Surely the demographic shift would be a boon, reducing unemployment. And it isn't as though there'd be a bigger percentage of people on welfare overall, there would be the same percentage as before, just a lot more on the age pension and less on unemployment benefits? The country has more people of working age than it needs at the moment, so a reduction is hardly a "disaster".
So, its basically a big lie. They know there's no prospect of there being a shortage of workers. (Which would increase wages and thus draw more people into the workforce anyhow.) Its just that that isn't an acceptable solution. The ruling class can't stand the idea of themselves being subject to "market forces", a reduction in unemployment, which might give the working class a better bargaining position. So they want to use scare tactics, with the aim of extending the working life of the labour force, delay retirement entitlements so that a desirable over-supply of workers can continue to exist, keeping wages down. In short, to somehow maintain an artificial over-supply of labour. They are terrified of market forces, full employment would be an inconceivable disaster from their class perspective.
But don't you just love the headline? Those damn voters, they just don't get it, that people are there to serve the economic system, rather than the reverse. Fair enough the author writes, the politicians can pander to the proles at election time, but its very inconvenient and disruptive to have the government's work thrown into chaos by the voters tossing them out of office when they (naturally) go ahead and act against the interests of the people who voted for them.
I met this Tim Colebatch once at an ALP national convention at Wrest Point casino in Hobart several years ago. Thick as two short planks, ideal raw material for an economic journalist. I'm sure he doesn't even see the contradiction.
Bill Bartlett Bracknell Tas
http://www.theage.com.au/text/articles/2004/04/05/1081017100763.html
Europe's economic curse is its voters
Melbourne Age, April 6 2004
The bigger the economy the more reluctant it is to embrace the reforms it needs, writes Tim Colebatch.
Some things are universal. After a month in Europe, three of them stand out: graffiti on city walls, discarded plastic bags littering the landscape - and left-of-centre governments trying in vain to reconcile the interests of their supporters with the values of the financial elite.
Whether it is Steve Bracks in Victoria, 'Lula' da Silva in Brazil, Leszek Miller in Poland or Gerhard Schroeder in Germany, the core dilemma is the same. Governments from the left get elected by campaigning against the policies of the financial elite - yet then find themselves constrained to adopt the very policies they campaigned against.
Some find the going hard. Last week I wrote from Poland, where Miller had just resigned as prime minister after his popularity plunged to 9 per cent in the polls. Two days later in France, the Government of Jean-Pierre Raffarin - a centre-right coalition, but to Australian eyes more like centre-left conservatives - lost 20 of France's 22 regions in a voter backlash against mild reforms.
Last weekend, Slovakia's reformist Government took a hammering in presidential elections: its candidate failed to even make the runoff, to be fought out between two anti-reform populists. And in Germany on Saturday, 400,000 demonstrators, mostly from Chancellor Gerhard Schroeder's own side, marched through the streets, demanding "Schroeder must go!"
In part, this groundswell against reform reflects the economic stagnation that has crippled Europe since 2001. Unemployment is now 9.3 per cent in Germany, 9.4 per cent in France, 16.7 per cent in Slovakia and 19.1 per cent in Poland. That's a tough environment for any government to be clawing back welfare entitlements.
But part of it points to a deeper gulf between the beliefs, values and expectations of those who put the left into power and those who have its ear once in power. The voters see Europe's generous welfare state as their protection, high taxes and high regulation as a fair price for economic security.
But to economists and the elite, those high taxes and regulation are holding Europe back - and threatening to pull it under in the future, as an ageing society will have even fewer workers supporting far more retirees.
In smaller economies such as Australia and the Netherlands, voters accept that governments must tighten their belts and carry out unpleasant reforms as the price of staying globally competitive. In big economies - the US, Japan, Germany and France - it is harder. Their people are less willing to bow to global imperatives, more convinced that their entitlements are basic rights. And a democratic structure of power-sharing makes reform a politician's health hazard.
Consider Germany, the biggest economy in western Europe, yet now its weakest.
When I last visited Germany in late 1990, it was riding high on the euphoria of reunification, and a decade of growth that had put West Germans among the world's richest people. Critics warned that manufacturers were hamstrung by high costs, and that the bill for reunification would sink the country, but few believed them.
A decade of stagnation since suggests the critics were right. Even now, 4 per cent of west German income is diverted each year to prop up the east. Hundreds of billions of dollars have been poured into eastern Germany, yet unemployment there remains above 20 per cent and the gains have been in productivity, not jobs or wages.
Schroeder's coalition of Social Democrats and Greens inherited this mess from Helmut Kohl in 1998, but could make no impact on it. Heading for defeat in 2002, he rescued himself by turning the election into a referendum on US plans to invade Iraq, then made an unusual choice. He used his reprieve to launch an ambitious program, taking on reforms to labour markets, health care, family benefits, pensions, education and training, taxes, the lot.
By Australian standards, the reforms were pretty mild, but in Germany they were dynamite. Germans were told they would have to pay part of the bill each time they visited the doctor, that the door to early retirement would be closed, future pension benefits cut, and the generous unemployment and disability benefits made harder to get.
It was bold stuff for a Government dependent on union support, yet reliant on a conservative upper house to pass its legislation. And while some of Schroeder's reforms have got through, others have been blocked or watered down, and his party has been torn in two by the opposition of unions and grassroots supporters.
Schroeder's support has sunk to 25 per cent in the polls. His Social Democrats have lost every state election in the past two years. Some doubt that he will see out his term, forecasting a party split.
Why should it be suicidal for Schroeder to attempt reforms similar to those the Hawke government put through so successfully in Australia?
Something in European culture seems to powerfully resist change. With demographic disaster looming, that could be its undoing.
Tim Colebatch, economics editor of The Age, visited Germany as a guest of the German Government.