Journalists are meant to eschew horse race metaphors these days but down here in Melbourne it’s been difficult to escape horse racing fever.
As well as providing the date for the Melbourne Cup, the first Tuesday in November is notable for being the day that the Reserve Bank (RBA) announces interest rate decisions.
For the past six years, the RBA has made interest rate announcements on Melbourne Cup day. Yesterday, however, the RBA held rates steady, despite many economists expecting them to be reduced, citing a slightly more balanced international outlook and the impact of recent interest cuts still in the pipeline.
"While the impact of these changes takes some time to work through the economy, there are signs of easier conditions starting to have some of the expected effects," the RBA’s statement read.
More interest rate cuts seem likely, if not in December, then perhaps in the new year, in part to try and kickstart the housing construction sector as the mining investment boom finally peaks.
Interest rates were the only economic issue on people’s minds yesterday. The thorny issue of policy costings has also reared its head, in the wake of revelations that Treasurer Wayne Swan’s office leaked details of costings the government had commissioned on various Coalition policy promises.
These leaked costings — compiled by the Treasury at the request of the government — suggest that the Coalition’s various commitments will lead to extra business taxes of around $4.6 billion, although these will be balanced by the abolition of the mining tax and carbon pricing. The leak landed with Fairfax’s Peter Martin, who points out that the net result will be a rise in taxes for small and medium-sized business, with only big mining companies ending up better off.
The Coalition is predictably furious, with shadow treasurer Joe Hockey writing to Treasury Secretary Martin Parkinson to complain. Wayne Swan and Labor, meanwhile, have been taking potshots at the Opposition, pointing out that they could get their own policies costed by the new Parliamentary Budget Office at any time. Fairfax’s Phil Coorey also reminds us that the Coalition routinely commissioned Treasury costings of Labor policies when in government, which it then used to attack Labor’s policies.
The costings blow-up is a sign that the political debate is moving beyond the carbon tax. ALP federal secretary George Wright thinks we have entered the "post-carbon" phase of contemporary politics. Crikey’s Bernard Keane thinks it might be closer to the "death of conviction politics". However you characterise it, clearly there will be a renewed focus on economic policy. This poses risks for the Coalition, because it has a woeful record on costing its own policies since losing government.
One of the problems for the Opposition is that it has never been particularly good at formulating coherent alternative policies. Under Abbott, the Opposition has preferred simple slogans and cheap rhetoric to detailed costings and substantive research. When the last election was fought in 2010, the Coalition gave us a platform that was about "stopping the boats" and "ending the waste", but which didn’t bother to explain how policies would be paid for.
On fiscal policy, for instance, the Coalition has consistently argued that it would spend less and tax less than Labor. But it has never managed to put a credible set of figures before the public — presenting its election costings only 48 hours before the vote back in 2010, costings which turned out to be billions of dollars in error. It hasn’t rushed to set matters straight since then.
Carbon policy is another example where the Coalition has struggled to put forward a credible alternative policy. The Coalition’s so-called "direct action" policy on carbon is based on dubious soil science and laughably optimistic costings. According to the Australia Institute, it may end up costing taxpayers $11 billion a year in payments to polluters, and probably won’t work to reduce emissions either.
The Coalition’s paid parental leave scheme is one policy where we have a bit more detail. In many respects it’s a more generous and comprehensive scheme than the government’s — so generous, in fact, that new mothers earning up to $150,000 will get six months of their salary paid for by taxpayers.
Just how the Coalition manages to square its beliefs in "ending the waste" with a commitment to paying well-off mums an astonishing $75,000 in government welfare is one of the great mysteries of the current Parliament. If Liberal politicians were upset about the cash splash of stimulus payments in 2009, what must they think about a government prepared to give highly-paid mothers more than $5,700 a fortnight, for six months?
I could go on. On the National Broadband Network, for instance, Malcolm Turnbull has been claiming that the Coalition has a fully costed policy ready to be released. Despite this claim, he has not actually released any policy costings. Indeed, as Delimiter’s Renai LeMai has documented, there seems to be a degree of flip-flopping about whether the Coalition will complete a cut-down version of the NBN, as Turnbull has suggested at various times, or "pause" it, as Tony Abbott said recently. The NBN was a crucial factor in the loss of the 2010 election, appearing to sway independents Tony Windsor and Rob Oakeshott towards Labor, and also costing the Coalition votes.
The policy confusion is a symptom of a media-driven strategy that puts Abbott front and centre, in preference to allowing front-benchers to prosecute their policy agendas against their Labor counterparts. The Coalition has consistently muzzled its shadow ministers outside a few key portfolios like Scott Morrison in immigration, forcing them to stay on message on the talking points of the day. That’s done Labor some unexpected favours, given that the government has many struggling ministers.
Mind you, Labor has its own pitfalls. Some non-performers, especially among the factional hacks occupying positions in the cabinet, are a deadweight on Julia Gillard.
This week, for instance, we saw yet another scandal engulf hapless Agriculture Minister Joe Ludwig. Last night’s Four Corners uncovered another horrifying live export scandal, with thousands of sheep cruelly butchered in Pakistan. Ludwig gave a typically leaden display in interview with Kerry O’Brien, just weeks after painting himself into a corner over the Margiris super-trawler in Tasmania.
Another front-bencher causing Julia Gillard trouble is an old adversary, Energy Minister Martin Ferguson. The minister known for his steadfast advocacy of nuclear energy has a history of causing Julia Gillard embarrassment, but his decision to sue independent MP Rob Oakeshott for defamation was impressive, even given Ferguson’s advanced talents for self-destruction.
The defamation suit emerged after Oakeshott made innocuous comments which angered the Energy Minster in a newspaper article about electricity market reform. A surprised Oakeshott pointed out that the only direct quote attributed to him was "We must have another look at it". At Labor headquarters, cooler heads eventually prevailed. Someone must have pointed out to Ferguson that the government actually relies on Oakeshott’s vote to stay in office. The lawsuit was duly dropped.
As the Ferguson defamation affair suggests, the government could do with a cabinet reshuffle pretty soon, even if factional warlords like Ferguson will be difficult to dislodge. There are some conspicuously poor performers on the Labor front-bench, including Ferguson, Ludwig and Jenny Macklin.
Just at the moment, though, the government appears happy to hold tight and see if the improving opinion polls will start to force errors from a newly skittish Opposition. As we observed last week, the narrowing gap in the polls is driving a recalibration of the federal political narrative. After all, Labor reasons, with Tony Abbott starting to struggle, there’s always the possibility that the Coalition might return to factional infighting, or that Abbott himself might implode.
The Coalition’s anti-carbon strategy has clearly failed. Voters hated the carbon tax in the abstract, but now that it’s here and Whyalla hasn’t been wiped off the map, the electorate seems to have moved on. Attacking the carbon tax will still remain an article of faith for the Coalition in the run-up to next year’s election, but something more than relentless attacks will be required. Properly costed policies would be a good start.
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