Saturday, February 23, 2013

Saturday Morning Musings - Australian threads February 2013

Today, just straws in the Australian wind. In most cases, I'm not giving links. They are just things that I am watching for both professional and personal reasons.

The formal separation between the Australian Greens and Federal Labor had some immediate negative connotations for the Government. However, from a practical viewpoint, there File:AdmbandtJuly2010.jpgare two things to watch.

The first is the Green vote or, in advance of the election, the polls on the Green vote. The Greens are fighting to hold their one House of Representatives and are under threat in the Senate. To do this, they wanted separation from Labor to consolidate their base. To give you a benchmark to watch and someone to criticise, my forecast is that the Green vote has peaked. They will lose votes in this polarised election. 

Will Adam Bandt hold Melbourne, his House of of Representatives seat? I really have no idea!  The formal numbers are against him, but I know from my own experience that a hard working local member can build support. It's easier in the country where people have more access to their member, but it's true in the city as well. Let me chance my arm so that you can really attack me later! Bandt to hold his seat.

The second thing to watch is just what happens in the environment debate. As I see the dynamics, the Greens have been sidelined. Labor is going for the immediate political response issues, the Coalition is responding; I am not sure where the Greens fit in. My forecast? I don't expect the environment to be a particularly significant issue at this election when measured by voter responses.

The environment may not be significant, but the national broadband network may be. This is one issue where, on the polls, Labor is seen as positive. Communications  shadow minister Malcolm Turnbull has been hammering away at this. Broadband is good. We will accelerate roll-out, but we will also do a cost benefit analysis. Meantime, there have been some problems with the roll-out. This is an Armidale example. I suspect that this one will be resolved (Armidale is in Tony Windsor's  New England seat), but you can expect other problems to be highlighted.

Meantime, the Gillard Government is displaying the same type of reactive flip flop behaviour that was such a feature of the last days of the NSW Labor administration. This includes a desire to talk tough, to be seen as active. to chase an immediate political gain; we have seen it most recently in Environment Minister Tony Burke's responses on environmental matters and in the health arena. It's silly really, for it adds to the impression of chaos. Incumbency is the one thing the Government has going for it, and that asset is being wasted. Expect more of the same.

Will Kevin Rudd replace Julia Gillard? Many of the political commentators have been calling it that way, but the institutional structures within the Labor Party make it difficult. In any event, I'm bored with it all!

The economy is far more interesting. The world is awash with cash via central bank quantitative easing. This is keeping the Australian dollar higher than it would otherwise be. All that cash will ultimately feed into the combination of rising asset prices (we can see that now) and increased economic activity. As it does, central banks will change track; global official interest rates will rise and the value of the Australian dollar fall.

When? Sooner than most people expect and certainly some time in 2013. We have already seen the first signs of it. Watch this space.

Some time back, I spent a lot of time writing about the impact of demographic change and especially an aging population in many countries. Now the effects are clearly with us. It is one of the reasons why Japan and the Europeans are struggling to regain growth. The most recent statistics on the Chinese workforce showed the first fall in history. It was small, but a sign of things to come.

We really haven't addressed the question of the best way for countries to adjust. Discussion has focused on cost issues, on the way in which aging populations will affect health care and benefits costs. How do we fund these when the working population is a diminishing proportion of the total population? But it's a lot more than that.

Demographic change is incremental and often invisible in the short term. Then it begins to bite and bite hard. Will we see a major focus on this in 2013? Probably not, although coverage is increasing. Should we? Almost certainly yes.

Finally, something I want to write about at a later point, Journey to the West: Conquering the Demons: 


Rod said...

I saw a good anonymous ALP member joke about the Greens ditching the ALP earlier this week:

"It is really humiliating having the greens dump is, they are the only party more hated than us!"

Jim Belshaw said...

I suspect that there are a lot of these jokes around, Rod.