Big change down under

Australians ended six years of tumultuous Labor Party rule and gave the conservative Liberal Party and its allies a healthy majority in parliamentary elections held last weekend. Mr. Tony Abbott will assume the office of prime minister, the third to hold that post in three months. Mr. Abbott has his work cut out. Restoring political stability in Canberra should not be difficult. More pressing is winning over voters, who, despite backing his party, do not hold him in especially high regard, and regaining the footing of a slowing Australian economy. None are impossible, but all require a deft touch, one for which Mr. Abbott has shown little proclivity in the past.

Voting is compulsory in Australia, so the results of Saturday’s ballot provide an accurate reading of public sentiment. As expected, the Liberal-National coalition crushed the Labor Party, claiming 88 seats, an increase of 16 from the previous Parliament. The Labor Party dropped to 57 representatives, down from 71. (It had ruled with the support of independent and Green representatives since 2010 — the first minority government since World War II.)

For once, economic policy was not an issue. Australia’s economy has grown for 22 years, unemployment and interest rates are low, and household incomes have increased in real terms. Still, public dissatisfaction with Labor government has steadily increased over the six years it was in power. The causes of that disaffection are threefold. The first, and most important, was the bitter infighting within the party. Labor, led by Mr. Kevin Rudd, came to power in 2007, and Mr. Rudd assumed the office of prime minister. He was ousted three years later in a coup led by his deputy, Ms. Julia Gillard. The rebels had chafed under Mr. Rudd’s autocratic style, which alienated many in the party. Ms. Gillard kept Mr. Rudd by her side as foreign minister, using his experience and expertise to bolster her government and signal party unity after the coup.

While Ms. Gillard made history as Australia’s first female prime minister and proved a formidable debater in Parliament, her government proved less than steady. Forced to make deals with independents and the Greens in a minority government, the prime minister looked weak and her policies inconsistent. The realization that Ms. Gillard could not lead the party into elections obliged Labor to call a chastened Mr. Rudd back to the prime minister’s office at the beginning of the summer. The move made sense on a tactical level — Mr. Rudd was a far more popular figure — but it was both too late and reinforced the image of Labor as unstable.

The second reason for the party’s demise was its support for a carbon tax. When he first took office, Mr. Rudd reversed the policy of the previous government and signed the Kyoto Protocol on global warming. He also promised to introduce a carbon emissions trading scheme, a pledge that came up empty when the Senate failed to follow through. Still, Labor had said it would not impose a tax on the country’s biggest carbon polluters, the energy sector, a policy Ms. Gillard reversed to win the support of other legislators after Labor was shellacked in 2010 elections. That shift outraged voters. A similar reversal — the call by Mr. Rudd when he returned as prime minister to deny asylum seekers entry into Australia — also alienated voters. For die-hard Labor supporters it was a mean-spirited reversal; for others, it looked like an opportunistic shift. Mr. Rudd brought Labor back, but he could not close the gap.

Mr. Abbott, once deemed “unelectable” even by some of his supporters, will now take charge. He has promised to scrap the carbon tax by 2014, and replace it with taxpayer-financed incentives to reduce pollution. He has promised to repeal a 30 percent tax on the profits of Australia’s coal and iron ore mining companies, the engines of the country’s economic growth that have been slowing as China’s economy decelerates. At the same time, he has pledged to return the budget to surplus, a task made immeasurably more difficult by his campaign pledge to expand paid parental leave.

When it comes to foreign policy, Mr. Abbott has said that he will focus more on relations with Asia; not because of a de-prioritizing of Australia’s traditional allies, the United States and Great Britain, but because focus has to be on “relations that need the most attention.” He is confident that he understands thinking in Washington and London; he is less so about goings on in Jakarta, Beijing, Tokyo and Seoul.

Indonesia looms large in Australian foreign policy calculations. It is a huge neighbor with the potential to have a great impact on the country: if nothing else, it is the origin for most of the asylum seekers. China, too, is critical, given its demand for Australian exports. Japan once played that role, but it has been eclipsed by China’s insatiable appetite. But there remain many opportunities for Tokyo and Canberra to forge a still stronger relationship. Japan has worked closely with Australia to strengthen the institutions and norms of regional governance. The countries closely worked together, and with the U.S., to promote security and stability in the Asia Pacific. Indeed, after the U.S., Australia is Japan’s closest security partner. It is hoped that Japan and Australia under Mr. Abbott and his new government will deepen their relationship.

  • http://www.sheldonthinks.com/ andrew Sheldon

    The only problem with this article is that it omits the reason why Gillard and Rudd were forced to backtrack. It was not just its minority govt; it was the fact that it was in numerous respects shocking policy. Sweeping changes were made to policy (i.e. grand gestures), but they were not well executed, and if they were all executed, their would have been more debacles like the home insulation scheme, which actually is ‘good’ Keyesian-style stimulus, if you have to have boom-bust economies (and we don’t). What a sorry choice we had. Its good because it would have actually brought forward capital costs, and created reduced costs of living. That makes more sense than stimulating final consumption. Its like building small ‘productive’ power stations, knowing that there is a final consumer. It would have been smart if it was not accidentally ‘green’ policy.

  • Scott Durand

    Before throwing stones at Australia’s refugee policy, a newspaper that is situated in Japan should have a quick look at how many refugees from Afghanistan, Iraq, Iran, Sri Lanka, the DR Congo or Burma that Japan has accepted into your society in the last five years.
    According to the World Bank 2008-12
    Australia: 23,434
    Japan: 2,649
    if this was a football game it wouldn’t look good for Japan.
    The Refugee Council of Australia states make Japan tiny refugee program look even more minuscule.
    2006-11
    Australia accepted 67,107 refugees.
    Those who live in glass houses shouldn’t throw stones.

    • JTCommentor

      I think you are imagining the stones being thrown. I see one small and more or less neutral reference to the refugee policy being a factor in Rudd’s loss – which of course it was – he turned around policy to win votes, doesnt matter what that policy was, it alienated some of his supporters. This is an article on the change in political parties in Australia, so I dont understnad your comment.

      • Scott Durand

        I like Ken’s response better. Its the more or less part of your comment that leaves much room for critical thought. I understand the main point of your text was simply about political change in Australia. But the sub text was overly negative of Australia’s refugee policies. I for one would like to see a larger intake of humanitarian refugees because it makes Australia a better place to live. How about Japan also taking say 5000 humanitarian refugees a year? Did Japan ever meet its Kyoto agreements?
        Ken, mate, next time drive, not many combinis in the middle of the desert.

    • Ken5745

      I think the glass houses are in Australia. It has almost the size of China and the US in land area but only has 23 million people compared to 1.4 billion in China and 307 million in the US.

      Japan which is situated in the region known as ‘The Rim of Fire” has only 4.9% of the land area of Australia but has a population of over 126 million. Why ask Japan to take in more refugees?

      Australia has all the natural resources it wants and is a food exporter. Japan has almost no natural resources and yet it can support more than 126 million people. It’s done though industrialization.

      I flew across Australia and have seen for myself that it is indeed an “empty land”.

      Without more population Australia will always have an acute shortage of labor even in the mining industry, which is Australia’s ONLY worthwhile industry, overshadowing even the brewery and gaming industries.

      Oh, Scott may give the standard stock excuses:

      1 There is a lack of water to support more than 23 million people.

      This is rubbish. Ever heard of reverse-osmosis desalination? Also there are plenty of rain water in the Northern coast during the Monsoons and perennial floods in Northern Queensland. The hot humid climate is not a problem to folks living in the Equatorial belt.

      2 The center of Australia is a desert. Only the coastal rim is suitable for people to live in.

      If the Israelis can turn their desert into a “Hanging Garden of Babylon” why can’t the Australians? Ever been to Las Vegas? Well, it is situated in the desert.

      3 There is not enough infrastructures to support more than 23 million people.

      This is also a weak excuse. Hey, the Wild Wild West started with nothing. They built all the infrastructures from scratch. If you don’t have enough infrastructure when are you going to build them? It’s a circular argument.

      4 We don’t want more population because of pollution.

      No one is asking Australia to increase its population to more than the population of Japan. How about 40 million for a start? This means Australia can take in more migrants, not only from Europe but also from Asia if Abbott really wants to turn his focus to Asia.

      5.We have a predominantly white population and multiculturalism will be a disaster for Australia.

      Enough said.

      • Scott Durand

        Not sure if the Japanese should open a discussion of racism. See my previous comment about humanitarian refugees. Reinforces my message that people who live in glass houses shouldn’t throw stones.
        Sure, Tony Abbot leaves much to be desired in a leader, especially in terms of his humanitarian approach to relationships with our neighbors.
        Next time instead of flying across Australia, you should drive. Fairly certain most humans wouldn’t like to live in desert conditions.
        There is room for more people in Australia, and hopefully technology will advance this further.
        China has been the number 1 source of immigration to Australia for a number of years, every major Australia city is more multicultural than most cities in Japan. Therefore, your observation about Asian immigration is incorrect in relation to Australia.