Aditya Chakrabortty The Guardian, Tuesday 10 September 2013
Australia's economy is an enviable state, yet Abbott pummelled the Labor party to its heaviest defeat in a century. How?
Controversial Australian prime minister Tony Abbott: he has never been especially popular. Photograph: Paul Miller/EPA
Has anyone come up with a word for "completely dismaying yet utterly unsurprising"? Because we need one to sum up what happened in Australia this weekend.
On Saturday, Tony Abbott was elected Australia's new prime minister. What's he like? In a private memo from 2007 published by WikiLeaks, the then-US ambassador to Australia described him as "a polarising rightwinger" with a "propensity for insensitivity and controversy". Climate change, in his book, is "complete crap". This is the man David Cameron welcomed to the fold with the tweet: "It'll be great working with another centre-right leader."
Then there's Abbott's woman problem. He has wondered aloud: "What if men are, by physiology or temperament, more adapted to exercise authority or to issue command?" That was back in 1998; during this campaign, he praised a female candidate for her "sex appeal". After the inevitable barrage of complaints, he backtracked, or tried, by describing his colleague as "not just a pretty face".
Abbott is a Catholic; going by these comments, you might surmise that his patron saint is David of Brent. Unsurprisingly, he has never been especially popular – even among his own Liberal party, which awarded him the leadership by a wafer-thin majority. His approval ratings are regularly dismal and one pollster dismissed him as "unelectable". So how did Abbott pummel the Australian Labor party to its heaviest defeat in a century? It's a sad story, and one that holds lessons for leftwingers around the world.
From Gordon Brown to José Zapatero, the global financial crisis has claimed many social-democratic leaders. But the striking thing about the economic record presented by Labor's Kevin Rudd at the polls is how strong it is. Australia is now enjoying its 22nd consecutive year of growth: during the Great Recession, the country managed to avoid any recession at all. How? By warding off a global downturn with what Nobel prize-winning economist Joseph Stiglitz described as "probably the best-designed stimulus package of any … advanced industrial country, both in size and in design, and how it was spent".
Using the war cry of "go early, go hard and go households", Rudd chucked a total of A$52bn (£30bn) into the housing market, into refurbishing schools and rolling out broadband and other public works. He even doled out money, in the spring of 2009 giving the typical single worker A$900. From the IMF to the OECD, the major international institutions all lined up to clap.
The result is an economy in enviable nick, especially compared with other rich economies. Last week's GDP report showed Australia's national income rising at 2.6% a year – the kind of growth rate George Osborne would love to fight an election on. Unemployment has been remarkably quiescent and take-home pay for the average worker is rising. Sure, there are niggles – the country's mining boom seems to be drawing to a close, and the housing bubble remains a worry. But think about the wreckage the banking crash left elsewhere in the world and you can see why they call Australia the lucky country.
So, having pulled off such a feat, what did Labor do? Rather than crow about such smart state intervention, it practically disowned its triumph. Rudd – who once described himself as "basically a conservative when it comes to … public financial management" – and his Treasury team were soon promising to get the government budget back in surplus. This was "braindead economics", according to Steve Keen, economist at the University of Western Sydney. Even after its stimulus spending, Australia last year had among the lowest debt-to-GDP ratios in the entire developed world.
But it was also braindead politics, playing right into the hands of Abbott's scaremongering over the public finances. What Labor were effectively telling voters was: judge us not on our successes, but on the benchmarks set by our opponents. If that sounds perverse, that's because it is. But, really, it's in line with what social democratic parties around the world have done in the wake of the crisis.
Consider: Gordon Brown and Alistair Darling help pull Britain out of an economic nosedive; then draw up a law to force themselves to halve the budget deficit. Barack Obama saves Wall Street but barely lays a glove on the bankers. François Hollande takes charge and does pretty much the same budgetary botch as Sarkozy was planning. When Lehman Brothers fell over five years ago this month, there was much fanciful talk about how this was a "progressive moment". Brown indulged in such rhetoric, and so did Rudd, penning 7,000-word essays on the evils of neo-liberalism. But there was no recasting of economic models, or even a serious debate about how things ought to change. The best social-democrats managed was to save capitalism for the capitalists. And now that the five-year panic is giving way to another phase, the social democrats are being shown the door.
That story holds for Rudd and his managerial Keynesianism. What filled the vacuum left where a political philosophy ought to be was bitter rivalry with Julia Gillard (and you know how that worked out), flip-flopping over carbon pricing and a race to the bottom on immigration policies. The result was last weekend's wipeout.
So what is the synonym for acute disappointment and predictable defeat? My knowledge of compound German nouns being a bit rusty, let me suggest this: contemporary social democracy.
