The Australian Election: A Hollow Victory?

Crosspost from:

The Progressive Economics Forum

Although my knowledge of Australia’s politics is limited, they always interest me. Not only is the country similar to Canada in many ways, but it also had among the most successful labour movements and Labor Parties in the English-speaking world. (The party changed its name from “Labour” to “Labor” in 1912, when it seemed that Australia would adopt American spelling.)

Things went off the rails in the 1980s and early 1990s, when the Labor governments of Bob Hawke and Paul Keating introduced massive privatization and deregulation. Since then, John Howard’s Liberal government has combined free-market economics with conservative social policy. (Howard’s son and I both survived the notorious 2001 World Universities Debating Championships.)

While today’s Labor victory is welcome news, there are serious questions about how progressive the new government will be. Yesterday’s Globe and Mail included the following commentary from the right-wing Hudson Institute:

. . . most political signs point to a victory for Labor Leader Kevin Rudd, a Mandarin-speaking former diplomat and a pro-American moderate in the mould of Tony Blair. He and his party have enjoyed a lead of about 10 per cent in the polls for most of 2007.

If Mr. Rudd is victorious, however, it will be a victory for continuity almost as much as for change. Australia’s consistent course of economic deregulation and free trade actually began two decades ago under Paul Keating’s Labor government.

. . .

There was already little to separate Mr. Howard from Mr. Rudd on economic policy. And Labor’s pledge to reduce Australia’s military presence in Iraq is so gradual it sounds like a pledge to remain.

Jim has made similar points regarding Labor’s stand on so-called “free trade” agreements.

Rudd’s statements today have been full of bumf about putting aside “old conflicts” and governing for all Australians. I suppose that those are the sorts of things people say after being elected, but they do not inspire much confidence.

I note that Rudd’s economic platform includes tax cuts. Although he considers himself fiscally conservative, his election pledge is only to “keep the Budget in surplus on average over the economic cycle.” This commitment allows the government far more flexibility than the Canadian expectation of no deficits, ever, under any circumstances. Indeed, one could pursue a strongly counter-cyclical fiscal policy and still end up with a surplus on average.

Prior to the election, Howard had tried to significantly rollback collective bargaining through WorkChoices. Rudd has promised to undo most of this program, but not to restore Australia’s former system of centralized industrial awards. He will also sign the Kyoto Protocol.

Rudd is undoubtedly better (or less bad) than Howard, but seems unlikely to implement much of a social democratic agenda. I welcome comments from people who know more about Australian politics.