Behind the downfall of Kevin Rudd there were clearly some issues about his style and technique of governing — his presidential, almost dictatorial, dominance of decision making with the concentration of power in his Prime Ministerial office; a fascination with playing as a world leader on an international stage; an almost pedantic concern at home about the process that led to innumerable reports and enquiries.
Yet there were as well matters of policy substance behind his decline from being Labor’s election winning leader to the man his colleagues decided could not win again and therefore needed to be replaced.
To me the one that stands out was the failure to convince Australians that the global financial crisis really was a crisis and that the actions the government took really were necessary. Labor thus suffered the downside of public concern about a growing budget deficit and the disapproval of waste and poor administration in stimulus projects without gaining the benefits of being among the world’s most successful governments in avoiding an economic recession.
This poor salesmanship was not the fault of Kevin Rudd alone. Treasurer Wayne Swan must carry a large part of the blame which makes it somewhat surprising that he is one of this week’s winners within the Labor Party. In Swan’s defense it does have to be acknowledged that when the crisis struck there was a fear of frightening people into panic mode by telling them the truth. Nevertheless it is now clear that in electoral terms what should have been seen as a positive achievement became a negative.
Treasurer Swan must also share the blame for the extraordinary decision to make a review of the national taxation system a key first term goal. Changes to taxation can never be vote winners. Losers complain loudly and are likely to change their vote because of it while winners rarely express their gratitude by a similar action. Compounding this inherent problem was timing the review by Treasury Secretary Ken Henry so that a tax debate was ignited right at the beginning of an election year.
To make matters even worse the government chose to cherry pick one major new tax proposal — an excess profits tax on mining ventures — and declare that all the other Henry recommendations were not even being considered.
Once again the salesmanship went badly wrong. With hindsight it is clear that the best approach to taking more money off miners was to say that reducing the budget deficit meant that money had to be raised from somewhere. Better for them to pay than you.
Instead the decision was made to try and disguise this new tax by spelling out new things on which the money would be spent. The mining industry losers complained loudly and the masses were completely unimpressed by a compensating lowering of general company tax, increased infrastructure spending and talk of more money being compulsorily saved in superannuation accounts.
Another Swan failure for which Rudd has paid the price.
You must also acknowledge Richard that the reason “the tax debate was ignited right at the beginning of an election year”, was because the Federal Government sat on it for so long and refused to release any details. The fault therefore lies squarely with the Federal Government.
It should be noted that Julia Gillard was repeatedly quoting the 17% supposed tax rate for the mining industry, a parameter which her office claimed had been obtained from the Treasurer. Unfortunately this parameter was incorrect and Swan had misled both his Prime Minister and his deputy prime minister in the provision of this information. Unfortunately Rudd lacked the technical competency to evaluate Swan’s misrepresentation of the whole RSPT debacle, and instead of throwing Swans to the dogs as he well deserved, he tried to bluff it through.
Gillard would be well advised to move Swan out of the Treasury portfolio before he does any more serious damage. Swan’s in confidence and Rudd’s hubris was a bad combination.
So 2nd, 3rd or 4th terms would be better times to undertake significant changes to the taxation system? Not sure I understand that logic.
Poor Salesmanship! Are you suggesting we start electing used car salesmen/women and real estate agents.
I think the problem is in the mass media, the opposition and ignorance of the population.
I remember Jock Hockey being asked, after one of his rants on government spending, how much the coalition would spend to stimulate the economy. He wouldn’t answer the question, he new labor were doing the right thing, but wouldn’t say it.
It seems everyone just failed basic fiscal policy 101 and we have just replaced the only leader in the world who saved their country from the GFC, based on a poll in a trashy newspaper. Well done Australia.
@BK….Instead the decision was made to try and disguise this new tax by spelling out new things on which the money would be spent……I grimaced every time I heard Rudd and Swan push that line. It was never going to be swallowed by anyone who was aware of the size of the deficit, the time frame promised to have the deficit cleared from the books and why it was coming from the Mines. Had Rudd come clean and leveled with the electorate etc….but its water under the bridge, its done and he has gone and she is here and life will go on and I need a beer.