ECONOMIC POLICY

1) Preamble

The on-going development of economic policy is basic to the PLP program. It is the major instrument through which a socialist transition can be managed. Our first objective will be for the Australian people to gain control over their economy.

This democratic project is intended to build a strong and basically independent economy together with a firm commitment to regional and international obligations. The PLP will work towards solidarity with working and oppressed people and governments who share our ideals. The PLP's notion of economic self-determination contrasts with the isolationism and populist racism of those who define self-reliance in other ways.

We will co-operate with unions, small business, small family farm enterprises, government and cooperative finance, and relevant community and local groups. We will act to prevent any exploitative practices of national and transnational companies.

With these principles in mind, the Party will work towards building a new democratic socialism, specific to Australian history and conditions.

2) Policy Aims:

• a shorter working week (35 hours) without loss of income;
• a guaranteed minimum living income for all adults and for those under 18 years without adequate means of support.
• full, adequate funding for public education, health, transport, housing and means-tested legal aid.
• the creation of full employment for all who seek secure work,
• halt to the privatisation of public assets, including Crown Land.
• reclaim key privatised components of the public sector;
• re-regulation of the finance sector.
• repeal the National Competition Policy.
• withdraw from those various world trade agreements which undermine our national sovereignty.
• reject the free trade ideology at both national and international levels and follow a policy of new protection instead of free trade.
• regulate agribusiness and support small and medium owner-farms and encourage the cooperative and collective sectors;
• protection for selected industries and enterprises which conform to environment, labour and other conditions.
• halt and close down all uranium mining, and charge owners with rehabilitation costs of all sites.
• restructure ownership of key resources by nationalising those industries which are necessary for a strong, self-reliant infrastructure.

Transition Period to Socialism.

In the transition period, however, the types of business making up the economy will include foreign firms, local privately-owned large and small firms, worker-owned cooperatives and government-owned enterprises and services. All will be welcomed but will be required to meet the government employment and environmental conditions, and all transnational companies, whether foreign or domestic, will have to meet ownership rules, tax regulations, borrowing regulations and other requirements.

3) Policy Instruments

1. Taxation policy will be used to both generate income for necessary expenditure and to re-direct production and use of productive resources.
2. Budgetary Policy will be recast to take into consideration the longer-term nature of our economic aims.
3. Progress will be measured using social and environmental indicators, not just economic indicators. Further research on a genuine progress indicator will be carried out.
4. A PLP Government will:
   • utilise a fair, steeply-progressive tax on private and business incomes, with a substantial tax-free threshold and high rates for above-average incomes,
   • utilise progressive asset taxes, like wealth, inheritance and death duties,
   • reject general consumption taxes, such as VAT or GST, because they fall heavily on the poor , the unemployed, and the elderly,
   • close tax loopholes, including TNC transfer pricing arrangements,
   • tax movements of speculative finance, by adding a tax on such transactions as proposed by Nobel Prize winner James Tobin;
   • use tax incentives schemes to create secure and socially productive forms of employment,
   • use tax incentive schemes to re-direct resources towards key, strategic investment and away from unproductive and wasteful investment,
   • use tax incentive schemes to encourage environmentally sustainable production.
5. Public savings from halting wasteful practices will be used for the common good.

   Practices to be stopped, include, amongst other things--

   • excessive salaries for both private and public executives;
   • public funding of private education and private health facilities;
   • tax minimisation schemes used by individuals and companies;
   • tax write-offs for equipment which encourages premature obsolescence;
   • other counter-productive tax incentive schemes.
6. A National Planning Committee will be established to take responsibility for investment and industry planning, and to ensure the role of the Foreign Investment Review Board (FIRB) complements domestic investment decisions. Democratic producer involvement in decision-making will be built into the work of this committee and it will oversee the re-establishment of democratically-run primary commodity boards.
7. A PLP government will investigate new budget accounting to include a GSP (Gross Social Product?, or GPI: Genuine Progress Indicator?) and the division of the budget into consumer spending and capital investment which could be financed by loans from the Reserve Bank.
8. Selective trade protection measures, like tariffs, import quotas, bi-lateral agreements, will be used to :
   • create full employment,
   • create industrial self-sufficiency in strategic industries,
   • encourage the meeting of environmental and labour standards, both nationally and internationally,
   • encourage and support specific types of business ownership, for example small and medium owner farms, and co-operatives, and encouraging the involvement of workers in planning and production.
9. The PLP will demand and work towards the reformulation of the World Trade Organisation (WTO), to incorporate environmental, human and labour rights in a strong social charter. The PLP will also oppose the implementation of some international agreements such as General Agreement on Trade in Services (GATS) and the Multilateral Agreement on Investment (MAI), which endanger democracy and reduce economic self-determination, threatened by transnational companies. Achieving these goals requires the co-operation of the international working class.
10. Control over foreign investment will be enforced to regain a higher degree of economic control. Such investment will be used for nationally agreed economic and social purposes.

    To this end the powers of the FIRB will be strengthened so that it can :

    • have access to all information it requires to keep a full register of all types of foreign investment,
    • regulate the types of investment allowed, especially in agribusiness, so that investment is directed toward safe, environmentally sustainable production, rather than profit-taking,
    • regulate the flow of investment and profits, so that inflows and outflows are directed towards job creation and/or preservation.
    • Set up a Code of Business for all transnational investment, with powers to de-register companies.
11. The PLP will nationalise over time, and/or ensure public ownership or control key sectors which will be essential for the economic, social and environmental infrastructure, and so strengthen national economic control.

    This includes

    • incorporate the telecommunication infrastructure into the national public sector
    • retain and/or reclaim essential rail and road networks into the public sector
    • retain and/or reclaim all power and natural resource industries, like water, electricity, minerals and gas, into the public sector;
    • retain ownership and control of educational, health, welfare, and employment services.
12. A National Development Bank will be established to make low cost loans available for specific industries and business projects which meet environmental, technological and labour conditions criteria.

    These will include:

    • nationally strategic industries,
    • small and medium size farmer-owned, environmentally sustainable rural businesses, cooperatives, small producers and community groups,
    • projects to reclaim degraded resources.
    • cooperatives and small producers,
    • other socially useful businesses and those which create employment.
    The Bank will be charged with the responsibility for loans to local and regional governments for the development of social infrastructure, like health, transport, education.

     

13. The PLP Government will re-regulate the financial sector, and the delegated powers of the Reserve Bank will be strengthened. The PLP government will ensure that it controls the finance sector and the rate of currency exchange. The Bank 's monetary policy will be directed towards the creation of full employment and stability in interest rates and local currency.
14. The PLP rejects National Competition Policy

"Practically everyone agrees that there are social and economic functions which the state alone can perform; that there are others which it is more qualified to perform than any other association; that there are others for which it is less qualified and, finally, that there are functions which the state is wholly incapable of performing" (McIver, 1965)

Australia now has a huge foreign debt, no industry policy and increasing political instability without serious reform on the horizon. The PLP's position is that Government can and should play a very productive role in society. The PLP rejects economic rationalism and the privatisation of important national agencies and key industries.

For that reason the PLP also rejects the adoption of the National Competition Policy, enshrined in law as the Competition Policy Reform Act (1995) and implemented by the National Competition Council. National Competition Policy, initiated by the Hilmer Committee (1992), is claimed to lead to massive savings, more jobs and a new prosperity. The policy is rooted in Friedman's economic principles and applied by the Thatcher and Reagan governments. The evidence increasingly demonstrates the serious flaws in that thesis which is premised on the commodification of labour and the mistaken belief that the market place is capable of delivering benefits that it cannot deliver.

A further consequence of National Competition Policy has been that Australia becomes increasingly vulnerable to take-overs by global TNCs with the inevitable result that the small national government would be increasingly powerless domestically as well as globally. Globalisation has many meanings. For economic rationalists globalisation means elevating the role of TNCs greatly and reducing that of the national state to that of a subservient player of little significance. Such a development will obviously also reduce the power of the people over decision-making, nationally and internationally. The notion that a small, cloutless government can still continue to exercise adequate controls over a massive private sector, advanced frequently by the supporters of privatisation, is seriously flawed

Instead, the PLP argues that Australia should look towards the enterprising national state for solutions to the country's problems. The PLP also regards a strong state as a prerequisite for Australia to play a significant role globally in advancing human rights, opportunities to advance the interests of the working classes and disadvantaged peoples in other countries, and in protecting the environment.

4) Further Detailed Economic Policies