In October last year, Minister for Employment Michaelia Cash issued a media release about the China Free Trade Agreement.
“The landmark China-Australia Free Trade Agreement will unlock immense benefits for Australians for many years to come,” Minister Cash said.
“As well as adding billions to the economy and drive higher living standards for all Australians, this deal will ensure thousands of jobs are created across all States and Territories.”
“It greatly enhances our competitive position in key areas such as agriculture, resources and energy, manufacturing exports, services and investment – these are industries that already generate many jobs but importantly they are sectors where we will see extraordinary opportunities for future jobs growth.”
Sounds good, until you read a report issued by the Minister’s Department of Employment last month titled the Employment Outlook to November 2020 which states that, for the five years to November 2020, employment in manufacturing is projected to decline by 45,700 (or 5.3 per cent), mining by 31,900 (or 14.1 per cent), and agriculture by 9,400 (or 3.1 per cent).
The largest fall across all sectors is projected for Motor Vehicle and Motor Vehicle Part Manufacturing (down by 27,500 or 58.3 per cent), following the announced plant closures by major car manufacturers. A number of other sectors in Manufacturing are also projected to decline such as Clothing and Footwear Manufacturing (5,600 or 34.6 per cent), Other Fabricated Metal Product Manufacturing (4,900 or 7.7 per cent) and Furniture Manufacturing (4,100 or 11.6 per cent).
The report also shows that, despite advertising campaigns by billionaires and compliant politicians suggesting otherwise, mining contributed only 11,300 to employment growth over the last five years and the future is not rosy.
Employment is projected to decline for a number of mining-related sectors. The largest decline is projected for Coal Mining (8,800 or 20.5 per cent), reflecting weak global demand. Employment is also projected to decline in Metal Ore Mining (7,900 or 11.9 per cent), Exploration (6,700 or 18.0 per cent), Heavy and Civil Engineering Construction (4,800 or 6.5 per cent) and Other Mining Support Services (3,000 or 15.4 per cent).
As Barnaby Joyce talks about how well he has done with record prices, Sheep, Beef Cattle and Grain Farming is projected to record one of the largest falls over the period (14,000 or 16.3 per cent).
Over the past few decades the Australian economy has continued to shift away from lower skilled jobs towards a higher skilled, service based economy and this trend is projected to continue over the five years to November 2020, with the strongest employment growth, in percentage terms, projected for those with Diploma or higher qualifications.
The employment level of Labourers is projected to fall by 14,600 (or 1.3 per cent) in the five years to November 2020. Overall, the majority of the occupations projected to decline fall within the lowest skill levels, where seven of the bottom 10 occupations have a skill level commensurate with a Certificate III or lower (for example Product Assemblers and Bookkeepers). The remaining three of the 10 bottom occupations have a skill level commensurate with Certificate IV or Certificate III with at least two years on-the-job training (Secretaries, Structural Steel and Welding Trades Workers and Metal Fitters and Machinists).
What is the government’s plan for jobs for these people?
Australia’s largest employing industry sector – Cafés, Restaurants and Takeaway Food Services, also supported by domestic tourism and further increases in international arrivals, is projected to make the largest contribution to growth over the five years to November 2020 (up by 84,300 or 14.9 per cent).
The largest projected occupation increase is for Sales Assistants (General) (up by 65,800 or 11.9 per cent), the bulk of whom are employed in Retail Trade. Healthcare workers and carers are strongly represented with employment projected to increase by 51,400 (or 20.0 per cent) for Registered Nurses, 43,000 (or 30.6 per cent) for Aged and Disabled Carers, and 39,000 (or 26.1 per cent) for Child Carers.
It should be noted that this government wants to cut penalty rates, have already blocked wage increases for aged and child care workers, and have slashed hospital funding, all of which will impact on our biggest projected growth occupations.
Structural changes in the labour market favour service industries which tend to be concentrated in eastern capitals. Employment in metropolitan areas is projected to increase by 9.5 per cent over the next five years, compared with 5.8 per cent projected for regional Australia.
At the more detailed regional (SA4) level, employment growth is projected to be strongest (in percentage terms) in Sydney – North Sydney and Hornsby (up by 35,200 or 15.1 per cent) and Sydney – Eastern Suburbs (23,600 or 14.4 per cent), while the largest projected increases in employment (in thousands) are for Melbourne – Inner (48,400 or 13.9 per cent) and Gold Coast (35,700 or 11.4 per cent). By contrast, employment is projected to fall by 300 (or 0.7 per cent) in South Australia – Outback and very weak growth is projected for Queensland – Outback (100 or 0.2 per cent) and Western Australia – Wheat Belt (600 or 0.9 per cent).
The free trade agreements were supposed to create jobs. Lord knows, they tell us that often enough, but the facts show otherwise. It is apparent that the FTAs will exacerbate low-skilled and regional unemployment, hitting those who are least resilient and most likely to sink into poverty. It’s all very well to talk about breaking the cycle of welfare dependency but this government is actively destroying jobs and industries as they entrench the interests of major corporations at the expense of ordinary citizens.
And Malcolm’s coup has done nothing to turn things around despite his “jobs, jobs, jobs” rhetoric.
Over the first six months of 2016, the pace of employment growth has slowed considerably, with the level of employment rising by just 0.4 per cent. The decade average growth is 1.8% per annum (this period includes the GFC).
In monthly terms, the latest ABS Labour Force Survey showed a trend employment increase between July and August 2016 of 0.08 per cent, which remains below the monthly average over the past 20 years of 0.15 per cent. The rate of growth in employment has remained below this average for the past eight months. The trend underemployment rate increased to a series high of 8.6 per cent in August 2016.
As Turnbull and Bishop lecture the Americans about the TPP, it should be understood that it has very little to do with free trade creating jobs – moreso extending monopoly powers of American corporations, while maintaining tariffs and quotas for US farmers, and entrenching power and governance among the wealthy.
It may be early days but Joe Hockey’s second and final attempt to bring down a credible budget appears to be unravelling already. Even on the night of his budget speech in May it was clear that his growth projections were far too optimistic.
It makes one wonder if the whole budget process was one started first by establishing a bottom line and then working backwards, fudging the figures necessary to substantiate it.
Is that how they eventually arrived at a growth estimate of 2.75%? Perhaps it was a case that if it sounded unattainable, to hell with it, that’s what it was going to be.
And then they made it 3.50% all the way out to 2019/20?
The Reserve Bank announced on Friday it was downgrading its growth estimate to 2.25% for the current fiscal year. Surprise, surprise! If correct, that has the potential to blow out the deficit by a further $11 billion.
Not that we should be concerned about deficits. It’s the ability to manage them that should have us concerned; particularly when our current treasurer thinks we only have a spending problem.
The fact is, deficit spending is what we need right now, but it has to be targeted. It has to be value adding, creating employment and making a positive contribution to our GDP.
The current deficit projections cannot be attributed to anything positive because they are essentially caused by over-optimistic estimates, not excessive spending. While revenue for the first three months of the May budget is on track, giving Scott Morrison some breathing space, it is based on reduced earnings that are likely to continue declining.
Peter Martin in ‘The Age’ says, “The charts in the budget that predict a return to surplus by 2019-20 were built around an assumption of fast economic growth of 3.5 per cent in the five years to 2021-22.
That growth estimate is simply unreasonable and based more on hope than insight. That means revenue projections over that same period cannot be achieved without significant tax increases. Realistically, a surplus is not on the horizon any time soon.
How long Morrison will continue to kid himself about his perceived revenue/spending problem remains to be seen but sooner or later he will have to face the reality of a slower China and a population not growing as fast as expected.
He has also stated that any increase in the GST would not be used to boost the overall tax intake. How could it not, unless it is all given away in compensation. If that’s the case, why bother increasing it?
Thus far, Morrison has given no indication that he understands how to manage a national economy any better than Joe Hockey. I have no doubt Malcolm Turnbull has a better idea but he is hamstrung by a neo-classical mindset that suffocates his extreme right wing colleagues.
This situation, therefore, foreshadows a difficult time for both men. Sooner or later, unless some Chinese miracle occurs, there’s going to be a clash of ideologies, a seismic shift that will see one of them emerge triumphant, while the other goes the way of Joe Hockey.
If it’s Morrison that survives, the economy and by extension, the Australian people, will be the big losers. However, the spin merchants within the Liberal Party will camouflage it such that it is not likely to be apparent until after the next election.
Without a radical change in strategies along the lines that Italy and Canada are starting to entertain, we will continue in decline for some time yet.
And we should not expect Andrew Robb’s Trans Pacific Partnership (TTP) to come to the rescue either. The news from Hilary Clinton is not good. It is unlikely that, in its present form, it will achieve the 85% GDP target of member nations it needs, for approval.
I suspect Scott Morrison is about to meet his Waterloo.
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Denis Bright invites responses about the long-term significance of the structural changes in China’s economy and its global financial outreach. Future implementation of such changes can be steered by Chinese leaders themselves or imposed from outside by joining the Trans Pacific Partnership (TPP) on terms that are not completely acceptable to China. The latter option would require a more corporate-led style of economic development. Evidence of the significance of the forthcoming structural changes in the Chinese economy is far from complete. The author is open to feedback on the issues raised in this article.
Chinese financial market jitters (FT Online 28 August 2015)
As global financial markets stabilise after recent volatility, news services have rushed to offer explanations of the recent downturns in Chinese financial markets.
There is little doubt about the extent of China’s market correction. The People’s Bank of China (PBOC) and the Chinese government were ready to use up a tiny portion of accrued foreign currency reserves to prevent a free-fall in the market.
News networks around the world tried to explain the significance of China’s market correction.
Germany’s DW News on 29 July 2015 sought clarification from Dr Sandra Heep of the Mercator Institute for Chinese Studies (MERICS) in Berlin on the significance of China’s market corrections for both China and the wider global economy.
The extent of the potential market volatility put Dr Sandra Heep on the spot as the eye of a financial storm was approaching. With her expertise in longer-term economic analysis, Dr Sandra Heep was careful not to join in the guessing game to predict tomorrow’s financial markets.
Seeking longer term perspectives for China
Months before in 2014, Dr Sandra Heep in her prior research position at the Institute of Chinese Studies at Freiburg University was able to be more forthright about the structural changes needed to complete China’s successful transition from its current status as a developmental economy.
Dr Sandra Heep’s broad interpretations of China in transition as the world’s second largest economy are readily endorsed by the news releases from China’s leaders themselves and economic data from independent sources.
More high tech future and global financial outreach for China? (Financial Times Online (London) 25 August)
Although China is now the world’s second largest economy, it may be reaching the limits of its sustainability as a global workshop for the supply of a full array of goods and services.
China’s current status comes with great social and environmental costs as noted by Dr Sandra Heep in her interpretation of China’s capacity as a developmental state with a considerable degree of state planning in its economy.
As a developmental state, China is still identified with the suppression of the purchasing power of lower paid workers, arrested improvements in environmental quality and the sheer cost of living challenges in congested cities.
Long Island, New York: Property haven for Chinese elites? (FT Online 31 August 2015)
Ironically, many other developing countries within the TPP network share similar problems which are excused by advocates of the market model as a necessary transitional phase.
Mexico is a prime example despite its long-standing free trade agreement with Canada and the US under the North American Free Trade Agreement (NAFTA) since 1994.
China also lacks a fully globalized banking system on the scale of financial operations in the US and some Western European countries.
A section of Chinese economic elites are able to distance themselves from the real life problems of a transitional economy. The situation was similar in the earlier generations of industrialization in Britain, Germany and the US.
Prestige property investments in US or Australia are staked out by these economic elites as appropriate hedge assets.
The challenges of economic diversification and global financial outreach
The leaders of the real world China are probably enthusiastic about steering the economy in new directions. However, questions must remain about the appropriateness of the TPP’s market model.
China’s vast foreign currency reserves can be used to foster more dynamic forms of social market capitalism with an outreach into finance, infrastructure investment, environmental sustainability and development assistance.
Pragmatic neighbours like Russia as well as the countries of Central Asia and the Middle East are usually prepared to take advantage of China’s expanded international outreach.
Official Chinese investment could also bankroll longer-term projects in both the Australian private sector and future government sponsored sovereign wealth infrastructure funds along the lines of Temasek Holdings in Singapore.
To Australia’s credit, our support for China’s diversification is evident in the presence of Treasurer Joe Hockey at the inauguration of the expanded Asian Infrastructure Investment Bank (AIIB) in Beijing on 29 June 2015.
The extent of Australia’s role in the bank will be determined largely by the commitment of the next incoming government. AIIB will not be fully operational until 2016.
Significant for China is the presence of countries from Central Asia and the Middle East along the Silk Road Land Bridge to Europe.
Europe itself is represented by all the key economies, including the UK.
Israel has also joined the AIIB. This country has benefited from the investment of Chinese technology in urban transport.
The positive implications for peace and stability in the Middle East from this investment by Chinese infrastructure firms are immense.
There is no long-term reason for the exclusion of strife-ridden countries like Iraq and Syria from this investment outreach after UN-sanctioned peace initiatives.
Proposed Silk Road infrastructure for Central Asia (World Bulletin 2014)
Such positive commercial changes might be thwarted if China was forced to drift back to a pure market oriented financial system. Such infrastructure investment is always a long-term commitment.
This cannot be assured in a financial system which is preoccupied with short-term futures with a trickle-down capacity to benefit legitimate investment.
In this sense, the current negotiations to finalise the TPP present a dilemma for China.
While undoubtedly well informed of the TPP negotiations, China is not one of the core partners of an avowedly market oriented investment and trading network.
The challenges posed by the Trans Pacific Partnership (TPP) for China
It is for the China’s current leadership to decide just how to respond to the current TPP drafts which will greatly empower business corporations by internationalizing competition laws.
TPP drafts contain embedded assumptions about the superiority of the market model of development and of the carrots available from the trickle-down benefits of new corporate investment in each of the participating countries.
The hegemony of rogue elements in global financialization processes is also a temptation for China to take a similar path to economic diversification along the pure market model.
Professor Gerard Epstein of the Political Economy Research Institute (PERI) at the University of Massachusetts in Amherst explains the mechanisms of these financialization processes which have become the ground rules for successful international finance.
In the aftermath of the Global Financial Crisis (GFC), the late Professor Peter Gowan of the International Relations School at London Metropolitan University gave a similar but more detailed synopsis of the challenge of rogue capital flows in Crisis in the Heartland. This article is readily available online. (http://newleftreview.org/II/55/peter-gowan-crisis-in-the-heartland).
Changing the protocols for China’s global outreach
The US sponsored Trans Pacific Partnership (TPP) and a proposed Transatlantic Trade and Investment Partnership (TTIP) between the US and the EU impose a fundamentally different style of economic development and global outreach for China.
China’s key financial institutions must operate within the prevailing rules for international finance. The more interventionist approaches of China’s Asian Investment Bank (AIIB) and the BRICS Group of Brazil, Russia, India, South Africa and China itself are still minor players on a global scale.
China’s hesitancy to join the TPP negotiations has its parallels across the Pacific Rim where the internationalization of competition laws and intellectual property rights has its own detractor in most countries.
Without the release of the TPP negotiation drafts by Wikileaks in 2013, most political leaders would still remain silent about the implications of the voluminous chapters on intellectual property rights and investment protocols.
In the words of WikiLeak’s Editor-in-Chief Julian Assange, “If instituted, the TPP’s IP regime would trample over individual rights and free expression, as well as ride roughshod over the intellectual and creative commons. If you read, write, publish, think, listen, dance, sing or invent; if you farm or consume food; if you’re ill now or might one day be ill, the TPP has you in its crosshairs.”
While China’s leaders might hesitate about the benefits and costs of future participation in the TPP, the proposed internationalization of competition laws in favour of business corporations across the Asia Pacific Rim has also been a divisive issue within the Obama Administration which depends on the support of organized Labor in key swing states like Ohio and Pennsylvania.
In order to gain approval for current drafts of the TPP Treaty, President Obama needs to rely on the support of conservative Republicans for endorsement of the treaty in the senate.
Writing in The National Interest on 6 July 2015, Sean Mirski with a background at the Harvard Law School made the following observations about the impact of the TPP.
At first glance, the Trans-Pacific Partnership (TPP) looks much like any other trade deal. By increasing trade and investment among its partners, the TPP sets out to stimulate a higher rate of economic growth in the United States and among many of its Pacific friends. As with similar treaties, the TPP has been the subject of controversy in the U.S. Congress, which very nearly killed a key piece of legislation necessary to America’s ratification of the agreement. But while American lawmakers attacked and defended the treaty largely in narrow economic terms, they appeared to disregard its main strategic promise.
Besides creating jobs, the TPP may also alter the balance of power in the Asia-Pacific. The treaty will increase the rate of economic growth in the United States and in an array of friendly nations while simultaneously diverting trade flows away from Washington’s greatest competitor, China. More important than any of these absolute changes in economic output, though, is the relative change in national power, itself the product of economic might. Whereas trade is often discussed in absolute terms, relative gains are more important in the often zero-sum world of international politics. If the TPP can change the trajectory of American power relative to China’s, it may be the single most important factor in whether the United States retains its “indispensable” role in the 21st Century.
These comments from an articulate writer with close links to the US intelligence community provide justification for further discussion about the geopolitical role of the TPP as a vehicle for the return of old balance of power strategies for the containment of China.
With China outside the current TPP draft deals, its business and investment agencies must ultimately compete on the terms of investment protocols decided by the TPP across the entire Pacific Basin.
Taiwan’s potential membership of the TPP provides an additional twist to the current economic diplomacy and has security implications for the stability of the Pacific Rim.
The Ministry of Foreign Affairs in Taiwan strongly endorses its unilateral participation in the TPP without reference to China:
The TPP aims to establish a comprehensive, next-generation regional agreement that liberalizes trade and investment and addresses new and traditional trade issues and 21st century challenges. It currently has 12 members, including the US, Japan, Canada, Australia, New Zealand, Singapore, Malaysia, Vietnam, Brunei, Mexico, Chile and Peru. Most of the TPP members are Taiwan’s major trading partners, accounting for over 30 percent of our foreign trade. Thus, the significance of joining the TPP cannot be overemphasized. President Ma Ying-jeou has announced our resolution to join the TPP and we have won support from the US and Japan, with both countries publicly welcoming Taiwan’s interest in joining the TPP. The Ministry of Foreign Affairs and its representative offices overseas have taken bilateral relations as the cornerstone and are making every effort to garner the support of other members pursuant to our accession to the group (Ministry of Foreign Affairs Republic of China (Taiwan) 2014)
Data from the Center for East Asia Policy Studies shows the vast economic capacity within a TPP that included Taiwan. South Korea is likely to be added to the matrix.
Center for East Asia Policy Studies 2014
Thwarting the economic diversification of China on its own terms through the formula proposed by the TPP investment in the Pacific Rim would be a triumph of short-term politics over international peace and stability if Chinese leaders continued to be shut out of the negotiation processes.
Added to the challenges of future economic diplomacy are the separate but near identical territorial claims by both China and Taiwan over sections of the East China Sea and the South China Sea.
Under current co-operative arrangements between the ruling Kuomintang (KMT) Government in Taiwan and China, the Taiwanese proposal to resolve territorial disputes and fishing rights might gain some traction within China itself.
Such claims would be taken more seriously if both Taiwan and China presented a joint submission as part of a One China Additional Systems Approach as with the resolution of Hong Kong’s closer association with China almost 20 years ago.
The window of opportunity facing the TPP Negotiators and Australia
The window of opportunity is closing on this pragmatic arrangement with Taiwan. Local opinion polls are highly favourable to the opposition right-wing Democratic Party in Taiwan as the presidential elections approach on 16 January 2016.
President Ma Ying-jeou of Taiwan inspecting US made military hardware
President Obama will go down in history as one of the greatest of negotiators if a Win Win Win can be developed during President Xi Jinping’s visit to the US in September 2015. This trifecta would have to be a deal which is totally acceptable to China, Taiwan and the US.
Meanwhile it is in Australia’s interests as a responsible middle power to maintain an independent voice in the resolution of the problems posed by the TPP and the sensitivities of China towards the resurgence of Taiwan as a nation state.
Prime Minister Abbott’s support for the prevailing texts of the TPP is hardly Whitlamesque.
Opposition to the current draft of the TPP comes from both sides of the political spectrum across the Pacific Rim.
1973 Postcard from Beijing: A precedent for a constructive role for Australia
Rural lobbies in New Zealand and Japan are delaying the final draft from the political right.
Organized Labor in the US fears job losses in key swing states which must be won by the Democratic Party to keep the Republicans out of office in 2016. In these states, Democratic representatives and senators are cautious about opening up the domestic economy to more overseas competition.
The exclusion of China from the TPP negotiations also hinders its financial outreach across the Pacific Rim as a major economic superpower.
This locks China into its current workshop of the world status. Forcing compliance from China with TPP protocols can contain this economy’s sustainable growth rate and build-in a lower potential threshold for future Australian exports, service agreements and financial ties with a weaker than necessary China.
In this context, Australia can afford to be more proactive in seeking more Whitlamesque amendments that bring China into the TPP on fair terms and conditions. Given the pockets of discontent with the current TPP negotiators, Australia can win goodwill in most countries across the Pacific Rim by becoming a more independent player in both economic diplomacy and the containment of security concerns.
Denis Bright (pictured) is a registered teacher and a member of the Media, Entertainment and Arts Alliance (MEAA). He has recent postgraduate qualifications in journalism, public policy and international relations. His specialist interest is the impact of contemporary globalization on the delivery of progressive public policies.
“It’s hard not feel that we are being attacked at from all angles with corporations eying off developing and developed countries public health services for profit. With an Australian government seemingly hell bent on dismantling its Medicare system with outsourcing payments while introducing co-payments, it’s looking clearer now as to what the current Australian government has planned” writes Mel Mac.
I recently wrote about the TPP and now I think it’s time that we take a look at the Trade in Services Agreement (TiSA). It’s a services-only free trade agreement (FTA) that began in 2012 with exploratory discussions between Australia, US and the European Union (EU) for a year and with formal discussions beginning in early 2013. Australia, US and the EU take it in turns to chair the negotiations in Geneva. The services sector accounts for around 70% of Australia’s economic activity and accounts for around 17% of Australia’s total exports. Current countries negotiating the TiSA are Australia, Canada, Chile, Chinese Taipei, Colombia, Costa Rica, The European Union (representing its 28 Member States), Hong Kong, Iceland, Israel, Japan, Liechtenstein, Mexico, New Zealand, Norway, Pakistan, Panama, Paraguay, Peru, Republic of Korea, Switzerland, Turkey and the United States. These countries also account for around 70% of global trade in services. China and Uruguay have expressed interest but have yet to be invited, it’s also worth mentioning that the Brazil, Russia, India, China and South Africa (BRICS) bloc have not been invited.
The World Trade Organization (WTO) deals with the global rules of trade between nations and the General Agreement on Trade in Services (GATS) came into effect in April 1994, and involves all WTO members. The TiSA’s aim is to be compatible with GATS yet, set a new standard in services trade that covers all service sectors including health and public services; financial services; ICT services (including telecommunications and e-commerce); professional services; maritime transport services; air transport services; competitive delivery services; energy services; temporary entry of business persons; government procurement; and new rules on domestic regulation to ensure regulatory settings do not operate as a barrier to trade in services. The discussions are held behind closed doors as per other trade agreements, Wikileaks managed to leak draft text from the April 2014 round of discussions involving further deregulation of global financial services markets, despite the Global Financial Crisis (GFC). The draft Financial Services Annex sets rules to assist the expansion of financial multi-nationals into other nations by preventing regulatory barriers. The leaked draft also shows that the US is particularly keen on boosting cross-border data flow, allowing the uninhibited exchange of personal and financial data.
The Australian government has a web page for it’s involvement in TiSA and in the sixth April/May round that Australia also chaired, more than 140 negotiators and sector-specific government experts attended. There were advanced discussions in all areas of the negotiations, including on new and enhanced disciplines (trade rules) for financial services, domestic regulation and transparency, e-commerce and telecommunications, and maritime transport. TiSA parties also agreed to move to a negotiating text for air transport and market access negotiations also continued. The Global Services Coalition or “Team TiSA” organised a substantial industry presence in the margins of the negotiations and as the name suggests is pro the TiSA for the US. Trading in services has grown at a faster pace than trading in goods since the 1980s. The United Nations Conference on Trade And Development (UNCTAD) estimates that in 2013 global services exports reached $4.7 trillion and grew at an annual rate of 5%. Overall, the services trade has grown by 95% since 2000. World Bank research shows that the services sector has become the dominant driver of economic growth in developing countries, delivering both GDP growth and poverty reduction. In 2011, the services sector accounted for a massive 49% of GDP in low income countries and 47% in least developed countries. Team TiSA has every right to be cheering for it as it would benefit the US greatly. The US is the world’s largest single-country exporter and importer of services and they generate more than 75% of their national economic output. In 2013 the US exported over $681bn in services, resulting in a $231 billion surplus. Services exports in 2013 grew by $31.8 bn and services imports in 2013 grew by $12.9bn.
Australia chaired the ninth round early last December and this time it was attended by more than 200 negotiators and sector-specific government experts. Good progress was made in advancing the enhanced disciplines (trade rules) for e-commerce and telecommunications, domestic regulation and transparency, financial services, temporary entry of business persons, professional services, maritime and air transport services and delivery services. There was also further discussion of proposals on government procurement, environmental and energy services, and the facilitation of patient mobility. Parties reported on progress in bilateral market access discussions held since the September round and committed to advance these further in 2015. Besides the vagueness and secretiveness above and what it all means for every day Australians, one thing leaps out and that is the facilitation of patient mobility. Luckily another leak was sprung, the proposal was titled ‘A concept paper on health care services within TISA Negotiations’ and it states there is ‘huge untapped potential for the globalisation of healthcare services’ mainly because ‘health care services is (sic) funded and provided by state or welfare organisations and is of virtually no interest for foreign competitors due to lack of market-orientated scope for activity’. It was allegedly a proposal put forward by Turkey, and was discussed by TiSA members in the September round of discussions. And there are justifiable fears that they want to commodify health services globally as well as to promote “medical tourism” for patients.
Experts, such as Dr Odile Frank of Public Services International (PSI) say, ‘The proposal would raise health care costs in developing countries and lower quality in developed countries in Europe, North America, Australia and elsewhere’. Rosa Pavanelli, PSI General Secretary, also commented that ‘Health is a human right and is not for sale or for trade. The health system exists to keep our families safe and healthy, not to ensure the profits of large corporations’. The proposal could see patients being treated in other TiSA countries for reasons such as long waiting times in their home country or a lack of expertise for specific medical problems. The patients’s costs would need to be reimbursed through their own countries social security system, private insurance coverage or other healthcare arrangements.
The beneficiaries of this are the large health corporations and insurance companies, the ones actually behind the negotiations, that would benefit from an approximate $USD 6 trillion business. Public services are designed to provide vital social and economic necessities such as health care and education affordably, universally and on the basis of need. They exist because markets can’t produce these outcomes. Furthermore, public services are fundamental to ensuring fair competition for business, and they provide effective regulation to avoid environmental, social and economic disasters, such as the GFC and global warming. Even the most die-hard supporters of FTA’s admit that there are winners and losers.
New South Wales (NSW) Australia, Nurses and Midwives’ Association organiser Michael Whaites said: “Prime Minister Tony Abbott and Treasurer Joe Hockey have been saying that healthcare expenditure is unsustainable, but Trade Minister Andrew Robb is quietly engaged in negotiations that could potentially see scarce healthcare dollars going overseas”, and that “You can ask whether the government is working in a co-ordinated manner, and indeed what is their real intention on the future of Medicare?” Professor Jane Kelsey, an expert on trade in services at the University of Auckland, warns that health-service-exporting countries such as Australia could find qualified staff being diverted to health export services “that often have better pay and facilities, eroding the personnel base for public facilities and perpetuating inequalities in the health care system”. Education and training investments could also be diverted “to benefit foreign healthcare users, rather than local citizens and taxpayers”.
In August 2014 the Australian Health Department called for expressions of interest from private players interested in taking over the payments of $29bn each year in health and pharmaceutical benefits currently being managed by the Human Services. Human Services Minister Marise Payne said much of the Department of Human Services (DHS) IT infrastructure for processing the payments was old and needed to be replaced and that the private sector might have cheaper solutions. The government claims it is merely testing the market with an initial expression of Interest process, not via cost analysis or efficiencies already provided. Australia Post stuck it’s hand up from the get go and other Australian corporations that are keen are – Eftpos and Stellar (Telstra) with overseas companies being Oracle, Fuji-Xerox, SAP, Accenture and Serco.
It’s hard not feel that we are being attacked at from all angles with corporations eying off developing and developed countries public health services for profit. With an Australian government seemingly hell bent on dismantling its Medicare system with outsourcing payments while introducing co-payments, it’s looking clearer now as to what the current Australian government has planned. The rise of corporations and their lust for profits no matter what the cost is, has to stop. Governments must get out of bed with them and understand that they don’t know best and an even mix of private and government is required sometimes, but not all of the time. The people elect governments to govern and make decisions, we do not elect corporations. Take some advice from them but if you give them an inch they will take a mile as we have been seeing in recent years. Greed is worming it’s way in globally under the guise of competition and job creation. I find this very hard to believe for your average person, for the corporations yes, they keep getting richer and the equality gap wider. Low income countries delivering GDP growth and poverty reduction will be hardest hit and that’s not fair with many only just recovering from the GFC. The US has the most to benefit from this and all other FTA’s, this also needs to stop, they aren’t the biggest power anymore and even if they were why should they get all of the advantages? People over profits, after all you can’t make profits without us and there’s no need to ruin everyone globally once again for it.
What could the Trans-Pacific Partnership (TPP) – currently being negotiated by the Abbott Government – mean for Australia? Of concern, reports Mel Mac, is that it means our rights are being secretly traded away.
The TPP was conceived in 2003 as the Trans-Pacific Strategic Partnership Agreement (TPSEP) as a path to trade liberalisation in the Asia-Pacific. The original participating countries were Chile, New Zealand and Singapore with Brunei joining in 2005. In 2008 the United States of America (USA), Australia, Peru and Vietnam joined, followed on by Malaysia, Mexico, Canada and Japan. China and Korea have expressed interest but the USA did not bring it up when President Barrack Obama last visited the Chinese President Xi-Jinping in November 2014. This was puzzling to most as the USA has made so much of the TPP and it’s nervousness about China’s growing might economically and militarily.
Free Trade Agreements (FTA) deal mostly with goods being imported at a certain price as long as certain environmental and labour standards are met. What’s different about the TPP is that the treaty has 29 chapters, dealing with the whole scope of tariff and agricultural quota removal and market access on sensitive products, but in particular agricultural goods. It also includes provisions over nontariff issues such as intellectual property rights, the environment, state-owned enterprises, and investment. Japan was the last to join in 2013, and agriculture as well as the auto industry has long been a sticking point in Japanese trade liberalisation and held up the TPP negotiations with the USA. However recent agricultural reforms by Japan’s Prime Minister Shinzo Abe has tipped the power of balance back into the governments favour and away from Japan’s most powerful farm lobby, the Japan Agriculture Cooperative (JA). In January this year Japan offered to import more rice from the USA while keeping existing tariffs in place, and the USA agreed to stop demanding that Japan ease its car safety standards. In early February this year, progress was made on issues such as state-owned enterprises, environmental protection, and investment. This not only paves the way for greater market liberalisation and deregulation in Japanese agriculture but enables Mr Obama’s plan to “fast track” push for Congress approval to conclude the TPP within the year.
What is of the most concern is the provisions over not only the aforementioned non-tariff issues of intellectual property rights, the environment, state-owned enterprises, and investment but the Investor State Dispute Settlements provisions (ISDS). ISDS allows multinational corporations to sue governments if they’re deemed not to be acting in their best “interests”. It can potentially place limits on governments being able to develop their domestic laws and policies in areas such as public health, patents on medicine, the environment, food labeling, Internet use and privacy and even local media content. Australia for example is currently entrenched in it’s first investor-state dispute since November 2011 with Philip Morris Asia, due to the introduction of the ‘Tobacco Plain Packaging Act 2011′ (TPPA). The laws were introduced by the former Prime Minister Julia Gillard’s government, as a health measure but Philip Morris Asia amongst the many breaches, believes that it infringes their intellectual property. Previous Australian Labor Party (ALP) and Liberal National Party (LNP) governments have in the past only included ISDS in trade agreements with developing countries that don’t have investments in Australia and they weren’t included in the US-Australia FTA. American corporations are the most frequent users of ISDS and the “safeguard” clauses countries employ to protect themselves can and have been re-interpreted and over-turned through the arbitration process. Philip Morris International Inc in the Australian case for example is challenging the tobacco plain packaging legislation under the 1993 Agreement between the Government of Australia and the Government of Hong Kong for the Promotion and Protection of Investments (Hong Kong Agreement) by using it’s Asian arm to circumnavigate them.
The former Gillard government also decided to ban the inclusion of ISDS in future trade agreements, they didn’t think that it harmed investment as did the Productivity Commission. Even where corporations do lose they have dragged governments through lengthy and expensive legal processes with dispute settlement cases being heard by tribunals of three private-sector lawyers whose decisions are beyond appeal. The tribunals tend to be more concerned with assessing potential damage to corporate investments over the protection of government or public interest. There are more than 500 of these disputes being launched globally and more than $3bn being paid by out governments, meaning taxpayers, to corporations under existing US trade and investment agreements alone.
Not only is there strategic litigation employed by corporations but there is a concept known as “regulatory chilling”, which is the alleged case with Philip Morris Asia suing Australia for example, they’re able to put pressure on other countries considering plain packaging regulations too. According to Dr Kyla Tienhaara: “The Australian government has suggested that Philip Morris is currently engaged in trying to achieve global regulatory chill through its case by basically showing other countries that might want to introduce plain packaging legislation ‘Look what we’re doing to Australia.’ This is actually working because countries are saying, ‘We’re going to wait to find out what happens with that case before we go ahead with our regulations.”
Lone Pine Resources filed a $250m lawsuit against the Canadian government when Quebec placed a moratorium in June 2011, which was expanded into 2012, banning drilling and fracking processes for oil and gas underneath the St. Lawrence River, until a strategic environmental evaluation was completed. “Based on the principle of precaution, the Quebec government’s response to the concerns of its population is appropriate and legitimate,” said Martine Châtelain, president of Eau secours! (Quebec based Coalition for a responsible management of water). “No companies should be allowed to sue a State when it implements sovereign measures to protect water and the common goods for the sake of our ecosystems and the health of our peoples,” Ms Châtelain added.
Again back in Canada, they are popular with these disputes unfortunately, is the case of Eli Lilly and Company, which is an American global pharmaceutical company (and it’s fifth biggest). They filed a $500m law suit against Canada for violating its obligations to foreign investors under the North American FTA for allowing its domestic courts to invalidate patents for two of its drugs. Canadian courts found that there was a lack of evidence supporting the drug’s alleged benefits.
According to Forbes in 2013 the biggest profit margins produced be USA corporations were in the Pharmaceuticals, Banks, Car makers, Oil and Gas makers and Media industries. In 2013, US Pharmaceutical Pfizer, the world’s largest drug company, made 42% profit margin. As one industry veteran put it: “I wouldn’t be able to justify [those kinds of margins].” In the UK that year, there was widespread anger when the industry regulator predicted energy companies’ profit margins would grow from 4% to 8% for the year. Last year, five pharmaceutical companies made a profit margin of 20% or more, these were – Pfizer, Hoffmann-La Roche, AbbVie, GlaxoSmithKline (GSK) and Eli Lilly.
The problem isn’t just with the massive amounts of seeming profiteering but the fact that the drug companies spend far more on marketing drugs, in some cases twice as much, than on developing them. Johnson & Johnson (US) total revenue for 2013 was $71.3bn with a profit of 13.8%, it only spent 8.2% on research and development, yet 17.5% was spent on sales and marketing. Drug patents are usually awarded for 20 years, but 10-12 of those years are spent developing it at a cost of up to $2.5bn, leaving eight to ten years to make money before the formula can be taken up by generic drug companies. Once this happens, sales fall by 90%-plus. Joshua Owide, director of healthcare industry dynamics at research company GlobalData, explains, “Unlike other sectors, brand loyalty goes out the window when patents expire.” This is why pharmaceutical companies go to such extraordinary lengths to extend their patents, a process known as “evergreening”, employing “floors full of lawyers” for this express purpose, one industry insider has said. And with a drug raking in $3bn a quarter, even a one month extension can be worth a lot of money. Some drug companies, including the UK’s GSK, have been accused of more underhand tactics, such as paying generics to delay the release of their cheaper alternatives. This is a win for both industries, as it has been said that the loss of the big pharmaceuticals far outweighs the generic industries revenue.
What can all of this mean potentially for my native country Australia and more so in my current home state of New South Wales (NSW)? NSW regulations that prevent coal seam gas (CSG) recovery near residential areas could be subject to law suits if the TPP goes ahead with these murky investor-state dispute settlement provisions. If it affects their profit margin you can be assured that a law suit will eventuate as will tricks from corporate lawyers trained in this specific area. Australian Trade Minister Andrew Robb has assurances of a deal being finally struck within weeks. “Mid-February to mid-March: that’ll be, I think, the timeframe,” he said. “We might have to come back again to conclude some things, but that’s the intent. The final issues, as always, are the most difficult. But everyone seems to be in a mood to find some common ground so that we can get this major, major agreement off the ground.”
The current Australian government has an appetite for signing FTAS as seeming proof of their economic prowess. The TPP has been years in the making and fraught with difficult negotiations especially in regards to the ISDS provisions that could impact on us really hard, and we have barely even touched on them. The secrecy in an Australian political environment, let alone with a disillusioned public, couldn’t come at a worse enough time. I would think now is the time for the Opposition, Independents and the Senate to come together and put the public’s interests first and put it first every time, no matter the high level of Investment interest in our country. It is apparent that the current government wants to dismantle our Medicare and even introduce a medical tax. Can you imagine what could be in store for us if we allow multinational corporations or investors with trade ministers, not governments mind you, to ultimately decide our economies, laws and policies? I will leave you with the global spend on medicines projected to be worth up to $1.2 trillion for the year 2017.
March in March saw tens of thousands of disenchanted voters take to the streets across Australia in protest against the Abbott Government. But it was just the beginning. After the marchers had dispersed, the anger at the government still simmered.
Now the people are marching again.
The AIMN has been contacted by the organisers to promote the next instalment: March in May.
This we are more than happy to do.
After March in March many in the mainstream media ridiculed it as nothing more than a rabble. It was just a group of lefties, they mused, coming along for the walk and waving a placard.
March in May will have a clear message (see list below). The media will know why people are marching. It would be foolhardy to ignore it.
Here is the promo The AIMN received:
Media Diary, Sydney Event Alert for May 18 2014 MARCH IN MAY TO TAKE PLACE SYDNEY, ADELAIDE AND PERTH SUNDAY MAY 18TH 1PM
MARCH IN MARCH saw over 110,000 Australians rally together across 33 locations to express their concern and disdain for the policies of the current government. This grass-roots movement gave a voice to a broad demographic including the elderly, young families, first-time activists, long-time activists and even Liberal voters.
This event was a positive, empowering and uplifting exercise in unity and democracy attracting a range of speakers from many walks of life. To follow on from its growing success, there will be a snap demonstration to register public objection to the ongoing irresponsible and dangerous decisions of our current Federal Government and the impending budgetary announcement – Sydney, Adelaide and Perth will again MARCH IN MAY 2014.
What exactly are we marching for? Better policy making NOW and better governance long-term; transparency, accountability, ethics and equity. We want a progressive Australia which reflects the open-minded, conscientious and intelligent nature of its citizens.
Core areas of concern include: – Education (cuts to funding and new fees) – Public services (healthcare, welfare, ABC & SBS funding cuts, the National Broadband Network) – Environmental Issues (animal rights, climate change, dredging of the Great Barrier Reef, logging of heritage-listed forests, coal seam gas and mining) – Human Rights (asylum seeker rights, indigenous issues, women’s issues, worker’s rights) – The Economy (anti-Trans Pacific Partnership) – Corruption within the government and pandering to corporations – Political bias in the media.
MARCH IN MAY – SYDNEY SUNDAY MAY 18th BELMORE PARK, CBD AN EXCITING LIST OF GUEST SPEAKERS AND PERFORMERS TO BE ANNOUNCED
Unless you own a newspaper or a mining company, or are happy to turn a blind eye to the erosion of our democratic values then it would be difficult to get an argument from you that the Abbott Government continues to go from bad to worse.
But one of worse characteristics of this government, and one that receives little attention, is its determination to silence any dissent. It is this silencing of dissent and the erosion of our democratic values that prompted ‘Joe W’ to write this letter to The AIMN:
I’m sick of being called anti-democratic, or a ‘sore loser’ (among other insults) over the election result and told to swallow this government’s lies whole. My response to this incorrect assertion and attempt to silence me is as follows: My complaint is not over the election result, rather how the election was won and that the Abbott Coalition is using this result as justification for the erosion of our democratic system. Here are a few examples off the top of my head from the few short months under the Abbottocracy:
1. Disbanding of expert governmental panels that give government best scientific and economic advice from which to enact policy, which is a way of not being held to account for their decision in the public forum e.g. Climate Council.
2. The disbanding of committees representing the people and front line workers of industries and peak bodies giving voice to policy debate – across the board – silencing the voice of the people in their respective fields e.g. law reform committee, alcohol and other drugs council.
3. The aggressive and threatening rhetoric directed towards the workers of Australian public agencies and expert committees, backed up by severe cuts and summary disbandment and sackings. Clearly designed to silence any dissent, even where it may be in the best interest of the Australian people, adhere to scientific reason and well-founded economic rationale e.g. latest example being the marine park authority.
4. The stacking of governmental panels with members with clear bias or conflict of interest, thus ensuring predetermined outcomes of the governments design. This is not democracy, it is exercise in the sanitation of dictatorship e.g. a panel of review into renewables headed by a fervent opponent of wind generated energy, yet another review into education dismissing the findings of Gonski and headed by an avowed critic of our open and secular curriculum, the head of the audit of budget being a representative of big business with a myriad of vested interest in privatization and corporate expansion.
5. Attacks upon the press, not just the unfounded accusations and threats leveled against the ABC but also mainstream commercial media, who are often derided into silence.
6. The attacks upon unions, which like it or not, represent the interests of Australian workers and their families – many whom have lost their jobs since the Coalition came to power e.g. setting up a royal commission against unions, bringing back tough Howard era restrictions and sanctions against union activities and members.
7. Increase costs to FOIs, increasing barriers for the press and individual citizens to be able to gain information on governmental action.
8. The increasingly secretive process of negotiations towards the TPP – signing over our nation’s sovereign rights to the interests of multinational corporations with no proper Senate oversight or representation in these negotiations for representatives for the interests of the Australian people.
9. Massive cuts to legal aid services. Equality before the law being a basic principal of democracy and expert representation essential to the rule of impartiality.
10. The undermining of international law and institutions designed to protect our freedoms, support peaceful, cohesive and productive relations, and to give forum to international negotiation and efforts towards constructive and sustainable objectives e.g. snubbing international climate change forum, dissing international conventions and siding with the perpetrators of the most blatant breaches against liberty.
11. Refusing to make government papers available to opposition parties (representative of the people) an act of refusal not once seen by the previous government, despite the numerous requests and attacks of Australia’s most aggressive opposition.
12. The labeling of any dissent or questioning as unpatriotic and insinuation of alignment with an ‘enemy’. The usage of the rhetoric of war in a time of peace as means of shutting down inquiry. The vilification of peoples, groups and attacks upon the right to protest and public assembly. The framing of discussion in terms of us and them and manipulation towards siding citizens against a common enemy. Fear mongering and the fanning of the flames of hate. The examples here being too numerous to mention but clearly designed to create a climate of fear over threats to our way of life and orchestrating a divisiveness preventing a reasoned examination of issues facing our nation.
Democracy encompasses more than one vote per person every 3 years. The points listed above clearly demonstrate the aggressive silencing of the people and an erosion of the institutions of democracy designed to give a voice to represent the interests of all Australian citizens.
A guest post by Matthew Mitchell. This article was first published on Matthew’s blog (We) can do better.
Abbott took government by playing on the fears of Australians, supported by the Murdoch press. Fears that have been built up and sustained through systems of secrecy, lies and deception. This is the emerging pattern of westernised governments and corporations across the globe. And these techniques depend upon violence, fear and coercion. All of which were evident in the Manus Island riots and killing, despite attempts to demonise the victims (Howard pulled a similar trick with Tampa).
The truth is that refugees, particularly those arriving by boat, form a tiny percentage of immigration into Australia, and could not come close to the “legal” immigration figures (see here for Asylum Seeker Myths). Not to mention that we are bound by law to accept them, under our international agreements. The vast majority of immigration is officially encouraged specialist migration, done not out of any grand vision for Australian society, but solely to feed the industrial growth model which is destroying the planet and leading not to higher prosperity for Australians, but significantly lower in terms of: levels of debt; less choices of jobs; less educational opportunities; crowded transport systems; hideous urban living developments and ongoing destruction of the natural environment.
In fact, it is this failing growth model that is mostly causing the refugee problem in the first place. Our dependence on fossil fuels, Australia’s collaboration and support of the U.S in global manipulations to establish regimes that serve the interests of a wealthy elite; the general extraction of the resources of less developed nations; manipulations of markets by multi-nationals which ensure that those nations at the bottom of the global food chain can never climb up, the list goes on. The WTO has never delivered the necessary agreements on agriculture that would eliminate subsidies by the U.S and other wealthy nations so as to allow developing nations to compete fairly. In the WTO’s own words: “developing countries […] say developed countries have failed to implement the agreements in a way that would benefit developing countries’ trade.”
George Monbiot – a respected journalist for The Guardian newspaper – is exactly right when he states: “The real threat to the national interest comes from the rich and powerful“.
In fact the failure of the multi-nationals to achieve what they wanted through the WTO has lead to the Trans-pacific Partnership (TPP) , an “agreement” being negotiated in secret and described as a “corporate coup”.
The manipulation of corporations is well captured in the following video parody of the Coal Industry – coal which is now polluting Gippsland as it has been polluting Chinese cities for years – to the sure detriment of their children’s long-term health. Not to mention 8 million acres of Chinese land so polluted that food cannot be grown on it. It is in such nations that the dark underside of our growth based consumerism is hidden from view, and the less said about it in the corporate controlled media, the better:
The underlying fact is the whole destructive system is based on force. Even the most passive resistance cannot be tolerated and must be removed by force, as Occupiers around the world found out in 2012 (including in Melbourne). This is confirmed by Oxford Professor Avner Offer who says this model is: “a warrant for inflicting pain.” Offer also says: “Economics tells us that everything anyone says should be motivated by strategic self-interest. And when economists use the word ‘strategic’ they mean cheating” and he concludes: “one of the consequences of this is that economists are not in a strong position to tell society what to do.”
It is this coercive, cheats based system that the Abbott government firmly believes in and supports, and it is because of the faults and failures of this system that we must march in March.
In Melbourne: State Library at midday, Sunday March 16. Click here for other locations, including country towns
Democratic governments provide two fundamental functions in the service of a single overriding responsibility. When a government, through the performance of its two functions, betrays the single responsibility it holds, it has lost its mandate to govern. There is a case to be made that our current Coalition government is in exactly this position.
The raison d’etre for democracy, without which the very concept of democratic government would not exist; is to provide a means for the community as a whole to configure the kind of society in which they wish to live. Inevitably this involves winners and losers: government exists primarily to put checks on the powerful and support the weak. Governance is thus about promoting equality. The cut and thrust of politics is about thresholds – how much is too much? How much is too little?
Governments fulfil this basic purpose through the actions of their two primary functions: legislation and national defence. Legislation allows a government to protect its citizenry from internal threats; national defence protects us against external threats. Since coming to power, Tony Abbott’s Coalition government has continued a long history in Australian politics of continuing and sustaining Australia’s military, and in this way the government is carrying out its remit for national defence. Good for them.
In the field of legislation against internal threats to society, their record is not so good.
The Big Bad: the Food Industry
There is a growing recognition amongst public health bodies that food manufacturing and marketing in Australia, and the west in general, is promoting unhealthy eating habits and contributing materially to public health issues such as obesity and diabetes. History has shown us that industries acting counter to the best interests of the people eventually face opposition and attempts at control and harm minimisation by societal groups, and that eventually governments come to the party and assist in such opposition. The tobacco industry is the cause celebre but alcohol and junk food are both likely to follow. It is in this light that on 14 June 2013, COAG – the Council of Australian Governments – announced the implementation of a packaging labelling scheme in Australia. This was the culmination of a long discussion and negotiation process beginning in December 2011.
The Front of Pack food star rating scheme is a compromise solution painstakingly agreed and laboriously (and expensively) developed over two years. COAG is the federal council that brings together Australian state and federal governments in a single body. The scheme, initially intended to be voluntary, will provide consumers an easily understood guide to the nutritional value of their foods. The scheme was brokered between COAG and the Public Health Association with ongoing consultation with the food industry. The food industry, represented by such bodies as “Australian Public Affairs” and the Food and Grocery Council, has cooperated in its development despite being trenchantly opposed to the scheme and seeking any means possible to delay its introduction.
The Abbott government has been accused of deliberately delaying the introduction of the scheme until after State elections in South Australia and Tasmania on 15 March, for exactly this purpose, hoping that the composition of COAG would change sufficiently to allow the cancellation of the agreement. Cancellation or amendment of a COAG agreement requires the majority of State and Federal governments and the current makeup of the council is narrowly in favour of the food labelling scheme.
Included in the star rating scheme is a food ratings website that is intended to provide consumer advice on the nutrition of packaged foods. The website also includes a calculator for food manufacturers to use to calculate the star rating for their packaged foods for voluntary inclusion in labelling. The website was completed and went live on schedule, on February 5 2014. Many public health groups and industry groups were expecting its arrival and awaiting its commencement and it seems a minor miracle that such a website, developed over two years by the public service in conjunction with the Public Health Association, should have been completed on time.
Nash’s publicly stated reasons for pulling down the website is that “the website will be confusing for consumers as it uses a star rating that is not yet ‘up and running’.” She has also claimed that it was a draft put online by accident. But it was her chief of staff, married to the owner of the business lobby group Australian Public Affairs, who personally intervened to have the site unilaterally taken offline.
Protecting the interests
This is not the first example of Ms Nash protecting the interests of corporations and business lobbies at the expense of public health or public interest initiatives. It’s tempting to make personal judgements that Ms Nash is not an appropriate candidate for the position of Assistant Health Minister, but she operates within a government with a strong track record of supporting business interests rather than public good regulations that limit them.
Democratic government is designed to serve the interests of the People – not individual people, but the community as a whole. Conservative governments are wont to argue that making life easier for businesses allows them to create more jobs and thus serves the interest of the people, and there is some justification for that; however, there are cases where public interest and corporate interest clearly come into conflict. These include areas of workplace health and safety; of environmental protection; and of protection of public health against goods which, in excess, can be harmful.
In a capitalist society, companies are fighting two major opponents. The first major opponent a business faces is its competitors. Companies need to compete against other companies to turn a profit. The role of government in this is simply to be even-handed; to not preference one company at the expense of others. The litmus test should be whether any proposed change operates across the board. If competition is seen as a public good, then sympathetic treatment may be justifiable towards the underdog. The second major opponent a company faces is the community.
Companies are beholden to the public that buys their goods, but are not above manipulating and mistreating those customers. Marketing might sometimes be righteous – if people have an identified need, promoting a product which can meet that need is perfectly legitimate. But in our materialistic society with many competitors for the purchaser’s dollar, much of marketing is about creating the need prior to seeking to fulfil it.
In the context of coercive or manipulative commerce, government’s role should always fall squarely on the side of the People’s interest. Regulations and laws exist to put limits on what companies can get away with, because it will never be the companies themselves that impose limitations.
An emerging pattern
The cancellation of the food star ratings website is a clear case of corporate interests being favoured at the expense of the People, and a clear abrogation of the politician’s responsibilities. However, it is merely the latest in a long line of government actions from the Abbott government that favour the interests of corporations rather than the People. Prominent examples include:
The Trans Pacific Partnership (TPP). This is the grand-daddy of corporate interests into which both recent governments, Labor and Coalition, have been driving us headlong. Whole articles can be written about the TPP – and indeed they have been.
The National Broadband Network. It has been convincingly argued that the main reasons for the Coalition’s opposition to Labor’s model for the NBN is that it will do harm to entrenched corporate interests.
The mining tax. To attempt to redistribute some of the wealth of the largely overseas-based megacorporations involved in strip-mining this country and put it to use across the community and small businesses makes logical sense, but it goes against Coalition ideology of protecting the corporate interests of those who make profits.
An internet filter. The idea of an internet filter is not new; Steven Conroy was rightly excoriated by the left for this idea that is tantamount to censorship. George Brandis’s vision of the filter, however, is not so concerned with protection of children and our moral virtue; it is aimed directly at protecting the existing media corporations, in the guise of protecting copyright. Whilst this is an issue with some justification, you might think we would have learned by now that protecting the rights of intellectual property holders by draconian regulation always hurts both the eventual consumers of media products as well as innocent bystanders who want to use file sharing for legitimate purposes.
Attacks on unions. The Abbott government’s ideological crusade against trade unions is not really about corruption and they are not really friends to the honest worker. The primary and overt aim of the coming Royal Commission is to damage Labor – both its reputation and its source of funding. But the chief outcome in any conflict between corporations and the unions which exist to protect workers and the community from the corporations’ excesses will always be to the detriment of the community. For evidence of the government’s allegiances in this field, look no further than the recent case of SPC, where the government attempted to push SPC to reduce staff conditions to the minimum allowed by the award before any assistance would be possible. In some strange way, this equates in the government’s mind to being “best friend to the honest worker”.
Credit where credit is due
It must be said that the Abbott coalition government seems to genuinely believe that promoting the interests of corporations will be for the good of Australia; they are not being deliberately harmful to the people they govern. But there does not appear to be any kind of “public good” test being applied to decisions. Corporations have the ear of the government through lobby groups and donations, and it certainly seems that the government’s ear has been turned. But when both government and public opinion can be swayed by the corporations that government ought to be protecting the public against, the very purpose of democracy is being subverted. Whether or not the coalition government (and its predecessor in Labor) are being malicious or merely unduly influenced, whether there is corruption or nobly-held ideals, it is the community that suffers. The only question remaining is how far the imbalance will go before the people wake up to the fact that the People and the Corporations are not on the same side?