Australia rejects the “loon pond”

Advertisement

Dead Duck Tony is about to depart the Australian prime ministership. The QLD election result makes any excuses, reboots, turns left or right, untenable.

The only question now is what lesson will the Federal party take from the VIC and QLD polls, which will determine the replacement.

If they think it is a messaging problem then they’ll aim to promote one of Tony’s “loon pond” right wing allies – a Scott Morrison, Eric Abetz, Christopher Pyne, Andrew Robb or Joe Hockey etc. That’ll mean a new face on old policies. The argument, or instinct, will be that having wall-to-wall favourable coverage in the Murdoch press with a better and more likable communicator can win the day.

That will be a major blunder and condemn the party to oblivion. Ironically, among the hand-wringing at large today, Paul Kelly sees it most clearly:

Advertisement

While this crisis is about Abbott the stakes are far higher. It is whether the entire Liberal policy structure and economic framework to confront the nation’s problems will crash and burn in its first term on public hostility, thereby delivering office in 2016 to an unreconstructed Labor Party running on a necklace of negatives.

…It is not good enough for Abbott to say he will listen and consult more. Action is the only thing that counts now. There is no way his speech today can satisfy all the demands he faces. But he must make a real fist of proving he intends to recast his style and priorities. If only the problem was just the Duke of Edinburgh and a knighthood.

…It is folly for Liberals to think this is a popularity contest. It is a battle of ideas and the Liberals are losing. ALP leader Bill Shorten has campaigned relentlessly against the Abbott government’s reforms. The issue for the Liberals is how they salvage and recast their agenda.

I will go further. It is the ‘loon pond’ that the electorate is rejecting: the entire operational machine of the Australian Right. That includes policy favouring the wealthiest 1% in reform, handing power to business lobbies and think tanks, troglodyte climate policy, values derived from ideology not reason, political assassination of opponents rather than engagement with them, the arrogance of putting the Party ahead of the nation in all kinds of lies and backflips and, the final cog in the machine, Fox News style wall-to-wall favourble Murdoch press coverage, which blind Freddy can see is bamboozlement.

The US Tea Party political machine – that in the words of Carl Rove believes it can ‘create its own reality’ – doesn’t work in the US, and sticks out like dogs balls in a country where fairness, or at least the appearance of it, is the central national myth.

Advertisement

If the Liberal Party has a brain between them they’ll marginalise the above lot. That could mean Malcolm Turnbull leading the party back to the political centre. Or, reach for a compromise candidate in a political chameleon like Julie Bishop, using Turnbull’s credibility in Treasury. That’s still very risky given Bishop is untested and not strong on economics where the real challenges loom, and any second misstep in the leadership will be fatal. Make no mistake, though, if the policy platform does not move to the centre with new leadership then the party is as dead as Tony Abbott.

For the economy the above is going to necessarily mean some barnacle clearing. The Party will want a period of relative calm so a stalling on reform is very likely but some things have to be righted for that to happen:

  • a move back towards a credible carbon policy. The party cannot afford a rerun of the disastrous G20 humiliation at the hands of world leaders and major allies. When Australia arrives at the Paris UN summit later this year it must be inside the tent. No return to carbon pricing is surely possible (for the Libs ever again given Abbott’s suicide bombing mission) but retention of the Renewable Energy Target seems a low rent way of calling back the dogs and matching basic commitments to new global targets in carbon abatement vital;
  • a renewed Budget reform process that still operates around a nucleus of Budget discipline but redistributes the pain more evenly.
Advertisement

And that’s about it, which is unfortunate given the looming challenges. Don’t expect anyone to pick fights with large vested interests and you can forget substantial tax reform given Abbott and Hockey ineptitude has cemented and sealed over a now radioactive reform well as completely as the Chernobyl reactor. It more or less ensures that the Liberal Party is incapable of guiding Australia around the worst case economic outcome and neuters Australian democracy itself with no pressure on Labor to produce any policy whatsoever.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.