Possums Pollytics

Politics, elections and piffle plinking

Archive for March, 2008

Roosting Chickens and Murray Plans.

Posted by Possum Comitatus on March 27, 2008

This exciting new broad agenda replaces words with actions” says the COAG communiqué. Yes, well – they all say that. What gives it a bit more giggle power here is that it’s specifically referring to the red tape reduction strategies associated with the business deregulation program.

If you listen carefully, you can here the Big Kev chants of “I’m excited!” emanating from living rooms and workplaces around the country.

Yet the red tape reduction strategy is far from being a broad new agenda. It’s simply a continuation of a previous ongoing COAG program – in this case going all the way back to the Banks Report, where the only thing new about it is the dozen extra pieces of regulation that have been added to the 27 already in the program. Oh – and the packaging, that’s new! It now says the ALP leading the way in Commonwealth/State relations rather than the Coalition.

When you read across the entire COAG document, most of the heralded achievements are either like the regulation reform program in that they are simply a continuation of existing programs – especially the Murray plan, or they are really low hanging political fruit that makes a loud media bang, and which merely kicks the real detail work down the track for later.

It’s a clever piece of politics that must be making the Coalition choke – the Murray Plan particularly.

This $10 billion back of the envelope Murray plan, which many of us might remember passed the “common sense pub test” – apparently the benchmark standard of good governance in those dying days of the last regime – was not only Howard and Turnbull’s creation, but it warped into a political weapon that has now ironically exploded in the face of its creators.

The Murray plan was mostly politically driven to begin with – it gave the Coalition something to present to the electorate as an example of how they were still a government capable of solving problems and taking on new challenges. The expedience of its creation spoke volumes about its true purpose.

But after the plan kind of flopped in terms of winning back public support, it conveniently segued into the new political strategy that the Liberals developed of attacking the Labor States. This new strategy that popped up mid 2007 was essentially an exercise in trying to diminish the Labor brand and get to Rudd via the backdoor, since brand Rudd was proving to be impenetrable to piffle like Brian Burke, stripper gate and the other fluff the Coalition and their stooges threw at him.

We knew this strategy was in place because we saw it in the notorious Oztrack33 Crosby Textor document and at the time you couldn’t find a Coalition politician that wasn’t dragging the theme of failing Labor State governments into their media appearances.

By June 2006 the Murray plan looked like it was a done deal among all the players, with even Victoria reaching in-principle agreement after dialogue between Turnbull and Bracks. The Coalition could have sown up the agreement then and there if they really wanted to – all it would have taken is for Howard to cave in on some of the States fringe demands with a bit of money. But that would hardly fit with the Libs new political strategy at the time. It would be hard for Howard to demonise the incompetence of the State Labor governments on the one hand, while basking in the inevitable media praise of reaching an agreement with those same incompetent States over the Murray on the other hand. Likewise it would have been a silly mixed political message for Howard to be warning the public that Rudd couldn’t stand up to the State governments, while simultaneously caving in to those same State governments himself to get the Murray plan finalised. It all looks a bit silly to bag the States and attack the Labor brand if the States start delivering the goods.

Strangely, as the Coalition political campaign against Labor State governments ramped up through July, the negotiations over the Murray started breaking down – but not for anything the States had necessarily done, but because the Howard government started reneging on parts of the original in-principle agreement. NSW got hammered by Howard changing the responsibility of residual liability issues, Victoria became more convinced that what was agreed to in-principle was no longer going to be delivered. It was also in July that Howard started getting bellicose in the media with threats to use the Commonwealths constitutional powers to seize control over the basin (although just how the mechanics of that was supposed to work was conveniently left out).

What initially started out as a $10 billion Coalition policy designed with helping the government look relevant with fresh ideas, quickly descended into a $10 billion Howard bluff that became a political weapon in the fight against Labor. Howard hoped that essentially giving the finger to the Murray would help him get the electorate to give the finger to Rudd.

Looking back, it was really quite disgraceful what happened and was typical of the way Howard has always played his politics.

Fast forward to yesterday – and now we have this Coalition conceived plan of fixing the Murray again becoming a political weapon, yet this time it’s Labor’s to wield. The Murray plan is being described as a Labor achievement, that Howard stood in the way of making it happen, that Rudds leadership delivered the goods and that it is the perfect example of the new cooperative Federalism that Rudd stands for and which Howard despised and could not deliver.

Not only are the Labor governments claiming credit for many things at COAG that were already well in the pipeline and mostly of the Coalitions doing like regulation reform, not only are Labor claiming success on issues like health and education which are really little more than low hanging fruit that was easy to achieve and took virtually nothing to do so, but they are now claiming success for delivering the policy of the Murray plan – a plan which was originally conceived for political purposes by the Coalition but which later changed into a weapon of political strategy for the re-election of the Liberal party.

The Coalition, but Turnbull in particular must be choking over this since the Murray plan could have been delivered by Howard and Turnbull last year if Howard had not decided to play silly buggers with it instead. Now the Labor party get to bask in all the credit and glory for the plan, they’ll get to write the history of the policy and will no doubt thoroughly enjoy belting the Coalition around the head with it.

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Posted in general politics, spin, strategy | Tagged: , , | 33 Comments »

Now Listen Up Kev – What about this housing bizzo? Part 2 – Policy bits.

Posted by Possum Comitatus on March 22, 2008

Continuing on from Part 1 where we had a quick look at the nature of the data, we’ll head into a potential policy solution for increasing affordability, but certainly by no means the only one. This is a rather long article (5000 odd words) that might not be everyone’s cup of tea, but if we’re going to do this type of thing, we may as well do it properly.

George Megalogenis hit the nail on the head in his article about housing affordability when he said:

“If the Labor Government is serious about getting more people into the property market, while also making those with existing mortgages feel less stressed, it has to find a way to get wages rising faster than house prices over the next few years.”

I’d add that it’s real wages that have to rise faster than real house prices for any increase in affordability to occur – you can see that easily by looking at the graphs from Part 1.

But from a policy perspective this is more problematic. The only real impact that the government can have on real wage growth is through enhancing productivity growth via broader economic reform – and while there is always scope for that, it’s generally a slow hard grind that takes years to deliver. A decade of reform starting in the 80′s took until the early to mid 90′s for the benefits to really show up in the metrics. While the economy today is much more reactive and adaptive to changes than it was 25 years ago, meaning that a new round of reform would probably start delivering observable benefits much earlier – it’s still a relatively laggy process.

Yet it’s the other side of the equation, the “real” house price side of the coin where the political problem becomes front and centre. Any policy that deliberately sets out to reduce nominal house prices would be political poison and realistically would not be countenanced by any government. Political parties are many things, but deliberately suicidal is rarely one of them.

This gets us onto something that really needs to be kept in mind here. When it comes to debating policy change, not enough attention gets paid by independent policy pundits (professional and amateur alike) to the political realities that surround any change in policy. It’s all good and well spruiking some grand policy proposal that could well be economic perfection on a stick over the longer term if, over the shorter term, it would kill the government that implemented it. Even the Hawke government, the most reformist of governments, didn’t introduce many policy programs that were pushed onto its radar (like indirect taxation reform – a GST) because it would have been a political step too far. That’s not to say that purity doesn’t have its place – it most certainly does, but realistically we all need to be mindful of the clichés of politics being the art of the politically doable.

Nowhere is this more acute than when dealing with the largest asset class in the country that forms the backbone of around 60% of the population’s net worth over their lifetime. Deflating housing values for some notion of the greater economic and social good is one thing, but widespread negative equity would be a dead chook hanging around the neck of any government majority.

However, house prices can be reduced in real terms while avoiding the electoral retribution of obvious negative equity and falling house price values if the NOMINAL price of housing is kept flat to small growth and inflation is allowed to erode its real value over time.

The value of my house hasn’t changed for years” incites much less public indigestion than “OMFG! The value of my house is dropping!” – especially when the understanding of “value” that most people hold is one based on ‘nominal’ value (the cost of a house in simple dollar terms when it was purchased compared to its simple dollar value today), rather than real, inflation adjusted value. In many respects, the combination of inflation and time is (and certainly has been in the past on many occasions) a powerful and handy policy tool, even at relatively low levels of 2 and 3%.

The quantitative difference between the publics focus on nominal value and any policy goal’s focus on real value, provides a window for politically sustainable policy activity to deliver between 1 and 3% deflation in the housing market every year (assuming nominal growth in the median house price of between 0 to 1%). It might not sound a great deal, but throw in 10 years worth of time and the compounding effect of inflation slowly eroding the real value of the housing market would deliver a 20-40% reduction in the real value of housing from inflation alone.

Add in real wages growth of 1 to 1.5% per year and we’re talking about a reduction in real house prices in proportion to real wages getting close to halved over that decade period, while avoiding the electoral hysterics associated with falling nominal values of the housing stock.

Once you break it down this way – the problem looks far less insurmountable, and also suggests that drastic action isn’t required, but that slow, thoughtful policy responses can deliver the goods without pissing too many people off or creating any great deal of economic and political dislocation.

But the real beauty here is that it allows for public policy programs to deliver outcomes in the way that public policy works best – incremental behavioural change. Policy is like a good Irish stew; the slower it’s cooked, the better it delivers. A couple of percent change here, a couple of percent change there – add ten years to the mix and we’re quickly talking about serious adjustment.

So if we keep in our thought orbit the idea of maintaining the nominal value of the median house price somewhere around flat to small growth as an overarching policy target for the house price side of the equation, it gives us a foundation to work off in terms of the magnitude of behavioural change that needs to be delivered to ultimately achieve the objective of increasing housing affordability.

POLICY

In the supply/demand nexus that justifiably dominates any discussion on housing affordability (and a great many other things like, say, taxation generally), the debate always seems to become demand centric. Arguments like “Policy X increased the demand for housing” , or “We need to implement Policy Y to reduce demand” seem to take up the bulk of brainspace in these debates – but it’s supply that needs to be focused upon here, and more particularly the how demand affects supply and the spatial distribution of supply. If we want to increase housing affordability, we simply need to increase the number of houses, but ideally we also want large parts of that increase to be, if not geographically where people wish to live, at least in large part where they would be reasonably willing to live. Yet as I argued in Part 1, the starting position for the Australian housing market is one where the supply of reasonably desirable land surrounding large metropolitan centres is simply swamped by demand because we have too few cities. Because each city has a small fixed amount of desirable residential geography – the fewer the number of cities we have, the smaller is the total amount of desirable residential land.

While we can’t just go out and build new cities (as exciting as it may sound for those with a capital works fetish – littering the national landscape with huge white elephants is probably a tad unnecessary), we do have plenty of scope to enhance the growth of larger regional centres organically, by both changing the destination of demand and more importantly the destination of supply, not only through tax and regulatory treatment of housing itself and its consequent price signals, but by assisting regional centres to emulate those economic qualities, but more importantly the origins of those qualities, that drive people to live in metropolitan areas to begin with.

But first up, how do we change the tax treatment of housing to better increase supply?

The current negative gearing regime that has run in conjunction with the two Capital Gains Tax regimes over the last 20 odd years has failed to increase the supply of the housing stock to match the increase in demand. But what is important to acknowledge here are the differing types of demand involved. We’ve had organic demand increasing simply as a function of not only population growth, but also the trend towards smaller household size – that sort of demand is simply a function of life.

But we’ve also had the situation whereby the tax structure applied to housing, in conjunction with the cheap capital costs associated with lowish interest rates in recent years, has increase the investor demand for mostly established housing. The increased competition in the housing market between the organic demand and the investor demand stimulated by tax treatment, has bid up prices across the board. But what it hasn’t done is spurred an increase in supply to match this demand. In a very real sense, we have half of our market not working effectively – and it’s not hard to see why. Investors chasing capital gains growth would maximise that growth by purchasing established housing stock closer to desirable locations (where capital gains are historically greater) rather than invest in new stock which, with our limited number of cities, is now mostly confined to areas far away from those desirable locations (where capital gains are historically much lower). The new supply of housing is essentially doing little more than meeting organic demand that has been pushed out of the established house market by the influx of policy stimulated investor demand.

So why don’t we utilise the tax treatment of housing to directly stimulate new housing rather than established housing?

This can be done without creating a great deal of grief or economic dislocation (i.e. making voters think they’re worse off) – and due to the time it takes to bring new housing stock to the market, we can slowly increase supply to be consistent with the overall objective of maintaining current nominal house price values.

Firstly, keep the CGT regime as it currently exists and grandfather out the existing negative gearing regime to current investors for their currently held properties. This way a government would minimise any backlash from existing investors by avoiding any change to the long term financial plans of existing investors. Those who already have it, keep it until they dispose of the property.

Secondly, keep the current regime for negative gearing whereby losses can be offset against all income sources, but only for properties where the investor is the original purchaser. This isolates loss offsetting against total income to new housing stock only.

Thirdly, for the established housing market, quarantine negative gearing losses to income derived from rent.

This way, the complexities of dramatically changing the CGT regime where someone always ends up worse off is avoided, current policy remains for existing investors until they dispose of currently held properties meaning political grief from that mob is mostly avoided, investment in established housing is still a reasonably viable option for those that are really keen, and negative gearing would finally be structured to actually increase supply by the tax system providing the greatest incentives for investment in new housing stock.

So saying, there will always be those on the fringe that will organise and reorganise their affairs in complex ways to cash in on such targeted incentives when they ordinarily wouldn’t qualify for them – that’s to be expected. But what’s more important is the way incentives change the behaviour of the bulk of the targeted group.

So how would this play out over time in terms of effects?

Increased demand for new housing should spur supply of new housing -but because it quarantines existing investors out of the new regime, there would be no mad rush to adapt (which is important), instead one would expect there to be just a slow, gradual increase in the demand for new housing stock at rates above organic demand levels, providing plenty of forewarning and opportunity for developers to bring new housing stock to the market.

Another consequence would be to reduce demand for established houses, easing pressure on any price growth in the second hand housing market. Even though there would be additional demand for new housing, possibly even to a level where it may start to slightly push up the price of new housing over the very short term, any price rises that occur from this increase in demand would have an effective price ceiling placed on it by the larger established housing market which would now be experiencing softer prices levels because of the way demand has shifted away from established housing into new housing.

A further interesting consequence would be budget savings. Since negative gearing losses claimed by investors would, over time, move from older established housing to brand new housing, there would be far less opportunities available for investors to claim losses via capital expenses and maintenance because the house in question is brand new. One of the biggest rorts of negative gearing are the things that can be claimed as expenses – which in reality are little more than loopholes for subsidising renovations for many. With new houses, gone (over the short to medium term at least) is the capability to redo the kitchen or the bathroom because they are falling apart, or renovate the aesthetics of the outside of the house under the guise of failing guttering and water damaged eaves.

New is new – meaning less scope to claim expenses, meaning less revenue forgone by the tax department (currently it’s about $2 billion a year on negative gearing).

Hopefully it would kill dead the growth in lost treasury revenue that negative gearing has delivered over the last few years. As the proportion of negatively geared new properties grows at the expense of negatively geared established properties, so too would the revenue savings be expected to grow.

One juicy potential of this budget saving is for it to be used to compensate State governments in return for reductions in their fees and charges applied to new land and housing developments.

If the costs of new housing could fall slightly by reducing government fees and charges, that would certainly assist the target of zero to small growth in the nominal value of the median house price – if it could be done in a way that is essentially budget neutral – well that’s the political cherry on top.

The other benefit from using the tax treatment of investor demand to slowly deflate housing prices by simultaneously reducing demand for established homes on the one hand while stimulating the supply of new housing on the other, is that it leaves open the opportunity to change the CGT regime in the future if, after a couple of years, it’s shown that nominal prices are falling or alternatively, rising too fast – giving the government a bit of fine tuning capability to manage the zero to small nominal house price growth target if needed in the future.

Finally, it’s probably worth mentioning the important role that expectations seem to play in the housing investment market. While discussion on the profit expectations of small property investors tends to be dominated by perceptions of capital gains growth (many people expect property will nearly always rise in price despite any empirical evidence to the contrary – you know the type: “You can’t lose with housing, mate”), there’s certainly more complicated dynamics at play. In terms of the risk assessment between property and other investment alternatives that small time property investors make, it’s not only the potential of the growth upside that plays out in the decisions on whether to invest in housing, but equally important are the perceptions of the possible downside of house price falls.

I had a squiz around the place for recent research on estimates of the absolute risk aversion coefficients of small time housing investors in Australia, but unfortunately came up with virtually nothing (if anyone knows of any research in this regard – please let me know!). But anecdotally the downside component of risk aversion for small time property investors seems to be a belief that any house price losses would be relatively small in proportion to the total value of the investment, and would recover over a relatively short time frame. This seems to be verified, anecdotally at least, by a relatively large number of otherwise conservative investors that go into property – including people that believe the share market is too risky a destination for their direct investment (where the downside risks are considered greater than that of property).

So while a policy target of flat to slow growth in the nominal median house price would expect to have consequences of reducing total investor demand as the realisation of small capital gains growth flows through the system, because of the nature of the risk aversion that drives at least some part of the housing investment market, the size of any reduction in total small time property investment one would ordinarily expect to occur through a decade of flattish nominal prices would seem to have a fair chance of being ameliorated to some extent by investors with conservative risk aversion coefficients that aren’t in property only for the capital gains upside, but also because of the minimal risk downside compared to alternative investments.

Add to this that property investment isn’t always singularly about capital gains, but also includes the future capability (after the asset is fully purchased) to provide an income stream in retirement, is perceived as a “safe” asset class that’s relatively liquid and also provides future leverage capabilities – I don’t think the housing investment volumes from small time property investors would necessarily shrink as much as we would ordinarily expect them too in an environment of flat to small nominal median house price growth. I’d be particularly interested in your thoughts on this?

Another thing I’d be really interested to hear your thoughts on regarding the change of housing market expectations is whether it would be likely to have an effect on the overall size of owner/occupier mortgages?

If the reality of flat to small house price growth starts to become institutionalised into the markets expectations, or at least into the market for mortgage owners – would that expectation of small to zero price growth reduce the incentives for borrowers to take out loans larger than they ordinarily would, simply to buy more expensive homes which could then be turned into larger capital gains upon later sale? If perceptions of the capital gains benefit involved with having larger owner/occupied mortgage debt started to erode, what sized impact would that have on the established housing market in terms of reducing the capital gains driven, debt funded price bidding war for established housing stock?

REGIONAL DEVELOPMENT.

While changes to the negative gearing regime alone would be expected to increase housing affordability over time, it’s really tinkering around the edges because it doesn’t address the biggest underlying problem that the country experiences – too few cities providing too small an amount of desirable land, leading to a large supply constraint on desirable urban geography as the starting point for the national housing market.

To maintain longer term housing affordability, this really needs to be addressed otherwise we’ll start running into other problems like our capital cities becoming vast urban basins with enormous redevelopment costs; meaning bloated infrastructure budgets needed just to run large transport networks through existing developments simply to allow the cities to continue growing beyond their current fringes while, still, at least pretending to function adequately.

The big question here becomes one of “If we can’t build new cities, can we do anything that can attempt to emulate in regional centres those qualities that drive people to want to live in our capital cities in the first place?

The most important quality here, and one which has an extraordinary bearing on many of the other qualities that drive people to live in our capital cities, qualities like the provision of services and economic opportunities, is simply the income ceiling of regional centres.

People, particularly young talented people that grew up outside of the capital cities gravitate towards the big metro centres because they can earn more money and have better career prospects.

High income households have enormous consequences on the economic geography surrounding where they live. High income households not only spend more, increasing localised demand and increasing employment to service that demand as a result, but they also purchase goods, but more particularly services that are themselves provided by other higher income earners, which in turn increases the volume of opportunities for localised high paying jobs, or at the very least increases local career paths towards those types of jobs.

Essentially it’s a twist on the old upstairs/downstairs economy playing out, with high income earners (the upstairs economy) not only increasing the demand for goods and services provided by lower income earners (the downstairs economy), but also providing demand for more sophisticated goods and services from the upstairs economy itself. It’s a perfect example of the cliché of “the ladder of opportunity” playing out in the real world.

If you want examples of this, you only have to go to areas at the centre of the resources boom in North Qld to see it happening, where the increase in high income earners has boosted the demand for more sophisticated local services from top quality accountants, lawyers, health professionals and financial advisers, through to more sophisticated and expensive recreation, through to the retail provision of more expensive goods like cars, boats and home entertainment products, which has, in turn, provided a larger number of better paying jobs for the entire local economy.

When I looked at the data for income ceilings and collated it up, I was actually a little surprised by the enormity of the income ceiling that exists outside of our metropolitan areas. To show its full graphic horror – if we accept as our baseline households earning $1999 per week as our income ceiling, we can then use the 2006 census data to show the proportion of families in each of the 150 electorates across the country that earn $2000 per week or more. That proportion of each electorate can be read from the left and right hand sides of the graph, each individual bar is an electorate, and the electorates themselves have been separated into three categories; all metropolitan electorates (the electorates classified by the Australian Electoral Commission as either inner or outer metro), provincial (an AEC classification for electorates surrounding large non-capital city centres that include places like the Gold Coast, Newcastle, Ballarat, Bendigo etc) and rural electorates.

The electorates have also been sorted within their geographic classification from highest to lowest on the proportion of families earning $2000 or more per week.

incomeceiling.jpg

There are two big results here. Firstly, 57 out of the top 60 electorates in terms of the proportion of families earning $2000 or more per week are metropolitan electorates. Secondly, the median proportion for all metro electorates is higher than all but 3 non-metro electorates. Three!… and they are mining boom electorates.

So if we want to solve the great underlying supply problem Australia has, we need to figure out some way of increasing the income ceiling in areas outside of the capital cities, which essentially means eventually delivering an increase of around 50% in the proportion of families living outside of capital cities that earn $2000 or more per week – just in order to get people to perceive that the regional economy in question has an income ceiling high enough to make it a viable alternative to capital city living.

No small ask!

One of the possibilities here is to target high income earners in specific sectors to start the ball rolling – and it’s something that folds into the governments push for a high speed national broadband network (in whatever form that eventually takes).

Are their incentives that could be offered to firms to both encourage telecommuting from their employees that wished to live in regional centres but where their employer was based in a capital city, as well as any possible incentives that could encourage the relocation of some types of high paying firms, or at least units of those high paying firms to regional centres?

That would probably require the new broadband network to have some serious grunt, maybe not quite Fibre-To-The-Home, but certainly, at the very least, the top end of the ADSL+2 spectrum.

Once a decent sized cluster of high income earners develop in a given non-capital city location, the economics starts to become self-perpetuating and the income ceiling starts getting pushed higher as a result as the demand profile of those high income earners starts to affect the broader economy of the area.

I’d also be interested in hearing your thoughts on what you think the other qualities are that drive people to want to live in capital cities, and if there are any policy options available that could be used to emulate those qualities in non-capital city areas? Particularly in terms of incentive based policy options.

UPDATE:

I thought I better add this since I didnt quite explain myself very well here. The usual types of regional development policies associated with decentralisation programs of the past didn’t work particularly well, and probably wouldn’t in the future. The problem when governments come in and start demanding people to do things usually backfires, and the “build it and they will come” school of regional development just seems to create white elephants everywhere. But are their more out of the box type incentives that could be used, not to copy the qualities that drive people to live in capital cities, but to emulate those qualities?

There’s also the big issue of health and education, where families with kids are unlikely to move to regional centres if they think that the quality of their healthcare and the quality of their kids education will decline -considering the state of the health system in most capital cities that might not be too difficult a proposition, but school quality may be.

Yet, unless we can find ways of making more of the population want to live in the regions, we’ll continue to face the problem of the supply of desirable urban geography being limited by having so few capital cities.

On something partially related:

Quite frankly I’m fed up to the back teeth with the vacuous fucktardery over Teh Culture Wars which was rammed down everyone’s throats during the Howard years in some kind of grand exercise of diversional therapy. That includes the idiots that participated in the great pollution of the national agenda on the media’s Op-Ed pages over the last decade, and the editors that thought it was a really shit hot idea to waste everyone’s time by pushing it.

I don’t know about everyone else, but I couldn’t give a rats arse about Teh Evil of Teh Left or Right or whoever it was this week that was going to destroy the fabric of civilisation with their nefarious memes, and I don’t actually know many people that do or ever really did give much of a tinkers cuss – which is funny, because I’d like to think that my circle of acquaintances isn’t exactly a peanut gallery…… but maybe that’s the point.

Every time (which was approximately every day) these irrelevant, self declared and self-absorbed insiders shouted at each other through the megaphone of the national press about, at best essentially nothing, at worst little more than figments of their own political paranoia – I found myself just scratching my arse wondering if this incessant downpour of drivel would ever end.

So it’s really nice to see more serious opinion and analysis pieces about real issues that actually affect national living standards turning up far more regularly of late, like the articles Megalogenis has been writing at The Oz (although he’s been doing that for a quite substantial period of time), a few that have been turning up in the Fairfax broadsheets lately, as well as what seems to be a substantial increase in the quality of the blogosphere over the last few months. – and it’s sure as hell more interesting, important and constructive than the horseshit that gets peddled by the likes of Planet Janet and the menagerie of mental malignancy that have been corralled down at Culture Warrior corner for the last decade wasting everybody’s fucking time…. pardon the French.

It’s a relief to see that zoo finally being emancipated from the public’s attention, assuming that it ever had the public’s attention in the first place, rather than just a disproportional hold over the media real estate.

And not a damn moment too soon can I add.

So keeping with the hope of a re-dawning of rational debate in this country that might even be worth listening to, for any bloggers reading that might like to yak about their own suggestions for housing affordability on their own sites, (or for any aspiring bloggers that have always wanted to, but never had a reason to start up a free wordpress or blogger site of their own until now) tell me via the comments, hit me with a pingback or drop me a mail and I’ll stick a link in to your housing affordability spiel right here. We’ll generate some traffic, we’ll generate some exposure to new ideas and we’ll do our bit to help move the national debate beyond the vapid twaddle that’s infected the recent past. After all, you’d be surprised at who is actually reading.

Also worth having a squiz at are the following pieces and suggestions on improving housing affordability:

Gary Sauer-Thompson has an interesting discussion on the changing nature of demand for different urban housing types. Worth reading on this was a piece the Fin Review ran over Easter in their Review section by Christopher Leinberger, which can be seen over at The Atlantic. Demand in the US for legoland developments is in decline with a projected surplus of 22 million large-lot homes by 2025, while higher density mixed-use urban developments are booming. Australia has only partially followed the US history of residential living trends – but that article certainly provided some data worth chewing over.

Christopher Joye and Joshua Gans with a timely proposal for an AussieMac , a means to maintain competition (i.e. keep mortgage rates down organically) in the domestic mortgage market during periods of international volatility in credit markets that have little to do with the overall integrity of the Australian mortgage market. Also over at Larvatus Prodeo where Joshua Gans says in comments, ” I keep asking the question “why not?” and have not heard an acceptable answer” – which is a pretty good way to put it.

From Sean of http://www.housingaffordability.blogspot.com fame comes an ominously titled forum called: http://forum.globalhousepricecrash.com/index.php?showforum=9.

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Posted in General Economics | Tagged: , , | 73 Comments »

Now Listen Up Kev – What about this housing bizzo?

Posted by Possum Comitatus on March 18, 2008

In an act of impeccable timing, George Meg over at the The Oz on Saturday had a great article on housing affordability (which has now turned up on his blog) and is a must read.

As happens disturbingly often with Mr Meganomics ( and why the timing is impeccable), I’ll often be planning to write about some particular thing, having a number of ideas floating around my head, only to be beaten to the punch by George not only on the topic, but often on the content and sometimes on the data as well. It gets a bit tin foil hattish at times.

There is very simple root cause to the lack of housing affordability in Australia, but it is also a cause that has virtually no easy solution – Australia simply has too few large cities for the proportion of our population that chooses to live in an urban environment. As a result, the supply of desirable urban locations to live – be they inner city or hilltop or hinterland or bayside locations relatively near a city centre – is swamped by the enormous demand. Desirable locations lead the charge in house price growth which pulls the price of all suburbs up with it, generally in decreasing amounts the further away one gets from the suburbs with a high desirability premium.

But since we can’t really change this situation over any time frame shorter than the very long term, even if we were to attempt to, the policy options left to address housing affordability issues become more complex as a result of our policy options being forced to try and affect the affordability ends from policy angles that aren’t necessarily the root cause of the affordability means.

As always, we should probably look at the data first and for those non-economists reading I’ll walk you through what I’ve done each step of the way. I’ll divide the posts into Part 1 and Part 2. Part 1 will develop a ratio of the real median house price to the real annual average male full time ordinary earnings, where both are adjusted for State based (rather than national) inflation, and both denominated in 2007 dollars so we can see how the real state of housing affordability has changed over the last 25 years.

In Part 2, the next post, we’ll get to the policy options.

PART 1

The two key metrics that are the foundation of housing affordability are income and house prices, with interest rates floating around as a third lesser order, though still important issue.

One of the most useful indicators of housing affordability is what’s called the median ratios – the ratio of the median house price to the median wage. What it tells us is how many times the median wage it costs to buy the median house. But there are also two things that should be taken into consideration when measuring housing affordability over time – the spatial distribution of wages and house prices (such as how the relationship between the two in different states plays out) as well as adjusting both for inflation to give real values, which in turn provide more meaningful results.

Unfortunately, I couldn’t get access to median wage data on a state by state basis over a decent time span in a timely fashion (which will become part of a larger bitch and moan I’ll have in another “Now listen up Kev” post in the near future – better national organisation of data sources to assist productivity growth), so instead of using median wages, we’ll use average full time male ordinary earnings from the ABS. The problem with this measure is that it gives an impression that the “average person” earns more than they actually do compared to using the median wage measure. This happens because high income earners skew the average upward. This is IMPORTANT to keep in mind. So while not perfect, it will still give us a consistent feel for the data over time even though “average” is slightly higher than the median (which is the income amount that exactly 50% of the population earns more than and 50% earns less than)

If we have a look at the annual average full time male ordinary earnings over the period since 1983, you might notice something that makes it a pretty useless measure in its current state:

amwen.jpg

A lot of the useful information we need here gets washed out by inflation. So what we need to do is deflate these state based nominal wage measurements by state based CPI to give us a measure of what the real wage levels in the states over time have been, but “real” in terms of local CPI rather than the national aggregate of CPI.  This is a bit of an unusual approach mind you, but IMHO results in a more accurate measure of “real wages” for the purpose of looking at state based housing affordability than using simple national measures of average wages and consumer price inflation. Once we do this, we end up with a dataset that measures the average wage over the last 25 years, but which is denominated in today’s dollar terms.

awer.jpg

So what this allows us to do is to say, for example, that in 1998, the real wage in NSW in today’s dollars was $55000 a year. It lets us see how real wages have changed over the last 25 years now that the average wage has been adjusted for inflation.

What is interesting here is how real wages declined during the 80′s as a result of the Accord being used to control inflation, as well as how the long term benefits of that started to flow through after the 91 recession when real wages took off. Also interesting is how up until 2000, WA and NSW real wages walked virtually in lockstep with each other once they were adjusted for the inflation levels that were occurring in each State.

We can do the same thing for state based median house prices and adjust them for State based CPI to give us a “real” value of how house prices have changed over time by State, as well as measure the whole thing in terms of today’s dollars.

First off though, the nominal, unadjusted data of median house prices, by State, over the last 25 years:

nhp.jpg

After we adjust the data for State based inflation and place it all in 2007 dollar terms we get:

 rhp.jpg

What is really interesting here in terms of housing affordability is that real house prices remained virtually frozen over the period from 1990 through to 2000. It wasn’t until Howard started stuffing around with halving the capital gains rate and things like the first home buyers grant that real house prices started to accelerate.

Now we can create our ratio by simply dividing the real house price by the real average wage, by state, and we get:

ratiosrhprw.jpg

This real ratio tells us by how much the price of housing has increased in real terms. It also highlights in real terms just how much the NSW market has dropped over the last couple of years.

Next up – Part 2, policy options.

Posted in General Economics, policy | Tagged: | 38 Comments »

Newspoll Tuesday – Bon Jovi Edition

Posted by Possum Comitatus on March 18, 2008

If you were thinking that the political story of the morning was the latest Newspoll, well – you’d probably be right. But! As Christian Kerr reports in his new home over at The Oz, the other big news of the day is what Brendan Nelson has declared in the latest register of members interests that was tabled in Parliament yesterday – his ownership of a ticket to see Bon Jovi!

As someone that owns a not inconsiderable number of Bon Jovi albums (shhhhhhhh!), I can sympathise with poor old Brendan here being outed as a bit of a closet fan, unless of course, it’s a cunning plan to boost his stocks with the sympathy vote.

The latest Newspoll figures have the ALP primary vote down 4 points to 47 with the Coalition up 4 to 35 for a two party preferred result of 59/41 to the ALP – a 4 point drop from last poll. Rudds satisfaction is down 4 (to 65) and his dissatisfaction up 5 (to 17) – I suppose that is to be expected after the fabricated nonsense being peddled last week about carers payments getting axed, while satisfaction for the Nightwatchman is up 6 (to 35) and dissatisfaction is down 1(to 37).

But the number that’s been amusing us all lately, the preferred PM rating, has Nelson back into double figures at 10 points! I guess all that hard work during the last fortnight (albeit by some News Ltd journos) paid off.

Keep the faith Brendan!

 

UPDATE:

Ha! I was going to a write a long spiel riddled with Bon Jovi cliches and youtube links, but thought it was too corny.

Guess not from the comments so far! It’s good to know I’m not the only one with a sad sense of humor.

 

Poor Old Nighwatchman – Sure he might have been “the last man standing” in the leadership contest, but from last weeks parliamentry performance, poor old Brendan looks like he’s crying out “I want to be loved”! Have you ever seen anyone ooze such caring from every pore in their body? He had “something for the pain” that everyone was feeling – carers, pensioners, you name a vulnerable section of the community and Brendan was saying “we aint strangers anymore” and “I’ll be there for you”. Unfortunately it all looked a little too much like “love for sale” than any real notion of compassion rediscovered.

The nightwatchman’s “complicated” tenure on the leadership “these days”, where no one wants it just right now, but everyone wouldnt mind a piece of it a little later on means that we can probably all expect more of this type of vacuous “if that’s what it takes” policy theatrics over the coming months. Nelson knows that the reality of his leadership is a case of drawing on one perpetual “last cigarette”, where he’s “damned” whatever he does. In a situation like this, “stick to your guns” seems to be the angle de jure, even if the theme of “everybodys broken” with a dash of “fear” for effect is hardly believable.

On “any other day” in any other year it would be “damned” for the political piffle it essentially is, but Nelson understands that he needs to be seen as having “something to believe in”. For the moment that perception falls away, there’ll be a “whole lot of leaving going on” in his parliamentry support base, and he’ll be “one step closer” to the “bad medicine “ of a leadership spill.

So for now, his motto seems to be “I’ll sleep when I’m dead”, and “hey god”, you know, you’ve just gotta “keep the faith”. While it might be an all too familiar “story of my life” for Nelsons political career, the one thing he does understand is that when it comes to being the leader of a political party – “it’s hard letting you go”. The bloke might look “unbreakable”, but he knows the “bitter wine” that is to come.

After 27 Bon Jovi references, I’m exhausted :mrgreen:

People have asked about Ozforums – I have no idea, they’re down for me too.

 

Posted in Polling | 16 Comments »

The Pollercoaster

Posted by Possum Comitatus on March 13, 2008

Ever wondered what it’d be like to ride the polls?

I present to you the ALP two party preferred vote from January 2000 through to the 2007 election – in a whole new perspective.

UPDATE:

A couple of folks have wondered how it was done. I have a weighted poll average of the major pollsters going back to 2000 as the template – which I’ve built for an eventual PossumTrack polling series to use as my polling benchmark in the future. Each straight run on the coaster represents a year, and the coaster is pretty accurate to the actual polling graphs when the coaster is under it’s own momentum, so in those places where the coaster is really shunting along, as well as those drop offs from a polling peak, it reflects the actual shape of the polling changes which occurred .

The only time that the coaster get’s a little out of whack with the shape of the polling is when the ALP launches into one of their big polling surges. As a result of the coaster running out of momentum on those big steep hills, it has to get pulled up by a chain – but the chain is limited to an incline less steep than the data reality – so the run up the big slow hills are necessarily longer than they actually were in the data, simply to get the coaster to the right height that represents polling results like 58%.

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Posted in Polling | 58 Comments »

Our own not so Super Saturday

Posted by Possum Comitatus on March 4, 2008

crikeylogo.jpg This was me earlier today in Crikey as well.

With the rumour mills and gossip factories working overtime on just which Coalition pollies will exit Parliament and when, it might be time to take a quick squiz at the four most popularly mentioned by-election possibilities over the near term, particularly in light of the dismal polling that’s turning up all too regularly for the Coalition of late.

The four seats we’ll look at today are Costello’s seat of Higgins, Downer’s seat of Mayo, McGauran’s seat of Gippsland and Mark Vaile’s seat of Lyne.

If we look at the two party preferred margins of these four seats over the last 7 elections going back to 1990, it gives us an idea of the longer term demographic forces at work in these electorates.

margins4seats.jpg

The first thing that stands out here is the slow decline in the size of the margin that the Coalition enjoys in Gippsland, where the 2PP vote has been reduced from the 68.9% it achieved at the 1990 election down to the 55.9% it currently sits on. From these four seats, Gippsland is probably the greatest chance to change hands at a by-election, particularly if it becomes a three cornered contest. Continuing demographic change combined with the honeymoon of the Rudd government and poor Coalition polling makes this seat an interesting prospect from Labor’s perspective, especially since its current margin of 5.9% is well within the ballpark of the swings we seem to be seeing from the large pollsters.

If we graph the swing that each of these four seats have experienced over the same timeframe, where a positive swing is a swing to the Coalition and a negative swing is a swing to Labor, we also pull out a few interesting things. We’ll also throw in the national swing to give us an idea on how these individual seats behave compared to the national average.

swings4seats.jpg

What’s disturbing for the National Party here is the result in Lyne. Over the last 4 elections, the swing in Lyne has nearly perfectly mirrored the broader national swing. With every poll showing Labor support jumping between 5 and 10 points from their 2007 election result, Lyne becomes a cause for concern, sitting on a margin of 8.6%.

But the real problem for the Nats in Lyne is the possibility of a 3 cornered contest, as the last 3 cornered contest in Lyne back in 1993 had Mark Vaile coming in over top of the Liberal candidate by a mere 233 votes to take the seat.

The other big problem for the Nats in Lyne is Rob Oakeshott, the independent Member for Port Macquarie in the NSW State Parliament. If he threw his hat in the ring, the seat would simply be his. He would dominate the vote in the northern half of the seat (his current State electorate) which would carry him above the Nats and the Libs, picking up preferences along the way to knock out the ALP if they made it through to the final round of preference allocations.

Mayo and Higgins are different kettles of fish altogether, while we can see that the Coalition vote in Higgins is slowly eroding over time, for Higgins and Mayo to turn politically red would be the upset of the decade – it would take a serious bout of leadership failure for these seats to turn feral.

But what is certain is that Nelsons poor leadership performance in the polling suggests that he is not only failing to bridge the disparate views that make up the twin support bases of the Coalition (with their affluent metro seats like Higgins and Mayo on the one hand, and their regional seats like Gippsland and Lyne on the other), but that Nelson has successfully alienated both groups. At 37% two party preferred, that drop in support isn’t coming from a single place, it’s bleeding from everywhere.

Any string of by-elections for Nelson would bring the problems of the twin support bases of the Coalition to front and centre, as well as his thus far demonstrated inability to manage their opposing interests in a way that doesn’t destroy his own political standing in the electorate and the Coalitions vote share as a consequence. Poor leadership here could endanger seats which shouldn’t even be on the map. Especially in by-elections where the retiring sitting member generally takes around 1.5% of the party vote with them when they go.

Posted in Crikey | 24 Comments »

The Nightwatchman

Posted by Possum Comitatus on March 4, 2008

 crikeylogo.jpg This was me earlier today in Crikey

Politics is a lot like cricket – and I don’t just mean the sledging and the façade of civility. The Liberal top order collapsed with the Labor onslaught of the last election, but faced with Rudd taking the new ball late in the day, rather than the Libs looking for a middle order rally with their Turnbulls and Bishops – they played it defensive and sent in the nightwatchman; Brendan Nelson strode to the wicket.

The problem here is that while Labor are playing a modern version of bodyline and pounding the Nightwatchman into a bloody pulp in the process, the batsmen next in line to occupy the leadership crease seem more than happy to keep Nelson out there, absorbing the political missiles Rudd keeps bowling and they refuse to retire him hurt until he has softened that new ball up just that little bit more – but it’s also at the expense of the score.

Preferably the nightwatchman would be softening the ball up by using his bat -a bit of defensive policy work here and there with the occasional cover drive past Wayne Swan and Peter Garrett to the boundary. But after today’s Newspoll, it looks like Nelson’s been padding up to the bouncers without his helmet on.

The headline two party preferred result comes in at a thumping 63/37 to Labor off the back of primaries running 51/31 the same way. As with the previous Newspoll, it is the Preferred Prime Minister rating that really does the damage with Nelson slipping a statistically significant 2% points down to a new record low of 7%.

While Newspoll states that the maximum sampling error in this poll is 3%, when you get results that are far removed from a 50/50 poll split, the sampling error reduces substantially, to the point where the margin of error on Nelsons preferred PM rating is around the 1.5% mark.

With preferred PM ratings this low, it’s pretty clear that Nelson’s leadership is becoming a limiting factor in the Coalition’s level of electoral support – his only saving grace is that the number of uncommitted responses in the survey are still quite high, with 20% being uncommitted on preferred PM and 33% still unable to decide whether they are satisfied or dissatisfied with his performance.

One expects to see satisfaction and performance dynamics like this when the Opposition leader is failing to cut through and be noticed (think Simon Crean), but with the Coalition primary vote being so disastrous, where 1 in 4 Coalition voters at the last election have now abandoned the conservatives, it also has the whiff about it that when Nelson does cut through – the electorate doesn’t particularly like what it sees.

This doesn’t look like a sustainable political position for the Coalition to be in with a bag full of by-elections coming up. But would the Liberal Party risk exposing their other leadership contenders too early to the Labor onslaught by pulling the plug on Nelson soon – or are the leadership aspirants just content that it’s the hapless nightwatchman and not they whom are taking the shine off Labor’s new ball?

The possible upcoming by-elections of Mayo, Higgins, Gippsland and Lyne could well be decided by what happens next.

Posted in Crikey, Polling | 15 Comments »

Newspoll Tuesday – March edition

Posted by Possum Comitatus on March 3, 2008

Newspoll Tuesday is upon us and its a record breaking 63/37 TPP result to the ALP.

The Nightwatchman has stormed to a new low of 7% as preferred PM, a movement greater than the MoE (for the benefit of Dennis) and Rudd is becoming more popular than a vacant safe seat at Sussex Street with a preferred PM of 73%.

If this trend continues, by mid May it’s possible that the only person in the country that would prefer the Nightwatchman to be PM will be Dennis himself (taking account of the margin of error). But after the caning young Brendan is going to cop over the next few weeks, even that might be debatable.

Anyone know some obscure statistic that 7% of the population experiences? – In this bloggyverse, all I can give you is a cite for your brilliance both here and another place for your troubles and a listing in the Hall Of Fame for such a monumental contribution to the advancement of marginally humorous politics.

But I suppose that’s still more than poor old Brendan is getting at the moment! :mrgreen:

UPDATE:

The Newspoll results over at The Oz are here:

http://www.theaustralian.news.com.au/files/newspoll-4-mar.jpg

 

Posted in Uncategorized | 48 Comments »

Poll Wars Episode 2: Attack of the Clowns

Posted by Possum Comitatus on March 2, 2008

In the lead up to the last election, a period which all seems such a long time ago – there were a number of opinion writers at The Oz whose polling commentary really was in a galaxy far, far away.

The political blogosphere reacted to such arrant nonsense being churned out on a weekly basis by giving the guilty a good clip ‘round the ears and an education in basic statistics. The fallout provided much mirth, not only to the blogospherical participants and readers, but among the journalistic peers of the guilty, lobbyists, parliamentarians, their staff, academics and the broader political insider set generally – the fallout from this little episode culminated in The Oz having a notorious hissyfit in an editorial about how they own Newspoll so the rest of us should just STFU.

It was a memorable, if unedifying spectacle.

This skirmish became known as the Poll Wars, where the first of our contributions here was titled Poll Wars Episode 1:The Phantom Metrics.

A little while ago over in The Oz, our favourite stenographer Dennis Shanahan revived the franchise with a B-grade sequel – a little wet lettuce bitchslap to the bloggers generally, but to this Possum particularly, over Nightwatchman’s single digit preferred PM rating in Newspoll. For those that haven’t yet read it (or have understandably forgotten about it), it’s probably a good idea to go and give it a bit of a squiz. I suggest it works best accompanied with its official soundtrack:

Dennis gets a little frisky over a number of issues in his page 2 column, the first being his opening statement “Where have all the poll pundits and, more particularly, the poll pedants gone?“, suggesting that we just aren’t paying enough attention to him anymore.

While it’s flattering, if a little disturbing, to know that Dennis seeks our eternal attention – I would never dare speak for the other pseph bloggers, but my reasons for not giving three fifths of five eighths of sweet FA’s worth of attention to whatever it is that Dennis is writing these days is pretty simple – the election is over. His type of agenda pollution of the mainstream media coverage of the most prominent and important poll in the country simply no longer has any consequences of any relevance to anyone but Dennis Shanahan.

It was certainly important at the time, but the time for some things eventually passes with history, much like credibility.

After this little piece of introductory attention whoring, the next bit of nonsense worth addressing, and the primary reason why any of it is even on the horizon of this place, is his following quip:

After The Australian put the story, which I wrote, on the front page, it captured public attention and was reported, commented upon and retold in newspapers, radio, television and blogs.

As Possum Comitatus said on Crikey: “While this latest voting intention is hardly newsworthy, even to the poor poll junkies among us, it is the preferred prime minister figure that really grabs the attention.”

Ol’ Possum went on: “While records are meant to be broken, this one was obviously meant to be smashed. Brendan Nelson has stormed into the worst preferred prime minister result in the history of Newspoll with an astonishing 9 per cent.”

So far so good – but it’s at this point where Dennis Shanahan goes troppo, demonstrating that a very little knowledge is indeed a very dangerous thing. He states:

Yet there was one key point missing from all the commentary that has previously cropped up in analysis of Newspolls: in Possum’s words, Nelson “stormed” to his rating by 2 percentage points.

Rudd’s record on preferred PM was also reached by a rise of 2 percentage points.

The margin of error for the Newspoll survey on a sample of 1140 is 3 percentage points. The leaders “stormed” to these records with movements of less than the margin of error.

According to Dennis, what Nelsons Preferred PM rating was in the previous poll is somehow important when comparing the lowest individual scores of Opposition Leaders across a 20 year period. If he believes this to be the case, it really just reinforces why no one seems to pay a great lot of attention to him these days in the blogosphere.

Nelson didn’t “storm” into his dubious distinction of having the lowest ever preferred PM rating in Newspoll history from the last poll, he stormed into this dubious position by simply beating Simon Creans lowest score. He actually did it last month on 11%, but this months 9% just adds another increment to the historical minimum, and single digit figures are really quite a shocker.

This brings us to the most amusing thing about the article – the actual nature of his spiel itself. A well constructed strawman generally requires you to misrepresent the actual nature of an opponents argument into something slightly different, so that you can then proceed to not only burn it down with the fires of rhetoric, but where you can kick the seven shades of shit out of the smouldering embers with a barrage of well organised facts.

While Dennis might do misrepresentation well, his follow up left a bit to be desired.

You might notice in his article that Dennis waves around his “Margin of Error” like a drunken pirate with an acute middle ear infection might wave around a particularly large and cumbersome sabre.

The margin of error as reported from our largest pollsters is predicated on there being an approximate 50/50 split in the poll as the true value. This derives from the way the Standard Error of the poll is calculated via the formula:

Standard Error = se.jpg

 

Where p is the population proportion we are trying to measure (like the proportion of the population that will vote for the Coalition, or the proportion of the population that prefer Nightwatchman as preferred PM) and n is the number of survey respondents.

In practical terms this means that when polling companies state that their Margin of Error is 3% for polls that measure the Two Party Preferred vote – it’s pretty close to being true as the TPP is usually between 50/50 and 60/40 thereabouts. Hence the value of p (the proportion of people that say they would vote for a given party) for the two party preferred vote is roughly 0.5, or 50%

But when a poll produces results that are way outside of that 50/50 split – like the 9% rating for Brendan Nelson, the statistical value of the margin of error actually reduces the farther away the reported result is from that 50/50 split, and reduces substantially.

By how much?

Well for Nelsons preferred PM result of 9%, we can be generous and say that p = 0.1 (the proportion of the population that prefer Nelson as PM vs. the 0.9 proportion that in some way do not), substitute that value into the equation along with the number of survey respondents in that particular Newspoll (n= 1140), and end up with a Standard Error of 0.889

To change a standard error into a Margin of Error for this poll, we need to build a thing called a 95% confidence interval – the 95% value being what all the pollsters use (which basically says that we can be 95% sure that the true result is within our margin of error). To do this is very easy – we simply multiply the Standard Error of 0.889 by the critical value 1.96 (which is the critical value associated with 95% confidence intervals for these things), multiply the whole thing by 100 to turn it into a percentage and Ta Da!

We have a Margin of Error on the Preferred PM poll of not 3% as Dennis states (because he’s just a goose mindlessly quoting Newspoll figures that he doesn’t actually understand), but a Margin of Error of 1.742%

We could be generously conservative to both Brendan and Dennis here and round it up to a nice 1.8%.

So when Dennis takes the flamethrower to that strawman of his where he invents me talking about Nelson storming from 11% to 9% and says “The leaders “stormed” to these records with movements of less than the margin of error.“, he cant even get the basics right.

If I were saying such a thing, which I’m not and I certainly wasn’t in that article he’s quoting from, in an episode of extreme irony it would still be correct because the exact opposite actually occurred – it was the MoE on that poll result which was actually LESS than the movement that occurred.

Not content with just getting the basics wrong in his piece of self-serving piffle, Dennis also found the need to pontificate about those of us in the blogosphere that actually do have an understanding of the polling statistics that so often confuse Mr Shanahan :

Statistical bloggers forever complain about reports of movements of less than 3per cent and essentially want polls to be banished from newspapers and public debate except during an election.”

“Essentially want polls to be banished” eh?

Put it back in your pants Dennis.

I’ve heard some pretty idiotic things in my life, many from the columns of Mr Shanahan himself – but this one is a cracker.

No Dennis, we don’t want polls banished from public debate – far from it, we just want polling to be reported accurately, a feat which the overwhelming majority of the political journos in this country manage easily and with a high level of professionalism. Some, it would seem, just need excuses instead.

 

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Posted in Take downs | 53 Comments »

Regular programming will now resume.

Posted by Possum Comitatus on March 2, 2008

For the last week and a bit I’ve been gallivanting around the countryside catching up with family and friends, and it seems I missed Dennis getting frisky (which will be rectified shortly). I also missed most of the news, the political analysis and the general toing and froing of the news cycle simply as a result of the events of ordinary life taking over my time.

In a very real sense, the level of news and politics I was exposed to for most of the last week or so is pretty much spot on to that which a majority of the electorate experience as a day to day staple – a few minutes of the nightly news, a couple of scraps of the daily tabloid and maybe a radio headline or two if the timing was right.

There really is a profound gap between the level of information that we avid followers and participants in the political system here take on board as part of our basic news diet, and that of the wider public. It’s often easy to forget that the large majority of the electorate isn’t as emersed in the detail of politics that we are here – which is entirely understandable as there is certainly more to life than politics, but it’s also disconcerting in many ways.

If most of the electorate doesn’t know through circumstance, including those which do not care by choice – then those of us that do know and care about the nature and detail of power, government and political behaviour probably carry a larger burden of responsibility than we would ordinarily credit ourselves with having, and certainly more than most of us would ever care to admit.

I guess what I’m trying to say here is thank you. Thank you to those that do watch closely, that do follow the details, that do have (or have made) the time to be able to care enough to be involved. Whether that be through community activity, through online participation, through political participation, through the nature of your employment or simply through having enough of an interest in the world around us to follow the detail closely – it’s the collective consequences of the minority of us that do these things which allow us all, as a country, to at least try to speak truth to power.

And because it is only a minority of us, we are all a little more important than we realise.

Having been gone for a tad, there’s also a little housekeeping to do.

First up, New Matilda has a great political section called PollieGraph that’s worth keeping an eye on, producing a constant stream of political commentary and analysis by some old faces you know and some new ones you may not.

From the folks that gave us YouDecide2007 at the last election comes a new site for those of us north of the Rio Tweed that might be interested in the impending local government elections coming up. Qld Decides is a joint project run by The Local Government Association of Queensland, OnLine Opinion and QUT’s Creative Industries Faculty that brings a citizen journalist approach to local election coverage.

A big thanks for all the suggestions on what we can call Brendan Nelson, there’s some absolute crackers in there.

I’ll be chewing through my mailbox over the next day or so for those that have dropped me a line recently, and over the next week there’ll be posts on educating Dennis, an environmental disaster happening in the Manning Valley, a squiz at the possible by-elections coming up in the federal parliament and the first in a series of policy articles called “Now listen up Kev”.

So, let the regular programming resume.

Posted in general politics | 13 Comments »

 
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