17/12/2009 - 00:00

Decisive GFC response lifts government

17/12/2009 - 00:00


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THE old adage of governments being safe in good economic times might have to be turned on its head, with both Labor federally and Liberal-Nationals WA at state level looking very comfortable after winning elections in the boom and consolidating their posi

THE old adage of governments being safe in good economic times might have to be turned on its head, with both Labor federally and Liberal-Nationals WA at state level looking very comfortable after winning elections in the boom and consolidating their positions in the recent downturn.

For Prime Minister Kevin Rudd’s government, which won power in late 2007, the global financial crisis has so far proved a boon. Labor took advantage of the crisis to splash out about $50 billion, a significant amount in the form of cheques sent to low-income earners.

The troubled Liberal opposition has struggled to lay a glove on Mr Rudd all year, with former leader Malcolm Turnbull attempting to focus attention on the debt that such a cash splurge will create for the future.

Mr Turnbull, however, failed to gain traction on the subject and then shot himself in the foot by jumping on leaked emails that purportedly showed Mr Rudd was linked to a car dealer who received federal assistance via a government-supported financing package.

Those emails turned out to be fakes. Even worse, they came from a source closely linked to the opposition leader.

While the Rudd government received an early setback in its push to implement an emissions trading scheme, it set Mr Turnbull up with the threat of a double dissolution if the opposition blocked the scheme a second time.

Few could forget the drama of recent weeks, with the government agreeing to much of what the Turnbull-led opposition wanted only to find that the Liberals rolled their own leader, replacing him with Tony Abbott, whose policy was to block the ETS.

While that was a setback for Mr Rudd, who as a result lacked a resounding policy win to take to Copenhagen for the climate conference, it is the opposition that needs to do the convincing at this stage.

Mr Abbott unveiled a relatively stale front bench and has already had to hose down some of the most outlandish statements from his new team.

However, that is not to say the Rudd government doesn’t have weaknesses.

Before the ETS vote blew up Mr Turnbull, the Liberal leader was having unlikely success in taking the government to task over immigration. The return of boat people, including a long stand-off by a group of Sri Lankans who refused to leave an Australian rescue vessel, had all the hallmarks of the Tampa episode that focused attention on the issue during the government of John Howard.

Also, Deputy Prime Minister Julia Gillard had come under fire for the stimulus spending on education. The template-style requirements for school halls, libraries and laboratories ran out of control, looking wasteful as many schools admitted there were more important things for which money was required.

Whether or not Mr Abbott can resume the fight on these policies remains to be seen as Canberra debate winds down for Christmas.

Barnett bolstered

AT the state level, the GFC was an even more short-lived affair.

Apart from the closure of BHP Billiton’s Ravensthorpe nickel operation, much of the slowdown in mining went unnoticed by the wider community.

China showed it was still a long-term buyer by shifting its focus from purchasing raw commodities to the resources assets themselves. While this troubled the federal government via its foreign investment rules, Colin Barnett said ‘bring it on’.

Mr Barnett has earned kudos from the state’s biggest trading partner with his views. He made a triumphant visit to China and even managed to diplomatically pick his way through a damaging incident at the time – the detention of Rio Tinto’s main Shanghai-based iron ore negotiator, Stern Hu.

If Mr Rudd has managed to squeeze through some tricky situations then Mr Barnett must be made of Teflon – nothing has stuck.

The state opposition has attacked him on the budget and focused its attention on Treasurer Troy Buswell, sensing he may be the weak link in the government’s chain.

But Mr Barnett has shrugged off claims spending is too high and that the state will be in deficit, despite his promises not to allow that. The rapid economic turnaround in WA may just help him in that respect.

Mr Buswell has twice been caught out for wrongly claiming allowances, but the trivial nature of the mistakes has meant the political price was small – so far.

Against this, Mr Barnett has continued to roll-out big-picture policies that he hopes will anchor his premiership and maintain the alliance with the Nationals WA, which delivered him power and was strengthened with the defection of Vince Catania from Labor to the regional party.

The Mid West Oakajee project, the Ord River expansion, the James Price Point LNG project for Browse gas, and the Pilbara Cities vision have delivered a strong regional development feel that, despite the boom, his Labor predecessors failed to provide during their eight years in power.

In parallel, the private sector has kept the pace of massive development going. Chevron and its partners pressed the button of the $43 billion Gorgon project, Woodside opted to add to Pluto, and Rio Tinto resumed its expansion plans.

Back in Perth, Mr Barnett has taken a low-key approach to development, prioritising the relatively benign Northbridge Link project and opting for a ‘lite’ version of the Swan River foreshore proposal. Both are long-awaited projects.

Ably playing the cautious developer with big picture vision, the premier has managed to show he is on the side of change in divisive issues such as retail trading hours, without putting his leadership to the test. By comparison, he has made the Labor opposition look stodgy.

He also avoided aligning himself to either side of the daylight saving debate, which preceded the defeat of the proposal by referendum in May.

One recent event that drew attention to Mr Barnett’s way of working was the decision by Deidre Willmott to step down as his chief-of-staff to take on a lesser role.

Ms Willmott, who stepped aside due to a potential conflict of interest with her husband’s growing legal work, was an integral part of Mr Barnett’s tight-knit team, which controls the reins of government more tightly than any previous premiership.

Finding a replacement chief-of-staff will be a tough task, and an autonomous Mr Barnett will miss a trusted adviser at the helm.

The risk for Mr Barnett will be that, as Western Australians become more confident of the future, they will again find time to demand more of the things that the good times should deliver.

They’ll want their $1 billion sports stadium, they’ll find emergency waiting times unbearable again and they’ll wonder why education standards keep slipping. When you worry about your job, these things tend to slip from mind; when things are booming again, the government is expected to deliver.

Mr Rudd might be wise to note this as the national economy shrugs off the GFC and unemployment starts to fall.



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