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regional development + the Australian settlement « Previous | |Next »
September 11, 2010

We know that the agreement struck between the Gillard Government and the regional Independents (Oakeshott and Windsor) focused on parliamentary reforms and a new deal for regional Australia. The principles invoked were that regions "have not been given their fair share" and that "equity principles" must prevail.

A new deal for regional Australia means regional development in a globalized world based on state intervention into the open market so as to advantage the people the Independents represent. What does regional development mean? How are we to understand that? How is it a break from the past attempts at regional development under the Howard Government.

LeaakB NBN.jpg

I haven't seen the agreement, but Paul Kelly has. His position on minority government, if you recall, is that we have a weak minority national government, a parliament where reform will be more difficult and a group of "special interest" politicians controlling the cross-benches.

He says in The Australian that at the level of Government it involves a new cabinet-level minister for regional Australia and a new department:

There will be a regional Australia cabinet committee, a regional Australia co-ordinating unit in the Department of Prime Minister and Cabinet, an office of northern Australia, a new House of Representatives committee for regional Australia chaired by an independent, a new government-funded regional Australia think tank, methodology to enable the Finance Department to better analyse spending by location, and a review of all rural and regional funding.

About time is my response. This has to be done properly given the complexity of economic and environmental problems in regional Australia. Done properly means economic growth and supporting regional communities whilst shifting to a sustainable Australia

Kelly's interpretation of this approach to regional development is that:

The name of the game is redistribution. With invocations of that ageless Australian narrative of the bush in its fight against "drought, floods, fires and cyclones" the document endorses notions such as "place-based thinking" and "localism". It is notably weak on the economic adjustments and productivity challenges facing the regions....This resurrects an old Australian instinct described in the immortal words of historian W.K. Hancock of the state as "a vast public utility whose duty it is to provide the greatest happiness for the greatest number" (along with winning votes for several political generations).

I have little problem with "place-based thinking" and "localism", and I accept that Australia's public philosophy has been utilitarianism, and that this moral philosophy underpins neo-classical economics' conception of cost benefit analysis. Good public policy is that which produces the greatest happiness for the greatest number.

Now there was a substantial shift in the economic policy regime in Australia in the 1980s as market liberalization (open to foreign competition, and largely de-regulated and privatized) was deemed to be a desirable response to the changed external economic environment (a global economy). Kelly's interpretation links regional development within those political traditions that have never accepted the post-1983 pro-market reform era of Hawke and Keating ---and we should add the neo-liberal mode of governance.

Kelly says regional development represents a return to the Australian Settlement that was set out in his book The End of Certainty (1992, 1994).

There have been two influential political traditions that never accepted the post-1983 pro-market reform era that delivered Australia recession-free from the recent global financial crisis. They are the unreconstructed rural interventionists that often mock the Nationals as sellouts and the ideological Left, once strong in the ALP but now at home in the Greens and sections of the education establishment where the Greens draw much support.It is tempting to see the current crossbenchers as embodying these two throwback movements, but dressed up in the fashion of caring environmentalism.That raises the heresy that the coming parliament, far from constituting an exciting new politics, is actually a reversion to the discredited past.

Why cannot there be regional development and an open economy? Why isn't this a possibility? If state developmentalism, a central plank in Australian Settlement, refers to the state playing a substantial role in promoting and regulating economic development, then there can be diverse threads in this weave.

For instance, Geoffrey Stokes points out that Kelly reduces state developmentalism to protection and tariffs. Referring to Marian Sawer's The Ethical State? Social Liberalism in Australia, Stokes says Kelly overlooks another dimension and rationale for state developmentalism that extends beyond the economic:

the tradition of social liberalism evident in Australian parties of both the Left and Right encouraged them to adopt an interventionist state ideology for reasons associated with giving citizens a ‘fair go’. Through implementing a wide range of social and economic policies, the role of the state was to ensure that all citizens were given the opportunity to develop their potential fully. The intersection between the economic and the social is especially evident in the requirement for equal opportunity in education policy, but it is also apparent in other policy areas.

Instead of Kelly's interpretation of a throwback dressed up in the fashion of caring environmentalism, we have the possibility of regional development as the intersection between the economic and the social and the environmental.

| Posted by Gary Sauer-Thompson at 12:23 PM | | Comments (12)


Paul Kelly's ideological discourse--- ie., a form of illusion, or ideology that imposes a closure on political interpretation--- becomes quite open in the last paragraphs of his article. This is where he drops in The Australian's agenda of the Gillard government as illegitimate.

He says that:

the commitment to a three-year term in the agreements demands permanent scrutiny. This provision is a political deal without legal meaning. It is inconsistent with the Australian Constitution, our Westminster principles and the operating rules of every parliament since 1901.

Do we not have fixed terms of parliament for some states in Australia, eg., New South Wales, Victoria, South Australia, Western Australia, the Northern Territory and the Australian Capital Territory governments operate with fixed terms.

Ignoring this Kelly continues:

The essence of Westminster democracy is workability such that, at any time, the prime minister can procure a new election or the parliament can change the government. The three-year pledge suits Labor and the independents. But it may not suit the public. If this government and parliament fails the public interest test it should be terminated and the issue returned to the people. This week's deal is riddled with an unacceptable arrogance that the people are to be shut out for the next three years.

Kelly ignores the two key benefits of fixed terms:, first, that they remove the opportunity for a sitting government to gain political advantage from the timing of an election and, second, that there is certainty about electoral terms for the government, other political parties, the private sector and the community.

Kelly's become a Murdoch hack. he should retire before he loses even more intellectual credibility.

Simon Crean is a good choice. He is a hard worker and likes to get results.

Finance and Climate change ministries are odd choices and will end in tears.

I wonder just how much we would miss the present Murdock stable if the US fox version was installed here?

I reckon it would have been imported, but for our libel laws - a curious notion for the libertarians here.

You could argue that Kelly's position is the throwback one, as he wants to go back to the 1890s--before a formal labour movement existed. Kelly's goal has always been to change the power differential between labour and capital in Australia. He supported the New Right push in the 1980s to diminish Arbitration, and he supported workchoices.

Kelly's version of Australian modernisation--breaking free from what he calls the Australian Settlement--is really a project to diminish the social and political power of the organised labour movement. ironically, Hawke and Keating participated in this project, too.

One way to look at regional whatsits might be to extend the principle of Horizontal Fiscal Equalisation (aka Fiscal Equalisation) to defined regional areas or maybe local Govt. areas. This would cause headaches for State Govts, however, since they would have to switch resources from urban to regional electorates, which would be politically dangerous.

So should the Commonwealth do it, with Commonwealth money? Well, that would create the same problem, only the relevant electorates would be Commonwealth ones, not State ones.

The really irritating problem is that most people don't live in regional Australia. They live in overcrowded coastal cities.

Maybe the best first step would be to set up hairdressing salons in more regional towns, as recommended in "A Town Like Alice" - remember? What was the next step - dress shops? I can't remember.

In Western NSW (Western compared to Sydney) there are only two things that really need doing 1. NBN Broadband (and the Nats agree) 2. Bells Line Expressway

The rest will take care of itself.

Actually I would add after that we can then have 3) an argument over rail.

every region, including the southern Fleurieu Peninsula + Riverland regions in SA, wants NBN Broadband, new freeways (transport corridor ) to connect to a major city and a speedy rail link to the city.

The latter wont happen re Victor Harbor or the Riverland --they pulled up the rail line to Victor Harbor that was there before freedom was identified with the car. Adelaide is only concerned with extending the suburban rail line south and freeways to the north as it continues to expand.

It's all about cars + freeways.

by western NSW do you mean Lithgow, Bathurst, Orange, Parkes?

Or Wilcannia?

isn't Paul Kelly working within neo-liberal terms? The constructed market is the organizing and regulative principle of the state and society. The state is evaluated in terms of its capacity to to sustain and order the market and he ties the state's legitimacy to its success (reforms) in this area?

Gary, the former.


Kelly's Neoliberalism is the surrender of Australian political traditions to the disciplining government of global financial markets. His performance of historical omniscience and pompous bluster is all in the service of this project, which he identifies as modernisation. All that's solid melts in air . . .