Budget blows out by billions
The Federal government paints a grim picture of the nation's finances just days out from an expected election announcement.PT2M52S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-2r4r1 620 349 August 2, 2013
When Kevin Rudd calls the election for a September 7 ballot in the next day or two, he will appeal to the country as the leader offering a positive vision for the future. He will portray Tony Abbott as nothing more than a negative guy running down the country and all its achievements.
His wife, Therese Rein, and daughter, Jessica, will join the campaign, reminding Australians of why their country is the best on the planet. There's plenty of objective evidence to support their argument. Australia enjoys the best living conditions of any of the rich countries on earth, according to the OECD's Better Lives index.
Even with other leaders who are very divisive there are always a group in the electorate who like them. But not with Abbott.
But Tony Abbott will present the contest through an entirely different lens. He will paint Rudd as a failed leader offering false solutions. Rudd is a fake. Only an Abbott Coalition government can provide real solutions. Most of those involve cancelling Labor and all its deeds.
Illustration: Rocco Fazzari
Sure, Australia is a great place, but none of that has anything to do with the six dismal years of Labor, he'll argue. It's in spite of Labor. Australia is the best country on earth, and Labor is putting it in jeopardy, Abbott contends. A great country deserves better than Labor. And there's plenty of objective evidence to support this argument too. Nobody would argue that Labor is world's best-practice as a political organisation or as a model of good government.
The news is jammed with the ICAC's findings of corruption against two former NSW Labor ministers, Eddie Obeid and Ian Macdonald, in the engine room of Labor power in our time, the NSW branch.
And, as Fairfax disclosed on Friday, there are continuing ICAC investigations into three more former NSW Labor ministers, Joe Tripodi, Michael Costa and Tony Kelly.
And federally, Abbott is quite right when he asserts that the unions and their factional extensions have treated the prime ministership of the country as their "plaything".
So it's negative versus positive according to Rudd. It's real versus fake according to Abbott.
The two political parties have carefully researched and developed these constructs in endless focus groups as the most electorally plausible ways for each to present his rival. You will be thoroughly sick of both stereotypes in five weeks.
Underlying these duelling portrayals are appeals to big emotional drivers. The Rudd campaign will seek to engage the people's hope. The Abbott campaign will seek to appeal to public anger.
Can gentle hope compete with the adrenalin of anger? Anger is the original political emotion. As the German philosopher Peter Sloterdijk points out: ''At the beginning of the first sentence of the European tradition, in the first verse of The Iliad, the word 'rage' occurs.''
Homer was writing of the rage of the warrior hero Achilles. In the past decade and more, the world has been stunned at the rage of Islamic extremists. And taken aback at the feverish anger that fed the American Tea Party movement in the Barack Obama's first term.
And, of course, Americans had a few things to be angry about. The US economy was in a shocking state, with unemployment at 9.6 per cent when Obama ran for re-election.
The median house price was down by $41,000 over three years and millions of home-owners found themselves owing more mortgage than their homes were worth.
But no matter how dire the economy, no matter how disappointing Obama's first term, no matter how much anger the Fox News rage-mongers mustered, Obama won re-election regardless. It's no coincidence that Labor has shipped three of Obama's campaign advisers into Australia for the campaign.
How was Obama able to defeat surging anger amid economic ruin? The independent US analyst Charlie Cook, publisher of the Cook Political Report, explained:
"It's so important in politics to define your candidate before the other side does. It's not a likeability contest, but an election is two questions. If it's just a referendum on Barack Obama, he'd likely lose. But the second question is, 'Do you feel comfortable with the alternative?' It's incredibly important.''
This concept will be central to Rudd's campaign. He cannot risk a referendum on the Labor government because there is just too much accumulated failure, disarray and disappointment.
Rehearsing a campaign pitch, Abbott said on Friday: "From Labor you've had an absolute cavalcade of division and dysfunction. We've had, in a little over three years, we've had six small business ministers, five assistant treasurers, four immigration ministers and we've had two changes of prime minister and all of the things that Mr Rudd has pretended to do since returning to the prime ministership prove that everything that the Coalition has been saying about this government is true.
"They've got it wrong over boats. They've got it wrong over internal party management. They've got it wrong on economic management. They've got it wrong when it comes to cost of living and the damage that the carbon tax is doing to job security and family budgets. This is a government which has got it wrong at every turn on their own admission so why on earth would anyone reward them with three more years like the last six?"
His critique is powerful because it is almost all accurate. The one assertion that is not is his claim that "they've got it wrong on economic management." Labor has certainly got its budget forecasts wrong, its revenue forecasts ridiculously so. Friday's economic statement revealed that the government's projected revenue for this financial year had suffered a $33 billion shortfall from a forecast issued just 10 weeks ago. This is a record-fast unravelling.
Without any offsetting savings, this would have pushed a projected deficit of $18 billion for the year out to $51 billion. Even with some savings, the projected deficit is now forecast to be $34 billion. And this was the year in which Wayne Swan had earlier told us the budget would be in surplus.
The cause of the error was a foolish optimism by the Treasury's forecasters. In government, this would be just as big a problem for the Coalition, of course. But the Coalition is not in government and Labor must accept the blame and the consequences.
But the overall management of the economy has been high quality, as the chief economist for the big US bank Citi, William Butler, observed while visiting Sydney this week. The response from policymakers in Australia had been "surprisingly" good, he said, and that the country's economic problems were "luxury" compared to the rest of the world.
But otherwise Abbott's critique is devastatingly accurate. This is the referendum he would like Australia's electorate to pronounce on - an up-or-down vote on Labor's "division and dysfunction".
That's why Rudd cannot afford to allow it to become one. Rudd must do as Obama did. He will try to force the election into a question of whether Australia is "comfortable with the alternative". Because he knows it is not.
We know from the quantitative polling that, on the popularity league table, Tony Abbott ranks No.16 of the 19 opposition leaders of the past 40 years in data captured by the Fairfax Nielsen poll.
And the qualitative polling - otherwise known as focus groups - is just as bad or even worse for Abbott. After convening scores of focus groups containing hundreds of people over the last three years, Rebecca Huntley of Ipsos Research says she has come across only one purely positive voter appraisal of Abbott.
Generally the positive comments about Abbott are qualified or backhanded, she says, like "I thought he would lose it, but he hasn't." This is rare, says Huntley, "even with other leaders who are very divisive, like Pauline Hanson or Paul Keating or Joh Bjelke-Petersen, there are always a group in the electorate who like them. But not with Abbott."
So sure, Rudd will offer a positive agenda and hope for the future. He'll talk a lot about jobs, schools, health, DisabilityCare, a better Australia, all liberally interspersed with the phrase "for the future".
But, at the core, Labor's campaign will centre on turning the election from a referendum on the government to a referendum on the person of Tony Abbott.
On Friday we saw each party frantically trying to clear its decks for the campaign that will begin this coming week.
Labor's disastrous disappearing tax revenues would have been disclosed by the Treasury 10 days into the campaign in any case, so it tried to "inoculate" itself by publishing the data and some partial offsets.
And the Coalition suddenly dropped months of objections to the Better Schools program pioneered by Julia Gillard. Abbott declared a "unity ticket" with Rudd on the funding for the program, instead turning to the issue of education quality as the point of differentiation.
The Coalition has not yet, however, explained how it will find the billions to fund its new position on schools funding. This is an oversight that the government will highlight this weekend.
The government will move from the defensive to the offensive on the budget when it publishes its estimate of the Coalition's "black hole" of budget costings over the weekend.
That will lead Rudd into then calling the election. The parties go into the campaign in a tight contest. The 17 polls published since Rudd took the leadership all have the parties at 50:50 on the two-party share of the vote, or within the margin of error of 50:50.
The Labor votes are not distributed in the seats it needs to win, however. The Liberals are ahead on the seat count. Abbott goes into the campaign with the election his to lose. Election campaigns are always important, but in such a close contest this one will be crucial.