‘Members of the Australian Labour movement do not regard me as a Moses who will lead them out of the wilderness’, noted John Curtin, leader of the battling federal Labor Opposition, shortly before his party suffered a third, if respectable, loss in a row at the 1937 election.
Curtin’s humility would be misplaced. With his health failing and internal party conflict seemingly intractable, Depression-era Prime Minister Jim Scullin, whose government was ripped to shreds and ejected from office in 1931, resigned the party leadership in 1935. Curtin won the subsequent leadership ballot by a single vote. It was a surprise result. Curtin had entered federal parliament in 1928 representing Fremantle but concerns over his drinking contributed to his failure to secure a place in Scullin’s cabinet. He lost his seat in the landslide of 1931, but re-entered parliament three years later, reinvigorated by his time away. Curtin managed to bring about a precarious unity in Labor’s ranks. His task remained daunting. The economy was weak. Western Australia had voted to secede from the Commonwealth. A greater menace loomed in the form of fascism: Germany, Italy and Japan were leading the world towards world war.
In the late 1930s another war erupted, this time on a truly global scale. Having suffered one too many provocations, Britain finally declared war on Germany in September 1939. Despite narrowly losing the 1940 election, and almost his own seat, in September that year, Curtin henceforth led Labor out of the wilderness. Amid the internal dysfunction of United Australia Party Prime Minister Robert Menzies’ administration, Curtin was called upon to form a minority government in October 1941, supported by two independents. Just two months after Labor took office, Japan attacked the US naval base Pearl Harbor, raising fears of an invasion of Australia. The British naval base of Singapore fell on 15 February 1942. Four days later Japanese planes bombed Darwin. Curtin excelled as a wartime leader. The new prime minister had, in 1941, demanded the return of Australian troops fighting in the Middle East rather than see them diverted to Burma, as was the wish of British Prime Minister Winston Churchill. Curtin subsequently made an impassioned New Year’s appeal for American military support, ‘free of any pangs as to our traditional links or kinship with the United Kingdom’, and thus began a historic re-orientation of Australian foreign policy. Curtin embodied Australia’s ‘total war’ effort, while skilfully maintaining the labour movement’s unity. In early 1943, though he had been a renowned anti-conscriptionist during the Great War, Curtin deftly pushed through a proposal allowing conscripts to be sent outside Australian territory to wage war against Japan.
‘Victory in war, victory in peace’. So declared the ALP’s 1943 election motto. The Australian people responded favourably. Curtin’s wartime leadership was rewarded at the federal election held 75 years ago on 21 August 1943. Labor enjoyed its greatest ever victory federally, a feat Gough Whtilam, Bob Hawke and Kevin Rudd never eclipsed: winning 18 seats and its biggest proportion of seats in the parliament and largest two-party preferred vote of 58 per cent. Curtin’s widely admired leadership not only guided Australia through the tumult of war, but restored Labor’s governing credentials, ending a decades-long era of conservative domination.
As the war drew to a close in mid-1945, Curtin delivered a May Day message urging the reward of working people’s sacrifice: ‘The workers of the free world have given to their uttermost, fighting and working that the cause of liberty shall triumph over the forces of oppression — forces that banned Trade Unionism and made Parliamentary government a mockery ... [now] workers can show the world that a better and more decent way of life can be given to all.’
Tragically, Curtin was denied the opportunity to pursue his vision, dying in July 1945, ‘a war casualty if ever there was one’. But Curtin and his successor Ben Chifley – his minister for post-war reconstruction – had laid the groundwork for a grand post-war reconstruction and the near-three decades long economic boom which would follow. During the war the Commonwealth effectively took over the power to levy income tax from state governments. Curtin Labor extended the welfare state by adding a widow’s pension, funeral, unemployment and sickness benefits. The government boosted housing construction by providing grants to the states. Support for establishing a car manufacturing industry, expanded tertiary education – including founding the Australian National University and the Commonwealth Reconstruction Training Scheme for returned servicemen and women to undertake studies or training – as well as a program of mass non-Anglo immigration were pursued by Chifley’s government (1945-49).
These governments transformed Australia. The goal of full employment was central. In May 1945, inspired by the United Kingdom’s 1942 ‘Beveridge Report’ into the welfare state, the Chifley government tabled a White Paper that set out this aim and the means of achieving it. In the same year, External Affairs Minister Doc Evatt played a major role at the San Francisco Conference that formed the United Nations, ensuring that full employment was included in its Charter. Mass immigration went hand in hand with national building projects such as the Snowy Mountains Hydro-electric Scheme. Built largely by migrant labour, it provided employment, irrigation for the inland and the energy needed for industrial expansion and national defence. Instructively, Menzies who became prime minister for a second time by defeating Chifley Labor at the 1949 election, extended this legacy despite his spicy rhetoric about the government’s socialism. During the election, Menzies singled out one of the architects of post-war reconstruction and later Reserve bank Governor, H.C. Coombes, as a Socialist. Yet, the day after the poll he phoned Coombs: ‘That you, Nugget? You don’t want to take any notice any notice of all that bullshit I was talking during the election. We’ll be needing you, you know.’
John Curtin would be bemused by the mention of a Facebook and Twitter and the idea of a political ‘meme’. But the political turbulence engulfing our nation and the world today would be familiar. A precariously placed global economy, growing inequality and social immobility, increasing distrust of democratic institutions and political parties, the spectre of global terrorism and authoritarian great powers and the rise of extremist left and right-wing populism.
The solution, as in Curtin’s days, was to fight, fighting the good fight, peacefully, at the ballot box and fighting the battle of ideas, armed with practical, relevant ideas. Ideas are powerful. They can change the world, for better or worse. They have never been in shorter supply.
Current opinion polls consistently indicate that it is likely that a Bill Shorten-led Labor government will occupy the treasury benches within the next year. The Abbott-Turnbull Liberal Government has always lacked a mandate or overarching policy goals and has disintegrated into infighting and policy torpor – something it shares with Menzies’ United Australia Party government preceding Curtin’s. Now more than ever we need a federal government that can bring this country together once again and lay the nation-building groundwork for a new age of prosperity with fairness. The next government however will not be a re-run of a long-dead predecessor. This is true of the last great reform era of national politics between 1983 and 1996. For while there is much to admire of the style and substance of the Hawke-Keating Labor governments, the times demand new answers to old questions and perhaps old answers to new questions. Above all they demand courage. The Shorten-led Opposition has been one of the bravest of its type for decades, leading the policy debate on a range of issues from capital gains tax to negative gearing reforms. In that same spirit, but cognisant that issues such as energy policy and climate change action, housing affordability and true reconciliation with our first peoples are not touched on here, the John Curtin Research Centre presents its seven big ideas to make Australia a richer, fairer, better, more democratic place – a wish list if you like – of the visionary nation-building ideas Curtin might prosecute if prime minister today.
1. Employees on company boards
In 2017, the Australian way of life – a fair day’s pay for a fair day’s work, opportunity for all and preventing excessive inequalities of wealth, status and power – is fraying. While we avoided the GFC’s worst effects, inequality has risen to heights not seen since the early 1940s. Good, secure, well-paying jobs are being replaced by low-skill, low-wage insecure work. Company profits remain healthy, yet wages growth is sluggish, excluding that of CEO remuneration. The fruits of 27 years of continuous, record economic growth have not been shared equally, which is bad for working people, bad for the economy, and bad for democracy, encouraging extremist politics. Working and middle-class Australians need a pay rise and need their penalty rates restored. However to save the Australian way, a new policy settlement is required. Australians are keen to see more bipartisanship and co-operation, and not just in politics. To address the big challenges facing our country we need a workplace and corporate culture fit for purpose in the 21st century. One idea, drawn from Germany, is to encourage and, if need be, legislate for employee representatives on company boards. Codetermination draws on the irreplaceable shop floor knowledge of a company's workforce. Conflict between management and workers is reduced and communication channels are vastly improved. There is less resistance to technological and structural change. Directors are drawn from a wider social and professional circle. All this promotes long-term decision-making, making for better-paid, more productive and safer workplaces, and improving the transparency of information for investors, workers and consumers. Employee representation would improve boardroom diversity by incorporating employee voices and raise profits through greater productivity and collaboration. Workers would enjoy higher wages and better, more secure working conditions. Codetermination might militate against financial difficulties leading to the sudden collapse of firms and prevent companies from disregarding their social responsibilities. It can tackle excessive CEO remuneration which doesn't align with performance, and thus restore public trust in corporate Australia. Codetermination is a nation-building reform which can help grapple with the opportunities and challenges of the unfolding technological revolution. Codetermination can rejuvenate the democratic nature of our workplaces. It can help build a new policy settlement in the manner of the post-World War Two Keynesian bipartisanship forged by Curtin and Chifley and built upon by Menzies.
2. Federal takeover of TAFE
The commonwealth should take over responsibility for the TAFE and vocational education sector, to restore its good name and build a new economic golden age. If, as frequently predicted, most jobs of the future don’t exist, then these sectors will be at the frontline of our nation’s economic planning, equipping new generations with the skills and training, and re-training the existing workforce, to fill the looming jobs void. A commonwealth takeover is necessary for several reasons: 1) we need a uniform national system of accredited courses with clearly enunciated goals and outcomes paired with a drastic increase to the volume and quality of vocational education and better regulation of entry into the labour market. Here, it ought not be forgotten that prior to World War Two the Commonwealth had little involvement in university education, but henceforth its responsibilities have been clear; 2) the distinction between university and vocational education is redundant and will be redundant to any innovative, job-creating prosperous economy of the twenty-first century. It’s time for a complete re-think, which sees TAFE as an equally, if not more desirable, pathway towards a career as university. Doctors, lawyers and accountants, to name but a few vocations, only practice after completing an extended period of training and apprenticeship. We need to ask ourselves why these vocations are not contained within the vocational education system? Moving such vocations out of the existing system might boost the prestige and funding of the non-university sectors, in turn smashing social class barriers; 3) in tandem with these commonwealth-driven measures it is time for the private sector to step up to the plate by creating vastly more subsided private sector apprenticeships. Employer groups and local chambers of commerce can play a critical role, acting as a conduit between government, TAFE and vocational education providers, unions and business. Such partnerships can better respond to immediate needs in the economy and workforce compared to other methods. Large companies in Australia, too, are often Registered Training Organisations. Linfox springs to mind. These institutional arrangements along with workers on boards, stress on regional banking and investment in long-run business strategy, make Germany’s economy dynamic and resilient, and its society fairer. Whereas Australian manufacturing lies in tatters, Germany, with its immeasurably superior vocational education system, is the world’s third-largest exporter. Its economy sees workers, unions, companies and government take a long-term view, critically in respect of jobs and training. Only a Commonwealth takeover of vocational education can allow Australia to follow its way.
3. Restore teaching scholarships
The previous recommendation does not mean to downplay the centrality of tertiary education. Indeed, one of the greatest initiatives of the Menzies government, aside from further driving Chifley Labor’s expansion of tertiary education was the introduction, from 1951, of commonwealth and teaching scholarships so that poor and working-class Australians could attend university in the first place. First envisaged by Chifley Labor in the mid-1940s, the quid pro quo of full-time Australian students having their first university degree tuition fees paid for by the commonwealth and being accorded a means-tested living allowance was the requirement to teach in public secondary schools for three to five years. The best and brightest of the working class came to teach the working class who followed them into the classrooms of the 1950s and 1960s. They should be restored on a merit, means-tested, bonded basis in the interests of our economy, social cohesion and secondary schooling standards, equity for low-income students, and a new spirit of reciprocity. While the HECS system inaugurated by the Hawke government in the 1980s has been a national success story, access to (and completion of) tertiary education is fraught with danger for working class students and is increasingly out of reach because of the attitude of the current government. The priority of commonwealth assistance to students lies with living and educational costs rather than tuition fees, in part a function of the HECS reform. The current Coalition government, its predecessor having re-established a very partial version of commonwealth scholarships in 2004, has slashed funding to the so-called scheme to the tune of hundreds of millions of dollars, forcing universities to hike fees and pricing students out of an education. No amount of philanthropic schemes can plug the gap. In the same manner, no amount of increased funding to schools – government or non-government – can necessarily address teacher quality. A variation of bonded scholarships is currently used by the Commonwealth to address doctor shortages in rural areas via the Medical Rural Bonded Scholarship scheme. We need more of our best and brightest attending university and teaching potential attendees, not simply as a means of earning an extra quid, but as a way of giving back to the community, improving educational outcomes, in the interest of all Australians.
4. Establish a National Debt Commission
In just four and a half years, the Coalition government has doubled the nation’s debt. Commonwealth net debt has doubled from $159 billion to a record $349 billion since the Coalition came to power. Gross debt is over half a trillion dollars. Spending as a proportion of GDP hovers around 25 per cent. When the Rudd/Gillard Labor era ended in 2013, spending as a proportion of GDP was trending downwards. Australia survived the global financial crisis without going into recession, and unemployment did not jump dramatically. Fiscal stimulus saved the day. Australians supported it then and long-term studies provide evidence of continued support. Then opposition leader Tony Abbott bemoaned our debt and deficit ‘crisis’, yet four Coalition budgets later we are worse off without any meaningful investment in infrastructure, job training and more besides. The first three budgets handed down by treasurers Joe Hockey and Scott Morrison promised a surplus four years on yet failed to deliver. This year’s budget forecasts a deficit in 2018-19 of $14.5 billion and promises a slim $2.2 billion surplus the next financial year, based on supremely optimistic economic growth and wage growth forecasts. Fast forward to 2018 and the government shows no willingness to address debt, despite an unexpected windfall on the revenue side. Its approach, rather than embarking on serious, structural repair such as fixing capital gains tax and negative gearing distortions, is to fiddle with the Low Income Tax Offset combined with regressive tax cuts. From 2024-25, Australians earning $41,000 will pay the same personal rate as those on $200,000 at a cost of $140 billion, which even then will take at least two election cycles to materialise. They will serve only to worsen the long-term structural deficit, place a higher debt burden on future generations and force deeper cuts to healthcare, education, aged care, job training, and defence spending. As part of a suite of already announced debt-reduction policies, Labor should consider the introduction of a National Debt Commission. Such a commission should be bipartisan and comprised of people like former Liberal leader John Hewson, former Labor prime minister Paul Keating, former Reserve Bank governor Glenn Stevens, and ex-ACTU secretary Bill Kelty. Business figures like Heather Ridout, Janine Allis or Naomi Simson spring to mind. The NDC should take submissions from businesses of sizes, unions, academics, entrepreneurs, civil society, state and local governments; in short, the entire spectrum of Australian life. It should be tasked with making recommendations on budget repair and debt reduction that are fair, credible and do not place a disproportionate amount of the burden on working Australians, young or old, or our most vulnerable. In doing this, Labor could emulate the Hawke government’s 1983 Economic Summit, facilitating both a national awareness of the problem and something approaching national consensus around solving it. And it would be in the national interest.
5. Make private health insurance private
Australia requires long-term decisions on tax and spending settings, notably taking aim at unjustifiable rent-seeking behaviour across sectors of the economy. A good place to start might just be healthcare. Since the Hawke government’s reintroduction of universal health care in 1984 as Medicare, the right to access affordable healthcare irrespective of one’s capacity to pay has become sacrosanct, whether one is attending a public hospital or needing primary care. Health costs continue to increase largely due to the ageing of the population and the resultant increased service need in the public hospital sector that comes with greater morbidity and new technology therapies that sustain life quality. Rationing of health services based on age, quality of life or preferential access has never been part of the national dialogue and should never be. That’s not the Australian way. But how is healthcare funded? The Medicare levy covers about one third of Commonwealth health spending raising $19 billion annually and paying for public hospitals (about 50% comes from the states) and for primary health care. Yet the Commonwealth gives away about $6 billion for the private health insurance rebate imposed upon working Australians through the requirement to take out private health insurance. Growth in the private hospital system – accounting for about one third of available beds – has been assisted by this hypothecated tax. It’s a waste of taxpayer money. Australians are increasingly turning their backs on the private system because private health insurance fees increase and out of pocket costs soar. While predicted to be lower than previous years they will amount to double the rate of inflation and $200 more a year for families whose wages are stagnating and utility bills soaring, while private health insurers raked in $1.8bn in profits before tax last financial year. Hence Labor’s plan announced earlier this year to cap private health premiums for two years and task the Productivity Commission with undertaking a wider review of the sector if elected. (By contrast in Canada hospital care is delivered only by publicly funded hospitals. Under the Canadian universal healthcare system no one is out of pocket and no one is forced to take out private health insurance). There is more to be done. Australia must more precisely define its health policy objectives and more wisely spend its health taxpayer dollars. Private health insurance either stands on its own feet or should be reformed in favour a system which works for all.
6. Super sizing our savings
More than 95 per cent of workers – 12 million Australians – hold superannuation accounts, double that of 20 years ago. We have built the fourth largest pool of savings globally in just 25 years. Yet Australia’s population size and age profile pose significant challenges to our system. We need a new way forward. Firstly, the super guarantee rate must be increased to 12 per cent ahead of the current schedule and a timetable mapped out for it to get to 15 per cent. It is incumbent upon government to deal with other challenges to our retirement system. Non-payment of superannuation is rampant. Workers have been fleeced of $17 billion since 2009 - an average $2.81 billion every year between 2009 and 2015. Government must prosecute a zero-tolerance approach towards employers who don’t pay super. Our super sector is also increasingly failing employees because the system was designed in the early 1990s for individuals who worked in stable, full-time employment, not for multiple employers or as contractors. The traditional nine-to-five jobs market been placed under severe strain by the emergence of a so-called ‘gig economy’, or ‘Uberisation’ of the workforce, dominated by casual or part-time workers and contractors. This has encouraged a situation whereby a third of young people are not eligible for super guarantee contributions because they earn below the threshold of $450 a month paid by a single employer, or are working as contractors. Either way, they don’t accrue super. This is not only unfair and bad news for individuals, but is bad for our national savings and bad for the budget bottom line in coming decades, as fewer people becoming fully funded or partially funded retirees will exert more pressure on the pension system, and on healthcare costs. The consequences are stark: government will be forced to pick up the tab – $37 billion in lost taxes due to lower super contributions and higher pension payouts. In line with the Senate Economics Reference Committee’s report on super guarantee non-payments, the $450 monthly threshold for super payments should be removed. The threshold was intended to reduce the administrative burden of paying superannuation to casual and part-time employees, but this is no longer an issue thanks to technology. If not, legislation should be introduced mandating a new pro-rata model for super guarantee payments, where employers would effectively make payments on earnings below $450 a month. The super guarantee would be paid on a pro rata or proportional basis by each employer, to be overseen by the ATO. The gig economy can only increase the gender super gap – women are over-represented in insecure work and more affected by parental leave and caring arrangements, meaning they accumulate less superannuation. The most recent ABS data (2013-14) shows that at retirement age, men’s average super balance is $322,000 compared with $180,000 for women. This problem is accentuated because employers are not required to make superannuation contributions for paid parental leave. If a woman takes between two and four years’ parental leave, she potentially misses out on between 5-10 per cent of accumulated monies over the course of a typical 40-year working life. Third, we must tackle the gender gap. Some employers have taken proactive measures, e.g. annual superannuation bonuses for female employees. More concerted government action is required: women (and men) should be paid the full super guarantee for the first six months of paid parental leave.
7. Democracy for all
‘To be corrupted by totalitarianism one does not have to live in a totalitarian country. The mere prevalence of certain ideas can spread a kind of poison that makes one subject after another impossible … even among people who should and do know better.’ So wrote the great anti-totalitarian polemicist George Orwell in 1946, a year after Curtin’s death. Nearly three decades on from the end of the Cold War, authoritarianism, whether soft or hard, is on the rise. Russia, Turkey and China and its leaders Vladimir Putin, Recep Erdogan and Xi Jinping are the most prominent faces of this global club of strongmen leaders. The spectre of a resurgent far-right politics haunts Europe. Charismatic alt-right politicians are all the rage. Far-left demagogues are either challenging the leadership of social democratic parties or superseding them altogether. Granted, the majority of the world’s countries are governed by democratic regimes. But the percentage of the globe’s population living under autocratic or autocratic rule hovers around 4 billion. Still, for some pundits, democracy has become an intellectual fashion accessory, a luxury Gucci bag good enough for the citizens of the West but optional for the rest. The next Labor government must take an unequivocal stand on behalf of democracy in our region and the world over, no matter the noise generated by deeply-compromised former figures from both major parties. Which brings us to the long-running debate over Australia’s approach to the rise of China, and more recently, discussion around restoring real involvement with the Quadrilateral Security Dialogue with the US, India and Japan, or so-called ‘Quad’. The Quad is demonstrably in Australia’s interest, contrary to the claims of the Beijing ‘right or wrong’ lobby. It is not a form of US containment or tantamount to a formal military alliance. Australia’s involvement would not be acting contrary to its own interests, namely ignoring predictions that China’s economy will be double the size of the American economy in twenty years’ time. Responding to the challenge of China’s rise does not offer a simple either or choice. No serious leader or serious observer has ever argued as such. It is the inarguable basis of any realistic and well-balanced Australian foreign policy. The great democratic challenge of our time is reconciling the demands of Australia’s important economic relationship with China, our largest trading partner with our legitimate national security needs and relationship with the US, our largest strategic ally, one predicated on a joint, unshakeable commitment to democracy. It entails not ignoring China’s military build-up in the South China Sea. It demands we speak out against the threat of North Korea and China’s crucial role. It cannot mean uncritical support for Beijing’s Belt and Road initiative. Must we not be seen in company of democratic friends at the risk of causing imagined offence? Or is this the new orthodoxy, whereby Australian support for democratic principles and alliances is of itself unfashionable? Orwell knew a thing or two about such matters. The unwavering social democrat paid a price for not supporting Stalin’s regime in the 1940s, perceived to be the major opponent of Nazism: unemployment and exile from Britain’s literary class. Our John Curtin paid a higher price. His wartime sacrifice sent him to an early grave. To not defend democracy diminishes Curtin’s memory and the millions of ordinary Australians who fought and worked against the forces of oppression on his watch.
Australia has a historic opportunity to shape a new policy settlement which builds a modern, thriving and diverse economy that creates and sustains well-paid, secured jobs in a globalised world and ensures that our health and education sectors are world-class. The opportunity to redraw our national policy settlement present to very few generations. The settlement of the 1900s which saw the establishment of a living wage and our reputation as a beacon of progressive policy spread throughout the world. Or the great wartime and post-war reconstruction work of the 1940s Curtin and Chifley governments which laid the groundwork for a golden age – thirty years of prosperity with fairness. Or Hawke and Keating’s modernisation agenda of the 1980s and 90s which built a more open, dynamic and productive economy in tandem with a union movement which worked constructively with business and government, thus avoiding the worst excesses of Thatcherism Those settlements were spaced roughly forty years apart and responded to tumultuous events of the previous decade. Amid our own tumult, it is time, not for a new Moses, but an entire generation, through the power of their ideas and policies, to seize its moment to make Australia a richer, fairer, better place, and a beacon of democracy in times no less challenging than those confronting John Curtin.