CPA - The Guardian

“It wasn’t long ago that Rudd was saying the Liberal Party’s economic policies had brought world to the ‘edge of an abyss’,” and “here he is appointing the number one neo-liberal free market extremist to the board of the Future Fund.” This was the public reaction of Malcolm Turnbull, leader of the “Opposition”, who could not disagree with Peter Costello’s appointment. After all, Peter Costello was the Coalition’s Treasurer from 1996-2007 and one-time parliamentary leader of the Coalition. The Future Fund was set up by the Howard government to provide income to fund future superannuation payments of public servants, and now has over $60 billion under management by a board of “experts” from the private sector. Its assets came from budget surpluses (cuts to social welfare, etc) and the privatisation of Telstra.

This is not the first such break with tradition of “jobs for the boys” who have served the Labor Party loyally. Prime Minister Kevin Rudd upset prospective Labor candidates when he appointed another former Liberal Party leader Minister Brendan Nelson as ambassador to the European Union and former Coalition Senate leader Robert Hill who also held office as Defence Minister and then Environment Minister in the Howard government as head of the Carbon Trust.

Former Labor PM and Treasurer Paul Keating lashed out making the point that it was disloyal to all those members of the Labor caucus who stood and fought Costello. He also took a swipe at Costello’s credentials, saying that he presided over the growth of Australian foreign debt from $129 billion to $705 billion as Treasurer.

Before entering Parliament Costello was a founding member of the ultra-Right HR Nicholls Society and a key figure in the New Right whose policies he pursued in government. Before entering Parliament he gained a reputation as a barrister through the leading role he played in two historic, precedent-setting defeats for the trade union movement. The first was the successful use of the Trades Practices Act at the Mudginberri abattoirs in 1984 where the meat union was fined $144,000 over a picket and sued for $1.75 million in damages. The second, in 1985, was the Dollar Sweets case that saw a small union (Federated Confectioners Association) successfully sued under common law for damages ($175,000) resulting from a picket.

Costello is the antithesis of everything the labour movement has stood for and fights for today, but not to the right-wing leadership of the Labor Party. There is no contradiction here; Costello in Rudd’s eyes was a very successful Treasurer whose model of economic management, ideology and social reform program are being continued by the Rudd government.

Yes, Rudd has loudly proclaimed that Labor is a social democratic party, and called into question the neo-liberal orthodoxy that had prevailed over the past 30 years. He spoke out strongly: “the international challenge for social democrats is to save capitalism from itself”.

He described neo-liberalism as “that particular brand of free-market fundamentalism, extreme capitalism and excessive greed which became the economic orthodoxy of our time.” (“The Global Financial Crisis”, The Monthly, February 2009) He has even made noises about being Keynesian. But we should judge Rudd and his Treasurer Wayne Swan by their actions, by their policies and now by their appointments.

Policy-wise the Labor government is neo-liberal through and through. They are charging full-steam ahead with privatisation, deregulation and free-market policies. The education revolution is about privatisation of education, the reforms to health are about privatisation of health care and Medicare, the Henry tax review is to lay the basis for the rolling back of corporate and income taxes and the further dismantling of what is known as the “welfare state”.

From the Fraser/Howard Coalition government, the Hawke/Keating Labor governments in the 1980s and ’90s through to the Howard/Costello Coalition and now Rudd/Swan regime, there has been remarkable continuity in economic and social policy direction. All have pursued the conservative policies of Milton Friedman, the programs of the Organisation for Economic Development, the International Monetary Fund and World Trade Organisation. At first they were referred to as structural adjustment programs, and later as economic rationalism or neo-liberalism.

At the heart of these scorched earth policies is the transfer of wealth and power to the largest transnational corporations, the retreat of governments and the state from their role in economic governance and responsibility for the well-being of their people. When the global financial crisis and subsequent economic crisis hit, the Rudd government stepped in to play its part in bailing out the capitalist system with its temporary, multi-billion dollar stimulus packages, bank guarantees and other assistance to “save capitalism from itself”.

When Rudd says Costello is best the man for the job, he means it. It is time to end the two-party, one ideology system and set about real changes of benefit to the people.

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