Saturday, June 26, 2010

The Leadership and the Economy

The week's events show that a political life in Australia can be nasty, brutish and short. Rudd was an amazing success as opposition leader and his early days were heightened by his govt's early response to the global financial crisis. There is no doubt, despite the views of stimulus non-believers like Griffith Uni's Tony Makin, that fiscal stimulus had a positive impact on Australian growth during the dark days of 2008-09. Rudd will be remembered, alongside Treasurer Swan and Treasury Secretary Henry as sound policy-makers who had a positive impact on Australia's economic situation during the GFC.

But Rudd and co. made mistakes. In their haste to get the stimulus out there they failed to properly supervise aspects of govt spending.  Rudd also failed to properly consult. He needed to take a lesson from the master of consensus Bob Hawke. I think this failure stems from Rudd's view that he was the smartest boy in the room and that 'post-hoc' consultation or the 'appearance' of consultation is good enough.

While this might fly in the public service (or in universities) it doesn't work when those who you fail to consult have made a truck load of cash in recent years and want the money to continue to be unaffected by higher taxes. Never get in the way of a miner and a pile of profits.

The Gillard govt will now need to get the mining tax right - there is no doubt that Australians should receive more from their non-renewable resources - but the effort to sell changes and to build a coalition to support them must be improved. Gillard could do worse than consult Hawke (or at least closely investigate) how this could be done.

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