A YEAR IN REVIEW: Turns Out We Were Listening To The Wrong Politician

Politics in Australia in 2014 was remarkable for one thing: the disintegration of the Coalition’s governing project.

In the end, it all came down to equity. The Abbott government’s resolute insistence on crafting a fundamentally unfair policy platform turned voters against it, perhaps irreparably.

In retrospect, what’s interesting about the precipitous decline in the Coalition’s fortunes is how few predicted it. Rampant in opposition, Tony Abbott secured a convincing majority in September 2013. After three years of devastating civil war over the leadership, Labor under Kevin Rudd and Julia Gillard was a discredited rump, widely seen as unstable, incompetent and economically irresponsible.

And yet, with the benefit of hindsight, we can see that within the 2013 election campaign lurked the germ of the government’s current malaise.

You can still find the Liberal Party’s election platform document, Our Plan, on the Liberal Party website. During the campaign, Tony Abbott and his frontbenchers made much of this document, printing thousands of glossy brochures and brandishing it about in television appearances.

If you read through Our Plan now, it’s striking is how centrist and moderate it is. No mention is made of sweeping cuts to health and education funding, of a $7 GP co-payment, or a radical deregulation of university fees.

On page 40, for instance, parents of school-age children would have found the reassuring sentence “we will ensure the continuation of the current arrangements of university funding.” On page 4, you can read the promise “we will deliver better services, including better health services.”

And, of course, on election eve, Tony Abbott gave that famous television interview to SBS in which he promised “no cuts to education, no cuts to health, no change to pensions, no change to the GST and no cuts to the ABC or SBS.”

In recent times, it has become fashionable to describe that promise as a kind of overreach: the product of an unnecessarily nervous Opposition attempting to bed down victory.

In fact, the adoption of moderate policy positions was at the core of the Coalition’s strategy. In opposition, Abbott ran hard on just a handful of policies, mainly on the carbon tax and asylum seekers, and promised a “unity ticket” on most other things. After all, many of Labor’s policies were popular: the National Broadband Network, the National Disability Insurance Scheme, and the Gonski schools reforms.

Voters listened. They expected the Coalition to remove the carbon and mining taxes and adopt punitive measures against asylum seekers. But they had every reason to believe the Coalition would retain many of the policies that Julia Gillard had introduced. They certainly did not expect a radical assault on social welfare, such as cuts to family benefits payments, to Medicare, or to schools and university funding.

Perhaps voters were reading the wrong document, and listening to the wrong man.

While Abbott and his chief of staff Peta Credlin crafted a moderate social policy platform aimed squarely at middle Australia, shadow Treasurer Joe Hockey was preparing a very different set of policy prescriptions.

In 2012, he gave a speech to a right-wing London think tank, entitled “The End of the Age of Entitlement.”

The warning contained in that speech could not have been starker. Australia was living beyond its means, Hockey declared. Our social safety net was unsustainable. Without a radical austerity program, standards of living would decline. “The market is mandating policy changes that common sense and years of lectures from small government advocates have failed to achieve,” he said.

Here was as honest a statement of intentions as you could hope to find. It was pure neoliberalism: dismantling welfare protections and shrinking the size of government to unshackle free enterprise. If that threw the unlucky into poverty or destitution, well, so be it.

Just to make the point crystal clear, Hockey contrasted sclerotic western democracies with that beacon of Asian capitalism, Hong Kong. “Without a social safety net, Hong Kong offers its citizens a top personal income tax rate of 17 per cent and corporate tax rates of 16.5 per cent.”

It’s hard to find a simpler explanation of Hockey’s world view than this. What counts are low taxes and small government, not the right of citizens to vote.

Soon after coming to office, Hockey began to implement this program. He appointed a Commission of Audit, headed by right-wing CEO and business lobbyist Tony Shepherd. And he set about preparing his first budget.

As soon as voters got a look at what Hockey and his mates in big business had planned for them, the electoral fortunes of the Abbott government started to head south.

The beginning of the slide may well have been Education Minister Christopher Pyne’s backflip on the Gonski reforms, which happened late in 2013. Gonski, too, has an equity aspect: it is all about pulling up the performance of struggling students and schools. 

But it was the Commission of Audit and the budget that crystallised public perceptions of a mean and inequitable government.

The Commission of Audit was a barely-credible grab bag of neoliberal policies aimed squarely at the destruction of Australia’s welfare state. It recommended a GP co-payment, radically lowering the minimum wage, delaying the NDIS, abolishing the Gonski reforms, slashing foreign aid and abandoning federal support for homelessness.

Just a fortnight later, Hockey’s first budget announced a GP co-payment, slashes to foreign aid, cuts to schools and hospitals funding, radical university reforms, cuts to homelessness funding, and denying the dole to under-30s.

The unequal skew of the measures was undeniable. Family Tax Benefits were slashed — a favourite entitlement of the Howard era that mainly help low and lower-middle income families. Pension indexations were crimped. A range of other tax and benefit policies were adjusted, with the pain mainly falling on the poorest.

But superannuation tax concessions for the wealthy were restored, as was the novated lease rort for company cars. Big business benefited from the abolition of the mining and carbon taxes.

The irony, of course, is that Hockey’s radical assault on what’s left of Australia’s welfare state hasn’t even helped the budget. As Monday’s MYEFO showed, the deficit continues to blow out.

Voters hated it.  Fifteen months into its first term of government, the Coalition is now every bit as unpopular as the dog days of the Gillard administration. Certainly, the broken promises contributed to the savage reaction. But the core of the electorate’s dismay remains the unfairness of the government’s fiscal strategy. 

The irony of the Coalition’s misfortune is that is self-inflicted. It was ideology, not pragmatism, that led the Abbott government to try to dismantle Australia’s welfare state. It was ideology, not pragmatism, that drove the broken promises.

One of the strange consequences of this ideological crusade is Labor's reinvigoration.

The Australian Labor Party remains desperately in need of internal reform and philosophical reinvention. But if the ALP can agree on anything, it is a core idea of fairness, and the defence of what remains of the safety net. By attacking health and education, the Coalition is fighting Labor on its home ground, and on issues of importance on which even its warring factions can agree.

Previous Coalition governments understood that welfare was popular, even if derided as “middle class welfare” by the anti-government types on the far right. John Howard was happy enough to pursue ideological agendas in culture and history. But he showered middle Australia with cash payments, which it understandably welcomed.

In contrast, neoliberal pro-market policies are not particularly popular, as Richard Cooke pointed out in a perceptive article in June.

As Cooke noted, privatisation is a good case in point. Privatising government agencies has almost never been favoured by voters, and still isn’t (just ask Anna Bligh). A huge residual support base also remains for protection, and against free trade. And when pollsters ask voters whether they’d prefer lower taxes or better social services, they opt for better services.

In other words, the bulk of the electorate is to the left of the Coalition on most economic policy issues except the budget deficit. Indeed, it’s probably to the left of Labor. As John Quiggin pointed out recently, “the public, which stopped believing in the microeconomic reform agenda many years ago, is now punishing governments when they persist in pushing it.”

But the Abbott government is so out of touch, and so enamoured by neoliberal and libertarian philosophies, it struggles to register this electoral reality. Nor do its cheerleaders in the Murdoch media. Instead, the favoured explanation is that the government’s problems are due to Joe Hockey’s poor communication skills, or the supposedly dictatorial nature of the Prime Minster’s chief of staff.

But look elsewhere. The unpopularity of attacks on health, education and social welfare is far from a uniquely Australian phenomenon. In Europe, far-left and far-right parties are making startling gains, with programs that are profoundly antipathetic to the kind of pro-market, anti-welfare policies advanced by Abbott and Hockey.

In Spain, the openly socialist Podemos is now the most popular party of the left. In Greece, polls show Syriza could win the next election. In Britain, UKIP is taking voters off both Labour and the Tories with its anti-immigration, pro-welfare platform.

The global financial crisis did not, as some first thought, spell the end of neoliberalism as a viable political philosophy. But its aftershocks have reverberated in subsequent years. Big banks and top CEOs are widely unpopular. The most respected people in our society continue to be service professionals like doctors, nurses and firefighters.

The death of Gough Whitlam in October provided a poignant weathervane for such sentiments. Whitlam’s death, and the huge outpouring of public grief that followed it, spoke to a broader hunger in the community for the type of public figure that seems to have vanished from the contemporary scene: a politician of substance, dedicated to a vision of a better educated, fairer, more just society.

Whitlam was a leader who could boast not just of his achievements in social justice, Indigenous recognition and the arts, but of introducing universal health care and sewering large parts of Sydney. It is difficult to believe the death of a comparable conservative figure would compel such public emotion.

All this underlines the tenacity of Australian popular belief in fairness and social opportunity, anchored not to the market but to the nation state. To the astonishment of Joe Hockey and Tony Shepherd, most ordinary Australians still believe in what used to be called the “fair go”.

That remnant belief in fairness poses huge difficulties for the most right-wing federal government in a generation. 

When faced with the most radical assault on Australia’s welfare state in a generation, voters have responded. 2014 was the year that Australian social democracy fought back.