The new book by Jim Chalmers argues poisonous, hyper-partisan politics should not obscure Australia’s economic achievements under Rudd, Swan and Gillard.
It is now beyond dispute that the last six years have been the most horrific for the global economy since the Great Depression tore it apart eight decades ago. Yet despite all this carnage, it is also clear to an unbiased observer that Australia under Kevin Rudd, Wayne Swan, and Julia Gillard avoided the worst of the socio-economic devastation inflicted on so many other nations by the global financial crisis and then the euro crisis.
Almost alone in the developed world, we maintained an unemployment rate between 5 and 6 per cent, and added almost one million jobs. Our economy is about 13 per cent bigger, partly due to what Nobel prize-winning economist Joseph Stiglitz described as “probably the best-designed stimulus package of any of the countries, advanced industrial countries, both in size and in design, timing and how it was spent”.
This success should not be obscured by the leadership politics of recent weeks and years. As my new book contends, it should be a source of considerable pride that Rudd, Swan, Gillard and other key colleagues came together to deliver an outcome that set Australia apart from the world. An outcome based on reasoned advice, careful consideration, and economic decision-making unparalleled in the developed world.
Hundreds of thousands of Australians were spared the unemployment queues, and families and communities escaped the listlessness and hopelessness of mass unemployment and social breakdown. In doing so, we dodged the devastating carnage that was wrought on the suburbs and towns of its last recession in the early 1990s. Our middle-sized nation at the bottom of Asia became the toast of the global economy.
But despite all this, a Boston Consulting Group (BCG) survey in mid-2012 found Australians to be less confident in their economy and its prospects than the hardest-hit citizens of Europe were of theirs. When it came to a BCG question on financial security, almost half of the Australian sample felt insecure—a similar level as in the United States but less secure than France, Germany, Spain and Europe as a whole. These were economies with unemployment rates many times higher than our own, debt up to ten times larger, and a tiny fraction of the growth.
This survey finding sounds a blaring siren that something is wrong with our national self-esteem. And it asks the most important questions of all arising from Australia’s success under Rudd, Swan and Gillard and especially during the GFC. How can a country that’s grown for 21 consecutive years be so pessimistic? How can a country with a demonstrated capacity for resilience, our world-beating nation, get so down on itself?
The answer lies in what new Prime Minister Rudd described last week as the negative, destructive politics which are holding the country back. My book analyses this state of affairs, arguing the blame for our lack of national swagger lies at the feet of a political system in which the incentives are badly misaligned, which allows the hyper-partisans in the opposition and in small corners of the media and business communities to dominate the national policy debate in a way that pushes it to the extremes.
This complex and costly combination of hyper-partisanship, short-termism, lobbying, rent-seeking, sloganeering, oppositionalism and circular self-criticism mixed with a curious blend of complacency and anxiety has poisoned Australia’s confidence in itself.
We need a more even-handed national political conversation. Not for the sake of it, but to test out policy ideas to advance the nation. To help settle the best of them and see them converted into policies with broad popular support. In that ideal world, that conversation does double-duty: it not only brings us to the ideas but also convinces our citizens of their merit. To do that, though, it needs to be a particular type of conversation. It needs to be fact-based, far-sighted, and fair and inclusive, in that all interests are considered but the national interest prevails.
That does not describe our political conversation in recent times. Judged by those standards, we have one in which hyper-partisanship swamps the facts and sectional interests swamp the national interest. Little wonder that it is extremely hard to find the path to the best ideas, and near impossible to build citizens’ support for them.
This is the cost of Australia’s lack of confidence in itself: its unwillingness to change in ways that are difficult in the short term but deliver lasting gains to more people into the future. If we don’t consciously choose a future less consumed by this poison that has been injected into our politics we will squander our tremendous national advantages and momentum, and compromise our ability to tackle the socioeconomic challenges of the coming decades as successfully as we have navigated those just past.
Like so many Australians, my belief in this country is bigger than the poisonous politics that have consumed it in recent years, destroying our national self-confidence and damaging our prospects for the future. With better choices, and less negativity, we can maximise our tremendous national advantages and momentum. That’s why I wrote Glory Daze, and I hope it plays some part in improving the political and economic conversation in Australia before, and after, such a crucial election.