Nick G
The Abbott government is using an out-of-date
and unworkable Australian Constitution to advance a reactionary agenda designed
to erode people’s rights and freedoms and to increase the burdens already borne
by the working class and other working people.
It is relying on this Constitution to enable
it to pass the funding responsibility for various policy areas to the state and
territories. It means that those governments will have to raise their own
funds. While leaving the rich free to continue their notorious tax evasion, it
raises the prospect of austerity measures for the rest of us courtesy of state
and territory governments unable to raise required revenue.
The Australian Constitution emerged as the
result of a three-way tussle for power between the British and the colonial
elites on the one hand, neither of whom wanted to surrender influence and
power, and the proponents of a federated parliament with the power and
influence required for a new central authority.
The end product was a weak three-way
compromise with some powers retained by the Crown, some by the governments of
the colonies and some being passed to the Commonwealth.
It was inherently reactionary recognising
neither the existence of Aboriginal and Torres Strait Islander First Nations
nor any definition of the rights and freedoms of Australian citizens.
It was, instead, a tedious, dry and
cumbersome set of procedural rules for government at state and federal levels
with a focus on trade, commerce, and fiscal relations. It is noted only for its
complete unfamiliarity to the vast majority of those whose lives are governed
and regulated by it.
The British retained the right to appoint
state governors and the Governor-General, retained the power of the Crown to
assent to or refuse Australian legislation, kept the British Privy Council as
the highest court of appeal, and exercised control over Australian foreign
policy. Some of these have since been modified or removed.
Section 51 defined the powers of the federal
government. Anything not specified here
remained the prerogative of the states.
This included health and education.
Jealousies over power and influence created
stupid anomalies. Although rivers ran
through states and sometimes defined their borders, and were thus a shared
concern best suited to federal oversight, futile debates left the power for use
of water in rivers with the states. This
remains a problem to this day. Tim
Cartwright, Victorian Deputy Police Commissioner appeared on the ABC’s Q and A
program on domestic violence on February 23, 2015, bemoaning the fact that an
“archaic system” of state and territory responsibilities meant that Apprehended
Violence Orders (AVOs) taken out in one state were next to useless in another
jurisdiction. Probably better examples
can be found, but they all point to the Constitution being out-of-date and not
in the least bit fit for purpose if that purpose is defined as protecting the
rights and interests of Australian citizens in a progressive and developing
single nation state.
Not only is the Constitution an archaic
obstruction of the interests of the Australian people, it is virtually
impossible to change. Amendments only
come into effect when they are carried by a majority of all Australian voters and by a majority of the states.
So what are Abbott and his cronies on about?
Preserving
the right of Parliament to restrict and erode people’s freedoms
In essence, they have two major
objectives. The first is to preserve the
“sovereignty of the federal parliament” and its ability to make laws affecting
the rights, freedoms and privileges of Australian citizens unencumbered by
anything remotely resembling a Bill of Rights or as a result of obligations
under international treaties. This
extends to proposals for the recognition of ATSI peoples within the
Constitution which is merely a blind for denying recognition of ATSI peoples’
rights in a Treaty, and denying their rights to sovereignty and
self-determination.[1]
The template for the current rush of Issues
papers, Green and White papers was the National Consultation on Human Rights
established by the Rudd Labor government.
It goes without saying that in their service to capitalism and loyalty
to the interests of US imperialism there is no fundamental difference between
the Coalition and Labor. The National
Consultation included reference to “amending the Constitution to include a bill
of rights” as an option on page 13 of the Background Paper; however, the terms
of reference on page 16 conclude with the statement that “The options
identified should preserve the sovereignty of the Parliament and not include a
constitutionally entrenched bill of rights”.
When is an option not an option?
When the rights of the people are being debated, it seems.
Again, the Australian Law Reform Commission,
tasked by Abbott with leading a public Inquiry into the relationship between
Commonwealth law and the exercise by Australian citizens of their traditional
rights, freedoms and privileges, notes (p. 11): “Whether the introduction of a
bill of rights in Australia is desirable is widely debated, but it is not the
subject of this Inquiry”.[2]
Under no circumstances do the ruling class
and its parliamentary parties want the Australian people to have a constitutionally-protected
statement on their rights and freedoms.
They want to preserve the situation whereby the Australian parliament
may erode or restrict our rights, freedoms and privileges irrespective of
traditional custom and practice or obligations under signed international
treaties and declarations, providing it does so clearly and unambiguously[3]. Such is the definition of “sovereignty of the
parliament”. In practice this means no
more nor less than the sovereignty of US imperialism over Australia exercised
through its collaborator parties holding a “no holds barred” authority to act.
Restrict
the scope of federal services and pass revenue raising back to the States
Secondly, they want the states to be
sovereign in areas like health, education and housing and homelessness, meaning
that the Commonwealth would be absolved of the responsibility for funding these
areas and therefore under no political pressure to raise the existing pitifully
low tax requirements placed on the corporate sector and super-rich individuals.
The Prime Minister’s recent insulting gaffe
about “lifestyle choices” and Aboriginal and Torres Strait Islander peoples in
remote communities arises directly from this agenda. Federal funds for services
to remote communities have been cut. WA,
which has creamed royalties from mining on Aboriginal lands for years, has
cried poor and said it cannot raise the funds for services to 150 communities
which will have to be closed. This is a foretaste of what is to come when
states and territories have to find the funds for health, education and
housing.
The federal government has far greater
revenue-raising capacity than individual states and territories. This is referred to in the jargon as
“vertical fiscal imbalance” (VFI). In
1933 the Commonwealth committed itself to assisting states and territories in
the financing of their various governmental undertakings by distributing part
of its revenue to them. In the jargon, this was referred to as “horizontal
fiscal equalisation” (HFE). An equity
principle underlay HFE: that whether an Australian citizen lived in a richer or
poorer state, or lived in a major city or a remote community, all were entitled
to the same level and quality of government services.
VFI increased in favour of the Commonwealth
under the conditions of the war against fascism when states agreed in 1942 to
transfer the power to tax income to the central government. This was driven by the national interest in
financing the cost of the war.
Also driven by the national interest was the increasing
involvement of the Commonwealth in the “soft” service delivery areas of
welfare, housing, health and education.
In 1945, a federal Department of Education was established. In 1946 the social expectations that came
with the post-war popularity of the “welfare state” carried a Constitutional
referendum giving the Commonwealth responsibility for welfare benefits
including maternity allowances and child endowment, unemployment payments,
pharmaceutical, health, hospital and dentist services.
Revenue
shortfalls and the austerity agenda
In the conditions of expanding capital
accumulation and growth in real wages, the federal government has two main
sources of direct revenue (ie excluding loans, sale of bonds etc). They are taxes on business profits and on
personal income. In the mid-1970s, as
finance capital consolidated its domination over manufacturing capital, capital
was increasingly diverted from investment in the growth of surplus value
through manufacturing and into speculative investments in the growth of
fictional capital. This is not the place
to detail that process; suffice it to say that a whole range of dodgy financial
instruments were created to facilitate trades in non-productive assets leading
to an explosion in the fictional value of derivatives, CDOs and so on.
The first sign in Australia that the federal
government’s revenue base was problematic was the demand for a broad-based
consumption tax - the GST. This was
because it was politically inexpedient to raise income tax at a time when real
wages were entering a long-term decline and because manufacturing was also
entering a long-term decline and unable to sustain the revenue base that was
required for the totality of federal government expenditure. Introduced in 2000 under John Howard, the GST
has been described as “arguably the single most important reform of the
financial arrangements between the Commonwealth and the States since
Federation”[4]. The GST provided the federal government with
a large new source of continuous revenue. In a deal with the states and territories the
GST became the funding pool through which HFE occurred, thus releasing other
federal government revenue streams for national spending priorities. In other words, the bulk of the money that
states and territories provided for health, education, housing and other “soft”
services came through a new tax collected by the federal government and then
distributed to the states under an agreed equity principle. The GST hit a
number of small businesses very hard, and it was borne unequally – low income
earners lost a greater proportion of their disposable income through it than
did the rich.
The second sign that the federal revenue base
is problematic has been a growing chorus of reactionary voices demanding a
review of federal-state fiscal relations only fifteen years after “the single
most important reform” of these relations since Federation. Neither party has
pursued the big end of town as a revenue base, so demands are raised for
increasing the rate of the GST, or widening it to include currently excluded
services. A whole host of other
reactionary measures from medical co-payments to increased tertiary education
charges and fees complement the GST debate.
Reviews of the tax system by federal and state governments (South
Australia for one) are announced.
The two policy areas that have sparked the
latest demands for tax reform, changes to the GST and a shake-up in the
operation of the federation are health and education. Health encompasses a major part of the federal
government’s budget. The ruling class
and its servants are horrified by projections of the demographic implications
for this area of spending, citing ageing (both increased longevity and the
spiralling ratio of retirees and the elderly to those in the workforce),
disability and Indigeneity as causes for a future inability of the federal
government to pay for the health of Australian citizens. That same ruling class and its servants recoiled
in horror when the Gonski Review of education revealed the massive funding
increase required to address inequality and low achievement across the three
education sectors (public, Catholic and private).
This is how Christopher Pyne, Minister for
Education in the newly-elected Abbott government, reacted when criticised for
cutting two-thirds of the funding promised for the Gonski reforms by the previous Labor
government. “We want to treat the states
like adult sovereign governments,” he said.
“They run their own schools, they run their own hospitals, they need to
find their own revenue measures if they believe they don’t have enough funds to
do so”. When asked by journalist Sarah
Ferguson where that money was going to come from, Pyne was dismissive: “Well
that’s a measure for the state treasurers”[5].
Tony Abbott was no less equivocal when
releasing the terms of reference of his White Paper on Reform of the Federation
on June 27, 2014. Announcing them to a
meeting of the Federal Liberal Council, Abbott said it was time to make every
level of government “sovereign in its own sphere”. He proposed that Commonwealth funding should
be limited to “core national interest as spelled out in the Constitution”. That was a reference to the Section 51 powers
that exclude health and education from the responsibilities of the federal
government. It was noted by at least one
journalist, the ABC’s Louise Yaxley, that the White Paper can draw on the 2014
Audit Commission report which recommended that the states revert to imposing
their own income taxes.
There is a secondary thread to the argument
in favour of passing funding responsibility for health, education and housing
to the states, and that is the neo-liberal view that competition is inherently
healthy and removes inefficiencies (read “costs”) in service delivery. There are demands from the Right for a
weakening of the equity principle underlying HFE, or for removing HFE
altogether. Adelaide University academic
Jonathon Pincus criticises full HFE as a disincentive for states to be
efficient. He calls for a “balancing” of equity against efficiency in HFE
distribution and believes that there is a case for supporting the “unequal
fiscal treatment of equals within a federation”. His is basically a cost-cutting approach
rather than one focussing on the quality of service delivery. Efficiency occurs where states and
territories vie to “provide goods and services at a lower cost”[6]. NSW academic James McDonald likewise sees HFE
as a disincentive for states to “maximise their Gross State Product” (the sum
total of business activity in state or territory in a given period). He wants the GST raised in each state or
territory to go directly to the government of that state or territory and to be
combined with other state revenue raising (land tax, payroll tax, mining
royalties and so on). He wants to make
“HFE grants less desirable for state governments than GST earnings,
differentiating the efficiency and equity layers of state funding.” State government ambivalence towards tied
grants (grants in which the Commonwealth dictates where and how the money
should be spent) should be used to “motivate them to prefer internal earnings”[7]. Needless to say, the jettisoning of equity
from HFE is a door-opener for austerity measures at state and territory levels.
A free
ride for the rich: turning back the wheel of history
Far be it for a Communist Party to advise
capitalism on how to make itself more sustainable. Nor can capitalism be made
more democratic when political power in the state is held by a minority class
whose interests stand diametrically opposed to those of the majority. By political power we mean more than just
which political party of capitalism wins office through an election every three
years. We mean that power which is
capable of being exercised without interruption through organs of ideological
and physical control: the education system, the mass media, the police,
judiciary and armed forces. Workers understand this instinctively: their rights
and their history are never taught or expounded in schools; they never receive
support from the media when they fight for their rights and conditions; the
police and other organs of state power line up with the big end of town. If
there are ever exceptions they merely serve to prove the general rule of the
class basis of actual state political and economic power.
However, we do have an interest in
protecting, defending and extending the rights and freedoms that people have
won in struggle throughout history. We
have an interest in weakening the hold of imperialism over political power in
Australia and in utilising contradictions between the various sections of the
ruling class.
We are firmly of the belief in the
desirability of the following:
A Treaty between the government of Australia
and the Aboriginal and Torres Strait Islander peoples. It should recognise that
the invasion and seizure of the lands of the Australian First Nations people
was everywhere carried out by force and violence, or the threat of force and
violence; that the foundation of the colonies and the subsequent proclamation of
the Federation did not and will not wipe out the rights of ATSI peoples to
self-determination and the exercise of sovereignty within the Australian state.
A
Bill of Rights written by the people, defining and protecting their rights and
embedded in a new Australian Constitution.
The
replacement of the Constitution created by imperialism and the ruling class
with an anti-imperialist, republican and democratic Constitution. By anti-imperialist, we mean that it shall
enshrine neutrality and independence in foreign affairs and not allow any
foreign power to encroach upon the national sovereignty and territorial
integrity of Australia. It shall also
provide authority for nationalisation of foreign enterprises and complete
regulation of their activities, if allowed, in Australia. It will annul unequal treaties and agreements
and specifically cancel measures such as Investor State Dispute Settlement
clauses which infringe on our sovereignty.
It will be republican and democratic with provision for periodic review
and change as circumstances may require.
Consistent with the above, we demand that all
revenue raising for the use of Australian governments at federal, state and
territory levels be vested with the federal government.
We demand that in relation to delivery of
services that the principle of subsidiarity, namely that responsibility for
service delivery lies with the level of government closest to the delivery, be
applied, but within national policy frameworks for each of the delivered
services.
We demand that in the distribution of
federally raised funds to the states and territories, full HFE be implemented.
We demand that the GST be scrapped and income
taxes be progressively reduced and abolished at the lower end of the income
scale. We demand that major corporations
making super profits (mining and banking are examples) pay a super profits tax;
that a financial transactions tax be introduced; that transfer pricing and
other loopholes allowing corporations to escape liability for taxes on profits
made in Australia be closed; that superannuation, negative gearing and other
loopholes that allow the rich and super-rich individuals to escape their tax
obligations be closed.
Understand
the issues, fight the attacks
We call on all workers and community activists
to challenge the reactionary agenda being developed through the ALRC’s Rights
paper, the Federal Reform White Paper and the White Paper on Taxation in
Australia. These sit alongside Audit
Commission reports, Productivity Commission reports, Competition Policy reviews
as well as papers from peak ruling class bodies like the Business Council of
Australia.
None of these are written to be easily
understood by the people whose lives they affect. But understanding the issues and fighting
these attacks is crucial to our future, and to the rights and liberties of
coming generations.
We must circulate publications like this one
to family and friends, to workmates and colleagues, raise the issues through
our community organisations and unions and never leave the door open for the
ruling class to do as it pleases.
Without our organisation, understanding and
opposition a bleak future of austerity and erosion of rights and freedoms
awaits us.
We are better than what they have in store
for us.
If they want to look at change, then so do
we. But change has two equal and
opposite directions: either to go
forward according to our own independent agenda, or to go backwards according to theirs.
Our agenda is coming into being.
The future belongs to us.
[3]
For the significance of the phrase “clearly and unambiguously” see Australian
Law Reform Commission, Traditional Rights
and Freedoms—Encroachments by Commonwealth Laws (IP 46), Dec 2014.
[4]
Reform of the Federation White Paper: Issues Paper 1 p. 12, Commonwealth of
Australia 2014.
[5]
Transcript of ABC’s 7.30 Report for
May 15, 2014.
[6]
Jonathan Pincus, Examining Horizontal
Fiscal Equalisation in Australia, University of Adelaide School of
Economics Research Paper June 2011.
