Compulsory superannuation and the social contract
Dogs in the country can sometimes be seen, halfway across a field, rolling in the guts of a dead cow. They will later come in through the back door, smiling broadly, offal hanging off their backs. Atavistic behaviour, no doubt, to help the animal through a long, hard winter. There’s a lot of it about. Joe Hockey, speaking in parliament about the new scheme to allow young home buyers to extract money from their superannuation, had the same silly, tongue-wagging look, as he bum-burrowed into the proverbial dead Angus.
In the midst of a government with more than an air of dead cow about it, the treasurer was taking great pleasure in messing up one of the signal achievements of a past one. Paul Keating noted the Abbott government’s unerring ability to not only not do anything constructive but also to trash the solid achievements of earlier governments. Compulsory super was, he said, “one of the best retirement systems in the world”. Hockey’s changes were “certainly not an innovation and [are] not responsible enough even to be considered a thought bubble … mandatory superannuation gets right up [the Liberals’] nose.”
Whether people fully understood it this way or not, superannuation constituted a social contract of sorts, in which present wages were forgone in exchange for matched employer contributions. Arching over decades, it included an implicit proposition about life: that we are not always the best judges of our long-term interests. We can consent to a renunciation of present choices in the name of security, which is to say, freedom. Super wasn’t just a financial arrangement; it was the last version of notions of the good life encoded in Labor traditions. Compulsory super formed the last part of the “deal” Labor had offered its base, and the country as a whole in the ’80s and ’90s, an idea of how the big structures of government related to the matters of day-to-day life.
The Hawke–Keating “deal”, love it or loathe it, was the last such that the Australian people have been offered – the last comprehensive idea of what life should be, the state should be, and how both might be bettered. Yet as they have drifted along for nearly two decades, the conditions of daily life for millions of Australians expanded and transformed, without any corresponding comprehensive policy response. Urban living, affordable housing, family life in a two-jobs household, change in the basic structures of working life – all these have become far more complex than they were since the time of the last deal, the Hawke–Keating supersession of older, more interventionist social democracy.
Part of that deal was that a whole series of these things would cease to be the active purview of government and that citizens would be left to their own devices to a far greater degree than previously. Indeed this was a deal between the two major parties – that the scope of politics would be successively shrunk to a degree that made it unnecessary for either party to offer much by way of comprehensive improvement or dynamic transformation of people’s lives. Though this was usually the tactic of right-wing parties – to persuade people that whole areas of life had no political aspect at all and were simply an act of nature – Labor was happy for that agenda to be set, as the party looked ahead, from the 1990s, to the impact of a globalised world on a hitherto bounded society. From the mid-’90s onwards, it was obvious that readily affordable home ownership was going to slip out of the grasp of many, that inequality in higher education would start to widen, that limited childcare arrangements would not keep up with work-and-parenthood mixed roles – that in general a whole series of “life structures” would come apart in ways that would take a comprehensive reconstruction of the state to address. But to take on such issues was to take on inevitable failure, in a world of fluid capital and transnational corporate power, among other factors. Social democratic parties had once been willing to do such and take that risk; they no longer were. Instead, piecemeal and targeted policy initiatives were preferred, such as the National Disability Insurance Scheme and Gonski. Thoroughly worthy and important in themselves, they nevertheless reinforced the idea that a Labor government’s role was to focus on the lives of the marginal and exceptional, further emphasising the idea that the mass of people were doing fine. The determination to avoid “big ideas” has created a process of policymaking that can’t be anything but disjointed.
The absence within Labor of an account of how society works, and an offer of how it could be bettered, a deal that pulls it all together, has left it weak at the centre, endlessly grasping for a line by which to sell itself to a majority. But it has curiously had the same effect on the Liberal National Party – with no program, save for a contradictory set of promises about maintaining a whole series of existing services while cutting budgets. Most likely the party wouldn’t risk a genuinely laissez faire program, defining the state as having only a minimal role in people’s lives, even if it wanted to.
And the LNP doesn’t want to, because it knows that the political centre of gravity in Australia remains left-shifted, even if that is well hidden.
So what would a genuine new deal look like? It would be something that acknowledged that social life had changed comprehensively since the last time one was offered, even if the gradual nature of such changes make that difficult to see. The Hawke–Keating transformations were done in a society where much had changed culturally following the social revolutions of the 1970s – as regards gender, race, consumption and so on – but had changed far less structurally than we sometime falsely recall it doing. With union membership still nudging towards 50 per cent, the world of work still centred on large manufacturing workplaces, a small creative/information production sector, and a residual centrality of the two-parent family. Thus, there was less pressing need to redraft the social contract as well as the economic one.
Now we live in a society where that must be done. Work is increasingly divided between career-track or skilled jobs that demand ever-increasing hours, or precarious and piecemeal work that offers few benefits. Qualifications, even if they are bogus ones for work that is common sense, and experience are now required, and people shut out of retraining fall behind. Home ownership gobbles up a soul-destroying amount of working hours – an amount that people a half-century ago would simply have refused to accept – and affordability is only gained by buying in the exurbs, which imposes the unpaid labour of long-term commuting.
Many women work simply to pay for the childcare they need to keep their job to stay in the job market. Any advancement on parental leave has been kiboshed by an asinine plan by Tony Abbott that, by poor design, set expanded parental leave in opposition to social justice,
a substantial anti-achievement.
Meanwhile, we have expanded our cities, as the new book-length coronial inquiry into Australian urban policy, City Limits, documents, by simply adding rings of low-density, no-centre suburbs around the edges, creating vast spatial and time inequality. Lifespans extending regularly into the late 80s and 90s have put a burden of care onto children into their 50s and 60s, yet we have not built in leave flexibility to reflect this. As a result, aged care has become a ghastly warehousing of the old in poorly designed facilities. On it goes.
Just as our physical infrastructure is grinding down, so too is our social and cultural infrastructure, our social “plant”. From the 1900s to the 1950s we went from the 48- to the 44- and then the 40-hour week, and a new way of life emerged, with the weekend and the suburban home offering people a real freedom hitherto denied to them. Since then, our economy and productivity have expanded multiple times, yet hours of work have remained unchanged, and the possibility of choosing a more time-free life, but with the same security as full-time work, is absent. Despite the fact that our prosperity would allow for social innovation and world-leading change, it has done the opposite. Of the prosperous OECD countries, we are one of the least innovative, locked into old arrangements that are proving increasingly inadequate to a better life. A political and economic elite on both sides of mainstream politics has trained the wider populace to see the increasingly bad fit between their conditions and the system as it is. The aim is a system of minimum friction in which the political caste can reproduce themselves smoothly, even if the cynicism rises to unbearable levels.
That situation cannot last indefinitely. It has already been instrumental in the internal collapse of the Abbott government, quite aside from, or underlying, its incidental incompetence. But it will eventually hit Labor harder, because the one party that does have a deal and a program is the Greens. That’s not surprising – newer parties emerge as a program, a proposition about the world. It is the older parties that have to comprehensively renew themselves, to more explicitly present an account of how life should be, with the policies that would create such. For Labor that does not necessarily mean vastly more state spending, but it does mean explicitly affirming the state’s role to help bring social innovation into being.
That’s especially so since, with an emphasis on society as a complex system and the need for plugging everyday life into new ways of doing things, the Greens have been colonising Labor’s vote among the new classes who are most demanding of a better deal. Curiously, our voting system has hidden the degree to which the Greens have crept up on Labor in an increasingly wide area of the “inner” city – as has the recent New South Wales election, in which territorial shifts in Green votes left the party with the same statewide vote, but the possibility of four seats in the lower house. Over the next decade or two, one could imagine a “Syriza” moment, in which a series of urban seats become as solidly Green as they were Labor, and the Greens “do a Xenophon” in the senate, heading towards two quotas, pushing Labor to one. Such changes seem impossible until they happen. Then, in retrospect, they are seen as obvious. If Labor does not find a way to get down and dirty in the politics of big ideas, it may itself be in need of superannuation.
This article was first published in the print edition of The Saturday Paper on Apr 11, 2015 as "New dogs, old deals". Subscribe here.