Rudd hell-bent on beating Whitlam: bad government

FOR more than 30 years the Whitlam government has been the benchmark for bad government in Australia.

FOR more than 30 years the Whitlam government has been the -- unsurpassable -- benchmark for bad government in Australia.

With its uniquely disastrous blend of ideology, arrogance, poor administrative process and fiscal extravagance and simple ineptitude.

Since 1975, many people and things have been characterised as the "worst since Whitlam", none "worse than". Not even the sorry, bumbling administration of Malcolm Fraser that followed.

And the one thing that bound Bob Hawke and Paul Keating so tightly together and drove their approach to government in 1983 was the determination not to end up as "Whitlam Mark II".

Now, however, Kevin Rudd seems embarked on challenging that benchmark. Arguably Rudd has already seized from Fraser -- or Keating as prime minister -- the claim to be the "worst since Whitlam", but there's a case to be made that he's on the way to, or has already become, the first to be "worse than".

That's a big, big call. Especially after the government's "go early, go hard, go households" coup in snatching the country from the jaws of the global recession, allowing Rudd and his Treasurer Wayne Swan (and economic guide and Treasury Secretary Ken Henry) to bask in the spotlight of world admiration and applause.

So what's the basis of my call? The fiscal stimulus -- or to give it its official Swan title, stimulus -- is actually part of my case against the Rudd government, but it's more the "filling" between the two truly totemic failures.

The $43billion National Broadband Network and the Carbon Pollution Reduction Scheme.

That is, of course, $43bn give or take the odd $10bn or $20bn.

Actually, despite what the good Senator Conroy -- Rex Connor Mark II -- suggests, it is those sums either way.

And despite the title, the CPRS has got nothing to do with "carbon pollution", but the reduction of life-enhancing carbon dioxide.

So why is this worse than everything that Whitlam threw at us? From disastrously inept ministerial governance and -- the real -- Connor and Khemlani, and on to the numbing 46 per cent increase in spending in the 1974 budget?

Well, the approach to the NBN makes everything in the Whitlam period look almost like a model of good governance.

Here we have a government prepared to spend $43bn on the 21st century national infrastructure project without having embarked on the most basic cost-benefit assessment.

And without having the slightest idea of what the most basic metrics could be or would have to be to make any sense of it. The very uncertainty of the figure is most damning of all.

Or perhaps the failure to ask even the most basic question of all -- is there any need for it? Beyond either the childish tantrum: Kevin wants, wants, wants an NBN now. Or the adolescent indulgence: well, everyone just has to have an NBN.

That's the big-picture absurdity, before you even begin to start on the process. Process?

What process?

Exactly.

The evidence extracted from Connor II -- sorry, Con-roy -- is that there was no formal departmental and cabinet process. Indeed it was an eerily similar "good idea at the time" between minister and prime minister replay of some of the original Connor and Whitlam extravaganzas. Further, it wasn't just process failure at the "good idea" level.

We embarked on a year-long exercise to tender for a $12bn FTTN -- fibre-to-the-node -- network; only to suddenly, and I do mean suddenly, announce we would instead build a $43bn (sic) FTTH -- fibre-to-the-home -- one. And launch an assault on a company, Telstra, which however well intentioned and even arguably necessary in the "national interest", was extraordinary and unprecedented. All without any discussion, far less assessment.

The best you could say about all this is that it was truly Whitlamistic. Both the Business Council and, even more tellingly, the Productivity Commission have utterly eviscerated the government's failure to do any assessment.

While Rudd might believe that the combination of Howard and Costello and China have bestowed on him and his government unlimited dollars to splash around, the laws of arithmetic bind him and deliver outcomes just as surely as they did Whitlam.

A dollar or $43bn spent on the NBN is a dollar or $43bn not spent on other infrastructure.

Like, the sort of infrastructure we actually need to ride the China/Asian boom. They're not coming here to buy the stuff moving at light speed over a future NBN, but the hard stuff you dig out of the ground.

So we have the said Henry extolling a golden future built on the new resources boom while his pupil and master pours upwards of $60bn of our still precious savings into enabling fast movie downloads and building school halls. Plaques attached.

A crude mechanistic Keynesianism informs both Henry's advice and analysis. The latter to justify the former.

So the "go hard, go early, etc" prompted the succession of multi-billion dollar spending packages -- no different in substance to Keynes's original "dig holes and fill them up again" advice.

With the "advice" validated by a mechanistic Keynesian calculation that it converted what would otherwise have been 1.3 per cent negative growth in GDP over the 2008-09 year into a positive 0.6per cent.

I tend to the sceptical. That sort of crude Keynesianism might have had validity in the world of Henry's youth. In the complex dynamics of today the relationships are much less reliable.

But whatever might be the truth of allocating the gains between stimulus, the big rate cuts and China, the undeniable reality is the public debt that we emerge with. If it really 'twere for nothing, it would be bad enough.

If it's on the wrong infrastructure for our China-driven 21st century future, it is so much worse. What arguably takes Rudd beyond being merely Whitlam Mark II is the CPRS -- a direct and all-pervasive attack on the very foundation, not just of our national prosperity, but our very existence.

Quite apart from the devastating irony, it is exactly what we are selling and propose to sell much more of to China. Dr Steve Running, a co-author of the UN's Intergovernmental Panel on Climate Change, said this week that "if the US passed a cap and trade (their CPRS) and other countries did not, it wouldn't work. It would ruin the US economy and it wouldn't save the climate either".

This is the US, which has nothing like our investment in carbon and has actually embraced, at least to some extent, the nuclear power forbidden by the Rudd government.

Rudd wants to be the only developed country to go to Copenhagen with a mandatory carbon dioxide scheme. A sort of collective insanity seems to have engulfed the government. A seemingly trance-like desire to embrace national suicide.

At least it will finally free Gough Whitlam from his legacy.