To be sure, it is a familiar enough sight in Australian politics more broadly — ours is a political class obsessed with infrastructure boondoggles — but for the Andrews government major projects were more than a recurring theme; they were the state religion. The premier performed the rites of sod turning and site inspecting as regularly as Mass and recited figures on level crossings removed or hospitals built like counting rosary beads.

And he backed up these prayers and incantations with billions of dollars. As of the last budget, Victoria had approximately $200 billion in projects under way, and was planning to spend an average of almost $20 billion a year over the coming four years on its infrastructure program.

So big was the Big Build — fiscally, politically, physically — that it competes with the state’s traumatic lockdown experience as the dominant element of Daniel Andrews’s legacy. The psychological scars of that time will stay with many of us for a lifetime, but Andrews’s projects are the very fabric of our daily lives. Millions of Victorians use the infrastructure built over the past nine years several times a day. They envelope Melbourne and wind out into the regions, many of them dominating our skylines or otherwise rearranging our neighbourhoods. It is a legacy inscribed in the physical, in concrete and steel; Danist monuments in nearly every quarter of the state.

But what does this tangle of level crossings and tram upgrades, flyovers and tunnels, hospital wards and transmission cables add up to? What, beyond a personal message from Dan to “look on my works, ye mighty, and despair,” does all this stuff actually mean? What is the Andrews infrastructure legacy?

The first thing to say is that the Big Build’s message isn’t coherent. The Andrews government has never adopted a formal, public, long-term infrastructure strategy. It has published documents that claim to put the state’s many and various projects together, but these are retrofilled scrapbooks based around projects chosen with little consideration of how they all work together. As I have argued previously, the Big Build is ad hocery writ large. That makes the program especially vulnerable to the seductions of the boondoggle — projects that look impressive on paper but don’t work out to be all that helpful in practice.

These problematic projects are easier to catch out in the framework of a long-term plan — new schemes only get in if they actually fit into the bigger picture, meet the overarching goals, work well with the other elements. Andrews’s Big Build fails to do this. At best, it speaks of expedience and pragmatism — build now; don’t let the perfect be the enemy of the good. At worst, it is cynically opportunist — build something, anything, and we will get the political dividend. Who cares if it works in the long run? They might as well be pyramids.

And, in many cases, unfinished pyramids at that. The Melbourne Metro, the megaproject Andrews spruiked on his way out the door, is one of vanishingly few projects running ahead of schedule — and even that project has run billions over budget. Others have been bigger fiascos: the West Gate Tunnel, meant to be a simple project to better connect the Melbourne’s port with road freight, has become a quagmire — ensnared in complicated disputes over contaminated soil, three full years behind schedule and in the neighbourhood of $4.5 billion over budget, or almost double the initial price tag.

The Melbourne Airport Rail, meanwhile, due to connect Tullamarine Airport to the metro rail system in 2029, has been put on pause, alongside the Geelong Fast Rail, pending the federal government’s infrastructure review findings. The Suburban Rail Loop’s total cost has been estimated by the Parliamentary Budget Office at double the original forecast — more than $100 billion for the full project, which isn’t due to be fully complete until the 2080s. These half-built, might-never-be-complete projects stand as monuments to the government’s naivety, its impatience, its imprudence.

Finally, the Big Build tells us interesting things about the role of the state under Andrews. Labor brought with it a renewed commitment to an active and interventionist state — a profound step away from the neoliberal model that had dominated state politics since the coming of Liberal premier Jeff Kennett in 1992. This more active posture has held across a broad range of policy domains, including housing, energy, domestic violence, industrial relations, TAFE, early childhood education, and health product subsidies. The Big Build is the big outlier.

True, the government’s infrastructure program constitutes public investment on a scale unseen for a generation. But the Big Build has also been big business. If Daniel Andrews’s rail bridges and road tunnels, hospital wings and prison expansions had credits chiselled into them, top billing would not belong to the State of Victoria but to private contracting companies, private consultancies, private financiers and toll road operators.

They have been the ones actually doing the building, often at considerable profit. Billions upon billions of public dollars have helped engineering firms, design consultancies, contract lawyers and construction companies not only keep afloat but expand massively. At times, private companies have also been the ones to own the assets at the end — or else new public infrastructure has been financed by the sale of old public assets, as with the Port of Melbourne sale that funded many level crossing removals.

More than this, the private sector is also deeply involved in planning, assessing and even suggesting major projects. These are all roles that were once the domain of the public service. Yes, they have been increasingly outsourced since the Kennett era — it is not a wholly new phenomenon. But under Andrews the trend towards contracting policymaking out has accelerated rather than abated. The private sector now intrudes further into the process than ever before.

Some of the Big Build’s biggest projects have been devised from their earliest stages by the likes of PwC and Transurban. It is companies like this that are setting the priorities, developing ideas, planning routes, proposing programs — policymaking on a vast scale, with an eye-watering budget and long-term consequences for millions of people, devised by private, profit-driven, non-transparent and unaccountable businesses.

The Big Build, then, illustrates the profound alliance Daniel Andrews has forged with big business. While he may have brought back a more interventionist state in many realms of Victorian life, he has also given over swathes of the state’s treasure and territory to the private sector. RMIT politics scholar David Haywood calls it the rise of the Rentier State.

Did it all come to an end this week? Does the exit of Dan, alongside the recent departure of his longstanding infrastructure tsar Corey Hannett, and the end of the cheap finance that fuelled the infrastructure boom, spell the end of the Big Build? We should doubt it. In her first press conference as Labor leader yesterday, Jacinta Allan pointed to her experience as the minister for infrastructure as one of the things that prepared her for the premiership. The projects have been as much hers as Dan’s. When Andrews has been on site, in hi-vis, Allan has been at his side, hardhat fastened. The Big Build will plough on.

But can Allan use the chance of a leadership reset, and a faltering budget situation, to rein in the Big Build’s excesses — to transform it from boondoggle city to a coherent plan that prioritises the needs of the public over the profits of the private sector? Or will she simply continue digging the hole deeper? •

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In fact, the most recent set of numbers, from the Age Resolve poll, shows a two-party-preferred lead of twenty points for Labor: Danslide 2 territory. Simply regaining what was lost in 2018, let alone winning a majority, will be a major achievement for the Liberals. And the task is rendered all the more challenging by independent candidates seeking to replicate the “teal bath” of May’s federal election in Liberal seats like Kew, Hawthorn and Mornington. All this in the state once seen as the jewel in the Liberal crown.

And yet, every day, there he is, on the telly, in the papers, on the campaign trail: Liberal leader Matthew Guy trying to scale his election mountain. His climbing pick for this year’s attempt to reach the electoral summit? Health policy. Since returning to the state leadership a year ago, Guy has spent months attacking the government’s alleged mismanagement of the state’s health system — the shortages of hospital beds, trip-zero delays, ambulance ramping, gigantic elective surgery waitlists and more.

To repair the damage, he has promised major investments in new and refurbished hospitals, in massive recruitment and training schemes, and to slash waiting times. The result has been a runaway bidding war on health: so far, the Liberals have promised $4.5 billion for hospital infrastructure alone, and Labor is north of $6 billion, matching the Liberals on some points, exceeding them on others.

To an extent, the strategy suggests the Liberals have learnt from their mistakes. In 2018, Guy led the party to an ignominious defeat after campaigning heavily on crime — and particularly the threat supposedly posed by “African gangs.” The party’s own campaign post-mortem noted that “the focus on African gangs became a distraction for some key voters who saw it as a political tactic rather than an authentic problem to be solved by initiatives that would help make their neighbourhoods safer.”

This time, rather than trying to conjure an issue from the subterranean depths, the Liberals are focusing on the item already at the top of the agenda for many voters. Indeed, the electorate may never have been as acutely aware of limits of the health system as it is after the pandemic. Shortages of staff and beds have led to blowouts in waiting times, with vulnerable patients sleeping in tents and on benches. The Australian Medical Association says that less than two-thirds of emergency department patients were seen within four hours in 2020–21, while the ABC reported that as many as 800 emergency patients went home each day without having been seen.

Delays in answering triple-zero calls, meanwhile, have been associated with a dozen deaths over the past twelve months, and a review of the authority running the service found it not fit-for-purpose. No wonder Guy told his party, “It’s the healthcare system, stupid!” It is indeed an unavoidable and irresistible target for the opposition.

What’s more, campaigning on health has delivered dividends for other oppositions around the country this year. SA opposition leader Peter Malinauskas brought Labor into government in March following a campaign keenly focused on problems in healthcare, and particularly the state’s ambulance ramping crisis. And Anthony Albanese made it into the Lodge at least partly thanks to promises to make it easier to go to the doctor and to get prescription medication. Health is on voters’ minds; health is what is swaying them away from incumbents.

The problem for Matthew Guy is this: campaigning on health as a Labor leader is one thing; doing the same as a Liberal is another. Polls stretching back a long way show voters in Australia tend to trust Labor to handle the healthcare system far more than they do the Liberals. Labor “owns” health just as the Coalition “owns” crime and economic management.

This concept of issue ownership sprang up first in the work of the American political scientist John Petrocik. According to his account, the association of a party with issue competence isn’t necessarily based on actual performance. Voters don’t carefully follow what a party is doing or what a candidate has delivered (or failed to deliver). Rather, the reputation builds up over time and become ingrained at an almost subconscious level — which is what makes it incredibly hard to challenge. Labor owns health almost no matter how bad the health system gets on its watch.

Or, take another example, the Coalition and migration. According to this “sticky” theory of issue ownership, even if Labor adopts the same policies as its opponent, voters will still see the Coalition as more credible and effective at managing migration. These perceptions are entrenched; they are not continuously re-evaluated as new information comes in. A change in issue ownership doesn’t come easily, according to Petrocik. Only an especially acute crisis shakes voters out of their assumptions about who owns what.

Such a notion has profound implications for campaign strategies. It pushes parties to campaign about their issues and to ignore their opponents’ issues. To take the alternative course — to try to show voters why you would do better in your opponent’s areas of strength — is to fall into a kind of strategic trap.

A classic case, the 1994 governor’s race for California, has been described by American scholar Adam Simon. Simon shows how the Democratic frontrunner in that campaign, Kathleen Brown, blew a twenty-point lead against incumbent Republican Pete Wilson. Wilson was unpopular because of the dire economic situation he had presided over in California. But although Brown was the preferred candidate for economic management among voters, he succeeded in moving the focus of the campaign towards illegal immigration, in part by pairing it with his controversial Proposition 187 vote to cut off most social services to undocumented migrants.

Brown’s mistake was to follow Wilson into that territory. She stopped campaigning on the economy and education, started critiquing Wilson’s Proposition and launched her own immigration policies, courting endorsements from immigration-focused groups and explaining to voters that she was tougher than she looked on the question. It was a disaster: Wilson, having polled just 29 per cent support a year earlier, won the election by a devastating fourteen points. Had Brown simply ignored Wilson’s campaign and stuck with the economy, so the theory goes, Wilson would have been toast.

Matthew Guy could well be leading the Liberals into a similar trap. Despite the real problems in the health system, it seems entirely plausible that Labor is still more trusted by most voters on health than are the Liberals. If that’s the case, every time Guy elevates the issue he is sending undecided voters back Labor rather than to the Liberals. Every attack, every promise for more health funding, is another reminder to vote Labor — or so the theory goes.

This is not a sure thing of course — Guy could be making a dent in Labor’s ownership of health. Maybe Victoria’s crisis is acute enough for voters to shake off their assumptions and shift — we shall have to see. But the theory suggests this is close to impossible to do.

Whatever your partisan preferences, there’s something grim about Guy’s campaign on health backfiring in this way. It would seem to encourage more “African gangs”–style campaigning — the strategy of changing the topic, avoiding opponents’ issues, avoiding real dialogue. The Liberals are showing a certain admirable bravery by engaging in real debate about the issue at the top of voters’ agenda rather than trying to direct attention elsewhere. We would be better served, as an electorate, if we had more debates like this. •

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O’Brien is intimately connected to the project, of course — it was his decision as treasurer to fund the immediate commencement of the project in 2013, despite a pending court challenge and Labor’s commitment to dump it, and his decision to issue a special letter to the contractors promising as much as half a billion dollars in compensation if the courts found the project to be invalid.

But personal vindication is not the only attraction for the Liberals. Shadow roads minister Tim Smith points to the $4 billion in federal dollars still on the table for the project that amounts, he says, to a “free road” for the state, something an O’Brien government could begin building “immediately” if elected. Indeed, he wrote in Melbourne’s Herald Sun, the Andrews government’s obstinance over the freeway “borders on pathological.”

Smith’s claims provoked the predictable responses from the Andrews government, which laughed off the project as a waste of money, and from public transport activists, who asked why, having pledged to build the project in 2014 and 2018 and lost both elections, the Liberals might see some political capital this time around. If anyone had a pathological obsession with East West Link, they implied, it must be Victoria’s Liberals.

Both criticisms are worth examining. Even if we accept the opposition’s optimistic appraisals of the project’s economic worth — and we probably shouldn’t — it’s clear that construction would not be the breeze it imagines. Since coming to power in 2014, the Andrews government has sold back many of the homes compulsorily acquired in the first run at East West Link, removed all the planning overlays and approvals that had been granted, and amended heritage protection for large inner-city parks. Building the road would require totally new approvals and acquisitions. That kind of process usually takes at least a year and a half — hardly an immediate start.

Then, in late 2019, the Andrews government nominated a section of Melbourne’s Eastern Freeway for heritage status. The opposition saw this as East West monkey-wrenching, and with some justification: the section nominated is the bit that would require major surgery to connect to an East West tunnel.

None of this makes the building of (some kind of) East West Link impossible, but the booby traps and uncertainties would undoubtedly drive up the time and cost involved. The contracting market is likely to cost in these problems, as well as the broader political risk of the project’s being overturned again.

Even if the market has not tarred the whole state with a “sovereign risk” label — as O’Brien claimed it would back when he was state treasurer warning voters off Labor and its plans to cancel the project— East-West Link would undoubtedly have one attached to it. Recall that even the first time around, in 2014, O’Brien needed to offer the private sector half a billion free dollars just to get the contractors to sign on — and that was before any governments had invalidated any contracts. A second attempt could come with truly eye-watering costs — blowing out even the most optimistic cost–benefit equations.

With that said, I’m not so sure actually building this project matters deeply to the Victorian Liberals. Having seen the debate on East West Link evolve over many years, I’m not convinced the opposition is promising to build East West simply because it believes passionately in its merits, or that the Liberals are so persuaded of its overwhelming utility that they cannot bring themselves to talk about any other projects.

East West Link is not a normal election boondoggle — it is infused with political venom, with outrage and resentment and suspicion of political enemies. It has become a kind of political totem, a symbol caught up in the culture war. A promise to build East West Link isn’t so much a serious public policy proposal but rather a pledge to hoist clan colours over the rivals’ battlements. It is a rallying call — and I’d suggest it is one pitched primarily at a Liberal Party audience.

Lord knows, the state opposition could use a little rallying. Victoria’s Liberals have been enduring a long and gruelling bout of civil strife — something I have written about on these pages before. It is the kind of thing exacerbated by lousy electoral prospects. Polling is infrequent at the state level, but Ipsos put Daniel Andrews’s approval rating at a net positive nineteen points in October last year, when Melbourne’s intense stage four lockdown was in force. The same poll had Michael O’Brien at minus twenty-four approval, and put Andrews thirty-five points ahead as preferred premier.

A month later, perhaps owing to elation at the restrictions ending, Roy Morgan had Victorian Labor with 58.5 per cent of the state’s two-party-preferred vote — better even than the 2018 “Danslide” election, and an indication that things could get worse yet for the state’s Liberals.

A mortifying example of such a fate was soon offered up by Western Australia: there, the state’s Liberal opposition was all but obliterated by Mark McGowan’s Labor government — leaving it with just two seats and the loss of official opposition status. It is little wonder that, two days after the WA election, a leadership spill was attempted in the Victorian Liberal Party — though one that didn’t quite come off.

Hence the chant of East! West! Link! It helps the state’s Liberals focus on Labor instead of themselves. While many Victorians will hear the pledge and ask if we are not, perhaps, past this issue, the intended audience will see the chant as synonymous with “wanton Labor waste” and the notion that Daniel Andrews is somehow captive to the inner-city “cultural left.” East West Link is a rallying cry, a morale booster; it is a skin to pull tight across a war drum — worn, but still making music for the troops who need to hear it.

Of course, this doesn’t mean the Liberals wouldn’t try to build the thing if they somehow plucked the rabbit out of the hat and returned to government sometime soon. Plenty of massive, expensive, disruptive, ineffective, even idiotic infrastructure projects get built mainly for their symbolic value. Many projects are built not as a means to an end — getting people in and out of the city efficiently; power to homes; clean water to taps; homes connected to fast internet — but rather as political shrines, built for the statements they make, the values they embody, the memories they honour or the causes they glorify.

But I wonder if a freshly elected O’Brien government would be willing to expend so much financial and political capital on such a project, simply to shove it up inner-city lefties, build a shrine to its abhorrence of Daniel Andrews’s alleged recklessness, and rehabilitate the one-term Baillieu–Napthine government that commissioned the thing in the first place. I would not be totally surprised if, notwithstanding the beating of the East West drum, that government discovers other pressing priorities. That, or it will be built as a tomb in which to bury a one-term O’Brien government. •

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But the announcement shouldn’t have come as too much of a surprise. The bureaucratic shake-up is slowly but surely becoming a set piece for a newly elected leader, part of the ritual of assuming power. True, Morrison’s side has occupied the government benches for five years now, and the prime minister himself has been in the chair over a year, but recall that most Coalition MPs were resigned to defeat up until, well, just about election night this year. It has taken time for the government to adjust to the startling fact of its continuing existence and start asserting some control over the agenda.

And that’s what the almost-traditional public sector purge and restructure is all about — control. John Howard set the standard in 1996 with his infamous “night of the long knives.” Even before being sworn in, he announced the sacking of six departmental secretaries — from Immigration, Transport, Foreign Affairs, Health, Environment, and Employment, Education and Training. Before the election he had promised “no slash and burn… no punishment of people on the basis of ideology,” but evidently mere proximity to Labor over the previous thirteen years gave him enough to work with. The bitter relationship between the government and the top layer of the public service would linger, with one dumped secretary, Defence’s Paul Barratt, taking the government to court over his dismissal.

Howard’s break with convention was stark. For his idol, Robert Menzies, questioning the professionalism or loyalty of the civil service was strictly the preserve of conspiracists and radicals — not a matter for serious statesmen. Though he had promised to roll back many of Labor’s postwar regulations, Menzies sacked no senior civil servants on taking office in 1949. Even “Nugget” Coombs, one of the architects of Labor’s Keynesian economic strategy, was summoned post-election and told not to worry about his job; he would go on to serve nearly twenty years as head of the Commonwealth and Reserve Banks under the Coalition. Indeed, as Norman Abjorensen reminded us just before Morrison’s purge, Menzies kept on a phalanx of senior Labor-appointed mandarins, and he would come to trust in them sometimes more than in his own cabinet.

Menzies’s relationship with the bureaucracy typified the “career service” model of the bureaucracy: it would be independent, professional and impartial. We saw some cracks in that facade under his successors — John Gorton replacing the long-serving head of the prime minister’s department, John Bunting, with Treasury’s Lenox Hewitt, to murmurs of disgruntlement in the top echelons of the public service, and his successor William McMahon reversing the decision — but for the most part this was the nature of the relationship in the postwar era.

That began to change in a serious way under Gough Whitlam. The Labor leader viewed the bureaucracy, which had not worked for a non-Coalition government in nearly a quarter of a century, as a potential handbrake on many of his ambitious reforms. In his 1973 Garran Oration, he shared his concerns that permanent heads in the Commonwealth Public Service seemed at times to dominate the policy process. In contravention of the Westminster system, he believed, ministers lacked control over policy. And so he announced a strategy to put the public service in its place: he would diversify his sources of advice, bringing in new commissions and inquiries, consultative committees and ministerial staffers to weaken the bureaucracy’s monopoly over policy advice.

Whitlam also made some controversial appointments, including John Menadue, Jim Spigelman and Peter Wilenski — Labor sympathisers or, in Menadue’s case, a former Labor candidate. But there it more or less ended. Like Morrison, Whitlam sought to amalgamate departments, but he conspicuously avoided a purge of department heads. He kept John Bunting as head of his own department, Keith Waller at Foreign Affairs, Frederick Wheeler at Treasury and Clarrie Harders at the Attorney-General’s — old-guard mandarins all, each of them a knight, and some of them destined to became thorns in the government’s side.

Like Whitlam, Labor’s Bob Hawke retained most serving senior bureaucrats, including the controversial John Stone at Treasury. Political scientist Patrick Weller has largely debunked the claim that Labor entered office with a “hit list” of department heads too close to the previous regime. Hawke made one secretary a judge and posted another overseas: not exactly a purge. For the most part, secretaries had their chance to develop a working relationship with their new ministers. But there were exceptions: the head of Immigration was disposed of under mysterious circumstances, while the buying out of Defence head Alan Woods with a chairmanship was clumsily done.

More significantly, Hawke loosened the job security of top mandarins. First, in 1984, “permanent heads” were replaced with “department secretaries,” an ominous shift in nomenclature. Three years later, Hawke abolished the Public Service Board, which had played an important role in the appointment of top public servants. Later, under Hawke’s successor Paul Keating, department secretaries’ tenure was radically altered, making it far easier for governments to get rid of secretaries they found undesirable. Frank and fearless was out of fashion; “responsiveness” was ascendant.

Howard’s 1996 purge, then, wasn’t a bolt from the blue. The federal government had been slowly sliding from a Whitehall-style professional civil service towards an American-style partisan bureaucracy for some time. But it was a shock. Here was an incoming prime minister clearing the bureaucratic decks. Not just a diplomatic posting here and a cosy board job there; wholesale sackings were now in the governmental repertoire.

While Kevin Rudd and Julia Gillard avoided a blood-letting, Tony Abbott sacked four department heads on arrival, including Treasury head Martin Parkinson; and Malcolm Turnbull replaced three departments heads, who ostensibly resigned after he took over the prime ministership, and brought Parkinson back as head of his own department. Now, after recovering from the shock of still being in office, Morrison has ousted five secretaries — just a few months after jettisoning the same Martin Parkinson and replacing him with his party-aligned chief of staff, Phil Gaetjens.

The Coalition has taken the public service so far down the politicised route since 2014 that Labor looked to be sharpening their own long knives ahead of the 2019 election: Gaetjens and Home Affairs head Mike Pezzullo looked like they might be first up against the wall under a Shorten government. It never happened, of course — but a change in leader can now be as dire as a change in government for secretaries sweating over their tenure. The need for new leaders to differentiate themselves, to create new cut-through, new ideas and more responsiveness, is just as great.

Here’s the question, though: does it actually work? Do purges and departmental reorganisations really help prime ministers get a grip on things?

Looking at Howard’s tenure, we might be tempted to conclude yes, it does: those years went on for so long they are routinely referred to as an “era.” But it took time for Howard to become the dominant figure we remember him as. His first term, immediately following his night of the long knives, was distinctly shaky — scandals, broken promises, unpopular policies, flagging public support. Months out from the 1998 election, his net approval rating was in the negative 30s and polls put the Coalition’s primary vote at 34 per cent.

Howard barely made it to his second term, losing the popular vote that October. If there was a political dividend to the 1996 purge, it did not seem to matter two-and-a-half years after the fact. The Australian’s Paul Kelly concludes that the “unjustified” sackings, which “injected bad blood into relations between the new government and the public service,” were one of Howard’s key missteps in his first term.

So it went for Tony Abbott, who seemed to gain little in the way of control from his own purge. Rather, it helped to isolate him and cut him off from critical advice. Martin Parkinson himself reported that public servants were more reluctant to serve the government with gusto after the sackings, because doing so could make one a target for the next government. (Parkinson had worked on climate policy for Rudd and Gillard.) The public service was even less keen to tell the government which of its policies came with fairly serious risks. And, of course, Abbott didn’t make it to his first election as prime minister.

Similarly, amalgamations may seem to grant enhanced control over the machinery of government, but history records that, if anything, they have the inverse effect. This was the recent experience in Victoria, for example. In 2013 Dennis Napthine’s Coalition government brought planning and transport together; in 2015, his Labor successor, Daniel Andrews, added a series of other economic portfolios to create the unwieldy Department of Economic Development, Jobs, Transport and Resources. If anything, amalgamations made it harder, not easier, to control the public service and ensure it was working on the government’s priorities. Over the past two years the government has opted to break that mega-department back up into pieces, the lesson apparently learned.

In the process, however, much was lost. Great chunks of time and money went into relocating, renaming and reorganising the new departments. Morale took a beating too, with the future of this unit or that team unclear each time. Units and authorities were split up or abolished, fragmenting or even losing expertise, documentation and institutional memory. Ask a department to turn over records from their previous incarnation and they will tell you they don’t know where they are, how the filing system worked or who they could possibly ask about it. As Laura Tingle pointed out in her Quarterly Essay, Political Amnesia, endless turnover — of senior bureaucrats and in departmental structures — shatters the capacity of the public service to remember, and thus to learn.

Morrison’s shake-up, then, is a potentially fraught move. History doesn’t suggest it will deliver much in the way of enhanced responsiveness from the public service. Indeed, in some cases these shake-ups appear to have made the life of a prime minister harder. Controlling the bureaucracy can be more difficult, controlling the agenda harder, policymaking riskier. Perhaps governments rather than the bureaucracy are where tighter control is needed, for it takes discipline to put suspicions aside and work with an institution that until yesterday served your bitter enemies.

John Howard had many vices, but one thing he excelled at was learning from his mistakes. Scott Morrison, in so many ways a reincarnation of Howard, doesn’t seem as sensitive to mistakes of the past. •

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When he was elected seven years earlier, in 1992, Kennett had inherited a state hit hard by Paul Keating’s “recession we had to have.” Government debt had gone through the ceiling, unemployment had spiked, a state-owned bank and a major building society had collapsed, the population was shrinking and all manner of services had been crippled by rolling industrial action. Though Kennett dealt with these crises with brutality and even callousness, and though many of his cures would later be seen as worse than the disease, Victoria had performed a remarkable recovery by 1999.

We might expect the electorate to reward the party presiding over such a recovery, regardless of how it had come about. That certainly seems to have been what the Liberals were banking on ahead of that year’s election. But despite the expectation of an effortless win, Victorians took the opportunity to dispatch Kennett and replace him with Labor’s Steve Bracks.

It’s easy to forget just how surprising that result was. Bracks went on to be an incredibly popular premier, retiring well before the electorate had the chance to turn sour on him. The Labor Party still wheels him out when it is feeling nervous — as it was before the 2012 Melbourne by-election, for instance. So it’s tempting to regard his rise as somehow inevitable. Of course his low-key approach was more attractive than Kennett’s combative style; of course people felt bruised and weary after six years of relentless reform; of course rural Victoria felt neglected and was ready to shift allegiance.

But it wasn’t “time” in Victoria in the sense that it had been time for Labor’s Gough Whitlam in 1972. Indeed, Bracks’s victory over Kennett very nearly didn’t happen; on election night, and on the night after, and for four whole weeks following polling day on 18 September 1999, it wasn’t clear who would lead the state into the new millennium. For a full month, Victorians had no idea whether the state was taking a breath before plunging into another few years of Kennett-era hyperactivity, or whether respite was coming with the more cautious, easygoing, no-surprises Bracks.

Kennett had been soaring in the opinion polls before the election — so much so that Labor decided there was little mileage in attacking him personally — and the Coalition had a healthy margin of thirteen seats in an eighty-eight-seat chamber. Channel Nine was so sure the election would be boring it decided to wrap its election night coverage around its Rugby League broadcast. (Sure, the Melbourne Storm were in the preliminaries for the first time, but still, this was footy-mad Victoria.) Journalist George Megalogenis reported that Bracks’s reaction to a poll in the Australian predicting a cliff-hanger result was a suspicion that “the Australian is on drugs.”

Quite early in the evening, though, it was clear something had gone wrong for the Coalition. Voters had swung against the government, particularly in regional towns, to a totally unexpected degree: by 7.2 per cent in Ripon, by 8.1 per cent in Bendigo East, by 9.4 per cent in Gisborne. Labor’s targeting of the regions had been much more successful than even it had anticipated. (“Victoria has a new Country Party,” said political scientist Brian Costar on ABC radio that night, “and its name is the Labor Party.”)

Even on the night, the future premier remained cautiously pessimistic, suggesting victory was many steps away yet. But across town, Kennett sounded remarkably like a man defeated. “I think the public has decided to return a Labor government,” he told supporters at the Hilton Hotel. “If that is the case I will accept that decision with grace and get on my white charger and ride into the sunset. In accepting responsibility I have always said they either love Kennett or they hate him. Looks as though the vast majority, or the majority, probably hate him.” The cream, as journalist Peter Coster remarked in the Herald Sun, had indeed been sucked out of the Kennett cowlick.

By next morning, though, it was apparent that the game was by no means over. At an impromptu press conference, Kennett said he was off the charger and back in his office, where he could see “a fair range of options… from a close Coalition win to a hung parliament to a Labor win.” The papers were reporting forty-two seats for the Coalition and forty-one for Labor, with forty-five needed for a clear majority. A clutch of seats remained too close to call: Mitcham and Carrum in the suburban southeast, Swan Hill up in the north, and Gippsland East.

And then there was Frankston East. On polling day, Trish McLellan, wife of the incumbent member, Peter McLellan, arrived at his unit to find her husband had died of a heart attack overnight. The fifty-six-year-old Liberal-turned-independent had been in high spirits on election eve: having managed to more than double his margin at the previous election, he felt he could capitalise on public antipathy towards Kennett now that he had gone independent in that close marginal seat. His death meant the electoral commission had to declare the Frankston East poll invalid, with a re-run to occur at a later date.

By the end of the week following the election, it seemed possible that Kennett could be back with a majority. An independent — abalone diver and first-time candidate Craig Ingram — had taken Gippsland East with a whopping 22 per cent swing, but the Nationals were edging ahead of another independent (and notorious Australian Rules ruckman), “Big Carl” Ditterich, in Swan Hill. What’s more, the count in Geelong, which had been in Labor’s column, had tightened tremendously: by the Friday, Labor’s Ian Trezise was just twenty votes ahead of Kennett’s housing minister, Ann Henderson.

If the Coalition could hang on to both Swan Hill and Geelong it would reach forty-four seats and push Labor back down to forty. With a win later in Frankston East, Kennett could grab a miracle majority; even if he lost that seat, Labor would find it impossible to form government without Geelong. With the full crossbench onside, Labor’s best-case scenario seemed to be forty-four seats apiece. That would almost certainly lead to a fresh election, at which voters who had wanted to register a protest vote rather than change the government would, Kennett assumed, come to their senses. It was, for a few days of close counting, a tantalising prospect for Liberals.

Overnight on Friday, though, Labor won Geelong. Trezise was ahead by sixteen votes, with only fifteen overseas ballots left to arrive, making it potentially a victory by just one vote. If the result survived a recount, the possibility of a Kennett majority was more or less foreclosed. Over the days that followed, Labor hung on to Mitcham and won Carrum, both by less than 400 votes.

And so the state’s political correspondents shifted their gaze to the three crossbenchers who might hold the fate of the state in their hands. To win, Labor would not only need the support of all three — it would also need to win the Frankston East re-run. Kennett needed just two of the crossbenchers — or one, if he could somehow wrangle Frankston back to his column. Those three independents — Susan Davies (Gippsland West) and Russell Savage (Mildura), both veterans, and first-timer Craig Ingram — exploited their newfound importance to the hilt by negotiating as a bloc with Kennett and Bracks.

On 25 September, as the Kangaroos walloped Carlton in the 1999 AFL grand final, the troika published a charter setting out their joint demands. The list included the reversal of some of Kennett’s most controversial policies, most notably his stripping away of powers of the state’s auditor-general, as well as a judicial inquiry into an ambulance services scandal and major reforms to the state’s upper house. Steve Bracks gave a more-or-less immediate in-principle thumbs up to the entire charter.

Kennett did not. Though he offered what can only be described as humiliating concessions through the first weeks of October — to deal with the ambulance scandal that had played out on his watch; to restore powers to the auditor-general; and to moderate his behaviour and be more consultative — he stopped short of accepting changes to the Legislative Council, offering only an inquiry. Constitutional reform was not something electors had been voting on during the recent campaign, he argued; there was no mandate for such a change. And he warned that, without the support of the Coalition, Labor could not reform the upper house — where the conservative side of politics held a strong majority — either.

In any case, it appears that Kennett never thought he could win over the entire bloc. His hopes rested on gaining the support of the two more conservative MPs in the group: Savage, the former police officer, and Ingram, the self-described conservative from a Nationals area. Susan Davies — a one-time Labor candidate who had described Kennett as a “bully” who needed to be stood up to — was never counted as likely to back Kennett.

The courting, especially of the politically inexperienced Ingram, grew more and more intense through October. Kennett, aided by Nationals leader Pat McNamara, promised to back Ingram’s wish for more water to be directed into the Snowy River. Bracks managed to get Ingram into a meeting with NSW premier Bob Carr, who had a key role to play in any Snowy deal. Although Carr made no promises, the access seemed to impress the as-yet-unsworn MP. Carr also released a letter from Kennett showing that not so long ago the Victorian premier had been less than enthusiastic about environmental flows for the Snowy.

All the while, anticipation built over the Frankston East re-run, scheduled for 16 October. To have a hope of forming a minority government, Labor had to win that Saturday. Its candidate, Matt Viney, a pollster for the party, pulled out all stops. He ploughed his own funds into a campaign video — an actual VHS tape to be delivered to every household in the district. The party dispatched a young Daniel Andrews from the state office to oversee the ground operations. Steve Bracks’s face appeared on billboards up and down the shopping strip — something the man himself seemed visibly squeamish about when he visited the seat, according to the Age’s Sandra McKay.

Jeff Kennett, meanwhile, promised a $39 million funding boost for Frankston Hospital. Members of Victoria Police’s 160-strong Force Response Unit were sent down to Frankston for high-visibility foot patrols, eliciting outrage not only from Labor but also from Police Association assistant secretary Paul Mullett, who told the Age that the timing was just a little too cute. Trish McLellan announced that, days before his death, her late husband Peter had endorsed the Liberal candidate, Cherie McLean, and a leaflet circulated quoting the freshly buried MP as saying, “If I don’t win I hope Cherie does.”

The desperation in both campaigns was palpable. The whole state was watching. Under normal circumstances, Frankston East was a fairly natural if marginal Labor seat — but no one knew how local voters would respond to having the casting vote on which party would form government.

And even if Frankston East went for Matt Viney and Labor, would it be enough to avert a fresh election? Some constitutional experts found themselves explaining to disbelieving reporters that the final decision — to accept a Labor minority government, or go to a fresh election — rested with the governor, Sir James Gobbo (a family name nowadays associated more with police misconduct). Would Sir James accept the crossbenchers’ written assurances that they would support Labor? Indeed, would he recognise the support of Craig Ingram, not yet a sworn-in MP? Or would he feel it was safer to reconvene parliament and have the question tested on the floor? If Kennett lost the seemingly inevitable no-confidence vote, might he advise the governor to dissolve parliament and call a fresh election, as per Westminster custom? Would the governor refuse that request and commission Bracks, or might he be tempted to turn back to the people? Just a month ahead of the 1999 national referendum on the republic, the fate of Victoria’s government looked like it might rest on the vagaries of vice-regal discretion.

In the end, of course, there was no last-minute constitutional skulduggery, no fresh election. Labor triumphed in Frankston East, Matt Viney winning a shade under 55 per cent of the two-party vote. The following day, Bracks’s chief aid, Tim Pallas, would fly east to Gippsland and then all the way north to Mildura to collect the signatures of all three independents on a memorandum of understanding to be presented to Gobbo as evidence of Labor’s majority support — evidence Government House would find satisfactory. After a full month of grasping for a political lifeline, Kennett would relent, resigning as premier and as leader of the Liberal Party.

Things very nearly didn’t turn out that way. Perhaps Kennett could have swung a fresh election — and perhaps, knowing how close things were, he could have run a winning campaign. Or, as Russell Savage later suggested, perhaps the Coalition could have retained government if Kennett had resigned the leadership; perhaps a different leader, with a more conciliatory style, could have won those three over.

Tiny quirks of fate — the small group of voters who decided the result in Geelong; one man’s weak heart in Frankston East; a former abalone diver’s interest in the Snowy River; the latitude afforded to a memorandum of understanding by the chap in Government House — turned out to be as important as the large swing in the mood of the electorate. Cunning, skill, good rhetoric, effective fundraising — all these things are vital in politics. But so too, it seems, is good luck. •

The post The month Victoria held its breath appeared first on Inside Story.

But perhaps the most interesting hire so far is the new leader’s chief of staff, Tim Gartrell, once Mr Kevin07 but largely out of Labor’s orbit in recent years. Way back, Gartrell was a young party apparatchik from the NSW left who worked for unions, was a staffer for junior Keating government ministers, and even managed Albanese’s first campaign in 1996. By the early 2000s he had reached the commanding heights of the Labor machine, first as assistant national secretary and then as national secretary and campaign director for the federal elections of 2004 — Mark Latham’s failed bid — and 2007, the triumphant Kevin07 election.

Fresh from that victory, he retired as national secretary in 2008 and ended what had been a lifetime as a Labor professional. For the past eleven years he has been freelancing in the private and non-profit sector: for Andrew Forrest’s Aboriginal employment company, Generation One; for Recognise, the organisation working for constitutional recognition of Indigenous Australians; and, most recently, for the official Yes campaign in the marriage-equality survey.

Gartrell returned to the party fold in 2017 in a somewhat ceremonial capacity, taking the position of vice-president of the NSW branch. Apart from that, he hasn’t been a Labor machine man for a solid decade now. Bringing him back after all this time suggests that Albanese sees something special in him — and not just his lack of ties to the Shorten era. What might that be? What is so distinctive about Gartrell as a campaigner? What does his selection tell us about the kind of leader Albanese wants to be?

Perhaps the most obvious thing about the new chief of staff is his rhetorical style. Whether he’s at the helm of the Labor machine or outside it, Gartrell’s campaigns tend to be optimistic and non-threatening in tone. As he told the Sunday Mail in 2000, he is not a “kick-the-door-down type of guy.” When Mark Latham looked for people to blame for Labor’s 2004 loss (not himself of course — he had “won the campaign,” he told his diary), he singled out Gartrell as the man who blew it, suggesting he went soft on TV attack ads and failed to warn him about the Coalition’s devastating interest rates scare campaign. Essentially he felt Gartrell was too nice — that he failed to attack and failed to anticipate enemy attacks.

While Gartrell denies he failed Latham strategically, it’s widely accepted he kept the gloves firmly on in 2004, and they stayed on in 2007. Though it went a little more negative that year, targeting Peter Costello and WorkChoices, Rudd’s campaign was, like Latham’s, overwhelmingly hopeful — focused on the future, on “new leadership.” It was the same at Recognise and for marriage equality, and even for his own campaign for the NSW Labor vice-presidency. The messaging was about warm fuzzy feelings, about love and dignity and hope — the sunlit uplands — rather than searing injustice, rights violated or threats to be tackled.

If Liberal strategist Sir Lynton Crosby is the grand master of the dark arts, the Voldemort of Australian campaigning, then Gartrell is the Harry Potter — positive and earnest, perhaps to the point of naivety. If he is true to form and he has any impact on his new boss, we will hear less “politics of envy” from Anthony Albanese and more of the “brighter days lie ahead” talk.

Then there is what we might call the man’s campaign philosophy, a more complicated legacy to assess. It seems pretty clear from the flavour of his campaigns, and from his public observations about them, that he believes electoral politics boils down to having an effective salesperson as leader. When he was asked about the difference between the failure in 2004 and the smashing success in 2007, he told the Courier Mail simply that Kevin Rudd was not Mark Latham. The campaign strategy, the tactics, the rhetoric, the staff — most of that reportedly went unchanged. What mattered was having the right leader, one who could cut through, who could perform for the media, who could tickle the polls, who felt fresh.

Of course, leaders have been increasingly important in Australian political campaigns for the past fifty years, but in the 2000s, and especially in NSW Labor, the obsession reached fever pitch. Leaders were seen not just as important but as totally dominant factors in electioneering. Every aspect of their performance came under intense scrutiny. To win, they had to perform perfectly. If they grew unpopular, or stumbled in the media or in the polls, they simply could not be tolerated; their stumbles could take the whole party down with them.

This attitude would later come to be portrayed as the New South Wales disease, for it was the young NSW machine men — Mark Arbib, Karl Bitar and, yes, Tim Gartrell — who seemed to bring this obsessive leadership focus into vogue for Labor. Paul Keating would refer to Gartrell, along with several other senior campaigners of the era, as “conservative tea-leaf-reading, focus group–driven polling types” who were “frightened of their own shadow and won’t get out of bed in the morning unless they’ve had a focus group report to tell them which side of bed to get out.”

Certainly, they polled and polled again on the popularity of their leaders, disposing of them with great frequency. During Gartrell’s nine years in the upper ranks of Labor HQ, the party dumped Kim Beazley for Simon Crean, Crean for Latham, Latham for Beazley, and Beazley for Rudd.

Again and again, Labor officials were intimately involved in changes that had traditionally been the preserve of MPs. Gartrell appears to have been one of the men giving leaders that tap on the shoulder, showing them the terminal polling, suggesting they may want to make way for a more popular candidate. In 2006, Gartrell’s polling-influenced doubts about Beazley’s leadership found their way into the media in November and kicked off the push that saw Kevin Rudd roll Beazley by Christmas.

At the time Gartrell backed Beazley publicly, but he later told the Sydney Morning Herald that he had been convinced as early as July 2006 that ol’ Bomber couldn’t win the next election. Behind the scenes, Labor HQ was running polls to test Rudd’s popularity. Some of that polling found its way into the media — and, again, Gartrell was forced to deny that the national office had leaked it.

By election night in November 2007, that focus on getting the right leader, no matter the cost, looked to have paid off. Kevin Rudd was admonishing the party to enjoy a quick Iced VoVo and prepare to govern the following morning. It was the first time Labor had won power from opposition since 1983, and a humiliating loss for prime minister John Howard, supposedly the great political master, who was also ousted from his own seat. Tim Gartrell could retire from the Labor Party machine on a high.

He was no longer around, then, when the whole thing fell apart — when Labor discovered it was not beyond ousting sitting prime ministers, just as it had dispensed with opposition leaders. Perhaps the earliest warning sign should have been the removal of NSW premier Morris Iemma in 2008, and then, just over a year later, of his successor Nathan Rees, using methods honed by Labor in opposition at the federal level. It was tough confirmation that holding the responsibilities of office did nothing to inoculate the party against the ravages of the NSW disease.

But the warning was not picked up, and the coup culture consumed the Rudd government and the Gillard government, then spread across to the Coalition, felling prime ministers Abbott and Turnbull. For the decade since Kevin Rudd took office in 2007, no prime minister has served out a term. As Malcolm Turnbull said upon his own ousting, it is a kind of madness.

If Tim Gartrell was one of the brilliant architects of the Rudd victory in 2007, then surely he must also take some of the responsibility for the madness that came afterward. Either he opposed the polling mania, the cult of the leader, and the coups and was utterly ineffective in his efforts, or he condoned them. And presumably, the opposition leader hasn’t hired Gartrell because he thinks him ineffective.

Which suggests that Albanese has sought out Gartrell because he thinks he can help him become a marketable, likeable, election-winning leader just like Kevin Rudd once was. It follows that he shares Gartrell’s view that elections are about having a likeable, responsive leader — and that Bill Shorten simply failed to tap into the public mood. With a better, more marketable leader, Labor can win.

If that is indeed his thinking, Albanese is ignoring the dark side of the Kevin07 legacy. That kind of campaign ate away at the public’s trust in the system and eviscerated political capital for every leader to come after it. Bill Shorten was not unlikeable because he was insufficiently responsive to the public mood — he was unlikeable because he appeared to be trying too hard to please us. People didn’t believe his promises, whether they agreed with them or not. That distrust partly sprang from Shorten’s role in the Rudd–Gillard–Rudd saga, but it also came from the more general stink wafting off major-party politicians.

To make inroads there, Anthony Albanese needs to work hard at appearing transparent and authentic. Flip-flopping, hesitating, being a focus group windsock, telling people only what they want to hear — maybe, this week or that, it will give Labor a bump in the polls, but it will undermine his own leadership in the medium term, just as it has done for all leaders of late.

The real task is to change minds, to engage in some hard persuasion. That might poll terribly at first — it would mean ignoring that feedback and pressing on, at least for a while. For someone like Tim Gartrell that means throwing out the playbook that made him a success last time he was at the top of the Labor machine. Maybe he can do that, but it would mean learning a whole new way to do things, and with brutal scrutiny and a tight timeline all bearing down on him. Perhaps it is a good thing the man is an optimist. •

The post Can Mr Kevin07 create a winning leader? appeared first on Inside Story.

Sir Lynton has been with Boris a long time — in fact, since his first run for the London mayoralty in 2008. At the time, the Australian styled Crosby as Jeeves to Johnson’s Wooster, the man who could keep the colourful conservative on message, who could stop him bumbling around, cracking jokes and seeking plaudits from constituencies that would not, ultimately, count. He succeeded — Boris affected just enough professionalism for the people of London to think he was not too much of a joke to vote for. But Sir Lynton’s value is not, first and foremost, as a candidate wrangler. It is his dexterity in the dark arts of political campaigning that make him a force to be reckoned with — a man to hire or, if one is too slow or squeamish for that, a man to fear.

What is it that he does? How did this son of a South Australian cereal farmer come to be the not-so-secret weapon sending shudders down the spines of senior Tory ministers — and, indeed, Labor leaders in Australia, back in the days he ran John Howard’s campaigns? How did he become this electoral bogeyman? Perhaps it is part sorcery — Fleet Street routinely refers to him as the Wizard of Oz — and Sir Lynton is handy with a “dead cat” distraction, but there is a broader Crosby method, a modus operandi we can see running through most of his campaigns over the past forty-odd years.

It is a technique Crosby largely imported into Australian and then British politics from the United States. He was once introduced to president George W. Bush as “Australia’s Karl Rove,” Rove being Bush Jnr’s campaign mastermind (also known as “Bush’s Brain”). It was a neat description on several levels. Not only was Rove, like Crosby, a lifelong, aggressively conservative election man, but both inherited much of their approach from Republican strategist-in-chief of the late 1980s, Lee Atwater.

Atwater’s toolkit was not for the faint-hearted: belligerent rhetoric, personal smear campaigns, push polling, and dog whistling on race. As campaign manager to Bush Snr in the 1988 presidential election, he focused almost entirely on linking the Democratic nominee, Massachusetts governor Michael Dukakis, to crimes committed by convicts allowed out of prison on weekend furloughs in his state. That effort included the iconic “revolving door” commercial, as well as others even the notorious “dirty trickster” and Trump strategist Roger Stone felt went too far. When Stone told Atwater one ad was simply too nakedly racist, Atwater reportedly dismissed Stone as “a pussy.” Dirty or not, it helped Bush win an unlikely victory, and another term for the Republicans in the White House.

Four years later, Lynton Crosby was instrumental in importing Atwater’s style of politics to Australia. As state director of the Queensland Liberals, he oversaw the 1992 campaign against Wayne Goss’s Labor government featuring claims that Labor had blood on its hands after a prisoner out on early release murdered Sunshine Coast teenager Cheree Richardson the previous year. Liberal ads in the states’ papers told readers Cheree was “dead because Labor’s policies freed her killer from jail before he’d finished his sentence.” In TV ads, Cheree’s father told votes “you’ve got to blame the government.”

It wasn’t an election-winner — at least not that time around. Labor won a comfortable majority and the commentariat largely baulked at the dirty “American” tactics, which had perhaps been imported by two Republican strategists serving as consultants, or perhaps by Crosby himself as a keen observer of the right’s fortunes internationally. Either way, this Atwater approach — exploiting unstated fears in the electorate, aggressively attacking the opposition as not just wrong but positively lethal — has remained the Crosby signature, visible in a whole series of elections he’s managed over the years.

It was most spectacularly on display in the 2001 federal election in Australia, which saw him guide John Howard to an unlikely victory by hammering home fears about border security and terrorism. In 2005, Crosby exported the same rhetorical style to Britain when he took a job advising Conservative leader Michael Howard. As one campaign line had it, “It’s not racist to impose limits on immigration. Are you thinking what we’re thinking?” For Boris in 2008, the attack ads against Labour mayor Ken Livingstone were about teen homicides and Islamic extremists allegedly running Red Ken’s campaign.

In 2015, the Tories claimed Ed Miliband had “stabbed his own brother in the back” to become leader, and was ready to ditch the country’s Trident nuclear deterrent for a deal with the Scottish National Party, or SNP. For Conservative Zac Goldsmith’s run to succeed Boris as mayor of London, Crosby’s campaign featured claims Labour’s candidate, Sadiq Khan, was an apologist for Islamic extremism. Goldsmith’s campaign even penned an article in the Mail on Sunday — accompanied by images of the 7/7 terrorist attacks — asking Londoners if they could vote for a party that counted terrorists among its friends. A Crosby campaign, like an Atwater one, goes negative and it goes for fear.

So much for tactics — what of strategy? Again, a theme runs through Crosby-managed campaigns, and again it was inherited from the Republican Party of Bush and Reagan. Sir Lynton’s long-time business partner, pollster Mark Textor, reportedly learned his craft directly from Reagan strategist Richard Wirthlin, the man who identified and successfully targeted the so-called Reagan Democrats — white working-class voters who felt forgotten by the left.

That has been the Crosby-Textor approach in nearly all the campaigns they’ve worked on. In Australia’s 1996, 1998 and 2001 election campaigns they targeted the same kind of group, “Howard’s Battlers,” in key marginal seats. For Boris in London, Crosby pursued a “blue donut” strategy, targeting Tory-leaning commuters and simply not bothering with inner-city cosmopolitans. For David Cameron in 2015, the advice was to ditch the “big society” nonsense and focus instead on the fears of a Labour–SNP coalition held by small target groups in eighty marginal seats.

So, at a strategic level, a Crosby campaign zeroes in on disgruntled voters in marginal seats and speaks to their deep fears, and only their fears. Legend has it that when he was asked why he hadn’t made the most of an opportunity to meet the Queen, Crosby replied that she was not a target voter in a target seat.

This is a minimalist approach to elections: seek out just enough votes to get over the line, speak entirely to a relatively small target group, and don’t worry about the broader effects of your rhetoric on the body politic. Indeed, don’t worry about obtaining a mandate for a broad policy agenda or building political capital to spend in government. Just get the votes, and just from the places that matter.

Sir Lynton’s formula has not always been successful. Michael Howard put a dent in Tony Blair’s majority in 2005, but that election is not remembered as a big endorsement of the Crosby method. Indeed, David Cameron subsequently had to pour masses of political capital into assuring voters his was not the “nasty” party. Zac Goldsmith’s campaign against Sadiq Khan not only failed to get the Tories across the line; it also caused a significant backlash, including among many senior members of the Conservative Party, and sullied the reputation of Goldsmith, who had been seen as a rising star. Indeed, Crosby even failed to make magic happen for Boris in the last Conservative leadership contest.

But Crosby has also engineered miraculous victories. He was the architect of Kate Carnell’s surprise win for the Liberals in the Australian Capital Territory back in 1995, of John Howard’s four election victories, of Boris Johnson’s two wins in London, and of David Cameron’s unexpected majority in 2015, for which he was knighted. And Crosby’s firm (and thus his formula, if not the Wizard himself) was a key force behind Scott Morrison’s upset victory a fortnight ago. In other words, there is a reason why Sir Lynton and his method are in heavy demand.

Perhaps his latest, greatest coup is now in motion, and his man, Boris Johnson, will be elevated to Number 10. Who knows, perhaps Sir Lynton can even deliver Boris something approaching a majority in a snap general election, if one comes. But to get there, Crosby will feed rather than soothe the bitterness that now consumes Britain. His method salts wounds rather than heals them, and divides and polarises rather than forges compromises and consensus. Britain is already riven by Brexit. Can it really afford another Crosby campaign? •

The post Boris’s brain appeared first on Inside Story.

Twice through the campaign I made my way down the freeway for candidate forums. The first, on a dark and stormy May Day, saw over 400 electors crammed into the quaint Balnarring Community Hall to rage against an LNG import plant proposed for Westernport Bay. The second, last Thursday, was a candidate Q&A organised by the Australian Christian Lobby, with perhaps eighty parishioners and curious locals in the pews of the Holy Trinity Anglican Church in Hastings.

They were different crowds, to be sure: in Balnarring, sea changers, local conservationists and Saturday Paper subscribers sat alongside their climate-striking kids; in Hastings, there was a lot more white hair, dignified knits and posh rugby jumpers. Think Diver Dans and Linda Twists at the former, Harold Bishops, Howard Gribbles and perhaps the odd grumpy Alf at the latter. (Your correspondent’s native Peninsula is roughly as ethnically diverse as Australian TV was in the 90s.)

Nevertheless, both crowds were united by frustration with politics as usual, with party pointscoring, with Canberra obfuscation and evasions. And even if this was a self-selected and less-than-representative sample of the electorate, that’s got to worry local MP and federal health minister Greg Hunt, at least a little.

Flinders has been represented by the Liberal Party and its forerunners for 109 of the 118 years since Federation. It went Labor for short stints — a term here and a term there, after which the well-heeled electors of Mount Martha, Sorrento, Red Hill and Portsea came to their conservative senses. Prime minister Stanley Melbourne Bruce held the seat for thirteen years, Howard government minister Peter Reith for eighteen.

Hunt has held the seat since 2001, and over the six elections in the intervening eighteen years he has never dipped below 57 per cent of the two-party vote. He’s been the member as long as I can remember. So how did his fate come to be in doubt?

Two things seem to have come together to turn Flinders into a contest. The first is the fact that the Liberal Party is on the nose across Victoria. Last November’s “Dan-slide” to Labor saw huge swings in normally safe Liberal seats throughout Melbourne’s east and down to the Peninsula. A few even flipped to Labor: Hawthorn in the inner city; Box Hill, Bayswater and Ringwood in the eastern suburbs; and, overlapping with most of Flinders, the normally safe seat of Nepean.

We can assume a good chunk of that swing came down to the popularity of the Andrews government, but the right-wing populist tinge to state leader Matthew Guy’s campaign rhetoric also seemed to have an impact. So too did the ousting of Malcolm Turnbull, still fresh in voters’ minds then. The Liberals looked like they could no longer maintain the moderate middle ground of Australian politics, and Victoria punished them for it.

Knowing this, opponents of the Coalition have descended on the Peninsula and urged voters there to stay angry. All kinds of groups have popped up, each of them attempting to tie Hunt to what Kelly O’Dwyer might call the “climate-denying, anti-women” wing of the Liberal Party. Wilderness Society billboards up and down the freeway put Hunt’s grimacing face next to Tony Abbott’s, reminding voters he was instrumental in the dismantling of the carbon tax. Huge ads wrapped around the local newspaper, paid for by Trades Hall, ask readers, “Who will Greg Hunt stab in the back next?,” tying him to the ouster of Malcolm Turnbull and positioning him as a Dutton supporter. Indeed, lurking in the bushes outside the Holy Trinity Church in Hastings were activists waiting to ambush Hunt, one of them in a giant papier-mâché Dutton head. Progressives see blood in the water at Flinders, and the hunt for Hunt is on.

The other half of the equation is the candidacy of Julia Banks. Last election Banks ran for the Liberals in the marginal Melbourne seat of Chisholm. She was duly elected and sat on the government’s backbench, but was dismayed by the removal of Malcolm Turnbull and her colleagues’ abandonment of what she calls the “sensible centre.” She quit the Liberals to sit on the crossbench. In November she announced she wouldn’t recontest Chisholm; in January she declared she would run against Hunt in Flinders — where she apparently raised her family — as an independent. From the crossbench she not only supported the efforts of newfound centrist friends like Kerryn Phelps on the medivac bill, but also used question time to put her new opponent under pressure, wedging Hunt between his party and his electorate.

That was the theme of her pitch in Balnarring and Hastings: elect a candidate from a party and you get someone with a split loyalty. Indeed, Hunt wasn’t even present at the Balnarring forum because of an event in Canberra — a point Banks was quick to underline. During her time on the crossbench, she told both forums, she had seen how powerful independent members could be, how they could change the agenda and command the attention of the government. The voters of Flinders could get that if they elected her. They would miss out on it if they sent a government backbencher (here she means Josh Sinclair, the Labor candidate) or returned an opposition member (she clearly doubts a Coalition win).

Nobody at these forums quite made the point that Banks’s experience of crossbench power has come in the context of an effectively hung parliament; the parliamentary arithmetic may not be quite so favourable after the votes are tallied on Saturday night. Instead, people seemed genuinely impressed by her sell — they are sick of politics as usual, of parties and partisanship. (Indeed, Hunt’s emissary to the Balnarring forum, the local state MP, was just about booed off stage when he dubbed the LNG plant “Labor’s gas plant.”) Banks has captured the zeitgeist.

Greg Hunt is clearly rattled by all this. In a number of interviews and public exchanges he’s been rather tense on the topic of his seat and the challenge from Banks. But at the Holy Trinity Church in Hastings, it was clear he’s in this race to win it. In his opening address he made quite a compelling case not only for his candidacy but also for the government, talking about people whose lives have been turned around by newly listed drugs in the Pharmaceutical Benefits Scheme — something he says could only have happened with the economy in good shape. This is what governments are for, he says. This is why he wakes up in the morning. He appears genuinely impassioned, and it moves his audience. It’s the kind of story that could be winning votes for the Coalition all around the country, if only Hunt were able to tell it more frequently. Instead he’s stuck defending his own seat, talking to eighty parishioners in Hastings.

Flinders is not the only Liberal heartland seat to suddenly and rather unusually come into play this election. In Melbourne, after eons as safe Liberal seats, Kooyong and Higgins are both live contests. In Sydney, Wentworth is being defended by independent Kerryn Phelps and Warringah is under siege by independent Zali Steggall — both seats associated with recent Liberal prime ministers. And there are others. We can only guess the resources the Liberals are pulling off the marginal front line to shore up their vote in some of their safest seats, but rumours of more than a million dollars being poured into Josh Frydenberg’s seat of Kooyong — to not much effect, if Monday’s polling is to be believed — gives you a rough feel for the scale.

With the mutiny in Flinders and seats like it, we are a long way away from the days of election campaigns fought out entirely in Western Sydney — days when, for most of us, elections seemed to be decided by other people elsewhere. Far more of the country is experiencing a real contest this election. Far more of the electoral map is in play. The election may well get called early this Saturday night, but the way that majority gets cobbled together and the outcome of some of these weird and unexpected contests will be well worth staying up late for. •

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These battles mostly occur out of the glare of the media — though every now and then an exception proves the rule. From what little we know about this one, there is no anointed candidate lined up to walk into the spot. Former state MPs and candidates, ministerial chiefs of staff, party apparatchiks and rank-and-file members are all having a whack. It looks to be an open contest, and one that could get rough if previous Higgins preselections are anything to go by.

Higgins has been subject of fierce contestation and challenge for a generation or more. There’s no mystery about why: it’s seen as a “leadership seat” for the Liberals. Since the boundaries were first drawn in 1949, a new member for Higgins has always been regarded as a future leader or, indeed, has immediately become leader of the Liberal party room in Canberra. A very safe conservative seat covering Melbourne’s wealthy inner suburbs — your Tooraks, your South Yarras, your Armadales and Malverns — Higgins has given its representative ample time for climbing the greasy pole in Canberra, time that might otherwise have needed to be spent in Bunnings car parks and bowls club AGMs working a more marginal constituency with an eye to the next election. It has allowed the member for Higgins to be a high-ranking minister, twice treasurer, twice prime minister. By definition, it seems, this MP is destined for glory.

And yet Higgins has never produced the long-serving, transformative leader that might be expected of it. Members for Higgins have not quite made it to enduring greatness. Their leaderships have been cut short, or they have never got there in the first place; never quite assumed the leadership, and never quite succeeded in remaking the Liberal Party in their image, as other leaders — Menzies, Fraser, Howard — have. The member for Higgins seems at once to have enormous potential and to never quite meet it. It is the Curse of Higgins.

Harold Holt, for example, was an up-and-comer from the start. By the time he transferred to Higgins in 1949, he had spent fourteen years in parliament and was considered a star. In 1935 he had fended off five other candidates to gain United Australia Party preselection for Fawkner, apparently with consequential and possibly underhanded help from the Australian Women’s National League. (Indeed, according to Smith’s Weekly, Holt’s election confirmed to “the he-men of the party” that “the U.A.P. has gradually but definitely drifted under ‘petticoat’ control.”) Within four years he was minister without portfolio in the first Menzies government, and as early as 1958, when he succeeded Arthur Fadden as treasurer, he was seen as Menzies’s heir apparent.

As prime minister, Holt led the Liberals to a landslide win in 1966. His government looked positively progressive compared with Menzies’s — if not on cold war matters, then very much so on social and cultural ones. He led the (cautious) dismantling of the White Australia policy, made trips to Asian countries never before visited by an Australian prime minister, and appeared frequently on television to communicate more directly with the electorate. It was a more relaxed, more modern Liberal Party, one that wanted to embrace the future rather than cling to a bygone era. Just how far along that path Holt would have taken the party we don’t know; his disappearance at Cheviot Beach in 1967 meant he was gone before he could really wrest the party from the overbearing legacy of Robert Menzies.

John Gorton, on the other hand, had become Liberal leader before being selected as member for Higgins. Having been chosen after the Country Party vetoed the elevation of Billy McMahon to the top job, Gorton needed to shift from the Senate to the lower house. He nominated for Higgins unopposed, easily won the seat, and then guided the Liberals into a new phase of post-Menzies modernisation, advocating for a more pragmatic, reform-friendly, problem-solving approach than had been the norm under his predecessors. His vision was nationalistic, even isolationist: he wound down Australia’s commitment in Vietnam and generally questioned the long-established Forward Defence doctrine of countering communism everywhere in Asia.

Gorton was also a centralist, seeking to boost the involvement of the federal government in areas traditionally left to the states. In this and other areas, he sought to radically transform the Liberal Party. As Quadrant magazine observed in 1968, Gortonism was “exceedingly difficult for the traditional Liberal Party to digest.” Indeed, the Liberals eventually found the task impossible. In 1971 Gorton faced a party-room challenge, the vote tying. He took that as a vote of no-confidence and, bitterly, resigned. He quit the Liberal Party altogether in 1975, sickened by Malcom Fraser’s blocking of supply but more generally believing that the Liberals had become a tribal, hardcore right-wing party, miles away from the pragmatic, centrist Gortonism that had never really taken hold.

Gorton’s replacement in Higgins, Roger Shipton, a local party activist, never quite ascended to the heights of his august predecessors. Perhaps we could more charitably say that Shipton was ill-favoured by fortune. Upon Shipton’s death, Labor senator Robert Ray suggested that he could well have succeeded Holt in 1968 — giving him an early shot at a ministry, perhaps — were a seat not required for Gorton’s shift to the lower house. Then, eight years after he replaced Gorton, and just as he was looking ready to be brought into cabinet, the Fraser government was defeated by Bob Hawke in the 1983 election.

Shipton failed to impress during the cut-throat years in opposition, and party schemers began to eye his seat. In 1989, a plot was hatched to have then–Liberal Party president John Elliott installed in Higgins so he could seize the party leadership from John Howard. Had it come off, Higgins would once again have produced an immediate leader — who knows, perhaps even a third prime minister. But Shipton refused to budge, untempted by offers of board positions and cushy corporate jobs. Elliott held back, and Andrew Peacock toppled Howard instead, taking the party close but not quite all the way to government in 1990.

Plucky young Peter Costello didn’t hold back. With the assistance of Michael Kroger, he laid siege to Higgins, eventually trouncing Shipton ninety-seven votes to twenty-six in the 1989 preselection. With Costello, the Liberals had not only installed leadership material but a new kind of Liberal: a hardcore dry. Shipton was one of three “old Liberals” to be turfed out by the New Right in Victoria that year — Ian Macphee in Goldstein would be ousted by David Kemp, and Ken Aldred was defeated in Bruce by Julian Beale.

As treasurer and heir apparent to Howard, Costello became a dominant figure in the Victorian Liberals, shifting the ideological hue of the party. But he never quite made it to the pinnacle of the party, never quite got the chance to become the long-term leader Higgins seems to demand. Again and again, Howard failed to hand over the reins to his treasurer, as Menzies had for Holt; again and again, Costello failed to challenge Howard. To the surprise of many, he refused to contest the party leadership following the 2007 election. Instead, he retired in 2009, triggering a by-election and a fierce preselection contest for his seat. Though his legacy as treasurer was profound, he never truly managed to step out from John Howard’s shadow. The Liberal Party Costello left was a firmly Howardite one.

The initial set of names being bandied around in 2009 spoke to Higgins’s new status as a seat for right-wing high-flyers. Andrew Bolt, Michael Kroger, Tom Elliott, John Roskam and Tim Wilson were all talked about in party circles. In the end, the contest came down to Costello staffer and NAB lawyer Kelly O’Dwyer, and BRW rich-lister Andrew Abercrombie. Though many other candidates were cleared out of her path by her party patrons, O’Dwyer nonetheless faced some bitter opposition. Sophie Mirabella, the party’s women’s affairs spokesperson at the time, claimed some preselectors had been told Higgins was “not a seat for a woman because it’s a leadership seat,” and that the responsibilities of parliament might break up O’Dwyer’s marriage.

Abercrombie’s camp denied using such arguments, but clearly gender attitudes were a real problem for women in the Liberal Party, then as now — an especially amazing situation considering that women had been the key power bloc, the constituency that had to be won over, during Harold Holt’s 1935 preselection. Despite the resistance, though, O’Dwyer prevailed, the first woman to be endorsed for a safe Liberal seat in metropolitan Melbourne, and once again almost instantly an influential frontbencher.

Ten years later, Kelly O’Dwyer is leaving politics. Though she professes that her reasons are strictly personal, it is difficult not to interpret her resignation in terms of the party’s bitter ideological contest. Like her predecessors in Higgins, O’Dwyer didn’t manage to lead the party into a new era. Her politics, economically dry but socially rather progressive, can’t be said to have flourished in the Liberal Party under Tony Abbott, or even under Malcolm Turnbull. Indeed, mere months before announcing her resignation, O’Dwyer was reported to have warned her colleagues that the Liberals had become widely regarded as “homophobic, anti-women climate deniers.” Like all members for Higgins, she leaves the seat failing to have left an enduring legacy.

This time around, astonishingly, the Liberal candidate for Higgins may not even become the Liberal member for Higgins. Recent polls suggest as much as a 10 per cent swing against the Liberals in Higgins, which would send a Labor MP to represent Toorak and Malvern in Canberra. Perhaps that coup won’t come off, but at the very least we can probably expect Higgins to go from safe to marginal this year. That means more time spent in those Bunnings car parks and bowls club AGMs, and less time building a ministerial career in Canberra. It may well be that for at least a few election cycles Higgins will be a leadership seat no more.

On one level, that might sound like a step down for the member for Higgins. Then again, this might be just the thing to lower those overburdensome expectations; to allow whomever the Liberals preselect to just quietly do their thing, work their way up, perhaps even become leader one day despite having to work hard to keep their seat. Indeed, perhaps because they have to fight to hold their seat, because they are more in touch with the community and hardened by the challenge of keeping their head above water every three years, they will develop the hardiness needed to survive as a long-term leader. It’s no guarantee, but this could be just the thing to finally break the Curse of Higgins. •

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But perhaps the biggest surprise about the royal commission is that it got started at all. The big banks and investment funds know they’re on a pretty good wicket in Australia, with muted competition, a relatively stable, unobtrusive regulatory environment, and some of the biggest profits, proportionally, in the world. From their perspective, it’s a state of affairs worth defending, and that means keeping pesky reformers at bay. To that end, the big players poured tremendous resources into heading off exactly this kind of rolling inquiry.

Indeed, their regulation-hedging has been a long-term project. New research coming out of the Dollars & Democracy project at the University of Melbourne reveals that the nation’s financiers have been making a disproportionate contribution to Australian political parties over the past two decades. Between 1998–99 and 2015–16, according to the project’s calculations, the finance industry donated over $120 million (in 2015 dollars) to the parties.

That may not sound like all that much nowadays. And it’s certainly a drop in the ocean when you consider the fact that the big four banks alone have made a minimum of $10 billion in pre-tax profits every year since the late 1990s. But for the party apparatchiks opening the envelopes, these are significant sums indeed. In fact, finance industry contributions have made up a bigger share than any other industry (yes, including mining and developers) and come in just shy of the contribution made by all the country’s unions combined. If we just look at corporate donations going directly to parties, finance industry dollars make up more than a quarter.

This $120 million captures only one sliver of the industry’s charm offensive. In all sorts of other ways, its members donate to or otherwise seek to shape the agenda for Australia’s parties of government and to steer them away from new regulations. Indeed, the channels of influence are so numerous and tangled that it can be hard to keep track of it all. We really need to focus on an example to have any hope of understanding the breadth and depth of these activities. As it happens, the biggest single finance industry donor over this eighteen-year period was Westpac, so it is as good as any to track. And what holds for Westpac is broadly true of most of the other banks, be it CBA, ANZ or NAB (though NAB has quit making direct political donations as of 2016).

For starters, Westpac donates directly to the major parties. Since 1999 it has donated $33,789,963 to Labor and $21,606,599 to the Coalition parties. Last election it was $2 million for Labor and $2.5 million for the government. Considering Labor’s bank bashing throughout 2016, it might be rather surprising that Westpac would give it almost as much as the other side. Certainly the bank’s strategy differs from the good old days: in the 1949 election, for instance, the banks pumped Robert Menzies’s Liberals full of campaign dollars in order to head off looming bank nationalisation by sweeping the Chifley government from power. They even had tellers handing out anti-Labor flyers to depositors. These days, Westpac opts not to pick a side — rather, it seeks to “support the democratic process” with a bet each way.

This “support” goes beyond direct donations to parties. Westpac funds also make their way more indirectly to the parties via its subsidiaries — Westpac’s BT Financial, for instance, is also a donor — and via industry associations. The Australian Bankers’ Association donated $10,000 to the NSW branch of the Labor Party in 2016–17; the Financial Services Council, of which BT Financial is a member, donated over $100,000 to the major parties last election. On top of this, Westpac also plays banker for, and makes out loans to, an array of party fundraising groups, investment vehicles, unions and associated entities, including the notorious Cormack Foundation, Labor Holdings Ltd, the Canberra Labor Club, the Australian Workers’ Union, the CFMEU and more, so it is intimately involved in many other political money trails.

But it’s not just polymer notes doing the talking. Westpac is also showing up in the halls of power, attending fundraisers and luncheons (sometimes party fundraisers are even held on the banks’ own premises), sending “business observers” to party conferences, and meeting with ministers. The banks send their own people to converse with political decision-makers, as well as their representatives in the Bankers’ Association and other groups.

It also hires corporate lobbyists to do this work for them. The Australian Register of Lobbyists shows that the Australian Finance Industry Association, of which Westpac is a member, retains the services of an outfit called Premier National to represent its interests in Canberra. This is the lobby firm owned by Michael Photios, moderate faction supremo in the NSW Liberal Party and key ally of Malcom Turnbull. Why hire Premier National? According to the firm’s website, one might do this because it helps its clients to “anticipate and influence complex legislative and regulatory changes, keeping them connected with key influencers and mitigating risks to their operations.”

The flow of people is not one way, either. We are familiar with the case of Anna Bligh, Queensland-premier-turned-Bankers’-Association-CEO, but the banks’ in-house government relations units are filled with former politicos too. Westpac’s head of government relations right up until the start of the royal commission, Brett Gale, worked in the Hawke, Keating and Carr governments, and most recently was chief of staff to Chris Bowen while he was assistant treasurer. Marcus James, also part of the unit, worked for Bowen’s successor, Nick Sherry.

These people don’t exactly put up a Chinese wall between themselves and their former comrades — rather, they are valued for their connections, remaining on Capital Hill to lobby their up-until-yesterday bosses and colleagues. And they sometimes return to the fold: Gale has now left Westpac to become executive director of a Labor think tank, the Chifley Research Centre (named after the Labor PM who wanted to nationalise the banks). So there is a revolving door between high-level politicos and the banks’ government relations units.

Taken in isolation, we might think that each of these measures is a little pushy, but basically ad hoc and not especially sinister. But these well-resourced, staffer-stuffed government relations units aren’t paid big bucks for ad hoc. And the notion that their activities extend only to innocent support for the democratic process seems a little less plausible when we put the full picture together: millions of dollars given directly and indirectly to the parties of government, so regularly that they come to depend on it, and all followed up by direct and indirect lobbying by carefully recruited party insiders.

This is less about supporting the democratic process than about inserting eyes and ears inside the parties of government, and indeed, about getting close to the ears of the agenda-setters in those parties. It is about protecting profits and hedging risk, about steering government away from reform or, failing that, getting ahead of the curve. Who knows how many reform pushes they’ve managed to squash over the years?

And yet, here we are, in the middle of a year-long royal commission into the finance industry. The moral seems to be that, even with all the resources in the world, the best one can do is hedge the risk of scrutiny and profit-eating reform. Money talks, but the fact that Labor pushed for the royal commission despite millions in donations from the banks, and despite party insiders-turned-bank-lobbyists urging against it, suggests something else is talking too.

Parties are responding to things other than dollars — public outrage, opportunities for political wedging, scapegoating, that sort of thing. We are not living in a dystopian corporatocracy just yet. Moneyed interests have influence, that’s for sure, but they remain part of a bigger political game in which other players, with other resources, can and do compete. The playing field may not be level, but the game is not totally rigged either — those seeking scrutiny, regulation and reform can and do, from time to time, come out on top. ●

Thanks to Joo-Cheong Tham and Malcolm Anderson at the Dollars & Democracy Project for providing donations data.

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Victorians will be relieved to hear that the real number is nothing like $1.3 billion. Publicly available information shows that the cost directly incurred by cancelling the contracts was $527,600,000 — a lot of money, but less than half the Age’s figure. That’s $339 million in compensation to the private sector for costs incurred (including compo for losing bids to build it); $81 million in bank fees for a facility set up for the project; $217 million in losses on swaps and other hedges; $600,000 spent by the government on legal and consulting fees to get out of the thing; and subtract from that $110 million in cash returned to state coffers. The figure has shifted a little — some of the bank fees and swaps have fluctuated in price or been repurposed for other projects — but it has remained well short of the billion-dollar mark.

The only way we can get past a billion dollars is if we include sunk costs in the total. While the Liberals were still in power on Spring Street, the government spent $365 million on property acquisitions; $200 million on planning and preparatory works; $1.6 million on policing protests against the project; $1.7 million on defending the project against court challenges; and $15 million on an advertising campaign mostly about East West Link. All that gets us up to around $1.1 billion, though the total will be a few million less by now because some of the acquired properties have been sold.

There are other, less direct sunk costs too. Money and time were “wasted” on East West Link — including the legal fees paid by community groups fighting the project; the cost of local council campaigns against the project; and the time spent on the project by government agencies, including Transport, Treasury, Planning, VicRoads, the Environment Protection Authority, planning committees, the cabinet secretariat and Infrastructure Australia — when they could have been spent on projects that actually got built and paid dividends for the community. All this would push the price tag up much higher, higher even than the Age’s $1.3 billion.

But sunk costs are supposed to be ignored in strict economic calculations, and shouldn’t be counted in the cost of cancelling. In the case of East West Link, the choice a rational actor is supposed to make is between $528 million to cancel, and the cost of continuing, and that choice depends on the return on investment.

When the Liberal government signed the contracts for the project, it claimed East West Link would produce $1.40 in benefits for every dollar invested — a $1.5 billion net benefit overall. If that figure was correct then cancelling was a horrible waste. But the benefit–cost ratio was hotly debated, with critics saying it included all sorts of rubbery numbers. One transport-modelling expert I interviewed for my research on the project says it included assumptions “you could drive a truck through.” And then there were the nebulous “wider economic benefits” added in to get to $1.40 — the benefits of agglomeration (businesses being located closely together in the CBD), for example — the kinds of thing not normally included in benefit–cost analyses by other agencies in Australia.

Transport academics and finance experts assessed the true benefit­–cost ratio at more like 0.8, or 80 cents for every dollar invested. If the state government was stumping up $2 billion in capital for the project, the loss would be $400 million. To this we must add the cost of operating the road. The commercial structure for East West Link would have seen the government pay the private sector to make the road available. These “availability fees” would be offset — but only partially — by tolls collected by the government. Financial experts projected in 2014 that if the average toll were $5.67 per trip (roughly comparable to other tolls in Melbourne) then the annual gap between toll revenue and these availability payments would be minus $251 million per year — and that would continue for decades. Suddenly $528 million doesn’t sound too bad.

Indeed, a startling number of big projects like East West Link are ultimately a waste of money. Analysing hundreds of megaprojects around the world, Danish academic Bent Flyvbjerg has shown that cost overruns of up to 50 per cent are common, and blowouts of more than 50 per cent not uncommon. On the other side of the ledger, benefit shortfalls of up to 50 per cent are very common. These are astronomical margins of error, frequently rendering projects uneconomic even if they intuitively look and feel good. And these shortfalls haven’t declined as our methods of calculation and projection have become more sophisticated. Flyvbjerg concludes that initial benefit–cost estimates are generally pure spin, deliberately inflated by project boosters simply because that is how you get funding to start a project. And once the projects start, they are nearly impossible to stop, no matter how bad the blowout.

So, if you think East West Link was a freakish one-off, think again. There are dozens of megaprojects on the books around Australia right now, and if Flyvbjerg’s averages hold — and there’s no reason to think Australia is somehow immune — they are going to cost hundreds of millions more than they give back in benefits. Whether it’s the West Gate Tunnel or North East Link in Victoria, Snowy Hydro 2.0 or Canberra’s Light Rail, Sydney’s Barangaroo or the Adani coalmine in Queensland, all megaprojects are massively risky propositions, and all are quite likely to deliver much less than they promised and cost far more than budgeted.

They can be seductive, these big builds promising thousands of jobs, huge efficiency gains, and grandeur. But, more often than not, these boondoggles are just not worth it. ●

The post The law of large numbers appeared first on Inside Story.

The result has been a very public squabble over just who owns the money — one that has gone all the way to the Federal Court. There, Justice Beach, having pored over thirty years of letters, deals, oaths and entrails, found neither side to be quite right. He traced two shares to the Liberals — now worth just 25 per cent of the fund, and not enough to win any board seats — and left the rest with the independent directors (or perhaps that should be the secessionists?).

Both sides claim this as a moral victory, but in truth it is a stalemate. Round two of the Cormack bout commenced within minutes of the judgement, with Kroger issuing a demand via the assembled media that all remaining non-party shareholders quit the board and hand their shares to the party. The board, it appears, is disinclined to indulge him. After two years of bickering and brinkmanship, the battle for the Cormack kitty seems to have made no progress towards resolution at all.

The debacle puts the Liberals in bad shape for upcoming state and federal elections. The fund is usually its biggest donor, handing over millions to help make each campaign run smoothly. It also helps the party to maintain its Melbourne headquarters, a small CBD office block that Kroger is now looking to sell. As of last year, the official Liberal fundraising body, Enterprise Victoria, was also making a significant loss, with the party going into over a million dollars of debt to keep the operation afloat.

The problems don’t stop there. New donation laws being debated in state parliament would make it very difficult for the Liberals to restock their war chest. (Perish the thought that the Libs’ financial woes might have somehow influenced the timing of Labor’s donation reforms.) Of course, the party will find ways to finance its election campaign this November — donations will still come directly to head office, or perhaps to a fund set up by state leader Matthew Guy, controversially quarantined from the rest of the organisation. Smaller, electorate-based groups raise significant sums, some of which they give to party HQ, the rest to be spent on local campaigns or saved for a rainy day.

But even all added together, those funds are unlikely to make up for the money lost — in the millions — let alone the money that might normally be expected but might not arrive this cycle, especially given Kroger’s antagonising of the Melbourne Establishment during the Cormack battle and other imbroglios. In sum, the Victorian Liberals are in dire straits.

All this comes in the months leading up to a pair of elections, state and federal. Looking at the state electoral pendulum, Matthew Guy is at least a chance for seizing the premiership in November, assuming the party can find the money to campaign. Federally, with late 2018 also a fair bet for an election, the attention tends to focus on marginal seats in Queensland and Western Sydney, but Victoria is also home to some key marginals, particularly in Melbourne’s east.

If the Victorian division can’t find the funds to replace its lamented Cormack dollars, the Turnbull government will be pretty much done for. With a one-seat majority, it can’t afford to sit on its hands in a state with eight marginal seats. The Cormack board is apparently considering sending funds to the federal office of the Liberals, bypassing Kroger and the state division, but whether this can compensate for a breakdown in the state organisation is an open question.

And that’s just the next electoral cycle. Longer term, the financial malaise within the Victorian Liberals could have profound implications for the whole country. Victorians make up 20 per cent of the current Liberal party room in Canberra. They also contribute more than their fair share to the ministry, holding 28 per cent of the Liberals’ places. Both the speaker of the House and the president of the Senate are Victorian Liberals. In other words, Liberals from the Garden State make a major contribution to the governance of the nation. If their organisational wing goes broke and can’t campaign properly, it will be felt at the highest levels.

The financial crisis in Victoria may not simply cause electoral underperformance. It could act as a catalyst for a more profound political change, too. For decades, the Liberal Party in Victoria has been undergoing a major cultural shift, transitioning in fits and starts from a moderate, liberal, pragmatic party to a more ideological, aggressively conservative, anti-establishment one.

As argued previously on these pages, they are essentially going feral, having spent so many years out of power in recent decades. The growing insurgency against the more moderate establishment in the party has been recruiting members, mounting preselection challenges and seizing positions on key organisational committees. It’s easy to imagine a scenario in which these forces seize the opportunity of a financial meltdown or electoral wipeout to mount a wider push for control.

Preselection challenges against sitting MPs are already being openly discussed. If that Victorian 20 per cent of federal Liberal MPs becomes markedly more conservative, the national factional balance could tip, changing the kinds of policies and issues the Liberals pursue and shifting the political centre of gravity. We’ve seen this kind of thing in the United States with the Tea Party, and again in US primaries this month, as Trumpian outsiders replace establishment figures, with drastic effects on the content and quality of political debate in that country. The lesson there is that small revolts in big parties can have disproportionately large impacts on the functioning of a political system.

So the crisis in Victoria’s Liberal Party is worth watching. For better or worse, the kind of politics we have in this country is deeply dependent on the state of our major political parties. If a big state division of one of those parties goes belly-up or dramatically changes character, it will have big implications for the country. Those on the left cheering the Liberal Party’s woes beware: its implosion may not mean that progressivism will come out on top on Spring Street or in Canberra. Instead, it may just poison political debate as a whole and bring about a state of political chaos unknown in this country since the early days of the party system.

You don’t need to like the Liberal Party to acknowledge that, as an institution for aggregating and organising diverse interests, it might make the political system a little more predictable, a little more reasonable, a little more functional. Perhaps it is just a bit too big to fail. ●

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It will be a bizarre election in many ways. For one thing, it features a weird and wonderful line-up of candidates. Liberal-aligned pollster Gary Morgan is hoping he’ll be fourth time lucky, having stood against Doyle three times; councillor Ken Ong, another Liberal, has also thrown his hat in the ring. Colourful independent contenders include activist Phil Cleary, a former federal parliamentarian once tripped up by section 44 of the Constitution, and sporting identity Sam Newman, who is reportedly considering a tilt. Embattled state MP Jane Garrett was thinking of taking a stab too, but decided against it, leaving no Labor-backed candidates.

But the main contest will be between the Greens, who hold this turf at a state and federal level — their candidate is councillor Rohan Leppert — and the Property Council’s CEO, Sally Capp, who is formally unaligned but has backing from segments of both the Labor Party and the Liberals. Altogether, it is a strange contest for those of us accustomed to a fairly clear party divide.

In fact, none of the normal rules seem to apply to the City of Melbourne. Unlike other levels of government and most of its local counterparts, Melbourne elects its top office-holder through a direct, popular vote. Tasmanians and Queenslanders are more practised at this kind of thing — they directly elect all their mayors — but in Victoria mayors are generally elected from and by councillors. The state’s only other exception has been the mayor of Geelong, though that city reverted to indirect elections last year after things went sideways under its colourful mayor Darryn Lyons.

Then there is a quirk in the franchise for Melbourne Council elections. Both residents and ratepayers get a vote — that much is common in Australia (except in democratic Queensland, which abolished the property franchise in 1921). Where Melbourne gets strange is that corporations or joint property holders get a second vote. That’s one vote for people and two votes for businesses — a system that only Melbourne and the City of Sydney enjoy. As a result, says poll-watcher Ben Raue, businesses and non-resident property holders make up a majority of the votes — as much as 60 per cent, leaving just 40 per cent for residents.

This eccentric system makes Melbourne closer to the old rotten boroughs of England than a proper representative democracy. One person, one vote is nowhere to be seen. Or perhaps, if we’re being more generous, it is more like a medieval republic, with trades and guilds rather than citizens electing the Doge. Indeed, in Sally Capp we have one of the most powerful local professions — the Sacred Order of Property Developers — standing its leader for the top job.

Is Melbourne’s electoral system simply a relic of the past? In some respects, yes. The bias to propertied interests, for instance, is as old as the city itself. From 1863, votes were doled out only to ratepayers, with extra votes apportioned depending on the value of their rateable property. Some residents ended up with three votes; many had none.

For decades, that system allowed larger businesses to dominate. But by the 1960s bracket creep had given a majority of electors the full three votes. After plural voting was abolished in 1969, the franchise stayed attached to property rather than residence, and ward boundaries systematically favoured business districts over residential ones. That was the case through to 1982, when John Cain’s Labor government attempted to democratise the council.

In 1982 — yes, 1982 — all residents over eighteen years could vote in the council’s elections for the first time. Labor also watered down the business vote, but never quite eliminated it altogether. At times it crept back through quiet tinkering with the regulations — changes to boundaries, enrolment obligations and so on. By 1993 the pendulum had swung nearly all the way back on the franchise, with Liberal premier Jeff Kennett restoring plural voting with the two-votes for business arrangement we know and love now.

Kennett went further. Though well known for controversially amalgamating most councils, his government actually made Melbourne’s smaller and more intensely focused on the CBD, carving off parts of the surrounding suburbs where the left-wing gentry dominated. The business bias was strengthened further in 1995 with automatic enrolment of two voters per company and fines for a failure to vote. Democracy-wise, Melbourne was almost back to square one.

If the property franchise is ancient, direct election of the lord mayor and his or her deputy is a modern flourish. Steve Bracks’s Labor government introduced this and other changes in 2001. After the third sacking of the council in eighteen years, Labor was seeking deeper reform of the electoral system. It abolished Melbourne’s wards and introduced proportional representation alongside the directly elected mayor and deputy.

The changes made for a very different kind of council election. The first of them, in 2001, shared some characteristics with Senate elections under full-preference group voting. If Antony Green was worried by the massive 2013 Senate ballot paper, nobody show him the 170-page booklet, with its ninety-seven candidates, that was posted to all voters in that first Melbourne City Council direct election. Without wards, candidates also had to run city-wide, high-spend campaigns to have any hope of getting into office — bigger campaigns than had ever been seen in local government elections.

Developer donations have poured into the council’s elections ever since — so much so that in its previous term the council couldn’t assess nearly a dozen major planning applications because a majority of councillors had received donations from the applicant. Despite the appearance of being more democratic, the 2001 reforms probably made Melbourne’s councillors even more beholden to vested interests.

Even with the council’s positively Dickensian franchise and an electoral system reliant on big donations, some people defend the status quo. Stephen Mayne, the Crikey founder who went on to sit on the council, argues that a change to a resident-only franchise would result in an unacceptably left-wing, anti-business council governing the corporate and financial centre of Victoria. Former lord mayor Robert Doyle has argued that taking votes away from businesses would violate the highest democratic principle of all: no taxation without representation.

The local Chamber of Commerce has also railed against any curbing of business votes. Businesses are simply too integral to the city, it says, to be deprived of a say. Indeed, this is the view enshrined in law by the City of Melbourne Act: because Melbourne has “capital city status” and serves many interests that don’t live in it, giving votes only to residents would deprive many of the city’s stakeholders from a say in its governance. Multiple votes for business is part of a balancing act that gives all the important segments of the city a say.

Perhaps. But this sounds a bit thin when we consider the fact that people who work in the CBD don’t get any votes, and they are the biggest users of the city, bar none. Expanding the franchise to even more non-residents is hardly going to be a popular rallying cry, and it’s not something I’m advocating here, but the idea directs us to the big question we should be asking when we look at this election: who owns Melbourne? Nearly a million people live, work, study or visit the City of Melbourne every day — that’s nearly a million people with some kind of claim on the place.

Some claims are stronger than others, of course. Of that near-million, many thousands are regional or international visitors. But many others consider themselves Melbournians, have a real stake in the city and the decisions being made about it, and can only watch, disheartened, as elections like the present one unfold. And what about the Wurundjeri, the original custodians of the land? Perhaps they should get a vote, regardless of residence? Or two votes. Or three. The only influence that they, along with the rest of Victoria, have on the council comes via the state government, which intervenes in city matters from time to time.

But it needs to be asked whether there is any legitimate role for a tiny, gerrymandered business fiefdom in the governance of a modern, democratic metropolis serving millions. The answer is surely no. Whether we get Sally Capp, Rohan Leppert or, somehow, lord mayor Sam Newman this May, let us hope that they will be the last sovereign of this very rotten borough. It is a system well and truly past its use-by date. ●

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Cormack, a key source of funding for the Victorian Liberals, hands over more than a million dollars to the party every year. At least, it did until last winter, when its board decided to turn the tap off. The party, and particularly state president Michael Kroger, is fuming, asserting the foundation is supposed to be managing funds for the Liberals. The board disagrees, declaring itself entirely independent. Both sides have lawyered up and are preparing for a fight to the death in the full glare of the press, nine months out from a state election. Like I said — the wars.

This is not just a run of bad luck for Victoria’s Liberals. It is part of a larger upheaval. For decades now, the state division has been undergoing a slow, painful metamorphosis from a pragmatic, almost centrist Establishment party, to an angrier, more ideological outfit for conservative outsiders. You could say they are slowly but surely losing their genteel civility and going feral.

That’s ”feral” not in any pejorative sense, but strictly in zoological terms. Where once the Victorian Liberals were thoroughly domesticated and moderated by their long residence in the halls of power, they are now part-way through a decades-long process of shedding their pragmatism, their trust in existing institutions and their ideological flexibility. Having spent years in the political wilderness, they are returning to baser instincts and harsher attitudes.

And it has been many, many years now. The Victorian Liberals have held government for just four of the past nineteen years. Federally, Victoria has become a reliable Labor state: Liberals have done poorly, even when they are being swept to power by the rest of the country. Sydneysiders have dominated the party leadership in Canberra for decades. It’s a long time since Victoria was the jewel in the Liberal crown, as it was during the long reigns of Bob Menzies in Canberra and Henry Bolte in Spring Street.

Indeed, it can be difficult to appreciate just how dominant and influential the Liberals were in the now-progressive Garden State. They completely remade Victoria’s politics in the postwar era, founding what could nearly be called a new political order.

Before the Liberal Party arrived on the scene, the state’s politics were notoriously chaotic. Conservatives, reformist liberals and, later, Labor forces were fairly evenly split in the parliament. Alliances were constantly drawn and redrawn; parties were desperately undisciplined; splits and fusions transformed the political landscape with dizzying frequency. If nothing else, the tumult kept the Victorian governor busy. In 1861 alone, the colonial governor, Sir Henry Barkly, found himself offering nine commissions of government, with nobody willing to take the poisoned chalice. Government changed hands almost annually.

That chronic instability came to an end with the rise of the Liberal Party in Victoria. Governments began lasting much longer, for one thing. From Federation up to the election of Henry Bolte in 1955, the average Victorian premier lasted 1.8 years. From Bolte onward, that figure blew out to 5.9 years. Bolte himself was the state’s longest-serving premier, lasting seventeen years; his successor, Dick Hamer, got eight years in the chair. This was something Victoria had never seen before — one party governing, continuously, decade after decade — and the Liberals became synonymous with power.

The stability and discipline of the Liberals changed the whole character of the political contest in Victoria. The old three-cornered free-for-all settled into a more structured, bipolar contest we might more readily recognise today. Parliamentary dominance also allowed for power to be concentrated in the executive, away from the legislature and the state’s many and massive statutory authorities. Decades later than other states, Victoria had finally made the transition to a “party” — as opposed to a “parliamentary” — system of government. And the dominant party in that system, for its first three decades at least, was the Liberal Party.

No longer. Now, the Liberals are more habituated to the wilderness than the halls of power. And those long stints on the outside have made their mark on the character and politics of the party. Their first taste of long-term opposition — the ten years of John Cain and Joan Kirner’s Labor governments — saw the party take a decisive turn under the leadership of Jeff Kennett. Kennett’s temperament was aggressive and irreverent, at times shocking his colleagues and Establishment elders. His brutal and unforgiving tactics included attempts to block supply or revoke parliamentary pensions to force an election.

In government, Kennett put a wrecking ball through time-honoured institutions and traditions, many carefully established and nurtured under his Liberal predecessors. He was, in that sense, more revolutionary than conservative, more radical than pragmatic. It would be wrong to say the Liberals had gone completely feral at this stage — the Melbourne Establishment remained fairly well embedded in the party and the government ­— but these wild flashes, this irreverence, this streak of revolutionary zeal, betrayed a new distrust of conventions and institutions.

Perhaps the thing holding back a fuller expression of that feral turn was the presumption that the Liberals were back to stay. To the surprise of many, they managed only seven years in power before being dispatched by the electorate. And this time around the business and civic Establishment of Melbourne began to decouple itself from the Liberals. Slowly but surely, it began to cosy up to the very business-friendly, third-way, New Labour–style governments of Steve Bracks and John Brumby. Business figures and corporations, lobbyists and elite civic groups all began to reorient themselves, hiring Labor-friendly lobbyists and board members, donating money, attending events and joining supporter groups.

We need only look across the Murray to see what kind of party the Victorian Liberals were morphing into. Political historian Norman Abjorensen has written that the New South Welsh Liberals always had an “intensely tribal ‘outgroup’ mentality.” Stuck in a natural Labor state, they existed on the margins of power, with Labor dominating nearly all institutions — from parliament and the bureaucracy to local government, schools, the professions, the judiciary, and even many churches and sporting clubs.

Perhaps forgivably, the NSW Liberals had adopted a kind of siege mentality. They were insular, suspicious and more uncompromisingly ideological. This is not to say there were no moderates in New South Wales, any more than there had been no hardliners in Victoria. But the basic cultural difference between the states had been fairly stark: New South Wales had the outsider’s chip on the shoulder, was deeply suspicious of the Establishment and was more aggressively right-wing; the Victorians were the Establishment, more pragmatic, more flexible, sometimes positively progressive in their liberalism. Now, no longer the Establishment, the Victorians began to resemble their tribal cousins to the north.

This shift was on show during Ted Baillieu’s tortured leadership of the state party. Baillieu himself was an Establishment scion, a member of one of the oldest elite families in the state. He was noted for his moderation, his pragmatism, and his relaxed, unflustered style. All this was in keeping with the old Liberal Party. But by the time he was at the top, the party had changed, and he struggled to wrangle the feral elements that had emerged. In opposition, he suffered constant leaks and backgrounding by disgruntled factional enemies. Some members of the party’s state office even set up a website decrying “Red Ted” and his moderate politics. Tony Nutt — ex–John Howard consiglieri and all-purpose party fixer ­— had to be brought in to hunt down and purge the rebels. Leakers in the party room and the shadow cabinet similarly had to be rooted out and sacked every six months or so — year after year.

All this was feasted on by the state media, something Baillieu never seemed to forgive; he was guarded, often openly hostile in front of journalists, speaking rarely and briefly. Nor could he forgive the party’s natural allies — the chamber of commerce, banks, financiers, the freight industry — for cosying up to and even openly backing Labor.

Baillieu carried all these wounds and suspicions over into power. Reading the party’s own autopsy on the Baillieu years, we see how the premier’s office — distrustful of Baillieu’s colleagues, indeed distrustful of the whole world outside his office — micromanaged the government. Most serious decisions were taken away from cabinet and given to subcommittees where fewer enemies lurked. Journalists were starved of information, and what little they got was delivered through gritted teeth. Interest groups found it impossible to get access to the government; stakeholders were thrown off-side by policy surprises, or felt nobody in government was listening.

And so, despite leading his party out of the electoral wilderness and despite winning with a sizeable swing and a double majority, Ted Baillieu found himself struggling with backbiting and white-anting within months of taking office. Abortion, the Human Rights Charter, department secretaries kept on from the Labor years, the lack of big infrastructure projects, the lack of boldness, zeal and aggression — all were the subject of intense infighting. By Christmas 2012, the premier was hanging by a thread. The following March, when Frankston MP Geoff Shaw quit the Liberals over an investigation into his misuse of entitlements, Baillieu lost his majority in the Assembly. He resigned, swiftly, before his enemies could get in first. All this just two-and-a-half years into a new government. This is what a feral party looks like.

Now, in opposition yet again, the Victorian Liberals are just about in meltdown. On paper, the party should be within reach of government later this year. But it is desperately low on cash, at war with its main funder, and engaged in internecine internal warfare, the ferals outmanoeuvring and, according to some, out-stacking the Establishment all over the place. If there were grumblings and whispers coming from these elements during the Baillieu years, there is now a full-blown insurgency — almost the kind of thing we saw the Tea Party engineer in the United States before Donald Trump came on the scene.

None of this means that the Liberals won’t win back power in Victoria in November, or that they won’t manage some good results federally. An angrier, more right-wing, more feral party might even manage to speak to the disillusioned, non-major-party-voting chunk of the electorate that can make the difference in Australian elections these days. But it almost certainly won’t resemble the golden postwar era of stability. More likely than a feral-right hegemony in Victoria is a return to the old days of factiousness, division and instability. And it is not just the Liberal Party unravelling — both major parties are struggling with their response to a flagging primary vote.

That is the context for the Cormack stoush, due to come to court in Melbourne next month. Indeed, it is the crisis facing the Liberals in microcosm: the Cormack board is constituted by old-guard Liberals with eminent Establishment credentials; rather suddenly, they have found themselves wavering in their commitment to the party, at least under its current leadership, with Michael Kroger at the helm. On the other side is Kroger, who, despite being the consummate party insider, is fashioning himself more and more as an anti-Establishment crusader, lambasting the Business Council of Australia, expelling all MP staffers from the state’s administrative committee, and acting as patron of hard-right up-and-comers who are recruiting whole churches out in Melbourne’s eastern suburbs.

The stoush is between two Liberal parties — old and new, domesticated and feral. Perhaps the two can find some accommodation and divert the conflict from the embarrassment of open court next month. Perhaps not. Either way, this is not the beginning, nor is it the end of the upheaval for Victoria’s Liberals. ●

• James Murphy’s analysis of Justice Beach’s decision in the Cormack Foundation case.

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But some things are eerily familiar to the east-coast-dweller’s eye, and none more so than the politics of the Roe 8 freight link. The parallels between that imbroglio and Victoria’s infamous East West Link saga, for instance, are too many to count. An enormously controversial inner-city toll road provoking rolling protests, “direct action” and court challenges; contracts signed with an election only months away, despite declarations by the opposition that they won’t go ahead with the project; sweaty state Labor leaders telling the press pack they will rip up said contracts if they win office (which, when they made those pledges, looked entirely likely); tussles with the feds over redirecting Commonwealth dollars promised to the projects… the more one looks, the uncannier things get. Sydney’s WestConnex is not far below on the déjà vu spectrum, but Roe 8 and East West are so incredibly alike it’s worth asking what exactly is going on here.

Well, what indeed? Why are these inner-city road projects crashing into elections again and again, and becoming the subject of messy politicking and brinkmanship? One common denominator is the Abbott government. Eager to go down in history as “the infrastructure prime minister,” Abbott pumped billions into a score of inner-city road projects within months of winning government. At the same time, he made a point of shunning public transport projects, even those deemed a higher priority by Infrastructure Australia, the independent umpire.

This change in Commonwealth priorities saw a bunch of projects leap the funding queue, despite many having not been fully planned or costed. With the states desperately reliant on Canberra to get any project rolling, all they could do was try to make up the time and get sods turned by the next election. According to this account, what we saw in Victoria and are seeing now in Western Australia is really an aftershock of Abbott’s brief but consequential time in the Lodge.

It’s a temptingly simple explanation, but it assumes some pretty debatable points, including the idea that power has become so centralised in Canberra, and especially the prime minister’s office, that whoever sits in the PM’s chair essentially dictates what happens at every level of government. Put a roads man in the chair and we get a massive realignment of policy and resources to favour roads; switch to an avid rail fan and we get a recalibration with some money shifting back to public transport. The PM says jump and the entire Australian political system asks how high.

In reality, these controversial schemes are the product of the enormous mess of bureaucracy and lobby groups, political imperatives and economic limitations that get between any leader and the rolling-out of a policy. It takes a lot of momentum and collaboration to turn a leader’s idea into reality, and often a lot changes in the process. Indeed, navigating a policy or a project through this maze of interests and institutions, players and processes can be so torturous and require such political dexterity that they often simply never make it through to the other side.

This seems to be the fate of more and more policy initiatives these days, whether it’s greyhounds in New South Wales, abortion law reform in Queensland, or pokies, negative gearing or carbon pricing in Canberra. Mobilising opposition to a project has never been easier, thanks to social media, and the fragmentation of the two-party system in recent decades has multiplied the number of fronts on which a project can be attacked. It has probably never been harder to pitch a project and get it through to the ribbon-cutting.

If that is indeed the underlying problem with all these infrastructure fiascos, then we’ve been thinking all wrong about infrastructure reform for the past ten years. Since Kevin Rudd took over the leadership of the Labor Party in the lead-up to the 2007 election, the big push has been to depoliticise infrastructure, to get it away from politicians and into the hands of independent experts. Not only has that push failed utterly – politicians have bypassed the new processes and authorities set up to make infrastructure non-political – but the thinking behind it is profoundly mistaken about the nature of infrastructure.

Infrastructure is inherently political. It involves the allocation of public resources (even when private capital features heavily) and appropriates space in the name of the common good. And once projects are announced, they necessarily have to run a political gauntlet to make it to completion. A thumbs-up from the brains trust at Infrastructure Australia, or one of the state-level authorities, will never change the fact that projects require political momentum to get up. Good politics – careful building of support, cobbling together coalitions, bringing together stakeholders and so on – is the foundation for good infrastructure. Until we accept that, expect to see more East West Links and Roe 8s on the horizon. •

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But this is just the colour and movement in the AEC’s data, the melodrama that plays out in the foreground. In the background lurks a deeper story, one that tells us a whole lot more about how our political system functions. That’s the story told by the predictable donations, the routine donations, the donations so familiar we hardly notice them any more.

The data released covered the three elections – in Victoria, Queensland and New South Wales – during the 2014–15 financial year. Victoria’s data is juiciest because of that state’s open-slather donations regime; indeed, the state’s ombudsman, Deborah Glass, describes Victoria as among “the least regulated jurisdictions in the Western world in terms of political finance law.” Apart from gaming licensees, anyone can make a donation of any size, and only those donating more than $13,000 must disclose the fact. Victoria is essentially the wild west of campaign finance.

So it’s no surprise that the list of donors in the lead-up to the 2014 Victorian election is a who’s who of firms and industries that are regulated by or have business before the government. Most prominent of all were property developers, perhaps the people with the most to gain from favourable state government decisions.

Take Bill McNee’s VicLand development firm. VicLand made a massive windfall profit when Matthew Guy, then planning minister and now opposition leader, rezoned 250 hectares of warehouses and industrial plant at Fishermans Bend for large-scale redevelopment. VicLand donated over $100,000 to the Liberal Party during its term in government and contributed $52,000 to the party’s unsuccessful 2014 election campaign.

Michael Yates, a developer who donated $20,000 to the Liberal campaign effort, made $30 million on a South Yarra apartment tower deal that went ahead only after Guy approved it over the objections of the local council. Yates made a $25,000 donation during the approval period too. When he was asked if he was aware of Yates’s generosity, Guy said, “I see Michael Yates at many functions, he is a well-known developer.”

Nigel Satterley AM, who donated $20,000, made major profits thanks to decisions to unlock land for development on Melbourne’s urban fringe. Watsons, the Mornington Peninsula developers who happened to benefit from decisions to allow the development of Melbourne’s green wedges, donated $80,000. Parklea – $30,000 – was lucky enough to own swathes of land near Torquay released for development by Matthew Guy in 2014. All were perfectly legal donations, but all are worrying for their potential to create conflicts of interest and compromise decision-makers.

While Labor got its share of developer dollars, most flowed to the Liberals. We can probably put that down to the fact that the Liberals were in power rather than to any ideological affinities. The donations are not coincidences or sincere expressions of political values; they’re made with an eye to the decision-makers who, by the stroke of their pens, can make or break fortunes.

Then again, even that paints too simple a picture of things. It would be a mistake to view these donations as direct transactions, as corruption in the narrow sense of the word. Indeed, it’s important to stress that nothing even slightly illegal is happening here. These donations are more about networking, about sending signals. A $20,000 donation is about proving your congeniality, your willingness to cooperate, to the party in power. It keeps you in the Rolodex, gets your calls returned. It’s part of a bigger system of give and take, of patronage and courtship – one step in the complicated dance of governments and vested interests.

And – crucially – it takes two to tango. Governments are just as interested in big developments going ahead as the developers are. It’s a chance to don the high-vis jacket, to announce new jobs, to demonstrate progress, to get cranes on the skyline. This is the yardstick by which governments are now measured. So we are not dealing with one-way, one-off transactions. This is a tight-knit, long-term relationship. In a sense, political parties govern in coalition with developers, or with other business interests. Generating the capacity to govern – to have some influence over the economy and the physical shape of our communities – requires these coalitions.

All this is to say that these very routine donations, from developers and from other interests, should be looked at more as the sharing of resources within a governing coalition, rather than as specific cases of corruption. All the donations mentioned here fall well within the guidelines and are perfectly legal – indeed, the fact that this behaviour is within the bounds of the existing regulatory framework is what should concern us most. It may not be corruption in the brown-paper-bag sense of the word, but it is a “corruption” of what we might expect from democratic government, government for the people and for the public interest rather than in the narrow interests of developers or political partisans.

Changes are obviously needed. A NSW-style scheme that bans developer donations, puts tight limits on how much can be donated, and lowers the disclosure limit to $1000 would be a solid start. Queensland and Western Australia have made some progress in this direction. Victoria, South Australia, Tasmania and, of course, the Commonwealth are the laggards – and others, like the Australian Capital Territory, are even going backwards. A serious reform push, in multiple states, would be necessary for any changes to be workable and lasting.

But reformers beware. When we target the developer–politics nexus, we target a seriously tangled relationship. It can be hard to tell where private interests end and government begins. If the NSW Independent Commission Against Corruption has taught us anything, it’s that untangling the pair can get very messy indeed. •

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Have we learned anything from this? Listening to the state treasurer, Tim Pallas, and his opposite number, Michael O’Brien, trading blows last week, it was hard to believe we have. Both deny responsibility and point the finger at the other, cherrypicking findings and vying to appear the most outraged. More surprising, however, is the battle over the role of the public service in this billion-dollar fiasco. Behind all the bluster is a serious debate, not just about the quality of officials’ advice about the project but also about their role in our system of government.

Touted as the missing link in Melbourne’s freeway network, East West Link would tunnel under the city’s latte-sipping inner north to connect the Eastern Freeway with CityLink, then continue to the Western Ring Road. The Baillieu government adopted the link as its signature project in 2011 and just two months before the 2014 state election Baillieu’s successor, Denis Napthine, signed contracts with the East West Connect consortium to build the link – despite a pending court challenge and Labor’s commitment to can the project. On winning the election, Daniel Andrews’s Labor government did just that, paying out $643 million (and counting) in compensation. Add to that all the money spent by the Coalition on the project – give or take how many acquired properties can be resold – and that’s a fiasco well worth an independent audit.

While the auditor-general finds the Coalition and Labor governments guilty of ignoring advice, rushing processes and taking huge risks with state funds – findings echoed this week in a review of the Abbott government’s funding of the project – the real focus is on the state bureaucracy and its role in all this. “Over the life of this costly and complex project, advice to government did not always meet the expected standard of being frank and fearless,” he writes.

At every stage, the bureaucracy gave “too much emphasis to the benefits of approaches that were in line with the government’s preferred outcome and little emphasis to alternative options that could be argued were more aligned with the state’s best interests.” Some officials admitted they thought giving advice that went against what the government wanted to hear could jeopardise their careers and influence. More than that, it would be plainly naive.

The auditor-general fears this attitude poses a serious threat to the integrity of the service:

It is not sufficient for public servants to avoid providing advice or recommendations simply because they believe the government of the day does not want to hear them. Doing so is at odds with the Public Administration Act 2004 and the Code of Conduct for Victorian Public Sector Employees, which require the public service to act impartially and achieve the best use of resources.

The state bureaucracy vigorously denies this interpretation of the debacle and has rejected the audit entirely. In fact, Chris Eccles, secretary of the Department of Premier and Cabinet, argues the audit mistakes the role of the bureaucracy:

Since the earliest articulation of a professional, apolitical public service in the 1850s, the role of the public service has been to serve, and act as an instrument of, the government of the day… For a public servant to hinder progress to implement a lawful decision, constantly recontest that decision, or refrain from actions that follow from a lawful decision of a minister, would be to fundamentally undermine the Victorian Public Service as a trusted and apolitical institution, undermine the integrity of our democracy, and erode longstanding conventions that are at the heart of the Westminster system of government.

In other words, the public service has to do what it is told. We can’t have Sir Humphreys white-anting ministers and their policies. If the government’s preferences are understood and explicit, bureaucrats have an obligation to go with them. They can’t repeatedly “recommend courses of action that are contrary to the government’s settled policy” – that would subvert democracy.

The auditor-general is unimpressed by this line of argument. He argues that the public service can’t cater its advice to suit the preferences and biases of the government of the day. When advising on a decision, it has to make recommendations based on what the evidence shows is in the best interests of the state. “At critical points in this project,” the auditor-general writes, “this did not occur.” That is to say there weren’t enough public servants saying things like, “Minister, with respect, I would advise against that” during the whole fiasco. Instead they were taking hints and working to them, at least according to this report.

So is the public service’s role first and foremost to turn the government’s every wish into reality? Or do we want a more independent, feisty service, one that says, “No, Minister”? Would that jeopardise democracy, or is that a necessary check on the whims and petty interests of governments?

These are big questions. How they’re handled is not a merely abstract issue. In the case of East West Link,  the public service’s advice could have been a key reason Victorians lost a billion dollars down the drain. Indeed, it could cost us a whole lot more yet. We may have a new infrastructure authority vetting projects, but the board includes the same officials who worked on East West Link. The same people, the same departments, the same overall system are handling the $11 billion Melbourne Metro and the $5.5 billion Western Distributor. What reason is there to expect these won’t fall victim to the same pitfalls as plagued East West Link? None of the auditor-general’s recommendations have been accepted by anyone; if the report is right, that means none of the lessons have been learned.

As the blame game whirs on, the question remains: how did Victoria get itself into this mess? Was this a one-off fumble? Or are there deeper cultural and structural problems in our government, problems that threaten to derail future projects? What really went wrong with East West Link? That’s still the billion-dollar question. •

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