How democratic is Australia really?

We, as Australians generally consider ourselves to live in one of the most democratic nations in the world. Yet some of the freedoms we take for granted, such as free speech and freedom of the press, are not actually written into the Australian Constitution.

Indeed by the letter of the law, a cartoonist quite literally could be imprisoned for up to seven years for lampooning the Prime-minister. Ridiculous as this scenario may sound, and however improbable it maybe of ever occurring, the fact remains, that by law, it is possible.

So how democratic is Australia really?

Ancient Greece was where democracy truly began

The word democracy originates from the Greek word Demos, meaning the common people, or the populace. Ancient Greece was where democracy truly began. Athenian democracy adopted Aristotle’s formulation of democratic government through the direct participation of its citizens, and of “ruling and being ruled in turn.” Civic roles were filled by election or through a lottery, which ensured widespread participation. It has been estimated, that one out of six citizens could hold office in any given year.

The Athenian democratic model consisted of three branches – the Demos, the Council of 500 and the People’s Court.

The next direct link to our own model of democracy came about in England in 1215, with the formulation and introduction of the Magna Carta. It was centred on the basis that, ‘No free man shall be seized or imprisoned, or stripped of his rights or possessions, or outlawed or exiled … except by the lawful judgment of his equals or by the law of the land.”

The American Declaration of Independence drawn up in 1776, extended these rights of the common man. It states that, “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights that among these are Life, Liberty and the pursuit of Happiness.”

The Australian Constitution became law on July 9th 1900, although it was not until 1st January 1901 that it came into effect. Australia’s system of government, its institutions and practices, reflect both British and North American traditions combined in a way that is uniquely Australian.

Australia is a constitutional monarchy – ‘constitutional’ because the powers and procedures of the Australian Government are defined by a written constitution, and ‘monarchy’ because Australia’s head of state is Queen Elizabeth II.

The main commonality of the Athenian, British, United States and Australian democracies, lies in the three main branches these democracies are based on -, legislative or parliamentary, the executive and judicial.

The Parliament (also referred to as the Legislature) is made up of the Queen, who is represented by the Governor-General, the Senate and the House of Representatives. The Parliament makes and amends the law. The Executive is made up of the Prime Minister and ministers, and puts the law into action. The Judiciary is made up of the High Court and other federal courts, and makes judgements about the law.

For a democracy to truly work these three branches must remain separate. There must be a series of checks and balances, and this is known as a ‘separation of powers.’

The system of separation of powers divides the tasks of the state in such a way that each of them is check on the others. As a result, no one institution can become so powerful in a democracy as to destroy this system.

French philosopher Charles de Montesquieu in 1748 in his work L’Esprit des Lois (the Spirit of the Laws) published in 1748 wrote “A nation’s freedom depends on the three powers of governance—legislative, executive and judicial—each having their own separate institution.”

Many of the world’s democracies base their constitution on this philosophy.

Former US President John Adams said, “The judicial power ought to be distinct from both the legislature and the executive, and independent of both, so that it may be a check upon both, as both should be checks upon that”.

In the United States, the separation of powers operates in its most total sense. No member of the legislative, executive or judicial arms may simultaneously be a member of one of the other arms.

However Australia does not have a complete separation of powers because some of the roles of the Parliament, the Executive and the Judiciary overlap. Members of the Executive are also members of the Parliament. High Court judges and the Executive are officially appointed by the Governor-General, who is also part of the Parliament.

Although seldom occurring, problems can also arise if the government holds a majority in both the upper and lower houses as John Howard did after the 2004 federal election. Howard was able to introduce many new laws, and because he had the numbers, the usual checks and balances were missing. Therefore during that particular term of government there was no distinct separation of power between the executive and the parliament. So legislation such as ‘The Prevention of Terrorism Act’ of 2005, which essentially were amendments to sedition laws, were passed, despite vociferous opposition from not only Labour and The Greens, but from within the coalition itself. Many including coalition backbenchers feared the new laws would impinge upon freedom of speech.

Therein lies another problem. If members of the coalition did not agree with the amendments, why did they not just cross the floor and vote with the opposition and the Greens? Because it very rarely happens – although in the not too recent past it did – and when it does it is widely considered within the party to be a betrayal.

Sean Choat, said that he would cross the floor if the government tried to sell off electricity, water or transport utilities.

The last federal Labour ministers to cross the floor were Senator George Georges in 1986 and Graeme Campbell MP in 1988. Both were later suspended from the party for their so called treachery. In February of this year Queensland LNP member Sean Choat, said that he would cross the floor if the government tried to sell off electricity, water or transport utilities. As he said at the time “It is not common for someone to go against their party, but that was my view back in 2009 when privatisation happened under Labour and my attitude hasn’t changed.”

One would have thought by airing these views in public, the Labour party would have triumphantly latched onto this golden opportunity to accuse the government of instability within its ranks. But amazingly no, instead Labour MP Jo-Ann Miller called for him to resign. “If that is his position, he should resign from the LNP because he won’t be able to support the LNP’s views on asset sales,” she said.

These are not examples of democracy at work, but more of censorship and dare I say it, totalitarianism.

Former Prime-minister Malcolm Fraser laments this loss of independence within the party. In 2009 while attending a Q&A on ‘What is wrong with Australian democracy?’ at La Trobe University he said “The Liberal Party used to almost encourage dissent, it didn’t mind if somebody on a conscience vote, voted against the government.” He also went on to say that, “in the last 15 years, that role of the senate has been almost entirely undone. The sense of independence of a member of parliament has quite deliberately I think, been diminished by the power of the party machines, and that means the machine is more important, the individual is less important.”

Hang on, but didn’t we vote for that individual in the understanding that he or she was going to represent his or her community’s best interests? Not to just tow the party line, particularly on issues that affect that community. Naïve I know, but that is how in theory, a democratic society should work.

Malcolm Fraser agrees. “When you elect somebody, you think you’re electing somebody who will exercise his judgement or her judgement and that’s the whole foundation of a parliamentary democracy but you’re not really doing that, you’re electing somebody who will support the platform of the opposition or of the government.”

The party machine and factionalism have no place in a true democracy. Neither do faceless men in the shadows. Men who believe they have the right to install the leader of their choosing, and not of the electorate. The obvious example, is of course Julie Gillard’s usurpation of Kevin Rudd in June of 2010, and the consequent reversing of those roles in 2013.

Since 1975 five PMs (including Gillard twice) have not been elected by the people to the position.

Ms Gillard served as PM in two terms, but was never actually elected to the job in either term by the Australian public. Indeed since 1975 five PMs (including Gillard twice) have not been elected by the people to the position. Although not all of these were factionally driven, nor decided by faceless men in the shadows, how can we be called a true democracy if we cannot even appoint our own leader?

While we may be considered a democracy, we are also a capitalist society, and as the saying goes ‘money talks’, and this is another point Malcolm Fraser made back in 2009 at La Trobe. He said, “Members of parliament in Canberra used to be totally divorced from fundraising. I never knew in my electorate or nationally, how much money anyone gave, I didn’t really know if people had given anything and that barrier has been totally broken down. Members of parliament are given quotas of money to raise and if you’ve given $50,000 to somebody’s campaign fund, he comes into your office and asks you to support a piece of legislation, it’s going to take a very strong person to say no.”

Many believe that democracy and capitalism cannot coexist successfully or for long. U.S. Supreme Court Justice Louis Brandeis is quoted by Raymond Lonergan in his book ‘Mr. Justice Brandeis, Great American’, as stating, “We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.”

This was in 1941, and wealth is far more concentrated today. There is also more of it. In January of this year Oxfam released a report titled ‘Working for the Few’. The report states that half of the world’s wealth is controlled by the richest one percent of the population, and that the richest 85 people control the same amount of wealth as the poorest half of the population.

While the distribution of wealth in Australia may not be as concentrated as some other countries, such as the US, the figures are still alarming. OECD figures suggest that from 1980 to 2008, 22% of all household growth went to the richest one percent. In that same period 50% of wealth has gone to the richest 10 percent.

The National Centre for Social and Economic Modelling (NATSEM) recently released a report which also confirms that the distribution of wealth in Australia remains concentrated in the hands of a wealthy few. The NATSEM report showed that the richest fifth of Australian households each have, on average, forty times more wealth than the poorest fifth of the population.

In 1980 a median priced home in Sydney or Melbourne cost only three times the average national average wage, while in 2010 that same median priced home is eight times the national average wage.

Further proof of this divide can be found in the housing market. First home-buyer numbers are in decline and home-ownership rates have dropped. First home-buyers are simply being priced out of the market. Highlighting this worrying trend is the fact that in the 1980’s, when a very large percentage of homes in Australia were purchased, interest rates were as high as 17%, compared to the 5% we have today.

In 1980 a median priced home in Sydney or Melbourne cost only three times the average national average wage, while in 2010 that same median priced home is eight times the national average wage.

Korean economist Ha-Joon Chang, in his 2008 book, Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism writes, “Unlike what neo-liberals say, market and democracy clash at a fundamental level. Democracy runs on the principle of ‘one man (one person), one vote’. The market runs on the principle of ‘one dollar, one vote’. Naturally, the former gives equal weight to each person, regardless of the money she/he has. The latter give greater weight to richer people. Therefore, democratic decisions usually subvert the logic of market.”

So what is a neo-liberal? Neoliberalism is a modern political-economic philosophy favouring economic liberalizations, free trade, open markets, privatization, deregulation, minimal government intervention in business, and reduced public expenditure on social services.

Does that sound like anyone you know of?

Prime-minister Tony Abbott

In the nine months since the Abbott Government came into power many of the issues presented here have occurred. Take the free trade agreement with China. There were many within the coalition fundamentally against this agreement, particularly Barnaby Joyce, yet despite this opposition, no-one crossed the floor. Indeed Joyce actually accompanied the PM to China.

There has also been the controversy over misuse of allowances, not to mention the conflict of interest issues and accusations of ministerial misconduct that still hang over Assistant health minister Fiona Nash. And of course there is the recent case of Assistant Treasurer Arthur Sinodinos stepping down from the front bench while he faces the Independent Commission against Corruption (ICAC).

Increased government secrecy is another roadblock to a true democracy, and that is exactly what is currently happening in Australia under the Abbott Government. Since the September 11 terrorist attacks in New York, government secrecy has intensified around the world. Global leaders, particularly in the west, have perhaps a little bit too conveniently used the threat of terrorism as a legitimate reason for that secrecy, and of taking various rights away from their their citizens.

The most recent example of this is of course the asylum seeker solution. The Government is releasing very little information, and making it extremely difficult for anyone, particularly journalists to get that information. Last year it cost a few hundred dollars to apply for a journalist’s visa to Manus Island. Today it is $8000, and it is not refundable if you are denied entry. Even those few journalists that do get in are not allowed to speak to detainees.

Immigration Department official tries to block Fairfax photographing Lt General Angus Campbell as he visits the squalid Manus Island Police station prison

Abraham Lincoln, who is arguably the greatest democratic leader in history, and deserving of a posthumous Australian Citizenship, once said. “I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts – and beer.”

However it is not only terrorism that has allowed our Governments to get away with this increasing secrecy, it is also the disinterest we have with politics and our political parties, particularly amongst younger voters.

Prior to the last election figures released by the Australia Institute showed that about 30 per cent of voters under 25 were not interested in the upcoming election, and 68 per cent did not know who was representing them in parliament. And it is not only younger voters to blame, Figures released recently show China has a better per capita involvement in politics than we do, and that is truly a concern.

So how democratic is Australia really?

I’ll let you decide. It is your democratic right after all – or is it?

 

Is opening up Australia to China in our best interests?

In a bid to move free trade agreement negotiations forward, the Government has proposed lifting China’s foreign investment threshold to a billion dollars. But is this really in Australia’s best interests?

In the lead up to the 2013 Australian federal election, a disproportionate amount of emphasis was placed upon the issue of ‘illegal boats’ coming to Australia. Both major political parties engaged in continual yet misleading and meaningless rhetoric, while mass media gleefully followed every twist and turn in the debate, despite the factual inanity of it all. The Australian public – long fed a diet of misinformation on the subject – reciprocated in kind, creating a cycle of unending mistruths. A Chinese whisper if you will, although on a national scale.

Unfortunately, while so much of our collective consciousness was unjustifiably righteous in our condemnation at this so called invasion of our shores, the real foreign threat to Australia was being largely ignored. It was left to Janine – a small business owner and grandmother – who touched upon the issue at the people’s forum at Rooty Hill, asking the prospective PMs, if either of them, “were going to stop foreign countries buying Australian land?”

Literally speaking, the question was a touch naïve as there is no doubt that Australia needs, and should promote and welcome foreign investment. However the validity of Janine’s concerns cannot be questioned. As legislation stands at the moment, any individual or corporation from overseas can buy land in Australia without government intervention or approval, if the land is purchased for less than $248 million. The same applies to any Australian business sold for under $54 million. Any prospective sale over these amounts – or if the investor is a State-owned enterprise – must be reviewed by the Foreign Investment Review Board (FIRB). The FIRB then determines whether the sale is in Australia’s best interests or not, and hands its findings onto the Treasurer who has the final say on whether the sale goes ahead.

Janine is not alone in her concerns. An ABC poll conducted just prior to the election showed that 75 percent of Australians believed, ‘the government should further restrict foreign ownership of Australian agricultural land.’ That figure rose to almost 80 percent in those aged 55 and over.

In response to Janine’s question, Kevin Rudd said all the right things without actually promising to do anything, while Tony Abbott – although saying he supported an open market place – would, if elected, “lower the threshold from $200 odd million to around $15 million.” He also promised to create a national register of all foreign ownership. Both these statements were backed up enthusiastically the following day by then shadow minister for agriculture and National Party Deputy Leader Barnaby Joyce. They were also consistent with statements made by Mr Abbott in the lead up to the 2010 election when questioned on the same issue. “We must be in charge of what happens in our own country,” he responded at the time. “Obviously if we are going to be genuinely sovereign in our own country we’ve got to know what’s going on.”

Six weeks later, the recently elected Coalition Government is about to put before the Senate the legislation proposed at Rooty Hill by then opposition leader, and now PM Tony Abbott.

However, due to hastily written, and very recent amendments made to the proposed legislation, it is being put forward without the support of key Nationals, including one time ardent supporter of the bill, Barnaby Joyce. Not only has the legislation lost the support of these members, the angst caused by the changes have instigated a major rift within the newly formed coalition Government.

A newly formed government that is in intense negotiations with China over a potential free trade agreement between the two nations. The Chinese, understandingly voiced their concerns over the proposed legislation, and in response to those concerns, the amendments were made. The changes not only exclude Chinese Investment from the proposed bill, they increase their purchasing threshold to a billion dollars for land, and 500 million for an established business. Unless of course, the purchaser is a state owned entity. In which case the acquisition must be officially approved.

It is not surprising that these amendments have drawn criticism from various quarters, and in particular from members within the National Party. But is the criticism justified? Or is it just a case of xenophobic vitriol against the ‘Yellow Terror’, and/or an unrealistic desire to keep Australia for Australians.

No doubt much of it is. But that does not explain the deep division among the coalition, and it certainly has no bearing on the fact that Australia is not the only country with concerns over Chinese foreign investment.

In September of this year the United States Government controversially approved the sale of Smithfield Foods – the largest pork manufacturer in the world – to Shuanghui International for US$4.7 billion. But only after five months of intensive lobbying from the Chinese, and despite vociferous opposition from the American public, as well as many sections of the media.

Shanghai Pengxin had to overcome two years of legal challenges by the Maori Trust before a New Zealand Supreme Court decision finally allowed them to purchase 19 Crafar farms in December of last year. The company also had to overcome fierce opposition from many of New Zealand’s politicians.

The Government – despite the fact that the issue has caused such division internally – will of course have many legitimate reasons why allowing the Chinese such unrestricted access to Australian land and businesses is in Australia’s best interest. But it was only two months ago when visiting Beijing, Mr Abbott himself said, “it would rarely be in Australia’s interest” to allow investment by a foreign government.

And of course any prospective purchase of Australian land or business by the Chinese Government, or Chinese state owned entity (SOE) still must be reviewed by the FIRB, and approved by the Treasurer.

There are three major problems with this. The first is that of the 10,336 applications reviewed by the FIRB in 2010-2011 only 43 were rejected, or around 0.5 percent.

The second is that the Chinese Government have found a way around this particular hurdle anyway, by allowing a private company to gain FIRB approval for any given acquisition, then bring in a SOE as an equity partner. Such as in the case of Sundance Resources, purchased in 2012 by Hanlong Mining. Hanlong was left with no choice but to take on an equity partner after restrictions were placed on the sale by the Chinese National Development Reform Commission (NDRC). The equity partner of course was an SEO.

The third major problem is that while not all Chinese businesses are SOEs, most are, if not controlled, at least take direction from the state. The vast majority of Chinese companies will not make major foreign acquisitions unless that acquisition is in China’s best interests. This makes ‘China Inc.’ the world’s largest state capitalist holding company in the world, with unprecedented capital, market place presence and political influence.

The Chinese may well be on their way to becoming the economic super power of the world, unfortunately they are almost bankrupt in terms of natural resources. Much of China is an ecological disaster area, particularly in the north where half the population and two thirds of their farming are located. This same area contains only one fifth of China’s water supply, and because of pollution much of that is unusable. In 2007 the Yellow River Conservancy Commission surveyed 13,000 kilometres of the river and its tributaries, and found that a third was unfit for use, even in agriculture. To make matters worse, according to the Chinese Land Ministry only half of the ground water is usable – even for industry. In fact the Ministry estimates around 70 percent is unfit for human contact, even for washing clothes.

The Chinese answer to this dilemma is to divert the water from the south to the north, via massive dams and canals. While admittedly these are remarkable feats of engineering, and may solve the water shortages in the north for a while, it cannot last indefinitely, and the ecological damage that moving an estimated 45 billion cubic metres of water will do to the south of the country and beyond, has many concerned. Already before the scheme has started operating, plankton in the Yangzi has reduced by two thirds, and river bed dwelling organisms by half. Not to mention how the diversion of all that water from the Yangzi Basin will affect the countries to the south, where a billion people from India, Vietnam and Bangladesh rely upon it to live. The political ramifications could be immense.

As it stands at the moment China comprises 20 percent of the world’s population, yet has less than 10 percent of arable land, and only seven percent of drinking water. What little they do have is being used and contaminated at an alarming rate. The Chinese government has no intention of bringing in water restrictions, and amazingly actually promotes the use of water – particularly for industry. Of course this only exacerbates the situation even further; both in terms of supply, and contamination. Restrictions, although probably justified would be hard to take for the average Chinese anyway, considering they only use about 400 cubic metres per person per day. To put this figure into perspective, that equates to around a quarter of use for an average American, and less than half the internationally considered definition of water stress.

For any community to survive, no matter what the size or population, they need access to strategic resources – food, water and energy, and the Chinese are consuming theirs at a phenomenal rate. Julian Cribb, author of ‘The Coming Famine’, believes that within the next few decades China will only be able to feed 640 million of the expected 1.6 billion population. The Chinese have no choice but to look beyond their own borders to sustain their population for the future.

In early 2010, concerns were raised by the Real Estate Institute of Australia about the apparent tenfold increase in land sales to Chinese nationals over the previous six months. Professor Zhangyue Zhou from James Cook University explained at the time that “the move to buy international land is coming from the Chinese Government, which wants to ensure the country has food security for the future”

And make no mistake Australia is firmly in China’s sights.

In absolute dollar terms China invests more capital into Australia than anywhere else in the world. Indeed, in the period 2006-2012 they invested more in Australia than any other country.

The expenditure is not surprising when you consider the phenomenal amounts of money the Chinese are willing to pay for land. In the last two years Shenhua Watermark Coal (a Chinese SEO), has spent $213 million on the purchase of 43 farms on the Liverpool Plains wheat belt. In many cases they paid farmers up to ten times the value of their properties. It makes it extremely difficult for the farmer to turn down. One who did was sixth-generation farmer Michael Clift.  His neighbours on either side have sold their farms to Shehua, but Michael is firm in his belief that land should be leased to foreigners, not sold. “We are losing some of Australia’s best farming country to overseas interests,” he says. “When freehold land is sold, you can’t get it back.” The question must also be asked what state the land will be in after the Chinese have finished mining it.

Proponents of allowing more Chinese investment will argue that the land may be purchased, but it cannot be taken away. This of course is true, however look at how the Chinese have mistreated their own country. Can they realistically be expected to show ours any more respect. How long after Shehua Watermark have left the Liverpool Plains will it be before farming can once again resume there?

Others will also argue that we need foreign investment, and that is also true. However foreign investors now own 14 percent of Australian agricultural land, and that figure rises to 25 percent in the Northern Territory – an area around the same size as Victoria. In Queensland in the last five years foreign investment has quadrupled, and now 4.4 million hectares of agricultural land is owned by foreign interests.

With all this land also comes very valuable water rights. In Western Australia 30 percent of agricultural water entitlements are owned by foreign investors. Perhaps an even greater worry for WA though, was the sale of Premier Coal to a Chinese company in December last year. The sale now means that all coal mines supplying WA’s electricity grid are controlled by foreign companies.

Over 50 percent of Australian milk production is now processed by foreign owned interests, and the figures are similar in the wheat industry. 60 percent of our raw sugar production is processed by overseas investors, including Chinese SEO COFCO Corporation. The lamb and beef industries fare a little better, as only 40 percent is not in Australian hands.

How much foreign investment is enough Mr Abbott? How is any of the above, “in the best interests of Australia?”