Right now Labor is preoccupied with its defeat and is not the major obstacle to coalition survival.
When federal parliament resumes, the mockery coming to Labor from the government benches will seem to many opposition politicians far greater than they can bear. They really did have expectations, and a good many had already measured their offices in the executive wing. Now it’s back to impotence, and even the prospect of catching out some of Scott Morrison’s accident-prone ministers from time to time will simply not substitute for the routine pleasures of exercising power, or having a ministerial driver.
What’s worse, the more experienced will remember that for at least the first six to twelve months of the new term, Labor will be almost irrelevant. Irrelevant to the government, even if they are able to combine with the Greens and the crossbenchers to frustrate some coalition legislation in the senate. Even worse, irrelevant to much of the electorate, and not only because they were thrown out with the garbage (however narrowly) at the last election. That has almost necessarily meant new leadership, new policies, comprehensive inquests on where Labor failed to inspire or compete, reorganisation, and processes of debate about what to put to voters next time.
No prime minister who has triumphed, especially against expectations, can afford to be too smug. For Scott Morrison, the biggest immediate political challenge comes from within his own coalition, the more so during that post-election euphoria when ministers and members forget that in about February 2021, they will be back to panicking about the next election again. Labor let them off the hook last month. They may yet be silly enough to snatch defeat from the jaws of victory in 2022, but the coalition cannot rely on it. Most usually those who achieve miracles, and get returned against the odds find their accounting at the election after.
Morrison has an array of challenges, even if he has some time to contemplate how he will deal with them. First, it seems very likely that the economy is deteriorating, and that many of the hopes and expectations of the April Budget, including the promised budget surplus for 2019-20 will be hard to achieve. If some of the indicators of a weakening economy, and evidence of serious Reserve Bank concern are correct, this might, from Labor’s point of view, have been a good election to lose. An actual recession – the first in decades and the thing that Australia, alone of the G20 countries escaped in 2008 – may occur. Weakening demand, wage stagflation, housing sector slumps and falling corporate profits suggest reduced revenue.
Government can, and probably will, try to deal with some of the expenditure side of this by serious trimming of government spending. But government will also be under strong pressure to prime the pumps – which is to say put more cash into the economy — simply to stop the economy from slowing too much. It is obvious that monetary policy alone – further lowering interest rates (from their existing record low levels) will not be enough to stimulate steady if unspectacular growth, low unemployment, and particular hardship in some regions. Fiscal policy will need to be in step. That suggests that a return to surplus in the year ahead, or for some years after, is unlikely, and that, as with the future surpluses announced by Wayne Swan during the Rudd and Gillard years – so fiercely criticised by the coalition – the Frydenberg surpluses are mirages.
The government has been slow to acknowledge or deal with increasing nervousness at the Reserve Bank, in retailing and the housing market, and among financial institutions, and, for the moment is pretending that it has no reason to doubt its most recent Treasury projections.
The quality of these projections has been, in any event, under attack, in part because of accusations that Treasury is now highly politicised. Even if that is true, there is no advantage to government in concealing bad news after the election. Indeed among the criticism of Keating and others over the 1991 “recession we had to have” was of not only ignorantly applying the brakes too hard, but of failing to see, for an unconscionable period what the consequent effect on the economy (including the fabled 20 per cent interest rates) was.
We can expect howls of derisive laughter as well as orgies of confected indignation from the opposition if Frydenberg and Morrison are forced to revise their figures and if they appear less than the most competent managers of the economy. No doubt the opposition will be at least a bit restrained now that it accepts that the electorate narrowly rejected Labor’s economic medicine – particularly on the revenue side – and that, for all effective purposes, that policy is now inoperative.
As it turns out, what was said during the election campaign does not greatly constrain Morrison and Frydenberg, apart from embarrassment about the receding surplus, and the deferral of paying off debt. The coalition focused on the horrors of Labor’s plans, especially more taxes, and were vague about their own. But, assuming that they come to recognise that the purpose of government balance sheets is about balancing the general economy rather than satisfying ideological dogma about a need for public sector surpluses, they can respond to fresh events with fresh policies, and pretend a virtue, not to mention flexibility and agility and resilience, in doing so. Their political strategy will plainly involve trying to fix the blame on Labor and the Greens if they combine with the senate crossbench to frustrate notional tax cuts in the indefinite future. But those tax cuts will not, of themselves, at least on the existing timetable, be part of a government program to stimulate the economy now. Indeed, Labor is likely to be on the sidelines of debate about how, where and when stimulus measures occur. The real debate will be with spending ministers and the lobbies, not least those lobbies and interests to which the government, on its record, has proven most susceptible.
Morrison’s second challenge is to deal with perceptions and realities about the way some ministers – and sometimes the government as a whole – do business. A very unattractive picture has emerged from accounts of ministers exercising discretions intended to be used in the public interest in favour of cronies, mates and relations (including the shameful enabling of banking and financial sector rorts over recent years ). So too are allegations and innuendo about trade in water entitlements, tax evasion, and secretive attempts to pervert environmental legislation to exempt its operation on particular people. Likewise too with bizarre decisions to privatise the protection of the Great Barrier Reef by handing out money to a club of mostly mining executives, off-the-books decisions to spend more than $600 million for the War Memorial theme park industry, and an emerging and almost completely unaccountable industry of siphoning public money away by outsourcing policy and programs to businesses managed by folk with relationships to party figures. Add to this regular reports of colossal waste and mismanagement of contracts, frequently in the billions, by agencies such as the department of home affairs, the politicisation of the Australian Federal Police, and the stacking of important tribunals with friends and relations of the government and an image of government by cowboys and amateurs continues. This is an impression reinforced by a non-stop parade of ministers, members and (sometimes) officials who, seemingly, have no understanding of concepts of conflict of interest, or of the improprieties of advancing their own personal interests by use of their representative status. And it has been compounded by a modern political doctrine of prime ministers refusing ever to take a backward step, to admit error by self or colleagues, and, accordingly, turning written guidelines into satires.
Whether such matters are best addressed by powerful real corruption commissions, or by emasculated ones without power, of the sort under discussion in government, was argued during the election. But much more than political point-scoring is involved. The fact is that disregard for process, poor management, and improper exercise of power, sometimes for personal enrichment involves much more than peccadillo. It becomes a cancer in good administration, reflected in higher costs of government, and poorer reputation of its custodians, including internationally. Perceptions that the problem is getting worse are reflected in Australia’s slipping in international score-cards of integrity and transparency in government – something ultimately impacting on the costs of doing business. It makes administration less efficient and less effective. It is playing a substantial role in the declining respect accorded to traditional institutions.
Old checks and balances are no longer working properly, and some new ones are needed. Regulatory agencies have been castrated, and efforts to remake them have yet to restore potency. The AFP is compromised, and of dubious competence, seemingly immune from independent review of its management. Public relations pretences of an open government culture have been defeated by a climate of fear and loathing caused by leak inquiries, police raids on journalists, and relentless punishment of public service dissidents and whistle-blowers.
There are indications of compromised public service tendering processes, of over-eager bureaucracies seeming to do anything to achieve what the minister wants, even to prepare, in arrears, materials – even submissions – sanitising doubtful public policy, or measures designed to improperly benefit the government’s friends. Happening at a time when government – and departmental secretaries – have been consciously running down their policy and program expertise, instead outsourcing it to often-highly-conflicted consultants, or, generally to a private sector not subject to the scrutiny and accountability of the public sector.
Scott Morrison has never been one for critical review of matters in the past, unless, of course, the actions in question are those of his political enemies. He has a well-developed patter for bluster, obfuscation, prevarication and tergiversation when questions are asked, including the catch-all claim of saying it is in the Canberra bubble – by definition of no interest to ordinary God-fearing citizens. If one is to appeal to his sense of public spirit, or personal idealism, it must, it seems, be in a forward looking way, as a beacon for the future rather than as a reproach of the past.
One senses that Morrison would never take firm action on what have become systemic problems if he thought it would give some political comfort or advantage to the Labor opposition. He might, however be more concerned were he to view it as a management problem, or a problem which has emerged by way of consequence of new technology, or some event, perhaps the referendum on same-sex marriage. The point is that the realities and the perceptions are handicapping his government, and limiting its capacity to be effective. If he has been all too casual, until now, about its emergence, right now is just the right time to take some initiative about it.
The opposition is pre-occupied with its own affairs and its own leadership issues, as well as being consumed by the possibility of the defenestration of a prominent backroom boyo. From Morrison’s point of view, now is a time for doing some noble enduring things they would find it hard to diss him for, or to undermine.
Some of those on his own side who might be obstacles to serious reform — sections of the National Party for example – have diminished power and capacity to make mischief, if only because it is clear that Morrison’s electoral victory was almost a solo effort. Morrison now has an authority he once did not have. He has a reputation he once did not have. Invested in some clearly public good – of improving the quality and accountability of government, and, perhaps, draining the swamp – is rather more likely to be a lasting monument than the image of a daggy man in the footy crowd wearing an American cap.
Jack Waterford is a former Editor of The Canberra Times