What price the public good when governing parties bow to markets?

A core problem for Treasurer Joe Hockey is that the public doesn’t share the Abbott government’s fervour for budget cuts and market policies. AAP/Mick Tsikas

The recent losses of first-term governments in Queensland and Victoria suggests that some of the assumed verities of political process are being challenged. These results and the rapid shifting legitimacy of the Abbott government suggest a more volatile and distrustful electorate, which is quick to express its displeasure.

Despite Australia avoiding the worst of the global financial crisis, the political climate here echoes aspects of changes in Europe, such as the victory of the Greek left coalition, the rise of left and right – but mainly right – populist parties in the UK, France and Germany, as well as the antics of the Tea Party in the US.

These developments all suggest that mainstream centrist parties’ economic emphases are struggling to engage voters as their policies are failing to respond effectively and acceptably to GFC-damaged market models. The electoral results confirm the rising deficits of trustworthiness in current democratic processes.

Major parties no longer command loyalty

The question is: why is the political climate so volatile? What triggers the types of revolts where voters rapidly lose faith in the usual governing parties?

A consistent trend is voter concerns about public spending cuts and economic priorities that promote markets as the means to cut “excessive” public costs.

These common issues tend to be either overlooked in media reports and political stances, or questioned as “opposition to reform”. The expressed concerns of voters are therefore not seen as legitimate.

Questions need to be asked about why there is little or no serious discussion on the relative roles of governments, markets and communities in delivering goods and services for the nation. The sale of public assets was clearly crucial to the Queensland results. It was raised by the ALP as the single biggest issue, yet, more broadly, the significance of this issue has not really been taken as serious.

Most of the big federal debates are on similar grounds: cuts that the ALP opposes but without seriously suggesting the alternatives to a market model. This lack of “choice” between basic agendas could be the reason that in recent elections voters have rejected the incumbents – rather than voting in the oppositions – and then voted out the next incumbents.

The federal debates on Medicare changes, university fees and deregulation, child care and welfare cuts show the gaps between the views of much of the general public and the political strategists of major parties. The latter assume people want to cut spending and self-manage their needs, so there is no suggestion of debating the benefits or otherwise of models of public versus private providers.

Similarly, there are no clear lines of policy on entitlements and who pays for what services in aged care, community care, early childhood and Indigenous communities, or on the eligibility and rationale for income support payments etc. The basic political assumption on offer is that cuts or higher fees – reform – are the way to go.

Developing a strategy to build policy and trust

Building trust in the electorate requires those seeking power and influence to take on serious debates on what the role of the public sector should be vis-a-vis the market. When is privatisation good and appropriate and when should public services be retained? What should be the different roles of government/public, communal/not-for-profit and/or private/for-profit services?

As citizens of one of the most affluent countries, how do we reassure voters they have access to resources for needs and unexpected crises?

These questions were once on the agenda but the neoliberal shifts have obscured the issues of what services we need to enhance social well-being and at what appropriate costs. We need to revisit the case, never proven, for shifting most public services over to markets and private providers over the past two decades. We need to address the following questions:

  • Who should fund/provide/pay for many social goods and services – for example, health, education, community services, child care, aged care and other support services?

  • How do we balance needs with ability to pay?

  • What are the appropriate roles of government as a funder and provider of non-market-driven services? How do we balance the economic and social costs, where these roles conflict?

  • When do we decide to use pooled resources (tax revenue) to provide the social infrastructure that is needed for collective well-being and social cohesion? What services and resources should be publicly provided and/or funded because they contribute to the public good?

  • What particular goods and services need subsidising because needs do not equate with ability to pay? Who should be eligible to use them?

  • Should there be charges for using such public services? If yes, for whom and under what circumstances? Should we means-test access?

  • What are the relative benefits for the wider community of collective risk-sharing or individual capacity to save and provide?

  • As a society, what social frameworks are needed to counter the inequalities and tensions that undermine cohesion and trust?

This type of assessment requires indicators that can value good social functioning, not just economic growth, as well as recognising long-term politico-cultural differences such as Australia’s traditional embedded social contract beliefs. Our history includes the first basic wage, the concept of a fair go and the public provisions of infrastructure and services. These are being undermined by individualised market models without real debate.

The threats of political distrust and instability

IMF chief Christine Lagarde has recognised that the flipside of rising inequality is growing public distrust and instability. AAP/Dave Hunt

The rise of neoliberal markets in the 1980s was a relatively unquestioned move for most Western democracies. The rise in wealth masked some of the problems of mal-distribution, but now even the International Monetary Fund is signalling concerns.

The long-term effect of market failures and the GFC is the current and growing voter distrust of traditional party-driven forms of government. This carries the risks that toxic populist movements, the danger of the 1930s, may reappear. Such populist movements rise when there is a disengaged population looking for leadership.

The signs of increasing political discontent are widespread as voters reject the increasingly problematic neo-liberal policies. Therefore, there is a manifest need to devise and promote the possibilities of alternative programs that retain the concept of making societies more ethical and civil, and encourage good social changes. Rebuilding trust in the legitimacy of democratic political forms will counter the disillusionment with current political incumbents and policies.

Then, maybe, we can retain or even enhance the possibilities for making societies more civil.


Other articles in The Conversation’s ongoing series, “New Politics”, can be read here.