Is the Howard government running against the issue cycle?

In the Liberal election post-mortem, I think at least three levels of factors will need to be considered: the transitory, the cyclical, and the structural.

The media puts most emphasis on transitory factors, because these generate the material needed to fill the space and time allocated to Australian politics. Into this category I would put things like leadership issues, interest rates, various stuff-ups, and the campaign strategy. Most what-ifs belong here – what if Howard had left in 2006 and allowed Costello to establish himself as PM, what if Howard hadn’t promised in 2004 to keep interest rates low or if interest rates had stayed low, etc?

There will be some lessons for the future in all these experiences, but at least in principle things could fairly easily have turned out differently, and could turn out differently in the coming years. Analysis of these factors will have only modest value for the Liberals in planning their next move. Howard will be gone, and interest rates will be Kevin Rudd’s problem.

My main interests are in the other two sets of factors. Various aspects of public opinion in Australia are cyclical, with people’s views going back and forth without any long-term trend. Some of this opinion is of the what-is-to-be done variety. We have several decades of data, for example, showing that the public changes its mind over time on the balance between taxing and spending and on the right level of migration to Australia. We also have about 25 years of reasonably consistent survey questions on which issues people think are most important. The public’s basic stance on these matters may be stable – unemployment bad, hospitals good etc – but what varies is the emphasis placed on them as issues affecting votes.

I think it is fairly clear that we are not in a good part of the issue cycle for the Liberals, though due to the mummy party/daddy party phenomenon it may not be quite as bad federally as it is in the states.

For example, Newspoll finds that the Liberals still have a healthy lead over Labor as the best party on tax. But polls since 2003 have consistently found that if given a choice between less taxation and more spending the public prefers more spending. Though some recent polls indicate people want tax cuts as part of dealing with the surplus, a Morgan Poll last week found tax cuts at a record low as the thing the federal government could do that would most benefit the respondent and his or her family. And what do people want the tax dollars spent on? Health and education, two issues on which Labor has historic advantages.

The Liberals also have a comfortable lead over Labor as the better party to handle the economy. But the economy sank as an issue as it improved as a reality. Various economic issues could once get a majority of all issues mentioned, but more recently it is just a handful. On top of this, the public is getting more sceptical that either party has a big effect on economic outcomes.

For a while the Liberals were benefitting from an issue cycle in their favour on immigration and national security, but these strengths have faded as people became more satisfied with migration and less satisfied with issues like the Iraq war.

In his book Tides of Consent, the American political scientist James Stimson argues that in US politics the issue cycle turns against those in power. I think this is an interesting idea in the Australian context. In areas where a party enjoys success in the public’s eyes, as the Liberals have with the economy and immigration, the issue stops becoming so important and so becomes less of an advantage. And with the Opposition and interest groups constantly emphasising – and perhaps reality partly matching – the government’s weaknesses in areas of Opposition strength the issue cycle starts to turn.

If we do have an issue cycle dynamic something like this, the Howard government has reached a point where it is counter-cyclical, and therefore vulnerable to defeat, especially if specific transitory factors such as personality issues, bungles or scandals are running against it. But what the dynamic taketh away it can also giveth – sooner or later the cycle is likely to turn against Labor and towards the Liberals.

The final factors to be analysed are structural. These are long-term shifts in the social composition of the electorate and attitudes (though the two can be inter-related; certain types of people are disproportionately likely to think in certain ways). The Liberal Party, as I argued in January, and which Ian Watson showed in more detail in May, faces a major demographic challenge as older voters who support it are replaced with younger cohorts more inclined to vote for the ALP.

I think there is an open question on whether the Liberals have made a long-term political blunder on climate change, creating a stereotype that will persist regardless of their actual policies on a subject of long-term electoral signifance. Though climate change is an electoral negative now, it is too early to tell how much of a long-term liability it will be, particularly because any serious action on climate change is likely to cause the kind of economic issues that are traditional Liberal strengths to rise again.

Various errors and failings could still bring Labor governments down. But on my analysis, cyclical factors are working against the Liberals for at least the medium term, and structural factors are working against the party in the long-term. It’s going to be a lengthy period in Opposition.

17 thoughts on “Is the Howard government running against the issue cycle?

  1. “The Liberal Party … faces a major demographic challenge as older voters who support it are replaced with younger cohorts more inclined to vote for the ALP.”

    How so? Ageing of the population should make it the other way around.


  2. Yes Spiro, so long as the baby boomers becoming the next generation of grey voters change to Liberal. Otherwise LPA face a major challenge at both ends of the age spectrum.


  3. Spiros – There is no doubt that older people are more likely to vote Liberal than younger people. The question is whether, as you suggest, it is a lifecycle phemonenon – people become more conservative as they age – or a cohort effect, ie older people vote Liberal not because they are older but because they have always been inclined to do so. I think the evidence points pretty clearly to there being a cohort effect at work. This is not to say lifecycle factors are irrelevant, but we cannot assume that significant numbers of Labor-leaning voters in their 20s, 30s, and 40s will become Liberal-leaning as they age.


  4. Don’t you think a less suburban-traditionalist leader would make a difference? Howard markets himself on a strong economy and mainstream values, but that particular brand can’t last.


  5. The Libs don’t need to have such a long time in opposition if they make sure they are credible and capitalise on ALP mistakes.

    As Harold McMillan said, when asked what could throw a government of course, “Events, Dear Boy, Events” an ALP victory could go all over the place.

    Who would have predicted that Bush II would have invaded Iraq after a terrorist attack like 9/11 and that the war would have gone so badly? As Sir Humphrey says we should foresee unforeseen circumstances.

    The Liberals may not spend that long in opposition if they can capitalise on mistakes that the ALP makes and events that occur. The important thing is to make sure that they have good, credible leaders, i.e. no Mark Latham or Simon Crean and can continually chip away at the credibility of the ALP. On their own, Tampa, AWB and all the rest may make little difference, but building them up works.

    If the Libs put Malcolm Turnbull in charge, provided he wins his seat, and just keep pecking away they will get back in 6-10 years. The Libs have also tended to be better at this than the ALP, who tend to choose ‘radical’ leaders too often.

    The cohort affect may be an issue. The Libs clearly need to find a way to make their party more attractive to young voters, but it is very easy to imagine circumstances (i.e. a US recession followed by an Australian one with problems occurring in housing prices that really makes people scream or a US-Israeli bombing of Iran that leads to $US150 oil prices ) that would make people rapidly change their minds.Also, remember in the last election how most people were surprised at just how many 18-34 year olds voted Liberal.

    Finally, there is another explanation for movements in how people vote. Perhaps people’s vote moves like markets do, with most moves being largely random and fundamentally inexplicable, but the overall movements being based on reality. It might mean that political commentary, like the day to day explanations of the movements of the markets is all largely rationalisations based on people’s need to believe the world is more rational than as random as it really is.


  6. It’s going to be a lengthy period in Opposition.

    Not if the Liberals can keep finding people like Barry O’Farrell. If he lasts as opposition leader in NSW, Iemma is toast. In fact, the state Labor governments might be Rudd’s biggest liability if he wins the election – there will be lots of state/federal infighting that will be harder to dismiss across party lines. If Rudd can’t manage it (and let’s face it, a Rudd vs. Bligh match would be most entertaining although not very productive) he’s going to look like a stupified ‘roo in the headlights and public opinion might turn very quickly.
    All of this depends a lot on who ends up as leader of a federal Liberal opposition. Turnbull is about the only non-polarising asset they currently have (except perhaps for Brough). I can’t see Costello as opposition leader: he might be first in line for the job but does he want it?


  7. But David actually offer some very good points here.

    1. The front bench of the labor party is quite suspect.

    2. The economcy could be peaking and you don’t want to buy s stock at the top of the market.

    3. The recession would be a fully owned subsidary of the ALP

    4. Rolling back workchoices and a recession would quickly put the unemployment rate back to 8%

    Yep , David’s quite right.


  8. Our system doesn’t work with rubbish oppositions JC. The liberals in NSW still teeter on farce and let the Labor government get away with being the laziest and most incompetent currently in office. A vindictive Debnam yesterday, picking the worst time possible to dump on federal Liberal policy over Kyoto for example. O’Farrell has improved their delivery immeasurably over the woeful state election campaign.

    As for suspect front benches, Rudd hasn’t promised anyone a job other than Gillard/Swan/himself. Surely there’d be some grumbles of dismissive approval if Tanner found himself a major role.

    I can’t see the proposed changes to Workchoices (amounting to minor edge fiddling) causing a recession, since Workchoices has had no measurable effect so far anyway. Howard is far from perfect – I thought small government/low tax proponents would privately be relieved his end is near in that it finally clears the air for a reasonable debate within Liberal circles of what the party really stands for.


  9. Leon – Possibly, but I put this issue in the what-ifs because there is no clear evidence supporting it. There has been no Costello leadership challenge because Howard’s personal polling has been (and still is) respectable and much better than Costello’s. On the other hand, leaders can often improve their ratings as people come to know them better, Rudd being a spectacular recent example.


  10. David

    Libertaians like me are like battered wives going back for more when it comes to the libs. I cringe at 90% of what they do, but I would shiver to death thinking what Rudd’s team will be up to… he’s just one guy.

    My concern for labor laws is the unfair dismissal laws, Dave. That really concerns me. If they left that alone I really don’t much mind seeing the libs have a 9 year holiday.

    The other side deserves their time in office and I guess this is their time.


  11. Congratulations JC. You’ve worked your way through the 5 stages of grief and have now come to Acceptance.

    “I guess this is their time.”

    You bet your libertarian ass it is.

    It’s going to be an interesting ride. I think Julia will be a very interesting Deputy PM. Our first ever Deputy PM who was president of AUS and a partner at Slater & Gordon! Hot damn this is going to be good!

    But it’s not just Julia. Our water policy and infrastructure will be in the hands of Anthony Albanese, who is seriously left wing. Then there’s industry policy under Kim Carr.

    Happy voting.


  12. You’re making it sound like you yearn for the greek socialist party where hating Amerrika is the common excuse for being one of the poorest nations in Europe. Let’s not try to jump that hurdle please. LOL.

    I woudn’t advertise the slater G thing, Spiros as its not exactly the the sorta swamp you wanna aspire to. LOL.


  13. The next wave of the political cycle will involve how Rudd transforms the way the country is governed.

    There will be a change in federal-state relations, and hopefully a realignment whereby the government responsible for a certain area of policy has to raise the taxes to pay for that policy, and thus wears political responsibility for both taxation and execution. Several Labor governments will fall apart under the sheer weight of this realignment. Think about it: if you’re an experienced State bureaucrat/staffer, aren’t you burnishing your CV about now and looking at real estate north of the Lake?

    The future of Liberals depends upon their reaction to this. They need to harvest dissatisfaction and make the case that they would make things not just different, but better. They will spend their first term in denial, changing superficial things and presenting a lacklustre back-to-the-future agenda that will see voters reward Labor with a landslide. To claim that the Coalition will spring back into office in 2010 is based on wishful thinking, nothing more.

    Barry O’Farrell has to do the hard yards that Greiner did by reforming the Liberal Party, getting rid of the uglies before he can become Premier – and once he does so he’ll be unbeatable, as he has better political sense than Greiner.

    Spiros: before 1996 Geoff Prosser was Shadow Finance Minister. It is fair to say that the impact of Prosser on the Howard government has been slight. I suspect the same will apply to Carr in industry policy. No election has ever been won or lost on industry policy, and if there is such a role as Minister For Nothing In Particular then Carr most likely to get that. Not much “hot damn!” in that, but Labor governments tend to be cautious in their first terms. Liberal oppositions have spent a decade looking for “hot damn!” moments while other vote-changing issues have passed them by.


  14. I disagree that an ageing population benefits the Libs. The point is that those who are old enough to have voted for Menzies view the Coalition as, like, the natural party of government in Australia. Those who aren’t, who voted for Whitlam and then Fraser and then Hawke, aren’t as rusted on as the older generation. This means that the 50-somethings are less likely than the 65-pluses to overwhelmingly support the Libs even as they start to retire.

    I think a key question for the Libs is leadership and personnel. Costello is tainted pretty badly because of his unwillingness to challenge Howard. I can imagine Rudd goading him about being a spineless wimp. Costello thinks he’s the Paul Keating of the 21st century but he lacks the backbone. Abbott and Downer are unelectable. I think Turnbull is a sensible choice for them or a dark horse like Julie Bishop. My tip is that Turnbull will move over to Berowra, pushing Ruddock into retirement at the next election. Turnbull will thus have a safe seat to fight as leader. They have to clear out the dead wood from safe seats. Downer should go, Ruddock, Costello etc. and get some smart, young, right leaning, populist, centrists in these types of seats.

    The most stupid aspect of the Libs campaign, I think, was the demonization of the unions. You’d have to have the pre-accord world in the forefront of your mind to believe that a vote for Labor is a vote for union domination. Suggesting that Julia Gillard is a “fanatic” was the 2007 version of Latham’s school hitlist. Pure class warfare. People remember Hawke, Keating, Bracks, Carr, Rann, Beattie, not Norm Gallagher and Jack Lang.

    Howard’s legacy is pretty barren. GST was a good step and he could have been proud of IR if not for Work Choices. The right will appreciate that he tried to push the IR agenda further but normal people will resent it. The right will, in the long run, be disappointed in two things, though. The growth in middle class welfare under Howard – 30% rebates do nothing other than raise prices and corporate profits and increase government dependency. I hope Rudd stops using these.

    The second thing is the Future Fund. The government should never be the biggest single stock market investor in society. Greenspan was right when he criticized Clinton for doing the same thing. This is an abomination that any true free marketeer should reject out of hand. Balanced budgets were an achievement but massive unending surpluses are just stupid.

    The measure of Howard’s “economic management” legacy should be how well the economy weathers its first new crisis. If Australia sails through a Chinese recession without anything bad happening, this will be a great testament to Howard. That Australia did so well in 2001, though, was because of Hawke/Keating’s legacy and the entry of China into the WTO, not any amazing action taken by Howard.

    The last point I want to make is that the Libs always turn on their leaders which must be difficult for Howard to swallow. Howard will never appear with Fraser or Hewson or Costello at future Liberal launches the way Whitlam, Hawke and Keating did recently. Labor doesn’t have to write a negative history of the Howard years – the Libs will do that perfectly well on their own.


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