Showing posts with label leadership. Show all posts
Showing posts with label leadership. Show all posts

Monday, May 25, 2015

Blame pollies and media for low political standards

As intensified personal ambition has heightened competition between the parties, unwritten rules that certain subjects were off limits to the political contest have gone by the board.

The obvious example is immigration, Asian immigration in particular, and boat people.

For many years, both sides knew there was an ugly, xenophobic side of the Australian character and tacitly agreed not to do or say anything that would give it air.

Howard was part of the breakdown of that taboo, but perhaps a bigger cause was the arrival of radio shock-jocks who didn't care what demons they unleashed.

As politics has become more of a job for life, it's also become more of a science and less of an art, as parties have made more use of sample-based polling and the techniques of marketing, including sophisticated advertising and focus groups.

There was a time when politicians relied on their own contact with voters and their gut feelings to assess how their policies and performance were being received by the electorate.

These days, their polling and reports of focus group discussions leave them in no doubt about what voters are thinking on all topics.

Or, at least, leave them imagining there's no doubt. In truth, even quantitative polling can be misunderstood and qualitative  research from focus groups is so subjective it's notorious for the bum steers it can give.

Even so, it does seem the parties get very similar messages from their rival efforts.

When focus groups were introduced, the rationale was they would inform the parties on how to frame the policies they wanted to pursue in ways that made them more attractive to voters.

But when you are – or imagine yourself to be – fully informed on what the punters like and dislike, the temptation to let those preferences determine what policies you pursue must be almost irresistible.

What this seemingly less amateur and more scientific approach to politicking overlooks is the often paradoxical quality of human nature.

Tell me only what I want to hear and I begin to wonder whether I can trust you.

What exactly do you believe? Keep it wishy-washy and I wonder if you really believe anything.

Only ever tell me nice stuff and I wonder whether you're tough enough for the job.

Become a slave of focus group approval and you risk forgetting that, though I don't like the sound of your plan, I could be persuaded it's what the country needs.

In the old days, a politician like Fraser won elections because he was seen as a stern father the times called for, not because he was popular.

Another drawback of the more calculated approach to politics is governments' ever-increasing superficiality.

If, as all politicians believe, "the perception is the reality", why not focus on perceptions and appearances and let reality slide?

If the trains aren't running on time or people are waiting too long for elective surgery, why not measure these things in ways that are more favourable?

Why not favour responses to problems that are flashy or emotionally gratifying rather than boring but effective?

Why waste scarce resources on repairs and maintenance or renovation when you can build something new and be seen cutting the ribbon and making great progress?

When the number of problems or worthy causes far exceeds the revenue you've got to spend, why concentrate on those where your spending is likely to be most effective rather than slinging an inadequate sum to as many as possible and so mollify as many potential critics as possible?

Why give much to people such as the unemployed or single mothers for whom there's so little public sympathy?

When the public takes an irrational set against outsiders such as boat people, why not gratify their prejudices rather than defend the needy?

When people convince themselves they're struggling to keep up with the cost of living but the objective indicators say wages are rising faster than prices, why try to set them straight when it's so much easier to pretend to be sympathetic?

In short, why not reinforce prejudices and misperceptions rather than educate?

Why not follow the voters rather than lead them?

"There go the people. I must follow them for I am their leader." When memories and political terms are so short and punters so ungrateful, why not be short-sighted and risk averse?

All those temptations are reinforced by the media. It's the media that are overly preoccupied with and impressed by the new rather than the old, by the flashy and the emotionally gratifying, by what's on the surface rather than what's underneath, by the immediate rather than the prospective, by the irrational rather than the rational, by the sympathy-rousing case study rather than the systemic failure.

Politics has changed over the years but so, too, have the media. And they've both changed in ways that are mutually supportive. The two institutions have become more symbiotic.

There's no doubt the speeding up of the 24-hour news cycle is essentially the product of the media's ever-shortening attention span as part of the intensifying competition between the media's ever-proliferating mediums, including the advent of 24-hour news radio and TV channels.

But a lot of the dumbing down has been initiated by the politicians and their party machines for their own reasons. There is plenty of blame to be shared between the two institutions.

This edited extract from Gittins by Ross Gittins, published by Allen & Unwin, is out this week.

Monday, March 4, 2013

Hockey would be no soft touch as treasurer

If the Liberals take over the management of the economy in September - as seems likely - one advantage should be that big business becomes more realistic about the extent to which it imagines the government can solve its problems. And just to make sure, Joe Hockey, the opposition's treasury spokesman, gave business his first pep talk along those lines last week.

Hockey is much underestimated. If you've been watching you've seen him progressively donning the onerous responsibilities of the treasurership, the greatest of which is making it all add up.

He has used his - now less considerable - weight to avoid raising unrealistic expectations and to tone down overly generous promises. You can see him thinking: "I'm the guy who'll have to find a way to pay for all these commitments. We've made a huge fuss about the need to get the budget back to surplus and it'll be down to me to ensure it happens."

In opposition the temptation is to espouse populist solutions that sound good but don't work. As a former cabinet minister, Hockey knows it's hard for governments to get away with such wishful thinking. If you've been listening carefully you'll have noticed Hockey quietly taking an economic rationalist approach while others demonstrated their lack of economic nous.

Those who doubt the strength of Tony Abbott's economics team should note that Hockey would be backed by Senator Arthur Sinodinos, a former senior Treasury officer. I believe Sinodinos played a key part in formulating the "medium-term fiscal strategy" - "to maintain budget balance, on average, over the course of the economic cycle" - which the Libs developed when last in opposition.

If so, Sinodinos deserves induction to the fiscal hall of fame. There have been few more important or wiser contributions to good macro-management of our economy.

One of the greatest failings of the Rudd-Gillard government was the way, in an attempt to keep in with big business, it yielded to the temptation to modify its policies in response to lobbying from particular industries. The consequence was to annoy other industries and incite them to get in for their cut. But the more concessions business extracted from Labor, the more business lost respect for its judgment and self-discipline.

This generation of Labor doesn't seem to have learnt from its Hawke-Keating predecessor which, with some lapses, stuck to the line that the days of industry rent-seeking were over and that, in a well-functioning market economy, the main responsibility for solving an industry's problems rests with the industry.

Judging by his speech to a business audience last week, I suspect Hockey has learnt the lesson. He outlined the many ways in which he believed the Coalition's policies would be better for business than Labor's, but stopped well short of promising business everything its heart desired.

For instance, he discussed the case of "a significant manufacturer with similar operations in Australia and the United States", who complained that labour costs were much higher in Australia.

"Australian labour is expensive," Hockey said. "Is that a bad thing? No, not at all. We can compete with higher wages provided our output per worker is globally competitive.

"Higher household income means that our people have higher spending power. That provides a high standard of living and facilitates strong household consumption. And it benefits businesses because it provides a strong and expanding domestic market."

Australia's standard of living must not go backwards, he said. There was no national benefit in cutting wages. "What we do need to do is to ensure that our workers have the skills and knowledge that our industry needs. Education, training and retraining is a key step to unlock labour productivity gains. And we need to ensure that employment conditions can meet the varied and changing requirements of Australian workers and Australian businesses."

This was why, within the framework of the Fair Work Act, a Coalition government would look at "cautious, careful and responsible improvements to labour market regulation".

Hockey noted that part of the reason Australian wages seemed high relative to US wages was our high dollar, which "is impeding the competitiveness of Australian exporters and making life difficult for Australian producers.

"But on the other side of the coin," he said, "the high Australian dollar brings benefits for businesses which rely on imported goods, and for consumers who purchase cheaper imported products. So what could or should be done?"

He made two points in reply. First, there's no "correct" value for the dollar. Second, all movements in the currency create losers as well as winners. "Those who argue for a lower dollar are effectively arguing in favour of higher prices for consumers," he said.

A Coalition government "would need to be extremely cautious in tinkering with such a successful policy measure" as the freely floating dollar. "We would encourage businesses to view the high dollar as an opportunity. A high dollar means imports are cheap. Business should be utilising this period to import cutting-edge equipment and world-class technology."

Hockey is already sounding like a more forthright treasurer than the incumbent.

Monday, November 12, 2012

What business needs to learn about politics

The way big business sees it, economic reform has ground to a halt because the politicians on both sides have lost the political will to make the tough decisions. But I think big business must share the blame for the stalemate we've reached.

Business leaders have lost confidence in the Gillard government and, having concluded its days are numbered, are uncharacteristically willing to attack it in public. In private, though, most would doubt an Abbott government would be any more willing to grasp the nettle.

Consider the GST. Despite all the good sense Nick Greiner was talking last week about the need to fix it, both sides refuse even to discuss the topic. It was specifically excluded in the terms of reference for Ken Henry's "root and branch" review of the tax system (which didn't stop him proposing a similar tax with a different name).

It's not hard to see what the problem is. Each side is afraid that, if it showed the slightest interest in considering the topic, the other side will use this as a pretext to launch a scare campaign.

Or, consider the mining tax. Although it's not true the tax raised no revenue in its first quarter, it is true it raised less than expected, mainly because of the fall in commodity prices.

But prices have recovered from their lows in the first two months of the quarter. As well, the nature of the quarterly instalment process means collections are likely to pick up in later quarters.

Even so, it is true that the compromise tax Julia Gillard negotiated with the big three mining companies was both badly designed and too generous to the miners.

Why did she give in to them? Because the opposition had sided with the miners in opposing the original tax and, in their efforts to destroy the Rudd government, the big miners would have given the opposition huge funding in the 2010 election campaign.

One reason the miners were so opposed to the original tax was that the government caught them off guard with a strange tax they didn't understand. This would not have happened had Labor released the Henry report for discussion well before it made up its mind about which recommendations to accept, reject or modify.

So, why didn't it? Because it was so afraid the opposition would run a scare campaign claiming that Labor intended to implement all of Henry's most controversial proposals.

Next, consider company tax. For reasons I can't fathom, big business has its heart set on a cut in the company tax rate. Labor promised a cut of 2 percentage points, but the deal with the miners obliged it to reduce the cut to 1 point.

Then the combined opposition to this from the opposition and the Greens allowed Labor to renege completely. Although all previous cuts to the rate have been funded by the removal of concessions, big business can't agree on which concessions it's prepared to give up.

This has allowed Labor to shelve the idea. And I wouldn't hold my breath waiting for an Abbott government to find the revenue needed to fund a cut.

Finally, consider all the reform the Hawke-Keating government undertook during the 1980s and early '90s: deregulating the financial system, floating the dollar, phasing out import protection, deregulating more industries than you can remember and decentralising wage-fixing.

What do these reforms have in common? They went virtually unchallenged by the Liberal opposition of the day, under the dominant influence of John Howard and John Hewson.

Are you starting to see a pattern? All the reforms that aren't getting up (or, in the case of the mining tax, got badly botched) have become party-political footballs. And almost all the reforms we did get were bipartisan policy - with the GST and the carbon tax as the notable exceptions (although in both these cases the lack of bipartisanship led to inferior policy).

The point is, it's not so much unhappy voters governments fear, it's their political opponents seeking to take advantage of the voters' unhappiness.

What many business people don't understand about politics is the power of oppositions to influence what governments do and don't do. It's rare for governments to make controversial reforms when they know their opponents are waiting to pounce.

The bipartisan support for micro-economic reform lasted throughout the Hawke-Keating government's 13 years, but broke down after Paul Keating's defeat in 1996. Since then, both sides have gone for short-term political advantage at the expense of the nation's longer-term interests.

So, the first lesson big business needs to learn is that it's not enough to pressure the government of the day to show "political will". You must also pressure the opposition to resist the temptation to score cheap political points.

That's particularly the case when it's the opportunism of a Liberal opposition that is discouraging a Labor government from doing what it knows it should.

The second lesson is that big business won't get far until it abandons its code of honour among thieves. That is, when one industry goes into battle with the government to resist a new impost or get itself a special concession, all the other industries keep mum, even though they know the first industry is merely on the make.

Big business looked the other way as the three big miners connived with the opposition to destroy the Rudd government. Its reward was to have its precious cut in company tax snatched away.

Wednesday, June 16, 2010

Wanted: some belief in a leader

As I lay in bed one freezing morning lately I wished it would rain so I wouldn't have to get up and go jogging. But it's a free country - if I disliked the idea of going out into the cold so much, why didn't I just stay in bed? Because I knew if I wanted to be fit there was a small sacrifice involved. I also knew that when I make an effort I feel better than when I don't. All of us make similar decisions every day.

There's no law against wanting to have your cake and eat it - which is just as well because people do it all the time. This, I suspect, is a big part of Kevin Rudd's problem. When Tony Abbott began worrying people by branding the emissions trading scheme a great big new tax on everything and the public's enthusiasm for action on climate change began to slip, Rudd assumed we'd all be quietly relieved when he dropped the idea.

Instead, he's been amazed to discover that decision caused him to drop hugely in our esteem. Why? It's just a case of us wanting to have our cake and eat it. We wanted to worry about what the trading scheme might do to our cost of living but we also wanted action to reduce climate change.

Of course, we also wanted a leader who believed in things and would stick to his guns. A leader we could respect. A leader who, if he went on and on about something being really important, wouldn't just ditch it when the going got tough.

A big part of Rudd's problem is inexperience. As a result of that inexperience and bad advice he has seriously underestimated the electorate. He thought he could stay popular by appearing to pander to our whims.

Turns out we have no respect for a leader who merely gives us what we say we want. Somewhere inside us there is a semi-conscious understanding - probably born of our experience as children - that we need a leader who sometimes imposes on us things we don't fancy but he knows are for our own good.

The tyro politician's error is to assume success is simply about

never telling us anything we don't want to hear. That's the appearance but there's a deeper and more complex reality.

In the months before the 2007 election, Labor's focus groups detected public dissatisfaction over the rising cost of living. Rudd tried to capitalise on this disaffection by expressing great concern about the issue

and implying - without actually promising - there was something he could do about it.

This was the origin of two of the early setbacks in Rudd's term as Prime Minister, the failures of Fuel Watch and Grocery Watch, the first bits of evidence fostering the public's growing (if unfair) conviction that Rudd is all talk and no action.

Guess what? If you conduct focus groups today you'll find much dissatisfaction over the rising cost of living. It is, I suspect, an almost permanent state. The cost of living is always rising - but so too are wages and pensions. We have genuine cause for complaint only when the rise in prices is outstripping the rise in our incomes. And though that happens from time to time, over the past 10 or 15 years wages have grown a lot faster than prices.

So our unceasing complaint about the rising cost of living - always changing its focus, from the cost of petrol to interest rates to the price of electricity - is just another case of us wanting to have our cake and eat it. We wish we lived in a world where prices never rose but incomes rose as they do now. Dream on.

Our problem is not with the rising cost of living but with our efforts to keep up with the rising standard of living. We worry about every price rise because, in our unceasing attempt to keep up with the Joneses (who strive to keep up with us), we over-commit ourselves. When you spend all your income - perhaps more than your income - you always feel poor, always have trouble making ends meet, no matter how high your income.

Politicians who imagine this kind of foolish selfishness defines the electorate underrate us. We're looking for politicians who, in their concern to protect and advance our interests, demand more from us.

Rudd thinks we went cold on his emissions trading scheme because his opponents gave us an exaggerated opinion of what it would do to our cost of living. But Hugh Mackay, the noted social researcher, has a roughly opposite take: having been convinced by Rudd and others that our greenhouse gas emissions need to be reduced, we expected to be asked - even compelled - to change our behaviour.

When cities were running out of water, we had to stop using water in certain ways. Few resented this and almost all complied. The more we complied the more convinced we became of the seriousness of the problem and the need for strong action.

With climate change, however, no immediate demands were made on us. This was partly because of Rudd's misguided fear that making demands on us would make him unpopular.

Mackay makes the psychologist's point that our changes in attitude don't last unless they're quickly and strongly reinforced by a change in our actions (a truth that doesn't fit easily with economists' aversion to moralising, compulsion and even voluntary action, in favour of mere changes in prices).

Now, thanks to his great misstep in abandoning his trading scheme, Rudd lacks the moral authority to be believed even when he assures us the mining companies' claims that the resource tax would damage the economy are self-serving scaremongering.