Originally published in ABC The Drum, 3 January 2012
The Labor Government set itself up for failure when it promised a surplus this financial year. Instead of bowing to Opposition pressure, the ALP must lead in the economic debate, writes Simon Copland.
The Government’s announcement that it was dumping its promise for a surplus this financial year signifies one of the most frustrating elements of this latest term of ALP Government.
While the decision was lauded by economists and reflects the general views of the public, it is likely to end up hurting the Government heavily, in what can only be described as a self-inflicted wound.
The way I see it, good governments really have two main jobs. The first is to develop and manage policy and programs to tackle the major issues of the day. Second however, and this is often ignored, the government needs to be an ideological leader.
To be successful in government, political parties need to be able to take the population on a policy journey with them. It is only in doing so that a government can get support for the work it is doing, in turn creating long-term change.
Here is the crux of what went wrong when it came to the surplus, and what is going wrong with much of the ALP’s term in government.
It’s been pretty clear for a while that very few in the ALP, and particularly few in the broader left, saw the need for a surplus in this financial year. The decision to go to the last election with a deadline for a surplus was entirely political. It was based almost solely on pressure from the Coalition about the Government’s ability to manage a budget, and fear of attacks on its economic credibility.
In making such a decision therefore the Government failed to provide leadership in the economic debate. In going to the last election, they had two choices: they could stand up and argue why we didn’t need a surplus or why we needed to be flexible on a surplus, or it could succumb to Coalition pressure to set a deadline for its implementation. In succumbing to pressure, the ALP bought solely into the Coalition’s framing of the debate – a conservative ideological framing that was never going to work for the ALP.
The Government therefore set itself up for failure. It either delivered a surplus that its members didn’t want, and that would (and has) require cuts to programs that it held dear. Or alternatively, and this is the situation we are now facing, it could drop the surplus, follow good policy, but be derided as a party who break promises for political gain.
And you can see this narrative already playing out. Despite the cheers from economists, and the polling that showed the vast majority of people don’t care that much about the surplus, the decision is already hurting the ALP. The day following the surplus being dropped, the Daily Telegraph ran a front page story ‘Gillard breaks third promise as $1 billion surplus axed’. Shadow treasurer Joe Hockey took a similar tact, tweeting at one point:
“I see PM has broken her holidays to go to a folk festival. Shame the PM didn’t front up to apologise for breaking 400 promises for a surplus.”
And if you think that this is a one-off mistake by a government worried about economic management, then you only need to look at the other two ‘broken promises’ the Daily Telegraph pointed out to see how this weakness is really within the blood of the ALP.
First, there was the ‘there will be no carbon tax under a Government I lead’. Amongst all the discussion about that line, one question has never really been answered, ‘why did the Prime Minister ever say that?’
Given the force in which the Government has defended the carbon price it is clearly something they (now) believe in. It was always the sort of policy you could see an ALP government being willing to support. The pain they are feeling therefore is one that is largely around an early refusal to fight for what was potentially a strong policy. The line was a political statement based on fear of attacks from the right.
The same can be said about asylum seekers. Whilst this may have changed somewhat in the last year, it is clear most in the ALP find mandatory offshore detention repulsive. Ever since Tampa however, the ALP has been trapped in a debate that has been framed on Coalition terms. Faced with fear of community backlash, and an attack campaign from the Coalition, the ALP has refused to take the debate on, leaving us with a policy that is far to the right of anything Howard ever gave us and is doing the ALP no good.
While we can have a go at how politicians and the media are unable or unwilling to adapt to changes in circumstances (a needed criticism), the surplus debacle is the epitome of what has been frustrating about this latest term of government. Good government isn’t just a technocratic dream to ‘develop policy to solve problems’. Governments also need take leadership on the major issues facing the day, providing an ideological basis for decisions they make.
With a constant threat of being attacked however, this is something the ALP has constantly refused to do, leaving them looking like liars, who constantly backfill on policies for political gain.