Disruptive marketing …

… is one of those buzzphrases that is in the air in business schools, and since I’m located right next to the business school here at UQ I tend to be exposed to them.

Economists have their own buzzphrases and are not usually inclined to adopt those of marketing, but I must say this term seems apposite to Howard’s approach to the campaign. Starting from behind (but with the notional advantage of incumbency) he’s making up new rules and then demanding that Rudd adhere to them.

On tax, for example, the standard occasion to release what will presumably be the biggest single policy initiative of the campaign would be the policy speech (hence the name). Howard released his on the first day, then demanded that Rudd follow suit. Similarly, Howard has proposed a totally new format for a debate, effectively killing off the debate as it’s been understood, and is now trying the “empty chair” ploy on Rudd, saying he’ll go ahead with or without him.

It makes a certain kind of sense, but the obvious thing for the market leader (there I go again!) to do is to ignore it.,

Betting on the bounce

As we dragged through the seemingly endless pre-campaign this year, two legendary beasts were much discussed. One was the Bounce, expected by the government in response to some good news story or other. The most important was the Budget Bounce which, had it materialised would have set the stage for a mid-year election. The other was the Narrowing, assumed to take place once voters realised that the Howard government was actually set to lose office and be replaced by Labor.

Neither of these happened. The Budget disappeared without trace into the background of whatever determines voter choices, and even after most people came to expect a Labor win, there was no significant narrowing in the lead. Looking at the averaged results, there might have been a shift of one or two percentage points.

But the opening of the real campaign revives both possibilities: a Narrowing as the phony war is replaced by a real one and a Bounce as the government runs a strong campaign, including lots of appealing goodies.

The announcement of the government’s biggest policy initiative on the first day of the campaign effectively rolls these two into one. Clearly, Howard and Costello are betting that the combined effect will produce an immediate shift in the polls, at least enough to bring them back into contention – I’d say 47-53 is the minimum needed. If they get it, they are in a competitive race. If they don’t, the effects on morale will be dire.

Of course, there’s a huge element of chance here. Sampling and non-sampling error could produce a set of rogue results either way. But no matter how much this is pointed out, the psychological impact of the first polls is going to be huge.

Fistful of Dollars II

Given how far behind the government is starting, it probably makes sense to lead off the campaign with what has to be its biggest promise, tax cuts costing $34 billion over three years. As I recall, the spending promises already announced total about $9 billion a year, so its hard to imagine that there can be much left in reserve.

Although there’s nothing wrong with announcing a program for an entire term of government, it’s unusual in relation to tax cuts, and I can recall (perhaps with error) at least two instances of such cuts being promised and then taken back. One was Paul Keating’s L-A-W tax cuts in 1993, which (as implied) were actually legislated in an attempt to increase their credibility. The other was the “Fistful of Dollars” tax cut of 1977 (so named for the ads which showed precisely that) promised by the Fraser-Lynch team going into the election and then (if my fading memory serves) taken back by Lynch’s newly-appointed replacement. Now what was his name again?
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Running scared ?

The delay in calling the election, combined with the continuous blitz of taxpayer-funded propaganda, is starting to become a story in itself, and not just a Labor party talking point. On the ads, readers Fred Argy and Daggett point to this blistering piece by Steve Lewis in the normally safe Herald-Sun.

On the timing, business is starting to complain. I was interviewed by the SMH for this piece, and got a follow-up from ABC News Radio, which suggests that it will soon be an established narrative.

A correspondent tips Tuesday 9 October as the day Howard will call the election, and I’m inclined to agree. It’s exactly three years since the 2004 election and might be regarded as auspicious. And whatever the Electoral Act might say, running more than three years without calling an election will correctly be viewed as running scared,The last PM to go so long was Billy McMahon, who allowed the Parliament to run for a little over 2 years and 11 months from its first sitting, going down to defeat on 2 December 1972.

A campaign period of much more than six weeks will also be viewed unfavourably so, for what it’s worth, my money is on 17 or 24 November.

Slicing and dicing $1 million a day

Despite Costello’s supposed leak of a late November election date, it now appears Howard intends to hang on until his publicly-funded ad blitz turns the polls around, or, until it gets too close to Christmas to hold off any longer (8 December is mooted, but a sufficiently desperate government could go even later, into the New Year if necessary).

Sensibly enough, Labor has been pointing to what could have been done with the public money Howard is using for mass mailouts on “John Howard Writes to you on a Subject No Parent Can Afford to Miss”, ad campaigns on the theme “Footy fans back government” and so on. Here’s a piece from Tanya Plibersek

One way to keep this running is to say, every day, what could have been done with the million dollars or so the government is spending. But it could be sliced geographically instead of temporally. If I were running Labor’s campaign, I’d take the government’s total ad spending this term (around $750 million, IIRC) and convert that into around $5 million per electorate. Then find, for each electorate, $5 million of spending effectively foregone (two extra teachers at X High School, a local road project etc). Finally, promise to create a fund for worthwhile local projects like these, to be funded by a cessation of large-scale government propaganda.

The nice thing about this strategy is that would have some chance of locking Labor in to ending the downward spiral of ethics in which the bad behavior of one government justifies even worse behavior by the next.

Bad news for Howard

Most people are still treating the opinion polls, showing a big lead for Labor, with a grain of salt and sometimes more. They may be right – views can change a lot in an election campaign. But this poll undertaken by the US Studies Centre at the University of Sydney (PDF over the fold) suggests that Howard will have a fair bit of trouble winding back Labor’s lead. It doesn’t ask anything about party preferences, but it does ask about issues that seem likely to drive quite a lot of votes, including attitudes to Iraq, climate change and George Bush. It seems reasonably to bet that someone who strongly opposes the war in Iraq, strongly supports action on climate change and strongly dislikes George Bush is going to put Labor ahead of the government, and vice versa. People who have neutral qualified views on these issues are likely to decide on other grounds. So, we can use the proportion giving “strongly agree/disagree” answers to get an idea of the core votes for the parties. So here are some results

Australias involvement in Iraq*; Strongly oppose 41, strongly support 10
Climate Change; More serious than Islamic fundamentalism 40, Less serious 20
Overall opinion of Bush: Very unfavourable 39, Very favourable 4

On all these questions, there are around 40 per cent of respondents with strong support for the position most strongly opposed to that of the government. Presumably, the composition of this group varies a bit from question to question, but still it seems fair to say that Labor is going into the election with a base of 40 per cent, while the government’s core support is 5-10 per cent.

* Asking after a question about Al Qaeda reduced this to 34
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A tangled web

This story of a DFAT employee sacked for the “unethical” action of responding to an email from a Labor party staff member, and reinstated yesterday by the IRC seemed to be just another example of the politicisation and rule by fear that characterises the public service under the current government*. But digging into the story a bit further, my wife found an amazing tangled web, in which the government’s star witness was entangled in drug dealing, money laundering and blackmail. This naturally qualified him to be part of the team that successfully oversaw the actions of AWB in Baghdad, and, in 2002, to have his security classification restored

The original reason that the DFAT employee, Trent Smith, was targeted was that he was under suspicion for leaking minutes of meeting in early 2003, in which Alexander Downer stated what we all now know to be true, that, despite its protestations the Australian government was committed to war with Iraq**.

* Of course, this process started before the current government

** Subject of course, to the need to keep Saddam sweet as long as possible so he would keep buying our wheat.