The Coalition must fix its fundamental flaws

Serious mistakes in infrastructure funding toppled Coalition governments in Queensland and Victoria, but the federal government is plagued by a more profound problem.

The Coalition governments in Queensland and Victoria were not simply defeated because of the unpopularity of Tony Abbott. In fact, they both made the same basic error that had nothing to do with the Prime Minister.

Hopefully the states' mistakes will transform future infrastructure funding. Only if the community is involved in providing the financing will there be support for controversial projects.

Not surprisingly, federal cabinet members are feeling frustrated by the mistakes of Tony Abbott. But the mistakes made by cabinet are far more serious than any mistakes that were made by Tony Abbott. All cabinet members need to examine carefully the beams in their own eye.

When the Victorian government was defeated (How Abbott became political poison in Victoria, November 26), former premier Dennis Napthine ignored the fundamental infrastructure changes that the ADC infrastructure Summit had pinpointed last April (A new way to fund rail, roads and hospitals, March 17).

The Napthine government was planning a major East West road and tunnel project that was opposed by the ALP. Foolishly, Napthine did not mobilise the vast army of self-managed funds that were desperate to gain a better income through infrastructure investment.

Had he done so, the push by the retiree investment community would have been overwhelming and he would almost certainly have been re-elected. Instead, Napthine did a secret deal with a group of big institutions and the public gained no benefit from the financing.

You would have thought that outgoing Queensland Premier Campbell Newman would have learned from Victoria. But no -- he pressed on with a massive plan to privatise power and other government assets without inviting the Queensland community to participate in the financing benefits.

Once the ALP opposed the sales, Newman became like Napthine and found himself in trouble trying to sell key assets to institutions and overseas investors.

The ADC summit had got it right: modern infrastructure funding must involve the capital of the community. The rise in self-managed funds makes it easy to arrange.

In the case of Tony Abbott, he led the Coalition into power on the back of the most detailed plan ever prepared by an Australian opposition party. The main author of the plan was Andrew Robb and he should have been made treasurer or finance minister to make sure it was introduced. Instead Joe Hockey's view prevailed and Robb became trade and investment minister, where he has done a fine job -- yet big chunks of his plan were mothballed.

Had he been closer to the driver's seat, Robb would have made sure that the enormous savings that came with ending education and health duplication with the states were delivered in the early months of the Abbott government, so it could deliver big expenditure savings without affecting services. The cabinet was snowed.

As we are seeing in the UK, employment is being generated by small enterprise. In that regard, the Coalition had brilliant policies. The existing independent contracting rules made by John Howard would have been enforced and fair contracts between large organisations and small enterprises would have been implemented with enormous boosts to employment.

But the Abbott cabinet fiddled and the economic boost and big savings were lost. Instead of the carefully prepared Robb plan, Treasurer Joe Hockey went for a series of badly thought-out Treasury ideas and closed the motor Industry, which was not on the plan. 

Had the government implemented its plan, the Senate problems would have been greatly reduced and it would now be in a much better position to cope with the deepening resources crisis, which requires carefully explained policies that were not foreseen at the time of the plan.

Sacking Tony Abbott will not help the Coalition unless it also makes fundamental changes and goes back to the full implementation of the plan. Then it needs to market the extra measures required to cover the much greater than expected loss of income that will stem from the resource slump and somehow explain the higher car and other prices that will come with an end to local manufacturing and the lower dollar. 

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