We don’t know if Julia Gillard, who once teared up while telling the US Congress that "Americans can do anything", was able to find the time to watch President Obama’s recent State of the Union address to the same chamber.
Given the interest which many Australians take in US politics, I rather suspect at least some of her office must have tuned in to see a triumphant Barack Obama confidently announce a suite of new liberal initiatives.
How the Prime Minister must envy her US colleague just now. Obama gets to implement a bold second term agenda; Gillard has to fight doggedly toward an election that nearly everyone in the country expects her to lose.
While Republicans scratch their heads and ponder the emerging Democrat majority, Australia looks headed towards coast-to-coast conservative governments. Obama, fresh from a crushing victory in November and on a roll after several legislative wins against his enemies in the Congress, has the political capital and the media oxygen to roll out ambitious policies. Gillard, struggling at every turn, can’t get anyone to listen to the things she’s saying.
Sunday’s announcement of a $1 billion jobs plan (pdf) was a good example. This was a solid if unspectacular policy, aimed at improving Australia’s patchy record in home grown manufacturing and the commercialisation of innovation. The policy included a welcome re-allocation of R+D funding away from giant mining corporations — a policy recommended by the government’s own Business Tax Advisory Group — and towards small and medium enterprises, as well as an extra $500 million of investment in so-called "innovation precincts". In addition, there was $350 million in new funding for venture capital, through the Innovation Investment Fund.
Judged on its merits, the new policy is admirable, though hardly groundbreaking. Some of it has been announced before, while other bits are essentially the continuation of existing policy. That’s in keeping with the Rudd-Gillard government’s record on innovation, which has been patchy, and at times indolent.
Labor has rapidly expanded funding for academic research, particularly medical research. But it has struggled to get the settings right on industry policy, most notably in the renewables and clean tech sector, where a series of terrible policies have come and gone. In general, the chance for a transformative vision of innovation reform such as that recommended by Terry Cutler in his 2008 innovation review has been squandered.
Venture capital is a good example where government policy has proved itself unable to grasp the nettle of a thorny problem. According to many venture capitalists, the latest announcement of $350 million for a new government-backed venture capital fund called Venture Australia will fail, because Australia’s venture capital market is currently negligible, particularly for early stage and risky startups.
As Newport Capital Group’s Lou Richard told the Australian Financial Review this week, the government’s policy requires firms seeking funding to attract matching funding from the private sector. Because there’s precious little of that to go around, many firms have to hands back their government funding.
"The amount of effort and energy you have to commit to try and tap into that exercise is just too hard," Richards said. "You may as well just go and do your own thing and try and bypass the whole program."
It’s not all negative, though. AVCAL, the peak body for the venture capital sector, has welcomed the initiative. But AVCAL’s own figures, backed up by the Bureau of Statistics, show that early stage venture capital investment in this country has crashed in recent years. Big super funds and other private equity investors have left the market in droves in recent years, after taking big losses on their risky bets. It’s now very difficult for Australian startups to access early stage funding.
Many are also questioning whether the innovation precincts will come to much, given that "clusters" and "hubs" tend to develop organically rather than through government intervention. For instance, over recent years, governments at both state and federal levels have poured billions into auto manufacturing in the vain hope that the flow on effects of car making will assist local manufacturers to innovate and survive in the increasingly brutal international environment. Sadly, that hasn’t happened.
Whatever the merits of the plan, it has to be said that few in the media or the community are taking much notice. Nuanced analysis of the Government’s plan has been thin on the ground, because shortly after it was announced, Nielsen released an opinion poll. And in the contemporary mediascape, polls trump policy every time.
There is no doubt that the Nielsen poll was a bad one for Labor. The ALP’s primary vote was down to a calamitous 30 per cent (down five points), and Julia Gillard’s ratings as preferred prime minister also plunged below Tony Abbott’s. While such figures are not necessarily terminal this far out from an election, they are hardly likely to calm the frayed nerves of Labor backbenchers.
Worse than the figures themselves, however, was the effect the bad poll exerted on the media cycle — and on the Government’s attempts to communicate its jobs and innovation policy. Given the gluttonous appetite for polls-as-news that seems to have infected our political discussion, it’s no surprise that the lead story on the ABC news yesterday was about the poll, not the policy.
Other media outlets also covered the bad poll as though it were the most important story of the day, despite a bushfire threatening large swathes of suburban Melbourne. Labor backbencher Julie Owens spoke for many this week, when she took a journalist to task for relentlessly badgering her about the election, when she was actually announcing a new research centre at Westmead Hospital.
That’s not to say that government MPs aren’t worried. It would be hard not to see the current situation in a gloomy light, and leadership speculation is again rampant. Laura Tingle summed up the mood today when she wrote that "the best face some federal Labor MPs could put on the Nielsen poll yesterday was that it was not telling them anything they hadn’t known for months, but was just confirming that the government is history".
Labor has had a disastrous fortnight since Julia Gillard announced the election date back in late January. The issue is not so much with the Government itself — although its performance has scarcely been stellar — as with the gathering narrative of defeat that Labor appears unable to shake. All the hard work of the spring and summer has been undone, and the government now enters the business end of the election year in a situation as parlous as the dog days of 2012.
Many have written off Julia Gillard before, and lived to regret their judgment. But just now, the path to a third term for this government has never seemed so perilous.
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