Yesterday in the second part of the curse of imminent influence, I forecasted the end of the Federal Coalition and said WA Nationals Leader Brendon Grylls would be happy to lose in his run for the state seat of Pilbara next year's poll.
Predictably, I received a few “poo poo” emails overnight that argued with various levels of passion that the federal coalition will never be threatened and Mr Grylls was “totally committed to improving the lives of regional Western Australians.”
In response to the first point: the Federal Coalition has already been threatened - in 2010.
Admittedly, the Member for O’Connor’s one-man attempt to re-engineer the Nationals brand in 2010 failed, but he certainly made his intentions known. If Mr Crook had only a few others supporting him at the time, the remaining elected Nationals would have been faced with the difficult choice of joining the “Crook Nationals” in Government (as a partner to Labor) or holding on to the coalition in Opposition. I reckon we all know what would have happened in those circumstances.
With regard to the second comment, I agree - Mr Grylls is a passionate supporter of regional Western Australia. I just think he reckons he’s done all he can in State Parliament and wants to put his advocacy for the regions on a bigger stage. Don’t get me wrong, I think he would be very happy to win Pilbara and do another term in State Parliament. After all, if he did manage to pull that off, he’d be immortalised in the Nationals hall of fame and get to lead a bigger Parliamentary team with an even greater amount of power over their government partners (whoever that may be).
I laid out some arguments for that yesterday but I didn’t include Mr Grylls’ curious and early declaration that he doesn’t plan to live in the Pilbara electorate – even if he wins. Now, I’ve already credited him with being a fairly shrewd politician and even an average political mouth could have delivered a line like “I have a young family. If I win the seat of Pilbara, my wife and I will re-evaluate our living circumstances then.”
But he didn’t provide that easy answer.
Instead, he chose to give his competitors the opportunity to claim home-town knowledge and start their campaign with the corresponding home-town advantage. He is going to give his run a red-hot go, but his plan is to lose and then head off to Canberra as the new Member for Durack or my best guess, Pearce.
It won’t be O’Connor because Mr Grylls wants to increase the number of Nationals in Parliament and knows that an incumbent Member has the best chance of retaining a seat. The Nationals will put a candidate up in Forrest, but given Mr Grylls’ strongest connections are in the Wheatbelt and another high-profile person should be easy to find with the help of local State Ministers Redman and Waldron, Forrest is out too.
So other than city-based electorates, that leaves Durack and the much closer to Perth, very family friendly, Pearce.
Mr Grylls’ family currently lives in Merredin which is in the very southern part of the electorate of Durack - currently held by Liberal Barry Haase. Mr Haase is a colourful character who will, by then have been in Parliament for 14 years. Some voters think a change is as good as a holiday and given Mr Grylls will come with the promise of cash for infrastructure in Durack’s vast mining and pastoral areas, he should have a pretty good chance if he chooses to run in that electorate.
But Mr Grylls is a loving dad to two young children. A big electorate like Durack combined with the travel time to and from Canberra would be hard for him and his close-knit family. Interestingly, Mr Grylls recently bought a house in Northam, which is not only in the much smaller Liberal-held seat of Pearce, but also only 45 minutes drive from the commuter plane to and from Canberra. Northam itself is one of several areas Mr Grylls has declared a future "super-town" - and that means bucket-loads of Royalties for Regions money is set to pour in over the next few years (perfectly timed to make him a very popular man in the late 2013 federal election). Better still, the current MP for the electorate, Judi Moylan has already declared that she is not going to run again, so that adds the appeal of not having to campaign against a sitting member of the coalition.
Brendon Grylls was born in 1973. His stellar political career to date has already earned him the respect of many who came before him and a great number more of those waiting in the wings. He believes in his cause – and that is transparently more about advocacy for those in regional Australia than any particular tradition or ideology. He will turn 40 next year, a perfect point in a man's life to make a change in his career path, presumably in an upward direction.
Monday, April 16, 2012
Sunday, April 15, 2012
coii (Part 2 - the end of the coalition)
In Part 1, I introduced and justified my so-called curse of imminent influence (coii) – basically what human nature does to 90% of political parties when they try to make the jump from a small ‘balance of power’ party to one capable of holding a majority.
Click here to read all about the coii.
Part 2 is actually a bit of a warning to the party that, like the Greens, is at grave risk of the coii because I think they are planning to declare themselves the next, next “third force in Australian politics”. That Party is of course, the Nationals. And if I’m correct, what will happen immediately before the coii hits them will be the end of the formal federal coalition.
Sound a bit far-fetched? Let me justify my claim.
The Nationals’ Member for the Federal electorate of O’Connor Tony Crook, aggressively took the seat from long-term Liberal Wilson Tuckey at the 2010 election. As we all know, this election resulted in a messy hung parliament. During the first few weeks of that parliament, Mr Crook tried to use his self-declared “independence” from the federal National Party to help the Labor Party form Government – on the condition it created a national “Royalties for Regions” (RfR) scheme.
However, Prime Minister Gillard found the votes she needed in a few slightly more independent independents and the national RfR scheme hasn’t eventuated… yet.
Royalties for Regions was the brainchild of Mr Crook’s Western Australian colleagues, lead by current Minister for Regional Development Brendon Grylls. It isn't overstating it to say RfR has been an absolute political boon for the Nationals in WA.
In short, the policy quarantines big wads of cash (the equivalent of 25% of WA’s mining and onshore petroleum royalties - around $6b) for the Nationals to spend at their discretion on things in regional parts of the State. I say “things” because the criteria for spending is, well fairly flexible and “at their discretion” because this money really is not linked to the State budget at all. In fact, I recall being in a Chiefs of Staff meeting in 2011 during which Brendon Grylls’ representative reported that, “The Royalties for Regions budget process is going very well”. I’m not sure it was meant to antagonise, but it certainly highlighted the very uncomfortable fact that 3 Nationals Ministers were deciding how to spend 25% of the Government’s money totally independently of the mainstream State budget that our 14 non-Nationals Ministers were wrestling over at the time.
Notably, this situation only came about because the WA Nationals chose to not enter into a traditional coalition with the Liberals prior to the 2008 State election. When the result was a hung Parliament, the Nationals did something quite extraordinary - threatened to form a government with the Labor Party. During a week of tense negotiations, the bold young Nationals Leader Brendon Grylls stood his ground, declaring that his Party would only form a government with a major Party if it would honour the terms of the Nationals’ pre-election RfR policy. There was some attempted horse-trading but in the end, Liberal Leader Colin Barnett extended his right hand and became the Premier of Western Australia – governed by an unorthodox Liberal-National “partnership” (not coalition).
Since then, Mr Grylls and his team have travelled around regional Western Australia throwing cash at projects that the government as a whole simply can’t afford – ironically because of the drain RfR is to the State’s wider budget. Virtually everything that gets built in a Western Australian country town now carries the “Royalties for Regions” logo and the Nationals have once again become the undisputed champions (and heroes) of the bush.
RfR has probably been good for country-based Western Australians, but it’s also been the best campaign fund the Nationals could have ever hoped for. And that is precisely why Queensland’s new Premier Campbell Newman has adopted the policy for new government – and why it will be part of a federal National’s policy platform in either 2013 or at the latest, three years after.
But for the Nationals to have enough weight in Canberra to force a majority Party to hand over what would be an absolutely enormous slush fund, they will have to have more than just Tony Crook’s vote to offer the Labor Party, or perhaps the Liberals as a “partnership, not coalition”.
Re-enter, Brendon Grylls and his youthful bullishness.
In the next WA State poll due in March next year, Mr Grylls will vacate his safe Nationals wheatbelt seat and stand for the currently safe Labor seat of Pilbara, in the heat of WA’s booming mining sector. By all accounts, he’s not likely to win it.
But as we’ve seen, Brendon Grylls isn’t as silly as he is courageous. He is fully aware of the potential to lose his seat in State Parliament and my hypothesis is that he actually wouldn’t mind if he did.
A few things lead me to that theory.
But I suggest Brendon Grylls is willing to lose in such circumstances is because he is planning to use his new high-profile martyr status to embark on something even more ambitious - become the lead advocate for a national RfR scheme and become a candidate for a Federal House of Reps seat at the soon-to-follow federal election.
If successful in that quest, he will be joined in Canberra on the big green comfy chairs by another ambitious and high-profile RfR supporter and friend, Barnaby Joyce - who is himself, planning to move to the lower house where he can use his vote to directly influence government spending.
Assuming Tony Crook can get re-elected in O’Connor and Premier Campbell Newman does some good politics with the Queensland RfR scheme, there will be at least three Nationals in the next House of Reps bold enough to cross the floor to squeeze a Royalties for Regions commitment from Prime Minister Abbott – or perhaps even Prime Minister Julia Gillard and her new Labor-National government…
Either way, the word “coalition” will be replaced by “partnership” before the 2016 election – mark my words.
The growth of the Nationals’ influence as a result of the Royalties for Regions scheme in WA and Qld will provide the adrenalin required for a whole new bunch of ambitious Nationals to stand, win and declare that they too will soon become the next, next third force in Australian politics - starting with Messer’s Grylls, Crook and Joyce.
My only advice to the “new Nationals” - beware of the coii!!
PS. There’s another piece of this puzzle that I didn’t get to include in the main body of my post. The Nationals’ recently appointed a new Federal Director – a politically astute guy who was integral to the successful implementation and operation of the WA Royalties for Regions scheme and takes with him all the knowledge and support required to replicate RfR in every state (and even federally)….
Click here to read all about the coii.
Part 2 is actually a bit of a warning to the party that, like the Greens, is at grave risk of the coii because I think they are planning to declare themselves the next, next “third force in Australian politics”. That Party is of course, the Nationals. And if I’m correct, what will happen immediately before the coii hits them will be the end of the formal federal coalition.
Sound a bit far-fetched? Let me justify my claim.
The Nationals’ Member for the Federal electorate of O’Connor Tony Crook, aggressively took the seat from long-term Liberal Wilson Tuckey at the 2010 election. As we all know, this election resulted in a messy hung parliament. During the first few weeks of that parliament, Mr Crook tried to use his self-declared “independence” from the federal National Party to help the Labor Party form Government – on the condition it created a national “Royalties for Regions” (RfR) scheme.
However, Prime Minister Gillard found the votes she needed in a few slightly more independent independents and the national RfR scheme hasn’t eventuated… yet.
Royalties for Regions was the brainchild of Mr Crook’s Western Australian colleagues, lead by current Minister for Regional Development Brendon Grylls. It isn't overstating it to say RfR has been an absolute political boon for the Nationals in WA.
In short, the policy quarantines big wads of cash (the equivalent of 25% of WA’s mining and onshore petroleum royalties - around $6b) for the Nationals to spend at their discretion on things in regional parts of the State. I say “things” because the criteria for spending is, well fairly flexible and “at their discretion” because this money really is not linked to the State budget at all. In fact, I recall being in a Chiefs of Staff meeting in 2011 during which Brendon Grylls’ representative reported that, “The Royalties for Regions budget process is going very well”. I’m not sure it was meant to antagonise, but it certainly highlighted the very uncomfortable fact that 3 Nationals Ministers were deciding how to spend 25% of the Government’s money totally independently of the mainstream State budget that our 14 non-Nationals Ministers were wrestling over at the time.
Notably, this situation only came about because the WA Nationals chose to not enter into a traditional coalition with the Liberals prior to the 2008 State election. When the result was a hung Parliament, the Nationals did something quite extraordinary - threatened to form a government with the Labor Party. During a week of tense negotiations, the bold young Nationals Leader Brendon Grylls stood his ground, declaring that his Party would only form a government with a major Party if it would honour the terms of the Nationals’ pre-election RfR policy. There was some attempted horse-trading but in the end, Liberal Leader Colin Barnett extended his right hand and became the Premier of Western Australia – governed by an unorthodox Liberal-National “partnership” (not coalition).
Since then, Mr Grylls and his team have travelled around regional Western Australia throwing cash at projects that the government as a whole simply can’t afford – ironically because of the drain RfR is to the State’s wider budget. Virtually everything that gets built in a Western Australian country town now carries the “Royalties for Regions” logo and the Nationals have once again become the undisputed champions (and heroes) of the bush.
RfR has probably been good for country-based Western Australians, but it’s also been the best campaign fund the Nationals could have ever hoped for. And that is precisely why Queensland’s new Premier Campbell Newman has adopted the policy for new government – and why it will be part of a federal National’s policy platform in either 2013 or at the latest, three years after.
But for the Nationals to have enough weight in Canberra to force a majority Party to hand over what would be an absolutely enormous slush fund, they will have to have more than just Tony Crook’s vote to offer the Labor Party, or perhaps the Liberals as a “partnership, not coalition”.
Re-enter, Brendon Grylls and his youthful bullishness.
In the next WA State poll due in March next year, Mr Grylls will vacate his safe Nationals wheatbelt seat and stand for the currently safe Labor seat of Pilbara, in the heat of WA’s booming mining sector. By all accounts, he’s not likely to win it.
But as we’ve seen, Brendon Grylls isn’t as silly as he is courageous. He is fully aware of the potential to lose his seat in State Parliament and my hypothesis is that he actually wouldn’t mind if he did.
A few things lead me to that theory.
- Mr Grylls is the Leader of his Party. There’s no higher position unless the Nat’s form a coalition with the Libs and he became Deputy Premier of WA – but that has already been ruled out, and Mr Grylls likes the freedom he gets by not sharing a Party room.
- He is already a hero within the National party, personally credited with reviving it from near-death. The ballsy gamble Mr Grylls took in holding out until he secured a promise from Colin Barnett to implement RfR has been a huge political coup and now seen as the way forward for the National Party all around the country.
- He’s young, but already been in State Parliament for 11 years. It must be pretty boring to sit on comfy blue chairs all day listening to others waffling on about things that simply fail to hold the attention of a successful and ambitious gen-xer like Mr Grylls.
But I suggest Brendon Grylls is willing to lose in such circumstances is because he is planning to use his new high-profile martyr status to embark on something even more ambitious - become the lead advocate for a national RfR scheme and become a candidate for a Federal House of Reps seat at the soon-to-follow federal election.
If successful in that quest, he will be joined in Canberra on the big green comfy chairs by another ambitious and high-profile RfR supporter and friend, Barnaby Joyce - who is himself, planning to move to the lower house where he can use his vote to directly influence government spending.
Assuming Tony Crook can get re-elected in O’Connor and Premier Campbell Newman does some good politics with the Queensland RfR scheme, there will be at least three Nationals in the next House of Reps bold enough to cross the floor to squeeze a Royalties for Regions commitment from Prime Minister Abbott – or perhaps even Prime Minister Julia Gillard and her new Labor-National government…
Either way, the word “coalition” will be replaced by “partnership” before the 2016 election – mark my words.
The growth of the Nationals’ influence as a result of the Royalties for Regions scheme in WA and Qld will provide the adrenalin required for a whole new bunch of ambitious Nationals to stand, win and declare that they too will soon become the next, next third force in Australian politics - starting with Messer’s Grylls, Crook and Joyce.
My only advice to the “new Nationals” - beware of the coii!!
PS. There’s another piece of this puzzle that I didn’t get to include in the main body of my post. The Nationals’ recently appointed a new Federal Director – a politically astute guy who was integral to the successful implementation and operation of the WA Royalties for Regions scheme and takes with him all the knowledge and support required to replicate RfR in every state (and even federally)….
Friday, April 13, 2012
The curse of imminent influence (Part 1 - Greens)
Well, in yesterday’s Cost reflective, defective? post I said being green was probably easier than being blue… hmm… Soon-to-be former Senator Bob Brown might disagree with me right now.
But if it’s any consolation to Bob and his fans, I don’t think it has much to do with him - or even his interesting theory about why we don’t have any intergalactic friends.
I believe the problem is what I’m hereby coining as the curse of imminent influence (coii).
Now, just for the record I don’t believe in curses and just to prove it, I even took a photo of Marie Laveau's tomb in New Orleans and didn’t suffer any bad luck. Oh… hang on… was that before I lost my job, had a massive water leak at home and broke my tooth?
Anyway, as I was saying I’m pretty sure I don’t believe in curses and only chose that word because it sounds more exciting than “the self-destruction that groups of humans tend to undertake when they get a little taste for power and have a bit of extra time on their hands.”
The first one sounds better right? OK, we’re settled. The curse of imminent influence it is!
So just to back up my little theory, let’s think about the Australian Democrats. Remember them? They started off as the little group who were going to “keep the bastards honest”. It turns out they were very good at doing exactly that and became quite popular - eventually growing to the point of holding the balance of power in the Federal Parliament.
In retrospect, what happened next was sadly the almost inevitable result of one of the most frustrating flaws of human nature – ambition beyond our competency.
If you don’t believe me, watch any 12 month old baby next time you have the chance. Their internal narrative goes something like this:
How about “One Nation”? Had some luck in Queensland, decided that they could be the new third force in Australian politics… oh oh [plonk!]
Bob Katter’s power in the hung Federal Parliament made him think he could get a big Party going in last month’s Queensland elections… [plonk-er!]
Enough proof? Darn that human nature!
But the Greens are different, right? They won’t fall victim to the curse of imminent influence and plonk in the same way, surely?
Dom Dom! Did you hear what Christine Milne, the new Leader of the Greens, said this morning after Gillarding poor old Bob?
But if it’s any consolation to Bob and his fans, I don’t think it has much to do with him - or even his interesting theory about why we don’t have any intergalactic friends.
I believe the problem is what I’m hereby coining as the curse of imminent influence (coii).
Now, just for the record I don’t believe in curses and just to prove it, I even took a photo of Marie Laveau's tomb in New Orleans and didn’t suffer any bad luck. Oh… hang on… was that before I lost my job, had a massive water leak at home and broke my tooth?
Anyway, as I was saying I’m pretty sure I don’t believe in curses and only chose that word because it sounds more exciting than “the self-destruction that groups of humans tend to undertake when they get a little taste for power and have a bit of extra time on their hands.”
The first one sounds better right? OK, we’re settled. The curse of imminent influence it is!
So just to back up my little theory, let’s think about the Australian Democrats. Remember them? They started off as the little group who were going to “keep the bastards honest”. It turns out they were very good at doing exactly that and became quite popular - eventually growing to the point of holding the balance of power in the Federal Parliament.
In retrospect, what happened next was sadly the almost inevitable result of one of the most frustrating flaws of human nature – ambition beyond our competency.
If you don’t believe me, watch any 12 month old baby next time you have the chance. Their internal narrative goes something like this:
“OK, I’ve been grovelling around on the floor long enough watching these big people walk around me. If they can do it, so can I. In fact, I reckon I’m smart enough to even run!’ [plonk!]To summarise the Democrats’ internal narrative at the time:
“We’ve been a tiny minority for ages watching the big parties walk around us. If they can do it, so can we. Let’s declare that we are going to be the third force in Australian politics!” [plonk!]
How about “One Nation”? Had some luck in Queensland, decided that they could be the new third force in Australian politics… oh oh [plonk!]
Bob Katter’s power in the hung Federal Parliament made him think he could get a big Party going in last month’s Queensland elections… [plonk-er!]
Enough proof? Darn that human nature!
But the Greens are different, right? They won’t fall victim to the curse of imminent influence and plonk in the same way, surely?
Dom Dom! Did you hear what Christine Milne, the new Leader of the Greens, said this morning after Gillarding poor old Bob?
“My role is to advance the Greens, to give the community a very clear signal about where the Greens want to take this country… Under Bob's wise leadership, the Greens have grown into the undisputed third force in Australian politics…”Oh oh… I feel another coii coming on…
Thursday, April 12, 2012
Cost reflective, defective?
We keep hearing it: “cost of living increases will be the downfall of the current State Government.”
This really isn't news - the Opposition and numerous media outlets in Western Australia have been suggesting it for sometime. Indeed, the Premier himself even agreed with the premise this morning when he spoke with Geoff Hutchinson on 720 ABC Perth radio.
But if this proposition has merit and everyone including the Premier knows it, why doesn’t the government just stop increasing the price of water and energy?
The solution isn’t quite that easy - unless we had a Labor government that is.
In fact, one of the truths in Premier Barnett’s explanation of why his government has savagely raised water and electricity tariffs over the past 3 years is because the previous government did what only a Labor Government can - subsidised utility charges.
As a former Chief of Staff to both a Water and an Energy Minister in this government, I’m only too aware that this is a genuine problem for Mr Barnett and his (small L) liberal colleagues. The previous Labor government’s decision to repeatedly freeze tariffs and let the gap between the true cost of supplying our utilities and what we all pay for them increase was political genius. Regardless of whether it was done strategically or not, this move was destined to become a mighty large thorn in the side of any conservative government that followed them – and it has.
The key to this quandary is that any Labor government is acting well within the realm of its core ideology to take money from one part of the budget and use it to subsidise utility charges - or education, health, police - whatever. That's exactly what die-hard Labor voters want their governments to do.
In contrast, a pure liberalist view is that each element of the budget should be cost neutral. In a perfect liberal world, school fees would fund teacher's salaries, police would carry a mobile eftpos machine to charge anyone they help, people would pay the full cost of any health services they might use and yep, you guessed it – we would all pay the true cost of every drop of water and watt of power we use. In short, blue-blooded liberals believe in a “user-pays” system.
But the problem is that neither theory works in its pure form. To the average voter, too much government cross-subsidisation smells a bit too much like communism and on the other extreme, the public would simply refuse to pay $25 for a bus ticket to work just to ensure the public transport service breaks even.
So over time, both sides of the political divide have compromised their core values a little in order to appeal to the increasing number of voters who sit somewhere in the middle of each school of thought. For example, successive Liberal governments in WA have ruled out introducing toll roads (which should theoretically be OK with their supporters) and Labor governments have implemented various user-pays policies (that normally wouldn't be supported by its supporters).
So given that the voting public seems fairly comfortable with this fuzzy grey blob between the red and blue edges, why does the Barnett government keep telling us that we should all pay a true cost for our utilities?
Hmmm… to start with, our Economist-turned-Premier and his very (small L) liberal Treasurer Troy Buswell started their term with very big plans. The then Treasurer was eager to prove his economic credentials by lowering taxes and duties and our statesman-like new Premier had grand visions of an infrastructure boom under his watch. They knew that to achieve these goals, they would have to keep recurrent costs low and reduce any unnecessary drains on the government's coffers. It’s also only fair to recognise that they also knew they had to deliver a truck-load a of cash to their new "partners" every year in the guise of the Nationals’ Royalties for Regions scheme.
So when Mr Barnett and Buswell sat around the big table with treasury geeks and started to frame their first budget, they were somewhat shocked to learn that the former government had made the conscious decision to spend hundreds of millions of dollars keeping the prices of water and energy low.
Immediately, the little L liberal in both men came to the fore. The Premier and Treasurer agreed that not only were these subsidies contrary to core liberal philosophy, they were also tying up wads of cash the new government could use to help deliver the big ticket items they had been dreaming about.
As the first budget got closer, the Premier and Treasurer finally took the brave decision to boldly set an agenda of eventually removing all subsidies from utility tariffs – and agreed to big jumps in prices across the board.
So, like any budget decision - positive or negative - a couple of media people bounced it around and soon after, devised the amazing, brilliant, happy, happy "cost reflectivity" plan. As time went by and the budget day media was finalized, this spin was refined to include lines about the need to get tariffs up to cost reflectivity in order to attract more competition, which in turn would put downward pressure on prices (go figure).
Now, I've had a bit of fun with that but in all seriousness I don't think the first decision (or even the resulting spin) was much of a mistake for the current government. Tariffs hadn't increased for a number of years and the government did have some big plans for the extra cash. In any case, the bill shock was only 6 months into a 4 and a half year term and if the government had slowed its increases from then on, I suggest we wouldn't be talking "cost of living issues" now.
But unfortunately old habits die hard.
As we know, every year since, the government has implemented more increases and then reinforced the same old explanation: cost reflectivity is vitally important in order to increase competition - which will eventually reduce costs. The decision to continue to ‘sell’ cost reflectivity as a holy grail has left the government in a very ugly position with only one budget and 11 months before the next election.
An Economic Regulation Authority (ERA) report released only last week confirmed that residential electricity tariffs are still 23% away from being cost reflective. In spite of this, the Premier said on radio this morning, “the big hits in electricity prices are behind us” and went on to reassure the public that there would only be a “modest increase” in this year’s budget.
Old habits do indeed die hard.
This is an ugly problem for the government and creates two very uncomfortable questions that the Premier will no doubt have to try to answer sooner or later:
They say it isn’t easy being green, but I reckon the next 11 months will prove it’s probably tougher being blue.
This really isn't news - the Opposition and numerous media outlets in Western Australia have been suggesting it for sometime. Indeed, the Premier himself even agreed with the premise this morning when he spoke with Geoff Hutchinson on 720 ABC Perth radio.
But if this proposition has merit and everyone including the Premier knows it, why doesn’t the government just stop increasing the price of water and energy?
The solution isn’t quite that easy - unless we had a Labor government that is.
In fact, one of the truths in Premier Barnett’s explanation of why his government has savagely raised water and electricity tariffs over the past 3 years is because the previous government did what only a Labor Government can - subsidised utility charges.
As a former Chief of Staff to both a Water and an Energy Minister in this government, I’m only too aware that this is a genuine problem for Mr Barnett and his (small L) liberal colleagues. The previous Labor government’s decision to repeatedly freeze tariffs and let the gap between the true cost of supplying our utilities and what we all pay for them increase was political genius. Regardless of whether it was done strategically or not, this move was destined to become a mighty large thorn in the side of any conservative government that followed them – and it has.
The key to this quandary is that any Labor government is acting well within the realm of its core ideology to take money from one part of the budget and use it to subsidise utility charges - or education, health, police - whatever. That's exactly what die-hard Labor voters want their governments to do.
In contrast, a pure liberalist view is that each element of the budget should be cost neutral. In a perfect liberal world, school fees would fund teacher's salaries, police would carry a mobile eftpos machine to charge anyone they help, people would pay the full cost of any health services they might use and yep, you guessed it – we would all pay the true cost of every drop of water and watt of power we use. In short, blue-blooded liberals believe in a “user-pays” system.
But the problem is that neither theory works in its pure form. To the average voter, too much government cross-subsidisation smells a bit too much like communism and on the other extreme, the public would simply refuse to pay $25 for a bus ticket to work just to ensure the public transport service breaks even.
So over time, both sides of the political divide have compromised their core values a little in order to appeal to the increasing number of voters who sit somewhere in the middle of each school of thought. For example, successive Liberal governments in WA have ruled out introducing toll roads (which should theoretically be OK with their supporters) and Labor governments have implemented various user-pays policies (that normally wouldn't be supported by its supporters).
So given that the voting public seems fairly comfortable with this fuzzy grey blob between the red and blue edges, why does the Barnett government keep telling us that we should all pay a true cost for our utilities?
Hmmm… to start with, our Economist-turned-Premier and his very (small L) liberal Treasurer Troy Buswell started their term with very big plans. The then Treasurer was eager to prove his economic credentials by lowering taxes and duties and our statesman-like new Premier had grand visions of an infrastructure boom under his watch. They knew that to achieve these goals, they would have to keep recurrent costs low and reduce any unnecessary drains on the government's coffers. It’s also only fair to recognise that they also knew they had to deliver a truck-load a of cash to their new "partners" every year in the guise of the Nationals’ Royalties for Regions scheme.
So when Mr Barnett and Buswell sat around the big table with treasury geeks and started to frame their first budget, they were somewhat shocked to learn that the former government had made the conscious decision to spend hundreds of millions of dollars keeping the prices of water and energy low.
Immediately, the little L liberal in both men came to the fore. The Premier and Treasurer agreed that not only were these subsidies contrary to core liberal philosophy, they were also tying up wads of cash the new government could use to help deliver the big ticket items they had been dreaming about.
As the first budget got closer, the Premier and Treasurer finally took the brave decision to boldly set an agenda of eventually removing all subsidies from utility tariffs – and agreed to big jumps in prices across the board.
So, like any budget decision - positive or negative - a couple of media people bounced it around and soon after, devised the amazing, brilliant, happy, happy "cost reflectivity" plan. As time went by and the budget day media was finalized, this spin was refined to include lines about the need to get tariffs up to cost reflectivity in order to attract more competition, which in turn would put downward pressure on prices (go figure).
Now, I've had a bit of fun with that but in all seriousness I don't think the first decision (or even the resulting spin) was much of a mistake for the current government. Tariffs hadn't increased for a number of years and the government did have some big plans for the extra cash. In any case, the bill shock was only 6 months into a 4 and a half year term and if the government had slowed its increases from then on, I suggest we wouldn't be talking "cost of living issues" now.
But unfortunately old habits die hard.
As we know, every year since, the government has implemented more increases and then reinforced the same old explanation: cost reflectivity is vitally important in order to increase competition - which will eventually reduce costs. The decision to continue to ‘sell’ cost reflectivity as a holy grail has left the government in a very ugly position with only one budget and 11 months before the next election.
An Economic Regulation Authority (ERA) report released only last week confirmed that residential electricity tariffs are still 23% away from being cost reflective. In spite of this, the Premier said on radio this morning, “the big hits in electricity prices are behind us” and went on to reassure the public that there would only be a “modest increase” in this year’s budget.
Old habits do indeed die hard.
This is an ugly problem for the government and creates two very uncomfortable questions that the Premier will no doubt have to try to answer sooner or later:
- If the tariffs are raised by only a nominal amount this year, doesn’t that mean we are no longer closing the gap to cost reflectivity - and with further increases in the cost of fuel and labour expected over the 12 months following this year’s budget, isn’t it possible that a small increase could even take us further away from cost reflective prices?
- If cost reflectivity is no longer a priority and the government has decided that cross-subsidies are now ok, why do we need to have any price rise at all? In fact, couldn’t we cut tariffs a bit?
They say it isn’t easy being green, but I reckon the next 11 months will prove it’s probably tougher being blue.
Tuesday, April 10, 2012
McGowan’s ‘New Labor’ kicking goals (and heads)
As a key mentor to Mark McGowan and friend of former British UK PM Tony Blair, ex-Premier Geoff Gallop would undoubtedly be proud of the ‘New Labor’ that is the current Western Australian Opposition.
I know it’s a cliché but a lot can happen in a short period of politics and in Western Australia, indeed it has. In fact, I would go as far as proclaiming the last few weeks a watershed period for the future of the Barnett Government.
During that time the New Labor Opposition proved that its decision to replace their nice guy Leader Eric Ripper with the much more politically ambitious Mark McGowan will serve them well in the lead up to next year’s election. Today’s Newspoll results show Mr McGowan has secured a massive 12 point increase in the “preferred Premier” stakes.
But even worse for Premier Barnett, for the first time since the ALP’s messy and demoralising 2008 defeat, the Opposition has inflicted a 16 point drop in Colin Barnett’s preferred Premier status through the use of genuine political strategy, planning and teamwork.
Having worked in the Office of two Leaders of the Opposition, I know it’s not easy to achieve what Mr McGowan has done since he took the job a couple of months ago.
Indeed in politics, the Opposition is a tough animal for anyone to tame. The Leader has a relatively small staff of only 10 or so, hardly any access to non-public information, no warning of upcoming government announcements and he is typically criticised for not wanting to release details of opposition policy this far out from an election. And all that happens while he tries to keep a handle on a bunch of ambitious backbenchers who are all running their own races at top speed – often in very different directions.
Needless to say with all these challenges facing opposition parties, ‘strategy’ and ‘teamwork’ are words that rarely get used to describe a fortnight of their work. However in this case, those words are most appropriate.
During the last month the Labor Opposition actively targeted disaffected conservative voters by announcing a myriad of right-of-centre policies. Mr McGowan pledged to implement harsher penalties for knife crimes, abolish the Potato Marketing Corporation and promised to streamline planning and housing approvals if they are elected in March. Some commentators dismissed these announcements as merely ‘stunts’, but by making these statements Mr McGowan has committed to substantive policy changes designed to strategically broaden his Party’s voter-base – and encroach on the Liberal-National Government’s core constituency.
And while he was busy aggressively stretching the New Labor net to the right, he didn’t forget his more traditional friends on the left.
McGowan’s team continued its union-supported strong anti-privatisation campaign and in doing so, successfully smeared the brand of the Water Corporation, New Children’s Hospital and Department of Housing. He also stoked a fire under the traditionally left-leaning social services sector by casting doubt over the Government’s critical Mental Health agenda and reminded the Arts sector they were still close by slamming the Royalties for Regions process for not funding a proposal for the Goldfields Arts Centre.
But the Opposition didn’t stop there – proving they are willing to fight the forthcoming election campaign on all fronts, Mark McGowan’s New Labor even threw some bait to those backing their current Parliamentary partners. Green voters might have noticed the Labor Party starting debates on the likely demise of Carnaby's Black Cockatoos under the Government’s plan to extend the Roe Highway and the definition of free-range eggs, as well as promising to ban clear felling of native forests and plastic bags in the future.
However, it wasn’t only the content of the announcements that should be seen as sign of things to come. New Labor also touted its wares in a new way - to a new constituency that is very foreign to this Government and its slow-moving elders.
While Minister Buswell was taunting the Opposition in Parliament for their 'Stop Perth's Sardine Trains' social media campaign, MPs sitting on the comfy couches opposite were busily squirreling away on their mobile phones and ipads strategically Tweeting and Facebooking their way into the hearts and minds of a new generation of voters. The problem for the Government is that apart from one guy who spends a lot of time Facebooking about his cat, no Government Minister is engaging with these very mobile voters – many of whom already resent being told by a fuddy-duddy old Premier they should buy smaller houses and consider air-conditioning a luxury.
As proven by the incredible global response to the Kony 2012 campaign, these voters are not only mobile, they can become spontaneous and potent activists with one click of the “Like” button on a Facebook page or “RT” of a controversial Tweet. As I disclosed in Cantankerous Col Pot and his nervous nannies, the Premier has only owned a mobile phone since he became Premier and sent his first email just a year before that. The Luddite-like mentality of the Premier and his leadership team is in stark contrast to that of New Labor who have entered the void of social media electioneering with vigour.
Innovative policy and engagement methods aside, perhaps the biggest game-changing success McGowan’s New Labor appears to be closing in on is that of retribution. And if they land what they have hooked, Labor’s fishing expedition will cause serious damage to the Government and Colin Barnett’s leadership.
Mr McGowan and his team of tech-savvy tweeters have done something truly amazing – found a way to make Minister John Day look grubby.
This is indeed a miraculous feat because everyone agrees that Minister Day is one of the nicest, most ethical people in Australian politics. For anyone who has ever met Minister Day, it’s obvious that his failure to declare a potential conflict of interest regarding a planning decision near a property he owns was nothing more than an honest stuff-up.
Because of that, the Opposition’s attacks in Parliament have been fruitless, being all but shrugged off by the Minister and his boss. However, during question time on the last sitting day of the last sitting of Parliament, the Premier opened up some wiggle room and put this on the record:
Once again, the problem isn’t Minister Day. No one thinks he has done anything wrong, other than accidentally create a situation that doesn’t look great.
And that is the problem for the Premier.
As a grumpy backbencher planning his retirement while Alan Carpenter presided over the last Government, Colin Barnett watched the Labor Party brand get decimated by claim after claim of Ministerial corruption and mismanagement. The rest is history and Mr Barnett was thrust into Government with the unenviable task of having to reassure Western Australian tax-payers that he would have a zero tolerance to anything that even remotely smelled dodgy. He sacked Treasurer Troy Buswell for actions that were eventually proven to be above-board and he sacked one of his senior media advisers for doing something the Public Sector Commissioner recently said shouldn’t have led to a dismissal.
Deep down, the Premier knows that Minister Day’s actions look just as bad, if not worse, than those that led to a number of others being demoted or sacked. John Day is a good Minister and will be a sad loss to the State if he loses his position but given the Premier’s predicament in the precedents he has set, his choice of words in Parliament last Thursday were truly prophetic. The Premier has form in using language like this to back away when he sees the writing on the wall and I’m certain I wasn’t the only one to notice his change in terminology. New Labor must be very excited to smell the same odour that plagued them in their final years of Government.
I’m no fan of Mark McGowan. But even as a biased political commentator, it’s clear from his first couple of months in the job that the Labor Party has made the right decision and the Barnett Government has a difficult 11 months ahead of them.
I know it’s a cliché but a lot can happen in a short period of politics and in Western Australia, indeed it has. In fact, I would go as far as proclaiming the last few weeks a watershed period for the future of the Barnett Government.
During that time the New Labor Opposition proved that its decision to replace their nice guy Leader Eric Ripper with the much more politically ambitious Mark McGowan will serve them well in the lead up to next year’s election. Today’s Newspoll results show Mr McGowan has secured a massive 12 point increase in the “preferred Premier” stakes.
But even worse for Premier Barnett, for the first time since the ALP’s messy and demoralising 2008 defeat, the Opposition has inflicted a 16 point drop in Colin Barnett’s preferred Premier status through the use of genuine political strategy, planning and teamwork.
Having worked in the Office of two Leaders of the Opposition, I know it’s not easy to achieve what Mr McGowan has done since he took the job a couple of months ago.
Indeed in politics, the Opposition is a tough animal for anyone to tame. The Leader has a relatively small staff of only 10 or so, hardly any access to non-public information, no warning of upcoming government announcements and he is typically criticised for not wanting to release details of opposition policy this far out from an election. And all that happens while he tries to keep a handle on a bunch of ambitious backbenchers who are all running their own races at top speed – often in very different directions.
Needless to say with all these challenges facing opposition parties, ‘strategy’ and ‘teamwork’ are words that rarely get used to describe a fortnight of their work. However in this case, those words are most appropriate.
During the last month the Labor Opposition actively targeted disaffected conservative voters by announcing a myriad of right-of-centre policies. Mr McGowan pledged to implement harsher penalties for knife crimes, abolish the Potato Marketing Corporation and promised to streamline planning and housing approvals if they are elected in March. Some commentators dismissed these announcements as merely ‘stunts’, but by making these statements Mr McGowan has committed to substantive policy changes designed to strategically broaden his Party’s voter-base – and encroach on the Liberal-National Government’s core constituency.
And while he was busy aggressively stretching the New Labor net to the right, he didn’t forget his more traditional friends on the left.
McGowan’s team continued its union-supported strong anti-privatisation campaign and in doing so, successfully smeared the brand of the Water Corporation, New Children’s Hospital and Department of Housing. He also stoked a fire under the traditionally left-leaning social services sector by casting doubt over the Government’s critical Mental Health agenda and reminded the Arts sector they were still close by slamming the Royalties for Regions process for not funding a proposal for the Goldfields Arts Centre.
But the Opposition didn’t stop there – proving they are willing to fight the forthcoming election campaign on all fronts, Mark McGowan’s New Labor even threw some bait to those backing their current Parliamentary partners. Green voters might have noticed the Labor Party starting debates on the likely demise of Carnaby's Black Cockatoos under the Government’s plan to extend the Roe Highway and the definition of free-range eggs, as well as promising to ban clear felling of native forests and plastic bags in the future.
However, it wasn’t only the content of the announcements that should be seen as sign of things to come. New Labor also touted its wares in a new way - to a new constituency that is very foreign to this Government and its slow-moving elders.
While Minister Buswell was taunting the Opposition in Parliament for their 'Stop Perth's Sardine Trains' social media campaign, MPs sitting on the comfy couches opposite were busily squirreling away on their mobile phones and ipads strategically Tweeting and Facebooking their way into the hearts and minds of a new generation of voters. The problem for the Government is that apart from one guy who spends a lot of time Facebooking about his cat, no Government Minister is engaging with these very mobile voters – many of whom already resent being told by a fuddy-duddy old Premier they should buy smaller houses and consider air-conditioning a luxury.
As proven by the incredible global response to the Kony 2012 campaign, these voters are not only mobile, they can become spontaneous and potent activists with one click of the “Like” button on a Facebook page or “RT” of a controversial Tweet. As I disclosed in Cantankerous Col Pot and his nervous nannies, the Premier has only owned a mobile phone since he became Premier and sent his first email just a year before that. The Luddite-like mentality of the Premier and his leadership team is in stark contrast to that of New Labor who have entered the void of social media electioneering with vigour.
Innovative policy and engagement methods aside, perhaps the biggest game-changing success McGowan’s New Labor appears to be closing in on is that of retribution. And if they land what they have hooked, Labor’s fishing expedition will cause serious damage to the Government and Colin Barnett’s leadership.
Mr McGowan and his team of tech-savvy tweeters have done something truly amazing – found a way to make Minister John Day look grubby.
This is indeed a miraculous feat because everyone agrees that Minister Day is one of the nicest, most ethical people in Australian politics. For anyone who has ever met Minister Day, it’s obvious that his failure to declare a potential conflict of interest regarding a planning decision near a property he owns was nothing more than an honest stuff-up.
Because of that, the Opposition’s attacks in Parliament have been fruitless, being all but shrugged off by the Minister and his boss. However, during question time on the last sitting day of the last sitting of Parliament, the Premier opened up some wiggle room and put this on the record:
Colin Barnett: If the minister erred, he erred only in failing to, I guess, question either myself or the Cabinet Secretary whether he should totally exempt himself from that issue.
Tony Buti: Which he should have.
Colin Barnett: He probably should have. It is a technical breach, but that is all it is. In my view it is not a conflict of interest, either perceived or real… It was not on his mind. Yes, he should have sought my advice on whether it was appropriate to make even that administrative decision. He did not do that; that was an error, but that is all it was.
Once again, the problem isn’t Minister Day. No one thinks he has done anything wrong, other than accidentally create a situation that doesn’t look great.
And that is the problem for the Premier.
As a grumpy backbencher planning his retirement while Alan Carpenter presided over the last Government, Colin Barnett watched the Labor Party brand get decimated by claim after claim of Ministerial corruption and mismanagement. The rest is history and Mr Barnett was thrust into Government with the unenviable task of having to reassure Western Australian tax-payers that he would have a zero tolerance to anything that even remotely smelled dodgy. He sacked Treasurer Troy Buswell for actions that were eventually proven to be above-board and he sacked one of his senior media advisers for doing something the Public Sector Commissioner recently said shouldn’t have led to a dismissal.
Deep down, the Premier knows that Minister Day’s actions look just as bad, if not worse, than those that led to a number of others being demoted or sacked. John Day is a good Minister and will be a sad loss to the State if he loses his position but given the Premier’s predicament in the precedents he has set, his choice of words in Parliament last Thursday were truly prophetic. The Premier has form in using language like this to back away when he sees the writing on the wall and I’m certain I wasn’t the only one to notice his change in terminology. New Labor must be very excited to smell the same odour that plagued them in their final years of Government.
I’m no fan of Mark McGowan. But even as a biased political commentator, it’s clear from his first couple of months in the job that the Labor Party has made the right decision and the Barnett Government has a difficult 11 months ahead of them.
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