It seems likely though not certain that the government will get exactly half the seats in the Senate, and that the Family First party will get at least one, largely due to preference deals with Labor[1]. As with all new parties, there’s something of a lucky dip quality here. Certainly, it doesn’t appear that FF are the hardline religious rightwingers that they have been represented as. I don’t have any particular knowledge about this group, but I will offer a few thoughts.

First, as I said in relation to Pell and Jensen, the idea that religion and politics ought to be kept separate is in general a silly one. It’s based largely on a misunderstanding of the doctrine of separation of church and state. What this doctrine prohibits is action by the state which favors one religion over others or over those without religious belief. In this context, claims that FF is closely associated with one particular church (Assemblies of God) are troublesome. It seems, however, that even if a lot of its leaders have been associated with AOG, the party is broader than this.

Separation of church and state does not mean that there is anything inherently problematic about people holding, and acting on, political views that are derived directly from their religious beliefs. The problem, where there is one, arises from the content of the beliefs and views. Although I don’t share the belief that we are morally obligated to follow the teachings of Jesus, I am often in agreement with the political views that follow from that belief. On the other hand, I rarely have much sympathy with policy beliefs derived from the Old Testament, for example, those condemning gays.

From what we’ve seen so far, it looks like FF have a mixture of policies, some of which will be appealing to me and most readers of this blog and others not. On the positive side, they are sympathetic torefugees and may help in restoring some much-needed decency in this area of politics. More generally, family values are, in large measure, those of the left. Co-operation rather than self-seeking competition, equal sharing rather than incentives and so on. That hasn’t stopped plenty of poltiicians espousing family values and pursuing anti-family policies, and we will have to wait and see whether FF lives up to its own rhetoric.

The obvious negative is that, for FF, the traditional family is the only option. I imagine the realities of life impinge to the extent that plenty of FF members and supporters have experienced divorce, blended families and so on, but there will obviously be no sympathy for ideas like gay marriage. But this was never going to come up, given that Labor had already opposed it. In general, this is not an area where governments have a lot of direct impact.

Overall, then we shouldn’t despair about FF holding the balance of power in the Senate, though I’m not optimistic they will do much more than blunt the sharpest edge of government policy.

fn1. In addition, there are the Democrats, of whom Andrew Murray is most sympathetic to the Meg Lees view of seeking negotiated improvements to government legislation. This means that, most of the time, the government will be able to get legislation through, perhaps with amendments.

I’m surprised no-one else seems to have mentioned the impact of state-level problems on Labor’s vote in the election. Right across the country, state-level issues ran against Labor. This partly reflects the fact that Labor is in office in every state, and in some cases, has been in office too long. But mostly, it was idiosyncratic stuff, that could have gone either way, but happened to go against Labor – even popular Labor governments ran into strife. Here’s my list

* In Queensland, the CEO of Energex committed suicide during the campaign. Although it was a complex story, it was tied to the failure to prepare properly for the blackouts that followed storms in January, which hurt the government

* In NSW, there were a string of hospital crises

* In Victoria, there was the broken promise over tolls on the Scoresby Freeway

* The Tasmanian forests were a state issue that split the general alliance between Labor and Greens

* The Gallop government in WA seems to be unpopular, though I don’t know the details of this

I don’t think these factors were enough to swing the election, but they could easily have added up to a 1 or 2 per cent swing, making the difference between an easy win for Howard and a narrow one.

Some general thoughts on the election outcome.

First, I have to concede immediately that the betting markets got this one right. Unlike polls and pundits, including me, they consistently predicted the return of the government. Before I’m convinced that there’s a real phenomenon here, though, I’d like to see an instance where the betting markets correctly predict a Labor win against the apparent odds[1].

Second, Labor suffered again from holding off too long on key policy issues. The tax policy went OK (but would have done just as well if it had been announced earlier), but the forest policy was clearly a disaster in political terms – the substantive merits are more complex, but precisely for that reason needed more argument and explanation. Instead the whole thing was left until the last few days of the campaign. The Labor planners ought to have been able to work out well in advance whether they could work out a deal which would satisfy the unions while achieving enough protection for the forests to keep the Greens onside. If it couldn’t be done, a political strategy to deal with the consequences needed to be worked out. Instead, they seem to have floated the policy and hoped for the best. This allowed Howard to announce a non-policy in response, without any time for Labor to do anything about it.

Third, and contrary to a lot of post-election claims, the campaign showed that health and education can win elections. The problem for Labor was that Howard was willing to outbid them, putting a heap of money into both bulk billing and state schools, even if it was poorly targeted (in policy rather than electoral terms) and hedged about with all sorts of silliness, like the idea of going through P&Cs. As I said several times during the campaign, Howard’s concessions, on Medicare in particular, mean that he has admitted defeat on the core ideological issue of the size of government.

Fourth, there’s economic management and interest rates. Undoubtedly these were the winning issues for Howard, as he had hoped. Contrary to Ken Parish’s argument, I don’t think you can really separate the two. And it was always going to be hard for Labor to make the case that Howard’s reputation on this score is overblown (I did so here, but I’d hate to try and condense it into a 30-second spot). A big problem here is the continuing memory of Keating, whose exceptional arrogance makes the mistakes of fifteen years ago still powerful electoral ammunition for the government – it’s as if Gough Whitlam had been able to run against the 1961 credit squeeze.

Finally, there’s the prospects for Howard’s next term. It’s clear enough that he will be able to push through the remaining elements of his 1996 program, the full privatisation of Telstra[2] and a final instalment of industrial relations reform. For the rest, his campaign platform was designed to match Labor – he hasn’t got a mandate for anything much in the way of free-market reform. It’s possible that, as on some previous occasions, he’ll repudiate his promises and embark on a new round of radical reforms. But my guess is that this won’t happen. Even the Telstra privatisation will cause a lot of political pain. In any case, there aren’t that many options on the table. Tax reform is unlikely to be affordable, the government is now committed to saving Medicare and bulk billing, and pushing privatisation on to Australia Post seems most unlikely to me.

The big issue is whether we continue to avoid a recession. The imbalances we’ve piled up in terms of household debt, the trade and current account deficits and the inflated price of houses can only be sustained, if at all, with low world interest rates, and those rates depend on the willingness of the Chinese and Japanese central banks to sustain them. As I said on election night, Howard’s reputation as a good manager owes a lot to luck, and luck always runs out in the end. But Howard’s luck has lasted longer than most.

fn1. Does anyone know if there are betting markets for state elections? If so, did the markets predict Bracks over Kennett?

fn2. As Andrew Norton points out, Family First actually opposes privatisation, but the government’s position is strong enough that it will certainly find some way to make a deal.

Well, there’s not much joy in the election results, with the outcome looking a bit worse than the status quo ante. That means another three years of a government that didn’t even deserve a second term, let alone a fourth. Latham ran a pretty good campaign, but couldn’t beat the interest rate scare, and should have bitten the bullet on forest policy much earlier. In addition, the problems of state Labor governments didn’t help.

As for the Liberals, they’ll have an interesting time of it, I think. They’ve made expensive promises, which will be hard to keep and costly to repudiate. And their credibility is now completely tied to low interest rates, something over which they have no real control. As I said in my chapter in The Howard Years

In 1964, Donald Horne described Australia as ‘a lucky country, run by second-rate people who share its luck’. This epigram could be applied, with equal or greater justice, to the Howard government and its term in office, particularly as regards economic policy. Sooner or later, however, this kind of luck will run out.

It hasn’t run out yet, though.

Just about time to break out the red wine, order the pizza and warm up the TV. The hints I’ve seen over at Tim’s about exit polls aren’t encouraging, but we’ll just have to watch and wait.

I’ve just been down to the local school to vote. My totally irrelevant and unscientific observations:

* Voting early(ish). The polling booths have been busy all day. Since the total number of voters can’t change much, it looks as if people are voting earlier than usual

* Return of the true believers. I’ve always had a superstitious belief that attitudes to how-to-vote cards are indicative of something. I saw a string of people walk straight past the Liberal canvasser, which suggests to me that Labor voters are feeling keener than they have for some time.

* I must say it was pleasant to vote the Labor party ticket for once. Next time I’ll go back to my usual practice of carefully ranking all the candidates, but this time I agreed with Labor’s proposed order for the Reps and I trusted the backroom guys to get the preferences right for the Senate.

* Some commenters pointed out that by voting Labor I denied the Greens their allocation of public funding. But I think my defence of their economic policies against the bizarre attacks mounted by the right was worth more than the $2 or so my first preference would have gained them

I’ve been reminded by Blair Fairman (Labor by 6) in comments to the previous post, that I haven’t put up a post calling for election predictions. Actually I did do this right at the start of the campaign but that’s not much use. In the spirit of optimism, I’ll call for predictions to be posted in terms of Labor’s lead over the Coalition in seats (leaving independents and Greens out). The person who is closest will be congratulated (with wild applause if it’s Pete who predicted Labor by 20). Multiple winners are allowed.

Update The winner is Jack Strocchi, who predicted a net gain to the Liberals