Abbott and the placebo effect

This sums up Tony Abbott and his approach to finding solutions to the condition of the electorate.

Mr. Abbott is a placebo politician. He brilliantly offers an antidote for those wishing and hoping for a solution to all of their ills and he shows that he feels the electorate’s pain. But for the man who is likely to be Prime Minister at the end of 2013, the substance of Mr. Abbott’s policy medicine is all sugar and little in the way of an active ingredient.

Indeed, some of the ills that the electorate feels are fabrications of Mr. Abbott himself or at the very least, are a magnification of pea-sized issues that Mr. Abbott says are the curse of the people brought on by Julia Gillard and the worst government in Australia’s history.

Such is Mr. Abbott’s political skill that in addition to manufacturing the problem, he simultaneously offers a solution. He’ll “stop the boats”, stop the “toxic carbon tax”, “slash wasteful government spending” and eliminate the “mountain of government debt”, even though each of these issues is small beer in the scheme of national well-being, growth and fairness for the local population.

It is natural and understandable for much of the electorate to hanker for a saviour, for someone to give them the solution to their problems. The electorate seldom, if ever, realises that no government can do much about their specific problems. Sometimes people are simply victims of plain bad luck or suffer the consequences from self-imposed discomfort like excess consumption, which creates an illusion of cost of living pressures.     

In terms of the events that are high on Mr. Abbott’s political agenda at the moment – issues such as boat people, government debt, the carbon price and electricity prices – the impact of each on individuals from each is small. It is unlikely these would be issues if Australia’s economy was like that of the UK or Greece, for example.

The fact that the things that truly matter like the economy, jobs, income growth, education and health are all in very good or excellent shape means that Mr. Abbott can dredge up mildly irritating or frustrating items and turn them into top-tier policy issues.

Are boat people really causing a problem for people in an outer Sydney suburb? You bet, foams Mr. Abbott; they are, in his own words, “illegals”, “un-Christian”, “queue jumpers” and they might even be “terrorists”.

So too carbon pricing and electricity bills. For every household paying $3.30 a week extra for electricity because of the carbon price, they are almost certainly getting either direct compensation greater than the cost, have been enjoying substantial real wage increases for the past decade or are have had pension increases that might make a 70 year old Greek pensioner blush.

According to the Australian Bureau of Statistics, the price of coffee has risen by almost as much as electricity over the past year, yet there is little or no consumer outrage over this because it cannot be spun into a political issue by Mr. Abbott. Electricity, conversely, can be spun as a carbon tax problem even though less than 10% of the price rise over the past five years is due to carbon pricing.

The non-problems in government finances and the Budget should not be on the policy radar given how well they have been managed for not just the last five years, but frankly for the last 25 years by both sides of politics. Yet Mr. Abbott rather loosely tells all who listen that he will cut red tape, cut wasteful spending and reduce the size of the bloated public service. He says this is the medicine the country needs, and the electorate agrees particularly when they see the government spending a few dollars on refurbishing the Lodge or sponsoring a literary grant for school students.


Stephen Koukoulas is Managing Director of Market Economics. He writes a daily column for Business Spectator.


Photo courtesy of Bidgee


Related Content