‘Social laboratory of the world’ or ‘reform sclerosis’ – the choice is ours: Part 2

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Last week, in Part 1, we questioned why modern Australia had stopped investing in its future. We identified four reasons: short-termism, divided responsibility, risk-aversion and a lack of trust in politicians. We addressed the first two and provided some responses to them. This week we consider the final two.

Risk and Uncertainty

Liberalisation of social and economic relations in the last quarter of the twentieth century has exposed Australians to new risks and uncertainties in their personal and working lives.

For some, this is a long overdue liberation: women, gays, ethnic groups who previously felt oppressed and exploited can feel some greater empowerment. Others, however, have disliked change and have problems accommodating the options.

Thanks to Bill Leak at The Australian

The surge of support for the One Nation party was arguably a response to rapid change and a product of ‘reform fatigue’. Some writers speak of a deeper anomie with the ascendency of individualist and humanist values, and reflected, among other things, in the rapid growth of evangelical Christianity.

In the labour market, a growing incidence of self-employment, part-time and casual work is evident. Of eighteen developed economies with comparable data, Australia is ranked as follows: first on the proportion of temporary employment; second on the proportion of part-time employment; second on the proportion of part-time workers who would prefer full-time employment; fourth last on indices of employment protection legislation; and last on the median and mean duration of employment. Full-time working hours have risen and are the second longest in the OECD.

Again, for some this is liberating and a source of fulfillment, while for others it is another source of anxiety and stress. Certainly, getting the work/family/life balance right has been elusive – as reflected in indicators ranging from the incidence of depression through to the fertility rate. The new social science of ‘happiness studies’ is grappling with the claim that liberality and affluence have not led to unambiguous increases in happiness, along with deeper issues of what does produce happiness.

Social safety nets are in place but there is fear that these may be wound back severely as pressure on government budgets increases, including through demographic ageing. Australia has a more economical welfare state than in Europe due to its means-tested, flat rate systems of support, but growing numbers on disability support and single parent payments in Australia are a focus for debate here already and require new initiatives.

Solutions to Mitigate Risk and Uncertainty

In a more uncertain world there is the danger that a government already overloaded with demands for support will begin to retreat from providing security. Many European countries are now reducing the generosity of their welfare systems. In the United States, which saw the time limiting of welfare in the mid-1990s, further reductions in social insurance are already envisaged.

US economist Paul Krugman has denounced what he sees as the continued erosion of protection that government provides against personal misfortune, even as ordinary families face ever-growing economic insecurity.

In Australia, the notion of ‘mutual responsibility’ has strong resonance with taxpayers. Few things are more unpopular in Australia than unconditional aid in welfare (though it is less well understood by governments and lobbies that this applies as much to business welfare as it does to personal support).

One possible variation on passive welfare that promises a new way forward here for individuals and firms alike is the income-contingent loan. Invented in Australia as the Higher Education Contribution Scheme, income-contingent loans involve the government acting as banker – rather than its usual position as taxer, spender and regulator. But it does so only where individuals do not have access to normal credit markets, and where there is both a private and social benefit.

The notion of income contingent loans can spread readily beyond university funding to community development, assistance to elite athletes, innovation by small business start-ups to drought assistance and support for ex-prisoners.

Conditionality would apply, meaning support would be for productive investment that has a reasonable probability of pay-off, and repayment would be related to income or revenue (and interest) and it would be set to cover costs, so paying the taxpayer back. We propose that Australia establish a new Australian Development Fund to manage such schemes.

Distrust

Australians do not feel well-disposed towards their politicians.

In part, politicians have contributed to this outcome. They have themselves abused the trust that Australians had in key institutions such as the civil service, military, judiciary and universities.

Ill-motivated sackings of senior public servants upon taking office, encouragement of irresponsible vendettas against judges, disciplining of senior police for speaking frankly, appointing political mates to sinecures, allocating funds by electoral “whiteboards” and self-indulgence in ‘culture wars’ are all contributing to cynicism in an increasingly educated electorate.

And the sins are at all levels of Government and across all parties.

With the party machines, change is needed too. The proportion of the population who are members of a political party has dropped from 3 per cent in the 1960s to around 1? per cent today – despite the occasional branch-stacking. As Liberal politician Chris Puplick once wrote, the risk is that the only ones left in our political parties are ‘the mad, the lonely and the ambitious’.

As parties fade into irrelevance, the business of candidate selection is increasingly being taken over by head offices and powerbrokers. The process of selecting members of parliament – and sometimes even members of the frontbench – is too important to be decided by party apparatchiks and factional warlords.

Another factor that erodes trust in politicians is question time. For ordinary voters, it is the main window into how politicians behave on the job – and many are appalled.

Solutions to Restore Trust in Politicians

A reasonable cause for distrust by Australian voters today is the limited say they have in choosing their parliamentary representatives. Two-thirds of Australians live in ‘safe’ seats – seats where the winner has a margin of 6 per cent or more. For these voters, the real choice is not between the Labor Party and the Coalition, but which individual will represent the dominant party at the poll.

Yet the task of preselecting party candidates is typically performed by party committees comprising representatives from the local area and administrators from the central party office. In most cases, this means that a few hundred people – invariably less than 1 per cent of the electorate – are involved in choosing the candidate.

Under the current system, candidates are too often preselected as a reward for loyal party service, rather than because they are the best person for the job. Today’s preselection system also discourages many talented individuals from underrepresented groups in our community – including women, Indigenous Australians and migrants – from seeking elected office.

In Imagining Australia: Ideas for Our Future, Macgregor Duncan, Andrew Leigh, David Madden and Peter Tynan propose making the process of choosing political candidates more democratic by adopting a system of open primary preselections, in which voters need only register as party supporters in order to vote in a preselection.

Such preselections, perhaps administered by the Australian Electoral Commission, would significantly invigorate the candidate preselection processes from the current system – in which new members of parliament are effectively chosen by unrepresentative factional cabals.

A more competitive and transparent process would raise the quality of candidates, as well as boosting public participation in the political process. While less than 1 per cent of Australians now vote in member-only preselections, open primary preselections in the US attract between 10 and 50 per cent of the electorate.

Another way in which trust in politicians could be improved is through a radical revamping of question time. Several useful procedural reforms have been canvassed in recent years: banning so-called “Dorothy Dixers”, expanding the use of follow-up questions, and restricting the ability of Ministers to waffle when answering.

But the most important reform to question time does not require any alteration to the rules, merely a change in behaviour. By reducing the level of personal abuse, ceasing to shout interjections, and creating a sense of decorum in question time, Australian politicians could do much to win back the respect of their voters.

Conclusion

Australia faces two core challenges today. The first is to regain the confidence and the ingenuity that once placed us ahead of other nations in terms of our economic growth, our social policies and our democratic innovations. There is no country better poised for a new era of progress if new and farsighted public leadership can be forthcoming. But reformers must also be persuaders.

The second challenge therefore is to make a persuasive public case for continuing reform. To avoid slipping back into isolationism or sclerosis, Australia needs political leadership which can engage in a clear, honest discussion with the population about economic policy.

The challenge for Australian leaders is not merely to implement bold reforms for the sake of our future, but to bring national sentiment with them. This is the nation building agenda for the future.

Here is a link to the full article that these two pieces are based on.

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