Sunday, October 5, 2014

Is Australia's political system broken?

“The process of debate, competition and elections leading to national progress has broken down. The business of politics is too de-coupled from the interests of Australia and its citizens. This de-coupling constitutes the Australian crisis”.

The quote is from the last chapter of Paul Kelly’s most recent book, Triumph and Demise, The broken promise of a Labor Generation (published by MUP, but I purchased the Kindle version from Amazon). Over several decades Paul Kelly has developed a formidable reputation as Australia’s leading ‘big picture’ journalist. I don’t think anyone else has been more successful in identifying the defining elements of the changing political landscape in Australia.

In launching the book, Tony Abbott, Australia’s current prime minister, took issue with Kelly’s claim that the system has broken down. He suggested that the style of government of the past six years had been just a passing phase, rather than “the new normal”. The PM said:
“It’s not the system which is the problem, it is the people who from time-to-time inhabit it. Our challenge at every level is to be our best selves.”

More recently, the electoral triumph of the New Zealand National Government under John Key appears to have demonstrated that it is still possible for a government to contain the growth of government spending in the face of political obstacles similar to those faced by governments in Australia.

So, is Paul Kelly wrong? I don’t think so. The system must be broken if achievement of reforms requires politicians to become their “best selves”.

Paul Kelly writes of “volatility and fragmentation” as being “the new driving forces” of Australian politics. He argues that the system has evolved in ways that have given sectional interests more power than ever before. He mentions technology and campaign techniques in this context, and brings fragmentation of the traditional media and the rise of social media into the discussion. He also makes the point that it has become more difficult for leaders to talk honestly to the community as they have become subjected to greater media pressure to rule out any action that might disadvantage any powerful interest group.

However, the strongest points which Paul Kelly makes in support of the view that sectional interests now have more power relate to the rise of minor parties, accompanied by a decline in tribal loyalty to the major parties. Minor parties tend to play to sectional interests because “they lack any governing culture or responsibility for the national interest”.

It has for many years been a normal part of the Australian political landscape for government legislation to be subject to obstruction from the cross-benches in the Senate. In the past, Governments were often able to deal effectively with this by threatening a double dissolution election. Paul Kelly points out that following the expansion in size of Parliament in the mid-1980s, there is now more likelihood that a double dissolution election will result in even more minor party representation because the quota of votes required for election is easier to obtain.

It is possible, of course, for the major parties to come together to agree to the spending cuts or tax increases required to avoid an explosion in government debt. But it is particularly difficult for the major parties to be seen to agree on a strategy to achieve that. The small remaining philosophical differences between the major parties hinge around fiscal policies - the Labor party tends to favour a bigger role for government, while the Liberal party tends to be somewhat opposed to government playing a bigger role.  In addition, even though there may not be much difference in practice between the policies the major parties implement when they are in government, when in opposition neither party has an incentive to offend interest groups that might help them win to the next election.

Perhaps the current government will be able to resolve the immediate fiscal problem by proposing spending cuts that will be more acceptable to the opposition, or the minor parties, than those currently proposed. The chances of such reforms being accepted will improve as the next election approaches and the opposition comes under greater pressure to demonstrate fiscal responsibility. As government debt increases, it will also become increasingly difficult for the opposition to oppose fiscal reform on the grounds that Australia is not Greece.

However, even if the immediate fiscal problem can be resolved satisfactorily, it is difficult for anyone to claim that Australia’s political system is not broken when it contains in-built incentives for fragmentation of the major parties. As the minor parties demonstrate to interest groups the advantages of Senate representation, voters have a strong incentive to break their allegiance to the major parties. This is particularly likely if (to use words of my friend Jim Belshaw on his blog a few years ago) they “reject the intellectual, institutional and political constructs” of the major parties. As the parties fragment, some excellent minor party candidates, like Senator David Leyonhjelm of the LDP (whom I claim to have voted for intentionally in the last election) will probably be elected.  In the end, however, we are likely to be left with a situation where the line of least resistance will usually prevail and governments will always be able to blame Senate obstruction for poor economic policy outcomes.

In an article posted here a couple of months ago, I suggested that better policy outcomes could be expected if Senate candidates were chosen randomly, rather than selected by parties. There is not much chance of a proposal along those lines being seriously considered in the near future.

There are probably other ways to reduce Senate obstruction that would be more acceptable to the major parties. The major parties will be doing a useful service to themselves, as well as the nation, if they can get together to consider and implement reforms to the Senate before the benefits of accountable government disappear entirely. 

Jim Belshaw has responded to this post on his blog.

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