Should Australia have four-year terms?

Well, Monday came and went and we’re only slightly closer to getting an election date, after Cyclone Alfred threw “the government’s plans into disarray”.

By not asking the Governor General to dissolve Parliament yesterday, Albo has locked in a Budget (25 March) and effectively ruled out an April election, given the minimum 33 days of campaigning required plus a couple of long weekends (Easter/ANZAC Day) that scuttle the rest of the month.

Odds are that this government will now serve a full term—so a 17 May election, the last possible date. When asked for the nth time about whether the voters care about when the election will be held, Albo said:

“[Of] course they don’t [care]… I’m focused on helping Australians, not focused on votes, and you know that I did get a bit frustrated with people continuing to [ask],” Albanese said. “I think governments should serve their full term. We’re governing, and we’re governing in a way that’s completely put politics aside. We’re just about helping people because that’s what people expect and that’s what they deserve.”

Look, that’s fair enough. The only untruth is the claim that he isn’t “focused on votes”, given that the primary job of a politician is to win re-election, not to govern. That politicians “operate within the constraints of a competitive electoral market” and respond to incentives in the same way as you or I do is a cornerstone of the theory of public choice, as much as they like to claim otherwise:

“More than anything else, politicians need to win elections. Granted, if we surveyed them most probably would not volunteer that they consciously try to maximise their chance of reelection. But what they tell us they do is beside the point. For whatever they say they do, those that don’t work to maximise their odds of reelection will less likely stay in office. As two scholars recently put it, ’legislators who indulge their preferences at the expense of their constituents’ preferences put themselves at a competitive electoral disadvantage.’ According to an enormous array of empirical studies, legislators who change the way they vote and ignore their constituents’ preferences regularly lose their jobs.”

I find this all very interesting, so I thought I’d get into a bit more about why there’s a need to speculate week in, week out, as the election deadline approaches: Australia’s flexible three-year federal terms.

Australia’s three-year terms

Albo’s solution to being bombarded about the election date for more than a year now has been to express his support for four-year terms, arguing that:

“I think that our terms are too short with just three years. Our view, our long-term policy, and we’ve put it to the Australian people, is for four-year terms, but I don’t anticipate that happening any time soon and I think that’s unfortunate.”

Albo has support not just from opposition leader Peter Dutton, but also business leaders like CBA’s Matt Comyn, who recently called the three-year election cycle “defeatist”, despite the fact that his own board also answers to its shareholders every three years (does a nation need less of a voice than a bank?).

But this isn’t the first time the potential for four-year terms has been raised. In fact, Australia has had three-year maximum federal term limits since federation, with the two options tabled at the time being the current model and a four-year variation. The latter was defeated because of the Senate:

“This decision was arguably influenced by a desire to harmonise the House terms with the already settled six-year term of the Senate, rather than by any serious objection to four-year terms in principle.”

To move from three- to four-years, if so desired, would require changing how the Senate works. At present, Senators get fixed six-year terms from 1 July to 30 June six years later, and half of them are up for re-election every time a general election is called (they still serve full terms).

If the Senate wasn’t changed – and I’ll add that a referendum to amend the Constitution is needed to do it – we could end up with a costly, confusing situation of separate elections for the House and Senate. It just wouldn’t pass muster.

That means Senate terms would have to shift from the current six years to either four or eight. Both come with their own set of trade-offs:

• Four-year term s would amount to a double dissolution every election. It would also remove the uniquely Australian feature of only half the senate being elected each cycle, which can act as a check on one-party or dictatorial ambitions in the event of an overwhelmingly lopsided election.
• Eight-year terms might come across as self-serving for a group of politicians that already enjoy relatively long terms. Moreover, voters might cringe at the possibility of giving future rogue senators in the vein of Lidia Thorpe and Fatima Payman, who secured very few votes and were only elected because they were originally on the ticket of another party, an extra two years.

Either option is likely to ruffle more than a few feathers, and when the Hawke government put the first option to a referendum in 1988, it was resoundingly defeated in every state and territory.

Finally, switching from three- to four-years would actually do nothing to stop the election speculation that so frustrates Albo. The only way to resolve that would be to switch from maximum terms to fixed terms, a legislative option that was recently suggested by Senator Pocock. But doing so could jeopardise another feature of Australian politics—namely, the ability of the Governor General to dissolve the House and trigger an early election.

As usual, it’s all about trade-offs!

Is three years long enough?

Term duration in a democratic government involves a trade-off between political accountability and long-term planning and governance continuity. It’s how the principal (electorate) keep their agents (politicians) in check.

Regular elections are important because the allow for the peaceful transfer of political power, and are also the main mechanism through which voters can hold politicians accountable. However, it’s also hard to deterministically say whether four years is better than three, five, or some other number; remember that for every Barrack Obama, there’s a Donald Trump. More “long-term policy” isn’t necessarily a good thing and there’s a good reason why, throughout its history, the UK has flipped between Parliamentary terms of 20, 7, 5, and 3 years!

The general argument made by politicians for longer terms is something broadly resembling the following quote from former House Speaker Tony Smith:

“It is time our federal system moved in the same direction and that we updated our democracy. The obvious benefits would be three-fold.

Four years would provide more time for governing and policy-making over elections and electioneering. Government would gain a greater capacity to implement policies with a focus on the longer-term issues facing the nation over the shorter-term electoral considerations. It also would provide the business community with greater certainty between elections for investment decisions.

And, finally, it would achieve wide support from the public who have grown accustomed to state four-year terms and would welcome the saving of public funds that would flow from less frequent elections.”

Every time a politician seeks re-election, there are frictions and dead-weight losses to society—running the campaign, seeking donations, the time spent researching candidates, queuing at the ballot box, and counting the votes. If that was all costless, then the optimal time (t) between elections would be t= zero: i.e., a continuous review process by the electorate.

Obviously, that’s not the case in the real world, and so trade-offs need to be considered: are the benefits of an extra year—as outlined by Smith—greater than the costs of an extra year, not just in terms of the administrative burden, but also reduced accountability?

I’m not so sure. For one, the existence of parties themselves help to mitigate the time inconsistency problem highlighted by Smith. Australia’s political system is dominated by two parties, both of which have longer time horizons than any individuals seeking election because of the “brand-name effect”.

There’s also evidence that suggests longer terms, by reducing political accountability to the electorate, change the behaviour of elected officials—and not for the better:

“The results of an empirical test suggest that elected officials behave in a less representative fashion as the electoral period increases. The results suggest that frequent elections serve to make legislatures more responsive to the respective policy. Long terms, such as in the U.S. Senate, seem to produce cycles in which the representative is able to behave independently when first elected and then become more representative as re-election approaches. This phenomenon argues against movements to increase the term of elected officials.”

Elections are a political market mechanism that force politicians to “compete” for votes. It’s certainly costly from an administrative and social perspective, but the onus should be on those pushing for four-year terms to prove why a reduction in those costs would be greater than any lessening of competition that longer terms would generate.

And as the saying goes, if it ain’t broke…

…don’t fix it

A poll conducted last year found that only 51% of voters wanted the current three-year term changed to a four-year term, with 37% against.

Given the Senate situation and the lack of evidence in favour of four- or even five-year terms—neither of which appear to have produced stellar results in the US or UK in recent years!—I’m inclined to favour sticking with the status quo. Personally, I think that the potential unseen costs from reduced electoral accountability (e.g. rent seeking, policy inertia) are likely to outweigh whatever additional political stability and administrative cost savings an extra year might produce.

There’s value in retaining the opportunity to ’throw the bums out’ every three years, even if Australians have only once turfed a government after a single three-year term.

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