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Australian politics is not broken, but the Liberal Party might be

The Liberal Party’s extraordinary leadership turmoil, and the likelihood that yet another  Prime Minister is cut down before serving out their full term, has many wondering if the political system is broken.

It isn’t.

There is no doubt that the slavish attention now paid to opinion polls, which have assumed oracular status, has made party politics highly volatile, and the position of leaders more precarious.
But what is playing out in gory detail before the eyes of the country at the moment isn’t the breakdown of political machinery, but a fight for the soul of the Liberal Party.
Abbott, Dutton and co. hold the delusion that they are representative of a mythical ‘silent majority’ that ascribes to their vision of a white-bred country. In their world, Turnbull has too much in common with the Left and is leading the country to Gomorrah and the Coalition to oblivion.
There is no doubt that many people, probably the majority, are not particularly thrilled about the current state of affairs. No period is without its challenges, but the sense of uncertainty and apprehension about the future appears heightened at the moment.
Yet relatively few, I suspect, think that the solution is just to shut the eyes and pretend none of it is happening, which is essentially the policy prescription of Abbott and Dutton.
Which brings us to today’s tussle over where the Liberal Party sits, and where it is going.
For years the Coalition has been slowly abandoning the political centre, something the wiser heads in Labor have spied and are trying to exploit.
The politics of migration to one side (bipartisanship on the treatment of refugees has largely neutralised the issue), the Coalition has sought to wind back action on carbon emissions, undermine Medicare, derail public education reforms, narrow Australia’s engagement with the world, drag the feet on child care and pander to the interests of older voters over those of the young.
Turnbull, who was chosen by his colleagues to replace Abbott and stem this rightward drift, has proved himself an inept politician. By pandering to the maddies like Abbott and Christensen rather than staring them down, he undercut his own authority and emboldened them. The dynamic this set in train was always going to end up in tears.
A Liberal split?
The compulsory voting system means that the weight of the national vote is in the centre – only on rare occasions, and in particular electorates, do the extremes gain much traction. Howard understood this. So did Keating, hence his success in beating Hewson by painting him as an economic ideologue and a risk.
If Abbott, Dutton and co. seize the leadership today and try to drag the Coalition even more to the right, they will increase the strain on a party whose unity is already under severe pressure from trying to span such a wide political spectrum.
An outcome of this episode is that the Liberal Party could splinter. In the early 70s, the success of Whitlam-led Labor revealed a shift in the nation’s political centre over the previous decade or so that had been disguised by the dominance of Menzies and the Liberal Party. As the Coalition recalibrated its position, Don Chipp spied a gap in the political centre and formed the Democrats.
If Abbott and co prevail today, some current Coalition MPs may take a leaf out of the same playbook and quit. The Liberal Party could become a rump based in regional Queensland and parts of WA and NSW.
If Bishop ends up succeeding Turnbull, as I suspect is more likely, it would signal that the bulk of Liberal MPs understand that their political future lies in a contest for the centre.
Abbott, Dutton, Christensen and their fellow travellers would then face the stark choice of sucking it up, or finally having the gumption to leave the supportive cocoon of the Coalition and putting the extent of the their electoral appeal to a real test by forming their own party.
My guess is some might follow Bernardi and do the crazy-brave thing, but most are too timid (and smart) and will stay put, because in their heart of hearts they know that their political relevance is likely to be much reduced once they step outside the shelter of the Liberal Party.
If anything, this episode will show the strength of our political system and, in particular, the virtue of compulsory voting.

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Big oil shows up Abbott on climate change

It used to be that citizens would look to governments to develop plans for the long term.

But on the issue of climate change the world has entered a bizarre parallel universe where it is the private sector – specifically major multinational corporations – that is leading the way.

Some of the world’s biggest energy companies are proving to be streets ahead of most governments when it comes to preparing for what they see as the inevitable need to do something about carbon dioxide emissions.

In a development that sits very uncomfortably with the second-rate thinking of tub-thumpers like Alan Jones and Andrew Bolt, and the craven and populist agendas of politicians like Tony Abbott, major corporations including Exxon Mobil, BP and Shell are developing their operations in the expectation of some form of carbon tax at either an international, regional or national level.

An illuminating article in the December 14 edition of The Economist reported that many major multinational firms have adopted “internal carbon prices” – attaching a cost to emissions of carbon dioxide produced in their operations – to help them prepare for what they see the inevitability of a national and international carbon pricing regimes.

This is not limited to small, green-hued firms operating at the fringes of the global economy: massive operators including Exxon Mobil, BP, Shell, Total, Google, Disney, ConocoPhillips and Microsoft have all adopted internal carbon prices.

And they are not being Mickey Mouse in the prices they are setting. Exxon Mobil has put its internal carbon price at $US60 a tonne, BP and Shell at $US40, while Google has their’s at around $US12 a tonne and Microsoft $US6 to 7 a tonne.

For these firms, the price signal serves two purposes. It helps them quantify their risk, and spurs them to develop ways to mitigate that risk by reducing, or at least slowing the growth of, CO2 emissions.

The adoption of a carbon price by the Labor Government was essentially serving the same purpose – preparing the country to be competitive and ahead of the game when carbon pricing regimes begin to operate internationally or in trade between major regions.

Instead, by dumping what had been set up, the Abbott Government is condemning Australia to once again be trying to catch up as the world moves on, to be a policy taker, rather than policy maker.

Thanks Tony, thanks Andrew.



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Secretive govts costing lives

The Productivity Commission is not really known for engaging in hyperbole, so when it says that the refusal of successive governments to share information could be costing lives, it is worth listening.

In its latest annual report, the Commission has a chapter in which it argues persuasively of the need for governments, State and Federal, to make the information they collect on us, as a matter of routine, every day, publicly available.

This is not a call for some Edward Snowden-type data dump.

The Commission says any data released should be appropriately de-identified to protect privacy.

But what the Government can offer researchers are unique datasets covering large segments of the population over significant periods of time which can help provide a window into important (dare we say, lifesaving) questions about everything from what we take and when we die to how we work and play.

To take one example. The Commission cited researcher Professor Fiona Stanley,  who said access to real-time prescription and birth data could have detected the connection between the morning sickness drug thalidomide and thousands of birth defects much earlier.

“Greater linking of health and non-health data sets could save lives and deliver more efficient and better targeted services,” the Commission says.

Another suggestion from the PC is to use linked data to analyse the interaction between welfare and work.

So, if there is so much useful information sitting on government hard drives, why isn’t it being shared already?

Privacy concerns and resource issues are regularly cited in objections to government data sharing but, as the PC points out, these are hardly insurmountable issues.

The real reason probably lies in the reluctance of governments to give the public the means to measure the effectiveness of their work.

As the PC says, “Administrative datasets could be instrumental in gaining insights into whether government programs meet their stated objectives, operate as intended, are delivered effectively, and deliver services in the right places”.

It notes that blockages to the release of data “occur within policy departments, reflecting sensitivities that providing data for independent research could yield unfavourable public findings about policy effectiveness”.

Maybe there’s a chance for a new approach to data sharing before the Abbott Ministry gets too much skin in the game –  but I wouldn’t want to bet on it.


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Kevin or Tony, business grinds on regardless

At about this point before every federal election, someone comes out and complain that political uncertainty is undermining business confidence and hurting investment.

True to form, business leaders were reported by The Australian earlier this week crying that doubts over when the election would be held were “sabotaging jobs and investment”.

We are led to believe that right now across the country, company boards, HR managers and purchasing departments are in a fit of angst about the current state of political flux, delaying crucial hiring and investment decisions as they wait on the Prime Minister to make the short drive to Government House to call the nation to the polls.

If this is the case, it must be an excruciating time for job seekers, merchant bankers, car salesmen and just about anyone else with something to sell.

It would mean that every three years or so – whenever an election looms – economic activity is brought to a virtual standstill as the nation awaits the verdict.

Problem is that, as with much received wisdom, it doesn’t stand up to much scrutiny.

Even a cursory inspection of official investment and employment figures suggests little correlation between election timing and swings in activity.

For instance, in the months leading up to the November 2001 election, private capital expenditure was regaining its momentum after having been savaged by the tech wreck. By the end of the year it had reached annual growth rate of almost 5 per cent – a 10 percentage point turnaround from the March quarter.

And again, in 2004, capex growth slowed in the three months to June to an annual rate of 2.5 per cent before accelerating sharply in the second half of the year to reach above 12 per cent in the December quarter – right when the election was held.

Of course, it has not all been one-way traffic.

Business investment was on a prolonged slide in the months leading up to the March 1996 election, when the Keating Government was dumped in a landslide.

But even here, other factors seemed to be at play.

Quarterly investment growth actually bottomed out the previous June (when it virtually stalled), and strengthened in the six months leading into the election. Maybe it was just that business was confident a change of government was on the cards.

The labour market similarly provides little support for the theory.

Just take these two examples.

In lead-up to, and aftermath of, the fractious August 2010 election, uncertainty about who would form government, and on what terms, was at an all-time high.

But throughout this extremely unsettled period, covering March to October, an extra 180,000 jobs were created, and total employment grew 1.6 per cent.

In 2007, the unemployment rate hovered at or below 4.3 per cent for the six months leading up to the November election, and rose only marginally to 4.5 per cent at election time before quickly reverting to 4.3 per cent the following month.

This is not to say that elections and the prospect of a change of government have no effect on businesses and the investment and hiring decisions they make.

Obviously, if the Federal Government is one of your important customers or a major employer in your area, you could well have a lot riding on the outcome of the poll (though neither side looks likely to unshackle Commonwealth spending any time soon).

But equally obviously, for most employers and investors the election and a possible change of government is only one of a number of considerations, and probably not a major one.

In the ebb and flow of domestic and international commerce, whether it is Kevin or Tony is ultimately neither here nor there – despite what people may claim.


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