Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.


 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate

Subscribe!
Subscribe





On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.
___________

Syndicate
RSS/XML


RSS 2.0

Spunout by spin - where Rudd went wrong

By Leon Bertrand - posted Friday, 25 June 2010


I have been a strong critic of Kevin Rudd for more than two years now, complaining about his focus on spin over substance, talk over action and gimmicks over real reform, among other things. In October last year I wrote that:

It could be that like the Carr government in New South Wales, federal Labor will keep getting re-elected while the lack of real policies only later become devastatingly clear after some years.

That prediction would appear to have been wrong. Since then, Kevin Rudd’s popularity has plummeted. Last year, a Labor victory at the next federal election seemed assured. Now Rudd has been rolled by his own party before the election.

Advertisement

The fall

The fall from grace has been dramatic. In the space of a few months, Rudd went from the most popular Prime Minister in Newspoll history to an outright liability to Labor’s chances at re-election. Rudd the hero became Rudd the zero.

Were there any warning signs that this would happen? Yes and no. about six months ago I recall reading that Rudd was viewed as “superficial” in focus groups after failing to deliver on his commitment to fix the health system or organise a hospital takeover. But the polls were still sky high for Rudd, so it appeared as though the Australian people were once again giving him a free pass. Even Tony Abbott’s feisty performance in the health debate did little to lower the Prime Minister in the eyes of voters.

Since then, there was the insulation fiasco, which resulted in Rudd’s Beattie-style “mea culpa”, as well as the Building Education Revolution rip-offs, an issue which is yet to be fully dealt with. Both of these issues have led to voters questioning the government’s competence.

But the event which seemed to crystallise doubts about Rudd was the backdown on an emissions trading scheme. Rather than negotiate with the Greens or call a double dissolution over what Rudd described as “the greatest moral issue of our time”, the Prime Minister instead quietly put action on climate change in the too hard basket.

To me, it wasn’t the backdown itself but the context in which it occurred that really damaged Rudd. Voters truly upset by the backdown would tend to support the Greens, resulting in no change to the two-party preferred vote. Rather, the ETS about-face arguably exposed Rudd as a politician with little or no conviction, after his overblown rhetoric on the issue and his inaction and backflips on other issues. It was the final straw.

The Resources Super Profits Tax

The (right royal) Super Profits Tax (RSPT) has since become the latest PR disaster for the government, and another one that it has brought upon itself. It will be interesting to see if Prime Minister Julia Gillard can now reconcile with the miners.

Advertisement

One can imagine that the “gang of four” initially saw the RSPT as the perfect plan that would solve a lot of problems. Rudd’s love of big government and big spending inevitably meant that higher taxes must follow. But to increase income tax would be electoral poison, particularly since Labor matched the Coalition’s proposed tax cuts at the last election. Increasing other taxes which are paid directly by “working families” would be similarly unpopular. But presumably, too few would care if big mining companies would have to pay more tax.

Furthermore, the expected outcry from the miners would have given Rudd a public fight to prove that he could stand his ground on behalf of middle income earners and show some ticker against furious but rich mining executives. Like the standoffs with elements of the trade union movement in 2007, this sort of conflict was supposed to help Rudd gain some credibility which had been lost over the ETS.

And against claims that the tax is bad for the economy, Rudd could point to the fact that the tax had been recommended by Treasury Secretary Ken Henry, thus also boosting the government’s economic credentials. It would have appeared to be a foolproof plan.

But what the gang of four didn’t anticipate was how skilfully the miners would prosecute their case. While Rudd and his Treasurer Wayne Swan framed their argument in terms of fat, greedy and rich mining executives versus working families who deserve “their fair share”, the miners linked their prosperity to jobs, superannuation and the economy generally. The mining industry’s ads were far more effective than the government’s ads, which failed to address either why the miners should pay a 40 per cent mega-tax and or concerns that the tax would weaken the industry.

As Friedrich von Hayek observed in The Road To Serfdom, governments have a big disadvantage compared to markets because government knowledge is inevitably limited, while the market is a unique mechanism which is able to efficiently use the knowledge possessed by every individual to decide how resources should be used within an economy. It follows that governments cannot know the full impact of any policy they implement. As I have previously noted, Rudd had a lot to learn from Hayek.

One way in which governments can overcome their inherent lack of knowledge is to consult numerous stakeholders before making a major decision. In contrast, the Rudd government kept the contents of the Henry Review secret for months, before suddenly announcing their new big tax on the mining industry. If the government had listened before deciding, they would have heard good arguments concerning the rate of the tax, the drawbacks of having a threshold at which the tax kicks in, why a uniform rate for all parts of the industry is problematic, and so on. From good processes usually follow good policies.

Instead of such prudence however, the government was caught out by its failure to consult, leading to the ex-Prime Minister playing catch-up by talking to mining executives after the government had made and announced its decision. Since the tax formed the backbone of the government’s projected return to surplus in four year’s time, Kevin Rudd was unwilling to negotiate on the rate of the tax or the threshold at which it applies. This difficult political situation could have been avoided if the government had consulted first and decided afterwards.

Even if the government had ended up making a decision which the miners did not like, at least the government would be able to say that it had consulted and listened to the miners beforehand. Furthermore, many of the tax’s more controversial elements would have been altered, thus reducing the severity of any outcry that followed.

What we got instead was a standoff between the miners and the government and which only one side can win. As other commentators have noted, such a situation would never have occurred under the Hawke government, which often consulted and hence erred less.

Outlook

The problem for Rudd was that once the voters realised he was all about spin over sincerity voters stopped listeningin a similar way to how they switched off to John Howard and Paul Keating in their final years of office.

While Rudd and his advisers focused on winning the day-to-day soundbite battles since the day he assumed office, swinging voters don’t record or keep a track of which side of politics won the spin wars on the most number of days during the last term. Instead, they probably evaluate the government’s performance overall and compare it to how they think the Opposition would do before casting their ballot. And as time went by, they started to notice how little the government achieved since it won office. Indeed, were it not for the unpopular WorkChoices, it is likely that many voters would now admit that they erred at the last election by voting for Kevin Rudd.

The irony is that Rudd only has himself to blame. It is he who exercised unprecedented control over his government, so he has to take personal responsibility for all of its big mistakes. The fact that a gang of four makes all of the big decisions with minimal input from the caucus or the wider community is absurd, and helps explain why the government has made so many mistakes. A more inclusive process focused more on good policy than short term politics would have prevented many of the blunders.

Like most economic illiterates, Kevin Rudd advocated for bigger and more interventionist government. The biggest irony of all is that his government’s numerous shortcomings have greatly discredited his own economic cause.

From the above, it follows that it is no surprise that Kevin Rudd has been dumped. Only a change of leader will make substantial alterations to the tax politically feasible. Furthermore, a Gillard Government can divorce itself from Rudd’s spin-driven style of leadership which the voters are clearly sick of.

  1. Pages:
  2. 1
  3. 2
  4. All


Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

16 posts so far.

Share this:
reddit this reddit thisbookmark with del.icio.us Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Leon Bertrand is a Brisbane blogger and lawyer.

Other articles by this Author

All articles by Leon Bertrand

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Article Tools
Comment 16 comments
Print Printable version
Subscribe Subscribe
Email Email a friend
Advertisement

About Us Search Discuss Feedback Legals Privacy