Roof caves in on Gillard reno troofers

If this was the sort of poliblog that was in the live cattle business - carving up fresh meat for a ready audience of like-minded noddie merchants who want to have their prejudices confirmed in tasty fashion on a daily basis - I would probably spend a lot of time making fun of Michael Smith, whose career has gone seriously downhill in the last two years since being sacked from Fairfax for smearing Julia Gillard. His post yesterday about Gillard's appearance at the Trade Union Royal Commission had it all: emotion-based reportage, incredulity in the face of stark facts, conspiracy theorising, empty posturing, flailing aggro, and a comment thread full of hilariously butt-hurt insanity.

While a dispassionate observer might wonder what all the fuss is about, the truthers can not be swayed from their conviction that Gillard is guilty of the most heinous crimes. Witnesses have been leaned on, lawyers are protecting one of their own, the commish has been nobbled... it's all straight out of a Jon Grisham movie. The ultimate theory put forward by Smith, and taken up with desperation in the comments, is that the Royal Commission is merely a sideshow, a fishing expedition, to fuel the ongoing investigation into the AWU WRA by the Victorian Fraud Squad.

I would remind the court of public opinion that the AWU scandal is over the sum of $400,000 (admittedly in mid-1990s dollars, so that's about $680,000 in 2013 money according to the RBA inflation calculator). The TURC is budgeted at $53.5 million. Add that to the cost of all those detectives from the Fraud Squad swarming all over this cold case for years with precisely zero to show for it after all this time. At this point, the person most likely to face charges is Kathy Jackson, the right's favourite "whistleblower" and friend of the H.R. Nicholls Society.

Today is also the 40th anniversary of the resignation of Richard Nixon, which lead one US blogger to reminisce that it was the last time that the system worked. This is not technically true. Since Nixon (and in Australia, since the Dismissal), time and again the right has subsumed its guilty conscience and used the system against the left despite no crimes having been committed - Bill Clinton's faults were a private matter, and Gillard has evidently done nothing to warrant charges. It "works" to the extent that it provides a taxpayer-funded platform for the right to smear the left for years on end, with no accountability. The system continues to fail when it comes to right-wing leaders: witness the lack of a need for a pardon for any LNP politician involved in the AWB wheat-for-oil scandal, which involved over $220 million in kickbacks to Saddam Hussein's regime.

One mustn't get too cynical about these things, nonetheless. That's what being a truther is ultimately about: feeling like you and your mates are the only ones possessing the True Vision of reality, and the rest are sheep who don't accept your blinding insight. False consciousness is a powerful but ultimately futile distraction.

Craig Thomson case craters

The collapse of the Craig Thomson case is no surprise.

Mr Rozencwajg said instead of alleging a deception of the Health Services Union, the charges alleged a deception of the Commonwealth Bank and Diners Club, the lending institutions that issued the cards at the centre of the alleged offending.
But he said he couldn't see how either institution had been defrauded.
Any alleged fraud, Mr Rozencwajg said, would have been committed on the Health Services Union.

Obviously, the object of the case was never to actually convict Thomson, since this flaw in the charges should have been plain to all before it got underway. The surprise was that it ever got to court. That was the win condition for the prosecution, since the whole point of the case was solely to produce media coverage like the Daily Telegraph front cover this week shouting I HAD SEX WITH CRAIG THOMSON. Smear was the game, not justice.

One has to ask why it is that the Health Services Union didn't bring a civil case, as the magistrate suggested. The answer no doubt lies in Thomson's successor Kathy Jackson, who doesn't want the publicity because she's a far greater example of the kind of financial behaviour that got Thomson into hot water.

As became clear from evidence during the trial, the amount of money at stake here - less than $30,000 across five years - is dwarfed by the amount of money which is drawn out on HSU credit cards in cash by Jackson on an annual basis with no accountability. In addition to the $100,000 in cash she now withdraws every year no questions asked, she went on a $22,000 ski trip with her husband to Mt Hotham on union coin in 2005.

When the right talks about this case and are presented with these facts, their attack normally turns to accountability for union spending, as if this case will be the moral catalyst for the dissolution of all left wing unions. However, what Thomson and Jackson have been doing is no worse than what happens in a lot of Burnsian corporate environments. All of the sins of the corporatised union movement were learned from the gorilla-vested original sinners in Martin Place and Collins St. The money at stake here is pocket change compared to the vast amounts of shareholder funds wasted on executive benefits in Australia every day.

That is not to condone this waste; both types of greed are distasteful. It would be disingenuous to bring the opprobrium only on unions for hosting venal graspers like Jackson, Williamson and Thomson. The problem is the lack of accountability for all elites. Pretending that it is a union-only problem will not solve it.

UPDATE: This article has been tweaked slightly and reposted at Independent Australia, after they asked nicely.

Revenant Rudd, Zombie Hawker

I have been ambivalent in the past about Katherine Murphy's work, both at the Age and her new gig at the Guardian. Her role as liveblogger of the day's federal political cycle has led her to report on a lot of faffery, and her long form work has consequently been drawn to the short term and superficial. Arguably this is merely a reflection of the limited (and limiting) work she has been given to do to suit the interests of the publications she writes for, not her own skills as an analyst.

Nevertheless, her piece on Zombie Bruce Hawker's election diary was a big head nodder for me, and well written it was too.

The great resonant emptiness in this Rudd rebellion recount is the apparent absence of an agenda. Rudd spent years campaigning to regain the Labor leadership but apparently had no cut-through idea of what to do when he had it. This, of course, by implication, is the fault of others. There was simply not enough time for him to map out an alternative agenda. (Really? That busy on the backbench?)
Net result: no coherent campaign. No consequential pitch for a third term in office. Just “diamond-studded toolboxes”, “bloke-ing up”, policy cooked up in the campaign plane, cycles of war and attrition with News Corp – confidences that would be laughable if they weren’t in fact lethal; lethal for political journalism.

Rudd devotees saw what they wanted to see in him. This is not a new insight, of course, but as more comes out about Rudd II, the more these acolytes are exposed as not understanding what motivated Rudd, not adding up his deficit in substance. Professor John Quiggin saw a centrist, someone to the right of the Left's Julia Gillard and thus more electable. The Piping Shrike saw an anti-politician, navigating his way between the factions strange-attractor style, pathfinding a New Way in a Blairite repudiation of the factional system.

In retrospect: this was all bullshit. Rudd II was not only just another politician, but he wasn't even a competent one. In Quiggin's own formulation, he practised zombie politics. He was not a messiah whose 40 days in the wilderness transformed him into a generous leader of men. He was a brainless revenant, who had no reason to go on after accomplishing his main goal of revenge on Gillard. He shambled from presser to presser, powerless to escape the media cycle. The public picked up on this, and his poll numbers retreated from parity back towards much what Gillard would have achieved if Rudd had withered away instead of finally sinking those claws in.

The one thing we will never know is how Gillard would have gone if Rudd had not destabilised her for her entire reign. Could she have been the next Hawke if Rudd had withdrawn gracefully like Hayden did? One for the historians.

The statification of Australian federal politics

Yes Mr Abbott, it's a little black hole.

I have been trying to think of a way to describe what Australian federal politics has turned into across the last two election cycles. The consensus on the 2010 election was that it was the worst in memory, and while that hasn't been said much about the one just gone, that's probably because it was no better and people have accepted this low quality debate as the new norm.

There were a number of signifiers during the election of what I think of as the statification of Australian federal politics - which I would define as the federal level devolving in influence to the level of states, with federal-level power being ceded to global markets and the RBA.

The first, and most emblematic, was when Tony Abbott stood in front of a pothole on the Great Ocean Road as he was announcing a rather small investment in road maintenance. This is normally the province of state or local government... but that is what federal government is becoming. The Liberals are nominally the party of small government - albeit that their history from Menzies through Fraser and Howard has been to increase public spending. Now we are faced with the prospect of a government so small that it doesn't function at all, as the Abbott government still hasn't been sworn in more than a week later. You can't get much smaller than no government!

A couple of articles also crystallised this view. The Piping Shrike has been pushing the line that the economic debate has changed in that prospective Prime Ministers can't get away any more with claiming that they can control the economy to the extent that they used to in the Good Old Days, pre-Keating, when we were hid behind a wall of tariffs from the coming globalisation.

The government enters this election with what appears a confused economic message. On the one hand it seems to be saying that it was its stewardship that meant Australia avoided a recession through the GFC. On the other hand it is warning that a Chinese slowdown will mean unemployment will rise whatever it does. 

This seems contradictory if the economic debate is still seen in the old way. However, the common theme running through the message is a new way economic policy is being viewed, namely that government is not responsible for the state of the economy, rather just for protecting the electorate from the worst of it.

The Shrike's original post on the election assumed it would be fought on the economy, as has been the default assumption on any Western election post-Clinton, but this turned out not to be the case at all. The Shrike has been, to the extent that it is possible to assign labels, a Rudd backer. His underlying narrative was that Rudd was going to usher in a new era of technocracy, with Labor being reborn from the ashes of unionism into a Zegna-suited, wonkish future. They would succeed where British Labour has failed, supposedly, in reinventing themselves as a party of Confucian smarty pantses, free of the vestiges of class struggle. In this scenario, the antediluvian Libs flailed about still speaking the superseded language of Howard, playing the role of "stupid" in "it's the economy, stupid".

His next article expanded on Labor's attempt at technocracy in the same vein, but showed indirectly why it wasn't going to work.

Having gone to such lengths to confirm the independence of the RBA and Treasury, we are now seeing on Labor’s side an increasing political synergy with them. But not as before. Not as institutions that are ultimately subservient to the government, but what could be described at best as an equal partnership or even subservience in the other direction.

If Rudd was to be our new emperor, was his manifesto to be to follow whatever Glenn Stevens wanted? Who runs the show? There is a conflict between acknowledging that we are a small fish in a globalised pond full of external sharks we can't control, and pretending that we can solve our problems through wonkish nudgery. It particularly doesn't work if you swallow the austerian rhetoric of the other mob, and leave the task of expansionary policy to the monetary side. Stevens is more flexible in his policy than Rudd was or Abbott is, given the bipartisan obsession with debt. The Prime Minister is like a state Premier now, with Stevens in the role of the PM doling out favours in the form of interest rate cuts.

There are major flaws with the theory of Labor becoming a technocratic ruler class. The main one highlighted in the election campaign was that Rudd's slogan was "A New Way", but he never attempted to define what that was in any way at all, as I highlighted in a recent post. It's all very well to harken back to Blair's Third Way, but if there's no substance behind it then it's not going to work. There was not actually a new way at all, just old ways trotted out one more time, like Bruce Hawker's cheap suits. It's easy to make fun of the Libs for having the ineffectual Arthur Sinodinos and the black cloud that is Andrew Robb as their brains trust, but where was the vision from Rudd? Perhaps more importantly in the long term, if the caucus is renewed by apparatchiks, former staffers and celebrities, where is the fresh thinking going to come from?

Speaking of Hawker, the defining article of the campaign was this one by Peter Hartcher, detailing his descent into the murky depths of a focus group, probably set up by Hawker. Abandon hope for a compassionate society, all ye who enter here. 22 years without a recession breeds complacency, no better illustrated in this series of #firstworldproblems complaints. This is how Rudd played the game, and he lost badly to Abbott. He failed the vision test. Keating would have listened to such whinging and whining, and changed the game to make all of it irrelevant.

Now, at this point you might be thinking that I'm looking with rose coloured glasses at Keating and all he stood for. We don't necessarily need another PJK. Part of the problem is that so much work in making the Australian economy globally competitive has already been done, so what is there left for a putative Prime Wonk to do? Stand in front of potholes like a pissant councilman, make an effort to balance the books, and leave the heavy lifting of Keynesianism to the RBA? To accept that is to accept the framing of government by the right.

It is difficult to see the next Labor leader as being able to drag Labor into the 21st century. The party is still riven by left and right factions, by unions versus technocrats, by the NSW Right versus the rest. Talk of the party dying is silly, yet the barriers against someone leading it into a future of government in the short term are numerous and high. The best they seem to hope for is for the Libs to implode, since the internal inconsistencies and weaknesses of the Abbott platform are legion.

For the record, I think Albanese would be the better candidate. Shorten has looked like a beaten man since making the fateful shift to Rudd. Albo would take the fight up to Abbott, and energise the caucus if not the base for the likely long stint in opposition ahead. His similarity with Daniel Andrews, however, can't be denied. Just as Andrews has proven to have a lack of cut through in Victorian politics in the face of the broadly disappointing Baillieu/Napthine snorefest, as merely another state politician who is about as exciting as an accountant, Albo may not be able to get enough media coverage to get the public to see the punches he lands on Abbott.

When even the Prime Minister doesn't think the business of government important enough to sign up for it in the first week after winning an election, the public can be forgiven for turning off. They turned off state politics long ago, and now they are turning off federal politics in droves. This is a failure of the political process in Australia, and represents the ultimate victory of the right if it continues. It will probably take a recession to jolt us out of our complacency... and if the Coalition follows its own austerian bulldust, it will allow one to happen, probably during its first term if various forecasts are correct. That may be the only catalyst possible for all sides of politics to sit back and reassess where the whole Bruce Petty style contraption is going.

And down the stretch they come

I don't know if Nate Silver is paying much attention to the Australian federal election, occupied as he would be by putting more zeroes into his spreadsheets post his ESPN acquisition, but if he gave us more than a cursory glance he would recognise some fundamental errors that pollsters made last year in the second Obama victory that local firms seem to be making all over again.

Silver's signature analysis for the NYT of the error rates of US poll companies in 2012 is not itself flawless, since there did appear to be a very late swing towards the incumbent of a point or so from the Hurricane Sandy aftermath which threw everybody out of whack even more than they already were, which is why all but four of the pollsters he listed showed a Republican lean. It showed that the methodology of a poll does carry its own problems - robopolls conducted via automated systems and/or those which exclude mobile phones both oversample conservative voters - but that in-house errors due to sampling techniques can be even more pronounced, up to a 7.2% gap between reality and the results of usually respectable Gallup.

We don't have a local version of Silver, a credible interpreter of the polls for a mass audience who has the statistical chops to back up his analysis. Antony Green is our closest, but he stays out of the daily hustle and bustle to concentrate on electoral process. William Bowe does his best at Poll Bludger over at Crikey with his BludgerTracker index updating for every new poll and hosting massive comment streams where partisans bludgeon each other with the latest figures, while Kevin Bonham goes more in depth in a weekly round up.

Kevin's article on the first week of the 2013 election campaign sums up the high point for Labor polling thus far, as it has been all pain all the time since then. Back then, even though they trailed slightly on the two-party-preferred, it was possible to posit a Labor victory given that they were going to gain more marginals in Queensland and WA than they would lose in NSW, Victoria and Tasmania. In the weeks after, every part of that theory has been progressively attacked by national, state and individual seat polls.

If Andrew Elder's theory that Tony Abbott is never going to be the Prime Minister is any chance of coming true, not only does the 2PP need to swing back to somewhere near the first week's levels, there has to be something wrong with the seat-level polling which in marginal Labor seats has shown as much as a nine per cent swing against the ALP. These are all robopolls and/or have very small samples, so they are weak evidence. One wonders if their marginals are indeed hosting such a swing, why the national 2PP is so strong for Labor. Where are their extra votes coming from, safe seats? It's a mystery, not really helped by a strong base of diverse, comprehensive and credible poll sources.

Then there are the betting markets, which started off as highly favouring a Coalition victory even in the first week when the 2PP was 50:50, and have blown out to unbackable odds with one outlet already announcing payouts to those gambling on the Libs. Not that that is a sure fire sign, either: bettors on wins by Tiger Woods and Chris Judd in various recent markets have enjoyed early payouts for competitions in which their ticket didn't end up winning. Politics is a novelty market for bookies, conducted for promotional purposes only.

If I was Nate Silver looking at all of this, I daresay I would be going against the prevailing trend as he did last year and declaring the race as still too close to call. He would probably not have as much faith in the quality and breadth of Australian pollsters to make as confident a call as he made last year, that Obama had a 90%+ chance of winning. That is not to say that Rudd has much of a chance, mind you. The margin of error for Labor is their only hope at this point, but as the days count down and the polls don't narrow by enough, they are running out of doubt from which to take the benefit.

So many dumb ways to lie

I am not a fan of the advent of fact-checking sites we have seen in this election campaign. This is not because fact checking is not needed: in the modern age of slowly dying mass media, retreating to its partisan past, an independent source of fact checking is a necessary part of the post-MSM journalism landscape. My objection to the likes of Politifact, ABC Fact Check, and The Conversation FactCheck is the granularity of the rating systems.

Bronwen Clune's article on this subject for the Guardian was illustrated by a big image of a green tick and a red cross, and that sums up my problem with fact checking sites: that there is not enough nuance in the ratings allowable. Politifact has five possible ratings: false, mostly false, half true, mostly true and true. This leads it to conclude that the ALP line that the Coalition will cut 20,000 public sector jobs is false. The reality is more complex than that, however. If you just concentrate on what the Coalition has said, then you can't find much evidence of the 20,000 number. Labor's argument, however, is that the confirmation of the higher figure is implied by the sums in the Coalition's budget plan, based in part on Treasury analysis which has been running in the media for the last day or two.

For Politifact to look narrowly at whether the Coalition said it would cut 20,000 jobs misses the point, and allows the Coalition to sail by unscrutinised on the implications of its announced policies. Where is the analysis by Politifact on whether the Coalition can actually save the amount of money it claims will be saved by cutting only 12,000 jobs? That is a job for an economist, and Saul Eslake did that job, which earned him the opprobrium of the Coalition.

Politifact's concentration on the words, not the numbers, means that they are now setting themselves up in opposition to what Eslake said. We have duelling fact checkers, one checking the words which describe the numbers, and one checking the numbers which underpin the words. Who is right? They could both be right within the confines of the tasks they set themselves, but they both miss the broader picture.

In the new world of journalism after the giants fall, some will fall victim to the tendency not to tell the whole story. Journalism will become fragmented, an ecology of disparate parts instead of the omnibus juggernauts of yore. If you are setting yourself up as a beacon of truth, however, you should tell the whole truth, not just a part of it. The sin of omission will allow your words to be used by partisans in ways you do not intend. Be effusive in your ratings, please.

I am not talking about the ever-so-slightly better descriptors used by the ABC, like "outdated", or "checks out". These are just synonyms for wrong and right. Loosen it up a bit. Inject some entertainment. I was a fan of Australian writer Paul-Michael Agapow's Postviews back in the day when newsgroups were still a meaningful thing, which used in its movie reviews a Sid and Nancy scale to bring a non-linear element into end-of-review scoring. Thus, the 1996 movie Jude was scored as:

 [*/misfire] and a ski holiday without snow on the Sid and Nancy scale.

And the 1987 movie Mr India was:

[***/interesting] and Sauerkraut westerns on the Sid and Nancy scale

Not so difficult, is it? One other weakness of fact check sites is that they can be painfully earnest. Entertain while you educate! The funny bit may be the takeaway that is most memorable. Get that stick out of where it's lodged, stop pretending that you are cyborg high priests of truth, and add some personality back into these things.

If I were Kevin Rudd right now

I am here today to define the course of this election campaign. I said at the outset of the campaign that the Labor Party was going to bring a New Way of politics, which has been interpreted in various quarters as being in opposition to negativity or realpolitik. The New Way is not about these things. I will now define what it is, starting with a bit of history.

The Labor Party has always been a broad church, with many points of view represented within it. In the last twenty or thirty years, you can see the various leaders we have had have been different characters with different views of what government should do. My predecessor, Julia Gillard, led a government that was seated firmly in the union tradition of the party, focused on building the future of this country through education and the social safety net. Paul Keating led a government that was focused on economic results, and how we produced those results was a secondary concern, which did not always benefit our union friends. Bob Hawke started as a union man, but the influence of Mr Keating as Treasurer and the development of the Accord cast him in a transitional role. Economic transition, caused by the opening up of Australia to the world by the lowering of tariffs and liberation of markets, was all started by Gough Whitlam. Transition is what the Labor Party is in right now.

I am here to honour, not repudiate, the legacy of all of these Labor Prime Ministers. The story running through the Prime Ministerships of all of these fine leaders is preparing and educating Australia to compete on the world stage, free of Menzies era protectionism and strong with the knowledge and skill that good education provides. Four decades after Gough set the country on a new course, our economy is the envy of the world. If you are 21 years of age or younger, you have never known this country to be in recession. We are in the late stages of the transformation of Australia into the most robust economy in the world.

The work of strengthening Australia to punch above its economic weight is not done, though. There is still much to dislike about the Australian economy, and what signals government sends out through its policies. There are big changes that can still be made to improve our lot as a nation.

The New Way is this: finish the job that Labor started four decades ago by doing the hard things, the things we have been putting off as in the too hard basket. Take that too hard basket, empty it and see what needs to be done to finish the job.

The Australian people understand how important this is, because they see all around them the benefits of economic transformation to date. We are all in this together. We all benefit from the improvements to the competitiveness of the economy. We all benefit from the removal of protections, including protections of some within the tax system. Traditionally, leaders have been reluctant to talk about removing undeserved tax loopholes for fear of getting people who exploit those loopholes offside. The New Way is about rising above that weakness, and trusting in the Australian people to understand why we are acting on behalf of all of them, not just a privileged few.

The New Way is about rising above special interests. To be a special interest is to seek to undermine the free market by securing special privileges for you and yours. Unions are a special interest, as are businesses, as are retirees, as are students, as are environmentalists, as are the unemployed. The way politics has been run is to give everyone special privileges, so that the economy ends up being blanketed in a patchwork quilt of protectionism. The New Way is to abandon this irrational practice and instead strengthen the economy by removing burdens from its back.

There are smart people around the place who have already thought long and hard about the details of things in the too hard basket, of course. Saul Eslake is one of a host of commentators who have figured most of it out already. The Henry Tax review contains many excellent ideas, some of which we have already implemented. More needs to be done.

Specifically - and I know you all want to hear more about programmatic specificity! - more needs to be done about housing affordability. Sometimes governments get things wrong, and negative gearing has ended up having the reverse effect than what was intended. Instead of making housing investment more affordable, it has led to speculation that has driven up the price of houses to an extent where an entire younger generation is largely excluded from the dream of home ownership. This must end. However, I do not wish to upset the long-term retirement plans of those with existing loans reliant on negative gearing, so any changes we make to negative gearing would only be to new loans made from today onwards. This is a prudent way to end what has been a drag on the Australian economy.

Also, while much has been said about the GST in this campaign already, the New Way allows for some rational discussion of raising taxes to fund the things that taxpayers expect to pay for, like education and the social safety net. The GST is currently exempt on food, and the explanation has usually been to protect lower paid workers and the unemployed, but when you look at the way this actually works in the real world, it works out as being regressive and in favour of upper income earners, since they more for food. Extending the GST to food is a sensible response to balancing the budget.

Finally, the Howard government made many mistakes in managing the economy while it was in office, and perhaps the greatest one was creating a loophole for retirees by completely lifting income tax on superannuation withdrawals for those over 60 years of age. This is not rational. No other country does this. Restoring what was a perfectly reasonable measure is a normal response to what was an unsupportable change by the Liberals.

You might be asking already, but what about Labor's support for the car industry that I announced only days ago? It is true that the car industry is a special interest, and our assistance package is a form of protectionism. However, the automotive industry is vital to Australia's interests in the region, as we need a healthy base of skilled workers to support our armed forces in the maintenance of existing equipment and the development of new technology. We would not want our troops to lack for support in logistics in a time of war due to the tens of thousands of workers in the car industry having lost their skills. Additionally, it is wise to invest in manufacturing R&D to build the exports of the future. If we are to look beyond the mining sector for growth in the coming years, manufacturing is one area we can not afford to ignore.

The New Way will come under criticism from special interests, each of whom have their own ways of communicating to the public, some even through their own media outlets. It will come under criticism from the Liberal Party, who are still stuck in the old way of representing some special interests and knocking others. I say to the Australian people directly: we may be a country full of special interests, but we are all in this together. We are not a nation of seagulls fighting over a chip. We are all part of the best country in the world. We have solved many problems and avoided many pitfalls that have befallen others, but there is still much to be done. We are all in this together. Thank you.

Note: this post is a fixup from my response to this Larvatus Prodeo piece. And yes, this is the second in a series of "If I" pieces, for which I have created a label.

Red Centrism: it's the new black

One underreported aspect of federal politics since Kevin Rudd regained the throne is how much the two sides have moved their policy platform away from extremes and towards the centre. This has not been accomplished just by copying each other's policies, as Rudd did again today with his Northern Territory economic zone announcement.

Rudd spoke of three pillars.

Here they are:

Create a Northern Special Economic Zone focussing on the Northern Territory to attract new Australian and foreign investment through simplifying investment rules, streamlining regulation and application processes for major projects, and introducing new tax incentives with the objective of reducing the company tax rate for Northern Territory based companies in five years.

Expand the Ord Irrigation Scheme Stage 3 by providing $10 million to the Northern Territory Government to help facilitate expansion of the scheme from its current 29,000 hectares to 43,000 hectares. This will increase economic output in northern Australia by an estimated $150 million every year, mainly through expanded sugar production and agricultural crops.

Develop twenty-year growth plans for the regional hubs of Darwin, Cairns, Townsville and Mackay. Infrastructure Australia will oversee these plans, based on the successful Mount Isa to Townsville Economic Development Zone supply chain model, developed in collaboration with the private and public sectors. These plans will target key industry sectors and include strategies for increasing trade, investment and employment in these regional centres.

Labor's Dubai Lite policy now has significant similarities with the Liberals' special economic zone policy to turn everything north of the Tropic of Capricorn into a Middle Eastern hellhole of low wages and FIFO ghost towns, but with key differences to wedge Abbott on his Coalition's internal divisions on foreign investment, as the Guardian goes on to discuss. Since the relevant Ord River project is controlled by a Chinese firm, this is just another aspect of the same issue (hat tip: dd from the Cat).

This gives Rudd a platform with which to talk about the policy but narrow the focus of discussion down to areas with which he is comfortable. This is also the case with the Libs' NBN Lite and Gonski Lite policies, in that they can keep bashing Labor on overspending on the last mile of broadband, and can maintain ideological purity despite pouring money into schools by borrowing from David Cameron's Big Society faff to empower local committees to have power over federal money.

A line can also be drawn with Rudd's announcement yesterday to follow Abbott's line in ruling out a parliamentary alliance with the Greens; the difference there is that Rudd retained the flexibility to direct preferences in individual seats, but overall he has given in to policy pressure from the other side. I didn't really understand Rudd's reasoning on that one, it seemed like he got bullied into a corner when it is still entirely possible that we will have another hung parliament. What would be the solution, keep having elections until one side wins? That favours Abbott, unquestionably. If Abbott wants to limit his options then good luck to him, but that was no reason for Rudd to do the same.

It is understandable to want to make yourself a small policy target. It seems that both Abbott and Rudd want the benefits of opposition - this is not a new insight, of course, but the extent to which they are both pilfering from each other's platforms has reached ridiculous levels. Rudd obviously wants this election to be as presidential as possible, so that he can engage in the same tactics as President Obama and achieve a similar victory over an out-of-touch tool of big business. Neutralising most of the differences in the respective economic policy platforms is one way to achieve this, leaving only personality politics and social issues.

The common thread running through both sides' attempts to move to the centre is that both require large amounts of money spent by government, with the differences restricted to bureaucratic style. So, arguably, this is not moving to the centre at all, or at least it is redefining the centre as the Red Centre. This is the dead hand of Julia Gillard, I think, her legacy writ large in daily headlines screaming that this or that side is going to spend taxpayer dollars to fund one or other of the policies she nursed through the processes, or go even further in Gillardesque fashion to announce boondoggles that can't be funded under present taxation arrangements.

Is there going to be a reckoning at some point during this campaign, where both sides are asked how they are going to fund this ratking of policies? Will any of the debates include a serious discussion of raising taxes, or will the prospect of scare campaigns prove too much of an obstacle to rationality? My money is on the craziness continuing.

The Kouk cracks into the Howard economic legacy

Economist and sometime Labor apparatchik Stephen Koukoulas has put the sword to John Howard's nominally impressive legacy of wiping off government debt today.

So how did the Howard government do it? It was very simple, with a three-pronged approach to debt elimination:

- A record high tax take - the Howard government was the highest taxing government in Australia's history.

- Record low spending on infrastructure - the level of public construction work done as a percentage of GDP reached a record low under Howard.

- A large-scale asset sale and privatisation program.

One thing the Kouk doesn't mention is that Howard was only able to raise the tax take and draw down on investment without causing a demand-side recession because Australia was undergoing a long boom, after Keating had instituted a number of reforms to make the country competitive and open it up to global markets. Howard surfed the tsunami that Keating had started, in short (Bermuda shorts?). But that wasn't necessary to say in the article I suppose, no need to run up the score when the win is so decisive!

Why do we care about this now? Because the prospective Liberal front bench in the current election is made up mostly of Howard era recalcitrants, most notably leader Tony Abbott and treasurer Joe Hockey. Their policy on economics - and pretty much everything else - hasn't changed much since then, due to the failure of Arthur Sinodinos to single-handedly develop new policy as he was parachuted in to do.

This dose of economic reality underpins the recent attacks on the Libs for secretly desiring to raise the GST. There has been no significant renewal of the Liberal caucus to flush out the Howardist mindset, so voters can be excused for refusing to believe the protestations coming from Hockey and Abbott.

The Kouk's point about lack of infrastructure investment causing inflation and lost productivity will most likely be lost behind the shouting about tax increases, but it is no less important. The Libs could even adopt the NBN model of public-private partnerships (albeit once removed via bonds) to keep infrastructure investment off the budget balance sheet, if they want to maintain the fiction that they aren't big-government tax-hungry statists. Abbott has shown a willingness in this campaign already to adopt Labor's policies, but that one might have to wait until after the election.

Or, if Abbott really wants to win big, he could embrace the Howard legacy to the fullest. Advertise himself as the man with the Big New Tax that will fund all of the social programs that Gillard introduced but we can't afford due to revenue problems with the budget. Want Gonski? GST goes up to 11%. Want the NDIS? 12%. Want the full FTTP NBN? 13%. Want the baby bonus back and an increase in the dole up to somewhere near the poverty level? 14%. Want a fair dinkum paid parental leave scheme for everyone, not just the rich? 15%. Want the third airport for Sydney and the East-West Link in Melbourne? Hmm, well maybe not.

Joe Hockey could be the new Oprah Winfrey. "You get a per cent! YOU get a per cent!!" Now that's the Liberal Party I remember.

Great Ders of History: The 4.3%

I am fascinated by this graphic from a Business Spectator piece, detailing demographics that a company called Torque is using for their newly established political polling activities. You could see it as a magic quadrant on AOD-9604, or a mini golf course on acid.

To understand this picture, the firm’s methodology needs a bit of explaining. Torque normally specialises in market research for major retailers. If a supermarket wants to know where its customers are travelling from, their ethnicity, socio-economic status, hobbies, tastes or beliefs, the firm produces highly granular survey data that can identify even particular streets of interest with a retailer’s catchment.

For this election, the firm has applied a similar process to polling booths. Based on the swings of the 2010 election, and individual polling booth date released by the Australian Electoral Commission, it estimates that just 4.3 per cent of Australians will determine this election result.

Hmm, that sounds suspiciously like a 47% comment. I would see myself as #6, a Mature Affluent Urban. Apparently I'm not eligible to be a swing voter, because their research shows that only 11 of those 58 demographics are capable of being swung.

I'm not sure this is all that insightful, beyond that aspirational voters in the suburbs and INSERTLEADERNAMEHERE's battlers mostly live in marginal seats. Perhaps the leaders should appear in ads for supermarkets wearing guitars shaped like big red thumbs, or with an arm around a hunky celebrity cook? But hey, the parties have to spend all that money they raised on something. They might as well try something different than just relying on the likes of Hawker, Textor, or Australian Psychic of the Year 2013, Debbie Malone.

At least, now we know how many holes it takes to fill the Albert Hall.

Turnbull and Albanese talking NBN on Lateline

Turnbull wants to punch the Internet in the face. And Albo too.

Malcolm Turnbull is far more knowledgeable about his communications brief than is Anthony Albanese, having not only had years in the portfolio but direct previous business experience during his time at Ozemail, so last night's Lateline NBN debate was always going to be lopsided in terms of detail. Emma Alberici tried to keep things relatively top level - she clearly struggled to do the sums that one gigabit is a thousand megabits - which was always going to benefit Albo. When Turnbull did try to nail the debate on detail, however, he exposed the underlying flaw with the Coalition's NBN policy: that it is based on an outdated view of the Internet which fails to address the needs of today, let alone the much-mentioned future.

I am old enough to have had several careers, one of the early ones being as a technology journalist in Sydney in the late 1990s as the first Internet boom happened. Back then, tech companies would sometimes invite journalists to general briefing sessions to improve their knowledge base, and subtly push their point of view on how a certain part of the industry should be reported. Telstra was one such company who had the funds to do this, and they invited me and many other journos along to some talks that their boffins delivered. I remember Geoff Huston, in particular, giving a presentation on carrying Internet traffic over frame relay, and as I watched something became clear to me: Telstra's strategy was to nobble the Internet.

This was understandable from their commercial point of view. Back then, they pretty much carried the entire Australian Internet across their networks. The AARNET section, pioneered by Huston and paid for in full by the government through the universities, wasn't the problem. Businesses paid through the nose for closed virtual circuits (CVCs, more on those later), so they weren't the issue either. The rapidly growing private version for everyday Internet users at home was the problem. It was threatening to cost Telstra a lot more money than they were making back in revenues in the short term, as they invested in hardware with the resultant profits skimmed off the top by consumer-facing retail ISPs. The more infrastructure they built to meet the influx of traffic demand, the worse their balance sheet looked, the worse their newly floated share price looked, and the worse their executives did in performance reviews. Media pressure was ongoing not to charge monopoly rents on third party usage of their infrastructure. Telstra employs a lot of bean counters, and the beans added up to an inescapable conclusion: the Internet was a cost centre to be minimised as much as possible.

To put the technical situation in readable terms, one only has to look at Geoff Huston's blog, where he wrote a long post about the competing NBN policies which contained this gem, which was used in a different context there but also applies to what I'm talking about:

This always strikes me as such a strange business model. It's like building a slow car by taking a specialised high speed racing car and bolting on additional leaden weights in order to slow it down, all to charge the customer a lower price than the price of the original high speed car!

This was not Geoff's fault of course, but his talk, and the argument we subsequently had about it, firmed in my mind the view that this was an untenable situation. Unfortunately, John Howard's association with the Telstra float meant that he was hamstrung from changing the situation even if he had wanted to. He had a choice between propping up Telstra's share price on one hand, and reforming the telecommunications sector on the other, and he chose the former to the detriment of the industry and consumers. Of course he was going to prefer succouring those middle class suckers whom he conned into buying Telstra shares. This policy of abandoning any thought of serious telco reform to protect Telstra shareholders continued all through Howard's long reign, and has become ingrained in the Liberal Party's culture.

It was only with the advent of the NBN concept that a solution to this impasse has been found. I will cover the NBN itself in more detail in another post, but for the purposes of characterising Turnbull's argument in the Lateline debate last night, I related the previous history to illustrate where he is coming from when he starts talking about 1 Gigabit per second CVCs costing $20,000 per month. Turnbull knows his stuff, but his mindset came from that era in the late 1990s when the Internet was seen as a cost centre to be squashed into a box devised by serious telcos who were embarrassed to have to deal with such riff-raff.

John Gilmore once said the Internet sees censorship as damage and routes around it, but telcos see the Internet as viruses and try to punch it in the face as if they are Agent Smith and the Internet is Neo. Turnbull is on the side of the losers in that debate, and it was lost twenty years ago. The copper wires of the POTS are those leaden weights that Huston talked about, and we as consumers demand to drive those fast cars at full speed whether the Libs like it or not.