The Nuclear Option

One of the few bright aspects of the current catastrophic climate change meme is that a number of environmentally minded people are looking seriously at the only option that there is to replace fossil fuel use in baseload power generation.

First of all, lets look at what baseload power is, and why it exists. Demand for electrical power varies quite considerably across the days and across the seasons. The amount being generated must be matched to the amount being consumed, or we suffer voltage variation (brown outs, power surges, etc). Now, different forms of generation have different characteristics in terms of flexibility, control, location and cost. Consider the following options:

Hydro is flexible, controllable, and low cost. About its only downside is that it is limited to fixed locations (where large volumes of water drop) and that it is largely captured – there really isn’t that much more to extract. So hydro combines the highest quality power with, in many cases, the lowest costs. Coal is inflexible, controllable, and low cost. The output of a coal fired power station can only be changed slowly, and only by a limited amount. Gas and Oil are flexible, controllable and of medium cost. Wind and solar power are inflexible, uncontrollable and high cost; they are both driven by natural conditions rather than electricity demand.

Coal fired power in Australia provides for what we call the base load – the power demand that is always there. It has made sense here to produce as much power as possible using coal, given that it is readily and locally available, and low cost. But because of its inflexibility, we need alternative sources to cover peak loads – the extra power required when demand rises above the level continuously required. Preferentially, we have would use (and have used) hydroelectric power to cover this need given that it is able to produce variable output at low cost. However, in any place there is only so much hydroelectric capacity available, and we have pretty much tapped all of the available sources nationwide. So we use gas or oil powered turbines to cover the remainder at a medium cost. Solar and wind power, (normally with battery and/or generator backup), have served usefully as remote or isolated power sources where distance and transport costs make other options cost prohibitive.

And all was well in the land until concern regarding a) the potential for oil and gas to rise in price significantly as supplies dwindled and b) the effect of carbon dioxide (and other) emissions arose.

What to do? Well-intentioned but misdirected people pushed ‘renewable energy’ forward as a network generation option. Solar power was installed in homes and fields, wind generators cropped up in windier areas, and strangely, the amount of gas and oil consumed went up. It turns out that because we have no control over when wind and solar energy provide power, they end up reducing the amount of power that can be considered baseload. Think about it. If a network is providing its baseload level and starts receiving power from a wind turbine, there is no where that power can go but into higher voltage. So a buffer needs to be left, even at minimum demand, so that these uncontrolled inputs can be allowed for. That buffer must then filled by hydro, oil or gas fired supply during the times the renewables are not available.  Every wind or solar installation needs to be backed up by flexible generation capacity of equal output.

What we actually need to bring down power costs while dealing with the concerns regarding emissions is an affordable, alternative, baseload supply that is not CO2 based.  The only option available to us now is nuclear energy. In Tasmania, we need to invest in more generation capacity this decade, and the only other potential option, geothermal, will not be ready within that period.

Nuclear is not as cheap as coal, but it is more than competitive with natural gas or oil. It produces no CO2, nor other airborne pollutants. They emit less radiation than a coal fired power station. It produces no waste that can’t now be consumed in the production of more power. It produces valuable medical materials that we have no other way of producing.

It is also, by a significant margin, the safest form of electrical generation ever developed. Consider the recent events in Japan. Not only did one of the oldest sets of nuclear reactors in the world survive a 9.0 earthquake and a 14m tidal wave intact, it also managed to shut down after all of it’s backup power failed. In doing so, no one was hurt to any degree greater than a bad sunburn. Some gases were released, but nothing that affected more than the immediate area, and nothing there that will persist long term. In what could be described as a very real worst case scenario, these old reactors came through with flying colours. Consider too that in the same events, more than 10,000 people died from a tidal wave; some 1800 died from the collapse of a hydroelectric dam; dozens died in a fire at the local refinery. And that was 1960′s technology.

Today, compact reactors are available that can be manufactured, transported and emplaced in a prepared site. In Tasmania we have some superb locations for nuclear facilities; existing hydroelectric stations are generally well sited and already provide much of the infrastructure that would be required.  For instance, Strathgordon would provide a superb location for a nuclear facility.  It is remote, has plentiful cold water, existing electrical and supporting infrastructure.

Co-locating nuclear with our existing hydro power would also make that infrastructure more valuable.  Rather than having to use our high value hydroelectric power, it can be used to provide the more valuable peak load supply here and interstate.  It also takes pressures off our dam levels for those periods where there is lower than normal rainfall.

The installation of between 400 and 700MW of nuclear power would set Tasmania up moving forward into the next century, as building the hydro schemes did 50 years ago. It is time to reconsider any outdated opposition to nuclear power, seeing in it the opportunity to return our state to a CO2 free condition and make the most of the hydroelectric power we already posses.  Let’s take the nuclear option.

P.S. For further reading:

• About similar moves in South Australia – Decarbonise SA
• About what happened in Japan – Neutron Economy
• About one option for consideration – B&W mpower
• Ongoing commentary on the nuclear industry – Atomic Insights

Dangergeld

You see, tribal life and the human nature that comes with it will not allow any monetary system to “completely” destroy the wealth of a good portion of society. Even if everyone is plainly shown that they are going to lose something, they would still opt for the good of the overall tribe. This is why we return, time and again, to fiat monetary systems. In the few examples where a gold system brings the harsh reality of loses to bear on a nation, war is usually the result. Not a good outcome.

FOA @ FOFOA

Those responsible for their losses must bear them, but not so as they are destroyed.

A child must suffer consequences to learn their limits; yet those consequences must be limited. Similarly, at some point, a society as a whole acts as a parent, to limit the damage suffered by those who don’t know better, those who have no choice in the matter, those who were caught in the wrong place at the wrong time.

Gold is unforgiving. It is unmoved by human need or emotion. It is not able to be created from nothing. All of these combine to reinforce one thing; gold should not be used as a peoples currency. There are times when currency debasement is a necessary wrong, so that the many can bear the cost of that which could not be borne by the few.

As such there is an inherent danger and opportunity in holding gold. It is value which cannot be taken through debasement. It allows you to stand apart from the masses who lose a percentage of what they own every time more currency is injected into the system. In standing apart, you assume your own responsibility regarding how you choose to help those who cannot bear the losses they have suffered. There are times when to be seen not to be ‘chipping in’, will not be tolerated.

When currencies fail, for fail they do; value flows back into gold. If you hold gold, and gold is now worth fifty times as much currency as it had been, where does that leave you? Where does that leave you when those around see the value of their savings drop to a minor fraction of what they were? What responsibility does that place on your shoulders? Is that value yours?

I won’t answer those questions. Different people will answer differently. But consider the other questions, that those without gold would be asking at that point.

What just happened to me? Why did this happen to me? Who did this to me? Who benefited from my loss? Where can I go for help?

In times past, the answers to those questions lead to lynchings, riots and the guillotine. Consider carefully the way forward.

Equity and Fairness at odds

Unbeknownst to many, there is a review into the state taxation system going on down here in Tassie.  While not looking into the level of taxation, they are taking the opportunity to look into the methods of taxation – i.e if we are going to scavenge just under $1B from our economy, what is the best way to do it?

A discussion paper was produced, going through the system as it stands, some of the considerations for thought, as well as some of the thoughts coming out of the Henry Tax Review (recent federal review, generally ignored by the government except for the MRRT fiasco).

Public submissions were called for, and received from a small number of people and a larger number of concerned organisation – the usual suspects if you like.  As a whole, they make for interesting reading.  Well I found them interesting anyway.

The biggest tax we take here is payroll tax.  And here is the irony – no one – not a single submission that I noted, nor the discussion paper itself, thinks that it is a good tax to have.  Basically it is a tax on employing more people.  At some point, someone thought this was a good idea – probably because they could pin it on the ‘evil large corporations’ who can ‘afford to pay’, for very little political cost.

The other major object of derision, was stamp duty.  Again, a good earner, but one which adds to the cost of buying / selling land – most telling when selling in one place to buy for the same value in another – it actually makes up the largest portion of relocation costs.

The gambling tax was considered acceptable – acting as a brake on a vice – although as a tax it costs nearly as much to collect as the revenue it earns.  This suggests that it is not so much a bad tax as a badly arranged tax, and work needs to be done to cut collection/implementation costs.

The big mover in terms of ‘desired’ (i.e. if we must be taxed) taxes has to be land tax. Land tax is a tax on the value of land, and only the land (i.e the base it is charged against does not include the value of the improvements made to it such as housing).  There are a number of positives to land tax as a form of taxation :

• the amount you have to spend to collect it is minimal
• it is a tax on value that is provided by the community, not by the owner.  If you think about it, land values aren’t varied by what is done on the land, just by the services and amenities that it provides or that are provided to it – the desirability of the land.
• taxing land in this fashion tends to drive land towards its most valuable use.
• property will become more affordable.

In its best form, it is a simple rate levied equally across all land equally.  While it can be complicated by using escalating rates based upon value, and certain types of land can be excluded, both of these measures work to reduce the ‘benefits’ of the tax.

So should we just dump payroll tax and stamp duty, replacing them with a broad based, simple land tax?  No; at least not without due consideration.  While this could be done to keep revenue at its current levels for the government, that is only half the story.  It would result in significant changes in the distribution of that impost on the community.  Although it can be argued that a simple land value tax is more equitable, anyone on the wrong side of the changes will view it as unfair.  This is because perceived fairness is based upon not a moral or techinical judgement about what is right or what is best, but upon how it affects the individual, here, now.

So how then can change be carried out to move us toward a more equitable taxation system, in a manner that is accepted as fair?  

Taxation results in a regular series of payments, over time.  Commercially, this has a pretty well understood value – called the present value.  It is the fair price that is paid now to receive that set of payments over time.  We experience it in loans we take out, and returns we get from investments.  

Simply, if the system is to change, the fair manner of doing so is to exchange the present value of the expected series of payments in return for the cessation or commencement of that set of payments.

It is to the benefit of the companies paying payroll tax that those payments are no longer required, as well as to the community at large.  So, in exchange for no longer having to pay payroll tax, a single final payment is made, say 4-5 times the normal payment.  If necessary, the government may even help providing commercial funding for this.

At the same time, if the government is now going to impose a level of land tax across the board, the funding received from the termination of payroll tax is distributed as a one off payment to all landholders in proportion to the change they are about to experience in taxation.

In the end, not everyone would be happy with this.  But the grumbling would be muted. Something was given, something received.

 Final note:  The biggest objections to the introduction of a land tax come from two sources – local councils and the property council.  Local councils don’t want anything that is going to get confused with rates; the property council doesn’t want anything that improves affordability.  Against the wishes of the local government, I’d suggest that land tax and council rates be rolled into a single charge, collected by the councils, and that councils are then levied by the state government.  The property council gets a major win with the abolition of stamp duty – they can suck it up on this one.

All that glitters is not gold

Silver is an interesting material. For centuries, it was used as for money. Today, it is used in an incredible variety of products – in fact there are more patents being registered regarding the use of silver than any other material. It has the highest reflectivity of any metal, the highest conductivity of any metal (both thermally and electrically), and has incredible properties medically.

And yet one use that it has fallen away from in recent years has been that of money. It is no longer used for coinage – in Australia the last silver coin we had was our 1966 50c piece.

So would silver work as an alternative ‘saving’ currency, alongside what we have, today? It’s a good question, especially since there are proposals in different places around the world for just that.

I believe the answer is – for a time.

And the time is limited because the amount of silver we have is limited – maybe 20-30 years of easily mined silver left at current production rates – and we are using it up. Well, it’s not ceasing to exist, but it is being consumed in applications in which it is used in tiny amounts from which it is impractical to recover.

What happens when you have industry and monetary uses competing for the possession of a resource?  Commodity value is limited by the price people are prepared to pay for the benefits it brings, and the price of substitutes.  Monetary value is dependent primarily upon the ratio of stocks to flows.  I.e how long would supplies last if production stopped, or alternatively by what proportion does current production increase the supply available.   The larger the answer to this, the more suitable a material is to use as a store of wealth.  For gold, the answer is about 80 years.  Until the beginning of last century, the answer for silver was similar.  Now, because of increasing consumption of silver, the answer is about 1.5 years.  Silver, through increasing consumption, is becoming demonetised.

What this means is that over time, silver will derive less and less of its value from its significance as a store of wealth.  Rather than being a store of wealth, it is in the process of becoming a speculation on scarcity. 

So proposals such as Hugo’s above will work, until the point where industry demand drops dramatically as supplies, although available, are largely hoarded for monetary purposes.  Industrial demand will collapse as alternatives are found or the prices of silver based goods becomes to high.

Silver is a commodity.  The storage of value that is possible in silver is only possible because it is a depleting resource that will exhaust.  Silver will grow in value, become unavailable, peak in value and then collapse.  This will take place over decades, so there is rationale to storing value in silver for a time.  But remember why that is the case, and that it is only for a season, and that in the end getting out will be as important as getting in.

With gold, only getting in matters.  Remember: Cash for today, silver for tomorrow, gold for a lifetime.

Floods and Firestorms

How should a nation respond to a disaster? In Australia, when floods or firestorms strike, our hearts break and our hands reach out to help however we can. What extra we have; in some cases far more is poured out to help those who have lost everything. And yet this libation merely covers the open hole that is left; an inadequate repair that leaves much to be done over the months and years ahead.

How then on a deeper level do we cover the losses? Insurance goes a way towards this; the practice of the many setting aside wealth over time to provide for the fewer in deep emergency. And yet this too is patchy and inadequate, only dealing with a fraction of the costs.

Is there a role for government, exacting a levy, drawing down further on our excess over time to cover? Or by taking on debt; spreading the cost over a generation? The difficulty in these is that firstly there simply ins’t a lot of excess. Secondly, that they take away from today or tomorrow’s growth, to cover the cost of replacing and repairing items and infrastructure already paid for.

What we need is the capacity to take away from the value of things done in the past, spreading out the cost of repairing the past over a national base.

In other words we should be considering simply printing the money to pay for the rebuild.

‘Printing money’ is not something to be undertaken lightly. It does not conjure worth from thin air – or even from thin paper. It pulls that value from everything done in the past, concentrating it here and now. It is a literal devaluation of every dollar we have built up, every loan we still hold. It makes the past less valuable than the future.

And yet, in this type of situation it may be the best, most appropriate response. It allows a far wider draw of value than taxation, and one that is ‘in kind’ with what has been lost. From our homes to pay for theirs. From our roads to rebuild theirs. From our savings that those who have nothing may not be without.

A discrete expression of from our hearts to theirs.

Competition and Collusion: Opposites Attract

Banks. Oil companies. Grocery stores. All industries that suffer from consistent complaints regarding collusion and price fixing. Interestingly, also dominated by well managed, profitable companies in industries where differentiation is difficult.

And here’s the fascinating insight I came away with today after reading a rather long and mathematically inclined paper by Steven Keen – in any industry dominated by well run companies, the appearance of collusion indicates healthy, profitable competition. Conversely, if an industry dominated by well run companies appears competitive, there are most likely attempts at collusion underway.

Why would this be the case?

It turns out that the profitability of an industry is greatest when companies continuously act to maximize their own profits, without further regard to what their competitors are doing. Yet when this happens, those same companies which are acting with primary regard for their own maximum profit end up moving together, displaying every indication of a collusion.

Petrol prices going up. Bank fees and interest rates. Cost of groceries. We recognize the situations – these are the industries we here frequent calls for ‘Royal Commissions’ or anti-corruption inquiries into. And yet when these do happen, very little is found.

When companies know what other companies are going to do, the tendency is to act at least a bit in your own favor. These little deviances add up, and companies end up chasing each others tails rather than responding to the market signals they should be following.

So.. next time someone suggests that and industry is running too closely together, that something untoward must be going on, consider first whether that industry is dominated by well run companies. If it is well run, their not colluding. If it isn’t – well maybe they are. But you can’t have both.

Some interesting reads

My journey of discovery over the last few months has been fascinating for me. Many of those who know me realise that I know at least a bit about most subjects (with the major exceptions of music and movies, about which I remain shockingly clueless). Economics was another of those areas until about this time last year. Filling in the blanks has been a captivating process; economics is a diverse subject filled with disagreement, ignorance and insight.

For anyone who wants to do their own exploration, here are a few sites that I found provided insight into where we have come from, and where we are going. Like me, they are largely an eclectic bunch.

Antal Fekete has written an incredible amount on the subject of economics, and the development of our economic system from primitive bartering on through. Go to the articles on ‘Money and Credit’ and read through from the bottom up.

Steven Keen is an associate professor in Sydney looking into economics from the perspective of stocks(pools of resources) and flows(exchange of resources). Some significant insights that are still developing – research underway. Good for developing the general picture, not yet applicable to specific situations, important to understand nonetheless.

Bron Suchecki writes GoldChat, and now the Perth Mint’s official blog on their new online bullion sales site. Worth reading for an insiders perspective and understanding on how that industry works. One of the things you find is that there is a lot of comment out there about gold that has no basis in reality – this is a place to ground yourself.

Friend of Friend of Another (yes there is a story, and yes it is worth following) gives a top level perspective on the events happening today, and where things are heading. Deep insights into world monetary events, the difficulty the world now finds itself in, and how that will play out over the next few years.

Enjoy.

A view from the edge: Schools as a professional practice

Teaching is nominally a profession, and I don’t disagree with it being called that. However, looking in from the outside as a professional engineer, I see a four major of areas of lack where teaching moves away from best professional practice, and not to its benefit.

1. Lack of senior professional responsibility
2. Lack of research and development
3. Lack of analytics
4. Lack of focus on potential stars

Senior professional responsibility is the key backbone of most professions. Principal Engineers oversee Senior Engineers oversee Junior Engineers. This way, all work that is produced by the organisation is produced at the level of the Principal Engineer. The responsibility for any product lies with the Principal Engineer, even if large portions of the work is done by others. Management is a separate issue that is sometimes combined, but most often a function performed by others.

In schools, this seems not to take place. Teachers become more experienced, but their ‘span of responsibility’ does not increase. They may move into management if they are so inclined, but that is really the only stream open to them. There are some significant consequences to this. Inexperienced teachers have primary responsibility for their class, without the scope of support and oversight common to other professions. The value of experienced teachers is limited as their experience is unable to span classes to affect a greater level of outcome, and thus their income is unable to progress beyond a certain point. Overall, the outcome for any one student is an progressive averaging of the skill level of the teaching staff, not the reflection of the most capable teachers that it should be.

Research and development is a key driver in the success of the best professional practices. Teaching however, leaves structured R&D to universities to carry out, depending on professional development and informal observation of efficacy to slowly derive advances. This prevents schools from developing specific advantages, and restricts them to the application of general advances that may or may not be appropriate to the particular school. University research also tends to more esoteric and less immediately practical than practice driven R&D.
An area where significant advances can be made is in the automation or simplification of repetitive professional and administrative tasks. These tasks tend to be simple, menial and time consuming, and it is worth he effort required to develop ways of either simplifying or eliminating the need for them to be done. It gives more time for teachers to spend on things they believe are important, and makes their jobs more satisfying.

Analytics are the performance data that allow a practice to measure the effectiveness of its professional operations. You would think that with the testing that goes on there would be a surfeit of this to work with, but it seems simply not to be effectively collected and analyzed beyond the classroom. In some ways I wonder if there is simply a reluctance to really measure and understand the performance of both teachers and students. The idea that this is not measurable put out by teacher’s unions and the like is preposterous – it just takes consistent and directed data collection.

The benefits of consistent collection and analysis of performance data are considerable. It allows a clear view of how effective various efforts and changes are. Has the new literacy program been effective enough to justify the effort it takes? Has it been successfully implemented across all classes, or have some classes underperformed? Has it affected specific students more than others, and if so, why? Does the new teacher who started in grade four this year show promise? Are there areas where they need specific support to improve outcomes? How much difference did it make air-conditioning that classroom? These sort of questions can be answered, and need to be able to be answered if resources are to be allocated optimally.

Focusing on potential stars is critical for a number of reasons, and applies to staff as well as to students. Truly gifted teachers must be identified, developed and given responsibility. The same applies to students.

In the case of staff, exceptional teachers push the boundaries, set new standards and achieve more with their students than expected. Learning from and integrating the way these teachers work allows the school to develop higher standards across the board.

In the case of students, exceptional students are the ones who, properly developed, are able to set new standards in whichever field they end up in. But they must be identified, their particular capabilities stretched and encouraged, and their weaknesses addressed. Society has far more to gain from the promotion of these students than it does to lose from failing to shore up the inadequacies of those who are not academically inclined. Yet buckets of money are poured into those students with ‘special needs’ and those who are most capable of contributing to society in an exceptional way are ignored. I’m not suggesting that efforts should not be made to provide additional help for those with ‘special needs’, merely that it should be a secondary consideration in the larger scheme of things.

None of these issues are particularly difficult to address, except that they require a different way of thinking, and in some cases, the allocation of admittedly sparse resources. The potential for improved outcomes and more effective resource allocation significantly exceeds the required inputs, but they do require commitment and an initial investment to be made.
As noted, this is the view of an outsider looking in. Some of this may well be wrong, other parts may not apply in specific cases. It provides some food for thought and provides some areas to look at for changes in approach.

Motivation in the face of change

There are four basic drivers of human behavior; greed, fear, love and hope. These are the active responses to threats and opportunities.

How we plan for and respond to situations we are facing flows out of this.

For instance, given the current levels of debt being faced worldwide, it is not difficult to look ahead and see that there will be great turmoil as people, companies and nations realize and start to act on the basis that these debts will not, indeed cannot, be paid back. The financial system as we know it will collapse. There is no if in this, only when and how.

It is a situation that faces each of us, some time in the next 3-5 years.  It could be sooner than that, and there is a small chance the current system could limp on longer than that. Myself, I’m expecting we make at least one more year, hoping for three, and would be rather surprised if we made five.  We have choices in how we respond, and those choices have roots in one or more of the basic motivations.

Disbelief is perhaps the easiest response to fall into, as it is easy dismiss the situation as impossible or unlikely to occur.  This sort of situation hasn’t occured within our lifetimes, not unless you are over 80.  Why would it happen now?

Once the unavoidability of the situation is accepted, it is easy to react in fear, to see this situation as a threat. Fear leads to actions design to isolate yourself from the consequences of such a collapse. Greed drives people to ready themselves so they can pick over the remains, for their own personal gain, regardless of the cost to others. Hope, based on the certainty that things will improve in the future, leads to actions intended to bring that day closer. Love leads to actions that improve others situations, even if that is at cost to yourself.  I encourage you to act out of a basis of hope now, so that you can act in love later.

So acting in hope, what can you do? Two main issues that will be faced are:

- money will be worth significantly less, and in some places, worthless;
- international trade will largely cease until the first issue is resolved.

The following presents my thoughts on how to proceed, in light of the above.

Realise your wealth. This has two potential meanings, and both of them apply. First of all, take time to assess and acknowledge the wealth you have. Seriously sit down and figure out what you own, what it is worth, and take away what you owe. And, remember that this is not for insurance; don’t estimate replacement cost, estimate what you could sale value. Secondly, take steps to make the wealth you have more real. Cash is more real than a number in a bank account. Gold is more real than cash. The value of real estate is only nominal until you sell it or obtain an income from it; consider what impact you would face if the nominal value dropped 40% (which is a recent estimate of the degree of overpricing in the Australian real estate market).

Take advantage of your current opportunities. Work hard. Do something additional of value. Take short term risks. Sell stuff you don’t need, that someone else wants. In short, act to build your capital, the wealth available to you when it’s needed.

Position yourself for a local, more need oriented world. Spend wisely. Buy equipment that will last. Buy stuff you need that is not made locally. Consider how valuable your current skills will be if people move towards necessities rather than luxuries, and how you can extend these or develop more need focussed skills. Consider what opportunities may arise in that situation that someone prepared could take advantage of, filling needs that otherwise would go unmet.

The best part of this is that it doens’t require the world to fall apart for these actions to be beneficial.

Above all, maintain the hope that you have.  Work together with like minded people. Accepting that at some point, things will get worse; knowing that at a latter point, they will get better again.   The more people who are ready, the more people who have resources to act positively when the time comes, the sooner something new will emerge.

The basis of representation

Given the three-headed dog that is Australian politics these days, it doesn’t seem to matter much whether people choose the restrained, the ravenous or the rabid head to be ‘top dog’ for the next period. I’ve not seen a greater degree of antipathy or confusion about the choices available in an election than in the one we currently have on. This prompts me to wonder about the basis of government; what are we missing, what we need, why we need it.

There is not a huge difference between the two major parties in Australia, and I expect that should the Greens wish to grow further, that their differentiations will also reduce. There is a simple reason for this; when you are trying to split a population by ‘closest representation’, two parties will naturally approach the centre.

Think about it like this. If two people are trying to guess an unknown number, the best choices are obvious. The first person will choose the middle number, and the second will choose a number immediately above or below the first.

This allows them to be the closest option for half the population. The major parties do the same thing. If they drift away from the optimum, the other party will naturally drift towards them, picking up more than half the vote. So the game of politics becomes one of trying to get the opposition to move toward their side, so that you can steal their voters.

The problem with this is that the best positioning for winning government does not provide the best representation for the most people. That would require greater separation between the two parties, but to achieve that both parties have to open themselves up to the near certainty of their opposition moving in to the centre and seeing that vote stolen. Case in point: Work Choices. Work choices represented the attitudes of Liberal voters very well, but allowed Labor to retake ‘Howard’s Battlers’, winning them the election.

So the question arises – how can we achieve better representation, in a reasonable period of time, starting from where we are?

Smaller parties struggle in Australia, due to our representational system. They need a real base of power and a lot of time to grow. So any new parties, or growth in extant minor parties will take a long time.

The other option for a new party is a split in a major party. The Democratic Labor Party and the Australian Democrats are both examples of this. However these tend to be short term, doing well for a period before becoming irrelevant or losing their way.

I believe the only way for improved representation to occur in the short term is to see one or both the major parties break into three or four organised, aligned, factions. I’m not suggesting that this would be at all easy, or without risk for the party involved. But it would allow better representation, and present a massive advantage over the opposition.

So, taking the Liberal Party as an example, let’s say they create 3 offshoot parties. One is a small government, low tax, socially conservative party, sort of everything the Liberal party wishes it could be, but can’t because it needs to win elections. Another is a small ‘l’ liberal party, given over to economic and social freedoms. Another might be a more socially conservative, big government party. Each would be able to represent a group far more effectively and closely, sorting out the details in government.

Same thing could of course be done on the Labour side, with the advantage that it would remove the stigma of ‘factions’ and allow them to put the greens back in their box.

So, something in it for everyone.