EDITORIAL FRIDAY 13.02.09.
At last, the federal government’s $42 billion economic stimulus package has been passed by the Senate, allowing the plan to proceed. Although the debate over the plan has been completely overshadowed by the tragic events in Victoria, it has had its own measure of drama. It has been a high stakes political game in which the opposition has made a calculated gamble that may have appeared to be risky, but in fact has been a very successful strategy. The minor party and independent Senators have also played the game for political advantage, but of course the only way for them to walk away as winners was always going to involve eventually allowing the package to pass with whatever concessions they were able to extract from the government, otherwise there would have been no point.
Everybody agreed all along that a stimulus package is needed, including Malcolm Turnbull. The only argument was about the details such as how much to spend and on what. The brilliance of Malcolm Turnbull’s ploy is that it both delineates a point of difference with the government which is consistent with Liberal Party philosophy as well as sets the opposition up for the election campaign of 2010 when it might be expected that the global recession is still rampant, unemployment is higher, the deficit is deeper and the national debt is reaching epic proportions. In that scenario, Malcolm Turnbull will be able to stand in front of the people of Australia and say “I told you so,” all while knowing that if he had been in government at the time, he too would have produced a stimulus plan of similar proportions.
The real beauty of it is that if Australia manages to avoid recession, Mr. Turnbull can then claim that the Labor government over-reacted to the Global Financial Crisis and has plunged the nation into debt needlessly. When disaster is avoided, it is all too easy to believe that there was nothing to worry about in the first place, and that is a feeling which will only serve to substantiate Malcolm Turnbull’s claims. It will also reinforce once again the long standing perception that Labor governments cannot manage money, or the economy. Either way, there is absolutely no risk that the opposition can be blamed no matter what the outcome, because while they voted against the plan, they did so with the knowlege that it would ultimately be passed in some form with the support of the cross benchers.
Meanwhile, the government is now in a position to proceed with the plan and will no doubt continue to enjoy high approval ratings for some time to come. However, if this stimulus package, along with the forthcoming budget and any further stimulus packages fails to prevent recession, there will be a backlash. On the other side of the coin, if it works and recession is averted, the door is open for the opposition to embark upon the “I told you so” campaign. These are among the reasons why, as revealed yesterday, Kevin Rudd may be considering an early election. If he already suspects that the news is only going to get worse it would certainly seem to be an attractive proposition to go to the polls early before voters begin blaming him for the downturn.
It might look like Malcolm Turnbull made an unpopular decision, but in reality he has just pulled off an each way bet.