Essential Research: 58-42

No Newspoll this week, but the always dependable Essential Research weekly survey shows Labor’s lead stuck at 58-42. Also featured are prime ministerial approval ratings (56 per cent for, 31 per cent against) and questions on the Productivity Commission’s maternity leave recommendations (trending negative), party leaders’ responses to the financial crisis and government plans to tackle climate change (don’t go far enough).

Author: William Bowe

William Bowe is a Perth-based election analyst and occasional teacher of political science. His blog, The Poll Bludger, has existed in one form or another since 2004, and is one of the most heavily trafficked websites on Australian politics.

361 comments on “Essential Research: 58-42”

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  2. [AUSTRALIAN stocks have plunged 7.5 per cent, wiping nearly $85 billion off the value of the sharemarket.
    Investors rushed to the exits in panic.

    The market extended early losses amid fears that the drastic steps taken by central banks and governments around the world will fail to stop the global economy toppling into recession.

    The benchmark S&P/ASX 200 dived 327 points, or 7 per cent plus, to 3993.9 in less than 90 minutes into the session, with banking and resource stocks leading the market lower. ]

    Simply shocking.

    http://www.theaustralian.news.com.au/story/0,25197,24474763-643,00.html

  3. One can’t help having the feeling that these “investors” are a bunch of gutless wonders with no ability to think for themselves.

    The bargain hunters will be happy, though.

  4. [One can’t help having the feeling that these “investors” are a bunch of gutless wonders with no ability to think for themselves.]

    Interesting point. But the reality is that thinking for yourself in a rampant bear market will result in massive losses.

    Either way, 2000 points have been wiped off the ASX in the last 12 months, an egregious circumstance no doubt.

  5. A heavier tax burden on those who are already economically stressed? Do the pokies owners suffer in a commensurate way?

    Here’s a crazy idea: Rip the f***en pokies out of the f***en pubs!

    (And don’t give me any palaver about “contributing to local homelessness charities and youth development programs” … the Orwellian deceitfulness of this sort of marketing makes my skin crawl.)

  6. I wonder if a solution to pokies would be for community centres install them but make them free, or have a prize system? I’ve seen a few docos that have found that gamblers don’t neccessarily play them to win money… they play them so they can play them longer (if that makes any sense).

  7. Thanks to the much more considered discussion of pensions from those few people than mere pensioner bashing comments from earlier.

    In response to queries on why it has to be ‘black and white’ between adequate or inadequate… it’s quite simple, if the system is adequate for some and inadequate for others, quite plainly the system is inadequate in general. I find it interesting that some people who acknowledge different pensioners are living in different circumstances just swipe away the ‘cat food’ examples. They simply look at their parents and think things are ok, without acknowledging the number of pensioners who are living off what remains from their pensions after they pay rent in today’s market. Then these same people talk about how pensioners could instead buy baked beans or tinned spaghetti… as if this is somehow a great standard of living! Thomas Paine raises the interesting question of what quality of life pensions should fund, some argue it should be merely a safety net. Whatever standard the Government decides is the minimum standard to be met they will need to justify.

    In response to other comments in regard to the $30 a week increase, I don’t think anyone with a brain really would even consider that for a second. It’s pure populist nonsense. Really it’s not even worth commenting on, nor is the proposition that somehow pensioners have only begun to struggle since November 2007.

    I agree that the review is a good move, and something which should’ve occurred years ago. However, it’s the action that stems from the review which will be important, and to argue that pensioners and pensioners groups should just keep quiet and wait for the review is ridiculous. Of course pension groups have the right, even the obligation, to use the media to lobby and push the Government for the best result possible. Quite frankly, if it was up the Government solely, with no pressure, I imagine they’d do very little. Now with all this attention, they’ll be trying to get the best outcome for pensioners, which should surely be seen as a good thing.

  8. [Either way, 2000 points have been wiped off the ASX in the last 12 months, an egregious circumstance no doubt.]

    Yeah, but my point is that the herd instinct is ruling (not very original, I’ll admit, but nonetheless true).

    There are good companies out there (most of them in fact) that are trading well and have excellent cashflows. Their share price is rarely a true reflection of their intrinsic worth. It is largely disconnected with their performance. This is especially true of solid firms like Australian banks, big miners, firms with long-term contracts under their belts and so on. That these firms are tanking is the result of pure panic and irrationality.

    CEOs are often paid based on the share price, so artificial or unsustainable inflation of share price is their main concern. Ironically, many a company that trades well has been gutted by corporate raiders interested only offloading shrares for a quick profit after breaking up such companies. The share price could be said to be the ultimate derivative investment: not a valid meter of a company’s worth, or even of the dividends they pay.

    It’s a pretty corrupt system, in my opinion, a collective death wish scenario where self-fulfilling prophecies rule over rational thought and common sense. The stories of doom and gloom we read daily and frequently in the media are just another manifestation of this miserable frame of mind, where despair sells better than measurable performance.

  9. Itep @ 207:

    [Quite frankly, if it was up the Government solely, with no pressure, I imagine they’d do very little.]

    Itep, you have no evidence at all for this. the only evidence is to the contrary. The Rudd government set up the inquiry to rationalise the entire pension system well beofre the wrinklies started ripping of their gear outside Flinders St. Station.

    Here we go again with the Rainmaker Scam. I can see the future headline now:

    [Turnbull takes credit for pension rise.]

    (not all of it, he won’t way how much, or even if anyone was really listening, but he’ll claim it wouldn’t have happened without him).

  11. [It’s a pretty corrupt system, in my opinion, a collective death wish scenario where self-fulfilling prophecies rule over rational thought and common sense. The stories of doom and gloom we read daily and frequently in the media are just another manifestation of this miserable frame of mind, where despair sells better than measurable performance.]

    It’s not a corrupt system – it simply reflects the human condition.

  12. Bushfire Bill, it will depend on the action. If the action is something the media will describe as inadequate (as it almost certainly it will be) and pensioners are unhappy with (which they always will be) then Turnbull will not take any credit. If the action is something which is positively received then you can expect Turnbull to say it was his idea all along (propped up perhaps by some vague statement he made about pensions in one radio interview).

    On your other point… it’s very easy to set up a review and then use the review to say you’re doing something. It’s another thing entirely to have action stem from a review, which requires, in some cases, a lot of pressure. Look at the number of reports we’ve already had into pensions, aged care etc. The action stemming from these reports? Not a whole lot.

  13. Sorry, if I’m going in to bat for anyone it will be disabled pensioners.

    Unlike aged pensioners, they didn’t have a whole working life to plan for the days they would be on a pension. They didn’t have the opportunity to ensure that they owned their own home, had paid off their debts and arranged their finances before they found themselves on a disabled pension.

    Yet they receive the same amount of money as a pensioner who did have all these opportunities whilst missing out on some of the other benefits (Howard, for example, did not pay the pensioner bonus to disabled pensioners).

  14. You make a very good point dawson and if it were up to the opposition you’d be lagging behind even the aged pensioners right now. ALL pensioners need a fair go and it needs a well considered reform of the system for it to be all encompassing and long lasting. This notion doesn’t seem to be part of the opposition’s thinking and hasn’t crossed the minds of most media either.

  17. Howard insisted that the Palmer inquiry into the Cornelia Rau affair (Feb-Jul 2005) be given less priority than the bean bag inquiry.

    (Ms Rau would never have voted Liberal anyway, and those bean bags were in an awfully shabby condition – neglected, maltreated, abused.)

  20. Clark could use (or, rather, modify) the line the Liberals here flew last time. Why would you want to change horses when in the middle of a raging stream?

  21. She has tried and seeing she is a much better media performer than Howard was (and Rudd is) and it hasn’t worked shifted the polls to date I find it hard to imagine it has now. As far as I know that same poll plunge for the Nationals hasn’t been reflected in other polls and the Greens certainly haven’t been at 9% or even close to that.

  23. If so, this will be an event even more ‘unexpected’ than the ’93 election in Australia. The polls have been consistantly behind the Nationals for well over a year now. Hopefully it puts a Nationals majority government out of question at least.

  24. People in NZ don’t say “The Nationals”. They say “National,” as in “National could still lose this election if the voters prefer a strong and confident Labor leader to a shonky ex-merchant banker.” (Actually they say “Neshnul” but we won’t start with the Kiwi jokes, will we?)

  26. 219 ltep – not according to this poll. We are living in economically volatile times and people tend to rush back to the government if they feel it is not their doing. If Labour gets even close to National they may just be able to form another coalition. I wouldn’t be writing her off now.

  27. The most recent poll I could find from the NZ Herald had the Labour/National/Green had the split has 35.7/51.2/4.9 (http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=10534321)

    The most recent poll I could find from One News has it as 33/52/7 (which is at least closer to the Green vote in the Morgan poll) (http://images.tvnz.co.nz/tvnz_images/news2008/colmar_brunton/oct08/oct08_party_vote.doc)

    Of course, it’s possible National have taken a big plunge in the recent days and if so this should wash through in other polling over the next week or so.

    For a look back at the polls since the 2005 election they can be found on Wikipedia (http://en.wikipedia.org/wiki/Opinion_polling_for_the_New_Zealand_general_election,_2008#cite_note-28_September_2008-114)

    A very grim picture painted for Labour… but the MMP system makes it very possible for Labour to scrape back in should the Morgan results be an accurate reflection of current voting intention.

    http://curiablog.wordpress.com/2008/08/25/tv3tns-poll-august-2008/

  28. It’s been impossible to ignore the reporting of the volatility on the world stockmarkets recently.  Media hype has been going overboard about how the financial world is collapsing, we’re heading for depression and we’ll all be ruined.

    A number of fellow bludgers noted Red Kezza’s meltdown last night, and I happened to hear, by accident, Steve Price, showing all his listeners how small his stones really are. The big bad shock jock, sounded like a terrified child.

    Some commentators talk of similarities to 1929 and how the US stockmarket crashed by 88% from a Dow Jones high in Aug 1929 of 380 points to a low in May 1932 of 44.7 points.  Worse, it took until 1954 before the US stockmarket returned to the levels of 1929, a massive 25 years!

    So yes, that’s an 88% drop all right, and as has been reported, an initial investment of $10,000 would have dropped to a paltry $1,200.  That’s assuming of course, that the investor bought at the absolute highest point and then sold out at the absolute lowest point.

    But just to introduce a little perspective I thought it would be worthwhile to look at the Dow Jones and the All Ordinaries indices over a more conventional time frame, say 10 years, starting in 1926 and ending in 1936.

    Year          Dow Jones (yr end)         All Ordinaries (yrly average)

    1926         157.2                             40.4

    1927         202.4                             43.4

    1928         300                                47.3

    1929         248.5                             50

    1930         164.6                             35.3

    1931         77.9                               29.7

    1932         59.9                               35.5

    1933         99.9                               43.6

    1934         104.4                             50.9

    1935         144.1                             57.4

    1936         179.9                             64.2

    This shows those investors, who actually behaved as investors and not speculative cowboys, survived the whole crisis pretty well.  A standard buy and hold strategy from 1926 would have seen them turn a $10,000 investment in the US into $11,440 and in Australia it would have ended up as $15,890, plus whatever dividends were paid during those years.

    Admitedly not stellar returns but not despair either and certainly not a capital loss of 88%.  And considering this was the worst economic downturn in modern history it’s pretty surprising.

    So yes, the stockmarket is currently not pretty, and this has yet to play out fully, but judging by the above figures, true investors would feel more relaxed.

  30. [I happened to hear, by accident, Steve Price, showing all his listeners how small his stones really are. The big bad shock jock, sounded like a terrified child.]

    What was he saying?

  31. Dario, Price, sprouted mostly jibberish; asking whether the listeners had confidence in our politicians? are the banks safe? will pensioners get shafted? are they telling us the full story?

    I don’t know hy he’s worried he gets a bucket load for bucketing on others.

    It wasn’t until he had Tony Blair’s ex-spin doctor on, that he seemed to be soothed, by his comforting words.

  32. [asking whether the listeners had confidence in our politicians? are the banks safe? will pensioners get shafted? are they telling us the full story?]

    In other words a subtle Rudd bash. Thanks Ari.

  34. If Turnbull knows all the answers why doesn’t he go back to banking and undo all the damage that bankers and their rightwing ilk are doing right now to the world at large?

  35. 227 ltep Thanks for taking that trouble to find those polls. You say “the most recent” polls. Do you have a date for each poll at all? Is the Morgan Poll the most recent? Morgan is not a poll I ususally trust but 7% is one hell of a move and well outside MOE. So I would suggest something is happening due to the obvious recent events.

  39. Gary Bruce, the Morgan is the most recent because it includes the period from 2-5 October. However, the totality of polling is from 22 September to 5 October, which includes dates that the other polls were conducted.

    The NZ Herald poll was 15-24 September and the One News poll from 27 Sept -2 October.

    The other polls I mentioned was taken from 27 Sept – 2 Oct as well.

    It’s actually very interest, because if the Morgan is accurate, the results will be even closer than the 1996 election, where National managed to scrape back in with a minority government with the support of New Zealand First. Negotiations took, I think, close to 7 weeks in that case.

  40. Just a comment on the pension. I am on the Disability Support Pension.

    People talk of “the pension” but it is made of a various things.

    The base pension – indexed
    The pension supplement – not indexed
    Pharmaceutical allowance
    Utilities allowance
    Rent assistance (for renters)
    The “pension card” allowing prescriptions for $5 and a few other concessions.

    Then there is the “income test” where pensioners can earn $138 pf before losing any benefit. (you then lose 40c of pension for every $1 in gross income). In fact a pensioner can earn $778 per week and still be paid the utilities allowance, pharmacuetical allowance and recieve the “pension card” (and in the case of aged pensioners the lump sum payments).

    Then there is the “assets test” this gets messy but if you are a homeowner (your home is usually exempt) you can have assets excluding your home of $550,500 or if you rent you can have assets of $675,000. (single pensioners).

    But if you are a pensioner and live in a shack, on a few hectares of scrub of course you are deemed to be able to make an income on your patch of scrub.

    Anyone who thinks our pension system is not a mess and that a review is not required is troppo.

  41. Turnbull want the Govt. to guarantee bank deposits up to $100,000 instead of the proposed $20,000. What dumb politics.

    How can this be seen as anything but pandering to rich folks? Or is he struggling to be relevant?

    Costello explained “moral hazard” in prudential regulation on Q&A I assume Turnbull missed it.

    Banks to Punters “Hey guys – here it is, earn over the odds interest rates on our special up to $100,000 term deposit” don’t worry its Govt gauranteed. If you get sucked in we either make a squillion or the Govt bails us out. No risk all profit.

    Dumb, dumb, dumb.

  42. Just to show what is “possible” regarding pensions.The pension in The Netherlands pays 70% of your former wage. And it is not means tested. In Australia it is 25% of the average wage. And it is means tested.
    Of course you can’t import a policy holus-bolus from another country because of lifelong taxation and other social issues.
    And whether their system is sustainable is another issue.
    But I am sure that pensioners over there don’t eat baked beans on toast.

  43. Ruawake. Perhaps it is you who are the dumb, dumb, dumb one.
    A quote from John Quiggin at his blog
    “Given that lots of people hold more than $20 000 in individual bank accounts, they have an obvious incentive to diversify, which means large scale withdrawals. The possibility of this turning into a run is far from remote. Turnbull’s suggestion of $100 000 is better.”

  44. chrisl

    The big 4 banks have had $30 billion in cash pumped in in the past month. If people want to withdraw where are they going to put it? The share market?

    Do you understand what “moral hazard” is?

  46. chrisl

    You missed , “but the only serious option is an unlimited guarantee.” Why did you quote all of JQ’s blog post except this bit?

  47. Just goes to show you the perceptions people have on how governments are run.

    Peter Costello was in town (Adelaide) this morning. He was on Leon (I’m the man for fixing all things political except I don’t know how to do it without input from the Libs) Byner’s show on 5AA. One old lady rang in and thanked Costello for his stewardship as Treasurer and asked him whether Mr Rudd or Mr. Swan had approached him for his advice on how to handle the financial crisis. “No they hadn’t replied” Costello.
    Another guy writes in to today’s “Advertiser” stating that he would rather have Costello navigating our economy than Wayne Swan. He went on to say that the we ask labour to step down and allow Costello to run Australia’s economy before we have a recession like the one “we had to have”.

    Don’t these idiots realize that the Government has a string of advisers providing advice to them and that in all probability these advisers are the same people who provided advice to Costello given that Rudd made very few (if any) changes in the top echelons of the Public Service.

  49. [One old lady rang in and thanked Costello for his stewardship as Treasurer and asked him whether Mr Rudd or Mr. Swan had approached him for his advice on how to handle the financial crisis. “No they hadn’t replied” Costello.
    Another guy writes in to today’s “Advertiser” stating that he would rather have Costello navigating our economy than Wayne Swan. He went on to say that the we ask labour to step down and allow Costello to run Australia’s economy before we have a recession like the one “we had to have”.]

    Die hard Liberal voters. Who cares what they say.

  50. Yes but conservative treasurers are inherently better managers of our economy. This fact is axiomatic, god given and entirely beyond question. Just ask Peter Costello, who claimed in an interview with Peter van Onselen and Wayne Errington that “The Howard treasurership was not a success in terms of interest rates and inflation.”

    Hang on …

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