In Defence of the Establishment

971753_10151574401276107_283040900_nChristopher Rath outlines why the establishment of the Liberal Party exists, and why change from within is the obvious choice for Classical Liberals, Libertarians, and Small Government Conservatives.

The Liberal Party of Australia today is still the John Howard party. The majority of Federal Liberal MPs and Senators served in his Government, most advisers and apparatchiks worked for his Government, and most Young Liberals were inspired to join the Party because of his Government.

 

I joined the Young Liberals in 2006 at the very young age of 16 because I believed in the economic reform being pursued by the Howard/Costello era. I was a “dry” before I knew what the term meant. I was also a “dry” before I knew that there were “wets” in the Party. I thought that “dry” was the only game in town and Party divisions only existed on social issues.

 

This is because by the time the 2000s came along the Liberal Party establishment had become “dry”, with the “wets” a minority of outsiders. The “wets” had been the establishment in the 1970s under Fraser but they lost the long bitter war that was waged in the 1980s and 90s. In fact you could say that Fightback! was the final nail in the “wets” coffin; certainly Howard led a thoroughly “dry” government for over eleven years. If the Party establishment was not “dry” perhaps I would have never joined. After all it was Hawke and Keating rather than Fraser who reduced tariff protection, floated the dollar, and began privatising government assets.

 

I love the Liberal Party establishment because I am bone dry, not in spite of it. My critics in the Young Liberals may call me an “establicon” or establishment conservative as a pejorative, but I wear it as a badge of honour. Being an “establicon” means being “dry”, it means supporting the Premier and Prime Minister, campaigning, raising money, supporting branches to grow, pre-selecting talented men and women, and fostering our best future leaders. It means loving the Liberal Party and our greatest living Australian, John Howard.

 

Howard was also an “establicon”, from being NSW Young Liberal President in the 1960s to seeking a parliamentary career as quickly as possible. He loved the Party and the establishment more than anyone, perhaps even more than his mentor John Carrick. When he lost the 2007 election and his seat of Bennelong he could have blamed his Treasurer, Cabinet, Parliamentary colleagues or Party machine. Instead, even after he had given 40 years of his life to the Party, 16 years as leader and over eleven years as Prime Minister, he humbly took complete blame for the election loss. In fact he defended and praised the Party on election night 2007- “I owe more to the Liberal Party than the Liberal Party owes to me”.

 

The people I’ll never understand are those who attack the Party or threaten to resign or somehow think that they’re above the Party. They are not. Not even a Prime Minister of eleven and a half years is above the Party. Similarly I’ll never understand those who claim ideological purity as a reason for preventing their party membership. If you don’t like the Party leadership or policies, you should join the party and make a difference or contribution towards promoting your deeply held beliefs. You’re going to have more influence inside the Party than from the sidelines. You’re not going to change the fact that the Liberal Party is the natural Party of government, being in power two thirds of the time since WWII.

 

The Liberal Party establishment is not perfect. Not every Liberal Party policy is perfect. But isn’t it better to get 80% of something than 100% of nothing? Isn’t it better to be pragmatic and win an election than being a purist and let Bill Shorten and the trade unions run the nation? All great right-wing leaders understand the importance of pragmatism and the broad church, but again Howard is the master:

“The Liberal Party of Australia is not a party of the hard Right, nor does it occupy the soft centre of Australian politics. It is a party of the centre Right. It is the custodian of two great traditions in Australia’s political experience. It represents both the classical liberal tradition and the conservative tradition.”

 

Ronald Reagan and Margaret Thatcher understood this and similarly they turned their parties into “dry” pragmatic parties built in their own image. Even Turnbull understands the importance of pragmatism and has neutralised the issues of climate change and same sex marriage early on. But he also understands that the establishment today, unlike the establishment under the other Malcolm in the 1970s, is inherently “dry”. This is why he went out of his way in his victory speech to prove his “dry” credentials, careful not to scare away people like me- “This will be a thoroughly liberal government. It will be a thoroughly liberal government committed to freedom, the individual and the market.”

 

Turnbull’s Ministry is also packed to the rafters with establishment dries, including Mathias Cormann, Paul Fletcher, Arthur Sinodinos, Andrew Robb and Josh Frydenberg. Andrew Robb, the archetypical establishment dry, was an economist, staffer, government relations professional, and the federal director of the Liberal Party responsible for the 1996 campaign that brought the Howard Government to power. As Minister for Trade and Investment he has successfully negotiated three free trade agreements. Similarly Josh Frydenberg is an establishment dry, securing the safe seat of Kooyong after being an adviser to Alexander Downer and John Howard and a Director of Global Banking with Deutsche Bank.

 

So to all of the libertarians, classical liberals and small government conservatives out there, my plea to you is to join the Liberal Party, support the inherently “dry” establishment which now exists, try to make a difference by pushing for your agenda and philosophy within the natural party of government, and understand that in politics a level of pragmatism is required.

 

“Politics is the art of the possible, the attainable — the art of the next best.” (Otto Von Bismarck)

Christopher Rath is a Young Liberal Branch President and currently works in the private sector. He previously worked as an adviser to state and federal Liberal Parliamentarians and has degrees in economics and management.

26th Anniversary of One of the Great Turning Points in History

This week marks the 26th anniversary of probably one of the great turning points in world history.

It occurred in September 1989 when Boris Yeltsin, then an up-and-coming member of the Soviet Politburo, made his first trip to the USA.

At that time, the Soviets and their supporters still believed that a socialist system of government with centralised planning could out produce a free-market capitalist system thereby socialism would provide a higher standard of living for the average citizen.

Therefore when previous Russian leaders had visited America and they had been taken on tours of American supermarkets, Soviet leaders thought this was all put on for show, an American version of ‘Potemkin Village’ and so simply did not believe what their eyes told them.

However, back in September 1989 (before the fall of the Berlin Wall) a young Boris Yeltsin took a detour from his official itinerary and made an unscheduled and unannounced stop nondescript supermarket called Randalls (one of the speculations is that he may perhaps have wanted to buy a bottle of alcohol)

Yeltsin and his entourage wandered around the supermarket in amazement. In his autobiography ‘Against the Grain’ he recalled:

“When I saw those shelves crammed with hundreds, thousands of cans, cartons and goods of every possible sort, I felt quite frankly sick with despair for the Soviet people. That such a potentially super-rich country as ours has been brought to a state of such poverty! It is terrible to think of it.”

There is the most famous photograph of Yeltsin in that supermarket, looking over the produce in the frozen food section with his hands up in the air, and he could be simply saying, “The free market wins”

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Proposed senate voting reforms would be a Coalition own-goal.

The Coalition has again raised the prospect of removing group preference flows from Senate elections.

As detailed in the analysis below of federal elections since 2007, under the proposed method the Liberal and National party would have lost ground to Labor and the Greens at 2 out of the 3 last elections, would not have gained a seat at any and almost certainly have less senators in the long run. Neither method offered either Labor or the Coalition a majority of the Senate seats contested at any of the last three elections.

Assuming voting patterns do not change, or even just assuming that the basic political landscape does not change (ie, the broad left being amalgamated under the Greens, whilst the broad right is spread across a number of libertarian, nationalist, populist and Christian parties), the new method will benefit Labor and the Greens and hurt the Coalition.

Method

This analysis looks at the last 3 federal elections 2013, 2010 and 2007, which happen to conveniently represent three different voting scenarios: A strong showing for the right (2013) a strong showing for the left (2007) and a very close election (2010).

This analysis assumes that people would vote for the same group tickets in a scenario where preferences exhaust immediately. This is essentially the case in the NSW State upper house elections which already use the proposed method.

In order to determine the results under the new method, I took the AEC quota results, and counted off the top six places, whilst exhausting quotas.

Here is an example from the most recent NSW Senate election:

NSW – Senate 2013 Votes % Quota New method Current method
Liberal & Nationals 1,496,752 34.2 2.3942 2 3
Labor 1,381,047 31.56 2.2091 2 2
Liberal Democrats 415,901 9.5 0.6653 1 1
The Greens 340,941 7.79 0.5454 1
Palmer United Party 148,281 3.39 0.2372

 

The seats obtained by each party under the current method (the actual result returned) is the result of complex preference distributions. Under the new method, each of the two major groups get two seats for their complete quotas and are then left with only the remainders (0.3942 and .2091). The next seat awarded goes to the highest remaining quota, the Liberal Democrats, followed by the Greens. There are no more seats to award, but to illustrate, the theoretical seventh seat would have gone to the Liberals & Nationals as their remainder of .3942 quota was larger than the Palmer United Party’s 0.2372 quota.

As can be seen here, the new method can yield significant and surprising results – in this case, the Coalition lose a seat to the Greens and the minor party seats are unchanged.

Results

2013 Federal Election (and 2014 WA rerun)

senateanalysis2013-3

Votes % Seats won – current method Seats won – new method
Liberal/National Coalition 5,057,218 37.7 17 17
Australian Labor Party 4,038,591 30.11 12 14
Australian Greens 1,159,588 8.65 4 5
Palmer United Party 658,976 4.91 3 1
Liberal Democrats 523,831 3.91 1 1
Xenophon Group 258,376 1.93 1 2
Family First Party 149,306 1.11 1 0
Democratic Labour Party 112,549 0.84 0 0
Australian Motoring Enthusiast Party 67,560 0.5 1 0
Other 1,384,027 10.32 0 0
Total 13,413,019 40 40

 

The 2013 election is one in which Labor and the Greens did poorly and the Coalition did well. Under the new method Labor and the Greens benefit significantly at the expense of the minor parties, mostly Palmer United. The Coalition’s overall seat count is unchanged. The change increases the Greens and Labor’s share of seats 5% above their share of votes, and changes the Palmer United Party from being over-represented to under-represented. The Liberal Democrats are still under-represented and the Xenophon group increases their over-representation.

2010 Federal Election

senateanalysis2010-2

 

Votes % Current method New method
Liberal/National Coalition 4,871,871 38.3 18 17
Australian Labor Party 4,469,734 35.13 15 17
Australian Greens 1,667,315 13.11 6 6
Family First Party 267,493 2.1 0 0
Democratic Labor Party 134,987 1.06 1 0
Independents 55,786 0.44 0 0
Other 1,255,047 9.86 0 0
Total 12,722,233 40 40

 

The 2010 election was very close and resulted in a hung parliament in the lower house. In the 2010 election, under the new method Labor gains 2 senate seats, 1 each from the Coalition and the DLP. Because this election was close and the Greens had a strong result, group distribution played a smaller part in the final outcome under the old method, so the new method has a smaller impact. The Coalition would have lost a seat in South Australia and the DLP would have lost their only seat in Victoria (both to Labor).

In terms of representation, The Coalition and Greens are over-represented in both the old and new methods (for the Coalition the new method is closer), whilst the Labor party is much more over-represented in the new method. The minor parties are significantly under-represented under both methods, with the new method being worse.

2007 Federal Election

senateanalysis2007-2

 

Votes % Current method New method
Australian Labor Party 5101200 40.3 18 19
Liberal/National Coalition 5055095 39.94 18 18
Australian Greens 1144751 9.04 3 2
Independents (incl. Xenophon) 174458 1.38 1 1
Other 813538 9.34 0 0
Total 12656805 40 40

In the 2007 election, use of the new method would have transferred a single seat from the Greens to Labor. This would have made the final senate less representative of the total vote proportions.

Conclusion

Use of the new method would have had the most effect in the most recent Australian federal election. This is because the new method reduces the influence of groups with a vote share of 7% and less. Over the last 3 elections, using the new method, no candidate would have been elected with less than 7.79% of the vote in their state, (0.54 quotas). By contrast, under the current method, in a fragmented election, parties can be elected with as little as 1% of the total vote in their state.

Overall, use of the new method would have increased the systematic over-representation of the three major parties which is present under the current method.

Because the Australian right is currently more fragmented than the left, the Coalition currently enjoys greater preference flows from parties with a share of less than 7%. A new anti-Islam party, the ALA is launching this year and it will also likely poll in the ~5% range and would be expected to preference the Coalition before Labor or the Greens. Removing these preference flows presents a gift to the ALP and Greens.

In a situation where the Coalition does not expect to use minor and micro-party preference flows, it is still hard to imagine that eliminating the micro-parties will benefit the Coalition. The Coalition has no credible chance of gaining a majority in the Senate with or without these reforms. Surely the Coalition would find it easier to deal with the LDP, Family First or the ALA than Labor or the Greens. Even the presence of the more ideologically suspect DLP, PUP or Xenophon would at least provide an alternative negotiating partner in the Senate.

There is no benefit to the Coalition in the proposed Senate voting rule changes.

The New York Times is Wrong on Stopping the Boats

The world has been shocked in recent days by the heartbreaking image of a child lying facedown in the sand, his life tragically lost as his family attempted to make the treacherous voyage from Turkey to Greece by sea. In the wake of this tragedy and Europe’s growing refugee crisis, the New York Times editorial board has taken to its pages urging European countries not to follow Australia’s ‘unconscionable’ treatment of refugees.

In an atmosphere of high tragedy, it is easy enough to see why Australia’s seemingly harsh border policies have raised the ire America’s leading progressive hive-mind. But the Times’ moral outrage is misplaced. The lost lives of Syrians who braved the high seas in a desperate bid to reach Europe don’t discredit Australia’s border policies. They vindicate them.

The truth is that the deaths of the 2600 people who drowned trying to reach Europe by sea in this year alone weren’t unavoidable. They came about because the numbers in refugee camps in countries like Turkey and Jordan had reached breaking point and some within those camps believed their best shot at a new life was by reaching the mainland of Europe through their own means. It is worth noting that at this point many of these people – including the thousands of Syrians in Austria this weekend demanding entry to Germany – were no longer in immediate peril once they entered a country outside their homeland. This is why it is wrong to assume that all refugees attempting to enter Europe by boat from countries like Turkey and Jordan were fleeing mortal danger. More accurately, they were sold a false promise by migrant smugglers seeking to capitalise on their fear and desperation. No doubt their situation remained desperate and their futures tragically uncertain. But allowing refugees to claim asylum in whatever country’s borders they are able to breach isn’t necessary for preventing the loss of human life, nor does it fix the actual problem of settling the world’s millions of displaced people. It simply means that those with the capacity to pay people smugglers and willingness to risk danger have the chance to take matters into their own hands; a course that often ends in tragedy. Instead, what is need is a coordinated international response to ensure those in camps are placed quickly and according to need.

As long as smugglers are able to sell the promise of a better life, there will be no shortage of people number willing to take them up. The motivation to ensure boats manned by people smugglers aren’t given a free pass to permanent residency isn’t borne out of cold-hearted callousness. The intention is to ensure that migrant smugglers can’t profit from a trade that costs live and that Australia’s finite refugee intake isn’t decided according to who is able to pay to get here by boat. In view of its current crisis, these are lessons Europe would do well to heed.

The New York Times appears to adopt the same kumbaya worldview as the Labor party during it’s last period in office whereby boat arrivals are deemed to be wholly unaffected by the incentives and policies government puts in place. Its vision is one where a country’s sovereign borders are an antiquated legal triviality and the only plausible reason that any migrant would get on a boat in search of a better life is that staying put would have meant facing almost certain death. To even raise the concern that those with the resources to arrive by boat are not always the most worthy candidates for a limited refugee quota, much less the fraught and hazardous nature of such a journey is only explicable by xenophobia or a sociopathic lack of compassion.

Such delusions would be less worrisome had they not resulted in the deaths of more than 1100 people at sea during Labor’s last term.

One of the greatest mistruths propagated by the Times’ editorial is the accusation that Australia’s current stance is ‘strikingly at odds with the country’s tradition of welcoming people fleeing persecution and war.’

Last year, Australia issued 13,768 refugee and humanitarian visas, a figure slightly above our trend for the past twenty years and is set to rise by 7500 over the next four years. As for our resettlement program, Australia ranks second in the world. The planned 6 000 for this year is lower than 1976 – 1982 during which Australia accepted large numbers of Indochinese refugees, but above trend for the thirty years prior. These figures give the lie to the Times’ emotionally laden plea that Australia should look to its past and abandon the moral bankruptcy of the state quo. To be sure, as a wealthy first world nation there is a persuasive argument that Australia could accept a greater intake. Australia has already agreed to take an extra 4400 Syrian refugees and Coalition MP’s and Ministers alike have signalled their desire for us to do more. That however, is a question of whether our current efforts go far enough, not proof of any lack of conviction to help genuine refugees. Words tell a story, but facts and number expose reality in a way that is less easily obscured.

None of this is to discount or diminish the plight of displaced Syrian refugees genuinely seeking asylum. But tragedy is a poor excuse for making an ill-considered scapegoat out of Australia’s stance on unauthorised boat arrivals. Indulging in such moral vanity is not just poor reporting. It adds nothing to the far more significant question of how the international community should come to the aid of the millions of people whose lives have been mired by upheaval, persecution and war.

 

Jokowi’s Beef

profilepicUniversity of Western Australia student and Australian Government New Colombo Plan Scholar Rebecca Lawrence explains the problems with the Jokowi Administration’s protectionist approach to live cattle imports.

I am an Australian student, studying Economics and Indonesian language, and spending this semester studying abroad in Yogyakarta, Indonesia. Back in July, I saw the Australian media flood with stories (here, here, here and here) about how the Indonesian Government had slashed the quota of Australian beef imports to 50,000 cattle for the July – September quarter (an 80% cut from 250,000 the previous quarter).

The policy was coupled with hopeful talk by Indonesia’s Agriculture Minister, Amran Sulaiman, about movement towards self-sufficiency in the agriculture sector, however, beef prices have predictably soared since July. Since moving to Indonesia in August, I have observed the devastating side-effects of the Indonesian Government’s simple mistake. The country has not only suffered considerable increases in beef prices, but also significant lay-offs of beef workers, beef trader’s strikes, meat shortages and recent increases in chicken prices. For a country that consumes relatively little pork and lamb, that last point in particular is a very bad sign.

In recent days, the Indonesian Government has confirmed that they will be importing an extra 50,000 cattle, but are yet to announce the source of the additional imports. While this will partially alleviate the domestic supply issues, the original mistake of slashing the Australian quota will have a lasting impact. On top of affecting Indonesia’s reputation as a stable trading partner, the volatile quota setting has logistical implications for cattle importers – for instance, it is not cost effective for importers to ship cattle to Indonesia in small increments.

This mess should serve as a reminder that trade is mutually beneficial – if the quota had not been slashed, then Indonesia’s growing middle class would be enjoying more affordable beef and chicken, and Australia’s farmers would not be desperate for “another place to send the extra cattle”. Truly, the very quota system, whereby the Indonesian Government arbitrarily decides how much beef to import at three-month intervals, is clearly outdated and ineffective, particularly when the Government is prepared to change the quarterly import quota by such significant increments at such short notice. It is factors like this that inhibit Indonesia’s standing as a reliable and safe trading partner.

On the surface, the Jokowi Government appears to have made some sensible decisions in recent months, including ending fuel subsidies, dissolving 100 unnecessary Government bodies and relaxing visa requirements for foreign visitors from 30 countries (not Australia).

Under closer scrutiny, however, many of the economic policies of the new government have been wildly unwise. The implementation of the removal of fuel subsidies was a disaster (rather than allowing the price to rise to market value, the government removed the subsidy but left the price ceiling on fuel, forcing petrol companies to bear the difference in cost), the cuts to road toll fees have damaged profitability and scared off investors, price controls on cement which have all but killed the industry and, most recently, significant price controls on staple foods which will continue to distort the market for months to come. All of this has culminated with the steady decline in value of the rupiah, which recently hit its worst level since the 1998 Asian Financial Crisis.

I chose to study Indonesian, and spend 12 months living in Indonesia, because I have faith in the future of the Australia – Indonesia relationship. Both Governments provide funding to encourage students to study in their neighbouring countries, among a range of other policies designed to ensure goodwill and strong bilateral ties. Despite significant cultural differences, the tourism trade between the two countries has never been stronger.

In order to cement a meaningful, lasting relationship between the two countries, our economies must become further intertwined. My fear is that excessive government intervention in the market, in the form of import quotas and price controls, will ruin the credibility of Indonesia’s economy. Unless Indonesia can provide opportunities for realistic and reliable trade and investment, my generation of Australians will continue to see their neighbouring country as nothing more than a cheap holiday destination.

Economic policy is a complex and multi-faceted field, and answers to economic problems are not always straightforward. Jokowi is constantly forced to consider not just the economy, but also a range of political factors in all his decisions – tensions within his own party, the composition of the Parliament, domestic popularity and also overseas perceptions. The solution to the beef problem, however, is simple – reinstate a higher quota on imported Australian beef next quarter, which will improve bilateral trade relations with Australia and keep domestic meat prices low – a win-win solution.

Rebecca Lawrence is a third year Economics and Indonesian Language student from the University of Western Australia. After spending one semester studying in Indonesia in 2014, Rebecca has returned to Yogyakarta on an Australian Government New Colombo Plan Scholarship for Semester 2, 2015.