14 November 2010

The trouble with Presidential rule

I had another of those “here we go again” moments when I read here in yesterday’s Weekend Australian that the Agriculture Minister, Joe Ludwig, is going to fast track a review of a pilot scheme for drought assistance that is currently under way in Western Australia.

The aim is “to force farmers to improve business models rather than simply rely on interest rate subsidies and cash payments” and thereby “reduce drought assistance payments to farmers the next time the nation is gripped by crippling drought”.

The article quotes Executive Director of the University of Adelaide's Environment Institute Mike Young as saying that taxpayer-funded drought assistance schemes need to be overhauled.

"The rationale to going to (drought) preparedness is to create a level playing field between those who do preparation and those who don't," Professor Young said.

"One of the biggest criticisms is that the previous approach created policy-induced drought.

"People who otherwise would have conserved feed, put funds aside to carry them through a drought, decided instead not to do that, to go for assistance in times of hardship."

All very well and good, but we have been around this track before. When I was Secretary of the Department of Primary Industries in the first two years of the Howard Government (1996-97), under National Party Leader John Anderson, we undertook as a high priority a thorough review of drought (and other natural disaster) assistance policy with the aim of putting it on a more business-like footing. The philosophy, strongly backed by John Anderson, was that people in the farming sector had to understand that as far as the Federal Government was concerned farming is a business, not a lifestyle choice, and the aim of policy will be to shift much more of the responsibility for risk management from the taxpayer to the individual farming enterprise.

One of our particular targets was to get rid of interest rate subsidies, which were seen (correctly) as thoroughly bad policy – the most assistance goes to the most indebted farmers.

Many smart people worked on the new policy framework for many months, and when finally Cabinet signed up we and all the troops had a cup of tea and a sticky bun in the office to celebrate. We had got some good policy up, we had really made a difference.

That difference lasted about five minutes.  If memory serves, not long afterwards there was a flood in the Namoi Valley. John Howard put on that ridiculous Akubra, his moleskins and his elastic-sided boots and went up to Narrabri or somewhere to get himself on television looking caring and concerned. A farmer gazing out over the flooded fields looked him in the eye and said, “Mr Howard, we are going to need an interest rate subsidy to get through this”, to which Howard responded, on the spot, “Done!” And so months of work was blown away in an instant.

I had another such experience when I was Secretary to the Department of Defence.  I was involved in the first face to face meeting with my PNG counterpart since Sandline, so this was an important meeting and we were keen to re-establish an appropriate defence relationship with our nearest neighbour.   This necessarily involved getting the Australia-PNG Defence Cooperation Program back onto a sound footing.

When we came to discuss this my counterpart (whose last assignment had been Deputy Secretary to the PNG Ministry of Finance) requested Australian financial assistance for uniforms and rations for the PNG Defence Force.

I responded that I did not think it appropriate for PNG to be dependent upon us for such basic running costs as feeding and clothing the troops. I noted that there were funds in the PNG defence budget to pay for various capital works and for training, and said that we would be prepared to fund some of this expenditure to free up funds from within the budget to enable the PNG Defence Ministry to pay for uniforms and rations itself. It wasn’t about the money, I said, our main concern was to get the principles right. I said that part of the deal would be that my counterpart would have to persuade his former colleagues at the Finance Ministry not to respond to our funding by withdrawing funding from the PNG defence budget. All this was amicably agreed.

Only a few weeks later John Howard went to Port Moresby to meet the new PNG Prime Minister, Sir Mekere Morauta.  During their meeting, Morauta said to Howard words to the effect, “Mr Prime Minister, we need your financial assistance to pay for rations and new uniforms for the PNG Defence Force”. “Sure, no problem”, replied Howard, so we ended up paying for the rations and uniforms as well as the capital items and training, and were no further forward with putting the Defence Cooperation Program on an  appropriate footing.

The underlying problem with both of these episodes was that Howard’s style was Presidential, not Prime Ministerial. He was the boss, not primus inter pares leading a group of colleagues in Westminster style Cabinet Government, and so could decide things on the spot.

The great strength of Cabinet Government is that, when it is working, it is systematic and orderly, everyone with a stake in the issue is consulted before a decision is made, and when a decision is made it sticks unless Cabinet decides to change it. It sounds unexciting, and often it is, but it offers the prospect of erecting and maintaining a coherent framework of public policy. The Cabinet colleagues are important not just because they are senior people in the Government, but because they represent at the Cabinet table important domains of Government policy and administration  that need to be considered every time a decision is made.

We lost the art of Cabinet Government during the Howard era, and don’t look like getting it back. Rudd had no idea, Gillard thinks she wants to run proper Cabinet processes but neither she nor anyone around her has any idea what they would look like because it is so long since they have been tried that the institutional memory has all but vanished.

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