Australia needs more than a reset, it needs an ‘economic revolution’: Canavan

Australia must reject unconditional free trade and reinvest in critical industries in response to the war in Iran, Nationals leader Matt Canavan has declared, putting him in alignment with the prime minister, who argued last week that Australia had been exposed by years of offshoring production.

Canavan will use a speech on Wednesday to call for an “economic revolution” and permanent tariffs to protect domestic manufacturers, dismissing the suggestion that his protectionist stance puts him at odds with the Liberal Party and economically orthodox leader Angus Taylor.

Building on his call in this masthead last month for tariffs on Chinese steel, the Queensland senator says a rethink on industry protection is needed due to the aggressive trade practices of US President Donald Trump and Chinese President Xi Jinping.

Currently, Australia’s anti-dumping commission can place limits on certain imports, but Canavan said this ad hoc process was too slow to counter China’s enormous state subsidies and should be replaced by a “consistent and realistic approach to tariffs”.

“I’ve been isolated and frustrated these past few years watching Australia rack up debt, destroy our energy advantages and ruin the strong economy we inherited,” Canavan will tell the National Press Club, according to speech notes.

“I’m not here to describe what the Liberal Party wants, but I did not run to become Nationals leader to deliver an economic reset. Our country needs an economic revolution.”

In a nostalgia-heavy address light on policy details, Canavan will put forward his “patriot agenda for an Australian economic revival”, which comes a month out from the Farrer byelection in which the Coalition parties are expected to lose to either One Nation or a Climate 200-backed independent.

Albanese, in his own press club address last week, denounced the prevailing economic model, which held that “there would always be someone else … who would sell us what we needed cheaper than we could make it”.

The prime minister used new language in his address about Australia’s lack of oil refining capacity, declaring there was “no security in maintaining a status quo”.

Canavan echoed the sentiments, underlining a convergence between left and right-wingers who want to see even bigger fiscal outlays on industry subsidies, running counter to the preferences of most economists.

“No wonder we’re seeing a surge in support for minor parties and alternatives. The Australian people rightly want a shake-up in our politics. Business as usual is not working economically, and it will fail politically too,” Canavan will say.

Canavan and Albanese, whom Canavan will dub ‘captain status quo’, diverge on critical questions such as the role of green energy in rebuilding blue-collar industries, and the government’s goal of reaching net zero emissions by 2050.

The major parties are increasingly using direct language to acknowledge the frustration of voters increasingly moving towards One Nation’s populist message.

Canavan’s remarks about the need to overhaul the economic system mirror those of Liberal frontbencher Andrew Hastie, reflecting a growing appetite for transformative change among conservatives and a challenge to Taylor’s more conventional approach.

He suggested the opposition’s long-awaited migration policy would put a spotlight on the prospect of Australia’s migrant population growing too quickly relative to the local-born population.

“Australia is a welcoming country and migrants have helped build it. But we have maintained our culture and heritage because there has always been a clear majority who grew up here as Australians,” he will say.

“If we don’t lift our birth rate, our Australian way of life is at risk.”

Canavan’s remarks may draw the ire of the Labor Party, which has used the Coalition’s rhetoric to campaign in migrant communities. The Nationals leader has been strident in calling out Pauline Hanson’s brand of race politics, but admits Australia’s successful multicultural project is straining.

Declaring the “Hawke-Howard era of economic reform” over, Canavan will use his speech to argue against the well-established economic principle of comparative advantage.

“The coddled, comfortable and second-rate political class talk as if the worst economic performance since the Great Depression can be fixed with one more economic summit, one more push for the ‘energy transition’, or one more go at ‘sensible tax reform’,” he will say.

“Our nation’s leaders remain trapped in the narrow thinking of the old economic rationalist superhighway. Most of our leaders grew up in the era of the Reagan-Thatcher revolution. Like ageing hippies, they desperately want to return to the elixir of their youth by performing one more economic Woodstock.

“A microwaved Milton Friedman is not going to solve our economic woes”.

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