Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.


 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate

Subscribe!
Subscribe





On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.
___________

Syndicate
RSS/XML


RSS 2.0

The election best lost

By Tim O'Hare - posted Thursday, 12 February 2015


The Queensland election is over and Labor has defied the odds and gone from a netball team to what looks to be shaping up to be a minority government with the support of independent Peter Wellington.

Social media is exploding with pro-Labor sentiment and political commentators are speculating about what this means for Tony Abbott and his government.

What's missing is an assessment of what Labor and Annastacia Palaszczuk will do now that they have defied even their own expectation and won government.

Advertisement

Labor's strategy was in Palaszczuk's words to run 'a referendum on asset sales', an extraordinary single-issue campaign against a policy they advocated at the 2012 election, and it worked.

Labor mobilised a groundswell of grass-roots, anti-privatisation sentiment complete with a close working relationship with the union movement and a formidable campaign by the external organisation Not4Sale.

This has also brought Labor closer to its splintering working-class base, through playing to their hysteria around private ownership.

The only problem with this strategy was that it worked, far too well in fact.

As a result the Labor Party has won a mandate to oppose the asset sales that they were hoping the LNP would make.

The last two terms have seen both Premiers back-flip on their pledge not to sell assets.

Advertisement

Commentators are quick to assert the toxicity of asset privatisation, what's often overlooked is perhaps the necessity of it given that leaders across the aisle are willing to sacrifice their reputations for it.

For these reasons its always been in Labor's interests to let the LNP expend its political capital on asset privatisation, while future ALP governments reap the economic benefits of privatisation.

Unfortunately when Labor tried to run a single-issue, protest-vote campaign against asset sales in order to pick up more seats, consequently Labor has unexpectedly fallen into government.

To use a tried and true expression, Labor has attempted to have its cake and eat it too.

As a result they got government but no revenue, when what they wanted was revenue for future government.

The new government will be faced with $80 billion debt and no mandate to adopt any of the far-reaching savings measures needed to repair the budget deficit.

Labor Treasury spokesman Curtis Pitt outlined his modest budget strategy that forecast a $5.4 billion reduction in government debt over five years, through such measures as freezing the Newman government's payroll tax threshold, project re-prioritisation and cutting government advertising.

Such micro measures should not be dismissed, but to rule out $37 billion in potential savings seems pointless when the current debt is incurring an annul interest rate of $4 billion.

Pitt described the initial audit recommending the asset sales by former Federal Treasure Peter Costello as "predictable and purely political" despite a similar recommendation in the 2012 Infrastructure Finance and Funding Reform paperby then Federal Labor Infrastructure Minister Anthony Albanese.

The report stated: "State and territory governments should identify and monetise suitable public assets, allowing the freed-up capital and the avoided debt repayments to be invested in new infrastructure."

Pitt has said that the asset sales would deprive Queensland of revenue and lead to a $2 billion a year black hole in the budget.

This approach runs contrary to that of former Labor Premier Anna Bligh who said, in defence of her $15 billion asset privatisation plan (which the Newman government expanded upon):

"There are also many myths being spread and outright scare-mongering that feed those concerns. For example, these businesses are not, as some claim, a cash cow from which government can endlessly draw money. In 2008-09 they generated $320 million, or less than 1 per cent of the Government's revenue. On the other hand, the Government will save $1.8 billion every year in interest payments on the borrowings needed to sustain them as viable businesses."

In harking back to its 1950s era hysteria about private ownership, Queensland Labor has dug itself into a ditch, ignoring the advice of its predecessors and crying foul at the sale of $37 billion assets that generate only a $2 billion per annum return.

Annastacia Palaszczuk claimed that keeping assets 'in public hands' was part of her campaign to combat cost of living pressures.

This flies in the face of reports by both the Productivity Commission and Ernst and Young which find that electricity prices have risen 120% since 1998 in Queensland while they have steadily fallen in Victoria or South Australia, where electricity is privatised.

Such is the gap that a new report by the Carbon and Energy Markets has found that Queensland is the most expensive place in Australia for electricity, paying up to four times more than in Victoria, the cheapest.

"One of our standout findings is that costs are extremely patchy across Australia with some people, particularly in parts of Queensland, paying extraordinarily high network costs," said Lin Hatfield Dodds, National Director of Uniting Care Australlia.

When faced with such a dismal fiscal outlook Labor has to ask itself, is the sentimentality of state ownership really worth a protracted deficit of $100 billion?

Despite being rejected by the voters on January 31st , the Newman government's privatisation agenda achieved a rare feat of near consensus amongst economists and business leaders.

As Dr. Tony Makin, a Professor of Economics at Griffith University, said "I think that with the shortfalls in revenues and the blowout in public expenditure and growth in debt, assets had to be put into the picture in the absence of some white knight solutions like increasing the GST."

With the erosion of popular support for both Anna Bligh and Julia Gillard when proposing controversial agendas, we are now witnessing the death of the reform era where Oppositions win government by saying what the public want to hear and then get turfed out as soon as people realise they've been ribbed.

Labor is opting for short term electability rather than long-term survival and in doing so have missed a golden opportunity to have an open and honest discussion about the measures needed to repair budget prior to an election, something that Bligh, Gillard, Newman nor Abbott ever did.

  1. Pages:
  2. 1
  3. 2
  4. 3
  5. All


Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

4 posts so far.

Share this:
reddit this reddit thisbookmark with del.icio.us Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Tim O’Hare is a Sydney-based, freelance commentator, originally from Brisbane. He has written about a range of subjects and particularly enjoys commenting on the culture wars and the intersection between politics, culture, sport, and the arts.

Other articles by this Author

All articles by Tim O'Hare

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Photo of Tim O'Hare
Article Tools
Comment 4 comments
Print Printable version
Subscribe Subscribe
Email Email a friend
Advertisement

About Us Search Discuss Feedback Legals Privacy