EDITORIAL: by Peter WestmoreNews Weekly
SA, Tasmanian elections confirm Labor's decline
, March 29, 2014
Traditionally, state elections held after a federal election result in a swing against the federal government — partly a reflection of people’s preference to have different parties in government at state and federal levels, and partly the traditional swing against a government in power.
Since its election last September, the federal Coalition government has presided over some bleak economic news, including the closure of Holden and Toyota’s motor manufacturing operations in Australia, the loss of 5,000 jobs with Qantas, and the threatened closure of the SPC fruit-processing business in Shepparton, Victoria.
Additionally, the federal government’s National Commission of Audit, established last October to find ways to cut the federal government’s massive budget deficit, has been commissioned to report so that its recommendations can be considered prior to the 2014 federal Budget.
The commission consists of senior business figures, present and past government officials, and is led by the head of the Business Council of Australia and chairman of Transfield Services, Tony Shepherd.
In announcing the commission — the first complete review of the scope, efficiency and functions of the Commonwealth government in 20 years — the Treasurer Joe Hockey said: “During this time the size of the Commonwealth government has expanded significantly, as has the remit of some of its activities.
“It is also essential that the Commonwealth government live within its means and begin to pay down debt.”
He said the review would (a) ensure taxpayers are receiving value for money from each dollar spent; (b) eliminate wasteful spending and unnecessary duplication between governments; and (c) identify areas or programs where Commonwealth involvement is inappropriate, no longer needed, or blurs lines of accountability.
All this indicates that the government expects it will have to make further hard decisions. Already, the government has expressed its intention to sell the government-owned Medibank Private health benefit scheme. Several other instrumentalities are also likely to be sold off.
All this adds to both personal and business uncertainty, and will have contributed to a level of discontent with the federal government.
Both the Labor Party and Labor premiers in South Australia and Tasmania campaigned aggressively against the Abbott government, blaming it for the loss of jobs and falling business confidence.
They ran a major fear campaign predicting that if Liberal governments were elected in those states, the GST rate would rise to more than 10 per cent. They further claimed that the Liberals were planning cuts in wages, particularly penalty rates, as part of their workplace reform package.
In the circumstances, it was to be expected that there would be a slide in public support for the federal Liberal-National Party government, particularly where its future was not at stake.
What happened was quite different. In both South Australia and Tasmania, there were swings towards the Liberals and against Labor and the Greens. As Tony Abbott and Bill Shorten campaigned hard in both states, the implications could not be more obvious.
In South Australia, the state most directly effected by Holden’s forthcoming closure, the swing to the Liberals was 2.6 per cent, and against Labor, about 1 per cent. In Tasmania, where Labor has been in coalition with the Greens, the Liberal vote rose by over 12 per cent, and Labor lost a massive 9.5 per cent.
The fact that Labor, at the time of writing this column, looks likely to form government in South Australia, after the Liberals secured about 5 per cent more of the two-party preferred vote, tells us more about the electoral boundaries than the performance of the parties.
The elections indicate that Australians well understand that to address the massive federal government deficit will require either cutting government expenditure (and jobs) or increasing taxes.
It also shows that most accept that in relation to iconic Australian businesses such as Qantas, whose cost structure is 30 per cent higher than its international competitors, the company needs to have the freedom to restructure its business in order to make it competitive against rival firms owned by foreign governments.
Most Australians also accept that the laws in relation to unions need to be amended to prevent the grave abuses which have occurred in the Health Services Union and the building industry.
Days after the state elections, no comment on the results appeared on the websites of either the ALP or Bill Shorten.
However, he told The Australian, “There’s no doubt Labor’s got a long road back”, and ruled out any further coalitions with the Greens, as had occurred under both the Gillard Labor and the Tasmanian Labor governments.
The problem for Shorten, however, is that on a range of federal issues — including the mining tax, the carbon tax, asylum-seeker policy and education — Labor’s policy is still in lockstep with the Greens.
Until Labor addresses these issues, it will remain unelectable.
Peter Westmore is national president of the National Civic Council.