The Politics of Hope

Here is Bill Shorten's contribution to 'Coming To The Party: Where To Next For Labor?', edited by the Hon. Barry Jones and published by Melbourne University Publishing.

Labor can win the next federal election. In the first decade of the 21st century, winning or losing Australian elections is far less about being Left or Right, but much more about being in the right place at the right time.

For reasons I'll outline, and which I hope will be persuasive, Australia is in the right place for a Labor victory. Whether it'll also be the right time for Australians is largely in Labor's hands.

This makes me an optimist. I believe the time ahead will suit Labor more than the conservatives. And I am sustained in my optimism by the views of Arthur Schlesinger Jnr, an American political historian, expressed in his book The Politics of Hope. Addressing the sense of pessimism that has confronted democratic parties of reform and social justice when in Opposition for long periods, he cited Ralph Waldo Emerson's description, made as far back as the 19th century, of the differences between American progressives and conservatives.

Mankind is divided between the party of conservatism and the party of innovation, between the party of the past and the party of the future, between the party of memory and the party of hope.

In Australia, Labor is still the party of innovation, the future, and of hope.

My starting point for believing that we can translate these ideals into winning government is our national political history. It shows us that there is nothing inevitable about a conservative ascendancy or, for that matter, an unchallenged Labor era. Australian politics is marked by alternating cycles of change and conservatism, progress and inertia, nation-building and national status quo. As I read this history, it is these underlying long-term cyclical shifts that provide a better guide to the future than the headlines and sound bites that too often pass for political analysis, even among the political professionals.

This cyclical pattern emerged after World War I with an incumbent Nationalist Party followed by the James Scullin Labor administration. The Depression brought Labor's defeat, and the conservatives dominated for the next decade. During World War II, Australia turned to Labor. But from 1949 to 1972, conservative governments held sway in Canberra. So much so that until 1972 no Australians in their early forties or younger had ever voted in an election that returned a Labor government. Labor's doomsayers and gloomsayers need reminding about that. After all, the Howard Government has been there for only ten years, not twenty-three, and Labor was in power for thirteen years before that.

The reality of Australian society, much like the US, is that its political support is remarkably evenly balanced between the two major political parties. The shift in two-party preferred votes (TPPV) between 49 per cent and 52 per cent may be statistically small, but on election night it can be heartbreakingly decisive, as we saw in 1998. Labor--currently running in opinion polls at anything between 47 per cent and 51 per cent of the TPPV--is absolutely in the game for 2007.

The salient energy

In articulating his notion about the politics of hope,
Schlesinger argues that in politics, 'Innovation is the salient energy, conservatism the pause on the last movement'.

The concept of pause fits the Howard Government all too
well. In thwarting the move to a republic, neutralising the
hope for reconciliation with indigenous Australians, repudiating the agreement to raise the superannuation contribution to 15 per cent, downplaying global warming and the importance of climate control, and in failing to secure and protect Australia's long-term water resources, the conservatives sat back or slid backwards.

The most extreme backwards step, well beyond a mere
pause, are the recent changes to industrial relations, which returned Australia to the 1890s. Yet John Howard is neither a Liberal federalist nor a leader in the Alfred Deakin liberal tradition. The IR changes rely on a contemporary and questionable interpretation of the Constitution's corporation powers, and the GST is hardly a free marketeers' tax. Howard has been less the ideologue he is portrayed as by some of his critics, more the opportunist.

Unquestionably, we have seen the Howard decade end any remaining strand of liberalism in the Liberal Party. For Labor, the 'socialist objective' is also dead. Labor is the party of social progress rather than a party that slavishly adheres to intellectual doctrine, committed to ends rather than just one means.

Whitlam, Hawke, Keating, Beazley all share a natural political instinct. They all believe in national health care and insurance and abidingly in unions, collective bargaining and a strong, fair, safety net. Not to mention national superannuation and savings. They are internationalists--with an emphasis on Asia, the United States and the multilateral institutions. They all assert the primacy of education. All these Labor leaders are staunch republicans. The successful Labor values of Hawke, Keating, Whitlam and Beazley have at their core traditions of liberal social democracy. Applying this philosophy to key issues will help guide Labor in the future.

Returning to the distinction between the party of memory
and the party of hope, the challenge for Labor is to cut through the ambiguity and apparent convergence created by Coalition incumbency and capture this key distinction.

Assuming, then, that in the Howard Government's fourth term we are in a transition period and marking time, the question for those Australians who are dissatisfied with 'politics as pause', is clear: What are the domestic and global factors that will shape the challenges that the next Australian government-- Labor or Coalition--will have to face? In Schlesinger's terms, what are the innovative ideas, the 'salient energy', that Labor will need if it is to earn the right to govern?

Building Australia

Labor's future rests upon understanding what lies ahead for
Australia in the next twenty years. We must wrestle with a raft of issues, most crucially, the continuing extraordinary growth of India and China as developing nations; our population living longer--half of all Australian girls born today will live beyond ninety-five years; the complete emancipation of women; the internationalisation of communication; a world warming destroying our environment; the growing schism with militant Muslims; and finally, huge threats to the future of traditional manufacturing.

Therefore, the key emerging domestic challenges in the economy over the next ten to twenty years are the need for the renewal of nation-building and infrastructure development; quality and accessible education and health care; strategic thinking about the ongoing urbanisation of Australia; planning for the continuing internationalisation of the economy; developing sustainable industry and technology; a fair and yet
globally competitive tax system; and the management of our
water resources looking ahead to 2050.

Governments, communities, business have to make choices
as to how they handle these issues. The real political debate of the post-Howard generation is how we respond.

Industrial relations

Dealing with industrial relations and the changing workplace sits between economic and social policy and goes to the heart of the difference between Labor and the conservatives. The new industrial relations laws introduced in early 2006 are wrong in principle because they are unjust. But if their purported goal is a rise in productivity, they are also unlikely to work in practice. In our insistence that this radical legislation attacks the wages and job security of Australian families, we are echoing the views of the great majority of Australians who oppose the changes. We know this not only from the opinion polls, but also from the Howard Government's Finance Minister Senator Nick Minchin who recently told the HR Nicholls Society that most Australians violently disagree with its draconian impositions.

But Labor must do more than oppose and promise to repeal the legislation if it comes to government. The new laws
undoubtedly represent a change for the worse. Instead, the
Labor Party, working closely with the union movement, must
find ways to repair the damage caused by the new workplace laws, which have been rightly dubbed Stalinist in their reliance on a command-and-control Canberra bureaucracy.
We could consider introducing a Repealing Act.

Furthermore, once people realise that these IR laws are even worse in reality than they sound in theory, then it may be achievable to get a majority of voters in a majority of states to vote to include protections for workers (such as guaranteed minimum annual leave, a guaranteed right to collective bargaining where a majority of employees vote for it) in the Constitution for all time.

We must develop better ways to encourage education and
the acquisition of new skills by employees. Finding a place for compulsory arbitration, collective bargaining rights and union recognition must be accompanied by encouraging unions to upgrade and evolve in their services to members.

For all of the electorate's opposition to the new laws, however, Labor must guard against turning industrial relations into a single-issue campaign. There are other critical areas of social policy that will demand innovative thinking.

These include the creation of a more efficient and equitable health care regime, tackling the rising costs and quality gaps in education from kindergarten to university, continuing the drive for equality of women, reconsidering population planning and immigration,
and elevating the status of the government's policy development and administration for indigenous Australians.

Selling out the nation

The Howard decade has seen the sell-off of Australia's assets: the staggered sale of Telstra, the privatisation of all of Australia's major airports and of the National Rail Corporation. The post-Howard government needs to be nation builders to ensure our children and grandchildren grow up with significant and durable infrastructure assets.

We have creaky, ageing infrastructure. By 2025, major population centres will need more water than will be available. By 2020, the gap between energy supply and demand will be more than 50 per cent. In the same decade, road freight movements involving truck trips in urban areas will swell by 900,000. Traffic congestion costs will increase from $13 billion to $30 billion.

Despite winning eighty-four gold medals at the Melbourne Commonwealth Games, Australia ranks only 17th out of thirty OECD nations in broadband Internet take-up. The future is in nation building, not selling. Roads, rail, aviation, ports, energy and dams are unquestionably assets for the next great leap forward in productivity.

Growing our economy is vital to any dream of not simply being the world's quarry. How to finance these projects is the key.

Health care

John Howard is no friend of Medicare. An astute politician, he has only backed Medicare late in his political life, but his piecemeal and shallow support for it has only served to undermine its objectives. The Medicare Safety Net is a case in point. How can Medicare under John Howard really be about making sure all Australians have access to affordable health
care when the higher the income, the greater the access to the safety net? When the six electorates in Australia that received more than $5 million each in benefits under the scheme, also happen to be among the electorates with the country's highest income earners? When the seat of Maribyrnong--which includes several pockets of serious disadvantage--only received a total of $1.7 million in 2005? But the wealthy seat of Higgins--held by Peter Costello--received a total of $4.4 million?

Australians over the Howard decade have acquired a health
system that most can't afford, a system that does not work as it should, and now requires a national savings scheme to
underpin its future.

Health care is the biggest issue facing the country and the
Liberals are stuffing it up. There won't be the people, infrastructure or money available to cope in the years ahead as our population ages--all because the Liberals don't really care about it. It's inevitable that if something is in short supply it will cost more so the only people who will get adequate health care will be those with the means to afford it.

Education

The Howard Government has got education miserably wrong. Many Australian parents are increasingly concerned about the lack of opportunities for their children to develop their full potential.

It is a sad fact that many people, particularly students from working families, now don't consider university education due to the huge debts that accumulate while obtaining a degree. Universities have been put in a 'no win' situation by the Howard Government, which has cut funding to universities as a percentage of GDP from 0.76 per cent under Labor to 0.55 per cent. Deprived of essential funding, universities have been forced to gradually increase their HECS fees throughout the Howard years, and by up to 25 per cent more in one fell swoop this year. The rising costs of university has scared away
many gifted students from ordinary backgrounds: in Victoria, between 2000 and 2003, the number of university places offered to Victorian government-school students fell by 3.1 per cent and by 1.2 per cent for students from Victorian Catholic schools.

Of course, university should not be exalted as the preferred post-secondary education route, but the story is no more positive when it comes to opportunities at TAFE. Many young Australians are also being deterred from taking up apprenticeships because of the cost of upfront fees.
Government spending on vocational training actually fell 3 per cent in 2005. In contrast, the Beazley Opposition has come up with a smart plan to introduce Skills Accounts that would remove TAFE fees for traditional apprentices. Labor will make an initial contribution of $800 per year for up to four years in an apprentice's Skills Account, wiping out the full cost of the fees.

And it is not just secondary and tertiary eduction that needs support. Investment in early learning is also critical. New studies reveal that every dollar spent on disadvantaged children in the critical pre-school years generates a 17 per cent annual return to the child and society. By the time they were aged forty, society would be repaid many times over through reduced crime and welfare payments, and from higher tax revenue. A highly skilled and educated workforce is crucial to our future. We all know how tough it is to compete internationally.
Well-paid global jobs are underpinned by education and
technology.

We have witnessed the exodus from public schools because
of the massive shift in funding by the Liberal Federal
Government from public to private schools. This excludes
many people and puts huge financial pressure on many other
Australian families who just want the best for their kids.

Tax reform

Wayne Swan and Lindsay Tanner have recognised that our two-class tax system is utterly unjust. It is riddled with exemptions, concessions and deductions that are explicitly designed to favour particular types of income or expenditure.

We don't have a progressive tax system in Australia. Our tax system is bell-shaped. It is a rotten system and it is most rotten for the people who earn less than $85 000 a year and who pay 70 per cent of all income tax. It rewards avoidance and evasion. Minimisation, negative gearing and concessional capital gains are devices available to the few, not the many.

The best way of achieving a simpler, progressive income tax
structure is by lowering everyone's rates and ensuring that
those on the lowest incomes, with the highest effective marginal tax rate, benefit as much as a proportion of their income paid as higher-income earners. Tax shelters are not worth the trouble when tax rates are low and the threat of prosecution is high. But evidence does show that tax shelters and advisers start to look attractive when rates rise above 40 per cent.

Superannuation

The current level of minimum compulsory superannuation at
9 per cent was among the final achievements of the Hawke-
Keating period. Despite the fierce resistance of the conservatives at every stage, one can only speculate what the national balance sheet would look like now without the $700 billion superannuation savings.

Yet as our foreign debt explodes, unless compulsory superannuation moves to 15 per cent over time, many working
Australians will retire into semi-poverty.

Competing globally while maintaining a local focus

The resources sector has largely carried the Australian economy over the last decade. But the guarantee that the commodities wave won't stop is insufficient preparation for the future. The settings are clear. We also need environmentally sustainable industries, services industry, exports and higher skill levels.

There needs to be industry policy that aims to take advantage of the radical growth in China and India. China is an economic growth engine. On its current rate of growth, China's GDP will be equivalent to that of the United States within thirty years and its standard of living is set to increase fivefold.

This is creating new policy challenges for the United States evidenced, in part, by the general backlash escalating within the United States on foreign ownership. The pushback against Dubai economic interests purchasing control of P&O's American wharves is a recent example. China has gigantic reserves of American currency--this will eventually put pressure on American foreign debt and eventually Australia's runaway foreign debt. We have to engage with China. But it cannot be as a supplicant.

The rule of law, progressive floating of their currency
and the ability to make direct investments into China are necessary developments over time. Fair wages and labour rights in China are also vitally important. Australia is well placed not to be deputy sheriff in the region but rather a good friend of the United States and China. By supporting a stronger United Nations (UN), Labor can help promote tolerance and understanding. We would like China to be more liberal and to see both the United States and China more committed to the environment.

As part of a civilized belief in the UN, Australia can rightly play a leading role in our part of the world. In particular, the social and political difficulties facing Papua New Guinea and some other South Pacific nations are an immediate and present danger on our doorstep. A sense of national security starts with our neighbours, and Port Moresby or Bougainville merits more pressing attention than Baghdad or Kabul. If we continue to fail in our region--as we are currently--the kowtowing of Howard in London or Washington over issues far removed from our shores becomes contemptible as well as demeaning.

The internationalist strand of Labor is a continuous theme,
substantiated by Labor's credentials on the international stage. Evatt was one of the creators of the UN. Whitlam brought the troops home from Vietnam and recognised China. Both the Hawke and Keating Governments established APEC and
Gareth Evans as Foreign Minister negotiated the Cambodian
peace initiative. Modern Labor eschewed the 'Yellow Peril' dog whistles. From Gareth Evans to Kim Beazley and Kevin Rudd, Labor has long had representatives superbly accomplished to maintain Labor's internationalist commitment.

On a national level, we know that strong regional centres are necessary if we are to avoid becoming a nation of three Mexico City urban sprawls in Brisbane, Sydney and Melbourne. Just as there is a trend to internationalisation, there also exists a very strong current towards local communities, cities and regions and debates about the devolution of real power to communities have resonance outside the large capital cities.

Labor's recognition of regional concerns is evidenced by
the fact that the ALP holds power in every state and territory government.

Winning in 2007...

This is not the time for pessimism. The ALP has one task--to
get into government and to lay the foundations for the future.

John Curtin and Winston Churchill, two great 20th-century
leaders, were sustained not by the periods of Opposition but by what they wanted to achieve upon winning office. While victory is never inevitable, with the possession of good ideas it is a matter of time. Labor should be optimistic because it is our sense of purpose for what we can do when we win federally that makes people enthusiastic.

Australians are more economically literate and interested
today than ever before. The nightly news bulletin carries a
stock exchange wrap-up (who would have believed that even
twenty years ago!), and people understand the importance of
their superannuation account's annual return. The wealth of
average Australians today has exploded, to levels their grandparents could hardly have even dreamt of sixty years ago (emerging from the double whammy of the Depression and
WWII).

But that wealth hasn't come free. Our private debt is out of control and our expenditure on non-productive consumption is literally inexhaustible and, by most international standards, shameful. The bind for every political party, of every political leaning, is that it is hard to be the bearer of bad tidings. Few politicians are lining up to be the party pooper.

But encouraging Australians to look at our economic prospects--warts and all--with a sense of realism and urgency is what serious politics will be all about over the coming decade.

In summary, I base my confidence that Labor can win the
next election on four grounds. In each case we have the potential to win back past Labor followers and to attract swing voters. Taken together they make the case for believing a Labor victory is there for the winning.

• We can offer working Australians better management of the economy and better policies in health, education and

• We can offer Australians more positive ways of growing

• We can offer more to those Australians who are not receiving their fair share of the economy or opportunities,

• We can offer better hope to the many Australians

But we can only make those offers credibly if we fully restore the burning spirit that has driven Labor to victory at critical times in the past. Where might we seek inspiration for that restoration of spirit?

At the beginning of this essay I referred to Arthur Schlesinger Jnr's The Politics of Hope and I argued, contrary to much conventional wisdom, that the times will favour us, the party of innovation--not the conservatives--as we prepare for the next federal election. Schlesinger was writing as the 1960s dawned in the United
States. But, remarkably, his words ring true today for Australia.

At periodic moments in our history, our country has paused on the threshold of a new epoch in our national life, unable for a moment to open the door, but aware that it must advance if it is to preserve its national vitality and identity. One feels that we are approaching such a moment now-- that the mood which has dominated the nation
for a decade is beginning to seem thin and irrelevant,
that it no longer interprets our desires and needs as a people; that new forces, new energies, new values are straining for expression and release.

Labor can give voice to those new forces and energies at work in the Australian nation if it resists the counsels of pessimism inside and outside the Party. Instead, we should recall that, historically, we have won government when we have overtaken the conservatives with the ideas we offer, and when we behave not as a frustrated Opposition, but as an alternative government ready and willing to assume office.

That is the prospect that must both drive and sustain us. And that is why I am an optimist.