Interest rates and election dates

In the lead-up to the November 2007 federal election, there is little doubting that interest rates played a crucial role on shaping the attitudes of voters towards the Howard Government. With Howard, the poisonous element was his controversial promise to keep interest rates low. With Rudd, the poisonous element is the rather prolonged rollout of his government’s stimulus package – particularly the “Building the Education Revolution” (BER) component. Although the government probably has its political hands full with a few other things just at the moment, it would be surprising if it didn’t have one eye on the inflation outlook when deciding precisely when to call this year’s election.

As a result of the continuing financial instability in Europe and the recent flight of investors away from the Australian dollar, the RBA Board decided to leave the cash rate as is at this morning’s meeting, bucking the recent trend (three consecutive 0.25% increases in the last three months):

In Australia, with the high level of the terms of trade expected to add to incomes and demand, output growth over the year ahead is likely to be about trend, even though the effects of earlier expansionary policy measures will be diminishing. Inflation appears likely to be in the upper half of the target zone over the next year.

Consistent with that outlook, and as a result of actions at previous meetings, interest rates to borrowers are around their average levels of the past decade, which is a significant adjustment from the very expansionary settings reached a year ago.

Despite the comment on inflation, it seems likely that with global financial instability still floating around in the short-term, the RBA is unlikely to be too adventurous on interest rates in the next few months. Could this be the carrot that Federal Labor decides to seize on and call a August election?

ELSEWHERE: Antony Green’s excellent analysis from January this year corroborates this thesis, suggesting that an August poll date is starting to look odds-on.

The boatpeople furphy re-emerges

In what appears to be a desperate attempt to gain some traction, the Opposition has elected to excavate Philip Ruddock from his here-to-fore dormant state on the backbench in order to remind everyone what a ring-a-ding job the Howard Government did on asylum seeker issues. Ruddock’s opinion piece in The Australian today is a blast from the past in tone, and I’m not sure that it can fairly be considered to be a remotely relevant blast. According to Ruddock, the Rudd Government’s actions on border security since November 2007 are “forcing people into the hands of people-smugglers”, and “a fundamental rethink” is required by the government in order to “bring this insidious people smuggling activity to an end.”

The Opposition seems desperately keen to contrast its own historical rhetoric on asylum seeker issues with the slightly softer, more humane approach being taken by the Rudd Government. Forgetting for a moment the rather ugly and sometimes disturbing human rights issues raised by the previous government’s mandatory and indefinite scheme of detention, the Opposition wants to remind us that they were “tough” on boatpeople when in government, and that Labor is “not so tough”. In concert with this mode of attack, every rickety boat that happens to depart Colombo or elsewhere on its way to Australia apparently represents a failure of Rudd Government policy in comparison with the Howard Government’s illustrious record.

It should be apparent to everyone that there is no single activity or series of activities that any government can implement to stop people-smugglers or asylum seekers from trying to come to Australia. It is unrealistic to expect governments to be able to stop people-smugglers from plying their trade altogether. Australia is, without doubt, a desirable destination for people seeking a new life beyond their own borders, particularly for those living in war or strife-torn countries. Regardless of the punitive or draconian penalties Australia might elect to impose upon people-smugglers or indeed the asylum seekers themselves, some will still try to make the journey. The complex causes that drive people to set off from their homelands on boats bound for illegal landing in Australia can not be explained away as being a function of Australian government policy – inconveniently for the Coalition. It is a fair bet that the vast majority of people smugglers do not peruse Australian immigration or asylum-seeker policy before taking money from folk eager to try and make the journey and launching their boats. In short, people-smugglers are unlikely to be cheered by Rudd Labor any more or any less than they were by the Howard Government over the last decade, and “insidious people smuggling activity” can no more be completely eradicated by the policies of the government of the day than any other social ill we might care to consider.

Finally, finally, finally, he calls it a day

So it’s done then. After nineteen months of near incessant speculation, Peter Costello has finally announced his intention to step down as the member for Higgins and resume his life as a private citizen. Personally, I am deeply relieved. No, not deeply relieved that a resurgent Coalition would surge to government some day in the future with the former Treasurer at its helm. Deeply relieved that the media can perhaps at this juncture resume talking about issues that really matter, and that this once important man can be allowed to move on with the rest of his life as an ordinary joe. For the good of all of us.

I am typically not the sort of person who gets all partisan when it comes time to eulogise a former politician. There is little doubting that Peter Costello will be remembered as one of our most historically significant Federal Treasurers. He was a great wit, and probably the best parliamentary performer of his generation. His achievements in relation to debt retirement during the first half of his reign are significant and should be remembered as such. His role in selling the GST to a notoriously sceptical Australian public was frankly worldbeating – when I think for a quiet moment about democracy in Australia and the nation’s attitude towards politicians, I can hardly believe that Howard and Costello pulled that election victory off. This sort of reform really does make one believe that people can accept difficult and distasteful reform if you do a good enough job of explaining the reasons why.

And now for the failures. As Treasurer, Costello and his brethren scattered hay all over the place instead of making it while the sun shone brightly during the course of the last five years. All across the country, people are literally screaming for better infrastructure and public services, and have been for some time. It has now reached the point where people are losing faith in the power of government to provide or even facilitate. The Howard Government’s performance on infrastructure and public services was inexplicably poor when one considers the good revenue times that it enjoyed for so many years. There was not nearly enough investment for the future while Peter Costello ruled the roost in Treasury. There were far too many handouts and politicised spending measures.

Peter Costello sadly also proved himself to be a failure as a leader. Under Howard, for the most part at least, he was a willing, loyal and able follower. Circumstances proved that he did not have what it takes to lead. He failed to force Howard’s hand in relation to the leadership during the last decade. He failed to scent the winds of change as Kevin Rudd emerged as Opposition Leader, even as his government was being strangled by its own foolish industrial relations crusade. And when it came to the crunch, and his party was finally willing to embrace him in a time of desperation, he turned them away. Kim Beazley was always unfairly lampooned as not having the ticker for the job, but in reality, he was infinitely more up for it than Howard’s golden boy.

As a politician, Peter Costello was always in John Howard’s sidecar, always looking on as the real hero of the conservatives lead the charge against Labor. Despite his numerous successes and indeed laudable achievements in public life, this is probably what he will always be remembered for.

Throwing in the towel weakly when the crown was his for the taking, just an enfeebled Robin for his crusading, calculating master.

Ideology is such a lonely word

Kevin Rudd’s 7700 word essay on the global financial crisis, published in this month’s edition of The Monthly, was a remarkable contribution to serious political debate by a sitting Prime Minister. What isn’t remarkable given its length and lack of humor is that it appears to have gone down like a lead balloon. Mentions of the essay in the media seem generally restricted to pointed criticisms of it from members of the Opposition or their sympathisers. A few journalists (such as The Australian‘s Matthew Franklin) have even had a go at “Julie Bishoping” the Prime Minister, on the somewhat flimsy pretense that 26 words of the essay’s 7700 words were almost identical to a passage that appeared in an recent Foreign Affairs article. Err… ouch [wet noodle limply falls to ground].

For the benefit of those who haven’t splashed out on the magazine, I am going to try and offer a hopefully more level-headed summary over the fold.

Continue reading

The Howard Years, Part One

The first installment of the ABC’s much awaited series The Howard Years screened this evening, and needless to say, I tuned in. The fairly relentless promotional material for the program promised that it would shed some light on the Howard Government years and offer up some real insights into the different personalities whose involvement shaped its progress. This first program focused squarely on the Coalition’s first term in office from 1996 to 1998, covering in particular the Port Arthur massacre and the government’s response to it, the government’s response to Wik, the emergence of Pauline Hanson, the Corrigans/MUA waterfront confrontation, and the introduction of the GST.

The show opened with a number of key political figures from the Howard era describing (or attempting to describe!) John Howard in a single word. “Tenacious” and “determined” seemed to pop up more than once, as did “conviction”. Bruce Baird got a bit excited and used three words, “a consummate politician”. Tony Abbott offered up “magnificent”, in an amazingly snivelling fashion. Peter Costello settled for “relentless”, albeit with some difficulty and obviously a lot of forethought. Indeed, the careful and methodical way in which he framed his contributions does make one think that he is trying to preserve his legacy for possible future use in the political sphere.

Setting aside Christopher Pearson’s noxiously pessimistic (and as it turns out, way off the mark) preview of the show in The Australian for a moment, I think the program did serve as a potent reminder of a few things. First off, the Prime Minister probably did not receive the credit he was due for acting on a tightening of gun laws following the Port Arthur massacre. As John Anderson pointedly mentioned on the program, even he at the time, owned what John Howard would consider an arsenal of weapons. There must have been a lot of pressure on Howard from the National Party not to act, and turning on his own constituencies in the way that he did took a certain degree of righteous political courage.

Secondly, it is increasingly looking as though Peter Costello is going to come out of the The Howard Years smelling of roses and with a golden halo hovering above his head. He has already, probably rightly to be fair, been credited with kickstarting the decision for the Liberal Party to preference One Nation last, behind Labor. John Howard neglected to offer his perspective on the exact circumstances regarding the decision to preference One Nation last, so I think we have to assume that had not yet decided to do so when Costello pre-empted him by announcing he would put One Nation last in his own seat of Higgins. Costello also took the opportunity to take a swing at Howard for failing to tackle the Pauline Hanson issue until seven months after her maiden speech, and for hijacking his launch of the GST.

Thirdly, the Howard Government’s treatment of the Corrigans/MUA waterfront affair does not appear any less ruthless or ideologically motivated a decade on. Peter Reith, whose contributions were featured quite liberally in the program, made light of the dispute and his role in it, and frankly came off looking flippant and more out of touch than he has ever appeared. I am not sure if the fact that he has been away from the Howard Government and his old mates for a while now has tempered his recollection of events, but he seemed to be quite pleased and amused with himself when recalling the dispute.

Finally, its remains quite stupefying that the Howard Government’s GST crusade was kicked off by the Prime Minister without explicit sanction from his Treasurer and Finance Minister. Presumably the policy process became a bit tighter as the years went on, but when a major initiative with far-reaching political implications is announced by a leader without endorsement by or extensive discussion with the senior members of their team, the government is sick. Perhaps to a greater extent than anybody really appreciated at the time, the Howard Government ran into the 1998 election campaign on pure political adrenalin: battered, bruised and off the rails. One wonders how history would have been different if the Coalition’s lack of control of its own trajectory was more evident to the public then.

ELSEWHERE:More over at Larvatus Prodeo and Public Opinion.

The Costello Memoirs

Some lessons learned after buying and taking the time to digest this book:

1) There are arguably literary reasons why few on the Liberal side of politics have had accounts of their time in the party published.

2) Never engage your stepfather to “ghost-write” your memoirs.

Although The Latham Diaries was a spiteful and often ill-considered piece of work in the context of the Labor Party, it was also very well written and a pleasure to read. The Costello Memoirs, I’m sorry to say, was not really a pleasure to read. I am not sure what Peter Costello was aiming to shed light on by publishing this book, but the tome that has emerged from the writing process is a banal and slightly confused historical summary of his experiences in the Howard Government. If you know a bit about politics and have followed the ebbs and flows of the Liberal Party’s political fortunes federally over the last decade, you may find that reading this book does little more than jog your memory.

Moreover, should you decide to read The Costello Memoirs, you may even find that it befuddles your memory rather than jogs it; its structure in some respects defies chronology. The book often takes on something of a rambling style, almost as if events are described in the book as they came to the minds of the authors, rather than where they reside in the chronological context of the story. This book seems made for episodic excerpting in the glossy magazines of the nation’s Sunday newspapers; as a singular tome, however, it comes across as shallow and choppy.

The opening chapter takes the reader to the night before last year’s federal election, setting the scene for the removal of the Howard Government from office. The next couple of chapters seek to describe Costello’s life growing up and his ascent (descent?) into the ranks of the Liberal Party and then onward to parliament. Chapter Three (focusing on the “Dollar Sweets” case) is a minor masterpiece of character assassination with respect to the union movement, somehow managing to completely ignore the good things that unions have done in this country whilst perpetuating all the Peter Reith-inspired stereotypes. The remaining majority of the book is purportedly focused on the Howard Government’s four terms in office, but chronologically speaking it is all over the shop. “Chronological” chapters are interspersed with “issues-based” (e.g. the Asian Financial Crisis and “leadership”) chapters throughout the book, with the result that, for example, Costello rambles on about Andrew Peacock’s up and downs in the Liberal Party in the 1980’s after describing the Howard Government’s third-term in office. Continuing in this ramshackle vein, the last chapter in the book takes a look at some of the “unfinished business” that the Howard Government left behind, and it is only in this chapter that Costello delves in detail into the republican debate and referendum of 1999.

In buying this book, I guess I was hoping for a few things. Specifically, I was hoping to learn a bit more about Peter Costello the man, how he really thinks about politics, and his candid views on the trials and tribulations of the Howard Government. Perhaps it is a function of the fact that Costello is still in parliament and all it is all too soon for this book, or he is just too much of a “gentleman”, but I am not sure that we are reading the real Peter Costello in The Costello Memoirs. It still feels as though we are reading an uber-polite, straitjacketed version of what the former Treasurer really wants to say about the Howard years, cloaked in cobwebbed triumphalism. It does make me wonder whether some part of Costello is still undecided about his future, and quietly hopeful that his colleagues will carry him on their shoulders to the front lines of battle again, as Opposition Leader.

If past experience is any guide of course, he will need to be carried on the shoulders of his colleagues into the fray; he certainly won’t be leading the charge.