Coalition outsources role of government to business, the US

The Coalition acts as an agent of the business sector in domestic affairs and an agent of the US in international affairs.

Credit – Unsplash

On last election night Scott Morrison said he would govern on behalf of all Australians.  But he doesn’t. Last week’s budget shows very clearly how his government acts on behalf of the business sector. We have also known for a long time how the government regards itself as an agent or proxy for the US in our region.

A private sector-led recovery

 The Coalition has set about privatising our recovery from Covid-19. It has missed the opportunity to reform and restructure our economy in areas such as renewable energy, social housing and child care. The “snap back” that Scott Morrison so often talked about means reverting to the way we were.

As Ian McAuley and others have pointed out, Josh Frydenberg told us in his budget speech that “eight out of 10 jobs in Australia are in the private sector.  It is the engine of the Australian economy”.  His reliance on the private sector draws heavily from the Liberal Party’s statement of belief that “business and individuals – not governments – are the true creators of wealth”.

Before his budget speech, Josh Frydenberg referred nostalgically to Ronald Reagan and Margaret Thatcher with their view that governments are the problem, not the solution. The private sector is the cure-all, according to the Coalition. That is what Frydenberg believes and we see it in his budget.

It is no surprise then that in the budget that we see largesse for business rather than the community and public services. Perhaps we should not be too surprised because we had warning of what was to come with the National Covid Commission stacked with fossil fuel and business interests.

In the business-led recovery the budget will:

  • allow businesses at a cost of $27 billion over four years to deduct the full cost of all new equipment they buy in the first year.
  • provide $7 billion for infrastructure grants to the states.
  • set aside $2 billion for road safety improvements.
  • outlay $5 billion for loss-making businesses to get an immediate tax deduction for the loss.

Support for employees is directed through their employer in JobKeeper, with anecdotal information suggesting that some employers game their turnover to obtain JobKeeper payments. Even more concerning is to what extent companies used JobKeeper to sustain dividends, pay often obscene executive salaries and avoid tax in tax havens. How much better it would have been to put money directly into the hands of needy people who would spend.

The government has also announced it is prepared to commit to further business concessions to lift business investment. Yet we know that direct incentives will not promote a significant increase in investment unless companies see an increase in community spending.

As Ross Gittins pointed out in the Sydney Morning Herald on the October 10: “This ‘Liberal values’ business-directed tax reducing approach to fiscal stimulus explains why the budget didn’t include the two measures economists most wanted to see because they would do most to boost consumer spending and jobs: a big spend on social housing (A – no – under the rules of Smaller Government) and a permanent increase in unemployment benefits (almost every cent of which would be spent).”

Laura Tingle made much the same case in the Australian Financial Review of 10-11 October. “The government’s apparently obstinate determination to push all its support through the private sector also means ruling out something obvious – such as spending money on jobs in the public sector … The very sectors that conspicuously need more staff – and the fastest-growing part of the workforce before Covid-19 are in the public sector in areas such as aged-care, disability-care, health, education, mental health, employment services and child care.”

If the Government thinks the community does not see through all this then it is badly mistaken. The Election Study conducted by the Australian National University told us in December last year that “only 12% of Australians believe the government is run for ‘all the people’ ”.  In contrast, 56% said the government is run for a “few big interests”.

The recent budget confirms the public view that the Coalition fails to understand and act in the interests of all the community. It acts on behalf of business interests.

And the budget shows that the govern on behalf of the better off. The personal tax cuts costing $17.8 b will create only 50,000 jobs. Spending on social housing , unemployment benefits and child care would result in far more jobs and at much lower cost. Yet the government parrots on about jobs, jobs and jobs.

We are an agent of the US in external affairs

Just as the Coalition subcontracts our recovery from Covid-19 to the business sector, so, in effect, we contract much of our defence and strategic policies to the US.

John Howard put our role more succinctly as the deputy sheriff of the US in our region. We will do what we are told in our own region.

We are locked into the US military/corporate/intelligence complex. That complex is more influential than the people of Australia in determining our foreign and defence policy and programs.

Our military and defence leaders are heavily dependent on the US Departments of Defence and State, the CIA and the FBI for advice. But it goes far beyond advice. As an agent of the US, we willingly respond and join the US in such disasters as Vietnam, Iraq and Afghanistan. While the UN General Assembly votes with large majorities to curb nuclear proliferation, we remain locked into the position of the US and other nuclear powers.

Our autonomy and independence is also at great risk because our defence/security elites in Canberra have as their holy grail the concept of “interoperability” with the US.  This is mirrored in US official and think-tank commentary on the role they see for us in our region.

The concept of interoperability does not only mean equipment, it also means personnel, where increasingly large numbers of Australian military personnel are embedded in the US military and defence establishments, essentially in the Pacific Command in Hawaii.

But we are not just locked in to the military and defence complex in the US, we seek on a regular basis to ingratiate ourselves with the US. A meeting, or better still, a lunch with Donald Trump at the White House is gleefully accepted.

To win Trump’s favour Scott Morrison foolishly led the attack on China over the coronavirus outbreak. We slavishly follow US provocations in the South China Sea. We let the CIA through the fabled Five Eyes persuade us to lead the charge against Huawei. The Five Eyes may be good at technology but their judgment is very suspect. To please Donald Trump and Mike Pompeo, our Foreign Minister Marise Payne flew to Tokyo to join a meeting of the Quad to try to encircle China, as if the US military bases in Japan, Republic of Korea and now Darwin are not enough.

Through Pine Gap we facilitate US extra-judicial killings by US drones.

Going to war is the most important act that any government can make. Yet we cede our sovereignty in key strategic issues time and time again to the US.  This has been happening for decades and precedes Donald Trump.

In clinging uncritically to the US alliance, the Coalition assumes that the alliance will in some way protect us from a more assertive China. But in fact the only way we are likely to get into a fight with China is if we continue to act as a proxy for the US.

Too often, the Australian people who Scott Morrison claims to represent are sidelined domestically in the interests of the business sector and externally through our relations with the US.

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John Menadue is the publisher of Pearls & Irritations. He has had a distinguished career both in the private sector and in the Public Service.

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