Tag Archives: policy

Keating’s Working Nation plan for jobs was hijacked by bureaucracy: cabinet papers 1994-95


John Wanna, Australian National University

The White Paper called Working Nation became the Labor government’s major economic statement in Paul Keating’s second term. However, the policy was principally an after-the-fact attempt to clean up a mess in the labour market and be seen to be doing something even if a little belatedly.

Cabinet papers released today by the National Archives of Australia show the white paper began as a rational exercise but was soon overtaken by pressing contingencies and the desire to make the policy everything to everyone. While concerned ministers were anxious to reposition the government in the midst of an ongoing recession, the process of preparing the new White Paper became an exercise in opportunism and bureaucratic capture.




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Cabinet papers 1994-95: How the republic was doomed without a directly elected president


How Working Nation was formed

On 15th December 1993 the Keating government released a significant draft policy entitled Restoring Full Employment – a nostalgic resonance to the original war-time Full Employment paper of 1945. Australia’s unemployment rate at the time was a staggering 10% and while younger school leavers found it hard to find work or were actively discouraged, many older workers (especially males) were being thrown out of jobs, many never to work again.

Paradoxically, unemployment had not featured significantly in the 1993 election (which was fought on the GST), but Labor was now worried that if nothing was done about the deterioration in the labour market (and specifically job creation) then the government would not hold onto office in 1996.

In early February 1994, the Keating cabinet began work on a follow up government policy statement provisionally entitled: a White Paper on Employment and Industry.

The resulting Working Nation paper was one of five “Nation” statements favoured by the two Keatings (Paul the PM and Mike his head of department, not related). The cabinet papers show it began life with the worthy goal of “achieving sustainable high economic growth,” but soon became a “jobs and training compact” to reduce long-term unemployment.

What Working Nation was designed to do

Working Nation was meant to provide an employment strategy, stimulate regional development, introduce a new industry policy, and assist Australia “going global” in expanded trade opportunities. Ministers hoped the policy would lead the economic transformation of Australia.

It began life under ministers Kim Beazley (then head of the Department for Employment, Education and Training) and Peter Baldwin (Department of Social Security). The focus was on the job seekers who would be helped by individual case management, but with the insistence on “reciprocal obligation” – that those on income support had a responsibility to stay in education, be in training or doing other productive work.

But this obligation could easily be evaded through the misuse of medical certificates. Only women over 40 whose partners were unemployed were spared these expectations.

In its implementation by the federal bureaucracy, and the beleaguered Commonwealth Employment Service in particular, the policy descended into a treadmill of labour market programs. There was a saturation of jobs advertisements in the media – that even according to senior administrators led to considerable “churning” of people through 12-18 month job compacts back onto the unemployment queues.

Cost blow outs

Cabinet deliberations at the time show two prominent political aspects of the policy. First, when money was up for grabs the policy intent expanded exponentially and ministers from tangential portfolios rushed to put their hands up for a share of the proceeds.

Second, fiscal circumstances were tight at the time, but costings for the multi-faceted White Paper went from estimates of A$200 to A$300 million for income support, to A$1 billion to A$1.4 billion a few days later. Then it became a maximum of A$1.7 billion.

When the program was announced in May 1994 it came in at an annual cost of A$2 billion, with claims of a total cost of A$6.5 billion before it was wound up in 1996.

Ministers like Simon Crean were largely left out of the process of forming the policy.
National Archives of Australia

The formulation process showed how a determined bunch of policy entrepreneurs, senior bureaucrats led by the head of Department of Prime Minister and Cabinet and academic economists, were able to drive a policy response based on detailed research and theoretical propositions. Social Security bureaucrats were also able to exploit the opportunity to implement their own preferred policy adjustments, almost unrelated to the main thrust of the policy statements. At the same time these bureaucratic players largely marginalised ministers in the process. Indeed, the 1994 Employment Minister Simon Crean had to be briefed by officials on the content of the policy when Working Nation was released.

Moreover, these insider policy entrepreneurs carefully sidelined the government’s main economic adviser, the Treasury department, during the whole process. This perhaps reflects the deep suspicion of some of these actors to the ideological bent of the then Treasury officials.




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Cabinet papers 1994-95: How a security agreement allayed Australian anxiety over Indonesia


While a jobs training package sounded a simple response to a pressing problem, the Working Nation policy created more headaches for a government with umbilical links to the trade union movement. There was contention over a “training wage,” whether it should be greater than the Newstart allowance and how it related to the minimum wage. There was also debate on whether workers could jobshare (which was not endorsed by cabinet) and how increased income support impacted on housing and rental relief measures.

Working Nation was a classic case of just how complex and interrelated such well-intentioned policy statements can become when they cut across other areas of established policy.

Even before it was wound up, there were concerns, noted by cabinet, that the program was not achieving its objectives and that those on the Job Compacts program remained without work when their program entitlements expired.

Even after economic growth in Australia improved, the unemployment rate remained stubbornly stuck at 8.5% before the 1996 election, – an election at which Labor suffered a heavy defeat. Working Nation led to the Commonwealth Employment Service being disestablished and replaced by the now familiar network of private or community job-seeker agencies delivering services under competitive contracts.

While Working Nation was a major economic and social policy statement of the government, it was an inadequate response (too late and too slow) to the imperatives of the 1991-92 recession. And in the process of producing the White Paper, strategically placed insiders grabbed the opportunity to flex their own policy muscles inserting their preferred options into the statement.

The ConversationOnce released, Working Nation had a short-lead in time for implementation (eight weeks) placing huge burdens on a centralised bureaucracy, not generally equipped to respond so receptively to such demands. Working Nation highlighted not only the policy-making inadequacies of the federal government but also the tardy delivery capacity of large unwieldy bureaucratic organisations.

John Wanna, Sir John Bunting Chair of Public Administration, Australian National University

This article was originally published on The Conversation. Read the original article.


Cabinet papers 1994-95: Keating’s climate policy grapples sound eerily familiar


Marc Hudson, University of Manchester

A highly publicised international deal on climate change is two years old. Australia’s federal government, under pressure from environmentalists and with a new prime minister at the helm, signs up and quickly ratifies it. However, its emissions reductions actions don’t work, and the government faces a dilemma: strengthen the measures (including perhaps carbon pricing), or keep cooking up voluntary measures, spiced with a dash of creative accounting.

While the paragraph above might just as well describe the present day, it also sums up the situation in 1994, when Paul Keating’s government was wrestling with Australia’s climate policy. The period is better remembered for angry timber industry workers blockading Parliament, but there were also important battles over carbon pricing and Australia’s international negotiating position.

Cabinet papers from 1994 and 1995, released today by the National Archives of Australia, show how Keating’s cabinet fought an internal civil war over how to respond to climate change, while working hard to protect Australia’s fossil fuel exports.


Read more: It’s 30 years since scientists first warned of climate threats to Australia


International pressure building

Two years previously, in 1992, Australia’s environment minister Ros Kelly had enthusiastically signed up to the new United Nations Framework Convention on Climate Change (UNFCCC) at the Rio Earth Summit. Australia’s willingness to support targets and timetables for emissions reductions (something the United States ultimately vetoed) gave it credibility.

Australia used this credibility to propound a “fossil fuel clause,” which made the now-familiar argument that:

…economies that are highly dependent on income generated from the production, processing and export, and/or consumption of fossil fuels and associated energy-intensive products and/or the use of fossil fuels … have serious difficulties in switching to alternatives.

The cabinet papers released today reveal that defending this clause was a major preoccupation of the government of the day.

In early 1994 Ros Kelly’s political career was brought low by the “sports rorts” affair. She was briefly replaced by Graham Richardson, and then the highly respected John Faulkner.

By this time, all climate eyes were on the first UNFCCC summit, to be held in Berlin in March-April 1995. As an August 1994 cabinet memo noted:

…international pressure is mounting to strengthen the Convention’s emission reduction commitments,

and

…Australia’s measures will fall short of reaching greenhouse gas emission targets and that Australia’s greenhouse performance is likely to compare unfavourably with that of most other OECD countries.

This was a reference to the 1992 National Greenhouse Response Strategy, which was already being shown to be toothless, with state governments approving new coal-fired
power stations and renewable energy ignored. Environmentalists wanted more mandatory action; business wanted to keep everything voluntary. After a roundtable hosted by Keating in June, cabinet debated climate change in August.

The political calculations involved are evident in the official record, which states:

[Australia’s] ability to influence international negotiations away from unqualified, binding uniform emissions commitments towards approaches that better reflect Australia’s interests will be inhibited by a relatively poor domestic greenhouse response.

And what are Australia’s national interests? It won’t surprise you to learn that the government worried that:

…action by the international community could have a major impact on Australia’s energy sector and on the economy in general, by changing the nature and pattern of domestic energy use and/or by changing the world market for energy for Australian exporters.

Cabinet pondered finding international allies – such as Sweden, the Netherlands, Denmark, Switzerland and New Zealand – for the get-out-of-jail idea of “burden sharing”, which would allow countries to finesse their climate commitments by funding emissions reductions elsewhere.

Cabinet also canvassed the possibility of adopting either a proactive or reactive stance, or even withdrawing from the UN climate negotiations altogether. That last option – one that in essence would be adopted by John Howard, at least after George Bush opened up that space in 2001 by withdrawing from Kyoto – was seen as too risky. While the UNFCCC didn’t contain provisions for banning imports from recalcitrant countries, nevertheless:

As a major exporter of energy and energy intensive products, Australia would need to be involved in the negotiations to guard against the possibility of this occurring.

Carbon tax?

Faulkner had already flagged that he would bring a proposal to December 1994’s cabinet meeting, possibly including a small carbon tax – something the Greens, Democrats and Australian Conservation Foundation were all pushing for.

His opponents were ready, with a two-pronged approach. First, they produced economic modelling (with, it later emerged, significant help from fossil fuel companies), which warned that “to stabilise emissions at 1988 levels by 2000, taxes per tonne of CO₂ would need to be around US$192 for Australia and US$24 for the OECD.

So far, so frightening. But given that decisions reached at the Berlin summit might have consequences for Australia’s prized coal exports, some sort of
response was necessary. Fortunately, the Department of Primary Industry and Energy had prepared a document, called Response to Greenhouse Challenge “in consultation with key industry organisations” such as the Business Council of Australia. This had provided a “basis for discussions with industry and incorporates the key principles that industry wants included in the scheme”.

The carbon tax decision was deferred, and ultimately after a series of meetings in February 1995, Faulkner was forced to concede defeat. A purely voluntary scheme – the “Greenhouse Challenge” – was agreed, with industry signing on to what was essentially a reboot of the demonstrably ineffective National Greenhouse Response Strategy.

The Berlin meeting did lead to a call for binding emissions cuts for developed countries, and
Australia signed on, albeit grudgingly. By the end of the year, the same industry-funded modelling was used to produce a glossy report which argued that Australia deserved special consideration because of the makeup of its economy. Australian diplomats would use this argument as a basis of their lobbying all the way through to the 1997 Kyoto climate summit.

In one of history’s ironies, on the same day that this report was released – December 1, 1995 – Keating’s cabinet discussed “the development of a more comprehensive effort in greenhouse science”, noting that:

Climate change is capable of impacting severely on coastal infrastructure, living marine resources and coastal ecosystems such as reefs. The Australian
regional oceans strongly influence global climate, and Australia is vulnerable to oceanic changes affecting rainfall and possibly the incidence of tropical cyclones.

A look at 2017’s weather tells you they may have been onto something there.

Read more: It’s ten years since Kevin Rudd’s ‘great moral challenge’, and we have failed it


The ominous parallels

As I pointed out in last year’s cabinet records article, “when it comes to climate policy, there are no real secrets worthy of the name. We have always known that the Australian state quickly retreated from its already hedged promise to take action, and told us all along that this was because we had a lot of coal”.

Reading these documents is a bit like yelling at a person in a horror movie not to open the door behind which the killer lurks. You know it is futile, but you just can’t help yourself. The December 1994 cabinet minutes contain sentences like this:

Greenhouse is expected to generate future commercial opportunities for Australia with increased export of renewable energy technology e.g. photovoltaic, wind and mini-hydro technology, especially in the Asia-Pacific Region [to] support renewables.

The ConversationAt yet, several governments later, we’re stuck having the same debates while standing by and letting other countries embrace those exact opportunities.

Marc Hudson, PhD Candidate, Sustainable Consumption Institute, University of Manchester

This article was originally published on The Conversation. Read the original article.


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