Neo-Liberalism in Australia - Essay Example

Name : xxxxxxxxxxx Institution : xxxxxxxxxxx Course : xxxxxxxxxxx Title : Neo-liberalism in Australia Tutor : xxxxxxxxxxx @2010 Introduction The Australian government currently uses the neo liberalism approach in most of its adopted policies. Neo liberalism is an ideology that emphasizes that the attainment of economic liberalism can occur as a result of social progress. Adam Smith, (1776, p25) in his works highlighted that, the practice of neo-liberalism simply advocates for the elimination of government involvement in economic matters. Neo –liberalism can not simply be described as an economic structure but a philosophy that governs attitudes in society that tends to view the world as market metaphors. A metaphor that has social, economic and political implications to a state .He further highlights that the role of the state should be to encourage free trade, free completion and the elimination of barriers as the most effective strategy of enhancing economic and social development in society. This particular presentation aims at evaluating the Australian government policy in privatization of policing. Foremost the presentation will analyze two levels of government and further compare them with the concept of policing within the neo liberalism approach. In addition the scope of the report will also be based on the critique of the current policy by highlighting the strengths and the weaknesses, weaknesses and failings of the failings of the approach. Lastly the presentation will seek to compare the Australian neo liberalism approach with other available alternative approaches. Policing basically entails various assortments of services and functions that range from aspects of the community, responses undertaken by the law enforcement systems towards crime prevention and the general efforts or attempts to improve the quality of life of the citizens. When making an evaluation of two levels of government in Australia the federal government which is also the Australian national government implement laws formulated by the Australian parliament. The responsibilities of the federal government include, social security , industrial relations , foreign affairs , defense , currency control, trade and immigration just to name a few. The other level of government is the state government which is has a decision making body which is the state parliament. Each state has its own state parliament. The responsibilities of the state government include justice, health, education, forestry, and consumer affairs and motor and roads registration (Dick, 2000, p20-24). The similarities between the federal and the state government of Australia include the fact that both levels government are derived from the Australian constitution. Secondly both levels of government are run by a parliament or a council that is democratically elected. In terms of the aspect of practice, the two government levels usually corporate in various ways for instance the two levels of government have to debate concerning state issues such as revenue access and expenditure duplication functions which is a recurrent feature within Australian politics. In general cooperative action is required between both levels of government when dealing with state main state functions. The differences between the two levels of government include the aspect of difference in spending. The federal government utilizes a smaller spending amount within the taxes of the state while the state government has a higher allocation of spending due to the level of responsibilities held by the state government which require more funding (Tim, 1999, 44). When making a comparison of the notion of policing between the two levels of government, what is evident is that a growing body of literature acknowledges the central role played by neo –liberalism in policy formulation within the two levels of government. Bell (1997: 81, 116-7) bases his works on the aspect of neo-liberalism coalitions which united the main fractions of the Australian capital. He further highlights that the Australian government shifted from the Keynesian system in the 1970’ and introduced neo liberalism with an aim of raising its capital profitability. He also highlights that neo liberalism did not merely arise due to the crisis within the Keynesian ideology but rather as a result of the need for mobilization of certain fractions of capital with the basic aim of effective policy making. Key government institutions such as the federal and state government therefore utilize the neo –liberalism approach in policy formulation and implementation. For instance Castles (1985, p16) indicates that initially the task of formulating policies for workers compensation in Australia rested mainly within the state government. This highlights the federal nature characterized by the Australian constitution. However the workers compensation area has experienced many challenges over the years, as a result the government has sponsored many inquires the latest being the 2003 federal government productivity commission which proposed the development of a national framework of compensation that has a compensation authority model however the state government should be in charge of building systems and cultural practice. The Australian federal government also utilizes the neo liberalism approach it the formulation and implementation of various policies for instance when evaluating the area of state defense basically within the police department whereby neo liberalism has been used to undertake Privatization within the police department which occurs in areas such as investigative services , surveillance systems , parameter safeguards and risk management. In the current Australian society, the public has come to a realization that the police department to some extents have limited capability in dealing with crime and therefore they have decided to take matters on their own hands by acting as private security agents by taking part in block watches, citizens foot and mobile patrol and creation of networks for radio alerts. The law has further given permission to private citizens to carry weapons. The factors stated above indicate that the police department does not monopolize the aspect of public safety. Furthermore privatization has continued to expand as the police departments have offered contracts to privately owned agencies for various services such as prisoner custody, court security maintaining of the communication systems, parking and traffic control and video surveillance. The difference in the application of the neo liberalism theory between the two levels of government can be rated in terms of spending powers, the federal government spending is usually diminished unless it obtains support from the state governments, especially the Northern states which are Queensland and Victoria. Rainnie and Grobbelaar (p68) highlight that there is a difference in spending between the two levels of government whereby the Australian state governments spend 68% of the taxes while the federal government spend 38% of the taxes as a result the differences in spending also highlights the difference that exists in terms of the adoption of the neo –liberal approach. The state government has therefore a higher stake in the privatization of policies. The main reason for the difference is attributed to the difference that exists in state responsibility; the state government has much more responsibility such as public transport, education, health and many other sectors which require expensive expenditure and a higher volume or level of employment outcomes. The strength linked to the Australian adoption of the neo –liberalism approach include the fact that Australia being one of the Modern economies based on capitalism is signified by phases and cycles , which include phases of transformation and growth . It is therefore essential to try and describe the characteristics of the present expansion phase. Since 1992 Australia has generally experienced a period of sustained economic expansion, prosperity and growth without interruption .The relative expansion and growth of the long phase has been a debatable issue when trying to analyze the reasons why Australia has had such an experience, whereby a phase of growth occurs even without a slight experience of recession. Indeed the country underwent a period of 16 years without any sort of even a quarter recessions. Furthermore the growth experienced by the country was actually across every state in the country (Woodward, 1992, p 207). Another strength linked to the neo-liberalism approach includes the fact that certain specified functions can occur only within the existence of neo-liberalism framework. Gray & Geoffrey, (2005, p3) highlight that the privatization of policing is a concept that typically occurs both on the spending, production and the raising side. They further highlight that when it takes place on both sides, private institutions or citizens usually raise the funds for the services to be provided publicly and also determine how the particular services will be allocated, Certain tasks or functions can only arise within the existence of a free market which gives chance to individual and private institutions the opportunity to formulate their own business practices.. For instance a good example is within the field of psychological-test coach. In most of Australian firms the assessment intensity has risen, and firms now frequently utilize psychological tests for the selection candidates, even within the intermediate job levels. As a result ambitious candidates may tend to pay for training, in order to succeed in the psychological tests. Therefore competition within the neoliberal labour market itself generates more market for various services. Another positive contribution of the approach is that it assists in the development of market efficiency in Australia. The aspect of capital overflow is very essential in the creation of market efficiency. Economic studies undertaken in the 1970s indicate that free markets are actually more resilient in the face of economic turbulence and shock due to the fact that they produce better returns, higher growth on capital as a result more development and investment can be undertaken. As the Marxist approach highlights that economic equality is a source of social stability, to great extent the adoption of the neo-liberal approach in Australia has assisted in the maintaining of social and economic stability ( Rainnie & Mardelene, 2005,p55). The weaknesses linked to the approach is that in despite of economic prosperity and growth as indicated above , the events associated to this particular economic policy for the past twenty years have to some extents been dramatic. Australia has indeed been unsettled the concept and practice of neo –liberalism as a result of the business and political forces that are linked to this particular idea.Mendes, (2003,p 342) states that many people do not have sharp memories concerning the events of the transformation such as the de-regulation of the Banking sector which occurred during Hawke government or the difficulties encountered during the early stages of the process of privatization. For instance Telstra the leading Australian telecommunication company experienced various financial challenges after the privatization process in1996 during Prime Minister John Howard term. Mendes (2003, p340) admits to the fact the makeover performed on the Australian economy through the adoption of the neo-liberalism approach has not been easy. Damien& Sharon (2005, p6-8) indicated that one of the weaknesses of the adoption of the neo liberalism approach is that the cohesion and the dominance of the neo –liberalism in the present Australian society has become an overwhelming factor which has resulted to other forms of reliance within competing discourse not only on the market related kind of thinking but to each and every other discourse that is not within a standard social liberalism. This implies that the very normal discursive oppositions and tensions tend to be ignored or underplayed. A neoliberal focus on individuals and markets for instance, is not at all times consistent with a conservative focus that is more traditional, which is usually provided to the normative functioning of the family. In addition there is also tension that exists between conservative structure of communitarianism and neo liberalism. Only the gambling policy can be thought of as a specific area were one can find the conservative approach to the community and the family and would take the direction that is different to approach the neo-liberalism framework of individual responsibilities and market expansion. There is rather a state of contention concerning the adoption of the neo –liberalism ideology in Australia, as highlighted by the contributions and weakness above what is evident is that the application of the system is that, neo-liberalism can be termed as a justified system whereby the state intervention is withdrawn from economic policies. However the realities of the practice of neo-liberalism in Australia are to some extents marked with contradictions. For instance the history of the privatization of electricity in Australia brings out a contrasted reality of the concerning the common assumptions about neo-liberalism by both the opponents and the advocates. The electricity privatization case in Australia highlights the failure of approach to deliver its pre destined benefits and also the role that should be played by the state and capital within the neo-liberalism framework. Privatization of electricity in Australia was rather a popular aspect that was advocated by the energy intensive industries, the media and financial markets, in addition the Australian Business Council also played a dominant role in the privatization of electricity in Australia. Surprisingly the state government found the attractiveness of privatization despite of public objections of privatization , because it assured a short term influx of monetary benefits into government coffers. However although government debts dropped , the burden was rather directed to the tax payers who paid more . Further more the private sector could not even effectively manage the electricity sector , problems such as electric costs were directed to households, and frequent workers strikes within the industry and reduction of staff were common . Electricity privatization was perceived as a means of giving private institutions a chance to get into action but not act appropriately. Various Australian scholars have noted this fact .Beder (2003,67) argues that the type of neo-liberalism approach applied in the electricity sector in Australia is much of rhetoric rather that practical application of the approach. The Australian neo liberalism framework can be compared to various policing alternatives approaches available for instance when looking at a more neo liberal approach, what is evident is that contemporary neo- liberalism approach has become an aspect that is fully dominant among mainstream thinkers such as Britain and United states. Capitalist states Australia being included Britain and United states have rediscovered the aspect of devising a free market economy as a the main route to fast economic innovation and growth, optimum efficiency and raising prosperity for every individual citizen who is willing to work hard ( Hans, 2006,p112). Pure neo-liberalism approach within the contemporary society can be referred to as the application of an economic theory that focuses on modern laissez faire , which is linked to internal and external freedoms within the policies that govern the economy (Woodward, 1992, 24). A pure Keynesian approach on the other hand is based on the utilization of monitory and fiscal measures as the basis of economic management and control within a state (Batti,1997). A pure Marxist approach is based the transformation of social economic differences through elimination of class differences. When evaluating how Marxist analyze the neo-liberalism approach broader issues are brought about which further result to considerable debates. Marxism perceives neo liberalism as a strategy of increasing the number of working class individuals in a state and increasing individual incomes within the capitalist framework. However Australian Marxists such as Rudolf Hilferding believe that there are certain key problems arise with thin the practice and interpretation of the neo –liberalism approach. One of them is that while the states that have adopted neo liberalism such as Australia and the U.S believe that enforcement of a free market enhances the development of individual citizens and institutions, through its typical lucrative features such as increased technological expansion, growth of multinational companies and the extension of credit, what is evident in the Marxist perspective is that in most cases this particular benefits are rather channeled to the bourgeoisie who enjoy most benefits as a result the gap between the halves and the have not’s is rather progressed than being eliminated within the neo-liberalism framework. Gray and Lawrence (2001, 103) highlight that the adoption of the neo –liberalism approach ahs resulted to challenges in terms of regional economics, they highlight that regional Australia is actually suffering, small towns are actually experiencing decline in terms of market patterns and agricultural out puts in despite of the existence of the free market approach in the countries economy, what is evident is that the neo –liberalism approach actually work best for individuals and institutions in bigger towns, who are mainly able to effectively deal with market challenges. The United States has currently embarked on redesigning its institutions in order for them to conform to the prescriptions of the neoliberal approach. The United States adoption of the approach can be termed as a more neo –liberal as opposed to Australia and also Britain, Gray and Lawrence (2001, 106) argue that this is because the U.S is a major force behind the dollar which is the main internationally reserved currency, therefore there is need for the United states to develop more liberated markets as opposed to other nations. The difference between the Keynesian approach and the neo-liberalism approach is entrenched on the aspect of giving a chance to the private sector to get involved in policy response. The Keynesian type of economics bases its ideology on the aspect that the decisions made by the public sector result to inefficient outcomes in the microeconomic sector, and therefore the approach advocates for active public sector involvement in policy formulation. The neo-liberalism approach on the other hand gives much more credit to the public sector in policy making. In countries such as the Britain and the United States the period 1973 - 1990 was a period of slow economic growth as a result great financial and economic challenges resulted to the adoption of the neo-liberal system as a strategy for dealing effectively with the economic challenges. Countries such as South Korea in Asia undertook the neo-liberalism approach however the application of the Keynesian approach was still is still in practice at minimal levels. (Alison& Bruce, 2004, p219). Conclusion For the past twenty five years the Australian government used the neo-liberalism philosophy as a dominant aspect of policy making in the country. As highlighted in the analysis above the application of the approach differs in the two levels of government the federal and state due to aspects of spending on funding and allocation of responsibility. Various Australian scholars have provided criticism that is actually valuable in the understanding of the application of the neo liberal approach within the Australian politics. The Australian government has strived to ensure that it reduces the intervention of the government in the domestic economy as a result the country has obtained the benefits associated to the practice such the establishment of free markets, fewer business restriction and increasing property rights however as indicated by the above analysis in despite of the shift from the Keynesian system the neo liberal approach has to some extent also brought challenges to the Australian society such as lack of equality in regional development and concentration of policing within the minimal discourse of markets and capital expansion which may be rather dangerous within the social context. Bibliography Adam S, 1776, Wealth of nations, p25. Alison, S & Bruce S, 2004, Australian Social Policy, pg 219. 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