Friday, January 25, 2008

Doctor Knows Best… But Is The Government Listening?

The story of Vanessa Anderson is not only a sad one, but it is the final straw that seems to have broken the New South Wales Government’s resistance to the idea that something is wrong in the health system. Vanessa died at Royal North Shore Hospital after being given an excessively high dose of painkillers for her fractured skull, an injury which she sustained when struck by a golf ball. The coroner reported that “almost every conceivable error was detected, and those errors continued to build one on top of the other.”

The Premier has responded by calling a Special Commission of Inquiry to examine the entire health system. Critics are still calling for a Royal Commission which they say would have wider powers and a broader brief. Either way, the real question is not what any such enquiry will find, but when will the government finally accept that they are the problem.

The indications have been present for a long time that the current administrative structure is failing to deliver the standard of care that we should be entitled to expect. It has been equally clear for a long time that our medical professionals know what the problems are and know what’s needed to address those problems. Dr. Tony Joseph from Royal North Shore has repeatedly claimed that the bureaucrats and the politicians simply aren’t listening to what they are being told by front line doctors and nurses.

This is the fundamental nature of the problem. Our society has been contaminated by an economic philosophy which promotes a management culture where those who know how to deliver a service are at the mercy of mangers and administrators who have little or no expertise in anything other than sitting at a desk. The result is that the people who have the responsibility of actually doing the work are simply told what they will be given rather than asked what they need.

It’s time to put the horse back in front of the cart.

Thursday, January 24, 2008

The End Of An Icon

The announcement that the Bulletin magazine will no longer be published is more than just the end of an era. It is the loss of a piece of Australia’s heritage. The Bulletin has been a link to own history, as well as being a significant part of it. Since its foundation in 1880, the Bulletin has reported weekly on Australian political matters, business affairs, and social life, as well as provided a platform for some of our most important literary talents.

The Bulletin published works by Henry Lawson, Banjo Patterson, Steele Rudd, and many other great Australian writers over the years. It hasn’t just recorded our history as a nation, it is our history. And now it’s all over.

Sadly the magazine has been published at a loss for some years now, and since the title passed into the control of private equity investors last year it was only a matter of time before something like this happened. It would be easy to ask if more could have been done to turn the fortunes of the magazine around, but when somebody is paying the bill they are entitled to ask if there is any prospect of seeing a return on their investment.

It is a sad loss, and I feel that the institution that is the Bulletin deserves better. I wonder how Rupert Murdoch might have handled it. For all of his reputation for ruthlessness, it was Mr. Murdoch who ran the Australian Newspaper at a loss for many years so that his empire would have a quality flagship masthead. Of course, that’s all hypothetical, and things seem to be different in the twenty first century.

In the end, if we really loved our Bulletin that much, perhaps we would have bought a copy more often and this would not have happened.

Wednesday, January 23, 2008

Goodbye Heath

There are not many days when the biggest news story of the day leaves us all stunned and shocked. The sudden and unexpected death of Heath Ledger at the early age of just 28 has made the entire world stop in its tracks. I’m sure the speculation about drugs and illness, and the questions about how and why will be around for some time, but what is certain is that a great talent has been lost.

Heath Ledger was sometimes seen as a difficult character, with friction between himself and the paparazzi, and to some extent a quiet and private individual despite the public nature of his work. But it is his work that defines him, and now that we look back at it, his career has been an amazing one. Heath Ledger has appeared in a list of films which would take lesser talents a much longer lifetime to achieve. Most of the films were thought provoking works of considerable artistic depth, and even the few lightweight films on his resume were made more worthy by his appearance.

From his debut in BLACKROCK IN 1996, through to his Oscar nominated performance in BROKEBACK MOUNTAIN, Heath Ledger made a point of looking for the challenging role and mastering it. By all reports his performance in the new BATMAN film, DARK KNIGHT, is a tour de force. That film is set for release in July this year.

Regardless of the circumstances or the causes, whatever they turn out to be, the death of Heath Ledger has taken us all by shock, and deprived the entertainment world of an amazing talent.

Tuesday, January 22, 2008

Don't Panic... Yet.

It would be easy to become hysterical and suggest that panic is sweeping the world’s financial markets. To some extent that’s exactly what is happening, but it’s no reason to become hysterical. While the United States began this week with a public holiday, Asian and European markets have suffered their biggest one day drops since the September 11 terrorist attacks of 2001. To some extent there seems to be an over-reaction to fears of an American recession which may or may not occur.

While I believe the United States is confronting a recession, there is reason to believe that Australia, and the rest of the world, is much better placed to ride out the storm. The good news is that most downturns are temporary. Even after the 2001 reaction to the terrorist attacks, most of the losses were regained within months.

The lesson here? Well if you have money in the sharemarket and on paper you are sitting on a loss, check on the fundamental quality of the companies you hold. If they are sound, just sit tight and wait for sunnier days to return. It’s just a matter of how long it will take to regain the lost ground. In the 1987 crash Robert Holmes a Court was asked how much he had lost. He replied that he had lost nothing because he had sold nothing.

So long as you still have dinner on the table, there’s nothing to panic about.

Monday, January 21, 2008

Reviving The Australian Dream

The housing unaffordability crisis in Australia has been highlighted by the results of an international survey which has examined housing prices in 227 cities around the world. 18 Australian cities make it into the list of the 50 most severely unaffordable cities in the world. The worst of these, Mandurah in Western Australia, comes in at sixth on the list, while Sydney is just outside the top ten at number eleven. None of Australia’s cities made the other list, the top 50 most affordable.

The measure is quite easy to understand: it is the multiple of average household income required to buy an average house. In Sydney the figure is 8.6. Housing is considered to be affordable when the multiple is 3 or less. The challenge that confronts us now is: how do we restore the Great Australian Dream?

There are three ways to get the ratio back to a reasonable level. One way is to dramatically reduce the price of housing. The difficulty with this is that all those who have already invested into the market will lose out badly. Worse, those who have borrowed heavily would be wiped out. The second way is to dramatically increase average incomes. As appealing as that might sound for many people, the economic impact of such a shift would also be devastating. Inflation would explode, interest rates would skyrocket, productivity would be undermined, companies would go broke, and unemployment would swamp the community.

The third, and only sensible way is to manage housing prices so that they remain relatively stagnant while the rest of the economy catches up. The most obvious way to do this is to address the readily identified supply issues of land release, development taxes, and timely approvals processes. Even if that could be pulled off, there would still be some pain and suffering in the process of adjustment, primarily among those who have made a livelihood out of speculation, or who have invested on the basis of strong capital growth.

Either way there will be a housing correction, whether it is a savage market driven adjustment that litters the landscape with victims, or a more controlled, managed rebalancing of the price / income ratio which takes the steam out of the speculation business. That’s the choice we have.