Wednesday, September 14, 2011

Short termism in current Australian political discourse

I hope to bring the next post in my Greek series up later today. I am enjoying revisiting that trip, as well as my exploration of the surrounding history. I know that at least some readers are too. For now, a brief comment on some current events.

When we were in Greece last year there were constant demonstrations against the Government's proposed austerity measures. Now, almost twelve months later, Greece's problems roll on.

I am not close enough to the numbers to have a proper feel for just what is happening or likely to happen. However, there are some things that do confuse me.

The first is the tendency to conflate Greece's membership of the Euro zone with its membership of the EU as evidenced by this piece in today's Australian. I would have thought that they were two different questions, that Greece could reintroduce its own currency without affecting its EU membership.

The second is an apparent confusion, or at least confusion in my mind, between the survival of the Euro and any bail out of Greece of other countries. I would have thought that so long as the European Central Bank itself is sound, and that may be threatened if it has purchased too much bad Government debt, the Euro can survive as a currency regardless of Greece.

Australia has not been immune to the Lemming Bros (the pun is intentional) behaviour of the global financial markets. The Australian economy would probably have softened in any case since the country is sitting uncomfortably at a gap point. The signs continue to point to rapid mining expansion, but in the meantime the rest of the economy, the bulk of the economy, is being affected by the high Australian dollar and by global uncertainty.

Australian politics continues to be quite volatile, sufficiently volatile that reporters and especially commentators have become a lagged variable, always a little bit behind the moving political front. It's interesting, actually, because it's a symptom of current obsessions with the immediate present.

Take the boat people debate as an example and leaving aside discussion on substantive issues. After the High Court decision on the legality of the Government's Malaysian "solution", the commentariat focused on this as another blow to the Gillard Government, fuelling further debate about the PM's survival. The Government was apparently wedged between the left of its own party and the Greens on one side, the Opposition on the other. In fact, and thanks to some clumsy politics on his part, Opposition leader Abbott seems to have wedged himself. The debate has moved on.

The introduction of the Carbon Tax legislation into the Federal Parliament creates a new element in the political dynamics, another piece of political theatre. Of course everybody knew that it was coming, but now that it's actually here people are going to talk about it, taking attention away from other issues including refugees. Then, when that legislation is passed as seems likely, debate will move on again.

I was trying to think of an analogy to illustrate the continuing strange disconnect between the immediate dominant themes in discussion and reporting and the actual business of Government. The best I can come up with is that the Australian Government is like a large ship whose momentum drives it through the water, whereas so much discussion focuses on the immediate bow wave. The Government may or may not survive the next election, but in the meantime things continue.

If I were asked to nominate the single most important issue that will affect the Government over the next two years I would say the economy and associated structural change. At individual policy level, both the Carbon Tax and proposed Resource Rent Tax are based on certain assumptions about economic activity. At a broader level, both community attitudes and the Government's ability to do things actually depend upon economic performance.

If the economy goes reasonably well, the Government has a chance of long term survival independent of decisions on specific issues. If the economy goes sour, then all bets are off.  

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