Intoxicated with Power

Four years into the Rudd–Gillard Labor government, it is judged by the majority of the Australian people as a failure. Whether it stumbles to the next election in its current state, or manages to recover some of its lost direction, with Gillard, Rudd or someone else at the helm, history is likely to judge the experiment unkindly.

Why is this the case? What are the lessons we can draw from the experience? What will inform current and future political parties about how they should conduct themselves?

Much has been written about the personalities and ambitions of Rudd and Gillard. But there has been less analysis of why their approach to government has proven so inadequate.

It is worth beginning with the aspirations and ideas that Rudd and Gillard professed upon their entry into the national parliament. A member’s first speech—previously known as a maiden speech until political correctness intervened—is a set piece event. It is an opportunity for new members to set forth their ideals and objectives for their future parliamentary contributions. It is listened to without interjection. Often members from both sides of the House attend. Kevin Rudd and Julia Gillard delivered their first speeches on the same day—Remembrance Day 1998.

Rudd’s opening words starkly foretold his political style and manner: “Politics is about power. It is about the power of the state. It is about the power of the state as applied to individuals, the society in which they live and the economy in which they work.” This was the man who had been accustomed to wielding power as Cabinet Policy Secretary in Queensland. It spoke of a certain ruthlessness, a harking back to Machiavelli’s The Prince.

Rudd railed against the Howard government, describing it as a follower of Hobbes, Friedman, Hayek and Thatcher. He proposed that the government should regulate the market and intervene in areas such as industry policy. He opposed the GST, spoke of improving teachers’ salaries, and at length about his pet topic, foreign affairs.

Rudd quoted Keynes: “Practical men, who believe themselves to be exempt from any political influences, are usually the slave of some defunct economist.” Given his government’s Keynesian response to the global financial crisis, the reference can now be seen as full of irony.

In her speech, Gillard spoke about rapid economic restructuring and social change. In words that now jar, given her seeming preparedness to change her mind and policies so often in the decade since, she proclaimed: “The Australian people are looking for a return to passion and conviction in Australian politics and to the clear articulation of values. They rightly want to know what their politicians stand for, what we believe in and by what measures we are prepared to be judged.” She enthused about the role of universities and “the value of working collectively, of unionism” and “working for fair industrial laws”.

Rudd expanded his attack on capitalism in his notorious article in the Monthly in November 2006. Adopting the term “brutopia”—the name of a fictional country in several Donald Duck comics—Rudd condemned “unchecked market forces”. His sights were aimed at “neo-liberalism”, Friedrich Hayek, and any individual or institution that supported free enterprise, including Quadrant magazine. At a time when Rudd was actively pursuing the leadership of the Labor Party, his target was twofold: John Howard’s Coalition government, and the former union members of the Labor Party, whose votes he required to topple the Opposition Leader, Kim Beazley.

Howard’s defence of “democratic capitalism” was Rudd’s primary target. Rudd’s speech is replete with condemnations of “ruthless economic utilitarianism” and “rampant individualism”. Praising Deakinite liberalism, Rudd was positioning himself as a social democrat who would maintain the market but also uphold the social relationships of society. Rudd’s bold claim that social democracy would replace the “failed neo-liberal experiment” of the past thirty years and save capitalism looks somewhat tarnished now.

In the days of WorkChoices, it was a clever appeal to the members of parliament that Rudd was courting. It was also an appeal to the mainstream Australians whom Labor sought to cultivate. In the previous edition of the Monthly, Rudd campaigned for the Christian vote with appeals to social inclusion. As the former Labor senator John Black demonstrated, these appeals were successful, with many Christians swinging to Rudd in 2007.

Regrettably for Australia, Rudd’s approach also contained the seeds of his own destruction and the political stagnation the nation has suffered under the Labor government. Central amongst them was his conception that politics is about the power of the state to intervene in the economy. This had numerous dimensions. First, Rudd seemed intoxicated by power. There were many examples: calling public servants to his office at all times of day and night; keeping the chiefs of the defence forces waiting for hours outside his office; abusing a stewardess on a VIP flight because his preferred meal was unavailable. John Howard was reported to have said that Mr Rudd appeared like a man in love with being the Prime Minister. Forgetting that in the Westminster system a prime minister is “first amongst equals”, Rudd’s contempt extended to his own colleagues, as a backbench committee found when they went to see him about his decision to cut their printing allowance.

There is an intellectual pretension about Rudd. Consider the opening paragraph of his essay on the global financial crisis: “From time to time in human history there occur events of a truly seismic significance, events that mark a turning point between one epoch and the next, when one orthodoxy is overthrown and another takes its place.” Then there was his description of the introduction date for the Goods and Services Tax as “fundamental injustice day”.

Rudd seemed to believe that a rhetorical flourish or a grand gesture constituted good government. Hence the apology to the stolen generations: it was full of emotive language, but has achieved little for the wellbeing and welfare of indigenous Australians. As the continuing tragedy in the APY lands illustrates, indigenous health, education and workforce participation remain precarious for many Aboriginal people.

Centralised decision-making and an inadequate cabinet

The consequences went beyond style. Every government decision had to be channelled through Rudd’s office. Submissions piled up, decisions were delayed, and ministers were precluded from getting on with their jobs. As anecdotes sometimes capture situations better than other evidence, let me relate one. During a friendly conversation with a Rudd minister, he asked me how long it took for me, when a minister, to see John Howard. “An hour or two if the matter was urgent; a day or so if it was routine,” I replied. He responded that he had been attempting to see Rudd for three months!

The centralisation of power in Rudd’s office was compounded by the apparent abandonment of the cabinet processes that had worked well for most previous governments. Not since the first days of the Whitlam government, when Gough and his deputy, Lance Barnard, comprised the executive, had major decisions been concentrated in the hands of so few people. According to contemporary reports, a committee of Rudd, Gillard, the Treasurer Wayne Swan, and the Finance Minister Lindsay Tanner, took the decisions and simply reported them to the larger cabinet.

As Professor Patrick Weller observes in Critical Reflections on Australian Public Policy(2009) Australia has the most complete form of cabinet government of most nations that have inherited the Westminster tradition of parliamentary democracy. For past Australian governments, the cabinet met regularly and remained responsible for all the major decisions, at a federal, state and territory level. By contrast, in the UK and Canada, the cabinet meets infrequently and has little collective responsibility.

Weller suggests four reasons why the cabinet has retained a central role in the Australian polity while it has dissipated elsewhere. First, it has a representational role, especially of the various states in the national government. However, the fact that the cabinet also operates at a state level suggests that this is not a conclusive reason. The second reason is the Australian tradition of limiting the power of leaders. The third reason is practical: everyone works out of Parliament House. This is in contrast to the UK, for example, where ministers work from their departmental offices.

The key factor, according to Weller, is the fact that the caucus or party room elects the leader in Australia. This is no longer the case in Canada or the UK. The Australian Prime Minister or state Premier needs the continuing strong support of senior colleagues, hence the importance of cabinet. Keeping potential rivals in the cabinet commits them to the collective responsibility and solidarity of the group.

This is also true of the Opposition, although the caucus or party room assumes much greater significance when a party is out of government. An Opposition leader needs to ensure that his front bench reflects the views of his back bench if he wishes to avoid unnecessary conflict.

There is a further reason why cabinet has remained a central aspect of the Australian polity. Cabinet government works. Managed well, it cements together a group of individuals with a common cause. At its most basic, this cause is to retain government. At its highest, it is to make the country a better place and to achieve commonly supported reforms.

The ability to discuss and debate issues with colleagues in an environment of total confidentiality immeasurably improves the resulting decisions.

Rudd’s craving for personal power, and his confinement of decision-making to a small group, robbed the government of the important discussions that contribute to better outcomes. Would the pink batts fiasco or the cash-for-clunkers scheme have survived a proper cabinet process?

Anti-capitalism and reversing reform

Rudd’s tilt at free enterprise and his trust in Keynesian economics led to his government trashing not only some of the Howard government achievements, including a budget surplus, but also the Hawke–Keating legacy. As former New South Wales Labor Treasurer, Michael Costa, observed:

It was Rudd who undermined Labor’s economic credentials with his overblown anti-capitalist rhetoric and overcooked policy response to the global financial crisis. So desperate was he to avoid a small technical recession that he unleashed an undisciplined spending spree that, despite its Orwellian marketing, provided little in quality economic infrastructure. Rudd was able to manipulate the short-term quarterly economic data sufficiently to avoid a technical recession, but this manipulation has left Labor with the political legacy of programs such as Building the Education Revolution, the pink batts installation and cash-for-clunkers scheme, which have become synonymous (rightly or wrongly) in the public mind with government incompetence and mismanagement.

As Costa writes, this has had lasting adverse consequences:

The greatest long-term damage Rudd did to Labor was to overturn the successful Hawke–Keating government’s approach to economic management. The Hawke–Keating governments provided economic prosperity through competition policy, product market deregulation, strategic privatisation, flexible labour markets and targeted improvements to the social safety net. The Rudd–Gillard governments have resurrected discredited naive Keynesianism (stimulus and high levels of government spending), economic cargo cultism (big government funded projects such as the NBN) and labour market reregulation as the preferred approach to economic policy. In the public mind, the Rudd–Gillard governments are a rerun of the disastrous policy approach of the Whitlam government, without Gough Whitlam’s arguable defence that he was blind-sighted by stagflation.

The decision to introduce a carbon tax continues the pattern. Apart from the reversal of Julia Gillard’s promise not to introduce it, the folly of the carbon tax is that it abandons the consensus about free trade and tariffs that existed under the Hawke, Keating and Howard governments.

There are reforms that are more difficult for one side of politics than the other. But generally, the other party, on winning office, recognises the value of the reforms and chooses to improve, rather than repeal, them. The Hawke–Keating government, for example, was able to establish compulsory superannuation for workers and Medicare, which the Coalition ultimately endorsed. Equally, Labor accepted the GST reform, despite promising for a time to roll it back. Welfare reform, which Labor opposed in opposition, was accepted once they attained government.

In two significant areas, Labor changed this model. In both cases, Gillard claimed to have been the architect of the policy, although Rudd obviously endorsed it. First, instead of modifying the Coalition’s workplace relations scheme, for example, by resurrecting and expanding the “no disadvantage test”, Labor strengthened arbitration and collective bargaining, reversing not only the Howard scheme, but also the Hawke–Keating reforms. Second, Rudd promised to abandon the “Pacific solution” to asylum seekers, with disastrous consequences.

The absence of policies

Kevin Rudd took Labor to the 2007 election with virtually no policies, other than to abolish the Coalition’s workplace relations scheme, and abandon the “Pacific solution”. In other areas, he just adopted Coalition policy.

As a consequence, Labor had no clear vision or program for where it wanted to take the nation. Hundreds of reviews and committees were established to report back. The biggest of them all, a people’s summit, gathered a thousand people in Canberra for a talkfest. Rudd was eager as ever, photographed sitting on the floor with participants, but little came of the event.

Surprisingly, for a party that had been in opposition for over a decade, there was little policy direction to show. Swan and Tanner each wrote a book about policy, but the Labor Party did not appear to have used its time in opposition to develop an alternative program, other than rejecting some key Coalition directions. There is a lesson here for all oppositions. While Rudd, Gillard and others like Wayne Swan and Stephen Smith were relentless in their pursuit of the Howard government in the media, filling every opportunity they could, the equally important work of opposition, namely, developing policy, seems to have been neglected.

As the digital media expands, the opportunities for an opposition to comment increase significantly. But more talking heads do not constitute to a party ready to govern. It is a lesson that the current Opposition has not forgotten, although it excites little interest from the press gallery.

Beginning with Julie Bishop heading policy development, and then continuing under myself and Andrew Robb, the Coalition over four years has engaged in the arduous, time-consuming and little-remarked-upon task of reviewing all its policies. This has involved countless meetings with shadow ministers and backbench committees, openness to new ideas, a rigorous criterion for the acceptance or rejection of proposals, and a disciplined expenditure review process. Proposals were not automatically accepted because they came from a former cabinet minister, or rejected because they were suggested by a new backbencher. Rather they were judged on their merits in meeting the challenges facing Australia.

As Robert Menzies once observed, good politics reflect good policies. For years, we watched various state Opposition parties fail to develop and argue policies. The pattern repeated itself time and again. The new Opposition would spend a term bemoaning its loss, often suggesting that it had been robbed of the election. There would be an assumption that falling popularity would eventually cause the government to lose. While true in the long run, it usually meant that the Coalition remained in opposition for many more years than it would have been otherwise. As Menzies said:

Opposition gives more time for study and thought. It must be regarded as a great constructive period in the life of a party; properly considered, not a period in the wilderness, but a period of preparation of the high responsibilities which you hope will come.

While much of the blame for the failure of the Rudd–Gillard Labor administration seems to lie at the feet of Kevin Rudd, Julia Gillard was a central player throughout. She was a member of Rudd’s kitchen cabinet, she administered some of the poorly executed programs, she advised Rudd to reverse his carbon price proposals, and she claimed to have written the policy to abandon the “Pacific solution”. Gillard then negotiated the alliance with the Greens which has seen Labor captured by an extreme Left agenda.

There are lessons for political parties from the Rudd–Gillard experiment. The first is that the hard work of policy development is crucial for long-term success. Without vision, a nation drifts.

Second, collegiate decision-making through the cabinet and shadow cabinet process is an aid to good government and a vital check against poor outcomes.

Third, hard-won reforms should not be lightly overturned. In government, a party must have the strength to balance the sectional interests of its supporters against the long-term national interest.

Fourth, governing is much more difficult than opposing. It requires attention to detail and a preparedness to consider the unintended consequences of any policy or program. Rudd didn’t appeal to a policy or a governing agenda, but to a process of endless reviews. Gillard continued the approach.

Finally, a political party and its leadership need a clear set of principles upon which to fashion policy responses to arising issues. In the absence of a clearly articulated direction, parties will flip-flop on issues, to their detriment.

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