Freshers urge hard-headed economic repair in a moral casing

There’s hopeful, there’s optimistic and then there’s Wayne Swan’s budget speech of 2012.

“It is these responsible decisions which return the budget to a $1.5 billion surplus in 2012-13,” announced the treasurer implausibly, “and growing every year after that.”

Three weeks ago, credit ratings agency Moody’s updated us on our journey towards deliverance from debt.

The ratio of government debt to gross domestic product increased from 19 per cent in 2010 to 36.1 per cent in June last year. By June next year, Moody’s forecasts, it will be 41 per cent. And by 2020 — which we should remind ourselves is barely four years away — it will be nudging 45 per cent.

By the time the Coalition next goes to the polls, the line “you started it” just isn’t going to wash. If Australia follows Moody’s grim trajectory — and there’s no conspicuous reason it won’t — the nation will be in a considerably more precarious economic condition in 2019 than it was in 2013, the year Tony Abbott assured voters he could be trusted “to get debt and deficit under control”.

Mitigating circumstances will count for little; voters will have limited patience for excuses. First-term governments may get the benefit of the doubt but second-term governments are judged on results, not intentions.

Governments have to walk the walk. Oppositions can get away with just talking the talk, a skill at which Bill Shorten has proved adept since he was all but written off by those in the know last Christmas.

For the thinkers in the ­Coalition partyroom, the big question now is not how to negotiate the politics of the Marriage Act or repeal section 18C of the Racial Discrimination Act but how to persuade an indifferent nation to live within its means. It is more than an economic imperative; it is a matter of political life and death. With a slim majority and three uncertain years ahead, the loss of the ­Coalition’s reputation for good economic management will mean the loss of government, probably for a considerable period.

The truth is slowly dawning among centre-right thinkers that they have neither the tools nor the persuasive power to do what needs to be done.

The arguments that underpinned the adjustments of the 1970s and 80s in the US, Britain, New Zealand and Australia don’t seem to cut it. Today’s challenges require a new set of craft skills.

To blame a feckless parliamentary opposition for blocking tens of billions of dollars in savings misses a more challenging point. If successive Coalition leaders had won hearts and minds, Labor’s position would be untenable, and the more delusional independents in the Senate would have been shown the door.

Opinion polls can be misleading. When 80 per cent of respondents say the government should put deficit reduction ahead of spending, they are giving a rational answer rather than an emotional one. They know in their head that debt matters, but they don’t yet feel it in their gut. All it proves is the truth of David Hume’s observations on human nature, that “reason alone can never be a ­motive to any action of the will”.

The media’s general apathy towards the central national challenge of our time — present company excepted — reflects the astuteness of editors. We might be staring at a fiscal train wreck, but it doesn’t yet get the juices flowing.

With hindsight, Abbott’s mistake was haste; the 2014 budget ­attempted to make structural changes without waiting for moral approval. Judging by Abbott’s recent speech to the Master Builders Association in Victoria, the lesson has not been wasted.

“There’s plenty of what we might do; but little of why we should do it,” he said. “The first challenge for a reforming government is not to publish a to-do list but to persuade people that change is worth it.”

The shuffle towards a more human approach to economic reform — one that focuses on people’s lives rather than abstracting accounting — is coming from both ends of the Liberal Party, as was evident last week when the class of 2016 began delivering their inaugural parliamentary speeches.

Jane Hume may have startled some of her colleagues by trying to rescue the concept of “social justice” from the redistributionists on the Left, but the Victorian senator is an economic hardhead.

The fight against punitive taxes, creeping overregulation, wasteful spending and ruinous ­national debt is vital, says Hume. “But they are not intrinsic to a better nation; they are purely instrumental. What we sometimes forget is that the Liberal Party’s central motivating purpose is not fighting against things; it is fighting for people.”

For Nicolle Flint, the South Australian conservative who fought off the populism of Nick Xenophon to win Boothby, good economic management is not merely a matter of bookkeeping, but justice. “We will not provide justice to future generations by leaving a burden of high debt,” she told parliament.

“We advance justice by encouraging less dependence on the state … Our task … is to protect what Menzies described as a great and special freedom: the freedom to do our best and to make that best better.”

Tim Wilson made a passionate plea for economic reform, followed by an equally passionate case for strengthening the social fabric, not dictated from Canberra but “from individuals coming together to form family, build community and, ultimately, country”.

Ted O’Brien, the welcome replacement for Clive Palmer as the member for Fairfax, shared his ­vision for resilient local communities, strong not-for-profit organisations and encouraging volun­teerism and philanthropy.

Some conservatives may mutter about the dangers of small-L liberals, but this is not a rerun of the 80s division between wets and dries. That battle has been fought and won. Yet economic rationalism cannot triumph unless it is driven by moral passion.

Nick Cater is executive director the Menzies Research Centre.