Double Or Nothing

I’d like to introduce you to yet another Australian politician you’re unlikely to have heard of in the Northern hemisphere. This one, however, has a gun pressed against the head of the Gillard government. And he has openly announced the date on which he will pull the trigger.

Meet Andrew Wilkie, the independent Federal MHR for Denison—the seat covering Tasmania’s capital city, Hobart. Wilkie’s a bit of an odd duck; a former army intelligence officer who resigned his position over ethical concerns related to Australia’s involvement in the Iraq war, he has at times been a member of both the Liberal Party and the Australian Greens, running as a Greens candidate in the 2004 Federal election, before moving to Tasmania and running successfully as an independent in 2010. As one of the four MHRs holding the balance of power in the Lower House the day after the election, he found himself in a uniquely powerful position, and entered into a period of seventeen days of negotiations with both Tony Abbott and Julia Gillard. To secure Wilkie’s commitment to guarantee Labor both Supply and Confidence in the House (the bare minimum requirements for a government to function under the Westminster system), Gillard acceded to (amongst other things) one extraordinary demand of Wilkie’s.

Wilkie had campaigned in 2010 on an anti-gambling platform. Specifically, he opposed the spread of poker machines (“pokies” in our vernacular). A little history here may clarify: prior to the 1990s, poker machines in NSW had been restricted by law to registered clubs (predominantly RSL and sports clubs). The rationale of this arrangement was an implied (though never codified) social contract, in which the profits from these organisations were pumped back into the community According to this paper, New South Wales clubs are home to 40% of all “high intensity” poker machines in Australia, and an estimated 8.2% of all those worldwide (despite having less than 0.1% of the world’s population). It was only a matter of time before pubs wanted their slice of the action, and through the politically powerful Australian Hotels Association (the pubs’ peak industry body, and one of the largest donors to both major parties) successfully lobbied for the introduction of poker machines into NSW pubs. As a working musician at the time, I can tell you the immediate effect of this move: it pretty much killed off the thriving live music industry in the state. Within a year of the new legislation, virtually every pub in Sydney had removed its stage area and replaced it with an enclosed pokies room. The social effect of introducing these machines in an environment where the main activity was alcohol consumption was also profound. According to a number of studies, problem gamblers represent just 2% of all those who play the pokies. Yet they are responsible for a staggering 46% of poker machine takings. And therein lies the moral hazard, and the nub of the problem.

Wilkie’s solution is to introduce mandatory pre-commitment levels for all players of poker machines. Essentially, players will need a license to gamble. He cites as justification the enormous social problems caused in this country by gambling addiction; problems which are undeniable in this country, and whose follow-on costs in family breakup, drug and alcohol addiction and suicide are unquantifiable. Julia Gillard, in her desperation to seize power at any price, agreed to introduce legislation creating mandatory pre-commitment for all poker machines in the country. Wilkie’s promise: that if such legislation has not been passed into law by the time of next May’s Federal Budget, he will withdraw his support for the Gillard government. Simple as that.

The Libertarian view on gambling is clear. People who wish to self-destruct are going to do so; be it by gambling, alcohol, drugs or any number of other high-risk activities. Laws cannot stop them from doing so, never have and never will. For instance, Frank Hardy’s classic 1950 opus Power Without Glory (a roman a clé biography of underworld figure John Wren) paints a highly detailed picture of the social ills related to gambling in inner-city Melbourne a century ago, long before the advent of poker machines, or even electricity in most of that city. Put most simply, you can’t save people from themselves; and to try to do so, passing laws constraining everybody in a futile attempt to save the self-destructive minority, may make the law-passers and their boosters feel good about themselves in the short term, but inevitably corrupts government, police and the court system, while creating a criminal underworld that serves to give people what they want but is forbidden to them by the self-righteous few. Just how many historical examples of this do these people need before they wise up?

That said, and though I disagree with Wilkie on this and many other issues, I can’t fault him from a democratic point of view on this: he is doing exactly what he told the voters of Denison before the election he would do, and exactly what he told Gillard before they sealed their agreement he would do. If only there were more people in parliament who acted thus.

Meanwhile, the Gillard government is having a blue fit. Long accustomed to regarding promises, whether made by themselves or anyone else in politics, as a useful means to the acquisition of power, thence to be discarded and forgotten, they are horrified to discover at least one person who uses the dictionary definition of the word. The Registered Clubs Association is targeting in marginal Labor seats, a multi-million dollar advertising campaign against the proposed legislation, branding it a “license to punt”, and even—and in this country, far worse—a “footy tax”! At least twenty Labor MPs, many in traditional working-class, Labor heartland areas, have reported to Gillard that the issue is hurting them even more than the Carbon Tax, and is the equivalent of electoral suicide. Gillard is unmoved (being herself the member of one of the safest Labor electorates in the country). In any case, the legislation at a Federal level is contingent upon the states following suit (gambling legislation being a state government responsibility), and given a) of all state governments, half are now conservative and polls show the other half facing the same oblivion Labor is staring at federally, and b) gambling, along with alcohol and tobacco, are among the few ways states have of raising taxes independent of the Federal government, Gillard’s task is equivalent to one of herding cats—and very reluctant cats at that.

It gets even murkier. Replacing Gillard in a party-room spill before next May’s budget (and Wilkie’s deadline) won’t save Labor, either. Wilkie insists his deal of Supply and Confidence is with Gillard personally, and not with the Australian Labor Party. He has stated he “cannot imagine” supporting another Prime Minister who came to power in that manner. Unless Gillard’s successor can convince the non-aligned Queensland independent, ultra-conservative outback pol Bob Katter, to replace Wilkie’s vote (and the buzz in our newspapers at the moment is that Kevin Rudd, a fellow Queenslander with a long working relationship with him, might just be able to), a party-room spill will mean an early election, and the end of Labor.

And all this, because of one independent who isn’t even the most popular in his own electorate. Check out the results of the 2010 Federal Election in Denison:

Note that the final figure at the bottom relates to voter turnout, which is why it isn’t 100%. Wilkie is in parliament in the first place, having received less than 14,000 primary votes—four out of five Denison electors voted for someone else, or no-one at all—and is the beneficiary of our preferential voting system, and of the major parties playing games with preference deals. Had they allocated their preferences on the basis of principle, rather than expediency, we would never have come to this situation. Wilkie, meantime, has seen his electorate become the recipient of extorted Federal government spending far in excess of its demographic justification. And the Liberals, to their shame, are reportedly offering Wilkie their own preferences at the next Federal election in exchange for him switching sides now, guaranteeing this unpopular out-of-towner will remain Hobart’s representative in the Federal parliament for the next three years.


Thanks everyone for holding the fort while I’ve been away. I’ve had some technical issues with WordPress (for the techos, the flash and browser file upload plugins are ISP sensitive) and I couldn’t load any photos. All fixed now, and I’ll update the road trip in the next few days.

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16 Responses to Double Or Nothing

  1. Amanda says:

    Thanks Ozboy. I’ve read up to the ‘blue fit’ bit and shall come back to grapple with ‘Part Two’ of your article later (the part that deals specifically with Gillard’s government). I have a question for you about libertarianism and the question of ‘saving people from themselves’, but I’ll raise that later, too.

    Hope you’re enjoying your trip! That merino sheep statue sure looks odd shoved in by that shop the way it is. Wonder how that came about?

  2. Kitler says:

    Coming from a country where one armed bandits were in every pub it seems to me a none issue as you had a bookies down the road and every big town had a casino. Heck my mother was taught at an early age to read the form on horses and she can always pick one of the top three horses in the Grand National. So even though people gambled in my family it was never a problem. I’m sure there are plenty of gambling addicts but I have never knowingly met any. Every weekend everyone always did the footy pools, myself I play the lottery here when the pot goes up a lot hey I know it’s a one in 140 million chance but you never know and the money goes for college scholarships anyhow so guilt free on my part.
    However Mr Wilkie seems like a complete tit for trying his hand at a form of prohibition and that always works well but on the plus side he will bring down Jooliar.

  3. Tucci says:

    “MHR” = “Member of the House of Representatives,” right? Over here, we’ve always called such a critter “Representative” (or less correctly “Congressman,” because a member of the upper chamber also qualifies for the latter title).

    Given one key connotation attached to the word “member,” I’ve gotta admit that Mr. Wilkie seems to qualify.

    More than a bit of a dick, isn’t he?

    Right on both counts – Oz

  4. Ozboy says:

    BTW I’ve updated the road trip to bring the story as far north as Queensland.

  5. Gambling is truly a sin, and this man will save you from it……. Bet you a dollar.

  6. izen says:

    He sounds like the typical Puritan hypocrite.
    Prohibiting fun for the many on the justification of harm to the few.

    Ozboy touched on the real problem with gambling, it is an attractive business for (more or less!) organised crime. All that unaudited cash facilitates money laudering from other criminal sources…. I know in the UK there was a tendency at one time for the people running the one-arm bandits or slot machines to collect from the machine in a pub or club, and then collect from the publican for the benefit of not having the place trashed or ‘got on fire’!

    I can see how a libertarian ideology accepts the mix of good and harm from individual choices that emerge from gambling. I’m not sure what response it makes to its exploitation by organisations with dubious motivations.

    G’day Izen,

    I’m not aware of anyone operating a commercial gambling operation – legal or otherwise – motivated by anything other than profit. It’s like saying a commercial distiller is exploiting alcoholics. Well, I guess to the extent that he sells his product to them, he is. That doesn’t justify universal prohibition. Criminalisation simply distorts the market, artificially inflating both profits and risk (hence the involvement of gangsters), and corrupting government, as I’ve detailed above – Oz

  7. izen says:

    I do appreciate that the knife-edge coalition majority of the Government in Australia raises the political stakes and makes every shift in fortune loaded with potential significance… but it is political froth.

    Meanwhile in the UK we have business as usual from the crony-capitalism party.
    The defense minister, Liam Fox, has a good friend, what Australians would no doubt call a ‘Mate’, who has no government position or connection but keeps turning up on the overseas official visits of the Minister. And visits him in his government office every few weeks. This ‘ mate’ uses a business card declaring he is the Ministers’ advisor. He arranged a meeting – unofficial and unmonitored by government officials between the Defense minister, the CEO of a defense industry hedge fund and an Arab arms dealer after a ‘fortuitous’ meeting in a Dubai restaurant.
    Except it now turns out that around 10k changed hands between the CEO of the hedge fund and a lobby group in contact with this ‘mate’ of Fox.

    Of course the Minister has apologised for breaking the rules and assured us all that nothing improper took place during the sort of meeting banned because it risks appearing corrupt. And he has Dave’s full support.
    So thats all right then.

    Amen – Oz

  8. Ozboy says:

    Day 8 on the Road Trip’s now up.

  9. Ozboy says:

    …and the potential number of triggers cocked against the Gillard government has just gone up by one.

    According to this report in this today’s Sydney Morning Herald, Graham Perrett, Labor MHR of Moreton, Queensland’s most marginal electorate, says he will resign his seat if Gillard is toppled in a party-room spill; thus precipitating a by-election and the end of the Gillard government anyway.

    Andrew Bolt wonders aloud, is Perrett acting from noble motives? Because if he is, he might like to stick around and display some more of the same high principle for a change.

  10. Kitler says:

    Breaking news….
    However for the full story go to WUWT…

    Yep, it passed the Lower House today – a mere formality; it’s scheduled to be read by the Senate (where Labor and the Greens hold the numbers) in November and be gazetted into law before Christmas. The first taxes are set to be levied from 1 July next year.

    All of which is irrelevant. Tony Abbott today re-asserted his unqualified promise to repeal the legislation, as a matter of first priority, as soon as the Coalition forms government – whenever that may be. And that is my response to Izen above – why I’m persisting at LibertyGibbert in covering the otherwise meaningless soap opera, the “political froth”, that has become the Gillard government – Oz

  11. Kitler says:

    Ozboy but will they nobble Tony Abbot and the earliest opportunity drags on these things end up being decades to repeal and can he with an upper chamber held by the enemy?

    I’m glad you asked. Next post will be another lesson in Australian civics – Oz

  12. benfrommo says:


    I was looking at some of the news and noticed something from Jo Nova. She mentions changes in the land laws of Australia and how this might be worse then any other part of the bill (yes the carbon bill or whatever it is you want to call it.)

    I couldn’t find anything on it (perhaps this is due to location and searching through google.)

    So in other words, do you have any information on this aspect of it?

    Just kind of curious, and I can not believe Australia is attempting to commit economic suicide(although it might not last) it still shows some people obviously care nothing for your country and its economic progress.

    Did people mention to these idiots who come up with these schemes where money actually goes through these taxes?

    It funds the super rich people in the country at the expense of the middle class. The most hard hit people are the lower middle class and the poor in the end because a loss of jobs in the real world (coal jobs especially) will force them into unemployment. It is like Labor completely lost the plot in Australia. I would say more, but I couldn’t find information about the land (property rights) being changed which seems more insidious to me. Changing property rights is rather funny with a climate change bill, and yet the same thing was proposed here in the States awhile back through the failed cap and trade.

    Of course, the land (property) rights was later shoved through as an executive but alas, we all lose rights through idiot politicians huh?

    Funny you raise the issue of carbon emissions and property rights Ben; it’s the one which, when a similar test case occurred early last year (related to the more specific issue of land use rights), prompted me to comment on JD’s blog for the first time.

    Yes, as Jo Nova points out here, it’s part of Julia’s (read the Greens’) strategy to make the Carbon Tax legislation unrepealable. Mark Dreyfus, the QC quoted I think has overlooked the fact that the “value” attaching to carbon trading permits can be legislatively deemed to expire; in that case, the Commonwealth (represented by a future Abbott government) is not “acquiring” or “seizing” a chattel, merely assessing its true value. Just look at the Chicago Climate Exchange, which collapsed when carbon prices sank to 5 cents per ton – Oz

  13. Kitler says:

    Ozboy actually looking forward to the lecture on civics as I only have a vague idea of your system and the election cycle for the upper chamber. I already have figured out AVP is the worst voting system ever devised by crooked politicians.

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