Lasting legacy sold for quick buck

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Miriam Lyons considers whether politics as usual can still deliver reform in the face of powerful vested interests in the Sydney Morning Herald.

Published in the Sydney Morning Herald’s News Review on 3 July 2010.

Before the last federal election Valerie Chalkley, a swinging voter, told SBS TV’s Insight that she was suspicious of Kevin Rudd’s background in the diplomatic service. ”He’s saying things that we want to hear, being diplomatic, rather than things that we need to hear.”

Julia Gillard may not have a history of international flesh-pressing, but after a week in which she not only renewed diplomatic ties with the mining industry but signed a peace pact with it, replaced Rudd’s group of four with cabinet’s G19, and sent some carefully worded messages to voters out there in focus-group land, our new Prime Minister is proving to be a more skilled diplomat than her predecessor. If this week’s Newspoll is anything to go by, she has apparently been saying things that 7 per cent of Australians were waiting to hear.

The big question is whether Gillard will satisfy voters such as Chalkley by saying what people need to hear, not just parroting what’s on the top of voters’ minds when the pollsters call. The answer will determine whether a Gillard government is capable of delivering good policy as well as winning elections.

A government announcement this year was described by The Australian’s Michael Stutchbury as an example of ”evidence-less policy” in which ”backroom talks … delivered a special deal to politically well-connected rent-seekers with no public accountability for what the taxpayer gets in return”.

He might have been talking about the agreement to give away carbon pollution permits to ”trade-exposed industries”, whose claims were exposed as largely unfounded in a recent Grattan Institute report.

His description could equally be applied to this week’s negotiations over how much the Gillard government would knock down the price of our natural resources in order to avoid being held hostage by the mining lobby.

In fact he was talking about the decision by the Communications Minister, Stephen Conroy, to give channels Seven, Nine and Ten a $250 million discount on their access to the airwaves, in advance of a long-overdue switch to digital TV. Although the free-to-air occupiers of the existing analog spectrum had already been given one of the politest eviction notices in history – starting when the Coalition began the switch 10 years ago with another licence fee giveaway – Conroy decided they needed a little extra help.

The influence of fossil fuel companies and high-emissions industries on Australia’s climate policy over the past few decades has been well documented. But their activities are just the most obvious example of the forces at work in many policy failures – the political power of vested interests.

This power can be seen every time state and federal governments fail, yet again, to obtain sufficient environmental flows to keep the Murray River alive, even though its death will be far more devastating in the long run to everyone who relies on the river than restructuring or closing some of the Basin’s thirstier businesses.

It was at work in Tasmania in 2004 when the timber company Auspine came up with a plan for ending old growth logging, prompting Gunns Ltd to retaliate by refusing to stock its timber in its stores, and the Tasmanian government to sell off Auspine’s timber allocation to a competitor a few years later.

The pattern is the same, whether it’s timber or television: it’s possible in this country to cash in political power for under-priced access to shared national assets.

There’s an old phrase for the practice of swapping a lasting legacy for a quick buck: ”selling your birthright for a mess of pottage”.

After pulling the teeth out of the mining tax in order to help its election narrative, the new Gillard government has not yet shown that it’s willing to buck this trend. It raises the question: is Australian politics still capable of delivering important policy reform in the face of opposition from powerful interest groups?

Ross Garnaut, a mining company chairman, was concerned about the sudden announcement of the tax, as well as some of its details. Nevertheless, he spoke out in May about his far greater concern that a policy that ”asserts some hard propositions about the national interest, at the expense of some private interests” could be overturned by the influence of those private interests.

Garnaut said: ”What is important is that this time, on this subject, we demonstrate that we can still discuss policy proposals with clarity and rigour, listening to interested parties, with their words having influence according to their content, and not according to the cruder instruments of political influence that accompany them.”

Nothing could be more unlike the process that led to the changes to the tax announced yesterday.

With attention now focused on Gillard’s pre-election clean-up of any controversial policies, it’s easy to forget that the Rudd government really started to dive in the polls only when its single most controversial piece of legislation was shelved. Because the emissions trading scheme wasn’t a very popular or well-understood policy, the most obvious reason for voters’ disappointment was that they had lost faith in the Rudd government’s willingness – and ability – to take principled stands and fight for its agenda.

One of the good things about the mining tax debate is that it has focused attention on the mining lobby’s record of playing Chicken Little and being proven wrong, on issues such as the introduction of the petroleum resource rent tax, the extension of royalties to gold mining, and the introduction of native title legislation.

As long as company directors, in general, believe that short-term profits are their most important measure of success, then corporate lobby groups will claim that the sky is falling in when any changes are proposed that could affect their bottom line.

Most voters would probably like to hear that their political leaders are capable of turning every policy reform into a win-win proposition. But what they need to hear – clearly and strongly – is that some policies that are win-win in the long term are win-lose in the short term, and that the losers from good long-term policy can’t be allowed to drown out the voices of everyone who will benefit from change.

In this term Labor has managed to push through some reform in the face of opposition from fairly powerful groups. The Australian Medical Association was unhappy about the GP super clinics, and Telstra certainly wasn’t happy about the national broadband network.

The good news for Gillard is that while voters can get nervous about any controversial policy change, they will usually embrace the changes once they’re bedded down. John Howard didn’t lose an election on the back of the GST, and Keating didn’t lose an election on the back of native title legislation.

When the Gillard government gets back into the ring on climate change it will be facing most of the same interests that just outmanoeuvred it on the mining tax debate. To win, it will have become extremely adept at telling voters what they need to hear. Because this time it can’t afford to throw the match.

Miriam Lyons is the executive director of the Centre for Policy Development, a progressive research institute. She is co-editing a book with Mark Davis called More Than Luck: Ideas Australia Needs Now.

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