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Labor should easily have won Australia's election

Labor has done a terrible job in promoting its own successes.

Last Modified: 06 Sep 2013 16:46
Ken Haley

Ken Haley is a journalist and author of Emails from the Edge.
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Prime Minister Rudd has failed to capitalise on low unemployment and interest rates [Reuters]

It used to be said that "Australia rides on the sheep's back". In the middle of the 20th century, the wool clip contributed 56 percent of the nation's entire agricultural production. Today, when that figure has shrunk to nine percent, it would be more accurate to say that Australia is in a hole - and is continuing to dig.

Mining's dominance as an export producer for the country now mirrors that of wool 60 years ago. In 2010-11 it accounted for 55 percent of all export earnings from industrial production.

Australians pride themselves on having an easygoing, affable nature - and, if economic well-being is a true barometer of happiness, the mood of the nation after 22 consecutive years of growth ought to be little short of delirious. Instead, uncertainty and anxiety are generally reckoned to be at levels usually associated with a country in the depths of recession.

The ground where Europeans settled in Australia is amazingly fertile; under that ground is one of the richest and most diverse lodes of minerals anywhere on the planet. No wonder Australian writer Donald Horne earned himself a durable place in encyclopaedias of the future when, in 1964, he christened Australia "the Lucky Country".

Compared with other OECD members, and in stark contrast to the sick economies of southern Europe such as Greece, Italy and Spain, Australia's economy is one of the world's healthiest.

It's probably a pity that the Labor Party, which has been in power for the past six years, hasn't done more to publicise the fact that 2013 is the International Year of Statistics - because it does have a few gleaming figures with which to bedazzle the electorate.

Australia central cities' voters overlooked

Unemployment stands at 5.5 percent, interest rates are at an all-time low of 2.5 percent and - as Prime Minister Kevin Rudd has repeatedly remarked - the three leading international credit agencies have all given Australia the highest possible rating (AAA) for the first time in its history - an accolade shared with only seven other nations.

Almost uniquely among OECD nations, the land Down Under didn't lapse into recession during the global financial crisis of 2008-09.

Public opinion

Opinion polls show that, as at almost every election, the economy is far and away the most important issue on voters' minds. So why is a government that has presided over such a successful economy teetering on the edge of a political abyss this weekend?

Those same polls are predicting that, when 14 million voters cast their ballots on September 7, the conservative opposition - a coalition made up of the city-based Liberal and country-based National parties - will sweep into power. One poll released on Monday showed Labor's primary vote at just 33 percent.

Under the Australian voting system, it is exceedingly rare for a party to win government without at least 40 percent of total votes cast. When Labor formed a minority government after the 2010 election, it did so with only 35 percent of the votes - and the election outcome was hanging in the balance for 17 days.

Economists and politicians agree that the main reason Australia's economy stayed buoyant while most other countries experienced the worst economic conditions since the Great Depression was the investment boom in Australia's iron-ore and other mines that fuelled the expansion of China's construction and infrastructure advances over the past five years.

Now investment in new mines is declining, both Rudd and his opponent, Tony Abbott, have warned that the boom times are coming to an end. Abbott blames government spending for leaving the nation's finances in deficit. Rudd extols the government's economic record and says his side of politics is the only one with a "vision for the future".

The theory that, sheeplike, the Australian economy must "ride on the quarry truck" or kiss its luck goodbye is not one that appeals to Professor Peter Love, senior politics lecturer at Melbourne's Swinburne University.

"This election is going to be decided by the anxious classes," Love told me. "It's not so much that people are desperately poor, it's the people who are on the up - but are none too sure whether they're going to stay on the up.

"There's a lot of fiscal pain going on out there: a few points added on to the interest rates could cause catastrophic pain."

The Prime Minister's reminder of how strong the economy was compared with Europe's "basket cases" cut no ice. "He'd do well to remember British Prime Minister Harold Macmillan telling his people: 'You've never had it so good.' They belted him for that."

The academic said people were right to be anxious, but for a more profound reason than any slowdown in mining investment. "China will be buying our minerals for years to come," he said.

"Essentially, Australia is vulnerable because of its structural deficit. We're committed - Labor and Liberal parties alike - to spending more than we're raising in revenue."

The federal parliament recently approved a $5 billion-a-year national disability insurance scheme, and the conservative leader has promised that, as prime minister, he would give working parents six months of paid leave, at their full employment income, after the birth of a child. The independent Parliamentary Budget Office estimates that scheme would cost $5.5bn a year from its inception in mid-2015.

Australia's opposition buoyed by surveys

"The reasons Labor is lagging behind in the polls have largely to do with the way it has mismanaged the selling of its policies in the past three years - its policies on asylum seekers, the mining-super-profits tax and the carbon-pricing regime," Love said. "But there's also the degree to which Rudd in particular has shown himself astoundingly capable of scoring a spectacular run of own goals."

Not that Abbott's paid-parental-leave scheme filled Love with hope that Abbott's Liberal-National Party coalition would be less profligate: "It's a new low in stupidity - talking of the need to rein in the deficit while leaving absolutely sacrosanct vast swathes of middle-class welfare."

The country's realistic hope of extending its run of luck depends on one thing: "We need to diversify our economic base away from an overreliance on one sector. We ought to be targeting some high-end manufacturing enterprises."

Advanced-capacity computer chips are one sphere in which Australian expertise could be a world leader. Governments should also be redoubling their commitment to higher education: "University funding is progressively being squeezed," said Love.

"This needs to be reversed because in the longer term other countries that invest in their own intellectual capital are going to leave us marginalised. We've become so short-term in our public policy approaches that anything visionary is undervalued by our would-be political leaders."

Many in the Labor Party will not blame the economy, or even themselves, if predictions of defeat in this weekend's poll are borne out. Rudd has led cries of bias against the Murdoch press, which dominates the media mogul's homeland.

Even by Rupert Murdoch's standards, it is true his papers' campaign against this Labor Government - "crusade" would not be too strong a word - has been virulent. His Sydney mass-market tabloid The Daily Telegraph recently portrayed Rudd's inner Cabinet as cast members of the 1960s TV spoof of Nazi Germany, Hogan's Heroes.

Whether this has reduced his newspapers to little more than propaganda sheets is a lively issue among media commentators. Against this, it is little short of a miracle that the neo-liberal British magazine The Economist this week called for the Labor Government to be re-elected.

In an editorial damning both sides of politics in almost equal measure, The Economist praised Labor's economic management, but deplored its internal strife. Rudd - whose most serious character assassins have been from his own side of politics - is in office after deposing his predecessor, Julia Gillard, who, back in 2010, had deposed him.

In doing so, the magazine recognised that voters faced a dilemma: "The choice between a man with a defective manifesto and one with a defective personality is not appealing - but Mr Rudd gets our vote, largely because of Labor's decent record."

Sadly for Rudd and his party, Australians buy nearly 20 times as many Daily Telegraphs as Economists.

The latter's endorsement will have no perceptible effect out in voter land. If Labor is to enjoy a resurgence, Rudd's conversion to the cause of same-sex marriage - a popular cause among people under 40 - may be the spark. Tony Abbott, a Catholic who once trained for the priesthood, maintains a traditional conservative's opposition to the idea - while his lesbian sister, who is running for a spot on Sudney's city council, has said she wouldn't try to change his mind.

This is a busy month for psephologists: the Maldives also goes to the polls on Saturday; two days later in Norway, another Labour Government is at risk of losing power; and two weeks later, Germany votes.

But Australian voters know little of such matters. It seems the "anxious classes" can't believe their country's luck anymore and, when they can wrest themselves away from sporting distractions, tend to gaze helplessly at the post-mining future as though it were an empty pit.

Which reminds me of another well-worn saying, variously attributed to American humourist Will Rogers and British politician Denis Healey: "When you find yourself in a hole, stop digging."

That's good advice, as far as it goes: what Australians keen to turn a dollar want to know is, after you stop digging, what do you do next?

Ken Haley is a journalist and author of Emails from the Edge.

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The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial policy.

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