Tuesday, November 30, 2010

Baillieu the hunter to become Baillieu the provider

THE Bracks/Brumby government has fallen after 11 years in office. The Kennett government fell after seven years. The Cain/Kirner governments lasted 11 years, taking over from the Hamer/Thompson governments, which ruled for almost 10 years. It's a consistent pattern.

The days when we had a natural party of government are over.

What is natural now is to stay in power for a decade or so, two or three terms, before being overwhelmed by the accumulation of frustrations, disappointments and anger by voters at this or that.

That's the central lesson of the unexpected electoral landslide that has swept Labor from office. On most tests, it was not a bad government. Victoria is widely seen by the rest of Australia as being one of the better-run states: pro-business, socially progressive, strong in education, a national leader in jobs creation and housing activity, and generally humming with growth.

But since Labor took power, Victoria's population has grown by almost a million, close to 20 per cent. For those living in Victoria, hospital wards became overloaded, trains overcrowded, roads clogged. Assault rates rose, for several reasons, and people felt less secure. The cost of electricity, gas and water soared, mostly for reasons unrelated to state government. Labor made some mistaken choices that proved expensive. And it developed a habit of being less than honest with Victorians, and trying to manipulate, hide and spin its way out of trouble rather than being upfront about problems. In the end, they all hurt.

Now it is Ted Baillieu's turn. Today he and his frontbench will be transformed from poachers to gamekeepers, from fanning voters' discontent with state government services to trying to dampen it, from making them think services are bad to making them think services are good.

When a train derails or an ambulance fails to arrive, when an emergency ward leaves patients waiting, or when power prices rise, it will now be his government in the firing line. It will be a challenging transformation.

But Baillieu has got there by meeting tough challenges. It is no mean feat to end five years in the unenviable job of Opposition Leader with the public approving of your performance and electing you to a landslide win. He has shown discipline and good sense in judging what issues to focus on, a progressive streak that defines him as a leader from the political centre, and a combination of careful planning and a willingness to take risks.

He will need all of that now. From today, he will confront the underlying reality that drove Saturday's result: the central problem facing any state government is that it simply does not have the resources to provide services at the level its citizens expect.

A government can get by for a while by blaming the inadequacies on its predecessors, and creating a sense that the problems are being tackled. But in the end, that gap between its funding sources and the expectations of the public will defeat it.

It's a global problem, but it's particularly severe in Australia because we insist that taxes be low and see public debt as an evil to be avoided.

All government services must be paid for by taxes or equivalent charges. All government infrastructure must be paid for by taxes, or by borrowings to be serviced and repaid by taxes. If you want low taxes, if you want low or no government debt, then you have to accept worse government services and infrastructure than you would if we paid our governments more.

Public private partnerships allow governments to avoid debt, but not liability; they too have to be paid for and serviced, either by taxpayers or consumers. If you want Victoria to have better schools, better public transport, better hospitals, Victoria's government has to invest more and ultimately, raise taxes and charges to deliver them.

Brumby as treasurer invested too little to improve services, focusing instead on debt reduction. As premier, to his credit, he changed tack, and embarked on a five-year plan to borrow about $25 billion and invest it in tackling Victoria's infrastructure backlog: new roads, schools, hospitals, public transport, water projects and so on. He lost office too soon to reap the benefit.

One of the challenges for Team Baillieu will be to decide whether it sustains investment at that level, or reduces it to avoid threatening Victoria's AAA rating. It will be criticised whichever it does. But it knows that simply changing the state's managers does not solve the problems they have campaigned on for a decade. They have to do things differently and in many areas, they will have to invest more, and spend more on maintenance to get rundown assets such as Melbourne and Victoria's rail systems into reliable working order.

It also needs to take care on what it commits to. In the campaign, it pledged

to investigate new rail lines to Tullamarine airport, Doncaster, and connecting Geelong, Ballarat and Bendigo. Yet it committed to build one new line: of all things, a $250 million rail link to Avalon Airport.

OK, as white elephants go, it's only a mid-sized one. But when there are so many urgent needs in public transport, why waste taxpayers' money on this one?

Shadow Treasurer Kim Wells declared during the campaign that a Coalition government would require all large new infrastructure projects to have their business case assessed by the Department of Treasury and Finance, with the assessment made public. That's an excellent idea, and one that would help protect a Baillieu government from its own desal disasters.

John Brumby can leave politics proud of what he achieved. Ted Baillieu can enter the great challenge of his career with quiet pride in what he has achieved to get there.

He will need all that self-discipline, understanding, wary intelligence and a streak of boldness.

Wish him luck.

Activist poised to control upper house with record low vote

JOURNALIST and shareholder activist Stephen Mayne could hold the balance of power in the new Legislative Council, with new counting showing he could block the Baillieu government from having a majority in both houses.

When counting ended last night, Mr Mayne was on track to set a new Victorian record by winning a seat in Parliament with just 1.04 per cent of the vote.

The founder and former publisher of online newspaper www.crikey.com.au, Mr Mayne stood as an independent in the Northern Metro electorate the latest in many tilts at company boards, federal and state Parliament, and even Manningham council (his only success).

So far he has won just 3064 of the 295,831 votes cast in Northern Metro, which runs from Flinders Street station to the Great Divide.

But an astonishing series of preference deals could see him climb into the upper house on the back of preferences from another independent, the Greens, Family First, the DLP, the Sex Party and Labor.

With only 69 per cent of votes counted, he still could be upended if the Greens' vote continues its rise in late counting. Greens de facto leader Greg Barber has a quota in his own right, with 17.9 per cent of the vote.

If that lifts to 18.2 per cent, Mr Milne would lose out to the Greens' second candidate, and the Liberals or Labor would take the seat.

A second maverick candidate also has a narrow lead in upper house counting, but it is fast dwindling.

Shepparton hunting shop owner Steve Threlfall, of the Country Alliance, still leads in the race for the last seat in northern Victoria. But Liberals MLC Donna Petrovich is catching up, and likely to hold her seat.

If she does, the Coalition would probably have 20 seats in the new 40-member council. Labor looks like winning 17, with two Greens and Mr Mayne sharing the balance of power.

If so, a Baillieu government is likely to look to him to provide it with crucial support. Mr Mayne was press secretary to former Treasurer Alan Stockdale in the early years of the Kennett government, before having a spectacular falling out with Mr Kennett over the explosion of gambling in the state. His many causes include greater transparency in government, reducing gambling and reducing government debt.

In Western Metro, Greens MLC Colleen Hartland lost ground yesterday, and now looks likely to be the loser in a three-way contest for two seats against upper house president Bob Smith (Labor) and Andrew Elsbury (Liberal).

Hundreds of thousands of votes were counted yesterday in lower house electorates mostly for the Coalition but without changing the status of any seats.

Ballarat East is now the closest contest, with Labor MP Geoff Howard holding off Liberal challenger Ben Taylor by just 166 votes or 0.26 per cent.

In Bentleigh, Liberal candidate Elizabeth Miller has extended her lead over Labor MP Rob Hudson to 460 votes, and has clearly won the seat. But in Macedon, Labor MP Joanne Duncan appears set to withstand the tide, maintaining a decisive lead of 498 votes.

In the only other seat in doubt, Labor MP Steve Herbert maintained a lead in 245 votes in Eltham, and appears likely to hold on.

If Labor holds both Eltham and Ballarat East, it will have 43 seats in the new 88-member Assembly, and the Coalition 45.


Monday, November 29, 2010

Victoria's landslide could give Coalition both houses

THE Coalition last night was on the verge of pulling off an improbable quinella not only winning government, but winning control of both houses of Parliament.

The electoral landslide that swept across Victoria could give the Liberals and Nationals up to four new seats in the 40-member Legislative Council, mostly at Labor's expense. Only one seat has clearly changed hands.

As expected, the Liberals won a third seat in their heartland of Southern Metro, with Georgie Crozier unseating Labor's Jennifer Huppert.

But Coalition candidates were also well placed to pick up three other seats, although final results could be weeks away. The Coalition needs to win all three to give it a majority of 21 seats in the new upper house. But if its vote climbs slightly as pre-poll, postal and absentee votes are counted, it could do just that.

Labor took a battering, with the party at risk of losing four of its 19 seats in the upper house. The Greens failed to make any gains, and have an outside chance of losing Western Metro MLC Colleen Hartland.

The DLP lost its sole representative, Western Victoria MLC Peter Kavanagh, who polled just 2.6 per cent to come last this time.

But as we have seen so often before, bizarre preference deals could land several other unlikely politicians in the red velvet chamber.

Journalist Stephen Mayne, an insatiable candidate for parliaments and company boardrooms, might just pull it off this time, despite winning only 1 per cent of the vote in Northern Metro.

On Saturday night's figures, Mr Mayne would take the final seat thanks to preferences from everyone from the Greens to Family First, the DLP, the Sex Party, and ultimately Labor.

But it would take only a small change in late voting to tip him out early, with the Liberals' Craig Ondarchie more likely to claim the seat from Labor's Nathan Murphy.

The fishing and shooting party, the Country Alliance, could cause an upset in any of the three regions outside Melbourne, although on last night's counting it was more likely to lose the lot. Despite averaging just 4.5 per cent of the regional vote, preference deals will see it fight out the last seat with Labor in Eastern Victoria, the Liberals in Northern Victoria, and the Nationals in Western Victoria.

Legislative Council president Bob Smith is likely to lose out in a three-way fight for the last two seats in Western Metro, with the Liberals and Greens edging him out. The most likely outcome is: Liberals 18, Nationals 3, Labor 16, Greens 3.




After two unsuccessful attempts trying to win Northcote, the small business owner tried his hand in the mortgage belt and returned a formerjewel to the Liberal crown.


Stensholts 11 years in Parliament is essentially the story of Labors reign. He won Jeff Kennetts seat of Burwood at a byelection after the former premier resigned in 1999 and suffered a massive 9.5 per cent swing at Saturdays election.



After falling agonisingly close in his first attempt to unseat Labor from the eastern suburbs seat in 2006, the accountant has added Forest Hill to the swath of electorates now painted Liberal blue on the electoral map.


The loss of the marginal seat leaves just one celebrity Labor sports star in Parliament former footballer Justin Madden. Marshall, a former Olympic skier, suffered a cost of livingfuelled swing of around 3.8 per cent.



A former police senior constable, Battin was able to push the law and order button in the outerurban seat that takes in parts of Berwick and Pakenham. Gembrook goes to the Liberals for the first time since it was created in 2002 with a 7 per cent swing.


The outspoken Labor MP has frustrated her party with her stances on genetically modified crops and logging, but they hoped her strong local support would put the seat in the ALPs retain column.




The City of Casey councillor swaps her mayoral robes for a comfortable green leather lower house seat. With a swing of over 5 per cent, Wreford looks to have claimed almost 47 per cent of the primary vote.


With Mordialloc another of the mortgage belt seats, cost of living issues like stamp duty and utilities bills ended-up costing Munt. The parliamentary secretary loses the seat she held since 2002.




It was a case of second time lucky for the lawyer, businessman and former deputy lord mayor Newton-Brown. In 2006, he won the primary vote but couldnt win the seat. This time around, he collected both.


The lawyer and Brumby government cabinet secretary came in with the Bracks-slide of 2002 that decimated the Liberals. On Saturday, he suffered a likely swing of 8.3 per cent swing and couldnt hold the Labor line.



The 43-year-old former journalist becomes a Nationals hero for being the man who finally sandblasted off the barnacle that was Craig Ingram to the country party.


There was a symmetry to Ingrams departure. In 1999, he was one of the independents who delivered Steve Bracks power. One Saturday he went out with the Labor tide.



The current deputy ayor of Kingston has been given a political promotion by bayside residents. Bauer did it easily smashing the ALP with a huge 10.3 per cent swing to her she only needed to secure 6.8 per cent.


The 33rd speaker of the house first won Carrum in the 1999 landslide that ousted Jeff Kennett from Spring Street. Eleven years later she is on the wrong side of the political avalanche.



In his first attempt to win the crucial bayside seat, Shaw succeeded in making up 3.3 per cent to topple Labor. Shaw is textbook Liberal, he runs a small financial planning business.


Former Steve Bracks electorate office staffer, Harkness was true-blue Labor. Born and raised in Frankston with a PhD in political science, he departs after two terms in Parliament.



Ryalls win is significant for Teds chance of being Premier. The bellwether seat has always, with one exception, been held by the government of the day and is part of the mortgage belt targeted heavily by the Coalitions campaign.


The Gaming Minister was always going to be a longshot Let to retain his seat when the Coalition gained Momentum. Robinson won Mitcham at a byelection in 1997, the first sign Kennetts regime was faltering. On Saturday he was defending just 2 per cent and in the end suffered a 5.3 per cent swing.



In 2006, Gidley fell agonisingly short of entering Victorian Parliament, going down by less than 250 votes. There was no question over the result this time with the former tax accountant steaming into Spring Street with a swing of 7.1 per cent.


The Minister for Womens Affairs was unable to defend Labors narrowest margin. Even with Greens preferences, they backed her because of her pro same-sex marriage stance, Ms Morand farewells Parliament after eight years.



In 1999, Seymour turned on Kennett. In 2010, Seymour turned on Brumby. It was a rocky road for the Libs with McLeish joining late after Mike Laker controversially quit his candidacy. McLeishs vote was boosted on the back of preferences from anti-North-South pipeline campaigner Jan Beer.


Like many of his ALP colleagues that have lost their seats, Hardman came to government in 1999 when voters turned on Kennett and now he has fallen victim to a similar fate.



Katos is another local councillor joining the ranks of state politics. The managing director of a fish supply company, has regained the seat that had been in Liberal hands for decades after eight years of ALP rule.


Parliamentary secretary for Environment, Water and Climate Change was meant to be one of a swag of regional Labor members to go. ALP managed to hold on Bendigo and Ballarat but could not stem the tide in South Barwon.


The landslide that no one saw coming

LABOR'S fortress had two walls to defend. On one front were the eight seats it has held since 1999 in Geelong, Ballarat, Bendigo, along with rural Ripon and semi-rural Macedon and Seymour. On the other were the wide arc of seats extending south of the Yarra, from the eastern foothills to the southern bayside sandbelt.

For 11 years as Treasurer and Premier, John Brumby has nursed with great care the regional seats that put Labor into power. In the campaign he seemed to be there every second day, announcing a new hospital here, a footy ground upgrade there, and a road duplication over yonder. And it worked.

Amid all the onslaught of what is likely to end up as a 7 per cent swing to the Coalition in two-party terms, Brumby's regional wall largely held. South Barwon crumbled away at one end, Seymour at the other, but the core of the structure remained intact.

But while Labor was defending on one wall, the Liberals were climbing over the other. Of Labor's 18 seats south of the Yarra, no fewer than 10 were taken by Ted Baillieu's men.

It was a mirror image of the 1999 poll that brought Labor to power. That day, Jeff Kennett was focussed on retaining his marginal seats south of the Yarra, and did so but was felled by Labor and the independents storming regional and rural ramparts.

Did Brumby fall because he turned his back on his urban ramparts to defend his regional wall? A week ago, few would have suspected that Labor would end up losing Carrum in a swing of 9.2 per cent. Bendigo East, Ballarat West and Bellarine were all seen as frontline seats, but not Bentleigh. No one tipped Eltham to end up as the state's tightest race.

In the real world, landslides are always unexpected. Until the final polls, few insiders saw this one coming. Its impact was felt virtually all over the state: of the 81 seats where reliable two-party results have been calculated, 71 recorded swings to the Coalition of at least 3 per cent, and the median swing was 6.6 per cent. That is likely to rise even higher as pre-poll votes are counted.

Geographically, it's hard to see much of a pattern. Neighbouring seats recorded very different results. John Brumby suffered a 10.4 per cent swing against him in Broadmeadows, his new neighbour Bronwyn Halfpenny dropped 9.8 per cent in Thomastown, yet her neighbour in Mill Park, Lily D'Ambrosio, felt hardly a tremor, losing just 0.6 per cent.

In Bendigo East, the Minister for Skills and all that, Jacinta Allen, held on easily against a swing of just 0.8 per cent, yet across the road in Swan Hill, Labor's vote plunged to just over 20 per cent, shedding a quarter of what support it had in the seat.

In city and country, after 11 years of rule, the grievances erupted almost everywhere. Even in the inner city seats made safe by Liberal preferences, Labor's primary vote fell by 8 per cent. The biggest eruption saw East Gippsland reject favourite son Craig Ingram in a 21.6 per cent swing.

The best thing for Labor in Saturday's defeat is that so many survived it. Of the 43 seats where it leads, 16 held on with margins of 1, 2 or 3 per cent. Of the Liberals' 45, only seven were that close. It could easily have been far more damaging.

Where it happened is simple: everywhere. Why it happened is another matter.


Sunday, November 28, 2010

Coalition on the verge of upper house control

THE Coalition is on the edge of an unexpected majority in both houses of state Parliament, with the landslide swing in yesterday's election seeing it gain up to four seats in the new Legislative Council.

On last night's counting, the Coalition appeared likely to just full short of winning the 21 seats needed to control the 40-member upper house, which is elected by proportional representation.

The final result might not be known for weeks, with several contests too close to call on the figures available last night.

But the big swing against Labor, coupled with the Greens' failure to match the numbers given them in the opinion polls, appears to have given the Liberals a majority of seats in at least four of Victoria's upper house regions.

The outcome could hang on the outcome in the final seat in Western Victoria, a vast region stretching from Melton to the South Australian border, and from Point Lonsdale to Mildura.

Grovedale farrier Miles Hodge, of the hunters' and shooters' party, the Country Alliance, appears poised to take the seat of DLP leader Peter Kavanagh, thanks to a swag of preference deals despite gaining just 2.9 per cent of the vote.

With tens of thousands of votes still to be counted, the Coalition's third candidate David O'Brien could still pick up enough votes to win the seat. Mr Kavanagh's 2.2 per cent of the vote looked too small to retain the seat he himself won in 2006 in the same way.

Mr Hodge had just 8000 votes last night, but a series of preference swaps with other parties looked likely to see him overhaul the Coalition and deny it a majority in the new council.

The Country Alliance could win a second seat in northern Victoria. Shepparton hunting and fishing shop owner Steve Threlfall was polling 7.6 per cent of the vote, and with the same preference deals, could unseat Labor MLC Kaye Darveniza.

But sex industry lobbyist Fiona Patten failed in her bid to put the Australian Sex Party in the upper house, polling just 3.5 per cent of the vote in the Northern Metro region.

The Liberals lifted their vote significantly, and with preferences from the DLP and other right-wing parties, looked likely to take the seat from Labor. Greens de facto leader Greg Barber was polling close to a quota in his own right, to give a 2-2-1 result in the big northern suburbs electorate, which runs from Flinders Street to Whittlesea.

The Greens polled just 11.2 per cent of votes acorss Victoria, only slightly higher than in 2006. At the close of counting last night, they appeared likely to pick only one seat, and that was from Labor.

For the upper house, Victoria is divided into eight regions electing five members each: roughly speaking, five metro seats and three for the rest of the state. To be elected, a candidate has to win just 16.7 per cent of the vote after preferences; the last seat is usually decided by preference deals.

In the old Council, Labor had 19 seats, the Coalition 17, the Greens three and the DLP one.

Labor appeared to have three seats and possibly another two. The Liberals took its second seat in the Southern Metro region, and its third seat in northern Metro. It was also at risk iof losing a seat in eastern Victoria to the Greens.

As in the assembly, the council results will be affected by the electoral commission's decision to put off counting the 550,000 pre-poll votes until next week. At the Federal election, the pre-poll votes came disproportionately from voters for the Coalition and the Greens.


Eastern suburbs swing it for Liberals

A LIBERAL tide yesterday swept across Melbourne's crucial eastern suburban marginal seats and the south-eastern sandbelt, taking at least five seats from Labor, with up to six more in the balance.

It was a very different election in the equally crucial regional city seats that Labor has ruled since 1999. South Barwon has fallen to the Liberals, but midway through the count, Labor was hanging on to the rest of its territory albeit marginally.

The Greens' challenge to Labor in the inner city appeared to have been sunk by the Liberals' decision to give preferences to Labor, with only the seat of Melbourne still an outside chance.

With roughly half the votes counted, the election outcome remained in the balance with a massive 550,000 postal votes and up to 400,000 postal and absentee votes still to be counted over the next two weeks.

These votes are likely to shift the figures posted last night in favour of the Coalition and Greens candidates, altering the two-party preferred vote by as much as a percentage point in their favour.

But on early trends, the Liberals might not need them. Needing to gain 13 seats to win, they already had seven clear victories and a chance in up to 20 others.

In the biggest swing of the night, Gippsland East independent Craig Ingram was crushed by a 20 per cent swing to Nationals' candidate Tim Bull. Mr Ingram had held the seat since 1999.

As predicted, the Liberals swept to victory in most of Labor's eastern suburban marginal seats. Mount Waverley, Gembrook, Forest Hill, Mitcham and Burwood had all clearly fallen with the count at the half-way mark, returning to the Liberal Party that had held them for most of their life.

Some had a particular significance for Labor. Mitcham was the first gain, won in 1997 in a by-election under John Brumby's leadership. Burwood was Jeff Kennett's old seat, won after he quit politics in the wake of his 1999 election loss. Forest Hill, won in 2002 by former ski champion Kirstie Marshall, marked the high watermark of Labor's support.

In the south, the Liberals had won Carrum and were leading in Prahran, Bentleigh and Frankston.

But Labor was still holding on to the crucial battlegrounds in Geelong, Ballarat and Bendigo, which have been the other pillar of their ability to hold government.

It won clear victories in both Bendigo seats, with Employment Minister Jacinta Allan holding on to Bendigo East with only a 2 per cent swing against her. Agriculture Minister Joe Helper was also retaining a narrow but secure lead in Ripon.

But Seymour the scene of the Black Saturday bushfires and the north-south pipeline appeared to have fallen to last-minute Liberal candidate Cindy McLeish.

Labor held a 22-seat majority in the old Assembly. In 2006 it won 55 seats to the Coalition's 32, with Gippsland East independent Craig Ingram the lone cross-bencher.

It looks like no independent will be in the new Parliament. In Mildura, Nationals MP Peter Crisp held off a challenge from Mildura mayor Glenn Milne, and in Brunswick, former federal MP Phil Cleary won only 12 per cent of the vote.


Greens look likely to hold Victoria's balance of power

VICTORIA's new government will have to negotiate all its legislation through a hostile upper chamber, after early counting suggested the Greens will retain the balance of power in the new Legislative Council.

On early figures, neither Labor nor the Coalition looked likely to win the 21 seats needed to control the 40-member upper house, which is elected by proportional representation.

The final result might not be known for weeks, with several contests too close to call on the figures available last night.

But it was already clear that once again, any government legislation will need the support of at least two of three political forces Labor, Coalition and Greens to be passed by the Council and become law.

On early figures, the Greens were polling just 10.3 per cent of the Council votes, lower than expected, but they still looked likely to retain their three seats in the council and possibly add two more.

Several candidates from smaller parties were in contention to deliver upset results, including sex industry lobbyist Fiona Patten, who could win a seat in the Northern Metro region, despite polling just 3.6 per cent of the vote.

Labor, the Liberals and the Country Alliance are all directing preferences to Ms Patten, leader of the Australian Sex Party, in the big northern suburbs electorate, which extends from Flinders Street to Whittlesea.

The Liberals, however, were polling strongly with almost two quotas in their own right, and looked well placed to take the seat from Labor.

Greens de facto leader Greg Barber was polling a quota in his own right.

DLP leader Peter Kavanagh appeared to be another victim of the surge in Coalition support, with the Liberals on track to win three seats in Western Victoria and Labor two.

Mr Kavanagh's 2.2 per cent of the vote looked too small to retain the seat he won in 1006 with just 10,000 votes but 78,000 preferences from other parties.

In northern Victoria, hunting shop owner Steve Threlfall was poised to take another seat from Labor. Running for the hunters' and shooters' party, the Country Alliance, Mr Threlfall was polling 7.4 per cent of the vote, and stands to receive preferences from the Liberals and Nationals, Labor, the DLP and the Sex Party.

For the upper house, Victoria is divided into eight regions electing five members each: roughly speaking, five metro seats and three for the rest of the state. To be elected, a candidate has to win just 16.7 per cent of the vote after preferences and the last seat is usually decided by preference deals.

In the old Council, Labor had 19 seats, the Coalition 17, the Greens three and the DLP one.

Labor was in danger of losing up to four seats. The Liberals appeared likely to take its second seat in the Southern Metro region, and its third seat in northern Metro. On early counting, it was also at risk of losing seats in the western and south-eastern metro regions.

The Coalition looked set to retain all its seats, and win two more from Labor, giving it 19 of the 40 seats in the new council.

As in the assembly, the council results will be affected by the electoral commission's decision to put off counting the 550,000 pre-poll votes until next week. At the Federal election, the pre-poll votes came disproportionately from voters for the Coalition and the Greens.


Saturday, November 27, 2010

The city swings, the sexes splinter and the country digs in

IF THE numbers in today's Age/Nielsen poll are reflected in the tally room tonight, Victoria is headed for a change of government a change hardly anyone expected when the campaign began.

The poll implies a two-party swing to the Coalition of about 6.5 per cent. Technically, the Coalition needs a uniform swing of 6.6 per cent to win, but swings are never uniform. If it gets 52 per cent of the two-party vote, the seats will come somewhere. All the polls show a late swing to the Coalition. The Galaxy poll, taken early in the week, reported the two sides as 50-50. The Morgan poll, taken through the week, called it as 51-49 for the Coalition. And our poll, taken on Wednesday and Thursday, found it 52-48 to the Coalition.

The big question is: is this the trend it appears to be, with a late swing sweeping Team Baillieu to victory? Or is it rather that the luck of the draw means the 1533 voters in our survey were not a perfect sample of the voters of Victoria?

We'll know tonight. Nielsen pollster John Stirton points out that even his poll, the largest of the three, has a margin of error of 2.5 per cent.

Over the years, I've found the most reliable guide is the average of all the polls taken through the campaign. That won't be true if there is a late swing, but it usually works.

This time the three-poll Nielsen average shows voters split 50-50. That implies a swing to the Coalition of 4 to 4.5 per cent.

Given the resources Labor has put into sandbagging its marginal seats, that probably wouldn't be enough for the Coalition to win. Labor would lose seats, but get back with a narrow majority.

Yet it will be touch and go. The poll shows there are voters out there waiting with baseball bats to give the Brumby government a belting. We just don't know whether there are enough of them to belt it out of office.

Our polls reveal that most of them are men. Most of them are in Melbourne. And most of them are over 40, with the latest poll showing the Coalition ahead in the key demographic of people aged 40 to 54.

This is the generation of parents with mortgages, kids to educate and bills to pay. In Victoria, it usually votes Labor. But in the three Nielsen polls, it did so by just 51-49, with a 6 per cent swing to the Coalition.

The 55-and-overs as a group usually vote for the Coalition, but this time it's by an overwhelming 58-42 margin, also a 6 per cent swing.

By contrast, the only shift among voters under 40 has been from Labor to the Greens. The three polls found 22 per cent of them plan to vote for the Greens, with most of them then going to Labor, giving it a two-party vote of 57-43, a swing of just 1 per cent. As in the federal election, there is a widening gender gap. In 2006, men and women voted as one to re-elect Steve Bracks. But in 2010, our poll average shows men going to the Coalition by 52-48, while women favour Labor by 53-47.

Men have swung to the Coalition by 7 per cent, women by just 2 per cent. Let's hope no relationships break up over it. And the swing is strongest in Melbourne. At the federal election, Labor won almost 60 per cent of the city's two-party vote. But now it is heading for just 52 per cent, a 5 per cent swing from 2006.

In regional Victoria, Labor trails the Coalition by 46 per cent to 54, but the swing has been just 2 per cent. And that could decide the outcome tonight.

Forget the inner suburbs: the battlegrounds that will decide who wins government today are the marginal seats of eastern and southern Melbourne, and the regional centres of Geelong, Ballarat and Bendigo.

On the poll figures, the Liberals will pick up a swag of marginals in the south and east: Mount Waverley (0.4), Gembrook (0.8), Forest Hill (0.8), Mitcham (2.0), Frankston (3.3), Mordialloc (3.6), Prahran (3.6) and Burwood (3.8) are all at risk.

But to win government, the Liberals need to win virtually all of them, plus some of Bentleigh (6.4), Monbulk (6.7) and Carrum (6.8), or the northern seats of Eltham (6.5) and Yan Yean (8.0) and the urban fringe seats of Seymour (6.7) and Macedon (8.2). They will need to pull in some of these because, if the poll is right, Labor will hold most of its eight seats in Geelong, Ballarat and Bendigo. South Barwon (2.3) is likely to fall, but the Liberals might struggle to win the tough asks: Bendigo East (5.4), Ballarat West (6.6), Ballarat East (6.7) or Bellarine (8.0).

But it's anyone's guess. The Liberals could cause a surprise by taking one of the seats in the outer south-east, like Narre Warren North (9.3). Labor could score an upset win in a Coalition marginal such as Kilsyth (0.4), Hastings (1.0) or Morwell (2.2). An independent candidate could bolt home in Brunswick or Mildura. And the Greens could win a seat or two even without Liberal preferences.

My tip? Labor back, with a majority of two.




0.4 Mount


0.8 Gembrook

0.8 Forest Hill

2.0 Mitcham

3.3 Frankston

3.6 Mordialloc

3.6 Prahran

3.8 Burwood

6.4 Bentleigh

6.7 Monbulk

6.8 Carrum

9.3 Narre




6.5 Eltham

6.7 Seymour

8.0 Yan Yean

8.2 Macedon

10.5 Ivanhoe


2.3 South Barwon

4.4 Ripon

5.4 Bendigo East

6.6 Ballarat West

6.7 Ballarat East

8.0 Bellarine

8.4 Geelong

10.6 Bendigo West


2.1 Melbourne

3.7 Brunswick

3.7 Richmond

8.6 Northcote


6.1 Mildura (Nats)

8.5 Gippsland East (Ind)


TV: ABC from 6.30 pm RADIO: 3AW 693 from 6 pm. 774 ABC from 6.30 pm.

LIVE: Tally Room is open to the public at Etihad Stadium, gate 9.

INTERNET: 131vec.com.au

PRINT: Results, news and analysis in the Sunday Age.


Friday, November 26, 2010

Greens likely to hold upper house balance of power;

WHATEVER the fate of the Greens hopefuls in the four inner Melbourne seats in tomorrow's election, one thing looks almost certain: the Greens will hold the balance of power in the new upper house, whoever wins government.

At the federal election, the Greens won 14.6 per cent of the Senate vote in Victoria, with 471,000 first preferences. The opinion polls suggest that they are heading for a similar vote at the state election.

If so, they are odds-on to win five seats in the new 40-member Legislative Council, with neither Labor nor the Coalition winning enough seats to control the chamber. This would mean that any legislation in the new Parliament would require support from two of the three sides to get through the Legislative Council.

In the old council, Labor had 19 members, the Coalition 17, the Greens three and the DLP one the seat of Western Victoria, where its leader, Peter Kavanagh, won the final seat with just 2.6 per cent of the vote.

There is a chance that similar results could happen this time. For the council, Victoria is divided into eight electorates choosing five members each in a Senate-type election. To win a seat, a candidate needs just 16.7 per cent of the vote and the result can depend on the order in which candidates with small votes are eliminated.

In Western Victoria in 2006, Labor preferences ended up giving the seat to the DLP. But this time Labor is directing its preferences to Greens candidate Marcus Ward, who looks odds-on to take Mr Kavanagh's seat.

In both Northern Victoria and Eastern Victoria, the five seats are likely to divide 3-2 between the Coalition and Labor, as in 2006. But this time Labor, the Coalition, the Sex Party and the DLP are all directing preferences to the hunters and fishers of the Country Alliance. If it can win enough first preferences, it could take the Coalition's third seat in both.

In Melbourne, at least two seats appear likely to change hands, with Northern Melbourne an outside chance of seeing an upset.

The Liberal heartland of Southern Metropolitan last time saw a cliffhanger, with the ALP's Evan Thornley winning the last seat from the Liberals by just 1500 votes. But Labor will probably lose the seat this time, with the Coalition taking three and Labor and the Greens one each.

But the Coalition is likely to lose a seat to the Greens in Eastern Metro, while in Northern Metro Labor's third seat could go any of five ways.

In the most bizarre preference deal of the campaign, the Liberals, Labor and the Country Alliance are all directing preferences to Sex Party leader Fiona Patten. Journalist Stephen Mayne, an independent, has a chance, as does the DLP's John Kavanagh, brother of Peter. If none of them scores enough votes to matter, it will come down to Liberals versus Labor, with Greens de facto leader Greg Barber set to hold his seat and the balance of power.


Who might win seats on Saturday



Eastern 2 2 1 *Liberal v GREENS

Northern 3 1 1 *LABOR v Libs/Sex/Mayne

South-East 3 2 - *LABOR v Greens

Southern 1 3 1 *Labor v LIBERAL

Western 3 1 1 *LABOR v Libs/Greens


Eastern 2 3 - *LIB/NATS v Greens

Northern 2 3 - *LIB/NATS v Country Alliance

Western 2 2 1 *DLP v GREENS/Ctry Alliance

Total 18 (-1) 17 (-) 5 (+2)



Jump in Voictoria's jail population

VICTORIA is leading the nation in yet another area: it provided virtually the entire growth in Australia's prison population in the year to September.

As law and order became a key theme of the election campaign, the number of Victorians behind bars grew by 169 or 3.8 per cent in the year while in the rest of Australia, the number of prisoners grew by just four, or 0.02 per cent.

Victoria still had the lowest rate of imprisonment of any state, with 0.11 per cent of its adult population locked up, compared with a national average of 0.17 per cent, peaking at 0.66 per cent in the Northern Territory.

All told, 28,843 Australians were in jail on an average day in the September quarter, with 4578 of them in Victorian jails.

The most startling figure is that 7467 prisoners, or 26 per cent, are Aborigines who comprise roughly 2 per cent of the adult population.

The Bureau of Statistics estimates that 2.3 per cent of all Aboriginal adults were in jail in the September quarter: 4.2 per cent of all Aboriginal men in the nation, and 0.4 per cent of all Aboriginal women.

Western Australia has the highest rate of incarceration, with 7.3 per cent of its Aboriginal men in prison, and 0.8 per cent of Aboriginal women.

In Victoria, 2.4 per cent of Aboriginal men were behind bars in September, and 0.2 per cent of women. Aborigines made up a fifth of the growth in the state's prison population over the year.


Similarity at a price as rivals say surplus largely untouched

THE striking thing about the costings by Labor and the Coalition of their election promises is that with three exceptions they look so similar.

The Coalition plans a net $3.644 billion over five years in new recurrent spending, paid for by taking $3.794 billion from contingency and other funds. That would leave it with $150 million to spare.

Labor would spend a net $4.096 billion, paid for by taking $3.996 billion from contingency and other funds. That would trim $100 million over five years from budget surpluses.

Whoever is in government will be spending about $250 billion over those five years. On these costings, Labor plans to spend 0.1 per cent more than the Coalition. It's a virtual dead heat.

Difficult as it is to believe after the big spending plans of the past month, each says it has left the budget surplus more or less untouched: $800 million or so a year.

How? Many Coalition plans its $1 billion in funds for health infrastructure and regional growth, its 800 new hospital beds and 40 new trains are for eight or 10 years, not the next four. Other plans are back-ended, so that their full cost hits only in 2014. Most of the 500 prison cells promised in its law and order policy, for example, would not operate until 2014.

Both parties raid the hollow log of the contingency funds: on these figures, Labor has emptied out the log in which money was stored for future capital spending.

With the budget's wage and growth assumptions already precarious such as assuming wage rises of 2.5 per cent a year half the contingency funds have gone.

But there are three main differences:

Labor has pledged $3.9 billion of new infrastructure spending, the Coalition just $2.4 billion.

The difference is in schools. Labor would spend $1.8 billion to build 20 new schools in growth areas, renovate 90 others, and build technical education centres and classrooms. The Coalition would spend just $258 million, mostly for small works in marginal seats.

The difference may be more apparent than real. A Coalition government, too, would have to build new schools and fix old ones. There is still money in the log if it wanted to do so. But so far, it has not.

Labor plans to cut $600 million over the next five years through back-office economy measures, while the Coalition plans $1.569 billion of such savings. Its big saving plan is to cut departments' purchasing by 1 per cent.

John Brumby says this would mean cuts in public service jobs. No, it wouldn't. It's not costless, but it's a sensible way to save money.

The two costings come with very different imprimaturs. Labor as government had the advantage of having its policies costed by Treasury. The Coalition went just up the road to a small accounting firm, Yates Partners, not known as experienced policy costers. Its accountant, John Yates, ticked off the costings "based on the information, documentation, supporting assumptions and methodology provided to us by the Coalition".

That's an important qualification, but unavoidable under this system.

We need a better model. The Coalition's proposal for an independent Parliamentary Budget Office under the Auditor-General wins hands down.

Tuesday, November 23, 2010

Victoria's ballot box oveflowing with choice

AFTER the sheer awfulness of the federal election campaign, Victoria's campaign has been a breath of fresh air that almost restores your faith in politics. Two decent, intelligent and capable leaders. Policies that address real rather than image problems. Mostly positive messages rather than negative ones. We could almost be living in a different time.

I suspect that a lot of readers will instantly disagree. Our last Nielsen poll found only 53 per cent approved of John Brumby's performance as Premier, and 45 per cent approved of Ted Baillieu as Opposition Leader. Fellow columnist Shaun Carney (20/11) and I are in a small minority who are impressed by both. Let me explain why.

State government is about providing services, and the demands on it come from every quarter. Collectively, our expectations are unrealistic: we demand more services, better infrastructure, lower taxes and a budget surplus. And we just can't have all of that.

Australia is a high-wage, low-tax country. That means infrastructure projects are scarce and expensive. We don't tolerate governments going deep into debt as they did when most of our infrastructure was built. Public-private partnerships to provide infrastructure sometimes work well, sometimes don't.

It is difficult, verging on impossible, for any government in this political culture to provide us consistently with First World infrastructure. Yet if it doesn't, we don't forgive it.

Services are squeezed constantly to provide savings to finance new spending. Departments are asked to do more with less real resources. Maintenance work is put off; overworked staff leave for better jobs elsewhere; and governments face 10,000 urgent needs but can afford to fund only 1000.

The Brumby government's failures are well known. Myki was a fiasco. The desalination plant is a very expensive solution to the water shortage when cheaper options were on offer. Spending on hospitals has soared, yet demand and costs rose even more. And Labor has refused to run an open government.

Its strengths are less obvious. We remember projects that run over cost or over time. We forget those that are delivered early and at lower cost. Who remembers now that the channel deepening project was completed a month early, and $248 million under budget?

Compared with the policy paralysis of federal Labor, Brumby impresses me with his willingness to engage with alternative views, change his mind, make bold decisions, and get things done.

Initially, Labor was slow to respond to the drought, the implications of rapid population growth, and the dramatic shift back to public transport. But it has shifted tack dramatically, taking on debt to finance record levels of infrastructure spending to catch up the backlog. We may not like the debt, but we need the infrastructure.

It's 11 years since the Coalition was in office, and that means Baillieu's team must be taken on trust. But I don't see any reason to distrust them. Like all oppositions, they are not so much lazy as under-resourced. Baillieu is not the most natural politician, but is an intelligent, disciplined, tolerant and progressive leader who represents the broad church of the Liberal Party rather than the fundamentalist right.

He has led the way in important areas: advocating free kindergartens, tackling problem gambling, establishing an anti-corruption commission, cleaning up government advertising, restoring authority to principals in government schools, and tackling Victoria's high construction costs. These are issues that matter across the board.

The Age profile of Baillieu (6/11) included an insightful comment by his long-time colleague Robert Peck, national president of the Association of Consulting Architects and a former Melbourne city councillor. Asked if Baillieu would make a good premier, Peck paused, then responded: "He would make an excellent leader provided there is sufficient policy and team back-up in the cabinet and in the party."

I can't judge the quality of Baillieu's team. But, as with Labor, I have concerns about some of his policies, if not insuperable ones.

First, by last weekend the Liberals' website listed 244 policy announcements, nearly all involving new spending. Many were small, some big but long-term, and there was some duplication. But it is inescapable that the Coalition has pledged billions of dollars of new spending and far from clear that all of it can be afforded, even after its savings.

I don't buy Labor's line that the Coalition would drive Victoria into deficit. It is far more likely that if the money isn't there, a Baillieu government would junk some of the promises to keep the budget in surplus.

Second, the Coalition's planning policies imply that the solution for Melbourne's housing shortage is to keep widening the urban growth boundary. As the Victorian Council of Social Service points out, this year's widening alone released enough land to build more than 284,000 new homes. The problem is not the urban growth boundary, but the obstacles to redevelopment around the inner city, the activity centres and along rail and tram corridors. That's where prices are highest, and demand is most intense. Yet the Coalition's policy is virtually silent on this.

It has run an effective scare campaign on law and order, yet as The Sunday Age reports (21/11), crime rates have fallen almost 30 per cent in a decade. Victoria has always had fewer police than other states, and for one good reason: we have less crime.

But both sides have strengths and weaknesses. Labor has made a good case to be given a fourth term. The Coalition has made a good case for a change. Only you can judge.


Monday, November 22, 2010

Don't mention Victoria's deficit

JOHN Brumby must be really worried that election spending could end up sending Victoria into deficit. It's hard to see any other reason why he would risk losing office by offering such a small cut to his one big retail tax.

Ted Baillieu is not so constrained; maybe that should worry us more. The Coalition's spending promises are ambitious. Its pledge to cut stamp duty revenue by $750 million over four years must push it closer to, or even over, the line where, to keep the budget in surplus, it must decide which promises to break.

Labor's handout is highly targeted. First home buyers are at most 20 per cent of the market. Those buying outside Melbourne are at best 6 per cent. Even on Brumby's figures, those building new homes will average 4000 a year 2.5 per cent of all buyers.

The Coalition's cut is broader, but shallower. It will go to all first home buyers, whether in Melbourne or the regions, and whether they are building or just buying an existing home. It covers 20 per cent of buyers, but even at full strength from 2014, offering only half as much as Labor gives its smaller group.

Many economists will tell you this is bad policy. They argue that first home buyers bid whatever they can afford, so their tax cuts will just push up house prices, to no benefit. I respectfully disagree.

How can a handout to 20 per cent of home buyers change what the other 80 per cent would bid? Both policies would help cash-poor first home buyers compete with rental investors, who get tax breaks of $5 billion a year from Canberra.

One big strength of the Brumby government is that its own handouts to first home buyers are targeted to those building homes, so they add to housing supply rather than just demand. By contrast, Baillieu's cuts would add to demand only.

Labor's plan would push more building out of Melbourne into Geelong, Ballarat and Bendigo where it has eight marginal seats to defend. It would also add to the trend, as The Age reports today, for Melbourne's development to leapfrog the urban growth boundary into towns such as Bacchus Marsh, Gisborne and Wallan.

But surely first home buyers facing Melbourne prices need help as much as those further out. Labor's tax cuts would give back just 1 per cent of stamp duty revenue, the Coalition 5 per cent.

That is self-denying austerity. It suggests that the state's wallet must be almost empty.


Saturday, November 20, 2010

Melbourne's Growing Pains

ONE WEEK out from the Victorian election, Tim Colebatch reports on a city and state in the grip of a population boom that is squeezing infrastructure, services and affordability:

A NEW Melbourne is growing on the city's western fringe. And as Victorians head into next week's state election, in some ways it epitomises what has been an extraordinary decade in the state's history.

In 1993-94, after the Kennett government sacked 30,000 government employees, Victoria's population growth sank to as low as 12,680. Yet 15 years later, the population of a single municipality Wyndham, centred on Werribee grew by 10,758. Melbourne's growth in 2008-09, at first estimated at 93,478, now looks to have been closer to 100,000. And the latest estimate for Victoria's growth is 121,229.

No city in Australia has seen growth on the scale Melbourne has experienced in the past five years. In that time, the city's population has risen by 400,000 or more. And Victoria's population has grown by more than 500,000, or 10 per cent, twice as much as it did a decade earlier.

Since Labor was elected in 1999, the state's population has expanded by close to 20 per cent, from 4.7 million to 5.6 million. Is it any wonder that we are now seeing a state election campaign being fought largely on the failure of state government services to cope with surging demand?

The epicentre of Victoria's population growth is in Melbourne's outer-western suburbs. KPMG demographic guru Bernard Salt has declared it the fastest-growing region of Australia, outpacing even the Gold Coast. In 2008-09, for probably the first time since the 1800s, most of Melbourne's population growth occurred north and west of the Yarra.

But Salt highlights a crucial difference. The Gold Coast's population boom, he says, was based on lifestyle. "For Melbourne's west," he says, "this fundamental truth is affordability. But . . . affordability must be triangulated with job opportunities, and with quality-of-life issues that deliver social infrastructure such as schools, shops, a sense of community and public transport."

And that, so far, is a promise yet to be delivered.

Across the flat empty fields west of Laverton, you find Truganina. It is one of Melbourne's most affordable suburbs, and one of its fastest growing. Sudanese refugee Ayan Majok moved here in 2008 with her husband and five children. Last year fellow refugee Hawa Mahmoud and her husband and seven children moved in next door. Both women complain about the lack of services, which has turned the street into the children's playground.

"We don't have a park for the kids to go and play in," Majok says. "There's no school around here, no shops around here, no petrol station and now we have a bus, but not many services. If you don't have a car or the car breaks down, you have to walk 25 or 30 minutes to the shop."

But Truganina was cheap: the Ayan Majok bought a 500-square-metre block for $135,000, and look back on it now as a bargain. "Now the prices are up to $220,000, and the blocks are 400, 350-square-metres," she says. It's a good neighbourhood with "all kinds of people Aussies, Indians, Sri Lankans, Lebanese, Arabs".

The latest Melway map shows a park and school proposed for Truganina: it's just that the people got there first, and they're still waiting. Across Skeleton Creek in the slightly more upmarket suburb of Tarneit, resident activist Shawn Lynch notes drily: "It's always in catch-up mode here. The Baden Powell P-9 College was opened just three years ago, and they've already had to add portable classrooms because they didn't allow for population growth.

"The high school hasn't started yet. The kindergartens are full, and some people had to sign up for a kindergarten as far away as Little River."

And the lack of broadband access in many areas is a big problem. A recent study found Truganina has the slowest internet speeds in Melbourne.

Yet people keep coming, because Truganina remains cheap. The median house price was $325,000 in the September quarter, the Real Estate Institute of Victoria estimates, and around the corner from the Majok home, land and three-bedroom-unit packages are on sale from $295,000. People want their own home, and they have to buy where they can afford it.

And Truganina is just over 20 kilometres from the Bourke Street Mall: no further from the city than Mitcham, Glen Waverley and Beaumaris.

In this state election campaign, the issues and problems raised cover every area. For some, the issue is hospital waiting lists. Between 1999 and 2009, public hospital admissions rose more than 40 per cent, yet waiting lists have mostly kept growing. For others, the issue is public transport: in the past four years, Melburnians have made more than 100 million extra trips on trains, trams and buses, with train passengers alone soaring by 57.5 million, or 36 per cent. After years of little growth in passenger demand, a landmark change in Melbourne's culture has arrived suddenly, catching the government off guard, with overcrowding and late or cancelled services becoming widespread.

For some, the issue is traffic congestion, as population growth and rising affluence lead to hundreds of thousands more cars piling onto Melbourne roads.

For others again, it is street violence, and a sense of diminishing safety.

There are so many issues the $5.4 billion desalination plant, the pipeline to send Goulburn water to Melbourne, the state of schools, and thousands of local grievances that have built up over the 11 years of Labor's rule.

There's a common thread underlying much of this. Rapid population growth, particularly since 2005, has combined with other factors to put serious pressure on the state's services, and the government has struggled to respond quickly enough. That's its job, you might say, and when the population grows, taxes also rise. Victoria's revenue from all sources has more than doubled from $22 billion when Labor took power to $45 billion this financial year.

Yet most of that has come from the relentless growth of Commonwealth grants, as a revenue-swollen Canberra imposes its spending priorities on areas run by the revenue-deprived states. This year, almost half of Victoria's day-to-day spending will be funded by Canberra. But meeting rising demand also requires more capital spending, and the government's ability to do that is limited by a political culture that treats government debt as undesirable, and by a construction culture that has pushed building costs so high as to make urgently needed projects unaffordable.

But how did Victoria attract all that population growth? Let's go back a step.

FROM outside the state, Victoria looks quite different. In the rest of Australia particularly in New South Wales it is widely seen as a success story, a competently run state where things work. Until yesterday's surprising revisions to state growth figures, Victoria was ranked fairly consistently as the fastest-growing of the non-resource states. Thursday's report by the Business Council naming the Brumby government as Australia's most business-friendly government is in the latest of a range of commendations from business and economists.

Two crucial areas exemplify Victoria's strong performance. Over the past four years it has generated 278,000 new jobs, more than any other state, and 28 per cent of the nation's job growth. Full-time jobs have increased by 2.1 per cent a year, including the period of the global

financial crisis, and total employment by 2.6 per cent a year, both second only to booming Western Australia.

New home building has been spectacular: one in every three homes approved in Australia over the past two years has been in Victoria, 34 per cent of the nation's housing construction activity, rising to almost two in every five so far in 2010-11. In the past year, councils in Melbourne approved 44,194 new homes more than their counterparts in Sydney, Brisbane and Adelaide combined.

Construction has been one of the industries picking up the baton of growth as the high dollar and government indifference has meant the stagnation of Victoria's manufacturing industry since 2002. Another factor has been the foreign student market, with Melbourne the main magnet for overseas students, particularly from India. With Melbourne's image as Australia's coolest city, tourism has soared. Victoria has attracted 38 per cent of the growth in foreign tourists over the past decade. The financial sector, healthcare, the cafe culture, transport and distribution, wholesaling and retailing: Victoria has developed a diversified services economy which has helped it withstand the loss of almost 50,000 manufacturing jobs in the past 10 years.

And with the students came migrants. In the past three years net overseas migration into Victoria has doubled to 227,000, almost as many as in NSW. India and China were the biggest sources, but Victoria has also been the main settling ground for Malaysians, Sri Lankans and of course, the refugees from the Horn of Africa, who have now become a significant presence not only in western Melbourne, but also in cities such as Shepparton.

It is not only our people who are changing: so are our cities. In the past year, Victorian councils approved 19,900 new apartments and units, more than double the 8147 approved four years earlier. Most of them were in high-rise apartment blocks in Melbourne. In the metropolitan area, 18,083 of the record 44,194 new homes approved were apartments and units, roughly 10,000 of them high-rise.

It is a different Melbourne we're building. We're not just building out any more, we're building up. Expansion at the fringe is also booming, but two-thirds of the growth in home building in the past four years has been in apartments and units most of them in the inner-city, where prices have risen fastest, and demand is hottest.

Even before the apartment boom started, the tide had begun turning in. Between 2004 and 2009, a third of Melbourne's population growth took place within 15 kilometres of the Bourke Street Mall. The city centre, bayside, the leafy eastern suburbs, the affordable inner-west: people raced to buy the new apartments, units and townhouses that developers put up wherever they could get a permit.

Between 2001 and 2009, the populations of Brighton, Caulfield and Hawthorn all grew by 10 per cent, Footscray by 17 per cent, the inner-bayside suburbs by 19 per cent while the CBD, Docklands and Southbank population trebled. For the first time in decades, 1 per cent of Melburnians live in the centre of the city.

Yet populations are now growing almost everywhere. Between 2004 and 2009, excluding the area of the bushfires, only six of Victoria's 79 councils recorded falling populations, all in the Mallee and Wimmera. Geelong grew by 15,000, Ballarat 8250, Bendigo 8700, and even the Latrobe Valley added 5000. Virtually anywhere within a two-hour drive of Melbourne has been touched by the population boom, as have the larger cities and coastal areas beyond it.

But that is in the past. As we head into the election, Victoria's economic future is more clouded.

Foreign student numbers have plummeted thanks to the soaring dollar, the end of the backdoor working visa rorts, and the lasting impact of the violence against Indian students.

The Reserve Bank's interest rate rises are hitting manufacturers and exporters with a double-whammy of rising costs and rapidly shrinking returns. Treasury is pressing the federal government to end support for the car industry, which would shut down Melbourne's largest manufacturing sector. And construction activity is surely at its peak.

Another worry is housing prices. One crucial part of Victoria's success story has been its ability to offer affordable housing, compared with Sydney. But as its population has grown so strongly, housing investors have moved in to buy up Melbourne homes, helping drive prices to record levels. The Real Estate Institute of Victoria says the median price in the September quarter was $565,000. The zone of affordable housing has shrunk to suburbs such as Truganina, the outer suburbs with poor services and poor public transport. And while we are now building up the inner city, the building unions make it a high-cost activity, resulting in high-price apartments.

But Victoria's future is what Victorians make it. Melbourne's incredible rebirth from the ashes of the 1990-91 recession was the product of many creative people, each adding their bit, in their own way, to remake the old town as a wonderfully vibrant, alive city.

Whoever forms our next state government will have to nurture that, and foster new sources of growth to take over from those whose time is past.


Thursday, November 18, 2010

Not all of Victoria's seats created equal

EVERYONE'S vote will not be equal in the November 27 election. Figures show huge disparities in the enrolments for different seats, with some seats having almost two-thirds more voters than others.

The figures, released by the Victorian Electoral Commission, show enrolments in each seat vary from 54,134 in the outer suburban seat of Yan Yean to just 33,073 in Swan Hill.

Of the 88 seats in the Legislative Assembly, 28 are now either more than 10 per cent above the enrolment quota or more than 10 per cent below it.

The victims are overwhelmingly outer-suburban voters, who will be under-represented in the new Parliament. On the numbers, they should have least two more seats: one in the outer western suburbs, and one in the outer south-east.

The beneficiaries are voters in the middle eastern suburbs, middle south-eastern suburbs, and the rural seats inland. Each group has roughly one seat more than its numbers merit.

The disparity has developed because a loophole in the wording of the Constitution means Victoria has now gone for three elections using the same boundaries, rather than redrawing them after every second election, as intended.

The under-representation of the outer suburbs will slightly disadvantage Labor. It holds nine of the 10 most-oversized seats, including the three biggest: Yan Yean, Keilor (52,853 voters) and Narre Warren South (52,340) all fairly safe.

Labor also holds six of the 10 most-undersized seats, mainly in south-eastern suburbs such as Clayton (33,843), Mulgrave (34,995) and Oakleigh (35,535).

But the Liberals and Nationals also have their share. The nine National Party seats collectively are almost 30,000 below their quota, so it is possible that one will go in the next redistribution due in 2012. The 14 Liberal seats in suburban Melbourne are in a similar position.

Overall, the commission reports that 3,582,232 Victorians are enrolled to vote, 228,387 or 6.8 per cent more than in 2006. Most of that increase has been in the outer suburban seats, with Yan Yean alone having 13,051 more voters now than in 2006.

Of the 88 seats, 86 have recorded increased enrolments, with only Swan Hill (down 659) and Forest Hill (down 255) recording declines.

There were also big increases in inner-suburban seats such as Melbourne (up 5063), Albert Park (up 3222) and Richmond (up 3084) where the Greens are challenging Labor.




YAN YEAN 54,134 +33 LAB 8.0

KEILOR 52,853 +30 LAB 19.4

NARRE WARREN STH 52,340 +29 LAB 11.0

BASS 49,279 +21 LIB 5.6

YUROKE 48,425 +19 LAB 20.2

SOUTH BARWON 48,309 +19 LAB 2.3

CRANBOURNE 48,076 +18 LAB 11.3

MACEDON 47,847 +18 LAB 8.2

TARNEIT 47,784 +17 LAB 12.5

ALBERT PARK 47,148 +16 LAB 9.7


SWAN HILL 33,073 -19 NAT 23.4

CLAYTON 33,843 -17 LAB 20.3

MULGRAVE 34,995 -14 LAB 15.8

BULLEEN 35,488 -13 LIB 8.5

DANDENONG 35,535 -13 LAB 18.7

OAKLEIGH 35,602 -13 LAB 12.4



Tuesday, November 16, 2010

Federalism's fatal fiscal flaw

STATE government was much bigger yet simpler in 1955, when Henry Bolte became premier. The role of the states was clear. They ran the hospitals and schools, public transport and the police, and anything else that wasn't spelt out as a federal responsibility. They built and ran the roads, the dams, and public housing. They oversaw planning, local government, rivers, and most areas of business. They provided our electricity, gas and water. The money was in Canberra, but most of the power over our daily lives was in Spring Street.

That meant that we knew where the buck stopped. If you thought state services were inadequate, you knew who to blame. It's a very different world now.

Australia's founding fathers gave us a federal system with a fatal flaw: they failed to give the states adequate revenue sources to match their responsibilities. Instead, Canberra was given far more revenue sources than its responsibilities required. As Alfred Deakin put it, the states were left "legally free, but financially bound to the chariot wheels of the central government".

The result is that, today, a federal government loaded with money intrudes into many areas of state politics. Even where the states remain clearly in charge, the services they can provide are limited by the size of the grants Canberra gives them. And for Victorian voters unhappy with those services, it is no longer clear where the buck stops.

Take hospital waiting lists. In the Whitlam years, the Commonwealth agreed to pay 50 per cent of the costs of running public hospitals. But, as the demands grew, the Commonwealth welshed on its share of the deal. The Howard government's decision in 2003 to cut $1 billion from hospital funding if you doubt it, you can find it on page 54 of budget paper 2 that year was only the most obvious way in which it dropped its end, leaving the state to carry most of the load.

The state government now pays 60 per cent of hospital costs, and they are rising at a rate of knots. In 1999-2000, when Labor took power, Victoria spent $3.8 billion to run its hospitals. Last year, 10 years later, it spent almost $9 billion, up more than 130 per cent in a decade. Yet hospital waiting lists continue to grow, emergency wards keep getting overcrowded, and Victorians are understandably angry.

Why have demands on hospitals grown so rapidly? There are some very good reasons, the best of which is that fewer of us are dying. In that decade, from 1999 to 2009, the death rate of Victorians across all ages fell by 16 per cent. Neonatal death rates were cut by 29 per cent, death rates of people aged 65 to 69 fell by 25 per cent, death rates of those aged 75 to 79 fell by 24 per cent. That is very good news, in which our health system can take pride.

But it costs money. Those who might have died a decade ago now spend more time in hospitals, whether as inpatients or outpatients, and the state government has to pay the bill. Many have been saved by expensive new equipment, for which the state has to pay the bill.

Back in Bolte's time, everyone had their own GP, and if your child got sick at night, the family GP would come over to see her. It doesn't work like that now. Hospital emergency wards have become the GP of the night, and they're crowded and overworked, and the state is paying the bill for that, too.

Financing state governments was also simpler in Bolte's time. The state made sure its revenue covered its operating expenses and a bit over, and borrowed the money it needed for new infrastructure. Bonds issued by state governments and their agencies were guaranteed by the Commonwealth, the banks were required to hold plenty of them, and mum-and-dad investors also held their share. The state's net debt totalled more than 50 per cent of gross state product (GSP), but that was no problem.

Now, the states compete in global markets for their money, and we have developed a political culture that insists that our debt must have a top-drawer AAA credit rating. You only keep that if you don't have much debt. In the past two years, the Brumby government has stepped up the pace on infrastructure spending, lifting state debt to 5 per cent of GSP, which is forecast to reach 8 per cent by 2012. That's only a fraction of what it was in Bolte's time, and the ratings agencies aren't worried not yet but if it went much higher, they would be.

So what does a state government do? Build less infrastructure, and let the unmet needs escalate? Or find ways to get the private sector to do it, often at greater cost such as the Brumby government's desalination plant, which the Auditor-General says will cost us the equivalent of $5.4 billion over the 27 years of the contract? Or take on more debt, and try to get Canberra to share the cost? Governments are hemmed in from every side.

Australia is now a high-wage, low-tax country, and new infrastructure is prohibitively expensive. To me, the most stunning figure in this campaign was Labor's estimate that putting the railway line under the road at St Albans will cost $165 million. When you look at how Asian cities such as Singapore, Kuala Lumpur and Taipei are rolling out state-of-the-art metro systems, it breaks your heart that we can't do the same.

In Singapore, I wandered up to a metro building site and saw a notice to workers in Bengali. Singapore built its metro by importing cheap workers from Bangladesh, and sending them home after the job was done. That's not our way but it works and ours doesn't.

State government is about trying to meet limitless needs with very limited resources, to satisfy a public whom nothing will satisfy. I salute those brave souls who offer to do it.


How-to-vote cards awaken the rebel in inner-city voter

WAS the Liberals' decision to direct preferences to Labor a tactical masterstroke, or an own goal that makes it more likely Labor will win re-election? Time and the Liberal voters of inner Melbourne will tell.

For while the Liberal head office decision tilts the odds Labor's way, Labor could still lose Melbourne and Richmond to the Greens on Liberal preferences.

Surprising figures published by the Victorian Electoral Commission show that at the 2006 election, most inner-city voters including most Liberals ignored how-to-vote cards and wrote their own preferences.

In a special study, officials examined every vote in the four inner-city seats fought out between Labor and the Greens, and the four country seats fought out between the Coalition and independents, or between the Liberals and Nationals.

In both areas, it found that less than 50 per cent of voters followed the party how-to-vote cards. Only 49 per cent of Labor voters did so, 48 per cent of Nationals, 46 per cent of Liberals and 31 per cent of Greens.

How come? One reason is that in Melbourne, for example, 30 per cent of votes were not cast at the polling booth, but as pre-poll, absentee and postal votes.

Such voters usually don't have a how-to-vote card, and make their own choices.

Others like to make up their own minds rather than do what head office tells them. And the inner suburbs are full of such people.

In the four inner Melbourne seats, just 39 per cent of Liberal voters followed the party's card, ranging from 45 per cent in Brunswick to a mere 30 per cent in Melbourne.

In 2006, that hurt the Greens. Their candidate Richard di Natale needed 83 per cent of Liberal preferences to win Melbourne, but won just 74 per cent, as 26 per cent of Liberals ignored the party ticket to give their preferences to Labor.

This year, if it happens again, that same independence could work for the Greens. At the federal election, Greens and Labor polled roughly level in the state seats of Melbourne and Richmond.

On federal voting, the Greens would have needed 46 per cent of Liberal preferences to win Melbourne and 52 per cent to win Richmond. They now have little chance of winning Brunswick (82 per cent) or Northcote (84 per cent). But this match is still alive.


Monday, November 15, 2010

Resources boom presents real challenge for government

THE OECD's question for Australia is simple: how do you manage a resources boom to maximise the gains and minimise its negative impacts on inflation, the budget, and other industries?

Its own answers are mostly good ones, even if they seem to have been written by Treasury, like a ventriloquist using the OECD as its dummy.

First, ensure taxpayers get the benefit of the boom by putting a comprehensive tax on mining profits, and not the three-legged dog Julia Gillard gave us. The mining tax should be redrawn to cover all minerals, all mining firms, and raised higher rate so taxpayers do not end up paying the miners.

Second, the government should not spend the money on routine services, but save it, or spend it only on infrastructure.

Third, keep open the doors to skilled migrants, to avoid labour shortages pushing wage rises out of control, and forcing the Reserve Bank to drive up interest rates.

Fourth, lift spending on infrastructure and regulate it better. Invest more in public transport, and make trucks pay the full cost of the wear and tear they impose on our roads. Slow the rollout of the NBN, to encourage competition between internet technologies.

Fifth, start a new wave of reform, mainly through comprehensive tax reform, but also by removing government support for the car industry. (Like Treasury, the OECD simply ignores the real-world impact of closing down our biggest manufacturing industry).

And last, set up a serious anti-poverty program, to bring more people into the workforce by tackling the underlying causes of their disadvantage: poor health, poor education, homelessness, welfare traps and dole benefits below the poverty line.

This is a real challenge for a government that has messed up the few bold decisions it has taken, and for an opposition that likes reforms only if they're popular. But if Treasury is right, this is the environment we are facing, so challenges can't be avoided.

It's a pity the OECD relied so heavily on Treasury's advice, and hence proposes to shut down the car industry. That would intensify the damage the resources boom will do to the south-east, where most Australians live. Learn to think outside the square, guys.

But the rest of its report raises many ideas our politicians should be thinking and talking about. Not that they will. Treasurer Wayne Swan yesterday ignored the 98 per cent of the report focused on reforms to highlight the few bits that let him pat himself on the back. How ungainly. How out of touch.


Saturday, November 13, 2010

Neither side will give Victoria's a deficit

JOHN Brumby and John Lenders want us to worry about the risk of a Baillieu government spending Victoria into the red. They say the Coalition has pledged a "staggering" $9.6 billion of new spending during the next four years, plunging the state into deficit.

They demand that the Liberals submit their policies to Treasury for costing as Tony Abbott conspicuously failed to do in the federal election. Without that, they warn, Victoria's AAA credit rating would be at risk. Phooey, say the Liberals. Ted Baillieu says it's just a game Labor is playing: "John Brumby is making this up as he goes along." They say they have given their policies to an accounting firm for costing, and will make them public before election day.

Treasury chimes in that at the start of the campaign Victoria's likely budget surpluses during the next four years were just $3.2 billion. Both sides' promises already exceed that.

Should we be worried? Is there a risk, as Brumby says, that a Baillieu government's spending would "blow the budget, threaten the AAA credit rating, and the only way you could keep it in surplus is through massive cuts to jobs, massive cuts to health, massive cuts to education and massive cuts to police and the public service"?

In a word: no. And there are two reasons why. First, Victoria has had 18 years of conservative fiscal management, under Labor and the Coalition alike. Do you really think either side would blow that by allowing its spending to exceed revenue?

Remember 1999? Labor took power promising to build a railway to Tullamarine, reopen passenger trains to Mildura, and build a railway to South Morang. In 2002 it pledged to build EastLink without any tolls. It broke all these promises rather than allow the state to go into deficit.

No one knows what the Coalition's promises this time would cost. But you can bet that if they exceed the revenue available, they will be cut to fit within it.

It's more likely that the Coalition will decide it doesn't really need to have two police patrolling every train station at night, or will junk other promises.

Second, Labor says its own promises will be paid for from the contingency fund buried in the budget to finance future spending promises. OK, but the Coalition would have access to the same fund to finance its promises. Treasury says there's $6.75 billion in the kitty.

So far Labor is out-spending the Coalition on hospitals and transport. The Coalition is out-spending it on police. Schools and tax cuts are still to come.


Friday, November 12, 2010

Victoria leads states in jobs growth

VICTORIA has added more jobs over the past four years than any other state, with 278,000 more people in work than at the time of the last state election.

Jobs figures released yesterday by the Bureau of Statistics show that Australia's buoyant jobs growth continued in October, with employers adding almost 30,000 jobs in seasonally adjusted terms.

But the strong jobs market has brought out many more job seekers, with the bureau recording a record 12 million Australians 65.9 per cent of all Australians aged 15 and over now in work or looking for a job.

That lifted the seasonally adjusted unemployment rate to 5.4 per cent in October despite the strong growth in jobs, up from 5.1 per cent in September.

But even on those figures, seasonally adjusted employment has grown by a stunning 375,000 in the past year including 271,000 more full-time jobs while unemployment fell by 23,000.

On the more reliable trend figures used to analyse state data, Victoria has added 95,000 jobs in the past year, with jobs growing 3.5 per cent in the state, compared with 3.2 per cent growth in the nation.

Over the past four years, the bureau reports that Victoria has enjoyed the biggest jobs growth in the nation in absolute terms, and the third fastest growth behind the Northern Territory and Western Australia.

"Victoria is Australia's jobs engine room," Treasurer John Lenders declared. "Not only have we achieved the 150,000 jobs target promised at the last election, we have created 138,000 more jobs than promised and more than any other state."

But shadow treasurer Kim Wells highlighted the jump in seasonally adjusted unemployment to 5.6 per cent. "The number of unemployed Victorians is now higher than in late 1999," he said. "After 11 years of Labor, unemployment remains stubbornly high, and many Victorians continue to suffer in the dole queue."

The rapid growth in NT employment is largely due to federal intervention in Aboriginal communities, while WA has grown because of the mining boom. In Victoria the main driver of new jobs has been the growth in overseas student enrolments, which have now gone into reverse.

In the past year, NSW has overtaken Victoria in jobs growth for the first time in years, as the violence against Indian students in Melbourne, the rising dollar and the federal government's crackdown on work visas for overseas students in low-skilled courses have turned students away.

Even so, the bureau estimates Victoria has added 50,000 jobs in the past six months, with jobs booming in construction, retail, government, real estate and professional services.

Unemployment on the trend measure rose from 4.9 per cent in October 2006 to 5.5 per cent in October 2010. It has edged up slightly in the past six months as more people have come off the sidelines to look for work.


Oct 2006 to Oct 2010

Victoria 278,000 10.8%

NSW 259,000 7.8%

Queensland 214,000 10.2%

WA 141,000 13.0%

Australia 981,000 9.5%



Wednesday, November 10, 2010

Labor punts on modest debt level

THE Finance Department and Treasury have urged the Gillard government to make big spending cuts. But there were none in yesterday's mid-year budget update. The question now is whether they will come next year or not at all.
On these figures, you could argue there is no need. Treasury estimates that Australia's budget deficit will shrink rapidly over the next two years, and turn into surplus by 2012-13.

If so, we do not have a budget problem which is the almost unanimous view of the ratings agencies, global financial institutions and market economists.

The Coalition argues we should cut spending faster. But yesterday's figures predict government spending will shrink this year by 1.1 per cent of GDP, or $14 billion.

Next year it will shrink by another 0.8 per cent of GDP, more than $10 billion. The following two years will deliver a similar cut between them.

Yesterday's update makes only minor changes to Treasury's economic forecasts and bottom lines. The only real "spending cut" was to put off $400 million of investment in the new rail line through Melbourne's western suburbs.

The forecast peak in Australia's net debt has risen to 6.4 per cent of GDP. Wow. In the US, they're asking whether it will peak this side of 100 per cent.

But in their briefings to the new government, Treasury and Finance warned that achieving the goal of a surplus in 2012-13 would be touch and go, and urged ministers to lock it in by making further spending cuts. Labor did not respond this time.

Will it do so in next year's budget, or just punt on being lucky?


Promises wipe out Victoria's $4.4bn surplus

IN MAY, the Brumby government's budget forecast $4.4 billion of surpluses over the next four years. Treasurer John Lenders pledged "hand on heart" that those surpluses would not be used to fund election spending.

But that was May. The election is now. And, on current trends, there will be very little of that $4.4 billion left by the time it's over.

Treasury's pre-election budget update shows that by the start of the campaign, $1.2 billion of surpluses had already gone, mostly to fund the government's $630 million regional package, its bushfires response and its climate change package.

Since the campaign began last week, the government has committed a further $2.4 billion in new spending over the next four years, mostly to reduce hospital waiting lists. And there's more to come.

That's not a serious problem. The budget will stay in surplus, thanks to years of conservative budgeting by both sides. Net debt within the budget sector itself is only $8 billion and is forecast to peak at $15.7 billion or 4.3 per cent of GDP in 2013. Global ratings agency Standard & Poor's has just reaffirmed Victoria's AAA rating.

But Labor will have to be careful from here on, and the Coalition will have to be very careful. It has banged the drum about dangerous debt levels for years, yet now it comes into the state campaign proposing a lot of new spending, but virtually no savings.

Sending thousands of offenders to jail rather than issuing suspended sentences will cost real money. So will providing another 1000 or so protective service officers and transit police. These are not cheap solutions.

One can be sceptical about Labor's estimate that the Coalition's pledges so far imply $4.2 billion in new recurrent spending.

But they are going to cost us, and Team Baillieu needs to be open about telling us how much, and how it will pay for them. Accountability begins here.


Tuesday, November 9, 2010

Liberal right's obsession deprives Baillieu of oxygen

FORMER New Zealand prime minister Mike Moore summed it up nicely. In politics, he said, your opponents sit on the other side of the chamber. Your enemies sit on your own.

Ted Baillieu knows what he means. In recent days, his attempt to get his message out to Victorian voters about what changes a Coalition government would make have been drowned out by factional opponents beating their drum to insist that the Liberals should not direct preferences to the Greens.

Senator Helen Kroger, former Victorian party president, wrote in the Herald Sun that a preference deal with the Greens would be "dealing with an organisation that is fundamentally opposed to Liberal beliefs . . . Their agenda begins with extolling euthanasia and goes on to death duties, gay marriage, increasing taxes, carbon or otherwise, and ripping government funding from private schools. What's next? Legalising drugs and heroin injecting rooms?"

John Howard said the Liberal Party should think carefully before giving preferences to the Greens, declaring: "The Greens are fundamentally anti-free enterprise." Lesser lights, too, had a go, suggesting that Liberals preferencing the Greens ahead of Labor would leave voters confused about what the party stood for.

Great fun for all! The rest of us might think that for these Liberals, the worst election result would be one in which Baillieu becomes premier, and takes the Liberals back towards the political centre.

Let's be clear. There are four seats Brunswick, Melbourne, Northcote and Richmond where the Liberals will come third. Their preferences could decide whether the seat goes to Labor or the Greens. They have no third choice.

Ideologically, the Liberals and Labor are closer to each other than either is to the Greens. That's even more true in state politics, which is essentially about providing services. It's particularly so when the rivals Baillieu and John Brumby are former classmates. Both are pro-business, socially progressive middle-of-the-roaders who just happen to be in different parties.

But they are opponents, whereas the Greens are a marginal force outside the inner suburbs. If the Liberals preference Labor, they will ensure it wins those four seats, freeing it to focus its resources instead on the seats where it is fighting the Liberals. If they give preferences to the Greens, they force Labor to fight on two fronts and divide its energies. Which would you choose?

With one exception, the Liberals have always chosen to give preferences to the Greens, so Labor has to fight on two fronts.

Howard was Liberal leader at the 1996, 1998, 2001, 2004 and 2007 federal elections. At all of them, on the mainland, the Liberals gave preferences to the Greens. They did so also at the 2010 federal election, without anyone mistaking Tony Abbott for a Green.

The exception is Tasmania, which gives us a controlled trial for the Kroger view. Tasmania went to the polls in March. The Liberals topped the vote, but both sides ended up with 10 seats and the Greens with five. Liberal leader Will Hodgman had first rights but, under pressure from right-wing powerbroker Senator Eric Abetz, refused to negotiate with the Greens. Labor leader David Bartlett went ahead and did so. So Labor and the Greens now have a coalition government, and it's working well.

The federal election saw the Liberal vote in Tasmania slump to 39 per cent after preferences the party's lowest vote in any state since World War II. Opinion polls show a collapse in Liberal support at state level. And The Mercury reports that Hodgman has now taken on Abetz for control of the party, declaring: "We cannot give away the middle ground. I will fight to make sure that doesn't happen, even if it costs me my job."

That's option B for the Victorian Liberals. All those in favour?

Baillieu has problems enough fighting an opponent like Brumby, who is the embodiment of pragmatism. The Premier is like a grand prix driver in pole position, and Baillieu has to find a way to overtake him. But every time he gets momentum on an issue, Brumby just slides across to block his way. Increase police numbers? Sure, says Brumby,

I'll do that. An anti-corruption commission? Yep, says Brumby, that's my policy now.

Has there ever been a government so assiduous at wooing interest groups from all sides and trying to keep them in the tent? Victorian Labor is a government of professionals. It has a massive advantage of resources over its opponents. And it is ruthlessly pragmatic about giving the public what it wants.

The polls suggest the most likely outcome is that Labor will get back with a reduced majority. The next most likely is some form of coalition between Labor and the Greens. The next most likely is a Coalition government in some form, either alone or through a deal with the Greens.

That's unlikely, but is it impossible? At this point, maybe. Yet the Greens are a work in progress, moderating as they come closer to power. In Germany, the state of Hamburg is now run by a "black-green" alliance of Christian Democrats and Greens, and Saarland by a "Jamaica alliance" (black-yellow-green) with the free-market Free Democrats as well. Don't knock it till you've tried it.

I don't have a dog in this race, but I would like to see Victorians have a choice. Could the Liberal right please get out of the way and let Ted Baillieu offer us one?


Monday, November 8, 2010

Cliffhanger as swing against Victorian Labor looms

VICTORIA could be heading for another cliffhanger election. A swing against Labor on election day of just 3.7 per cent would be enough to force it into a minority government, relying on the Greens for support.

With opinion polls reporting swings of between 1.5 and 3.5 per cent to the Coalition, for the first time since Steve Bracks dethroned Jeff Kennett in 1999, Victorians are entering an election in which there is a real chance that Labor could lose its majority or even lose government.

In 2006, with Bracks still at the helm, Labor won 43 per cent of first preference votes, and 54.4 per cent of all votes after preferences. The Liberals and Nationals under Ted Baillieu actually won a swing of 3.4 per cent, but with Labor retaining 55 of the 88 seats in the House, it seemed nothing had changed.

This time a swing of about that size would mean real change. But the Coalition needs a swing of almost twice that size 6.5 per cent to win government in its own right.

If the swing is too large for Labor to retain its majority, but too small for the Coalition to win a majority, Victoria, like Australia, would have a minority government, with new Greens MPs joining independent Craig Ingram in holding the balance of power.

Most assume this would result in some form of Labor-Greens coalition but no one has yet ruled anything in or out.

In the Legislative Council, where the Greens already hold the balance of power, the odds are that they will retain it with expanded numbers, probably taking the DLP's seat in Western Victoria and maybe a Liberal seat in the eastern suburbs.

But let's look first at the seats on the front line of this election. As a rule, the party that holds the outer eastern suburbs of Melbourne forms government. Labor broke the rule in 1999, when, with three independents, it won half the seats in regional Victoria. But in 2010 it will have to hold most of those eastern suburban marginals to hold power.

Mount Waverley was retained by Labor's Maxine Morand last time by just 0.4 per cent. In neighbouring Forest Hill, former Olympic ski champion Kirstie Marshall held her seat by just 0.8 per cent.

Mitcham is Labor's by just 2 per cent, Burwood (Jeff Kennett's old seat) by 3.8 per cent, and in the distant Dandenongs Gembrook by 0.8 per cent.

These five seats are must-wins for the Coalition if it is to win government. Gembrook aside, they are middle-class, middle-suburban seats, whose voters are better off than most, and normally would be expected to go with the Liberals.

To the city's south are inner suburban Prahran (3.6 per cent), bayside Mordialloc (3.6) and outer suburban Frankston (3.3). And in Geelong's southern suburbs, there's South Barwon (2.3).

Winning these nine seats would not be enough to put the Coalition into power, but it would be a start. Most are traditional Liberal seats. If it doesn't win most of them, it is hard to see it winning government.

Its problem is that the next swag of seats those it needs to win power require much bigger swings: 6 to 9 per cent. And many are in Geelong, Ballarat and Bendigo, which have been solid Labor territory in recent elections not least, at the 2010 federal election.

Labor now holds all four seats in Geelong, and to win back Bellarine (8.0) or Geelong (8.4) is a big ask. Ballarat East (6.7) and Ballarat West (6.6) are equally tough, when Labor won 61.7 per cent of the Ballarat vote in the federal election. And while Industry Minister Jacinta Allan holds Bendigo East by a less daunting 5.4 per cent, Labor lifted its federal vote there to almost 60 per cent. The federal election, however, experienced swings against Labor in the more rural seats. But Agriculture Minister Joe Helper is alone on the front line, in Ripon (4.4) around Ararat.

Seymour (6.7) and Macedon (8.2) sound like natural Liberal seats, but their names are misleading. Half the Labor vote in Macedon is actually in Sunbury, and in Seymour, most of its vote is in townships on Melbourne's outer fringe, such as Healesville, Wallan and Kilmore. If Black Saturday costs Labor any seats, Seymour should be it.

But to win government, the Liberals will have to win some of the hard-asks in Melbourne's middle and outer suburbs: Bentleigh (6.4), Eltham (6.5), Monbulk (6.7), Carrum (6.8) and Yan Yean (8.0). The first four are the kind of seats that change when governments change. If they don't go Liberal, Victoria won't either.

The Nationals are not part of this contest. They are contesting only four seats they don't hold already, and only in Craig Ingram's seat of Gippsland East (8.5) do they have a realistic chance if they beat the Liberals into third place.

But there is a quite different battleground that many will focus on. After taking the federal seat of Melbourne off Labor in August, the Greens have set their sights on four state seats in the inner suburbs: Melbourne (where they need a swing of just 2.1 per cent), Brunswick and Richmond (both 3.7) and Northcote (8.6).

On federal voting, they would win Melbourne and Richmond easily, but just miss out on Brunswick and Northcote. If the latest polls are right, and Liberal preferences go their way, they will win all four. If so, the Liberals would have to win just seven seats from Labor to force it into minority government while a 10-seat shift to the Coalition would put it in the driver's seat to negotiate a minority government.

But while one poll put the Greens support as high as 19 per cent, it is hard to see any other realistic chances for them.

At this election, Ted Baillieu will be swimming uphill. Governments normally win elections. The Coalition has never led in the polls. The Greens are natural Labor allies. And the Coalition needs a landslide to win. And yet, this could be close.









Source: Victorian Electoral Commission. Figures show two-party swings needed to change seats between Labor

and Coalition, except in seats marked (*G) where the swing shown is between Labor and the Greens.

In Gippsland East, the Liberals would need a swing of 9.2 per cent to unseat Craig Ingram.


Labor 54.4%

Liberals-Nationals 45.6%

Swing to Coalition 3.4%


Labor 43.1 %, Liberal 34.4 ,

Nationals 5.2 (Coalition 39.6),

Greens 10.0, Family First 4.3,

independents and others 3.0.

to end Labors majority, Coalition

and Greens need to gain a net 11

seats (3.7% swing).

to win majority of their own,

Coalition parties need to gain a

net 13 seats (6.5% swing).

to win majority of its own,

Liberals need to gain a net 22

seats (8.4% swing).


Percentage swing

needed to lose seat


31.9% Broadmeadows

31.1% Thomastown

25.6% Kororoit

25.4% Preston

24.7% Footscray

24.3% Derrimut

24.3% Williamstown

22.8% Pascoe Vale

21.5% Lyndhurst

20.8% Mill Park

20.3% Clayton

20.3% Altona

20.2% Yuroke

19.4% Keilor

18.7% Dandenong

18.0% Lara

15.8% Mulgrave

15.2% Bundoora

13.6% Melton

12.5% Tarneit

12.4% Oakleigh

11.8% Essendon

11.3% Cranbourne

11.2% Niddrie

11.0% Narre Warren Sth

10.6% Bendigo West

10.5% Ivanhoe


9.7% Albert Park

9.3% Narre Warren North

8.6% Northcote (*G)

8.4% Geelong

8.2% Macedon

8.0% Bellarine

8.0% Yan Yean

6.8% Carrum

6.7% Monbulk

6.7% Seymour

6.7% Ballarat East

6.6% Ballarat West

6.5% Eltham

6.4% Bentleigh


Percentage swing

needed to lose


Rodney (Nat) 24.9%

Shepparton (Nat) 24.7%

Swan Hill (Nat) 23.4%

Lowan (Nat) 22.1%

Murray Valley (Nat 21.8%

Mildura (Nat) 20.7%

Benalla (Nat) 17.6%

Gippsland South (Nat) 15.9%

Hawthorn 12.3%

Mornington 11.9%

Malvern 11.4%

Scoresby 11.2%

Brighton 11.0%

Polwarth 10.7%


Kew 9.6%

Nepean 9.4%

Warrandyte 9.0%

Sandringham 8.7%

Bulleen 8.5%

Doncaster 8.2%

Benambra 7.8%

Caulfield 7.7%


Bass 5.6%

Box Hill 5.3%

South West Coast 4.1%

Bayswater 2.9%

Evelyn 2.8%

Narracan 2.7%

Morwell (Nat) 2.2%

Hastings 1.0%

Kilsyth 0.4%

Ferntree Gully 0.1

0.4% Mount Waverley

0.8% Gembrook

0.8% Forest Hill

2.0% Mitcham

2.1% Melbourne (*G)

2.3% South Barwon

3.3% Frankston

3.6% Mordialloc

3.6% Prahran

3.7% Brunswick (*G)

3.7% Richmond (*G)

3.8% Burwood

4.4% Ripon

5.4% Bendigo East