Among the 29 people to hold the office of Prime Minister in Australia, Paul Keating is probably the one with the sharpest intellect[1]. So, his abandonment of market liberalism is worth noting.
Category: Oz Politics
Reciprocating Hanson’s boycott
Apparently, Pauline Hanson and One Nation are refusing to vote for any government legislation until the government intervenes on the side of canegrowers in a dispute with millers and marketers*
Coincidentally, I was considering the question of how to deal with Hanson’s presence in the Senate and came up with the opposite way of implementing the current situation. The major parties should refuse Hanson’s support, and should show this by having four Senators abstain on any bill where One Nation supports their side. Obviously, this isn’t going to happen with the LNP. However rude they may be about Hanson and other ONP members when they say something particularly appalling, ONP is effectively part of the coalition and is being treated as such.
But for Labor, I think the case for shunning One Nation is strong. The arguments for a complete rejection of One Nation’s racism are obvious. The costs would be
(i) In votes where Xenophon went with the LNP and Hanson with Labor and the Greens, this would turn a win into a loss (I think – can someone check)
(ii) Open hostility to One Nation would probably shift some ONP voters to change their second preferences
I don’t think either of these points have a lot of weight. But the self-styled Labor “hardheads” whose brilliant moves have included putting Family First into Parliament and abolishing optional preferential voting in Queensland, just when would help Labor most, will doubtless disagree.
* These disputes have been going on for decades, reflecting the fact that, because sugarcane is costly to transport, growers are very limited in their choice of mills, and millers similarly depend on a relatively small number of growers to keep them in business.. I haven’t looked into the merits of this one
Turning the corner
Obviously, climate policy in Australia is not going well. In the US, the Trump Administration is keen to reverse the progress made under Obama. Yet for the planet as a whole, the news hasn’t been better for a long time. And there is every reason to hope that Trump and Turnbull will fail on this, and on much else.
Two big pieces of good news this week
* For the third year in a row, global carbon dioxide emissions from the energy sector have remained nearly stable, despite continued economic growth.
* Large-scale cancellations in China and elsewhere have greatly reduced the number of proposed coal-fired power plants
A lot more needs to happen, but with the cost of renewables steadily falling and awareness of the health and climate costs spreading, there’s every reason to hope that the decarbonization of electricity supply will happen more rapidly than anyone expected. After that, the big challenge is to electrify transport. The technology is there, so this is mostly a matter of renewed political will.
My resignation from the Climate Change Authority
Earlier today, I wrote to Josh Frydenberg, the Minister for Energy and Environment, resigning as a Member of the Climate Change Authority. Mine is the third recent resignation: Clive Hamilton resigned in February, and Danny Price a couple of days ago. There’s a story in the Guardian here. My resignation statement is over the fold.
Minor parties?
Continuing on the coalition theme, there’s been a rash of articles (this is representative) worrying about the rise of “minor parties” to secure 25 per cent of the vote. All of these articles are premised on the definitional assumption that the Greens (a well-established party with about 10 per cent of the vote, in a longstanding but fractious alliance with Labor) are a minor party, while the Nationals (a well-established party with about 5 per cent of the vote, in a longstanding but fractious alliance with the Liberals) are not. In most of these articles, the Nationals are just lumped in with the Liberals (even though they have broken with them in several states at different times) but in some they are accorded major party status.
These articles reflect the longstanding prejudices of the press gallery in favor of majority governments their horror of “hung Parliaments” and their continued belief in a “mandate” theory of government. , Speculating a bit, I guess it’s easier to work on the basis of insider information from ministers, and to a lesser extent, shadow ministers than in a context where authority is much more widely distributed.
In any case, while the idea of an upsurge in “minor party” support is dubious, the gallery is right to think that something has changed. I’m planning a proper analysis, based on my “three party system” model, before too long.
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
It’s Time?
One of the odder claims about the Liberals’ electoral debacle in WA is that the “It’s Time” factor played a major role. Readers of a certain age will recall that Gough Whitlam used this slogan to suggest that, after 23 years and (by my memory) nine election victories, the LNP Coalition had been in office too long.
The Barnett government in WA had served only two terms. There have been a fair few one-term and two-term governments in recent history, as you would expect on the general assumption that both parties in an election have some chance of winning.
On the other hand, there have been plenty of governments running four or more terms (Howard and Hawke-Keating at the national level, Labor everywhere but Victoria and NT (three terms in each case). The only time I’ve heard the It’s Time story invoked was that of Howard. In all the other cases, the incumbent government’s defeat has been attributed (correctly, I think) to specific causes, such as asset sales. Does the “It’s Time” explanation only work for conservative governments?
Update: Unusually, there is some polling evidence on this. Around 27 per cent of respondents cited “It’s Time” as a factor, slightly outnumbered by those who cited privatisation.
How to get a nice, highly paid job in a bank
In the last week or so, two former state premiers, Anna Bligh and Mike Baird have been appointed to highly paid jobs in the banking sector. In both cases there was some peripheral controversy. In Bligh’s case, some Liberals, including Scott Morrison, apparently felt that such jobs should be reserved for their side of politics. In Baird’s case, it was the fact that he took the bogus claim to be “spending more time with his family” to new extremes, giving lots of details on family problems and then deciding that six weeks was quite enough time to spend dealing with them.
These controversies obscured the key qualification held by Bligh and Baird for their new jobs; both had greatly enriched the banking sector by pushing through unpopular privatisations. Others enjoying similar rewards include Paul Keating (advisor to Lazard Freres), Alan Stockdale (Macquarie Bank) and Nick Greiner (too many to lost). By contrast, opponents of privatisation rarely find cushy jobs like this flowing their way. Of course, there’s no direct quid pro quo here. The banks and organizations offering the jobs aren’t, in general, the ones that collected fees from the particular privatisations in question. It’s rather that, politicians who are nice to the banking sector are well regarded, and eventually well rewarded, by that sector.
With such an incentive structure in place, it’s hardly surprising that privatisation is never far from the top of the political agenda, despite its extreme unpopularity with Australian voters.
Easytax redux redux
I got a brief run in the Murdoch press regarding Pauline Hanson’s revived proposal for a 2 per cent tax on all transactions (floated 20 years ago as “Easytax“). I was reported as follows: “University of Queensland school of economics professor John Quiggin said a 2 per cent tax would destroy small business and see a collapse in government revenue.” and the story was headlined “One Nation policy would ‘collapse the economy’” The headline is an exaggeration, but the quoted passage gets my opinion right.
Easytax is an example of a “cascade” tax, common in Europe a century or so ago. The point is that the tax rate is applied to the whole value of each transaction along the chain from primary producer to consumer. For a big firm, like Woolworths, the answer is simple: integrate backwards along the chain by taking over your suppliers. Then you pay the tax only once at 2 per cent. Small businesses, who can’t do this, end up paying the tax themselves, on goods that have already been taxed many times. So, they go out of business, and the total value of transactions falls far below the level used in the original calculation that a 2 per cent tax would be sufficient. Hence, government revenue collapses.
It was precisely because this process was happening that the French (the innovators in this field) dumped the cascade tax in favor of a value-added tax (VAT), the same model used in the GST. They were followed by the rest of the EU and then most of the world, except the US, which still relies on retail sales tax (levied only once, but still messy and narrowly-based).
The story also says “A spokesman for Senator Hanson said she had only advocated investigating the policy.” But the fact that such a nonsense idea is still part of One Nation thinking gives the lie to the suggestion of Hanson’s coalition partners in the LNP that this iteration of One Nation is different from the last. It’s just as racist and ignorant as ever. It’s not Hanson that has changed, but the LNP which is now indistinguishable from One Nation.
Trumpism in Australia (crosspost from Crooked Timber)
I’ve had this post in draft for a while, not entirely satisfied with it, but on the rare occasion of Australia making the front pages of US papers I thought I should post it on Crooked Timber ready or not. It’s for an international, largely US audience, but readers here might be interested. I posted it just before the apparent confirmation that Bernardi will Bolt.
After the cataclysm of Trump’s election, quite a few US-based friends asked me about moving to Australia. I had, as they say, good news and bad news. First, the bad news. Over the last few years, Australia has had no less than four Trumpist political parties, two of which currently form the government. We may yet get a fifth. The goods news is that, in most respects, they have been surprisingly ineffectual. That’s, partly because of constraints in our political system and partly because of the inherent limits of Trumpist politics.
John Quiggin 