Opposition temporarily unites in an illusion of competence

23 May

Last night on Q&A, and since, Kevin Rudd has been suggesting that some elements in the current economic situation are not actually answerable to national governments and that the recent budget did all it could at this point — which, he went on, is not the end of the story… But he is right. One illusion the Howard government cherished and encouraged is that they were more in control of such things than they really were. Andrew Charlton exploded that one for me in Ozonomics: see my entry last year, and The Economic Myths of Peter Costello in The Monthly October 2007.

The discussion rages right now on Lateline: check it for yourself.

Anyone who seriously thinks Oil could reach $US200 a barrel, for example, would have been any different if John Howard had been re-elected is dreaming or smoking something funny. Honestly, does anyone seriously believe the Reserve Bank would have made different calls since November 2007, whoever was in government? I suggest Howard really should be thankful he can just enjoy the Cricket in the West Indies right now, without having to front the cameras.

And when Nelson and Turnbull can come up with something better than populist suggestions even Howard himself always regarded as bad policy, and can agree on something more than smart rhetoric and fiddling at the edges, then maybe they’ll deserve respect. At the moment they are an irritant pure and simple, and not part of any real solution — if indeed there is one, aside from patience and trying to keep a level head. That is what I think Rudd and company are actually trying to do.

They are a government, not a pack of magicians.


Cheaper fuel or costly cars the only options by Lenore Taylor in The Weekend Australian makes some useful observations.

The question is whether Nelson’s policy continues to look so shiny when the voters start to examine it more closely, or whether they will see it for what it is: populist and cheap. The political equivalent of bling.

Since Nelson made the promise in his budget-in-reply speech, petrol prices have already risen by twice as much as he is promising to cut them.

His response has been to say – over and over, to anyone willing to listen – that however high prices go, they would still be 5c cheaper under the Coalition. But, if we believe that Nelson and the policy will still be standing by the time of the next election, that could mean he will be traipsing across the country promising to bring petrol down to $1.95 a litre when it would otherwise be $2.

Will voters still be impressed or will they have figured out that the $1.8 billion or more a year the Coalition would be forgoing in revenue might be better spent on a longer-term solution? Particularly since by then the Coalition would have to reveal where it would get the money from. And when Labor is certain to be reminding voters that Nelson’s own shadow treasurer thought the 5c cut was bad policy. And that the Coalition thought the same during its 11 years in government and argued so quite convincingly.

John Howard and Peter Costello went as far as they could down the path to petrol populism in 2001 when – under intense political heat – they removed petrol excise indexation. But further than that they steadfastly refused to go, for very good reasons.

As Howard said in August 2006: “A petrol excise cut that would deliver a 10c per litre reduction in the petrol price would blow a hole of about $2.5 billion or more in the budget surplus and reduce our capacity to meet spending priorities in areas such as national security and health or to provide further tax relief.

“Given the volatility of oil prices, the benefit to the motorist of such an excise cut could be easily and quickly devoured.” …

Nelson had some good sound grabs when he was pressing the flesh with the Liberals’ candidate in the June 28 Gippsland by-election this week, where the Liberals’ campaign is gaining some momentum.

“Mr Rudd thinks that if you watch petrol it will bring the price down. It won’t. What we stand for is 5 1/2c a litre off the price of petrol at the pump. We stand for lower taxes, Mr Rudd stands for higher taxes,” he said.

If he does end up supporting new regulations to push people towards more fuel-efficient cars as an alternative to higher taxes on petrol, it sure would muddy that neat message. “Mr Rudd stands for higher taxes and I stand for more expensive cars” just doesn’t have the same ring to it at all.

Unless, of course, the Coalition advocates that nothing should be done about the greenhouse emissions from cars.

That’s not what Turnbull and Hunt have been suggesting.

And it surely couldn’t be the Coalition’s stance. That would be taking bling politics to Paris Hilton proportions.

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Posted by on May 23, 2008 in Australia, Australia and Australian, Brendan Nelson, John Howard, Kevin Rudd, Political, politics


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