Quarterly Essay 70

Richard Denniss

• Publisher: Quarterly Essay
• Year: 2018
• Print ISBN: 9781760640651
• eBook ISBN: 9781743820506
• Topic: Politics & International Relations
• Subtopic: Global Politics
• Index: Politics & International Relations

The author of Curing Affluenza looks at how neoliberalism ate itself and what comes next. For thirty years, we were told that privatisation and economic reform would be good for everyone. But now the results are in – we have seen public services undermined and corporations gaming the system. Damage has been done to the regional Australia, blue-collar workers and the collective ethos – a language of shared sacrifice has been degraded by lies.As a result, we are seeing a political backlash against "reform." For the Coalition in particular, this is a threat to unity. In this passionate essay, Richard Denniss argues for a more pragmatic, consultative politics. He asks whether the major parties can find a new, and persuasive, way to talk about the national interest.

DEAD RIGHT	How Neoliberalism Ate Itself and What Comes Next
	Richard Denniss

The era of “economic rationalism,” small government and blind faith in market forces is dead. It was buried and cremated by Tony Abbott’s government, although neither he nor Malcolm Turnbull has yet delivered its eulogy, for the simple reason that, even as a corpse, the idea that what is good for business is good for the country has so much rhetorical and political power in Australia.

Senior Liberal MPs want to nationalise coal-fired power stations, yet they oppose nationalisation of the banks. They want to subsidise the Adani coalmine, yet they oppose subsidies for renewable energy. The NSW Liberal government recently bought a football stadium and plans to spend hundreds of millions of dollars fixing it up. And a Liberal prime minister, Malcolm Turnbull, says damn the budget deficit, let’s cut tax revenue by $65 billion and see what happens.

Neoliberalism, the catch-all term for all things small government, has been the ideal cloak behind which to conceal enormous shifts in Australia’s wealth and culture. It has provided powerful people with the perfect language in which to dress up their self-interest as the national interest. Without such a cloak, policies to slash income support for those most in need while giving tax cuts to those with the most money would just look nasty.

Over the past thirty years, the language, ideas and policies of neoliberalism have transformed our economy and, more importantly, our culture. Much has been written for and against privatisation, deregulation and the outsourcing of public services. And much has been written about the social and political consequences of rising inequality. But the purpose of this essay is to consider, in the age of Trump, Brexit and Pauline Hanson 2.0, how the neoliberal agenda of “free markets,” “free trade” and “trickle-down tax cuts” has wounded our national identity, bled our national confidence, caused paralysis in our parliaments, and is eating away at the identity of those on the right of Australian politics.

Australians have been conned into privatising assets on the basis of a budget emergency that those pushing big tax cuts clearly do not believe exists. And we have been conned into deregulating the banking sector on the basis that competition among the banks would ensure good service at good prices. The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has killed off that idea once and for all. The larger result is a fundamental loss of faith in experts, in institutions and, increasingly, in democracy itself.

While there is no doubt that neoliberalism has succeeded in undermining faith in the role of government, there is much doubt about where Australia is now headed. Could the political right unravel? What is the proper role of the state in a world where even Liberals want to nationalise some industries? How should our democracy respond to the rise of populism? What would a renewed democracy look like, and where might it be found?

The ghost of Australia past

Australians once prided themselves on the unique place of mateship in our culture. It was, we were told, sticking by your mates that helped previous generations survive the horrors of Gallipoli and the Thai–Burma railway. This was the Anzac spirit.

Australia was also once seen as a workers’ paradise. We led the world by introducing paid holidays, paid sick leave and the eight-hour day. Back in 1944, Robert Menzies, our longest-serving prime minister and hero of Australian conservatives, declared:

The moment we establish, or perpetuate, the principle that the citizen, in order to get something he needs or wants and to which he has looked forward, must prove his poverty, we convert him into a suppliant to the state for benevolence … That position is inconsistent with the proper dignity of the citizen in a democratic country.

In the ’50s, tall poppies were cut down, bosses were bastards and the Anzac spirit prevailed over the more American notion that the Devil can take the hindmost.

But the past is another country. Australians now work some of the longest hours in the developed world, unpaid overtime is the norm for most workers, and our unemployment benefits are among the stingiest in the developed world. Citizens are encouraged to dob in dole bludgers and keep an eye on suspect (Muslim) neighbours. Conservative politicians tell those who disagree with their worldview to leave our country. Yet although those same politicians have worked to undermine the collectivist spirit of our labour market and welfare system, they still talk endlessly about mateship and the Anzac spirit.

As Prime Minister Turnbull said in 2017:

We do not glorify war – Anzac Day is not the anniversary of a great victory. But it commemorates the triumph of the human spirit, the patriotism, the sacrifice, the courage, the endurance, the mateship … Australian values have been fought for from the time we became a nation. Freedom, parliamentary democracy, the rule of law, mutual respect, equality, the opportunity to get ahead, the fair go – the opportunity to get ahead but lend a hand to those who fall behind.

Yet the neoliberal value of looking after yourself first is fundamentally incompatible with the value of sticking by your mates when times are tough.

The shift is not just economic, but cultural. This is, of course, no accident. Margaret Thatcher is often remembered for her famous assertion that “There is no such thing as society,” but her views on the role of economics in shaping the society she said didn’t exist are far more illuminating:

What’s irritated me about the whole direction of politics in the last thirty years [she spoke in 1981] is that it’s always been towards the collectivist society. People have forgotten about the personal society. And they say: do I count, do I matter? To which the short answer is, yes. And therefore, it isn’t that I set out on economic policies; it’s that I set out really to change the approach, and changing the economics is the means of changing that approach. If you change the approach, you really are after the heart and soul of the nation. Economics are the method; the object is to change the heart and soul.

If any cultural institution represents what the political right in Australia sees as the heart and soul of the nation, it is the Australian War Memorial. Opened in 1941, it was built to help a nation at war remember those who gave their lives. Above its memorial pool are long cloisters, where the Roll of Honour, listing the names of the 102,185 men and women killed while serving their nation, is inscribed on a series of bronze plaques. No ranks are displayed and all names are the same size, because “all men [sic] are equal in death.”

Yet neoliberalism has managed to change the heart and soul of the War Memorial. While all men might be equal in death, all sponsors must also be thanked in the appropriately sized font. The memorial courtyard now contains an eternal flame, a donation from AGL, Santos and East Australian Pipelines. The gas for the eternal flame is “generously” provided by Origin Energy under a sponsorship agreement. The gas industry’s “sacrifice” in funding a tiny fraction of the total cost of the Australian War Memorial receives far more prominence than the names of Australians who gave their lives for our country. Lest we forget our sponsors.

The War Memorial is afraid to ask for too much government help, lest the shrine built to help us remember those who made the ultimate sacrifice impose a burden on today’s taxpayers. Luckily, neoliberalism offers a solution for the fiscal shame of offering free admission: corporate sponsorship.

It gets worse. While the irony of sponsorship by the oil industry, a fuel over which so many wars were fought in the twentieth century, might be missed by some, surely no one could miss the irony of BAE Systems, Lockheed Martin, Thales and other weapons manufacturers sponsoring the Australian War Memorial. All receive acknowledgment in type far bigger and more prominent than those who died for their country. Indeed, the advertisement acknowledging the support of BHP dwarfs the portrait and life story of General Kenneth Eather, who commanded Australian troops during the Kokoda campaign. Lest we forget who deserves the most recognition.

Of course, it is not just our war memorial that tells us it is now the private sector that provides for us. Our other great cultural symbol, the sports stadium, has been transformed by neoliberalism as well. Once named after great Australians, these stadiums are today more commonly named after the corporate sponsors that contribute 1 or 2 per cent of the cost of constructing and running our cities’ most recognisable public buildings.

Consider Lang Park in Brisbane, for example. It was named after John Dunmore Lang, a Presbyterian minister and politician who was among the first to call for an end to convict transportation and for Australia to become an independent republic. In 1994 the name Lang Park was dropped and the ground became known as Suncorp Stadium – a moniker embraced not just by the football codes that use the stadium, but by the politicians who built it and by the ABC commentators whose editorial policy otherwise bans them from giving corporate endorsements.

Although it is named after the finance company Suncorp, the cost of building and maintaining the stadium falls almost entirely to the taxpayer. And although Suncorp declares on its website that it “is committed to ensuring [the stadium] remains a popular community venue for sport and entertainment for years to come,” just how much support Suncorp provides is deemed commercial-in-confidence. Apparently, while Suncorp is proud to use its customers’ money to promote the generosity of the company, it is not so proud that it is willing to specify how much this support amounts to.

What we do know is that Queensland taxpayers contributed $280 million to the redevelopment of Suncorp Stadium back in 1999. And although taxpayers contribute more than half of the operating budget for Stadiums Queensland (the government agency that owns and operates Queensland’s major stadiums), with ticket sales contributing tens of millions as well, it is the corporate sponsors, not the taxpayers or customers, that are thanked for providing such a prominent public asset.

And then there is the Westpac Rescue Helicopter Service, which operates in several Australian states. It is taxpayers, not bank shareholders, who contribute the vast majority of the service’s operating budget, though this is noted nowhere in publicity for the service. In New South Wales, for example, the Westpac Rescue Helicopter Service is actually an arm of the state government–funded ambulance service. Westpac simply bought the naming rights to this essential community service.

In one of the more outrageously disingenuous pieces of PR imaginable, a TV advertisement featuring two actors pretending to drown illustrates Westpac’s generosity to the community. As the father and son cling to an esky near their sinking yacht and the rescue helicopter hovers overhead, an earnest voiceover tells viewers that the father “doesn’t bank with Westpac. Not all Australians are with Westpac. But we’re with all Australians.” The ad omits to mention that the reason the helicopter picks up non-Westpac customers has absolutely nothing to do with the generosity of Westpac and everything to do with the fact that the NSW ambulance service is publicly funded to provide exactly that service.

While Westpac is keen to be associated with rescue helicopters, the oil and gas industry is keen to be associated with the War Memorial, and companies such as McDonald’s are keen to be associated with children’s hospitals, corporate sponsorship and branding is far less common for other essential community services, such as prisons or sewers. Indeed, it is no accident that brands like Transurban are not more visible along the length of their highly expensive and highly profitable toll roads. It’s as if the private sector is keen to associate itself with the most popular services provided by the public sector, while distancing itself from the unpopular ways in which it makes so much money from citizens.

In short, corporate sponsorship of public assets and public services plays a key part in persuading the public that nothing good can be done without the help of the private sector. Whether it is rescue helicopters, stadiums, war memorials or art galleries, the Australian public has been exposed to decades of public tribute to the corporates that provide just a per cent or two of the funding, while simultaneously being told that governments, which contribute the vast majority of the funds, are broke, inefficient and can’t afford to deliver the services they once could. Neoliberalism has trained us to thank our sponsors, not our fellow citizens, for what we have collectively achieved. But many of those generous sponsors work hard to minimise the generosity of their tax bill. The Australian Tax Office is currently chasing BHP for around $1 billion in underpayment of tax. If the company paid its taxes in full and ditched the corporate sponsorship, we, and the war memorial, would be far better off.

Trickling down

Sponsorship is a cunning sleight of hand, but trickle-down economics is the greatest of all neoliberal tricks. Trickle-down economics works, but not in the way its advocates suggest. Policies such as cutting the company tax rate won’t do much to create jobs or boost the incomes of the poor. But trickle-down economics has been incredibly effective in shifting our national debate away from what government policies are right, fair or necessary and towards a permanent conversation about which policies are affordable, efficient and provide people with the right incentives.

Living in one of the richest countries in the world, Australians can afford to design and build any public services or infrastructure we want, but the budget deficits caused by decades of big tax cuts mean that our debate now revolves around what is cheapest to provide rather than what is best for the community. And rather than conduct broad debates about our national priorities in the plain English spoken by the majority, we now hold narrow public debates in the econobabble spoken by the minority.

In making our rich nation feel poor, and in depicting those with the least as the biggest cause of our “budget emergency,” neoliberalism has made us more selfish and less trusting of each other. It has changed our culture so fundamentally that it has reshaped the way we see ourselves and the way we see each other. In turn, it has radically altered the way we see the role of government.

Consider health policy, for example. Should all children with cancer receive high-quality treatment, or only those whose parents can afford it? Should all adults with cancer receive the highest level of care, or only those who have the most expensive insurance?

Different people in different countries come up with quite different answers to these questions. Not even Barack Obama suggested that all US citizens should have universal access to high-quality health care, and not even Tony Abbott suggested that Australia’s publicly funded Medicare system should be removed.

In Australia, our history and culture has given us a health system that is cheaper and more accessible than US citizens can possibly imagine. Cost–benefit analysis can’t explain the differences between the health systems of the United States and Australia, but culture can. That said, while the Australian health system might look generous compared to the US system, such a comparison does not set a very high bar. While only 4 per cent of UK citizens said that cost had prevented them seeking health care, in Australia the figure was 16 per cent. The Australian health system could help more people if we wanted it to, but after thirty years of neoliberalism it’s not at all clear that we do. For decades, successive governments have overseen steady increases in co-payments for medicines and other out-of-pocket expenses, while the decision by individual doctors to bulk-bill some patients and not others means that our health care system is beginning to look more like doctors’ charity than universal care.

Another neat neoliberal trick has been to train Australians to think that questions like “Should we help people with cancer?” do not concern cultural values, but market values. Rather than ask ourselves whether we should help, or abandon, those in need, for decades we have been encouraged to focus on why people are in need and what the “unintended consequences” of helping them might be. If we give sick people free medicine, will they really value it? If we help everyone in need, will they take less care of themselves? If neoliberalism has taught us anything, it’s that people respond to incentives, and we wouldn’t want to give sick people the wrong incentives, would we? If we did, trying to help them might end up hurting them. And nobody wants to hurt the sick … right?

But we do hurt the sick and the poor. We do force sick and disabled people to make impossibly hard choices about how much to spend on their health care rather than their children’s Christmas presents and school excursions. In describing the results of a survey of patients, the head of the Consumers Health Forum, Leanne Wells, concluded, “People avoid going to the GP, are failing to get scripts filled and are not going to see specialists they are referred to.”

Robert Menzies didn’t think like that. He didn’t think we should make citizens convince the government they need help. In 1944, after warning against converting people into “suppliant[s] to the state,” he went on to say:

People should be able to obtain these benefits as a matter of right, with no more loss of their own standards of self-respect than would be involved in collecting from an insurance company the proceeds of an endowment policy on which they have been paying premiums for years.

Of course, our culture has changed radically since Menzies was prime minister. On the evidence of this statement, he’d be considered a leftie these days.

Australian politicians now worry aloud that helping the disabled, single parents and the jobless might rea...

Table of contents

• Cover Page
• Title Page
• Copyright
• Contents
• Dead Right: How Neoliberalism Ate Itself and What Comes Next Richard Denniss
• Correspondence
• Contributors
• Back Cover