By Tim Colebatch
Victoria has returned to type. Labor has lost only three state elections in Victoria since 1979. It has won every federal election in this state in that time save in 1990, when we were diving into recession. Saturday's result should not surprise us.
It might surprise us that Labor ran such a disciplined campaign while the Liberals were flailing around. Daniel Andrews, so often unimpressive before the cameras, seemed to grow in the campaign. Denis Napthine looked like a good bloke in a job too big for him.
Illustration: Jim Pavlidis.
But the consistency of Victoria's voting pattern in the past 35 years suggests that the Coalition was also up against the force of political gravity. As the Liberals have moved to the right under Sydney-based leaders, Victoria has become a natural Labor state.
The Coalition wins in Victoria only when it presents an attractive moderate alternative, as Dick Hamer did in the 1970s and Ted Baillieu in 2010, or when it fans a sense of crisis requiring radical change, as Jeff Kennett did in the 1990s.
Cbus chairman Steve Bracks denies the Samuel report signalled a need to force fund boards to appoint more independent trustees.Credit: Jesse Marlow
This time, it could do neither. It failed in office to deliver the crucial integrity reforms it had promised in opposition: scrapping political advertising, publishing a Treasury cost-benefit analysis of all major proposed infrastructure projects, establishing an anti-corruption commission with teeth, allowing the Auditor-General to scrutinise commercial-in-confidence contracts, liberalising freedom of information rules, and so on.
Many share the blame for the Liberals' defeat – above all, Geoff Shaw, and those who chose him as the Liberal candidate for Frankston – but they include those who persuaded Baillieu to walk away from his integrity agenda. Had his government delivered those reforms, it would have earned a moral authority that would have protected it against other failings.
A public cost-benefit analysis would have also protected Baillieu and Napthine against bowing to Tony Abbott's fixation on the East-West Link, a project that rated so poorly that the analysis could not be published.
There's a lesson there for Andrews. He has promised similar integrity reforms this time. He must deliver. No cynical "realists" should be allowed to block the way.
The Coalition's main achievement in government was to keep its operating budget in surplus through bad times for the Victorian economy. That took extraordinary discipline, which Labor must continue – because the bad times, too, are likely to continue.
The Coalition was unlucky in its timing. It took office as Victoria's economy, through no fault of its own, was derailed by the global impact of China's massive real estate boom. To build all those apartments in China's cities required huge exports of Australian iron ore and coal. So the Australian dollar shot up, and that made many of Victoria's exports and much of its production uncompetitive. The result is high unemployment and underemployment, and low growth in spending and output. In six years, Victoria's output per head has grown just 0.5 per cent.
Now, China has 50 million empty apartments, and its boom is going bust. The next four years could be hard for Australia, even if the dollar's fall will help Victoria. Andrews has promised much to many, but he will have no more resources to hand out than the Coalition would have had. He and his team must prioritise ruthlessly to keep the budget on track.
Tim Pallas has the shrewd mind and political toughness you need in a treasurer. But while he kept Labor's campaign promises austere enough to not make the budget worse, there are shockers among them, and Labor in office should be ruthless enough to override Labor in opposition.
These will be straitened times: the Andrews government must ensure that it gets value for every dollar. Hopefully, the AFL will squash Labor's plan to spend $30 million so that the Doggies can play the odd match in Ballarat. Also, Victoria does not need a public holiday on the day before Grand Final day, or 24-hour public transport at weekends. And some of the level-crossing abolitions promised for the Frankston line are low priorities.
Having lured former Kennett and Howard government adviser Professor Bob Officer onside to vet state Labor's campaign costings, Andrews and Pallas should start on the right foot by inviting him to head a new commission of audit, to look at existing spending, tax breaks and other potential sources of revenue, infrastructure priorities, governance rules – and its own campaign promises. It could do Labor a lot of good, and save it a lot of harm.
You think the Victorian Coalition has already explored every fiscal saving? Think again. It had to make foolish cuts in areas such as TAFE to pay for blow-outs in its own sacred cows: in particular, its tough on crime lock 'em up policies, and its massive, still unchallenged, waste of money on Protective Services Officers.
Labor bent over like a weak reed to support these boondoggles, even as prison spending has blown out by $450 million a year under the Coalition, not counting more than $1 billion in capital works it has commissioned to build new jail cells. We need PSOs at big railway stations such as Flinders Street and Footscray, but not to twiddle their thumbs, walk up and down, and have long chats with each other at Armadale station and the like. The police commissioner should be given power to retrain and reassign them to provide the extra police Labor claims we need.
Above all, Labor needs to get infrastructure right. It has tied its own hands by pledging to keep Victoria's much overrated AAA credit rating, rather than borrowing to build the infrastructure we need. That makes it imperative that the little money it spends be spent where it will do us most good, and not, as the Coalition did, where it thinks it might win it most votes. No infrastructure project, however worthy, should be taken on without examining the alternatives, in public.
Here's one revenue-raising proposal for starters: Melbourne should impose a congestion tax on the use of inner city roads in peak hours – and use the money to finance the removal of level crossings.
These are tough times; they require tough minds.
Tim Colebatch is a former economics editor of The Age, and the author of Dick Hamer; the liberal Liberal.