In the past few days we've learnt that Kevin Rudd doesn't much like what he calls "free-market fundamentalism". It seems, though, that the Prime Minister doesn't have too many qualms about crony capitalism or perfunctory parliamentary processes.
Trying to work out what the Prime Minister believes in is these days a difficult task. As a few dozen political commentators have pointed out, the sentiments expressed by Rudd in his 7700-word essay in The Monthly are quite different from what he was saying a few months ago. And his sentiments are different from those of his ministers.
He argues in his essay that the Liberal Party is the party of "anti-regulation". This sits a little uncomfortably with the remarks of his Treasurer, who on numerous occasions has praised the quality of Australia's system of financial regulation. It is a system that Labor inherited from John Howard and Peter Costello.
Given the country's economic condition, trying to decipher the Prime Minister's cryptic utterances is a less urgent task than assessing the merits of his government's policies.
A fortnight ago we had the spectacle of the federal government dragooning Australia's four major banks into a rescue package for commercial property developers.
Picking and choosing which industries the government will spend taxpayers' money bailing out is a perilous undertaking at the best of times. Taxpayers might, with some justification, be somewhat skeptical about the motivations behind the rescue package.
The fact that trade union-aligned superannuation funds have substantial investments in commercial property may not have crossed the minds of ministers when they decided to offer government loans to property developers. And it may be a complete coincidence that the sector of the construction industry that was rescued has a unionised workforce, while residential property, which is largely non-union, was not rescued.
The Prime Minister's demand on Wednesday that the Senate authorise $42 billion of spending within 48 hours of the government's announcement would be laughable if only it were a laughing matter. The problem is that he was serious. For the 11 years of the Howard government Labor made much of the need for the Senate to operate as a house of review and as a check on untrammelled executive authority. It's taken a year for Labor to change its tune.
The government's excuse for rushing the legislation through the parliament is that the global economic crisis is serious and it requires a timely response. Yes, the global economic crisis is serious, and, yes, it does require a timely response. Recovery will not be imperilled by having a few days of thoughtful analysis and debate. A few days of delay will also help the government find the typos. According to Bob Brown, a defence housing program worth $252 million appears as a $2.42 billion program in the legislation. Maybe the Greens serve a purpose after all.
Labor seems to believe that avoiding a recession is a question of acting within hours. Maybe you can run a political campaign according to the news cycle, but that's no way to run an economy.
It was predictable that those lobby groups in thrall to the government would welcome the stimulus package.
The fact that the package did little to reduce the costs of doing business and little to encourage firms to retain existing staff or hire new staff didn't seem to bother the business lobby. Also predictable is that the business lobby will do what Treasurer Wayne Swan is urging it to do and tell Opposition Leader Malcolm Turnbull to reverse his decision to block the package. Once upon a time the business lobby worried about government debt and budget deficits. Turnbull should ignore the business lobby.
The stimulus package is about short term politics; it is not about long-term recovery. Put simply, if the government is going to blow the budget, then at least the money should be spent on something useful.
Encouraging more consumer spending with cash handouts will do nothing to make the economy more productive.
Worse, it perpetuates the middle-class tax and welfare churn. More money for school maintenance provides politicians with photo opportunities, but it doesn't address the central issue in education, which is how to improve the quality of our teachers.
From the time Rudd became opposition leader in December 2006, his strategy was to have an economic policy as close to the coalition's as possible. Rudd has abandoned that strategy. The phony war between Labor and the coalition is now over.
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