Ask Us Anything: Is Australia’s ageing population breaking democracy? + What does the Victorian Liberal Party turmoil say about its future?

0:00I'm Adam Schwab. I'm Adir Shifflin. And this is The Contrarians with Adam and Adir.

0:08And we're back. Episode 218, Ask Us Anything. We love getting your questions. Please send them in. I'll be via LinkedIn. How else, Mike, can people get us the questions? You can go to LinkedIn. You can leave a comment on the Spotify comments or basically get in touch with us, any of us individually as well. Shoot us an email, comment on the newsletter. Like there is no shortage of ways you can drop a comment or leave a question. I'll start off with question one for this week's episode, which is from Terence Tam. Terence asks, as older voters become a larger share of the electorate and hold a larger share of the nation's wealth, political parties have strong incentives to protect their interests.

0:49Is Australia's aging population creating a scenario of democratic failure? Excellent question, Terrence. Always feels like we've got the reverse finally. And I've seen the federal budget was an attempt anyway to fix this intergenerational inequity. We all think they did a horrendously bad job, but it feels like boomers and to an extent Gen X, but really boomers and almost solid generation have effectively controlled government policy, not intentionally or subversively, just by way of, I guess, sheer number of votes for the past 50 years. But it feels like it's changing very rapidly now with the growth of millennials and Gen Z.

1:29Adi, what's your views on this? Well, I totally agree with you. Basically, millennials and Gen Z are the ascendant numbers of society. And if you speak to boomers, I think they would realise that their power is waning rapidly and there is no doubt that what Labor is tapping into and what the Greens have tried to tap into, although they've shot themselves in the foot because of just too radical policy that they've had, what they're trying to tap into is the rise of the younger generation. Probably the strangest thing to have happened in that environment for the last five years is the budget that we just saw from the Labor government, which effectively is super attractive to a diminishing numerical proportion of the population, so older wealthy people.

2:18And I think it only kind of worked because they persuaded younger people it was also appealing for them. But the trend we're going to see is people over the age of 50 or 60, my guess is, are going to be dealt increasingly worse outcomes by government policy as governments and oppositions chase the younger vote. That's my guess. Yeah, we're seeing a transition where they're certainly talking about trying to chase the younger vote. We haven't seen anything yet in reality. Other than housing prices being smashed, but that doesn't really impact older people that much, to be fair. It's probably worse for millennials, Gen X, who recently, the people who really get smashed by the housing drop-off is the people who recently bought a house, or be it an investment property or primary residence.

3:07If you just bought a primary residence three months ago, especially if you're one of those 5%, you know, that home deposit scheme that we talked about, I've talked about a couple of times. If you were sucked into this home deposit scheme 5 % thing, you've almost certainly got significant negative equity in Melbourne or Sydney. So this is the greatest sucker punch of all time. The government's conned you into this ridiculous 5 % loan scheme, and now you're underwater. So that was a disaster. It feels like they're slowly making headway to being more, I guess, in favour of younger people. But in reality, we've seen nothing of a sort thus far.

3:37Gen X has got the worst deal right now. Gen X is the predominant powerhouse of the economy, delivering most of the productivity gains just because it's the moment of Gen X being at an age where they're driving companies, et cetera, in the economy. But numerically, they're not as material as millennials and Gen Z. so I think that they're kind of caught in the middle and my one of the biggest transitions to support for Pauline Hanson has come from this Gen X group people tend to think it's older it's boomers but actually a lot of it has been Gen X's that feel like the Labor Party has got no interest in them despite their contribution to the economy and they're swinging towards they're swinging towards Pauline Hanson.

4:27The other problem with we talk about, we talk about generations a lot. And the problem with defining into sort of Gen X millennial is if you look at millennial, there's really millennials almost split into two. So you've got younger millennials who don't have kids, so we call it early 30s, and then older millennials, which I arguably claim that I fit in the top part of, who are kind of caught 38 to 45, 46 in that range. And they're very different. So we talk about these sort of four or five broad solar generation into baby boomers, into Gen X, into millennials, into Gen Z, into alpha. That's really a gross generalization, which probably isn't right, especially when you consider this kind of policy new.

5:02So someone who owns a house, they call it an older millennial who owns a house, is very different to a younger millennial who's still renting. So I think we can also be too quick to pigeonhole people into these sort of generations when we've got to look at the personal circumstance a lot more. So people who have really been smashed recently by the federal government is not older voters who have assets. And there are some older voters who don't have assets as well. But older voters with existing assets are fine. Really young voters who don't own a house, probably fine. People who recently bought a house, really bad.

5:33People who bought into a business with a low cost base, really bad. So I think we need to be a bit more nuanced in how we look at the generations. I totally agree. In fact, let's say this. We can think about this in slightly more detail. Who is the really attractive part of the constituency based on what we're seeing politically? Like what do political parties think is attractive? And as I said, like the most bizarre thing is that they didn't get rid of grandfathered negative gearing and they didn't make any superannuation changes. And so that gives this impression that older, wealthier people might be some kind of voting block that Labor is scared of, either numerically or for some other reason.

6:16Primary residents as well is the other one, which obviously is politically really difficult, but the other one that's completely untouched. Yes. Well, I think primary residents, yeah, well, I think primary residents might be seen as a sacred cow and they've got too many other things they're blowing up. They don't want to go and have that fight. But, you know, I've thought long and hard about But why have they been so kind to older, wealthier people in this budget? It makes no sense. And the view that I've come to is, one, some of it is just probably plain stupidity, is probably some of the explanation, not understanding what they were doing.

6:51But the other part of it, I think, is probably this. There are lots of people. It looks like it's beneficial to older Gen X and boomers, but really, that is not the motivation. The motivation is that there are an awful lot of younger people, I'm talking about people anything between the age of 20 and 40, that are in some way having their livelihoods subsidized by their parents or grandparents. And a lot of that subsidization can happen because of the attractive treatment of certain asset classes, like superannuation, and I suspect in particular, like negative gearing. and had the negative gearing not been grandfathered, then there is a possibility that not only would older people that own the properties have been very unhappy, but the kids or grandkids they were subsidising would have been equally unhappy because the subsidy would have come to an end and that would have been a scary voting block to upset.

7:58And so my best guess is the reason for as much as this was a deliberate political decision, the politics behind it is actually one of the few occasions where the government's been good at understanding secondary consequences of their actions. If we go and blow up negative gearing, we are going to get a backlash on the large block of voters that rely on parents and grandparents. That's what I think's happening. Yeah, and I think just to round back to the original question, subverting democracy, I think we also want to fall ourselves to thinking thinking one vote has one value here. Leading aside the unrepresentative swirl of the Senate, which we know is nowhere near one vote, one value, even if you're in the House of Reps, if you're in a marginal seat, you've got a super valuable vote.

8:40If you're in a safe seat, you've virtually got an irrelevant vote. So I think there's that, but there's the fact that our democracy, given the way we have seats rather than sort of a, if you look at US estates or I think UK is everyone in a first-past-the-post, it's because we don't have everyone voting together a lot of people's votes don't count anyway if you're in a seat with 20 margin well your votes are relevant so well that's good let's talk about that for one second before we move on to the next question so democracy what does that mean it just means people choose the leader and in western countries all citizens get a vote irrespective of whether or not they own property which is a new kind of concept we don't you don't choose all that you don't choose the leader you choose the party i vote for a party you vote for Party.

9:25The party elects the leader in Australia. In the US, it's different, obviously. You're right. But indirectly, what democracy means is the way a leader has a mandate for their authority is based on the will of the people. That's what democracy means. Because there's lots of other techniques that have been used historically, like the leader that kills everybody else. That was popular for a long time. And so we don't like that as much. And so we go for this idea of democracy. But we need to also be candid that, as you said, different places have very different ideas of democracy. In Switzerland, they vote as cantons and they effectively are also voting on every single piece of legislation as a direct democracy where you as a citizen vote on every piece of legislation, I think, that gets passed.

10:10Very different to in the US, you directly elect the president, kind of, through a, what's it called, electoral college, which, you know, largely doesn't play a role much anymore. Yeah, the college elects the president, you elect the college, exactly. Yeah, but that used to be a thing, but now it's largely just a pass-through mechanism. In Australia and the UK, you vote for seats, is that right? In the UK as well, you're voting for local members, and they elect the leader, and that leader becomes the prime minister. And so there are many question marks over, like what, we talk a lot about democracy, but the bottom line is this.

10:47It's basically a two-party system. That is how it works. So if I want to go and be the prime minister, the chances of me being able to do that without joining one of the two major parties is nil effectively. So in fact, there is an official position. You're talking about Labour and One Nation, presumably, because they're the two major parties. No, One Nation's unproven. They haven't gone to an election, a federal election yet, right? Yeah, no, 100%. But it's really, we're looking like a three-party country at the moment anyway. Certainly, but the polls are accurate. But if you and I said, let's run for election and try to become the prime minister and the treasurer, I'll happily give you the prime minister job, by the way, that's fine.

11:24Then we couldn't just do that ourselves. Like that is, you can't really do it in our democracy. The other thing is that there are parties that get lots of votes and they don't get any seats because their votes are spread across different seats. and they never have enough in any one place to win, but maybe they get 10 % of the vote across the country, but they only win like a tiny, tiny one or two seats or none. And so the reason I digress with that is this idea of subverting democracy. Ultimately, the most effective way of subverting democracy is by numbers. And we can be blunt and say, if you let in a very large immigrant group and that group votes homogeneously, which is a question mark in itself, but that group votes homogeneously and they're clustered very tightly in particular areas, then they will have a disproportionate amount of influence over democracy across time.

12:18But in general, I'm hesitant to use the term subverting democracy because it's not like it's this beautiful, pure thing to begin with. Yeah. We'll move on to question number two. Question two this week from Laurie. With the Victorian Liberal Party again in turmoil after Moyra Deeming accused Matthew Guy of assault at a party event, what does this say about the internal culture and dysfunction of the party is this just an isolated dispute or is it evidence that the liberals still haven't worked out how to govern themselves so the thing about political parties is that they're full of losers not everyone is a loser in the political parties but like that's a reality of this i mean like are you a member of a political party i'm not like there's all sorts of uh shenanigans that go on and it is you know what they call it when they're trying to be polite is a broad church.

13:12That's the term they use. What they mean is it's a bucket filled with some good people and a lot of nutcases. Now, I'm not saying that Moira Deeming is a nutcase. I don't know her, and I'm really not saying that. Like, I think some of what was done to her was really not good. I think these allegations, I haven't looked into, but from the cursory look I had, it seems like they weren't very well supported and now they wanted to apologize or whatever. My view is this. This is not unique to the Liberal Party. This is what happens when you're in opposition. These kind of things tend to happen, especially when you've been in opposition for as ridiculously long as the Victorian coalition, Liberal Party.

13:51And so I think that this is largely irrelevant. And my guess is that voters, when they're deciding who to vote for in the Victorian election will not be making a decision about whether the Victorian Liberal Party is electable and can govern based on any of this stuff. It will be a decision solely made on the basis of can we live with ourselves re-electing this Labor government again? And I said from the start, Jess Wilson, I think she's capable, but I think she should have just acted like a rock and stayed in one position and not said a thing and then no one will have an issue one way or the other, because that is the way you get elected when you're in opposition.

14:32So I think this is largely all irrelevant and it's just a sideshow and it's very dumb. Yeah, it's a small target, obviously, policy. But I think if you look at the, so there's been two issues with more. I don't want to delve too much into Victorian politics, a lot of listeners probably don't care. But there was the first issue where she was at a, effectively an anti-trans rally, you can have your views on that, but she was at an anti-trans rally and a couple of neo-Nazis gate crashed it. And the then leader, John Pusciuto, who I thought was actually a really good leader, stupidly, obviously very badly advised, tried to use this as a lever to get her out of the party, essentially.

15:02And there really wasn't the grounds for it. And she basically won that battle. And I think she probably should have. And she sued Pusciutto for defamation, and I think was successful there. And he owes a million bucks and liberals trying to bail him out. But then, so that was all sort of resolved. She was pre-selected. She actually wasn't initially. And then the guy that pre-selected had some issues. So she got pre-selected for the upper house. And then this incident, she basically accused former leader Matthew guy of assaulting her. Unfortunately for Moira, there was video of this incident and it's very, very clear that he didn't assault her.

15:30He touched her shoulder gently. So this was pretty bad for her. And even her supporters on the right of the party appears to not be supportive of her anymore. So I think Jess Wilson initially was supportive, realised that the wins were against Moira, has now completely turned away. And it's effectively trying to deselect her and that potentially will happen. But I think your point on political parties is right. And You kind of want a broad representation in the community, but as a result, there's a lot of people in the community who have their issues. So I think that's the problem with politics is you want a representation, but you sort of get what you pay for there.

16:04So I don't think we can add too much more on this. The Liberal Party will go through its motions. I think you're right. I think there's a, like if you look at the Labour Party, I think Sinterk Alley is the least popular premier almost in Australian Victorian history now. This is a rotten government, a corrupt government, it's virtually a money laundering organisation for CMFMEU, as we're seeing with the big bill. And even after I was told two years ago, the Victorian Labour government has done nothing to resolve this. So they continue to be effectively a corrupt, despicable organisation that rots from the head from Dan Andrews to Dan Andrews to Cinta Allen.

16:37This is the most appalling group of people you could ever see. We can only hope and pray, and I'm no Liberal shrill by any stretch, but we can only pray that Jess Wilson and she's got some great people, Amelia Hamer's a rip-out. There's some really good people in Jess's team who hopefully can knock these guys off. It's 16 seats, so it's a big target. But they are just a rotten government that I think most people realise, they see them for what they are. And we should say as well, for people that haven't had any interaction with political parties, which is most people, the inside of a political party is basically a circus.

17:13That's the only way you can describe it, where the performers, many of the performers really hate each other. and if you want to know who politicians hate, especially true for Labor with their factions, but true universally in political parties, they hate people in their own party much more than they hate the opposition. The opposition is just annoying when it comes to the election because they try to beat you, but you have to live with these maniacs, the people you think are maniacs, in your own political party every day of the week. So the real hatred in politics is for people in the same party as you and I think that this is just a bit of the circus, you know, creeping out of the tent, basically, with the Libs.

17:55Yeah, and the Libs have had this issue really since the Abbott-Turnbull sort of fight of 2008 over climate change. So Liberals under Howard, Howard was super disciplined. There was the wets and the dries of the 80s, but Howard was very disciplined and the reason he was able to effectively win what I think was one, two, three elections was he kept the Liberal Party under a leash and since then Turnbull certainly couldn't do it, Abbott couldn't do it. Morrison kind of did, but then was unbridled by his own incompetence. So the Liberal Party, certainly in Victoria and in federal level, hasn't been able to maintain discipline, whereas Labour have been far more disciplined, both at state and federal level.

18:31Exactly. We'll go to a super quick break, back with question number three, just in a moment.

18:43And we're back, Mike, question number three. All right, question three comes in this week from Stephanie. Hi guys, I'd love to hear you both talk about faith. Do you consider yourself practicing Jews, culturally Jewish, or somewhere in between? I was raised Christian and faith has always had a role in my life and decision making. Has your perspective on religion changed throughout your careers? I do. You're the devout person on this podcast. I've got to, this is my short answer. being Jewish is central to my sense of self and basically I'd say it's a core part of me but I mean that more in a cultural sense than in a religious sense so I you know so everything to do with Judaism and Israel in a cultural sense is central to my identity in a religious sense my one-line explanation of it is I would be somewhere between God-fearing and agnostic slash unsure.

19:43Where on the scale I am, it probably varies by the day. And I would say I do much less than maybe I would think I should do because I mostly can't be bothered keeping most of the Jewish stuff out of just laziness and convenience. But because I went to quite a religious school as one of the number of schools that I went to, I'm very familiar with all the religious practices in detail. And so I can certainly do them. And I think doing some of it is important, but I'm not, I'm not particularly observant. I have noticed one thing when I speak to my, let's say Anglican friends about what I do. And I say, I'm not very observant.

20:22Like my branch of Judaism is Orthodox, various branches. I say, I'm not very observant. And then I tell them what I do. They're like, oh my God, that's like super religious. But then when I talk to Muslim friends about it who are like I would I would say is cultural and a bit religious they're almost exactly the same so I think that there's a quite an interesting kind of reality so that's my answer that question yeah I'm probably similar on the spectrum more cultural than certainly heavily religious but um yeah so I think we probably see it relatively similar interestingly there's been a an after probably 50 years of I'm talking about church attendance as a proxy for all religions but as church attendance has really dropped off in the last 50 years in most western countries US and Australia alike.

21:03There has been a recent research, I saw some Bloomberg data a couple of months ago, that in the US anyway, there's been a resurgence in church visits from people across the spectrum, especially younger people. And the speculation or what Bloomberg suggested was this was really just yet another sort of quest for younger people to have more in-person experiences. And there was such a turn away and COVID obviously exacerbated this, but from social media to dating apps to whatever, I think people are realising that they don't like that lifestyle and call it church, call it synagogue, call it mosques, call it temples, are a great way to connect with people, great way to meet people.

21:42A lot of people who've met in church or synagogue have great married lives. They share such similar morals and faiths. So that's a great way to find a life partner as well in what is certainly the dating apps or a quagmire. Certainly what people tell me, having in-person experiences at a religious institution, That might not be the aim of the institution, but certainly it's a great second-order effect, a second-order positive effect of finding a great life partner. Well, I want to say something on that. So there's a famous American author, deceased author, won the Nobel Prize for Literacy called Kurt Vonnegut, and he had this attitude that he wrote about, which is very fascinating.

22:18He said that the Western world without religion has effectively lost its coming-of-age milestones, and like the Jews have got this bar mitzvah, which is when boys turn 13 or bar mitzvah when girls turn 12 and it's this milestone that marks coming of age. And the Christians have baptism and all that sort of stuff as well. They do, but most people who are not religious in any way, like they kind of miss this and they miss the structure and the ritual and I think a lot of this is that we, We, like humans culturally, we did evolve with these types of rituals inherent to our society. And Western liberal democracy is kind of just like a continuation of the Roman Empire, which is largely a Christian empire.

23:07We need to be honest about that. And so our culture is a Christian culture that had all of these norms built into it. Maybe we call Judeo-Christian. And now, like just wiping them all out, that is really bad for people's sense of belonging. and so I'm not surprised that's going up. And I'm going to give you, I'm going to finish with a very unusual recommendation and suggestion. So that, you know, I'm going to give a piece of advice on how to succeed as an anti-Semite. How about that for a piece of advice? So this is, so if you want to get rid of Jews, the answer is not to kill Jews because that does not work.

23:43People better than you have tried and failed. But this is how you can get rid of Jews. you should spend 100 years just being super nice to Jews and saying you are totally not different in any way to us. You just fit in perfectly. Because the trajectory of Jews in secular societies or even in Western society more broadly is over time, like Jews will have run away from people hating Jews. They'll come to a new society. They'll build the society. They'll assimilate into the society. They'll become less religious. They'll start marrying non-Jews and having non-Jewish kids. And then what happens is eventually people will turn against the Jews again and hate the Jews and chase the Jews down, which is what's happening now.

24:29And then Jews become more, have a stronger cultural identity again. Like after October 7, Adam, you would have seen this as well, Jews became, many Jews became much more conscious of being Jewish and it became much more important. And then Jews care really strongly about being Jewish again. And so the trick if you want to get rid of the Jews is just be super nice to the Jews for 100 years, tell us we're all the same and let us assimilate into society. But, of course, it never happens. No one can be nice to the Jews for 100 years. So I've always found that very perverse, that hating Jews and going after Jews actually strengthens the cohesiveness of Jews.

25:04Yeah, that's a great point. And three great questions, as always. Thank you to our amazing listeners. We'll, of course, be back on Tuesday for our big episode. Thank you, Mike, again. We'll see everybody soon.

25:16Thank you.