There’s one question Australia can answer – deep in the innards of this global political upheaval – and a lot hinges on getting that answer right.



As pretty much everyone has observed by now, Donald Trump, the UK’s pro-Brexit campaign and Australia’s own Pauline Hanson are all backed by broadly similar folk, voters who feel like human collateral damage in the “new” global economy and who are searching for both hope and scapegoats.

Their support allowed Trump to trample facts and decency to win the presidency of the United States and Brexiters to lure Britons to an act of extraordinary self-harm. In Australia the effect was significant but less spectacular – four One Nation seats and a smattering of other independents in the upper house.

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There are many, many questions posed by all of this; about how to respond when facts no longer sway arguments; how to properly understand this roiling wave of grievance. But one of them is why the Australian backlash – so far at least – is more muted.

Tony Abbott would have us believe the answer lies in the Liberal party having been – and continuing to be – sufficiently right wing to represent these disaffected voters, assuming, it would seem, that their choices are based in ideology.

But as far as they were decipherable, Trump’s policies had little ideological consistency. His appeal was more basic – voters were angry at a system from which they feel excluded and saw Trump as different, not politics-as-usual, someone who “heard” their concerns. Clinton’s Democrat rival Bernie Sanders was popular in many of the same so-called “rustbelt” constituencies that delivered Trump the White House.

One difference in Australia is that, relatively speaking, we still have a system that leaves fewer people behind.

We have a minimum wage of $17.70, set by the specialist Fair Work Commission. In the US the federally determined minimum wage is US$7.25 (less than A$10 an hour) although a fierce fight to increase it to $15 has led to an increase in some states.

We have a relatively efficient universal healthcare system; a federally funded national system of unemployment payments; and universal superannuation to help us prepare for old age.

According to the latest figures from the OECD the top 10% of income earners in Australia earn 8.8% more than the bottom 10%, compared with 18.8% in the US.

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But the safety net of policies that has delivered us this more equitable nation has been unravelling and there are those who would like to unpick it further.

The minimum wage has declined, quite markedly, as a proportion of average weekly earnings.

Wages growth has also been wildly uneven – according to the Australian Council of Social Service (Acoss), over the 25 years to 2010 real wages increased by 14% for those in the bottom 10%, compared with 72% for those at the top. Our transfer system evens out that disparity to an extent but the difference remains real.

The actual value of unemployment benefits has also plummeted, leaving the payments 30% below the poverty line and millions if families living in need. Despite being widely opposed in the electorate, many of Abbott’s 2014 budget plans to pare back benefits are still kicking around the Senate.

We don’t yet know all the ramifications of the decision US voters took this week. The economic and social forces that put them in the mind to make it are complex and not just about household income.

But it’s self-evident that people might not feel so left behind by economic change and globalisation if they haven’t been.

Asked about Abbott’s somewhat self-serving interpretation on Friday, Turnbull noted that voter disillusionment in Australia was less marked.

His departmental secretary, Martin Parkinson, made the point in a recent Lowy Institute speech that Australia’s terms of trade boom had allowed it to mitigate the rise in income inequality seen in recent years in the US and parts of western Europe.

Whether this continued, he said, would depend on the economy, and on political choices.

“Rising inequality is not destiny or a necessary consequence of the forces of globalisation. It is a choice made by individual countries ... All governments have the policy apparatus at their disposal to build a more economically and socially equitable society that remains internationally competitive.”

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The ALP went to the last election with explicit warnings that allowing inequality to rise could lead to Brexit-style voter alienation.

But the political debate continues to spin its wheels, and mostly argue over the extent to which the Abbott-era cuts should proceed rather than rethinking that agenda.

Parkinson is right. It is about choices. We can can choose to keep, to expand, the policies we have that work to reduce inequality. We can hold on to them for dear life, and resist all the political and economic pressures that would erode them.

According to the IMF this actually helps economic growth.

A recent IMF discussion paper says: “if the income share of the top 20% (the rich) increases, then GDP growth actually declines over the medium term, suggesting that the benefits do not trickle down. In contrast, an increase in the income share of the bottom 20% (the poor) is associated with higher GDP growth. The poor and the middle class matter the most for growth”.

It also helps more Australians lead decent lives.

And it might just help Australian politics avoid its own version of the Donald Trump nightmare.