Rudd’s achievements

Rudd has back-flipped on a number of government policies – the ditching of the insulation rebate scheme, junking the promise to build 260 childcare centres, the ETS decision (now postponed) and perhaps some wasteful spending on education. He has also had to toughen the asylum seeker laws and the rules to restrict foreigners buying homes.

And yet it seems to me the Opposition theme – that Rudd is “a lot of talk but no action”: he just “promises but fails to deliver” – is a mighty exaggeration.

These are some notable Rudd achievements (in the short period of 2 and 1/2 years). These may be more initiatives soon to be announced in the Budget. They include:

1. rescuing the economy from the global financial crisis;
2. commitment to limit real spending growth to 2% a year;
3. the resources rent tax;
4. greater transparency in superannuation arrangements (including inappropriate financial advice and a stop to commissions);
5. improved quality of life in our schools;
6. investment in social housing;
7. tempering the Howard Government’s workplace reform;
8. apology to aborigines and some gains in aboriginal poverty;
9. review of the qualifying age for the Age Pension to 67 years;
10. generous increases in pension payments;
11. cutbacks in salary sacrifice for superannuation e.g. reducing the cap from $100,000 to $50,000;
12. My School website;
13. implementing the Paid Parental Leave Scheme;
14. reform of bank regulation e.g. on bank capital;
15. youth allowance provision;
16. big new investment in public hospitals;
17. addressing homeless people;
18. investment in nation building infrastructure;
19. investment in jobs and training;
20. fairer and more sustainable private health insurance and incentives (admittedly, a broken promise)

Can you think of other important initiatives?

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44 Responses to Rudd’s achievements

  1. munroe says:

    Some of these are definitely achievements, such as rolling back workchoices. Others are still in play and can’t be put on the board yet. Still others – such as “rescuing the economy from the global financial crisis” – are hotly disputed by conservatives.
    About the stimulus: every other developed nation did exactly the same thing as us, yet they all went into recession, but we didn’t. Rudd and Swan have no explanation for why that is the case. But there is a simple reason.
    The difference is that we were able to sail along in the wake of the Chinese stimulus plan, which was immense, and which involved the Chinese buying lots and lots of Australian commodities. Hence our mining boom, and hence our lack of recession.

  2. Ken Parish says:

    The MySchool website is merely the communicative end of the more significant initiative which is making NAPLAN tests more rigorous and universal. This press release from Julia Gillard (December 2008) puts it in a broader context:

    This is the first time that all students in Years 3, 5, 7 and 9 across Australia have taken the same literacy and numeracy tests and the first time that a detailed national report has been available in the same year as the tests were taken.

    The innovative National Assessment Program – Literacy and Numeracy (NAPLAN) measurement scales enable sophisticated analysis of growth in attainment over time, representing world best practice in the measurement of student progress. …

    At the COAG meeting on 29 November 2008 the Australian Government delivered an unprecedented National Education Agreement to drive education reform.

    A number of measures were agreed, including greater transparency and accountability for the performance of schools, which is essential to ensure that every Australian child receives a world class education.

    The Australian Government also entered into historic National Partnership agreements with the States and Territories to lift attainment.

    * $550 million to improve teacher quality in schools;
    * $1.1 billion to address educational disadvantage; and
    * $540 million to drive improvement in literacy and numeracy outcomes.

    Then there’s the national secondary schools curriculum across English, maths, history etc, another major initiative which the Howard government talked about but never delivered.

    The there’s progressively removing enrolment caps on higher education from 2012, thereby exposing universities to competitive market forces in a way that has not previously been the case. In the case of the university where I work, this has had a truly miraculous effect in concentrating the minds of senior management on supporting teaching and learning in a real and constructive way to a much greater extent than has ever previously been evident.

    I agree that the Rudd government has in fact achieved a great deal in its first 2 1/2 years in office, and I don’t even criticise them for pulling back on obviously politically damaging initiatives for electoral reasons. In a democratic society politics is the art of the possible. Thus if Abbott is going to cynically engage in universal populist obstructionism solely for partisan political gain and irrespective of the merit of the policies he’s opposing (as is undeniably the case), the government’s course is necessarily constrained as a result. Rudd might well have fought harder to sell his ETS to the general public, but I don’t think he can fairly be blamed for putting it on the backburner now in the face of ongoing international deadlock and cynical Senate obstructionism by both Coalition and the Greens. Political principle in the real world does not require a party to commit political suicide for no useful purpose.

    An excellent and timely post, Fred. Thanks very much.

  3. Ken Parish says:

    “Still others – such as “rescuing the economy from the global financial crisis” – are hotly disputed by conservatives.”

    The Tories may well dispute it, but most economists appear to accept that the Rudd government acted in an appropriate and timely fashion. Claims by Tories that they spent too much seem to be regarded by most economists as just plain wrong.

    It’s certainly true that the China-driven mining boom and a strong and well-managed economy at the outset (for which the Coalition deserves significant credit) were also key factors. But in a political context where, if we take successive Coalition leaders at their word, they would have taken the GFC much less seriously than Rudd and sat on their hands to see what happened, Rudd deserves credit for acting promptly and decisively to implement Reserve Bank and Treasury advice. Unless the Coalition were simply adopting oppositional stances on the GFC response solely to differentiate themselves from Labor (which is entirely possible), it looks like their rigid ideological orientation might well have caused them to spurn the neo-Keynesian responses that the GFC clearly demanded had they been in government. Thus I don’t think we should take the fact that conservatives “hotly disputed” Rudd’s role in rescuing us from the GFC very seriously at all.

  4. munroe says:

    You’re calling the Coalition “Tories?” LOL! I think you have to remove the “Centrist” tag from this blog.

  5. Fred Argy says:

    munro, our export price index in March is still 26.8% below what it was last March. Import prices fell too but only by 12.9%.

    So Australia have suffered too (although there was a good gain in March 2001). The Rudd Government needs some of the credit for saving us from a recession.

    Ken, thanks for your contribution.

  6. Ken Parish says:

    “I think you have to remove the “Centrist” tag from this blog.”

    Not at all. The Coalition have moved so far to the mindless, destructive right under Abbott that a principled centrist is IMO obliged to fearlessly label them as what they are and accept Rudd Labor with all its manifold imperfections as radical centrism’s only hope.

  7. woulfe says:

    Labor went to the 2007 election with a policy to review and address the Human Rights and Equal Opportunity Commission’s finding that same-sex couples were disadvantaged in 58 pieces of federal legislation.

    In government, they moved quickly to conduct an Inquiry, which found a further forty-odd laws that needed changing. The amendments were carried through Parliament as soon as possible. This included changing the definition of de facto couple to include same-sex partnerships.

    Separate amendments to the laws regulating de facto relationships have meant that in federal law, same-sex couples have equal rights with opposite-sex couples, excluding the right to marry. This exclusion was confirmed by the government after the recent Senate Inquiry into same-sex marriage.

  8. Guy says:

    I don’t like quite a number of recent things the Rudd Government has done – but thanks for your comments Ken. I think they’re spot on, and a timely reminder.

  9. conrad says:

    Thanks, that will quell my cynicism for a while.

    I guess a tougher question is what they have done that is politically unpalatable. Of your list, I guess that includes 6 (I think that few people want it in their neighborhood even if they say what a good idea it is), possibly 8, and definitely 9.

    The last of these is really interesting, because what it shows is that you can do things that don’t seem especially popular and you won’t lose popularity for it (as Jeff Kennett also proved). I’m surprised about how little fuss it caused, and I wish Rudd would take notice of that.

    Didn’t they also want to increase the age at which you can withdraw your superannuation to force people to work longer?

  10. The Rudd Government needs some of the credit for saving us from a recession.

    This statements, and variations on it, will occupy economists for years to come. It is an unprovable and unfalsifiable statement in the large (like most of macroeconomics) and doesn’t look so hot in microeconomic terms either.

  11. munroe says:

    You forgot the health initiative that emerged from COAG last month. I have no idea what he’s done, but apparently everyone agrees it’s a good idea.
    The myschool website is quite controversial, but I’d rank it as one of their best
    initiatives.

    17. addressing homeless people;

    This one’s a bust. He hasn’t reduced the number of homeless. However I don’t blame Rudd, because it’s an intractable problem, in part because of the way homelessness is defined. (ie it’s defined in such a way that it can’t be solved).

  12. Nabakov says:

    And let us not forget another Rudd achievement. Not treating the nation to the sight of a perspiring PM in bad shorts showing pale skinny legs as they power walk through the world’s capitals at dawn.

  13. Nicholas Gruen says:

    Jacques, munroe,

    the fact that ‘conservatives’ deny the benefits of the stimulus package is not a reason to deny them – they’re obvious. All those people building school halls, waiters handing out food at restaurants as people spent their bonus cheques. They would all have had other jobs in the economy would they?

    On the micro-economic quality of the spending it wasn’t as good as it would have been if people had more time – surprise surprise! And if those projects were employing people and resources that would otherwise have been idle, they don’t need to be very efficient to be cost effective do they?

    Some basic commonsense please!

    Self proclaimed ‘conservatives’ can deny it all they like – denying the obvious has, sadly become part of their shtick, but please. In Australia can’t we just keep that to party political rhetoric, not serious discussion?

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  15. munroe says:

    And if those projects were employing people and resources that would otherwise have been idle, they don’t need to be very efficient to be cost effective do they?

    Only if the cost of the projects is zero.
    Since it isn’t zero (it was actually quite big), they’re subjuct to the same cost-benefit analysis as everything else.

  16. Nicholas;

    The same ideas of stimulus, on a much larger absolute and per-capita scale, worked far less well in other developed economies. Why?

  17. Nicholas Gruen says:

    Post hoc ergo propter hoc? I’m a bit shocked by the crudeness of your analysis Jacques.

    Why do you say the stimuluses overseas worked less well? What’s your counterfactual? We were always going to have a lower dip than them and our stimulus prevented ours from being worse. And it prevented the Northern Hemisphere’s from being worse. I mean what do you think? We’re in a liquidity trap and increase govt spending by a percent or two of GDP with unemployment soaring. Tell me a plausible story in which that doesn’t create activity and jobs.

    Do you think that because we had a stimulus in Australia and there is now more unemployment than before the stimulus, that the stimulus created the unemployment.

  18. Paul Frijters says:

    Fred,

    the vast majority on your list should be seen as simply following the fairly urgent advise from the senior civil servants in various departments. I think the opposition would probably have followed most of that advise too, particularly the economic advice around the time of the GFC. This makes it hard for me to assign particular praise to these ‘achievements’. The way to ascertain success would seem to me to ride on the question what in this list is Labour-specific and what is not in this list that the opposition would have done.

  19. ennui says:

    Nicholas

    I don’t know about Jacques counterfactual but the counterfactual which depresses me when I look at Fred’s list is how much more could have been achieved if Rudd was a stronger, more astute political leader. Probably the most important political skill of any government is the ability to blend both policy and politics – the capacity to turn tough political decisions into electoral positives or at worst neutralise the opposition. Hawke-Keating certainly mastered this skill, even Howard to a lesser extent.

    It is this incapacity which leads Rudd into decisions which are not only overly cautious and risk adverse but make him also appear gutless.

    I sometimes wonder whether Rudd’s inability to hold his ground (and nerve) and argue the case in the face of strong opposition is the result of his being permanently scarred by Goss’s “koala seats” election in ’95.

  20. Nicholas Gruen says:

    ennui,

    I wouldn’t argue against you too strongly but just remember that the kind of talk we are hearing now about Rudd was rife when Hawke was in power. Rudd has been more cautious than I’d like about some things, and I think he needs to worry less about the news cycle – governments can control what is on the agenda and it is, IMO ultimately very disorienting for governments to have to have announceables every day. But partly because of its frenetic activity, though the government has set lots of hares running that haven’t gone anywhere, it has also built up some good policy.

    One thing Fred could add is that the Rudd Government has re-jigged the R&D tax concession to be very much more effective. It should have been done decades ago – but it’s done now. Some clever fellow on the Cutler Review suggested it.

    Paul,

    You say that all the Government had to do with the GFC was follow the advice of its advisors. Very true, but don’t underestimate the instinctive reluctance of many at the political level not to do so. Rudd had said he was a fiscal conservative and the thinking after the first ‘cash splash’ was that that was their one shot in the locker and that they couldn’t do it again because it would drive them into deficit. I recall talking with a PMO staffer who was adamant that they wouldn’t – couldn’t – do any more. I told him that was silly, but there was a strong view to that effect at the time.

  21. Tell me a plausible story in which that doesn’t create activity and jobs.

    My point is that we might well have pulled out regardless of the spending.

    Look at the two sectors which got most of the cash: retail and construction. These sectors are also extremely sensitive to monetary policy, over which the Treasurer exercises no direct control. We might as well re-elect Stevens.

  22. Richard Green says:

    ennui – Following on from Nick, remember the consensus towards Howard in his first term, even amongst conservatives. The conventional wisdom amongst them in 1998 was “sure, Howard is weak and indecisive and his government is a shambles, but Labor would be worse”, and that was just a cover for “man, I hope he ends up being less embarrassing than McMahon”.

    The mythologising about Hawke and Howard’s “tough decisions” came with time. A long tenure becomes vindication in itself as inertia takes hold of the political class.

    Which isn’t to say I don’t think much of this criticism of Rudd isn’t justified, I just think I have to be self aware enough to see I am following an established blueprint.

  23. Nicholas Gruen says:

    Jacques,

    I have no idea what you’re saying.

    The high retail numbers were a product mostly of the fiscal stimulus. Monetary policy decisions would have played some part, but they were much more lagged. So what are you arguing? That we could have cut interest rates more? Perhaps, but that wouldn’t have had the kind of effect that dumping 1% of GDP in people’s bank accounts had in the short term.

  24. Corin says:

    I think the list is lacking representation of the regulatory side, which is one of the positives. Especially OH&S assuming they can finally get a national system, one consumer law and one employment law system.

    The partial re-regulation of the labour market may more than offset this in terms of efficiency gains, but I am only speculating here.

    One of the areas I helped push was for the one consumer law in particular, as well as wider agenda launched in April 2007 by Rudd at the Press Club, so I am a bit biased, but to be honest PM&C didn’t want to push with the kind of haste required. So to be honest, the one conumer law along with other worthwhile reform didn’t come at all from the public service (assuming you discount the PC) but was established in opposition at least as a direction.

    As a general rule though, Rudd has been a disappointment. The ETS should have been part of a wider tax package where tax reform/tax transfer reform and a carbon price are mutually re-inforcing rather than the other way around. Indeed Garnaut saw this early.

    Taxing companies could have been better reformed within a wholelistic package including both ETS and tax reform.

    The response to Henry has been disappointing. They could have said we’ll do x y and z but we’d like the general direction of a large tax free threshold and flatter rates and would hope to move there over time.

    The school reform are worthwhile but are very much in the tradition of Govt knows best! They’ve done that in Britain and even though they have league table the overall improvement has been modest despite a doubling of resources.

  25. Corin says:

    I think the ETS indicates how you can’t just rely on neatralising negatives when seeking reform. For they did so much of this that there was no target audience or cheer squad if you will. One of the things about he 80s reform is that some businesses were gainst but there was always a group for the reform viewpoint. On the ETS it became so muted that no heard it. whilst the ETS compensation to consumers was potentially a targeted vote winner it isn’t enough to carry a big change on the economy.

    In my view they may have made the same mistake with such a modest cut in the company rate and the very very pedestrian roll out of the super uplift. They should have set out a much more radical cut in the company rate over a decade and used this as the trade off for the higher super rate.

  26. James Farrell says:

    1. Jacques, what is the evidence for your claim at #15?

    2. Re. MySchool, the league tables, and the demonisation of teachers for standing up to them, I’m still waiting for someone to explain why these are positive achievements, beyond parrotting the phrase ‘accountabuility and transparency’.

  27. Fred Argy says:

    Paul, as Nicholas indicates, many of the policies initated or proposed by the Government (such as the big deficit stimulus, the stopping of commissions on superannuation, tempering the workplace reform, cut-backs in superannuation salary sacrifice, the big investment in public hospitals, the fairer and more sustainable private health insurance and incentives, the Resource Rent tax, etc. etc. – the have been condemned by the Opposition. Doesn’t that speak for itself?

    These proposals might all represent good “advice from senior civil servants” – but they are obviously unacceptable to the Coalition. It takes a brave government to do all these things.

  28. Paul Frijters says:

    Fred,

    what an opposition says and what it would have done itself if in power are entirely different things. Oppositions everywhere feel the need to oppose and hence seem distinct from government, even if they would have done exactly the same thing. Do I for instance believe the opposition would have done much different in terms of the economy? Not at all, and the fact that Rudd apparently took some convincing to simply follow advice (Nick’s point) doesnt negate the reality that almost any government in a GFC situation would have gone with the recommendation of its experts.

    Hence I basically do not believe most of these policies are truly unacceptable to the coalition. It is merely politically unacceptable for the coalition to be seen to agree with them. That’s part of the normal pretense of politics of which intellectuals should take no notice.

    On the matter of many of the spending aspects of this list, the thing you’d have to persuade me off is that these expenditures were better than tax breaks or alternative ways of spending the same resources. To just list items of goodies (investments in hospitals for instance) that were bought with our money as if we should think of them as ‘freebies’ is not an economic way of looking at things. The only items on this list I think could be really seen as Labour-specific things that the coalition would truly not have done are 7 and 8 and they are almost entirely symbolic (the jury is still out as to whether Workplace relations is replaced by the Son of Workplace relations).

  29. Ken Parish says:

    Paul

    The problem with your argument is that the current narrative of Abbott et al, which many media commentators have uncritically embraced, is that Rudd is a political coward who stands for nothing, has done little and won’t take the tough decisions. It is at that meme that Fred’s post is aimed. In fact it’s largely false as I think Fred demonstrates.

    In that political context the fact that the strident Coalition opposition to many of these policies may be confected/insincere is irrelevant. The fact remains that Rudd has taken and implemented a series of major economic and other decisions that carried quite a high political risk because they were demonised, usually unfairly and dishonestly, by the Coalition.

    Moreover, this disingenuous opposition appears to have convinced some usually sensible citizens e.g. Jacques Chester’s willingness to accept that there is any serious doubt that the Rudd fiscal stimulus was both necessary and effective. Very few economists have any such doubts and, as you say, it’s pounds to peanuts that the Coalition would have done almost exactly the same if they’d been in government. The notion that they would have completely ignored the advice of both treasury and the RBA is just plain silly, but Jacques and plenty of other conservative but generally sensible people seem happy to believe this. Hence you should not discount policy successes merely because they flow from public service advice. Howard and Costello were more than happy to promote and bask in a reputation as sound economic managers when all they did was follow Treasury and RBA advice (except where they didn’t follow it and squandered part of the surplus for short term electoral gain contrary to expert advice – something Rudd hasn’t yet done).

    I should acknowledge that Labor unfairly and dishonestly demonised Howard’s GST too. But I can’t recall too many other areas where Labor in opposition blatantly opposed policies they really supported, whereas that’s Abott’s standard modus operandi.

  30. Paul Frijters says:

    Ken,

    you are re-defining the goalpost here. The title of the post is ‘Rudds achievements’ followed by a list of supposedly great things. I am simply judging that list on the usual criteria of economics for calling something a good outcome: are these choices better than those someone else would have made and are they reasonably speaking the best choices that were available? If yes, then these are achievements worthy of note. If no, then they are not achievements worthy of note.

    You argue that the mere fact that decisions have been taken which were potentially very unpopular (such as, indeed, raising the pension age) means that a particular storyline of the opposition has little merit. Such debunking is part of the cut-and-thrust of politics and I have little to disagree with you on that score, apart from finding such political posturing games in general a bit futile (its like watching little kids throw mud at each other in the playground. I am fascinated by the question why politics has to be so childish but am uninterested in particular bits of mud).
    I guess you and I would agree as soon as the word ‘achievement’ is replaced by ‘choices’.

  31. Ken Parish says:

    Paul

    Yes on one level I think I accept your distinction between “achievements” and “choices”, although it isn’t a clear-cut one. Is Rudd’s putative resource rent tax an achievement or a choice (given that it’s in effect a public service recommendation)?

    Fred is clearly talking about choices rather than just achievements as you define the word.

    Finally, I don’t think my points (or Fred’s) are political posturing to any greater or lesser extent than your own. In the charged pre-election atmosphere, dismissing the relevance or praiseworthiness of policy actions, merely because they were the product of public service advice and may well have been implemented by the other party had it been in power, equally feeds into the mud-throwing game of partisan politics irrespective of whether that was your subjective intention.

  32. Paul Frijters says:

    Ken,

    Agreed to some point. You are right that as soon as one says anything about the choices of politicians, it becomes a political statement whether it was intended as such or not, so perhaps I should have said nothing. But I dont see how insisting on opportunity cost thinking can be construed as taking sides in the mud slinging match, unless of course you think that by definition there is no middle of the road in politics and that one is hence always ‘with us or against us’.

    Fred calls these 27 items achievements. I think that’s a bit rich, and not just because many items are the almost inevitable result of following advice that any other government would also have followed. I would for instance call number 2 an election promise waiting to be broken and 5 something that is not yet clear at all. Fred is showing with this list whose side he is on, which is fair enough but its not an objective list of achievements.

  33. Paul Frijters says:

    that should be 20 items, not 27

  34. Fred Argy says:

    Perhaps I should not have called them achievements. As Ken suggests, I should have used “choices”, meaning that they are deliberate and help to determine our economic and social strategies.

  35. Jack says:

    Creditting KRudd with ‘rescuing the economy from the global financial crisis’ is a monumental joke.
    That useless little f**k had nothing to do with it.
    We were lucky to have been in the position the previous government had left us in.
    Surely you can admit that as, when things go wrong, the excuse is that ‘the previous government’s policies caused it”.

  36. chrisl says:

    Fred, In the interest of balance, perhaps you could do a post on non achievements (or bad choices) of the Rudd government. Perhaps you could start with the billions wiped off everyone’s superannuation .

  37. Nicholas Gruen says:

    Chrisl – I don’t follow. What did the Rudd Govt do to wipe billions off people’s super. I must have been napping.

  38. chrisl says:

    the Financial Post.

    This week the increasingly unpopular Australian Labour government of Kevin Rudd announced a new “super profits tax” on the mining industry, starting in 2012. Who couldn’t be in favour of taxing super profits? They sound awfully unfair. But what “super” means to the Ruddites is apparently any return above that of government bonds, which will be dinged at a rate of 40%. If there were ever a definition of punishing risk-taking, this is it.

    According to the government, the tax will haul in US$11 billion over its first two years. The problem is that it has knocked more than that off the value of mining stocks so far this week.

  39. Fred Argy says:

    Chris, you need to look at
    – what happened to global markets (big decline),
    – the impact on commodities (also declined) and
    – the impact on banks across the world, arising from Greece’s problems.

    When you allow for all that, you are left with a small decline in mineral prices due to resource rent tax.

  40. Fred Argy says:

    Chris, you need to look at
    – what happened to global markets (big decline),
    – the impact on commodities (also declined) and
    – the impact on banks across the world, arising from Greece’s problems.

    When you allow for all that, you are left with a small decline in mineral prices due to resource rent tax.

  41. chrisl says:

    “THE government’s proposed super-profits tax on the mining industry has slashed the retirement savings of investors by up to $6 billion in just three days, undermining its parallel push into increased superannuation contributions. ”

    With millions of people relying on super or self-funded retirement a tax on our only viable industry is the last thing we need

    What odds another backflip

  42. Fred Argy says:

    With help from Peter Martin, I am told that, since Sunday, resource mining and metals stocks are down 7.52% while the ASX 200 index is down 6.67%. The European markets have fallen much more than we have. I hope this will put an end to all that nonsense of our mining giants being mauled. A lot of rumours are proving false.

  43. Nicholas Gruen says:

    But if our miners did fall, that’s what you’d expect – all very healthy part of transferring some rent to the public.

  44. Nicholas Gruen says:

    # 41 – did saying that make you feel good ChrisL? Good to get a bit of a one-liner off your chest?

    Are you basing this on any economic ideas, or just saying things that sound good – should we be sending a microphone around to your house to get some grabs for the evening news?

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