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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

political rhetoric of Rudd + Co « Previous | |Next »
October 17, 2008

Dennis Shanahan in The Australian makes a good point about the political rhetoric of the Rudd Government.Shanahan says:

Rudd faces the difficult problem of selling diametrically opposed messages: Australia is better off than the rest of the world and our banks are the safest in the world, but we are in dire need of guaranteeing those banks and blowing the budget surplus.Health Minister Nicola Roxon was caught in this contradiction by suggesting - only a couple of hours after Rudd and Swan had blown $10 billion - that the Coalition's opposition to the Medicare levy in the Senate was endangering the surplus.

The Ministers work in terms of set lines or talking points, always repeating the same message over and over again until the new lines or talking points are devised. The media usually goes along without paying much critical attention to political rhetoric and the way that it is out of kilter with reality.

What we are presented with by the media professionals is an emphasis on particular words, such as "working families"; or an insider's reconstruction by a senior columnist of what happened inside government circles by a senior columnist in response to particular in events.

The gasp between reality and rhetoric has been marked with the global financial crisis. The Rudd Government knew its significance as a global crisis around March 2008 and its the effects on the world economy. Rudd decided to prepare an economic stimulus package for Australia and commissioned a series of papers.

Not a hint in the political rhetoric. Ministers were still rabbiting on about protecting the surplus, fighting inflation and China providing Australia's insurance policy to sustain its economic growth. As Stuart Middleton, Postdoctoral Research Fellow in Business at the University of Queensland, said in Crikey::

The Rudd Government was slow to acknowledge a financial crisis...At this stage [10 October] Rudd Government rhetoric shows no indication of a financial crisis. Emphasis is on world, global, and Australian financial markets, but there is no negative connotation with these, such as "turmoil". A good example is Rudd’s summary of the problems on 10 October in an interview with ABC Radio: "I think, overall, what we face is a broader problem of a lack of a demonstration of global and coordinated political will to deal with some of the deeper regulatory challenges that we now face, and that, I believe is a key part of the confidence equation and that must be addressed as the Finance Ministers meet in Washington this weekend."

Rudd is careful to talk of administrative solutions to what he perceives as a confidence issue. The Government’s talk at this time is therefore of a strong economy. It only definitively and unreservedly discussed a global financial crisis on 14 October, after the notion had appeared in the media over a period of several days. Yet they knew in March.

| Posted by Gary Sauer-Thompson at 6:59 PM | | Comments (12)


Rudd faces a dilemma. He craves to be seen well on the
world stage. He craves to be written into history. He needs to be seen as a good prime minister of Australia.

Its a hard one...for him.

it is a global crisis. The reasonable question is the one Turnbull is asking: "What are the assumptions they're (Rudd +co) working on?" These, according to Turnbull and Bishop are not forthcoming.

What could Rudd have done back in March? He could hardly have put emergency measures in place at a time when nobody thought there was an emergency.

for one thing start changing the rhetoric so it doesn't look like spin. Peter Costello could have called them on that but he backed off. Out of his depth?

Why guarantee bank deposits when all the rhetoric was about how safe and prudent the Australian banks are due to the fantastic regulation put in place by Australian Government who are so on top of things that Australia is the model for the rest of the world.

They either knew what was going on and refused to level; or they were making it up as they went along. On the latter interpretation they have no real numbers or modelling for the effects of the financial crisis on Australia's real economy. It's all back of envelop stuff veiled by spin to buy them time. "National economic security" covers up the lack of data.

They are not levelling. Such a big stimulus package suggests that Australia's economic growth is projected to fall below the IMF forecast for Australia of 2.2 per cent growth for 2009. The Government fears this is too optimistic.--the figures are out of date etc. As Malcolm Turnbull said:

If you really thought growth was going to be 2per cent plus next year, I don't think you'd be spending $10 billion in the fiscal stimulus. The Government must believe that growth is going to be less and possibly a lot less. What we've sought to find out is what are the assumptions they're working on?

Sounds a reasonable request to me.

Lenore Taylor in The Australian says:

The awkward truth for the Government is that it found itself in a situation where it was forced to take a punt, to make a quick judgment based on imperfect evidence. When senior members of the Government referred to "preliminary forecasts" and "preliminary advice", they were doing so in the loosest sense of the terms.
The forecasts from the Reserve Bank and the International Monetary Fund of how fast the economy would slow were both out of date, but none of the risk was on the upside.

according to Paul Kelly in The Australian Rudd's response to prevent a recession in Australia has been shaped by three factors: the Reserve Bank's dramatic October 7 change in "the balance of risks", the new International Monetary Fund forecasts about the global downturn and a warning from the Treasury that Australia faces a significant growth slowdown.

On the latter Kelly says that:

Rudd was influenced by advice Treasury secretary Ken Henry gave the emergency meeting in the cabinet room last weekend when they canvassed a fiscal stimulus: "Go early, go hard and go households." This is Treasury's conclusion from earlier, less successful packages -- notably the Keating February 1992 One Nation stimulus -- that came far too late...Henry told ministers to expect a nine to 12-month lag for the central bank's interest rate cuts to have an effect.

Rudd, Kelly says, acted on each of Henry's precepts. Australia is moving early with its stimulus in one-off payments from December 2008. It has gone hard; the $10.4billion package is equivalent to 1 per cent of gross domestic product, yet because it is squeezed into seven months its actual impact is closer to 2 per cent of GDP equivalent. And it has gone to households, with the winners being pensioners, seniors, carers and families who should have a high propensity to consume.

"And it has gone to households, with the winners being pensioners, seniors, carers and families who should have a high propensity to consume."

Gary, I would have thought any money out of the surplus to stimulate the economy would have been better spent on marginal home buyers.Directly paying off part mortgages.

The money will still end up back in the economy,as Howard knew when he started these large cash bonuses some years ago.

I am a pensioner and own my own home,I would gladly give up my bit for the cause.

On whether they should come clean about what they've heard, it seems pretty safe to assume that it was extremely bad. What should they do, tell and possibly cause panic, or not tell and let people find out for themselves.

Maybe there'll be some news from the meeting with business people this weekend.

What would people do if they were told things are about to get very, very nasty? Say, if unemployment was expected to double and property values to halve? If banks were expected to fall over and businesses go under? We might be better off not knowing.

That public service super keeps coming back and biting the bum.

back in March Rudd and Co would not have known that the future scenario would be one of unemployment was expected to double, property values to halve, banks were expected to fall over and businesses go under?

They could have changed the upbeat optimistic talking points ----still repeated by Roxon on Friday re Medicare about defending the budget surplus. That they didn't indicated that the Ministers were parts repeating lines written for them,----staying on message even when it no longer made sense.

I guess that they want new homebuyers to re-enter the market and start buying--creating demand and so helping to keep property prices up/prevent them from falling.

The TV footage that I saw indicated that they people were looking but buying. Interest rates would need to come down a lot more I would think.

you and others are right to suggest that they probably didn't level, but I think we have to move forward, instead wondering WHY this happened (eg, contextual issues).
Is it to do with the election cycle and "political banking", that I suggested eleswhere?
What would they have acheived had they blurted doom and gloom six months ago?
They are trying to soften the landing as well as make sure people know this?
Secondly, they were in the process of burying an- at very best- equally undeserving opponent while they were down under Nelson. Not a skerrick of evidence exists that the Tories would provide any meaningful alternative to Labor.
I do agree they are horribly conservative( after Scullin and Ramsay-McDonald, from a different era? )and "Howard lite" is bordering on flattery, but they have the mandate and it is still too early to past judgement on how well or badly they have done.