The point of a Labor Govt

Paul Keating famously said in 1996, “When you change your Government, you change the country.” John Howard’s Coalition Government sure did that. The question now is whether Labor’s Anthony Albanese can change it again, reversing the worst of the Howard changes which have now have had two decades of making the place worse not better.

With the exception of the National Disability Insurance Scheme, the Rudd-Gillard-Rudd Government failed to change much.

The three huge changes Howard made were in education, health and tax. In a way, they go hand in hand. Unless Prime Minister Anthony Albanese makes headway on reversing these changes as well as dealing with climate, energy, integrity and attitudes to women, it will not be long before voters will ask: what is the point of having a Labor or progressive government, if it does not progress.

In education, a start has already been made. In health the Howard changes have caught up on themselves and the system is unsustainable. Tax is almost intractable and made even worse by the Morrison Government’s unfair Stage Three tax cuts which are skewed vastly in favour of people on high incomes.

Labor is going to have to do some fairly radical things soon with all three if it is to avoid being a one-term government. All three are fundamental to Albanese’s his core promise in the election: to do something about the cost of living.

When you look at the election result, it seems he can afford to take some risks, especially on tax.

Luke Metcalf, of the research company Microburbs, analysed the election results booth by booth and matched it with detailed census statistics.

He concluded, “The big takeout is we’re seeing a continuation of the trend in . . .  where the Coalition’s support base is shifting towards poorer, less skilled, and the less educated people born in Australia.

“Rich, educated professionals swung 11-12% against the Coalition, while the country’s working poor swung only 3-4% against them.”

There is a fair degree of correlation between high education and high income. It seems that people with higher education were turned off by the do-nothing Coalition, especially with climate, integrity and attitude to women.

They were probably also turned off by the absence of an effective response to the stresses on the health system. 

Better-educated people seem to be less afraid of change. Poor, less-educated people have had a gutful of change from the 1980s on. They resent globalisation, privatisation, and high immigration.

Albanese could risk ditching the Stage 3 tax cuts, but only if he delivers on other things.

In the election campaign the Morrison Government did not go back on the 2018 arrangement to cut federal funding to private schools, despite its penchant for handing out public money to buy votes. Education was not a winner for him. And the results prove it.

Indeed, having a university education makes people less likely to vote for the Coalition.

The 2018 education arrangements kick in next year, and the private schools are worried.

The Nine mastheads quoted the principal of one Anglican school facing several million dollars in cuts as saying: “We’ll have to put the fees up. What we’ll end up with is like England. Independent schools will only be available for the very richest people. Then schools really will be elite. They will not be available to the middle classes.”

Good. If the middle classes migrate back to public schools, those schools will be the better for it. The middle classes are better advocates for funding. And Australia’s educational performance would improve and more money would be spent on real education, not swimming pools, arts centres, and chapels at private schools.

Moreover, the cost of living for the middle classes would improve if school fees are removed. Labor should speed up the process. Howard wanted public schools to be just a safety net, not a universal system.

Same with Medicare. And the result is a system straining at the seams. Yes, Medicare still treats catastrophic illness and injury well, but with elective surgery it is falling apart. 

And now the private system is also straining. There is a vicious circle which will need a lot of money to unwind. As Medicare payments to doctors flatline, fewer specialists are willing to work in public hospitals. That puts strain on waiting lists. Long waiting lists for “elective surgery” cause fear. That makes people keep their private health insurance so they can “jump the queue”. Specialists can play on that fear and charge ever higher gaps fees.

Fewer medical students are going in to general practice where competition puts downward pressure on gap fees. Creating further strain.

Substantial increases in Medicare payments to medical practitioners would bring more specialists to public hospitals and reduce queues, increase bulk-billing, and attract more students to general practice. More people could give up their private insurance. Again, reducing cost-of-living expenses.

This should be a much higher priority for a Labor Government than handing out $206 billion in Stage 3 tax cuts over eight years.

Albanese could also remove the tax rebate on private insurance; remove the Medicare surcharge for people on higher incomes; and remove the age penalty – all Howard measures aimed at propping up the inefficient private system and to reducing Medicare to a mere safety net (because you don’t want people dying on the street) rather than a universal health system.

Albanese has a chance to change the country. The election analysis shows that better-educated people are with him. They will be responsive to well-reasoned policy changes. 

Yes, climate and integrity are important and can be done fairly smoothly. But in a way education, health, and tax are more important because the Coalition’s policies have created an unequal two-tiered Australia, and Morrison’s Stage 3 tax cuts will only make it worse. Albanese will only be able to achieve significant things in education, health and fairer tax if he uses the money generated by abandoning the Stage 3 tax cuts.

It will take courage. But it could pay off.

This article first appeared in The Canberra Times and other Australian media on 14 June 2022.