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What can we expect from our government?

By Alan Moran - posted Monday, 13 September 2010


With the election over, some further movement towards this agenda is likely. Tony Windsor has expressed some scepticism about whether global warming is taking place. Nonetheless, he has apparently swallowed the propagandistic projections that “putting a price on carbon” will be relatively costless to the economy and is therefore a decent insurance policy against what its promoters wrongly call a cataclysmic outcome. Gillard would doubtlessly prefer to procrastinate on this but her hand might be forced.

She might also have wanted to quietly defer the mining tax until the strength of its opposition is gauged but, if so, Wayne Swan is singing from a different prayer sheet. This has already caused ructions. While the Greens would happily see mining crippled the two independents are not so sure. Their response was to say that the issue had been placed on the back-burner until the full enchilada of the Henry Tax Report is considered in toto. Windsor has since suggested that he might have been misunderstood.

Like the other two independents, the two country members have strong reasons to avoid a new election. Tony Windsor inadvertently confided at his press conference that the Coalition would win a new ballot before realising that this was revealing him backing a government which the national electorate would not chose (his own electorate would clearly favour the Coalition). The independents’ power is really to influence new legislation and an Abbott government would much more securely close that off as its administration would be more about reversing ALP excessive spending rather than legislating for more regulations.

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Unlike the other independents, Windsor’s electoral position is rock solid. He also has far more political substance than the others and he has experience almost two decades ago in holding the balance of power in the New South Wales Assembly. For the Coalition, his performance then was most discomfiting - they claimed he constantly changed and escalated his demands as a condition of on-going support. He would doubtless have a different view.
Both Windsor and Oakeshott are, no doubt, genuine in their belief that country Australia has been getting the short end of the stick in terms of government spending. Indeed, almost all country MPs would agree with this even though it is not supported by the expenditure facts and employment outcomes. In particular, the prospect of a broadband roll-out that gives internet connections in country areas as fast as those in Sydney is irresistible; and to hell with the costs!

Unlike Windsor, Oakeshott’s performances in the media have convinced many, probably including some of his constituents, that he is a verbose, empty vessel and perhaps not even the full quid. He would be vulnerable in the event of a new election. While he has finally decided not to take the Ministry he had previously sought, this followed highly public advice from other independents who pointed out it would unambiguously compromise his independence. His decision also followed the revelation from Morris Iemma that he had previously sought a Cabinet position from the State Labor Government when he was an independent member in the New South Wales Parliament; that bid was rejected because his vote was not crucial to the government’s survival.

Fragile coalitions often persist. The original “mince pie” coalition cobbled together by a 24-year-old William Pitt just before Christmas 1783 lasted 18 years. And closer to home in recent years we have seen the party in power relying on independents and going the full distance in Victoria as well as with Tony Windsor in NSW.

The money would have to be on the federal ALP/Green/independent alliance lasting the full distance. This means there is something of a regulatory agenda brewing with an ALP disposed towards more intervention in the economy, Greens who loathe all commercial businesses other than eco-tourism and the “conservative” country members who have little interest in smaller government and are out for massive new licks of spending allocated to their broader constituency.

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Alan Moran is the principle of Regulatory Economics.

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