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The budget impasse reflects an indulgent electorate and an undemocratically elected senate

By Brendan O'Reilly - posted Tuesday, 16 September 2014


In my opinion the 2014 Budget did not deserve the treatment it received in the press, though there are some aspects of it that I do not support. (I had, for example, felt that the HECS/fee burden on students had already approached its limit, that the cuts to the Public Service were being rushed and were resulting in excessive expenditures on redundancies, and that conditions and rates of payment for allowances such as NEWSTART had already become too frugal relative to the benefits available to pensioners.)

That said, the reality is that the quantum of cuts made in the 2014 Budget was absolutely necessary in order to slow the growth of spending. The alternative of raising the equivalent in increased taxes would probably have been even more unpopular.

I also don't agree that the Budget unfairly targets poorer Australians. The poor benefit disproportionately from public spending so that it was inevitable that they were going to be hit by any cuts. Certainly some measures cutting welfare outlays were targeted on the poor but Centrelink payment rates themselves are indexed.

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Other Budget measures, however, mainly hit middle and high income earners. For example, few commentators have drawn attention to higher income taxation in the 2014 Budget. This occurs because all income tax thresholds have remained the same in 2014-15 instead of being indexed, so that taxpayers have an increased proportion of their incomes subject to higher tax brackets. A new 2 per cent Budget Repair Levy also came in for the highest tax bracket, as well as an increase in the Medicare levy from 1.5 per cent to 2 per cent.

Overall, I would have thought that the pain of the 2014 Budget was necessary and pretty widely shared.

Turning to the political process, Australia has a Senate that in recent decades has been (more often than not) controlled by its non-government Senators. While the Senate was intended to act both as a States' House and as a House of Review, the Senate has in fact been mainly used by the non-government parties (both sides) to simply block or amend government legislation. Because the Senate is not fulfilling its intended purpose, I personally favour its abolition (and getting rid of the remaining State Upper Houses for that matter) but it is unlikely that a proposal to abolish the Senate would be passed in a referendum.

The voting system for the Senate has changed twice since federation, with the Hare-Clark system having been introduced in 1948 by the Chifley Government (at that time expected to lose to Menzies in the next election). The earlier block-voting regimes for Senate elections tended to result in landslide Senate majorities for an incoming government (which largely prevented a blocking role), so that a change to Hare-Clark advantaged a party expecting to go into opposition, as well as facilitating the Opposition and cross-benches in blocking Government legislation.

In theory, the Hare-Clark voting system (known overseas as Proportional Representation by the Single Transferable Vote)gives voters the final say on which candidates get elected. The Hare-Clark systemis used in lower house elections in Tasmania and the ACT, as well as in Ireland and Malta. It is also used in upper house and regional elections in many Australian states and in a number of Commonwealth countries, as well as in many local government elections.

Hare-Clark is supposed to give each candidate on the ballot paper an equal opportunity to get elected ("donkey vote" influences excepted, - unless Robson rotationis used), and preferences are distributed according to individual voters' rankings on the ballot paper. In theory, there are no safe seats under Hare-Clark because all candidates need to compete for votes against others on their party ticket, as well as with candidates from other parties.

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The reality is that the Hare-Clark system in Australia has been corrupted by a number of influences. Historically Australia's use of and common adherence to how-to-vote cards was the biggest distortion. This was eclipsed in the lead-up to the 1984 Senate poll by the introduction by the Hawke Government of above-the-line voting for the Senate (in an attempt to cut the high informal vote at that time, felt to disadvantage Labor more than the Coalition).

How-to-vote cards are mainly a phenomenon of Australian mainland elections. They are unknown in Ireland (for example), and they also are said to be little used in Tasmania. How-to-vote cards (if followed) result in voters surrendering their right to themselves choose preferences. Instead voters follow the instructions of the party of their choice. While not in the spirit of democracy, in a literal sense this practice is not undemocratic because following such instructions is a purely voluntary decision.

Above-the-line voting is far more insidious because it makes voting for the permutations of preferences registered by political parties much simpler and time efficient (because voters only have to mark one box) relative to choices below the line. Filling-in preferences is compulsory in Commonwealth (and many state) elections and it is discouraging for voters to have to fill in up to 70 or more boxes below-the-line. Consequently, in recent upper house elections about 96 per cent of voters voted above-the line.

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About the Author

Brendan O’Reilly is a retired commonwealth public servant with a background in economics and accounting. He is currently pursuing private business interests.

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