The electorate is proving ungovernable, throwing out governments that dare to take tough decisions and encouraging political parties to dump leaders with the strength to pursue reform. Australia will become like Greece. Voters need to take a look at themselves. Maybe we need to ditch democracy for a while so that we can make the hard economic adjustments needed.
The “reform is dead” theme from Australian business and many in the commentariat has proven a popular one in recent weeks as first-term Coalition governments have been kicked out in Victoria and Queensland and the federal Liberal Party has mulled dumping the astonishingly unpopular Tony Abbott and his even less-liked Treasurer, Joe Hockey.
But how true is it? Yes, we know privatisation is deeply unpopular with voters of all stripes — Crikey has been pointing that out for years. This week’s Essential Report showed why — voters think the benefits of privatisation flow to corporations while they face higher prices and poorer service. And many of the post mortems on both the recent and the 2012 Queensland election have focused on the deep unpopularity of privatisation among voters of that state.
Does that mean privatisation is dead? Well, no. The Baird government in NSW is going to the polls with a partial privatisation plan for electricity infrastructure, and currently leads 55-45 over the appalling NSW Labor Party, which stolidly opposes privatisation.
And one of the few high points in domestic politics in 2014 for the Abbott government was Finance Minister Mathias Cormann’s wildly successful sale of Medibank Private, which ran smoothly and produced a far greater return to taxpayers than expected. Has anyone suggested that the sale of Medibank Private has contributed to that government’s woes?
So, the evidence is that voters dislike privatisation, but that it isn’t always a vote-changer in every constituency, and can actually be done successfully if someone competent, like Cormann, is running it. It’s also worth noting that the federal Liberals have been promising to sell Medibank Private since 2007.
What about other kinds of reform? There’s polling for that, as well, albeit a little older. In 2012, we asked Essential research to ask a series of questions about economic reforms more broadly. What’s interesting is the unanimity of voters — it’s almost impossible to tell Labor, Liberal or Greens voters apart in their views. Looking back over 30 years of economic reform, more than half of voters believed that corporations had benefited most, with just 5% saying ordinary Australians had.
But if you examine attitudes toward specific reforms, they tend to vary. Compulsory superannuation and Medicare, which purists wouldn’t class as true economically rationalist reform — are the most popular reforms: both score nearly 80% support from voters. But they also strongly support the floating of the dollar, 46% to 11%, and free trade agreements (another reform that doesn’t really count) 41%-21%, even though voters would actually like more trade protection. Even introducing the GST — which dominated the 1990s politically — is now accepted, with 39% support and 30% disapproval. It’s only privatisation — the big ones of the Keating and Howard eras, Telstra, the Commonwealth Bank, Qantas — that voters still dislike and would like to reverse.
Then there’s industrial relations reform. The electorate made its views clear on that in 2007. But in case anyone was wondering, consider this recent result from Essential: 61% of voters, including 43% of Liberal voters, believe the current minimum wage is too low. Just 6% think it is too high. In April last year, Essential found 77% of voters opposed abolishing the minimum wage.
There is, however, some voter support for reforms that appear to have an element of reciprocity in them. Voter reaction to the National Commission of Audit showed voters happy with the idea of graduates starting to repay HECS once they earned above the minimum wage, that young single people have to move to areas with more jobs if they wanted to keep earning Newstart, or forcing the young unemployed onto Youth Allowance. But making graduates pay higher interest on their student debt, or deregulating university fees, weren’t popular.
What can we glean from all this, beyond the hostility to privatisation? Voters are more supportive of reforms on which they had a vote first, like the GST (or the sale of Medibank), reforms that they see a clear benefit from, like compulsory super or free trade agreements (the benefits of which are illusory, but sold by governments as though they actually exist), but suspicious of reforms that they suspect will benefit corporations at their expense, or which appear unfair. Moreover, even in reform areas where voters consistently tell pollsters they’re unhappy — like trade liberalisation, where voters consistently exhibit protectionist tendencies — they don’t vote to reflect that. Parties as diverse as One Nation, Katter’s Australian Party and the Greens have all pitched to the electorate significant increases in protectionism, and none have been able to mobilise a consistently high vote.
Most of that is pretty obvious, but it’s a lesson that appears to have been lost on successive governments and on the commentariat currently whining about the death of reform. Governments can still do it, but like always, the electorate needs to be convinced.
Next week: what reforms can be delivered from here?
It would help to have a vision for Australia that extends beyond selling semi-monopolies to the highest bidder.
Some corporate greed reforms or mainstream media honesty and accountability reforms would also find widespread support I imagine (let alone political greed, honesty and accountability reforms).
Bernard, while it might sometimes be true (as you say) that “voters will back even complex reforms if they understand the benefits”, you avoid the important caveat that by “benefits” most of them think primarily in terms of benefits to themselves, and short term ones at that.
I suspect that Cormann only got away with the Medibank sale because there were a lot worse things going on at the same time. I personally can’t see the advantage of selling stuff that’s making money.
Equating asset sales to reform is a long bow to draw. It basically isn’t reform at all, only a movement of roughly the same activity from the public sector to the private.
If there is a good case for selling an asset then go for it, but is isn’t reform. Qantas had good reasons for sale, it wasn’t a business that a government would want to make the big buck decisions on. Commonwealth bank and medibank sales, although worthy in one sense, never costs in the social cost of losing a market setting institution, such that now banking and health will be solely the province of corporate profit rather than social good.
Not necessarily reform, and at best a fringe activity.
Superannuation, blow me down BK, one of the most magnificent economic reforms of our time. Reform is clearly in the eyes of the beholder, but not accepting this as the quintessential economically rationalist reform that it was reveals a strange misperception on your part.
11 years of Howard saw one genuine reform, the GST, one letter to the Reserve Bank clarifying what had already been in practice for the term of the previous government, and a litany of superannuation and taxation reforms that will take a generation to unwind, and hit at the worst time in the demographic cycle.
Gillard enacted reform in social policy in the form of the NDIS, and Shorten’s FOFA reforms (he did one notable thing as a minister)
It’s all in the eye of the beholder, but reform needs a leader with a party behind it. We don’t seem to be able to produce those. That is the problem