The Opposition Leader goes into 2013 carrying heavy baggage for his relentless assault on the Gillard government.
inShare.
Pin It
Email article
Print
Reprints & permissions
.
Illustration: Rocco Fazzari
How fast does your truck go, Tony? That semitrailer you’re driving in your high-visibility vest? It’s fast enough to get you from Brisbane to Terrigal down the Pacific Highway in a couple of days so that you can talk about your plan to fix the road. And yes, you do have high visibility.
The truck is like an industrial-strength version of the notorious red Abbott Speedos. It’s a high-visibility demonstration of masculinity, a touch daggy, a bit dated, very blokey, down-to-earth, virile, active, completely obvious. In the case of the Speedos, a little too obvious for most.
But will your truck get you to the destination you’re suddenly so anxious to reach?
You spent years, years of disciplined daily work, cementing your image as a destroyer. You campaigned against Julia Gillard, you campaigned against her asylum policy, you campaigned against her mining tax, and, above all, you campaigned against her carbon tax. As you well recall, you called for a “people’s revolt” over the carbon tax. You said the next election would be a referendum on the carbon tax.
Advertisement
It worked. You were thrilled to find how well it worked. You so frightened and angered the country with the prospect of the ruinous carbon tax that you put the Coalition into a commanding lead. You paid a high price personally – your approval rating went into a long and steady decline as you rammed home your persona as Dr No. But it was a price you were prepared to pay for a Coalition victory.
But you didn’t imagine that it would take so long. You thought that Gillard’s grip on the Parliament would slip in the first year, and, when that didn’t happen, you expected that Kevin Rudd would force her out in the second. You didn’t expect that Gillard would still be in power, and you’d still be in opposition, when the carbon tax actually took effect and your dire prophecies proved false. Your unpopularity is at new highs and your party’s lead has weakened too.
So now you want to be seen as a fixer, not just a destroyer, positive, not just negative: “Doctor Yes. Doctor Yes, no less,” as you told Adam Spencer on ABC 702 this week.
That’s a big distance to cover. Can your truck get you to your new destination in just a couple of days? The culminating point of victory, as the great Prussian strategist Clausewitz liked to say, for you, Tony, was just before the carbon tax actually arrived. Your anti-carbon tax campaign is now delivering diminishing returns.
When Boral announced the closure of a Geelong plant that makes clinker, a precursor for cement manufacture, this week, it was the sort of economic disaster scene where we would have expected to see the old Tony on the spot, crowing about the havoc wrought by Gillard’s carbon tax. Cement-making is an emissions-intensive business and the government was braced for an Abbott attack.
Boral didn’t cite the carbon tax as a factor in the closure of the $100 million plant with its 90 jobs, but that hasn’t stopped Abbott in the past. Remember his interview with Leigh Sales where he pretended that BHP’s postponement of its Olympic Dam project was due to the carbon tax?
But instead of talking cement, the new Tony was driving a truck, promising to fix the Pacific Highway, trying to reset concrete. The former US vice-president Walter Mondale once remarked: “Political image is like mixing cement. When it’s wet, you can move it around and shape it, but at some point it hardens and there’s almost nothing you can do to reshape it.”
Is Abbott’s image still malleable? He has to hope so. Labor’s Craig Emerson said last week in Parliament that the “carbon price is much more popular than the Leader of the Opposition”. He based his assertion on a poll by Essential Media which didn’t quite support it. The poll didn’t actually test Abbott’s popularity.
But it seems he’s pretty much right, according to the Fairfax pollster, Nielsen’s John Stirton: “Technically speaking, Tony Abbott is as unpopular as the carbon tax. In our latest poll, 36 per cent of respondents approve of Abbott, and 37 per cent support the carbon tax. The difference is statistically insignificant.”
Similarly, the poll found that 60 per cent of respondents disapprove of Abbott while 59 per cent disapprove of the carbon tax. “They have a very similar profile,” is Stirton’s summary.
Indeed, Abbott has the distinction of being the 13th most popular opposition leader of the 19 who’ve held the office in the 40-year history of the Nielsen poll.
He has just slipped one place in the ranking in the last few weeks to fall below Gough Whitlam in his second term in the job, post-Dismissal, based on the average of the leaders’ approval ratings across their time in office.
With one more month of ratings around his current dismal level, Abbott’s average will slip below that of Billy Snedden’s, Stirton projects.
How did he get here? His approval ratings fell in tandem with support for the carbon tax. As he took the tax down, he went down with it. “He was successful in making himself and the carbon tax unpopular,” says Stirton. Abbott’s leadership has always been inextricably linked with the fate of the carbon tax. But he thought that he would rise as it fell. Instead they have fallen together.
This week provided further evidence that the carbon tax is not the “wrecking ball through the economy” that Abbott promised. The national accounts showed that the rate of economic growth fell in the three months to the end of September. GDP grew by 0.5 per cent. Annualised, that’s a rate of 2 per cent and represents a loss of momentum.
But it’s a loss of momentum that had nothing to do with the carbon tax, or the mining tax. The Gillard government and the state governments have to take part of the blame, but their contribution was through tightening their belts, not the new taxes.
Cuts in government spending put a drag of 0.8 of a percentage point on the GDP growth rate for the quarter. The Coalition can’t very well attack that, though, because that is exactly what it keeps telling Labor to do – spend less. Economists generally concur that Wayne Swan’s promised surplus is a fiction. On this week’s numbers, the Association of Business Economists estimates that Swan is on track to deliver a deficit of about $8 billion instead of his promised surplus of $1.1 billion, but the government is not yet ready to concede that point.
The carbon tax, in truth, verges on being trivial to the national economic outcome. The big story of the Australian economy, now, is the gradual subsidence of the mining boom’s first phase. That is, the phase of high prices for world iron ore and copper and coal supplies.
Commodity prices peaked a year ago. Australia’s terms of trade – that is, what we receive for our exports compared to what we pay for our imports – fell by 4 per cent in the latest quarter. They’re down by 13.7 per cent over the year.
In itself, that’s not necessarily a problem. The Treasury and the Reserve Bank have always known that the boom would end. The problem is that the shock absorber isn’t working. That’s the Australian dollar.
The dollar normally rises and falls with commodity prices. This certainly worked on the way up. The strengthening dollar didn’t slow the mining sector, but it did punish the rest of the economy. Manufacturing, tourism, university education exports all became less competitive as the Australian currency became more expensive.
But that pain was supposed to ease as the mining boom eased and the dollar fell. But the dollar is refusing to behave itself. It’s stuck stubbornly around $US1.04. Why?
It’s partly a perverse price Australia is paying for being so successful during the global crisis of the last four years. Australia is one of the few AAA credit-rated countries left, and the International Monetary Fund has designated the Australian dollar, together with the Canadian Loonie, a global reserve currency. Other countries’ central banks have been stocking their reserves with Australian dollar assets. Their buying held the dollar up for months.
Now another factor has come into play, and it’s another big inflow of foreign money. According to the economist Saul Eslake, a surge of direct investment in Australia, perhaps the capital to finance big new LNG projects, is again holding the dollar at levels it’s not supposed to be able to sustain.
So instead of the seamless adjustment where mining gently falls and everyone else starts to revive, mining is falling but no other sector is benefiting. The shock absorber is stuck. As long as this remains the case, profits and incomes will stagnate and the Reserve Bank will try to take up the slack by cutting interest rates.
This is the big story, and the carbon tax is a detail. The big story doesn’t work to the government’s advantage because it means that tax revenues fall. Even as Gillard announces the creation of a new category of government benefit, a National Disability Insurance Scheme, the nation’s ability to pay for it is declining.
And it doesn’t help the Coalition either. Abbott, too, has pledged to find the extra $6 billion a year that the NDIS ultimately will require. But the money will not be there for him either. Nor will the $5.6 billion he has been pledging this week to fix the Pacific Highway.
But in spite of this big underlying reality, both parties are busy promising spending they cannot afford. Honk if you believe!
Peter Hartcher is the political editor.
Read more: http://www.smh.com.au/opinion/politics/abbotts-whiteline-fever-20121207-2b11i.html#ixzz2EPNjaFjZ