The traditional narrative about the economic reforms of the 1980s goes something like this: Australia had locked itself into an unsustainable, protectionist mindset dedicated to propping up dying industries like manufacturing that imposed high costs on consumers, diverted investment away from more efficient and productive uses, and condemned Australia to growing impoverishment in an increasingly competitive world.
The Hawke-Keating government cut back protectionism, opened the economy up, deregulated key industries like finance, and pursued a free trade agenda that set Australia up for three decades of uninterrupted economic growth — but at the price of a huge loss of jobs in manufacturing, especially after the early 1990s recession. And it did it by working in cooperation with the union movement.
You’ll find little disagreement with that basic description of events, other than around the edges, from anyone who’s not on the far left or far right. Even the Coalition backs that narrative — though it likes to add in the lie that it supported the reforms, when in fact it bitterly opposed many of the key reforms, and to this day is trying to undo them (think superannuation).
Thirty years later, Australia faces a similar reform challenge — only this time the institutional forces involved are very different.
Australia has locked itself into an unsustainable, protectionist mindset dedicated to propping up a dying industry — fossil fuels — that imposes high costs on consumers, diverts investment away from more efficient and productive uses, and condemns us to growing impoverishment in a highly competitive world.
Each of these statements is demonstrably true. Fossil fuels are dying — ask the premier international fossil fuel body, the International Energy Agency (IEA). According to its current outlook, even without a global commitment to net zero by 2050 and purely on current policy settings, coal-fired and natural gas-fired power will fall dramatically by 2040, because solar PV is “now the cheapest source of electricity in history”.
According to the IEA’s pathway to net zero by 2050, coal and gas would fall by one-third as an electricity source by 2030 alone, and fall by half again by 2040 — and that’s assuming an absurdly high take-up of discredited Carbon Capture and Storage.
Fossil fuels will impose higher costs on consumers — the cost of new coal-fired power plants is already so high that even climate denialists and coal fetishists such as Scott Morrison and Angus Taylor are reluctant to countenance building one; the proposed Kurri Kurri gas-fired plant will not, according to experts, lower prices for consumers but instead “displace some private sector investments; disrupt emerging market and technological solutions; and expose taxpayers to risks in a market that governments (sensibly) have moved out of over the past 25 years”.
Fossil fuels also impose costs on the entire community through greenhouse emissions and, in the case of coal, the deaths and illness of hundreds of Australians from the toxic particulate pollution they produce. Coal-fired power stations and coal mining companies do not have to bear these external costs, a form of indirect subsidy from the rest of the community that makes them more competitive compared to counterparts elsewhere that have to pay for their external costs.
The IEA also points out in its 2050 road map that investment in renewables will generate an additional net 25 million jobs globally by 2030 and add 0.4 of a percentage point a year to annual global GDP growth. Renewable energy investment will be a significant net generator of employment, especially in regional areas.
As with the case for abandoning manufacturing protectionism in the 1980s, the case for abandoning fossil fuel protectionism is economically unassailable. The decisions of the Hawke-Keating government to undertake those reforms have been more than vindicated in the decades since. But the environment for reform now is very different.
One difference is that the unions are now actively opposed to the reform process. Both the mining division of the CFMMEU and the right-wing Australian Workers’ Union are opposed to ending fossil fuel protectionism and support propping up these dying industries, lobbying the ALP hard to oppose action. Both unions are also significant donors to the Labor Party as well as controlling substantial blocs of votes within the party.
Major fossil fuel companies such as Santos, Woodside, Origin and Hancock Coal are also substantial Labor donors, and often employ former Labor MPs or Labor staffers.
There’s also limited support from the mainstream business community for reform — major institutional representatives like the Business Council and the mining industry ostensibly support the principle of economic reform, but oppose the detail of any reform proposed by Labor.
Another difference is that the Coalition remains irremediably opposed to reform, and remains committed to propping up dying industries and adding to existing protectionism with more taxpayer-funded fossil fuel projects. There isn’t even the facade of support that the Coalition offered the Hawke-Keating governments in relation to reform.
Since 2007, the Coalition has abandoned first a market-based solution to the transition from fossil fuels, then any active role for government of any kind, then embraced active support for fossil fuel industries.
Further, crucially, there’s no media or commentariat support for reform — in fact, there is relentless opposition. If the larger and more dominant media industry of the 1980s gave support — at times, uncritical and unquestioning — to economic reforms and acknowledged the skill with which Hawke and Keating pursued reforms ostensibly hostile to their own base, that has now been replaced by a culture war in which not merely is protectionism backed as economically sound, but any reform efforts are portrayed as a betrayal of Labor’s working-class roots.
The equivalent would have been The Australian campaigning against Labor in the 1980s for betraying manufacturing workers and selling out the working class by ending protectionism — all in the name of some inner-city, elite fixation with “market economics” — while running op-eds from Business Council executives attacking John Button’s rationalisation of the car industry and from disgruntled left-wing Labor MPs about how the party would become unelectable if it didn’t reconnect with its working class base and prop up manufacturing.
Some might also argue that the current generation of Labor leadership is a pale imitation of Hawke and Keating. Certainly, no one in the parliamentary ALP now has the communication abilities of Keating, or the charisma and public reputation of Hawke. But that argument risks receding into dewy-eyed nostalgia for the ’80s, and ignores the reality that policy articulacy and communication was very different back then — a unified, limited mainstream media controlling all forms of communication, versus a deeply fragmented media space and dying mainstream media business model now.
And the biggest difference of all, one apparently overlooked by the media, is that Labor is in opposition, not government. It is the actions of the Coalition that are exacerbating Australia’s already dangerous over-reliance on fossil fuels.
The reason few people examine Labor’s current problem around renewables versus fossil fuels as an economic reform issue is that the framing that applied in the 1980s around reform has been comprehensively abandoned — indeed, turned inside-out. The economic reform in question is now framed as the culture war of “climate change”.
Newspapers and commentators that once cheered Labor on for recognising the need for economic reform in the face of an unwilling labour force and union movement now accuse Labor of betrayal for doing the same. Even outlets that ostensibly support reform are highly selective. The Financial Review is happy to exhume John Hyde to attack the Coalition’s big government fiscal policy, but also happy to play up Labor’s divisions over fossil fuel subsidies.
Labor’s internal ructions over whether to continue propping up a dying industry or pursue the reforms necessitated by the needs of a competitive economy are a legitimate topic of political journalism. The challenges for Labor are real, and hard to solve. But the lack of context provided by journalists and commentators misleads readers and audiences. Moreover, the framing of this crucial economic reform as a culture war is wholly illegitimate, and entirely the equivalent of the media campaigning against Labor’s reforms in the 1980s.
Climate action will always fundamentally be about economics. And that will eventually obliterate the efforts of News Corp, centrist journalists and the Coalition to frame it as a cultural issue. The only question is how much Australians will pay for those efforts. The debates about whether Anthony Albanese needs to support a gas-powered white elephant, or whether Joel Fitzgibbon is right that Labor has lost its way with working-class voters, will end up as footnotes to a broader story of how Australia lost its way under the Coalition in the 2010s and 2020s.
Good analysis. Although I would quibble slightly, in regards to large sections of the media framing it entirely as a culture war issue. While much of the climate change debate is culture war based, there is also a lot of framing it as an economic issue. It’s just that they usually get the economics totally wrong.
For instance, they still largely perpetuate the myth that fossil fuel electricity generation is cheaper than renewables. So, when Morrison and Taylor claim that a gas fired peaking plant will save money, the reaction usually ranges from just nodding along, to active reinforcement. It’s usually only in places like Crikey, The Guardian, Renew Economy, etc, that writers will point out that renewables are actually cheaper. Even rarer, was someone pointing out, that the chief reason why the South Australian big battery is such an economic success, is that it greatly reduced the need for the far more expensive gas peaking plants.
It’s a similar story on jobs. It’s a long time conservative spin, which permeates the mainstream media, that there’s something noble about mining jobs or working in a coal fired power station*. While at the same time, there’s a pretence that jobs in renewables don’t really exist. Apparently wind farms and solar arrays build themselves. Nor is there any real mention of the jobs that may be lost due to climate change. So, opening up coal reserves in North Queensland is apparently a jobs boom, but all the tourism jobs that might be lost through the destruction of the reef, don’t seem to be worth a sentence or two.
So, there is an economic presentation of climate change, it’s just that their presentation is riddled with absurdities.
*Of course, when those workers do something like join the CFMEU, they rapidly lose their nobility, and in the minds of conservative politicians, mutate into union thugs.
Media is simply about presentation, or worse, avoidance of any issue tricky for business, LNP etc.
On jobs, along with fossil fuels and auto related, old industries are spruiked on the basis of employing an electoral target, (mostly white) male workers doing low skilled jobs not requiring higher education and wearing fluoro vests, and especially nostalgic imagery for those in retirement, for LNP votes.
Meanwhile, services employment, often requiring higher education, is criticised as not providing ‘real’ jobs for Australian men….. while those mostly male ‘union thugs’ projected and obsessed about in media do not represent union membership i.e. middle aged woman in health care.
Bosch – To work in the mining industry requires a comradely relationship far closer than most other working men and women. All know and usually have experience of coworkers who have lost their lives at work. In fact I found US companies so monetised that one could calculate how many they expected to kill if you could interpret their accounts. It is in the Budgets.
It is in this environment that there is great mistrust of employers and Government.
The Hawk/Keating reforms relied on trust and a future. ie jobs
What is being offered now? Shut down the mines and loose your job.
Would you trust Scrot if he said he would create new jobs for you? Not to mention the cheap overseas labour he is so keen on.
He is one of the reasons the CFMEU exists in its present form, along with all other unions.
So he wants to abolish the organisations that are reinforced by his policies. As an employee of an employer union (Yes they are unions) once said to me – “Its eating your own babies.”
I have liked Crikey’s campaign against lying: well done. I think it’s important however to include Nine Media, Chair Peter Costello, as barely distinguishable from News Corpse. The SMH has aggressively gone for Jodi McKay from the beginning, playing down her decency, the terrible attacks on McKay by Brad Hazard-to-our-health Minister; now she’s been pressured and has resigned, it appears for a time-server, Chris Minns, whom I heard speak two years ago. NSW has an entirely corrupt government, very similar to the one in Canberra. Yet Jodi has to go – for no obvious other candidate, but not Albo? The federal Labor Party has excellent candidates; the macho thing appears no more pretty in the ALP as the LNP. Except that stars in Canberra are Wong, Plibersek and Kenneally, also a host of others.
Yep. Nine / Fairfax have published about 47 articles about their dear Gladys and ZERO about Jodie McKay in the last 2 months.
I don’t think you can say “the unions” are opposed to reform. There was plenty of union representation at the climate strikes last week, and many unions are strong advocates of climate action. The two you’ve mentioned do make a lot of noise but they certainly don’t represent the whole movement.
You might be right CH, but in general unions have been veerry quiet these last years. Half the time deals with corporates are behind closed doors with dubious benefits for their members. It’s high time Crikey do an expose on wealthy union boss’ lifestyles.
Despite the good intentions of the Hawke-Keating Governments, they were operating under a neoliberal agenda, called “economic rationalism” at the time. This is hardly surprising, as many economists were taken in by the “just so” stories of Hayek (Governments can’t be trusted) and Friedman (markets, with perfect knowledge, will always lead to optimum outcomes), and taught their students to accept these stories. Keating, an autodidact, accepted this line, and hence we saw the beginnings of outsourcing, privatisation and the revenge of the rich upon the poor.
Then followed Howard, a disciple of Hayek, and we saw a period of white-anting the public service and the reducing the capability of government to serve population wellbeing. Hence, we have today a federal government stripped of either desire or capability to serve the needs and health of the Australian population; an era of lies, wage freezes, increased wealth inequality and lack of accountability.
So, while we might look back with nostalgia at a government that had some intelligence and capability, we must remember that it was the time when neoliberalism took hold.
I’d suggest there is continuum whereby Labor would also support social security safety net and Keynesian principles, but the LNP is equivocal on the latter two (except big business subsidies).
Going back further the Whitlam govt. ditched tariffs, subsidies etc. to avoid the trap of keeping industries on (political) life support…. interesting with UK trade deal now, their farmers are now outside of EU/CAP having to compete with Oz farmers with two generations of experience in not receiving subsidies….
As a self proclaimed classicist, Bozo is probably even now considering the reintroduction of Corn Laws, 21stC redux.
British “farming” long ago ceased to be family centred, it’s now dominated by corporate megafarms – ancient hedgerows (and thus sustainable ecological boundaries) were ripped out and fields made safe for machines, cattle kept permanently indoors fed on US subsidised maize & Peruvian fishmeal – since the scam of rendering down (at low temperatures – thanks to MrsT’s neolib dogma) scabied sheep, poultry with foul pest and abattoir refuse was wrecked by the entirely unforeseen BSE.
This is without pondering the rewilding Monbiot obsession, the Enclosure Act and Highland Clearances led to 80% of the UK landmass being owned by 2% f the population.
PJK was no autodidact – he was that most useful of fools when in office, easily duchessed by mandarins and ticket clippers.
I don’t believe that the two descriptions are mutually exclusive. Indeed, one may lead to the other. Keating was taken in, as were many others in all professions, by neoliberalism, which was created and accepted, either deliberately or naively, to justify the actions of right wing politicians.
It’s weird these days to think how seduced many of us were by ‘trickle down’ economics. It just seemed to make so much sense. Wouldn’t you love to see a modern day Paul Keating in full flight but with the knowledge of hindsight. Unfortunately no such person is in sight…
Hindsight was not necessary to point out the fallacy of the NuRite/Old Wrongs, noxious, neolib “trickle down” nutbaggery – basic arithmetic (as taught prior to the 70s) or a $5 calculator sufficed.
I was, and remain, a big advocate of true economic rationalism back in the day – because it is the exact opposite of the B/S being spread far & wide like fertilizer.
Tax turnover, include all external costs,like pollution, loss of amentity etc, currently borne by the community in the profit/loss ledger and legislate away ‘limited liability’ – it was done with Bottom of the Harbour schemes with a pen stroke.
A Jobseeker/Keeper type program, tailored for specific areas that are going to feel the brunt of transition from fossil fuel production to renewables, could be the way to go i reckon.
It’d be a big, bold, brave and expensive programme, a visionary one that would have to have a ten year framework to it, with the end result being no one left stranded on the beach, and a renewable industry with the power to employ and make profit for the long term, long after the massive investment is a distant memory.
First problem would be the Murdoch army – they would be licking their chops for any “big bold suggestions” to come out of the ALP. I don’t know how you get around this one, which is why my preferred strategy would be to win the election first by making people hate Morrison, then get cracking with visionary policy once in government.
The ALP has to walk a fine line in keeping its troops all together….because they will need a unified bloc if they are to win. The left leaning voters tear their hair out in frustration because the ALP refuse to be more overtly environmentally friendly, while on the right of the party, there are voters who will leak to right wing independents and (gasp) One Nation, should the party get too green. Too far left or right, they will leak votes. Green prefs tend to end up with Labor anyway, but not so votes lost to the right – they will end up with the Coalition more than likely.
So what can unify all of them, for at least one election?
Hatred of Scomo. The same way the AOCs and Bernie Sanders of the Democrats were able to hold their noses and pair up with the establishment Democrats, because all that really mattered was getting rid of Trump. And it worked.
But getting back to my initial idea – has a Jobseeker/Keeper transitional program been done anywhere else in the world to wean a community off one industry and onto another, with the least possible pain? It’d be great to have a template to follow.
As an aside..unfortunately it may have only been Covid that just got rid of Trump..The Trumpism Republicanism is well trickled down on the ground throughout the various levels of States’ judicial/political systems…
Yes, i guess you just have to play the cards the target gives you, and in the case of Trump….it was just SO Trump, his handling of Covid, could he have acted any other way? Not in his DNA i reckon.
While Oz has fared much better than most re. Covid, Morrison still has given any savvy ad person a stack of material to use in a “destroy Scomo” campaign, much of it Covid related too.
Labor’s policies are so tepid, they really should be called Lib Lite. I currently see no reason to vote for them no matter how much I despise the libs.
Maybe the nation is just locked into a hyper mort-gaged wealth creating bricks n mortar Neo-Lib/Lib lite choice !?..It would take a very brave Fed Opposition to challenge that with a national social justice housing policy..
Labor’s current social housing policy would deliver about 4000 dwellings per year over the first five years, that’s barely two for every village, town and city in the country. NSW has a waiting list of 50,000 right now. It wouldn’t take bravery, just a will to do what’s best for the country. Imagine what a meaningful social housing policy would do for jobs and manufacturing.
On transition, Germany on coal, under conservative Christian leader Merkel, but NewsCorp does not like her, nor Pope Francis, for their ethical and moral support for Moslem migrants. Accordingly an invalid reference point for Australia….
Industry transition was handled in the 80s by Hawke and Keating, mainly in the rag trade. It’s been done here and it’s been done in other countries. Not actually that hard, just a numbers game. What percentage of wage would you guarantee in the transition, what sort of re-training would you champion, which would have to be different for each region.
There are going to be a large number of jobs in coal mine remediation sites, of course the coal companies will wriggle their way out of 95% of their responsibilities, so the taxpayer will pick up most of the tab, but we’d get large swathes of country back, plus coal dust would be buried below ground.
Biggest thing going for coal mining is high wages, hard to earn that money in other semi-skilled or even skilled labour. Most of the diehards in the bush are concerned about getting another job paying $150K plus.