Mr Abbott, in his 2013 book, Battlelines, wrote that in government he would balance social values with pragmatic policy for the common good of the country.
Yet one could be forgiven for thinking government policy is being driven by neoliberal ideologues, with a very heavy stress on policies of privatisation of public assets, sweeping deregulation (including in banking and finance), expanding free trade agreements (to the benefit of transnationals), and creating flexibility in labour markets (reducing wages and conditions).
Mr Hockey’s budget has created a toxic reaction to its astonishing unfairness to the most vulnerable groups, most notably the more than 600,000 unemployed, while doing nothing to wind back tax subsidies and other ‘entitlements’ for higher income groups. Election promises were broken like plates at a Greek wedding. Even many Liberal supporters were dismayed at the brazen effrontery of this.
Mr Abbott might reflect on his own words in Battlelines: Australians “rarely forgive a government that makes promises before an election to win votes, but abandons them afterwards to hold power”. (p xiii)
Many of the claims made in the 2014 budget speeches have been shown to be misleading or simply wrong (see John Legge The Age 29 April). Most contentious is the view that the economy was facing an economic crisis that justified severe cuts to the welfare sector.
Various leading economists have insisted there is no need for panic about Australia’s debt, which can be managed over time. Merrill Lynch chief economist, Saul Eslake, said it would involve serious risks to move too quickly. His views were supported by Chris Richardson of Deloitte Access Economics, Paul Bloxham, HSBC chief economist, and Kieran Davies, Barclays Australia chief economist. Michael Pascoe in The Age (20 June)called for the Treasurer to stop “scaring people with dire warnings of economic disaster unless the lower classes keep their place”. The economist, John Edwards, has outlined the way forward for Australia by increasing exports in services, farm products, and manufacturers (AFR 27 June).
The Coalition government appears to have gone out of its way to alienate and antagonise vast sections of the population, from pensioners to university students – State governments with the unprecedented withdrawal of $80 billion of funding for schools and hospitals, migrant communities (Senator Brandis’ right to bigotry views, and the $100,000 fee needed to bring parents to Australia), the Aboriginal constituencies, social welfare networks, lifting the pension age to 70, introducing co-payments for medical care, cutting $7.6 billion from overseas aid over five years, possibly to fund offshore detention centres, along with cuts to university funding and research organisations like the CSIRO. At least Clive Palmer has saved the renewable energy industry.
No wonder support for the Coalition has fallen so dramatically. Are these really the policies the Prime Minister wants? It is a far cry from what he wrote in Battlelines:
I’m a Liberal because our party has always stood for the decent, the humane and usually for the practical too… We know that without honesty there is no trust and without trust there is no fairness and without fairness civil society cannot long survive. (p19)
As everyone knows, the rich are becoming even richer, astronomically so at the top end, far beyond imagining in earlier ages. Nobel laureate and former chief economist at the World Bank, Joseph Stiglitz, captured the extent of extreme inequality in his Vanity Fair article of May 2011, “Of the 1%, by the 1%, for the 1%”, and chronicled in his books the corruption and mismanagement propelling the Global Financial Crisis. In his mind, the crisis is fundamentally a moral one, with the collapse of values into a free-market mindset as a relentless pursuit of wealth, without acknowledging that economies are meant to serve all human beings, not just the rich. In the United States, the real median income of full-time male workers is lower than it was 40 years ago. So much for ‘trickle-down’ economics.
The worst of it is, in Stiglitz’s view, that financial markets have not learned the lessons or changed their ways, and the GFC may well be repeated. Currently lecturing in Australia, Stiglitz draws on his extensive experience in international institutions to stress the need for adequate oversight of markets to ensure they do not fall prey to powerful sectional interests.
It would seem little has changed since Adam Smith warned two centuries ago about manipulation of markets by powerful business interests, as he campaigned to advance the living standards of the ordinary people as much as possible. Neoliberals, please read your Adam Smith.
Banking & finance: “fear versus greed”
The neoliberal problem has infected Australia. Though we escaped the worst of the financial contagion because of our better bank regulation, our four big banks earned over $27 billion last year, exceptionally high cash profits; and the enquiry into the Commonwealth Bank shows how badly ethical standards declined in recent years, possibly not only in the CBA.
The chairman of the Australian Securities and Investments Commission, Greg Metcraft, stressed the need for closer regulation by ASIC: “As a former investment banker, unfortunately it is fear versus greed” that is needed to police financial planning (AFR 28‑29 June). Thousands of Australians lost financially, some even their homes, because of misleading advice from CBA personnel. Yet financial interests have been pressuring the government to wind back Labor’s Future of Financial Advice laws introduced to protect investors against conflicting advice not in their best interest.
According to Philip Dorling (The Age 20 June), WikiLeaks documents show that the government is in secret negotiations aiming at radical deregulation of our banking and finance sectors, which could allow foreign banks to set up in Australia, undermining our ability to respond appropriately to financial crises.
The policies of the Abbott government are difficult to reconcile with the Christian convictions of many of its members, especially with church leaders, including Pope Francis, appealing for increased fairness and equity in economies, and prioritising the alleviation of poverty.
The budget has been a disaster for the Abbott government, and one hopes that its leaders move aside their neoliberal advisers in favour of sounder economists and the professional advice of seasoned public servants.