Friday, September 3, 2010

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:689249-greens-labor-alliance

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. r631850_4311602

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)az_vizzini.

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:

terms of trade

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:

arrivals  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.


Lola said...

Good to see you back Grog.

Informative bit as always.

The uncertainty is an odd eye to a storm for most - I can't see how cyclone Katter is going to move but it seems it will turn on the brim of his hat...

Lord help us all.

paddybts said...

Welcome back Grog.
You truly HAVE been missed.

Andos said...

The terms of trade are certainly high, but our unemployment rate shows there is no boom in the wider economy.

Anonymous said...

Hi Grog

Welcome back, brilliant, fantastic, wonderful, piece, most enjoyable. Thankyou Grog

Hope you have settled into your new abode or sort of anyway.

Did you know you got a mention here:
Journos and pollies: lessons learned from Election 2010, Sarah Green, Upstart
and the popularity of blogs such as Grog’s Gamut as clear evidence that ‘the people formerly known as the audience [know] how to ask pretty good questions’
cheers Lyn

Greg Jericho said...

Yep Andos, that is my point - the boom is pretty narrow - and in fact could be hurting other areas of the economy.

LuluKar said...

Nice! There is the fact that we know no more than we suspected before the election, yet there was ~43% of Australian voters who seem to care more about people getting in boats and both sides pandered to it. Does logic or equity or ethics matter in politics?
Doubt it, whenever I look at how the LNP boys (and in their team in the press) like to play it seems more like the playground with name calling and sand tossing than adults using any semblance of smarts or integrity.

Just my perception .... Kevin may not have talked or shared much but I got him (I hope Julia can keep playing authentically). Is it necessary to tolerate all the fools, all the time? Yup. Seems so!

Jaeger said...

Welcome back, Grog!

It was nice of Tony, Rob and Bob to hold off their announcement until you got back; they know what's it's like to get broadband connected in a country town like Canberra. ;-)

Longfulan said...

Ditto...welcome back.
Nice piece by Mike Carlton in today's SMH, concerning an MP's electorate's wishes and his own beliefs in what is right.
I figure Katter is in danger of isolating himself and his electorate if the other two go to the ALP. He stands to lose the government's 'attention'. If Abbott forms a government, how does he address the rest of the Nats if he pork barrels the independents? Trouble ahead for him and more leverage to the Nats.

Hindmarsh Issues said...

If we risk the "mother of all housing price booms" should the Katter rate be implemented, do you imply there is not much of a housing price boom now?

sam said...

Katter does not mind a bit of arm twisting and is a friend of Kevin's. If he does go with Julia then some of the credit will flow to Kevin.
Getting reform inside the Parliament is the priority now and this would need to apply for the next 3 year term - maybe by legislation.
I hope for that all 3 go with Julia so that some stability and continuity can be delivered.

Dong said...

Welcome back Grog, excellent work as always. So good to see some sane analysis around. I did hear Katter state that he doesn't expect his list to be granted but at least looked at and some effort made to address the issues.

Dong said...

Another comment Grog, I was wondering what would have happened if the public had got the information before election day? Why didn't NATSEM tell us before then that they hadn't done any modelling. Why wasn't the competence of the accounting firm questioned before then?

SM said...

Welcome back, one of these day's I'll hit publish when I write a comment not 14 hours later.

Katter's wishlist is certainly wishful, & I suspect he knows that he won't get that, but he might get some dialogue on the issues he is trying to address and that might what he really wants.

I think the pander to the marginals and forget everyone else has essentially made the whole thing marginal.

Now if we can some parliamentary reform we might all be better off

Greg Jericho said...

Hindmarsh, the housing boom seems to be settling down a little at the moment (speaking as one who just sold his house, I can say in Canberra at least the prices did seem to have cooled slightly in the last 4-6 months).

But dropping interest rates while unemployment is dropping (or at least steady at pretty historically low levels) would put a rocket under house prices.

morewest said...

LuluKar said...
Just my perception .... Kevin may not have talked or shared much

And that accounts for about 50% of why Rudd is no longer PM. The other half is that he didn't think he needed to. That is wasn't his job to sell what the Government had, or was intending to do. In fact it was his main job!

I suspect that ATM neither of the 3 independents still know which way they'll jump. But a prediction:
If they go LNP, we'll be voting again by the middle of the term, and probably within a year. There are just too many inherent contradictions in the LNP/Indie mix for it to work successfully IMHO, especially in the NP/Indie bit. Plus I don't think the LNP has the talent pool to run this country. The stuff ups and policy back-flips are likely to be extraordinary!

But a Labor/Indie/Green/Wilkie government should last the distance, IMHO.

Whether Labor benefits from that enough to go on to win in 2013 will depend on whether it becomes a government with balls, or remains as timid as it was last term, or worse. So far the signs are unclear.

Anonymous said...

Its pretty obvious that for the Independents its not an easy choice. The Labor Party has now drifted so far to the right that they are now a more natural fit for these guys than the extreme right wing LNP. However, if they choose that route they will be punished electorally, and while they may stitch up preference deals with Labor and the Greens that is no guarantee they wont be wiped out. They need to bring in some serious wins for their electorates if they want to mitigate the damage, so expect some serious horse trading (new hospitals anyone?). It should also be noted that Bob Katter is a meat puppet of the mining industry so I cant see him siding with the ALP. Either the bloc will go to Abbott or Oakeshott and Windsor will split to the ALP and leave Abbott with Katter. Still, stranger things happen at sea...

Agnes Mack said...

Dong @ September 4 12.05 pm
You might be interested in Peter Martin's comments on the Natsem modelling

Grog, wondering if you'd heard this story from Friday's Tele ( not on line)? It claims Windsor had wanted to retire at 2010 election but, unable to recruit a suitable independent as his replacement, had recontested,but is unlikely to stand at next election. Same story said Katter would not stand again. Seemed to be a presumption that the next election would be in 2013.

If this is accurate it is interesting in the context of the present decidathon:

With nothing to lose personally both men could fearlessly follow their inclinations/consciences; And support who, is the question I suppose.

Or, Windsor certainly, and probably Katter could feel they needed to protect the independent brand which means they would support who?

MMMMM...... all sounds as if retirement plans would have zero effect, after all.

Then again the current situation may make W & K reverse their decisions, if in fact, they were planning to retire.

This weekend seems very long, so idle thoughts help pass the time until D Monday or Tuesday.

Did read somewhere today someone quoting Oakeshott as saying decision could be this weekend, Monday at latest. Will be watching Twitter tomorrow.

Great to see you back disseminating sense to the world.

Johng said...

I wonder if it might be useful for JG to offer Katter the independent speakership plus some goodies (NBN) then Oakeshott and Windsor could join Wilkie and Bandt as allies of the ALP. That would mean Katter couldn't be challenged by the Nats and the others could use the poor COALition budget numbers as their excuse.

Ben said...

It's a shame the Rudd Government seemed to think tackling a two speed economy by altering the way resources were taxed was a dirty little secret. You'd have thought they'd be spruiking the message for all they were worth: "You know how the Reserve Bank keeps having to increase interest rates even though you're doing it tough? Well this tax reform will help." Instead, they let the mining industry's slaughtered golden-egg-laying goose metaphor get purchase - a neat, almost free way to avoid paying more taxes, but a complete furphy.

Alistair Baillieu-McEwan said...

Thank goodness for your reappearance from the nether world.
It's not really a resurrection I know but the dearth of comment from a thoughtful site this week has been a source of some sadness, given the rubbish we have had to put up with in the mainstream media. Hope the carriers didn't knock off too many cartons of goods from your shift and it really sounds like you have fallen for the real estate agents old trick of talking down the neighbourhood for vendors so they can get a good price for their mates (hope it is really not the case for you).
Currently I am hoping for two of the independents to go Labor but I'm uncertain really about Tony Windsor. At the moment I understand Bob Katter has remained in Canberra this weekend (an ominous sign I think) and is to appear on Q&A on Monday night, which suggests his decision will be made either Sunday (to accommodate the Sunday political shows) or Monday (to have fait accompli prior to Q&A). If this is a correct reading of events, this could be that he will either go with the Liberals or remain fiercely independent. I note from another blog that perhaps he is about to announce an alliance with the Liberals but there is so much noise about that I'm not sure how much credence to place on it.
Who said politics was dull?

Alistair Baillieu-McEwan said...

P.S. Does your Webmaster know about columns and quarter columns. This comment thread becomes very lengthy when read as a column rather than being read across the page. (No offence intended MAATE!)

Greg Jericho said...

Ben - you're spot on about how it should have been sold.

A B McE - that'sa blogspot things. the best way is to just click on th etitle of the post and then scroll down rather than clicking on the comments tab.

Mark said...

It's nice to see someone who agrees with my contention that the Nationals (which Katter still is at heart) have a large socialist component to their ideology.

Not that that's a bad thing.

vp said...

"The week ended with Bob Katter putting out his own wish list"

Has it occurred to anyone that the Undies have already made up their minds and are now handing out rope for nooses?

vp said...

... and that they are delaying going public because they are extracting the maximum, especially about reform of parliamentary practices?

Natalie said...

Wonderful to see you back!
I am hopeful that we will have a Labor minority gov. Tones has f-ed it up too badly. We hope..