Month: June 1998

Will One Nation win any seats in the Queensland election on Saturday week?

The answer to that question will affect Australian politics profoundly for some time to come. If One Nation gets a seat or more it will give it (and its insidious views) an official platform for another three years.

One Nation’s presence in the national parliament, through Pauline Hanson, was an accident. She stood as a Liberal candidate, but was disendorsed just before the 1996 election after spouting her views that Aborigines are advantaged and that the country is being swamped by Asians. But the disendorsement was too late to take the party label LIBERAL off the ballot paper. Many Liberals voted for her in ignorance. But her winning gave her and her creation a base and momentum which otherwise would have had no significance.

A One Nation victory in any Queensland seat would be a victory in its own right. It, too, could create its momentum in the Senate election. People are more likely to vote for an entity with existing MPs. Indeed, there are some rough electoral parallels between the rise of the Australian Democrats and One Nation, even if their policies are poles apart. Both started with one MP shearing off from the Liberal Party. The Democrats then gained foothold in South Australia by winning a seat in the 1977 state election, just as One Nation hopes to win some Queensland seats. Then comes Senate representation and a fairly permanent significance in the Australian body politic. For One Nation, the election on Saturday week is critical. If it gets one or more seats it could get a foothold like the Democrats, if it fails to get a seat it will fall into oblivion. For the reasons outlined by former Prime Minister Malcolm Fraser last week, that’s what I hope happens. But it may not.
Continue reading “1998_06_june_qld preferences”

The extraordinary thing about One Nation’s vote is that it has translated into parliamentary seats where the electoral system is single-member electorates.

Hitherto, minor parties have only made it to Houses where there this is proportional representation — mainly Upper Houses and in Tasmania and the ACT, aside from those who left major parties mid-term.

It makes One Nation a more powerful party than the Greens, the Democrats or the now-defunct Democratic Labor Party. They could only deal in preferences and bargains over legislation. One Nation has the stranglehold over government itself.

Its six to nine seats will be critical to National Party Premier Rob Borbidge. (It does not seem likely that Labor will get a majority.) Indeed, there might be more One Nation Party MPs propping up his Government than Liberals.

Prime Minister John Howard should welcome this. Indeed, he should be quietly hoping that One Nation is seen to be an active element of the new Borbidge Government.
Continue reading “1998_06_june_qld poll analysis”

I have two free ideas for John Howard to help him sell the GST.

In fact, they are not my original ideas, but as there are two of them, it falls into the category of research rather than plagiarism.

The first relates to the Aussie dollar, which is taking a bit of a battering at the moment. And the second relates to the Queensland election.

Since Australia floated the dollar in the mid-1980s it has floated between 57c after the then Treasurer Paul Keating made his famous “”banana republic” comment in 1986 and above 80c in the middle of this decade. That is a reasonable range. An equivalent to the recent Indonesian currency collapsed would put our dollar at under 20c.

Nonetheless the present dip below the psychological 60c barrier is dangerous. It is dangerous because it is a psychological barrier, not a rational one. And it is nonsense to expect the “”rational” markets to bring it back up to a truer value. If markets were rational, diamonds would be worth a little to people who drill in to rock, but not much more. No, people in the market try to make a rational assessment of other people’s irrationality so they can make an easy buck. So a rational holder of huge amounts of Australian currency will sell if he or she thinks the market value of the currency is about to fall, irrespective of its true value. So they act on other people’s fears and hunches.
Continue reading “1998_06_june_op-ed tax”

One Nation was cheated by the electoral system in Queensland. It should have got 22 seats, not 10. Indeed, there should have been a One Nation Premier heading a coalition of One Nation, National and Liberal members.

Democracy is more in the counting of the votes than the casting of them.

In a proportional system (with, say, a minimum 5 per cent cut-off to eliminate parties with very minor support), the result would have been very different. Instead of the present Labor 44, Coalition 35 and One Nation 10, it would have been Labor 38, Coalition 29 and One Nation 22. The Coalition would have been split Liberal 15, Nationals 14, so One Nation would have been the senior partner in a conservative government.

Incidentally, the Liberals have also been cheated. They got 15.9 per cent of the vote but only got 8 seats. The Nationals got less vote than the Liberals, at 14.7 per cent, but nearly three times the number of seats, at 23. The voting system has treated the Nationals extremely well. Their leader, Rob Borbidge, may be Premier on 14.7 per cent of the vote.

The British first-past-the-post system where voters put a tick beside only one candidate, which kept Margaret Thatcher in power with only 40 per cent support against a fractured left, would have produced a similar result for Labor against a fractured right in Queensland. The result would have been Labor 56, Coalition 23, One Nation 10 — a handsome Labor majority of 13.
Continue reading “1998_06_june_one nation vote”

Hemmed in by political, economic and constitutional constraints, Treasurer and Chief Minister, Kate Carnell, has made a fair fist of dealing with the ACT’s long-term fiscal difficulty without doing the slashing and burning predicted by some and urged by others.

Realistically, the ACT could not take any more slashing and burning of government spending right now. It has had pretty well all it can absorb. Across the board — business, consumers, wage earners and pensioners — were in no mood to absorb spending cuts or the flow-on from them. Nonetheless, the ACT can still with more efficient spending so that taxpayers get more for their money, and this Budget put in train methods to identify inefficiency more readily to set up the groundwork for later change, even if it did not bite the bullet now.

On the revenue side, there was little room for business, consumers, wage-earners or welfare recipients to absorb increases in taxes. Mrs Carnell’s extra revenue measures were therefore quite astute. Critics of heavy increases in parking and traffic fines may well say that the poor old motorist is slugged again, but these increases are easily avoidable: just do not break the law.
Continue reading “1998_06_june_leader24jun act budget”

It is never time for a politicians’ pay rise. The 17 Members of the ACT Legislative Assembly must be a tad embarrassed about the timing of the latest pay rise for them and for the top echelon of the ACT Public Service and statutory office-holders, particularly as the matter is virtually beyond their control. The Remuneration Tribunal recommendations are not subject to disallowance in the Assembly. To prevent the pay rise would require retrospective repeal of the legislation that put MLAs’ pay rises into the hands of an independent tribunal — though admittedly one of the 17, Green MLA Kerrie Tucker, has called for that approach.

The timing is bad because it comes a few days before the ACT Budget is to be brought down, in which, no doubt, the Government will be urging costs savings and efficiencies all round. Further, it comes at a time when the Health Minister, Independent Michael Moore, is negotiating an agreement with visiting medical officers which he hopes will result in pay cuts. In public perception it looks bad because he has already had a huge pay rise when he joined the Ministry, something quite extraordinary for an Independent and something those who voted for him might feel cheated about, the more so because if Mr Moore does not stand again, they may not get to exercise electoral disapproval. His family has also had an extra income boost with the employment of his wife in his ministerial office.

Those matters are undeniable and it makes the task of arguing in favour of the pay rises that much more difficult.

There is a case for pay rises, but it is not the one that the MLAs have argued before the tribunal. They have argued a parity argument. They say they deserve more because other state and territory parliamentarians get more. For a start ACT politicians do not have to leave home, unlike a large number of politicians elsewhere.
Continue reading “1998_06_june_leader20jun act pay”

It has taken an extraordinary amount time, money, energy and anxiety, but it at last appears that Australia is moving to efficiency on the waterfront. That can only be good news for Australian producers and consumers. But this has been one of the most disgraceful events in Australian industrial history. All parties — the union, Patrick’s stevedores, the Government, Workplace Relations Minister Peter Reith, the National Farmers Federation — have much to be ashamed of. None come out with their credibility unstained.

The acceptance of wholesale reform by the Maritime Workers Union is an admission that things were in an appalling state before the dispute arose. The acceptance is also an admission that that state of affairs was unsustainable in the face of local and international competition. The union has accepted that half the 1400 workforce at Patrick’s Stevedores will be made redundant, and presumably a similar agreement will be made at the other main stevedoring company, P and O. It is an admission of over-manning by 100 per cent. That was being made for by Australian producers and consumers directly. And worse, the extra costs caused by the inefficiency probably forced some business out of Australia.

The union also accepted radical changes to work practices and the permitting of contracting out. Once again it was an admission that the union had garnered monopoly power to itself to the cost of Australians in general.
Continue reading “1998_06_june_leader17jun waterfront”

The independent economics research firm Access Economics advised the Government last week to abandon any attempt to change the tax mix in its tax reform package. It recommends that a GST replace the variable rate wholesale sales tax with a few, if any exemptions, as possible. It does not recommend that a GST be high enough to fund income-tax breaks in a way that would shift the burden of tax away from income and on to consumption. Access argues that there is little economic merit in changing the tax mix and the argument over how to compensate people on low incomes who would get no benefit from income-tax cuts would be so difficult as to jeopardise any change. Moreover, it might result in an auction between the two parties as to who could offer the largest tax cuts, which might result in the erosion of fiscal discipline and the surplus.

There is certainly some truth in the latter argument. However, Access misses a key point in dealing with wholesale sales tax replacement. That it itself will affect people on low incomes, irrespective of whether the GST is high enough to fund income-tax cuts. This is because at present wholesale sales tax applies less to items that people on low incomes buy. For example, there is no wholesale sales tax on food and low rates on clothing. If these are taxed with a GST it will cast an unfair burden on low-income earners. The argument about compensation cannot be escaped by restricting a GST to merely replacing wholesale sales tax. And given that the compensation issue has to be addressed, the Government may as well change the tax mix, especially as PAYE people on middle incomes see the present system as unfair because of tax avoidance higher up the scale. To the extent they support a GST it is to ensure those people pay tax as they consume, seeing as they do not pay much tax as they earn.

If the Government abandons that element of the attack on avoidance, it may as well give up the GST altogether.

Queensland voters are clearly unhappy with the major parties and unhappy with government. Less than three years ago, they expressed their unhappiness with government by voting against the Goss Labor Government in sufficient numbers to make it vulnerable to just one by-election which it lost six months later. The Government changed to a conservative one. But after more than two years in office, the voters expressed dissatisfaction with it. At first, according to opinion polls, the dissatisfaction appeared to manifest itself in a resurgence of Labor, but as the campaign wore on, particularly in the last week, voters realised they did not have to revert to Labor. They could say, “”A plague on both your houses.” And that is precisely what they did by voting for Pauline Hanson’s One Nation Party in numbers not imagined just a week ago.

Last night more than 20 per cent of Queenslanders voted for One Nation, making it the largest of the conservative parties. If the voting system had been a direct proportional one, Queensland might have seen a One Nation Premier.

How is this phenomenon to be explained? What implications are there for a federal election? In some respects, there are similarities between the Queensland and federal situations. Long-serving Labor Governments had been thrown out largely by voters wanting to punish those governments rather than by voters welcoming the new government (like Menzies in 1949 or Whitlam in 1972). In both spheres the new conservative governments did not make much headway on the economic front. So might we expect similar disillusion in the federal sphere to have a similar aversion to returning to Labor and sound in a large One Nation vote? It may be there will be a reluctance to return to Labor so soon, but a large vote for One Nation federally is more problematic. A lot of the One Nation vote in Queensland came from rural and regional centres. Queensland is demographically different from the rest of Australia. It is much more decentralised.
Continue reading “1998_06_june_leader13jun qld election”

It may seem hypocritical of the United Nations Security Council to urge India and Pakistan to sign the Nuclear Non-Proliferation treaty as non-nuclear states when each of the five permanent members of the council are themselves nuclear powers. It might help if they at least made some attempt at nuclear disarmament. However, there is a critical difference between the position of the existing five nuclear states and India and Pakistan. The difference is that India and Pakistan have been to war against each other several times since 1947 and have a 40-year-old territorial dispute over Kashmir.

The other danger is that India and Pakistan are an example to other mid-range powers with long-running disputes with neighbours to go more openly nuclear — notably Israel and North Korea. The end of the cold war has by no means led to the end of the nuclear threat. Indeed, now it seems greater than in most of the cold war days because nations like Pakistan and India have only a few bombs making first strike more important. Destruction is not mutually assured.
Continue reading “1998_06_june_leader08jun ntests”