Thursday, February 12, 2009

Bluffing for a $42 billion pot

Today Nick Xenophon voted against the Government's $42b stimulus package. Throughout the day the Government had been doing deals with the Greens - knocking $50 off the cash handouts to be channelled towards green and local "job creation initiatives". Fielding couldn't be accommodated, basically because his plan of $4b to be spent helping the unemployed was pure pie-in-the-sky stuff. But even so, he voted for the package, suggesting in his speech that the package was better than nothing (and he made note that the Liberal Party had not really come up with any stimulus package at all, so in effect there was no alternative).

Xenophon however put forward an amendment to:

(a) bring forward $3.1 billion in funding allocated to buy back water entitlements and accelerate implementation of the Restoring the Balance in the Murray-Darling Basin program; and
(b) bring forward $2 billion of the $5.8 billion allocated to water infrastructure programs in the Murray-Darling Basin under the Commonwealth's Water Plan; and
(c) bring forward $250 million in funding for pilot stormwater harvesting projects through the National Water Security Plan for Towns and Cities; and
(d) provide for the payment of grants of up to a total of $2 billion under the structural adjustment scheme

Now bringing forward things seems an easy thing to do, as though it is costless. Of course it is not, especially if those billions of dollars are budgeted to be spent in a future financial year.

But the Government called Xenophon's bluff and voted against the amendment (so did the Libs), and then it turned out he wasn't. So all scuppered?

Nope. Bob Brown (who obviously knew what was going on, and knows a poker game when he sees it) moved that the Senate immediately be suspended and that it sit again tomorrow. Pointedly Xenophon voted in favour of this (had he not, the Bill would have been well and truly dead).

So tonight the Government will sit down with Senator Nick in the hope that he is not completely without intelligence, and do a deal.

There is no gain for Xenophon for the package to be rejected. He would also know that should the package be rejected, it won't be the Government who gets blamed by the voters (he also knows the Government will blame Turnbull, not him). But Xenophon also knows his bluff is only good if he gets something. If he folds now, he will have lost all credibility. The Government needs to know this as well. It's a precarious position for both sides (precarious I guess only if they actually want the package to be passed - which I believe both sides do).

Xenophon is hoping the Government was bluffing when it said it couldn't give him more money for the water buy-back, because otherwise he gets nothing, and so the Government needs to be able to convince him that it is not bluffing when it comes back with another offer. Otherwise Xenophon will vote it down - he has no choice now, he must get something.

My belief is the package will get passed, and Xenophon will be happy - his profile will be raised, he'll be able to tell the voters of South Australia that he stood up for them. The Greens will also be happy - they've got some concessions, and a pledge from the Government to do something about the pension in the May budget. Fielding will not be completely happy, but he'll vote yes anyway.

The only person completely unhappy will be Malcolm Turnbull who will have observed all these goings on, but because of his over-the-top stance of rejecting the package from the outset, has been completely irrelevant to the process.

He will bluster that the Government mismanaged the whole thing, and that Rudd treated the opposition with contempt etc etc. No one will care. Most people have no idea how parliament works; all they know is Rudd wanted to spend $42b to keep Australia out of recession, and Turnbull wanted to do nothing (ask yourself how many people could tell you how much the opposition suggested spending).

In this hand of poker, Turnbull was the one who went 'all in' - he bet every political chip he has. Unfortunately he's found that around the table the Greens were holding 3 of a kind, Xenophon a flush, and Rudd a full house. And when Turnbull turned over his cards, it was found that he had nothing but a lousy pair of deuces. His bluff was called by everyone.

One thing Turnbull should know about poker: if you look around the table and you don't know who the sucker is, it is you.

1 comment:

Len said...

So you actually believe that the Australian economy will be saved with this $42billion package.
You actually believe that!
You, yes you, actually believe it!
Hey mate,
Australia is not the centre of the world.
China, Japan and the USA is.
They are the elephants and Australia is the ant.