The Inside Word

When being bold is your only path to power 

“I’d rather lose by 10 points going for the win than lose by one point and look back and say ‘we should have gone for the win’.”

The above quote is from former Republican adviser, Steve Schmidt, to Senator John McCain in the lead up to the 2008 US Presidential election, advising that he should pick Sarah Palin as his running mate.

Just months out from polling day, the war-hero McCain was trailing a young, charismatic opponent named Barack Obama and his campaign was headed for a comfortable defeat unless he took a risk.

Palin was a virtual unknown, being Governor of the relatively small state of Alaska. But her cleanskin candidacy would help McCain distance himself from the unpopular Bush administration, excite social conservative voters (who McCain struggled with), grab the attention of independent voters, and help McCain close Obama’s lead with female voters.

History shows McCain would pick Palin, she greatly energised his campaign and saw him momentarily lead in the polls. But eventually it all came tumbling down when Palin made a number of high-profile gaffes that exposed her deep knowledge gap on a number of key issues.

In some election races you need to take a high-risk, high-reward strategy to give yourself a shot. McCain lost that campaign but his gamble to pick Palin as his VP candidate gave him a shot he otherwise didn’t have.

Dutton’s bold Budget in Reply

Peter Dutton can’t win the next election on a small-target agenda. Not only has a first-term federal government not lost office in nearly 100 years, but the Coalition also needs to thread a very complex electoral needle to win. Policies and issues that play well in suburban or regional Australia probably won’t help win back the leafy teal seats and vice versa.

Dutton must take risks if he’s any chance of winning the next election. 

His Budget in Reply speech indicates he too understands this.

On energy policy, Dutton doubled down on the Coalition’s commitment to nuclear power. It’s a classic high-risk, high reward play. Risky as there are concerns around nuclear energy regarding cost, safety and time required to setup the industry. There’s no doubt the Coalition could be exposed to a scare campaign in certain seats. 

But with the Australian Energy Market Operator already warning there could be a summer of blackouts in Australia’s two most populous states, don’t think the politics of energy policy can’t change. Anything that dents public confidence in renewables providing a reliable substitute to coal, coupled with the fact that most other developed nations have a nuclear energy industry, could see public opinion change on this topic. The policy also blunts the claim that the Coalition is unenthusiastic on tackling climate change given nuclear is emissions free.

If there was a silver bullet to the housing issue it would have been deployed long ago. But Dutton showed he’s prepared to roll the dice with the following measures:

  • Slashing permanent migration from 185,000 to 140,000 per year.
  • Capping the number of foreign students at universities.
  • A two-year ban on foreign residents purchasing existing homes. 

The above are likely to appeal to voters due to their populist nature, even if they draw criticism from some economists arguing they’ll create adverse consequences. 

The Opposition Leader also vowed to abolish the $13.7bn subsidies for green hydrogen and critical minerals, while speeding up mining and gas project approvals. This could expose him with voters wanting sharp emissions reductions, but by labelling it ‘corporate welfare’ the policy is likely to appeal to those feeling the cost-of-living pinch.

Dutton has also foreshadowed industrial relations reforms including revisiting the definition of a casual worker. Since WorkChoices and the fall of the Howard Government, the Coalition has avoided IR policy like a recovered alcoholic does a brewery.  

It’s potentially dangerous terrain that could fire up the union movement. Likewise, if inflation and cost-of-living continue to spiral in the wrong direction it could be a net political gain. Additionally, it throws a pound of red meat to the small-business base. 

Dutton is attempting to draw a sharp contrast between himself and the Prime Minister. It’s a strategy that’s not without risks but frankly he has no other option. With Australia facing arguably its toughest economic conditions since the early 1990s there could be an appetite among voters for bold measures to provide the necessary circuit breakers.

A daring policy agenda is the only way Dutton can seize the agenda and buck 100 years of history. The Opposition Leader just needs to make sure none of his commitments turn into his own ‘Sarah Palin moment’.

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