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Values and choices in economic policy: address to the Sydney Institute, 16 June 1998



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MEDIA RELEASE

 

Gareth Evans QC MP

Deputy Leader of the Opposition and Shadow Treasurer

 

EMBARGOED TO 6.OOPM, 16 JUNE 1998

 

VALUES AND CHOICES IN ECONOMIC POLICY

 

Address by the Hon Gareth Evans QC MP, Deputy Opposition Leader and Shadow Treasurer, to the Sydney Institute, 16 June 1998

 

Politicians’ credibility has been taking a hammering lately. Last month’s Morgan Poll on the subject found our traditionally lowly repute sinking even further: only 7 per cent of Australians now rank us highly for honesty and ethics. That puts us 81 percentage points behind nurses, 49 behind clerics, and even 2 points behind newspaper journalists. Only used car salesmen do worse.

 

It’s hard to argue that this widespread distaste for professional politicians and all their works was not at least part of the reason for One Nation’s extraordinary, and alarming, vote in last weekend’s Queensland election. Federal and State issues were jumbled up together, and a lot of the anguish was not very coherently directed, but a key element in the protest did seem to be just a cry of rage toward political elites generally. Certainly it’s time for the major political parties to take stock.

 

One obvious set of lessons being drawn is about the need for the major parties to listen more; understand better the impact on ordinary people their decisions have; communicate better why those policies and decisions are necessary, when they are necessary; and change them when they’re not. The Labor Party has already been through a lot of soul-searching in this respect since our defeat in 1996, and I believe that’s reflected in our now being seen as having a serious chance of making the Howard Government the first since 1931 to last just a single term.

 

For the purposes of this discussion, however, I would like to explore the issue of political credibility at an even more basic level - in terms of the values , or lack of them, that politicians bring to the political process. My own view - which has strongly influenced my approach to the rewriting of the ALP Platform last year, and the formulation of our economic policy - is that politicians can’t expect to earn respect in the community unless they stand, and are seen to be standing consistently, for a set of values: values which people can understand. values to which they can relate as meaningful to their own lives, and values to which they can warm.

 

Most people do understand that values are in fact critical in determining the policy choices that politicians make, whether those values are clearly or honestly articulated or not, whether they are overtly part of the public political debate or not, and whether they are widely perceived as attractive or not. But I suspect people would appreciate from the major parties more open and articulate expression of the values for which they respectively stand, and more obviously consistent adherence to those values.

 

What is hard for people to relate to, and warm to, is rudderless, drifting, wet-finger-in-the-air political leadership. which is reactive and opportunistic and apparently not guided by any more elevated sentiment than a desire to win or stay in office at all costs. A symbol of what a great many people see as wrong with contemporary politics has become the GST — which John Howard swore before the last election that he would “never ever” introduce; which eight months after it Peter Costello was still saying was “snake-oil”; but which for the last twelve months has been the tax that we simply have to have. Whether it survives the Tory wet-finger test, and retains that latest status for the next few weeks, remains to be seen ...

 

When it comes to values, Labor has traditionally worn its heart more visibly on its sleeve than has its opponents. It’s hard to deny that at various times in our history we have been racist, chauvinist and isolationist — and never especially socialist. But there have always been strong and deeply felt currents running of egalitarian and cooperative sentiment, together with a deep seated belief in the critical role of government in providing security and creating opportunity.

 

Our new 1998 Platform identifies the central values for which we continue to stand as fairness, compassion, individual freedom, labour rights, responsibility, democracy and community. In the specific context of economic policy, the new ALP Platform states that “The fundamental objective of economic policy is to promote the well-being and improve the quality of life of all Australians”.

 

The fundamental objective is not, you will notice, to reduce public debt to zero, or the current account deficit to less than 4 per cent of GDP, or to ensure that underlying inflation remains on average between 2 and 3 per cent over the course of the cycle. These should be seen as just means to a larger end, and the language of the ALP Platform hammers home the distinction:

 

Other objectives of economic policy, including controlling inflation and reducing current account deficits, are not ends in themselves but means to the achievement of the fundamental objective of higher living standards.

- Good economic policy puts people first, matching competence and efficiency with compassion and care.

 

It is harder to find any comparable distillation of core values, and their implications for economic policy, in the literature of the Coalition parties. There is no comparable set of Mos aic tablets to rival the status and authority of the ALP Platform — unless perhaps one counts the collective speeches of Sir Robert Menzies. But one doesn’t have to look too far to find the contrasts that have coloured the political debate between mainstream left and mainstream right for most of this century, and which colour it still, with ideological divisions currently more clearly etched than they have been for as long as I can remember.

 

Those divisions centre around the values of small government rather than large government; private rather than public sector; self help rather than state help; a focus on individuals rather than organisations or community; and respect for the victors in life, with reluctant charity for the deserving vanquished, rather than compassion and community support for those who, for any reason, can’t keep up the pace.

 

All these contrasts matter much more in economic management than it often acknowledged or understood. Where all of us stand depends on where we sit: not just we professional politicians, but the professional economists who bay at us from the public service, media and market-place. Margaret Thatcher’s TINA — “There Is No Alternative” — plays too prominent a role in public discussion of economic policy in Australia, as TINA did for too long in Britain. Only in the most exceptional circumstances are governments locked into inevitable and irrevocable courses of action. They make choices — and they make those choices based on the set of values they bring to the particular task of government.

 

There are three critical economic battlegrounds on which the next election will be fought, and each of them raises starkly issues about the kind of country we want Australia to be, and choices about the role we want for governments in getting there. These arguments — about how the overall economy should be managed, what tax reform should be introduced, and whether the remaining third of Telstra should be sold — are not just technicians’ issues, or special interest group issues, or fuel for political wind machines. Each one of them does involve quite fundamental value choices, and if we are ever to improve the quality of public policy debate — and to do something about improving the standing of the politicians who set its agendas — it is critical that those values and choices be exposed and understood.

 

Managing the Economy

 

Treasurer Costello’s first reaction last year to the impact of the Asian economic crisis on Australia was that it would be "barely measurable”. Since then, he and the Government have repeatedly claimed that the Australian economy has been effectively “fireproofed” or “insulated” against Asia: in his nursery version of the mantra, all Australia’s little pigs are safe (except maybe from Canadian and Danish pork producers) because we have built our house from bricks, not straw.

 

All these statements have been remarkable silly, and their unsustainability should now be apparent. We are, and are seen by the rest of the world to be, very trade exposed to Asia: in the case of Japan, of course, that has been true for a generation, and not just the last decade or so. That exposure should do us no harm in the longer run, as the different economies in the region eventually return to strong growth - as I believe they will, albeit at different speeds — chastened but institutionally much strengthened from the present experience.

 

But in the short run, we are going to be harmed. That’s already apparent from the battering the Australian dollar has taken, with speculative assaults forcing it well below what most analysts think is its commodity-based real value. It is apparent from the dramatic fall away in our growth expectations and forecasts for the coming year. It’s apparent from the fall away in our export markets, and the ballooning current account deficit. It’s apparent from our rapidly escalating foreign debt: the “debt truck” the Coalition was hauling around at the last election would be better portrayed these days as a road train, with another $33 billion worth of debt accumulated over the last two years — another $1,700 for every man, woman and child in this country. And it’s apparent from the way in which the external situation is putting pressure on interest rates to rise -at the very time that domestic activity is declining and crying out for rates, if anything, to fall.

 

Today’s Westpac/ACCI survey, showing business confidence and profit expectations at their lowest levels since the 1991 recession, should finally have exploded the myth that the Howard Government has fireproofed us from the Asian crisis.

 

Economic policy choices over the next two to three years are going to be quite limited for any Australian government, whoever is in power. With the return of a major current account problem, and concern growing again of a return of inflationary pressures, there is not a great deal of scope for major expenditure initiatives, even in key priority areas like jobs, health and education.

 

But we did have many more choices open to us over the last two years. The tragedy is that we are moving into the very gloomy period ahead with a domestic economic base very much weaker than it could and should have been. That’s most obviously true of unemployment, which — back over 8 per cent — is disgracefully and unnecessarily high. But it’s also true in relation to health and education and aged care and child care and industry innovation and infrastructure development, and dozens of other program areas, where we have seen a dramatic deterioration in both resources and outcomes. There were real policy choices available to the Government over the last two years: the Coalition made the wrong ones, and we’ve had, as a result, two tragically wasted years.

 

That there were different policy choices available is amply demonstrated by this year’s Budget papers. Let me explain. Labor has been arguing ever since the 1996 Budget that there was a better way to return the Budget to balance or better by 1998-99 than by going down the path of massive, painful and growth-destroying expenditure cuts. We did not argue against the desirability of returning the budget to surplus as soon as possible after the run of deficits which had been associated — in Australia as in so many other countries — with the recession of the early 1990s. We accepted from the outset, and still do. that it is desirable to aim at achieving budget balance or better over the course of the cycle. We did, however, argue very strongly that that result could be achieved by a much more moderate program of budget cuts: not hacking into spending by $7 billion or more in the first year, and maintaining the squeeze until it was time to roll out the pork barrel for the next election, but rather targeting cuts of just $1 billion in the first year. building up to no more than $3 billion by 1998-99.

 

The proof of that prediction is now clear for all to see in this year’s Budget Papers. The Government’s claimed surplus for 1998-99 is $2.7 billion: that is built on a series of policy measures, spelt out in the last three budgets and taking effect this coming year, amounting to a net outlays reduction of $5.4 billion. Subtract that $5.4 billion from the $2.7 billion projected surplus, and you have the projected deficit for 1998-99 if there had been no policy changes since Labor’s last budget. In other words, you have revealed in the Government’s own figures a starting point deficit - of $2.7 billion -which would have been wholly neutralised by the $3 billion of savings taking effect this year which I proposed back in 1996!

 

That arithmetic does not rely on any growth dividend. If the economy had in fact grown at Labor’s last term average of 4.3 per cent, rather than the Coalition’s average 3.2 per cent during this period, enabling unemployment to drop by now to around 6 per cent so that we had 150,000 more people back in work, it is reasonable to suppose that the additional revenue and less social security outlays that would have flowed from that state of affairs would have in fact generated a surplus this year of the order of magnitude the Government is now claiming.

 

The response of the Government to all this has not been in any way to challenge the arithmetic but simply to assert that Labor in government would not have gone down this path. But there is no credible basis for that assertion. Coming into office in 1983, we inherited from John Howard as Treasurer an absolutely massive deficit, as a proportion of GDP equivalent to around $25 billion in today’s dollars. Within four years we had converted that into a run of four consecutive substantial underlying surpluses — built in each case on jobs and growth, rather than on savage budget cuts.

 

Our priority in office was always — in accordance with the values articulated in our Platform — to promote the well-being of Australians by generating the maximum sustainable growth, creating employment and distributing income as fairly as possible. We did not always succeed on all these fronts, but it was never for want of trying. The Coalition, by contrast, has deliberately made growth and employment lower priority objectives than reducing public debt and budget deficits and the overall size of government. Reducing public debt and budget deficits are worthy enough objectives if you have a debt and deficit problem — but the difficulty for the Coalition is that by any objective international measures, and by any measurable standard of international concern. Australia did not in 1995, any more than it does now in 1998, have a public debt and budget deficit problem. (See attached charts).

 

What Peter Costello said here at the Sydney Institute last week — or perhaps more accurately what he didn’t say — was a telling reinforcement of the point I am seeking to make. It was a speech that tried to convince anyone listening that Australia’s fundamentals were right to weather the Asian crisis. In this context he emphasised the strength of Australia’s financial system. about which there is no disagreement. He emphasised our growth prospects, about which optimism is only possible if you look through last quarter’s rear vision mirror rather than through the windscreen to next year’s: according to the latest OECD Outlook our growth, so far from being the fastest or close to fastest in the developed world, as the Treasurer has been saying, will be surpassed this year by Canada, Finland, Hungary, Iceland, Ireland, Luxembourg, Mexico. The Netherlands, Norway, Poland, Portugal, Spain and Turkey!

 

The Treasurer last week also emphasised as among our fundamentals the projected budget surpluses, focusing entirely on their size and not how they have been achieved. And he emphasised the size of Australia’s public debt, explaining the further reduction in the pipeline - but not the extremely low base, by world standards, which he inherited.

 

What was not mentioned at all by Peter Costello last week was the size of our foreign debt, which is already very high by OECD standards and growing alarmingly fast. He dismissed our escalating current account deficit as a merely temporary, transitory problem: not mentioned at all was the structural dimensions of this problem, based on our poor national savings performance, and the Coalition’s broken promise in abandoning Labor’s $4.5 billion a year superannuation top-up scheme. Given the huge boost that would have meant to private saving, as well as to our capacity to generate decent retirement incomes for our ageing population, that was probably the most irresponsible single decision this Government has made.

 

As a columnist in the Australian Financial Review put it all together, in two sentences. last Saturday:

 

The Government’s line on the economy is that those selling off the dollar aren’t looking at the economic fundamentals. But the trouble is, they are: the current account deficit, the level of foreign debt and our reliance on recession-hit Japan.

 

But there were some even more telling and interesting omissions from Mr Costello’s speech than those I have mentioned so far. He didn’t talk at all about unemployment, perhaps not surprisingly given that day’s embarrassingly bad figures. But how can all the fundamentals we right when that most fundamental right of all — the right to a job —is not a reality for at least 800,000 Australians?

 

He didn’t talk about his Government’s choice to pull nearly $3 billion out of Australian education and nearly $1.5 billion out of labour market and training programs. Those two decisions perhaps say more about the values underpinning the Howard Government’s economic agenda than just about any other. How can any economy be truly “fireproofed” — or truly internationally competitive — when it is so conspicuously failing to invest in education, skills and innovation?

 

He didn’t talk about managing the economy to tackle inequality. He didn’t talk about managing the economy to ensure social cohesion. And he didn’t so much as tip his hat to the notion that good economic management is at least as much about jobs and job security, quality of life and distributional equity as it is about reducing budget deficits and public debt - particularly if debt and deficits are already, as Australia’s were when this Government came into office, at world’s best practice economic housekeeping levels.

 

Reforming the tax system

 

If competing values and choices are at the heart of economic management generally, they are even more obviously on display when it comes to tax reform. We can all agree that tax reform is a Good Thing — if Labor didn’t, we wouldn’t have done so much of it ourselves in office. But thereafter, where you stand, again, depends very much on where you sit.

 

Different values come into play, for a start, in the way the whole process of tax reform is conducted. There is a difference between an honest and open debate — of the kind that occurred with the Labor tax summit in 1985. and for that matter John Hewson’ s Fightback package before the 1993 election — in which options are fully explored and analysed well before final decisions are made; and the cynical exercise on which the Coalition has been embarked for the last year - albeit with obviously increasing nervousness — in which neither the shape of the overall package nor any of its details will be exposed until the election is well and truly upon us. with minimum time for its impact and implications to be fully understood.

 

Different values again come into play in the way in which different sides of politics and interest groups address the question of the adequacy of the level of revenue raised by the tax system. There will be some for whom the government, and the tax burden associated with it, can never be too small; and others for whom government expenditure on programs and services and infrastructure can never be too great. It is a useful starting point to this debate — particularly for those minded to rally to the small government banner — to realise that Australia is the second lowest taxed country in the OECD and has the third lowest levels of government expenditure (see attached chart). Labor doesn’t seek to increase the overall level of taxation — as out Platform puts it, we will “not seek to raise revenue beyond the proportion of GDP established over the past decade” — but we are certainly conscious of the costs and consequences to the whole community if that level of commitment were to be significantly reduced.

 

The starkest value issue associated with tax reform is, of course, who pays : the equity issue. Here there really are choices to be made, and the battle-lines have already been long joined. Labor’s most fundamental objection to a GST is that it is by its very nature a tax which is inherently unfair and regressive to lower and middle income earners —those in the community whom our values make us most anxious to protect. Any flat rate tax is regressive, and the unfairness is compounded when one appreciates the large proportion of low income household budgets taken up with goods and services that are likely to be newly taxed — including food, rent, power, telephone bills and public transport.

 

If a GST is used to fund a tax mix shift, with income tax cuts for the rich being paid for at the checkout counter by the poor, the unfairness is massively compounded. With or without a shift in the mix. the higher the GST rate is, the more unfair it beco mes, and experience almost everywhere is that a GST once introduced does inevitably rise; it’s always been found politically easier to do this than to directly confront voters with personal tax increases. And the problem of fairness is further compounded when one contemplates the difficulty of compensating everyone adversely affected by a GST - through some combination of the tax system, social security system and other specific measures. People are just too different — in age. sex, health and where they live for a start — for their different expenditure patterns to be effectively compensated, and stay compensated, in all cases. There will always be major losers.

 

In the Labor Party’s judgement, the economic arguments against a GST are just as compelling as the equity ones. There is nothing in our present distribution of taxes which is out of kilter with international averages or indefensible. To the extent that we do tax (in particular luxury goods, alcohol and tobacco) more heavily than is usual elsewhere, and tax services less heavily, that is - as with so much else in economic policy - a matter of choice. To the extent that we continue to have a major employment problem, particularly intractable in certain regions of the country, and that the best chance of solving it lies in the services sector, not least in areas like tourism and hospitality, it doesn’t make much sense to be introducing a tax which directly discourages job creation in that sector.

 

As to the other economic arguments, there is no correlation to which one can point internationally between the presence or absence of a GST or its equivalent and the overall health of the economy in question. There is no evidence, as Treasury Secretary Ted Evans has acknowledged, that a GST helps savings. There is plenty of evidence that it is inflationary — hardly a good reason for introducing it when the Australian dollar is under strain and the current account deficit is blowing out. On the question of the GST helping exports, there is compelling research indicating the GST will produce no helpful trade effect. In relation to the black economy, there is plenty of evidence from which to conclude that the GST will add to its size rather than generating enough revenue to neutralise it. There is the disproportionately adverse impact of a GST on small business. And there is even a serious question now being asked as to whether this kind of tax isn’t already on the way to obsolescence, because of the rise of electronic commerce, which makes it very difficult to collect.

 

Selling Telstra

 

The remaining big economic issue in this year’s election debate is the Government’s determination to sell the remaining two thirds of Telstra. And when it comes to public investment — the extent and nature of government commitment to the public sector, or to the sale of public assets such as Telstra — values and choices again loom large.

 

The full privatisation of Telstra was hailed as John Howard’s “master stroke”. Australians were supposed to be entranced with his Thatcherite vision of turning Australia into “the greatest share owning nation on earth”. But opposition to the sale of the remainder of Telstra remains strong — both in the city and the bush — and that is due in no small part to the link in many people’s minds between the sale of Telstra and the Coalition’s unabashed assault on the Australian public sector. Telstra is not an organisation Australians have held especially dear. But a great many Australians do hold dear the idea of government commitment to investing in vital public and community services. The Telstra sale is the signal to many people that here is a government that does not place value on community resources and that is not willing to make a choice to invest in and employ those resources in the longer term interest of the nation.

 

There is concern about what total privatisation will do, later if not sooner, to the quality and availability of unprofitable telecommunications services in rural and regional Australia. There is concern about shareholding by foreign telecommunications co mpanies leading inevitably to supplies of equipment at marginal cost from those corporations forcing out local industry suppliers. And there is concern about the impact generally on telephone services of a fully privatised Telstra flexing its already huge market muscle.

 

But the core of opposition to the sale lies in something more basic than even all these concerns - the sense that there is something inherently wrong. something fundamentally irresponsible, in selling off to a minority of Australians a major national asset that is performing an important public as well as commercial service, and which is presently owned by all Australians.

 

The Government’s loudest argument for selling Telstra tries to confront this issue. Sell Telstra. says the Government, to reduce public debt — to bring it down to just 1.5 per cent of GDP by 2001-02, according to Peter Costello here last week. Sell it to save and spend every year — perhaps on tax cuts — the interest on that debt. Sell it so that maybe we can spend a chunk of the proceeds on other capital projects.

 

But these arguments are utterly without merit. Australia does have a longstanding private saving problem, which needs further government policy attention, but we don’t have a public saving problem. Australia’s public debt is already, as we have seen, the second lowest in the industrialised world. and there is no economic purpose to be served in aspiring to become a zero net-debt country — any more than it makes sense for businesses and households to operate totally debt free if they can improve their welfare or their business performance by borrowing, and the debt in question is readily serviceable and repayable. Government should try to avoid, over the course of the economic cycle, borrowing to fund recurrent expenditure, but there is every justification for sharing with future generations, who will after all enjoy them, the burden of paying for new capital assets.

 

If it is hard to understand where the national advantage lies in selling to a minority of Australians a great national asset that is presently owned by all Australians, it is even harder to see where the national interest lies in allowing foreign investors to take up fully 35 per cent of the shares: why should foreign interests, holding $20 billion worth of ownership, be delivered $700 million or so of dividends each year when those dividends could be used to make our hospitals work better and our schools work better and to get people back to work? Once Telstra is lost to public ownership, and to foreign ownership on this scale, it can never realistically be bought back again.

 

The most compelling argument of all is that it will be only a matter of time, and quite likely a very short time, before the dividend stream from Telstra will in fact exceed what we are paying out in interest on the $40 billion or so worth of debt that could be redeemed by its sale. On the reasonable assumption that Telstra dividends will, like those of most telecommunications companies around the world, continue to increase by 15 per cent or so a year, and that the bond rate on public debt will stay at around 6 per cent, that cross-over point will be reached in just four years time. Even on more cautious assumptions, like a 12 per cent average dividend increase or an 8 per cent bond rate, that cross-over would only be delayed a year or two longer. In return for a very short term net revenue gain, the Australian community would — after a very few years —suffer a net revenue loss forever. That isn’t good economics: it’s just a triumph of small government and free market values over common sense.

 

A sense of loss, of the community losing out in some way over the longer term, is something most of those opposed to selling Telstra instinctively feel — even if they don’t know the finer points of the debt argument. Their instinct, that it’s crazy to sell off an asset like Telstra in a short term grab for cash, is sound. It’s an instinct based on values that are alien to the Howard Government, and one that reveals the growing gap between what the Coalition sees as the role for government and what Australians want from government.

 

Australians don’t want to live in a ‘nanny state’. They don’t want their hands held from the cradle to the grave. They understand the benefits of competitive markets. But they do want access to the things that underpin a fair and civilised society: a dece nt education system. a good standard of health care, affordable child care. employment opportunities and economic security.

 

They don’t want a selfish society where essential services are available only to those who can afford them — and they don’t want a society where increasing inequality between the rich and the poor is the order of the day. In short, as Fred Argy points out in his new book, Australia at the Crossroads , the Australian community still favours ‘progressive liberalism’ over ‘hard liberalism’. Argy’s conclusion — after looking at a number of surveys - is that while Australians are happy with “a reasonable freeing up of markets”, they want to “draw a line on market liberalisation and contraction of the role of government”. He puts the concern in these terms: can it really be said that the community is better off because of the shift from public to private investment, in a situation where we’ve got more commercial office blocks, motels and shopping centres, but where public investment in health, education and community services has declined?

 

If these are the values we want underpinning government, then there are choices that have to be made of governments in terms of public assets and public investment. We must ask ourselves the question: what constitutes a proper investment portfolio for government? Instead of forging ahead with an ideological agenda of minimalist government, we must ask ourselves: what does government need in its investment portfolio to give it the capacity to build a successful and prosperous nation in the 21st century?

 

The requirements for such a portfolio would have to include at least these:

 

* that it focuses on medium and long term outcomes, not short term electoral quick fixes;

 

* that is generates a medium to long term economic return, as distinct from a short term financial profit;

 

* that it equips Australia to reap the benefits from and survive the pitfalls of globalisation;

 

* that it contributes to intergenerational and interregional equity; and

 

* that it recognise s the value of investing in social and human capital infrastructure, as well as economic infrastructure.

 

Looking at the role of government from this perspective is surely a more responsible choice than simply zealously pursuing smaller government for its own sake. Smaller government is not necessarily better government, and it does not necessarily produce an improved allocation of national resources. There is nothing intrinsically wrong with transferring the delivery or the ownership of government services to the private sector. But once governments start acting from the presumption that ‘private is always better than public’, they deny themselves — and the community — the opportunity to invest in and develop assets and services in which the community’s interests are best served by the asset or service remaining in public hands. They also deny themselves — and the community — the capacity to bring a set of values to investment decisions that go beyond the desire to reduce expenditure, or shift debt off the public books, or yield a short term financial profit.

 

And that, of course, brings us back to Telstra. The values many Australians are bringing to the debate about selling Telstra clearly go beyond the desire to achieve a short-term financial gain. The strength of feeling coalescing around those values is something the Coalition has manifestly failed to grasp in its pursuit of an agenda of hard-edged liberalism. It says a great deal about Australians that, rather than wanting to become “the greatest share-owning nation in the world”, they appear to prefer to share across the whole community the affordability, accessibility and availability of telecommunications services — and the dividends returned by providing those services efficiently.

 

There's a lesson in all of the economic policy issues I have discussed this evening, and from a number of other recent developments in Australian politics, not least in Queensland last weekend. And that is that any party in or out of government has to understand and respond to the genuine concerns of ordinary Australians - not just their immediate financial concerns but their concerns about the kind of country they live in -or that party just won’t be in business.

 

We in the Labor Party believe that the values that move most Australians are the values that move us : supporting a society which is cooperative and compassionate, giving priority to well-being, quality of life and employment opportunity for all members of the community; giving real weight to public goods and the idea of public service; and giving priority to long term satisfaction rather than just short term gratification.

 

We don’t think that most Australians want to live in a society that is confrontational, divisive, focused on private gain rather than public good, and indifferent to the pain and humiliation of those who fall behind.

 

If we are wrong about this, then it may be that — to quote, as I often do, the immortal words of Dan Quayle - “If we don’t succeed, we run the risk of failure”. But at least it will have been an honourable fight, and we’ll be able to do what so many politicians —fairly or not — have been for so long accused of not being able to do, and that is live with our own consciences.

 

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