The times they are a’ changin’ in PM’s favour

as posted on TheWest

3rd October 2008, 15:00 WST

It was a comment John Howard famously made a full 10 years before he became prime minister but it’s one that could well be echoing in the offices he vacated for his successor Kevin Rudd.

“The times will suit me,” Mr Howard told an Australian journalist over dinner in a posh restaurant in Washington DC in July 1986.

Back home, then treasurer Paul Keating had told Australians their country was on track to becoming a “banana republic”. The economy was going down the lavatory; the Aussie dollar had been devalued horribly; Australia had lost its AAA rating and the current account deficit was getting uncomfortably large.

Mr Howard’s comment proved untimely hubris, given that he was dumped as Liberal leader three years later. However, eventually the times did suit him and we rewarded his perseverance with 11½ years in the Lodge.

Mr Rudd hasn’t had to wait long at all for the times to suit him.

Under George Bush, a President who will not be remembered by history fondly, the US’s authority on world security, the economy and the environment is at its lowest ebb. Under this President, the US has given the world two unwinnable wars — Iraq and terror — made diplomatic unilateralism a laughing stock, set back action on climate change years and, to top it off, overseen the biggest collapse of the financial markets since the Great Depression.

The Wall Street implosion marks an ironic bookend to the Bush era of neo-conservatism. Absolute faith in the free market to regulate itself has proved disastrous, as much as the Iraq conflict.

As conservative French President Nicolas Sarkozy put it last week to world leaders in New York for the United Nations General Assembly, the “all-powerful market” and the laissez-faire attitudes that have underpinned it are dead.

An era of Big Government has begun, a period of government intervention and greater supervision of the markets. So has a period of multilateralism on world security and climate change.

If there’s one guy in Australia who is Big Government and multilateralism, it’s Kevin Rudd.

Although we love to lampoon the PM as the chief bureaucrat who’s hilariously travelled the world telling everyone how to run their show — NATO on the Afghanistan war, Asia on a new Asia-Pacific Community, China on Tibet, the US on financial regulation and the $US700 billion bailout of Wall Street and the world at large on nuclear disarmament, to name a few — momentum is building for some, if not all, of his ideas.

Where he seemed the precocious, hectoring new kid on the block a few months ago, he now is establishing himself as a potentially influential leader. What with Japan having a new PM and the US a new president next January, he’s also moving up the seniority list of allied leaders.

Of course there’s an inherent danger in Mr Rudd’s pursuit of middle power diplomacy on the world stage unhinging him at home but domestically some of his ideas are starting to gain traction and a heightened relevance. The May Budget, though criticised at the time by the commentariat for not living up to its scrooge publicity build-up, is now looking much smarter, thanks it seems to Wayne Swan’s hurried recalibration of deep cuts following a trip to Washington in March when the Treasurer was advised of the market dramas we’re now witnessing.

The establishment of the multi-billion-dollar infrastructure funds also looks much smarter and more forward-thinking than it did five months ago, given the prospect of recession hitting many of our trading partners and the hunger for our resources dissipating.

Plundering a nice back pocket kitty to redirect economic activity to local projects will have appeal when exports and jobs start sliding.

And at the Council of Australian Governments meeting in Perth yesterday he harnessed the growing public odium for cowboy financiers to push for uniform regulation of credit markets.

This comes from the same songbook he used for his speech to the UN last week which demanded tighter regulations for investment banks, insurance companies, hedge funds and financial clearing houses.

On domestic politics, the Rudd Government also has matured in its handling of interest rates and the banks.

Whereas it began the year trying to score some political points (Mr Swan saying the inflation genie was out of the bottle, for example), it has learnt to check its commentary with the responsibility of government.

Rather than take the populist tack and pressure the banks to pass on the full official interest rate cut expected next week, Mr Rudd and Mr Swan have taken a far more circumspect attitude, indicating that they would forgive the banks if they didn’t.

They’ve calculated that the populace, stretched though it is financially, will understand the need to keep Australia’s banking system strong even if this means extending their pain.

For a Labor Prime Minister and Labor Treasurer to defend the banks would normally be a subject of mirth. The fact it isn’t is a symptom of the times. But even if the times do suit Mr Rudd, problems remain.

He must find a way to show he loves walking the streets of Karratha and Gosnells as much as he does swanning about the corridors of power in London and New York.

All the various reviews and task forces that were set up soon after the election have to be acted upon.

As the furore around pensions policy has shown, sticking rigidly to a predetermined process while people are crying out for action is almost untenable.

You might have all the best policies and plans in the world, but they’re worthless if people stop listening because you’re not acting.

ANDREW PROBYN FEDERAL POLITICAL EDITOR

as posted on TheWest