A small moment of truth

Saturday, 24 May 2008 

We are having one of those moments when we discover exactly what has happened to Australian politics over the last year.

Rudd’s assertion that there is little the government can do to cut petrol prices than ease pressure at the margins is now stating what the previous government could not bring itself to, that a modest-sized government like Australia’s is relatively powerless in the face of global pressures.

This may be stating the obvious, but has rarely ever been done in Australian politics – for a good reason. It is hard for a political class to have any authority if it admits it has limited influence. As long as governments had a political programme with a social base, there was a basis out in the electorate for arguing it could make a difference. The growing irrelevance of political parties for their respective traditional bases of support in the unions and employers brought that to an end and last year Rudd exposed Howard’s attempt to carry the traditional political framework on past its sell-by date. Rudd’s job since has been to reorganise Australian political institutions accordingly.

However, Rudd’s government rests on a gamble – that is possible to be more upfront about the limited role of government while still retain some credibility. This is the basis for the New Sensitivity, which says that even if a government cannot do much, it can at least empathise. The picking at the Budget by interest groups shows the limit of this approach as Rudd had no real political and economic message to put them in their place.

Nelson has now increased the pressure with his call to cut petrol excise. He has lobbed a little anti-politics hand grenade at the Rudd government that has forced Rudd to clarify what had been confused through talking up the ‘inflation crisis’ over the last few months, i.e. it is not really possible to have an economic policy, or do much of anything.

At this stage Rudd would seem to have two things that should help him. The first is the broad acceptance of the threat of global warming that places a straight-jacket of constraint over the political scene. Its effectiveness is shown by how easily Rudd can propose pushing petrol prices even higher as part of the programme to deal with climate change. This is the importance of the climate change agenda; it makes the constraints of government a global issue.

His second advantage is the opposition and its inability to deal with the anti-politics consequence of what Nelson is arguing. Nelson is effectively calling for the government to simply hand back money to the electorate. This has a logic of its own. After all, if 5 cents a litre helps, then the full 55c a litre the government takes in excise and GST certainly will. This would effectively be rolling back the state both fiscally and politically. This is supposed to be something conservatives are for but in reality are not. Tax cuts are only really to support business and cohere their middle class support base. It is why income tax cuts are always preferred over cutting revenue through direct taxes as well. After all, a large government is essential for an Australian business community heavily reliant on government subsidy. The tragedy for modern conservatives is that they can never be as radical as they say.

Winding up the function of government may be OK for a political nobody like Fielding but not for someone who is looking to lead the alternative government. This was why there was unease around Nelson with his proposal. Rudd has at least re-posed the government as a buffer against the cruel world. Shanahan may be right that the unease has gone quiet, but senior Liberals are more likely just to be waiting to see how the damage plays out rather than getting in behind Nelson (in fact Abbott’s comments in favour of Turnbull may be a sign of edginess). At a guess, if it goes wrong and Rudd regains control of the debate, it will be one mistake too many for Nelson.

Posted by The Piping Shrike on Saturday, 24 May 2008.

Filed under Tactics

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