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How to deliver economic growth but lose an election

Posted by theonlinecitizen on November 25, 2007

By Gerald Giam

How is it possible to preside over a booming economy and yet still lose a national election?

Australia‘s outgoing Prime Minister John Howard may be puzzling over that question as he conceded defeat to the opposition Labor party in just-concluded federal elections.

“I have reformed the Australian economy and left it the envy of the world,” said a subdued Mr Howard as he conceded defeat after 11-and-a-half years in power. He had previously won four general elections and has presided over Australia‘s booming economic growth since becoming prime minister in 1996.

Indeed, Mr Howard’s Liberal-National Coalition’s campaign theme was that the economy is safer in their hands than in the hands of an “inexperienced” Kevin Rudd, a former diplomat, the leader of the opposition and now prime minister-elect.

Booming economy but…

Most Australian voters obviously didn’t buy that argument. The Australian Labor Party swept to victory with over 53 per cent of the votes. In the process, as many as six Cabinet ministers and parliamentary secretaries in the ruling Coalition may have lost their parliamentary seats. Even Mr Howard’s own seat hangs in the balance, pending the final tally.

Despite the booming economy, many Australians may not have benefited from it. In a recent speech to the National Press Club, Mr Rudd (picture, left) charged that Mr Howard’s government “has failed to ensure along the way that the boom delivers not just for the national economy as a whole, but for working families and the household economy as well…It is a government that has grown insensitive to the living pressures facing working families.”

The staunchly pro-business orientation of the government may have turned many working Australians against them. One of the most contentious issues in this election was about WorkChoices, a sweeping set of industrial relations reforms pushed through by Mr Howard that was supported by business federations but which critics said hurt workers.

“Mr Howard treats working people as economic commodities,” decried Mr Rudd.

Lessons for Singapore

The results of the Australian elections provide some valuable lessons for Singapore. Just like the outgoing Australian government, the Singapore government has always boasted about its stellar management of the economy and its ability to “deliver the goods” (i.e., economic growth) to the country. It has strongly argued that the only way forward for Singapore is to “enlarge the pie” by growing the economy (read: help big businesses become more profitable) as this will eventually prosper all Singaporeans, including those at the bottom of the pyramid.

This “trickle-down economics” theory in reality is often just that — a trickle. Voters in open democracies have been known to reject this political rhetoric. Back in 2004, India‘s ruling party, the BJP, also suffered a shock defeat at the polls despite its slogan of “India Shining” and the “feel good factor” from the economic growth fuelled by the strong IT services sector. Analysts saw the defeat as a result of a backlash from the impoverished masses of people who had not benefited from India‘s economic growth.

I was in Australia recently and almost all the opposition television commercials I watched focused on the rising cost of living, reduced workers’ rights protections and higher interest rates. Sure, the war in Iraq and global warming played a part in swinging public opinion against the government, but they were probably minor factors.

The bottom line is that elections, even in advanced democracies and booming economies, are still always fought on bread-and-butter issues. Voters are not impressed by impressive macroeconomic growth figures. The government of the day may claim to have delivered the economic goods, but if those goods don’t reach the doorstep of the average working family, they might be shown the exit door by the electorate, just like in Australia and India.

Read also:

“Australia’s PM-elect Ruud vows better global ties” by Reuters

“Australia sweeps Ruud into power” by the BBC

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22 Responses to “How to deliver economic growth but lose an election”

  1. xpy said

    “if those goods don’t reach the doorstep of the average working family, they might be shown the exit door by the electorate, just like in Australia and India.”

    which is why before an election, there will almost always be a ‘bonus’ from the government. and indeed people are very easily swayed by immediate gains. i can only imagine how the elections in auzzie will turn had howard gave bonuses!

  2. Jie Kai said

    Actually the governmenthas four enormous advantages that John Howard never had.

    The first is control of the national media- so journalists don’t get too critical about growing inequality.

    The second is the ability to give a few hundred dollars bribes/handouts/”progress packages” to poor people before election time without loud media criticism that this money is really a taxpayer- funded bribe.

    The third is that the government understands the importance of making sure that public housing estates do not look physically ugly- i.e. that they do not look like shabby slums. It mollifies the resentment of poor people to some extent- if you don’t live in a place which looks physically repulsive you tend not to feel poor. Plus it is also used as an election tactic- “no vote no upgrading” anyone? Again it can do this without much media criticism.

    The fourth is the creation and maintenence of a widespread belief that the current batch of ministers are the only possible people who can run things in Singapore at the present time. The Australian voter does not believe that ONLY John Howard is able to save Australia from suffering a dose of bad governance. Some poor Singapore voters ( and quite a lot of rich ones, I should mention), however, probably not just believe that a PAP-run Singapore is the best of all possible Singapores, but that without the PAP there will be NO Singapore.

  3. Barry Lee said

    Howard lost because he was trying to push through industrial relations laws that were considered too pro-business. Sounds familiar? At least the Aussies are smart enough to realise that they cant completely trust the govt and businesses to look after their interests ………

  4. MadHatter said

    “….treats working people as economic commodities”

    Does that ring a bell in anyone’s ears?

  5. […] are fed, up with progress! – The Online Citizen: How to deliver economic growth but lose an election – Diary of A Singaporean Mind: October CPI 3.6% …16 year […]

  6. Alan Wong said

    I think the PAP govt should be given a wake-up call from its high-handedness in pushing self-serving socio-economic policies to Singaporeans without giving a damn to the expectations of the general electorate, in particular the lower and middle classes.

    Many a time, our PAP leaders’s actions including our MM do not match their words whether in international or local politics. The “father-knows-best” policies appear to be out of touch with the ever-changing sensitivities of both the Singaporean citizens as well as those of our neighbouring countries.

    I believe that if PAP’s starts losing a few seats in the next election or even if the opposition manage to deprive PAP of the 66.6% majority vote, then maybe only will they be awaken from the illusion that all is fine with the current govt policies.

    Otherwise, I’m sure the PAP leaders will continue having the the same mindset as the offspring of one of the PAP MP “Get out of my Uncaring Face”!

  7. Gary Teoh said

    singaporeans should learn from the aussies by voting in oppositions though the opposition desinate PM is inexperience.

  8. Onlooker said

    Take care of the whole nation instead of the privilege few.We know we are in trouble when the leaders get so detached that they order mee siam mai ___ . And think that The Way to solve Taxi fares is to increase surcharge. Sad 😦

  9. Charles said

    I beg to differ with Gerald’s opinion piece.

    The Howard government, mind you, has been in power for 11 years. That is considerably a long time for any democracy.

    When the Liberals are in power, they have brought the country to disrepute by becoming a stooge of the Bush administration in entering the widely unpopular Iraqi invasion, as well as being part of the NATO forces in Afghanistan.

    Press freedom in Australia eroded under the rule of the Howard government. The country’s press ranking fell according to Reporters Without Borders and Freedom House.

    Its security intelligence arm, ASIO, was compared to the secret police by former Prime Minister, Malcolm Fraser. David Hicks and Dr Haneef’s case also dealt a very strong blow to the government’s public relations image.

    The government also enacted a legislation that banned same sex marriage, the first in any developed Western democracy.

    The press and academics, in my opinion, played a major role on the downfall of Howard. Academics, media and NGOs are in particular, frustrated at the erosion of press freedom and the increasingly strong arm tactics used to silence dissent. The news media have been extremely critical of the government.

    Did Work Choices aka the industrial relations policy affect the elections? Certainly. Work Choices benefits huge corporations and has also become a bureacratic nightmare for both employers and employees.

    However, I believe he was voted out due to a combination of factors (as I have stated above).

    I think Australians generally want change, especially since Howard has been in power for too long. The discontent among the general electorate has grown to such an extent that it can no longer be contained, which revealed itself in opinion polls and this election.

    Is there a lesson for Singapore? Unlike Gerard, I fail to see how the PAP can be replaced through periodic elections. Singapore, unlike in Australia, is an authoritarian state that has effective control of many sectors of society including a pro government media, amidst other factors which works against the Opposition and civil society.

    As such, comparing Singapore, an authoritarian state to other democracies such as India or Australia, is like comparing apples to oranges.

    Come election time, the PAP government steps up its efforts to destroy Opposition with defamatin suits while regulating communication through banning online forums, opinion polls, video broadcasts amongst other measures.

    How do you expect Opposition parties to contest in such tightly regulated environments and under such unfair conditions and emerge victorious?

  10. Daniel said

    The strange thing about Singaporean is this. Singaporean keep giving lame excuses that election is the key to vote against in-satisfaction of gov, but then is this merely something they find comfort in believing when they really know that election is run to suit the establishment ? Perhaps this is what Singaporean only capable of doing ? No wonder, singaporean deserve to be marginalized by gov and FT alike.

    The gov will very much like you to think you can do likewise and happy to let you think this way until when the time for election. In the election, the gov will do all sort of funny thing to prevent making election a fair process etc using carrot, using media, using excuses, using empty promise, giving threat, prevent you from voting (GRC), discredit opposition party, prevent main issue from been discussed etc. Don’t you Singaporean remember instead of address Singaporean’s issues in election, the establish play punk by focusing on the problems and credibility of opp party instead. Why not gov focus on their own credibility and problems instead ?

    So given that now gov is so unpopular, why do you think the gov will give you the right to vote when the time comes ?
    So please wakeup and stop giving lame excuses to comfort yourself. I doubt many will get to vote at all, and whose know the FT that stay in Singapore will get to vote for Singapore coffer. Remember, there is no longer such thing as Singapore citizen but Singapore resident !

    Isn’t GCT says ‘this is all politics’ and LKY says ‘you can’t replace gov with election’ ?

    So please, do yourself and others a flavour. Stop helping the establishment into misleading the republic that they can vote justly and fairly because to the establishment, the message is damn clear:
    THIS IS JUST POLITICS !
    Human right ? You got to be kidding. You want human right, then you better PayAndPay.

  11. Gerald said

    So let me pose a question:

    If the WP were as well-organised, and as good at challenging government policy as the Australian Labor Party, do you think they would be able to win more votes at the elections?

    The point is that we have yet to see a good opposition on par with their counterparts in Australia. Yet we keep lamenting the unlevel playing field. Politics is unfair. Tough! Deal with it. If WP improves themselves, I’m sure more people will vote for them — At least enough to win a GRC!

  12. Daniel said

    Gerald, all the more we should support opposition party. If we keep condemning opp party saying that they are not that good, isn’t this exactly what PAP want the public to do so in first place ?

    We aren’t going to get far just hoping for the best man and best party to come along. When Dr Sun turn against Qing to liberat against oppression, did he wait for the best party and best man to come and overturn the dynasty ? Did he think that he has the best party ?

    Nope. Neither should we keep condemning the opp party. We didn’t give it a chance to breed and we kill it before it can grow influential. A party can never be perfect and it is better to have one than none at all.

    Politics is unfair and even more so in Singapore where there is no voice at all. But then just condemning and complaining about opp party doesn’t make politics any fairer. It just make thing worse, and all the more give the PAP mandate to do as it pleases, as it likes.

    To join opp party is not a bed of roses given that PAP is paranoid about them. So why not encourage than discourage them ?

    Everything need to have a first step. Why learn to fly when we learn yet to walk ?
    Perhaps we should give opp party to nurture.

  13. James Michael said

    Gentlemen,politics in Spore is not a place where democracy rules,if you look @ ruling party(its very obvious,the organization with 3 initials),from media to housing development,everything has been under their control for the past 42yrs since independence,hence,being a majority in politics,it gives them the edge & advantage or rather the ball has been in their court,the problem with the public is they are not matured enough to understand how politics work,apathy is the word,as long as the public lives in a comfort zone,follow like a lemming,everything’s fine,the people will stay put,but then again,things are changing,with the stringent policies implemented by the govt,people are staring to wake up from their slumber,if we have learnt our lessons from the previous election,the votes have been diminished for the ruling party,that shows a sign of things to come,if we as a public do not show our support to the opposition party,then there’s no way they can succeed.My two cents food for thought!

    Daniel – Gerald’s got a strong point,we just have to look @ it from a different angle!Why don’t you contact the opposition party members to contribute or share yr thoughts,i’m certain they are willing to listen!Go ahead & give it your best shot!Cheers!

    Gerald – Daniel has brought out some issues,a different scenario,we just have to give the opposition some time,or rather,we can also chip in,how does that sound,i’m sure if we all collaborate together to discuss significant issues,that should be morale booster for the opposition party,too bad i’m in England studying….but i’ll do what i can to contribute my part,not for me,but for the public!Cheers!

    PS : I strongly feel its about time Spore needs to have a strong coalition govt!

  14. Kaffein said

    I’m right now in Aussieland. You should see the vigorous debates leading to the Election. SG govrmt should learn a few pointers and let their candidates fend for themselves. Let the debates be public, let the media give their critical analysis and let the people judge for themselves.

    I cannot imagine seeing LKY/LHL worked up until their faces turned red in trying to explain why their policies are good. Well, I saw John Howard blow his top in parliamentary debate. I thought… wah so cool.

    Kaffein

  15. matt said

    I think though the PAP is very conscious of public opinion, although not in the same, obvious way as overseas. When they back down they do so quietly, to avoid compromising a carefully maintained public image of near-infallibility. Workfare, however inadequate the top up is, is a significant watershed because it recognises that wages at the lowest end don’t enable survival, and also represents the first time the state, as opposed to voluntary charity, is doling out money on a permanent, regular basis. It represents a significant policy shift from the no welfare state ideology they had held on to for 40 years. What the government fears about Workfare is that they won’t be able to remove it in future without political damage happening. Yet that policy is also the product of the fear that increasingly inequality will hurt it politically. It’s politically very difficult to take things away. Work Choices was about removing a lot of the protection workers had against the oligopsonistic power of big business, and Howard paid for it.

  16. Daniel said

    matt, ironically the crude mentality that LKY afraid the Singapore workforce will develop over time has already happen in what is known to LKY as the world-class gov. Just look at all the measure they take. It is all about money, nothing but money. Money is what make our gov develop crude mentality in the first place. That’s why in next election, they shouldn’t deserve any mandate.

  17. Gerald said

    Daniel, you’re right. Maybe all of us should stop being armchair critics and start doing something.

    Matt, about Workfare, I don’t think the govt is planning to remove it in the future. They have already calculated (and rightly so) that in the age of globalization, welfare is needed for the bottom rungs. It’s not going to go away.

  18. Charles said

    I noticed that a few writers confused or use the words workfare and welfare interchangeably. We should be very clear what the terms means. By confusing workfare with welfare, we are creating more confusion to the depth and range of the debate.

    Workfare is a scheme whereby one receives some additional cash if he or she works. That is different from social welfare schemes which include things like free or low cost of education or welfare money paid to those who are not working.

    Secondly, the proposed Workfare is currently proposed for an initial period of three years. Hence, it is inaccurate to say the scheme is written in stone.

    Even if the government decides to rescind the scheme, what can the lowly paid workers do? Hence, it will be naive to think that the government will not retract their scheme after it runs out three years later.

    Howard’s Work Choices, not only benefits huge corporations but also reduce worker’s rights.

    One cannot simply compare Work Choices in Australian to the labour situation in Singapore.

    In Singapore’s case, the government has routinely disregard workers’ rights by banning independent trade unions and industrial actions.

    Howard’s Work Choices has various clauses that makes workers more easily redundant. For example, employers can dismiss their employees under the “operational reasons” clause of Work Choices. Moreover, Work Choices also restrict union activities.

    It is pretty clear cut that the Singapore government, unlike the Australian government, is not generally sensitive to worker’s rights and their plight.

    One of the main reason is because Australians are still able to vote a party out of power if it feels the government is out of touch with the citizenry.

    In Singapore’s case, citizens do not have that privilege, which I have convincingly put forth in my previous comment.

    As I have tried to explain in my last post, let us not confuse our situation with that of Australia. Let us not confuse the terms. Let us debate and discuss the issues while looking at the bigger picture in general.

  19. Gerald said

    Charles,

    Workfare is a term used by the govt to make it more palatable, just like IRs for casino resorts.

    As far as I’m concerned, it is a form of welfare. This scheme is already used as part of the social welfare package in some other countries. Singapore simply borrowed from them and repackaged it to suit our needs (i.e., welfare is bad, so must become Workfare).

    I agree with what you said about the employment situation in Australia.

  20. 8989 said

    enough is enough !! use to think singapore have no good opposition, so can’t vote for them. now as long as there is opposition, lousy ones also i will vote for them.

  21. Ark said

    Because there isn’t really a “good” party in the first place? It is whichever party that (is believed to) best serve the interests of you, the voter, whichever party that can score a majority. Unless the minority can better organize themselves, they will be ignored under any democracy model. It is all about winning, period.

  22. The other political parties need to attract top caliber people from the creative agencies and media agencies, perhaps then, there will be some cohesive marketing platform and creative outlets for campaign management.

    Right now, it’s not professional at all. You do need spin doctors, and lots of money to get your ads out, especially since you might have to advertise on cable channels to gain a leg up to a different voter demographic.

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