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32 responses to “The politics of the Rudd essay and the stimulus package”

  1. Labor Outsider

    Nice post. The Libs should quit on the deficit – politically it is a non-issue at the moment. They can get on that horse again in a few years if the economy recovers and the ALP maintains deficits, or if government bond yields blow out as public debt levels pick-up.

    As I said elseswhere, things are set up well for the government, provided that things evolve more or less as they have set out in this “mini-budget”. The public don’t blame the government for the downturn but will give them credit if the downturn/recession proves mild. If things were to get a lot worse (house price falls of 20%, unemployment heads toward 10% not 7, banking sector turns out to be unsound, foreign investors dump $AU assets, etc), and it were to look like the government had no idea how to fix things – then the politics will get more complicated. But I don’t think that scenario is likely.

  2. Mark

    No, nor do I, LO. In some ways, the global financial crisis is looking like something of a godsend for the government – got rid of the “do nothing” perception that was starting to build up mid last year and cemented their image as strong leaders. But I think Turnbull’s had a terrible time of it. He really should have kept his head down and done the bipartisanship thing, but that’s probably impossible given the internal politics of the Liberal party.

    It’s fun to imagine how Brendan would have gone – the “feel your pain” thing might have actually been a better strategy for the Oppo.

  3. Marks

    Well, Rudd would be a slow learner if he did not take a great deal of care to craft a political narrative.

    Whitlam came in after years of neglect of infrastructure and set about spending money on righting it. However, in the middle of the oil shock, one of the things he did not do was go on the political offensive and crucify the Libs for their shameful neglect nor really ram home the external reasons for inflation etc. He paid the price for focussing on fixing the problems but not keeping his eye on the politics of it all.

    Similarly, JPKeating was correct in attacking the overheating economy in 1991. It WAS the recession we had to have. (If anyone doubts the wisdom of his doing it from an economic pov, they ought to listen to the unstinting praise JPK got from the former Governor of the RBA in the Boyer Lectures). However, instead of crafting a campaign to tell the Aust people why he was doing what he was doing, and sell sell sell, he just popped out that ‘recession we have to have’ line – and it has crucified the ALP in the eyes of the electorate. Again, getting on with the job, but losing sight of the political narrative.

    The point is that the Liberals managed to make Gough look bad (he still scares first year economic students at night you know) even though he was fixing up their neglect, and the Libs made JPK look bad when he was fixing up the private sector excesses of the late 1980s. So Rudd would be a dill of the first water not to perhaps wonder if he might just add some political narrative to the restoration work that HE has to do to the economy. I daresay he does not want the undeserved crap that Gough and JPK got, nor, more importantly, does he want the Libs again to evade responsibility for their neglect.

    (I have to add though, that Gough’s seriously fatal mistake of not controlling his Cabinet at the end – Khemlani et al, was something he should have been turfed out for. A pity, because the rest of what he did during his term makes him one of the great Australian Prime Ministers).

  4. Guido

    Peter Costello is going to be on Lateline in a few minutes and everything will be answered.

  5. Ken Lovell

    I’m really puzzled by the repeated charge from the anti-government sources that Rudd is another Whitlam. Those of us old enough to remember know it’s arrant nonsense but for most of the electorate it surely carries no message at all.

    I would not be as sanguine as many appear to be about the future. I don’t believe we’ve experienced anything like the worst of the effects of this global depression. To think we will get out of it with nothing worse than a bit more mild asset deflation and 7% unemployment is wildly optimistic in my opinion but the truth is nobody knows. All the official forecasts from the last 12 months have been laughably useless and there’s no reason to think they’ve suddenly got it right.

    If my fears are correct, and we see high unemployment together with people’s savings being wiped out through asset deflation and money inflation, voters will want somebody’s blood. They may not be content with just the state Labor governments.

  6. Dave55


    I think the timing of the Essay release was well planned for two reasons:
    1. It would put the Libs on the defensive about the past Government and forces them to talk about what they were rather then where they should be. It also wedges them to either rebut what they say about the party (and potentially disenfranchise the Right) or defend the indefensible (ie corporate greed). Thus, if they decide to comment on it (the bait you talk about), they are boxing themselves in and reminding people why they were voted out or worse, giving people more reasons to dislike the previous Government.
    2. It makes the opposition debate the GFC and the essay (one defensive and the other attacking (of sorts). This latter point was probably the more important of the two with the first just a bonus.

    I don’t think Rudd expected was the bonus of Turnbull attempting to link the two in some convoluted fashion which really doesn’t make sense (eg Last nights 7.30 Report interview and his Orwellian comment in Parliament today).

    On top of all that is the political narrative for Rudd which, IMO was a tertiary consideration (or perhaps something of academic interest alone to Rudd). I’m sure he believes what was written but that doesn’t mean it’s a key agenda for him or something he wants to talk about endlessly; indeed Rudd has said very little publicly about the essay (all the talk has come from the media and the Libs) and focussed solely on the GC and stimulus. I must be getting more and more cynical because I reckon Rudd was just playing with Turnbull by releasing the Essay now. Turnbull took the bait and is talking about it. No one but us political junkies really care about what’s in the essay so everytime Turnbull mentions it he wastes air time and the attempt to link it to the GFC and stimulus package is just confusing. Good politics by Rudd me thinks.

  7. Mark

    Interesting, Dave55.

  8. Peter

    Fantastic smack down of the Dudd by Costello on Lateline. He was in fine form.

  9. Mark

    Gosh, Peter Costello is a clown.

  10. Nickws

    What would be interesting to know is how close to the ‘writing of the narrative’ was the Reserve Bank board.

    How much info about the stimulus package did Rudd & co. give to the board before today, did the board drop any hints about the 1% rate cut; or was it the case that both groups could easily read each other’s minds, no news had to be exchanged?

    (Wouldn’t it be nice to see the Coalition try to go after any ‘impropriety’, if only as it’d make things interesting…)

  11. hannah's dad

    Why is Costello on Lateline?
    I thought the COALition had a current Treasurer?

    I saw that he was on and was about to go and have a look when I was stuck by “why bother?’
    He’s a backbencher on his way to resigning.
    He has no access, I presume, to any documents on which to base an opinion, unlike Ministers and Shadow Ministers.
    Why should anyone want to listen to yesterday’s man?


  12. Paul Burns

    Turnbull’s persistent comparisons of Rudd with Whitlam are simply idiotic. I’m not very good at calculations but let me try. I was 27-30 when Whitlam was in power. Assuming most teenagers of thge early to mid 70s didn’t have a huge interest in politics, the youngest one had to be for Whitlam to impact was say, 21.So such a person would now be 55. So anyone under fifty-five probably wouldn’t quite get Viscount Turnbull’s comparison. That’s a hell of a lot of voters.

  13. pre-dawn leftist

    Costello still trying to take credit for the good times (which really had nothing to do with him) and trying to blame the ALP for the bad (which, again, have nothing to do with them).

    How stupid does he think we are?

  14. aj

    Ken, I hope your right. I think that once the US get their feet under them with their banks and investments start to flow, then things may quickly start turning around. Hopefully that will be soon.
    It’s really amazing that all this was caused by over selling of mortgages to people who really couldn’t afford it and the overselling of refinancing mortgages. Because of this the whole world is in recession.
    I was reading the Huffington Post and some US bailout banks are putting alot of their bailout monies in off shore accounts. It’s bloody criminal that no restrictions were put on these banks on how they use this money. They didn’t even have any requirements to pay it back.

  15. wbb

    Costello’s pathetic impersonation of a post-politics Keating has made my night.

    There is very little time for considered politics around the handling of the GFC. What’s got to be done has got to be done.

    The selling of it and any wedging of the opposition is all off the cuff. One good thing about the GFC is that party politics takes a back seat for a bit.

    Another good thing is that Rudd is now going to spend some money on a few things that are worth doing in their own right. House insulation is number one priority for GW – both abatement and adaptation. But never previously sexy enough for govts to properly attack.

  16. smokey

    As part of the working families and all that, before the election I was naive enough to think Rudd actually cared about me. Now I find I’m just a political pawn in his mind games with the opposition.

    But hey, I’ll take the money and jump for joy as I spend it to keep afloat renting in eastern Sydney, knowing that even the lowest interest rates in 40 years still leaves me unable to buy even a one bedroom flat here. Especially after the rent went up $20 a week last month.

    Oh well…

  17. Behemoth

    Some good tactical analysis there Dave55. It may not turn to be accurate but yer thinking crisper than most of the MSM polipundits with their short term margin calls.

    The fact folks are calling it a mini-budget I think highlights the fact that the world is now moving too fast for the stately tempo of annual and solemn Government presentations of the national shoebox stuffed with receipts, invoices, IOUs and few leftover greenbacks from the last OS jaunt.

    Time to turn it all over to a quantum computer, wisping off supercooled nitrogen fumes, somewhere deep deep underneath Black Mountain. Budgetnet!


  18. yeti

    Rudd’s “narrative” is transparently an effort by a class-A Neoliberal to rhetorically cover his arse now that Neoliberalism has fallen out of favour.

    I mean, doesn’t the ALP’s new name for the “DEPARTMENT OF FINANCE AND DEREGULATION” say it all? For heaven’s sake. KRudd’s ALP is the most disgusting bunch of Neoliberal Corpo-Right panderers in Australian Labor history.

  19. Dave55


    I probably am wrong in my assessment but the way that the Libs were referring to Labor as marxists and the constant Mao Little Red Book comments last year, Rudd had to realise that the essay would be like waving a red flag at a bull (pun entirely intended); Rudd is too smart not to have recognised that so all that was left to decide was when to release it. As a diversionary tactic, it was a master stroke – not because it distracted the public (they don’t give a s…) but because it distracted and muddled the message coming from the Libs. Anyway, I guess we’ll never find out if that was what Rudd intended unless he does a tell all book after retirment but I’d like to think that there was some rat cunning in the timing.

  20. Geoff Robinson

    Turnbull has to support tax cuts because it unites the Liberal factions and conciliates the Howard lovers who regard him with suspicion. What is striking is the domiance on the ‘intellectual right’ of loopy nutters raving about 1968, the evils of the New deal, the coming hyper-inflation etc. There are many Liberal pragmatists and centrists but where is their voice?

  21. yeti

    ‘intellectual right’

    an oxymoron if I ever heard one

  22. media tracker

    “Empty” and the Party of No think they have laid down the gauntlet to the Government with their refusal to pass the stimulus package. Can I hear echoes from the past of “come in spinner”? I think so.

  23. David Irving (no relation)

    Ken, you’re right that Rudd is no Whitlam (more’s the pity), but he’s a hell of a lot more politically savvy, so he may actually achieve rather more than Whitlam did.

    Paul Burns, I was a bit younger than you when Whitlam was elected, and profoundly relieved, I can tell you. (No more concerns about the Barrel ‘o’ Death, for a start.)

  24. Ambigulous

    hannah’s paternal ancestor wrote: “Why is Costello on Lateline?
    I thought the COALition had a current Treasurer?”

    No, they have a Shadow Treasurer, because (hard to believe, I grant you) they are in OPPOSITION just at this present point in time.

    Unless you were subtly suggesting that Treasurer Wayne Swan is doing Viscount Turnbull’s bidding.

  25. hannah's dad

    Oops, lack of proof reading. I meant shadow.

    But I see the question, why Costello?, has been answered by events anyway. Costello is all over the media today apparently.

    Leadership challenge?

    Which is the hint I was trying to convey.
    Along with the suggestion that he was getting some help from the ABC.

  26. adrian

    Considerable help from the ABC. He was even quoted on the 7.45 radio news. Why is anything he says news?

  27. Ambigulous

    apologies, hannah’s dad 😉

  28. hannah's dad

    No worries mate, please imagine winkie thing back at ya.

  29. Ian McLaren

    GFC aside, the reality is that Kevin Rudd is as cunning as a shithouse rat and the Libs can’t handle it.

  30. Ambigulous

    semi-colon, hyphen, right curved bracket, mate

  31. jane

    Ken Lovell @ 5, I fear you could be right. It seems to me that what we’ve got at the moment is the phony recession. I hope we’re both wrong.

  32. smokey

    OMG!!!! The Libs are standing in the way of my big wad of cash (“stimulus”)….!!!!

    WTF? Where’s the fuckin noose?

    Good grief, their brain dead idiocy is astonishing.

    I can’t even remember at the first post why they were doing this. All I know is they’re standing in the way of my big wad of cash!

    Hang them I say!

    (I think I speak generally for all working families in saying that….) 🙂

    (PS, I’m serious people!)

    ……Yeah yeah ok I copy and pasted that from another post of mine somewhere else; it just means I feel strongly….