Laser pointers may be endangering more things than aeroplanes landing at Australia’s airports. Brendan Nelson might be another casualty with a jittery laser pointer in his hands showing just how nervous he was when addressing the Brisbane Club yesterday. This, coupled to the fact he uncharacteristically read the speech, apart from the parts so well-rehearsed that he appeared to recite them from heart, and a decision not to take questions at the end, indicate that he knows this budget will make, or break, him, and he’s desperately worried it’s the latter.
I found his speech interesting, but ultimately uncompelling from a political and intellectual point of view.
The public doesn’t want to see programs cut, so Nelson needs to find intellectually respectable reasons for agreeing with them. Not that the public will mind if he doesn’t, but the commentariat, who control his gateway to the public will. Neither Nelson, nor his Treasurer, have quite found the words to keep both constituencies happy.
I suspect that they are to be found in some variation on the theme that cutting government expenditure right now would be fighting the last battle. That rising food and fuel costs, coupled to the interest rate rises we have just had, and the credit rationing that is taking place as a result of the sub-prime crisis, mean that tomorrow’s inflation rate will be very much lower than yesterday’s.
In other words, Kevin Rudd’s government is a government of the past, whose only plan was how to get into government, not what to do once it was there.
The line that this is not a crisis opens him up to the scorn that Wayne Swan heaped on him this afternoon. Swan is another politician for whom this budget is make or break.
There are also other risks for him in the speech that he gave to the Brisbane Club. One is the perception that under the Liberals Work Choices would be BACK. Last time Australia was in similar economic circumstances was in the 1970s when inflation, partly caused by high petrol and money prices, was compounded by a wages break-out worse than anywhere else in the world. Nelson relives those days in his speeches at his peril. A wages break-out is one of the threats that we face courtesy of Labor’s ditching of sensible labour reform, but Nelson can’t say that. If there’s one thing blue-collar conservatives fear more than prices going up, it is losing their job or facing a pay cut.
Another problem in Nelson’s speech was his reliance on a graph going back to the 1950s relating terms of trade to inflation. The economic smarties will have a field day with that. It’s not immediately obvious how the prices we are paid for our exports directly relates to the CPI, and 1957 isn’t just another country, it’s almost a parallel universe as far as the economy is concerned. At that time we had a fixed dollar exchange rate and a heavily protected and much more regulated and centrally controlled economy. One can only think that the chart was chosen because it was the only indicator Nelson’s advisors could find which showed the Howard government’s inflation performance in a benign light.
If questions had been allowed I would have asked Doctor Nelson whether he ever regrets not losing the leadership battle to Malcolm Turnbull. I’m sure he would have had a form of words, but with the weight of a slight 9 percent approval rating obviously weighing heavily on him, who knows what he might have said?
Which is part of his problem at the moment. Whatever the question and whatever the issue, with Labor riding this high, there probably isn’t a right answer to any question, which would make anyone nervous.