Why Saying “No” Can Save Australia From Rent-Seeking

The unfortunate fall of the Gillard government probably places Australia back on course to becoming a rentier state with the exodus of moderates from the ALP. The question therefore emerges as to whether Kevin Rudd or Malcolm Turnbull will either allow or oppose Australia succumbing to rent-seeking.

Dr. David Paul Bennett analyses the current socio-political situation which now hinges on whether local government is recognised in the Australian constitution in a referendum to be held this year.

It is noteworthy that, within a day or so of the Senate passing the legislation authorising a referendum to be held on the inclusion of local government in the Australian constitution, Julia Gillard was deposed as prime minister in favour of Kevin Rudd. This could have been an instance where tactics were more important than strategy. Julia Gillard probably would have survived as prime minister had she had the legislation on the constitutional referendum passed on the last sitting day of Parliament.

Had the above scenario occurred, the rent-seekers within the two major parties would have reluctantly allowed Ms. Gillard to have continued to serve as prime minister until the Parliament rose. This is because their overriding priority was (and is) to ensure that local government is constitutionally recognised so that they can later proceed with “regionalization” (sic).

The real historical significance of Kevin Rudd’s return to the prime ministership is that the rent-seeking agenda is now well and truly back on track. The rent-seeking forces within the Australian Labor Party (ALP), led by the new deputy prime minister, Anthony Albanese, have engineered a situation which, from their perspective, is virtually a no-lose one for them.

If Kevin Rudd’s much vaunted popularity proves to be correct, they (i.e. Labor rentiers) can either win the 2013 federal election or at least avoid decimation. For the hard left of the Socialist Left (SL) of the ALP, a “respectable” defeat coupled with the passage of the “Yes” case will set the scene for “regionalization” (sic) in which new left-wing industry union regional bailiwicks can paradoxically be subsequently established by an Abbott government.

The move to a “regionalized” (sic) regime had previously been on the table when Kevin Rudd was first prime minister. With Tony Abbott’s ascension to the Liberal federal leadership in late 2009, the scene had been set for this opposition leader to deliberately lose the 2010 federal election so that, in the following parliamentary term, the then Finance Minister Lindsay Tanner could succeed Rudd as prime minister. The scenario in which this succession would have occurred could either have been a ruthless deposition of Prime Minister Kevin Rudd or his being eased out, possibly to take up a prestigious international posting.

Tanner would have had the leverage to have engineered such as succession due to his successful “covering of his tracks” concerning the financial excesses that had occurred with Building the Educations Revolution (BER) and other possible questionable spending as a result of the stimulus packages of 2008-2009. It was to prevent Tanner from making such a power grab that an overwhelming majority of federal Labor Members of Parliament (MPs) in June 2010 compelled Kevin Rudd to make way for Julia Gillard as prime minister.

Had there being a Tanner prime ministerial succession, then the SL’s interests in undertaking “regionalization” (sic) would naturally have been accommodated. From a Liberal rent-seeking perspective, their interests would have been safeguarded by the coalition winning a mega-landslide in the March 2011 New South Wales state election. Consequently, the hard left of the SL and the Abbott Liberals could have politically “Balkanized” Australia between them between 2011 and 2013.

Given that a Tanner federal government predictably would have been overbearing, the Abbott Liberals could have reasonably anticipated a comfortable, if not a landslide, election victory in 2013. As it was, the advent of the Gillard government in June 2010 side-tracked “regionalization” (sic) for three years.

Due to a strong pro-states sentiment within the Liberal Party (which was reflected by many of the excellent maiden speeches of coalition MPs in 2010), the inter-party rent-seeking forces moved to eventually ensure that the Gillard government held a constitutional referendum on local government recognition. As tough and as tenacious as Julia Gillard was as prime minister, the underlying reason why her minority government survived for three long years was because the rent-seekers in both the major parties waited for the passage of legislation authorizing a referendum on local government recognition in the constitution to set the subsequent groundwork for “regionalization” (sic).

It was in the pursuit of “regionalization” (sic) that rent-seeking elements within the ALP exploited Kevin Rudd’s bitterness at his effective removal from office to sabotage Labor’s July-August 2010 federal election campaign by brazen leaking so that there would be a hung parliament. Because the rent-seeking Abbott Liberals were prepared to allow Labor to stay in power after the 2010 federal election, Prime Minister Gillard was coerced by ALP rent-seekers to declare on the eve of the poll that a government she led after the election would never introduce a carbon tax.

The Abbott Liberals knew that, if their fellow rent-seekers within the ALP made Julia Gillard break such an important pledge, the scene would be set for Tony Abbott to win the 2013 federal election in a landslide victory. For this important reason, Abbott was prepared to allow Julia Gillard to serve a near full term so that he could discredit her for breaking such an important promise. This stratagem of Abbott’s was reflected by his mantra that the carbon tax was “a bad tax based on lie”.

The carbon tax did not inflict the tremendous damage that Abbott prophesised but this tax’s impact was still sufficiently deleterious that the prime minister never completely regained the confidence of the Australian people. She attempted to win the Australian people by focusing with sheer determination on policies such as the Gonski education funding reforms and the National Disability Insurance Scheme (NDIS- Disability Care). The eventual (or near impending) success of these reforms could have been sufficient for Prime Minister Gillard to have had a viable chance of winning the 2013 federal election had it not been for Kevin Rudd’s co-conterminous de-stabilization campaign.

The Rudd destabilization campaign was curious in that he initially had little support within the ALP parliamentary caucus. The main manifestation of Rudd’s destabilization as foreign minister between 2010 and February 2012 was leaking to the press. With the benefit of hindsight, Prime Minister Gillard should have endured this disloyalty because, as events subsequently showed, it would have been better to have Kevin Rudd within the tent rather than outside.

Nevertheless, the convincing margin by which Julia Gillard was re-elected by the federal ALP caucus in February 2012 seemed to put paid to the notion that Kevin Rudd should ever have challenged. Indeed, the despatch with which former New South Wales premier, Kim *Carr was appointed a senator and foreign minister after Kevin Rudd resigned from cabinet seemed to suggest that the Gillard forces had anticipated the then former prime minister’s challenge.

(*Even though it would have been impossible for Kim Carr to overnight become a senior federal politician without Julia Gillard’s support, he later inexplicably reciprocated with gross disloyalty by becoming a Rudd supporter despite constant denials).

There were times when it seemed that there was a pincer movement between the rent-seeking forces in both parties to ensure a Rudd return after his abortive leadership challenge in February 2012. Indeed, Rudd probably regarded his failed February bid as a means to move to the backbench so that he could launch a later stronger bid.

Because the carbon tax (the legislation for which was passed in November 2011) had not had a draconian detrimental impact on the nation, the Abbott Liberals were desirous of a Rudd return to fatally undermine Julia Gillard’s political effectiveness. The relentless attacks by the federal opposition in July/August 2012 almost created the momentum for Rudd to depose Prime Minister Gillard but strangely an apparently impending challenge fizzled. Nevertheless, media speculation regarding the possibility of a Rudd leadership challenge continued to unsettle the Gillard government.

The move by Simon Crean in March 2013 to precipitate a Rudd challenge and the former prime minister’s failure to then step up to the plate seemed to scotch the notion that Julia Gillard’s predecessor would become her immediate successor. To try to help explain how the seemingly impossible happened, (i.e. Rudd’s reinstatement as prime minister) and what the future may be, it is necessary to analyse the ebbs and flows of the ALP’s faction system.

The Frictions of ALP Factionalism

Due to the 1954-1955 *Evatt Purge of the Labor Party, the Communist Party of Australia (CPA), through a process called “entreeism,” infiltrated the ALP so that a strong left-wing was consolidated within the party. The power of the extreme left was particularly apparent in Victoria such that in 1970 in a rare act of courage by Gough Whitlam, the then federal Labor leader, he sacked the state branch in what became known as “federal intervention”.

(*This purge precipitated the formal formation in early 1957 of a great political party, the Democratic Labor Party, DLP)

The impacts of Whitlam’s federal intervention were profound. First, this action enabled the then opposition leader to win the December 1972 federal election. Another important ramification of the 1970 intervention was that the left within the ALP reacted and formally established the SL as a faction. The SL was originally a very tightly structured faction and this caused many in the right over a considerable period of time to organise a right-wing faction which was variously known as “*Centre Unity” and “Labor Unity”.

(*For simplicity’s sake, the non-SL of the ALP will be referred to as the “Right”).

The post-1970 intricacies of Labor factional politics, including a myriad of sub-factions, are bewildering but it is accurate to assert that the ALP broadly has a left faction and a right faction. The Right have normally had a clear federal parliamentary majority and this was particularly apparent during the Hawke-Keating era (1983 to 1996). There was cross factional voting in the two 1991 leadership contests between Hawke and Keating but, in essence, the bi-polar dichotomy remained in place with the federal leader invariably coming from the Right.

The acceptance by the mainstream of the SL at a federal level of the Right’s dominance helped explain the relative stability within the ALP between 1996 and 2001 when Kim Beazley Jnr was opposition leader. Beazley’s losing the apparently “unlosable” 2001 federal election set the groundwork for the ALP to be beset by leadership instability between 2002 and 2006.

Initially, the transition from Kim Beazley to his fellow right-wing one-time deputy Simon Crean was smooth. Inter-factional goodwill was also generated when Jenny Macklin of the SL, who had performed very well in the 2001 campaign in the junior portfolio of shadow spokesperson for the Aged, was rewarded by being elected federal deputy leader of the ALP following the election defeat.

Although Simon Crean and Jenny Macklin co-operated well together as a leadership team, the former’s position was undermined by low poll approval ratings. Because the Right were then in the dominant position, there was then no prospect that some-one from the SL would depose Simon Crean. Consequently, the focus shifted back to Kim Beazley as a leadership alternative as he still had a dedicated following within the federal ALP caucus.

Even though Beazley had previously delivered loyal support to Simon Crean as opposition leader, it was perhaps too much for the former leader not to take the opportunity that seemed to be there of again becoming Labor leader. Nevertheless, Beazley’s coveting of his former role led to an understandable break down of good will with Crean. Realizing that his leadership was untenable, Simon Crean made way and supported Mark Latham to be his successor in November 2003.

Latham had previously supported Simon Crean in June 2003 when he successfully won the caucus’s support in a leadership ballot that the then opposition leader had called. Simon Crean returned the favour when he stood down as leader in November 2003 and supported Mark Latham in the ensuing contest against Kim Beazley. Mark Latham on being elected by a one vote margin was quick to draw the historical parallel with John Curtin who won election in 1935 as Labor leader by the same margin.

Alas, Mark Latham as Labor leader was to be more of an HV Evatt than a John Curtin due to his coming across as overbearing. The main theme of the coalition’s re-election October 2004 campaign so effectively exploited popular unease concerning Mark Latham’s suitability to be prime minister that Howard won that election. This election defeat naturally made Mark Latham’s leadership untenable and in January of the following year, Kim Beazley returned as opposition leader with Jenny Macklin continuing as deputy leader. She genuinely supported Beazley as leader despite their being respective stalwarts of the Labor Left and the Labor Right.

The Beazley return was vitally assisted by a loyalist support group which Mark Latham had dubbed the “roosters” in reference to the following senior front benchers: Senator Steve Conroy, Wayne Swan and Stephen Smith. The support of this “Praetorian Guard” combined with loyal support from Jenny Macklin seemed to restore leadership stability to the Labor Party under a returned Kim Beazley.

Unfortunately, underlying doubts concerning Beazley came to the fore in 2005 when he refused to support Simon Crean when it seemed that he did not have the numbers to retain ALP preselection for his seat of Hotham. Kim Beazley’s refusal to support Simon Crean or at the very least take a public stand as to whom he supported in the pre-selection contest, for many ALP insiders raised historic memories regarding the opposition leader’s father’s deliberate absence from the illegal 1955 “ALP” Hobart which ensured passage of the motion prescribing industrial groups.

Simon Crean’s near miraculous pre-selection victory consequently again brought questions to the fore as to whether Kim Beazley had “the ticker” to lead the ALP to victory at the next federal election. At a practical on the ground level, the Crean survival renewed the scope for an inter-factional alliance to depose Beazley as ALP leader before the 2007 federal election.

As a senior member of the SL, Julia Gillard helped marshal the numbers from the Left for a Beazley alternative while Simon Crean was able to reach out to disaffected members of the Labor Right within the caucus. It was true that this anti-Beazley alliance was in essence a reconfiguration of Latham’s former support base. However, the degree of inter-factional co-operation constituted an unprecedented shift within ALP power dynamics.

Kevin Rudd was tapped in late 2006 to be the alternative to Beazley because he led a small but numerically deciding sub-group that could ensure a leadership challenge. Due to Julia Gillard having a larger voting base than Kevin Rudd, some ALP politicians incorrectly thought that she would be the new “strongman” in this leadership duo. This was not to be due to Julia Gillard’s inherent decency as a person and because Lindsay Tanner manoeuvred to assume this Svengali role.

The broader public was generally unaware that the SL was internally divided due to rivalry between Julia Gillard and Lindsay Tanner. This rift undoubtedly had a personality dimension to it but the broader source was because Julia Gillard was a political moderate who wanted to work harmoniously with the Right to the extent that party factional divisions could be transcended. By contrast, Lindsay Tanner moved to exploit the comparatively narrower base which Kevin Rudd had as ALP leader.

The other advantage that Kevin Rudd possessed for the hard left of SL was that he could be a moderate face whose “me-tooism” could sway swinging voters to the ALP in the November 2007 federal election who were comparatively satisfied by the prosperity which John Howard and his Treasurer Peter Costello had delivered. The other important dimension which delivered Kevin Rudd victory in 2007 was internal sabotage within the coalition by rent-seeking elements who were (and still are) determined to destroy Australian federalism.

Furthermore, the retirement of Kim Beazley at the 2007 federal election removed the potential focus for loyalist discontent that Rudd led a relatively harmonious government upon coming to office. The retention of Wayne Swan as treasurer placated most of the Right so that the inter-factional rivalry within the ALP seemed to have been subsumed by the new power structure.

That the ALP might have moved to a post-factional regime was seemingly reflected by Kevin Rudd having the apparent power to appoint the cabinet rather than have caucus elect the ministry and then have the party leader allocate portfolios. Paradoxically, due to Rudd’s lack of a substantial factional base in his own right, he lacked the overall capacity to appoint a ministry which did not reflect the de facto balance of factional power within the caucus.

Nevertheless, because Rudd’s “me-tooism” had crucially helped deliver victory to the ALP at the 2007 election, in the tradition of Shakespeare he had power ‘thrust upon him’ to the extent he was able to form a virtual government within a government when he, along with three other senior ministers formed the so-called Gang of Four. This clique was composed of Prime Minister Kevin Rudd, Deputy-Prime Minister Julia Gillard, Treasurer Wayne Swan and Finance Minister Lindsay Tanner.

It was via the above cited power structure that Lindsay Tanner was able to ensure that Kevin Rudd embarked upon the profligate spending spree between 2009 and 2010 to ostensibly ensure that Australia did not fall into an economic crisis with the onset of the Global Financial Crisis (GFC). The real reason that Australia was insulated from the GFC was because of the prudential controls that Peter Costello had previously put in place which protected the nation’s credit lines.

It was a tremendous pity that Peter Costello’s successor, Treasurer Wayne Swan, did not counter Tanner within the Gang of Four from proceeding with such reckless abandon. Even though Swan is a political moderate he is also such a convinced Keynesian that he supported Tanner’s policy initiatives.

From Tanner’s perspective, in-debting the nation was part of his strategy of establishing a rentier state. In such a political economy, trading arrangements would be entered into with a mercantilist People’s Republic of China (PRC) in which the drivers of economic power would become Sovereign Wealth Funds (SWFs). Crucial to the socio-economic and political transformation of Australia as a rentier state was the adoption of a super-profits mining tax regime which benefited mining companies with special links to the PRC.

The transformation which Tanner sought was not only swift but one which would ensure his succession to the prime ministership by unfairly scapegoating Julia Gillard for his fiscal excesses. To execute this political manoeuvre, Tanner had to implicate other sitting MPs who shared a degree of responsibility for the distribution of stimulus funds, particularly the Building the Education Revolution (BER) programme. Fortunately, an overwhelming majority of MPs moved to thwart Tanner’s later intended power grab by precipitating a transition to Julia Gillard as prime minister.

The nature of the June 2010 transition to Julia Gillard as prime minister is still fundamentally misunderstood by most Australians. They mistakenly believe that a power clique of factional chiefs acting in collusion with shadowy union bosses instructed that Kevin Rudd be removed from office. In popular imagination, the 2010 Rudd deposition was where the so-called “faceless men” overthrow an elected first term prime minister.

The reality was that there was an inter-factional groundswell of Labor parliamentarians who moved to install Julia Gillard as prime minister so that Lindsay Tanner could not bring to the fore the financial excesses of the BER as part of an eventual power grab. The so-called faceless men such as Bill Shorten, Steve Conroy and David Feeney came on board with the move to depose Kevin Rudd in June 2010 following the groundswell among ALP parliamentarians who were frightened by Tanner’s political manoeuvring.

Ironically, the main delay in ensuring an even faster leadership transition to Julia Gillard was caused by Wayne Swan wanting to ensure that a form of super-profits mining taxation be retained by moving from a proposed Resource Super Profits Tax (RSPT) to a Minerals Resource Rent Tax (RSPT). Shorten, Conroy and Feeney as well as South Australian Senator Don Farrell were at the forefront of instigating the logistics of the de facto transition but the preceding fundamentals came from an array of ALP federal parliamentarians.

Had Kevin Rudd insisted on a leadership ballot in June 2010, his small minority of votes would have come from the hard left of the SL and a range of individual Right MPs, such as Chris Bowen, who were genuinely loyal to him. This initially small nebulous alliance has since endured and recently prevailed because a sufficient number of Labor MPs were spooked by a concerted media campaign which claimed that the ALP was destined for an election rout in 2013 under Julia Gillard.

The major similarity between the June 2010 transition and the June 2013 leadership change is that a sufficient number of Labor MPs formed an inter-factional critical mass to precipitate a leadership change. The major difference between these two leadership challenges is that power will ultimately transfer to a particular faction, the hard left of the SL.

This de facto transfer of power to the hard left of the SL is the overriding disaster of a competent and sincere prime minister in the person of Julia Gillard being deposed. Due to Julia Gillard’s moderation and good sense as prime minister, the distinction between the SL and the Right became blurred. Prime Minister Gillard’s success in establishing an effective working relationship with her Treasurer Wayne Swan helped consolidate the support of Right MPs while as a one-time leader of the SL, Julia Gillard already had existing factional support base with the Left.

If the truth be told, a clear majority of ALP federal parliamentarians supported Julia Gillard as prime minister because she consolidated the cross-factional support that originally brought her to power by being a consultative leader. The scare campaign conducted by the ABC and the Murdoch press that the ALP was facing electoral annihilation if Julia Gillard led the ALP into the 2013 federal election ultimately frightened a sufficient number of Labor parliamentarians to shift back to Kevin Rudd.

Another important reason why there were defections from the Gillard camp to Rudd’s was due to SL members moving to ensure that their faction becomes dominant. The irony of this process is that it has entailed some SL members voting against a notional Left prime minister in the person of Julia Gillard in favour of Kevin Rudd who avowedly belongs to the Right of the ALP! The most notable manifestation of this shift of SL members moving back into their faction’s orbit was the Finance Minister Senator Penny Wong.

Senator Wong’s pragmatic realpolitik action contrasted with the principled conviction of Australian Capital Territory (ACT) *Senator Kate Lundy who voted in favour of Julia Gillard. Had more SL members followed Senator Lundy’s example, Julia Gillard would probably have narrowly survived the Rudd challenge.

(*Senator Lundy to her credit gave a speech in the Senate praising the great Labor statesman, Andrew Fisher who served as prime minister from 1908 to 1909, 1910 to 1913 and from 1914 to 1915).

Besides the SL re-assembling as a faction under the leadership of its hard left sub-faction, the other factor contributing to Julia Gillard’s fall was the defection of Bill Shorten. Shorten’s support for Rudd was a deciding factor in precipitating Julia Gillard’s deposition. Bill Shorten probably commanded between five and seven votes in the caucus.

Had Shorten stuck with Julia Gillard, she probably still would have narrowly survived despite Senator Wong’s defection to the Rudd camp. In terms of the final voting tally, the Shorten defection ensured the Rudd victory (57 to 45).

Bill Shorten Squanders His Political Base

The ramifications of the Shorten defection are still profound for the future of Australian politics because his action constituted a violation of the cardinal rule that politicians do not squander their base. Integral to the intensified two-week media frenzy seeking to facilitate Julia Gillard’s deposition was for Bill Shorten to publicly defect to the Anthony Albanese led Rudd camp.

The hard left not only wanted to ensure that a Shorten defection provided momentum for a Rudd victory but also (and perhaps more importantly) to ensure that he alienated himself from the Labor Right which was mainly entrenched in the Gillard camp. Shorten’s shift in public stance from publicly supporting Julia Gillard to his announced last minute change has cost him too much support among voters despite all the sincerity he projected.

Bill Shorten did not follow the example of former Right factional leader Senator Robert Ray in 1991 of publicly standing with Bob Hawke in December 1991 after he had just been deposed as prime minister by Paul Keating. Robert Ray not only acted ethically by publicly supporting a deposed Bob Hawke but also pragmatically because the then Victorian senator was conveying to former Hawke supporters that they maintain their base.

An even better example for Bill Shorten of the dividends of not defecting is that of Anthony Albanese. The new deputy prime minister struck the correct balance of remaining loyal to Kevin Rudd after his June 2010 departure and professionally supporting Julia Gillard as prime minister.

Had Shorten followed the Albanese/Ray course, leadership of the Gillard bloc would have passed to him. No-one would have begrudged Shorten staying on as a senior minister under a returned Prime Minister Kevin Rudd. Indeed, even hard left members of the SL such as Greg Combet might have stayed on in politics and being factionally aligned to Shorten. SL members such as Senator Kate Lundy who supported Julia Gillard to the end will probably return to the factional fold which will only enhance Albanese’s power base.

Then there is also the swag of non-SL moderates such as Stephen Smith who are very unfortunately (and unwisely) are departing the ministry or politics altogether in the wake of Julia Gillard’s most unfortunate political demise. This vacuum is not creating any angst in the Albanese/Rudd camp because the former has a critical mass of factional allies mainly from the hard left who have moved into the breach.

There is still a substantial bloc of Right MPs who will still thankfully be in the caucus but Shorten’s public defection has alienated them from him. Consequently, should the ALP lose the next federal election, Shorten might very well become opposition leader but his leadership tenure will essentially be determined by Albanese who may well allow the former AWU chief one parliamentary term and then take the Labor leadership should the ALP fail to return to government.

Alternately, Albanese may take over as opposition leader should the ALP lose the 2013 federal election. The overriding point that needs to be made is that, due to Shorten’s public defection, Albanese is now and will in the future be the politically more powerful of the two. This Albanese ascendancy within the ALP will lay the groundwork for Labor, and perhaps Australia, to move to the hard left.

An argument could now be put that it is perhaps better that the coalition win the next federal election, but Abbott alas is the Anthony Albanese of the Right. As terrible as the situation now is for Australia due to Julia Gillard’s deposal, the best possible scenario is that the ALP still wins the next federal election under the Rudd/Albanese leadership team so that Malcolm Turnbull can again become opposition leader and hopefully win the next election after the 2013 poll.

The aversion to Abbott becoming prime minister is based on what he will probably do in power. In one way or another, Abbott will ‘regionalize’ (sic) Australia as part of establishing a rentier state. From this perspective, senior people in the Albanese camp might regard an Abbott prime ministership to be strategically beneficial because they expect that hard left industry unions will be able to consolidate their power within a new regional tier of government.

However, an Abbott government will not only be hostile to trade unions but perhaps industrially effective in destroying Australian trade unionism. Peter Reith’s anti-union network within the coalition has been re-activated. Furthermore, the Shadow Employment Relations Minister Senator Eric Abetz is the strongest supporter of a Work Choices (No Choices) industrial relations regime. Due to a Prime Minister Tony Abbott’s political skills, an attack on penalty rates will probably not be again undertaken but the underlying objective of destroying Australian trade unionism (which now has a membership density of just over 20%) will still be pursued.

Another key strategy of an Abbott government would be to pursue a Lasch political strategy where populist politics is utilized to win over Labor inclined voters to the coalition or satellite political parties. There are already signs that Abbott’s Lasch strategy is transforming the ALP at its highest levels. This is ironic given that Kevin Rudd’s return to power has consolidated a shift to the right on refugees. Such a shift is ironic because Kevin Rudd in June 2010 unsuccessfully attempted to rally support by warning that his party was shifting to the right on this very issue.

The ironies with refugee policy continue to abound. The coalition could win over many Labor voters by appealing to base fears concerning refugees. However an Abbott government will probably seek to undermine the wages and conditions by “developing” northern Australia by bringing in cheap foreign overseas workers. The Abbott agenda of “regionalization” (sic) will be crucial to facilitating this agenda and it is also conceivable that foreign agro-businesses will eventually take the place of traditional farms with the support of a coalition government.

As smart as Albanese undoubtedly is, he probably will not be able to gain a political advantage should Abbott become prime minister. The ALP lacks the institutional leverage to have their interests represented should the process of “regionalization” (sic) be undertaken by an Abbott government. The implementation of this policy- combined with the application of a Lasch political strategy and de-unionisation under a coalition federal government - will create fundamental challenges for the ALP should they be in opposition after the 2013 federal election.

With regard to the ALP’s 2013 federal election prospects, prospect of the ALP avoiding a political decimation under Kevin Rudd has dissipated but the *prospects of the ALP winning under Kevin Rudd are still a challenge. There are many memories that the public have concerning Kevin Rudd’s first tenure as prime minister which the Abbott Liberals will now exploit in an advertising campaign. The returned prime minister will ensure that previously safe ALP seats, particularly in New South Wales and Queensland, remain with Labor with the prospect of marginal seats being retained by Labor in those two states.

(*Even though it would have been very difficult for Julia Gillard to have won the 2013 federal election, this was still an achievable objective had she brought Simon Crean back as a senior federal minister and given him a prominent role in the ALP federal election campaign).

The prospect of the ALP holding on to safe and marginal seats in Victoria has diminished in Victoria due to Julia Gillard’s deposition. In South Australia, the ALP’s federal election prospects are dim due to the unpopularity of the state Labor government while in Tasmania state Labor’s coalition with the Greens will continue to undermine ALP federal electoral prospects. In Western Australia, Kevin Rudd is associated too much with the mining tax that the dynamics on the ground will probably not change to favour the ALP.

The overall and probable scenario for the ALP now that Rudd has been reinstated is for Labor to hold some of their own but still lose the election to Abbott. Given that there was inter-party rent-seeking collusion in the 2007 and the 2010 federal elections, the scope now exists with a Rudd injection of popularity that ALP insiders can now possibly do deals with the Liberal Party operatives to hold a certain number of Labor seats in return for conceding an Abbott victory at the next federal election. It is next to impossible that any MP or candidate who supported Julia Gillard continuing as prime minister could benefit from such inter-party collusion.

For those in the Albanese camp (which now unfortunately includes Shorten) who contemplate allowing Kevin Rudd to be a sacrificial lamb, they should appreciate that they will not receive any more favours from Abbott once he is prime minister. Should there be a genuine election contest with Rudd actually taking seats from the coalition, the question emerges as to what sort of government would an elected Kevin Rudd lead?

As previously analysed, Kevin Rudd is now so beholden to Albanese that a hard left federal government with a co-opted Shorten will probably take form should the ALP win the 2013 federal election. It could be envisaged that a globe trotting Kevin Rudd will gradually (or maybe even quicker than that) leave the essentials of power to Anthony Albanese. This development could eventuate in tensions between Kevin Rudd and Anthony Albanese but it is probable that the former will be sufficiently placated by the trappings of power rather than their reality as occurred in Britain in the 1930s with regard to the Ramsay Mc Donald-Stanley Baldwin political partnership.

The Squandered Potential of Simon Crean

To put it mildly, the above scenario is not in Australia’s political interests, nor probable, because Abbott is still well on track to winning the next federal election. The best hope for the ALP to win the 2013 federal election was for Simon Crean to have been appointed as a senior minister given a very prominent role in the 2013 federal election campaign.

Simon Crean was the one politician who Australians trusted that he had sufficient credibility to win over support of swinging voters who would have determined the election result. His unsuccessful *bid for ALP federal deputy leader in the recent June 29th leadership ballot could have established Simon Crean as the inheritor of much of Julia Gillard’s former political base.

(*Simon Crean received 37 Gillard loyalist votes for deputy even though he probably voted for Kevin Rudd).

Key Rudd operatives such as Bruce Hawker, who is probably sincere in wanting to see Kevin Rudd win the 2013 federal election, could have utilized Simon Crean to crucially help engineer a Labor victory. This former Labor leader could have helped integrate powerful pro-Gillard operatives into the ALP national campaign to at least prevent campaign sabotage.

Given that most Australians have had a gutful of Canberra politics, there is now a strong anti-ALP sentiment. While many people may be personally happy for Kevin Rudd’s personal achievement of returning to the Lodge, there is still widespread distrust of him because he broke his word that he would never again challenge Julia Gillard for the Labor leadership.

There is also an underlying public wariness that should Kevin Rudd win the 2013 federal election that he will be allowed by the Labor caucus to serve a full parliamentary term without again being deposed. This apprehension is a factor that the Abbott Liberals will probably exploit in the upcoming election campaign.

Had the ALP national campaign given Simon Crean prominence in which he endorsed Kevin Rudd’s leadership, there could have been a good chance that the public’s fears about the member for Griffith’s tenure as prime minister would have been assuaged.

For Simon Crean to have had credibility to have won the 2013 federal election for the ALP, he would have had to convey that he intended to protect the nation’s genuine national interest. This could have been done by Prime Minister Kevin Rudd giving Simon Crean the right as an integral member of the government’s re-election team to advocate a “No” vote in the referendum on the constitutional recognition of local government.

An undoubted pre-condition of Anthony Albanese supporting Kevin Rudd’s return to the prime ministership was that Rudd supports a “Yes” case in the constitutional referendum. But if Kevin Rudd wants to gain more than the satisfaction of briefly returning to the Lodge by actually winning the 2013 federal election, he will need the extra support of a politician with gravitas. This could have been accomplished by having allowed Simon Crean to have campaigned for a “No” vote in the referendum.

Any contradiction between Simon Crean advocating a position in the referendum contrary to the prime minister’s could have been countered by a strong personal endorsement of the person of Kevin Rudd. Tony Abbott simply cannot afford to endorse a strong “Yes” case because there is a strong pro-states sentiment within coalition ranks. The opposition leaders is still on course to helping the “Yes” campaign win the referendum (despite his tepid advocacy of a “No” vote) by the coalition lapsing relatively quiet on the issue while the Labor Party carries the “Yes” case.

The official “Yes” has been granted ten million dollars by Albanese while
five hundred thousand dollars is to be given to the official “No” case. The strategic benefits for the rent-seeking elements within the coalition of this comparatively small grant is so that it can be given to their allies who can run a dud “No” case campaign.

A Simon Crean publicly advocating a “No” vote would have been worth millions of dollars in publicity. A Crean advocacy of a “No” vote could have potentially exposed internal contradictions within the coalition where there is a genuine pro-states sentiment.

While wedge politics is unsavoury, the current Abbott ascendancy would not exist had the opposition leader not been able to engineer massive leadership ructions at the senior level of the ALP. Indeed, it is an ominous sign for the Rudd led ALP that the Abbott Liberals encouraged the ALP to depose Julia Gillard as prime minister to reinforce the perception of chronic instability within Labor.

Because it is generally not a good idea to follow the strategic advice of your political opponents, the ALP should not rush to an early election as Abbott is agitating for. There is still too much scepticism within the electorate concerning Kevin Rudd’s suitability to be prime minister in the longer term.

A parliamentary session in which legislation is submitted repealing the carbon tax in favour of a floating Emissions Trading Scheme (ETS) is an essential step that the ALP must undertake if Labor is actually to have a chance of winning the next federal election. The tables could well and truly be turned on Tony Abbott should ETS legislation be submitted because he would have to explain why his party is voting with the Greens against repealing the carbon tax which he has so vehemently denounced.

Even though the Abbott Liberals are also ostensibly opposed to an ETS as an impost, surely they would welcome the move away from this tax based on a lie unless they too are being disingenuous with the Australian people. The Australian people have been subjected to enough disingenuousness since June 2010 if not since the 2007 election. This has been because rent-seekers within the political elite have colluded on a cross-party basis to advance their covert agendas.

The ensuing manipulations that have been undertaken have caused too frequent leadership changes (the New South Wales syndrome) at the top with the probable result that many people in outright frustration will ironically vote for Tony Abbott on the assumption that a party as seemingly hopeless divided as the ALP can no longer be trusted.

An Abbott victory in 2013 would indeed be ironic because his political skills (as detailed in previous Social Action Australia articles) have plunged the ALP into turmoil. To be relatively fair to Tony Abbott, the leader of the opposition should not make life easy for a government. However, the rent-seeking agenda that Abbott has pursued has gone beyond partisan politics because it has brought out the venal on both sides of politics.

In essence the rent-seeking campaign will essentially be won or lost in the constitutional referendum on the local government referendum. Should a “No” vote prevail but Abbott still win the federal election, rent-seeking in one form or another will live another day. Alternately, should the “No” vote prevail with Rudd winning the federal election, it may well be the end of the pursuit of the rent-seeking agenda.

For the above scenario to have occurred Kevin Rudd could have brought Simon Crean in to have helped save the nation’s genuine national interest by helping ensure that Abbott was defeated at the polls. Furthermore, an electorally victorious Kevin Rudd could have utilized Simon Crean as a counterbalance to Anthony Albanese so that he (Rudd) would have a degree of genuine independence and scope to pursue sensible public policy.

The departure of Simon Crean from politics is therefore not only a disaster for moderate politics but symptomatic of the catastrophe of the current hard left transformation of the ALP. There has simply been an exodus of too many moderates from the cabinet and parliament in the wake of Julia Gillard’s unfortunate political demise.

There is nothing that can be practically undertaken to effectively change the above cited situation. The best scenario is that an electorally victorious Kevin Rudd will be his own Simon Crean! Political moderates within the cabinet such as the new Immigration Minister Tony Burke have thankfully stayed in the cabinet. However, there might be little that such moderates could do to prevent Anthony Albanese from systematically consolidating his future power should Kevin Rudd win the next federal election.

Anthony Albanese and the Establishment of a Rentier State

Albanese’s approach to exercising power should the ALP win the 2013 federal election will probably be two-pronged. Firstly, over a period of time, he will consolidate the running of the government so that Prime Minister Rudd will effectively be a figurehead. Albanese will ensure that the cabinet functions on a collegiate basis and that there is smooth interaction with the public service. There is nothing inherently wrong with these outcomes but they will ensure that Albanese ultimately sets the direction of government policy.

The major direction of government policy under Albanese will change the nature of Australia’s political economy. Over time, the deputy prime minister will transform Australia from a market economy to a co-ordinated economy with the state fulfilling a powerful, if not predominant, role. Crucial to the transition to a co-ordinated economy will be the onset of “regionalization” (sic).

“Regionalization” (sic) will be the means by which a new more powerful government bureaucracy will be created. Due to massive government spending the public service has become bloated and this, combined with falling government revenue, will create the scope to eliminate the inefficient duplication between state government and federal government bureaucracies.

This inefficient and expensive duplication will be attended to by the Rudd/Albanese government creating a new bureaucracy based on a new regional tier of government. The recognition of local government in the constitution will create the scope to transfer Commonwealth funds that would normally have gone to the states to a new regional tier of government.

States may be constitutionally retained for the foreseeable future but their essential functions will be usurped by a new regional tier of bureaucracy which, due to its funding links to Canberra, will ensure a centralization of power. Albanese will utilize this centralization of power so that a powerful bureaucracy eventually exercises a predominant power over the private sector. Therefore, the deputy prime minister could deploy infrastructure projects to compete with the private sector to eventually bring it into line with government dictates.

Non-recognition of local government in the constitution will prevent the flow of funds to a new regional tier of government so that a powerful centralized bureaucracy cannot be created. Otherwise, such a powerful bureaucracy could create the conditions by which Sovereign Wealth Funds (SWFs) are utilized to further help facilitate a transition to a co-ordinated economy.

The utilization of SWFs to drive economic policy could reinforce a government mindset that a mining super profits tax ‘with teeth’ be revisited by possibly re-adopting an RSPT. Such a policy direction would mainly benefit those mining corporations which have the economies of scale to minimize the tax they pay by fudging their declared profits. This legal but unethical policy can be facilitated by multi-national mining companies entering into collusive trading arrangements with PRC State Owned Enterprises (SOEs).

The above cited scenario would eventuate in a reduction in the number of Australia’s mining trading partners should an RSPT be adopted. Furthermore, relatively smaller mining companies which cannot enter into arrangements with PRC SOEs to minimize their profit declarations will be squeezed out of Australia’s mining sector. Even though the current MRRT has proven to be a dud of a tax, its compliance stipulations have already challenged the viability of relatively smaller mining companies which operate in Australia.

Nevertheless, rentiers in public policy will still attempt to establish a super profits mining tax regime in pursuit of their fantasy that revenue raised can be a funding source for SWFs. The pursuit of this objective would lead to an over-reliance on mining which could eventually result in mining encroaching upon the traditional farm.

The traditional Australian family farm could also be imperilled in the long term by the emergence of corporate agro- businesses taking their place. This type of operation (i.e. the agro-business) would probably more easily make way for mining operations as part of Australia being a rentier state.

Already, Australia’s agriculture and manufacturing sectors have been undermined by the high value of the Australian dollar. The high value of the dollar can be traced back to government over-spending after Kevin Rudd was first elected in 2007. The decision of the first Rudd government to recklessly spend money and borrow between 2008 and 2010 helped drive up the international value of the Australian dollar due to the selling of government bonds to foreign investors to help finance public borrowings.

With regard to the above cited scenario, Australia’s international mining boom was only half (if that) the reason why the Australian dollar was driven up in value. Had the first Rudd government actually further reined in spending instead of indulging in an unprecedented spending splurge between 2008-2010, Australia’s agricultural and manufacturing sectors would have been strengthened in both domestic and international contexts.

As previously mentioned, Australia was practically, but not entirely, insulated from the GFC as a result of the prudential controls which Peter Costello had previously put in place. Australian financial institutions were subsequently adequately capitalized so that there was next to no prospect of Australia falling prey to a GFC generated financial contagion.

Instead of Australia now being ‘home and hosed’ following the outbreak of the 2008 GFC, the first Rudd government’s irresponsible fiscal policies have jeopardized the nation’s economic future. The continuance of the mining boom until recently has insulated Australia from the adverse impacts of high foreign public debt and deficit.

Unfortunately, even though the mining boom has now virtually ended, the second Rudd government seems to have the policy mindset that massive borrowing and spending must continue unabated to stave off an economic downturn and unemployment. However, a contracting revenue base coupled with high levels of public spending financed by still ratchting up the public foreign debt will place downward pressure on the A$ which will eventually lead to unacceptably high levels of inflation similar to the Whitlam era.

Already, as aforementioned, the unsustainably high levels of public spending will lead to pressure to end the wasteful duplication between federal and state programmes. Ensuing ‘rationalization’ (sic) under Kevin Rudd and Anthony Albanese could well take the form of creating a new government bureaucracy derived from a new regional tier of government.

The maintenance of such a new bureaucracy will probably be deprived from international lending which will only compound Australia’s foreign debt. Because Albanese will want to create such a new and powerful bureaucracy, a paradigm will be reinforced that public spending is maintained at exorbitantly high levels which Australia ultimately cannot afford.

That is not to say that government bureaucracy has not historically fulfilled a positive role in the nation’s political economy since the colonial era. Australia however has usually since 1901 had a defusion of administrative power due to there effectively being three tiers of bureaucracy: federal, state and local government.

Naturally, with the passage of time, the federal bureaucracy has become more powerful and pre-eminent. This development is not inherently negative because there have usually been viable and corresponding state public services which have prevented a centralization of power which could be fatal for a nation as geographically large as Australia.

In one way or another, a viable federal-state relations system has ensured that Australia has had a political economy which is a mixed financial economy which is orientated toward the private sector. For the nation therefore to transition to a co-ordinated financial economy funded by overseas public borrowings augurs for a future socio-economic disaster.

If the second Rudd government wants to avert such a future socio-economic disaster which will blacken its historical reputation, it should terminate the move toward “regionalization” (sic). Due to the considerable ‘bounce’ that the ALP has received in the polls from the Rudd reinstatement, Tony Abbott’s political position as opposition leader is temporarily not as entrenched as it has been.

Abbott is therefore moving, if not hedging away from supporting constitutional recognition of local government even though he had fulfilled a vital role in initiating the referendum in the first place. The reason for this shift is because Abbott’s Liberal Party base is pro-state rights. Abbott’s underlying support for “regionalization” (sic) is reflected by his coalition ally, the Nationals’ Senator Barnaby Joyce’s advocacy of a “Yes” vote in the referendum.

Even though Abbott is seemingly moving toward advocating a “No” vote in the referendum, he would know that a strong (and well funded) ALP campaign advocating a “Yes” vote could ensure that this option prevails if the Liberals run a relatively low key campaign.

Why The Genuine National Interest Will Be Protected by Voting “NO”

For there to be a viable chance of the “No” case prevailing in the referendum, Malcolm Turnbull will hopefully assume a prominent role in opposing constitutional local government recognition. Unfortunately Malcolm Turnbull will probably not try and retake the Liberal Party leadership because he is disinclined to do so and because Abbott is so entrenched.

However, most Australians probably prefer Malcolm Turnbull to be their prime minister so that he can fulfil the role as the guardian of the nation’s genuine national interest. Malcolm Turnbull was deviously deposed in 2009 because he supported states’ rights that it is now highly ironic that Abbott is now notionally moving toward supporting the “No” case.

Abbott being Abbott will still try and manoeuvre to ensure that the “Yes” case ultimately prevails regardless of his avowed position. Nevertheless, because coalition MPs have the option to advocate either a “Yes” or a “No” case, Malcolm Turnbull has every right to vigorously and brilliantly prosecute a campaign for the latter option.

By prominently advocating a “No” case, Malcolm Turnbull could probably help win over undecided voters so that the coalition wins the 2013 federal election. Should this occur, Malcolm Turnbull’s capacity to be the guardian of the nation’s genuine national interest in Abbott government would be considerably enhanced.

Furthermore, if the Liberal Party in the wake of Kevin Rudd’s return reinstated Malcolm Turnbull as their leader, then the coalition would definitely win the 2013 federal election. This positive scenario, for reasons which have previously been outlined, is unfortunately improbable. Nevertheless, for the more immediate future, Malcolm Turnbull remaining in public life makes the prospect of an Abbott government more palatable.

The broader question that therefore needs to be answered is whether it will be in Australia’s genuine national interest that the ALP under Kevin Rudd wins the 2013 federal election? The answer to that very important question really lies with the type of regime that a third Rudd government would be. What sort of government Kevin Rudd now leads and may do so into the future is dependent upon insights he may have gained during Julia Gillard’s time as prime minister.

Kevin Rudd, as the first prime minister since Sir Robert Menzies to return to office, will hopefully learnt from misassumptions that he was disabused of from his first stint in prime ministerial office. The major lesson that Sir Robert Menzies learnt was to master the broader context.

Following his 1949 election victory, Sir Robert Menzies was approached by senior Liberals and asked to dismiss a swag of senior pro-ALP public servants in favour of his fellow party men. The new prime minister staunchly refused to do so and said that, so long as the public servants served him professionally, he would not dismiss them.

As noble as Sir Robert Menzies’ support for these senior public servants was, he still implicitly communicated to them that they should reciprocate his support by serving him loyally. There might otherwise have been difficulties between Sir Robert Menzies and senior public servants because their statist outlook did not align with the prime minister’s philosophical disposition.

However, the scope for later conflict between the prime minister and senior public servants had already been single handidly eliminated by Sir Robert Menzies. Within twenty-four hours of his becoming prime minister, he abolished petrol rationing so that the major restraint on the private sector was removed. This freed the way for a strong and expanding middle class to thrive in the post-war era.

With a co-operative public service, Sir Robert Menzies was able to keep would be party *rivals at bay so that with the passage of time the prime minister’s position became unassailable. Most importantly as Australia became more prosperous, many small businessmen, housewives and professionals joined Liberal Party branches because many of them saw the connection between their economic position and Sir Robert Menzies being prime minister. It therefore would have been a very brave Liberal Party MP who would have challenged Sir Robert Menzies’s authority.

(*Many of these would be challengers had previously betrayed him during his first prime ministership).

Times are now very different from that of the Menzies era but the nation is in a cross-roads situation similar to 1949. Prime Minister Rudd can either master the broader situation or again become a political pawn of wider rent-seeking interests. That he was the latter during his first prime ministership in hindsight was not that surprising because the rent-seeking forces that put him in office had a pre-set agenda. Therefore, it was relatively easy for them to set the macro settings even if Kevin Rudd mastered policy minutiae.

Doubtlessly, the second Rudd prime ministership will be different in that coherent management system with regard to cabinet management and executive relations with the public service will be put into place. Probably, on a personal level, Kevin Rudd will be more consultative with cabinet colleagues and more civil in his dealings with public servants.

However, the question well may arise: is Kevin Rudd managing the newly applied management systems or are they managing him so that Anthony Albanese is effectively running the government? Even if the second scenario applies, Kevin Rudd can still be in overall control if he sets the broader policy settings.

An important action which Prime Minister Rudd could take to master the broader policy settings would be to cancel the constitutional referendum on local government recognition. This would be a fatal blow to the rent-seeking forces that brought John Howard down in 2007 in order to fundamentally change the nature of Australia’s political economy.

During his first time as prime minister, Kevin Rudd unwittingly implemented a rent-seeking agenda by squandering billions of dollars on unnecessary stimulus packages, adopting a super-profits tax regime for the mining sector and clawing Goods and Services Taxation (GST) revenue from the states.

Why Australia Will ‘Go Bust’ Unless Public Debt is Reined In

These high levels of borrowing and spending meant that the mining boom contributed to the high value of the Australian dollar thus adversely resulting in the nation’s agricultural and manufacturing sectors (particularly the latter) being adversely affected. As the mining boom ends, Australia will not have a fall back revenue earner due to bad economic management.

The current indications are that Prime Minister Rudd is going to continue on a borrow and spend pattern with regard to the nation’s economic policy direction which Australia cannot afford in the long-term. The prime minister as a Keynesian should realize that Keynes advocated increased spending so long as economic productivity was engineered which could be measured in outcomes such as increased employment.

Beneficial Keynesianism can not be engineered by governments borrowing from overseas now that the mining boom is ending. Should such a high borrowing policy direction continue, then a high interest rates regime will eventually have to be implemented so that Australian Treasury bonds can still be sold. Higher interest rates will dampen domestic demand, drive up unemployment and possibly destroy too many small to medium businesses.

The ill-effects of a high interest rate policy on the private sector combined with the end of the mining boom will ultimately adversely affect the value of the Australian dollar as well as foreign investment levels in Australia which are needed to help maintain a high standard of living. The most important economic priority for the second Rudd government must be to cap government borrowing and to commence re-paying Australia’s public foreign debt.

A reduction in federal spending can be achieved by reduced spending on the Commonwealth public service and ending the practice of borrowing money to finance federal government programmes. Such a policy approach is not tantamount to severe unemployment generating austerity which Prime Minister Rudd alleges that Tony Abbott intends to pursue.

Federal government waste can be eliminated but state governments can continue to provide the necessary service delivery. If there is to be an end of the unnecessary duplication of services and functions between the Commonwealth and the states, let it be the former where the waste is eliminated by ending unnecessary borrowing.

The absolutely wrong policy direction would be to utilize “regionalization” (sic) as a means of creating a new powerful government bureaucracy which will inevitably require more borrowed money to operate. Prime Minister Rudd can therefore undertake very effective preventative maintenance by cancelling the local government referendum and beginning to rein in federal government spending and borrowing.

Prime Minister Kevin Rudd has a moral obligation to henceforth pursue effective economic policies because the impact of his previous policy direction drove up the value of the Australian dollar so that the manufacturing and agricultural sectors were adversely affected.

Senator Kim Carr as the new Minister for Innovation, Industry, Science and Research will undoubtedly attempt to revive the manufacturing sector which is now obviously going into decline. However, high borrow and spend policies will not create a revamped employment-generating manufacturing sector. A viable manufacturing sector will eventually come via public policy encouraging foreign investment.

Because Senator Carr is of the Left faction, he could well support the establishment of a new government bureaucracy that “regionalization” (sic) would usher in. Indeed, a social credit approach to finance a revived manufacturing sector could also be adopted as part of a new statist structure being established as state and federal public services effectively merge over a period of time.

However no amount of government support can foster economic diversity if there is ballooning foreign public debt and deficits combined with sustaining a powerful statist bureaucracy which will not be financially viable in the long term. The second Rudd government can circumvent economic diaster which will otherwise eventually befall Australia by safeguarding the nation’s federal system and by commencement of paying off Australia’s public foreign debt.

The above cited appeals are essentially that Prime Minister Rudd does what Sir Robert Menzies accomplished on his return to office in 1949 – establish favourable macro-policy settings. This can be facilitated by cancelling the proposed referendum and by the prime minister utilizing important ministers such as the Treasurer Chris Bowen and Resources and Energy Minister Gary Gray to prevent Australia’s political economy being transformed into a co-ordinated economy.

As treasurer, Chris Bowen can commence paying back Australia’s public foreign debt and rein in public spending or at least end the cycle of reckless borrowing. As Resources and Energy Minister, Gary Gray can at least protect the mining sector from the threat of a dud super-profits mining tax and encourage continued foreign investment in this sector so that there is a wide range of mining companies which are operational.

An argument might be made that the nation will benefit by Tony Abbott winning the next federal election because he has pledged to commence paying off Australia’s public foreign debt and federal budget and to also abolish the MRRT. The Liberal Party’s official policy document “Real Solutions” promisingly commits to supporting a diverse five pillar economy which encompasses the manufacturing, agriculture, services, education and mining sectors.

However, as detailed in previous Social Action Australia articles, the Liberal Party under Abbott’s leadership has deviously set the framework for a rentier state. Abbott’s success in re-orientating the nation’s political economy has been such that the worthiness or otherwise of the Rudd and Gillard governments has often been assessed in terms of effectiveness in which they implemented or resisted rent-seeking policies initially facilitated by Abbott.

Why Malcolm Turnbull Must Step Up

Tony Abbott therefore cannot be trusted to become prime minister because, as opposition leader, he has utilized his political skills to potentially change the nation’s political economy. The prospect of an Abbott government would be less terrifying if the constitutional proposal to recognise local government is defeated and if Malcolm Turnbull as a senior minister protects the nation’s genuine national interest.

The scope for Malcolm Turnbull to protect the nation’s interests as a senior cabinet minister would be difficult due to Abbott’s political skills. The best scenario under the circumstances would be for Kevin Rudd to win the federal election so that Malcolm Turnbull can later fight for Australia’s genuine national interest as opposition leader between 2013 and 2016. Should an elected Rudd/Albanese government prove to be wanting, then hopefully Malcolm Turnbull will win the subsequent 2016 federal election.

The above scenario is far from inspiring but, under the circumstances, it is the best that the nation can hope for. Should Kevin Rudd win the 2013 federal election, he could be an effective prime minister by consolidating the previous achievements of Julia Gillard which she accomplished between 2007 and 2013 in industrial relations, education and disability care.

These achievements show that Julia Gillard was a practical visionary who was ultimately a successful prime minister. She also had the courage to want to stay on as prime minister to face the electoral verdict of the Australian people.

Australia is relatively fortunate that Malcolm Turnbull has continued on in public life. The question that has to be answered with regard to Malcolm Turnbull is whether he will demonstrate his leadership capacity and courage by vigorously supporting a “No” case in the referendum on the recognition of local government in the constitution.

Many, if not most Australians, look to Malcolm Turnbull more than Kevin Rudd to safeguard their interests. It may be beyond Malcolm Turnbull to “do a Rudd” and return as Liberal leader in 2013. However, with the unfortunate exodus of moderates from the ALP at least Malcolm Turnbull can stay in the arena to fight for the nation’s genuine national interest.

Dr. David Paul Bennett is the Director of Social Action Australia Pty Ltd.