||Year End 2004|
Interview: The King of Comedy
Unions: Ten Simple Rules
Politics: Rampant Indivdualism
International: Global Struggle
Economics: Cashing in the Year
History: Grass Roots
Review: Cultural Realities
The Locker Room
Beyond The Law
The Price Of Tea In China
Cry For Me, Argentina
Ho Bloody Ho
Right Is Wrong
Business As Usual
All In The Family
Swing Left Wishful Thinking
There are many with clear hindsight, in the aftermath of Labor's defeat in the October 9 federal election.
Australia's main construction union, the CFMEU, has refrained from participating in this debate. However, as a union which made a major contribution to Labor's election fund and the union with most to lose from a Liberal victory, it is perhaps time to make our views heard.
Beyond the commonly recognized reasons for Labor's defeat on October 9, there is the bigger question of the Party's poor and declining primary vote and the manifest problem of winning votes in outer suburban seats in Sydney, Brisbane and Melbourne etc.
One explanation for this is the growing individualism, first made popular by Reagan and Thatcher in the 1980s, which now finds fulsome expression in the Howard Coalition Government's policies in Australia in 2004.
This kind of individualism -- recently described by Mark Latham as 'self-reliance' and 'self-improvement' -- sees workers focused on competing with other workers, outsmarting the tax-man and striving to out-manoeuvre bureaucrats and government agencies they fear will burden them with regulation.
This idealized worker of the Ayn Rand school of social engineering views most of civil society's institutions as an impediment to self-progress.
Such people are familiar to us in the building industry: nearly 50% of Australia's manual construction workers are nominally sub-contractors of one kind or another.
A clear majority of these are forced to work under notional sub-contract arrangements, while employees at law. However, it's evident that some construction workers seek to work under individual sub-contract arrangements. The driver is the tax advantages available, compared to those under an employment relationship.
It is estimated that about one million Australians are now self-employed workers. Politicians generally, and Labor in particular, have to squarely face this issue, precisely because most of these 'contractors' are workers -- that is, they sell their manual and/or intellectual labour for the best price they can get.
Added to this burgeoning army of self-employed workers, is the (sometimes overlapping) army of worker-investors who play the negative gearing game with property and/or shares. Again the primary stimulus is tax advantage, encouraged by a deregulated financial sector capitalizing on a get-rich-quick mentality.
Many of these worker-investors directed their vote away from the ALP on October 9, because they were worried that their ability to service second and third mortgages (or investment loans) would be damaged by possible interest rate rises under a Labor federal government.
Statisticians number this crowd of tax-savvy individuals at nearly two million Australians. The majority are workers. Many are CFMEU members, or members of other unions, and many would have been rusted on ALP voters not so long ago.
The question is how the Labor movement deals with these tangible manifestations of individualism, championed successfully by the Liberals and their ideological friends in big business and the media.
Two answers suggest themselves.
1. We should not assume these tax-driven structures are intrinsic to the Australian economy or society. In fact, they are only as permanent as policy makers and civil society will tolerate.
2. We should not assume that the modern economy's 'new' workforce is off-limits to trade unions. The TWU, CFMEU and LHMU have organised self-employed workers for decades. Recent successful disputes at Foxtel and among roof tillers in Perth show these workers are not at all opposed to unionism and collective solutions.
Already, the greatest policy challenge for the ALP (and indeed the Coalition) is to maintain a fair taxation system -- particularly one that retains the basic integrity of treating workers equally, when growing numbers are opting out of conventional tax arrangements.
With a diminishing direct taxation base, something is going to have to give.
The Ralph Review of Business Taxation stated that clearly in 1999: "these practices (alienation of personal services income by the notional self-employed) raise significant issues of equity and pose a growing threat to the income tax base".
Will Australians have to re-adjust their expectations about what services governments will fund? Will indirect taxes (the GST) be the new revenue salvation? How will governments deal with public disquiet over the manifest inequities and distortions in the tax system?
To present the worker-entrepreneurs with the bad news in the short term would be political dynamite for either of the major political parties; but the challenge cannot be pushed away indefinitely.
The issue is the greater for the ALP, because these are former Labor voters. In searching for solutions, the ALP would do well to remember that trade unions can be a valuable ally in providing collective solutions and responses for people who are, and will remain, workers.
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