Recent years have been tough for real Liberals — people who prefer small government, market economics and respecting the basic institutions of public life. And it’s just gotten a lot tougher.
The last actual Liberal leader was Malcolm Turnbull, who was hemmed in and then ousted by right-wingers and climate denialists backed by the sectional socialists of the National Party. The Morrison government — putting aside the pandemic spending — permanently increased the size of government in Australia to over 26% of GDP compared to below 25% under Turnbull. Morrison’s energy policy, such as it was, consisted of trying to prop up coal-fired power and subsidise gas — not to mention Morrison undermined several tenets of Australia’s basic system of government with his secret self-appointments to ministries.
On coming to the leadership, Peter Dutton backgrounded the media that he was far less right-wing than he was portrayed as — hadn’t he, after all, devised the plebiscite as the way to get marriage equality through under Turnbull? But while Dutton as an MP predates the merger of the Liberal and National parties in Queensland, he is the perfect representation of that political union — which is the socialism and populism of the Nationals masquerading under the Liberal name.
It shouldn’t therefore be a surprise that the first LNP leader of the federal Coalition — Dutton is the first non-NSW Liberal leader of the Coalition since the Downer disaster back in the 90s — has lurched the party sharply in a Nationals direction. As Crikey noted last week and other outlets are slowly realising, Dutton has proposed a truly unprecedented direction for the federal Coalition — not merely has he proposed a colossal infrastructure project that, on a sensible costing, would cost the best part of $100 billion, he has proposed an entirely new sphere of Commonwealth activity: power generation. Power generation has traditionally been left to the states, and nearly all of them have long since privatised it, leaving state governments as regulators.
Dutton doesn’t just want to move the Commonwealth into what used to be a state sphere, he wants it to be government-owned.
A coalition government under Dutton would almost certainly try to pretend that its $100 billion would earn a return on capital, while, hilariously, insisting that nuclear power would be cheaper than renewables — nuclear is prohibitively expensive even before you insist it generates a rate of return of the long term bond rate plus 5%. But this would enable it to keep the spending required on the capital side of the budget. It pulled the same stunt with the National Party’s last massive boondoggle, the $31 billion inland rail, which will never generate a cent of return for taxpayers. But whatever the accounting trickery in the budget papers, it will still mark a dramatic expansion of Commonwealth spending, in an area where the Commonwealth has zero experience or expertise.
It’s funny how partisanship warps people’s intellectual consistency. You’d think the man most associated with the privatisation of electricity generation in Australia, the very antithesis of public ownership of power generation, would be aghast at not only a state government but the federal government entering public power generation. But Jeff Kennett, it turns out, is a big fan of Dutton’s proposal for publicly owned nuclear power. And Judith Sloan, who is usually intellectually consistent even if it places her at odds with the editorial line of the Murdoch press, turns out to be a fan of public ownership too — inconveniently, just a couple of weeks after railing against public subsidies for renewable energy.
Another problem with Dutton’s nuclear fever dream has been pointed out by Turnbull, but has attracted little coverage: it is fundamentally at odds with Australia’s comparative advantage. The sun and wind are bountiful and easily accessed in Australia, more so than virtually anywhere else in the world, and with storage either via batteries or pumped hydro, that comparative advantage in energy can be exploited for cheap power. Nuclear, which is many times more expensive to build, is always on and can’t be shut down whether power is needed or not, is the exact opposite.
Nuclear power is a lot like Labor’s Future Made In Australia, another policy that defies Australia’s comparative advantage. Both are old ideas — from the days when we relied on always-on thermal power and made stuff, no matter how much more cheaply it could be made elsewhere. Australia’s advantage lies in plentiful renewables, as it lies in extractive industries, education, lifestyle and its high-quality public and civil institutions. Both Dutton and Labor instead want to pursue big dreams of government intervention in pursuit of 1970s ideas.
The Liberal Party under Dutton is thus, for all its climate denialism and attempts at product differentiation, ideologically the same as Labor — big government and government-industry intervention, ignoring our advantages. At least with Labor such an activist conception of government is in the party’s DNA and not only does it not apologise for it, it celebrates it.
But where to for real Liberals who don’t want an endlessly expanding government extending itself into new fields of activity, who want a market economy allowed to operate without massive intervention? Are genuine Liberals getting into public life just to be pale versions of the Nationals, to preside over massive economic intervention and a permanently enlarged government? That’s the future while an LNP figure like Dutton leads the party.
Is Dutton’s Commonwealth-owned nuclear dream hypocritical policy? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.
