A whole new ball game

Monday, 21 January 2008 

Wayne Swan must be a deeply worried man.

After telling anyone who’ll listen there is an economic crisis (coming? here already?), the person with most control over economic policy doesn’t seem to agree. In a speech in London on Friday, the Governor of the RBA, Glenn Stevens, gave a much more sanguine view of Australia’s economic outlook. Stevens thinks we should be reasonably insulated from the US’s financial problems. Indeed the credit crunch’s forcing up of bank rates should be helpful against inflation, a trade-off that is largely being ignored in the media. Inflation is still reckoned to be “uncomfortably high in the near term” (i.e. above 3%), but he gave no sign that the outlook had deteriorated since December, as Swan is now suggesting. What Stevens does highlight, that this government knows perfectly well, is that the Keating/Hawke labour reforms will help absorb any inflationary shock.

Of course in reality Swan is not worried because he knows they are doing different jobs. Stevens’ job is to manage monetary policy and reassure the financial markets. Swan’s job is to give the Labor leadership the justification for a political clampdown on the party’s spending agenda. This was why Rudd and Swan took the unusual step of making a big public show of meeting the RBA’s deputy Governor while his boss was giving a much more realistic appraisal overseas. If it was a real economic crisis we wouldn’t be getting $31bn of tax cuts, which was a campaign promise made a couple of weeks before Howard desperately tried scaring the electorate over the economy. There is now a danger that Rudd’s internal need to perpetuate this fake crisis will begin to look like panic. However, given it was Howard that started this whole economic crisis pantomime to attack Labor, it will be difficult for the Liberals to have a go at Rudd as he uses economic scares for exactly the same purpose.

But scoring points over the economy will be the least of the Liberals’ problems. Nelson has been asking why it will be so long before Parliament finally resumes. It is because Rudd is in the process of changing the rules of Australian politics and that involves first sorting out his own side before dealing with them.

The new game is anti-politics. It is why Rudd dragged the Ministry in front of the public in Perth on the weekend. The political message is similar to that when he sent the parliamentary party out to homeless shelters and schools soon after coming into office. Politicians are inherently out of touch. When Rudd said in Perth, “Governments that remain in touch with the people, deliver the best services to the people”, it sums up the credo: 1) government is more about providing services than fulfilling some party’s agenda and 2) all of the functions of the bureaucracy and party do not enable politicians to keep in touch, requiring them to hold public meetings to find out what is going on.

Saying government is about providing services is what state government has now become and it is not surprising they already do these cabinet roadshows (e.g. in Victoria). Saying that the government is not necessarily in touch even as it is just taking power is really suggesting politics and the apparatus of the state as they exist are dysfunctional.

This second point is a big concession and it is interesting to wonder how much senior members in the party are on board with this idea, given an intriguing incident during the Perth visit. Jason Koutsoukis’s ambitions to be the Dennis Shanahan of the new government took a bit of a blow over the weekend. It seems his careful cultivating of Labor contacts over the last year let him astray on rumours that Beazley was to be appointed the next G-G. By Sunday morning, the Fairfax sites were getting pretty definite on the appointment with the SMH’s running the headline “Beazley Set for the Job”. This suggests that the push for the appointment was coming from fairly high up in Labor with Faulkner being one of those mentioned.

In the past, the idea of Beazley getting the job would have been feasible, he’s harmless enough. Not under the new regime, however. By Sunday lunchtime Rudd was making clear that whoever it would be, it will not be a politician, either past or present. The days when the political class could think themselves worthy enough to be the figurehead of Australia look to be over.

Posted by The Piping Shrike on Monday, 21 January 2008.

Filed under Tactics

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