How far is Canberra? From Australia, that is. We are entitled to wonder, given the dissonance in our political debate.
Pundits – interpreters of Canberra thought – have laid it out plainly in the wake of an election loss in Queensland that was attributed partly to the prime minister and his government. The consensus is that voters don’t like “reform.” Many in Canberra will share that view, since it makes them feel better about their failures.
Let’s look back a little. More than enough people will recall federal governments that made big changes, especially to economic policy. If we include the Howard government’s GST, we can trace a succession of reformist leadership from Hawke and Keating into the Howard years. The economy went into a prolonged growth phase in which living standards rose sharply on all measures.
So you’d be entitled to think that voters are familiar with reform, have voted for it and have seen the payoff. But the political leadership doesn’t think the electorate has got the message. Certainly its interpreters don’t. In fact, on Monday this week the Australian Financial Review elected to publish an extended editorial on the subject, asserting via a page one puff that “the political choices voters are making will undermine growth and good paying jobs.”
The fact that Canberra thinks the voters are the problem says it all. It explains why leaders appear equivocal. It explains why ministers appear removed from everyday reality. It explains why not much of what is proposed in Canberra gets a positive response. It explains voters’ behaviour.
Things were off the rails by 2007. Kevin Rudd made a lot of promises, but not much rubber hit the road. Julia Gillard undid a public promise on carbon tax, then delivered a damp squib. In between, Wayne Swan completely stuffed up a good tax reform opportunity and invited the backlash from mining interests that now hangs over any similar moves in Canberra. Labor inherited the boom mentality that had fuelled Canberra through the Howard years. Tapping into a long run of growth with the GST, Howard handed out electoral inducements, extinguished debt and created a surplus bank, the Future Fund, intended to cover public sector superannuation shortfalls.
Something went wrong in the political process during those years. The prime indicator is leadership: we have now three PMs on the trot who failed to engage the public with an agenda and then follow it through. Four, if you count Howard’s last election shot. Rudd was the last of them to offer a substantive program, though that turned out to be a flimsy draft that he was incapable of delivering. And his leadership appears to have had other serious consequences, with a number of potentially strong political leaders quitting politics as a result of his disruption. Gillard’s hallmark was the carbon tax, but voters were entitled to wonder how serious Labor was, given that it rejected the option during the 2010 campaign and went on to adopt a tax that had minimal impact on carbon emissions.
Too often, in a middle-of-the-road nation, our leaders appear to be camped out on a fringe. Abbott came to national leadership on a platform of negations. Mostly, he was not Gillard or Rudd. His government would have no mining or carbon tax. No budget deficits. He did add in a giveaway – paid parental leave – but that turned out to be a negative for him. In government, he surprised voters with a budget that was presented, and received, as adversarial. Much of the language evoked the rhetoric of student politics, with cheap characterisations of people who are unemployed or otherwise dependent on welfare.
As voters in South Australia and Victoria witnessed the inevitable demise of motor manufacturing under the weight of an unusually strong Australian dollar, they almost certainly didn’t understand or appreciate the treasurer and other ministers celebrating the demise of “corporate welfare.” And so it rolled on, until the PM found himself in very deep water, only to grab a falling anchor in the form of an unlikely Australia Day honour.
Federal elections have produced ambivalent results throughout this period, and authoritative opinion has been dismissive of the Senate minorities that have ended up with the balance of power. Yet those minorities have seen no electoral risk in blocking substantial parts of the budget and other prominent Coalition legislation.
Like Kevin Rudd and Julia Gillard, Tony Abbott hasn’t offered and delivered credible priorities. In government, all three have played to tribal interests and their narrow priorities and mostly failed to recognise the public interest. It is that intellectual lapse that lies behind comments like Abbott’s assertion that politics is not about popularity but about management. Clearly his idea of management is something different from simply delivering on expectations.
Much as Canberra might regret what it sees as the flawed vision of voters, there is good evidence that voters can see exactly what is going on. Take, for example, New South Wales. Voters in that state have had every reason – made tangible by the dread theatre of ICAC hearings – to be cynical. Yet in premier Mike Baird they appear to have embraced a leader and a program. Contrary to the presumed voter aversion, Baird appears very likely to win next month’s election on a program of asset sales and reforms that are both overdue and obvious.
Why? Partly, Baird must thank colleagues, who have done things with public services that people see and like. Public transport and even simple things like car registration are now very clearly responsive to service level tests. Public servants who do their job with a smile are no longer a rare experience. Baird’s election pitch is a big idea: he has offered explicit outcomes and a reason for the public to accept change. This is how he is different.
Baird seems a reluctant politician. It would fit his persona if he were to deliver a program and then go back to a private life. Whether or not that’s his intent, it gives him a terrific asset. He leaves the strong impression that he’s there to deliver a public benefit, full stop.
When we look at the flaws in leadership that plague Canberra, there is much evidence of people whose ambition is largely fulfilled by the exercise of power. Factional players are the obvious case, but too many MPs also reveal their limits when they perform their ministerial roles. Most of all, very few embrace the breadth of concerns that are manifested daily in the community.
No politician has so far identified the low-hanging fruit in the federal budget – middle-class and corporate welfare – as an obvious first step to improved fiscal management. Some of these are household benefits that were introduced as electoral inducements in the good years. Others include the very large tax concessions to mining companies and banking. The superannuation industry receives an enormous subsidy via compulsion and tax inducements that are extremely hard to justify. It is safe to assume that politicians don’t mention these costs because these industries are among their closest constituencies; you need only look at the flow of Canberra identities into and out of them. Yet dealing with these outlays might be the change the economy needs.
Although it’s highly unlikely that Australians want to improve the employment outlook by reducing their living standards, much of the rhetoric from both sides of politics implicitly suggests this is the case. What is required, in fact, is substantial growth in high-value, high-productivity work of the kind that flows from intellectual property, science, design and other emerging sectors. For that to happen, employment certainly needs to be easier and less bureaucratic. Complying with regulations needs to be less expensive. Labour laws need to provide for complex working environments. And, of course, the burden of government needs to be evened out so that a biomedical startup gets at least as much opportunity as a mining startup.
The economic outlook for Australians has more risk in it than has been seen for two decades. Some of that is the burden created by good times. Some of it is the result of lopsided investment in mining. Some of it – including the imposition of a great big tax in the form of Labor’s compulsory superannuation, which is not tested rigorously for its efficacy – is poor discipline. A focus on the risks will reveal the need for budget cuts, but cuts made in ways that compensate for rising unemployment and insecurity and meet a greater demand for education and reskilling.
If and when Canberra breaks the pattern of failing leadership, it will be with a program that is tangible and relevant to the concerns of voters. If leaders demonstrate the ability to deliver outcomes that make sense they can expect to be re-elected. •