The SMH has a story showing how the government has used tricky accounting devices to claim an increase in foreign aid, when genuine aid is nowhere near meeting the government’s announced targets. The biggest spurious claim was a write-off of $600 million debt owed by Iraq as a result of wheat deals made in 1990. I actually worked on an assessment of these deals shortly after this, and it was obvious that the whole thing was just a disguised subsidy to Australian wheatgrowers, who were effectively getting free insurance to cover the well-known risk that Saddam wouldn’t pay. The idea that this constituted development assistance is just silly. Equally bad are payments to Nauru for its part in the ‘Pacific Solution’. Effectively this affair should count as a reduction in foreign aid, since we have exploited the dependent position of Nauru and other neighbours to force them to provide prison camp services to us.

An even larger negative is the $300 million paid to Saddam Hussein by AWB, with (at least) the tacit encouragement of the Australian government. This wasn’t Australian money paid as a bribe. It was Iraqi money, stolen by Saddam and AWB acting in collaboration. It should count as negative aid.

My article on this topic, from Thursday’s Fin, is over the fold. It benefitted from earlier discussion here. Feel free to comment more
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Just this weekend, I’ve noticed a sudden change in the tone of political commentary, suggesting that the insiders have undergone a collective change of view. Suddenly, all the stories I read are about how Howard really is losing this time (the commentary from the Costello camp is particularly acid, and a drastic change in the space of a week). It seems as if the proximate cause of all this was the failure of the mythical ‘Budget bounce’ to emerge in the opinion polls (the government got another bad one today). In addition, it seems as if a lot of commentators really were convinced that the government’s moves on IR and education would be seen as sensible political responses to public concern and not as an admission that Labor was in tune with the voters on these issues.

Interestingly, the betting markets don’t seem to have moved too much away from even money, while the polls have been giving a consistent message all year. The election will be a big test for the relative predictive powers of polls, pundits and punters.

The Liberal Party’s new publicly-funded advertising campaign promoting the party’s revised industrial relations policies* has already done more damage to the party’s cause than any benefit they might possibly achieve. Labor has been given buckets of entirely favourable free publicity on both the substantive issue of IR and the misuse of public funds in political campaigning**. Even more striking, the label “Workchoices” has been abandoned in the ads, effectively conceding that Labor and the unions have won the policy debate. The alternative, something like “Workchoices: New and Improved!” might have been corny and unconvincing, but surely not as bad as this. Of course, without an ad campaign, there would have been no need for such a choice.

Now its time for the ads themselves. My guess is that they will be somewhere between ineffective and counterproductive. Those who have been following the issue closely can only have a negative reaction, and those who remember the previous campaign might wonder why, if all the relevant conditions were PROTECTED BY LAW last time, they now need to be protected again. But I imagine the majority of viewers will tune out in one way or another.

*As far as I know, these policies have not been enacted into law, or even placed before the Parliament, so their only real status is as Liberal policy

** If there is a change of government, watch to see if the promise to have the Auditor-General examine all such advertising is implemented in Labor’s first year. If it hasn’t come in by then it will never happen.