To grasp what’s happening in politics this week, think about pretty much every eternal verity about economic rationalism that Australian policymakers have adhered to now for a generation and imagine the Coalition chucking them out the window. Not all at once, and not all ministers. But a deeply worried government is abandoning shibboleths around market economics at a rate of knots.
It’s worried not just about its political future, vividly demonstrated by the long line of polls that have shown it trailing Labor, but worried that the entire ideological landscape in politics, not just in Australia but across the West, is changing rapidly.
Yesterday, faced with the need to be seen to be doing something, anything, about the big rises in power bills that will soon roll out across eastern Australia, PM Malcolm Turnbull, his Energy Minister Josh Frydenberg and Minister for Digging Stuff Up Matt Canavan, announced that new export controls would be placed on gas, that the ability of energy companies to appeal against regulator decisions on pricing would be ended, and the government would establish how to replace the coal-fired power capacity that would be taken out of the grid in coming years. If necessary, the government would also fund replacement projects, up to and including clean coal.
In one announcement, the government unveiled even greater interference in companies and their property rights, cut off access to the legal system for companies, and flagged it was ready to get into the business of owning power stations that the market refused to fund because they made no commercial sense. Small government? Avoidance of sovereign risk? Investor certainty? Rule of law? Letting markets solve problems? Pfffft.
And it was happening at the same time as the government was desperate to find the votes to support a big increase in public schools funding at the expense of private schools.
Welcome to 2017, when Donald Trump is in the White House, Jeremy Corbyn looks twice the leader as any Tory does, wages have been stagnant for several years and consumers are sick and tired of paying ever-higher electricity prices for less reliable service. All governments of one kind or another are forced to abandon some point of ideology for electoral considerations. But the wholesale jettisoning of neoliberal truisms like so much unwanted weight from a sinking life raft is unprecedented in recent decades. What appeared nonsensical drivel from the likes of George Christensen a few days ago — the government should build coal-fired power stations — is now being seriously countenanced.
Not all ministers have worked it out yet. Take Treasurer Scott Morrison, who yesterday in effect contradicted Reserve Bank governor Phillip Lowe’s suggestion that higher wages would be a good thing. Wages rises would come when companies grew, Morrison said. And Michaelia Cash’s legislation to target systematic underpayment of workers has just been delayed following lobbying by — you guessed it — business.
This sort of thing won’t cut it any more. Morrison’s language would have been unexceptionable even just a year ago. Now it sounds like a “bugger you” to households.
If Labor had done any of these things — especially around domestic gas reservation — the screams from the Liberals about sovereign risk and the impact on investment would have been deafening. But the Liberals are learning they need to adjust to an electoral atmosphere in which neoliberal dogma is increasingly toxic.
If business has a complaint about the direction of the government, there plenty of people it can take the matter up with. Tony Abbott and co, who ensured years of investment uncertainty in the electricity market. The Business Council and other big business lobbyists who incessantly demand wage cuts and lower company taxes. Energy companies that have relentlessly gamed the byzantine National Electricity Market. Gas companies that invested billions without having the gas to process in their LNG trains. Pipeline owners who behave like something out of the American Gilded Age. They thought they were being clever, maximising shareholder value and charging what the market would bear. All they did was end up provoking a backlash, and it has a long way to go yet.