I am delighted to publish this guest post on the fixed four-year terms referendum in Queensland from my old friend and former Treasury colleague Joe Branigan. These are Joe’s views and should not necessarily be attributed to me. GT
The fix is in on fixed four-year terms
The fix is in on fixed four-year terms in Queensland – politicians, political staffers, senior bureaucrats, and those academics, businesses and consultants that largely live off the taxpayer will all benefit directly from a yes vote in this Saturday’s referendum on fixed four-year terms.
The political class is asking us for a 33.3% extension of their contracts (from 3 to 4 years) regardless of their performance. A yes vote means that parliamentarians and their hangers-on will get four years on a great salary without a performance appraisal – not bad work if you can get it. Ahh, but there will be more certainty because the election date will now be fixed. So politicians can spend your money with more certainty because you can’t hold them to account as often. And look, as a bonus, you’ll even save some money not having to evaluate their performance as often.
The argument from Labor, the LNP and everyone else in the political class (except the Katters to their credit) is self-serving and dangerous.
First of all, the single-question referendum is fundamentally flawed because it is asking two separate and quite distinct questions. One, do we want fixed terms or not? Two, do we want four-year terms or three-year terms? These questions should be considered separately, not as a single omnibus question – if people answer yes on Saturday, what exactly are they saying yes to? The issue of fixed terms and the length of terms have been purposefully mixed up to trick voters into voting yes.
The Attorney General Yvette D’ath and her shadow Ian Walker went on a road trip this week spruiking their best arguments for extending their contracts by one-third – undoubtedly with more chutzpah than a Donald Trump rally. D’ath argues that “fixed four-year terms will provide greater certainty for the business community and the Queensland economy”. Is D’ath referring to the business community that feeds off government contracts or the business community generally? I am certain that the latter simply wants good government – sensible regulations, value-for-money service delivery, affordable infrastructure, and low public debt. But with four-year terms, a bad government in its third year will likely freeze private sector investment and hiring as business chooses to wait it out until after the next election. With shorter terms, less damage is done to the Queensland economy.
And, with flexible terms, there is an equal likelihood that a bad government will call an early election to ‘save the furniture’ than there is that it will hang on for a glorious annihilation. Fixed terms are too risky without recall provisions – remember the disastrous Iemma-Rees-Keneally Government in NSW that ran full term because the election date is fixed.
D’ath also argues that “fixed four-year terms provide more certainty for all Queenslanders and takes the politics out of choosing an election date”. But this is an argument for fixed terms, not four-year terms.
And the LNP’s Shadow Attorney General Ian Walker is no better when he argues that “Voting ‘yes’ on Saturday will bring Queensland into line with not only local government in this state but the rest of the country”, because he fails to mention that Queensland is the only state in Australia without an upper house.
Three-year terms in the absence of an upper house to act as a check on executive power are vital to prevent governments from going off the rails. Take the Bligh-Fraser Government. Giving that government another year, with their wrong-headed GFC fiscal stimulus capital program and commitment to 6% per year real public sector expenses growth, would have seen Queensland’s gross debt peak at well above (rather than below) $80 billion and potentially could have led to a further credit rating downgrade. The fiscal mess that the LNP Government might have inherited would have been far worse and required far more drastic expenditure restraint.
Some argue that four-year terms are better than three so that good governments can get on with the job. But there is no guarantee whether incoming governments will be good or bad. And the costs of a bad government going an extra year are far greater than the benefits of a good government going an extra year. In our modern market-based economy, there are no miracle reforms left that might immediately, significantly and enduringly increase living standards (public policy reform now is a long hard incremental slog), but there are plenty of disastrous policies that a bad government could adopt that would send productivity falling and unemployment rising. In other words, the risks to Queensland taxpayers are asymmetric and it is, therefore, more important to end bad governments early than to prolong good ones for an extra year (especially given good governments are likely to be re-elected anyway).
It is madness to give the political class access to a further $60 billion dollars (which is the size of the Queensland Budget) to spend in ‘year four’ without holding them to account for the $180 billion already spent over the three years since they were last held to account at a state election.
The single omnibus referendum question should have been separated into two distinct questions to foster an honest debate about political accountability in Queensland. In the absence of an upper house, we should hold politicians to account every three years. And, in the absence of recall provisions, we should maintain the flexibility of variable terms. Vote NO on Saturday.
Joe Branigan is an economist and former regulator at the Queensland Competition Authority
Queensland Economy Watch 