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Abbott Agonistes: Year One for Australia’s Prime Minister

You know things aren’t going well for conservative Australian Prime Minister Tony Abbott when the Institute of Public Affairs (IPA) in Melbourne, the country’s most prominent free-market think tank and formerly Abbott’s biggest cheerleader, takes out a full-page advertisement in the Australian newspaper to criticize him. Published on August 8th, the ad quotes Abbott from a speech he gave at the think tank two years earlier: “Freedom of speech is an essential foundation of democracy.” Then it continues: “We agree, Prime Minister. That’s why we will fight to repeal section 18C of the Racial Discrimination Act. Even if you won’t.”

Ouch (and more on the act in a moment).

The IPA is run by John Roskam, a man with impeccable conservative bona fides who has been affiliated with the Liberal Party (Australia’s equivalent of America’s Republican Party) for decades—first as head of the Menzies Research Centre in Canberra, the capital (the center is named for Robert Menzies, longest-serving prime minister and one of the fathers of Australian conservatism) and then for the last ten years as executive director of the IPA.

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Roskam writes often and bitingly about politics, and can be seen frequently tangling with his intellectual opponents in televised debates, on radio, and at local, grassroots rallies. Under his leadership, the IPA has transformed from a sleepy think tank to a national powerhouse, home to some of the country’s most prominent public intellectuals, including, among others, Sinclair Davidson, a supply-side economist at RMIT University, in Melbourne; Tom Switzer, the founding editor of the Spectator Australia; and young James Paterson, the IPA’s director of development and communications and a formidable political commentator in his own right (and thought by many to be headed for a seat in Parliament). So when the IPA is taking public shots at Tony Abbott, it’s worth taking note.

 

Abbott was never considered as a Reagan-like fiscal hawk, but as more of a big-government, compassionate conservative in the mode of George W. Bush—something the IPA and other Liberal Party members hoped might change once he took office. In his 2009 book Battlelines, Abbott nodded to an almost libertarian view of government’s role in society, writing, “Government should be careful about getting too closely involved in the detail of people’s lives,” and adding, “Only where people can’t work things out on their own or in private groups should government consider whether it can help. Even then, wherever possible, it should encourage and empower people to continue to do as much as possible for themselves.”

Conservative enough; yet in the very same book, Abbott also pitched the idea of a “paid parental leave” scheme that would provide generous public benefits for mothers—something that conservatives like Roskam and even the Liberal Party’s ally, the rural-based National Party, recoiled against. Abbott’s rationale: “If business is expected not only to cover employees’ time off for sickness and personal leave but also to contribute to their retirement income, it’s not unreasonable to expect it also to bear the cost of modest maternity leave” through “a small general levy” on around three thousand of the country’s largest corporations. On the campaign trail, he promised to fund twenty-six weeks of leave for mothers, up to a salary of $150,000 (a figure which was later reduced to $100,000)—at a cost of $5.5 billion (dollar amounts refer to Australian dollars). The only major national party that supported the idea? The far-left Greens party.

Still, the IPA was not alone in its high hopes that Abbott would tack more to the right when he took office, given the fiscal mess he inherited from the Kevin Rudd and Julia Gillard Labor governments. Rudd spent Australia into its first fiscal deficit since 2001, going from a $19.7 billion surplus to a $32.1 billion deficit in a single year, and drove away foreign investment with a capricious mining tax, a carbon tax, and vast expansion of labor union power that drove up costs for employers, both domestic and foreign. For years, the Australian public was treated to reports of public-sector waste, fraud, and corruption, from Rudd’s one-hundred-and-fourteen-member delegation to the UN Climate Change Conference in Copenhagen in 2009, to Gillard’s $10 billion Clean Energy Finance Corporation, set up to funnel money to politically connected “green” companies, to a ill-designed home insulation program that was blamed for four deaths and almost two hundred home fires.

What’s more, Abbott won an overwhelming public mandate, amid record turnout, in September 2013 after campaigning against this record. His government won ninety of one hundred and fifty seats in the lower house, giving it a clear majority and dealing the Labor Party its biggest defeat in a century. In the Senate, however, the Liberals and their allies won only thirty-three seats, short of the thirty-nine-seat majority, while a raft of minor parties entered Parliament for the first time. It’s those parties, which include mining magnate Clive Palmer’s Palmer United Party, the Australian Motoring Enthusiast Party, and a handful of other senators who now hold the balance of power.

 

And it’s that political lineup that many commentators are blaming for Abbott’s reluctance—so far, at least—to tackle major reforms, because the prime minister has to satisfy the Senate’s minor parties to get his legislative agenda passed into law. Which brings us back to Section 18C of the Racial Discrimination Act as a case in point. In 1995, the Labor government amended the act, originally passed two decades earlier, in an effort to outlaw “racial vilification.” Its Orwellian text outlaws any statement that is “reasonably likely, in all the circumstances, to offend, insult, humiliate, or intimidate another person or a group of people” because of the “race, color, or national or ethnic origin of the other person or some or all of the people in the group.” It’s left up to judges to determine what is “reasonably likely” to offend someone.

Predictably, Section 18C has been wielded by the bench to silence political speech that judges don’t agree with. In 2010, for instance, nine fair-skinned Aboriginals (as they identified themselves) brought a class-action lawsuit against conservative columnist Andrew Bolt and the newspapers that published his work, the Herald Sun and the Weekly Times. Bolt had the temerity to point out that white-skinned, middle- and upper-class Australians were touting their “Aboriginal” heritage to take advantage of affirmative-action programs and competitions.

A good example: Anita Heiss, an associate professor of indigenous studies at Macquarie University, whose father was Austrian and whose mother was only part Aboriginal. Heiss, as Bolt wrote, “was raised in Sydney” and attended St. Clare’s College, yet claimed she was part of the Wiradjuri nation and has used her Aboriginal affiliations to advance her career. Bolt was careful not to accuse Heiss—or any of the other people he profiled—of racial “opportunism.” His main point: “This self-identification as Aboriginal strikes me as self-obsessed, and driven more by politics than by any racial reality.”

In another free country, this might be seen as thought-provoking journalism. Not in Australia. In 2011, Justice Mordecai Bromberg found the articles “reasonably likely to have an intimidatory effect on some fair-skinned Aboriginal people and in particular young Aboriginal persons or others with vulnerability in relation to their identity.”

In August 2012, then opposition leader Tony Abbott—in the IPA speech quoted in the newspaper ad, as it happens—promised to repeal Section 18C: “It ought to be inconceivable that a commentator offering an opinion should fall foul of the law rather than a wave of criticism. This is not a matter of agreeing or disagreeing with Bolt. It’s a matter of an expansive or a repressive view of the right to free speech.” But this August, as prime minister, Abbott retracted that pledge, calling it a “complication” to his policy agenda. Left-leaning groups had submitted a flood of negative comments to Canberra about the proposed legislation (three-quarters of the forty-one hundred submissions to the attorney general were negative, according to the Sydney Morning Herald). More importantly, Abbott wanted Muslim community groups and their political representatives to back new antiterrorism laws, in the wake of news that radical jihadists in Syria and other parts of the Middle East were recruiting and training Australians. It was a vain hope: only a few hours after Abbott announced the retraction of the free-speech legislation in the interest of “national unity,” Australia’s imams denounced the antiterrorism proposal. “These laws clearly target Muslims and they do so unjustly,” they wrote.

Conservatives were stunned. Human Rights Commissioner Tim Wilson (an IPA alum) tweeted: “Disturbed to hear the government has backed down on 18C and will keep offensive speech illegal. Very disturbed.” John Roskam, the IPA’s chief, wrote in the Australian Financial Review: “To say that many people, not the least some of Abbott’s strongest supporters, were astounded by these comments is an understatement. Deep shock is a better description of how many people felt.” In the ultimate insult, James Allan, an Australian law professor, wrote in the British Spectator: “As it is, you can’t help feeling that Tony Abbott is morphing into an Antipodean David Cameron.”

The uproar might not have been so strident had the Abbott government not failed on other fronts too. Shortly after taking office, Treasurer Joe Hockey rejected Archer Daniels Midland’s $3.4 billion bid for GrainCorp, a company that controls eighty-five percent of the bulk grain exported from eastern Australia, sending a chill through other investors thinking about investing in Australia after Labor’s defeat. Hockey offered only this explanation for his decision: “Given that the transition towards more robust competition continues and a more competitive network is still emerging, I consider that now is not the right time for a hundred percent foreign acquisition of this key Australian business.”

Hockey’s inaugural budget, released in May, was no more reassuring, proposing a fuel tax hike and a “temporary” levy of two percent on Australians with incomes above $180,000, combined with cuts to foreign aid and other parts of the bureaucracy, to balance the books over the next decade. But the real news is that despite such new taxes, spending will continue to rise in the future. Hockey’s plan decreases spending in the current fiscal year, compared to the year before, but would then raise outlays by $414.8 billion in 2014–15 to $475.4 billion by 2017. The plan also keeps government at the center of health decisions, such as through the creation of a new $20 billion Medical Research Future Fund, rather than encouraging private health care.

Conservatives are upset by Abbott’s bait-and-switch. The country’s longest-serving treasurer, Liberal Party member Peter Costello, dubbed the budget “all about the politics” and added, “The proposed tax levy has no economic benefit; it will detract from growth by reducing consumption.” Sinclair Davidson, the IPA economist, started a “broken promises” thread on his popular Catallaxy Files blog, and in one post listed ten separate instances, from 2010 through 2013, where Abbott promised not to raise taxes, if elected, such as this statement from May 2013: “Taxes will always be lower under a Coalition government.” So much for that.

 

Abbott’s short stint in office hasn’t been devoid of achievements. In July, the government voted to repeal the nation’s carbon tax, becoming the first major developed country to do so. Abbott had campaigned for years on a promise to repeal the tax, which, as the Wall Street Journal editorial page reported, raised Australian energy prices, “added A$9.90 to the average household’s weekly power bill,” and did absolutely nothing to reduce global emissions, given Australia’s small carbon footprint, relative to those of China and the United States. The prime minister pushed the repeal despite vehement opposition from the Labor and Green parties, and from the Australian Broadcasting Corporation, the national broadcaster that was a key supporter of the tax to begin with.

Abbott has also done well on the foreign affairs front, reacting quickly to the downing of Malaysia Airlines Flight 17 over eastern Ukraine, which killed twenty-eight Australians and eight permanent residents of Australia. He declared a day of mourning and immediately fingered Russia’s Vladimir Putin as ultimately culpable for putting sophisticated weaponry in the hands of the militants who shot down the plane—forcing President Obama to toughen his own tepid language about the Russian strongman. Abbott also succeeded in developing a closer military alliance with the US, and mending ties with neighbors such as Indonesia. He is also lending his support to the US-led effort to “degrade and ultimately destroy” the terror group Islamic State, also known as ISIS or ISIL, in Iraq and Syria.

But while he is viewed as a principled and prudent leader when it comes to foreign affairs, many conservatives I speak to Down Under are worried that they might have misjudged Abbott and his political priorities at home. The prime minister seems far more worried about opinion polls (the latest Newspoll has his Liberal-led ruling coalition trailing Labor by fifty-one percent to forty-nine percent) than in pushing ahead with a comprehensive reform agenda. What is Abbott’s view of Australia’s tax rates, which rank as some of the highest in the OECD? Is he willing to forge new trade deals? Why won’t he roll back the National Broadband Network, started by his predecessor but now proven to be a boondoggle, and outpaced by private technology? Is he committed to foreign investment all the time, or only when politically convenient? Why is he emphasizing the “fairness” of his budget, rather than talking about promoting economic growth and making the case for smaller government?

Abbott’s missteps may have something to do with the advisers he’s surrounded himself with. Treasurer Hockey, an economic interventionist who once argued for the Howard government to bail out the country’s second-largest insurer, is no believer in supply-side economics. The minister for communications, Malcolm Turnbull, would be just as comfortable in the Labor Party as in the Liberal Party. The years the national press spent labeling Abbott as a political extremist who can’t win the female vote may also have had an effect on the prime minister.

Abbott might do better if he elevated more conservative thinkers to strengthen his political spine. Senator Mathias Cormann, a Belgian immigrant, is ably serving as minister for finance. Scott Morrison, the minister for immigration and border control, is winning praise for his judicious handling of “boat people,” immigrants from neighboring countries. Abbott can also rely on Minister for Foreign Affairs Julie Bishop, a longtime Liberal stalwart who has fielded a spate of foreign crises with confidence and maturity. (She has done so well, in fact, that her name is being bandied about Canberra as an eventual successor to Abbott.)

Barring any big scandals, Abbott has another two years—and two budgets—before the next election is called. That’s more than enough time for him to initiate a midcourse correction and mull the kind of legacy he wants this Liberal-led government to leave. The Australian public has rewarded him for his strong stance against terrorism at home and abroad. But this much is clear: If he doesn’t use his political capital to make some real reforms between now and the next election, voters may not give him a second chance.

Mary Kissel is a Wall Street Journal editorial board member and host of Opinion Journal on WSJ Live.

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