Emerson’s got his work cut out

With Prime Minister Kevin Rudd in danger of being dubbed 'Media Stunt Kev' due to his obsessive releasing of pie-in-the-sky plans, it's encouraging that one of his ministers has his feet firmly on the ground and a clear vision of how things should be across Australia's business sectors.

The man in question is Craig Emerson, who, like Mr Rudd, holds a Queensland seat - Rankin - and also attended the Australian National University, where he gained a doctorate in economics; so he's academically better qualified than Mr Rudd.

His international qualifications also pip Mr Rudd's, since he's a former United Nations economic analyst.

And rather than merely being a boffin (Mr Rudd was that with former Queensland Labor premier, Wayne Goss) he was economic adviser to the minister for resources and energy and minister for finance, an assistant secretary of the Department of the Prime Minister and Cabinet, and economic and environmental adviser to former prime minister Bob Hawke before becoming director-general of the Queensland Department of Environment in 1990.

Dr Emerson is now minister for small business, independent contractors and the service economy.

It's most unlikely anyone in federal parliament is better qualified for that important portfolio.

Dr Emerson last month addressed the Sydney Institute, where he outlined the intellectual background to his hard-nosed and welcomed commitments.

State Scene urges readers to log on to that institute's website to gain a fuller insight into Dr Emerson's stance, its origins, and possible outcomes.

In the meantime, for those without time to read long speeches on computer screens, here's a few segments from that address.

Dr Emerson sees Rudd-led Labor as being under the sway of "market democrats", which he defines as those who "support opportunity for all in a market economy.

"They see the role of government not in fettering the market but in harnessing the power of the market for the public good,'' he said.

"Market democrats believe in expanding opportunity, not the welfare state, by providing an excellent education to all children.

"Market democrats are the champions of competition and compassion".

He then alludes to a now forgotten bitter and protracted ideological wrangle at Sydney University's economics department between leftists and rightists - Marxists versus free marketeers - during the 1970s.

At the time, State Scene was teaching in Monash University's economics department. I recall attempting to keep abreast of that brawl and thanking my lucky stars a similar imbroglio hadn't befallen Monash, which a few years earlier had a student body completely dominated by all forms of leftist activists.

It was Henry Kissinger, I think, who said of academic brawls: "The reason they're so bitter is because the stakes are so low".

Although there's an element of truth in that - campus ideological brawls are rarely, if ever, about big money - the emergence of Dr Emerson's likely impact upon Australia's business sectors certainly qualifies the Kissinger view.

Dr Emerson, who, like Mr Rudd, was raised a Catholic, began his address thus: "Bombarded by the strong convictions of Sydney University's left-wing political economy lecturers Ted Wheelwright and Frank Stillwell, and the equally strong convictions of right-wing orthodox economics professors Warren Hogan and Colin Simkin, I struggled with the motivation behind giving money to the church coffers during Mass."

However, after or during that personal struggle he came out on the Hogan-Simkin path, the one I'd backed from afar.

"As a 21 year old, I began to see the world as [the founder of economics, Adam] Smith had: that the most prosperous nations were those with open, competitive economies, whose individuals are motivated by self-interest - but that these societies were by no means free of injustice and disadvantage or moral corruption," he continued.

"It was not until I reached the age of 29 that I joined the Australian Labor Party, as a recently appointed economic adviser to [Western Australian] Senator Peter Walsh in the new Hawke government.

"Peter did not insist on party membership but on rigor in defence of a strong economy and the truly disadvantaged (as opposed to 'rent-seeking spivs', 'hairy-legged Stalinists' and anyone guilty of 'economic treachery').

"Some say competitive markets bring out the worst in us - greed and avarice.

"Oddly, they don't say the same about the Olympic Games, football or cricket, netball, music and dance competitions, all based on our most competitive instincts.

"As Bob Hawke used to advise me as a fresh recruit to his staff in 1986 when teaching me the intricacies of betting on horse racing: 'Son, in any race, back the horse called Self Interest, because you know it will be trying'.

"The Hawke Government began opening up the economy, dismantling the regulatory shackles that had been progressively applied over decades of mainly conservative governments.

"I came to understand that those Liberal-National Party governments were not champions of free enterprise but of private enterprise (although they quite liked the ideas of socialising private losses by bailing out insolvent businesses).

"The conservatives were keen regulators, protecting their private business supporters from competition at home and from abroad.

"Labor was making itself the party of competition and compassion.

"Out of the proceeds of growth, the Hawke government was lifting school completion rates, supporting the parents of poor children to keep them at school.

"My moral questions were being answered through the competitive yet compassionate philosophy of the Hawke and Keating Labor governments - a philosophy that sat easily with Adam Smith's Theory of Moral Sentiments and The Wealth of Nations.

"There was, I concluded, no inherent conflict between markets and morality."

It's worth recalling that ex-senator Peter Walsh played a key determining role in the Hawke government's crucial early years and that he had been similarly influenced in academe - by University of WA agricultural economist, Henry Schapper - showing again that the stakes in academe's arguments may be financially low, but can be crucially determining beyond the walls of ivory towers.

The Hawke government's economic policy reforms certainly demonstrate this.

Let's hope, therefore, Dr Emerson's role over coming years does likewise.

However, his Sydney Institute address reveals much more.

"Market democrats oppose the relentless expansion of the welfare state, where higher taxes are used to obtain revenue for recycling - often to the same people - in return for political support," Dr Emerson said.

"This was the hallmark of the previous Liberal-National Party government and, judging by the objections of the opposition leader, the shadow treasurer and the shadow minister for families to means-testing the baby bonus and family payments for stay-at-home mothers, remains a defining feature of the Coalition.

"The modern welfare state extends beyond recycling tax revenue; it is a state of ever-expanding government regulation.

"This regulatory welfare reinforces the culture of dependency, by discouraging people from taking responsibility for their own actions and their own lives.

"Regulatory welfare is inimical to a market democracy, since it discourages individual initiative and business risk taking."

Clearly Dr Emerson is a well-qualified minister, one with the same far-sighted commitments.

What worries State Scene is that Dr Emerson's ideals may not be fully realised.

There are lots of spoilers out there ready to do their damnedest to see things pan out differently; generally for the high dollar stakes Dr Kissinger undoubtedly had in mind.

For those who see that as a spoiling remark, read Peter Walsh's telling political biography, Confessions of a Failed Finance Minister, especially the sections when Labor's pork barrels and vote-buying were rolled out.

Best wishes, Dr Emerson.