This election is one of the worst I've seen

How are you going with the election? Are you getting a lot out of the debate, seeing the big issues canvassed and making up your mind who’ll win your vote?

It’s not as if the choice isn’t clear: do you want to wait 15 months for a permanent tax cut of $5 a week, rising to $10 a week a year later, or would you be eligible for a $1200 once-only tax cut in July 2026, plus an immediate one-year cut of 25c a litre in the price of petrol?

If that’s not enough to seduce you, there’s more. Anthony Albanese will cut the price of draught beer by 5¢ a glass for two years or, for small businesses, Peter Dutton will make entertainment expenses tax-deductible (conditions apply).

But you may want to judge it on the character of the leaders. Again, the choice is clear: do you want the controlled, experienced hand of Albanese, who’ll never do anything rash, whose goals are modest and whose motto is “steady but slow”? Got a problem? He’ll think about it. If you want a prime minister who’s on everyone’s side, Albo’s your man.

Or do you want tough cop Dutton on the beat, always quick on the draw and ready to protect us from the threatening world we live in? He’s heard of a supermarket worker who’d had a machete held to her throat. That won’t happen to you on Dutto’s watch.

And it’s not as if the campaign so far hasn’t been action packed. We’ve had Albanese falling off the platform at an election rally, then denying it. We’ve had Dutton joining a kids’ football game and hitting a cameraman in the forehead.

What would a campaign be without seeing pollies in safety helmets and high-vis vests on TV every night? Or at a childcare centre, showing how human they are and what good fathers they must be whenever they can make it home?

What’s new this time is Greens leader Adam Bandt taking a big red toothbrush with him to TV interviews (must have some meaning I’m missing) or his colleague waving round a bleeding headless salmon in the Senate.

What’s that? You don’t think much of the election campaign? It’s been neither interesting nor edifying, and hasn’t got to grips with the big issues?

Well, I agree. I think both sides are treating us like mugs. Maybe like the mugs many of us have allowed ourselves to become.

In my 51 years as a journalist, this is the 20th federal election campaign I’ve observed at close quarters, and I’m convinced they’re getting worse: more contrived, manipulative, transactional and misleading, and less focused on the various serious problems facing us, which are far greater than they used to be, and now include America’s abdication from leadership of the free world.

In short, election campaigns have become dishonest, aimed at tricking us into voting for one side rather than the other, using trinkets to distract us from the bigger issues that neither side has thought much about nor has any great desire to tackle.

I know that’s easy to say for an oldie like me (77, since you were too polite to ask). “It was much better in my day.” But though things weren’t great in the old days – we’ve never been a paragon of Socratic debate – I think they’ve got worse over the years, and I’ll try to show how they’ve got worse and explain why.

But I must say this: even if things in Australia have got worse, they’re not as bad as they are in many other countries, particularly the US. Nor are they ever likely to be.

Three things protect us from other countries’ decline. First, compulsory voting, which forces everyone to register a choice and pay at least some degree of attention. Second, preferential voting ensures the person who wins is the one most of us prefer.

And third, an independent electoral commission which regularly increases the number of electorates and redraws boundaries to ensure there’s roughly the same number of voters in each, and these have boundaries that aren’t gerrymandered to give one side or the other a built-in advantage.

This is in marked contrast to the US, where each state government determines its own federal voting arrangements. Their gerrymandering ensures they have very few marginal electorates, whereas we have a lot. And we don’t have voting arrangements designed to disadvantage certain classes of voters, such as racial minorities.

So we shouldn’t complain too much. Even so, our election campaigns have changed over the years, and not for the better.

They’ve changed because the voters have changed – Gen Z seems a lot less interested in conventional politics than we Baby Boomers were at their age, when there was so much disapproval of Australia’s part in the Vietnam War, and so many young men (including me) hoping not to be conscripted.

Another important source of change is technological advance, particularly the effect of the information revolution, which has armed the parties with greater knowledge of voters’ views, and changed the media by which politicians reach out to voters.

Finally, the political class’s changing aspirations have affected the way campaigns are run. In the olden days – even before my time – politicians used to travel round, visiting key electorates and talking to voters. They’d do this at evening public meetings or, during the day, from the back of a truck in the main street.

But the advent of television changed all that. While local politicians and their supporters may canvas their electorates door to door, most contact between the party leaders and the voters occurs via TV.

These days, leaders still visit marginal seats around the country, but what they do during the day is aimed at producing the colour and movement that will get them a spot on the evening TV news – hence helmets and high-vis.

They’ve worked up a list of promises to announce, and they (and their media entourage) go somewhere vaguely relevant to deliver the announcement. Guess where they go to announce a change in childcare?

A big advantage of this is that their busy day ends late afternoon, once the TV news camerapeople have got what they need for this evening. Then the leaders can go to a fundraiser, appear on a current affairs program, or get an early night.

Trouble is, though the pollies haven’t changed their routine, the evening TV news bulletin isn’t nearly as universal as it was. When there were only four channels, all airing their news at the same time, if you wanted to watch telly while you had dinner, you couldn’t avoid the nightly news bulletin.

Now the proliferation of TV choices makes it much easier to avoid the news, which many do. The parties have started using social media to spread their messages, but this makes it harder for the rest of us to see what they’re up to.

As the proportion of people who don’t follow the news – and aren’t much interested in politics – has grown, the parties have had to reach them via advertising. They now spend a fortune on TV ads, with far fewer ads in print and on radio. My theory is that, for the many people who don’t follow politics but know they’ll have to vote, they do their last-minute homework by remembering the TV ads they’ve seen.

But advertising works by appealing to our emotions, not our brains. Don’t explain the details, just make me feel nice – or angry. The parties know negative ads – attacks on their opponents – work better than positive ones (“you’re gonna love my policies”), which is hardly a boon to the democratic process.

This is what has made fear campaigns – misleading people about how badly they’d be affected by the other side’s planned changes – so fearfully effective. And the increasing resort to fearmongering is a major way by which election campaigns have become less informative and more misleading.

So it’s not just the way the mechanics of campaigning have changed. More importantly, it’s the way what’s said has changed, and the way the politicians’ objectives and behaviour have changed.

Politics has become more professional. In former times, politicians tended to be men (yes, almost all of them men) who turned to politics after a career as a lawyer, businessman or union official. They’d wearied of making money and decided to spend the last part of their working life fighting for a cause.

I’m sure personal ambition has always been a big motivation for getting into politics, but in those days, it came mixed with a strong desire to make the world a better place. These days, politics has become a career path you follow for most of your working life.

When young people are interested in politics and would like to make a career of it, they get started as soon as they leave university, taking a job working for a union, or in a minister or opposition minister’s office. The number of people working in ministers’ offices has grown considerably during my time in journalism.

It started in the Labor Party, but then the Liberals joined in. You work your way up the ladder, first aiming for preselection as a parliamentary candidate. Once you’ve made it into parliament, you work towards a job as a minister or shadow minister, then see how far you can make it towards the very top.

Such a career path teaches you a lot about how the political game is played, but not much about how government policies work best in the interests of the public. It tends to replace any initial idealism with pragmatism and cynicism. It tends to feed ambition.

These days it’s rare for politicians to enter politics later in life. Two exceptions were the Liberals’ Dr John Hewson and Malcolm Turnbull. Both were hugely intelligent, and both cared about good policy, but both had trouble playing the political game at the professional level and didn’t survive at the top. Labor’s exception was Bob Hawke. His great success at the top came from all the politics he’d learnt while rising to the top of the union movement.

So when the barroom experts assert that most politicians care more about their personal advancement than about doing good things for the nation, I’m inclined to agree. As someone famous once said, “by their fruits ye shall know them”.

The professionalisation of politics is a main reason that what’s said and done in election campaigns has changed, but another reason is that politics has become more scientific. In former days, politics was played by ear. Pollies decided what voters liked and didn’t like from what the voters they met said to them, then used their own intuition to fill in the gaps.

These days, the parties spend a lot of money conducting private polling, not just of how people intend to vote, but what issues are more important to them at present. They also use carefully selected focus groups to get ordinary voters expressing their views on particular issues.

When someone says something and everyone round the table says “yes, that’s right”, the professionals running the group take note and pass it on to the pollies for them to use. Or it can work the other way: the pollies and their people think of lines to help sell a policy measure, and they’re tried out on appropriately chosen focus groups. What goes over well gets used in public utterances.

Between the careerism and the carefully gathered knowledge of what voters think, election campaigns have become more contrived. We’re transported to a fantasy land, where everything is nice and nothing is nasty (except the bad guys on the other side).

The pollies never try to tell a voter something they don’t want to hear. They never tell a voter they’re wrong about anything, and seem to go along with anything you may say, no matter how silly.

Have you noticed the way politicians expect us to be – and encourage us to be – completely selfish? It simplifies their job. They tell us what they can do for us and our families, never what we should be agreeing to in the interests of the country.

And the more they talk about doing this little thing or that little thing for us – the more they make following elections good preparation for a trivia quiz – the more they avoid having to talk about a host of big but controversial issues: climate change, the environment versus jobs, AUKUS, school funding, online gambling and even uninsurable homes. Of course, I couldn’t swear the media had played no part in dumbing-down election campaigns.

The pollies always tell us about the various nice things they plan to do to make our lives better, and never tell us of the not-nice things they’ll have to do to improve our lives. In election campaigns, every player wins a prize.

Not so long ago, a big part of elections was pollies being pressed to tell us exactly how much their promises would cost and exactly how they’d be paid for.

But doing that is what caused Labor’s Bill Shorten to lose the 2019 election he was expected to win. He had some expensive promises, but spelt out some small tax changes that would cover their cost.

These changes had been carefully selected to hit only some well-off people who could afford the loss, but the Libs ran a scare campaign telling ordinary punters they’d be hit and, with the effect magnified by a lot of yellow and black ads paid for by some fat Queenslander, Shorten lost enough votes to cost him the election.

The trouble here is that politicians on both sides have broken so many promises and said and done so many tricky things for so long that many voters have concluded they are all liars. This is why so many people have stopped listening to them.

But there’s one exception. The only thing a politician says that the doubters are prepared to believe is that their opponents are not to be trusted because they’re out to get you. “Ah yes, ain’t that the truth.”

That’s why scare campaigns have become the currency of election campaigning, with stultifying effect.

And that’s why the 2019 election has made elections and their campaigns much worse than they were. Under Albanese, Labor vowed never to be caught like that again. He made himself a “small target” at the 2022 election, promising to do very little, and not to do many things: introduce new taxes, increase existing taxes, and cancel or change the already legislated stage 3 tax cuts.

Apart from the latter, he’s kept those promises. He’s been a small-target prime minister, doing as little as possible to tackle our many problems, which is why so many of us are so uninspired by his performance. It’s far too risk-averse.

A leader who’s not game to do anything unpopular – such as putting up taxes – is a leader who’ll never make much progress solving our deeper problems, like giving our youngsters a fair shake, and never improve the future they profess to care about so much.

Trouble is, under our two-party system, when one side takes a position, the other side almost always copies it. We get less choice, not more. So when Albanese decides it’s safest to stay small target, Dutton stays small target.

When ditto Dutto keeps changing his policies mid-campaign, we’re watching him learning on the job not to be daring, not to fix things and, above all, to be only superficially different from the other side.

The big change since the 2019 election is that neither side will ever have the courage to propose any kind of tax change that would have some people paying a bit more – even those who could easily afford it. The tiniest possibility of an increase for some, and the fearmongers on the other side will soon have taxpayers throughout the land shaking in their boots.

This has taken the election-campaign fantasy land to a whole new level of unreality. The laws of economics have been suspended for the duration of the campaign. Government spending can only ever go up, while taxation can only ever go down. The budget deficit is presumed to be unaffected, covered by a sign saying Don’t You Worry About That.

Surely you remember the days when campaigns devoted much attention to “what do your promises cost and how will you pay for them?” That’s what tripped up Labor in 2019 and, I confidently predict, Dutton won’t let trip him up now.

Some worthy souls in the media keep lists of what the promises have cost and demand a detailed account of how that cost will be covered, but the two sides just brush them aside. They’re in tacit agreement not play that game any more. In truth, both sides will add to deficit and debt.

The other way to look at all this is that, by their poor behaviour – government by scare campaign – the two sides of politics have fought to a standstill. Neither side is game to do anything about any of our big problems for fear of the lies this would allow the other side to say about them. Now, I know what you’re thinking: “OK, Ross, if you’re so smart, what’s the solution to the mess election campaigns have got into?”

The good news is, the nation’s voters are already working on the solution. So many people have lost faith in the two sides of politics that the proportion of people voting for the two majors is the lowest it’s ever been.

In the 2022 election, the share of first-preference votes going to the minor parties and independents rose to almost a third, with the remaining two-thirds shared roughly equally between Labor and the Coalition. We saw the Libs losing seats to the teal independents, and the Greens winning more seats in the lower house.

I’m confident the minor parties’ share of the vote will go higher in this election. The experts are pretty sure that, whichever major gets more seats, it will be in minority government, needing the support of enough minors and independents to convince the governor-general it could govern effectively.

Both major parties would like us to believe minority government would mean chaos and no agreement on anything. Don’t be fooled. As we saw with Julia Gillard’s minority Labor government in 2010, the government was stable and passed more legislation than usual.

What changed was that, to get that support and stability, Labor had to agree to put through controversial measures it wouldn’t have been game to propose by itself. Such as? The carbon tax. Minority government transfers some power to the parties and independents who still believe we need real, controversial policy changes to solve our problems and improve our future.

So if you don’t like what the two major parties have done to campaigns and timidity in government, you should share my hope that this election puts neither major party back in majority government.

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Supermarkets: Be polite, say "excessive pricing" not "price gouging"

 By MILLIE MUROI, Economics Writer

They’re the villains that return in every episode of the cost-of-living fight. And despite the competition watchdog swallowing any mention of “price gouging” in its recent inquiry, supermarkets are still copping heat.

They’re an easy target because there’s little competition for places where people have been noticing price spikes more than in the aisles – and checkouts – of their local Coles or Woolworths.

We also know consumers tend to overestimate price pressures. Why? Because eye-popping price rises are more memorable than the deals and discounts we land. Humans are programmed that way because it’s more important for our survival to spot bad things – like a tiger in the trees – than good things, like a warm patch of sunshine.

But eagle-eyed customers were a key reason supermarkets got bitten by the watchdog for their illusory discounts last year, and both Labor and the Coalition know that cost of living is the single biggest issue they have to win voters over on for a chance to form government.

That’s why Opposition Leader Peter Dutton has pushed for powers that would give him the ability to break up the major supermarkets, and Labor has been cracking down with a mandatory food and grocery code and a promise to outlaw price gouging.

But there’s been a key bullet point missing on the shopping list: a clear idea of what “excessive prices” actually mean. One shopper’s idea of price gouging could be vastly different to that of their neighbour – and almost certainly different to that of the bosses of Coles and Woolworths.

Now, the competition watchdog this year released a damning report revealing Australian supermarkets nudged up their profit margins during the cost-of-living crunch and are among the most profitable supermarkets in the world.

But they stopped short of calling Coles and Woolworths out for “price gouging”: a subjective and pejorative term for when businesses increase their prices much more than is considered “reasonable” and “fair” – which are also subjective.

And in their list of 20 recommendations, not once did the Australian Competition and Consumer Commission mention the need to ban the practice.

So, if the ACCC didn’t suggest it, where did the idea come from? And why is a ban on excessive mark-ups on the cards?

Well, it’s another case of Labor proposing a small but worthwhile reform. These ideas have to be ticked off by big-wigs, but the heavy lifting is done behind the scenes.

Pull back the curtains of government, and you’ll find a section of Treasury beavering away under the leadership of assistant minister and former economics professor Dr Andrew Leigh.

The Competition Taskforce, established by the government in 2023, is a response to the increasing concentration of the Australian economy over the past 20 years. It’s made up of a couple of dozen people and Leigh says it’s not just a handful of men with grey beards tapping out once-off reports, which has traditionally been the way economic reform has been put on the table.

Instead, he labels it a “crack team” of about a dozen people, churning out policy advice on an ongoing basis and tick-tacking with stakeholders – in a way that experts tasked to do a single report may not.

While the ACCC has taken the reins on scrutinising supermarkets recently, most memorably through its scathing report, Leigh says the government’s policies have been informed by the taskforce’s previous work in the space, such as the mandatory food and grocery code – aimed at protecting suppliers and farmers – which came into play at the beginning of this month.

And while the ACCC might have shied away from slapping the “price gouger” label on the supermarkets, Leigh says the weight of the evidence suggests there’s a clear problem.

“We’ve seen their margins increase over COVID,” he says. “We’ve got them in court with the ACCC. The supermarkets have not exactly covered themselves in glory over the last couple of years.”

And compared with the last time the competition watchdog probed the supermarket sector in 2008, Leigh says the 2025 inquiry is awash in data. “[The ACCC] has analysed more than a billion prices so they’ve got data on more than a million prices from the two supermarkets, every week, over a five-year period,” he says: something that was unheard of two decades ago.

The availability of information and the ability to crunch and analyse huge amounts of data has given the government confidence to make the call – or at least to take action on an issue they know voters are still eyeing very closely and passionately.

It’s far from an immediate fix. The government’s promise to ban price gouging by supermarkets will first require them to form a new taskforce to give advice on what “excessive pricing” might actually look like.

And chasing the two giants around with a stick doesn’t necessarily remove some of the key barriers to stronger competition in the supermarket sector, such as inconsistent zoning laws which lock out competitors in many areas around the country. While the government has, in principle, agreed with all the recommendations from the ACCC, we’re yet to see follow-through on most of them.

That doesn’t mean that setting out to define “excessive pricing” is a bad thing. It’s one of those concepts that seems obvious but which people still disagree over. And without a yardstick, the supermarket giants – and every other business – know there’s a grey area they can play in and take advantage of.

The government’s latest action on supermarkets is good because it puts Coles and Woolworths on notice. If they are misbehaving or pushing their luck with questionable pricing, the bosses should be gathering at their drawing boards, rethinking their approach and preaching some caution.

If they’re not doing anything wrong, they have nothing to worry about.

Either way, it also puts every other sector on notice – especially given the taskforce’s current work on identifying concentration hotspots: areas of the economy where big firms dominate and competition is especially weak.

And by clearly setting out what “excessive pricing” means, we can more easily deter firms from crossing the line, identify when and where it’s happening and crack down on the practice – and ultimately the prices we pay.

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Energy's a big part of living costs, but fixing it won't be cheap

The voters’ insistence that the election campaign must be about the cost of living has been a godsend to both major parties. They can look as if they’re lowering electricity and gas prices and avoid talking about their failure to tackle climate change.

Unfortunately, however, climate change and energy prices are closely connected – which does much to explain why their promises to cut power prices never mean much.

Voters seem permanently obsessed with energy prices, and they’ve figured in most election campaigns for decades. But it’s mainly been smoke and mirrors.

Julia Gillard introduced a tax on carbon in 2012 and, had it survived, we’d now be well advanced in reducing our emissions of greenhouse gases. Instead, Tony Abbott got himself elected partly by his exaggerated claims about what it would do to electricity prices, then promptly abolished it.

Today, Labor is still a supporter of climate action, with a legislated commitment to reduce emissions by 43 per cent by 2030. But it doesn’t want to talk about it because it’s proceeding slowly, and working both sides of the street by agreeing to new coal mines and gas platforms.

I doubt if Peter Dutton’s Coalition wants to talk about climate change either. They claim to believe in climate action, but their new plan to switch from renewables to using taxpayers’ money to build multiple nuclear power stations is really an excuse for doing nothing until those power stations may be built in a decade or two’s time.

The switch to distant nuclear resolves the Liberals’ disagreement with the Nationals who, being close to the mining lobby, have no enthusiasm for the Libs’ commitment to net zero emissions by 2050.

So, let’s not mention any of that. “You say the high price of energy has worsened your cost of living? Well, have we got a deal for you.”

Everywhere you look in this campaign you see one side or the other promising something to do with energy. Labor promises to extend its $75 a quarter discount on electricity bills for another six months until the end of this year.

The Coalition’s promising to cut the excise on petrol and diesel immediately by 25c a litre for a year. And it’s promising to reduce the wholesale price of gas by forcing gas producers to make more of it available to local users rather than exporting so much of it at high prices. (Gas is the most expensive fuel used to produce electricity, so reducing its local price would make power a bit cheaper.)

This has made the gas producers very unhappy. And Peter Dutton hasn’t provided much detail about how his gas plan would work.

Even so, Dutton has brought to light some truths that successive federal governments haven’t wanted us to know.

We’re always being told there’s a great shortage of gas because the three big gas liquefaction plants in Gladstone have lucrative contracts to export it all. But as Dutton has correctly said, there’s still a lot of it that’s uncontracted and so could be diverted for local use.

One way to discourage those companies from exporting so much of our gas would be to impose a tax on those exports, as Dutton has suggested. This has these largely foreign-owned companies reaching for their lawyers.

We always assume that our exports bring us great benefits. Mostly, but not always. We are one of the world’s biggest exporters of liquified natural gas, but research by the Australia Institute has found that no royalties are paid on 56 per cent of the gas we export.

Why? Because of loopholes in our petroleum resource rent tax.

Getting back to our complaints about the cost of energy, Labor’s always telling us that “renewable energy is incredibly cheap because its fuel [sun and wind] is free”.

That’s true, but misleading. At present, our grid of high-voltage power lines run from the coalfields to big cities such as Melbourne and Sydney. Switching from coal to renewables involves building a whole new network of powerlines running from solar and wind farms.

Building all those poles and wires is hugely expensive, and the cost will be passed on to you and me in the electricity prices we pay. Only when the new network’s been paid off will retail prices be a lot lower.

But this is where Labor has played a smart card in this election with its promise to subsidise the cost of adding a battery to your new or existing rooftop solar panels (and maybe the Coalition will announce something similar).

Some people have rooftop solar because they want to play their own part in reducing greenhouse gas emissions. Some people see it as an investment in reducing their electricity bills. And some people have panels because all the neighbours have them.

Whatever the reason, about a third of all Australian homes have rooftop solar which, on a per-person basis, makes us the world’s biggest rooftop solar country. Many people were encouraged to install solar by federal and state government subsidy schemes.

Obviously, the panels produce more power than you need during the day, and none at night when you have many gadgets running, especially in winter. So most people put power into the grid during the day and take it out night.

But the energy experts don’t really see rooftop as a key part of the complex distribution system they’re running, and sometimes rooftop can disrupt it.

So, although Anthony Albanese’s offer to cover up to 30 per cent – or $4000 – of the cost of buying and installing a home battery strikes me as likely to be pretty attractive as electoral bribes go, it will help reduce pressure on the grid.

True, it’s of no benefit to renters, or home owners who can’t afford the cost of panels or a battery. But it’s wrong to imagine it’s only the wealthy who’d benefit. If you’re really rich, you don’t worry how big your power bill is.

And don’t forget this: the more voters who see themselves as the good guys doing their bit to stop climate change, the more likely our politicians are to lift their game.

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It's official: supermarkets are overcharging. So change the subject

Why does a government release a highly critical report on the conduct of Woolworths and Coles on the Friday before a budget that will lead straight into an election campaign? Short answer: not for any worthy reason.

One worthy reason could have been to show Anthony Albanese and Treasurer Jim Chalmers really wanted to do something about fixing the cost of living, by making the question of what we should do about our overcharging grocery oligopoly a major issue for discussion in the campaign.

Since the remedies proposed by the Australian Competition and Consumer Commission in its report seem so inadequate, should the two grocery giants be broken up? As, indeed, Opposition Leader Peter Dutton says he would do if elected.

As the business press so indelicately put it, the competition watchdog’s mild-mannered recommendations despite all its evidence of what the punters see as “price gouging” meant the supermarket giants had “dodged a bullet”. But should they have? Let’s discuss it.

Sorry, I’ve been observing the behaviour of politicians for too long to believe Labor’s motives for releasing the report at such a time could possibly be so pure. It’s more likely the reverse: Labor wants to close the issue down.

What Labor did last week looks suspiciously like what’s known in the trade as “taking out the trash”. When you’ve got an embarrassing report you hope won’t get much notice from the media, you release it on a Friday, when the media’s busy packing up for the weekend. The reporters ought to return to the topic on Monday, but they don’t because of their obsession with newness. Spin doctors 1; press gallery 0.

Or governments can achieve the same result by releasing an embarrassing report at a time when everyone’s attention is turned to a much bigger issue – say, a budget, or an election campaign.

But why didn’t Labor just keep the report to itself until after the election? Because, I suspect, it wanted to show it had been on the job, investigating complaints about supermarket overcharging.

And it probably wanted to arm itself to reply to Dutton’s promise to break up the two giants. “We had the competition watchdog investigate the matter, and it explicitly declined to recommend divestment. But it did make 20 recommendations, and we’ve accepted them all.”

(The last time I heard that one was before the 2019 federal election, when the Morrison government released the report of the royal commission into misconduct in banking and said it had accepted all its recommendations. After the election it dropped many of them.)

But if even Labor isn’t game to touch the thought of breaking up Coles and Woolies, why are the Liberals promising to do it? Because they wouldn’t really.

Why does the notion of divestment frighten Labor? Because it doesn’t want to get offside with business. However, in the case of the two supermarket giants, their interests are defended inside Labor’s corridors of power by their union, “the shoppies”, aka the Shop, Distributive and Allied Employees Association.

Trouble is, the report’s findings show there’s a lot to try sweeping under the carpet. The two chains account for two-thirds of all supermarket sales, and their market share has increased since 2008 despite the advent of Aldi. Their profitability is among the highest in the world and their profit margins have increased over the past five financial years.

“Grocery prices in Australia have been increasing rapidly over the last five financial years,” the report says. “Most of the increases are attributable to increases in the cost of doing business across the economy, including particularly production costs for suppliers, which has increased supermarkets’ input costs.

“However, Aldi, Coles and Woolworths have increased their product [margins] and earnings-before-interest-and-tax margins during this time, meaning that at least some of the grocery price increases have resulted in additional profits.”

So if the Libs don’t seize on the report’s findings to step up their claim to want to do something real and lasting about the cost of living, it will be a sign they’re not genuine in their professed desire to break up the grocery oligopoly. A sign both sides of politics want the report and its disturbing findings buried ASAP.

But it’s not just the political duopoly that doesn’t want to know about the pricing power of the grocery market’s big two. Most of the nation’s economics profession don’t want to think about it either. Why not? Because it’s empirical evidence that laughs at their conventional model – whether mental or mathematical – of how the economy works.

There’s a host of contradictions in their model, and the profession long ago decided that the easiest way to leave its beliefs unchallenged and unchanged was to avoid thinking about them. (And for all those economists snorting with derision as they read yet more of Gittins’ nonsense, I have five words: “theory of the second best”. Those words strike terror into the heart of every conventional economist.)

Economists divide their discipline into micro (the study of how individual markets work) and macro (study of how the whole market economy works), but they’ve given up trying to make the two approaches fit together. This groceries report is a classic example of how the two lines of thinking don’t fit.

Every microeconomist studying “imperfect competition” (aka “industrial organisation”) knows oligopoly brings market power and allows firms to avoid competition on price. But every macroeconomist assumes – explicitly or implicitly – that market power isn’t a relevant problem.

As we saw with the conventional wisdom on the domestic causes of the recent inflation surge, the Reserve Bank assumed it was caused by excessive monetary and budgetary stimulus. That is, it was caused by “demand-pull” not “cost-push” inflation pressure.

The fact that, through our own neglect, we have one of the most oligopolised economies in the developed world, is assumed away. We’ve allowed our economy to become inflation-prone, while economists in general, and the supposedly inflation-obsessed Reserve Bank, have said not a word.

But not to worry. We’ll compensate for our negligence by punishing people with home loans all the harder.

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How many more cyclones before our leaders finally do something?

Forgive me for being hard-headed while everyone’s feeling concerned and sympathetic towards those poor flooded Queenslanders and people on NSW’s northern rivers, but now’s the time to resolve to do something about it.

As the rain eases, the rivers go down, the prime minister flies back to Canberra and the TV news tires of showing us one more rooftop in a sea of rushing water, the temptation is to leave the locals to their days and even months of getting things back to normal, while we go back to feeling sorry for ourselves over the cost of living and waiting impatiently until the federal election is out of the way, and we stop hearing the politicians’ endless bickering.

But speaking of politics, let’s start with Anthony Albanese. He’s been forced to abandon his plan for an April 12 election because calling an election in the middle of a cyclone would have been a very bad look.

“I have no intention of doing anything that distracts from what we need to do,” he told the ABC. “This is not a time for looking at politics. My sole focus is not calling an election, my sole focus is on the needs of Australians – that is my sole focus.”

Ah, what a nice bloke Albo is. Convinced? I’m not. You don’t get to be as successful a politician as Albanese unless your sole focus is, always and everywhere, politics. It’s because his sole focus is politics that he knows now’s not the time to look political. “Election? Election? If I don’t make out I don’t care about the election at a time like this – I could lose it.”

One thing I’ve learnt from watching prime ministers is that, though they all make mistakes – buying a holiday beach house during a cost-of-living crisis, for instance – they never make the same mistake that helped bring down their predecessor.

Every pollie knows Scott “I don’t hold a hose” Morrison’s greatest mistake was to persist with his Hawaii holiday during the Black Summer bushfires of 2019-20. The ABC has helpfully dug up footage of people in the affected area refusing to shake Morrison’s hand after he turned up late.

Now do you get why Albanese’s been doing so much glad-handing up in the cyclone area?

The election campaign that’s already begun is between two uninspiring men, neither of whom seem to have anything much they want to get on and do. You’re going to fix bulk-billing, are you? Wow. Anything else?

But, perhaps in an unguarded moment, Albanese did say something impressive. He seemed to elevate climate change as a major election issue, saying all leaders must take decisive action to respond to global warming because it is making natural disasters such Cyclone Alfred worse and more expensive to recover from.

Actually, this is the perfect opportunity to make this an election worth caring about. You’ve got a Labor Party that cares about climate change but is hastening slowly, versus a Liberal Party that only pretends to care and whose latest excuse for doing nothing is switching to nuclear power. This would take only a decade or two to organise so, meanwhile, we can give up on renewable energy and abandon Labor’s commitment to cut emissions by (an inadequate) 43 per cent by 2030.

Both sides are likely to lose more votes to the two groups that do care about climate change – the Greens and the teal independents. Labor is delaying announcing its reduction target for 2035 until after the election. If Albanese had the courage, he’d promise a much more ambitious target and make it a central issue in the election.

The point is, Alfred is hardly the last cyclone we’ll see. Extreme weather events – including heatwaves, droughts and floods - have become more frequent and more intense. How many more of them will it take to convince us we need to do more to reduce our own emissions, as well as taking responsibility for the emissions from the coal and gas we export to other countries?

What’s different about Alfred is it hit land much further down the coast than usual. Reckon that’s the last time this will happen? Modelling by scientists at UNSW’s Climate Change Research Centre suggests that weakening currents may lead to wetter summers in northern Australia.

Other researchers from the centre tell us “our climate has changed dramatically over the past 20 years. More rapid melting of the ice sheets will accelerate further disruption of the climate system.”

A big part of our problem is the longstanding human practice of building towns near a good source of water, such as a river. Rebecca McNaught, of Sydney University, tells us Lismore is one of the most flood-prone urban centres in Australia.

Dr Margaret Cook, of Griffith University’s Australian Rivers Institute, reminds us that, until recently, 97 per cent of our disaster funding was spent on recovery, compared with 3 per cent invested in mitigating risk and building resilience.

That’s all wrong and must be reversed. Armies of volunteers – plus defence forces – emerge after disasters to help mop up. But Cook argues for an advance party that arrives before a disaster to help prepare by moving possessions, cleaning gutters and drains and pruning trees.

She advocates advanced evacuation, permanently relocating flood-prone residents, raising homes and rezoning to prevent further development in flood-prone areas.

“We must improve stormwater management, adopt new building designs and materials, and educate the public about coping with floods,” she says.

As we saw at the weekend, the defence forces have become a key part of the response to natural disasters. Great. Except that, according to a review in 2023, the Australian Defence Force is not structured or equipped to act as a domestic disaster recovery agency in any sustainable way.

It could be so structured, of course, though it might take a bob or two. And that’s before you get to the problem of houses that are uninsurable and insurance policies that are merely unaffordable.

The more you think about climate change, the more you realise it’s going to cost taxpayers a bundle.

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To make Medicare healthy again, the pollies must fix its symptoms

I don’t know if you noticed, but the federal election campaign began on Sunday. The date of the election has yet to be announced – it may be mid-April or mid-May – but hostilities have begun. And they began with an issue that’s been big in election campaigns for 50 years: Medicare.

On Sunday, Anthony Albanese revealed his election masterpiece, the knockout punch that would send Peter Dutton reeling, something Albo has had up his sleeve since December. You know how hard it’s getting to find a doctor who bulk-bills?

Well, Labor will fix that. Remember Bob Hawke’s famous election promise that “by 1990, no Australian child will be living in poverty”? Albo’s topped that. He’s promising that, by 2030, nine out of 10 GP visits will be bulk-billed. And all that for a mere $8.5 billion over four years in extra spending.

Politically, it was brilliant. Health is important to Australians, and they love being able to see a doctor without coughing up, so to speak. Poll after poll shows that when in comes to healthcare, Labor’s the party voters trust. And fixing bulk-billing ticks another box: cost of living.

It gets better. Dutton has form on bulk-billing. Do you remember when Tony Abbott won government in 2013? He’d promised not to cut various classes of government spending, but in his first budget he was making savings everywhere. He was going to introduce a “patient co-payment” of $7 a pop on visits to GPs.

There was so much public uproar and opposition in the Senate that most of the planned nasties were dropped. Guess who was minister for health at the time?

What a fabulous political tactician Albo is. A whole election campaign discussing the need to restore bulk-billing. Sorry, great move – not gonna fly. Within a few hours, Dutton had matched Labor’s offer “dollar for dollar”. The man who told us the Albanese government was “spending like a drunken sailor” said “see you, and raise you”. He’d be spending $9 billion over four years, thanks to $500 million for an already announced improvement in mental health.

Dutton had no time to consider the detail of Labor’s proposal, nor how he’d pay for it. By the way, how would he pay for it? Don’t worry, he’ll tell you later. How much later? Didn’t say.

Remember all those election campaigns when we agonised over debt and deficit? Where the media kept count of the cost of all the promises, and parties struggled to find ways to pay for it all?

Not this time. Neither man has an accountant’s streak. If Albanese keeps producing measures to help with the cost of living, and Dutton keeps matching him, this will be a costly campaign.

And now that the question of Medicare and bulk-billing has been neutralised, I doubt we’ll hear much about them again. So, since they matter far more to our lives than the incessant politicking, let’s take a closer look while we can.

Medicare – first introduced as Medibank by the Whitlam government in 1975 – is Australia’s first system of universal health care, in which everyone who needs help gets it, regardless of their ability to pay. Every rich country has a universal system, except the United States.

Under Medicare, the federal government pays about half the cost of the states’ public hospitals. In principle, bulk-billing ensures everyone can see a doctor when they need one. If in practice that’s too expensive, you can always wait in a public hospital’s emergency department.

Trouble is, universal health care is expensive and getting more so, which is a problem when politicians like appearing to cut taxes, and never increase them or introduce new ones. However, the government’s accountants know there’s more than one way to skin a budget.

When the $7 patient co-payment got rejected, the feds solved the problem by freezing the Medicare rebates to GPs rather than adjusting them for inflation. As Australia’s leading health economist Professor Stephen Duckett explains, this slowly forced GPs to abandon bulk-billing and introduce their own patient co-payments as their practice costs increased but their rebates didn’t.

It’s said that by the time Labor returned to office in 2022, bulk-billing was in freefall. Labor restored the indexation of Medicare rebates, then tripled the special incentive for GPs to bulk-bill pensioners and holders of healthcare cards, children and people in rural and remote areas.

This helped, but the increased payments weren’t enough to eliminate the gap between the rebate and the fees GPs were charging in metropolitan areas. The present average out-of-pocket payment is $46 a pop. (Bit more than $7, eh?)

At present, less than half of people are “always” bulk-billed when they see a GP. A further quarter of patients are “usually” bulk-billed.

Co-payments hit poor people harder than the rest of us, and I think they can be a false economy. The medical problems of people who don’t see the doctor because they can’t afford it can get a lot worse, which is both tough on them and tough on the taxpayer when they have to be rushed to hospital for operations and a long stay.

Albanese’s new promise is to further increase the incentives for GPs to bulk-bill, as well as to extend those incentive payments to cover all patients, not just pensioners, children and the others. His third change is to introduce an additional 12.5 per cent “practice payment” to those medical practices that bulk-bill all their patients. The changes would take effect from November 1.

Of course, Medicare has more problems than just out-of-pocket payments. The standard fee-for-service way of paying GPs makes sense for people with acute problems, but not the growing number with multiple chronic conditions (like a certain ageing journo).

Fortunately, Duckett thinks the promised changes could “start the necessary transition” away from fee-for-service in general practice.

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Sorry, this isn't the day we stop feeling sorry for ourselves

I’m sorry to be the one to break it to you, but I very much doubt that this small cut in interest rates will be the circuit breaker everyone from Treasurer Jim Chalmers down has been hoping for. After our many months of longing for this moment, such a modest saving can only be an anticlimax.

I doubt this will be the reason the economy begins to recover as we all go out and shop. Nor will it be the sea change that secures another term in office for Prime Minister Anthony Albanese.

Consumers and voters are in a sullen, sour mood and have been for a year or two. We’re feeling so sorry for ourselves it will take a lot to lighten us up and make us forget our obsession with the cost of living. Even if things improve, our negativity may lift only slowly over many months.

Normally, a change of government would help a lot. New leaders get a honeymoon in which hope springs eternal. The taller and better-looking the new guy is, the better their chance of making a good impression.

But it’s hard to see a man whose specialty is making us feel angry or afraid being the bloke to cheer us all up.

For someone with a mortgage of $600,000, a rate cut of 0.25 percentage points is worth about $23 a week.

Do you remember Chalmers’ tax cuts last July? No one was terribly excited about them. But they were worth $34 a week for someone on $84,000 a year, and $54 week for someone on $122,000 a year.

There may be more cuts to come this year, of course, even a possible two more before an election held in mid-May. But from what the Reserve Bank is saying, I doubt it’s in a tearing hurry to keep cutting.

And though the Reserve raised interest rates by 4.25 percentage points over the 18 months to November 2023, I don’t expect it to cut rates by more than about 1 percentage point, leaving the official interest rate at about 3.35 per cent.

Why? Because its 4.25-point increase brought the rate up from its crisis level of almost zero during the pandemic and its lockdowns. Now the Reserve will be getting the rate back to normal, not crisis territory.

And while we’re all feeling so sorry for ourselves, don’t forget this. Normally, by the time the Reserve starts cutting interest rates the economy is in recession and unemployment is way up.

Our economy is becalmed, but in nothing like a recession. Right now, we have a higher proportion of the working-age population in jobs than ever before. At 4 per cent, our rate of unemployment is lower than it’s been in most of the past 50 years. Sound terrible to you?

Indeed, it’s the remarkable strength of our jobs market that’s the main reason the Reserve has been so reluctant to cut interest rates until now, and remains “cautious” about cutting them further.

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When does bipartisanship happen? When there's mutual self-interest

If you think Labor and the Liberals are always at each other’s throats and never agree on anything, you haven’t been watching closely enough. Sometimes – last week, for instance – they do deals with each other they hope we won’t notice.

When they’ve reached an agreement they don’t want seen, it’s because they’ve colluded to do something that advances their interests at the expense of the voters.

It reminds me of economist Adam Smith’s observation that “people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public”.

What do we want from our politicians? That they get on with fixing our many problems. When we discover the present lot isn’t doing that, we toss ’em out. In practice, however, it’s not that simple. We’ve long had a system of two-party government, which means that when one side’s no good, we turn to the other one. But what happens when it too proves to be no good? We have no alternative but to return to the first side, which we already know isn’t up to snuff.

That’s the position we’re in now. We tossed out Scott Morrison and replaced him with Anthony Albanese, only to discover he’s not game to do what it takes. So, does Peter Dutton strike you as the good leader we’re looking for? You’d have to be a terribly rusted-on Lib to think so. What now?

Actually, our loss of faith in the political duopoly isn’t new. It’s become clear that the two sides have just about fought themselves to a standstill. Neither side is game to do anything much, for fear of the scare campaign the other side would run.

This explains why voters have been groping towards plan B. In the 2022 federal election, almost a third of voters – a record proportion – gave their first-preference vote to candidates other than from the two majors. Many Labor voters have turned to the Greens, while the growing number of independents was boosted by the six teal independents taking over seats in the Liberals’ heartland. What’s the single biggest source of discontent with the duopolists? Their reluctance to get on with fighting climate change.

We’ve already come close to having a minority government, and there’s high chance we’ll get one at this year’s election. This gives the smaller parties and independents the balance of power, allowing them to achieve braver policies in return for keeping the minority government in power. Not such a bad arrangement.

But this is where last week’s passing of the electoral reform bill comes in. After doing a deal with the Coalition, Labor got it through the Senate despite the vehement opposition of the Greens and, particularly, the teal independents.

As Labor claims, the act involves the most comprehensive changes to the electoral system in four decades. And many of the changes are genuine reforms, limiting how much individuals can donate to candidates or parties, and tightening up rules on disclosing the identity of donors and the timeliness of that disclosure.

Labor claims its reforms will take the “big money” out of election campaigns. Don’t you believe it. It’s true it will stop the Clive Palmers from giving millions to a party, but that was never a big worry. Various loopholes will allow Labor to continue getting big bucks from the unions and the Libs getting much moolah from business and the secret funds in which money has been stashed.

In any case, the act makes up for any loss of donations by greatly increasing the money the parties and independent candidates get from the taxpayer. After an election, candidates who get more than 4 per cent of the votes get about $3.50 per vote. That will be increased to $5 – which you can double because we each cast two votes, for the House and the Senate.

And that’s before you get to a new payment to cover “administration costs” of $90,000 per election for members of the lower house, and half that for senators.

The point is, these old and new payments go to incumbents, giving them a huge financial head start over new people trying to get in. Even before you think of all the expensive advertising you’d like, setting up an office, staffing it, and paying for printing and stationery ain’t cheap.

But sitting members get an electoral office and a staff of five, plus transport and a generous printing budget they use to get themselves re-elected. So, would-be independents have to raise and spend a lot of money to have any chance against an incumbent member.

Which is where the act’s new limit on spending of $800,000 per candidate puts incumbents way ahead of newcomers. What’s more, political parties are allowed to spend $90 million each on advertising, which they can direct away from their safe seats to their marginals.

Get it? The two major parties have cooked up “reforms” that benefit them by stacking the rules against new independents. The Greens aren’t greatly disadvantaged because they’re a party and have incumbents. The existing independents don’t get the extra benefits going to a party, but do now have the advantage of incumbency.

But future independents – including further teals – will find it a lot harder to win seats than before. Why has Albanese done a deal that mainly benefits the Liberals, his supposed lifelong enemies? Because if independents can do over the Libs, next they can do over Labor.

When the chips are down, the duopolists must stick together and put their mutual interests ahead of the voters’ right to choose. If you want proof that our politicians put their own careers way ahead of their duty to the people who vote for them, this is it. I’ve never felt more disillusioned.

But note this: these changes won’t apply to this year’s election. This will be our last chance to register our disapproval.

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Everyone hates government spending - until someone tries to cut it

It seems government spending will be an issue we hear a lot of in this year’s federal election campaign. But remember this: much of what’s said will be influenced by partisanship, ideology, self-interest and populism.

Peter Dutton is making wild claims that need fact-checking. The business press is saying things that aren’t a lot better. And the debate will proceed according to an eternal political truth: while voters never mind you bad-mouthing government spending in general, as soon as you get specific, they start fighting back.

“I’ve always thought the money the government’s giving you was a great waste, but the money – and the tax breaks – I’m getting are vital to the economy.”

It’s obvious that some part of the $730 billion the federal government spends each year must be wasteful, just as some of the 365,000 people it employs must be in excess. But how much is some – at lot or a little? No one’s ever bothered to find out. Much easier to stick to unsubstantiated claims and exploiting voters’ prejudices.

Dutton has been laying it on thick. When he made Senator Jacinta Nampijinpa Price shadow minister for “government efficiency”, he claimed the Albanese government “has spent money like drunken sailors”.

So what spending would he cut? He’ll tell us later. We do know, however, that Albanese & Co have increased the number of federal public servants (not the same thing as total federal employees) by 36,000.

This addition of “Canberra public servants”, Dutton has said, was “wasteful” and meant the public service was now “bloated and inefficient”. It’s an example of “wasteful spending that is out of control”. “We’re not having 36,000 additional public servants in Canberra”.

So is he going to sack them all? He’d be happy for you to think so, but he hasn’t actually promised he would. What he has said is he’d get rid of diversity and inclusion positions, along with “change managers” and “internal communication specialists”.

Whether that would be a good or bad thing, the saving would be chicken feed.

Dutton has tried hard to give the impression all the extra workers are in Canberra. Not true. The proportion of all federal public servants in Canberra has actually fallen to 37 per cent. Most of the extra people are working in frontline services around the states, helping people using the national disability scheme, visiting Centrelink and so forth.

Andrew Podger, a former top Canberra bureaucrat, notes that, at less than 0.7 per cent, the federal public service is now smaller than it was in 2008 as a proportion of the population, with its share of the total Australian workforce having fallen to less than 1.4 per cent.

Dr Michael Keating, a former topmost bureaucrat, says there’s plenty of evidence that the previous Coalition government was underfunding many services. Hospital waiting lists blew out, public schools didn’t get the resources needed to do their job adequately according to the Gonski standards, waiting times for welfare payments and for veterans’ compensation were far too long, and delays in processing visa applications led to more unauthorised immigrants.

Ending or reducing these policy-caused delays explains most of Albanese’s increased government spending. Sound like waste to you?

Keating notes that, according to the latest official estimates, federal government spending this financial year will be almost the same as it was in the Morrison government’s last year, when measured as a proportion of gross domestic product. Sound profligate to you?

He further notes that, when you take total spending by all levels of government as proportion of GDP, Australia is actually the lowest among the 38 members of the Organisation for Economic Co-operation and Development, save for Ireland, South Korea and Switzerland.

And get this: as a proportion of national income (GDP), our spending by all levels of government is more than 4 percentage points lower than the average for all OECD countries. Remind you of a drunken sailor, does it?

According to the opposition’s shadow minister for the public service Jane Hume, “you don’t grow the economy by growing the size of government. Every public-sector job has to be paid for by a private-sector worker”.

I hope Hume is smart enough to know she’s talking nonsense and is just trying to mislead those people silly enough to believe her. This is a defence of private-good/public-bad ideology that makes no sense. Apart from her inference that people who work for the government don’t have to pay taxes, it’s as silly as saying Woolies and Coles don’t add to the economy because every cent they earn comes from their customers’ pockets.

If we left health, education, law and order and all the rest completely to the private sector, do you reckon we’d have an economy that was bigger or smaller than we have today?

Back to Dutton. He says “a major cause of homegrown inflation is rapid and unrestrained government spending”. If it’s the huge spending by federal and state governments during the pandemic he’s referring to, that’s no more than the economists’ conventional wisdom.

But I guess he’s referring to the more recent spending by Albanese & Co. And get this: ignore the wild exaggeration and the business press has been saying much the same thing for months.

Although the argument has been disavowed by Reserve Bank governor Michele Bullock, the business press has been arguing that the government’s spending, especially that intended to ease cost-of-living pressure by subsidising electricity prices and increasing rent assistance for pensioners, is causing consumer demand to be stronger than otherwise and keeping the jobs market stronger than otherwise, so has allowed businesses to keep increasing their prices.

Fundamentally, the business press is right. The way to get inflation down faster would have been to hit the economy harder, with higher interest rates and zero discretionary spending by the government. Instead, the Reserve and the government took the compromise position by aiming for a soft landing and a consequent slower return to low inflation.

I get why the press hasn’t wanted to spell out more clearly its preference for the tougher choice. What I don’t get is why it thinks its business customers would have preferred a full-blown recession.

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Why we'd be mugs to focus on the cost of living at the election

It’s a good thing I’m not a pessimist because I have forebodings about this year’s federal election. I fear we’ll waste it on expressing our dissatisfaction and resentment rather than carefully choosing the major party likely to do the least-worst job of fixing our many problems.

Rather than doing some hard thinking, we’ll just release some negative emotion. We’ll kick against the pricks – in both senses of the word.

We face a choice between a weak leader in Anthony Albanese (someone who knows what needs to be done, but lacks the courage to do much of it) and Peter Dutton (someone who doesn’t care what needs to be done, but thinks he can use division to snaffle the top job).

By far the most important problem we face – the one that does most to threaten our future – is climate change. We’re reminded frequently of that truth – the terrible Los Angeles fires; last year being the world’s hottest on record – but the problem’s been with us for so long and is so hard to fix that we’re always tempted to put it aside while we focus on some lesser but newer irritant.

Such as? The cost of living. All the polling shows it’s the biggest thing on voters’ minds, with climate change – and our children’s future – running well behind.

Trouble is, kicking Albanese for being the man in charge during this worldwide development may give us some momentary satisfaction, but it will do nothing to ease the pain. Is Dutton proposing some measure that would provide immediate relief? Nope.

Why not? Because no such measure exists. There are flashy things you could do – another big tax cut, for instance – but they’d soon backfire, prompting the Reserve Bank to delay its plans to cut interest rates, or even push them a bit higher.

We risk acting like an upset kid, kicking out to show our frustration without thinking about whether that will help or hinder their cause.

Rather than finding someone to kick, voters need to understand what caused consumer prices to surge, and what “the authorities” – in this case, Reserve Bank governor Michele Bullock and the board, not Albanese – are doing to stop prices rising so rapidly.

The surge was caused by temporary global effects of the pandemic – which have since largely gone away – plus what proved to be the authorities’ excessive response to the pandemic, which is taking longer to fix.

It’s primarily the Reserve Bank that’s fixing the cost of living, and doing it the only way it knows: using higher mortgage interest rates to squeeze inflation out of the system. But doesn’t that hurt people with mortgages? You bet it does.

What many voters don’t seem to realise is that, by now, the pain they’re continuing to feel is coming not from the disease but the cure. Not from further big price rises but from their much higher mortgage payments.

So it’s the unelected central bank that will decide when the present cost-of-living pain is eased by lowering interest rates, not Albanese or Dutton. A protest vote on the cost of living will achieve little. Of course, if you think it would put the frighteners on governor Bullock, go right ahead. She doesn’t look easily frightened to me.

But there’s another point that voters should get. When people complain about the cost of living, they’re focusing on rising prices (including the price of a home loan). What matters, however, is not just what’s happening to the prices they pay, but what’s happening to the wages they use to do the paying.

When wages are rising as fast as prices – or usually, a little faster – most people have little trouble coping with the cost of living. But until last year, wages rose for several years at rates well below the rise in prices. Get it? What’s really causing people to feel cost-of-living pain is not so much continuing big price rises or even high mortgage payments, but several years of weak wage growth.

Why does this different way of joining the dots matter? Because, when it comes to wages, there is a big difference between Albanese and Dutton.

Since returning to government in 2022, Labor has consistently urged the Fair Work Commission to grant generous annual increases in the minimum award pay rates applying to the bottom fifth of wage earners.

This will have helped higher-paid workers negotiate bigger rises – as would Labor’s various changes to industrial relations law. Indeed, this is why wages last year returned to growing a fraction faster than prices.

These efforts to increase wage rates are in marked distinction to the actions of the former Coalition government. So kicking Albanese for presiding over a cost-of-living crisis risks returning to power the party of lower wages.

But here’s the trick: it also risks us taking a backward step on climate change. The party that isn’t trying hard enough could be replaced by a Coalition that wants to stop trying for another decade, while it thinks about switching from renewables to nuclear energy.

From the perspective of our children and grandchildren, the best election outcome would be a minority government dependent on the support of the pollies who do get the urgency of climate action: the Greens and teal independents.

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We've entered the era of gutless government

Sorry to tell you that I’m finishing this year most unimpressed by Anthony Albanese and his government. I’m still reeling from his last two weeks of parliament, pushing through 45 bills just to show how much he’d achieved and give himself the option of calling an election early next year should he see a break in the clouds.

Some of the measures pushed through at breakneck speed merited much more scrutiny, while some reforms that should have been put through were abandoned. One measure he’d hoped to rush through, fortunately, didn’t make it.

It all left me more conscious of his government’s weak performance, capping off 2 ½ years in which Labor turned its mind to many of the problems left by its Liberal predecessors, did a bit to help, but never nearly enough.

Why not? Because there were powerful interest groups Labor didn’t want to offend. And because it lives in fear of what the Libs might say. The two-party duopoly has painted itself into a corner, with neither side game to do what needs to be done.

Take the greatest threat to our future: climate change. Labor was elected in May 2022 partly because it seemed to be genuine in its determination to see Australia play its part in reducing greenhouse gas emissions, whereas the Coalition seemed only to be pretending to care.

In government, Labor kept its promise to legislate its target of reducing emissions by 43 per cent by 2030. It strengthened its predecessors’ “safeguard mechanism”, limiting emissions by major industries. It made speeches about how nice it would be for Australia to become a world superpower, using clean electricity to manufacture green iron, green aluminium and other things, then export them to Asian countries with far less sun and wind than we have.

So clearly, we’ve now accepted that our industries exporting coal and natural gas will start to phase down and out. What? Gosh no. No, no, if the coal industry wants to extend its mines, that’s fine. If the West Australians want assurance of the need for offshore gas beyond net zero emissions in 2050, that’s fine.

Under the shiny new slogan of Nature Positive, Labor had promised to end further degradation of our natural environment, including by setting up a federal environment protection authority. This was opposed by the Coalition, proudly proclaiming itself to be the mining industry’s great friend, but the necessary legislation could go through thanks to a deal Environment Minister Tanya Plibersek had reached with the Greens.

But then the WA premier phoned Albanese to advise that the state’s miners were most unhappy about further efforts to protect the environment, so the deal was squashed. But not to worry. Should Albo decide against an early election, the bill would be back on the drawing board when parliament resumed for a short sitting in February.

In his timidity, Albanese has introduced to politics the each-way bet. Strong support for the move to renewables? Of course. Continuing support for the use and export of fossil fuels? Of course. Welcome to the era of gutless government.

From the greatest threat to our future on this planet to the greatest example of populist cynicism. To great applause from voters – and with the whole world watching this Aussie reform, up there with the secret ballot – Albanese rushed through his bill banning children under 16 from using social media.

Had he figured out a foolproof way of enforcing the ban? Could the kids soon find ways around it? Would we all be forced to provide trustworthy tech giants such as Facebook and TikTok with documentary proof of our age? No. Let’s just push the bill through and worry about such details later. And never mind the experts saying what’s needed is to train our young people how to detect misinformation and disinformation.

This is politicians acting on their cynical maxim that “the appearance is the reality”. They don’t need actually to fix a problem, just create the appearance of fixing it. Just do something the unthinking punters, and the shock jocks who lead them on, happily imagine will fix things.

The promised measures that were dropped from Albanese’s frenetic bill-passing included action to curb the advertising of sports gambling and the plan – announced in February last year – to raise the tax on superannuation balances over $3 million (a needed reform despite what it would have cost a poor battler such as me).

One bit of good news was the disappearance of Labor’s bill to reform election fundraising. Although it included various valuable changes, its claim to be taking “big money” out of politics was a thinly disguised plot to knock out Clive Palmer and the teals’ funding from Climate 200 while ignoring the political duopoly’s funding from the unions and big business.

Fortunately, the duopolists couldn’t agree to push it through.

The sad part of Albanese’s unimpressive performance is that there’s little reason to believe the Peter Dutton-led Coalition would do any better at fixing the many problems the Morrison government left for Labor to deal with. One of which, of course, was the cause of what soon unfolded after the May 2022 election to become the “cost-of-living crisis”. Much of the surge in prices came from overseas disruptions to supply. The rest, according to the Reserve Bank’s reasoning, came from the stimulus applied by the Morrison and state governments that turned out to be far more than needed.

Albanese and Treasurer Jim Chalmers have done a good job in managing the unfinished return to low inflation, but they have no control over when the Reserve will decide to start cutting interest rates. If, as seems likely, Labor loses seats at next year’s election, that will be voters punishing it for the cost of living, over which it had little control, not for its weak performance in so many other areas.

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Education is leading the two sides of politics to change sides

A strange thing is happening in politics. People who in earlier times could have been expected to vote for the right-wing party are now more likely to be supporting the party on the left, while those who would have voted for the left in times past are now more inclined vote for the right.

This is something the insiders – the political scientists, pollsters and party professionals – know all about, but the politicians prefer not to admit. So it’s news to the rest of us.

You could see it alluded to in all the learned explanations of why Donald Trump romped home in the presidential election that was too close to call. But you can also see it in our own elections. Indeed, it’s a “secular” (long-term) trend occurring in the politics of most rich countries.

Did you see some commentator saying the Republicans were now the party of the working class? What! It’s truer than it sounds. Our own Farrah Tomazin wrote that the election saw “the realignment of the Republicans as a party that appeals to the working class while the Democrats have increasingly become the party of college-educated, upper-income suburban voters, especially women”.

A distinguished American professor of anthropology added that “Trump voters trend older, white, rural, religious and less educated”. It seems most “voters of colour” still voted Democrat, but enough Latinos and others defected to Trump to give him an easy win.

And, as I say, you see a similar role reversal going on here in Oz. Professor Ian McAllister of the Australian National University, who oversees its Australian Election Study, a large sample survey of voters following every federal election, says we’ve been gradually moving the same way since the 1990s.

His study, following the federal election in May 2022, found it showed a continuation of “major sociodemographic shifts in voting patterns based on gender, generation and social class, with significant implications for the future of the major parties”.

Historically, the two big parties represented the rival interests of voters playing different roles in the economy. Labor looked after the workers supplying their labour, while the Liberals looked after those small and big businesspeople supplying their capital.

The standard division between the working, middle and upper classes was based on people’s occupational status: blue-collar, white-collar, owners and managers.

But that economy-based division is being replaced by more people voting according to their social values and identity. McAllister says this shift is being driven by rising levels of education. Whether someone has a university education is now the best single predictor of how they vote.

As a general rule, those people with a university degree end up with values and preferences that are quite different from those of people who don’t have a degree, or left school early.

So, just as college-educated Americans are more likely to vote Democrat, Australians with a degree are more likely to vote Labor. People without tertiary education are more likely to vote Republican, Liberal or National Party.

It follows – again as a broad generalisation – that the more highly educated are more likely to live nearer the centre of big cities, where the better-paid jobs tend to be, while the less highly educated are more likely to be found in the outer suburbs and the regions.

Over the 34 years to 2023, the proportion of adults with a university degree has risen from 8 per cent to almost one-third. Each year, more than half of students completing high school go on to uni.

So, as each year passes, people in the oldest generation, who are less likely to be graduates, die, while the youngsters taking their place in the electorate are more likely to be graduates.

In his report on the 2022 federal election, McAllister found that Labor still attracted more working-class votes, although its share of them had fallen to just 38 per cent. The Coalition lost votes from university-educated voters, high-income voters and home owners – groups that, in the previous election, were more likely to have supported it.

A much higher proportion of girls are going on to uni these days, which helps explain why more women vote Labor than for the Coalition. And higher education does much to explain why Labor’s support is much stronger among younger voters.

McAllister has found that, as the Millennials get older – some are now in their early 40s – they’re less likely to drift to the right the way earlier generations did as they aged.

You might see the Liberals’ loss of six heartland seats to the teals as a clear example of the secular trend we’re discussing: Liberal voters who cared about climate change, a federal anti-corruption commission and more women in parliament, switching their vote to the teals.

But McAllister found it was more complicated than that. Only about one-fifth of former Liberal voters changed their vote. What got the teals across the line was strategic voting by those seats’ minority Labor and Greens voters. Knowing their party was never going to win, they threw their weight behind the teals, who did have a chance of winning.

As voters around the rich world become less likely to vote according to their economic class and more likely to vote according to their social and cultural values, political scientists have developed a fancy new theory that characterises parties on the left as GAL and parties on the right as TAN.

GAL stands for green, alternative (relaxed about gender fluidity, for instance) and libertarian (“my body, my choice”). TAN stands for traditional (“I liked it the way it was” and “the world should be run by men”), authoritarian (“we need strong leadership”) and nationalist (“why are they letting in all those strange immigrants?”).

So when, in coming months, you see Peter Dutton banging on about inflation, all those terrible immigrants and all the crime on the streets, and campaigning hard in the outer suburbs and regions, the media will tell you he’s borrowing from the Trump playbook. But now you’ll know there’s a lot more to it.

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The moribund political duopoly is rapidly self-destructing

Why do we have so many economic problems, and why do our governments make so little progress in fixing them? Because the two main parties just play politics and by now have boxed each other in. Neither side is game to make tough decisions for fear of what the other side will do to them.

Our tax system needs repair, but neither side dares to make changes somebody somewhere might not like. So we put up with poor government services, growing waiting lists, tax avoidance by the highly paid, bracket creep and phony tax cuts.

We have a system where people with mortgages get squeezed unmercifully whenever inflation gets too high. There are fairer and less painful ways to fix the problem, but neither side has the courage to change.

When occasionally the two sides agree on some policy, it’s often a bad one. Many defence experts quietly doubt the wisdom of AUKUS. By the time the nuclear subs arrive in many years’ time – if they ever do – they’ll probably have been superseded.

But the political duopoly’s most egregious failing is its inaction on climate change. For a while, it looked like the climate wars had ended, with the Albanese government making very cautious progress towards net-zero emissions.

Now, however, Peter Dutton has come up with a new reason for delay: let’s go nuclear instead. And we don’t have to do anything unpleasant for a decade or two. It will probably never happen, but what it has done is rob commercial investors of the certainty they need to keep investing in solar and wind farms at the rapid rate we need them to. With our ageing coal-fired power stations so close to the grave, our transition to renewable energy could be very bumpy.

So, what can we do to free ourselves from the clutches of a two-party political system that’s stopped working? Well, we’re already doing it. Voters are increasingly taking the law into their own hands by opting for the minor parties and independents. We saw this at the last federal election, in 2022, where the two big parties’ combined share of first-preference votes – which has been declining since World War II – fell to 68.3 per cent, its lowest level since the Great Depression.

So, the share of first-preference votes going to minor parties and independents is now just a little short of a third. In consequence, the number of crossbenchers in the House of Representatives rose to a record 16.

It’s not difficult to judge that the duopoly’s poor performance on climate change explains much of their decline. Labor loses votes to the Greens while, for the first time, teal independents took six previously safe seats from the Liberals.

Nor is it hard to believe that Labor’s caution and the Liberals’ nuclear red herring may add to the big parties’ loss of first preferences at next year’s election.

New research by Bill Browne and Dr Richard Denniss, of the Australia Institute, finds there are now no safe seats in House of Representatives. While some Labor seats are safe from being taken by the Liberals, and some Liberal seats are safe from Labor, such seats aren’t safe from the Greens or an attractive independent candidate.

In the supposedly safe Liberal seat of Mackellar on Sydney’s northern beaches, the teal independent Dr Sophie Scamps won the seat with a two-candidate preferred swing of more than 15 per cent. A strong independent candidate’s advantage is that they can pick up the preferences of the minor parties, plus those of the other big-party candidate who was never going to win.

It’s usual for the big parties to focus on the “marginal seats” that could be won or lost if a few “swinging voters” change their votes. And it’s mainly these marginals that one big party loses to the other.

But it’s not usual for the minor parties and independents to pick up such marginal seats. No, they’re much more likely to win supposedly safe seats.

So while the big guys focus on winning or retaining the marginals, they leave themselves open to the small guys when they neglect the concerns of voters in their heartland seats. Again, climate change would be the classic concern.

The standard way of predicting the results of elections using the psephologist Malcolm Mackerras’ famous pendulum has been overtaken not just by the lack of a uniform national swing between the two majors, but by the rise of the minors and independents.

I think it will be rare for governments to be elected with big majorities in future. Wafer-thin majorities will be the norm, with “hung” parliaments common. The big guys will warn us this will lead to chaos and inaction.

Don’t you believe it! It’s never been true at the state level where, at present, only five of the eight state and territory parliaments are dominated by a majority party.

I think a move to more power for crossbenchers at the federal level could be a good way to break the big-party logjam. It’s hard to see how it could be worse than what we’ve got.

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When politicians talk of 'security', be on your guard

I doubt if you’re waiting with bated breath for next Tuesday night’s federal budget but, since it’s the big set-piece event of my year, I’ve started limbering up. I’ve set my bulldust detector to ping every time I see or hear the word “security”. May I suggest you do the same?

We’ve been hearing a lot of that word lately, particularly from Anthony Albanese and his treasurer, Jim Chalmers. It comes with many adjectives – energy security, food security and, of course, national security – and with many spooky euphemisms: risk, strategic, sensitive, critical and sovereign, not to mention the spookiest of them all, terrorism.

In Albanese’s landmark speech on A Future Made in Australia, he assured us that “strategic competition is a fact of life”. “Nations are drawing an explicit link between economic security and national security,” he told us.

“We must recognise there is a new and widespread willingness to make economic interventions on the basis of national interest and national sovereignty,” he said. His government would be guided by three principles, the second of which was that “we need to be more assertive in capitalising on our comparative advantages and building on sovereign capability in areas of national interest”.

His government would be “securing greater sovereignty over our resources and critical minerals”.

Indeed so. When Chalmers announced the government’s new foreign investment rules last week, they seemed to be all about security.

“By providing more clarity around sensitive sectors and assets,” Chalmers said, “our reforms will give businesses and investors greater certainty while safeguarding our national security.

“National security threats are increasing due to intensifying geopolitical competition and risks to Australia’s national interests from foreign investment have evolved at the same time as competition for global capital is becoming more intense.”

The reforms to our foreign investment rules would “boost economic prosperity and productivity, while strengthening our ability to protect the national interest in an increasingly complex economic and geostrategic environment.

“We are dedicating more resources to screening foreign investment in critical infrastructure, critical minerals, critical technology, those that involve sensitive data sets, and investment in close proximity to defence sites, to ensure that all risks are identified, understood and can be managed – balancing economic benefits and security risks,” Chalmers said.

And a bolstered foreign investment compliance team will use the minister’s “call-in power” to review investments that come to pose a national security concern.

My goodness. If you were the excitable type (which I’m not), you could wonder whether the economy’s being put on a war footing. Or maybe it’s that Treasury’s been taken over by Defence and Foreign Affairs. Or ASIO.

Of course, it may be that the government and its spooks know something terrible they’re not telling us. Perhaps some foreign enemy is, as we speak, preparing to do us in.

But if you’ve spent years studying the behaviour of politicians (which I have), you wonder if it’s something less life-threatening and more self-serving. Is there an election coming up, for instance? Do voters have complaints about the economy that you’d like to draw attention away from?

The independent economist Saul Eslake says that, as the government seeks to use “national security” and “economic security” as a rationale for a major shift in economic policy, two things concern him deeply.

First, the tendency to use “security” as a justification for a policy initiative opens the door to interventions that are, in the infamous phrase of former Treasury secretary Dr Ken Henry, “frankly, bad”. Decisions that, without the “security” label, wouldn’t pass muster.

Second, grounding a policy decision in “security” gives politicians an excuse to shut down any questioning of the justification for that decision.

“When governments say something is a matter of ‘national security’, they usually refuse to say why it is; that it would be wrong to allow grubby considerations of ‘cost and benefit’ to interfere with their judgments about ‘security’, or even that it is borderline unpatriotic to question a decision made on ‘security’ grounds,” Eslake says.

It’s not the first time Eslake has expressed such concerns. Here’s a quote from an article he wrote in this august organ in late 2011.

“If you want a government to do something that entitles you to some form of protection from competition (especially overseas competition), some kind of subsidy or tax break, or some other privilege not enjoyed by ordinary folk, but you know that your proposal wouldn’t pass any kind of rigorous, independent, arms-length scrutiny ... then your best chance of getting what you want is to succeed in portraying it as being somehow essential in order to enhance some form of ‘security’,” he wrote.

Sometimes I even wonder how AUKUS – the wisdom of which many defence experts quietly doubt – came about. How much of it was the Americans’ idea, and how much was ours?

What we do know is that, without any prior debate, Scott Morrison suddenly unveiled it as a fait accompli and great coup. Had Labor opposed it, we’d have been straight into a khaki election.

But Labor accepted it without demur and the costs or benefits we’ll discover over the next decade or two.

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Voters turn from the big parties, increasing political competition

John Howard is right to describe the NSW election result as a “conventional change of government”. An old and disfigured government was tossed out and the other side given a go. It’s common when a government’s been in power for a decade or more. But don’t let this convince you nothing’s changed about the way we vote.

What’s happening is that the longstanding two-party system of government is breaking down before our eyes. Years of bad behaviour by the Coalition and Labor are leading more people to vote for minor parties and independents.

This means it’s become rare for any government, state or federal, to be elected with a big majority. Majorities now tend to be narrow, and minority governments are common, particularly at state level.

The big two are always telling us a “hung parliament” would be a terrible thing, causing “chaos and confusion”. Not true. They say this because it would be a terrible thing for them, requiring them to do deals with people they hate, to get the numbers to govern.

The “crossbenchers” usually drive a hard bargain. NSW’s four-year, fixed-date elections were forced on Liberal premier Nick Greiner in 1991 by three independents. Julia Gillard’s short-lived carbon tax was forced on her by the Greens, when she fell short of a majority in 2010.

So weaker governments are bad for the major parties, but good for democracy and voters, who get more to choose from.

Why is any of this the business of an economics writer? Because the nature of competition between a few big players in a market – “oligopoly” – is a subject economists study. And two-party government has a lot in common with markets dominated by two huge companies – duopoly.

But first, a closer look at the latest election. The “landslide” to Labor is looking a fair bit less than it looked on Saturday night. Chris Minns hasn’t yet secured a majority, and if he does, it will be narrow. Why? Because so many people are voting for minor parties and independents. At this stage in the counting, 28 per cent of voters spurned the big two. This compares with almost 32 per cent at the federal election last May, where the big swing away from the Liberals gave Labor just a narrow majority.

In NSW, the Greens look to have retained their three seats in the lower house, with independents looking sure of eight seats, and probably more. One of the new independents was backed by teal money.

An American economist named Harold Hotelling is famous for talking about a beach with two ice-cream sellers. From the swimmers’ perspective, the best place for them would be one at the quarter-mark and the other at the three-quarter mark. This would minimise the distance anyone had to walk to get a cone.

But Hotelling figured that the two would end up back-to-back at the centre of the beach. Why? Because that was the way each could ensure the other got no more than half the “market share”.

The social psychologist Hugh Mackay says that the key to competition is to focus on the customer, not your competitor. That’s just what oligopolists and our political duopolists don’t do.

If there’s one thing most people don’t understand about politics it’s the way each big party obsesses about what the other side’s doing, and how it will react to what they do.

It was this that caused Anthony Albanese to go to last year’s election promising to do nothing that could offend anyone much. Promise to make needed but controversial changes and the other side launches a scare campaign. It’s only when politicians tell us how bad the other side’s policies would be that we’re tempted to believe them.

The two sides are always trying to “wedge” each other by announcing a bad but popular policy and hoping the other side will be silly enough to oppose it.

Trouble is, they rarely fall for it. They sidestep the wedge by supporting the policy. Which means both sides end up agreeing to do bad things. This is why Albanese agreed to the AUKUS pact sight unseen and, earlier, to stick with the stage three tax cut that’s biased against Labor voters.

This is where the minor parties come in, particularly those sharing the balance of power in the Senate. They can use their power to stop, or at least tone down, the bad policies the government of the day foolishly locked itself into.

Consider this. Last week Climate Change Minister Chris Bowen loudly vowed not to negotiate with the Greens over his “safeguard mechanism”. But by Monday, wiser heads had prevailed, and a deal was done, making the mechanism much more effective.

The big two each offer voters a policy package-deal not very different to the other one’s. Whichever package you pick will include policies you don’t like. But the minor party and independent “new entrants” to the political market give consumers a wider choice by forcing the big guys to “unbundle” their packages.

Sounds more like democracy’s supposed to be.

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2022: The year our trust was abused to breaking point

As the summer break draws near, many will be glad to see the back of 2022. But there’s something important to be remembered about this year before we bid it good riddance. Much more than most years, it’s reminded us of something we know, but keep forgetting: the central importance of trust – and the consternation when we discover it’s been abused.

Every aspect of our lives depends on trust. Spouses must be able to trust each other. Children need parents they can trust and, when the children become teenagers, parents need to be able to trust them. Friendships rely on mutual trust.

Trust is just as important to the smooth functioning of the economy. Bosses need to be able to trust their workers; workers need bosses they can trust. The banking system runs on trust because the banks lend out the money we deposit with them; should all the depositors demand their money back at the same time, the bank risks collapse.

Just buying stuff in a shop involves trust that you won’t be taken down. Buying stuff on the internet requires much more trust. Tradies call on our trust when they demand payment before they start the job.

Our democracy runs on trust. We trust the leaders we elect to act in our best interests, not their own. Our country’s co-operation with other countries rests on trust. Of late, our relations with China, our major trading partner, have become mutually distrustful.

The trouble with trust, however, is that it can make us susceptible. And, as Melbourne University’s Tony Ward reminds us, it can be just too tempting to the less scrupulous to take advantage of our trusting nature.

They can get away with a lot before we wake up. But when we do, there are serious repercussions. Much worse, the loss of trust – some of it warranted; much of it not - makes our lives run a lot less smoothly.

The truth is that, as a nation, we’ve slowly become less trusting of those around us. But this year is notable for events where trust – or the lack of it – was central.

It’s widely agreed that the main reason the federal Coalition government was tossed out in May was the unpopularity of Scott Morrison. The Australian National University’s Australian Election Study has found that the two most important factors influencing political leaders’ popularity are perceived honesty and trustworthiness.

Its polling showed Morrison 29 percentage points behind Anthony Albanese on honesty, and 28 points behind on trustworthiness.

By contrast, many were expecting Daniel Andrews to be punished at the recent Victorian election for the harsh measures he insisted on during the pandemic. It didn’t happen. We don’t have fancy studies to prove it, but my guess is he retained the trust of the majority of voters.

The ANU study always asks questions about trust in government. This year it found 70 per cent of respondents agreeing that “people in government look after themselves” and only 30 per cent agreeing that “people in government can be trusted to do the right thing”.

This helps explain why the federal election was no triumph for Labor. The combined primary vote for the major parties fell to 68 per cent, the lowest since the 1930s. Labor’s own election report explains this as “part of a long-term trend driven by declining trust in government, politics and politicians”.

But don’t put all the blame on the pollies. This year opened our eyes to the risk we run of the businesses we deal with allowing our identification details and other private information to be stolen by hackers and made public.

Customers of Optus, Medibank and some other firms have learnt the hard way that the businesses who demand so much identification from us can’t be trusted to keep that information secure.

It’s been a wake-up call not only for those big businesses and others, but also for the new federal government. If businesses can’t be trusted to do the right thing, they must be required to do so by tighter regulation.

Oh no, not more red tape? Yes, and that’s my point. There’s nothing that generates extra expense and slows things down more than not being able to trust the people you must deal with.

Ward reminds us of the benefits of a high level of trust. It reduces “transaction costs” – the cost of doing business. “Profits and investments are higher if you don’t have to spend lots of time and money checking whether other parties are honest or not,” he says.

“People invest more in their own education if they believe a fair system will reward their efforts. If you think the system is rigged, why bother?”

Comparing countries, economists have found strong links between more social trust and higher levels of income. Trust is one of the top determinants of long-term economic growth.

And high-trust societies, with less distrust of science, had better outcomes in tackling COVID. That’s one respect in which we didn’t do too badly this year.

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