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John Quiggin

Libs need services rethink

John Quiggin Australian Financial Review

27 March 2008

The Liberal Party got a welcome boost a couple of weeks ago, when its most senior officeholder, Brisbane Lord Mayor Campbell Newman, was re-elected, and the party won a majority of wards in the City Council. The result was significant enough for Federal frontbencher Joe Hockey to describe it as an ‘emblematic moment’.

But a closer look at the Queensland local government election results suggests a less hopeful interpretation. Newman ran a presidential-style campaign, with little mention of his Liberal affiliation. And after an expensive campaign on the Gold Coast, the Liberal candidate for mayor got only 26 per cent of the vote, though a preference deal may still get him elected.

There is a more fundamental problem. Newman has marketed himself as “Can-do Campbell” with reference to his ambitious proposals to fix Brisbane’s transport problems with large-scale investment in roads, bridges and tunnels. It remains to be seen how well this program will work. However, a majority of Brisbane residents want these investments and Newman is clearly keen to provide them.

The problem for the Liberals is that at both state and national level voters want the government to provide services like health, education, environmental protection and income support. In his classic work Australia, published in the 1920s, Keith Hancock noted, rather caustically, that Australians view the state as ‘a vast public utility, devoted to the greatest good of the greatest number’. Labor obviously shares this view, and indeed Labor figures have quoted Hancock without any sense of irony.

By contrast, the Liberals are, at best, ambivalent. While they recognise the political imperative to support public services, they cannot bring themselves to like the idea. Ideological supporters of the free market dislike the idea of public provision and funding of services though they have proved unable to come up with workable alternatives.

Meanwhile, many in the party’s small business base view human services like health and education as a cost burden on the goods-producing sector of the economy, the only place they see real economic value being produced.

It has gradually been recognised that such views are politically untenable. In 2004, John Howard noted that ‘There is a desire on the part of the community for an investment in infrastructure and human resources and I think there has been a shift in attitude in the community on this, even among the most ardent economic rationalists.’, and responded with a wide range of expenditure proposals.

But Howard’s conversion was only skin deep. Having long held the view that expenditure projects waste taxpayers money to buy votes, he proceeded to act on it. Money was sprayed at every marginal seat and interest group, with projects designed far more on the basis of political calculation than cost-effectiveness. The billions of dollars spent in once-off discretionary grants were only the tip of the iceberg. The Mersey hospital takeover and the creation of a separate Federal TAFE system stand out as politically-driven boondoggles.

Labor is far from being invulnerable on the question of public services. A decade in which Labor has been dominant in every state and territory has produced plenty of examples of neglect and incompetence. But unless the Liberals can demonstrate genuine commitment to high-quality public services they will remain, at best, the B team, called in only when Labor needs a spell in opposition.

The first step towards a return to relevance would be to disown the culture warriors who provided most of the intellectual support for the failed policies of the Howard era. Their hostility to public sector workers, expressed in their typically vituperative language, undermines any attempt to present the Liberals as genuinely caring about human services.

But more than that, the Liberals need positive proposals that go beyond the point-scoring about policy failures that is an inevitable part of Opposition. Some indications of the way such an approach might be developed were evident in the last years of the Howard government, notably in the area of health policy.

After spending years in a futile attempt to undermine Medicare, Howard (and then health minister Tony Abbott) shifted to something that might be called “Universalism Plus Choice”. The new policy aimed at promoting universal access to bulk billing and public hospitals while also encouraging private health insurance.

Such an approach, adopted more generally could prove appealing to many voters, and allow the Liberals to present themselves as a credible alternative. But it will require more than the cosmetic adjustments in rhetoric we have seen so far.

John Quiggin is an Australian Research Council Federation Fellow in Economics and Political Science at the University of Queensland.

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