Populism now the case for progressive populism

POPULISM NOW!
DAVID MCKNIGHT is an honorary associate professor in the School of the Arts and Media at the
University of New South Wales. He has worked as a journalist at the Sydney Morning Herald and
Four Corners and has written or co-written many books including Big Coal: Australia’s dirtiest
habit (NewSouth, 2013) as well as Rupert Murdoch: An investigation of political power (Allen &
Unwin, 2012) and Beyond Right and Left: New politics and the culture war (Allen & Unwin, 2005).
He co-edited (with Robert Manne) Goodbye to All That? (Black Inc, 2010). In 2012 he was the coauthor of Journalism at the Speed of Bytes, a study commissioned by the Walkley Foundation for
Journalism on the future of journalism in view of the crisis in newspapers’ business model.
He is also a historian of the Cold War and espionage, having written an authoritative history of
Australia’s internal security, Australia’s Spies and Their Secrets (1994) and a history of the
underground political tradition of the Communist International, Espionage and the Roots of the Cold
War (2002).



A NewSouth book
Published by
NewSouth Publishing
University of New South Wales Press Ltd
University of New South Wales
Sydney NSW 2052
AUSTRALIA
newsouthpublishing.com
© David McKnight 2018
First published 2018
10 9 8 7 6 5 4 3 2 1
This book is copyright. Apart from any fair dealing for the purpose of private study, research, criticism or review, as permitted under the
Copyright Act, no part of this book may be reproduced by any process without written permission. Inquiries should be addressed to the
publisher.

A catalogue record for this book is available from the National Library of Australia
ISBN 9781742235639 (pbk)
9781742244204 (ebook)
9781742248615 (ePDF)
Design: Josephine Pajor-Markus
Cover design: Luke Causby, Blue Cork
Printer: Griffin Press
All reasonable efforts were taken to obtain permission to use copyright material reproduced in this book, but in some cases copyright
could not be traced. The author welcomes information in this regard.
This book is printed on paper using fibre supplied from plantation or sustainably managed forests.


CONTENTS
Introduction
1

The politics of populism

PART ONE: LOOKING BACKWARDS, LOOKING FORWARD
2
3

The rise and rise of the super-rich
Taming the fossil fuel elite

PART TWO: LIVING IN A DEREGULATED WORLD
4
5
6
7

Stolen property: privatising the public sector
Working in Australia’s jobs jungle
Tax me if you can
Banks: the money masters

PART THREE: REBUILDING THE COMMON GOOD
8

Towards a progressive populism

Thanks
Notes
Index


For Jane, companion, critic, comrade, collaborator. Always a source of wise advice.
And to the memory of Andrew Casey (1953–2018), a labour movement activist in both Australia
and the world.


INTRODUCTION
Here’s a quick quiz. What do the following political figures have in common: Pauline Hanson, Bill
Shorten, Donald Trump, Jeremy Corbyn and Bernie Sanders?
Answer: all have been accused of populism. Whether they’ve bashed banks, billionaires or boat
people, they’ve been damned as populists. Yet these political figures come from wildly different
parts of the Left and Right. Can they all be populists?
Mostly, when I hear people damning someone as a populist, they are talking about a right-wing
version. But it’s not that simple. In this book, I argue that a progressive version of populism exists
too. A progressive populism takes up the genuine economic grievances of everyday Australians

without scapegoating migrants or minorities in the way Donald Trump and the pro-Brexit forces have
done. In fact, a progressive form of populism is the best way of defeating the racist backlash of rightwing populism because it addresses the social and economic problems which partly drive the rise of
right-wing populism. As well, it asserts our common humanity, whatever diversity we also express.
I first discovered populism when I began teaching investigative journalism in the late 1990s at
university. I had some understanding of the subject already, having worked on the ABC’s
investigative TV program Four Corners. Like other journalists, I knew about the role of investigative
journalism in the Watergate scandal of the early 1970s. However, to teach it as an academic course I
needed to know about its historical origins. I found that investigative journalism (originally called
muckraking) began in the United States around 1900 during what Americans call ‘the Progressive
Era’. It was called this because it was a period of radical ideas and activism about social reform.
One expression of this was the emergence of a new political party, the People’s Party, in 1890–91. It
stood for the interests of ordinary people – farmers and workers – against the ‘robber barons’ in the
privately owned banking, oil and railway industries. Friends and enemies alike described the
approach of the People’s Party as Populism and its supporters as Populists.
The muckraking journalists were crusaders on issues which they shared with the Populists. For
example, in his book The Jungle, writer Upton Sinclair exposed the dangerous and filthy conditions
endured by the Chicago meatworkers. Years later his book was recognised as one of the forces
behind the introduction of food safety laws. One of the first female muckrakers, Ida Tarbell, exposed
the ruthless practices of Standard Oil in crushing rival companies in a series of articles published in
McClure’s Magazine , and eventually a book, The History of the Standard Oil Company. Today,
Standard Oil is better known as Exxon and remains a ruthless corporation. Lincoln Steffens’ book
The Shame of the Cities exposed the corruption of political machines linked to gambling, prostitution
and bribery. Other muckrakers attacked the role of big money in government and the power of Wall
Street. Their journalism, I realised, was a key contribution to the progressive causes shared with the
Populists.
The key idea of the Populists was that the interests of ordinary people were in conflict with those
of the elite. Some of the Populists had conspiratorial ideas about money and power but their
movement was a powerful challenge to aggressive, unregulated big business. Having been on the Left
of politics since my teens, I found this history of a forgotten reform movement fascinating. Its goals of
economic and social justice for ordinary people are still relevant today.

Years later I rediscovered American populism when I read a book by journalist Thomas Frank,
What’s the Matter with Kansas? Published in the wake of the election of George W Bush, his book


pointed out that Kansas, now a conservative Republican state, was once a centre of radical activity.
One Kansas town produced a socialist newspaper, Appeal to Reason, which sold hundreds of
thousands of copies. In the 1890s its farmers, driven to the brink of ruin by years of bad prices and
debt, held huge meetings where Kansas radicals like Mary Elizabeth Lease urged the farmers to ‘raise
less corn and more hell’. From this situation, the People’s Party emerged as the enemy of the ‘money
power’ and as an alternative to both Democrats and Republicans. It advocated publicly owned
railways and banks along with a progressive income tax on the rich. For this, Frank tells us, they
were reviled ‘for their bumpkin assault on free market orthodoxy’.
In 2015 and 2016 I found myself hearing commentators talk about the rise of modern forms of
populism during the looming US presidential election. Both Donald Trump and Bernie Sanders were
referred to as populists. Sanders had opened his campaign with the statement: ‘This country and our
government belongs to all of us, not just a handful of billionaires’. It was a modern echo of the
progressive side of the American populist tradition. Although he didn’t win the Democrats’
presidential nomination, Sanders shifted the political agenda and challenged the untrammelled power
of the wealthy in the name of ordinary people.
Trump, a right-wing populist, represented the worst aspects of popular prejudice. Yet he won. Like
many others, I was stunned as I read the first online news reports announcing this. How could it have
happened? One of the most illuminating insights came from Thomas Frank, who argued that Trump’s
populist campaign on economic issues was far more important than most people realised at the time
and had been the key to him winning crucial states. The abandoned factories and crumbling buildings
in cities devastated by free trade deals had created a ‘heartland rage’ that swamped the Democrats. 1
All of this was ‘the utterly predictable fruit of the Democrats’ neoliberal turn’, he said. ‘Every time
our liberal leaders signed off on some lousy trade deal, figuring that working-class people had
“nowhere else to go”, they were making what happened last November [Trump’s win] a little more
likely.’ Such sentiments inspired this book. And all of this is relevant to Australia because both our
Labor and Liberal politicians have, in recent decades, largely accepted the principles of deregulation,

privatisation and small government, together known as neoliberalism. In part, this book is an
investigation into the failures of these principles in Australia.
The final reason for writing this book is more personal. I grew up in a single-income, blue-collar
family with my mother suffering from a severe mental illness. Yet we survived and thrived thanks in
part to a strong public sector, especially in health and education. This public sector was grounded in
the major parties’ consensus that it was both morally obligatory and economically sound that
important public services should be equally available to all and provided collectively. Now this
consensus is being broken apart and discarded. This is not some misty-eyed memory about a nonexistent golden age – an error often made by right-wing populists when they equate the White
Australia Policy years with better conditions overall. Australia is a better and more open society
today, not least because it is more culturally diverse. But in terms of simple practical things such as
expecting a secure well-paid job, social services and a home to live in, we are going backwards.
When I started researching this book in the wake of the shock Trump victory and the vote for Brexit
I was already a critic of neoliberalism. But as I probed more deeply I grew angrier and angrier. My
research revealed that the orthodoxies of deregulation and privatisation, regarded as supreme
common sense by the political and economic elite, are radically transforming Australia. The gulf
between billionaires and the poor is widening as old egalitarian Australia crumbles; deregulated
banks have become parasitic to the rest of the economy; corporate tax avoidance is out of control; and
our pay and conditions are being eroded. As it had with me, this has angered many ordinary


Australians. Some falsely blame migrants and refugees while others rightly blame a corporate and
political elite. To change things, we need to rebuild a new progressive agenda which unites ordinary
Australians against these elitedriven policies.
Of prime importance in such a renewed progressive agenda is genuine action on the biggest danger
of all, irreversible climate change, which will hit ordinary Australians first. A progressive populist
approach aims to unite Australians in the broadest possible new movement – one that will provide the
necessary people power to avert the worst kinds of changes in the future. Nothing less than the
survival of humanity is at stake.

CHAPTER 1

THE POLITICS OF POPULISM
We forced discussions on issues the establishment had swept under the rug for too long. We brought attention to the
grotesque level of income and wealth inequality in this country and the importance of breaking up the large banks ... we
are stronger when we stand together and do not allow demagogues to divide us by race, gender, sexual orientation or
where we were born.
US presidential candidate, Bernie Sanders1
The establishment complains I don’t play by the rules. By which they mean their rules. We can’t win, they say, because we
don’t play their game. We don’t fit in their cosy club. We don’t accept that it is natural for Britain to be governed by a
ruling elite, the City and the tax-dodgers, and we don’t accept that the British people just have to take what they’re given.
British Labour leader, Jeremy Corbyn2

With Donald Trump’s successful campaign to win the US presidency and Britain’s decision to
‘Brexit’ from Europe, we suddenly began to hear a lot of the word ‘populism’ in the political
discourse. At first it was used to describe the attack Donald Trump made on illegal Mexican
immigration when he announced his candidacy for the Republican nomination in mid-2015. With his
trademark bombast, he declaimed, ‘When Mexico sends its people they’re not sending their best …
They’re sending people who have lots of problems … They’re bringing drugs. They’re bringing
crime. They’re rapists’. He then added, ‘and some, I assume, are good people’. His call to build a
wall on the US–Mexico border (‘which Mexico will pay for’) became a recurrent theme of his
campaign and later, his presidency.
Nor was his abuse limited to Mexicans. After a Muslim US citizen committed a terrorist attack in
San Bernadino, California, Trump called for a ban preventing Muslims from entering the United
States, at one point including those who were American citizens currently abroad. Trump’s campaign
received what seemed to be a certain death blow in October 2016, when the Washington Post
revealed an audio tape of his boast that, because he was ‘a star’, he could grab women ‘by the pussy’
and get away with it.
By the normal rules of elections in the United States and elsewhere, his popular support should
have shrunk. Trump’s coded appeals to racism, crude misogyny and calculated abuse should have

fatally wounded his bid for the White House. But his popular support grew and Trump eventually
attained the most powerful position in the world. In office, he has confirmed the worst expectations,
responding to North Korea’s threat to the United States with a warning that North Korea ‘will be met
with fire and fury like the world has never seen before’, a thinly disguised threat to unleash a nuclear
war.
How did we get into this situation? Trump’s election victory owed a lot to two factors. One was
his economic populism, which criticised free trade and globalisation. This received a warm response
from many working Americans. He threatened to withdraw the United States from the North American
Free Trade Agreement. He promised to impose high tariffs on runaway US companies which moved
production overseas. He threatened restrictions on imported Chinese goods. Globalisation, he said,
helped ‘the financial elite’ while leaving ‘millions of our workers with nothing but poverty and
heartache’.3 All the while he targeted the states hardest hit by economic globalisation. Much of this


was downplayed or never reported by both social media and the traditional news media, which
preferred to concentrate on his more colourful outbursts and tweets.
The second key to his victory was his skilful use of social media, which he credited with being a
way to counteract what he called the ‘fake news’ propagated by mainstream news media. On
Facebook and Twitter his popularity eclipsed that of Hillary Clinton and it was there that he
circulated his own ‘alternative facts’. The algorithms of social media, which suggest news based on
past activity, transformed this popularity into self-reinforcing echo chambers of Trump supporters.
And all of this was fed by the crisis in traditional journalism, whose capacity to report news had been
eroded by the power of that self-same social media.
The election of Donald Trump has taken us all into a new and dangerous place. If it had been an
isolated incident it would not matter so much. But it was far from that. A few months before Trump’s
election, Britain went to the polls to decide whether or not to leave the European Union (EU). The
vote was voluntary but the turnout was high. More than 30 million people voted, with a majority in
favour of Britain’s exit, styled Brexit. Another victory for populism, said the commentators.
The British vote to leave the EU spanned traditional Right and Left and drew support from
unexpected places. While the ‘Leave’ vote was highest in traditionally Conservative areas, it was

also high in some working-class Labour strongholds. For some, voting to leave the EU was a protest
against the economic effects of the globalised economy, with its problems of unemployment and low
wages. For others, their main concern was the immigration which had ensued from open borders. ‘We
want our country back!’ was a common cry. Donald Trump, then campaigning for president, hailed the
Brexit vote as a ‘great victory’ and drew parallels to his own opposition to ‘rule by the global elite’.
A new populist Right was on the move globally.
Soon populism seemed to be everywhere. In Europe the established parties saw their dominance
challenged by right-wing populism. In France in 2017 the antiimmigrant and anti-Muslim National
Front achieved 34 per cent of the presidential vote, its highest yet. That same year the far right
Alternative for Germany won an unprecedented 13 per cent of the vote and 90 seats in the Bundestag.
In the Netherlands Geert Wilders’ xenophobic Party for Freedom advanced in the 2017 general
elections.
In Australia too Trump-style political disaffection is taking hold. A reputable study by academics
at the Australian National University (ANU) shows that key indicators, including satisfaction with
democracy, trust in government and loyalty to major parties are at record lows among Australians.
The study was conducted following the July 2016 election and found that only 26 per cent of
Australians think the government can be trusted (the lowest level since it was first measured in 1969).
Forty per cent of Australians were not satisfied with democracy (the lowest level since the period
after Gough Whitlam was dismissed in 1975); and there was a record low level of interest (30 per
cent) in the 2016 election.
The study’s lead researcher, Professor Ian McAllister, said that we are seeing ‘the stirrings among
the public of what has happened in the United States of the likes of Trump, Brexit in Britain, in Italy
and a variety of other European countries … it’s coming here and I would have thought this a wakeup call for the political class’.4 Australian conservatives, hoping to take advantage of this disillusion,
welcomed Trump’s victory, with Tony Abbott tweeting: ‘Congrats to the new president who
appreciates that Middle America is sick of being taken for granted’. Mining magnate Gina Rinehart
urged Australia to follow Trump’s lead and Andrew Bolt told his audience: ‘The revolution is on!’
Very much part of this phenomenon, Pauline Hanson’s One Nation party achieved an unprecedented
four seats in the Senate in the 2016 election.

But what is populism?
To many, ‘populism’ is a shorthand term for pandering to people’s baser instincts, exemplified in
Trump’s campaign and his presidency. It inflames a desire to blame ethnic and religious minorities; it
is a lust for cheap popularity and it is a phony hostility to the Establishment and to ‘the elite’ – such is
the common understanding. Populist leaders are seen to be posing as outsiders and as representatives
of the underdog. Above all, populism is regarded as a right-wing phenomenon. But it’s not that
simple. This book argues that a progressive version of populism exists too. A progressive populism
fights for the genuine economic grievances of everyday people without blaming minorities or
migrants. In fact, a progressive populism is a very good way to neutralise this sort of scapegoating
because it addresses the social and economic problems which partly drive the rise of right-wing
populism.
Populism is a notoriously loose description of a political stance. In many ways it is a style of doing
politics rather than a series of particular policies. Some people think populism means trying to be
popular, but this is misleading. The words populist and populism come from the Latin word for ‘the
people’ (populus) – what today we’d call the public. The meaning survives in the expression vox
populi, the voice of the people. Generally speaking, populism is a style of politics which frames
politics as a conflict between the people and an elite. But the identity of the people and the nature of
the elite can vary widely. On this basis populism can be either a right-wing or a left-wing
phenomenon. In some countries today, the traditional battle between right and left is being channelled
through a populist filter.
Academic Margaret Canovan conducted one of the early studies of populism. She argues that there
are two broad strands to populist movements. The first is rural, based on organisations of peasants or
farmers, a kind which typically emerges when these people are confronting modernisation. The
second is characterised by highlighted tensions between the elite and the grassroots. This can take the
form of ‘idealisations of the man in the street or of politicians’ attempts to hold together shaky
coalitions in the name of “the people”’.5 Canovan concludes that populism can take right-wing or leftwing forms but that ‘[a]ll forms of populism without exception involve some kind of exaltation of and
appeal to “the people” and all are in one sense or another anti-elitist’.6
The American writer John Judis, author of the recent book The Populist Explosion, also argues
that populism is ‘not an ideology but a way of thinking about politics’.7 He too supports the view that
populism can exist in both left and right forms. Left-wing populists champion the people against an

elite or establishment (as in Occupy Wall Street’s slogan about the One Per Cent versus the 99 per
cent). Right-wing populists are against an elite ‘that they accuse of coddling a third group, which can
consist, for instance, of immigrants, Islamists or African American militants’.8
Judis notes that the original US People’s Party was formed in the 1890s when Kansas farmers
united with an early workers’ organisation and challenged the existing establishment of Republicans
and Democrats. The People’s Party developed policies against monopolistic railroads and greedy
banks and in favour of progressive income tax and expanding public controls. As one populist writer
said, they aimed to get rid of ‘the plutocrats, the aristocrats, and all the other rats’.9 To the Australian
Labor Party, emerging in the same tumultuous decade of the 1890s, the US People’s Party was
something of a model and there were early proposals to call the new Australian party the People’s
Party, rather than the Labor Party.10
This progressive strand within American populism re-emerged in 2015–16 when Bernie Sanders


competed with Hillary Clinton to become the Democrats’ presidential candidate. At the start of that
campaign he was seen as little more than an eccentric, rumpled, 70-plusyear-old running an unusual
campaign. One newspaper described him as a ‘grumpy grandfather type’ who ‘embraces his
reputation for being gruff, abrupt and honest [and] promises to be bold’.11 As time went on, observers
began to note the cheering, youthful crowds that he drew, his calls for a ‘political revolution’ and his
strong social media campaign on Facebook.
Although he did not win the Democratic nomination, Sanders surprised everyone by doing well
enough in the battle for the presidential nomination to win 23 primary and caucus races to Clinton’s
34. With no big corporate donors, he raised millions of dollars in small donations from a growing
support base, especially from the young. Most surprising of all were his campaign’s public statements
and appeals. Sanders attacked ‘the One Per Cent’ of super-rich people who had benefitted
enormously from the globalised economy while others struggled to survive. In one speech at Liberty
University, he said: ‘In my view there is no economic justice when the 15 wealthiest people in this
country in the last two years saw their wealth increase by $170 billion’. It was a fact he repeated all
through his energetic campaign.
Another Sanders target was the deregulated banking system that had caused the global financial

crisis. Sanders charged: ‘Wall Street used their wealth and power to get Congress to do their bidding
for deregulation and then, when Wall Street collapsed, they used their wealth and power to get bailed
out’.12 The contrast he pointed out in several speeches was with the 41 per cent of American workers
who didn’t take a single day of paid vacation in 2015 and with the third of workers in the private
sector who cannot even claim paid sick leave.
Like Trump, Bernie Sanders was also widely regarded as a populist, reviving a long American
tradition in which the central conflict is seen to be between the people and the elite. Sanders happily
described himself as a democratic socialist and pointed to the socialdemocratic states of Scandinavia
as models. In his platform, Sanders said he supported: a national public healthcare system; an end to
corporate welfare; abolishing fees for college degrees; a full employment policy; raising the minimum
wage to $15 an hour; and preventing ‘greed and profiteering of the fossil fuel industry’. The money to
achieve these aims was to be raised by compelling wealthy individuals and corporations to pay their
fair share of tax.
All of these policies, advocating a stronger role for government, effectively rejected the decadeslong dominance of the ideology known as neoliberalism – the ideology of small government, of
globalising in the form of deregulated markets and of faith in market forces to guide and manage the
economy. Progressive populism in the Sanders mould attributes today’s social and economic
problems not to migrants or minorities nor to the ‘politically correct’ mainstream media, but to the
failure of neoliberal policies. And because progressive populism addresses the forces driving the
rise of right-wing populism, it is the most effective antidote.
The political theorist Chantal Mouffe is not surprised by the rise of right-wing populism:
In a context where the dominant discourse proclaims that there is no alternative to the current neoliberal form of globalisation and
that we have to … submit to its diktats, it is small wonder that more and more workers are keen to listen to those who claim that
alternatives do exist, and that they will give back to the people the power to decide.13

And this is just what Trump promised. Unlike the campaign of Hillary Clinton, issues of economic
injustice featured heavily in his winning campaign. Just a few days before the November election,
Trump told a huge crowd in an aircraft hangar in Pittsburgh: ‘When we win, we are bringing steel
back, we are going to bring steel back to Pennsylvania, like it used to be. We are putting our steel

workers and miners back to work’. 14 Trump touched a raw nerve. No steel mills now exist in
Pittsburgh and hundreds of thousands of steelworkers had lost their jobs since the 1980s, in part due
to freer global trade. Whether Trump was sincere in (or even capable of delivering) his promise to
bring steel jobs back to Pittsburgh is not the point. Identifying economic grievances and blaming them
on free trade and globalisation is almost unprecedented by a Republican candidate. More importantly,
it was a challenge which Hillary Clinton, as a long-time supporter of neoliberal free trade, could not
rebut. As it turned out, Trump did win in Pennsylvania. It was one of the three ‘rust belt’ states that
made the difference to victory or defeat in the presidential election.
Both Trump and Sanders were outsiders in US politics. Both denounced the domination of big
business and the banks and blamed them for much of US economic woes. Both based their campaign
on appeals to ordinary Americans and both were described as populists. Unlike Trump, Sanders was
a progressive populist. When he talked about the elite and the establishment, he meant the economic
elite and the corporate establishment. Unlike Trump, Sanders did not scapegoat immigrants or ethnic
minorities.

The groundswell grows
The groundswell of populism soon saw Sanders joined by the leader of the British Labour Party,
Jeremy Corbyn. When he began his election campaign in April 2017, Corbyn faced deep opposition
from many of his fellow Labour members of parliament. Like most media commentators, they also
believed that because of his left-wing history and left-wing policies he could not possibly win. And
certainly he was in trouble at the beginning of the campaign, when polls were placing Labour up to 24
points behind the Conservatives.
From the start of the 2017 election campaign Corbyn framed the contest in the language of
progressive populism. He described the election as a battle of ‘the establishment versus the people’
and promised to overturn ‘a rigged system’ that favoured the rich and powerful. 15 Under him, Labour
would not be part of the ‘cosy club’ whose members think it is natural for Britain to be ‘governed by
a ruling elite, the City and the tax dodgers’, he said. His opponents believed such deeply
controversial rhetoric was guaranteed to result in a huge loss. But his message was straightforward
and cut through the spin and PR fog of traditional political rhetoric. And these policies proved
popular among the British people. Early opinion polling showed that up to 71 per cent of people

supported his proposal to raise the minimum wage to ten pounds an hour. 16 A similar proportion of
the British public (62 per cent) supported his plan to raise taxes on the rich and high income earners.
Corbyn’s manifesto broke other unspoken rules of the economic consensus of neoliberalism. He
argued that the railways and water supply should return to public ownership. He promised to extend
free school meals by a tax on private school fees. He also urged increased funding for social housing,
and his pledge to abolish university fees helped build a powerful momentum among young people,
who registered to vote at unprecedented levels and voted Labour on election day. The Conservatives
had called the election, confident they would increase their majority in parliament, and Corbyn’s
campaign of progressive populism destroyed their majority and almost beat them.
There were close parallels between the movements around Bernie Sanders and Jeremy Corbyn.
Officials from Sanders’ campaign helped Corbyn with ideas on strategy and fundraising. Sanders
himself visited Britain just days before the election campaign and drew comparisons between his


own policies and Corbyn’s:
Too many people run away from the grotesque levels of income and wealth inequality that exist in the United States, the UK and all
over the world ... Globalisation has left far too many people behind. Workers all over the world are seeing a decline in their standard
of living. Unfettered free trade has allowed multinational companies to enjoy huge profits and make the very rich even richer while
workers are sucked into a race for the bottom.17

The spread of progressive populist ideas has not been confined to the United States and Britain. In
Spain the progressive populist party Podemos emerged in 2014 and grew so rapidly that it secured 20
per cent in the 2015 elections, campaigning on an anti-austerity platform, supporting increased public
spending and strong anti-corruption measures. In the 2016 election it retained its electoral support. In
Greece, another new progressive party, Syriza, formed out of a coalition of left-wing and
environment groups and received 35 per cent of the vote in the 2015 elections, later forming
government. While the majority trend within European populism is right-wing, the significance of a
new left populism should not be underestimated.

Neoliberal globalisation

Driving the emergence of right- and left-wing populism is the set of policies known as neoliberalism.
This became the mindset of the political class in the 1980s and was a very deliberate project to wind
back the welfare state, reducing the public sphere with its public goods of health, education, transport
and culture, along with the tax system which paid for it.18 The neoliberal project is based on the idea
that the market is the most efficient distributor of goods because it combines the profit motive and
competition. It takes no account of justice, inequality or social cohesion. Ultimately this promotes the
transformation of all human relationships (not just economic ones) into commercial transactions.
It was neoliberalism with its floating currencies and deregulated markets which drove the present
form of globalisation. But neoliberal globalisation means much more than a loosening of trade. It
means the unplanned transfer of blue- and white-collar jobs from erstwhile industrial countries to less
developed nations. It also means national governments are less able to control what happens in their
own society and economy.
When the political class adopted neoliberalism, it effectively transferred significant amounts of
political power, the democratic power of governments, to private corporations. While benefitting a
corporate elite, the neoliberal experiment demonstrably failed in the global financial crisis and the
effects of that failure are still with us. What had been a crisis of private debt was transformed by
government bail-outs into an alleged crisis of public debt. This sleight of hand reinforced the
neoliberal dogma that the problem was always governments. The ideology of ‘small government’
meant that governments imposed even more stringent cost-cutting measures.

The failure of neoliberalism in Australia
The populist groundswell in the United States, Britain and Europe and elsewhere is reflected by
similar movements in Australia, prompted by similar causes. In the following chapters I examine the
ways in which neo-liberalism has failed to produce a good society as well as its role in fostering a
populist backlash.


First and most significantly, 30 years of neoliberal globalisation and deregulation have produced a
polarisation of wealth which has undermined Australia’s egalitarian ethos. The gulf between the
super-rich and the rest of us is widening. We are becoming a more divided society with a tiny

wealthy elite at one extreme and a significant group of poor at the other.
Nor is it solely a matter of fuelling material in- equality. As important as inequality (and more
important in the long term) is climate change. The ideology of small government and deregulation is
impeding our response to accelerating climate change despite the clear warning signs in record high
temperatures and the bleaching of the Great Barrier Reef in Australia. Whatever combination of
market and state arrangements is best at fostering renewable energy, it will need tough government
action to implement this and to defeat the power of the coal and oil industries. To support such action
we need a broad populist coalition of all the diverse forces demanding real action on climate.
And just as it has in the United States and Britain, privatisation is spreading throughout Australian
society, changing services that used to be provided to all citizens into profit-making enterprises. The
sale of public assets like seaports, airports and electricity poles and wires has simply created
expensive monopolies. Billions have also been wasted in attempting to privatise technical and
vocational education. Despite these failures, private companies are now being encouraged to move
deeper into education, aged care and disability services.
Likewise, Australia has its own rust belt of closed factories and, for those in employment, jobs are
increasingly casual, part time and less secure. The deregulation of Australian workplaces means that
for younger workers, jobs with paid holidays and fair wages are becoming less common. And thanks
to a variety of temporary overseas visa schemes a casualised, cashin-hand underclass is spreading in
the agriculture, retail and hospitality sectors. Such workers are exploited and their labour conditions
undermine those of local workers. This is not occurring accidentally but because economic orthodoxy
(backed by employers) demands this labour deregulation. The resulting job insecurity combined with
low wages is one factor stoking a right-wing populist backlash based on xenophobia and hostility to
overseas workers.
While low-paid workers are made increasingly vulnerable, at the other end of the scale big
corporations do everything they can to avoid paying tax, a practice made easier in the globalised
world of neoliberalism. In 2014, the Australian branch of the tech giant Apple paid $80 million in tax
– just 1 per cent of its total Australian income of $6 billion. Its rival, Microsoft, paid just 5 per cent
of its income. Over several years big mining companies like BHP and Rio Tinto shifted billions
through Singapore, where tax rates can be a mere 2.5 per cent. Nor is it just corporations. Some of
Australia’s richest families and individuals pay little or no tax. When the Panama Papers were

leaked, up to 800 wealthy Australians were associated with shell companies in tax havens like
Panama. Meanwhile, ordinary Australians are left to pick up the tab for hospitals, roads and schools,
effectively subsidising those who refuse to pay their share.
Finally, compounding the problem of wealth inequality, the banking and finance sector has swollen
enormously since it was deregulated. In Australia we have some of the biggest and most profitable
banks in the world. Together they form a rapacious oligopoly which extracts more than $30 billion in
profits each year from the rest of Australia. In their zeal to lend money, deregulated banks have
fuelled a housing price boom, the result of which is that fewer Australians now own their own home
than 40 years ago. It’s now time to look again at regulating banks and the finance industry to ensure
that they act in the public interest.
Overall, the spread of neoliberal orthodoxy through society has corroded many of the institutions
and relationships on which citizens rely and which offer protection from the vagaries of the market.


This orthodoxy has shrunk the democratic space by removing all sorts of functions from the public to
the private sphere. The real meaning of ‘small government’ is that we have ended up with a small
democracy, because governments are still the only institutions we have for exercising our democratic,
collective voice. The zealous advocacy of theories of self-interest, competition and small government
has led to a dead end.
All of this spawns populisms of both the Right and Left. The crucial point of difference between
them concerns the meaning of and response to globalisation. Are the problems of globalisation
primarily issues of economics and economic justice or are they mainly an issue of immigrants and of
changing the ethnic mix? Progressive populists are alarmed by the damage that open economic
borders, which import cheap products and export jobs, do to local jobs and the national economy.
Right-wing populism dredges the deepest and most dangerous emotions to reject the changing ethnic
mix which results after years of relatively open immigration.
When right-wing populists define what they mean by the ‘elite’ they take aim at the progressive
middle class, the so-called politically correct, who abhor racism and gender inequality. Progressive
populists, by contrast, define the ‘elite’ in economic terms as the super-rich and corporate moguls.
When talking about ‘the people’, progressives seek to unify the middle class and working class in an

alliance for reform. Progressive populists emphasise the common ground which the majority of
people share on issues of economic justice. By focussing attention on genuine economic grievances, a
progressive populist agenda can undercut the way ethnic and religious minorities are demonised.
Some see progressive populism as the natural continuation and revival of social-democratic and
labour politics which have been compromised by their turn to ‘third way’ politics. One critic is
political theorist Chantal Mouffe. She argues that the neoliberal consensus between conservative and
once-radical workers’ parties has created a favourable ground for the rise of populism because many
people feel their voices are unheard and ignored in the representative system.19 The problem is that
this often takes the form of a right-wing populism which sees ‘the people’ defined to exclude
immigrants and minorities.
On this basis many people criticise ‘populism’ negatively. She responds:
This is a mistake, because populism represents an important dimension of democracy. Democracy understood as ‘the power of the
people’ requires the existence of a ‘demos’ – a people. Instead of rejecting the term populist, we should reclaim it.

In this book my intention is to reclaim populism by fostering a progressive version of it which puts
the interests of the common man and woman first, ahead of the priorities of a wealthy global elite
whose interests and priorities have dominated for far too long.


PART ONE

LOOKING BACKWARDS, LOOKING FORWARD


CHAPTER 2

THE RISE AND RISE OF THE SUPER-RICH
There’s class warfare, all right, but it’s my class, the rich class, that’s making war and we’re winning.
Warren Buffett, billionaire investor1

With their collective wealth estimated at $US7.7 trillion, the global elite of the super-rich are the
natural opponents of progressive populism. Some of that global elite are household names in
Australia. In July 2016 over 200 of them gathered for a huge celebration in the dazzling blue waters
of the Mediterranean. Trucking billionaire Lindsay Fox was throwing an allexpenses-paid birthday
party and had invited his closest friends to enjoy a cruise from Athens to Venice via Corfu. Fox’s ship
of choice was Seabourn Odyssey, renting for over a million dollars a week and containing 225 luxury
suites.2
Lindsay Fox’s own wealth totals $2.9 billion. His fellow passengers included the mining
billionaires Gina Rinehart and Andrew Forrest. According to the Australian Financial Review’s
2017 Rich List they are worth (in Australian dollars) $10.4 billion and $6.8 billion respectively. 3
Shopping centre king John Gandel ($6.1 billion) and retail giant Solomon Lew ($2.3 billion) also
took part in the exclusive celebration on the high seas. Further down the guest list for the stylish
cruise were former Liberal Treasurer Joe Hockey, former Liberal Victorian Premier Jeff Kennett,
media businessman Harold Mitchell and golfer Greg Norman.4
This public airing of the details of a party for Australian billionaires is rare. It’s not always easy to
get information on the super-rich. A key source is the Financial Review’s annual Rich List. The 2017
edition identified 60 Australian billionaires, headed by the paper manufacturing magnate Anthony
Pratt ($12.6 billion). The most modest billionaire (scraping in at just $1 billion) is Melbourne-based
Peter Gunn, who owns PGA Group, a private investment business that holds a property empire in
office and industrial blocks and is also involved in cattle production. Others among the ten wealthiest
are James Packer ($4.75 billion), whose money is in casinos; Harry Triguboff ($11.45 billion), who
made a fortune from building tower blocks; and Frank Lowy ($8.26 billion), the Westfield shopping
centre magnate. The eighth wealthiest Australian is Hui Wang Mau ($6 billion), who made much of
his money in Hong Kong property and took out Australian citizenship after studying in South Australia
in the early 1990s.
The overwhelming majority of Rich Listers are men, with an average age of 66 years. There are
only 22 women on the list, among them Gretel Packer ($1.02 billion) and Bianca Rinehart ($2.7
billion). Their wealth, along with that of many others, is a testament to how important inheritance is in
shaping the particular nature of Australia’s super-rich. Another noteworthy feature is the number on
the list who have amassed their fortune by way of government connections rather than through

innovative businesses. Over 80 per cent have made their fortunes in the regulated industries of
property, mining, banking and the finance industry. As two economists from the University of
Queensland and the University of New South Wales, Paul Frijters and Gigi Foster, have pointed out,
these are all industries that require licences and concessions or special zonings from governments.5
Twenty-five Rich Listers are based overseas, several of them in China. All in all, the collective
wealth of those on the 2017 Rich List is $233.1 billion, an amount boosted by the long property boom
and the resurgence in the price of coal, iron ore and other minerals. Studying the printed list gives an


insight into the lifestyles of the rich and super-rich. The pages of the Rich List are littered with
advertisements for the toys and trinkets of the wealthy. They include Bulgari diamonds, Gulfstream
private jets, watches by Rolex and Raymond Weil, and Ferrari cars whose prices range from a low
$188 000 to more than $400 000.
What does all this wealth mean in the context of the wider society? A 2016 study by the aid
organisation Oxfam showed that the joint wealth of Harry Triguboff and Gina Rinehart (then
estimated at $21.6 billion) is greater than the combined wealth of 20 per cent of the Australian
population. The top 1 per cent of the population, Oxfam calculates, own more than the bottom 70 per
cent.6
The rise of the super-rich is a global phenomenon. The American business magazine Forbes
produces an annual list of the world’s billionaires. In 2017 there were 2043 on the list, headed by
computer entrepreneur Bill Gates, whose estimated wealth is $US86 billion. 7 Others in the top ten
are: investor Warren Buffett ($US75.6 billion); Amazon king Jeff Bezos ($US72.8 billion); Facebook
mogul Mark Zuckerberg ($US56 billion) and the funders of the American right wing, the brothers
Charles and David Koch, who are jointly worth $US96.6 billion. Another name mentioned is that of
the current US president, Donald Trump, whom Forbes estimates has a fortune of $US3.5 billion,
almost half of it tied up in several Manhattan office blocks, including Trump Tower. 8 Lindsay Fox
and some of the names already mentioned are among the 33 Australians in Forbes’s global list.
Together the world’s billionaires form a global elite whose collective wealth amounts to $US7.7
trillion. They form part of the ‘One Per Cent’ made notorious by the Occupy Wall Street movement.
The Oxfam study reports the startling fact that globally just eight people own the same amount of

wealth as the 3.6 billion least wealthy people. ‘Collectively, the world’s richest eight men have a net
wealth of $US426 billion [$A621 billion], about the same as the bottom half of humanity’, said Dr
Helen Szoke, Oxfam Australia’s chief executive. That this co-exists in a world which sees one in ten
people surviving on less than $2 a day ‘highlights how broken our economic system really is’.
A member of the Forbes list who deserves special mention is Rupert Murdoch, who has an
estimated wealth of $US13.1 billion. Murdoch was born in Australia, where he is a powerful media
mogul, but he does not appear on the local Australian Rich List because he has been an American
citizen since 1985. In 2016 he married former supermodel Jerry Hall at Spencer House, an ancient
London property owned by Earl Spencer, the brother of Diana, the late Princess of Wales. As a token
of his love Murdoch gave his bride a marquise-cut diamond engagement ring whose worth was
variously estimated at between $1.7 million and $4 million (the lower figure admitted by Murdoch’s
own newspapers). The diamond’s design was based on the ring reputed to have been commissioned
by France’s profligate King Louis XIV for his mistress, Madame de Pompadour.9
Rupert Murdoch’s wedding and Lindsay Fox’s birthday cruise are ostentatious displays of luxury
far removed from the lives of ordinary Australians. But they symbolise something new in Australian
society: the highly visible growth of inequality. This inequality is one of the forces driving the rise of
right-wing populism, as the leader of the Labor Party Bill Shorten observed in a key speech defining
Labor’s purpose:
Inequality kills hope. It feeds that sense of resentment that the deck is stacked against ordinary people. That the fix is in and the
deal is done … It fosters that sense of powerlessness that drives people away from the political mainstream, down the low road of
blaming minorities and promising to turn the clock back.10

Shorten went on to argue that to stem the growth of inequality, Labor would have to affirm the role of
government and distance itself from free market economics: ‘I did not run for parliament to shrug my


shoulders and say, “Oh well, the invisible hand. That’ll help you. The market will decide”’. This
marks a welcome shift in Labor’s direction, away from its embrace of the ideology of deregulation,
market competition and small government.
There are many other reasons to oppose the growth of inequality. One is to minimise the social and

political power that comes from great wealth. Billionaires know that who runs a government – even a
neoliberal ‘small government’ – matters. Their collective influence and generous political donations
combined with a news media which reflects their interests systematically subvert the democracy of
one person, one vote. As this happens government increasingly becomes a plaything of corporate
special interests.
Another reason is that as the gulf between the super-rich and average Australians deepens – which
it will continue to do if governments allow the market to call the shots – Australia will travel further
down the path towards a less civilised society and one with little social solidarity. As life gets
harder, many people look for someone to blame. This can fuel hatred of migrants or ethnic groups and
increase the fear of those who are different. In short, societies can turn ugly. To prevent this, we need
to understand the facts on wealth, and to cultivate political ideas and movements that will constrain
the growth of inequality.

Wealth in Australia
The antics of the individual members of the super-rich may be vulgar and colourful, but this is not the
point. Any argument about wealth and inequality should not be directed at individuals but at the
underlying social and economic dynamics that enable that wealth and its grossly uneven distribution.
These dynamics have evolved thanks to a deregulated form of capitalism which has released many of
the former constraints on the profit motive.
However, investigating the facts is not always easy. The stark reality about wealth in Australia is a
sensitive matter. The Australian Bureau of Statistics has only been systematically collecting data on
the distribution of wealth (as opposed to income) since 2004. Before this, the last official inquiry into
wealth was in 1915. The most recent study was undertaken for the Australian Council of Social
Service, the peak body of the community and service sector. Its report, Inequality in Australia: A
nation divided, contains the most up-to-date information.11
The study reveals what many suspected. Australia’s wealth is concentrated in the hands of a small
group of people. The top 10 per cent own close to half (44 per cent) of all wealth while the top 5 per
cent of Australians own 30 per cent of all wealth. In dollar terms this means that the average wealth
of a member of the top 5 per cent is $4.4 million (which is certainly an underestimation, according to
researchers) while the average wealth of the bottom 5 per cent is minus $7000 (a minus figure

because of indebtedness).12 Also, the kind of wealth owned by the top and bottom differs markedly.
The wealth of the top 20 per cent comprises high-value private homes, share portfolios, investment
properties and large superannuation accounts. The ‘wealth’ of the bottom 20 per cent is made up of a
small amount of superannuation and items like an old car, wardrobes, tables and TVs.
Perhaps more alarming is that the gulf between the super-rich and the rest of Australia is heading in
the wrong direction. In spite of the blip of the 2008–09 global financial crisis, which temporarily
narrowed wealth inequality, wealth is accumulating faster in the hands of the already wealthy.
According to Inequality in Australia: ‘The wealth of the top 20 per cent increased by 28 per cent


over the eight years to 2012 while the wealth of the bottom increased by just 3 per cent’.13 This
widening gap between middle and top income earners means that the top 10 per cent ‘are pulling
away from the living standards of the majority, and increasingly, people at the top end are leading
very different lives to the rest of us’, say the report’s authors. 14 As they point out, inequality is now a
cause for concern for global bodies like the International Monetary Fund (IMF) and the Organisation
for Economic Co-operation and Development (OECD) because it contributes to weaker economic
growth.
Ownership of the assets which make up much individual wealth is one dimension of inequality.
Another is income. The figures on income reveal the same pattern of wealth accumulating at a much
faster rate at the top than at the bottom. For most Australians, income comes from wages, salaries or
welfare benefits. In the 25 years before 2010, real wages increased on average by 50 per cent, but by
only 14 per cent for those in the bottom 10 per cent of income earners compared to 72 per cent for
those in the top 10 per cent. Not only is income growth highly concentrated in the top 10 per cent, it is
even more concentrated within that 10 per cent. The report says that since 1978, 75 per cent of the top
10 per cent’s increase in income has gone to the top 1 per cent. But even this does not convey how
beneficial this has been to the super-rich: 65 per cent of this increase has gone to the top 0.1 per cent,
which numbers 18 000 individuals.15
Remarkably, one of those who is most worried about low wages and incomes is the Governor of
the Reserve Bank of Australia, Philip Lowe. He is concerned about its effect on the broader economy,
since low wages decrease demand for goods and services. In June 2017, the Governor actually urged

workers to put aside their fears about job security and demand a greater share of the economy’s
profits to drive up their wages. Yet the Fair Work Commission, urged on by employers, decided to
lower wages by cutting Sunday and some holiday penalty rates for many workers in the hospitality,
retail, and fast food industries. More broadly in the workforce, when people load up their
supermarket trolleys, the dollars they use to pay for the tinned food, vegetables and ice cream are
shrinking each year.
By contrast, some of the most obscenely high incomes are those earned by the chief executives
(CEOs) of major corporations. Using a rare study of executive salaries conducted by the Productivity
Commission, a 2014 report by the Australia Institute found:
the average pay packet among the top 20 CEOs in Australia is almost $10 million, 150 times more than average weekly earnings at
the time. Among CEOs of the next 20 companies, incomes are about half this amount, around 75 times more than the $62 218 the
average Australian worker earns in a year.16

Executive salaries have been soaring for 25 years. Figures submitted to the Productivity Commission
by Egan Associates show that in 1993, a CEO earned 15 times as much as the average full-time
worker. By 2007 the gap had grown to 250 times! This grotesque gulf is too much even for some of its
beneficiaries. The most honest comment came from the outgoing chief executive of Telstra, David
Thodey. In 2015, on the last day of his job, Thodey told a journalist that he had made more than $27
million in cash and shares in three years. ‘I get paid a lot of money’, he said, ‘but I can’t sit here and
defend my salary against all the guys who are out there working every day, and I wouldn’t try to. I
think there is a real issue with income disparity between what an average person gets and some of the
really big salaries’.17 Top CEOs are not often so frank.
Despite the alarming figures above, overall inequality in Australia isn’t as gross as it is in the
United States, where 21 per cent of children live in poverty, a much higher percentage than most other


rich nations, including Australia where the same figure is 17 per cent. 18 In Australia one of the great
moderating influences has been widely spread home ownership. In fact, owning a house or flat is the
most common form of wealth amongst average Australians and is regarded as a form of security for
old age. The bad news is that the proportion of people who own their own home has been declining

since 1981.19 Young people have been especially hard hit. In 1981 more than 60 per cent of people
aged between 25 and 34 owned their own home (meaning, mostly, they borrowed money and were
paying off the loan). By 2011 this had dropped to 48 per cent. Part of the problem is that an increasing
proportion of the housing stock now consists of investment properties. Increasingly banks are lending
more to investorlandlords than to would-be home owners. From 2000 to 2013 bank loans to investors
rose by 230 per cent compared to a rise of 165 per cent for people buying a home to live in. The other
scandal about investment properties is the extent to which they are subsidised by other taxpayers.
Over two-thirds of property investors are ‘negatively geared’, which means that losses on the
investment can be deducted from taxable income. In simple terms this is a subsidy to those wealthy
enough to invest in houses or flats. Moreover, when it comes time to sell the property, the increased
value (capital gains) reaped from the sale of an investment property is taxed at a reduced rate of 50
per cent. Any attempt to change these generous laws is met with howls of disapproval from property
investors.
Wealthy Australians have no problem buying a home. In 2016 a record was set for harbourside
homes in Sydney. A group of four homes in Coolong Street, Vaucluse (held by three different
families) were jointly sold for a total of $80 million. They are being knocked down to build a single
new residence for Leon Kamenev, co-founder of the online food ordering service Menulog, and
revealed by the Rich List to be worth $560 million. Another record was broken when a penthouse
apartment near the Sydney Opera House was sold for $27 million off-the-plan. In Melbourne,
property developer Daniel Besen and his wife Danielle sold a four-bedroom, architect-designed
house in Toorak for $26 million. It features ‘a gym, custom-lit gallery, hidden wine and cigar lounge
and an expansive underground garage’, according to one report. Meanwhile on Queensland’s Gold
Coast a beachside mansion sold for a similar amount.20
For many others, life is not at all easy. According to the latest study three million Australians live
below the poverty line.21 That three million is over 13 per cent of the population and includes 731
000 children (one in six) with the number of children in poverty increasing in the ten years to 2014.
Remarkably, around one-third of those in poverty were found to rely on wages as the main income,
according to this study. These Australians are widely described as ‘the working poor’.
To get some idea of what poverty means to people, the Bureau of Statistics regularly explores
financial stress, asking people whether they have taken certain actions because they lack money. 22 A

typical question is: ‘Last year, were you unable to pay a gas/electricity/ phone bill on time?’ Other
questions asked whether help had been sought from a welfare/community organisation; whether
anything had been pawned or sold; whether people had been unable to heat their home or whether
they went without meals. On the basis of this kind of information, we can begin to answer the
question: who are the poor?
The large majority of those living in poverty are from three groups: the unemployed; people over
65 years of age; and sole parents with one or more children. Housing is the biggest cost for most
budgets and 60 per cent of the poor rent their homes. Just what this means for someone below the
poverty line is revealed in research done by the religious charity Anglicare, which produces a Rental
Affordability Snapshot based on one weekend a year. In 2016, on a typical weekend, it found there


were 75 410 properties available for rent across Australia. Of these, a single parent with two
children receiving a Parenting Payment could afford only 780 – less than 1 per cent of these
properties. Someone on a Disability Support Payment could only afford 389 or 0.5 per cent, while
those on the Aged Pension could afford only 4.3 per cent of these rental properties.

The power of the super-rich
At the other end of the spectrum, the super-rich can exert a great deal of power, including on
government policy. One revealing example was a mid-2010 protest in Perth – not the normal kind of
protest rally, but one led by billionaires. At one point the mining heiress Gina Rinehart, sporting a
string of pearls, stood swaying on the back of a truck and bellowed into a microphone. Her voice
became increasingly hoarse as she led the 2000-strong crowd in chanting, ‘Axe the tax! Axe the tax!’
Behind her, in a spotless yellow and blue mining shirt, stood another billionaire, Andrew Forrest.
Forrest attacked the ‘socialist’ Rudd government and suggested Australia was ‘turning Communist’.
The rally was called by a mining lobby group and comprised mostly mining industry employees who
had been bussed into the centre of the city, where they were handed neatly printed placards.23
The billionaire mining tycoons’ target was a new resource tax on the booming profits of the mining
industry, introduced shortly before by the Rudd Labor government. If the rally presented the innocent
public face of the protest, something more sinister was going on behind the scenes. According to

economic commentator Paul Cleary: ‘As soon as Rudd sprang the new tax on the industry, the big
three companies decided they had to kill this plan – and they were prepared to play dirty’.24 The big
three were Rio Tinto, BHP Billiton and Xstrata, collectively worth $450 billion and largely foreignowned. Led by BHP Billiton, they set up a ‘war room’ in BHP’s Melbourne office to run a $22
million TV and print media scare campaign, for which Gina Rinehart kicked in $750 000.25
The media blitz, titled ‘Keep Mining Strong’, convinced many people that the industry had ‘saved’
Australia during the global finance crisis and that the new tax would cost jobs and repel investment.26
The campaign succeeded beyond the expectations of the mining lobby. Seven weeks after the tax was
announced, the Prime Minister Kevin Rudd was deposed and his super-profits tax went with him. As
Cleary records: ‘Having subverted a functioning democracy, mining executives were celebrating in
airport lounges around the country’. In case the deeper message behind these events was unclear, the
Rio Tinto CEO, Tom Albanese, spelt it out to a meeting of 500 mining executives in London. Other
governments around the world who wanted ‘a new tax to plug a revenue gap’ must ‘learn a lesson’
from the Australian events, he said. The Australian newspaper was in no doubt about the meaning of
this statement, headlining the speech as ‘a warning to other governments’.27
One person who witnessed these events up close is former Labor Treasurer Wayne Swan. Asked
about the power of corporate Australia, he said: ‘When you’ve seen the way they operate behind the
scenes, through climate change and through mining tax issues, they are brutal, they are powerful, they
are selfish, they take no prisoners … the power that business expects to exercise in our democracy is
far in excess to the amount of power it ought to have’.28

Murdoch and the 2013 election


Australians witnessed a different display of the feral power of the super-rich in August–September
2013. This time the instigator was global media giant Rupert Murdoch, whose weapon of choice was
his vast stable of influential Australian newspapers. The fact that the Australian-born Murdoch
became an American citizen (so he could legally extend his ownership of American TV) means he
cannot vote in Australian elections. But in the 2013 election campaign Murdoch exercised far more
power than any individual citizen. Shortly before the start of the election campaign he signalled his
support for the leader of the Opposition, Tony Abbott, tweeting, ‘Conviction politicians hard to find

anywhere. Australia’s Tony Abbott rare exception. Opponent Rudd all over the place’.29
To run his campaign Murdoch flew in one of his trusted lieutenants, Col Allan, then working on
Murdoch’s New York Post but formerly an editor of Sydney’s Daily Telegraph. Reports soon
emerged that Allan had held meetings with editors in which he instructed them to campaign against reelecting Rudd’s government. The day after Kevin Rudd announced the election date, Sydney’s Daily
Telegraph’s front page bellowed: ‘KICK THIS MOB OUT’. It was the start of a co-ordinated
campaign among Murdoch’s newspapers and was particularly hysterical in the swing states of
Queensland and New South Wales. Among a string of hostile headlines, Brisbane’s Courier-Mail
depicted Rudd as a masked bandit (‘KEV’S $733 MILLION BANK HEIST’) while the Daily
Telegraph photoshopped Labor leaders in Nazi uniforms.
Some protested against the blatant bias. The activist group GetUp! made a TV advertisement
attacking bias in Murdoch’s newspapers. After screening for four days on Channel Nine in Brisbane,
the advertisement was banned by all the commercial TV networks. The last week of the campaign
saw Kevin Rudd attack Murdoch, referring to ‘the blatant bias of the Murdoch press’. He added, ‘I’ve
taken it head-on and I think Australians have been waiting for someone to do that for a long time’. In
contrast, Tony Abbott defended Murdoch, stating ‘I’ve got a lot of time for Rupert Murdoch … he’s
one of the most influential Australians of all time and … we should support our hometown heroes’.
As the election campaign intensified, the Murdoch tabloids ramped up the attack. On Sunday 1
September the Sydney Sunday Telegraph’s entire front page was bluntly headlined: ‘AUSTRALIA
NEEDS TONY’ with a large photo of Tony Abbott’s face pictured against a background of the
Australian flag. In Brisbane, the Sunday Mail, the Sunday edition of the Courier-Mail , ran the
headline ‘RUDD NEEDS A MIRACLE’ with an article predicting that Kevin Rudd is ‘sliding
towards election defeat’.
On the eve of the election, Friday 6 September, the Melbourne Herald Sun ran its editorial on the
front page with the headline ‘TONY’S TIME’, and a ringing endorsement inside. The Courier-Mail
ran a visually striking image of a spotlight on a stage containing a forlorn clown’s hat. The headline
read ‘THE CIRCUS IS OVER’, recalling an earlier headline attack on Labor, ‘SEND IN THE
CLOWN’, directed against a particular Labor candidate. The circus story was accompanied by a
prominent editorial extract that proclaimed that ‘More than any recent Opposition leader, Mr Abbott
has earned a chance to prove himself as Prime Minister’. This barrage of hostile headlines endured
for the entirety of the campaign, during which the Murdoch press carried not a single headline critical

of the Tony Abbott–led Opposition.
Some regard newspapers as obsolete in a digital era, a form effectively displaced by social media.
But this is to ignore aspects of social media. For example, on Facebook much of the content comes
from elsewhere and newspaper stories feature regularly in news feeds. But newspapers also do more
than provide content to social media because they still set a national agenda by influencing TV news
coverage and radio talk shows. The power of the press, including the Murdoch press, persists.