15 January 2008

Not getting it

The Liberal Party believes at its core that as long as you grow the economy, nothing else matters. The reason why the 2007 election is so devastating is that it's clearly possible to lose an election despite positive economic indicators.

The Coalition lost the 2007 election because they weren't using the economic bounty to good effect, in terms of infrastructure and education. People had jobs but WorkChoices made them feel insecure. People voted Labor because they were convinced that they could do so, for the first time in a decade, without either voting for that prick Keating or sending the economy down the toilet.

This piece by Malcolm Colless learns nothing from the last election. In this particular case, Colless is providing the very sort of advice the Liberals can't afford to follow, and is making the same mistakes they are making.
This follows the wholesale attack Labor made on the Coalition's economic management of the country during the federal election campaign.

Not being an insider, Malcolm, the Labor message I saw was that the Coalition wasn't managing the economy in a way that was sustainable, whether you talk about skills or the environment or in terms of people's feelings of general well-being. To set up the straw man (that the Liberals were crap economic managers) and knock it down is a complete waste of time.
With the banks starting to lift their lending rates to offset internal cost pressures ahead of a much anticipated further rate hike by the Reserve Bank next month, Treasurer Wayne Swan is giving a good impression of a novice skater slipping and sliding on the ice as he finds himself in the same delicate position as his predecessor.

Two things need to be said here: first, the newly-elected government will be given some latitude. Second, it's not clear that newly re-elected Treasurer Costello, with his eye on the takeover, would have surfed the subprime thing any better than any other government anywhere in the world is.

Two questions then need to be asked:

  • Do you remember what Costello was like as a novice Treasurer?

  • Do you think that Wayne Swan is a fast learner?

If your answer to both questions is positive, Colless' thesis starts looking sick.
Another major downside for the Government is the fallout from its promise to scrap the Coalition's Work Choices industrial laws, which it exploited successfully during the election campaign.

While it is undeniable there were serious flaws in the way the Howard government managed this policy, there is also no doubt that it contributed significantly to the record low unemployment that Rudd inherited from the Coalition.

What fallout? The Liberals said that WorkChoices was dead, and now they are seeking to preserve some elements of it. This kind of mixed messaging is politically fatal.
Rather than fine-tuning this, Rudd has effectively decided to throw the baby out with the bathwater by opening the door for militant unions to replace flexible individual working arrangements with broad-based, complex and anachronistic award conditions.

He has effectively done nothing of the sort. Militant unions played no role in helping Rudd get elected. He and Gillard have done well in hosing down both their expectations and the kind of fear campaign Colless still regards as viable.
But as recession bites and demand falls, business will come under increasing pressure to lower its costs, with the obvious impact on jobs.

Ironically, these economic issues throw a tactical lifeline to the conservatives as they battle to climb out of the pit of despair at their devastating loss in the election. This is because the issues can be seen as a vindication of the economic management policies adopted by the Coalition in government.

The tactical lifeline to the Liberals depends upon Brendan Nelson being seen as credible as John Howard in his prime. Good luck with that, Malcolm Colless. Your whole article rests on this pathetically weak premise.
At the same time, though, the issues also will heighten tensions within conservative ranks over the readiness by some to jettison key Coalition policies in the wake of the election defeat. In particular, Opposition Leader Brendan Nelson's public announcement that Work Choices is dead is seen as short-sighted, populist me-tooism that has not helped the fightback.

"Of course we need to be forward looking. But we also need to maintain our credibility," one senior Liberal close to the review into the party's future told The Australian. "We ought to be able to handle a changed situation - namely going into Opposition - without throwing out our past.

Whose fightback? Why the token concession to "forward looking" if your main focus is rearguard actions?

It was easier for the Coalition when they lost in the past. They were able to ditch the entanglements that dispatched them to opposition, develop a new narrative, and take advantage of Labor mistakes in order to return to government:

  • 1983: Fraserism died as the tears rolled down his cheeks. Nobody was fighting to maintain Fraserism in the early '80s, not even Fraser himself.

  • 1972: The Liberals rushed to distance themselves from Billy McMahon and the Vietnam War.

  • 1941: The UAP became so discredited that the whole party organisation was scrapped and rebuilt from the ground up.

In 2007, Brendan Nelson is not smart enough to realise that he's strapped into burning wreckage. Those who put him into the leadership, little-state troublemakers like Nick Minchin and Eric Abetz, are precisely those who are stopping him jettisoning those aspects of the Howard legacy that would give him tactical advantage in taking on Rudd.
"The Howard government's success in minimising the impact of the Asian financial crises in the 1990s on the Australian economy, for example, underscores our credibility and experience in economic management," he said.

Yeah, I bet that polled really well, right up there with the credit crunch of 1961. That'll work in 2010 for sure. Good on you Malcolm Colless for unpacking and examining that statement, too.
The immediate challenge for the Liberals is to come up with practical structural reform that will make the party attractive to membership from the broader community while stomping on those who use minority self-interest to marginalise change.

Using what force to do the stomping, Malcolm? Those who resist change and insist on maintaining failed policies - like the person you quoted - should be among the stompees, and not the stompers as your article would have them.
With troubled times seemingly closing in fast, its relevance in Opposition as it builds the long road back to government will greatly depend on whether the new leadership team can convince the electorate that it should be taken seriously.

Seriously unable to face up to past mistakes? Seriously deficient compared to Rudd?

The flaws in this article reflect those in the Liberal Party today. Despite this article's hopeful and resolute tone, it is therefore unable to help transcend them.


  1. "The Liberal Party believes at its core that as long as you grow the economy, nothing else matters."

    Thanks, Andrew, for putting into one succinct sentence what I have been struggling to articulate for some time - why the Liberal Party is stuffed.

    I am a supporter of smaller government and a stronger civil society (non-government institutions and associations). You can only reduce the size and scope of government as you increase the capacity and strength of civil society. The number of people in the Libs who get this can be counted on the fingers of one hand. Since the Libs have become a party of big government populism, they are an impediment to smaller government and a stronger civil society.

    Libertarians don't get it either. They want to shrink government without strengthening civil society, which rightly scares people away like frightened rabbits.

    So where do reformers now go? Both major and all minor parties now share a multi-party consensus about big government.

    What do reformers have to do to stop being 'politically homeless'.

    Vern Hughes

  2. The libertarians underestimate civil society, including the cost advantages of having government provide services like schools and policing. They also underestimate civil liberties (other than gun ownership). Civil society depends on selfless joiners, Vern.