27 January 2014
Abbott's Davos Disaster
What has the world learned about Australia from Abbott's keynote address to the World Economic Forum?
Australians watched Tony Abbott fly off to Switzerland this week to deliver an important speech to world leaders with muted anticipation. Commentary in advance ranged between frank pessimism and outright dismay.
It is clear now the PM failed to live up to those expectations.
Fortunately, the damage done to Australia's reputation was limited by most media declining even to mention the Abbott embarrassment.
The New York Times has extensive coverage of the World Economic Forum (WEF) in Davos, with a dedicated web page and many feature articles exploring the key themes and major players. None mentions Abbott, who, by virtue of the high regard for his predecessor, finds himself the accidental president of the G20 for 2014.
Le Telegramme, L'Humanite and Le Parisien in France published stories from the WEF but completely ignored Abbott. L'Agence France-Presse filed multiple reports profiling the contributors, but excluding Abbott.
Le Figaro focussed on the speech by International Monetary Fund director Christine Lagarde who addressed constructively the new dangers, nouveaux risques, threatening global recovery. These are, she said, deflation in Europe, tapering of US monetary policy and distortions in global financial markets.
With an embarrassed cough, Le Figaro noted Abbott's address as a footnote, quoting him as calling for more free trade, an idea that was a long way from the agenda, tres loin de la thematique, of earlier gatherings.
Les Echos did mention the keynote speech, reporting that the thrust of Australia's G20 presidency will be free trade. It noted it was odd Abbott didn't mention the World Trade Organisation.
The Guardian in Britain headlined its piece, Does Tony Abbott always make the same speech? and reported that it struck a familiar tone and was criticised for being inappropriately partisan.
Indeed, Abbott's reputation as a buffoon appears to have preceded him to Davos.
The Financial Times UK's economics editor, Chris Giles, tweeted:
'Sign of the times. [Iran's President Hassan]Rouhani packed out the hall. Everyone is leaving before Tony Abbott explains Australia's ambitions for the G20 in 2014.'
Abbott's speech confirmed the nagging suspicions many have had since he assumed the prime ministership, following one of the most manipulated media campaigns in any democracy in living memory.
It repeated all the trite slogans that worked in Western Sydney:
You can't spend what you haven't got.
Markets are the proven answer to the problem of scarcity.
No country has ever taxed or subsidised its way to prosperity.
People trade with each other because it's in their interest to do so.
Progress usually comes one step at a time.
Unfortunately, I am not making this up.
Riddled with indicators of ignorance, the speech confirmed Abbott knows little about contemporary economics.
He quoted, for example, statistical measures from China:
China's growth is moderating, but likely to remain over seven per cent.
He seems quite unaware that economists no longer trust statistics from China.
All economies today use strategic borrowings, at different levels, from different sources and for different purposes. Managing borrowings is a major challenge. Abbott's glib admonition 'You don't address debt and deficit with yet more debt and deficit' displayed a dismissive attitude to this complex reality.
There was no sense of understanding the challenges the WEF faces in 2014, let alone having insights into ways forward.
What little strategy Abbott advocated seemed contradictory. He asserted that the global financial crisis (GFC) was not a crisis of markets but one of governance.
And then boasted of Australia,
To boost private sector growth and employment, the new government is cutting red tape ...
Okay. That makes sense.
The prize blunders arrived, however, when Abbott directly attacked the stimulus packages of the Rudd/Gillard administrations:
In the decade prior to the Crisis, consistent surpluses and a preference for business helped my country, Australia, to become one of the world's best-performing economies.
In 1996, Australia was the 6th-ranked economy in the world. But by 2007, after 11 years of a Coalition government, it had slipped back to 10th place. Still, that is one of the best.
Then, a subsequent government decided that the Crisis had changed the rules and that we should spend our way to prosperity. The reason for spending soon passed but the spending didn't stop because, when it comes to spending, governments can be like addicts in search of a fix. But after the recent election, Australia is under new management and open for business.
First, it was precisely that extensive rapid spending through the GFC which saw Australia rise from 10th-ranked economy in 2007 to the world's top ranking by 2012, a reality all those present with an awareness of the G20 economies would have known.
Secondly, attacks on domestic opponents are never acceptable abroad.
In New York last October, Abbott was roundly condemned for a political attack on Kevin Rudd.
American Academic Clinton Fernandes said he created an image of...
... "coarseness, amateurishness and viciousness."
Political scientist Norman Ornstein surmised:
Perhaps you can chalk it up to a rookie mistake. But it is a pretty big one."
Clearly, Abbott has learned nothing from that humiliation three months ago.
Abbott then continued to spruik domestic politics, the commission of audit, paid parental leave, cutting the numbers of pensioners, and infrastructure, especially roads:
... because time spent in traffic jams is time lost from work and family.
He concluded with a final hypocrisy, following his attack on Labor for spending so much on infrastructure during the GFC.
He gobsmacked anyone still listening with this:
Then, there's the worldwide 'infrastructure deficit', with the OECD estimating that over 50 trillion dollars in infrastructure investment is needed by 2030.
Several questions arise.
Why such an appalling performance? Where are his advisers? Does he think he needs no advice? Or is the whole Coalition this amateurish and oafish, or worse?
And why, as ABC News highlighted, is he still battling Kevin Rudd and Julia Gillard?
Does this reflect self-doubt about his capacity in the role? They had a vision for the nation; he does not. They had plans to improve the prospects for pensioners, students and people with disabilities; he does not. They nurtured the economy; he cannot. They had character, integrity and authority; he simply does not.
Perhaps it confirms that Abbott knows deep down that the 2013 'win' was illegitimate, that it was secured only by deception and dishonesty.
Perhaps it is time for his party to consider the matter of leader.