The 2021 Federal Budget and Budget Reply: What political strategies does it reveal?

Where does this leave the Left? The existential threat of runaway, catastrophic climate change cannot be allowed to paralyse immediate action, and in fact demands action that will increase social solidarity at the local and national level, create cultures of collective support and egalitarianism. Yet it also demands that we grapple with the strategic problem of the state and state power.

What’s a few billion between friends?

The 2021 Budget delivered a headline deficit of $106 billion this year, with deficits forecast for the next decade.

This caused many mainstream commentators to claim that Josh Frydenberg and the Liberals have given up on ‘debt and deficit’ rhetoric and have become ‘born again Keynesians’. While their anti-deficit spending rhetoric has certainly been forced into hiding - mugged by reality - the fact is the Liberals have been delivering budget deficits since they came to office, and will continue to do so as long as the Treasury tells them that a budget surplus would throw the economy into reverse.

The real story is not the size of the deficit, but the content of the Budget - the political priorities it funds.

The Budget is predicated on falling real wages and the withdrawal of income support for people who were, under the covid pandemic period ‘largesse’ temporarily raised out of poverty. Its spending priorities are mostly about tax cuts for the wealthy and handouts to business. Even its Aged Care package comes with no real reform, allowing private interests to divert massive amounts of public money into private profit. Some may say it is due to their ideological obsession with private over public provision, but it is just as likely that this is simply ideological cover for the transfer of public money into private hands. Socialise the losses, privatise the profits, is their creed. There is next to nothing to deliver the needed abatement in carbon emissions, only a paltry $500 million per year in new spending, for a $1.3 trillion economy. This is really no more than an insult. Worse still, the budget contains A$263.7 million to fund new carbon capture and storage projects, pouring more money into a technological fix that has so far failed to materialise. John Quiggin’s analysis lays out the full details here:

Labelled a pre-election by the press gallery you would think there might be some significant spends on the broad middle of income spectrum, but in reality there is little except big tax cuts for the wealthy and some much needed spending on aged care and disability, mostly to make up for previous cuts made to these sectors. It is a Coalition Budget through and through, widening inequality, propping up the fossil fuel economy through transfers of public money to private corporations and ignoring looming climate, health and economic crises with the smug confidence of the elite assuming that the poor and weak will be forced to pay the price of them.

However, in their own lights, it is a Budget designed to keep ‘middle Australia’ content to keep voting for the Coalition by providing the basic social services we have come to expect, while also maintaining tax lurks like negative gearing for the wealthy, and promising the prospect of even more income tax cuts for the upper income brackets. Unemployment won’t suddenly rise, the balance of power in society will remain unchanged, and while the poor, the unemployed, pensioners and the environment will continue to suffer, life will mostly go on. Usually this is enough for the conservatives to maintain their grip on power.

Labor’s response

The ALP response was based around Anthony Albanese’s claim that he understands the power and importance of government because “good government changed my life” and that while Australia has not suffered from the pandemic as much as other countries ‘we can do so much better’.

Its main political attack was on that fact that the Budget was based on ‘real wages declining over the next four years, after flatlining of the last 8 years.’

Albanese pitched to the typical persuadable voter, the old ‘working families’ by asking “Are you finding it easier to pay your bills? Are you more certain of your future.? Has it been good for you?”

Albanese chose to highlight, inter alia, Labor’s support for local manufacturing - especially of vaccines,; that Labor will put a referendum on Voice Treaty Truth; the government’s inaction and regressive attitude on climate change, and the lack of quarantine facilities and vaccine rollout.

The centrepiece of Labor’s Budget reply was a $10 billion investment in social housing, intended to build 20,000 new homes, including some reserved for women forced from their homes due to domestic violence. While it’d certainly be an improvement if it happens, it is a modest aim that involves ‘off-book’ spending based on assumed returns from a loan invested in the Future Fund. A Green New Deal or the Great Society it ain’t. You can watch Albanese’s full speech here

Albanese re-announced Labor’s modest suite of commitments to improving worker’s pay and conditions. ‘Labor’s plan for better and more secure jobs’ involves writing provisions for better job security into the Fair Work Act, cracking down on dodgy labour hire firms, public reporting on the gender pay gap for big companies, providing 10 days paid domestic violence leave, and making wage theft a crime. Albanese argued that lifting wages increased spending on local businesses - the traditional rhetorical rebuff to the business lobby looking to drive down wages.

Labor reiterated its plan, announced last year, for cheaper childcare, increasing subsidies and abolishing caps on rebates. He asserted that the Liberal plan for childcare only supports a quarter of the families that Labor’s will, and that the Budget papers show that their policy will actually cause the participation rate of women to fall.

As well as infrastructure and innovation funding, Labor talked about developing a lithium battery industry, instead of exporting the raw materials and then buying them back with value added, again fairly tried and true Labor rhetoric about supporting economic diversification and local manufacturing industries via government support and spending.

Labor’s response was standard, fairly solid social democratic/Laborist stuff, with nothing that most voters would find objectionable, but little that will particularly enthuse the politically engaged.

Strategy, or a lack thereof?

So what does this tell us about the relative strategic positions and aims of the main parties?

One message that this sends is that Labor doesn’t seem to believe that certain ‘politically engaged’ sections of the polity have neither the ability, nor the intention, to help it win government. Under Shorten, and previously under Keating, there had been attempts to make sure most lobby groups and community campaigns could point to a ‘win’ in the Budget or Budget reply speech, in the hope that this would bring along a voting constituency come election time. Even if some of these groups were seen as more or less hostile to, or wary of Labor, Shorten hoped to give them cause to support a Labor government.

Under Albanese, there seems to be a more selective attitude towards lobby groups and activist movements, something he has flagged publicly in his ‘headland’ speeches and via the recent Labor National Conference. This hasn’t been an across-the-board decision. The recent upsurge in activism for women’s rights, security and dignity has had a significant societal impact, and Labor has therefore adopted some progressive reforms that will advance women’s rights in its Budget reply. Whether these are of a scale to really make a significant difference is a matter for debate.

The unions too haven’t been completely ignored. Structurally part of the Labor Party, most of the labour movement’s demands are aimed at those same ‘typical persuadable voters’ that Labor is courting, so there is no political cost for Labor to adopting them. Labor has some genuine reforming workplace policies, but none that would really upset the capitalist class and fundamentally change the current pro-business Fair Work Act and potentially cost it votes via a conservative scare campaign on unions.

Contrast that with the gaping hole in Labor’s Budget response - Albanese left unclear Labor’s plan for action on climate and provided little to no detail on spending that will help Australia to meet its modest carbon commitments. Note too the near total silence on the higher education sector, which has been decimated by Liberal cuts, the pandemic and decades of corporatisation. The campaigning in these sectors has fallen on deaf ears. Labor seems to have decided they don’t matter for their electoral chances and can be safely ignored. Whether Labor’s analysis is accurate, and this strategy is a winner, will only be known on election night.

The broad left’s response, too, is for the future to reveal. Unlike the 2014 Budget which caused an uproar and an immediate outpouring of activist outrage, this one has received a muted response from the progressive left.

This may reflect an incapacity in Australia for any coordination between the various movements, and no doubt some lingering effects of the pandemic. The main activist movements still work independently from one another, and without obvious strategies for creating change beyond ‘raise awareness by hitting the streets, change the government and hope for a Greens influence to drag Labor leftward’. This wishing and hoping for a result is not a strategy per se.

Labor’s electoral chances rest mostly on Labor’s electoral strategy, something the main movements, including the unions, have little control or influence over. That strategy is usually focused on persuading voters in marginal seats that the current government is not governing in their interests, and that Labor is a better prospect. They do this via application of more or less broadcast or direct communication methods. There is no plan to bring into being new political sub-classes, as Howard did via changes to the tax system (independent contractors and self-funded retirees), or as Whitlam did via expansion of higher education and the public service. There is no strategy for broad political realignment that has been the stated aim of the Trumpists - that of making the conservative parties the natural party of choice for working class people based on nativism, nationalism and a modicum of social provision (a strategy that is not really new at all - it stretches right back to Bismarck). The Corbyn-Sanders strategy of inspiring a new wave of political engagement on the left through policies such as free tertiary education and a Green New Deal is not on the cards in this country either. The usual reason given for this political choice is that Australia’s voting system encourages appealing to the ‘centre’, or for those who recognise that there is no ideological centre for people who are not ideological, an appeal to the persuadable voters, often ‘low information’ voters in the suburbs and regions. Thus Labor appeals to a broad common denominator voter and ignores what are described as informed ‘elites’ and educated voters, who are free to vote Green in response. Labor’s electoral approach therefore rests on the compulsory preferential voting system delivering these Greens votes back to Labor. Similarly, its Parliamentary approach relies on either winning a majority outright, or, if more progressive, wealthier inner city areas start to return more Greens MPs, then relying on them for support for a minority government. Most Greens MPs, if not their voters, would know that support for a Liberal minority government would be political suicide, so Labor is under little pressure to accede to Greens demands in such a situation. Contrast that with the way it would have to genuflect to independents that provided confidence and supply.

Left unmoored?

Where does this leave the Left? The existential threat of runaway, catastrophic climate change cannot be allowed to paralyse immediate action, and in fact demands action that will increase social solidarity at the local and national level, create cultures of collective support and egalitarianism. Yet it also demands that we grapple with the strategic problem of the state and state power.

This recent pandemic, and the last four decades of neoliberalism, have resulted in the steady growth of a carceral, surveillance state, with more legislative, military and social power than ever. Hoping it will wither away by itself, by the creation of hyper-local autonomous communities, is a strategic choice with little evidentiary support.

A more fruitful strategy may lie in unity and solidarity across currently uncoordinated and disparate movements, generations and geographies. Australia is still a politically divided and relatively sparsely populated continent, and its progressive movements have not yet made full use of the major economic changes that have occurred under neoliberalism, namely, the revolution in communication technologies. SEARCH has a role to play, and indeed openly aims to bring together people from different movements, geographies and generations, to build the capacity for common action, as well as the cultures of democratic solidarity and egalitarianism that will be needed to overcome the iniquities of carbon capitalism. But it will take conscious decisions of the people in these disparate movements to set aside differences and prioritise certain strategic objectives to really make change that will give the Left a chance at regaining some of the influence it could once claim.








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