Imagine a country with a strong, well-performing economy, ruled by a centre-left party that has achieved a number of key reforms. Yet, despite having a good story to tell about strong growth, low unemployment, and low inflation it is heavily defeated at the polls, and replaced by a resurgent centre-right government.
In this case, we are talking about Norway, not Australia.
Two days after Australians voted to remove the Rudd Labor government, Norwegians acted decisively to remove their incumbent Labour government. Labour prime minister Jens Stoltenberg has ruled Norway since 2005 in a “red-green” coalition.
Stoltenberg recently made international news when he decided to drive a taxi around Oslo to find out what voters were really thinking. On September 9 they made their views very clear in ejecting his government, and installing Erna Solberg as the new leader of a centre-right government.
There are striking parallels with Australian Labor, and wider lessons for both centre-right and centre-left parties. Stoltenberg developed a strong reputation for sound economic management, and like the Rudd/Swan team, was widely praised for navigating Norway out of the global financial crisis. Norway, like Australia, has a huge natural resource market – with significant oil reserves.
Indeed, The Economist – a noted supporter of free-markets - offered this rather sympathetic account of Norway’s economy and the expected electoral result:
Economic growth was at 2.6% year-on-year in the second quarter and unemployment at just 3.4%, while the current-account surplus is huge: nearly 14% of GDP. Given that, Mr Stoltenberg’s looming defeat suggests ingratitude.
Stoltenberg’s government ran into trouble when he attempted to increase oil revenue taxes – his version of a “mining tax”, with concerns that it would drive away international investment.
Like Australian Labor, Norwegian Labour had been in power for two terms, and was seeking a third term of office. Voters were disgruntled that despite the abundant oil wealth, the government had not done enough to invest in public infrastructure.
A key factor in Norwegian Labour’s demise, was the reinvention and resurgence of the centre-right. As Patrick Diamond has noted, across Europe many conservative parties are developing a new “compassionate” agenda – David Cameron’s UK Conservatives being a classic case.
Cameron was mocked by UK Labour for his “hug-a-hoodie” approach to law and order issues. Many centre-right parties have shifted away from an earlier neo-liberal paradigm, and have moved back on the centre-ground.
Solberg’s success was, in part, founded on a demand for better public services. Likewise, part of Australian prime minister-elect Tony Abbott’s appeal is that despite his own personal conservatism, the party has found an electorally winning formula: one which enables him to champion Reagan and Thatcher, while also using the state to bring in a costly paid parental leave scheme. Both Abbott and Solberg managed to damage the ruling party’s economic record, playing on fears of future economic uncertainty despite solid growth in both countries.
Ironically, both Abbott and Solberg will have their own issues working with more extreme right-wing parties. Solberg will likely form a coalition with the anti-immigration, populist Progress party. The Australian election also saw a proliferation of “microparties” – most on the right of politics, and Abbott faces dealing with a mixed bag of these in the Senate.
With the exception of France and the US, the centre-left are out of power across most of Europe and other advanced countries, including New Zealand and Canada. While the Australian Labor Party is currently blaming party disunity and the leadership merry-go-round for its downfall – no doubt true in part – it fails to understand the wider social and economic factors.
A lesson from the fall of Norwegian Labour is that sound economic management is not enough to secure power, nor is it enough to have a popular leader. Jens Stoltenberg was widely applauded for his handling of the killing of 77 people by Anders Breivik.
At the heart of these two election defeats is the ongoing identity crisis of the centre-left. What exactly is it for?
Although Jens Stoltenberg is unlikely to take up a new career as a taxi-driver after his election defeat, he will be still left pondering where it all went wrong.