Joe Hockey: But, look, we’re getting away from what is, I think, the substance of the debate. Tony Jones: I’m gonna get there any moment.
Well, Jones never really did get to the substance of the debate while interviewing Joe Hockey last night. Shortly after, when Jones agreed to “go over some of this”, that was merely a prelude to asking whether the term “Hockey-nomics” had been damaging to his credibility.
We went through all this during the election, didn’t we? The complaints that the media focussed on trivia and personalities and ignored policy substance? We’re seeing a perfect repeat with the reaction to Joe Hockey’s efforts to put banking regulation onto the political agenda.
At a time when it’s plain both sides have lost both the will and, possibly, the capacity to prosecute serious economic reform, Hockey’s efforts ought to have been welcomed – particularly given the persistent criticism that has dogged Hockey for much of his political life, that he is a lightweight. When he produces evidence he’s capable of substance, it gets ignored in favour of horse race journalism about who’s winning and who’s losing.
That’s not to suggest that the media can’t cover both. Plainly, someone leaked to The Australian against Hockey, even if the leak has repeatedly been dismissed as entirely wrong. That is a yarn in itself. One well-placed source points the finger for the leak at Malcolm Turnbull — a claim this morning categorically rejected by Turnbull’s office as “absolutely incorrect”.
Worse, Tony Abbott appeared to go out of his way to compound the damage yesterday by refusing to support Hockey’s plan, which had been ticked off by shadow Cabinet.
But that hardly justifies Tony Jones asking 18 questions about personalities and internal politics and a bare five about what Hockey is actually arguing. Some of the 18 were about what was going through Tony Abbott’s mind. Given Abbott himself appears not to know what’s going on in his own head some of the time, it was extraordinary that Hockey was being quizzed thus.
And it hardly justifies that most of the Press Gallery has failed to cover the detail of what Hockey has spoken about, leaving that to the likes of Peter Martin, Stephen Bartholomeusz and Terry McCrann and business writers like Ian Verrender.
Hockey’s also been copping a variant of the “lightweight” criticism, with claims that economist Christopher Joye wrote Hockey’s AIG speech. Crikey understands that Hockey wrote the first draft of the speech, and then sought feedback from a range of internal and external experts, including Joye, who had led the debate on banking regulation and initiated the idea of Government support for the RMBS market, which has kept the non-bank lending sector alive through the GFC.
But many of the ideas in Hockey’s 9-point plan have been kicking around for some time, and in fact Hockey himself called for a “Son of Wallis” inquiry in 2009.
Why isn’t there more attention being paid to Wayne Swan’s facile dismissal of Hockey’s proposals, particularly on the day when the NAB unveiled a super profit? All we’ve had from the Government is cheap lines about chicken nuggets and Bill Shorten’s pathetic effort earlier in the week to plead for protection of those skittish foreign investors. In fact, it is the Government that is isolated on this. There is concern about the market power of the banks in Treasury, the RBA and the ACCC.
Even the chief apologist for the banking cartel, Steven Munchenberg, was telling the ABC this morning that 8 of the 9 points were worth considering (predictably, the cartel objects to any additional powers being given to the ACCC to investigate its blatant price signalling, which the banks insist is entirely for the benefit of theirs customers). They’re also in line with issues being discussed by Bank of England Governor Mervyn King and Paul Volcker in the US.
Even some Labor MPs are concerned at the sight of Wayne Swan standing shoulder-to-shoulder with the big banks. Swan wouldn’t even answer a simple question yesterday about the take-up of the Government’s bank-switching package.
The dismissal of Hockey’s proposals as populism by the Government — a line echoed by the CEO of ANZ this morning — is risible. Hockey is talking about recognising the too-big-to-fail nature of our banks in a regulatory system built on the idea of not guaranteeing parts of the financial system and preventing the banks’ drive for higher-risk sources of growth from endangering their core business of borrowing and lending, which is critical to the economy. “Populism” appears to have grown up and got an MBA since we last encountered it.
The bigger issue at stake here is the lesson politicians will take from the treatment of Hockey. Hockey has taken a significant risk in advancing a complex reform agenda, one easily mischaracterised by opponents. Undoubtedly he stumbled in his first outing on the issue, and that harmed his cause. But he’s been undermined by colleagues, savaged by the Government and unfairly treated by the Press Gallery.
The lesson is clear — don’t take risks on serious policy, remain risk-averse, don’t expose yourself. It’s the same lesson politicians will have learnt from Kevin Rudd’s demise in the context of the RSPT — sound though complex policy that was poorly communicated, savaged by opponents and, ultimately, undermined from within.
Labor might figure that if they copped it, Hockey can cop it too, but it means Australia’s reform drought doesn’t look like breaking any time soon.
Joe Hockey’s policy will lead to credit rationing.
Competitors will re-emerge in Australian banking when they see the profits rising.
Profit will then be competed away as it was last time the non-bank lenders entered the fray.
The lesson is not that it is too risky to introduce new policy ideas but instead that you should be clear and thoroughly prepared before you do so.
Hockey was clearly woefully under-prepared and got into a mess almost immediately. That vagueness and unpreparedness legitimately gave rise to the suspicion that he was merely pushing a populist stunt and was not a serious reformer. Given his reputation already as a political and intellectual lightweight that was a serious error which may well yet cost him the shadow Treasury position.
Reportedly Chris Joye has come to his rescue and devised a nine point plan that has much more credibility than Hockey’s initial foray. But the fact that he was rescued in this way has only tended to highlight, as Tony Jones was legitimately entitled to pursue, how blundering the initial attack was.
What you mean profits haven’t risen enough?
We had more banks .. the big ones bought up the shares and the duopoly Lab/Lib governments let them.
The first issue here when are the media going to be given some scrutiny on their performance?
The second issue is how about some serious debate on the policies
My issue is what is being done about the usury rates for credit cards?
Bernard, your continual support of Hockey over the last week is starting to resemble the smart kid at school who steps in to stop the fat kid from being bullied
David’s right, which ever way you spin it. Joe made a real mess of this when interviewed on AM last week. He was intent on casting Swan as ineffectual. It’s his preferred ground – he was at it again on Lateline last night. There was no evidence of the “complex reform agenda” Bernard attributes to the debacle.
Any aspects that now represent significant reform objectives were cobbled together the fact to save face for the Liberals. The Jones interview last night was on the money. Asking Joe why Abbott first refused to back Joe’s adventure yesterday morning, then went onto commercial radio to say he did, then at a subsequent doorstop refused to even utter a sound when asked to repeat his endorsement was legitimate. Asking why the “levers” joe was insistent were at the Treasurer’s disposal last week weren’t included in joe’s nine points was also legitimate. It’s clear Joe isn’t waving – he’s drowning.