Asia’s Week: Australian Political Shift Is Blowin’ in Wind

September 6, 2013 by  
Filed under Wind Energy Tips

English: Tony Abbott in 2010.

Tony Abbott in his last try for PM in 2010. (Photo credit: Wikipedia)

When Paul Keating, the former Australian PM and finance minister, appeared at the Forbes Global CEO Conference in Bali this week, he put on a brave face for the Labor Party he once helped to make a centrist governing force.  Yes, he hoped for the best for its incumbent standard bearer Kevin Rudd and his parliamentarians in Saturday’s long-awaited election, but if not…it has hope for a demographic revival. A return of the lucky country’s economic balance to the Eastern metropolises, from the resources-led boom of the less-populated parts over the last decade, “will affect the next election.”  So if Tony Abbott and his industry-friendly Liberal (conservative) coalition does win this one, as most observers now expect, it will have to get a grip on policies quickly or face its own comeuppance three years hence.

Part of a conservative mandate would involve righting Australia’s fiscal deficit, which has worsened under Labor’s “stimulus” policies, while at the same time curbing the natural-resource taxes that Labor has imposed.  As is generally true of right-leaning candidates the world over, Abbott has been scarce with specifics about how he will trim government.  (It turns out most in an electorate like the programs that seem to benefit them.) But pollsters find that isn’t going to keep the Liberals from tipping the scales on Saturday.  The Rupert Murdoch-led Australian press has fiercely attacked Rudd and Labor and, even though the Aussies have escaped much of the pullback now roiling the Asia-Pacific region around them, a perceptible majority seems ready to “throw the bums out.”

Keating and many of his fellow Asia-philes may be concerned about Rudd’s past identity as Anglospheric, likely to bring back former PM John Howard’s special relationship with the U.S. and Britain.  Although plenty of Aussies look back nostalgically on Howard’s long-running government that ended in late 2007, the nation has subsequently tightened its economic relationship with Asia and especially China. (Rudd is a Mandarin-speaker.) Ironically, it is to Asia that many of the Aussie resource investments and sales–the same ones that Keating sees as having moved the political balance–can be credited.  Also, the suddenly weaker Aussie dollar, which might in some sense be associated with a souring mood and Rudd’s undoing, can mostly be a goad to precious exports.

Abbott for the past several months has been extraordinarily careful not to seem pronounced in any direction, except to pick at Labor’s policy scabs, mostly its green-energy excesses. And he expressly tips his cap to Asia now, telling a recent interviewer that his first bilateral trips as PM would be to Indonesia and then to the other big Asian capitals–the Americans and Brits can wait.  It no doubt would warm many of the Indonesian hearts in attendance at the Forbes Bali summit to know of Abbott assigning top status to its immediate northern neighbor.  Relations between the two have not always been so keen.  And with the arrival of thousands of refugees by rickety boats to Australia being an issue in the looming vote, the Indonesian role as a transit point is likely to be a rub in need of smoothing.

But whether Abbott indeed crosses the post this time–he came up short in 2010–or whether Rudd is able to twist Australia’s preferential voting system (minor parties get assigned a ranking in ballots) into a squeaker comeback, the economic engines of emerging Asia are going to have more to do with the nation’s prospects in the years ahead than which party holds the levers in Canberra.  Right now some of those engines are sputtering.  China has slowed of its own re-design (and Keating, by the way, is among those of us expecting a deep pause). Indonesia and the rest of Southeast Asia are feeling the draft from a monetary policy shift in the U.S.  India is gasping from chronic political mismanagement.  Australia needs most of them to get back on track.

Whatever his qualms about Saturday’s outcome, Paul Keating sounds to be an optimist. The recent big investment cycle in Australia “should lead to big output…to a continued long prosperity.” Maybe enough so, one day, for Aussie voters to want some of that Labor largess again. But for now, any payoff is going to need help from Asian demand.  You don’t need to be enjoying a Bali breeze to know that.


Comments are closed.