The Proper limits of government
The Weekend Australian, April 5, 2014
IN his January 2012 State of the Union address, President Barack Obama made a brief excursion across the ideological aisle. “I believe what Republican Abraham Lincoln believed: That government should do for people only what they cannot do better by themselves, and no more,” Obama said.
In Canberra a week later, Tony Abbott addressed the National Press Club as leader of the opposition.
“The current leaders of the Labor Party have failed to understand what Abraham Lincoln knew in the marrow of his bones: that government should do for people what they can’t do for themselves and no more,” he said.
Lincoln’s 1856 epithet, as paraphrased by Obama, has become shorthand for an argument about the size of government that is emerging as the new political fault-line in federal politics.
It turned up again in October, this time unattributed, in the National Commission of Audit’s guiding principles. Governments should live within their means and spend taxpayers money responsibly while remembering that they “should do for people what they cannot do, or cannot do efficiently, for themselves, but no more”.
There is every indication that former Business Council chairman Tony Shepherd, who led the government’s National Commission of Audit, has taken Lincoln’s message on board.
The commission’s report will be far more than an exercise in bean counting; it will be a manifesto for a government that knows its limitations and allows its citizens space exercise personal responsibility.
It was the core idea underpinning Joe Hockey’s April 2012 speech on the age of entitlement. “As a community we need to redefine the responsibility of government and its citizens to provide for themselves,” he said.
In the election campaign Abbott returned to the theme time and again, saying: “Government’s job is rarely to tell people what to do; mostly, it’s to make it easier for people to make their own choices.”
The arguments over debt and deficit that dominated the election were merely a proxy war, providing a bridgehead for an agenda that emerged on the centre Right during Labor’s term in office.
In part it was a reaction to Labor’s renewed Keynesian tendencies and its questionable attempts to stimulate the economy in 2008 and 2009.
This is not, however, a mere re-run of the decades-old debate between Keynes and his interlocutor Friedrich Hayek.
The struggle of European economies to overcome their crippling levels of debt have served as a cautionary tale that reinforces a founding Liberal Party principle: that no nation has yet managed to tax or borrow its way to prosperity.
“The Magic Pudding is a fable,” Shepherd told a hostile Senate select committee into the audit commission. “Unless we fix this problem now, we will consign to our children and their children a legacy of unsustainable largesse.”
Rounding off the Liberals’ imperative to put limits on the scope of government is an emerging concern in a number of Western democracies about what is sometimes called the nanny state.
Brendan O’Neill, the British libertarian, told a Centre for Independent Studies event in Sydney on Thursday that “nanny state” was too soft a term for a breach of the principle of individual liberty.
“What we have today are governments that have shifted from focusing on infrastructural issues and economic matters towards obsessing over individuals’ behaviour, thoughts and relationships,” he said.
“We have gone from a situation where governments concerned themselves with macro issues to a situation where governments micromanage the moral existences of their citizens.”
If the hallmark of the 2007-10 Labor government was state intervention in the economy, Labor’s second-term agenda was intervention in the business of everyday life.
The cumulative effect of micro-policy initiatives such as plain-packet cigarettes and clumsy subsidies to installers of digital set-top boxes and the failed attempts to extend human rights legislation and regulate the press, roused the dormant libertarian instincts of the Right.
Grand schemes such as education reform and the National Disability Insurance Scheme, legislated without any concrete ideas how to pay for them, have added a fiscal edge to the debate.
The hardening of the lines between the two sides of politics was not lost on voters in September. Almost a third of voters believed there was “a good deal of difference between the parties” in the Australian Election Study conducted at last year’s election, the highest proportion since 1993.
The Prime Minister’s critics on the Left are quickly coming to terms with the new political paradigm that found form in the terms on reference and composition of the audit commission.
Australia Institute director Richard Denniss said he detected “a harder, ideological edge” that will “unhelpfully reduce the credibility of their findings”.
“If this is supposed to be a dispassionate assessment, why is there so much passion in the terms of reference?” he told Inquirer.
“I find frustrating that successive governments feel obliged to create a sense of financial panic that gets in the way of having a sensible conversation.”
Denniss articulates a firming narrative on the Left that agrees that government services must be provided efficiently but baulks at the idea that small government is automatically better government.
Cheryl Kernot, the former Australian Democrats and Labor politician, now director of social business at the University of NSW’s Centre for Social Impact, says while governments should be “vigilant guardians of best practice”, she fears a the consequences of retreating from the social sector.
“Smaller government should never be at the expense of basic obligations to its most disadvantaged citizens,” she said.
The sealing of ballot boxes in Western Australia this evening will give the government clear political space to release the commission’s report.
In World War II, the period from September 1939 to May 1940 came to be known as the phony war before the real action began. For future students of Australian political history, September 2013 to May 2014 may be regarded in a similar light.