Treasurer Josh Frydenberg is an ongoing source of frustration. Intelligent, hard-working, with much more to offer than the mugging and smirking of his non-leader Scott Morrison, Frydenberg is also nearly invisible as treasurer at a time when the economy needs leadership.
While no substitute for productivity-enhancing reforms or fiscal stimulus, a high-profile and authoritative treasurer might instil some desperately needed confidence in consumers and business. We’re not getting that from Frydenberg.
Yesterday he gave a major speech at the ANU on “Australia and the Global Economy”. Like every speech by a senior politician now, it was dropped to newspapers, dutifully reported without analysis or critique, and then sunk without trace in the media cycle — and not just because the day was dominated by bushfires.
In their efforts to get speeches some sort of media coverage (from a media that laments the poor quality of political communication and public debate), politicians now guarantee they’ll get five minutes in the papers and then nothing. They may as well simply issue them as media releases and not bother showing up to deliver them.
Frydenberg’s speech is at a crucial time for the global economy, with the institutions that underpin the international economic order under attack as never before in the 75 years since Bretton Woods. Frydenberg himself argued back in September, along with international counterparts, “there is no alternative to multilateralism”. Much of the speech was devoted to Australia’s economic history from federation, when “the Australian economy looked very different to the one we have today” and “tensions between nations in Europe were building and erupted into World War I in 1914”.
The Little Golden Books Economic History aside, Frydenberg’s focus was on the “importance of recapturing the cooperative spirit of Bretton Woods”. If you don’t know your history, you might be forgiven for thinking it was Robert Menzies — invoked twice by Frydenberg — who presided over Australia’s role at the Bretton Woods conference, and not the government of John Curtin and his treasurer Ben Chifley, but a little partisan revisionism is forgivable.
When it came to actual substance, however, Frydenberg had little to offer. The “new set of challenges” facing the post-war architecture were, he said, an ageing population, debt levels, rapid urbanisation and great power rivalry. Climate change, apparently, isn’t significant enough to make the list.
The only mention of climate change was to blame the developing world for it:
“As more people are lifted out of poverty, the pressures on the environment will only increase. In Asia alone, energy consumption has quadrupled over the past three decades. These challenges, many of which have been positive, have also contributed to the impact of human-induced climate change.”
So there you have it — climate change is nothing to do with wealthy, emissions-intensive economies like Australia that have enjoyed two centuries of industrialisation.
Which brings us to a bigger point missing from the speech. Bretton Woods led to “institutions that remain important to this day”, Frydenberg said. “The International Monetary Fund, the World Bank, and the World Trade Organisation.”
True. And it was the IMF that recently demolished the government’s lie that it will easily meet its Paris Agreement emission reduction, noting that even a massive carbon price would now not deliver the abatement necessary to curb emissions by 26% on 2005 levels. And it was the World Bank that two years ago urged Australia to allow open labour market access for workers from Tuvalu and Kiribati, enabling those two countries to deal with the devastating economic impacts of rising sea levels.
Scott Morrison’s response has been a Trumpesque attack on international climate critics and a conspiracy theory about how multilateralism was “an unaccountable internationalist bureaucracy” and “a negative globalism that coercively seeks to impose a mandate”.
Frydenberg’s speech thus exposed a tension at the heart of this government: rational ministers like Frydenberg understand that Australia, more than most, benefits from an international rules-based order that seems to constrain nations from unilaterally asserting themselves in areas like trade and finance. But Morrison is happy to ally himself with the Trump project of undermining exactly that rules-based order and portraying international cooperation as some kind of world government assault on national sovereignty.
But Morrison is happy to ally himself with the Trump project of undermining exactly that rules-based order and portraying international cooperation as some kind of world government assault on national sovereignty.
Of course, given the government is committed to doing precisely nothing of any note, this tension can persist in the abstract while Australia drifts and stagnates.
Correction: This article originally stated that the World Bank report urged open borders with Pacific states; in fact it urged open labour markets for Tuvalu and Kiribati given their acute climate risks. The text above has been corrected.