Why Keating is wrong on Labor’s neoliberalism

August 17, 2022
Photo: Alex Bainbridge

Former Labor Prime Minister Paul Keating rejected Greens leader Adam Bandt’s claim on August 3 that Labor is “now the party of the centre-right” and “has adopted neoliberalism”.

Bandt described neoliberalism under governments in which Keating played a significant role in 1983–96, saying they “privatised public services, cut taxes for the wealthy and adopted more and more austerity”.

Keating would have found it difficult to deny neoliberal policy measures by referring to his government’s privatisation of the Commonwealth Bank, Qantas and other public assets such as the Commonwealth Serum Laboratories.

The massive transfer of national income from wages to profits, the reintroduction of university fees and the dismantling of national wage arbitration would not have bolstered his case either.

Keating instead pointed to two examples where he thought his ground was stronger: introducing Medicare and establishing compulsory superannuation.

It might seem that Keating has a point. However, on closer examination, it becomes clear that neoliberalism is also at the heart of those policies.


Keating implied his superannuation policy meant that “every working person” would have “mandated capital savings leading to substantial superannuation assets and retirement incomes”.

That has not happened. And it is not surprising.

Superannuation is, in essence, a user-pays retirement package. If you are fortunate enough to secure a well-paid and permanent job during your working life, you can expect to build a reasonable superannuation total.

But those on low wages, in insecure work, or who leave the workforce for childcare or illness, will face meagre superannuation.

Women, in particular, are disadvantaged by the superannuation system, as even the government acknowledges.

Superannuation industry spokesperson Glen McCrea told the ABC’s 7.30 on August 11 that only by 2050 will half of all retirees have superannuation balances that allow for “dignity in retirement”.

To spell that out: about 60 years after superannuation became compulsory, half of those retiring with compulsory superannuation their entire working lives will be living precariously.

A progressive approach would be to provide a universal and fair retirement pension paid for by a progressive taxation system.

As well as forcing workers to pay for their own retirement, the superannuation system makes them susceptible to market fluctuations. Even short-term economic fluctuations — which are inevitable — can wipe out superannuation balances.

Last financial year only three superannuation funds provided positive returns for members with balanced investments. This can make a big difference for working people planning to retire in the short term.

When workers have to delay retirement due to fluctuations in the capitalist economy, that is a product of neoliberalism — which puts profits before people.


Keating asked how “any reasonable person [could] describe the universality of Medicare as an exercise in conservative neoliberalism?”

The Hawke government’s introduction of Medicare was a progressive reform, although, back then, more people were covered by bulk billing doctors.

Far from being “universal”, Medicare is not available to everyone. International students are denied coverage, as well as many on work visas.

As the Australian Greens are highlighting, mental health and dental care are not covered by Medicare. It is also becoming impossible in many areas to find practitioners who bulk bill.

Importantly, and Keating knows this, Medicare is health insurance, not a health service. Under Medicare, health care remains a fee-for-service commodity. Even if your local doctor bulk bills — that is, collects payment directly from the health insurer (Medicare) — the doctor is paid for each consultation or procedure.

This contrasts with Australia’s public hospital system and those in many European countries where publicly-run clinics provide health care. In these cases, the government allocates a budget to the health authority which then pays the salaries and other costs of providing a service for free.

Providing a public health system on that basis instead of forcing GPs to practice in for-profit, private clinics would be progressive.

However, the fee-for-service model of Medicare is a neoliberal measure: it means that the market can and does impact health services.

Keating can’t be blamed for subsequent governments failing to raise the Medicare rebate in line with inflation (which creates a direct pressure on doctors to charge co-payment and to raise their prices over time). However, it is fair to point out that the Medicare system made such privatisations possible.

[Alex Bainbridge is a member of the Socialist Alliance national executive.]

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