Thursday, 30 August 2012


Address to the Africa Down Under Conference
30 August 2012
The core question confronting treasuries and finance ministries around the world at present is what is the near, medium and long term prospects for the Chinese economy.

This has profound implications for Australia.

It has profound implications for Africa and for Asia.

And in the midst of a continuing global financial and economic crisis, it has profound implications for the world.

The problem we all face, including those of us who have studied China closely for most of our professional lives, is that making robust predictions about the Chinese economy is difficult at the best of times.

When we add to that the complexity arising from this year being a year of significant political change in the Chinese leadership – by convention now a once every decade event.

And on top of that, the further complexity arising from the recognition by the Chinese themselves in the most recent five year plan (the 12th five year plan released in 2010) that the Chinese growth model must change.

For these reasons the release yesterday of the joint publication by the Australian Strategic Policy Institute and South Africa’s Brenthurst Foundation entitled “Fuelling the Dragon” is a timely and substantive contribution to a critical global debate.

And in my remarks today I intend to draw extensively from this paper before offering some tentative conclusions of my own.

China’s economic development so far

We are all familiar with China’s economic record so far.

In the decades since China undertook fundamental market reforms in its economy, it has transformed itself from being a backward economy closed off from the rest of the world to an increasingly open economy, fully integrated with the global economy and now the world’s second largest after the United States.

By any historical measure, this has been an extraordinary achievement.

China is not only the world’s second largest economy, but is on track to become the world’s largest economy either in this decade or the next.

China is now the third largest economy in terms of international trade.

China’s per capita income in PPP terms has now risen to $7,640 US.

As of 2010 in Shanghai double that at $13,000 US.

Between 2005 and 2010, as the paper notes “China accounted for over 80% of the increase in global demand for nearly all metal and energy products”
Furthermore quoting professor Garnaut, the paper notes:

“In the absence in prodigious growth in Chinese demand for most energy and metallic mineral commodities, reasonable growth in the developing world beyond China would have merely offset the weakness in growth in developed countries and prices would have languished below trend”.

Significance for Australia

The paper also draws our attention to the fact that Australia’s terms of trade have not been as high for more than a century – 65 per cent above the 20th century average level and 85 per cent above the 20th century trend level.

Quoting Findlay, the paper states that Australian GDP in nominal terms is about 13 per cent higher than it would have been without these relative price changes.

Resources currently make up 57 per cent of exports, rising from 41 per cent in 2005.

And this in turn has been driven by iron ore and metallurgical coal – a 500 per cent increase in iron ore export volume since 2005 as well as significant recent growth in coal exports.

Of course this is not the total picture of the Australia-China resources trade, but it is a significant part of it.

And that part of it is primarily driven by the demands of China’s steel industry.

The Importance of China’s Steel Industry

In an important part of the paper, we are told that China’s steel production over the last decade was used in the following ways:
·         Construction (50-60 percent);
·         Machinery (12-18 per cent);
·         Automobiles (5-6 per cent); and
·         Home appliances (2 per cent);

China’s own efforts to meet its prodigious domestic demands have been hampered by the low quality of its iron ore resources and by their geographical separation from the principal production centres in eastern China.

Geographical separation has also been a factor for the Chinese domestic coal industry.

In both cases, Chinese for much of the last decade have reached the rational conclusion that it is in their overall economic interests to meet this demand through large-scale imports – initially from Australia but also increasingly from Latin America and Africa.

Australians need to remind themselves that they are not the only potential significant sources of supply to the Chinese market, although we are significantly advantaged by geographical proximity relative to both Latin America and Africa.

But the core question for both the Australian and global resources energy sectors is how sustainable is China’s medium to long-term demand for steel in the context of its own future economic development profile.

China’s Economic Development Model

According to the ASPI-Brendthurst paper, and quoting the recent work by Song from Peking University, China has now entered “the mid-phase of industrialisation which is more energy and minerals intensive than the more labour intensive early phase”.

The paper then outlines two conflicting analyses of where China’s resource consumption will go to in the future.

One possibility, based on the trajectory that we have seen in Japanese economic history in recent decades, concludes that China will not reach peak steel consumption per capita until 2024: in quantitative terms china’s current steel output is 600 million tones and that by 2024 it will surpass 1 billion tones.

The paper then offers a contrasting position by Professor Garnaut who argues that while absolute energy consumption will continue to increase, climate change and other considerations will cause the rate of growth in energy consumption to diminish and (consistent with Chinese policy directions) reduce the emissions intensity of Chinese production.

Specifically, Garnaut is quoted as stating “resource intensity of production will decline rather more rapidly than seems to be the expectation, and more rapidly still as growth and the investment share of output fall from about 2015”.

In a further analytical contribution to this debate, the paper also draws on historical patterns of resource usage in other global economies based on their respective historical experiences.

The paper observes that “historical patterns suggest that consumption of metals typically grows with income until income reaches about $15,000 - 20,000 US per capita in PPP adjusted dollars”

Based on that logic, and based on the per capita income figures I referred to earlier, this would place China at the mid-phase of its industrialisation process.

The key question then is that if this is the mid-phase, then what does the final phase look like in terms of absolute demand for resources and energy and its relative growth over the next decade.

This is where the degree of complexity in the analysis becomes acute.

Many factors are encouraging including the analysis of the massive projected increase in the size of China’s middle class, rising to 1.1 billion by 2030.

Leaving aside major problems such as traffic management and environmental pollution, China’s automobile penetration ratio is only five per cent of that of the United States.

The paper concludes that China is projected to have nearly 20 times as many motor vehicles in 2030 as it had in 2002 which is a comparable level of vehicle ownership to that of Japan in the early 1970s.

With the paper further noting that “China’s automotive manufacturing sector is the largest in the world and accounts for approximately 7% of GDP and rising.”

Nonetheless the steel componentry in car manufacturing is likely to halve.

A further positive factor in terms of Chinese overall resource demand is the processes of Chinese urbanisation.

For the first time in Chinese history, in 2011, more people lived in Chinese cities than in the countryside.

Although the paper predicts the high rate of urbanisation will now diminish, the infrastructure demands from China’s megacities and so called second-tier cities (that is the 100 plus cities that now have populations in excess of 5 million) will continue to generate significant demand for energy and resources.

Although the paper also wisely cautions us that one of the strengths and weaknesses of China’s national planning system, combined with its traditional approach to infrastructure-intensive stimulus in times of global and national economic downturn, is that there has been excessive anticipatory investment in the Chinese infrastructure sector, thereby potentially reducing future investment demand.

Nonetheless in a recent survey by Paul Braddick, the following anecdotals continue to blow our minds away as he describes the urbanisation-related drivers of Chinese resource demand through until 2025;

·         350 million more people to move to the cities,
·         221 Chinese cities of greater than a million people (compared with the 35 in all of Europe today),
·         A million kilometres of new roads,
·         28,000 kilometres of new metro-rail,
·         170 mass transit systems (twice the number in all of Europe),
·         1.6 - 1.9 billion square metres of new floor space as part of 5 million new buildings,
·         50,000 new skyscrapers (the equivalent of 2 Chicagos per year),
·         97 new airports,
·         And, the fuel the above, 1000 megawatts of additional coal fired generating capacity to be commissioned every week.
·         Combined with the new wind power turbine being built every hour and a half.

As I said, this is enough to still take everyone’s breath away.

Nonetheless the key question remains as to what the relative degree of what Chinese growth is likely to be into the medium to long term future.

All this leaves us however with a core question unanswered (that is whether we will see a relative decline in the relative Chinese demand growth for resources starting in the middle of this decade or the middle of the next decade).

On this, the ASPI-Brenthurst paper carefully avoids a definitive conclusion.

Nonetheless, they draw our attention to an important recent “stress test” by the Raw Materials Group for what the Group describes as “an almost worse case growth scenario” for China.

Their conclusion is that Chinese iron-ore demand will continue to grow by 3.8 percent a year.

As I have stated before, these are complex and significant questions. 

They are nonetheless highly significant for the Australian economy. 

This is one of the reasons why, subject to Parliamentary pairing arrangements, I will be attending the World Economic Forum conference being held in China in mid September.

To gain a better insight from China's other economic analysts as to where the Chinese economy is likely to land by the end of this year and in the medium term future. 

Proposed Changes to the Model – The 12th 5 year plan

During 2011, I spoke extensively around Australia on the strategic significance of the proposed changes to the Chinese economic growth model outlined in the 12th five year plan.

For anyone who’s interested, these can be found on my website with associated power point presentations.

I call this series China 2.0.

The Australian business community needs to be fully appreciative of the deep processes of economic transformation which the Chinese government has itself outlined in this critical document.

China has recognised that its existing growth model is finite.

That model has been based on the following core ingredients;
·         Labour intensive, low wage manufacturing exports;
·         Funded by high levels of national savings and investment;  and
·         Replicating the early economic development successes of the so called newly industrialised economies (the East Asian Tigers) of the 1970s and 80s.

Of course a core driver in this model has been export driven growth, relying upon China’s global competitiveness and open access to global markets – all enhanced by China’s accession to the WTO in 2001.

China’s new model is radically different;
·         Less reliance on exports;
·         More reliance on high level of domestic consumption;
·         In turn fuelled by lower levels of savings, greater government investment in social safety nets to encourage less private saving, and driven by a burgeoning Chinese middle class moving to China’s rapidly growing cities.

In this economic model, the Chinse recognise that the domestic market is critical, including the rapid expansion of China’s services industries, consistent with the pattern of economic development of other middle-income economies in economic history.

Encouraging China’s decision to transform its economic model has been China’s increasing wariness as to the long term reliability and accessibility of global markets in a period of sustained global economic necessity.

Furthermore, China is also acutely conscious that rising standards of living are simultaneously compromising its traditional global competitiveness resting on low-wage levels and labour-intensive production.

The key question for Australia and the world is whether China’s political economy will enable this profound economic transformation to occur successfully without any significant political dislocation occurring domestically.

And furthermore, what the successful implementation of such a transformation will mean in terms of China’s future resources and energy demand.

These are profound questions for us all.

Based on what we know so far, let me hazard some tentative conclusions of my own.

First, while recent economic indicators suggest some softening in Chinese demand, China’s actual economic growth performance in the year 2012 is still likely to come in north of eight percent (that is somewhat ahead of market expectations).

Second, China’s leadership transition will turn out to be relatively smooth later this year and the new leadership under President Xi Jinping will continue to embrace the economic transformation project outlined above.

Third, given this, on balance I am cautiously optimistic about where this will leave China’s demand curve for energy and resources out to 2025.

Fourth, what this means in the interim, however, is that the Australian economy and Australian business begin to need to embrace fully the dimensions of the diversification of the Chinese economy and our engagement with it to one which is not exclusively based on the resources and energy sector. 

Fifth, consistent with what I said in the China 2.0 series last year, this means great future opportunities also in agri-business, new materials manufacturing, the financial services, health services, education services, construction, engineering and design services, environmental services and tourism. 

Sixth, this means that Australia and China should rapidly conclude their bilateral FTA to underpin the broadening of our economic engagement for the future.

Seventh, given the critical importance of investment flows in underpinning a material economic relationship, Australia should maintain its current open and non-discriminatory investment policies towards China.

And consistent with FIRB processes consider each application on its merits, rather than yield to the politically driven populism that we have seen recently from Mr Abbott and from his political and intellectual soul mate Barnaby Joyce.

I am an optimist for the future of the Chinese economy.

I am an optimist in terms of future of the Australia-China economy (noting that we are currently China’s largest single foreign investment destination).

Just as I am an optimist for how Australia and Africa can work together productively in securing a strong future for our respective energy and resources sector.

Tuesday, 28 August 2012

Speech - Labor Politics, Conservative Politics and Australia’s Future

Launch of Volume II of Gough Whitlam’s Biography
Gough Whitlam - His Time by Jenny Hocking
Museum of Sydney
28 August 2012

It is nearly four years since I launched Volume I of this important biography of E.G. Whitlam.

I am honoured to have been asked by the author, Jenny Hocking, to today launch Volume II.

Much has changed in Australian politics since then.

Just as many things have not.

The essential narrative of Australian politics has remained much the same for more than a century: Labor in government the party of progressive economic, social and environmental reform, and of Australia’s place in the region and the world.

The conservatives in government, invariably the absence of a coherent policy program of their own, instead committed purely to the demolition of Labor’s reform program.

We in government have sought to build the house that we call the Australian nation.

The conservatives’ energies instead dedicated to tearing the house down.

Our ambition in office to prepare Australia for its future.

Their ambition in office....  well, just to be in office.

A bit like a bad re-run of Peter Sellers’ “Being There”.

Because this has remained the central organising principle for the conservative political project for much of the century: being in office essentially for the purpose of being in office.
And to this end, one of the great constants of conservative politics has remained their utter ruthlessness in obtaining and sustaining political power.

Which brings us to the important subject before us today – the Government of E.G. Whitlam (1972 – 1975).

It is quite a shocking thing to read afresh the absolute political brutality of the dismissal.

No conservative Edwardian manners on display here.

No acknowledgement of political or constitutional precedent, notwithstanding the fact that the entire conservative enterprise rests on an appeal to political and constitutional precedent.

No. Just a simple, naked lunge for political power when the opportunity presented itself.

And not for the purpose of implementing any long-conceived conservative policy project.

But simply because power belonged to the conservatives because in the conservative world-view that was the natural order of things – almost the product of natural law.

There were barely any achievements to speak of at all.

For those who may doubt this proposition, a cursory examination of the policy achievements of the conservative government between 1975 and 1983 is proof positive.

There were barely any achievements to speak of.

Which brings me to the central point I wish to argue today in launching this important work.

Namely, that down to this day, there is an absolute fault-line between our respective political traditions’ approach to the central task of politics itself.

For all our faults, we in the Labor tradition, the party of the reforming centre of Australian politics, engage deeply in the core task of our policy platform, the costing of our policies, the complex process of transition to government and in the execution of our reform mandate once elected.

Our conservative opponents regard the core business of politics as a demolition derby, with the central task of de-legitimising and destroying Labor.

Rather than preparing, costing and implementing an alternative conservative project for the country.

And all along, animating this deep division in the Australian political psyche and culture are two radically different political alchemies.

The conservatives calling forth the deep emotions of anxiety, fear and anger.

Ourselves, while not exactly angels resplendent in celestial white, by instinct, by inclination and by tradition, nonetheless driven to call forth the better angels of our nature.

What we call the politics of hope.

Whereas the conservatives engage relentlessly in the politics of fear.
Fear of debt when in Australia’s case there inno rational case for fear at all given our relative global performance.

Fear of foreigners.
Fear of change itself, even when change is necessary for us to negotiate a global future full of relentless change.

It is from these deep and enduring principles that the daily politics of our nation proceeds.

Let us look carefully at the Whitlam record.

Let us look carefully at his reform of the Party.

Let us look carefully at the preparation of his policy platform.

And let us look carefully at his meticulous arrangements for a transition to government.

And then the legislative record of the government itself.

These are well documented in the volume we are launching today.

In fact it is in Jenny Hocking’s first volume that we read of Whitlam’s courageous efforts to reform and modernise the Party which had not won an electoral victory since 1946.
Whitlam’s policy speech of 1972 outlined a detailed three year plan of action which we are told Kim Beazley Senior dubbed “The New Testament”.

Beazley, forever the theologian, by contrast dubbed the formal party platform as “The Old Testament”.

A neat theological distinction underlining continuity but pointing to a brand new message for a brand new day.

Then there was Wilenski’s “meticulous paper” on transition to government.

His further paper on the restructure of the Commonwealth Public Service which, in structure itself had changed little since the days of Chifley, laying the foundations for what was to become the Coombs Royal Commission.

While Whitlam himself, the son of a federal public servant, by instinct and by experience reflected his respect for the independence of the Commonwealth Public Service, elected to support the continuity of the senior public service mandarinate he inherited from his predecessors.
A combination of continuity and change which in face belies much of the criticism of Whitlam’s approach to the process of public administration.

And there then, of course, followed the relentless pace of legislative and administrative action of the government itself.

It is a remarkable thing that by the time of Whitlam’s election, the government of the Commonwealth had only changed as a result of national elections on seven previous occasions since federation.

And only one of these occasions was within Whitlam’s own political experience – the conservative victory of 1949.

A change of federal government at elections therefore remains a relatively rare thing in this country.

Therefore, the policy program brought to our national elections is of particular significance.

Whitlam’s was a most formidable record of domestic policy reform:
  • The bold decision of a 25 per cent across the board tariff cut, which we are told Whitlam described to “a sceptical New South Wales Chamber of Manufacturers” as evidence of the first genuine free enterprise government in 23 years;
  • The introduction of consumer protection laws against restrictive trade practices;
  • The support for the equal pay case for women;
  • The introduction of Australia’s first universal health insurance scheme funded by a 1.25 per cent surcharge in income tax; 
  • The introduction of the Schools Commission Bill to underpin needs-based funding for Australian Schools following the Karmel report; 
  • The abolition of tertiary fees, and the introduction of a tertiary education assistance scheme, in order to deal with what Whitlam described as the absolute scandal of only four per cent of government school year 12 completions going on to university, compared with 15 per cent for private schools; 
  • The introduction of the Racial Discrimination Act;
  • Australia’s first land rights legislation;
  • The amendment to the migration act to remove the racist provision that remarkably still required Aboriginal Australians to obtain permission to leave Australia;
  • The abolition of conscription and the cessation of prosecution and imprisonment of draft resisters;
  • The formal embrace of multiculturalism as official government policy;
  • The removal of the last elements of the White Australia policy by the removal of privileges reserved for British white immigrants on the one hand and the removal of discriminatory practices against non-white and non-British immigrants on the other;
  • The exclusion of all racially selected sporting teams from Australia;
  • The introduction of the Family Law Act, the creation of the office of women, sensational for the times, a lifting of the ban on advertising contraceptives and the appointment of a women’s policy adviser – the latter resulting in what Hocking delightfully describes as “A national outbreak of small man syndrome”;
  • The creation of an Australian honours system;
  • The creation of the Australia Council;
  • The commissioning of the National Gallery of Australia;
  • The establishment of the Australian Film and Television School;
  • And (most radically) the opening in 1974 of the FM radio band.

Forty years later, it is easy to forget what Australia was actually like prior to the election of the Whitlam Government.
Before 1972 Australia was an inward looking, by and large Anglo-Saxon monoculture suffering from an acute case of an international cultural cringe – sexist, in some parts racist, marching confidently towards 19th century future.

After 1972, despite the conservative reaction of 1975, Australia had become a confident, internationally engaged multi-culture, celebrating its diversity and carving out its independent place in the region and the world. 

The genie simply could not be put back in the bottle and the core principle at stake in all this was that politics, properly conducted, really does matter in determining the future of people’s cultures and their countries.

And then there is Whitlam’s record on foreign policy.
  • The recognition of China;
  • The signing of the Nara Treaty with Japan;
  • The immediate withdrawal of all remaining troops from Vietnam; 
  • The signing of the international covenants on Civil and Political Rights; on Economic, Social and Cultural Rights and the Nuclear Non-Proliferation Treaty.
  • The independence of Papua New Guinea;
  • The closure of the Rhodesian Information Service in Sydney to the howls of protest of that conservative luminary Sir Robert Askin;

  • The Government’s success in obtaining an interim injunction on the French nuclear testing in the Pacific at the International Court of Justice (the first successful interlocutory injunction in ICJ history).
In one of Whitlam’s most memorable remarks on Australia’s new identity in the world, he said:
“If anything came to an end on December 2... it was the demeaning of Australia in the eyes of the world as the country our predecessors had represented it to be: insignificant, racist, militarist, sycophantic, a timid and unworthy creature of the great powers to whom it had surrendered its identity”

Finally, there was Whitlam’s legendary commitment to electoral reform and the government providing the vote to 18 to 21 year olds at a time when you could be conscripted and sent to war, but unable to vote at elections for the government which conscripted you.

And then his efforts to enshrine what we now regard as the unremarkable principle of one-vote-one-value for all federal electorates, in contrast to the previous system which saw Country Party seats of 45,000 electors and metropolitan Labor electorates of 72,000 electors.
It should never be forgotten that one of the brutal political reasons underpinning the conservative campaign to demolish and destroy Whitlam was their fear (particularly from the National-Country Party) that basic electoral justice would erode their monopoly on power. 

Of course the Whitlam program ran headlong into the great global economic inflationary pressures which greeted his first year in office, brought about in large part by the massive oil price hike in 1973/74 – and the truth is Whitlam failed to calibrate his detailed policy reform program against external economic realities over which neither he, his treasury, or his government had any control.
All the governments, including the one I was honoured to lead, have faced this challenge with varying degrees of success.

But against the conventional conservative critique of this part of the Whitlam record, Hocking reminds us of another inconvenient truth that should be borne in mind.

Before the 1972 election, the Secretary of the Treasury Sir Frederick Wheeler had presented McMahon with revised forward estimates on Commonwealth expenditures under the McMahon government that would see the highest percentage rate increase in government outlays in memory.

And that was before McMahon’s high spending election commitments in the 1972 campaign.

So much so that, by January 1973, with Whitlam less than one month in office, Wheeler was predicting a record deficit of just under a billion dollars, in a booming economy and with mounting inflation,

So the proposition that Whitlam inherited sound public finances from the conservatives is open to significant challenge, causing us to reflect on events just over a decade later when Hawke and Keating inherited an even greater deficit from the preceding conservative government of Fraser and Howard.

Nonetheless the overall point is this, notwithstanding the major challenges of global macroeconomic policy which dogged the Whitlam Government throughout its term, and to which the government failed to calibrate its program, the breadth of the enduring reform agenda of this government remains to this day.

Of course the Whitlam Government is both a tale of triumph and a tale of tragedy.

Neither Whitlam, nor any of his successors, are deserving of hagiography.

But whatever might be concluded about the failings of his government, there is little disagreement that there was nothing in the performance of the Whitlam Government that warranted the unconstitutional actions taken by the conservatives to bring down his government.

As Hocking starkly observes on page 61 of her book:

“If the government’s sole political strategy was to implement its program, the Opposition’s was equally simple and singular – to use its numbers in the Senate to remove the Whitlam Government. Nor was there any secrecy in the Opposition’s political strategy, it was plainly set out by its leader in the Senate... in his address in reply to the Governor General’s speech, (The Leader of the Opposition in the Senate) Senator Withers articulated this uncomplicated process: deny the legitimacy of the Whitlam Government, deny the reality of its election victory, deny the mandate and use the powers of the senate to remove what he considered an abhorrent government: ‘the Senate may well be called upon to protect the national interest by exercising its undoubted constitutional rights and powers’ ”
And let’s never forget this was in early 1973, just after the election of the Whitlam Government before anybody had heard of the Loans Affair.

Withers argued that the electorate was “unaware” of the implications of its decision in the 1972, and further more that the election result was “temporary electoral insanity”.

Withers further argued that the concept of an electoral mandate was “dishonest”, this sounds more like the table banter or high Tory grandees during the time of Queen Victoria reflecting on the poor judgement of the lower orders.

But no, this was the conservative leader in the Australian Senate in the 1970s.

Hocking also recounts the extraordinary story of the Governor of Western Australia, Sir Douglas Kendrew, who outlined to a somewhat shocked Governor General Sir Paul Hasluck that he had been in private discussions with the leader of the WA Opposition, Sir Charles Court, about his strategy to have supply to the newly elected Labor government rejected in the WA upper house, thereby forcing an election; and then having newly appointed WA conservative government, act with other non-Labor state governments to bring the Whitlam government down.

Forty years later this is extraordinary stuff to read.

But as we saw later with the decision by the conservative government in Queensland of Sir Joh Bjelke-Petersen to change the numbers in the Senate by appointing Albert Patrick Field to replace the late Senator Burt Milliner, these were not simply idle conservative speculations over whiskeys and sodas in a gentleman’s club. They actually did it.

In one of the most impressive sections of Hocking’s book, she analyses the concerted conservative strategy to de-legitimise the Whitlam Government in order to create a sufficient climate of crisis to either force the government to the polls or, as indeed it turned out, to induce the Governor General who replaced Hasluck, Sir John Kerr, to dismiss the government.

To quote Hocking once again: 

“Illegitimacy became the prism through which the normal activities of government – from appointments to policies – were seen... this was more than just a difference in political tone or a disagreement over policy: it was a different vocabulary altogether, one that effectively closed normal political debate, as arguments over policy options, differences between the parties and over specific government decisions were reduced to claims of illegitimacy. A linguistic continuum emerged from self interest to incompetence, from impropriety to corruption and even criminality.”

Of course all this comes very much from the universal conservative playbook.

Not just then. But now as well.

Not just in Australia. But also abroad.

But for the Whitlam Government, of course the rest is simply history.

There has been much debate in recent days about who were the precise dramatis personae in the events leading to the dismissal on 11 November 1975.

But the simple stark truth remains:
  • The conservative opposition by and large manufactured a climate of unresolvable political crisis’ in late 1975;
  • Second, on this basis they moved to block supply;
  • Third, they refused to allow the matter to come to a vote in the Senate, knowing that their own numbers would buckle;
  • Fourth, the proper constitutional course was for the matter to be resolved through a half senate election which was due by June 1976 in any case;
  • But fifth, they could not allow such an election to occur given that a recent High Court decision had made it lawful to elect two senators each from the two territories and the likelihood that this in itself would break the Senate impasse on supply.

Hocking quotes Paul Kelly’s acute observation at the time when he wrote:

“there is no more specious argument than the claim that the Senate has an obligation to force an unpopular government to the polls – all governments at one time or another are unpopular. This approach simply ensures that unless a government has full control of both houses... it will be struck down at its weak point and denied the traditional three to four year term fundamental to sound government in most countries.”

So what does all of this have to say to those of us involved in the mire of Australian politics today?
Quite a lot actually.

As I noted at the beginning of my remarks today, there are certain continuities that run through the veins of our national political discourse.

When the Australian Labor Government was elected in 2007 it was elected on the basis of a clear program of policy reform including:
  • A new approach to productivity driven by new large scale investment in skills and infrastructure including a National Broadband Network;
  • An Education Revolution;
  • Health and Hospitals Reform;
  • An Apology to Indigenous Australians;
  • The ratification of Kyoto;
  • A renewable energy target of 20 per cent;
  • A price on carbon;
  • The abolition of WorkChoices (for which there had been no mandate at all for the previous government); 
  • And a new and active foreign policy in our region and the world.

The government under Prime Minister Gillard continues to implement a program of reform today, including a National Disability Insurance Scheme of far reaching importance for our people.

And since the very month of the government’s election at the end of 2007, we have had to weather the worst global economic crisis since the great depression: successfully avoiding recession and mass unemployment.

The normal business of government is hard.

The business of a reforming government is even harder.

Add to that a global economic crisis and it becomes harder again.

But contrast, however, this approach to that of our conservative opponents.

Both the 2007 and 2010 conservative election campaigns were simply attempted demolition derbies against the Labor Party.

In 2007 this was designed to mask the fact that the Howard government had become the highest taxing government in Australia’s history, interest rates were at record highs and an ideologically driven WorkChoices regime that was squeezing the life out of Australian families.

And it you ask anyone today what Mr Abbott’s program for election was for the 2010 election, we would all still be scratching our heads.
Remember, the conservatives refused to submit their policies which they put forward at the 2010 election to any formal costings process.

And for the next election, they already start, by their own admission, with a 70 billion black hole.

We have never seen any evidence of a transition to government process.
Nor has there been any alternative policy program (other than the reintroduction of WorkChoices as Mr Howard in part argued earlier this week).

No, there is none of that.

Mr Abbott’s entire program, in the tradition of his conservative predecessors, is simply driven by a campaign of delegitimisation of Labor.

Opposing everything, proposing nothing.

And to do everything possible to secure government by whatever it takes. 

And as one of the independents reminded us recently, Mr Abbott is willing to obtain political power at any price. 

And beneath all this, Mr Abbott would hope that he would be taken on trust.

Notwithstanding the fact that Mr Abbott is the most extreme right wing leader in his party’s history.

Notwithstanding the fact that he has neither the temperament nor the policies to occupy the highest office of this country – the Office of Prime Minister.

And that is why I believe Tony Abbott is entirely beatable at the next election because increasingly the Australian people see what it may mean to take a conservative leader such as him on trust.

And the good people of Queensland are discovering this as we speak.

I commend Jenny Hocking on her book.

These two volumes have been a labour of love over many years now.

I commend their subject – Edward Gough Whitlam for all that he has given his country.

Just as we all commend (and lament the passing of) his life partner Margaret who has equally been an inspiration to us all.

On all reasonable measures Australia is a better place for their lives and their life’s work.