Business as usual is not coming back

Here’s a thought for Julia Gillard: if Australia had MMP she would have a majority, with the Greens (on initial figures). But the Greens’ 11 per cent vote share in the government-legitimising House of Representatives got only one seat.

Here’s a thought for Tony Abbott (wrongly declared “mad” by Australia’s myopic mainstream media): aside from their environmentalism, Greens mainly lean more left than Labor on international, social and economic issues. So: problems in the Senate for an Abbott government.

Here’s a thought for John Key: Australian Labor fell from grace at a time of economic strength because it dithered. Labor voters moved in droves to the Greens when Kevin — “greatest moral challenge of our time” — Rudd pigeon-holed his emissions trading scheme. He had contemplated a snap election to skewer a divided opposition but then Abbott changed the polls.

Here’s a thought for Chris Carter: changing leaders can look like desperation and spell disunity. (Disunity is also a thought for Rodney Hide.) Bill English could tell Carter that: too eager for the top job, he took National down to 21 per cent, a 100-year record. Mike Moore could add a coda: the best a change of leader close to an election can do is hold the line. (Though Bob Hawke in Australia in 1983 is a counterfactual.)

Here’s a thought for all who think the “great financial crash” was just a financial crash and even for those who think it was just another economic recession. Business as usual is not coming back.

If it had been coming back the Conservatives would have cleaned up in Britain. Instead, shock-horror, there is a coalition of two essentially incompatible parties. New Zealand, by contrast with fellow old-Commonwealth, Westminster-democracy Australia and Britain, has had practice at innovative governing arrangements. It is not pretty and produces some perverse results but it has more legitimacy than single-party governments.

An aside: If the “change” lobby wins in next year’s MMP referendum and also gets the second referendum set for the 2014 election brought forward to 2012 and that referendum backs the supplementary member system (proportionality of the list only and not the whole Parliament) and if National wins in 2011 and keeps its big lead in electorate seats, it would be excellently placed for a third term in 2014 as a one-party government.

But the shifting electoral sands reflect a deeper flux. For a history lesson, look to the early 1930s. In all three countries, mired in severe economic depression, governments were made up of coalitions or shifting alliances.

After that period of economic and electoral flux came the welfare state. It came first here because a Labour government had command of Parliament after 1935 while in the other two countries the depression had destroyed Labour governments. But the seeds were sown there, too. Pre-depression business-as-usual was discredited and unworkable.

The same applies now. There is no way back to the way things were. Too much has changed — in fact, was changing underneath well before the financial crash.

Those changes are technological — digital technology has accelerated globalisation in all its forms and is altering social interaction — geo-economic — China’s rise and the North Atlantic countries’ subsidence into debt — and geopolitical — rearrangement of international institutions to reflect the transit of economic power and consequential strategic rebalancing.

These huge changes are reshaping our society and economy and that in turn is changing the underlying factors in policymaking.

There are small signs of response.

The government is starting to get more coherence in economic policy.

This involves at one level Bill English’s heavy focus on rebalancing from debt-driven domestic growth to growth based more on exports (including tourism). That in turn requires rebalancing household activity from consumption to saving.

At a second level is Gerry Brownlee’s sector-by-sector search for what the government can do or stop doing to enhance opportunities. At a third level, the penny has dropped on the need for more science and research — though we have yet to see that penny transmuted into hundreds of millions of dollars.

Labour is edging towards a restatement of economic approach to reflect some of the post-crash writing by the likes of Joseph Stiglitz, Dani Rodrik and Robert Skidelsky. Thanks to the energetic Clare Curran who this coming Saturday is running a day-long workshop on open government and its policy implications, Labour is getting a grasp of the implications of the digital technology age.

Contrast Rudd: stuck in the old business-as-usual, shovelling money to offset recession, much of it wasted and some ending up in the morgue (dead untrained insulation installers working for sharks). And contrast Abbott: a range of barely reheated pre-Rudd policies.

New Zealand, if anything, is ahead. As it was in the 1930s. Pity that doesn’t make us as rich.