Higher Taxes: That Old Chestnut?

Them old chestnuts? (CC0)

The article below appeared on The Spectator's Flat White on 4th September 2022 at https://www.spectator.com.au/2022/09/higher-taxes-that-old-chestnut/.
Why was I not surprised when Ross Garnaut started touting higher taxes for the mining industry to solve our current cost of living crisis? Labor's economic playbook is as outdated as its corporatist model is lacking critical mass in union membership.

What I am surprised about is that while the Australian Financial Review and The Australian have reported on it, ABC News and The Guardian seem to have missed that old chestnut completely.

Corporatism, as practised by the Hawke government beginning in 1983, represented the three major players in the economy: government, business, and labour. But back then, union membership was more than half of the workforce so a much larger portion of workers were represented in Hawke's tripartite consensus arrangements.

The Prices and Incomes Accords between the ACTU and the government and big business' representation via the Business Council of Australia on the Economic Planning Advisory Council provided the respective forums for consensus-building.

This power-sharing arrangement provided a relatively stable economy as Australia embarked on the privatisation of major government business enterprises like the Commonwealth Bank and Qantas while floating the dollar, reducing barriers to international competition, and introducing competitive markets and enterprise bargaining.

Enterprise bargaining meant that large companies negotiated with their own workers, rather than being subjected to pattern bargaining that gave the unions a stranglehold on the labour market. 

When combined with closed shops, the earlier union-dominated model meant that as a 15-year-old earning $30 per week, I had to pay upfront union fees of $90. I never saw my first three pay packets. I never saw a union rep, either. Apparently, I was to be grateful for the $3.68 per hour my $90 provided me. (The wage after union fees worked out to $3.45 per hour.)

So the Albanese government's first attempt to address the upward spiral of living costs is to set up a union-dominated talk-fest that wheels out Garnaut to tout the old higher taxes for mining companies chestnut. I am not impressed.

How about increasing the rate of the GST and broadening its base? How about looking to market-based solutions to address the upgrade of the electricity network rather than bringing back the tired old cost recovery model for the "Rewiring the Nation" program? (It didn't work for the NBN and it won't work this time, either.) 

If anything, taking on the miners might see the wheels fall off this Labor government as it did Labor governments past. 

Following the Global Financial Crisis, Kevin Rudd triumphantly declared that "the great neoliberal experiment of the last 30 years has failed". Unsurprisingly, the mining industry brought Australia back from the edge of that insanity.

In the meantime, the cost of living is rising and Labor has nothing but the solutions to problems faced by the Hawke Government in 1983. This can't end well for Labor once the post-election honeymoon period is over.

Policies based on classical liberal ideas transformed the global economy and brought about three decades of prosperity for Australians under both Labor and Coalition governments. 

What we need right now are new policy ideas, not the Labor Left's old chestnuts.