|
...as security, liberty and property, but add "values of equity, solidarity and sustainability" in order to assist "human, social and environmental capital necessary to make a market economy function effectively".
With Labor indicating that it will provide greater attention to health, education, the environment, and infrastructure, it may well be that Labor's lead in various opinion polls in early 2007 can result in a victory at the 2007 federal election.
But this article questions the extent to which Labor can reverse recent policy trends, and whether the Howard government has been as mean-spirited as Rudd suggests. This is because Labor must also take account of the competitive realities that remain evident from Australia's ongoing interaction and dependence on the international economy, a reality that does pose policy limitations although still allowing for significant policy possibilities. Hence, the purpose of this article is to provide greater intellectual honesty about likely policy trends even under a future Labor government, and why the hopes of those on the Left, at least those who do not give adequate attention to competitive realities, may be misplaced.
Although Rudd attacks Howard's supposed emphasis upon the economic imperative above issues such as equity, both Labor and Coalition governments will continue to give adequate attention to competitive realities such as ensuring that the nation's taxation and labour market costs remain competitive. This necessity is evident to all national governments wishing to benefit from interaction with the international economy. While Australia did prosper under high tariff levels for many decades even after the Chifley Labor government supported the General Agreement on Tariffs and Trade in the late 1940s which encouraged nations to reduce trade barriers, it was inevitable that the promotion of freer trade would eventually force Australian governments to adopt policies that would cause a considerable degree of social upheaval as the need for economic reform could no longer be delayed.
Though total Australian government outlays increased from around 18 per cent of gross domestic product (GDP) in 1960 to 35.5 per cent in 1985, by the early 1970s the need for policy change was necessary if the wealthy democracies (including Australia) were going to maintain their high standard of living. With US and British negotiators at the 1944 Bretton Woods Agreement not implementing capital controls to prevent corporations and citizens moving their funds abroad to evade higher labour and taxation costs, the rise of developing nations with their high-quality and cheaper manufacturing products demanded urgent attention.
This need became increasingly evident after US companies, which dominated the world economy and trade during the 1950s and much of the 1960s, began to invest abroad and locate parts of production offshore in order to reduce costs and compete more effectively. It was also recognised by Australian policy makers, with the Industry Assistance Commission's 1973-74 Annual Report noting that Australia's industries needed to be made accountable for the assistance they received, while suggesting that the nation shift its financial resources to its "land-intensive rural industries" where it was clear that Australia "has an export advantage" which would help aid the ongoing importance of service industries.
With Australia's situation reflecting its traditions and development, Labor and Coalition governments have adopted policies that ensure that the nation remains competitive in order to attract enough investment and revenue to provide the vast resources that Australians expect in regard to their social welfare needs. Hence, Labor governments (1983-96) also gave greater policy support to floating exchange rates and the discipline of the market after Australia experienced adverse economic conditions during the 1970s, including higher levels of unemployment and inflation.
Consistent with the policies adopted by other liberal democracies, there was an increasing realisation that Keynesian-type policies could not resolve economic decline through government deficit spending to address a recession or to boost a recovery, or by increasing taxes or cutting back on government outlays to suppress inflation. Hence, as Rudd acknowledged on The 7.30 Report on January 23, when seeking to defend Labor's economic credibility, "there's broadly a bipartisan consensus in terms of monetary policy, inflation targeting and also fiscal balance", as noted by the 2006 Boyer Lectures given by the recently departed Governor of the Reserve Bank, Ian MacFarlane.
Rudd's attack on Howard as some kind of ideological zealot committed to neoliberalism who has little regard for the national interest represents a level of simplicity which is matched by his flawed reference to historical policy decisions as somehow embarrassing the type of liberalism promoted by the Howard government. Rudd mocks Howard's praise of Reagan and Thatcher, although such controversial leaders were important as...
NOTE: All illustrations and photos
have been removed from this article.
Looking for additional articles?
Search our database of over 3 million articles.
Looking for more in-depth information on this industry?
Search our complete database of Industry & Market reports by text, subject, publication
name or publication date.
About Goliath
Whether you're looking for sales prospects, competitive information, company
analysis or best practices in managing your organization,
Goliath can help you meet your business needs.
Our extensive business information databases empower business
professionals with both the breadth and depth of credible,
authoritative information they need to support their business
goals. Whether it be strategic planning, sales prospecting,
company research or defining management best practices -
Goliath is your leading source for accurate information.
|
%20%20&position=1)