Wednesday, May 1, 2013

The Prosaic Response

It's been a long time.

One year and one day since I last wrote something on this blog, about the state of the nation's politics. My last piece was a lengthy hand wringing about the thorough ineptness of the Prime Minister and her handling of the Craig Thompson affair, something that was dominating the news and my frontal lobes at the time.

I ended by describing Julia Gillard's standing in this way:

Her credibility is at an end, her popularity is non existent and it's difficult to see how Labor can keep going, with things as they are, without doing something.

At the time, I imagined she would not be Prime Minister for much longer.

So it's some tribute to our PM that a year later she is still in the job. A tribute not just to her determination and steely nerve, obvious to even her harshest critics, but also to her sheer bloody mindedness in still wanting the office that she holds after all that has happened.

For if I was mistaken in my assumption that Labor would change leaders, I was not mistaken in thinking that they would do something. It's just that, in the style of modern Labor, what they did over the last twelve months made absolutely no sense whatsover. My error was in thinking that they were capable of a course of action that would.

To summarise what has happened inside the ALP over the past twelves is a torturous exercise, so I'll keep it to dot points:

  • Gillard's primary leadership rival, Kevin Rudd, brought on a challenge that none of his supporters were ready for and which he lost comfortably.
  • Kevin Rudd's supporters brought on a challenge that their nominal leader, Kevin Rudd, was not ready for and that, in the end, he didn't even show up to. 
  • The resulting turmoil from two destructive, haphazard leadership challenges cost several senior ministers their positions, among them some of the Government's best performers, and caused the rest of the caucus to hide in the nearest cupboard.
  • The carnage of the first three points prevented the ALP from mounting any sort of concerted attack on Tony Abbott who was, after all, meant to be their common enemy.
  • The relentless awfulness of the first four points made the leader of the Labor Party about as popular as a relentlessly advertised internet gambling site, both inside and outside her party.
  • All of the points listed above served to simultaneously entrench Julia Gillard as Prime Minister, as no one else now wants the job, and diminish her prospects of victory in October.

Quite a list of achievements, for twelve months. It makes you wonder how the business of Government carried on at all, with all the members of the Parliamentary Labor Party spending their time putting thumb tacks on each other's chairs and spraying each other with 'Fart Gas'.

But sooner or later, however reluctantly, the ALP had to turn their hands to politickin'. 

The budget is due in less than two weeks and, in an election year, this assumes added importance, as it sets the agenda for everything that is to come. The budget serves as a road map for what the Government sees as policy priorities (and gives them one last chance to splash some money around) and, conversely, guides the Opposition into areas of criticism and opportunity. For a struggling Government, like the incumbent,  it also provides a chance to let a little sunshine in and spin a positive yarn around what they're about. 

But any die hard Labor types who were hoping for a little joy and optimism  from Budget 2013, probably had their eyes opened by the Prime Minister's speech to a think tank in Canberra on Monday. She could hardly have dampened the mood more if she had let fly with a big can of 'Fart Spray' across the room. 

Tuesday May 14 will be no old fashioned pre-election budget.

There is serious, persistant weakness in global growth.

Global weakness creates important economic pressures in Australia.

The amount of tax revenue the Government has collected so 
far this year is 7.5 billion dollars less than was forecast last October 
(and) this will increase to 12 billion dollars by he end of the financial year.

In other words; our financial forecasts were optimistic and, not only will we not have a truckload of money to spend on new stuff for the election, we don't even have the money that we already committed to spending last year. So expect no new goodies, and a fair delay on the ones you thought were already in the post.

And this spells serious trouble for the Government. For bringing in an austerity style budget in an election year is normally just a form of political suicide; as the elections of 1996 and 1983 demonstrate. 

Gillard doggedly plodded along through the rest of her nationally covered speech, gamely trying to cover some of this grim news up by recounting the fine position Australia finds itself in overall; low public debt, low unemployment,  high wages, good credit rating, high standard of living (although she struggled, as always, to explain how the general swell-ness of everything matched up to the bleakness she had mentioned in her previous sentence)

Gillard even tried to explain current fiscal demands with a new rhetorical tactic, in the form of a metaphorical anecdote (and by 'new' I don't mean just by her, this is probably a unique tangent in the history of public oratory).

Imagine a wage earner, John, employed in the same job throughout the last 20 years. For a period in 2003 to 2007 every year his employer gave him a sizeable bonus. He was grateful but in his bones knew it wouldn't last.

The bonuses did stop and John was told that his income would rise by around five per cent each year over the years to come. That's the basis for his financial plans.

Now, very late, John has been told he won't get those promised increases for the next few years – but his income will get back up after that to where he was promised it would be. What is John's rational reaction?

To respond to this temporary loss of income by selling his home and car, dropping his private health insurance, replacing every second evening meal with two-minute noodles. Of course not.

A rational response would be to make some responsible savings, to engage in some moderate borrowing, to get through to the time of higher income with his family and lifestyle intact and then to use the higher income to pay off the extra borrowing undertaken in the lean years.

Commenting in The Age, Michael Gordon highlighted the oddity of the Prime Minister's preferred option for handling a scenario like this; borrow money to maintain your lifestyle until your income started rising again? That way seems to have a good chance of spiraling out of control. I mean, what if your income never comes back up again? You know what happens then...

Most people I know would have a much more prosaic response to be being told their wages were going to be frozen for five years; they'd start looking for a new job. 

And for our Prime Minister, facing hostile press, polls and public, this should be a very worrying metaphor indeed.