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Henry Ergas

Liberals’ heart has been hollowed out

Henry Ergas
Illustration: Eric Lobbecke
Illustration: Eric Lobbecke

With the opinion polls showing no improvement in its prospects, any remaining optimists in the Coalition look increasingly like wishful sinkers.

The end, when it comes, will leave plenty of scope for recriminations; as ministers and members pack up their offices, blame is the one thing that will not be in short supply. The question, however, is to understand the broader forces at work.

At the most immediate level, the wreckage is merely the playing out of the crisis in Australian politics that began with Labor’s victory in 2007. Underpinning that victory was the electorate’s passionate love affair with Kevin Rudd: his approval ratings in the Australian Election Study topped even those of Bob Hawke in 1987, and easily exceeded the ratings that propelled John Howard to successive election wins.

But Rudd’s fall from grace, ­accentuated by Julia Gillard’s coup and the claims and counterclaims that surrounded it, ­destroyed Labor’s standing, and placed the Coalition in a position it never thought it would so rapidly achieve.

By the 2013 election, the ­approval ratings of Rudd and Gillard in the AES were at historic lows for outgoing prime ministers. However, what turned out to be even more important was that Tony Abbott’s ratings were only marginally better.

Indeed, until then no party leader had become prime minister with so scant a base of public support — nor could one have, other than by facing thoroughly discredited opponents.

Yet there was never any sign that the Coalition realised just how little political capital it had to draw on. Plagued from the outset by internal dissension and burdened with a ministry that often seemed not up to the job, its move into negative territory was swift and enduring, setting up the crisis that awaits.

However, all that only scratches the surface. Yes, the Coalition has made more than its fair share of mistakes; nonetheless, one might have expected the prospect of a Shorten Labor government to induce more concern than it has.

Labor is, after all, committed to the largest peacetime tax rises since Federation, its energy policy threatens to convert a disaster into a catastrophe and its industrial ­relations policy risks replicating, albeit in a more benign macro­economic environment, the worst ­errors of the Whitlam years.

Each of those could have sent shivers down voters’ spines. ­Instead, they have been greeted with remarkable insouciance, even among their likely victims.

Underlying that complacency is a longer-term shift in the positioning of the Australian electorate. Taking a 10-point scale, where zero is the extreme Left and 10 the far Right, Australian voters have shifted steadily leftward in recent years, with the electorate’s average positioning falling from 5.46 in 1986 to 4.91 in 2016. Entrenching that shift is the declining salience of economic issues, and most notably of concerns about inflation and unemployment, along with the perception that big business has become both more powerful and more prone to abuse the greater the power it has.

The move to the Left in Australia is consistent with trends overseas. According to the World Values Survey, voters in the major advanced democracies were about half a point further to the Left in 2006-09 than they were in 1990 — much as in Australia.

There is, however, a crucial difference between Australia and its peers. While voters in France, Germany, Sweden and Britain have moved Left on economic ­issues, they have moved even more sharply to the Right on cultural issues, and especially on ­immigration. Moreover, while economic issues have become less pressing, cultural issues have come to the forefront of the electoral battle: in 1980, European ­voters placed twice as much weight on economic as on cultural issues; by this decade, the gap had shrunk to a few percentage points.

The growing importance of cultural issues has proved devastating for the European centre-Left, which has struggled to retain its historic constituencies.

But there are few signs of any comparable change in Australia; on the contrary, the leftward move in cultural attitudes is at least as great as that on economic issues. Additionally, while the cultural shift to the Right in Europe has been among lower-income voters who traditionally backed the centre-Left, the cultural shift to the Left in Australia has been among the middle and higher-­income voters who formed the backbone of the centre-Right.

To make matters worse, demographic trends are not altering the Left-Right balance as they used to. Previously, voters moved to the Right as they grew older; that process, however, seems to have stalled. As for the new voters coming in through naturalisation, Labor has been far more effective at securing their vote, despite the fact that they often have little confidence in government and a strong preference for lower taxes.

The threat those trends, taken as a whole, pose to the Liberals is obvious. Nor is the threat limited to marginal seats: rather, the gap between the party’s positioning and that of its traditional electorate makes even formerly safe seats vulnerable to independents with a Left-leaning cultural agenda.

How many of those independents will succeed remains to be seen. What is certain is that dealing with them absorbs scarce funds that are badly needed in marginal seats. The risk, however, is that if those once solidly Liberal seats are lost, the party will be hollowed out for years to come.

The reality is that independents can focus all their efforts on meeting the narrowly defined needs of their constituencies. They are also less vulnerable than a parliamentarian from a major party would be to bearing the cost of the party’s errors. They can, as a result, be difficult to dislodge, making it harder for the Liberals to regain office. And with the party not looking like a winner, it will be even tougher to raise funds and ­attract new talent.

Labor will, understandably, view that scenario with glee. But the lack of a powerful challenger is a recipe for bad government. No party relishes the prospect of ­defeat; but a party that cannot be defeated will ultimately drown in the pool of its own mistakes.

As for the Liberals, Hegel’s aphorism comes to mind that “the owl of Minerva (the Roman goddess of wisdom) only spreads its wings with the falling of the dusk” — it is, in other words, only as an era draws to an end that we can see it in its totality and understand its lessons.

In Australia, unfortunately, the owl only seems to fly when it is knocked off its perch. That will happen soon enough. Perhaps then the wishful sinkers will, at last, wake up.

Henry Ergas
Henry ErgasColumnist

Henry Ergas AO is an economist who spent many years at the OECD in Paris before returning to Australia. He has taught at a number of universities, including Harvard's Kennedy School of Government, the University of Auckland and the École Nationale de la Statistique et de l'Administration Économique in Paris, served as Inaugural Professor of Infrastructure Economics at the University of Wollongong and worked as an adviser to companies and governments.

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Original URL: https://www.theaustralian.com.au/opinion/liberals-heart-has-been-hollowed-out/news-story/76ad2a2a049320268f7ae02901e8591d