Turnbull’s incrementalism may be the right strategy
In good times and in bad, the federal government’s duty is clear: to keep our country safe and to maximise Australians’ ability to get ahead. This is never easy and could get even harder under an America led by Donald Trump or more likely by a second president Clinton, especially economically.
So, with China inexorably moving to dominate our region; with the Islamist contagion checked on the battlefields of the Middle East but not in the hearts of tens of millions of Muslims; with Russia dangerously destabilising Eastern Europe; and with the world economy far-from-strong, what are we to do?
Essentially, our job remains to make the most of our opportunities while staying true to our principles. Having China as our main trade partner while the US remains our main strategic partner is sometimes awkward but far from impossible. We can’t let Chinese bluster frighten us away from the US, which is still the only country with the strength and goodwill to maintain a benign, rules-based global order. But we shouldn’t let US’ anxieties stop us from doing what we can to build bridges to China as well as make profits there.
Australians tend to think of our country as a global minnow. But in fact we are the 12th biggest economy with commensurate military power and are , or soon will be , the world’s largest exporter of iron ore, natural gas and coal. We are strong enough to be a useful partner but not to be an intimidating one.
The Turnbull government has maintained its predecessor’s military commitment to the campaign against the caliphate. While momentum seems to have stalled on the Australia-India free trade agreement that Prime Minister Narendra Modi wanted when he visited in late 2014, the federal government is vigorously pursuing a post-Brexit trade deal with Britain.
The government is right to urge China to stop its land-build in the South China Sea while at the same time keeping an Australian freedom of navigation exercise in the back pocket. Moreover as PM, Turnbull seems to be doing a better job with Indonesia’s President, Joko Widodo, than his predecessor.
Ultimately Australia’s international standing depends upon our economic clout. It’s frustrating to everyone who just wants to build a better world but there’s no getting around the fact that to do so, we need to harness our economic resources. Hence, under difficult parliamentary conditions, especially in the Senate, the Coalition is trying its best to make savings and is cutting taxes to stimulate economic growth while trying not to be politically provocative.
Indeed, the Turnbull government seems to be slipping into a kind of “conservative incrementalism”: maintaining the rhetoric of being open for business while calling out market failures. It’s not very bold but it might be the most effective way to build confidence in the economy and trust in the community.
The biggest obstacle to the best possible future remains a Labor Party that is entirely unrepentant about its mistakes in office and is quite oblivious to the reform legacy of Bob Hawke and Paul Keating.
Labor’s insistence on a banking royal commission is political opportunism and economic vandalism. The four big banks alone employ about 200,000 people , as many as the mining industry. Millions of Australians have shares in them directly or through their superannuation funds. If we think profitable banks are bad, wait till we have unprofitable ones!
Next to a 9/11-scale terrorist atrocity, a major exchange of fire in the South China Sea or a new Russian attack on a former Soviet country, by far the biggest threat to our well-being is another economic crisis for which a bank failure would be the most likely trigger.
Our banks’ strengths helped to save us from the GFC. Yes, a number of individuals have been ripped off and small business is not getting a fair go. Yet surely it’s best to tackle specific problems than trash the whole system?
Ross Fitzgerald is emeritus professor of history and politics at Griffith University, and the author of 39 books, including a memoir ‘My Name is Ross: An Alcoholic’s Journey’.
The Canberra Times & The Sydney Morning Herald & The Age Online October 15, 2016