Category Archives: Labor Party

Is the emissions trading scheme doomed?

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After months of earnest assertions to the contrary, the Rudd Government has finally caved in to the pressure and postponed its emissions trading scheme. Although the nation’s worsening economic situation no doubt accounted for a substantial component of that pressure, its certainly fair to say that the government’s backdown represents a political victory for the Opposition. For some time now Malcolm Turnbull has been promoting the postponement cause, and despite the fact that his party has engineered yet another schizophrenic change of mind on the issue, refusing to back the government’s revised approach to emissions-trading even though it owes much to its own, it would appear that he has won this little stoush with the Prime Minister.

Personally, I think there are credible cases that can be made for either side of the debate. It goes without saying that while the economy was getting a pummeling, introducing a new, somewhat risky mechanism that threatened to impact profitability and therefore jobs for thousands of Australians was a politically dubious step to take. While I accept the fact that the climate change science demands swift and effective action, most people (myself included) instinctively feel that a delay of a year or two is probably not going to end life on Earth as we know it. In ideal conditions I would love to see action now, but we are living in far from ideal conditions. The government has already spent billions of dollars during the past nine months, stimulating the economy and sending the country into a significant amount of debt in the process. It must have a serious concern that it commands neither the requisite economic or political capital to launch the emissions-trading scheme during this time of crisis.

On the flip side of the coin, one really does have to question the Rudd Government’s commitment to climate change. The science calls for bold steps, not delays or a pragmatic watering down. I frankly don’t understand why the government has only now decided to cave in to the Opposition on this issue. If it really is the case that the economic situation is so dire that implementing the ETS would be unsustainable, the government should have known this six months ago. When economists the world over were saying six months ago that it is likely going to take over a year to get out of this slump, the government should have been paying attention and started sounding the alarm bells then. Instead, it continued to glibly peddle the line that the ETS would be implemented as scheduled, despite the fact that the global financial system was crumbling all around it. Putting the science aside completely for just a second, we would have to conclude that this exemplifies poor judgement.

While we have an Opposition full of climate change sceptics and opportunists and a government with such a wavering commitment to the issue, it’s hard to be very confident that we are eventually going to get an outcome. At this rate, I would certainly not be putting money on a functioning emissions-trading scheme being implemented in Australia any time soon – whether 2010, 2011 or 2012.

Setting a date with a bullet train

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So far, I don’t think Joe Hockey has been much chop as Shadow Treasurer. He has come up with the odd good line, but I don’t think his political manner (for want of a better term) really suits the portfolio he has been thrust into. On the other side of the fence sits Wayne Swan, a man with probably less confidence or exuberance than anybody who has been Treasurer for well over a decade. Despite this, he has one key strength: the capacity to bore. Swan is a technocrat through and through, and when he hasn’t been putting his foot in it, he has been ideal for the government from a noise minimisation perspective. Hockey’s gregarious nature and his often jocular approach to managing his portfolio does not match up well against Swan’s colourless demeanour. The Opposition need sharp and incisive, not rambunctious. It needs a Nick Minchin-type on the attack.

With this year’s Federal Budget still a month away, the sniping has already begun. Joe Hockey has come out in the media asserting that the Opposition will block the Budget if it feels that there it contains “waste” or “mismanagement”. On recent form, one would have to think that the Opposition will view at least some of the Rudd Government’s further stimulus measures in this way. It’s a pretty gung-ho approach to take when one considers the Prime Minister’s extraordinary approval ratings and the general mood of the electorate, which is predisposed to supporting the government in times of crisis. While thus far this year I have felt that the Rudd Government would serve a full three years before calling an election, despite the emergence of several double dissolution triggers, if the Opposition blocks some key planks of the Budget, I think calling an early election would be justified and even, arguably, desirable.

Ideology is such a lonely word

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Kevin Rudd’s 7700 word essay on the global financial crisis, published in this month’s edition of The Monthly, was a remarkable contribution to serious political debate by a sitting Prime Minister. What isn’t remarkable given its length and lack of humor is that it appears to have gone down like a lead balloon. Mentions of the essay in the media seem generally restricted to pointed criticisms of it from members of the Opposition or their sympathisers. A few journalists (such as The Australian‘s Matthew Franklin) have even had a go at “Julie Bishoping” the Prime Minister, on the somewhat flimsy pretense that 26 words of the essay’s 7700 words were almost identical to a passage that appeared in an recent Foreign Affairs article. Err… ouch [wet noodle limply falls to ground].

For the benefit of those who haven’t splashed out on the magazine, I am going to try and offer a hopefully more level-headed summary over the fold.

Continue reading →

Federal Labor, meet rock and hard place

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Recent developments in Victoria and the ongoing economic turmoil being experienced worldwide have placed Labor in a difficult position with respect to its pre-election policy program. On the one hand, the Prime Minister, Treasurer Wayne Swan and Finance Minister Lindsay Tanner have felt compelled to act and act in a significant way by pushing Australia into public debt for the first time in some years with their $42 billion stimulus package. On the other hand, the Rudd Government was swept to office in November 2007 with one of the more ambitious (and expensive) programs of policy reform pushed out into the electorate in recent elections. Whether we are talking about Federal Labor’s so-called “education revolution”, the proposed national broadband network, or the government’s mooted overhaul of federal-state relations in health policy, we are talking about reforms that if correctly implemented, should result in a noticeable improvement in the affairs of the nation.

Considering the profound impact of recent developments, we might well ask whether the Rudd Government, its budget outlook now bleak, is seriously still in a position to deliver on all (or… any?) of its really big promises? The government’s emissions trading plan has, of last week, been sent off to another review by the government’s Economics Committee. The national broadband network, dogged by delays and controversies over wrangling with Telstra, could perhaps best be described as resident in limbo. Today the interim report of the National Health and Hospitals Reform Commission threw up a rather radical proposal for a new public dental scheme, funded by a substantive increase to the Medicare levy. Proposals like this might have got a guernsey by a bold government in a period of strong economic growth, but realistically what chance do they have of getting up when the government’s budget is so under the pump and the future uncertain?

It would seem almost certain that the Rudd Government is going to be heading into the 2010 election with a handful of its most visible 2007 election policies in rather troubled train or else abandoned altogether. While Federal Labor can hardly be blamed for the financial crisis furrowing the brows of leaders all over the planet, if they do not deliver on their promises in the lead-up to the next poll (or else have a bloody cogent explanation!), one could hardly blame some voters for calling them out and giving the Coalition their vote.

Should Federal Labor consider cutting GST?

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In the current global economic environment, governments across the world are looking for ways to stimulate spending in their domestic economies. Consequently, the beleaguered British Government is set to temporarily cut the rate of their VAT (value-added tax) for a one to two year period, in the hope that it will stimulate spending in the immediate term. Toby Helm and Heather Stewart have the details that are at hand for the moment in The Guardian:

Alistair Darling will make a high-risk bid to lead Britain out of recession tomorrow, when he is expected to cut VAT and entice the British people to go on a pre-Christmas spending spree.

…

Last night, as Darling put the finishing touches to the most important financial statement of Labour’s 11 years in government, there was speculation that he might slash the rate to 15 per cent [from 17.5 per cent], a move that would cost the government about £12.5bn a year.

This is an interesting development because it raises a few questions about the Australian Labor Party’s stance on the local GST. Historically, of course, Labor opposed the introduction of the GST at the 1998 election and fought a second unsuccessful election campaign in 2001 on a policy of GST “rollback”. Now that the GST has been in place for practically a decade and is firmly part of the architecture of federal-state funding, it would appear unlikely that the Rudd Government would seek to manipulate it at this juncture. Cutting the rate of GST in Australia would have considerable implications for state funding, given that all revenue generated by the tax flows through to the state governments. In short, for the rate of GST to be reduced, one would have to think that the existing federal-state funding framework would need to in the least be padded by some non-GST contingency funding from the Federal Government – or perhaps reframed altogether.

The other part of the puzzle worth considering is whether lowering the rate of GST would realistically have any effect on consumer spending at all. Let’s say that the rate of GST was cut by the Federal Government tomorrow from 10% to 5% – an astronomical 50% cut. Consumers presumably would have more money in their pockets every week as a result of their reduced weekly spending – money that may or may not then be reinvested in more goods and services, stimulating the economy. Given present consumer confidence and the vast uncertainty that still exists with respect to the global economic situation, it is questionable as to whether cutting GST would actually result in a positive outcome, a fact that Peter Mandelson points out in the Guardian article with respect to the proposed British VAT cut.

In any case, it would appear that the Rudd Labor Government could not realistically afford a rate cut of anything like that magnitude without going into deficit. The revenue generated for the states from the GST in 2008-09 was projected at $45.5 billion, meaning effectively that funding such a 50% GST rate cut would cost in the ballpark of $22.75 billion; a figure already exceeding the now optimistic total budget surplus of $21.7 billion projected back in the May Budget. Without some credible evidence suggesting that cutting the rate of GST even by a small amount is definitely going to deliver results, it would be a highly risky endeavour for the government to pursue it.

A scandal a day keeps supporters away

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Just when one thinks that things seriously can not get any worse, they get worse for NSW Labor. NSW Assistant Health Minister Tony Stewart has jeopardised his position and indeed further jeopardised the Rees Government by managing to somehow involve himself in a scandal at a recent Garvan Institute dinner. Stewart has been accused of verbally and physically abusing one of his staffers at the dinner, with the result that the staffer in question was moved to another office, and a formal complaint regarding Stewart’s behaviour was raised to Rees today. Stewart has been removed from the ministry pending an investigation into the matter.

Regardless of whether Tony Stewart is really to blame for all of this or not, the fact that this whole issue has erupted is a further unfortunate indictment of the NSW Labor Government. When members of the government and their staffers can’t find a way to get along during their day-to-day business without causing a needless scandal for their government, you have to wonder if anything is actually being accomplished for the people of New South Wales. In political terms, the Garvan Institute dinner that Tony Stewart attended was a free hit for him and his staff, and a free hit for the Rees Government. How it has resulted in this latest bad news story quite simply beggars belief.

When friends, family and colleagues talk to me in the lead-up to the next state election, soliciting honest advice from me on why I think they should vote for NSW Labor, I am really sad to say that on the government’s recent form, I don’t think I will be in the position to be in the slightest bit persuasive.

It’s soft-core smear, but smear all the same

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If we needed any more proof that NSW Labor has struggled to take a trick over the past couple of years, the amazingly short tenure of Matt Brown as NSW Police Minister has provided it. Freshly minted Premier Nathan Rees had more than enough on his plate already (indeed – probably enough for a few lifetimes), and the last thing he needed was the silly and needless scandal that has erupted over the last few days.

Politics is a tough business, and I don’t think anybody reasonable would begrudge Matt Brown or any politician from letting off some steam from time to time. Unfortunately, we live in a political age when the media and political operatives (in this case, Imre Salusinszky from The Australian) across the country are remorselessly on the hunt for “news” that can be construed in any way as controversial. Brown should have been aware of this, and should have put his noggin to good use instead of acting the way that he allegedly did during his post-Budget party.

Rees, of course, made the right decision in presumably forcing Brown to resign from his post. One wonders whether the Premier should demand an even more stringent level of disclosure, given the abysmal track record NSW Labor has had with regards to resignations and embarrassing incidents over the past decade in power. Perhaps the new Premier should force any member of parliament who is implicated in a scandal that breaks before he hears about it to resign not only from any ministerial duties but from parliament altogether, forcing a by-election.

In New South Wales in particular, the Labor Party desperately needs a public image overhaul. It can simply not afford to endure any further absurd scandals of this nature; it’s time for the Premier to lay down the law to his colleagues.

The beginning of the end for Iemma?

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I am on the other side of the world, but even I can scent a whiff of change in the air for NSW Labor. Setting aside for a moment the disturbing and unacceptable schism between the parliamentary leadership and the rest of the party in relation to electricity privatisation, it would have to be a rare punter indeed who believes that the Iemma Government is doing a stellar job of managing the state. Reiterating this perception, Tim Dick has a frankly unsurprising report in the SMH today noting that a Griffith University study has found that the NSW State Government is the most unpopular government in the country. If that wasn’t enough, Andrew Clenell and Alexandra Smith report that a leadership challenge is imminent, backed by party general secretary Karl Bitar, who has fallen out with Iemma and Treasurer Michael Costa over the electricity privatisation issue.

What I think is important at this juncture is for NSW Labor to do some seriously constructive navel-gazing. It’s all very well to talk about changing leaders, but what is really required is a culture shift in the way the party interacts with the electorate and indeed conducts its affairs. It’s arguable that such a shift can only really happen if the parliamentary leadership changes, and on that basis, in the absence of any serious prospects of improvements otherwise, I would support a change in the leadership at this point. Despite his professed loyalty to the Premier, his factional handicap as a member of the Left and his close association (as Deputy Premier) with the current leadership team, I am inclined to think that John Watkins is the right man to take the party forward.

Let’s put the last fifteen months in perspective. The Iemma Government won a fairly strong election victory in March 2007 over an Opposition that was rendered incredible and unelectable by its then leader, Peter Debnam. Thanks to Debnam’s weak leadership and somewhat flawed personage, the government honestly did not encounter the tough electoral challenge it might have expected after four years of decidedly so-so governance. From what I can gather, Opposition Leader Barry O’Farrell has not exactly been blazing the trail in the job since obtaining it a month after the election, but nor has he been doing that badly either. I think most voters would agree with me when I suggest that he is a credible alternative leader, even if he is not doing a very inspiring job. This spells trouble for NSW Labor in 2011 unless people’s impressions of the government change for the better and change fairly rapidly.

As a party member, I do feel that Morris Iemma really has tried his heart out to put things right over the past couple of years, thrown into the lion’s den as he was after Bob Carr’s abrupt resignation. Although I tend to disagree with Michael Costa’s views more frequently than I agree with them, I do believe he wants to do the best he can for the party. However, particularly in light of the electricity privatisation debacle, with the party wrenched apart in a recklessly destructive fashion, I don’t think it has been good enough. For many punters, I am sure it has not even been close to good enough. For the good of the party and indeed the state, I think both Premier Morris Iemma and Treasurer Michael Costa should stand aside and let a new leadership team try and steer the government in a fresh direction.

Modern politics and that dirty, dirty word

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One of the most obscene political words that one can use today, should one attempt to use it in some positive light, is of course socialism. To attempt to suggest that any particular socialist government might have achieved some good things for the country during its time in office is effectively tantamount to saying that you wish that George Bush or Kevin Rudd could be more like Joseph Stalin. In public discourse, we may as well just pretend that the word “socialism” and variants thereof have been blacklisted by some global, authoritarian political language regime. In the new political lexicon compiled by the enlightened victors of the Cold War, everything whatsoever associated with socialism is bad – or worse, evil. For some, this faith in the fact that socialism and everything associated with it is evil transcends the intellectual and becomes a quasi-religious fervour. As sure as Satan is evil, for such people, you can rest assured that socialism is evil as well.

In mainstream political culture, the central avenue through which this curious treatment of the word “socialism” emerges is through the world’s major centre-left political parties. The Labour Party in Britain and the Australian Labor Party have both publicly exhibited some embarrassment at retaining a reference to socialism (being a dirty word, and all) in their respective party constitutions. Soon after Tony Blair assumed the leadership of the Labour Party in 1994, the party voted to change the wording of Clause IV of its constitution to “modernise” the party’s relationship to the so-called “socialist objective”. The revised clause does interestingly make a reference to socialism (albeit qualified with “democratic”), but removed the admittedly anachronistic references in the clause to the common ownership of the means of production, distribution, and exchange. The Australian Labor Party has also discussed dropping the “socialist objective” from its constitution given socialism’s “taboo” status, with Kevin Rudd even going so far as declaring that he has “never been a socialist and never will be a socialist” after being elected Opposition Leader by the party in December 2006. To that, one would have to wonder precisely what Kevin Rudd means by “socialist”, given his known religious views and support for public health and education.

All this namby-pamby tip-toeing around the word socialism does, for someone like myself who believes that not everything associated with socialism is evil, intellectually grate. It makes comments like these from London Mayor Ken Livingstone in an interview with The Guardian seem quite refreshing by comparison. Here is Red Ken on some of the challenges facing the world today:

“All the politics of the post-war period was about the clash between the Soviet Union and America, and virtually all issues ended up being subordinated to that,” he says, “Now, the question is, what is the most a socialist can achieve in a global economy? What do we do about climate change bearing down upon us?

“In a sense, it brings us back to the basic socialist tenets. The only way you get through this is by sharing and planning, resource redistribution, allocating priorities – the market isn’t going to get us out of this. The market is a brilliant system for the exchange of goods and services, but it doesn’t protect the environment unless it’s regulated, it doesn’t train your workforce unless it’s regulated, and it doesn’t give you the long-term investment you want.”

Livingstone goes on to heap praise on Hugo Chavez, which is probably unfortunate. However, his beautifully succinct statement above, which summarises some of the limitations of markets with respect to some of the major problems facing the world today, is unequivocally, undeniably true, regardless of if you think Karl Marx was an economic Satan or not. It is true that Livingstone is portrayed in the media as a stereotypical leftist (and he certainly does his part to perpetuate that perception), in a way that perhaps Prime Minister Gordon Brown and Prime Minister Kevin Rudd are not. However, one does somewhat wish that the leaders of centre-left parties like the Labor and Labour Parties would use reality as a device for crushing at least part of the stigma associated with the s-word.

Socialism as a body of thought is not in any sense equivalent to communism. The vast majority of people who refer to socialism in positive terms today do so out of deference to the humanistic and compassionate qualities of the ideology, not to the horrific calamities instigated in its name. Stripping away the irrational bonds of the taboo enforced by some intellectuals about this peculiarly modern dirty word, the truth of the matter is that we are all socialists now, at least to some extent. The “sharing and planning” that Livingstone speaks of is a basic, critical human activity that is inextricably embedded within the infrastructure of modern human society, and if compassionate and effective civilisation remains a desirable goal for the human race, we should hope it long remains there.