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For voters economics is queen

By Chris Lewis - posted Tuesday, 24 September 2013


A recent opinion piece by a Monash University academic Paul Strangio, comparing Australian prime ministers, states

My hunch is that history will treat Gillard with more sympathy than her legion of contemporary detractors. The rankings indicate that policy footprints matter most to prime ministerial reputation, and on this criterion measures such as the first serious response to climate change, a national disability insurance scheme, national broadband infrastructure and a new education funding system have the makings of a substantial legacy that has been eked in the unfamiliar and inhospitable conditions of minority government. Posterity will better judge this reform program's significance and weight it against her incapacity to parlay the measures into electoral favour.

Despite some achievements, I criticise the Gillard government’s legacy on the basis of economic incompetence given the context of the day which demanded a more sensible approach in order to boost consumer and business confidence in these uncertain times.

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Labor’s economic policy failure, not only allowed the Coalition to largely wait for Labor’s inevitable fall, despite Abbott promoting a consistent policy platform, but complicated Labor’s claim to be the political party which best balances Australia’s economic, social and environmental policy mix.

My assertion stands despite Labor’s cheer squad referring to Australia leading the OECD in a number of criteria, and Kevin Rudd (and others) suggesting that Australians were influenced by a biased Murdoch dominated media

Simple truth is that one needs to look beyond the flattering data. For instance, a recent Credit Suisse Global Wealth report indicates average adult wealth in Australia to be the second-highest in the world in 2012 ($US355,000), with median wealth the highest ($US194,000), yet this level was maintained by high levels of home ownership and a high dollar (boosted by the commodity export boom).

And, when I note Labor’s lack of economic prowess, I am not suggesting that Australians were looking for magical economic solutions.  Unlike my own concerns about trade and Rudd’s promise to prevent Australia from becoming a quarry for Asia, many Australians recognise that most of the developed world also relies more on economic growth by China. Most Australians also recognise that the ongoing demise of Australia manufacturing, down to 7.1 per cent of GDP in 2011-12 after being 11.2% in 2003-04, was not helped by a high Australian dollar.

Nor do I imply that government policy is easy as new evidence may force change. For example, the Gillard government during May 2012 gave approval for mining magnate Gina Rinehart to bring in 1700 skilled foreign workers to get her $9.5 billion Roy Hill iron ore mine underway in the Pilbara. Yet, during June 2013, the government introduced legislation to require subclass 457 visa sponsors to demonstrate that there are no qualified and experienced Australian workers readily available, unless an exemption applies. This followed a 68 per cent increase in 457 visas in the Information Technology sector since 2008 compared to 35 per cent across all sectors.  

Rather, with the public again placing its faith in Labor in 2010, albeit it served as a minority government, probably in recognition that Australia had fared relatively well from the global financial crisis, I believe that the public expected a more conservative type of Labor government.

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After the chaos of Rudd with major policy reversals (abandoning the emissions trading scheme) and major policy embarrassments (the Home Insulation Program), it was no longer enough for Labor (and supporters) to rave on about past glories as if it was the progressive party for all ages. By 2010, most Western nations faced fiscal difficulty (including Australia).

Yet, under Gillard, Labor failed to create any perception of economic competency during a period of greater economic uncertainty. 

Under Gillard, there were three major policy blunders that hardly helped consumer or business confidence, the very engines that drive the economic viability of an advanced Western society seeking to balance economic, social and environmental issues.

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About the Author

Chris Lewis has an interest in all economic, social and environmental issues, but believes that the struggle for the ‘right’ policy mix remains an elusive goal in such a complex and competitive world.

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All articles by Chris Lewis

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