Folly Of Howard's Radical Reversal

by Paul Kelly - The Australian

The latest bizarre twist in the 2007 election contest is John Howard's decision to enshrine at the centre of his strategy an assault on Kevin Rudd for his policy of co-operative federalism.

On display is Howard as nationalist, populist and centralist. It is revealing that with the political temperature so hot, it is these qualities in Howard that have emerged under pressure. Not much talk now of Howard as a conservative shadow of his hero, Robert Menzies, an idea that was always misconceived.

In effect, Howard seeks re-election on a platform that repudiates one of the sacred dogmas of the Liberal Party since its inception. This is no overnight trip to Damascus. One of the historic missions of Howard's prime ministership has been to free the Liberal Party from its emotional and political chains of state loyalty.

It is a further sublime irony that Howard campaigns against Rudd with the accusation that this ALP leader from Queensland, once the policy architect behind the Goss government, is not fit to become PM because he is "handcuffed to the states". The audacity of the charge betrays the desperation of the Prime Minister's plight.

Rudd's sin is his plan to work with state governments. Howard lays out his accusation: "He (Rudd) can't really do anything without the states saying, 'Yes, Mr Rudd, you may'. He's thrown in his lot with the state premiers." Such behaviour, once seen by Liberals as a virtue, is now a shocking vice.

Howard and Rudd enter this campaign with positions on federalism at variance with their party tradition. This reflects the power story of the past decade: the Liberals have been dominant in Canberra and weak in the states, while Labor has been subservient in Canberra and supreme in the states. The experience has changed both sides.

Howard's attitude towards federalism is driven by his conviction that state loyalties are fading and national sentiment is growing. He finds this at football matches, on talkback radio and during his frequent visits to the regions. He reports that people look to the national rather than state governments for answers.

His political rationale for redefining Liberal philosophy is illuminating and was outlined in his April 2005 Menzies Research Centre oration, when Howard rejected claims of a new centralism but declared that as an Australian nationalist he would intervene on behalf of individuals to improve their choices, freedoms and opportunities. This is his bedrock philosophical position. Now it is being given a new and sudden urgency.

Howard and his advisers are driven by the prospect of wall-to-wall Labor governments if Rudd wins.

In many ways this is Howard's final political resort. His re-election strategy is to govern from strength, to intervene to override the states and territories, invoking the public interest in water, Aboriginal children, health and education.

This technique is fuelled by political desperation: a compulsion to depict Rudd as a weak leader beholden to state premiers just as he is beholden to trade union leaders over industrial relations. Howard's pitch, ultimately, is that Rudd is too soft and pliable to run Australia.

It is too easily forgotten that on the day he was elected ALP leader last December, Rudd gunned Howard over federalism. Rudd nominated as one of his "fork in the road" issues the need for "fundamental reform" of the federal system, and this followed his 2005 statement that "the challenge for a future Labor government will be to rebuild the federation". For Rudd, this is a policy and a tactic.

It is a policy because economic reform in Australia is now about environment, energy, transport, communications, health and education, and that dictates, more than before, the states and commonwealth devising joint solutions.

It is a political tactic for Rudd because, facing six ALP premiers, he had to make them part of the solution to pre-empt Howard depicting them as part of the problem.

A further irony in this situation is that Howard, over the past three years, has conducted his own policy of co-operative federalism.

Initiated by former Victorian premier Steve Bracks and embraced by Howard, co-operative federalism reached its most recent zenith in the February 2006 agreement by the Council of Australian Governments on a new national reform agenda. The result was a series of love-ins between Howard and the ALP premiers. Bracks called this the "third wave" of economic reform. Howard branded the COAG meeting of mid-2005 as "the most productive and co-operative that I have attended" in 10 years of government.

Yes, that's what Howard said two years ago. It mirrored his political belief: the public hated buck-passing by federal and state leaders and the states had to become genuine parties in the reform agenda.

Such sentiments have collapsed. They succumbed to a greater political need. Under Rudd's alliance with the premiers, Labor has taken ownership of the co-operative federalism idea (for the time being) and Howard has reverted to the role of muscle man and enforcer.

Sometimes this is highly desirable (witness Howard's new national IR system) but sometimes it is absurd (witness Howard's Tasmanian hospital intervention). The latter was a rare case of the Tasmanian Government acting responsibly after an inquiry and moving to rationalise medical services in the state's northwest. The Prime Minister's intervention is decoupled from any broader national hospital policy.

The lesson is that Howard's pragmatic attitude towards federalism is driven by politics. He has no interest in reform of the federal system. His outlook has varied between action and inaction depending on political advantage, with the consequences of his action usually being to increase federal powers.

In his 2005 Menzies Lecture, Howard said that two areas of co-operation were water policy with the states and indigenous affairs with the Northern Territory. But politics has transformed both areas into direct assertions of federal power.

Note that Rudd, under pressure, usually backs such assertions. Although Rudd champions co-operative federalism, he is reluctant in the extreme to denounce Howard for power-grabbing.

Meanwhile, Labor has released a discussion paper to give the states more scope in handling specific purpose payments from Canberra. Rudd's intention is to make COAG more important.

Labor's federalism spokesman Bob McMullan says Howard has a political tactic but no governing model.

"It's a helluva way to run the country," McMullan says.

"The blame game does resonate but Labor needs to stay positive and constructive."

The truth is Howard and Rudd are not as far apart as they appear. Both favour a mix of co-operation and assertion, according to events.

Neither has any plan to tackle the revenue-raising imbalance at the heart of the federalism problem.

In the election interim, Howard will play a brand of federalism politics that is neither likely to work nor to endure as a template for governance.