Independent Senator Nick Xenophon has dashed the Government’s hopes of implementing its $42 billion economic stimulus package by voting to reject it.
Earlier today the passage of the legislation appeared doomed as Senator Nick Xenophon vowed he would not support the package without the inclusion of an amendment to bring forward funds to save the Murray-Darling Basin.
Peter Martin’s take: “Malcolm Turnbull no longer has the best of both worlds. He opposed the package, and it got rejected.”
Earlier, the Greens had negotiated a number of what seem to be quite sensible amendments to the package, knocking off some of the bonus for higher-income earners, to spend on things like bike paths and making a bonus available to a greater proportion of the unemployed. Pensions are also under review for the Budget.
In any case, the fun and games really begin now.
Elsewhere: Possum [h/t comments]
Update: some thoughts on the merits of Xenophon’s proposals.
Update [by MB]: A post on the politics of today’s developments.
While including the Murray-Darling in a stimulus package seems a little left-field, it at least acknowledges that the productive capacity of our economy relies upon our natural resources.
That said, it looks more like a fig leaf for Xenophon to hide behind when actually he’s just pulling a fairly spectacular, and on the face of it fairly successful, headline-grabbing stunt.
Nick is the new Brian.
Hands up who thinks proportional representation is a good idea?
Never the less, I’m not impressed. A lot of people are hurting, and Senator Xenomorph wants to play silly buggers. I guess he reckons he’s safe enough if a double dissolution comes to pass. But it’s not looking good for Malcolm’s numbers in the reps.
My hand is up, we only get semi proportional as it currently stands, razor.
Martin is truly chugging the kool-aid if he thinks Rudd would call a DD. Great poll numbers or no, an election in the midst of an election would be needlessly risky.
“an election in the midst of an election would be needlessly risky.”
Superfluous, too.
Possum’s take
Xenophon has every right to do this. It’s the opposition which also opposes the bill that gives him that power. Turnbull is the one who should be vilified, and this stupid tradition in Australia of never voting against the party line. Obama’s stimulus bill got through a hostile senate, why can’t the Liberal party be as mature as the Republicans? (That’s a bit of a joke
.
‘an election in the midst of an election would be needlessly risky’
Dunno Patrick. I could hazard a guess and suggest the momentum is on Rudd’s side.
Every poll I’ve seen lately suggests the punters are spooked and stimulus as opposed to taxcuts are what they’re looking for. Malcolm is toast if this is the case.
But then again you may prefer Julie as Treasurer……
Xenophon shows himself to be a true nutbag on this one. If even a little of what we’re hearing about his proposed changes and his reasons for rejecting it are true he’s completely lost the plot. He wants more, but he’s not sure exactly what. And soon, but only after he’s had time for lengthy consultations with his advisor.
Yes, it’s hard being a lonely independent, so if you choose that path you have to make sure you have the support you need. He seems not to have done that, and to have rejected support that has been offered. Making his choice to stand alone seem bloody stupid.
The 1974 Double Dissolution was pretty spectacular, but perhaps we are in for an even more thrilling ride in 2009. Fielding has gone to water, and Xenophon has pulled the tiger’s tail, but Malcolm will be the big loser as Rudd crashes through. This is politics at its very best.
MOZ you can check out his amendment here
No big dinners tonight by the look of it, and I don’t think humble pie is on the menu of any of the Opposition’s plate any time very soon. Eric Abetz and others have made much today about “the other plan” (i.e. the no plan of “empty and the party of no”) but not so much about the cost on the poor blighted future voters of Australia who they claim would have to foot the bill at a cost of $9500 for every man, woman and child. This dishonesty should not be allowed to go unchallenged but I nowadays lack the mathematical capabilities of being able to compare :
1. What is the per capita cost of the $42 billion mooted package?
2. What is the actual per capita cost of the $22 billion plus the Opposition is claiming is so much better?
I have not seen any analysis of these two claims to date.
My generation had no qualms of incurring some necessary debt to ensure that future generations had a better life and I think that’s how most Australians would look at it.
To let con-artists like Turdbull and fissured ceramics like Xenomorph into the active economic management of this country would be to flush the last few remaining shreds of ‘democratic’ fig-leaf covering this brutal Governor-Generalate state down the toilet.
Lets start by stopping this kidding of ourselves this country is run by a democracy.
Its run by unrepresentative swill. The likes of Bill Hefferlump and Wilson Tuckey.
The first step in dealing with a problem is recognizing the problem. And the basic problem here with a Fielding in the house is that we remain grovelling beneath the monarchy. So double-down Kevin. This is the big one. Economic management AND independence for Australia. History will damn you forever as a labor traitor if you pass on this one. Step up tiger. You can do it. Yoda man.
thewetmale, I’ve seen that and I don’t think it could reasonably pass. It’s both vague and badly written. For example, no help may be given to adjust to increased economic activity… so someone who needs to expand their business is SOL, while someone trying change over to exactly the same business can receive assistance. Sure, that might be intentional, but I am not convinced.
(for some reason I get “welcome back Moz” but when I hit submit I get “Error: please fill the required fields (name, email).” clicking “change” and filling out the fields works )
Yep, Turnbull’s nuts are in a vice.
He is in a much weaker position now. He can’t be seen to back down, but if Xenophon remains intransigent a double dissolution could wipe the Libs out.
BTW Fielding would be toast, too.
Maybe Turnbull could persuade a Liberal senator to go missing when the vote is taken on the next try in the Senate.
I see the ANZ economist saying the govt could junk the schools spending to pay for Xenophobic’s river upgrade. That would go down well.
Let me tell you that every under-funded, dilapidated public school in the country is hanging out for this package to pass.That’s millions of parents (voters).
Turnbull is TOAST!
Moz @ 13
You would hope the government would lend a hand to write up the amendment so it is quality legislation.
“Maybe Turnbull could persuade a Liberal senator to go missing when the vote is taken on the next try in the Senate.”
You mean like ‘missing in reaction’.
Here was an opportunity for the Nats to stand up and be counted now they are counted out
Why did the government reject the ammendments? The aim of the ammnedments seems to be to bring forward money that is already allocated, why is this problematic.
I know there are people who are more astute about such things than me, so I’m curious to hear opinions on why the government rejected it.
Xenophon campaigned heavily on the Murray-Darling issue, I did not give an above the line vote to X because he split his preferences 50:50 between the Greens and Family First and I did not want to assist FF in any way..so I voted below the line and Xenphon’s commitment to seeking better outcomes made me place him very high on my ballot. I’m happy with his decision, I do not see how voting to ensure better funding for this nations major river-system is counter-productive to the economic stimulus package. Can someone explain to me why it would be?
Only to be expected. Otherwise he mightn’t be noticed. Malcolm must be spewing.
furious
it’s a bloody american style ear-mark.
saving the murray is just not relevant to the legislation at hand – however necessary it is, and there are a thousand other necessary things too, why not them?
Pat @ 4 – semi proportional. Is that like being partially pregnant. Do they count votes and allocate quotas differently in your state?
Will no one rid me of this turbulent senator?
If the government are so keen on the idea of stimulus then why stop at $45 bill?
Why not just round up to to a nice $50 bill and make Mr X. a happy man?
I thought they were serious and this is a grave situation and they aren’t plying politics with bushfires?
That would be 8mm Marine Ply of course.
Razor, it’s clearly semi-proportional because firstly a vote is not worth the same proportion of a Senator, depending on which state or territory you live in, and secondly because the quota to get a Senator elected in a half-Senate election is too high.
I suspect that one of the main reasons the MDB and rural sectors haven’t received a lot from the package is that demand for produce will continue in an economic downturn – if memory serves me correctly, it is the rural sector at the moment which is keeping our current account deficit in the reasonable area rather than deep in the red.
A quick look at the bill really only moves the water buy back forward. This is the last thing that we need now – more people moving off the land and looking for work. The structural readjustment for rural communities is OK but there is an element of this in the 10Bn MBD package anyway and if the buy back scheme isn’t moved forward, the rationale for this extra $2Bn doesn’t seem to exist.
Overall, this looks like dumb politics from X and when compared to what the Greens got out of the negotiations, X just looks greedy and naive.
I now understand what Paul Keating meant when he called the Senate unrepresentative swill.
I’m not too happy with the Greens, either. I understand some of the $50 that was knocked off the $950 is to go to cycle ways. In other words, us poor mugs on low incomes in the outer suburbs get to pay for trendy young advertising execs to ride from their million-dollar Georgian terrace to their ridiculously overpaid jobs. Why can’t spoiled inner-city trendies pay for their own damn cycle ways?
I don’t think people understand the mess the world economy is in. Turnbull and these Senators (Fielding was elected on less than 2% of the Victorian vote) remind me of their counterparts in the US who are patting themselves on the back for reducing the size of Obama’s stumulus (in other words, for making it less effective).
History won’t be kind to Turnbull and the rest of the clowns in the Senate.
Al @ 26 – it is a form of proportional voting. I doubt there is any system that isn’t “partial” if you want to be pedantic about it.
The Senate and the States should be dumped. They are an anachronism. Reform like that is much more important than symbolic crap like Republics and Sorry.
Tyro Rex, Why is road infrastructure more of an economic stimulus than water infrastructure ?
I assume people in a position to sell water, may either use the revenue to pay off debt [would that free up credit?], or spend it elsewhere, perhaps in alternative industries, not unlike the people who will be receiving the one-off payment.
Everyday people will get 900$ rather than 950$, and it stalled a bill of such importance?? Labor are playing a more cynical, self-promoting game of politics than Xenophon. They have power and they want more….and yet there are plenty on this blog willing to vilify Xenophon for simply doing what he was elected to do, that is, independently represent his state.
Roads are in all places in Australia.
All Australians eat food grown in the Murray Darling Basin. All Australians are dependent on having a functional river system.
…also, the roads are currently functioning in a away that sustains economic activity, the river is not.
road building and repair does function to sustain economic activity – it provides employment – the entire point of the bloody package! and like *schools* they are all over the country, MDB included. water subsidies and buybacks do nothing for employment. the flows are needed for the *environment*.
“…also, the roads are currently functioning in a away that sustains economic activity, the river is not.”
Yes, there is no economic activity in this country that relies on the MDB whatsoever.
The MDB needs rain and the ocean be let back in, more than cash. Also there is no stimulus in taking farmers water away up river, its even anti-stimulus.
“I assume people in a position to sell water, may either use the revenue to pay off debt [would that free up credit?], or spend it elsewhere, perhaps in alternative industries, not unlike the people who will be receiving the one-off payment.”
The $50 million spent by the government in the first round of water allocation buybacks went to a grand total of 123 sellers. That’s an average of $406,000 to each seller. It’s just not quite the same thing is it.
Furious balancing is perfectly correct.
Back during the Howard years, everyone on this site wanted the Senate to stand up to the Government and not just be a rubber stamp.
Well, guess what, folks: the Senate isn’t going to be a rubber stamp now either. Xenophon intends to actually earn his salary and do his job. Deal with it.
If the stimulus package is really so very, very urgent that it can’t be delayed by a bit more horse-trading, then the Government can just accept Xenophon’s amendments. Problem solved.
er, how would you spend the equivalent amount of money investing in water infrastructure without employing someone? The money in the amendment is divided between infrastructure and buy-backs.
“Water infrastructure” is a euphemism for buying out irrigation licences.
Update: I have a new post on the merits or otherwise of Xenophon’s proposals here
Joshua Gans:
http://economics.com.au/?p=2572
Today Mr X has proven what a Mickey Mouse party the Greens are. One lone senator stands up for the MDB while the Greens party hails a few bike paths.
Good Game Mr X
Latte causes cancer
Tyro Rex, care to cite information that suggests that infrastructure equates to buying out water licenses?
The amendment suggests bringing forward expenditure on water infrastructure under the Commonwealth’s Water Plan. That plan highlights spending on improving efficiency, by modernising infrastructure. It allocates 5.8 billion to this, Xenophon suggests fast-tracking 2 billion of that.
Buying out water licenses would likely get inefficient users out of the system, this is likely to benefit better land managers and potentially increase profitability for those users, as well as, potentially, freeing up land for dry land farming ventures.
[Today Mr X has proven what a Mickey Mouse party the Greens are. One lone senator stands up for the MDB while the Greens party hails a few bike paths.]
Maybe The Greens understand the bill facing the Senate is about stimulating the economy and not the problems surrounding the MDB?
And what makes you think they aren’t in a partnership over this issue and it’s all a cunning plan?
It’s a long term project that doesn’t aid short-term stimulus. Even the short term problems of the MDB require environmental flows, not efficiencies slowly gained over the next two years. To get environmental flows, you have to buy out water licences. Now. That’s what the priority is.
Xenophon just wants regional pork that has nothing to do with the short term economic stimulus that is proposed. Everyone has a road and school. Well except for a great chunk of country Victoria.
I direct all further responses to Robert’s new thread, linked above.
I cannae read what Mr Gans wrote, google ads obstruct the view. Too bad as I don’t know what to think other than our Mr Xenophon has an unfortunate name. I imagine, what every politician wants most for their constituency are funds, and this seemed like a perfect opportunity to secure them if you could. Mr Opportunistic. But it does make one wonder about the wisdom of a system that can be so effectively snarled up by one ditzy bloke with an agenda.
Awfully late, but I meant election in a recession, ha ha ha. Don’t get me wrong, I would love a DD, but Rudd would be pretty confident the libs are toast next time anyway I reckon.
From The Greens:
“$10 million for bioremediation and revegetation trials in the Lower Murray-this will involve green local jobs creation. To the last hour we sought the transfer of more water downstream but the Minister adamantly opposed it.”
The reason the Libs and Nats would be in trouble with a double dissolution would be they would generally only win 4 or 5 senators per state, leaving them with between 27 and 32 senators.
The other thing about a DD – someone correct me if I’m wrong – but don’t you have to wait three months before putting the legislation up again? That would be political suicide for Rudd.
nick – “The $50 million spent by the government in the first round of water allocation buybacks went to a grand total of 123 sellers. That’s an average of $406,000 to each seller. It’s just not quite the same thing is it.”
It’s a substantial amount of money, enough to consider investing in an alternative, more sustainable form of business. It get’s inefficient users out of the system, and frees up land for other uses.
For example, although I don’t particularly agree with the business of carbon off-setting, [as it exists currently], it does create an alternative economy for farmers that is not irrigation dependent. It also has the potential to create employment in regional areas. Landscape repair can assist neighbouring properties by reducing wind damage to crops, as well as reducing the potential for salinity.
There won’t be a DD – the ALP and X will do a deal – its how politics works – the only way X can realise the agenda he was elected on, is to tie expenditure on his priorities to the government’s own priorities. If he didn’t pull stunts like this, the government would think he is soft, and either ignore him, or give him less. In political terms, it is that simple.
Who is going to risk new money on a business in the middle of a global recession. The $406,000 will be kept safe for better times.
caroline characterised Senator X: “one ditzy bloke with an agenda.”
Senator X would not have had that power, if some Lib and/or Nat Senators had supported the stimuli. (Senator X’s prominence is a bit like the end of a footy match when player Z “kicks the winning goal”. Somehow all the other goal scorers, whose efforts allowed Z’s goal to BE the winning goal, are ignored.)
Senator X is a tiny player in a huge game.
Will a Nat cross the floor?
In ‘75 we waited for a rogue Lib Senator to cave in and cross the floor, to pass Supply in the Senate. The GG acted instead.
I doubt they will deal with Mr X, it would almost better to let the Liberals cook in their own juices for a week or two, and then re-introduce, get it passed. And if we get a recession, the blame will fall on the opposition (“the recession we didn’t have to have”).
The smartest move by Turnbull would be to allow one or two his senators to defect tomorrow, attack them in public but gets himself out of a bind.
Thomas Paine, I think you underestimate people, and I think you ignore the reality that every crisis creates opportunity for those who have the creativity and drive to pursue it.
patrickg is correct. The whole DD process would consume at least the next six months. Rudd cannot argue that the stimulus package is urgent and hang about for six months to achieve a DD trigger.
Sen X is in a position demand much from the Govt.
I wonder how long it might take for Fielding to work out that he can play that game too.
What a rent seeker. Give him credit, he’s not one to let a catastrophic national crisis get in his way. Like a ship steward standing in front of the lifeboat demanding his cut.
For what it’s worth, infrastructure projects to reduce water losses are about the most expensive ’source’ of water currently available, and their environmental implications (impacts on groundwater by removing seepage) are not very well understood. This aspect of water policy is a terrible use of government money.
I was probably a bit hard on the Greens in my last post. They turned down what must have been a tempting opportunity and played a fairly responsible role in all this. The Greens and the government seem to have fixed some of the unfairness for workers on very low incomes.
And it’s just silly to compare Howard’s raming of non-urgent things through the Senate (as he did with almost no debate on Work Choices) with a world-wide economic collapse.
This money really does have to get pumped into the economy quicky. It’s not some gimmick on the government’s part. I hope everyone here reads Paul Krugman’s blog at the NY Times (Consecience of a Liberal). The rest of the world should be as terrified as he is.
I’m not sure this is very smart politics by X.
He’s a lone senator from one of the less populated states, holding up an economic package for the entire country.
I’ve got no problems with balance of power senators doing a bit of parochial horse-trading, but it seems like the wrong time. Surely there’ll be plenty more opportunities over the next few years for X to push his particular barrrows?
Update [by MB]: A post on the politics of today’s developments.
Kymbos @ 61, why should stopping seepage from places that never normally had seepage be a problem? Sounds to me like it is fixing a problem by returning that seepage to the river where it should be.
Xenophon is doing what he is paid to do.
The MD Basin has been a problem for the past fifty years at least, and no-one has really cracked it.
The MD Basin is a significant part of the economies of NSW, Qld, Vic and SA.
Bringing expenditure forward does not cost us anything extra over what was planned already.
So, bringing forward planned work on a project that has national significance is bad because?
Smoke and mirrors folks – the Govt is after an election – if they get even one or two more senators, they are laughing. A double dissolution would be silly though – it would halve the quotas making it even more likely that minor parties would get into the Senate.
“Bringing expenditure forward does not cost us anything extra over what was planned already.”
From the proposed amendment:
“(d) providing for the payment of grants of up to a total of $2 billion under the structural
adjustment scheme required to be determined under section 19.”
That is not money brought forward.
Mark, stopping seepage can be a bad idea because groundwater is extremely complicated and not very well understood. Perhaps the water wasn’t naturally there originally, but it may have been there for decades and seepage may be the only current source of supply for stressed groundwater-dependant ecosystems. We’ve played a lot with water over the years, and not much is in it’s ‘natural’ state.
Otherwise, it is much much more expensive than desalination or any other source of water. It is a bit of furphy as any part of a solution to water shortages.
BTW, caroline
I shouldn’t have singled you out at 8.34pm last night. So many commentators are focussing on just ONE of the 35 votes (X’s) rather than the other 34 votes that contributed to the total
cheers
Just for those who think the Greens squibbed and settled on bikepaths for yuppies, here’s the list of what they actually got:
The agreement includes:
$200 million in grants for services and job creation projects run by community organisations and local governments.
An extra $50 million to assist low income earners and unemployed people.
Relaxation of the liquid assets tests for people who lose their jobs and seek government assistance-from $2500 to $5000.
An assurance that all low-income earners, including students, will have access to the bonus payment.
$10 million for bioremediation and revegetation trials in the Lower Murray-this will involve green local jobs creation. To the last hour we sought the transfer of more water downstream but the Minister adamantly opposed it.
Re-opening the $500 million program for strategic local jobs-creating projects to smaller local councils who have not applied before.
A further commitment to increase the aged pension in the May budget.
$40 million for bikeways, for an estimated 700 local jobs, to reduce traffic congestion and provide healthy transport options.
$60 million for job-creating projects for Australia’s natural and built heritage-for example, historic buildings and national parks.
$5 million per year funding, in the budget, for Australia’s Bushfire Cooperative Research Centre in Melbourne and an assessment towards upgrading this vital centre to a global coordinator of wild fire research.
Increased funding for the Australian Bureau of Statistics in the May budget.
And perhaps most critically in terms of the funding for all the infrastructure, a commitment that all the new public & defence housing funded will have “energy efficiency standards [that bring]Australia closer to American and European best practice.”
full press release here
The group that has come out of this the best is clearly the Greens, particularly when you read the above.
Turnbull is toast – overcooked, of the white bread variety, and rapidly turning stale.
Agreed Adrian – it’s also solid evidence that those on this blog who proclaimed that the Greens just wouldn’t be up to the challenge of doing pragmatic deals in the Senate were wrong.
Contrary to popular misconception, the Greens are far from the nutters that certain sections of the MSM like to portray them as. The real nutters are of course the Liberal National coalition, full to the brim of frothing at the mouth idealogues, born to rule egomaniacs and know nothing imbeciles.
And then are there’s Julie Bishop, all three rolled into one.
really have nothing more to add!