Losing is Lucrative

It turns out that losing an election can be financially rewarding. Ex-prime minister John Howard will get an annual pension of $345,000 a year in retirement. This is around $15,000 a year more than he earned as prime minister. He also has the option to take a $1.5 million lump sum payout, and get a reduced pension of about $170,000.

Another person who has turned making money out of losing elections into an art form is the former One Nation party leader, Pauline Hanson. She looks likely to achieve the 4% share of the Queensland Senate vote required to get electoral funding for "costs". In 2004 Hanson got $200,000 to cover the costs of her failed Senate campaign which cost just $35,426 - netting her a profit of around $165,000 for nominating and running a low-budget election campaign for less than two months. This time she is likely to make even more out of losing the election. Of course, if she'd won she would have received this funding and had a well-paid eight year term in the Senate.

Copyright Enough Wealth 2007

Australia goes Left and Green

Labor has won a clear majority in yesterday's election - counting of postal votes is still likely to decide a couple of seats that are in doubt, but it looks like the new Prime Minister Mr Rudd will have 86 or 88 seats, giving a majority of around 11. It turned out that Labor won more seats in QLD than I had expected yesterday evening, and the Liberals didn't win any seats from Labor in WA.

A plot of majority (as a percentage of total seats) for all post-war Australian elections is quite interesting. As you can see below, yesterday's result is the best Labor has had since the first win by Bob Hawke back in the early 80's. It's big enough that Labor is likely to have at least two terms in office, which probably explains why Mr Costello has decided not to contest the leadership of the Liberal party.



As I've said previously, the policies announced during the election campaign were fairly mild. It will be interesting to see what surprises may turn up in the first Labor budget next May. Labor appealed to the green voter more than the Liberals, with promises to ratify "Kyoto" and be more pro-active about setting 'aspirational' greenhouse gas emission targets. It will be interesting to see how this pans out in the longer term, as Australia is largely dependent on coal-fired power stations and exports a lot of coal. Labor has a reasonably strong anti-nuclear policy, which means that Australia won't be getting any nuclear power generation capacity in the foreseeable future. However, their policy to not expand on uranium production for export may conflict with the increase in the use of nuclear power in SE Asian countries and China.

It will also be interesting to see how Prime Minister Rudd handles the withdrawal of combat troops from Iraq next year, while leaving anout 2/3 of the troops there for embassy security and "support" roles. The ALP is also going to keep the Australian tropps in Afghanistan, which may become the next foci of anti-war protestors in Australia. In recent weeks there have been several Australian servicemen killed in Afghanistan, and the latest fire-fight seems to have also killed some Afghan civilians. Next election we could see the "No War" protestors targetting the ALP, just as in the UK.

Copyright Enough Wealth 2007

Labor Wins Australian Election?

Looks like the opinion polls were correct and the Australian Labor Party will win today's Federal election. Counting hasn't produced figures for WA yet, but the results from NSW and QLD look like the ALP will win enough seats to form government. I'd guess the ALP will end up with a small majority of only 2-5 seats.

The published policies of the two parties were pretty similar, apart from withdrawal of combat troops from Iraq and unwinding of the "work choices" legislation by Labor if they win. However, the big risk is that with the economy growing strongly, unemployment at 4% and inflation heading above 3%, an ALP win will result in a wages break-out, which will boost inflation. This will in turn require larger interest rate rises by the RBA. If this ends up coinciding with a global slow-down (lead by the US) it could mean Australia has it's first recession for more than ten years, and unemployment heads back up again. Unfortunately Labor policies to boost productivity by increased spending on skills training will take longer to have any impact than would the removal of Work Choices and a resurgence in union campaigns for wage rises. We'll see how things work out over the next three or four years. If Labor ends up with a slim majority and the economy runs into troubles during this period we could end up with a one term Labor government.

Copyright Enough Wealth 2007