Tuesday, 28 April 2015

Nick Cater, Executive Director. 

For how long are the Liberals going to let the Left to kick sand in their faces? For how long will Labor be allowed to get away with the absurd proposition that it is the party of "fairness?" This, after all, is the party addicted to spending other people's money; the party largely responsible for an intergenerational burden of debt.

Its shovel-ready projects were a boon for cowboy contractors, but its live cattle trade ban sent the real cowboys broke. It created jobs in the people-smuggling industry, but killed off more than 100,000 jobs in the manufacturing sector. It was the party that oversaw renewable energy Ponzi schemes that enriched merchant bankers and union cronies while electricity bills for the poorest rose by 40 per cent.

And yet, says Bill Shorten, Labor is "the party of prosperity – and the party of fairness." Its mission is "to help those struck down by the shafts of fate... to lift people up, and gather them in." Labor believes in "an Australia that reaches out a caring arm to those in need."[2]

There is nothing accidental about the Left's presumption of virtue. Having lost the economic argument for the interventionist state, it now seeks to prosecute the moral case. And it is winning.

The Opposition Leader's response to last year's federal budget was not so much a speech as a character assassination. Shorten merrily defamed the Prime Minister, and by implication the party he leads, by resurrecting the class-war rhetoric of the 1930s.

The Abbott government's first budget would impose "brutal and cruel cuts to hospitals and schools;" it was the start of an ideological campaign to turn Australia into "a colder, meaner, narrower place;" it was the work of a government that saw Australians not as people " but as economic units unentitled to respect." Abbott's intention, said Shorten, was to tear down everything Australians have built together; to demolish the pillars of Australian society: universal Medicare, education for all, a fair pension, full employment.

When Bill Shorten misrepresents Tony Abbott, he is misrepresenting party members like you. He condemns the Liberals for their callous indifference towards their fellow Australians, unmoved by the plight of the poor and mindless of the greater good. Yet

this is the party to which you give your time and money year after year because, like its founder Robert Menzies, you believe in a prosperous and just Australia. You want a government that is fiscally responsible, but you don't believe that ends justify means. You would never support a government that tried to get the budget back into surplus by making the poor poorer, the education system worse or pulled the rug out from underneath your grandmother's chair.

Shorten's invective is a parody of conservatism, a version that exists only in the socialist imagination. And yet, a year later, Labor has won the argument. The conventional pub wisdom is that the 2014 Budget was hard on the poor, easy on the rich and generous to multinationals. Labor's narrative has been adopted without question. When Shorten tells journalists that the Abbott government is taxing sick people at the door of the GP surgery, cutting pensions and introducing $100,000 degrees his false assertions are seldom challenged.

Should the Treasurer make cuts in next week's Budget, as he must, we can be certain it will be read as further evidence of his malevolent intent. How could his motives be good? Everybody knows that underneath that jovial exterior is a flint-hearted, cigar-chomping Tory waiting to get out.


How does the Left get away with it time and again? How did Labor, the party of neo-Keynesian deficit deniers, gain the hubris to claim the moral high ground on government spending? How do its leaders keep their faces straight when they claim to be the friends of state education, health and welfare, given their history of wastage and policy failure?

Their proclaimed virtue is funding. The Coalition's sin is parsimony. Yet we know through long experience that money cannot buy a better society. The amount we spend on each child's public education, for example, has quadrupled in real terms since 1945. Pupil to teacher ratios have halved since the war. Are we getting four times more value out of state schools? Has halving the class size doubled the success rate? Many parents clearly think not. In 1947 some 75 per cent of parents entrusted their kids to state schools. Today only 65 per cent are prepared to do so.

We are entitled to suspect Labor's motives, as it suspects those of the Liberals. Perhaps they are less concerned about the interests of pupils than they are with gaining the goodwill of teacher unions. The iron law of government spending is that those who benefit first are the people who administer it. The Gonski school funding agreement will pump more money into state schools, but it is naïve to imagine it is a victory for social justice. It does not prove, as the Labor Party claims, that it is on the right side of history. Quite the opposite, in fact.


The dialectic of cold-hearted conservatism versus caring, sharing progressivism is mirrored in political debate throughout much of the developed world. To judge by the titles on display in Waterstones bookshop in London, five years of Conservatism has been a disaster: Cameron's Coup: How the Tories took Britain to the Brink; Hard Times: Inequality, Recession, Aftermath; Breadline Britain: The Rise of Mass Poverty.

The kindest thing to say about these books is their authors pick the rotten cherries, selecting evidence that supports the author's conviction that Conservative governments are morally reprehensible. Yet most Britons are in a far better place than they were in 2010. Two million more of them are in work; 550,000 jobs have been created in the last year alone.

Thanks in part to the Cameron government's welfare reforms, 692,000 fewer people are claiming benefits in Britain. The ranks of the long-term unemployed have shrunk by 188,000 in the last 12 months. That's more than the population of Brighton. This time last year they endured an undignified, demoralising existence and survived on government handouts. Today they are either in education or experiencing the dignity of work.

In a rational world, this should break the narrative of hard times, breadline Britain, and the Tories taking the country to the brink. It should demonstrate that liberalism and conservatism are the true philosophies of compassion since the best form of welfare is a job. But it makes no difference; the narrative of austerity, misery and penury prevails.


At the Conservative Party conference in 2002, Theresa May, now Home Secretary, spoke from the heart in a manner that made her somewhat unpopular with her confreres. The next morning she defend herself in a radio interview:

"There was a perception out there that the party was a nasty party, that we weren't caring," she said. "What we need to do as a party, and have needed to do, is actually face up to that fact." Some people might find that language of nastiness difficult, she said. But unless the Conservatives were prepared to see their party not as its supporters imagined it but as appeared to others, it would never move forward.

The success of Labor's faux campaign of fairness is a reminder of an uncomfortable truth. Many voters suspect or are convinced that the Liberal Party, despite its name, is the Australian branch of the Nasty Party. Clearly that is not what Menzies intended. Menzies described "the protection of the poor and the weak, and the elimination of the causes of poverty and weakness" as "the supreme business of politics."[3]

Centre-Right governments today are obliged to pay much closer attention to the details of monetary and fiscal policy than Menzies ever needed to do. Yet the imperative for economic discipline is not at odds with Menzies founding liberal principles. The legacy of today's Liberal leaders, like that of Menzies, should be "a nation advanced in prosperity and justice."[4]

We are inclined to forget that the Liberal Party was not put on earth to clear up Labor's mess – although it may so often seem like that. The party's job is not just to balance the books. The Liberal Party is not the political equivalent of the receivers sent in to salvage a bankrupt business. Liberalism has a much higher purpose - a moral purpose – an emotional commitment of which Menzies frequently spoke, but that today's Liberals seem too timid to discuss.

A strange legacy of Thatcherism and Reaganism is that the Centre Right no longer has the ability to mount a moral argument. It is consumed by the numbers and unmoved by the music. Politics has become a dismal science rather than a principled pursuit; its leaders talk the language of accountants and seldom speak from the heart. By concentrating on the economics of good government, we have failed to condemn the immorality of bad government or inspire our fellow citizens with a message of hope.

It was not always so. Margaret Thatcher was never coy about her moral convictions. Her first reaction on becoming prime minister in 1979 was to quote the prayer of St Francis:

"Where there is discord, may we bring harmony. Where there is error, may we bring truth. Where there is doubt, may we bring faith. And where there is despair, may we bring hope."[5]

Thatcher and Ronald Reagan used morality tales rather than ideological statements or military posturing in their rhetorical campaign against the Soviet Union and its allies. World peace was jeopardised not by nuclear weapons, said Reagan, but "by those who view man not as a noble being but as an accident of nature, without soul."

"It is our spiritual commitment—more than all the military might in the world—that will win our struggle for peace. It is not 'bombs and rockets' but belief and resolve. It is humility before God that is ultimately the source of America's strength as a nation."[6]

Rhetoricians on the Centre Right are coy about such language today. They carelessly adopt the Left's heartless talk of "human capital" as if people were merely machines. They are inclined to think of productivity and participation as virtues in themselves, forgetting that the dignity of work and the duty of care are fundamental to the human condition.

In "Freedom from Want," the fifth of Menzies's speeches in the 1942 Forgotten People series, he spoke of his commitment to "...a wiser control of our economy to avert if possible all booms and slumps which tend to convert labour into a commodity." He went on to say that the Liberal Party was also committed "to a better distribution of wealth, to a keener sense of social justice and social responsibility."[7]

The phrases "distribution of wealth" and "social justice" sound awkward to our ears coming as it does from the father of modern liberalism. Like a vicar in the pulpit who skips over some of the more awkward passages in the Old Testament, we are tempted to leave those words out. But why? Liberals wet and dry believe government should prosecute the case for a responsible society and frame policy accordingly. "The functions of the State," said Menzies, were "much more than merely keeping the ring within which the competitors will fight."[8]

The Liberal Party is committed to progressive taxation. It believes that the state pension should provide not just the necessities for human survival but dignity and comfort in retirement. Its social policies reflect our fundamental human responsibility to assist those who have fallen on hard times or been assaulted by brute bad luck. Why, then, have we allowed the progressives to steal a phrase like "social justice" and claim it as their own?

Menzies for one would not have been prepared to cede the mantle of compassion to the progressives, or "socialists" he would more accurately have called them. For Menzies the socialist state was the very opposite of a compassionate state. It was an enslaving state, one that robbed people of their dignity, sapped their initiative and drained them of moral courage. The centrally planned dystopia he describes in his Forgotten People radio talk is chilling; the state should never be allowed to become an institution

"...on whose benevolence we shall live, spineless and effortless - a State which will dole out bread and ideas with neatly regulated accuracy; where we shall all have our dividend without subscribing our capital; where the Government, that almost deity, will nurse us and rear us and maintain us and pension us and bury us."

That is not the Liberal way, said Menzies.

"... we must be not pallid and bloodless ghosts, but a community of people whose motto shall be, 'To strive, to seek, to find, and not to yield.' Individual enterprise must drive us forward." [9]

Menzies' approach to wealth distribution and social justice bears no relation to the obscenity we know now as the welfare state. For Menzies it was possible to recognise the state's obligation to assist the poor "without in any way ceasing to insist that the first duty of every man is to do his utmost to stand on his own feet, to form his own judgments, and to accept his own responsibilities."[10]

The liberal conception of poverty goes beyond the question of ready cash. It does not claim to be able to relieve poverty by slipping the impecunious a sixpence. The statutory definition of poverty devised by the former Labour government in Britain uses income as its only measure; anyone who received less than 60 per cent of the average wage was considered below the line. This crude threshold allowed former prime minister Gordon Brown to boast that he had lifted tens of thousands of people out of poverty. How? Because Britain underwent a recession and average incomes fell while Brown modestly increased welfare payments. Yet the poor he claimed to help were more impoverished than ever. They were still surviving on entitlements and still living lives without purpose but chances of finding a job had been considerably reduced.

For Liberals, lack of money is not the cause of poverty but the symptom. Its causes lie must deeper – in the absence of education, secure housing, good health and stable relationships. In a free world, everyone is given the opportunity to prosper; those who do not deserve our charity, they need help to develop the fortitude required to deal with the friction of everyday life.

When individuals fall into poverty, it is not "the system" that is to blame. It is individual bad luck or bad judgement, frequently compounded by vices, such as drug, alcohol or gambling addition. The handing out of cash cannot cure these human failings, but it has the capacity to fuel them.


When the Menzies Research Centre started to look closely at improving the welfare system last year, it seemed to be just one of many challenges facing the Abbott government – and not necessarily the most pressing. The challenge of structural Budget reform loomed large. Government spending was set on a path that is out of kilter with revenue projections in the medium term.

Fixing the budget deficit - without raising taxes – will require major reform of the large expenditure items – health, education, defence - and of course welfare. It is somewhat startling to consider that the Centrelink computers are required to redistribute 10 per cent of Gross Domestic Product every year. Welfare – which includes aged pensions and other transfers – accounts for around a third of government spending.

Yet I have become convinced that the imperative for welfare reform is not economic, but moral. Improving our welfare system should never be thought about as a way to save money. To talk of cuts to the welfare system is, I believe, not just unnecessary but morally distasteful. A good Samaritan who encounters someone battered by misfortune has an obligation to spend his last penny to bring relief.

Yet we know that the welfare system is wasteful and inefficient. Worse than that – we know that welfare by its very nature offers an incentive to be poor. Welfare – particularly when administered by the state – increases moral hazard. It offers an affordable path to idleness, devalues enterprise and rewards leisure. When the safety net becomes a hammock it turns surfing off Seal Rocks from a recreational activity into a career choice.

There is no room however for flippancy when it comes to welfare reform. We are indebted to some courageous leaders in the indigenous community for reminding us of the pernicious effects of welfare. Galarrwuy Yunupingu described welfare as "poison." He said:

" is time we acknowledged that government hand-outs are a one-way ticket that lead us nowhere."[11]

The real problem with government welfare is not that it wastes money but that it wastes lives. In the last decade and half, we have learned how to speak about the pernicious effects of welfare in the indigenous community. It is an evil that is blind to ethnicity. The SBS fly-on-the-wall documentary Struggle Street illustrates the corrosive effects of welfare and the deficit of dignity it creates.

As liberals we believe in opportunity, in offering everyone – regardless of gender, ethnicity or social background – the right to a fair go and the obligation to seize it.

In so far as the welfare trap limits that opportunity – and it does, in a way that can be transmitted from one generation to the next – we must seek reform. To the extent that welfare provision discourages ambition, saps self-will and offers an incentive to live a purposeless life – we must change it.

An edited version of a speech to the Liberal Party Mosman branch, 6 May 2015.

[1] R. G. Menzies, The Forgotten People, Angus and Robertson Ltd.' Sydney, 1943, p. 47.

[2] Bill Shorten, speech notes, National Policy Forum, 7 March 2014.

[3] Robert Gordon Menzies, Speech is of Time, Cassell & Company Ltd, London, 1958, p. 221.

[4] Robert Gordon Menzies, 'Democracy and Management', William Queale Memorial Lecture, Adelaide, 22 October 1954. Reprinted in Robert Gordon Menzies, ibid, p. 199.

[5] Margaret Thatcher, Remarks on becoming Prime Minister, Downing St Archive, May 4, 1979.x

[6] Ronald Reagan, "A vision for America", Election Eve Address, 3 November 1980.

[7] R. G. Menzies, The Forgotten People, Angus and Robertson Ltd.' Sydney, 1943, p. 47.

[8] Robert Gordon Menzies, "The Forgotten People," radio talk, 22 May 1942.

[9] ibid.

[10] Robert Gordon Menzies, Speech is of Time, Cassell & Company Ltd, London, 1958, p. 221.

[11] "Galarrwuy Yunupingu issues farewell statement after PM cuts short visit to Arnhem Land', The Australian, 19 September, 2014.






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