What goes around comes around for Abbott

ScreenHunter_03 Jun. 26 21.56

By Leith van Onselen

Business Spectator’s Rob Burgess has written an interesting article today in Business Spectator explaining how the Tony Abbott’s phoney war against the carbon tax, which he used to great effect against the former Labor Government, risks biting the Coalition’s backside now that it is in Government:

One of the really difficult things about the Abbott government’s first term will be explaining to voters why – if the carbon tax repeal goes ahead – their standard of living continues to be eroded.

…repeal or no repeal, the bigger issues that should have been debated in the House (but weren’t) are coming home to roost…

Let’s start with rising unemployment… abolishing the carbon tax was supposed to fix that, remember? We will now watch relatively good GDP growth during the volume phase of that boom without jobs growth, and by 2016 realise that the carbon tax had little bearing on either…

Then there’s [rising] inflation…

Put those… factors together… and voters must realise that the carbon-tax impost on the 5 per cent of their income they spend on energy really didn’t matter at all…

There’s not a lot that is fair in politics. Tony Abbott got away with murder as opposition leader, killing off Labor’s electoral prospects with the blunt instruments of carbon pricing, boats and debt and defict.

Now, as structural forces way beyond his control ravage Australia, there will be little that’s fair about the negative press that generates for the Coalition.

Burgess highlights how a Government’s fortunes are often beyond its control when it comes to economic management.

The Howard Government was seen as an economic superhero not because it was special, but because it governed during a fortuitous period in Australia’s history, namely: the biggest terms-of-trade and credit booms on record; a benign global economic environment; and favourable demographics (including an ever growing share of workers to non-workers).

Today’s Government faces starkly different circumstances. Not only is the terms-of-trade likely to continue to fall as commodity prices retrace – weighing on both disposable incomes and nominal GDP – but the working age population will shrink over time as the baby boomers enter retirement – reducing the tax base and raising aged-related expenditure – and unemployment is set to fall as the once-in-a-century mining investment boom unwinds.

It will be a difficult period to be in government, requiring more than slogans like “stopping the boats” or repealing “Labor’s big fat tax”.

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Unconventional Economist
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  1. surely they can just say it would have been worse under a labor government… it’s what both sides have been saying forever.

  2. It’s awesome.

    It’s going to firmly lodge in the minds of voters that actually, the “good for the economy” meme was not actually true at all.

    Who knows? Maybe some people will evaluate their voting position more thoroughly and not simply do as they’ve always done.

    Maybe it’ll click that government policy shift results are never instant, rarely within one term and often far beyond the political careers of those in power.

    Look at all the changes Keating made – and how bloody long it took for very sensible reforms to gain real demonstrable traction.

    And look in contrast at the bread and circuses of Howard, which led to a doubling in real terms of the costs of shelter.

    • What?! Hawke/Keating introduced negative gearing deductions against other taxable income. Supply issues are the domain of the states. The 50% CGT discount was introduced by Howard/Costello but that’s just one factor amongst many. Howard/Costello also made borrowing within a SMSF possible but Rudd/Gillard made it attractive… so tell me again how it’s all Howard’s fault?

      • That’s what shits me to tears about the quality of debate in Australia; pretty much every debate is reduced to Labour vs Liberal. Quite frankly, they’re both dismal failures, each blessed with a unique ability to fuck up in a way no one could ever imagine possible. Just when you thought the high bar of stupidity couldn’t go any higher, these ass clowns bless us with yet another annoucement that leaves you rocking in the fetal position. We’re royaly fucked if this is the best we’ve got.

      • You’re on the money, Wing Nut.

        There is virtually no debate in the mainstream media about whether any particular policy is good or bad policy, just whether Labor’s is better than Liberal’s or vice-versa.

        Still, when members of the public exalt Keating as the doer of all that is good, Howard as the root of all evil and insist Liberal voters must be mindless drones that do as they are told, maybe the media is an accurate reflection of society.

        I’m not sure which is the tail and which is the dog.

      • Wing – hence my comment below. There is little to no attempt to dissect issues and address remedies by the media which is intent on deepening the political divide.

        As Delusional Economics famously said “we need an adult conversation about the economy”.

      • At some point it all erupts one way or another fellas. May not be tomorrow, but nothing as foetid as Australian politics current policymaking last forever, simply because at some point the coziness makes a blunder.

        At tome point either we wake up one day with our own home grown revolutionary types in play, or our elites want us to head off and defend the nation and find the locals arent enthusiastic about that or something like that. Being here is a lot like watching a bizarre movie which makes no sense. Its time for a spliff.

      • Gunnamatta, i was hoping things would improve without the guillotines being rolled out. But I don’t think it’s going to erupt any time soon, it’s been like this since Whitlam, probably before.

      • That’s pretty rich coming from you, 3d.

        It makes more sense when you imagine him saying it with pride.

  3. Looking on the bright side.

    Tough times are a wonderful opportunity for real leaders to shine. When times are easy – just turning up and smiling, handing out prizes to all contestants and kissing a few babies will be enough to look good.

    In theory – difficult times and a real challenge should be something that Tony Abbott will thrive on.

    Think boxing, long bike rides, dodging great whites in a pair speedos.

    But the penny does not yet appeared to have dropped to members of the government that the easy options are drying up faster than the drips of an icy pole during a heatwave.

    Abandoning the carbon tax and not the carbon tax spending is becoming an exercise in magical thinking.

    But it is still early days and there is still time for the government to wake up to a new reality.

    Starting peddling Tony.

    • I suspect you meant to type “pedalling”, in context of your earlier exposition.

      Be that as it may, I am glad that you typed “peddling” instead, as this is precisely the activity that Abbott (and all Oz politicians) traffic in.

      Pun intended.

  4. Clearly the punters are going to learn very little if they continue to read Burgess! Hopefully the remaining media understand the economic forces and structural change to hand and possess both the ability and desire to inform readers.

    • If only we’d had at least one natural resource we could have exploited and even captured some of that wealth along the way. I envy Norway and Alaska and their good fortune. If only we were born in a country with such resources nearby.

      They even managed to save a little for themselves along the way, even those well known socialists in Alaska.

      Maybe one day we’ll strike it rich.

    • The remaining media?

      By jove! Is there any? All I can see is a commercial broadcast media gripped by the nads by the FIRE sector (and mining where required), Uncle Rupert and Fairfax gripped by the nads by the FIRE sector, and the ABC gripped by the nads of a government gripped by the nads by the FIRE sector.

      There is a precedent for all this. Just about every tin pot dictatorship buys out the media and clamps down on expressions of dissent. The Australian ALP and LNP husbandry of vested interests, oligarchies and exploitation of natural resources is broadly the same as that in Russia. All we need is for TestosterTone to come out with some bare chested horseback shots and some strident words on gays and we are pretty much there.

      Although Russian well to do types make sure they have a foothold somewhere outside Russia for those moments when things get out of hand, or when their shameless exploitation of everyone else gets exposed in whatever media form still exists to carry it.

  5. rob barrattMEMBER

    As Flawse stated a while back, it all went off the rails years ago. I was fascinated to read in this weekend’s Australian about how we intend to embed stories of indigenous culture in our Maths & Physics curriculum. In my day we had a thing called History classes that did that sort of thing, but then, what would I know?
    I bow to the new masters of our children’s future who will ensure they have the scientific education to compete in the leading edge of technology..

  6. Anyone who believed the Carbon Tax was a huge drag on the economy is deluded anyway. This will be proven shortly. Electricity prices for example have been on a massive upward trend the world over for years, so something like the CT is relatively insignificant when viewed in that context.

    I think the public is increasingly switched on to business lobbies moaning about tax and regulation. Its transparent that its just posturing to try to squeeze some more rent out of the economy.

    Not that too much tax and regulation is a good thing, but the point is – it wouldn’t matter how little there is, business would whinge anyway to try to get on the front foot.

  7. For those hoping for a one term Abbott government I’d be prepared for disappointment.

    Bad economic times are quite good for right of centre parties. Good times better for the left.

    LNP will say it is was all Labor’s fault and most people will believe them.

    Then they start the “we stopped the boats” mantra and Bogan Joe and Jane will say “At least Abbott stopped the boats” and he’ll get re-elected.

    The boats issue is what has gifted Abbott two terms of government. Labor’s failure in this area was absolutely massive political own goal.

    It is a pretty easy issue to solve if you really want to do it as Abbott is showing now. No boats for over a month and 90% reduction since election.

    And every time the Greens and ABC bang on about how cruel the LNP are being, Abbott’s smile gets bigger and bigger.

    Please Labor learn this one political lesson, you cannot be to the left of the LNP on boats. Your bogan base doesn’t understand subtlety on this issue.

    • Labour can’t win by going right on boats, as Rudd already proved.
      No one on the right believes they’ll follow through, and everyone on the left is disgusted and deserts them for the greens.
      The only way forward on the boats is to find another issue to replace it with to steal the whole thing of oxygen. Maybe housing affordability?

      • Rudd went hard left early when he removed most of the LNPs refugee policies, then tried to do a 180 in the last months of the Labor government.

        The damage was done. Labor had no credibility on the issue.

        Bob Carr admits this here.


        On some issues you’ve got to deal with where people are politically not where you’d like them to be.

        This is the strength of politicians like Howard and Abbott.

      • Rudd went hard left early when he removed most of the LNPs refugee policies, then tried to do a 180 in the last months of the Labor government.

        At no point in the last 15-20 years has anyone gone “hard left” on refugees.

        There have been brief periods of straightening up the constant swing rightwards. Outside of that, it’s been a persistent competition to see who could dehumanise and mistreat refugees the most ever since Howard took power.