Friday, 3 September 2010

Mad Katter

Australia's three remaining Independent MPs get to decide whether Labor or the Coalition form government. Here's selections from the wish list of one of these four: Bob Katter.
  • The removal of the tax on Australian-produced bio-fuels and the introduction of statutory 10 per cent bio-fuel (ethanol) content in all petrol rising to 22 per cent (as in Brasil) [bad idea - ethanol mandates have proven pretty ineffective at best, harmful at worst; maybe slight edge to Labor/Green]
  • Address the two chain oligopoly in the Australian food retailing sector. The option of divestment (a maximum market share for any chain of 22.5% only) and/or a maximum mark-up of 100 per cent between the farm gate / factory price and the retail price [the former is bad, the latter is absolute nutball lunacy]
  • No carbon tax, no ETS [advantage Coalition]
  • No mining tax [advantage Coalition]
  • Removal of Wild Rivers Legislation, restoring recreational freedoms [advantage Coalition]
  • Provision of title to indigenous communities [rather than collective ownership, good move, advantage Coalition I'd think]
  • Protection against uncompensated takings [advantage Coalition]
  • Restoration of collective bargaining rights to Australian farmers [allowing reinstitution of single desk marketing boards, best I can tell. Ugh.]
  • Establish a taskforce to secure action to provide: all-weather anchorage roughly every 30 km, micro resource development at five towns... a port ... upgrading a highway...[all weather anchorages every 30 km? What's the circumference of Australia? 25000 km or so? 800 anchorages?]
  • Give solar hot water heaters to old people because old people have money problems due to "rapidly escalating costs for rates, electricity, insurances...". [hot water heaters to alleviate poverty among the elderly. Interesting.]
  • Devalue the dollar
The next Australian government has high odds of being a disaster. Maybe a slight lean towards Coalition in Katter's demands, or at least the set of them seems like it would require a smaller policy move by the Coalition than it would require from Labor. But many of them are mad. Hopefully the mad ones are the ones for which his preference intensity is weakest.

If I could push a button to send all the Independents one way or the other, I'd be sending them to Labor at this point, mostly because that would get Andrew Leigh into Cabinet.

As for betting, I'm rather better off if the Coalition wins. The markets went from about 66/33 in the Coalition's favor before Wilkie went with Labor to 66/33 favoring Labor. I think I'll go a little longer on Coalition at current prices given Katter's wish list.


  1. I think the two supermarket oligopoly is pandering to the beliefs of some farmers that they're getting screwed - the price they're paid for a live lamb, v's the price per kilo for a leg of lamb at the local supermarket.

    Many in Australia believe this is because of the power of the two big supermarket chains.

    There is some substance to that - for example, the stories I hear from people in the industry about the payments you have to make to the supermarket so as to get shelf space.

    And rumours abound about the deals you have to do to provide own label products for the supermarkets in order to get shelf space for your branded products. These things, to me, are things that shouldn't be happening, and it seems plausible that the shortage of competition is driving some of them.

  2. Same thing happens in Canada and the States, so I don't think it's lack of competition. Slotting fees at supermarkets are common.

  3. Doesn't it indicate an imbalance of power when one portion of the supply chain has the power to demand fees from the other levels of the supply chain? Although since Supermarkets aren't overly profitable, they're presumably giving that fee back in some other way - as lower prices or some such.

    The main thing that annoys me is that Skippy cornflakes are slowly disappearing in Australia, and I fully blame the slotting fees (as you describe them) for that.

  4. 1. For big chains, they'll demand a listing fee to be in their wholesaler's catalogue - helps signal that the firm is big enough to handle demand from a massive chain.

    2. Shelf space is of value, and shelf space closer to eyeballs is of highest value.

    There's a big econ lit on this that I can't access now with crap earthquake internet. Go to google scholar, type in "slotting fees" + Economics, see what comes up.