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As spokesperson for a group of women economists concerned with the direction dry economics is taking us, Eva Cox presents alternatives which embrace the idea of the common good, of which the public sector is an integral part

PRU GOWARD: One problem a lot of voters had during the last election campaign was actually distinguishing between the economic policies of Labor and Liberal. There's definitely a mainstream consensus emerging that the way out of our mess for Australia is lower taxes, lower government spending, privatising wherever possible and running the country along the lines of a large corporation. Someone eventually had to decide to take on the dry philosophers and their dry think tanks, which of course are dotted all over the country. And Eva Cox, national convenor of WEL, and a long time member of the Labor Party, has set up in Sydney the wet think tank. Her answer, the left's answer to dry economics. Eva Cox, welcome.

EVA COX: It's not really the left's answer; it's a women's answer. I think men are still puddling along in a sidestream of the mainstream of the main puddle of the dry tank, if you could ... I'm not a national convenor, I'm just a national spokesperson.

PRU GOWARD: All right, all right. The left, as we say, is struggling with all of this, but who is in the think tank and how would it run?

EVA COX: Well, we sort of refer to it as a wet tank because it's obviously going to be a women's economic think tank rather than the dry tank, which is the boys' economic think tank, so there's lots of those. Basically what we're doing is establishing a network of women who are economists, who are business people, who actually have a good analysis of what's going on and an alternative analysis, because there is a lot of alternative stuff coming out, not only from women, but from men. Overseas there's a lot more talk about regulation; there's a lot more talk about controlling the markets; there's a lot more talk about the necessity for maintaining community infrastructure. Unfortunately, Australia tends to tag behind the rest of the world, usually in a sort of five and sometimes 10-year cycle. And I think there's a lot of women, and probably some men as well, who are getting very concerned about the fact that the debate in Australia is no longer a debate, it's just a, you know, an 'after you' as they usher themselves through the right wing door.

What we really want to see is some genuine discussion about what the role of the Government is, what happens when you cut back on health and education and other sorts of services; what happens when you cut back on trains and you end up having to drive on roads and smash into each other; does it cost you more having roads. There's some very, very serious questions about the role of Government and about the role of the tax system. Suddenly we've got this bloody consumption tax coming up again. I mean, where did that suddenly come from? We've already got very high indirect taxes. One week John Hewson says we can't have one, we've got too many indirect taxes; the next week somebody raps him on the knuckles, presumably, and he says, `We need one; everybody's talking about a consumption tax'. Consumption taxes do not go down well with women. We do the household shopping and they don't make you save because you haven't got any money to save after you've paid the tax.

PRU GOWARD: But the idea is that your income tax is reduced.

EVA COX: The income tax has already been reduced for the high income earners and I haven't noticed that their tendency to save has increased. All they do is buy more imported goods out of it.

PRU GOWARD: Yes, but the consumption tax hasn't also been increased at the same time, so that the incentive has not shifted.

EVA COX: ... some of those goods, it has already. For instance, cars have got a much higher duty on them than they would have under a consumption tax, or much higher sales tax. Many of the items already have 30 and even 40 per cent tax rates on them and those will be dropped down to 10 to 15, so you will be able to afford more overseas cars and no bread.

PRU GOWARD: What's wrong with the Democrats' economic policies? They seem to tally a lot with the things you're saying.

EVA COX: I think the Democrats have got some good ideas in their economic policy but I don't think that they've actually worked a lot of them through. That was certainly the criticism that came up during the election, that the Democrats were making noises but they hadn't actually costed and worked them through. I think what we see ourselves as doing is picking up on some of these areas, doing some costings, working them through and putting them up for public debate, so at least the public knows that there are more things than what you find in the pages of the Financial Review, or Paddy McGuiness in the Australian, all these various other things, Gerard Henderson. I mean, there is a range of people from probably somewhat right of Genghis Khan to even further right to Genghis Khan who are now being seen as middle of the road economists.

PRU GOWARD: So what's your first step? You accept that government spending is going to have to go up.

EVA COX: No, we're not saying government spending has to go up. We're saying, `Let's have a look at what is a necessary level of government spending' and stop saying it goes up and down like an elevator. I think what we want to do is say, `What should government spending be? We're a low tax country, we're a low government expenditure country. We are nowhere near the average for the OECD in those areas', so for Australia I don't know why we do have to cut government expenditure, particularly since we no longer are actually borrowing for government expenditure. There are some very, very strange theories floating around the place and I suppose at this stage what I'm trying to do and what a lot of other women are trying to do is to actually make sure that there's actually some debate.

PRU GOWARD: When you say we're not a particularly high tax country, we're not particularly low tax either, when you compare us, say, with the United States, are we?


PRU GOWARD: We're sort of middle of the road in terms of taxes and government spending, aren't we?

EVA COX: Out of the 23 OECD countries I think we're 18th or 19th, which is very close to the bottom. We're actually a very low tax country and a very low proportion of government expenditure is the proportion of GDP and it's getting lower.

PRU GOWARD: What about, though, the Liberals' answer, which is to say, `Well, okay, we still need these services; we need an education system and we need a decent health system, but wherever possible let's privatise it so people have to pay for it directly out of their own pockets'.

EVA COX: There's an absolute contradiction in that, including we've got to now pay for our own old age superannuation, because what that does is push wages up. On the one hand you've got the Government saying, `We want to keep wages down' and business saying `We want to keep wages down'. On the other hand you're placing more and more demands on the individual pocket. If people have to pay for their own health and their own education and their own old age and their own, sort of, sick pay and all of those things, they're going to want very, very much higher wages than they're getting now. The costs then go very directly into inflation and various other things, which they don't if you provide these in the public sector.

PRU GOWARD: But why, because somebody's got to pay for them in the public sector too, through taxes. Doesn't it really all revolve around who is the more efficient supplier, the private or the public sector?

EVA COX: That's a debate that we actually .. despite the fact the private sector claims so, I'd hate to think that Alan Bond would be seen as an efficient supplier, or some of the banks and various things that have gone down in a crash now. I think there's inefficiencies on both sides and I don't think you can say the public sector provides expensive services, because very often they don't and very often the private sector does. I think the debate has sort of turned into a `Tis, tisn't', like little boys in the school yard, rather than a genuine debate about how you deliver services. One point I think you need to make is that it is often much more efficient to provide a public sector service on the basis of need, than to have a private purchase stuff. If you look at the private purchase stuff, it means the wealthy buy more health care, even though they're not nearly as sick, and the poor who are the people that have the higher sickness rates, can't afford the health care, so they buy less care.

I think we've got to decide what sort of country we want. Do we want a country where your access to education, health and other things is governed by the amount of money you can pay, or it's governed by the fact that you're sick, that you need it, that you're young, that you need training? We've lost the idea of the public sector, we've lost the idea of the common good, and we've lost the idea of some sort of communal responsibility for those that can't use the marketplace. As a result, I think we're going to have to lock our houses; the crime rates go up and we become a much, much more selfish and self-interested society, and that's not the sort of society I want to see and I think we've got to start talking about who pays for that.

PRU GOWARD: But in that case you've got to start convincing Australians that taxes are good for you.

EVA COX: That, maybe, is one of the tasks that we're going to do. We're going to try and convince Australians that it is not a black and white debate, where every type of government expenditure and tax is black, and every type of private expenditure is white, and that, unfortunately, is the sort of debate that we've been having for the last few years, to all intents and purposes. And that is not the debate that is happening overseas now; this is changing. You look at Reagan's America and you look at Thatcher's Britain, and you look at the social costs of those things and those countries have both got very high deficits and very high balance of payment problems, despite the fact they've been cutting savagely into their public sector. So there's a lot of rubbish around disguised as dry side economics, and what we're trying to do is actually trying to open it up and point out that a lot of what's been said is rubbish.

PRU GOWARD: Okay, but if you privatised a lot of the public sector functions by farming the work out rather than keeping people on the pay roll, aren't you going to produce a leaner production of services?

EVA COX: A leaner production of services also means longer queues, it means lesser services. If anybody has tried to get something out of some of the corporate things like Telecom and so on at the moment, that are all running on a very tight sort of make-profit type budgets, if anybody has ever tried to get their car back from the local garage on time, I don't think that we can say that .. what does lean mean? It means you spend less money; does it mean it's more efficient? No, it doesn't mean it's more efficient; it just means we spend less money. We really have to look at what's both efficient and effective and some of that I'm not denying, that a lot of public sector services were inefficient, hierarchical, slow and insensitive to consumer needs, but so are an awful lot of private sector services.

PRU GOWARD: Just one final question: give us an example of where you would re-regulate, Eva Cox.

EVA COX: Where would I re-regulate? I'd certainly do some re-regulation around the finance market, so that in cases where the Government wants to cut back on private expenditure, they don't have to do it by raising interest rates, which is an extremely clumsy way of doing it, which actually hurts quite often the wrong people and not the right people. This Government has limited its ability to do things, like, for instance, the standard reserve deposits, which was an old way that they used to pull money out of the public sector, or out of the general expenditure sector, which did not hurt the poor, which did not hurt the home owners, which did not hurt young families and the wage earners.

PRU GOWARD: Eva Cox, thank you for your time this morning. It was beaut to speak to you.