Inside Story

Never so good?

On the anniversary of the 2010 Australian election, Frank Bongiorno – just back from London – contrasts the challenges facing Britain and Australia

Frank Bongiorno 21 August 2011 2116 words

Anti–carbon tax rally, Melbourne, 19 June 2011. mugfaker/Flickr

ALMOST four years of living in Britain probably doesn’t quite qualify me for the title “returning expat.” In any case, I visited Australia fairly often during those years and as someone teaching Australian studies in London – I think the historian Tom Griffiths once referred to the role as “professional Australian” – I couldn’t really afford to cut myself off from the Antipodean scene even if I had wanted to.

Still, in terms of Australian politics, my departure from Antipodean shores in September 2007 seems more like forty years ago than four. The big story just before I left was the Liberal Party’s leadership crisis, rivalled only by the Chaser gang’s Osama bin Laden stunt at the Sydney APEC meeting. Kevin Rudd’s rise and rise seemed inexorable, and the opinion polls had Labor winning the forthcoming election in a landslide. If the idea of a political cycle has any meaning at all, the spring of 2007 was surely a turning point – the end of a long period of conservative dominance in federal politics, the arrival of a new political agenda, perhaps even a moment of generational change. The myth of John Howard’s invincibility was shattered.

Less than three years later, I was in the audience of a conference on Patrick White in London. Why was the Sydney Morning Herald’s David Marr, White’s distinguished biographer, repeatedly looking at his mobile phone and ducking out of the room? Was he checking the sales figures for his recently published Quarterly Essay? In the sensational Power Trip, he had presented Rudd as a man twisted with anger, a startlingly different article from what had been packaged so professionally for unwary voters’ consumption at the November 2007 election. But Marr had also ruled out any suggestion that Rudd would be thrown overboard in favour of another leader before the next election. Now he was doing his best, at a distance of 17,000 kilometres, to follow the biggest political news story for years. For back in Canberra, it was that evening: the one on which Kevin Rudd’s political world fell apart. Within a few hours, Julia Gillard would be prime minister. Within weeks, she would call an early election.

Even in August 2010, as the parties fought one of the least inspiring election campaigns almost anyone could recall, the modest hopes raised by Labor’s victory in 2007 seemed a little embarrassing. Labor had come to power in 2007 promising to deal with climate change but it had already effectively abandoned a stalled effort to introduce a Carbon Pollution Reduction Scheme. It had foreshadowed more humane treatment of asylum seekers but that issue was back on the political agenda, with Labor tacking ever more closely to the hard line associated with the Howard government. And before calling the election, Gillard had made terms with mining companies opposed to the government’s proposal for a super profits tax.

The decks were being cleared of anything likely to make the government a target of vested interests, radio shock-jocks or the Murdoch press. In the process, Labor also largely abandoned any pretence that it provided a distinct alternative to the right-wing populism of the Abbott-led coalition. Most seriously of all for a party historically more vulnerable than the Liberals to the charge that it represented a section rather than the community, the government symbolically ceded to the mining industry its claim to custodianship of the national interest. This surrender was a historic defeat for the Labor Party, probably of greater long-term significance than the actual results of the 2010 election – as bad as they were. And in the year since that election, Gillard has laboured in vain to overcome the problem of political legitimacy caused by the failure to implement the carbon scheme, the overthrow of Rudd and the formation of a minority government held together by the votes of rural independents representing conservative electorates instinctively hostile to Labor.

I HAPPENED to be in Australia at the time of the 2010 election, which came just months after a general election in Britain that saw the ejection of a long-serving Labour government. That election had also yielded an indecisive result, followed by post-election haggling. Yet in each case – Britain and Australia – the government that resulted has been more stable than anyone had a right to expect in the circumstances.

Stability has not, however, translated into popularity. In the British case, the reasons for the dire public opinion polls seem only too clear. The Conservative–Liberal Democrat government has announced swingeing spending cuts – £81 billion over four years combined with £30 billion of tax increases – that will affect virtually every aspect of national life. It has done so in the belief that Britain’s high level of government debt was a standing menace to the economy, an argument either discounted or only half-believed by a majority of voters.

By contrast, Australia’s public debt is far lower than Britain’s. So is its unemployment rate. And the Australian economy is also growing faster. The Confederation of British Industry has predicted a 2011 growth rate of a miserly 1.3 per cent, some way behind the modest official projection of 1.7 per cent. Even before the recent rioting in London drew sensational attention to the bleak prospects faced by Britain’s urban poor, many commentators believed that the economic policy of the Cameron government was failing as miserably as its plans for civic renewal. In Australia, there are concerns about recent economic contraction, declining consumer confidence and the weak performance of much of the economy in comparison with the resources sector. But things hardly seem in such a state of disrepair as to explain the Gillard government’s deep unpopularity.

Still, this was also true of the Howard government in 2007. That election should surely have put to rest the myth that people only turn governments out of office when the economy goes bad. Voters were worried about rising interest rates and rising prices, but to the extent that they cast their ballots in response to the urgings of the hip-pocket nerve at all, they seemed more worried about what might happen in the future than what was actually happening at the time.

The fact that the still relatively healthy state of the Australian economy has been accompanied by no obvious political dividend for Labor is unquestionably concentrating the mind of many a Labor Party strategist. But in trying to solve this riddle, it is worth pausing over the psychological effects of Australia’s singular experience of the global financial crisis.

These are really only thrown into relief when set beside the experiences of those other developed nations with whom we are accustomed to comparing ourselves. This was the greatest economic meltdown since the 1930s. It threw millions out of work. It created mass homelessness. It has led to massive government deficits that, even with huge cuts in public spending, will take years to bring into balance. It threatened – indeed, still threatens – the banking systems of countries that just a few years ago were being held up as models for the rest of the world. Ireland, for instance, was until recently the Celtic Tiger; but when I spent an evening with some Irish historians in Dublin a few months ago, they were talking of their little republic as if it were a failed state, not just one that had fallen on hard times.

THE EFFECTS of the crisis on Australia were extremely mild by world standards. Americans and Europeans would die for our economic “problems.” In the circumstances, perhaps we can be forgiven for taking our affluence for granted, for imagining that governments come and go, creating mere “surface disturbances, crests of foam that the tides of history carry on their strong backs” – as the French historian Fernand Braudel so eloquently put it.

The “tides of history” that now matter most to Australians mainly concern the apparently insatiable Chinese demand for our resources. Most Australians, I think, expect that this will go on irrespective of who happens to be warming the government benches in Canberra. The economists also seem to think so. And for all I know they may be right. Western Australian premier Colin Barnett, in a recent Menzies Lecture at King’s College London, with the title “More than China’s Quarry,” unwittingly spent his allotted hour making the opposite case – that his state was indeed, in global economic terms, essentially a big hole from which to dig up stuff to send to China. He made it clear that his state now looks north to China and not east to Canberra. If there had been an opportunity for questions, I had intended asking him why, as mining magnate Lang Hancock wanted, they didn’t just secede.

Today, just as in late 2007, Australia seems to be experiencing a robust material affluence, shadowed only by a sense that our luck cannot last, that it all might come crashing down. Four years ago, it was spiralling personal debt and rising interest rates that worried many. Now, our sense of insecurity comes from a dawning realisation that the rest of the world is not doing quite as well as us. What if the United States defaults on its massive debts? What if the financial problems of Greece, Portugal, Spain or Italy provoke a general panic that brings the global banking system to its knees? And above all, what if the Chinese economy falters, and with it the market for our iron ore, our coal and our natural gas? Are we, as in the 1960s, a “lucky country” whose luck might be running out?

For the time being, we worry over global financial instability but expect that Chinese growth will continue to shelter us from the storm, just as we once counted on things like tariffs, quotas and fixed exchange rates. But like reliance on those now unloved economic instruments, a heavy dependence on resource exports has its costs. Economists already worry over the effects of the so-called two-speed economy, in which the mining sector outstrips all else, sucking in investment and skilled labour and pushing up the value of the Australian dollar to the disadvantage of other exporters. Conservationists worry over the industry’s damage to the Australian environment and the contribution of our exports to global warming. Farmers are increasingly anxious about the coal seam industry’s damage to land and water resources. International relations experts warn that we are in distinctly unfamiliar territory in having as our major trading partner a revisionist power with which we have no strategic alliance. Human rights advocates remind us that China is a political tyranny in which cheap labour is sustained by suppressing workers’ rights. Sociologists are concerned by the failure of mining companies, with their “fly in, fly out” approach to labour supply, to support regional development or foster community life among families dependent on the industry. And we should all be worried about a mining sector so rich and powerful that it can dictate to governments and pose as the ultimate guardian of the national interest.

How a Labor government seemingly old before its time, and a still relatively new prime minister, respond to these challenges will determine the course of Australian politics over the next couple of years. As a first step, the Labor Party itself will have to resist its own habit of navel-gazing. Its internal problems – which are also part of a larger global crisis for parties of the centre-left – need urgent attention, but not at the expense of considering the really big questions facing Australian social democracy, such as how to respond to continuing financial instability, what the mining boom means for the vast majority of us not directly involved in it, and what kind of relationship a middle-power, Western liberal democracy will have with a dynamic Eastern global superpower with a very different view of itself.

But for the time being, the “carbon tax” needs to be “sold” to a hostile electorate. Tony Abbott and the opposition parties hope this will be Labor’s Work Choices. Labor wants an outcome more along the lines of the Howard government and the GST: political pain followed by triumph. Either way, it will need to learn to tell a more appealing and persuasive story about where it is taking the country than it has so far managed under either of its last two leaders. •