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Oct 27, 2011

Who killed economic reform? Maybe we all did

There's plenty of blame to go around for the death of the economic reform project. But was popular resentment of its impacts the ultimate killer?


So far, there have been two competing theories about why the economic reform project has died in Australia: the media blames the politicians, and the politicians blame the media.

The first, favoured by some media critics as well, is that reform has been made much harder by the dumbing down of politics and a media obsessed with gotcha journalism that discourages risk-taking among our leaders. The response, mainly from the media and economists, is that the current crop of politicians are duds, and no match in reforming vigour for Hawke, Keating and the early John Howard.

“The solution doesn’t lie with the media. Politicians need to grow a backbone,” insisted Laurie Oakes last week, specifically criticising Lindsay Tanner’s Sideshow. To be fair to Tanner, he didn’t blame all the media; indeed he specifically singled out some shockjocks for being more prepared to connect large audiences to policy issues than the political journalism professionals.

Given politicians are the ones who end up being the agents of reform, there’s a self-evident logic in blaming them. And it’s hard to see how the media can be blamed at all for some aspects of the retreat from economic rationalism. It was the major political parties — first the Coalition, then Labor — who turned against our long and successful history of high immigration last year, unprompted by anything other than focus groups and political cynicism. It’s also significant that the current government doesn’t have the potent one-two combination that the Hawke government had — a popular prime minister who provided reassurance to voters and an aggressive Treasurer who provided reform momentum. The Howard government had that, as well, though not as much.

Political failure has been more subtle than that, too. If the momentum behind reform stalled under John Howard, Kevin Rudd failed to restore it, talking consistently about reform but not delivering, most painfully on carbon pricing but on tax reform and housing affordability as well. Rudd even had the dubious gift of a global economic crisis to jolt Australians out of any reform complacency they might have had, but failed to use it.

But Australia’s economists share some of that blame as well. They, too, have failed to sell the case for continuing reform. They’ve also been lukewarm in their support for the reforms that politicians have embraced. Ken Henry pointed this out last year when he complained about the constant sniping of academic economists following the mining tax controversy. Economists as diverse as Joshua Gans, Judith Sloan and Warwick McKibbin reacted furiously to Henry’s remarks. But Ross Gittins nailed them when responded that economists demanding perfect policy had no right to complain about politicians lacking the will for reform.

If anything, the culpability of the economics profession has become greater this year. Recall the 1980s, and the sense of urgency policy makers and economists were able to engender in the wider community. Even without Keating’s famous “banana republic” line, the conviction that Australia needed to reform, and now, pervaded debate, as if our very future was at stake. Move forward to 2011, and what’s the issue economists are trying to inspire us with? What urgent national task do we need to address? Erm, productivity — a problem economists themselves still struggle to diagnose properly and one that we share with most developed countries anyway.

Typically, the business community, which has a long history of only supporting major reforms that benefit the bottom line of business, have seized on productivity to argue for the need to return to IR deregulation. That’s despite it being repeatedly demonstrated that the last round of IR reform, WorkChoices, actually undermined labour productivity (as forecast by Treasury). Then again, that’s OK if you bear in mind business is focused not on the national interest, but on easy ways to cut costs.

And like economists, business has failed to do its bit to back even the limited reforms undertaken by politicians. Most of the business community — the superannuation sector honourably excepted — stayed silent while the mining industry mugged the Rudd government last year. Some business leaders then had the hide to whinge when the newly installed Gillard government rushed a deal with the miners that halved the corporate tax cut linked to the mining tax.

What about the public? Tanner also suggested the long years of economic growth had sapped the public will for hard reform. Is it just complacency, or is it something more? Earlier this week, Essential Research released some data on questions it asked about support for key elements of the economic reform program of the past 30 years.

Only compulsory super and Medicare (which was instrumental in Labor’s selling of reform to the union movement and voters) get majority support. Other key reforms such as the floating of the dollar and the GST are now more widely regarded as good for the economy than bad, and reversing them is not supported. But privatisation, a key element of the reform project, is still regarded with hostility by voters and they would happily see the Commonwealth Bank, Qantas and Telstra all returned to public ownership.

This isn’t just dewy-eyed nostalgia. After years of interest rate hikes, diminishing service quality and gouging, such a result is hardly unexpected from voters, who were originally sold privatisation on the basis that it would improve efficiency and service quality because the private sector did those things so much better than the public sector. Instead, the dominant perception is of massive executive salaries built on doing over customers.

This ties into the perception that the rules of the economic game are now rigged in favour of large corporations and wealthy executives — the pointy end of which are the #occupy protests and Alan Jones’s railing against coal-seam gas. Executive remuneration is one of the focal points of this latent hostility in the community, with wage earners constantly being told to accept real wage cuts or negligible increases while executives reward themselves with double-digit annual increases.

From this point of view, more economic reform seems to many people to simply represent a worsening of the current imbalance in the economy.

For some in the community, it goes further. Resentment about the changing nature of the Australian economy, away from manufacturing towards services industries, has been driving a form of regional populism since the days of One Nation. It’s a sentiment that most recently found expression in the anti-carbon tax rallies, composed more or less of the losers from a generation of economic reform, older white people and particularly males, who in previous generations were guaranteed employment for life and an inviolable social status, but who now find they have to compete along with everyone else for economic and social status. Barnaby Joyce and Bob Katter have been effective at tapping this sentiment.

Such people — the class that used to benefit from the socio-economic system, now thrown on hard times — are easily mocked but are simply the most vocal expression of dismay at the atomisation inherent in the liberal economic reform project. What the economists and politicians and advocates of reform (and I’m one) never point out is that economic reform comes with a trade-off — higher economic growth, lower inflation and more jobs, but in exchange for a drastic curbing of the role of government, and a replacement of non-economic values with those of the market. In the world created by economic reform, your only value is as a functioning isolated member of a market economy, as a productive employee and big-spending consumer, and you shouldn’t rely on the community to soften that reality — except if you run a large corporation, in which case you can expect the rules of the game to be altered in your favour.

In such an atmosphere, voters may well wonder whether it’s time not merely that economic reform ended, but that it be reversed.


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33 thoughts on “Who killed economic reform? Maybe we all did

  1. Suzanne Blake


    No one trusts politicans anymore. The backroom deals with minor parties, where we don’t get to see the agreements, the lie regarding the carbon tax, the horse trading with the big miners on the mining tax, the list is endless.

  2. Scott

    Economic reform is not dead. It’s just on hold until a government is elected with enough political capital (Hawke, Howard) or ego (Keating) to drive unpopular reforms through.

  3. Jimmy

    This article laments the lack of economic reform and points to Rudd not delivering on “carbon pricing but on tax reform and housing affordability”, businesses lack of support for the mining tax and businesses call for IR reform in response to productivity increases.

    The article itself points out the issues regarding the IR reform demands, a carbon price and a mining tax (more than likely) will be introduced next year. “Tax reform” is a particularly broad request and always requires long lead times to implement (look at the GST) and the Henry review and even the recent summit are steps along a long and difficult road.

    The only issue to which absolutely no action has been taken is “housing affordability” (although the market does seem to be addressing that itself in recent times).

  4. Ben Shurman

    Think you need to clarify what you mean by economic reform as compared to a change of practice e.g. indirect tax practice change – a bunch of ill-defined ill-targetted hot potch of indirect taxes to a f#*k youse all [GST] tax is an administrative reform and the only thing economist might be interested in is cost, efficiency, incidence, etc.

    Again the privatizations you mention are not economic reforms. and give me a break on this productivity nonsense. Bernard how are you individually going to improve your productivity? Work longer hours?

    But a general comment consumers are supposedly rational. Many, except the 1% are yet to feel, experience the benefits of these so-called economic reforms. What’s that saying you can follow some of the people some of the time…

  5. cpobke

    Though provoking article as always Bernard.
    However, i can’t see how the big ticket economic reforms you point to result in the kind of souless atomisation reffered to in the concluding paragraph.

    “In the world created by economic reform, your only value is as a functioning isolated member of a market economy, as a productive employee and big-spending consumer, and you shouldn’t rely on the community to soften that reality”

    It seems a bit too dramatic to suggest that because the Australian government does not own and operate an airline (or because the taxes paid on manufactured goods produced overseas are lower now than they were in the past) Australians find no (or less) value in the work they do, their family and other relationships, the recreational activies they pursue and the various ways they engage with their community.

  6. Jimmy

    “Thought provoking article as always Bernard” Yes a vast improvement on the poll talk of recent times.

  7. Joe Magill

    Even though I own a small business, I believe that business and business organisations are quick to criticise any reform which has any (perceived) negative impact. The SA state government recently introduced changes to OHS legislation as part of a national OHS standard, a negotiating process which took many years. Local business, particulalrly housing, immediately launched a campaign against the changes, arguing, just for a change, that “jobs will be lost” and “more red tape”.

    Business is also quick to duck for cover when reforming support is needed. Again in SA the local business lobby BusinessSA lobbied vociferously against the mining tax even though most of its members would have gained from the resulting cut in corporate tax rates.

    Sure today’s crop of politicians doesn’t have the ability to deliver the reform argument to the public, and sure, the media in general is not really interested in covering stories as much as capturing those gotcha moments, and sure, the academics are reluctant to loudly and proudly advance the case for reform. But to my mind the major failure is big business and big business organisations who vigourously pursue their very short term interest and refuse to engage in debates which may well be for their long term benefit.

    The group which you have not referred to are the unions – where do they stand in the reform debate?

  8. arunta

    Wait a minute Bernard, Im excited about all the reforms that an Abbott govt. will bring in.
    #Dismantle the NBN
    #Repeal the Carbon tax
    #Repeal the MRRT
    #Repeal plain packaging of cigarettes
    #Repeal the Pokies legislation …… the list of potential achievements is spectacular.

  9. jeebus

    I don’t understand how anyone can say economic reform is “killed”. There is more to reform than flogging off public assets. If anything, it seems that the pendulum is starting to swing away from the laissez-faire economic rationalism that has led to staggering and unproductive wealth concentration, erosion of the middle class engine, and de-industrialisation of the west.

    Three examples of big economic reforms under the current government – NBN, carbon tax, mining tax.

    If a private monopoly owned all the roads in Australia imagine with all of the tolls how big a drag that would impose on the national economy. Should the NBN rollout proceed uninterrupted, and the infrastructure remains a public asset dedicated to selling low cost wholesale data to any and all private companies with equal favour, then as the foundation for Australia’s digital economy, it will ultimately be seen as a worthy reform indeed.

    The carbon tax will bring Australia to the renewables investment tipping point a lot sooner than would otherwise have happened, which will be a very transformative force in the economy. Whether Australian businesses seize the opportunity to innovate and improve their energy usage & environmental sustainability, or to whinge and price gouge is another question altogether.

    Finally, the mining tax is another big reform that is aimed at fixing Australia’s Dutch disease. Would have been much more effective under Rudd’s original plan, though. Can’t say he didn’t try!

  10. Jimmy

    Jeebus – Agree completely, you could also add on to those more social “reforms” (for want of a better word) like a disability insurance scheme and Paid parental leave.

    “Finally, the mining tax is another big reform that is aimed at fixing Australia’s Dutch disease. Would have been much more effective under Rudd’s original plan, though. Can’t say he didn’t try!” And saying it isn’t a worthwhile reform would come under the area Bernard himself recognised “economists demanding perfect policy had no right to complain about politicians lacking the will for reform.”

  11. BlackIvory

    As I don’t expect Bernard to respond to any comments [does he even read them?], I’ll go ahead and suggeset that perhaps where Bernard mentioned ‘economic reform is dead’ he was referring to economic reform observed through the prism of the free market. Hence the references to privatisation being on the nose and the potential reversing of existing reforms…

  12. Observation

    With the realisation of what a market driven economy can do when it is given control to the large money powers of the world I would have thought a more socialistic strategy would have come prevalent. Even Greenspan has admitted it was a complete failure. Now that all the money has been stolen it has been left to governments to clean up the mess, to bail out banks and to protect the ownership of infrastructure of countries.

    Free trade is a farce and a general open book to influence world trade to suit the powerful countries and subdue to poorer ones. With the crisis in Europe we see that an entire restructuring of financing and trade between all countries needs to be manufactured. Where currencies, trade and relations between countries requires guidance through some sort of global treaty so the development of poor countries and the sustainability of richer countries is part of the grand plan.

    Yeah I know, fantasy land right! But the way we have relied on the invisible hand to dictate how our world is run seems to be a cop out and a lazy way to shape our destiny.

  13. davidk

    It does seem the unions and all businesses freak out at anything that might make life a bit harder for them as they are doing it tough ‘ at the moment’ all the time, but in amongst all this talk of the need for economic reform to grow the economy, I’d like to hear someone talking about the need for environmental reform too as a growing economy always seems to be at the expense of the environment which is suffering terribly ‘ at the moment’ all the time.

  14. John

    Economic reform needs to be sold to the public by a strong PM and a strong treasurer. Kevin Rudd was elected without a blueprint for economic reform, Wayne Swan lacked personal economic talent and confidence, and Julia Gillard did her best in the parliament but gave up her head-kicking of Tony Abbott which allowed him to land too many free kicks.
    Tony Abbott will gain The Lodge holding a poisoned challice, so don’t count on economic reform from him.
    What the Australian public needs and deserves is an election win by Tony Abbott followed quickly by a fatal bike accident, followed speedily by the installation of PM Malcolm Turnbull.
    Trade unions need to be put back on a tight leash, Alan Jones requires a fatal brain tumour and business needs to be removed from the public teat.
    Only Turnbull has sufficient economic nous plus the powers of persuasion to sell economic reform to the public. He has what it takes to do a fireside chat. Let’s hope the Liberal Party allows him a freer rein in government than it afforded him as leader of the opposition.

  15. Stevo the Working Twistie

    I don’t understand the basic premise of this article. My local town has no Post Office or bank branch any more. I have been retrenched twice. The CEO of the company I now work for earns 100x more than me (he got a 40% pay rise this year, I got 1.5%). My local public high school has had to put in 6 demountable classrooms, while the private school has upgraded its swimming pool and sports grandstand. NAB has announced a $5.5 billion profit while foreshadowing more cost cutting measures. Qantas can’t afford to give it’s pilots and engineers a rise, but can happily stump up $2m for the CEO.

    I think economic reform is doing pretty bloody well, thank you very much.

  16. Jezza

    Bernard I’d like to see you address the limitations of economic reform and the market economics that underpins it. While economists may argue that they take account of externalities and not just financial measures the reality is that the vast majority of their models and plans are based on glorified financial models. With dollars as the measure you get the kinds of imbalances we are witnessing.

    Privatisation was often nothing more than a balance sheet shifting exercise, removing public assets and potential liabilities from improverished state governments to private hands. On more than one occasion, eg toll roads, the public, the government has had to resume the asset at cost to the taxpayer and the private buyer walked away with a windfall.

    I’ve yet to meet anyone who believes that dollars are a suitable metric for the standard of education or of health care and yet we have semi privatised a lot of our education and health care system.
    Where a market exists and there are inefficiencies in the market, economic reform can work, but in a mixed economy like most of the western world, there are choices to be made that are social, moral and political which are beyond economics. Sure lets use a model to optimise our financial efficiency but the choices and decisions that come first, our required standards of health care are about more than financial or economic choices.
    As the ABS points out in its measures of Australia’s progress we are going forward on every front, except the environment. We are still mining all our natural resources and until we adopt a broader based metric for assessing our success we wil continue down that path.

    I am concerned that money has become the dominant metric for determining success and failure in modern Australia and that is a very narrow and inappropriate measure for the kind of socially inclusive, smart and vibrant Australia I would like to live in.

  17. Douglas and Milko

    Jeebus Bernard, what sort of atomized society do you want, and more importantly why? Or are you being ironic, a bridge too far and all that..

    To quote you:

    “What the economists and politicians and advocates of reform (and I’m one) never point out is that economic reform comes with a trade-off — higher economic growth, lower inflation and more jobs, but in exchange for a drastic curbing of the role of government, and a replacement of non-economic values with those of the market. In the world created by economic reform, your only value is as a functioning isolated member of a market economy, as a productive employee and big-spending consumer, and you shouldn’t rely on the community to soften that reality ..”

    The real genius of Hawke and Keating was that they used the power of the markets to drive reform, but they used that power not to lessen the role of Government in people’s lives, but to use that new-found, market-based prosperity to make sure that the disadvantaged in our society: the poor; the disabled, and the aged, had a living “stipend”. This was when the family payment was introduced. I am a bit old now, but I remember the joy of some not-so-well-off neighbours (I lived in the country), when they could actually go to the supermarket, like normal people, and get a trolley of groceries. As a member of the Labor party, it was one of the proudest moments of my life. I did not end up keeping in touch with this particular family – they were basically farm labourers who worked often only for food and lodgings ( and relied on charity to get school uniforms for their children) and hence they quickly moved to a new district, but I suspect the new-found prosperity, in 1988 (no child will live in poverty and all that), and the consequent fact that their children could then blend in at the local school (able to afford uniforms, books and excursions) meant a much beter life for the children, who now probably do fit the bill as “[their only] value is as a functioning isolated member of a market economy, as a productive employee and big-spending consumer, and you shouldn’t rely on the community to soften that reality ..”

    Bernard, I really enjoy your articles, but do you think the parents of which I speak, should have been left to hang because they had nothing to offer the market, other than their ability to work on farms for food and lodgings, consigning their children to the same fate? Without some excellent economic reform (from Hawke and Keating) , coupled with a bit of a helping hand to those who are really on the bottom rung and had little chance of getting off, Australia would be a much poorer and less productive society. An investment in the health, nutrition, educational and living standards of our citizens should surely be seen as an investment in the market.

    Can you please tell me that I misinterpreted your article, and that you do actually think that as well as the economic reforms of Hawke and Keating, which I stand by 100%, their social reforms, which involved government “interference” were a good thing?

    I have a broader perspective these days. I spend about 50% of my time working in Chile, an interesting contrast to Australia. Here (I am in Chile at the moment) the Chicago school of economics still has much influence. 80% of people still make there living through “PYMES” (small independent businesses, which basically means they sell stuff on the street). For me as a consumer it is great. I buy fresh fruit and vege, clothes and all sorts of useful things (pens, pencils, bandaids, hair clips) from the vendors on the buses in Santiago.
    However, as one Santiguino woman put it, “we now have compulsory education to high school. But why should they read Neruda, when we know that they will spend the rest of their lives picking oranges for a living.” [it will only destroy their souls – my addition].

    I had been a believer that market reform could bring great efficiencies which could then be used to redistribute wealth to make sure we have a healthy and educated society, which apriori seems to be me to be good for the market not bad. However, I do not get the sense that this is what you think economics is about. From my astrophysics perspective, economics is about determining the most efficient way to make sure that the largest number of people in society have the means to actually contribute to society, thereby enhancing productivity. It is actually an economic rationalist perspective – you spend a little to make sure people can contribute to productivity, because they are well fed, integrated into society, and have the education level to make a positive contribution to productivity.

    However, this, of course is not the Ayn Rand sort of economic rationalism, where the fittest, who regard pity and charity as a weakness which will destroy the fabric of society, triumph to create the super race.

    Please tell me that this is not what you think. I have thought a lot about “Why should they read Neruda when they will only end up picking oranges”. Ayn Rand would say, “well. stop wasting money teaching them Neruda”. Is this what you mean when you say “In the world created by economic reform, your only value is as a functioning isolated member of a market economy, as a productive employee and big-spending consumer, and you shouldn’t rely on the community to soften that reality”?

  18. AR

    TwistySteve has the clear sight. Since when did selling off the family silver become ‘reform’? It was never thought of as anything but reprehensible – how many warned what would, and inevitably DID, happen when the Commonwealth, QANTAS, Telstra et al were sold to the carpet baggers, mostly using hiughlyleveraged debt or luckless mums&dads in the case of Telstra.
    However, too many conflate government owned with monopoly, tain’t necessarily so, it’s just a penstroke to achieve both competition AND a guaranteed safety net.

  19. Frank Campbell

    “the perception that the rules of the economic game are now rigged in favour of large corporations and wealthy executives”

    Perception? You jest.

    “more economic reform seems to many people to simply represent a worsening of the current imbalance in the economy.”

    “Imbalance in the economy”!? Try “society”.

    Bernard is part of the problem- still trapped in the assumptions of corporatism. He has no clear notion of what corporatism is…or how it enabled each Gordon Gekko debt/speculation binge from the 1980s to now.

    “atomisation inherent in the liberal economic reform project.” Atomisation certainly, but WTF is the “liberal economic reform project”? Yes, we know about Hawke-Keating, but since then?

    Aside from some patronising remarks about dispossessed regional old white men venting about coal seam gas and whatever (crap Bernard, the regions were always marginal and populist), Keane hasn’t a clue about the class nature of the brutal inequalities that have opened up in the last thirty years.

    The contradiction between Keane’s progressive intent and his corporatist assumptions causes the very splenetic bewilderment which characterises everything he writes.

  20. Peter Ormonde

    Every now and again Cr*key carries an article that reminds one why it’s worth reading. Most of them are by Bernard. Or Guy Rundle early in the week.

    Not sure I agree that economic reform has been “killed”… The MRRT, the Carbon Price and recent taxation reform like lifting the tax-free threshhold are big economic reforms in my book.

    Perhaps the implicit death that you are talking about Bernard is that of market liberalisation … and that’s a different question altogether.

    I’d be pinning that on John Howard’s laziness and Workchoices with the final nails being driven into the coffin by the GFC and the global debt bubble.

    We are getting a clear lesson – at a safe distance so far – about the ruthlessness and instability of unregulated markets. That’s not to say we have unleashed the beasts completely here but we can see them rampaging about elsewhere with deepening inequality in the US and Britain, and an atmosphere of constant rolling crisis. And it worries people and leaves a bad taste in the mouth.

    I don’t think Australians have ever had an ideological libertarian view but are essentially pragmatic… we like things that work. And working does not mean hammering the poor into the ground by cutting welfare spending and driving wages through the floor.

    We like medicare. We think pensions are a good and decent thing to do. We think it is important to do something about mental health, to help people get over floods, to do whatever is necessary to stop Aboriginal communities seeing their kids abused and the future annihilated from a genocidal form of suicide.

    So I reckon what’s happening at the moment isn’t so much the death of economic liberalisation, it’s about putting up structures and reforms that protect the vulnerable and give us a bit of insurance. Not dead just a bit disgraced. But don’t worry, the chancers, the rent-seekers, the carpet-baggers will be back demanding more and promising less. It’s what they do.

  21. Jimmy

    Peter Ormonde – I have to completely agree with your post, very well said. a few points;

    “Every now and again Cr*key carries an article that reminds one why it’s worth reading” And do you notice that when these articles of substance appear TTH, Suzanne Blake et el don’t!!

    “I’d be pinning that on John Howard’s laziness and Workchoices” Howard gave us the GST very early in his tenure, sat back and did nothing except tax cuts that flowed from the GST and mining boom, I am not sure Laziness really covers it.

    “deepening inequality in the US and Britain” While the inequality has deepened over there we have actually improved our wealth distribution in the last 15 years with the MRRT and Carbon tax going to improve that further.

    “And working does not mean hammering the poor into the ground by cutting welfare spending and driving wages through the floor” Many things we take for granted here would be considered out right communism in the US if Obama health care plan is anything to go by.

  22. Old Leftie

    Hack journalists are partly to blame for the lack of will (and understanding) for economic reform. When George Negus gets the flick because he can’t rate against the “ambulance chasers” at ACA and Today Tonight; and the only serious journalism is left to the ABC and SBS, the country is truly uninformed. (I won’t include Q&A in serious journalism – it could best be described as “The Tony Jones Show” or at worst “Question Time Light”). Equally, politicians of both colours are basically media tarts who would turn up to the opening of an envelope if a TV camera were there.

    Sadly, neither Rudd/Gillard nor Abbott and his geriatric front bench are capable of designing or selling economic reform. The Libs will have to wait for Turnbull to return or some (as yet) unknown to come along. The ALP’s best hope at the moment for any real reform is Stephen Smith with Martin Ferguson as his deputy – both are clever, modest and well-respected.

    The other problem with economic reform, is that politicians find it hard to explain to the viewers of ACA & TT why it’s necessary. Equally, they find it hard to explain and understand that some people will be left behind and will need extra help to adjust to a new world. I wouldn’t expect any serious reform for 5 to 10 years. It will take that long to clear state and federal politics of too many opportunists and government for dummies.

  23. Frank Campbell

    PO: “The MRRT, the Carbon Price and recent taxation reform like lifting the tax-free threshhold are big economic reforms in my book. ”

    Eh? Rudd stuffed up the overdue mining super-profits tax by introducing it late in his term (when he was spiralling downward anyway)…he should have rammed it through in 2007.

    “Carbon tax”? Classic example of misuse of the term “reform”: big change, certainly, but the weirdest piece of policy since Stalin killed the Aral Sea…unilateral, cannot possibly attain its object, contradicts basic govt policy which is to facilitate a vast expansion of fossil fuel production which is likely to make FF even cheaper (Gillard: “coal has a fantastic future”), hands revenue to the “polluters” and consumers, funds a massive expansion of expensive and useless (wind)/undeveloped technologies (solar, geothermal etc), accelerates deindustrialisation, etc etc.

    “tax-free threshold”: yes, a reform if it ever happens. But only one aspect of the largely ignored Henry Review.

  24. Peter Ormonde


    Yes, you won’t get any argument from me in defence of Kevin Rudd…I think Rudd was a bureaucrat more than a prime minister, certainly a managerial technocrat … quite hopeless really … so yes no argument about his stuffing around too long with the original MRRT plan and buckling to the industry’s very predictable whining. Same with the tax-free theshhold thing. It will happen. Sooner the better in some ways but also nice and close to the next elections would be sensible.

    As to the Carbon Price/ETS set up … well there we will disagree Frank. I know you’re a steam-powered sorta guy – you like burning stuff and reckon that’s the only way we can get ahead. I reckon we can do it another way – I think we have to. Let’s put it this way – if everyone in China wants toast in the mornings we’re stuffed. So we’d better be able to do something a bit clever.

    Must admit though – this Australian stuff is all probably far too late and too little and doing things globally seems next to impossible, so yeah we’ve probably buggered it up. As I find myself saying – go long on razor wire manufacturers when you’re investing your super … the future will probably look a lot like the past… just more of it.

  25. Ben Shurman

    Re Ormonde Rudd comment – Yeah Rudd was absolute bureaucrat… not. You may have spent too much time with likes of kindergarten ALP caucus who wanted egos stroked and/or factional plotters Arbib, Shorten, Howes and Bitar.

    Every PM since WWII has dealt with GFC. His response was hopeless. Hang on Australia’s response held up as model to world. Wasn’t he accused, although subsequently independently exonerated, of not being bureaucratic enough in BER. Your comment does not compute.

  26. Peter Ormonde

    Re Sherman Rudd comment:

    Politics is a team sport Ben … Rudd was incapable of delegating and micromanaged – or tried to – the entire work of the government. He had no sense when it came to prioritising and routinely overrode or ignored the views of his colleagues. Rudd did not respond to the GFC – the government did – more correctly the gang of four who took the quick decisions that needed to be made. And they took the best advice available particularly from Treasury and Ken Henry.

    Great men only make history in their own bedrooms mate.

    Sadly Rudd believed that it was he – and he alone – responsible for these things – that he had saved us from the GFC – that he could re-write and override Cabinet decisions without discussion – and he behaved accordingly. It cost him his support in Caucus and eventually his position as PM.

    The plotters you refer to are not in the habit of changing horses in mid-stream – particularly if that horse is on a winning streak. Rudd was not stable and the government – the Cabinet- was in serious trouble. Rudd is not a victim here – he brought about his own downfall through arrogance, through bureaucratic high-handedness and by p*ssing off too many people. He believed his own bedroom fantasies. We should not.

    Computers have an essentially typographic role in politics – it is all about people and psychology.

  27. Ben Shurman

    Peter Ormonde what an amazing insight you have into the operation of PM Rudd’s office. Your claim that Rudd was not a stable government is … piffle. In what way wasn’t it a stable government. Because you didn’t like the leader?

    Ending a government by betrayal is not instability of that government. The instability comes from plotters, having unclear reasons for change, having no clear direction yourself and, to continue your euphemisms, not being able to sell heaters to Eskimos.

    Some of the members of recent ALP federal caucuses [teams] have been the most spineless timid useless mob in living memory. For example on the coup night caucus members were not contactable, didn’t know it was on and just as importantly the current caucus team endorsed the actions of the government rather than argue for better policy – malaysia solution and the previous team endorsed the gang of four to run the government during the GFC, BER, Bats, etc.

    And what was the complaint of these caucus pretenders during Rudds term of office. During the GFC he didn’t have time to have them up to his office for a cuppa, iced vovo and a chat. Didn’t listen to that industrial buffoon and dinosaur Howes.

    The caucus team has brought about more instability because of their failure to challenge the current leader’s policies. If you are part of a team you have a responsibility to do your job to the max, not absolve yourself of responsibility. Teams fail when the members let the stars do all the heavy lifting. Under Rudds time if they didn’t like what the gang of four were doing then the cabinet team and the caucus team should have voted against the arrangement.

    Clearly you don’t follow the shenanigans that pass for NSW labour team politics if you say plotters don’t change horses mid-stream. There are a number of recounts from the various participants of plotters changing horses mid-stream simply because they didn’t like policies and even aiding and abetting their opponents.

    Peter, ol’ china, your comments are straight from the Paul Howes handbook on leadership change – my justification to replace Kevin Rudd.

    Lets call a spade a spade and not a digging implement, you are the person who has high flutin’ fantasies and your team sports, horses are part of your political delusions.

  28. Peter Ormonde

    Ben Shurman:

    Euphemisms? I’ve never used a euphemism in my life! Metaphors, similes … buckets of ’em but no euphemisms whatsoever.

    To answer some of your concerns: It was not stable because one man Kevin Rudd believed that he could overturn, re-write or ignore Cabinet decisions and those of Caucus. Government is not one man Ben – it is a team sport.

    The “plotters” as you call them did not end a Government – they ended Kevin Rudd… different thing. You are making the same mistake he did – the Government is much bigger than one man. The madness of King Kevin did not begin with the GFC – it began much later.

    And that is why Kevin will never ever come back Ben – not that some don’t people feel sorry for him, see him as a victim of plots and conspiracies. It’
    s because the people who dumped on Kevin were the caucus as a whole – and they did it because they had to. They will not have such issues with Julia Gillard – she is a lifelong team player that one.

    On a different note: please try and restrain yourself from making unpleasant comments and attacking me personally – I did not attack you or deride your ideas. You do not do St Kevin’s memory any good and you risk making me annoyed or bored.

    No even the NSW Right don’t throw away a leader that they believe can win an election. That’s pretty much all they care about – not policies, that’s for sure. If someone from the NSW ALP tells you they dumped on someone because they didn’t like his or her policies, don’t you believe them.

  29. Ben Shurman

    Dear Mr Ormonde
    i suggest you follow your own advice re supposed attack by me. My comments were about your views while yours on the other hand are offensive. I suggest you look up the word euphemism old “mate” St Kevin is another example.

    Your comments: – on Rudd is not a victim here – he brought about his own downfall through “arrogance”, through “bureaucratic high-handedness” and by “p*ssing off” too many people. .. He believed “his own bedroom fantasies.” “madness of king kevin”

    I’ll bow to your apparent first hand knowledge of Rudd’s office, his character, his bedroom, Cabinet meetings, caucus, the operation of NSW right.

    BTW Is there anything else you are an expert on because the Europeans, the US and some other countries are crying out for help.

  30. Frank Campbell

    No, PO, I’m all for renewables- ones that work at reasonable efficiency and cost. Neglect of renewables research has been a scandal for decades. Look at Geoff Strong’s article in yesterday’s “Age”- three battery storage inventions (i.e. potentially large scale) mouldered away for years. One dates from 1986. No one here would fund R and D.
    As Strong points out, wind companies couldn’t give a stuff about power storage because their useless intemittent power is sold compulsorily at a very high price- why bother? Gas producers back wind because they know wind needs new baseload power backup 80% of the time…Gas companies in the UK are demanding $8 billion to build new (and redundant) gas plants preceisly because the wind fraud has bitten so deep there.

    The vaunted “transition” to “clean green renewables” is deceit wrapped in cant. Especially via a “carbon tax”.

  31. Frank Campbell

    Rudd today wowing the Chogm crowd – cringe, wince…reminiscent of Kinnock’s fatal “we’re all right” hubris, drawled in ghastly Glamorgan Gringo…

    Hate to say it, but the ALP would be better off with Jane Austen (AKA W.Shorten)

  32. Suzanne Blake

    @ Ben Shurman

    Ormonde is an ex Unionist, Union worker, so you will need to cut him some slack

  33. Peter Ormonde

    Ben …

    Not an expert but I do read a lot and I worked in parliament house for several years a long time back and have had a lifelong involvement in politics. I also have known Rudd since the days of the Goss Government. I didn’t like him much then either.

    But it’s not about liking – it’s about how they work out in the pressure cooker of Canberra. Rudd would have been an excellent minister, particularly dealing with complex and technical things… he was good with that sort of stuff … but with people he was a shocker. Like the polar opposite of Hawke.


    Glad you’re gung-ho on the renewables – and as you’ll have noted from elsewhere I share many of your concerns about these tinker toys we’re fiddling with at the moment – but I have some hope that the carbon price will see some R&D and some serious investment instead of these rather unproductive and inefficient gadgets.


    Bong on dude!

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