Political Parties Hollowed Out and Identity Issues

Australian politics as with Trump’s America and U.K.’s Brexit has become hollowed out with declining membership, less organic policy development, more reliance upon both external policy development by trans national think tanks and promotion or opposition by media or PR.

An enforced focus upon immigration, population growth and refugees, or white nationalist issues, may risk bi-partisan support and ignore the immigrant heritage of Australia versus aggressive demands for a WASP white Anglo Saxon protestant and Irish Catholic culture to rule.

Brexit, Trump and Australian politics have obsessed about immigration.

Populist Politics and White Nationalism (Image copyright Pexels).

This is especially so among the less diverse above median age vote in regions, while Australia’s elites in business, government, politics and media also reflect the same mono culture or lack of diversity.

Further, positives and benefits of immigration are seldom cited and especially the leveraging of temporary resident churn over; whether students, backpackers or temporary workers who are net financial contributors supporting the tax base, vs. ageing and increasing proportion of pensioners or retirees in the permanent population.

From The Lowy Institute:

Hollowed out, but not unhinged

Judith Brett

The scenario put forth in Sam Roggeveen’s “Our very own Brexit” runs counter to the major parties’ economic realities.

Sam Roggeveen has written a lively essay on the current state of Australian federal politics, centred on the hypothetical scenario that one of the two major parties takes an anti-immigration policy to an election, overturning Australia’s post-war bipartisan commitment to immigration to gain political advantage. Such an election would be a referendum on continuing population growth, and bring to a halt our cultural diversification and our integration into Asia, which is now the largest source of permanent new settlers.

It sounds unlikely, but as Roggeveen argues, both Brexit and the election of Donald Trump were unlikely, rogue events that have overturned political assumptions. His scenario is not a prediction, he stresses, but a plausible, worst-case scenario arising from the current state of our political parties.

Our two major parties have become “hollowed out”, Roggeveen argues, untethered from their traditional social bases in class-based interests. Party membership and party loyalty have declined, leaving a more volatile and skittish electorate potentially vulnerable to the anti-immigration siren song of a party desperate to gain electoral advantage.

There are two parts to this argument. The first is that the parties have become hollowed out; the second that it is plausible that one of the major parties break the bipartisan support for the migration program.

First, the evidence is clear for the decline in rusted-on party loyalty.

However, Roggeveen does not, to my mind, have a sufficiently nuanced understanding of the reasons for this decline and writes as if it is mainly the result of a deficient political class.

In the early 20th century, when our current party system took shape, it made social and economic sense to have two parties based on two class blocks. Working and middle class, employee and employer, labour and capital – these spoke both to people’s everyday experience and sense of themselves and to competing economic interests. This is no longer the case. More than a hundred years later, Australia’s society and its economy are much more complex.

In developing their policies, parties have to broker compromises among various competing interests, and this undertaking is much harder today. To take a stark example: the problem Labor has in developing policies responsive both to its traditional union base and to the middle-class social democrats who flocked to the party with Gough Whitlam. Compared with the early 20th century, lines of class division have blurred, and new lines of difference have been politicised: gender, race, ethnicity, attitude to nature, and, after the fading of sectarianism, religion again. If the parties are failing, it is in part because the task of uniting disparate constituencies is harder…..

……Second, I do not find it plausible that one of the major parties would break the bipartisan consensus on immigration.

A minor party might succeed with an anti-immigration policy, but neither major party could afford the electoral risk. The 2016 Census reported that 49% of the Australian population was either foreign-born or had at least one foreign-born parent. Not all of these people will be on the electoral roll, but all who are citizens will be, and once on the roll, they will have to vote.

Because of compulsory voting, Australian parties do not need highly emotional and divisive policies to get out the vote, and to support them carries considerable risks. Both Brexit and the election of Trump occurred in polities with voluntary voting, where it makes electoral sense to risk courting an alienated minority. There is no doubt there is a nativist faction in Australia that would support a stop to immigration, but Australian elections are won and lost in the middle, which is occupied by increasing numbers of foreign-born voters and their children.

Also holding the major parties to their consensus on immigration is its contribution to the economy. Australia’s recent sluggish economic growth would be even slower were it not for migration. The housing and retail sectors in particular would be sharply affected by its halt. Our two major political parties may be untethered from their historical social bases, but they are not unhinged from contemporary economic reality.’

 

For more articles about populist politics, demographics, immigration and white nationalism click through.

 

Pension Systems and Budget Sustainability

As populations age and work forces decline i.e. few taxpayers contributing to budgets, pension systems have been subjected to conflicting needs.  This includes preserving the tax base into the long term while catering to ageing electorates, in some cases dominated by pensioners or retirees.

State budgets are coming under more pressure to support pensioners

Pension and Budget Sustainability (Image copyright Pexels)

Following is an overview of the top five most sustainable systems including Australia which is a hybrid of state asset tested pension and the still developing private pension of superannuation system.

Further, an essential part of supporting the tax base is to use temporary residents churn over of international students, backpackers, temporary workers etc. as net financial contributors.

From The Nation:

‘Global top five most sustainable pension systems

WITH pension contributions expected to rise globally, a number of nations have developed models to reward their workforce for life after retirement.

As the retirement age and life expectancy continues to rise around the world, having a sustainable pension scheme is more important than ever

Thanks to gradually rising life expectancy and a higher state pension age, pension contributions are set to soar around the world. World Finance explores the top five countries with sustainable pension systems, where retirees can live particularly well with their pension pot.

Thanks to rising life expectancy and a higher state pension age, pension contributions are set to soar

Australia

Australia’s three-tier ‘superannuation’ pension system is one of the most touted in the world. It includes a tax-financed age pension, providing basic benefits, a company pension pot and the individual contribution to a retirement savings account. Employers are required to contribute 9.5 per cent of worker’s gross earnings, which totalled AUD2.3trn ($1.8tn) at the end of 2017.

Canada

Canada provides its workforce – especially low-income citizens – with the Canada Pension Plan, which is a universal flat-rate pension plus a supplement based on income. Voluntary pension plans were also recently introduced, and from 2019 until 2025, workplace contributions will increase by one percent to 5.95 percent.

Denmark

The average Danish pension pot is well funded due to its ‘folkepension’ – a universal pension scheme ensuring that pensioners receive a basic retirement income. One notable result of Denmark’s successful system is that, according to an OECD 2017 report, its private pension assets represented 209 percent of Denmark’s GDP in 2016.

Germany

Germany’s pay-as-you-earn state pension makes up its main retirement system, which provides a safety net for low-income earners. Occupational pensions are not compulsory but approximately 60 percent of all German workers participate – a number that is expected to grow in the coming years.

Switzerland

Ranked sixth in the world in 2017 by Mercer’s Global Pension Index, Switzerland’s public pension primarily depends on workers’ earnings. Conversely, the compulsory organisational pension depends on a worker’s age – meaning that with age comes a larger contribution. Swiss insurers and various banking foundations have also put voluntary schemes in place.

 

For more related blogs and articles on demography, economics, populist politics and younger generations click through.