PM’s year-end review masks ongoing woes
The prime minister was more the circuit preacher than “Scotty from marketing” as he addressed the final Coalition party room meeting of the year. His stirring words of self-congratulation were tempered with a gentle reminder they all needed to stay humble.
The old retort – they have plenty to be humble about – can be applied, but at the end of a year that “has been like no other”, Australians have survived better than many. And Morrison wouldn’t be a politician if he didn’t claim a lion’s share of the credit. Compared with Donald Trump’s America or Boris Johnson’s Britain, Australia’s handling of the pandemic has been better than world-class.
He didn’t do it alone, of course, but he was more ready to acknowledge his fellow citizens and Liberal and National colleagues than he was to mention the premiers and chief ministers, let alone the federal opposition.
Morrison, with considerable justification in the latest national accounts, was able to claim “the comeback has begun, but the recovery still has quite a journey ahead of us”. He said, “We must continue as we have this year as we move into next year.”
And that is where the sermon became problematic. Not only for many in the chosen congregation, but also for the prospect of Australia getting a government that is genuinely transparent, willing to be held to account and that pays more than lip-service to putting the national interest ahead of sectional interests. A compelling case for where this government is failing in these regards was made by former federal Liberal opposition leader John Hewson in his comment piece, “How rorts, mates and marketing took over politics”, in last week’s edition of The Saturday Paper.
Morrison, no doubt with a hard-nosed appreciation of the conflicting pressures within his ranks, chose to pretend their unity was greater than it is and their motives purer than close examination would accept. He told the party room, “We must continue … that stability, that unity of purpose, the selflessness of government that is incredibly important. The humility of government is one that looks at what the needs of the community are, not what our interests are.”
But the fiscal conservatives in his ranks who swallowed hard as the government embarked on the biggest spending spree in the country’s history have little patience with more stimulus. Indeed, the winding back of JobKeeper and JobSeeker could see the “comeback” stall in its tracks. If the withdrawal was to keep them on side, it could be a huge price to pay for stability and unity in the government.
The Reserve Bank deputy governor, Guy Debelle, recently warned that one lesson of the global financial crisis was the risk of removing stimulus too early. He pointed to the decade of weak growth in Britain and Europe. The United States, now with its latest stimulus moves stalled in the Republican-dominated senate, looks set to repeat the folly. There is a real prospect Australia will too, if not on such a large scale.
Treasurer Josh Frydenberg took great heart from the strong growth in consumer spending in the September quarter. He pointed out that 60 per cent of aggregate demand in the economy comes from household consumption. But The Sydney Morning Herald’s economics writer Ross Gittins says the September figures are coming off a very low base. For that consumption to be sustained, a problem that existed long before Covid-19 will need to be addressed – low wage growth and productivity.
The unions and the Labor opposition say the Morrison government’s industrial relations bill, introduced midweek, will do nothing except deliver wage cuts to millions of workers. Their core complaint is the ability of employers to waive the better-off-overall test under new rules to be applied by the Fair Work Commission.
Labor’s Tony Burke held up the bill in the senate courtyard and said it was the government’s Christmas present “to workers who got us through the pandemic”. He said the government has taken the better-off-overall test and “turned it into a test where under an agreement, every single worker covered can be worse off”.
The ACTU secretary, Sally McManus, who was a participant in the 150 hours of discussions with employers and the government during the darkest days of the pandemic, says “these proposals were never raised”. She says the proposals are “dangerous and extreme”, likening them to WorkChoices in how they would allow employers to cut wages and conditions. She says the “union movement will fight these changes”.
Industrial Relations Minister Christian Porter defends the changes as “incremental but consequential reform to try and remove the barriers to employment growth”. They are tied to the damage done to businesses by Covid-19 and have a two-year time limit. He says that even the architect of enterprise agreements, former Labor prime minister Paul Keating, accepts the system isn’t working as intended and needs reform.
“If businesses don’t exist,” the prime minister yelled in parliament, “then no one has a job.” This is an argument that presumes businesses have the right to exploit workers to ensure their own survival – if you don’t want to work for a pittance, get a better job somewhere else. This is the same flawed thinking that led former Liberal prime minister John Howard into the ravine of WorkChoices. It may be acceptable in the US but, if the 2007 Australian election proved anything, it’s that it is an idea that has been thoroughly rejected by the public here.
Morrison’s project to continue next year “as we have this year” must surely have one huge caveat – Australia’s dealings with China. No one can dispute that it is in our national interest for a reset.
Trade Minister Simon Birmingham gave the government’s frankest assessment yet of just how important China is to Australia and how relations have deteriorated. He did it in the formality of the senate, giving added weight to his remarks.
Birmingham spelled out the benefits of the China–Australia Free Trade Agreement (ChAFTA) signed by the Abbott government in 2015. Six rounds of tariff cuts saw Australia’s exports to China in 2019 valued at $149.2 billion, up 97 per cent since the agreement came into force.
The minister pointed to massive increases in our exports to China between 2015 and 2019 – beef grew by 106 per cent to $2.67 billion; fresh and frozen fish, lobster and crayfish grew by 17 per cent to $711 million. And as tariffs were eliminated, cosmetic skin care products saw export sales to China rise by 39 per cent.
Birmingham points out that the sheer size of the Chinese market makes it impossible for Australia to replace, although the government is seeking diversification through new trade arrangements, some of which include China. But here’s the rub. While China has signed up to the rules of the World Trade Organization and to dispute procedures in the ChAFTA, it is ignoring them – as only a giant economy can with relative impunity.
Birmingham, as diplomatically as he could, left no doubt that Beijing’s sanctions, boycotts and bans on many Australian exports – new items are being listed weekly now – are intended to be politically coercive, rather than being motivated by any real breaches of biosecurity or other technicalities. There is no other cogent explanation.
Given the depth of the ditch into which the relationship has fallen, the wisdom of the government’s pushing of the new foreign relations bill is provocative rather than helpful. It passed with Labor’s support on Tuesday and requires states, local governments and universities to seek approval for all reciprocal arrangements with foreign countries – read: principally China. Sure, the Commonwealth has the constitutional prerogative over foreign affairs but why insist on a bill that had its genesis in hardball domestic politics? No one doubts that Morrison’s real target is not China’s Belt and Road deal with Victoria but the state’s Labor premier, Daniel Andrews. Andrews signed up to it just at a time when the China hawks in Canberra were dictating a more jaundiced view of Beijing.
Labor is convinced that Morrison is neither “calm nor strategic” in his responses to the China crisis. Shadow Foreign minister Penny Wong told the ABC’s Insiders the government has a reflex to splashy headlines “rather than focusing on both how the tone of the response and whether the response is actually in the national interest”. A rush now to quash Victoria’s memorandum of understanding with Beijing, which had the purpose of encouraging investment in the state, will certainly add to the perception that Australia is treating China as the enemy.
So not a lot to self-congratulate here. No wonder it wasn’t prominent in the end-of-year list of achievements. Nor was the government’s effort on climate change, which was unable to warrant an invitation for the prime minister to speak at Boris Johnson’s Climate Ambition Summit this weekend. If Morrison wants to be world-beating, he’ll have to show more courage to challenge the sceptics in his ranks who put fossilised vested interest ahead of the national interest.
Much-vaunted “stability and unity” can come at a terrible price. Amen.
This article was first published in the print edition of The Saturday Paper on Dec 12, 2020 as "Proud to be humble at the end of a horrible year".
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