The Day The Right Died

Monday, 27 October 2008 

You can always rely on a Senator to give an idea of the mood inside the party because these strange political functionaries owe their existence more to internal dynamics in their own party than the electorate. The public stoning of Dr Henry in Wednesday’s Senate hearing and George Brandis’s bizarre behaviour on Lateline on Friday shows that the coalition had more in mind than political point-scoring last week.

There is a basic misconception that Turnbull’s call for Dr Henry to be sacked on Tuesday was no more than a slip of the tongue that was twisted by Rudd. If so, why didn’t Turnbull tell coalition senators to ease off when interrogating Henry on Wednesday? If the issue was really that Rudd didn’t take enough advice from Stevens, why did a Liberal backbencher then attack the RBA Governor’s own handling of the crisis at the end of the week?

What we have seen in the last week is the coalition trying to wriggle out of its support for a bail-out package that went against the core of what they are about. For several decades following the Great Depression, direct pump-priming by the government was seen as an acceptable way of maintaining growth. It was accepted on both sides of politics, especially Menzies through the 1950s and 1960s. It wasn’t until Whitlam in the 1970s when, both here and elsewhere in the world, that it started to lose effectiveness as an economic tool.

Since then the mainstream Right have defined themselves by leading the charge against government spending as an economic cure. It was something eventually accepted by Labor as well, reaching its apogee at last year’s Labor campaign launch when Rudd told the party “this reckless spending must stop”.

In reality it didn’t spell the end of the government’s economic role, far from it. But it was now directed at more structural issues, like dealing with the unions, subsidising business indirectly through public-private ‘partnerships’ and laying the framework for the expansion of credit through the financial markets. All the while the right portrayed it as vindication of their side of politics. A con trick, no doubt, but as Howard did so well, he could carry out record high spending and still make George Brandis think he was a free marketer.

No longer. The financial crisis has changed that and now the government is taking an upfront role in the financial system and back to pump-priming the economy. And the Liberals have agreed to it. It wasn’t even so much that they supported the bank guarantees and the $10.4bn package, but that they think it will work. If, according to the right, interfering directly with the financial markets and printing money to boost spending is wrong in ordinary times, why is it acceptable during an economic crisis? Surely it would make it worse, according to them.

This has come only months after the Liberals were already facing an identity crisis from having finally had to accept that their anti-union agenda is irrelevant a decade after it actually was. If the Liberals aren’t about keeping the unions under check, opposing government spending and allowing free financial markets, what are they for?

The dilemma for the Liberals now is that they may not be happy with what they have just supported, but they had no choice. It is not because Rudd’s measures will necessarily work. In fact, a government that is so unsure of itself that it feels the need to look decisive for its own sake and hide behind the advice of bureaucrats when it does so, may not be best for restoring confidence in the markets. But whatever problems the intervention causes, the direction is now only one way, more government intervention to solve it.

That is why whenever the critics on the Right are asked for their alternative, like Bolt was on yesterday’s Insiders, they have nothing to say. Instead with no alternative, and no way back, we have this furious attack on process, who said what to whom and when, but getting caught up in contradictions as they do so. So they were claiming that the government didn’t seek advice while attacking the integrity of those they would have got advice from. Accusing the government of being too quick to act and delaying too long. Indeed, the Liberals and The Australian have been so quick to find a breakdown in procedure that they have even got tangled up in claims that the government ignored advice from the RBA before guaranteeing bank deposits based on a letter written by Stevens a week after they made the decision.

Throughout the mess, the Liberals have revealed their dislike of the government bureaucracy. As Australia’s last political party, the Liberals are less comfortable than Labor about the decisions of government taken out of the hands of politicians and, given that they are at least elected, they do have a point. But it is an abstract one since political parties don’t especially represent anything much in Australian society these days anyway. That is why, whether Liberal or Labor, they will inevitably have to hide behind the bureaucrats for authority. George Brandis, after having just been involved in attacking the Secretary of the Treasury, was quickly deflated in the middle of his rant on Friday night when asked by Lateline’s Leigh Sales what the coalition’s attitude was to the government’s revised policy. He had no view than to say they would wait until they had heard from Treasury and the RBA.

Posted by The Piping Shrike on Monday, 27 October 2008.

Filed under Key posts, State of the parties

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