What a small-minded little man this Tony Abbott is.

At least when the Howard government was demonising asylum seekers to pander to the xenophobia of many voters, it wasn’t inflicting economic damage in doing so. Beating up on small number of vulnerable refugees, however immoral, didn’t have any implications for the economy.

Abbott’s attempt to exploit the population issue by promising he’ll slash immigration, however, will inflict serious damage on the Australian economy.

It was a favourite party trick of the Howard government to protect itself against the charge of inaction on climate change by using modelling showing trivial impacts on GDP and projecting them out to 2050, taking the number out of context, divvying it up per capita and then making it sound as though taking a particular action, like ratifying Kyoto, would end up sending a bill for a couple of thousand dollars to each and every Australian.

I’ve done much the same today, except I didn’t need to dodgy up the numbers.  They’re there in the Intergenerational Report, and they’re far bigger than anything Brian Fisher’s boys at ABARE could come up with back in the day.  Keeping our net migration down to 100,000 a year will cost us 17% of GDP over the next four decades.  Keeping it down to 140,000 is half that reduction. Do the maths.

At some point Australian businesses are going to have to accept what should have been already dawning on the brighter members of the business community, that Abbott, for all his claim that the coalition is the side of politics that favours business and enterprise, believes in nothing of the sort.  We’ve had three policies from the coalition under Abbott, and all three have been bad for business. Paid parental leave was a straight-out assault on the bottom lines of medium and large enterprises and their investors. The abandonment of Howard-era bipartisan support for the ETS has caused massive uncertainty for business and investors over whether we’ll now ever have a carbon price.

And now the abandonment of Howard-era support for high immigration will punish businesses in sectors of the economy facing skill shortages, and put a cap on economic growth for the rest of us.  On the sort of numbers Abbott is talking about, he’ll need Workchoices on steroids to stop wage rises going through the roof as businesses compete for precious skilled labour when they can’t import any.

Abbott’s reflexive opposition for the sake of opposition is one thing — although it reached the point of absurdity yesterday when he declined to support the government’s tobacco excise increase, which as Misha Shubert pointed out today is actually coalition policy. But under him the Liberals are not the party of sensible conservatism or economic liberalism or even the party of John Howard, but of crass right-wing populism, aiming to exploit xenophobia and dislike of big business, regardless of its impact on the economy. More than anything else, Abbott’s Liberals increasingly resemble Tea Partiers, albeit without the brains.

A drive-by casualty in this effort to pull the One Nation vote is the Productivity Commission, established by the Howard government and an adornment to high-quality public debate in this country. The PC was minding its own business and getting on with its job until yesterday when Abbott announced that he wanted to replace it with a “Productivity and Sustainability Commission”. This would significantly expand its remit to sustainability issues and take charge from Treasury of the intergenerational report process, which is established in legislation.  The PC’s strength is its laser-like focus on good economic policy, untainted by political considerations or other policy demands. Abbott will nobble that, imposing a broader role on the commission to address social and environmental policy issues.

The most charitable interpretation of this stuff is that Abbott doesn’t believe Australia can walk and chew gum at the same time — that we can’t enjoy the benefits of a high-immigration economy and successfully address the policy imperatives that it brings — like getting our housing supply and infrastructure provision settings right.

A more realistic interpretation is that Abbott knows that his only real hope of reversing what now looks a solid and substantial Labor lead in the polls just 3-4 months out from the election is to tap into xenophobia and resentment about the impact of migrants on infrastructure and housing in outer suburban electorates. Scare voters with the threat of hordes of boat people, blame migrants for pushing up the price of houses, blame migrants for clogging up the roads.

Senior Labor figures have longed feared this sort of hypocritical populism from the party that gave us such high immigration under John Howard. Now it has arrived under Tony Abbott, a small-minded man with a vision for a country just like him.

Peter Fray

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