Need for strong leader in tough times
WHEN John Howard first spoke of a relaxed and comfortable Australia 16 years ago, his critics labelled him small-minded and lacking vision.
But in the new year, this would strike a chord with many who are looking for stability and certainty in the face of the increasingly uncomfortable events circling us.
Every day we see media reports from around the globe painting a picture of instability. Whether it is financial and political upheaval in Greece and Italy, the Occupy protest movement, instability throughout the Middle East, or the possibilities of worldwide earthquakes, floods and tsunamis, we are facing an ever more uncertain world in 2012.
Few doubt that Australia is a fortunate country. We are blessed with an enviable way of life, great weather, abundant natural resources, a spirit of enterprise and a willingness to have a go. We also have a track record of stable and sound policy-making, where business and investors have a high degree of certainty that they will not be subject to inconsistent and changing policy decisions. This is something we must not take for granted.
Consumers are not unlike businesses and investors in their desire for stability and certainty – to know the field on which they are playing and a game where the rules are not changing day by day. After four years of federal Labor government they are not getting that. Decisions are moving too quickly, and there is much more focus on the next headline or photo opportunity than getting the right outcome for the nation. This has led to a sense of reform fatigue and uncertainty.
Investors and consumers are now increasingly cautious. As one long-time observer of federal politics remarked to me recently: “They are looking for a safe pair of hands to guide them through the uncertainty that lies ahead and they have no confidence that the Julia Gillard government is up to it.” Confidence has been eroded by a series of policy changes and backflips.
Take for example the carbon tax. Just five days before the 2010 election the Prime Minister made an iron-clad promise that there would be no carbon tax. Then six months later she retreated. The mining tax has also left business and the public confused.
But for many it was the ban, and then reversal of the ban, on live cattle exports that sums up the Gillard government’s approach to policy making. Faced with a bad media story one night on television, the government moved to ban all exports of live cattle to Indonesia, without warning and without negotiation. It left an entire industry in the lurch and unfairly maligned. Then the penny dropped and within weeks the ban was lifted, leaving our nearest neighbours scratching their heads over whether Australia remained a reliable place to do business. This has certainly contributed to significantly fewer Indonesian orders for Australian cattle in 2012 and beyond.
For four years now Australia has witnessed waste on a grand scale. The Building the Education Revolution wasting up to $8 billion; about $2.4 billion wasted on pink batts in roofs, laptops in schools, the solar homes program, and $300 million in green loans before the program was scrapped. And all that before the $50 billion on the NBN without a business case, and those $900 cheques to dead people and people living overseas. Then, just 48 hours after the government had appeared to get the message in its slash and burn mini-budget, our federal politicians were at it again, being awarded big future pay rises that could make Ms Gillard’s salary higher than that of the US president.
Australians are looking for more from their national government. We are willing to listen to the message that now it is time to tighten our belts, but only if the government leads from the front and does the same itself. This is the overwhelming lesson from the current turmoil in Europe – that governments must live within their means. Most governments are net borrowers of money and, just like any citizen with a home loan, this comes with responsibilities. Lenders will be tolerant and patient to a point, but there comes a time when the debt will be called in. Some European nations notably failed to heed the warnings and were spending well beyond their means – with catastrophic results. Australia must not be allowed to take the same path.
While Australia is relatively well positioned to ride out the increased global uncertainty that almost certainly will come our way, we could be in better shape. Recently, much of the political debate in Australia has been focused on the economy. The opposition has been demanding the government commit to its promise of returning the budget to surplus. Some economists disagree with this, arguing that, in light of the economic and fiscal crisis in Europe and slowing growth in China and the US, running a deficit at this time would be acceptable. But there is no way the Coalition will give Labor a leave pass on the surplus or indeed that federal Labor would find a deficit next year in any way acceptable.
It is clear the state of the economy will be central to the next federal election, with both sides battling to seize the mantle as better economic manager. Despite Treasurer Wayne Swan’s solid work, this is an argument the Coalition seems to be winning, recently extending its lead over Labor as the preferred economic manager. The Coalition’s message is simple – “Tax cuts without a carbon tax” – and it is resonating with voters. Joe Hockey leads the Coalition’s economic team, and along with opposition finance spokesman Andrew Robb, upcoming West Australian Senator Mathias Cormann, and former Peter Costello adviser Tony Smith, is keeping the heat on the Gillard government. But Hockey in particular needs to keep upping the ante to counteract the essentially unfair perception that he does not work hard enough. This is important because, apart from the Employment, Workplace Relations, Financial Services and Superannuation Minister Bill Shorten and Defence Minister Stephen Smith, increasingly the ALP’s most reliable foot soldier seems to be Swan himself.
The Coalition will use every available opportunity to remind voters of its economic record – repaying Labor’s $96 billion debt and running surpluses in 10 out of 12 budgets that helped deliver real tax cuts. Tony Abbott and Hockey will continue to remind voters that, just four years ago, we had no debt. In fact there was $45 billion in the bank and the budget was in surplus. Net debt has now soared to more than $130 billion. There have been four consecutive budget deficits and citizens are starting to wonder whether Labor will actually be able to deliver a surplus and start paying down Australia’s credit card. And this at a time when most ordinary citizens saw the Labor Party’s national conference dominated by what many considered fringe issues, especially gay marriage and uranium sales to India.
The government must get back to core business. Australians are facing ever increasing cost-of-living pressures and, while the cut to interest rates is certainly welcome, the cost of food, electricity, schoolbooks and clothes, petrol and health care continues to weigh down the family budget. As international economic storm clouds strengthen, and with even Labor signaling that unemployment in Australia is on the way up, workers and families are beginning to feel increasingly uneasy over their futures.
Twelve months ago some commentators had written off Gillard suggesting she may not see out 2011 as Prime Minister. Labor has been floundering in the polls since the carbon tax promise was broken in February, but despite many predicting a leadership challenge, a defection of one of the independents, or the resignation of Craig Thomson bringing down her government, Gillard is still standing. But at what cost?
The challenge for Labor is to re-engage with the electorate. However some astute watchers maintain that it is too late for that. The ALP’s primary vote has flatlined in most major opinion polls and Gillard’s approval rating remains largely negative among voters who appear to be unforgiving of the way she dispatched Kevin Rudd 18 months ago and also of her carbon tax lie.
That is not to say all is lost for Labor. Many remember the perilous situation the federal Coalition faced at the start of 2001. First in the West Australian and Queensland state elections and then the Ryan by-election in Brisbane, the Liberals were annihilated. The Coalition’s stocks looked so low that few opinion leaders were prepared to entertain the prospect of Howard winning the election due later that year. But history shows how, once he re-engaged with the electorate, the voters started listening again. Soon after, the opinion polls swung back Howard’s way.
Gillard and federal Labor should take a lesson from this. The electorate can change its views, but first this government must get the political, economic and fiscal fundamentals right. At the very least, Labor must resolve, one way or another, what Abbott rightly terms the poisonous dysfunction between Gillard and Foreign Minister Rudd, who the PM should have sacked in her recent ministerial reshuffle.
It also needs to sideline the MP who remains its weakest link in the revamped Labor cabinet, Communications Minister Stephen Conroy. This is because Conroy has overseen both the national broadband debacle and the very dubious deal that gave the $223 million Australian Network contract to the ABC instead of preferred tender Sky News.
Above all, the federal Labor government must restore confidence to consumers and to business. There must be an end to the chaotic policy approach that delivers little but instability and uncertainty. Australians want, and rightfully deserve, a government that will restore trust and confidence. Not to do so poses too great a risk as a great many Australians face this new year more than somewhat anxious and uncomfortable about the future.
Ross Fitzgerald is Emeritus Professor of History and Politics at Griffith University.
The Daily Telegraph, January 06, 2012, pp 30-31