South Australia denies Liberals an expected victory

Issue 
Jay Weatherill arrives at the Labor election night event, March 15.

To get elected, wait until the existing government makes itself unelectable. Say as little as you can about your real policies. Smile, and present a small target.

Those were the perspectives of South Australia’s Liberal opposition in the run-up to the state elections on March 15. The key Liberal slogan, outside polling places throughout the state, was “A Fresh Start”. A start to what, specifically? Voters weren’t supposed to ask.

After an election campaign that most South Australians barely noticed, the presumption was widespread that the Liberals were about to sleepwalk into office. The Labor governments of Mike Rann and Jay Weatherill had held on for three four-year terms. But in 2010, the Liberals won a majority of the two-party preferred vote statewide. Piling up big majorities in country seats, the Liberals finished up with fewer seats in parliament than Labor, which scored narrow wins in a series of marginal Adelaide electorates.

That was four years ago, and capitalism in the meantime has not been kind to South Australian workers. According to various measures, economic growth in the state has been virtually flat. Unemployment is the worst of all the mainland states. Major employers have departed, or plan to do so.

Surely this time, Liberal strategists seem to have reasoned, voters would turn decisively against Labor?

But as the hours passed on election night, the revelry drained out of the Liberals’ partying. Sure, there was a further swing against Labor. But in crucial seats, the ALP’s vote was holding up unexpectedly well. And the South Australian Greens, from a low base, were making modest gains.

With counting not yet complete, the likely makeup of the new lower house is 23 Labor, 22 Liberal, and two independents. To form government in a hung parliament, Labor will need to secure the support of one of the independents; the Liberals need both.

Here, the notorious factionalising of the state Liberals promises to tell against them. One of the independents is former Liberal employment minister Bob Such, relegated to the back bench in 1996 during one of the Liberals’ more spectacular knife-fights. ABC News reported on March 16 that negative campaigning against Such led him to say that he would find it difficult to back his old party.

Labor, despite being outpolled by 5% in two-party terms, seems about to fall over the line once again. The question South Australians are entitled to ask is: will it make much difference?

Governments in South Australia have startlingly little ability to decide the state’s fortunes. In general, Australian states are pensioners of the federal government, with few taxation powers of their own.

But in South Australia, the dilemma of the state authorities is unique. The local economic structure conflicts with the imperatives of neoliberal capitalism to an unusual degree. Meanwhile, key economic determinants operate from outside and crucial investment decisions are made externally.

In the era of global financialisation, South Australians try to get by with growing crops and making things; the twin bases of the local economy are agriculture and manufacturing.

Though rational in most terms, this structure becomes a crippling disability when combined with an expensive Australian dollar, the result of interstate mining mega-projects forcing up the exchange rate. South Australia’s wines become difficult to export, its cars uncompetitive.

According to a state government report in March last year, South Australia shed 4100 jobs in agriculture and 20,000 in manufacturing in the decade to 2012. In 2008 Mitsubishi Australia shut down its vehicle manufacturing operations in Adelaide’s southern suburbs. In the city’s north, General Motors Holden plans to close its much larger plant in 2017.

The need, according to Liberal and Labor politicians alike, is to build on existing skills by making a shift into high-value niche manufacturing. That will have to rest, in large part, on high-tech scientific research and training institutions. Where is the money to develop them? The South Australian government doesn’t have it, and will look in vain to Tony Abbott and the federal Liberals.

Crucially, a renewed manufacturing base will need large-scale productive investment. For decades, federal governments have put money into South Australia’s defence complex, which includes building warships and surveillance drones.

The presumption, though, is that most high-tech investment will have to come from private firms. That has led state governments into an updated version of the traditional “smokestack chasing”. Possible investors are wooed with lavish offers of concessions and subsidies, at public expense. The results have been mediocre.

Meanwhile, neither major party in South Australia has been averse to mining mega-projects, whatever the cost to the environment. The Labor government of Mike Rann put its hopes for the state’s future prosperity on a massive expansion of output at BHP Billiton’s Olympic Dam copper-gold-uranium mine. Over objections from environmental and anti-nuclear campaigners, federal and state governments approved the expansion in October 2011. But the following August, BHP Billiton deferred its plans indefinitely.

For a state with no special claim on the proceeds of financialised money-shuffling – and thus compelled to base itself on actual production – there can be no prosperity within the neoliberal paradigm of modern capitalism. A good life for South Australians will require clear-headed economic planning, together with a government-led mobilisation of skills and resources to develop new industries that answer real needs.

One such area for development is the wind energy industry, in which South Australia is a national leader. Another is solar thermal power, for which the organisation Beyond Zero Emissions has conducted detailed modelling centred on Port Augusta in the state’s north.

Needless to say, development such as this will require concerted initiatives on a national, not just a state level. But nothing like this kind of vision and leadership has been coming from the Abbott government in Canberra.

Perhaps it is a sense of abandonment by the federal Liberals, wedded to the biggest blocs of financialised capital in eastern cities, that caused South Australians to deny local Liberals an expected victory.