Transcript - World Today




ELEANOR HALL: Wayne Swan has written an opinion piece in response to the US Election saying that, Donald Trump’s victory sends quote, ‘a final warning to major Australian political parties’. Mr Swan spent several months earlier this year working a report into inequality and inclusive prosperity and he says the massive increases in wealth and power for those at the very top of societies like the US and increasingly Australia, pose a threat to democracy.

He joined me in our Brisbane studio.

WAYNE SWAN: Well I think it sends a warning not just to Australian political parties, I think it’s really a threat in many ways to democracy, in the sense that what we’ve seen is over thirty years is an increasing concentration of wealth, a hollowing out of the middle class and the creation of an army of working poor in the United States, and I think the message for Australia is don’t, please don’t, go down the American road of the application of trickle-down economics. It’s not only bad for the economy but it’s bad for the society.

HALL: So what lessons should the Labor Party take from this?

SWAN: Well I think the number one lesson is stay true to our Labor values, that our first and foremost interests are the economic interests of working people.

HALL: So are you saying that your party should follow Donald Trump’s lead or repudiate him?

SWAN:  Completely repudiate Donald Trump lead, Donald Trump is offering a more extreme version of trickle-down economics than we’ve already seen applied in the United States at various stages over the last thirty years.

He’s talking about further massive cuts to taxation for the wealthy, he’s talking about further deregulation, he's not talking about putting in place the essential building blocks of inclusive prosperity which depend first and foremost on making sure working people have a decent share of the product of their economy and their society. 

In the United States median incomes over the last 20 to 30 years have not moved, so people have faced real wage reductions and when you have an economy built on a shrinking share of the economy’s product going to working people, you have lower growth, you have lower optimism for the future and that sows the seeds of political polarisation and division.

HALL: Well Donald Trump is also though talking to working people of America saying he will put up tariff barriers, he will stop migrants coming in and competing for their jobs, the week after the Trump victory you and your Federal Labor colleagues have launched what you're calling an Australia First campaign against 457 visas, that does sound a little like following his lead there?

SWAN: Well we have been absolutely consistent on this question of 457 visa's and the fact is that from time to time when the economy is growing strongly you will have labour shortages and for 457 visas have been used correctly to fill labour shortages but what's happening now is the Government is not engaging in the labour market testing that is required, workers are being brought into the country to do low level jobs for which there are many Australian's who could do them and are available to do them so essentially the Government is attacking our industrial relations system from without by allowing a flood of people coming into the county on 457 visas.

HALL: The Prime Minister says this is breath-taking hypocrisy given the highest number of these visas were granted by Labor, he's right isn't he?

SWAN: Well they were up at the height of a mining boom. The mining boom is not there anymore and what we now know from the data that is coming out, this is driving greater inequality in Australia, is that many people in Australia are working less hours.

HALL: It's curious timing though isn't it, why are you now an Australia first policy?

SWAN: Well we've always had that policy when it's come to the policy architecture,

HALL:  You haven't called it that though.

SWAN: We have always argued this point and if you want to go through this material that I've put out in the past then please do, when jobs are all full and unemployment is low of course you bring in temporary workers, but when the labour market is slack, when people are looking for work and more hours of work then you adjust and that's Australia First, it's sensible policy and sensible economics. 

HALL: And you have been railing against trickle-down economics but Labor was the party that drove the deregulation and opening up of the Australian economy under the Hawke-Keating Governments, slashing tariffs, championing globalisation, are you saying that Hawke and Keating got it wrong?

SWAN: Not at all and that's an unfair characterisation. Underpinning the opening of the Australian economy, which I support, was the social contract put in place by Hawke and Keating and continued strongly under Rudd and Gillard, that is an absolute commitment to a strong and decent industrial relations system which shouldn't be undermined by the importation of labour, a commitment to universal access to affordable health and education, and a progressive tax system backed up by a transfer payments system.

What the Government is on about is trickle-down economics, it wants to attack the social safety net, make the tax system more regressive and deregulate the labour market, there's a huge difference.

HALL: The Hawke and Keating Governments may not have called in trickle-down economics but they did talk about globalisation and the benefits of opening up the economy flowing through down to workers even though at the same time it meant that there industries were undermined.

SWAN: There are things like technological change, a change in the centre of growth and balance in the global economy. Governments have to respond to all of these things. 

We are a great trading nation that prospers from trade, but trade needs to be both fair and free and increasingly many of these trade agreements have not necessarily been fair, although they've been free. So we need to run the ruler across these trade agreements, so we can see that the net balance is good for the country, there is nothing new in that.

HALL: So are you saying the Hawke and Keating Governments didn't get it wrong by somehow deregulation has gone off track?

SWAN: Well we didn't deregulate the labour market. Which is what -

HALL: You deregulated the entire economy. 

SWAN: No we didn't, well let's just go through it, the finance system was freed up but it still took place within a very strong framework of regulation, the fact is that we have kept the key elements of regulation and the key elements of government involvement in the economy to protect working people in place, whereas in America over the past 30 years most of those have been swept away and as a consequence the middle class in America got smashed and they created an army of working poor.

HALL: Are you positioning yourself as an alternative pillar of economic policy in the Labor Party with a less market orientated approach?

SWAN: Not at all, if you go through what I've written, what I did as Treasurer all of this is entirely consistent. 
What I want to do is use the experience I have as Treasurer for six years to talk about these issues because I've seen them inside out, I've seen them through the inside of the Australian economy, I've seen them through the G20, I've seen them play out around the world. I've been writing about them and I've been an activist about these issues all of my political life and now that I am a backbencher I have a bit more time and a bit more freedom to express my views.

HALL: You also write in your post-election opinion piece, that quote ‘shoving progressive issues like same-sex marriage down working people's throats is also driving worker anger’, are you saying that your party should step away from same-sex marriage

SWAN: Not at all, what I'm saying is we’re a Labor Party, the people who support us and look to us to protect them want to hear us talking about their economic circumstances and our plans for the future. They get a bit disillusioned when they hear us talking about other things and they sometimes think that we don't hear the broader message on the economy. 

I'm a very very strong supporter of making sure we have gender equity and racial equity in this country and the Labor Party will never step back from our principles in that area but people do want to hear from the Labor Party, consistently, a strong message about the economic success of our economy and what it means for working people, and I’m just making the point in this article is that sometimes that message is drowned out by a concentration on the other issues. 

We have a very strong record of progressive reform in social policy areas and we should keep doing that but we just have to be mindful that the message about the economy, fairness, and growth doesn't get lost.

HALL: So you do think that the Labor Party needs to change its message if not its policies?

SWAN: No, I think by and large we are heading in the right direction but I'm a backbencher now and I'm free to express my views more strongly in the areas that I think are important and I think the party is heading in the right direction

HALL: Wayne Swan thanks so much for joining us.

SWAN: Thank You.