The Rudd Government has a lot going for it as it clocks up its first 12 months in office today. No minister has had to be sacked for misconduct, unlike the Howard Government’s first 12 months. There is no hint the prime minister will be destabilised by the relentless ambition of a less talented politician, unlike Paul Keating’s behaviour in the Hawke Government.
Kevin Rudd is benefiting politically from the chance to come across as a decisive leader during the crisis in global financial markets. John Howard had to wait until his second term to show his credentials as a strong leader during the 1999 East Timor crisis, the September 11, 2001 terrorist atrocities and the phoney “children overboard” drama. Not surprisingly, Rudd likens the global financial crisis to a series of “rolling national security crises”.
Rudd and his Treasurer, Wayne Swan, have got some of the crucial decisions right when tackling the financial crisis — unlike Paul Keating before the savage recession in early 1990s. Bob Hawke made some good decisions while PM to improve the long-term efficiency of the Australian economy. But Keating made dreadful mistakes as an economic manager. Keating was far too slow to react to wild boom of the late 1980s, and then far too slow to ease the brakes once he had finally applied them. As a result, unemployment rose to almost 11 percent.
Rudd and Swan will deserve to be pilloried if they allow unemployment and business bankruptcies to reach anything like the peak under Keating. To their credit, both realise that pre-emptive action is required to prevent the Australian economy siding into recession, or stop any recession being unduly savage. The overall thrust of the $10.4 billion stimulus package, due to start rolling out in December, is commendable.
Although last week’s announcement of $300 million for “ready to roll” local government projects is conceptually fine, it far too small to make much impact. It should be expanded immediately. The decision to spend on big infrastructure projects to improve productivity is also fine, although it will not provide a short-term stimulus when it is most needed.
The Reserve Bank has redeemed itself with big interest rate cuts, after lifting them too high earlier in the year. But the government’s decision to give a three-year grantee to all deposits in banks, credit unions and buildings societies has opened up a damaging gap with other financial products on the market. Any guarantee should have been limited to $20,000, or $100,000 at most, and incurred a fee.
Rudd works ridiculous hours, and expects ministers and staff to do the same. The pace is so exhausting that it will lead to serious errors of judgement before long. With few exceptions, however, Rudd is blessed with competent ministers. As Hawke noted last week, he should let them get on with their jobs without hovering over their shoulders. The Foreign Minister, Stephen Smith, is clearly one who should be given more breathing space. Despite Rudd’s diplomatic experience, his own performance in Smith’s area has been ragged.
Without preparing the ground, Rudd advocated that Asia become more like the European Union. There is little appetite for the proposal in Asia, but last week he vowed to plough ahead. Rudd established an commission to push for complete nuclear disarmament, yet has given tacit support to the deployment of US missile systems that China and Russia regard as so threatening they will never give up their nuclear missiles.
Rudd has refused to deny that he, or his office, leaked what was allegedly said during a confidential phone conversation with George Bush. Rudd took the pre-arranged call while having late night drinks with the editor-in-chief of The Australian, which later ran an embarrassing version of the conversation.
There are signs that the Government is struggling to deliver its promised education “revolution”. It doesn’t help that Julia Gillard has two demanding portfolios, Education and Workplace Relations, and no experience as a shadow minister for education. If she had a deeper grip of the subject, it is unlikely she would have been captivated by the New York school system, despite its performance in international tests being well below Australia’s.
Rudd has described climate change as the greatest moral, economic and environmental issue facing the nation, but has been slow to make it easier to tackle the problem instead of putting all the weight on the price of pollution permits under his emissions trading scheme. He has done almost nothing to make energy usage more efficient. Spending on low emissions technologies has been deferred, while opportunities to sequester carbon in soil have been virtually ignored.
Despite his big lead in the opinion polls, Rudd is reluctant to distance himself from the national security excesses of the Howard era. For 12 months, he has maintained his confidence in the federal police commissioner, Mick Keelty, despite the gravity of the decision to charge Mohammed Haneef without a scrap of evidence.
Rudd won't even repeal Howard's revived sedition laws which provide a seven year gaol sentence for criticising the government. The Coalition leader, Malcolm Turnbull, wants the laws scrapped. Rudd should oblige in the next 12 months by breaking free of this repressive aspect of Howard’s legacy.