Friday, February 08, 2013

The first three Federal election issues - the economy, industrial relations and NSW Labor

I hope to follow up on Australia & the meaning of the migrant contribution with a new post tomorrow. For the moment, I want to return to local Australian politics.

With the Federal elections set for September, my mind has begun to focus on the issues likely to be important in that election. Here there is not much use following the current opinion polls, you have to decide what will be most most relevant in seven month's time. In other words, you have to second guess what will happen over the intervening period. Then you need to factor what is happening now. Well, I am now prepared to nominate my first three choices.

The first is the Australian economy. This continues to weaken. Whichever ways you cut the numbers, the probabilities are that it will continue to weaken for the immediate future. The electorate is already worried about the economy, in part because so many of us are in uncertain jobs. It won't  take much of a weakening to bring those worries to the fore.

The second is industrial relations. I really hadn't expected this one, but then I hadn't planned on the union movement. In November 2007, the Rudd election, industrial relations was a major plus for the  Labor Party. Worries about the Howard Government's Work Choices proved a major issue that the Union Movement was able to capitalise on in a very effective campaign in support of the then Labor opposition.  The campaign was so effective that the Coalition abandoned any support for Work Choices. Work Choices is dead, said Mr Abbott.

That was true. Burt no one expected that the new Government's replacement legislation would be so complicated, nor did they expect the union movement to redeploy past industrial tactics. I haven't followed the detail of industrial disputes, that's far too complicated unless you are an expert, but those especially in the mining sector have a familiar ring. It's the big end of town who will provide the money, but it's the thousands of individuals and smaller businesses that have been affected by all the complexities who will provide the votes. The union movement is imposing levies and calling in funds for a major campaign to support the Government. However, that is in itself something of a poisoned chalice when the union movement itself is re-seen as part of the problem.

The third issue is the ICAC (Independent Commission against Corruption) into ministerial dealings in NSW. The doings of the Obeid family have attracted riveted attention because of their strangeness and complexity. This is the latest example.  Forget the legal issues, that's a matter for others. I can't comment.  But I have never read anything like the strange stories revealed.

I first wrote about the New South Walesing  of the Federal Government (Is Mr Rudd being New South Walesed?) back in June 2008. I think that I was probably the first to use that phase; it became popular later. My focus then was on policy. I had no idea NSW Labor and especially the right would cast such a stench as to bring my assessment to such a nasty conclusion, for this will be hard for Federal Labor to overcome.

I have tried to be objective in this first part of the post. I now want to express a purely personal opinion.

I do not believe that whatever corruption may prove to have existed in NSW in any way extends to Federal Labor. I do believe that the Federal party is tarnished by some of the same type of win whatever the cost mentality that coarsened NSW Labor. I have heard the f**ck word used too many times by ministerial staff who believe that winning the immediate game is the most important thing and that you must win whatever the cost, who believe that to be tough is to is to show balls. This applies to women as well as men.

To think that the staffers and machine officials on the non-Labor side do not have the same views would be absurd. On both sides, I am talking in generalities. I accept that for many individuals my assertion is not true. As I said, this is a personal opinion. 

If I'm in any way right, those of us who want improvement have to subject the Coalition to the same degree of policy scrutiny as we apply to the Government. After all, the Coalition may well be in Government in November with Mr Abbott as PM.


Winton Bates said...

In my view the big issue is 'where will the money come from' to fund election promises. We may have a structural deficit at present and both the major parties look like proposing substantial spending increases for disability and education.

The Coalition has the problem of specifying what spending cuts will be made to compensate for loss of revenue from the mining tax and carbon tax. I don't think that is a huge problem because the mining tax isn't raising much revenue and if we don't have a carbon tax we don't need the compensation payments that accompanied its introduction.

Labor has the immediate problem of bringing down a budget with numbers that add up to a surplus.

Anonymous said...

Steady on you two! I seem to remember that our PM stated that all politicking would be left until after parliament rises?

Anyway, I can't help thinking that economics as practised politically is much more akin to astronomy - being more really about the discovery and delineation of black holes.


Jim Belshaw said...

Winton, I was focusing on the question of just what the issues might be. But let me ask you a question. Why do you think the question of where the money might come from is important? I think that I know your answer. I want you to spell it out.

Jim Belshaw said...

Hang on bit kvd, this is not about politicking! You may well be right about black holes.

Winton Bates said...

I thought I was also focusing on the question of what the issues might be. Australian politicians have encouraged the public to believe that it is important to balance the budget. Some of them might now regret that, but they are stuck with it.

I think that is sensible to focus on where the money will come from for three reasons:
First, to avoid a slippery slope towards increased debt and unpalatable choices (as in southern Europe today and in Australia's past when the terms of trade have moved against us following public spending booms).
Second, if left unresolved during the lead-up to the election it is likely to be resolved afterwards in less transparent ways - e.g. razor gangs, non-transparent tax increases, the inflation tax.
Third, it might lead to a debate about size of government - if Labor comes out in favour of higher taxes and the Coalition comes out in favour of spending cuts. I would like to see such a debate because people should be thinking more about the consequences of having governments do things for them that they can do for themselves.

kvd: The budget numbers for spending and tax are becoming astronomical too!

Anonymous said...

Astronomy? I thought (as J K Galbraith once remarked) that economists were more akin to astrologers.

Jim Belshaw said...

Take your point, Winton. Still, I suspect that the deficit issue will be secondary, playing itself out in the context of who is the better manager. There has actually been a shift in views on the deficit question.

So both sides will talk about where the money is to come from, but I am uncertain how this will play out.

Mmm, anon. As a sometimes economist, I agree that some economists are arguably closer to astrologers, but I would still defend the discipline!