Election 2010: Extra Time (or, are we there yet?)

So a little bit happened this week. And not much happened as well.

This time last week we were thinking Adam Bandt would side with the ALP, and so too would Andrew Wilkie. This would get the ALP to 74 seats, and still mean the 3 independents could get Abbott over the line. We also knew the Liberal’s costings were complete tosh and that this would be revealed were the Libs to submit them to Treasury.

This all occurred, meaning that we are pretty much where we all expected to be a week ago (and even further back, really).

And yet there’s talk of Gillard having “momentum”.

Such talk is of course rather foolish given momentum implies Katter, Oakeshott and Windsor are linked to Wilkie, Bandt and the Liberal’s costings. For all the talk of the seats being like a score, in reality Gillard is as far away from being PM as she was on August 22. Being 2 seats short is no better than being 3 or 4 seats short. It’s a zero sum game this: someone will win, someone will lose (I am discounting the chance that the count will end up at 75 all – Katter, Oakeshott and Windsor would have to purposefully take that option, and I doubt they will).

And yet we have the ALP paying odds of $1.40 and the Libs are at $2.75.

Hmmm. I wonder if this is the time to mention that those were close to the odds being offered on the morning of August 21?

The talk of momentum is due to the Libs, let’s be honest, not having a great week. But this is not an election campaign, so what does it matter? Sure maybe the electorate would have been swayed to vote in greater numbers for the ALP had this past week been the last week of the election campaign, but at this point the voters don’t get a say (or more to the point, we’ve already had a say, and now we wait to see what it all means) – Katter, Windsor and Oakeshott are the only ones who matter.

We shouldn’t talk of momentum, we should talk of positioning. Who has positioned themselves best to make life easy for the three wise independents?

So let’s have a look at the last week and see what could affect their choice.

Firstly the deal between the Greens and the ALP.

The Australian may like to try and scare the horses with talk of the mining companies getting nervous (oh dear, not the mining companies!!!), but if any mining company executive was actually shocked by the deal they deserve to be sacked for stupidity – for not only overreacting, but for also not thinking back in November last year that there was a real prospect of the ALP winning the election and the Greens having the balance of power in the Senate, and thus maybe getting the Libs to agree to the relatively useless RSPT would have been in their interests.

Tony Abbott and Joe Hockey might also like to talk up the ALP selling its soul and becoming some left-wing ogre party that will make Gough look like a economic rationalist, but please – read the actual agreement: the Greens-ALP deal gives the Greens access to the Public Service to cost policies, and gives them regular briefings from the ALP on its legislation, but in terms of agreeing on policies? There ain’t a lot.

Here’s all there is on climate change:

That Australia must tackle climate change and that reducing carbon pollution by 2020 will require a price on carbon. Therefore the Parties agree to form a well resourced Climate Change Committee which encompasses experts and representative ALP, Greens, independent and Coalition parliamentarians who are committed to tackling climate change and who acknowledge that reducing carbon pollution by 2020 will require a carbon price. The Committee will be resourced like a Cabinet Committee. The Parties will, by the end of September 2010, finalise the structure, membership and work plan of the Committee.

It doesn’t lock either side in to much more than promising to try really hard to get to a price on carbon. This is not much more than Rudd was going to do back in 2007. It is amazing how easily people in the media forget that both Howard and Rudd pledged to bring in a price on carbon, so it is hardly a “far left” idea.

But of course now it’s communism.

And if the big policy shift from this deal is the ALP putting the citizen’s assembly in a drawer, does anyone think that is a bad thing? I mean, what was Abbott doing making it seem like it was a terrible thing for the citizen’s assembly promise to be broken? Ninety percent of the nation was cheering the move.

I doubt the 3 independents care too much about the deal – they’re not stupid and would not be taking too much notice of Abbott and his “there is a new coalition” line.

Incidentally Abbott really should shut up on that score, given he has been making such a big deal about the primary vote of his coalition. At the moment the LNP primary vote stands at 43.67%; the ALP-Greens “coalition” primary vote is 49.7%.

Then there were the Treasury costings.

These were not expected to show the Liberals in a good fiduciary light. Last week I wrote:

So if the Libs costing were out a few million – say 100-200 million, it wouldn’t really matter. But this move makes me think they’re out by a bit more than that. I think we’re in the billions territory.

This is the key aspect about the costings: yes they were bad, but it was that it was so obvious to everyone that the Libs knew they were bad that makes it all look shoddy.

Forget Abbott and Robb’s "it’s just a difference of opinion” malarky, Peter Martin nailed them brilliantly. Martin also shows that the Libs were also stretching the truth (ok, lying) when they said National Centre for Economic Modelling did the modelling – they weren’t. At all. Whoops.

Had the Libs confidentially put their costing forward, but trumpeting that they fully expected there to be some differences due to economic modelling, then they might have had a bit more of a foundation on which to build their defence – after all economists love to disagree on modelling. But they spent most of the last three weeks obviously embarrassed about their costings, and obviously scared to put them to Treasury. Thus when they came back as they did – a good $7b-$11b short – well it looked like a schoolkid making a big deal about not wanting to have his bag checked by the teacher, only for it to be found that it is full of drugs– it’s a bit late at that point to act like you don’t know how it got in there.

The costings had an impact on Wilkie, and I would argue the other three would also have looked at Abbott, Hockey and Robb and thought that the Libs had just given them an easy out to side with the ALP.

Yes the whole Charter of Budget Honesty process is a crock, but the Libs tied the noose themselves; they can’t blame anyone else.

They also do not have anyone else to blame for Wilkie turning them down despite their offering $1b for a new hospital. Wilkie has said his offer was not a trap, but that doesn’t mean it wasn’t a test – one that Abbott failed.

When Wilkie put out his list, it was pretty well regarded by all sensible people as being a list that should not be agreed to. It smacked of ambit claim. And you always lose a bit of respect to people who agree to such claims.

For Joe Hockey to now suggest it was a bit of a double cross is just lame.

Back when I was in Year 6 my class was given test on road laws. Our teacher told us it wouldn’t count towards any grades, and so most of us took it all pretty lightly – I even gave a few incorrect answers just to be funny. And then once we had marked the test as a class (and all laughed at my joke answers), our teacher told us that the person who had scored the highest mark was now in the running to win a BMX. The class howled in protest that we didn’t know that was what the test was for. The teacher told us he had just said it wouldn’t count towards our grades, not that it wouldn’t count. It was our fault for treating the test lightly.

Similarly Abbott and Hockey want to howl in protest that they didn’t realise Wilkie was testing to see who could put forward the most economically responsible offer. Abbott assumed it was an auction. Just because Wilkie never said it wasn’t, didn’t mean it was.

Wilkie’s revelations of the negotiations will also (regardless, I think, of what they say) have an impact on the other three. Not so much because they will look at Abbott differently, more the revelations give them yet another reason to side with the ALP. And they need reasons. All three will be safe regardless of who they choose, but it is hard to deny that their electorates are more LNP leaning than ALP. As Tony Windsor said today:

"In terms of people in the electorate, that's [siding with the LNP] the easy pathway."

The problem for Abbott is that with his costings, the way the Liberals and Nationals have dealt with the three independents and the way it has been revealed he dealt with Wilkie he has not actually made it easy for them. What this week has revealed is that Gillard is a much better negotiator than Abbott. Abbott can’t even get Tony Crook to write down on paper that he will side with the Libs! Inconceivable! (as Vizzini and now Andrew Robb would say).

What has also been revealed is that the Liberals are getting very desperate. They have now flicked the "far-left fear switch” – even John Howard is getting in on the act! Andrew Robb has also used Twitter to put out a pretty bizarre message:

It's inconceivable that country Independents could back Labor/Greens coalition.

Robb is obviously not a fan of The Princess Bride, else he would be aware of the line in response to Vizzini using “inconceivable”: “I do not think it means what you think it does”.

Inconceivable? Hardly. In fact, keep up that attitude, and it’ll be “likely”.

The week ended with Bob Katter putting out his own wish list. That he has done is a sign that he may vote a different way to Oakeshott and Windsor who have not taken this route.

His list of items is somewhat bizarre, and somewhat interesting.

Some are downright dopey:

18. The government to provide assurance that it will address the unfair and artificially high value of the Australian dollar, on which upward pressure is placed by interest rates that are out of step with international benchmarks

I wonder if Katter has heard of inflation? If interest rates were dropped 2-3% to reduce the Australian dollar, we would see the mother of all housing price booms (followed by a massive bust), the cost of imports would rise – notably petrol, and it would be 1982 all over again.

He also wants there to be no mining tax, not realising that a mining tax would do more than just about any other Government policy to help bring down the price of the dollar. The dirty secret that Rudd and Swan were too gutless to admit back in May was that the RSPT was meant to slow down the mining industry – one of its purposes was to get away from the boom/bust mining industry. And we are certainly in a boom right now. This week’s terms of trade figures show we are in a boom almost unlike any other we have seen:

The boom in the mining industry is causing the dollar to appreciate, making it much harder for other industries that rely on a lower dollar – such as farming and tourism.

As we saw in the national accounts, Queensland was really suffering over the last 12 months – its domestic demand growing by only 1.6% compared to NSW going up by 5.7%, SA, 5.9%, Vic, 6.0 and WA 7.9%. And we know many parts of Queensland exist on tourism – but the numbers of tourists have flat-lined:

  So yeah the mining boom is great, but it’s not all great. Anyone who thinks what we should do is encourage the boom really should go spend some time in Cairns and ask the tour operators their if they are loving the high dollar that comes with it.

Katter’s list does certainly have a LNP flavour to it – but it also has an old 1970s agrarian-socialist aspect as well.

I doubt either side will agree to much of it that it hasn’t already agreed to.

Abbott won’t because if he were to, even The Australian would have to seriously question his economic credibility. Julia won’t because she may bet that she does not need his vote and that also the risks to agreeing to his wishes are too great. She currently has the economic high ground, there is no way she would blow that just to please Bob Katter.

So after all of this where are we?

I hesitate to say the ALP are in the box seat – mostly because I still fear getting my hopes up. But I will say that at this point the only reason I can see for Katter, Windsor and Oakeshott siding with Abbott is that they think if they don’t they will lose their seat.

The problem for the Libs is that I have yet to see any evidence that either of them would lose their seat were they to choose Julia, and also Abbott has given them more than enough reason to explain to their electorate why they have chosen Julia over him.

It’s not over by any stretch, but there’s a reason why the Libs are playing the “far-left-communist-evil-red-greens-under-the-bed-we’ll-all-be-ruined card”. And it ain’t because they’re feeling confident of their position.

***

UPDATE: Today’s Newspoll in The Oz of the three electorates of Lyne, New England and Kennedy (sorry it’s a nation wide Newspoll so what follows is a bit wrong) is very interesting:

The ALP is now favoured 47 percent to the LNP’s 39. Given that a similar poll done two weeks ago was favouring the LNP 54 to the ALP’s 34, we can pretty convincingly say that the ALP and Gillard in particular has played this game better.

This is rather surprising given the internal “civil war” that the media was desperate to play up two weeks ago.

Is this the game over signal? It almost removes the final concern the three independents may have had in favouring the ALP.

Julia Gillard’s position just became that little bit stronger.

 

UPDATE 2: Whoops it was a nation-wide poll. So yes their three electorates are still an issue, but if you divide the uncommitted on a 50/50 basis you have the ALP favoured 54-46. It still makes it hard for the 3 indeps to say they are acting as the nation wants by siding with Abbott.