It’s easy to laugh at Bob Katter, who has years of form in threatening to establish new political parties, and who yesterday was talking about a “new political direction” and the “tanks and ammunition” that he had for it.
Whether Katter joins a Queensland-based party, or establishes his own, or finds some other vehicle to head in his “new direction”, is less important than the issues he is citing as the reason for it. Katter is perhaps the last diehard protectionist in parliament (although Doug Cameron may beg to differ), a politician who wants to return to the days before “Paul Keating started this nonsense”, re-erect tariff walls and reduce the value of the Australian dollar to maximise exports and cut imports. This is the only way that Katter can see to protect the industries he cited yesterday — agricultural and mineral processing, and manufacturing.
During the economic good times — and, mostly, even during the GFC — public policy debate in Australia never shifted from its focus on the benefits of free trade and free investment. Our low unemployment rate, the way in which the Australian dollar acted as a cushion for the external shock of the GFC, even our low inflation, are testament to the benefits of an open economy.
But as the Australian dollar climbs higher — some now speculate about scenarios in which the dollar could reach US$1.50 — and manufacturing and other trade-exposed industries come under more and more pressure, the demands for protectionism will come from more parts of the country than just Katter’s North Queensland base. The anti-dumping campaign of Paul Howes’s Australian Workers’ Union — designed to deter foreign companies from offering Australian consumers very cheap products — is another reflection of growing protectionist sentiment, and it is one that plainly blurs traditional ideological and partisan lines.
With luck, the Australian dollar will not continue to appreciate. But it’s not clear at the moment whether either of our major political parties has thought through exactly how to respond if it does. Treasury Secretary Martin Parkinson referred to the “sustained shift” in our currency challenging a number of existing business models. If it continues, it may yet challenge some political models as well.