Independents Strengthening In Election Eve Betting

As promised, I have run a final simulation of the Federal election, using the individual lower house electorate betting odds as of this Friday night (1/7).

The most probable seat distribution is now almost evenly split between 79 - 65 - 6 and 78 - 65 - 7. Labor’s chances of forming a majority government is now less than 0.1%, but the chance of a hung parliament is still high: 25% ± 2.5%. Although several seats have firmed in either the Coalition or Labor’s favour, the extra uncertainty around the independents is offsetting this clarity.

Independent (ALP stooge) Rob Oakeshott now looks to be a real problem for the Coalition in the NSW electorate of Cowper. With Cowper now at almost even money, as well as Mayo and Batman, there is a real chance of 7 on the cross benches.

There are 14 lower house seats in which 2 candidates are both paying less than $3 on all sites and thus could be considered genuinely close contests: Cowper, Greenway, Macarthur and Macquarie in NSW, Batman and Chisolm in VIC, Brisbane, Capricornia and Petrie in QLD, Hindmarsh and Mayo in SA, Cowan in WA and Braddon in TAS. Of these, Cowper, Macarthur, Macquarie, Batman, Mayo and Cowan are very close.

This is a slight change from Wednesday night’s run. Greenway has tightened, but Gilmore now looks safer for the Liberals. Brisbane is now close as the ALP have improved and Forde now looks safe for the Liberals, as do Burt and Lyons for the ALP.

PS: Don’t forget to vote for minor parties in the senate before you choose a major (if you choose a major at all). There are plenty of liberal choices: Liberal Democrats, Voluntary Euthanasia, Drug Law Reform, HEMP . It’s hard to tell what the Secular Party and the Science Party / Cyclists Alliance are all about, but I voted for them anyway.

Latest Election Betting Implies 6 On Cross Benches, But Still Coalition Majority

Last Tuesday night (21/6) I ran a simulation of the looming Federal election using probabilities implied by the individual electorate betting odds on Sportsbet, Luxbet and Crownbet. The odds implied Coalition 79 seats, ALP 66 seats and 5 on the cross benches as the most probable result.

I just ran another, using the betting odds as of this Wed night (29/6).

The most probable seat distribution has changed to 79 - 65 - 6, with an extra cross bench seat for either the Greens or Nick Xenophon. As the odds in some marginal seats have firmed for the favourites, Labor’s chances of forming a majority government have fallen from about 1% to less than 0.25%. The chance of a hung parliament is still high: 25% ± 2.5%.

Nick Xenophon’s odds in the conservative Adelaide electorate of Mayo have significantly shortened, from about $3.00 to $1.50 - $1.60. He has also come in to between $3 and $4 in Barker, Boothby and Grey. All of these are normally conservative electorates, so the swing toward Xenophon must be a concern to the Coalition. The betting now puts Xenophon at a 35% chance of winning multiple lower house seats in SA.

With the Greens shortening from $4 to even money in the north Melbourne seat of Batman, they now have a 50% chance of winning 2 lower house seats. Moreover, Batman borders Adam Bandt’s seat of Melbourne, so a win here would give the Greens the makings of a contiguous heartland in inner city Melbourne.

The perfidious Tony Windsor and Rob Oakeshott are still chances in New England and Cowper (God help us).

Bob Katter, Andrew Wilkie, Cathy McGowan, plus 2 Greens and a Nick Xenophon Team or 1 Green and 2 Nick Xenophon Team ... not an easy cross bench for Malcolm Turnbull to deal with. Wilkie and the Greens will be obstructionist and Katter, McGowan and Xenophon will hold the government to ransom.

There are 14 lower house seats in which 2 candidates are both paying less than $3 on all 3 sites and thus could be considered genuinely close contests: Cowper, Gilmore, Macarthur and Macquarie in NSW, Batman in VIC, Capricornia, Forde and Petrie in QLD, Hindmarsh and Mayo in SA, Burt and Cowan in WA and Braddon and Lyons in TAS. Of these, Macarthur, Batman, Capricornia, Mayo and Cowan are very close.

I will look at the betting odds again this Friday night.

The Best Brexit Result: A Very Narrow Bremain

With voting about to get underway in the Brexit referendum, what is the best outcome for Britain?

I won't link to the betting sites, because the odds will change so rapidly, so there is not much point in deriving probabilities from them. Last estimate was 1.25 for Remain and 4.00 for Brexit. That translates to an implied 81% probability for Britain to remain in the EU. 

Better for Britain is a very close Bremain, say 51 - 49 or 52 - 48. This would force the Eurocrats to really put a dollar value on Britain remaining part of the EU, without the chaos of it actually exiting.

The salient problem driving the Brexit vote is the technocratic socialism which Britain has always hated. To imagine anything else in the EU is anathema to the EU MPs in Brussels and that is the nub of the problem

Election Betting Says Coalition With Slim Majority, But Strong Possibility Of Hung Parliament

Last federal election I ran several simulations of the outcome, based on the betting odds on the 150 individual electorates. The initial post explained how the simulation worked.

This federal election, Sportsbet, Luxbet and Crownbet are all offering odds for every electorate. Interestingly, William Hill is not, despite doing so in 2013.

The simulation as of Tues 21 June gives the most likely outcome as Coalition 79, Labor 66 and 5 on the cross benches, made up of independents Bob Katter, Andrew Wilkie, Cathy McGowan, Green Adam Bandt and probably one Nick Xenophon seat in SA, most likely Mayo.

The first 4 are incumbents, strongly tipped to retain their seats. In particular, Cathy McGowan is benefiting from the Liberals’ insane decision to rerun lazy, arrogant and unpopular erstwhile member Sophie Mirabella. Why would they not find a new, more capable candidate in an electorate which will clearly vote conservative, given a halfway decent choice?

The number of cross benchers is a serious problem for both the Coalition and Labor, particularly as the phenomenon is looking to be not just entrenched, but growing. It certainly shows up in the simulation. Based on current betting, Labor has less than 1% chance of forming a majority government. However 20 - 30% of paths lead to a hung parliament. The large confidence interval is due to the sensitivity of seat distributions to the uncertain correlation parameter in the simulation. The 20 - 30% chance of a hung parliament is estimated from the range of reasonable voting correlation parameter estimates.

There are approximately 70 seats “in play”. Of these, some are under speculative attack from the Greens (Grayndler, Sydney, Higgins, Wills, Fremantle), but in the North Melbourne Labor heartland of Batman, the Greens are currently paying 2.10 - 2.30.

Tight contests are Eden-Monaro (as usual), Macarthur and Page in NSW, Dunkley and LaTrobe in VIC, Brisbane, Capricornia and Forde in QLD, Grey, Hindmarsh and Mayo in SA, Burt (new), Cowan, Hasluck and Swan in WA, Braddon and Lyons in TAS and Solomon in the NT.

Only 18 seats in the genuine 50/50 range and the government with a 30 seat majority goes a long way to explaining the low probability of an ALP majority.

The other problem for the major parties is the translation of the upper house voting strength of Nick Xenophon to the 11 lower house SA electorates. His team is polling strongly in 7 of these 11 electorates. More problematic for those who want to avoid a hung parliament is that 5 of the 7 would otherwise go to the Liberals.

Xenophon’s team will probably win 1 or at most 2 of these 5, however that increases the likelihood he will be in a strong position to negotiate in BOTH houses with Malcolm Turnbull (who has shown himself to be more eager to please all interests than a leader should be).

The most important outcome of this simulation is the higher than I thought probability of a hung parliament. Many other countries have them, however Australia has no tradition of it, so the minor parties and independents have no real experience of working WITH governments instead of in their own interests. This is a serious problem, given the level of global and political instability. Great for derivatives traders, bad for manufacturers.

I will run another simulation on Fri July 1, the day before the election.

A Simple Fix For Negative Gearing

There is a simple way to remove the taxpayer subsidised market distortions of negative gearing of property investments: allow losses to be carried forward, but not offset against other income, such as wages.

For example, suppose someone has an investment property which earns $25,000 pa rent and has interest costs of $30,000 pa, plus other costs of $5,000 pa. The investment is making an accounting loss of $10,000 pa. The current law allows the investor to deduct this $10,000 loss from their salary (or other) income in their yearly tax return. For high income earners ie. those earning above $180,000, this $10,000 deduction saves $4,900 in tax.

The alternative is that the $10,000 would not be allowed to be deducted from salary or other income. Rather, it could be carried forward to future years and only deducted from future property investment income. A modification would be to class all income producing investments eg. property, bonds, equities as being of the same type and allow income and expenses (including interest) to be combined within this class. This effectively allows investment property to be negatively geared only against profit generating investments in that class.

This is not an unusual or radical solution: in fact it is the current norm in tax law.

The underlying principle is that losses can only be claimed as deductions if a business intends to make a profit. It is understood that businesses may have several years of losses in their start up phase, or in difficult market conditions. However, the goal of the business should be to grow revenue and eventually become profitable.

The Australian Tax Office does not allow “non-commercial losses” to be offset against other income. That means a business activity must be structured with the intent of being, or at least becoming profitable. Deductions for losses derived from “hobby businesses” or structures designed to run at a loss through cross invoicing, transfer pricing or similar are disallowed. The circumstances and tests for allowable deductions are listed on the ATO website.

The rules around offsetting losses from one business activity against profits from another are part of Division 35 of the Income Tax Assessment Act. They essentially boil down to whether or not the business activities are deemed separate or substantially similar. For example, a winery with its own restaurant would be considered similar business activities, so if the restaurant made a loss, that could be deducted from winery profits. A car repair business which bought a florist could not offset losses of the florist against profits of the other, because those would be considered separate business activities.

In the latter example, the losses of the florist would be carried forward and only offset against future profits of the florist business.

This is exactly the rule I am proposing for property investment. Investing in property (and other tradable financial instruments) is clearly a separate business activity from most people’s wage generating employment. Thus, it should be treated according to the existing tax rules for separate business activities.

The problem with negative gearing is that the property investment is deliberately structured to make a loss. When the current portfolio begins to generate positive cash flow, more property is purchased to re-establish the negative gearing. Thus, those deliberately generated losses should be carried forward and offset against future investment profits, not deducted from salary income and subsidised by the taxpayer.

A meaningful effect of this change in policy would be to force property investors to pursue strategies designed to eventually return significant profits, or else the losses carried forward will not be able to be used. Note that this does not prevent investors from negative gearing: it requires them to make investment profits to deduct those losses. After becoming cash flow positive, an investor could add another negatively geared property into the portfolio, reducing profits or even creating an accounting loss, which would be carried forward to future financial years.

This simple change in policy brings the tax treatment of property investment into line with that of other asset classes. Disallowing negative gearing against salary income will cause some investors to have a lower price ceiling, however those with existing, cash flow positive portfolios will not have their strategies or price ceilings materially affected.

Contrary to self serving, dishonest and hysterical claims that restricting negative gearing could cause property prices to crash, the downward pressure on prices through decrease in demand will be modest, certainly smaller that the effect of a couple of interest rate hikes, when they eventually happen. There will not be waves of forced sales because there will not be waves of investor defaults. After the lessons of the GFC, banks will certainly not do any forcing based on lower debt coverage ratios alone.

With the property market severely overheated in most capital cities due to chronic undersupply, interest rates at historic lows and forward rates expecting further falls, this is probably the best time we’ll get to make sensible changes to negative gearing.

Coupled with the gradual, longer term effect of more investment in public housing, this change to negative gearing will help control the excessive growth of Australian capital city property prices, which has been fuelled by low interest rates, undersupply and high immigration of money. Additionally, after causing initial hardship to those currently in negatively geared positions, it will lead to decreased risk in investors’ positions and thus lower credit risk and capital charges for lenders.

The ALP's Repeal Of Optional Preferential Voting In Queensland Is A Cynical Attack On Democracy

Optional preferential voting allows voters to number 1, 2, 3, ... as many of the candidates as they choose. One option is to just put a 1 next to a single candidate. Many voters in fact do this. Some indicate their most favoured with a 1 and a second preference with a 2, then leave the rest blank. Some preference all candidates right down to the last.

Each voter gets to say: “I prefer these candidates, in this order and further, I don’t want to see any of these ones elected at all.” If they wish, voters can preference a few minor parties, then have their vote exhaust if those are not elected.

Compulsory preferential voting forces all voters to rank all candidates from first to last, or not have their vote counted at all.

The point is that optional preferential voting gives voters an extra choice: abstention. They can still preference all candidates if they wish, but they don’t have to.

Which system do you believe is more democratic? I suggest the one which gives more choice. The fact that the choices of the compulsory preferential system are a subset of the choices in the optional preferential system strongly supports this argument.

So the grubbery of Queensland’s Labor government pushing through legislation to replace optional preferential voting with compulsory preferential voting is a genuine attack on democracy. With no upper house in Queensland, the changes are now law and will be in force for the next state election (and preceding by-elections).

The real reason the ALP changed the system is to force previously exhausting Green votes back to them. This may well get them across the line in several marginal electorates and help them retain government. It is well known that if forced, the overwhelming majority of Greens’ preferences flow to Labor, while as many as 40% exhaust under the optional preferential system.

The two Katter Party and two independent MPs whose support was required to see the legislation pass did so out of pure self interest: compulsory preferential voting usually assists minor parties and independents because many people who vote for them put the major parties last, allowing preferences to flow between minor parties and independents, rather than exhaust.

This legislative change was rendered all the more farcical by it being pushed through with 18 minutes notice, after the LNP had succeeded in adding an extra four seats to the Queensland parliament (with the help of the Katter Party and ALP defector Rob Pyne).

The most ridiculously dishonest claims came from Attorney General Yvette D’Ath, who accused the opposition of hypocrisy, given that it had forced the vote on adding the four seats, then followed up with the claim: “These amendments are about reducing the number of informal votes that we see at state and federal elections.”

Really? How, exactly, would changing a system people are used to and forcing voters to number MORE boxes REDUCE the number of informal votes?

The claims of LNP hypocrisy are also absurd: the legislation adding the extra four seats had already been debated twice. The previous debate meant the changes had sufficient time to have been discussed in the media. With the help of the cross bench, they forced a third debate, which saw the legislation passed. Slightly different to blindsiding not just parliament, but the electorate with obviously self serving changes which I suggest most voters don’t want.

Complaints that adding an extra four MPs will cost Queensland taxpayers around an extra $1M p.a. are legitimate, however Queensland has had 89 MPs since 1986. During the past 30 years, the Queensland population has grown 85%, from 2.6M to 4.8M (3M of which are eligible to vote). That’s an average increase of 3.0% p.a., compared to the Australian population growth rate of 1.75% over the same period.

Queensland has grown a lot since 1986, so increasing the number of MPs from 89 to 93 probably is not all that unreasonable.

What motivated the LNP (and the Katter Party to support them) is the change in population balance toward SE Queensland over the past 30 years. Looking at population changes by LGA, the greatest growth since 2005 has been in Brisbane, Ipswich, Logan, Moreton Bay, Gold Coast, Sunshine Coast, Townsville and Cairns. Thus, if the number of seats was kept at 89, any electoral redistribution may well have created extra seats in the south east and amalgamated some in rural areas. Not something they would have wanted.

Adding an extra four seats, probably all in SE Queensland, will allow the LNP and Katter Party to avoid a significant redistribution of rural seats. Given that the ALP could well gain at least 2 and possibly 3 of the extra 4 seats, they really have no reason to complain.

However, all Queensland voters have good reason to vigorously complain about the return of compulsory preferential voting, because it takes away an important choice: the right to choose none of the bastards.

I’d like to see the non-ALP voters of Queensland protest by preferencing Labor last. But realistically, it won’t happen. The outrage will have died down and be harder to revive by the next state election in 2019 and most Greens voters will preference the ALP second last and the LNP last.

The only real hope is to see the ALP lose seats in by-elections between now and 2019, lose the support of the cross benches and lose government.

Of course, if Campbell Newman hadn’t run such an arrogant, unconsultative government, the ALP would never have been elected in 2015. It takes a real tin ear to lose government in one term from a 78-7 majority.

Thanks Campbell, you fuckwit! Now look what you’ve done for Queensland.

Australia Will Become A Republic But It Will Succeed On Tactics More Than Emotion

The Australian Republic debate is back on again, at least until people realise it actually isn’t the most important issue of our time, because the only model which could possibly succeed at a referendum is the minimalist one.

Even the change to a minimalist republican model is not entirely symbolic. It should and will happen, probably within the next 10 to 20 years. There are many reasons for Australia to become a republic, most important of which is cleaning up the Constitution to permanently remove historical anomalies which no longer logically fit with a modern, independent Australia. However, the process of changing to even a minimalist republican model is not as simple as some believe.

By minimalist model, I mean substantially the one put to the 1999 referendum: that the Australian Head of State or President has the same powers as the current Governor General and the method of and conditions for appointment and dismissal are clearly set out in the Constitution. Effectively, it means keeping the Governor General, with a few tweaks, which are:

·         Appointment requiring a 2/3 (or similar) majority of both houses, where currently the GG is chosen by the Prime Minister (and formally appointed by the British monarch). A 2/3 majority was proposed in the 1999 referendum.

·         Clarifying the method of and conditions for dismissal of the GG. The 1999 referendum allowed the GG / President to be dismissed by the Prime Minister, with the requirement that the dismissal be ratified by the House of Representatives.

·         Possibly changing the title to President. 

With the same delusional ignorance as evinced by many during the 1999 republic referendum debate, Peter Fitzsimons believes, as do the Australian Republican Movement (ARM) that we should begin the process by simply putting the following question to the people and it would be answered with a resounding “Yes”:

Q: "Do you think Australia should have an Australian as our head of state?"

Then we will ask the public to choose from a set of proposed republican models and finally put the chosen model to the public in a referendum.

It smacks of enthusiastic amateurism: we’ll sort out the “big”, political question and worry about the details afterward.

But that’s not what leads to successful referenda.

What they really mean is that the above question would be asked in the form of a plebiscite: a non-binding vote of the entire Australian electorate. The choice of specific form of the republic would then be via a second plebiscite and in a third stage, the required constitutional changes enacted via a subsequent referendum.

The ARM and Fitzsimons’ error is one of logic.

The first plebiscite decides whether a majority of Australians prefer some type of republic over a constitutional monarchy. Suppose they do. Let’s write this as R > M, where R is the number of voters who want a republic and M is the number who want the status quo.

The second plebiscite asks ALL voters, including constitutional monarchists to rank a set of competing republican models: R₁ > R₂ > ... > R_n with R₁ + R₂ + ... + R_n = R + M.

They then assume the most popular republican model R₁ would automatically be chosen ahead of a monarchy in the ensuing referendum. Therein lies the flaw.

The republic model ranking is not only decided by the R people who want a republic: the M monarchists also get to vote. The monarchists will almost certainly skew the relative proportions for each republican model and possibly even the order of the ranking. In fact, most monarchists would choose a minimalist republican model, almost certainly ensuring it would win the second plebiscite.

What the first plebiscite demonstrates is that (R₁ + R₂ + ... + R_n – M) > M. But that counts all the people who want at least one of the types of republic and shows they number more than the people who don’t want any type.

The referendum asks the public to decide the proposition R₁ > M after that particular republican model has been chosen in the second plebiscite. But then nearly all the monarchists who contributed to republican model R₁ winning would no longer vote for it. It could easily be the case that both the monarchists and many of the republicans who did not have their model chosen would vote against republican model R₁ and so the referendum would fail.

Let’s look at a concrete example to see it better:

There are about 15 million eligible voters in Australia. Suppose 9 million want a republic of some type and 6 million want to keep things the way they are. The first plebiscite would easily be won by the Yes case with 60% of the vote.

Many republicans believe Yes would be significantly higher, but I think they are underestimating the number of people who would be worried by such an open ended process and what might eventually come out of it. The republicans also don’t grasp the degree to which their undercurrent of moralising and the association of the Yes case with the left turns people off. There is a subtle denigration of people who don’t want to change the Constitution as old conservatives and (probably racist) rednecks. This is felt and it galvanises the No case.

Now, after the republicans winning the first plebiscite, everyone, monarchists included, get to choose a republican model. Suppose there are 3 choices: the minimalist model, a directly elected President with similar powers to the GG and a directly elected President with significantly increased powers. Quite possibly, the middle choice might be the most popular amongst republicans. Suppose of the 9 million republicans, 3 million want the minimalist model, 4.5 million want the second model and 1.5 million want a President with increased powers. But now add in the monarchists’ votes. Almost certainly, the overwhelming majority, let’s say 90% = 5.4 million would choose the minimalist model. It would then resoundingly win the second plebiscite with 56% of the vote.

Finally, we have our referendum. Almost all the monarchists who chose the minimalist republican model in the second plebiscite now vote against it, as do many angry republicans who want a directly elected president, as they did in 1999. Suppose 150,000 monarchists change their minds and vote for the minimalist model but 25% of the 6 million direct election republicans vote against it for tactical reasons. This would give the Yes case 51% of the overall vote. However, it may not be evenly distributed. Look at the 1999 results. It is certainly possible for the Yes case to garner 51% overall, but lose in QLD, WA and TAS (or SA). The Yes case loses because it did not carry a majority of states and we have no republic.

The above is a particular, but quite possible example. It is one of many scenarios which would lead to the same result: the majority of Australians wanting a republic, but failing to get one due to misunderstanding of the political process and mismanagement of the campaign.

What the analysis shows is the crucial importance of political tactics derived from logic and psephology, not emotion and ideology. Avowed republican Malcolm Turnbull is correct in imploring the republican side to move slowly and get the campaign right.

The ARM and Fitzsimons are tacitly assuming that a sufficient number of republic supporters who did not have their model chosen in the second plebiscite would come across to support the winning model instead of the status quo. That might happen if this was a one shot deal, but it’s not. It’s not what happened in 1999, where many supporters of a directly elected president rejected the minimalist republican model in the hope of getting what they wanted later.

Their wish for a directly elected President might be naive, but their tactics were not. They believed that if the minimalist model won, they would have less chance of later changing to a directly elected President than they would of implementing their preference at a future referendum which decided between a directly elected President and the current constitutional monarchy. I think their belief is wrong, however given the belief, their tactics were not.

Without a clear definition of "Head of State": the powers, responsibilities, who is qualified and method of appointment and dismissal, the seemingly simple question “Do you want an Australian Head of State?”, which most Australians support in principle (and probably supported in 1999) could well be defeated.

One problem with the Yes/No first, then decide on the details approach is that many people who want a minimalist republic (like me) will vote No to defend against the otherwise very real possibility of getting the type of republic we most definitely don’t want: one with a popularly elected president with unreasonable powers which radically alter the balance of responsibility and authority between the executive and parliament.

Another serious problem is that any change to a republic requires significant changes to the Constitution.

Sections 2 (appointment by the Queen), 59 & 60 (Queen’s right to reject or withhold assent from legislation passed by the parliament) and 74 (right of appeal to the British Privy Council) need to be repealed in their entirety.

Sections 3 & 4 (salary and hold no other office), 61 (executive power vested in the Queen) and 70 (powers of the GG) need to be completely rewritten, defining the powers of the new Head of State / President. Additional sections need to replace s2, setting out the method of selection, appointment and dismissal of the Head of State.

Many other sections require the replacement of the words “the Queen” and possibly “the Governor General”, however these are trivial matters.

All of this can be accomplished with a single piece of legislation. This bill would be passed by both houses of parliament and the purpose of the republican referendum would be for the Australian electorate to accept the legislation.

That’s fine in theory, however in the matter of a transition to a republic, it really is an all or nothing job. We can’t just change some of the above sections of the Constitution and not others, so we can’t have multiple bills, accepted or rejected via distinct referendum questions. Thus, it is crucial to ensure the powers and method of appointment and dismissal of the new Head of State will be agreed to before putting the referendum question.

If a majority of voters strongly disagree with one or more elements, say the powers or the method of appointment, the entire bill may be rejected on the grounds of “It works well enough as is. There’s no hurry. Let’s go back and get these changes right and then we’ll agree”.

This is in large part what happened when the 1999 republican bill was defeated.

In 1999, the question asked was:

A proposed law:To alter the Constitution to establish the Commonwealth of Australia as a republic with the Queen and Governor-General being replaced by a President appointed by a two-thirds majority of the members of the Commonwealth Parliament.

It was accompanied by legislation which addressed almost all of the Constitutional reform issues above. One omission was that the bill did not codify the conditions which would allow the dismissal of a government. Currently, s5 simply says the GG has the authority to do it. Over codification is not a good idea in a common law polity, however with only two Australian precedents, the inclusion in s5 of some guiding principles may have been helpful. Such changes may have been omitted in the belief that any proposal would of itself have created sufficient division to see the entire question rejected.

The problem with the 1999 referendum was not that the legislation accompanying the question was insufficiently thorough, or that it contained sneaky proposals, but that it was poorly explained.

The enabling legislation was necessarily complex. Despite broad internet access, the web was not such an integral part of life as it is today. Many people never saw the text of the constitutional changes, let alone had them explained. The Australian Electoral Commission distributed a pamphlet summarising the Yes and No cases, but that’s not really analysis of the effect of the republican proposal. I followed the debate closely and yet recall very few instances where the why and how of the mechanics of the political and Constitutional changes were openly discussed in fora where the public could ask meaningful questions and get meaningful answers. The serious problems accompanying a directly elected President with increased powers were inadequately explained to supporters of that position (even the ones who would listen).

The Yes campaign focused primarily on symbolism, national maturity and even had an “It’s Time” feel, with a feast of celebrities and “prominent” Australians telling us all that we could really only be a properly grown up nation by becoming a republic. That was pretty much their whole argument. Even the AEC’s pamphlet had 4 pages of Yes argument and 9 pages of No. The republican movement couldn’t even manage to find sufficient points to fill 5 more pages, which the AEC intentionally left blank, presumably to demonstrate they had given equal opportunity to both sides, but in effect giving the sense that the Yes case was significantly weaker.

The Yes case’s lack of substance, together with the perception of it being led by elites made it any easy target for Australians For A Constitutional Monarchy (ACM), who cast the republicans as posturing, elitist wankers, trying to impose their ideology on a public who didn’t want something which wasn’t broken “fixed”. The “It’s Time” tone added to the feeling that somewhere in there was the inner city, academic leftist agenda and ACM certainly exploited this. Former High Court Justice Michael Kirby penned a useful analysis of why the 1999 referendum failed.

Without the clear definition of role and powers, the same scare campaign which succeeded in 1999 will probably succeed again, this time because it will actually be rooted in fact.

Another problem which I don’t believe has been sufficiently discussed and understood is the important issue raised by the change of title to President and its ensuing effect on the method of selection.

The 1999 referendum proposed a President but it really isn’t necessary. In fact, I believe such a title contains a potential danger: many people will want to directly elect a President, who they may view as a people’s champion, particularly if the government of the day is unpopular. That means they will want to invest the President with more powers, creating a division between that office and the parliament.

This is not how our system of government works and nor should it be. It leads to money politics, as in the United States.

The Australian Governor General / President has limited executive powers in the absence of government and authority on some constitutional matters, particularly an impasse, such as in 1975. Otherwise, the role is largely ceremonial.

The GG’s powers, particularly the ability to dismiss a government require a sound grasp of the Australian Constitution, related constitutional and parliamentary law and the process of government. So that they are qualified, a list of potential candidates should be interviewed and chosen by a committee appointed by parliament. The Prime Minister should then make the final choice, subject to the required majority approval by the joint sitting of parliament.

Most people who may be proposed as a popularly elected President are unqualified for the role. A popularly elected President may also be tempted to test the boundaries of their authority. That, together with the maintenance of parliament’s governing authority is why the GG / President should always be appointed by parliament and never popularly elected.

I recall some idiot proposing Cathy Freeman as a possible President during the 1999 republic debate, to a not insignificant chorus of approval, I might add. These days, it would be Adam Goodes. How would either of them (or a multitude of other symbolic and manifestly unqualified candidates) handle a constitutional crisis such as the blocking of supply? This is why all positions other than MPs are best appointed.

A better strategy is to first decide on the form of the republic and the GG/President’s role and powers, make sure most people understand it, then put the question. The current role of the GG, chosen by a 2/3 majority of a joint sitting of parliament would probably get up, since it would scare very few. We ought to be able to do this by 2020, even though it really is not the most important current issue.

Along those lines, if there was some doubt as to the above referendum passing, a possible tactic would be to hold a referendum repealing Sections 2, 59, 60 and 74, plus rewriting the Queen related sections discussed above. The appeal would be to clean up the Constitution, formally removing all legal power Britain has over Australia. In fact, this was essentially achieved by the Australia Act of 1986, whose legislation causes any of the above sections of the Constitution to be overridden.

Nevertheless, this act can in theory be repealed. A referendum which simply removed or altered the above sections would in effect be a republic by stealth, but would probably succeed. Subsequently, a referendum proposing the minimalist model, which then really would require very minimal changes, would also probably succeed.

I only suggest this strategy as a fall back. More preferable would be to agree on what would almost certainly be the minimalist model, galvanise support from both sides of politics, then put it to a referendum.

Realistically, the only possible republican models are the ones I set out in the numerical example above: the minimalist model, a directly elected President with similar powers to the GG and a directly elected President with significantly increased powers. It is not necessary to waste taxpayers’ money on another Constitutional Convention, a disgraceful profligacy which I believe contributed to the negative mood that aided the No case.

If we truly are a nation sufficiently mature to become a republic, we should be able to openly discuss and debate the above three models. After sufficient time, the government of the day should be able to gauge the electorate’s mood, select the model which would most likely achieve strong elements of bipartisan support, construct enabling legislation, put it to the populace as a referendum and see the republican quest succeed. It’s not a Herculean task, but does require some political analysis and careful tactics.