JULIE BISHOP: I’m absolutely delighted to be here this evening for the La Trobe University Bold Thinking Series. This evening I’ll speak about a number of issues that are challenging the ideals of liberal democracies around the world, and indeed here in Australia, and what appears to be a declining confidence in government.

First some context. Modern democracies evolved to avoid the violent change of governments which were being routinely overthrown by disgruntled citizens or rival factions or external invaders and often through revolution, disrupting the old system and bringing in a new system. The ballot box, the non-violent expression of the will of the people, promised government change without violent disruption, although the debate about the various models of government came into sharp focus in the first half of the 20th Century, which was defined by two World Wars and a Great Depression.

The role of government in the financial and economic collapse between the Wars and the rise of totalitarianism with few limits, if any, on power, led to unspeakable disasters and human tragedy. At the end of World War Two, democracy was imposed on West Germany and Japan as it was judged the best bulwark against a repeat of military aggression. Then from about the 1970s in particular, electoral democracies flourished from about 35 to over 110 nations – country after country, on every continent of the planet.

In 1989, anticipating the collapse of the Soviet Union and the Eastern Bloc, Francis Fukuyama famously published an essay – The End of History? note, there was a question mark – in which he argued the triumph of the West, of the Western idea is evident first of all in the total exhaustion of viable systematic alternatives to Western liberalism. Perhaps the collapse of the Soviet bloc was inevitable as Friedrich Hayek in his 1943 polemic – The Road to Serfdom suggested, when he argued that socialist and totalitarian central planning led to economic stagnation and governments with limited resources should foster competition.

Even China’s embrace of formal socialism was seen as increasingly qualified by its greater desire to emerge as a market economy, particularly as it entered the World Trade Organisation in 2001. At the same time liberal democracies were being incubated and nurtured by established democracies, the international rules-based order continued to evolve, that framework of treaties and alliances and conventions and norms and institutions underpinned by international law, that had been built since the Second World War to guide the behaviour of nations and their behaviour towards each other.

The international rules-based order was in fact instigated, promoted, defended, guaranteed by the United States, seen as a model of democratic values and freedoms, in an effort to make a functioning world out of chaos. As the 20th Century closed, it was a reasonable bet that the long ideological battle over which socio-political model was best for human affairs was settled. Democracies were seen by experts as inherently stable, focusing on human rights and freedoms, more likely to have stronger, more developed economies, more likely to reach higher income status. Democracies were less likely to go to war against each other.

However, today there are real signs of democracy in trouble. The Global Financial Crisis of 2008 marked a turning point with a massive loss of faith in Western financial systems and institutions. The value of globalisation is being questioned. There are concerns about inequality, lack of opportunity, disenfranchisement. These have manifested in the Brexit vote, the election of President Trump and other unorthodox leaders, with the voting public losing faith in the political class and turning to anti-establishment anti-politicians to give them answers. And the international rules-based order is under strain, indeed, under challenge. From the egregious examples of North Korea in utter defiance of numerous unanimous UN Security Council resolutions, to China cherry picking which parts of the rules-based order it will adhere to and which parts it will ignore, and now the United States pulling out of institutions and treaties that it itself had championed.

The Washington-based Pew Research Center carried out a large survey in 2017 on confidence in democracy. About 38,000 people across 38 nations, including Australia. Now, the good news from my perspective is that of the Australians surveyed, 88 per cent were committed to democracy, but only 40 per cent were strongly committed. Forty-one per cent preferred an unelected panel of experts to govern the country; 19 per cent preferred a single strong leader who is unrestrained by parliaments or courts; and 12 per cent opted for military rule.

Now, overall 58 per cent were satisfied that democracy was working, with 41 per cent dissatisfied. The global median was about 46 per cent dissatisfied. A key question in this survey was: how much do you trust your national government to do what is right for your country? Of the Australians surveyed, 7 per cent said they had a high level of trust. Forty-one per cent had some level of trust.

I am a believer in the genius of democracy. No other model offers the world anywhere near the benefits of the liberal democratic model. Churchill had it right. But it’s alarming that a significant number of Australians think that military or civilian dictatorship is a viable alternative. I think it’s fair to assume that this is steeped in cynicism about the way politics is conducted and/or a disconnect between what governments can actually do and what is now expected of them, and that can lead to a permanent state of disappointment.

Promises of more government spending invariably disguises the fact that there is a significant portion of the annual Commonwealth budget that is nondiscretionary – there’s fixed spending on welfare, health, education, defence – and that while we can adjust priorities, it really is only at the margins.

This brings me to the Liberal Party – in coalition, the most successful political movement over the past 70 years, having been in government for the majority of that time. The Liberal Party was founded on a belief in the individual, in freedom, in choice; backing the enterprising spirit of our people over government intervention and concentration of power. And as a Liberal, I am committed to the empowerment of the individual; to a competitive economy that enables small business in particular, to thrive as the driver of our economy, and today, over half of the private sector jobs are in small business; reducing taxes to the lowest sustainable level while not compromising our ability to fund essential services that the public need; not imposing unnecessary regulation that stifles innovation and enterprise. That’s what I believe.

And herein lies a key divide between Liberal and Labor. The level of regulation of employment is a key battleground. Market forces must be allowed to operate fairly so employers can adjust their businesses quickly to changing circumstances, to protect and promote greater opportunity. Labor, as the political arm of the trade union movement, is captive to the ideology and activism of union bosses steeped in the past – epitomised by Sally McManus, the head of the ACTU, who seeks to return to conflict between employers and employees, industrial action, and strikes. And history has shown the union bosses who hold the concentration of power are the only winners in that circumstance.

The need for competitive forces applies to the market and to the workings of government, where there needs to be greater contestability. Populist policies are on the rise around the world, where those in power see an opportunity for political gain through populist stances. Now, this is really complex because a democratic government needs votes – you’ve got to get elected. And short-term fixes can be superficially attractive, even though history and experience shows that they’re invariably detrimental in the long term – protectionism, higher tariffs, industry subsidisation, unaffordable expansion of the welfare state. Leaders and parties must be challenged at every level, is this a policy for the long-term benefit of our citizens? Is this a short-term fix?

Thomas Sowell – somebody for whom I have high regard, a professor at Stanford’s Hoover Institution – has said much about the dangers of populism. And when he observed: when you want to help people, tell them the truth. When you want to help yourself, tell them what they want to hear.

He devised a three-point test through which we should view every policy that is perhaps deemed to be short-term and populist. First, compared to what? In other words: is this the best available policy to resolve this issue, fix this problem, address this matter? And that’s where contestability, the battle of ideas is so important: is this really the best policy available – compared to what? At what cost – not just money, human cost. Populists don’t often worry about the cost. Third – what is the evidence? We have to adhere to evidence-based policy making; what is the evidence? What’s the evidence, what is the experience, what do we know. I have added a fourth – what could possible go wrong? Now having been a Cabinet Minister since 2006 or a shadow Cabinet Minister and having served in the Howard, Abbott, Turnbull Cabinets I can assure you that contestability is vital. It’s absolutely crucial to test policies, to test ideas particularly in the heat of an election campaign.

Much has been said recently about the internal conflict of the moderate wing and he conservative wing of the Liberal Party. Our founder Robert Menzies said, “we took the name Liberal because we were determined to be a progressive party, willing to make experiments, in no sense reactionary but believing in the individual, his rights and his enterprise (if he happened to be alive today, he would have said – his, her, his, her) and rejecting the socialist panacea.”

Given that I am generally classified as a moderate, allow me to articulate how I am guided by the philosophical underpinnings of our party. What is described as classic conservatism is a key foundation of the Liberal Party. Edmund Burke is most often credited with the first clear articulation of conservatism in his reflections on revolution in France. Conservatism is not an ideology like socialism, communism and fascism. The tenets of conservatism is a scepticism of ideological approaches, thus Menzie’s rejection of a socialist panacea. Conservatism means respect for institutions, and traditions built up over time, in contrast to revolutionary acts. This doesn’t mean institutions are exempt from change but reform should be pursued incrementally and constructively. Established institutions, traditions and values provide important anchor points of stability and shouldn’t be subjected to major change without justification. We must be sceptical of those who advocate for radical change and even more of those who advocate for revolutionary change. Conservative support for the traditional family unit remains the key focus of all coalition governments and the debate about same sex marriage created challenges for the Coalition. I believe more so for Labor who proved incapable of doing anything about this issue for the six years that they were in power. But a key question was whether changes to allow same-sex marriage weakened the traditional institution of a family unit and the traditional definition of marriage between a man and a woman, or not.

Conservatism is not a prescriptive ideology and does not provide prescriptive responses to changing circumstances and attitudes, and in line with our philosophy, individual members of the Coalition voted on same sex marriage according to their personal views and judgement and voting didn’t conform to the so-called moderate conservative divide. In any event, the Liberal Party acknowledges the right of members to cross the floor even in agreed party positions, although the convention is that they step down from the Ministry. That’s another reason why I’m a Liberal. I wouldn’t want to be part of an organisation that took away my personal discretion to exercise my judgment on matters of great importance. Respect for judgement and decisions of the individual are fundamental to what sets the Liberal Party apart from Labor; which still draws inspiration from failed socialist ideologies.

Let me turn to the question of climate change. Within our party, there’s justifiable concern about the distorting impact on our economy of many of the proposed responses. Our economic strength has been underpinned by affordable and reliable energy, mostly from fossil fuels – that’s a fact. Our cities and industries cannot function without reliable sources of energy priced at levels to ensure that we are internationally competitive. But this must and has to be balanced with concerns for our environment and the preservation of our planet.

There are no easy solutions, and we had a very long and complex debate within the Cabinet and within our party room about a national energy guarantee. This was backed by business, and now, given Labor’s policy, this may well have been the only framework that could have achieved that elusive bi-partisan response. We should, as a priority, ensure that there is a stable investment climate for new energy generation, and as a former Minister for Science, it’s a source of great frustration for me that we can’t even have a bi-partisan discussion on nuclear power – it’s a no go zone. And if the risks of climate change are on the scale Labor believes, it is irresponsible of them to rule out an option that could generate low emission baseload power. And the advent of electric cars alone – having to be plugged in every night – will make baseload power increasingly critical.

So at this junction, with democracy in distress, the rules-based order under challenge, a loss of faith in the political class, in an increasingly contested and complex world, we as politicians, policy makers, regulators should redouble our efforts to explain the underlying principles behind our policies and our approach to government. We must articulate our support for democracy and engage more with our citizens to bring them with us. This requires persuasive advocacy, rational argument, and leadership on the benefits of the best, most successful, long term model for social and economic development in terms of the wealth and the freedom, and the choice that democracy offers its citizens.

A retreat from democracy would mean invariably more instability, more conflict, less regard for freedom, less regard for human rights, less prosperity. We must uphold and defend what has benefitted our economy, including free, open, liberalised trade and selling our high quality goods around the world, and foreign investment – and this is the key to our success in being the only country in the world to have achieved 27 consecutive years of uninterrupted economic growth as the 13th largest economy in the world.

We must reemphasise the need for structural reform, for lifting productivity, for paying down debt, and embracing technological advances to ensure our workforce is augmented by technology; by automation, artificial intelligence, robotics, big data, that disrupts all that we do, but we need a strategy of augmentation – reskilling, retraining, relearning; embracing technological change.

All this means that our elected representatives must build and rebuild trust and faith, and a more representative Parliament is key. No nation will reach its full potential unless it fully engages with and harnesses the skills, talents, ideas, and energy of the 50 per cent of its population that is female – in our case, 51 per cent.
That, I believe, is now critical to building trust and confidence in our ability to deliver a free, open, and fair society.

– Ends –