March 6, 2015 – 11:45PM
Editor-at-large, The Canberra Times
Tony Abbott and Joe Hockey want to start a conversation about the future, based on the materials in the intergenerational report issued by politicians this week. But the future 40 years forward is one they are trying to hijack, for present political purposes to justify an agenda that will not serve Australian now or tomorrow.
It may well be, as Marx might have said, that those who forget their future are doomed to relive their past.
The Whitlam Government transformed public health insurance, national primary and secondary school policy, access to universities, and a rethinking of the social welfare system.
The intergenerational report is a political document prepared within the Treasurer’s office rather than in the Treasury, with dire graphs based on data confected for purpose. It presents a dire story of the costs of government spiralling out of control unless prompt and severe medicine is applied, particularly to health, education and social security.
If the medicine, approximately equivalent to the cutbacks proposed by last year’s Budget, is not taken now to stop the trend of ever-increasing public expenditure, we are, it seems, headed for demographic and fiscal decrepitude. Australia, as presently configured, is careening on the highway to Greece, even if, under present, prudent but constrained management as limited by a populist senate, it is at only half the speed it would have been under the previous horrid and hateful Labor regime.
It puts me rather in mind of 1975, 40 years in the past.
The future, then, was often invoked by politicians. Gough Whitlam was not the only man suffering from visions, whose speeches sought to describe a future Australia and to talk of present policies as preparations for it. Whitlam made ample reference to the now, and to the hip pocket, but he was also selling hope as well as charity – to an extent mainstream Australian politicians since have not been able to match.
The Whitlam Government transformed public health insurance, national primary and secondary school policy, access to universities, and a rethinking of the social welfare system. In effect, they doubled the public investment in it, even if their spending never reached 20 per cent of GNP, and involved no public debt.
The future was also in the service of defence. One of the contentious phrases of the day, repeated in consecutive strategic assessments was that there was then no sign of a credible threat to Australian sovereignty over the next 10 years. Our military guardians had access to satellite and other intelligence technology which made it reasonably clear that no nation anywhere near – from China or India down – had the capacity – even the shipping – to invade Australia with a force they could sustain while we were fighting back.
It would take a decade, at least, time to build such a fleet from scratch, longer to have the power to keep it afloat against our defences. Even if we were deceived about political signs of aggressive intent, we would know when attack was possible. Hence one could plan the nation’s defence, including our alliances, not against immediate short-term contingencies, but in a slow and deliberate manner best designed to protect and advance our interests.
The “no threat for 10 years” phrase was political trouble, no matter who said it. Defence lobbyists, colonels, and oppositions invariably said that it was all too complacent. A threat could arrive at any moment, leaving Australia naked and alone. The solution, inevitably, involved spending a lot more than whatever it was at the moment. And in distorting defence expenditure towards the here and now (particularly in toys and military salaries) and away from major long-term and integrated investment in defence capital, which might not be in service until after it was needed. As it happens, hardly any of the (now obsolete) defence capital, and even fewer of the defence personnel, of 1975 were ever to be in zones of war.
There were any number of sotto voce scenarios of impending military disaster, and a good many involved, (sotto voce) Indonesia. Or China. South Vietnam had just fallen to the North, and the other countries of Indochina came under communist control, but no one much was talking, any longer, about the domino theory, by which the nations of Asia were doomed, one by one, to fall into the thrall of Russia or China (or both – there were still some who believed that the Sino-Soviet Split, already 15 years old – was a feint designed to trick us). Indonesia has just invaded East Timor, after Australia had signalled that it would make only token protests.
From either end of the 1975 telescope, no one foresaw the Soviet invasion of Afghanistan (which has caused most of the national security trouble in which we are now embroiled). That happened within five years, though nothing Australia did as a result made much difference to anything. We did not foresee the collapse of the Soviet Union, the drifting of continent Australia into the East China Sea, or a further (post Vietnam) series of humiliating defeats of American, and western, arms and policies within 1000 miles of Jerusalem over the next 40 years, none directly involving the integrity of Israel itself.
In 1975, Australia, and its fiscal calculations, were reeling from the first oil shock of 1973. It was that, rather more than economic indiscipline under Whitlam, which was to have the biggest effect on political and economic ideas. It forced a long and painful economic restructuring. Australia could no longer have a future protected by some economic quarantine fence, not subject to the forces of world markets. But it was not something 1975 politicians, on either side of the fence, yet realised.
1975 had, like now, an army of lobbyists and urgers screaming for abolition of labour market controls, deregulation to save business from the dead hand of government, big cuts to government expenditure, and tax cuts, incentives and entitlements for distressed rich people. Without these we were on the road to hell. Just emerging was a concerted attack on a supposed outbreak of scrounging, fecklessness and unwillingness to work for whatever was offered, and a culture of distrust in what government, even with the best of intentions, could achieve. A good deal of politics began to appeal to mean spirits and resentment of allegedly privileged groupings of poorer people.
In the “real world,” unskilled labourers were finding it harder to get jobs. But the electric typewriter, the photocopy machine and the facsimile machine were not yet in common use. Big businesses – The Canberra Times locally was one, then – had telex machines. Ordinary members of the public waited on average about three months to have a landline telephone connected (although the word “landline” was not, then, in use).
Most white collar workers, other than those in shops, were engaged in what one would now call data processing work – work of a type that has now almost entirely disappeared. The personal computer was ages away, the mobile telephone even further; the internet and its potential and the whole array of modern social media had hardly been conceptualised, let alone invented. Now between a third and a half of the Australian population has no memory of a life before the mobile phone or Google.
In 1975, the structure (and size) of the Australian family, were in a state of revolution. More clever, articulate, demanding and well-educated women were entering the workforce and were taking less shit. These were women who, on average, were marrying later than their mothers and older sisters, and who were to have fewer children. Whitlam had a Royal Commission into Relationships to examine the implications.
The rate of family break-up was seeming to increase, but despite what some later said, the first big bulge of divorces and break-ups, regularised under the 1975 Family Law Act, were of the generation older than the Baby Boomers. The new citizenship for women saw demands for help with childcare, maternity leave, paid parental leave, equal pay, an end to discrimination and fair representation in the high councils of government and business. It became part of a wider social agenda: for justice for Aborigines, aged care, pre-schools, dignity for single parents, and equal rights for homosexuals. Hitherto these had been “single issue”, “advocacy” politics; it moved into the mainstream, even of economistic talk.
Verbal commonplaces of 1975 politicians, whether on the left or (particularly) on the right, now seem embarrassing, naive, reactionary or just plain silly. Likewise with the social attitudes of many representative Australians to the rights of blacks in South Africa (or Rhodesia) or Aboriginal land rights.
Whether from the beginning of 1975 (when Bill Hayden as Treasurer began winding back the economy) or at its end (after the adults had returned, thanks to Sir John Kerr) that period saw the beginning of a time when the state of the economy, and the level of government spending, dominated day to day political discourse. At all times over the next 40 years, the slashers and the cutters, the straighteners or, as some would insist, the economisers, were at all stages in the ascendancy.
It is often forgotten that Australian government, under Whitlam, spent only two-thirds as much of the gross domestic product as national government does today.
As it happened, Whitlam did produce intergenerational reports, such as Professor Borrie’s inquiry into population, which still stands up fairly well, unlike a host of exercises in economic prognostication, from the 1967 Vernon Report of economic enquiry. No one in Treasury, for example, anticipated (or advocated) a floating exchange rate in 1983, or any number of other significant economic changes of that era – let alone that many of them would be implemented by Labor governments.
The politicians of 1975 did make a difference, one that matters still. They redoubled 1960s efforts to increase numbers in universities, further education and training. They help stop most Australians leaving school at about age 15 and instead saw most go on, at least, to matriculation.
The key to the transformation of the Australian economy over the past 40 years was the fresh investment and reinvestment in education four decades ago – spending regarded as excessive, reckless and unsustainable by the clerks of the day. The investment in pure education (and pure research) was as profitable and critical as the investment in directly preparing women and men for the labour market. Some of it, in retrospect, could have been managed better; anything at all was at the time fiercely resisted.
Why should it be different 40 years hence?
Even in 1995, one could hardly have predicted much of the technology we take for granted today. We have learned little from a tedious, dismal economics, particularly of the directly political sort, dominated by dogma and unaffected by evidence or experience.
The lesson from looking back is that the best investments one can make in the future, and in future generations, is by intelligent and thoughtful spending now. Investment in the health, education and happiness of the general population, not least the emerging one. And in the geographic cultural and social environment in which we live.
It’s the people and the land who are this nation’s great capital asset, and they are assets we are letting depreciate.
If we cannot afford our present (if needs be by richer and more benefited Australians reaching deeper into their wallets) we won’t deserve our future. The biggest reproach on modern politicians is that there is a serious prospect that the younger generation of 2155 may be materially worse off than their parents and grandparents.
Source : The Canberra Times