Monday, 12 August 2013

Haven't they ever watched "The West Wing"?

Surely these two political leaders would be students of The West Wing. 

Surely they would have watched the presidential debate episode "Game On"

Surely they'd remember the moral of the story when Jeb Bartlett's wife Abbey cuts his tie in half moments before he goes on stage. To fire him up.

Surely they understand that passion matters in a debate!!

The misogyny poll bump

And weren't they there during PM Gillard's misogyny speech?

Of course they were there. It was fiery, passionate. You might even have said it was slightly out of control.

It generated a nearly 10 point bump for Labor in the polls as well.

Passion, fire, they work. Australians aren't stupid. We want to see the "real" Kevin Rudd and the "real" Tony Abbott.

Perversely, the hyper-controlled Abbott might just be the real thing; but this robotic Rudd?? No.

If you want us to pay attention, start believing in it - with passion. Last night was terrible :(

Let me know what you think

Mark S

Thursday, 8 August 2013

Abbott's company tax cut is disingenous

First, let me make this clear, I am in favour of the lowest appropriate taxes for individuals and businesses. BUT, Tony Abbott's decision to cut company taxes in Australia by 1.5% is simply bad policy and worse, it wrongly appropriates the Henry Tax Review to justify it.

Why Abbott's use of the Henry Tax Review is wrong

The first of the key directions read:

Maintain the company income tax rate towards the lower end of the small to medium OECD economy average, with a reduction to 25 per cent over the medium term. This aims particularly to increase the level of business investment in Australia across all sectors, including foreign direct investment; promote more entrepreneurial activity; and reduce incentives for profit-shifting offshore.

So this would seem to support Tony Abbott...but wait, there's more.

Ken Henry also recommends sweeping changes to the tax system, including a land tax (and resources tax) and many other sweeping changes. So, Abbott's plan is to remove the resources tax, not add a land tax and cut the company tax rate.  That just doesn't stack up.

Abbott-nomics, Reaganomics and the Laffer curve

While he explicitly named the Henry review to support this cut, I'm more concerned about the implied throwback to the 1980s and Ronald Reagan's economic policies described by the great catchphrase "a rising tide lifts all boats". It didn't.

One of the big theories that Reagan used to support his policy was the Laffer curve.  This theory suggested that in some circumstances that a cut in tax rates would result in increased government revenues. Legend has it that one of his economics advisors, Arthur Laffer sketched this curve on a restaurant napkin.

Laffer Curve: suggests that revenue increases if high tax rates are cut

However, Laffer also pointed out that spending discipline is required in the short term, to increase government tax revenue in the long term.
The Laffer curve has been discredited for a long time. There are many papers that have been written to debunk the Reagan and Bush supply-side policies...yet Abbott thinks he can roll out the same discredited theories.

Spending cuts will be required

So, even if we put aside all of our misgivings about the Laffer curve, supply-side economics and Abbott's plan, there is one thing that can't be denied.

Spending cuts will be required. Even Arthur Laffer said so.

Tony Abbott. Be accurate. Treat us like adults. If you are going to cut revenue through company tax cuts, tell us what other revenue you will raise, or what spending you will cut. Reagan or Bush would.

Let me know what you think.

Mark S

Tuesday, 6 August 2013

It's an election so it's time to blog...about polls

Let's start with polls. Properly constructed polls don't lie. Yes, there are increasing challenges in polling now that people don't answer landlines but pollsters work their way around that.

However, there are differences between each of the polling techniques so that gives different results. At the moment, most of the major polls have the Coalition in front on both a primary vote and two party preferred basis.

Newspoll: L-NP 52%; Labor 48%
Essential: L-NP 51%; Labor 49%
Roy Morgan: L-NP 50.5%; Labor 49.5%
Galaxy: L-NP 50%; Labor 50%

The bounce has stopped

What's more important is that the Coalition has been in front for almost all of the past two years. PM Gillard got a fillip after the misogyny speech. PM Rudd got his recent bounce.

But there is no sustained trend. The Coalition has remained in front. One bounce does not an election win make.

How could Labor win from these polls?

There's only one way I can see for Labor to win. It comes from the Morgan Poll.

Morgan is the only firm to ask voters for their preferences. The other firms calculate it from the 2010 patterns. Morgan claims that the preferences from minor party votes will flow stronger to Labor than in 2010, and their poll has been showing a better result for Labor than the other polls as a result.

If they are right, Labor will hold seats that the other pollsters expect them to lose. If, if and if ... probably not.

From where I stand, the prospect of Tony Abbott as leader of Australia is not a pretty thought - but at least there appears no chance now of the Coalition controlling the Senate.

Let me know what you think

Mark S