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From the Desk of the Executive Director

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.

The weird world of global politics

Saturday, January 10, 2015

The era of weird, unpredictable politics seems to be well upon us. This is happening even though people claim they want stability and rationality to prevail.

Take just one situation. At the federal level, Clive Palmer’s party has split after less than six months in the Senate. The investigation of Palmer’s alleged fraud against China’s largest company continues to go badly for him. The Palmer Party’s electoral support has crashed. Given this experience, you’d think that voters would rush to support either of the two major parties if stability is wanted.

But no! Voters are hedging their bets in big ways.

The Victorian state election in November saw a one-term government kicked out. This was a government committed to governance probity -- with the best economic credentials of all state governments -- yet they lost.

Perhaps it’s because of the corrupt unions that the voters chose not to give Labor control in the Victorian Upper House. But they didn’t give control to the Liberal/Nationals. Instead almost a third of Upper House seats went to minor parties consisting of The Greens, Nationals, Shooters and Fishers, Sex Party, Local Jobs and the right-leaning Democratic Labour Party. It’s big mix of interests.

This wide diversity in Victoria reflects the Senate diversity that takes in Family First, the Liberal Democratic Party, the Motoring Enthusiast Party and others based around personalities.

Australians have always voted for independents where Upper Houses exist but not for a hundred years on this scale.

This same sort of diversified split is not just an Australian occurrence. The UK House of Commons no longer has a two-way dominance. The Tories govern in coalition with the Liberal Democrats (who fiercely retain their own identity) and with Labour as the opposition. But the Democratic Unionists, Scottish Nationals, Sinn Fein, Welsh party, Social Democratic and UK Independence Party among others all have reasonable numbers of MPs. The representations along historical geographical lines are perhaps expected but still the overall picture is one of increasing political diversification.

The most recent example of eye-popping political unpredictability comes from possibly the wealthiest location in North America, the Canadian province of Alberta.

Just before Christmas, the leader of the official opposition took most of her party across the floor of parliament to join the government. There’s essentially no functioning opposition party left in Alberta.

Known internationally for its oil wealth and premier ski resorts (the Banff area) Alberta has a long tradition of conservative governments. What sets it apart is its low tax rates.

Alberta has a 10 per cent flat province income tax rate. This, combined with a top federal income rate of 29 per cent, means no one pays more than 39 per cent income tax. And there’s no provincial retail sales tax and no payroll taxes. It makes Alberta just about the lowest taxed location in North America.

The result is that Canada’s high-wealth individuals invariably live in Alberta and base their North American business interests there. This ‘province for business’ has a centuries long tradition of ‘managerial’ government with consensus on what needs to be done. Oppositions have been weak.

But for some years the Wildrose Party, named after the province’s official flower, was giving Alberta’s Progressive Conservative government a good push. However the canny Premier Jim Prentice aligned with many of Wildrose’s policies, neutering the opposition’s reason for being. The government has undertaken to strengthen property rights, prioritise infrastructure projects and reform municipal government amongst several measures.

The Wildrose defection has stunned its private sector backers, let alone everyone else in Canada. Who knows what’s around the corner next.

This ‘weirdness’ of politics, however, is more a return to a ‘normal’. During the industrial revolution, the principal intellectual forces influencing the emerging democratic-based politics of the 18th and 19th centuries were capitalism, socialism and romanticism. These divergent influences pulled politics in unpredictable directions.

During the 20th century, particularly the second half, we became comfortable with politics being dominated by two-way global and local battlegrounds between capitalism and socialism. That ended with the fall of the Berlin Wall.

Romanticism has essentially reemerged in the form of the green movement. Socialism seems ‘dead’ but not in the minds eye of true Left-believers. Capitalism, or more accurately, ‘free marketers’, struggle to put an emotional attachment to their message.

This, pulling in many directions, has opened the door for multiple special and single interest groups to attract support.   

What’s now the new ‘normal’ is unpredictability in politics. Expect the unexpected.  

[First published in Business Spectator, January 2015]
Comments
Juel Briggs commented on 11-Jan-2015 09:49 PM
That's a very interesting article, Ken.

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