How good was all that revenue from the mining boom. Remember that? That lost golden age, when we happily swapped the Pilbara’s iron ore for Chinese rivers of gold. When we could sit back, made bets on how high the Aussie dollar would go, and then hop on to QF 1 for a London holiday. When Budget night was a lucky dip. If you were ‘aspirational’ enough, and ‘hard working’, Peter Costello would reward you with a tax-cut. Or perhaps a baby bonus. Or maybe a Family Tax Benefit.
Back then, pre GFC, politics was fun. Both Parties bent over backwards to assuage the anxiety of any voting bloc feeling blue about their job prospects, their home’s price, or their cost of living. Sure the political contest was furious: John Howard, Costello, Beazley, Latham, Rudd, Gillard – they weren’t shrinking violets. But their fights had happy endings. One side would say that some of the wealth generated by a once-in-a generation mining boom should be spent on Scheme A (say, a National Broadband Network); the other would argue for Scheme B (maybe, a new highway?) – but, in the end, something would get built. At least we’d get a tax cut.
That joy filled time ended on budget night. As soon as Joe Hockey lent his name to Treasury forecasts of structural budget deficits, he recanted the hitherto firm position of the Liberal Party that budget surpluses was only a change-of-government away. Both parties now acknowledge that the global financial crisis, an ageing population, a sustained high dollar, and the end of the production phase of the mining boom has major budgetary implications; namely, the cessation of the Commonwealth’s capacity to expand its subsidy of people’s living standards.
Although a fierce battle is being waged over the size of the so called ‘budget emergency’ (and who is most responsible), no Party is arguing for the mass expansion of Commonwealth outlays; not without equivalent savings offsets or revenue enhancements. The consensus is for budget consolidation. The fight now is over the terms. Who should be asked to sacrifice? Who can do more?
This is the politics of ‘austerity’, the polar opposite of the politics of ‘prosperity’. A tangle over the distribution of ‘burden’, not over the allocation of ‘benefit’. A contest in which the technocratic idiom of Treasury Officials and Economists masks the real choice being posed: will the systems of social solidarity built in the 20th century – systems like the aged pension, the disability pension, and universal healthcare – continue in the globalised economy of the 21st.
Underpinning this skirmish is tension over the type of sociology that will most enable Australian success under globalised conditions. The simple view of the Conservative parties is that the mere existence of open markets means, inevitably, an elite group of corporations and professionals that thrive on the world stage will emerge. Instead of being resented, the BHPs, the Rio Tintos, the Macquarie Banks and Gina Rineharts of Australia should be celebrated. Their success is corporate Australia’s contribution to everybody else’s welfare. Hence they should be freed from any social shackle that might tempt them to take flight to shores less demanding; shackles like the mining tax and carbon tax.
The Parties of the Left resist this worldview, although their resistance lacks the same level of coherence sported by the Right. Some Left-Wingers will tolerate the thesis of inequality if the resulting synthesis is opportunity: the chance for everybody, no matter their class or creed, to rise. Others are intolerant of inequality all together, and favour democratic means to correct the skews of income to those who don’t ‘deserve’ it. These tensions percolate inside the ALP. Expect them to percolate between the ALP and The Greens Party. Both are competing for mantle of being the most implacable opponent of austerity.
Also expect also a hardening of the public debate. In the UK, austerity politics was ushered in upon election of David Cameron’s Conservative/Liberal Democrat Government in 2010. Cameron framed austerity as a moral choice, with the public asked to decide if the claims of Left-Wing groups (like the public services’ claim for wage rises, and welfare recipients claims for benefit increases) was actually a claim for publicly-funded luxury. He sells austerity by drawing divisions between ‘strivers’ and ‘shirkers’, and between ‘hard working families’ and ‘welfare scroungers’. Labour Leader Ed Miliband retaliated by asking if the claims of Right-Wing groups (like Bankers) about the legitimacy of bonuses and high executive pay was actually a coded plea for the recognition of unearned privilege.
How will Parties win in these austere times? Advantage will go to the Party that first recognises people’s general attitude towards austerity: that it should be short and sharp, and it should end. Woe betide the Party that savages spending and hikes taxes for ideological reasons, with glee and without empathy. More woe on the Party that demands of everybody sacrifices befitting a ‘national emergency’, but then carves out special deals for their allies and supporters. Power to the Party that frames budget consolidation as the first episode in a serial about returning to growth. More power to the Party that’s plan for growth is canny and clever, and avoids trite debates like big state vs small state; instead framing the choice as between smart state and dumb state. Even more power to the Party that’s plans for growth is broad-based, inclusive, with the gains fairly shared. After all, QF 1 is a fine flight. People want to catch it. They just don’t want to worry about whether they’ll have a job when they return.