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2011: Big Picture politics « Previous | |Next »
May 10, 2011

What is the ALP's big picture of Australia's future? Do they have one apart from everyone having to work long hours? Is it's big picture a work in progress? Or is it a case of week by week crisis management? Will the budget begin to fill in the details, as it charts how the Gillard Government plans to make the shift from a budget deficit of around $50 billion in 2010 to a surplus in 2012-13.

We can ignore the Coalition because what we mostly hear from them on economics is them banging on about the "massive" debts and deficits and how the Gillard Government has not been tough enough in slash and burn. Only the Coalition has the courage to do slash and burn (eg., $50 billion worth of savings). Like economists they love inflicting pain.

LeakBGillardBigPicture .gif

My impression is that Gillard Labor doesn't have a big picture of Australia beyond that of Quarry Australia. The emphasis appears to be on skilled migrant labour being brought into the country to ensure the continuation of the mining boom and to look after the interests of the multinational mining corporations. Yet the record mining profits are not lifting the budget into surplus, as they did in the past. The miners are not paying much tax.

The emphasis on welfare reforms and spending on education and training to increase workforce participation is for low skilled labour in a variety of Mcjobs (casual labour in the fast-food industry, cleaning, or supermarkets) because there is an increasingly large underclass that lacks the skills to become part of the middle class.

If there is a sketch, then it has something to do with keeping the Australian manufacturing industry going in a globalized world and the national broadband network. However, there is little coming out of Canberra that addresses questions such as: 'Where does Australia wish to be in a global digital economy?' 'Or does Australia want to create jobs, improve domestic productivity, increase exports and advance its competitive position in a global digital economy?'

The emphasis on education is because many of Australia's students are still stuck in a ditch. Those with just a high school education increasingly find themselves locked into the low-wage end of the labor market with little hope for better jobs. The educational attainment in many public schools has not kept pace with our strong technological advancement; nor is it anchored to student outcomes. Consequently, the quality of public education needs to be improved to prevent its decline.

There is a pervasive sense that poverty is destiny, that schools can make only a small difference, so why bother, since we’ll never fix education until we fix poverty. That ignores the differences that individual schools can make in terms of performance and innovation. It ignores that the global marketplace will be very unforgiving to a populace that doesn’t have the skills it demands. It also means obstacles to upward mobility.

The danger here is an increasing polarization of the Australian economy with increasing income inequality as the shape of the workforce increasingly looks fat on both the high and low ends and thin in the middle.

Well, in Swan's fourth no-frills budget there was welfare reform, a cut back on family benefits for the middle class, $22 billion of spending cuts and increased spending on mental health in the budget, coupled to a promise to be back in the black with a $3.5 billion surplus in 2012-13.

There are no tax cuts in the budget but no structural tax reform --as suggested by the Henry review---- either. And that $22 billion of spending cuts is offset by $18.9 billion in new spending. Net savings: $2.8 billion.

Credit needs to be given to Swan's emphasis on trying to get people out of poverty traps and devising ways to prod them towards participating in the market economy. However, there was nothing to facilitate higher education to facilitate the emergence of the Clever Country in Swan's budget. I cannot see anything there that ensures the mining boom ends with something to show for it.

The mining boom, it would seem, is the limit of the Gillard Government's horizon. The horizon of the Coalition is relentless assault--- the higher-than-expected deficits are evidence of Labor's spendthrift ways and the forecasts of future surpluses are not to be believed.

Over at The Drum Mark Bahnisch says:

The truth is that this budget has missed the real opportunity to “ensure prosperity beyond the mining boom”, to invoke one of Wayne Swan and Kevin Rudd’s phrases from 2007. Short-term political fixes are substituted for long-term vision, and the investments we were once promised - the ideal of a nation where innovation and new jobs in new sectors, new sources of value both for the nation and for those who want something better than Quarry Nation - seem to have receded below the horizon. The light on that hill has gone out. Or perhaps the hill has been strip mined.

That's a great image---Labor's light on that hill has gone out because the hill has been strip mined.

| Posted by Gary Sauer-Thompson at 8:53 AM | | Comments (12)


On one hand, there's a limit to what this government can do given the numbers in the parliament.

On the other hand, they're just hopeless. So depressingly hopeless.

Gillard Labor still seem wedded to the model of “industrial citizenship” that laborism put in place in the 1950s. This is the white, blue collar male industrial worker, co-operating with white, male employees in manufacturing industry. Laborism has been reduced to “jobs, jobs, jobs”.

In the SMH Ross Gittens says that:

To ensure this commodity boom doesn't end in tears and and that it ends with something to show for it, we need to, first, keep demand and supply growing in tandem and thus avoid inflation pressure and, second, increase our savings from the proceeds of the boom and, third, ensure the extra jobs go to our own people rather than immigrants.

The early return to surplus helps with the first two objectives; the budget's new programs to improve vocational training and increase the workforce participation of disadvantaged workers helps with the third.

Julia has increasingly adopted the Howard mindset that the lower orders (single mothers, unemployed, poor, disabled) are to be forced to do things, in their own best interests of course, not encouraged to do so. In short she is all stick and no carrot. When it comes to big business and the miners in particular on the other hand, it is all, please sir, would you mind sir, oh, sorry sir. The fact that the BCA as well as the AIG both like the budget should be seen as a matter of shame.

It is indeed hard to imagine anything different a Liberal government would have done (ignoring of course, the shallow, unblinking hypocrisy of Hockey's new found concern for working families doing it tough).

By the way Gary have switched your link to a feed connection on my blog. You might look at using some feeds from your favourite sites (ahem) in addition to links if your blog software allows the option. It means readers are constantly alerted to the addition of new material to the blog/RSS feed rather than having to check at random.

The Coalition is the party of No. All you hear is no no no. Expect them to attack the middle-class welfare cuts (eg., the elimination of tax breaks for stay-at-home spouses without kids) as an attack on aspirational Australians and class warfare (milking the rich to pay the poor).

So what's aspirational about women with no children staying at home?

Gillard and Swan are banking on the China boom to see them through---ie; to restore the budget to surplus and build new infrastructure.

Why then act to ensure that they take less from the Big Miners---that the Minerals Resources Rent Tax declines as a share of GDP rather than increases?

Tax the miners more not less.

Michael Farnsworth says re Swan's Budget:

Nothing much has changed. The government continues to struggle, its central characters singularly unable to assert themselves over a surging Opposition and a public that is variously disappointed, disillusioned or downright hostile.

That is pretty much the state of play

"What is the ALP's big picture of Australia's future?"

work until you drop in a country run on the alarm clock.

Malcom will have to do something very bad to not be PM after the next election so any forward targets by this government beyond their term are irrelevant.

Bunker down and wait them out is my advice.

Re: "We can ignore the Coalition because what we mostly hear from them on economics is them banging on about the "massive" debts and deficits and how the Gillard Government has not been tough enough in slash and burn."

The Coalition's strategy, is not about policy detail, it's about furthering the ''Labor is out of touch on cost of living'' attack. Its incompetent and bad and must resign. Its creating an atmosphere of chaos.

The policy is contradictory. On the one hand he attacks the $2 billion saving from family benefits as ''class warfare'' that will hit ''struggling families''. On the other hand, he attacks the government for looming interest rate rises because he says it is spending too much and we are sinking into debt. The government didn't cut spending enough.

The Gillard Government does not see Australia as an innovator and developer of new technologies, even though Australian's have invented much of the solar technologies that are being commercialised elsewhere.

The budget saw a whole host of schemes either cut, closed, recycled or pushed back beyond current spending horizons.

So much for the knowledge economy and Australia's intellectual property.

re your comment:

You might look at using some feeds from your favourite sites (ahem) in addition to links if your blog software allows the option. It means readers are constantly alerted to the addition of new material to the blog/RSS feed rather than having to check at random.

The publishing software is not Wordpress--its old Movable Type.

Its due for an software upgrade and so I'll see what can be done.