Australia: a country in desperate need of a climate change policy

Before someone puts Tony Abbott out of our misery, the Liberal Party should take a long moment to think about climate change and what its next leader should do about it. It is a process it needs to complete by December because its government will be representing Australia at the time of the Paris Climate Change conference. That conference has the express goal of containing “climate disruption” within a two degree upper limit and the adoption of an international agreement to move the world towards a low-carbon economy by 2020. And Australia hasn’t the slightest hope of meeting any such commitment based on its current policies.

The working document for this conference is the Intergovernmental Panel on Climate Change’s 2014 Synthesis Report (or whatever will supersede it this year).The climate change science in this report is  telling us we are in bad shape. Each of the last three decades has been warmer than any decade since 1850. The last 30 years are likely to be the warmest 30 years of the last 1400 years. The upper ocean temperature is warming and ocean acidification has increased by a quarter in the industrial era. Arctic sea ice is decreasingly by 4% a decade and the sea level rose 0.2% in the 20th century. All this has resulted in large increases in carbon dioxide, methane and nitrous oxide, particularly in the last 40 years.

The future the report is predicting is of more rising sea levels, more greenhouse gases in the atmosphere and more extreme weather events including cyclones, droughts and floods across the world. This is a dire scenario and if inter-generational theft means anything at all, then surely this is it. What then, is the government of the day in Australia doing about it?

Well, It’s actually hard to tell it is doing anything at all about it. While it is unsurprising to note that Tony Abbott hasn’t mentioned climate change in a speech in over three months, it’s more surprising to note that a search of the Liberal Party policies page has no official policy on climate change. That is, unless you think scrapping the carbon price, removing government oversight mechanisms, building highways and tunnels, and supporting the coal industry amount to addressing climate disruption.

The closest thing the Liberals have to an official environment policy is a $2 billion green army aimed at as much as heritage and agriculture protection as the environment. The Green Army is a John Howard-style militia inspired by the motherhood vision for Australia where “individually and collectively, we can more often be our best selves” so they can “do the right things by those around them.” But this army lacks the artillery to deal with the bigger environmental problems especially in two industries Australia is vulnerable in: manufacturing and mining.

Then there’s “direct action”.  Seen by almost everyone outside the government as a hopelessly ineffective solution, it does not even merit its own policy page on the Liberal website.  There is blurb on the Emissions Reduction Fund (the centrepiece of the policy) on the environment department website but that is severely lacking in detail.  It’s reliance on big government intervention to meet targets is also stark contrast to the laissez-faire attitude the Coalition has to other areas of the economy. A market-based cap-and-trade approach seems a more logical approach but that would admit that it’s opposition to Labor policy for the last four years was wrong.

This extraordinary inaction to the world’s biggest problem can only be explained one way. This government has been captured by those who simply do not believe the climate change science. When the government repealed the carbon price legislation last July, Liberal Senator Ian McDonald said what many in his party room would agree with. “If there is global warming, notwithstanding that in Brisbane on Saturday morning we had the coldest day in 113 years – but I have always indicated,” McDonald said, “I have an open mind on this.”  What McDonald really meant is that he has a closed mind on this. Climate change is bunkum, he believes, or “crap” as his party leader once offered. Nationals MP Barnaby Joyce, who was instrumental in wrecking bi-partisan agreement on carbon pricing, takes a similar view.

Joyce doesn’t have a vote on who should be the next party leader but it is safe to say he will be active behind the scenes. He continues to be a fan of Tony Abbott because he knows Abbott will continue the ‘do nothing’ approach. But even Abbott’s one and only speech on climate change in the last three months admits that is no longer an option. On December 14, 2014, Abbott was dragged kicking and screaming into pledging $200m over four years to UN’s Green Climate Fund, despite it being what he called “socialism masquerading as environmentalism”.  Abbott did this not only because he was friendless on the issue but because he knows Paris is looming. In the same release Abbott admitted he needed a taskforce “to propose possible new post-2020 targets for Australia to take to the Paris Conference of the UNCCC in December 2015.”

That taskforce is yet to materialise leaving Australia no closer to effective action. “Direct Action” may or may not fluke its way to achieving Australia’s miserly 2020 target but is utterly useless beyond that.  Abbott and his supporters can doubt the science all they like, but the world is moving on anyway. Australia needs a climate change policy before December. This is the problem Malcolm Turnbull, Julie Bishop and anyone else who would be prime minister needs to grapple with urgently.

Closing the gap to 2030

Closing_the_Gap_2015_coverIt was the anthropologist Bill Stanner who described Australia’s attitude to its Indigenous people as a “great history of indifference”. Stanner was speaking in 1963, just after Aboriginal and Torres Straight Islanders (hereafter ATSI) got the vote.

That brought Indigenous people into the Australian story, a process accelerated by the 1967 referendum that ensured “Aboriginal” people (ATSI people) were counted in the census and that the Commonwealth would have a role to play. One of the instigators of the referendum, Faith Bandler who died yesterday aged 96, wasn’t Indigenous but her polyglot Melanesian-Scottish-Indian background was emblematic of a new Australia gradually looking beyond the coattails of empire for inspiration, and prepared to dig deep for the descendants of its original inhabitants.

The story of Australia over the last 50 years has been one of an attractive, open, vast and vibrant country with great wealth and freedom, attracting people from around the world. The conditions of ATSI people has greatly improved in that time but because they started from a low ebb, they remain adrift of the general population in most statistical markers. Their place on the census allowed economists to easily measure the state of the gap while Commonwealth involvement gave the problem a much needed national focus.

In March 2008, Kevin Rudd used his popularity as prime minister to coax his new Australian Government and its Opposition to sign the Close the Gap Statement of Intent. Rudd hosted the Indigenous Health Equality Summit which committed to closing the health equality gap between ATSI people and non-Indigenous Australians by 2030.

The rationale was a dichotomy revealed by the UN Human Development Index which ranked Australia third in the world off the back of its mining boom. The score ranked Australia highly on such matters as life expectancy, employment, health and other indicators. Yet the life expectancy of an ATSI person was 17 years less than the Australian average.

The gap was a stark reminder of a great divide in Australia across education, incoming, housing, mental health, chronic disease, child and maternal health, and access to health services. The gap led to an immense and unnecessary burden of suffering and grief for ATSI people which was a “scar on an unhealed past” and a “stain on the reputation of the nation”.

The impact is felt by the states as well. Victoria and Queensland got on board the Statement of Intent in 2008, WA in 2009, the ACT, NSW and SA in 2010. WA and NT have not yet signed up but the committee recognises that states have as big a role to play as Canberra. They spend the Commonwealth tax dollar on health and education.

But it is Commonwealth who takes the lead, producing the Closing the Gap report since 2008. In this issue as in many others Rudd overpromised and underdelivered yet there has been much progress in seven years. The improvement is hard to see because while Aboriginal health has improved, the health of the general community is also improving. Thus we are failing to “close the gap” fast enough.

Women are bearing the brunt of the problem. In the last five years, Indigenous life expectancy has gone up by 1.6 years for men but just 0.6 for women. Both sexes still die 10 years earlier than non-Indigenous people, so the good thing is the gap has narrowed by seven years since 2008 and is a reminder that closing the gap takes a lot of continuous effort and time. In New Zealand it took 20 years to improve Maori life expectancy by four years.

Prime Minister Gillard never had the same focus as Rudd on Indigenous Affairs. She guided a minority government through many controversial issues but ATSI legislation never floated to the top of her term. In her final closing the gap report in 2013 she claimed victory on access to remote pre-schools but admitted there was still a “massive and unacceptable” standard of living gap between Indigenous and non-Indigenous Australians.

Last year was the first Closing the Gap report of the post-Labor era. Like John Howard before him, Tony Abbott put great store in what he called “practical reconciliation” (ruling any talk of self-determination off the table.) Like in the Labor years, the report spoke of the “stark reality of health inequality” and called for measures to reduce smoking rates, improve maternal and children’s health and to make inroads into chronic disease.

This year is much the same. The committee wants greater focus on access to primary health care services to detect, treat and manage Indigenous health conditions. They have evidence to suggest Aboriginal Community Controlled Health Services gives the best bang for the contested government dollar, providing wide-scale and quality access to health services.

The committee supports the federal government’s priorities of education, employment and community safety. But they want the Closing the Gap strategy to have a “clearer connection” with the Indigenous Advancement Strategy. Education, employment and community safety lead to good health but good health is also important to driving education, employment and community safety. Health services is the bigger employer of Indigenous people so increased investment will lead to increase employment.

The year 2030 remains the target and by then we should see a further shrinking of difference. But “the gap” must remain a priority well beyond then. Indigenous injustices, shielded by settler indifference for 180 years, cannot be wiped away in the health service schemes of a single generation. There must be a continued commitment to the removal of the gap for ATSI people as populations. But integration or assimilation is not the complete answer. There must also be a commitment to support a “culture gap” so ATSI people remain as distinct peoples with their own culture and languages, regardless of their health and employment outcomes.

Scott Buchholz and Pauline Hanson: why Queensland politics matters to Canberra

Pauline Hanson chats with a voter in Gatton (photo by Amy Lyne).
Pauline Hanson chats with a voter in Gatton (photo by Amy Lyne).

TWO closely related events took place in the last two days, one in Australian federal politics and one in Queensland.

In federal politics the shenanigans (a lovely word meaning mischief that sounds as if it should be Irish and probably is via Tammany Hall) of #libspill week, ended with its first victim: chief whip Philip Ruddock. Canberra’s press gallery believes the father of the house was sacked because he miscalculated the size of the backbench rebellion in the party room.

The spill did not reveal who was ready to step into Tony Abbott’s shoes. The likeliest contenders Malcolm Turnbull and Julie Bishop kept their powder dry, but the 39 MPs voting for a spill of the leadership positions revealed a deeply wounded leader.

Abbott is a fighter and like the Black Knight will claim his troubles are just a flesh-wound and he has the wherewithal to continue to provide “adult government”. Ruddock was the most senior adult in that government, a moderate who successfully implemented John Howard’s anti-immigration policies to widespread electoral acclaim.

He was never close to Abbott and he was made a scapegoat yesterday losing his position to his deputy Scott Buchholz. Very few people outside of Canberra and a small part of south-east Queensland have heard of Buchholz, an amiable man, though not a deep political thinker.

I met him at Roma races and liked his bonhomie and charm. He is well connected as Barnaby Joyce’s chief of staff and a good businessman having who ran a transport company out of Toowoomba for 18 years.

He is also the federal member for Wright, a seat with a ridiculous shape (looking a bit like Iceland) that bolts together Beaudesert and the Gold Coast hinterland with the Lockyer Valley, with mountains dividing these dissimilar communities and no direct roads between them.

Its shape and scope is similar to the equally absurd Queensland seat of Lockyer, which almost played a big part in deciding the fate of the Queensland Government.

It took 13 days for Palaszczuk to form government and it took 12 days for Lockyer to be declared. Labor won the election and the LNP won Lockyer but if Pauline Hanson had got in, she would have been a thorn in both their sides. Labor would be delighted low profile incumbent LNP party outsider Ian Rickuss (who had a hate-hate relationship with Premier Campbell Newman, but will be more in with Springborg) held on, defeating Hanson by 114 votes on two-party preferences.

Hanson was just 59 votes away from getting a shot at the balance of power with independent Tony Wellington. I wanted Hanson to get in, if only to liven things up, but I would have been nervous to give her such a shot at power.

While the election was in play, the left-wing Hanson haters got their knickers in a twist in moral panic and castigated Lockyer voters for their “stupidity”. It was hypocrisy on a grand scale from people who believe Abbott supporters are always blaming the voters for bad polls. In Lockyer it was easy to see her appeal, and she grabbed votes from the left, the centre, and the right.

Hanson is a serial candidate and her near success in Lockyer, and wide approval, will encourage her to have another go. She told me she has signed up as a volunteer with a crisis care centre in Laidley. Her first shot at another campaign would have been the council elections of 2016 and a run at Lockyer Valley mayor.

There are three reasons why that won’t happen. Firstly, she said herself, she won’t run. Secondly, she is ineligible, living across the border in Scenic Rim council area. It didn’t matter in the state election, “where she put her head down of a night” as she put it (though it meant she couldn’t be one of the 59 votes needed to turn the election around) but she must live in the seat to run in the council election. Thirdly she ran with the blessing of Lockyer Valley mayor Steve Jones, a feisty old-style conservative linked to his cousin Alan Jones. Steve Jones hates the LNP and particularly detests Ian Rickuss. I’ve had my ups and downs with Steve Jones, but Hanson is unlikely to want to cross him if she can help it.

A more likely strategy is for Hanson to run for Wright in the next federal election in September 2016. She lives in Wright and can count on a good vote from the Lockyer Valley. Beaudesert and the coastal fringe will be a challenge but her rock star appeal in the electorate may get her over the line.

Labor preferenced her last in Lockyer and are likely to do so again in Wright. But 60% of Labor voters ignored the how to vote card and put Hanson ahead of Rickuss. Federal elections are not optional preferential like Queensland so voters have to vote all the way down the line.

Wright is held by Buchholz, a fierce supporter of Tony Abbott. Abbott was Howard’s point man who ensured Pauline Hanson’s arrest and imprisonment for electoral fraud, a case overturned in the Court of Appeal after Hanson served three months in prison.

Hanson hates Labor, but has good motivation to hate Tony Abbott more. This is why Abbott has shored up Buchholz’s position with a promotion. A minority government in the 2016 election with Hanson in Canberra would be as disastrous for Abbott (assuming he is still Prime Minister and not just a dead man governing) as it would be for Labor.

Power Failure: the tragedy of Australian climate politics

power failureThe book Power Failure about Australia’s intransigence on climate change was a personal mission for journalist Philip Chubb. Chubb and his family lived at Cottles Bridge near Melbourne and watched year after year as the summers got hotter. On Saturday, 7 February 2009 he stood in record-breaking heat with fire plan in hand hoping the blaze would not come over the hill and kill his family. They were lucky but Chubb’s closest friends died as they hid under the kitchen table, and he knew changes in the climate had fuelled the intensity of the fire.

The reaction to Black Saturday showed there was still divisions and fears, played up by News Corp columnist Miranda Devine who said it wasn’t climate change but habitat protection promoted by environmentalists that caused the fires. Devine said “Greenies” should be “hanging from lamp-posts” for their ideology which prevented “landowners from clearing vegetation to protect themselves.” Devine could have been dismissed as a lunatic outlier, but she carried a big megaphone her employers News Corp were willing to lend to anyone who muddied the waters on climate change science.

Prime Minister Kevin Rudd recognised climate change as a national emergency when he won the election in 2007. Many surveys showed seven out of ten people said climate change would impact their vote. Rudd spoke of great moral challenges and pledged to reorganise the national economy around new energy industries. He introduced an emission trading scheme and appointed Ross Garnaut to examine the economic impacts and recommend a framework. It seemed as though intelligent and non-partisan debate about climate change had become the norm.

The Australian Public Service Commission defined climate change in economic terms as a “wicked problem” – a pressing and complex issue involving many causes and much disagreement about possible solutions. Australia relies on fossil fuel with four out of five power stations running on coal, making the nation the world’s biggest per-capita greenhouse gas emitter. Private companies making money from fossil fuel also had a vested interest in climate policy failure over 25 years.

In 1990 the Bob Hawke government developed Australia’s first climate change policy aiming to stabilise emissions but not at the expense of the economy. In 1996 John Howard rolled back these modest goals refusing to ratify the Kyoto Protocol and overriding advice to bring in emissions trading in 2003. Howard’s position was repudiated by the electorate in 20007. Post Black Saturday Rudd had the opportunity to go on the front foot. Chubb’s book forensically examines how that unravelled over the four years that followed leaving Australia further adrift than ever on effective climate action.

Rudd’s character flaws are discussed in detail in Wayne Swan’s autobiography and his authoritarian leadership style led to dysfunction in many areas of government including climate change. Policy making was the preserve of Rudd, Swan and Penny Wong but with Swan absorbed in the financial crisis, Rudd and Wong were the only ones who fully understood Labor’s climate change policy. There was little or no inter-departmental or stakeholder consultation and most cabinet ministers were out of the loop. Power was concentrated in the Prime Minister’s Office.

Rudd and Wong also kept the voters uninformed as the policy took shape. Early enthusiasm for change dissipated in an information vacuum, robbing Labor of the threat of an early election to resolve political impasse. As the passion for action dulled, the Opposition hammered away to create doubt and weaken resolve while affected companies warned of loss of jobs and an investment freeze. The year dragged on in arguments over compensation to polluters, eventually agreed at $7.3 billion, a huge amount the companies still weren’t happy with.

As 2009 advanced, Rudd had a pressing need to use his phenomenal personal popularity to lock in public support for climate action, but he said nothing. Nor was he open about the impact of carbon pricing on the cost of living. Because the community had stopped hearing about the issue, they started questioning its importance and whether it was worth paying for. Rudd had squandered consensus. Between 2008 and 2010 Newspoll showed an 11% drop in belief in climate change and by 2011 the proportion of Australians opposing action with significant costs had doubled. The breaking of the drought in 2009 also contributed to change in public perception with many equating climate change with a lack of rain.

Having abandoned the public, Rudd put his trust in the parliamentary opposition and global action at the 2009 UN climate change conference in Copenhagen. He would lose both battles. Rudd’s parliamentary failure was entirely his own fault. He wanted to pass his legislation in the Senate with the help of Opposition leader Malcolm Turnbull. But he also played wedge politics against Turnbull and Liberal moderates which saw Opposition climate sceptics grab power in the party room. By then Rudd had alienated the Greens so there was no plan B.

The clumsily-named Carbon Pollution Reduction Scheme first hit the Senate in mid-2009 when Turnbull was still in charge. Turnbull said the legislation was hasty and pushed for delay. The Opposition voted against it but Turnbull was worried about fighting a climate change election so he promised to negotiate later in the year. By then Barnaby Joyce was openly calling the CPRS a ‘great big new tax on everything’ and said the Sunday roast would cost up to $150.

This scare campaign was inaccurate but devastating as the government had never conceded there would be any cost of living increases. Turnbull’s party room was openly grumbling about giving supporting the government on climate change. Tony Abbott told a September 2009 meeting in Beaufort, Victoria that climate change was “absolute crap”. The speech went down well with his older rural audience. Abbott would later say this was not his “considered opinion” but also admitted the meeting convinced him to act against the policy.

In November Penny Wong and Ian Macfarlane finally began negotiations on the CPRS. The resulting deal was good for the big polluters. The LNG industry got a top-up allocation of permits, the coal industry’s handout was doubled, there were more handouts to electricity generators, steelmakers and other manufacturers and the global recession buffer was extended to 2020. Turnbull was delighted with the result, but his party room was not. There was a spill on December 1 and Turnbull lost to Tony Abbott by one vote. Abbott immediately reneged on the deal and the climate consensus was finished.

Rudd’s office was delighted by the result thinking Abbott would shoot himself in the foot. But Abbott pushed hard on the simple message of the ‘great big new tax’ saying emissions could be reduced by other less costly means. Meanwhile Rudd’s hope of getting the Greens onside were destroyed by the Wong-Macfarlane compromise. The CPRS was defeated a second time in the Senate in December 2009 despite two Liberal senators crossing the floor.

Rudd went to Copenhagen undaunted, convinced by his ability to knock together world heads. The conference was chaotic to the point of anarchy with many different alliances and divisions. Rudd told delegates a grand bargain was within their grasp but no one was listening, and the conference ended without agreement. An emotionally drained Rudd blamed “Chinese fuckers” for trying to “ratfuck us” but it was Rudd that ended up “ratfucked” in 2010.

Abbott began his onslaught buoyed by the failure of the summit and the release of hacked emails of climate scientists that suggested the environmental threat was exaggerated. Unable to openly embrace the sceptics, Abbott developed “direct action” to reduce emissions. Rudd became paralysed by doubt at the prospect of a double dissolution election. He gave the impression he would call the election in January so many staffers cancelled holidays to work out a campaign. Rudd’s supporters later claimed Julia Gillard talked him out of that election though Gillard said it was Rudd’s idea.

By Australia Day Rudd had abandoned the idea and was instead promoting health reforms. In early 2010 UK climate sceptic Chris Monckton toured Australia, garnering public legitimacy through huge media coverage. Abbott met Monckton and later parroted some of his views. Rudd was nowhere to be seen. Instead he looked at an abatement plan suspiciously similar to Abbott’s direct action and just as useless in meeting targets. This “Abbott lite” plan gave him an excuse to indefinitely delay the CPRS. The decision was leaked to the media in April and Rudd publicly admitted it was pushed back to 2013 unless there was “credible action” in China, India and the US.

The impact was disastrous and immediate. The Coalition had their first lead in the polls in four years and Rudd’s personal approval rating dropped 15 points. The disaffection spread to the party room tired of a command and control leadership style that had little substance. By 24 June, he had vacated the leadership without a fight. Julia Gillard took the reins without explaining to the public the darkness at the heart of government leaving Rudd to successfully play a martyr role for the next three years.

Gillard’s immediate poll numbers were encouraging but it was a short honeymoon. On climate change Gillard pushed to restore consensus with a citizens’ assembly. The idea was ridiculed as “a giant focus group” and an excuse for inaction. Climate change did not feature much in the 2010 election. Abbott reiterated his doubt of climate science while Gillard publicly ruled out a carbon tax. The campaign was a disaster for Labor as Rudd leaks undermined any momentum. The election produced a hung parliament and a tug of war for the balance of power.

Labor signed a formal alliance with the Greens which was widely derided. Gillard felt it would provide momentum for negotiations with the other independents and have constitutional weight with the governor-general. The decision sparked outright war by the Murdoch media stable against the government, a war which would not cease until the 2013 election. Andrew Wilkie signed up with Labor leaving the decision of government with independents Rob Oakeshott and Tony Windsor. The former Nationals cared deeply about climate change and consulted with Garnaut and Nicholas Stern to work out their position. They agreed to go with Gillard demanding a re-examination of the carbon price, an updated Garnaut Review and a productivity commission study of international action on emissions reduction schemes.

Gillard appointed a Multi-Party Climate Change Commission (MPCCC) without Opposition support. The MPCCC made good progress and within six month came up with the framework for the Clean Energy Future package. In February 2011 The Australian revealed Gillard would introduce a carbon tax in 2012 and an ETS in 2015. Gillard and Bob Brown formally announced a fixed carbon price would begin on 1 July 2012. Gillard said Australia had to put a price on carbon early to manage inevitable change. Abbott called the carbon price a tax and said he would campaign constantly against it. That night Gillard went on ABC’s 7.30 where she could have described the new fixed price as a charge on the country’s biggest polluters. Instead she admitted she was happy to call her “market-based mechanism to price carbon” a tax. The damage was done, Gillard lost the next election there and then.

The Opposition went on the attack calling Gillard a liar. Gillard was stuck in a losing battle of semantics reflected in abysmal polls that never improved. The Opposition colluded in a public campaign of intimidation that bordered on violence. It legitimised scepticism in a scare campaign with five parts: unimaginable price rises, huge power bill rises, the destruction of coal, steel, cement, aluminium and motor industries, thousands of job losses, and the death of regional towns.

The media constantly called out the negative impacts of the carbon price. When Cate Blanchett advertised support of carbon pricing, she was lampooned in the press for a week as a “pampered star” and “Carbon Cate”. Despite the ferocity of the attacks, the government said nothing. Gillard was making the same mistake as Rudd: ignoring the voters while the details were being thrashed out. Gillard’s silence was deliberate, she didn’t want to antagonise support in the MPCCC but the effect was public disdain. Her approval rating plunged to 17%, equal with the worst rating of Paul Keating.

The government took heart in the electorate’s suspicions over Tony Abbott. What they could not deal with was the return of Kevin Rudd. Rudd’s backers asserted Labor could still win the next election with him at the helm. The Government introduced the Clean Energy Fund in June 2011 and Gillard successfully marshalled it through parliament. The carbon tax would be introduced a year later at the European price of $23 a tonne giving the electorate 12 months of “lived experience” of carbon pricing before the election. Labor also gave $10b over five years to a new Clean Energy Finance Corporation, a green investment bank idea borrowed from the UK.

Finally the government gave thought to the communication strategy. Its research said they should avoid explaining climate change or justifying carbon pricing. Instead they were going to immunise the public by paying them off. But when it came to the “lived experience” people could not easily determine if the effects were good or bad. Abbott’s claims that the world would fall in were entirely wrong but dissatisfaction remained at rising costs, with massive electricity price spikes due to rising network charges. Gillard’s hope for “clear air” to explain the package ran into a renewed Rudd leadership challenge.

The leaks and briefings escalated in 2013 and by June the destabilisation had made Gillard’s leadership untenable. But the collateral damage was intense and Rudd and Labor were swept from office in September 2013. The summer of 2012-2013 was the hottest on record but that was of no interest to the new government. Abbott moved quickly to axe the Climate Commission, abolish the Climate Change ministry and appoint a climate sceptic to review the Renewable Energy Target.  The victory of the sceptics, however temporary, has left the “wicked problem” of climate change as far from a solution as ever. Hopes for a consensus remain poor as long as the Abbott clique remains in power. As Chubb writes, Australia could long rue its power failures between 2008 and 2013.

Wayne Swan still in the ring for ‘The Good Fight’

swanAustralian male politicians like their violent metaphors especially when describing their own exploits. Tony Abbott’s autobiography Battlelines reflected his pugilism while one of his former opponents, former Labor deputy PM and Treasurer Wayne Swan, prefers to be remembered for “The Good Fight”. Swan was my local MP and as I started my journalism career I interviewed him before the 2007 election (an interview for which I remain extremely grateful – his LNP opponent turned me down). Swan batted away my questions with aplomb, but tougher questions were coming. Labor won that election, and Swan was installed Treasurer of a country about to sway in vicious global headwinds. His Good Fight was just beginning.

He begins the book in early January 2008 while on holidays at the Sunshine Coast with a recollection of a phone call from his American counterpart. US Treasury secretary Hank Paulson was worried by an economy buffeted by a sub-prime mortgage crisis that started in mid-2007. US housing prices were falling and the country was in recession. Paulson told Swan a recovery was possible but only if there wasn’t a “meltdown” in housing prices. Swan’s Treasury advice was that global risks were substantial but Australia was well placed to ride it out. His holiday reading of Alan Greenspan’s memoir combined with a biography of Australian depression-era treasurer EG Theodore brought the fear of another collapse home to him and made him realise the next few years would not be “an easy cruise”.

Though it started in 2007, the prospect of a financial crisis made little impact on the election that year. It never came up in my own interview with Swan and I was not alone – neither the media nor the Treasury saw it as a live issue. The priorities of the incoming Labor government were carbon pricing, water reform and federal financial relations. The massive overspending of the final years of the Howard Government had led to inflationary pressures and interest rates were on the rise thanks to China’s enormous appetite for Australian iron ore. Labor, keen to be seen as economically cautious, committed itself to a 1.5% budget surplus and its razor gang went in search of savings. By the time of its first budget, interest rates had risen to over 7% though the sub-prime crisis in America rumbled on. Swan had just returned from IMF meetings in Washington which predicted world losses of 1 trillion dollars. Swan was walking a tightrope between global turbulence and an overheated Australian economy, a paradox expressed in talking points as “countervailing forces”.

The budget promised $33b in savings but only $7b in the first year, which caused The Australian newspaper to complain it didn’t tackle inflationary pressures. But Swan’s American experiences meant he didn’t want to ‘slam the economy into a wall’. That wall was fast approaching and by August 2008 Swan was discussing the possibility of a recession with officials. Treasury boss Ken Henry told him if a stimulus was needed, it had to be 1% of GDP, about $10b. The June National Accounts showed just 0.3% of growth, not a recession, but very close. On September 7, US mortgage underwriters Freddie Mac and Fannie Mae had to be bailed out by Washington. Then a week later came the collapse of Lehman Brothers. A day later AIG also needed a Federal bailout. Immediately credit markets froze and investors ran for cover. Swan admitted it was terrifying news but publicly said Australian ‘fundamentals remained strong’. An extraordinary week ended with a US $700b financial rescue plan to mop up toxic assets.

The first Australian response was to buy $4b in mortgage-backed securities to keep the flow of credit and preserve mortgage competition. When US Congress voted down the rescue package, the Dow plunged 7%, the ASX went down 4% the following day. The RBA cut interest rates by a full 1% and Henry advised Rudd and Swan to ‘go early, go hard, go households’ on a stimulus especially with a slowdown on Chinese growth. The stimulus came in at $10.4b targeted at pensioners and low-income earners in time for Christmas. Half the surplus was gone in one hit and Swan’s staff prepared for an even bigger second package. The world was a different place from 2007. The G7 was recording negative growth and global stocks had lost half their value. Rock bottom had not yet been reached.

Swan was “rewarded” with growth of 0.1% which meant recession was technically avoided but the knock on effects of the global crisis were starting to hit. More policy levers were pulled. The government established the OzCar special purpose vehicle to provide liquidity to car dealer financers, brought forward transport projects, and people were encouraged to spend their Mark I stimulus bonus. Mark II would cost another $42b, 4% of GDP, including a $900 ‘consumption payment’ for individuals, the school Building the Education Revolution program and the insulation program for 2.7 million homes. The idea was that for every dollar providing immediate stimulus, another $2 would have future benefits.

With the Opposition’s wait and see approach against the package, the government negotiated with cross-benchers including Nick Xenophon who wanted a water buyback scheme. The December quarter had negative growth of 0.5% with the global economy expected to contact 1% in 2009 so the pressure was on for the next three months again to avoid recession. Swan’s second budget would be the victim of massive write-downs and unemployment around 0.5%. It project a deficit of $7b though as Swan called ‘a massive own goal’, he never mentioned the actual figure.

He was on safer ground when he said Labor protected Australia against the brutality of a global recession. His strategy worked – Australia recorded 0.4% growth in the March quarter and technical recession was avoided once more. With the worst of the GFC apparently over, there were calls to halt or decrease the stimulus. Swan held the line that growth was still weak and stimulus filled the gap. There was now a ‘two speed economy’ with coal and gas demand rising in 2009-2010 pushing the dollar up while other industries stagnated. GDP growth continued around 0.5% for 2009.

The story of slow recovery continues in the second half of Swan’s book. But it is overshadowed by growing political conflict between Kevin Rudd and Julia Gillard. Swan begins with the July 2009 backflip by Malcolm Turnbull on Opposition support for a carbon price. Rudd ordered ministers to negotiate with the Liberals on the Carbon Pollution Reduction Scheme but also told them to deliberately drag it out to extract maximum political advantage. It was a fatal miscalculation. Rudd dithered on forcing the double dissolution on carbon and pinned his hopes on a world climate agreement in Copenhagen in December 2009. His failure there sent him into meltdown, according to Swan.

By then Turnbull had been replaced by Tony Abbott who called the CPRS a ‘great big new tax’. Rudd went to Christmas without making a decision on 2010 strategy while Swan was tied up with the Henry Tax review recommendation to introduce a mining tax. In the New Year Rudd threw his energies into a federal takeover of the health system leaving Swan and Gillard to carry the messy CPRS and mining tax. In April Rudd announced the CPRS would be delayed three years.

May 2010 brought the fight over the mining tax. Swan said mining profits in 2008-2009 were $80b higher than 10 years earlier but the government was only collecting an additional $9b in revenue. Royalty and resource charges had reduced from 31% to 14%. The industry, the Opposition and Murdoch newspapers said the world would cave in if the tax was implemented and the scare campaign ramped up with slick advertising. Rudd’s stratospheric poll numbers collapsed exposing his weak support in the party room.

Swan said he was a reluctant starter on the idea of replacing Rudd with Gillard. “I could see Kevin was leading us into the wilderness,” he said, “but I was torn between the dread of that and the undoubted ugliness that would accompany his ousting”. Swan said Rudd was prone to vengeful behaviour and over-centralised leadership due to a “pathological fear of leaks”. He dragged meetings on for hours without making decisions and complex briefing papers went unread.  There was high staff turnover in his office.  A Labor mauling in a NSW state by-election was partially put down to federal issues and by mid June 2010 Gillard was ready to challenge.

Swan knew removing a popular first-term PM was dangerous but saw it as unavoidable. When the spill came, Rudd did not stand. Swan said this robbed the party of a frank debate in the party room. Swan said he felt sorry for a man he had worked with since their days in the Queensland Goss Government from 1989 and their families had been close for a decade with Rudd a godfather to Swan’s only son. But he was now deputy prime minister under Gillard.

They focussed on three problems: climate change, asylum seekers and the mining tax.  They hammered out a deal with the big mining companies that dropped the profits-based tax from 40 to 30% and applied to iron ore and coal only.  It cleared the way for a 21 August election. Rudd remained in the spotlight and his strategic leaks damaged Gillard who didn’t help her cause with her talk of ‘the real Julia’.   There was a sizeable swing against Labor in an election that ended in a draw. Swan narrowly retained his seat.

Suddenly the independents held the balance of power and after 17 long days and a $11b costing blunder by the Coalition, Windsor and Oakeshott gave the reins of power to Gillard. Swan thought minority government was suited to Gillard’s collegiate style but he later realised the uncertainty suited Rudd too.

While Australia was recovering, Europe remained in strife and Treasury was making plans for a second GFC. Swan had reduced government spending but revenue shortfalls were making return to budget surplus more difficult by the day. Swan’s budget revenues had declined by $160b in 2007.

Natural disasters like the Queensland floods and Cyclone Yasi were costly and the Japanese tsunami and the Auckland earthquake also suppressed demand. Though unemployment was down to 5.1%, the lowest in the industrial world, the budget fetish meant the media roasted Swan in December 2012 when he finally admitted Australia would not return to surplus in 2012-2013.

Kevin Rudd’s leadership ambitions emerged openly in 2012. He resigned as foreign minister in February over a perceived slight by Simon Crean. Gillard called a leadership ballot and beat Rudd 71-31. Rudd slid off to the backbench but immediately started plotting his return.

Labor pressed on with the NDIS and Gonski reforms, but their hopes of getting ‘clear air’ were destroyed by issues such as Speaker Peter Slipper’s and Labor MP Craig Thompson’s legal problems.  Rudd’s strategically-timed leaks also caused media disasters. On March 21 2013, Simon Crean engineered another leadership challenge, apparently promised the deputy PM position by Rudd. But Rudd didn’t take the bait forcing Crean to resign.

In Swan’s final budget he funded Gonski and the NDIS over ten years by closing corporate tax loopholes. With Gillard’s poll numbers never recovering from her broken promise on carbon taxing, Rudd was irrepressible. By June 2013 commentators were openly saying Gillard would not make it to the election. Gillard called a third spill on June 26 and lost 57-45. Swan resigned as deputy leader and treasurer. Rudd’s three year war of attrition had succeeded. But the cost was high. Though Australia’s economy had grown 14% since the GFC, Australians did not feel better off. Labor’s leadership turmoil added to the sense of disgruntlement. The trenchant criticisms of Rudd made by Swan and other senior leaders after the failed March coup would haunt Rudd in the election campaign which was one disaster after another. As Swan said, Rudd’s campaign was only “selfie deep”. By election day, many were predicting Labor would have been better off sticking with Gillard. Rudd lost comfortably to Tony Abbott.

Swan’s “good fight” went on to his own election in Lilley, which he won “against the odds”. It was one of Labor’s few success stories on the night. Swan said Rudd had a plan for getting rid of Gillard but not for ruling the country. Swan said his own political philosophy was ‘where do we stand?’ not ‘what’s in it for me?’  Whether Swan’s fighting instinct still has something in it for him remains to be seen. Though now in opposition and on the back bench, the call remains. “For me,” he concluded, “the good fight will never be over.”

Victorian bells toll for Federal Liberals

On this morning’s Insiders, Federal Trade Minister Andrew Robb explained why Victorian Liberal colleagues loss in yesterday’s state election had nothing to do with the Federal Government. Victoria’s problem was not a new one, he said, the Liberals were down in the polls by the same “flatline difference” for at least three years. Robb was correct in his assessment but left himself open for an obvious retort, which Barrie Cassidy pounced on. Wasn’t this what was happening in Canberra now, Cassidy asked. A flummoxed Robb asked what did he mean. Cassidy repeated Robb’s point the Abbott Government were also flatlining in the polls. Robb said that was different, they still had two years to improve their position.

Robb was granting his government the gift of the future, not granted to the Victorian Government. The Abbott Government is hopeless adrift and compromised by the raft of promises and resolutions it made in opposition it could not possibly fill in government, especially as its right-wing credentials started to be felt when it took office.

There are warnings for Abbott in Denis Napthine’s defeat overnight not least of which is that Australians will dismiss a first time government. It was the first time it happened in Victoria for 60 years but federally the electorate is volatile. Newly elected governments held on in their first elections in 1984, 1998 and 2010 but all were extremely tight and in all cases the incumbents had the preferred Prime Minister. This time round the Government is in freefall with an increasingly unpopular and hapless Prime Minister. Their management of the Senate independents is execrable and their few policy victories had to be shared with Clive Palmer. Tony Abbott’s area of strength was a strong leader in the wake of MH17 but he squandered that goodwill with his idiotic Putin shirtfront comment and then looked like a bumbling, irrelevant provincial fool at the G20 meeting.

The silly games he played to keep climate change off the agenda rebounded badly and he is unlikely to garner much credit even if they succeed in 2.1% world growth. The slogan “it’s the economy, stupid” is itself stupid and does not take into account confidence levels and perceptions of a shambolic leadership. Victoria’s economy was in good shape before this election as was Australia’s economy before the 2013 federal election. But Victoria was undone by the wrangling over Geoff Shaw and Labor was fatally debilitated by the Rudd/Gillard wars.

Federal Labor leader Bill Shorten has been castigated by the left as a ‘do nothing’ politician but he remains popular and could assist in the Victorian election campaign to help a similarly anodyne but effective leader Daniel Andrews. The Abbott brand was too toxic to be seen anywhere south of the Murray this last month or so.

Abbott once famously called himself a weather vane. He must be aware that heavy storms are coming especially as he charts a course for a second budget while still negotiating the tricky reefs of his first one. Treasurer Hockey has been a poor performer in but the people will blame Abbott not him. As Insiders pointed out this morning, Abbott’s Prime Minister’s Office is becoming as notorious as Kevin Rudd’s for its obsessiveness with the message and its failure to deliver. Whether that is a problem with the office or the man is a moot point, but it is looking like a doomed Prime Ministership.

Abbott will face his reckoning at the next election, if he is lucky, or more likely stabbed in back by his own colleagues next December as panicked parliamentarians look to someone else to save their skins. It will be, as Andrew Robb inadvertently pointed out today, already too late. The Liberal goose was cooked in early in 2014 and will stay uneaten and poisonous on the table until Labor feasts on its entrails in 2016.

Budget facepalmer

The medieval theatre of the set-piece nonsense of lock-ups, Treasurer speeches and Opposition replies are over and it’s down to the horsetrading to get the budget through. Until June 30, the balance of power in that unrepresentative swill of a Senate remains stubbornly with the Labor and Green alliance. The much vaunted elimination of the carbon and mining taxes still hasn’t happened and Labor and the Green can afford the budget similar treatment, by echoing the Abbottesque-howl of “broken promises” and reject every negotiation between now and the end of June.

After July 1 the numbers in the Senate will change. Labor-Green will lose the balance of power and the government can look to six of the 10 independents and minor party seats to get their budget – and their broader agenda – through. The inconsistently brilliant operator Clive Palmer oscillates between acting contemptuous – including finding parliamentary theatre so dull that it sends him to sleep – and then revealing his hand with his willingness to ditch carbon pricing as well as demand retrospective payments for previous carbon taxing expenditure.

Sitting alone in the green chamber, Palmer can hold the stage but it is in the Upper House where his strength will be revealed if three Palmer senators and his patsy Ricky Muir will dance to his tunes. This is what the current government is betting on as it launches its strange ‘war on everything’ budget where war is one of the few winners. Attacking normally supportive vested interest groups such as pensioners, large families and motorists is expensive political capital for the first year of government.

Fiscal prudence is a good thing, but to say Australia is living beyond its means is meaningless until we fully examine what those means are. Joe Hockey’s budget presumes a crisis but neither he nor Abbott can successfully say why this is so. Shorten exposed that with his facts and figures about what state Labor left the economy in September. Palmer went straight to the point and labels the emergency a fraud.

If say, the entire budget was put at the mercy of solving the problems of climate change, then a Prime Minister would have a good case to sell to the nation. Such a notion still lies far outside Australia’s political Overton Window, the view vigorously policed by a media more willing to ridicule than to assist, and a host of Murdoch apparatchiks wanting to impress the boss.

It is Murdoch’s flagship The Australian that wants to destroy the Greens at the ballot box. It is his journalists nitpicking Palmer’s career. It is his tabloids that built up Rudd to smash Gillard and then Abbott to smash Rudd. We should be destroying Murdoch at the ballot boxes and launching campaigns NOT to vote for whoever they are recommending. What’s good for Murdoch, is only good for Murdoch.

The man he anointed, Tony Abbott, is now a rabbit in the spotlight, agonising over his every word between a mess of ums and ahs. I heard him described last week as first postmodernist PM (surely that was Kevin Rudd?), someone who swaps ideologies and convictions at whim. It is hard to know what he believes apart from three word slogans and being a weathervane. It is hard to imagine what influence he has in a heavyweight party room full of masculine ideologues other than getting the occasional “captain’s pick”. Quaint cricketing analogies worked for John Howard because he loved cricket. Abbott sounds like a dill when he says it. And his “picks” like PPL, which on face value is a good thing, end up hated by the left as inferior to childcare and by the right as too expensive.

The deficit was the excuse, but making government smaller is an avowed aim of the Liberal Party. Apart from the innate belief private sector will do everything better (excepting police and defence forces) and the downsizing of pesky organisations partial to inconvenient truths, they also want to reach into Menzies’ playbook to create a nation of “lifters” not “leaners”, a variant on the similarly catchy “hand up” not “hand out” philosophy. Despite the 1950s language, this is no bad thing. In our most disadvantaged community, the Indigenous community, there are many voices saying that is precisely what they need. Noel Pearson and Marcia Langton are saying end the ‘sitdown money’ and instead give the communities the means to look after themselves.

This appeal to personal dignity, also works at the wider level where people who are not contributing to the economy should be encouraged to do so. The problem is Hockey leaves those on the bottom with no dignity at all. His approach, is all stick and not a skerrick of carrot. The leaners are not given anything to lift. The government knows that motivating people by taking away their allowances rarely works, which is why it won’t bring in many new income-related taxes. But while it understands that wealth creation by the well-to-do needs a bit of leeway, it does not offer the same privileges to the less well off.

No one can say how things will pan out when Palmer becomes kingmaker. The ultimate sanction of a double dissolution would likely only leave him in an even stronger position. The government may hope he is on their page as a former LNP member with similar economic outlooks. But as the actions of the similar disposed Tony Windsor and Rob Oakeshott showed, there can be much cantankerousness as well as honour and wisdom in independence. There will also be much bluffing to come. But Palmer is holding four aces and willing to gamble them to gain an even better hand.