If I have to listen to another elegant whine by Paul Kelly about the death of reform I’m going to embrace Islam. Here he is on the weekend:
Australia is flirting with a double upheaval: in its government and its policy direction as a nation. The crisis engulfing Abbott runs in tandem with ominous messages about a semi-permanent budget deficit, below trend economic growth and a political system unable to tolerate reforms.
Rarely has the prime ministership seemed such a poisoned chalice. What is needed now, above all, is strong government. Yet resolute government is being put into grave jeopardy probably regardless of whether Abbott or Turnbull prevails.
…The consequence of the internal Liberal upheaval will be irresistible. The politicians will try to deny it — but our system is moving inexorably into a “death of reform” straitjacket. The 2016 election is likely to be dominated by political advice to Liberal and Labor not to provoke the voters. This will put Australia on a long-run trajectory of decline and growing unhappiness.
…The backdrop is ominous. New Treasury Secretary John Fraser told cabinet this week that “economic growth cannot be relied upon to address the fiscal challenge”. This shatters one of the fanciful dreams of both the Liberal and Labor parties…Hockey and Fraser said any return to surplus trajectory depended on economic growth of more than 3 per cent plus savings from the previous budget. At present, neither is achievable. The significance of Hockey’s remarks is obvious: if an alternative PM and treasurer dump the structural savings there is no pathway back to a balanced budget.
…It is inconceivable that a Turnbull-Morrison team will not recast economic policy and the political dynamics. But how?
In short, so the argument goes, Australia is painted into a corner because all reform is no longer possible owing to the rejection of Abbott/Hockey’s structural savings.
I accept and have written myself that the “reform well” is now well and truly poisoned and it’s going to take special leadership to cleanse it. But beyond that, Kelly’s argument represents the very closed loop of logic (that is, ideology) that has brought us to this impasse.
Yes, Paul, the dead end is your fault, and the way out of it is for you to admit it.
Let me explain. There is no lack of reform options to repair the Budget and shunt Australia into a renewed drive towards productivity-laced growth. Sure the electorate would hate it but they would still accept it were it pitched appropriately. The Abbott government didn’t exhaust the reform process, it didn’t even do it, pursuing only the measures impacting the middle classes and lower while giving a free pass to business and the wealthy. This reeks of favours for their mates.
This was made worse by the Abbott reforms being delivered within a framework of repairing Labor’s budget mess (the end of the age of entitlement stuff was much better). Labor has countered with accusations of unnecessary and cruel “austerity”. But both are wrong, and the real reason for budget repair and productivity reform has not been described at all: the end of the mining and housing booms.
That brings us to the second reason that the polity is rejecting Abbott reform. Political partisanship may be blocking any sensible description of Australia’s economic circumstances, but media partisanship is ensuring that there is no centrist discourse in which it can be delivered.
And that’s why the “death of reform” is your fault, Paul. You, your clique of media storm troopers, and your boss, are not cultivating that centre ground. On the contrary, you’re driving a very deliberate and very partisan wedge straight into it. The ideology being spun out of the Murdoch press is not reform-friendly, on the contrary. It is an oligarchic putsch by rent-seeking business hostile to markets, biased towards rentier profits over labour income, dedicated to covering-up the disastrous capital inefficiency killing Australian productivity.
This reached its crescendo in your embrace of Tony Abbott, Paul, and your open drive for him to enter the Lodge, even though he and his brown shirts had clearly demonstrated themselves as Tea Party mini-me’s with no idea about effective markets or productivity-driven economics.
Then, when they assumed power and rendered decision after decision in favour of vested interests (except cars which was a disaster in itself for other reasons), you cheered them on, failed utterly to bring them to account, and stoked hubris in their ranks. Philosophical pygmies with very little electoral mandate (other than tossing out Labor) looked into the mirror held up by The Australian and saw giants with their pockets stuffed with political capital.
And so, egged on by your pandering, they produced a Budget of epic folly that spent big on political capital that did not exist. Instead of showing the steady hand of conservative government and aiming to stem a deteriorating economic environment via shared burden over time, arrogance produced a radical embrace of the few.
Meanwhile, media on the Left in Australia seized the commercial opportunity of opposing your increasingly extreme embrace of the 1%. The Fairfax metropolitans, The Guardian and Crikey have occupied the ground on the other side of the political isle and driven a massive wedge straight into the new government. With the Australian ethos of “fairness” on their side, they’ve gleefully “pulled a Murdoch” of their own.
More broadly and worse for liberalism, Paul, you’re supporting an ideology that’s driving the global rise of extreme groups of the Left and Right, most obviously in Europe. It’s simple common sense that liberal capitalism and democracy cannot be sustained on individualism without responsibility, on freedom without ethics, on privilege without noblesse oblige. Without balance, the Tea Party vision is hack libertarianism that is no more than a scab grab for millionaires and billionaires.
And so, bringing it back to Australia and its political economy travails, the Liberal Party is not at all out of options. A very large and completely vacant political centre currently waits patiently for someone to fill it. It’s a space that is chock-o-block with reform possibilities that can revitalise the economy and mitigate the coming post- boom adjustment.
It may not save the Libs given another regicide is likely the kiss of death, but it sure is in the national interest, and so just might. The space I refer to has one gigantic and as yet untapped virtue that will deliver he who occupies it a phenomenal political dividend. That advantage is the truth, Paul, which is that Australia is buggered post mining boom, and it’s both political party’s fault for failing to prepare the nation for it (as well as many other factors). Only a politician with the guts to tell it like it is will now resonate with the polity.
It’s you, Paul, that wrote the defining scripture of Australia’s twentieth century journey to liberal capitalism. The End of Certainty remains a text from which I have drawn tremendous understanding. It is you that is the rudder of the national broadsheet, preventing its complete disintegration into a lunatic pamphlet as deranged as Fox News. Yet it is as plain as the nose on your face, Paul, that your publishing house has been a major force in the destruction of Australian reform.
You can’t see it because you’ve bathed in the loon pond that is drowning the Liberal Party. It has stuck to you now and won’t come off until you embrace apostasy.
