Friday, August 29, 2008

Politics Over Policy


Politics Over Policy

It seems that “infrastructure” has become a real buzzword in recent years. We hear it all the time, in a variety of contexts. Private equity funds became obsessed with infrastructure funds, an obsession which is now unraveling in the credit crunch fallout. The Federal Government has been elected on a promise to revitalize the nation’s infrastructure, and has even established a statutory body to oversee the process. State Governments have spent the last few decades palming off their infrastructure obligations to Private Equity investors, so that now they are trying to make up for lost ground.

One of the reasons the New South Wales Government gave us for its plan to privatize power was to allow the money to be spent on other important infrastructure such as hospitals and transport. In other words, they wanted to sell some infrastructure in order to pay for other infrastructure, including for example the much vaunted Metro rail plan.

It has emerged through the Sustainable Sydney 2030 report that rail investment over the past eighty odd years has been non existent. The result is that comparable cities around the world have as much as ten times more track in their city centres than does Sydney. No wonder people complain about the trains. This is a classic example of the failure by successive governments to honour their obligations to the people.

The demise of the Premier’s plan to privatize power means that the Government now has to redraw its budget. The question now is what plans will be scrapped to make up for the shortfall? The Metro? Hospitals? Schools? At the same time, the mysterious “Plan B” which the Premier claimed not to have, has now emerged and will see the sale of the electricity retailers while the Government will retain the generators. This is actually worse than no privatization because it is the generators which will cost money under the future Emissions Trading Scheme, and which will have to be replaced with new technology at the cost of $15 Billion or more.

The truth is that the whole mess is the result of decades of government failure to adequately plan for the future, whether it is electricity, or transport, or hospitals. This government in particular has had a bad record of making announcements about projects that never see the light of day. It has depended upon Public Private Partnerships based on dodgy contracts to provide the infrastructure that should have been the responsibility of government, and now it can’t afford to deliver on its own promises. Privatization has become the panacea to cure all government shortcomings, and now that this privatization plan has fallen over, the government has been caught short.

Although Barry O’Farrell has been accused of placing politics ahead of good policy, the need for privatization has arisen now only because of poor policy in the past.

Thursday, August 28, 2008

Plug Pulled On Power Play


Plug Pulled On Power Play

Well, it’s time to start stocking up on the candles. In a few short years the lights in New South Wales are going to go out. For months now, the Premier, the Treasure, and various business leaders have all been screaming about the dire threat to future electricity supplies if the plan to privatize the industry failed to proceed. Repeatedly they used the expression “the lights will go out”. And now, Barry O’Farrell has had the temerity to oppose the plan and vote it down in the Parliament. Oh dear.

Candles, glowsticks, kerosene lanterns, will all become highly sought after items now as the people of New South Wales prepare themselves for technological Armageddon. Consumers will fight each other to the death in the supermarket aisles over the last available Duracells for their camping lights. Civilization as we know it is about to break down beyond all repair. What ever could have possessed Barry O’Farrell to be the cause of such devastation.

Now wait a minute. Surely we’ve all been missing something here. Whether or not it might have been in the best interests of the State for Morris Iemma’s plan to proceed, there is no way any government will allow the supply of electricity to fail. What happens now is that the Government is forced into a position where it must deal with the issue instead of avoiding it, as it has so far.

Ultimately, it would be in keeping with Liberal Party philosophy to privatize the industry. But the prospect of ravaging the Premier’s credibility has proven to be a far more attractive proposition for the opposition. Of course, this has come at a price. There have been indications that many in the business community might drop their support for Barry O’Farrell as a result of this decision. That support will be important to the Liberal Party when the election draws near.

The gamble that the opposition leader is taking is that he still has almost three years up his sleeve to mend those fences, and formulate his own privatization plan. There's no reason why that shouldn't work... after all, who else is there who could lead the Liberal Party in New South Wales?

Wednesday, August 27, 2008

The Land Of The Impoverished


The Land Of The Impoverished

Sometimes it’s easy to forget how well off we are. While we are right to be concerned about preventable deaths in our hospitals, about old age pensioners trapped beneath the poverty line, and about the apparent inability of our Government to do anything about petrol and grocery prices, it’s worthwhile having a look around. When we see how the rest of the world is traveling, things don’t seem quite so bad.

Right now, major world powers like the United States, the United Kingdom, and Germany are sliding into recession. While most European nations have decent welfare safety nets in place, the United States is in a different category. When we think of the United States, we generally think of it as the most powerful nation on earth; a wealthy prosperous nation with high living standards. But that is only one side of the coin.

A new report produced by the U. S. Census Bureau has revealed that 37.3 million Americans officially live in poverty. Disregarding the fact that the United States definition of poverty is determined differently from ours, it is still alarming to think that almost twice the population of Australia lives in poverty in the Land Of The Free.

Even more staggering is the fact that 45.7 million Americans have no access to health insurance coverage, which essentially means they are on their own because Public Health in the United States is nothing like the world class system we enjoy here in Australia. The point is that, as great and powerful as the United States might be, not everything about their way of life is better than, or even comparable to ours.

This is why the concerns expressed by Australian Medical Association President, Dr. Rosanna Capolingua, must not be ignored. Of course she has a vested interest in defending the franchise of her members, but that doesn’t mean she doesn’t have a point, and her point is that we do not want a United States style managed care health system in this country. Dr. Capolingua has warned that moves by the Federal Government to provide hospital performance data to Private Health Funds is a step in that direction.

Imagine if you could no longer choose what hospital or which doctor you wanted because your Private Health Fund will not pay. If you are fortunate enough to be able to afford Private Health Insurance, shouldn't you be entitled to get what you are paying for? The Funds are business operators who must be driven by the profit imperative, and as such should never be placed into a position where they are influencing or controlling clinical decisions.

That is not the Australian way.

Tuesday, August 26, 2008

The Political Countdown


The Political Countdown

The clock is ticking… For the New South Wales Government, for Opposition Leader Barry O’Farrell, and for the electricity consumers of this state. Both the Premier and the Treasurer remain adamant that the privatization process must proceed. In this they have the support of the business community, but not of their own party rank and file, or, more importantly, the general public. If it fails to proceed, their political careers are over. Even if it does, they are likely to lose office at the next election.

For Barry O’Farrell, the clock is ticking for a very different reason. In any other circumstances he would have to do nothing more than sit comfortably on the sideline and watch the Government rip itself apart, safe in the knowledge that all he has to do to become Premier is to avoid doing anything silly. But that is not the case. In a tremendous twist of irony, the spotlight has fallen on Barry O’Farrell as he is now in a position where he must make a decision, and he must make it by Thursday.

The business community has made it clear that they will wash their hands of him if he opposes the sale. On the other hand, if he supports it, he not only strengthens the position of the Premier, but passes up the opportunity to actually stand up for what the public wants and expects. Under any other circumstances it would be in keeping with Liberal Party philosophy to privatize the industry. But the politics here have turned everything topsy turvy.

And that brings us to the general public, and the public benefit. It is clear that a significant majority of the public is opposed to the sell off. They don’t trust the government, and they believe that prices will go up and jobs will be lost. The steps put in place to address those concerns are seen as an admission that the concerns are well founded. Many people suspect that the whole thing is a big con to line the pockets of big business.

When you think about it, if the industry is such a liability that the Government is better off to sell it, what private investor in his right mind would buy it? Conversely, if a private corporation can make the massive investment required to not only buy the operation but to build new capacity and make that investment into a profitable ongoing business, why couldn’t the Government do the same thing, at less cost because they already own it, and benefit from the ongoing income for years to come?

Once again, the prevailing economic philosophy has dictated the course of action to corporatise and then privatize everything, providing a bonanza for merchant bankers and lawyers, amid empty promises of better service for paying customers. The truth is that eventually governments, that is the people, will own nothing, and the people will no longer be able to provide for themselves.

And Barry O’Farrell? I suspect that he will embarrass the government for as long as possible, before allowing the privatization to proceed. After all, he would look silly stopping it now, and trying to do it himself when he becomes Premier in three years time.

Monday, August 25, 2008

More Owellian Classics

“Mutual Obligation” was a concept introduced by the Howard Government which requires welfare recipients to jump through hoops in order to continue receiving the money. On the face of it, it seems like an eminently sensible idea. If the State is to provide an individual with the means to sustain himself, then surely it is reasonable that the individual should fulfill whatever requirements are deemed necessary. The trouble is that life isn’t quite that black and white.

In reality, “Mutual Obligation” is yet another Orwellian masterpiece of doublespeak. There is nothing “mutual” about it. Rather, it can be a draconian measure which undermines community stability and wellbeing. Single parents are required to place the search for work ahead of their duty to care for their children. Disability sufferers who are assessed as being capable of working 15 hours a week are denied the Disability Support Pension, even though nobody can make ends meet on 15 hours a week.

Now, the Rudd Labor Government plans to extend mutual obligation provisions to the parents of children who are not in school. Under legislation to be introduced this week, parents of truant children could have their welfare payments cut off for 13 weeks. Obviously, the intention is to push delinquent parents into ensuring that their kids attend school. But unfortunately it does nothing to address why those parents might be delinquent in the first place.

There could be many reasons, such as substance abuse, mental disorder, family dysfunction, socio-economic stress, and so on. On top of that is the fact that such a measure ignores the reality that people who are dependent on welfare often have no other resources. Take away the money and then what? Do they turn to crime?

The vast majority of parents want their kids to go to school, to better themselves, and to achieve something in life. Parents who deny this to their children have very serious problems that won’t be addressed by stopping the dole money. In fact, those problems could very well be made worse.

Using another literary metaphor, Mutual Obligation in this form is another step towards a “Clockwork Orange” society where people are beaten into behaving appropriately, rather than being taught to be responsible for themselves.

What is truly ironic is that this proposal is coming from the Labor Government. I wonder if Brendan Nelson is thinking about blocking this one?