March 12, 2009
The next election is wide open and will be won or lost on a single issue -- economic management credentials
AT the last election, the times that suited John Howard for so long suddenly favoured Kevin Rudd, a fresh face presenting himself as an economic conservative. To many voters, the then Opposition Leader was an updated version of Mr Howard -- hard-headed but with a softer heart. His promises to abolish Work Choices and make a modest start on confronting climate change seemed affordable in the afterglow of 17 years of economic growth and reform.
The 2010 election, which the International Monetary Fund says will be fought in the depths of the "Great Recession", will be a different game. Wide open, regardless of opinion polls, the victor will be the party leader who has the foresight and pragmatism to break free of the current shadow-boxing over industrial relations and other economic issues and embrace the policies that the times demand. Tired, mean and tricky as the Howard government appeared to many after 12 years, an updated version of its economic management would resonate with voters struggling with unemployment and hard times.
If Mr Rudd is to step into the centre and secure his place as long-term Prime Minister, he will need to break free of the Labor Left upon which he relies too heavily for support and in shaping government policy. As a religious, socially conservative former diplomat, policy poindexter and bureaucratic nerd, Mr Rudd won the Labor leadership in December 2006 against all odds. His ambition, energy and the party's desperation after a decade in the wilderness compensated for his lack of a party or union powerbase. Queensland's Australian Workers Union powerbroker Bill Ludwig, for instance, helped him by slamming him as "no friend of the union movement".
In order to win the leadership, Mr Rudd cut a deal with Julia Gillard and her numbers man from Victoria, Kim Carr. He harnessed the Left as well as other disaffected former Crean and Latham backers who were ready to support anybody-but-Beazley. Almost half way into Labor's first term, the consequences of the Left's dominance of so many key economic portfolios is all too apparent with industrial relations and industry policy seemingly run out of a leftist ideological handbook from the Whitlam era.
It's time, in the national interest and his own, for Mr Rudd to realign his base and rebalance his Government's modus operandi by embracing the right -- including the former Kim Beazley camp. That is Mr Rudd's natural support group and the base from which two of Australia's most successful reforming prime ministers -- Bob Hawke and Paul Keating -- modernised the Australian economy.
Nobody, except perhaps Robert Manne in The Monthly, really thinks Mr Rudd, in his essay deriding the market economics of neo-liberalism, "could actually believe deeply what he wrote". As cabinet office head in Queensland, Mr Rudd was dryer than just about anybody on the horizon other than former Labor finance minister Peter Walsh. His economic razor cut a swath through the public sector that earned him the moniker "Dr Death". It was a badge of honour.
In talking up Australia's economic difficulties, Mr Rudd is banking on gaining electoral traction from the power of incumbency. He hopes that voters, in their insecurity, will stick with the status quo. Recognising that the Senate is likely to modify his regressive industrial relations changes and the emissions trading scheme, he sees a chance to keep faith with the Left because the modifications will be forced upon him.
In current circumstances, however, this is second-rate leadership. The futility of Senator Carr wasting billions of taxpayer dollars to prop up uncompetitive industries is self-evident. In her vast portfolio overseeing education, employment and workplace relations and social inclusion, Ms Gillard has delivered big-time for her ACTU and Labor Left comrades an industrial relations system that takes the nation back pre-Howard, pre-Keating and pre-Hawke to the rigid, centralised system of the 1970s. The past 20 years have demonstrated the propensity of labour-market flexibility to generate jobs. In the national interest, Mr Rudd must stamp his leadership on the Government by overhauling and modernising its approach before the damage is too great.
Even more extraordinary than Mr Rudd's lurch to the Left is the way Malcolm Turnbull is imitating his every action when a far simpler strategy could make him prime minister. The message the Opposition Leader should deliver every day until the polls close is that when the Liberals were in power almost every Australian grew richer, year in, year out. And what the conservatives accomplished over 12 years, Labor has undone in a bare three. It's a message Mr Howard knew how to sell when he asked whether voters believed they could trust Labor with the economy, and it is a script Mr Turnbull should memorise.
But caught up in the issues of the hour and determined to impose his own ego on the Liberal Party, Mr Turnbull shows no sign of picking up the plan that is ready-made to win the next election. Like the Government, he wants to bury Work Choices. Like the Government, he supports action on global warming. Certainly his strategy appeals to Liberals with long memories, those who hated Mr Howard during the "wets" and "dries" internal party disputes in the 80s. And it appeals to others with very short memories, who blame Mr Howard for the 2007 election loss and believe that all of his policies were poison then and are poisonous now. But in turning his back on Mr Howard's legacy, Mr Turnbull is dancing away from what can win him the next election -- the record of the Howard government.
Mr Howard's legacy to Labor in 2007 was an economy that had never been in better shape at a transfer of power. By the next election, the Howard years will look like a golden age. It beggars belief that Mr Turnbull is dancing to the Government's tune with his clumsily choreographed positions on Ms Gillard's workplace laws, which he does not like but will not fight. And it is astounding that he is tap-dancing over the detail of the Government's complex plan to reduce greenhouse gas emissions when he could march away from it on the grounds that it will cost jobs. Certainly the Howard government's poorly planned and presented Work Choices policy was largely responsible for the Coalition losing the last election. And Mr Howard's determination to ensure that dealing with global warming did not destroy Australian jobs was sold by Labor and the Greens as old and out of touch. But in changing course on these issues, Mr Turnbull is preparing to fight the last election, not the next one. Back then, voters listened to the Labor and ACTU message that Work Choices allowed unscrupulous employers to exploit low-skilled workers and especially young people in casual jobs.
With unemployment at a generational low, the electorate was not all that alarmed by warnings that the Labor alternative would cost jobs by reducing workplace flexibility and increasing union power. And prosperity ensured many voters were willing to sacrifice exports and economic expansion to cut back greenhouse gas emissions.
All this has changed since the global financial crisis. There is a real possibility that a million people could be looking for work by the next election, many of them young people sacked or never employed because Labor's new wages policy has made them too expensive to hire. And energy exporters, already struggling for sales, say the Government's complex ETS will cost them business. Few voters will be dazzled by these jewels in Labor's policy crown when we next got to the polls. Despite Labor's dominance in Newspoll, people are sceptical about the party. Labor came close to losing in the Northern Territory at the last election, it lost in Western Australia and it is no sure thing in the Queensland campaign. Nor are first-term federal governments guaranteed re-election. Bob Hawke's triumph in 1983 was not repeated in the closer 1984 campaign. Mr Howard's decisive win in 1996 was followed by a near political death experience in 1998 when he lost the popular vote. Mr Rudd's policy surrender to the Labor Left could yet make him a one-term prime minister because in the coming campaign, voters will ask themselves Peter Costello's question from the last one -- who can best be trusted to manage a trillion-dollar economy.
Yet in pussy-footing with internal politics, Mr Turnbull is ignoring his one opportunity -- to compare the reputations of the Labor and Liberal parties on the economy. And Mr Costello knows it, knows the next election will be fought on his issues, the economy and the need for further reform of government. Mr Turnbull must embrace the Howard agenda. If he declines to do it, the party should look for a leader who will. On either side of the political divide, the leader who captures the centre will be prime minister after the next election.