It’s a funny thing that’s happened to Labor economic policy and narrative since the return of Rudd. For the immediate future, it’s mostly positive with the nation finally being offered a story that makes sense. The post-China boom tale is true. The need to manage an economic transition is true. And the need to restore productivity growth and competitiveness is true.
This compares with what we had before from the Gillard/Swan show that Australia was different, that households lack confidence and that billionaires were to blame for everything, which was obviously false.
The Rudd/Bowen narrative also compares favourably with the Coalition economic story, which is even more disconnected from reality: that all of our problems are a result of excessive government debt, mismanaged spending and the carbon tax.
The curious thing about what’s happened to Labor is that although the story has changed, policy is almost exactly the same. Sure, there’s lots of motherhood statements about competitiveness and productivity as a way over the mining investment cliff but the only substantial shift is accelerating the carbon price shift to a floating market one year early but, as I argued yesterday, if anything the accompanying cuts will only create fiscal drag, which to me contradicts the ‘post-China transition management’ narrative.
When we look back at the actual policies of Wayne Swan, he was engaged in Australia’s largest post-war retrenchment in public spending. It may have been out-of-step with economic reality, but it was very much consistent with his narrative that Australia is different and the good times are when it’s time to save.
Today’s press offers a number of favourable assessments of Bowen versus Swan. Geoff Kitney at the AFR is typical:
Where Swan was growling-like and technical, at his first National Press Club appearance as Treasurer, Bowen was measured and calmly assertive.
Where Swan went into the political battle in the armour of class warfare, Bowen appears to prefer a less confrontational, matter-of-fact style.
Maybe it’s because he is still digesting the mass of data contained in the briefs delivered to their new boss by the federal Treasury, but Bowen preferred to speak in big-picture-narrative terms than to get bogged down in detail.
The reaction of the National Press Club audience to the contrast with Swan was positive.
But this first outing left open a critical question about Bowen. Is there substance where there is style?
Good question but not one likely to be answered by our press (as anyone watching the trivial questions in the Q&A yesterday can attest).
How is Labor going to boost our competitiveness for the post-China era? Gonski and the NDIS are productivity policies that can help in the long run, when we’re all dead. It doesn’t mention the dollar. It won’t change Fair Work. It’s ruled out a new Accord. It’s committed to a surplus so infrastructure is out. Where is our productivity surge and real depreciation to boost competitiveness going to come from?
To my mind the Rudd/Bowen show remains ahead of the Coalition whose narrative and platform are vestigial at best. Public job cuts, a smaller NBN, removal of the carbon price, and a defunct economic model of private debt accumulation are not policies for the times. But at least it’s consistent.
No doubt getting ahead of the Opposition is the point. As I’ve said many, winning elections these days is about pushing your opponent off the middle ground on only a few key policies. The Coalition is aiming to do it with boats. Labor is aiming to do it with LNP austerity.
Given the Coalition’s small target strategy and our hapless media, Labor can perhaps get away with it. But there’s not a lot going on to suggest that it is actually preparing to deliver on its commitment to manage the transition to a post-China boom economy.
