Election day and the state of policy debate

On election day (August 21, 2010), it was interesting to observe newspapers to assess the extent that key issues were still on the political radar.

All papers made their judgments about which party should win the election. The Australian, The Daily Telegraph, Herald Sun, The Courier-Mail and the West Australian endorsed the Coalition; while Labor was supported by the Sydney Morning Herald, The Age, The Advertiser, Mercury and The Canberra Times.

Jennifer Hewett (The Australian) noted that the 2010 election campaign has seen an avoidance of big promises as was the case during the 2007 election campaign. Besides mental health and a generous paid parental leave scheme, the Coalition offered few big sounding promises.

Paul Kelly (The Australian) noted how Abbott brought “an energy, momentum, authenticity and ideological thrust absent since John Howard at his best”. Similarly, Laurie Oakes (Daily Telegraph) noted how Abbott has transformed himself to reflect enormous self-discipline, a development that reminded him of Bob Hawke who gave up boozing and (for the most part) womanising to fit the mould of a viable PM.

Oakes also criticised Labor’s tactics. This included going to the polls too early, announcing that a re-elected federal Labor Government would invest $2.6 billion in a rail link between Parramatta and Epping in Sydney after 12 years of New South Wales Labor reneging on a similar promise, and the “ridiculous Citizens' Assembly proposal that discredited her climate change policy”.

Peter van Onselen (The Australian) called for Labor to be given a second chance on the basis that the Liberals had not learned the lessons of their defeat three years ago. He noted Abbott not debating Gillard on the economy, the Coalition not having its policies costed by Treasury, and the Coalition losing a 47 to 35 per cent lead at the start of the campaign as then best party to handle the economy (according to Newspoll).

But other articles did reflect policy difficulties ahead despite Australia having low government debt and being fortunate to benefit from a booming China.

Jennifer Hewett (The Australian) highlighted many issues that need to be addressed, even allowing for the possibility that the developed world is not affected by a double-dip US recession or new global debt crisis.

They include economic infrastructure (such as ports, roads and rail) with both sides estimating that it will cost of billions of dollars with Labor doing little besides its promise to build broadband and private expenditure complicated by the global credit squeeze. It was only in the last days of the campaign that the Liberals introduced the notion of infrastructure bonds and a tax rebate to encourage greater private-sector investment, particularly from superannuation funds, although it remains to be seen how this proposal would work.

Health care, despite a package negotiated by the Rudd government, also will not end the blame game with the states as costs continue to increase because of improving technology and an ageing population supported by few working taxpayers.

Universities, along with other education issues, were also important. With student-staff ratios increasing from 12:1 to 20:1 in the past 15 years, and universities relying more on higher fees and foreign students for finance, there are likely to be further problems ahead. While university professors may advocate even more international students, as Hewitt highlights, it will be interesting to see if public opinion will be as supportive.

There are also immigration concerns, although many economists are already predicting that shortages will lead to increased wage pressures next year, which will lead to rising inflation and interest rates.

At the same time, there are calls to boost productivity growth which has declined from the 1990s average of 2.1 per cent to 1.4 per cent since 200 (especially since 2004).

Hewitt also asked how Australia would cut greenhouse gas emissions without a price on carbon. A survey by the Energy Supply Association indicates that electricity generators have already reduced capital spending on power stations by $10 billion because of the uncertainty over carbon pricing.

Ross Gittins (The Age) also addressed policy needs.

While he noted that national income has been growing strongly because of coal and iron ore exports, he expressed concern about whether Australia encourages lasting benefit from the extra revenue going to government - for a time when the resource boom ends.

Gittins urged Australia to focus on high-value services, not manufacturing. He called for greater public (and private) investment in education, training and research on the basis that this should raise productivity in the longer term. Gittins argued a key challenge is to “(temporarily) constrain consumer spending to make room for more business investment and public infrastructure spending”.

To address housing, Gittins urged supply-side reform “to remove state and local governments' obstructions to medium-density housing and the release of serviced land”. He also noted that high immigration makes a negative contribution to productivity improvement, and demanded increased investment in business equipment, housing and public infrastructure.

Finally, Gittins called for “a careful, evidence-based examination of what is a sustainable population, in which the economists, technological optimists and natural scientists box it out”.

So awareness of the complex and important issues remains evident, even on election day when the obsession is with who wins. It is the many important issues of concern that demand greater political action rather than a mere focus on who will deliver a budget surplus first and by how much, as reflected by Labor indicating a $3.1 billion surplus in 2012-13 and the Coalition $6.2 billion.

Of course, especially after the waste of Labor, there will be an ongoing need for government prudence. For instance, it is worth noting that Labor’s national broadband network (NBN) proposal (originally announced at $43 billion) aimed to produce Internet speeds of 100Mbps, yet Stephen Fenech (Daily Telegraph) noted on election day that his $20 upgrade to his Optus cable broadband service had already achieved this speed via an updated HFC (hybrid fibre coaxial) cable. Fenech rightfully questioned is there really a need to spend $8,000 per household via Labor’s proposal.

Once the government is formed, the media should give ongoing attention to policy needs that will help shape Australia’s future in coming years. The problems are immense: transport, infrastructure, housing, health, education, and water.

In regard to housing, arguably the most important need of most people, debate was almost non-existent among the major parties during the election campaign, despite an increasing minority of Australians confronting higher and higher prices for home purchase or rent.

If Australia’s political leaders do not deal with key issues sooner rather than later, then future generations of Australians will suffer. Sure short-term political considerations are important, but they merely postpone the pain, and a mining boom will not last forever.