Don’t let the door hit your arse on the way out…
So Kevin Rudd has finally bowed out. Was any one else not surprised? I don’t know why they wait so long to do it. I think we all knew he wasn’t sticking around. It’s like that guy at the party who never knows when it’s time to leave. You’re doing the dishes and he’s looking in your fridge for more cheese.
And so as he packs his bags, it brings to the end a particularly interesting era of Australian politics – interesting in the way a train wreck is interesting – gory and macabre.
And as bubble head bows out there’s been a lot of rumination of how history will judge the Ruddster – and what his ‘legacy’ will be.
For my money, the biggest gift K-Rudd leaves behind is the current property boom, though I wouldn’t thank him for it. It wasn’t like he planned it. Rudd has locked in booming prices for the rest of the decade, but again, more by luck than skill or intent.
He pulled a Steven Bradbury on that one.
But to understand how that works, we’ve got to take it back to the beginning. The first of the K-Rudd legacies is the introduction of Presidential style politics to Australia.
If you remember Kevin 07, it wasn’t Liberal vs Labor. It was Liberal vs Kevin. And as much as Labor could make possible, Howard vs Kevin.
The Labor party had sensed that Howard had worn thin his welcome with the Australian public, and so the more they could make the election about him, the better. The only place you could see Howard’s face in that election was on Labor billboards.
But at the same time, Kevin had been carefully building his own media profile, and had successfully cultivated an image as a loveable nerd (no small feat in itself in a sports-mad country).
There were some in the Labor party who were already nervous about Rudd’s management style, but Labor had been out of office so long and they could taste victory. And so the Rudd juggernaut met the Howard Zepplin, and Labor romped it in.
Welcome to the Lodge, Mr President.
But this was a first for Australia. Howard was never presidential. He always looked a bit nervous talking before the crowds. Keating had the ego for it, but the public knew him as part of the Hawke-Keating dynamic duo.
Kevin was the first Australian president.
And so it will be interesting to see where we go from here. The last election was still very much defined as a clash between two presidential hopefuls.
But this shift has some interesting consequences. First, it elevates the leader into a unique position of power. The public were miffed when Gillard disposed Rudd. “Hang on. We didn’t vote Labor. We voted Kevin.” It’s not the party that has a mandate to govern. It’s the president.
But this also makes the leader uniquely responsible for any blunders of their government. When the MRRT went rouge, it was Rudd who copped it, even though Swan had designed it. And so I think we’ll see even more populist decision-making in the years to come, with the president keeping their hand in everything.
The second part of the legacy that’s worth noting is the entrenchment of Keynesian economic policy. When the GFC hit, Rudd made it clear that the government would spend as much as it takes to protect Australia.
Not on my watch, no sir!
And so Rudd dolled out the cash, and the public spent it, and it probably helped us avoid a recession or worse. (I do think Labor were a little under-credited for how they handled the GFC.)
But for a long while this kind of policy (from the throw-money-at-the-problem school of economics) was on the nose. Governments should butt out and let market forces do their thing.
So much for that.
And now our president’s are personally responsible for what happens to the economy, there’s no chance that Abbott or any PM over the next 20 years is going to sit back and let the market do a hatchet job on the economy.
And this brings me to the third legacy I want to point out. Rudd made housing a centre-piece of his GFC defence. He made it clear that he wasn’t going to let housing suffer the kind of correction that was happening in the US.
And so he increased the First Home Owner Grants and guaranteed the banks (which increased confidence, but also helped lower funding costs.)
Again, it’s impossible to know what would have happened if he hadn’t done this, but the consensus is that it played its part. Probably mostly by keeping Australia calm. A lot of people were looking at the US and saying Australia would be next. This could have sent people into self-fulfilling panic.
But Rudd lined the government squarely up behind housing, and the market kept it together.
And so this is the political reality that Abbott inherits from Rudd and Gillard. 1. Our presidents are now completely responsible for what happens in Australia. 2. If the economy looks shaky, our presidents have a green light to spend as much as they want. 3. Whatever you do, protect the housing market.
And this is one of the reasons why housing remains such a good bet. You’ve got a government (and a reasonably well cashed-up one by international standards) standing ready to defend prices and defend returns if needed.
Together with negative gearing and raft of other housing-friendly concessions, it shows you just how important – almost sacred – housing has become.
Now, you might wonder if this is altogether a good thing, but it doesn’t change the reality. And as I keep saying, don’t invest on how things should be, or how you would like them to be. Invest on the way things are.
And housing is a very, very special asset class. This is the reality.
Thank you Mr President.
danny says
very interesting and i certainly hope you are correct as i have 6 properties in south east queensland and i am waiting for them to go up in price so i can determine what i should do. i am hanging in there st the moment
Fran says
Hi Jon,
I don’t know, if it is the German in me, but I love your high quality and humorous style of writing. I enjoy every e-mail of yours because of it. The info of cause is top qual also and as you Aussies know we Germans are big on that, but I thought I’d let you know, we do love good humour, too. Thanks, Jon,
Best regards, Fran
Steven says
It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”Theodore Roosevelt
Andrew McQueen says
I’m not entirely convinced that it was Kevin alone that created this presidential style election campaigns we have now, I feel the way the media behaves has changed, and that has a big part in it. I also think it was John Howard who started this not Kevin Rudd though as you say he was not as successful at it.
In terms people being miffed about JG taking the throne when they felt they had voted for Kevin, I think that was mostly the result of a clever campaign by the liberals to work off people’s ignorance to the fact that it is perfectly legal for a party to elect a new PM, in order to make them hate the government (in fact the last 4 years of liberal opposition were a carefully devised hate campaign against labor designed to turn the people against them for character reasons rather than for performance reasons, something which I think is deplorable).
I also don’t believe that just because Rudd did this that all parties have to follow suit and represent themselves by the presidential format – it’s just that now that it has been introduced parties are purposefully keeping to it because they believe it is a winning formula, and the media helps to reinforce this.
If KRudd thought he was president, TAbbott believes he is god. He has taken the presidential style and put it on steroids! Just look at the way he is behaving – cutting back several government departments an putting them under the office of the prime minister, creating media black outs and telling his cabinet that no one is allowed to speak to the media unless it is personally approved by him. In short, this shit is getting much worse.
Lastly, I don’t believe that the current government specifically cares about housing, that is much more a labour concept of ‘supporting the Aussie battler’. It’s more that for a long while no government has really been game made too much of an intervention on the way things are because they don’t want to upset anyone, much that they might lose votes. A government of the day could for instance if they wanted drop the price of new land by 50% or more if they really truly wanted ‘housing affordability’ for lower income earners, but they don’t do it because existing home owners would loose value overnight and they would scream! It’s almost like the housing market has become a big corporation, you don’t want to mess with it, less you affect ‘the economy’.
Sigi Scherrer says
Reply to Andrew McQueen’s last paragraph: Andrew is quite right on that, but it is not as simple. It’s not the government that develops zoned residential land, it is the developers and they want to maximise profits. The size of the parcel of land is however determined by the councils, they want to maximise the rates input. Then there are environmental factors like no more rezoning approvals until the Lenthal dam is raised in Hervey Bay, QLD. Years ago Ballina NSW stopped rezoning 5 Acre lots giving reasons of that to be a waste of land resources. To lower land prices the governmant of the day would have to interfere in the market and that would take some courage almost suicidal to be dumped at the next elections by the many who would loose out in the market, the ones already in it..
Grant van Wingerden says
I also agree. I can’t for the life of me see why we voted the government out. We had a Triple A rating – no mean feat in today’s climate, low unemployment, low inflation, and yet still managed to maintain high wages and living conditions. I thought the voter totally dropped the ball this time…
On the other side, Abbott had only two ideas: stop the boats and address the “debt emergency”. He blew the second one out of the water by increasing debt exponentially, which is hypocritical, to say the least.
If our metrics are still as good three years on, I will be very surprised indeed.
Tom says
Well said Andrew!!!
My main criticism of Labour’s spending to avert catastrophe was that they should have put more emphasis on productive infrastructure. Personally, I am still benefiting greatly from having my ceiling insulated. The savings almost balance the cost increases in electricity. Solar power panel purchase subsidies have done a lot of good also, in reducing our coal dependency, although that was mainly a State effort. However, a lot of the handouts and other spending appeared aimlessly ad hoc and profligate. We should have had say 50/50 subsidies offers rather than straight handouts. Better targeting could have engendered a lot more benefit to the nation. The cash handouts went mainly to the banks, to pay off debt, rather than into the market. “- – That round silver dollar goes from hand to hand – – – ” as popularised by Clive P, would have generated GST each time it was spent. But, worried about the future, folks consolidated their positions, rather than spend – and who could blame them? Subsidies on productivity-generating, locally produced products, money-saving in their long-term effects, would have been more productive for the nation as a whole, (Note the tautology, intentionally produced!!!). This way, the money has to be spent in the local marketplace in order to get it. This guarantees that it gets circulated, generating GST and movement in the market.
Incidentally, this is the first time, as far as I can remember that Jon has, in his blogs, ventured into the realms of party politics.
Rod Northover says
No matter what happens in the world,I always ask myself.
Who is making the money from this
jill says
good on you kevin
The Ram says
Why are Abbott and Hockey copping it, they just get in to government and in two months expected to turn mud to gold. Last spring house prices did nothing change of govt and all of a sudden most non mining towns are seeing good growth, interest rates may be slightly lower, but the USA is continuing its stimulus efforts, hardly inspiring and counter productive to Australia’s growth which is reliant on a fall in the price of our dollar.
I suppose the same people who mock liberals also blame them for the massive redundancies occurring in Australia right now as well.
Every disaster takes time to cleanup, it would be sheer bloody mindedness to not give the current govt at least 6 months as a minimum to start weaving some sort of magic!
The RAM
Very funny article MR Giaan
Grant van Wingerden says
If there was a disaster to start with, The Ram, which there clearly wasn’t. If anything, the previous government performed a small miracle, with the Rudd stimulus package shielding us from the GFC. I don’t see one thing on the current government’s agenda that will have a similar positive effect. Cutting services and positions? Reducing the role of the CSIRO and going backwards on scientific breakthroughs, back pedaling on the positives of the Gonski review and risking retaliation from the states (even the Liberal states), pissing off our neighbours… I could go on. And all this in a couple of short months in office.
Well, you did ask!
Melanie says
I agree with Andrew McQueen, the current “presidential style” of politics has been coming at us since at least the turn of this century. Although as a general rule, political campaigns throughout the past century have always had a reasonable focus on the somewhat-charismatic leader of the party & their slogans of any particular era – whatever they feel will appeal to the Average Ignorant Joe.
Some appeal to fear; “Reds under the beds” & “Stop the Boats”, others to hope; “No Australian child will live in poverty by 1990” & “There will be no GST/carbon tax in the term of this government”.
It’s ALWAYS been a popularity contest in the end – whichever leader best represents the public face of their party & reassures the voting public of all the warm, fuzzy, BS ideas & intentions they have to reshape the country – WINS! It also pays to have the biggest media mogul on your side, to help shape opinion – Rupert’s allegiance to Kevin’07 helped hoist his profile then, while “Labor Fail” headlines helped rule the day for Abbott this time around. Hooray for “presidential democracy” in action!! 😀
Same spin, different day – only the delivery method has changed. As technological advancements in the information age have meant a shortening of the time frame from event-to-press, the public now expects immediate news from, or direct contact/tweets with, prominent people, rather than waiting for tomorrow’s paper. From pollies to sports & rock stars, the world swings on instant notifications & all the kudos & condemnation that goes with it! (Ahem – maybe Abbott’s social media press guys could take a moment to reflect on how NOT to start a war with another nation, due to some ill thought tweets about that nation’s leaders’ personal appearances?!.. :-/ )
So true, Grant van Wingerden – technically less than half the country voted for the current govt, as magical as our voting system is – it was preferences that got LNP home. First-past-the-post actually gave Labor the win – so now we all get to enjoy the austerity rollercoaster together!
To The Ram – all seasoned economists, bankers, investors & really, ANYONE with just a few brain cells to rub together, knew that our economy was actually in bloody good shape going into the election! But with the media machine on full-spin cycle, all sorts of fabulous headlines helped to drive home a very different picture of how poverty stricken we are as a nation, teetering on the edge of calamity & collapse – hell, QLD’s LNP Newman thought we were turning into Spain at any moment!! 😀 Oh the humanity!…
And yes the redundancies at the moment are directly caused by the conservatives, as it happens they are sacking everyone that breathes in the public service! But that’s OK too – as LNP QLD has been spending over a million bucks with employment agencies to hire back over half the staff that were sacked last year!.. Nothing like having the taxpayers pick up the tab on LNP’s massive budget efficiencies to remove “Labor Waste” = dig a hole, fill it in, dig a hole, fill it in….
So now at the end of my rant, I pause to reflect on Australia’s change of direction!
Besides the irritation of having a “leader” that can barely string a sentence together & has the charisma of a piranha, I wonder now about the legacy Abbott will leave us with in just a few short years…
A dodgy broadband network that will cost twice as much for half the result, over the life of the project & LNP are well aware of it, but will not bend? Boats that will still be coming because people are desperate, unless Tony’s torpedo’s start swimming (& I don’t mean him in his budgie smugglers)?.. Our debt ceiling raised to try & fill in the black hole of promises that can’t be kept? And perhaps best of all if they can swing it – the taxman’s hand diving into Average Ignorant Joe’s family home sale, to help pay for their pension after working til at least age 70, if they haven’t dropped dead before that – which God knows our leaders are hoping for – who wants to pay for people who have outlived their usefulness as taxpayers?!.. 😀
Meanwhile our pollies can still retire anytime with full benefits?…
To coin the line from this article – Don’t let the door hit your arse on the way out, Tony!
Tom says
Hear Hear Melanie,
Tony Abbott was really installed as a stop-gap Opposition leader. Following the Kevin 07 whitewash, everybody expected a three- or four-term Labour Government. None of the real leadership hopefuls and of their supporters in the Coalition wanted to waste their leadership potential, in opposition, for that length of time. Tony won by one vote. Guided by Howard and his advisers, Tony spent the whole of two terms on NEGATIVITY, with nothing constructive to say – ever!!!. Instead, he followed in the steps of his Jesuit teachers, who within the Church are categorised by there supposed motto of, “The end justifies the means!!!” or in our language, “Power at any price!!!” After all those years in Government and then six years in opposition, the only new policies he could come up with were negatives – tearing down what Labour had fought to construct. Cancelling out the past was far more important than the future of the nation. And while his tactics were formulated by his advisers, the policies were not the product of any collaborative Shadow Cabinet discussions. They were “Tony Thought Bubbles” foisted upon his colleagues by the consummate schoolyard bully. Each time Labour came up with an idea, Tony had to trump it. Unfortunately for Australia, his colleagues were scared of him and scared of showing ‘Disunity’. So, like timid school children, they followed meekly behind him. Tony could not acknowledge any good idea coming from Labour. Instead, he came up with a half-baked ideas like using our taxes to pay big polluters to reduce their emissions – – – of planting trees to soak up carbon dioxide – – – so that Tony the self-appointed hero of the Bush Fire Brigade could show his community spirit by fighting the fires – which would put the Carbon dioxide straight back into the atmosphere. Ever mindful of the plight of young families, Labour negotiated a fully funded universal scheme for paid maternity leave. This success riled Tony, who had to trump them by promising payment at the lady’s full, normal wage rate. There was no consultation with his finance Minister and Treasurer. Straight off the cuff, he made a public promise which poor old Joe, who is sure that he should be PM, partly because he can put three words into a sentence, has to try to balance the books. It looks as though they are prepared to double the national debt, cutting off their nose to spite their face. How inane can they get?
With six years in opposition, one would expect that the politicians and the party brains-trusts would have had some policies prepared, more so since it was pretty obvious that Labour had shot itself in the foot and would be handing over power. But NO!!! Nothing had been prepared. It took more than two months for Tony to call Parliament together.
Having opposed everything in opposition, he is enraged that Labour has the temerity of sticking to its guns, supporting the ideas and aspirations of those who stuck to Labour and voted for them in the election. He is finding that unlike his colleagues, his opponents will just not roll over and cowtow to his dictates. He is finding that a logical, reasoned argument, rather than bullying stand-over tactics are required in civilised negotiations – in both National & International politics!!! Ham-fisted & foot-in-mouth, Tony is probably pining to be once again leader of the opposition, where all he had to do was to be every man’s Mate, and put on a reflective safety vest, shake hands, smile a cheesy false grin and say NO!!!
One of the scary factors sufacing is the duplicity which is being displayed. During the election, he gave the people the impression that he was supporting some of Labour’s policies. Now it is emerging that he and Christopher were using well thought out weasel words, to intentionally mislead the public. Once again the coalition are resorting to distinguishing between “Core & Non-core Promises”
Unless he and his so-called team (of cowering lap dogs, not hearty Huskies) come up with something positive for the country, I give him twelve months!!! The Public will get to questioning; the press will get critical and his colleagues will get cold feet – seeing the light – AT LAST!!!
As you may gather, I have been a Jesuit-trained Catholic Australian worker for most of my life. I have little love of exploiters of people. I definitely despise duplicity!!! Vive La France! Vive Le Revolution!