Two stories in the paper today seem to rather neatly sum up where the Baillieu government is going: stupid, nearly meaningless stunts to placate their right-wing base – in this case, continuing the barney with the Federal government over cattle grazing in the Alpine National Park. Meanwhile, on the big infrastructure decisions, after months of hemming and hawing, they end up doing what Labor originally planned. Usually, there will be claims of cost blowouts or ministerial incompetence, but, in the end, they go ahead and build.

In the core service delivery areas of state governments, if there’s been any sense of radical change, it’s escaped me. The inquiry into child protection is worthy, but it’s hardly the stuff of the great political divide. The government has also abandoned any pretence of supporting the Brumby government’s climate change targets, but that is almost meaningless when the issue has been taken almost entirely out of state government hands.

The broader populace of Victoria – in the twenty seconds or so they have collectively devoted to thinking about state politics since the election – are in all probability not particularly disturbed by this. But the steady-as-she-goes approach must be a terrible disappointment to sections of the Liberal party base. But – particularly after the Kennett revolution of the 1990s, and the transfer of so much effective power to Canberra, not least on taxation – what else could they realistically have on the agenda?

So, I’m curious – what are the conservative governments in other states up to? What is their agenda – and do they even have one?

The report estimates that a fair market value for the pokie licenses – based on expected returns from having a machine – was around $4 billion. The auction receipts were just under $1 billion. So – what happened?

When poker machines were initially introduced in Victoria, all the machines were owned by two operators – TABCorp and Tattersalls – unlike in NSW where they can be owned by individual clubs. When the government decided to switch to allow individual ownership, they then had to figure out some mechanism to sell the rights to operate a pokie. Two methods ended up being used, after the intervention of the Victorian National Party (whose votes were needed to get the legislation through the Upper House) and its leader Peter Ryan (now the Police Minister) ostensibly on behalf of smaller rural clubs. The first was a pre-sale of pokies at fixed prices to clubs; the rest were auctioned off.

This process had a number of problems, according to the auditor-general’s report:

• The pre-sale of so many machines took too many participants out of the auction market.

• The restrictions placed by the government on the entry of new participants in the pokie business, and the restrictions placed on moving licenses from venue to venue, reduced demand.
• The “uniform price” auction format saw bidders pay less than what they were actually prepared to offer – while $841 million of bids were made, the actual revenue was only $655 million.
• auctions stopped while additional, higher bids were still being made.
• Insufficient information was made available to bidders.
• Too many licenses were made available
• The reserve price was too low

The criticisms of the auction process, and the way the rules were decided, appear to be plausible. But I’m skeptical of the notion that such flaws could have really resulted in pokie licenses going for a quarter of their “fair value”.

While new entrants to the pokie market might have found the barriers to auction participation prohibitive, the existing hotel owners – who presumably understand the pokie business as well as anyone – had to participate to retain the rights to operate machines. If the prices were really so far below what they thought a license was worth, surely at least some of them would have been able to rustle up additional capital in a hurry to buy more machines? Indeed, wouldn’t many of them have had additional readily available capital to buy more licenses, given that they expected to need it just to hang on to the machines they currently operate? Even if you weren’t sure whether you’d be able to pass the additional regulatory barriers to actually install the machines, at such a discount wouldn’t you take – well – a punt on it? Bruce Mathieson did, but why didn’t others?

As such, I wonder whether the bigger factor here was that the restrictions on what the license provide – even if you’ve got one, you still need to pass a planning approval process and fit under regional pokie number caps – made them less attractive to investors. That’s certainly what Labor claims, as noted in this editorial in The Age.

While I agree with The Age’s call for further inquiries, given the huge amount of revenue potentially foregone, I for one would like to see more evidence that the actual losses were a) as high as claimed, and b) largely due to bad auction design rather than social policy choices.

But, in any case, curse the Kirner and Kennett governments for permitting the spread of pokies into every corner of Victoria in the first place.

As one of the two centerpieces of the Victorian ALP campaign launch (the other was a large expansion of kindergartens), John Brumby announced his intention to bring a version of this to all Victorian state school students, with the “Year 9 Experience“:

The Year 9 Experience is an intensive personal development and life skills course for Year 9 students in government schools that will run over a whole term, with a centrepiece two-week residential program. The Year 9 Experience will give kids time away from the traditional classroom and will deliver a style of teaching and learning that has a greater hands-on and action orientated focus. Through the program, students will be removed from their ‘comfort zone’ and challenged to develop life skills such as self-reliance, leadership, independence, respect, teamwork and caring for others. Students will still be required to cover the core curriculum but what will be different is the way in which core subjects are delivered with a greater focus on experiential learning.

Given the way that this kind of thing has become increasingly popular across both private and government schools, there’s clearly a demand for these experiences from parents. As such, providing funding to make such experiences available to all students is a rather sneaky blow for equality. As I understand it, an experience of temporarily “living apart” is a pretty common part of initiation to adulthood in societies around the world, so in that sense there’s a heck of a lot of precedent. But all that said, all expenditures have an opportunity cost, and it’d be nice to see some evidence (how about a pilot program?) that rolling this out across Victoria is a good use of $200 million over the next four years.

Elsewhere: Guido points out the downside of school camps – they’re difficult experiences for some:

The policy states that “Through the program, students will be removed from their ‘comfort zone’ and challenged to develop life skills such as self-reliance, leadership, independence, respect, teamwork and caring for others.” That’s all well and good. But it assumes that every student has a ‘comfort zone’ to be removed from. Firstly this may not be true. Some children of that age unfortunately may not have a ‘comfort zone’, and second maybe the comfort zone that they created for themselves is the only thing that is keeping them sane.

Imagine a submission came in to the Victorian Cabinet from a government department. It was clearly going to cost an nine-figure sum annually, but beyond that it was uncosted. There was no clear estimate of the benefits of this expenditure. And yet, on this basis the government committed to act. Any political journalist worth their salt would have a field day exposing the rank policy incompetence of such a government.

But not only does The Age‘s Paul Austin think that this is an acceptable modus operandi for government, he’s taking the government to task for not acting immediately on such a flimsy evidence base.

Why? Because it’s about saving people from bushfires, and so Paul Austin wants the government to commit to implementing everything the Royal Commission has recommended.

Austin suggests that the recommendations are less expensive than some of the multi-billion dollar claims bandied about:

But look at what they recommend: ”The progressive replacement of all single-wire earth return power lines in Victoria with aerial bundled cable, underground cabling or other technology that delivers greatly reduced fire risk. The replacement program should be completed in the areas of highest bushfire risk within 10 years and should continue in areas of lower bushfire risk as the lines reach the end of their engineering lives.” (Emphasis added.)

On bad days, “highest bushfire risk” areas are pretty much anywhere in rural Victoria. Even if all the SWER lines around, say, Kinglake, had been replaced, that’s not where the fire started. It started 50 kilometres away in Kilmore East. If you’re going to reduce the risks of SWER lines substantially, it would seem to me that a large proportion of them are going to have to be replaced. Even if only the highest-risk 10% are to be replaced, we’re still looking at an expenditure in the billions of dollars – 2 billion is a nice round number, giving a cost of roughly 200 million dollars a year.

Back in the real world, 200 million dollars a year buys you a lot of things. For instance, you can charter Elvis for 2.5 million a fire season – maybe three million once you throw in operating expenses and whatnot. You could (theoretically) have a fleet of 30 of the things dotted around the state and still have half the kitty left over – maybe for some fixed-wing firefighting aircraft, smaller choppers, and whatnot, with the goal of spotting and extinguishing a greater proportion of fires within the crucial first few minutes.

I don’t know whether this is a better way to spend money than replacing SWER lines. But – and it pains me to say it – there’s no way to tell from the Royal Commission recommendations either. So the Brumby government is right to think very carefully what to do about this issue and not commit until the hard work is actually done and ballpark costs and a realistic analysis of the benefits to be gained from various options for improving the safety of Victoria’s power supply are available for consideration.

But because it’s a disaster response, some people seem to think rational consideration should go out the window.

That’s the kind of thinking that got us into Afghanistan and Iraq, Paul.

One thing that seems clear from the document, though, is that Brumby and Victorian Labor have come to a rather different judgment to federal Labor on the politics of climate change. Aside from targeting a headline reduction in CO2 emissions greater than the national average (which is, admittedly, easier to do when your electricity is currently generated by burning carboniferous mud and running the resulting lukewarm steam through National Trust classified turbines), the document strongly calls for a price on carbon.

It seems odd – given that Victoria is ground zero for job-displacing action if there’s a carbon price – that the Victorian government is keener on stronger action than federal Labor, which we’ve agreed is particularly concerned about New South Wales and Queensland in the upcoming election. And it’s not like Victoria doesn’t have prominent denialists – Andrew Bolt, possibly the single most prominent explicitly denialist voice in the mainstream media, is a Victorian. Why the difference?

You know the script.

I’m not sure that we can be that definitive in either predicting no outcome or in assessing the subsequent politics.

Aside from funding incentives, a lot of the cards are still in the Commonwealth’s hand.

I’ve been most impressed with Kristina Keneally’s strategy throughout the manoeuvring around health. Her advocacy of what is essentially a single funder model, a pooled fund into which both the Commonwealth and states contribute, with the states hypothecating GST revenue rather than the Commonwealth clawing it back, seems to me to represent a compromise which comes very close to the original intention. And her presentation of the arguments has been assured.

She has an end in mind, and a path to that end.

By contrast, John Brumby’s intransigence seems to me to have a limited shelf life. A range of health experts have queried his claims about the superiority of Victorian hospitals, and in any case, the plan largely mirrors the Victorian system. Part of Victoria’s advantage is that its population is more concentrated over a smaller geographic space, allowing it to avoid the problems of coordination that states like Queensland, WA and NSW confront. He should also realise that his position is unsustainable in the longer term.

Brumby has to face his own electors, and deal breaking might get you so far with the admirers parochial tub thumping, but if there is no deal, Kevin Rudd will be lining him up as a duck in a row alongside Tony Abbott as an obstructionist. If he really wants a federal campaign, including a referendum, which would see him aligned with the naysayers on health (because that’s how it will be played), that’s his choice, but it seems to me to be poor political thinking.

I’m also not so sure that the conventional wisdom on the health referendum is right. Tim Dunlop argues it’s not. And it’s being reported that the referendum bills have already been drafted. So it’s quite possible to envisage a lose-win strategy for Federal Labor emerging out of a COAG defeat. But I think the forces for agreement have been underestimated.

NB: Previous discussion on LP here.

Update: The ABC is reporting that every premier bar Colin Barnett has signed up to the Rudd plan, including the cession of 30% of the GST to the Commonwealth. Barnett is negotiating one on one with Rudd. I think it’s a safe bet to say NSW’s strategy changed the game.

Update: More from The ABC. As I said in comments, I suspect Colin Barnett will come on board after one on one negotiations for “special arrangements” for WA.

Brumby appears to be playing the parochialism card, no doubt believing there’s no harm in trumpeting Victorian hospitals as the nation’s best while holding out for a deal. There might be an element of the performative in this barrage of rhetoric, if Bernard Keane is right that the figures supposedly proving the superiority of Victoria’s hospitals are seriously massaged. That is to say, at least part of Brumby’s intent is probably to convince his own constituency of how fantabulous his government is.

Meanwhile, Action Man Abbott is left sniping from the sidelines, on a bike in a country town somewhere. The health debate has comprehensively returned the political agenda to a topic of the Rudd government’s choosing, and the carefully staged theatrics of policy roll out are as much about that as about putting pressure on the states.

Over in the press corner, the prize for most portentous analysis goes, as usual, to Paul Kelly:

KEVIN Rudd now faces in John Brumby the most intense challenge to his political authority and policy credentials from within the Labor Party since he became Prime Minister. This challenge penetrates to the heart of Rudd’s re-election strategy.

No, it doesn’t, Paul.

The referendum threat is just that, a piece of symbolism designed to produce leverage. It’s not some disastrous fracturing of the government’s message to have lawyers saying that the Commonwealth could probably do it anyway, but an added bonus. There’d be no great political pain, indeed political gain, in Rudd suddenly announcing that they’d discovered they already had legal grounds to force the states to bend to the national will. This sort of blah is typical of the day by day press piffle, mistaking routine political manoeuvring for some sort of world-historical event.

Meanwhile, back in the real world, the other Premiers are getting testy with Brumby. The reality of Commonwealth-State relations is that the states are only apparently in a unified position against the feds. They have separate political interests, and are also in constant competition with each other for crumbs from the federal pie. It’s the logical consequence of vertical fiscal imbalance.

The truth is that it’s Brumby’s position which is politically shaky. Most of my Victorian friends tell me there’s a real sense that the gloss has gone off Victorian Labor since Bracks headed for the exit, and Bernard Keane is much closer to the truth than those commentators who can apparently see nothing other than dire doom ahead of Kevin Rudd at every turn of the page:

In fighting for his own political survival, Brumby clearly figures he owes his federal colleagues no favours, which is correct. But he’s storing up a huge amount of bitterness in Canberra and if he succeeds in derailing the reform plan, he’ll find he’s got no relationship left with Kevin Rudd.

Elsewhere: Guy Beres.

Guy Rundle disagrees. In a powerful post at The Stump, he argues that the languages and practices of late modern managerialism created an atmosphere where the consequences of the fires – deaths, which as he says were truly horrible (and some possibly avoidable) – were depersonalised and treated as the objects of a bureaucratic machine, which failed to do what it should have done because of the lack of leadership.

In other words, the leader was following the followers, who were clearly in need of some leadership – which is in essence, creating a new situation, imposing human collective will on an unfolding process.

Could dynamic leadership have saved lives? We don’t know, but we do know that there wasn’t any of it in place.

Right across the board there should have been resignations after Black Saturday – Nixon, the whole CFA leadership, others. Some might have been re-appointed, but the important thing was surely to acknowledge that something had happened, that there had been a breach in reality.

Instead we get the opposite – an elite and interconnected political class, made up of the higher echelons of the ALP, the police, the bureaucracy. Overwhelmingly conformist people, eager to fit in with whatever ridiculous managerialist mantra rules the roost, living in perpetual fear of a situation that others would welcome. Such groups become reinforcing – once they dominate a party like the ALP, the political leadership ‘populates the map’ with mirror-men and women.

Avoidance of reality, he suggests, was the dominant mode of apprehending the fires.

Is Rundle right? Could it be the case that state governments, denuded of any real responsibility for things that matter, have become the ultimate domain for what Max Weber called “the administration of things”? That state politics has become the sphere of petty partisan politics, not a vehicle for realising a collective will? And, if so, what should we do about it?

Some Coalition MPs have suggested that this plan came about so suddenly because Abbott had become privy to private party polling.

I strongly suspect that the Labor Party might have had a bit of a turnaround – perhaps related to the National Curriculum and health, and Abbott might be responding to that. It could also explain why he felt he had to release some ‘positive policy’. It could well be that his negativism has had an impact; I note that Labor Ministers have been reiterating the ‘Senate obstructionism’ line again this morning.

In short, on where the parties actually stand, one shouldn’t believe what one reads in The Australian.

Meanwhile, whether or not Abbott makes health a focus of his parliamentary attack, the Premiers continue to ponder the National Health and Hospitals Network. Kevin Rudd has wrought his own ambush, confident that there’s no political skin to be lost picking a fight with the states on this battleground. But that doesn’t mean that some of the Premiers haven’t been posing some good questions – interestingly, probably more from Kristina Kenneally than John Brumby.

And while the headline politics might have been the primary focus of media attention, some good work continues to be done on analysing the policy itself. I’ve posted some salient links over the fold.

Health academic James Gillespie authored a comprehensive piece for Inside Story, while the Centre for Policy Development has a veritable plethora of analysis: John Menadue on governance, Ian McAuley on what the PM still needs to tell us, Fiona Armstrong on the meaning or meanings of ‘local’, and Jennifer Doggett on out of pocket expenses.

There’s more than enough fodder for a very healthy debate on Rudd’s initiative.