23
Apr
2014
[Clive Palmer] has flagged withdrawing his support for repeals of the mining and carbon taxes if “direct action” is not extracted and debated separately from the budget. Keeping those taxes would seem unlikely so expect the government to call his bluff if it comes to it.

Mark Kenny, The Age

Before his party colleagues even assumes their seats in the Senate, Queensland mining magnate Clive Palmer is positioning himself as the nation’s opposition leader. He has now joined Labor and the Greens in opposing the Liberal—National coalition government’s plan to introduce a package of measures to reduce carbon dioxide emissions.

Prime Minister Tony Abbott’s ‘Direct Action’ policy was positioned as the contrast to the previous Labor government’s unpopular attempt to introduce a market-based carbon pricing mechanism. But it has come in for heavy criticism as being expensive, and unlikely to achieve its stated objective. Palmer agrees, and has boldly declared Direct Action to be ‘hopeless’ and ‘gone’.

As Mark Kenny reports, the government does not seem particularly troubled — Abbott’s environment minister Greg Hunt suggested that Direct Action, as an expenditure measure, would be bundled into next month’s budget. By modern convention, opposition parties do not block supply bills — those that enable the government to appropriate money — so it seems unlikely that Direct Action will fail in the way Palmer intends. So, Palmer has stepped up his threats to the government, publicly floating the idea of blocking legislation to repeal the existing carbon pricing mechanism and the mineral resources rent tax (both introduced by the previous Labor government).

Given that Palmer has been a vocal opponent of both the carbon and mining taxes, it seems inconceivable that he would now backflip so spectacularly. Certainly, many of his supporters would be aghast. Still, holding the balance of power in the Senate leaves Palmer in a powerful position. While he might be forced to retreat on environmental policy, this may only provoke him further. The government has much on its legislative agenda — and Palmer will be sure to use his position to extract as much blood as possible.

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22
Apr
2014

Big government, small government, and value for money

No one enjoys paying taxes. But there is a large community appetite for governments to pay for a whole bunch of services. These conflicting views are perhaps most stark in the United States, where Republicans routinely lambaste their Democrat rivals as ‘high taxing’. Meanwhile, Democrats try to horrify voters with stories about all the publicly funded programmes that Republicans would axe.

In practice, of course, there is a tradeoff between what voters will stomach in terms of tax take and what they the minimum acceptable level of government service provision. But the bigger question is not about the quantity of taxation and spending, but the quality of government. And once again, it is the United States that provides a brilliant case study.

In an analysis at WalletHub, John Kiernan compares the tax take in each state with the quality of services funded. And as the map illustrates, there is no clear guide to which political model — small government or big government — performs better. Texans, for instance, get a good return from their low tax rate. But Kiernan’s analysis also shows favourable results for high-taxing Massachusetts. Summarising Kiernan’s work, Vox’s Matthew Yglesias writes that:

… you can make liberalism work well and you can also make conservatism work well. But you can also make either general approach work poorly.

Ideology can make for occasionally entertaining political squabbles. But it is not a good basis for competent administration of public policy.

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17
Apr
2014
Politically, Baird will not be a great change from O’Farrell. His reputation is that of a cautious man with an engaging personality, wary of ideological passion, not committed to any faction while clearly on the moderate wing of the party.

Michael Hogan, University of Sydney

No one could have predicted this week’s events in NSW politics. Barry O’Farrell looked secure in his position as the state’s Liberal leader and Premier. But his reign came unstuck over a bottle of wine that he had ostensibly ‘forgotten’, leading him to lie to an anti-corruption inquiry. A day after his testimony, as evidence mounted that he had indeed received an expensive 1959 Grange vintage, O’Farrell fell on his sword. New South Wales was plunged into political chaos.

Today, O’Farrell’s Treasurer, Mike Baird, became the 44th Premier of New South Wales. What does this mean for Australia’s most populous state? According to Michael Hogan, not much. Baird is a politician much in the same mould as O’Farrell: he does not seem ideologically driven, and is a relative moderate among Liberal ranks. While Baird is more religious and socially conservative than O’Farrell, he is not someone that bangs the drum for his Christian values. Hogan does not expect this to change now that Baird has inherited the top job.

Still, Hogan foresees challenges for the NSW Liberals. Baird is notionally aligned to the party’s left — as is his new deputy, Gladys Berejiklian. Both were elected unopposed to their positions. But that does not mean there will be no dissent. O’Farrell’s leadership was unchallenged having delivered a stunning Liberal victory at the last state election. Baird and Berejiklian do not have that same powerful mandate. Conservative Liberals may seek to undermine Baird’s authority, pursuing their own agenda against their leader’s intentions. 

Next year is an election year for New South Wales, and the Liberals remain in poll position to retain power — the state’s Labor party remains too vulnerable after its own corruption scandals. But as Hogan notes, the Liberals should probably expect to see their electoral base eroded significantly at the ballot box. With both major parties tarred with the ugly brush of corruption, the electorate will now be wary of both sides of politics in the state. The big winners could be independent candidates (particularly in rural and regional New South Wales, at the expense of Liberal-allied Nationals candidates). Should next year’s election prove unexpectedly close, that could deliver a highly unpredictable outcome that keeps both the Labor and Liberal parties on their toes.

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