Vol 43 No 3 - Australian Fabian Society

Newsletter of the Australian Fabian Society. Vol 43 No 3, Jul-Sept 2003
ISSN 1448-210X
INSIDE
News
The latest on Fabian Society news and
events, including the secretary ’s column.
Page 2
The future of progressive politics
A new notion of citizenship and democratic participation lies at
the heart of the new politics, argues Matthew Taylor.
Books
Dennis Glover reviews Michael Pusey’s
The Experience of Middle Australia: The
Dark Side of Economic Reform , F r e d
Argy’s Where to From Here: Australian
Egalitarianism Under Threat, and Clive
Hamilton’s Growth Fetish.
Page 3
From the podium
Philip Mendes critiques the neo-liberal
welfare agenda and describes his vision
of progressive welfare reform.
Page 8
UPCOMING EVENT
ALL MEMBERS ARE WELCOME AT
THE ANNUAL GENERAL MEETING
ON 2 SEPTEMBER. SEE PAGE 4
FOR MORE DETAILS.
a r e n a
m a g a z i n e
A u s t r a l i a ’ s leading
le ft, cr iti cal
m a g a z i n e
s u b s c r i p t i o n s / c o n t r i b u t i o n s
A r e n a
po box 18
Carlton North 3054
tel: (03) 9416 5166
fax: (03) 9416 0684
email: m a g a z i n e @ a r e n a . o r g . a u
I believe there is a significant political
divide on the Centre Left, a divide as
significant maybe as the traditional
Left/Right distinction.
This is a distinction that Peter Clark,
the historian, has described as a
distinction between mechanical and
moral reformers, in which social
democrats have traditionally focused
upon mechanical reform, redistribution,
expansion of the capacity of the state
law regulation, while the radical liberal
tradition was more concerned with
moral change. It was concerned with
changing the capacities and attitudes
of citizens’ empowerment, devolution
of power, maximising a sense of moral
agency in society. And I think that
historically those two progressive
traditions have been far too separated
on the British Left.
Now, progressives like myself who
believe that one needs to have a story
of moral as well as mechanical change
are often accused of a variety of things:
of idealism, of obscurity, of self
indulgence, of a willingness to
prioritise what I often call ‘chattering
class issues’ like constitutional reform,
civic renewal, and decentralisation of
power over the real issues of the Left
which are about public spending and
fiscal redistribution.
But I want to argue that the
progressive politics I and the Institute
for Public Policy Research (IPPR) stand
for now has a much harder edge than it
has ever had before and in so doing I
want to address what I see has been a
failing of far too much of our political
d i s c o u r s e .
I think that political programs
should have four elements; two pairs of
twins. The first pairing is an analysis of
the world: what is the world in which
we are seeking to act politically and
how is that world changing? and
secondly, where do we want to take our
society? And the second pairing is about
specific, pragmatic, policy strategies
and finally about the political strategy
we use to win and to hold power.
N o w, far too often because of
electoral competition and the pressures
of day-to-day governance, our
discourse primarily takes place at the
lower of those levels. It’s about
pragmatic policy making, it’s about
political strategy and too rarely is it
about a capacity to analyse the world
and to discuss where our politics
should take us. And I think this is a
sterile divide, the division between
visionaries and practical policy makers.
As Brazilian sociologist Roberto Unger
asked, "How can we be realists without
first being visionaries?"
So let me turn now to my analysis of
the world that leads me to believe that
the progressive vision is no longer
merely idealistic and removed from our
day-to-day concerns.
I want to suggest that society is going
through a process of immense change
Continued on page 5

PAGE 2
NEWS
Australian Fabian News
Jul–Sept 2003
By Race Mathews
National Secretary
Vale Dick McGarvie
Dick McGarvie, who died on 24 May,
was an active and high profile AFS
member in the 1960s. He and his wife
Lesley and their then very young
children were familiar figures at the
s o c i e t y ’s residential conferences in
guest houses such as those at Olinda
and Cowes, and his quintessentially
Fabian approach made him a notable
contributor at the work of policy
committees that the Victorian Branch
of the ALP established around 1964.
The high value he attached to the
development of good policies for the
party was not shared by the Victorian
Executive of the day, and he became a
founder and leading member of the
opposition grouping within the
Victorian branch known as the
Participants, whose efforts paved the
way for the reconstruction of the
branch in 1970, and thereby for the
election of the Whitlam government
two years later.
Following a distinguished career as a
b a r r i s t e r, he served as a Vi c t o r i a n
Supreme Court judge, Chancellor of
La Trobe University and Governor of
Victoria. Approached following his
term as Governor to re-join the society,
he declined on the grounds that it
might detract from his effectiveness in
the debate as to whether and if so in
what form Australia should become a
republic, in which he remained
passionately engaged until the onset of
his final illness. He is a great loss to
public life, and the society extends its
sympathy to Lesley and other family
members who survive him.
AFS events
In his AFS days, Dick would have
revelled in the extraordinary upsurge
of events that the AFS has experienced
in recent weeks, particularly in
Victoria. The national body’s deferred
Autumn Lectures program on ‘ R e a c h i n g
for Sustainability: Environmental
Challenges for Australia in a New
Century’ opened to a near-full house in
the Kaleide Theatre at RMIT University
on Monday 19 May, and the Victorian
branch likewise had a full house on the
Former UK education minister Estelle Morris gave a Special Guest Lecture on ‘The Blair Government and
Education: A Stocktaking and Evaluation from the Inside’ in Melbourne on 22 May. She is pictured here with
AFS national secretary Race Mathews, Victorian ALP president Jim Craven and AFS chairman Gary Jungwirth.
Wednesday of the same week, when
ALP Deputy Leader Jenny Macklin
spoke in the 'Wednesday Night at the
New International Bookshop' program.
S a d l y, there was a much smaller
attendance for the exceptionally
inspirational and informative national
Special Guest Lecture that former UK
education minister Estelle Morris
delivered on the Thursday night.
S u b s e q u e n t l y, there have been two
further nights of lectures in the
Autumn series, a further NIB series
address by Professor Graham Hodge on
evaluating privatisations and the
national tax conference on ‘Investing
in Ourselves: Fair and Effective
Taxation for an Enterprising Australia’.
Longstanding AFS members doubt if
there has ever before been an instance of
so many society activities being undertaken
within so short a space of time.
Major events still to come this year
include a workplace relations conference,
a conference on social democracy
keynoted by UK Fabian Society
secretary Michael Jacobs (who will be
having a three month stay in
Melbourne with his family towards the
end of the year), a planned ‘Reformists,
Rebels and Revolutionaries’ fun
night/fundraiser concert and singalong
with the Williamstown Women’s Choir
and the annual Remembrance Day
Dinner which last year had Simon
Crean as its guest of honour.
Publications
A similarly busy time with publishing
is likewise coming up. AFS/A re n a
Magazine Blue Book number 5 – Jim
Jupp’s There Has to Be a Better Way: A
L o n g - t e rm Refugees Policy – is being
mailed out with this issue of Australian
Fabian News; the text of Blue Book 6 on
global governance by Joe Camilleri is
already in hand and a preliminary draft
for number 7 on evaluating privatisations
has been submitted by Professor
Graham Hodge of the Law School at
Monash University.
In addition, Labor Essays e d i t o r
Glenn Patmore reports that this year’s
volume on citizenship and civil society
is already well advanced, with all the
contributions commissioned and texts
from two of them in hand.
Website
Thanks as always to Matt Lovering, the
AFS website has had another of its
regular updates. Among other things,
pdf files of the first three Blue Books are
now available as a free download from
the publications page within the site,
and members are invited to forward
copies as widely as possible to
interested friends and associates who
may be encouraged to join the society
and support the further extension of its
work. A proposed radical upgrading of
the website is currently under
consideration, and the society, may
well be able to shortly introduce
significant elements of interactivity to
the static menu currently on offer.
Membership
Five months into 2003, paid-up
membership has already passed 520,
which is a good 100 better than at this
time in 2002, but barely half-way to
the 1000 target for the year nominated
by the society in its recently adopted
strategic plan. The key to reaching and
perhaps surpassing that target lies in
Continued on page 4
www.fabian.org.au

Australian Fabian News
Jul–Sept 2003
New arguments,
old choices
Michael Pusey, The Experience of Middle
Australia: The Dark Side of Economic
Reform, Cambridge University Press.
Fred Argy, Where to from here? Australian
Egalitarianism Under Threat, Allen and
Unwin.
Clive Hamilton, Growth Fetish, Allen and
Unwin.
DENNIS GLOVER REVIEWER
The books being reviewed here
provide three alternative answers to the
question that is gnawing away at the
minds of millions of Australians: if the
c o u n t ry as a whole is getting richer, why
a r e n ’t our lives easier, better, more fulfilled?
Each answers that question from a
distinctly different part of the spectrum
of contemporary centre-left thought.
Michael Pusey’s
Experience of
Middle Australia
is an analysis o f
the responses to
contemporary
political and
social change
of 400
participants in
focus groups
drawn from
‘middle Australia’
– defined by
Pusey as people
earning roughly between $36,500 and
$57,500 per year.
Pusey has come under (sometimes
drearily predictable) attack for the
quality of his economic understanding
and sociological methodology. Some of
it is questionable, and it is clear that he
sometimes lets his ideological preferences
get the better of his data, but you don’t
need to be a Nobel laureate to gauge
the mood of a room of angry people.
To anyone with access to party
polling data or who puts on their boots
to travel Australia and talk to real
people about politics, Pusey’s
descriptions of the mood of Australians
ring true. And his arguments help
explain something that political
insiders have been seeing for many
years – the strong desire of large
sections of the electorate to vent their
anger on the political class they hold
responsible for destroying their way of
life. If Pusey is right, the Australian
people were looking to take a baseball
bat to the Howard Government right
up until the Tampa arrived in August
BOOKS
2001 and caused them to momentarily
take their eyes off the ball.
Pusey is angry and passionate about
what he sees as the betrayal of middle
Australia by the drivers of the ideology
of ‘economic rationalism’. His findings
are that middle Australia intensely
dislikes the economic and political
direction of the country. Only a
minority believe that society as a whole
is benefiting. They are upset that the
gap between rich and poor is widening,
and that big business and powerful
elites appear to be benefiting at the
expense of working people.
Middle Australia, Pusey argues, wants
more spending on public health and
education, and industrial relations
changes that will tilt the balance back
towards unions and workers. They feel
exhausted and overwhelmed by the
intensifying of their working lives, and
powerless to do anything about it. And
they are angry that the burden of
paying for social needs like health and
education is being taken off
government and placed on the
shoulders of ordinary Australians.
Economic rationalism, Pusey argues,
has failed in its aim of destroying the
collective social memory of Australia as
an egalitarian place. As Lindy Edwards
also claimed in her book, How to Argue
with an Economist (which I reviewed on
these pages recently), egalitarianism is
deeply embedded in Australian culture
and cannot be easily removed. Pusey’s
political message is clear: the
Australian people want a reversal of our
n a t i o n ’s direction – away from economic
rationalism and towards egalitarianism.
It’s a political wave that our politicians
h a v e n ’t yet
been able to
catch.
Fred Argy has
a similar desire
to save our
egalitarian way
of life, but
unlike Pusey, he
has no longing
for a return to
the days before
the economic
reform of the
1980s and
1990s. In Where
To From Here? Argy disputes Pusey’s
claim that opposition to economic
reform is growing, pointing out that
people are in fact becoming used to
economic ideas, are learning to live in
a more entrepreneurial society and that
this acceptance will continue to
increase over time.
PAGE 3
Argy sees no contradiction between
supporting growth-oriented economic
reform and creating a fairer country.
Economic reform, he believes, can
create more wealth for us to share
around. But he does believe that since
1996 economic reform has been taken
to extremes by an ideologically
motivated group of ‘hard liberals’ who
believe that greater inequality is
desirable in itself and that equality
inhibits individual choice and economic
growth. These claims are rejected by
Argy, who argues that within certain
bounds, egalitarian social policies can
in fact significantly l i f teconomic growth.
He gives the example of The Netherlands
– which combines a comparatively
high rate of taxation and social
spending with strong economic
performance – to prove that we do not
have to choose between egalitarianism
and economic growth. We can have both.
As a result of the ascendancy of the
‘hard liberals’ in the Howard
Government, Argy believes Australia is
increasingly being polarised along
social, economic and geographical
lines. In this he and Pusey are in
furious agreement. While Argy is not
against further economic reform – and
is even willing to countenance more
reform to reduce welfare dependency –
he believes that Australian economic
reform must be seen in its proper
perspective. We are already by
international measures a highly
reformed and ‘lean’ economy, with
comparatively low levels of taxation
and spending. It’s time, he believes, to
consider sensible changes to economic
policy that will put more emphasis on
social spending and overcome the
obsession of politicians and
economists with falling levels of debt
and budget surpluses. It’s time for the
nation to invest, but not to go back to
the earlier vision of the ‘Australian
settlement’ favoured by Pusey.
Argy unfortunately has the academic
policy maker’s habit of cluttering his
narrative with too many facts and
references and re-statements of his
argument. Reading him at times is like
riding on a train that stops again after
every station and shunts backwards to
pick up any passengers it might have
missed. His style also leads him to pull
his punches against the Howard
Government, when sometimes the
knock out is eagerly anticipated. This
holds back his prose and at times buries
his very real passion for egalitarian
Australian values in layers of
policymakers’ jargon. It makes for slow
www.fabian.org.au

PAGE 4
Continued from page 3
going, but it does have the benefit of
not missing anything out, and students
and policy
makers will find
it a very useful
reference tool to
have on their
d e s k .
I r o n i c a l , l Clive y
Hamilton – easily
the most leftwing
critic o f
economic
rationalism of
the three authors
discussed here – is
also the least
concerned about social and economic
i n e q u a l i t . y H a m i l t o n ’s opposition to
economic rationalism is predicated on
an opposition to both economics and
rationalism per se. He wants Australians
to opt out of the economic rat race
altogether. Growth he argues, does not
lead automatically to more equality or
happiness. Instead, it turns citizens
into crass and narrow consumers,
denies us the fulfilment of our human
potential and pillages our environment.
It’s an argument that owes a lot to
the early Karl Marx of the P a r i s
M a n u s c r i p t s and the C o m m u n i s t
Manifesto, and at times Hamilton can
sound like a prophet of revolution. For
instance, he writes: "in a post-growth
s o c i e t y, class divisions based on
differences in wealth and the ability to
generate wealth will melt away. In this
sense, the post-growth society will for
the first time create the possibility of a
classless society". Unlike Pusey and
A r g y, Hamilton is not arguing for
reform but peaceful, long-term, social
re v o l u t i o n. Hamilton is not a
mainstream social democrat like Pusey
and Argy, but a theorist of the
contemporary social movements, like
the Australian Greens and Stott-
FREE THINKERS/NEWS
Despoja-style Democrats. He disparages
contemporary social democratic parties
and is particularly scathing about the
‘third way’, which he believes is simply
a Trojan horse that has allowed neo
liberalism to enter the citadel of
reformist politics.
If Hamilton sounds like the young
Marx, it’s because, like Marx during the
1840s, he sees contemporary society at
a point of potential transition – from a
virulent form of consumer capitalism
to a new form of society that replaces
consumerism with what he calls
"eudemonism": a form of society that
rejects growth, practises "ecological
economics" and provides "a social
environment in which people can
pursue true individuality, rather than
the pseudo-individuality that is now
obtained through spending on brand
names and manufactured lifestyles".
His solution is for parties to adopt
"political downshifting" – policies that
"promote the quality of social and
individual life rather than surrendering
to the demands of the market". He
wants hours of work cut: more spent
on public education, especially courses
that foster a more philosophical social
outlook; international taxes on capital
movements; restrictions on marketing
and advertising; and ecodesign
principles built into everything we
create and do. Most importantly, he
wants a "post-growth economy", by
which he means one that constantly
evolves in a more ecologically
sustainable, human and redistributive
direction, but at zero levels of
economic growth.
These three books, while containing
fresh new arguments, provide the
Australian Centre-Left with choices
that are not new. They’re the choices
between populism, technocracy and
belief. They’re choices that are as old as
politics itself, and no strangers to a
Labor Party that in a single generation
Australian Fabian News
Jul–Sept 2003
could produce a Uren, a Whitlam and a
Cairns. The challenge for Fabians and
Labor is to respond positively to the
mood of discontent identified in books
such as these to give the Australian
people hope that we can come up with
a visionary but practical alternative to
the increasingly ideological and
extremist economic rationalist
obsessions of the Howard–Costello
Liberal Party. There is potentially
something practical in each of these
books for us to borrow.
Dennis Glover is a former editor of L a b o r
E s s a y sand is speechwriter to Simon Cre a n .
Continued from page 2
both having current members who
have not already paid their
subscriptions do so as soon as possible,
and attracting new members by the
best of all recruiting mechanisms –
word of mouth.
In the course of the society’s recent
surge of events, more than 1000
sample copies of Australian Fabian News
have been distributed, and in many
cases it should not take more than a
word or two of encouragement for the
membership application forms
enclosed with them to be returned.
Email addresses
Bounced back issues of AFS Update
continue to be a problem, and
members who are not receiving their
copies – weekly on Mondays in the case
of Victorian members, and nationally
on the first Monday in every month –
should send a message reading ‘Email
address for AFS Update’ to
race@netspace.net.au.
Annual General Meeting
The AGM will be held on Tuesday 2
September 2003, from 6.30 to 8pm at
the New International Bookshop
Centre, Trades Hall, corner Victoria and
Lygon Streets, Melbourne. All members
of the society are welcome to attend.
Subscription rates
Notice is given of a motion that
subscriptions for 2004 should be
Standard: $60, Household (two
members at the same address): $70,
Concession (students and Social Security
payment recipients): $30, Supporting
Body Subscribers: $250, Patron
Subscribers: $500.
Race Mathews,
National Secretar y
www.fabian.org.au

Australian Fabian News
Jul–Sept 2003
Continued from page 1
and that change is felt in the
consciousness of our citizens and in
our civic culture. This process could
adumbrate a better world, but I think
in relation to the changes that I am
about to describe, we are going
through a very difficult phase. We can
see where we want to get to but at the
same time we’re stuck in a very difficult
point of transition. The shift as a whole
can be seen in some way in almost all
developed societies.
We have a population now, which is
less deferential, is less driven by
tradition in its behaviours and its
norms and is much less respectful of
various forms of authority. There was a
Gallop survey undertaken at the end of
last year, which looked at 47,000
citizens in 36 countries and it asked
people to rate 20 institutions in those
societies and, in every society the
institution with the lowest rating was
the primary democratic institution, the
Parliament. Even more worrying was
the two most popular institutions in all
those countries: the armed forces and
environmental NGOs.
Now something is happening here to
the consciousness of our people and it
i s n ’t simply that they are fleeing
a u t h o r i t y. It is also that they are
vulnerable to populist authority,
authoritarian and subversive authority
– but they are hostile to the old forms
of collective decision making, the old
forms of politics in particular.
I believe in a future in which our
citizens have a sense of moral agency:
they determine for themselves a sense
of how they should be governed,
however, as yet they seem unable to
govern themselves.
The second shift is a process of social
differentiation, which is taking place
across all our countries. We have
moved away from societies where most
people only knew people like
themselves and knew very little about
people who were different to
themselves. This is not just about
ethnic diversity but it’s also about
diversity of family form, diversity of
value, diversity of lifestyles.
I think the processes of social
differentiation are being accelerated.
And the sociologist Robert Putnam is
clear that diversity and social capital
are inimicable – that is to say the
greater the diversity the harder it is to
achieve social capital.
Now the point, of course, about this
as Putnam himself says, it’s not that we
FREE THINKERS PAGE 5
should turn away from diversity, but
that we have to recognise the
challenges of social differentiation in
terms of our politics.
The third shift is the emergence of
the politics of life quality. I think
citizens are making ever more complex
demands of those who govern them
and this is partly about the fact that we
now have a politics of environment, of
public space, of art, of culture, of
i d e n t i t y, but there is also strong
evidence now that people are living in
what’s called an affluence plateau. The
evidence says that societies like
Australia or Britain stopped getting
happier as they got richer some time ago.
So we have a society where most
people do not need, and yet there are
growing levels of alcohol, drug and
gambling abuse. We see family
breakdown, a decline in childbirth, a
rise in mental illness; we see all sorts of
characteristics of a people who have
The pursuit of citizenship
is no longer an abstract
idealistic goal, it’s an
urgent need if we’re to
face successfully the
challenges I’ve described
the tools to live the good life but no
idea of what that good life is. And that
poses huge challenges to government.
What are the things that made people
happy? It’s a very different sort of
question for governments.
So what are the implications of those
shifts? We have a citizenry that is
making demands upon the state and
upon politicians which are very hard to
meet. There is strong evidence to
support the contention that the public
simultaneously wants stronger leadership
and yet more responsiveness, more
accountability yet more flexibility,
evidence of fairness in all decisions yet
a state that can respond to diversity
and polarity.
And so the citizens set us a task that
we can meet only in two processes: one
is by bringing them in so that they take
ownership of the dilemmas and the
problems that we face in trying to
govern society effectively, and
s e c o n d l y, we transform the way in
which we do the business of running
the state and doing politics.
I want to argue that at the heart of
our new politics is citizenship. In the
face of the dilemmas and the pressures
that I’ve described, we need to reassert
the notion of universal citizenship in
the good society. Now, citizenship is a
concept that implies rights and
entitlements, but it involves two
elements, the first of which is the idea
of agency: that all our citizens have a
sense of agency, of moral autonomy
e x e rcised both through individual
action and collective action.
Secondly, there is the notion of civic
obligation. This is an account of how
we equip our people to fulfil
themselves as social agents and an
account of how we as a society can live
t o g e t h e r, act together and grow
together. And my argument is that
pursuit of citizenship is no longer an
abstract idealistic goal, it’s an urgent
need if we’re to face successfully the
challenges that I’ve described.
Now what does asserting the goal of
universal citizenship in the good
society mean for our politics? I think
we have to change the order of our
political argument and say that rather
than social equality being the goal of
our politics, citizenship is the goal of
our politics, and social equality is the
means to that end.
So I think that reinstating citizenship
as our goal leads us to develop new
strategies for equality. But I also think
it provokes very difficult questions
about the way in which we do politics
itself. It drives us to develop what Eric
Raymond called Tr a n s f o r m a t i v e
Democratic Strategies. It requires us to
understand the fundamental and
systemic problems of politics. Let me
describe what I think two or three of
those problems are.
The first is what happens when
politics becomes removed from
ideology but is not replaced by a vivid
account of values, and becomes
primarily about a tactical process of
www.fabian.org.au

Australian Fabian News
Jul–Sept 2003
Continued from page 5
maximising market share. And in those
c i rcumstances you get what Robert
Reich has called the hotdog stand
problem, and it is simply this: if you
have a mile-long promenade and you
want to set up a hotdog stand and
maximise market share, where do you
put the hotdog stand? The answer is
quite simple: you put it in the middle,
which is functional for the vendor and
the citizen. The difficulty is this: where
do you put the second hotdog stand?
And economic theory will tell you
that you put the second hotdog stand
right next to the first, which is
functional economically, but is
dysfunctional in terms of what citizens
want. Citizens want 20 hotdog stands
and, by the way, they want someone to
sell veggie burgers and kebabs and all
sorts of other things, but they are faced
all too often in systems dominated by
Melbourne’s radical
bookshop, New
International Books,
features an art
galler y, a cafe,
a meeting room
for hire and an
array of books on
politics, economics,
marxism, feminism,
the environment
and other social
issues.
Open from 9 to 6.30 Mon to Fri and
11 am to 5pm on Saturday.
FREE THINKERS PAGE 6
two parties and particular electoral
systems by two hotdog stands
crammed together selling exactly the
same goods, but possibly putting the
mustard and tomato sauce in slightly
different places on the counter.
The second problem, which is really
a way of leaping into the third
problem, is to do with parties. Political
parties are in decline in most countries.
But the difficulty is this: as political
parties decline, their control over the
political system does not decline at all,
their control over entry to, and
progression within, the political system
remains on track, so that like a
withering hand, it squeezes harder and
harder upon the capacity of our
democracy to breathe.
And that takes me into the third and
possibly the most profound structural
problem of our political system: that
politicians put winning above the
health of the system as a whole. And
any system in which all the people in it
care more about winning than the
health of the system is a vulnerable
system, one that finds it hard to
change and respond to challenging
circumstances.
So, what might be the characteristics
of the new type of politics, not just the
new policies, but also the new politics?
The first is that we must develop new
forms of democratic engagement, of
citizen engagement in political decisionmaking,
in the decentralisation of
power, and we have to do it in as many
places as we possibly can. And we, our
Pro s p e c t
B r i t a i ’s nleading political and
c u l t u ral monthly — p a cked
with good writing about
the things that mat t e r.
progressive politicians and progressive
activists, need to be engaged in those
places. We need to stop believing that
our politics is simply expressed
through party meetings and party
caucus and parliaments. We have to
recognise the vibrancy of community
organisations, we need to draw from
the experience of participative
budgeting. We have to drive a
renaissance in our democratic practice,
create 100 different ways in which our
citizens can get involved, can feel a
sense of ownership and commitment
to decision making.
But none of these things will work
unless politicians understand from the
outset that they need to be willing to
let people make decisions, even when
it limits the power of the traditional
hierarchy. We need experimentation in
forms of engagement, involvement a n d
decision-making and decentralisation.
I think the new progressive politics is
about changing our goals around the
assertion of citizenship as the ultimate
objective of progressive politics. It’s
about mobilising all the capacity we
have as a state in order not simply to
provide services but to create public
value, to contribute to civic renewal
and the renewal of the relationship
between state and citizen. It is about
transforming the way our politics works.
Matthew Taylor is the director of the
Institute for Public Policy Research (UK). This
is an edited version of a speech he delivered
on 26 March 2003 at Parliament H o u s e ,
Canberra, for the Chifley Research Centre.
Matthew Taylor also spoke for the AFS at
a meeting in Melbourne on 25 March.
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John Thwaites, Deputy Premier of Victoria and
Minister for the Environment and Water, opened the
first session in the Autumn Lecture series, ‘Reaching
for Sustainability: Environmental Challenges for
Australia in a New Century’ in Melbourne on 19 May.

Australian Fabian News
Jul–Sept 2003
PAGE 7
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necessarily endorsed by the Australian
Fabian Society.
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PAGE 8
When I first started researching
my PhD on the Australian
Council Of Social Service (ACOSS) in
1992, I was amazed at the influence of
what I considered to be fanatical and
extreme neo-liberal ideas on the
Australian welfare debate.
In the decade since, that influence
has become even greater, particularly
since the election of the Howard
Government in 1996. But what we are
dealing with here is not only a
national, but an international
phenomenon whereby ideas about
retrenching and cutting welfare have
become accepted as the common-sense
approach. In the words of Margaret
Thatcher, there is no alternative.
There seems to be three main strands
to this argument:
Individualistic and behavioural
explanations of poverty: blame the poor
That poor and disadvantaged people
are fundamentally different to the rest
of the community. Dependence on
welfare is interpreted as an addiction
not dissimilar to that of helpless
dependence on drugs and alcohol or
gambling. Poor people are depicted as
having particular behavioural characteristics
– incompetence, immorality, laziness –
that make them poor.
Yet, various studies locally and
overseas have demonstrated that most
welfare recipients do not stay on
welfare permanently, that most
children of recipients do not use
welfare programs, and that most
recipients hold the same values as
people in the workforce regarding
independence and the work ethic.
This evidence would suggest their
disadvantage can be primarily attributed
to unfair structures that create and
entrench social and economic inequities,
rather than to individual characteristics.
Economic competitiveness
That neo-liberal policies provide the
road to economic growth and
economic competitiveness within the
global economy. According to this
argument, welfare states today face a
fundamental trade-off between
employment growth and efficiency on
the one hand, and egalitarian social
FROM THE PODIUM
Deconstructing the neo-liberal
welfare agenda
Democratic partnerships between community providers and
consumer groups should be at the core of progressive welfare
reform in Australia, argues Philip Mendes.
protection on the other.
Neo-liberals argue that we should
follow the low wage, low social
spending, and low taxation model
favoured by the US if we want to
reduce unemployment and promote
economic growth. Social protection
should be provided largely through the
labour market, and only a minimal
safety net offered for those outside the
workforce.
Yet a number of European countries
including Holland, Denmark, Austria,
Portugal and Sweden have far higher
levels of spending and taxation than
the US, yet attain similar if not superior
outcomes in employment. And they do
this without the severe levels of p o v e r t y
and inequality present in the US.
Economic globalisation
The past decade has witnessed a period
of intense economic globalisation. Neoliberals
argue that the growing
significance of international trade,
investment, production and financial
flows is curtailing the autonomy of
individual nation states.
In short, economic globalisation
precludes social democratic alternatives
because international financial markets,
transnational companies and credit
rating agencies will destroy economies
based on higher government spending.
However, the evidence suggests that
while globalisation is impacting
negatively on welfare states, the impact
varies from country to country, and in
turn is mediated by specific national
factors. In short, we retain p o l i t i c a l
c h o i c e s as to whether we focus on
individual or collective/community
responses to poverty and disadvantage.
Alternatives
It is easy to say that neo-liberalism
doesn’t work, and that it will only
produce greater income inequality.
However, it is harder to identify real
alternatives. Traditionally the welfare
sector has been good at identifying the
shortcomings of the existing system, but
not so good at creating alternative visions.
I will sketch a few broad principles
that I think would underpin a more
progressive welfare system:
1. The provision of income security
Australian Fabian News
Jul–Sept 2003
payments should be based on need,
rather than employment status. We
should be arguing for a participation
income by which e v e ry citizen is
guaranteed a basic income above the
poverty line.
2. Local communities should deliver
welfare services. There would be an
emphasis on genuine consumer
participation in, and control, of the
planning and delivery of services with
the potential in the longer-term for
transforming welfare programs into
user-controlled cooperatives.
3. Groups of welfare consumers need to
be empowered to participate in welfare
policy and service provision debates
and processes. This would mean
forming diverse coalitions of welfare
consumers based on commonalities of
g e n d e r, ethnicity, age, disability,
A b o r i g i n a l i t , yand so on.
In summary, progressive welfare
reform would aim to replace the
existing paternalistic structures with
democratic partnerships between
community providers and consumer
groups at the local level, based on
consumer, rather than government or
service provider needs and control.
Dr Philip Mendes is senior lecturer in
Social Policy & Community Development
in the Department of Social Work at Monash
University, and the author of Australia’s
Welfare Wa r s (UNSW Press, 2003).
Email: Philip.Mendes@med.monash.edu.au.
This is an edited version of an address
given to the Uniting Care Community
Options Social Policy Breakfast in March.
www.fabian.org.au