Oz Politics Blog

Forgive the pomo heading, but I have been developing my own aphorism for explaining the behaviour of the Australian electorate. The challenge I had set myself was to find a pithy statement that could explain (and perhaps predict) when a change of government is likely. However, before I explain what I mean by “inertia, proximity and alterity” I will quickly recap some of the conventional rules of thumb for Australia politics (noting that there is some overlap in the following formulations).

• Oppositions do not win; governments lose
• Australians do not tend to change government in the absence of a recession, or policy failures
• Inexperienced Opposition Leaders usually lose. Recession-free and debacle-free Prime Ministers usually win
• Governments lose when the economy turns sour, or when ministers are found to be corrupt, grossly incompetent or excessively arrogant
• Once elected, governments tend to serve at least two and often three or more terms
• Governments which win their first term by the barest majority, and provided they have not stuffed up, often go on to a win a more substantial majority in their second term

There is much about this conventional wisdom with which I agree. I have borrowed heavily from it for the first term in my formulation: inertia. What do I mean by inertia? Governments that are seen to be performing well tend to be re-elected. The aphorism - “If it ain’t broke, don’t fix it” - explains much in the Australia polity. My basic assumption for any election, all other things being equal, is against a change of government. The corollary is that oppositions do not win elections, governments lose them.

That which causes governments to lose elections brings me to the second term of my formulation: proximity. I contend that voting behaviour is largely driven by selfishness and personal circumstances. When things are going well for them, voters will stick with the government of the day; and when things are going poorly, they will punish the government of the day. It is not an iron clad rule — for example, governments are sometimes punished for corruption, arrogance or incompetence. But it is a useful rule of thumb.

Using this rule of thumb, I have dismissed David Hicks and the Iraq war as significant vote-drivers in the next election (the have insufficient proximity: they do not personally affect enough people with much impact). Furthermore, I have argued that water will be a significant issue, not because of climate change as such, but because the drought necessitated water restrictions have affected the backyards of the mum and dad voters. Many have argued that WorkChoices is another issue with proximity for the next election.

The final term in my formulation is alterity: is there a real choice? Is there an opposition and an opposition leader that embodies an acceptable alternative? If you take the 1993 Federal election, the recession we had to have was an issue of proximity but Hewson was not an acceptable alternative. The 2007 NSW election between Morris Iemma and Peter Debnham was another with issues of proximity but little positive alterity. Put simply, it takes both issues of significant proximity and positive alterity to overcome government inertia.

So there you have it: my rules of thumb for assessing a likely election outcome.

I have played a bit more with my earlier hypothesis that the 1996 election was a seller’s election, and should there be a change of government this year, it would be a buyer’s election.

The following graph compares the net satisfaction rating for the prime minister and the opposition leader. To help situate the chart, the elections are indicated with the vertical purple lines and the changes of opposition leaders are indicated with vertical orange lines.

In the next graph I have subtracted the net satisfaction rating for the opposition leader from the prime minister’s net satisfaction rating. This differential yields a net satisfaction bias to the prime minister. A positive number suggests the prime minister is more satisfying. A negative number suggests the opposition leader is more satisfying.

In the following graph, I have overlaid primary voting intention for the government with the Prime Minister’s net satisfaction rating.

In the Keating years, the government primary vote was relatively higher than the Prime Minister’s satisfaction rating. In the first two Howard terms they were equal (or I have made them that way in my alignment of the graphs). In the last two Howard years, the government primary vote is often relatively lower than the Prime Minister’s satisfaction rating. It is a little speculative, but this looks consistent with the notion of a selling mood under Keating, and buying mood for much of the time after the 2001 election (at least relative to the Keating period). It is also worth noting that the electorate would not buy or sell when the trade (Hewson/Latham) was too expensive.

Any comments?

I have resisted the 1996 versus 2007 election comparison for some time; largely because they feel like very different elections to me. My other comparisons with 2001 and 2004 were to test whether Howard would repeat his earlier performances and “come from behind to win” in 2007. I thought there was not much to learn from a 1996 -v- 2007 comparison. As it turns out, I was wrong. However, the big lesson was not in the similarities (which are superficial), but in the underlying differences with the attitudinal polling.

I will come to that lesson shortly. First, let’s look at the similarities.

When you consider the primary voting intention polling in the lead up to the 2 March 1996 election and compare it with the lead-up to a hypothetical 15 December 2007 election, there are strong similarities. Both opposition leaders were installed around one year out from the election date. John Howard, in 2007, is polling close to but a bit below Paul Keating in 1995-1996. Keven Rudd, in 2007, is polling close to but a bit better than John Howard in 1995-1996. This can be seen graphically.

Notwithstanding these similarities, the attitudinal polling tells a very different story, and suggests a radically different dynamic is at work in the two election campaigns. Let’s begin with the satisfaction ratings.

John Howard’s satisfaction rating in 1995-1996 is very similar to his satisfaction rating in 2006-2007 thus far. The big difference is in Rudd’s satisfaction rating, which is much higher than Keating’s for the same period.

With the dissatisfaction ratings, Howard’s is around 10 points higher in 2006-2007 than it was in 1996-1997. But the big difference is between Rudd and Keating. Rudd is some 40 to 50 points ahead of Keating, in the lead up to this year’s election.

These satisfaction and dissatisfaction ratings can be combined into net satisfaction (ie. satisfaction minus dissatisfaction) ratings as follows.

It is in the net satisfaction ratings that we see the big difference between 1996 and 2007.

In 1996, John Howard was essentially neutral with the electorate in net-satisfaction terms. Yet in 1996 Keating was a big negative. The 1996 election was not so much about buying Howard, it was selling Keating. Consequently, I am going to categorise the 1996 election as a selling or disposal election.

In 2007, John Howard is still essentially neutral with the electorate in satisfaction terms. But Rudd is a significant positive with the electorate. This suggests that 2007 is shaping up as a buyer’s election. The electorate looks like it might just be in the mood to buy a new prime minister (rather than sell the old one). If there is a change of government in 2007, the motivating factor in the trade will be the purchase and not the sale. For the sake of the argument, I will categorise 2007 (as it looks so far) as a buying election.

This is a new and different dynamic in comparison with 1996. While the 1996 election may have been about taking to Paul Keating with a baseball bat, the 2007 election campaign (so far) is not about baseball bats. If the motifs for 1996 were hate and vengeance, in 2007 the motifs are love and attraction. Coalition supporters who take comfort from the absence of a baseball bat have missed the new dynamic at work.

If I can overload the metaphor, commentators should focus on the pick-up and not the “ex-” being dropped. They should focus on the exchanges of flowers and chocolates, and not the absence of baseball bats.

The scale of the new dynamic can be seen by subtracting the net satisfaction rating for the opposition leader from the prime minister’s net satisfaction rating. I have called this value the bias to the prime minister in satisfaction. In both the 1996 and 2007 campaign it was and is negative. That is to say, the satisfaction bias ran in the direction of the opposition leader. In 2007, the satisfaction bias against the prime minister is much starker than it was at this point in the 1996 election campaign.

There is one final graph I want to look at, largely to note that it offers little explanatory power. It relates to the polling question on who would make the better prime minister. That question favoured Howard in the first eight months prior to the 1996 election and Keating in the last four. But it had no impact on the primary voting intention. I suggest we ignore the question this year as well.

Interesting question: if I have called the new dynamic correctly, what can the Coalition do to woo back the electorate?

• Should the Coalition simply do nothing and wait for the wayward electorate to return to its first love?
• Is it a fear campaign along the lines of, “be careful with Kevin, you know he has the pox”?
• Does John show some more of his policy leg in an effort to outshine Kevin’s allure? Or,
• Should the Coalition opt for the complete makeover with Peter Costello as the new suitor?

Or is it all beyond repair with the electorate saying, “it’s over John; but don’t blame yourself — this is not about you, it’s about me”?

I have been thinking about Kevin Rudd and Therese Rein’s recent difficulties and our expectations on the life partner of the Australian prime minister. I would like to think in this day and age the partner of the prime minister could be a successful and independent business person in his or her own right. However, the more I have thought about it, the more I think it very difficult generally, and in this case impossible.

First, however, the good news. I think it would be possible for Kevin Rudd to be Australia’s foreign minister, or even Australia’s defense minister, and for his wife run a job placement business that derives it largest share of income from the government. I think the declaration mechanisms for managing conflicts of interest in these circumstances are sufficient. And when employment services matters are discussed in Cabinet, it would not be too debilitating for Kevin to leave the room.

But if Kevin was the employment minister, there would be just too many conflicts of interest to contemplate. To begin with, there are a myriad of conflicts associated with policy design. If the Department of Employment recommended a funding parameter change, Kevin may know how that how that would affect his wife’s business or which parameter change would play to the competitive advantages of his wife’s business. If a Labor government was considering re-nationalising the employment services market (and I am not saying they would), would Kevin be an impartial minister? Specific funding decisions are no less vexed. How would staff of the department react — even if there was no hint of pressure from the minister — when the minister’s wife applies for funding?

At the heart of the conflict is the nature of marriage. I joked with my partner when we discussed this that the nature of marriage could be summarised as, “what’s yours is mine and what’s mine I am keeping”. While Therese may be the sole reason the company she founded has what some of the papers estimate as $180 million in net assets, Kevin is a beneficiary. If she sold up tomorrow, he would share a lovely retirement fund. By virtue of his marriage, Kevin has significant business interests in known policy area.

Furthermore, even if Kevin was absolutely scrupulous in his dealings as the hypothetical employment minister, the media would test and pressure him at every turn. At every media conference announcing a new policy, he would be asked how his wife’s company benefited from the decision. Furthermore, it would only be a matter of time before some spurious correlation was found and an impropriety alleged. It is simply not an environment a minister could work in.

As prime minister, the political testing and pressure would be even more intense. And not just on Kevin. Every one of Therese’s business decisions would be tested. She is just as newsworthy in the media’s quest to sell papers. Every disgruntled ex-employee would be interviewed. Cheque-book journalism would guarantee a constant stream of criticism. This criticism would not only be debilitating for Kevin as prime minister, it would harm Therese’s business interests as well.

In short, there are two core problems. The first relates to the potential for conflicts of interest, and the difficulties in avoiding the perceptions of a conflict. The second is the potential for spill-over embarrassments and ongoing media harassment for both partners. In this case, the roles of prime minister and business leader providing services to government cannot be accommodated successfully within the one marriage. As a consequence, the Rudds faced four options:

• Do nothing and have the conflicts, spill-over embarrassments and media harassment continue to impact negatively on both of their career aspirations
• Kevin gives up his aspirations to be Australia’s next prime minister
• Therese gives up her role as a successful and independent business person
• Kevin and Therese get a divorce

There were no “win-win” options here.

There is nothing new in this. Married couples across the nation routinely make joint decisions that favour one partner’s career or opportunities while reducing or limiting the opportunities or outcomes for the other partner. Life is like that. How many times have you heard stories like this: he wants the overseas posting, but she wants to stay with her job in Australia. If they travel, she will be out of the labour market for three years. If they stay, he is in a dead-end job, but her career will flourish. Because of the independent careers they have chosen, Kevin and Therese had no choice but to have one of those difficult family conversations.

Does this mean the partner of the prime minister must be unemployed? I don’t think so. There are many jobs where the conflicts of interest are minimal and where the potential for spill-over embarrassments are also minimal. If Therese were a school teacher, lawyer or doctor (for example) it would be possible for her to continue working after Kevin became prime minister. While the nature of marriage was part of the problem, so was the domain and scale of Therese’s business interests.

If I have it right, Newspoll is out on Tuesday, there is every chance that Morgan will publish a one weekend poll on Friday, and ACNielsen is out next Monday. When the polls come out, the papers will either say there has been a post Budget bounce for the government or there has not. Both headlines would be fatuous. Both analyses would be flawed.

It is nigh on impossible to assess a Federal Budget by a single poll on the following weekend. Anybody who attempts it either does not understand voter intention polling, or is deliberately setting out to deceive you. My advice is: don’t get sucked in. Don’t fall for the pop-psephology that will attribute a move (or the absence of a move) from one poll to the next to this event or that. It is rarely true.

To begin with, most voters do not analyse a Federal Budget between Tuesday night and Friday and then adjust their voting intention in time for the pollster on Saturday. The reality is that most voters are disconnected from the political process most of the time. Budget week is no different.

The real problem with voting intention polls are the stochastic perturbations (random noise) associated with polling. In practice, voting intention polls have a much larger margin of error than that predicted by statistical theory. For error purposes, a sample of 1000 voters would be better treated as if it were only a sample of 100 people and perhaps smaller. Andrew Leigh and Justin Wolfers have estimated that “the true standard error of the polls is equivalent to a poll of 25 voters that suffered only from sampling error”. As a consequence, any single poll result is fairly likely to fall almost randomly within plus or minus three percentage points of the actual population parameter.

With a high noise factor and a low underlying trend, if you take all possible consecutive poll findings, according to their probability of occurrence, it is entirely possible that the random noise would suggest a trend that does not exist in the population. Take, for example, the following Newspoll data from 2001 from March to immediately before the Tampa episode at the end of August. The trend over the period was a fall of 0.4 percentage points per fortnight in Labor’s two party preferred vote prediction. Of the 13 data pairs during the period, only four pairs had a declining trend of one per cent. Four of the data pairs suggested a dramatic improvement in Labor’s fortunes and five suggested a dramatic decline. None of the data pairs suggested the most accurate fortnightly trend prediction of zero (when you consider that Newspoll publishes it results in integer percentage points).

In summary, none of the consecutive data pairs gave the most accurate trend result possible. Only 30 per cent of the data pairs for this period gave a reasonable prediction of Labor’s fortunes. But similarly, 30 per cent of the pairs yielded a trend line in the opposite direction to the underlying trend in the population. 40 per cent of pairs over-estimated Labor’s demise in 2001. All up. 70 per cent of the apparent trends from the consecutive data pairs were misleading.

Whatever the papers say about a post Budget bounce, don’t believe it. The media pundits cannot reliably interpret two consecutive polls when the underlying population trends are likely to be small, and the random noise range associated with the polls is a number of multiples of the underlying trend. No-one can.

Please note: I am not arguing that the post Budget polls would be meaningless. All I am arguing is that individual voter intention poll results must be considered in context: within the time series, in comparison with polls from other pollsters, against the backdrop of political events, and against other information sources (eg. betting markets and qualitative polling). You will need a number of polls following the Budget to come to an informed view about how the government is travelling post budget, and whether that is different from how it was traveling prior to the budget. Unfortunately, you only need one post-Budget poll to come to an uninformed view on the efficacy of the Budget.

To counter the influence of random noise, I tend to place more faith in the moving average, than any particular poll result. The six poll moving average I use with Newspoll and Morgan, and the three poll average I use for ACNielsen, are designed to cancel out some of the random noise. It is not a perfect solution, but it is far better than over interpreting an individual poll result.

Two of the three moving averages suggest that the trend to Rudd since December 2006 has come to an end. It is impossible to tell whether the polls will plateau at this point, guaranteeing a Labor landslide; move slowly back to the government, giving Labor a narrow to comfortable victory; or move decisively back to the government and a fifth Howard term.

Links: Previously I have posted on my rules of thumb for interpreting polls.