By Pip Hunter
Having lost the "unlosable" 1993 federal election, the Liberal Party was bound to make the traditional leadership change sometime. Opinion polls show a surge of support since the election last month of the new leader Alexander Downer and deputy Peter Costello, the party's former Treasury and finance spokesperson. This is traditional on a change of leadership, at least when the new leaders are not well known and the public can maintain hope that they are not as bad as their predecessors.
It was widely recognised that John Hewson was too discredited to lead the Liberals to victory next time round. The Liberals under Downer hope to employ the strategy Hewson was too self-confident to employ in 1993: sit tight, don't say too much and allow a disillusioned electorate to kick out the incumbent government. They won't repeat Hewson's mistake of unveiling the nasty policies before an election.
Downer and Costello have said they want to win the hearts and minds of "middle" Australia — the space currently occupied by Labor. Pragmatism and common sense, not ideology, will secure the Liberal Party government, says Downer.
A broad "policy direction" statement — that is, not detailed policies — is not due for another month or so, but both Downer and Costello have indicated that no major economic policy changes are planned.
They have already decided on an election slogan, which they hope will win them disillusioned Labor voters: "It's time for a change". Heard that one somewhere before?
Some of the Liberals' frontbenchers have been a little slow to pick up on the new leadership's desire to soften the party's image. Bronwyn Bishop's outbursts on AIDS funding and tobacco advertising were an embarrassment that forced Downer to take the HIV/AIDS policy area away from his newly appointed health spokesperson.
Downer also distanced himself from frontbencher Chris Miles' homophobic statements. (Miles was a keynote speaker at a Festival of Light rally "No to Sodomy" in Burnie, Tasmania, last week.) According to Downer, the Coalition is "not in a position of telling people how to live their lives".
Because the ALP has adopted economic "rationalism" so completely, softening their image gives the Liberals the possibility, on some issues at least, of appearing to outflank Labor from its left. For instance, both Downer and Costello have made numerous statements about how the current economic upturn will benefit only a few.
The Liberals, they say, don't accept unemployment as a feature of the next decade: zero unemployment is their new goal. Downer has promised to retain the full-employment objective in the Reserve Bank's charter, reversing a controversial policy decision of the Coalition before the last election.
Downer and Costello have said that jobs and higher wages will be a fundamental part of their new election platform. A decade of the Accord has lowered wages, Downer noted accurately in an interview with the Australian recently. Downer said, "My great boast will be that we will offer higher wages through improved productivity and we'll provide guarantees of minimum wages and conditions ... We will be the high wage option for voters at the next election."
This is all, of course, flying pork. "Higher wages through improved productivity" is economic jargon for replacing a large part of the work force through automation and overwork of those who remain. It can produce nominally higher wages for a few if the employers are feeling generous, but it certainly won't reduce unemployment.
The new Liberal leaders have indicated that they may soften the provision of their old policy under which awards would be abolished unless employees and employers agreed to retain them. But their basic attitude to the union movement is best indicated by Costello's record of prosecuting common law actions against the Mudginberri meat workers and the Dollar Sweets confectioners in the 1980s.
Against ideology?
In an opinion column for the Australian before the leadership spill, former Liberal PM Malcolm Fraser argued strongly that the party needed a younger leadership team which would "make it plain that the well being of ordinary Australians is the objective of our policies, not the attachment to dogma or ideology".
Downer (like former NSW premier Nick Greiner) claims to be against ideology. This does not mean that the Liberals plan to abandon the ideology of economic "rationalism". It does mean that they will try to avoid using the term, because the public has learned through bitter experience (under Labor) what it really means.
Downer has made it clear that under his leadership the Liberal Party "will be unequivocally pro-business [and] we are unashamedly supporters of the private enterprise system". While some may wonder why he felt obliged to spell this out, it does reflect the huge task the Liberals have to recapture majority support from the business sector.
According to Malcolm Fraser, in the past decade the Liberals have lost a third of their membership. The party relies on donations from business which, since March 1993, have all but dried up. According to a Business Review Weekly poll taken in the June quarter, more than 70% of chief executives were dissatisfied with the Liberals' ability to challenge the government on economic management and business policy.
The Liberals' priority, according to an article in the May 30 BRW, has to be to win back support from business. This, it says, has to be done via a shift to "the middle ground". With the exception of the GST, it recommends the Liberals keep the policies outlined in Fightback!, including the privatisation of Telecom, the Commonwealth Bank and Qantas and cuts to the public sector.
Downer has already said that he intends to keep the basic policies contained in Fightback! (what else can he do when Labor is already implementing most of them?). He is also dangling a promise to repeal fringe benefits, capital gains and wholesale tax.
The danger for Downer and Costello is that the populist rhetoric can go too far and alienate business. When Downer announced on June 9 that the Liberals would impose new regulations on foreign investment, promising to "always have a preference for Australian investment where that is possible", the Financial Review's editorial cautioned him against mixing populism with policy. "Mr Downer has undoubtedly picked the issues of foreign investment as a potential vote winner. But it is dangerous politics."