Comment by Steve Painter
Anyone in doubt as to what Australia might look like under a Hewson government need search no further than New Zealand and Britain. There is little that's new in the Liberals' Fightback package. It is mostly borrowed from conservative parties internationally.
Most Australians will be a lot worse off if the Coalition wins the March 13 elections. Fightback is designed mainly to redirect wealth from wage and salary earners to business. What's more, most of this redirected wealth will go to big business, not the small businesses that Hewson's campaign advertisements focus on.
Perhaps the oddest thing about Fightback is that it is based on policies already discarded internationally. State of the art for conservatives a decade ago, Thatcherism and Reaganism are now so much political junk in their countries of origin, Britain and the USA.
In Britain and New Zealand, policies similar to Fightback helped to produce economic stagnation far deeper than Australia's. New Zealand presently has an officially admitted jobless rate of 25%, 15% of whom are classed as discouraged work seekers and therefore not officially "unemployed". The real jobless-unemployed rate is doubtless even higher than the official figures.
Britain has its highest numbers of unemployed people in 100 years, around 4 million. Although the official figure is 3 million, hidden unemployment and underemployment push it much higher. Around 12 million Britons now live below the poverty line.
Socially, there can be no doubt that Fightback-type policies have failed in New Zealand, Britain and elsewhere. Why, then, is Hewson so determined to press on?
The main reason is redirection of wealth, and the GST is one of the main tools the Liberals will use to bring this about. The main point of taxes like the GST is to shift taxation from business to consumers.
The GST substitutes one of the least fair methods of taxation for relatively fairer existing methods. Everyone from the pensioner buying new winter blankets to the millionaire picking up a new yacht will pay the 15% GST equally. There is no provision for differences in ability to pay.
Even allowing for the Liberals' claims that the GST will be balanced by the abolition of some other taxes, it will cause a rise in the cost of living. Just to take one example, local government rates and charges will have to rise sharply, as councils will pay the GST while they are exempted from most of the taxes the Liberals plan to abolish.
Alderman Les Langford, a former mayor of the conservative rural city of Albury, estimates that the GST will add about $3 million to the city's annual bill of around $20 million for everything from stationery to blue metal for road building. This would add up to around $200 for each ratepayer, not counting extra charges of around $50 due to the GST on garbage, water, sewerage and other services.
Langford said the council would have to choose between a massive increase in rates or staff lay-offs and cuts to child-care, libraries and other services. In a city such as Albury, the job prospects of laid-off council staff will not be good.
A similar process would occur at state level, with heavy cuts to public health, housing and other services. Cuts in services will be one of the hidden costs of the GST to us all. Relatively cheap and efficient government services will be replaced by more expensive private services, or not replaced at all.
The Liberals' health policy will also hit the living standards of most Australians, forcing many more into expensive private health insurance at a cost of around $10 weekly for single people and $22 for families. By slashing Medicare and funding to public hospitals, the Liberals would eliminate the main mechanisms establishing a ceiling price for medical services. Fees for a visit to the doctor would probably rise from the present $23.50 closer to the $31 recommended by the Australian Medical Association, but charged by only 3% of GPs at present.
The Liberals' strategy hangs on increasing the cost of living for most of us across a wide range of daily needs while at the same time pegging our incomes, largely through harsh industrial policies.
Industrial awards would be abolished, eliminating any legal obligation on employers to honour previously established agreements. While this might not immediately affect well-organised workers in areas with high rates of profit, the lowest paid would come under heavy pressure to accept even lower wages.
As a result of the Liberals' industrial policy, pay would be cut, working hours would increase and safety standards and job conditions would decline. To limit any response to this, the
Liberals are planning heavy new penalties on unionists and unions. By placing industrial matters under antiquated common law, Liberal policy would expose workers to criminal charges for taking industrial action or otherwise breaking workplace contracts.
Far from creating jobs, international experience suggests the Liberal strategy would destroy jobs. The plan to sell Telecom, for example, would greatly accelerate job losses in an area already hit by technological change. New Zealand Telecom has announced plans to shed 11,000 jobs since privatisation less than two years ago. Privatisation of Australian Telecom would result in even more job losses.
Another notable feature of Fightback-type policies in Britain and New Zealand is their impact on small business. Far from booming as Hewson suggests, small businesses have been crashing in record numbers. Around 75 a day are going to the wall in Britain at the moment.
All this might suggest there are excellent reasons for voting Labor on March 13, and it's true the election of a Labor government is the best result most of us can hope for. But that need not just mean voting Labor.
The clearest thing about this election is the fact that neither major party has a strategy to ensure economic security for most of us in what is, after all, a resource-rich country. Labor appears to be heading for defeat, mainly because in a decade of rule it has failed to deliver any measure of fairness in the distribution of wealth.
In fact, extremes of wealth and poverty have increased dramatically under Labor, and the best that can be said for Labor is that things would have been worse under the Liberals. "We won't be as bad as them" — that has long been the best Labor could manage in terms of a rallying cry.
But even that's not the whole story. The fact is, Labor has spent the past decade preparing the way for the Liberals. It has cut our wages by more than 20%, it has taken from the poor and given to the rich, it has weakened the union movement and even destroyed individual unions — in short it has done most of the things the Liberals want to do, only a little less.
People who don't follow politics closely might be forgiven for thinking that, since Labor says its wage cuts are good for the country, the Liberals' much bigger cuts must be much better, or that if we're better off without the BLF the Liberals might be telling the truth when they say we'd be better off without all unions.
In the end, Labor is heading for defeat because it has failed us all. A halfway version of economic rationalism has not saved us from the fully grown beast; it has only prepared the way for it.
Can anything be salvaged from this disaster? It has long been clear that we need a genuine alternative to the Liberal-Labor trap. Unfortunately, we've made very little progress towards building such an alternative during the Labor decade.
In this election, the only pinpricks of light come from alternative candidates including the Greens, Democratic Socialists, Rainbow Alliance, perhaps the Democrats, and a few others. Thanks to the preferential system, it's possible to vote for these without jeopardising whatever faint chance remains of electing a Labor government.
But the real challenge is after the elections. Will the scattered elements that could offer a real alternative finally put aside secondary issues and get down seriously to the task of creating the sort of unity in diversity that could give us a real choice in future elections? Even more importantly, will they set about building political movements that can challenge the powerful forces that control both major parties, and which make Australian elections the farce they have so obviously become?