1. Introduction

One Nation represents a grassroots backlash against perceived failures by Australia's 'elites' in dealing with economic and social change, and this has shaken the political system. This paper explores what caused this, and what could be done.

Pauline Hanson was elected to federal Parliament in 1996. Her maiden speech said that there were problems with Australia's multicultural, aboriginal and immigration policies, as well as with other economic and social policies.

2. Public Reaction

These views divided public opinion. A political party was founded in 1997, and achieved support from more than 20% of the electorate in the 1998 Queensland state election.

Published reactions to Ms Hanson, and her party have been reviewed. This suggests that:

• Ms Hanson has been criticised politically, and many see problems with her policies - but wish to attract her supporters;
• support tends to come from marginalised groups (elderly, disaffected, less educated), whose key concerns are: their economic predicament; and being ignored by elites. They may not clearly identify the causes of problems, or respond to policy arguments. However the strength of the electoral support gained implies a democratic legitimacy.
• some allege racism in Ms Hanson's approach, but this is denied
• Ms Hanson's public statements tend to focus on the need for equality in ethnic policies; disillusion with politicians; and blaming her critics for the 'racism debate'
• independent observers identify problems in Australia's various ethnic policies
• policies have been advanced by One Nation, and tend to be criticised as ineffective
• 'Asians' are concerned about potential racism in Australia, in limited ways
• the media's role in creating / distorting the debate is uncertain
• opponents are criticised as: biased; self interested; or ignorant of others' hardships
• Australia's image, and its commercial and governmental credibility are being damaged

Interested observers suggest that most support for Pauline Hanson's One Nation reflects frustration with a diverse range of problems, though whether it is justified is unclear.

3. One Nation Expresses Dissatisfaction with economic prospects

However One Nation's main support appears to come from those concerned with their economic predicament. There is a real basis for such concerns, for example:

• the impact of economic change has been very great due to: the need for economic diversification; the shift to post-industrial economic goals; and globalisation
• unemployment and under-employment have become chronic problems
• Queensland depended heavily on resource based industry, and finds change difficult, because information about the nature of a developed modern economy is scarce.
• strategies to develop new economic capabilities have not mobilised the community - because the latter were not involved in producing those strategies
• conceptual weaknesses affect conventional economics (the basis of reforms like National Competition Policy) in dealing with economic 'systems' and their development
• a market economy has been sought, which does not mesh easily with Queensland's traditional system of political economy - especially in rural and regional areas
• communities have limited capacity to organise themselves to deal with opportunities

These problems are worst in rural / regional areas because of their economic character, and have been compounded by other difficulties including: droughts; distorted international markets; weak commodity prices; complex native title arrangements; and cuts to various services and programs.

4. First Implication - Real Development of the Economy

It may be possible to significantly reduce the dissatisfaction One Nation represents by:

• starting policy with people, rather than with finance, services or infrastructure. One of many options could be a 'Public Policy Commission' to sponsor research on state policy ideas (from experts and the public), and to report on their effectiveness.
• engaging experienced persons from the community in enterprise oriented strategies for developing economic capabilities led by 'market conscious' organisations
• exploring methods for organising production emerging in the 'new American economy' that seem to allow large scale, high quality employment
• seeking opportunities based more on the competitive advantages of enterprises - rather than relying on the natural comparative advantages of regions
• adapting implementation of National Competition Policy - to recognise that competitiveness requires capabilities and also to take account of qualitative factors such as wealth distribution and the effectiveness of social and economic institutions
• reducing 'red tape' by re-considering how regulation is created in the first place
• government intervention to create such a framework, reduce market failures, stimulate the framework and institutions needed for productivity, and provide supporting services

The Asian financial crisis seems likely to worsen current difficulties. The above proposals should reduce the risk that an economic slowdown may be needed (eg due to a current account deficit 'blow-out'). Such a slowdown would sharply increase unemployment.

5. Second Implication - Social Policy Suggestions

The following approach to social policy questions could be considered:

• developing indicators of Sustainable Economic Welfare (including qualitative social and environmental indicators - to complement quantitative measures of economic production). These may have given warning of the dissatisfaction One Nation reflects.
• taking community development seriously, given emerging evidence of social divisions
• within such a process, considering what genuine 'equality' for aborigines might mean
• evaluating the effectiveness of present governance systems in delivering 'justice'
• improving, by increased 'Asia literacy', understanding of 'Asian' attitudes to racism (which can see racism as 'natural', but offensive if made explicit).

Effective communication amongst those in the community, business and government dealing with different aspects of these economic and social issues, appears to be required, and might be stimulated by the suggested Public Policy Commission.

6. Non-solutions to Expressed Dissatisfaction

Options which would not be constructive in dealing with current problems include:

• adopting the protectionist, interventionist economic style of the McEwen era - as these produced worse results than others achieved at that time
• closing the economy, because trade allows greater wealth and job creation - by allowing highly productivity industries to be much larger than needed for domestic demand, and providing access to other goods and services at low cost.
• preventing immigration, because this stimulates at least enough growth to provide the jobs immigrants take - as shown by the impact of interstate migration on Queensland
• providing 'social credit', as this can be subject to political manipulation / corruption
• merely sharing better the benefits of economic reform, as economic change has not yet been sufficient to provide for sustainable community affluence

7 Conclusions

One Nation reflects a protest about the outcomes of past attempts at economic and social change. In an economic sense, at least, such dissatisfaction seems justified because of the limited effectiveness of such attempts, and the adverse impacts of change on the position of many individuals and communities.

Developing capabilities to cope with the expected future environment should be the goal of any strategy. The difficulties which affected individuals and communities face shows clearly that adequate capabilities for economic prosperity have not been created.

But rather than considering what could be done to achieve better outcomes, mainstream analysts now seem focused on criticising One Nation. However the longer those who do not suffer the effects of change criticise those who do, while not effectively solving their underlying problems: the stronger the protest is likely to get; and the more Queensland's and Australia's commercial and governmental credibility will be eroded.

Some future options have been suggested above which might be more effective in building the capabilities that the disaffected require for economic prosperity, and thus also improving their ability to express policies likely to be to their advantage.

John Craig

8 July, 1998