The mystery of early elections

John Quiggin28 Comments

The TV news hear in Brisbane has been running rumours about an early state election for most of the year. Even though a string of predictions have already proved false, the rumours keep coming. I heard another one yesterday, but today’s news suggests not, though with the odd phrasing

ANNASTACIA Palaszczuk has fuelled speculation she may wait until next year to call the election

which seems to suggest there is something odd about holding the election on time.

I have a couple of thoughts about this. First, I assume that somebody in the government or the ALP machine must be a source for these rumours. But thanks to the conventions of journalism, we never find out who[1]. At the very least, couldn’t political journalists stop repeating claims made by people who have been wrong over and over.

More importantly, why would any government, anywhere, voluntarily shorten its term in this way? The idea, of course, is that the party hardheads know when to seize the ideal moment to capitalize on the government’s popularity. That doesn’t apply in the current case, where the polls have been neck-and-neck. More importantly, this kind of advantage regularly dissipates in the course of an election campaign. Spectacular recent examples include Campbell Newman and Theresa May. But from my casual observation, it’s the norm rather than the exception for governments that go early to underperform expectations. That was true for the federal elections in 1984 and 1998 for example. Hawke expected a huge win in 1984 but ended up with a swing against him. Howard actually lost the two-party vote in 1998, and only squeaked in by good luck.

The issue ceases to be relevant after this election since we will move to four year fixed terms. I support fixed terms, but think three years is long enough for governments to keep themselves safe from voters.

fn1. An even more egregious case of this is the confident assertion the Kevin Rudd undermined the Gillard government, even though he said nothing in public that could be regarded as disloyal (unlike another recently deposed PM). We are supposed to take this assertion as true, even though those who make it refuse to go on record, even in the broadest terms, about what Rudd is supposed to have said and to whom.

Breaking ground in Adani’s Utopia

John Quiggin12 Comments

Having argued for some time that Adani’s Carmichael mine-rail-port project is unlikely to go ahead, I was initially surprised to read the announcement that Adani says it will break ground on Carmichael rail link ‘within days’. My mental image was of heavy earthmoving equipment excavating the route along which the line is to be laid. This seemed surprising to me, since there had been no evidence that the project was anywhere near that stage.

But a closer reading suggests that the “ground breaking” is of the kind seen in a typical episode of Utopia, in which lots of dignitaries are presented with shovels and turn over a piece of dirt, to “mark the official start” of the project. That is, presumably, a different “official start” from the one that was marked by another ceremony back in June. Obviously, this ups the pressure on governments to lend public money to the project since a failure to do so would mean abandoning a project that is “officially” under way.

Why zero (multifactor) productivity growth is OK for Oz (very wonkish)

John Quiggin23 Comments

I’m writing a book chapter about productivity, much of which will be a rehash of my 20-year debate with the Productivity Commission over measures of multi-factor productivity (MFP). In the process, I reread this op-ed by Ross Gittins, and the Treasury article on which it is based, by Simon Campbell and Harry Withers. As a result, I had what seemed to me like a Eureka moment. As with all such moments, of course, my insight might turn out to be either wrong or obvious.
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Socialism for the 21st century

John Quiggin24 Comments

I have a long article in the Guardian putting forward some thoughts about a socialist economic policy program for the 21st century. The headline “Socialism with Spine” is a shortening of my observation that:

As it is used today, the term socialism does not reflect a well-worked ideology. Rather it conveys an attitude that could be described as “unapologetic social democracy” or, in the US context, “liberalism with a spine”

The contraction might have led some readers to expect a position more radical than the one put forward in the article. I’m advocating both a restoration of those aspects of 20th century social democracy that are still relevant today and new ideas to turn the 21st information economy to the benefit of the many, not the few.

Who will pay for Adani’s infrastructure? We will

John Quiggin19 Comments

A couple of days ago, it was announced that the Fly In Fly Out workforce for Adani’s putative Carmichael mine would be split between Townsville and Rockhampton. Since I’ve long argued that the mine is highly unlikely to go ahead, I didn’t read the news stories closely. So, I missed the fact, buried in the middle of this ABC news report, that the deal requires Townsville and Rockhampton councils to build Adani an airstrip at a cost of $20 million. It turns out that not everyone in Townsville is happy about having their money spent on a project far away from the city.

This outcome is consistent with what I and others have been arguing for some time. Adani has to keep the project alive to avoid recognising the loss of the money its spent so far, and admitting that coal volumes at its Abbot Point port will be far lower than planned. On the other hand, there’s no point throwing good money after bad. So the strategy is to move slowly on the development, building a railway with money from the Commonwealth government and, now, an airstrip paid for by the people of Townsville. When, with much regret, the mine is deferred indefinitely, the Australian public will be the proud owners of a railway to nowhere, with the option of a flight back.