Visions for Victoria

Ed David Hayward and Peter Ewer

Book Review - by Tristan Ewins

(Published by Vulgar Press - distributed by Dennis Jones and Associates 19a Michellan Court Bayswater Victoria 3153 )

Visions for Victoria, a collection of essays compiled by David Hayward and Peter Ewer, is an important and welcome contribution to the debate surrounding public policy in Victoria. With the election of the Bracks Labor government in 1998, there was a collective sigh of relief amongst a diverse range of interests and community groups. The long reign of the Kennett Conservative government, as contributors to this compilation themselves observe, was marked by an unprecedented drive to austerity, compounded by the narrowing the Victoria’s revenue base: the product of a sweeping privatization campaign, and increasing dependence on gambling taxes. As Linda Hancock observes, social expenditure under Kennett fell drastically from 6.7% of Gross State Product to 6.2%, with spending in health, education, welfare and community services falling by $281 per head of population in real terms despite economic growth.

‘Visions for Victoria’ sets itself the task of evaluating the efforts of the Bracks Government since the fall of the Kennett government in 1998, and of advocating possible public policy alternatives. Bracks Labor is condemned first and foremost for its conservative financial management policies: policies which, while minimizing risk, create a ‘public policy straightjacket’ stunting any possible growth of progressive spending and public policy alternatives. By resorting to a conservative ‘accrual’ method of accounting, Ewer and Hayward explain how, in tandem with a fixed $100 million minimum surplus, Labor is locked into a financial management perspective which understates the true level of any surplus, makes counter-cyclical expenditure (when necessary) impossible, and prevents the direction of desperately needed funds into health, education, public housing and other fields. Hayward and Quiggin go on to argue how, under Bracks Labor, education and training payments have actually fallen in real per capita terms "by almost 3%", with overall payments "budgeted to fall in real terms" "after adjusting for inflation and population growth." Meanwhile, according to ABS (Australian Bureau of Statistics) measures, therefore, Victoria would have shown a surplus for 2002/03 of close to $1 billion instead of $160 million. This situation, the authors argue, has been compounded by unnecessary business tax cuts of over $1 billion.

The results, as the book’s authors argue, is a government of decidedly modest and uninspiring proportions.

Simon Marginson, meanwhile, undertakes the task of assessing the Bracks government’s performance in education with great enthusiasm, and in great depth. He laments how, because of fiscal conservatism, "the minister" (Kosky) "is forced to dampen down expectations, proclaiming that class size reductions won’t make a difference, and individual teachers, not system restructure" are seen "as the key to lifting standards, much the same as a conservative government would do."

Marginson explains how, under Kennett, spending on government schools fell by about $.5 billion such that Victoria became the lowest spending state (on a per capita basis) in the country. As he argues, "It was as if the government was convinced that public schooling was a bad idea and the system should be forced to collapse." While Labor has responded by restoring teacher levels in primary education to pre-Kennett levels, recognizing the importance of this foundational phase for basic literacy and numeracy, secondary staffing has risen "by only 3%". With some private schools enjoying per capita funding of $20,000/year and are "buttressed" by federal funds, Victorian state schools, on average, enjoy only $6994 per capita. The declining standard of public secondary education, therefore: in terms of infrastructure and materials provided, staffing levels and other crucial factors, has seen the shift of the middle classes into the private system continue. This raises the spectre of a ‘residual’ and second class public system: one perhaps irreversibly marginalized as the drift away from the state sector reaches critical mass. Labor’s financial conservatism makes the reversal of this drift all but impossible to counter, and is effectively hammering the last nail into the coffin of educational equal opportunity in Victoria.

Health, meanwhile, has emerged as Labor’s overwhelming priority, with spending having risen since 2000/01 from $7.2 billion to $9.16 billion. While community and dental care have not benefited in this, and nursing levels remain below the national average, ‘acute care’ has received a substantial boost with only one ‘urgent’ patient having waited over 30 days for surgery over the past three years. Yet while acute care has emerged, perhaps, as the government’s number one priority, its efforts have been undermined by neglect of health at a federal level, with declines in bulk billing resulting in a turn to emergency department services in lieu of the services of GPs. Greg Ford explains how this trend has seen emergency department demand rise by 14% during the period June 2000 to June 2002 with over 24,500 patients waiting over 12 hours in emergency departments for attention. For Ford this, in turn, leads into Federal issues. Is the revenue base sufficient to provide adequate health care in the future? Could the $2.26 billion spent on the private health insurance rebate be better spent on public health care when $1.66 billion of this money goes towards those who already had private health insurance? How does one justify the Commonwealth slashing $100 million in public dental care services when well over $300 million of public money is now devoted to subsidizing dental care for private health insurance holders only? Of course, such issues are beyond the ability of the Bracks Victorian Labor government to resolve.

The term ‘Public Private Partnership’, furthermore, is seen as nothing but "a euphemism for privatization", masking a process by which, because of "the comparative cost of public and private capital" "the privatization of infrastructure" may be seen as "an exercise in fleecing tax-payers and.. workers." Despite avowed commitments to public ownership of water, for instance, "three quarters of the industry is now privately owned or managed."

The Mitcham-Frankston Freeway project is a case in point when considering the efficacy of Public Private Partnership(PPPs): a decision which holds the potential of costing working class motorists in Melbourne’s east thousands a year, or of otherwise reinforcing a ‘two-tiered’ system of infrastructure provision, with private financing of infrastructure limiting access for lower income earners and working class Victorians. This private financing of public infrastructure so favoured by Victorian Treasurer, John Brumby, is referred to by Melbourne Age columnist, Ken Davidson, as ‘economic fundamentalism’: a belief that public financing is inherently irresponsible despite all empirical evidence to the contrary. See: www.theage.com.au/articles/2004/04/28/1083103547962.html?from=storyrhs

While Public Private Partnerships may ease the costs to government associated with debt financing, however, they do nothing to reduce the far greater costs to the public associated with the maintenance of the profit margins to be ensured for private investors.

To take the critique of Bracks Labor further, public housing and an expansion of public transport is seen by Jago Dodson as essential in countering spiralling patterns of geographic disadvantage, whereby poverty is concentrated in the outer suburbs, with poor access to public transport and other infrastructure, as well as employment opportunities. Dodson notes, for instance, how public housing creation has fallen from approximately 3,000 units a year in the 80s to only 739 in 2002.

Finally, on the revenue front, Linda Hancock concludes that, "there is little innovative thinking on how the state could move in the long term to less reliance on socially regressive forms of revenue", while increased dependence on the indexation of fines and other regressive revenue sources is seen as entrenching "poverty and disadvantage." Revenue expansion and a less conservative fiscal policy, here, hold the key to more progressive policy outcomes, as might be expected. Even here, however, gains will be limited without assistance from a progressive Federal Labor government. Mark Latham’s statements in support of Howard’s program of tax cuts for the rich suggest a less than inspirational future: one where there is little or no scope available for substantial public policy spending commitments, including those supported by state grants.

All in all, most contributing authors to this important title tend to conclude that Victorian Labor lacks anything in the way of a coherent social justice strategy. For instance, "the poorest 20% of households" spend "around two times as much proportionately on energy and water than do the wealthiest 20%." Labor has little if anything in the way of a viable social justice agenda to reverse this trend.

Visions for Victoria’is an expansive and comprehensive survey of public policy outcomes and prospects under the Bracks Labor government. It should make a welcome addition to the bookshelves of all concerned with these issues, and a revivification of the public policy agenda in Victoria.

Tristan Ewins tristane@bigpond.net.au is a freelance writer and long-time member of the Socialist Left grouping of the ALP. He edits the 'broadleft' egroup: http://Groups. vahoo. com/arouplbroadleft