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Journalist comments on the new, critical ALP voter and economic literacy

KEVIN HUME: Joining us, our Monday columnist, Brian Toohey. If you look to the deep north, Brian, do you find, well, I don't know, socialist inspiration there?

BRIAN TOOHEY: I think what's very interesting is that there seems to be quite a strong change occurring in Australian politics. In the last election, Paul Keating raised the expectations of traditional Labor supporters very strongly by his attacks on Hewson. Hewson was going to tear up the social fabric, rip into the social wage, and he, Paul Keating, would look after the social safety net and all the rest of it. Yet, people like Goss seem to be saying: Look, it's all business as usual; I'll go back to Queensland after the Premier's Conference and say 'Look here, I've been hit around the head in Canberra, I'd better tear away at a bit more of the social wage, et cetera, et cetera'.

And this time, much more strongly than in the past, unions - not just teachers unions but unions across the board - are starting to say: No, this is no good. And it has certainly put him on the back foot. He may well go ahead and do it, but there seems to be a very changed climate in that regard. I mean, back in the '80s, it would have been: Cuts; it's good for us, give us some more. Whereas now, I think it's going to suggest that Labor's, federally, going to have trouble meeting that one per cent deficit target a couple of years from now unless it strongly lifts revenue. I mean, in Queensland, people are calling for taxes to be increased. They don't have taxes which occur in every other State in Australia. Some of the ones on banks, financial institution duty-type taxes, are not available in Queensland and that would seem to be a fairly obvious one to put on.

But in Canberra, I think the lesson is going to be that they're going to find it delicate going if they try to get that final deficit goal simply by carting ....

KEVIN HUME: And yet, curiously, the ALP - looking across the factions in Queensland - has been essentially a fairly conservative party, so where is the spark of rebellion coming from? What explains it?

BRIAN TOOHEY: Well, in some ways, what Paul Keating was on about in the election was very much appealing to a conservative, traditional, upper party vote. I mean, Paul Keating's often criticised the Labor Party as losing its way in the '50s, the '60s and '70s and so forth, and he sees himself as being very much in a conservative tradition, but nonetheless, they still emphasise these sort of things where you have some public sector role without - like teachers and so forth - so that in many ways, he's created this climate of expectation which they're going to find very hard to dash.

Where we can see it I think, at the moment, is in the proposals to reorganise the CSIRO. A few years ago, that would have been put forward as reorganisation equals reform equals an automatic advance, and probably someone would have been paid $5 million to dream up a new logo and change its name to Auscience or something like that. Now, we've got a revolt on their hands and people are looking at - within the CSIRO and that - are noting that the proposal comes out of Finance and are very suspicious that it means yet another cut in science budgets.

But the most interesting thing I found was people just revolting at the idea of yet one more reorganisation, one more turning upside down of organisations, shifting people's titles around, shifting branches around, and saying: You know, we've actually got some work to do here; what's this all about?

KEVIN HUME: It raises a question indeed, though, of what is the nature of real reform. Is the Labor tradition one of social redistribution or is it increasingly a conservative tradition as Wayne Goss would seem to be indicating?

BRIAN TOOHEY: Well, I think it's just too early to see that, what's going to happen in the '90s in that regard. That's something Keating has to come to grips with and you get no feeling, at the moment, that he is in any way really wrestling with that. You must expect this coming up to Budget, but they're basically locked away in Canberra at the moment working out where they can chip away at this, that and the other before they decide what sort of taxes they'll try and make up, whatever gap it is they've got in terms of a deficit.

KEVIN HUME: Would you trust those politicians to make the economically literate - choose the best economically literate solution to those problems, Brian?

BRIAN TOOHEY: It's a wonderful phrase, isn't it? We keep hearing it in Australia how people who aren't economically literate or - Peter Walsh is very keen on accusing people of not being economically literate. So I was rather amused to read a recent essay by Milton Friedman - it's in a book called The Future of Economics - where Milton Friedman - who is by no means a slouch when it comes to mathematics; certainly would leave Peter Walsh for dead - he says that he finds, in terms of the academic journals today, that very few people would be able to - this is economists - would be able to do more than skim many of the articles. 'To do more than that' - and this is what he says - 'would be close to a full-time job and require a command of mathematical and econometric techniques that few of us possess', and if Milton Friedman is saying that, it means that most other economists don't possess those techniques. So that in terms of being economically literate, most economists can't read the academic journals, so how do you expect people like Peter Walsh to do so, despite his claims?

And Milton Friedman has focused on another interesting thing there and that's the way in which computers have made this a lot easier. He says the computer revolution has induced economists to carry reliance on mathematics and econometrics beyond the point of vanishing returns, and he complains about people now just sort of mining databases and then dumping a heap of data into a computer and then applying one or other of the software packages - .... software packages you can buy now and whacking it through the economic ringer, as he calls it, and getting yourself a journal article.

KEVIN HUME: You must have some sympathy, though, for the honest lay person, like Senator Peter Walsh, trying to make sense of this increasingly arcane and esoteric magicians' runes and rituals that passes for economic theory these days?

BRIAN TOOHEY: I have no sympathy for him at all. He claims to understand it all. I am sure he never reads any of it or even attempts to do so. Oh, no, I have no sympathy for people who make boasts about their own economic literacy.

KEVIN HUME: Right. We'll leave it there. We'll have to organise a bit of a stoush - maybe get Peter Walsh in to discuss that not so esoteric point with you, Brian Toohey. Thanks for joining us.

BRIAN TOOHEY: Thanks.

KEVIN HUME: Brian Toohey, our Monday columnist.