Australia’s ‘price’ on global markets will fall this week – and not because of the horse-trading over policy that will take place with the independents in the lower house.
It’s because for the first time the loss of the balance of power in the Senate has been combined with a dead heat in the House of Representatives. It means that whoever forms government won’t be able to claim a mandate for the passage of bills through the Upper House. That suggests either paralysis, or inordinate power to a minor left-wing party will be the result.
A minor party and/or independents being in control of the Senate is normal for Australia – in fact one party having control of both houses is both unusual and slightly dangerous. But the combination of a hung Senate with a hung House of Reps is unprecedented. To the extent that international investors think clearly about such things, it will be the potential for long-term instability that this implies that will frighten them today.
Obviously there is some potential for craziness in the short term negotiations with the independents, but listening to the three former National Party independents from NSW and Queensland on the 7.30 Report last night, it was hard not be impressed.
In fact the only real danger seems to be Bob Katter’s protectionism, but even if he succeeds in getting some rural tariffs reintroduced it’s hardly the end of the world.
The Greens member for Melbourne, Adam Bandt, has already committed to Labor, so he appears to out of the horse-trading, and Tony Crook in WA, the new National Party member for O’Connor, has apparently put his vote up for auction – $850 million worth of regional services from either side will do the trick.
It seems that Tony Windsor, Rob Oakeshott, Bob Katter and Andrew Wilkie (if he wins in Denison) will negotiate on policies.
On the 7.30 Report last night, Kerry O’Brien asked them to nominate their key policy issues.
Katter said: “There is a different paradigm needed – rural Australia is closing down: 90 per cent of the continent is occupied by not many more people than were here when Captain Cook arrived.”
He mentioned, approvingly, that the Country Party tail used to wag the Liberal Party dog, and that Jack McEwan and Ted Theodore used to say that if we didn’t occupy and develop the whole country it would be taken off us.
“That’s the paradigm needed here, and we have a God-given opportunity to do something about it.”
Rob Oakeshott seemed to be making a pitch to be Speaker of the House. He talked about the need to improve Parliamentary processes, with which it is hard to argue.
Tony Windsor talked about health and education services, as well as broadband, water and renewable energy. He seems to think that carbon trading is not as important as renewable energy, and he seems to be in favour of the NBN, although he wasn’t clear about that.
All three of them emphasised the need for stable government – they clearly don’t want to be campaigning again soon, because apart from anything else they can’t afford it, not having a party behind them. That suggests they will want a binding, long-term agreement with one of the parties.
Andrew Wilkie is a former Green and seems to be left leaning, but his views on individual policies are a mystery. If he wins Denison, it would make sense for him to work with Windsor, Katter and Oakeshott to create a bloc of four votes that will determine who forms government.
Miners were crowing last night that Labor’s mining tax would now not go ahead because of Saturday’s election result, but it may not be quite that simple.
The same goes for the two or three other important business policies that were on the line in this election: climate change, broadband, and parental leave.
They are all up for grabs. The fact that the independents will probably try to lock in a permanent agreement means the key policies will probably be negotiated once, over the next week, and that the ALP and the Coalition will trade off policies that they want in favour of things that Windsor, Katter, Oakeshott and Wilkie want.
It’s unpredictable, but not chaotic. At a guess, I’d say that emissions trading and the mining tax will both go, but the NBN will stay. Tony Abbott’s expensive parental leave scheme probably goes.
And once all that is sorted out, the winner has to deal with Bob Brown to get any legislation passed.
This article first appeared on Business Spectator.
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