10 May 2011

The last chance

And in the master's chambers they gathered for the feast
They stab it with their steely knives but they just can't kill the beast

- Eagles Hotel California

Niki Savva should just come out and say that this week is pretty much Abbott's last chance to make an impact as a potential Prime Minister, but apparently she can't. Despite our pitiful record at prognostication, we here at the Politically Homeless Institute contend that:

  • The Coalition should be going into this week with an unassailable record on economic management, and it isn't; and

  • The Coalition needs to come out of this week with such a record, and won't; and

  • Because of the above two points, it is setting itself up for failure at the next election (and thus the impossibility of Tony Abbott as PM).

Let's see how this week pans out, but it's clear that Abbott cannot lift his game. Swan need only stay on his feet and produce a Budget of the kind of dull competence that John Kerin produced in 1991 to keep his reputation as the default economic manager - and hence to give Labor the default choice at the next election, where the Coalition will have the burden of proof placed upon them.
If ever there were a time when the government needed its two most senior people to be at the top of their game, this also is definitely that time, especially as there were suggestions an always alert Kevin Rudd was taking a keen interest in proceedings at the weekend.

Instead, there is little expectation that the budget, tough or soft, will concentrate debate for any extended period, or in any favourable way, on an area usually regarded as a government's strength: that is, the economy.

Nor is there much hope that the Prime Minister and her Treasurer are capable of conducting that debate with authority and conviction.

Take out the reference to the gender of the incumbent Prime Minister, and those three paragraphs could have been written about the first term of Howard as PM and Costello as Treasurer in 1996-98. During that time, Savva was Costello's chief spinner and was frantically burning through her credibility with the press gallery claiming that her L-plated boss was in fact a gold-plated professional when it came to putting together sound budgets, at a time when this wasn't necessarily the case.

The mining boom could encourage increased spending and motivate reform, while consumer reticence could encourage cutbacks and conservatism. Big-picture reforms will make the economy lurch one way or the other (and hence will voters at the next election): this is a time for small-picture tinkering, not sweeping big-picture stuff.

The economy is so contradictory that pretty much any reasonably likely outcome can be spruiked by the government as a win, while any opposition can just be written off as predictable naysaying. A bit extra for mental health funding, a bit of stick for the longterm unemployed (given the fact that we're pushing full employment, surely there would be a fair bit of overlap between the longterm unemployed and those in need of mental health care), a bit of a cut to company taxes, and everyone's satisfied rather than happy.
Swan began his pre-budget sell with warnings of a tough budget, with the government having to fight with every fibre it possessed to get it back into surplus, then finished by showering people with everything ...

Yes but he's been pulling this trick for four years now: warnings that things are going to be tough, combined with handouts, followed by a budget that is neither 'hard' nor 'soft' but good enough for the likes of you.

Surely the whole idea of having someone like Niki Savva is that she can draw on history to some extent, rather than engage in nostalgia about Costello's office that seemingly has no bearing to the situation in which we now find ourselves. People often don't learn from history, but history that can't teach anything even to someone who has lived through it is pretty poor stuff.

Savva goes on about Swan's inability to say the word b-b-billions in 2009: but if he was being advised by someone like Niki Savva, what would he have done differently? Yes, it was ridiculous, but he stuck to the script like a good boy and he's still Treasurer. Savva fails to explore that conundrum: had Swan been more up front would his party have won more seats, fewer or about the same? Would the economy and the budget be in a better position, a worse one, or is the difference so nebulous that only press gallery hacks really give a toss?
Swan's public performances in what is a pivotal role have failed to help lift the government's standing.

Normally the deputy cum Treasurer can be relied on to step in and do the heavy lifting, or help bolster a government under constant fire from every direction. Until she knifed Rudd, Gillard fulfilled that role perfectly. That is not happening now.

Normally, the pre-Budget period is usually a period of silly speculation by the press gallery, where the Treasurer is too busy to respond to every trifle going around, and this is no different. Savva should know that. Julia Gillard was never Treasurer, which Savva should also have known.

The widely-held notion that the BER was an unmitigated disaster disproves Savva's thesis, as neither Rudd nor Gillard made an aggressive defence backing up the 97% success finding from the Orgill Report. You'll know that this government has some life in it when some Opposition frontbencher frames a question relying on that assumption, and Gillard rips them a new one.
Also during the pre-budget sell, prime ministers hold back, mainly because treasurers tend to be extremely proprietorial and have been known to resent the intrusion, especially after they have told everyone how hard and how lonely and how emotional it was pulling it all together, and almost entirely on their own.

Like hell they do. It is a dead-set lie that John Howard respected that convention with regard to Costello, or that he wasn't sticking his oar in right up to the last minute. The incumbents might not be the best government we've ever had but contrasting them unfairly with their predecessors is just risible.
Then in a killer blow on Saturday she all but buried the budget by adding to the bottom line a price tag for her pride: $300 million for the peculiarly Australian form of importing and exporting the world's unfortunates.

Compared to the $1b for the Nauru "solution", it's a bargain.
There is a vacuum at the top crying out to be filled.

It should be by Tony Abbott.

Yeah but it isn't, is it.

John Howard maintained a reputation for economic competence throughout 1983-96 by having the courage to move away from the positions he had held as Fraser's Treasurer. For all the criticism you can heap on Howard for his disloyalty to any leader other than himself, Howard could have easily engaged in whiny self-justification and doggedly refused to admit the economic policy of the Fraser Government was flawed in any way. He nimbly embraced the deregulationary ethos of Hawke-Keating, cementing it as in the national interest (with a few quibbles here and there to keep things interesting). In 1993 he had enough credibility to contradict Hewson a week before election day, and damage not himself but Hewson; three years later he had replaced both Hewson and Keating.

Tony Abbott was an economic lightweight, he is an economic lightweight, and he always will be an economic lightweight. This week won't change that. Joe Hockey has a firm grasp on a few issues but his overall vision is still a work in progress (any attempt to work on that is seen as a threat by people like Niki Savva). Andrew Robb is good for a few dot-points but is more sketchy than Hockey, and scores more against his own side than against Labor. Neither Robb nor Hockey tap into wider debates on the economy, let alone lead them; this is even more true of Abbott.
Abbott has shown during the past few weeks that a mix of positive and negative can deliver results. His poll position has improved not just because he continues to attack but because he has discussed other issues he would like to address, such as mental health, welfare and Aboriginal disadvantage.

Abbott has shown that he can fill a media vacuum with small morsels of fluff. He is not the first Opposition Leader to identify Aboriginal policy as an area where the incumbents are failing, and to offer bugger-all in concrete terms to alleviate it. He was Health Minister for four years and is partly responsible for the predicament of mental health in Australia. Any fool can pick on single mothers and the longterm unemployed: it is not clear why this is considered "tough".

Why are these issues "he [Abbott] would like to address", rather than issues he is addressing, or has addressed? Why aren't those issues ones where voters clearly understand the Coalition position, and firmly believe they are superior to the muddle offered by the incumbents? Abbott has been leader of the Liberal Party for longer than Gillard has led Labor. It is sloppy and lazy for Abbott not to have developed comprehensive responses to these issues, so that he can build on them with a credible policy platform. The picfacs are wearing thin for everyone outside the press gallery. If there is a policy vacuum it's time to counter it with something other than more vacuum.
He should do the same again in his budget reply speech on Thursday night, but put greater weight on the positive and expand a bit on his economic philosophy.

There is no weight. There is no positive. There is no philosophy. There never has been. There never will be. You have no right to expect that any of these would be present. The sheer indulgence required to maintain Tony Abbott at the top level of Australian politics has been one of the most amazing features of contemporary politics.
... but given the Prime Minister and the Treasurer are struggling to shape the economic debate, then the Opposition Leader should at least try to take control of it.

Someone has to.

Yes, someone has to - but Abbott won't, so Labor will end up with economic management capability by default. It won't be a gloaty thing, as you'd have got from Costello or Keating, but before you know it Swan will have shepherded the Budget through the twilight of the Senate and left Abbott standing with nowhere to go, nothing to say, nothing to offer.
Business is anxious for Abbott to show he is interested in and understands the economy.

"Business" may as well leave the porch light on for Harold Holt, for all the good it would do.
One way is to frame his arguments against the carbon tax on the effect it will have in reshaping the economy.

He should continue to hammer the cost of living aspects, but the wider economic impacts have to be canvassed, too, and no one is really doing that.

Yeah, shadow-boxing with the spectre of a carbon tax while Swan attends to the nuts-and-bolts of practical realities: that's the way you cement Labor in place rather than blast them out. Smart advice that! Greg Combet comes out and says that electricity prices will go up by a couple of bucks if you're lucky, and the compensation package completely negates anything Abbott says - like I said, nowhere to go, nothing to say, nothing to offer.

Abbott just can't do the macroeconomic stuff. It's almost cruel to expect that he might. He'd need much more help from third parties with economic credibility than he has got so far, because he is so obviously an economic lightweight that it's not worth their while.
Voters are only too painfully aware of this government's flaws and its many disappointments. They do not need Abbott to labour them. They need him to say what he will do about it and to give them some hope that if he were prime minister he would do better, that government would work better.

In other words, this is the point where the whole Abbott idea becomes unsustainable. The policy discussions involving the whole backbench, and key stakeholders in business, needs to have happened or at least be well advanced - the reason why business is holding a candle for him is that they're waiting to be asked. Abbott won't ask, he can't ask, he doesn't know what to ask.

When business gives up on Tony Abbott the donations to the Liberal Party will dry up. When that happens the Liberal Party will dump Abbott, but not until after the carbon tax is settled:

  • Turnbull can only come back once the carbon tax is settled. The ferocious opposition from industry of last year seems to have dissipated, and the carbon tax scare campaign will be seen to have no more substance than the GST scare campaign of 2000 (remember that, Niki?);

  • Hockey can only step up if he makes no mistakes, pins Swan to the mat, develops a deft response to the carbon tax, and comprehensively nails any lingering doubts about refugees (he should take on one of the weaker talkback radio blowhards, strike exactly the right balance between toughness and fairness, and leave that 'host' a quivering wreck). I think it's too much to ask, too.

  • There is, as Cardinal Fang said, no third thing. Nothing. Not Andrew Robb, not Scott Morrison, not the hollow shell formerly known as Greg Hunt - not while Turnbull and Hockey have breath in their bodies.


  1. Sava is too busy spruiking for a job as Fashion on The Field Melbourne Cup day editor to contemplate political analysis.

  2. It's surprising that Robb is unable to offer anything worth listening to on the economy. Didn't he used to be with the Productivity Commission?

    I guess it's yet another triumph of ideology over common sense.

  3. Political donations to the Liberal Party will leap by $120,000 this Monday evening, when 12 lucky dinner guests of Village Roadshow chief Graham Burke sit down at his home table for dinner with Tony Abbott at a 'cost' of $10,000 per head. Scheduled to last just over 2 hours, that's a little short of $1,000 a minute to bask in the presence of Abbott.

    Now that's an understanding of economics by the prospective PM!

  4. Excellent piece again Andrew, and I agree about the no third thing.

    If the carbon tax is laid to rest labour will have a story of some achievement that will serve them well for this term and a lot of the next.

    In the short term of course there is only Turnbull and Hockey to fight over the carcass of the liberal party, but do you really see either of them leading this party room into new positions on policy? Someone's going to have to do some fresh thinking on the economy.

    Maybe the third alternative has still to be elected to parliament.

  5. "The sheer indulgence required..."
    You've summed it all up.

  6. Hi Andrew

    Brilliant article most enjoyable. Your writing is delightful Andrew, thankyou.