John Howard, now seeking to emulate Menzies by staying around forever and a day, tends to stick to political tactics which have worked for him in the past. One is throwing large amounts of money at perceived political problems for only marginal utility gains by individuals – the baby bonus being only one example that springs to mind (well actually, ad hoc pre-election payments to parents and pensioners also does after a moment’s reflection). The last time he thought he was in big political trouble was in early 2001 when petrol prices were rising. The response was an economically stupid decision to freeze the excise. Now, he’s caved into various lobby groups and National Party affiliated special interests and thrown money at petrol prices yet again. As Andrew Norton remarks, the really dumb thing is throwing a hell of a lot of taxpayers’ money away to make a minimal difference to high prices which were driving changes in behaviour anyway. I’d also tweak Andrew’s argument by suggesting that what a lot of economists have been saying about high prices driving the search for alternative energy sources and changes to people’s transport decisions in the direction of public transport (though town planners and infrastructure providers have a role to play here too) is another by-product of the price of petrol. But Andrew, and Cam over at Polemica are both certainly right about the policy stupidity of the latest moves. And it certainly adds grist to the mill for my argument that the Howard government is anything but “economically rational”. And the irony is that all it will probably buy Howard is a small bounce in the next poll within the statistical margin of error.
The danger for Howard, of course, and it’s one long term incumbents are particularly prone to, is he may be fighting the last war with these tactics.
Elsewhere: Phil has more analysis at Spinopsys.
Another Groundhog day moment was the Coalition trying to kick up another shitstorm over eight people in a rickety boat.
Look on the bright side. From a policy point of view it was marginally less insane than a cut in petrol excise…
This is the mob who could not wait but cancel Labor’s Better Cities program when they got into office in 1996.
This is the mob who ignore calls for federal investment in urban transport (unless its a freeway in a marginal seat).
This is the mob who is about the only federal government in the developed world which does not get involved in urban public transport.
Did we really expect any better?
I am one of those rare Australian residents who does not drive and does not have a car. Nor do I aspire to. OK – it didn’t start by choice – but in the four years since I have found a vehicle unaffordable I have discovered the joys of not having to worry about finding an expensive parking spot, speeding, numerous other trivial offences and the risk I might run by having a beer after work. To now see millions of tax dollars – some of which are undoubtedly mine – going to subsidise conversions to gas, extra ethanol (Manildra shares, anyone?) and all the other off the cuff policy ideas is galling to say the least.
This smacks of a short term idea dreamt up to make it look like the government is actually doing something, when it should probably be doing nothing at all. If people want to know about the expense of a car, then go to Europe, where petrol prices are incredibly high compared to ours, and people have to pay to drive on many of the new roads. Have to agree with you Mark when you say that this is yet more evidence that this government is anything but economically rational.
Cheers…
Personally I couldn’t care less about whether people have a 6 or an 8 or a 16 cylinder Veyron but why the fack are we subsiding their “petrol price rises in the 21st century, who could have known?” moments. Jeebus it’s like giving renovation subsidies for pine country kitchens and sunken lounges.
If it’s fuel cost candyman time then just give us all $2000 and I can go buy a vespa, a bitching carbon fibre bicyle or maybe just a new pod and some books for the bus ride.
The thing, if any, that will get Howard in the next election is the swing of the electoral pendulum. I have no way of predicting its amplitude or periodicity.
But it exists and does in all governments eventually. This is really the tendency of marginal median voters to fall off the governments column after they have had enough.
There are alot less rusted on voters these days so it is surprising that governments have much longer terms. I put this down to national security bogeys and economic prosperity goodies carrying more weight. People have loyalty to policies, rather than parties, which is probably a good thing.
I still think that Howard will win the next election, since the mineral boom appears to still have legs and the realty boom has not collapsed. Also, the terror threat has not entirely disappeared.
A big tumble in the US, with a knock-on effect to the PRC, would definitely spell the end for JWH. There are signs that the US’s long awaited recession is coming.
yet more evidence that howard is neither the Ideologue or the conservative portrayed here or at equally mad ‘right wing sites’.
He is only about doing whatever it takes to stay in power.
Look out to changes in IR when he realises the danger.
Oh for a reprehensible circumstance. But there’s never one around when you need it.
Lovely little cluster of letters in today’s SMH re the LPG conversion subsidy – why the hell should my taxes go on subsidising some nitwit who chose to buy a 6 cylinder behemoth, who now cant afford to run it? What rather puzzled me was why the subsidy is necessary without some sort of means test?
I drive an LPG vehicle, & have costed getting conversion for friends – usually around $1400. Now if you believe figures of people spending $200 per vehicle per week (source NSW Minister for Transport), given that LPG is less than half the price of petrol, & allowing for kilometre to litre consumption runs a bit higher than petrol, most cars should still give you a halving of your weekly fuel bill. Still with me? OK so that’s an easy saving of $5000 per year. Even after paying for the conversion yourself, you’re still $3500 ahead.
This has all the hallmarks of the messy economic thinking of the private health insurance rebate – more people will apply than predicted, the LPG conversion industry will lift prices to match the subsidy, the government will increase the excise on LPG (all of which is OZ produced – we are an exporter of the stuff – why an excise at all?) & once again a government will have failed to address the problem with macro reforms such as infrastructure investment.
How dare Costello grimly warn us about rampant inflation due to the oil prices, when his government has spent ten years doing absolutely bloody nothing about developing a viable transport infrastructure that could improve export performance, lower our dependance on petroleum, and do something constructive about greenhouse gas emissions? Looked like win-win to me, but now its gunna be whinge-whinge. & how dare Watkins, NSW Min of Trans wail about the plight of families with $400 weekly fuel bills when his bunch of popsicles has been even worse than Canberra as regards transport planning & urban planning? Here come the chickens……..