Give Me a Break!
The phony war is in full flow. A general election has not yet been called in Australia. But they’re off and running! Both major political parties are announcing policy positions on an almost daily basis. Bombs are raining down and counter fire returned. The normally florid but measured spin has turned rabidly hyperbolic as each side attempts to drag the nanosecond attention of the mainstream media back onto grounds that favour its preferred ‘narrative’. The Coalition government is having trouble focusing public attention on the imminent existential threat of invading refugees, while Labor struggles to keep the vacuum of government policy in areas like energy, environment and inequality foremost in the voters’ minds.
As a result, we the long-suffering electorate are being treated to a regular diet of photo ops. The task for the government is the more rigorous, since they must overcome a well-entrenched ‘vibe’ that they have ‘stayed too long’. This fact has been grasped by a number of sitting government members, including several ministers, who have quietly taken the opportunity to announce their decision not to recontest their seats at the election that, although not called, everyone knows will be in May this year. Such announcements have occurred in a relay-like sequence over recent weeks. In the phrase so loved by the commentariat – “the optics are bad”. It is too easy for the government’s opponents to conjure up the familiar theme of rats leaving a sinking ship – an image not lost on Australia’s world-class political cartoonists. For middle-of-the road Liberal Party supporters the procession has assumed a funereal flavour, since most of the departees – voluntary and otherwise – are from the moderate wing of the parliamentary party and many from the meagre stock of women members. The senior members remaining are almost all from the right – Abbott, Dutton, Corman, Cash, Abetz, Hunt – although some of these are under serious threat at the upcoming election.
If you watch, read or listen to serious political comment you probably feel my pain. The sheer level of overstatement, not to mention outright lies, beggars belief that those making the statements think we are that stupid. The turgid attempts of government ministers to explicate a coherent national energy policy would make a perfect plot for a Kafka novel. If you don’t believe me, search online for Barry Cassidy’s Insiders interview of Energy Minister Angus Taylor. Both spent most of the time arguing over whether total Greenhouse emissions had risen or fallen in Australia over the past five years. Cassidy quoted an independent report that concludes that they have. The Minister claimed that the same report concluded that they hadn’t. After an unedifying verbal exchange, it became clear that the Minster was referring to the slight reduction in emissions over the last three months. You don’t have to be a statistician or scientist to know that a single point measure is meaningless. A trend requires at least three points to be earn a serious look; a series of twenty measures over five years, of course, makes for a solid trend reading. But the Minister’s rhetorical aim had been achieved, the implication being that the last quarter was the turning point and that from now on it would be all downhill – the light canter to the finish line so favoured by the Prime Minster.
In an endeavour to burnish its environmental image, while squaring the circle of energy security, the Prime Minister has launched a series of promises focused on boosting Abbott’s direct action approach and nudging along Turnbull’s hydro-electricity policy. Both approaches are still in the realm of ‘to be confirmed’, well in advance of detailed business cases; hence large claims for their efficacy can and are being advanced with blithe confidence.
Labor, on the other hand, is struggling to see off what they regard as the government’s strongest weapon – ‘soft on border protection’. The political gymnastics during and following passing of the Medivac bill threatened to derail Labor’s consistent lead in the polls and their sense of self-confidence. Indeed, the first poll showed the government back within striking distance and breathed life into its dejected ranks, only to be largely snuffed out by the next poll.
What is being lost in this naval-gazing welter of mutual overstatement is the likelihood that the Australian economy will begin to falter over the next two years. The fortunate confluence of global and domestic circumstances that has fuelled economic growth for the past two decades is breaking up. The domestic transition from the mining and construction booms has not been completed. China’s economy – particularly its heavily leveraged financial sector – is unbalanced and slowing. Trump is tearing up the rule book on international trade. Increasing inequality is associated with declining productivity growth and lagging household consumption, due to the stagnation in wage growth and the drag of the two decades binge in household debt. The increase in power of the corporate elite to rent-seek and influence government policies is encouraging the lukewarm gains in productivity to be paid out in tax-advantaged dividends instead of being reinvested in productive economic and social infrastructure. Chronic under-investment by the private sector is matched by public under-investment after two decades of fiscal vandalism following the Howard-Costello-Rudd-Swan tax cuts created a permanent structural deficit and ballooning public debt. This means that the next major global shock will likely reverberate like a Tsunami through the local economy. As the Governor of the Reserve Bank has warned; Australia will not be as lucky next time. Just as surely, if the economy falters in the shorter term, many of the promises made by both parties in the lead up to the May election will become unaffordable and be quietly shelved – remember 2013? It behoves the sensible voter to carefully scrutinise the April Budget, the government’s last chance to construct a financial platform to support its expansive promises on both spending and taxation ‘relief’. In all likelihood, the 2019 Budget will be the least believable since ‘the Hockey horror’. Both the current and alternative governments have a common interest in pretending that the figures add up. For how else are they to credibly argue for their promises?
Until then we must brace ourselves for a continuing onslaught. No doubt we can all expect this roller coaster ride to continue over the next ten weeks or so. Gimme a break!