The 2015 Bruce Childs Public Issues Lecture, delivered by Mark Butler MP
I want to talk tonight about a vexed topic for those of us on the Left, one which in South Australia has accompanied many bottles of good shiraz and caused much worry for progressives; that is whether we’ve seen the end of the great Social Democratic Project. And I particularly want to address that topic from the perspective of two policy areas for which I’ve had portfolio responsibility over the past five years, namely ageing and climate change.
The frontline for the great Social Democratic Project has moved significantly over its 120 year history, but its core mission has always been the same: to break down structural inequality in our society, particularly inequality based on class, gender, race, religion, age or sexual preference. In Australia, there have been three great waves of social democratic reform, all of which profoundly changed society.
THREE WAVES OF SOCIAL DEMOCRATIC REFORM
The first wave washed over Australia around the time of Federation. It was based on the struggle for universal suffrage and basic rights at work, including the right to organise. Being a classic labour versus capital struggle, it was essentially one based on class, particularly the class barriers between different groups of white men. But there was also – with the struggle for universal suffrage – a strong gender element. We also saw, in the Fisher Government, the beginning of strong social supports like the age pension. But the generations that achieved those significant improvements saw their living conditions largely dashed by two world wars and the Great Depression.
The end of World War II ushered in the second great wave of social democratic reform. Social democrats were committed to preventing a repeat of the deprivations of the Depression. They set about building a framework of strong social supports and putting in place systems that would more fairly distribute the increases in national wealth from the post-war economic booms.
In Britain and Western Europe, this process is generally described as the beginnings of the welfare state, but in Australia social democrats relied much more heavily on the wages system rather than a big increase in taxation and transfers. But whether in Britain, Australia or Western Europe, capital largely accommodated this wave of reform; if only through their fear of the other product that was in the marketplace at the time: communism.
Social democrats, after enjoying the very significant rise in material prosperity through the post-war period, then moved to deal with other structural inequality.
They started to focus on race, on gender, and on sexual preference. The young Baby Boomers coming of age in the 1960s and 70s demanded a social dividend from the post-war economic boom, and clever politicians like Gough Whitlam, Don Dunstan and others harnessed that energy to drive the third great wave of social democratic reform.
Of course the fight against structural inequality is far from over. The condition of Aboriginal and Torres Strait Islander Australians on average remains appalling, the gender divide on a range of different indicators for marriage equality demonstrates that discrimination based on sexual preference is alive and well. But, broadly, it is fair to say that those three waves of social democratic reforms in Australia, and across western society, transformed the human condition.
And in Australia, we should proudly boast that it was a Labor project. It was the Labor Party and Australia’s trade union movement together in the driver’s seat for every one of those waves of social democratic reform. It wasn’t the Communist Party. It wasn’t the Socialist Party. It certainly wasn’t the Liberal Party and, I can tell you, it wasn’t the Australian Greens. It was driven by the social democrats in our labour movement.
ONLY SOCIAL DEMOCRATS CAN MANAGE TRANSITION
The second great objective of the Social Democratic Project, after the fight against structural inequality, is ensuring that major transitions or disruptions are managed appropriately; that pain is spread as broadly as possible and that opportunities from the new paradigm are enjoyed by everyone, not just the few. Keynes was not a social democrat, but his approach in the greatest disruption of them all, the Great Depression, particularly his focus on full employment, remains important to social democrats today, as we saw in Rudd and Swan’s response to the Global Financial Crisis.
But the starkest example of this second challenge managed well is the contrast between the Hawke and Keating period here in Australia and the neoliberal approach pursued by Thatcher and Reagan. Our three countries were confronted with a major transition flowing from the end of the post-war economic boom, two significant global recessions within a decade and major industry restructuring that saw hundreds of thousands of workers, mainly blue-collar men, thrown out of work.
Thatcher and Reagan decided to smash the post-war détente that had existed between labour and capital in the Anglosphere countries, exemplified in Britain by the miners dispute and in the US by Reagan’s decision to sack all of that nation’s air traffic controllers. Widespread privatisation and a significant redistribution of wealth to the top end in those two nations substantially set back the Social Democratic Project.
In Australia, by contrast, there was a focus on education, skills and training, and particularly on school retention to allow more young people to take advantage of the great Whitlam reforms in higher education. The Accords between the Labor Government and the trade union movement cemented the great post-war wages compact in Australia, and at the same time delivered working people a great social wage – Medicare, access to childcare, universal superannuation, just to name a few. There was still widespread pain in the Australian economy, with the loss of hundreds of thousands of blue-collar jobs. But people were supported. Many were able to enjoy opportunities that came from the long period of economic expansion that has followed. Only Labor could have delivered those two outcomes.
The next 15 years present an even greater scale of transition and disruption to Australia. That transition is centred largely on two profound shifts: the retirement of the Baby Boomer generation and the need to transition one of the world’s most fossil fuel intensive economies to a clean energy future in the face of climate change.
AGEING POPULATION A TRIUMPH, NOT DISASTER
The ageing of the population is generally regarded by economists and commentators as a disaster. It’s going to bankrupt the budget, it’s going to strangle our economy whereby older Australians use their weight of numbers to pursue their own self-interest at the expense of their grandchildren.
I think that’s all hogwash. I’m publishing a book in September where I cover that in detail. There is no doubt that the 65th birthday in 2011 of the oldest of the Baby Boomers kicked off a very substantial shift in Australia’s population profile. By the time the youngest Baby Boomers turn 65 in 2030, that age cohort of over 65s will have doubled from about three million in 2010 to almost six million. It will continue to grow. I’m not a fan of the doomsday approach to this question.
I’m a fan of the World Health Organisation’s perspective that the addition of 25 years to life expectancy is ‘one of humanity’s greatest triumphs’. It will bring a raft of challenges; but the greatest is to ensure that those additional years are good years in which older Australians are secure, healthy and valued by the community.
On all of those matters we need to do much more. Our Age Pension is the most modest in the OECD, yet it is under constant attack from the Tories and their barrackers in the media. Our superannuation accounts are inadequate for too many older Australians. Half of the women in the Baby Boomer generation have superannuation accounts of less than $30,000. Half of the women in their early 60s have less than $16,000. Rates of outright home ownership among Baby Boomers are in steep decline, removing one of the most important pillars of retirement income security. And our attitudes to older age are dreadful. The generation that created modern society’s cult of youth is now feeling its pointy end.
This transition to a new normal in Australia where about 20 percent of the population is aged over 65 requires serious policy attention – to retirement incomes, to housing, to healthcare and other areas. Only Labor has the policy depth and the values system that can sustain the Social Democratic Project in the face of such a massive population shift.
That shift will be easier to manage here than most other countries, in large part because of far-sighted policy reforms that were put in place 25 years ago by Hawke and Keating. But we also have exceptional demographic and economic projections. By contrast, in almost all OECD nations outside the Anglosphere, the retirement of post-war Baby Boomers coincides with very low fertility rates, and/or very low immigration, to produce populations that are ageing very fast and shrinking.
Germany is clearing vast swathes of vacant housing to create open space to mask a shrinking population. Japan’s working age cohort has been shrinking for 20 years. In 2050, Japan will be as much as one third smaller than it is today. And in our other two largest export markets – South Korea and China – the working age cohorts will also decline as Baby Boomer retirement coincides with low fertility rates and largely non-existent immigration.
GRASP OPPORTUNITIES, MANAGE IMPACT OF CHANGE
Australia by contrast will likely grow to about 40 million by the 2050s which means an exceptional level of ongoing workforce and economic growth. But such growth is a mixed blessing as I come to the second area I want to talk about, climate change.
A growing population makes the task of reducing our carbon pollution levels harder. Take Spain. In 2000, Spain was about twice as big as Australia – 40 million people compared to our 20 million. By 2050, on some projections we may well be around the same size as Spain at about 40 million people.
So our per capita task in carbon pollution reduction, between 2000 and 2050, will be twice that of Spain. On the other hand, our rising incomes and our abundant capital better position us to finance the extraordinary transformation we must undertake in our energy and transport systems and our land sector.
A meaningful response to climate change has two core commitments. The first is to ensure that global warming reaches no more than two degrees beyond pre-industrial levels. The second is that all nations do their fair share to achieve that goal. Australia must face up to that responsibility. We are the heaviest polluters per head of population in the OECD. That is the challenge leading into the Paris Conference in December.
This will require a huge transformation in our energy system, the creation of much greater capacity in renewable energy and an extraordinary transformation in transport. In our land sector, we will start to sequester carbon dioxide rather than continue to release it in the net volumes that we have seen since white settlement.
This transition will bring enormous opportunities in employment, innovation and our quality of life, but it will fall harder on regions that have traditionally based their prosperity on fossil fuels. I’m talking about areas like the Latrobe Valley in Victoria and the Hunter Valley and the Illawarra in NSW. I reflect back on the 1980s and how the Party and union movement managed that huge transition – I am convinced that only Labor, social democratic Labor, is able to ensure that that the impact is spread as broadly as possible, is managed as fairly as possible, and that those regions are able to readily access the opportunities that undoubtedly come with a clean energy future.
Labor’s emissions trading scheme will operate to share the responsibility of the transition, rather than focussing on particular regions or particular industries. The market-based ETS will deliver incentives for extraordinary innovation and employment opportunities. But a meaningful response to climate change is not a matter of choice.
It’s a matter of when we do it and how we manage it. We know the longer we delay real action, the steeper the climb will be. Only one part of Australia’s political system can drive this significant transformation in a manner consistent with our national values of fairness and opportunity: the labour movement.
OUR FUTURE IS THE THE SOCIAL DEMOCRATIC PROJECT
Friends, the end of the Cold War made it fashionable to think that we had passed into a profoundly new phase of history where the struggles of the 20th century were settled or irrelevant. Academics like Fukuyama talked about the end of history. Tories across the world toasted the end of social democracy. And many of us on the progressive side of politics fretted and wondered ‘what next for the Left?’
But they were all wrong. Because while we still confront discrimination in our marriage laws, the Social Democratic Project is not finished. While there is still rampant inequality for Aboriginal and Torres Strait Islander people, there is much work to do. While there is such a vast gender gap and growing income inequality between classes, that project is not yet done. And when we confront the scale of transition and disruption as we move to a clean energy future, the Social Democratic Project remains just as important today as it was in the 20th century.
We know in our hearts and in our minds that an Australia that remains true to the values that we built up in the 20th century – fairness and opportunity for all – will not be sustained by the reactionaries that have taken over the Liberal Party or by the Greens Party pontificating from the cheap seats. The fortunes of Australia are inextricably tied to the success of the Social Democratic Project, and to the values and the cause of Labor.