The Rudd Government
June 14th, 2008 at 4:12 pm by David FarrarI have had a fairly benign to positive view of Kevin Rudd as Australian Labour under his leadership seem so much more moderate than NZ Labour. And he cut taxes in his first budget – unlike Helen who raised them, and didn’t cut them until budget No 9.
I was intrigued to listen to Andrew Bolt, talk at length on Kevin Rudd a few months ago, Bolt, was dismissed by a few people here as ill informed because he is a conservative commentator. But what I found interesting is that his criticisms were not that Rudd is left wing, but that Rudd is inclined to ill thought out populist ideas which annoy his colleagues and that he is ill disciplined.
I have to say the more time goes on, the more I regard Mr Bolt as having been very insightful with regards to Rudd. I’m not saying the Rudd Government is pursuing bad policies (overall quite good), and the Liberal Party leadership is near unelectable, so I still regard Rudd as the best choice (until Turnbull steps up anyway). But Rudd’s proposed EU style Asia-Pacific Union seems to be exactly what Bolt was speaking about.
There has been considerable comment in NZ that Rudd didn’t even consult New Zealand over his proposal, which is just plain stupid. Helen Clark has fairly astutely fired a subtle barb back without it coming directly from her lips, as Fran O’Sullivan notes.
Audrey Young also blogs on the issue, and quotes Greg Sheridan:
Sheridan has written an excoriating column this week against Kevin Rudd’s recent forays into foreign policy – after just six months in office. Rudd is just completing a visit to Japan.
It is a column with which Clark may have some sympathy.”KEVIN Rudd is in danger of turning what should be his greatest strength into a serious weakness,” writes Sheridan.
”I refer to his weird and increasingly ratty habit of announcing foreign policy initiatives of soaring ambition and utterly amorphous content on the run, half baked, with no detail and no credible prospect of success.
”In the past week alone we’ve had Rudd threaten to “take the blowtorch” to the Organisation of the Petroleum Exporting Countries to produce more oil and lower prices, nominate [former diplomat] Dick Woolcott to reform Asian security and trade structures, and now appoint Gareth Evans to head a commission to end nuclear proliferation and secure nuclear disarmament.
”If you announce twice a week that you’re going to save the world and you manifestly lack the means to give the slightest effect to your pronouncements, the world soon loses interest. The chief casualty is your credibility.”
The test for Rudd will be how well he learns from his mistakes.
One of Rudd’s Ministers is Craig Emerson, whom I had the pleasure of meeting last year at CIS’s Consilium conference. He is now the Small Business Minister (a portfolio we could do with here).
He gave an excellent speech to the Sydney Institute two days ago. Some extracts:
… the role of policy makers is to allow the market to create prosperity and out of that prosperity to expand opportunity, not the welfare state. In the market democracy so fashioned, citizens enjoy freedom, self-fulfilment and sovereignty over the state, not subjugation to the state through financial and regulatory welfare.
This is the philosophy of like-minded people whom I call market democrats – the modern Labor champions of the traditional Labor values of prosperity, fairness and compassion. Market democrats harness the power of the market for the public good.
Not a bad term – market democrats.
But as a new recruit to the ALP I again began to ask: is there truly a conflict between self-interest and moral behaviour and is there a conflict between morality and markets? …
But self-interest is not synonymous with selfishness. An athlete is not selfish for wanting to win a tournament, but is self-interested. A singer is not selfish for wanting to win Australian Idol. An artist is not selfish for wanting to win the Archibald Prize, nor is an author for wanting to win the Booker Prize. A scientist is not selfish for wanting to achieve a breakthrough ahead of other scientists.
Athletes, singers, artists, dancers, authors and scientists are self-interested but this does not make them selfish. Some may be arrogant and rude, some selfish, others humble and altruistic, but all are self-interested. Without self-interest, economic and social progress is impossible.
A very useful differentiation between self-interest and selfishness.
Labor was making itself the party of competition and compassion. Out of the proceeds of growth, the Hawke government was lifting school completion rates, supporting the parents of poor children to keep them at school. My moral questions were being answered through the competitive yet compassionate philosophy of the Hawke and Keating Labor governments – a philosophy that sat easily with Adam Smith’s Theory of Moral Sentiments and the Wealth of Nations. There was, I concluded, no inherent conflict between markets and morality.
How nice to have a reference to markets without a sneer, as one would get in NZ.
Competitive markets reward effort, risk-taking and entrepreneurship and they encourage innovation essential to the growth of a market economy. The forces of competition create pressure on businesses to be efficient and to come up with and apply new ideas for application in producing goods and services valued by consumers.
Yet markets are chaotic and wasteful. Predicting the prices produced by markets is always hazardous. Markets force businesses to close, wasting the building renovations and obliging employees to seek work elsewhere. But far more wasteful and chaotic are central planning and governments pretending to be good at running businesses in so-called mixed economies.
In other words markets are not perfect, but they are generally a lot better than the alternatives.
If poverty in Australia is no longer primarily a poverty of incomes but a poverty of opportunity, the goal of a fairer society is best pursued through a more equal distribution of opportunity than through a more equal distribution of income. A nation’s people are not better off if all live on equally low incomes. Of course it is unfair if the rich get richer while the poor get poorer. But why should governments seek to prevent the rich from getting richer if the poor also get richer as a consequence of the wealth creation process?
And he shoots bullets through the arguments of the poverty industry who use a definition which means poverty will never be solved.
Many Australians earning below-average incomes choose to forego higher pay in favour of spending more time with their families and friends or just relaxing or playing sport. By doing so they are making measured income inequality worse but, through free choice, they are making their own lives better.
Indeed. And incomes are also very tied to age and experience. Demanding that an unskilled 19 year old should be earning 60% of the average wage of 40 and 50 year olds with 20 – 30 years experience is madness. It is about opportunity.
The goal of market democrats is prosperity and fairness through opportunity for all in a market economy. Market democrats strive for a more equal distribution of opportunity. If opportunity is equally distributed, incomes in the future will be distributed more equally. Prosperity and fairness become partners not rivals.
I like how Emerson can say what I think, but state it so well.
But for those out of the workforce who have income-earning prospects, perpetual income support payments without any effort to remedy the causes of disadvantage are not the pathway to a prosperous, fair society; they are a perilous road to welfare dependency, low self-esteem and servitude to the state.
When was the last time a NZ Labour Minister spoke about welfare dependency?
Seeking to use industrial muscle to gain pay rises in excess of productivity growth is inflationary and ultimately self-defeating. Modern unionism can involve offering a bundle of services that are attractive to members. These services can extend beyond representation in workplace bargaining to support for lifelong learning, financial, tax and legal advice and advice on superannuation, private health insurance and even personal counselling services.
A wonderfully clear statement that The Standard will hate. Pay rises without productivity growth lead nowhere.
In a market democracy governments should serve the people instead of seeking to subjugate the people to the will of government through high taxes and heavy regulation. By allowing markets to reward hard work, risk-taking and entrepreneurship without unnecessary interference, market democrats advance
freedom and self-fulfilment.
Serve not subjugate.
Market democrats think of markets first and, only where necessary, strengthen or complement markets with efficient regulation. In a market democracy, regulation is justifiable in strengthening markets and remedying market failure.
Exactly, regulation is basically a last resort. Which is why I supported it in telecommunications. There was massive and clear market failure after 15 years of waiting. But it should always remain the last tool, not the first tool, that Governments reach for.
But the previous conservative government thought of regulation first, presiding over what the Business Council of Australia describes as the creeping re-regulation of business. This is why, in a process initiated by Kevin Rudd, Lindsay Tanner and I are so vigorously working with the States and Territories in cutting back overbearing, inconsistent and overlapping Commonwealth and State business regulation.
While in NZ we get review after review of the need to reduce regulations ignored by the Government
Now not everyone in Australian Labor shares his viewpoint. But my God wouldn’t it be nice to even have a single NZ Labour MP who gave speeches like that.
June 14th, 2008 at 5:05 pm
Enough already, thanks. Emerson seems to personify what’s wrong with the ALP. He doesn’t seem to have a clue about how unions work, and the rest is mostly Third Way platitudes. He’s one of yours, really.
For example, “Athletes, singers, artists, dancers, authors and scientists are self-interested but this does not make them selfish.” Fine. What about exploitative employers and rich tax cheats and…
[DPF: Thank you for proving my point - that NZ Labour is vastly different to Australian Labor]
Vote:June 14th, 2008 at 5:08 pm
David I agree with much you say. The chinks in the Rudd government are showing, working at break neck speed without taking the public with them.
Vote:There’s a statement which says “If it looks too good to be true, then it is” I believe matches Kevin Rudd. Never a hair out of place and a barrage of nothing from his mouth.
I don’t agree with you about Malcolom Turnbull as being the next leader. Turnbull is a wealthy ex-merchant banker who frankly seems to speak through the mouth of someone from Threadneedle Street in the City of London. I don’t think he’s got the mongrel to appeal to the ordinary Australian.
The longer Peter Costello stays in parliament, the longer the Australian economy declines , the greater the chances are he will return.
Costello at the dispatch box is the best parliamentary performer I have seen anywhere. In government he had the ALP on the back foot, with withering answers and a brilliant capacity to seize the moment.
I don’t think Costello will resign now, I think he will stay in the back benches much like John Howard did. Peter Costello will lead the Liberals hopefully. Brendon Nelson actually is now making traction as leader.
The Labor caucus with its variety of left wing misfits and militant females also are cause to give Rudd concern.
June 14th, 2008 at 5:10 pm
Jafapete:
Instead of dictating to DPF what he can and can’t blog about (a futile exercise), you could always click here instead… they’re one of yours, really.
Vote:June 14th, 2008 at 5:18 pm
Nome, Wasn’t trying to dictate to DPF what he can and can’t blog about. Perish the thought! *
During the 1980s, we learned that the label on the outside of a politician isn’t always a reliable decsription of what’s on the inside.
*Edit: In fact, I’m grateful to DPF for enlightening me on just how right-wing some members of the so-called Labor Governemnt are.
Vote:June 14th, 2008 at 5:39 pm
Nomestradamus – “thanks” for that dirty little link… I need to take a shower now, I feel so grubby after that unintended visit.
Vote:June 14th, 2008 at 5:42 pm
Apologies 3-coil – I just thought Jafapete would be more at home on “the other side” as it were
Edit: you can run your mouse over the hyperlink first, read the linked website reference at the bottom of the screen, then decide if you want to “go there”.
Vote:June 14th, 2008 at 5:46 pm
Yes, one must always shower after a visit to the nauseating sub standard blog where nome lurks. Just imagine catching jaffatroenteritis or the dreaded rogered nome disease.
Vote:June 14th, 2008 at 5:54 pm
Nomestradamus – I had to burn the clothes I was wearing too…
Thanks for the hint about identifying the hyperlink at the bottom of the screen, I’ve never noticed that there before. I will be more careful next time!
Vote:June 14th, 2008 at 6:12 pm
Sigh! Rand explained this selfish/self-interested confusion 30 + years ago…..can’t people keep up and not look like uninformed tools? Reinventing the wheel people…..boring….
Vote:June 14th, 2008 at 6:48 pm
Kevin Rudd is on his way out – the poor darling cannot get out of bed in the morning without consulting a focus group. Rudd has been bouyed to date by the shameless bias that the Australian media has in favour of him and the Australian Labor Party. If there was an organisation called SPOCK (society for the prevention of cruelty to Kevin), the majority of political commentators in Australia would be corporate members – with the exception of Andrew Bolt (of course).
Sheridan’s critique in The Australian has been a long time coming and he has only just caught up with general unease in the community that Rudd is not performing to the expectation or gravatas of a prime minister. His admission in the article that he has been duped by the Rudd persona is amazing for such a senior journalist.
As for the tax cuts (thanks) – they are a legacy of the good economic management of the previous government.
Whilst I respect the federal minister for small business, Craig Emerson, he lacks the political stature to achieve support for his brand of “market democracy” from within his own party – his speech to the Sydney Institute was pure cant and another attempt to revise the history and credentials of the Hawke and Keating prime ministerships. Unfortunately, Emerson is about the only member of the Labor Party who knows that small business employs about 70% of the Australia workforce – a fact that his colleagues are completely unaware of.
The betting is that Rudd will be gone by this Christmas.
Vote:June 14th, 2008 at 9:20 pm
Sheridan is a fuckwit, still in thrall to the neocons….anyone who thinks he talks sense is in need of a brain transplant. Sorry Gerard but you are speaking serious crap and don’t know what you are talking about. Rudd will still be with us at Xmas sweetie, he’ll be there until the next election. God knows what ‘betting’ you are talking about.
Vote:June 14th, 2008 at 9:34 pm
lloydois
Hey – thread-jack I know but I was waiting for you to turn up because of this:
Yeah – that was a shocking bloody speech. Still, it looks like Alzhiemers is a contagious disease:
Vote:
June 14th, 2008 at 9:42 pm
Thank Dagg someone has the sense to reference Adam Smith’s Theory of Moral Sentiments, instead of just quoting Wealth of Nations ad nauseam. The latter is a subordinate of the former.
Vote:June 14th, 2008 at 10:15 pm
Emerson’s articulation of market democracy/ liberalism and how it is part and parcel of social health and personal freedom reminds me of the great reform era of the 84 to 90 Labour Govt. not only the dismantling of insane policies and implementation of sane ones, but a great dialogue with the public.
Who could forget Trevor deCleene’s way of describing equality of opportunity on state TV – ‘me – socialist? Yes, I’m a Range Rover socialist – I want everyone from the wrong side of the tracks like me to have equal opportunity to own a Range Rover’
I don’t see much chance of a public dialogue that markets under the rule of law are the way to prosperity and genuine social justice coming from this National Party let alone this current NZ Labour Party.
ACT has been the only party represented in parliament with a consistent and principled adherence to and advocacy of market led delivery of prosperity, social health in all its dimensions and the protection of personal freedoms. All the other small parties have been me-too copy cats of Labour and National’s big gummint solutions to everything.
If big gummint had any capability to deliver prosperity, social health and freedom to the New Zealand people it would have done so by now – because we’ve had SmartGummintClark and no impediments to their programmes – the best external economic environment of a generation, weak opposition, compliant media, approving intelligensia, torrents of cash into the gummint delivery agencies and breathtaking political skills.
All to get what we’ve now got – poorer than Greece, poorer than Tasmania, a litany of social maladies and injustices, and blatant attacks on personal freedoms.
This time around enough voters may vote for the guts to do what’s right – it won’t be scary. What’s scary is what we’ve got now. And promises to keep it that way.
Vote:June 14th, 2008 at 10:50 pm
Clayton Cosgrove. Maybe not the world’s best but I believe he is small business minister.
What we really need is a minister of making small businesses bigger.
Vote:June 15th, 2008 at 6:31 am
Thanks DPF for drawing our attention to Emerson’s speech. If you read it as a stand-alone document, forgetting the context of Rudd/Labor Party etc, then it’s very compelling as a 21st century articulation of good government.
Regrettably I haven’t heard a syllable from the Nats in this vein, and of course NZ Liarbor would excommunicate a minister who gave a speech like this. ACT is the only party that fits this mold in the NZ context, but generally doesn’t communicate it very well.
Any party that picks up Emerson’s language and ideas in the upcoming election will catch a wave. You’d have to exclude Liarbor as when the phone’s off the hook nothing can save you, but the opportunity is there for others.
Vote:June 15th, 2008 at 7:39 am
David, it’s bit of a shame that Emerson’s speech was buried in this blog entry on Rudd’s personal performance. It deserved a posting of its own.
[DPF: Yeah I sort of agree.]
Vote:June 15th, 2008 at 12:30 pm
The Optimist (10:50pm) – i think you are being too optimistic:
Clayton Cosgrove – he is, at best, just a “small minister”.
Vote:June 15th, 2008 at 3:55 pm
A very good speech. Is Mr Emerson a Trade Union Leader, a Teacher, or a homosexual.
Vote:June 15th, 2008 at 9:49 pm
If you equate productivity with sales, becuase there is no point in making a product if you cannot sell it, then it seems to me that as the dollar goes up in value with the overseas market then wages should be reduced so that the product sells.
This was the situation in the past months when unions were crying about the loss of jobs becuase the product didn’t sell. We cannot compete with the high dollar. Forget the low 3rd world wages, the solution is to raise them as appears to be happening.
Surely a much better solution would be for union and management to work together with adjustments to wages, including the bosses packet, to achieve a sales price that successfully sells the product. As the dollar goes up then wages go down and there is less money to purchase imports so the ecconomy remains in balance. Of course as the dollar goes down so wages go up providing more money for purchess of domestic products and balance the cost of overseas products.
But in the current and seemingly everlasting distrust between worker and boss such a common sense solution will never occur. Another problem for it to work all those in non-goods production would have to share the burden too, bureaucrats, pensioners etc. Common sense but probably impracticable.
Vote: