It seems Kevin Rudd has become a significant disappointment to many members of the parliamentary press gallery. Quite a few environmentally conscious journalists agreed with the Prime Minister that human-induced climate change was the greatest moral challenge of our time – and they expected him to put Australia in the front line of those nations wanting to take action to save the planet.
Some commentators – who welcomed the reforms by Labor leaders Bob Hawke and Paul Keating – were hoping Rudd would embrace widescale tax reform following the review of the taxation system by the Treasury secretary, Ken Henry.
It hasn’t turned out that way. Rudd’s climate change agenda was defeated by the opposition’s stand after Tony Abbott’s election as Liberal Party leader and by the failure of the UN climate change conference in Copenhagen.
There was considerable expectation that Labor would call a double-dissolution election based on the opposition’s refusal to pass its carbon pollution reduction scheme. But Rudd never said he would do this and, in any event, the appropriate time to press for a double dissolution election – which would have to be held by October 16 – was late last year.
Interviewed on the Insiders program in February, the Prime Minister said he was receiving conflicting advice on whether he could engineer a double dissolution based on the Senate’s refusal to twice pass the emissions trading scheme legislation. This comment received less attention than deserved.
As Professor Cheryl Saunders pointed out in The Australian Financial Review in March, it was uncertain the ETS bill, the subject of negotiation between Labor and the opposition, met the requirements under the constitution – since it was not clear the specific legislation had been rejected twice in the Senate.
And it was never certain the Governor-General, Quentin Bryce, would use her discretion to dissolve both houses in, say, August or September when the expected date for a normal House of Representatives election would be between early September and late October. The realities were overlooked by some journalists who wanted Rudd to take on Abbott over climate change and win.
In the end, Rudd did what he should have done in the first place. He delayed any Australian action on climate change until it is clear what other nations – including China, India and the United States – intend to do. And by the end of 2012, the impact of the global financial crisis will be clearer.
After the 2020 summit in early 2008, Rudd committed Labor to a review of the taxation system. Again there were some commentators who expected him to embrace widescale reform. This was unlikely. The timing was always against such an eventuality – the Henry review was released on Sunday, probably only months before the election.
The document prepared by Henry and his colleagues is a comprehensive paper and it is unclear how many of its recommendations will be accepted over time. In the short term, however, the review has been used by the government to impose a new tax on the mining industry to fund retirement savings, company tax reductions and infrastructure projects.
In other words, Labor has used tax reform for essentially political purposes. This was evident on AM yesterday, when Rudd ran the line that foreigners own a significant percentage of both Rio Tinto and BHP Billiton and their “massively increased profits … built on Australian resources are mostly, in fact, going overseas”. Well some are. And some of the profits are being re-invested in Australian projects. Australia’s contemporary prosperity has been built on foreign investment.
It is too early to judge the Rudd government. Yet it is fair to say in its first term, Rudd Labor has not matched the reform determination of the governments led by Hawke, Keating and John Howard. So far Rudd Labor’s one outstanding reform, which will benefit productivity and assist lower socio-economic groups, is Julia Gillard’s My School initiative.
Her school reform agenda was influenced by Joel Klein, chancellor of New York’s education department, who visited Australia in late 2008. Gillard’s determination that parents should be able to determine how their children’s schools are performing is still meeting opposition from teachers’ unions in government schools and other vested interests.
Her agenda is in the tradition of the historic concern by social democrats for the education of children from low socio-economic groups. If Gillard prevails, this will be the most significant reform of Rudd’s inaugural term.