The Forgotten Elephant

Percy Allan, president of the Australian Institute of Public Administration and former head of the NSW Treasury, had some choice words to say about the NBN yesterday.  The project seems to have avoided the headlines in recent times, slipping somewhat under the radar.

That is regrettable.  Such a huge investment of taxpayers' money - the biggest single government expenditure in Australian history - should be subject to the most intense of scrutiny.  Mr. Allan would seem to agree:

"That choice might be to spend $36 billion ripping out copper wire and disconnecting Foxtel cables and starting afresh, which is the proposition we are facing.  But had they examined the need, examined options and consulted they might have discovered cheaper ways to fill the need."

"If a lower than expected proportion of people end up subscribing to it because they don't want to pay Rolls-Royce prices for a Rolls-Royce service, this thing is going to be a financial disaster - watch public opinion then."

Mr. Allan suggests that the Labor Party's image is at stake, not just now, but for many years to come.  The party already suffers from the impression that it is profligate - a stigma that has lasted since the Whitlam government of the 1970s.

Mr. Whitlam may be remembered fondly by many people, but his legacy has contributed significantly to the lingering public impression that conservatives are by default better economic managers.  His government continues to haunt the Labor Party even now, four decades after it left office.

Memories fade, and that impression of profligacy will weaken, with time - provided that Labor consistently bucks the stereotype.  The Rudd and Gillard governments have thus far failed in this regard - and if the NBN goes pear shaped, then Labor will struggle for fiscal credibility for decades to come yet.

Premature Predictions

Many are asking whether Labor's current electoral struggles are a sign that the party is finished as a force that can win government in its own right.  There is undeniably a trend away from Labor across the entire nation at the moment - crushing defeats in Queensland and NSW, further losses in Victoria and WA, and struggling governments in SA and Tasmania are all testament to this fact. Federal Labor is limping along with a primary vote in the twenties.

The party's recent woes - all the more remarkable considering that Labor held power in all states, and federally, just four years ago - have led a number of analysts to assert that it can effectively no longer win power without allying itself to the Greens.  The nation's oldest political party is hamstrung, bleeding votes profusely from both flanks as it struggles to unite its traditional working class base with the more urban, intellectual hard left.

The Labor Party certainly faces a significant challenge to its identity, that much at least is undeniable.  But to suggest that it is finished as a party that can stand on its own two feet is horrendously premature at best.

Experts and commentators have always been drawn to doomsday scenarios, and the field of political punditry is no exception.  Human nature is full of such curiosities.

Look no further than the aftermath of President Barack Obama's sweeping victory in 2008.  There was at that time something of a consensus in the media that the GOP would be forced to undergo a dramatic transformation in order to maintain relevance for modern times.  Otherwise, the conventional wisdom said, Republicans would be swept away by the political zeitgeist.

It took no more than two years for the pendulum of public opinion to swing back the other way. Now Republicans control the House, are threatening to take the Senate, and have President Obama in a vulnerable position as he seeks re-election.

The lesson here is that such sweeping, hyperbolic predictions should be consumed with a fat grain of salt. Yes, the Labor Party is in the doldrums now, but public support has always ebbed and flowed. Given five years to recover, Labor may find itself threatening to reclaim power in a number of states.  The Greens may have receded back into relative irrelevance, and the pundits may have turned their attention to the Liberals' impending doom.

This is not to say that Labor should ignore the fundamental split in its base, far from it.  But the party must remember that elections are won in the centre ground - and swing voters are a fickle bunch.  The pendulum is always swinging.