Thursday, April 16, 2009

Standby For An Early Election

Standby for an early election. The federal government has decided to make a second attempt at introducing its controversial alcopops tax after it was shot down by Senator Stephen Fielding siding with the opposition to vote against it. At the time, the Coalition opposed the tax on the basis that it was a revenue measure masquerading as a health policy, and would not achieve the stated aim of reducing binge drinking, particularly among young people. Senator Fielding, on the other hand, was in favour of the tax, but insisted that it should be a part of a larger suite of measures including a ban on alcohol advertising on television during sports events.

What makes the decision to try again surprising is that nothing has changed. The opposition still opposes it, and Senator Fielding says he will vote against it again if he doesn’t get what he wants. At this point it appears that the government hasn’t changed its position either so there is no reason to expect a different outcome the second time around. Unless the government intends to negotiate further, and possibly give in to some of Senator Fielding’s demands, it is hard to know just what the government expects to achieve.

Certainly, presenting the legislation again provides an opportunity for all parties to reconsider their positions, but at this point that seems most unlikely. It also provides the government with more ammunition to depict the opposition as being obstructionist, pointing to the long list of government initiatives thwarted by a hostile Senate. In fact, the government is already plying this line for all it is worth. But more significantly, if the legislation is rejected a second time it provides a potential trigger for a double dissolution election.

Wayne Swan has said that if the opposition blocks the legislation again it amounts to Malcolm Turnbull “loading the gun” for an early election, but that the government has no intention of firing it. No doubt that is true for now, but the mere fact that the trigger becomes available elevates the political stakes. While it is most unlikely that the government will use a contentious alcohol tax as grounds to call an election, the ability to do so at short notice places renewed pressure onto the opposition, particularly when it is considering all future government proposals. If the opposition votes to block any new measures the government may seek to introduce later this year, it is possible that the government might choose to pull the election trigger.

Timing is also an important factor, with some evidence to suggest that the economy is likely to get considerably worse before it gets better. In that light it is possible that calling an early election in the second half of this year before the unemployment figures become too much worse might be seen as preferable to waiting for the scheduled 2010 election. If the economy hasn’t turned the corner by then, it will be much easier for the opposition, and the voters, to pin the blame on the government. But going to the poles this year, on the basis that the opposition is blocking attempts to deal with the economic mess, would make a lot of sense.

While the debate about binge drinking is an important one, it should be obvious that adjusting the price point by increasing the tax is not in itself a measure that will solve the problem. Price pressure can be one component of a larger campaign to deal with alcohol issues, but by itself won’t stop binge drinking. The simple fact is that individuals who are determined to go on a binge will do so anyway, regardless of the price. While there is some truth to the argument that one step forward in the fight against alcohol related harm is better than no steps, there is also a lot of truth in the suggestion that the government needs the revenue to help the budget bottom line. Of course there’s no reason why you can’t have both the revenue and a campaign against binge drinking, but the evidence suggests that the government is also keeping its options open for an early election.

Even though the government insists that it has no intention of pursuing that option, the right combination of circumstances could well see them reconsider that position. As unemployment becomes worse, don’t be surprised if the government seeks to renew its mandate in the second half of this year.

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