Doubts increase about Tony Abbott's economic grasp

TONY Abbott has intensified doubts about his economic credentials and policy beliefs by leaving open all possible options for solutions to the manufacturing industry crisis.

The Opposition Leader is a victim of his political success. Having stolen much of the Labor base vote, Abbott is reluctant to pledge a firm position on manufacturing one way or another lest he forfeit his voting gains. He has, in fact, two positions. He says pro-market policy is preferred and "picking winners" is bad, but adds "on the other hand" that a "respectable case" for heavy manufacturing can be made on grounds of national security, economic diversity and avoiding shutting down industry that might be given an economic reprieve later.

Abbott's competing formulas are so general they sanction a Coalition government to do anything it wants on manufacturing. Abbott is resolutely pro-market yet leaves enough justification to be resolutely pro-interventionist. This enables competing advocates to take heart from his declarations.

The trouble is that Abbott only deepens the confusion about his economic values.

Abbott's speech is a mirror that reflects Australia's dilemmas. It testifies to a nation nervous about the economic outlook, unsure about policy solutions and divided about how to manage winners and losers from the terms-of-trade boom.

Abbott embodies the nation's ambivalence. With the public dismayed at the carbon tax and disillusioned by minority government, he is hedging his bets on manufacturing industry policy. In the process, he only intensifies the generic dilemma within the Coalition between support for the market and nostalgic attraction to ad hoc interventions.