How did we get to neoliberal Australia?

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When did Australia embrace neoliberalism and how did this start?

We had resisted the extreme application of neoliberal principles until 2013, now the future is uncertain.

Hawke and Keating introduced a more conservative application of the principles that opened up Australian markets, but also introduced and preserved Medicare. Floated the dollar, but maintained the dole. Gave power to the reserve bank over money, but the government kept control and transparency. Most telling was the reduction of trade tariffs to record lows that began the decline and fall of the manufacturing industry in Australia[1]

John Hewson then presented neoliberal religious dogma to the Australian people clearly and concisely in his Fightback campaign and the people outright rejected it.  Hewson lost the unloseable election and sadly handed the reins to Keating who completed the initial slide into neoliberal government.

By the time Keating left in 1996 the reserve bank was completely independent,[2] the pilot’s strike introduced a new era of Labor not supporting unions, mandatory detention for asylum seekers was introduced and the foundation of neoliberal government was firmly in place.[3]

Howard then came on the scene and moved further down the path, introducing GST (it taxes poor and middle income earners far more than the rich as a percentage of income. Rich people dont consume more goods and services in proportion to their income.[4]), industrial reforms to bust up unions and an endless campaign from Murdoch to beat neoliberalism into the average Australian consciousness. Focussing on asylum seekers, aborigines and muslims to make them the ‘other’s the ‘foreigners’ who were responsible for the nation’s problems. Those problems being University education costing more and more each year, wages frozen and sliding, while the mining boom kicked in and Howard wasted around $400 billion on middle and upper class pork barrelling instead of investing in national infrastructure and claiming profits from the mining boom to do so.[5] The IMF famously called the Howard government ‘the wasted years’ and responsible for both of the most profligate spending times in the history of Australian governments.[6]

Then Howard pushed Australians too far with his Workchoices program introduced in 2006.  This was introduced to remove the working conditions unions had fought for a century to achieve – and wreck union organisations directly. [7]

In 2007 Labor then discovered a new leader who seemed to appeal in the form of Kevin Rudd. The 2007 campaign was won on the principles of:
1. Repeal ‘Workchoices’
2. Say Sorry to the stolen generation and Australian Aboriginals in general
3. Ratify Kyoto treaty and take action on climate change.

At this time the right wing of the Labor party had become almost completely subject to neoliberalism and were believing the lies despite the overwhelming evidence from other countries that all it led to was extreme wealth inequality and misery for the majority of citizens. In addition to this shift of Labor to the right, the Liberal party began turning into a slogan producing marketing firm, ‘the economy’ must now be appeased by adopting harsher neoliberal principles. If you dont do this the economy will suffer! And you dont want the economy to suffer! That’s the end of the world! Foreigners are bad for the economy! They’re taking my job! We dont want them here!

Which was just fine, because those foreigners no longer had to leave their homes to take Australian jobs. The neoliberal free market foundations laid by Keating led to a rush to send as many jobs overseas as possible – and it worked very well. Singapore, Malaysia, Philippines, China, India, Vietnam have all benefited.[8] Not so much Australians living in their own country. Once again, neoliberal principles actively hurt the many people who voted for them thinking they would create a better future.[9]

But Rudd looked like he might actually get Labor working against neoliberal principles and published articles to show his keen awareness of the damage neoliberalism had done globally and would do in Australia[10]. He spoke often about going back to grass roots Labor party member voting and taxing mining companies after their decade of immense profit margins. That was apparently too much, greed kicked back in and Rudd was spilled to gratify ‘the economy’. Mining companies were appeased as ‘the economy’ desires – we must sacrifice everything for corporations, for they are all that is good in the world. Rudd’s dictatorial approach to leadership was also a major contributing factor commented on at length by his staff and ministry colleagues.[11]  Australian Prime Ministers are not Presidents, something that many people seem to have forgotten.

Then we have the Gillard hung parliament causing no end of confusion. Right wing Labor want more neoliberalism, but the Greens and the independents have different demands. If Labor want to be in power, they are going to have to return to listen to their left wing. More stress and blood, but somehow all through that a very progressive agenda actively implements policy left right and centre. The vast majority of which was extremely good and actually moved the country towards handling climate change, facing the future and working on investing in Australia and its citizens instead of corporate greed.[12] …however, it’s not all good news as a Labor government in the Northern Territory agrees with their federal counterparts and Inpex to allow them to fly workers in from the Philippines to build a LNG processing plant.[13]  Now we’re giving Australian jobs directly to foreign workers on our own soil rather than simply exporting them.  Why isn’t this in the media daily?

Corporate money arrives and implementing totalitarian neoliberalism is at the very top of the Liberal party’s list with a new extreme right wing campaigner; Tony Abbott.[14]

So there you have the current situation. Bill Shorten a weak leader who can’t say too much, because he largely agrees with Abbott, he’d just introduce it slower. Albanese and Doug Cameron holding up the fort for what the Labor party used to stand for, but routinely being forced to support the right wing neoliberal views to keep up an appearance of party unity. The Greens representing a progressive voice and now Clive Palmer has bought his way into parliaments across the country with solid marketing and voters looking for any alternative to the three largest political parties in the country.  Increasingly it has become clear that Clive Palmer primarily represents Clive Palmer.  His votes have been about self interest first and political grandstanding second to pretend he cares about average Australians.  He is neoliberal as well, just the slow deploy version of the Labor right.

Until Australians have a broad understanding of what neoliberal ideology is and how it has been applied to our detriment for the last few decades, we can’t throw off the shackles and make more steady progress to a sustainable, collaborative future.

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5 comments to How did we get to neoliberal Australia?

  • Warde

    exporting jobs isnt a bad thing thanks to absolute advantage.
    unless you’re against globalisation it doesnt make sense for Australia to shield itself from the rest of the world. if you are against globalisation you may as well be against gravity; its not going to go away.

  • Globalisation isn’t the problem. Enabling easy trade between as many countries as possible is good for consumers everywhere.

    The problem is hollowing out a small economy to make it entirely servile to the larger one. Absolute advantage sounds like a good idea, but breaks down very quickly in reality.

    There are very real problems of food security caused by this unfettered greed with corporations and the governments of the largest economies banding together to enforce practices that are neither sustainable nor in the interests of the individual country. ‘Free Trade’ agreements have sent farmers in many countries into poverty because another country has its government subsidise production to artificially reduce prices (US is very guilty of this). More here:

    What actually happened when neoliberal ideas were forced on the world via conditions on IMF and World Bank loans was countries lost the ability to support their own populations and became completely vulnerable to their suppliers. Products that were initially cheaper now had prices determined primarily by the country that produces that commodity. Countries like the UK that almost completely dismantled its manufacturing industry realised later what a terrible idea that was when it became clear that Asian countries would determine the price of vehicles by forming a cartel. Not that they could complain much, they were part of the US led banking cartel underpinning the neoliberal takeover. When they realised how important the auto manufacturing business was to all their advanced tech industries, they changed their minds. As did Germany and a lot of Eastern European countries…those who could afford to anyway.

    Absolute advantage is only an advantage if you are a superpower economy. In that case it allows you to hollow out other countries and make them dependent on you for essential food and services. This is not in the interests of the majority of the population of any country or indeed the world.

    There is a balance to be made between ensuring internal food security and a stable economic future for your country and the need to trade globally. When every large economy is gaming the system by entering ‘free trade’ agreements and then excluding industries from the deal and subsidising their own industries to make them artificially cheaper, we do not end up with a global net benefit. We end up with an economic empire. Also not in the interest of the majority of people.

    Australia losing its auto manufacturing industry is an incredibly backwards step when we should be rebooting it as an electric vehicle design and manufacturing industry that should be one of three main parts of Australia’s service economy in 30-50 years.

  • Warde

    ‘because another country has its government subsidise production to artificially reduce prices’
    you criticise government subsidies but then call for a return of auto manafacturing which survived on government subsidies.

    you discuss internal food security like its undeniably required. i disagree. developing economies do it better due to cheap labour and even with a cartel controlling prices its still worth our while acquiring food from them cus its still cheaper. if it does one day get to the point where they are exploiting us we can return to manafacturing our own. food production isnt exactly difficult, its just costly. Australia’s strengths are education and technology not manafacturing

    i agree with a lot of your other points though
    the aus industry for the next century article was a good read

  • I can see how it could be read that way…my problem is with the hypocrisy involved in demanding ‘free trade’ agreements that are anything but free. The larger economy is using the language of free trade combined with an exceptionalism argument to say that they are an exception to the rule of free trade…because they say so. There is no such thing as a free trade agreement in place today – there are always exceptions and the vast majority are on the side of the larger economy.

    Australia has to think harder about this, we have the ability to produce more than enough food to feed everyone in the country with some spare…but we don’t. We sell vast amounts on the global market for profit without consideration. I’m not saying we shouldn’t do that either, I’m saying there is a lot more to consider than the ‘free trade agreements are good because cheap’ argument we’re given. This false philosophy has already wrecked countries and is wrecking more. We need global trade and we need to protect national interests too. I do not believe for one moment that larger economic powers will somehow refrain from exploitation because ‘it isn’t right’…evidence shows the reverse, they will exploit until the blood runs dry, then they will find a new victim.

    Its not as simple as you say ‘we can just return to manufacturing our own’. Once skills are lost and the economy is tied up with international agreements in every direction it really isn’t easy to change. Ask the caribbean and south american nations who got crippled by this already. They face a choice of starvation or destitution AND starvation. An easily avoided circumstance by thinking about our own future instead of putting the slightest faith in an utterly amoral global corporatocracy.

    I agree, Australia’s strengths have been a combination of primary production and tech/education/service … but that is shifting…we need to change our focus from manufacturing poorly for foreign companies who don’t really want to operate here to researching, designing and building the best electric vehicles here with a focus on the domestic market. Export is more likely to work better under licensing/service agreements, but always keeping the best onshore and preventing leakage. That requires a new way of thinking for an Australian government that always sees itself as a vassal state. We dont need to be and certainly need to be more independent now as the next global financial crisis approaches. We should be designing for our own future, not waiting to be told what to do like some errant schoolboy.

  • michael Peterson

    So much for Globalization… the economic model is based on physics, yet the equation has a little more to it, they left out the part of depreciation. For every force there is an equal and opposite force..

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