27 June 2017
REFORM IN THE AGE OF POPULISM – THE NEW BATTLELINES
Wherever the Abbott government didn’t need to pass legislation through an intractable senate, decisions were made and decisions were put into practice: the boats were stopped; national security was strengthened; and a big project in limbo for decades, the Western Sydney airport, got underway.
Right now, for too many good people, there’s a pall of despondency over the future of our country and the wider world.
These are vexing times.
The world is less stable and the future less certain.
And yes, many people feel let down and ripped off.
As we have seen, in America, all parties are vulnerable to populists, and the Democratic Party to socialists; in Britain, the Conservatives have been humiliated and the Labor Party captured by extremists; and here the whole political spectrum seems to have moved to the left.
So what are sensible reformers to do: despair of the countries, the parties and the values that have made the modern world; retreat into surly resentment; blame voters for not understanding their own best interests? Of course not!
Our challenge is to stay the course, to keep the faith and to fight the good fight because to do anything else would only make a bad situation worse.
Effort doesn’t guarantee success but lack of effort guarantees failure.
We might have to take what we can get today; but we should always seek what we want tomorrow.
Because the fundamentals of government and economics have not changed; the values and aspirations of the conservative side of politics have not lost their appeal.
It makes sense to be economically liberal because markets maximise prosperity; and it makes sense to be socially conservative because respect for values and institutions that have stood the test of time keeps the social fabric strong.
It always has and it always will.
Our task, now, as always, is to build the case for good policy based on mainstream values and common sense: because the instincts and the ideas that imbued Menzies’ Forgotten People speech; that shaped John Howard’s public life; and that gave the Coalition a thumping victory just four years ago are never out of date.
Australians want a fair go for all – but we understand that to get a fair go, you’ve got to give one too.
Governments have to be fair – but there’s only so much fairness that you can pay for with other people’s money.
And standing up for the country, its interests and its values – not apologising for it – is what nearly all citizens expect of their leaders.
It’s as true today as it’s always been that no country has ever taxed its way to prosperity.
It’s people and businesses that create wealth, not governments.
And government can’t spend a dollar that it hasn’t taken from you, the citizen, either in taxes today, taxes tomorrow – or wealth eroded through the ravages of inflation.
Of course, people want their leaders to keep commitments and to be principled but most of all they want us to be competent and to get things done.
It’s not their fault that they’re disillusioned with leaders, parties and even systems when the people in charge don’t face their pressures, don’t seem to share their values and often hardly even seem to speak their language.
Once shaken, trust has to be re-earned by consistently saying what you mean and doing what you say.
But provided we try harder to understand people’s worries, propose down-to-earth measures that might actually address them, explain clearly what we want to do – and why – and then move competently and methodically to get things done, there’s no reason why reform should be beyond us, even in the age of populism.
So that’s our challenge: to identify problems and their potential solutions in ways that people can understand and eventually accept.
It can be done.
In two elections, 2010 and 2013, the Liberal National coalition made big gains promising spending cuts, tax cuts, and regulation cuts.
It wasn’t easy once in government – but in just two years two big new taxes were scrapped, three stalled free trade deals were finalised, about 300,000 new jobs were created in the economy while 14,000 public servants were shed, business handouts were stopped, and $50 billion was cut from the forward estimates.
As John Howard recently observed, while compromise is necessary in politics, conviction is the foundation of success.
The risk with compromises designed to end policy “wars” is that the war doesn’t actually end, the battleground just shifts; and in the meantime, principles have become negotiable, and the whole political spectrum has moved in the wrong direction.
What’s needed now is a clear sense of what the conservative side of politics stands for and a clear understanding in the community of what we’re trying to do.
Delivering prosperity and security: that’s the core business of government.
Making it easier for people to get ahead and doing everything reasonably possible to keep people safe: that’s what voters expect of us.
As a party room colleague put it the other day, people who-have-it-all worry about emissions; but people doing-it-tough worry much more about paying their bills.
That’s why any credible plan to win the next election has to start with keeping power prices down.
Among much else, the Finkel report noted that power bills could cost low income households up to a tenth of their income.
Power prices are going through the roof and widespread blackouts are looming this summer because green politics have trumped sensible economics for more than a decade.
It’s the renewable energy target that’s doing the damage because subsidised unreliable and intermittent power is making base load coal and gas power uneconomic.
Trying to fix the problems caused by too much wind and solar power with yet more wind and solar power is perverse; the last thing we need is a clean energy target grafted onto a renewable energy target.
For months now, quite rightly, the government has been attacking the Labor Party’s 50 per cent renewable energy target for de-industrialising South Australia.
But maintaining that Labor will put power prices up and that the Coalition will put power prices down will be much harder, though, if our renewable energy target goes from 23 per cent to 42 per cent, as flagged in Finkel.
Indeed, the only way to take the pressure off prices now is to have a moratorium on new windfarms at least until the problem of intermittency is addressed.
We should stop any further subsidised renewable power and freeze the Renewable Energy Target at the current level of about 15 per cent.
This shouldn’t be a problem for emissions reduction because renewables’ boosters insist that it’s cheaper than coal anyway.
And if this causes a fight in the senate, at least it will demonstrate exactly who wants lower power prices and who doesn’t.
Allowing Hazelwood to close, actually blowing-up South Australia’s Northern Power Station and the bans on gas in Victoria and NSW mean that some blackouts might be unavoidable in the near term.
That’s why a government that’s serious about keeping the lights on should get another big coal-fired power station into action as soon as possible; and be prepared to “go it alone” if political risk means the market won’t do it.
The market is the best possible means of maximising wealth but where government has ruined the market that we had 15 years ago, as it has, government must make things good.
A good start would be a “jobs first” power policy – a declaration that energy policy aims to reduce cost of living pressures, preserve jobs and keep industries competitive – and that these objectives have priority over reducing emissions.
All recent governments have deferred too much to political correctness (my own included) while the public have become impatient for robust common sense.
That’s what they remember from the early years of the Howard government: policies designed to solve problems coupled with explanations of what the policy was and why it might be expected to work.
In its early years, the Howard government deliberately reduced immigration to well under 100,000 a year.
Right now, a big slowdown in immigration would take the downward pressure off wages and the upward pressure off house prices.
One of the reasons why statistical growth is not translating into higher living standards is that high immigration means that GDP per head is hardly growing at all.
Newcomers in hard-to-fill, high wage, high skill jobs make very good migrants (and should be encouraged) but they’re not the only ones coming.
A big slowdown in immigration would allow housing starts and infrastructure to catch up with population.
It would give harder-to-assimilate recent migrants more time to integrate with the wider Australian community before many more came in.
It would reassure Australians that our country is in our own hands and is being run in our best interests.
It would complement the government’s correct insistence that to become a citizen you must be able to speak the national language.
And, of course, it would provoke a fierce fight with Labor – that, again, would just emphasise who’s on Australians’ side and who’s not.
That’s one of the lessons from the 2014 budget: even people who accept that the government is spending too much don’t want the government to improve its position by hurting theirs.
Addressing Europe’s economic stagnation, one leader recently observed that “we all know what to do, but we don’t know how to get elected after doing it”.
Absent an acute crisis, to get elected with an economic reform programme, it’s probably necessary to guarantee that existing beneficiaries will keep their benefits.
But even with grandfathered changes, a government that accepts we have a spending problem rather than a revenue one can make a big difference over time.
The best way to get federal spending under control, and to end the inter-generational theft of sustained deficits, is to avoid all new spending (other than on national security or economic infrastructure).
And getting spending down, at least as a percentage of GDP, is the only way responsibly to deliver the tax cuts that are necessary for jobs and growth.
Especially with the 2014 budget, the Abbott government probably exceeded the reform speed limit but there was never any confusion about the direction of travel.
Likewise on national security, there was never any doubt about the Abbott government’s determination to stand up for Australia.
We not only have a right but a duty to defend our values and our way of life against those who would destroy them.
This means banning organisations that make excuses for terrorists, removing terrorist propaganda from the internet, and ensuring that known jihadis aren’t free on our streets.
And it’s good that the Turnbull government is now moving on these issues.
But achieving reform in the age of populism will first require the “mother of all reforms”– indeed, it’s almost a precondition for any other big ones – and that’s reform of the senate.
The senate has become a house of rejection, not a house of review, as John Howard recognised when his government proposed senate reform back in 2003.
The problem is far worse now, with Labor habitually reversing its own previous positions in order to oppose the government on everything except national security.
To pass legislation, either the government has to strike a deal with the Greens, a far left party dedicated to higher spending and higher taxes; or it must corral ten of 12 unpredictable crossbenchers, all of whom will demand their price.
The only legislation that can expect swift passage is to spend more, to regulate more, and to put more tax on the so-called rich.
This is unlikely to change under business as usual, as getting four out of six senators in a half senate election requires a near impossible 58 per cent of the vote.
All that can readily be passed is legislation that a grab-bag of political competitors can be bought-off to support.
But this is a recipe for gridlock, not government, and it must end if Australia is to be capable of meeting the challenges of the future.
Back in 2003, the Howard government proposed an amendment to section 57 of the constitution so that legislation rejected twice in the senate three months apart could be put to a joint sitting of both houses of parliament without the need for a double dissolution election first.
It didn’t proceed after the then-government fluked four senators from Queensland and, for one term, had a majority in its own right.
Now, it needs to come back fast if the system is to avoid paralysis – hence the government should legislate swiftly for a referendum to be held concurrently with the next election.
The next election won’t be won by drawing closer to Labor.
Sure Bill Shorten can be painted as a union stooge who will put power prices through the roof, enshrine political correctness on steroids, and run the worst Labor government in our history.
But you don’t win elections by saying that the alternative would be worse; you win elections by being the best possible government.
The next election can only be won by drawing up new battlelines that give our people something to fight for; and the public something to hope for:
To take the pressure off cost of living, let’s stop subsidies for new wind power.
To take the pressure off housing, let’s scale back immigration.
To get the budget under control, let’s ban new spending.
To keep us safe, let’s make sure there are no known Jihadis loose on our streets.
And to get good government, not gridlock, let’s reform the senate as soon as we possibly can.
A decade back, after a generation of better-than-average government under Hawke and Howard, Australia was a global success story.
Now, we can’t even look across the Tasman without a twinge of acute embarrassment.
We have an abundance of energy – but the world’s highest power prices; an abundance of land – and property prices to rival Hong Kong’s; some of the world’s smartest people – yet with school rankings behind Kazakhstan.
We need to make Australia work again – because our country, plainly, is not working as it should.
We are letting ourselves down.
We are not what we should be; and we know it.
That’s why most of the attempted pep talks sound so hollow.
But I can assure you: I’m in no hurry to leave public life because we need strong liberal conservative voices now, more than ever.
I will do my best to be a standard bearer for the values and the policies that have made us strong.
(Emphasis added by Save Our Super)