Richard Denniss - Dead Right: How Neoliberalism Ate Itself and What Comes Next

Published by Black Inc.,

an imprint of Schwartz Publishing Pty Ltd

Level 1, 221 Drummond Street

Carlton VIC 3053, Australia

www.blackincbooks.com

Copyright Richard Denniss 2018, 2019

Previously published as Quarterly Essay 70

This edition published in 2019

Richard Denniss asserts his right to be known as the author of this work.

ALL RIGHTS RESERVED.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form by any means electronic, mechanical, photocopying, recording or otherwise without the prior consent of the publishers.

9781760641306 (paperback)

9781743820810 (ebook)

Cover design by John Warwicker

Text design and typesetting by Akiko Chan

FOREWORD

I n the past twelve months of Australian politics, the only thing that has collapsed more quickly than public support for the LiberalNational Coalition has been our politicians faith in market forces. In 2013 Tony Abbott was elected on a promise to cut red tape; at the end of 2018, the Morrison government rushed to pass legislation introducing fresh red tape for the electricity industry. This proposal came hard on the heels of new regulations for banks, social media companies, charities and more predictably unions.

In this country, its not just our prime ministers who change quickly; its also our policies, ideas and even ideologies. After decades of defining itself as the strongest supporter of free markets, the Coalition has recently adopted the tenets of its opponents. It now considers regulation of bad guys like terrorists, unionists and, more recently, the big banks to be good. At the same time, good guys like media barons are still benefiting from the deregulation agenda, which has allowed News Corp to partner with Foxtel, and Channel 9 to acquire Fairfax.

When I wrote the Quarterly Essay on which this book is based, some found the title confusing. Dead Right: How Neoliberalism Ate Itself and What Comes Next was not meant to suggest that the right of Australian politics is dead, nor that all neoliberal ideas and language are dead. Rather, my argument was that the right no longer places neoliberal ideas at the centre of its rhetoric and policies. Former deputy prime minister Barnaby Joyce has made it clear that spending large amounts of public money in National Party electorates was vital to his political strategy. Resources minister Matt Canavan defended his offer to subsidise the Adani coalmine on the basis that all existing coalmines were subsidised. Nearly the whole parliament agreed that the market could not be trusted to look after sheep jammed onto crowded boats headed for overseas abattoirs.

Prime Minister Scott Morrison has ignored the advice of AGL Energy, the countrys largest consumer of coal, that new coal-fired power stations are unnecessary and unaffordable. Scott Government Knows Best Morrison has instead rebranded coal-fired electricity as fair dinkum power, and plans to hurry through new legislation ensuring that more coal-fired stations are built as soon as possible.

While I disagree with many of the policies and priorities of the Coalition, I applaud its honesty in admitting that subsidies are an effective way to expand an industry, that regulation is a great way to change corporate behaviour, and that budget deficits are not irresponsible if the good debt is used to invest in infrastructure and public services that will deliver benefits for decades.

Although I prefer subsidies for renewable energy and dental care to coalmines and diesel fuel, in a democracy it is not my preferences nor Scott Morrisons that count; it is those of the majority of the population. Neoliberalism claimed that the market decided the shape of our economy and society, but the Liberal Party has recently made it clear that it is actually our parliaments that do this. If Australia wants a big coal industry, or a big renewable energy industry, or a big dental-care industry, then our federal parliament can make it happen.

Parliaments decide on spending, on who gets taxed and who receives funding. Barnaby Joyce and Matt Canavan have done the Australian public an enormous service by letting us in on the simple truth that politics matters and the decisions of politicians matter. The key question we must face is: what kind of country do we want to build? Do we want more coalmines, or more wind turbines? Better education and aged care, or lower taxes for high-income earners?

Over to you.

INTRODUCTION

T he era of economic rationalism, small government and blind faith in market forces is dead. It was buried and cremated by Tony Abbotts government, although neither he nor his two Liberal Party successors have yet delivered its eulogy, for the simple reason that, even as a corpse, the idea that what is good for business is good for the country has so much rhetorical and political power in Australia.

Senior Liberal MPs want to nationalise coal-fired power stations, yet they oppose nationalisation of the banks. They want to subsidise the Adani coalmine, yet they oppose subsidies for renewable energy. The NSW Liberal government bought a football stadium and plans to spend hundreds of millions of dollars fixing it up. And a Liberal prime minister, Malcolm Turnbull, said damn the budget deficit, lets cut tax revenue by $65 billion and see what happens.

Neoliberalism, the catch-all term for all things small government, has been the ideal cloak behind which to conceal enormous shifts in Australias wealth and culture. It has provided powerful people with the perfect language in which to dress up their self-interest as the national interest. Without such a cloak, policies to slash income support for those most in need while giving tax cuts to those with the most money would just look nasty.

Over the past thirty years, the language, ideas and policies of neoliberalism have transformed our economy and, more importantly, our culture. Much has been written for and against privatisation, deregulation and the outsourcing of public services. And much has been written about the social and political consequences of rising inequality. But the purpose of this essay is to consider, in the age of Trump, Brexit and Pauline Hanson 2.0, how the neoliberal agenda of free markets, free trade and trickle-down tax cuts has wounded our national identity, bled our national confidence, caused paralysis in our parliaments, and is eating away at the identity of those on the right of Australian politics.

Australians have been conned into privatising assets on the basis of a budget emergency that those pushing big tax cuts clearly do not believe exists. And we have been conned into deregulating the banking sector on the basis that competition among the banks would ensure good service at good prices. The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has killed off that idea once and for all. The larger result is a fundamental loss of faith in experts, in institutions and, increasingly, in democracy itself.

While there is no doubt that neoliberalism has succeeded in undermining faith in the role of government, there is much doubt about where Australia is now headed. Could the political right unravel? What is the proper role of the state in a world where even Liberals want to nationalise some industries? How should our democracy respond to the rise of populism? What would a renewed democracy look like, and where might it be found?