The Crisis in Australian Politics 2010-2013 (reposted)

As described in the previous post, Free speech for public servants and Osip Mandelstam, I am reposting here an extended set of posts that I originally posted in three parts on the Happy Pessimist blog (no longer online) in 2013.

The Crisis in Australian Politics 2010-2013

07 Apr 2013 (originally posted on The Happy Pessimist blog – no longer available)

In the nineteenth century Alfred Deakin wrote a book on a fascinating crisis in Victorian politics, which in many ways had characteristics of the 1975 dismissal of Whitlam. It was titled the Crisis in Victorian Politics 1879-81. Let’s pull back a little from the difficult strains of the last three years and try to describe the series of events as a single protracted crisis in Australian politics.

It has been a crisis of politics, rather than government. The institutions of government have on the whole been able to withstand the collapse of legitimacy in the governing political elites. It is true that government spending is not being effectively restrained, and Cabinet government conventions and processes have decayed. There has especially in the last eighteen months been a merry-go-round of Ministers that have fed and exacerbated the decay of political authority. The Government has become a shambles and is bringing down some of its cheerleaders in the bureaucracy and institutions with it, but this crisis has been overwhelmingly marked by political failure – the loss of advantage in the conflict between them and us, as marked by rhetoric, values and interests.

So, it is a loss of political authority and the failure of leaders to negotiate reasonable resolutions of conflicts with authority that lie at the heart of this crisis. The rancorous dispute between Rudd and Gillard is very real, and very influential because its roots lie in their mutual failure to establish governing traditions, conventions, ideas and coalitions in the wake of the extraordinary political mandate conferred on them in November 2007.

It is worth looking back to some of the words written as Rudd and Gillard entered office a super-duo to appreciate how humiliating their stumbles have been. In November 2007 Paul Sheehan wrote:

“The utopian Left inside Labor and the Greens will have to come to terms with the reality that Australia will soon have a Labor Prime Minister who has a temper, an iron will, a fierce intellect and an enormous mandate, who has given the Australian electorate what it wanted… an end to the excesses and the hollowness of the Howard Government, not a deviation from policy pragmatism.”

Paul Sheehan

With prophetic and ironic words Geoffrey Blainey wrote:

“The emphatic lesson of Saturday’s election is that a Saturday’s election is that a successful political regime is bound to be in grave trouble once it approaches its 12th birthday. Having carried out its main tasks, it loses its sense of purpose and mission.”

Geoffrey Blainey

How strange that not yet three years later, Aunt Julia’s infamous verdict on her infant government was that “a good government had lost its way.” She and Mr Rudd also had all but abandoned Blainey’s secret of Howard’s success – to be the great persuader. In truth, the Rudd/Gillard Government from the outset confused celebrity with persuasion, and media announcements with ideas. It never had a way to follow, and soon revealed itself to be a preacher of sound and fury, lost in a drifting boat, its captain and crew mesmerised by the sirens’ voices of the sentimental intellectual elite. Yet for a time the show was appealing, and the weakness of the performers hidden behind bright sets and vivid music. Then it all dreadfully, magnificently collapsed.

The seeds of the crisis lay in these events, through which the Rudd/Gillard Government overreached, miscalculated and lost the sense of politics’ moorings in the sentiments and traditions of a common we. Each event entangled itself in the next, and sapped coalitions and breached the sources of authority – tradition, reason, law and charisma.

First, the Australia 2020 Summit. I still recall the sentiment being expressed among enthusiastic elites of a certain age in the months after Rudd was elected that “This was our time – We’re the ones in charge now.” In April 2008, Rudd gathered his great and grandstanding, supported by a hive of management consultants pretending to be public servants, to hold the 2020 Australia Summit in order to develop “a strategy for the future of the nation.” In one stroke, Rudd and Gillard announced their separation from the common folk, and demonstrated the hollowness of their political vision. The great and grandstanding exposed their weak mettle.

Hostage to the cartoon thinking of McKinsey and Boston Consulting Group, and their doting, insecure bureaucratic patrons, the rare idea that survived the butcher paper treatment was quickly turned into mush. The participants, flattered at their elevation to a temporary bunyip aristocracy, believed at last they were going to have “clear air.” David Marr wrote: “it was worth a trip to Canberra to hear how the rhetoric has shifted and the faces changed. These are the early days of the post-Howard era, but it’s already possible to grow a little nostalgic for elite bashing. All gone.”

Yet the outsiders saw this repetition of summitry as farce for the elite failure that it was. Reports emerged of the fabrication of consensus, the bumping up by bad chairs of silly ideas they espoused, and the overweening sense of government being pushed into the format of games that trainers play. Yet, enchanted by their elevated public importance, the elites did not notice their own failure. Marr quoted Rudd approvingly that this “was just the beginning.” It was in fact the beginning of the crisis.

Hawke had famously used his summit to confer depth and to build coalitions to execute his mandated idea of consensus. On the other hand, Rudd, despite enjoying the advantage over his opponent in the preferred PM rating of 70 to 9 at this time, craved the mandate, above all from the approval of the “smart and the famous”, for his wish to create a strategy for the future. So he awkwardly revealed the absence of any political idea in his government, and dissipated his mandate into a thousand pet projects of the great and the grandstanding. So began the image of Rudd “hitting the ground reviewing,” and so too began the slide in his approval.

Second, the ideological crisis of the Global Financial Crisis (GFC). There seemed to be little or no commentary at this grand event, the Australia 2020 Summit, of the financial events that would soon consume the Prime Minister. Certainly, the early signs had appeared from 2007. Yet the dramatisation of events into a political and ideological crisis really did not hit their peak until the most crisis-ridden moments of September and October 2008, half a year after Australia’s illusions of futurism. By all accounts the first round of action by the Australian Government, led by Rudd and his key bureaucrats, were timely, brilliant and exemplary of the great accomplishments of wise government.

Yet within a a few months, Rudd and his Government turned this policy triumph into an ideological crisis. In February 2009, Rudd published his essay “The Global Financial Crisis” in The Monthly magazine. It read something like the musings of a holidaying executive at his beach house after an exhausting year. When I read it, I could not quite believe how bad and confused it really was. Immediately, I sensed that this pilot of the financial crisis was driven to make poor judgements and to live in the illusions of his dreams. He professed to have written it himself, although stories had been emerging for some time of his vexed and troubled relationships with advisers and writers. It was, Rudd claimed to his soft left audience in The Monthly, one of those rare moments in history when intellectual prophets emerge to change the course of history. In his grandiloquent opening paragraph, he wrote:

“From time to time in human history there occur events of a truly seismic significance, events that mark a turning point between one epoch and the next, when one orthodoxy is overthrown and another takes its place. The significance of these events is rarely apparent as they unfold: it becomes clear only in retrospect, when observed from the commanding heights of history. By such time it is often too late to act to shape the course of such events and their effects on the day-to-day working lives of men and women and the families they support.”

Kevin Rudd, “The Global Financial Crisis,” The Monthly February 2009

The global financial crisis, Rudd wrote,

“called into question the prevailing neo-liberal economic orthodoxy of the past 30 years – the orthodoxy that has underpinned the national and global regulatory frameworks that have so spectacularly failed to prevent the economic mayhem which has now been visited upon us. Not for the first time in history, the international challenge for social democrats is to save capitalism from itself: to recognise the great strengths of open, competitive markets while rejecting the extreme capitalism and unrestrained greed that have perverted so much of the global financial system in recent times.”

Kevin Rudd, “The Global Financial Crisis,” The Monthly February 2009

He went onto compare himself by association with Roosevelt and Keynes. This was a spectacular over-statement and Rudd’s most grandiose example of over-reach. So caught up in briefings and interpretations of events overseas, he failed to observe the very different impacts of these financial events in Australia. This was not economic mayhem, but a mild disturbance, with some very strong countervailing forces related to the specific circumstances of Australia’s trade and fiscal position. Inside the over-heated world of economic advisers, there was a preoccupation with how to make sense of events that did not quite fit their usual understandings. But outside this world, a vast credibility gap emerged between everyday experience of the economy and the beliefs of the elites that they were in a world historical crisis. For the public, the crisis added marginal pressures on household budgets but otherwise adapted pretty simply to some mild changes. For the Rudd Government and its bureaucracy, they believed they were stationed at the “commanding heights of history.”

So, they underwent an ideological conversion, fell victim to a gambler’s fallacy that government had shown how it could predict markets better than business, and opened the deepest pockets of government spending in the faith that they were avoiding the mistakes of Keating’s recession of ’92. So Rudd, Gillard and Swann became victims of their own illusions, and this ideological crisis created a political crisis because the interpretation by the Government of the actual circumstances of people’s lives was just wrong.

This credibility gap lay at the heart of the difficulty of the Government’s problems with “selling its record in responding to the Global financial crisis.” A more modest reading of events would not have inflated the Government’s role into the harbinger of a new epoch, and yet succeeded in securing support for the careful avoidance of a storm that they did undertake. From the earliest time, the Government was trumpeting myths about its track record, and these myths were brittle and just waiting to be smashed.

In my next post as part of this extended essay, I will examine, the fiscal overreach that this ideological crisis provoked, so creating the failures of budgets and implementation that so devastated the Rudd/Gillard Government’s credibility, and the precipitating event of the political failure on the environment and the emissions trading scheme that, more than any other event, destroyed Rudd’s reputation of moral integrity as a leader. Then I will examine three remaining roots of the crisis – health reform failure, the Henry taxation review fiasco, and immigration and cultural security. Finally I will examine the characteristics of this prolonged crisis of parliamentary and party government, before summarising what may endure and what will disappear from these events

The Crisis in Australian Politics 2010-2013 (part II)

Originally posted 09 Apr 2013

So, quick recap. I am trying to make sense of this three-year period as a prolonged crisis in Australian politics, which had its roots in a series of political elite failures, which precipitated a collapse in authority of these elites and their institutions.

The first event considered was the Australia 2020 summit, which dramatised the modern labor party as empty-headed and detached from social institutions beyond media-driven celebrity, despite its remarkable electoral mandate. No-one better personifies this failure than Rhys Muldoon. The second event was the ideological crisis provoked by Rudd’s over-reach in his response to the global financial crisis. In presenting himself as the prophet of a new anti-capitalist epoch, he over-valued the agency of government, detached himself from the market reform traditions of the Hawke-Keating era, and decisively opened the credibility gap between the Government’s economic rhetoric and everyday experience of life. The state was roaring at a mouse.

The third event was the fiscal crisis provoked by the GFC. Rudd and Gillard’s rhetoric of panic and new epochs opened the door for all sorts of boosterism schemes that simply cost too much for the benefits they delivered. In particular, the construction and blue-collar interests in the union movement pressed hard to “save” jobs by funding what Labor advisers like to call “nation-building” projects. While the first cash injection for households was a sensible response to the GFC, the second wave of grandiose projects were slow to deliver, did not meet cost-benefit tests, and were more a response to the special pleading of the AWU and CFMEU to avoid Keating’s ’92 recession, despite the evidence that it was just not going to happen. So were born the school halls, pink batts and NBN construction cargo cult.

So too did the Commonwealth lose control of its spending for policy purposes. Other sites can go over the budget numbers, but from the catallaxy files this graph illustrates the growth in payments. A shallow dip in receipts in 08/09 and 09/10 did not continue beyond that point. But by that time the loss of policy control of the budget was entrenched, with dramatic increases in deficits, and more importantly the loss of flexibility to respond to the three major social policy priorities that could have saved the government: health, education and disability.

The fourth event, was the environmental policy betrayal. I do not use “betrayal” as a personal judgement, but rather as a characterisation of the emotional and political response of the public to the Rudd/Gillard backdown and later policy failures on the emissions trading scheme, citizen’s assembly and ultimately the carbon tax. It was this event beyond all else that exposed Rudd as an idol with feet of clay. At the time, Malcolm Mackerras said:

“This is about the fact that the electorate has woken up to the fact that Kevin Rudd is not the sort of leader that they once hoped he might be. I think three years ago the Australian people were so determined to get rid of (then conservative leader) John Howard that they looked for virtues in Kevin Rudd that were never there.”

Malcolm Mackerras quotedin Daily Telegraph

Here let me quote Robert Manne’s essay Left, Right, Left that focuses on redeeming Rudd’s reputation and sheeting blame on Gillard and her backroom crew:

“The third strategic error of the Rudd government was to trust the Coalition and to cold-shoulder the Greens regarding negotiations leading towards its most important piece of legislation – the emissions trading scheme. Rudd placed faith in the capacity of Malcolm Turnbull to deliver bipartisan support. When Turnbull lost the Liberal Party leadership in November 2009, and when Tony Abbott made it clear that the Coalition would oppose the climate change legislation, the Rudd government began to lose its way. Rudd could have now opted for a double dissolution and negotiations with the Greens. Instead he allowed members of his cabinet – including his deputy, Julia Gillard – to talk him into postponing the emissions trading scheme for the next three years. Not only did it now seem as if Rudd believed in nothing. In considerable numbers left-leaning inner city voters now defected, probably permanently, to the Greens.”

Robert Manne 2011/12

The collapse in support, the diminished authority, and the creation of a war on two fronts created the crisis political conditions that would be replayed in several events during the crisis. Beneath it was a broader difficulty with the environmental policy agenda – its capture by economists like Garnaut and Martin Parkinson that stripped it of any political or public appeal, and turned it into a technical byzantine economist’s puzzle, not a question of political values. So, Rudd took the fall for the failure of bureaucratic, business and political elites to imagine a response to the “greatest moral challenge of our time” (another case of Rudd condemning himself with his fondness for grandiose, apocalyptic rhetoric) that connected with the life-world of the public. So, the trap was laid for a defining event of the crisis: Gillard’s missteps on the citizen’s assembly and the carbon tax.

The fifth and sixth events followed on from this as Rudd and Gillard desperately searched for a way to restore their lost authority: national health reform and the response to the Henry taxation review. Rudd engaged in a furious misadventure of PowerPoint driven policy, against a backdrop of his televised confession of failures, and lame attempt to connect with the felt language of the public. Remember “fair shake of the sauce bottle?”

Fifth, national health reform. The early part of 2010 was dominated by images of Rudd touring hospitals, demonstrating that he really understood their dilemmas and would present a plan “to fix” hospitals. Bureaucratic discussions were a vast guessing game. Did the PM really want to take responsibility for hospitals and did he actually understand the significance of that? What was the plan and when would anyone know anything apart from a few PowerPoint slides that might work well to sell a project at a top-tier consulting firm, but left unanswered the huge number of questions involved in redirecting health institutions and budgets.

Near his left or right shoulder on many of the missions to the Premiers was a bureaucrat Ben Rimmer, who was in charge of strategy and implementation in the Prime Minister’s Department. Mr Rimmer was good at cooking up hare-brained schemes and presenting himself to advisers as one of the new breed of “best and brightest” who would also do whatever it takes. Sadly his strategy was as confused as the PMs, and he knew nothing of implementation. So despite all the policy papers and COAG meetings and hospital tours (about which administrators still tell stories about bad-tempered stage management), Rudd’s national health reform delivered a lot of bureaucratic arrangements, even more confusion, and next to no tangible benefits to the public. It was yet another disastrous flop, yet another case of political over-reach and elite failure.

Sixth, the Henry tax review. Clearly today, for many of the economic policy elite, the Henry tax review is a bit like Fightback! the unacknowledged policy bible that governments are just too gutless to implement. It was born, so the mirages seemed, out of the Australia 2020 Summit, and took the remarkable step of asking the Head of Treasury to produce an independent report to Government. I am no tax or economic policy expert, but even I could see that having vested so much in this exercise to let it sit neglected in a Treasurer’s in-tray for months, and then produce an announcement that rejected pretty much the entirety of the report, but for a mining tax, looked weird, and appeared both confusing and confused.

Both the review authors and the Government had let each other down, and both forgotten that tax – and the values embedded in decisions about who pays and how – are in addition to complex policy tasks, deeply political judgements. The Rudd, Gillard and Swann crew, however, appeared to have no political strategy at all, and had even failed to consult properly both the mining interests and the state governments who inevitably would need to collaborate in the successful implementation of both the policy and the politics.

The chosen target also struck at the heart of the entrenched interests of the Labor party and the role of the AWU, and appeared to be a soft target for a reinvention of Labor traditions of attacking the “money power.” So Martin Ferguson remarked it was here that Labor developed its “class warfare” strategy, as some kind of pretence of the Government acting as David fighting the Goliaths of mining, when in fact they were simply being naive fools.

The final and seventh background event was the debate on immigration and cultural security. The debate on immigration and border security in Australia dismays me often. However, it is an enduring feature of our politics that is perhaps not surprising in an island country, whose cities cluster on the coast of an inhospitable and dry continent, and that as much as any affluent country experiences the deep cultural malaise that John Carroll describes in Ego and Soul: the modern west in search of meaning. Immigration politics also profoundly shapes the factions and internal politics of the Labor Party, and its regional expression, with the quite different experiences of say Victoria, Western Sydney and Queensland. It is further exacerbated by competing visions of business growth through population and old-style protectionist sentiments for the labor movement, especially those most exposed to skilled labour migration in the trades and semi-skilled occupations.

Holding these political, factional, policy, and cultural tensions in some kind of harmony is difficult for the Labor Party as an institution, made worse by its mythical excuse of political failure about losing the 2001 election due to the Tampa. Its poor capability of handling these values debates was through 2008-2010 exposed and tested over and over again by the border protection debates, the big Australia debate, and the wider cultural debate of the bogans vs cultural elite, that ultimately would be personified in the Rudd-Gillard battle.

Issues that may seem small in consequence (people would say there are only a small number of refugees why do we make so much of it) become bigger when they refract deep cultural fissures in our society. Yet again, policy elites showed little appreciation of imagining solutions that connected with the emotional lifeworld of the public, rather than technical policy interventions, even when sold as “breaking the people smuggler’s business model.”

So, in summary, these seven events, broke open Australia’s political institutions to a sustained crisis of authority and legitimacy. As a result of these interlinked events, by the first half of 2010, Australian political discussion had a strong meme of “Rudd the failure.” As an example, here is a Crikey piece from May 2010. A simple comparison with his Kevin ’07 plan for the future highlighted the difficulties. Yet now the politically fragmented, patrimonially factionalised and culturally adrift Labor party was to turn this man into a martyr, and to create a political crisis that today threatens the future of the party they lead. Part three of this series will discuss the events of the crisis.

The crisis in Australian politics 2010-2013

14 Apr 2013

So, we arrive at the crisis. But how might we define this term crisis? I am not going to pretend to have undertaken exhaustive research on how this term may be defined. I have done enough to know that it has a rich history, which in part can be traced by the importation of theological concepts of the Last Judgment into secular and political history, and by the use by utopian thinkers who themselves brought unrealistic concepts of politics and governing to their political imaginings, of a form of challenge that aspired to subvert the institutions they themselves were disconnected from.

My working definition of crisis is the situation of a complex system that is functioning poorly, for reasons that may not all be apparent to the agents within the system. The poor functioning provokes high levels of uncertainty and threat to high priority goals, and leads to agents within that system pressing for an immediate decision to prevent disintegration or downfall. Crises can often be described as total, involving all social systems. But the crisis I am describing is more limited and is quite specifically a crisis of the political party system that infected but did not subvert the wider political system.

Cue June 2010. The political miscalculations of the Rudd Government have exposed the poor functioning of the Labor party’s modern factional and policy forms. The Sunrise candidate is increasingly seen as parasite on the Labor party. As was said at the time, the only faction that supported Rudd was newspoll. The lack of defining ideas or institutional basis of support was exposed through the seven developments I have described. The pressure to act to save “a good government losing its way” grew.

But then the very weakness of the system outed itself to the public in the dark quiet savagery of Rudd’s execution. By acting against Rudd, the “faceless” power brokers acted against a parasite on their party, but exposed themselves as parasites on the political system. So they created themselves a crisis of legitimacy, which for the next three years they would pretend was a conspiracy of the mainstream media. So, rather than ending the poor functioning of the party and political systems, the coup only continued institutional failure by other means.

Policy misstep followed policy misstep not only because of the personal qualities of Gillard or Rudd (her political “tin ear”, his psychopathology), but because of the parasitical quality of the modern party political machine, lacking both the constraints and freedoms made possible by a deeper connections with social institutions or traditions of thought. Within weeks confected ideas of the political staffers and the illusions of the “masters of universe” had weakened Gillard’s authority or laid the basis for later policy failure – the East Timor proposal lasted barely a week, and the mining tax negotiations crippled revenue for years.

Accompanying all these mistakes, unmurdered Banquo whispered his dark poison. By the time Gillard called the election the problem of illegitimate authority was already apparent, but the unresolved crisis of legitimacy continued, and was exacerbated by the very poor performance of the disconnected political party elites. UK advisers and party loyalists created a confused and bizarre electoral proposition. Votes fell away with ridiculous proposals that seemed drawn from an episode of Hollowmen: the citizen’s assembly and cash for clunkers.

All the time, the conservative side of politics was burdened by the troubled sense of bad faith on greatest moral challenge of our time. So votes leaked to the Greens and the independents, as people felt unable to make a choice between viable options. The “plague on both their houses” syndrome, in fact, was its own form of delusion since it merely abandoned in exasperation the fundamental condition of governing – decision-making in constrained and unfavourable circumstances.

Then, remarkably, electoral maths equated with political uncertainty to deliver the hung parliament, and three years of dismal governing. Ultimately, it has been the last few months when the unresolved crisis of this form of party government has been spoken of most clearly by the combatants. Crean’s criticism of Gillard’s “tin ear” seems directed at her staffers who, despite Gillard listening and responding with “Mmmmm”, misdirect her from any true political judgment in favour of gimmicks, stunts and miscalculations designed to get a headline.

There is ever so slightly emerging a criticism similar to Keating’s labelling of Hawke’s Manchu court. A picture is emerging of a gang who are out of touch and disconnected from this country’s political and social traditions. This is not only a failure of the personal leaders and staffers, but of the institution that bred, installed and fostered them. So the crisis points clearly to a decision to end party government, and establish some other form of governing more deeply connected to social institutions and political associations.

For the time being, there is no doubt that the conservative side of politics will be the first to seize the opportunity to fashion such a model of government. There is something about Tony Abbott’s conservative background, his way with language, and his rootedness in the plain forms of Australia’s lifeworld that make me think he may be able to lead such a successful form of governing. Yet, conservative governments in the states and territories have failed to do so. It may be that an electoral defeat for the Labor party may bring on system change or even collapse within that institution, but leave unresolved the weaknesses of political legitimacy in the other parties. Or it may be that demotic forms of democratic politics – somewhat like those described by John Carroll – will refashion how Abbott and the Liberal party governs. We shall see soon enough, and a future post will examine if and how such a remoulding might occur.

Postscript in 2019

I have not changed these predictions though they proved wrong. The Abbott and Turnbull Governments exposed an ongoing political crisis and a broader institutional crisis of governing in Australia, and other post-democratic societies. Maybe Scott Morrison is the harbinger of the demotic forms of democratic politics – “the quiet Australians” and “how good is Australia” – but I am more uncertain about the future and my judgement of the present today than I was in 2013 August 2019

Image Credit: The Monthly Prime Minister Julia Gillard and Foreign Minister Kevin Rudd, 2010. © Alan Porritt / AAP Images