Where is the alternative? The Tasmanian Greens join the deficit hawks

by · July 11, 2011

Nick McKim faces protests over school closures

Political debate in Australia seems firmly hinged on a cognitive dissonance over questions about the economy. Setting aside the ever-present obsession of discussing economic questions as if they are somehow separate to political ones, we have a federal government simultaneously arguing the economy is strong and we are doing better than ever and that we need to accept an ‘age of austerity’ after wasteful spending and a lack of government planning. What we need, we’re told, is another round of ‘reform’ where public services are pared back, ‘overgenerous’ benefits to the disabled removed and hard work cemented as the organising principle of society.

This is a long way from former Prime Minister Rudd’s glory days where he damned ‘market fundamentalism’, and Labor members and voters were energised in the wake of the Kevin07 election. Workers would be given their workplace rights back, asylum seekers would be treated with dignity, and the welfare state would return after a long ‘retreat’.

While Rudd’s promises were a mirage he was not willing or able to deliver on, disappointing the electorate and sending his approval rating spiralling, the scuttling of a progressive economic and industrial agenda was swift by any estimation and the return to a focus on ‘waste’ and personal responsibility stark. Even the confused and bizarre ranting of Ben Keneally and Kristina Keneally in The Australian acknowledges that a return to managerial speak will fail to win over an electorate dismayed at successive state and federal Labor governments forsaking their core voters. Their call for a new ‘light on the hill’ notes they ‘must abandon the soulless language of “reform” and restate [their] commitment to [the] primary objective of improving the standards of living of working people’.  

Gillard sounds so similar to Howard on economic matters we have the weird situation where Labor is often accused of stealing Liberal policies, and on questions such as the carbon price the Liberals are accused of no longer supporting market-based approaches they once vehemently prosecuted. Even on social questions, supposedly the area where there is most distinction, the long awaited end to mandatory detention of asylum seeker children has not come to pass and mostly it’s difficult to know from precisely which direction the dog whistling is coming.

On this backdrop, and despite innumerable declarations that their vote was capped and they were a fringe party, we have seen the rise of the Greens. The Greens now have more federal, state and local elected members than ever, their vote has gone up at each and every federal and state election in recent times, and their party membership has passed the 10,000 mark at a time when the ALP’s membership has been plummeting.

It is the Greens, we are told, who are the real alternative to the tired, cynical politics of Labor and Liberal. But the Greens are also facing some difficult times. Despite the rosy public outlook, real tensions are emerging on a range of economic, social and political questions. This article will ague that key amongst these is the failure of the Greens to break with economic rationalism, resulting in a political practice that is amorphous and on the question of balanced budgets and austerity measures runs counter to many of its supporters’ and members’ wishes.

Economic ‘reform’ in Tasmania and New South Wales

Some weeks ago the Tasmanian Government introduced its 2011 Budget. Warnings it would be ‘tough’ proved true, with its key ‘reforms’ savage spending cuts to the public sector and an effective wage cut for government employees. Some of the key decisions taken by the ALP-Greens coalition were:

    • Overall spending cuts of 10 percent in real terms over the next four years
    • $150 million cut from health including frontline services
    • 1,700 full time public sector jobs cut (7 percent of the public sector total)
    • Increase in water costs by 10 percent in the following year
    • Increased rents for tenants of public housing tenants
    • $190 million cut from public education and the closure of 20 public schools (from which they have backed down, but more on that later)

Following in the footsteps of Barry O’Farrell in NSW, Tasmanian Premier Lara Giddings announced wage rises for public sector workers in Tasmania would be limited to 2 percent per year, plus 0.5 percent available in return for ‘productivity gains’. The NSW Liberal government imposed the slightly more ‘lenient’ cap of 2.5 percent, plus up to 1.5 percent for employee-related savings, along with a raft of other industrial ‘reforms’.

With living costs for working people continuing to increase, and the year-over-year inflation rate at the end of the March 2011 quarter at 3.3 percent, there is clearly a strategy in both states to force real wage cuts for government employees. Discussion has been of ‘financial responsibility’ and how ordinary people will have to ‘do it tough’ to ensure the viability of both states’ economies.

There is also a key difference in Tasmania and NSW in relation to the cuts — in one state the Greens have helped design them, and in the other they are at the forefront of the campaign to stop them.

Despite arguing they are different to other political parties, the Tasmanian Greens are beginning to look remarkably similar to Labor and Liberal on key economic questions and their commitment to neoliberal-style economic principles. The difficulty in differentiating their leader and Education Minister Nick McKim from other politicians has come as a real shock to many Greens supporters and is well evidenced by the outrage on his Facebook page at the announcement of school closures.

As McKim spun the schools announcement: ‘I know that the potential closure of schools will come as a shock, but I can assure everyone that this is a crucial part of renewing Tasmania’s education system’. In the wake of community outrage, McKim and Giddings announced a backdown on the closures. There is now a moratorium on closures until at least the end of 2012, but cuts will be found from other sections of the Education Department budget. This, of course, means job and program cuts.

Strangely, McKim seemed gripped with the idea that the cuts would be different to others in the neoliberal era based on his desire to deliver real consultation. As he argued in his press release: ‘It will be a genuine consultation during which I will meet face-to-face with all potentially affected school associations’. That being a month of consultation where schools were to prove they should not be shut down, and which largely saw small towns and local areas decry how the closure of their school would rip and the local social fabric. But even with a ‘better’ consultation, how would the result have been any different? It was impending protest and industrial action that got results for school communities, not McKim’s consultation process.

Giddings has claimed that the ageing population in Tasmania has meant the state ‘loses’ a school’s worth of children a year. However, this is only a problem if you start from the belief that schools are currently well funded, with appropriate class sizes and well-integrated resources such as those for students with additional learning needs. In an environment where this is not the case, school closures perpetuate the current unacceptable resource allocation. And budget cuts instead of closures will simply mean declining support for teacher training and desperately needed integration and support services (around language and learning).

The Tasmanian Greens have merely demonstrated they are as committed as the major parties to attacking the public services, and to pulling out the same neoliberal excuses for doing so. It’s hard to argue they don’t deserve the same treatment as their Irish counterparts.

By contrast, the approach in NSW demonstrates that there is an alternative to toeing the line and posing an alternative to neoliberal economic management models. The growing dissent to Barry O’Farrell’s public service wage cuts and the attacks on independent arbitration and the right to bargain, was termed #NSWisconsin on Twitter in the early days of the campaign. Greens members rallied around their parliamentary representatives who engaged in a filibuster aimed at giving breathing space to union members and their organisation who were caught off guard by the announcements.

David Shoebridge spoke in the second reading decision for 5 hours and 58 minutes, followed by John Kaye for 5 hours and 53 minutes, outlining the regressive nature of O’Farrell’s bill. While in those many hours both covered important political aspects of the legislation, and highlighted its foundation in a neoliberal approach to ‘managing’ the state, they were also conscious that legislation does not live or die in parliaments but in communities where the impact of cuts are felt. While community opposition to the cuts in NSW is growing, such opposition has already been felt very bluntly by McKim and the Tasmanian Greens who seemed blind to the fact that dissent was inevitable.

Do we ‘need’ an age of austerity?

The claim that we have two bankrupted, or almost bankrupted states, does not hold up to scrutiny and Left Flank believes that the cuts, in both states, are not ‘necessary’ economic decisions taken in the interests of all citizens, but the reinvigoration of neoliberal policies that have been in operation in Australia for some time.

As the planned cuts have been announced, it is clear the media and politicians (on both sides) are little interested in seriously discussing whether such cuts are necessary. Left Flank would argue there are six related points to consider as to whether the austerity cuts are needed and whether some states are ‘going broke’. 

First, the term ‘bankruptcy’ is ludicrous when we look at Australian federal and state governments. Australia has one of the lowest public sector deficits (and as a percentage of GDP) of the OECD nations. It is much lower now than it has been at many times in the last 60 years (see graph below). If one wants to worry about debt, it’s the private sector debt that should cause concern, yet which mainstream politician is campaigning to reduce it?

Second, why does a state budget need to be balanced in a period of shallow growth, which is what Australia is going through? Most past deficits were paid back not by raising taxes but by an increased taxation take and a decreased welfare bill when the economy recovered and unemployment fell. This is just neoliberal dogma designed to slash services to ordinary people.

Third, Tasmania has profitable industries and rich people, so why can’t they be taxed more? The general trend of Australian taxation at state and federal levels for the last 30 years has been a decrease in tax rates, but mainly for those who can most afford to pay. Why not increase the corporate tax rate from the current 30 percent to the 49 percent it was in 1986?

Fourth, the COAG deals the states sign up to do crimp revenue for state governments. So why have they repeatedly rolled over and let Canberra get its way? Now that we have Liberal governments in some states, ironically enough, we see some Premiers with backbone to raise such issues. State leaders could gain great traction demanding Canberra tax big business and the rich harder so that state services could be protected, but that is hardly the Liberal way even when key services such as child welfare face a manufactured budget crisis as governments cut their funding.

Fifth, public investment also creates wealth. If state governments borrowed and invested in infrastructure projects themselves (e.g. around serious climate action) they could actually make profits on-selling to business. When conservative state politicians argue that the Gillard government can’t be serious about climate change as it is unwilling to invest massively in public transport infrastructure, as Pru Goward did on ABC 702 in Sydney a few weeks ago, there is a large measure of truth, but the NSW government is doing nothing of the sort itself.  

Lastly, the ALP in particular remains fearful of being labelled ‘bad economic managers’ by the Liberal Party as it was at the end of the Hawke/Keating era after ‘the recession we had to have’. In the world of politics, though, facts are not as important as political spin and it is largely hyperbole that rules the day so rather than defending funding of public services, or the significant and important work public servants do, or their own economic record, the ALP wants to be on the front foot to paint a picture of themselves as aggressively lean economic managers and tough on ‘waste’ and the ‘lazy’.

With the failure of neoliberalism to deliver global or national prosperity (with the gap between the wealthy and poor growing in both spheres), and after a period of extensive privatisation of the social wage (through health and low cost housing), the community is less willing to believe the spin that such cuts are necessary and of wider community benefit.

I have only touched here on the surface differences in approach to economic issues between NSW and Tasmania in relation to recent announcements, but these of course have a deeper origin in the nature of the respective parties and their development in particular local circumstances. Despite the desire of the mainstream media to paint the Greens as at war between NSW and Tasmania, often even further simplified in the ‘Bob v Lee’ hysteria in The Australian, these differences arise from the longer-term historical trajectory of the party and of progressive movements more generally in Australia. This will be the topic of a second post on this topic that looks at the unified amorphous diversity that is the Greens.

Filed under: age of austerity, ALP, Greens, NSW