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What is going on with the Abbott Government?

November 29, 2013

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The following article is by Geoff Kitney and originally appeared at the Australian Financial Review

The alarm bells about the Abbott government are becoming deafening. And they are ringing around the world. What started as a rumble in Jakarta is now echoing through the capitals of every nation which has any dealings with Australia.

And it’s not hard to imagine that the first question being asked about Abbott’s Australia is: “What on earth is going on?”

What is happening is that a dramatic re-positioning of the way Australia relates to the rest of the world is under way.

A new ideology is being applied by Tony Abbott and those with most influence on his thinking. And it is now clear that Joe Hockey is not one of those people.

Hockey’s shamefaced appearance to announce that he had decided to reject the US bid for GrainCorp and saying that one of the reasons was that it was “not popular” was a jaw-dropping political moment, comparable with Christopher Pyne’s po-faced appearance to announce the ditching of the Gonski education reforms and declaring that this was not a broken promise.

If popular support is a new condition for foreign investment Chinese investors need not bother applying.

It took a while, but we are now seeing the true colours of Abbottism. For those who expected an Abbott administration to resume where the Howard government left off, what we are now seeing will be a surprise.

This is a completely new brand of conservative politics.

The new “brand Australia” that the Abbott government is presenting to the world is neo-conservative nationalism, with a populist twist.

HOCKEY SHOULD BE SQUIRMING

For those trying to understand the politics of the GrainCorp decision, there are two reference points which explain it. They were provided by the National Party and the Greens.

Both were effusive in their praise of the decision, which they said protected Australia’s “national interests”.

Hockey should be squirming at keeping such company. He knows this decision will raise big questions about his standing in the Abbott government. His reputation as a liberal reformer is now on the line.

This decision raises the stakes on Hockey’s handling of the decision on what to do with Qantas. Hockey says he favours allowing it to become majority foreign owned.

The odds on him persuading Abbott to allow this absolutely rational decision have now stretched to prohibitively against.

For foreign investors, the GrainCorp decision will be deeply puzzling.

The first big foreign investment decision of an “open for business” government is to slam the door. Hockey now faces a daunting task to explain what the exceptional circumstances were that forced him to block the sale.

But there is a wider economic national interest conundrum about the Abbott government’s emerging world view.

Australia’s most important regional relationships – Indonesia and with China – have entered dangerous territory since the Abbott government came to power.

In both cases, this has not been because of actions initiated by the government but by its responses to external events which have revealed its basic instincts.

And what this has revealed has been a worryingly narrow vision which seems to take too little heed of the economic dimensions of Australia’s foreign and strategic interests.

The crisis in Australia’s relationship with Indonesia has led to a boringly predictable and myopic domestic slanging match between the Abbott government’s media boosters and its critics which completely missed the main point.

Australia’s economic future is as important in the relationship with Indonesia as its security. A healthy, open relationship with an increasingly prosperous Indonesia will present huge economic opportunities for Australia.

That element of the relationship hardly gets noticed in the domestic political debate. But it is vastly more important than the issue of boat arrivals which has been allowed to poison Australian public attitudes towards Indonesia.

The elevation of the boat arrivals issue to the level of a threat to Australia’s security and the Abbott government’s go-it-alone, populist “sovereign borders” policy for dealing with it have deepened the gulf of misunderstanding in the relationship.

The danger of this gulf was emphasised in Abbott’s initial domestic-audience targeted response to Indonesia’s anger about the spying revelations.

The idea of Indonesia as an economic friend rather than a strategic threat is completely missing from the Australian domestic debate.

A wake-up call is desperately needed.

From this point of view, the issue of Australian spying and the attention is has brought to the troubled bilateral relationship might prove to be a good thing in the longer term if both sides take this as a wake-up call.

Abbott’s pre-election rhetoric about shifting Australia’s focus from “Geneva to Jakarta” will be meaningful if both sides can use the aftermath of the current crisis to make a new start on identifying and growing their shared interests.

If Abbott could have nominated the two foreign policy issues which he least wanted to blow up in his first few months in office, they would have been relations with Indonesia and China.

He’s got both. The Jakarta crisis is now in emergency management. China is an emergency still unfolding.

TIT-FOR-TAT DIPLOMATIC PROTESTS

The soaring tensions between China, Japan and the United States over China’s muscular assertion of its ownership of the disputed islands in the East China Sea have spread to our relationship with China.

The tit-for-tat diplomatic protests between Canberra and Beijing in recent days have confirmed that China sees Australia as a US proxy.

Abbott has defended Australia’s protest to Beijing as an assertion of Australia’s “values and interest”.

The use of the word “values” will be especially noted in Beijing: It’s a strong echo of the US conservative language about why China is a strategic opponent.

This will have consequences.

At the very least, it will raise the political stakes in efforts to finalise an Australia-China free trade agreement.

But if the tensions between China, Japan and the US run out of control – which is now a real danger – the consequences could be far graver.

Running the country is getting tougher, faster for the Abbott government.

 

 

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30 Comments leave one →
  1. November 29, 2013 4:04 pm

    During the election campaign, and in response to “Abbott detractors”, I recall hearing Abbott supporters saying “Abbott would grow into the PMs position”.

    This is indeed what is happening, and, unfortunately, we’re all suffering from his “growing pains”.

    What an education. http://cartoonmick.wordpress.com/editorial-political/#jp-carousel-802

    Cheers
    Mick

  2. egg permalink
    November 29, 2013 4:30 pm

    Hockey got it right on GrainCorp.

  3. November 29, 2013 4:44 pm

    GrainCorp decision: industry leaders fear Australia isn’t ‘open for business’

    http://www.theguardian.com/world/2013/nov/29/graincorp-decision-industry-leaders-fear-australia-isnt-open-for-business?CMP=soc_568

  4. JohnB permalink
    November 29, 2013 4:56 pm

    The problem here is that the self righteous hacks of the left would have criticised the Graincorp decision, whichever way it went.

    Get over it.

  5. IPA permalink
    November 29, 2013 5:04 pm

    It’s hard to follow the arguments on the topic of foreign investment.The same people saying Qantas shouldn’t be open to further foreign investment are saying Graincorp should be sold off completely to foreign investors. What’s the difference? One’s some kind of an “icon” with a kangaroo as its emblem, and one isn’t?

  6. November 29, 2013 5:17 pm

    “The same people saying …”

    Who are these “same people?”

  7. IPA permalink
    November 29, 2013 5:27 pm

    ‘Who are these “same people?”’

    Labor:

    ON QANTAS: ‘Labor leader Bill Shorten said the party did not want to see a majority foreign ownership of Qantas. ”I and Labor believe that Qantas should stay in Australian hands,” he said.’

    ON GRAINCORP: ‘”Foreign investment decisions are controversial and difficult but a good treasurer makes the tough decisions,” Mr Bowen told reporters in Sydney. He said Mr Hockey should be explaining the need for foreign investment to create jobs in Australia.’

  8. Walrus permalink
    November 29, 2013 5:34 pm

    I’m more concerned about Warnambool Cheese……………..afterall someone did once say…………….”.Blessed are the chesemakers”

  9. Walrus permalink
    November 29, 2013 5:35 pm

    And ADM ( who wanted Graincorp) are hardly an upstanding corporate citizen.

  10. Walrus permalink
    November 29, 2013 5:35 pm

    Let’s just flog off the ABC and buy back Qantas ……………………… 🙂

  11. Walrus permalink
    November 29, 2013 5:37 pm

    Sorry IPA I believe Bill Shorten actually said:

    ”I and Labor believe that Qantas should stay in Trade Union hands,”

  12. IPA permalink
    November 29, 2013 5:39 pm

    😉

  13. egg permalink
    November 29, 2013 5:59 pm

    This is the bugbear that won’t go away.

    ‘Abbott has defended Australia’s protest to Beijing as an assertion of Australia’s “values and interest”. The use of the word “values” will be especially noted in Beijing: It’s a strong echo of the US conservative language about why China is a strategic opponent.

    ‘This will have consequences.

    ‘At the very least, it will raise the political stakes in efforts to finalise an Australia-China free trade agreement. But if the tensions between China, Japan and the US run out of control – which is now a real danger – the consequences could be far graver.’

    Kitney / Fin Review

  14. Walrus permalink
    November 29, 2013 6:22 pm

    “”””……………..‘This will have consequences.

    ‘At the very least, it will raise the political stakes in efforts to finalise an Australia-China free trade agreement……………..”

    Yes our diplomatic statements are far more powerful messages than the Yanks who sent two B52 bombers into the disputed airspace repeatedly opening and shutting their bomb bay doors (if we had any B52s which we dont).

    You really do have to laugh at some Fairfax journos

  15. egg permalink
    November 29, 2013 7:07 pm

    Good point, Walrus.

  16. Tom of Melbourne permalink
    November 29, 2013 7:13 pm

    Qantas is hamstrung by a combination of the traditional union handbrake on reform and an ownership structure that was designed for the political environment of the early 90s.

    Shorten has been part of the cabal of hacks that prevented Qantas from competing effectively with more modern start up airlines (who don’t employ apprentices and support local aerospace expertise)

  17. egg permalink
    November 30, 2013 2:01 pm

    ‘Hockey should be squirming at keeping such company. He knows this decision will raise big questions about his standing in the Abbott government. His reputation as a liberal reformer is now on the line.

    ‘This decision raises the stakes on Hockey’s handling of the decision on what to do with Qantas. Hockey says he favours allowing it to become majority foreign owned.’

    Hockey is correct in retaining GrainCorp in the national interest, while at the same time favouring Qantas be sold off to foreigners.

    Putting the Greens and Nats in the same basket (they are ‘effusive’ with the decision to keep GrainCorp primarily in Australian hands) its laying the early groundwork for a close political association.

    When the global warming scare evaporates the Greens will need to remain relevant and a return to good conservation practice, in cooperation with the Nats, is the only real option.

  18. egg permalink
    November 30, 2013 3:28 pm

    ‘The Abbott government, like its Labor predecessor, is struggling to come to terms with the new political and strategic reality in Asia. They want to believe that Asia can be fundamentally transformed economically, but remain completely unchanged strategically, with American power still calling all the shots.

    ‘Abbott’s deep-seated conservatism means he would dearly love that old order to last for ever. Hopefully his pragmatism will allow the harsh new reality to intrude. As we grow rich on China’s growing economy, we must learn to live with its growing power.’

    Hugh White / Guardian

  19. egg permalink
    November 30, 2013 5:54 pm

    ‘Angry investors in the US, growers in NSW, politicians and industry executives were for the first time during the year-long takeover saga in agreement: ADM blew it.

    “This reminds me of BHP and its [failed bid] for Potash Corp,” a US-based investor said on Friday.

    “ADM is the BHP of the ag world. They think that everything they do is amazing and that their shit don’t stink. They approached this with about as much political sensitivity as a bull in a china shop. How does one of the biggest political animals in Washington stuff this up?”

    Julie-Anne Sprague / Fin Review

  20. December 1, 2013 1:54 am

    Whats going on? Lies incompetence and the stark reality that having bulshitted their way into government… the jig is up….. Duds.

  21. egg permalink
    December 1, 2013 10:33 am

    ‘Whats going on?’

    Hockey is doing fine.

  22. egg permalink
    December 1, 2013 11:00 am

    Howes didn’t like Hockey’s decision, but what would he know?

    “We’ve just sent a massive signal that Australia is not interested in becoming the food bowl of Asia,” he said.

    “We’re not going to take advantage of the growing Asian middle class. We’re not going to transform our sectors. We’re going to be beholden to special interests, old Agrarian socialists in one part of the community that are resistant to change, change that actually in the long term would benefit those communities.

    “Now we have the proof in the pudding, only two weeks after parliamentary sittings, that this government isn’t going to emulate what happened under the Howard government, making those hard decisions to reform our economy, they are going to model themselves on the Fraser government.”

    – See more at: http://www.theaustralian.com.au/national-affairs/reform-vital-for-farmings-future-paul-howes/story-fn59niix-1226772280959#sthash.2wag0IyO.dpuf

  23. egg permalink
    December 1, 2013 3:49 pm

    ‘…the jig is up….. Duds.’

    Not so fast, Abbott needs to bring about a reshuffle after Xmas. Pyne should be sacked from the Ministry for sneering and Education given to Hunt.

  24. egg permalink
    December 1, 2013 4:00 pm

    And the Environment gig should be given to Dennis Jensen.

    We want a revolution and we want it now!

  25. Neil of Sydney permalink
    December 1, 2013 5:04 pm

    ” the jig is up….. Duds.”

    This is the normal comment from Labor supporters no matter how good/bad is a Coalition govt.

    Labor supporters would support a bad Labor party govt over a better Coalition govt.

  26. December 1, 2013 6:11 pm

    ‘ ‘ ‘ ‘ ‘This current Qantas management has a track record of speculative investments across the Asia-Pacific.’ ‘ ‘ ‘ ‘

    http://www.smh.com.au/business/aviation/taxpayers-must-pay-the-price-to-keep-qantas-says-joe-hockey-20131128-2ybgm.html#ixzz2m0rpAaHy

    The Polly`s should just dump the bullshit with qantas, let who`ever wants it, buy it. Now we don`t own the damn thing anyway, they just got rid of a shit-load of tech-jobs, let qantas fcuk-off so we don`t end up with an airline-welfare system like the auto-welfare system.

  27. egg permalink
    December 2, 2013 7:33 am

    Albo and Truss are running with high speed rail again.

  28. egg permalink
    December 6, 2013 8:14 am

    ‘HOLDEN has decided to end its Australian manufacturing operations but has postponed an announcement until next year, senior Coalition sources say.

    ‘The Australian understands that General Motors was poised to announce it was ending its Australian manufacturing operations in 2016 as early as yesterday, but a decision in Beijing the night before has delayed the decision.’

    Sarah Martin / Oz

  29. egg permalink
    December 6, 2013 10:00 am

    China could buy Holden and Qantas.

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