Slaves to naked populism

October 22, 2012

22 October 2012

By Tim Soutphommasane.

Sometimes it helps to pause and step back. So it is with our politics at the moment. Amid the noise and conflict, perspective has been elusive. We don’t always appreciate the big picture. The past fortnight has highlighted this. There has been much heated debate, of course, about that misogyny speech in Parliament. Only with the world’s attention did the social significance of Prime Minister Julia Gillard’s tirade against Opposition Leader Tony Abbott become fully apparent to many political observers. Or so it seemed.

International perspective is always a useful thing. While we Australians may like to boast about our cosmopolitan sensibilities, we all too often lapse into familiar parochial mode. In no area is this truer than in economics.

Last week the distinguished economist Martin Wolf delivered the Max Corden Lecture at the University of Melbourne on how the global financial crisis had changed the world. It was a sober reminder of current global uncertainty. We are, according to Wolf, living in a ”contained depression”. There is little sign yet of a sustained recovery.


Many of us in Australia don’t appreciate how bleak it looks. Australia has, after all, been spared the full brunt of the crisis. Our run of 21 years of consecutive economic growth remains unbroken. Whereas the United States economy has only just recovered to where it was at the end of 2007, the Australian economy has grown by more than 10 per cent during the same time.

Earlier this month the International Monetary Fund showed that Australia had overtaken Spain to become the 12th-largest economy in the world. A global study by Credit Suisse bank published last week also showed that the median wealth of Australians is the highest in the world. The average wealth per adult in Australia, at $US355,000, ($A343,000) is the second highest in the world behind Switzerland.

You wouldn’t guess any of this from the public mood and public debate. Certainly, in political terms, the Gillard government hasn’t enjoyed the credit for economic management that you might have expected from such stellar figures.

To its tactical credit, the Coalition has framed Labor’s economic management in terms of public debt. Labor, meanwhile, hasn’t done itself any favours by failing to communicate effectively with the public.

But whatever the reasons, Wolf’s verdict on the state of Australian public debt is worth noting as a reality check. As he put it in an interview on ABC TV’s Lateline: ”Your public debt problems seem amazingly trivial by our [European] standards. We only wish we had your net debt position, which is obviously incredibly comfortable.”

It is jarring to hear such words. Many Australian households appear to have been anything but comfortable. Community sentiment seems to suggest widespread concern about living costs – not least against the background of a new carbon tax. The Coalition has sought every opportunity to stoke such anxiety.

It matters little that rising incomes have outstripped rising prices. It matters little that there is no real cost-of-living crisis for the vast majority of households.

This points to one reason why there has been such a dramatic gulf between economic reality and perception. In Australia, naked populism remains the order of the day.

It is tempting to say all this reflects something of a corruption of our politics. Obviously, I’m not suggesting there has been any breaking of the law. Rather, I mean that our politics has been degraded by debates being no longer accountable to the facts.

Both sides of politics bear responsibility for this. Indeed, Labor mastered the art of populist manipulation in opposition.

Recall that one key to Kevin Rudd’s success in fighting John Howard was his ability to appeal to so-called kitchen-table economics. In 2007, Rudd made considerable mileage by attacking Howard for being out of touch. Labor exploited to good effect in its campaign advertisements Howard’s claim that ”working families have never been better off”.

But as prime minister, Rudd experienced considerable embarrassment in handling cost-of-living pressures: think of the failures of GroceryWatch and FuelWatch. This was just one of the many issues on which Rudd failed to deliver.

It may be that Labor is now the victim of its own political strategy. Debates are increasingly divorced from the economy as a whole. Where political leaders such as Paul Keating tried to educate public opinion about economics, today politicians do their best to dumb things down.

This could just be one of the most significant legacies of Rudd’s populism: it has entrenched in our politics a civic handicap, which we’re only beginning to appreciate. Voters are no longer being asked to judge policies and leadership according to what is good for society. Where once political parties would seek to devise their arguments at the level of the nation, the target is now much smaller.

For all that the rest of the world may envy our growth, it should not envy our shrinking debate.