Labor’s Three Offerings on the Altar of Virtue

Merry Christmas and a happy New Year! Australians seem set on dismissing an extremely mediocre and divided government in exchange for one set on doing untold damage to our national life. How strange is that? Very.

Since Gough Whitlam, Labor governments make me nervous. Mind you, the Hawke-Keating government did some very good things: floating the currency, privatisation, and reducing tariff barriers (even a born-again, non-free trader like me sees the harm in protecting grossly inefficient industries). Of course, all left-wing governments tend to overspend. There are so many good causes to pursue. Like temptation, it is too hard to resist.

While times affect the budget, it is probably significant that in the twelve years for which Hawke-Keating had responsibility (from the first full financial 1984/85 until the last partial year 1995/96) the budget deficit averaged 1.6% of GDP. Not a disaster. But, still, it contrasts poorly with the average surplus of the twelve comparable Howard years of 0.9% of GDP.

When it came to deficit spending the Rudd-Gillard government was, shall we say, extravagant. But I am not too critical. Ken Henry and his deluded crew of Keynesians at Treasury put the hard word on Rudd to spend big as the GFC hit. How alluring is that to a Labor government when spending becomes an essential good? And, once you spend big it is hard to rein in, as Wayne Swan found. The Abbott-Turnbull-Morrison government has battled hard and, not before time, it now seems close to doing what Swan couldn’t. A pity the prize will be snatched away come autumn.

It is with this background that I contemplate an incoming Shorten Labor government. Unfortunately, this time around, overspending is the least of it. I doubt there has been a period in modern history when a party has come to power promising to thoroughly undermine Australia’s economy and social fabric. On the economy, put aside the tax grab which drives the foreshadowed attack on negative gearing and on the retirement incomes of those with the temerity not to belong to an industry super fund. The first will have no sustained effect on property prices – up or down – which are governed on the demand side by family formation and population growth and on the supply side by land and building costs. The second will simply disadvantage an impotent and dispensable group of retirees (of whom I am one). It will have no measurable effect on Australia’s economy.

The real damage to the economy and, additionally, to the social fabric, will be done via three ‘virtues’, all of which have appeal to the untutored, of which a substantial subset is the young. The three virtues are reducing inequality, tackling climate change, and being terribly compassionate to the world’s dispossessed. I will take them in that order.

It is proposed to tackle inequality by giving power to unions to artificially boost wages. This will be done via industry-wide bargaining and by efforts – through the Fair Work Commission – to improve the position of those working in occupations which mainly employ women.

Industry-wide bargaining means that struggling enterprises, within particular industries, will be forced to pay wages they can’t afford. The result, for the benefit of the economic ignoramuses that occupy the leadership of the Labor-cum-union movement, will be more bankruptcies and fewer jobs.

It is true that those working, for example, in early-childhood education (mainly women) are paid less than miners (mainly men). I am all for women being given the opportunity to work down the mines. But there is a reason why miners are paid more than childcare workers. That reason goes to the requirements of the respective jobs and, in turn, to the number of people able and willing to do them. It’s called, for the benefit of the aforementioned ignoramuses, supply and demand. It has nothing to do with the sex of employees. If you artificially push wages higher than their market clearing level then the demand for the workers concerned, childcare workers, for example, will fall; unless, of course, more taxpayer funds are piled in.

Bill Shorten and Sally McManus should take a lesson from King Canute. Wage levels fall out of economic forces. The only way to sustainably increase wages, particularly at the low end, and maintain full employment, is to provide the maximum scope for businesses to develop and grow (in a competitive world) while ensuring that migrants don’t flood the labour market. All else is selling voters a bill of goods.

Tackling climate change is expensive. There is no mystery. Intermittent wind and solar are poor substitutes for coal power stations chugging along twenty-four-by-seven. As it is, the federal government’s target of reducing CO2 emissions by 26% on 2005 levels by 2030 together with various madcap schemes of state governments (including locking up gas and oil exploration) have damaged the competitiveness of Australian industry. Undoubtedly, they have also killed some old poor people unable to afford power bills. But who’s counting?

Now be afraid. “Here’s Johnny!” aka Bill in this case. The new emissions target will be 45% by 2030. You simply can’t get to that by switching wholesale to intermittent green generation of electricity. You have to focus on other sources of CO2, like transport and farming. While the target won’t be reached, the attempt will likely cripple sections of Australian industry. And, by the way, gallingly, will have no affect at all on global warming. Not a mere smidgin. All pain for no gain.

Thus, we have two virtues (combatting inequality and climate change) working in sync to undermine the economy. This brings me to the third, guaranteed to undermine the country’s social fabric. Socialists, Mrs Thatcher said, “always run out of other people’s money.” In their modern guise, they never seem to run out of compassion for ‘the other’. Ask them to help Aussies – disadvantaged, bad teeth, homeless, old and shivering in the cold – or, alternatively, Syrian asylum seekers and they’ll plump for the latter every time. And feel morally superior as they dispense the best of care that taxpayers can provide. And the beauty is that the political elite and those who welcome refugees from their inner-city enclaves never have to actually have to live anywhere near them, thank Gaia; nor even see them, in fact, except on the TV.

It is clear that the wholly unjustified increase in the annual refugee intake to 32,000, as contemplated by Labor, from the already grossly excessive number set by the government of 18,750 for 2018-19, is just the appetizer. The proposition that two (lefty) doctors can get you out of offshore detention for ‘medical treatment’ in Australia is tantamount to a guilt-edged invitation to board a boat. In general, expect Labor’s immigration regime to further subvert our national cohesion. Expect more Muslim immigrants – they vote Labor, don’t you know. At least until they are numerous enough to vote Islam.

A sad reflection of modern democratic life is that voters can no longer be trusted to penalise political parties set on a destructive path. Green hysterics, GetUp! and other closet Marxists influence and mobilise callow youth. Newspapers are passé. The insularity of always comparing notes on social media with those of like mind must have an effect in reinforcing tribalism and superstition at the expense of common sense. Whatever the reason, Australians seem set on doing something akin to swapping a debilitating but common infection for an injurious morbidity. A healthy third alternative would be nice to have in the future, but that ain’t on the horizon.