Hanging over the 45th federal parliament is the beguiling idea that Australia can defend its modern prosperity by blaming others: by taxing the rich and multinational corporations; by keeping out foreign people, goods or capital; or by putting the banks into the dock of a royal commission. In Australia, this populism feeds off the squeeze on national income from the collapse in the price of our biggest commodity exports. It is found on the cultural right of politics, such as Donald Trump in the US, in the centre such as Nick Xenophon, or among the left progressives who colonise ABC programs such as Q&A;. It appears both in the form of the formally uneducated Pauline Hanson or the imported Q&A; intellectual.
The connecting populist idea is that the system is rigged against the mass of the people. In the left progressive version on Monday night's Q&A;, rising inequality demands some fundamental reordering of capitalism. Yet, at a global level, income inequality has fallen sharply over the past 30 years of economic globalisation inspired by Margaret Thatcher and Ronald Reagan. The mass reduction of poverty achieved through the rise of an Asian middle class – along with big improvements in human health and lifespans – is a triumph of global capitalism.
The political problem now being exploited by the populists is that the reduction of global inequality has expanded the pool of reasonably skilled labour. So income inequality has risen in many rich nations, though not much in Australia. And that has driven the new populist politics of the typical western nation state. Monday's Q&A; was based on the idea that a lot more money should be redistributed from the well-off to all manner of people and causes. Income tax rates could be hiked as high as 70 per cent without shrinking the pie.
It took a well-grounded indigenous leader and former federal Labor president, Nyunggai Warren Mundine, to rightly frame this as a fantasy land. As Mr Mundine said, global capitalism has reduced global poverty. The billions spent in Australia on indigenous disadvantage shows that a lack of money is not the problem. Welfare can actually hurt, as shown by the now entrenched intergenerational unemployment in some indigenous communities. The central issue for the 45th parliament should be how does Australia compete in a global marketplace so it can generate economic growth and jobs.
