Empty barrel, most noise

Tuesday, 17 February 2009 

Courtesy: Crikey, Nine Network

Courtesy: Crikey, Nine Network

In April 2007, the Liberals used the kerfuffle over Rudd’s Anzac Day appearance to pull Hockey out of the slot they shared on Sunrise. It was a wise decision, given that Rudd was having Hockey for breakfast while the rest of the nation enjoyed theirs. To be fair, the Liberals weren’t to know they had pitted Hockey against a politician who is almost without peer in being able to appear in light shows like Sunrise, or even slightly debased ones like Rove, while maintaining the appropriate amount of dignity and authority. That Hockey finds it harder to do was confirmed a few weeks later when his impersonation of Shrek on Kerri-Anne Kennerley’s show gave delight to many of his Parliamentary colleagues, on both sides of the House.

As to how he would do as the economic spokesman, we had a glimpse last week against Tanner, where he was certainly the loudest, but still managed to get basic facts wrong. The fact that the Liberals have chosen someone who is a media performer, even if not always in a way that is best for credibility, rather than say, the one [update: of the few, it seems!] front-bencher actually with an economic background, speaks volumes for how they see their tactics going forward on what is supposed to be their most critical issue.

While building up for a while, Julie Bishop’s dumping from the shadow Treasury role comes directly from the unpleasant after-taste left over from Liberals’ opposition to the stimulus package over the last fortnight. It was a fortnight when the Liberals tried for purity, but achieved political impotence, as they found themselves detached from much of their business backing.

But even this might not have been anything than a medium term problem. No doubt business wants subsidy now. There is an argument, however, that this downturn will not necessarily pan out as one-sided as it is being currently portrayed. It may not just be a case of spending into deficit now and waiting for the upturn to pay it off.

The complication comes not from anything Australia does but from what happens if the world’s largest debtor, the US, finds the international financial arrangements are no longer in place to finance what is an unprecedented deficit. In other words, there is a potential for a ‘second phase’ in the downturn where global financial conditions could change sharply and undermine the credibility of those around the world who have been pushing fiscal stimulus packages. In that case, business here might be glad for a party that has the credibility to take over and implement tough measures.

In theory, then, there is a tactical argument for the Liberals opposing the package by claiming that the government is avoiding taking the tough decisions now at the risk of making things worse in the future. But the Liberals are too weak to argue for a tough line now, let alone in the future. They say that they are prepared to be unpopular, but they are not. The party is too incoherent and the leadership too insecure to sustain being on the wrong side of the polls for too long. To put it another way, it is inconceivable that Turnbull would be any less keen to throw money at the problem if he was PM than Rudd is now, or indeed Howard was in even better economic times.

That is why the Liberals kept on drifting off the message that the government is avoiding taking the tough decisions and end up arguing that it is not necessary to take any decision at all, since things probably won’t be that bad anyway. It was this for which Bishop was pilloried over the last week when she blurted out that it was best to ‘wait and see’ what would happen with the first stimulus rather than pass the second package.

But she was hardly alone. Hockey was arguing this exact same line ten weeks ago when he anticipated the Liberals opposing the second stimulus package:

TONY JONES: OK. If you’re actually arguing that they must refuse to do a stimulus package in this country that might put the economy into deficit, what’s your alternative? What plan do you put forward?

JOE HOCKEY: Well, the starting point is this: the first fiscal stimulus of $10.4 billion hasn’t even hit the economy. It hasn’t even happened yet. So now they’re talking about spending more money before the first tranche is actually delivered. The second thing is, the Reserve Bank still has cash rate at 5.25 per cent. Now, they’ve got tremendous capacity to stimulate the economy. Those two factors need to come into play. The third factor is we don’t know what trains are coming down the tunnel. So why are they asking the Australian people to go into Labor’s debt and deficit without telling us what they want to spend the money on.

This inability of the Liberals to hold an unpopular position is conveniently being forgotten by the right-wing press who like to dream about imaginary lines in the sand. In reality, at the moment the only thing the Liberals are interested in holding is themselves together. For Turnbull that means limiting the fall-out from Bishop’s resignation, which indirectly implicates his economic attack over the last fortnight as well as hers – even if it means making bogus offers to Costello to shut him up for a while. For the Liberals, it seems to mean promoting someone who can shout out the loudest that the government has no plan, but who is likely to not feel too introspective over the fact that he doesn’t have one either.

Posted by The Piping Shrike on Tuesday, 17 February 2009.

Filed under Tactics

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One response to “Empty barrel, most noise”

  1. John on 17th February 2009 1:11 pm

    Maybe Costello is waiting for the litigation by the HIH liquidator against the ex-merchant banker to play out.

    Mid last year rumours were being circulated that the legal action would be settled by Christmas.

    With the GFC and all that, Goldman Sachs is in no position to throw money at a settlement to ‘protect’ its reputation and that of the emb.

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