On the QT: Newspolls, Cr@p, Con-jobs and Rates

The parliamentary year started as it often does with a Newspoll. It was not great news for the ALP. On the two party preferred the ALP was only leading by 52-48 (pretty much on par with the last election). Of note however was that the ALP’s primary vote was now behind the LNP’s 40% to 41%.

So what has happened? Has the ALP lost a stack of support? Well not really. The ALP’s primary stayed the same as the last time, so too did the Nationals and the Greens. What happened was the Liberal Party primary vote picked up 3% from “Others” – code for Family First, One Nation and a few “I hate all the bastards” camp.

Still not good for the ALP. Worse still was Kevin Rudd’s Satisfaction rating falling from 52% to 50% and his Dissatisfaction rating increasing from 34% to 38%. But here’s the odd thing, Abbott isn’t doing any better either. His Satisfaction rating increased 1% to 41%, but his Dissatisfaction rating increased 4% to 39%. And on the mark of preferred PM both Rudd and Abbott increased 1% to a score of Rudd 58% - Abbott 26%.

What we have is a pretty divided electorate. We also have some figures that show that Rudd has been off the playing field for most of the summer and needs to get back into gear quickly. His appearance on last Friday’s Sunrise program was lack lustre, so he’s going to need to improve to reconnect with the public (or at least some of the 38% who don’t approve with what he is currently doing).

But today’s Newspoll is essentially the Pre-season competition Grand Final. It only will mean something if it leads to decent results during the season proper. And on that score things are not good for Tony Abbott.

Today Abbott (flanked by Warren Truss and a pretty out of place Greg Hunt) released the LNP’s “climate change policy”. To give you an idea of the thrust of the policy here’s how it goes. The first page is an executive summary. The second page is an introduction. Then page three starts with the heading “Labor’s Great Big New Tax on Everything”. It then follows with 3 pages attacking the ALP’s policy. Then there are 2 pages on how great the LNP has been on the environment in the past; then two pages on what other governments around the world are doing; followed by 3 pages on what the state governments are up to. So we’re at page 13 before we finally get some gutsy detail on the Liberal Party’s actual policy.

It is not worth the wait.

It boils down to providing $2.8b worth of “incentives” to businesses to come up with ideas to reduce their carbon emissions. This according to Abbott is a “market solution”. Yep according to the leader of the Liberal Party – the party of free-enterprise – “the market” now means people submitting tenders to the Government to get Government funds. I should have tried that definition in my Year 10 Economics test and see how it flew…

The rest of it goes toward planting 20 million trees (which sounds a lot until you realise that’s about 20,000 hectares of forest, and Australia already has around 150 million hectares of forests…) and solar panels. 

Look I’ll be kind and say it is the type of policy you would get if you ask a fairly smart bunch of Year 8 students. It’s all warm and fuzzy – the government pays companies to be good, no prices change, and no one has to worry about that bad old climate change ever again.

Yep and Cate Blanchett spends her nights wondering if she should get in touch with that witty guy who writes that Grog’s Gamut blog.

It’s a complete crock that will never in a million years reduce Australia’s carbon emissions by 5%. Bernard Keane at Crikey has the best analysis of it thus far:

In truth, the Abbott fund proposal is a great idea. We should be investing more in carbon-reduction projects, and Abbott is proposing to invest directly in some emerging technologies like algal synthesis.

But the idea that this is going to get us within cooee of a 5% reduction on our emissions with a growing economy and growing population is complete nonsense, regardless of what any self-interested industry might say. There is simply no system here for restraining or slowing our growing carbon emissions. The Coalition has proposed one of the few carbon abatement mechanisms that is even worse than the Government’s CPRS.

(Bernard is not a fan of the CPRS – not because he is against a trading scheme, but because he thinks the CPRS has far too many exemptions etc so as to make it pointless.)

The Abbott policy is akin to a party coming up with a policy for dental health that is all about giving incentives to people to brush their teeth, incentives for businesses to invent a better toothpaste, and lots of good adverts about brushing teeth, but which also says we don’t need to fluoridate our water supply.

There must be a price on carbon if you want to have any chance of reducing carbon emission. It is Year 10 economics. (and bottom of the class year 10 economics at that).

And how it the policy going to paid for? Well check this out from the policy document:

Our policy will cost $3.2 billion over 4 years, while the ETS costs $40.6 billion over the first four years.
Funding for these initiatives will be provided through normal budget processes as part of the Coalition’s fiscal strategy.
The Coalition will release details of its overall fiscal strategy based on the budgetary updates to be provided by Treasury prior to the election.

Get that? It’ll cost $3.2b but we don’t know how we’ll fund it, but don’t you worry about that, we’ll tell you later – this took them all summer to come up with.

***

This all led to the first Question Time of the year, and Abbott’s first go as leader of the opposition.

He ballsed it up – he called the speaker “Mr Policy” he started with a rant that took a minute to even get close to a question, and the best he could come up with was asking Rudd if he would debate the party’s respective climate change policies on TV.

Rudd, not without some relish, pointed out that they were in Parliament which is televised and that what they were doing right now was debating climate change policies.

This went on for a few questions, before Abbott rose to suspend standing orders to debate the issue, or something like that – there was mass confusion as to what was being moved, what was being given leave etc etc. It was not particularly edifying stuff for either side, and essentially boiled down to the parliament debating for 60 minutes about climate change on whether or not they should debate for 60 minutes about climate change.

Sigh.

Abbott during this debate did what he always does in debates: he ranted. He only has one volume level – 10. He was back into the mode he had throughout his time as Health Minister in 2007 – loud and ranty. It is not a good look. It may get a 5 second grab on the news, but that means all people are ever going to see of him is him shouting. His speech seemed to be extempore – which may have been done to show how he is different from Rudd, but it meant he was all over the place. At one point he said “I am a dairy farmer”. He meant that he was being a hypothetical dairy farmer, but it came out rather oddly – especially when he then talked about union organised farm hands who work on that dairy farm. Dairy farm hands?? Yeah there’s a highly unionised workforce. Oh geez, he’s still fighting the 2007 election.

He even talked about our brave power generators who keep our lights on. Oh yes, cry me a river for energy companies….

Rudd countered with some good invective – Abbott does seem to have livened him up some. Yeah he wheeled out the “climate change is crap” line, and he mentioned the things Turnbull had written about the ETS, and he tried out the new ALP line of Abbott’s policy being a climate change con job, but all in all I thought it was one of his better debates in parliament.

Then Chris Pyne rose to speak. Why him I have no idea. Greg Hunt surely should have got the second spot. Perhaps it had to do with the fact that Rudd had read out some of Greg Hunt’s old masters thesis which has lines about a price on carbon being the most efficient and effective means to reducing carbon emissions. As they say, would that my enemy would write a book (or a thesis on environmental policy).

After this debate finished, Greg Hunt then moved a matter of public importance on climate change (yeah it was that kind of day). And when he did get to speak he began by saying how the Liberal Policy had been welcomed by the Minerals Council of Australia. Well hell. How he said that without clutching at the stabbing pains he must have felt in his chest as his soul departed his body I’ll never know. The Minerals Council? That’s like getting the mafia to praise your anti-corruption policy.

At that point I could take little more. I used to like Hunt – thought he was one of the few Liberals whom I had to admit could came up with some good ideas. No more.

And tomorrow? What will we see?  Not sure, but let us hope we can have a Question Time that doesn’t get interrupted by the grandstanding of Abbott (and if it must, can he at least build up some momentum first).

***

In more important news, the Reserve Bank kept interest rates on hold. Why? Well for one, because banks like Westpac raised their rates by more than the RBA last time. A couple key points from Glenn Stevens statement:

In Australia, economic conditions have been stronger than expected, after a mild downturn a year ago.  The effects of the fiscal stimulus on consumer demand have now faded, but household finances are being supported by strong labour market outcomes and a recovery in net worth.  Public infrastructure spending is now boosting demand, as is an upturn in housing construction.  Investment in the resources sector is strong.  The rate of unemployment appears to have peaked at a much lower level than earlier expected.

This means, “Rudd’s stimulus worked and it is now tapering off”.

CPI inflation has risen somewhat recently as temporary factors that had been holding it down are now abating.  Inflation is expected to be consistent with the target in 2010.

Code for: “The stimulus has not increased inflation and thus is not putting pressure on interest rates.” (enjoy that line Joe Hockey?).

With the risk of serious economic contraction in Australia having passed, the Board had moved at recent meetings to lessen the degree of monetary stimulus that was put in place when the outlook appeared to be much weaker.  Lenders have generally raised rates a little more than the cash rate over recent months and most loan rates have risen by close to a percentage point.  Since information about the early impact of those changes is still limited, the Board judged it appropriate to hold a steady setting of monetary policy for the time being.

Code for, “Thanks Westpac”.