Liberal Party beliefs

In Part 1 of his discussion of Liberal and Labor doctrine, Damien Walker examined the socialist goals of the Labor Party. Part 2 takes us into the belief systems of the Australian Liberal Party.

In many ways, the Australian Liberal Party defines itself by what it is not. It is not socialist. An examination of what the Liberals stand for is something akin to taking the major ideologies of the Labor Party and stating the opposite.

The most important feature of Liberal doctrine is its contrasting position on socialism, especially in the area of nationalised industry. Understanding this requires a brief examination of market economics, sadly.

When retailers compete for your business, they force each other to keep their prices low. To increase profits they have to reduce costs by finding more efficient ways to operate. Therefore, increased efficiency leads to higher profits.

It follows that if you want an economic system to operate as efficiently as possible then you need a competitive marketplace.

These are fundamental economic principles that are almost as reliable as the laws of physics.

So what does this have to do with the Liberal party? We’ll get to that after we look at their pet peeve – nationalised industry.

Imagine we elect a Labor government this September because they campaigned on a promise of free car insurance for everyone. After the election they would set up an insurance office in every city and provide you and I free accident cover. Almost overnight, AAMI, Allianz, QBE, and a host of others would be out of business. The few that are left survive by offering tailored insurance products that are much better than the government’s but only wealthy people can afford them.

In this scenario, nobody is competing in the basic car insurance market because the government is giving it away for free.

How can they afford to just hand out car insurance? Their free insurance is, of course, anything but free because you and I pay for it in our tax. And we pay for it even if we don’t own a car.