Saturday, August 24, 2013

Saturday Morning Musings - elections, budgets & the patterns of political and demographic change in Australia

I have been off air, so to speak, since Monday because of the need to complete other things. Meantime, the election has ground on. This has been a very strange campaign, really two campaigns, The first is the official campaign, the second the surrounding analysis and commentary.  Of the two, the second is the more informed, interesting and indeed important for it is delineating the issues that either side will have to deal with following the election.

The official campaign is all about specific initiatives that may or may not be offset by spending cuts. Nobody is quite sure what might be cut, indeed, nobody is quite sure about anything. We may or may not buy some decrepit Indonesian fishing boats. We may or may not get the budget back into surplus. We may build this road or then again we may not. We may or may not develop the north. We definitely won't increase GST, but then again we may. I get confused, I must say, for I am not sure what any of it means. Neither side has really articulated a clear picture or clear principles that I can easily understand.  

At least with the second campaign, the surrounding analysis and commentary is drawing out key issues quite clearly.

It is clear, for example, that the Australian Government faces significant expenditure constraints that must be dealt with by tax increases or expenditure cuts or a combination of the two. The quantum may vary depending on your view about the size of government and the acceptable level of budget deficit, but the central principle remains true. I am not saying anything new, just stating an accepted fact.

We also face an uncertain economic outlook. Again, I am not saying anything new. Globally, there are signs of economic revival in the developing world, while the developing world is slowing. In a world awash with money, short term currency flows can have significant impacts as we have just seen, with flows from emerging markets to the US. Australian domestic activity on which tax revenues depend is sluggish. If we take the official estimates on which the Commonwealth budget is predicated, higher or lower results are equally likely. This increases budget uncertainty.

Of all the various issues raised during the election campaign, the one that has emerged as most important in a macro sense is productivity improvement. Without productivity improvement, the country's ability to fund things will be further constrained. Both sides agree on this, but neither has really articulated a coherent approach towards the issue. Grouping a series of sometimes ad hoc initiatives usually developed for other reasons under a productivity improvement mantra, Gonski or Mr Abbott's paid parental leave scheme come to mind, does not make for a coherent approach. 

I have come to think of this election as the pain election. With both sides trying to balance promises with cuts in the name of budget neutrality, each promise involves pain for someone else. In the case of Mr Abbott's paid parental leave scheme, as a simple example, shareholders will lose a degree of franking credit. Both sides are involved in a game of redistribution, redistributing a notionally fixed cake at the margin. That is why it is so important to have the detail of the Coalition promises and associated cuts elsewhere.

Since the final size of the cake is actually uncertain, we also need to make judgements about what might have to be done if the economy performs less well than expected. Given the promises and pledged expenditure cuts, just what flexibility will either side have in responding? What promises might have to be broken, what new cuts imposed, what taxes increased? I would feel a lot more comfortable if I could provide an indicative answer to those questions.

The latest public opinion polls (as always, the Poll Bludger provides a good entry point here) show Labor weakening. It is hard to see the Coalition losing; the only question in my mind is the size of the victory. However, the thing that now interests me is what the polls, as well as the qualitative analysis, might say about the future, the changing structure of Australia and Australian politics.

If we look at the detail of the latest poll, we find a very skewed voting structure based on age. To draw this out, I have selected some of the data and put it in the following table grouped by age.

Age Group 18-24 % 25-39 % 40-54 %
Labor 38 40 35
Coalition 32 40 49
Greens 21 12 9
Independent 3 3 3
Other 6 4 4
Prime Minister's Performance      
Approve 59 50 41
Disapprove 35 42 54
Uncommitted 6 8 5
Opposition Leader's Performance      
Approve 34 39 44
Disapprove 62 56 53
Uncommitted 4 5 3
Preferred Prime Minister      
Gillard/Rudd 62 56 44
Abbott 34 37 47
Uncommitted 4 6 9

The age skew in the figures is very interesting from a longer term perspective. The Coalition vote is strongly skewed towards the 40+, the Green vote is heavily skewed towards the young (21% in the 18-24 age group is very high indeed), while Labor is strongest in those up to 39. This is a generational election in which older Australians have swung towards Coalition. younger Australians away from the Coalition. If this election were held tomorrow with voting limited to those under forty, Labor would romp in with strong Green support.

This pattern fits with my perceptions of the views of younger Australians. They are less likely to support stop the boats, more likely to believe that climate change is a real problem, more likely to be left of centre on social issues including gay marriage. The distribution shows why, from a Labor perspective, it is so important to try to minimise losses in this election. The age distribution vote skew is so pronounced that, if the voting intentions were to stay the same, each year that passes improves Labor's vote as the presently younger age cohorts age, the older cohorts diminish.

The Greens will obviously be pleased too. While their overall vote has apparently weakened (10% in this poll vs 11.8% at the last election), the high youth support does provide a base for subsequent Senate elections.

   There are a number of other interesting features in the numbers. However, I am out of time this morning. I am going to be watching the detailed pattern of voting on 7 September with interest not because of the overall result, but for what it may tell us about the longer term changing pattern across Australia.


Anonymous said...

It will be interesting to see how long after Mr Abbot's success his Pymble Privileged Largess survives in its proposed form. I find it fascinating that, among female voters (see right, bottom, graphic) this specific policy provides the greatest point of difference in Labor's favour; goes for males as well, but much less so.

My bet is that the incoming LNP government will find "things are worse than we thought", and then defer it until around about never.


Jim Belshaw said...

That graphic is interesting, kvd. This does seem to be an unusual case, one where a clear majority agrees its just too expensive.

Winton Bates said...


I suspect that support for the Greens and Labor among the young has more to do with personalities of leaders than with policies. It would be interesting to see some more in depth polling on this question.

Jim Belshaw said...

More in depth polling would be interesting, Winton. My own direct contact with the age groups in question comes via my daughters and their friends. They are arguably not representative of the cohorts in question in a national sense, but they may be representative of the group in which the Green vote is most concentrated. University educated, city urban.

In saying all this, I am not making specific comments on the way my girls plan to vote and why. That's their business. Rather, I am generalising.

My impression is that this group is not ideological in the traditional sense of the word, but issues focused on a relatively narrow range of issues. Gay marriage is one of the touchstone issues. To the extent that personalities come into play, the emphasis is on dislikes. Mr Abbott is greatly disliked, Mr Turnbull liked but in a relatively neutral way. There is no leadership fetish. Bob Brown is known, but Chistine who?

There is a degree of disengagement with the system.

I accept that these are broad generalisations about one slice of the younger cohorts. I am simply not in contact enough with enough groups to be sure of varying patterns, although I have developed hypotheses over time. That is one reason why I am going to be so interested in the on-ground detail of the voting patterns; they provide a test.

Evan said...

Perhaps lots of people have concluded that the majors will say anything to win the election. And then they make their assessment on their guess about how the parties will act while in government.

It is pretty clear that neither party has a firm philosophy or ideology. I don't mind this convergence in principle - but that the convergence has been around viciousness to asylum seekers and keeping the faith of neo-liberal economics I do mind.

It looks like the majors support is dying (literally). It is interesting that the Greens are the ideological ("extremist") party - and that this is the party that appeals to the young.

It will be interesting to see how political parties morph. There membership is tiny - they are only being propped up by our voting system.

Anonymous said...

Most people with whom I come into contact (widely distributed across the age- and socio-demographic)think the Greens are an extremist party with quite mad ideas. Some Greens are former communists. Their equivocal position on BDS, moreover gives comfort to the likes of neo-Nazis such as Frederick Tobin.


Jim Belshaw said...

Green support is, I think, still very localised, Evan. A lot of people do, as with DG, think of the Greens as an extremist party. That was why the 21% among those under 24 came as a bit of a surprise.

Rod said...

Hi Jim,

I'm not sure that the concept of generational change in politics is completely the case. For example, a 21 year old that might vote for the Greens now will experience life and may change their support as life circumstances encourage reassessment of this position.

The Greens are very much an idealistic party and often the reality of life may change this idealism.

I guess I might be that example. I voted Greens when I was young and now would not touch them(and I was even a member the socialist youth organisation Resistance!). I currently work in an environmental protection role and have for most of my career. Yet, I see the Greens as being more dangerous to our society than their ability to fix environmental issues. Therefore, I more closely align with the National party now... but even that may change as I get older.

Jim Belshaw said...

Life does change us, Rod!