chameleon

Which chameleon do you prefer? - Paul Sheehan - Opinion - smh.com.au

When Federal Parliament resumes for the first session of 2009 tomorrow, two large egos will face each other across the red chamber; two men with Napoleonic habits of thought and action. Only one will survive the battlefield defined by the global recession.

Kevin Rudd became the Prime Minister after a campaign in which he repeatedly described himself as an "economic conservative" and mimicked the economic policies of the incumbent, John Howard. Rudd had the good fortune to inherit a well-stocked cupboard left behind by the former treasurer, Peter Costello: a healthy banking sector, zero government debt, a budget surplus, the Future Fund, the Higher Education Endowment Fund and the Communications Fund. Combined they provided a massive financial buffer of about $90 billion.

It was greater than most governments had at the outset of the global recession. As soon as the financial freeze hit, Rudd threw $10 billion up against the wall in an effort to look decisive. As the former Labor treasurer of NSW, Michael Costa, tartly wrote last week: "Rudd's Australian Business Investment Partnership, along with the bank deposits fiasco, the wasted $10 billion fiscal stimulus, and selective industry protectionism, displays a pattern of gimmicky policy responses."

Now Rudd is offering himself as an economic oracle, by way of a 10,000-word analysis to be published in The Monthly this week. Like much of what Rudd has said since becoming Prime Minister, the piece is an inflated balloon of self-promoting spin. He portrays himself as the champion of "social democracy". Yet the closest we've had to a Labor-led social democratic government in recent years has been in Britain, where the Labour Government went into this recession in heavy deficit. No Costello buffer. Britain is now in severe recession.

Rudd evidently intends to dismiss the financial legacy of the Howard/Costello government, and the Liberal opposition, as "market fundamentalism". So far his Government has done a reasonable job in responding to the global recession, although the response of the Opposition Leader, Malcolm Turnbull, has been more nuanced, measured and far less grandiose.

Rudd is far from alone. At the World Economic Forum in Davos, Switzerland, over the past five days, a succession of speakers expressed concern at the reflexive hyperactivity of governments in reaction to the crisis, embarking on misdirected spending sprees that will prolong the process of recovery.