23 November 2007

Australian Federal Election: John Howard's track record examined

US readers please note: In Australian politics the 'Liberal' Party are actually centre-right, the equivalent of the UK Conservatives. Go figure!

The long-suffering Australian public, weary of election propaganda, are always granted a few days advertising silence before a Federal election. I’m sure that doesn’t bother the major parties much, as meaningful debate has long-hence descended into the battle of the soundbite, and reductio ad absurdum underlies the core messages on all fronts. I’ve never understood why our politicians, particularly on the Liberal benches, are so convinced that the Australian public are stupid, but their belief is certainly borne out by the Vox Pop at an Adelaide McDonalds this morning:

Bloke 1: Howard’s the best Prime Minister Australia’s ever had.
Bloke 2: Huh?
Bloke 1: I mean, the Labour parties just about unions and shit
Bloke 2: Huh?

Bloke 1 has certainly been paying attention to first core message of the Liberal Party—Unions are bad, and anything associated with them is bad. It’s a simple message which has garnered considerable sympathy for decades. Problem is, it’s such simple-minded nonsense. Unions and almost all those associated with them should be able to stand up proudly in public and defend a magnificent history of standing up for the rights of workers. Like all large organisations, unions occasionally suffer from bureaucracy and corruption, but to suggest that is the norm and the average Australian should be frightened is just a ridiculous and contemptible notion.

The Liberal Party’s other core message is that they have a strong track record on economic management, so why change? This argument would appear to have some merit, if one believed that governments really have that much influence over the economy. But they simply do not. The global economy and market factors have little or anything to do with a national government’s policies, which are nearly always responsive. And interest rates are controlled by the Reserve Bank of Australia, not the government of the day. So the economy is basically a moot issue—there’s almost no credit at all to the government, and the Labour Party’s attacks on interest rate hikes are equally ill-directed, except in their criticism of Prime Minister Howard’s promises. Clearly Howard should not have promised that there would be no such increases as it’s completely out of his control.

And while we’re talking about track records, let’s look at factors outside of the economy—the Tampa affair, weapons of mass destruction in Iraq, treatment of refugees, climate change, the list goes on. Economy be damned—these are the important issues that shape our world and define Australia’s place in it. On these issues the Liberal government has been consistent—consistent in its shameful avoidance of truth and compassion and its grovelling to the pathetic neocon agenda of the current US administration. It’s an approach that has endangered Australian troops in an illegal and ill-thought war, has made Australian civilians targets of terrorism, has ill-equipped us to deal with the environmental issues that are critical to our very survival and has led to a general reduction in the respect Australia receives on the world stage, at least outside the US.

It’s a great track record, John. Thanks for reminding us of it, and making Saturday’s decision even easier. All the best in your retirement, and I hope you get a nice cushy diplomatic posting. I hear Afghanistan and Iraq may be available.
Go to eebahgum!


fearmonger said...

Regarding trade unions, there is no doubt that many unions in Australia have a history of thuggishness and bullying that ought to alarm people. Having said that, it is true that many unionists don't fit those stereotypes and nowadays the union movement tends to be dominated by white-collar public sector unions anyway.

Nonetheless the union dominance of Labor is still a major liability in terms of Labor's economic credibility. Whenever trade unions have significant power they nearly always harm the economy. This is because unions restrict the labour supply, oppose performance pay for different workers in the same industry or workplace, demand protection for union-dominated inefficient industries, oppose skilled migrants etc. All these measures impede economic growth, even if they help unionised insiders.

At the moment Australia has growing labour shortages due to ongoing econmic growth. Under those circumstances there is a real danger that excessive wage demands could increase inflation and damage the economy. Therefore the government campaign about the risks of union power are actually based more on economic reality than the Labor/union claims about bosses screwing down wages and conditions.

On interest rates, it is true that the Reserve bank sets rates (but within an inflation target agreed with government). If Labor get in they are promising to change the IR laws to give more power back to workers relative to business, but they are also claiming that there would not be any more wage pressures on inflation and interest rates. It is obvious that these positions are contradictory. Labor are promising a wage push at the same time as promising not to have a wage push. Kevin Rudd, in addition to speaking mandarin, can also speak spin through both corners of his mouth. A remarkable talent.

This is the mindless message I have absorbed in this campaign.

eebahgum! said...

Thanks for your comments, FM. I agree that there was a period in (not so distant) Australian history where several of the trade unions had a reputation for thuggery, but that's a thing of the past.

I think the ALP has moved away from the union domination that used to drive it. Whilst union views still have some influence (they are after all the Australian *Labour* Party), I don't think the term 'dominance' is applicable any longer, and that a reasonable balance has now been achieved. We can reasonably expect a bit of union posturing when the ALP take government, but Rudd has already sent some clear messages with regard to union excesses, and it's been "back in your box".

As for the rollback of IR laws, I don't think that this will put any significant pressure on inflation, as in practical terms the difference between Work Choices and other IR legislation is minimal for most workers. It's the principal of the thing as much as anything. I can't see that there will be any significant wage pressure across the board.

I am interested in your phrase "give more power back to workers relative to business" as it implies a contradiction between the two 'causes'. To me this is a false dichotomy. Empowered workers lead to successful businesses, and workers and employers have a mutual shared interest, at least in well-run firms. The sooner employer groups and unions understand this, the better off we will be, but in a sense it is in the (short-term) interests of both groups to perpetuate this unhelpful dichotomy to maintain their sense of identity.

fearmonger said...

Eebahgum, you seem to be hedging your bets slightly. First you claim that unions are generally a force for good. Then you say that even if unions are not really good they don't really have much influence anyway.

Regarding Rudd's claim that he will stand up to the unions, I think he deserves an oscar nomination for good acting. As we've been constantly reminded 70% of Rudd's front bench are former union officials. Over the past two years the ACTU has devoted an unprecedented amount of resources into bringing down the Howard government. Indeed it is hard to think of another time when an interest group has devoted as much to securing a political result. If the business community put the same resources into electing the Liberals I doubt anyone would take seriously claims that the Liberals will stand up to business. It beggars belief to think that a Labor government will not be heavily indebted to the unions. Just ask some of the disendorsed Labor MPs who have lost their preselections to union candidates (like the member for Corio). Former Labor MP Brian Courtice also says it has been a naked power grab by the unions.

On the question of the power balance between workers and business I agree that they shouldn't be seen to be in conflict. But this is precisely why business must make a profit in order for workers to keep their jobs. Historically whenever wages have risen too sharply it has driven people out of business and the economy into recession (such as in the early 1980s). The unpalatable truth is that whenever business profits rise more than wages it is better for the economy, simply because business is more likely to reinvest the money rather than spend it (thereby containing inflation and maintaining longer term growth). Also given that far more people have money invested in superannuation or shares there are more people who have a direct interest in corporate profits. This will become more important as the population ages and there are more retirees receiving investment income compared with working-age wage earners.

stephen clark said...

The whole scaremongering about unions is just that. Surely it makes sense for workers to organise, just as it makes sense for management to do likewise.
It is not good for one part of a bargaining couplet to be weak, and the trouble with assuming that workers can bargain equally with those who pay them is that it is very unbalanced. At the very least some individuals are too fearful to stand up for themselves.
So to my mind anything that can be done to make such exchanges, robust is probably for the good of all.
There are plenty of thugs on the management side too...one mentions the names of Corrigan, Reith et al. One also remembers the expose on 4 Corners with regard to management exploitation at Telstra earlier this year {I declare here a bias of having had a family member who was much involved with Telstra...she received no support from Telstra HR, but phenomenal union support' without which she would have been treated as a doormat.

eebahgum! said...

Thanks for your comments, Stephen.

Fearmonger, I don't believe I am hedging my bets. Firstly, let me say that you have completely failed to engage with my key point, which is that despite all the talk about the economy, there are far more important issues at stake, and the Liberal's track record in many of the key arrears is utterly shameful and should be a cause of embarrassment to all thinking, caring Australians.

I haven't said that I don't think unions have much influence, just that they don't have the overbearing influence on the ALP that you are suggesting. Also, I have suggested that Work Choices, though questionable at many levels, is not quite as damaging to as many workers as the ALP would have us believe, so getting rid of it won't be an inflationary trigger. In fact, I really don't buy your arguments about wage increases at all. Surely no-one really believes that there is that much fiscal difference between the two major parties any more, and the centrality of global factors on interest rates is widely understood.

Time will tell, of course, but I for one am buoyed, not scared of the future under the new regime, because it offers some small hope on the real issues that I was trying to raise in my original post.

Thanks to all for engaging in this interesting discussion. Eebahgum!