For most of his political career, Prime Minister Kevin Rudd has been mocked by opponents as the arch-bureaucrat and policy wonk: a politician who much prefers manipulating whiteboards behind the scenes to swaying public opinion with the force and logic of his rhetoric on the floor of Parliament House or out on the campaign trail. The Prime Minister has never taken umbrage at such accusations, and why would he?
It was Rudd's preparedness to acquaint himself with the murky details of the Howard government's knowledge of, and involvement in, the payment of kickbacks by the Australian Wheat Board to the regime of Saddam Hussein that catapulted the then opposition foreign affairs spokesman to national prominence and, eventually, to the leadership of the federal Labor Party in December 2006. And it was Rudd's determination to portray himself to the electorate as a fiscal conservative, a man very similar in fact to the cautious, prudent and circumspect (but increasingly out of touch) John Howard, that probably won him the 2007 federal election.
In the first few months in office, Rudd showed occasional flashes of the kind of leadership that voters have come to expect from Labor prime ministers such as the ratification of the Kyoto protocol and the apology to the Stolen Generations. But for the most part his term has been marked by an excessive display of policy and administrative caution. By his unwillingness to deviate even slightly from the list of promises laid down in the 2007 election campaign, Rudd has, ironically, shown himself to be a far more cautious, even reactionary, prime minister than ever John Howard was.
However, in introducing a spending package worth $10.4billion this week in an effort to shield the Australian economy from the likelihood of a global recession, Rudd has shown uncharacteristic nerve, willingness to act quickly and decisively, and a leadership few others have matched. Together with a probable further cut in official interest rates next month, Rudd believes the package will deliver economic security for Australia in the short-term though, of course, no one really knows how the global crisis will unfold.
It's that very uncertainty, together with some pessimistic Treasury forecasts on jobs and growth that have not yet been made public, that prompted the Government to act. In his televised address , Rudd emphasised the need for decisive action and, though this logic was applauded by commentators, the scale of the intervention it will soak up half the budget surplus has also raised eyebrows. The initiative is expected to inject $9.65 billion into the economy by the end of the year, which is just the quick turnaround the Government wants, though whether it is enough to stave off a contraction in the economy in 2009 remains to be seen. Inevitably, however, questions are being asked about the wisdom of one-off payments to first-home buyers and welfare recipients when the surplus might have been better directed toward more permanent and productive investments.
In its defence, the Government has said one-off, time-limited payments to low-income recipients offer the quickest mean of stimulating demand and, hence, growth. Perhaps, but once the money has been spent, what then? Demand will revert to present levels, the surplus will be half what it is now, and the Government will have far fewer options if it has to respond to other possible economic emergencies. The size of the budget surplus, some $20billion-plus, combined with a relatively robust financial sector, gave Rudd and Treasurer Wayne Swan considerable room to move in the timing and framing of the Government's response to the crisis.
That they should have made Tuesday's package top heavy with unproductive payments (or wealth transfers) to the welfare sector has reduced their options for future responses. The fact that the principal beneficiaries of the package (pensioners and carers) are groups long considered to have been unfairly treated has strengthened suspicions that it was framed as much for political gain as it was to enable the continued health of the economy. This is puzzling given that a federal election is still more than two years away but then the Government has been under pressure to increase pensions; demands it has resisted pending the outcome of the review into the tax system.
For all his claims to responsible economic management, John Howard was a serial abuser of budget surpluses for political gain. Indeed, pensioners were some of the biggest beneficiaries of the Coalition's final budget in 2007, and further electoral bribes were extended in the later election campaign. The present crisis, and the Government's pre-emptive response, might be the political making of Rudd just as Howard's determination to enact gun control laws after the Port Arthur massacre defined his early leadership. However, the populist, Howardian flavour of Labor's package suggests Rudd is still yet to find an authentic voice of his own.
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