The Lesson of Oz

“Australian politics is in turmoil of a type and intensity not seen for 70 years”

Australasia Constitutional Affairs Dispatches Politics

Australian politics is in turmoil of a type and intensity not seen for 70 years. The federal election of August 2010 and the following weeks of bartering, have yielded no decisive outcome. In Canberra, the new Prime Minister Julia Gillard and her Labor Party will have to find monthly solutions on the floors of both houses of parliament, for both are “hung”. Ms Gillard, the country’s first female PM, migrated from Wales to Adelaide as a child, and became a lawyer and skilled political operator before deposing her own leader, Kevin Rudd, earlier this year. She will need high skills to survive the next three years.

 Julia Gillard: Australia’s first female prime minister

How the deadlock arose is a tentative warning for British electoral reformers. Elections, both federal and state, are frequent in Australia, and voting is mandatory. The maximum term of a federal parliament is only three years, a result of the ultra-democratic Chartist movement of the 1840s, which had much less influence in its native Britain than in Australia. Voting for the lower house is not on the first-past-the-post formula. A candidate can come second or even third on the primary vote but then win the seat through the allocation of the preferences that every voter must mark on a ballot paper. Normally, this complex system delivers a high degree of certainty. A political party, once it has won office in Canberra, can expect to win the next three or four elections. “Bob” Menzies actually won six successive elections for the Liberal-National coalition during the period 1949-1966, his second term as PM. But Kevin Rudd, who convincingly won the federal election of 2007 for Labor, did not even survive his first term. Plotters in his own party deposed him.

Rudd had begun his leadership as a golden boy. His first career was in the Australian embassy in China, whose language he speaks. But federal politics was his goal, and he became leader of his party not because he was popular with colleagues but because it seemed that he could end its 11-year spell in opposition. He was a fresh face and the next generation in politics. In his first prime ministerial year, his personal popularity remained high. Even on Sundays, he offered photo-ops outside the Anglican church he attended. Working defiantly long hours with little sleep, he was seen as a new hand at the helm. 

When the world’s economy was shaken in 2008, he was busier than ever, dispersing money. In one gesture, the great majority of taxpayers received a hand-out, to spend as they wished. He gave a public apology for his nation’s past treatment of Aborigines, many of whom appreciated the gesture. Rudd promised, in winning the election of 2007, far more than he could achieve. His government became accident-prone, especially in fields the voters could themselves inspect. Thus almost every school was promised a new assembly hall, library or other amenity, even when the heads said they didn’t need one. The blunders, the excessive costs and the delays became a national scandal.

With a similar speed, home-owners were subsidised so that they could instal ceiling insulation that would reduce demand for electricity. Soon the ceilings of suburban homes were shaking under the weight of untrained and cowboy contractors. About 200 houses were accidentally set on fire and four tradesmen killed by electrical errors. Speed was the killer. The federal government insisted that everything had to be done quickly during the global downturn. The economic stimulus was partly effective. The debris were all too visible. By Easter 2010, Rudd’s and his party’s popularity were sagging. A new leader of the opposition, Tony Abbott, a former Rhodes Scholar and minister in the previous Howard coalition government, had confronted Rudd with a forthrightness which rejuvenated his party. 

Rudd faced more critics when he decided to abandon part of the moral ground that he ceaselessly claimed for himself. For three years, he had proclaimed climate change as the great “moral challenge” of our time. He had been a banner carrier in Copenhagen. He had tormented his political opponents in Canberra for not crusading for climate change. Electoral obliteration awaited them, he promised. Now, suddenly, he himself abandoned the bills designed to help Australia to combat the effects of climate change. His U-turn shocked many of his own supporters. Some moved to the Greens.

Rudd’s earlier successes were forgotten. Suddenly, a victory for Abbott’s Liberal-National coalition in the federal election seemed on the cards. On June 23, Rudd was deposed by powerbrokers in his own parliamentary party. In the history of Australia’s prime ministers, such a dramatic fall, especially of one who began with a large majority, had not been seen. He was replaced by his deputy Julia Gillard.

Election day was August 21. The swing was strong against Labor. In primary or first preference votes, Labor was almost half a million votes behind the Liberal-led coalition. After the distribution of preferences, especially those of the Greens, Labor recovered to win 50.12 per cent of the final vote and the Liberal-National coalition 49.88 per cent. The seats were just as evenly divided between the two main parties. In the new parliament, the coalition has 73 seats, Labor has 72 and the support of one Green. The other four are held by Independents. 

At the time of writing, Labor is governing. Through various deals and promises, it has the support of 76 of the 150 members. Curiously, its slim majority depends partly on the promised support of two unusual Independents, sometimes nicknamed the Grandstands, who represent rural seats in northern New South Wales. Those seats are traditionally anti-Labor. If one Independent changes his mind, the new government will lose its majority. Whether Gillard will last three years is a question for the gambling industry. She faces further uncertainty in the senate or upper house. Senators are elected in state-wide electorates by a version of proportional representation that favours minor parties.

I see the election result as the mirror of a seismic shift in economic geography. As in the gold rushes of the 1850s and 1860s, mining is again the dynamic industry. It is one of the most diverse, highly-mechanised mineral industries the world has known, with a major output of gold, silver, diamonds, uranium, bauxite, alumina and aluminium, copper, lead, zinc, tin, manganese, nickel, titanium and other mineral sands, iron ore, metallurgical and steaming black coal, brown coal, oil, natural gas and other minerals. Far and away the nation’s top export industry, its heartland is in Western Australia and to a lesser degree in Queensland. 

In recent decades, these two states, huge in area but sparsely settled, have been growing at a faster annual percentage than the old and more populous leaders, New South Wales and Victoria. Admittedly, in the eyes of tourists, Sydney (NSW) remains the country’s most exciting, bubbling city with more than four million people, but its annual rate of growth is much exceeded by Perth (WA) and Brisbane (Q). Likewise, in cargo handled, the big ports of WA and Queensland make Melbourne’s and Sydney’s docks seem puny. To fly along Australia’s semi-deserted tropical coast and suddenly see a fleet of huge ships anchored and waiting to take on cargoes of iron ore or coal is to glimpse the huge economic stimulus to Australia’s economy provided by China, India, South Korea, Japan and other nations. 

The recent federal election showed a deep ideological split between the two mineral-rich states and the other four. Labor won a large majority of seats in the four south-eastern, or older, states. It was trounced, however, in Queensland and Western Australia. There, Labor won only 11 seats; the Liberal-National coalition won 33. The policies of Labor, and especially the Greens, are clearly seen as less sympathetic to minerals. 

One segment of the recent swing against Labor did reflect a personal factor. Kevin Rudd was a Queenslander, and in the 2007 election he won swing seats in his home state with the support of voters who were proud that, for the first time since the First World War, they could directly elect a Queenslander as PM. Three years later, he showed he had forgotten their hopes. In his last gasp as Prime Minister, he announced — partly in the hope of reducing his government’s rising debt — a huge tax on mining profits. There was no prior consultation with the leaders of the mining industry or of the relevant states. There had been no hint of such a tax in his previous speeches. He justified it with misleading statistics — presented to him by the federal Treasury — claiming that successful mines in Australia paid very low taxes. Rarely have senior officials of Australia’s civil service seemed so incompetent. Rudd was probably entitled to complain — but did not — that he was undermined by his advisers. Mining is not popular among many urban Australians — especially teachers, journalists, civil servants and academics — and some of its unpopularity is understandable. But did it deserve to be the victim of a special tax simply because it was so successful? The principles underlying any tax imposed on economic success should, in theory, also apply to the winners in a variety of other Australian industries, especially the profitable banks which had received an enormous bonus — a financial guarantee — from the Rudd government during the global financial crisis. 

One argument against Rudd’s proposed mining tax was logical. It would frighten away foreign investors from those new mineral projects that are gluttonous for capital. In the long term, the tax would lower all Australians’ standard of living. This controversial episode had especially irked Western Australian and Queensland voters. It also increased the prestige of Tony Abbott — he instantly condemned the tax — and hastened Rudd’s downfall as leader of his own party. After she supplanted Rudd, Gillard temporarily diluted the planned tax. But a version is still on the political agenda and now, following the election, the Greens are demanding that it be severe.

Climate change also widens the political split between the large mineral states and the others and creates a split within voters in each state. The nation is already a huge producer of coal, both for its own electricity and for the making of electricity, steel and other products in South and East Asia. But coal, though very cheap, increases pollution. Australia has the world’s largest reserves of high-grade uranium but Labor’s policy restricts its mining for export and officially bans the generation of electricity from nuclear reactors on its own soil. Oddly, global warming is declared by Labor and the Greens to be the supreme “moral challenge”, but they ban a major solution to that challenge — generating electricity from nuclear power.  

For the sake of democracy, it would have been wise to make climate change one of the election issues, but Gillard announced that her policy was close to Abbott’s. Therefore it ceased to be an election issue. Some weeks after the election, Gillard announced that her policy would be stricter than Abbott’s, because of Labor’s forced alliance with the Greens. So the hung parliament in Canberra has given her a lot of rope with which to hang herself.

To heighten the political complexity, Australia has an unusual proportion of thinkers — and eccentrics, too — who accept that the world’s temperatures are increasing but who dispute the likely degree of future warming causes and consequences. Australia’s climate history does not always match the knowledge blindly borrowed from the other side of the equator. Tony Abbott and most members of the Liberal-National coalition do not share Labor’s diagnoses of climate change, let alone the Greens’ doomsday view. 

In all the excitement about a divided parliament, one principle is overlooked. Gillard’s last-minute deals with the Greens and the Independents are vital for her survival, but they might well undermine democracy. Where are the voices speaking on behalf of Australia’s long-standing democracy? 

The carbon and mining taxes divided Australia into two hostile territories. Towards these opposing groups, Gillard made clear-cut promises from which she has since crept away. Therefore the key principle of democracy is at stake. Are the voters really supreme on the one day that is important for them — the day of the election? Or are they to be extinguished by the post-election bartering, in which the PM is the main dealer? The same dilemma may reappear in Britain if it adopts a new electoral system, especially one, such as the Alternative Vote, that empowers third parties.

It is true that Gillard is new to office. Her difficulties are acute. But within two months of the election, she trampled on two of her major promises. She may try to redeem her failure by initiating a national referendum to approve any legislative changes on the mining and carbon taxes. Australia has a stronger tradition than Britain of invoking a referendum to solve controversial matters, but such a solution has its dangers. All these events constitute a minefield, which Britain should examine in its own interests. After all, it has to wait five years, not three, before its voters can rectify, if they so wish, a previous injustice.