Friday, September 18, 2009

Big government no answer

A BBC poll released on Sunday indicates Kevin Rudd's approval rating for the way he's handled the financial crisis is the second highest in the world 8 per cent of Australians are satisfied with the actions he's taken to address the crisis.

Only the Chinese gave their leaders a higher rating than we gave our Prime Minister.  After the Chinese and Australians, those most satisfied with what their leaders were doing were the Egyptians, Brazilians and Indonesians.

In the United States only 49 per cent of people were satisfied with Barack Obama's administration and in Britain 35 per cent of people approved of Gordon Brown's response to the crisis.

The BBC also asked about attitudes to things like government regulation.  The results are stark:  67 per cent of Australians want more of it.  We're up there with the French and the Germans as the most enthusiastic supporters of government control of the economy.  In France, 67 per cent want more regulation and in Germany the figure is 65 percent.

The figures for those opposing additional regulation are revealing.  In Australia only 26 per cent object to further regulation of the economy, compared with 45 per cent in the US and 37 per cent in Britain.

So much for the supposed great "neo-liberal triumph" of the past two decades.  If neo-liberalism did indeed triumph there's not much to show for it -- at least in terms of public support for it.  In 1986 John Howard pronounced "the times will suit me".  And they did.  In 2009, in the wake of the global financial crisis, the times suit Rudd.  All the opinion polls tell us Australians seem to welcome a former state government bureaucrat who regards micro-managing the Australian economy as not very different from micro-managing a premier's office.

Until 12 months ago, reform meant reducing the role of government and allowing competition and markets to operate.  These days when ministers talk of reform they mean more regulation, more rules and more government.

Last week the Prime Minister said he wanted to "apply the tradition of reforming centre" in the areas of education, infrastructure, communications and tax.  But in each of the first three areas his recipe for reform has nothing to do with deregulation.  Rather, his aim is to put the government back in the middle of education, infrastructure and communications.

In education, for example, a major plank of the "education revolution" is a federal government-imposed, Canberra-approved curriculum for every school in the country.

In infrastructure a government appointed committee decides what is going to be built and how.

In communications, in the government's own words, "the biggest reform in telecommunications in two decades" is setting up a broadband network owned and operated by the government at a cost of $43 billion.  To support the promised broadband network, the government announced this week it would-in effect require Telstra to split itself in half.

Regardless of the merits of structural separation, it must be remembered the government no longer owns Telstra.  Telstra is a public company with 1.5 million shareholders.  (The equinaminty with which Australia's boardrooms appear to have greeted the government's decision is astounding.  Presumably, corporate leaders assume what's happened to Telstra will never happen to them).

Tax is the final province of Rudd's "reforming centre".  The problem is his track record of reform doesn't inspire much confidence.  We don't really know the principles guiding the government's review of the tax system.  The requirement that the review "should make coherent recommendations to enhance overall economic, social and environmental wellbeing" is so vague as to be almost meaningless.

There's no indication the PM has any intention of cutting the government's overall tax take.  What we're most likely to get is some sort of reshuffling of the tax burden because, in the face of a potential decade-long budget deficit, there's little scope to reduce tax.  If the Treasury gets its way and cuts the corporate tax rate, we'll end up with a different tax system, but not real reform.

Tax and cutting tax gives Opposition Leader Malcolm Turnbull the chance to talk about something that isn't Work Choices or the emissions trading scheme.  As the BBC survey shows, it will be no easy task convincing the electorate that government has grown too big, and should stop growing.  But at the very least the electorate has to be given an alternative.


ADVERTISEMENT

No comments: