February 5, 2014
Big Business now has its own Government in power to implement its reform agenda.
The rhetoric of that agenda can be found in an editorial in the Australian Financial Review. It refers to Joe Hockey's End of the Age of Entitlement speech which stated that as governments around the world had become dangerously indebted, the idea of spiralling entitlement – endless handouts from money someone else has earned – had to end. The "age of personal responsibility" (private virtue, thrift and self-reliance) has to take its place. The role of government is to get out of the way of change.
What does the above rhetoric mean?
According to the AFR's interpretation it means nothing less than breaking the entrenched political economy of the modern welfare state, including corporate welfare. Their interpretation of Hockey's speech is this:
Australia is not broke. But the spending party is still over because our medium-sized, resource-driven economy is leaving its biggest mining investment boom of all time with a budget deep in the red, just as the budget costs of an ageing population are beginning to bite. Lifting taxes higher and higher to pay for all this was no solution....So rationalising government services that were draining the budget was the only option.
Note how the argument implies that Australia will go broke if the politics of austerity is not embraced to roll back the welfare state. There is no other way.
We've heard that neo-liberal slogan before. The neo-liberals then routinely assert that Australians are addicted to welfare and the welfare lobby is committed to maintaining the "poverty charade".
No mention is made of the economc reality that the budget deficit inherited by the Abbott Government is more about a lack of revenue rather than a blowout in spending. This in turn is a function of the economy growing a little below trend with very low inflation. This lower growth is mostly due to the recession in Europe and the US following the GFC.
The budget deficit inherited by the Abbott Government is more about a lack of revenue rather than a blowout in spending. This in turn was a function of the economy growing a little below trend with very low inflation. The AFR editorial does address corporate welfare:
The second force driving the end of the entitlement age is the reshaping of the Australian economy from a protected domestically focused manufacturing base into a supplier of minerals, energy, services, food, and niche manufacturing to Asia. Among rich nations, this makes Australia is uniquely placed to prosper from the rise of China and the rest of Asia. But that is as long as we do not smother the opportunities by trying to hang onto the past, such as by handing out billions of dollars to prop up an uncompetitive and sub-scale car industry. While the dollar amount is relatively small, refusing $25 million to fruit canner SPC Ardmona is similarly important because it sends a signal to the rest of business that the age of corporate entitlement, as well as social entitlement, is over.
No mention of the subsidies to Big Mining or the fossil fuel energy companies. The later, surely are hanging onto the past.
The reason for the elision is not hard to spot. It's not corporate welfare that is the core issue for Big Business--it is the power of the unions. The AFR continues:
That signal extends to the linkage to Australia’s traditional industrial relations system, based on the defining assumption that the state should intervene to set a “fair” wage. The assumed entitlement of labour, divorced from its contribution to profit, was then attached to the corporate entitlement to protection from foreign competition.These linked entitlements of the welfare state, corporate protection and the “fair” wage are exhausted.
Well not really. Corporate protection is not to be taken seriously. The Big Miners, forestry, private health funds, the fossil fuel industry etc are not expected to be self-reliant. The subsidies for them are really out of bounds. So not everything is on the table. The Canberra Press Gallery turns a blind eye.
The politics? Well, the nation’s workers have to tighten their belts Less pay, worse working conditions, less welfare) and the Abbott government, unlike that of Hawke and Keating, is not going to give them anything in return.