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“Political turmoil cruels investment decisions”: but where? Islands Business 1 June 2012.

01/06/2012

What a headline about a Pacific country, from a reputable newspaper.

There were other equally strong statements.

“The country is in suspended animation at the moment and you can’t do anything”

” Their bare-faced determination to stay in power is just breathtaking”.

“Business wants to see stability in politics and stability in policy settings, so we can make long-term investment decisions”

“I think the country should call an early election and let the people decide”.

Ha ha ha.

You thought that these comments were about PNG or Fiji, didn’t you?

But no.

These were comments or quotes about vicious Australian politics in an article by Michael Smith and Jenny Wiggins, in The Weekend Financial Review article (of 26 May 2012), and the quotes were from Australian business movers and shakers.

But yes, these quotes easily apply also to PNG and Fiji.

Luckily for Australia, while the short term impacts may be similar, the long-term political outcomes will be different.

The snarling Australian political Divide

Outsiders like myself have been amazed at the brutal snarling nature of Australian politics that has unfolded over the last five months, with the Australian public appearing quite fed-up or quite blase.

First there was the month long media frenzy about Kevin Rudd’s challenge to Julia Gilllard as Prime Minister. That challenge eventually failed.

Then came the “Slipper affair” where the Speaker of the House was accused by an aide of sexual harassment, to be followed by allegations of misuse of tax-payers’ money.

The latest and still continuing frenzy is over the “Thompson affair”- where a Labour MP was accused of misusing large amounts of union funds (on prostitutes and his own election), with a Report by Fair Works Australia taking a breath-taking three years to come out.

These events in themselves were not surprising- they seem to happen all the time in politics.

But what was surprising was the daily frenzy with which the Opposition kept going after the Gillard government, and in particular Julia Gillard’s prime ministership, and the frenzy with which the media kept building up this news item.

Pushed on to the back-burner were far more nationally important issues which both the Opposition and the Media could have focused on, for the good of the country:

*the recent budget with its huge cuts on defence spending and foreign aid;
* the carbon tax issues and implications;
*the minerals tax issues and implications;
* problems posed by a “two-speed” economy or the “resource curse”
*the scandalous under-development of Aboriginal and Torres Straits Islanders;
* competing access to water supplies by farmers and the natural environment;
*the “boat people” issues,
etc. etc.

Also pushed away to the side was the remarkable fact that Australia has genuinely been a “Lucky Country” during and after the Global Financial Crisis.

Indeed, no other developed country has done as well, or is expected to do as well over the future, despite Australian concerns over the Chinese economy slowing down or the high Australian dollar which is stifling local manufactures.

It is tragic therefore, that while the current government is promising to deliver a massive budget surplus this coming year, reduced investment by the corporate sector precisely because of all these political turmoil, will almost certainly help to reduce the very economic growth which could make the surplus attainable.

When asked their views on this ongoing sagas, colleagues here at the James Cook University were totally cynical or disengaged from these public controversies.

Non-political public commentators, such as this week’s absolutely hilarious panel (including the witty Barry Humphries) on ABC’s Q&A, were all horribly accurate and scathing in their indictment of Australian politics and leaders of all persuasions. Watch it on the ABC website.

The Bad Politics

Of course, the key to all these political and media shenanigans was that the Labour Party has been governing with a very slim majority, and the loss of just one or two votes could easily lead to a “vote of no confidence” being successful, and the Opposition coming in.

Contrary to the popular conception of this as a key Australian trait, no Opposition politician seemed to think that they should give the government “a fair go”.

You would never get the impression that there was any Opposition politician who thought: aah, let the Labour Party govern to the end of their term, led by Gillard, or Rudd, or Shorten, or whoever; and then the Opposition will have their go after the next election- which is almost a foregone result at the moment.

Of course, similar bitter struggles for political power have gone on in Fiji and in PNG, where they are continuing on a daily basis.

Both in Fiji and PNG orderly developments and resolution of political leadership issues have sadly been hamstrung, firstly by politicians who have placed their personal power issues ahead of national issues (not very different from that going on in Australia today).

But the situations in PNG and Fiji have been undermined far more by the inability of the judiciary to separate themselves from the executive arms of government, and secondly, in Fiji, by the assumption by the military of executive power over both government and the judiciary. That may yet come in PNG.

Such compromises by the judiciary are extremely unlikely to occur in Australia (despite the 1975 Kerr/Whitlam affair).

And certainly, you will not see any interventions by the military, regardless of how much the Defence Budget is cut.

The PNG constitution has another weakness in that it allows Members of Parliament to switch alliances at will- depending on which potential Prime Minister is able to offer a large enough bribe That is a PNG political feature which should be eliminated by law.

Dame Carol Kidu’s recent suggestion for PNG of a Presidential type of government may well take PNG out of the frying pan into the fire, should a President turn out to be “bad un” with infinite unaccountable executive powers.

The bottom line everywhere is: if politicians had good will towards each other and the nation, all disagreements can be resolved in a peaceful and civilized manner.

Where politicians don’t have this good will, then no amount of constitutional niceties, will stop them from “cruelling” the investment climate, whether in Fiji, PNG, or Australia.

 

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