Coalition served its dream campaign issues – and fails to deliver

Coalition served its dream campaign issues – and fails to deliver

04/29/2022

Reality has knocked on the door of the federal election campaign. The big, dangerous reality beyond the tiny homes occupied by the political campaigns and their tiny plans. But who’s answered the door?

First came China’s hard knock on Australia’s security. Then came the knock of raging inflation, which must lead to rising interest rates, the rising cost of living rampant.

Illustration: John ShakespeareCredit:

Neither was a complete surprise. Both pose serious challenges to the country. How did the Coalition and Labor, the two parties of government, respond?

The twin themes of national security and the economy are heaven-sent for the Coalition, nominally. These are the Liberal Party’s two great brand strengths and Labor’s brand weaknesses. These are the themes that Scott Morrison wanted to campaign on.

Morrison and his ministers had rhetoric at the ready. Morrison said that a Chinese military base on Solomon Islands would be a “red line”. He returned to his theme that Labor was “soft on China”. He’s earlier accused Labor leader Anthony Albanese of being “on China’s side” and its deputy leader, Richard Marles, of being a “Manchurian candidate”.

Defence Minister Peter Dutton won attention for saying on Anzac Day that “the only way you can preserve peace is to prepare for war”.

But that was about it. They produced no policy response. Morrison’s “red line” might have been a marker of a new policy, but, when pressed, he had nothing to add.

Likewise with the news that inflation had surged at an exceptionally fast rate. There was rhetoric but no policy response. Sure, Morrison immediately pointed out that the government was giving some temporary relief for the rising cost of living. The government announced in the budget that it was halving petrol tax for six months, giving pensioners and other concession cardholders one-off cash payments of $250 each, and giving a one-off tax offset of $420 for low- and middle-income earners.

But this doesn’t constitute a policy response to rising prices. These measures are gimmicks. The cost of living will keep rising. These supposed offsets will all be gone and forgotten by September. Worse, the combined cost to the taxpayer is $8.6 billion. That goes straight onto the national debt. And adds to inflationary pressures in the economy. It’s junk policy. It actually aggravates the problem.

Prime Minister Scott Morrison visits Mersey Yacht Club in the seat of Braddon.Credit:James Brickwood

A reporter asked Morrison on Wednesday: “On the rising cost of living. Australians will say $250 today, that’s going to be spent pretty quickly. So in six months’ time when that cash is gone and the fuel excise has gone back. What will you be doing then to help with cost of living?”

Morrison replied: “Making sure that our economy is strong, that we continue to manage our finances well because that’s what puts downward pressure on inflation.”

Which is, of course, nonsense. This government is hopeless with budget management. The pandemic emergency has passed but the spending continues to grow, deficits continue to run and the national debt heads towards $1 trillion. The national debt hasn’t been this big since 1956, as a proportion to the economy.

In other words, the government has no policy response. So the task of responding in the real world falls to the Reserve Bank, which must now raise official interest rates to contain inflation. It’s had zero help from the Morrison-Frydenberg budget. On the contrary.

Reality knocked, and Morrison had no answer.

In the government’s defence, Morrison isn’t responsible for Beijing’s expansionism in the Pacific. He didn’t craft Xi Jinping’s “China Dream” of “the great rejuvenation of the Chinese nation”, a dream that is creating nightmares among China’s neighbours. Nor did Morrison create the global inflationary surge.

But as the national leader, he might have had some policy responses to these twin crises, not just talking points and gimmicks. And perhaps he’s preparing some. We’re only halfway through the election campaign. Indeed, the Liberals planned a campaign based on national security and economic management. These twin shocks present the government with an opportunity to demonstrate its seriousness and its policy credentials. But if what we see so far is all that we get, it’ll be evidence of an exhausted government, bereft of ideas.

Labor turned out to be the party with actual policy responses. To both crises. True, they’re very modest. They’d have little effect if implemented. But they’d do no harm and might help at the margin.

Labor’s foreign affairs spokesperson, Penny Wong, announced Labor’s Pacific policy. Its overall effect would help bring the region’s nations closer to Australia. The main elements are five. One is a new annual quota for 3000 Pacific people to migrate permanently to Australia, modelled on a successful New Zealand policy, plus other policies to ease access for temporary Pacific workers.

Another is $8 million extra for the ABC International to improve its broadcasting into the region and to train local journalists. A third is to double funding by adding $12 million for aerial surveillance to guard against illegal fishing in Pacific nations’ waters. A fourth is to create a defence school to train Pacific militaries. The most expensive policy is a Pacific aid boost of $525 million over four years. All these ideas are welcomed by Pacific nations.

And there’s a promise to better empathise with the Pacific islanders over the effects of climate change; Labor hasn’t costed that policy.

Wong contrasted her policy with the government’s: “Their response appears to be more chest-beating. There is no point in beating your chest if you’re beaten to the punch.”

The government’s response to Labor’s proposals? It was dismissive. Morrison said: “I sent in the AFP [Australian Federal Police], the Labor Party wants to send in the ABC.”

On first principles, it’s obvious that the current policy isn’t working. Some extra effort and new ideas would seem to be advisable. Labor’s offerings are minimal, but better than nothing.

You could say the same about Labor’s budget policy, announced the day of the inflation news bombshell. It was even more minimal than its Pacific policy. Shadow treasurer Jim Chalmers said that Labor would save $3 billion over four years by cutting down on use of consultants and labour hire firms, and raise $1.9 billion over four years by addressing tax evasion by multinational firms.

Chalmers promised that this would be the only tax increase that Labor would implement. The total budget improvement of $5 billion would not be used to reduce the deficit but would be spent on other Labor initiatives. So the net effect would make no difference on the budget’s inflationary influence on the economy.

Is it obvious that Labor still hasn’t recovered from the trauma of losing the 2019 election with its bold tax reform ideas? Labor did promise an audit of the government’s rort-prone grants schemes, with potential savings of up to $5.7 billion.

As for the cost of living, Labor promises cheaper childcare and higher wages for the so-called “care economy” sectors such as aged care. It says a Labor government could achieve this by arguing its cause in cases before the Fair Work Commission, which is fair enough but would take time to take effect.

Reality knocked, and Labor did not exactly answer, but it had a few positive things to say.

If Morrison can’t produce ideas to respond to the crises, they will turn into net negatives for the Coalition. This hasn’t stripped them of their brand recognition as the better party to handle the economy and national security yet, but it already has blurred its image.

An Australian election won’t be won or lost on foreign policy. But it does give a government a chance to demonstrate competence. This government has failed that one. This feeds into the Labor narrative of a bungling government that can’t manage a crisis.

The economy is different. Federal elections are won and lost on it. Growth is strong, but governments have lost elections in times of rising growth. The Howard government, for instance. The government’s greatest gain here was Albanese’s self-inflicted damage in taking a wild stab at the unemployment rate. And getting it wrong.

But a prime minister who can’t credibly explain how he’ll deal with a cost of living crisis is a prime minister asking for the sack. A Labor MP defending a marginal seat says that there’s a noticeable loss of voter respect for the Coalition’s economic credentials compared to previous elections.

Brands can lose their allure. Political brands, too. Witness the astonishing implosion at a single election of the two main parties that dominated French postwar politics. Those once-mighty centre-left and centre-right parties are both irrelevant, each now polling in single digits.

The steady erosion in the primary vote for the two main parties in Australia is similar but in slow motion. Brand expert Trudi Cassin, of the Brand Council consultancy, offers examples of Nokia and Blockbuster, once-dominant brands that have faded or disappeared altogether: “They were just not staying ahead of the game, not seeing future opportunities, losing relevance.”

The future is knocking. Who is going to answer?

Peter Hartcher is political editor.

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