Yesterday’s economics speech by Tony Abbott was a major disappointment, confirming rather than reversing the impression that the Opposition leader and economics don’t have much more than a nodding acquaintance.

This is dangerous for the coalition. One of the critical aspects of its brand is its economic credentials. It’s fine to trail Labor on health and other social policies — the community expects Labor to handle the caring ‘n sharing stuff well. But they expect the coalition to bring rigour and competence when it comes to the economy.

Abbott is doing some policy speeches in the pre-Budget recess because he knows he needs to counter the growing perception he’s just an aggressive naysayer. But they’re “headland” speeches because he hasn’t produced any policies and because, presumably, it worked for Howard.

But Howard made headland speeches because he just had to keep breathing to beat Keating. Abbott, an incorrigible commentator who having gloated over rising opinion polls must now explain them when they fall, presumably doesn’t fancy his chances quite that much, especially after the last week.

Abbott kicked off the speech with a quote by Keynes, as if to dispel the idea he was a lightweight.  The quote was the famous one about stimulating activity by burying money, which Abbott went on to suggest was about the standard of the government’s stimulus program. Coincidentally it’s a good description of his climate action policy, which involves burying billions of dollars on farms throughout the country in the hope that will sequester carbon.

But pity Abbott didn’t provide the full quote from Keynes, which concluded:

It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.

That might have been inconvenient though, since “building houses and the like” is what much of the government’s stimulus package is aimed at.  Abbott devoted considerable time to attacking the government on school spending and insulation.  Indeed most of the speech was similar to Abbott’s approach in the health debate: incessant criticism of the insulation program and school spending, general attacks on the government, lengthy justifications of the coalition’s time in office, and not one scintilla of policy.

The message at the heart of the speech, however, was that 1. there was no economic crisis, or at least not one here, and 2. that even if there was, counter-cyclical fiscal policy won’t work. Abbott quoted Glenn Stevens’ comment about the GFC being a problem for North Atlantic economies.  That presumably will come as a joyous news to New Zealand.  You’ll recall New Zealand was held up by Abbott as an example of a better way to handle the crisis than our own, despite that country continuing to struggle with high unemployment and a collapsed property market.

And in maintaining — in the face of all available economic data — that the stimulus packages had no effect, Abbott is reiterating the position of Malcolm Turnbull from this time last year — one that Turnbull eventually had to partly resile from — that they don’t work because some conservative American economists say they shouldn’t.  It’s odd, but for a leader who was supposed to be utterly different from Turnbull, Abbott sure has quite a few things in common with him.

Abbott’s position gets more complicated, though, when he goes on to defend the Howard government’s economic record and declare he “thoroughly absorbed its economic ethos”.  What Abbott absorbed, strictly speaking, is John Howard’s economic ethos. That was the one based on high government spending to attract electoral support, via middle-class welfare and regional pork-barrelling.  That was the one that Peter Costello, who is so contemptuous of Abbott’s economic credentials, struggled against as Treasurer, with declining success, until the Howard government drove the Budget into structural deficit by making us more dependent on externally vulnerable corporate tax revenue and locking in a vast structure of handouts and tax expenditures for people who don’t need them.

The extent to which Abbott has absorbed that shows in the only two policies we’ve seen from him so far: the climate action plan, involving billions handed to industry to maintain “business as usual” carbon emission, and the paid parental leave plan, which throws money at people on $150,000 per annum — and more money than it’s giving to people on lower incomes.

Abbott talked quite a bit about the importance of reform. He rightly castigated the government for not being as reformist as its two predecessors. “The reforms that the next coalition government will champion must be different from those of its predecessors but it should be no less committed to reform,” he declared.  His audience might have expected Abbott at that point to indicate — even in headland fashion — what those reforms might be. And what were they?

Well, cutting spending back to 25% of GDP, which Joe Hockey had announced ages ago (having changed his mind from 24%).  How that will be done remains a mystery.  And more IR reform — although not a return to Workchoices.  We knew about that too — as Abbott foolishly stated on the day of his leadership victory, “the phrase Workchoices is dead”.

What about other areas? What about housing — the emerging critical economic problem facing Australia?  What about competition in the finance sector and the need to rein in the Big Four banks?  What about retirement incomes and the great rort of superannuation fees and commissions? What about industry policy and the continued, costly propping up of a dying manufacturing sector? Or a symbolic reform such as getting rid of the PIRs that benefit foreigners more than Australians?  And what about China, so critical to our economic future?  And our continued unease about foreign investment?

All areas not merely needing considered thought and effective action, but areas where the coalition could neatly carve out a policy alternative to the government.  There is enormous opportunity for the coalition to pursue a credible economic reform agenda in areas where the government has been unable, because of the GFC, or unwilling to act. Abbott ignored all of that, in favour of harping about insulation programs and boilerplate about how the coalition is the party of small government.

Hockey and Andrew Robb need to stop the decline in the coalition’s economic image ASAP.  Robb’s emergence today was a welcome return.  He quickly showed how it is done — within seconds of his NewsRadio interview he was explaining that Australia’s longest periods of economic success had been associated with coalition governments.  It’s the sort of association that needs to be hammered to voters who, for the first time in years, are looking askance at what the Liberals are offering them economically.