It goes almost without saying that much of the ordinary economic commentary ahead of the election, whether in the Murdoch media, the Fairfax media and the ABC, as well as among the senior bureaucracy and the business community (including Reserve Bank governors), will proceed on the assumption that any money spent on subsidies, tax breaks and incentives to business will be thoroughly justified as investments in Australian growth and development. Likewise with subsidies to coal, gas and the hydrocarbon industry.
By contrast, any spending on personal health, hospitals, public health, primary, secondary and vocational education, and universities, will be regarded as an economic waste and a national self-indulgence. Likewise with the salaries and resource decisions about police, jails, social workers, quarantine systems, aged care, childcare and disability care. The RBA, for example, has never manifested any interest in how to calculate and measure the productivity of labour or capital in these public services, and assumes it to be nothing. This is as it hectors and lectures Australian workers for allegedly declining productivity and uses its made-up figures to determine inflation rates and monetary policy. It is so even as the Australian economy is changing, the population is ageing, and there is a growing service industry providing services such as healthcare, education and policing.
The political impact of questions about whether the nation was better or worse off after a term of Labor government depends on who is asking, and what. If asked at the macro-economic level, from data published by the Bureau of Statistics, or the department of finance, they might not seem interesting to the general population, even if it were to be assumed that figures were accurate. Nor, often, is there much to be gained by listening to the pronouncements of economists representing banks, or industries, or economists (mostly once from Treasury) who lobby for particular interests while providing strictly independent commentary at no charge to bodies such as the national broadcaster. Only a few commentators, such as Ross Gittins, could be said to have the public interest foremost in their minds.
Ronald Reagan is said to have pioneered the “am I better off” style of question. As a political weapon, it works on the individual or the family. It works more at the mood level than by careful checking of facts, with adjustments for the real value of money, inflation etc. It invites a visceral and emotional response and may best serve as a measure of optimism or mood. In recent years, for example, many people do not feel better off. Most have had few wage increases, and many feel (rightly) that wage increases have not kept up with inflation. They have noticed rising prices, particularly with groceries, fuel bills, water and electricity and, particularly, with interest rates on their housing loans. Some may have benefitted from rising housing prices (something they will not factor into their calculations, since that is God’s measure of their moral entitlement). But many who have little equity, and those who have none, suffer from such house price increases. Many have been sorely affected by rising rents, raised deposit levels and higher costs of loan servicing. These unfortunate, but necessary, incidents — the blunt edge of monetary policy — are endured mostly by the poorer half of the population. These, by definition, are less credit-worthy, and, as a result, must buy money at far stiffer prices than the well-heeled. When the RBA raises interest rates, they mean that fewer poor people should be given loans so that the available money can be restricted to people like themselves.
The government is acutely aware of the pain and suffering among those who have been battling over the past few decades, but are now finding it difficult to manage with increasingly limited resources. Many have had to run down their savings. Others have had to do without, sometimes without food. The complaints are loud, and personal: the damage is not abstract. Politicians have learned they must acknowledge the reality of the pain suffered, even if they think that these shakeouts are necessary for the economy.
Labor, and one could be fairly sure, Coalition politicians are in favour of targeted help to those in special need. There have been rent subsidies, and emergency relief services. Government has had any number of schemes to delay, defer, or subsidise energy bills. In many cases, indirect subsidies have prevented prices increases. Big businesses, including commercial banks (always high on the list of professional villains), are blamed for new charges, fresh rorts, and rising prices. The Opposition’s willingness to criticise the normally sacred business sector has been a product of Dutton’s effort to reposition his party as one for the conservative working class, not the big end of town.
One can see that Dutton is working on fertile ground, just as Trump did. But it’s not entirely one-way traffic. It has not been so long since voters observed a Coalition government in power at the federal level, and the would-be ministers of the next one (whenever that is) carry their records and reputations with them. With, sometimes, the extra baggage of any policy shifts or mishaps of opposition. Shadow Treasurer Taylor, for example, is a government target over his performance as a former energy minister, and, even as he attempts to create a critique of broken promises on power prices, must wear the blame for cost increases instituted by him, literally on election eve.
Chalmers must bear some Coalition criticism with all of the courage he can muster. But his image is not that of a profligate spender, and he has more budget surpluses to his credit than any of the Coalition team could ever claim. He has also been able to pay off a good deal of government debt, even if an end-up effect of the current figures suggests debt is creeping up again. Labor’s failure, mostly due to political timidity, to retrieve some of the unsupervised, badly conceived and poorly managed COVID grants, has deprived him of money from big businesses that would come in handy now. Finance, Treasury and the Prime Minister’s department were among those up to their necks in badly devised schemes, some of which blatantly violated financial transparency and accountability legislation. They were no hindrance to the blatant politicisation of grants schemes. You could not say that we won’t see such malfeasance with future governments or ever again, because reforms have been modest and insubstantial, designed to offend no one. A measure of this is that this Labor Government is now rorting the system much like ministers in the Morrison Government.
Albanese’s problems are obvious. But Dutton has not yet closed the deal with voters
Dutton oozes sympathy and concern for the common man and woman suffering from the cost of living. He has a fundamental understanding that this is all the government’s fault. But he has long been vague about what his government would do about it. Or how, for that matter, firm resolute action to impose tight spending controls would maintain the quantity and quality of services. The public is rightly cynical about his avoidance of detail. Pre-school and childcare subsidies, for example, reduce household costs, and allow people, particularly women, to increase their qualifications and incomes. Likewise with the reformed disability services bills, and those to aged care. The government has reduced some medical costs and is doing more to subsidise accommodation for those not owning their own homes. University debts have been reduced. So have power bills, even if they are higher than when Labor came into government.
I have little doubt that many will consider themselves worse off, with or without a reminder of things government has done. But Dutton will be conscious that some of the figures showing extra costs change from week to week. A cut in interest rates close to election day would, for example, dramatically improve the lives of many doing it hardest. And he must understand that his own credit and the Coalition’s own stocks of credibility are on the line too. Some will insist that the Coalition will always be meaner to the poor than Labor.
Others will say the punters should focus on whether they think the economy, and their personal situation will be better in three years under Labor than under Dutton. Given Albanese’s leadership and Labor’s record, that’s not a big ask of Dutton. But that his polling position is virtually unchanged over the term suggests that he has not yet closed the deal with most voters.
John Waterford AM, better known as Jack Waterford, is an Australian journalist and commentator.
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