The long election campaign is over. The promises are all tabled, but the new government for the next three years is yet to be decided. Whichever party forms government notwithstanding, this election has been an opportunity lost.
Neither of the major parties has addressed key structural issues which are impacting Australian society. What we have been offered is essentially a ‘continue as-is’ approach.
Events in Australia and elsewhere in the Western world indicate that clear political leadership is needed, encompassing increased recognition of societal outcomes over economic outcomes.
The reasons behind the ‘Brexit’ referendum vote are still being debated, but the outcome would appear to indicate that certain other Western countries have issues in common. Signs of populist revolts against established political approaches are evident in the Donald Trump presidential candidacy in the US, and far-right political parties are on the rise in France and the Netherlands.
In Australia, indications are much more muted, but disenchantment with the major parties and the rise of Independents are arguably of the same ilk. Reasons are myriad, but what lies at the heart of each of these developments is the conviction that the economic system is serving the elites and not the people.
Australia’s level of income inequality is above the OECD average but below countries like the UK and United States. More problematically than this, we are moving in the wrong direction. Those at the bottom of the income distribution are drawn from a diverse demographic and likely to be aged over 65 – single parents, those from non-English speaking countries, indigenous people, and those reliant on Government transfer payments. Effectively addressing this inequality requires a number of focused policies.
Despite over two decades of mainly bi-partisan commitment to so-called ‘trickle-down economics’, there is growing income disparity in Australia. An IMF paper in June 2015 addressed this question at an international level, concluding that when the income share of the top 20% of income earners increases, then GDP growth actually declines. The paper also argued that social policies focused on the poor and middle class can mitigate inequality.
So what should clear political leadership’ look like in Australia, if we were to embrace as a national goal an inclusive prosperity? Policy development, implementation, and the subsequent evaluation of its effectiveness would be based on whether policies had served the dignity of people, particularly the marginalised, and whether they had served to enhance the common good.
Applying such a litmus test would undoubtedly need to reform the current approach to diverse areas of policy, including worker’s rights, taxation, poverty alleviation, environmental protection, indigenous affairs, foreign aid, and refugees and asylum seekers. This list is by no means exhaustive. It would challenge the existing economic paradigm – focused as it is on markets and investment – in favour of improved people outcomes.
Doubtless, the coming weeks of political uncertainty will give rise to much commentary and scapegoating. What would serve us all best is a real dialogue about the Australian society we want to be, the values underpinning such a vision, and the policy mix that will get us there. This would be a meaningful and purposeful dialogue which simply addresses how to manage the economy!