A great big blob of ego speaks

That’s all I could see when in the middle of A Current Affair this evening, the head of Malcolm Turnbull appeared suddenly to deliver this somewhat nebulous message to the nation. It’s fascinating that Turnbull seems to already think himself the Prime Minister elect after less than a month in the job; as well as the right person to be lecturing the nation on the causes of the financial crisis the world finds itself in. Of course, true to form, he could not resist the opportunity to have a half-hearted jab at the government during his address:

Regrettably, Mr Rudd’s Government missed the warning signs at the beginning of the year and talked up inflation, and consequently interest rates, at precisely the wrong time.

Eh? Regrettably, it seems the Turnbull Opposition didn’t really have anything to say to the nation in this instance that necessitated a public address, apart perhaps from satisfying the Opposition Leader’s ego. Rudd’s address to the nation explained the stimulus package his government was introducing, and neglected to make any petty digs at his political opponents. Nor did the Prime Minister take the opportunity during his address to attack the Liberal Party for the inflationary snake’s nest it left behind when it left office last year. That’s called statesmanship, see. Someone should inform the Member for Wentworth that getting your mug on television in primetime does not in itself constitute statesmanship.

The Turnbull Opposition have already agreed to support the government’s stimulus package without amendment or suggesting any alternative measures. In other words, as is apparent if one reads the transcript of Turnbull’s address, this stance doesn’t really leave much for the Opposition to say to the nation. This leaves me thinking… has there ever been a televised address to the nation by an Australian politician with less substance or purpose than this one from Malcolm Bligh Turnbull?

Will Malcolm Turnbull be a stable leader of the Liberal Party?

As I have previously commented, I don’t think too many people are surprised that Malcolm Turnbull has succeeded Brendan Nelson as the leader of the Liberal Party. There has been no real indication throughout 2008 that Doctor Nelson was eventually going to cut through and threaten Kevin Rudd as a genuine alternative Prime Minister of this country. It is not so much that Brendan Nelson has a divisive personae for the Liberals, but rather just that he failed to threaten the government to a significant enough extent. There was little question that the Rudd Labor Government would secure a second term in office in 2010 if Nelson was left holding the reins.

The interesting thing about Malcolm Turnbull, of course, is that he does have a divisive personae for the Liberal Party. In a political sense he is well to the soft left of the vast majority of the Liberal parliamentary caucus, and one would imagine that he has little time for the agrarian socialism of the National Party. He came to the party late and reportedly only after being denied a position in the Senate for the Labor Party during the 1980’s. In this respect, there are no doubt quite a few members of the Liberal caucus who resent the fact that Turnbull has swept in from the wings to the leadership of the party without having to go through the day-to-day political grind that they had to endure.

It’s worth considering for a moment the results of the leadership spill vote. For starters, Turnbull only was victorious by a margin of 4; if three caucus members had decided to instead plump for Nelson, than Turnbull would have failed to secure the leadership again, and his immediate future prospects would have been reasonably assumed to be in tatters. Ironically, it appears that several conservative members of the caucus may have delivered the vote to Turnbull. Tony Abbott, Alex Hawke, Bronwyn Bishop and Louise Markus all voted for Turnbull; presumably not because they agreed with his political views or indeed particularly like him, but rather because they wanted someone who they thought would be a little more effective in the leadership role.

This is of course a very Howardian way of thinking. The substance of Malcolm Turnbull in a political or policy sense was not what has elevated him to the top job; what has elevated him to the top job is his charisma, eloquence and marketability. If Turnbull does a reasonable enough job of competing with the government and doesn’t try to be too progressive, this won’t be a problem for the Liberals. As it was with the Howard years from about 2000 onwards, if the electorate warm to Turnbull then the Liberal caucus will undoubtedly warm to him, even if they don’t actually agree with him. It’s the poll figures, not the policy, stupid.

Clearly the jury will be out for some time and Turnbull has a lot of convincing to do. While you have traditionally Liberal-affiliated groups like Australians for a Constitutional Monarchy sobbing into their English Breakfast tea, and leading conservative columnists like Miranda Devine still hopelessly longing for an utterly implausible return of the Liberal Party’s great woulda-coulda-shoulda ex-Treasurer, you just know that there will be a few more twists in the tale of this story yet.

A hard life for some

What has looked like the inevitable for the past nine months or so has finally now come to pass, with Malcolm Turnbull assuming the leadership of the Federal Liberal Party from Brendan Nelson, after a 45 – 41 party room vote. I think I will write some more about Turnbull a little later this week, but for now it’s probably worth reflecting on this opening salvo from the Member for Wentworth:

“I do not come to the position of leader of the Liberal Party from a lifetime of privilege,” he said at his first press conference.

“I know what it’s like to be very short of money. I know what it’s like to live in rented flats.

“I know what it’s like to grow up with a single parent with no support other than a devoted and loyal father.

“We know that this is a tough world and our job as Liberals is to ensure that our society is a fair one. A society of opportunity. A society where people can, like my father and I, be able to take advantage of those opportunities, to seize those opportunities and with enterprise and energy and good luck and hard work, do well.

“We are a party of opportunity and this, my friends, is a land of opportunity.”

The emphasis above is mine. Turnbull is clearly going to have to watch his millionaire mouth in check if he doesn’t want to swiftly alienate a lot of the voters he is trying to impress. To think the poor boy had to actually rent an flat! Oh,the tragedy! Oh, the humiliation! Oh, the frightening closeness to the everyday, normal reality for millions of people in Australia!

This is going to be interesting.

One last smirk for old time’s sake

Peter Costello’s memoirs were released today; it will be interesting indeed to see if Labor gets as much mileage out of them as the Coalition got out of The Latham Diaries. Naturally, being a continuously relapsing political junkie, I couldn’t resist the urge and picked up the book in Myer today at an extortionate price not far ($39.95) from the outrageous RRP of $55. I had to grit my teeth though. The nice lady who served me described Australia’s longest serving Treasurer as a “brilliant man” [cough, choke, splutter], although we did manage to agree that it would probably have been better for him and the party if he had kept his big mouth closed for the time being.

I would have to regard Peter Costello, when he was on form and not a smirking parody of himself, as one of the best political performers in parliament over the last decade. There have been innumerable occasions in recent years when I have been able to admire the man’s wit and have a chuckle without agreeing with the point of view he is expressing. On the other hand, I think there are a few aspects to his career in government that will not be regarded fondly by either his friends (if they are smart) or foes in the years to come.

Most crucially, although Costello presided as Treasurer over one of Australia’s most golden stretches of economic prosperity in living memory, recent events in global financial markets have served as a reminder that he was at worst, criminally negligent with respect to the championing of real economic reform, and at best, just plain lucky. The economists and political scientists among us will no doubt ponder over the next decade or two what opportunities to improve the economic situation of all Australians may have been squandered while the Howard Government focused on other things besides reform. Namely, milking every last drop of triumphalism out of the national economic situation, throwing tax cut bribes around glibly, and actually doing very little.

Costello, along with the man who is likely to bear the brunt of most of the dumpings in his book, must also take some share of direct personal responsibility for failing to facilitate an effective leadership transition while in government. Despite the recent election results in Western Australia, the Liberal Party still looks and smells like a car crash; what the Labor Party smells like in some states at the moment I will leave open to suggestion. Federally, however, the stench is primarily eminating from the opposition benches. Opposition Leader Brendan Nelson even announced today that he was taking the extraordinary step of instigating a leadership spill, evidently aimed at flushing out any leadership aspirants who don’t really have the numbers in caucus and rustling up some loyalty. Good luck with that one, Brendan.

I’ll aim to post an interesting short excerpt or two from Costello’s book over the coming weeks.

Brendan Nelson and the prisoners’ dilemma

I have not had the opportunity as yet to completely digest the draft Garnaut Report [PDF from SMH], although I have had time to be annoyed that the government feels comfortable basing decisions on predictions of the distant future when it seemingly does not have the ability to predict the demand for downloading a report from its website now. As I type the Garnaut Review website is completely out of commission and seemingly accepting no traffic. One wonders if the entire domain is being relocated to a different network or provider. Whatever is going on, it is a hardly acceptable level of service. People should not be prevented from viewing information disseminated by the government because it did not adequately predict demand for that information.

But on to more material matters. What I have read of the report so far certainly provides food for thought, and by the looks of things, there are quite insightful nuggets of wisdom embedded throughout. What I appreciate about Garnaut’s analysis is his intellectual pragmatism. I have little doubt that his blue-blooded contrarian streak questions whether the devastating potential consequences of climate change will come to fruition. I have little doubt that the imposition of government controls that could serve to damage the economy in the short-term run counter to his natural intuition. Despite all of this, like most of the rest of us who do not immerse themselves in the climate change science literature full-time, Garnaut knows that he has little recourse given the available evidence but to presume that the scientific mainstream is right, or in the very least, not far from. He therefore respects the need for potential short-term pain in order to reduce the likelihood of severe long-term pain. This is an entirely rational approach under the circumstances.This characterisation of the political problem facing the nations of the world from the draft report sums things up fairly well (pp. 12-13):

Effective international action is necessary if the risks of dangerous climate change are to be held to acceptable levels, but deeply problematic. International cooperation is essential for a solution to a global problem. However, such a solution requires the resolution of a genuine prisoners’ dilemma. Each country benefits from a national point of view if it does less of the mitigation itself, and others do more. If all countries act on this basis, without forethought and cooperation, there will be no resolution of the dilemma. We will all judge the outcome, in the fullness of time, to be insufficient and unsatisfactory.

Resolution of the international prisoner’s dilemma takes time—possibly more time than we have. The world has squandered the time that it did have in the 1990s to experiment with various approaches to mitigation.

Climate change is a diabolical policy problem. It is harder than any other issue of high importance that has come before our polity in living memory.

The prisoners’ dilemma, of course, is a well known logical problem that has important applications in mathematics, economics, computing and psychology. In raw economic terms, Australia would be best served in the short-term if all other nations on the planet cut emissions multilaterally, and we were allowed to continue emitting as much carbon as we pleased. Of course, this is not a tack that every nation can afford to take with respect to climate change. If all other nations decide to cut emissions only when the largest polluters except them cut emissions, the world will remain in a state of emission cut deadlock perpetually. This is a scenario that calls out for leaders; for a few select nations to put their hands up and show the rest of the world how it is done.

Brendan Nelson’s populist response to the draft report indicates that he either does not understand this point, does not really accept mainstream scientific opinion, or otherwise (most probably) has decided that there is more to gain politically from opposing any climate change policy that might involve short-term economic pain:

“It will be an act of environmental suicide, an act of economic suicide, if Australia were to be so far in front of the world implementing an ill-considered, not yet properly developed and tested emissions trading scheme if we haven’t got a genuinely global response,” he [Nelson] told journalists.

It would seem that the leader of the Opposition, cast as prisoner in the apocryphal dilemma, would rat on his fellow prisoner in an instant in a ruthless and foolish attempt to try and stay ahead of the pack. Given what we know about the mainstream climate science, Nelson seems to be risking a lot more than five years imprisonment by refusing to give an inch until some of the other nations of the world give a mile. This approach is a continuation of the willingly ignorant purposelessness that characterised the Howard Government’s approach to environmental issues, and I think that most people who give a fig about what is going to happen on this planet over the next few decades will see that.

Boilover for the Federal Opposition

Brendan Nelson obviously put a lot into his budget reply speech and from all reports it was delivered quite well. One of the headline proposals from the reply speech, the Opposition’s plan to cut fuel excise by 5c per litre, was and is on the daft side of sensible economic policy, but there was still quite a danger there for the Rudd Government that it would serve as a populist means for the Opposition to claw back some support. Unfortunately for Brendan Nelson in particular, it appears that any chance of that happening has now been firmly and suitably buried by his Shadow Treasurer, courtesy of a fairly grubby email scandal.

Malcolm Turnbull evidently does not personally support the proposed cuts to fuel excise, and a leaked email sent from the Member for Wentworth to Nelson’s office makes this clear in no uncertain terms. Nelson’s leadership has quite frankly now been critically undermined by his second in command on the frontline; I honestly think that he has no credible course of action besides sacking Turnbull from the front bench or in the very least issuing a very strong public reprimand. For Turnbull’s part, I think that this was a particularly ill-judged intervention that seems to be more about his own intellectual pride than anything else. He is of course correct about the excise cuts – the opportunity cost of embarking on the exercise is realistically quite high – but this is about the least appropriate means imaginable to make a point to his party and the media. I don’t think the time is yet ripe for a leadership spill, and neither do I think that Turnbull’s colleagues will judge him kindly after this latest unseemly boilover. Childish and clumsy incidents like these make one wonder whether politics is really the right game for the Shadow Treasurer to be playing.

Wayne Swan and Kevin Rudd must be blessing his cotton socks.

A tax loophole by any other name

I tend to agree with Jennifer Hewitt when she suggests that it says something about the Rudd Government’s first budget when perhaps the most publicly contentious issue is an increase in the level of tax on “ready-to-drink” pre-mixed alcoholic beverages – beverages the mainstream media have cutely termed “alcopops”. Brendan Nelson even took the time to target the initiative in his reply speech in parliament:

Labor is giving with one hand and taking back with the other – and not just through kneejerk measures, such as a new Tarago tax on cars or the $1 slug on responsible Australians who happen to enjoy a pre-mixed Bundy and Coke or Scotch and Dry.

According to the Government, the principal cause and the source of binge drinking is the so-called ‘alco-pops’ and pre-mixed drinks.

A whopping 70 per cent increase in excise, we have been told, would make significant inroads into binge drinking.

The evidence does not support the Government’s deception.

I am not sure that the government is being deceptive, but what is certainly true is that Federal Labor has not done itself any favours by selling the policy in the way that it has. The government’s own budget overview describes the policy as a “price signal” designed to target binge drinking. While this is no doubt one potential justification, I think realistically speaking we need to consider the two other obvious incentives the government had for proposing this tax increase:

1) Alcohol in ready to drink alcoholic beverages is taxed at a lower rate than alcohol in standard beverages. This represents a tax loophole in anybody’s language.

2) The fiscal environment that the government is operating in has no doubt made it a challenge to fund all its desired spending commitments whilst still attaining the desired level of surplus.

Needless to say the Opposition will be bolstered by the usual blinkered suspects who doggedly oppose any measure that will result in an increase in taxation. However, even if it is true that the evidence suggests that the increase will have no impact on “binge” behaviour, it remains true that a tax loophole is being closed. In a period when constraints on spending are called for and there is a strong incentive to have a sizable surplus, it is in unequivocal terms economically responsible for the government to seek to close any taxation loopholes that exist.

Some may not like it, but the current excise arrangements for “ready to drink” pre-mixed alcoholic beverages represent just such a loophole.

ELSEWHERE: Christian Kerr comes in a very juddering way to the same conclusion, but portrays it all as a piece of spin and a “cover up”. When the realpolitik here is so obvious I am not sure that his breathlessness is warranted.

How to state the obvious

Greg Sheridan certainly has a breakthrough piece of commentary in The Australian today:

Key Liberal powerbrokers who backed Brendan Nelson as Opposition Leader have switched their allegiance to Malcolm Turnbull.

The shift, combined with a general sense of despair at Dr Nelson’s recent performance, means a leadership spill is likely within months.

Actually, I think that probably happened in the first day or two after Nelson won the leadership. In other breaking news, I’ve just heard on the grapevine that the Howard Government lost the federal election.

Picking fights with Glenn Stevens

The Coalition are still in search for a strong position to take to the media and the electorate when it comes to matters of inflation and interest rates. To be honest they have it bloody difficult; the Rudd Government has all the running on this issue, given that the Howard Government can in some respects be judged politically culpable for the current situation. We have not quite reached the point from which the Coalition can implicate the government in the blame for future potential interest rate rises, and any attempts to do so would no doubt draw an immediate and likely quite convincing rebuttal from Messrs Rudd and Swan.

Opposition Leader Brendan Nelson’s latest approach seems to be to beat up on the RBA. He does not seem to be ready to question the economics of the bank’s recent decisions to raise interest rates, but rather to question whether the RBA is taking into consideration the stress being placed on those with home loans:

In an unprecedented swipe at the bank chief, Dr Nelson said he supported the independence of the Reserve, but added: “I don’t believe that independence should be incompatible with sensitivity to and caring for the people that are affected by (monetary) policies.”

I am not particularly convinced this is a wise line of argument to run with, although one can see it starting to resonate with the electorate should the interest rate hikes continue to come thick and fast over the next year or two. If it does resonate, of course, it will only be for somewhat dubious reasons. The reality of course is that the Reserve Bank board does not invite mortgagees with their tales of woe into meetings, and base their decisions on their lamentations. The board bases its decisions in relation to interest rates on what it thinks is most suitable for the national economy, given the prevailing conditions. The measures at the board’s disposal are simplistic and really quite blunt; it does not really have the instruments at hand to treat any wounds it may be inflicting on the faceless thousands with mortgages across the country. If such “treatment” is indeed deemed necessary, it can only be realistically be meted out by the elected government of the nation, not the unelected board of the national bank.

In short, if Nelson wants to speak out on behalf of those Australians who are suffering financial stress as a result of the state of the national economy, he should be encouraging the Rudd Government to do something about it, and not pestering Glenn Stevens.

Introducing the all new Australian Oxymoron Party (AOP)

As a member of the Labor Party I feel that to at least some small extent, I can empathise with the frustrations that supporters of the Coalition must be feeling at the moment. After the federal election defeats that hung like rancid albatrosses around Labor’s neck over the course of the last decade, just about everybody had an opinion about what was wrong with the party, and how it needed to be fixed. The majority of the criticisms of the party aired during this time were pretty well on the money, but perhaps only a small proportion of these would have served the purpose of making the federal party actually more likely to win elections. The somewhat antiquated party infrastructure that all the major parties in Australia continue to operate with can indeed be effectively criticised from top to bottom, but the average punter assumes as a given that a political party should have its house in order (roughly) by default. For the most part, they are not interested in the internal workings of the parties they vote for. They are more interested in what a vote for each of these parties respectively means for them, their friends and families, and their local communities.

Now the Coalition has only had one federal election loss in recent history of course, but they certainly have done a good job so far of making sure it proves to be a real doozy for them. The latest largely irrelevant tangent that the media have collapsed on in a frenzy is the prospect of a merger between the Liberal and National Parties. The cause? Another spectacularly ugly public backflip from Opposition Leader Brendan Nelson, who only yesterday voiced his support for a potential merger. But within twenty-four hours, he was declaring the idea “nonsense”. With stalwarts like Michelle Grattan now calling for Nelson to stand aside, surely the Opposition Leader needs to give some thoughtful consideration towards doing the right thing by his party and leaping on the nearest available upturned sword.

What has most amused me about this latest talk of mergers has been the attempts by members of Nelson’s front bench to explain what the Coalition stands for. Joe Hockey suggests that Australians want a “clearer, more identifiable” party to represent “liberal conservative” interests. The Chaser could not have expressed it better. I am not sure this somewhat circular argument against the merger from Christopher Pyne has really helped to clarify either:

“The National Party is a conservative party,” said the justice spokesman, Christopher Pyne. “The Liberal Party has always said that we are both liberals and conservatives. We hold both the strains of non-Labor thinking within our party, and merging the Nationals and the Liberals would not be merging two like parties.”

Well, at least Pyne’s first sentence makes sense.