Sunday, November 14, 2010

Is Julia Gillard going the way of Kevin Rudd?

I will bring up the next Greek post later today. However, I could not resist making some brief comments on current political and public issues in Australia.

It seems to me that the Gillard Government is in danger of falling into the same policy traps that bedeviled both the NSW Labor Government and then the Rudd Government. Central to this is a lack of clarity in policy objectives, along with a tendency to confuse the political and the policy. Let me illustrate by example. 

When Opposition Treasury spokesman Joe Hockey made his initial comments on the Australian banks, I thought that he had made an error of political judgement. Apparently not, because the Government itself seems to have delivered the field to him.

If you look at Government statements on the banks, they seem to mix together two very different things.

The first is the need for competition in the banking sector. This is a public policy issue, one that the Government has been pursuing for some time. Whether their approach is sensible or not is open to debate, but this is a policy debate.

The second thing is the temerity of the banks in raising interest rates. This is a political response, but it is also one over which the Government has no real control. By talking tough in the way it did, the Government set itself up for failure, blurred the competition issue, and essentially validated Mr Hockey's stance in many people's minds. It also created a problem to some degree because it created an apparent tension between bank bashing and the Government's international argument that the Australian bank's deserved special treatment in the new international regulatory arrangement.

During the election campaign, Julia Gillard rejected the idea of a big Australia, campaigning on sustainability, suggesting that population targets might be agreed. This played to popular concerns in this area.

To my mind, the question of sustainability and population is a legitimate matter for debate. It's a genuine public policy issue. However, in phrasing it the way she did for immediate political purposes, the PM created a tension between her rhetoric and the underlying demographic realities. Now newspaper reports suggest that the approach is going to have to be abandoned or at least significantly modified following advice from Treasury.

There is nothing profound about the Treasury analysis. The variables it points to are just those that I outlined in my own simple analysis at the time. However, the whole issue has now become a potential problem for the Government.

The MySchool website has become another problem for the Government. The difficulty here appears to lie in part in a new way of calculating socio-economic disadvantage, in part in the definitions associated with the calculation of school finances. Again, we have the same mix of public policy and the way that policy is packaged in political terms.

The public policy issues associated with the website were disputed at the time, including on this blog. However, in its responses to the debate, then PM Rudd and Minister Gillard talked tough, to my mind promoting the importance of the site beyond that which could actually be achieved. They also mixed together two very different sets of arguments; the right of parents to have information and the impact that the site would have on improving the delivery of school education. 

I accept that this is an opinion. However, the likelihood of the site striking trouble was always substantial simply because of the way that changes in reporting were likely to affect individual schools. The difficulty with over-promotion lies in the way it affects subsequent reporting of, and responses to, specific problems.

The reliance on a very specific measure, in this case socio-economic disadvantage, points to another problem in current approaches, the overall reliance on measurement and on a sometimes proliferation of often fragmented performance indicators.

I have written on this one a fair bit. One key problem is that what is measured then becomes a key driver, with sometimes perverse results. A second difficulty is that it can actually set policy up for apparent failure.

The problems currently faced by the COAG (Council of Australian Governments) system are a case in point.

The new COAG arrangements were meant to enhance cooperative working; give greater delivery flexibility to the states and territories; reduce administrative complexity through streamlined arrangements; and ensure transparency and accountability. The actual result was a myriad of agreements, each with its own sometimes complicated set of performance measures, that made life very complicated indeed.

The way the new COAG arrangements worked in practice reflected the style of the Rudd Government, including its desire for control. Steps are underway to reform the process. However, the problems flowing from the previous approach are going to be with the Government for some time yet.

One of the big general problems with the Rudd Government, one of which COAG is an example, lay in its almost uncanny ability to fragment and complicate things. In some ways, it got the worst possible balance. Messages were simplified and tailored to meet political needs, while the underlying polices sometimes went in the opposite direction. A disconnect emerged between the two.

To illustrate, consider the question of GPs. Forget the political arguments and focus instead on the underlying policy structure. This is actually quite simple, although the solutions may be complicated.

  1. Australia doesn't have enough GPs. We need measures to increase the number.
  2. The geographic distribution of GPs in Australia is wrong and does not reflect varying needs. We need measures to address this.
  3. No matter what the Government does, both the number of GPs and their distribution are going to be a problem for the foreseeable future. We need measures to help us get by in the meantime.

If you look at the Government's policy measures, you will see that they can all be grouped under these three headings. Of course other factors are involved. These include quality issues, the relationships between GPs and the other specialities and the relationships between GPs and the hospital system. Still, the basic policy structure is simple enough.

One of the key challenges facing Prime Minister Gillard, one that will determine whether or not she follows in the path of PM Rudd or Labor in NSW, lies in her ability to simplify and clarify not the political, but the policy and policy messages. A second key challenge will be the ability of she and her Government to actually integrate policy across areas.

So long as immediate political messages dominate, so long as policy remains fragmented and complicated, then Ms Gillard is likely to fail.                     

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