Can governments plan Australia’s future just by improving selected economic indicators? Will a focus on creating more jobs, cutting taxes and growing GDP be enough to ensure well-being? These are the core agenda items being pushed by the Abbott government. Yet they may prove to be much too limited to be the main items for policy decisions about Australia’s future.
A recent summit on future policy needs, auspiced by The Australian Financial Review and The Australian newspapers, accepted these items as setting its main direction.
Although the summit discussed more than the government’s slogans of growth, tax changes and jobs, it failed to address the need for setting a broader agenda that deals with social cohesion and the need for increasing trust in the political system.
The above approaches assume any recognition of equity needs could only be achieved by post-hoc redistribution: after productivity gains were sufficient to provide the extra resources to be shared with the community.
The failure of markets
There are considerable problems with this approach. The clear assumption is that if the government gets the economic growth factors right, everything else will fall into place. This set of beliefs assume the materialism of voters will create political acceptance.
This was clearly highlighted in Treasurer Joe Hockey’s presentation to the summit about recognising the real sovereignty of consumers as potential drivers of growth. The pitch is clearly electorally driven by a widespread belief within major parties that approaching voters as consumers, via lower taxes and more wealth, will allow them to win and retain office.
This belief seriously undervalues voters’ capacities and beliefs. While an increasingly globalised market has led to increased GDP and net wealth over the past 30 years, all is not rosy.
The global financial crisis and current market sluggishness and irrationality show markets may not continue as main wealth creators. They face new risks from increasing inequality, climate change and domestic and international conflicts.
Trust in politics
Time may be running out for political agendas that offer material rewards but not social well-being. More evidence is emerging of continuing damage to social stability and cohesion. There is increased support for outlier parties, leaders and policies on both left and right – pushing populist social concerns – in Europe.
The over-emphasis in Australia on economic policies and market models could explain data that show signs of loss of trust in political processes and current major parties. Informal votes are rising and many young people are failing to enrol.
This year’s Lowy Institute poll recorded the lowest feeling of safety among Australians and a sharp decline in optimism about the nation’s economic performance. Meanwhile, the think-tank’s 2014 poll found that:
… only 60% of Australians, and just 42% of young Australians 18-29 years of age, believe that “democracy is preferable to any other kind of government”.
When asked later their reasons for not supporting democracy, the strongest responses were that “democracy is not working because there is no real difference between the policies of the major parties”, and that “democracy only serves the interests of a few and not the majority”.
A recent Essential Research poll asked voters which professions they trusted most and least. Politicians came in last – just 1% of voters had a lot of trust in politicians; 10% had some trust. And 49% said they had no trust at all in politicians. As political journalist Bernard Keane commented:
… any politician spruiking reform is coming from the difficult position that most voters don’t trust them or believe them before they even open their mouths.
Other evidence that the current mix of policies on offer fails to build public confidence was shown by the public rejection of many 2014 budget cuts as unfair. This showed a continuing belief in an Australian “fair-go” compact, which no-one in power is recognising by prioritising social policies that are seen as fair and trustworthy.
This sets up serious problems if some of the gloomy predictions come true and expected growth and profits fail to appear. Neither major party seems to have any plan B. Both assume that further equity, progress or stability will require increased GDP to fund them. This ignores serious needs to redistribute current resources fairly to retain social cohesion and good order.
Australians need policies that rebuild community trust and reassure voters that their quality of life does require collective goodwill, not just growing GDP. Good governance depends on citizenship and leadership as well as policies that meet public good/common good and fairness tests.
Perhaps we need a Social Policy Summit to revisit wider societal needs and reinstate public trustworthiness, so Australia can deal with coming policy difficulties as well as possibilities. Politicians need to gain approval from an electorate that doesn’t trust business any more than government.
Quite apart from its other benefits, we need to remember that good societies with secure public systems will increase investment much faster than company or personal tax cuts.