The Rudd-Gillard government: An appreciation

A lot has already been said on the occasion of Kevin Rudd’s retirement from politics. Having already written a great deal about Rudd while he was active in politics, I’m not going to add to it. Rather, I’ll reflect on the achievements of the Labor governments of the past six years, which were substantial. They included

* The uniquely bold and successful management of the Global Financial Crisis
* The creation of the NBN
* The design and implementation of a price on carbon
* The National Disability Insurance Scheme
* Plain packaging for cigarettes

among many others. How much of this will survive what, I hope will be one term of LNP government remains to be seen, but Labor can campaign for years on defending and extending this record.

Against that, there were some failures. Most obviously, the government failed to come up with a workable solution to the problem of asylum seekers, and eventually capitulated to the xenophobic rhetoric of Abbott and Morrison (though with the important qualification that Labor greatly increased the total refugee intake, while Abbott has cut it). In addition, despite Rudd’s recognition that the GFC marked the breakdown of the post-Bretton Woods capitalist order, he(and even more, Wayne Swan) rapidly came to treat it as a momentary aberration, and to return to the policy orthodoxy that created the crisis in the first place.

The biggest failures, though, were personal, not political. Rudd’s abrasive egotism was matched by Gillard’s unprincipled tribalism (for her, Labor was an extended family, not a political movement) to produce a series of catastrophes that eventually destroyed the government. If they had managed to work together, as they did with reasonable success for the first two years of the government, they could have been a better team than Howard-Costello or Hawke-Keating. But it seems to be the nature of Australian politics taht such partnerships never worked for long.

66 thoughts on “The Rudd-Gillard government: An appreciation

  1. PrQ … now that I’ve edited the offending term please feel free to delete the previous iterations of this post:

    @derrida derider

    I’ve never understood why people are so IDEOLOGICAL on both left and right about deficits.

    I suspect that’s the wrong term, but lets not get diverted …

    How much the government spends and what it should be spent on should be an entirely separate question from how much of that spending should be funded by us and how much by our children

    I agree but let’s unpick that, taking acount of the context here that frames your argument. We currently have two centre-right populist parties contesting the political field. Fiscal policy seem to most people a quite opaque thing but one can dumb it down to simple (but grossly misleading) analogies with household balance sheets “worked out over the kitchen table” and the sense of control over their lives that people feel when they see their bank account swelling, and the worry they have when they owe money on major assets like a car or a house.

    Both parties want to seem authentic and “speak common sense” and the “common sense” of the people is to be found in mythologies about virtue and ancient aphorisms like “neither a borrower nor a lender be” and the authenticity of the man who “brings home the bacon” and denies himself gratification so as to provide for his family. Being frugal and staying away from the “money lenders” speaks to ancient religious tab0o. In my family, “borrowing money” was seen as at least incipiently immoral, and something that put you on the road to being a “no-hoper” and so anyone who borrowed to buy a house had to see it as their first duty to pay it off. And credit cards, when they first became widespread, were seen as like a form of drug taking — which is why the language of the centre-right populists entails repeated resort to the concept of “the national credit card”.

    In short for populist reasons, both the governing parties play this silly game of whining about debt and deficit and accusing the other side of being moral bankrupts as well as fiscal ones. This leads to an utterly vacuous debate that pays virtually no attention to whether debt service should fall onto future generations or the current one — or whether the things for which debt might be raised are indeed worth having.

    The left ought to answer this pointing out how flawed the government-household analogy is — countries are not saving up for retirement from “work” and are also in a position to vary their income upwards to service debt, subject to far less constraint than a household.

    We ought also to say that debt is simply a way of ensuring that the cost of infrastructure or other public goods that are very expensive is settled onto the shoulders of all those deemed likely to benefit one way or another from them. While parents of young children can’t ask their children to help fund their inheritance the government can ask those of working age to fund the services that will provide for them when they are beyond working age. This is especially sensible when the cost of the debt service is low in real terms and is exceeded by the benefits derived therefrom. Debt of this kind enriches us all.

  2. We ought to say that national finances are nothing like household finances. A national government with a fiat currency can print money. If a household does that it’s counterfeiting.

    A government does not need to take on debt to fund large projects. It can also run a deficit (print money) or raise extra taxes. A government therefore has more flexibility and may take on debt, run on deficits, raise taxes or use any mix thereof.

    The obession with government debt is perverse when excess private debt, especially consumer and mortgage debt and complex derivative debt was vastly higher and drove the last GFC. Of course, the corporate masters want people to look anywhere except where the real problem is.

  3. They were so wonderful that the Australian people booted them out despite the endearing unpopularity of Tony Abbott and the intellectual lightweight that is Joe Hockey. They considered the Governmens response to the GFC as excessive (and so do I), they hated the lies about carbon tax, and the grubby political deals. Let us not forgot, Professor, that your history of political predictions is, um, weak at best!

  4. @Geoff Andrews

    Yep, that’s a pretty good list of what Rudd did. And what did Gillard do? She stabbed her PM in the back at the behest of the mining bosses so they didnt have to pay a bit more tax. Such a tax might have impinged a little bit on their multi-billions. And she wrecked the government and handed Abbott power.

  5. @faust

    “..they hated the lies about carbon tax, and the grubby political deals.”

    Wow! I think you nailed it!
    How many thousands of loyal or wavering fence-sitting LNP voters who didn’t want any action on a carbon price rushed from Tony to Gillard? In giving the undertaking that she did, she alienated many of her base support rather than attracting any unsuspecting LNP fly into her sticky web of deceit. In any event, for it to have been a “lie”, there had to have been an element of mens rea ….. look, I know it’s a difficult concept with which to grapple – even Alan Jones doesn’t understand it (unless he was lying, of course).

    But you’re right about “grubby”.
    Since I started to vote, I’ve watched 19 parliaments and it’s only in this last one that “grubby” is a suitable epithet. With all the others, it was like watching a cross between an eighteenth century quadrille and a Tamworth line dance..
    Apparently in the last friendly leadership exchange of body fluids, Tony and Malcolm played paper-rock-scissors until they lost count of the score and when it had to go into a vote, Tony’s winning margin of one was Malcolm’s vote!

  6. I think Labor would have won the last election if Rupert had been campaigning for rather than against them.

  7. @John Brookes
    I understand the cynicism given the source of these figures, but the increase is linked to black market cigarettes, not the plain packaged legal variety that is subject to tax. This is a loss for tobacco companies and for the Australian public, and is the inevitable result of a poorly executed prohabition culture. Artificially inflated prices encourage a black market. There is a better approach to public health than raising taxes and targeting the ability of companies to differentiate their legal product.

  8. @BM

    The tobacco industry has made the identical claim after every one of the anti-smoking initiatives of the past 30 years. Adding them up, I’d estimate that on the indsutry reckoning around half the adult population is now smoking black market cigarettes. BM – are you an example of your own claims? Anyone else want to ‘fess up under the cloak of pseudonymity?

  9. BM,

    You said “Smoking levels appear to have increased … ” but the link *you* posted up-thread shows that even if (and its a big if) illegal cigarette consumption has increased as KPMG state, there is *still* a net reduction in smoking rates!!! Don’t you even read your own garbage?

    You willfully misquote an article on an ABC blog because you’ve fallen hook, line, and sinker for some transparently self-serving corporate fairy tale. I can only think you’d do that because you’re waging some personal jihad against Labor.

    More from here

    The empty pack survey, which involved the collection of 16,000 discarded cigarette packets from around Australia and determining whether they were bought legally or illegally, is “the most reliable measure of contraband and counterfeit”, according to the (KPMG) report.

    But Simon Chapman, a professor of public health at Sydney University, says the methodology the report has used for this finding is flawed. “There would be hundreds of thousands of tourists who would come to Australia every year who smoke and it’s only been in recent months that there have been restrictions on the number of cigarettes you can bring in duty free.

    “So the idea that any cigarette that you found discarded which wasn’t a plain package could have been brought in by large numbers is an obvious flaw.”

  10. @Chris W
    I do agree that the methedology of theKPMG report is questionable, but less so than any self-reported statistics. I didn’t raise this as a ‘jihad’ as you emotionally claim – I think the NDIS and NBN policies were essential and would never have risen from a Coalition government. Nevertheless, it is far too early to call the plain packaging or carbon tax policies a success. It is also worth noting that prior to September there was a 2 carton limit on duty-free cigarettes, reduced at that point to 2 packets (250 down to 25). This is quite a significant reduction, which somewhat negates claims that discarded foreign packets are all from tourists.

    @John Quiggin
    Yes, it is very easy to order cigarettes of questionable origin online, through international or local suppliers – I have tried it in the past. Many such sites claim to be legitimate, but the packets sold clearly display foreign packaging, and in some cases a customs ‘not for resale’ sticker! This is one reason I favor the packet study over survey based statistics, as people ordering from an Australian website who take its claims at face value may still be obtaining black market products. Food for thought.

  11. You are the dumbing idiot I have ever read. Th World financial crises was caused by the massive debts and defi8cits od Europe and the US. The US was caused by Democrat (read lunatic incompetent left wig bozo’s) governments requiring banks to lend 40%+ of their lending dollars to “low income borrowers” (i.e. those that have NO chance of paying the money back). The banks packaged these loans up and sold them to investment banks that used them as collateral. If the government had stayed out of the loans market entirely, these loans would not have been made, and no forfeitures would have occurred, and NO crisis happen. Europe collapsed because of left wing socialist spending policies like those of the Green- Labour alliance with debts at over 100% of gross domestic policy – exactly where that criminal Obama is taking the US.(it was 65% when he took office – it is over 100% now – in just 5 years – and he has increase tota; us gov’t liabilities to OVER 90Trillion !!!!!!!! – 60 times GDP – the us is bankrupt – thanks primarily to your hero Barack Al (Capone) Hussein Adolf (Hitler) Obama – your hero !!)

    Australia got thru the crisis because when Rudd took over gov’t, Australia had ZERO federal gov’t debt (as opposed to 6 years later when they leave behind $370+ BILLION in debt), and could therefore do some deficit spending. and 2) China pump primed its economy even more than that moron Obama, and kept there imports of natural resources strong. It had NOTHING to do with the previous gov’t you brain dead MORON!!! Everybody is born with a brain – did you eat yours ??? Or just turn your head sideways and drink the damn thing – I know – your face caught on fire when you were young – your mother put it out with a cricket bat, and was so embarrassed she shoved it up you a…s (rear-end) where it resides to this day !!!!
    Europe has had a price on Carbon for over 10 years – it has cost them over $1 TRILLION and has not only had NO positive affect – it has made things worse. Is there anybody anywhere on earth dumber than you ????????

  12. @Al Newman

    Alfred E.,

    Again, I have been entertained and informed by your measured contribution. One piece of advice, though: more passion please – say what you REALLY think .. don’t just numb the readers’ brains (in whatever bodily recess they may reside) with hard, irrefutable facts.
    We are all (I feel sure Ikonoclast, at least, would support me here) indebted to your incisive, albeit novel, analysis of the GFC.

    You say:

    “China pump primed its economy even more than that moron Obama, and kept there imports of natural resources strong. It had NOTHING to do with the previous gov’t you brain dead MORON!!! Everybody is born with a brain – did you eat yours ???”

    What was pleasing about these bon mots is your restraint and the fact that you finally spelled “moron” correctly. Repetition certainly helps the learning process, eh?

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