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Coalition politics and the end of market liberalism

December 14th, 2017

Lots of commentators are making a fuss over the prospect of the Greens taking the seat of Batman following the likely and unlamented departure of Labor MP David Feeney (if not under S44 then at the next election). The underlying claim is that the election of Greens candidates represents an existential threat to Labor. This is typical of a commentariat mindset that sees anything other than majority Labor or LNP governments as recipes for disaster (the phrase “hung parliament” is indicative), even though we have decades of experience of such governments operating successfully both federally and in (I think) every state and territory. The reality is that, however fractious their relationship may be at times, Labor and the Greens constitute a centre-left coalition. As I said a year ago

For Labor that means giving up the idea that the Greens are a temporary irritant that will go the way of the DLP, if they are abused and/or ignored long enough. For the Greens, it means abandoning Third Way rhetoric suggesting that they represent an unaligned alternative to a two-party duopoly.

The details of the alignment between the two will vary according to the circumstances, from formal coalition to general support, but there is no alternative.

The problem of coalition politics is much more problematic on the right. Despite the frictions, I’m not thinking primarily of the LNP “coalition” (so rusted together that, even where they aren’t merged, the two are lumped together as a single “major party” in most commentary). Rather, the problem is the relationship between the LNP as a whole and the tribalist/Trumpist right, represented in various forms by One Nation, the Liberal Democratic Party, Bernardi’s Conservatives* as well as a large faction within the LNP itself. These two groups have nothing in common except that they have common enemies, and even that common ground is limited. They all hate greenies and unions, but the overt racism of One Nation and the religious bigotry of Bernardi repel lots of mainstream LNP types, while the Trumpist base is suspicious of banks and multinationals.

Most importantly, the ideological framework of market liberalism (aka neoliberalism, economic rationalism) and so on has lost its power, which always rested more on the idea that There Is No Alternative than on any positive appeal. Sermons about the need for reform, budget surpluses, more competitive tax regimes and so on no longer get the kind of automatic approval from the political class as a whole that they used to. So, the mainstream LNP no longer stands for anything in particular. Meanwhile, the Trumpists want nostalgic gesture politics without any concern for coherence or practical consequences.

For the immediate future, at least, politics in Australia has resolved itself into a struggle between two coalitions. Both are going to be fractious, but the big problems are going to be found on the right.

* There’s also the Katter party, but Katter is too idiosyncratic to fit into any classification.

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  1. rog
    December 14th, 2017 at 17:57 | #1

    This left right thing might be part of our DNA, we seemed to have adapted to the digital age with almost excessive enthusiasm. Is it like hot/cold or sweet/sour, does it provide relief from the stress from having to weigh up all the imponderables, the considerable consequences?

    Hopefully younger voters will simply say “I’m over it” and just look forward and vote accordingly.

  2. Douglas Hynd
    December 15th, 2017 at 07:32 | #2

    Katter & Xenophon seem to represent a regional emphasis shaped by a distinctive personality – neither is going to win votes outsidentheir home territory but have an appeal within it. Both nibble at the edges of Labor but take most of their votes from the LNP.

  3. Alphonse
    December 15th, 2017 at 09:22 | #3

    “Sermons about the need for reform, budget surpluses, more competitive tax regimes and so on no longer get the kind of automatic approval from the political class as a whole that they used to.”

    Generally true but who in the political class does not get a warm glow from a pious intonation of “budget repair”; or at least give it a free pass?

  4. Lt. Fred
    December 15th, 2017 at 09:27 | #4

    It’s just FPTP that creates the two-party preferred system, regionalism, factionalism and the other unusual characteristics of the Australian political system. As New Zealand found out 30 years ago, FPTP is also unbelievably undemocratic if the two majors agree on something (ie ANZUS, refugee torture, Adani, or in the New Zealand case, hard Thatcherism and open looting from the public purse). Who do you vote for – the hard Thatcherist party, or the harder Thatcherist party? Answer: change the voting system.

    The Nationals aren’t a threat to the Liberals – and, in my view, are not long for this world. They’re a regional party. They cannot even compete outside country Australia. And regional Australia is dying, with massive population shifts relative to the rest of the country. It’s literally insane for the LNP to nominate a Nat for Premier – her issues are nobody else’s issues. Like poor Lawrence Springborg, nobody cares, except the handful of rusted-ons in Roma.

    That is quite in contrast with the Greens. They are NOT a regional party. They’ve won seats in metro Liberal areas and Labor areas and in rural areas. They’ve not yet cracked the suburbs, but there’s no reason to think they couldn’t. That is a real threat to Labor. They’re looking like being systematically locked out of inner-city Melbourne (though not Sydney, due to the incompetence of the very well-funded NSW party).

    Really, the best shot for Vic Labor is to move to a MMP system like the Tasmanian one, to eliminate private donations to wipe out the Liberals and then pray they can hold on as the majority left-wing party. No doubt other states will start to see the same patterns emerge, as is gradually happening in Queensland.

  5. Tim Macknay
    December 15th, 2017 at 11:27 | #5

    @Lt. Fred
    But we don’t have FPTP. Are you talking about compulsory preferential voting?

  6. Lt. Fred
    December 15th, 2017 at 12:47 | #6

    We have a single-electorate system with more-or-less FPTP. Preferential voting is still extremely non-proportional.

  7. derrida derider
    December 15th, 2017 at 13:55 | #7

    No, Lt Fred, compulsory preferential is quite different in its effects from FPTP. Sure in single member electorates CPV means that third or fourth parties that are not tightly regionally based find it tough to get reps in the parliament compared with PR (though not as tough as with FPTP), but preferences mean their policy influence on the two major parties is generally larger than their electoral representation would indicate. And that’s what keeps people voting for them. Whereas in FPTP, policy influence is nil for any party outside government.

  8. Smith
    December 15th, 2017 at 14:43 | #8

    I wouldn’t overestimate the potential of a Labor Green coalition. Labor hates the Greens. The Labor Rught hates the Greens for ideological reasons. The Labor Left hates the Greens because when the Greens win seats, it is almost always at the expense of the Labor Left. And even ideologically, the Labor Left is not all that fond of the Greens, especially the Rhiannnon faction, who remind them of the Trotskyists/Stalinists/Maoists they battled in student politics, back in the day. Nobody likes usurpers who want to take their highly paid jobs. It’s just human nature.

    The idea that Labor and the Greens will coalesce to bring about the end of market liberalism is at best wishful thinking, about as likely as a virgin birth, so appropriate for the season, but not grounded in the world as it is.

  9. fred
    December 15th, 2017 at 15:06 | #9

    @Douglas Hynd
    Dunno about Katter but according to Antony Green’s calculation Xenephon’s mob preferenced Labor at the rate of 60% at the 2016 election so, presumably, most of their support is coming from ALP voters.

  10. John Quiggin
    December 15th, 2017 at 17:34 | #10

    @Alphonse

    “Generally true but who in the political class does not get a warm glow from a pious intonation of “budget repair”; or at least give it a free pass?”

    The point of the OP is that this used to be true but isn’t any more. Obviously, no one objects to “budget repair” in the abstract. But as an incantation to justify spending cuts, it’s lost its power.

    On the other side of the ledger, the era “budget repair” was one in which tax increases were considered unthinkable. That’s also changed, with Labor now openly advocating higher taxes of various kinds. Hockey’s budget repair levy represented the brief overlap between the old period and the new one.

  11. Smith
    December 15th, 2017 at 20:38 | #11

    @John Quiggin

    It’s strange how Hockey (or Abbott for that matter) never got even grudging credit from the Left for the budget repair levy. The subset of the Liberal Right that won’t countenance an Abbott comeback have not forgiven him.

  12. rog
    December 16th, 2017 at 03:42 | #12

    @Smith

    The ALP agreed with imposing the levy and Shorten opposed scrapping the levy

    Greens also want to make it permanent and to add a bit more, for those classed as super wealthy.

    This all sounds very political as it probably raised a relatively insignificant amount and doesn’t qualify as tax reform.

  13. paul walter
    December 16th, 2017 at 06:10 | #13

    When I read about state governments talking austerity, low tax for the rich and dereg, yet expropriating vast sums of money from social infrastructure to bulldoze state of the art sports stads to build with more of the same, I just reach the end of my tether with ( the inanities of ) neoliberalism.

    http://www.aljazeera.com/indepth/opinion/trump-tribalism-american-capitalism-171213074012028.html

  14. Collin Street
    December 16th, 2017 at 07:32 | #14

    It’s strange how Hockey (or Abbott for that matter) never got even grudging credit from the Left for the budget repair levy.

    Here’s a go: you tell me exactly how much “credit” hockey should have gotten and in what form, and then we’ll go through the archives and see what actually happened.

    First you frame your hypothesis, then you test it. Any other way and you’ll redefine your position post-facto to reinforce your sense of self-worth.

  15. John Quiggin
  16. D
    December 17th, 2017 at 00:08 | #16

    Rare example of a (relatively) mainstream media outlet “getting it”:

    https://www.thesaturdaypaper.com.au/opinion/topic/2017/12/16/false-labor-and-the-birth-manus/15133428005653

    In brief, the shameful and inexcusable cruelty this country is inflicting on refugees is Labor policy and nobody of good conscience can allow their vote to go to Labor.

    Hopefully, after its dismal failure in the case of Hillary Clinton and today with Shorten/Kenneally, “lesser evil” politics is in terminal decline.

  17. I am and will always be Not Trampis
    December 17th, 2017 at 08:33 | #17

    The end of market liberalism?
    The only argument surely is whether the market is one for governments or one for private enterprise. electricity surely shows private enterprise cannot do markets for government services.

    ALP Governments that rely on Greens as a partner are terrible witness Tasmania. The Greens and One Nation have woeful policies that are equally bad. would the majority party still go for reasonably responsible policies instead of irresponsible populist policies.

    Getting the budget repaired is a good policy. It how you go about it. Despite what they say the Present Government has always looked to revenue as the best way to repair the budget and nor has it tried to repair it too much and in so doing damage the economy.

    A poor article from John.

  18. Vegetarian
    December 17th, 2017 at 13:04 | #18

    @Douglas Hynd You could add Jaquie Lambie to those two.

  19. J-D
    December 17th, 2017 at 16:20 | #19

    D :
    Rare example of a (relatively) mainstream media outlet “getting it”:
    https://www.thesaturdaypaper.com.au/opinion/topic/2017/12/16/false-labor-and-the-birth-manus/15133428005653
    In brief, the shameful and inexcusable cruelty this country is inflicting on refugees is Labor policy and nobody of good conscience can allow their vote to go to Labor.
    Hopefully, after its dismal failure in the case of Hillary Clinton and today with Shorten/Kenneally, “lesser evil” politics is in terminal decline.

    My conscience asks this question:
    If people stop voting Labor how will that make the world better?

  20. J-D
    December 17th, 2017 at 16:21 | #20

    I am and will always be Not Trampis :
    … Getting the budget repaired is a good policy. It how you go about it. …

    Have you tried switching it off and then on again?

  21. Paul Norton
    December 19th, 2017 at 10:23 | #21

    Smith @8:

    “The idea that Labor and the Greens will coalesce to bring about the end of market liberalism is at best wishful thinking[snip]”

    Perhaps, but the idea that Labor and the Greens will coalesce:

    (a) when it is in each party’s interests to do so; and
    (b) when neither party has a prudent and feasible alternative open to it that would be as useful to its interests;

    Is not so far-fetched.

    There is, of course, a subjective and affective dimension to this. For any such arrangement to work, Labor people need to be able to give themselves permission to believe that entering into cooperation with Greens in order to form a reforming Labor government is in some sense a win for Labor rather than an unfortunate necessity. This, in turn, will probably require Greens people to deal with Labor people in a way informed by an imaginative sympathy with the latter’s affective domain.

  22. John Quiggin
    December 19th, 2017 at 10:59 | #22

    @Paul Norton

    Of course, this has been going on with varying degrees of success for some time now. It’s now the norm in the ACT and Tasmania where they have multi-member electorates. And whatever the problems, Labor survived federally from 2010 to 2013 on Green support. In tight Parliaments Labor has had more trouble with poorly vetted ALP members (Craig Thompson, Billy Gordon, David(?) Feeney) than with Green and independent conditional supporters.

  23. Paul Norton
    December 19th, 2017 at 11:23 | #23

    JQ, I also think the ALP government from 2010-13 was considerably better than it was perceived to be at the time and since. It suffered from a mismatch between the value of a lot of what it was doing in policy terms and its own poor political selling of those achievements, but that was largely for reasons other than that it was dependent on Greens and independent support.

  24. John Quiggin
    December 19th, 2017 at 16:50 | #24

    @Paul Norton

    Agreed. Also true of the Rudd government, which came to grief largely because of the failure to achieve a deal between Rudd and the Greens on climate (feel free to allocate blame, but I see no point), but laid the ground for much of what was achieved after 2010.

  25. I am and will always be Not Trampis
    December 19th, 2017 at 18:11 | #25

    @J-D
    I do not think you understand my point. Only an economic illiterate would argue against budget repair however you do not attempt it by strangling the economy as say Wayne Swan did in his last budget. He reduced GDP growth by 0.7 percentage points and merely weakened the economy.

    Moreoever if the reason the budget is in deficit is because of things done to revenue ( i.e. petrol excise and income tax cuts) then it is silly to redress that by spending cuts.

  26. Ralph
    December 19th, 2017 at 21:23 | #26

    @I am and will always be Not Trampis
    You might like to state what “repairs” are actually necessary while 1.8 million are un/underemployed and wages stagnant. It’s hard to believe but while MYEFO is projecting a surplus in 2023-24 unemployment remains at 5%! We get a surplus on the backs of the (700,000) unemployed. It’s morally inexcusable.

  27. J-D
    December 20th, 2017 at 03:10 | #27

    I am and will always be Not Trampis :
    I do not think you understand my point. Only an economic illiterate would argue against budget repair however you do not attempt it by strangling the economy as say Wayne Swan did in his last budget. He reduced GDP growth by 0.7 percentage points and merely weakened the economy.
    Moreoever if the reason the budget is in deficit is because of things done to revenue ( i.e. petrol excise and income tax cuts) then it is silly to redress that by spending cuts.

    You’re right this far: I don’t understand your point. Did you want me to understand your point?

  28. I am and will always be Not Trampis
    December 20th, 2017 at 07:50 | #28

    JD I am sorry I thought you had an understanding of economics.

    Ralph go no further than the article by Farrell and Quiggin on Hard Keynesianism on this blog.

    I would repair as quick as nominal growth could allow it.Thus the faster it is the quicker the repair and the slower it is the slower the repair.

    The coalition has been doing this. all the ‘repair’ has been cyclical. the structural deficit is the same as it was when it gained office.

  29. Stuart Johnson
    December 20th, 2017 at 16:04 | #29

    I’m not so sure about the idea that the Greens win seats from the Labor Left (mentioned in this thread but also around the place quite often). Looking at their lower house seats and who they won them off:
    Federal – Melbourne (Labor Left)
    NSW – Newtown (new seat, no incumbent)

  30. Stuart Johnson
    December 20th, 2017 at 16:08 | #30

    sorry, incomplete post above was posted by accident, to continue:
    Federal – Melbourne (Labor Left)
    NSW – Newtown (new seat, no incumbent)
    – Balmain (Labor left)
    – Ballina (Nationals)
    VIC – Melbourne (Labor Left)
    – Prahran (Liberals)
    – Northcote (Labor Right)
    QLD – Maiwar (Liberals)

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