The Abbott government’s first one hundred days

Tony Abbott's government has now held office for around a hundred days. As the early polls suggest, the public remains underwhelmed. Hardly surprising in the face of mess-ups like Gonski, missteps like Indonesia and disappointments (for some) like Grain Corp; also, contrary to pre-election wrath and righteous indignation, now an extended deficit license.

Perhaps the government will learn as it goes along. Perhaps contingencies and inexperience have all played a role. In a chest-thumping speech to the Business Council on 5th December, the prime minister sought to refurbish his reformist credentials. According to the Financial Review, 'Mr Abbott vowed to be a reformer in the mould of the Hawke and Howard governments.' He foreshadowed enquiries on competition policy, tax reform and Commonwealth-State duplication. This is in addition to the Commission of Audit and the appointment of a Business Advisory Council. He promised that these enquiries and consultations would provide the basis for his next election manifesto.

Then he explained his political strategy. According to the report of his speech: 'Mr Abbott emphasised that political reality meant that he first needed to seek a mandate for change at the next election before implementing it.'

That is one way of looking at political reality. Here is another. The political reality represented by the Hawke and Keating governments’ invovled a number of elements. First, a clear vision of where the country should be heading. As Paul Keating averred in his remarkable interviews with Kerry O’Brien:  'I had to make sure that this slothful, locked-up place finally became an open, competitive economy....an efficient, competitive, open, cosmopolitan republic, integrating itself with Asia.'   Tony Shepherd, the Chair of the Business Council of Australia and of the Commission of Audit has spoken forcefully of such a need. The Abbott government came to office on a string of populist slogans. So a vision of where we are heading remains to be articulated.

But the remarkable transformation, achieved in just on a decade by the Hawke and Keating governments, was also based on a second factor. This was fundamental to their political strategy and policy success. Every major measure which this government sponsored was supported by the then Liberal-National Opposition.  It is impossible to over-estimate the critical role that bipartisanship played in achieving rapid and radical regime transformation.

With the end of a sense of crisis (from 1993 or 1996), bipartisanship also ended. Contrast this earlier period with subsequent events. In the Howard years, Labor opposed both Telstra privatisation and the GST, both measures that it had earlier sponsored. John Howard also opposed and then - as public opinion shifted - supported a Carbon Tax. Indeed in  the face of community pressure and in the lead up to the 2007 election, he backtracked on a variety of issues   - including work choices, broadband, indigenous affairs, the Murray-darling and education funding. So much for his impact on public opinion over the preceding ten (largely populist) years.

From about 1996, the sense of economic crisis disappeared from elite levels of Australian politics and the normal play of the adversarial system resumed. But this was in a new context. Now Labour and the Liberal-National Coalition barely differed on basic economic strategy. So how to differentiate the parties for voters?

Remember the context: much tacit bipartisanship, but within an adversarial political system and with no unifying sense of national crisis. Where there is no fundamental ideological difference between the parties, this political incentive structure maximises the inducement to populist behaviour. And this is what we have seen. As Opposition Leader, Tony Abbott took this populist strategy to new heights. If he is now reaping some consequences, who else can he blame?  

The disjunction between the needs of policy making and the adversarial political incentive structure was further illustrated in the Howard years. John Howard took the GST to the 2001 election but won by the narrowest margin and lost the popular vote. What lessons might a leader take from that experience? Telstra privatisation was promised in the 1996 election but not finally delivered until 2005 after the expenditure of very considerable cash and much police capital. Moreover, as Saul Eslake has calculated, Howard's various re-elections were sweetened by the expenditure of $365 billion of windfall revenue gains - a sweetener from the resource sector that will not be available to the Abbott government.

Paul Keating had earlier illustrated the disjunction between bold policy ideas and the more elemental business of winning elections with his Republican and Indigenous Rights campaigns and his Asian vision. Public opinion was too little prepared. John Howard used all three issues to down the Keating government in a landslide.

If the above is a more or less accurate analysis of recent political experience, the outlook for reform - or indeed for the next Abbott government - must be judged precarious. There is a fundamental mismatch between the needs of policy making and the political incentive structure. The formal political system is now largely disconnected from its publics.

In this context, the 24 hour news cycle is an unavoidable fact. As the Abbot government is finding, this is a short-term trap which cannot easily be deflected. For reasons that have been many years in gestation, the system now lacks any deep links to those publics which must be brought to the table if bold action is to be politically achievable. Instant reactions now trump more reflective engagements. Until that is recognised as the fundamental barrier to reform, the Australian policy system will remain largely gridlocked. The present structure of politics is incapable of building the constituencies that, short of bipartisanship and/or a major crisis, any major reform effort requires.

PS. After the above was written, the government has taken indubitably bold action: it has seemingly willingly goaded General Motors into announcing its exit. Is this sound public policy? Whatever the answer, there has surely been insufficient public discussion of a very significant step. In this respect, Abbott has breached his own espoused statement of political strategy – cited earlier. Why? Is this a reflection of inter-governmental tensions? No doubt we will learn in coming weeks. But it is hard to imagine other than very difficult political consequences. Looking back over the past twenty years, Paul Keating (as Prime Minister between 1993 and 1996)  is the only leader who was similarly so careless of public opinion. His vision may have been admirable. But as noted above, in a democracy like Australia a viable political strategy must involve either bipartisanship or wide community support. Neither is evident here.

Another possibility is that we are about to see the resurrection of a new/old political fault line around economic strategy. The Deakin/Reid debates in the first decade of the twentieth century focused exactly of the issues that now seem set to re-emerge. Are we to be an advanced economy with high productivity, high skill, high wage jobs for a growing population? What is the role of government in this outcome? Reid championed the free market line and Deakin an active, if limited, state role. The Liberal party, formed in 1909, merged these two approaches basically along Deakinite lines. The precise measures Deakin championed are of course no longer viable – but the general idea that government has a continuing role to play has robust intellectual support. Innovation theory is a powerful buttress and ready to hand.  Is Labor about to inherit this Deakinite mantle? If this is so, the pattern of politics that emerged in Australia in 1983 may progressively be transcended. How this might unfold will turn on contingencies which we cannot now foresee.