Time for change Down Under

Australia’s next Prime Minister, Labor leader Kevin Rudd surprised some observers here by saying that he is an economic conservative. It’s not surprising in one sense because he supports balanced budgets, keeping inflation low and cutting taxes when this can be done responsibly. But his statement of the obvious is certainly seen as emblematic of Rudd’s approach, he has repositioned his party not just to ensure its return to office but to ensure that if it is elected it will govern in a manner consistent with maintaining and increasing the nation’s prosperity.

Economic policy  was once the foundation of the political strength of the Howard government,  – but Mr Howard has suffered a loss of credibility after nine successive interest rate rises  after promising  to keep interest rates at “record lows” at the last election.,. It is true that interest rates were higher at the end of the previous Labor government but the effect of nine interest rate rises are being widely felt, when 30% of Australian’s disposable income is servicing credit card and mortgage debt.

In any case, most economists agree that Australia’s prosperity over the past decade has rested on two foundations – the China boom and the economic reforms of the previous Labor government. China currently buys all the iron ore, coal and natural gas Australia can supply, despite Australia’s Burgeoning Account deficit. We enjoy a considerable trade surplus with China, for now. So long as China’s boom continues, Australia will continue to prosper, regardless of who is in government in Canberra. The Howard government, increasingly tired and constantly boastful, is happy to claim credit for this when they are a really just relying on the efforts of Australian exporters who rely little on government and who pay an enormous amount in taxes to the Federal Government. Where the Howard government has been left behind is its failure to actively participate in the debate in Australia about how we ensure that all Australians have an equal opportunity to share in that prosperity.


From left Michael Danby, Kevin Rudd and Labor candidate for Goldstein, Julia Mason

The Hawke-Keating Labor government which held office from 1983 to 1996 floated the Australian dollar, deregulated the financial markets, introduced unprecedented levels of competition to banking bringing infinitely better service to Australians and carried out a substantial liberalisation of the labour market. The long-term benefits of these reforms were instrumental in providing the framework for the high growth with low inflation that we have witnessed since then. A full column editorial in The Australian which may mark a decisive turn of the paper against the conservatives argues, “the Government has taken its own 1996 campaign slogan, “relaxed and comfortable”, too literally for the good of the nation. http://www.theaustralian.news.com.au/story/0,25197,22329657-16741,00.html

The Howard Government has in fact been notably timid in following through the reform agenda, its proudest reform boast being a massive new value-added tax, a Goods and Services Tax which has entrenched the government as the highest taxing, biggest and freest spending administration in the history of our Commonwealth. Those doing the heavy lifting in the administration of the GST are small business.

It is a big government, reflected in everything from a building boom in Canberra and a policy tendency to meddle in every aspect of public administration, even those traditionally vested in the states. We have seen Mr Howard, who once championed states’ rights even attempting to interfere with local government boundaries in Queensland. The Liberal Party’s founder Sir Robert Menzies – who championed states’ rights ahead of an intrusive national government - must be turning in his grave at the micro-managing centralisation we see from this Howard government.  

Turning to foreign affairs, Mr Rudd as a former diplomat; whose service was mostly in Australia’s Asia-Pacific region is ready to hit the ground running in representing our interests where it matters most. He speaks Mandarin fluently (so much so he can throw off word puns in that language, wowing audiences and interlocutors alike) and has had long experience with that country, whose role in our region is increasingly important. He worked as a senior China consultant with International Accounting Firm KPMG before entering Parliament in 1998.

Kevin Rudd is also a strong supporter of the Australia-U.S. alliance – which was founded by Labor Prime Minister John Curtin and General Douglas MacArthur in 1942 and has been maintained by all Australian governments ever since. He has been a member of the Australian American Leadership Dialogue since he was elected to Parliament, and is a frequent and welcomed visitor to Washington.

Labor under Kevin Rudd will continue Australia’s non – partisan for tough measures against terror - a position greatly reinforced by the deaths of 88 Australians in the 2002 terrorist bombing in Bali. He supports Australia’s continued military presence in Afghanistan, which he visited in 2005. Labor has given bipartisan support to the Howard Government’s anti-terrorism laws, much to the annoyance of the anti-American far left. Indeed, Labor voted with the government - because we regard the security of the nation to be far more important than partisan politics - on the very day the Government presented us with its most acrimonious class warfare legislation – Workchoices, A policy that pretends to deliver a more open labour market, yet actually imposes over a thousand pages of legislation and regulation on Australian employers and employees. Legislation that created a Workplace Authority bureaucracy with considerable powers to interfere in every workplace, that mandates employers to supply a Government prescribed “information sheet” about employee rights and that has unleashed a 700 person bureaucratic army of inspectors who can show up to any business at any time. 

On Iraq, Labor’s position is that Australia’s troops should be withdrawn in stages, in consultation with our allies, particularly our American friends over the next two troop rotations. Australia will continue to support the Iraqi government in other ways, and our naval and air assets in the Gulf will be maintained. Rudd has persistently and publicly denounced Iran’s bellicosity and I have personally witnessed his formal and excruciating dressing down of a senior Iranian, following President Ahmadinejad’s first threat to destroy Israel.

Foreign policy is rarely a matter of partisan dispute in Australian elections. This election will be decided almost entirely on domestic policy. Some say Labor’s current commanding lead in the polls mainly to voter fatigue with a long-serving government and its leader increasingly seen as a “clever politician” who can be a bit too clever by half. Howard fatigue is certainly a factor, but not the main one. Polls show that the main factor is hostility to the government’s domestic policies, and particularly its changes last year to the laws governing the labour market and workplace relations.

However, it is misleading to say that Labor’s workplace policy is “pandering to the trade unions.” Labor’s policy seeks to strike a balance between fairness for employees and flexibility for employers. Not surprisingly, it has been attacked by the more extreme advocates from both sides of the divide. Labor’s policy has been bitterly opposed by some senior union figures – some have withdrawn support from Labor as a result and are supporting the Green Party.

Labor will roll back some of Mr Howard’s changes, because they are fundamentally unfair and are undermining the living standards of low-paid workers. But Labor will maintain a flexible labor market and will not fallow a return to the days of unrestricted union power. This approach has the support of the moderate majority of both trade unionists and employers, and more importantly it has the support of the majority of voters.

Australian Labor is a pragmatic, centrist, pro-market party, indeed the British Prime Minister Tony Blair, modelled many of his reforms to UK Labour on us. Like him, Labor understands that you must have a prosperous economy to ensure equality of opportunity and that the pursuit of an old Left agenda of equality of outcomes achieves little other than undermine prosperity.

Another area on which Kevin Rudd has asserted much-needed leadership is climate change. The Howard Government is dominated by climate change sceptics who have repeatedly failed to understand that Australia should regard global warming as an opportunity not just a threat. It has escaped the attention of few well-informed Australian businesspeople that one of China’s richest men is an Australian citizen and passport holder who studied solar technology in an Australian university and who moved back to the PRC with Australian technology to make his fortune there. We are entitled to wonder what could have been possible had there been more Government leadership in this area. The Prime Minister’s supposed recent change of heart has not been very convincing. He announced government support for a “cap and trade” system of carbon emissions trading, yet refuses to announce a cap. This market mechanism is clearly the most efficient way of encouraging business to reduce their carbon emissions but the government needs to be bold about making it happen.

I don’t pretend that the Howard Government has no positive aspects to its record in office. Its initiatives in tackling the deep-seated problems of Australia’s indigenous population, long overdfue, although somewhat clumsy, have commendable intent. Labor has supported the government’s legislation and courageous Aboriginal leaders such as Noel Pearson, who has led the campaign against debilitating “Welfarism”. But the fact is that after eleven years, the Howard Government has run out of energy and ideas. This can be seen in Mr Howard’s campaign, which mainly consists of shameless pork-barrelling and personal denigration of Mr Rudd. It’s time for a change, for new ideas and a fresh approach to some of these policy issues. I think Kevin Rudd offers that, and on the evidence so far, the Australian people agree with me.

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