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Kernot: The Leadership Test – Australia In The Next 20 Years

This is the text of Senator Cheryl Kernot’s Address to the Australian Democrats National Conference.

The Leadership Test: Australia In The Next 20 Years

Cheryl KernotThis 20th anniversary conference represents a remarkable achievement in Australians politics. It represents the survival, growth, determination and commitment of the Australian Democrats.

While this conference celebrates that achievement and looks back on our record over the past 20 years, I want to look forward. I want to look forward to where Australia is heading over the next 20 years. I want to raise questions about what sort of leadership is required to see Australia through those 20 years and I want to ask whether our major parties have the courage and the vision to build a fair, equitable and successful Australia in the face of the massive changes brought about by the new era of globalisation.

A few weeks back – in his self-congratulatory summing up of his first nine months in office – John Howard said he was glad to see Australia was ‘still an egalitarian society’. The questions he didn’t address were: for how long is it going to stay that way and what is a Howard Government going to do to maintain and enhance that egalitarianism?

He didn’t ask those questions because he knows that both the record of his government in office and the reform agenda the Coalition is laying down for the future lead to the same inescapable conclusions. To the question: how long will Australia remain a basically egalitarian society?, the answer is: not long. To the question: what is a Howard Government going to do about it?, the answer is: nothing.

Instead of offering Australians new choices and a fresh, more inclusive vision for the future, John Howard’s government brings to office an even tougher, even more hard-line version of the so-called ‘economic rationalist’ philosophy we have endured for more than a decade. There is nothing in John Howard’s record to suggest the Coalition have any new ideas or any willingness to shift away from the prevailing characteristics of the past 15 years of Australian politics: the dominance of economics over politics, the valuing of economic outcomes ahead of social and environmental ones, the obsession with the mechanism of the market and the placing of individual interests above those of the community.

That inability – or unwillingness – to reject those characteristics and to learn the lessons from overseas about the social failure of economic rationalism serves up little hope that either the Liberal or Labor parties can offer the sort of leadership Australia needs to prosper over the next 20 years.

The seeds for that inflexibility were sown in the 1980s, years which – as Paul Kelly pointed out in his book The End of Certainty – were essentially about the re-invention of the Australian political tradition: a re-invention driven by economic crisis.

Throughout the 1980s, the Labor Party grappled with structural and ideological crises, unable to reconcile its traditional political values with its hard-headed pragmatism in government and re-inventing itself as a party of the middle-ground..

That same period saw the Liberal Party also seeking to redefine itself, absorbing many so-called ‘New Right’ figureheads into the Party mainstream, developing a tough agenda of free market reform and undergoing a decisive transition from – in Paul Kelly’s words – “champions of the status quo to zealots of a new order”.

When The End of Certainty was published in 1992, it seemed unlikely that Australians would accept that transformation. For the Coalition to win the next election, Paul Kelly predicted it would be necessary for leader John Hewson to “dress his philosophy with a moral cause”. Hewson failed to win the 1993 election in part because he was unable to articulate a social vision for the nation and was unwilling – or unable – to spell out the social costs he expected Australia to bear in the cause of his economic reforms.

It was left to John Howard to learn the lesson, dress the Coalition’s philosophy in a moral cause and underpin it with the Liberals’ version of a social vision.

Howard succeeded in 1996 because he sugar-coated his pill with an essentially old-fashioned social message. He put a kind of “moral gift wrapping” on a tough free market agenda and many Australians who had rejected Fightback! bought essentially the same package in a new wrapping.

Mandate. Mandate. Mandate. I will continue to say – until I am blue in the face – that I do not believe those 46 per cent of Australians who voted for the Coalition in the House of Representatives looked too far beneath that gift wrapping. I do not believe they sat down and ploughed through every policy platform issued during the election campaign. I don’t believe many of them even paid much attention to the campaign. I believe they wanted a change – and they felt they could trust a Coalition Government led by John Howard because of the ‘safe’ language he spoke and the ‘moral’ tone he used.

In the end, tired of Paul Keating and 13 years of a Labor Government, they opted simply to accept John Howard on ‘blind trust’.

That trust has not been honoured. It’s not so much that $12 billion worth of election promises have been broken in 10 months, as the fact that those broken promises basically reveal that the ‘gift wrapping’ – the social vision, the moral tone – was essentially dishonest.

The Howard Government can now be seen as the culmination of that re-invention of Australian politics in the 1980s. Like its Labor predecessor, the Coalition is locked into seeing the only way forward as being through free market economic rationalism and – in the absence of a more imaginative, more responsible and more inclusive approach – it is forced (as was Labor before it) to disguise the fact that it is tearing into the social fabric in order to cut Australia’s cloth to fit that agenda.

John Howard might like to talk about ‘an egalitarian Australia’ but the speed of his Government’s deficit reduction program – and the choices it has made about who bears the brunt of that program – shows clearly that the Government does not see a role for itself in reducing economic and social inequality.

In fact, like economic rationalists throughout the world, the Howard Government’s actions suggest it is more than willing to accept growing inequality as the price we have to pay for the so-called benefits of free-market orthodoxy.

It is interesting to note that the Government’s language in recent months has shifted away from the election inclusiveness of governing ‘for all of us’ and moved towards almost Thatcherite terms of self-interest and the ‘need’ for individuals to look after themselves and have ‘choice’ (irrespective of how that choice is paid for).

In short, rather than recognising that Thatcherism was an unmitigated social disaster, the Howard Government is using the same sort of language, developing the same sorts of policies and foisting the same sort of selfish ideology on Australia (despite the fact there has now been more than enough time to see how such policies have failed in Britain).

Anthony Bevins – the political editor of the Independent newspaper in Britain – recently described the Thatcher legacy as a “money-grubbing, devil-take-the-hindmost culture in which the shop-door homeless and the privatised utility fat cats emerge as abiding monuments to Thatcherism”. On its record to date, the Howard Government appears hell-bent on taking Australia down a similar path.

In The End of Certainty, Paul Kelly makes this observation:

“Australians knew during the late 1980s and early 1990s that the nation was undergoing a decisive transformation, that it had reached the end of certainty. The task of leadership now is to create a synthesis between the free market rationalism needed for a stronger economy and the social democracy which inspired the original Australian Settlement ideals of justice and egalitarianism.

The end of certainty is not the end of history: it heralds the challenge to create a new history.”

While I do not accept that free market rationalism is the only – or even the best – way forward, I do agree with Paul Kelly’s view that Australia’s only real choice is to “strike a reconciliation between market efficiencies and government intervention” and to “internationalise the [Australian] economy within a framework of social justice and equity, thereby retaining the deepest and oldest Australian values”.

In my view, it is the ability to deliver those outcomes which will be the true test of leadership over the next 20 years.

It is not an easy test. It is a test which demands the courage to take a fresh economic and political approach, one which is geared to the times and which is not stuck, like a cracked record, in an out-moded and essentially selfish liberalism. Adam Smith – whom Australian Liberals love to quote – said that “if we follow self-interest, we benefit the community’. Well, growing inequality, rising unemployment and increasing polarisation of wealth shows that no longer holds true (if, indeed, it ever did) – and I believe the true test of leadership for Australia in the next two decades will be the ability to follow a different doctrine: a doctrine which says the opposite, a doctrine which says that ‘if we benefit the community, we benefit the individuals in it’.

As I have said many times before, this is not about retreating to the closeted, cosseted Australia of the 1950s. This is not about turning back the clock. This is about Australia’s ability to go forward as a nation in the new era of globalisation without relinquishing almost entirely any role for government, without abrogating our community responsibilities and without going further and further down the path of social exclusion and systematic inequality.

At its heart, leadership in these difficult times is basically about recognising the dangers in allowing inequality to increase in what is essentially an era of prosperity. In the words of Lester Thurow – Professor of Economics at the Massachusetts Institute of Technology: “it is fair to surmise that if capitalism does not deliver rising real wages for a majority of its participants in a period when the total economic pie is expanding, it will not for long hold onto the political allegiances of a majority of the population…….A large group of voters with free-floating hostility not benefiting from the economic system and not believing that government cares is not a recipe for political success.”

In other words, there is a strong connection between economic well-being, social cohesion and the maintenance of a successful and vibrant democracy. As Lester Thurow says: “the issue is not individual choice versus social bonds, but discovering the best mix of individual and communal actions that will allow a society to persist and flourish.”

In the Democrats’ view, governments must play a role in delivering and maintaining that mix.

The Democrats have been saying for some time that we need to define a new role for government – one that meets our needs in the next century, and one that is built on cooperation, openness and an agreement that we are not a bunch of self-interested, self-serving individuals, but a community and a nation which wants to go forward together.

But – of course – we have now had more than a decade of political leaders talking down the role of government. We have had years of Australian governments not wanting to talk the language of community. Instead, they talk in terms of extremes: competition versus cooperation, public versus private, globalism versus nationalism, public sector versus the free market – as though each of these concepts was mutually exclusive and cannot be combined into some sort of cohesive national policy.

Take public investment in infrastructure as one example.

Over the past two decades, our federal and state governments have run down, neglected and sold off our public assets and services. At the same time, they have failed to invest in new and much-needed infrastructure – such as public housing, public hospitals, schools, the rail system, and sewerage and water quality systems.

All this has been done in the name of competition, efficiency and – of course, the ‘Budget bottom line’. But while those concepts are important, there has been virtually no talk of the overall community value of such assets and services or of the wider social costs of these decisions. Instead, we hear of the benefits to shareholders, the benefits to business, the benefits to consumers.

But what if you don’t have the money to become a shareholder? What if you aren’t in business? What if you can’t afford to be a consumer of that particular good or service? What if you simply aren’t in a position to take advantage – through one means or another – of this overall shift from public to private?

The short answer is: these days, no-one devising policy particularly cares – because, more and more, we are seeing the notion of citizenship as being inextricably bound up with the notion of consumerism.

We are being valued as consumers first and citizens second – and our rights, entitlements and responsibilities are tied not to our status as citizens, but to our capacity to buy goods and services. That’s our value – and that’s the level at which Australian governments are pitching their message.

That sort of attitude underpinned last year’s debate on the partial privatisation of Telstra. During that debate, the Prime Minister talked about how wonderful it would be for “the mums and dads of Australia” to be able to buy a share of Telstra (conveniently overlooking the fact that they owned it already and that its success translated into revenue for the use and benefit of all Australians).

The Minister for Communications, Richard Alston, told the Senate that “privatisation is a good thing because everyone can afford to buy shares” – a statement which can only be interpreted as being wildly out of touch with the daily reality of the lives of a great many Australians.

In other words, Australians as the public owners of Telstra meant very little to the Government, but Australians as the private shareholders of Telstra suddenly gained a new, greatly enhanced value.

I think that represents an insidious shift in values and one which basically tells Australians they have no status as the public owners of an asset or the public providers of a service or even the public consumers of a service. They only acquire status when they buy something – when they enter the hallowed halls of private ownership or private consumption.

That is not only dangerous from the perspective of excluding from participation all those people who cannot afford to buy things, it is also irresponsible from a national perspective – because it fails to acknowledge the value in public investment.

For many years, the Democrats have been calling for an increased level of public investment in Australia, not just in the more obvious forms of infrastructure, but in the significant areas of environmental and social capital, most notably education.

The official response to that call is – of course – that we cannot afford it.

President George Bush, when asked why America did not invest more money in public infrastructure, lamented that “we have more will than wallet”. But, as the American economist, Robert Reich commented: “only excessive politeness should constrain one from inquiring: Whose will? Whose wallet?”

As Robert Reich – and others – point out, even if we accept (which, incidentally, I don’t) that the necessary funds cannot be allocated from elsewhere in the federal budget, it is quite clear that economies like the United States and Australia have plenty of room for spending more on public infrastructure and investing more in human capital if they bite the bullet on taxation reform and get serious about addressing the revenue, rather than the expenditure, side of their budgets.

In Australia, however, we’ve now had some 20 years’ worth of governments – both State and Federal, both Labor and Liberal – putting up maintenance of the “budget bottom line” as being the principal (if not the only) role of government.

Not only is that a very narrow definition of the role of government, it is also a definition which restricts – almost totally – the capacity of governments to deliver equitable outcomes and to build a nation which is properly equipped to meet the challenges of globalisation.

There is – for example – a role for government in planning and implementing successful industry policy and, yes, it may involve ‘picking winners’ and backing them. But their preoccupation with the expenditure side of the Budget means neither of our major political parties give themselves much leeway to adopt that sort of approach because neither of them wants to talk about the need for increased revenue and, in doing so, give up the possibility of offering that greatest of all potential electoral sweeteners – the tax cut (the ultimate ‘gift-wrapping’).

The Democrats say it is time to talk about choices and to put such choices about taxation and revenue raising to Australians.

Here’s a recent example: a report was released just this week in Victoria which showed the State’s child protection system was unable to adequately protect children from abuse. This is at a time when there’s a lot of talk in Victoria about when the Government will be able to offer Victorians a tax cut. But we don’t hear Jeff Kennett saying to Victorians: look, you can have a tax cut, but that will mean we can put even less money into our child protection system. Or you can have no tax cut – or a reduced cut – and we’ll put that money into improving our child protection system.

I think that, when faced with that sort of choice, most Australians would say: oh well, I’d rather not have the tax cut and know that the money was going into saving children’s lives.

And that’s the sort of talk – talk about what governments actually do with our taxes, talk about the relationship between revenue raising and levels of service – that we never hear from our major political parties.

But this debate is about more than having the political willpower to tackle the revenue as well as the expenditure side of the Budget ledger. It is about what governments see as their fundamental role. Do they just sit on their hands and let the free market operate without restraint? Or do they accept a social or moral responsibility to keep their hands on at least some of the levers and to intervene to ensure inequality does not become entrenched and that national goals and outcomes are met?

How John Howard and the governments which come after his answer those questions will, in large measure, determine what sort of country Australia becomes in the next 20 years. In my view, John Howard will give the appearance of being a strong leader – through more of that Prime Ministerial ‘gift-wrapping’ – but he will fail the test of leadership because he (and his party) will remain locked into a limited and blinkered view of the world which sees virtually no role for government and which places the interests of the few ahead of the interests of the wider community.

John Howard likes to talk a lot about ‘mainstream Australia’ – but his policy choices of the past nine months illuminate his view of what ‘mainstream Australia’ is. His ‘mainstream Australia’, as reflected by those who benefit from his policies, does not include unemployed Australians, or sole parent families, or Aboriginal Australians, or those needing legal aid, or families with children in state schools or in universities, or people using public hospitals.

John Howard’s ‘mainstream Australia’ seems to be mum and dad and two or three kids living in a nice leafy suburb, earning a reasonable income, buying a nice house, wanting to send their kids to a nice private school, paying for private health insurance, and resenting having to pay taxes for services they don’t use or for people they don’t particularly want to help. There is little place for altruismin John Howards’s ‘mainstream Australia’: in fact, I think his ‘mainstream Australia’ is a smug , self-satisfied and greedy place – and I do not believe that is what a majority of Australians are or want to be.

Of course, most Australians aspire to work to earn sufficient money to meet their needs – but they are not greedy and they do care about others. That’s why I think ‘mainstream Australia’ is a much, much broader – and a much fairer and more caring place – than John Howard imagines it to be.

I think the majority of Australians want to be part of a fairer, more equal society which recognises our interdependence and they want to hear some ideas on how that can be achieved. I believe the majority of Australians do not want to live in a greedy, self-interested and divided society.

I believe they are willing, if offered the choices, of making some sacrifices (through their taxes or whatever) to ensure other Australians have jobs or that every Australian child gets a decent education or that we all have the same access to good health care.

In other words, let’s hear our leaders talk the language of inclusion, not exclusion, and let’s put some real choices – and not sham ones – to Australians.

Let’s also ask Australians what sorts of global citizens we want to become. Do we want to pull up the drawbridge and live in glorious isolation or do we want – if only for our own benefit – to play a part in developing a more cooperative approach to solving international problems?

Once again, despite its high moral tone, the Howard Government is taking Australia backwards when it comes to meeting our international obligations and standing up for basic human rights.

Look at the issue of child labour, for example. Towards the end of last year, the Minister for Trade, Tim Fischer, told the World Trade Organisation firstly, that Australia would not support the United States’ efforts to put labor conditions on the WTO agenda and secondly, that we would not support either the inclusion of ‘social clauses’ into trade agreements or an international study into child labour.

As our former Senator, Sid Spindler, wrote a few weeks ago in the Age “Nothing better illustrates the moral bankruptcy of unfettered economic rationalism than the fact that our Trade Minister is …. prepared to deny his personal …. standards of decency to curry favour with the ASEAN countries in the hope he will gain market access for Australian products.”

At the same time, the Howard Government has cut Australia’s foreign aid contribution to an all-time low, even further reducing assistance to foreign aid programs designed to provide education opportunities for children and to develop alternative sources of income for poverty stricken families.

And once again, I think that is a case of governments encouraging people to be selfish – encouraging them to reject the idea that they are part of a wider community or a nation, or part of the solution to a global problem like the exploitation of children.

The Democrats do not see how we can make genuine progress as a nation – and, indeed, how we can succeed as an independent and cohesive society – until we restore a sense of community and re-define a role for government in protecting, enhancing and building upon that sense of community.

I have very little faith in the capacity of our major political parties to do that.

For a start, the ‘short-termism’ of the election cycle condemns them to a pattern of cynical opportunism and populism – leaving little scope for longer-term planning, for exploring and talking about new ideas, or for simply showing some genuine leadership.

But our major parties are also now captives of the agendas into which they locked themselves during that political re-orientation of the 1980s. Having chosen to go down almost identical policy paths, they do not now want to talk honestly and directly to Australians about the significant social costs of their decisions. They don’t want to talk about the price of their reforms and they don’t want to ask Australians whether that’s a price they are prepared to pay.

Look at this week’s unemployment figures. After twenty quarters of economic growth, we still have rising unemployment. Many Australians wonder why that is: how, they ask, can we be in a sustained period of economic recovery and still have 800,000 people out of work.

They might also ask: just when are our major parties going to say this challenge requires something more from governments than sitting on their hands and waiting for a miracle? Well, ‘when hell freezes over’ is probably the answer because both the previous and the current government’s policies depended upon keeping unemployment high as the price for keeping inflation low (and, in turn, keeping the financial markets happy).

That’s the greatest piece of dishonesty that has been foisted on Australians in the last fifteen years – that firstly, our major parties actually care about unemployment and secondly, that they are doing something about reducing it.

The fact is that our governments use high unemployment as both an economic and political tool – they use it to avoid tackling the hard issues such as taxation reform, reform of the financial sector and pro-active industry and export enhancement policies. And the Howard Government’s push to reduce the Budget deficit too quickly and too severely shows that it – too – is willing to wear the social costs of unemployment and to consign a growing number of young Australians to the employment scrap-heap.

Where does all this leave the Democrats? Well, while we might not be an alternative government, we are an alternative opposition. And we are an alternative opposition because we have consistently articulated a credible – if not always fashionable – alternative vision.

Our demise has been predicted at every federal election in the last 20 years. But we are still here and we show no signs of decline. Just last week, we surpassed the record of 19 years and one month that the DLP lasted in the federal parliament. That is no mean feat.

The Democrats have forged a role in contemporary Australian politics both as political insurance against the excesses and rituals of governments, and as a party which is not obsessed with political point-scoring and negative politics, but which genuinely seeks and talks about policy outcomes.

We continue to receive support for an idea – that the processes of parliament are an important avenue through which citizens can effect change. We also increasingly receive support for a vision – reflected in the fact that we are often referred to as the “intellectual” opposition in this country. It is the consistent advocacy of this vision over the last two decades that can only make our policy positioning even more powerful as time goes on.

We have never embraced economic rationalism. We have always questioned and challenged its assumptions and its view of reality – and it is very pleasing to now find ourselves part of a growing world-wide disenchantment with the single-mindedness of economic rationalism and free-market theories.

Throughout the world, a challenge is being issued to those who pursue economic policies based upon exclusion, alienation and greed. People are challenging policies and practices which lead to growing economic and social inequality – and they are asking whether there is not a better, fairer and more inclusive way to face the future.

Over the next twelve months, I intend to seek support for an International Charter of Action, to be signed by progressive parliamentary parties throughout the world, a Charter which calls for – and actively seeks – a uniform international response on key political and economic issues.

For the Democrats, I believe the phenomenon of globalisation signals the need – and the opportunity – to start building alliances with like-minded progressive parties in other countries.

I see the Charter as being one way of building those alliances while having the practical effect of calling on progressive parties throughout the world to take action on and introduce legislation in their own countries in key areas – areas such as controlling international financial transactions, protecting the environment, enforcing labour standards and upholding human rights.

I believe political parties must face up to the challenges posed by globalisation and I want to see the Australian Democrats contribute – in a small but hopefully significant way – to generating a ‘progressive’ international response to those challenges.

But developing that international angle does not detract from the work we have done – and have still to do – here at home.

After all, the Senate is not the only game in town. It is certainly not the only house of review. The Democrats have held the balance of power in the South Australian parliament for a longer period than in the Senate. We have had representation in New South Wales since 1981, when Lis Kirkby was first elected.

We also have a very strong upper house team ready to contest the South Australian election, where we are holding up well in the polls and where Mike Elliott and Sandra Kanck will run a strong campaign to defend our upper house position.

Today, we are also proud to welcome two members to our National Conference as State MPs from Western Australia where we have delivered on our promise to translate our Senate support into the State arena. Helen Hodgson and Norm Kelly were elected to the Western Australian upper House less than one month ago – and their election (along with the election of Andrew Murray to the Senate earlier in the year) heralds the beginning of a new and exciting era for the Democrats in Western Australia.

Let’s also not forget that (coming off the back of our success in 1996) we will have only two of our seven Senators up for election in the next federal election, giving us the opportunity of increasing our representation to ten (or possibly eleven) Senators and holding out the prospect of re-gaining balance of power in our own right.

Of course, entry into the House of Representatives is the ‘holy grail’ for any political party with an aspiration to govern. For the Democrats, that aspiration is complicated by an underlying tension between what our current generation of voters expects of us and what our current generation of members demand of us: between being a ‘Senate watchdog’ and being “policy makers and policy leaders”.

Time alone will lessen this creative tension, as we become accepted as acting legitimately in both roles and are seen to be managing both with fairness, skill and balanced political judgement.

In this past year, I believe we have demonstrated our capacity to manage both those role and we have re-established that we can make the tough decisions, that we do not shrink from the hard issues and that we will not simply sit on the sidelines and do nothing more than whinge about the government.

I know that to some of you – and to me – political growth and progress sometimes seems painfully slow. It often seems a case of two steps forwards and one step backwards. But we need to remind ourselves that we are a small party and a young party. We need to remind ourselves that – despite those handicaps – our achievements have been great.

Every election for the Democrats is a struggle – in financial terms, in terms of the hours of work members, Senators and staffers put in, and in terms of the sheer emotional strain of fighting for survival – but I believe our 1996 result and the result in Western Australia signals that we have turned a corner.

After 20 years, we are entitled to say with confidence that we are here to stay and, after 1996, we can say with equal confidence that our best is yet to come.

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Malcolm Farnsworth
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