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The Rudd factor

By Chris Lewis - posted Monday, 30 August 2010


Much will be written about why Labor performed so badly at the 2010 federal election.

Some will argue Labor did not benefit from dumping Rudd, that disloyalty affected Gillard’s campaign, and that Rudd’s axing cost Labor many votes in Queensland.

Others will cite the Cabinet leaks that occurred during the second and third week of the election campaign.

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But Labor’s poor showing owes much to the performance of the Rudd Labor government which proved disappointing with many of its policy actions and promises either unrealistic, unfulfilled or a waste of valuable resources.

Sure there were some important achievements, although many are overstated.

Fred Argy (“Rudd’s achievements”, Club Troppo, May 3, 2010) prepared a list, of which I have added my own comments and further detail from another article (“Rudd and Gillard’s achievements, stuff-ups and unfinished business”, Herald Sun, July 16, 2010). His achievements were:

  • rescuing the economy from the global financial crisis (although significant resources were wasted);
  • limiting real spending growth to 2 per cent a year (although Commonwealth debt is now predicted to increase from $18 billion to $174 billion between 2007-08 and 2011-12);
  • a resources rent tax on mining (although implemented without adequate consultation which resulted in the minerals sector waging a PR campaign before PM Gillard defused the situation by lowering the rate of tax);
  • greater transparency in superannuation arrangements (including inappropriate financial advice and a stop to commissions);
  • improved education with a national curriculum to deliver consistent course-work in English, maths, science and history; and 300,000 extra computers in classrooms and new school libraries - although one million were promised by 2011 for every student in years 9-12;
  • investment in social housing (to build 20,000 units);
  • tempering the Howard government’s workplace reform;
  • an apology to Aborigines and some gains in combating Aboriginal poverty;
  • a review of the qualifying age for the age pension to 67 years;
  • increasing pension payments with single pensions rising by $30 a week and the couple pension by $10 a week in 2009;
  • cutbacks in salary sacrifice for superannuation e.g. reducing the cap from $100,000 to $50,000;
  • My School website to give parents detailed information on student performance in reading, writing, grammar and numeracy;
  • implementing the Paid Parental Leave Scheme with a taxpayer-funded 26-week paid parental leave scheme at the minimum wage;
  • the reforming of bank regulation e.g. on bank capital;
  • youth allowance provision;
  • new investment in public hospitals, GP and Superclinics (although Labor’s promise to build 31 (then 36 and then 59) resulted in just 12 taking patients by July 2010);
  • addressing the plight of homeless people;
  • investment in nation building infrastructure (including the National Broadband Network);
  • investment in jobs and training, although the nurses recruiting scheme failed with just 1,000 accepting a $6,000 cash bonus to return to work despite the Rudd government promising to recruit 7,750 retired nurses. Further, while 2,650 secondary schools were promised trades training centres, just 24 were completed by July 2010;
  • fairer and more sustainable private health insurance and incentives (although a broken election promise).

At his final press conference as PM, Rudd also noted 50,000 more university places and greater investment in research; a policy to build 20 regional cancer centres; a National Organ Transplant Authority; signing the Kyoto Protocol; boosting the renewable energy target to 20 per cent; and a Murray Basin Authority and a basin-wide plan and a basin-wide cap on water.

But the Rudd government’s record had many negatives. This does not merely refer to the major policy reversals during early 2010, especially the emissions trading scheme (ETS) and ditching an earlier promise to build 260 childcare centres by reducing the number to 38.

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Rather, the Rudd government’s record must also be judged on what was promised and not delivered; Rudd’s control of the policy agenda and failure to negotiate; Rudd’s rhetorical rejection of the past when his government was hardly different; and even his public outbursts of anger.

While pressure on Rudd mounted soon after major policy backdowns, especially the ETS, the government as a whole was to blame. After all, Labor elected Rudd as leader and concern amongst the party only surfaced with declining public support after a Newspoll (early May 2010) indicated Labor’s primary vote was only 35 per cent while the Coalition led 51-49 in two-party preferred terms (Matthew Franklin and Patricia Karvelas, “Party warns PM Kevin Rudd: no more U-turns”, The Australian, May 11, 2010).

Until May 2010, Rudd had an enormous appeal. Newspoll indicated that Labor still led the Coalition 56-44 in late March 2010 on a two-party preferred basis.

Many Australians did believe Rudd at the 2007 federal election when he offered ideas, hope and a desire to address old and new problems. Perhaps many believed that Rudd could be both a fiscal conservative and social democrat, although his government’s record achieved little substantive change in accordance to both terms.

In terms of the economic stimulus package, intended to offset lower private sector activity, there was much waste. The Home Insulation Program (HIP), indeed one of Australia’s worst ever federal policy debacles, resulted in four deaths and widespread rorting and cost $1 billion to address its mistakes. The $1 billion represents nearly 40 per cent of the total $2.45 billion spent on the HIP.

A taskforce also concluded that most of the 254 complaints made towards the Rudd government’s Building the Education Revolution raised valid concerns about value for money, and that shortcomings of the program that could have been avoided.

In April 2010, it was reported that “minor refurbishments of the Pleasant Hills Primary School near Wagga have been quoted at $275,000, including GST; $900,000 for a government-provided prefabricated library at Berridale State School, in southern New South Wales (NSW); $200,000 to a government-approved contractor to move a sewer and stormwater drain at Berwick Lodge Primary School in Victoria; and nearly $900,000 for a two-room prefabricated concrete building, supplied by the State Education Department to Eungai Public School, in northern New South Wales”.

The NSW Teachers Federation was so alarmed that it called on the NSW Auditor-General for an independent public inquiry into the scheme.

A NSW principal noted in an e-mail, “I am sitting here staring at my beautiful new $425,000 library that cost the taxpayers of Australia $850,000. The internet is not connected - the fans can’t be turned on because they hit the ceilings, and the light switches are upside down”.

Even on traditional Labor policy strengths, the Rudd government was hardly a success, unless emulating the Coalition’s policies now reflects Labor’s prowess.

Take education. Dr Jim McMorrow, a former senior education bureaucrat, conducted analysis of federal government education spending between 2009 and 2013 and concluded that private schools will have received $47 billion for computers, new buildings and general running costs, compared with $35 billion for government schools. This is despite two-thirds of Australian students being in government schools.

With the private school share of federal funding predicted to increase to 64 per cent by 2013, it was calculated that an extra investment of $1.5 billion a year was needed to return public schools to the 43 per cent share of funding achieved under the last Labor government.

It was also argued that if new Commonwealth money for trades training centres and school computers was distributed on the basis of need, public schools would need an additional $500 million more than they are now receiving (Emma Macdonald, “Funding boost for private schools”, Canberra Times, January 18, 2010).

Rudd was not a great Labor politician trying to buck or temper recent trends.

Long before Rudd’s rhetoric hoodwinked the Australian electorate and Labor in 2007 into believing that he was something different, he was known as Dr Death: this was when he was running the Queensland cabinet office and was responsible for cutting 2,000 hospital beds, shutting down operating theatres and allowing mental health waiting lists to blow out to three years.

As the public mood changed on key issues, so did Rudd. Whether it was asylum seekers, his desire for a large population (I make no apologies for that), softer rules for foreigners buying Australian homes, or the ETS, the Rudd government changed on all such issues in line with the public mood. Rudd, inspired by Dietrich Bonhoeffer, a German theologian who helped save some German Jews, was even prepared to have asylum seekers end up marooned in Indonesia, a nation which has not signed that UN convention.

While this behaviour is hardly surprising in a democracy where there is a crucial relationship between public opinion and policy (although not always), Rudd’s growing list of policy changes or backdowns left no doubt to the public that he was no different from other politicians.

In my view, he was worse. At least Howard had the honesty in 1995 to indicate a desire to take on militant trade unions and to encourage mutual obligation for social security recipients. Howard, prior to the 1996 federal election, also indicated that extra spending on the environment was dependent on the partial privatisation of Telstra.

Over time, the public was informed more about Rudd “the control freak”.

During April 2009, considerable publicity was given to a 23-year-old flight attendant driven to tears by Rudd shouting at her for serving him the wrong meal.

In June 2009, an article pointed to Rudd’s considerable bid to control the media. While Rudd initially vowed to slash numbers, it was noted that the Rudd Government “employs 40 communications staff in the Department of Agriculture, 30 in the Department of Innovation, 23 in the Department of the Environment and six in the PM’s office”.

David Gazard, former media adviser to Howard and political adviser to Peter Costello, stated that “Rudd is the most media-driven PM we’ve ever had”.

It is also noted that, although past governments also sought control, even press releases and media by CSIRO had to be first approved by the PM’s office (Greg Callaghan, Drew Warne-Smith, “Rise of Rudd’s sentinels of spin”, The Australian, June 6, 2009).

While Rudd cited the need for truth and change in his essays, these were just words. As evident in Rudd’s article “The Global Financial Crisis” (The Monthly, February 2009), Rudd blames so-called neo-liberalism as some kind of strategy “starving the beast, cutting taxes in order to strangle the capacity of the government to invest in education, health and economic infrastructure”.

Rudd goes on to suggest he is a social democrat committed to social justice within a belief that “all human beings have an intrinsic right to human dignity, equality of opportunity and the ability to lead a fulfilling life”.

The only trouble is that Rudd’s policies also added to these same trends. During his leadership, he cut income tax rates for individuals and the company tax rate from 30 to 28 per cent in 2010.

But that is the joke that was Rudd. He would rather distort the truth, on a par with a average undergraduate student (although left-wing academics loved it), than admit that major economic reforms since the early 1980s occurred because they were deemed by most major political parties around the world as being necessary.

It remains to be seen how far such trends will continue in Western nations, but the last thing Australia needed was a PM falsely accusing past governments, notably Howard’s, of having no regard for social compassion. OECD data indicated that both Labor and Coalition governments had adopted a policy mix which helped Australia’s level of income inequality remain similar from the mid-1980s to mid-2000s, whereas it worsened in 19 of 24 OECD countries measured.

Under Chairman Rudd, the great leader who supposedly opposed the past, it is remarkable just how recent trends remained similar. In terms of housing, prices were at record levels in 2010 at a time when rental prices were also increasing.

In terms of government relying on domestic consumption and private consumer debt, household debt to income ratio reached a record ratio of 157 per cent by March 2010 with housing alone 140 per cent.

While Rudd promised to stop Australia from becoming a quarry for Asia, more manufacturing jobs were lost and exports of iron ore and coal became even more important.

Rudd was “so disturbed” by the past he even appointed former Howard government ministers to positions of public importance, including Peter Costello.

If Rudd had any real guts in accordance to his supposed intellectual prowess, then he would have indicated that Australia (and other Western nations) were living beyond their means. But of course, why let a good story get in the way of truth and commit political suicide.

Even on the environment, the Rudd Labor government was a failure: Commonwealth environmental spending is projected to decline from a record $4.36 billion in 2007-08 to below $4 billion for the next three financial years. Of the Rudd Labor government’s projected level of $3.12 billion of environmental spending for 2009-2010, $1.13 billion was set aside for the disastrous insulation program.

It took time, but eventually Australians (and Labor) woke up to Rudd. Once Labor abandoned its ETS, the public had much less reason to believe Labor. If the Rudd government could not address the “greatest moral challenge of our time”, how was it going to address rising costs for housing and utilities, issues of immediate importance to many households. While many more voters voted for the Greens, many battlers returned to the Liberal Party, including in Sydney’s western suburbs.

By the time Rudd was dumped the damage had been done.

With many Australians no longer believing Labor after many broken promises and poor policy development, the Coalition rightfully sold a message that Labor did not deserve another term in office. Besides the odd major policy announcement, such as an extra $1.5 billion for mental health and generous paternity leave, Abbott barely had to move from his conservative platform.

Labor’s desperation, which saw matching the Coalition on asylum seekers and immigration, focused much on convincing Australians that Abbott would reintroduce WorkChoices and erode Australian working pay and conditions, arguably the most negative tactic of the 2010 election campaign.

The Rudd Labor government was one of the poorest federal governments due to its unfulfilled policy promises and wastage of resources.

And it was the Rudd factor that best explains the demise of Labor at the 2010 federal election. Sure, the Rudd government did have a number of policy achievements, but its level of rhetoric was so great it was never likely to deliver. Once the major policy backdowns occurred, it was all downhill for Labor.

Hopefully Labor has learned a valuable lesson. In these competitive economic times, rhetoric and false promises are indeed dangerous strategies.

While balancing idealism and realism is difficult, the Rudd government's policy record merely ensured a greater vote for the Greens.

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About the Author

Chris Lewis, who completed a First Class Honours degree and PhD (Commonwealth scholarship) at Monash University, has an interest in all economic, social and environmental issues, but believes that the struggle for the ‘right’ policy mix remains an elusive goal in such a complex and competitive world.

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