As 2011 opens, Labor is going to face that Julia Gillard’s biggest problem is a crisis of legitimacy.
Not the sort of legitimacy Tony Abbott was talking about in the weeks after the election: a government formed in a hung parliament is a valid government, and Gillard is as much a Prime Minister as any other prime minister.
But Julia Gillard commands neither influence over her colleagues, control over the processes of government, nor direction of the media cycle. In the months since taking the leadership, she has utterly failed to stamp the Government with her brand or even made clear her philosophy of government.
Everybody has noticed that the Gillard Government has no vision, but increasingly you have to wonder whether it has any purpose at all.
Kevin Rudd had an awful 2010, but his control over all these things in the first 18 months of his government shouldn’t be forgotten.
It was just the way Rudd achieved that control – the endless parade of announcements and policy revolutions that spectacularly blew up this year – that eventually did him in.
By contrast, Gillard’s leadership was precarious from its first moment. The leadership spill did more than install a new Prime Minister; it appears to have undermined the internal coherence of federal Labor’s parliamentary party.
The Greens have received the credit for the recent debate over gay marriage, but it wouldn’t have been possible if not for the erosion of Labor’s internal discipline in the wake of the spill. Gillard’s strong claim that she doesn’t support gay marriage did nothing to halt dissent from within her own government. She may have even stoked it.
It’s no longer fashionable to do so, but I still blame Rudd for Gillard’s problems.
Much was made of Gillard’s claim in an interview from Brussels that foreign policy was not her passion – education was. Yet education has been stubbornly out of the Prime Minister’s orbit since.
Rudd left so many balls in the air that Gillard’s first few months has been entirely focused on tackling them one by one.
Take the politics of asylum seekers. Rudd’s dithering between toughness and compassion throughout 2009 and his last months in 2010 left the Government with no coherent message to counter Abbott’s simple mantra.
Rudd then threw a bomb at Gillard in his penultimate press conference, incoherently and confusingly claiming that the leadership question was whether the Government should “lurch to the right” on asylum seekers.
Once she got the job, Gillard grasped a badly underdeveloped East Timor solution which didn’t seem to have left the whiteboard stage. (It’s only last week that East Timor received a document outlining the plan – five months after it was announced.)
And she struggled to demonstrate that her East Timor plan was at all different from the Pacific Solution her party had spent a decade condemning.
It’s not much better across the policy portfolios. The lavish Henry Tax Review has ended with the resignation of its author and a mining tax going into its third iteration. Gillard tried once to wrestle the mining tax down once before, but the drama looks to intrude well into the New Year.
Or a price on carbon. Gillard is committed to ambitious climate reform, we’re told. She’s just not entirely sure what that reform is yet. Perhaps it depends on Rob Oakeshott and Tony Windsor.
Gillard has struggled to balance these huge policy battles (you could also include health and water reform) with her avowed belief that Labor lost its way in July. She doesn’t want to abandon the appearance of reform zeal which Rudd cultivated, but knows those attempts at reform were the sources of the Government’s problems.
It leaves her government hesitant, cautious, and ever so slightly intimidated by its own policies.
The Government is deeply uncomfortable in its own skin, led by a Prime Minister whose principal qualification for leadership was being agreeable to union bosses and ALP heavies who felt neglected under Rudd.
That’s not to say Julia Gillard couldn’t have been a good Prime Minister – or even a great one – or that she couldn’t be one in the future. Right now there’s no reason to suspect this government won’t be able to survive a full term. She has time to grip the wheel of leadership.
But one thing is clear right now. Kevin Rudd’s problem was never just communication, although it must be comforting in Labor circles to imagine it was. Gillard’s struggle over the last few months surely has shown how much a fallacy that belief is: changing the messenger hasn’t helped at all.
It’s only become worse for the ALP. Tony Abbott is if anything much more electable than he was while Kevin Rudd was leader.
Hence Gillard’s legitimacy crisis. One by one, the justifications for July’s leadership spill have collapsed: the Government is less popular than it once was, it is no better managed, its suite of policies are no more coherent, accepted, or closer to implementation.
In 2010, Gillard was given the role of Prime Minister. In 2011, her goal must be to own it.
WikiLeaks’s release of American diplomatic cables “may put lives at risk”. The White House spokesman Robert Gibbs claims that the release may damage the “cause of human rights”. WikiLeaks’s actions are “reckless” and “dangerous”.
Sounds serious. But we’ve heard these claims before.
When each of the Afghan and Iraqi war logs were released earlier this year, US officials lined up to condemn the whistleblowing site in the strongest possible language. The Afghan documents, “put the lives of Americans at risk”, according to the US national security advisor. The Department of Defense said the Iraq files dump “could make our troops even more vulnerable to attack in the future”.
On Sunday night a Republican Senator from South Carolina wildly argued on Fox News that “The people at WikiLeaks could have blood on their hands.”
The operative word in that sentence is “could”.
Having lived with WikiLeaks’s release of the Iraq and Afghanistan war logs for months now, Pentagon officials concede there is no evidence that a single person has lost their life as a result. Not one.
And when requested in the lead up to the latest release, the State Department refused to guide WikiLeaks as to which documents should be redacted to protect against “significant risk of harm”.
Instead they insisted the site delete all the documents and forget it ever happened – something the messianic and volatile WikiLeaks head Julian Assange was quite unlikely to do.
Crazy-brave, with all those lives at stake. But more likely just a bad bluff. Major government departments aren’t good at poker.
The passionate assertions that national security will be compromised, that lives will be lost, that the cause of human rights will be set back: shameless, unadulterated hyperbole, by a government not even sure what’s about to be released. Transparent attempts to dissuade WikiLeaks from revealing uncomfortable material.
To take a random example out of the 243 documents released so far, it mustn’t be nice to have it publicly known US diplomats think Bavarian premier Horst Seehofer is “unpredictable” and has only “shallow foreign policy expertise”.
The full diplomatic archive of a quarter of a million documents will be released in dribs and drabs over the coming months.
Some of what we’ve seen is little more than banal gossip. Nobody needed leaked diplomatic communication to realise, say, Dmitry Medvedev “plays Robin to Putin’s Batman” as one cable put it, although it’s great fun to see it in an official document. Or that Kim Jong-Il is a “flabby old man”. That Silvio Berlusconi is “vain” with a “penchant for partying hard”. It will shock the international community to learn Hamid Karzai is “extremely weak”.
One overwhelming impression from the cables which have been released: professional diplomats are unimpressed by the politicians they’re compelled to work with. If only we could see their pens turned against their US political masters.
Other cables are more important, but still only embellish what we know already.
For instance: the US government has been trying to convince other countries to resettle its Guantanamo Bay detainees for years. But thanks to WikiLeaks we now know how desperate those US negotiators sound: officials tried to convince Belgium accepting prisoners would be “a low-cost way for Belgium to attain prominence in Europe”.
This is not materially new information. But it is more revealing than the sterile reports we’re familiar with.
After all, it is one thing to know the world’s superpower is negotiating to resettle detainees. It’s quite another to learn that the superpower sounds like an anxious salesman as it tries to do so. Or like a shonky political party treasurer selling tables to a fundraiser: Slovenia was told resettling a detainee would earn Slovenian leaders an audience with Barack Obama.
These cables further underline how the original decision to set up Guantanamo Bay dropped the US into a complicated long-term legal bind from which it is still struggling to extricate itself. It’s not revelatory. But the desperation is very, very revealing.
So too is the deep mistrust within the Middle East towards Iran.
Arab leaders in the region endlessly crow about Israel, but in private it is Iran they worry about. The cables vividly show that the leadership of Qatar, Abu Dhabi, Oman and Bahrain are all deeply concerned about Iran’s nuclear program. Saudi Arabia has been urging a US attack on Iran.
Analysts have been saying this for years, of course. But the unadorned cables make their points starkly and unambiguously.
Julian Assange is anti-war. But when the world reads the Egyptian president telling the US ambassador to only enter dialogue with Iran “so long as the [US] does not believe a word [the Iranians] say”, the case for dealing with Iran as soon as possible is strengthened, not weakened.
The documents are unlikely to damage America’s global reputation.
While foreign governments will kick up a fuss about what they read, they know how diplomacy works. They’re worried they could be the victims of the next WikiLeaks release.
Neither are they likely to be of great interest to foreign intelligence services. At a minimum, 3 million American soldiers and officials have access to the cables and the clearance to read them. That’s the security problem, not WikiLeaks. Let’s assume much of these cables have leaked before, just less publicly.
In the past, the US government itself made use of WikiLeaks to expose corruption and mismanagement in the United Nations. One of George Bush’s senior officials said in July, “Transparency and accountability in government and international institutions is a best practice and of great importance and WikiLeaks previously has been a force for good in the area.”
It must be harder to see the virtue of transparency when you’re the target.
If there was one area of human existence which should be left to individual choice, you’d think it would be what we eat.
So the National Preventive Health Agency Bill, now ferreting through federal parliament, is quite a big deal. The agency is charged with preventing chronic disease caused by obesity, alcohol and tobacco through education campaigns and the mass-production of research papers.
It sounds harmless, but if it passes, it will represent the institutionalisation of the Australian nanny state.
The agency is to be a government-funded body with the specific purpose of expanding the scope of government – colonise spheres of human existence that have, until now, been left free from state interference.
We got some indication of the ambition of the new agency from the Kevin Rudd’s Preventative Health Taskforce, which, when it reported in 2009, recommended its formation. That and 121 other recommendations to tax, regulate, and impose national standards on food, beverages, and tobacco.
Julia Gillard announced last week the agency will not have the power to impose taxes on junk food. But that misses the point: the agency has no power to impose taxes on anything. It will, however, be empowered to lobby the government incessantly to do so.
In the long run, the formation of a permanent institution like this is more pernicious than any individual nanny state tax the government might decide implement.
Last year the British government spent 38 million pounds funding institutions to lobby for new laws and regulations, according to a 2009 study by the Taxpayer’s Alliance.
When that government launched a public consultation on potential methods to control tobacco use in 2008, there were a massive 96,515 responses. But a full 70 per cent of those responses were email campaigns originating from government-funded lobbyists – bureaucratic offshoots from the United Kingdom’s National Health Service, like “D-MYST”, the youth wing of SmokeFree Liverpool.
The situation is already much the same here: submissions to the Preventative Health Taskforce were dominated by government-funded entities. Councils, non-profits, health networks, and university public health departments all submitted proposals for new laws – and more funding.
One of the key tasks of the new agency is to develop a “national prevention research infrastructure”.
Usually, more research into the social problems and policy effectiveness is good. You can never have too much research.
But much preventive health research is highly politicised, value-laden, and of use only to those who share its predetermined conclusions.
We’re all familiar with the regular announcements that alcohol use, for example, costs Australia an enormous amount of money every year. These massive numbers are described as “social costs”.
As the New Zealand economists Eric Crampton and Matt Burgess have shown, the methodology which underlines almost all of these social cost studies (one endorsed by the World Health Organisation) is fundamentally flawed.
They typically mix costs borne by private individuals and firms – like workplace absenteeism – with costs borne by government – like funding the health system.
But the more critical problem is the failure of these studies to adequately account for the benefits of “harmful” behaviour.
And humans like fat and salt and ale; that’s the way we’re wired. To look at only at the negative consequences of human behaviour without mentioning the positive consequences is rigging the game.
Health paternalists who propose government intervene in individual choices never make explicit the value judgements which inform their belief. After all, not everyone has maximum health and minimum risk as their overriding goal. (If they did, the automobile industry would disappear immediately.)
The National Preventive Health Agency cannot divine everybody’s personal, highly subjective values. For instance, how much they value their current selves (the immediate sensory pleasure of hot chips right now) compared to their future selves (the potential they will get fat if they consume too many hot chips).
But the public health community assumes the most “rational” decision in any circumstance is to favour your future health by limiting your present consumption.
And if you think otherwise, then, well, you’re wrong.
Many argue, pragmatically, that we need to interfere in individual decisions because we pay for them. Our public health system means that the cost of obesity is borne not just by the obese but by every taxpayer. It’s a fair concern.
But first of all, it’s not always true: particularly in the case of tobacco, where the taxes levied on cigarettes overwhelmingly exceed the costs smokers impose on the health system.
And the medical cost of obesity and alcohol is often mitigated by the unpleasant but nonetheless true observation that alcoholic and obese people tend not to live long enough to cost taxpayers as much as the healthy elderly. If you’re going to calculate the cost of individual choices to taxpayers, you should at least include all the data.
Nevertheless, this argument proves too much. Is government provided health care really incapable of coping with free will? So should we be changed to suit the health system – as the health paternalists would seem to suggest – or should the health system be changed to suit us?
If it wants to do its job properly, the National Preventive Health Agency will tackle these heady philosophical, economic and social questions.
I wouldn’t put money on that.
Instead, it’s a fair bet the agency’s output will be drearily predictable: inflated estimates of the costs of obesity, alcohol, and tobacco use, and incessant lobbying for new laws and regulations.
Over the past decade, the Greens have rebadged themselves as a polished and sophisticated third party. But their spat over the potential sale of the Australian Securities Exchange is a revealing one.
On Tuesday, Bob Brown announced his party has deep reservations about allowing the ASX to merge with the Singapore stock exchange. Brown says the merger may not be in the national interest, and Australia needs to protest the lack of Singaporean democracy and the execution of Australian citizen Nguyen Tuong Van in 2005.
The Greens leader is no doubt heartfelt about Singapore, which definitely has human rights problems. The death penalty is one. Its mandatory military service is another.
But his outrage about the ASX-Singapore merger is all too convenient. If you were to take Brown at his word, you’d have to assume he has been apoplectic over Optus’s prominence in Australia (Optus is owned by Singapore Telecommunications), and furious about American investment – last year, 52 people were executed in the US.
Instead, Brown’s symbolic stand on the ASX seems motivated by quite another thing entirely: a general opposition to foreign investment in Australia. Economist Wolfgang Kasper called this ”capital xenophobia” – the irrational fear of foreigners’ money.
Bob Brown would say the ASX is special, as Australia’s primary stock exchange, a privilege granted by government. But the government has already licensed another exchange. Chi-X will start trading in early 2011.
Foreign companies owning assets and operating businesses in Australia have to operate under Australian law, even if those companies are partly owned by foreign governments. That should be the end of the story.
The ASX sale may not go through. But it’s not the only foreign investment the Greens oppose. They want to limit foreign ownership of land and water to ”avoid exploitation”. As Greens Senator Christine Milne said in her July blog: ”Our children will never forgive us if we become tenant farmers in our own country.”
For years the Greens have stoked fears international investors might buy farms, claiming they threaten ”food security”. Perhaps, but only if you believe global trade is going to suddenly collapse and foreign investors flee the country, burning their crops as they go.
Despite their urbane and worldly image, and their compassion for the poor in developing countries, the Greens are oddly hostile to the world actually coming to Australia. They want to keep Australian stuff in Australian hands, paid for with Australian money.
The Greens seem to be motivated by a peculiar form of nationalism – it’s downbeat, stripped of any patriotism or even pride of country, and one which imagines the ideal Australia to be small, self-sufficient, and somewhat isolated.
Take, for instance, their attitude to immigration. They want Australia to accept more refugees, which is good. But they also want to reduce the total number of migrants coming into Australia by further limiting skilled migrant places. The world should keep its money and stay where it is.
Australia has one of the most restrictive foreign investment regimes in the OECD. The Financial Times described our system as a ”protectionist relic”.
The Australian and Singapore stock exchange merger will have to go through the Foreign Investment Review Board, which could easily recommend the government reject it.
Then it has to get past the Treasurer, who can knock it back if he determines the investment wouldn’t be good for the ”national interest”. (Read: ”for any reason whatsoever”.)
The economic consultancy ITS Global suggests we forgo $5.5 billion of investment every year because of this strict regime. That’s money which could have created jobs, and been used for innovation and training. And even been taxed.
Joe Hockey has also been asking Wayne Swan to explain why Australia should let the Singapore exchange buy the ASX.
Admittedly, this has not been Hockey’s best week. Yet on foreign investment, the Coalition and the Greens line up disconcertingly often. During the election campaign, Tony Abbott called on the government to monitor – with a view to limiting – foreign investment in farmland.
These announcements make the Coalition look like populists abandoning their lofty free-market principles.
But for the Greens, opposition to foreign ownership and immigration seems to be a key plank of their political philosophy.
It’s an odd sight to see the Liberal Party push for more regulation of the finance industry.
Joe Hockey said yesterday the Coalition would push for an inquiry into the finance sector, because the banks are “out of control”.
He has a big, bold plan – full of additional powers to regulators, increased scrutiny of bank profits, cracking down on what seems to be risky behaviour, and enlisting Australia Post as an outlet for small lenders. That’s a taste: it’s got nine points. The details will be earnestly debated.
Nevertheless, it seems strange to announce a policy two months after an election with more detail than most of the policies you took to the election.
And having banged on about the Rudd government’s never-ending series of inquiries, the opposition is now calling for one itself.
But, remember, last week Hockey was saying the government should regulate home loan interest rates. It can’t be a coincidence.
Politically, Hockey’s proposals are less about managing risk in the finance sector, and more about being tough on banks. Being tough on banks is very popular.
And as much as Hockey dresses it up, that popularity has nothing to do with the bank’s government guarantees, or the four pillars policy which makes the sector into a quasi-oligarchy.
According to a Galaxy poll commissioned by the Institute of Public Affairs in July, 59 per cent of voters want a super-profit tax levied on banks.
All treasurers and shadow treasurers love to threaten lending banks every time the Reserve Bank lifts interest rates. Afraid of criticising the Reserve itself – that would be an unsportsmanlike violation of central bank independence – the Big Four are fair rhetorical game for politicians wanting to demonstrate their concern for middle Australia.
Kevin Rudd once famously told Westpac to “have a good hard look at itself” after a rate rise. As hard as they try, moral suasion and confrontational language do not change household mortgage payments.
So banking is not well-loved.
Yet Hockey’s intimation last week that he wants to limit interest rates increases was not met with wide acclaim.
One colleague, mistaking it for a Greens proposal, called it a “lunatic, fringe-type” idea. Malcolm Turnbull took a different, but much more hurtful, tack. He adopted a tone of naive confusion, before belatedly backing the shadow treasurer.
Wayne Swan blusteringly compared Hockey to Hugo Chavez, as if his counterpart was one step away from shutting down critical television stations. And every second press article claimed Hockey’s views were a direct repudiation of the Liberal Party’s “free market principles”.
I put that phrase in quote marks because that’s where it gets tricky.
Hockey’s push against banks clearly illustrates the Liberal Party’s uncomfortable balancing act. In opposition, it flirts with economic populism, but can’t quite bring itself to travel down that dark road.
We saw this play out a fortnight ago as well. Shadow finance spokesman Andrew Robb started to talk about using the levers of government to modify our exchange rate. As colleagues publicly proclaimed their confusion, Robb backed away from that one too.
Now both Robb and Hockey are searching around for legislative mechanisms to achieve policy goals that a) don’t get them branded as economic interventionists and b) don’t sound idiotic.
It’s all about finding the right “levers” – a strange word which seems to imply that governing is like running a factory for the first time. Robb and Hockey seem to be hoping there are levers the previous factory owners didn’t know about.
Of course, there are none. Hence the policy confusion of the last two weeks.
In a way, Labor had the same problem. They went to the 2007 election promising to ease cost of living pressures. But there really wasn’t anything Labor could do about prices at the supermarket and bowser; Kevin Rudd settled on the feeble GroceryChoice and Fuel Watch instead.
The Liberal Party has a harder time at this cheap economic populism, because they’re supposed to be, well, “liberal”. Certainly, on balance, the Liberals tend to favour more market oriented solutions to policy issues. And often the party leans towards smaller government than the Labor Party. They usually oppose more regulation, and propose more tax cuts.
But we can all think of dozens of exceptions to the Liberal Party’s free market inclination.
The purpose of a political party is to get elected. And the free market approach to public policy is an unpopular one. This is true across any number of policy areas. If the great financial reforms of the 1980s had gone to a referendum, they would have been rejected. A party that cuts the size of government usually cuts the size of their approval ratings.
Voters are hypocrites: they hate bureaucratic busybodies, but want government to solve their problems. They think there are too many laws, but think there should be a law to fix everything.
Obviously, it’s an ideological minefield out there.
If the last two weeks have shown us anything, it’s a minefield Joe Hockey and Andrew Robb are struggling to navigate.
Novelists often have strongly held political views. Nobel Prize-winning novelists are obviously no exception.
But what is surprising about the winner of this year’s Nobel Prize for Literature, the Peruvian Mario Vargas Llosa, is just what those political views entail. Vargas Llosa is a classical liberal. With varying degrees of sympathy, Australians might call his politics free market liberalism, libertarianism, or neo-liberalism.
In other words, he’s a supporter of liberty. And not in the vague, collectivist sense offered by those who speak of freedom as taking control of the state for their own purposes. But in the individual sense. Vargas Llosa supports low taxes, limited government, private property, and free markets. He’s even a fan of business, describing it in a 2003 essay as a “beneficent institution of development and progress”.
While most commentary has mentioned Vargas Llosa’s strong political beliefs in passing, his politics is more than incidental to his life and work. He won the Nobel “for his cartography of structures of power and his trenchant images of the individual’s resistance, revolt, and defeat”. The thread which ties his novels together is the human desire for freedom, and many of his essays and non-fiction work apply liberal philosophy to Latin American politics.
One of the earlier political controversies he engaged as a liberal was opposing the nationalisation of the Peru’s banks by president Alan García in 1987. García, who has had a second term as president since 2006, now celebrates Vargas Llosa’s Nobel win.
On the back of that campaign, and with a new liberal political party, Vargas Llosa ran for the Peruvian presidency in 1990. He lost.
Since then he has been Peru’s most prominent and fearsome advocate for individual liberty and liberal democracy. His influence in Peru is so substantial he triggered a ministerial ousting last month when he resigned from a museum committee to protest a new law excusing human rights abuses under Alberto Fujimori, Peru’s president during the 1990s. Fujimori is now in jail, but has many allies in Peruvian politics.
Vargas Llosa has had a long running stoush with Cuba’s Fidel Castro, and Venezuela’s Hugo Chavez, describing the latter as autocratic. He has close relationships with free market think tanks in Latin America, in the United States and around the world.
That’s his political credentials. But why are they so surprising? Vargas Llosa has just won one of the highest prizes for literature. There’s been speculation his political views meant he didn’t get the Nobel earlier.
We seem to presume that culture is the sole responsibility of the left. Perhaps justifiably: I don’t think it’s overgeneralising to say the majority of artists, actors, writers and musicians profess near uniformly social democratic views.
The Argentinian writer Luisa Valenzuela said Vargas Llosa’s liberal politics “stains his literature”.
Liberalism is easily caricatured. First as a political philosophy of cruelty that believes all people should be subjected to the harsh storm of the marketplace. Only those who manage not to drown deserve to survive. Or alternatively, as a dictatorship of the accountants, obsessed with efficiency and streamlining above all human concerns.
Against these caricatures, liberalism’s critics offer a vision of a society built on compassion and cooperation. And this vision is easy to sentimentalise.
Certainly, liberalism resists collective goals. As a philosophy it provides no support for the pursuit of national greatness, which throughout history has been the source of much romantic sentiment. So liberals struggle to tell “national” stories as they are sceptical that artificial collectives like the nation have any real moral agency. Only individuals do.
In 1997, Vargas Llosa told the Los Angeles Times that the great battle of the future was the “battle against borders, against this provincial, small, petty vision that defines a human being through the idea of a nation”.
Vargas Llosa’s achievement is to show that liberalism has its own romantic elements. Individual liberty is as much a cultural achievement as a political one. When individuals are able to pursue their own goals, free from the structures of the state or the collective, they are able to self-actualise – to realise their own potential and live their preferred life.
It was, after all, the development of individualism that provided the spark for modernity. The great Swiss historian Jacob Burckhardt argued the cultural and philosophical achievements of the Italian Renaissance were largely attributable to the idea of the individual as a unit. It’s easy to trace this idea through history to the 21st century political philosophy espoused by liberals like Vargas Llosa.
Last week the Mexican historian Enrique Krauze described Vargas Llosa’s win as “an act of justice toward literature and toward liberty. They are two inseparable words”.
If nothing else, his deserved Nobel Prize should remind us that culture, art, and creativity are not just franchises of left-wing politics. Individual liberty has the capacity to stir the heart as much as collectivism.