I seem to be caught up in a variety of conversations and readings that focus on the sort of society we actually have in Australia. An artist preparing a large piece for the Sydney Biennale said, if I remember his words correctly, that our policy with respect to asylum seekers gave ‘Australia a bad image internationally’. In comparison to which country, I wondered (there is more below). Dick Smith wants us to stop immigration entirely, or almost entirely. Another speaker described Australia as one of the last outposts of ‘capitalism’. Again, I wondered where the other outposts were. I came across an interesting essay elsewhere whose point was that pessimism was taking over — that no one much seemed to realise just how much Australia had improved in the last half century or so. I rather agreed with him. In each case ‘Australia’ was used as though we all knew what was meant, and other words like ‘capitalism’, ‘socialism’, ‘immigration’, ‘asylum seekers’, and so on, are usually put forward as though there is clear understanding of what is meant, and that we all have the same meanings. It is plain, at least to me, that we don’t.
At the same time I am helping a grand-daughter in a podcast she is preparing on taxes and transfers as the key elements in Australian government budgets, and that provides a place to start. About two dollars in three of all the money raised through taxation go out to recipients in one form or another, education, health and social welfare being the main categories. Raising sufficient money to provide these transfers is perhaps the key problem for every Australian government. Like citizens of all countries, most Australians are likely to think that they pay too much in taxation and receive too little in the form of benefits. Most of us probably don’t have a good sense of how the taxation and transfer system actually works. There’s a good reason: it is highly complicated.
At the heart of it is the notion that we Australians have a civilised and therefore compassionate society. It can seem wrong that there should be beggars or homeless people, or that needed surgical operations can’t be done for months, or that it seems to take years for urgent infrastructure to be undertaken. We are a rich country, compared to other countries and compared to our own past. So, why isn’t something being done about [insert your favourite issue]? All government battle against these demands, finding placatory messages to soothe the questioners, and wrestling with the intractable problem of finding more revenue or reducing transfers without offending the electorate too badly.
As I’ve written in past essays, for example here, the modern social welfare system was invented by conservatives like Bismarck in Germany and later in Great Britain by the Marquess of Salisbury. They did so with an understanding of the appeal of Karl Marx’s ‘socialism’ to the large and growing industrial workforce, and a recognition that if they didn’t do something to bring the poor and disadvantaged in to a share of the new wealth created by technology and the Industrial Revolution, the society of which they were privileged members might suffer its own revolution. All Western developed countries made ‘social welfare’ a key part of national identity during the 20th century, and especially after the end of World War II. Given the great productivity of these societies over that time it has become possible to try to deal with every kind of disadvantage, and there are lobby groups in their thousands who seek to influence governments to do so. What we have is, if not a form of ‘socialism’, at least an aspect of what was seen in the past as the virtue of socialism. And in material terms our citizens are much better off than their counterparts in so-called ‘socialist’ societies.
At the same time, the system remains resolutely private, or ‘capitalist’, if you want to use that term, in most forms of production. Private mining companies, banks, insurance companies, oil companies and so on occupy the peaks of enterprise. Private property is guaranteed, at least to a degree. Yet the system is not a capitalist one. No Western country has a ‘free market’. There are all kinds of rules about what can be legally bought and sold, how the stock exchange system is to operate, how banks are to work, the responsibility of employers not just in occupational health and safety but in all manner of other areas of work — you name it. Australia’s is a highly regulated economy, and we have a highly regulated market. The battle of ideas between ‘capitalism’ and ‘socialism’ has produced a synthesis — the welfare state, which we take for granted. In Australia much of it is more than half a century old, some of it more than a century.
These key aspects of our system are not the ones that are subjects of much public discussion. Our politics is about what happens at the margin. A Royal Commission is currently looking at aspects of the banking system but not, I think, at whether we should have private banks at all. The ALP is proposing to change what is a small aspect of the tax system, to do with the notion of double taxation of company earnings. If you have shares — we have a few — and the company makes a profit then these profits are taxed. When you received your dividends they used to be taxed again, now as your income rather than the company’s. There is an unfairness about this, which is why, finally, that kind of double taxation was ended. There are arguments both ways, and it is not the subject of this essay. We need to remember, however, that in a properly ‘socialist’ economy there wouldn’t be private companies or dividends at all.
Let us move to immigration. Does the notion that we should care for one another, and do so through taxation and transfers, apply to immigrants? Whatever you think, we actually do so, and we do so to refugees too. Can we afford to do so, especially when these newcomers are not yet Australian citizens, and may not become citizens? Well, we are in debt, but we keep doing it. It would be much easier to fund such care properly if our population were steady, and not growing. It actually grows every year, by about a quarter of a million people, and mostly through immigration. If population increase were left to Australians making babies, our population would actually decline over time.
How well do we do in taking in immigrants and ‘asylum seekers’? Very generally, we take in about 200,000 migrants a year (I say ‘very generally’ because counting in this area is not straightforward, as you can see in the diagram below, where NOM means ‘net overseas migration’, and learn more about here.) We choose who comes, according to some rules, designed to help keep our capacity for welcoming new settlers at an effective level.
There are more than 40 million displaced person in the world, and most of them would like to go home rather than go somewhere else. Australia’s refugee policy is based largely on the UNHCR programs, and we take in 10,000 refugees or so for resettlement every year. They are all without doubt seeking asylum, and many have been in resettlement camps for years. Where that placed us in 2014 can be seen in the table below.
Both in terms of GDP and population size we are quite generous, indeed the world leader in 2014. We are less welcoming with respect to people who want to arrive here on their own initiative by boat or plane, bypassing the UNHCR system. There is a good reason for the difference, which has been spelled out by successive Australian governments: if we allow all ‘boat people’ in there will be no end to it. Australia takes in refugees through the UNHCR system, and does that well. In Europe, with all respect to the artist whose large work is featured in the Biennale, Australia’s tough border system for refugees is seen as effective, against the open border policy, largely articulated by Germany’s Angela Merkel, which has caused large social problems in most European countries, and led to some of them simply closing their borders to would–be settlers.
It is best to be clear about what we mean when we use words, especially when the words are much used in political debate. I finish with ‘Australia’, which can mean everyone living here at a given time, everyone who is a citizen or has been born here, all of them plus ‘permanent residents’, adults but not children, and so on. A million or so Australian passport-holders are overseas at any given time. It gets complicated, but it is important to be clear also about what the name of our country means when we use it in debate.