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Mar 28, 2013

The strangely malleable legacy of the Hawke-Keating years

Labor figures who now invoke the Hawke-Keating legacy appear to have forgotten what actually happened back then. And if Labor really wants to embrace the H and K era, here's what they should do on superannuation ...

The vanquishing of Kevin Rudd’s leadership ambitions — at least while Julia Gillard remains prime minister — has done nothing to quiet the debate over Labor’s direction; indeed, that debate is more intense than ever …

“People have got to believe we have conviction, that we believe in what we stand for, there is a coherence of message and we are determined to pursue it. What we have to do is to take people with us.”

That was Simon Crean’s statement last week, that Labor’s woes wouldn’t be solved by a mere change of leadership, as he invoked “the great things that I was part of in the Hawke-Keating government”. Then came the stream of ministerial resignations on Friday, with Martin Ferguson calling for an end to “class war” rhetoric. Bill Kelty has since chimed in to complain of a Labor Party that “cultivates division“.

That’s the Bill Kelty who as ACTU secretary warned that the election of the Howard government in 1996 would see the union movement take this approach to the government: “If they want a fight, if they want a war, they’ll have the full symphony.” Looks a little like division to me.

Crean’s attempt to wear the mantle of the Hawke-Keating years might also sit uneasily with those who remember how he was derided as an advocate of interventionist industry policy when Labor was trying to dismantle protectionism and open the industrial economy up to competition, when the term “Creanite” was one of the more printable Keatingesque term of abuse within the ministerial wing of Parliament House.

And given Labor turned its back on the Keating legacy after 1996 under Kim Beazley and Crean, the whole embrace of the Hawke-Keating years as a golden period of Labor success is rich indeed. The “Hawke-Keating era” now appears to mean whatever Labor figures want it to mean.

As for division and class warfare, anyone who remembers Keating enthusiastically dishing it out to his business critics might have difficulty with the idea that the 1980s were a nirvana of consensus politics, especially when Keating was happy to rise in Parliament and, in the course of a spray at Nobby Clark, suggest NAB was in financial trouble. Nor were those governments above stumbles, errors and policy disasters. When Keating lost in cabinet to Kim Beazley over telecommunications policy, Australia was handed a monolithic Telstra that held back communications infrastructure and strangled competition in Australia for a generation.

Still, the passage of time, as we know, lends a rather roseate hue to conflict and turmoil. Who knows — in the 2020s Labor figures might invoke the bravery of the Gillard government in implementing a carbon price.

What the Hawke and Keating governments were good at, undoubtedly, was standing up to special interests and rentseekers. Indeed, a key part of Keating’s communications strategy was to rip the mask off special interests opposing reform and expose them as the self-interested lobbyists they were. But when Wayne Swan does the same to mining magnates (in one of the few effective moments of communication this government has achieved), suddenly it’s “class warfare”, not just according to Christopher Pyne but to the miners’ friend at court, Martin Ferguson.

Under that logic, any effort to point out that business interests are not analogous to, and may even be in conflict with, the national interest is “class warfare”.

For some, that’s pretty rigorous logic. Remember Kerry Stokes last week at the media reform hearings declaring that there was no distinction between the interests of his shareholders and the public interest?

Labor is indeed engaged in a “class war” but it’s one declared by special interests, who use their entrenched position and wealth to protect themselves. Foreign mining companies unwilling to pay tax, media companies who won’t even self-regulate let alone accept government regulation or sections of the financial planning industry who don’t want the easy life of commissions and disengaged fee-paying clients. The ammunition in this war is advertising dollars, lobbyist payments and polling.

And Labor isn’t always on the side of the angels in this particular war. It runs an industry policy dedicated to propping up three multinational car companies. It only discovered rentseeking and gold-plating by electricity network owners when state governments went from being Labor to Coalition.

But if politicians want to misuse the term “class war”, then let’s be clear what it really means.

Which brings us to the current stoush between the smouldering ruins of the Rudd camp and the government over superannuation. One by one, they’ve lined up to criticise any plans to reduce tax breaks for the well-off on superannuation. First Crean. Then Joel Fitzgibbon — what happened to “you won’t be hearing much from Joel Fitzgibbon between now and May”, Joel?. Then Kim Carr. It’s almost as if we now have an official and an unofficial opposition, one in the Coalition, one on the Labor backbench.

As Treasury revealed in January, this is the year in which superannuation tax concessions are forecast to overtake housing (essentially, the CGT exemption on the family home) as the single biggest area of tax expenditure, at around $30 billion a year, and forecast to rise to $40 billion a year well before the end of the decade. In terms of sheer size, there’s a case for urgently reining in the cost of superannuation tax concessions to preserve Australia’s damaged tax base. Moreover, those concessions are disproportionately skewed in favour of higher income earners.

The Coalition has its own superannuation tax plans, intending to remove the Low Income Superannuation Contribution for low-income earners, further skewing the benefits toward high income earners.

Addressing the unsustainable growth in tax expenditures and doing so in a way that does not increase, and ideally reduces, the inequities of the current system, would traditionally be considered sound Labor policy. The Hawke-Keating government, which assiduously pursued tax rorts like fringe benefits exploited by high-income earners, may well have adopted exactly such an approach.

But for those who only last week were calling for a return to the spirit of the Hawke-Keating years, apparently it’s divisive and unfair.

Strange how things change.

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56 comments

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56 thoughts on “The strangely malleable legacy of the Hawke-Keating years

  1. Hamis Hill

    Malleable? Is it cool to know what a hammer is now?
    There’s one for the tradies!

  2. cairns50

    im a labor supporter through and through and have around 200,000 in my super and im just over 60years of age,not a big amount but i must admit even im concerned about them changing the rules

    why can not new rules be put in place for people who are 50 years or younger and who still have many years of work left in them to fund there super and leave the existing rules in place for people above that age limit

    after all we will all die eventually

    re the class war whats wrong with that? when the liberals, big business the miners and every other right winger stop attacking working class people then perhaps people like myself might start thinking different about them

    class warfare give us a break? i wont even bother going into how much the churches get for there schools compared to the govt state school system

  3. klewso

    Unfortunately, from the look, Labor seems rented out to rent-seekers?

  4. Richard

    on point bernard. thanks.

  5. GF50

    Bernard spot on analysis, and several posts already showing the unknowing of the confections of the “class warfare” People unknowing of the fact that it is only those on high income that are using their Superfunds as a “tax haven” to the detriment of those without high income to benefit mightily from that that “tax haven” and compounding interest.

  6. illywhacker

    Outstanding Bernard.

  7. JMNO

    Very good article.

    I remember that at the end of the Keating years, there were many people waiting with cricket bats to belt Keating as far out of politics as they could. He was resented for behaving like a toff, lecturing Australians about culture and how we should all think, and ramming engagement with Asia down everyone’s throats. I actually liked what he said but I knew many people who had the feelings I have described.

  8. Sharilynn Gerchow

    Surely Fitzgibbon has a conflict of interest here given that he must earn at least $190K/year according to the Remuneration Tribunal? Maybe Gillard should highlight that removing tax breaks on the super of high earners will impact on her Govt but they are doing it for the good of Australia?

  9. klewso

    I think it’s funny how and what some of these operators like to feed the press – if they went to Fraser Island they wouldn’t feed the dingos there?

  10. Kristian

    This is excellent stuff, Bernard.

    Thanks particularly for the details on some of Keating’s shortcomings. I’m a little too young to know a lot of what happened then, so it’s good to get some balanced info.

    That said, even in my relatively uninformed view, I’m sure he ran things better than the current lot!

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