Anthony Fensom

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Anthony Fensom

The Diplomat’s James Pach spoke with Australian journalist Anthony Fensom about Kevin Rudd’s chances of pulling out an upset in the upcoming Australian election, the status of Abenomics, and the possibility of a resolution to the Australia-Japan whaling spat.

Australian Prime Minister Kevin Rudd has called the election for September 7. You’ve called it his “mission impossible.” Is that still your take? Or could Rudd’s vaunted popularity with the electorate possibly offset his party’s reputation for internal dysfunction?

Kevin Rudd’s comeback produced a brief honeymoon with voters, however this appears to be over. According to the latest polls, Rudd’s Labor party trails the opposition Liberal-National Coalition by 48 to 52 percent on a two-party preferred basis and barring an improvement in the campaign, could lose the election by more than 20 seats. As a Queenslander, Rudd is counting on winning seats in his home state, however even with the recruitment of former state premier Peter Beattie, Labor appears to be trailing in the key states of Queensland and New South Wales. Rudd’s main success appears to be in reducing the extent of the loss for Labor, which under his predecessor was facing electoral annihilation.

Post election, one would expect the losing party – especially if it is Labor – will opt for a change in leadership. Who are the up-and-coming political leaders in Australia right now?

On the Labor side, employment minister Bill Shorten has often been talked about as a future leader, with other potential candidates including immigration minister Tony Burke and well-regarded health minister Tanya Plibersek. On the Coalition side, shadow communications minister Malcolm Turnbull has consistently polled more favorably than current leader Tony Abbott. Abbott ousted Turnbull by just a single vote in 2009 and the former Liberal leader would be favorite to regain the leadership should Abbott lose the “unloseable” election.

You’ve touched in a couple of recent pieces on the implications of the end of the China boom for Australia. To what extent is managing that slowdown going to dominate the work of the next government?

Lower coal and iron ore prices have caused Australia’s government to cut A$33 billion from future revenue forecasts. With the nation’s economic growth rate expected to decline following the end of the China-led mining boom, the next government faces a challenge in reducing expenditure without risking an even bigger downturn. The emphasis will likely fall further on monetary policy, with the Reserve Bank of Australia set to keep interest rates lower for longer to support growth, thereby causing the exchange rate to weaken and also risking another housing boom.

You’ve also written extensively on the Japanese economy, and particularly Abenomics, the economic policies of the Abe government. How confident are you that the so-called third arrow – structural reform – is actually going to be fired, especially given the vested interests that Abe faces within his own party?

The first two arrows of Abenomics, fiscal and monetary stimulus, were relatively easy policies to enact. However, the third arrow of structural reform, including the Trans-Pacific Partnership, is clearly a much bigger challenge, particularly for a Japanese prime minister facing resistance within his own party and key interest groups such as the farming and medical lobbies. Abe’s first announcement on structural reform on June 5 underwhelmed investors and he is under greater pressure not to disappoint when he makes the next big announcement, which is expected this fall. However, having won a mandate from voters in the recent upper house elections, Abe has the biggest opportunity since former Prime Minister Junichiro Koizumi to enact change. Reform is likely to happen, however perhaps not at the pace hoped for by the financial markets.

One of your most popular pieces with us was your quite definitive take on Japanese whaling at the end of 2010. Australia has been pursuing action against Japan at the International Court of Justice. What are your feelings now? Do you think there’s any resolution in sight?

Australia’s decision to take the matter to the International Court of Justice was a risky approach taken only for domestic political purposes and could in fact backfire. Effectively it has meant the end of negotiations and allowed extremists on both sides to hijack the debate. A resolution can only be achieved when both sides agree to negotiate in good faith to achieve a compromise. At this stage, it is hard to see this being achieved, although a softer approach by Australia’s next government might change this.

You’re now in Australia, but you spent a number of years in Japan. What do you miss most about the country – I’m guessing it’s not the August heat?

Summer is a great time of year to be in the mild winter of Brisbane, Queensland and not sweltering Japan, although I’ve been told it’s quite reasonable in some of Japan’s cooler northern areas. I’m fortunate to visit my former hometown of Tokyo reasonably often to catch up on excellent service, food, technology, culture and all the latest innovations of Japan’s constantly expanding “megacity.” Of course, there are many attractions outside the capital, which are still on my bucket list!