13 January 2012

Decisions from the Coalition

"Would you tell me, please, which way I ought to go from here?"

"That depends a good deal on where you want to get to," said the Cat.

"I don’t much care where -" said Alice.

"Then it doesn’t matter which way you go," said the Cat.

"- so long as I get SOMEWHERE," Alice added as an explanation.

"Oh, you’re sure to do that," said the Cat, "if you only walk long enough."

- Lewis Carroll Alice's Adventures in Wonderland
The Federal Coalition starts 2012 on the horns of a number of policy dilemmas. In each of these there are good reasons for going one way or another, but in each of these decisions will have to be made and defended in such a way that makes them look like a credible alternative government. The Coalition is ill-equipped to make those decisions, and to stand by them, which will mean this year won't be one on which they'll look back with unalloyed fondness. There might be vicarious triumphs in the states, but federally this is a year where decisions get tougher the more they are delayed.

These decisions will mean that those hoping the Coalition would go another way will be disappointed. With a consistent framework to operate by and a tough hide, you can get past this disappointment and, if the disappointed are supporters, mumble vague promises of compensation at some later stage. Howard did this all the time and so does every successful political leader. Abbott, however, will put his seemingly random and lightweight decisions out there in the hope that people are impressed with:
  • The sheer damn firmness to which he holds to his decisions, and the boldness with which he ascribes his decisions;
  • The sneering with which he puts down alternatives not chosen - not so cutting that the opposition withers and dies, nor witty enough to leaven the disappointment;
  • The sheer athleticism with which he backflips and pikes out of decisions which turn out later to hurt him; and
  • The sincerity-veneer that he applies to foreseeable questions that, well, just because he changed his mind on [this] doesn't mean he'll do so on [that].
First, there's this dog's breakfast written up as a meaty offering. Australia needs both farms and coal seam gas. Australia needs foreign investment, in agriculture as well as other parts of the economy. But for me the real tragedy was this:
In an exclusive interview with the Herald, Mr Hockey identified the government's $36 billion national broadband network as the Coalition's big political target this year.

Mr Hockey also unveiled the Coalition's three-point economic plan for the year and a "strong, positive agenda", following a year in which the Opposition Leader, Tony Abbott, was criticised for being too negative.
Only an experienced press gallery journo could write those two paragraphs and fail to realise that the hopes for the latter were pretty much cancelled out by the reality of the former.
"I mean, it's multiples of anything that's ever been off-budget … it detracts from productivity," he said.
Much of World War II and the Snowy Mountains Scheme, to name two, were off-budget. The rollout of the national copper-wire telephone network in the 1950s failed to account for data transfer or for rental income from a Singaporean-owned competitor. Lift your eyes above the budget and speak for the nation!

In terms of 'detracting from productivity', the business case for NBN can be made simply by getting the club foot of Telstra off the nation's throat. All those retailers who bellyache about the internet (while, like Harvey Norman, selling people the means to get onto the internet and avoid lazy and bloated retailers like Harvey Norman) will be kicked into touch by the NBN. Fewer rentseekers - just imagine that, you can feel the surge in productivity already.
Mr Hockey vowed to increase accountability of the government's off-budget initiatives, including the broadband network, the National Disability Insurance Scheme and the planned National Dental Scheme.
That's the way to go positive: skimp on the halt, the lame, the snaggle-toothed, and create FUD about policies to rob them even of hope.
Workplace relations was the subject of an internal Liberal Party brawl in September when the former workplace relations minister Peter Reith urged Mr Abbott to make it a front-and-centre issue.

Mr Abbott ignored the call and ruled out a return to statutory individual contracts.
Well, that's that. Obviously the issue of how millions of Australians work and what they get in return is now settled for all time. Joe Hockey is a  former workplace relations minister; why does nobody ask him about WorkChoices and future options for regulating workplaces to ensure growing productivity?

There is a case to be made for a light touch IR system, like that of the Fraser Government. The Conciliation & Arbitration Commission and all that it represented reached its peak under Fraser. Having smashed the ALP at the ballot box and in Parliament, the softly-softly approach to what used to be known as industrial relations gave the President of the ACTU, Bob Hawke, a rails run as the Fraser Government's most potent political threat.

On the other hand, there's also a case to regulate the workplace relations system in a different way to the way it's regulated now. The clearer they are about that different way, the less vulnerable the Coalition will be to spectres of WorkChoices, or the one-two punch from the broader labour movement (such as it is).

Of course, fearless journalist Jacqueline Maley went in hard, didn't she? No, she changed the topic:
Mr Hockey revealed a review of foreign investment guidelines would be part of the Coalition's economic policy agenda.
Look over there! If there isn't a Walkley in that, I don't know what is (seriously, I don't).
A Senate inquiry chaired by the Liberal senator Bill Heffernan is also looking into the issue.
And isn't that the hallmark of political effectiveness. The Father of Agriculture in Northern Australia himself. The man who erased Michael Kirby from history. All piss and wind. Yes indeedy, if you're concerned about foreign investment in Australian agriculture, you can wait for the Heffernan Report into the issue or you can help yourself to a nice deep draught of fuck-all ahead of time and avoid the wait.

The real worry for the Coalition, though, is this:
Mr Hockey said "some" of the Coalition's policies would be submitted to the Parliamentary Budget Office for costing.

During the 2010 election campaign, the opposition refused to have its policies costed by Treasury, opting instead to have them assessed by a West Australian accountancy firm, WHK Horwath.

The accountants who completed the costings have since been found to have breached professional standards and were fined for misrepresenting the costings as an audit.
That's right, accounting/consulting firms: if the Federal Opposition approach you, run for the sake of your professional reputations. They will screw you and leave you in the dirt: don't work for these people. George Megalogenis was right when he said:
For those on the Coalition side with longer memories, the antagonism echoes the Whitlam era hostility towards Treasury in the 70s.

The Coalition should get over itself and learn to respect the economists.

The lesson of the Whitlam government is that whenever one side sees the bureaucracy as the enemy, it knows less about governing that it realises.
Quite so: you aren't ready for Treasury, you aren't ready for government. When Treasury does fall short (as it did over the mining tax) it made the mistake of getting ahead of the politicians rather than supporting them in making decisions; this doesn't mean that the best Treasury is one that's willing to play Horwath-style patsy to The Situation. The Coalition aren't ready for government until they can strike that balance between leading Treasury and working with it.

Then there's another longterm dilemma of governing this country, the car industry. There are lots of good arguments for an Australian vehicle manufacturing industry, but if you make them you're missing a big opportunity to cut expenditure. You can't really complain that Australia isn't embracing an innovative future while you're siphoning public funds to donate to US shareholders.

Yes, people are buying fewer Commodores and Falcons, but apparently there is this wonderful export industry for such vehicles which, though apparently luicrative, still requires handouts. I quite like this elegant proposal from Nicholas Gruen seeking to create a niche where there is currently only a rut. Not only would the Coalition would reject it out of hand, there is no evidence that it even entered their minds:
But the Coalition’s acting industry spokesman, Eric Abetz, said Australians “don’t mind some support from government”.
Great! Let's remember that the next time Eric whinges about Centrelink recipients, or Fair Work Australia cracking down on free market champions like Qantas.
And the man helping review the federal Coalition’s industry policy in the environment of a resources-driven high dollar, frontbencher Ian Macfarlane, also said Australia needed to retain a sophisticated manufacturing capability. But he would not be drawn on the issue of subsidies.
Let's leave aside the fact that this is a poor article. The only evidence of a "Lib split" on the issue are Liberals with the bulk (if not the whole) of their political careers behind them. Macfarlane and Abetz might think they're clever by holding an inquiry with the end result predetermined, but what's clever for them is not necessarily clever for the country, or indeed for the Liberal Party.

The Australian car industry is mostly locked up in the sort of electorates where Labor wins overwhelmingly and the Greens come second. The exceptions are two Federal electorates, Corangamite (Vic, on the fringes of Geelong) and Wakefield (SA, including Gawler and Elizabeth): both marginal Labor-held seats at the last two elections, eminently winnable by a resurgent Liberal Party.

There has been a great deal made of the "Howard battlers", blue-collar workers who vote Liberal rather than Labor. These tend to be people who are self-employed or who recognise that their employment is contingent on the business cycle generally and their bosses' ability to reel in business in particular. Those who cling to cradle-to-grave jobs from big corporates or government still vote Labor. There is no advantage for the Coalition in maintaining thousands of Labor voters in marginal electorates.

Then, there's the fact that the most powerful advocates for the Australian car industry are two unions who, as Crikey recently observed, so lack confidence in their own members that they don't rate them as an investment. Two of Labor's greatest mainstays: why are they even a consideration for the Coalition? This is the press release I'm waiting to see:
The Leader of the Opposition today announced that the Australian car industry no longer requires subsidies from public funds and will rely upon income from customers from hereon in, just like every other business does.

"And if Paul Howes and Dave Oliver don't like it, they can go and fuck themselves", he added.
There will be difficult decisions required for all of these issues, and it's part of getting ready for government that you can manage interest groups. There is a line between steadfastness of purpose and obstinacy, and Abbott is on the wrong side of this because he has no discernible principles on economics:
  • He's trying to play an unconvincing double game on workplace relations. 
  • He seems to think a farmers-vs-miners stoush can simply be settled in favour of farmers (well, until the next time Gina rattles her jewelry). 
  • He really thinks that the rolling program of cash for cars is just something Australian politicians have to keep doing and put up with, like similar flare-ups over their own pay from time to time. 
There are difficult decisions to be made over the coming year, the quality of which put in doubt to related questions that some might like to think are already settled: do the Coalition understand the issues facing this country, and can they govern Australia?


  1. Space Kidette13/1/12 7:15 pm

    Andrew, on your final two questions, one can only wonder why our current media aren't willing to ask them.

  2. Typo in about the 11th last para: "holding an inquiry with the end result predetermined, bu what's clever for them" - the "bu" should be "but".

  3. SK, Fairfax are stumbling close to it but not quite hitting the mark, whereas others don't know or care.

    Anon: thanks, fixed.

  4. Greensborough Growler14/1/12 11:02 am

    The Libs seem divided between those that would ease Australian Manufacturing in to its grave through higher doses of morphine and benign neglect and those that would throw a hand grenade and then proceed to bayonet the wounded.

    Regardless it exposes fluro shirt Tony "friend of the working man" strategy for the nonsense it always was. For a lazy $100 mill the Government has exposed a fair degree of uncertainty about the motivations of the LNP regarding jobs.

    Say what you like about the purity of the policy and its long term effectiveness, the Government has demonstrated clearly that it will do all it can to protect jobs (even sending "Carr to Detroit")In an electorate sensitive to jobs, this is a winner for the Government.

    The Opposition have demonstrated they are at best, ambivalent to these workers. Well may Barnaby complain that you can't be a populist Party unless you are popular. Pissing on workers legs and telling them it is raining is a sure way to kill the popularity of pissants like Abbott.

  5. GG, the US auto makers are busy repatriating jobs. Part of the criticism I had with the reporting of US politics here is that the MSM has (with the exception of the AFR) failed to realise this and report it. The conservatives always get wrong-footed when they find themselves against the US, as they are here. Your final par is solid gold.

  6. I don't think mainstream Australia really cares that much about the car industry. Or rather, we don't care about it enough to buy Australian, and we certainly wouldn't want subsidies going into the pockets of American auto companies that won't even commit to their continued presence. If pollsters wanted to justify their own existence, they might do a survey on this.

    Abbott's move sounds dumb, it alienates the economic rationalists in his party all for a questionable "populist" gain. I bet that core of voters will turn out to be an illusion.

  7. Hillbilly Skeleton14/1/12 10:28 pm

    Oh, I get it, the Coalition are going to be positively negative this year. That is, Truckwit Tony inserting the word 'positive' into a sentence before he goes hard and negative, as per usual. That'll convince the sceptical punters. Not.
    As for the NBN, they've already tried every which way but loose to 'demolish' it, but the facts keep getting in the way of attempts to mislead. I can't see that changing this year, either. As far as I can divine it(and, no doubt the Coalition will also be calling on the likes of the Devine Miss M to help out), their arguments centre around a slow/low take-up rate, which somehow equates to it being an expensive White Elephant(and the first farmer's leg saved after being pinned under his tractor,via instantaneous remote telemedical help to the local First Aider will put paid to that), plus the spurious technical arguments Malcolm Turnbull is half-heartedly making, as he trys to bamboozle the bogans with jargon he hopes they know nothing about. Good luck with that one, MT. Doesn't he know everyone goes to Whirlpool to chat, or reads Wired, ZDNet, Delimiter, or countless other mags. They need to to be able to operate their gadgets!
    Finally, as for the 'Productivity' frame the Coalition are trying to put around their desire to just go back to BusinessNirvanaChoices. That's not going to fly too high, either. Especially as Stephen Long has already demolished the canard that lower productivity is due to 'the units of production'. His piece on The Drum this week nailed down the real reason. It's the Mining Companies, Gina, Twiggy, Clive and their mates, whoi are in the process of gearing up to increase production but are yet to put the productive wheels in motion. Oops!
    I look forward to journalists and bloggers who 'don't write crap' running around after the slippery eel, masquerading as the LOTO, in order to pin him down on facts such as these.

  8. I look forward to Mr Rabbits
    ``strong, positive agenda``
    (of NO)
    and analysis of
    ``unrestricted, unrestrained, uncontrolled`` anything business,
    when his mob are the one`s suffering from privatisation fever.
    I can`t see Mr Rabbit`s lot, State or Federal, cutting Corporate Welfare to the Auto companies either.

    Interestingly, the so-called Left press `Crikey Crew` suggesting that the working class in the Auto Industry should absorb business risk with their `super` fund as well as having jobs that will eventually go.