OPINION | The two big questions this election period


Crispin Hull


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There are two questions in this election campaign – one on climate and one on tax – which you should be able to answer yourself or be satisfied that Labor can, otherwise you should vote for the Coalition.

The climate question is that, given Australia produces less than 1.5 per cent of the world’s carbon emissions and that cutting our emissions to zero would do almost nothing to arrest global warming, why have an emissions-reduction program and why not use or sell the coal we have got?

The tax question is: Do you think that wealthy people and people on higher incomes should pay a lower portion of total tax than they do now so they have more money to spend themselves?

Let me try to answer them.

The climate question is a bit like the issue of vaccinations. Unless everyone mucks in and reduces emissions and gets their children vaccinated the consequences will be dire. But if only 1.5 per cent do nothing on either there will be no serious consequences for them.

A selfish person might save themselves the time and effort of getting their children vaccinated. That works if more than 95 per cent get vaccinated, denying the disease a chance to spread. But if too many people are selfish the disease can take hold, as with measles now, especially in the United States.

Of course, only the unvaccinated are struck down. You might say, serve them right, but unfortunately nearly all of them are innocent children. That is why authorities act: no vaccination, no admission to school.

So, too, with emissions reduction. The US will come back to its senses. Then it, China and the EU are not going to allow free-loaders. The climate has already changed and the window to stop putting more carbon into the atmosphere and even removing some it before the process becomes irreversible is closing.

No matter how much carbon you remove from the atmosphere you will not be able to re-freeze a melted Greenland icesheet.

As this becomes more obvious and the economic effects are more widely felt, Governments will act more decisively. Those countries which do not act on their own account will be penalised in a way that will be more costly than actiing – trade penalities and denied access to, for example, the GPS network or airspace.

That is why we should start now before the cost escalates.

The argument over costs of emissions reduction in this election campaign is puerile. It is a bit like a householder facing deterioration in the foundations that threatens to make the place uninhabitable saying, “We can’t afford to do anything about that.” The reality is that the householder cannot afford NOT to do anything about it.

The other reason we should move is to set an example. It is precisely because Australia is a big coal producer and exporter that we should show it is possible for a high-carbon economy to become a low- or no-carbon economy.

Tony Abbott may call action on climate change “socialism” just as some may say that forcing children to get vaccinated is a form of fascism. I call them both just good sense.

Now to tax. This week’s zero inflation figure highlighted the profound economic difference between the two major parties. The Coalition is retaining faith in Trickle Down economics: if you let the wealthy keep more of their wealth and income, they will invest it in profitable activity and the money will trickle down in jobs and wages.

But we now know that, if you let the wealthy keep more of their wealth and income, the wealthy just keep more of their wealth and income.

Labor, on the other hand, has unwittingly invented the more cogent Trickle Up economics. With wages growth people feel less secure and spend less. With higher wages, the economy expands for all, including wealthy capitalists.

Capitalism cannot work without modest inflation and modest wages growth.

Effective capitalism has always been a fair bargain between labour and capital, with government providing things the private sector cannot or is not willing to provide: universal education and health, policing, defence, and big infrastructure.

That breaks down unless the tax system takes a reasonable portion from whose who can afford it to deliver fairly those things which the market alone cannot deliver. That is not socialism. Indeed, it is working capitalism.

Staying with the election, a whole lot of minor-party candidates will be elected as senators on 18 May.

As it happens, I think that is good for democracy, but I have an idea that might help the major parties.

The latest opinion poll puts the Coalition on 39 per cent primary vote and Labor on 37.

To get three out of six Senate seats in any state a party needs three quotas on 14.3 per cent, or 43 per cent. This is becoming increasing unlikely in any state. So it is becoming more likely that the majors will each get two seats and minors the other two in each state. This election will come close to that. In the long run that means, leaving aside the territories, 24 Coalition, 24 Labor and 24 minors.

The double dissolution in 2016 messed up the pattern, but in the long run it seems each major party will get a third of the Senate seats and the minors will get the other third, even though they are getting only about a quarter of the vote.

A really, Machiavellian counter-intuitive way of putting the breaks on minor-party representation in the Senate, would to increase its size to 14 senators for each state, with seven of them coming up for election every three years.

Now, getting a single quota out of seven takes just 12.5 percent of the vote, as against 14.3 percent to get one out of six – seemingly that is an easier task for a minor party.

But wait. It also becomes easier for a major party to get three quotas out of seven than three quotas out of six. It would require just 37 per cent of the vote – roughly what they are getting now. If each major party got three out of seven in each state, it would leave room for only one, not two, minor-party positions in each state.

Leaving aside the territories, that would mean, give or take a bit, a Senate of 36 Coaltion, 36 Labor and 12 minors. The minors would go from having about a third of the senators to having about 16 per cent of them.

A bit of a worry. And principle would not stop the majors from doing this, so let’s hope inertia does.

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