Commentary on politics Down Under

The reason why academic politics are so vicious is because the stakes are so low.

This quote from Henry Kissinger could easily be applied to Australian federal politics. And, with a Federal election in the offing, the stakes are getting lower and lower. Australian politics, more then ever, resemble drug-gang warfare- there are two gangs, both eager to secure the lucrative cash flows that come with the commanding heights of the Treasury Benches.

This may surprise the casual observer of the political scene. On the surface Australian public life seems to have a frantic flurry of debate, on foreign policy, on health, and on values. But a closer inspection reveals that this is just surface froth, designed to sate the appetites of the media machine and the political junkies. Beneath the scenes, one sees that the purpose of all these debates are simply designed to enjoy the power and perquisites of office.

In Australia the time and date of the election is at the choosing of the Prime Minister, and he studies the signs, looking for the opportune moment to strike. The opinion polls suggest that the ALP has a slight lead over the governing Coalition, but the bookmakers, who have the edge in accuracy in predicting Australian elections, have the Government as firm favorites to retain office (for what it is worth, Bush is just ahead of Kerry, although prices vary from firm to firm).

So what is this government that is, if you believe the bookmakers, about to be elected for a fourth term? John Howard has been Prime Minister since 1996 and everyone has a clear view about him. His strengths are obvious, as are his weaknesses. His most obvious attribute is determination. He has been written off so many times and yet bounced back to defy all his critics. Even now it seems difficult for him to win. However, his come from behind election win in 2001 was a more impressive comeback win then what would be required from him now.

Howard is not, and never was, fashionable- he rarely has ever been popular with the gatekeepers of the media, those valiant seekers after truth. But he is widely seen as a ‘safe pair of hands’ and a competent administrator. That is certainly true and it counts for a lot in these uncertain times. It counts enough to keep him in with a fighting chance despite his shameless populism and rampant dishonesty- like Tony Blair, he has squandered what credibility he had so the political class as a whole generally believes nothing he says.

You can believe one thing he says- he really does want to continue as Prime Minister. He is a social conservative, and he would have it be known that he’s an economic liberal and small-government man, but these latter attributes do not have any relation to the truth. He is in fact a classic right-wing statist.

He dominates his government- like Blair in Britain, he overshadows his main finance minister and internal part rival, Peter Costello, but while it is plausible to think that Gordon Brown might one day unseat Tony Blair, it is quite impossible to think Costello could do the same here.

The Howard government is nominally a pro-business, tax-cutting, small government party. Its actual record here is poor- the tax system has been fiddled with at the margins, and half the phone company has been privatised, but that is all – a poor outcome indeed after eight years in office. Part of this is because the Australian Senate is a permanent stumbling block to reform, and the minor parties that hold the balance of power there are generally left-wing. But fundamentally, Howard is a statist, who has faith in government programs of various natures to deliver useful outcomes.

In addition, he has learned that government money, carefully directed, is a wonderful way to bribe key parts of the electorate. Many of these dollars have flowed to the interests of the National Party, the partner in his Coalition government, which is a party of agrarian socialism and social conservatism. (I have complained about farmers before.)

Is this government irredeemably useless? In my view it has been okay in the response to the terrorist threat that has become a global menace. Australia has in effect occupied the Solomon Islands in a bid to prevent it becoming a failed state, an act which it did unilaterally and without the support of the United Nations. However, since this has been a very successful operation, even the local media have not opposed it.

In terms of keeping the local economy out of trouble, it has done a middling job- but the Australian economy is still hampered by regulatory handicaps, crony capitalism (which often has legal protection, most notably in broadcast and media industries) and subsidies. Future generations will rue the lost opportunities of this government.

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Against the government is the Australian Labor Party (ALP). There is, it must be said, not much in common between the British Labour Party and the Australian version, beyond a shared trade-union heritage. The ALP is a wide ranging centre-left party in principle, but it is fact no more ‘socialist’ then the governing Coalition is ‘free-market’. It is simply a vehicle for several ambitious men and women to indulge their taste for power.

In fact it must be said that the most free-market government in Australian history was the ALP government led by Bob Hawke which was elected in 1983. Michael Jennings’s recent post on aviation policy gives an example of how that government went about its deregulatory business. It nevertheless has a taste for left-wing statist ideas, and in no sense could it be described as libertarian, unless those liberties have a self-indulgent slant to them.

Because Australia is a federation we do in fact have a very clear idea of how an ALP government might look like, because the ALP actually is in office in every state and territory government in the country.

The main characteristic of these governments is that they are populist, and socially authoritarian. The party has to balance economic management with social activism. The Australian electorate is one of the more economically literate electorates in the world, a searing recession induced by interest rates on mortgages rising to 17% in the early 1990’s having made the Australian public keenly aware of the importance of balanced budgets and the like.

But the ALP has to satisfy its own activists who worship on the alter of state spending as the cure for all the ills of mankind. This can lead to tricky situations but the activists are usually satisfied with high office, and are usually pragmatic enough to ignore their social consciences when their electoral interests are involved. (In contrast, the Liberal Party activists, having no conscience at all, can pillage the Australian taxpayer and sleep soundly at night.)

In general, the ALP State governments are very good indeed at this balancing act. They are able to appease the public sector unions in the most part without blowing out budget deficits. And they are in the happy position of enjoying a windfall of money courtesy of GST tax,(the Australian version of VAT, introduced in 2000) which in Australia goes into state government coffers rather then the Federal governments. Hilariously, the Federal ALP bitterly resisted this tax which has benefited their State colleagues so much.

The challenge for the Federal ALP in government is in managing the economy and foreign policy. I suspect that they will defer to their departments on both, as they will be keen to appear competent in these factors- meanwhile, I expect some sort of ‘initiative’ somewhere else to be developed as a rallying cry to satisfy the activists- possibly (hopefully) a renewed push on making Australia a republic

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What do the electorate make of all this? Not much. The Australian public is for the most part famously apathetic to politics, which is why we have compulsory voting in Australia. It is an amusing diversion to guesstimate what the turn out would be if it was not compulsory to vote in Australian elections, but no one seriously suggests that it would be above 50%.

Generally, the elevation of the mercurial Mark Latham to the leadership of the ALP has seen a revival in that party’s electoral fortunes, but it must be qualified that Latham is a polarising figure. He is seen by many as a loose cannon, and his style as a man and a political leader is felt to be a turn-off by women. It must also be remarked that much of the revival of the ALP in the opinion polls is in the ALP’s own seats- with Latham having less bite in the marginal seats that is required to win the election.

There are also significant regional variations in the different Australian states. Latham has revived the ALP position most strongly in Queensland, somewhat less strongly in South Australia, and has actually lost support for the party in West Australia. In the most populated state, New South Wales, there has actually been little change.

The main issue of the day, the war in Iraq and Australia’s involvement in it, is a very volatile issue. It is not that Australians worry about the course of events in Mesopotamia, but rather they care about the honesty of the government in dealing with it. This is not surprising, and is a issue in the US as well. There is also the vexing question of terrorism. After the political impact of the Madrid blast, it is possible that al-Queda’s South East Asian affiliate, Jemiaah Islamia (JI) might fancy its chances of doing a repeat performance.

Although the political effect of the Bali attack on Australia was to strongly rally people behind the government, the truth is, no one knows what the political effect of a terrorist strike during an electoral campaign might be. It remains the deadly wildcard in the election brew.

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From a libertarian point of view, it is irrelevant who wins the election. Neither political party has the slightest interest in libertarian ideas, and it must be said that this is merely a reflection of the mood of the electorate. Taxation is quite high in Australia but a well organised individual with a good accountant can avoid most of the worst of it. (although wage and salary earners can not).

Both sides of politics are running on a nannyish social agenda, a high tax and spend agenda, and there is not a hint of a promise to wind back the state. Increasingly I’m inclining to the view of Perry de Havilland that democracy is nothing more then kleptocratic populism. Certainly, the way parliamentary politics is practiced in Australia can be characterised as such.

I am loathe to tip against the bookies, but I predict that the voters will toss the Howard Government out of office, and the ALP will enjoy the benefits that accrue from a thumping landslide win. The general rule in Australian politics is that when the party of government changes, it changes in a very big way. It seems to me that all the signs are there this will happen again.