June 4, 2017


The (Really) Lucky Country: how our growth led to complacency, and bad politics (Peter Hartcher , 6/02/17, Sydney Morning Herald)

At three consecutive national elections - in 2007, in 2010 and again in 2013 - the voters refused to re-elect the governments that presided over these conditions.

This is at odds with history. These are the only occasions since the creation of the modern two-party system in 1949 on which the Australian people have rejected a national government at a time of economic growth.

First, the people dismissed the Howard government in 2007 although it had presided over an 11-year boom, already the longest on record.

Second, the Rudd and Gillard governments delivered Australian growth even in the midst of global economic calamity in 2008-09, but they reaped no political reward. Rudd was dispatched by his own party before the people had a chance. Gillard lost Labor's majority at the 2010 election and only survived in a minority arrangement.

Finally, Labor was swept out decisively in the 2013 poll. The people did return the Coalition under Malcolm Turnbull at last year's election, but only just - Turnbull governs with the slimmest possible margin, one seat.

It's not only the people who've become complacent about economic performance.

The eminent political economist Ross Garnaut says the Great Australian Complacency, as he calls it, took hold of the political system from 2000. This locates it halfway through the Howard era. 

How can he be so specific? Because, after John Howard and Peter Costello enacted their landmark reform of the tax system in 2000, they lost interest in further reform, on Garnaut's reckoning.

And this marked the end of not only Howard-Costello reforms but an entire generation of near-continuous reform efforts that started in the years of the Hawke-Keating governments.

Australia, famously forecast by Singapore's Lee Kwan Yew to become the home to the "poor, white trash of Asia", was in economic decline in the 1970s and 80s. Keating agreed with Lee. He warned of Australia as a future "banana republic".

Crisis begat action. By 2007, Lee acknowledged the success of Australia's reform era. "You have changed," he told Costello. "Your country is a different place now."

Success bred complacency. The old policymaker's adage has been proved anew: "Good times make bad policy."

By late Howard years, ambition and rigour were lost and spending grew wanton. 

Budget night came to resemble "Christmas night in the pirates' cave" in the words of the former Treasury budget examiner Stephen Anthony, as the government lavished handouts and tax cuts in the forlorn hope that it could win the people's gratitude. 

The former Treasury secretary Ken Henry, who served Keating and Costello, dates the onset of complacency in the political system and the wider public around the same time.

"We had drifted into a state of complacency in the years before the GFC [global financial crisis of 2007-8]," Henry says. "Remarkably, the GFC didn't shock us out of it." 

Why should Australia care? By good management and good luck, the economy continued to grow even as the Western world collapsed. The complacency deepened.

So the Australian people relieved their governments of responsibility for the economy. And governments relieved themselves. 

This seems to have had a liberating effect on the political class, which has indulged itself mightily. Without a crisis, without a serious purpose, the political parties, Labor and Liberal alike, have indulged personal ambition and factional vendettas in a frenzy of regicide.

"So in the century up to 2010," writes Rod Tiffen, Sydney University professor emeritus of political science, "three sitting prime ministers were victims of party coups. Then in just five years three more followed [Kevin Rudd, Julia Gillard and Tony Abbott]."

Australia started to burn through leaders faster than the notoriously impatient Italians. The fever spread to opposition parties, state parliaments. Plotting, coup-making became the chief preoccupation.

"In the 1960s, there were no successful leadership challenges in the major parties, federal or state, but since 1970 fully 73 leaders have been ousted by their colleagues."

Tiffen's Disposable Leaders confirms Australia's dubious distinction as the most febrile, restless and murderous political jurisdiction among parliamentary democracies: "This forced turnover of leaders is not the norm in any other country."

The former Sydney correspondent for the BBC, Nick Bryant, dubbed Canberra the "coup capital of the Western world". 

He was struck by the contrast between Australia's growing economic and strategic bulk and the derangement of its self-absorbed political class: "As the country has grown stronger, its politics have become nastier."

Of course, the reason our economies are so strong is precisely because there is so little difference between our political parties.  Neoliberalism is so dominant in the world generally but in the English-speaking world in particular that no one proposes doing more than mucking around at its edges for show; which partisans of both sides then treat as revolutionary and go at each other hammer and claw.  Meanwhile, even the incremental political steps they may be able to effect get swamped by global economic forces, as witness the kerfuffle over the Paris treaty. The fundamental reality of our politics is that we are too affluent to care much if our systems could be more efficiently run, making reform quite difficult.  Stasis is working out rather well for everyone.  Our politics is become Kissinger's academia.

Posted by at June 4, 2017 8:22 AM