Tuesday, 25 November 2014

Looming Poll Victoria

The possibility that Labor might win next weekend's Victorian election is more worrisome than usual. There are two aspects which could set an unhealthy precedent for Victoria and maybe later for NSW Labor – which has a former union boss as its leader who will be contesting next year's NSW election.

The first is the CFMEU's control over Victorian Labor and its record of intimidation, thuggery and links to unsavoury individuals. With Labor using its numbers in the Senate to protect the unions and the CFMEU running Victoria, no one should be in any doubt that union militancy could be difficult to handle. We have had this problem before in the 1970s and 1980s when militant union behaviour was a major concern of key trading partners like the Japanese and Koreans.

The second is the declared policy of Victorian Labor leader Daniel Andrews to tear up large infrastructure contracts. A government decision to refuse to honour legally enforceable contracts is clearly a case of sovereign risk.

Regardless of the fact that polls suggest Labor is just ahead I still find it hard to believe that the Victorian Coalition will lose. The idea that Labor is going to win seems contrary to common sense. Then again, I never thought that Jeff Kennett was going to lose either back in 1999.

Premier Denis Napthine is a good man: the polls show he is well liked by the electorate; he has been a solid and dedicated Premier. There have been no real scandals despite the determination of many in the media to find some; he has sensibly managed the State's finances and wisely promoted Michael O'Brien as Treasurer; his infrastructure proposals will be good for Victoria and his key Ministers are streets ahead of Labor's union hacks.

In contrast, it's hard to see what Labor offers and its record when last in office was poor. Victorian taxpayers will be paying for Labor's mothballed desalination plant for decades, Labor's main policy seems to be 50 railway crossings to improve traffic and Andrews is the most left wing leader Labor has ever put up in Victoria. Andrews was anointed by the hard line CFMEU and he now turns a blind eye to the ongoing thuggery and intimidation which is the well-known trade mark of his CFMEU sponsors. The CFMEU is an embarrassment to Andrews but he can't do anything about it. And CFMEU supporters are becoming more brazen than ever; so much so that only a few days ago, the Melbourne Herald Sun reported that "Underworld figure Mick Gatto has told Opposition Leader Daniel Andrews not to break links with controversial CFMEU John Setka". When a political figure is getting advice from people like Gatto it's obvious Labor has a big problem with its choice of mates.

Andrews has said that a CFMEU member will be the new Planning, Major Projects and Infrastructure Minister. Mr Andrews sees no conflict of interest in his Minister's close association with the CFMEU despite the fact that the CFMEU is inextricably involved in his portfolio. Or maybe he has been told to turn a blind eye. Or maybe he is too weak to stand up to the CFMEU. Either way his position is scandalous.

In addition, Labor has publicly confirmed that it will break existing contracts for the East West road project despite the fact that the proposal has strong public support (around 60 per cent in recent polls). The combination of CFMEU cabinet influence and a diminution of Victoria's reputation on sovereign risk will be a blow to Victoria.

The third risk of a Labor government is that it would be a big spender as were the recent Labor governments of Steve Bracks and John Brumby. The facts speak for themselves, as reported by the Menzies Research Centre using ABS and other publicly available data.

Under Bracks and Brumby, the number of public sector employees grew by 52.4 per cent compared to the population increase of 16.7 per cent. By comparison, Labor governments in NSW from Carr to Keneally increased the public sector by 25.69 per cent.

Over the same Labor period, the average annual increases in wages were 7.7 per cent for Victoria and 6.2 per cent for NSW under Labor. By comparison, wage growth with Coalition governments was 3.3 per cent under Greiner, Kennett wages expenditure actually fell by 1.7 per cent and the John Howard increase was a mere 0.6 per cent.

And if you thought that the extra public sector workers were there to boost front line services, you would be wrong. From 2001 to 2007, when Labor was running nearly all the state governments, the ABS classification of "government administration" increased by 8.5 per cent compared to education (2.5 per cent) and 2.3 per cent for health and community services.

Victorian Labor has become too close to the CFMEU and tearing up contracts cannot be acceptable for either Liberal or Labor voters in NSW or Victoria. If Victorian Labor loses, on these two issues particularly, they will deserve what they get.

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