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Winter 2004 cover

National Observer Home > No. 61 - Winter 2004 > Editorial Comment

Mr. Mark Latham and Mr. John Howard

Mr. Mark Latham has been elected as leader of the Parliamentary Labor Party, so that he is expected to be opposed to Mr. John Howard in the next Federal election.

Mr. Howard's policies are unlikely to depart substantially from those he has adopted in the past. However Mr. Latham's policies are not clear, and it is appropriate to raise various specific issues that he must face.

Constitutional Monarchy or Republic?

Mr. Latham has indicated that he wishes to raise again the republic issue. A proposal for a republic was defeated comprehensively in all States as recently as 1999. Prima facie, therefore, this issue should be allowed to rest for the time being.

Mr. Latham's tentative plan is to have a plebiscite in general terms, so that, as he hopes, a majority will express "in principle" agreement with a republic. Then the fact of "in principle" agreement will be used by supporters of a republic in order to induce electors to vote for a specific republic model that they might otherwise not have adopted.

It appears nonetheless to be probable that any new republic model will involve a directly-elected president. Many moderate republicans do not favour this course, since they apprehend that a directly elected president would detract from the power or influence of an elected government. Hence it is by no means clear that, even if a favourable plebiscite in general terms had been obtained, this republic model would receive approval in a majority of states or among the total of all electors, as the Constitution requires.

It should be remembered that the basic opposition to a change towards a republic should be based, not in any sentimental attachment to the Royal Family, but in national security and the protection of the Australian Constitution. The Queen is happily remote from political machinations and intrigues in Australia. She takes careful and impartial legal advice from her own advisors whenever she is requested to take any step that might in any way be controversial. Her apartness is a guarantee of probity.

But what might be the position if Australia were encumbered by a President Whitlam, or a President Fraser, or a President Keating, for example? There would be a general apprehension, which might in some cases be well based, that the president was in league with former political allies or that he might be subject to other kinds of political pressure. The identity of future presidents could not be known in advance, since popular votes might favour quite bizarre and unsuitable contenders. Indeed, it is virtually certain that over a future period some presidents would be chosen who would disappoint even their supporters and behave in an undesirable and damaging manner.

All of these matters should be taken into account in any decision whether or not to change our present system. In particular, Mr. Latham should consider them very carefully before attaching himself to a divisive and potentially dangerous cause.

Union Power and Influence

Over the past several decades the influence of unions has fallen somewhat, as has their membership. But unfortunately there is still much to be done to improve industrial relations and enable Australian industry to be more competitive.

The present system of industrial awards is not helpful. Too often awards contain provisions that promote inefficiency or burden employers whilst providing minimal benefits to employees. Further, it is by no means clear that, even in regard to wages, employees are in general better off than they would be if there were no awards but instead an ordinary contractual system. Further, employers are presently burdened, by awards and legislation, so as to be required to provide many benefits that are in the nature of social welfare, although if social welfare assistance were appropriate in any particular case it should be provided by government, not by private individuals. And there is an indefensible asymmetry in the fact that an employee may terminate an employment on one week's notice but an employer can not.

An example of objectionable tactics by union officials is now found in attempts to force non-unionists to pay amounts to union officials on the spurious argument that they should do so because they "benefit" from awards negotiated by union officials. But in fact it is often the case that these awards provide less favourable conditions than the non-unionists could have obtained in the absence of the awards and that the awards sometimes even cost non-unionists their jobs by imposing uncommercial conditions.

The reform of Australia's industrial relations is central to Australians' standard of living and competitiveness.

Hence it is important to know where Mr. Latham stands on these issues. If he is weak, he will allow himself to be influenced by union elements of the Labor Party. These union elements represent primarily the interests of the paid union officials themselves, such as union secretaries. These officials wish primarily to increase union membership, and hence increase their own salaries and importance. And they press unhelpful industrial demands regardless of efficiency and productivity and the long-term interests of the members.

Mr. Latham must show unequivocally and unambiguously that not only will he not act as an instrument of union officials, but that he will take active measures to reduce their powers and influence within the Labor Party.

Taxation and the Burgeoning State

Some months ago Mr. Mark Latham criticized Australia's high tax regime and indicated that various rates, including those on higher incomes, should be reduced. In this he was of course correct, and these matters are discussed in an important article by Dr. Geoffrey Walker.1  There are now indications that under pressure from backward-looking members of his party he will leave Australia's outmoded system largely untouched.

Real reform of Australia's taxation system is needed. The pseudo-reform of Mr. Peter Costello has now been revealed as deceptive. It will be recalled that National Observer was the only publication that at the time opposed the introduction of a goods and services tax, especially one without a permanent correction of the income tax rates. With the passage of time it has become clear that the nominal income tax adjustments of Mr. Costello were negated by bracket-creep, and the result of Mr. Costello's so-called reforms is now merely the introduction of a complex and burdensome new tax, the G.S.T.

Will Mr. Latham show leadership, and the gratitude of taxpayers now and in the future, by for example decreasing the maximum tax rate of nearly fifty per cent?

If Mr. Latham is able to show himself to be genuinely opposed to union pressures and to be a genuine and staunch supporter of true tax reform, he will advance his prospects of becoming Australia's next Prime Minister. But in view of the attitudes of his colleagues he will need to go much further in distancing himself from them than he has so far indicated.


1. See pages 15 et seq., infra.

National Observer No. 61 - Winter 2004