A bolder Albanese Labor government won’t reform the economy

What’s the reaction of lobby groups, commentators and business figures to an election that represented such a surprising shift in political sentiment? Is it to reflect on what the outcome means for the causes they’ve been advocating?

No, they’ll continue flogging the same causes they were before, like they would have regardless of the outcome.

Take the business lobby. In response to the election, long-time Crikey favourite Innes Willox of the Australian Industry Group called for more “economic reform”, saying “we have policy settings at the moment which are inimical to productivity”, nominating “the industrial relations settings”.

Those are the settings put in place by Labor that even the Liberals refused to propose changing.

At the Financial ReviewJames Thomson urged “broadening or increasing the GST”, a long-time business demand, regularly advanced as an offset for cutting company taxes, because it shifts more of the tax burden from corporations and investors to low-income earners.

Ernst & Young economist Cherelle Murphy agreed, arguing more consumption taxes would discourage renters from being so profligate, and might encourage them to work more overtime instead of “blowing the week’s wage on frivolities to make the rental feel nicer”.

Wesfarmers chairman Michael Chaney also wants industrial relations reform, as well as “unpopular decisions”. Chairman of climate criminal Santos, Kevin Gallagher, demanded business be allowed to play a role in developing Labor policy and increase gas production, complaining that “rent-seeking voices with no expertise in energy have been influential”.

Well, he’s right on that.

And it’s not merely business. At the woker-than-thou Guardianundeterred by the failure of the Greens, “youth researcher” Intifar Chowdhury warned young voters were “crying out for action on the big structural problems: housing supply, intergenerational inequality, flatlining productivity”.

Yep, you can just imagine young people marching into polling booths, ready to give the big parties a serve about poor productivity. Chowdhury also complained about how there’d been “no meaningful move to lift people out of poverty”. (Those big increases to the minimum wage urged by the government, much higher pay for care sector workers and energy bill rebates costing billions were clearly a figment of someone’s imagination.)

All of these views could have been expressed no matter what the outcome of the election: if Peter Dutton was now prime minister, business would be demanding workplace reform, economists would call for a higher GST, the left would be demanding something serious be done about poverty. In other words, none of them bothered to update their prior beliefs to accommodate new evidence presented by the election result.

In the Financial ReviewSaul Eslake also reiterated his priors — which are pretty much my own priors — but at least grappled with what the outcome of the election meant for how Labor should finally pay attention to the big issues it refused to deal with in the election, like tax reform or the end of the US security guarantee.

But there are hard lessons for anyone who hopes for a strengthened Albanese government to take on bigger issues. Albanese has now clocked up his second election win — and a much bigger and better one than the first — with his approach of being unambitious, risk-averse and uninterested in bold reform.

Anyone who thinks a bigger majority will lead to a bolder Labor is missing the point that Albanese has had both his strategy and his tactics totally vindicated. Why abandon them?

The electorate has also indicated that, when it sees its living standards going backwards, it wants governments to directly address that, rather than pursuing structural reforms or tax changes or fretting about the size of the budget deficit. This was the first election when Labor promised big deficits in coming years, and the Coalition promised they’d be even bigger in the immediate future.

At the same time, the electorate rejected the right-wing populism on display from Donald Trump, having witnessed the chaos and damage that such superficially attractive “trash the whole rotten system” economic irrationalism can lead to. Contra the rejection of Biden-Harris by US voters, Australian voters prefer someone who says they will make a poorly performing economic system deliver more, rather than smash it up.

(There’s an argument this means the electorate has embraced Albanese’s “kindness” — forgetting that 18 months ago the majority of the electorate gave the middle finger to First Nations peoples. Australians aren’t kind, except perhaps to people with white skin.)

So advocates for both genuine reform and the “reform” urged by business and the Financial Review have the challenge of explaining to voters how their policies will make the economic system deliver more for real Australians — not for corporations, not for the disembodied phenomenon of “productivity”, not for “the economy”.

That doesn’t just mean better communication — the reform crowd have been talking about better communication for decades now — but also actually understanding the priorities of real workers who have a mortgage, or maybe can’t afford a mortgage yet, and who wonder why everything costs so much more.

It means recognising what industrial relations deregulation does to workers and their families. It means understanding that major changes like working from home aren’t purely about better productivity, but about giving workers more flexibility (business always wants more flexibility, but for themselves, not their staff) and better work-life balance.

It means not seeing groups in society — per Cherelle Murphy — as lab rats whose annoying behaviour can be tweaked with some tax changes, but as real people with a stake in policy. It means not seeing the expanded care economy as some sort of drain on productivity, but as a sector crucial to our basic social conditions that shows our willingness to look after our seniors, our ill, our poor.

Only from that basis can reform advocates make a case for achieving change that has buy-in from the electorate, rather than (as advocates of four-year terms want) change that is forced on the electorate whether it likes it or not.

What it certainly doesn’t mean is reflexively reiterating the same demands over and over, no matter what other people think.