Exit Right

(A blog post where Pat cheats and just quotes heavily from the book.)

Another book I managed to get through on my break in New Zealand was the latest Quarterly Essay, Judith Brett’s Exit Right: The Unravelling of John Howard. Anyone who knows me well knows that I was extremely happy with Howard’s loss at the end of last year, so reading about what lead to the downfall wasn’t exactly depressing (unlike the excellent Dark Victory, which covers events around the 2001 election).

As well as pointing out the dangers of groupthink and following the party line (paralleling nicely with Cass Sunstein’s Infotopia), Brett had two incisive descriptions which I hadn’t heard clearly before.

The first was about how WorkChoices had such a strong impact for so many voters.

With its new industrial-relations regime the government was trying to change culture, just as Howard had accused the Keating government of doing. And the culture was resisting. The deep problem for the government was that unlike many other areas of policy, when it comes to what happens at work, people have first-hand experience, both their own and that of friends and family. And opinions based on experience are much more firmly held than those based on media reports or government advertising campaigns.

In the long interviews which Antony Moran and I used for our book *Ordinary People’s Politics*, there was a discernible difference between the way people talked about opinions based on experience and their other political views. On issues of foreign policy, such as the decision to support the US invasion of Iraq, most Australians have little choice but to trust the government. And if the government gets it wrong, it has no immediate impact on their daily lives. It is the Iraqis who are bearing that cost. Even with the children-overboard affair, the fact that the government lied had no immediate impact on Australian voters’ everyday lives.

But changing the power relations in the workplace is a very different matter. In trying to sell the changes to an already-sceptical electorate, the government damaged its more general credibility. If they are giving us spin on things we know first-hand, why should we believe them on anything else? WorkChoices may well be the main reason people seemed to stop listening to the government some time i the first half of 2007.

The second was in regards to Budget promises and the lack of expenditure on services.

The core problem of Australian federalism is vertical fiscal imbalance. What this means is that the federal government raises most of the revenue but the states have the most need of it, with responsibility for services including education, roads, hospitals and police, where there is never enough money. Australia’s federal system involves not just a mismatch of money, but a mismatch of accountability, which is why it is so difficult to fix.

There is a structural fracture between the level of government (federal) which bears the odium of raising taxes, and the level of government (state) which claims the credit for spending the money. There is also endless scope for blame-shifting. Why would a Commonwealth government give more money to the states for public hospitals, for example, or for TAFE colleges, particularly when the states are in the hands of the opposition party and when it can’t control the outcomes? Why wouldn’t it give voters tax cuts for which it will get the credit?

Voters keep saying that instead of tax cuts from the surplus they would prefer the money to be spent on health, education, infrastructure, the environment. But most of this is done by the states, and so doesn’t easily provide the Commonwealth with the type of big-bang policy announcements that tax cuts do. And from the perspective of the Coalition, it’s just giving free kicks to the Labor state premiers and helping them stay in power.

Neither point is ground-breaking, but I found them clear perspectives that I hadn’t encountered before.

John Dunlop left a comment on 26 Mar, 2008:

Hi Pat,

I particularly liked the analysis of the reaction against the liberals workplace policy!