Gillard versus Abbott: does it really matter who wins?

Kevin Rudd’s almost-one term as prime minister is perhaps unprecedented, especially with Australia’s economy going well by Western nation standards in terms of growth. But once Rudd lost his record public popularity, after a number of major policy debacles and backdowns, his extensive control and lack of consensual style was no longer tolerated: especially at a time when the Coalition challenged Labor in the polls as the preferred government option despite Rudd still outpolling Tony Abbott as preferred PM.

But Rudd’s exit aside, key tactics in the upcoming federal election are already known. Labor will seek to generate fear towards Abbott, especially his past statements which include support for further labour market reform. The Coalition will seek to highlight the shortcomings of the government’s economic stimulus programs, especially its home insulation scheme which will go down as one of the worst policy debacles in Australian federal government history.

Taking a punt, Labor is likely to win. Julia Gillard is a capable leader and political animal who will generate enough public support by addressing various community concerns. And Labor’s subtle effort to blame Rudd’s style will again allow Labor to offer a greater degree of spin, thus offering hope for those inclined to be inspired by statements.

Already, a Nielsen poll indicates a 55-45 lead for Labor on a “two-party” basis, with Gillard also the preferred PM over Abbott (55-34). A separate Galaxy poll had Labor 52-48 on a “two-party” with Gillard preferred over Abbott 58-32.

There are two issues that may cement a Labor victory.

First, if Labor can resolve the mining tax, or at least be seen to be making a fair effort at comprise, it will gain considerable credibility. This is what the public wants, despite some public division over the needed taxation revenue concerns to pay for important spending programs, or the need for Australia’s mining industry to remain competitive in taxation terms. A May 2010 Morgan poll (Finding 4496) found that 52 per cent of electors (up 7 per cent from about a week earlier) disapproved of a 40 per cent mining tax on profits.

The second issue that may ensure a Labor victory will be its bid to enhance its environmental credentials. While an Abbott-led Coalition helped erode public support for the Rudd government’s Carbon Pollution Reduction Scheme - with a January 2010 What The People Want poll finding a support-opposition ratio of 33-51 per cent after being 40-42 in October 2009 - the same poll indicated that 54 per cent still “strongly agreed” or “agreed” that “man was substantially responsible for an increase in global temperature” (58 in October 2009); 57 per cent still thought that CO2 was making the earth warmer as a greenhouse gas (62 in October 2009); and 51 per cent supported Australia move on global warming, even if the rest of the world was not ready to move.

While Gillard has indicated a greater desire to work with the community on environmental solutions, Labor will have to overcome the reluctance by Australians to pay higher prices. The January 2010 What The People Want poll found that 59 per cent would pay no more than $10 additional per month (including 47 per cent who would pay nothing extra). This was mirrored by the Lowy Institute Poll (2010) which found that 33 per cent were not prepared to pay anything extra with 25 per cent prepared to pay an extra $10 or less.

In regards to rising housing costs both sides are yet to offer few policy solutions. This is despite the Coalition highlighting an admission by Wayne Swan that the gap between supply and demand for could grow to 600,000 dwellings in the next 10 years. It seems that only a major global recession or lower immigration targets will force a major home price correction, although much suffering would accompany the former scenario.

And, despite differences over the degree of government intervention between Labor and the Coalition, the trend continues towards lower company tax rates (besides mining) and greater labour market deregulation. Perhaps only a reversal of policy trends by major players (especially the US, UK and EU giants) will cause a reversal of such trends.

But that is where my pessimism ends. I do not pretend that a Labor or Coalition government can provide magical solutions as they seek to address many old and new policy issues at a time when government outlays as a percentage of GDP has barely changed in the last 25 years. Governments today have to be even smarter, fairer and efficient with our allocation of resources.

But I have faith in the Australian people as part of the important interaction that occurs between political parties, interest groups and public opinion in our liberal democracy.

In contrast to many comments on blogs, I do not fear the election of Labor or the Coalition. I gave up my dogmatic support for Labor long ago, and have primary faith in the merit of competition over ideas and perspectives between various players on many different issues.

While Abbott is often cited as wanting to end legal abortion, destroy industrial relations, or even decimate social security, he has little hope of doing so even if he wanted to. Australian traditions and expectations, built up over decades, will ensure that any change on such issues occurs in a way acceptable to the Australian people. As the Howard government found out, radical industrial relations reforms (especially in a time of higher economic growth), was hardly likely to convince a majority, even allowing for lower trade union membership.

In any case, at this time when many Australian voters are disillusioned with the major parties, a Coalition government will have to overcome a clear majority of non-Coalition parties in the Senate.

Australia remains a very liberal and secular nation on many accounts. In 2008, the Religion Monitor, an international survey carried out by the Bertelsmann Foundation, concluded that 28 per cent of Australians “see themselves as not at all religious, with religious practices and beliefs barely featuring in their lives”, although 25 per cent saw themselves as deeply religious. Of the 21 nations polled, Australia was ranked 17th in terms of their religiousness, well behind the US where over 60 per cent are deeply religious and only 11 per cent not religious. About 50 per cent of Australians considered religion the least important when compared to family, partners, work/career, leisure time and politics.

While the Coalition does have an influential faction of Christian conservatives (known as the Lyons Forum), it also has the John Stuart Mill society formed to counter the former’s influence. One has only to remember the Howard government’s attempt to crack down on adult X-rated videos. In line with the reality that an AGB McNair poll found that some 83 per cent of Australians believed that non-violent sexually explicit X-rated videos should be legally available, Cabinet in 1997 limited itself to introducing a new category for non-violent erotic videos which excluded some of the objectionable components of X-rated videos, while rejecting a proposal to ban R-rated material on pay TV.

What is likely to happen on key issues?

In regards to social welfare, both parties will continue to offer substantial resources, despite the possibility that future economic recession may lead to cutbacks rather than a reliance on greater debt.

Although there could be important differences between Labor and the Coalition concerning mutual obligation responsibilities and user-pay principles, Australian governments from both sides remain committed to fairness. The 2010 OECD Factbook indicates that Australia’s public social expenditure increased from 13.6 to 17.1 per cent of GDP between 1990 and 2005, even faster than the OECD average level which increased from 18.1 to 20.5 per cent. Australia also still has one of the highest minimum wages in the world by 2009.

And despite differences between Labor and the Coalition over how targeted social welfare benefits should be, both Labor and Coalition governments did adopt policies that helped Australia’s level of income inequality remain similar from the mid-1980s to mid-2000s, whereas it worsened in 19 of 24 OECD countries measured.

As Abbott is already finding out, equity issues even matter among his own colleagues. His policy offer to provide paid parental leave on a level of 50 per cent of wages (up to $150,000) for a period of six months will have to overcome resistance from the National Party who rightfully challenge the possibility that a woman in the city could be paid $75,000 when a part-time nurse in a regional area would only get $25,000.

Even in regards to industry assistance, both parties are unlikely to abandon the national interest. While the average effective rate of tariff assistance for manufacturing in Australia fell from 35 per cent in the late 1960s to under 5 per cent by 2004, the Productivity Commission indicates that total gross assistance for Australian industry (including tariff assistance, budgetary outlays and tax concessions) was still $17.5 billion in 2007-08, although $9.4 billion when tariff input assistance was removed.

Both ongoing assistance and lower tariff barriers uphold dual public expectations for freer trade and the need for some protection to Australian industry, an aspect which does not rule greater protection in the future if need be. Just as a June 1997 Morgan poll (Finding 2996) indicated 68 per cent support for protecting Australian industry at a time of extensive debate, so 2009 and 2010 Lowy Institute polls (Australia and the World) also found that an average 78 per cent since 2006 thought protecting Australian jobs was “very important”, despite most also believing that globalisation was good for Australia (79 per cent and 72 per cent in 2009 and 2008).

In terms of security issues, both major parties are likely to remain committed to the US alliance, including efforts to directly confront terrorism fears in Afghanistan. Already Gillard, in a 20-minute phone conversation with the US President on June 25, assured Obama of troop backing in Afghanistan. This is despite public opinion turning further against Afghanistan involvement with the deaths of Australian soldiers.

On asylum seekers, public opinion is likely to force a tough stance by both parties. As Abbott highlighted at his address to the Menzies Research Centre on May 4, 2010 concerning immigration, a recent March 2010 Morgan poll (Finding 4482) found that 64 per cent believed that asylum seekers arriving by boat “should be returned and apply through normal refugee channels”. With Abbott noting “that each unauthorised arrival at Christmas Island costs more than $80,000 to process” at a time when every developed country’s social security system is under pressure, Abbott states how the detainment and processing of asylum seekers at Nauru soon gave people smugglers and their customers “the message” with boat arrivals virtually ceasing.

In regards to immigration, Australia is likely to retain a high per capita intake by developed nation standards under either party.

However, as Abbott indicated at his address to the Menzies Research Centre, the Coalition has led the political debate at a time when the Treasury’s Intergenerational Report in 2010 predicted Australia’s population would rise from about 22 million to 35.9 million in 2050 if current trends in overseas migration and fertility continued. Abbott stated that “a large migrant intake would not be in Australia’s interests if our schools and hospitals are bursting, there is a severe housing shortage and our big cities are choking on their own traffic”. He has declared that a Coalition government would re-constitute the Productivity Commission as the Productivity and Sustainability Commission and task it with an annual independent review of Australia’s infrastructure needs for short, medium and long term projected population numbers.

Such sentiment by Abbott is in line with growing public concern. Already, with Australia’s economic growth slowing during 2009 and 2010, an April 2010 Morgan poll (Finding 4482) found that 81 per cent did not want Australia’s population above 35 million by 2040 (60 per cent actually wanted less than 30 million). A 2010 Australian Survey of Social Attitudes also found that about 70 per cent of Australians did not think that the country needed more people with the top concern that “we should train our own skilled people, rather than take them from other countries”.

And surprise, surprise. Regarding a “big Australia”, Gillard has now declared, “we need to stop, take a breath and develop policies for a sustainable Australia”, and “I support a population that our environment, our water, our soil, our roads and freeways, our busses, our trains and our services can sustain”. This was despite Rudd already backing away from his earlier comment that he favoured a “big Australia” in light of public opinion after immigration levels reached 300,000 last year.

Both parties, despite some differences, will also urge immigrants to learn English, Australian history and respect Australian values including the rule of law and the equality of men and women.

To conclude, while many voters may cite important differences about why they vote Labor or the Coaliton (or others), this article has suggested that it is often public debate which shapes policy direction on many issues. Hence, fears about a certain political party are often overstated as Australia’s pragmatic tradition means that both have to remain near the centre and seek incremental change in line with their different centre-left and centre-right perspectives over the degree of government intervention.

For myself, the Australian experience suggests that we have little to fear from a vote for Gillard or Abbott, although our votes will be determined by very different reasons.