Tuesday, December 05, 2006

Laboring on Rudd

Kevin Rudd has obvious intellect and ability – he is a decent family man, works hard and is well-educated. His presence as Labor Party leader helps to make Federal politics in Australia competitive again particularly if Peter Costello takes over and if ‘ideas people’ in the Labor Party gain decent shadow portfolios.

But despite Rudd’s claim that he will ‘run the show’ the early signs are not good that this will happen. He has, for example, indicated that he will continue with Beazley’s hard-line approach to industrial relations including the abolition of AWBs. He also indicated a strange belief (strange, for a self-professed free trader) in activist (read ‘protectionist’) industry* policy. He also supports an increased Federal role in schools and education using the High Court decision on WorkChoices as a basis for overruling the states.

This sounds a lot like old Labor talking.

I am unconvinced the electorate will take to Rudd. Once the excitement of having a new leader dies down it might end up Laboring-on as always. Rudd is inexperienced at running a fairly dysfunctional political party (who other than a hack could?). He might try to buck the system Latham-style or be a hack. There isn’t a third alternative without him exercising great political skills.

Update: Over at Crikey, Richard Farmer has some interesting observations on Rudd's preference for a protectionist industry policy.

Simon Crean might be down but that he is certainly not out was shown yesterday when new Labor Leader Kevin Rudd singled out revitalising Australian manufacturing industry as an example of how things would be different under an administration run by him.

Saving a manufacturing base has been a Crean crusade for a decade and he now has a leader listening to him. Whereas Kim Beazley merely talked the talk with plans for a wishy-washy body called Enterprise Connect, Rudd can be expected to tackle economic rationalism head on with some good old-fashioned protectionism.

Not that the Opposition Leader will be calling his subsidies and incentives protectionism. The "new policy agenda for the nation" he spoke of at his first press conference after winning will tackle the question "will Australia in the future be a manufacturing country, will we still make things or is that all gone?" His answer was yes but not in not the old-fashioned style that depended on protective tariffs and quotas.

What the new style will consist of will be spelled out in the months ahead but the Rudd way with words will surely find a fork in the road inside his babushka doll that describes rent seeking as a meaningful industry policy.

Where Crean knows there is fertile ground is in the statistics showing that since 1996, the government of John Howard has overseen the loss of 145,000 Australian manufacturing jobs with 60,000 of them occurring since the Government’s re-election in 2004. According to a study commissioned by the Australian Manufacturing Workers Union there could be another 200,000 job losses by 2020 if current policy settings continue.

Kim Beazley tried to raise manufacturing policy as an issue with an innovation blueprint but failed to arouse much interest. Nor did the Enterprise Connect centres dedicated to advanced manufacturing stir the interest of leadership obsessed journalists. It will now be up to the new style with sleeves rolled up to try again.

By the way what a terrible exit for Kim Beazley yesterday. KB was always ‘the’ very decent guy – in the lead-up to the ballot this was almost made out to be a sin or a sign of weakness. But KB was a long-serving politician and was committed to his role in achieving a Labor victory. To have this snatched away for him and then to be confronted with the personal tragedy of his younger brother’s death is one of life’s tough twists. His parting words that ‘family is everything’ were heart-felt and intelligent and KB’s apology for showing obvious emotion was unnecessary. I think everyone empathised with him.


Matt Canavan said...

Completely agree. Rudd has also indicated a fetish for industry policy. This didn't work for Beazley/Crean post Keating why are they trying it again?

derrida derider said...

Industry policy may be bad policy, but it's good politics for a Labor leader. Rudd's first task is to get in to government, and I don't think he'll let the scoldings of a few economists worry him, especailly as many of these economists have been notably silent on the boondoggles the conservatives have indulged in to protect their favoured sectors.

As for manufacturing, its recent troubles are a manifestation of Dutch disease. These troubles will end when the resources boom does - something Rudd probably knows full well and is counting on the timing being right for him.

hc said...

DD, Very interesting points.

I agree industry policy always sounds like good sense to a gullible electorate.

Exchange rate pressures have made life hard for manufactures but I still think comparative advantage is consigning mass manufacturing to China and India.