Politics – Thomas the Think Engine

Bring back core and non-core promises

The election is no longer “on the horizon.” It’s close enough to smell the sausages. Everyone involved in politics is working hard, trying to get us to listen, trying to get us to believe, trying to get us to vote.

Most of what they are saying is lies. Or to be a little kinder, false predictions about what they will do in the future.

Screen Shot 2016-06-23 at 9.56.44 PM.png — Labor’s policy list

Labor has set out 100 positive policies on its website.They’re really quite interesting and I recommend having a look.

But will it do them all? No way.

Take its plan to cut capital gains tax and negative gearing. These are very bold reforms any party would struggle to get through the Senate.

And – despite recent reforms – the coming Senate is going to be a particularly mixed one.

Psephologist Anthony Green predicts eight Greens, three Nick Xenophon Teamers, either Glenn Lazarus or Pauline Hanson, Jacqui Lambie and an associated senator, plus probably one other odd-bod from Tasmania.

It’s a volatile mix that would wreak havoc on the most carefully-planned legislative agenda and laugh heartily at the very idea of a mandate.

And there is no guarantee of a mandate, for anyone. A hung parliament is quite possible, with independents and Greens set to make good runs in a range of lower-house seats. Nick Xenophon Team is a huge factor because it is competitive in some classic Coalition seats in SA. One expert tips six cross-benchers.

The odds of a hung parliament are 4:1 against and the closer the two major parties get, the better the chance a couple of independents (Yes Tony Windsor, I’m thinking about you) could have the parliament in the palm of their hands.

What all this means is that words spoken before the election – however earnestly meant – cannot all come true.

Why don’t politicians admit that?

Instead of having broken promises littering the field of battle, creating the impression “they’re all liars”, why not explicitly admit some outcomes are state-contingent?

They could make promises contingent on election outcomes:

“If we win a Senate majority we will pass all our policies. If not we will make health and education our top priorities.”

Promises contingent on Budget outcomes.

“If company tax revenue rises above $100 billion, we will fund a new hospital in Launceston.”

Or promises contingent on other promises.

“If we can get our negative gearing reform bill through, we will fund the building of submarines in South Australia.”

Politicians demur on hypotheticals for a reason – adherents of the more cynical schools of political communication will insist the complexity is too high for voters. And I’m sure the first few weeks after adopting this approach would be full of mocking.

“The Leader of the Opposition is a maybe man, a possibly politician, an if-then individual,” the PM would jeer. “He’s built an escape route into every promise!”

Perhaps most politicians would wilt immediately under such ripostes – and the bad press that would follow. Gallery journalists – whose expertise in reading the tea leaves might be slightly less valuable in such a scenario – might be unwilling to give the approach a decent chance.

But maybe, just maybe, a contrast would eventually become apparent between one side explaining their priorities and the risks and contingencies while the other side baldly claims things that can’t all come true will all come true. It just takes one politician floundering when asked, “But what will you do if you don’t control the Senate?” for that to become the favourite question of press-packs everywhere.

If so, the pressure for truth-telling would ultimately fall on the party that over-simplifies their plan. If that party won an election and then failed to keep their promises the consequences would likely be harsher, given the good example set in advance.

There would still be plenty of opportunity for broken promises. Sometimes politicians simply do the opposite of what they say they will, as Tony Abbott demonstrated after the last election.

But without the cover of all those things promised that were only really deliverable under very particular circumstances, the flat-out lies would be much easier to see.

Could this be a better way to pay politicians?

Australia’s 824 politicians are paid well.

The lowest paid MPs are certain members of the ACT legislative assembly, who get $132,800.On the other side of Canberra, federal parliament is even more lucrative. The lowliest federal backbencher* makes $195,130. The highest paid is the Prime Minister, who makes $507,000.

State MPs seem to get about 70 per cent of the federal pay. The Premier of NSW gets $358,853 .

The following table is taken from a recent report in parliamentary salaries in Victoria. Since then, pay rates have been hiked for inflation once or twice.

Politician pay is a fraught issue. The annual pay rises create a furore in the media, especially during times of budget stringency. It got me wondering if there might be a better way.

What if politician pay were anchored to something that we can all believe in? What if politician pay was somehow linked to how well the rest of us are going?

This could be an effective way to not only manage the PR aspect of politician pay rises, but to properly align their incentives with our own.

Here are some anchors we could use, for starters.

Average annual full time earnings (for the employed) is $78,821, GDP per capita is $67,218. The median wage is $60,112, and the minimum wage is $33,327.

There is a case to be made for paying politicians well, in order that they are not swayed in their duties by fat brown envelopes, or promises of lucrative employment after their retirement from public life. Generosity also prevents the other problem you get when you pay peanuts – you get the homo but not the sapiens.

So while it is tempting to say that politicians should be on the median wage, it may not be practicable.

Instead, a bundle of all of the above might make a sensible balance. If you add the four categories together, and multiply by 0.8, you get $191,580 – a number that roughly approximates current politician pay.

You could easily argue, at this point, that this pay structure is entirely mis-focused and materialistic, and if we’re going to have performance pay for MPs it should be linked to a far broader basket of KPIs, including a rating of the health of the great barrier reef, carbon emissions per capita, spotted numbat populations, ambulance waiting times, NAPLAN testing results in western Sydney, etc, etc. I’d totally support all of that.

At this point, it’s worth mentioning that I really do not think any sort of MP pay reform is worthwhile without sorting out entitlements, which are absolutely arcane and create a culture where MPs are disproportionately focused on getting the public to pay for bookshelves and travel allowances.

Is this a good idea? What would you suggest putting in the mix to align politicians’ incentives with our own? Leave a comment below!

* Please feel free to use the comments section to nominate precisely who you believe is Australia’s lowliest federal backbencher.

Victoria is cold on the Liberal Party – what can they can do about that?

The state government of Victoria lost power this weekend. The election saw their narrow majority reversed, and by losing government after just one term in office, they set a record. No other government has done that since 1955.

Since Jeff Kennett’s reign as premier from 1992 to 1999, the Coalition’s appeal to the electorate has been slight. They’ve lost elections in 1999, 2002, 2006 and 2014, some by big margins. They won in 2010 by just two seats.

The state is lurching away from the Coalition. (The Coalition is an alliance between the large city-based Liberal Party and the smaller, country-based National Party).

The Liberals can console themselves with a decent-looking result in first-preference terms (766,000 votes to Labor’s 820,000 on the count so far). But there are plenty of voters that do not put Labor first whose vote ends up with them thanks to the magic of preferential voting.

The Liberal party do not have an equivalent. The Nationals operate mainly in different areas to the Liberals and are in any case a smaller, less popular party. The Greens took 11.2 per cent of the vote in 2014, to the National Party’s 5.6 per cent.

The whole state is lurching away from the Coalition. It’s not just the Greens. The National party are losing seats to Independents all over the bush.

Faced with this remarkable recent record of underperformance, The Liberal party can either follow the population or fade into irrelevance. They need to tack to the centre to become believable on key issues for voters at state elections, like schools, transport and hospitals.

The choice of a new leader will be essential in remaking the party. In some ways, the selections on offer look good: An man in his 30s of Ukrainian descent or a prize-winning lawyer known for his pro bono work . But Matthew Guy is a former staffer to Jeff Kennett and an unpopular planning minister while Michael O’Brien is a former adviser to Peter Costello.

These two are the front-runners for Liberal leadership. If you keep building a new house out of the same bricks, there’s a limit to how much better you can make it. And when you can narrow down your field to two senior cabinet ministers so soon after a crushing defeat, it indicates a “steady as she goes” attitude. Perhaps the Liberal party is unable to reform itself, and the voters will have to do it for them.

Jocks not nerds: Why dumb politicians may be better.

The era of the warrior king was awe-inspiring. The leader that rode his troops into battle, survived arrow puncture wounds and chopped off a dozen enemy heads really earned the right to sit on that throne.

Richard iii shortly before his reign ended, at the Battle of Bosworth — Richard III – shortly before his reign ended – at the Battle of Bosworth

But over time, it became clear that the two skill-sets – sagacious governing and vigorous neck-hacking – were rarely found in the same individual.

We saw specialisation and gains from trade.

Kings paid knights to do their warring for them while Knights benefited from having a bookish type on the throne – someone inclined to spend hours contemplating the merits of the laws, rather than lifting heavy rocks.

So we come to modern politicians. There’s a lot of complaints that these people are “too dumb”.

But is that fair? Since when did we expect the parliament to do the heavy thinking to come up with new policies?

That’s why we have the public service, the think tanks, the vast commentariat. There is no shortage of good ideas in Australian politics. Take today’s call for the end of negative gearing, for example. That idea doesn’t need to be invented, just implemented.

What we need in parliament is people who can make parliament work.

We need coalition-builders. We need people other people are happy to follow. We need people who can bolt together a coalition of interested parties to make something happen. We need leaders.

If your community is chock-full of bookish types, then they may be delighted to be led by a former university professor.

But will that inspire and delight the community at large?

Recent evidence says no.

I’m not saying the level should be brought down that low, mind you. The politicians still need to be able to tell a good idea from a bad one.

The Dunning Kruger effect, wherein a person may be too stupid to tell they are stupid, is an ever-present risk among candidates for parliament. Many of them self-select, thinking they are the first person who ever wanted to take “common sense to Canberra”.

The structure of the political system also influences who you should vote for. If one person will rule, you want a sensible centrist. But where there’s lots of negotiation, you’re better off sending a hardline crazy person. (This may explain the Senate.)

There’s a roughly translated quote from Plato:

“Those who are too smart to engage in politics are punished by being governed by those who are dumber.”

That may have been true once. But these days we are barely governed at all. Years pass without any real reform, while reams of sensible but bold recommendations printed on glossy A4 blow emptily round the inner-city streets of Canberra.

So don’t be afraid to vote for a Jock. Someone who seems smiley and friendly and very popular, if a little bit dim. Someone whose electoral success is not explained by a dazzling academic CV. They might be the the exact politician we need.

Political narratives – have politicians learned anything from HBO?

Political commentators pay major lip-service to the importance of having and using a “narrative”.

The tricky knack of a political narrative (Bernard Keane)

In government, a mantra is not enough to control the narrative (Annabel Lukin)

Political Narrative (Michael Cooney)

Australian Politics: A lack of narrative (Michael Tons)

Talking about narrative goes deep into policy making circles:

“Narratives are stories, in whatever form they take – oral, written or visual. Conventional narratives in literature, the theatre or the cinema have a beginning, middle and end. Good ones provide drama, arising from a predicament that ensnares the principal character; they have plenty of action – the steps the character takes to escape the predicament – with unexpected plot twists and complications thrown in; and there is a resolution, culminating in the achievement of a visionary aspiration or objective. Economic narratives have some similarities.”

– Dr Ken Henry, former head of the Treasury, in a 2007 speech to the Curtin Policy forum. Surprised?

All this talk about narrative in politics has coincided with what many people agree is a golden age of story-telling in the ascendant medium of television (1, 2, 3, 4)

But I see no sign of politicians learning from it.

Our leaders scarcely ever admit to watching the box. They prefer to project an image of someone working tirelessly for their constituents. Why have they spurned the chance to learn from TV?

Politicians fetishise staying on message. That – they believe – is the only way to get voters to hear the one thing you want them to hear. It is true only if you assume that people won’t be listening, and it is a catch-22.

Would you tune into a show where the main character just repeated the same lines, week-in and week-out?

What about a show where they never admitted they were wrong? Never grew as a person? Never got into trouble and squeaked back out?

Our political characters all claim to be good people from ordinary backgrounds, and play down their weirdness. It’s immensely boring.

They end up with a script that’s all issues, no characters. But (most) humans don’t care about issues in the abstract. We are drawn to characters.

In the HBO western Deadwood, the opening credits are all about a tough but fair sherriff called Bullock. But after a few episodes Bullock’s role fades and the writers turn saloon-owner Swearengen into the main focus.

Screen Shot 2014-06-04 at 2.49.40 pm — Al Swearengen (Source)

He’s a murderer, bully and brothel owner. But his motivations and relationships are complex. They make us love him in the end, and we forgive far more from him than we would from the rest.

Viewers don’t mind complexity. We can even feel for Sergeant Brody, the muslim terrorist at the centre of Homeland, because we get insight into his home life and terrible back-story.

We barrack for Walter White from Breaking Bad, who is a meth cook. We barrack for Omar in The Wire and the inmates in Orange is the New Black. All because we get to know them. We see not only their strengths but their weaknesses. We see them as humans, not message delivery machines.

Can politicians learn from this?

I’m not saying the front benches should start dealing drugs. Just that it doesn’t hurt to show a little of their real struggles. There should be plenty there. Difficult lives turn people to politics and politics is hard on humans.

A political career is a story written over the really long-term. It is not a movie. If it is to remain compelling, the main characters have to have depth. Depth means complexity and complexity requires ambiguity.

At the moment, political narratives strive to kill ambiguity. But this generates only the most superficial interaction with issues.

We might actually be a chance of engaging with university reform if we saw how Joe Hockey’s mother-in-law hates him for it, if we knew it kept him up at night, if we saw how his background and values explain why he balanced it off against other priorities.

As presented, there’s no meat to the political narratives. They are the kind of narrative you might get in a child’s story book. See Spot Run appears to have inspired See Joe Repair Budget.

There is little to grasp on to in the Coalition’s story. Nothing to stop us from painting them as simple villains. Nothing to stop us rolling our eyes and changing the channel. Nothing to make us focus in the short run, empathise in the medium run and barrack in the long run.

Bill Shorten could learn a lot from Batman. We know more about how Batman begins than Bill begins. Why is that?

But it doesn’t just have to be about the leaders. The Avengers or Oceans Eleven may be an even better metaphor for a political party. A raggedy team with distinct flaws and skills have to fit together to get a job done. There’s alliances and fractures that keep us focused on them, and those alliances and fractures are strengths, not weaknesses, in the narrative. Political parties try to keep talk of factions down. But they can be a fascinating sub-plot.

There are some politicians that modern messaging experts can’t explain. They include Bob Katter, Clive Palmer, and Lee Rhiannon. These people understand something of how eye-catching, complex characters can take an outsize role in a narrative. But does the political world learn from them?

Politics is much like it was 20 years ago and the time is right for a change in the way it is practised. It is a cozy old duopoly using old school communications techniques that are increasingly out of favour with the youth. In TV terms, the major parties are the Simpsons and the Bold and the Beautiful. Popular once, they are now the same old thing over and over.

Who is authoring The Sopranos of politics, writing a script that looses the foundations and doesn’t care who it shocks?

Is it Clive Palmer? Or is he just some sort of free-form experiment, like a drama student let loose with a digital camera.

When will we get a real narrative made up of characters real Australians actually care about? I cannot wait for such a show to hit the air.

One term? I wonder

Waleed Aly’s long piece in today’s Fairfax press about Tony Abbott is thoughtful, but the headline it carries: “No Way Abbott Can Now Budget For Second Term“ is too strong.

Every reader fell greedily upon that story, I assure you, but the headline hints at far more certainty than the excellent Mr Aly projects. Here’s three reasons why “one-term Tony” will win the 2016 election, and one reason he might not…

1. Parliamentary majority.

In the lower house, the Coalition leads Labor 90 to 55. Labor needs to peg back 21 seats to win. If you look at the pendulum, that means they need to win every seat that the Coalition holds be a margin of 4.3 per cent or less, while not losing any of their own seats. That’s a lot.

Winning a lot of seats will be hard for Labor, because it requires not just a swing but a lot of good candidates, a lot of organisation and a lot of money.

2. Sophomore surge

In theory, someone who was an unknown at their first election becomes familiar at the second (sophomore) election. They enjoy a surge in popularity. This effect, if it exists, will help the Coalition a lot – they introduced 19 new MPs.

As the name implies, the sophomore surge is a US concept. Is it real in Australia?

Some bloggers argue yes.

This book written about the 2010 election thinks so:

That means that even if Labor gets 51 per cent of the vote in 2016, it can easily lose a lot of important seats and be stuck in opposition.

3. Budget trickery

Tough budgets now lay the foundation for easy budget later. I wrote about this last week.

“To most people, the grumbling of early 2014 [will be] as relevant to the political situation as the result of the 1974 VFL Grand final. Labor can’t get over the broken promises and keeps talking about the past, while Mr Abbott is focused on the future. “

The evidence for the efficacy of this approach is mounting. Not only Victorian Premier Denis Napthine but also NZ PM John Key have unveiled more generous budgets on the eve of elections. (NZ is introducing free doctor’s visits just as we abolish them. Time to move to Wellington?)

4. But the polls are very bad.

55-45 is BAD.

I can see just one good example of a government coming back from that, in the early 90s. Keating took over a very unpopular government and won the next election.

Howard was losing by almost as much prior to the 2001 election. I also commend to you this graphic of the newspoll:

If this polling continues, expect newspapers to push the idea Malcolm Turnbull should take over from Mr Abbott. Not only would it likely help the Liberals, the media have clearly learned that a good leadership challenge narrative attract eyeballs and, crucially, elevates their (our?) own importance.

Core and non-core promises are actually a good idea

Politicians make and break more promises in one electoral cycle than the rest of us manage in a life-cycle.

We call them names and rant and rave. But really, we seem to forgive them, because we rarely vote them out. We know much of what politicians “promise” is actually contingent on several factors coming together.

It’s like hearing a footballer promising to kick four goals on the weekend – there are only a few circumstances in which they can deliver. We, the voters, form judgments about which promises are dependent on the most unlikely circumstances, and which seem more solid.

But even then we can be wrong. Politicians can be very inventive when it comes to wriggling out of promises.

It would be simpler for them to nominate the circumstances in which their promises will be kept, and the circumstances in which they will be abandoned.

John Howard spoke of “core” and “non-core promises” after his election win in 1996. I propose a more nuanced promise ranking, with three levels of political promise. Even the top level has plenty of political escape hatches.

1. Cross my heart and hope to die. Exclusions apply in the case of budget-stretching new priorities that may take the shape of major land wars, significant domestic earthquakes, sharp recession, nuclear attack, or mutations that create mega cane toads. Also not applicable in the case of a minority government. nb. Promised policy may mutate like a cane toad in the Senate.

2. Scouts Honour. Exclusions apply if revenues fall below $400 billion a year, or if expenditure on level 1 promises blows out by more than 15 per cent. Also, don’t expect this to happen if News Limited papers start to oppose it.

3. Best efforts. We will implement this if we can get the National Farmer’s Federation and Friends of the Earth to agree on terms of reference for a report before the winter sitting, and assuming the senate committee delivers its report into the issue before the end of the year. If that report aligns with the advice from the department, then the policy has a chance. But only if you deliver us a pliable senate and the rest of the legislative agenda goes smoothly, company tax receipts look healthy, and no other issues – oh, look, asylum seekers! – capture our attention. In fact, this is more of a second term promise.

I struggled not to write the above in a facetious fashion, but I honestly think this idea – contingent commitments – would be the fairest approach.

We elect leaders because we want people who can react sensibly to evolving circumstance, not just automatons who will carry out a plan long after it ceases to be a good idea.

Stop treating voters like goldfish who will forget not just what happened after the last election, but the very nature of political promises. Contingent commitments would hint at where the government’s focus will be, even in the case of major distractions.

If a political party opted for this, the initial headlines would be predictable. I imagine a media-cycle would obsess over the political party that no longer made promises! It would go global. Everyone from Fox News to Le Monde would get excited.

But if the innovation was developed long enough before an election, the brouhaha, the laughter and the op-eds would quieten down. After perhaps six months, the contingent commitments of one party would force the public to look closely at the promises of the other side and start asking questions like: Will you really deliver that expensive new social policy even if we have a recession?

How voting for a crazy candidate is smart (and voting for a smart candidate is crazy.)

Could voting for a really crazy candidate work in your interest?

That’s the implication of a new study by some very sharp economists from the World Bank, MIT, Universitat Pompeu Fabra and Northwestern University: ELECTORAL RULES AND THE QUALITY OF POLITICIANS: THEORY AND EVIDENCE FROM A FIELD EXPERIMENT IN AFGHANISTAN.

They compare the results in two types of local elections:

1. Where multiple candidates are elected; and

2. Where one winner rules.

In the latter, voters opt for clever moderates. But in the former, voters identify hard-cases and elect them.

“We propose a theoretical model where the difference in the quality of elected officials between the two electoral systems occurs because elected legislators have to bargain over policy, which induces citizens in (type 1) elections to vote strategically for candidates with more polarized policy positions even at the expense of candidates’ competence. Consistent with the predictions of the model, we find that elected officials in (type 2) elections are more educated than those in district elections and that this effect is stronger in more heterogeneous villages. We also find evidence that elected officials in (type 1) elections have more biased preferences.”

Negotiation is a staple of politics. Greek democracy was founded on the idea of thesis and antithesis entangling in order to forge synthesis. Our modern-day parliaments are the inheritor of this intellectual tradition.

But negotiating is tricky.

Coming to the negotiation table with a smile on your face and a sensible plan immediately marks you as the loser. President Obama found this out the hard way in his first term.

The Atlantic:

“When it came time to deal with the expiration of the Bush Tax Cuts, President Obama again immediately abandoned the liberal — and his own original — position of allowing all of the Bush Tax Cuts to expire and started negotiating from the centrist position of allowing only the Bush Tax Cuts over $250,000 to expire. By holding hostage the extension of unemployment benefits, Republicans quickly got their way in the tax talks.”

Obama is a smart guy and he did not repeat his mistake. Think Progress quotes him on the topic:

“I suppose what I could have done is started off with no tax cuts, knowing that I was going to want some and then let them take credit for all of them. And maybe that’s the lesson I learned.”

By his second term, Obama took a hard-line position to negotiating and the Republicans were the ones that copped the blame for the government shutdown of 2013.

Politics has become more polarised in the United States, as the fantastic Graphic on the right here illustrates (source: The Economist). That means more divisive figures in public life.

For example, Ted Cruz, the barnstorming Republican Senator from Texas who led the Republicans into the debt default impasse (an issue that required negotiation to resolve).

Cruz is described as…, well, let me Google that for you.

Now, Cruz lost the wrangle over the debt default. He was cut out by his own side. But his ploy might have been the only way to win. If the other side thinks you are an idiot before you start negotiating, you’ve convinced them they need to offer something stupidly good to close the deal.

The lessons for Australia are many. The moderates in parliament hold less power than the wildcards. And this is especially so in the Senate, where neither party currently has a majority, and negotiation is far more important.

This may be why you hear so much from the Greens Senator Sarah Hanson-Young and so little from the ALP Senator Carol Brown. The less mainstream your position, the more you can expect to gain in concessions, and so the more favour you can expect at the ballot box.

Evidence the Australian public is savvy on this topic can be found in the most recent Senate election, which sent a full box of Froot Loops to our nation’ capital.

This line of thinking raises two important questions:

1. Does this way of voting represent an inherent conservative desire? If we want to gum up the works of politics, matching the other side’s wildcards with wildcards of our own should just about do the trick. A government system stocked with outliers on the spectrum will create a lot more noise and fireworks than one stocked with moderates, but perhaps just as much in the way of real reform.

2. Where we see moderates elected to rule a system, can we assume this means we don’t expect any negotiation to happen? That if someone seemingly sensible like Bill Shorten is elected to head the ALP, that we expect him to rule it with an iron fist?

I value your thoughts on all this – please leave a comment below!

Politicians – peddlers of pain. Why not make it plain?

Change that doesn’t involve pain is not political. It is administrative change.

Politics without pain is not politics at all. Change without pain requires no hard choices, no leadership, and no leaders.

Dress up administration as leadership, people will disrespect you. Pretend reform produces only winners and you’ll be unable to be true to your word. Say “this won’t hurt a bit” and people will soon learn to not trust you.

Politicians who aspire to be more than mere administrators must not flinch in the face of pain. They must be conversant in it. They must know that being a leader means being a dealer of pain.

Does the surgeon tremble when he picks up the scalpel? Does the coach worry that the players must be tired? Does the kindergarten teacher flinch at using the naughty corner?

Not if they know their job. So politicians too must be prepared to make scars, see sweat, deal with temper-tantrums.

Perceptions of injustice, angry placards, people weeping for a way of life lost and letters to the editor. These are the products of good leadership.

And I’m not talking about hurting foreigners. Asylum seekers and would-have-been aid recipients. That’s fish in a barrel stuff. Rookie stuff. Leadership means a willingness to rile your own.

Being willing to deal in political pain requires seeing over the horizon even when the voters can’t. Lead well enough for long enough, and the balance will show through.

Here are some examples of politicians being afraid to dish out hurt – beneficial hurt – to their constituents and stakeholders.

The absence of congestion charges and user-charges on the road system.
The lack of GST on education and health.
The failure to increase the tax on the abundant profits of the mining sector as ore prices rose.
The loopholes in the taxation system that allow trusts to operate and remove billions from within the ATO’s reach.
Urban planning rules that preserve certain suburbs in sepia tone.

Politicians need to step back and understand their job. Rather than trying to make changes that don’t hurt, or making changes that do hurt but pretending they don’t, they ought to make pain their friend. They are pain-makers.

When you lie about the way reform hurts, you undermine the case for reform. A simple headline that says “pensioners to be worse off” can end your reform. But if you introduce a reform by emphasising that it hurts, that headline doesn’t have the same effect.

I’m not advocating pain for pain’s sake. I just want good policy to be able to be discussed openly. Pain and all.

If we know politicians are pain-makers, we will be more respectful and careful in selecting them. Fewer flighty weirdos. More hard-thinking, fair-minded squares.

Because a good politician, like a good coach, is one that makes us want pain. A communicator that fills each billowing twinge with the reason for it.

In other fields of endeavour we love and respect hard-liners who remind us nothing good comes cheaply. Why do we elect politicians that pledge to coddle?

Politics is ripe for cracking open, ripe for genuine innovation. The homogeny of ideas and approaches is stifling. The acceptance of the limits placed on politicians is stifling. But this stifling period in democracy will end.

When it does, it could be via a politician that does not shy from pain. I’d like the next Prime Minister to also adopt the title Minister for Pain. PM-MP. Put the issue front and centre. Make it clear that this is a government that won’t lie about the connection between hurt and improvement.

China Series Part 5: Is democracy over-rated?

This is the fifth in a five-part series on China. You can see the preceding parts here One, Two, Three, Four.

The achievements of China in the last two decades are incredible.

The share of China’s population living in poverty has fallen from 84 per cent to 13 per cent since 1980.

A nation with an average income of $205 in 1980 now has average income of $6000.

If the world’s aid programs had lifted 400 million people out of poverty, aid policy makers would barely be able to get out of bed for the pile of OBEs, Pulitzers, Nobels, Honorary doctorates, emmys, grammys and groupies littering their house.

These crucial policy changes in China have come while “leading” democracies have spent billions of dollars on wars of whimsy in the middle east, blown up their financial systems, had great big shouting matches over threats to shoot themselves in the leg (i.e. government shutdowns), and put the greatest policy development efforts into “stopping the boats”.

When governments make policy with the “assistance” of the editor of the Daily Telegraph, the appeal of technocratism is huge.

That’s one reason why Australia’s biggest policy success of recent times has been monetary policy. It is set by an independent body, the RBA.

That’s also why Infrastructure Australia was set up, to try to wrest control of important billion-dollar investments out of the hands of here-today, gone-tomorrow MPs.

Just yesterday I read this story at the Federalist about the death of expertise, by Tom Nichols, a professor of National Security Affairs in the US.

“People in political debates no longer distinguish the phrase “you’re wrong” from the phrase “you’re stupid.” To disagree is to insult. To correct another is to be a hater.”

He cites the Dunning Kruger effect, which Wikipedia describes thus:

“unskilled individuals suffer from illusory superiority, mistakenly rating their ability much higher than is accurate. This bias is attributed to a metacognitive inability of the unskilled to recognize their ineptitude”

Are we too stupid and arrogant to be allowed to manage our own government? They say you get the government you deserve, and when I look at Australian governments at federal and state level, I conclude we must have been very bad indeed.

So. Should we look into benevolent dictatorship? The argument is an easy one to make when you are browsing World Bank statistics.

But one morning in late October, as I was about to pass under the Gate of Heavenly Peace in a cloud of smog, we saw a big bunch of protestors being dragged off to one side by Chinese police and secret police. I’d lived in China in 2003 and never seen this sort of thing before.

Then, minutes later, while we were inside the Forbidden City, a car blew up where we had been standing just before, killing five and sending dozens to hospital.

That was frightening. The Chinese government blames the East Turkestan Islamic movement, based out in the majority-Uyghur west of China. They seek independence for a sliver of China near Russia. The Chinese goverment’s behaviour out there has been described by Amnesty as “years of attempted erosion of the ethnic identity of the Uighur people of the region by the ruling Han majority.”

You can’t as easily get away with that in a country with a free press and representative democracy.

Perhaps the most enduring image of Tiananmen square, for me, is these fire extinguishers, which are dotted around. When I saw them, I thought “What for? This square is made one-hundred per cent of stone. There is nothing flammable here.”

Then I looked around. Realised what the flammable material was. And I started to feel a bit sick.

Wooing Clive: How to suck up to a really rich MP

Australia’s richest-ever member of Parliament could introduce a novel influence-buying dynamic into federal politics, new research suggests.

Clive Frederick Palmer, member for Fairfax, has been confirmed as a billionaire. The leader of the Palmer United Party has made his outsized wealth a political issue.

He claims:

“I’m not offering myself for service to the nation to increase my income… I’m incorruptible – you can offer me a billion dollars and it won’t change my views on something and it won’t mean much to me either.”

The argument is plausible. The theory of the declining marginal utility of money suggests Mr Palmer would be less tempted by a million bucks than other MPs.

But a new paper from the United States National Bureau of Economic Research hints that is not the end of the story.

Berkeley economics professor, Stefano DellaVigna and colleagues, have found “[w]hen a politician controls a business, firms attempting to curry favors shift their
spending towards the politician’s business.”

Professor DellaVigna’s paper, Market-based Lobbying: Evidence from Advertising Spending in Italy, uses the reign of Silvio Berlusconi to show that companies increased their advertising spending with his media companies.

“We document a significant pro-Mediaset bias in the allocation of advertising spending during Berlusconi’s political tenure. This pattern is especially pronounced for companies
operating in more regulated sectors, as predicted,” DellaVigna et al write.

Mr Palmer may not be Prime Minister, as Berlusconi was, but after July 1, his party will control the balance of power in the Senate.

Will Australian companies start doing business with Mineralogy, Palmer’s main concern? Bluescope Steel, perhaps. But it is doubtful many regulated companies can use a lot of iron ore or nickel.

Palmer’s interests run deeper and broader than that, according to the register of Member’s Interests. [.ashx link]

He owns over 80 private companies in Australia, and nine private overseas companies. That’s without considering his directorships and companies owned through trusts or other entities in which Mineralogy has shares.

The one that jumps out in this context is Coolum Resort.*

The former Hyatt resort – which Palmer bought in 2011 for an estimated $80 million – has already got a load of free publicity.

If you are the sort of person that gets invited to conferences and summits, don’t be surprised if you end up among the Tyrannosarus Rexes at some point in 2014. (The resort features 160 fibreglass dinosaurs)

It may have been described as “a five-star version of Fawlty Towers” but entities that plan on lobbying this term of government would be mad to book anywhere else.

*I do not suggest booking a conference at Coolum necessarily constitutes corruption or influence-seeking, neither do I suggest Mr Palmer’s votes or views would be influenced by who books at his resort.

Debt, deficit, and political death by a thousand cuts

The Government’s latest budget update is part of the political plan but could also be its undoing.

The Mid-Year Economic and Fiscal Outlook’s shock projections of $667 billion in debt and deficits until 2023-24 lays the groundwork for the Commission of Audit.

The Commission of Audit is the government’s major economic ambition for its first term and its job is to find ways for the government to save money. Mr Abbott has been promising it since March 2012.

Hockey and Abbott want the Commission to have the most receptive environment in which to publish its plans (the Interim report is due in January, the final report by the end of March). So they need the intense sense of a budget emergency.

MYEFO “will show the Australian people the problem we’ve inherited, and the budget will deliver the solution,” Treasurer Hockey said in November.

Rudd tried reform on the tax side. Disastrous. So this government is prioritising reform on the expenditure side. (The Government has promised a white paper on tax reform within two years – a softer pledge). From an economic perspective that is fair. But it raises political questions.

What is the last “cut” that is heralded as a major political reform? Howard strangled the dole payment down below some estimates of the poverty line, but that’s oddly omitted in his hagiography. Even right-wing economist Judith Sloan has argued the dole should now be raised.

When we list the economic reforms that have made Australia great we include microeconomic reform, floating the dollar, an inflation-targeting central bank and the GST. Not cuts.

If the Abbott government first term economic reforms can mainly be labelled “cuts”, what will be its legacy? It needs to frame these cuts in a positive way. But that is not easy.

Business council chief executive Jenniffer Westacott has a suggestion. She called the Commission of Audit a “once-in-a-generation opportunity to fortify Australia’s budget foundations and set in train a much-needed reform agenda to keep our economy strong.”

Reform is hard enough to justify on its own. Using reform to justify cuts is going to be a very hard sell indeed. Ms Westacott is not a politician.

When the Commission of Audit presents a menu of reforms, the government will have to read the mood of the nation and of opinion leaders.

Will the government be able to identify which cuts use least political capital? When Rudd picked the eyes out of the Henry Review, he thought the public would support a tax on rich miners and was proved quite wrong.

Abbott has a massive parliamentary lead, but Newspoll shows his government lagging, 48-52. The recommendations of the Commission of Audit will be picked through with an eye to 2016.

The further behind in the polls the government is, the more it will tread softly. Bill Shorten’s mouth will be so tired of using the terms “cut” “slash” and “hack” that by 2016, it will probably go on strike.

If the Government is too selective with the reforms, it will face accusations of having no backbone, and lose some of the most strident support from its barrackers in the News Corp press. Far better, the Government may think, to be seen as having the courage of convictions even if it means putting some of its vast parliamentary majority to the sword.

But that is a gamble on the reputation of the political right. Too much cutting could poison the Liberals’ reputation as a party that builds the nation.

Can the government create clamour for cuts? Only if the narrative from this Daily Telegraph story sticks in the public’s mind:

“Australian families to wear the pain of Labor’s massive debt bomb, Joe Hockey warns”

UPDATE: I now read that the Tele is Australia’s least trusted news source according to a new survey. Dire warnings indeed.

ALP in danger

What we thought we knew has been confirmed. The ALP is controlled by factions. The faction with the most power seems to be the NSW right. They turned over the leader as soon as his popularity started to dip. So far so good. Continue reading ALP in danger

What Adam Bandt owes to Harold Hotelling

Adam Bandt is the Australian Greens candidate for the seat of Melbourne. Continue reading What Adam Bandt owes to Harold Hotelling

Baking the dough of debt into the bread of financial crisis.

Debt seems to be a necessary trigger condition for global economic disasters.

Doesn’t matter if its private (subprime mortgages) or Government (Greek debt).

But Japan shows debt is not a sufficient condition for a meltdown. (Government debt = nearly 200 percent of GDP)

So what is the extra ingredient that turns the dough of debt into the crusty baguette of financial crisis? Continue reading Baking the dough of debt into the bread of financial crisis.

What is Net Neutrality?

Folks interested in the operation of the inter-wobble are probably aware of the concept of NET NEUTRALITY.

For the rest of us, here is the gist: Internet Service Providers (ISPs) have the capacity to restrict their subscribers’ access to specific content and websites. For example http://www.CNN.com might load at the normal speed, but http://www.socialistdaily.com is made as slow as a wet week.

Advocates of Net Neutrality want such activities to be illegal.

Continue reading What is Net Neutrality?

Population policy

I’ve been haunting the forums and threads on transit and urban policy for some time now. And I’ve noticed a change. Back in the day, the response to any proposal for more housing, or train lines, or new suburbs was:

Let’s not build it, who wants another million people?!?

It’s a classic case of mistaken identity between our old friends, that nebulous duo, cause and effect. In fact, the need to support another million people is almost a fait accompli.

But the naysayers are getting smarter and have reinvigorated their attack. Today, in response to proposals for more roads, more trains, more urban density and more tax, the naysayers exclaim “we must establish a population policy!”.

Obviously, they don’t specify a level of government that should do this, nor a target level, nor a means. But this is progress nonetheless.

And our illustrious, lustrous egg-head of a Prime Minister must have been haunting those forums too, because suddenly the Australian Government has a Minister for Population, Tony Burke. In addition to keeping an eye on Fisheries, Forestry and Agriculture, he now has to manage into existence a population policy, with a reporting deadline in 12 months time.

This is a good thing. IN THEORY. In reality, actually doing something about population growth is extremely difficult and may not be worth the effort. Here’s a few reasons why:

Continue reading Population policy

Bizarre love triangle: Can Henry squeeze in between Tony & Kevin?

Continue reading Bizarre love triangle: Can Henry squeeze in between Tony & Kevin?

On Formula 1: Profanity-laced Urbanity.

For a long time there was a group called Save Albert Park, arguing against the Melbourne Grand Prix. On the suburb’s street corners, bearded men (and women) sat on folding chairs distributing photocopied pamphlets and yellow ribbons. But here’s the thing: Albert Park is not all that. It’s dreary and windswept.

The group could benefit from rebranding. One option I consider especially sonorous is: F1ck the Grand Prix.

Five reasons we should say ‘F1ck it’: Continue reading On Formula 1: Profanity-laced Urbanity.

Charter Cities – An Idea

Paul Romer has an idea people are calling crazy. He was a Stanford Economics Professor, but now he’s quit to pursue full time the idea of charter cities. Eh?

Charter cities are based on the idea of charter schools. These are schools in America outside the education system. They are generally in poor black areas and have a ‘charter’ – a set of radically different rules. For example they might do ten hour school days, six day weeks, compulsory uniforms. They are like free private schools, and they have been extremely popular (59 percent have waiting lists for entry) and often successful (one meta-analysis found most studies of charter schools showed improved student outcomes).

Continue reading Charter Cities – An Idea

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