The obvious resonance for Prime Minister Kevin Rudd’s one-man debate at the National Press Club yesterday was the consensus era of Bob Hawke c.1983 — another leader, by the way, installed by Labor not long before an election in the hope of winning. Perhaps Max Gillies will again tour A Night of National Reconciliation.
Asked about the parallels, Rudd correctly pointed out that Hawke could rely on centralised wage-fixing in Labor’s accord with trade unions back then as a key element in Hawke’s strategy. He might have added that unions now cover significantly less of the Australian workforce than they did in 1983.
Still, the attempt to establish the groundwork for a less aggressive, more constructive approach to the challenges of an economic transition indeed owed much to Hawke, who would have won in a canter against Malcolm Fraser anyway but who cleverly played against type by talking about consensus in a period marked by industrial turmoil, recession and a broken wage-fixing model. And Rudd continued his clear differentiation with former PM Julia Gillard and former treasurer Wayne Swan by again pointedly rejecting “class warfare”.
There was, of course, never any “class warfare” from Gillard and Swan — that was a confection by News Corp papers. But it makes for handy, and symbolism-laden, rhetoric for Rudd, who is now using that confection to distinguish himself from his predecessor.
And Rudd’s productivity plan, to the extent it was outlined yesterday, is a mixed bag. There’s a demonstrable lurch to the Right in his words on electricity, with Rudd singling out “publicly owned transmission and distribution utilities” as a particular problem, and therefore suggesting privatisation was the best approach. The Prime Minister also singled out environmental approval processes and the need for a one-stop shop for projects (don’t politicians love a one-stop shop?!), alarming the Greens. Rudd also mentioned examining “any unintended rigidities arising in the labour market”, although the only example he singled out was greenfields agreements, where the Gillard government had already indicated an intention to follow the recommendations of the Fair Work Act review.
But Rudd also spoke about what has been, until recently, the productivity that dared not speak its name: business productivity. “Some bad industrial outcomes for some major projects can be the result of bad management decisions rather than union hostility,” he said, and singled out (again) Australia’s poor business relations with Indonesia — “this is a problem of Australian enterprise. Not a problem created by Australian unions.”
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That sort of talk is anathema in the pages of The Australian, where a Treasury paper that illustrated the problem of poor management was decried as a example of politicisation. Inconveniently, the Business Council now agrees business productivity is an issue, as well as lazy workers and evil unions harming labour productivity.
As a combination of economic and political strategy, it was as solid as that crafted within Gillard’s office early this year, when she used the strength of the dollar as the spur for greater innovation. The dollar is, for the moment, no longer available to be used as a bogeyman to drive reform (and justify interventionist industry policy); handily, the passing of the peak of the mining boom can now play that role, which is what Rudd is using it for.
But unlike the high dollar, which was hammering trade-exposed businesses and forcing them to cut costs or go broke, the rhetoric about economic transition doesn’t have a real-world impact. The high dollar was helping to drive trade-exposed businesses to pursue higher productivity, and labour productivity has responded over the last 18 months, regardless of what governments did. Without the strong dollar, the drive to pursue productivity gains is likely to flag, leaving a challenge for whoever wins the coming election. Rudd’s rhetoric better be in earnest, rather than political positioning.