My kingdom for a liberal

Advertisement

The Australian and the pseudo-Australian (sorry, AFR) are engaged in an epic round of Labor-bashing, more virulent even than usual. The cause is Labor’s new rhetorical and policy direction of defending its heartland – the battlers. Both papers have dubbed this a vestigial “class warfare” and condemned it. Matthew Franklyn is typical:

Wayne Swan is openly defying business-sector warnings about Labor’s escalating use of class-based political rhetoric, accusing “the rich” of attempting to “buy and sell” political parties and the media of pursuing their exclusive economic interests.

The Treasurer has also accused opposition counterpart Joe Hockey of wanting to undermine the fabric of society by advocating a “survival-of-the-fittest ideology” that would smash Australia’s “culture of justice” and entrench disadvantage.

Mr Swan’s comments yesterday represent a clear repudiation of BHP Billiton chairman Jac Nasser’s criticism on Wednesday of the Treasurer’s attacks on mining magnates such as Andrew Forrest, Gina Rinehart and Clive Palmer over their opposition to the minerals resource rent tax. They also followed former ACTU secretary Bill Kelty’s call on Wednesday for Labor to stop blaming the media for its poor political standing, which followed Julia Gillard’s claim that the media had not properly reported her achievements.

Ummm…so Labor is an arse for defending labour. Go figure.

Advertisement

Fact is, class warfare is what Labor is about. It’s power base is the union movement. It’s constituency is the worker. They can’t lose by this strategy.

In fact, for me, as an old school liberal, I find it immensely refreshing to see a clearly defined opponent, rather than yesterday’s Third Way liberalism which kind of muscled into my territory. Labor will do much better with this and the more the corporate lacky’s of The Australian and psuedo-Australian attack it, the better it will go. More importantly, although I would rather see a wind back of union powers from their current Spring, especially for small business, I can also acknowledge that there is some truth in the Government line about:

…the Coalition [standing] for interests whose definition of “growing the pie” was increasing their own share. He said Labor would never accept the idea of growing the economic pie by increasing inequality or stripping working conditions from workers.

Noting that Mr Hockey had lauded Korea for spending 10 per cent of its GDP on social programs compared with 16 per cent in Australia, Mr Swan said the difference represented $90bn in spending a year – the equivalent of all spending on health and the aged pension.

“What we have in Australia today is not a culture of entitlement,” he said. “It’s a culture of justice – a ‘fair go’ culture – Australia at its best.”

Advertisement

Labor and Liberal governments have both held the line against the kind of libertariansim that has gutted the US middle classes. And it’s probably true that when Howard forgot this, it cost him government. Even the union crooks have served a purpose in this regard. And anyone resisting billionaires whose only public objectives seem to be to influence debates in their interest is going to get some sympathy from me too.

The only issue I’ve got now is finding someone to represent my views. I certainly can’t find it in the party that stole my ideology as its name, the so-called “Liberals”. From the AFR:

Economists have backed the Gillard government’s decision to lift Australia’s debt ceiling by $50 billion, saying a financial buffer is important to preserve the status of Australia’s bond market as a safe haven during tough economic times.

The Coalition wants a parliamentary debate over the government’s decision in the budget to lift the debt ceiling from $250 billion to $300 billion.

Opposition Leader Tony Abbott again pledged yesterday that a government he led would bring down interest rates, and said the Labor government should not have to borrow more when it claimed it could deliver a surplus next financial year.

“The essential point here is that if the government really is giving us a surplus it doesn’t need to borrow more, simple as that. They do not need to increase the debt ceiling, they do not need to add $50 billion to our nation’s credit card limit, if they are actually getting us back into surplus,” Mr Abbott said.

“Now the fact that they want to borrow more shows that they don’t believe their claim that they will get back into surplus.”

Advertisement

I mean, come on. This is surely only a rhetorical jibe. I suggest a quick trip down memory lane to last September’s debt ceiling debacle in the US. So far as I recall, the “Tea Party” which provoked Republican resistance to raising the debt ceiling pretty much killed itself in the process. Moreover, the global economy is very quickly lurching towards a nasty accident on the combined Greece/China issues. The Government is going to need to be able to borrow and Tony is going to look an arse.

The Labor Budget was pretty sensible I thought, satisfying the ratings agencies but largely palming spending cuts into areas harmless to economic growth. As Warwick McKibbin says in the same article:

Economist and former Reserve Bank of Australia board member Warwick McKibbin said it was better to rein in debt, but only when the economic circumstances allowed.

“It’s a good idea to cut the debt, to run a more improved budget, but you don’t necessarily want to do it as quickly as proposed given the state of the world,” Mr McKibbin said.

And Europe had “looked serious for the last 12 months”.

He said the budget was “stimulatory upfront and then there’s a hole”, so the Reserve Bank would have to decide how it handled short-term stimulus on the economy.

If the European crisis deepened after the impact from cash handouts in Australia to families wore off, the budget would need to be redone, he said.

Advertisement

That’s exactly right. But that’s always how it is when an economic shock arrives.

So, in the end, who is going to represent me? I want a sensible liberal party that runs on reason, seeks a balanced Budget calibrated to the economic times, rewards entrepreneurialism that drives expansion into the global economy, is just as liberal on social issues, taxes the private sector at a level that can sustain the commons, and addresses market failures where they appear with an orientation towards market solutions.

I have long lost hope of finding such at a political level. Malcolm Turnbull was my great hope but he’s a shot duck. Without political representation I used to turn to the AFR for succor and support of my views. Now I have nowhere to go.

Advertisement
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.