The Nationals and the FTA
My column in yesterday’s Fin (subscription required) argues that the Nationals should either return to the old days of the Country Party, negotiating coalitions to form governments but not in permanent coalition with the Libs, or else go the whole hog and merge with the Liberals. I also have a bit more. As website updates are a bit behind at the moment, I’ve appended the whole thing for anyone who wants to read it.
UpdateObviously, my analysis proved compelling. The day after its publication, not only did Queensland National Leader Lawrence Springborg call for a merger with the Liberals, but Trade Minister Mark Vaile admitted the FTA had been oversold and might require amendment to get through Parliament (the latter item only in the AFR report, which isn’t available online. From a government as tightly disciplined as this one, Vaile’s comments are like a shout from the rooftops that Howard made him sign.
After every state election, it’s immediately stated, at least by the losers, that ‘this has no national implications’. There is obviously some truth in this. If votes in state elections could be translated directly into votes in national elections, Kim Beazley would be Prime Minister today. Only six months after the last Beattie landslide in Queensland, the Coalition won 19 of the 27 seats in the 2001 national election.
Nevertheless, the Queensland election results have important implications at the national level, most obviously for the National Party. The Nationals owe their very name to developments in Queensland in the 1970s, where they were so successful in urban seats (notably on the Gold and Sunshine Coasts and in provincial cities) that the name Country Party no longer seemed appropriate. Rather then being a sectional party representing the bush, the Nationals under Bjelke-Petersen presented themselves as an alternative, more muscular conservative party, which could aspire, one day, to lead the nation.
Last Saturday’s election spelt the end of that dream. Although they regained rural seats following the demise of One Nation, the National Party went backward in the rest of the state, losing the Rockhampton seat of Keppel and picking up as little as 25 per cent of the vote in urban seats. This was despite the collapse of One Nation and agreement with the Liberals to avoid three-cornered contests.
Barring catastrophic mistakes by Labor, a National-led coalition will never again win government in Queensland. Urban and coastal voters, even those happy to support Liberal governments, are not going to vote for a government of rural conservatives, any more than they would in Sydney or Melbourne.
The current position of the Nationals, then, is that of permanent junior partner in the national coalition and permanent opposition party in Queensland. This means that the voters they represent are permanently excluded from the selection in Prime Ministers and Premiers and from the formation of government policy on most issues.
The problem here is the policy of permanent coalition, an arrangement which is seen almost nowhere else in the world. From the viewpoint of the Nationals, this is a lose-lose arrangement, giving them neither the leverage of a normal coalition partner, nor the insider status that would go with membership in a unified party.
There are two possible solutions to this problem. The first is to merge with the Liberals. This is the sensible decision in organisational terms, but it would be likely to accelerate the loss of seats to independents, and would raise the risk of a split.
The alternative is to go back to the party’s original position, readopting the name Country Party and offering to support whichever of the major parties offers the best deal to its constituents. Given the conservatism of the party’s supporters, this would presumably be the Liberals most of the time, but the option of switching would give greatly enhanced bargaining power. On the other hand, whenever the Liberals won government in their own right, the Country party would be out in the cold.
The urgency of the problem has been heightened by the (ludicrously misnamed) Free Trade Agreement with the United States announced immediately after the Queensland elections. Had the announcement been two days earlier, the Nationals would surely have lost three or four more seats.
It seems pretty clear that Trade Minister Mark Vaile was ready to walk away from the one-sided bargain proposed by the US, but that he was over-ridden by the Prime Minister’s personal commitment to the achievement of a deal, any deal. Nevertheless, it was Vaile, and therefore the National Party, who had to announce, as a win, an agreement that gained no ground on sugar, and hardly any on dairy or beef. Less obviously, the whole process left the export and production subsidies in the US Farm Bill untouched. Wheatgrowers and others competing with US farm exports have therefore lost just as badly as canefarmers.
It seems likely that the most vocally disaffected producer groups will be bought off, a fact that should give pause to the minority of economists still inclined to support the FTA. But even generous handouts are unlikely to appease voters who have seen solemn assurances thrown overboard.
Unfortunately for the Nationals, with the Agreement already signed and an election less than a year away, there’s little they can do except pretend to be pleased. And if they’re going to do that, they might as well start merger talks with the Liberals straight away.