August 27, 2004 | Graham

Were they up late watching the cycling?

Two days ago, as reported in yesterday’s Courier Mail, John Howard and Mark Latham both seemed to be giving the wrong questions to the right answers. Latham was asked why he had private health insurance if he was opposed to it, and Howard was asked whether he thought he was going to lose the next election.
Latham’s answer to this simple question (and Labor has had some days to hone their lines on this) should have been something along the lines of a concession that private health insurance was something that many Australians, including himself, took out because of the state of Australian hospitals. He could then have tied this to the need to completely reform the health system, while pointing out that Howard only has the imagination to patch the old system up. It is not as though the ALP is opposed to the health rebate or private health insurance, or that many of their voters don’t have insurance themselves.
Instead he pesonalised the answer in another way. He said that he is opposed to private health insurance “on principle” but two years ago his accountant had convinced him that it was cheaper for him to join up than to stay out. This answer leaves Latham open to some pretty devastating attack ads.
The cost to a taxpayer who does not take out private insurance is a 1% surcharge (Medicare levy surcharge) on their income. Payment of this surcharge is income contingent. If you are a married person, then you have to have a family income of at least $100,000 per annum before you pay the levy, and it could be more, depending on how many children you have. If you are to avoid the levy, then you have to take out health insurance. Latham has basic hospital cover. This is as cheap as it gets, but it still comes to $844.48 p.a. on the most recent MBF rates (allowing for the 30% rebate).
The cost of the levy versus the cost of insurance allows us to construct a matrix of how much Latham’s principles are worth. This year as Opposition leader he earns $197,000 and therefore has the choice of sticking with his principles, and paying the levy of $1,970, or purchasing basic health cover for $844.48, making his principles on this matter worth $1,125.52. Interestingly, the less he earns, the cheaper his principles come. It is even possible that two years ago the difference in cost of being in or out of private health was pretty close to zero for him on the assumption his income was very close to the $100,000 threshold.
So the attack ads could be along the lines of “How much are this man’s principles worth?” and feature a series of issues, including this one, where Latham’s and Labor’s actions are at odds with their public pronouncements. Health is one of Labor’s strong suits, but they have already undermined their position by caving on the PBS, tried to claw it back on the FTA, and now put it at risk via an inadequate explanation of the leader’s health insurance arrangements.
Howard’s wrong answer was when he told Western Australian journalists that the Liberal Party polling showed them doing well in the marginal seats. It is axiomatic that in Australian elections you play for the under-dog position. There are a number of reasons for this. To say you are going to win makes you look big-headed and complacent. It also puts the focus on what you will do if you win, when you want the focus on your opponent and what they might do if they were to win.
This was one of the basic strategies behind Howard’s 1996 campaign, so it should be burned into his mind, particularly as polls this year have consistently shown two things – Labor ahead, but voters convinced that Howard will win. The combination of these two things makes it probable that more voters will vote against the government than otherwise because they may think it safe to lodge a vote protesting against a particular issue or issues. It will also make the enemies of the government less complacent than they would otherwise be.
In the 1995 state election the Coalition was able to take some unguarded public comments by Mike Kaiser, the Queensland State Secretary, about Labor’s intention to win another 6 seats to turn public sentiment around. In 2004, perhaps Howard has given Kaiser, now Assistant National Secretary, the opportunity for a payback.
Two weeks of staying up watching the Olympics should have taught Howard and Latham that it is easier to lose than to win.

Posted by Graham at 10:33 am | Comments Off on Were they up late watching the cycling? |
Filed under: Australian Politics

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