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Double dissolution should be considered to break political impasse

Time is running away with the government's chance to do something about our rising debt.

Let's face it, economic management has been in a mess since John Howard lost office in 2007. I doubt any of us will see a surplus budget in the next 10 or 20 years. Debt is going higher and higher. We are 18 months to the next election.

Time is running away with the government's chance to do something about our rising debt. And, in addition to the consequences of Labor's spending sprees, we also face the threat of an external event. In the words of the Reserve Bank governor, we need a surplus for a "rainy day". No one knows what that rainy day might bring. It might be triggered by the huge volumes of money being printed in the US and Europe; it might be sparked by the new socialist left government in Greece. It might be that instead we are already facing a decade or more of slowly losing jobs and living standards at the expense of the relatively poor destined to bear the brunt of the downturn.

Tony Abbott's government needs a clearer economic strategy.
Tony Abbott's government needs a clearer economic strategy.  Photo: Andrew Meares

Whatever the future might be, we know we could start today to insure ourselves from external shocks and to significantly improve our prospects by our own ingenuity. The problem is not a lack of knowing what needs to be done – most of what needs to be done is well known. The problem is politics, but not the political system. Our political system is good enough for what needs to be done. It cannot be said  it is broken when the key instrument to break the political impasse on fiscal repair has not even been tried or even threatened. The government has been unreasonably stymied in the Senate, and the founding fathers who drafted our constitution made provision for exactly this sort of unreasonable behaviour. The double dissolution procedure should be considered again.

The background for a double dissolution is that: first, the Coalition's prospect of winning the next election has dimmed. Prime Minister Tony Abbott has not helped the situation, but his biggest problem has been the Senate. The Coalition needs a clearer strategy.  Second, Labor in office will merely, at best, watch debt accelerate and living standards fall further with higher unemployment. Third, if the Coalition wins the next election, but is again stymied by the Senate, then, in practice, it could not be that much better than Labor. Fourth,   the public has enjoyed such a good run for so long that only an economic downturn might bring them to support necessary reform, but only if a plan is well sold.   Fifth, the key to higher living standards is productivity and part of that must be to reform the labour market so that the talents of our people can be activated to revitalise our economy. Labour market reform can only come from the Coalition, because Labor is unable to break away from its union sponsors.

As leader of the Liberal Party in 1991, John Hewson introduced a radical economic policy package dubbed Fightback.
As leader of the Liberal Party in 1991, John Hewson introduced a radical economic policy package dubbed Fightback. Photo: Alex Ellinghausen

To reset the Coalition, it needs to be bolder and more upfront about our problems, to understand that time is against it, to be prepared to risk political careers at the ballot box, to give the voters clearly different policies and to announce them before the end of this year; not just before the 2016 election.  In other words, the Coalition needs to go back to the drawing board and draft a serious fiscal repair plan within a broader reform package. 

My reasoning for the double dissolution is that in the event that the Coalition wins the next election, with some fiscal measures in its manifesto, Labor will still stymie the Coalition in the Senate. Labor will say it has the numbers in the Senate and the government's mandate is no better than its. A very limited fiscal repair plan might also look not much different to Labor's approach. It would at best delay the inevitable switch back to Labor as a result of voters deciding that the Coalition had not done enough.

If stymied again in a second term, a double dissolution would be the only course available to the Coalition. But to really address the economic issues, it would need to be a fight over a big package. It would be Fightback all over again. A double dissolution election might mean more minor parties, unless the major parties agree to electoral reform. It might also be that the government wins a double dissolution but still, due to a close vote, not get its agenda through the Parliament.

So, yes, there are lots of risks. But its hard to see how else Australia can address its problems. It might even be time for a double dissolution in this first term. The Coalition finally won the Australian public's support for big reforms in 1996 after first losing the Fightback election in 1993. It proved that the public will support what needs to be done. The Coalition needs to do so again, preferably without losing government in the meantime.

Peter Reith is a Fairfax columnist and a former Howard government minister.

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