John Menadue’s comments launching More Than Luck: Ideas Australia needs now

I could rest my case by saying that after the last federal election, it is more obvious than ever before that we need more than luck. We need good policies.  Perhaps the deal on the NBN is a harbinger of better things to come!

Ross Gittins described the failure of the government as ‘a lack of values, a lack of courage and a lack of skill in managing its relations with the electorate’. I can’t recall two successive Labor Prime Ministers who have been so little interested in policy.

The coalition treated the electorate as fools with its negativity and hate-filled prejudice ‘reduce the spending, cut the deficit, no new taxes and stop the boats’. They have adopted the US Tea Party rhetoric – say no to everything and wreck as much as you can.

So much of the campaign was about ‘what is in it for me’. As Tony Judt put it recently, ‘we now seem unwilling to ask hard questions. Is what the parties offering good, is it fair, is it just, is it right? Will it bring about a better society and world?’

The media joined in what seemed almost a death-wish by the major parties, by refusing to ask hard questions, personalising and trivialising the campaign and journalists interviewing each other. The Australian moves from one shrill anti-government campaign to another.

Despite the clear collapse of markets in the global financial crisis, reform parties that used to espouse strong government and intervention in markets, are losing ground. Reform governments seem unable to win the argument.

‘More than luck’ by CPD contributes to getting policy debate back on track.

There are numerous big ticket issues which ‘more than luck’ addresses, and others which must dominate our public discussion

  • We have a two or three speed economy. If Chinese control was de jure rather than de facto, we might at least get good infrastructure! We have a booming mining sector that employs only 1.6% of our workforce. Its dramatic expansion resulting in appreciation of the exchange rate and the bidding of financial resources and labour from other sectors is causing serious imbalance in other sectors particularly farming, manufacturing, tourism and education, which employ vastly more people. The mining sector is forcing up interest rates. More than a mining tax is necessary to correct these imbalances. Despite the clear short-term gains, we are storing up long-term pain for future generations. How can we slow down our mining sector to ensure more balanced development and prevent the stresses and volatility that is a feature of the mining sector? We face an Australian version of the ‘Dutch disease’.
  • We continue to export our raw materials in large amounts with little attempt to ensure greater value adding. Are we prepared to see our iron ore, coal, uranium and gas shipped overseas for others to process and enjoy the benefits of value-adding. Ian McAuley has pointed out in ‘More than Luck’ that if we compare exports as a percentage of imports in high technology sectors, we are only slightly ahead of Turkey and Greece.
  • We have private affluence in opulent and excessive housing, consumer-durables and car usage, but public squalor in urban infrastructure, particularly in transport.
  • We have large and crippling private debt with the Harvey Normans of this world offering us more and more credit. But the public sector is crippled by our obsession with low public debt which is all too obvious in the undeveloped infrastructure in our cities – our schools and our hospitals.
  • Probably the most dangerous erosion of our public capital is in trust, which is so essential for a stable and cohesive society. Growing inequities highlighted particularly in the insatiable greed of senior executives, undermines public confidence and trust in a fair society.

In addressing these and other major issues, we are confronted by the special interests, with their lobbyists who corrupt our public discussion on policy. Journalists are just under-resourced to examine policy whether it is good or bad.

  • There are over 900 full time lobbyists in Canberra – or 34 for every cabinet minister. The community is ignored as these lobbyists press for special privileges for their powerful clients.
  • A survey by the Australian Centre for Independent Journalism at UTS revealed that 55% of all news content in the ten major Australian metropolitan dailies was PR driven. 24% of published content had little or no journalistic input at all.
  • Our major polluters secured delays and promised generous compensation in the aborted CPRS.
  • For a $100 m advertising campaign, three foreign-owned mining companies secured tax concessions from the Australian government worth over $7 b.
  • We see the lobbyists at work again with the attempt to undermine a long-delayed rescue of the Murray-Darling Basin.
  • In health, the AMA continues to successfully defend the worst work practices in Australia. The inefficient private health insurance funds pay lobbyists and PR firms to defend their $5 b corporate welfare from the Australian government, whilst pressing each year for higher premiums.

But the real elephant in the room is our failure to discuss the appropriate role of markets and governments. For the dominant liberal market ideology, it seems that the global financial crisis and market failure never happened, even after Chairman Greenspan admitted to the US Congress that his world view, his ideology was not working. The blinkered ideologies in the financial and business commentariat, with some notable exceptions, remind me of the communist fellow travellers of the 1960s and 1970s, who were so ideologically driven they refused to acknowledge the corrupt and brutal policies of communist governments. These liberal market ideologues today are more concerned to advantage capital than ensure effective operations of markets in the national interest. So today the apologists on the ideological right continue to keep their spirits and ideologies burnished, despite the clear evidence of market failure and the need for public action such as in response to the GFC. The rating agencies are still in business, but the ideologues say nothing. Some market failures are glaringly obvious.

  • A failure to price ‘externalities’ which would ensure better market outcomes – prices on carbon pollution, congestion and water.
  • Lack of market competition in some of our largest sectors, particularly banks, mining companies and supermarkets.
  • Rigged markets for executive salaries.

It is noteworthy that the deregulation of markets has run in parallel with increased regulation and surveillance of the community which sees our political and personal freedoms eroded.

Australia has shown in the past that governments can make hard but necessary decisions and explain them successfully to the community. This country is far better than what it was when I was a boy in the country towns of South Australia. We can be optimistic that we can do things better despite the last election and the performance of our major parties and the media since then. What is the best way to take advantage of markets whilst ensuring that the public interest is protected through good public policy? As my father often said to me ‘son, stop complaining and do something about it’.