Being part of the elite, or the “political class”, is bad news at the moment. While politicians are no longer bandying around the term with quite the abandon they were after Trump’s election, elites are, it’s universally agreed, in bad odour with the electorate. They’re perceived as out-of-touch and unable to understand the perspective of ordinary Australians who are doing it tough, day to day, seen as freeloading technocrats with no grasp of the real world outside the Canberra bubble. Does our political class deserve such opprobrium? Have they given ordinary Australians a bad deal? Perhaps we should check the record before joining in the abuse of elites.

Take unemployment. The political class doesn’t seem to have performed too badly there. Trend unemployment hasn’t been above 7% since the 1990s, even though the participation rate is a full two percentage points higher now than then; the participation rate for women is a full five percentage points higher. This reflects Australia’s strong economic growth record, including a quarter-century without a recession.

This isn’t a modest or symbolic achievement: those of us old enough to remember the last recession understand how massively damaging a recession and persistently high unemployment can be, not merely economically but socially, with hundreds of thousands of workers effectively consigned to the scrapheap and families wrecked by lost incomes, defaulted mortgages and lost opportunities. And unemployment hits the most marginal, those with least resources, and least opportunity, hardest.

[Hanson and the political business model of downward envy]

That extended period of economic growth has also delivered strong income growth — Australians are considerably wealthier than they used to be. A Productivity Commission report in 2013 estimated individual incomes were nearly 40% higher in real terms than in the 1980s, and household total incomes were up over 60% in real terms; nor was that growth all at the top end of the income scale — all income quintiles enjoyed real growth. Australians also enjoy far lower inflation than we used to. We’re now used to sub-3%, even sub-2%, annual inflation, but in the 1980s we had 2% CPI growth per quarter, which drove a debilitating and endless cycle of worker pay rises in an effort to keep up with prices. Politicians who now pander to electoral concerns about “the high cost of living” evidently weren’t around in the early 1980s, when we had both a recession and 10% inflation.

That success in curbing inflation reflects effective inflation-targeting by an independent central bank — and has provided more flexibility for the Reserve Bank to use monetary policy to stimulate the economy through lower interest rates for business and household borrowers. The RBA’s cash rate rarely fell below 5% between the early 1990s recession (which was partly a result of the RBA lifting rates over 15%) and the global financial crisis. It’s now been below 4% for nearly five years and below 3% for nearly four. And whereas most people in the 1980s had only the pension to look forward to in retirement, Australians now have over $2 trillion in retirement savings in the superannuation system, which also provided key ballast for the economy during the financial crisis. Australians increasingly have the capacity to ensure they have a comfortable retirement rather than relying on welfare — with people on the aged pension one of the most serious areas of poverty.

Meanwhile, Australians have never been healthier: men live 7.7 years longer than they did in the mid-1980s and women live 5.3 years longer; Australians are the seventh longest-lived people in the world, and continue to extend their longevity and continue to improve the quality of their health. In the 1980s, less than half of Australian school students completed Year 12; now that’s nearly 85%, while access to tertiary education has expanded dramatically. Both violent and property crimes are falling nationally. And whatever your views about so-called “political correctness”, modern Australia is a far more comfortable place for most of us than in the 1980s, when racist, homophobic and sexist abuse and harassment and “jokes” about disabled Australians were tolerated and, often, encouraged.

[Keane: congratulations, Australia, you’re healthier than you think]

This is hardly to say there aren’t major areas of policy stuff-up: housing affordability in Sydney and Melbourne is a particular failure of successive governments; the NBN has been reduced to an embarrassment by the current government, we’ve turned our backs on responsible climate action, indigenous disadvantage remains serious and, in some areas, resistant to policy efforts — although the frightening indigenous life expectancy gap has narrowed in recent years. And a regular theme of these failures is that the interests of younger Australians are ignored in favour of more powerful and well-established demographics.

But on the most important issues to voters — the economy and jobs, health and education — policymakers have performed well for non-indigenous Australians, and probably better than any other government in the world. And it has happened under both sides of politics: Labor opened up the economy, established and opened university access, established Medicare and compulsory superannuation, kept the economy going during the financial crisis and prevented the second mining boom from blowing up the economy. The Coalition restored fiscal discipline in the 1990s, improved the tax system, gave us an independent central bank and wisely abandoned the “fiscal emergency” stuff in 2014 and instead opted to pump-prime the economy.

Yes, both sides produced a litany of poor decisions and short-term stupidity along the way, but they got a lot of the big calls right. So why are the elites so demonised, when they’ve performed relatively well? 

Partly because we’ve forgotten what it was like when policymakers didn’t get it right. We’ve forgotten the hopeless queues of hundreds of people applying for a single job, of angry mortgage holders rallying in shopping centres against high interest rates, of the struggle of feeding and clothing a family when high tariffs meant basics took up a huge chunk of household income. We’ve forgotten that 70 used to be old age, that most kids left school in year 10, that a uni education was for the wealthy even after Gough made it free. We’ve forgotten how widespread the assumption was that women should remain subordinate and couldn’t undertake certain careers, or how “poofter bashing” was fine, the lack of interest in indigenous welfare and opportunity, how wages explosions always followed resources booms.

And it’s partly because some policy problems are, in the Australian context, very difficult. Australia is a rotten place for infrastructure policy because we’re an entire continent but only 24 million people. We don’t have the population density that enables the Europeans or the Chinese to build major transport infrastructure over much smaller distances. And because we’re only a relatively small population, a long way from the rest of the world, our markets are prone to oligopoly and monopoly, making it harder to use competition to benefit consumers.

[Despite scandals, 457s help a changing economy]

But elites are demonised because the elites themselves are the ones doing it. At any one time, half of the elite is devoted to heaping such opprobrium on the other half, so it’s easy to take their word for it and agree. The Coalition says Labor is out of touch and ideological. Labor says Malcolm Turnbull is out of touch, Mr Harbourside Mansion. Malcolm Turnbull accuses Bill Shorten of social climbing (of unauthorised entry into the elite, to put it another way). The wealthy celebrity politician Pauline Hanson — who insists she’s not a politician despite being a professional candidate for over 20 years — attacks the major parties as elites. Sections of the media, almost invariably wealthy old white men, some of them former politicians, attack various other members of the elite as elites (one of the serial attackers of “elites” is Mark Latham, a former Labor leader who now lives off a taxpayer-funded political pension). No one will give their opponent a break — everyone else is part of an out-of-touch elite that is hopeless and stuffing everything up.

No wonder Australians ignore the evidence and believe that the country has been stuffed by a bunch of idiots.

Peter Fray

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