Oceans of ink have been used to address last Saturday’s election including by those, like me, who thought a reprieve was possible but feared the worst. Steve Kates offers a comprehensive 10-point summary of why the ALP lost. I have a more succinct version in Canada’s Financial Post which highlights the key reasons being cost-pregnant green policies and the tax hikes on superannuation.
Everybody concerned about Australia’s future prosperity would be relieved at Saturday’s result. The Coalition would be entitled to believe it guarantees them six more years of government, especially as the ALP is signalling a maintenance of its current spending and climate policies.
The ALP went to the election with the most radical manifesto that we have ever seen – more so than that of Whitlam in its call upon national income. Even in their detail its policies made no sense, for example with selective increases in spending on wages, health and education that defied the institutional arrangements in place to ensure rational decisions on these matters.
And yet 48 per cent of the electorate voted for Labor or its allies. Indeed, perhaps the one reason their manifesto failed is, as Alan Kohler has said, because it attempted some integrity with tax proposals designed to cover the spending baubles that were offered. While Chris Bowen’s tax hikes were totally inadequate, even the fig leaf they provided was sufficient to shift votes, amounting to a decisive two or three percentage points, to the coalition. One would expect even less integrity in future Labor campaigns with a pretence that proposed spending would ignite a self funding Keynesian boom and a case being made that we can afford more debt by pointing to that in other countries.
Some overseas commentary has likened the Coalition victory to right wing electoral advances seen in North America and Europe. This is difficult to reconcile with the policies the Coalition took to the election. My own conclusion is
While the LNC had years ago stood for (and succeeded in) abolishing carbon taxes, it nonetheless ratified the Paris climate agreement and has required 23 per cent of electricity to be generated by renewables (only about seven per cent of this is unsubsidized hydroelectric power). It also has plans to spend at least $5 billion on a hopelessly non-commercial pumped hydro facility to offset the inherent unreliability of renewables. Additionally, it has earmarked $500 million to study the Great Barrier Reef, which — contrary to activists’ hysteria — is in no danger from whatever climate change we may or may not be experiencing.
Even if Morrison’s LNC is inclined to seek expenditure cutting and deregulatory policies, it will remain constrained in the Parliament and by its own perception that voters oppose rolling back the nation’s costly climate-change policies. Though the government appears to support additional coal-fired electricity generation to offset the unreliability of wind and solar, the fact that such support is necessary in the first place speaks volumes about the sovereign risk imposed by the politics of energy.
Saturday’s victory for Australia’s LNC reprieves rather than reverses the march of big-spending government and accumulating environmental regulations.