December 16th 2000


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Articles from this issue:

CANBERRA OBSERVED: Queensland Labor sinks in electoral rorts

POINT OF VIEW: A Christmas reflection

QUARANTINE: AQIS caught out in apple documents

WA POLITICS: WA election - can the Court Government survive?

VICTORIA: Bracks' fading honeymoon with voters?

SNOWY RIVER SCHEME: Snowy River diversion - Governments' hidden agenda

A History of North Melbourne C.B.C. Released

AGRICULTURE: Imports threaten $55 billion agricultural market

Letter: Medicare

CULTURE: Where to now in the Culture Wars?

Straws in the Wind

COMMENT: Mission possible? Restoring the Lucky Country

EUTHANASIA: Holland's death wish

THE MEDIA

Japan outlaws human reproductive cloning

Letter: The banks

Letter: The 'Reith Affair'

Letter: 1900 telephone sex lines

Letter: GST propaganda bill

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COMMENT:
Mission possible? Restoring the Lucky Country


by Bob Browning

News Weekly, December 16, 2000
Bob Browning looks at the reality of globalism, in the light of a new book, Rekindling the Flame, which critiques Australia's economic and trade policies of the last twenty years.

Hard yards still lie ahead of those trying to dent the global ascendancy of the special interests pushing economic rationalism.

But the task is not a mission impossible. We are now getting into the "long term" when policy makers assured us that the grand promises of neo-liberalism would come to pass. Disillusionment delivers the personal shock that unfortunately many require in order to think realistically about the fads and cons of the day.

Disillusionment may soon be felt more widely, even in the heartland of the Washington Consensus. The long lasting Wall St boom has encouraged the ideological triumphalism that followed the collapse of the Soviet empire and left the US the monopoly superpower.

But booms by definition come to an end. Unforeseen and unintended consequences can have the Goldfinger touch. The best laid plans of mice and men often go astray.

Global left-behinds can take heart from the final outcome of another powerfully-promoted international ideology. Remember how Stalin in his heyday arrogantly dismissed opposition from the Vatican with the sarcastic remark, "How many divisions has the Pope?" With equal hubris, Khruschev boasted to the West, "We will bury you". Whose names ended up on the tombstones of history?

Critics of the current neo-liberal orthodoxy also lack "divisions." They lack the corporation-funded think tanks around the world that refine arguments and spin for the economic rationalists.

They lack the support of major political parties that have become increasingly dependent on corporation funding. They even lack the support of their own governments. Although elected by their supposedly sovereign citizens, governments increasingly feel it is more important to earn the good opinion of investment managers and CEOs - mostly in other, richer countries.

The good will of the new financial and corporate elite is won by selling national assets to foreign corporations, by cutting company taxes, and by depleting citizen's social security to boost corporate welfare. Governments "privatise" the more lucrative of public services like healthcare, but this process is often more accurately described as corporatisation, or foreign corporatisation.

Another thing most critics of neo-liberalism lack is a body of economic theory that is as well-oiled as the neo-liberal think tanks. Ideas count. This is one reason why a local publication, Rekindling the Flame: A Blueprint for Australia ought to be welcomed and similar efforts encouraged.

The book is the result of three years of discussion by members of the Society for Australian Industry and Employment (SAIE), formerly known as the Society for Balanced Trade.

The principal authors of the book are Martin Feil, a former Industries Assistance Commission director; Ernest Rodeck, a former senior executive of Pacific Dunlop, AMCOR and TEAC Australia; Ken Aldred, a former senior Commonwealth official and Liberal MHR; and Pat Byrne, a researcher and national executive member of the National Civic Council (Byrne acknowedges the assistance of a former Deputy Secretary of the Commonwealth Department of Trade, Colin Teese). The book's Foreword is by former Victorian Liberal Premier Rupert Hamer.

Rekindling the Flame seeks to explain why Australia can no longer so readily boast of being the Lucky Country. It goes beyond criticism and diagnosis to put itself on the line by offering a Ten Point Plan, its shot at a proposed course of remedial action. It hopes to rally Australian government and industry to try to restore something of Australia's former quality of life to those whom globalisation has bypassed and downgraded.

The problems that most concern the Society's members are unemployment, family insecurity and the prospects and national pride of Australia's future generations. The SAIE sees Australia's structural weakness in its chronic trade deficit, its mounting foreign debt, the acquisition of the nation's prime businesses by foreign investors and the fact that government policy continues to allow this to happen.

Take Australia's manufacturing industry. The SAIE says it has declined so precipitously that critical mass is being lost in key sectors. Why? In the authors' view because: "[s]uccessive governments have slashed protection, done away with the Commonwealth Development Bank, contracted to the lowest bidder, and ceased giving preferential contracts to Australian companies. They have taken the view that Australia doesn't need an industry policy because in an efficient market with rational participants the market will always decide what Australia can and should produce."

Then there is Australia's agricultural industry. Economic rationalist lobbying convinced many farmers that if Australia led the rest of the world by dropping its assistance to agriculture, then other trading nations would obligingly follow suit. Such advocacy groups, according to SAIE, include successive Labor and Coalition governments, the Department of Foreign Affairs and Trade, Treasury and the National Farmers Federation. Farmers went along because they "had long felt that they were being neglected by governments concentrating on the metropolitan populations which held most of the votes.

"The farming lobby groups promoted the fact that tariffs increased the cost of farming inputs, such as tractors and other equipment [and] that farmers had to meet world prices for their output, while city dwellers enjoyed escalating wages, protected by tariff walls. Digressing to the present, farmers discovered to their dismay that the savings in equipment costs are more than offset by the lower income from domestic sales which are now at unprotected prices.

"Also the loss of industries in rural towns robs them and particularly the younger generation of very valuable jobs and support services such as banking."

The book illustrates the gulf between the ideological prescriptions and the reality of what major trading powers like Europe, the USA, and Japan are actually doing. With the possible exception of New Zealand, the SAIE concludes, no country other than Australia, has been as zealous in unilaterally implementing economic rationalist theory.

Other countries may have lowered some tariff barriers, but often only to replace them with less transparent, more onerous non-tariff barriers.

The current bi-party policy orthodoxy has produced a few economic bright spots like tourism and education (as a foreign currency-earning industry). But its downside is formidable and undeniable: "Instead of creating long term prosperity, stability and competition, it has created disparity in wealth, monopolies and oligopolies, and reduced competition in the wake of massive mergers. It hands power to the global corporations without passing compensatory powers to international authorities. This leaves citizens devoid of the care of the States."

Multinational corporations used to pay 45 percent of Company Taxes. Now, although they account for nearly a third of all the world's production, they pay a mere to 6 to 7 percent tax.

Going along with this process means governments of subordinate countries have to sell their citizens' public utilities, reduce expenditure on public infrastructure and welfare, and privatise/corporatise vital services like healthcare. As Rupert Hamer reminds us: "just reflect how much of our food manufacture, our electricity undertakings, even our trams, are now in foreign ownership."

The SAIE, however, is optimistic. It believes policy can change and be effective in restoring the balance. Its suggestions are thoughtful, practical and clearly and frankly stated. It deserves to be read and recommended.




























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