Even as he prepared to remove the velvet glove from his iron fist, Malcolm Turnbull spoke more in sorrow than in anger : ‘the market is not working as it should,’ he mourned.
But this was, like so many of his lawyerly assertions, at best a half truth. As Turnbull, a businessman and a banker – a graduate from Goldman Sachs no less—must know, the market was working precisely as it was meant to.
The gas producers saw a better price and latched on to it. This was text book supply and demand: if there was a shortage of gas available for all, the highest bidders got what was around.
Certainly there were unexpected consequences when a glut of the stuff forced international prices down while the domestic buyers were stuck with soaring costs to secure whatever was left, but hey, that’s just Adam Smith’s invisible hand at work, or perhaps more of a rapacious, grasping talon, a predator red in tooth and claw.
But conservative wisdom has always been that it is safer to leave the market alone than to interfere. A former Liberal leader, John Hewson, who was an economist before he was a politician, used to offer the analogy of the economy as a rubber sheet: there may be bobbles in it, but whenever you tried to push one down, another one popped up somewhere else.
In latter years he has grown out of his preoccupation with rubber sheets, but it is still an imperative of the free-enterprise system that governments of all kinds should be treated as the enemy – unless, of course, they can provide tax lurks, subsidies, and favourable conditions for the grasping claw to prosper.
So has Turnbull finally revealed his true colours – are we seeing the real Malcolm Turnbull: the rampaging socialist leftie, the threat to sovereign risk, the protectionist determined to enforce stifling regulation on an industry which was, we were told, was barrelling ahead, a model for the transitioning economy that would secure, dare we breathe it, jobs and growth?
The tax-dodging tycoons reacted with puzzlement, almost disbelief: what was all this national interest jazz? Interest was something you collected from the banks after profits.
Well, no; insofar as he believes in anything these days, our Liberal prime minister is still a zealous adherent to the free market system. This is why he has done everything possible to avoid the inevitable – a few weeks ago he called the tycoons together and pleaded with them to be nice: make sure we keep just enough gas for industry, and, if at all possible, to avoid state wide blackouts for the rest of the hoi polloi. Think of the national interest – or at the very least, the interest of his government.
As we know now, the tax-dodging tycoons reacted with puzzlement, almost disbelief: what was all this national interest jazz? Interest was something you collected from the banks after profits. That was their job – they had never signed a social contract, whatever that is, and if they did they would make sure there was an escape clause or two in the small print. So without actually giving the prime minister the finger, they chose to ignore him.
However, the big gas users had a certain amount of clout of their own, so reluctantly – indeed, kicking and screaming – Turnbull was dragged to the party. But even then he promised he would only put it in a little way and he would take it out again as soon as possible – this was ‘a target, temporary measure,’ and in any case it was all the states’ fault. As soon as they could be brought to their senses the invisible hand would resume its rule.
Turnbull will no doubt get some brownie points from the polls, which is obviously needed, but in the process he has added to the doubts and fears of the voters who are still trying to work out who or what he really is, and will (or at least should) enrage the neocons and the economic fundamentalists – where, we might ask, is the daily diatribe from The Australian’s Judith Sloan, who may still be reaching for her smelling salts?
And, as is always the case, Turnbull’s big announcement became inextricably tangled with the ruminations of his treasurer, Scott Morrison, who told us, with the air of a man who has finally seen a holy vision, that there is a difference between good and bad debt, and he is going to exploit it to the max when he is preparing the budget.
It is obviously a time for a large spot of pork barrelling in the name of infrastructure – as Bert Kelly, an earlier sceptic on such matters used to say, I can feel a dam coming on.
If Morrison means anything (always a doubtful proposition) he seems to be saying that good debt is about building things and bad debt is about paying for services the electorate demands. On this basis the Adani pipeline is good, the National Disability Service is bad – and that’s it. This is obviously nonsense – debt is morally neutral. Some capital expenditure is desirable, as is some recurrent expenditure and some isn’t, depending a wide range of factors.
This should be the real debate, but Morrison’s formula eschews nuance; like all the government’s slogans it is about an easy sound bite that can be used to justify whatever backflip is deemed necessary at the time. And it is obviously a time for a large spot of pork barrelling in the name of infrastructure – as Bert Kelly, an earlier sceptic on such matters used to say, I can feel a dam coming on. So in the circumstances it is all too easy to be cynical.
Actually regulating important national industries such as gas is both sensible and necessary policy, as is borrowing money for worthwhile infrastructure. The problem is that Morrison and Turnbull have spent so long denying the obvious and debasing the political currency that few people will be convinced that this time they actually mean it – that they are going to embrace a few sensible ideas instead of telling the public that everything is a crisis and it is all Labor’s fault.
Of course, it would help if they could avoid the jingoistic bombast; Turnbull wrapped up his announcement in a slather of bullshit about Australia first – Australian business, Australian industry, Australian jobs – Australia uber alles and bugger the rest of the world. But perhaps that is just what the focus groups tell him that this is what plays well in the marginals.
Or perhaps Turnbull is just practising before he oozes his way across the Pacific to dive into the bowels of an obsolete American aircraft carrier and kneel at the feet of the mighty Donald. After all, speaking the same bullshit will save the cost of an interpreter.