Complacency keeps Lucky Country Australia down
But initial success was soon followed by the reappearance of Australia’s traditional enemy – complacency. By the time floods devastated parts of Queensland and NSW, Morrison had regressed to “I don’t hold a hose, mate” mode.
One of the most woeful moments of the floods was about one week into the disaster. It was hearing the mayor of Lismore, his town metres under water and 43,000 desperate residents fleeing or awaiting recue, asked about his experience with the new federal institution created to deal with precisely such events, the National Recovery and Resilience Agency. It was, Steve Krieg told The Drum, the first time he’d heard of it.
The leaden weight of complacency sits heavy, crushing initiative, defying solutions. Whether it’s climate change, aged care, economic reform or foreign policy, the Morrison government is good with talking points and token effort but not solutions. Why call a royal commission into aged care but refuse to implement key recommendations? Why call for the Respect@Work report but refuse to act on crucial findings?
This is not a partisan point. A Liberal state government in NSW has shown reformist ambition on renewable energy and tax reform, and now is fully funding its anti-corruption body, the ICAC, among other areas. Inertia is not endemic to Liberal-National Coalition governments. It’s specific to the Morrison government.
The deadweight of complacency has been on dismal display in the federal election. The threadbare offerings of new policy from the government attests to complacency, or perhaps exhaustion. In most areas, Anthony Albanese’s Labor Party is careful to match its undervaulting unambition. In some, Labor matches the government but then adds about 5 per cent extra ambition. It offers more hope, but not so much as to give Morrison something to attack.
But what about the big news of the past week, the Coalition’s first home-buying help policy? And Labor’s policy, also designed to help first home buyers? The hard truth is that both are gimmicks, not solutions.
Australia’s problem is a shortage of housing. Nothing in the government’s plan will add a single house to the national stock. It simply allows you to use some of your superannuation savings towards a deposit. So more dollars will be unleashed in pursuit of the same pool of housing. You might have more money to bid with, but so do the other 50,000 people, or however many might take up the plan. Morrison is content to offer an illusion, not a solution.
Labor’s plan is similar. Except that instead of allowing you to borrow your own superannuation, Labor will let you borrow from the government. Labor’s extra margin of effort to actually solve the problem is a plan to build 30,000 new social and affordable homes over five years. The existing long-term shortfall in the housing stock is about 100,000 in NSW alone, and it’s growing year by year. Labor’s policy will only help at the margin.
Fascinating, isn’t it? By offering these policies, the parties acknowledge the problem, yet refuse the effort to solve it.
Lee Kuan Yew took a poor port city under constant threat of unrest and built it into prosperous, stable Singapore by requiring everyone to invest a percentage of their incomes in government-built apartments. Over time, the workers became homeowners. A strong middle class was created. Australia’s current leaders start in the opposite position, with a prosperous, stable, middle-class nation of home owners. And allow it to run down year by year.
Both parties love to talk about their economic “plans” and their economic “reforms”. It’s true that the Australian economy is growing strongly, that unemployment is gratifyingly low. It would be shocking if it were anything else. The government spent more than $300 billion in emergency pandemic stimulus, about 14 per cent of GDP. The noted econometric modeller Chris Murphy estimated the government was so zealous that it spent about $2 in stimulus for every $1 in lost income. It spent at least $112,000 for every job saved. And interest rates were so low that money was, in effect, free.
That’s all fine in a crisis. But the crisis has passed. And still the Morrison government is haemorrhaging money. It’s “strong economic plan” envisages running deficits for at least the next 14 years, adding to debt every year as Australia careens towards $1 trillion in federal debt, and beyond. This isn’t a plan. It’s a surrender. The Reserve Bank will take up the slack by raising interest rates.
Labor talks a good game about its productivity agenda. Productivity growth – getting more value in outputs from the same capital and labour inputs – is the ultimate source of improvement in living standards. And Labor does offer at least a glimmer of ambition with its policies for childcare, renewable energy and TAFE training. But it’s adopted these policies as politically popular, then added the gloss of productivity enhancement.
Now, this week, we see Labor craftily using the productivity angle as justification for its spending. In its costings unveiled on Thursday, Labor would spend $8.4 billion more than the Coalition over the next four years. So if the government is fecklessly adding to inflationary pressures, Labor is adding all of that, plus a touch more. For perspective, the federal government spends $625 billion a year. If a political party is unable to find $8 billion in savings out of $2.5 trillion, it’s not trying.
The central point here is that neither party has a serious plan to reinvigorate the economy, to generate more income, above and beyond the current trajectory of a flatulent status quo. And no plan to reduce the national debt. There is no real economic reform. The government is too tired and the opposition too timid.
If a political party occupies high office but doesn’t use it to improve the country, what is it? It becomes merely a self-serving instrument of patronage. And that’s exactly what’s happening.
In new research this week, the Australia Institute revealed that Coalition cronyism was burgeoning on the quasi-judicial Administrative Appeals Tribunal. Academic Debra Wilkinson spent months scrutinising almost 1000 appointments to the tribunal over a quarter of a century. These jobs come with salaries for full-time members of $193,990 and up to $496,560 for deputy presidents. It’s a review body. The job is to hear appeals against government decisions on migration, welfare, the NDIS and more.
Her finding? About 5 per cent of appointments by the Howard and Rudd-Gillard governments had been of people with political backgrounds. Mates, in other words. Under Morrison that has exploded to 40 per cent.
Some of the Morrison government grants programs reek of partisan preference, famously the “sports rorts” and “car pork” schemes. Of the $15 billion in new infrastructure funding announced in the latest federal budget, only one-third had been recommended by Infrastructure Australia as economically useful to the community. The rest? If it’s not helping the common good, it’s helping someone’s special interest.
All of which makes a federal anti-corruption body more essential. And Morrison’s notorious resistance more untenable. The 31 retired judges who this week urged him to reconsider said that, without a national integrity commission, the common good “will not always prevail over the corrupt exercise of power”.
Trust in government soared in the pandemic’s early phase, Morrison’s finest hour. It’s been sliding ever since. His government has failed to find any ambition for Australia, and it’s actively undercutting trust. It’s a failing government managing national decline.
The great strength of democracy is that it allows renewal. If Australia prefers Labor today, Albanese will need to discover ambition beyond his campaign marketing and earn trust beyond his promises. Only then might Australia begin to manage its greatness.
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