World awake to neoliberal failure, Australia carries on as though the Great Recession never happened

The defining feature of Australian politics since the collapse of the global financial system in 2008, and the subsequent unraveling of the neoliberal consensus  that has ruled policy makers’ minds since c.1980, has been our studied and willful ignorance of that massive event and the end of that consensus.

A quick scan of today’s papers reveals this contradiction, this weird condition.

In the domestic politics section, you see the daily articles calling for an increase in the GST, a consumption tax, in order to cut company taxes. Think tanks, conservative politicians, and the occasional Labor voice, are rolled out each day, to prescribe more of the exact same policy formula that has caused the world’s biggest destruction of wealth since the Great Depression.

All this goes on without the slightest hint of acknowledgement that this egregious formula is anything other than rational, natural and sensible – a consensus. There are promises of wonderful economic boons to all if we’ll only cut taxes on corporations and impose them on consumers.

The Australian maintains the steadiest drum beat, today’s edition no exception, promising a $30b gain if we hike the GST and cut company tax. (Sorry about the paywall. You can do that trick where you just google the title and you’ll get the whole thing for free). http://www.theaustralian.com.au/national-affairs/treasury/30bn-gain-in-gst-hike-company-tax-cut/news-story/d8b05bd7c7320cb40609c9342884d592

On the same day, reports from the wider world saying that this policy prescription has caused massive inequality and financial instability, anaemic growth and income stagnation, as well as social breakdown and environmental disaster.

Today we have this story in the Fairfax papers,

http://www.smh.com.au/business/the-economy/sixtytwo-people-have-the-same-amount-of-wealth-as-half-the-world-says-oxfam-20160116-gm7h6y.html

which says, inter alia, that an Oxfam report  ‘says a “broken” economic model underpinned by deregulation, privatisation and financial secrecy has seen the wealth of the richest 62 people jump by 44 per cent in five years to $1.76 trillion.’

And that while many people had been lifted out of absolute poverty in that time (as though this is a miracle of capitalism, rather than due to the hard work of the people themselves), the policies in place are actually preventing hundreds of millions of people from rising out of poverty.

​”Yet had inequality within countries not grown during that period, an extra 200 million people would have escaped poverty. That could have risen to 700 million had poor people benefited more than the rich from economic growth,” it said.

And it wasn’t just quoting those infamous communists at Oxfam (you know, the organisation founded by Quakers to persuade the British Government to lift the food blockade on Nazi-occupied Greece in WW2).

The report also quoted the IMF extensively, those red-flag-in-hand Trotskyists, who have said that the neoliberal consensus is now quite officially a Very Poor Idea.

‘The International Monetary Fund last year warned the gap between rich and poor in advanced economies was now at its highest level in decades, making widening income inequality the “defining challenge of our time” and suggesting “the benefits do not trickle down”.’

The solution to these worldwide woes is relatively straightforward for Oxfam:

​“It is also calling for workers to be paid a living wage rather than the minimum, for the end of the gender pay gap, for the influence of the powerful with vested interests to be kept in check, and for the tax burden to be shifted away from labour and consumption and towards wealth and capital.”

In response, well not in response at all, but in total, wilful and studied ignorance, what’s the suggestion from the great and good in Australia?

Increase taxes on consumption, and reduce taxes on wealth and capital. Cut the wages of the lowest paid, attack workers’ rights to collectively defend their living conditions by nobbling their unions. Do everything possible to accelerate the widening inequality that Australia has experienced at a faster rate than the rest of the world.

Maybe this is a type of Australian Exceptionalism? We used to have socialisme sans doctrine, socialism without doctrine, maybe now we have neoliberalisme sans pensee, neoliberalism without thought?

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About lukewhito

Politics, history, cricket, rugby league, bodysurfing. Kids and family. Love it all.
This entry was posted in Inequality, Tax and tagged , , , . Bookmark the permalink.

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