It’s time for Labor to think big about policy – a people’s bank!

Apr 20, 2017

Tony Abbott is not the only one anticipating a change of government at the next election. Voters across the board are increasingly fed up with the Coalition and there are even signs that some of its most devoted cheer leaders in the media are beginning to give up on it. Dear old Alan Jones has certainly given up on it. So what does Bill Shorten have in store for us if the ALP wins the next election?  

Out in voter land the Coalition government is on the nose. As Michelle Grattan has observed: “What is so striking is the wide sweep of the discontent and pessimism. That negativity is the prism through which voters will look at whatever the government does on housing and other things.”

As Labor heads towards a possible (though still not yet set in concrete) victory at the next election, does it have any policies up its sleeve that will turn a bemused, angry and alienated electorate into an enthusiastic and expectant clear majority of voters? The danger is that it will simply drift into power by allowing the government to pull itself down.

That would be a no-win for everyone – an example of the laziest kind of politics. And both the major parties have practised a lot of lazy politics for far too long. It is the kind of politics that would certainly deny the ALP the unambiguous mandate the party badly needs if it is to be a government enacting major reforms. And let there be no mistake: major reforms are urgently needed to drag this country out of the paranoid narcissism and neanderthal policy making in which it is has been floundering for more than a decade.

It’s time (to borrow a phrase) for Labor to dramatically distance itself from the stale old policies of the Coalition parties. It could do this by taking four initial big imaginative policy steps.

First it must abandon neoliberalism as its guiding economic philosophy. Neoliberalism (or economic rationalism if you must) has patently failed on any criterion against which it can be measured. It’s over. Labor must bring the state back in to curb the neoliberal vandalising of the economy by a grossly de-regulated private sector. It needs to define and explain – patiently, clearly and passionately – examples of the destructiveness that many free market failures have unleashed on the public. For example, the electricity retail industry that everyone (including Blind Freddy’s dog) knows has become a disgustingly messy dog’s breakfast.

Second, Labor needs to come out swinging on a number of signal social policies, promising that it will enact reforms very early in its first term. Marriage equality should be right up there in lights for immediate action. Ending negative gearing and putting in place a sound housing affordability policy should be way up on the agenda. A government-run, working family-friendly childcare system needs to be designed and ready for the next election. There must be a recommitment to the National Disability Insurance Scheme (NDIS) and to something like a Gonski #2.

Of course all these measures will mean raising taxes – but if this is explained carefully, clearly, and rationally (that is, against the backdrop of a truly progressive tax system that makes the rich pay significantly more than the poor, and which funds essential and effective user-friendly public services), voters will come on board in droves. (Consider, for example, the public’s hostile response to the Coalition’s tax cuts for big business.)

Third, Labor must commit itself to real action (not just blathering on about “good ideas”) on some major infrastructure projects. The Very Fast Train linking Brisbane, Sydney, Canberra and Melbourne should be brought forward immediately. Policies to radically upgrade urban infrastructure – roads, public transport, schools, health services, aged care facilities – need to be advocated with authority and clarity. And it must bring forward a clear, unambiguous policy to counteract climate change.

Fourth, Labor needs a standout signal policy that nails its post-neoliberal colours proudly to the mast, to show that it is unequivocally on the side of “ordinary mums and dads” (to use a Shortenism). This policy must be one that will find huge voter support right across the country. And a sure-fire nominee for this has to be a publicly owned bank – the Australian People’s Bank.

A publicly owned bank is desperately needed to curb the gross excesses of the big four banks by competing with them at every level. It is needed, too, to offer to the general public a bank that has their interests at heart, not the interests of the private banks’ over-paid CEOs and big shareholders (not a few of whom are off-shore). And most of all it is needed as a model of client friendliness able to respond to the needs of middle and working class Australians whose interests are presently being ridden over rough shod by the existing banks.

Moreover the Australian People’s Bank must have an insurance arm providing general insurance and medical (including dental) insurance. And it must be able to offer to the general public the most impeccably, transparently honest financial advisory service in the country. Its profits (and they will be considerable as the public recognizes the many advantages of a publicly owned bank over the private banks) can go into general revenue, to lessen the tax increases that will be necessary for the broader program Labor must bring to the next election.

If Labor can’t develop a strong and inspiring program like this, another party or parties (for example, the Greens, or a new Social Democracy Party) will rise to the challenge. Then we will see voters deserting the ALP, signalling its demise as a major party.

It’s time!

Dr Allan Patience is a principal fellow in the School of Social and Political Sciences in the University of Melbourne.

See also an article by Nicholas Gruen in The Saturday Paper ‘Making the Reserve Bank a people’s bank’.

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