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Apr 8, 2010

Have our politicians forgotten how to reform?

Reforming governments are the exception, not the rule in Australian politics. The current generation of politicians has yet to prove it can match the efforts of the Hawke-Keating-Howard years -- despite facing major policy challenges.

In my more cynical moments, I have a horrible suspicion that we our losing our capacity for major economic reform.

And by reform I mean the real stuff, the hard stuff that costs governments support and seats, the sort of reform that political realists roll their eyes at.  Some reform — valuable reform — is easier; usually it involves spending more money, either temporarily or even permanently.  Paid parental leave, for example — a significant economic reform that will lift female workforce participation — is an easier reform to sell to the community than, say, tax reform or removing industry protection, where the losers will raise hell.

That’s partly because the template for how losers should oppose economic reform is now well established.  This what you do:

  1. Commission a report from one of the many of economics consultancies that have broken out like a plague of boils in the past decade.  This should feature modelling demonstrating the near-apocalyptic consequences of even minor reform.  Even if your industry is growing strongly, you should refer to any lower rates of future growth as costing X thousands of jobs, without letting on that those jobs don’t actually exist yet, and might never exist due to a variety of other factors.
  2. Dress up the report as “independent”, slap a media-friendly press release on the top and circulate it to journalists before release, with the offer of an interview of the relevant industry or company head.
  3. Hire a well-connected lobbyist to press your case in Canberra.  When the stakes are high, commission some polling to demonstrate that a crucial number of voters in crucial marginal seats are ready to change their vote on this very issue.

But if we take a step back, we should also remember that economically reformist governments are the exception rather than the rule in Australia.

At the federal level, only the Whitlam government, on protectionism, the Hawke government on financial deregulation and protectionism, the Keating government (IR, superannuation, privatisation and competition policy) and the Howard government (Reserve Bank independence, IR, privatisation and tax), can lay claim to strong records.  And in each case, their reform achievements were partly offset by second-rate decisions in other areas — think Kim Beazley’s awful telecommunications reforms, or Howard’s middle-class welfare.

Moreover, the Hawke/Keating record comes with an asterisk — they had the support of a reform-minded Opposition, except on superannuation.  Howard and Costello, in contrast, had to push reform through against Labor opposition.

Peter Costello was the last of that reform generation.  There remain survivors on both sides from the 1980s and 1990s, of course, but they’ve now mostly been replaced by the next generation of MPs, and the party leaderships on both sides has now moved to politicians who either entered Parliament after the bulk of our most important economic reforms had been completed — Kevin Rudd — or give no indication of interest in economics — Tony Abbott.

This new generation is yet to prove itself on hard reform.  Doubtless they are cautioned by the example of Workchoices, where Howard lost his head and pursued not an economic reform — there was no demonstrated case for IR reform after 2004, based on wage or industrial disputation data — as a final venting of the anti-union malice he had harboured since his own days as Treasurer.

But if we take an emissions trading scheme as an example — bearing in mind an ETS removes the carbon protectionism embedded in our current economy — our current Parliament has failed miserably.

Remember we started with a bipartisan consensus in favour of an emissions trading scheme.  On that basis, how we’ve ended up further away from an ETS than ever must rank as a public policy disaster of the first order.  The government’s own scheme started life as a fairly poor but workable response to the long-term challenge of taking us from being one of the most carbon-dependent major economies to the sort of low-carbon economy we eventually must become.  It was then neutered by the government in response to a successful campaign by rentseekers and big polluters, allied with the conservative media.

But the government was also determined to exploit climate change politically, seeing not the bipartisanship bequeathed by Howard on the issue but an opportunity to split an Opposition that could barely keep itself together anyway.  When, eventually, the government began seriously pursuing passage of its Bills with the coalition and, more to the point, the political protection of joint ownership of the scheme, the coalition had reached a near-terminal state of fracture on the issue, paving the way for a climate denialist to take the party leadership.

It wasn’t just a tactical failure on the part of the government, it was a communications failure.  The government had also badly faltered in its efforts to sell its scheme, with the hectoring, unimaginative Penny Wong as the public face of the government’s efforts to address climate change, leaving a gap that climate denialists, with a far simple message based on lies, dodgy graphs and doubt, happily filled.

Quite a contrast with Hawke’s and Keating’s efforts to sell economic reform, with Hawke providing comfort and assurance to voters and Keating’s formidable salesmanship directed at the commentariat and industry.

This doesn’t excuse the deluded and malicious denialists among the coalition.  But there are always opponents of reform.  There are always vested interests and opportunists ready to oppose genuine reform.  Often they’re to be found within your own ranks.  Out-thinking them is part of a real reformist’s job description.

Tomorrow: what does this mean for our most significant emerging issue, housing?

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12 thoughts on “Have our politicians forgotten how to reform?

  1. blue_green

    This is the best article of yours I have read Bernard.

    Rudds timidity on the ETS was astounding. His salesmanship on the climate change was “we have a climate change policy and its called an ETS”- nothing else. You have to respect John Howard who was willing to argue for his policies until the journos ran out of questions.

    I am glad Rob Oakeshott was in parliament to give a great speech that began with ‘a pox on both your houses” over the ETS.

  2. Dr Strangelove

    I think the timidity has a lot to do with not wanting to change things too quickly, a lesson learnt by Whitlam. Maybe a second-third term will risk some sort of change.

    But serious reform is not going to happen until Rudd is gone. He is not a leader he follows polls and market research (population is latest example). He is not a reformer, he is a bureaucratic politician who enjoys power for powers sake – nothing more nothing less.

    Nicely articulated article Mr Keane…

  3. Greg Angelo

    That there was a time when the public service could provide independent policy advice to government, because public servants had a degree of independence, and were resourced both in manpower and mandate to provide such advice.

    Over the past 30 years, this capacity has been progressively gutted to the point where the public services nothing more than a political apparatus to serve the political interests of the government in power.

    The use of external consultants is nothing more than the use of “straw men” to give you any conclusion that you want. Yes Minister ably demonstrates this capacity that enquiries could only be undertaken knowing the outcome in advance.

    Accordingly, like the naked emperor, government will only get the advice that it wants.

  4. Jeremy Williams

    Its very generous to think of the 11 years of Costello and Howard as ‘reformers’. The GST was good and I voted for it but that was it, selling off assets or removing the no disadvantage test from individual contracts is hardly what I would call reform. Rudd is mildly better: breaking up Telstra, an attempt at an ETS(all be it weak) but I think Turnbull if given time could have been a genuine reformer. He had the self belief/arrogance, was interested in inequity and incentive and was not intimidated by special interest groups.

  5. SBH

    Yes Blue Green that is a key difference. Howard did push through unpopular positions with a degree of doggedness but he flagged quickly and resorted to a cynical populism that has infected the current government. Politicians appear to jump at shadows rather than have a vision they are willing to fight for. Even on ‘easy’ questions like the roll back of the intervention or increasing superannuation we see no leadership just the pursuit of power as it’s own reward.

    Greg Angelo, you’re muddled. the APS is not, should not be and has never been independent. It is an integral part of government and serves the government of the day. What you meant to say was frank and fearless which is a very different thing.

  6. Greg Angelo

    What I said and what I meant was that advice independent of the political orthodoxy of could be provided even if it offended the receiver. Government of course can take the advice or leave it, but the advice nevertheless it is independent probably because it is based on first principles analysis. I’m sure that this thinking still occurs within the public service but “frank and fearless” is in very short supply.

    Based on personal experience when frank and fearless advice is provided it creates embarrassment on the part of the receiver because one is expected to play the game and only provide that the politically correct advice that the system wants.

  7. SBH

    again displaying a muddled understanding of what ‘independent’ means and how our public services operate Greg.

  8. Greg Angelo

    @SBH – Whoever are you are you’re obviously afraid to see your name in print and prefer to hide behind a pseudonym.

    If public servants are to be solely beholden to politicians in the exercise of power we will go back to the dark ages. Checks and balances are necessary. If the government makes a mistake are our public servants meant to lie under oath to cover up the errors of their master? Should accounting standards be breached to suit political whim and should legal advice be disregarded if it is in contradiction with policy? Should logical analysis be hidden and facts suppressed by public servants to serve their masters?

    In my comment “independent” relate to logical and factual analysis taking account of government policy positionsbut not not just totally coloured by the political preconceptions of a political party which happens to be in office at a particular point in time. This would be something straight out of “Yes Minister” or the “Hollow Men”.

    Of course the public service is an integral part of government but to avoid extremes like the Russian public service under Stalin or the German public service under Hitler, checks and balances are paramount.

    Part of this process is accountability of information provided and openness of due process. it should be remembered that was we have a government, it is our money that their spending and were put them in this position of stewardship in expectation that they are acting in the community interest, and not just narrow sectional political party interest.

    If one looks at the current policy position with the NBN for example these checks and balances are totally missing with policy-making on the run, and no accountability for the actual underpinnings of the proposal.

    If I am “muddled” so be it, but I am at least prepared to put forward the basis of my position and not sit back anonymously taking cheap shots.

  9. SBH

    Greg, if you kew the first thing about the public service you’d know that the Hollow Men and Yes Minister represent two diametrically opposed models of public governance. At any rate this article is not about the capacity of the APS but that of our elected governments. Muddle along

    And no, I don’t need the self gratification of seeing my name in print.

  10. Greg Angelo

    I do not have to get my rocks off by anonymously and sanctimoniously criticising individuals at the personal level. You obviously derive some voyeuristic self gratification from your anonymity for which I have no respect. Nor do you appear to have the capacity to deal with the issues, and your prime talent appear to emulate the voyeur or the poison pen letter writer.

    You seem to fail to understand that the public service should not be totally a slavish instrument of whichever political party happens to be in power, and that public servants have a broader responsibility in terms of information gathering and dissemination of information to enable rational decisions to be made rather than those totally in accord with a particular political views of the government at the time. If you believe that the role of public services and purely an extension of the party which happens to be in power at the time why don’t you say so?