THE POLITICAL CLICHE, “it’s the economy, stupid,” has forever lost empirical relevance in Australia. John Howard’s conservative government oversaw unrivalled economic success in its eleven and a half years in office, yet was roundly defeated on Saturday. Australian unemployment, at 4.2 per cent, is the lowest since the first oil shock of 1973, and lower than in all G8 and major European countries. Since 1996 Australian private sector wages have risen by 48 per cent, faster than those in the United Kingdom, United States, Europe and the OECD average. Inflation has remained steady around 2.5 per cent, and interest rates relatively low. Meanwhile, the Howard government effectively reduced public debt to zero. Indeed, it has run consistent budget surpluses and set up a massive investment fund to save for the demographic rainy day on the horizon. Perceptions have reflected reality. Alan Greenspan’s memoirs praise outgoing Australian Treasurer Peter Costello’s fiscal foresight, and the IMF describes Australia’s recent macroeconomic management as “exemplary.”
Yet, despite good economic times, the Australian electorate resoundingly removed the incumbent government. Howard’s Liberal-National coalition lost over a quarter of its seats in the 150-seat House of Representatives, where governments are formed. Not only did the electorate remove the government, it personally removed the Prime Minister from his Sydney seat of Bennelong, which he had held continuously since 1974. John Howard, 68, has become the only incumbent Australian Prime Minister since 1929 to lose his own seat, to a prominent left-wing journalist and former employee of the state-owned Australian Broadcasting Corporation. Moreover, Howard’s coalition lost its majority in the crucial 76-seat Senate, which, modeled on the U.S, system, contains equal numbers of representatives from the six Australian states, and wields almost equal legislative power.
The leader of the Australian Labor Party, and incoming Prime Minister, is the comparatively little-known Kevin Rudd, 50. He entered parliament in 1998, following a career as a diplomat in China and then a senior bureaucrat in the Queensland state government. He impressed the electorate by addressing Chinese President Hu Jintao in fluent Mandarin during the recent APEC summit in Sydney. Elected Labor party leader in December 2006, Rudd’s reserved demeanor and anodyne intonation contrast markedly with previous Labor prime ministers. Paul Keating, Bob Hawke and Gough Whitlam, Australia’s only other Labor prime ministers since 1949, all great orators, evinced a swashbuckling, larrikin style. Rudd can seem a bureaucrat elevated beyond his station. In his victory speech, Rudd characteristically recommended that his supporters’ celebratory solace extend only to a “strong cup of tea” and an “iced Vovo” (a traditional Australian biscuit).
Howard’s loss stems from poorly argued and implemented labor reforms, and a very effective Labor campaign that characterized them as extreme, and Howard as out of touch and drunk with power. No Labor politician would open his mouth without referring to John Howard’s “extreme industrial relations laws.” Rudd, however, would “get the balance right.” Who wants to the get the balance wrong? Labor’s campaign was very effective, and the government looked like it was attacking the “Aussie battlers,” those working-class, supposedly downtrodden Australians whose cultural conservatism had kept Howard in government for so long. Working class suburban seats fell to Labor in droves on Saturday. Howard’s loss had nothing to do with Australia’s involvement in Iraq or its “failure” to sign Kyoto.
Howard’s now-infamous “workchoices” laws were in fact extremely reasonable. They tried to simplify perhaps the most complicated labor market in the Western world, where 20 different minimum conditions — from “cultural leave” to the exact length of afternoon tea breaks — existed for different jobs, and were set arbitrarily by courts. They released businesses with fewer than 100 employees from potentially having to prove a termination was not “harsh, unjust or unreasonable.” They made it easier for people to negotiate employment contracts directly with their employers.
THE REST OF RUDD’S campaign rested on a swathe of asinine banalities. Rudd promised an “education revolution,” that his government would look “forward with fairness” and “take the pressure off working families.” Indeed, his campaign was centered around the fact that his first name rhymed with seven (see www.kevin07.com.au). Howard, on the other hand, made the egregious error of telling Australians that they had “never been better off,” perhaps aping British Prime Minister Harold Macmillan’s very successful “you’ve never had it so good” election campaign of 1959. Although Howard’s reminder was undeniably correct, Labor successfully cast it as further evidence of increasing aloofness. The emotive “Aussie battlers” remain sacred, and Australia’s compulsory voting system ensures they always vote.
The incoming government’s resemblance to the outgoing, in substance and style, may be Howard’s greatest triumph. Despite the rhetoric, faced with economic reality Rudd will not re-impose a Byzantine straightjacket of labor regulations on Australian businesses. On the big questions of immigration, defense, foreign affairs, fiscal and aboriginal policy, Labor will mimic the Howard government. Indeed, Labor adopted Howard’s proposed A$34 billion tax cuts in their substantive entirety during the campaign, promised budget surpluses, and even proposes to abolish the 35 per cent income tax band! Rudd routinely reminded Australians “I’m an economic conservative”; previous Labor leaders would have turned in their graves. Conservatives regularly lambasted Rudd for his political philosophy of “Me-tooism.”
Points of difference stem from Rudd’s necessary sop to the socially chic quarters of the Labor party, for whom conspicuous compassion trumps logical and empirical analysis. Rudd will immediately sign the Kyoto protocol, leaving the United States as the only non-signatory. Rudd’s Australia will also sign the absurd and unhelpful 2007 United Nations Declaration on Rights of Indigenous People, which the U.S., Australia, New Zealand and Canada had alone refused to sign. Australia will quietly gain a Minister of Social Inclusion (your guess is as good as mine), and the race-obsessed Department of Multicultural Affairs will be re-established. Finally, Rudd has vaguely promised to reduce Australia’s involvement in Iraq. I hope this disappointing proposal to desert our “great friend and ally” (as Rudd describes it), the United States, in a difficult time is quietly forgotten. Australia is the only country to have fought with the U.S. in every war since the First World War.
Howard, a scourge of political correctness, has a cultural legacy to match his economic one. In particular, Howard encouraged an Australian history based on reasonable interpretations of objectively verifiable events, particularly in relation to British settlement of Australia and relations with Aboriginal people. Keith Windschuttle and other conservatives were appointed to the board of the Australian Broadcasting Corporation. Windschuttle’s book, The Fabrication of Aboriginal History (2002), perhaps the most important and famous Australian historical work in the last 25 years, highlighted the egregious and blatant bias of many in the Australian historical profession. Australia’s former Governor-General, Sir William Deane, had even publicly apologized for a racist “massacre” of aborigines in 1930 which was shown to have never happened.
Rudd knows that his success is partly based on Australians’ belief that he will maintain the cultural legacy of Howard. The last Labor government, under Paul Keating, was ejected precisely because typical Australians were sick of his government’s and his latte cheer squad’s elitist, blinkered view of Australian history. Indeed, trendy, culturally relativist positions will not sit well with Rudd, who grew up on a dairy farm in outback Queensland and whose Anglican Christianity is well known. On election night, Rudd pointedly noted, “[John Howard and I] share a common pride in this great nation of ours, Australia”.p>Assuming the new Labor government wants to remain in office for more than one term, Howard’s influence in economic policy and culture will remain prevalent. Labor’s tax cuts and promised budget surpluses will severely constrain any latent spendthrift tendencies. It will be interesting to see how the Rudd government faces Australia’s more serious policy issues: whether to expand its small population of 21 million, and how to resolve the fraught constitutional relationship between the federal government and the Australian states.
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