“AS SIMON CREAN begins his policy blitz, it’s middle-class voters in outer metropolitan electorates Labor is once more being told to heed.

A huge sea change has overtaken Australia’s so-called middle class in the past decade. From acceptance of the new tax system to the rapid growth of private religious schools to the popularity of government rebates for private health cover middle Australia has taken to direct government assistance which facilitates choice.

Australia’s middle class has finally rejected Whitlamism. This is why Treasurer Peter Costello is labelling Crean a “Whitlamite” as Crean calls for more government expenditure on public institutions from health care to education.

Whether or not the allegation is accurate, the Treasurer clearly believes the label is a distinct negative for Labor, with resonance in marginal electorates.

The negative effects of rapid social and economic change in the past three decades are now obvious smaller families or no children at all for couples, fewer marriages, high divorce rates, a growing gap between the affluence of big cities or regional centres and the rest of Australia, job insecurity, an ageing society that is told it must work longer and retire later.

There’s also what Geoff Dixon, chief executive of Qantas, told the Future of Work conference on June 12 is “a race to the bottom” with further cost-cutting and job losses in industries hit by fluctuations in global markets.

The up-side is obvious too. There is choice like never before. No longer are Australian consumers forced to buy inferior and over-priced manufactured goods produced by industries protected by tariffs and quotas.

The public sector no longer drains the public purse with its lifetime jobs, many unproductive, propped up by a majority of taxpayers working with few of the benefits enjoyed by such public servants.

Young people are more likely to be university-educated and to travel and work abroad. They connect with networks of friends internationally and are not bound by borders in their use of IT communications.

So the debate rages are we sinking or swimming in this sea of economic change?

Michael Pusey, author of The Experience of Middle Australia the Dark Side of Economic Reform (Cambridge) says our middle classes are angry and disillusioned.

Economic reform has been the work of “thought police”, large international accounting houses and credit-rating agencies, in cahoots with conservative governments (both Labor and Liberal) and their ideas men in the think tanks.

Clive Hamilton, executive director of the Australia Institute, disagrees. Australia’s middle class has never been better off, he says.

We are three times richer than we were in the 1950s. The dissatisfied middle class is merely whingeing about not being able to have everything they want.

Sydney newspaper columnist Adele Horin maintains that the apparent discontent among those earning $60,000 and above is due to the fact that they have no idea how the real middle-income earners and poor live on much less.

It may be a matter of one’s point of view.

Yet, as Hamilton and Horin suggest, the Pusey take on economic reform shows a somewhat psychotic trend with some commentators, Australia’s latest bout of Leftist alienation.

How is it that reformist prime ministers have continued to win office in Australia, with each succession a more conservative choice for voters from Hawke to Keating to Howard?

Strangely, Pusey’s “golden age” (his words) is the Whitlamite Australia of 1974-75 years of rising unemployment, inflation at 16 per cent, interest rates negative for retirees and their investments, quarterly wage adjustments of up to 5 per cent to put small-business employers out of business and thus add to the unemployment queues.

He advocates the “partnership capitalism” or “corporatist capitalism” of the Netherlands and Germany, even as Organisation for Economic Cooperation and Development reports for Germany and the Netherlands indicate that, in 2002, the German economy came close to stagnating and in 2003 has not recovered.

Unemployment has risen to 10.7 per cent and government debt is a worry.

Germany has just announced more reform of the labour market and will tackle efficiency and viability in its health-care and pension systems.

Chancellor Gerhard Schroeder has said, “Either we modernise or we will be modernised by the unremitting forces of the market.”

In the Netherlands, economic activity is weak, consumer confidence at its lowest level since 1983 and business stagnation is predicted to continue. France has unemployment trending upward at over 9 per cent.

Ageing Germany, France and Italy also need a radical overhaul of their pay-as-you-go pensions schemes. But, in late May 2003, unions clashed violently with the French Government over any reform of state pensions a sign of what’s ahead.

By comparison, sustained economic reform during the past two decades makes Australia a stand-out success.

The markets and globalisation are not a conspiracy foisted on electorates. It’s how the new generations live.

Economies compete globally for goods to be bought; industrialists choose where to operate globally according to the most competitive labour costs, governments realise there are no magic theories to increase revenue; and voters now know the public purse is finite, as well as capable of being squandered on elaborate public projects they may not directly benefit from.

Australia’s marginal seat, aspirational voters are telling politicians they’d rather by-pass the bureaucracy and public institutions. They have lost faith in the Left after years of waste.

In The New Financial Order (Princeton & Oxford 2003), Robert Shiller says to look to the positives “fundamental new risk-management institutions that could improve the lives of individuals, families, communities and societies”.

The technology that has created the globalised world is capable of protecting it.

The challenge is there for Labor to go back like Pusey, or try to adapt to it, as many aspirational Australians are already doing and focus positively, like Shiller, in the generation of ideas.”

Article published in The Canberra Times