Author: Chris Berg

Bankrolling Oprah: The New Tourist Strategy

Fifty per cent of all advertising is wasted, says the marketing cliché. The problem is figuring out which fifty per cent.

Last week we had a rare burst of honesty about the usefulness of the money governments spend on high profile tourism campaigns. The former Tourism Minister John Brown admitted, “We spent hundreds of millions of dollars over 30 years without much effect, I must say that honestly.”

Brown was a minister in the Hawke government when he commissioned and oversaw the famous Paul Hogan “Throw another shrimp on the barbie” ads during the 1980s. That Hogan campaign is constantly held up as the greatest success story of Australian tourism. It’s the yardstick by which all other campaigns are measured.

So his admission it’s all been an enormous waste of cash is unlikely to feature prominently in Tourism Australia’s next annual report.

Brown was helping announce Oprah’s visit to Australia. Her visit is being heavily subsidised by Australian taxpayers: Queensland is chipping in $400,000, New South Wales between $1 and $2 million, and the federal government $1.5 million.

Oprah is personally worth an estimated US$2.5 billion, so clearly she doesn’t need the money.

But Brown doesn’t want us to be “cynical about the cost”. The current tourism minister, Martin Ferguson, is sure it is “money well spent”.

Special Oprah-in-Australia episodes will go to air next January alongside Tourism Australia’s G’Day USA campaign. And, the government hopes, American dollars will flood in.

Maybe millions for Oprah will succeed after millions for “Where the bloody hell are you?”, the Baz Lurhmann Australia tie-in campaign, and 2004’s “Australia: A Different Light” with Delta Goodrem and Richie Benaud, failed.

The Oprah effect can turn a book into a bestseller just by being featured on her program. Our tourism bureaucrats are hoping that scales to continents.

But I don’t want to dwell too much on the specifics of the Oprah visit.

The federal government’s thinking about tourism has always been woolly. Tourism promotion has been a swamp in to which the government has poured cash and consultants for decades.

In Crikey in June, Noel Turnbull pointed out the government is running two simultaneous marketing campaigns, with contradictory messages. The first is a branding campaign which suggests there’s more to Australia than people think. The second is a tourism campaign which suggests there isn’t; that we’re all about glossy surfaces and pretty landscapes.

One wonders how many marketing and public relations consultants are going to feed on the Oprah campaign.

But why are governments doing tourist promotion at all?

The overwhelming beneficiaries of tourism dollars are private industry: hotels, restaurants, transport, souvenir shops, pubs, cafes, barbecue manufacturers and shrimp farms. Tourism promotion does their marketing for them – the government spends millions of dollars trying find customers.

Certainly, the government gains a small amount of money from the GST levied on things tourists might buy. But the same holds true for all Australian industries selling products to Australian nationals – the government gains a little from every sale. So such logic would suggest the entire advertising industry should be subsidised by government.

If the benefits of promotion are so enormous, the tourism industry should be paying for it themselves. There’s no reason they can’t band together in another of their many peak bodies to sponsor international marketing campaigns. Let industry discover which half of advertising works and which half doesn’t.

Government policies designed to promote tourism almost always end in disappointment, as John Brown recognised.

But we don’t only push out ads. We also spend vast sums on events to try to lure in overseas crowds.

The major events strategies of Commonwealth and state governments are predicated on a belief that big sporting contests translate into big touristy payoffs.

This month is the 10th anniversary of the Sydney Olympics. We ran a good event. But we got a bad Olympic hangover. Visitor numbers to New South Wales actually declined relative to other Australian states. It’s not our fault: Beijing and Athens had the Olympic hangover too.

The Sydney Olympics was a bigger deal than Oprah’s tour ever could be. We earned a great deal of international goodwill and publicity in those few weeks in 2000. But tourism went backwards.

In Victoria, the Grand Prix – the pride and joy of the Victorian tourism lobby – isn’t even paying for itself anymore. It posted a $49.2 million loss this year, and was promptly bailed out by the state government.

Here’s hoping Australia doesn’t win the privilege of hosting the World Cup.

There’s good reason to be sceptical that Oprah is the tourism spend to buck the trend. The former tourism minister may be optimistic about Oprah’s visit but history tells us we shouldn’t be.

Savaging a popular policy a tricky task for Turnbull

Malcolm Turnbull’s elevation to the shadow communications portfolio may be just what the debate over the national broadband network needs. It could be just what the Liberal Party needs, too. But Turnbull has a hell of a job: to persuade the electorate that a gigantic, government-subsidised gift of a super-fast internet is a bad idea. An Essential Report poll late last year found 65 per cent of Australians thought it was important the NBN was built. Sixty per cent of Coalition supporters did, too. As a general rule, Australians like free stuff even if eventually they have to pay for it through tax.

Both the government and the opposition have lined up their new portfolios in time for the next sitting of Parliament.

The election is over and Lab or wants change, not continuity. Julia Gillard has tried to eliminate all traces of the embarrassing Kevin Rudd era.

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On the other side, the Coalition did astonishingly well at the election. So, Tony Abbott’s thinking goes, why fix what’s working? Turnbull’s move to communications is the only significant change.

The Coalition’s broadband message was an unmitigated disaster during the election – the biggest problem with an otherwise robust campaign.

It’s possible that Abbott is laying a cunning trap for his rival. From now on, the debate over the broadband is going to be intimately linked with Liberal Party leadership questions. And who would want to be saddled with the job of opposing one of Labor’s most popular policies?

But Abbott needs Turnbull to do well. Ever since he took over in November 2009, Abbott’s leadership has burnt fast and hot. His strategy was to barge into The Lodge. Now it seems likely the Coalition faces a full term in opposition. Abbott has to turn off his fast burn and apply slow, indirect heat to the Gillard government. He will need his shadow ministers to break down government policies bit by bit, not try to blow them up as quickly as possible. In other words, Abbott is relying on Turnbull to make the broadband network look like insulation, not the mining tax. Turnbull may be able to do so.

Since 2007, the government’s Communications Minister, Stephen Conroy, has successfully portrayed any Coalition critic of his broadband plan as a Luddite, as if they were opposed to the very idea of the internet and just a sledgehammer away from machine breaking. Conroy won’t be able to play that card now. You couldn’t parody Turnbull’s love of technology. He was not just the chairman of Ozemail; he recently released an iPhone application dedicated to all things Malcolm.

The Coalition can’t stop the broadband network, but it will be able to show how poorly thought through the project has been. After all, the network the government is building is not the network it took to the 2007 election. That first plan failed.

On a now infamous flight between Canberra and Sydney in April last year, Conroy used the time he could get with Kevin Rudd to explain their $4.7 billion scheme wouldn’t work. The two men sketched the

$43 billion scheme we’re getting now.

If we’ve learnt anything about the internet, it’s that we always find new uses for it and we always want more speed. But that doesn’t mean this specific network at this specific price, built in this specific style is the best way to get it. And it doesn’t mean the network has to be built by government. Before the 2007 election, Telstra was desperate to roll out high-speed broadband itself. Had the Howard government made some regulatory changes, we would already have the network at no cost to the taxpayer.

There’s a catalogue of problems with the NBN. A decade after Telstra’s privatisation, the government has taken responsibility for telecommunications.

Unfortunately, the Coalition’s alternative policy does little to resolve the deep regulatory issues that have held back Australian broadband. But right now, the burden of proof is on the government to show its NBN is worth the price tag.

The Liberals need their old, discarded leader to knock serious holes in the national broadband network.

Chris Berg is a research fellow with the Institute of Public Affairs.

Tea Party conservatives are brewing up a storm

It was hardly needed, but the Tea Party confirmed this week it’s a big deal in American politics. It’s a big deal for conservative politics internationally. New technology is giving conservative activists the power to form the sort of genuine grassroots movements the left has been for decades.

On Tuesday, the Tea Party scored a huge win when Christine O’Donnell beat Mike Castle in a Republican Senate primary in Delaware. Castle is the embodiment of an establishment Republican. He’s enjoyed a nine-term run in the House of Representatives. He was Delaware’s governor for seven years. He’s a great-great-great-great-great grandson of Ben Franklin. He’s very, very moderate.

He lost to the deeply conservative Christine O’Donnell, who carried a Sarah Palin endorsement. Defeating Castle scored her one of the biggest victories of the Tea Party so far.

Few overseas political movements are less clearly understood in Australia than the Tea Party. That’s no surprise. Sometimes not even the Tea Party is entirely sure what it stands for.

Take a questionnaire for Republican and independent candidates, written by a small, obscure Tea Party group in Erie County, Ohio. They call themselves the Freedom Institute. To get its approval you must believe marriage is solely between a man and a woman, gays should be kept out of the military, tariffs should be increased, the Federal Reserve should be abolished, and ”the regulation of carbon dioxide in our atmosphere should be left to God and not government”.

The Freedom Institute wants tax cuts and government workers to be exposed to ”the free-market system”. But they also want to impose trade barriers to keep jobs in the country. They want their politicians to be conservatives, but populist conservatives with some eccentric and jumbled views.

But compare the Freedom Institute’s list with a similar one supported by FreedomWorks, a large non-profit organisation with headquarters in Washington. They sum up the Tea Party’s central tenets as: start fundamental tax reform, stop the tax hikes, end runaway government spending, and protect the constitution. In other words, limited government, low taxes, and an end to government waste.

Few of those policy positions would be opposed by conservative, small-government Republicans. In Australia, they’d easily recognised as free-market liberalism. But for the international press, the Erie County list is far more interesting. The revolt against the Republican establishment is as much a revolt against big spending, big taxing George Bush as it is against the Obama administration.

Bush’s Republican administration instigated the rolling program of Wall Street bailouts which have plunged the US into debt. The US government deficit this year will be $1.3 trillion. That’s larger than our entire economy.

A Bloomberg poll found overwhelmingly the thread which ties the Tea Party together is a belief the US has lost its way in the past few years. Eighty per cent agreed the recent expansion of government was a threat to liberty.

A CBS/New York Times poll found Tea Party supporters tend to be more educated than the general public. And they’re not bad judges of character. The majority believe Sarah Palin is unqualified for the presidency. Bear that in mind when you next hear the Tea Party dismissed as a crazy fringe.

The political class isn’t sure what to make of the Tea Party. It comes from outside the polished environs of Washington. Few members have been involved in politics before.

They’re all simply plugged into networks of blogs and mailing lists. That makes the Tea Party sometimes confused, often naive, and easily led astray. It also makes its members powerful.

In Australia, we just saw how potent a conservative grassroots can be. The implosion of the parliamentary Liberal Party late last year over climate change was driven by a membership which saw Malcolm Turnbull’s support of the emissions trading scheme as unacceptable.

Thousands of emails were sent by party members and others calling for the position to change. In the end, they had to change leaders. Hopes for bipartisan climate action disappeared, and Kevin Rudd’s prime ministership died in the Liberal party room. A conservative grassroots destroyed a Labor prime minister.

Compare the attention that movement got to the praise heaped upon the even tiniest left-wing movement. Poor old GetUp! wishes it was half as effective as the Liberal membership last November.

Technological change has given conservative popular movements the power to challenge their establishment in the same way left-wing movements have for half a century. That’s the real story of the Tea Party.

It may get sucked into the Republican mainstream. Or its candidates may fail at election time. But the Tea Party isn’t wrong. America has serious problems. Those problems have energised the conservative base.

Life under Gillard could be an expensive business

If Julia Gillard holds government, the alliance she will have cobbled together will speak in one voice on one major issue – climate change.

Andrew Wilkie’s addition to the Gillard side on Thursday afternoon confirms this. The new independent from Tasmania had ”a price on carbon” prominent among his 20-point list of priorities for action.

Despite many Greens being uneasy with a quasi-market approach to climate change, Melbourne MP Adam Bandt and his party have embraced an emissions trading scheme.

And Gillard will be looking to keep the nine Greens holding the Senate balance of power in her government’s tent – a task made much easier by the lower house agreement she signed with Bob Brown this week.

Let’s say Rob Oakeshott and Tony Windsor fill up seats 75 and 76 in favour of the Labor government.

Oakeshott is clearly for climate action. In February, when the government’s Climate Pollution Reduction Scheme was looking ever more hapless, Oakeshott called its collapse ”a pox on both the major parties” and a ”disgraceful failure of so-called leaders in this country to tell the story of climate change and energy security”.

Tony Windsor has said that a price on carbon is inevitable, that he supports it, and doesn’t believe it will be a disaster for the bush.

Anyway, that’s the maths. Bob Katter may end up supporting Gillard, but does Bob Katter strike anyone as a team player? The member for Kennedy thinks Sir Nicholas Stern and Ross Garnaut are ”lightweights”, so it’s unlikely the government could count on his support for climate legislation any time soon.

Assuming the Labor alliance can survive the next three years – and that Gillard’s leadership will too – the precariousness of minority government will leave the prime minister looking for a policy win. An emissions trading scheme is an obvious candidate.

And not just any ETS. The 2009 model reflected the need to negotiate with the Liberals in the Senate. A new ETS would reflect a deal with the Greens, who rejected the last one as too weak, and the independents – Oakeshott has shown a reverence for Garnaut’s original, ”pure” emissions trading scheme.

Hung parliaments can be funny things. Despite the low profile of climate change in the 2010 campaign, and despite not gaining government in its own right, the ALP may now be more able to enact the policy it most wanted to last term.

But the debate over climate change policy has regressed badly. In 2009, Parliament was discussing the mechanics of the government’s elaborate cap and trade scheme. But in 2010, we’re stuck on this simple phrase: ”price on carbon”. It makes it all sound so simple.

But what would its target emissions level be? When would it start? How should trade-exposed energy-intensive industries be compensated, if at all? Should low-income earners be compensated?

Not to say anything of the main policy crunch of November and December 2009 – the failure of the Copenhagen summit. An emissions trading scheme cannot achieve its goal without being part of a global agreement.

The notion of putting a price on carbon is popular. Around 50 per cent of Australians believe climate change is a serious problem that should be tackled by government.

Yet actually paying that price is substantially less popular.

A poll by the Lowy Institute has tracked the willingness of Australians to pay extra for electricity. The number of people who refused to pay anything to tackle climate change has increased from 21 per cent in 2008 to 32 per cent in 2010. And less than a third of those who believe that there should be a significant price on carbon report themselves willing to pay a significant price for energy.

Even if the federal government manages to get an ETS through Parliament, the key to emissions reduction is to slowly but perceptibly increase the cost of emitting.

Recent elections have shown us Australians are inordinately sensitive to real or imagined cost-of-living increases. Few governments would be eager to deliberately ratchet up the price of electricity every single year.

Supporters of emissions reduction argue that new technologies will fill the gap and keep prices down. To a degree, that’s true. But the pace of technological change is not guaranteed. There’s no reason to believe that the price of wind power will drop in concert with a rise in the carbon price.

In her deal with the Greens, Gillard ditched the much-ridiculed citizens’ assembly. Instead, she plans a climate change committee, formed under the auspices of Parliament, and including only those committed to a price on carbon.

Her alliance may help Labor get emissions trading through Parliament. But the emissions trading model the climate change committee devises may create more political problems than it solves.

Chris Berg is a research fellow with the Institute of Public Affairs. Follow him at twitter.com/chrisberg

Snapping at heels of civil liberty

It was obviously a tactical error for Paul Hogan to tell the Australian Taxation Office to “come and get me, you bastards”.

The ATO claims Hogan used offshore accounts to hide profits from his film Crocodile Dundee and avoid paying tax. So they slapped him with an order to prevent him leaving the country. Never say the Tax Office isn’t fearless: Hogan was visiting Australia for his mother’s funeral.

The order was lifted yesterday after the Tax Office and Hogan had a ”cordial” meeting.

There are many reasons to be concerned by this course of events. The Hogan case is a window into just how draconian the government’s taxation and regulatory powers have become.

To start: Hogan has not been charged with any crime. Sure, he allegedly owes the government money – some reports claim it could be up to $150 million, after interest and penalties.

But he has an absolute entitlement under our taxation system to dispute that amount. And there’s a fair chance he could win: about half of all tax disputes end with the taxpayer paying less than the ATO claimed. Tax disputes are complex and technical. Taxpayers have been known to make mistakes. So has the ATO.

On a purely practical level there was little reason to believe he was a flight risk. Hogan is no Carlos the Jackal. Yes, he lives overseas, but he has returned to Australia frequently in the many years he has been under investigation. He has five children and nine grandchildren here.

Hogan’s bad luck was to find himself smack bang in the middle of a political push to eliminate the use of overseas tax havens. He is the highest profile target of Project Wickenby, a federal government crackdown on offshore tax evasion and tax avoidance.

Project Wickenby’s conflation of evasion and avoidance is a big problem. Everyone tries to avoid paying more tax than they have to. We all keep receipts of work-related expenses and rigorously, if not enthusiastically, tally them up to be deducted from our income.

One Henry tax review recommendation was to set a “default” deduction, institutionalising this minor and common form of tax avoidance.

Sometimes avoidance is more complicated – digging through the tax act for exemptions. Australia’s income tax law is 5743 pages long. Compare this to Hong Kong’s 200 pages, and it’s no surprise there are many cunning schemes to minimise tax.

There’s nothing wrong with that. Australians have no moral obligation to pay more tax than the tax law requires – even if it means using offshore accounts. The government itself admits that many uses of tax havens are completely legitimate.

Evasion is supposed to be very different from avoidance. For one, it’s clearly and unambiguously illegal. You evade tax when you are liable to pay tax, but deliberately do not.

In Australia, the distinction between evasion and avoidance has been long recognised by law. Yet in the past two decades the government has deliberately blurred the distinction in order to investigate tax havens and their clients.

One reason governments don’t like tax havens is obvious: money goes to the haven instead of government coffers. But perhaps a bigger reason is tax competition. Lower taxes elsewhere pressure governments to keep their own tax rates down.

The Organisation for Economic Co-operation and Development has been running a campaign to have developed nations harmonise their taxes as far as possible and end the “harmful” competition.

This international debate about the legitimacy of tax havens and the desirability of tax competition is the background to Project Wickenby and the case against Hogan.

For now, whether Hogan’s alleged use of offshore accounts is evasion or avoidance is an open question. While this question remains unresolved, the ATO’s violation of Hogan’s freedom of movement – a basic civil liberty – is obscene.

It is also a reminder that some of our regulatory agencies and government departments are vested with extraordinarily coercive powers. Since 2004, Wickenby investigators have been repeatedly accused of being aggressive and using intimidation as a weapon.

The Australian Securities and Investments Commission can be just as draconian. ASIC has a remarkable array of powers. It can compel people to answer questions with no recourse to the court system. ASIC runs private hearings, where people are made to give evidence under oath, with “as little formality and technicality” as possible – “formalities” such as the rules of evidence and the privilege against self-incrimination. The ASIC Act even says the regulator should do “whatever is necessary”.

A Senate report in 2000 found that a number of government agencies had stronger powers to enter and search private property than the federal police. In the Herald in July, Professor George Williams argued that many powers held by the Australian Building and Construction Commission “greatly exceed those given to any police officer in the nation”.

And the Rudd government’s Carbon Pollution Reduction Scheme Bill – had it passed – would have eliminated the right to silence and the privilege against self-incrimination, and reversed the onus of proof for suspected polluters.

The erosion of these rights and protections in order to tax and regulate should be a big concern.

These protections have developed over centuries to defend the rights of individuals against coercive and unjust state power.

Polluters deserve rights, too. So do unions targeted by the ABCC. And people suspected of corporate wrongdoing. And wealthy taxpayers.

The ATO has badly abused Hogan’s civil liberties. That’s bad enough. But more worrying is that many other regulators have the ability to do so as well.

The state we’re in: redrawing Australia

The Force from the North, Bob Katter, doesn’t do anything by halves.

His independent compatriot Rob Oakeshott has spent the last week pushing out ideas about parliamentary reform, a new politics of consensus, and Team of Rivals-style cabinet government.

Katter’s contribution has been a little more out of the box. On Thursday he proposed a wholesale redrawing of Australia’s state boundaries.

The plan is as follows:

Queensland gets neatly split in two, from about Rockhampton. South Queensland gets everything from Byron Bay to Bundaberg. North Queensland gets the rest, including, of course, Katter’s own electorate of Kennedy.

The Northern Territory loses a fair chunk of its south to an engorged South Australia, but its western border gets pushed out all the way to the ocean, taking the Kimberley and Broome from Western Australia. The new state – it’d be a state – would be renamed North-Western Australia, leaving Australia with an embarrassingly unimaginative bunch of state names.

Katter reckons new states would allow the country to better exploit the resources of the north, to become a food bowl, and accommodate 100,000 extra people.

Perhaps I’m taking Katter’s plan more seriously than anybody should. But you know what? It’s not a bad idea.

In 2010, it’s extremely refreshing to see a politician stand up for the very existence of states. From all sides of politics we’re far more likely to hear states are anachronistic relics of the 19th century – frustrating barriers to good policy. Not everybody goes so as far as arguing states should be eliminated entirely, but most are eager for the federal government to intrude further and further into state areas of responsibility.

One of Katter’s arguments for his plan is more important than it first seems. “I don’t know of anywhere else in the world where people are governed by a government thousands of kilometres away,” he told the Northern Territory News.

Indeed, one of the key ideas behind a federal system is that the nearer a government is to the people it governs, the more likely it will govern in their interests. The needs and desires of citizens in Victoria and the Northern Territory sharply diverge. Katter is arguing the needs of those in Coolangatta and those in Mount Isa, nearly 2,000 kilometres away, can be just as different. There is little reason to doubt it.

So when Katter talks about living in a “North Queensland paradigm” instead of an “Australia paradigm”, it actually makes a bit of sense. Many in his electorate no doubt agree; Katter’s two candidate preferred result was a massive 69 per cent.

Katter’s antipathy towards free trade and the economic reform of the last few decades has become very well-known over the last week.

Not only can states tailor their policies to the needs of their electorate, they act as policy incubators. Policies can be tested in an individual state before being adopted elsewhere. If policies don’t work, well, at least the damage is limited.

So more states, more experimentation.

If Katter wants North Queensland to get back into the state intervention game, then that’s North Queensland’s prerogative.

Across the border, the expanded and empowered Northern Territory could be a low tax, low regulation zone. We’ll see which state does best.

Reconfiguring the federation would be complicated, sure.

But we have a habit of believing our existing political arrangements are fixed and therefore eternal. The Australian federation is only just over a century old. And while our constitution has barely changed, the Commonwealth is doing things that would have astonished its authors.

Western Australian secessionism keeps raising its head, and will likely get louder as the rest of the country tries to expropriate the gains from mining in that state.

The boundaries of Australia are not written in stone. Nor should they be. Giving Bob Katter a pen to redraw the borders is radical, but not revolutionary.

Rob Oakeshott’s proposal for “consensus” government has been given serious attention, even though the corollary to his idea – having no opposition – is patently absurd. Well, maybe it’s not a bad idea if you’re engaged in total war against the Hun and the Empire of Japan, but it hardly seems appropriate in 2010.

At the same time Oakeshott is calling for consensus, he’s calling for the adoption of ideas from the Henry Tax Review and the Garnaut Climate Change Review. In other words, the most divisive reform proposals in the last few years.

Bob Katter’s plan for new states has the opposite problem. His plan seems absurd upon first glance – the NT News titled their article about his plan as “‘Cut snake’ Katter eyes Top End slice”.

But it makes a lot more sense than some of the other proposals being canvassed as we wait for a government to form.

Informal ballots: blame compulsory voting

Don’t blame Mark Latham’s 60 Minutes spot for the increase in informal ballots last Saturday.

Blame compulsory voting.

The 2010 election saw the highest number of informal votes cast in more than 25 years. In seven separate seats the informal votes were higher than 10 per cent of the total – all in New South Wales.

Latham’s muckraking reflected the general sense of disillusionment with the political choice in 2010. He was not the cause of it. If his spot was broadcast during, say, the 2007 election, Latham would have simply been dismissed as a posturing clown.

Well, more of a posturing clown.

Those who deliberately spoil their ballot are indicating they are not simply frustrated with the choices, but are frustrated they are compelled to choose. The informal vote is as much an indictment of the system as a protest against this campaign.

Sure, many informal votes are only accidentally informal. Most people want to place a valid vote, even if they don’t have enough interest to figure out how to do so.

Yet that should be damning enough.

In 1924, a Labor Senator said that the “the opinions of the negligent and apathetic section of the electors are not worth obtaining”. A bit harsh. But certainly it seems counterproductive to force the negligent and apathetic to give an opinion on something they are not interested in.

Many voters themselves feel they are not well-informed enough to make a choice. The extremely high number of undecided voters up to polling day is a clear sign the parties completely failed to engage many voters.

Indeed, much dissatisfaction with Election 2010 can be traced back to our compulsory voting system.

In 2005, RMIT Professor Sinclair Davidson and two other RMIT academics, Derek Chong and Tim Fry, examined the political consequences of voluntary voting. (They may have telegraphed their punch in the title: “It’s an evil thing to oblige people to vote”. And Davidson is an Institute of Public Affairs colleague of mine. Take that as you will.)

Davidson and Co. found the biggest losers from compulsory voting are the minor parties.

In the four federal elections the authors looked at (2004, 2001, 1998 and 1996), the Democrats and the Greens could have had a substantially higher vote share, if voting wasn’t compulsory. Certainly in the Senate, but often in the House of Representatives as well.

In 1998 the Democrats could have received more than 15 per cent of the Senate vote share, compared to the 8 per cent they actually did get. In the 2004 election, the House Greens vote could have jumped from 6.8 per cent to 9 per cent, and in the Senate from 7.4 per cent to 10 or even 14 per cent.

The academics also argued a voluntary voting system might slightly favour the Coalition.

Nevertheless, we should take their conclusions with a grain of salt. The parties prepare their election strategies with the quirks and consequences of compulsory voting firmly in mind. You go to election with the system you have.

The obsessive focus on marginal electorates is arguably a consequence of our ballot system.

The major parties by and large favour compulsory voting because it is more efficient for them. Marginal electorate campaigns are the electoral equivalent of Roman divide-and-rule.

In a voluntary voting system, they’d have to work to energise not just marginal voters, but their base as well. You cannot expect unthinking loyalty from your supporters to get you into government. Your supporters might stay at home.

At the very least, all parties would be forced to rethink their strategies – and policies – to suit.

There’s another important argument against compulsory voting – we ought to have the freedom not to vote. In one of this country’s few libertarian classics, Rip van Australia, John Singleton claimed it is the “ultimate contradiction for a supposedly free and democratic society to be founding on a system of compulsory voting.” But Australia is a very utilitarian country. Arguments about rights and liberties don’t get very far here.

Many people claim that compulsory voting gives elected governments legitimacy.

Put aside for a moment the implicit belief that the majority of democratic governments overseas are therefore somewhat illegitimate. If legitimacy is what we’re seeking, then why not compel citizens to take turns running for parliament (like jury duty for Canberra) or insist they join a political party?

Absurd, of course, but the legitimacy argument is too vague to be useful.

The independents say the result of this election reflects a desire in the community for parliamentary reform. And the Greens claim the preferential system conceals their party’s electoral support.

They might all want to rethink compulsory voting.

Chris Berg is a research fellow with the Institute of Public Affairs and editor of the IPA Review. Follow him at twitter.com/chrisberg.

Moving forward mantra Gillard’s biggest mistake

In retrospect, Julia Gillard’s big mistake wasn’t calling the election so quickly, or negotiating with the miners, or even announcing the climate assembly.

It was using the phrase “moving forward” 20 times at her election announcement.

The sense that Gillard is stage-managed and unreal has lasted almost through to polling day. You can tell the Labor Party is still concerned about it, and the Coalition is convinced Gillard’s public image makes Tony Abbott look very good.

It accounts for – although does not really explain – Labor’s bizarre decision to pretend Gillard’s campaign launch speech was off-the-cuff. That backfired when the press cunningly took a photograph of her typed speech on the lectern.

Off-the-cuff-Gate is completely inconsequential. But the fact that, as late in the campaign as the campaign launch, the ALP thought it had to deceive for Gillard to be seen as passionate shows just how damaging this initial impression was.

After all, it had been a good two weeks since ‘real Julia’ took over.

If Abbott initially struggled because the Liberal Party had spent the last twelve months preparing to defeat Kevin Rudd, Gillard suffered because it appeared ALP strategy consisted of the phrase “moving forward” underlined twice on the back of an envelope.

Perhaps as a consequence, the Labor policies announced in the first few weeks were gimmicky and easily ridiculed. Not just the climate assembly – an insult to the national intelligence, even considering the carnival atmosphere of the global warming debate – but also the $2,000 trade-in payment for gas-guzzling cars, which comes with its own derogatory nickname, cash-for-clunkers.

That’s not to say there haven’t been strong ideas from the Labor side.

Gillard’s education proposals are easily the biggest and most substantial of the campaign. It helps that they’re actually good too. Performance pay for teachers, devolving greater budget and hiring powers to principals, bonus funding for schools showing the greatest improvement – these are policies which push us closer to a dynamic and competitive education system. And, dare I say, a bit of a “market” one as well.

You get the impression Gillard is genuinely energised by education policy.

That, and WorkChoices was bad.

For a short time last year the causes and consequences of the Global Financial Crisis sparked a passionate ideological debate in Australia. But the sparring between Malcolm Turnbull and Kevin Rudd over the role of the government in the economy is a distant memory.

Abbott and Gillard were barely participants in the debate over the stimulus.

The two current leaders’ views about government aren’t that different. On many issues they converge. Abbott is a big government conservative. Gillard is a market-leaning social democrat.

The attempts during this campaign to revive the stimulus debate have seemed hollow. Abbott, for his part, is much more comfortable talking about pink batts and school halls than Keynesian fiscal policy.

And Gillard has struggled to fully adopt Kevin Rudd’s policies as her own. Moving forward provides little opportunity to look back. Not only the stimulus: we’ve heard very little about Labor’s expansive health reform plan.

One notable side issue of this campaign has been gay marriage.

Neither major party has altered its position at all, of course. But the consistency with which gay marriage has been pushed at the candidates at every stop shows it is now a mainstream question.

Both Gillard and Abbott have had to fall back on reminding listeners that their governments have made substantial progress removing lots of other discriminatory policies against gay people and gay couples. They’re right, but marriage has gained almost totemic status in this campaign.

It’s hard not to see Election 2010 as a turning point. The case against same-sex marriage is looking weaker and weaker, and opposition to it looking more like stubbornness than principle. International experience suggests that gay marriage can be legalised without complete social and moral disintegration – after all, doing so makes it legal, not mandatory.

Gay marriage is unlikely to swing many votes. But Julia Gillard’s atheism makes her hostility to altering the Marriage Act look somewhat insincere – a bit too politician-like, a bit too focus-grouped.

For better or worse, that’s not a charge you could level at Tony Abbott.

Abbott is a self-described weather vane, sure. But when he changes his mind on policy, even for purely political reasons, he’s the first to tell you about it. Abbott has always treated his political career as an opportunity to share his feelings and grow. It’s very odd. But it’s disarming.

All year, the Liberals had been planning to depict Kevin Rudd as a poser who was more interested in polls than effective governing. Abbott was to be the opposite: the more-real-than-real candidate.

Who’d have thought that plan would work just as well against Julia Gillard?

NBN: Crippling government regulation to blame

At the Labor Party launch on Monday, Julia Gillard made the National Broadband Network central to her pitch for reelection.

And if you were introduced to the broadband debate this year, you’d be forgiven for thinking there wasn’t really an alternative to the government’s plan.

Communications Minister Stephen Conroy described the opposition’s broadband plan as a “failure of imagination”. The fact that this seems like a powerful critique shows how stilted the debate over broadband has become – apparently the problem with the Coalition’s broadband proposal is it doesn’t soar with the eagles.

But think back: just a few years ago Telstra was begging the government for permission to build its own super-fast broadband network. At no cost to taxpayers. Completely free of government subsidy. If the previous government or the Australian Competition and Consumer Commission had allowed it, there’s a good chance the private sector could have been building the broadband network already.

After Tony Abbott’s performance on the 7:30 Report last week, you bet he regrets the previous government didn’t take broadband policy off the political table.

There was a stickler of course. Telstra was asking for a regulatory holiday – that is, to exempt its new fibre investment, for a time, from the requirement to share it with its competitors. Failing that Telstra wanted the ACCC to nominate the price that the company would be compelled to share its new network, before they built it. After all, telecommunications networks cost a lot of money. The ACCC sets the price competitors pay to access Telstra’s network, and Telstra wanted some assurance it would be able to charge a price sufficient to recoup its investment.

The ACCC refused to do so. The Howard government wouldn’t make any legislative changes. Telstra ramped up its rhetoric, attacking both the government and the ACCC chairman, Graeme Samuel.

Into this bitter quagmire stepped the Labor Party and Kevin Rudd’s open chequebook.

NBN boosters like to say there is a “market failure” in telecommunications. But the government’s regulatory framework is the problem. It’s not the marketplace which has failed to deliver broadband. Government failure has.

The NBN plan tries to sidestep the regulatory failure, by having the government assume responsibility for telecommunications investment now and into the future. That’s exactly what Telstra’s privatisation, way back in the 1990s, was supposed to leave to the market.

So Australia is still struggling to break away from a century of nationalised communications. And doing so will mean making peace with an independent Telstra.

There is widespread anti-Telstra sentiment – not only from the Labor Party, but also from rural Liberals and the National Party, who imagine the high cost of providing telecommunications services in the bush is just thinly disguised anti-country bigotry.

On the other hand, many Liberals are understandably reluctant to be brutal to Telstra because the Howard government encouraged everybody to dump their life savings in Telstra shares.

The Labor Party has taken to presenting broadband as if it is simply a giant present from government to its people, and anybody who objects to the NBN must hate the internet. And the opposition, afraid of looking too close to Telstra, is trying to ape Labor’s approach without completely surrendering its debt and deficits attack on the government.

At least it’ll be cheaper, I guess.

Here the absence of a cost benefit analysis for the National Broadband Network is telling. Does anyone doubt the government wouldn’t like such an analysis (if it was flattering) to help defend their policy? Or NBNCo? Or the many firms which will get some of the huge amount of money the government is about to dump into the telecommunications sector?

As the tech publisher Grahame Lynch said in The Australian last week, it is “astonishing that not one … has mustered the modest resources required to prepare a credible cost-benefit analysis that attempts to measure the claimed externalities for the NBN in areas such as telecommuting, e-learning and telemedicine that are bandied about ad nauseam.”

It seems certain at the very least Treasury would have made some effort to look at the costs of the NBN relative to its benefits.

If it truly hasn’t happened – if Treasury really haven’t bothered to investigate whether this investment is worth the money – then the government is extraordinary negligent. Let’s give them the benefit of the doubt, and say they’re not, and the results just haven’t been released.

So the absence of the cost benefit analysis in the public sphere is a very strong hint the government’s broadband spend doesn’t really have much of an intellectual case. Julia Gillard and Stephen Conroy can talk all they want about how broadband will boost e-health, productivity, education, and things we haven’t imagined yet.

But if only the government had dealt with its crippling telecommunications regulations, the market could have been boosting all that already.

Budget honesty charter corrupted

IT’S that time in the election campaign when it disintegrates into arguments about which party has been most careless ensuring their budget numbers add up.

The Charter of Budget Honesty, introduced by the Howard government, allows the opposition to give Treasury its election promises to check the policy costs are correct. If they don’t, the government clobbers them for avoiding scrutiny.

But this week Treasury analysis of the opposition’s promises was leaked to the press by someone in Treasury or Wayne Swan’s office. Swan has played down the leak’s importance. The Treasurer claims he just wants the opposition to submit its policies for his bureaucrats to dissect. That’s because he knows this part of the charter overwhelmingly favours incumbent governments.

The government has had three years to consult with Treasury’s nearly 1000 staff about future policies, test policy assumptions, and get Treasury’s recommendations. Much government policy is formulated by Treasury in the first place.

By comparison, an opposition is just a few people in a room thinking up ideas.

As Ross Gittins wrote in 2004, when it was Peter Costello savaging the Labor opposition over its policy arithmetic: ”The government is largely feeding back to the bureaucrats their own costings, whereas the opposition runs a high risk of slipping up somehow and being monstered by the Treasurer.”

From government, Labor is playing the same game against the Coalition that, for a decade, the Coalition played against Labor.

Swan knows it well. In 2007, he too waited to the last minute to submit his policies.

But this isn’t just about policy costing. The integrity of Treasury is in question.

Secretary of the Treasury Ken Henry masterminded the government’s controversial response to the financial crisis. Treasury’s role formulating the stimulus package has been highly political. It even had to release a statement admitting a graph in the 2010-11 budget, which the government claimed showed the success of the stimulus, was misleading.

The Coalition has accused Henry of partisanship for years. In May, Joe Hockey refused to say whether Henry would keep his job under the Coalition. Henry and his subordinates are political players now. Their fortunes are coupled to the fortunes of the Labor government. Shadow finance minister Andrew Robb said Treasury was compromised by a ”political agenda”.

The leak seems to confirm this. Sure, the opposition’s figures would have been released eventually (that’s the point), but it’s likely someone in Treasury is openly batting for Labor.

It’s concrete evidence of the corruption of the charter.

Hockey should commit to sacking Henry if he wins government, and leave Coalition policies to be scrutinised by the press and public.

Without the incumbent’s resources, opposition is hard enough. The Charter of Budget Honesty is a trap, cynically laid by the Howard government and now being embraced by the Gillard team. Hockey is right to refuse to walk further into it.