Shitstorm: Inside Labor’s Darkest Days
by Lenore Taylor & David Uren
MUP, $34.99
pp. 276, ISBN 9780522857290

At first this seems a simple, intriguing little tale about how Australia weathered the global financial crisis. But be warned. Not only is the book marred by a title that reflects poorly on a leading university publisher, it is essentially written from the perspective of two political losers: Malcolm Turnbull and Kevin Rudd. Notwithstanding some qualifications, the authors agree with Labor’s explanation for its response to what the former prime minister called a ‘shitstorm’ in early 2009. They also appear to sympathise with the former Liberal leader’s view of the Coalition debate over climate change. Both arguments are wrong.

Take the financial crisis. It strains credulity when the authors contend that ‘the Rudd government saw the global economic storm coming’. The GFC did not just appear on Wayne Swan’s radar, we’re told, it landed squarely on his lap within a few weeks of his becoming treasurer. Thankfully, though, the Labor government’s decisive and well-prepared response helped shield Australia from the storm.

If indeed this were true, why were Rudd and Swan so surprised by the collapse of Lehman Brothers in September 2008 that they frantically spent half the budget surplus, not to mention recklessly blew $42 billion of tax dollars the following February? If they were so concerned about boosting growth in 2008 to protect Australia from the gathering storm, why were they advocating a tight fiscal policy to slay some inflationary dragon? And if they were so concerned about stimulating the economy, why were they egging on the RBA to raise interest rates during the first nine months of 2008?

‘No one,’ the authors argue, ‘could have predicted the full extent of the crisis in 2007.’ Really? Here’s Peter Costello in September 2007: ‘The subprime collapse would create other problems around the world.’ Again, in October: ‘A huge tsunami would roll through the financial markets, as the subprime home lending debacle ran its course in the United States.’ And in November: ‘The collapse of the subprime US lending market is now having reverberations around the world.’ Still not convinced? Here’s the Sydney Morning Herald front cover headline on 26 October 2007: ‘Look out for the Tsunami, says Costello.’ Although the authors acknowledge some of Costello’s warnings, they downplay their importance. Why? Because they were simply directed at Labor’s inexperience. In light of what we now know — Labor’s priority in tackling inflation, its botched Pink Batts and school halls policies, its huge debt and deficits — Costello has been vindicated.

The book contains few revelations. Fortunately, though, the general reader will find a few eye-catching pages. One such describes how Turnbull demanded Brendan Nelson relinquish the opposition leadership within days of winning it. Peter Hendy, Nelson’s chief of staff (for whom I worked briefly during this period), is quoted as saying:

‘Turnbull told me that my job was to get Brendan to resign in the next few weeks because Brendan was hopeless and he would damage the Liberal brand so much that by the time he, Turnbull, took over, the next election would no longer be winnable… I told him his suggestion was ridiculous, but he was absolutely serious and he kept calling and making it again and on occasions he called Brendan and made the same suggestion.’

Yet the interesting point about Turnbull’s arrogance and impetuousness is underplayed. After all, it was this character flaw that manifested itself so revealingly during the last few weeks of his leadership, with Turnbull’s lack of judgement and contempt for Coalition colleagues shining through in the ETS debate. His demented decision to help Labor rush through such contentious and complicated legislation on the eve of the Copenhagen fiasco deserves more scrutiny. It flew in the face of precedent for a man to lead a centre-right party while deliberately baiting the right wing, as Turnbull did time and again. The authors can’t bring themselves to say that Turnbull was wrong on this issue, and that the much-reviled critics of the ETS — Minchin, Robb, Joyce, Tuckey — were right.

Much of the rest of the book is, frankly, tedious, and will interest only politically obsessed types. Shitstorm reveals little and gives the impression of having been cobbled together from a few newspaper articles over the past two years.

Predictably, there aren’t many harsh words for Rudd himself. There can’t be, because if Rudd and Labor were wrong, then the whole government response to the financial crisis was a failure, and that’s something many journalists can’t admit. If anything, as the world-renowned economist and RBA board member Warwick McKibbin recently argued, the Rudd government panicked, silenced dissenting views, rammed through decisions fraught with risk and overspent on the stimulus package. Some of these concerns are mentioned in the prologue, but the authors fail to set out in detail why Australia weathered the storm. This had little to do with Labor’s big government, debt-ridden agenda, something to do with China’s lust for our minerals, and virtually everything to do with the starting point. Howard and Costello bequeathed to Rudd and Gillard the envy of the industrialised world: no debt, a big surplus, record low jobless, no banking crises. Why is it so difficult for journalists to tell this story?

This book is another reminder that when the Canberra Press Gallery journalists agree with each other, they are almost always wrong. Rudd did not have such an interesting prime ministership, however much significance the authors of this book try to attach to his government’s role in surviving the global crisis. The only plausible line in this book is the last sentence. ‘The political shitstorm may be wilder and more damaging than Kevin Rudd ever imagined.’ Neither the authors nor Rudd himself could have imaged that it would become so wild and damaging that it would destroy his prime ministership before the election.