Opinion
This week it’s immigration. Last week, inflation and interest rates. The week before, the existential threat of AI. These issues are never neatly confined to a single political week, of course. They don’t come and go away. They’re more like the clamour of an unruly classroom: always rumbling away, driving the background noise from which there is no respite, occasionally piercing the din to demand attention like fingernails down the blackboard. But look at them all at once, and you see why we have the political mood we do: fevered, anxious, tumultuous. Desperate, really.
That’s because none of these is a discrete issue. They are instead wickedly integrated, such that they crash into one another, each demanding a solution that has a real risk of making things worse. I don’t mean to say politics was ever neat, or issues hermetically sealed. I mean only to say we’ve approached a critical point where the trade-offs seem intolerable. And that shows up politically in voters’ desire for constant change.
Let’s start with inflation. It’s about the worst economic problem a government can have because the responses we demand either make the problem worse and more enduring, or plunge us into acute misery. We demand cost-of-living relief from government, which is inflationary. Or we demand reduced government spending – though very rarely by specifying the cuts – which will almost certainly deny people cherished services. The biggest growth areas of government spending have been the NDIS, health, aged care and childcare. If the government slashed these, it would receive no thanks. Even its huge NDIS cuts don’t reduce today’s spending: they mean NDIS spending still grows, just slower than originally forecast. Still, they bring political pain.
But cut too much, or at the wrong time, and you end up in recession. Last week’s economic news was horrible because of its mix. Normally when you have an inflation problem, you have high economic growth and low unemployment, so removing government money from the economy should do the trick. But right now, economic growth is slow and unemployment is the highest it has been in five years. House prices are falling. One clear possibility, which the Reserve Bank acknowledges, is that the economy is about to dip, and that the recent interest-rate hikes haven’t yet done their work. Maybe that’s wrong. But if it’s right, and you slash government spending to fight inflation, the whole thing might crash.
Especially if you’re about to slash immigration. We’ve already seen One Nation wave away economists who say its policy of depopulation would cause a recession. Now the Coalition is waving away similar warnings its newly announced policy – the greatest cut in Australian history, it boasts – would damage economic growth and leave us with a skills shortage. Labor’s version diminishes the workforce on which rural businesses especially rely. Economists broadly agree this reverse auction carries serious economic risk.
The central problem is this: anything more than slight economic growth in our economy causes inflation. As things stand, we have a choice between a stagnant economy and an inflationary one. The solution is to boost productivity, which the Reserve Bank lamented last week “is doing nothing”. But throughout human history, advances in productivity have come overwhelmingly from new technology, like the plough or the steam engine. Today’s version is AI, which is why governments are so keen to extract its benefits. The Albanese government’s rosy productivity forecasts rely on it. The problem, as the Reserve Bank has warned, is it might turn out to be a bubble. Oh, and that it might kill us all.
To summarise then, we have a diabolical economic problem that is inflicting all sorts of pain, and our response is either to reach for tools that will probably make it worse, or to seek refuge in what might destroy us. Worse, this is a global problem, or at least a common one among similar countries to ours. An Australian problem suggests an Australian cause. One like this suggests something far deeper: a system that has reached critical instability, offering only bad choices.
This is a Gordian knot of a world. Whoever can untie it will rule. And so, voters keep voting for those who say they can. Typically, these are politicians who promise to restore control. Typically, they can’t, because things aren’t nearly so controllable. So, Brexit – “Take Back Control” – leaves behind a weaker economy and (ironically) higher immigration. Donald Trump wins a cost-of-living election promising tariffs, and makes things more expensive. Now, Australian parties are vying to respond to economic difficulties with policies economists consider self-harming, or by plumping for a technology we keep hearing might harm our very existence.
We characterise this in all sorts of ways. The rise of the right. The march of populism. But these might be symptoms of a simpler condition: a desperate thirst for change. Barack Obama won as the change candidate. Then, so did Trump. Rudd, too, except we got so rapidly disillusioned with our prime ministers that parties started rapidly cycling through them. Now that’s what Britain is doing. Meanwhile, we gave Labor a thumping majority, and in barely a year have sent it to historic polling lows.
This isn’t a story of people knowing what they want and voting for it. It’s a story of people rejecting what they have, then rejecting whatever they’ve chosen to replace it. Trump is an obvious case, twice now winning spectacular victories then becoming extremely unpopular. But even that story is complicated. New polling for the American midterms shows Democrats leading in several Republican states they are meant to have no hope of winning. But it’s also showing Democrats battling in states they should win easily. There’s an anti-Trump mood, no doubt. But it’s not the only rejectionist mood in town.
I suspect we’ll keep doing this until a new political age finally arrives. Until then, I see two implications. One, that it doesn’t get you very far to point out that the insurgents have no solutions. Not when people feel the establishment doesn’t either. Two, that the surest way for the insurgents to crash is first for them to win. Then, if they crash, it’s not normality that will have been restored. Disruption would just have found a new home. And change will have remained the only political constant.
Waleed Aly is a broadcaster, author, academic and regular columnist.
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Waleed Aly is a broadcaster, author, academic and regular columnist for The Age and The Sydney Morning Herald.From our partners
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