April 19, 2012
Joe Hockey goes to London and the Institute of Economic Affairs --"the UK’s original free-market think-tank” to call for the end of the welfare state in western democracies. Entitled The End of the Age of Entitlement Hockey says that for western democracies the party is over. The "party" is wanting a lifestyle we cannot afford but are quite happy to borrow from others to pay for.
The strategy is to reduce the size of government, because we need to give people, individuals, families, small businesses more control over their lives to be able to compete with our nearest neighbours in Asia. Hockey says:
Despite an ageing population and a higher standard of living than that enjoyed by our children, western democracies in particular have been reluctant to wind back universal access to payments and entitlements from the state....It is ironic that the entitlement system seems to be most obvious and prevalent in some of the most democratic societies...So, ultimately the fiscal impact of popular programs must be brought to account no matter what the political values of the government are or how popular a spending program may be.
Whose entitlements is Hockey referring to? Corporate welfare? The diesel fuel rebate? The welfare state? Or middle class subsidies--such as those for private health insurance and wealthy private schools? It's the welfare state of course.
Hockey was primarily referring mostly to Europe, Britain and the US, but Australia is placed in the context of its Asian competitors. He says that in contrast to Hong Kong with its low taxes and no safety net Western democracies:
have enormous entitlement systems spanning education, health, income support, retirement benefits, unemployment benefits and so on...In all these areas people are enjoying benefits which are not paid for by them, but paid for by someone else – either the taxes of those who are working and producing income, or future generations who are going to be left to pay the debt used to pay for these services.
Government revenue in these western economies still falls well short of meeting current government spending initiatives.The difference is made up by the public sector borrowing money. These entitlements have now begun to hang like a millstone around the neck of governments, mortgaging the economic future of many Western nations and their enterprises for generations to come.
What strikes me is not Hockey's candour in speaking out or his courage about cutting back on the entitlement culture in Australia. It is the hypocrisy. Few have done more to promote such a culture than the Coalition Government under John Winston Howard.
Secondly, whilst in opposition the Coalition has fought almost every effort by Labor to means-test or otherwise curb welfare entitlements. True, it has supported budget crackdowns on the proliferation of such benefits as the disability support pension, but it has opposed any move by the government to go after so-called middle-class welfare, such as the private health insurance rebate, the baby bonus or the family tax benefit. It has opposed paring back of subsidies to big miners and the fossil fuel industry, whilst attacking further subsidies for the automotive industry.
Hockey's neo-liberal policy is very clear: increase the incentives and support for business to get growth and profits back (ie., shoring up the private sector) and take a hard look at the welfare entitlements of the people. Some entitlements are better than others and those of the working people who depend on the welfare state for their well being will be subject to the pruning knife.
It is the continuation of the backlash against the welfare state and the push for a new political economic order in the 1970s; a backlash whose fundamental feature is fundamental feature is the disciplining and disempowerment of the working class.
Anytime there is a crisis in a nation state the neoliberals say the problem is the strength of the welfare state, it's the huge expenditures of the welfare state. Their practical aim is to redistribute wealth towards the upper classes. and ensure that it is concentrated there by restoring class power in a very narrow band of the political economic elite.