Australia’s new parliament

Australia finally has a government: Labor with the support of 4 (!) others. It will be interesting but I have come around to John Quiggin’s view that it may actually work well. For every issue where one of the independents has a particular interest there is one where they also have an interest in things that appear to have large support but there was a previous lack of political will. I think here of same-sex marriage and climate change policy in particular. Australia was not going to move forward on these issues with a major party majority government but will now.

The Coalition lost because of broadband. Specifically, they had a policy of not doing anything on broadband when it turned out that regional Australia really wanted something done. This is ironic because the Coalition’s objection to broadband was the expenditure of public funds. Yet this was only done as a superior alternative to doing nothing and doing something half-baked as Labor had proposed at the 2007 election. For years, I had advocated using market design to get a National Broadband Network in a cost effective and flexible manner. But rather than think hard about the economics the Coalition abdicated consideration of the issue. They deserved to lose precisely because they refused to govern. Hopefully, they will take a long hard look at their appeal to mediocrity and think about whether that it is really working for them.

16 thoughts on “Australia’s new parliament”

  1. Agree, NBN seemd to be the deciding policy issue that became a credible reason for the NSW Indies to justify siding against the Coalition.

    However, not unike the Coalition’s position on various other issues the problem seems to be in the communication of their NBN policy and not the policy detail itself.

    Malcolm Turnbull did a very good job in an editorial and in a limited number of appearances during the election explaining why the Coalition’s hybrid public-market driven NBN design is superior to the Coalitions $43B++ white elephant.

    What I’d like to know is who in the Coalition sat down and explained the Coalition’s NBN policy to the Indies? I reckon if Turnbull had been given – or indeed agreed – to spend a day with the Indies on NBN we might have had a different outcome.

    This of course assumes that NBN really was the deciding factor.  I believe it was in terms of policy issues. But I think Tony Windsor’s comments this afternoon that he got behind Labor because they are least likely to call an election as they are and will continue to lag in the polls is the #1 reason Windsor got behind Labor and not the Coalition, NBN or no NBN.

    The events of the last two weeks has exposed a flaw in Australia’s Constitutional conventions in the age of third parties and Independents. In the event of a hung parliament, the individuals with the balance of power are naturally incented to side with the weaker team in terms of popular support in order to maximise the length of their tenure in their “balance of power” position.


  2. @GalleryAsie,
    That’s an interesting comment about the Independents going with the “weaker” team to maximize advantage. Other media commentators have alluded to the same point. I’m not sure I completely agree. For example, Wilkie didn’t capitalize on his advantage with respect to siding with Labor; he could have received a better deal from Abbott with regards to his electorate.


  3. I don’t agree GalleryAsie – I reckon you’re letting your partisan wishes influence your judgement.

    The ALP only lost the two-party preferred vote very, very narrowly, they won’t repeat the disastrous mistakes of their election campaign and even the Australian’s Newspoll – a poll that consistently overrates the Coalition – now has them ahead again in public opinion.

    Gillard will soon be itching for a good pretext to go to the polls.  It’s true the pretext will have to be a good one, but a fractious parliament on a core and popular issue is very likely to provide that some time in the next couple of years. 


  4. Not sure I’m with you on the NBN.  As a project, its a white elephant in waiting.  The next upgrade to ADSL is hitting 300mbit+ in testing, and that would have been provided by private firms at no cost or risk to the taxpayer.

    Wireless and satellite were already being rolled out to regions by the coalition before they lost in 07, and the ALP NBN plan for regions is the same as the coalition – 12mbit satellite/wireless.

    Julia put $10b under the noses of the independants and they grabbed it, the NBN outcome will be the same for regional users.


  5. One good reason for the independents to side with Labor is the fact that the Greens will hold the balance of power in the senate in July next year. They’re better off joining a coalition that can actually get legislation passed.


  6. the critical test for me for Joshua’s “work well” is will those with the political power deliver policy in the national interest

    and by your own analysis, neither party offers that on broadband and i might add on a number of other very important economic and social policy issues

    eg immigratition, education, health, taxation and financial reforms

    so the failure is politicians since the marginal voters actually could not deliver a stable govt. or policy advisors not selling the right policies to pollies

    the best outcome is for some politicians to sell some good policy advice and then head back to the polls.

    Greens and independents in good times in power on a few single issues albeit important issues may well lead to very undesirable self interest amongst indies at a real opportunity cost to Australia as a whole

    time will tell and maybe very quickly


  7. Australia is a funny country. Labor wants to spend 5% of the country GDP on broadband. This is a plan that’s going to take a decade to complete. The most amazing thing is that there are people defending such lunacy.
    Needless to say, once completed it will be proven an absolute disaster, since ten years from now the technology is going to be irremediably obsolete. I can even foresee the fiber optic cables going through the dusty deserts where once were mining towns that died off because Labor had to raise more tax… to pay for broadband.
    Common sense can be really useful at times.


  8. And the same ALP that claims they will spend “only” 5% of GDP on broadband is completely incapable of managing a much simpler task.
    Sure, they like to give fancy names to their programs, inspired in the glorious Soviet era, like “BUILDING the education REVOLUTION”… and look what are the results:
    350,000 dollar shed
    Stupidity or corruption? You decide.


  9. I hope this blog is not going to degenerate into unsubstantiated partisan name calling like many others.  In the past we have seen rational argument and real debate based on facts.


  10. Forget the politics, look at the economics….
    Even if the NBN costs do not blow out. It will cost between 1 and 2% of household income for generations. Even people who do not use broadband will have to pay. It appeals to people who can afford it easily and those who think someone else will foot the cost.
    As soon as we are asked to pay (as with the CPRS) we will all vote with our feet saying our ADSL/Cable is fast enough. Remember the door to door people selling Foxtel got only a meagre take up?
    This is simply unaffordable, a Marie Antoinette’ism. We all want a Ferrari but a second hand Toyota is what we can afford.


  11. Interesting that we have two widely divergent estimates of costs – 5% of GDP is of course a lot more than 1-2% of household income.  $43 billion is roughly 3.5% of one years’s GDP, but over 10 years its less than 0.35% of a decade’s GDP.


  12. “Even if the NBN costs do not blow out…”
    It will blow out big time. Everything does with this government capable as it is of spending billions in “free insulation” and billions on “checking on badly installed insulation”. It’s so incompetent that it appears to be a joke. Unfortunately what they spend are real dollars, even if they get nothing in return. Some sort of neo-Keynesianism?
    “…but over 10 years its less than 0.35% of a decade’s GDP.”
    In ten years we are going to end up with just debt and a network that doesn’t work. The main reason for the NBN is that this government (or the coalition for that matter) don’t want to touch Telstra, which owns the “last mile”, the critical connection to most homes in Australia that could allow broadband an order of magnitude faster than we enjoy right now.
    It’s just an incompetent spending spree to try to cover up for an incompetent monopoly. Wireless is creeping in and will put Telstra where it belongs: out of business.


  13. Fibre will NOT be obsolete in a decade, and wireless is NOT a solution for anywhere with a reasonable number of users. The last time I was in a place that had satellite internet (remote Milford Sound in NZ) it was non-operational because it was raining – hard, admittedly.
    The main benefit of the NBN is precisely that it is national-outcome driven, not market driven. What we have now is a market-driven system, and things like telemedicine can’t get off the ground because no matter how great the bandwidth at city hospitals where the consulting specialists are, it doesn’t work unless you can reliably get a high-bandwidth connection at the CLIENT end. Universality is key. To get a system that can support high-bandwidth applications you need to speed up the slowest parts of the current system, not the fastest, and that’s simply not something the market is interested in – or it would have done this already.
    To spend 0.35% of annual GDP for a decade on this sort of enabling technology ought to be a simple choice – the indirect benefits alone will likely end up greater than the cost of construction. By all means if we can get an equivalent system for less outlay, then we should – but all I’ve seen are proposals for inferior systems for less outlay, and that’s hardly such a convincing proposition.


  14. I agree that fiber optics will not be obsolete in a decade.  I think it will gain momentum, however I do not think it will take off as well as many people think.  I believe satellite internet is the technology of the future.  When you look at countries like Japan that have faster satellite internet networks than the US has Cable networks you have to believe this is a promising technology.  There is more information about this on my blog at


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