Other politics

The Albanese-Dutton debate – unlikely to change voting intentions

Just occasionally debates between those seeking the top job are consequential: think of the Biden-Trump debate last year. But Wednesday night’s debate between Albanese and Dutton is more likely to confirm voters’ views than to change them.

Albanese had the advantage of incumbency, which allowed him to come across as the person in control, able to give well-considered answers to David Speers’ questions. He was also buoyed by a set of opinion polls suggesting Labor could hold on to majority government and rating him well above Dutton as preferred prime minister.

Dutton had done himself harm by his too-rapid statement about Russians seeking an airbase in Indonesia. That gave Albanese the opportunity to present himself as the upholder of established diplomatic protocols, in contrast to Dutton’s use of megaphone diplomacy – a trait he inherited from Scott Morrison. It also confirmed that Dutton, like Trump, is too inclined to jump to quick and poorly considered assessments of situations – a trait some see in a positive sense as decisiveness, but which others see as impetuosity. In his constant portrayal of Albanese as “weak” Dutton is actually drawing attention to Albanese’s manner of cautious, carefully-informed mode of decision-making.

The other issue that got the media excited was Albanese’s reply to Speers’ question “When will we see our power bills come down?”.  It was a difficult question for Albanese, because it was sloppily worded and because a proper response is far more complicated than can be handled in a time-limited debate.

The question was sloppy because there is no point in asking policymakers about power bills: the amount of electricity, gas and gasoline people use, which is what determines the size of their bills, is a personal choice. Where governments have some control is in energy prices, and Albanese responded in terms of electricity prices, which will assuredly come down as the uptake of renewables and storage grows. He could have pointed out that since September 2003 electricity prices, even before rebates, have fallen, but he would also have known that the Australian Energy Regulator is likely to bring down a determination for 2025-26 raising electricity prices, because of the effect of higher interest rates on transmission costs, outweighing the benefits of the increased uptake in renewables.

That question was out of line with Speers’ otherwise unbiassed handling of the debate. Notably he did not put the same question to Dutton. It was a “gotcha” bait, aimed at only one of the contestants. Speers should have done better.

The ABC panel assessing the debate came down to the ABC’s usual “on-the-one-hand-on-the-other-hand” obsession with “balance”.  Laura Tingle has provided a sharper analysis and assessment than those panel members.

A panel of five Sydney Morning Herald/Age journalists gave their individual assessments in an article: Albanese or Dutton? Our experts deliver their leaders’ debate verdicts. Four of the five gave it to Albanese. Although we know who the five journalists are – Parnell Palme McGuinness, David Crowe, Jenna Price, James Massola and Jacqueline Maley – ­ we don’t know who made which assessments. One of them picked up the contrasting style of the two contenders:

Dutton exuded “pick me” energy, talking too fast and struggling to stand up for the science. His desire to be forceful combined with his staccato delivery made him stumble a bit. Albanese seemed more relaxed, more fluent.

What a truly awful campaign

Ross Gittins isn’t given to nostalgia, but for him this is one the worst elections he has seen, and he has seen many.

Over the years It has become easier and easier to predict what politicians will say – to a dwindling audience of people who care about politics. (Did Menzies have “talking points”?) Fear of fear campaigns is more intense, resulting in the Albanese government’s extreme risk aversion – a reaction to the Coalition’s fear campaigns in the 2019 election.

Gittins notices that he’s witnessing the professionalisation of politics. There was a time when a lawyer, a farmer, a carpenter, might decide to join a political party and seek to become a politician so as to affect some change to benefit the public purpose. But now, for many, politics is a career in itself, with a path through university politics, work for a politician, preselection for a tough seat, and eventual success in an easier seat.

The other aspect of professionalisation of politics is the way the two old parties have been influenced by a political model that sees people not as citizens, but as consumers in a market in which a duopoly (Coles-Woolworths, Labor-Coalition) is seeking to win them over with material offerings. (This model, known in schools of politics as public choice theory, is based on the economic model of competitive markets.)

Gittins hopefully sees salvation in our having the good sense not to elect a majority government.

The big issues we’ve kicked down the road

We must collect more public revenue

On his Policy Post Martyn Goddard has a paper – Does Albanese lead a reformist government? Or not? – supported with time-series detail of most areas of Commonwealth expenditure and revenue.

His short answer to that question about Albanese is: “He can leave taxes alone, or he can change Australia. Not both”.

He summarises his findings on the demand for public expenditure:

Together, the four biggest areas of government expenditure – welfare, health, education and defence – account for two-thirds of the budget. All four are in pressing need of reform and increased spending. Making any significant difference, particularly in welfare and health, would add many billions to each year’s budget.

This conclusion is supported with time series on trends, and comparison with other countries.

He then looks at the revenue side – or more particularly the trend of rising deficits and government debt if nothing is done to increase revenue. Contrary to the claims from fiscal hawks that we are in a grim fiscal position, the reality is that there is no need to panic, but we cannot continue on our established path of cutting taxes and increasing spending. That fiscal strategy has constrained the present government to a series of tiny, incremental reforms.

In raising revenue, however, we are hampered by a public belief that we are a high-tax country, and that income tax must be reduced.

It is correct that as a proportion of our taxes we are more reliant on income taxes than many other countries are, but that’s because we collect so little tax from all sources. As a proportion of GDP our income taxes are low.

Goddard puts a strong case for increasing income taxes, not necessarily by raising the rates of tax, but by reviewing and doing away with many economically unjustified concessions. That would not only raise more revenue, but also help address income inequality.

We must get serious about climate change

Frank Jotzo of ANU writes in The Conversation that Australia urgently needs to get serious about long-term climate policy – but there’s no sign of that in the election campaign.

He compares the policies of the Labor and Coalition parties. There’s no surprise in his assessment of the Coalition’s policies. He reminds us that its policies are based on burning a large amount of gas and keeping coal-fired plants running well past their announced closure dates until some day, if ever, those nuclear plants are built.

Labor’s policies are in the right direction, but it will be difficult for Australia to achieve its 2030 emissions reduction target of 43 percent unless there is a sharp change in pace. In fact emissions have flatlined at 28 percent below 2005 levels for the last 4 years.

He sees the need for action on almost all fronts. To quote:

He notes the possibility that if independents hold the balance of power in Parliament they may push Labor into being more ambitious.

One may believe it is strange that he feels it necessary to raise climate change as an issue when there are clear policy differences between Labor, the Coalition and the Greens.

But in spite of these differences – the outrageous economic idiocy of the Coalition’s nuclear proposal, and its contempt for climate change in its proposals on fuel excise and vehicle emissions ­– Labor seems to be almost apologetic about its own climate change policy, and is going easy on the Coalition.

Jotzo is right – climate change is not a significant issue in this election, but it should be. Independents and the Greens are taking it up, but there are noisy campaigns, funded by those with a vested interest in sustaining markets for fossil fuels.

We must sort out our hospital funding mess and provide a truly universal health care system

Both the main parties have strong policies on strengthening Medicare services for GP visits. Such emphasis makes political and economic sense – political sense because almost everyone has one or more GP consultations a year, and economic sense because early intervention through GP services can save a large amount of costly treatment down the line. But 45 percent of total expenditure on health, and 52 percent of government expenditure on health, is for hospitals. Over many decades, going right back to 1944, hospital funding has been a mess, with conflicts between state governments, federal governments, medical unions, and private insurance funds, subject to differing ideologies about the role of government in providing health care.

Fitting uneasily into these arrangements are private hospitals, funded from many different sources and with governance and working arrangements quite different from those applying in public hospitals.

In his Policy Post ­– Private hospitals: will they be there for you – or not? – Martyn Goddard explains that contrary to the usual talk, Australia does not live up to its claim to have “a universal healthcare system, one which treats you on the basis of need, not on your ability to pay”. Private hospitals, their funding supplemented by generous taxpayer-funded subsidies for private health insurance, have gone their own way, specializing in profitable standardized high-volume services, specifically elective surgery, while abandoning other services such as maternal care. That has been in response to a funding squeeze, as the cost of providing health care services has risen and as private health insurers, seeking to guard their high profits, have exerted strong pressure on private hospitals.

As a response Goddard suggests that the government should bring private hospitals into the same funding system as public hospitals, essentially breaking their dependence on private insurance, funded by an increase in taxation.

That is not a radical solution. It aligns with principles of competition policy, because private and public hospitals would be competing for the same pool of patients. The increase in taxation would be more than offset by people relieving themselves from paying private health insurance – a form of privatized tax that worsens intergenerational inequity. Goddard’s solution has long been favoured by independent health economists.

Goddard’s article conveys the suggestion that in the last few years there has been a large increase in people’s take-up of private health insurance. If this were the case, in time there might be enough extra funding to help private hospitals provide services, such as maternity, mental health and emergency, taking pressure off public hospitals. But the figures in Goddard’s chart on private hospital insurance cover are simply small movements among 12 million people with private insurance cover. The proportion of people with hospital cover has hovered around 45 percent all this century so far, ever since the Howard Government, attempting to destroy Medicare, re-introduced taxpayer-funded subsidies for private health insurers in 1999.

Labor in government, and in its last period in opposition, seems to have lost its zeal for restoring Medicare as a truly universal system. It’s afraid to raise taxes and it hopes that private hospitals and private insurers can muddle through with their present arrangements. Goddard’s analysis, however, shows that these arrangements, which never worked well in the first place, are becoming even more dysfunctional. Something has to give.

We must take productivity out of the too-hard basket

Aaron Wong of the e61 Institute and Lachlan Vass of ANU have a Conversation contribution: Productivity reform has been put in the too-hard basket for years. Here’s why leaders leave it alone. Neither of the main parties has a plan to kick-start productivity growth.

They have links to the many reports and research papers analysing Australia’s productivity decline and putting forward recommendations, but progress on productivity has been slow.

There are the established problems of dealing with change: there is usually some pain and sacrifice before benefits are achieved. The electoral cycle is too short for these gains to be realized. And there is the problem that the gains from improved productivity are not necessarily fairly distributed, thereby lessening the community’s appetite for reform. It’s much easier to use the passive-voice call for something to be done, than to say who should do it and how.

We must bring gambling back to policymakers’ attention

The Australia Institute finds that an overwhelming majority of Australians want the government to take a much stronger stance on gambling.

The two old parties, however, seem to be beholden to gambling and liquor interests.  The Australian Hotels Association and the licensed clubs have been generous in keeping Labor and the Coalition on their side – or more probably terrified about the scare campaign they would unleash if there is any prospect for reform.

In the Parliament we elect in two weeks’ time pressure for gambling reform is likely to be sustained by independents. Rebekha Sharkie has a bill requiring more exposure of gamblers’ losses ready for Parliament as soon as it is convened.

Understanding Trump

A reader has sent a link to an article on John Ganz’s Unpopular Front site The juggler: understanding Trump’s economic moves.

Making sense of Trump is a challenge, but one commonly-held explanation of his behaviour is that he is the quintessential real-estate deal maker. In most commercial relationships there is an ongoing relationship. If you buy a Toyota the dealer hopes to service your Toyota and sell you another Toyota in five years’ time. Firms have established relationships with their suppliers and subcontractors. That’s why these relationships are win-win. But the real-estate transaction is one-off. It’s win-lose.

That’s Trump’s zero-sum world: your loss is my gain.

Ganz adds another dimension. Trump cannot see the world as a system. He is not a system thinker. He does not understand the economy as a system of interrelationships with positive and negative feedback loops. Every deal stands alone, without any effects on other possible deals.

He is like the West Virginia voter who cannot understand that if his taxes are cut he might lose Medicaid, or the voters Dutton is trying to woo with his fistful of dollars in tax cuts who don’t realize they would have to pay more for their kids’ child care and education.

Ganz draws on an essay by Karl Marx The Eighteenth Brumaire of Louis-Napoleon (Napoleon III) to illustrate the similarities between Louis-Napoleon and Trump. Their authoritarian methods seem to be similar, but on outcomes there are many differences, because Napoleon III had a sense of the public purpose in a way that Trump and Dutton don’t.

Personalities or policies

On the ABC’s 730 program Sarah Ferguson interviewed Adam Bandt, mainly on housing policies. He calls the major parties’ proposals “a dumpster fire of bad ideas”.

It’s refreshing to hear someone who is straightforward about the damage done by John Howard’s policies on capital gains and negative gearing.

Ferguson tried hard to get Bandt to commit himself to a strategy in a “hung Parliament” (her term). Bandt responded with an assertion of the principles and policies – “a platform Whitlam would be proud of” – that would guide the Greens in a Parliament with a minority government.

At the end of the session she asked Bandt if he was worried that 25 percent of voters don’t know who he is, hinting that perhaps the Greens would be better placed with a different “leader”. He politely responded by referring back to the Greens’ policies.

Henderson’s question says a lot about Australian politics. We know more than we need to know about Albanese and Dutton, but it has been close to impossible to learn about their policies, particularly the Coalition’s policies. We may not know Bandt very well (my Microsoft spellchecker dictionary puts a red line under his name), but we should have a fairly good idea about how the Greens’ policies differ from the other parties. The media however, are still on their familiar ground commenting on a two-party contest.