Colin James: Why a scrap between Aussies matters to this country

COMMENT

I interviewed John Howard a year or so before the "unlosable" election in 1993 which John Hewson nevertheless did lose for the Australian Liberals. Howard was shadow industrial relations minister.

It was a lifeless exchange, with no hint of the battler who overcame his 1980s failure as leader to outlast Hewson and then Alexander Downer and lead the Liberals to three terms in power in 1996 - and maybe a fourth on October 9.

I first caught up with Mark Latham a half-dozen years later over lunch in a modest Italian restaurant in Canberra. It was to explore the ideas in his book, Civilising Global Capital.

He was bursting with physical and intellectual energy, hungry for ideas to reconcile old Labor values with the globalised economy - miles more inquiring, inventive and innovative (though also more wayward) than any Labourite here.

That is the Australian election: in essence a referendum on two men.

Howard has constructed a premiership on middle values of security amid prosperity: security against economic shocks, refugees, terrorists, those who undermine the family and social order. It is dull but relentless and underpinned by ruthless vote-buying in his Budgets.

It has been established that he lied in the last election campaign. But Liberals bank on that counting less with voters than a more general trust in him to run a steady government in choppy waters.

Latham is reconstructing Labor as the representative of "outsiders" against "insider" Howard. He has punch (literal and figurative), is unpredictable and has unsettled Howard. He might well win power with a knockout in the leaders debate. Or he might knock himself out.

Can this man run a government? Probable answer from most voters: I don't know enough about him yet to say for sure. To which, however, there is a "but": he says a lot of the right things for outsiders.

That is entertaining and a close race is promised, including possibly a hung Parliament, hostage to independents. But does it matter to us?

Yes, because Australia's future is increasingly ours, strategically, economically and as a society with which we are meshed.

In our foreign dealings we have many common interests for which we need to, and do, work closely with Australia in many international forums, not least in the World Trade Organisation. It is important that co-operation is not destabilised.

Howard is proper, even cordial, in bilateral dealings. But strategically, though he has been building links in Asia, especially on trade, and Foreign Minister Downer this month stated a distinct line on Taiwan, Howard has aligned Australia very tightly to the United States. That is a gulf between our two countries' perspectives.

A Latham government, with Kevin Rudd and former leader and hawkish Defence Minister Kim Beazley as Foreign and Defence Ministers, would maintain a high priority for the US alliance but over time balance it with Asia. Rudd has lived and worked in China and speaks Mandarin.

A more Asia-oriented Latham government might be less judgmental about this country's strategic stance, which might be helpful in Washington. Howard cut New Zealand out when he went for his free-trade deal. Rudd recognises this country's many military contributions worldwide.

Also critical is progress towards a single market - fixing regulations, border management and general administration so that doing business of all sorts in Australia, from selling widgets to designing buildings, is closely similar to doing business here and the competitive disadvantage is reduced.

Through the Paul Keating Labour years up to 1996 and through the early Howard years progress stalled. Peter Costello, Howard's Treasurer and expected successor, restarted it and would continue if Prime Minister.

But Howard is thought by some to prefer Health Minister Tony Abbott to succeed him and Abbott is an unknown quantity on the Tasman relationship.

Latham has committed himself to single-market progress and Beazley would back that. Latham and Rudd met ministers here in March, but they and other likely ministers are not well known, so it might take time to regain momentum. Note also that, as 40-somethings, Latham and Rudd do not have the sentimental war memories of 65-year-old Howard.

Abbott and Costello are 40-somethings, too. A subtle but important shift in transtasman relations is in the breeze, however the election goes.

A more immediate issue is how well a Latham government would manage the economy, since how well this economy does depends heavily on how well the Australian one does.

That is an unknown quantity, though Latham swears he will balance budgets and run an open economy.

And note Latham's hard ball over Australian television quotas in the context of the US trade deal.

That may raise a question about this country's inclusion in the quota under CER.

So watch the Australian referendum on October 9.

It matters.

* Email Colin James