Gillard on equal marriage

I’ve long been mystified by Julia Gillard’s position on equal marriage, and her almost complete silence on the matter. However, on a recent Google search, I found this, which left me even more mystified than before

“I do understand that the position I took on gay marriage perplexed many people, given who I am and so many of my beliefs. I’ve actually had lot of conversations with many of my old friends about this, some of whom have got a different view than me.

“But, I’m a lot older than you,” Ms Gillard told the young man, “and when I went to University and started forming my political views of the world, we weren’t talking about gay marriage indeed as women, as feminists, we were critiquing marriage. If someone had said to me as a twenty year old, ‘what about you get into a white dress to symbolise virginity, and you get your father to walk you down an aisle and give you away to a man who’s waiting at the end of the aisle’, I would have looked with puzzlement and said ‘what on earth would I do that for?’.

“I’m conscious that these may be views that have dated and that the way people interpret marriage now is different to the kinds of interpretations that I had. I think that marriage in our society should play its traditional role and we could come up with other institutions which value partnerships, value love, value lifetime commitment. You know, I have a valuable lifetime commitment and haven’t felt the need at any point to make that into a marriage. So I know that that is a really different reasoning that most people come at with these issues, but that’s my reasoning.

So, apparently she used to be against marriage altogether, but now wants to promote alternatives. If I read her correctly, she proposes to do this by stopping some people from getting married at all, while retaining “traditional” marriage for others. Is the idea that we could gradually extend the ban, for example, by prohibiting various kinds of mixed marriage until no-one at all could get married? Or is there some more coherent argument I’ve missed here?

A free vote on equal marriage

The High Court has ruled, correctly in my view, that the ACT legislation which briefly established equal marriage was in conflict with Commonwealth Law clearly intended to do the opposite, by defining marriage as “between a man and a woman”. We might not like the practical result, but consider how things would be if the court had gone the other way and was then confronted by a state trying to ban equal marriage after a change in Commonwealth law.

And, this is clearly a matter for the Commonwealth to decide. Abbott implied before the election that he would be open to a free vote in the New Year[1], and Labor should push him on this. The politics of this are pretty awful for Abbott – he’s using his control of the LNP to block a reform supported by the majority of Australians and already in place in most civilised parts of the world. On recent form, he’ll probably try to tough it out for a while, but will cave if enough pressure is applied.

The final question is whether equal marriage would pass on a free vote. The last vote wasn’t encouraging, in view of the number of Labor members who opposed it, but some of them have gone and others, I think, have followed Rudd and Obama in “evolving” on the issue. The Nats will presumably be solidly against, so the real question is: how liberal are Liberals?

fn1. In my view, Rudd should have bitten the bullet after his change of view, and demanded a free vote from Abbott (the alternative being a party line vote with Labor and Greens in favor). But, the same advisers who gave us the early election and the Northern Australia nonsense thought otherwise, with results we now have to live with.

After the car industry

With the closure of GMH locked in, it seems virtually certain that Toyota will follow the same path in the end, along with most of the supporting components industry. It’s possible that a well-designed policy, combined with a sustained depreciation of the $A, could keep the industry alive (the fact that it survived the end of the high tariff era was largely due to the Button Plan in the 1980s), but this is the Abbott government we’re talking about, so it seems unlikely.

The impending end of the car industry constitutes the effective end of large scale manufacturing in Australia, at least as the term is ordinarily understood. The remaining manufacturing sector consists mainly of basic processing of agricultural and mineral products for export, along with food and beverages for the domestic market. Elaborately transformed manufactures, on which such high hopes were pinned in the 1980s and 1990s have been declining for years, and will be confined to niche markets once we stop exporting automotive products.

An immediate policy implication of the end of car production is that it’s time to drop a bunch of policies whose rationale was to support the domestic industry. The most obvious candidate is the FBT concession, just reinstated by the Abbott government. But there’s also the maintenance of some of the worlds weakest fuel efficiency standards, driven by the desire not to tilt the playing field against Falcons and Commodores. More generally, a whole range of pro-car policies will need to be reassessed, given that they increase our dependence on imports and therefore our vulnerability to terms of trade shocks.

There are direct implications for employment policy, arising from the job losses that are about to take place, and longer term implications for education and training. More on these soon, I hope.

The end of GMH

Another day, another stuffup from what already looks like the most incompetent government in Australian history. The Abbott government’s treatment of the car industry has been a disaster in policy terms, and just as bad as far as process is concerned. The key policy failure was the decision to retain fringe benefits tax breaks for cars (90 per cent of which are imported) at a cost of $1.8 billion over the forward estimates, while withdrawing Labor’s promise to give a much smaller amount in additional assistance to the remaining domestic manufacturers GMH and Toyota. Assuming Toyota also pulls out, every bit of the FBT concession will be public money sent overseas, with the exception of the slice creamed off by the salary packaging industry.

The policy process was even worse, announcing an inquiry, then pre-empting the result with a combination of leaks (of course, ABC stenographer Chris Uhlmann was happy to provide anonymity for the source) and Parliamentary taunts. Unsurprisingly, the new GM management in the US was sufficiently unimpressed to pull the plug immediately.

For the diehard fans of microeconomic reform, I guess this counts as a win. But even for them, it’s primarily a matter of cultural symbolism. The protection given to the car industry was so small that on a standard economic analysis, the welfare costs are utterly negligible. And of course, the benefits of protection were swamped by the costs of a chronically overvalued $A, which in turn reflects all manner of policy failures, from global financial deregulation to the subsidisation of the coal industry.

Money for nothing

In the midst of proclaiming a budget crisis and sacking thousands of public servants, Campbell Newman’s LNP government announced that they were going to demolish the tired Executive Building, in which Newman and other senior ministers work, and get the private sector to build them a new one. This, we were told would cost the Queensland public nothing. As I pointed out at the time

it’s blatantly obvious that if you tear down a building and put up a new one with exactly the same purpose, you are taking on additional debt, whatever the accounts can be made to say.

That was obvious from first principles, but now the Auditor General has pointed out that the deal is even worse than that, saying

“Without a competitive sale process and given the significant difference between the book value and the sale price achieved, prima facie it raises the issue of whether the state can demonstrate that it obtained best value for money for the assets it sold.”

. This isn’t surprising. Whenever one of these “money for nothing” deals is pushed through, you can be sure that the public is being ripped off for more than if the payment had been out in the open.

The Opposition has estimated the net loss to the public at more than $2 billion, and that looks to me to be in the right ballpark.

As a comparison, if you take $100000 as a round estimate for the savings in salary, on-costs and so on from dismissing a public employee this luxury project blows, over its lifetime, the annual savings from cutting at least 20 000 jobs, the number originally proposed by Newman. This was later cut to 14 000, quite a few of them replaced by outside contractors. So, it’s probable that, over the first time of the LNP government, the loss on this one piece of public extravagance will wipe out more than half the savings made by the sackings. Let’s hope the first term will also be the last.

And, with the Abbott government doing its best to help at the Federal level, reports like this might finally help to demolish the silly idea that the LNP has some sort of advantage in economic management.