Why does politics matter? (2007 Sydney University Fabian Society Gough Whitlam Lecture)

In tonight’s lecture I will be seeking answers to the following questions:

What is meant by politics and political commitment?
Why is political commitment important?
How does politics differ from other forms of commitment?
What does political commitment mean for the individual?

In exploring these questions I will refer to the career of Gough Whitlam and other prominent Labor leaders from the last century. I begin, however, with an account of what I mean by “politics” and ‘political commitment”.

By “politics” I mean electoral politics and all that is associated with it – organising, campaigning, and planning both in respect of the over-arching issues like policy and strategy and the more mundane issues like fund-raising and candidate selection. You can’t have one without the other and no one should ever underestimate the intellectual and practical commitment required to undertake these tasks efficiently and effectively. It is, as Ken Turner and Michael Hogan put it so well, a “worldly art”.

Politics, of course, deserves a broader definition than this. Indeed it could be argued that electoral politics is only one way of looking at it. We engage in politics by the way we live, the choices we make about consumption, travel and energy use and by the decisions we make about our health care and education. As individuals we can make a difference by the signals we send to government and register in the market place.

We also engage in politics by taking up issues in our community, be they local environmental controversies or broader national or international matters related to peace and war. We may attend meetings, distribute leaflets, and sign petitions. In this case we seek to put pressure on governments by moral and political force.

Both forms of activity are to be encouraged and are important in building a better world. However, they are limited in what they can achieve. The politics of personal choice can work but is all too often thwarted by collective decisions that push society in a different direction. Pressure from without can work too, but usually only in respect of single issues or local causes.

Whichever way we look at it elections and the politics that surrounds them is absolutely vital. It is the way we have structured and defined politics in our own Antipodean version of parliamentary democracy and representative government.

Approaching politics in this way has its critics on the revolutionary left and the populist right. To the former electoral politics is limited by capitalist reality whilst to the latter it is constrained by inbuilt checks and balances that constrain the popular will. The best reply to both has always been that of Winston Churchill:

“Many forms of government have been tried, and will be tried in this world of sin and woe. No one pretends the democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those forms that have been tried from time to time.”

Secondly, let me make it clear that I approach the issue from a left-of-centre perspective. You might say that is not surprising given my occupation of the last twenty years. I say it tonight, however, to emphasize the point that if you are on the left and committed to a more democratic, just and peaceful world it is my considered view that involvement in electoral politics , and acceptance of all the compromises that this entails, is the best way to move from theory to practice. We simply can’t afford to be self-indulgent about our political commitments when there is so much that needs to be done.

All too often the left has worked with the assumption that history is on its side and that somehow events will turn out in its favour. That there is an unhealthy level of arrogance in this view is clear to see but what is not so clearly seen is the disabling effect it can have. History should teach us that power is always contested and that those to the right will do so vigorously. Indeed those on the right have an advantage in that they tend to see ‘power’ and ‘power relations’ not as problems to be analysed and addressed but as normal and inevitable parts of the human condition. For them concerns relating to the tension between means and ends are less pressing and therefore less restricting when it comes to the development of political strategy and tactics. It is a world of dog eat dog, of winners and losers, and what is important is to make sure you are on the winning side.

What both left and right often fail to see however, is that change is a constant. How often do we find that what is necessity today becomes unnecessary tomorrow. How often do we find that what has currency today loses value tomorrow? Our democracy is designed to facilitate and manage this process of change. To this end we have politics and the politicians who make it all happen.

However, politics is not only influenced by change, it influences change. Political leadership is a major factor in setting the terms and conditions of change. What is involved here is not just a set of relationships between government and people, but also interaction between governments and oppositions. By their strength or weakness oppositions can influence what governments do and the way they do it. From time to time you can see a strong opposition setting the agenda for a government that has become tired and out of touch.

The end-point of politics is leadership. Just as political leaders lose authority when they fail to recognise change, they gain authority when they understand change and offer credible solutions for its management.

This takes me to the person after whom my address is named – Gough Whitlam. He was a leader who applied his intellect and exercised his will in the cause of changing the Labor Party. He challenged Labor’s While Australia Policy and its opposition to state aid for non-government schools. Not only did he win these battles he was successful in opening up and making more representative Labor’s National Conference, with both federal and state parliamentary leaders being given automatic membership.

Just as importantly he saw how Australian politics was being affected by new social movements and aspirations and how the question of urban infrastructure had become vital for those living in our newly created post-war suburbs.

He was a student of modern society and the forces that were influencing its development and he understood that Labor’s traditional method of looking at policy through the prism of public ownership of the means of production was limited and limiting, both constitutionally and politically. In this respect he challenged his colleagues to take up the causes of social research and pubic policy.

Even though the Whitlam government was only in power from 1972 to 1975 its effect on national life was explosive and its achievements many. Australia would never be the same again as a result of the Whitlam years. “Whitlamism” became a benchmark for political comparison and those on the left and the right defined themselves in relation to it. Criticisms of Gough and his politics are many, and in many cases they are valid, but no one can dispute the enormous personal and political effort he put in on behalf of Australia, democratic politics, and the Labor party. His is a case study of the marriage of intellect and political will.

His career is a perfect illustration of the importance of electoral politics and what can be achieved by involvement in it. Note also, however, that he needed supporters for his cause of party and policy reform. The foot soldiers for the Whitlam revolution were many and varied in background and temperament but they all played their role.

Whitlam’s story also reminds us of how far his opponents on the right were willing to go to defeat him. Not satisfied with the regular process of accountability via election they manoeuvred within Parliament to bring a premature end to his government with the assistance of State Premiers, a Chief Justice and a Governor-General. As never before in our history the consensus that underpins our political system was put to the test. It survived but the memory lived on only to be revived as a nightmare when the Australian government refused the Norwegian freighter MS Tampa (and its 438 refugees on board) access to Christmas Island. For the Australian right the task of gaining and keeping power is a serious and uncompromising business.

There have always been two responses from within the democratic left to the dilemmas posed by the militancy of the Australian right. There are those of the “whatever it takes” school of thought who see politics as Machiavellianism.

On the other hand there are those who preach the politics of patience, hard work and democratic principle. They argue that Machiavellianism creates more problems than it does benefits, particularly in respect to the politics of duplicity and unscrupulousness.

All too often those of a left wing disposition despair of these complications and either drop out or limit their politics to community-based activism. With them go huge resources of intellect, energy and enthusiasm.

Max Weber has offered us a way through this problem in his essay “Politics as a Vocation”. He distinguishes between the “saint” who always turns the other cheek as instructed to in the Sermon on the Mount and the “politician” who is both passionate about his objectives and responsible in their pursuit. The politician will take account of the “average deficiencies of people” and accept responsibility for the foreseeable consequences of his or her actions. We should , says Weber, feel the responsibility of our actions with “heart and soul”. Politicians must be able to say “in spite of it all!” when faced with the reality of an unreceptive or untutored people. Weber put it this way:

Only he has the calling for politics who is sure that he shall not crumble when the world from his point of view is too stupid or too base for what he wants to offer.

This argument holds for those who become involved in politics generally as much as it does for those who seek leading positions in political parties. In the modern world this is complicated by the fact that all politics is subject to comprehensive scrutiny by the media and increasing regulation by the State. There are guiding principles to assist in decision but no over-aching framework that removes ambiguity and uncertainty. This means that criticism after the event will always be possible not just in relation to the political judgements involved but also in relation to the moral calculations implicit within them.

Weber understood this very clearly and outlined the nature of the qualities that were necessary if one was to take up politics. “Even those who are neither leaders nor heroes”, he wrote, “must arm themselves with that steadfastness of heart which can brave even the crumbling of all hopes”.

These are not just philosophical arguments produced by academic philosophers they are day-for-day realities for those involved in politics. What distinguishes the Machiavellian from the non-Machiavellian is that the former all too often, and as a matter of acceptable practice, overlooks the moral tensions at the heart of the political project. Politics involves collective decision in a world of individual interest and aspiration. Politics involves distribution of burdens and benefits in a world of scarcity. Politics involves decisions involving peace and war.

Politics is about gaining power as well as using power. It involves that which separates us (gender, class, age ethnicity etc) as well as that which unites us as human beings. Reason often battles emotion just as minorities battle majorities and the future competes with the present. It involves loyalty and tribalism as well as objectivity and rationality.

Good politicians understand all of this but are not swept aside by it. It is when each of the tensions is ignored and politics reduced to a technique that we enter troubled waters. There is an important distinction to be made between the techniques that can assist politicians and politics as a technique. Politics requires research into both its ends and means but above all else it requires the capacity to judge and the will to decide in an imperfect world.

Let me illustrate this by reference to another great Labor leader John Curtin, Prime Minister of Australia from 1941 to 1945. Curtin came to the Labor leadership in difficult times. The party had split in response to the depression and was unsure of itself and divided on foreign policy. He held the party together and developed his own views on a defence policy of self-reliance and a stronger Air Force.

What particularly interests me about Curtin was his rejection of the idea of a national government of all parties which, of course, became a reality in the United Kingdom. He was put under enormous pressure to enter a national government but his belief in Labor as a force for good ran deep. His was a fight for social reform and national sovereignty not one or the other.

It was in a similar vein that he countermanded Churchill’s order to divert to Burma Australian troops returning from the Middle East. Curtin wanted them home to defend Australia against the Japanese. His was a fight for national integrity as well as a fight against fascism. This also took him to the American Alliance and support for new international institutions like the United Nations.

Curtin was certainly a pragmatist but underneath it all he had not just a strength of character, but a clear sense of Labor purpose. He recognised (and felt) the tensions involved in the circumstances he faced but was not afraid of decision. As Paul Hasluck said of his Prime Ministership.

His own dedication was complete. He held back nothing from his service to the nation.

What marked out Curtin and Whitlam was not only their strength of purpose but also their comprehensive account of the world and Australia’s place within it. They understood that political commitment required the big picture as well as the day-to-day tactics. Sometimes it means challenge, sometimes it means response; sometimes attack and sometimes defence. In other words politics needs heart as well as intellect.

In more recent times the Hawke/Keating governments also had a clear view of the national interest. They were governments of globalisation supportive of the free movement of capital as well as goods and services. They saw competition within and without as the key to growth and prosperity. This required a new balance between capital and labour to be achieved by an enabling state rather than a protective state and by the social wage rather than the living wage. They too challenged established interests and redefined social democratic priorities so they were relevant to the circumstances in which they found themselves.

When Labor’s domination of federal politics came to an end in 1996 it began to gain ground in the States and Territories. These governments have been pragmatic in style and reformist in content. They have brought ideas associated with strategic planning, sustainability and democratic engagement to their administrations. Some have embraced radical policies for the environment, incorporated charters of human rights into their legal framework and introduced many overdue changes to their political systems. Most recently WA achieved one vote value for its Legislative Assembly and Victoria proportional representation for its Legislative Council. State and Territory governments have been tough on crime but also keen to find new solutions to the causes of crime. They have governed from the centre and left little room for their opponents.

It was the Labor Premier from South Australia from 1967to 1968 and 1970 to 1979 who laid the foundations for progressive state government. Don Dunstan had a similar agenda to Gough Whitlam – Aboriginal land rights, sex and gender equality, urban amenity, electoral equality, multiculturalism – but applied it at state level. Similar reforms were introduced by the many State Labor governments that followed in the last quarter of the twentieth-century. These governments were part of a world-wide movement for devolution and regional and state innovation in governance and service delivery.

Bob Hawke understood what was happening with improved government at state level and developed the concept of “co-operative federalism”, with support from both Labor and Liberal Premiers. Through this model the States preserved their autonomy but agreed to pursue issues deemed central to the national interest, such as competition reform. Ironically it has been John Howard who has been pushing for more Commonwealth control to facilitate his agenda of Australian values and labour market de-regulation. His is not an agenda that is comfortable with the diversity that comes with federalism and pluralism. Nor is he comfortable with the Labor policies and priorities that have pursued by the States and Territories . One thing is for certain – he has never been able to convince the voters in the Labor States and Territories to vote out their governments.

This takes me back to the beginning and my definition of politics as electoral politics. There is, of course, a more general definition on politics as the process by which we peacefully resolve conflict. It’s all about negotiation and compromise and, in a democracy, it is underpinned by civil and political liberty and regular elections.

It is a messy business that allows for the expression and management of interests. Consensus is never assumed but is an objective towards which politicians need to direct their efforts. It is a worrying feature of much political commentary today that such processes are seen as inefficient and divisive. Impatience with politics and pluralism needs to be understood but ought to be carefully monitored by those committed to a free and creative nation.

To conclude. We need politics as a guiding principle for the way we govern our affairs. This is the definition to which I have just referred. It’s essentially creative and open to the future. It encourages debate and dialogue and promotes participation to the end of politically desirable outcomes. However you can’t have politics without politicians and this takes us to the main point of my lecture.

The very decision to become involved in politics is an act of leadership and certainly an expression of citizenship. Politics can’t just be an ongoing process. At regular intervals we need collective decision and political closure. Those of us to the left of centre would like to see those decisions favouring social justice, sustainability and peace. That won’t happen without political commitment and responsible leadership based on intellect and imagination or as Max Weber put it so well:

…all historical experience confirms the truth – that man would not have attained the possible unless time and again he had reached out for the impossible.

Professor Geoff Gallop was Premier of Western Australia from 2001 to 2006

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Posted in: activism,elections,gough whitlam,john curtin,leadership,left,max weber,politics,power

Fairness the Key to Unlocking Health (2008 Young Writers Competition winner)

The draft report from the National Health and Hospitals Reform Commission (NHHRC) has certainly sparked debate about proposals ranging from a universal dental scheme to regional management of hospitals. While the final report is eagerly awaited, the diverse opinions on the draft are indicative of the challenges presented by the myriad of competing demands from an immensely complex system. It feels necessary to focus these fragmented discussions and articulate an overarching vision for reform that considers “health” in its broadest sense.

In 1948 the World Health Organization presciently defined health as “a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity.” Yet it is only recently that attempts have been made to widen the focus of our “illness system” from symptomatic treatment of disease to a more holistic approach. Certainly the adequate provision of acute care services is a pressing concern: the shortage of beds and rates of post-surgical infections are emblematic of the strain on our public hospitals. Ongoing reform must address the chronic underfunding and poor management, and focus on improving the quality of patient care.

Nevertheless it is in the community and not the hospital where additional resources can make the greatest difference. General practitioners are the lynchpins of our primary care system, and are best placed to combat the tide of chronic disease that threatens to impose an enormous burden on future generations. A disease such as diabetes can cause devastating blindness and kidney damage, and yet can be prevented if we employ proper nutrition and daily exercise to reduce our bulging waistlines. Unfortunately the current remuneration structure rewards the quantity rather than quality of patient consultations. The NHHRC draft report proposes a pay for performance system, and a scheme that rewards GPs for achievements such as immunisation coverage, reduction in smoking rates and patient education has already been successfully implemented in the United Kingdom. Our approach must balance flexibility for doctors and patients with aspirational benchmarks that should encourage healthier lifestyles.

Of course GPs are not the only players in the primary care landscape, and indeed people in rural and remote communities may have trouble accessing their services. In the context of such severe workforce shortages we must utilise the range of skills possessed by nurse practitioners and allied health workers to provide comprehensive and accessible care. The NHHRC has already signalled the broadening of the Medicare benefits scheme, although some medical practitioner groups have voiced fears about the threat of task substitution and compromised quality. The key to overcoming these professional turf wars is cooperation: there should be a specific Medicare item to reward multidisciplinary meetings to discuss and coordinate the care of patients.

A testament to this professional fragmentation is the ludicrous exclusion of dental care from the Medicare system. The lack of readily available public dental services is such that the state of teeth and gum health in some communities can only be described as third-world. Further the artificial barrier that has separated the management of teeth from the rest of the body is increasingly being challenged by new scientific evidence, with poor oral hygiene linked with the risk of heart disease. The Denticare model proposed by the NHHRC is based on a levy that funds a mixture of public and private services. Regardless of the funding arrangement any new system must ensure equity and access for all that has been so sorely lacking from previous dental care schemes.

We should not limit policy initiatives to the restrictive medical paradigm, as systems researchers are increasingly realising the power of the social determinants of health. Disease burden and life expectancy correlate astonishingly well with social circumstance, income and the level of educational achievement. The World Health Organisation recently released a landmark report that declared that social inequality as much as any single disease was the root cause of millions of avoidable deaths in the last 10 years. Tackling entrenched poverty, the lack of affordable housing and youth employment tangibly improves the well-being of our population, and the formulation of government policy must be integrated across domains of health, welfare and social services.

Amongst the most critical of these broader health domains is education. Convincing evidence shows that quality early childhood learning has multiplicative benefits that last well into the future. It is a travesty that government funded pre-school places are not provided for all children in Australia. Although various state governments are inching towards this goal, the federal government must coordinate these efforts to ensure coverage for all, including disadvantaged minorities and Indigenous children. For later years of schooling we must develop a robust health education strategy beyond the traditional message of “practice safe sex” and “say no to drugs”. The democratisation of health delivery, including ready access to hospital statistics and the myriad of resources on the web, has the potential to revolutionise the patient-doctor relationship. Tutorials on the biology of disease, the roles of health professionals, and reliable sources of medical information would verse students in health literacy and empower our future health consumers.

In addition to these social determinants, the environment can remarkably shape the health of communities and individuals. Flawed urban design in our outer suburbs encourages residents to drive to nearby destinations rather than walk or cycle, and contributes to inactivity and obesity. The blight of pollution has been curtailed by stronger environmental protection laws, but the spectre of climate change looms large. The consequences of rising temperatures range from higher rates of vector born diseases such as dengue fever to more kidney stones from dehydration. We must ensure that major planning proposals require environmental impact assessments that explicitly consider the health of the community. And we must all endeavour to combat the great challenge of climate change.

The media’s fixation on waiting lists and emergency rooms has distorted our perceptions of what we need from an integrated and efficient health system. My proposals may seem a disparate collection of ideas, but are not intended to be a comprehensive reform program - I’ll leave that to the NHHRC. They simply illustrate a holistic concept of health that encompasses acute and chronic disease, social factors such as education, and the environment. Our community and political leaders must embrace this broader definition if we are to achieve the aspiration to become the healthiest nation by 2020.
 
Shafqat Inam was the 2008 winner of the Young Writers Competition

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Posted in: health,young writers competition

Labor's lost youth vote

The devastation of the Queensland election will leave many Labor supporters wondering what is happening. It only seems like yesterday that Labor held all governments and the Coalition did not win a single state or territory election for a decade. Today, the only majority Labor Government left is South Australia, there is no guarantee of victory in the territories and Labor’s primary vote seems stagnant in the high 20s/low 30s.

A recent Fabians event in Canberra examined voting trends in Australia over the past decades and its implications for the ALP with Professor Ian McAllister. Professor McAllister runs the Australian Election Study and used data from the studies to identify voting trends. Notably, the talk examined some of the voting groups that swung against Labor since the high point of 2007.

In 2010, the previous edge Labor had with ethnic voters disappeared and double digit swings from Labor were recorded amongst government employees and union members but most stark was Labor’s youth vote. Between the 2007 and 2010 elections, there was a shift of 18% of 18-24 year olds from Labor. This should sound alarm bells for Labor and its MPs. It is a growing problem as there is an increasing trend of minor party or non-party identification by each generation. It was 37% for Generation Y in 2007 compared to 27% for Generation X and 20% for the Baby Boomers. Given trends over the past decades, this is likely to have increased.

What makes this more dangerous for Labor is, as Professor McAllister noted for the first time, the Greens had a high vote retention rate. They retained 55% of their vote from the previous election whereas they had not before. In contrast, the Australian Democrats had a churn of 60% of their vote at each election.

There are massive implications as it creates a base from which the Greens vote can grow, primarily at Labor’s expense, chipping away and slowly growing, particularly if a large portion of this Generation Y’s vote is won and kept.

Why has this happened? In part because of the decline of historical social bases but it doesn’t explain why Labor’s primary vote held up as it did until it was in Federal Government. During a Howard era, Labor at least maintained its monopoly as “the left-wing of the possible.” It was the alternative where pragmatic opponents rallied to.

When it formed government and disappointed its base on a range of issues, most notably refugees, marriage equality, climate change and quite timid changes to industrial relations laws, and allowed the Greens to seemingly exert influence, it lost this mantle and any sense that it was committed to values or ideals. In the pursuit of an idealised centre, it took its base for granted.

Labor’s current problem is best summed up by Sheri Berman who noted in the Primacy of Politics that:

It is possible to win elections without proclaiming any commitment to ideology or a desire to change the world. But over time, the parties that do so become dead men walking, losing momentum, enthusiasm, and the ability to weather difficulties.

This is the challenge that Labor like many other social democratic parties must now confront. How successfully it can is yet to be seen.


***

A podcast of the ACT Fabians event: “Voting Trends and the ALP” is available here. Corresponding slides are available here.

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Posted in: alp,elections

Land ownership tax can lift burden on working poor (2006 Young Writers Competition winner)

There is widespread community outrage directed at those who receive welfare as their primary source of income. In 2006-07, the federal Government plans to spend approximately $92 billion on social security. But what if there was a group that had skimmed more than $300 billion from the Australian community in 2003-04 alone, and continues to profit at the expense of the taxpayer and young families?

There is such a group - land owners. Chances are, the majority of you reading this article fall within this group of so-called social bludgers. People no longer think of land ownership as social extortion by a ruling class, as they might have in Dickensian England, because of the breakdown of the landed aristocracy over the 19th and 20th centuries.

But this trend is turning full circle. Land in desirable locations is becoming monopolised by a shrinking number of property investors, while working families are pushed to the outer suburbs, building on what were, until recently, paddocks. Not only pushed to the fringes of the city, these families are forced into record amounts of debt to finance the privilege of living in the sticks.

The costs of this trend are not only personal, but social, economic and environmental. Rising inner-city land prices create a widening socio-geographic gap between those with easy access to key educational, employment, entertainment and cultural facilities located near city centres, and those excluded. The costs to narrow this gap through high-speed transport or resource duplication are massive, and met by the taxpayer. Furthermore, increasing use of transport, even public transport, increases environmental destruction and greenhouse gas emissions. This is not to mention the time deficit faced by those who spend two or three hours a day simply commuting to work or school.

Finally, there is the economic opportunity cost of all the investment going into property. Unlike investment in shares or loans to business, investments in land ownership generate no increase in productivity or output. They simply rely on population increase and general increases in societal wealth to increase demand for, and thus the price of, land. In this respect, untaxed land ownership steals income from those involved in production - in 1911 land owners received only 8 per cent of national income with workers and entrepreneurs getting 85 per cent. Today it is 27 per cent and 41 per cent respectively. Ultimately, land monopolies act as a constraint on continued economic growth as more income passes from businesses and their employees to landlords. At the same time, Sydney Harbour's deep-water foreshore is taken up for residential rather than industrial developments and small shops in Surry Hills go out of business because they can no longer afford the rents.

This is the problem of the new landed aristocracy, but what is the solution? Obviously, there is no quick fix to Australian's love of land ownership. However, tax reforms could help erode rather than fuel it, as John Howard's new home buyer's grant has done in recent years.

More than 100 years ago, American political economist Henry George proposed replacing all other taxes with land tax. Given the restricted ownership of land at the time, this was a very popular idea. Today, this extreme solution is neither politically nor economically acceptable. However, leaving such a large source of unearned wealth untaxed is equally repugnant. Thus, replacing a host of taxes that inhibit productive activity with a land tax that targets wealth and encourages economic efficiency seems not only desirable but imperative.

With Australia's land valued at $1753 billion in 2004, a land tax of just over 2 per cent could replace the $39billion raised annually by the GST - a tax that not only targets the poor and reduces consumption of goods and services, but also adds considerably to the administrative costs of Australian business. A 5 per cent land tax could not only eliminate the GST, but also take almost $49 billion off working Australians' PAYE income tax bills. This would be a 42 per cent reduction in income tax which could be targeted to reduce the tax burden on the working poor and minimise tax traps that act as disincentives for people to move from welfare to work or seek promotion.

An obvious problem is the tax bill of $26,000 per annum on an average Sydney block of land worth $520,000. But if a 5 per cent land tax were to be phased in by 0.5 per cent a year over 10 years this would give the market a chance to adjust, and land values would fall or stabilise, reducing the tax burden. Phasing in would avoid a catastrophic crash that may leave many people in a situation where they owe more than their house and land is worth (a situation already confronting families in many areas of western Sydney as the housing market softens there). Furthermore, outside of Sydney and the more expensive areas of Melbourne, most home owners would find they saved more in income tax and GST than they expended in land tax.

This would be particularly true for rural and regional areas, as well as the smaller capital cities, making these places more attractive for business and as places to live. This might assist in reversing the trend towards over-crowding in Sydney, Melbourne and Brisbane. The amount of land tax paid on an apartment would also be massively smaller than that paid on a house because the tax on the land would be spread among many residents, thereby encouraging more intensive use of expensive inner-city land, and discouraging the tendency to urban sprawl.

Land tax is not an instant panacea to Australia's land distribution and economic problems. Still, it is an essential component to any successful policy program. The type and rate of land taxation may vary from that suggested above, but a nationally levied land tax should be introduced and used to lift the burden of taxes that discourage efficient economic activity, such as the GST, income tax or company tax. The longer Australia's governments ignore the problem of land monopolisation and housing cost, the more painful both the problem and eventual solution will become.

Michael Janda was the inaugural winner of the Australian Fabians Young Writers Competition in 2006. He is currently an online business report for the ABC and tweets at @mikejanda

For more information & to enter the 2012 Young Writers Competition, visit: http://www.fabian.org.au/youngwriters

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Posted in: affordable housing,economics,land tax,public policy,taxation,young writers competition

It's time to re-examine universalism in public policy

Since the heyday of universalism under the Whitlam Government, Commonwealth Governments on the both left and right have pursued means-testing as a standard policy. Most recently, it has been the current Labor Government vigorously pursuing means-testing on a range of existing Government programs.

The progressive case for means-testing argues that targeting is better use of finite resources and it ensures that those who can afford services and benefits are not subsidised by those on lower-incomes. But is means-testing automatically more progressive than a universal program? A recent report from the British Fabian Society casts doubt on it.

Using international data, the report shows a paradox of redistribution. Where benefits are more targeted, the likelihood of addressing poverty and inequality decreases. Targeting leads to a fall in overall generosity, leaving poor families worse off than when benefits are widely available. Interestingly, the OECD made a similar point in December last year, stating that:

The main reason for less effective redistribution over the past 15 years was on the benefit side: levels were cut and eligibility rules tightened to contain expenditures for social protection

The reality is far more complex. Targeted measures may be more progressive that universal approaches but this is based on the assumption of the same amount of spending. Expenditure tends to decrease as welfare states become more targeted, meaning less is redistributed to those from a lower socioeconomic background. The report concludes:

Any increase in redistribution from an increase in targeting is clearly outweighed by the smaller expenditure that is associated with the lower willingness to pay of targeted welfare states

It becomes clear that the debate on universal versus targeted programs should not be one about which is more progressive. It is fundamentally about how much we are willing to pay for improved outcomes. For social democrats, the focus should be on how to ensure the fiscal sustainability of universal programs, particularly managing the effects of an ageing population and a shrinking tax base.

Traditionally social democrats have looked for new sources of Government revenue or ensured universal access to schemes but funded it through progressive taxation and levies. However, a greater focus should be placed on designing universal programs that both improve outcomes but long-term will increase taxation revenue and/or decrease cost burdens on government.

Introducing universal early childhood education is a good example of the latter. A 2011 publication on universal childcare by British thinktank IPPR cited recent evidence from Quebec. The introduction of heavily subsidised universal childcare in 1997 increased labour force participation amongst mothers with dependent children, generating $1.05 for each $1 spent and reducing government support in the form of benefits. Universal early childhood education is just one example of universalism that is both fiscally sustainable and will improve social outcomes. These types of universal programs, fiscally sustainable and providing a service that most people will use, could become a centrepiece of a modern social democratic agenda.

Nearly forty years after the election of Whitlam Government, it’s time for Australian social democrats to have a serious debate about the limitations of means-testing and re-examine the principle of universalism in public policy.

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Posted in: economics,means-testing,public policy,universalism,welfare