July 27th 2019


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Articles from this issue:

COVER STORY Fixing Australia: Can we trust the Morrison Government?

ENERGY Yallourn early closure more than a mere challenge, Mr Premier

CANBERRA OBSERVED Can Labor learn a lesson or is it unredeemable?

NATIONAL AFFAIRS High power prices lead to more deaths of elderly

GENDER POLITICS Catholic Ed's document strong on doctrine, weak on protocols

ENERGY Renewables do push up power price: Chicago economists

OBITUARY The eminence of Dr Joe Santamaria

HISTORY OF SCIENCE Faith and reason and Father Stanley Jaki, Part 6: Medieval Christendom sparks a revolution

ENVIRONMENT As many Pacific islands are rising as are sinking

ASIAN AFFAIRS Uyghurs lose in ethnic power play

POETRY AND HISTORY The epic of the White Horse

HUMOUR On patrol with Father Bruce

MUSIC Joao Gilberto: Carrier of melodies

CINEMA Crawl: Toothful entertainment

BOOK REVIEW America's postwar boom and its end

BOOK REVIEW The story of the drafting of a great document

BOOK REVIEW The facts behind an undying distortion

LETTERS

POETRY

FOREIGN AFFAIRS Boris Johnson and the EU: Crash through or just crash

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COVER STORY Fixing Australia: Can we trust the Morrison Government?

by Patrick J. Byrne

News Weekly, July 27, 2019

Deeply disaffected voters have indicated that unless there are new economic policies to restore the suffering middle class, Scott Morrison’s victory is no assurance that his Government will hold office after the next federal election.

Morrison’s success may have been unexpected, but it was not a landslide. The Coalition has only a wafer-thin majority (77 out of 151 seats), and the protest vote was huge. Over 25 per cent of voters did not vote for either Liberal or Labor in the House of Representatives, and 32 per cent voted against both major parties in the Senate.

The Organisation for Economic Cooperation and Development (OECD) has warned that the global middle class is shrinking. The cost of housing, education and health care has risen faster than the “dismal” income growth of the middle class.

Dr Christopher Sheil, a social historian at the University of New South Wales, says Australia’s middle class has shrunk 8 per cent, 1 per cent annually, since the global financial crisis (GFC) of 2009-10.

A generation must be
enabled to dream again.

Historically, affordable housing prices have averaged three times median household incomes, but the last Demographia housing affordability survey found that all of Australia’s five major housing markets are severely unaffordable at 6.9 times median household incomes.

On average, young people entering the workforce will have five changes of career and 17 job changes in their working life up to age 75, according to McCrindle research. As well, they face countless short-term work contracts.

The Government should also get real about unemployment. You are classified as unemployed only if you are working less than one paid hour per week and are actively looking for work. The Australian’s Adam Creighton has pointed out that the real unemployment rate is 23 per cent when it takes into account the unemployed, the under employed (those seeking more work), and the discouraged who have given up looking for work, at least for a time.

Rod Sims, head of the Australian Competition and Consumer Commission (ACCC), has launched a blistering attack on three decades of deregulation and privatisation. Together with radical free-trade policies, they have damaged the economy and disenfranchised a large proportion of the population.

Sims said he had been “a strong advocate for privatisation for … 30 years”.

Looking back, he says port privatisation had created monopolies without suitable regulation; billions have been wasted in scandals in the plague-filled vocational education sector; and deregulation of the electricity market and privatisation of pole and wires in Queensland and NSW has seen power prices almost double over five years.

“Exasperated”, Sims called on governments to “stop the privatisation”.

For many years, the argument was that it didn’t matter if Australia’s market reforms led to a decline of hard industries, manufacturing and agriculture, as Australia could become a service industry economy. Now, it is apparent that service sector industries – including financial and government services – are facing heavy jobs loss from the digital revolution.

Younger generations are particularly affected with less secure work, bigger entry costs into housing and limited saving mechanisms. They are being failed by governments that have adopted a hands-off approach to economic policies, even when markets have failed badly.

The shrinking, struggling middle class is behind growing political unrest and the rise of populist leaders and governments.

So, what does the Federal Government need to do to rebuild a middle-class, property-owning democracy? Here are some key policies.

  • Create a government-backed deve­lopment bank. It can build modern infrastructure that is the foundation of private enterprise and give Australians the best chance of harnessing the new advanced technologies of the fourth industrial revolution. It can also provide alternative banking services after the misconduct of the major banks exposed in the recent royal commission into banking. If the Government can back China’s Asian Infrastructure Investment Bank, nothing prevents it from creating a development bank for Australia.
  • The development bank could fund the building of new super-critical, coal-fired power plants to prevent looming power shortages and bring down the price of electricity. Without new, low-cost power, Australian industries will lose competitiveness on world markets. The election victory has given the Government a mandate for new energy policies.
  • Exempt agriculture from National Competition Policy and allow rural industries to rebuild single-desk marketing arrangements to balance market power with Australia’s highly concentrated supermarkets and gain marketing advantages into world markets.
  • Fix the disastrous water policies that are threating the collapse of irrigation-based industries, starting with dairy. The development bank could fund the building of new dams for irrigation, cities, industries and the environment.
  • Follow the lead of our Asia neighbours. Develop industry policies that put infrastructure and incentives in place for Australia to develop key hard industries, particularly those vital for national security. Hard industries are capital intensive, pay higher wages and, with modern technology, would be world competitive in higher-wage countries like Australia.

As seen around the world, if governments fail to provide for the basic needs of its workforce and families, the outcome is social and political unrest that threaten to undermine democracies.

Patrick J. Byrne is national president of the National Civic Council.




























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