It’s great to be back in the hub of the neo-liberal conspiracy. I want to thank Byron and Whitney for allowing me to speak today because it is an honour to be here this afternoon as you appoint Sophie Mirabella as ALSF Patron.
I said this is the heart of the neo-liberal conspiracy as, for thirty-five years, ALSF has been at the forefront of many important debates.
Before the Liberal Party adopted policies of privatisation, deregulation and freeing up our labour market, ALSF argued those cases. One thing Liberal students have always been known for is for ideas. You debate and bring forward new ideas, you’re not shy of them being initially unpopular, and you base them on values and a clear understanding of our liberal philosophy.
Last year, as a newly-minted Senator, I spoke to you about the need for ALSF to remain at the forefront of ideas. To stay true to your values and not be afraid of disagreeing with politicians. Sometimes we need the idealism and optimism of youth, because Opposition is difficult.
We know that we win only when our policies have a clear foundation in liberal ideas. I use the word ‘liberal’ intentionally, and I know it has different meanings in different places around Australia, but being a Victorian, I’m sure you’ll cut me some slack.
Today what I want to do is raise with you what I think are a couple of threats, for those of us involved in the Liberal Party as well as those who share our world view.
Those who look back on the last thirty years of deregulation, privatisation, and the collapse of the Berlin Wall and look back with pride. Those who know how and why our economy has recently gone through its longest period of uninterrupted growth. Those who know and understand that hundreds of millions of people were brought out of poverty during this period, particularly in China and India. Those who understand that all of this came from the implementation of liberal ideas, both economically and socially across the world.
But I do think we face several key threats to our future success and today I will talk about them in the Australian context in particular.
Many of you may not know, but at the 1998, 2001 and 2004 elections, the Liberal Party won because such a high proportion of people over the age of 55 voted for us. It was quite extraordinary, but on some occasions, we got more than 50% of the primary vote from that group. It was this group that kept us in office at the Federal level. Now we have heard a lot about the ageing of the population in the context of the economy and the budget, but this also has a significant impact on what we might call ‘electoral demographics’.
The voting patters of different age groups can be driven by a number of things.
It can be driven simply by your age, reflecting the view that people become more conservative as they get older – the idea that a socialist at uni becomes a merchant banker and a liberal or conservative by the time they are 40. We like to remember this, of course, because we made our choice when it was hardest.
But this represents a challenge because we cannot assume that people will necessarily become more conservative, or vote our way more often, as they age or as they take on family or business responsibilities.
There are other factors that complicate these assumptions, such as when people are born. It is hard to disaggregate these factors, but we do know that people born before 1946 tend to be more conservative in their outlook. We also know that the people born in the first ten years after World War II tend to be less so.
There could be a number of reasons for this.
It could be the era in which people are born, but it could also be significant historical events that shape people’s outlook. Some have made suppositions about this. For example, do World War II and the Depression create a particular set of values in people that they carry for the rest of their lives? For the subsequent generation born immediately after World War II, the early-boomers as we might call them, Vietnam and conscription were significant shaping events in their lives. And it is true that we have never done, electorally, particularly well amongst that group.
The people born before 1946, called ‘Generation Blue’ by some analysts, have been the lynchpin of our recent success. Some surveys show they do share certain values of self-reliance, that they are more sceptical of government providing solutions for all of the social ills that the Left likes to think Government can address. It is also notable that they were strong supporters of a very strong, pro-Western foreign policy, during the Cold War.
I know it is history to people of your age, and I’m only 36, but I do remember the Berlin Wall. I remember all the left-wing propaganda about the nuclear weapons and impending nuclear war that was to be caused by this same strong pro-western foreign policy, particularly in the 1980s.
This is obviously a very different experience even for us here today, only separated by a decade and a half – as the fears and concerns of your generation are very different, and from the data available, focus on other issues, including climate change.
If we have strong support amongst people who are ageing and will not be voters in twenty or thirty years, we need to consider how we replace this support.
If we can’t replace this cohort of people who have historically voted for us in such extraordinary numbers, and if people do not get more conservative or liberal as they age, we have a problem. For we may end up with a governing centre-left majority in this country if subsequent generations do not share our values and aspirations.
For some have assumed that subsequent generations. who have been much more used to state intervention in education and health care, have had their views shaped in a very different environment – for example, the 1960s compared to the 1940s.
We could actually be faced with a threat to our ideas as much as our political success.
While I’m talking about electoral demographics now, and the threat it poses to the Liberal Party, I want you to also think about what this means for the sort of society we have, because ideas drive politics.
When John Howard came to office in 1996 he had a bank of ideas that he had been developing for twenty years. Peter Costello had been through student politics and his views on issues like foreign policy, particularly Israel, and on what government can do, were shaped by that time. If you grew up during the Whitlam years, then quite frankly you could understand why those people had a more sceptical view of government. So shaping the development of ideas and framing current events are both critical to future debates.
This leads me to the second issue which I believe poses a threat, what has been described as ‘issue ownership’.
Whether we like it or not, whether due to the level of engagement or preconceived notions that are hard to change, public opinion surveys over ten, twenty and thirty years show that the ALP has higher ratings than the Liberal Party on certain issues, including health care, education and industrial relations. Not always, but more often than not.
In similar surveys, the Liberal Party is considered strong on national security and defence, on immigration, and on taxation.
There is also a third range of issues, which can be described as ‘performance issues’. And I believe this represents a potential future agenda for liberals.
It might be hard to believe, but compared to most countries in the world, Australia has a very economically literate society. You have Terry McCrann or Ross Gittins often writing in the regular part of the newspaper, rather than kept to the business pages. People talk about interest rates, inflation and unemployment. If you compare our last Federal Election campaign and our economic debate to the American election campaign in 2008, you will find a much more sophisticated economic policy debate in the mainstream media.
The economy, partly because of that, is what I would call a performance issue. People can rate performance on the economy more easily because of this easily accessible information.
There’s a sort of scoreboard on the front page of the Herald Sun if you’re in Melbourne or the Tele in Sydney as you see interest rates, inflation, and the unemployment rate. All these numbers are easily measurable and comparable.
People can actually say, “The Libs are doing well, unemployment’s down to 3.7%” or that the ALP is doing well because of some other figure reported in the media.
Now that might not always be right, but it’s easily measurable. People can then relate these to their personal life very easily. People actually feel the economy. You know if you’ve got more money, you know if you’re worried about losing your job, if you can afford a home.
As Peter Costello said before he announced his retirement; the economy is not necessarily a natural Liberal issue, even though we think we’re better at it and, in recent years in particular, we have a tremendous record. This is because it is more contestable, more subject to regular media commentary, more subject to general political fortunes and debate.
If you go back and look at the mid-late 1980s, Labor was often rated ahead of the Liberal Party on economic management, just as it has been in many of the states over the past decade, where despite mismanagement by Labor governments, we should be ahead.
So why is it that when we look at issues like healthcare and education, the Labor Party rates well while the objective facts tell a very different story? Despite being under the management of State Labor governments in most of the country for a decade or more, we know they are in poor shape and getting worse, particularly the health care system.
We know that there are fewer hospital beds in my home state of Victoria now than there were when Labor was attacking Jeff Kennett for cuts to the health system. There are fewer beds, and more than half a million more people.
So why is it that people naturally associate these things as being Labor issues while Labor has been such a disaster? I think it goes back to this easily-measured performance.
Who here would have confidence in judging the performance of their state health system or their local hospital, or their local school or education system?
To me, an idea for us liberals, is to actually make those issues that Labor claims as its own, that the centre-left claims as its own, that even the Greens claim as their own, issues that can be more easily measured by citizens rather than simply experts, and thereby make them more contestable.
How can we make people feel empowered to make a decision that might go against their previous inclination? We need to make it easier for people to make assessments themselves. What we do know is that the only time people tend to change these perceptions is when there is public information that is easily accessible and digestible. Just as we know that the increased economic literacy over the past few decades has strengthened liberal ideas about economics and markets, it can do so for public sector services. This partly explains why so many vested interests in these areas argue so passionately against such information being made public. It is critical that we need to find a way to challenge these misguided perceptions. For if we don’t, preconceived notions that the government is always better at doing things will prevail.
If people assume that Labor cares more about schools and hospitals, they will also assume they’ll do better in those areas in government – despite the data saying otherwise.
However, it is when you consider these two issues of electoral demographics and issue ownership that I believe this risk becomes truly apparent.
We have all heard about the ageing of the population. We have all heard about the fact that there are five workers now to support someone over the age of 65 and in twenty years, when you’re in the prime of your earning capacity, there’ll probably be less than three. This means fewer taxpayers and more people that want or depend on government services or funds.
If you want to look at the services used by people as they get older, they are aged care and the health system. As I have mentioned earlier, these are issues that are regarded as helpful to Labor in various public opinion surveys despite their performance being so poor.
With fewer people paying tax, and more people asking for more services and therefore higher taxes, we need to engage with people to prevent a massive increase in the size of government, even while the services themselves do not necessarily deliver. If we don’t, we will head down the European path of dominating national health and aged care systems and a dramatically increased tax burden. Compounding this, as these sectors grow in our economy, if they are to be government-dominated, we will see a significantly larger state and much more limited individual choices.
Now, while I have outlined what I believe are two long-term risks that we face, I also want to highlight an opportunity.
While some of the trends may pose risks, the centre-left faces risks of its own. As always, that is founded in the left over-reaching and constraining individual choice and aspirations in the pursuit of a collective nirvana. Somewhat ironically, I think one of the main opportunities we have is related to the left attempting to use the language and ideas of liberalism, in particular liberal, or neo-liberal, economics.
In the 1970s and 1980s, as these formative debates about economic liberalisation were taking root through groups like ALSF and organisations like the Institute of Public Affairs and the Centre for Independent Studies, economics was seen as a tool for the neo-liberals.
There were books written in the 1990s saying, “We have to stop ‘economic rationalism” as if economic irrationalism was an option. But the Left now use the language of liberal economics to justify highly illiberal ideas. We see economic models and the language of ‘efficiency’ being used to justify drastic increases in the role of the state.
Earlier this week I read of one that I want to highlight – a proposal that we should consider a serious threat to one of the most basic freedoms in our liberal democratic society.
The Henry Review has been discussing congestion pricing for roads. In essence you will end up paying more to drive in peak hour than you would at midday on Saturday.
To an economist, this might make some sense. It would lead to more rational pricing efficient use of roads as people choose to drive at different times, reducing the ‘costs’ on congestion that are imposed on all road users.
But I put to you that this language is a sham. What this actually means is that the state is going to try and control this most basic part of your life by controlling how and where you travel. What does a tax on congestion really mean? It is a tax on moving around.
It might make sense in an economic model, but do you really want the government to be able to determine when and where you travel on roads that your parents and grandparents have already paid for? I’m not arguing against toll-roads for new projects.
What I am saying to you is that we need to seriously consider whether there is a role for the state in determining whether or not you’re allowed to travel around your own city. Whether or not you’re allowed to go down Pitt Street in Sydney, or drive through Carlton on the way to work in Melbourne.
Every illiberal society in the 20th century has had controls on the movement of people. It is a fundamental test of whether a society is illiberal.
In South Africa, they had Pass Laws. In the USSR and Eastern Europe, you had to present your papers and you weren’t allowed to travel freely. The state controlled where you could go. In China, the state controls where people actually move – whether they stay in rural areas or move to the city.
A tax, despite the fact that you may argue it is voluntary, is the government saying to you, “I’m going to charge you if you make a particular choice.” Is the free movement of our citizens something that the state should be allowed to impact upon? I put to you that it is not. The freer movement of people is an achievement of technology and in particular the twentieth century. It is not a legitimate area for the state to start limiting this most basic individual freedom.
What is more important to us? Is it choice, or is it efficiency? I put to you that as liberals, we don’t specifically aim for the ‘efficient society’. We talk of efficient government, so that the burden placed on people is as low as possible.
My point is that just because something makes sense in terms of an economic model, with all the flawed assumptions that may involve, and its proponents use the language of market economics, does not make it liberal. Nor does it make it a legitimate activity of the state.
Using economic models to justify new state intrusions into our personal decisions is a developing habit of government and various interests that seek to manage our lives. They want to put a tax on junk food, because it will allegedly save millions of dollars in the health system. A tax on alcopops, because people are apparently drinking the wrong form of alcohol.
Do we want a society where the government is making these decisions? It’s not an argument about taxation per se, it’s about what are the legitimate ends to taxation – the legitimate things we tax to provide the services that we need.
As Peter Costello and John Howard often said, we do believe in a state with the safety net. We do believe in the public health system. We believe in a private health system as well. But we tax people at the minimum level necessary to provide these services.
Should the state be telling you where and when you can go? Don’t fall for the trick that the tax is voluntary. Your choice to travel is voluntary – the tax is compulsory. The government, for the first time in Australian history would be taxing your movement around your own city and country.
I would also put to you that when we want an efficient government to lower the burden of tax on people, we don’t make judgements about whether BHP or Rio Tinto are more efficient, we believe the market makes those decisions. It is not for government to do so. Shareholders, workers, all of you that are going into various jobs next year will make a choice based on your own personal preferences, and what you believe is in your best interests.
They will not be the same choice, because as liberals we don’t believe there is one true choice. The so-called ‘efficient society’ as opposed to efficient governments and markets, has been the hallmark of the economic planner and the social engineer back to the days of Lenin, GOSPLAN and the five-year plan.
As liberals we have always opposed such measures, the increasing use of taxation to determine people’s behaviour is an insidious threat to personal freedoms.
Not being able to go to work when you choose, and being taxed for moving around your own city represents a new and unprecedented role for government in Australia. Being taxed for travelling or eating a particular food that you choose just because some social or economic planner decides that the country would be better off if you didn’t is a hallmark of an illiberal society.
We believe in markets as a means to an end. Markets allow people to make their own choices. We believe they shouldn’t be fettered by governments where possible, because governments aren’t able to make these choices as well as individuals. I put to you today that we need to seriously look at all claims for so-called state and government-imposed ‘market signals’ on what should remain personal choices, even if it is couched in language that is otherwise familiar to us.
What I’m trying to say here is that we need to start talking more in terms of choice as a value. Therefore there are legitimate restrictions on what the state should do.
Even if there is some model claiming that society may be better off overall, with all the flaws that entails, do we actually believe it is for the government to make that particular decision?
An opportunity here is that younger people tend to be more anti-authoritarian (and hopefully I’ve retained that streak in my personality) and value these freedoms and choices. I hope we can use this principle and examples like these to appeal to a new cohort of supporters.
Just as ALSF has been at the forefront of debates in the past, I believe you have a unique role in these debates. You have the capacity to debate ideas and to bring forward the views of your generation.
You need to continue to do that, because over the next decade ideas are gaining traction that are not only threats to the Liberal Party, but to the society that we believe in.
Thank you very much.