One of the ongoing battles being fought at the moment by the major parties, and for that matter the Independents, is to explain what actually happened on Tuesday. You know the competing narratives already — consensual new paradigm politics versus illegitimate, rainbow coalition government backed by sell-out independents.
A key piece of information emerged this morning from Lenore Taylor and Laura Tingle, that the Coalition offered a much larger package of regional investment — up to $1 billion a year — than Labor to the rural Independents. Oakeshott and Windsor — for reasons that we can still only speculate about — plainly felt uncomfortable enough about the offer to reject it. The Coalition offer appears to have been new spending, while much of Labor’s $10 billion package is a reversioning of regional expenditure and a reallocation of existing funding from other programs, which kept the fiscal impact consistent with Julia Gillard’s promise — which has received little attention — that her negotiations wouldn’t change the Budget bottom line.
$1 billion of course was also what Tony Abbott offered Andrew Wilkie for Hobart Hospital, but like his independent colleagues, Wilkie was concerned about the provenance of the funding. Bob Katter’s astonishment at that offer, and his joke about what he could expect to be offered for his vote, appears to have been borne out.
This significantly changes how we view these negotiations and the outcome. The party that had portrayed itself as the guardian of fiscal rigour was prepared to spend a lot more money to secure the support of the Independents than the party of — so we were told — waste and mismanagement. But rather than take the biggest barrel of pork, Tony Windsor, Rob Oakeshott and Andrew Wilkie all — seemingly — opted for the more fiscally responsible approach.
Such responsibility, of course, has been portrayed by some media outlets as either evidence of stupidity or of inherent pro-Labor bias, that — to use a wonderful phrase by Imre Salusinszky today — they may not have been “fully impartial” in their deliberations. Perhaps they should have recused themselves.
The Coalition’s incessant reiteration of its superior fiscal credentials was undoubtedly effective before and during the campaign. It was founded on a brazen lie, that the stimulus package was unnecessary, but found traction with voters when encapsulated in folksy comparisons between government and household budgets. Its apparent willingness to spend whatever it took to secure the votes of the independents — an approach that echoed John Howard’s favoured technique of using increasing tax revenues to purchase electoral support — suggests the commitment to fiscal rigour doesn’t run particularly deep.
On the other hand, Julia Gillard appears to have taken a gamble that fiscal rigour could be a positive in her negotiations with the Independents. Perhaps she was emboldened in that course by Wilkie, who liked better the smaller amount of money that came via an established process, than a windfall offered by the Coalition. It was still a risk, and she would have been the target of harsh criticism that she was unwilling to do enough to secure victory if Oakeshott and Windsor had backed the Coalition.
At least part of this counter-intuitive outcome — aren’t all Labor governments wasteful, aren’t all bush MPs hopeless pork barrellers? — can be traced back to Labor’s realisation in the 2007 election campaign that demonstrable fiscal rigour could be an electoral positive, most famously summed up by Kevin Rudd’s famous phrase “this reckless spending must stop”.
Tony Abbott has tried to appropriate that phrase this year, uttering it on several occasions. It seems that when it counted, the Independents were more ready to believe Labor’s budget story than the Opposition’s. That the latter tried so flagrantly to throw billions at the Independents seems only to have reinforced the impression that the Coalition talks a big game on fiscal rigour but doesn’t quite measure up when things get tight.
Either way, it seems the habit of parsimony that our major political parties have acquired around elections is spreading, and that’s no bad thing at all.
I guess they don’t know exactly what the full offer to BobKat was.
Perhaps when he retires and writes his memoirs. 🙂
It’s a fine line Bernard; parsimony on short-term distortionary vote-buying during elections may be a good thing, but excessive parsimony on public infrastructure and other public goods is no good at all (cf Sydney’s public transport or lack thereof), and politicians have the maximum incentive to announce and commit to public-good spending during elections.
Nothing could demonstrate a lack of fiscal riguor more clearly than the NBN, a billion dollar initiative, with no business plan and no cost/benefit analysis.
Talk about “throwing billions” at the independents.
Moreover, there seems to be an expectation that the bush will get “priority” when, as is being pointed out, that will simply drive costs up.
The NBN will not fly.
In the urban areas, ‘Wireless’ is, and will prove to be, very competitive, especially with cost.
If the big cities wont take up the NBN, subsidising ‘the bush’ will become even more expensive.
“Perhaps they should have recused themselves.”
Bwahahaha
I guess we won’t see this argument made by the Orcs of Oz, but hey, that’s why we read Crikey.
Oh, and thanks for the heads up about Tingle’s piece in the AFR today too, Bernard. I spent my own $3 and wasn’t disappointed.
BTW, JJ, if you think wireless broadband is so good, you need to visit my mate in Newcastle…he’s tried ’em all, and they’re all pretty crappy. The basic problem is physics, so maybe you could acquaint yourself with the inherent limitations in the wireless bandwidth before spruiking stuff you know nothing about.
Just sayin’.