An article in the latest issue of federal Treasury’s Economic Roundup publication argues for the importance of evidence in ‘creating a broad base of community support for reform’. The authors, Joann Wilkie and Angelia Grant, use the economic reforms since 1983 as their case study.
I’ve no doubt that evidence and analysis was important in shaping elite views on economic reform. I’m not sure, however, that they make a convincing case on public support for the reform process. The main reason for saying this is that the polling we have suggests that the public opposed most of the specific economic reforms, with mixed survey results on their attitudes towards the whole reform process.
The problem is evident in contradictions within the article. The authors say that influential experts and commentators were important in ‘convincing the public to support tariff reform’. But their own data a couple of pages on clearly shows that most people continue to support tariffs. Wilkie and Grant note, as I did in a 2004 article, that polling does show understanding of the argument that free trade benefits consumers. However, on my analysis concern about jobs is the over-riding consideration.
Similarly, privatisation almost always polls poorly, and while there were some mixed results in early industrial relations polling, opinion was strongly against WorkChoices.
Though Wilkie and Grant note the problems of the benefits of economic reform being long term, it took a very long time to get positive poll results from the reform package as a whole. While Michael Pusey drew some very imaginative inferences from his mid-1990s survey data, only a minority of his respondents were clearly positive about economic reform, with the largest group being neutral. In a 2001 Saulwick poll there were more positive people, but still a minority. Only in a 2004 repeat of the Saulwick poll did a majority, 52%, declare themselves ‘better off’ as a result of economic reform.
Clearly the politics of this are more complicated than offering policy-related evidence, of which plenty was available, or of offering compensation or transitional assistance (another Wilkie and Grant suggestion), on which many billions were spent. The apparent paradox we need to explain is that despite the negative polling on economic reform, few economic reforms became major political issues and the period of reform was one of high stability in Australian federal politics. After three changes of government in the last eleven years of the ‘Australian Settlement’ (1972, 1975, 1983), there were only two in the 24 year period of reform (1996 and 2007).
I think several factors were important. One is that though the means of economic reform were radical, the goals were not. Restoring Australian employment and prosperity were completely mainstream objectives. If we examine the issues surveys of the 1980s and 1990s, economic issues were by far the most important issues or problems voters wanted governments to fix. Generally voters know very little about policy detail, but they can identify problems.
On this theory, the evidence that counted electorally was not on any of the specific reforms. Rather, it was the evidence of Australia’s improved macroeconomic performance. Being part of daily experience, and regularly reported in simple summary numbers, this is evidence that can sink in even among ill-informed voters. So long as the macro numbers were trending the right way, it was evidence that whatever the politicians were doing was working.
Another important factor was the strength of the elite consensus, which meant that for many of the reforms debate did not spill over into an electoral contest. This meant that even if the public did not support the reforms, there were limited electoral alternatives. Economic reactionaries such as One Nation and the Greens did increase their support in the 1990s, but never threatened the major parties in a fundamental way – perhaps partly because neither party had any credibility at all as macroeconomic managers.
The one clear case in which an economic reform had significant negative political consequences was WorkChoices. Two of the factors which had helped earlier economic reforms, the prominence of economic issues in the problems voters wanted solved, and elite consensus, were absent. And though the actual number of losers wasn’t likely to be large in the context of the total electorate, because many people feared that they might be losers it had greater direct impact on voters than earlier reforms that were concentrated in particular industries.
While of course policy evidence should be made available to the public, and the case for economic reform argued in public forums, the main influence of policy on the politics of economic reform was indirect, via its role in maintaining elite consensus through the initial phases of reform.