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Government in a time of crisis

By Peter McMahon - posted Monday, 28 May 2007

Everyone knows that the coming federal election is an unusually important one. Australia has undergone dramatic change under the Coalition’s policies, and the poll will tell whether the electorate has seen enough and wants a change, or more of the same.

But this election will be important for another reason as well. It will elect the first government since World War II whose major concern will be managing a national and international crisis. The crisis this time is caused by the onset of global warming and oil depletion, two results of a century of increasingly global mass-industrial development.

The fast approaching enviro-resource crisis will utterly transform global conditions, and Australia is more vulnerable than most countries to its effects. Whether or not our governments get cracking and respond with a sense of urgency will largely determine how much hardship we must endure. With luck, it will be a transitory period after which things will settle down again, but if we get it wrong, it will be merely the start of very hard times indeed.


Australians have been shocked to find that climate change has suddenly presented us with a water shortage and the prospect of steep price increases in basic necessities. The national accounts, so long the report card of government, already reflect these changes as inflation and interest rates are affected. The economic effects have been somewhat disguised by the economic boom in China, but this can’t last and once it falters the true situation will emerge.

Australia faces real problems on almost every front. Our basic needs, food and water, are threatened by weather changes and our reliance on cheap oil. Our sprawling, massively capitalised cities face growing disruption as oil prices rise, and oil and gas become increasingly hard to get.

Our regional and rural areas face disaster as the transport infrastructure fails. The tourist industry, always vulnerable to shocks, will collapse. The insurance industry will put up premiums until it just gives up. Real estate values will get jittery as weather and rising sea levels take effect. Eventually all this will flow through to the finance sector and a heavily leveraged economy will start to totter.

Internationally the resource scarcity will generate new tensions as the US, Europe, Russia, China, Japan and India manoeuvre to control the declining resources and to also avoid the costs of climate change. Australia will be increasingly squeezed between the behemoths China and the US as the Pacific Rim destabilises.

The growing flood of environmental refugees as extreme weather and rising sea levels devastates places like Bangladesh and the Indonesian islands, if not handled by some globally negotiated program, will see Australia turn into an armed camp.

Whoever wins the next election will have to deal with these and other challenges as they begin to take shape. We pretty much already know what the coalition will do: align increasingly with the US and follow their lead on international matters; avoid doing anything to disrupt the economy, as they narrowly define it, until the last minute; promote big industrial solutions, like nuclear power, and rely on market-based approaches like carbon trading.


What Labor would do is more uncertain. Would Kevin Rudd opt for business as usual and attend to narrowly defined economic issues, as indicated by his ‘economic conservative’ claim? Or would he reconceptualise the crisis in terms of national development with lots of big projects to strengthen national infrastructure? If the latter, his balanced budgets promise will soon disappear as the economy weakens.

We should make no mistake about this: a Coalition government or economically conservative Labor government will be a disaster for Australia. They would put off responding to the crisis until it is too late, and the price for such inaction will be very high indeed.

The only rational response is a strong program aimed at dealing with the emergencies while also effecting longer term structural changes. At the same time on the international level Australia needs to promote collective security through openly negotiated programs.

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About the Author

Dr Peter McMahon has worked in a number of jobs including in politics at local, state and federal level. He has also taught Australian studies, politics and political economy at university level, and until recently he taught sustainable development at Murdoch University. He has been published in various newspapers, journals and magazines in Australia and has written a short history of economic development and sustainability in Western Australia. His book Global Control: Information Technology and Globalisation was published in the UK in 2002. He is now an independent researcher and writer on issues related to global change.

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