Beware of right wing revolutionaries calling themselves conservatives

Rob Burgess had an interesting post in the May 2 Business Spectator on the commision of audit.  He discusses the competing, and very different ideological positions dividing the political right  as well as pointing out that “Australia has more to lose from radical change than just about any country in the world.”
The competing ideological divisions within the right wing of Australian politics might be described as:

  1. The revolutionary neo-liberal position that says that “the system is fundamentally flawed and needs fixing.”   Their preferred fix are the radical steps required to remove the the restraints on our economy caused by the “dead hand of government.” Vs
  2. The conservative liberal position that says we are actually doing quite well and we should limit our efforts to incremental change.   They might say something like: “In this situation it doesn’t make sense to be risking our gains by making unnecessarily dramatic changes.  If you like: “If it aint broke why fix it?””

There is a similar division on the left of politics between those who want radical change (Think the end of capitalism) and those who favour incremental improvements.

The key question here is whether the current state of the Australian economy really justifies the sort of radical fix advocated by the Audit Commission.  A comparison between Australia and other developed countries might be a good start:

  1. According to The Conversation, Commonwealth net debt “is about 11% of GDP, the third lowest in the OECD (the average is 50%), and low by historical standards”    Not a crisis. 
  2. Rob Burgess provided the following:
    • Combined federal, state and local tax rates ran at a bit over 30 per cent during the Howard years, dropping to  about 27 per cent during the Rudd/Gillard years. (State taxes account for around 4 per cent of GDP, and local taxes (rates) hover around 1 per cent of GDP.)  By comparison, Singapore’s total tax-to-GDP ratio is around 14 per cent, the US 27 per cent, Switzerland 29 per cent, and Canada 32 per cent.  Not a crisis  but it would be interesting to know the reasons behind the low Singaporean rate.  It is worth noting that people may actually be better off in a “high taxing” country if the high taxes mean that the state pays for services that other, lower taxing countries make people pay for themselves.
    • In terms of GDP corrected for purchasing power parity (PPP) we rank 10th on the World Bank and IMF scales. We could do better.  A key factor here is how expensive it is to rent/buy a house in Australia compared with places like the US or Spain where house prices were really hit by the GFC.  In our case, the problem really took off when Peter Costello offered negative gearing to people who could afford to borrow money to buy investment properties.  His first home buyer schemes also tended to push up the price of houses rather than help first home buyers.   However, fixing home prices is no win territory.  It is a bit challenging to please existing homeowners and new home buyers at the same time when it comes to prices.

    • Australia does much better when we use the ‘human development index’, which factors in longevity (as a proxy for good health), educational attainment, gross national income and, in recent years, measures of inequality. On that scale we jostle for the number one spot with Norway. Not 6th or 10th. Number one.  Definitely not a crisis.

    • Best news of all is that last year’s Credit Suisse survey  showed Australia having the highest median wealth per adult citizen of any nation.  Definitely not a crisis although inflated home prices may have helped a bit here.

Conclusion: Australia’s alleged budget crisis is either the product of a fevered imagination or a deliberate attempt by neo-liberals to justify the imposition of their questionable ideas.

None of this mean that there aren’t many things in Australia that would benefit from radical change.  However, the case for these radical changes should be justified by fact based, logical conversations about the specific issues.  Definitely not based on ideological assertions about the dead hand of governments or private is best.

13 thoughts on “Beware of right wing revolutionaries calling themselves conservatives”

  1. It is interesting – or alarming – that the mainstream media neglects to mention any divisions at all among what is laughingly called the ‘Conservative side of politics’.
    So far as I can see there are 5 main groupings in Australia:
    (1). The established mob. Mostly exclusive – but ever-ready to include a few token outsiders to show how “inclusive and representative’ they are. Branch-stacking and unfair entitlement are their birthright.
    (2). The loonies and the ultra-extremists; “all government regulation is evil” is their catchcry. Mostly influenced by American crazies. Joh Bjelke-Petersen talked with such people and used their enthusiastic help but he was cunning enough to keep them happy whilst taking damned good care that their real power was kept to an absolute minimum in Queensland. Now, he is dead – but they are not.
    (3). The modern-day bandits, robbers, pirates and gangsters. Their “conservativism” is a thin and convenient veneer for their criminal or near-criminal activities. In another age, they might have bowed low and prayed earnestly then gone on a Crusasde – for plunder and more plunder and even more plunder.
    (4). Intelligent, articulate, well educated advocates of a whole range of conservative philosophies. Generally in favour of individual responsibility and freedom of action. Unintentional supporters of (3) above.
    (5) Conservatives.

    These groups are forever interacting: sometime allies, sometimes in murderous conflict.

    I don’t believe in any monolithic or two-dimensional “Conservative side of politics”.

  2. The Right Wing Dingbats have always been with us. But there was a time when they were, to coin a phrase, outside the tent trying to piss in. And to give the right their due, many on the conservative side of politics opposed them as vehemently as did the left.

    What is disturbing nowadays is that many of the nutters are inside the tent, making life unpleasant for everybody, in the tent or not.

    It is profoundly disturbing that their recommendations on how to tear up the social contract all Australians have consented to for over a hundred years is being taken seriously by those that should know better, and who should have immediately kicked them out of the tent, to persist in the metaphor.

  3. There are only two types of people in Australia.
    Those that divide the population into distinct groups.
    And those that don’t.

  4. Jumpey: Yeah, fair enough, but if you get people running around metaphorically wearing the livery and chanting the war-cry, I reckon they have divided themselves into a distinct group

    Paul: That is why some of us now consider the current trends to be as bad as Slalinism. Just because a movement says it supports free enterprise and individual responsibility, it doesn’t mean it isn’t actively hostile to both concepts. The radical Right are indeed hell-bent on destroying Australia’s social contracts …. and when we pass that tipping-point when those same dingbats (whether eloquent and educated – or just plain raving ratbags) gain near-absolute power, it won’t be the lefties, greenies, gays-&-lesbians and free-thinkers who will be rounded up first, it will be their fellow conservatives, their potential rivals, their brothers-&-sisters on the Right.

    John D.: Wonder if the Singapore figures could come from a combination of free-wheeling democracy and unity of overall purpose INSIDE the People’s Action Party and the wise use of the resources of government-owned enterprises? Just guessing.

  5. Graham @ 5
    Yeah, that was a bit of a funny ( at least when i typed it )
    [ even us starving capitalists try that from time to time 🙂 ]

  6. Oh, and I should give the laptop definition of capitalism,

    Capitalism is an economic system in which trade, industry, and the means of production are controlled by private owners with the goal of making profits in a market economy. Central characteristics of capitalism include capital accumulation, competitive markets and wage labor. In a capitalist economy, the parties to a transaction typically determine the prices at which assets, goods, and services are exchanged.

    ( my bold )

  7. Graham @2: I am sure Rob Burgess would agree that his division of the conservatives is a bit simplistic. The division he used in this case helps understand what is happening re the budget although it helps to realise there is another group that sees manipulating budget perceptions as nothing more than a political tool.
    Liked your grouping. The problem with labels is that many real people would fit a number of these at various times in various situations.

  8. It’s interesting that intelligent business commentary appears to be freaking out over the LNP govt’s austerity policies.

  9. Graham: I suspect that part of the explanation for the Singapore figures are the result of Singapore being a very small island. In addition, they have things like the Medisave compulsury saving system that is a defacto tax even though it is not included in national tax calculations:

    How the system works: In Singapore, people are required to save for health care, retirement income and other needs. They can use their forced saving to purchase a home, pay education expenses, and purchase life insurance and disability insurance. For individuals up to age 50, the required saving rate is 36% of income

    (nominally divided: 20% from the employee and 16% from the employer). Of this amount, 7 percentage points is for health care and is deposited in a separate Medisave account. Individuals are also automatically enrolled in catastrophic health insurance with a deductible of about US $1,172, although they can opt out. When a Medisave account balance reaches about US $34,100 (an amount equal to a little less than half of the median family income) any excess funds are rolled over into another account and may be used for non-health care purposes.

    We don’t count compulsory super as a tax either
    This article in the Economist does point out that Singapore does minimise welfare spending in a way we would see as harsh.

  10. JohnD: Thanks for that detail about Singapore’s excellent health and savings systems. Also, Singapore’s HDB flats; similar concept to the old Housing Commission houses here: economies of scale and standardizations, inexpensive for the residents, good quality residences – leading to a lack of upward pressure on wages. Maybe we could contract the running of the Australian government and economy to Singapore.

    You are right about labels, of course. And I didn’t mean to be critical of Rob Burgess’ very useful insights.

    Jumpey: Right, that does it! You’ve condemned yourself out of your own mouth! Up against the wall, you heretic, you apostate, you deviationist, you enemy of the true and only Free Business thought-line!

  11. Jumpy: Nice to hear that

    In a capitalist economy, the parties to a transaction typically determine the prices at which assets, goods, and services are exchanged.

    In the country I live, Coles determines what farmers get paid for their milk and I get told by Coles how much I am going to have to pay if I want milk. OK there are some situations where real negotiation is the norm

  12. Graham: Arguments re whether the proposed debt levy is actually a tax reflect the success of the “tax is bad” campaign run by the Murdoch press and the revolutionary right. To my mind there is no real difference between raising taxes or getting people to pay for something that used to be paid for by the government. Both actions leave people out of of pocket and should be compared on the basis of things like fairness, efficiency etc.
    In terms of fairness, most of the cost cuts are highly regressive in that they will remove a higher percentage of the income of low income earners compared to high income earners. The levy on high income earners on the other hand is progressive and will not make life any harder the majority of Australian households
    If we are going to compare country’s tax rates the comparison needs to take account of the services supplied as well as tax rates.
    In Singapore family obligation replaces some government services. For example, adult children are expected to support their parents. Children save on taxes compared with us while having an out of pocket expense that the younger can avoid in Aus.

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