-billion dollars – is sufficient evidence that Coalition claims about its economic management are untrue.

Back in 2014, the Abbott government announced it would slash over half a billion dollars from Indigenous Affairs, and it did. In 2017, the Turnbull government outright rejected the Uluru Statement from the Heart, and referendum proposal for an Indigenous Voice to Parliament, by press release. In 2018, the former Nationals deputy leader and Minister for Indigenous Affairs, Nigel Scullion, approved ‘Indigenous’ funding to mates in the cattle and fishing industries, including to fight native title claims. When questioned, he appeared unable to grasp what could possibly be wrong with that.

On Turnbull’s (and Morrison’s and Frydenberg’s) watch, $443 million was handed to the Great Barrier Reef Foundation, a tiny organisation run by a board peppered with mining industry executives. Under Morrison, $499 million dollars were allocated to the Australian War Memorial, which is run by an ex-Liberal Party leader who courts donations from, and sits on the board of, weapons manufacturers.

This was after said ex-Liberal leader Brendan Nelson entertained the idea of memorialising Operation Sovereign Borders at the AWM, an unspeakable proposition.

Speaking of how we have militarised asylum seeker policy, how about that $423 million approved by Home Affairs in a not-open tender to the beach-shack registered ‘security firm’ Paladin? Of course that is in addition to the ten billion+ dollars spent on off-shore detention, including $187 million to re-open and then close the cages on Christmas Island for no reason other than pre-election scare campaigning.

Going back a little further, to when Morrison was co-designing then-opposition coalition policy with James ‘butcher of Falujah’ Moylan, there is the estimated $400-600 million that Morrison and Abbott spent militarising our refugee policy. The rationalisation for this breathtaking outlay is the ludicrous claim that asylum seekers who arrive by boat are a national security threat. There is not one skerrick of evidence for this nasty rhetoric. None.

Add to that the $8.2 billion spent, with nothing to show for river health, on the Murray-Darling Basin Plan. Incredible that a $10 billion announcement in the dying days of the Howard government, when Malcolm Turnbull was Environment Minister, brought a sounder of swine to snuffle at the trough.

Note the $80 million spent on non-existent water that may or may not have flown downstream to Cubbie Station if there was a flood (see Anne Davies’ extensive body of work on water buy-backs here).

Then there is the mortal injury that is Robodebt. This oppression costs as much to administer as it recovers from welfare recipients, if you only count the dollars. Over 2,000 people have died after receiving AFP-branded notices of government-fabricated debts, according to the department that administers the program. The debt notices only go to working people of working age. In other words, they are probably not dying of natural causes, and they are certainly not dying of old age.

Is it irony that, other than for aged pensioners and veterans, the social safety net has been wholly dismantled? No, it is travesty.

Moving on.

Despite consistently dishonest claims by Liberal and National MPs, most notably chief carnival barker Scott Morrison, negative gearing almost exclusively benefits well-off households. You may have heard of opportunity cost, which I explain to students with the simple adage you can not spend the same dollar twice. The public cost of property owners, via negative gearing and rent assistance, pension asset tests and CGT exemptions, was estimated at $36 billion a year in 2013.

All that foregone revenue is a lot of public housing not built.

And then – deep sigh – what passes for climate policy. Like many others, I have written so much about this, including as a social researcher examining the entrails of the 2010 election, as well as during this campaign. It is desperately disheartening. I am exhausted by the sheer bloody-mindedness of it.

In brief:

The Abbott government repealed the price on carbon and replaced it with ‘Direct Action’, or paying big polluters to modify their plant and equipment. Emissions have increased ever since. Turnbull left this demonstrably ineffective nonsense in situ while his hapless environment minister, the now-Treasurer Josh Frydenberg, fiddled around with a ‘national energy guarantee’, which took out the Turnbull prime ministership. It was never legislated, and is now Labor policy.

Morrison re-branded this deliberately impotent free money approach as ‘climate solutions’. Rebranding is quite literally the only tool in his kit.

So I guess my question is:

Does taking billions of dollars from welfare recipients and First Nations people and PAYE earners and single mums buying school shoes, and giving it to mining companies and landlords and private off-shore prisons… does that sound like a government with no agenda to you? Like a party with no policy platform?

One final point

In February 2017, the Orwellian-named Fair Work Commission – which the Coalition, as with other federal statutory bodies, has stacked with political appointees – cut penalty rates (the top-up pay for working on Sundays and public holidays) to some of the most insecure, underemployed, and casualised workers in the country. A recent McKell Institute report found that if the Coalition are re-elected, some $2.87 billion will be transferred from low-paid workers to business owners and shareholders.

As any economist can tell you, the multiplier effect of $2.87 billion spent by members of low-income households, on essentials and in their local communities, is vastly more beneficial to the Australian economy than $2.87 billion in the pockets of people who have disposable income to spend on shares and overseas holidays and luxury imports.

In addition, PAYE waged workers pay tax before we see it. There are few – basically, no – tax deductions available to casualised workers in the retail and hospitality sectors. Business owners and shareholders, on the other hand, enjoy access to a huge array of tax write-down options.

This means that government revenue will decline as a result of the decision to transfer wealth upwards, in this case from low-income workers to business owners and shareholders. Why? Because we meet our tax liabilities in full, while business owners and shareholders are invited, by fiscal policy settings, to evade and avoid and minimise at every opportunity.

As with the reverse rhetoric mentioned earlier, the trickle-up nonsense so beloved by neoliberalism, this fiscal effect is the exact opposite of dominant economic narratives – about low-income workers and business owners – in the public domain.

To conclude

The 2019 budget, with its fabricated future bottom line, has sunk without a trace. And that is even with Treasurer Frydenberg, as part of his budget sell, releasing a picture of young Josh half-naked on his childhood bed. I am not joking. I wish I was. But it serves as a handy metaphor for this election. The public are poorly served by a campaign where the emperors are fully clothed, while legacy media pretend they are naked.

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Imagining A Parallel Campaign

[This post was first published on the evening of 11 April at the group blogging site Ausvotes 2019, which I have signed up to for the duration].

After confidently calling the end of the 45th Parliament on Thursday 4 April (‘as we head towards the final hours of the 45th Parliament…’), the press gallery was forced to walk back these premature statements of fact within 36 hours (‘Morrison likely to delay election campaign by another week…’).

Turns out that ‘sources say next weekend has firmed as the preferred timing’, a prediction from the above article, was also wrong. The ABC News Twitter account posted at 06:37am on Thursday 11 April that Morrison had left the prime ministerial residence to call on the Governor General.

And no, this is not a post about political journalism in particular, or major media generally getting it wrong, although I often do write a lot of words [waves hands vaguely] along those lines.

Instead, I picked the above example from the last week to illustrate why I want to counter the overload of what we call ‘retail politics’ and ‘horserace reporting’. There is no good reason to report that the parliament is over when the claim has not been verified; or that the election will be called on a specific date – especially when it wasn’t.

The Great Moral Challenge of Our Time

There is every reason, in contrast, to report on the significance of climate policy stasis which Australia has endured over the last decade and beyond. Intergenerational equity is an internationally accepted principle that has informed global efforts around biodiversity and environmental sustainability at the highest levels since 1972 (United Nations Stockholm Conference on the Human Environment).

In more recent years, the principle has been supplemented by intergenerational solidarity and intergenerational justice, not least because we have failed to honour this basic commitment to our children.

It is a dismal reality that the current and previous Liberal party prime ministers have used the statement above (correctly ‘declared’ by the last Labor prime minister, Kevin Rudd), to beat up on their political opponents rather than enact meaningful policies on climate change.

Since the Coalition government repealed the price on carbon, emissions in Australia have increased every year (charted by Guardian Australia economics writer Greg Jericho here). Australians have the heaviest per capita carbon footprint on the planet.

And the UN reports that we are unlikely to meet our obligations to the international community, to intergenerational justice, or to the planet. This is so regardless of whatever comforting lies we are told by the Coalition about reaching our Paris targets ‘in a canter’.

Voice Treaty Truth

If climate change is the moral challenge of our time, the Uluru Statement from the Heart is the moral roadmap to our collective future.

Yet after this most gracious of invitations was issued to the non-Indigenous people of Australia, then-prime minister Malcolm Turnbull rejected it. He did this five months later via a press release signed off by then-Attorney General George Brandis and retiring minister for Indigenous Affairs Nigel Scullion.

The Voice Treaty Truth movement encapsulates priorities nominated by Aboriginal and Torres Strait Islander Peoples during twelve regional dialogues and the 2017 Uluru Convention. The near-unanimous consensus from these processes is firstly a referendum to amend the Australian Constitution to include an Indigenous Voice to parliament; and then Makaratta, a word gifted by the Yolgnu, meaning ‘coming together after a struggle’.

That the Voice be constitutionally entrenched is essential, because past institutional representation of Aboriginal people, such as ATSIC, have been created and abolished by successive governments. That Treaty come before Truth is also essential, because the truth-telling must be led by First Peoples.

In other words, the sequencing is integral. I learnt this at Uluru Statement events I have attended, from Dialogues facilitator and Uluru Convention delegates Teela Reid, a proud Wailwan and Wiradjuri woman and lawyer, and Thomas Mayor, a Torres Strait Islander man living on Larrakia lands and union secretary. (Any errors are my own.)

One of the most substantive messages on Voice Treaty Truth is the reality that ‘the people are ahead of the politicians’. Research conducted by Reconciliation Australia found that:

almost all Australians (95%) believe that ‘it is important for Aboriginal and Torres Strait Islander people to have a say in matters that affect them’ and 80% believe it is important to ‘undertake formal truth telling processes’, with 86% believing it is important to learn about past issues (Karen Mundine, CEO, Reconciliation Australia, 11 February 2019).

We are unlikely to hear much about Voice Treaty Truth this election campaign; we typically hear little of First Peoples justice and rights in any timeframe. This does not mean future sovereign relations are moot.

Should it win government, the ALP has promised a referendum in its first term. So any reluctance by Labor to campaign on the courage of its convictions is surpassed only by the failure of the Coalition to grasp the import of the Uluru Statement from the Heart at all.

It’s the economy, because it always is

Announcing the election date at a press conference at Parliament House in Canberra, Mr Howard said it would be a decision for voters about who they trusted most to look after Australia and its economic future.

“This election, ladies and gentlemen, will be about trust,” he told reporters. “Who do you trust to keep the economy strong, and protect family living standards?” – Sydney Morning Herald, 29 August 2004

I intend to write more about fiscal policy during the campaign. In the meantime, I offer a few observations about the Morrison slogan on economic management, which is a myth based on a lie

First, like his other set-pieces – repeating the Turnbull trek to Tumut, re-branding Abbott’s ‘direct action’ (giving public money to big polluters) as a ‘climate solution fund’ (ditto) – Morrison’s catch-cry is copied from a previous Liberal Party prime minister.

The notion that this government has out-performed the previous Labor government on the economy does not stand up to the most cursory scrutiny. It is an absurd and dishonest proposition that a record of doubling the national debt, while presiding over growing inequality, exacerbated by falling or at best stagnant real wages, is somehow superior to management of the 2008 GFC so deft we dodged a recession.

The Labor economic strategy in 2008, at a time when greedy and destructive neoliberal chickens came home to roost on the watch of a new government, was praised globally, including by no other than Nobel Economics Prize laureate Joseph Stiglitz. For a moment there, everyone was a Keynesian, not that fiscal intelligence has a hope of prevailing in the birthplace of the Murdoch press.

Anyway where were we? Oh yes, the unoriginal branding without substance, and marketing rooted in dishonesty, disseminated by Scott Morrison. In my view, this duplicity and intellectual dishonesty goes to character.

Actions speak louder than words, so what does this sloganeering tell us about Morrison? That the prime minister has no creative thought or problem solving skills, alongside a complete absence of conscience?

As Minister for Immigration and Border Protection he was condemned by the UN Committee Against Torture. As Human Services Minister, as Treasurer, he presided over the most damaging welfare policies of three generations. You have to go back to captain inertia himself, Bob do-nothing Menzies, to find worse treatment of the lowest-income people in our society than by the incumbent.

Like most politics-watchers in this country, I am alert to the ‘preferred prime minister’ polling which shows that voters do not warm to Bill Shorten. And to be honest, I do not warm much to Shorten myself. But that does not matter, because it is public leadership that matters.

Possibly the worst metric on which the average punter could rely is personal judgements formed by journalists whose duty is to communicate policy choices to the voting public.

And that is why I have signed up for Ausvotes2019.