Australian Futures: Can More Co-Operation Be Achieved Between Progressives Here?

The AIM Network

1 year ago

By Denis Bright

In the absence of a stronger leftwing tradition in Australian politics, a loose coalition between the Labor, the Greens and a range of progressive independents may still be possible on economic policy. As in the recent National Assembly Elections in France, co-operation within the New Popular Front delivered a surprise result. This was no absolute majority for the French Left. The political game plan ended the threat from Jordan Bardella emerging as French Prime Minister on a National Front (RN) challenge.

The results of the first and second rounds of the French elections were as alike as chalk and cheese. This suggests that the hasty game plan worked wonders on the second-round results.

Difficult negotiating between the Popular Front and Macron’s France En March Bloc should achieve a working majority for a new French government as in the initial post-1945 years during the transition to the Fourth Republic after the Nazi occupation (1940-44). In those far-off days, the French left was much stronger from the challenges of the Resistance years. The Communist Party formed the largest bloc in the National Assembly but still well short of an absolute majority. The Popular Front Government of Leon Blum in 1936 faced a similar problem.

Politico-Poll of the Polls has projected the state of the political parties in the new French National Assembly:

Here in Australia, the federal LNP forged a strong Blue Coalition (1949-72) by harvesting votes from centre-right parties for an entire generation until Gough Whitlam became Prime Minister.

In Australia, Jim Chalmers correctly identifies storm clouds in the global economy. A threatening neoliberal challenge comes from Peter Dutton of the LNP with the traditional support of preferences from minor far-right parties. Economic nationalism severely hurts prospects for the Australian economy as China is our major trading partner as noted by DFAT in a recent statement:

China is Australia’s largest two-way trading partner, accounting for 27 per cent of our goods and services trade with the world in 2023. Two-way trade with China increased 9.2 per cent in 2023, totalling $326.9 billion.

Increased engagement between Australia and China has led to positive developments in the trade relationship, including the removal of many Chinese trade impediments that had affected Australian exports since 2020.

The continued reduced investment profile of China in the global economy should be a bipartisan concern. It was indeed the LNP which negotiated our successful free-trade agreement with China: (DFAT Statement):

The China–Australia Free Trade Agreement (ChAFTA) entered into force on 20 December 2015. ChAFTA is an historic agreement that is delivering enormous benefits to Australia, enhancing our competitive position in the Chinese market, boosting economic growth and creating jobs. Businesses have taken advantage of lower tariffs under the agreement, with a utilisation rate of over 90 per cent in both directions. Australia and China are also both parties to the Regional Comprehensive Economic Partnership Agreement (RCEP).

Australia’s foreign investment review framework is open, transparent and non-discriminatory. Chinese investment in Australia is a highly valued part of the bilateral relationship. China is the fifth-largest foreign direct investor in Australia (investment stock worth $46,6 billion in 2023), accounting for 4.0 per cent of total foreign direct investment (FDI). In recent years, Chinese investment has broadened from mining to other sectors including infrastructure and healthcare. Australian FDI in China totalled $2.2 billion in 2023.

In the absence of stronger consensus-building between the progressive parties and independents in both houses of parliament, the Labor Government has been unable to forge a greater commitment to national sovereignty on the crucial areas of strategic policy and the continued hegemony of neoliberal economic in the financial systems of most developed countries.

KPMG issued a report to deconstruct Chinese investment in Australia and the extent of its decline.

The latest World Investment Report 2024 from UN Trade and Development (UNCTAD) in Geneva also shows the storm clouds in the future directions of the global economy:

Global foreign direct investment (FDI) fell by 2% to $1.3 trillion in 2023 amid an economic slowdown and rising geopolitical tensions, according to the World Investment Report 2024.

Readers can play around with the interactive graphs from UNCTAD which are still only current to 2022. The graphs show the drying up of global investment inflows (FDI Inflows) in favour of more speculative capital flows:

Foreign Investment Inflows to 2022

The KPMG Report offers more details on the alarming trendlines in Chinese investment in Australia:

Foreign investment is only part of the picture of capital flows into Australia which also cover portfolio investment in stocks, bonds, financing of loans and movement in foreign currency reserves. Capital inflows into Australia were running at quite extraordinary levels in the year to the March Quarter of 2024 as shown by recent ABS data:

Australian Capital Inflows to the March Quarter 2024

As a learning exercise for myself, I hope to attend the UQ Business Faculty Alumni Roundtable Luncheon on trends in Global Capital Flows in Brisbane on 2 August 2024. Readers at AIM Network will be kept informed of my own changing perceptions on the above-mentioned financial storm clouds on the global horizons.

The mainstream problem is surely the extent to which Australians are locked into a neoliberal world order under the shadows of a robust and more assertive corporate military industrial complexes of Britain and the USA within the US Global Alliance.

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Denis Bright (pictured) is a financial member of the Media, Entertainment and Arts Alliance (MEAA). Denis is committed to consensus-building in these difficult times. Your feedback from readers advances the cause of citizens’ journalism. Full names are not required when making comments. However, a valid email must be submitted if you decide to hit the Replies Button.