Author: John Quiggin

I may be some little time …

John Quiggin119 Comments

Paul Norton has a post at LP, summed up by the teaser

current poll support for the election of an Abbott-led Coalition government is soft and brittle. Yet it exists, and persists. And voter opinion of what the Federal Labor government has actually done is not all that unfavourable. Yet people don’t think the government deserves to be reelected. What are we to make of this?

I don’t think it takes a genius to work out that a sufficient explanation for this paradox is the personal unpopularity (among a large group of voters, detestation) of Julia Gillard. Other factors may be relevant, but most of them are exacerbated by the leadership problem. In particular, the Obeid scandal is made worse for Federal Labor by the perception that Gillard is beholden to the same machine operators (Arbib, Bitar, Conroy and ultimately Graeme Richardson) who put Obeid in a position to corrupt the entire NSW Party.

For the sake of argument, let’s grant that this is all the result of misperceptions and bad press and that Gillard is both likeable at a personal level and someone with a “steely determination” to get the job done for Labor. It’s obvious, by now (and regardless of marginal fluctuations in polls) that this perception is not going away within six months. In these circumstances, wouldn’t a leader who cared about her colleagues, or one who was determined to do the best thing for the country, decide that this was the time to talk a walk into the snow, and give the rest of the party a shot at survival?

LP is back

John Quiggin7 Comments

Ozblogistan has been up and down lately[1], which has distracted me from mentioning the return, for this election only, of the deservedly popular Larvatus Prodeo group blog.

fn1. Blogs are doing the same things now they did ten years ago, and have lost a fair bit of their traffic to FB and Twitter but despite spectacular reductions in storage and communications costs they seem less reliable now than then. How can this be?

Art and life

John Quiggin8 Comments

I’ve been a big fan of Frank Moorhouse’s Edith trilogy since I first encountered it nearly a decade ago. The first two volumes, Grand Days and Dark Palace dealt with the heroine’s adventures (political and sexual) as a young and optimistic staff member with the doomed League of Nations. That was a fascinating glimpse of a world that had vanished well before I was born, and showed up Moorhouse’s capacity for imaginative recreation of that world, as well as the marvellous character of Edith Campbell Berry.

In the third volume, Cold Light, Edith turns up in early postwar Canberra, and there’s a sudden shift of view for me (and I guess, also for Moorhouse). The story runs into the early 1970s, when I was growing up and going to uni in Canberra. Edith is an observer and occasional participant in events ranging from the creation of Lake Burley Griffin to Menzies’ attempt to ban the Communist Party. Not only that, but most of the characters, with the exception of Edith and those in her immediate circle, are real people. Notable examples include Latham, Menzies and Whitlam, but also some academics from the early days of the ANU. I knew quite a few of them, and some of them even knew me: Heinz Arndt, for example, paid me the backhanded compliment of describing me as “a very dangerous young man” [1].

Reading and visualising a book so close to your own life is an odd experience – I was starting to wonder if I would appear in a crowd scene, perhaps outside Parliament House after Whitlam’s dismissal. For younger readers, of course, the early days of Canberra belong to the same dim past as the Kellogg-Briand Pact. They will, I think, find the book just as rewarding as I did, though in a very different way.

fn1. Arndt had been a leftwing social democrat in his early years in Australia, but moved sharply to the right later. In mischievous moods, I sometimes cited, with approval and without mention of his subsequent evolution, his early work advocating bank nationalization.

GBS pwns IPA

John Quiggin35 Comments

Anyone who has been around the left of Australian (or UK) politics long enough will be aware of the Fabian Society. It’s a group that’s earnest in the way only an organization founded in the late 19th century can be. It produces carefully researched papers on topics like education funding and housing policy, invariably worthwhile, but rarely fiery.

The Society takes its name from a Roman general who achieved victory over the seemingly invincible Hannibal, by avoiding pitched battle and wearing his opponent down: the idea was that socialism should be achieved by gradual reform through democratic processes, rather than through the revolutionary approach advocated by Marxism. This gradual approach was symbolised by the adoption, as a logo, of a tortoise (or maybe turtle), drawn by Walter Crane, the leading illustrator of children’s books in the late 19th century, and a society member. And, after 100+ years, even the most optimistic Fabians would concede that, if anything, the tortoise exaggerates the pace of movement towards socialism.

In spite of, or perhaps because of, this resolutely gradualist approach, the Fabian Society has always loomed large in the demonology of the nuttier sections of the political right, appearing as some sort of cross between the Illuminati and the United Nations. Here for example is Rose Martin of the Mises Society, warning that the tortoise is now going at the pace of a freeway.

The Institute of Public Affairs is the leading Australian representative of this kind of wingnuttery[1] (although it manages to get taken seriously by surprisingly many) so it’s unsurprising to see the IPA’s Julie Novak muttering darkly at Catallaxy[2] about this “shadowy group” (she’s a bit puzzled that Julia Gillard openly declares her membership). What’s interesting is her claim, with illustration that “The logo of the Society, of a wolf dressed up in sheep’s clothing, is all you need to know about how these people seek to achieve their objectives”

Huh? What happened to the tortoise? The answer it turns out, goes back to a joke played by George Bernard Shaw early in the 20th century

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Electricity privatisation in Queensland

John Quiggin55 Comments

I’ve just released a report I prepared on electricity privatisation in Queensland[1] This was a bit difficult given that the Costello Commission’s proposals have been announced with great fanfare, but the supporting analysis is so secret that even Campbell Newman claims not to have seen a copy. This Courier-Mail story by Paul Syvret gives the basic points

The report is online here.

fn1. It’s partly a followup from my previous response to Costello’s Interim Report. As in that case, I’m not getting paid for this, and it’s entirely my own work. So, it’s not as polished as the Costello report will doubtless be when it comes out, but I can confidently say it’s better value for money for the Queensland public.

For the record

John Quiggin44 Comments

Another quick post on nuclear power, probably the last for a while. Most of my discussion about nuclear power has been on the question of whether expansion of nuclear power is, or is likely to be, a cost-effective way of reducing CO2 emissions. The answer, as revealed by the failure of the heavily subsidised “nuclear renaissance” in the US, is “no”. But, for the existing (mostly Generation II, see over fold) plants, there’s a separate question – does it make sense to close them down early, or, alternatively to seek to extend their lives.

Since this issue comes up a lot, I thought I would state my position clearly. Nuclear power is an almost exact substitute for coal, has no CO2 emissions and (except where particular vulnerabilities have been demonstrated) comparable or lower health and safety risks (these numbers can be played with in various ways). The marginal cost of generating power from existing plants is low. Problems like waste disposal will have to be addressed anyway, and a few more reactor-years worth won’t make much difference.

So, except where there are particular vulnerabilities that are too costly to repair, I favor keeping existing plants open as long as they can be kept in good repair.

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Commissions of Audit, then and now

John Quiggin17 Comments

I’ve been thinking quite a bit about Commissions of Audit lately[1]. Although the Costello report has not yet been released, I happened to find, on my bookshelf, a document entitled “Report of Queensland Commission of Audit”. It’s not a back-of-the-truck pre-release copy, but the report of the 1996 Commission of Audit, commission by the newly-elected Borbidge (Nat-Lib coalition) government[2], and led by Vince Fitzgerald (a credible, though conservative economist).

The Report makes interesting reading. Its key conclusions are

(a) Queensland’s balance sheet is strong. The state’s net worth is $51 billion
(b) There is an inbuilt negative trend in the state’s operating position, which if unchecked will reach a deficit of $2.7 billion in 10 years

Point (a) sounds pretty positive given that both the Newman government and the interim Costello report paint a picture of a state on the verge of bankruptcy. So, what’s happened to our net worth over the 16 years from Fitzgeral to (interim) Costello. Readers might expect that it’s fallen a lot, or even become negative. In reality, it’s more than tripled, to $171 billion.

Of course, the Costello report has switched attention from net worth to gross debt. While this makes little economic sense in ordinary terms (if you were buying a company, would you care more about its net value, or its debt level), it might be important if the ratio of debt to net worth had risen a lot. Actually, gross debt was $24 billion in 1996, and is $64 billion now. The ratio of gross debt to net worth has actually fallen.

To sum up, the big difference between Fitzgerald and Costello is that Fitzgerald is a serious look at the state’s finances, while Costello (in common with the majority of Commission of Audit reports) is a propaganda stunt. The state’s underlying position is strong, just as it was in the 1990s.

The second point reported by Fitzgerald is also interesting. Borbidge only had one term and didn’t do much, so the problem of dealing with the adverse trend identified in the report fell to the Beattie Labor government. Beattie kept the budget in surplus, and it remained in good shape until we were hit by the GFC and climate disasters of the last few years.

fn1. Of course, we’ve been treated to a peek at the conclusions. This is not calculated to inspire confidence in the analysis, but it certainly makes criticism more difficult.
fn2. Although the Costello Commission is often presented as if it’s something new, appointing a Commission of Audit has been routine piece of political theatre for incoming conservative governments since the early 1990s. The recommendations almost invariably involve spending cuts, and usually asset sales.