Paul Xeating has lost his marbles

I grew up a Keating child. By that I mean I was politicised in the Keating era. As such, I was strong fan of liberal economics with a social conscience and engagement with Asia. Keating’s flair and quick wit has always charmed as well.

But, in recent, years I have found myself more and more distant from the Labor greybeard. What was visionary in the eighties has become more and more stodgy today. Like many pollies he was constantly guilty of revisionism too.

Take his recent statements on super. After the Grattan Institute on Friday released analysis showing that raising Australia’s superannuation guarantee (compulsory super) to 12% would lower wages by $20 billion, the architect of Australia’s compulsory superannuation system, Paul Keating, outright dismissed the findings over the weekend, claiming wages would be unaffected:

Mr Keating dismisses the Grattan Institute’s modelling on superannuation, saying Labor’s plan to lift the amount employers must contribute from 9.5 per cent to 12 per cent will not cost wages.

“That is a lie … It’s a lie, because there’s been no wages growth for five years and there’s not likely to be,” the former prime minister says, arguing that raising the guarantee is “the quickest and easiest way” of ensuring workers get a bigger share of the productivity gains “that companies are sitting on”.

“I mean, the Grattan Institute is bordering on the wicked. It’s bordering on the wicked,” he says, accusing the think tank of “trying to rob ordinary working people” of the extra money.

This is plain wrong. The cost of compulsory superannuation contributions unambiguously falls on the employee, not on the employer.

In addition to the Grattan Institute, the Parliamentary Budget Office came to this very same conclusion last month:

“The increase in the superannuation guarantee to 12 per cent will likely lead to lower wage increases, shifting a greater proportion of earnings into the superannuation system”.

As did the Henry Tax Review:

“Although employers are required to make superannuation guarantee contributions, employees bear the cost of these contributions through lower wage growth. This means the increase in the employee’s retirement income is achieved by reducing their standard of living before retirement…

The retirement income report recommended that the superannuation guarantee rate remain at 9 per cent. In coming to this recommendation the Review took into the account the effect that the superannuation guarantee has on the pre-retirement income of low-income earners”.

As did Bill Shorten nine years ago when he was Minister for Financial Services & Superannuation in the Gillard Labor Government:

Because it’s wages, not profits, that will fund super increases in the next few years. Wages are the seedbed of the whole operation. An increase in super is not, absolutely not, a tax on business. Essentially, both employers and employees would consider the Superannuation Guarantee increases to be a different way of receiving a wage increase.

As did Paul Keating himself in 2007:

“The cost of superannuation was never borne by employers. It was absorbed into the overall wage cost. Indeed, in each year of the SGC growth between 1992 and 2002, the profit share in the economy rose…

“In other words, had employers not paid nine percentage points of wages as superannuation contributions to employee superannuation accounts, they would have paid it in cash as wages…

“When you hear conservatives these days speak of superannuation as a tax on employers they are either ill-informed or they are lying.”

I mean, hello, is this memory loss?

Electoral revisionism is one thing. But when an ex-PM starts to poison the contemporary national interest with dangerously vestigial views about security then the frame of reference moves from rolling one’s eyes to alarm:

Mr Keating says a Labor government would make “a huge shift” in Australian-Chinese relations, while calling for a “clean out” of spy agency ASIO.

“I think what we have to do is recognise the legitimacy of China,” he says.

“China’s entitled to be there … The fact that 20 per cent of humanity has dragged itself from poverty, I mean, is this illegitimate? Of course it’s not illegitimate. It may not suit the United States as a second rate economic power in the world.”

As for the security agencies that would be advising Bill Shorten as prime minister, he says: “You’d clean them out. You’d clean them out.”

“When you have the ASIO chief knocking on MPs’ doors, you know something’s wrong … When the security agencies are running foreign policy, the nutters are in charge.”

Mr Keating praises China as “a great state” and the world’s soon-to-be-largest economy, saying: “If we have a foreign policy that does not take that into account, we are fools.”

Keating’s “great state” is a tyranny that has 1-2m of its Muslim peoples undergoing tortured “re-education”.  The dictator is in power for life. The Chinese Communist Party (CCP) has total control of the media and is rolling out technology everywhere to enforce its “social credit score” regime. It imprisons, tortures and executes those who oppose it. Its economic model is pure corruption. It has forcibly occupied neighbours and is strangling the once vibrant democracy of Hong Kong. It is militarising North Asia in contempt of  international law and ring fencing democratic allies in Korea and Japan. It has just recently spent several years violating Australian sovereignty by bribing its way to power in the media and parliament.

There were more attacks on the security agencies at Domain:

“They’ve lost their strategic bearings, these organisations.”

He added that they had “gone berko” over the threat of Chinese interference and influence in Australia.

…On Canberra’s relations with Beijing, Mr Keating said there was “healing to be done”.

…He attacked the role of John Garnaut, a former Sydney Morning Herald and Age China correspondent who became an adviser to former prime minister Malcolm Turnbull and co-wrote an influential, classified report on Chinese influence in Australia.

Mr Keating said the spy agencies had “gone berko” since that report was written.

First, I can vouch for John Garnaut. No more sane and courageous journalist exists in Australia. His integrity is above reproach and his China sources second to none. He has personally and professionally risked everything in bringing the truth of CCP interference in Australia to light.

Second, the Australian response to CCP activities has been extraordinarily moderate. We exiled one bloke and created a public register for foreign lobbyists plus refocused Pacific strategy to prevent Chinese quasi-militarisation via the BRI. These are only the most basic steps in defending Australian freedom.

Imagine for a moment what would happen if Australian billionaires were uncovered bribing CCP officials in Beijing to give up on the One China policy. When some poor sod from Rio Tinto bribed a few folks over iron ore prices he spent nine years in prison. Were Australians uncovered messing with the CCP’s core interests then it would be show trials, public executions and massive economic sanctions. We have been fantastically restrained.

I’m no geopolitical pansy. A certain amount of this domestic interference comes with the territory of great power relationships. Fine.

I fully accept that a healthy skepticism for one’s own security agencies is essential in government. Fine.

But for Paul Keating to erase from the discussion every dodgy act that the CCP has been up to, all of it antithetical to Australian values and interests, and in doing so demonstrate a shockingly Orwellian principle that is supposed to guide the incoming government in foreign and domestic security policy, that is very far from fine.

The power of the CCP is obviously dangerous to the Australian way of life, which is based upon its opposite in liberal democracy. Australia’s only protection against it is US enforcement of the liberal democratic order it imposed upon Asia post-WWII. This is not some idle notion. It is the raw truth of power. The US liberal empire that, although deeply flawed, for the most part aims to govern on principles of freedom of expression, freedom of self-determination, freedom of commerce and the rule of law.

To think that replacing this system with one that is governed from Beijing in its own image will lift your lot in life is jabbering lunacy.

Moreover, if Labor follows the dictates of such thinking then it is clear and present danger to the country.

Houses and Holes

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the fouding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

Comments

  1. Keating is a sellout. Just like the rest of our whore politicians. He should not be listened to. Just like Angus, Keating had dodgy pig farm dealings. Now he wants us to sell out to the Chinese. The guy was the start of the neolib rot in this country. I hope he gets bowel cancer.
    I only hold the rodent Howard in more contempt than Keating in setting this country on a road to hell.

    It was during Keatings tenure when everyone said lets sell our government owned enterprises and make everyone contractors and then outsource all of our manufacturing to asia.

    hold off on wishing people death. For all your spam management queries [email protected] is the place to go.

    • GramusMEMBER

      Keating is a ‘special adviser’ to the Chinese Development Bank…. shades of Andrew Robb???

    • boomengineeringMEMBER

      Met Keating many years ago as he was going between his rich mates places on the slipway where I was working at Palm Beach, he seemed pretty insignificant.

  2. Relevant StakeholderMEMBER

    Let’s hope Biden doesn’t get up if we’re still going to rely on the US to defend us from the Chinese. Dude’s worse than Keating, Carr, and Brumby combined.

    ….although largely a moot point I guess given the Labor right is about to assume power.

  3. He is right about the intelligence agencies……….lately they have started to dabble in Australian politics. This is very dangerous and needs to be nipped n the bud. This five eyes stuff is way out of control………I fully expect them to concoct some China, China, China nonsense probably concerning Penny Wong.

    We can take part in an alliance with like- minded nations without delivering our freedoms to some shadowy coalition of large overseas corporates and late stage Empire mercenaries. The US government has turned into the United Fruit Company writ large and we need to make sure we use a long spoon in our dealings with them.

    • Even StevenMEMBER

      “He is right about the intelligence agencies……….lately they have started to dabble in Australian politics.”

      The Chinese ones? Why yes they have…

  4. Willy2MEMBER

    – Who bribed Keating into saying this ?
    – Does Keating also have one or more investment properties who are now “under water” ? Is Keating cash strapped ?

  5. Willy2MEMBER

    – Yeah. Increased Super fees/contributions are good for the fat cats of the financial sector/FIRE sector. Then they can squander that money on increasing their own “renumeration”.

    • Absolutely. 70% of retirees are on a full or part pension. Centrelink has a 50% effective marginal rate on aged pensioners with private income over $172 a fortnight. Lower income people lose desperately needed money while they are working, and then they benefit very little when they are retired. This will only really benefit high income earners and fund managers with their snouts in the trough. Thanks, Keating!

  6. Peter Martin was writing a month ago that the best thing the coalition could do is start an enquiry into Super before calling the election. He is correct. Super overwhelmingly benefits fund managers and higher income earners at the expense of low income earners. Add in $30B in fees and $41B in tax concessions, the system needs a thorough review before increasing the super levy.

  7. He hasn’t lost his marbles. This has always been Keating.
    The same guy who claimed to love Suharto.
    His views on economics haven’t changed either. Whatever would hurt the working class he was in favour. Remember super was built on a lie; that wage restraint during the accord process of mega union consolidation and control would be offset by a social wage.
    There is complete continuity. He still claims the top tax rate is too high and stubbornly supported electricity privatisation.
    He is a neolib who believes democracy should not stand in the way of wealth redistribution from the working class to the rich both here and for Tommy Suharto.

    Anyone who ever supported him should do a winter stocktake of their own judgement.

    • great post brud, keating is, as always, a sellout big biz shill. a common run of the mill traitor. and supporters [the poor coots] doing winter stocktake of their own judgement, will be jumping off bridges as it dawns on them that the alp bsd are in his image.
      the hagiography of this ©µñt is = to the howard costello propaganda

    • ErmingtonPlumbing

      Sweeper you say
      “He (Keating) is a neolib who believes democracy should not stand in the way of wealth redistribution from the working class”
      I agree and fear that the leadership of the Party is still captured by the same ideology.
      In weekend links you say,
      “Bowen as Treasurer is a big problem but hopefully he can be removed after the election.”
      Itd be nice to believe there are some in the leadership with enough power to challenge Keatings legacy and his right wing factions Neoliberal embrace but “the Left” seems to have totally ceded the Economic ground to them.

      You also say Labor,
      “Is showing tentative signs of returning back to policies of the welfare state and away from Keating disasterism and his demonisation of the “welfare bag of policies” and business friendly tax cut-ism and emphasis on “growth” and “productivity”
      Though I am hopeful you are correct,…I have not yet seen any concrete “Signs” that a swing back to the Economic left is happening in the ALP.
      Maybe that’s cause I’m in Sydney,…I dunno.
      But Tweets like this from a supposed leading light of the left (Penny Wong) don’t make me feel very reassured.

      https://twitter.com/SenatorWong/status/1124891402972815360?s=19

    • You must all remember that Keating deposed his boss and led a Labor through a recession and the necessary asset sales and austerity – at least necessary in his mind. As election day approached in the early 90s, all John Hewson had to do was shut up. The place was ripe for change. And then he started talking about cakes…

      It was about the last time the media give Labor a bit of a fair go

      I do wonder where Australia would be today if Hewson had prevailed. The Howard and Costello era? Rudd, Abbott et al?

      Couldn’t have been worse than what we have today

      • What was his attitude to toe US Ambassador at the time? It’s an infamous story. You eventually get what you deserve.

  8. BeesemMEMBER

    Keating clearly has gone into legacy protection mode. He can’t stomach anything that’s at odds with his old positions even if the facts on the ground have changed.

    • kodiakMEMBER

      If he wants his legacy to be loss of sovereignty to chine, cu*t’s on his way.

    • what legacy? If he thinks he’s got a legacy he’s deluded… there’s only a chimeric fiction about him which was smashed by the recession we had to have

      • Those of us who lived through the business interest rates of that recession will never forgive or forget those comments.
        PJK became deluded in his hatred the night JWH became PM. He went way beyond his normal left/right hatred to a position of pure rage. He’s a certifiable nut job.

  9. GramusMEMBER

    For more info on Keating and China…
    ‘Foreign interference laws: Paul
    keating May have to register as a foreign agent’
    https://www.google.com/amp/s/amp.smh.com.au/politics/federal/foreign-interference-laws-chinese-russian-state-media-will-have-to-declare-as-foreign-agents-20171206-gzzyol.html

    Paul might be upset that his activities are caught up be the foreign interference laws. I think there are clear parallels with Andrew Robb here only more serious given his status as an ex PM and continued power in the NSW right of the Labor Party (which is the epicenter of Chinese political influence in Australia)….

  10. Ronin8317MEMBER

    I also grew up as a ‘Keating child’, and he had always wanted Australia to become part of Asia. Think back to the APEC days : who was the person driving it to replace ASEAN? In this aspect he is consistent : and to be part of Asia, you will need a non-hostile relationship with China. That should not however translate to being a client state of China.

    China has been ruled by a tyrant since the First Emperor Qin Shi Huang, it’s policy for treating minorities is extinguishing the existing sub-culture and forced assimilation as the way to unify the country. The CCP is merely the modernised version of the Imperial Dynasty, the root of the Chinese governing system, ‘The Mandate of Heaven’, has not changed.

    HK was never a ‘vibrant democracy’. HK was ruled by an unelected British governor for 100 year, and the ‘democracy’ was something added just before the hand over to make governing more difficult for China. The composition of the parliament means those elected can’t pass any laws due to lack of number, so it’s always been nothing but a joke. What is not a joke is the role of Chief Executive : that person has to both keep Beijing and the HK people happy. Lean too far toward Beijing, and people will march on the street. (see the current protest over the extradition law for instance).

    Client states tends to mimic the policies to their patron, and in this aspect Australia is well on its way. We have copied the ‘Great Firewall of China’ in regard to internet censorship and surveillance, implemented a facial recognition database, installed CCTV everywhere, and restriction from travel if someone owes tax or is behind in child support, very much akin to China’s social credit score. The scariest thing however is how our politicians emulates the Chinese in being corrupt, and how the citizens emulates the Chinese in accepting the corruption. The contracts for running the detention centres for example : back in Keating’s days it would be a scandal, now it merely cause a blip.

    • John Howards Bowling Coach

      I agree with a lot of your post BUT you are getting some things the wrong way around. The Chinese social credit score system is relatively new. I believe that travel restrictions for (mostly men) behind on Child support etc have been in place for some time. As with so many modern Chinese innovations it’s likely they are the copycat. Sure the governments of the world are jealous of China and their ability to control, monitor, and manage their subjects in entirety, but in fact the Chinese are using other people’s technology and systems to do it. For all the claims of inventions in China through history they certainly didn’t innovate in CCTV, and automated technology such as facial recognition, which still mostly originate in the USA.

  11. All sane people recognise China as a murderous hegemonic dictatorship run by tyrannical thugs.

    Anybody who is talking the Chinese book is either subject to coercion or is being paid by them to do so. Perhaps both cards are on the table here.

    Whatever the case, it’s vile.

      • triageMEMBER

        That was the Taiwanese (a bit like saying that Aussies are really good at rugby union).

    • ErmingtonPlumbing

      The only way to truely Censure those within our Ruling parties is to do so from within.
      This is why the leadership of both Main Parties do so little actual recruitment.
      They want just enough members to man the polling booths on election day and no more.
      This is because they don’t want to be put on a Democratic leash by a demanding Rank and File membership.

      Do your duty people.
      https://www.alp.org.au/about/join-labor/

      https://www.liberal.org.au/join-party

      Notice how the establishment media types on last weekend’s “The Insiders” talked about “Infiltration” of the Main parties,…not by Citizens, but by “Extreamists” on the “Left and Right”
      So along with the Political establishment, the Coporate media establishment don’t want you to Infiltrate/Join either.
      What kind of message should that send a thinking person who cares about their Country?

  12. jkambahMEMBER

    Both Keating and Hawke have been on the payroll of the Chinese govt, mostly indirectly via their overseas businesses, for decades. Both strongly supported Chinese buying up our farmland, mines and other businesses, and of course high immigration from China.

    The dismantling of our manufacturing base started under the Hawkeating govt and they caused the massive asset bubble in the 1980s that only ended during the early 90s recession, and the near bankruptcy of Westpac and high interest rates.

    However, I am actually a fan of the compulsory system introduced by Keating, but that is not to say that it can not be improved to stop rorting.

  13. John Howards Bowling Coach

    I am ashamed of the ABC that they did not directly highlight that Keating is on the payroll of the Chinese apparatus, given he is likely now on the foreign influence register like Andrew Robb, it’s hardly a rude comment for the commentator to ask him if their is any influence when an opinion mouthpiece like Keating (who invited himself into an interview, I guess his relevance deprivation syndrome was in overdrive) puts forward a strong support for a foreign nation). Yes the ABC have a pro ALP bias BUT…