According to Treasurer Jim Chalmers, increasing competition among supermarket giants will help deliver lower grocery prices: “If it is more competitive, more transparent and people are getting a fair go, better outcomes will be seen at the supermarket checkout“.
The ACCC also notes that competition encourages innovation.
But where enhanced market competition can lead to improved consumer outcomes, enhanced political competition can lead to improved citizen outcomes: the former through lower prices and better quality, and the latter through lower taxes and better services.
And just as those in the commercial sector prefer less competition, so too do the players in the political sector; the dominant political parties frequently colluding to modify electoral laws to defend their incumbency.
The Albanese government, while pursuing a business competition reform agenda, is also surreptitiously running an electoral reform agenda which will have the opposite effect, reducing political competition.
Australian states and territories used to compete on policy and tax rates, acting as “laboratories of democracy”
In his 1776 magnum opus The Wealth of Nations, the father of economics Adam Smith wrote, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
This quote is often used to describe the potential for anti-competitive behaviour within business. However, with politics now more of a trade than a calling, Smith’s description equally applies to our elected class—a group that regularly meets, often for merriment, in a well-appointed building, to conspire against the Australian public.
While Chalmers and Assistant Treasurer Andrew Leigh pursue new competition law amendments claimed to “make our economy more productive, more dynamic, and more competitive”, Special Minister of State Don Farrell is developing plans to make it more difficult for small parties and independent candidates to compete in the political marketplace. Farrell even recently stated that “the Westminster system provides for a two-party operation.” A duopoly that is.
Recently also South Australian Premier Peter Malinauskas proposed to ban electoral donations. Were such a reform implemented, it would further privilege and embed the major parties by making it exceptionally difficult for new parties to emerge. Raised barriers to entry lead to reduced competition.
Political parties are exempted from many important laws including privacy and the proposed mis- and dis- information laws. This makes their perpetual assault on political competition and concentration of political power even more nefarious.
At a time of declining support for the major parties as measured by first preference voting and polling, the major parties continue to work together to maintain their political duopoly.
Although the latest electoral proposals are being driven by a Labor Government, the Coalition also has dirty hands. In 2021, the Coalition government passed laws, with Labor’s support, to shorten pre-polling periods and force the deregistration of some minor parties. As part of this the major parties confiscated the words “liberal” and “labor” from the political lexicon, perpetually vesting these terms in themselves.
Even Gough Whitlam’s grand dream of fixed four-year electoral terms has received bipartisan support with both John Howard and Peter Dutton offering endorsement. Extended terms transfer power from the people to the elected with no recourse, such as binding citizen-initiated referenda (as occur in Switzerland) or recall elections (as occur in the US).
It was not always thus. Over recent years, our neo-professional political class has increasingly and incrementally colluded to raise the barriers to entry for alternative parties and candidates. This has contributed to a homogenization of personnel and policy, making the differences between the average Labor and Coalition candidate barely discernible to the average voter.
For all the talk of diversity, this homogenization has led to much reduced experiential, cognitive and policy differentiation among politicians. Many members of our parliaments, irrespective of party, gender, race, sexual preference or religion, follow similar educational and pre-parliamentary career paths. While elected governments may change, there is a consistent trajectory of permanent government expansion and price rises through ever higher taxes.
Since the turn of the millennium, it has been bipartisan policy and practice to increase spending, taxes, and the volume of regulations to ever greater levels. The assaults on civil liberties and the crowding out of civil society similarly continue unabated.
But where enhanced market competition can lead to improved consumer outcomes, enhanced political competition can lead to improved citizen outcomes
It is not just a reduction of competition at the political level. There has been a long-term de-federalisation project to aggregate power in Canberra; a manifestation of the French “disease” described by Alexis de Tocqueville as the tendency to concentrate authority in central government; something Tocqueville believed to be detrimental to political and social health.
Australian states and territories used to compete on policy and tax rates, acting as “laboratories of democracy”, a term coined by US Supreme Court Justice Louis Brandeis. Death duties in Australia were abolished not through some fiat from Canberra but because of competition between the states and territories.
However, today some 81 percent of total tax revenue is collected by the Commonwealth, leading to policy centralisation and standardisation. Matters constitutionally the provenance of the states, such as health and education, are now increasingly directed out of Canberra; fidelity to the intent of the Australian constitution and of tax and policy competition be damned.
Just recently, the United States celebrated 248 years of the signing of the Declaration of Independence. Drafted by Thomas Jefferson, it included this famous sentence: “… Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government”.
Just as politics is downstream from culture, policy is downstream from politics. It’s time to change the way politics is done in Australia.
