Senate voting reform

September 11, 2013 Comments off

With the possible Senate victory of the Motoring Enthusiasts on 0.5% of the vote, and the Sports Party on 0.2% of the vote, there has been a growing call for reform to the way that we vote. One of the more sensible suggestions doing the rounds is that people should have more control over their preferences, for example by being able to preference parties “above the line” on the Senate ballot paper. Perhaps. That is certainly something that should be considered.

Another idea being promoted is that small parties should be required to achieve 4% or 5% of the vote before they are allowed to sit in parliament. The rationale is that unless a party can show they have serious public support, then they shouldn’t be there representing the public. This argument fails for two reasons.

First, there are 226 people in the federal parliament, meaning that each politician makes up 0.44% of the total. The idea that a party doesn’t deserve 0.44% of representation because they only get 3% of the vote is an absurd example of Orwellian double-talk. If we are to exclude the micro parties, then the 15% of people who prefer those options will be represented by nobody, while all the big parties will be over-represented.

Second, by making the 1% and 2% parties irrelevant it becomes much harder for those small parties to ever grow into bigger parties, creating political stagnation. The system will be limited to the current big parties, only interrupted by an occasional billionaire. The Greens currently get about 8% of the vote, but go back 20 years and they were a 2% party. Their occasional successes helped them to build a profile and grow, and provide more political diversity.

The Senate system is certainly strange, and it’s reasonable to look at reforms that help make preferences more transparent. Or better yet, the new parliament should re-think our absurd attachment to compulsory voting. Forcing people to vote devalues the voice of people who carefully consider their vote, annoys people who don’t care, leads to lower quality public policy debates as parties appeal for the all-valuable ignorant vote, ensures that some segments of the voting public can be taken for granted, results in many informal and donkey and joke and random votes, while being a pointless infringement on free choice. For no benefit.

If we are going to reconsider the way we vote in Australia, voluntary should be on the table… but having an arbitrary cut-off that biases the system against small parties should be an absolute non-starter.



Senate fun’n’games

August 20, 2013 1 comment

I have been distracted with Senate preference flows for the last two days, and noticed a few things. Many people have talked about how Pauline Hanson could win in NSW (with micro-party preferences), and Katter might win in QLD (with Labor preferences), and the Nats might get the forth spot in WA (with Wikileaks preferences). That would shift Senate balance of power away from the Greens.

It should be noted that with Palmer and Labor preferences, the Greens are still a very good chance in all states. If they are lucky, it’s actually possible the Greens could *increase* their representation.

But there are some other interesting cases.

Family First have picked up some nice preferences in South Australia, Tasmania and Queensland and have a chance of being back in parliament. The Shooters & Fishers Party look like they have a good preference flow in WA and could be fighting with the Nationals for the last spot. Fishing has a chance in Queensland. And even the Democrats are in with a chance, with a good preference flow in Victoria. There is also a slim chance that Labor might only get one Senator in QLD, with their 2nd spot going Green on the back of Palmer preferences. For the LDP, there is a chance in Queensland and Tasmania, but they both require a lot of luck. The wonderful Rachel Connor also has a mathematical chance in Queensland, but that requires even more luck. But we can dream.

Full state by state analysis is below…

Read more…

2013 Senate race

August 17, 2013 Comments off

Most interest in the federal election has been on whether the Liberal-National Parties (LNP) or Labor will win control of the lower house and form government. That makes sense. But the race for the Senate is in many ways more interesting, unpredictable and has very important consequences.

On current polling, Tony Abbott and the LNP will win government, but without the Senate they will not be able to pursue their agenda. At the moment, the Greens have balance of power in the Senate and they are openly hostile to the LNP. However, that could be about to change.

Read more…

2013 budget reply speech

June 5, 2013 1 comment

I don’t normally get the opportunity to give a budget reply speech, but this year the ALSF invited the Australian Taxpayers Alliance to address their annual budget seminar, so I was given the chance to rant to some eager young politicians of the future. This is what I prepared for the talk…


The choice

In the coming decades, policy makers will need to make a choice between embracing the green-left policy of higher taxes, allow our country to slowly go bankrupt, or undertake difficult reforms to health and pensions that are politically unpopular. Those are the only choices. Few people on the centre-right will admit it now, but the truth is that most politicians (including the “good” ones) are probably going to choose a mix of higher taxes and eventual bankruptcy.

For political wannabes, this is a killer question. It goes straight to the issue of why you want to be involved in politics.

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A thought experiment about welfare

June 3, 2013 Comments off

Imagine a free-market economy with no government welfare. Some people earn high incomes and others earn low incomes. Now consider that some kind hearted bureaucrats come along and want to introduce a government policy to help the low-income earners. How should they do it? Let’s consider two options.

Option A is where the government introduces a very specific payroll tax that only applies to businesses that employ low-income earners. The lower the employee income, then the higher the payroll tax. Businesses that only employ high-income earners do not have to pay anything. Obviously, this tax will hurt businesses that concentrate on low-skill activities (cleaners, retail sales) but it will not hurt businesses that concentrate on high-skill activities (law firms, accountants). Because of the tax on low-skilled businesses, some of those businesses close down, others decide to employ fewer people, and others decide to shift towards high-skill activities… so some low-skilled workers lose their jobs.

The money raised from this tax is then paid as a subsidy to low-income earners, including to people who have lots of assets and people who are from rich families. While the tax caused some low-skilled people to lose their job, those people do not receive any of the subsidy. The subsidy only goes to people who have kept a low-income job.

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Australian election minor party guide

February 16, 2013 3 comments

While the federal election is still seven months away, consideration of another election got me delving into an old hobby of mine and checking up on the many small political parties that sit on the fringe of the political game. Most people don’t know most of these parties even exist, and that’s not likely to change soon… but as a way to procrastinate from what I should be doing (my PhD) I thought I’d offer a very short guide about the smaller parties.

For the sake of this article I’m going to ignore the big three players — the coalition (including Liberal, National, Country Liberal & Liberal National Parties), the Labor Party, and the Greens. If you haven’t heard of them before, then this article probably isn’t for you.

I’ve split the remaining parties into three groups. First the “big little parties” which round out the top ten political parties based on the 2010 Senate election plus a few others that are likely to be top ten this year. Then there is the “micro-right”, and finally the “micro-left”. I hate the false “left-right” dichotomy, but unfortunately that’s still the way most people consider politics.


Family First — first came to attention with electoral success in South Australia, FF really came to national attention when they got a Senator elected in 2004. Though they now have no federal representation, they did score 2.1% of the vote in 2010 which gave them fourth place. The party is generally pidgin-holed as a Christian party, but under the leadership of Bob Day they have tried to shift their focus towards a more small government agenda, while keeping a fair amount of Christian social conservatism. This means they are slightly differentiated from the many “big government conservative” parties discussed below. Not a bad choice for conservative “tea party” types.

Sex Party — the “anti Family First” party came onto the scene in 2010 and engaged Family First about moral issues. While not getting anybody elected, they did manage 2% of the vote which put them just behind FF in fifth place. The party primarily promotes civil liberties and a socially progressive agenda, as well as gender quotas in parliament, but they haven’t been drawn too much into economic debates. Sometimes seen as an economically safer version of the Greens.

Liberal Democrats (LDP) – Australia’s only libertarian political party has been around since 2001 but has only had electoral success at the local council level. The party received 1.8% of the Senate vote in 2010 which put them in sixth place. The LDP is clearly the most free-market party in Australia (the only party to promote real spending cuts), as well as being one of the most socially progressive (marijuana legalization and gay equality). The only choice for libertarians, classical liberals and Ron Paul types.

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Categories: Uncategorized

Treasury’s non-modelling of the stimulus

February 1, 2013 Comments off

Late last year I published an article with Agenda (the public policy journal of ANU) that critiqued the Treasury “modelling” (sic) of the Rudd government stimulus that followed the global financial crisis. It is an article that I started writing a long time ago, but sat in the “to do” pile for too long.

My main point was that the Treasury approach was hopelessly inadequate, a point that is abundantly clear to any economist who glances at their attempt, and has been readily admitted by some Treasury friends. As I wrote in the article:

“The biggest problem with the Treasury model is that because it misunderstands the issue of international crowding out, it drastically underestimates the impact on net exports. In addition, it entirely ignores the issues of domestic crowding out, monetary policy responses, and the costs of repaying the debt. While its estimate for the private savings response to the stimulus is at the low end of the range, this is the least of the problems.

“The ignorance of open-economy macroeconomics suggests that Treasury has neglected much of the advances made in macroeconomics over recent decades, and its strange assumptions on domestic crowding out and private savings response show that it has forgotten much of its own research. As Harvard economics professor Robert Barro said in 2009 when the US was debating its own stimulus policies, ‘The financial crisis and possible depression do not invalidate everything we have learned about macroeconomics since 1936’ (Barro 2009).”

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