Advice from the enemy

I have never been one of Brendon Nelson’s greatest fans and preferred Tony Abbott to lead the Federal Liberal Party when that decision had to be made. Abbott is an intelligent conservative who predictably does not appeal to a mass audience. In addition I thought Nelson was a rather poor Minister for Education who operated in John Dawkins mode and was an indifferent Minister for Defence who approved the dubious Super Hornet deal. But I think Nelson, having been elected leader of the Liberals, should be given a chance and some time. He has the difficult job of leading the party back from defeat and should not be ‘white-anted’ from within. Given that the majority-preferred choice for leader, Peter Costello, will almost certainly resign, Nelson has the unenviable task of trying to restore the fortunes of a party which neither holds government federally or in any state or territory in Australia. He deals with a media hostile to the Liberal Party and under the spell of cliché merchant extraordinaire Kevin Rudd.

The Liberal Party should reject media campaigns to dislodge Nelson. These efforts are not designed to induce selection of a better candidate but are primarily aimed at consolidating Labor power. Today we experienced the manipulative gutter journalism from Melbourne’s Pravda which has maintained a steady campaign of trying to discredit Nelson. In a news story Pravda states that ‘unidentified senior Liberal sources’ have indicated that Nelson won’t last and that Malcolm Turnbull will replace him. It sounds like it might be half-true and that is a probably good enough for Pravda to launch yet another propaganda attack on the Liberals. The Chinese and North Korean communists could learn from this rag’s devotion to writing propaganda as ‘news’*. Quote:

‘It is believed that Peter Costello is preparing to depart politics, while Ms Bishop and Mr Abbott have ruled out challenging, leaving Mr Turnbull as the only genuine contender’. (my bold)

I suppose that on the basis of the ‘unidentified source’ almost anything can be ‘believed’ if it suits your political priors. One of the interesting things about the political left is that they don’t feel the need to cover their preposterous claims with well-thought-out alibis. While Peter Costello, Julie Bishop and Andrew Robb were cited in Pravda’s piece as denying the claims in its article they were (it was implicitly suggested) obviously just covering-up for Nelson and three denials of a made-up claim suggested, of course, that the claim has some substance. That’s presumably why the denials were cited.

But if Nelson is finished as leader this should be the decision of the Liberal Party not a decision of the party’s enemies in the gutter leftwing press, in the Labor Party or among Labor’s uncritical supporters. I agree with Andrew Robb that the Liberal Party should not be put off by ‘newspaper talk or others trying to trip us up’.

Last week John Quiggin offered help to the Liberals to stop them being ‘as irrelevant as they are now’ and ‘to support political competition’. John is one of Australia’s active economists who supports Labor. John’s prescription to the Liberals was simple – the Liberal Party should stop trying to restrict the size of the public sector, reducing costs in health care and so on. I thought these were strange claims for an economist - one who should seek to make best use of scarce resources - to make.

Instead , according to John, the Liberals should adopt the attitudes of the pro-public sector Labor Party. In short, the Liberals should become more like the party which defeated it. By so doing the Liberals will ‘increase ‘political competition’ and apparently perhaps ensure their survival.

One might reasonably question the sincerity of advice offered to a party which John obviously opposes and which, in the main, suggests the party behave like one John supports. My concern is that John might be seeking to encourage a political stance that would ensure the long-term irrelevance of forces hostile to the Labor Party.

John’s advice is based on what seems to be an endorsement of a view of government as a giant wealth creator which can (and should) hand out favors. John mentions Keith Hancock’s ‘caustic’ view of Australian attitudes towards Federal Government as ‘a vast public utility, devoted to the greatest good of the greatest number’ – Hancock was being critical of this obviously suspect view but John seems quite comfortable with it himself. John states unequivocally that Labor shares Hancock’s view (enough from my perspective to condemn Labor eternally) as did John Howard. The problem for the Liberals was that their support was just not deep and sincere enough. Indeed they even dared question the value of public servants and government spending! Good god!

No political party in Australia should endorse this view of government’s role and the Liberal Party should fight it. We do not live in a socialist society where governments should seek to make ‘the greatest number’ happy since governments don’t have that good a grasp of what motivates the citizenry. Indeed, even if this doubtful prescription were the belief of most Australians, then it is subject to a host of practical and philosophical objections that should lead to its rejection. It is clearly wrong. Governments distribute wealth but generally do not create it**. Government interventions should target market failures and modify the extremes of income distribution to favour the most disadvantaged but not the views of politicians and bureaucrats on what will make most of us happy.

Again, in my view the Liberal Party should avoid accepting advice from those who ideological position stands as one of opposition.

The Liberal Party should have continued to support the workplace reforms that helped reduce unemployment to a 34 year low and which gave Australia the strongest sustained period of economic growth for a century. Generally the Coalition provided a superb period of public administration in Australian. The difficulty was that the stability and prosperity delivered created both unwise investment choices and the risky selection of daft political options among the public. Australia became complacent about the risks of giving power to the Labor Party wreakers.

The reforms introduced by the Coalition will make sense as unemployment and inflation steadily worsen (as they will under Labor), as employment markets are re-regulated and debts to the union movement are repaid by disastrously encouraging ‘preservation of the real wage’ as an ethic in the face of oil and food price increases. These foolish policies reflect, in the main, a commitment to populism.

The Liberals should clear the slate and accept their mistakes. They should accept that unseemly handouts were made by them during their last period in office - and make it clearer than ever that the ‘social services for all’ ethic should not be government policy. Instead, emphasis should be on the role of private markets in driving our current wealth with caution being exercised on public spending. They should continue to emphasise the efficiencies that follow from making people responsible for their own lives by taking their own private actions to secure their health and their retirement security. Social security and the welfare state should protect the needy losers not the ‘greatest number’ of winners who are doing well out of free markets.

Most of all, the Liberals should not be defensive about the outcomes from their term in office because of the unparalleled period of prosperity it has induced.

With high probability the inexperienced riff-raff and power-hungry trade union hacks of the Labor Party will damage Australian society and its economy . This will particularly be so given the current short-term credit and oil price shocks impacting on the economy. Labor has never have offered much more than imitative ‘me-too’ politics, cliché and symbolic gesture – so as a political force they are easy targets.

Labor’s policy failures and its corruption and widespread scandals need to be uncovered, documented and publicised. Then, as the predictable public policy disasters unfold under Labor, comparisons need to be drawn between the high quality public administration and sound government under John Howard and that offered by Labor. This is the perspective Brendon Nelson should be pursuing and the party should support him in this. If the party seek to replace him this should be done on the basis of advice from friends not from enemies.

* Suggested masthead for Pravda ‘We don’t report the news. We write it’. (Thanks William S. Burroughs, Nova Express).

** No I don’t believe stories that public firms have a lower cost of capital than private firms and can hence be more cost-efficient. The inefficiency costs of having enterprises run by administrators beholden to pollies who have never done a day's work in their lives, rather than businesspeople responsive to a bottom line conditioned by private sector views, are manifestly too great.