A climate for change

LAST week we saw Julia Gillard and Tony Abbott as rivals performing genteel courting dances to win over the independents. This week it gets deadly serious, as the four independents must decide who to support. Of the six MPs on the crossbenches, three are crucial. Tony Crook, the West Australian National who unseated Wilson Tuckey, plans to sit on his own but surely will back the Coalition on confidence issues. Melbourne's Green, Adam Bandt, says he will support Labor. And neither side would want to rely on maverick Bob Katter.

That means that to have a secure 76 seats in the 150-member House, either Labor or the Coalition must win over the other three independents as a group, or we will be heading back to the polls well before 2013.

Let's be realistic: Labor has to win over all three. For one thing, all of them want real action on climate change. Abbott is a remarkable political gymnast, but he can't go there. If Gillard can't find a way to do so, gear up for another election.

Andrew Wilkie and Rob Oakeshott are both independent progressives: for them, tackling climate change is central. Tony Windsor is a moderate conservative, but he is also a farmer in the Murray-Darling basin, where climate change is forecast to shrink future rainfall by 30 per cent. If that comes true, he warned Parliament last year, "it will destroy agriculture in that system". In 2008, helped by 65 environment groups, he introduced a private member's bill proposing a target of reducing emissions to 30 per cent below 1990 levels by 2020 using a carbon price, regulatory action across the board, and new ways to store carbon in soils and vegetation.

But in 2009 and 2010, he twice voted against Labor's emissions trading scheme, saying it proposed too much dislocation for too small a target, and aimed to split the Coalition rather than seriously reduce emissions. He has common ground with the Coalition on soil carbon, and with the Greens on an ambitious target. Now Labor has to find common ground with him.

The 22 demands set out by Wilkie, the new Denison MP, show how difficult the task will be. In March, Wilkie stood for Denison at the Tasmanian state election and won 8 per cent of the vote. At the federal election he won 21 per cent, taking votes equally from the Liberals and the Greens. One reason was that this time he had a new issue, telling southern Tasmanians they were not getting their fair share of federal funding because they were in safe Labor seats. So, naturally, his wish list yesterday began with 10 local demands, starting with a new Royal Hobart Hospital, and including funding for broadband, roads, public transport, including a light rail for Hobart's northern suburbs, and a demand that the government withdraw its formal approval of the proposed Gunns pulp mill.

Then there are 12 broader issues: poker machines, climate change, refugees, whistleblower legislation, mental health, dental care, a fairer distribution of schools funding, increasing welfare benefits, same-sex marriage, aged care and a national disability insurance scheme. Abbott might get a tick for his mental health policy, but everything else there is difficult for both leaders.

To me, apart from a couple of caveats, all of it is good policy but it's difficult. And Wilkie is just one of four independents. Katter has made it clear he wants a lot of things for his electorate (which is bigger than France). Windsor and Oakeshott last week were strong on good principles and procedures, but they will also have to demand that the electors of New England and Lyne get their share.

Still, what they ask for and what they get will be two different things. Labor (and the Coalition, if it wants to stay in the game) will have to plead for time to tackle some issues, insist on national program funding for others, and choose carefully what to give away from the very small amount left in the kitty after the campaign.

The first week was encouraging, even if some commentators missed the point. The independents' demands were about principles of government. They stared down Gillard, and got her to agree to improve the way Parliament works. They stared down Abbott, and got him to agree to have his policies properly costed by Treasury and the Finance Department.

That means the Liberals will need to prepare credible excuses for getting some of their costings wrong. I suggest they just tell the truth, which is that the much-vaunted charter of budget honesty doesn't work for oppositions. They need access to the departmental experts when they are planning their policies, and not merely to reveal during the electoral campaign where they got costings wrong.

When Labor was in opposition, Lindsay Tanner proposed that oppositions be allowed private access to Finance and Treasury officials for the last year before an election to help them get costings right. But Labor in government did nothing on that, and shadow treasurer Joe Hockey argues that this solution would put unfair pressure on officials, by asking them to serve two masters.

The Coalition instead proposes to set up a parliamentary budget office, along the lines of the Congressional Budget Office in the US. But on the scale it proposes, that wouldn't work either.

The US office has an annual budget of $A50 million and employs 175 economists and other analysts. The Coalition's proposed office would have an annual budget of just $2 million, which might pay for 10 or 12 analysts at best. The Finance Department has 1000 of them. Get real.

Climate change is one key issue. The key economic issue is to train the young, the unemployed and the workforce dropouts in the skills Australia will need to sustain a long recovery. Could one of the independents please put that on their list?

Credit: TIM COLEBATCH. Tim Colebatch is economics editor.

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72 all - Brisbane to Coalition; Corangamite to ALP

THE Coalition has won the seat of Brisbane, leaving the two sides deadlocked at 72 seats each, with six crossbenchers holding the balance of power.

Counting of 2300 votes yesterday sealed the fate of veteran Labor MP Arch Bevis, who has held Brisbane since 1990, with Liberal National Party challenger Teresa Gambaro taking a commanding 998-vote lead.

Victory in Brisbane gives the Coalition 72 seats in the House of Representatives, plus Western Australian National Tony Crook, who will sit on the crossbenches. While Mr Crook is generally likely to support the Coalition, WA's National Party considers itself separate to Tony Abbott's Coalition.

Labor would also have 72 seats, plus the support of new Greens MP Adam Bandt.

This means at least three of the four independents must pledge their support to one side or the other for Australia to have stable government for the next three years.

Yesterday, Mr Crook, who unseated veteran Liberal Wilson Tuckey, said he would be the hardest member of the crossbenches for the major parties to satisfy, and that he was happy to be a one-term MP. He said that while his latest talks with Mr Abbott were "very positive" about how his demand for more money to spent in rural WA could be met, he was still a long way from satisfied.

One side could try to govern without assured majority support, but would be constantly vulnerable to losing votes in the House, let alone the Senate.

Latest counting in Corangamite confirmed that Labor MP Darren Cheeseman will hold the seat narrowly from his Liberal opponent, former ABC TV journalist Sarah Henderson.

Only about 1250 votes were counted yesterday, with as many as 10,000 still to come, but Mr Cheeseman has increased his lead to 909 votes, suggesting Ms Henderson will need to get about 55 per cent of the votes from here on to win.

No other seats in the House are in any doubt. The Coalition held five of its own seats that redistributions had notionally given to Labor: Gilmore and Macarthur in New South Wales, Dickson and Herbert in Queensland, and Swan in WA.

The Coalition took seven seats from Labor in Queensland (Bonner, Brisbane, Dawson, Flynn, Forde, Leichhardt and Longman), two in NSW (Bennelong and Macquarie), one in WA (Hasluck), and one in the Northern Territory (Solomon).

But Labor took two seats from the Liberals in Victoria: La Trobe and McEwen.The only seat in doubt is Victoria's last Senate seat, which will not be decided for weeks.

In a tight three-way contest, Ballarat blacksmith John Madigan for the Democratic Labor Party has a narrow lead, ahead of two sitting senators, Liberal Julian McGauran and Family First's Steve Fielding.

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149 down, all eyes on Brisbane

THE Liberals have taken the Perth seat of Hasluck, while Labor has almost certainly held the Barwon region seat of Corangamite so the battle for control of Australia now comes down to the seat of Brisbane.

Yesterday's counting in effect has left just one seat in doubt and the outcome now clear in 149 of the 150 seats in the House of Representatives.

Labor has won 72 seats, and the Coalition 71. There will be six members on the crossbenches: four independents, one Greens and one WA National, Tony Crook, who plans to sit and vote independently from the Coalition.

And then there is Brisbane. Yesterday's counting of 5000 postal, pre-poll and absentee votes strongly favoured Liberal challenger Teresa Gambaro, almost doubling her lead from 382 votes on Wednesday night to 743 votes when counting ended.

But there are still about 12,000 votes left to count, half of them absentee and provisional votes that traditionally favour Labor.

Ms Gambaro now appears the likely winner, but the seat is still too close to call.

If she wins, the Coalition and Labor would be tied at 72 seats each. If sitting Labor MP Arch Bevis can win 53 per cent of the votes still to be counted and overhaul her, Labor would have 73 seats to the Coalition's 71.

Ms Gambaro, who was assistant immigration minister when she lost her outer suburban seat of Petrie in 2007, decided to challenge in Brisbane after she moved in and a redistribution made it marginal for Labor.

Last night, she said it was too early to claim victory. "I'm quietly hopeful," she said, "but we've got a lot of votes still to come. I just don't want today to be the exception."

Yesterday's counting made it certain that Australia will have its first Aboriginal member of the lower house, with Aboriginal health director Ken Wyatt taking the south-east Perth seat of Hasluck for the Liberals. Last night he led Labor MP Sharryn Jackson by 842 votes, with only about 4000 votes left to count.

But Labor now appears to have held Victoria's closest seat, Corangamite, where sitting MP Darren Cheeseman now leads Liberal rival Sarah Henderson by 906 votes with about 10,000 left to be counted. Mr Cheeseman pulled away yesterday in counting of about 2000 postal and absentee votes.

One of the keys to the Brisbane result is a record Greens vote for Queensland of 20.7 per cent, won by former Australian Democrats leader Andrew Bartlett, who has changed sides to become convener of the Greens' state campaign.

Mr Bartlett, who now works on refugee and indigenous matters, almost doubled the Greens vote to the highest in any seat outside Melbourne and Sydney.

He says he will now consider a tilt at State Parliament, where he says the Greens could win up to four seats in the 2012 election.

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Brisbane could give either side the edge

AFTER a fifth day of counting, the result of the election is little clearer.

More than 2 million votes remain to be counted and, last night, three seats were too close to call: Corangamite in Victoria, Hasluck in Western Australia, and Brisbane, where Labor's Arch Bevis halved his deficit with a surprising haul of postal votes.

Labor looks better placed to win Corangamite. The Liberals look better positioned to win Hasluck. And in Brisbane the strong swing to the Coalition on Saturday is being offset by a small swing to Labor in postal and absentee votes.

If Labor wins Corangamite, and the Coalition wins Hasluck (and the backing of WA National Tony Crook), the two sides will have 72 seats each, with the result in Brisbane deciding which will end up with more seats.

With Green MP Adam Bandt already declared for Labor, victory in Brisbane would, in effect, give Labor a 74-72 lead. Conversely, victory for the Coalition in Brisbane would make it 73-73, leaving the four independents with a delicate choice.

Last night, former Liberal MP Teresa Gambaro led Mr Bevis by only 382 votes, down sharply from Monday's lead of 870. But with as many as 15,000 pre-poll, postal, absentee and provisional votes still to be checked, it is too early to pick a winner.

The trend was moving the opposite way in Corangamite, where Liberal Sarah Henderson polled well on postals to claw back another 64 votes, narrowing the lead of Labor's Darren Cheeseman to 573. But with most postals now counted, and absentee votes favouring Labor, Mr Cheeseman will probably just squeeze back.

Postal votes in Hasluck also ran well for the Liberals, with former Aboriginal health director Ken Wyatt lifting his lead over Labor's Sharryn Jackson to 704. The Liberals are also doing better in absentee votes than in 2007, and there are 6000 of them left.

Liberal frontbencher Bruce Billson is now out of danger in Dunkley. The Liberals have also kept Boothby, the only close seat in South Australia, and won the Blue Mountains seat of Macquarie.

Barring bizarre shifts in late counting, only two other seats remain in doubt, Greenway and Lindsay, both in the outer west of Sydney.

In Greenway, no new counts have been posted this week, as officials spent three days on a "fresh scrutiny" of those counted on Saturday. The net effect has been to reduce both sides' tallies by about 200.

In Lindsay, 2000 postal votes were finally counted yesterday, and Labor increased its lead to 1250 votes, virtually putting the seat out of danger.

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Election counting enters the home stretch

A THIRD day of counting votes from Saturday's election passed yesterday with relatively few counted. More than 2 million votes remain to be counted, and the result of Saturday's election is little clearer.

Last night three seats were too close to call: Corangamite in Victoria, Hasluck in Western Australia, and Brisbane, where Labor MP Arch Bevis halved his deficit with a surprisingly strong haul of postal votes.

At this stage, Labor looks better placed to win Corangamite. The Liberals look better positioned to win Hasluck. And, in Brisbane, the strong swing to the Coalition on Saturday is being offset by a small swing to Labor in postal and absentee votes.

If Labor wins Corangamite and the Coalition wins Hasluck, the two sides will have 72 seats each, with the result in Brisbane deciding which will end up with more seats.

With Green MP Adam Bandt already declared for Labor, victory in Brisbane would, in effect, give Labor a 74-72 lead. But conversely, victory for the Coalition in Brisbane would make it 73-73, leaving the four independents with a tough choice.

Last night, former Liberal MP Teresa Gambaro led Mr Bevis by only 382 votes, down sharply from a lead of 870 on Monday. But with as many as 15,000 pre-poll, postal, absentee and provisional votes still to be checked, it is too early to pick a winner.

The trend was moving the opposite way in Corangamite, where Liberal candidate Sarah Henderson polled well on the postals to claw back another 64 votes, narrowing the lead of Labor MP Darren Cheeseman to 573 votes. But with most postals now counted, and absentee votes favouring Labor, Mr Cheeseman will probably just squeeze back.

Postal votes in Hasluck also ran well for the Liberals, with former Aboriginal health director Ken Wyatt lifting his lead over Labor MP Sharryn Jackson to 704 votes. The Liberals are also doing better in absentee votes than in 2007, and there are 6000 of them left to count.

Liberal frontbencher Bruce Billson is now out of danger in Dunkley, after postal votes swelled his lead to 1500 votes. The Liberals have also kept Boothby, the only close seat in South Australia, and won the Blue Mountains seat of Macquarie.

Barring bizarre shifts in late counting, only two other seats remain in doubt, Greenway and Lindsay, both in the outer west of Sydney.


ON THE EDGE OF THEIR SEATS

BRISBANE (Qld) votes %

Teresa Gambaro (Lib) 33,233 50.29

Arch Bevis (ALP) 32,851 49.71

CORANGAMITE (Vic)

Darren Cheeseman (ALP) 42,087 50.34

Sarah Henderson (Lib) 41,514 49.66

HASLUCK (WA)

Ken Wyatt (Lib) 37,805 50.47

Sharryn Jackson (ALP) 37,099 49.53

GREENWAY (NSW)

Michelle Rowland (ALP) 34,808 50.80

Jaymes Diaz (Lib) 33,708 49.20

LINDSAY (NSW)

David Bradbury (ALP) 38,287 50.83

Fiona Scott (Lib) 37,037 49.17

... AND OUT OF DANGER

DUNKLEY (Vic)

Bruce Billson (Lib) 39,383 50.97

Helen Constas (ALP) 37,883 49.03

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Best-case scenario gives the Coalition 74 seats

LIBERAL candidate Sarah Henderson has clawed back half her deficit in the closely fought seat of Corangamite, raising the Coalition's hopes that it could finish with more seats than Labor and win the independents' support.

Further counting in the seats in doubt yesterday was mostly good for the Coalition and bad for Labor. Corangamite became closer, Dunkley and Boothby safer for their Liberal MPs.

The counts changed constantly, going backwards as sometimes more votes were removed than added. But last night, only two seats had candidates with majorities of less than 0.5 per cent: Hasluck, where the Liberals lead narrowly, and Corangamite.

Counting of pre-poll and absentee votes lifted Ms Henderson to 40,772 votes or 49.61 per cent, just 637 votes behind first-term Labor MP Darren Cheeseman with 41,409 or 50.39 per cent. On Monday night she had trailed by 1230 votes.

In Hasluck, Labor was hoping the pre-poll and postal votes would bring the seat back to sitting MP Sharryn Jackson; instead they widened the lead of her Liberal challenger, Aboriginal health expert Ken Wyatt. Last night he had 50.41 per cent of the vote, a lead of 586.

If the Liberals take both seats, the Coalition would have 74 seats in the new Parliament to Labor's 71 and a strong claim to the support of the independents.

Australian Electoral Commission spokesman Brendan Barlow said there were still about 15,000 ballot papers lodged as postals, pre-polls or absentees that had not yet been counted in Hasluck, ensuring the result would remain in doubt for some time yet.

A result is not expected until the middle of next week which will merely be the cue for a recount.

The big development in yesterday's counting was the completion of the preference distribution in Denison, which confirmed independent Andrew Wilkie as the winner, with a lead of 1375 votes over Labor newcomer Jonathan Jackson.

However, the former army intelligence officer again refused to acknowledge his own victory, apparently fearing there might be some improvised explosive device ahead in the 10,000 or so postal, pre-poll and absentee votes yet to be counted.

Mr Jackson and Greens candidate Geoff Couser also refused to concede defeat, apparently hoping there might be something odd to come. Others see Mr Wilkie's lead as unassailable.

He won almost 70 per cent of Liberal and Green preferences, sweeping affluent suburbs such as Sandy Bay and inner suburbs Battery Point and Dynnyrne to end up with 28,493 votes, or 51.24 per cent, while Mr Jackson had 27,118 or 48.76 per cent.

In the Frankston electorate of Dunkley, Liberal frontbencher Bruce Billson widened his lead to 906 votes, and appears on track to hold the seat.

It was the same story in the Adelaide seat of Boothby, where Liberal MP Andrew Southcott extended his lead to more than 1000 votes, and now looks safe.

But Labor lifted its vote in another seat in doubt, Brisbane, where sitting MP Arch Bevis now trails former Liberal MP Teresa Gambaro by just 657 votes.

If Labor holds two of Corangamite, Hasluck and Brisbane, it would have 73 seats and the support of Greens MP Adam Bandt, making 74 in the 150-member House to the Coalition's 72.

Among other close seats, the Coalition leads in Macquarie and Labor in Lindsay, Greenway and Moreton.

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Political values redefined

IT'S 70 years since Australians have voted in a hung parliament. It's unusual for us, but normal for most Western democracies. Their experience shows it doesn't necessarily lead to weak government. If there is discipline and realism among the partners, it can lead to reforms with a wider base of support than any one party can muster. We had it here in Victoria just a decade ago: in Steve Bracks's first term, a minority Labor government governed with the support of three independents, and did so well they were re-elected with the biggest majority since the 1960s.

New Zealand has had minority governments since 1996, yet it has delivered tighter fiscal policy than we had here. In Germany, the last Social Democrat-Greens coalition under Gerhard Schroeder and Joschka Fischer pushed through pension reforms that were far tougher politically than anything we have seen in Australia since the GST.

Making minority government work is one challenge facing whoever emerges with 76 secure votes in the 150-member house. Two other challenges are to manage the widening political divide across Australia, and for all four parties in the new house to redefine what they stand for and whether we are now moving to a three-party system, or even a four-party one.

In Victoria, South Australia, Tasmania and the ACT, the government was re-elected emphatically. After preferences, 55 per cent of Victorians voted for Labor its highest two-party vote in the 25 elections from 1949. So did 53.5 per cent of South Australians, the highest Labor vote there since 1969. And so did 60.9 per cent of Tasmanians, also the highest since records began.

But in Queensland and Western Australia, people voted equally decisively for a change of government. In both states, after preferences, 55 per cent voted for a Coalition government. Only NSW was evenly divided: 49.6 per cent voted for Labor, 50.4 per cent for the Coalition.

The regional divide itself is nothing new. In Victoria, Labor has won the two-party vote at 10 of the past 12 federal elections. In Tasmania, it has now won seven straight. And the nation's capital has only once voted Liberal: in 1975, after witnessing three years of the Whitlam government.

Conversely, Queensland has voted for Labor just three times in the past 25 federal elections; and WA just four times three of them when WA native Bob Hawke was its leader. No other states lean so consistently to one side of politics.

Labor has had far worse elections in both states. In 1975, the anti-Whitlam rout left it with just one seat in each of them. But the divide between the south-eastern states and the resource states has never been greater.

It's not about emissions trading: an Age/Nielsen poll last month found overwhelming support in both Queensland and WA for Labor's scheme. The mining tax is obviously a factor: yet the Labor seats in the other big coal mining area, the Hunter region, recorded almost the smallest swings in NSW.

Unpopular and incompetent state governments clearly hurt Labor in Queensland and NSW, especially in Sydney, where the impact was magnified by the rabidly anti-Labor views of the talkback radio hosts and the Murdoch tabloids. (And conversely, the lack of any anti-Labor swing in Victoria suggests the Brumby government is heading for re-election on November 27.)

But the election outcome also challenges all four parties to redefine what they stand for. Labor began life as the party of the working class, then gradually morphed into an alliance between the unions and middle class progressives, yet has now morphed again into a party of careerist managers camped in the political middle ground, between the Greens on the left and the Liberals on the right.

One of the turning points in this election was Labor's decision in April to drop the emissions trading scheme, one of the two most important promises behind its 2007 victory.

Lenore Taylor in The Sydney Morning Herald revealed that the decision was pushed by then deputy prime minister Julia Gillard, Treasurer Wayne Swan, NSW Right leader Mark Arbib and ALP national secretary Karl Bitar. Finance Minister and MP for Melbourne Lindsay Tanner strongly opposed it. Kevin Rudd finally gave way. Cabinet learnt of the decision only after it was reported in the SMH.

Labor's leaders today are pragmatists, with no principles too precious to trade off for power. The Greens are a party of principles without pragmatism as shown by the way they have lifted their target for cutting Australia's emissions in 2020 from 20 per cent, to 30 per cent, and now 40 per cent. But they have the balance of power in the Senate now, and a member in the house; if Labor continues along its path, he could be followed by more.

Germany's Greens began as idealists, but then the realists won out over the fundamentalists and it became a party of pragmatic idealists. Will Australia's Greens do the same? Or will Labor decide to rebuild its base and reoccupy the progressive ground? The first seems to me more likely.

The Liberals and Nationals also have issues to face. This is the worst the Coalition has polled in the three south-east states since the 1940s. Scare campaigns don't work so well here, and the Coalition's policy was largely a four-pack of scare campaigns. Where was the progressive liberalism of its past?

And with Nationals rebel Tony Crook elected in WA promising to vote independently of the Coalition, the Nationals must ask themselves again: what is the point of having a National Party, if the Liberal Party decides what it does?

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In the clean-up, a nation stands divided

In 2007, the nation swung almost as one to eject the Howard government. But this time, it divided sharply. By and large, the rugby states swung to Tony Abbott and the Coalition, while the AFL states except Western Australia swung to Julia Gillard and Labor.

Why? Is it because of a growing divide between socially liberal and cosmopolitan Melbourne and Adelaide, on the one hand, and the angry, chip-on-the-shoulder populism of Murdoch tabloids and shock jocks in Sydney and Queensland?

Was it a reaction to unpopular Labor state governments? If not, how do we explain it?

Queensland, not western Sydney, was the central battleground of this campaign. In 2007, Kevin Rudd led Labor to a 7.5 per cent swing in his home state, giving Labor a rare majority of its votes and seats.

But with Rudd gone, on Saturday the Labor tide in Queensland went out as rapidly as it came in. Labor's vote in Queensland plunged 5 per cent, and it looks likely to lose nine of the 17 seats it notionally held on the new boundaries.

The punters were expecting Labor to be almost wiped out along the coast, where it lost four of its five seats. But they were not expecting the rout in Brisbane, where five more electorates appear to have changed sides.

Most were won by 2 per cent or less. Of Labor's marginal seats in the Queensland capital, only Moreton and Petrie appear to have stayed with it, although it has not given up hope on Brisbane.

Every seat in Queensland swung against Labor, even Rudd's, challenging the idea that Queenslanders were rebelling against Labor's treatment of their favourite son.

Yet while the Coalition won many Labor seats narrowly in Queensland, it had far less success in New South Wales, where a 4 per cent swing appears to have won it just four seats.

The Coalition won 50.3 per cent of the two-party vote in NSW, yet is likely to end up with just 20 of the state's 48 seats, whereas Labor won 26 and independents two. The Coalition won a swing of 13 per cent in the safe Labor seat of Fowler, but won no swing at all in four of Labor's eight most marginal seats.

The Coalition gains were mostly in Sydney, where its media allies, shock jocks Alan Jones and Ray Hadley, and the Daily Telegraph, have most influence, and the state government is most on the nose.

Those two states gave the Coalition 12 of the 17 seats it needed to form government in its own right. It picked up another in the Darwin seat of Solomon, and one or two more in Perth, where Swan and possibly Hasluck have fallen, leaving Labor with as few as three of the state's 15 seats.

But to win government, the Coalition also needed to win seats in Victoria, South Australia and Tasmania. Instead, it went backwards in all three.

In Victoria, on yesterday's figures, Labor would hold 23 of the state's 37 seats and the Coalition just 14. Labor lifted its two-party vote in Victoria to 55 per cent and not only took La Trobe and McEwen, but also went close in Dunkley and Aston.

In South Australia, no Labor seat wavered, with first-term MP Amanda Rishworth winning a 10 per cent swing in Kingston.

In Tasmania, Labor's two-party vote surged over 60 per cent, and its only threat came from independent Andrew Wilkie and the Greens.

So we have a nation divided and a minority government, from whichever side, striving for unity. Good luck.

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Complex count for sixth senator

IT HAPPENED in 2004 when Victorians elected Steve Fielding to the Senate with just 1.9 per cent of the vote. It happened again in 2006, when the DLP's Peter Kavanagh won a seat in Victoria's upper house with 2.6 per cent of the vote. Could it happen a third time in 2010?

It's clear who has won five of Victoria's six Senate seats: Labor two, the Coalition two and the Greens one.

But the sixth seat will come down to a three-way battle between Senator Julian McGauran of the Liberals, Senator Fielding from Family First, and the DLP candidate, Ballarat blacksmith John Madigan.

How come? Senator Fielding won just 2.7 per cent of the vote, and this time he has no Labor or Democrat preferences. The DLP got an even smaller vote: 2.2 per cent.

Labor's third candidate, former union leader Antony Thow, has .71 of a quota. (A quota gets you elected). Senator McGauran has .40 of a quota. But Family First has just .19 and the DLP .16 per cent. Surely the battle is between the Liberals and Labor?

No. Let's see how it works, courtesy of ABC commentator Antony Green's excellent Senate calculator (which you too can play with on his ABC blogsite).

The first five senators are elected, each using up a quota (14.3 per cent of the vote). Their surplus votes are then distributed in line with their preferences. Then, when no candidate is left with a quota, we start from the other end, eliminating the candidates with the lowest votes.

On current figures, the votes would be roughly:

Labor 323,868

Liberal 181,099

Family First 85,916

DLP 71,544

Sex Party 71,244

Lib Dems 52,700

Shooters 42,160

Others 83,673

The votes transferred are small at first, but then they build. One Nation and the Christian Democrats go out and their votes go to the DLP. The Democrats votes go to the Sex Party. The Shooters give their votes to the Liberals, while the Liberal Democrats also go to the Sex Party.

With five candidates left, the votes are:

Labor 329,084

Liberal 228,475

Sex Party 152,028

DLP 102,630

Family First 99,967

On this breakdown, Senator Fielding misses out but only narrowly and the bulk of his votes go to the DLP. That makes the score:

Labor 329,084

Liberal 228,475

DLP 197,807

Sex Party 156,818

The Sex Party goes out, and its preferences go to Labor. But those of the Liberal Democrats now go to the DLP, making the score:

Labor 428,412

DLP 253,062

Liberal 230,710

Senator McGauran then goes out, and his preferences too go the DLP, making the final outcome:

DLP 478,556

Labor 433,628

So, on figures at the close of counting on Saturday night, the DLP would win the final seat. But in the real world, that's far from certain.

First, there are maybe half a million more votes still to be counted, mostly from postal and absentee voters. Second, the numbers shown here assume everyone voted above the line, so their preferences follow the party ticket. But there are still many hardy souls who vote below the line, filling out the entire ballot paper, and their preferences are less predictable.

If Senator Fielding lifts his share of the vote just slightly, he could finish ahead of the DLP, and then its preferences would allow him to leapfrog his way up and claim the seat.

But history shows the postal votes will strongly favour the Liberals, and that could see them close the gap, giving Senator McGauran the final seat on DLP and Family First preferences, rather than the other way around.

We won't know for some weeks, until all votes are in, and the House results are completed. Then, finally, electoral officials will turn their attention to the Senate.

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Greens win seats in every state, set to take balance of power

THE Senate is set to move sharply to the left, with the Greens winning a Senate seat in every state, and Labor taking a Coalition seat in Tasmania.

The Greens will have the balance of power to themselves when the new senators take up their seats on July 1, 2011. That means no legislation will pass the Senate without support from at least two of the three main parties: either Labor and Greens, Coalition and Greens, or the Coalition and Labor.

The Coalition lost at least two seats on Saturday, possibly three. The one seat in doubt is the last seat in Victoria, where Liberal senator Julian McGauran is in a three-way battle with the DLP's John Madigan and Family First senator Steve Fielding.

On Saturday night's figures, ABC analyst Antony Green's Senate calculator suggested the DLP would win the seat on a stack of preferences. But only a small shift of votes would give the seat to Senator Fielding. And the likely Liberal gains as postal votes are counted mean that despite the current figures, Senator McGauran probably has the best chance of all.

In most states, the six Senate seats being contested divided 3-2-1 between the Coalition, Labor and the Greens. That is the outcome in NSW, Queensland, WA and South Australia, and the most likely outcome in Victoria.

In Tasmania, the collapse of the Liberal vote cost Senator Guy Barnett his seat, with the Coalition winning two of the state's six seats, Labor three and the Greens one.

It is the second election in a row that Labor and the Greens have won four seats between them in Tasmania, and it guarantees them a clear majority in the Senate for any legislation they agree on.

In other results:

The Greens took a Senate seat from the Coalition in Queensland, where the freak vote in 2004 saw the Liberals win four of the six seats between them.

The Greens took seats from Labor in both NSW and South Australia.

In the ACT, Liberal senator Gary Humphries narrowly withstood a record Greens vote to keep his seat.

Saturday's vote will bring to an end the six years of Coalition dominance of the Senate first with 39 seats and a majority of its own, and more recently, with 37 seats and Senator Fielding as a regular ally.

The new 76-member Senate will have 34 Coalition senators, 31 Labor, nine Greens, South Australian independent Nick Xenophon, who was not facing re-election, with the last Victorian seat still in doubt.

Part of the Greens' success was due to its support from the Australian Sex Party. It won 2 per cent of the vote nationwide, almost matching Family First's 2.1 per cent, and all those went to the Greens.

The Greens' own vote was a record 13 per cent nationwide, and their final vote after preferences is likely to be around 2 million, making them the largest third party we have seen. The Greens polled 23 per cent of the vote in the ACT, 20 per cent in Tasmania, 14 per cent in Victoria and WA, 13 per cent in Queensland and South Australia, and 10.4 per cent in NSW.

After Victoria, the next closest contest was in New South Wales, where the Greens put up their NSW leader, former communist Lee Rhiannon.

NSW voters faced a very congested ballot paper, with 80 candidates from 33 groups. Much of that was due to builder and serial candidate Glenn Druery, running this time for the Liberal Democrats, who organised preferences for himself from 15 other groups.

While he polled just 2 per cent of the vote, Antony Green's calculator suggests preferences would lift that to 8.2 per cent before he was eliminated.

Two old parties, the Australian Democrats and One Nation, crumbled into insignificance. After Family First and the Sex Party, the next biggest votes went to the Shooters Party and the Liberal Democrats, each with 1.6 per cent.

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Greens eye Victorian Senate seat

THE Greens appear set to win a Senate seat in Victoria for the first time, with the polls suggesting it is on track to almost win a seat in its own right.

The most likely outcome is that Greens medico Richard di Natale will take the seat of Family First senator Steve Fielding, with the Coalition retaining its three senators and Labor two.

But if late polling showing a strong swing to Labor in Victoria is borne out in today's voting, there is an outside chance that Labor could gain a third senator, unseating Liberal veteran Julian McGauran.

The Age/Nielsen polls throughout the campaign have not asked about Senate voting, because experience has shown they are unreliable guides to what voters do in the polling booth.

But polls throughout the campaign have shown a strong swing to the Greens across the nation, that if reflected in the ballot boxes, would give the Greens the balance of power in the new Senate in their own right, picking up at least two extra seats and possibly up to five.

There could even be an immediate change in the balance of power, with some polling in the ACT showing the Liberal vote crumbling following the Coalition's decision to slash the public service.

A swing of just 2 per cent from Liberals to Greens would have Greens candidate Lin Hatfield-Dodds unseat Liberal senator Gary Humphries. While new senators elected from the states will not take up their seats until July 1, 2011, the territory senators start immediately.

To elect a senator from the states, a party needs 14.3 per cent of the votes after preferences. Our polls for the House of Representatives throughout the campaign have shown the Greens averaging 15 per cent in Victoria, 12 per cent in New South Wales and South Australia, 11 per cent in Queensland and Western Australia, and 17 per cent in Tasmania.

On those figures, the Greens are likely to hold their seats in Tasmania and WA (where Labor's vote is weak), and gain seats in Victoria and Queensland (another weak Labor state). In NSW and SA, Labor and the Greens will probably fight out one of the last two seats, with the Coalition fighting the minor parties of the right for the other.

Family First's support in Victoria has dwindled to 2 per cent, and with Labor preferences directed to the Greens, Senator Fielding has only a remote chance of holding his seat. Family First's best chance is in SA, where wealthy builder Bob Day heads its ticket.

Six senators will be elected today from each state. The other six senators elected from each state in 2007 will remain in the Senate until 2014.

Normally, each state splits its seats between left and right. Labor and the Greens would share three seats between them, while the Coalition, smaller right-wing parties and independents share three.

But in 2004, Labor preferences in Victoria gave the last seat to Senator Fielding instead of the Greens, while the strong Coalition vote in Queensland gave it four of the six seats.

Statewide polling suggests the Coalition has only a remote chance of repeating that in Queensland, but a better chance in WA, where the Nationals are running a separate ticket. Yet there is an outside chance of Labor and the Greens sharing four of the six seats in Victoria and Tasmania.

Two senators will be elected today from each territory for three-year terms.

A Greens win in the ACT would mean that a Labor government would no longer need Senator Fielding's vote to pass legislation opposed by the Coalition, while a Coalition government would need the support of Labor or the Greens to pass any legislation.


THE SENATE: WHO YOURE REALLY VOTING FOR

KEY PARTY PREFERENCES

Labor Greens, then

Family First

Coalition Family First,

then Greens

Greens Labor, then Coalition

Family First Coalition,

then Labor

MICRO-PARTY PREFERENCES

To Family First, then Coalition

DLP

Climate Sceptics

Citizens Electoral Council

One Nation

Christian Democrats

Liberal Democrats

To Family First, then

Labor

Senator On-Line

Building Australia

To Greens, then Labor

Joseph Toscano

Aust Democrats

Australian Sex Party

Socialist Alliance

Secular Party

OTHERS

Socialist Equality: 3-way split, Greens/Coalition/Labor

Shooters and Fishers: Coalition, Labor.

Carers Alliance: 2-way split, Coalition/Labor

Stephen Mayne:2-way split, Family First/Greens

Read more >>

State swing may save Labor vote

A SWING to Labor in Victoria could make it the state that saves Labor from defeat in today's election but an unpredictable hung Parliament remains as a strong possibility, the Age/Nielsen poll reveals.

A state breakdown of the five polls taken through the campaign show Victoria and Tasmania are the only states in which Labor is likely to gain ground today.

But the final poll, which had a larger sample and was taken in the final nights of the campaign, confirms earlier polling showing sizeable swings of around 3 per cent against Labor in the crucial states of NSW and Queensland, and 4 per cent in Western Australia.

If those swings were evenly distributed across each state which they never are, but it's not a bad guide the Coalition would gain 15 seats from Labor: seven in NSW, six in Queensland and two in WA.

The Northern Territory is not polled separately in our poll due to its small population, but the Darwin seat of Solomon (which Labor holds by 0.2 per cent) normally reflects any national swing.

But Victoria is heading the other way. Polling of 187o Victorian voters over the five weeks of the campaign found an average swing of 2 per cent, which strengthened over the campaign.

Assuming a uniform swing, that would see Labor take McEwen and La Trobe from the Coalition, although any other seats appear out of range.

On the other hand, the average of the polls shows the Greens vote soaring in Victoria from 8 per cent in 2007 to 15 per cent this time, while Labor's vote has fallen from 45 per cent to 42 per cent. On those figures, the Greens would take Melbourne from Labor.

A small sample averaged over the past two months also shows a 2 per cent swing to Labor in Tasmania, but it already holds all five seats there. In South Australia, there has been a 1 per cent swing to the Coalition over the campaign, but no Labor seats are within range.

Labor starts with a total of 88 seats in the 150-member House: the 83 it won in 2007, plus five net gains from the redistribution. If it loses a net 13 seats, it would lose its majority. If the Coalition gains a net 17 seats, it would gain a majority.

If you take an average of all five polls, we are probably heading for a hung Parliament, with the independents deciding who rules us. If you look at just the last three polls, Labor would get back with a reduced majority.

In the past, an average of all polls over the campaign has been a good guide to the outcome. But maybe not this time, when the Rudd leaks dominated the second and third weeks. Labor's vote was high at the start, low in the middle, and high at the end.

Were all five polls an equally good guide to the result? Or were the last two polls the ones that mattered? We will find out tonight.

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Coalition to revive ID card

A COALITION government would revive the controversial Howard-era plan for a national access card to identify every individual receiving government benefits, shadow treasurer Joe Hockey has revealed.

On the eve of what Prime Minister Julia Gillard says will be a "cliffhanger" federal election, Mr Hockey has told The Age that giving everyone a single identifier for access to health and welfare benefits could lead to "massive improvements in productivity in health and welfare".

But instead of everyone having a card, this time the identifier could be in electronic form.

In other developments as Australians prepared to go to the polls tomorrow:

Ms Gillard rushed out a new policy in a bid to win the family vote, sweetening her parental leave plan with the additional promise of two weeks' paid leave for new fathers.

The Coalition revealed plans to cut a further $1.5 billion from the federal education budget, including programs to help the poorest students succeed at school and enter university.

Internal emails seen by The Age revealed the Greens had been trying to "stack" calls to Melbourne talkback radio kings Neil Mitchell and Jon Faine with pro-Bob Brown messages.

Liberal leader Tony Abbott launched himself into a final campaign marathon, vowing to keep going for 36 hours until poll eve tonight.

Mr Hockey, revealing plans to revive the access card, said it would open the way for e-health systems to allow diagnosis using the internet, and give doctors access to patients' records.

The lack of an identifier and suitable software had left Labor's e-health initiative becalmed, despite heavy spending on development. "We've got to have a single identifier for each patient, and software systems that can speak to each other, and get GPs and other professionals to have a computer on their desk to access the system," Mr Hockey said.

As human services minister in the Howard government, Mr Hockey led the drive to introduce the access card over objections from privacy advocates. The plan ran into trouble in the Senate, and was then dumped by the Rudd government, which cited cost and privacy concerns.

Mr Hockey said the failure to get the card introduced was his biggest regret in politics. Asked if he would try to introduce it again if the Coalition wins, he replied: "Absolutely but only if we get fair dinkum consolidation (of agencies' IT systems) to give better use of technology.

"Whether you go a card or not, I don't know. Everyone has a Medicare card already, but that's old technology. We're spending $140 billion to $150 billion a year on health and welfare, but what productivity improvements have there been in service delivery? None."

In recent months Health Minister Nicola Roxon and Human Services Minister Chris Bowen have revived aspects of the access card plan, floating a single system to store individuals' health information, and to allow government agencies to share a single IT platform.

Mr Hockey nominated tax reform, increasing workforce participation by young people, mothers and older people, and reform of Commonwealth-state relations as priorities if he becomes treasurer, along with getting the budget into surplus.

He said an Abbott government would bring in a tax specialist from the private sector to head its tax reform task force over the next year, rather than leave it to Treasury secretary Ken Henry.

But he expressed confidence in Dr Henry and Reserve Bank governor Glenn Stevens.

Ms Gillard used her final address to the National Press Club ahead of election day to announce the extension of Labor's 18-week paid parental leave scheme with an extra two weeks' leave for fathers.

From July 2012, fathers and secondary carers who meet work and income tests will receive two weeks' leave paid at the federal minimum wage, currently $570 a week.

The opposition said the announcement showed Labor was panicking. "This is a very, very small step to boost an impoverished scheme," said Coalition spokeswoman for the status of women, Sharman Stone.

Leaked internal research by Labor, reported last night, suggested the party was ahead nationally, but could lose the election due to big swings in New South Wales and Queensland.

Ms Gillard said in her Press Club address: "We are in one of the closest election contests in Australian history with the starkest of choices to be made.

"I present to the Australian people the better plan for a strong economy and for the benefits and dignity of work. I present with a better plan to help you manage your cost of living."

Mr Abbott likened the race to a cricket match. "It's as if there's five minutes to go in a test match, the scores are level and we've got to make sure we win."

He wanted to give Australians the "best possible chance" to change a bad government.

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Time to change this silly game - REALITY CHECK

ON PAGE 2 of the Coalition's policy costings, the principals of accounting firm WHK Horvath put a crucial caveat on their endorsement of it. The numbers add up, they say, "based on the assumptions provided" to them by the Coalition.

The Coalition, they write, "provided access to the assumptions used to determine the cost of individual initiatives". But the assumptions were never independently tested: not by Horvaths, not by Treasury, not by the Finance Department.

Any costings are accurate only if the assumptions on which they are based are accurate. We have only the Coalition's word on that. Labor disputes it, on several big-ticket items, with arguments that look persuasive.

But because the Coalition refused to submit its policies to be costed by the officials in Treasury and Finance, what we have will be no independent judgment. Which side you believe is up to you.

In 2007 Labor refused to submit its most sensitive policies for costing until it was too late. In 2010 the Coalition likewise has refused to have its policies costed by the experts who know exactly how to do it.

The claim that it couldn't trust the officials is a phoney excuse. The truth is that Coalition didn't submit their policies because they feared the experts would find mistakes. Just like Labor in 2007.

OK, we've now had two elections in a row when whoever is in opposition has boycotted the process. Why? Because they get access to the experts only when it's too late — once the campaign has started, and their policies have to be made public.

Please, guys, can we make this process work in the interests of taxpayers? How about you sit down together when the election is over and come up with a better set of rules?

When Labor was in opposition, Lindsay Tanner proposed that oppositions be allowed to submit policy proposals privately to Treasury and Finance for costing for a year before an election is due. That would give them the same access as the government has. It would be fair. It would be democratic. It would be in the interests of us — the taxpayers who pay for all this.
What did Labor do when it came to office to reform the process? Nothing.

Labor's critique raises serious doubts about billions of dollars of the Coalition's claimed financing sources, savings and spending plans
.
What the true bottom line is, frankly, is anyone's guess. Until they fix this silly game, and agree on rules that are fair to all — including the Greens — I'd be sceptical about anything they claim.

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Odds on for an overwhelming Labor victory, say bookies

AT NATIONAL level, the bookies have Labor as overwhelming favourite to win Saturday's election. But at seat-by-seat level, their odds are pointing to a hung Parliament.

On the odds posted late yesterday by online bookmakers Centrebet and Sportsbet, punters are expecting the government to lose a net 13 seats that are notionally Labor after the redistribution leaving it with just 75 of the 150 seats in the House.

In the past 24 hours, the Coalition has swept to favouritism in the Sydney seats of Bennelong and Lindsay, which until now Labor had been expected to hold.

Overall, the bookies have the Coalition as favourites in 13 notionally Labor seats eight of them, seats it won in 2007, and the other five, Liberal-held seats which on 2007 voting, would be Labor under the new boundaries.

But Labor is tipped to pick up just one seat McEwen, on Melbourne's north-east fringe. And as the bookies are calling it, that would be offset by the loss of Melbourne to the Greens.

If all seats go to the current favourites, Labor would have 75 seats in the new 150-member House, the Coalition 71, independents three and the Greens one. To make the House workable, Labor would have to reach some binding agreement with the Greens, and/or one or more independents.

Yet at national level, few are punting on a hung Parliament. The odds are shortening, but late yesterday the hung Parliament was a $3.22 outsider at Centrebet, and $3.85 at Sportsbet.

That was about the same as the odds offered on the Coalition winning a majority: $3.60 at Centrebet and $3.72 at Sportsbet.

Labor remains the clear favourite with punters at both agencies, with Centrebet offering $1.28 for your dollar and Sportsbet $1.27.

Judging from the odds, the closest seats are now the outer western Sydney seat of Lindsay (which the Liberals are tipped to win narrowly) and the Darwin seat of Solomon (which Labor is tipped to retain narrowly).

In Victoria, Labor is firming as favourite to hold Deakin and Corangamite, and to take McEwen. Sportsbet still has Corangamite as the closest seat, but Centrebet's odds are now pointing to a potential cliffhanger in La Trobe, where Liberal Jason Wood won narrowly in 2007 and is tipped to do so again.

In New South Wales, the Coalition is now tipped to hold two seats it notionally lost in the redistribution (Gilmore and Macarthur) and to take Bennelong, Lindsay, Macquarie and Robertson from Labor.

In Bennelong, former Davis Cup hero John Alexander has surged to favouritism over former ABC TV journalist Maxine McKew, potentially wreaking revenge on the defeat she inflicted on prime minister John Howard in 2007.

But in Queensland, where 11 notionally Labor seats are at risk, the bookies have the Coalition as favourite in only five.


WHAT THE PUNTERS THINK

COALITION GAINS (13)

NSW (6), Queensland (5), WA (2)

LABOR GAINS (1)

Victoria

GREEN GAINS (1)

Victoria

YET OVERALL RESULT

LABOR $1.28/$1.27

COALITION $3.60/$3.72

HUNG PARLIAMENT $3.22/3.85

SOURCE: ODDS FROM CENTREBET AND SPORTSBET

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Bonds are second-best, but better than much else on offer

THE Coalition's infrastructure policy may be a second-best policy. But given the political realities, it is one of the best economic policies of this campaign.

It's second-best in that some of the projects it enables would be more expensive than if they were built in the old way - where governments borrow the money, build the project, and run it.

Private sector operators have to make a profit, and pay higher interest rates (though hopefully not the 10 per cent Andrew Robb cited in selling the Coalition's plan).

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Sometimes their managerial skills will allow them to do all this and still run the project at lower cost to the public. Sometimes they won't. But the reality is that while it makes economic sense for governments to take on debt to build infrastructure, in our climate it doesn't make political sense. The Coalition has fanned a scare campaign against government debt, and Labor has buckled under.

As a nation we seem to think it's OK for us to take on debt to buy overpriced homes, but not for governments to take on debt to build the roads, rail, water projects and broadband that we need. So how will we build it?

The Coalition proposes tax breaks to help private operators to raise the money to build some of it. Under its plan, super funds would pay tax of just 5 per cent on interest from approved projects, a big cut from 15 per cent now.

It's a perfect fit. Super funds are long-term investors, and infrastructure is a long-term investment.

But it's not a total solution.

In some cases, it will shift the real cost from us as taxpayers to us as motorists paying tolls. In others, taxpayers will still pay, but the cost is pushed downstream and into less obvious channels.

Investors might also remain wary. Toll roads are not doing well. In Sydney, the Cross-City Tunnel and the Lane Cove Tunnel went bankrupt. In Melbourne and Brisbane, Eastlink and the Clem7 tunnel are running well below target.

But the tax breaks would give investors more confidence - particularly in ambitious, high-cost projects such as the Brumby government's plans for Melbourne's rail network. And the tax breaks would also apply to state-run projects.

The Coalition also pledges to publish benefit/cost analyses of all projects. It would sound great if only it hadn't also pledged to start building the Melbourne-Brisbane inland rail link - which, the benefit/cost analysis found, would return just 58 cents in benefit for every dollar spent on it.

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A deficit of difference

THIS election has two economic issues. Does Labor's record in office warrant re-election? And which side offers better leadership, better policies, and a safer pair of hands for the future?

There are no easy answers. The Coalition was out of office when the global financial crisis hit: had it been in government, it would have taken a different position. The political theatre would have been reversed: the Coalition running up deficits, Labor attacking them.

The budget papers imply that in the four years of expected deficits, from 2008-09 to 2011-12, half the budget blowout was due to the financial crisis and half to the stimulus measures. Whenever pressed, the Liberals concede that deficits and debt in some measure were unavoidable.

Economists argue over what would have happened had there been a smaller stimulus, or none at all. Treasury estimates it added 2 per cent to GDP in 2009, and saved 200,000 jobs. Some others estimate a smaller bang for buck. What is clear is that without the stimulus and the bank guarantees that headed off a financial collapse Australia would have suffered a far worse downturn.

The $21 billion of handouts to households allowed many to pay down debt and others to keep retail demand rising and shops are big employers. Even the $16 billion for school buildings delivered only after Australia had begun to emerge from the crisis has played a key role in the recovery of growth and jobs since work began a year ago.

Why? Because private sector activity collapsed. In the non-residential sector excluding education approvals halved from $28 billion in 2007-08 to $14 billion in 2009-10. Bank lending to business has shrunk by $87 billion, or 11 per cent and for many companies there are no other lending sources.

Think about that. Even now, there are 150,000 more Australians out of work and 180,000 more working shorter time than before the crisis. Growth is sluggish, and GDP per head remains less than two years ago. Ask yourself: what would Australia be like now had the government not pumped all that money into new construction?

Construction is usually the epicentre of any slump: not this time. The stimulus kept the industry going. In the March quarter, 38 per cent of work on non-residential buildings was on schools and the like, up from 5 per cent before the crisis. Work also began on 4259 public housing units, more than they normally build in a year.

Without the stimulus, construction would have collapsed in 2009-10 as it did in 1990-91 when 15 per cent of construction workers lost their jobs. That's another 150,000 people unemployed, with flow-ons throughout the economy costing who knows how many more jobs.

Yes, a lot of money was wasted, and Labor has to answer for that. Brad Orgill's taskforce concluded that $1 billion was wasted from middlemen and contractors overcharging for school buildings. Probably more than that was wasted from the Rudd government's refusal to halt its foil insulation program. Even so, they saved us a much worse cost.

We will have to pay later for what we borrowed to avert a crisis. But, as Reserve Bank governor Glenn Stevens has argued, Australia's public debt is a non-issue by global standards. Our debt will peak at 6 per cent of GDP, Japan's at 154 per cent, the US at 86 per cent and even Germany 75 per cent.

By its actions, if not its rhetoric, the Coalition concedes that. It now plans to deliver a surplus in the same year as Labor, and of roughly the same size. We now have a bipartisan fiscal policy. Whoever wins, we'll get the same deficits and debt.

We'll also get the same lectures on how bold economic reforms in the 1980s and '90s laid the foundations for Australia's economic success along with a refusal by either side to risk any of its skin to take similar bold decisions today.

The classic example is the failure to tackle climate change. Tony Abbott and Julia Gillard once supported emissions trading. Then, when the going got tough, they cut and ran. The difference now is that Abbott says he'll never have one, whereas Gillard at least has left the door open.

Yet depending on which British or US monitoring agency you believe, the past year has been the hottest or second hottest since records began. Even to meet both parties' common target of reducing emissions in 2020 to 5 per cent below 2000 levels would require us to cut per capita emissions by more than a third over the coming decade.

You cannot get there without putting a price on carbon. And you cannot do that unless you have leaders and ministers who are prepared to take on public opposition and put their political skins at risk to argue, persuade, and ultimately drive the legislation through. That is how Bob Hawke, Paul Keating and John Howard achieved their reforms.

But, as Ross Garnaut argued in his recent Hamer Oration, that period ended with the introduction of the GST, and there have been no big economic reforms since.

Key reforms proposed by the Henry report have been ruled out by both sides. There has been little put forward to end the waste in which 10 per cent of men (and even more women) of prime working age are not even looking for work and that hundreds of thousands of our young are heading down that path.

Nor has there been any new policy to tackle the single biggest issue for many other young Australians: housing affordability.

In 2003, then Reserve Bank governor Ian Macfarlane warned against complacency, publicly urging the government to give "priority to tomorrow's working age population, rather than satisfying the demands of yesterday's".

At this election, neither side is voting for the future.

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Cliffhanger - bookies give Labor slim lead

THE bookies still say it's Labor but only just. And despite appearances, the polls are converging, and pointing towards a cliffhanger result in Saturday's election.

A new Morgan poll, a very interesting Tasmanian poll for Launceston's daily, The Examiner, and a brace of polls in marginal seats published at the weekend all imply that Labor leads narrowly.

But the swings to the Coalition in Queensland and New South Wales states where Labor has 22 marginal seats to defend could see the Liberals make enough gains to force a hung parliament, or even snatch victory despite Labor winning more votes.

The Examiner poll added its spice to the mix showing the Liberals are polling so badly in Tasmania that the Greens have a chance of overtaking them and winning Hobart's two seats, Denison and Franklin, off Labor, on Liberal preferences.

The bottom line is that the election remains very open. All the polls agree that Labor is gaining ground in Victoria, putting Liberal MP Jason Wood at risk in La Trobe. But the Coalition is making gains in NSW, Queensland and WA, while South Australia is reporting no change.

The outcome will be decided in the campaign's final week and a hung parliament, with Greens and independents holding the balance of power, is a strong possibility.

That is not how the bookies see it. They still have Labor firming even though its majority would be reduced to just four seats.

Last night the four online bookies Betfair, Centrebet, Sportbet and Sportingbet on average were offering $1.31 for a dollar punted on a Labor win, and $3.58 on the Coalition.

But Centrebet and Sportsbet agree that Labor is likely to lose 11 of its notional 88 seats going into the election including five of the six seats that the redistribution notionally shifted from the Coalition to Labor. It would gain just one seat McEwen, on Melbourne's north-east fringe but lose Melbourne to the Greens.

If the punters are right, Labor's majority would be cut to four seats in the new Parliament. Labor would have 77 seats, the Coalition 69, independents three and Greens one. But two of Labor's seats are seen as virtually lineball: Lindsay in Sydney's outer west, and Darwin's seat of Solomon. If it loses them, it loses its majority.

Conversely, the bookies think Labor still has a decent outside chance of taking Hughes (NSW) from the Coalition, retaining Hasluck (WA), and holding the Mackay seat of Dawson, where the Liberals' George Christensen has been damaged by the publication of undergraduate writings in which he declared women "stupid".

Yesterday's Galaxy poll was reported as showing the Coalition ahead by 51.4 per cent to 48.6. In fact, that was just the outcome in the 20 marginal seats polled.

On average, it found a swing to the Coalition of 1.6 per cent, implying that if its choice of seats was representative Labor leads 51-49 nationwide.

But its four Queensland seats showed a 5.4 per cent swing to the Coalition, which it translated as a gain of 10 seats. In NSW it found a 2.4 per cent swing (seven seats) and in WA a 2.1 per cent swing (two seats). While Labor would claw two seats back in Victoria (McEwen and La Trobe), this would give the Coalition a bare majority in its own right.

Of course, statewide swings are not uniform, and the Coalition would need a lot of luck to win 17 seats on a swing of just 1.6 per cent.

A separate sample of marginal seats last week by Newspoll closely resembled Saturday's Age/Nielsen poll, which found Labor ahead by a 53-47 margin with a strong swing to the government in Victoria offset by smaller swings against it in NSW, Queensland and WA. Victoria does matter. As does Tasmania. A poll of 1000 Tasmanian voters late last week for The Examiner found Labor with a massive 60 per cent of the two-party vote. But while it was in no danger of losing any seats to the Liberals, it is at risk of losing the two Hobart seats to the Greens, on Liberal preferences.


WHAT THE POLLS SHOW

AGE/NIELSEN

Labor 53%

Coalition 47%

Swings against Labor in NSW, Queensland and WA put it at risk.

MORGAN

Labor 51%

Coalition 49%

Forecasts hung Parliament.

Labor losses in NSW, Queensland and WA.

GALAXY

In 20 marginal seats, swings averaging 1.6% to Coalition. Big losses in Queensland and NSW could see hung Parliament or Coalition win.

NEWSPOLL

Marginal-seat survey finds big swing to Labor in Victoria, smaller swings against it in NSW and Queensland. Implies Labor win with reduced majority.

EXAMINER

Tasmanian poll finds Coalition doing badly, Labor at risk of losing two seats to Greens.

Read more >>

Labor claws back but too close to call

LABOR is clawing its way back. But a state breakdown of the four Age/Nielsen polls suggests the Coalition still has a fighting chance of winning the 17 seats it needs to win government.

Look at where each state is heading, and the possibility of a hung Parliament might be a bit higher than the 5-1 odds online bookie Sportsbet was offering yesterday.

Today's poll shows Labor back roughly where it was at the start of the campaign. The online bookies agree. Last night the four of them Sportsbet, Sportingbet, Centrebet and Betfair had a winning bet on Labor paying between $1.32 and $1.40, while the Coalition has drifted to between $3 and $3.35.

But the big question is whether the Coalition's lead in the previous two polls was just a fleeting reaction by voters to the Rudd leaks or whether the Coalition's support is stronger than these figures suggest.

Nielsen is the only pollster that has called the result correctly at the past four Federal elections. But each poll samples only about 1400 voters, and the margin of error in such a survey is 2.7 per cent either way.

Past elections have shown that the average of polls taken over the campaign is a pretty good guide to the outcome especially at state level, where it is the only way to compile a sample of reliable size.

Their findings this time can be summarised very simply. Labor is gaining ground from the Coalition in Victoria but losing ground to the Greens. South Australia is showing no overall movement either way.

But in New South Wales, Queensland and Western Australia, the Coalition is heading for significant gains. And the first two are the states that will decide this election.

In Victoria, the bookies see only two seats changing hands: Labor taking McEwen from the Liberals, and the Greens taking Melbourne from Labor. But with our poll finding a swing of up to 2 per cent to Labor in the state, the close one could be La Trobe, where Liberal MP Jason Wood last won by just 0.5 per cent.

It's a different story across the Murray. While Labor still has a narrow lead in NSW, the polls show a swing of up to 3 per cent to the Coalition since 2007 and seven Labor seats are within reach of that. This week Labor picked up some ground in Queensland, but even so, our surveys are pointing to a swing of 3 per cent or more with up to six Labor seats directly in line.

And in WA, our surveys suggest the Coalition still has a commanding lead, giving it a strong chance of picking up two seats that are notionally on the Labor side.

Throw in the Darwin seat of Solomon, which is always lineball, and the certainty of above-average swings in some seats, and this election is still open.


HOW THE STATES WOULD VOTE

Average of last four Age/Nielsen polls

NSW Vic Qld WA* SA/NT* Aust

First preferences % % % % % %

Labor 39 42 35 33 41 39

Coalition 43 39 46 51 40 43

Greens 12 14 11 11 11 13

Others 7 4 8 4 7 6

Two-party preferred

Labor 51 56 47 44 53 51

Coalition 49 44 53 56 47 49

Swing to Coalition 3 -2 3 3 0 2

SOURCE: FOUR AGE/NIELSEN POLLS SURVEYING 5471 VOTERS DURING ELECTION CAMPAIGN.

* SA AND WA INCLUDES ALL FIVE POLLS SINCE EARLY JULY

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AFP probes leak as opposition accused of hiding $8bn

THE Australian Federal Police will investigate who leaked a Treasury costing of a Coalition policy proposal, as Labor accused the opposition of hiding an $8 billion long-term cost of its promise to lift defence pensions.

As the campaign rhetoric escalated, shadow finance minister Andrew Robb also questioned the integrity of Treasury officers, warning that the Coalition would not submit any further policies to be costed until the matter was resolved.

Mr Robb said he was concerned that the officials carrying out the costings "may have a political agenda" and could be "engaged in criminal activities to create a political problem for us".

"It is important to have Treasury test [the cost of Coalition policies], but only if it can be shown that they are totally independent and that they are impartial," Mr Robb said. "Their impartiality is critical to them properly assessing the costing of both sides . . . We are very concerned that [the costing] is not compromised by the potential of individuals who may have a political agenda, who are responsible for carrying out the assessment of costings on all these programs."

The Coalition has so far submitted only 11 minor spending proposals totalling $388 million less than 2 per cent of its $24 billion of new spending plans to be costed by the Department of Finance.

Mr Robb spoke with Australian Federal Police Commissioner Tony Negus yesterday to urge the AFP to investigate who told The Sydney Morning Herald that Treasury had found an $800 million hole in one of the Coalition's policy costings.

The opposition in May claimed it would save $2.44 billion in interest bills over four years by not building the National Broadband Network. According to the Herald report, since confirmed by Treasurer Wayne Swan, Treasury estimated the saving was only $1.6 billion.

"The Commissioner . . . advised that the investigation would be conducted as a matter of priority," Mr Robb said.

Shadow treasurer Joe Hockey said that unless the leaker was identified, the Coalition would instead release costings made by its accounting firm next Wednesday.

A row also escalated over the long-term cost of the Coalition's pledge to allow some defence pensions to be indexed to wage growth rather than the consumer price index (CPI), whenever wages are growing faster than prices.

While the promise will cost just $98 million in the next four years, the government said it would cost $8 billion over the next 45 years, with defence pensions ultimately rising by 20 to 25 per cent as higher indexation operated like compound interest.

"The Liberals would immediately increase the unfunded liability of the military superannuation scheme by $8 billion," Finance Minister Lindsay Tanner and Veterans' Affairs Minister Alan Griffin alleged.

But a Coalition spokesman said the long-term cost would be only $4.8 billion, and the Coalition would put an extra $100 million into the Future Fund, which would be followed by further payments to meet that cost.

"Over time it will cost more, and it's not insignificant, I accept that," Opposition Leader Tony Abbott responded in a radio interview.

"In any one year, it is bearable and we ought to bear it because if we expect people to put their lives on the line for our country, we've got to be prepared to show some reasonable commitment to them," he said.

The plan will benefit only 4270 of today's armed forces because it applies only to a scheme closed to new entrants in 1991.

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Coalition spending cuts amount to just 0.1%

THE Coalition has used up almost all its budget savings for new spending and tax cuts, leaving it with a bit over $1 billion of net savings over the next four years on its own costings.

Analysis by The Age finds that, on its own costings and excluding all its proposals for new transport projects, the bottom line is the Coalition would improve the budget balance over the next four years by just $1265 million.

On the Coalition's own costings, the net impact of its plans would be to reduce spending by just $796 million, and raise taxes by $469 million.

On official figures, budget spending over the four years is estimated to be $1430 billion. If the Coalition's costings are right, it would cut spending over that time by less than 0.1 per cent.

If so, what was all the fuss over deficits and debt really about? Given the margin for error, the Coalition is planning to spend just as much as Labor is. If Labor has been "spending like a drunken sailor", the Coalition plans to join the party.

In fiscal terms, the two parties will go to the election with identical policies. The spending will be in slightly different areas, but in its impact on the economy, nothing would change.

This is probably true even if, as many suspect, the real reason the Coalition is now threatening to refuse to send its policies for costing is that it knows that some were too optimistic big time.

Its plan to extend the education tax rebate is so sweeping that its costing of $760 million over four years is simply unbelievable.

On another costing, Treasury has reportedly told Treasurer Wayne Swan that the interest savings the Coalition claims from scrapping the national broadband network are overstated by $840 million.

The Coalition is now doing a dummy spit and threatening to boycott the costings process because Labor leaked that to the media. Well, guys, if you want us to elect you to be our government, you need to be made of tougher stuff.

The reality is, the Coalition has come up with excuse after excuse to delay submitting its proposals to the Department of Finance and Treasury for costing before tonight's deadline.

In 2007, Labor did the same. It submitted just 32 proposals for costing before the deadline, and put in most of its plans after the deadline, making it impossible for them to be costed.

The Coalition has followed a similar path. It lifted its tally on Monday by submitting almost $20 billion of policies for costing: essentially, its pledge to scrap the mining tax, and all the things Labor proposes to spend that money on.

But so far it has submitted just 11 small spending proposals to be costed. It estimates they would cost $388 million, out of more than $23 billion of new spending proposals. That's 1.5 per cent.

Among the policies withheld from costing are:

Replacing Labor's bare-bones paid parental leave scheme with its own more generous one. The Coalition estimates its gross cost of its scheme as $8.8 billion, which it says would be more than offset by $6.1 billion from its 1.5 per cent levy on business profits, and by $3 billion of savings on the baby bonus and other welfare benefits.

More than $5 billion of new health spending, and a similar amount of savings.

Its plan to freeze public service recruitment, announced in May (estimated saving: $3.8 billion).

The interest saving from scrapping the national broadband network ($2.4 billion).

Its plan to extend the education tax rebate ($760 million).

The Coalition created the charter of budget honesty. Now that it is in opposition, it should not use a flimsy excuse to dodge it.

The same is true for Labor, which has submitted most but not all of its spending and saving plans. Put them all on the table.

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Libs skate over the details - DEBATE 2010

TONY Abbott could end up as the Steve Bradbury of Australian politics. It had seemed that both Kevin Rudd and Julia Gillard were skating away from him. But then Gillard brought down Rudd and Rudd kicked out, almost bringing down Gillard and allowing Abbott to sail past her as the only one still securely on his skates.

Will he win? Time will tell. What makes this election so unpredictable is that so many young Australians are yet to engage with what seems to them a boring, irrelevant, repetitive slanging match. One suspects a lot of them will make up their minds only hours before they vote.

But Abbott has had a dream campaign, Gillard a nightmare. The media focus has been all on Labor, very little on the Coalition. What kind of government would it be? What kind of decisions would it make on the real issues we face, after having devoted so much energy to whipping up a confected issue on deficits and debt?

Yesterday, shadow treasurer Joe Hockey gave his answer while debating Wayne Swan at the National Press Club, setting out a five-point economic agenda for an Abbott government.

First, was the predictable "fix the mistakes made by Labor in the last three years". Hockey was disarmingly frank about the role of the planned debt reduction taskforce. "We'll be focusing in particular on identifying if Labor has not told us the truth about their programs," he said.

That suggests the real role of the taskforce is not debt reduction but the usual witch-hunt to try to find anything the new government can use to discredit the old.

After all those pledges to return the budget to surplus quicker than Labor, the Coalition now plans to arrive there at the same time, in 2012-13. And on its own costings the great bulk of which it has yet to submit for costing by Treasury and the Finance Department it would save a net $2.8 billion over four years. That issue, rightly, has faded away.

Second was what Hockey called a productivity agenda, but was really about lifting workforce participation. He foreshadowed a big announcement ahead from Abbott on reforms to get people under 30 "off welfare and into work".

A good aim, and one that's been a theme of Abbott's for many years. But there are good and bad ways of doing it. We'll wait and see.

Hockey also cited the Coalition's generous paid parental leave scheme as a move to lift workforce participation, along with one of the best policy initiatives of the campaign: its plan to pay employers a $3500 bonus for hiring unemployed older workers.

That's a long overdue move to challenge the HR managers' bias against hiring older workers a bias that must be overturned for Australia to cope with a rapidly ageing society. But will Abbott offer a similar bonus for employers hiring our 250,000 unemployed young workers?

And if it is to be real reform, giving taxpayers value for money, it should be paid for by removing the tax break of up to $500 for workers aged 55 and over. It's a useless handout: too small to influence anyone's decision to work or not, yet costing $1 billion a year.

Hockey's next two pledges were to improve the efficiency of our infrastructure by asking the Australian Competition and Consumer Commission to review the access regime for privately owned infrastructure, and by ensuring that future capital works (presumably major ones) must pass an upfront benefit/cost analysis. A pledge to publish the benefit/cost analysis of competing projects before decisions are made, that would be a welcome reform. If an Abbott government pledged to build those projects with the highest economic bang for buck rather than those with the highest political bang for buck it would be better still. I wouldn't hold my breath.

Finally, Hockey repeated his leader's commitment to revisit the Henry report over the next year and come up with a plan for further tax reform. That's a great aim but again, it all depends on how it's done. Will it be about cherry picking, giving us the electorally attractive bits and ignoring the rest?

Or will it be about giving us a fairer and more efficient tax structure, given Henry's repeated warnings that an ageing society will require more services and hence more tax, not less.

It is not encouraging that Abbott keeps claiming falsely that Labor has adopted only one of Ken Henry's recommendations. In fact, it has adopted at least six, three of which the Coalition is opposing: the mining tax, halving the tax rate on interest income, and introducing a standard deduction for work-related expenses. Labor has also increased tobacco tax, committed to cut company tax, and promised higher family benefit rates for older teens. It's not enough, but let's stick with the facts.

What matters now, as Ross Garnaut argued in his Hamer Oration last week, is to revive the impetus for real economic reform, which has died since John Howard's near-death experience with the GST. We need leadership that is not afraid to commit to changes that will ensure that resources are used where they will do most to lift our living standards, not the government's ratings.

I have one proposal. Abbott's pledge to retain Hockey as treasurer if he wins raises the question of what he will offer Malcolm Turnbull. I suggest he be given a cabinet-level post as minister for revenue in charge of tax reform. That could kickstart a new age of real reform.

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Swan for content, Hockey for style - Debate 2010

FORGET the leaders' debate: yesterday's Treasurers' debate was far better. It was articulate and feisty, with the ABC's Chris Ullmann as chairman doing a great job of getting them to engage and make sparks fly.

My initial verdict was that it was pretty even. But after the bout, Wayne Swan threw a low blow by trying to verbal Tony Abbott, quoting comments from a radio interview without the qualification Abbott put on them. On that basis, I'd give it to Joe Hockey.

Swan had the edge on content, but Hockey won the points on style. Wayne was once a boyo, but these days he's the class swot: controlled, unfunny, relentlessly on message. Joe was trying to look as serious and Treasurer-like as he could, but he's really the fun kid of the class: affable, full of laughs, with what Dr Johnson once called "a bottom of good sense".

They had a good debate. Both made strong cases: Swan on Labor's term in office, Hockey on the Coalition's agenda.

Both also swung several fouls, and feigned ignorance on some key inconvenient issues, such as the role of tax breaks in making home ownership unaffordable for the young.

Swan won clearly on Labor's record. He repeatedly pulled Hockey up for pretending that the debt and deficits were due to Labor being in power, when clearly they were the result of a global recession.

Hockey ultimately conceded that had the Coalition been in office during the crisis, it too would have had to run deficits, although, he said, smaller than Labor's. Glad we got that clear.

Treasury figures suggest that in the four years of deficits, the revenue collapse and Labor's stimulus decisions contributed equally to the blowout. But then, without those handouts propping up retailing, construction, the finance sector and car manufacturing, the collapse of revenue and jobs would have been much worse.

Hockey won clearly in spelling out an Abbott government's economic agenda. Ironically, when Swan keeps attacking the Coalition for not having an economic agenda, his only plan for tax reform was to keep cutting company tax.

But Swan scored again by highlighting the Coalition's failure to submit more than a tiny fraction of its proposed new spending and tax cuts for costing by the Finance Department and Treasury.

Hockey insisted they would be submitted before the deadline, but as of last night the Coalition had still submitted just $288 million of almost $40 billion in new spending and tax cuts for costing.

On the Coalition's own estimate, he said, it now had net savings of $2.8 billion over four years. That's a cut of 0.2 per cent in the $1.4 trillion of planned spending in that time. Wow.

But Joe, if you're that confident of your figures, would you mind letting the boys at Treasury and Finance look at them? Just for a week or so? That might reassure the rest of us.

But Swan fouled out when he accused the Coalition of opposing all the stimulus spending. Not so, said Hockey: we supported the first tranche, and would have passed the second if you'd negotiated with us to make it smaller.

"We've never disputed the stimulus," he said. "What we've disputed is how much you spent, and the way you spent it." But then Hockey too fouled out, claiming repeatedly that the stimulus had pushed up interest rates and squeezed out business borrowers. That is true only if you concede that the stimulus is responsible for Australia's relatively good economic growth because as Reserve Bank governor Glenn Stevens keeps explaining, that's what drives up interest rates. The Libs can't have it both ways.

Both fighters came out with their heads high.

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Cocky Coalition has costed just 1% of promises

BETWEEN them, Tony Abbott and Nationals leader Warren Truss announced three new measures at yesterday's Coalition policy launch. But none of them were costed, and one was not even fleshed out.

It's a measure of the Coalition's confidence that it no longer feels obliged to spell out what its policies will cost, or how they will be funded. Its campaign is going like a dream; everyone's focus is on Labor divisions. Why rock the boat?

With four days left before the deadline for submitting policies for costing, the Coalition's running tally of new spending measures and tax cuts is almost $40 billion.

Yet just six measures totalling $288 million less than 1 per cent of that have been sent for costing.

Its three initiatives yesterday had no costing at all. They included:

relaxing the work test for rural students to receive the youth allowance, which Labor costed at up to $270 million over four years.

a breathtaking yet unspecified proposal to offer guaranteed jobs to "young indigenous people and others trapped in intergenerational poverty" if they give up their rights to welfare payments.

the offer to reimburse householders for inspections and if necessary, removal of Pink Batts installed under Labor's home insulation program. Opposition environment spokesman Greg Hunt said this could be funded within the existing program. Well, with respect, that depends how many people use it, and how many Pink Batts need to be removed.

Meanwhile, Treasurer Wayne Swan announced:

the cost of a passport will be increased by $18 from January 1, from $208 to $226, and be indexed annually thereafter for inflation (raising $193 million over the next four years)

the Tax Office will get more resources to pursue tax fraud, especially by businessmen setting up 'phoenix' companies letting one business die with unpaid debts, then starting up a new one.

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Greens call for renewable energy funds boost

THE Greens are proposing that the federal government almost quadruple support for large-scale solar, geothermal and other forms of renewable energy by guaranteeing up to $5 billion of loans to new power stations.

Greens deputy leader Christine Milne said the existing program for $1.75 billion of renewable energy grants was too small to spark the full use of Australia's potential resources of "sun, wind, ocean, earth, and human ingenuity".

"If we are to make that a reality, we need a well-designed suite of policies to get us there a strategic plan, an ambitious renewable energy target, a feed-in tariff, a grants program and a loan guarantees scheme," Senator Milne said.

With banks' appetite for risky investments dried up by the global financial crisis, she said, "loan guarantees are essential to help renewable energy developers access the finance they need to build baseload power stations".

Senator Milne said a program of government guarantees to underwrite solar, geothermal and tidal power stations could trigger at least $8 billion in new investment.

She attacked Labor for ripping $370 million out of its renewable energy program to pay for its much-ridiculed cash-for-clunkers scheme. Coalition finance spokesman Andrew Robb has pledged to match Labor in cutting renewable energy funding. Labor's former climate change adviser, Ross Garnaut, warned last week that Australia must accelerate its investment in renewable energy research and development to bring on the development of new low-cost, low-emission technologies.

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Labor revives Aboriginal preamble vow

LABOR has pledged to invite the Coalition to join in a bipartisan initiative to rewrite the preamble to the constitution to recognise indigenous Australians.

Opposition Leader Tony Abbott reached out to indigenous Australians in another way in his policy speech, floating the idea of offering guaranteed jobs to young Aborigines and Torres Strait islanders if they gave up their rights to welfare payments.

But no details were released, and it was unclear what form this might take.

Former prime minister Kevin Rudd promised in 2007 that Labor would rewrite the preamble to recognise the first Australians, then hold a referendum to seek public approval for the change.

But while the idea won support from former prime minister John Howard and Mr Abbott, nothing was done in Labor's term, a fact sharply criticised by Aboriginal leaders.

Minister for Indigenous Affairs Jenny Macklin and Attorney-General Robert McClelland yesterday responded by proposing to invite the Coalition to join it in setting up an expert panel to work out how best to implement the pledge.

They said the panel would include indigenous leaders, MPs and constitutional lawyers, and be asked to come up with "options on the form of the amendment, and guidance on the information needed for public discussion".

"We are optimistic that this reform can happen," Ms Macklin said in Nhulunbuy.

"We are hopeful that this is an issue that can unite Australians and be above partisan political interests."

She also said Labor would give $20 million to support remote communities in implementing plans to reduce the supply of alcohol and drugs, and prevention programs to tackle alcohol, drug and substance abuse.

"This abuse can have a devastating impact on indigenous communities, leading to high levels of substance-fuelled violence," she said.

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Libs may win with fewer votes

THE Coalition is on track to reap big swings in the crucial states of NSW and Queensland, which would return it to power even if Labor won most votes, the Age/Nielsen poll reveals.

A state breakdown of three polls taken since the campaign began shows that while Labor averaged a 51-49 lead nationally, the biggest swings against it are in two states where it has two-thirds of its marginal seats.

If one assumes a uniform swing within each state, the Coalition is on track to win back government on Saturday week, with a small majority in its own right.

It would have a larger majority if Australians vote on August 21 as they have in the past two polls. Both found the Coalition with an election-winning lead, nationally and in two of the three largest states.

The three polls, which surveyed 4073 people between July 20 and August 5, found no swing to either side in Victoria. In this state, voters at this stage appear set to repeat the 2007 outcome.

But the polls reveal:

A 3 per cent swing to the Coalition in NSW, which on a uniform swing would give it seven gains: Robertson (where it needs a swing of just 0.1 per cent), Macquarie (0.3), Gilmore (0.4), Macarthur (0.5), the battle of the stars in Bennelong (1.4), the litmus seat of Eden-Monaro (2.3) and Page (2.4).

A swing of more than 4 per cent to the Coalition in Queensland, costing Labor up to nine seats: Herbert (0.0), Dickson (0.8), Longman (1.9), Flynn (2.2), Dawson (2.6), Forde (3.4) and possibly Leichhardt (4.1), Petrie (4.2) and Bonner (4.5).

A 2 per cent swing in Western Australia, which could give the Coalition two more seats: Swan (0.3) and Hasluck (0.9).

A 1 per cent swing in South Australia and the Northern Territory, which could see the Coalition take back the Darwin seat of Solomon (0.2).

Add that up, and the Coalition is heading for a small majority even if Labor regains some ground in the final fortnight of the campaign.

The three-poll average has Labor ahead by 54-46 in Victoria and 51-49 in NSW, and the Coalition ahead 54-46 in Queensland.

For SA and WA, a five-poll average shows Labor ahead 52-48 in SA and the Coalition up 55-45 in WA.

On the new boundaries, Labor holds 88 seats, the Coalition 59 and independents 3.

If Labor loses 13 seats, it loses its majority. If the Coalition gains 17 or more seats, it will have a majority.

Anything in between that would result in a hung parliament.

The Age/Nielsen poll results are broadly in line with those of other established pollsters, whose latest polls show a 50-50 outcome.

But because of the swings in NSW and Queensland, and because Labor has more voters cooped up in safe seats, a 50-50 vote is likely to see the Coalition win most of the seats.

The latest Westpoll, published in Saturday's West Australian, goes against the trend. On a much larger sample of WA voters, it reports a 2 per cent swing there to Labor.

All four online bookmakers Centrebet, Sportsbet, Sportingbet and Betfair still have Labor as favourite, but the Coalition's odds are shortening rapidly. On average, the online bookmakers yesterday were offering $1.625 for a winning $1 bet on Labor, and $2.34 on the Coalition having tightened from $1.54 and $2.54 respectively on Friday.


HOW THE STATES WOULD VOTE

AVERAGE OF PAST THREE AGE/NIELSEN POLLS

NSW Vic Qld WA* SA/NT* Australia

FIRST PREFERENCES

Labor 39 41 33 35 42 38

Coalition 43 40 45 51 42 43

Greens 12 15 12 10 10 13

Others 6 4 10 4 7 6

TWO-PARTY PREFERRED

Labor 51 54 46 45 52 51

Coalition 49 46 54 55 48 49

Swing to Coalition 3 0 4 2 1 2

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