Friday, September 17, 2010

Abbott needs a to-do list

The federal Liberals are making the same mistakes as the Victorian Liberal Party.  In 1999 after Jeff Kennett narrowly lost the state election, Liberal MPs assumed all they needed to do was wait.  They assumed voters would realise the mistake they had made in voting for Steve Bracks instead of Kennett and would return the Liberals to power at the first opportunity.

The theory was that the electorate would tire of a dysfunctional minority Labor government and that therefore the Liberals should not do anything to get themselves noticed for fear of diverting attention from the government.

We know how well that turned out.

More than a decade later the Victorian Liberals are still waiting.  But there was one thing the Liberals were right about.  The electorate did indeed tire of a minority Labor government.  And so at the 2002 state election a minority Labor government was voted out, and Victorians got a Labor government with a big majority in its own right.  The result was repeated at the 2006 election, and if the outcome of the federal poll is repeated at the state election in November Labor will win easily.

The point of this is that government won't fall into Tony Abbott's lap.  The Liberals can hope all they want that Kevin Rudd will become secretary general of the United Nation and cause a byelection which will somehow give them office, but it's only a hope.

The reality is that it's likely the Gillard government will run its three year term.  Obviously the independents don't want an election because they want to maintain their influence for as long as possible.  And in the case of the country independents they will need the full three years to convince their conservative-inclined electorates why they're supporting a left-leaning government.

Even if there is an election in a few months there's no guarantee Abbott (or whoever is Liberal leader at the time) would win.  Julia Gillard will have the advantage of incumbency.  And if somehow she manages to keep her rainbow coalition together she'll get credit from the media and the public.

Abbott should pick one or two policy areas and get back to basics.

Tax is the first place to start.  This election was the first in recent times when the major parties didn't offer personal income tax cuts.  Instead both parties offered reductions to company tax.  The Liberals have to ask themselves how this was allowed to happen.  The ALP's aversion to cutting personal income tax is genetic, but there was no reason why the Liberals had to automatically follow Labor's lead.

For his tax review, Ken Henry was told by Wayne Swan he was to ensure that the ''review's recommendations should not presume a smaller general government sector''.  It's a mystery why the Liberals were not more sceptical of the entire process of the review given that Henry and his taskforce were prevented from considering the question of whether to cut the size of government.

The whole review proceeded from the basis that the overall level of taxes would either have to be stable or increase.  At the very least the Liberals could have started a debate on the question of the sort of tax cuts we should have.  If we want to improve employment participation rates, personal income tax cuts should take precedence over cuts to company tax.  Then there's the ''productivity'' agenda.  Once upon a time (i.e. in the 1980s) ''productivity'' was about generating competition and providing consumer choice.  State utilities were sold and government monopolies were broken up.  Today when someone says they want to improve ''productivity'' they're usually demanding that government spend billions of dollars on a road or a port or a railway, or national broadband network that hasn't undergone a cost-benefit analysis.

In the United Kingdom the Tories ran an ambitious ''Big Society'' program with the aim of empowering individuals to make the decisions that had formerly been made by bureaucrats.

Given what he confronts, patience is not a virtue for Abbott.  Just saying ''no'' wasn't enough to win him the 2010 federal election and it won't be enough to win him the next one either.  He will need a positive policy agenda.  The idea of a ''positive policy agenda'' might be hackneyed, but it doesn't make it any less necessary.

It's not just the Victorian Liberals that Abbott should learn from.  In 1961 the ALP lost the election to Robert Menzies by one seat.  Labor had to wait another 11 years and another four elections before it formed government.


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