Senator Graham has been a quiet man, publicly, since he resigned from the ministry in May. Last week, however, he gave a speech at the National Press Club to press gallery journalists. This is normally an off-the-record affair, but since Paul Keating used the same occasion to bucket his then leader, anyone speaking at it could reasonably expect their comments to be made public. Thus it was with Senator Richardson. His speech was less colourful and less personally directed, but its message was as important for the political survival of Paul Keating as Paul Keating’s was two year before. Essentially, Senator Richardson said it was not good enough for the Government to use negative scare tactics on the GST and industrial relations to win the next election. It must present a positive platform for a fifth term.
Senator Richardson is quite right. Though the polls indicate that Mr Keating has so far done well out of John Hewson’s messianic determination to lead his party across the Red Sea and into the promised land, it might not be enough. Voters, though mistrustful of Dr Hewson’s rigidity, his tax on the essentials of life and fearful of an industrial-relations climate where their jobs depend on a bosses whim, might still conclude next year that the messiah you don’t know is better than the devil you do. This is because economic conditions in Australia might get to such a pitiable state that desperate straws must be clutched at. In that environment scare tactics might not work because rational voters will conclude things cannot get any worse. Once negative scare tactics are removed the Government must look to presenting a positive program for a fifth term, because the alternative _ standing on its record _ is untenable for this Government.
Mr Keating has shown an ability to at least develop the rhetoric of new policies: the flag and the republic spring to mind. Of more importance, however, was the way he shifted from the zero-tariff position of the hardline economic rationalists. But despite the de-facto (if not de-jure) success of Phil Cleary, re-erecting tariff walls is no answer. Rather the Government must develop a detailed and intelligent industry-assistance policy.
Such a policy must not embrace inefficient tariff walls and must not be centred on oppressive regulation. Nor should it be founded on subsidies that reward the inefficient and stifle the vibrant new. Rather, the industry policy must recognise a nurturing role for the Government. The nurturing should take two forms. First, a recognition that the Government has neglected the upkeep of infrastructure and that greater spending on infrastructure was needed. This has been partly done in One Nation, but must be built upon. Secondly, the Government must give incentives (mostly in the form of initial tax breaks) to new industry. The tax would not be lost tax, because without the break the industry would not get off the ground to be taxed. The other form of incentive would be in government contribution to infrastructure costs.
It would require a recognition that the hardline anti-interventionism of the 1980s was misguided. It would also be an acknowledgment that other countries do it to considerable advantage, and it would not be silly for Australia to join them.
Australia’s balance of payments can only be fixed by producing more at home. It cannot be fixed by using high interest rates to stifle import demand. All that does is stifle job- and export-producing industries as well. If the polls are right, and Labor is a chance for a fifth term, it must not be a such an economically devastating term as its fourth.