Home > Oz Politics > Privatisation as electoral poison

Privatisation as electoral poison

Twitter is not a very useful medium for sustained debate. I’ve discovered this in the course of a rather strange interchange with Peter Brent (the psephblogger known as Mumble) and Piping Shrike, a pseudonymous blogger. These are both commentators I generally respect, but they are making a case that I find unbelievable. I made what I thought was the unexceptionable point that the proposed privatisation of Western Power was a central issue in the recent WA election, pointing to the polling evidence cited in the post below

In response it was claimed (if I’ve interpreted the tweets correctly that such polling evidence is useless and that privatisation has never been a central issue, not even in the Queensland elections which saw the Bligh and Newman governments successively turfed out with huge swings. Mumble asserted that these results reflected hostility to the national governments of the same party.

I’ll open this one up to readers, and invite comments from Mumble and Shrike.

What do people think about the substantive claim here. Am I wrong in thinking that, in the many election campaigns ostensibly dominated by privatisation, the fact that the pro-privatisation side has almost invariably lost is a mere coincidence. In particular, were the huge swings in Queensland mainly due to other factors?

What kind of evidence counts? I’ve cited extensive polling evidence on the unpopularity of privatisation, but Mumble and Shrike have both dismissed this?

I’ve said my piece, so I’ll sit back for a while and let others discuss this if they choose to.

Also, if someone knows how to storify the Twitter exchange and can be bothered doing so, I’d be very grateful

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  1. Smith
    March 15th, 2017 at 11:05 | #1

    The fundamental problem is this: there are many issues in elections; people only get one vote; they don’t write on their ballot paper why they voted as they did.

    You could do exit polling which asks people to name the top one or two issues that caused them to vote as they did but this never seems to happen, and I don’t know how you’d do a properly random sampled exit poll anyway.

  2. Pete Moran
    March 15th, 2017 at 11:08 | #2

    As a West Australian, heavily involved in one particular party (Greens), it was most definitely talked about by voters.

    There were two privatisation thought-bubbles from the admittedly already on-the-nose LNP here; Western Power *and* the Fremantle Port.

    The Nationals recognised immediately that the port privatisation was electoral poison.

    The failed Howard-era Airport privatisations still get a disgruntled run over here too. Especially when people are being crucified on parking at our airports!

  3. Geoff Edwards
    March 15th, 2017 at 11:28 | #3

    I emphatically agree with your position, Prof Quiggin. Elections are always tricky to read as people vote on a range of factors, as Smith has observed. This would be certainly true in Western Australia, where the Liberal government had accumulated disaffection from voters on a number of grounds, but the evidence I have seen suggests that State-wide, Western Power was the primary issue.

    The Queensland experience with Anna Bligh is even more clear-cut. Her popularity fell off a cliff after she announced the privatisations shortly after being elected and didn’t ever recover until her government was wiped out at the following election. Only a proportion of this drop in support can be attributed to the deception factor – the failure to flag the privatisations in advance.

    In any case, it is not only elections: poll after poll records uniform hostility against privatisation, of the order of 70%. As you mention above.

    There is a proportion of voters who wouldn’t know whether they are casting votes in a municipal, State or federal election; but I think a larger proportion differentiate between the State and federal arenas and cast their votes accordingly. The parties and especially the Canberra press gallery will always put a federal spin on State elections, but these should be taken with a grain of salt.

    Given the general support for privatisation by the conservative press, the public rejection of parties who pursue privatisation is even more noteworthy.

  4. EconoManOz
    March 15th, 2017 at 11:31 | #4

    JQ, I think your second paragraph is slightly over-egging or misinterpreting the alternative position. Hopefully Mumble will set his position out for himself, but here’s my loose interpretation: it’s not that privatisation is never relevant, but instead that ex-post attributions of election results – especially to a single issue – are notoriously unreliable (and usually self-serving).

    Here are my views on your substantive claim.

    Claim 1: Privatisation is widely and consistently unpopular with the electorate

    Claim 2: Privatisation has reasonable ‘salience’ with the electorate, but is still a second tier issue behind economy (esp: jobs, incomes, cost of living), education, health, law and order (State)

    Claim 3: Like all issues (including the Tier 1s), it is still dominated by over-riding electoral drivers: cyclical factors, and general assessments of competence / trustworthiness (with the latter mostly being about the former – i.e. can I trust them to be competent).

    Baird NSW is my clearest example of #3, with a medium-sized swing back from a rout to a nevertheless healthy win, despite running on a pro-privatisation platform.

    PS. Not-so-gratuitous plug for people employing The Charity Principle here (and elsewhere).

  5. Simon Fowler
    March 15th, 2017 at 12:03 | #5

    Why people voted the way they voted is a complex and difficult matter to properly assess, and I suspect that even exit polling or similar wouldn’t give you a very good idea of the reality. The professed reasons will tend to be skewed by a range of factors including the most recent big stories in the media, the more successful political advertising/stories/memes/etc, and the accepted social narratives. All of that is superimposed on top of a broader social and political landscape, which is probably the more important factor in the electoral results than whatever the surface layer is.

    I think at the moment privatisation and broader questions about the role of government in society and the economy are part of that broader landscape. Privatisation in particular, because of many years of electricity cost increases and obvious power market failures.

    It’s pretty clear that voters are able to separate state and federal issues, and vote accordingly – Mumble used to make this point pretty clearly, noting that state governments tend to run against the federal government after a few terms (every single state government was Labor for a period during Howard’s government). The federal political landscape will obviously affect state political landscapes, but local issues will still play a role – how else would the old and tired SA Labor government have managed to hold on during the worst of the chaos in Canberra? Likewise, the evidence from other state elections at around the same time would suggest that state Labor governments were definitely suffering headwinds from Canberra, but to an extent that would justify the massacre that the Bligh government suffered? A lot of that was driven by local issues, including privatisation and a number of spectacular project failures, as well as more nuts-and-bolts election mechanics (in particular OPV making for a more volatile result).

    It seems unlikely that the /only/ factor involved in this most recent election is federal politics. How much of it was one particular aspect of the local politics (privatisation) is a lot harder to say, but the polling you cite would suggest that it did at least affect the local landscape. I imagine the increasing appearance of political and economic incompetence that’s been dogging the Barnett government for the last few years has shaped the landscape at least as much, though.

  6. derrida derider
    March 15th, 2017 at 12:42 | #6

    On the specific issue of the decisive role of privatisation in the WA election I don’t know enough to say, and I’m open to the position that no-one else does either (but then again, I don’t know enough to say that for sure either).

    That privatisation is a consistent vote loser is undeniable though, so governments’ fondness for it must therefore be based on either genuine conviction (perhaps a conviction that some merchant banker friends are especially worthy) or a false electoral calculus. Privatisation is usually a political mistake; whether it’s also an economic mistake depends on details and circumstances.

  7. J-D
    March 15th, 2017 at 13:22 | #7

    Twitter is not a very useful medium for sustained debate.

    The Atacama Desert is not wet and the Marianas Trench is not shallow.

  8. Smith
    March 15th, 2017 at 13:23 | #8

    @derrida derider

    How do you know privatisation is a vote loser? Binary opinion polls (support or oppose) privatisation don’t reveal anything about how strongly people feel, and even more finely grained polls in the usual five point scale from strongly support to strongly oppose don’t say anything about whether the issue changes votes. In the absence of evidence, we are left with anecdotes, gut feelings and confirmation bias.

    This is why virtually any explanation of any election result is consistent with the data – there is no data, so in the WA case the commentariat can say it was caused by proposed privatisation of electricity, the Roe road, the Liberals werent conservative enough, the deal with One Nation, the it’s time factor, the way Barnett combed his hair, whatever.

  9. Ikonoclast
    March 15th, 2017 at 13:23 | #9

    Those who say privatisation doesn’t count as an electoral issue are in complete denial. I can only assume it is pro-neoliberal denial. They just don’t to believe that the millionaires’ party at the expense of workers, unemployed and most of the people might be coming to an end. I guess they belong to that crew who think if they repeat bald-faced lies often enough they can always con gullible people. Hopefully those exploitative, anti-worker, anti-ordinary people policies are coming to an end. It’s about time the greedy capitalists were put in their place. Their correct place at working age is earning most of their income from personal effort and getting no more unearned income than anyone else. It’s time to end their parasitism.

  10. Tim Macknay
    March 15th, 2017 at 13:27 | #10

    Twitter is not a very useful medium for sustained debate.

    I’d go so far as to say the last three words of that sentence are superfluous.

  11. Robertito
    March 15th, 2017 at 13:52 | #11

    I certainly think that privatisation had a significant role in Queensland. I would also suggest that the desire for privatisation is a symptom of decay within a government.

    After a honeymoon period, the initial ideological (in a good way) impetus and motivation of a newly elected government pass; the task of responsible economic management proves impossible in the face of countless favours owed and constituencies feared. At that point, a government still hasn’t made any headway on its deficit and/or debts, has rent-seekers banging on all its doors and windows and is ideologically adrift, so it privatises or proposes privatisations.

    Voters respond to the totality of this phenomenon, so I think it’s correct that they abhor privatisation but also that they react to the many other signs of government decay. This makes the Newman government especially incredible, as its raison d’etre was so meagre that three years was enough to exhaust it and for them to be found out by the voting public.

  12. John Quiggin
    March 15th, 2017 at 15:11 | #12

    I’ve received this comment from Mumble (Peter Brent) which he was unable to post for some reason – JQ

    Peter Brent:

    I largely agree with EconoManOz. I don’t deny privatisation was a factor, but in the scheme of the overall swing of 11% or whatever, a minor one.

    Most people don’t like privatisation, as they don’t like high immigration and a slew of “economically rational” prescriptions. But that doesn’t necessarily translate to many changed votes. And a few (fewer) would move the other way, to the government promising privatisation.

    If John’s proposition is that had Barnett not made this promise, he’d have been returned with about 57 per cent of the statewide vote as in 2013, I disagree with that very, very strongly.

    If it is that without privatisation, Barnett would still be premier, I disagree with that as well.

    But given the closeness of the Qld 2015 result, then it’s reasonable to assert privatisation made the difference between win and lose. (I believe Possum Pollytics once quantified it as ~2% of the vote.)

    I think the biggest swing on record is NT 2016, followed by NSW 2011. (Both over 14%.) I don’t believe privatisation was a big driver of either of those.

    During the Howard years, state and territory Labor did exceptionally well, then under Rudd/Gillard tier 2 Libs Nats prospered, now we’re back to a Coalition federal govt and the big swings are the other way again. I believe that’s the major driver of the huge swings—facilitated by depleted party loyalty—and also difficult economic conditions.

    That Reachtel poll John referred to

    https://theconversation.com/labor-wins-wa-in-a-landslide-as-one-nation-fails-to-land-a-blow-74062 is not useful, because asking people why they voted the way they did never is. (A clue can be found in only 12% of Labor voters, ie ~5% of total electorate, admitting it’s because they “usually vote Labor”.)

    So I don’t deny that these issues matter, just that it’s only around the edges.

  13. Paul Norton
    March 15th, 2017 at 15:16 | #13

    The great preponderance of evidence about public attitudes towards privatisation is that specific privatisations have generally not had majority popular support at the time they were embarked upon, and have not subsequently been regarded as a good thing by popular majorities. This is prima facie evidence that support for privatisation is generally not an election winner.

    I think that those of us who lived in Queensland between 2009 and 2012 would also agree that the Bligh government’s decision to privatise public assets (that it had previously promised to retain in public ownership) provoked strenuous opposition from people and sectors that had no prior record of opposition to the Labor Party or Labor Governments.

  14. Tim Macknay
    March 15th, 2017 at 15:32 | #14

    It seems to me that this is one of those disagreements that is rather like a philosophical debate, in that it’s not entirely clear that each side of the debate has the same thing in mind.

    In particular, it seems that there is a lack of clarity as to whether the point in issue is whether “privatisation is generally unpopular” or “privatisation is a major cause of election losses”, and also whether it’s “the proposed privatisation of Western Power was a central issue in the recent WA election” or “the proposed privatisation of Western Power is the reason the Liberals lost the 2017 WA election”.

    It seems to me that, based on the available evidence, the former of each of those two sets of propositions is obviously true and the latter debatable.

  15. Smith
    March 15th, 2017 at 15:36 | #15

    @Paul Norton

    There were two things going on in Queensland

    (1) Bligh promised not to privatise
    (2) She privatised

    All that anger against her might have been due to the broken promise, not to the privatisation as such.

  16. Moz of Yarramulla
    March 15th, 2017 at 15:45 | #16

    > A clue can be found in only 12% of Labor voters, ie ~5% of total electorate, admitting it’s because they “usually vote Labor”

    I think that’s close to being a circular argument, though.

    If you imagine a perfectly rational voter, they will likely decide that the most efficient voting plan is to research the parties in some depth once, pick the one that most appeals, then loosely monitor the situation to catch major changes (Latham and Abbott becoming leaders, for example, could have and did respectively lead to significant policy changes). That voter would quite reasonably say that policies X, Y and Z are the reason they vote how they did, but also agree that they normally vote for the party they voted for. I suspect much the same applies to disinterested voters as well, they pick an issue or two that they care about or that catch their eye once, decide that Party The First is the best one, then never think about it again.

    You would really need to find voters who changed parties (or did not) when the party displayed a major shift in policy or focus. Say, The Liberals going to the next election promising to eliminate negative gearing and introduce a wealth tax, The Greens becoming ardent advocates for nuclear power; or Labour committing to “right to work” laws. Anyone who claimed to be very keen on those policy areas who didn’t change their vote would be hard to take seriously.

    But we don’t see that, and I think you could use the first MMP election in NZ to show that in fact a significant number of voters do vote on issues. The (formerly) micro parties went from being wasted votes to 35% of the total, and it’s hard to argue that those voters normally voted for the micro parties. I suggest a third of the electorate looked round, said “now I have a meaningful choice” and voted accordingly.

  17. Tim Macknay
    March 15th, 2017 at 15:59 | #17

    @Moz of Yarramulla

    If you imagine a perfectly rational voter

    But what would be the purpose of such an exercise? 😉

  18. HED PE
    March 15th, 2017 at 17:06 | #18

    Thank goodness the South Australian government has decided to build a gas fired power station! That is one step in the right direction which goes against the neoliberal tide. Sadly the federal government has already said it will get its lawyers to look at SA’s plan with a view to squashing.

    The poll that Peter Brent mentioned above shows how old party loyalties have broken down. It is now, in my view, the right time for the Left to advocate renationalisation of key infrastructure where it is in the public interest to do so. Let’s drag the Overton window, which has drifted right for decades, back to the Left.

  19. David
    March 15th, 2017 at 20:11 | #19

    @Pete Moran

    So the fact that Greens are concerned privatization works against the argument that the community in general is concerned by this issue. The Greens hold minority opinions.

  20. Smith
    March 15th, 2017 at 20:42 | #20

    @HED PE

    More fossil fuels is now the anti neo-liberal position? It’s getting really hard to follow the correct line. Any chance of a cheat sheet?

  21. Geoff Edwards
    March 15th, 2017 at 20:48 | #21

    @David
    David

    You can’t use the fact that the Greens usually win only a minority of votes (not always true anyway) to argue that their opinions are those of a minority. The Greens’ economic policies are largely in tune with majority opinion (sceptical about free trade, foreign investment, privatisation, outsourcing et cetera). Their views about sustainability and community would be shared by a majority of the population. However, the Greens Party has allowed itself to be labelled by the other parties and the conservative press as radicals and fringe dwellers. Partly they bring this on themselves by pushing fringe causes like gender-toys and same-sex marriage instead of the issues for which their policies would resonate with the community.

  22. jrkrideau
    March 15th, 2017 at 23:39 | #22

    @Tim Macknay
    “If you imagine a perfectly rational voter”
    Purpose: Why as a good object lesson in how not to theorise?
    Perfectly rational voter == perfectly rational economic man == Piltdown Man

  23. March 16th, 2017 at 01:18 | #23

    JQ: “Twitter is not a very useful medium for sustained debate.” Right. There is a clever French film Ridicule, starring Fanny Ardant as femme fatale, set in the Versailles court just before the French Revolution. The theme is the corrosive effect of a conversational culture focused on witty put-downs rather than honest feelings or understanding. Fits the Twittersphere pretty well.

    The film includes a deserved shout-out to the Abbé de Saint-Pierre and his revolutionary (I use the word advisedly) school for deaf children, which opened the doors to literacy for the whole deaf community. A young deaf pupil wins an exchange with a heckler through a witty come-back, rather against the thesis of the movie.

  24. March 16th, 2017 at 01:31 | #24

    @jrkrideau

    Piltdown Man (like!) has to be much more than perfectly rational economic man, unless he (it’s a male fantasy) gives zero weight to the welfare of other people. If not he has to possess a fully specified social welfare function based on the calculated impacts of selected policy outcomes on the welfare of the entire population of Australia or the world, plus a weighting function for valuing this welfare. How did a computationally infeasible scheme become an ideal type of rationality?

  25. Greg McKenzie
    March 16th, 2017 at 08:18 | #25

    If you try to quantify moral issues then distortions of reality are inevitable. It is my contention that economics is not a science. It cannot be adequately quantified when the moral side of an economic choice is considered. Scarcity means some miss out when resources are allocated. Exactly who misses out becomes the moral dilemma for every economic decision maker. Falling back on “invisible hands” and “market forces” is just a cop out. The NIMBY syndrome will not simply disappear because one politician, or even one beaucrat, makes a decision.

  26. Ikonoclast
    March 16th, 2017 at 08:35 | #26

    Nothing is more boring than the bourgeois reduction of political economy to psephology. It illuminates absolutely nothing about the real challenges of political economy nor about the human and moral challenges of economics. Psephology a side-issue distraction of the worst type.

    People are rusted on to the two main parties, meaning the two neoliberal pro-capitalist parties, because they do not understand political economy. That is the basic issue. They then flip-flop between the two main parties (well the “swinging vote” subset does) in the vain hope they will get something different out of the other neoliberal pro-capitalist party. Vain hope indeed! Meanwhile power and control is being continuously transferred away from our governments and to corporations as we move towards corporate dictatorship of our society.

    Nothing will change until the two-party, one ideology nature of our political economy system (a fig-leaf for capitalist control anyway) is overthrown in a comprehensive manner.

  27. Tim Macknay
    March 16th, 2017 at 09:28 | #27

    @Ikonoclast
    Actually, I’d suggest that the repeated reduction of various social and political issues to a Marxist delenda carthago is equally boring. Just sayin’. 😀

  28. Geoff Edwards
    March 16th, 2017 at 09:42 | #28

    @Ikonoclast

    Indeed, ikonoclast. This is one reason why making claims about the electorate’s attitude to a particular issue on the basis of election results (as I did above) is risky. From long conditioning, the electorate can’t be blamed for expecting that both parties will privatise, regardless of their protestations before the election. It is only occasionally such as in Western Australia where it was perhaps the primary issues taken to the campaign, or in Queensland where the deception factor reinforced the antagonism, that one can be confident of this interpretation.

  29. Sam B
    March 16th, 2017 at 11:02 | #29

    In the last NSW election one reason I voted against the liberals was because they wanted to privatise the power grid.

  30. EconoManOz
    March 16th, 2017 at 11:25 | #30

    @Tim Macknay #14
    @Tim Macknay #17
    @Tim Macknay #27

    Three top quality comments. #14 is spot on.

  31. John Quiggin
    March 16th, 2017 at 13:27 | #31

    In defence of Twitter, it can be used to replicate the primordial form of (we)blogging, namely pointing people to interesting places on the web, with a quick comment that may pique their interest or summarise the tweeter’s view.

    That’s my primary use. When I get into a long exchange as a result, I mostly regret it.

  32. John Quiggin
    March 16th, 2017 at 13:43 | #32

    Most of the arguments against the “privatisation is poison” thesis seem to me to come down to “We can’t possibly know anything about why voters vote the way they do”. Certainly, scepticism about easy explanations is appropriate. But (to go slightly ad hominem) it doesn’t seem as if those commenting along these lines apply the same scepticism to their own preferred explanations.

    I think we could do a reasonably satisfactory statistical test with a vote share regression including “proposed privatisation” as a dummy variable, along with standard explanatory factors. Since I have no time for this, I’ll just observe that you’d get a fair bit of statistical significance from the big swings in WA, NT and Qld (twice)

  33. may
    March 16th, 2017 at 14:41 | #33

    Tim Macknay :
    @Moz of Yarramulla

    If you imagine a perfectly rational voter


    But what would be the purpose of such an exercise?

    it goes with the rational market?

  34. HED PE
    March 16th, 2017 at 16:05 | #34

    @Smith
    More fossil fuels is now the anti neo-liberal position?

    No, that isn’t what I said and that is not the position. But I’m not going to derail the thread by elaborating and your question is answered elsewhere.

    It seems pretty clear that John is right and many voters instinctively know that is is senseless to sell off infrastructure and force taxpayers to fork out extra money to give the capitalists a decent profit. On top of that, the legal regime post-privatisation is notoriously difficult to get right and invariably creates a range of perverse incentives, which has led top things like gold plating and insufficient system redundancy.

  35. Moz of Yarramulla
    March 16th, 2017 at 17:08 | #35

    Sorry I prefaced my remarks with something obviously inflammatory. Any response to the subsequent, more substantial points?