BALANCING ACT

Correspondence

Paul Strangio

George Megalogenis’s thought-provoking Quarterly Essay resonates with the widely held view that 21st-century Australia is mired in policy inertia, with successive federal governments having had neither the imagination nor the foresight to devise a coherent plan for the economy or society. 

While Megalogenis is advocating for an invigorated state, he wisely indicates that this is an undertaking not solely for those situated at the apex of executive government. As with previous eras of major transformation (the 1940s and 1980s), this project needs to be “collaborative.” On those earlier occasions, “strong bonds of trust existed between politics, bureaucracy, and the press, between the representatives of labour, capital and welfare.” This may be a somewhat rose-tinted view of the politics of those times, but the fundamental point stands. Meaningful and enduring reform is more likely to spring from distributed leadership and a community of ideas rather than the centralised decision-making favoured by recent prime ministers. As such, it is a little incongruous that the essay ultimately places so much weight on whether Malcolm Turnbull is the leader who can propel Australia towards the desired reconstruction (“He has to author a new model and run a long-term government”). 

Megalogenis notes that for Turnbull and the Liberals, embracing an activist state means defying their natural philosophical instincts – an inversion of Labor’s support for market economics in the 1980s. On the other hand, though Megalogenis doesn’t draw this connection, the logic of his analysis is that the policy cycle is gravitating in a direction more compatible with Labor traditions. He does observe that of recent prime ministers, the only one “who seriously tried to find a way out of the [policy] impasse was Rudd, but he lost focus after the global financial crisis.” My view is that it was under Julia Gillard’s leadership that Labor showed the most resolve in pursuing a persuasive post-market program. The ingredients included a carbon tax (accelerating the transition to a post-carbon economy will surely be integral to any significant future reform project); a needs-based education funding model; the National Disability Insurance Scheme (renewing the social contract); and the National Broadband Network. The politics, however, were hopelessly loaded against Gillard and she showed a frustrating incapacity to articulate how the aforementioned elements constituted a cohesive agenda.

To my mind, one of the most interesting aspects of Balancing Act is the way in which Megalogenis uses history as a reference point and is alive to past policy cycles. He suggests that what Australia needs is a paradigm shift equivalent to two previous policy turning points: the post-war reconstruction of the 1940s, and the 1980s market liberalisation. It is a point worth developing. There is some intriguing North American political science literature that analyses the rise and fall of policy regimes and examines how they correlate with, and help determine, the cycles of (presidential) politics. We can discern something roughly similar when we reflect upon the patterns of twentieth-century Australia. The interwar period has long been recognised as one marked by political stasis and policy stagnation. A new order had to await the election of the Curtin government, its senior members steeled, as Megalogenis observes, by the abject experience of Jim Scullin’s Depression-era Labor administration. They also harnessed new (Keynesian-inspired) ideas and strengthened institutional arrangements through the recruitment of “experts” to the heart of government and by collaborating with an invigorated public service to usher in the managed economy. In turn, that model was consolidated during the long boom presided over by Robert Menzies. 

By the late 1960s, however, the post-war policy settlement came under strain as international financial arrangements fractured and domestic economic disorder grew. Australian politics entered another period of instability and policy flux, with governments either clinging to established verities or pre-emptively seeking a fresh direction at a point when conditions were not yet fully ripe. It was, of course, the Hawke–Keating Labor government, learning from the chaos of the Whitlam years, but also benefiting from the gestation of deregulatory ideas and the maturing of institutional innovations begun under its Labor predecessor, that instigated a new market-based policy settlement in the 1980s. This was entrenched in the early years of John Howard’s prime ministership. Since the early 2000s, however, there have been signs of regime decay, manifested in a return to policy complacency (Megalogenis is biting about the negligence of Howard’s latter terms), the proliferation of intractable problems and an outbreak of political skittishness, set against the background of increased global uncertainty. 

Needless to say, the notion of large-scale policy cycles cannot by itself account for recent political upheavals and policy confusion (the altered media landscape, party decline and institutional disequilibrium are clearly contributing), but nor is it irrelevant. Policy cycles can indeed help us understand why opportunities for governments and their leaders wax and wane over time: they are not all created equal. In any case, we should be grateful to George Megalogenis for challenging us to look beyond the existing (declining) status quo and for his brave intuition of the coming policy wave. 

Paul Strangio

Paul Strangio is an associate professor of politics at Monash University. His most recent book is Settling the Office: The Australian Prime Ministership from Federation to Reconstruction (co-authored with Paul ’t Hart and James Walter).