By Denis Hay

Description: U.S. Influence

Explore how U.S influence and military interests keep neoliberal policies in Australia, and what Australians can do to push for social justice and sovereignty.

U.S. Influence Shapes Neoliberalism in Australia: Corporate, Political, and Military Control

Neoliberal ideology has held a firm grip on Australian politics for decades, affecting everything from healthcare to education, employment, and the environment. However, it’s not just domestic forces that support these policies. The United States, through its corporate interests, military-industrial complex, and global influence, plays a significant role in keeping Australia aligned with neoliberalism.

This article explores the profound influence that the U.S. has on Australia’s political landscape, why both major political parties continue to support neoliberal policies, and what Australians can do to push for change.

1. Historical Overview of Neoliberalism in Australia

Neoliberalism became entrenched in Australia in the 1980s, much like in the United States under Ronald Reagan. Successive Australian governments, both Labor and Liberal, adopted neoliberal principles of deregulation, privatization, and a reduction in government spending on public services. This shift was a response not only to global economic pressures but also to the influence of U.S. economic policies that advocated for free markets and reduced government intervention.

Australia’s close relationship with the U.S., politically and economically, has made it a loyal ally in promoting neoliberalism. This alignment has been cemented through trade agreements and military partnerships, making it difficult for Australia to pursue alternative paths that focus on social welfare and environmental sustainability.

2. Why Both Major Political Parties Support Neoliberalism

Australia’s two main political parties, Labor and Liberal, have both embraced neoliberal policies, albeit for different reasons. But their continued commitment to this ideology is not solely due to internal economic rationale. The United States’ extensive influence, especially through its corporate and political interests, plays a pivotal role.

Labor’s Shift Toward Neoliberalism

Labor, once a party dedicated to the working class, started to embrace neoliberalism in the 1980s under Bob Hawke and Paul Keating. The U.S. government and multinational corporations exerted significant pressure during this period, emphasizing the need for economic liberalization to compete globally. Labor’s adherence to these policies can be seen in its moves to deregulate financial markets, privatize state assets, and open trade with the U.S. and other major economies.

Liberal Party’s Longstanding Neoliberal Commitment

The Liberal Party has long aligned itself with neoliberal principles, advocating for deregulation, reduced taxes, and privatization. This pro-business stance fits well with U.S. corporate interests, particularly those looking to invest in Australia. The U.S. corporate lobby has been instrumental in ensuring that both political parties support policies that favour large multinational companies, often at the expense of ordinary Australians.

The Role of U.S. Corporate Influence

Both Labor and Liberal parties receive large donations from multinational corporations, many of which are U.S.-based. These donations significantly shape policy decisions. U.S. tech giants, mining companies, and pharmaceutical corporations have lobbied for deregulation, lower corporate taxes, and favourable trade agreements. These influences keep Australia tied to the neoliberal agenda, limiting the political will for progressive reforms.

3. The U.S. Military-Industrial Complex and Its Influence on Australia

Australia’s alignment with the U.S. is not just economic but also military. The U.S. military-industrial complex has had a significant impact on Australia’s political direction, particularly in its adoption of neoliberalism. Through defence agreements, military cooperation, and joint bases, Australia has become increasingly dependent on U.S. military support. This partnership reinforces neoliberal policies by prioritizing defence spending over social welfare programs.

AUKUS and Military Spending

The recent AUKUS pact between the U.S., the U.K., and Australia highlights how U.S. influence extends into military affairs. AUKUS promotes massive investments in defence, including nuclear submarines, drawing significant public money away from areas like healthcare, education, and environmental protection. The military-industrial complex, driven by U.S. corporate interests in arms manufacturing, benefits directly from these deals, further embedding neoliberal priorities in Australian policy.

Pressure to Maintain U.S. Strategic Interests

Australia’s geopolitical position in the Indo-Pacific region makes it a crucial ally for the U.S. in countering China’s influence. This strategic relationship ensures that Australia is still committed to U.S. interests, including supporting neoliberal economic policies that favour multinational corporations. The U.S. government, through its military alliances and foreign policy influence, encourages Australia to prioritize military cooperation over social investment, preventing progressive reforms that could reduce corporate profits.

4. How Trade Agreements Lock in Neoliberalism

Australia’s trade agreements, particularly with the U.S., have historically embedded neoliberal principles such as free markets and investor rights, often at the expense of national sovereignty. Many of these agreements contain Investor-State Dispute Settlement (ISDS) clauses, allowing multinational corporations to sue governments if their policies are seen as detrimental to profits. This has been a significant barrier to implementing progressive reforms, but Australia has shown resilience, notably in the case of its anti-smoking strategies, where it successfully overcame legal threats from Big Tobacco.

Australia’s Anti-Smoking Campaign: A Case Study in Resistance

In 2012, Australia introduced one of the world’s most stringent anti-smoking measures: plain packaging laws. These laws required cigarettes to be sold in standardized packaging with graphic health warnings and removed all branding, logos, and colours from cigarette packs. The legislation aimed to reduce smoking rates and public health costs associated with tobacco use. However, this move triggered a significant legal battle with tobacco giants, particularly Philip Morris.

Philip Morris Asia, a subsidiary of the U.S.-based tobacco giant, used the ISDS clause in a trade agreement between Australia and Hong Kong to challenge the plain packaging laws. The corporation argued that Australia’s policy violated their intellectual property rights and sought billions in damages. This was a prime example of how trade agreements can empower corporations to challenge public health policies that may affect their profits.

Australia’s Victory in Overcoming Legal Threats

Despite the legal challenge, Australia successfully defended its anti-smoking laws. In 2015, an international tribunal dismissed Philip Morris’s case, ruling that the company had engaged in “treaty shopping” by shifting its operations to Hong Kong solely to exploit the trade agreement. This victory showed that even in the face of powerful corporate and legal threats, a nation can assert its sovereignty and prioritize public health over corporate profits.

Australia’s win was a pivotal moment, not only for public health policy but also for showing that a country can push back against the neoliberal framework imposed by trade agreements. It paved the way for other nations, such as the U.K., France, and New Zealand, to introduce similar plain packaging laws, reinforcing that progressive reforms can be implemented even in a globalized, neoliberal economy.

Implications for Trade Agreements

Australia’s experience with Big Tobacco underscores the need to reform trade agreements that limit national sovereignty, particularly provisions like ISDS clauses. While Australia succeeded in this case, it highlighted how easily corporations can exploit these mechanisms to challenge public policies. Going forward, Australia and other countries should push to renegotiate trade agreements to remove ISDS provisions, ensuring that public interest policies – whether related to health, labor rights, or the environment – are not vulnerable to corporate lawsuits.

Australia’s triumph against Big Tobacco serves as a reminder that while neoliberal trade agreements create significant hurdles, determined resistance and international legal strategies can protect national interests and public welfare.

Investor-State Dispute Settlement (ISDS) Mechanisms

Many of these trade agreements include ISDS clauses, which allow U.S. corporations to sue the Australian government if they believe their profits are being affected by local regulations. This has a chilling effect on the introduction of progressive policies, as the threat of costly lawsuits makes governments hesitant to enact laws that would help citizens but harm corporate interests.

Blocking Progressive Reforms

The U.S. government and its corporate backers have, on multiple occasions, pressured Australia to block reforms that would prioritize social justice. Environmental regulations, worker protections, and labour laws have been weakened or delayed due to threats from U.S. corporations working under the protection of these trade agreements.

5. The Social and Environmental Costs of Neoliberalism

The U.S.’s influence in supporting neoliberalism in Australia has severe social and environmental consequences. Ordinary Australians withstand the worst of these policies, while U.S. corporations and a small elite reap the benefits.

Growing Inequality

\Neoliberal policies have widened the gap between the rich and the poor in Australia. U.S. multinational corporations, often working with little regulation, extract significant wealth from Australian resources while offering low wages and insecure jobs. Meanwhile, the top 1% benefit from tax cuts and financial deregulation, leaving the average worker struggling with stagnant wages, high living costs, and rising debt.

Environmental Degradation

Neoliberalism, driven by U.S. corporate interests, prioritizes profits over environmental sustainability. Mining giants, many of which are U.S.-owned or influenced, exploit Australia’s natural resources with little regard for environmental damage. The destruction of ecosystems and biodiversity is a direct result of policies that favour corporate profits over ecological protection.

6. What Australians Can Do to Push for Change

While U.S. influence over Australian politics is significant, there are ways that Australians can push back against these neoliberal policies and move towards a more just and sustainable society.

Support Grassroots Movements

Grassroots movements play a vital role in challenging entrenched neoliberal policies by mobilizing ordinary citizens to advocate for change. These movements often operate outside traditional political frameworks, leveraging collective action, social media, and local organization to press for reforms that prioritize people and the environment over corporate profits. In Australia, movements like GetUp! and Extinction Rebellion have shown the power of grassroots activism in raising awareness and pressuring governments.

– GetUp!: This progressive movement has been instrumental in advocating for social justice, environmental protection, and economic fairness. Through campaigns on climate action, refugees’ rights, and corporate accountability, GetUp! mobilizes large groups of citizens to engage with politics in new and impactful ways.

– Extinction Rebellion: Known for its civil disobedience tactics, Extinction Rebellion pushes for urgent action on climate change. By organizing protests, blockades, and mass mobilizations, it forces governments to confront environmental issues often sidelined by corporate agendas.

To support these movements:

1. Participate in campaigns: Sign petitions, attend protests, and engage in their advocacy efforts.
2. Donate: Grassroots movements rely heavily on public funding. Contributions help them expand their reach and influence.
3. Spread awareness: Sharing information through social media and personal networks amplifies the movement’s message and encourages wider participation.

Grassroots movements are essential for creating bottom-up pressure, directly challenging the neoliberal structures that benefit corporations at the expense of the public good.

Electoral Accountability

Electoral accountability is critical in dismantling the grip of neoliberalism on Australian politics. By holding politicians accountable, voters can demand that their representatives prioritize policies that benefit the majority rather than a small elite. This is especially crucial in a political landscape influenced by U.S. corporate interests.

To ensure electoral accountability:

1. Demand transparency in campaign finance: Push for reforms that limit or ban corporate donations to political parties. This reduces the undue influence that corporations, particularly U.S. multinationals, exert on Australian politics. Voting for candidates who reject corporate funding can also signal a clear message that voters want politicians to serve public interests.

2. Support Independent Candidates and Smaller Parties: While major parties like Labor and Liberal are often entrenched in neoliberalism, smaller parties (such as the Australian Greens) or independent candidates may prioritize social justice, environmental sustainability, and corporate accountability. Shifting your support to these alternatives can create political diversity and foster policies that challenge the neoliberal status quo.

3. Stay Engaged Beyond Election Cycles: Voting is essential, but so is continuous engagement with elected officials. Writing to your representatives, participating in town halls, and joining political advocacy groups can ensure that your voice is heard year-round, not just during election time.

By exercising electoral accountability, Australians can push for a political system that serves the people, promotes social equity, and protects the environment from corporate exploitation.

Renegotiate Trade Agreements

Australia must push to renegotiate trade agreements that lock in neoliberal principles. By removing provisions like ISDS clauses, Australia can regain control over its economic policies and introduce reforms that help its citizens rather than multinational corporations.

Challenge Military Spending

Australians can call for a reduction in defence spending, especially in areas that directly help the U.S. military-industrial complex. By reallocating these funds to healthcare, education, and social services, the government can begin to address the needs of its citizens instead of prioritizing foreign military interests.

Conclusion

U.S. influence over Australia, particularly through corporate and military interests, has been instrumental in keeping neoliberal policies that help the few at the expense of the many. The U.S. government, multinational corporations, and military-industrial complex exert immense pressure on Australian politics, making it difficult for progressive reforms to take root. However, through grassroots activism, electoral accountability, and renegotiating harmful trade agreements, Australians can challenge these policies and push for a more fair and sustainable future.

Question for Readers:

How do you think Australia can better assert its sovereignty in policymaking and resist U.S. corporate influence?

Call to Action:

Share this article to raise awareness of U.S. influence on Australian politics and encourage discussions about how we can push for a fairer, more just society.

This article was originally published on Social Justice Australia.