Oz Politics Blog

In today’s Oz it was reported that the Special Minister of State, Eric Abetz, will tonight announce changes to Australia’s electoral laws.

According to the Oz, the changes are:

• Above the line preferential party voting for the Senate
• Photo identification and proof of address to get on to the Electoral Roll
• (Possibly) four year terms for the House of Representatives
• Voluntary voting

In respect of the last point, the Oz reported, “Nationals Senate leader Ron Boswell said his party would oppose voluntary voting”.

Compulsory voting was first introduced into Australia at the Queensland state elections in 1915. It was introduced at the Federal level in 1924. Then Tasmanian and Nationalist Party Senator Herbert Payne introduced it into Parliament as a private members bill. At the time, the bill had bipartisan support. It passed the House of Representatives in less than one hour, and no divisions were called in either house. Implicitly, the private members bill had the support of the then governing Nationalist-Country Coalition, the forerunner of today’s Liberal-National Coalition. Compulsory voting (or more accurately compulsory attendance at elections) has been a feature of all Federal elections since 14 November 1925.

The big winners from compulsory voting have been the independents and minor parties. Under compulsory voting they attract protest votes from those who would otherwise sit out an election. They also score the preferences of the major parties, as the major parties tend to preference each other last. In terms of the major parties, the winners are more difficult to assess. While it is contested, more commentators than not think that Labor and the Nationals have been the beneficiaries to date, as both parties have sizable constituencies who might be less likely to vote if it were not compulsory.

Turing to that other compulsory, I am interested to see whether the government will seek to remove compulsory preferential voting. As a teenager in the 1970s, I remember being regaled by an (very left-of-centre) aunt who was outranged that preferential voting meant the right side of politics got their vote to count twice, while the Labor side only got their vote to count once. How things have changed with the rise of first the Australian Democrats and then the Greens. My guess is that today a move to optional preferential voting would do more harm to Labor than the Coalition.

A short history of the recent changes to electoral laws is here.

Update: Antony Green has a fantastic piece on voluntary voting published at Crikey. Also at Crikey, Christian Kerr writes on four year terms.

The Australian Parliamentary Library has released some interesting papers for psephologists:

• House of Representatives by-elections 1901-2005;
• Northern Territory election 2005;
• Timetable for the next Australian elections;
• Parliamentary allowances, benefits and salaries of office; and
• The annual allowance for senators and members.

The by-election paper is fascinating; full of interesting information. For example,

• On 34 occasions (24.1 per cent) the party complexion of a seat has altered at a by-election.
• Twenty-four of these (17.0 per cent) have been in seats lost by the government of the day. The most recent case was the loss of Ryan by the Coalition Government to Labor in 2001.
• Four of the losses (2.8 per cent) have been by the Opposition of the day. The most recent case was the loss of Cunningham by Labor to the Greens in 2002.
• The average two-party preferred swing against the government of the day has been 4.0 per cent, while the average swing in government-held seats was 5.0 per cent against the government.
• In the period since 1949, the largest two-party swing against a government occurred in Canberra in 1995 when the ALP Government’s vote fell by 16.1 per cent. The largest swing to a government was 16.2 per cent, which occurred in the Coalition Government’s seat of McPherson in 1981.

The research note on the Northern Territory covers the basics of that electorate. An interesting tit bit I had not appreciated was:

As a result of the 2005 election, the NT now has 10 female [of 25] members in its Legislative Assembly. This is believed to be in the top 10 examples of female parliamentary representation in the world.

The paper on election dates had these two useful tables:

The first allowances paper explains how parliamentarians are paid. The second allowances paper shows a significant real increase in payments to parliamentarians over the past 20 years.

Postscript: while I have corresponded with the Parliamentary Library, I have had not had a substantive response to my criticisms of the research note on poverty rates by electorate.

My last post has produced the usual cries that Morgan must be wrong. I got the usual arguments saying the real Coalition two-party preferred result is something like Morgan plus five. Someone even suggested a fudge factor of plus ten.

I am not convinced. While I think Morgan may be to the left of the population parameter, it may well be less than five percentage points.

I agree that Simon Jackman’s work on the lead-up to the last election suggested that Morgan under-estimated Coalition support by 4.7 percentage points and Newspoll under-estimated it by 2.7 percentage points on average. Jackman found that ACNielsen was pretty well on the money.

But simply because that happened then, it does not mean it is happening now.

Anyway, it is illogical to apply Jackman’s bias-set [4.7, 2.7 and 0] to the current trend-lines. While ACNielsen was on the money in the lead-up to the 2004 election, it is now hovering off to the left with Morgan. It is simply not consistent. If anything, ACNielsen is currently validating Morgan, and Newspoll is out of sync.

Furthermore, if you go back and look at the polls in the lead up to the 2004 election, it is possible there was a late swing to the Coalition (starting in early August) that was accurately picked by ACNielsen, but largely missed by Morgan and Newspoll. If you accept this thesis, it also could be used to argue that currently Morgan is doing a better job than Newspoll at calling the mood of the electorate.

Now don’t get me wrong. I am not saying that ACNielsen is right and everyone else is wrong. I have two concerns with ACNielsen at the moment. First, I think it has the Green primary vote implausibly high. Second, I think it is sheeting too many non-Coalition-non-Labor preference votes away from the Coalition. Indeed, I suspect that along with Morgan it is tracking to the left of the population parameter.

I am just not convinced that Morgan is as far out as five points. Besides, I put little store in simplistic rules like Morgan plus five.

There are three great predictive indicators for electoral outcomes:

• the opinion polls;
• the betting market; and
• the key economic indices (especially unemployment and inflation rates, but also interest rates, real wages, and growth in Gross Domestic Product (GDP)).

While psephologists argue about which of these three is the more reliable predictor, one thing is certain: on the economic indices Howard has had a dream run. The last recession (two quarters of negative GDP growth) occurred in 1990-91. The recession we had to have was almost 15 years ago. The Australian unemployment rate has been falling steadily since its peak in the early 1990s and is now comparable with the rates in Japan and the United States. Inflation has been relatively stable in the 2 to 3 per cent band over the past 5 years. Real wages have been growing at a faster rate than under the previous government. And interest rates have been stable and low since the mid 1990s. (You can check out the relevant charts from the Reserve Bank of Australia).

According to the SMH, Labor MP Rod Sawford predicted the 2004 outcome on the basis of his simple model.

[Sawford] developed a model for predicting election outcomes, which he says is infallible. It demonstrates the veracity of the political maxim, “it’s the economy, stupid”, beloved of the Clinton campaign in 1992.

Looking at just three indications of economic health - interest rates, inflation and unemployment - Sawford says election results can be predicted. If all three go down over a term, the Government will be returned; if all three go up, the Opposition will win.

Last year all of these economic factors were lower than in 2001, so Sawford was confident the Government would be returned.

This week the Reserve Bank of Australia noted that “the likelihood of further monetary tightening being required in the months ahead had increased.” Decoded, this means an interest rate increase is likely in order to fight the risk of inflation associated with full employment and the country running out of available workers. The market has already factored into its thinking two increases of a quarter of one percent each between now and 30 June 2005.

Because of the link between economic indices and electoral outcomes, a few commentators have wondered whether the star of electoral fortune may finally shine upon Labor and Kim Beazley. Many in the Labor party feel cheated. They believe Howard has only had a dream run in the economy because of the economic foundations established by the Hawke-Keating governments. Doubtless there is some truth in this assessment (see here for example). But it would be equally wrong to attribute all of Howard’s success to the Hawke-Keating years.

In the sometimes unfair game of politics, bad economic performance typically precedes a change government (regardless of whether the performance was locally induced or driven by international factors). Remember Whitlam to Fraser, Fraser to Hawke, and (albeit delayed by three years) Keating to Howard. Some in Labor are now hoping the vicissitudes of the market will herald a transition from Howard to Beazley. In terms of the key indicators noted above, this could happen in one of two ways. An overly tight setting for monetary policy may induce a recession or at least an increased unemployment rate. However, insufficient tightening of monetary policy could see inflation break out of the 2-3 per cent per annum target range as the economy approaches full employment.

Personally, I am not convinced that the threat to national economic wellbeing is as big as some predict (or at least hope for). The Australian unemployment rate is currently running at 5.1 per cent. In New Zealand it is 3.6 per cent and inflation is still within the 2 to 3 per cent band. (Admittedly interest rates in New Zealand are around 1.25 per cent higher than Australia). This suggests that while there may be some sectoral hot-spots, there is some way to go before a low unemployment rates begin to drive significant inflationary pressures in Australia.

Second, there is a heightened sensitivity to interest rate movements in the economy. Because of an unusually high level of household debt, any interest rate increase is likely to result in a higher reduction in aggregate demand than has been the case in the past. This means the Reserve Bank need only apply a modest interest rate increase, with a correspondingly modest impact on business cost structures, but a larger impact on aggregate demand. In plain-English, when it comes to managing inflationary pressures, interest rate adjustments are not as blunt an instrument as they have been in the past.

All in all, I think it is far too precipitous to suggest that the Reserve Bank’s foreshadowing of the possibility of a small tightening in monetary policy heralds a change of government in 2007. No one is suggesting a return to the interest rates of the late 1980s and early 1990s. While there are risks, they currently appear easily manageable with limited impact on the economy.