In Australiar, the logical choice is hung parliament

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Another hung parliament. Lot’s of bodice-ripping and hand-wringing all to no avail. This is not a result out-of-the-box. Nor is it irrational. It is the logical end point of two simple facts, that Australians do not know what to about their falling standards of living and, second, the choices they are being offered to turn it around do not even acknowledge the reality of point one, let alone offer a path to turn it around.

It seems extraordinary to have to say so, but to run a government a political party has to offer one thing above all else: internal logic that addresses reality. That doesn’t mean it needs to be all things to all people, nor that it needs to distort its values, it just means it needs fundamentally to be honest about where the country is at and, from that starting point, fashion its values in an appropriate plan for that reality, modulated with the national identity.

Consider for a moment the two great governments of the past thirty years, one for either side of politics. Both had internal logic.

The Labor Government of the 80s and 90s embraced the liberalising reality of its time. It made plenty of enemies by doing so but the social and economic forces of the day were global and irresistible. It addressed these with arguments that generated policy enabling the dismantling of many closely held protections for Australian households and business that were considered essential pillars of egalitarianism.

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The Liberal Government that succeeded it inherited both the economic success and the social tension that the liberalising Labor path delivered. It persisted with liberalisation and dealt with rising discomfort about globalisation in the community by promoting social conservatism, preventing refugees from slipping through the borders and committing Australia to the US alliance. You may or may not agree with these policies but they do follow an internal logic of having open economic borders while sealing other membranes that separate us from the world. The result was again a balance of internal logic based in reality that the Australian identity could accept.

Since the 2008 GFC, governments on both sides have faced unprecedented structural economic change but rather than recognise it, and work with it, each has instead reverted to its lowest common denominator ideology. While reality rotted on the vine, both political parties have withdrawn into myth – on the Labor side fairness, taxes and spending and on the Liberal side, tax and spending cuts and stopping boats. Neither has addressed the simple reality that Australia is increasingly a loser from globalisation as standards of living fall and the environment goes to Hell. The two parties are like an ideological metronome that assumes perpetual motion. They have forgotten that it is the people that push the needle one way or another.

Another way to put this is that deliberately or otherwise both political parties are now liar machines. IT is inherently dishonest to impose ideology upon reality versus modulating values to it. We’ve seen this over and again in four successive governments and in this election it surely reached grand new heights.

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On the Labor side we had a backstabbing unionist responsible for the slaying of two previous PMs running a campaign based around “fairness” without giving a second thought to addressing our deteriorating economic circumstances. It seemed almost by good fortune rather than design that it put forth the only good policy of the campaign: negative gearing reform.

On the Liberal side we had a social and economic enlightenment leader grafted onto a pack of entitled uber-conservatives, a violent yoking of opposites that ruined the credibility of the former while failing completely to hide the lunacy of the latter. The policies of the two-headed abomination were paralysed by division as one head spouted a string of reform ideas, the other bit it clean off. In the end it carried just one policy to the election in a giant loser of a corporate tax cut while resisting in most toxic fashion the only economic policy of substance in the entire campaign: negative gearing reform.

Neither party was honest about Australia’s deteriorating circumstances, nor the sacrifices that will be necessary to fix it. Neither party connected with the reality that household’s standards of living are falling, a fact that they recognise every time that they open a bill, get caught in a traffic jam, lose hours at work or watch their kids leave the country out of sheer frustration at their prospects.

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And so, with no option to connect to, the polity settles in the centre. Each election is not a perpetual motion machine where the polity swings metronomically back and forth between party polarities. Sure, you can win individual elections by manipulating fears, hopes and needs. But you can’t rule that way or you’ll get found out quick smart. The polity is a living and breathing thing that demands internal logic address its circumstances.

My fear now is not that we have a hung parliament and that that will destabilise policy further. That is entirely consistent with the failure of the political parties. After four successive governments dedicated to lying, my fear is that the truth will no longer be recognised if it stumbles into sight.

If that happens the only cleansing regime for Australia and its economy will be an outright crisis that becomes inevitable.

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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.
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