Partisan stories leave Australia defenceless

Both sides of politics have an interest in pretending Australian prosperity was their handiwork. But before long, global headwinds will reveal Australia’s true position.

The lead-up to this year’s federal election will be bitter, divisive and far too inward looking. That is, the solutions to Australia’s problems will be falsely imagined to have been identified by the Gillard or Abbott teams of policy makers, when in reality our fortunes are largely being determined offshore.

The sickening story of a London ‘terror’ attack – at the time of writing thought to be an attempted beheading of a soldier by so-called Islamists – will play its brief role. Most likely it will stir familiar racist sentiments in both directions and put the frighteners on world markets.

However, when that story has died down (and let’s hope that is soon), frightening global forces are at work that will make our next prime minister look less like a masterful nation builder, and more like the Lilliputian captain of a paper boat adrift in Bass Strait.

We’ve put so much energy into arguing over the budget deficit in past weeks, over ‘cutting spending to the bone’ or ‘Labor waste’, that the global stage is all but forgotten.

On the conservative side of politics, there is no appetite for any version of recent history that foregrounds the worst financial crisis since the Great Depression –  or more worryingly, any acknowledgement that the GFC really isn't over.

On the progressive side, there is very little credit given to China’s role in getting us through that crisis compared with the mutual backslapping of what remains of Labor’s leadership team. 

If our biggest customer wasn’t a 50 per cent centrally planned economy, willing to pull out all stops and buy our coal and iron ore at sky high prices, nothing Labor could have done would have saved us.

And nor will the Abbott plan save us if things turn nasty. Australia has become a virtual casino for global traders looking for solid assets in a world awash with newly minted money.

Quantitative easing and competitive currency devaluations – a game we are too small to join – are helping keep our currency too high and our exporters in dire straits.

And if it’s tempting to think that can’t get any worse, it’s important to heed a warning today by  special adviser to the OECD's secretary-general, Adrian Blundell-Wignall, whom The Australian reports is worried about a global bond bubble that will cause a ‘new GFC’ when it bursts.

Even if that bearish outlook is wrong, the Bureau of Resource and Energy Economics has officially declared the resources ‘super cycle’ to be at an end in 2013, reflecting the decisions by mining companies to cancel around $150 billion in investments due to weakening commodity prices.

As tempting as it is for partisan commentators to blame ‘the worst government ever’ for those cancellations, the reality is that the Gillard team is little more than gnats on the rump of the mining industry – as the Abbott team will be too.

That’s because the chain of events that will hit the Australian economy next year starts so very far away (if anywhere is ‘far away’ in the internet age). As Blundell-Wignall points out, southern Europe is reaching crisis point – well over 50 per cent youth unemployment will see a generation try to find work just about anywhere else. 

And the disaffected youth that cannot do this will be extremely easy to radicalise with whatever ‘ism’ is in vogue – the apparently psychotic criminals perpetrating the London atrocity may well fit this mould.

While northern European countries are doing much better, the EU is in no position to resume its place as China’s biggest export destination, and the Chinese manufacturers that supplied it are in no position to go on demanding Australian energy and mineral resources at sky-high prices. That’s been obvious to the miners for some time.

The Communist Party’s official growth data, now below the magic 8 per cent level, is an acknowledgement that mandated investment and consumption cannot go on forever. Beneath the surface of any centrally planned economy, market forces lurk like hippos, visible only by their nostrils – slow to anger, but ferocious when they emerge.

But why would either Gillard or Abbott acknowledge the very real headwinds we face in 2014? That’s not going to win any votes.

Right-wing columnist Andrew Bolt today is complaining, again, that “neither party promises to slash the recklessly high immigration levels that have us hurtling to a population of almost 40 million by 2050”.

Well that’s because neither party wants to crash the housing market. Nor does either party want to stop the flow of young, skilled workers Australia will need to care for the greying population of 'migrants' already here – and most of us match that description to a degree.

No, the major parties have an interest in pretending that any Australian success was their handywork, and any calamity a product of ‘global forces’.

But that doesn’t mean those forces shouldn’t be front-of-mind and page-one newspaper fare. 

As the annus horribilus of 2014 unfolds, with all the turmoil of terror, war, political unrest and fiat-money chaos, it’s up to journos and expert commentators to behave responsibly and say what the pollies can’t. That is, to lay the blame/credit for what the next prime minster can control at her/his feet, and fully acknowledge the forces beyond his/her control.

That is not what has happened through the Rudd/Gillard years. The partisan left might think it poetic justice if this trend continues through a likely Abbott first term. 

Perhaps so, if it's justice for political operatives one cares about. That really shouldn't be our biggest concern.