Balancing Act: Australia between Recession and Renewal
In a parallel universe, Clive Palmer is Australia’s Donald Trump but with a smile, not a snarl. The billionaire businessman plunders the voting base of the centre-right party, melds his business and political aspirations, and offers a smackdown to Chinese economic imperialism along the way. It is not yet time for an Australian Trump – and Palmer is unlikely to be the man, anyway – but in the actual universe that George Megalogenis writes about here, the foundations are firming for our own outburst of economic populism on the right and left.
In 2015, private-sector workers received their smallest pay rise since Paul Keating deregulated the wages system in the early 1990s. By contrast, “business appears to have unity of purpose in its relentless pursuit of concessions from government”.
We are edging towards the sort of middle-class wage stagnation and Wall Street-style bailouts that have fuelled Trump and, on the Democratic Party left, Bernie Sanders. Nobel prize-winning economist Paul Krugman wrote in his memoir that American unions, which built the middle class from the 1920s to the 1970s, were smashed as much by the naked politics of the Reagan administration as by the shift to free trade. Megalogenis observes similarly that in our enterprise bargaining system, “the balance of power has shifted too far towards the employer”.
It is time, he concludes, for an interventionist agenda. “Government must reclaim responsibility for the areas of public policy that will prepare us for the future – most notably, education and infrastructure.”
Megalogenis suggests a public-sector program to build ports, public transport, schools and hospitals, using the blue-collar workers who have lost jobs as the mining and housing booms cool. This is pure Roosevelt and New Deal, with all the more credibility because it comes from a commentator who was a cautious enthusiast for the neoliberalism of an earlier age.
To pay for it, he reaches again to FDR. Resist the persistent calls from business to cut their taxes, raise the GST and abolish penalty rates. “Business has convinced itself that globalisation means it owes no obligation to society other than to generate profit,” he notes.
One politician in particular should study this Quarterly Essay – and then Bill Shorten should hire Megalogenis. PT
Quarterly Essay, 108pp, $22.99
This article was first published in the print edition of The Saturday Paper on Mar 26, 2016 as "Balancing Act: Australia between Recession and Renewal, George Megalogenis". Subscribe here.