(To hear an audio recording of this lecture from the Melbourne Writers Festival, click here)
Since the late John Button delivered his devastating analysis of his beloved party in his 2002 Quarterly Essay, it is plain in 2010 that the Australian Labor Party never did step up to the challenge of renewing its purpose in Australian national politics. Which way forward indeed for those who dream of a better world?
John Button’s 2002 Quarterly Essay Beyond Belief laid out a devastating analysis of the state of the Australian Labor Party in the new century. It was required reading then, and – there being little evidence that it was ever heeded in the eight years since – is required reading today. Anyone seeking to work out how it has come to this in August 2010 is well advised to return to this essay.
Let me say from the outset I am a Labor outsider. My father and his father before him drove cattle in Cape York Peninsula in the days before our citizenship: the picture of black stock-workers sitting out on the dark woodheap, looking through the kerosene lamp lit windows of the boss’s station house, dining on damper and black tea while the white fellas sit eating their corned beef, potatoes and white sauce, is an enduring metaphor of black rural and remote Australia.
I confess that whilst I have never stood with my nose pressed to the glass of the big house of Federal Labor, I have looked from the fireplace out back with some perhaps untoward and certainly unrequited feelings of desire, but for native Australians that door has never opened from the outside. I was obviously reflecting on my own embarrassed condition when, in my 200x essay for the Griffith Review, I referenced Robert Penn Warren’s machine politics saga based on Louisiana Governor Huey Long, All the King’s Men. Penn Warren’s nailing of the essential condition of that hayseed Willie Stark drove a six-inch bullet head unnervingly close to my own dyslexic heart:
Back in those days the Boss had been blundering and groping his unwitting way toward the discovery of himself, of his great gift, wearing his overalls that bagged down about the seat, or the blue serge suit with the tight, shiny pants, nursing some blind and undefined compulsion within him like fate or a disease.
Nursing some blind and undefined compulsion within him like fate or a disease.
My late father was wont to tell me the purpose of life is to serve God and to serve your fellow man. This injunction too often weighs like a resentful burden on one’s life, for my father never told me that which I will not fail to tell my own son: you have to look after yourself too. Otherwise whatever your gift, disease will surely be your fate.
Having come close to reducing leadership to curse, the corollary of night-dreams of a better world is the hot sunlight of daily reality. Leadership requires dreaming at night and walking by day, and trying to avoid dreaming by day and sleepwalking at night.
I won’t rehearse John Button’s diagnosis of the Labor Party after the 2001 election defeat, but the main themes are the same as those that emerged in the lead-up, conduct and aftermath of this year’s election: a party bereft of purpose and peopled by a decreasingly diverse talent pool of apparatchiks. Whilst this derogatory appellation is commonplace, the American historian James Billington’s definition makes it particularly apposite in the present context: “a man not of grand plans, but of a hundred carefully executed details”.
Less than three years on the Treasury benches, and it has come to this. Whether or not Julia Gillard succeeds in salvaging a government from this wreckage, John Button’s eight years old counsel hovers like Banquo’s ghost over the bloody scene. The failure of the Federal Labor Party to define and to articulate – other than in the most banal terms – its raison detre in national politics, is not good for the cause of those who seek progress in Australia.
Labor’s most compelling claim as to its most essential difference from its conservative Coalition opponents was that it was what the late Kim Beazley Snr called “the party of social attack”.
Whereas both Labor and the Liberal Conservatives might make claims to more or less competent management of the nation’s government – and both might make claims to their commitment to economic reform – it is only Labor that harbours the idea that it is about social change.
Whilst the Liberal Conservatives also wish for a good society, by definition they eschew governmental agendas for social progress. They have a long philosophical heritage that sees social progress as a steady evolution, and large governmental attempts to contrive progress will only result in waste and unintended consequences. The liberal and conservative tradition has a well pedigreed skepticism, and indeed strong objection, to what their opponents once regularly called “social justice”. Today Labor is more sparing in its deployment of these two words: social justice. Whilst social justice is still part of Labor’s intra-mural pieties – a useful rallying cry for the true believers – in front of the nation at large the concept is muted and liturgical.
If Labor was to say what it was about, why could it not simply say that it was about Economic Prosperity and Social Justice? The truth is that it could not. And the problem is not with the notion of Economic Prosperity: plainly, Labor stands for it and everyone is clear on its meaning. It is the Social Justice part of this formula that Labor could not sustain. It could not because the notion of social justice is completely elusive and has for too long remained undefined by those who say they were and are all for it. Both the end state of justice and the means by which that end state is supposed to be achieved, is utterly undefined.
And all attempts to cobble together a definition of what contemporary Labor politicians mean when they deploy the words social justice, would just confirm to their Liberal Conservative opponents that Labor has in mind yet another great socialist project that will end in waste and tears.
How is it that a concept that has travelled with the social democratic project through such a long and storied history, has ended up so equivocal? Why does every attempt at articulation sound like someone either sincerely wanting or insincerely promising, utopia? Kevin Rudd’s great nemesis, the liberal economist Friedrich Hayek once wrote:
I have come to feel strongly that the greatest service I can tender to my fellow men would be that I could make the speakers and writers among them thoroughly ashamed ever again to employ the term “social justice”.
It may be that the high priest of what Rudd called neo-liberalism has finally succeeded in intimidating the social democrats out of their convictions about social justice.
My intention tonight is to suggest that social justice could be a real concept, and could be the concern of a party such as Labor that seeks to actively work to make a better society – if it be properly understood. This proper understanding would however require an abandonment of the great part of the accumulated theology of social democratic thinking around social justice, and would more heed the rational objections of the liberals than the moral enthusiasms of the social democrats.
We will come to the meaning of social justice in due course. Let me at this point dilate on two of my own native thoughts about leadership.
My first point concerns the difference between natural and structural leadership. Structural leadership depends upon formal political, cultural, economic or religious structures for mandate, authority, power and influence. Natural leadership depends on no institutional power or recognition: it is simply the power of human self-determination and the informal recognition of its inspiration and influence over other humans.
There are many more natural leaders than structural leaders in the world and they will be readily found in families, community groups, and in the full range of informal social, cultural, religious settings.
Some structural leaders are also natural leaders, but most natural leaders do not occupy formal structures.
The problem with the parliamentary parties is that they provide pathways to power for structural leaders who may have never exercised natural leadership and may never possess it. They are masters of the structures of power but in the absence of those structures they could not lead men and women. Whilst it is not a problem exclusive to it, it is this preponderance of structural leadership that is a large part of Labor’s problem of parliamentary representation.
My second point concerns the dialectical way in which I conceive leadership and policy. It is important to my argument tonight to explain my dialectical view and what I mean by the radical centre. Let me extract the explanation I laid out in my [year] essay for the Griffith Review:
We are prisoners of our metaphors: by thinking of realism and idealism as opposite ends of a two-dimensional plane, we see leaders inclining to one side or the other. The naive and indignant yaw towards ideals and yet get nowhere, but their souls remain pure. The cold-eyed and impatient pride themselves on their lack of romance and emotional foolishness: pragmatism and a remorseless Kissingeresque grasp of power make winning and survival the prize every time. Those who harbour ideals but who need to work within the parameters of real power (as opposed to simply cloaking lazy capitulation under the easy mantle of righteous impotence) end up splitting the difference somewhere between ideals and reality. This is called compromise. I prefer a pyramid metaphor of leadership, with one side being realism and the other idealism, and the quality of leadership dependent on how closely the two sides are brought together. The apex of leadership is the point where the two sides meet.
The highest ideals on earth are realised when leaders strive to secure them through close attention to reality. Lofty idealism without pragmatism is worthless. What is pragmatism without ideals? At best it is management, but not leadership. It takes insight, skill and creativity, careful calculation as well as bold judgment, prudence as well as risk, perseverance as well as preparedness to alter course, belief as well as humility, and great competence as well as the ability to make good from mistakes to bring ideals closer to reality. One must be hard-headed in order never to let go of ideals. Idealism and realism in leadership do not constitute a zero-sum game. This is not about securing a false compromise. The best leadership occurs at the point of highest tension between ideals and reality. This is the radical centre. If the idealism is weaker than the realism, then optimum leadership cannot be achieved and vice versa. The radical centre is achieved when both are strong.
In my essay I suggested that there were at least ten classic dialectical tensions in human policy: idealism vs realism, rights vs responsibilities, social order vs liberty, individual vs community, efficiency vs equality, structure vs behaviour, opportunity vs choice, unity vs diversity, nature vs man, and peace vs war. But the truth is that dialectics are everywhere: Hegel and Marx were right about the dynamic unfolding of history through the tensions between thesis and antithesis and their resolution in synthesis, and the Confucians who gave us Yin and Yang and their cultural counterparts the world over, were right about the unity of opposites.
My list of so-called classic dialectical tensions laid out only ten of the most prominent tensions that lie at the heart of our greatest and ever-recurring public policy debates. Across all of these issues there are tribes that vehemently hold the policy thesis and there are tribes that hold the policy antithesis: and both sides prosecute their side with a vehemence and conviction about the correctness of their own side and the folly of the other. There is much tug of war in the world. And tragically too little productive synthesis.
The productive synthesis is the radical centre. The radical centre is both an intellectual place and a real place in the dynamic political economy. The radical centre therefore requires intellectual insight and practical political and economic action. Intellectual insight alone is no guarantee that the real circumstances will change accordingly: we can often see what we need to do, but we may not succeed in doing so.
One example of the intellectual identification of the radical centre concerns the dialectic of war vs peace set out by President Barack Obama in his acceptance speech upon receiving the Nobel Prize for Peace last year: only by the preparedness to fight war, can peace be maintained. Many here tonight will not agree but I think Obama identifies what I would say is the radical centre of this fundamental tension. Whether his leadership can get his country to follow his intellectual identification of the radical centre is of course another question.
When we started our reform work in Cape York Peninsula, our starting point was to work out how people advance in the world. If the world be a pyramid where good things flow upwards and the most miserable people occupy the very bottom, then how do peoples rise up to take a fairer place?
The metaphor that resulted from our consideration of the rules of advancement in a world dominated by capitalism was the staircase. Rather than a ladder of opportunity, ours was a staircase comprising three parts.
Firstly the foundations upon which the stairs are built. For us these foundations constituted the social and cultural norms of a community, a group, people, family or society. Norms that mandate personal and social responsibilities to one’s family and to one’s community. Wherever peoples possess strong norms, they are well prepared for advancement.
Secondly the structures underpinning the stairs. For us these underpinning support structures constituted the investment in capabilities provided by the society to their people. What the Nobel Laureate Amartya Sen called capabilities included investments in health, education, infrastructure and other economic and political opportunities and freedoms.
Thirdly the actual stairs and their rational alignment heading upwards. These were the rungs that individuals would need to climb to advancement.
Eureka! We understood immediately a simple point that hitherto been obscured in the prevalent policy thinking about the predicament of the wretched of the earth: each and every rung on the stairs of progress must be climbed by real, individual human beings. The stairs are narrow and only allow individuals clutching their children to their breasts to ascend two by two. The reasons they climbed was that they made choices and they could see incentives further up the stairs.
There was no mass elevator for entire communities or groups to ascend all at once. There are just the stairs, and no man is exempted from the need to climb in the same manner as one of Clarence’s murderers in Richard the Third answered the means by which he had come hither: ‘on my legs’. Individuals climb with their own legs on behalf of themselves and their families, in pursuit of their own interests.
Our metaphor enabled us to see where social and communal provisioning was relevant, and where individual self interest was.
The foundations of social and cultural norms strongly corresponded with conservatism: we came to appreciate that peoples were well served if the cultures mandated mutual responsibilities and mutual respect. If cultures obliged their members to fulfil their responsibilities for the care for their children, and the formative development of their youth, they stood them in good stead for advancement. Our policy thinking around these foundations found a strong resonance in conservative thought.
The support structure of capabilities underpinning the stairs strongly corresponded with redistributive thinking. It was about social investment in people’s capabilities: health, education and so on. Social investment was critical. Our policy thinking around these support structures found strong resonance in social democratic thought.
The stairs themselves and their rational alignment and the fact that they were ascended by real, individual human beings climbing in pursuit of their own interests strongly corresponded with liberal thinking. We understood the power of choice, rational incentives and that the ultimate engine of development and progress is the self interest of individuals on behalf of their families.
We came to Adam Smith via our staircase metaphor: the most powerful engine at the centre of development is the self interest of individuals seeking a better life for themselves.
I come from outside of the three great philosophical traditions of western social and political thought: liberalism, socialism and conservatism. My starting point is the observation that the liberal, social and conservative impulse actually correspond to, and probably arise from, our nature as humans. Liberal philosophy based on individual freedom to choose in one’s own self interest has its ultimate source in our biology. Socialism has its source in the fact that humans have a social nature and have empathy for others. Conservatism arises from the fact that humans are also animals with culture, we possess memory and therefore treasure tradition. The liberal, social and conservative instincts of humans are facets of our biological, social and cultural nature.
It seems to me that all societies exhibit some unique combination of these three facets and successful societies make provision for them in the right combination. It all comes down to relative emphasis, the relationships between each, and in which sphere of life as to where these inclinations are best pursued. Entire libraries of philosophy have been constructed around these three facets of humankind, but their provenance is in fact the nature of humans.
The liberal truth about self interest is captured in an adjunct to Jesus’ answer to Satan when tempted in the wilderness: Man cannot live by bread alone, but he does need bread.
The social truth about our empathy and obligation to others might also be captured in answer to Cain’s question to God when asked as to the whereabouts of his brother: We are our brothers’ keepers.
And the conservative truth about man needing more than what the liberals and the social democrats could offer is captured for me in the proper response of Jesus to Satan in the wilderness: Man cannot live by bread alone.
If the starting point of philosophy be as innocent as I propose, then we enter the zone of political economy when class interests come into play. Class interests drive and ultimately distort each of these three facets of human nature, and commandeer them to the service of class interests.
Class interests therefore commandeered the human instinct for conservatism as a justification and cause for the conservation of privilege. It is therefore completely unsurprising that the inheritors of privilege have always been the upholders of conservatism, and an entire philosophy has been constructed in pursuit of this interest in conserving privilege.
Of course, conservatism contains within it many of the original and valuable human instincts that serve people well, whether or not they are privileged. Just because much conservative thought is associated with the class interests of the privileged does not make conservatism irrelevant to the unprivileged.
When class interests commandeer the basic insight of classical liberalism, then you have the kind of extreme Darwinian philosophy of an Ayn Rand, the kind which Kevin Rudd excoriated under the banner of neo-liberalism.
Whilst people from the centre left recognise the class interests that drive philosophical and political argument in favour of conservatism and liberalism, there is little self-awareness of the class interests that have come to commandeer socialism. The class interests of the socialist is commandeering the institutions of the state for the benefit of a political, bureaucratic and cultural nomenclatura. These are class interests no less than that of the liberals and conservatives – and these interests are susceptible to the kind of extremist justification of the more readily identifiable class interests.
I think it important to consider the arguments of the classical liberals as well as the left’s critique of that classical political economy. My own approach to dealing with both traditions is that the critics of classical political economy provide a more accurate description of the way the world actually works. They are good for the analysis. But they are not good for the policy. The policy of the classical liberals is actually the means by which we must seek a better world. We should pursue a liberal policy whilst keeping in mind the socialist critique.
The enduring contribution of the left’s critique of the classical liberalism is its explanation of how class interests operate in society. Whilst the old left and right took the self interest of the individual as the starting point, the right ignore or deny that the interests of individuals within a class coalesce with the interests of others of their class, and they form class interests. And indeed the old left argued that no all class interests influence the society equally with others, some class interests are ruling interests. And these ruling interests take the form of ruling ideas.
This old left analysis is unfashionable and indeed unacceptable today. It is unacceptable to the right, and unfashionable to the nominal left.
But it is not possible to think about how the wretched at the bottom of the societal pyramid might plot a path upwards, without understanding the dynamics of class in society. There are three ways in which the manifestation of class interests is most important for those seeking a better world for the wretched. Whether the interests of other classes, including the most privileged classes may be hostile to the interests of the wretched, is the least important. The most important manifestation of the dynamics of class in society is in the outlook of the wretched themselves. It is their outlook that will either constrain or free them to break out of their condition and achieve a better life. The most damaging thing about wretchedness at the bottom of society is that the wretched possess outlooks that ill-suit their advancement. Indeed they are outlooks which are often diametrically at odds with their interests.
The second most important manifestation of these class dynamics is the ideology of the middle classes who have made the condition of the poor their concern. It is this class that is often most responsible for generating, and if not generating then reinforcing, the destructive outlooks of the poor.
I am talking about the progressive middle class left here. I am talking about me and I am taking about you. It behoves us as inheritors of the old left critique of classical liberalism, to apply the old leftist analysis of class to ourselves. We are a class, and we possess interests as individuals and as a class.
No, we are not working class. My father was. Your grandfathers may have been. But you are not. Whatever lower class solidarity you think you possess cannot be taken at face value: we must examine your actual interests, not what you think or feel. This is not about your professed loyalties or your empathy, this is about your interests. What is your class? And what interests do you have and how are they served?
Wake up from our daydreaming. You are bourgeois. We are bourgeois. I am bourgeois. I am one member of a growing class of indigenous Australians who are middle class, who are increasingly prosperous and our children are getting educated and they will attend good universities and they will have the means to do well in ways that my parents could never have conceived of.
Yes there are dynamics concerning race and culture that are particular to us, but I know of no classical theory of the old left that exempted us from the dynamics of class society on those bases alone. We have class interests and they are not the same as those of our families and fellows countrymen back home.
The tendency of black and white members of the middle class left to maintain illusions about our solidarity with the interests of lower classes, is one of our central problems. These illusions result in members of the middle class left to not understand that they in fact have more in common with the class interests of the middle class right than they do with the lower classes.
Whatever the problems with Kevin Rudd’s discourse as a whole in The Monthly his back to first principles attempt to articulate a Labor philosophy based on Adam Smith was coherent. He wrote:
“Modern Labor, following Smith, argues that human beings are both ‘self-regarding’ and ‘other-regarding’.” He argued that members of the political Right distort Smith’s liberalism when they selectively “speak of the self-regarding values of security, liberty and property”. Social democrats, he contended, are truer to Smith’s original philosophy because they add “the other-regarding values of equity, solidarity and sustainability”.
I responded in The Monthly in the following terms:
Yet social-democratic solidarity has its limits: the fate of the disadvantaged can be seen to depend too much on the altruism of the economically and socially integrated mainstream.
We need policies that increase self-regard among the disadvantaged. To put it crassly: poor people need to become at least as self-regarding as those who are not poor. Until disadvantaged people become as self-interested as advantaged people, they will not rise above their disadvantage. Until we crank up the engine of self-interest among the under-privileged, we won’t get individual, and therefore social, uplift.
Those who are well off and who devise other-regarding policies for the disadvantaged forget that they themselves are well off because of their own self-regard. Politicians of the centre-left are particularly prone to this kind of patronising double standard: “Mate, I do well with my own self-regard, thank you very much, but self-regard isn’t for you; you need everyone’s else’s other-regard, and I’m in government to organise the very other-regarding policies you need.”
The great tragedy of Kevin Rudd is that he seemed to understand that the social democratic thinking about social justice was daydreaming. In an interview with Peter Botsman’s online journal Australian Prospect in 2006 Rudd expressed this important insight:
There is a great opportunity for any member of parliament at any level of government throughout the country to become a community entrepreneur. What do I mean by that? Work within market structures or normal local community structures to achieve social outcomes that benefit the community rather than waiting for some huge, centrally driven social justice machinery to roll out one day which will deliver nirvana in our times. We all hope that will one day be the case. But absent that, I think we’ve got on our side of politics a dual responsibility to work locally as an entrepreneur to achieve community outcomes using the resources available and then to work separately and simultaneously at a policy level to try to achieve outcomes through a change of government and overall national policy.
At the time I placed great store in Rudd’s insight here. I thought that he got it.
But then as Prime Minister we have never before witnessed a more ambitious erstwhile driver of the massive forklift of social justice than Kevin Rudd. The scale of his governmental ambition was a measure of his heart, but it was fundamentally at odds with the insight he seemed to show before he became Labor leader and before he became Prime Minister.
The problem is that those who step into the big cabin of the vehicle of the country’s national government, and they feel the power of the massive diesel engine rumbling under the hood – start to think that this machine can be mobilised against all of the big problems in a big way. When it comes to social progress no matter how big and powerful the engine of government might be, it is the numerous engines of self interest that lie dormant in the breasts of the disadvantaged that must power people up the stairs of social progress. Yes, governments can and should make social investments so that people develop their capabilities, but that investment must be about enabling people to pursue their own self interests, not to assume that government can be a substitute actor in the development story.
The Nobel Laureate Amartya Sen has been a seminal influence on our reform thinking in Cape York Peninsula. It was his articulation of the purpose of our policy that we have taken as our own for our people: we want our people to have the capabilities to choose lives they have reason to value.
The capabilities to choose lives they have reason to value.
Sen’s great contribution was that he resolved the dialectic between Liberal Choice and Social Democratic Opportunity Redistribution. Sen’s synthesis was the concept of capabilities. In many ways Sen had exposed the conceit in liberal thinking: it is not just the case that choice is a power for development. In order to have real choice Sen says that you need capabilities. Liberals often forget that the reason why they derive so much power from their freedom of choice is that they have the capabilities to choose.
We extended Sen’s insight in our own thinking in Cape York when we asked what constituted capabilities. We therefore came up with the following formula:
Personal Responsibility + Opportunity = Capabilities
It is not as the social democrats would have it simply a matter of opportunity provided by redistribution that produces development. Rather personal responsibility must accompany opportunity in order to produce true capabilities. You can well have many opportunities in the welfare state, but if someone does not take personal responsibility, then no capabilities will be developed. A society might have good opportunities for health and education, but without personal responsibility, then capabilities will not result.
This is how we combined the social democratic principle of opportunity investment with the conservative principle of personal responsibility. This is what it means to locate the radical centre.
In indigenous policy we resolve the longstanding dialectic on Indigenous Rights vs Indigenous Responsibilities in the following way: we say that our people have the right to take responsibility. We locate this radical centre by understanding that responsibility is the greatest power. It is the in fact the true meaning of self determination. Instead of continuing the mindless contest between the idea that indigenous rights is the true leftist agenda and indigenous responsibilities is the rightist agenda, in Cape York we understand the unity of these apparent opposites: we claim the right to take responsibility as the our most important right.
There is one classical dialectic which Australians will need to grapple with in order the find the true radical centre, and that is the dialectic between Humankind vs Nature. What is our place in nature? And what is our future in nature? At the present time there is a major tug of war on two sides about this most important and seemingly intractable question and we can see no clear way forward.
The crusade on one side of the dialectic is cast in the highest moral terms – the greatest moral challenge of our time. There is absolute righteousness on this side of the dialectic. And yet the prescriptions are fundamentally at odds with how humans choose to live. The gulf between the prescriptions for saving the planet and the behaviour of humans, between their material needs and preferences and their moral anxieties is opening up a massive hypocrisy at the heart of humankind: We want to save the planet but we don’t want to sustain any real pain in the process. In fact we would prefer to shift the costs to other people. The more economically advantaged we are, the greater our righteousness and willingness to support action. The more economically uncertain our position, the less prepared we are to compound our disadvantage.
Opposed to the equally disingenuous obscurantism of the denialists, the western environmental left is the most vehement in its moral stand – and yet least willing to bear the fair costs of their responsibility. The gulf between our self regard and our other regard when it comes to environmental costs is as stark as ever. Western environmentalism seems to be wishing for a future where the world becomes more like Tasmania: A wilderness to sustain the spiritual needs of an advantaged class that is subsidised by another economy in a parallel universe, depopulated of its original peoples. There is too much hypocrisy from both sides of this great conflict.
The Greens are taking over a large part of the tug of war against the liberal conservatives and will continue to do so. Australians have cast them in the role of being the new force of the centre left.
Those who seek social progress cannot be a party of the centre left or the centre right. They must be the leaders who seek the radical centre.
Thankyou.
Posted on: 07.09.2010
Romance in Politics – the Public Good
When Paul Keating encouraged me to accept your kind invitation, he told me, “They are a romantic lot, most of them are old lefties, their hearts are still in search of a better world”. He reminded me that Mahler was a social democrat at heart.
I can recall from my youth that our literary and artistic giants had a slight political bent – Frank Hardy, Katherine Susannah Pritchard, Mary Gilmore, Robbie Burns, Paul Robeson, Henry Lawson, Charles Dickens, John Steinbeck.
However, as the Romantics might have their politics – so politics has its Romantics.
It is a great pleasure to give this lecture – the John Button Oration.
The essential case I seek to make out is the case for the Romantic in politics. There is no better banner to do so than under the name of John Button. The Romantic here is defined in the sense that it is applied to Keats, Byron and Shelley of “a belief in some positive ideal of good”. It was said of Keats that “He had the power of putting a spirit into life so that the world is not dead or so dull.”
In making out the case for the Romantic I would like to draw on the political life of John Button and the unfinished contribution of Laurie Carmichael and Paul Keating. John Button – the Labor Party Independent who became a Senator and Minister; Laurie Carmichael, the Communist who led one of the toughest unions, the Amalgamated Engineering Union, and later became Assistant Secretary of the ACTU; and Paul Keating, the Treasurer, Prime Minister, and the source of one of Australia’s most brilliant home grown musicals – Keating the Musical.
Each of these three people in turn could be described as part of the Romantic faction of Australian politics over the past forty plus years; although Paul Keating and John Button were never in the same faction in the ALP and Laurie Carmichael was not even in the ALP. The Romantic faction is, of course, not limited to the ALP, or for that matter, the Communist Party. There are members in most political parties, unions, churches, businesses, universities, the community and the media. It is part of the DNA of this nation. There are plenty about – a smattering in all political parties, and in society in general.
However, there are conditions of entry, as Ralph Waldo Emerson outlined in his lecture, “Man the Reformer”, to the Mechanics Apprentices’ Library Association in 1841. He made the following points:
“Reformers tend to Idealism.”
"They “fly to refuge to the world of ideas and aim to recruit and replenish from that source.”
“The very great and community moment in the annals of the world is the triumph of some enthusiasm.”
“They must be lovers of life, and at once the impossible becomes possible.”
Idealism, ideas, enthusiasm and passion are the keystones of the Romantic. Each factor by itself is not sufficient. Attila the Hun could be described as enthusiastic, the Conservative Movement no less passionate. The defining feature must, therefore, be in its totality: the comprehensive nature of the objective of kindness to all and belief in all – that people are not left behind.
This is not a monopoly of the ALP.
• Malcolm Fraser’s stand on apartheid, his support for refugees and his acknowledgement of internationalism are Romantic traits which should not be ignored or balanced against some less Romantic acts.
• Ian Macphee’s support for effective minimum wages, consultation and respect, were as important in establishing the new wage system as anybody else’s in this nation.
• Jeff Kennett’s support for people who suffer from depression should be remembered, along with his energy in driving the construction of Federation Square.
• Ian Sinclair’s genuine support for regional Australia.
• Rupert Hamer’s commitment to the Arts.
In a multi-dimensional world, Romantic acts are not the preserve of one political party, or even one faction.
Indeed, Australia is not a nation divided into extreme political positions.
I met Tony Blair with Kim Beazley and Paul Keating on two occasions and he talked of New Labor in a new world. His thesis was that the political wheels had collapsed on Communism and therefore a convergence to a broader based centre was inevitable.
The reality, of course, is that Australia had that debate in the1890’s – it shaped our Federation - and after that the extremes of both left and right were largely ignored. We decided then to go to the middle ground.
It was for that reason we had early minimum wages, pensions, child endowment and the recognition of unions.
This was not the United States where until recently they were seeking to protect Roosevelt’s reforms of the thirties!
Lenin was right in his observations about unions, and Australian unions in particular. He said that Australia was in a non revolutionary state because of the positions of the political parties and institutions like unions.
If Lenin thought this was an unstable position - he was wrong. Our democracy has been stable for a hundred years.
Australia’s challenge over the past quarter century was not to become NEW LABOR; it was to prevent the New Liberals overturning the century of political equilibrium that had been broadly established and maintained here.
I believe that Labor Governments have a special responsibility as reformers and catalysts for change. Labor Governments must be the great investors in the social democratic model. They must also be the great protectors.
There are many people who have been lifelong members of the Romantic union in Australian politics, including Gough Whitlam, Bob Hawke, Nugget Coombs, Barry Jones, the Creans, the Beazleys, Joan Kirner, etc, who have helped frame, sustain and enrich its contribution. There have been its champions, like Phillip Adams, who have been a conscience and a chronicler. Phillip could even have been the shop steward.
This is not a relative test of the importance of each person’s contribution but about three people whom I have known quite well.
John Button
Let me first turn to John Button, who I first met in late 1965 or early 1966, after I joined the ALP in 1965 as a 16 year old.
He was in a group of people called the Participants, mainly lawyers, including John Cain and Bob Holt, who were urging a new structure upon the ALP, a modernism and an objective that the ALP should aim to actually win elections!
• Younger people here tonight might find this unremarkable, but for the ALP in Victoria in 1965 and 1966, such a view was not universally popular.
• I remember at a Branch meeting of the ALP Gough Whitlam being pilloried as a political opportunist, more interested in winning the election than he should be!
John Button spoke eloquently of the reasons why the ALP should win elections.
There was a reform agenda in 1965. It was to:
• end Australia’s participation in the Vietnam war;
• achieve equal pay for women;
• improve the pension;
• give unions the right to strike;
• recognise indigenous land rights;
• campaign for peace/disarmament;
• improve the environment;
• Apartheid was wrong and Nelson Mandela was a hero not a terrorist;
• our health care system and our hospitals were inadequate; and
• educational opportunities for lower income students were limited.
This was a good agenda, yet the ALP had not been in power federally since 1949.
Don Dunstan, as a Labor Premier in South Australia, was adding Arts and Lifestyle to a States Agenda. As Attorney-General, Dunstan had delivered land rights to the indigenous people of South Australia in 1965.
Gough Whitlam was arguing for a new sense of Nationalism.
I also remember John Button being relatively gentle with the Conservatives. He said that their greatest fault was their Conservatism, when Conservatism would no longer do.
I did not join the Participants, or for that matter any faction – but was impressed by the pragmatic reality of the trade unions.
When I first worked for the Federated Storemen & Packers’ Union I did so at 17-25 Lygon Street, Carlton. That small building contained the Australian Council of Trade Unions, Maurice Blackburn & Company, the Vehicle Builders Employees’ Federation and the Federal Office of the Federated Storemen & Packers’ Union. The real office of the union movement after 3.00 pm became the John Curtin Hotel next door. This was the geographical centre of union politics in Australia.
John Button worked in the front office on the left and I worked in the back office on the right on the first floor.
Bob Hawke had just begun his presidency at the ACTU. He was working with the person he narrowly beat – Harold Souter.
John Button was very kind to me – he offered advice and support. When Maurice Blackburn left the building he still kept in contact.
He had a sense of humour and a sense of duty. As President of the Professional Divers’ Association (a small union), he worked for nothing. The best payment he ever received was having his house painted. “The Professional Divers were better at diving than painting, but nonetheless, far better than [me] him at painting.”
However, it was much later – in late 1982 and early 1983 - in the contest for leadership between Bob Hawke and Bill Hayden that he displayed his most enigmatic and practical character.
Bob Hawke said to me – that as I liked John Button I should talk to him about the leadership. So I did on two or three occasions.
Always in the most inexpensive of places, like Genevieve in Carlton.
John was a great admirer of Bill Hayden and respected his qualities and integrity. The last discussion I had with him about the leadership was agonising. He debated with himself more than with me. He reiterated the 1965 speech of why we need Labor Governments; that the next Labor Government would need to understand and work with unions and Hawke was from the unions, that the risk of losing was greater with Bill Hayden, and that they would need a longer period than three years.
At the end he said – “I will support Bob, but don’t tell him. I want to tell Bill Hayden first.”
There was a tear in his eye, and in my line of work I did not see many tears.
After Labor was elected in 1983, as Minister for Industry, John Button was an agent for change and modernisation. The Steel, Vehicle and Clothing Industries were reformed, restructured and rationalised. The manufacturing wealth of the nation had to be protected and nurtured, but they could not survive without adapting to the rest of the world.
He worked with industry leaders, unions and the bureaucrats to achieve these results. The process of involvement and leadership was an educative process in itself of lasting significance.
John Button was humorous, gentle, tough and determined. He loved to write, draw, think and communicate.
After leaving Parliament John continued to contribute as a thinker, mentor and talker, and was also a significant writer.
Laurie Carmichael
I had read a lot about Laurie Carmichael before I first met him.
Unlike John Button and Paul Keating, he was not in the ALP but in the Communist Party.
Laurie Carmichael brought an intellect to the union movement that was almost unparalleled.
Laurie Carmichael was, and still is a Marxist. Yet, simultaneously, he was a great contributor to the Social Democrat model of the Australian Labor Party.
I asked him on the odd occasion about this. His explanation was clear enough:
• First, Marx and Lenin were both right in saying that unions, Keynesianism and Social Democratic Governments did create conditions which would defer the inevitable crisis between the bourgeoisie and the proletariat. However, Australia was not the place to test Marxism; it would find its truth in the societies where there was no third way as entrenched as our own. When that happened we would find it hard to avoid.
• Second, Marx would sometimes say of himself when faced with practical outcomes that even he was not a Marxist.
• Thirdly, revolution may take different forms than that which were expected.
• Fourthly, in any event people had to operate within the objective conditions that existed.
He seemed to belie reality – the most feared person in the country, causing or leading strike actions, a communist, but in a union of tradespeople, many of whom were relatively well paid. He won union election after union election. He was a great supporter of union democracy.
He was the antithesis of the media image that that was constructed around him. He talked quietly, logically, listened and inquired. He was a modernist about technological change but had a classical bent in music. He was about practical industrial outcomes but believed in the bigger picture of change in society. There was an ideological framework of reference for all his industrial and political strategy.
The first opportunity I had to see him at work was during the Oil Industry negotiations of 1971. The Storemen & Packers’ Union had a strategy – a minimum wage with bargaining on top. Laurie Carmichael had an ideology. I wondered why a person would place himself under so much pressure year in and year out. There were a myriad of unions involved in the negotiations, but he was the natural leader of the multi-union negotiations.
He outlined the claims, the priorities, the expected counter response by the employers and the unions’ response. It was tactical – an industrial game of chess put with a twist of politics. He was certain of only one thing; that there would be a major dispute. He wanted an outcome in which a reduced number of hours would be worked to give impetus to the campaign for shorter working hours, which he had encouraged at the recent ACTU Congress.
When the Oil Companies made it a condition of the negotiations that there would be no discussions about hours of work, the game he had mapped out was in play. When I asked why he was certain that there would be a dispute, he quietly said, “This is what the McMahon Government wants, in order to save themselves.”
I said, “If we were playing into their hands then why did we want a dispute?” He replied, “Because the dispute will be in our hands and not theirs.” History shows the Oil Companies got their dispute, the Government relished it for a short time, but it was settled before the election. The McMahon Government lost and the oil workers won the 9 day fortnight/19 day month claim.
The Oil Industry became the second bench mark in the claim for a shorter working week; a campaign which had been taken up by Laurie Carmichael, then spread throughout the workforce and established as a national condition - the 38 hour week.
Laurie Carmichael was not merely the great enemy of the Conservative Government; he was made a scapegoat target of an embattled Labor Government during 1975. I stood next to Laurie Carmichael at the ACTU Congress in 1975 when Gough Whitlam spoke. If anybody had reason to be miffed, Laurie did – the pre-Congress attack on him by the then Minister for Labour, Jim McClelland, was personal, contrived and unjustified. But Laurie’s response to Gough’s speech was a little unexpected. “We have not given him a fair go.”
Laurie said, ‘A reformist Government needs more time.” It was a sad occasion to see one of the last great speeches by one of Australia’s great Prime Ministers whereby defeat was conceded, the lesson learnt and the future already being planned. Laurie was thinking ahead. Not for the conflict with the next government, but how the next ALP Government could be given the best chance.
Years later, the Accord could not have been achieved without Laurie Carmichael; the ALP could not so easily have won government in 1983, and it could not have governed so effectively without him.
The years of the Accord extracted a price for union leadership, but also laid a basis for substantial improvement for those most in need.
Laurie Carmichael did have a class view of life – his class view was that a militant elite would provide the leadership, but the benefit had to be spread to the class of workers.
He supported the initial wage restraint under the Accord because:
• First, we inherited an economy in bad shape.
• Second, overall restraint was consistent with the view that some sections of the workforce should be given the opportunity to catch up on pay and conditions.
• Trading wages to achieve Medicare was of great benefit; and
• Finally, we had a plan for an unusual exit from the restraint – the extension of superannuation.
However, there was an issue much bigger in Laurie Carmichael’s view, and that was the role of education. It was about lifting the standards of trade education and recognition for the contribution of workers’ skills. It went further to broadening workers’ skills, adjusting for the technological revolution and increasing workers’ opportunities. He became the great advocate for education.
In any event I always thought that Laurie was concerned in some sense about finding a pathway to achieve the Nirvana that was envisaged by the great revolutionaries. His was the long term, where workers had interesting times - at work and at play – education, workers’ involvement and control, leisure and the arts.
Paul Keating
Now, let me turn finally to Paul Keating.
My first exchange with Paul Keating in 1975 was blunt enough. He said why should unions be concerned about import parity prices when the ALP had no chance of winning the next election? “You should be talking to Fraser not us”, he said.
The next occasion on which we met was in early 1983 when he walked into the Waterside Workers’ Federation meeting room to finalise the Accord negotiations. His position was plain enough.
The Accord was not of his making, he was doubtful if it had a snowball’s change of lasting, why would the Labor Government trust us when we did so much damage last time, the unions would not keep to their commitments, and in any event, he did not expect to be Treasurer anyway.
This was not the best start for a long friendship.
However, he became the greatest supporter of the Accord – an Accord warrior.
His confidence in us [unions] grew gradually.
• The currency was floated without any negative implications.
• The unions kept our commitments to achieve Medicare.
• He knew we had a plan to exit from the wages pause – through superannuation.
He became the most regular visitor to the ACTU and the greatest supporter on superannuation, minimum rates of pay, union bargaining rights, and along with Bob Hawke, Medicare. These were not things to negotiate. He wanted to do them.
However, along with Bob Hawke, he was also the most challenging. He chased us remorselessly, from union demarcation disputes, to internationalisation of the economy, increased competition, improving productivity, privatisation, reduced government expenditures, and restraint. All the big picture economic issues.
It is easy to list the achievements of the Hawke-Keating Government.
However, the real test of their legacy is the test of time.
After the 1996 election as we pondered the defeat of the Labor Government, I can recall telling Paul that whilst he could regret not having another few years of government, there must come a time when your beliefs and contributions have to be tested against the opposing forces. The greater their value, the greater their durability.
Paul Krugman, the noted US economist, recently wrote a book called “The Conscience of a Liberal”. He explains how the defeat of Barry Goldwater in the 1964 elections became the catalyst for the gradual domination of what he terms the Conservative Movement, whose mission was to undo the multi-generational impact of Franklin Delano Roosevelt (FDR).
Krugman describes the relative success of that Conservative movement in the USA and the costs. Krugman paints a picture of the USA since the early sixties, its economy growing rapidly, productivity expanding and wealth being created. However, simultaneously minimum wage adjustments were frozen for long periods, tax cuts were distributed to the rich, health costs burgeoned and executive salaries boomed. To fund the increasing living standards, the nation went on a gigantic binge – deficits at household, corporate and government levels kept the growth purring along. The rest of the world funded the wars, the credit cards, the cosmetic surgery, the gas guzzlers and the debt.
But it ended in tears – with the great Global Credit Crisis.
You can almost hear Karl Marx from his grave at Highgate Cemetery in London saying, “I told you so.”
Many of the features that Krugman describes are common to Australia’s experience – high levels of economic growth, of productivity, executive salary surges, and increasing overseas debt to fund our growth. Credit grew at more than 10% compound per annum over the past 30 years, with Australia sucking in billions from overseas to fund our growth.
Over the long run, productivity growth is determined by knowledge and technological change. It is where increases in real living standards come from. Since 1992 Australian productivity growth (measured as GDP per head) is up 35% compared with 33% in the USA. Both countries increased productivity at about the same rate.
The similarities should not be ignored, but the differences are even more interesting.
Let us compare Australia with the USA since 1992 – since the recession of the early nineties - on six broad economic and social criteria.
- International Trade
As a share of the economy, Australian foreign trade rose from 25% in 1992 to 40% in 2008. The United States’ share rose from around 20% to 30% over the same period
Foreign trade raises incomes, as well as the range and quality of things we can buy. It gives economies of scale in production and consumption. Australia’s is a more open economy. Our principal trading partners have become the emerging nations of Asia, particularly China. We reduced tariffs. We have a much more flexible exchange rate. We have lower inflation
- Wages and Jobs
In the sixteen years from 1992 to 2008 there were 15 increases in Australian minimum wages, compared to 4 in the USA.
The United States federal minimum wage was frozen from 1997 to 2006.
The real increase in the minimum wage over the period has been 8% in Australia and 4% in the United States. However, the latter figure disguises the dramatic fall in the real value of the minimum wage of 14.8% from 1996 to 2006.
The minimum wage is more relevant here. Australia’s federal minimum wage is currently 45% of the average wage; in the United States it is 25%. Around 15% of Australian workers rely on minimum wages compared to 3% in the US. And, in Australia, the minimum wage is supplemented by superannuation, better annual leave, better family leave and better sick leave.
For workers who do not rely on minimum wages, collective bargaining delivers better wages than individual contracts. Australian unions embarked on bargaining in the early nineties and are the catalyst for most collective agreements, with increases in the range 3% to 5% over the long haul, spreading real wage increases efficiently in the market place.
This can be starkly seen in the case of a shop assistant, who in Australia received $15.64 per hour in 2008 compared to US $6.55 in the United States. (Using average 2007/08 exchange rate $7.24. Using the lowest exchange rate of 62¢, it is still only $10.56.)
As Pisano and Shih note in the most recent Harvard Business Review, “Average weekly real wages have remained essentially flat since 1980, meaning that the United States’ economy has been unable to provide a rising living standard for the majority of its people.”
The unemployment rate in Australia is 5.9%, up from 3.9% before the global financial crisis. The United States’ unemployment rate is 9.5%, up from 4.6%
Australian employment grew by 2.2% per year from 1992 to 2008, compared to 1.3% in the USA.
And our participation rate – the share of the population aged 16 – 65 in work and looking for work – rose from 44.2% to 50.2%, whereas the United States increased from 46.9% to 48.3%
- Health
Health care costs are currently 9% of Australia’s GDP, up from 7.4% in 1995. This compares with 16% currently in the USA, up from 13.3% in 1995. Health costs have risen in both countries, but by more in the US.
The United States private system leaves a large minority of its population without any health insurance at all, whereas Medicare here delivers good baseline health care to all. Government expenditure on health in the United States is 45.3% of the total, compared to 65.8% here.
Life expectancy in 1990 was 75 years in the US and 77 here. Today it is up 3 years to 78 in the US and up 5 to 82 years here.
The adult mortality rate - the probability of dying between age 15 and age 60 - is expressed as the number of deaths per 1,000 of the population. In 1990 it was 132 for the United States and 96 in Australia. By 2006 it had fallen to 109 in the United States and 65 in Australia
- Superannuation and Pensions
Australia progressively introduced a national superannuation system; national savings were allocated to the Future Fund and the Liberal Government simplified and extended the end benefit. In Australia, superannuation increased from 3% of wages to 9%.
The United States has substantially had a corporate pension system funded on the basis of defined benefit.
Ours is a system that has been funded by productivity growth.
There are three aspects of superannuation which need recognition and understanding.
First, in Australia, superannuation assets are now over 100% of GDP. In the USA, the ratio of super assets to GDP is 75%, the United Kingdom is 84%, New Zealand 12% and Canada 54%.
Second, relative to the rest of the world, Australia’s equity risk premium has trended downwards since 2001. This, in turn, reduces the cost of capital and encourages investment.
Higher savings mean interest rates are lower than they would have otherwise been.
Third, no Australian company has been made bankrupt by Australia’s superannuation system.
h5. Taxation and Government Spending
Over the past decade and a half, Australia has run budget surpluses in the good times and deficits when economic growth halted, and our public debt is tiny by world standards.
The United States has run increasingly larger fiscal deficits because of its exorbitant income tax cuts to high income earners and its pursuit of a series of wars. The United States public debt is large and rising.
- The Financial System
The Four Pillars Policy, the lending policies, the controls and regulations and lower rate of leveraging have contributed to a more stable financial system. Overall, Australia has had a better managed financial system.
For example, no bank in Australia had a leverage rate that could compare with the Bank of America’s 73.7:1 leverage ratio; ie a capital of 1.4% of its assets.
If you added the off-balance sheet it was 134.1. (Bridgewater)
These changes, before the initiatives of the Rudd Government, placed Australia in a better position than most. The Rudd changes have preserved, and indeed, promoted that advantage.
We can ask the same question that Krugman asks - where did the productivity increases go? In Australia, low and middle income families received a share through wages and social services. In the United States, the lions took the lions’ share
We have lower levels of toxic debt because of higher living standards for those most in need.
We have less recourse to debt because of a better health care system and real wage improvements for the majority.
The middle class is better off because of unions.
Superannuation savings have provided ballast to the system.
It has worked because the big changes – exchange rate, wealth valuation, interest rates and fiscal policies – have been the adjustment factors.
Australia is better placed with the Asian growth markets. We didn’t do better simply because Australian Governments have been better managers or even visionary investors – it is because companies invested and workers adjusted to change. Real wealth was created.
However, it is reasonable to say that in the past generation the economy has been satisfactorily managed. The great structural decisions of the Hawke and Keating Governments have been vital in establishing our current position.
More importantly, the Social Democratic framework remains in place. It has to be repaired in places, but the essential elements stood the test of time. In a sense, that framework and the distribution which it encourages, contributes to stability.
It is a model which can be called lots of things, but it reflects most of all the philosophies associated with Paul Keating:
Increasing acceptance of internationalisation.
Distribution to all – so that education, retirement, health and access to information are universal rights.
Increased competition.
So that there can be no misunderstanding, let me state clearly that long periods of Conservative Government did come at a price:
The weakening of unions is no good thing.
The implicit and explicit racism encouraged and nurtured by John Howard is a matter of national shame.
The failure to become a republic.
The development of the shortage of skills foreseen by Laurie Carmichael, but not ameliorated by government action.
The treatment of refugees.
The inadequacy of the health system.
The attack on minimum wages.
The delay in reacting to the needs of the environment.
Australia would be better off with 15% superannuation.
We have accrued an enormous foreign debt. The massive growth of Australia’s liabilities abroad - $193 billion to $610 billion between 1996 to 2007.
Australia paid a price, but when Work Choices was defeated it was a resounding vote for the Australian Social Democratic model in the same way that Stanley Melbourne Bruce’s defeat in 1929 represented a beacon of resistance to conservative social vandalism.
The commonality between John, Laurie and Paul
Button, Carmichael and Keating had many differences, but there was a commonality of purpose.
They thought and acted as generational players. They occupied the stage over a generation, learnt from winning and losing, and made decisions for the ensuing generations.
Their predilection was always to assist the poor.
They were warriors – they were lovers - but willing fighters for their cause.
They believed in practical outcomes – they were driven by philosophies, but wanted real outcomes.
They understood and promoted a standard of living that was not just about wages – but about other things such as music, books and theatre – an inner life.
They were essential democrats – putting their views and opinions and arguing for them. In a sense, more importantly, they believed in people – they wanted them to have more than a say. They wanted their involvement.
They liked and respected one another.
In their political life they were the Generals of the Romantics. They painted pictures of a better life - not for some, but for all.
The Future
This is not a speech of regret, lost causes or excuses. Australia has done better than most countries and is in a position to do better again. We are well placed. However, we do know one thing, that the future is not ours to make - in essence it belongs to those who will own it.
The Rudd Government is at an historical juncture in its early years. After a hesitant start, it should be recognised for its bravery in the fiscal stimulus it initiated to the global crisis, the changes that it will create for Australia’s universities and the proposed Broadband investment. If cemented and handled well, it will take well deserved credit for economic management. The repairs to the wage system and the dilapidated school system were timely and necessary. The Labor task is to build a higher platform for social democracy for the next generation.
The young, characterised as Generation X or Y, have been cast as individualistic and self-interested. However, I cannot reconcile it with these facts:
Young people in Australia voted overwhelmingly for the Greens and the ALP.
Young Americans went out to work and vote for Barack Obama.
The young hated Work Choices.
They start paying for their retirement from the first day in the workforce through their superannuation.
They substantially pay for their university education over their lifetimes.
They share family responsibilities more than ever.
They are less involved in racial extremism.
They are greater supporters of environmental solutions.
They subsidise the health care for the aged.
In short, without the young, the basic foundation of the Romantics within all the parties would be weakened. It is the young who are giving sustenance to the Romantics.
However, there is a world of fighting to do for the next generation to make the same advances as the last.
We know this:
The health care budget will increase as the population ages and seeks better health care. To maintain costs at the current proportion of GDP is unrealistic. A 2% - 3% increase represents an increase of $20 billion. As GDP rises, so will the amount.
Governments may set the age of the pension, but they do not set the age of retirement. That is a decision for the employer and the employee.
Retirement planning is not extending the age of entitlement of the pension. Retirement opportunities currently begin between 55 to 60 years of age for a great number of Australians. The maintenance of this opportunity, and for a pension able to sustain a living standard, will require a contribution of between 12% to 15% of wages.
Unions are important in ensuring a fairer distribution of resources. Krugman has illustrated the impact of weakening the bargaining capacity of unions. Unions must always endeavour to be useful to their members and lead campaigns for them.
Unions must continue to pursue improvements in living standards, broadly consistent with the underlying rate of inflation and the trend increase in productivity.
There is a need to broaden the agenda to include superannuation, legislating for new national long service leave standards, study leave and training obligations and rights at work.
There is a Republic to be established.
Arts to invest in.
A national treaty with indigenous Australians to be made.
Education opportunities to be established.
Regions to be sustained.
Cities to be rebuilt.
Infrastructure of roads and rail to be funded – priced at the most effective public price and not the private price – and achieved by partnership with the private sector.
Housing for the poor to be provided.
Communications to be afforded to all.
Wars to exit from.
Universal protection to be established for all those who are disabled, irrespective of the cause.
Climate change to be addressed.
We cannot be complacent about the foreign debt. We could afford to be complacent about the foreign debt when there was a capital surfeit, but those times are gone.
It is true the world does balance its debt and obligations, but we need to:
grow our own savings so as not to amplify that dependence; and
be prepared to embrace equity and debt from those nations that we trade with.
We could borrow from the rest of the world to fund our homes and factories, but we need to provide more of our own capital.
If Australia goes to 15% superannuation, we will by the mid-2020’s have between 4 - 5 times the GDP in superannuation assets. This will not only provide the capacity for the retirement needs of future generations, including their additional health care costs, but also a level of savings in a competitive trading world that will give us the greatest protection for a generation.
There are lessons from the past which are relevant for the future.
The Australian Social Democratic model works well.
Whilst it needs management and tendering, it regularly needs to be filled by enthusiasts with flair.
However, it is not filled by hot air and rhetoric.
The economy must produce real wealth, more efficiently, and over time share that growth equitably amongst all in society and between the competing claims for short and long term improvement.
That is how we funded superannuation, and that is how we can fund the next stage, health savings and income protection over time.
We do it best by being a positive nation in the world of economic growth, as the tectonic shifts of power continue unabated.
We will do best as a nation that saves for its own future, particularly in view of the uncertainty that exists.
Whilst Australia has every right to be more optimistic than most, we should not underestimate the problems in the United States’ economy and the flow-on impact on the rest of the world.
Obama faces a mountain to climb by comparison to the hill we have to contemplate in Australia. The deficit will go to 12% of GDP. It is vital that he wins on Medicare.
The USA is vibrant, resilient and dynamic. However, if the fundamental restructuring does not occur, then those in charge will be seduced by the soft option of inflation.
The world will be a lot less stable as the inflation genie is let out of the bottle.
Conclusion
Overall Australia has been well served by the political process, not just by Governments, but by Oppositions.
There have been some inexcusable lapses, some bad judgements, some bad mistakes, things that make your heart burn and eyes sting, but on balance they have been outweighed by a combination of good management and brave investment.
But history shows that defeat often follows euphoria and rejoicing.
The case for Romantics and Romanticism in politics is no less substantial than it ever was.
There is a humanity to save from itself – its wars and its nuclear armoury.
There is a planet to save from the very impact of humanity.
It was said of the Romantics that they broke the polite rules and breached the conventional restraints, and in doing so “exalted passion, energy and imagination”.
We are indebted to them.
After the eating, talking, drinking and the heart stops beating, what is left is the soul of creativity - the paintings, the buildings, the poems, the plays, the movies; the accretion of values both good and bad – the ideas, the laws, the philosophy and the ideals.
It has been a great pleasure and privilege to have given the inaugural John Button Oration. For a person of great values – a true Romantic.
He helped make the political world “not so dull and dead”.
Posted on: 28.08.2009
