It has been a corker of a year in Federal politics. Leadership challenges, climate change deniers, sauce bottle shakers and a little bloke called Godwin. It was also the year the Rudd Government held the economy together and the Liberals tore themselves apart.
There has already been plenty written about the chaos in the Liberal Party. But to find the origins of the Libs’ problems you have to go back to the 3rd of June. The importance of what happened on that day cannot be overstated, both in economic and political terms.
This was the day Australia avoided going into recession. I remember the shocked look on the face of the reporter on TV that morning as she said “we have dodged a bullet”. I can only imagine what the look on Malcolm Turnbull and Joe Hockey’s faces must have been.
If an economy goes backwards for two quarters in a row – it’s officially in recession. The Australian economy shrank in the last three months of 2008 and many people expected it would shrink in the first quarter of 2009. But on 3rd of June the number crunchers announced the Australian economy had survived, growing 0.4 per cent in the three months to March.
The impact was almost immediate. Business confidence surged and consumer confidence shot up faster than at any time over the last 35 years.
Confidence is the X factor in the economy. When consumers are confident they spend. When businesses are confident they invest and keep their staff on. The surge in confidence helps explain why unemployment is lower than anyone expected at the start of the year.
People I have spoken to in America can’t believe we are not in recession. Every major advanced economy in the world is in recession, except one – us. Two years ago when the Rudd Government took office (before the global recession) unemployment in Australia and America was under five percent. It’s now 5.8 per cent here. In America it’s skyrocketed to 10.2 per cent.
And the reason we didn’t go into recession? Treasury modelling shows it was the government’s economic stimulus. Without it, the economy would have slumped into recession.
That’s why the 3rd of June is so important. It proved the Government made the right decision to stimulate the economy and that the Liberal Party made the wrong decision to vote against it.
The 3rd of June is also important because of how it affected the Liberal Party’s next move. From the first sitting day of this year they launched a full scale attack on the Government’s management of the economy. Between 3 February and 2 June the Opposition asked the Government 145 questions about the economy. Since the 3rd of June they have only asked 51.
It didn’t take long for the Liberal Party to change topics. The very next day, the 4th of June, Malcolm Turnbull asked his first question about a ute, and we all know how that ended.
All of this stoked the fire of dissent that set the stage for this week, when climate change burnt a hole in the Liberal Party.
In the last few days a couple of Liberal MPs have told me they think Malcolm Turnbull is in the wrong political party. The truth is he is one of the last ‘liberals’ in a party fast being overrun by people who think Robert Menzies was a radical.
There are now two Liberal parties – the Turnbulls and the turn coats. And if you think Turnbull’s judgement is bad, have a look at the sort of people trying to bring him down.
Nick Minchin told the ABC a few weeks ago he thought that climate change was a communist plot: “For the extreme left it provides the opportunity to do what they’ve always wanted to do, to sort of de-industrialise the western world”.
In the debate in Parliament Liberal MP Alby Shultz compared climate change to the perverted science of Nazi Germany: “On 4 June 1940, Sir Winston Churchill warned of the perverted science of national socialist ideology…. That is just as applicable today to the perverted science of global warming.”
In the Senate Cory Bernardi described climate change as “green witchcraft”. Senator Cash said she was convinced of a UN conspiracy to take over the Australian economy.
These are the sort of people who would have burnt Galileo. No wonder Malcolm is in a pickle. His own party thinks he is either a communist, a Nazi, a witch, or part of some kind of world government conspiracy.
Remember this – the climate change legislation the Liberal Party is now tearing itself apart over is the same legislation John Howard said a few weeks ago “is not all that different from what I took to the last election”.
This is the great irony about what is happening now. The Liberal Party are killing themselves over something they supported two and a half years ago.
It now seems like such a long time ago when John Howard said “Australia will move towards a domestic emissions trading scheme… beginning no later than 2012. Australia will continue to lead internationally on climate change, globally and in the Asia Pacific region”.
When was that? Funny enough it was also the 3rd of June. The 3rd of June 2007.
Who would have ever thought John Howard was a greenie, a communist or part of a global conspiracy?