Prime Minister John Howard asserts that youth unemployment is one of the greatest social problems facing Australia. He would probably rightly say the same thing about unemployment in general. He further asserts that there are two elements to reducing unemployment: getting a freer labour market and getting sustainable economic growth. The latter, he asserts can only be obtained if the Budget is structurally balanced … that means in deficit during economic downturns and in surplus during growth periods.
These assertions have been made in the lead up to the second parliamentary session of his new government during which legislation for the Budget and for workplace reform go before the Parliament, in particular the Senate.
The Labor Opposition, the Democrats and the Greens have said they will oppose substantial parts of the workplace reforms and many cuts to spending programs that are not contained in standard appropriations Bills. If they are joined by one of two independents in the Senate on any measure, it will be defeated.
It is a lamentable situation for the Government. It will get all of the blame, as governments do, if unemployment does not start to fall, if interest rates stay high or if the foreign debt blows out, yet its opponents in the Senate seem determined to deny it the power to deal with these issues in a way it sees as the answer.
It will mean that the next election will not be fought, as it should be, on the Government’s record and the strength of the light at the end of the economic tunnel. Rather it will degenerate into a fruitless blame-casting exercise. The Government will argue that the light at the end of the economic tunnel is dimmer because significant reforms were blocked.
It is quite reasonable for the Government to argue that Labor’s plan to reduce unemployment failed. It ran up large Budget deficits in growth years. It pursued expensive labour-market programs. It permitted restrictive labour-market practices because they gave power to its union affiliates. And unemployment remained high. Further, as soon as the nation got some growth, there was pressure of the current account and foreign debt. This was because we have preferred to pull money in from overseas because we have been incapable of producing investment and employment internally … savings have been low (because the public sector has been over-spending) and business has been fearful of employing in the current restrictive labour market. In short, under present conditions, the growth necessary to cut unemployment has not been sustainable.
The voters appear to have recognised this at the March election. Whether one reads that result as an indictment of Labor’s policies or and endorsement of Mr Howard’s program, it amounts to the same thing. Mr Howard has a mandate on workplace reform, the sale of Telstra and to balance the Budget quickly. The Senate should not thwart that. It should let those measures through and let the Government be judged at election time without providing it with the excuse in 1999 that the Senate’s blocking of key reform is responsible for whatever economic plight the nation is in at the time.
Labor argues that the Coalition and Democrats blocked Budget measures in Labor’s term. True. All that proves, though, is that something must be done about the Senate’s excessive powers, especially its tampering with line items in the Budget that require legislation outside the Appropriation Bills. At present there is only the cumbersome double dissolution.
It is one thing for the Senate to be a house of legislative and policy review and a house of inquiry. It is another for the Senate to have the power to obstruct the most essential part of government … its Budget measures.