Annus horribilis for neoliberals.

• Jurisdiction: Australia
• Author: Gleeson, Brendan
• Date: 22 December 1999

To them that hath ...

Australia, January 1999: a sizzling economic growth rate of five per cent; record corporate profit levels; soaring productivity; a financial sector largely untouched by the Asian crisis; declining levels of public debt; a national budget in surplus; a consumer spending spree; low nominal interest rates; minimal inflation; and a baby bull stockmarket cantering after its US sibling.

Blue skies beckoned. A dawn chorus of economists heralded the arrival of 'good times'. This time, they carolled, growth was secured: Australia had learnt from the mistakes of the 1980s. Painful but necessary reforms had 'firewalled' the economy against the inevitable eruptions of the global trade cycle. The chorusing continued: just look at how well we weathered the firestorms of the Asian meltdown!

This happy paean neglected storm clouds gathering on the macro horizon, including a rapidly worsening current account deficit, ballooning consumer debt, extortionate credit card interest rates, a labour market failing to offer either a secure future or improved working conditions for most workers, and the ever present threat of redundancy extending right across the spectrum of employment. A few doomsayers pointed to trouble ahead. The boom was running on foreign confidence with a capital 'C' as banks borrowed a net $60 billion in thirty months to pump into consumption. (1) The likelihood of a 'major correction' on the US stock market continued to worry finance commentators into the new millennium. Economics commentator, Ross Gittins of the Sydney Morning Herald, aware that universal growth measures masked a myriad of inequalities, remarked dryly: 'To them that hath it shall be given'. (2) It was an open secret that not all were equal before the god of Growth. But the doubters were few and the faithful many.

In 1998 Prime Minister Howard had famously declared Australia the new 'strongman of Asia'. (3) Senior government ministers eagerly repeated the same macho refrain throughout the October 1998 national election and beyond. The appalling connotations of the 2metaphor were apparently lost on conservative leaders intoxicated by self-praise--East Asia's human rights activists have long characterized the region's dictatorial states as 'strongman' regimes. (4) Throughout late 1998 and early 1999, government ministers, together with a coterie of senior economic commentators, swaggered about on the international stage, parading the strongman, urging him to flex his muscles before bemused global financiers and foreign states. In braggadocio rich with masculinist anxiety, Australia's newfound muscularity was celebrated and its source--neoliberal reform--hailed as the tonic of success. Regular homilies from Australian commentators and politicians sermonized the declawed tigers on the evils of crony capitalism and the virtues of neoliberal governance.

Neoliberalism, the favoured creed of Australia's national and state governments for two decades, had apparently delivered the goods. After decades of 'necessary' pain, the country was told that it was awash with gain. But as the year wore on it was increasingly apparent that very few people were listening to the good-time tunes and even fewer were inclined to believe them. The political airwaves resounded with the blues of exclusion and betrayal.

Spectres at the Feast

The grassroots disenchantment with mainstream politics that rose to prominence in 1999 came as no surprise to many social scientists, welfare service providers and local politicians. All knew that the growth surge of the late 1990s had been obtained at an enormous social price. The benefits of expansion had largely accrued to the already wealthy, exacerbating socio-economic cleavages. In 1999 executive salaries rose twenty-two per cent to average $1.45 million in the top 100 companies. (5) Between 1993 and 1999, 'the share of the nation's wealth held by the richest 10 per cent ... increased by almost five percentage points, from 43.5 per cent to more than 48 per cent'. (6)

Moreover, the catastrophic ecological cost of growth was increasingly hard to deny. Vast quantities of nature have been consumed and despoiled in the scramble for riches. In late 1999, the strongman emerged from the international growth ruckus as the new global 'filthyman'. The Australia Institute calculated that Australians are now the highest emitters of greenhouse gases in the world. (7) While most of the wealthier countries agreed to reduce greenhouse emissions at the Kyoto Summit, Australia was granted the right to increase its emissions up until 2010 by eight per cent on 1990 levels. Current forecasts by the Australian Bureau of Agricultural and Resource Economics estimate that the increase will be nearer forty per cent. (8) At Kyoto Australia also persuaded the world to allow its diminishing rate of clearance of native vegetation to be included in the calculation. Instead, clearance of native vegetation in Queensland has proceeded at a rate higher than anywhere else in the world. (9) By the end of the century outback Queensland was ablaze with burning bush. In the Murray-Darling basin degradation of the land wrought by earlier clearances today threatens vast areas with salintiy and sodicity. Nevertheless, funding to 'green' groups was cut and environmental NGOs were left out of the delegation to the Seattle conference on the next round of trade liberalization. (10) The Minister for Forestry and Conservation, Wilson Tuckey, positioned himself as advocate for the timber industry offering money to keep mills open rather than 'exit money for unviable operations'. (11) Yet his crude advocacy did not impress people living in at least one forestry area in central Victoria where eighty per cent of locals (in a Morgan opinion poll) rejected the regional forestry agreement, preferring 'a deal in which woodchipping would end and the timber industry would be phased into plantations'. (12)

Two decades of neoliberal economic restructuring have bequeathed new geographies of advantage and disadvantage, marked by worsening socio-spatial polarization and intensifying locational disadvantage. The benefits of growth freed up by globalization, economic restructuring and technological change have largely flowed to major metropolitan areas, while the negative impacts of the same changes have been concentrated in rural zones, regional urban areas and the outer suburban tracts of the capital cities. Cutbacks to government social services and infrastructure provision have affected rural, regional...