So that was another wasted year in Australian politics

First, the good news. An annus horribilis in Australian politics will soon be over.

Revolutions, they say, devour their young. In our case, a political class cannibalises its own.

This year's man of the moment: Prime Minister Scott Morrison.Credit:Mick Tsikas

This year's man of the moment: Prime Minister Scott Morrison.Credit:Mick Tsikas

That was 2018, another wasted year in Australian politics in which public policy and the national interest took a back seat to the pettiness of the parliamentary process and the destructive intrigue of internal Liberal Party politics.

It also marked the 1oth year during which the country has been without a sustainable energy policy in which a reasonable consensus is achieved between old and new technologies.

When the history of this period is told the hijacking of the political debate by coal fetishists and climate sceptics, inside and outside Parliament, will be writ large.

What should have been embedded in public policy back in 2009 when a Kevin Rudd-led government was frustrated in its efforts to put a price on carbon has given way to 10 years of inaction.

Australia could have been California, the world’s bright shining fifth largest economy, in its embrace of new technologies. Instead it finds itself trapped somewhere between Pittsburgh and Palo Alto.

This was a year in which political thugs and media bullies commandeered the political process, stuck the shiv into a prime minister and left the country wondering what that was all about.

Perhaps the one constructive thing that could be said about the attempted Peter Dutton coup, in which he played the role of the useful idiot in the hands of colleagues on the hard right, is that he didn’t succeed.

We can only speculate about what fate might have befallen a Dutton-led Coalition in a progressive state like Victoria if the coup had succeeded. Or in any other state, for that matter, south and west of the Tweed.

Here we might ask what were the Victorians Greg Hunt and Mitch Fifield thinking in their support for the Dutton putsch?

Hunt will be lucky to hold his seat of Flinders at the forthcoming election as Liberal voters exact their revenge.

Peter Dutton during the leadership contest.Credit: Alex Ellinghausen

Peter Dutton during the leadership contest.Credit: Alex Ellinghausen

Fifield distinguished himself by slithering between Dutton and Scott Morrison, depending on the numbers.

But it was Mathias Cormann, the Liberal’s Senate leader, who behaved most questionably, expressing support for Malcolm Turnbull even as he was shifting toward Dutton.

Now, for the bad news.

What the country needs to prepare itself for, apart from a hyperbolic election campaign whose starting gun will be fired this week with the release of the mid-year economic and fiscal outlook (MYEFO), is a darkening economic outlook.

Politicians like to award themselves gold medals for sustained economic prosperity based, significantly, it might be said on commodities-rich dumb luck, but that good fortune risks tapering off.

All good things come to an end, dear, as my mother used to say.

While it would be premature to forecast the country is slipping towards a recession – one quarter is not a recession in-the-making necessarily – the September National Accounts numbers are concerning.

A weak 0.3 per cent growth number for the quarter revealed a more abrupt deceleration in economic activity than had been anticipated. This was due to a sharp pullback in the housing market, a weaker-than-anticipated construction sector and limp activity in the retail and manufacturing sectors.

Tighter credit markets, in which nervous banks are squeezing clients, are contributing to the slowdown.

December quarter numbers will now assume much greater importance politically. If further weakness is revealed, the economic backdrop to an April-May federal election campaign will darken.

Australia last slipped into recession – defined by two quarters of negative economic growth – in 1990 when then Treasurer Paul Keating memorably told the country “this is the recession we had to have’’.

The main difference on this occasion is that household debt to disposable income is through the roof and approaching 200 per cent.

This makes Australian households the most indebted in the Anglosphere, and among the most leveraged in the world. This is not a healthy place to be in a slowing economy.

Ominously, the Organisation for Economic Cooperation and Development  has warned of the possibilities of a “severe collapse’’ in the housing market, including risks of a "crisis situation in one or more financial institutions’’.

What is also material in this latest scenario is that Australian debt levels have grown significantly in the years since the global financial crisis of 2008 – net debt has doubled under the Coalition – leaving governments less room for stimulus if things do turn sour.

What needs to be added to calculations in “bad news’’ scenarios, apart from some slowing in the global economy, according to the latest International Monetary Fund Outlook statement, is a combustible geopolitical environment.

American leadership as a stabiliser in global affairs is lacking and shows little sign of reasserting itself. These are dangerous times geopolitically.

So, as a new year dawns in which a federal election campaign is sure to further divide the country as a desperate Morrison-led Coalition raises the decibel-level on the perfidiousness of Bill Shorten and all his works – if that’s possible – we should not anticipate an annus mirabilis.

Rather, something much less uplifting.