The coalition came close to winning government last month and should hang on to its current policies.
BY CONTRAST with the 1990 election held in the early stages of recession, the March 1993 election was not a good one to lose. Many major overseas economies continue to struggle but, with luck, the worst of the debt-overhang problems from the spending extravaganza of the 1980s may now be passing, both here and overseas. Growth and employment will be slow to recover, and unemployment is likely to remain considerably higher than in the 1980s.
But if the right policies are followed, the Government should be able to capitalise on the dramatic reduction in cost levels wrought by the recession and make Australia a truly cost-competitive country internationally. Given the policies, Labor could enter the 1996 election with the economy moving to sustainable higher growth and the coalition could be struggling for the rest of the 1990s.
This raises the question, which both political parties face: what are those "right" policies? In his article (The Age, 30/3), Robert Manne categorised alternatives which implied that the Liberals have five options -- no change, no change except for the GST, warm and dry, social conservatism with economic rationalism, and new protectionism.
These possibilities -- and more -- seem to have been reflected in last week's Liberal postmortem. Manne himself obviously favours new protectionism, which without offering evidence he weirdly suggests is "more likely to appeal to the more open-minded and pragmatic members of the younger Liberal generation".
One trouble with such simple classifications is that they focus on points of difference within the coalition and between it and Labor, as well as on minority viewpoints, and they ignore the considerable amount of common ground.
IT IS laughable to suggest, for example, that the Liberals have "been in the hands of a group of radical free-marketeers" for the past 10 years.
Libertarians would certainly be astonished to learn that Dr Manne also puts me in that category.
Manne's attempts to brush aside the main cause of the election defeat are also unconvincing. Very few now disagree that, without the 15 per cent GST, the coalition would have won the election.
That they got so close even with the GST (only 1500 votes short across eight marginal seats) surely confirms that, after 10 years in office, with a million unemployed and a net foreign debt of $168 billion, Labor would have lost convincingly without the GST.
This is not to say that the rest of the coalition's policies were all appropriately framed, or trouble-free from a political viewpoint. For one thing, without the authority of government and public service back-up, the coalition was unwise to offer so much detail. With Dr Hewson expending so much energy defending the GST, the benefits of other policies were also undersold.
But the explosion of analyses by people on the right of politics since the election may largely be redundant anyway. As Mr Keating said on election eve: "There is no question about change. I have no doubt Australians are tired of it, but equally I have no doubt they accept the need for it."
The art of politics is to find the middle ground. Mr Keating's record suggests that he is likely to seek the middle ground in economic policy by moving ahead with structural change in industrial relations, government services and industry protection to improve productivity and increase Australia's competitiveness.
A recent report to the Business Council of Australia showed that average productivity levels in Australia's leading companies are 25 to 50 per cent below world-best practice and that since 1988 there has been no closing of this "productivity gap".
It concluded that, notwithstanding moves in the right direction, the present industrial relations system does not allow business to make the changes needed to catch up.
BECAUSE of its close links with unions, Labor has found it difficult to break down their privileged position in industrial relations and associated arrangements.
While Mr Keating has consistently argued that it is Labor that "dragged" Australia out of isolation into the global economy, in practice structural reform under Labor was slow, piecemeal and continually retarded by union resistance.
Now, however, Mr Keating sees himself as "emperor" riding an invigorated and competitive economy horse into South-East Asia. He will have to apply the whip and possibly even the spurs to unions, business and government.
To the extent that Mr Keating steals the structural-change clothes of Fightback, this could be the central problem faced by the coalition.
Indeed, unless Labor presses ahead with structural reforms on a broad front, our economy will remain relatively stagnant because it will not attract the business investment necessary for improved living standards and lower unemployment.
In the new reality of the global economy -- a reality which has passed the new protectionists by -- competitiveness is the name of the game.
Witness the recent comments by the chairman of Amcor, Stan Wallis, and the latest developments at Heinz, indicating that Australia is not competitive for the international capital dollar.
What this suggests is that, if they are to stand a chance in 1996, the coalition parties will have little practical choice but to advocate most of the Fightback reforms -- but by another name.
With Labor pursuing structural reforms in a corporatist-centralist vein, the only real alternative for the coalition will be to argue for a more market-oriented, less government-interventionist strategy on grounds of efficiency, equity and freedom from Big Brother in Canberra.
If they adopt a strategy of more government intervention and a return to the past, the coalition will simply become irrelevant.
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