The real problem with Tony Abbott
After Tony Abbott decided to give a knighthood to Prince Philip last month, the right-wing Melbourne shock-jock Andrew Bolt laid into the prime minister: ‘This is just such a pathetically stupid – gosh, I didn’t mean to be that strong because I actually like Tony Abbott very much – but this is just such a very, very, very stupid decision, so damaging that it could be fatal.’ Rupert Murdoch agreed that there had been a failure of leadership: ‘Tough to write, but if he won’t replace top aide Peta Credlin she must do her patriotic duty and resign,’ he tweeted.
Abbott has narrowly survived a vote on whether or not to open up his position to challengers, but his troubles are far from over. His collapsing poll numbers and waning credibility are for once about substance, not style. Leadership may be a lightning rod for discontent, but the underlying cause is the government’s inability to convince the public of the merits of its neoliberal economic agenda.
The Abbott administration is driven by an ideological urge to cut public services everywhere and shift payment for the remaining services onto individuals: the banner policies in the 2014 budget were deregulating higher education and introducing a levy for GP visits. The government has pursued the agenda across the board with very little regard for the context of individual policy areas. Last year, the government cut 2100 jobs at the Australian Tax Office. Never mind that cutting tax collection capacity actually costs money in the long-term – in this case as much as $6 for every $1 ‘saved’.
As Richard Cooke argues in the Monthly, polls consistently show that voters do not want this ideology. Not everything the public wants is good policy; that is where leadership, as opposed to pandering to public opinion, comes in. But you can’t pitch a neoliberal programme to a hostile crowd and then blame ‘leadership’ for a lack of traction.
In the Queensland state election at the end of last month, the government’s proposed privatisation of electricity infrastructure was the central issue. Going to the polls with 78 of 89 seats, the Liberal National Party now looks set to lose its majority.
The appeal of privatisation to governments is twofold (it’s worth pointing out that Labor is also in favour of selling off public assets, though with more hand-wringing). Politically, it cements an alliance between a party and private capital. The Liberal Party receives nearly two-and-a-half times as much funding from the resources and energy sector as Labor does. Privatisation also helps governments balance their budgets without raising taxes, by transforming off-the-books public assets into revenue. The Abbott administration has demonised taxes while promising to sort out the ‘debt and deficit disaster’ left behind by Labor: privatisation is the path of least resistance. The government recently sold off Medibank Private, a publicly owned, privately run health insurance provider. But as even the Business Spectator has pointed out, the privatisation merely delivers a short-term windfall by selling a long-term profitable asset. (Only 29 per cent of Australians supported the Medibank Private sale; 54 per cent opposed it.)
Where to from here? The government needs to remember that one of John Howard’s great strengths was his ability to keep traditional economic liberals and market fundamentalist neoliberals together under one political roof. He did this not only by appealing to big business, but also by incentivising the middle classes to buy into the ‘private’ idea, whether through subsidies for parents sending their children to private schools, or in asset sell-offs that targeted ‘mum and dad’ investors.
For Labor, the current crisis provides a real opportunity, but also a challenge. An election is too far off for them to coast to victory by simply opposing the government with soundbites (some nifty, some mangled). It needs to start aiming at the open goals: the places where public opinion and good policy coincide. One obvious area, which Labor has already identified, is closing tax loopholes. Another is corruption, following the revelations of widespread graft in New South Wales.
Both sides should also take serious notice of the central policy lesson of the Abbott era. If a government thinks a sclerotic asset could function better in private hands, it should say why, and then privatise the asset in such a way that the private-profit and public-interest incentives are transparently aligned: i.e. the company makes money while providing a better service at a lower price, not the opposite. But it shouldn’t privatise for the sake of doing so. Victoria has a privatised electricity market; prices and productivity are strikingly similar to those elsewhere in the country. Queensland voters knew that. The public might just be onto something and politicians would do well to listen.