Introduction
This article argues, using Australia as a case study, that in retreating from their foundational values of equality, democracy and social solidarity, social democratic parties have undermined the basis for their own popular support. In offering a compelling discourse analysis of the policy positions of Australian Labor Party (ALP) leaders, Kevin Rudd and Julia Gillard between 2007 and 2013, vis-à-vis ALP tradition, Reference JohnsonJohnson (2011a: 562, 579) poses a crucial question: If there are no significant problems with relying on markets, then why does Australia need a social democratic party? A similar, if more pointed, question was put to the German Social Democrats by Reference BlythBlyth (2013) when he accepted an award for his landmark work on fiscal austerity : ‘If all you are doing is attempting to shadow the Christian Democratic Union, why should anyone vote for you at all’ (Reference BlythBlyth, 2015)? These and related questions have been posed in a context in which there is increasing recognition that capitalism has transformed nominally social democratic parties more than the other way around (Reference GlynGlyn, 2001; Reference JudtJudt, 2010; Reference LavelleLavelle, 2008; Reference MairMair, 2009; Reference MoschanasMoschanas, 2002; Reference ScottScott, 2000; Reference ShawShaw, 2007; Reference StreeckStreeck, 2014; Reference WoodWood, 2010).
Common to all definitions of neoliberalism is its affirmation of the superior efficacy of self-regulated or ‘free’ markets over government intervention. Policy positions following from this stance include privatisation and a more general reduction of public provision, a preference for reduction of taxation and public expenditure, the elevation of inflation targeting over full employment and a restriction of government regulation. Class-based analyses of neoliberalism focus on policies that privilege the interests of capital by reducing trade union power, increasing the degree of employer prerogative, eradicating the commons and resisting or removing accountability measures that might otherwise allow scrutiny of the decisions of those holding executive management positions. These aspects of neoliberalism are necessary components in any effective definition, but one can go further: Neoliberalisation in its implementation is an anti-democratic project. It is an agenda to depoliticise politics, placing policy in the hands of technical experts or the hidden hand of the market and beyond the scrutiny of public debate. This extended definition is able to account for the disjuncture between neoliberal ideology and neoliberal policy practice, to which some writers have drawn attention (Reference Brenner and TheodoreBrenner and Theodore, 2002; Reference CahillCahill, 2007; Reference HarveyHarvey, 2005; Reference Peck and TickellPeck and Tickell, 2002). The capacity of neoliberal actors to appear to change course using technicist rationales is part of the explanation for the hegemony of neoliberalism (Reference CahillCahill, 2010; Reference Peck, Theodore, Brenner, Cahill, Edwards and StilwellPeck et al., 2012).
It is the project of depoliticisation that makes it hard to pin down the cause-and-effect relationships linking neoliberalism to societal problems. This is because depoliticisation constructs a policy framework in which neoliberal actors remain unaccountable. Reference BurnhamBurnham (2001) defines depoliticisation as placing ‘at one remove the politically contested character of decision-making’. Working from this definition need not require the attribution of a conspiratorial or sinister motive to political actors; indeed, as Reference Higgins and DowHiggins and Dow (2013: 382) argue, there may be greater explanatory potential in focusing on the degree to which political actors have become convinced that certain important ideas are simply no longer possible to be considered. It is in this sense that depoliticisation is at the heart of the social democratic crisis.
While several definitions of social democracy are available, we adopt Polanyi’s notion of the struggle to transcend the self-regulating market by consciously subordinating it to a democratic society (Reference Block and SommersBlock and Sommers, 2014; Reference PolanyiPolanyi, 1957[1944]: 234). This definition is helpful for several reasons. First, it is counter-posed against two of the central aspects of neoliberalism, the latter’s ostensible insistence on the self-regulating market and (what is asserted here to be) its anti-democratic tendency. Second, the definition is sufficiently generic to accommodate various traditions of social democracy but is still clearly bounded in analytical terms. Third, implicit in the definition, especially when viewed in the light of the Polanyian tradition, is the espousal of a positive meaning of politics and politicisation. Contra neoliberalism, social democracy in these terms is Aristotelian in its approach (i.e. society precedes the economy), and is best equipped to counter neoliberal precepts and policies. A Polanyian approach exposes the misconception that neoliberalism brings a reduction of government power, showing rather that such power has become less accountable, and that neoliberal claims of deregulation instead entail a high degree of reregulation and control.
Examining the relationship between neoliberalism and a political party that claims to be social democratic raises a number of questions, even for a social democratic party with a goal of no more than welfarism and some redistribution of income and wealth. How much of the policy agenda of a social democratic party – in this case the ALP – is set by the terms and presuppositions of neoliberalism? In light of the most serious economic crisis in 80 years, and in light of that crisis being caused by neoliberal policies (Reference CrouchCrouch, 2011; Reference PalleyPalley, 2010), how is it the ALP found itself unable to gain considerable political traction as an alternative?
The policy examples that follow demonstrate the programmatic hold of neoliberalism. Even, or especially, when the ALP attempted to devise some progressive policies – the mining tax, the response to the global crisis, increases to public funding of schools – it will be demonstrated how the Party constrained itself to neoliberal thought. Its formulation of these policies is at least as revealing as its adoption of policies that are more obviously neoliberal.
The argument is made in six stages: The section ‘Early signs of Labor’s neoliberal constraints’ briefly identifies the depoliticised constraints originally forged by national Labor governments between 1983 and 1996, and argues that, during its time out of office between 1996 and 2007 the ALP failed to develop a coherent policy alternative to the liberal-conservative government’s anti-collectivist agenda. Next, ‘“No narrative?” – absence of a social democratic program’ provides an analytical documentation of the ALP’s accommodation to neoliberalism in the months before and after it swept to power in November 2007 in the wake of popular resistance to neoliberal erosions of previous gains. This section traces subsequent failures in areas ranging from governance to climate policy to early neoliberal accommodations. The section ‘The response to the global crisis and its aftermath’ argues that the incoming Labor government in 2007 had no coherent alternative narrative, despite the symbolic significance of its apology for systemic damage to the lives of Indigenous people. Next, ‘Other examples of neoliberal constraints’ examines the neoliberal policy constraints that undermined the apparently Keynesian elements of Labor’s response to the global financial crisis and subsequent economic management policies. Section ‘Some progressive initiatives?’ analyses the limitations of some of its progressive social policy initiatives and the regressive nature of others. The conclusion argues that until there is a repoliticised contest over ideas that neoliberalism has made hegemonic, social democratic parties are constrained from reducing inequality and are democratic in name only.
Early signs of Labor’s neoliberal constraints
Although not fully documented here, the ALP’s shift away from social democracy and towards neoliberalism began in the 1980s, when its overall policy direction significantly weakened any commitment to its former socialisation objective (Reference BattinBattin, 1997; Reference MaddoxMaddox, 1989; Reference Maddox and BattinMaddox and Battin, 1991). Between 1983 and 1996, Labor governments adopted a succession of eight ‘Accords’ with the union movement. The first of these was designed to foster industry growth and the social wage in exchange for wage restraint. But by the run-up to the December 1984 election, the ALP established a policy framework dubbed ‘the trilogy’. Described by Reference StilwellStilwell (1986) as a ‘self-imposed fiscal straitjacket’ (p. 15), it bound the government to no increase in taxation, public spending or the size of the budget deficit as a percentage of gross domestic product. The trilogy was a framework of rules that depoliticised fiscal policy, placing it in a technocratic sphere beyond the reach of democratic debate. Furthermore, between 1991 and 1993, Labor and the stronger unions presided over the regulated decentralisation of industrial relations (IR) practice to enterprise-level productivity bargaining, eroding support for any solidaristic mitigation of wage dispersion (Reference Briggs and BuchananBriggs and Buchanan, 2000).
Labor’s 1993 legislative facilitation of collective agreement making at enterprise level paved the way, when the conservative Liberal/National government came to power in 1996, for the Workplace Relations Act (1996). To the extent that could be achieved without a Senate majority, the object of this legislation was to privilege individual employer–employee negotiations and non-union agreement making over collective bargaining. Once the Liberal/National government gained a Senate majority, its 2005 Workchoices amendments further restricted union workplace activity and placed additional limitations on workers’ capacity to organise in defence of employment conditions and job security, and even went so far as to place restrictions on employers’ freedom to agree to certain favourable conditions (Workplace Relations Amendment (Workchoices) Act, 2005). It was the most radical IR legislation in Australian history.
In opposition between 1996 and 2007, Labor’s response to this erosion of collective organisation and of other aspects of social welfare was to adopt ‘small-target’ strategies, appearing unwilling to initiate a move away from neoliberal convergence. Arguably, ALP oppositions between 1996 and 2007 failed to appreciate the crucial role of political opposition in a democracy (Reference MaddoxMaddox, 2005). It was unprecedented community mobilisation (the YourRights@Work campaign) during 2006 and 2007 by various social movements, including of course the labour movement, that raised public expectation that workplace rights would be restored once Labor was elected (Reference MuirMuir, 2008; Reference Muir and PeetzMuir and Peetz, 2010; Reference Spies-Butcher and WilsonSpies-Butcher and Wilson, 2008).
Even before the ALP’s election in November 2007, however, there were signs that its leadership was not about to challenge the precepts of neoliberalism. The clearest example was the degree and speed, from May to August 2007, of the leadership’s back-pedalling over IR policy.
From late April 2007, when the ALP announced its IR policy as part of its platform, the party’s leadership began retreating from the task of fully reversing the effects of the Workchoices legislation. Whether or not by design, in the lead-up to the 2007 election, the Rudd–Gillard leadership gave focus in the IR debate to a narrow range of issues – such as individually based Australian Workplace Agreements, penalty rates, overtime and unfair dismissal. Receiving far less attention were matters, such as job security, casualisation, the right to take industrial action, the share of wages and profits in national income, checks on managerial prerogative, the diminishing role of the industrial tribunal, the freedom of unions to pattern bargain, the role of unions as the direct representative of workers, let alone the potential fragmentation of organised labour created by enterprise bargaining itself. The release of the ALP’s ‘Forward with Fairness’ policy on 28 August 2007 signalled the leadership’s retreat from any scrapping of the basic Workchoices framework (Reference Buchanan, Oliver, Miller and OrchardBuchanan and Oliver, 2014: 107).
This revision of IR policy between May and August 2007 was an early sign that the ALP leadership was willing to detach itself from the wider movement that had been integral to the ALP’s rise in electability. Indeed, there is some evidence that the leadership and senior figures held a view that community groups’ mobilisation played little or no decisive part in the ALP’s victory. In due course, it emerged that IR under these prime ministers did not involve any centralised repoliticisation of the settling of capital–labour disputes. Despite hopes that the Fair Work Act (2009) would usher in a new regime of good-faith workplace relations, support for collective bargaining, vulnerable workers’ access to enforceable labour rights, and mechanisms for employee participation and voice remained weak, particularly in small workplaces (Reference Barnes and LaffertyBarnes and Lafferty, 2010).
IR was just one area where the ALP’s timidity in confronting certain business interests was apparent. This timidity was by no means confined to Rudd and Gillard (Reference Davis and GarnautDavis and Garnaut, 2007). Two areas in which Labor has traditionally enjoyed a public perception of its policy superiority over the Liberal–National Coalition are education and health. In the lead-up to the 2007 election, the gap between the parties in these policy areas was reduced by the decision of the ALP leadership to match – almost – the Coalition’s promised AUD34 billion tax cut with one of AUD31 billion. Rudd’s declaration at the ALP’s 2007 campaign launch that he himself was a ‘fiscal conservative’, and that ‘this [the Coalition’s] kind of reckless spending has to stop’ surrendered the opportunity to place a social democratic stamp on the matter of public expenditure (Reference RobertsonRobertson, 2007). A quite different message could have been sent about the prudent stewardship of resources if Labor had not entered this bidding game, especially since the polls were pointing to certain Labor victory. After all, the cost of the ALP’s spending commitments, at AUD2.3 billion, was a quarter of the Coalition’s. It could have focused instead on the Coalition’s proposal to squander public money by providing tax cuts at a time when services were wanting and when so much potential existed for building state capacity.
Earlier, in October 2006, when international opinion was shaped by the review into climate change led by Nicholas Stern and its subsequent report (Reference SternStern, 2006), conditions had objectively changed to Labor’s advantage but owed little to Labor’s efforts to alter the terms of policy, much less philosophical, debate. Indeed, Reference ChubbChubb (2014) argues that lack of early interest or enthusiasm for this issue across the cabinet underlay the tragic negotiating and policy implosion that followed Rudd’s failure at the December 2009 Copenhagen summit.
One further early sign that Labor would impound itself with neoliberal precepts was that prior to the 2007 election, Rudd announced that he would choose the ministry, rejecting the Labor tradition of the caucus exercising its collective role as elector of the executive. As it happened, the failure of the caucus to assert a democratic role for itself had profound implications in light of Rudd’s subsequent dysfunction as leader. Importantly, his deputy Gillard had also, in a March 2006 speech to the Sydney Institute, argued that despite the validity of peer election of ministers as a long-term principle, in the short term the leader should make the selection as a pragmatic counter to factionalism (Reference GillardGillard, 2006). What Rudd and Gillard were deriding as old politics was more fundamentally a democratic tradition. Similarly, the later discarding of cabinet government would prevent a properly considered challenge to Rudd’s style when matters came to grief in 2009 and 2010.
‘No narrative’? – absence of a social democratic programme
Soon after the 2007 election, journalists and some academics were observing that the new government was in need of a narrative (Reference BurchellBurchell, 2008; Reference KeaneKeane, 2008). After Prime Minister Reference RuddRudd’s (2008) momentous national apology to the stolen generations (generations of Indigenous people who had been forcibly removed from their families) as his first parliamentary initiative in February 2008, the new Labor government struggled to articulate a clear direction. Its 2020 ‘Summit’, announced in February 2008, tended to reinforce an image of the Rudd government as being without a coherent medium- to long-term programme. This 1000-member convention comprised 10 working groups on issues. Each was co-chaired by a government member and 1 of the 11-member steering committee, seen as experts or community representatives (a former National party leader chaired the Rural Australia committee and a former chair of the Australian Bankers’ Association chaired the Economy committee). The steering committee played a key role in selecting the other participants (Commonwealth of Australia, 2008). The ‘Summit’ was a top-down exercise in consensus building, with no lasting community base.
The response to the global crisis and its aftermath
For some writers, the Rudd government’s handling of the global financial crisis marks a clear departure from neoliberalism; for this reason, this aspect of the Rudd government should receive close analysis. Certainly, Rudd attempted to place considerable distance between the ALP and neoliberalism in an essay (Reference RuddRudd, 2009a) that made a significant impact on public debate at the time. He introduced a Keynesian perspective, and received plaudits for it from progressives and disinterested observers (Reference BakerBaker, 2009; Reference HobsbawmHobsbawm, 2009). Nevertheless, Rudd’s essay avoided critique of the broader neoliberal agenda: privatisation, ‘deregulation’ of the labour market and increased employer prerogative, the financial liberalisation of the 1980s, commercialisation of higher education and other hitherto public entities, growing inequality since 1980, preferential tax treatment of wealth and high incomes, and the contradictory growth of regressive government expenditures alongside the continual thwarting of useful government expenditure. Such a critique would have involved repudiating the ALP’s recent embrace of neoliberalism under Hawke, Keating and the Labor oppositions facing the Howard Coalition governments (Reference CahillCahill, 2009: 15; Reference ManneManne, 2009: 24).
In crucial respects, the handling of the global financial crisis and of the subsequent economic slowdown by the Rudd and Gillard governments reveals a significant degree of policy prescription that was inconsistent with a social democratic stance. In addressing the immediate and impending effects of the recession itself, the government’s response has been seen by respected figures (Reference StiglitzStiglitz, 2010) as highly effective. Although criticism is certainly possible that an alternative spending programme would have delivered more jobs and much greater fairness to the unemployed (The Australia Institute, 2009), broadly the response was evaluated by disinterested observers as a success in its stated terms. At a deeper level, however, the response of the Rudd government, and more particularly the Gillard government, was a case of working within the parameters of neoliberalism, when it might have been an opportunity to shed neoliberal constraints.
Policy settings before the crisis
Importantly, the degree to which neoliberal ideas would constrain the Rudd government was visible before the full effects of the global crisis were apparent. The May 2008 Budget articles set out the following fiscal objectives of the government:
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• Achieving budget surpluses, on average, over the medium term;
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• Keeping taxation as a share of GDP, on average, below the level for 2007–2008;
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• Improving the government’s net financial worth over the medium term (Commonwealth Government, 2008).
The first of these objectives contradicted Keynesian strategy to deal with recession, while the second was at least potentially at odds with such a strategy, and certainly inconsistent with a broader social democratic stance. The Budget paper went on to forecast real government spending to grow by 1.1% in 2008–2009, the lowest rate of growth in 9 years. On public spending, a social democratic departure from neoliberalism would still have been conceivable if the government had been willing to use the global crisis to alter significantly the composition of taxing and spending, for example, by reducing the magnitude of the more wasteful and inequitable of taxation expenditures. It is possible to defend a deficit while at the same time arguing for increased taxation. A deficit (the shortfall a community owes to itself over a period of time) ought to finance capital investment (which brings medium- to long-term benefit), while increased taxation, if the burden does not fall in such a way as to curtail demand, is to be preferred in financing recurrent spending.
Policy response to the crisis
The objectives of the government’s longer-term strategy were not, however, changed in light of the global recession. The word ‘deficit’ was avoided (Reference MartinMartin, 2008). Countercyclical measures, advocated to avoid a rise in unemployment, were justified only as a means of returning to the pre-recession status quo, with a focus on reducing reliance on private and corporate debt (Reference RuddRudd, 2009b). Footnote 1 However, both unemployment and underemployment worsened, particularly the latter. The labour underutilisation rate increased from 9.5% (just prior to the global recession) to 12.1% in early 2011 (Australian Bureau of Statistics (ABS), 2011; ABS, 2012a), while Treasurer Wayne Swan was insisting on the need to return to surplus. Although the Rudd and Gillard governments averted the cruel outcomes likely to have resulted from the policy settings of a Coalition government, they simply restored the previous neoliberal labour market settings.
Central to a social democratic stance (and crucial in an authentic application of Keynesian fiscal policy claiming to be in accordance with it) is to establish full employment as the fixed point of reference in gearing fiscal policy as either expansionary or contractionary. This is the minimum required to break from neoliberalism, Footnote 2 but it was never adopted before the crisis, during the recession, or when Swan was arguing for a return to surplus. The Budget of 2010–2011, for instance, provided no new money. Government spending, which was at 26.2% of GDP at the end of the 2009–2010 financial year, was forecast to fall to 23.6% in 2013–2014. The 2010 Budget Statement announced that a surplus would be achieved in 2012–2013, ‘three years earlier than previously expected’. Mimicking the redefinition used by mainstream macroeconomists over the previous 30 years, Wayne Swan defined the unemployment rate of 4.75% predicted for 2012 as constituting ‘full employment’ (Australian Government, 2010).
In economic terms, the government confined itself to a concern about the output gap, or with aggregate demand, terms that have become the lexicon of New Keynesian thinking. Footnote 3 These are not the terms of post-Keynesianism, which is more aligned to social democratic thought. Post-Keynesians emphasise addressing the labour demand or employment gap, which in turn is based on stimulating effective demand. The authentically Keynesian approach proceeds from targeting demand to those in need of employment; the level of growth or output increase is a by-product. The distribution of demand is at least as important as the size of the stimulus.
Following the June 2010 G20 meeting in Toronto, Treasurer Swan adopted a stance consistent with the ‘fiscal consolidation’ imperatives outlined there. This stance coincided with the installation of Gillard as prime minister and her promise in the 2010 election campaign not to introduce a carbon tax. This promise arose in the vacuum created by the ALP’s decision not to take a policy to the people (Reference Walter, Uhr and WalkerWalter, 2014: 47). It is this context that provides the proper framework for analysing Swan’s early Reference Swan2011 Fabian essay ‘Keynesians in the Recovery’ (Reference SwanSwan, 2011). In this essay, Swan expressed no aim to reduce unemployment below the inherited rate, let alone to eliminate it. Seen against a narrow set of criteria – policy formation and execution to avoid considerably higher unemployment – Swan’s approach can be seen as at first a success. But seen against the bigger picture of changing a programme or altering a paradigm by using an economic shock to pursue a significantly different political economy, the Rudd and Gillard governments failed to deviate from a neoliberal path.
One employment-related policy area concerns industry policy, which received fleeting mention from Rudd in the run-up to the 2007 election. In analysing a central and indicative outcome of the government’s stance towards industry policy, Reference HampsonHampson (2012: 40) makes the point that industry policy is inherently political because it goes to the partial control of investment. Reference HampsonHampson’s (2012) assessment of the report by the prime minister’s manufacturing task force is that it worked within, but did not challenge, a policy culture that ‘emphasises market solutions [and] consigns interventionist solutions to the underground’ (p. 50). As reluctant to break with neoliberal orthodoxy as it was, the review of the task force was still willing to recommend the possibility of a sovereign wealth fund, but even this was turned down by Gillard.
The political problems the Labor government encountered after 2011 when it did not return a surplus were partly self-imposed. It argued for budget surpluses while there were still significant numbers of people unemployed and underemployed. Failure to break from the precepts of neoliberalism imposed a further constraint later on when full-time jobs were being lost and only partially mitigated by part-time job growth. The employment-to-population ratio deteriorated after November 2010, until the government’s defeat in 2013 (ABS, 2012b; ABS, 2013). The limited policy responses to the global recession had exacerbated a pre-existing problem of labour underutilisation.
Home insulation programme
Following the workplace deaths of four young men in the summer of 2009–2010, the Home Insulation Programme (HIP), commenced in 2009 as part of the government’s fiscal stimulus, came under sustained attack from the Coalition and hostile sections of the media. In addition to the matter of the deaths themselves, the HIP was attacked for its shambolic design and implementation. Claims about the disordered and disastrous HIP were, however, often inaccurate (Reference TiffenTiffen, 2010a), even reckless. The pervasiveness of neoliberalism was evident in the ALP’s inability to deflect the attack. Despite the government’s having designed the programme to avoid accountability for any consequences – or because of this – it was held responsible. The government was unable to point to shoddy work practices and the breaches of health and safety regulation because it had designed the programme to avoid any responsibility (Reference ParkerParker, 2013). As Reference JudtJudt (2010) has argued, one of the paradoxes of neoliberalism – which nominally social democratic parties are slow to comprehend – is that people tend to hold governments accountable for any government programme, regardless of the attempts to transfer or outsource liability and risk. In any case, Labor had no philosophical toolkit to develop a language designed to frame its response in a way consistent with social democratic principles.
Other examples of neoliberal constraints
Education funding
In some ways, the clearest example of the ALP’s attitude towards the public realm under Rudd and Gillard was Gillard’s attempt to dissolve the difference between public and private in a debate about schools’ funding initiated by the new government in 2008. In May, July and August 2008, Gillard characterised social democratic arguments about the public realm as ‘old progressive assumptions’ (Reference GillardGillard, 2008a), ‘a sterile debate about public versus private’ and a debate conducted through ‘the prism of the public/private divide (Reference GillardGillard, 2008b), and as ‘yesterday’s debates’ (Reference GillardGillard, 2008c). Since all schools receive some Commonwealth funding, she suggested, all were in a sense public, and the debate about public versus private was part of ‘old politics’ (Reference GillardGillard, 2008c).
The language of the education funding ‘debate’ is critical. Rather than systemic inequity or inequality, terms such as ‘pockets of poverty’ are chosen. The term ‘inclusiveness’ misleadingly suggests, as Reference ConnellConnell (2013: 282–283) has argued, that there is an ‘aberrant minority at the bottom of a broadly equal majority’ (p. 283), and so disguises societal inequity, and thereby depoliticises the issue. As Reference AshboltAshbolt (2010/2011) has argued, social inclusion displaces equality as a guiding beacon of progress, and hides the fact that exclusionist policies continue (p. 40). Indeed, the language of social inclusion prevents a discussion of equality. The most that neoliberalism will allow is a discussion of disadvantage but never advantage, institutionalised privilege or exploitation (Reference ConnellConnell, 2013: 283). All this occurs in the context of increased marketisation, in which losers have only themselves to blame for poor choices. The tendency of the government to expunge social democratic conceptual apparatus resulted in, at times, awkward if not asinine language: ‘fair distribution of opportunity’ rather than the distribution and redistribution of income, wealth or public resources.
Gillard’s stipulation on the panel charged with the review process (the Gonski panel) that no school should be made financially worse off necessitated a much larger expenditure of public money than would otherwise have been recommended. When the recommendations of the Gonski panel were released in February 2012, the Gillard government delayed its response for several months, suggesting that it was ill-prepared to fund such a large expense. When the government did respond in September 2012, it announced that the new funding would be phased in over 6 years and would not commence until 2014. The federal government, furthermore, would contribute just 30% of the funding. Moreover, in April 2013 the government announced AUD2.3 billion would be taken from university funding to pay for part of the extra allocation under the school funding changes.
The mining tax and the national broadband network
Similarly, the failure in 2010 to impose a higher levy on ‘super profits’ of mining companies was remarkable, given the long-standing existence of royalties in Australia, the familiarity of the ALP with arguments for resource rent taxes (Reference Hayden, Evans and ReevesHayden, 1982: 4; Reference Langmore and QuigginLangmore and Quiggin, 1994; Reference StrettonStretton, 1976) and the support that official channels (including the Treasury) were willing to give to a uniform tax. Part of the problem was again that Labor under Rudd and Gillard lacked the conceptual tools to frame a debate on social democratic grounds or to institute a national discussion of what the revenue would mean in practical terms. The ALP lacked the linguistic tools to draw the public’s attention to the enormous rents captured by mining companies. But the primary cause is likely to have been ideological. The ALP was not prepared to fight for the tax. Footnote 4 Labor appeared to lack a conceptual framework to consider how an effective mining tax could have alleviated the problems of a two-speed economy, providing capacity to shape a more functional political economy. In any case, a social movement battle waged in support of the mining tax was most unlikely, given the way Rudd and Gillard had detached themselves from the labour movement over IR policy.
New Information Technology presented a further area of policy difference between the ALP and the Coalition. Reference JohnsonJohnson (2011b) has demonstrated this difference and has argued that Rudd distanced Labor from the Hawke–Keating–Latham admiration of market solutions. Johnson is accurate to point to Rudd and the then shadow minister Stephen Conroy’s argument for the ALP’s policy stance in terms of ‘market failure’ (Reference JohnsonJohnson, 2011b: 3, 4, 8, 11, 12, 13) but at another level that also points to the prevalence of neoliberalism. Reliance on notions of ‘market failure’ only reinforces the idea that markets normally work efficiently and neutrally, and that, apart from relatively few exceptions, they are not in need of institutional intervention. This view essentially depoliticises markets. And, as Reference JohnsonJohnson (2011b) acknowledges, it remains the fact that Labor intended to privatise the broadband network in due course (pp. 12, 15). What has received less attention is the degree to which the ALP had lost the language of public provision, and it was this aspect that later caused the ALP to founder, not just with regard to the National Broadband Network (NBN) but more generally.
Some progressive initiatives?
To claim the ALP government was tied to neoliberal strictures is not to say that progressive initiatives were not pursued. Between 2009 and 2013, some progressive changes were made. An example was the Gillard government’s support for an application from the relevant unions to the industrial tribunal Fair Work Australia, for equal remuneration orders for the low-paid and feminised workforce in the social, community and disability sector. The case, which ran from 2010 to 2012, was argued under the Equal Remuneration Principle of the Fair Work Act (2009) and overturned the legacy of the 2005 Workchoices legislation, which had effectively stymied pay equity claims. Footnote 5 The case, based on a claim of historical gender-based undervaluation, led to wage increases of between 19% and 41%. The magnitude of these increases was feasible because the Gillard government had agreed to fund them. Nevertheless, the government submission to the tribunal argued the need to phase the increases over a lengthy time period in order to take account of the imperative to return to a budget surplus (Reference Scott and SkulleyScott and Skulley, 2010). Moreover, a fundamental point remains. Low wages in the sector had been exacerbated by neoliberal institutions. Allebone (2011: 12) argues that the pursuit, since the mid-1990s, of national competition policy and privatisation of social services was linked to employment insecurity and deunionisation, exacerbating the structural erosion of capacity to attain pay improvements in the sector. Decentralised enterprise-based bargaining made comparative wage justice almost impossible to pursue (Reference Sawer and YeatmanSawer, 2015), and high work intensity in service occupations meant workers had little or nothing to trade for real wage increases.
Other progressive measures pursued by Labor included the compulsory plain packaging of tobacco products, although, notably, this did not involve raising or spending (sizable) public money. Further on the public health front, in the 2011 budget, AUD1.5b of new money was allocated to mental health, a critical measure.
A tax forum in early October 2011 resulted in a proposal to increase the tax-free threshold, benefitting low-income groups. The proposal, later becoming policy, was connected with the politics of introducing a carbon tax, as a means of compensating people on low incomes. But beyond the carbon tax, the government showed little interest in articulating a coherent programme for financing such initiatives. Even journalists given to claiming the advantages of a broadly neoliberal framework (Reference HartcherHartcher, 2011) were nonplussed at the Gillard government’s lack of appetite for lifting the overall tax level or arguing for a fairer regime. Apart from the increase to the threshold, the tax forum sank almost without trace.
In what is arguably the most progressive policy in the period 2007–2013, the National Disability Insurance Scheme (NDIS), we gain an insight into the dysfunction that was at the centre of much of the Rudd–Gillard period. When the NDIS was announced in mid-2012 (Reference BuckmasterBuckmaster, 2013), it did not contain details about funding or who would be covered, an omission that caused uncertainty among some state governments (the service providers) about the degree to which they should cooperate. The announcement was symptomatic of the Rudd–Gillard years. Useful or progressive policies were introduced with little awareness of political context. Such an awareness was essential to negotiating power: The government appeared to assume that policies would be received on their merits.
In the absence of real policy alternatives to neoliberalism, the Labor government was somewhat prone to engaging in politicking without policies. In contrast, on the occasions when it had progressive policies to offer, Labor proceeded with little social democratic notion of politics. An example was legislation dealing with media regulation in 2013 (Parliament of Australia, 2013) that was too little in terms of what its supporters would have been looking for and poorly timed in terms of its opponents’ tactics. This ‘tin ear’ critique can be applied to regressive policies as well. The Carbon Emissions Reduction Scheme was framed as a neoliberal market ‘solution’, while the parliamentary politics were founded on politicking – designed either to ‘wedge’ the opposition leader Malcolm Turnbull (Reference TiffenTiffen, 2010b) or (depending on the viewpoint) to obtain his support (Reference WoodleyWoodley, 2009). And, of course, the wider politics were based on the support of carbon polluters.
Other policies, such as the targeting of single-parent carers of children (from the second half of 2012) by stripping the carer’s allowance, were highly regressive and flowed from the government’s fetish with returning the budget to surplus. At the same time, the social and political bias of this measure was revealed in the contradictory policy proposal to cut company tax.
Conclusion
A focus on the chaos of the Rudd–Gillard rivalry may have obscured the more significant matter, in the period 2007–2013, of the ideological direction of the ALP. It has been argued here that policy directions in this period did not depart from a neoliberal framework, notwithstanding some progressive initiatives like the NDIS. On other policy fronts, where the ALP presented itself as progressive, it often justified its stance in neoliberal terms. Even on the NBN, where it clearly was distinguishable from the Coalition, it lost the language of public ownership. Indeed, Gillard emphasised the NBN as continuation of the competitive ‘reform’ agenda of Hawke and Keating (Reference JohnsonJohnson, 2011a: 569).
Treasurer Swan exaggerated the Keynesian elements of the fiscal stimulus. He showed little understanding that authentic Keynesianism calls for government stimulus through the manipulation of effective demand via public works and for that process to be on-going. Hence, his notion that ‘if you are Keynesian in the recession you have to be Keynesian in the recovery’, inasmuch as it was stated in his Fabian essay (Reference SwanSwan, 2011), had a flimsy basis in post-Keynesian thought and did not stand up to scrutiny when read through a social democratic lens.
The ALP’s stance in the period of government – scarcely altered since losing office – can be characterised as, at best, a downplaying of the politicisation of economic policy, as in its response to the global economic crisis and a number of other policies identified here, or worse, an active depoliticisation of policies, such as IR changes and education funding. These policies could, in different circumstances, have reinstituted a discussion of the importance of social democracy to contemporary society. The ALP continued to reconcile the trajectory of the contemporary party with the changes of Hawke and Keating, particularly microeconomic changes (Reference RuddRudd, 2009b), by further internalising the logic of the market.
Adherence to neoliberalism by nominally social democratic political parties requires the depoliticisation of various policies. The depoliticisation of IR meant that the issue could not be revisited effectively in 2010, 2013, 2016, or at any election in the foreseeable future. In the 2010 election, Labor saw its status as the strongly preferred party on IR diminished (Reference McAllister and CameronMcAllister and Cameron, 2014: 89). In the 2013 election, exit polling revealed no preference for either party on IR (Reference Bean, McAllister, Johnson and WannaBean and McAllister, 2015: 418–419). Meeting one’s opponents nine-tenths the way not only reduces the margin of difference, it also asks a lot from would-be supporters.
Missing in the contemporary parliamentary ALP is a conception of politics in terms antithetical to neoliberalism. The aspect of neoliberalism most worthy of emphasis for the purposes of this discussion is its nullifying effect on progressive politics, not simply in the obvious sense but inasmuch as notionally progressive political parties remain laden with ideas that are hostile to a social democratic programme. Neoliberalism has become hegemonic. Seeing things this way allows us to explain how it is that the ALP in the period 2007–2013 achieved some important progressive policy outcomes and yet remained so constrained, in terms of both policies that could have fared better and policies that should have been formulated from a fundamentally different starting point.
Acknowledgements
The author is grateful to Andrew Brown, Graham Maddox, two anonymous reviewers and the editor of The Economic and Labour Relations Review (ELRR) for helpful suggestions made on an earlier draft.
Funding
The research for this article was made possible by the University of New England’s granting of study leave to the author in 2015.
