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Ken Phillips is co-founder and Executive Director of Independent Contractors of Australia. He is a published authority on independent contractor issues and directs research on related commercial and trade practices issues. Through his numerous articles in newspapers and think-tank and academic journals, Ken is known for approaching issues from outside normal perspectives and is frequently sought out for media comment.

How Napthine could get back on track in Victoria

Saturday, March 22, 2014

After nearly four years of being behind in the polls, there are early signs that the Victorian government could be turning around its electoral fortunes. Due to go to election this November, the government has in fact been behind in the polls since unexpectedly winning government in late 2010.

To combat the fall in popularity, the Liberal Party tried changing its leader, dumping Ted Baillieu a year ago and replacing him with Denis Napthine. But this has had little success, and Labor leader Daniel Andrews is already behaving as a premier-in-waiting.

One reason Labor has traditionally fared well as a political force in Victoria (and Australia) is its superiority in controlling the political narrative. Labor pontificates against the (alleged or real) bad deals ordinary people have to put up with, which always strikes home with a big percentage of the Australian electorate.

Part of the problem for the Coalition parties is that they almost seem intent on accepting Labor’s accusation that they act in the interest of big business. This is a fatal political flaw.

The Coalition’s pitch is that it is a better manager than Labor, but this only works while memories of poor Labor management remain clear in the electorate’s mind. And Labor governments also have a history of good management.

So where does this leave the Coalition parties?

In Victoria, the Coalition government has been pushing hard to try to appear as having good management skills. It’s had very little narrative other than this point, with the focus on keeping the Victorian budget in surplus and retaining the state’s AAA credit rating. While it’s the only Australian government currently successfully achieving this, it’s been at the expense of popularity among the electorate.

The Victorian government has clashed with teachers, police, nurses and ambulance drivers over pay deals, and in return the unions have run hugely effective campaigns accusing the Coalition of being uncaring and cold. More than anything, these long drawn out industrial battles have electorally damaged the government. The Coalition will be hoping that voters’ memories are short, since most issues are on their way to being resolved.

But there’s one area that’s shaping up to be the central issue for the November 2014 Victorian election: transport infrastructure.

The Coalition has been held back on infrastructure because it inherited a massively costly construction sector from Labor. The Victorian government was the first in Australia to recognise that an unholy alliance of unions with large construction firms was blowing out construction costs and state government budgets.

For example, the Victorian desalination plant built under Labor, should have cost around $2.2 billion on the evidence. But it’s valued in the government’s budget papers at $5.7bn, reflecting its actual construction costs.

Determined to do something about this, in 2012 the government introduced a code covering government tender work that limits the ability of big business and unions to collude.

To the public, this was technical and boring. Then the construction unions won a court case effectively neutering the code, but just 2 months ago, the governments successfully appealed this in Federal Court, which Robert Gottliebsen covered. (Construction sweetheart deals face the wrecking ball, December 20.)

This changed everything. Suddenly the Victorian code has been brought back into play, with solid legal backing that will see tight budget controls on infrastructure development.

The Napthine government’s big infrastructure pitch has been the $6bn East-West Link road tunnel project. Without the construction code, the big risk was that a cost blowout could turn the project into a desalination plant style disaster.

But more than this, Labor has been effectively using its radical Green/Left union ‘community’ connections to portray the East-West Link as favouring ‘big business’ and being anti-community. Its campaign calls for “trains not cars”.

Up until now, the government has been mute in countering this. Not any more.

A week or so ago, Premier Napthine announced a $2.5bn spend on new trains, railway stations and separating road from rail at key bottleneck intersections (see below). There’s probably more of this to come. Labor’s response is that this is only happening in Coalition seats, but that makes Labor look narrow-minded.

After announcing this huge spend, Napthine appeared on Jon Faine ABC’s radio talkback show. In Melbourne, Faine is Labor’s most important media/political asset. Napthine has previously had difficulty handling Faine’s sharp questioning, but that certainly didn’t happen last week. Instead, he flashed back at Faine with clear, incisive, confident responses showing detailed knowledge of all issues. The Premier was in control.

Here’s the emerging electoral narrative: the Napthine government is the only Australian government with its budget under control. Because of this it can now proceed with an integrated transport plan: better roads, better rail, responsible budget. How well the government communicates this will determine its electoral outcome in November.

[First published in Business Spectator, March 2014]

Summary of Victorian government’s announcement, 6 March 2014

Four level crossings in Melbourne’s southeast will disappear and 25 new and bigger trains will ease overcrowding as part of a $2-2.5 billion election year cash splash.

The Napthine Government's plan, which would eventually see every level crossing removed between the city and Dandenong, will also upgrade archaic signalling systems so 18 train services an hour can run during peak times.
  • A $2-2.5 billion upgrade of the Cranbourne/Pakenham lines
  • Includes 25 new trains that can carry 20 per cent more passengers
  • High capacity signalling upgrades to allow trains to run quicker and more frequently
  • An extra 4500 people able to travel on Cranbourne/Pakenham lines in peak hour
  • Four level crossing removals along the Cranbourne/Pakenham lines
  • Planning work on an extra five extra level crossing removals
  • Stations to be rebuilt at Clayton, Murrumbeena and Carnegie
  • A new train maintenance depot at Pakenham East
  • More than 3000 jobs during construction phase
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