It would appear that many in the Labor party attribute the remarkable implosion of Kevin Rudd’s brief prime ministership to his inability to communicate the government’s policies. Along with shooting the messenger, perhaps the government ought to reconsider the substance of the messages.
The Rudd government, admittedly faced with some challenges, has been the most profligate and least competent of the past 35 years, presiding over a series of massively expensive and abysmally executed programs.
Rudd might claim credit for insulating the economy from the global financial crisis, but he inherited arguably the strongest fiscal position of any developed economy and the most robust banking system in the globe – and then went on a wasteful splurge, which still continues even as the Reserve Bank tightens monetary policy, that dissipated that fiscal strength.
To pay for its wastefulness, the government – well, Kevin Rudd and, perhaps, his kitchen cabinet – came up will the appallingly designed resource super profits tax, which is really just a smash and grab raid on the mining industry that threatens to reduce its long-term potential to generate investment, jobs and export revenues.
No matter how good the salesman, the hopelessly compromised emissions trading scheme, the disastrous home insulation scheme, the out-of-control ‘Building the Education Revolution’ program, the $43 billion commitment to a national broadband network without any analysis and the RSPT are unsaleable.
The autocratic nature of the Rudd prime ministership (has there ever been such a dictatorial prime minister in this country?) and the abandonment of any guiding values other than perceived political advantage and the intimidation of any dissent has been a major contributing factor in the quality of policy and ultimately in the consigning of Rudd to history.
Julia Gillard has an opportunity, if she understands that Labor’s problems aren’t simply disillusionment with Rudd or his inability to communicate, to restore normal governance and policy formation. Senior ministers shouldn’t be ambushed by radical changes to policy in their portfolios, as Peter Garrett and Martin Ferguson have been.
Major new industry and economy-reshaping policies like the NBN or the RSPT shouldn’t be announced without exhaustive analysis and consultation with, not just cabinet and caucus, but the industries concerned.
There will be a temptation for Gillard to try to defuse the disastrous RSPT debate by continuing with the wedge tactics Rudd had embraced, trying to divide the smaller miners from the big resource groups most affected by the inherent retrospectivity of the tax.
That’s a political strategy, not good policy. Proper policy formation, and the best interests of the nation, would dictate a fundamental ground-up review of the best and least destructive approach to taxing mining projects.
Gillard could put the RSPT debate on the back-burner by starting again with proper consultation and deal with the political implications by simply pushing back the return to surplus by a year or two.
She could and should, but almost certainly won’t, reconsider the NBN and commission a proper cost-benefit analysis of a project that, worthy or not, could weigh on taxpayers for decades.
She needs to develop a measured pathway towards the introduction of a price for carbon to provide some certainty for industry.
Most importantly, she needs to recognise that whatever the broad merits or otherwise of the major policies introduced and announced by Kevin Rudd, the autocratic fashion in which his government functioned led to very poor process and implementation, an extraordinary waste of taxpayer funds and a significant loss of faith in the quality of government and the stability of Australia’s investment climate.
The messenger has been shot but the messages remain unpalatable. Her challenge is not communication, which she is very effective at, but dramatically improving the substance of what she is communicating.
This article first appeared on Business Spectator.
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