What should Australia expect from prime minister Tony Abbott?

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Before the Kevin and Julia show, there was the Tony and Malcolm show.Australia Flag Icon

The rivalry between the dueling camps of Labor prime minister Kevin Rudd and former Labor prime minister Julia Gillard is now legendary — Rudd came to power in November 2007 after waging a near-perfect campaign (‘Kevin 07’) that brought the Australian Labor Party back to power after over a decade in opposition.  But his deputy prime minister Julia Gillard became prime minister in June 2010 after Rudd’s parliamentary colleagues wearied of his leadership style.  Gillard led Labor to the narrowest of reelections in August 2010 in what remains a hung parliament.  Rudd, who returned to government as Gillard’s foreign minister shortly after the election, challenged Gillard for the Labor leadership in February 2012 — and lost.  But as Gillard’s poll standing deteriorated throughout 2013, Rudd’s supporters engineered another vote in June 2013, and so Rudd (not Gillard) is leading Labor into Australia’s election on Saturday.

What’s less well-known is that opposition leader Tony Abbott (pictured above) emerged as the leader of the Liberal Party (and the center-right Liberal/National Coalition) after engineering a leadership spill of his own in December 2009.  After former prime minister John Howard lost his seat in the 2007 election, the Liberals turned initially to Brendan Nelson, but finally to Malcolm Turnbull as its leader in 2008.  But when Turnbull pushed his party to support the Labor government’s carbon reduction scheme, Abbott challenged Turnbull and improbably won a 42-41 victory on the second ballot, giving the Liberals their fourth leader in three years.

It’s an understatement to say that Abbott has proven a hard sell to the Australian public — in some ways, Abbott is akin to the Barry Goldwater or even the Ronald Reagan of Australian governance, a conviction politician and a conservative’s conservative who will undoubtedly pull Australia to the right.

A staunch Catholic who once studied in seminary for a career in the church (nicknamed early in his career by the press as the ‘Mad Monk’), a boxer with plenty of appetite for aggression in Australia’s House of Representatives, and a conservative who once studied at Oxford on a Rhodes scholarship, Abbott is multifaceted and talented.  But there’s no doubt that he’s socially and economically more conservative than Turnbull, Howard or Malcolm Fraser (prime minister from 1975 to 1983).  Abbott also had more ties to the recently rejected Howard government than Turnbull, having served as employment minister from 1998 to 2003 and health minister from 2003 to 2007.  Australian voters remained too hesitant about Abbott to hand the government back to the Coalition in 2010, but just barely.  Today, the Coalition holds one more (72 to 71) seat than Labor in the  House of Representatives, but independents and the Australian Greens have provided the Gillard/Rudd government a 76-74 majority since 2010.  It’s a similar story in the Senate, where the Coalition already holds a 74 to 71 advantage over Labor, which governs with the support of nine Green senators.

Just as Rudd routinely garnered higher approval ratings than Gillard between 2010 and 2013, Turnbull posted higher ratings as well.  Commentators in early 2013 daydreamed over the possibility that both of Australia’s major parties would dump their unpopular leaders in favor of their more charismatic alternatives.

But while Rudd and Gillard plotted and schemed over leadership, dragging Labor’s government and Australia into what amounted to a personality contest, Turnbull refrained from challenging Abbott for the Liberal leadership.  The difference between the Labor approach and the Liberal approach is one reason why Abbott is a certain favorite to become Australia’s next prime minister.

Since returning as prime minister in June, Rudd has spent most of his time flailing — although a Newspoll survey showed Rudd’s Labor tied with Abbott’s Coalition as recently as July 8, Labor now trails the Coalition in the two-party preferred vote (i.e., after all third-party voter preferences have been distributed to Labor and the Coalition) by a 54% to 46% margin, according to the latest September 1 Newspoll survey.

But Rudd’s campaign has managed to do what even Gillard’s government could not — turn Abbott into a plausible prime minister.  For the first time in the campaign, more voters prefer Abbott as prime minister (43%) than prefer Rudd as prime minister (41%) — that’s an astounding turnaround, given that an early August poll showed that voters widely preferred Rudd to Abbott by a 47% to 33% margin.  Ironically, though Rudd was supposed to be Labor’s secret weapon in winning a third term in power, Abbott has so completely transformed his image through the course of the campaign that Rudd may now be saddled with the kind of landslide defeat that terrorized his Labor colleagues into sacking Gillard just three months ago.

If Abbott delivers the kind of victory that polls predict on Saturday, it will be in large part due to the self-destructive factional battles within Labor, but it will also have much to do with Abbott’s steady happy-warrior approach over the past four years.

So what will Abbott’s likely win mean for Australia as a matter of policy, beyond the presumable end to the instability of the Rudd-Gillard era?

Here’s a look at seven issues to keep an eye on in what’s become an increasingly likely Abbott government.

Asylum policy.  Rudd came to power with a plan to roll back the Howard government’s ‘Pacific solution,’ which diverted asylum seekers to camps in Papua New Guinea and Nauru.  But in the early years of Rudd’s government, the number of Afghans, Sri Lankans and others striving to reach Australia by boat increased dramatically.  Gillard tried unsuccessfully to implement several fixes on asylum policy before retreating to a form of Howard’s ‘Pacific solution.’ and Rudd, earlier this summer, announced a new plan whereby all asylum seekers will be turned back to Papua New Guinea and Nauru.  Rudd’s plan is even harsher than Howard’s solution, though, because if a migrant qualifies for asylum, he or she will be resettled in Papua New Guinea or Nauru, not in Australia.  During the campaign, Abbott  announced that his government will seek to provide that asylum seekers arriving by boat will only be offered temporary (and not permanent) visas, an even more hardline policy.  With Rudd’s recent embrace of a policy that resembles ‘Pacific solution’ on steroids, don’t expect an Abbott government to do anything less to discourage migrants arriving by boat.  Nonetheless, it is likely to remain a difficult issue and it will be among the trickiest policy problems facing Julie Bishop, who is likely to become foreign minister.

‘Debt and deficit’.  As Australia’s economy slows after over two decades of robust resource-fueled expansion, Australia’s government faces a A$30 billion (US$26 billion) budget deficit this year.  Abbott has sniped at Rudd for fiscal irresponsibility and Rudd has sniped that Abbott will cut funding for health care, education and infrastructure.  But it’s hard to believe that Abbott will embark on a massive George Osborne-style  austerity program.  Look for an Abbott government to work to improve Australia’s fiscal outlook gradually — most of Abbott’s cuts might ultimately compensate for the lost revenue if Abbott repeals the mining and carbon taxes or enacts his paid parental leave scheme.

Nonetheless, this year’s deficit amounts to around 1.9% of Australian GDP, and Australia’s public debt is around just 30% of GDP — that makes Australia fiscally healthier than the United States or much of Europe.  GDP growth is forecast to slow to just 2.5% this year and Australia’s 5.7% unemployment rate, however low, is almost higher than at any point in the last decade.  Joe Hockey, who will likely become Australia’s next treasurer, is on record that he would be hesitant to cut spending so long as unemployment is rising.  Hockey announced A$31 billion in cuts last week and another A$9 billion in cuts today chiefly from foreign aid spending.

Carbon regulation.  Rudd came to power in 2007 with the goal of passing a carbon trading scheme into law, and his failure to do so was one of the substantive reasons his colleagues sacked him in 2010 (just as Turnbull’s support for a carbon scheme led to his downfall as Liberal leader in 2009).  Gillard picked up the challenge and, with the support of the Australia Greens, passed a carbon pricing and trading scheme that began in July 2012.  The scheme requires Australian companies that produce more than 25,000 tons of carbon dioxide (or equivalent) per year, excepting agriculture and forestry, to pay A$23 per ton, a price that will rise to A$25.40 by mid-2015, with the price established by the market thereafter.  Under Gillard’s plan, huseholds with annual income under A$80,000 received a tax cut and additional benefits to offset the rising costs of energy related to the carbon scheme.

Abbott has proposed to scrap the entire scheme altogether.  Whether he has the votes to do so will depend on how poorly Labor fares on Saturday.  If Abbott win just a narrow majority, it will be difficult; if he win a larger majority, the carbon scheme is in real danger of repeal.

Chinese-Australian relations.  Though Rudd has been a thoughtful world thinker, speaks fluent Mandarin and is a student of Chinese history, he’s had a sometimes rocky relationship with Chinese officials as both prime minister and foreign minister.  Ultimately, both Rudd and Abbott support the military relationship that Australia enjoys with the United States.  Both support a free-trade agreement with China that’s been in the works for much of the past decade.  As the South China Morning Post reports today, Chinese officials hope that Abbott, despite little foreign policy experience, will emulate Abbott’s Liberal mentor, John Howard:

But strategic experts are pinning their hopes on Abbott emulating his political mentor, former Liberal Party prime minister John Howard. On Howard’s first visit to China as prime minister in 1997, looking out over the impressive and expanding Shanghai skyline from his hotel, he is said to have asked: “How long has this been going on?”  Hugh White, professor of strategic studies at the Australian National University, said Howard “got it” and acted to take Australia closer to China in the new millennium.

Abbott is likely to continue facilitating business ties with China while maintaining warm strategic and political ties with the United States, and that’s not incredibly different than the approach a Rudd-led Labor government would take.

Mining tax.  A tax on mining ‘super profits’ (the Mining Resource Rent Tax — or MRRT) from iron ore and coal companies is another Rudd-era campaign pledge that Gillard passed into law and that Abbott promises to repeal if elected.  Introduced in July 2012, it  levies a 30% tax on annual profits over A$75 million (around US$68.5 million).  It’s an important tax because mining represents around 30% of GDP and around 60% of Australia’s exports.  The Australian economy barely flinched in 2008 due to robust demand from the People’s Republic of China for Australian coal and iron, but as Chinese economic growth slows, Australia’s resources boom is coming under pressure.  Once projected to bring A$3 billion in additional revenue to Australia’s treasury, the MRRT is likely to raise just A$200 million in its first year of operation.  Look for Abbott and the Coalition to dismantle the MRRT very early in a new government.

Paid parental leave.  One of Abbott’s landmark policy pledges is to introduce a more robust paid parental leave scheme.  Under the Abbott plan, a new mother will receive a full replacement wage (of up to A$150,000 annually) for 26 weeks, a vast improvement over the current system that provides the minimum wage (A$622 weekly) for just 18 weeks.  Rudd and Labor critics have attacked it as an unduly expensive scheme that will require further cuts to other existing expenditures.  It’s one of the oddities of the Australian campaign that the center-right party is trying to introduce a new government benefit while the center-left party is criticizing it for being too expensive.  But the prioritization of Abbott’s scheme in the current election campaign lies in Gillard’s well-received anti-misogyny speech on the floor of the House of Representatives.  If Abbott succeeds in implementing a parental leave plan, it will be in large part because Gillard shamed Abbott into working harder to win the voters of Australian women.

Same-sex marriage.  Rudd announced in the first debate with Abbott that he would call a vote in Australia’s parliament within the first 100 days after reelection to legalize same-sex marriage.  Rudd himself is the first Australian prime minister to support marriage equality, he has made it a top issue in his reelection campaign, and he is responsible for enacting reforms in 2008 (with Coalition support) that provide ‘de facto partner’ rights to same-sex couples.  Although it’s uncertain that Rudd would be able to push through marriage equality, Abbott opposes same-sex marriage, so it’s even less likely that same-sex marriage will become a reality under a Coalition government.

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