Abbott’s Leadership Problems and Australian History

This paper was first presented to the Contemporary Histories seminar series in March 2015.

The recent analysis by the media of the leadership crisis within the Abbott government, and indeed of the conflict over leadership in the Rudd and Gillard governments, has concentrated largely on issues of personality, personal rivalries, broken election promises, failures of consultation by the leaders with their cabinets and backbenchers, the failings of their private offices, the role of the media and the failure of their governments to deliver vital policies. Each of these factors are, no doubt, important in explaining the rapid turnover of prime ministers since John Howard lost office in 2007 and the threat to the current office holder. The question arises as to whether these short-term factors are sufficient to explain Australia’s recent political turbulence? Do we need to dig more deeply into Australian history to understand the roots of the current political instability and the problems faced by our recent prime ministers?

From the late nineteenth century to the early twenty-first century Australia lived through three eras in which a different set of economic and political ideas – a paradigm – dominated politics. The first era, which emerged from the 1890s and lasted to the 1930s, was that of the ‘Deakinite Australian settlement’. The second era had its origins in the 1930s and lasted from the early 1940s to the 1970s and is best described as the Keynesian consensus. The final era, the neo-liberal order, had its roots in the late 1960s and 1970s and was fully formed by the early 1980s and has lasted till today. In each of these eras a broad base of support for these political and economic visions – the dominant paradigms – formed among the major political parties and the broader population, even though the political battle always continued over particular policies and issues.

Out of the depression of the 1890s, and the ferment of debate about the future government of Australia that it generated, there emerged the Deakinite Australian settlement based on the Federation of the six colonies and summed up by the word ‘protection’. The settlement was made up of a package of ideas including protection of the economy, especially through tariffs, protection of wages and conditions through a conciliation and arbitration system, protection for the elderly through a limited welfare state and protection of the people, the race, through British immigration schemes and the White Australia policy. In addition economic development was mainly through the private sector, but supported by strong, but limited state institutions and government intervention.

With the impact of a second Great Depression in the 1930s the Deakinite Australian settlement came under enormous pressure. Another period of intense debate ensured during the 1930s which eventually saw a consensus form during the Second World War around a new paradigm: the Keynesian consensus. Under the Keynesian consensus the Deakinite Australian settlement was revised to include the Keynesian approach to economic policy, the idea of a mixed economy, continued protection of manufacturing, a regulated currency within the Bretton Woods international system, an extended if still limited welfare state, an expanded, but still largely European immigration program and a burning commitment across the political spectrum to maintain full employment come what may. From the late 1960s the Keynesian consensus began to unravel under pressures created by the Vietnam War, the end of the long post-war economic boom and a new vigorous debate over the proper role of the government in the economy and, more broadly, in society.

The ‘troubled times’ decade of the 1970s saw the final breakdown of the Keynesian consensus and the emergence of a third paradigm based in the political and economic philosophies which we now label as neo-liberalism: best described in Australia as the neo-liberal order. In the neo-liberal order the ideas which dominated both sides of politics included an emphasis on individual freedom and rights, the importance of a free market and the entrepreneurial spirits and a critique of government’s role in the economy, including opposition to its role in the re-distribution of wealth within society. The policies that flowed included the attempted reduction in the size and role of the government, reduction in progressive income taxation in favour of regressive indirect taxation, privatisation of government assets and institutions, de-regulation of the economy, reducing the size and universal nature of the welfare state, undermining the power of trade unions and the targeting of inflation rather than unemployment as the key economic aim.

Under this analysis Australia has passed through three political eras of roughly four decades duration each dominated by a different political and economic paradigm. While there has always been vigorous political and popular opposition to each of these paradigms, in their heyday their fundamental principles and ideas have been supported by the major political parties and a majority of the Australian people. The broad support has ensured continuity of government policy and, consequently, long-term governments with stability in leadership. Eventually in each case that support and near consensus among the public has eroded away during a period of economic crisis. The last decade of each era saw hard times which generated fundamental questioning of the dominant political and economic philosophies that the nation had been following. The debates in the broader community in 1930s and 1940s, in the 1970s and again over the last eight years have not been simply about policy, but rather about more fundamental conceptions, such as the role of government in society, individual rights versus community values, and of economic philosophy.

As the dominant paradigm came under increasing questioning in the final years of each of these eras Australia experienced turbulent politics marked by rapid changes of governments and frequent changes in leadership. It is also notable that in the collapse of two of these eras – the early 1940s and the 2010s – the federal sphere saw minority governments, with independents as kingmakers. Towards the end of each era the public became more divided politically and more willing to change their vote from party to party. As the Deakinite Australian settlement came under pressure during the Great Depression, the debate within Australia over the best political and economic response exploded and the pressure on governments to find new solutions grew. After the end of the Lyons government in 1939 we saw a period of minority government and rapid changes in leadership. Of course, the Second World War cast a long shadow over these years and was a hugely significant factor in the politics of this time. But the war was also was the crucible in which the Keynesian consensus was forged. It was not only the Curtin-Chifley Labor governments which were converted to the new paradigm. We must also remember that Robert Menzies’ famous wartime radio broadcasts, including the Forgotten people, not only laid down a vision for the future Liberal party, it was also a statement of commitment to the ideas that would form part of the Keynesian consensus. The Curtin-Chifley governments laid the foundation for the Keynesian consensus, but after 1949 the Menzies government embraced, modified and sustained it.

In the late 1960s the Keynesian consensus began to crack and consequently we saw a quick turn over of prime ministers and short-lived governments, culminating in the dismissal of the Whitlam government in 1975. The Fraser government was a transitional government which adopted the rhetoric of neo-liberalism, but whose policies were still heavily marked by the Keynesian consensus. Consequently, it was under the Hawke-Keating governments that the neo-liberal order was fully formed and reached its high point of political dominance under the Howard government. Yet again, against the backdrop of a major international economic crisis, the Global Financial Crisis, the political and popular consensus supporting neo-liberalism began to break down and since 2008 we have seen a new period of heated debate and uncertainty, accompanied by heavy political turbulence and a rapidly revolving door for political leaders. In Australian political history over the long twentieth century there have been three long eras of relative stability shaped by the dominant political and economic paradigm of the day. These eras have seen, with few exceptions, long-term governments with long serving prime ministers. But each of these eras has ended with a sustained period of international economic crisis. These transitional periods have been marked by short-lived governments and quickly changing prime ministers even if the ruling party remains in office.

I don’t want to suggest at all that history is determined by certain laws or cycles. Nor do I think history can be used to predict the future. And I don’t want to claim that there is something magical about these four decade cycles which will be repeated again and again every forty years into the future. What I am suggesting is an interpretation of Australian history of the last 120 years which may help us to understand why over recent years the major political parties are struggling to stay in power and why leading the nation in the current era is proving to be so problematic. In summary, my argument is that since Federation there have been three long eras which have ended as the tectonic plates of Australian politics have shifted under the pressure of economic crises accompanied by international conflict. The last decade of each of these eras, as the dominant paradigm erodes, have been marked by rapid turnover of leaders, occasional minority governments, fractious electorates and short-term governments. I suggest that since the GFC in 2008 we have seen the collapse of the most recent public consensus over the value and viability of neo-liberalism, although the major political parties still seem wedded to the neo-liberal order in 2015.

Almost invariably with the collapse of these paradigms the public and intellectual debate begins to move on before the major political parties do. We can see that the power of some of the key ideas of neo-liberalism, and indeed the language associated with it, which were so powerful when deployed by Hawke, Keating and Howard have, over the last decade, lost their magical political force with the public. One example is the buzz word of neoliberalism ‘privatisation’, as evidenced by the result of the last Queensland election. President Reagan’s famous call that the government is not the solution, but rather the problem does not resonate with the public of the 2010s as it did in the 1980s. Government debt is no longer the bogeyman that can be called upon to guarantee the passing of more and more austerity measures, even when allied to the lure of personal tax cuts. Economic commentators and business organisations rail against a public no longer willing to accept further neo-liberal ‘reforms’ and they blame politicians who they claim have not adequately explained their absolute necessity. In reality the public fully understand these policies and their impact because they have been living in an era dominated by these ideas, policies and language for nearly forty years. It is not the salesmanship, but neo-liberalism itself which they now question. The same thing happened for the generations who lived through the Great Depression and the Second World War. They had had long experience of the Deakinite settlement, and indeed of austerity economics in the 1930s, and were more than willing to give the Keynesian approach a try in the post-war years and it delivered in spades, at least for the next thirty years. And again in the 1970s as Keynesian economic policy and the welfare state seemed exhausted as political and economic solutions the wheel turned to the neo-liberal order. In 2015 the debate is moving on again and those in power have not caught up.

The evidence for the transitional nature of the era we are living through can also be seen in the constant criticism by commentators, lobbyists, academics and journalists of the failure of recent prime ministers to enunciate a grand narrative. The problem is that for the mainstream politicians of today, just as it was for the centre-right governments of the late 1930s and early 1940s and the centre-left governments of the 1970s, is not that they do not have a grand narrative, but rather it is a forty year old narrative that the public no longer wants to hear or indeed believe, let alone be inspired by. If the neo-liberal order is coming to an end, or at the very least undergoing major renovation, it is not clear what will replace it. We have seen the language in American politics change with the coming of President Obama’s ‘middle class economics’. We have seen the fierce debate ignited around the world over the role of inequality of wealth and income in the economy, stoked by the publication of Thomas Piketty’s book, Capital in the Twenty-First Century. We have also seen a whole raft of ideas thrown up in the debate over how best to deal with the pressing issue of climate change. We also see those who want to push even further into a more radical neo-liberal society marked by minimal government, unregulated markets and libertarian social principles. What the new paradigm might be is not a question for a historian, but it seems that a major transformation of the local and global economic, social and intellectual sources of Australian life, and consequently of the political landscape, are underway.

To come back to very recent events my analysis of Australia history does not suggest that Tony Abbott is automatically doomed. History does not repeat itself exactly or follow some pre-ordained script. Neo-liberalism may continue for many years to come as the dominant political and economic organising idea within Australian society or it may evolve or it could be replaced by something else in the very near future. The only true lesson of history is that the future will be very different from that which we now imagine. And that historians are as bad as everyone else in predicting the future. Yet the analysis that we are living through another major transitional period in Australian history does suggest that Prime Minister Abbott faces an enormous challenge to first survive and then to thrive. And a prime minster who believes it to be a great credit to the nation in the twenty-first century to be awarding a knighthood to a royal who was born during the first of my three eras, does not easily strike this historian as a leader who has the imagination, flexibility and ideas to survive the transition to what lies ahead.
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