04/09/2013 - 07:04

Labor has had its time

04/09/2013 - 07:04

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Australia needs a change of government after six years under Labor, but also needs Tony Abbott and his team to rise to the challenge.

Labor has had its time

Australia needs a change of government after six years under Labor, but also needs Tony Abbott and his team to rise to the challenge.

In last week’s editorial, I commented that the release of the coalition’s policy costings would be a critical test of its credibility.

I also commented that governments normally lose elections, rather than oppositions winning them.

As events transpired, the latter point was proven once again, because the defining moment in last week’s debate over costings was not the coalition’s initial statement, outlining $30 billion in savings.

It was Labor’s bungled critique, in particular its claim of a $10 billion hole, allegedly based on advice from the Treasury and Finance departments.

Labor’s credibility was shot to pieces when the heads of Treasury and Finance took the extraordinary step of issuing a statement, saying the government had erred in the way it used their advice.

But even without this intervention, Labor faced an uphill battle.

It has repeatedly delivered budget deficits, and repeatedly failed to achieve the budget surpluses it has promised the country.

The coalition, by contrast, ran a comparatively tight fiscal ship when it was in power, and that has defined how the community judges the political foes.

This build-up means that when Joe Hockey finally releases the full details of the coalition’s costings, due this week, the debate will already be over.

Beyond this critical issue of fiscal credibility, Labor faces an even bigger problem.

As the election campaign has worn on, Prime Minister Kevin Rudd’s overall credibility has fallen away with each surprising and unusual policy pronouncement.

Tax breaks for the Northern Territory, shifting a naval base from Sydney to Brisbane, expressing his concern about “open slather” foreign investment, and claiming to be an economic nationalist.

These sound like a series of disconnected thought bubbles from someone who doesn’t have a coherent policy agenda or set of beliefs.

They remind us of the bad old days between 2007 and 2010, when Mr Rudd proved to be one of the most chaotic and inconsistent prime ministers this country has seen.

Labor’s woes mean that informed discussion has already gone beyond the election itself; the really interesting question is what sort of government will emerge under Tony Abbott’s leadership.

Mr Abbott’s philosophy is often characterised as more akin to that of the Democratic Labour Party than the Liberal Party he leads.

He has stated that he “believes in markets but within a set of rules”. He says markets are important but “so are jobs and so is fairness”. In practice, that means “no-one gets left behind”.

These views are likely to be tested, as Mr Abbott debates policy with ministers like Mr Hockey who lean more towards a free-market, small government view of the world.

There will also be debate over how fast the coalition moves to return the budget to surplus.

Mr Hockey and his colleagues have been non-committal on this point during the campaign.

One of the few really significant policy reforms to which the coalition is committed is Mr Abbott’s ‘captain’s pick’ – the paid parental leave scheme, costing $5.5 billion a year and partially paid for by a new levy on large companies.

That looks like big government and higher taxes – not really what we expect from a coalition government inheriting a ‘fiscal crisis’.

 


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