Thursday, December 24, 2009

What Have We Done?

In the words of John Lennon: And so this is Christmas… and what have we done? It seems hard to believe that another year has somehow passed by so quickly, and yet here we are, looking forward to Christmas time with family and friends, and looking back at the year that was. So what have we done in the past year?

After the economic disaster of 2008, the New Year began with a bleak outlook. The share market was still see-sawing its way down to depths not seen for years. Dire warnings of recession and unemployment prompted a second wave of economic stimulus in the form of the $42 billion nation building and jobs plan. Now as the year draws to a close, the markets have regained much of their losses, unemployment seems to have leveled out and the recession was postponed indefinitely. Well at least technically anyway. Some will say that the outcome means the economic stimulus spending did its job and the plan worked. Others will always say that the spending was unnecessary and a waste.

Early in the year we were devastated by the Black Saturday fires in Victoria which destroyed lives and property on a terrifying scale. Temperatures and weather conditions conspired to create an unstoppable inferno, leading to claims that perhaps climate change had made the intensity of the fire worse than it might otherwise have been. Drought still grips large areas of the nation, and rivers are drying up. It was the year of the great Sydney dust storm, which originated in the deserts of South Australia, swept across New South Wales, and transformed the city into a scene from a science fiction movie that might have been set on Mars.

Kyle Sandilands and Jackie O couldn’t stay out of trouble. Every time vile Kyle opened his mouth he managed to offend somebody, but for some reason he is still permitted to drive a Rolls Royce, a privilege which should be reserved for more civilized people… like members of the Royal Family and African despots. John Della Bosca shocked the citizens by owning up to an extra marital affair with an attractive young woman half his age, secretly impressing a cavalcade of ordinary looking men who could only dream of achieving something similar. And then even John’s achievements were overshadowed by Tiger Woods.

But while John was keeping company with a younger woman, another young woman was about to make history as Kristina Keneally became the first woman premier of New South Wales. In the federal arena, boxing champion Tony Abbott orchestrated a classic one – two maneuver to KO Malcolm Turnbull and take over the Liberal Party leadership. Mr. Turnbull, accustomed to the Marquis de Queensberry’s rules, was caught with his guard down because he was na├»ve enough to expect a fair fight. While keeping a careful eye on Happy Joe Hockey, he was blindsided by the Mad Monk. Poor bloke never saw it coming.

In 2009, the world was stunned by the death of Michael Jackson, completely upstaging the final tragic performances of one time Charlie’s Angel Farrah Fawcett and Dirty Dancer Patrick Swayze. Kung Fu star David Carradine checked out without leaving his hotel room in Bangkok. Not to be outdone, Hollywood star Jeff Goldblum thought about dying too for a while, but then realized that it wouldn’t be any fun if he wasn’t around to enjoy all the attention.

The leaders of the world all gathered together in Copenhagen to talk about climate change, and it turns out that’s about all they did. After two weeks of generating enough hot air to raise the sea level a good 15 centimetres, they failed to reduce emissions by even enough to offset their own carbon footprint fro all the jet fuel they used getting there in the first place. So instead of an agreement there is an accord, and instead of a target there is a target to set a target next year. We should have known what to expect all along. After all, Denmark is the home of Hans Christian Anderson, the creator of the world’s favourite fairytales.

When you realize that it all kind of makes sense. Kind of.

Until next year, have a safe and happy Christmas and a prosperous New Year. Look after yourself, but more importantly let’s all remember to look after each other. In the end, each other is all we ever really have.

Wednesday, December 23, 2009

Christmas List

All I want for Christmas is, well let’s see…. Let’s draw up a wish list and see what we can come up with. Maybe first up we could all wish for our Christmas mail to be delivered on time. For some of us that may not happen due to the industrial action which has been taken by the CEPU against Australia Post. While it’s tempting to pin all the blame on the union for timing the action to cause maximum interruption, it also has to be realized that the dispute has been dragging on for three years. In that light, you have to wonder just how serious the management of Australia Post is about actually negotiating.

The union claims that the management agenda is to casualise the workforce, removing job security and eroding conditions, while at the same time reducing overall staff numbers resulting in a decline in customer service standards. They say that customer queues at the post office are getting longer, and anyone who has been to a post office lately would probably agree. It is a reflection of the broader business management philosophy endemic in the world today which dictates that efficiency means achieving more with less. By that reasoning the ultimate efficiency is a workplace with no staff and no products and customers who pay them for not doing anything at all. It is self evidently nonsense, but the entire business world has fallen for it. And Australia Post isn’t even a private company, although I have to wonder just how much longer that will last.

In fact, it is a contagion which has long since spread to government entities of every variety. That’s why we have governments telling their agencies that they must deliver so called efficiency dividends, despite the simple fact that nurses in hospitals, teachers in schools and police on the beat are not businesses at all. There is no such thing as productivity in the industrial sense when it comes to the provision of such community services. The idea that less is more just doesn’t work in that context. Instead all you get is less. Less employment in the public sector, less job security, less service to the community, less quality in the services that you do get, and less community satisfaction.

So, as we draw up our Christmas wish list, let’s add genuine reform to health and public hospitals which acknowledges the input of the doctors and the nurses and the communities that they serve, instead of just the empty promises which have so far delivered nothing more than platitudes. Let’s add sustainable, integrated public transport for our cities, but especially Sydney which has an increasingly splintered scattergun approach to public transport. Just because it costs the taxpayers money doesn’t mean that it’s inefficient. In fact, it’s an investment in a better community, especially in the light of the latest research showing the increasing greenhouse gas impact of having everybody driving private cars.

But most importantly, as we make our list of Christmas wishes, I think we might wish for a little more kindliness, a little more caring, a little more courtesy in what seems to be an increasingly belligerent society. That’s not something that we can expect our politicians to do for us, but it is something that we can at least contribute to achieving for ourselves. We can all do our part to make our community a better place by being a little more patient with each other, a little more tolerant, and a little more considerate. It is after all a part of the Christmas tradition to spare a thought, and maybe a little more, for those who are less fortunate, and to share peace and goodwill with all.

In fact, that’s probably the most important part of the Christmas spirit of all, and that should be at the top of any Christmas list.

Tuesday, December 22, 2009

Abbott Hijacks Health Initiative From Rudd

Opposition Leader Tony Abbott has launched a campaign to seize the agenda on health reform from the government. In effect, he is attempting to hijack the government’s position, adapt it to suit his own needs, and take it to the next election. And who can blame him? Health care and hospital reform was an issue which was front and centre at the last election, right up there alongside work choices, and the people of Australia are entitled to ask what happened to those promises. Two thirds of the way through the term of government there as been a lot of talk and very little action, so its easy to get the idea that Kevin Rudd has squibbed on his promise.

Whatever else you might think of Tony Abbott, he is an adept political player. Regardless of the lack of actual policy on pretty much anything, his energetic opposition to just about everything the government does has to some extent revitalised the Liberals, giving them a spark they had lost by making a clear distinction between themselves and the government. Where Mr. Rudd once had clear public support for his agenda, the truth is that the states are reluctant to give up control over anything to the Commonwealth, leaving Mr. Rudd’s timetable for reform sadly battered and bruised. And while Kevin Rudd is now seen as being slow to bring about meaningful health reform the door is open for a smart operator like Mr. Abbott to seize the initiative.

Of course, it is easy in opposition to tell everybody that you would do a better job than the incumbants without actually having to do anything. Tony Abbott knows that, and is taking maximum advantage of it, making himself a pro-active opposition leader prepared to attack the government at every opportunity. But he also knows that sooner or later he will have to come up with real answers and real policies if he is to have any real hope at the next election. His proposal today for the federal government to directly fund healthcare through local hospital boards and bypass the states is an echo of Kevin Rudd’s 2007 pledge to seize control of hospitals if the states could not lift their game. It sounds very appealing, but actually delivering on the promise if and when the crunch comes will be a whole lot more difficult unless the states come to the party.

Just ask Kevin Rudd.

Monday, December 21, 2009

A Target To Set Targets

After all of the hot air expended at Copenhagen it seems that there is very little result to show for it. Despite widespread calls for urgent action on climate change, and a general consensus that global warming should be contained to within 2 degrees, the final result of the conference appears to be a vague agreement for everybody to go away and draw up a wish list. Each country can nominate its own voluntary target and the means by which it will be achieved, and the lists are all due to be handed in by February. After dire warnings that ambitious and binding targets of 25 to 40% must be set to avoid climate catastrophe, we have instead a target to set targets next year.

There was some discussion about finance to assist poorer countries in dealing with the cost of climate change policies, and agreement for a supposed $100 billion fund, but no real plan on just how the money will be raised or whence it will come. Even assuming that the money is found somewhere, it amounts to about half of what is said to be required for the task. This is such a vague compromise that it would have been impossible to draw up a treaty or even a formal agreement. Instead, the conference has resulted in a “statement” by a handful of countries which has been “noted” by the other nations, whatever that means. In fact, what it appears to mean is that nobody has committed to anything.

So, after two weeks of gasbagging in Denmark the final outcome is an underfunded plan with no clear source of finance to achieve targets which have not yet been set. It would seem to be just possible that the net result of the entire exercise has been to fail to achieve sufficient emissions reductions to even offset the carbon footprint of the delegates burning all that jet fuel to get there in the first place.

Here at home, opposition leader Tony Abbott has been claiming vindication for his position that the Carbon Pollution Reduction Scheme legislation should be delayed until after Copenhagen. He claimed that the scheme would be not only useless, but actually damaging, if it went ahead in the absence of a global agreement. Now that the outcome of the Copenhagen conference has turned out to be exactly that, it can be expected that the opposition will again reject the legislation when it returns to the Parliament in February. One way or the other, the next election will be dominated by climate change policy.

Friday, December 18, 2009

Why Tiger’s Troubles Are So Fascinating

Despite the fact that right now history is potentially in the making with the majority of the world’s leaders gathered together in Denmark to try to determine the future of the world, the one story in the news for the past couple of weeks to really dominate world wide attention has been Tiger Woods. Climate change is not at the top of the most clicked list of stories on the internet, but Tiger Woods is still attracting more attention than just about any other story. Perhaps people are sick and tired of hearing about climate change, perhaps some people do not really believe that climate change is a genuine threat, and perhaps some people just don’t care. Most likely, I believe that many people feel that climate change is something which is beyond their own control, and while many people are happy to “do the right thing” with low energy light bulbs and recyclable bags, ultimately they might feel that there’s not really a lot they can do personally about climate change.

Instead, they leave that to the politicians and the world leaders to sort out, while the rest of us deal with matters that have a more immediate impact on out lives. Most of us are caught up in the day to day struggle to make ends meet, provide for our families, deal with mundane challenges like household maintenance and grocery shopping. There’s the challenge of what to get the kids for Christmas, and then the question of how to keep them from getting bored in the holidays. There’s a lot to deal with for most families without worrying about solving the problems of the world. And that’s one of the reasons why so many people are fascinated to read about the problems of one of the world’s most successful men, a man who had it all and if anyone could be happy in his life he should have been.

There is a certain fascination with the fall from grace of any public figure, but in Tiger’s case it has been so spectacular that it eclipses most Hollywood blockbusters for sheer entertainment value. Because of his high profile, and especially because of his squeaky clean image, the titillation factor has proven to be irresistible, no matter how many times we remind ourselves that one man’s marital difficulties are not really newsworthy and ultimately are nobody’s business but his and his family’s. None of us really know the true reality of his experience or that of his wife, but it can be easy to forget that behind all the headlines there is most likely a wife who is shattered and devastated, and a man once adored by millions who must surely now be feeling very small and quite possibly questioning the meaning of his own existence.

In this way it is a story that attracts our attention precisely because we can understand the nature of what is going on, and we can identify with the people involved. Never mind that they are richer than most of us can even comprehend, and live in a world of private jets and lavish estates, we still understand the pain of the jilted wife and the humiliation of the disgraced man. It is a very human story, and because so many of us have also had our own ups and downs in relationships we “get it”. More than that, we finally get to feel just a little bit superior because despite whatever failure we might have it turns out that Tiger has out done us all. That is why people generally are more interested in reading about Tiger Woods than climate change.

Thursday, December 17, 2009

Net Censorship Undermines Our Rights

The federal government’s plan to introduce mandatory filtering of the internet to block access to undesirable material has attracted widespread criticism. The intention is to remove access to such things as child pornography, incest, bestiality, vilification, incitement to violence, instructions on how to commit crimes and so on. It seems like a worthy intention, especially in the context of protecting children from some of the extreme material which resides on the internet. But there are several problems with what the government is proposing to do.

First, it simply will not stop all objectionable material. The filtering system will rely on a black list of material which is categorized as “refused classification”. This list must be compiled and constantly updated from information received about new websites as they appear. Some material will escape the net, so to speak, and some material will simply move to a new website to replace one which has been blocked. It will be very difficult to keep up. Nevertheless, it will stop a lot of the objectionable material and supporters of the idea would no doubt feel that is a good start.

Secondly, it will also stop access to legitimate material. This has been demonstrated by the draft black list which was leaked some time ago. It included websites with otherwise legal content including completely innocent victims such as a tuckshop supply company and a dentist. This raises the question of liability for commercial damages should a legitimate business have its website inadvertently blocked by the filtering system. But both of these issues are practical matters, and with a little bit of common sense practical solutions may be found.

Of much greater concern is the methodology employed by the government, leading to fears of censorship and denial of basic legal and human rights. The most fundamental question is the one of who decides just what is and is not objectionable. Under the government’s plan a secret committee will be responsible for determining what should be refused classification and creating a secret list of websites to be blocked. Because it is secret, any business or individual who has a website blocked will not be notified, and will not be able to enquire if they are on the list. If someone is commercially disadvantaged they will have no recourse, and will have been denied the fundamental legal right to have allegations against them to be heard. They will be denied the vital legal right to confront their accusers and defend themselves.

The government’s proposal opens the door for completely arbitrary censorship where a government authority would have the power to declare anything off limits, without any appeal process, threatening whatever right we believe we have to freedom of expression. We might even trust today’s government to make good decisions and only ban truly unacceptable material, but there is no protection against future governments making bad decisions which interfere with our fundamental rights. Freedom of communication and expression, along with freedom of belief and freedom of movement, are the foundations of any free and democratic society, and this plan undermines those foundations.

Wednesday, December 16, 2009

No Excuse For Excessive Interest Rate Rises

After Three successive interest rate rises over the past three months, the widely held expectation has been for more of the same in the New Year. So far many of the economic indicators have been stronger than expected, leading to the conclusion that the recovery from the Global Financial Crisis is well underway and powering along. Unemployment appears to have peaked and is falling, consumer and business confidence are rising, and home loan approvals are increasing. But two things have emerged to suggest that interest rates might pause at current levels before any further increases.

One is the latest economic growth figures showing lower than expected growth for the September quarter at 0.2%, about half of what was forecast, and well down on the 0.6% in the previous quarter. With no risk that the economy might be in any way overheating, the pressure for interest rates to rise is significantly eased. In fact, the feeble growth figures should be seen as a reminder of just how fragile the recovery really is.

The other factor is a speech given by Reserve Bank Deputy Governor Ric Battellino which has provided some clues as to the future direction of Reserve Bank policy. While recognizing that the cost of borrowing has risen for banks, Mr. Battellino has shown that the margin between what banks pay for funds and what they charge their customers is now wider than it was before the Global Financial Crisis. Closer examination shows that the greatest margin increase is not in mortgage lending, but in business lending, further undermining the strength of economic recovery.

Mr. Battellino also explained that this increased margin represents a shift in what might be considered a normal setting for official cash interest rates. As the differential between bank lending rates and the Reserve Bank cash rate is now about 1% greater than it was, the effect of the current official rate at 3.75% is similar to the effect that 4.75% would have had before the increased margins came into play. In other words, he is saying that the Reserve Bank won’t have to increase official rates by as much because the banks have already increased their rates independently.

What this means is that the current official rate is now, in Mr. Battellino’s words, “back in the normal range”, even though it is still below historical norms. On that basis, there is no rush for the Reserve Bank to push rates up again when they meet again in February. It also means that not only are banks actually making more profit out of their loans now than they were before the Crisis, but most importantly they have no excuse to pass on any more increases above the rate set down by the Reserve. If they do it will only prove that they really are being greedy and profiteering at our expense.

Tuesday, December 15, 2009

Under The Influence Of Liquor Lobby Groups

Comparisons have been made between hoteliers and developers in terms of their relationships with government. The influence of developers and their lobbyists is currently the subject of much examination in the wake of the Michael McGurk murder, and the perceived influence of Graham Richardson, the former federal minister and Labor Party powerbroker. The idea that developers who make donations to political parties might receive favourable treatment is an easy concept to grasp. But while all the attention has been focused on allegations of corruption involving developer donations, it has been easy to forget that other lobby groups also seek favour with the government.

The alcohol service industry is also a significant source of political donations, as well as being an enormous tax revenue generator for any government. For that reason, it has been suggested that there is a potential conflict of interest for a government which claims to be targeting alcohol related anti-social behavior. A paper produced by a police officer, and endorsed by the Police Association, apparently alleges that the government is “unduly influenced” by political donations from the Australian Hotels Association, described as “unacceptable practices that subvert established democratic processes.”

The reason for the Police Association’s concern is quite simple. They are tired of police officers being injured by drunken thugs who pick fights and resist arrest. While the government is talking about finding ways to reduce such violence, police officers know from experience that one of the most effective ways to do that is to reduce trading hours. Yet, despite the evidence of trial changes to trading hours in Newcastle, the government appears to be very reluctant to take that approach. Instead, there is a great deal of talk about personal responsibility and measures such as plastic cups.

Of course, not everyone who gets drunk is also going to get violent or anti-social. Reducing trading hours could easily be seen as depriving the majority of their rights to go out and have a good time in the attempt to thwart the few who cause the trouble. In a free society, responsible adults should be able to go where they please, when they please, including out for a drink. In fact, in a free society it should not be against the law to make an idiot of yourself, so long as you do not harm or interfere with others.

Personal responsibility must be the central principle from which all else proceeds. But from a practical point of view, reducing trading hours is effective because it reduces the opportunity for people to get themselves into trouble. Even a modest reduction in hours can make a big difference in the amount of violent behavior, as has been proven where it has been tried. It’s an idea that deserves at least to be properly considered in an objective fashion, and that’s not likely to happen as long as we have governments who are seen to be under the influence of the liquor industry.

Monday, December 14, 2009

Doctors And Nurses

You might not have heard of the Health Professional Entry Requirements 2009-2025 - Macro Supply and Demand Report before today, but the government has been sitting on it for some months now. Maybe that’s because they know they can never deliver the outcomes that are called for in the report, which looks at how many training places are needed to produce the doctors and nurses who will be required to serve the expected population in 2025.

According to the report, an additional 356 training places for doctors and more than 7000 for nurses are needed each year. This would require whole new medical schools to be established to cope with the increase, but as alarming as that is, it’s not the biggest problem. The real problem is finding places for medical graduates in training hospitals to gain critical clinical experience. It is an essential part of any doctor’s training, but even if university places are increased, there is nowhere for them to go.

Part of the reason for this is the fundamental flaw in planning which has left our hospitals struggling across the board. Some decades ago it was assumed that improved medical technology would result in patients leaving hospital sooner, reducing the need for beds, and the staff to service them. Decisions made then have left hospitals underfunded, under equipped and understaffed. What this means is that not only are there insufficient facilities for training new doctors, but even more alarmingly there are not enough senior doctors available to pass on their expertise.

One possible solution is to radically alter the nature of doctor training so that internships are served in general practice clinics, and plans for that to occur are well advanced. However, a general practice clinic is not a hospital and there is a real risk that doctors would not gain the same breadth of experience in such an environment. The fear is that it would amount to a kind of doctor-training-lite, and that’s why there should always be at least some in-hospital training for interns.

In the end, there is only one solution to the dilemma, and that is to properly fund the public hospital system. It comes down to the money, and the realisation that health funding is not just an expense, it is an investment. Decades of so called cost efficiency measures have eroded the ability of our hospitals to fulfill their vital functions, and first class medical training is one of them. In the end, cost cutting is very much like pruning the garden: it’s all very well to cut away the dead wood, but cutting too deeply will kill the bush.

Friday, December 11, 2009

Power To The People

The push to introduce recall elections in New South Wales is gaining momentum, in part propelled by the Sydney Morning Herald running a petition, but mostly because people are increasingly fed up with the frustration of being lumbered with a government they see as incompetent and introspective. The idea was put forward by opposition leader Barry O’Farrell early this year and he has been promoting it at every opportunity since. Of course, if we already had such an option available he would be the beneficiary because on current opinion poll figures he would win any such election.

Currently, there are very few options for getting rid of a poorly performing government. The governor really cannot do anything unless the government does something which is illegal or unconstitutional. That leaves the parliament itself to pass a no confidence motion in the lower house which would require the governor to then dissolve the parliament and open the way for an election. Since the government has rock solid control of the lower house that would amount to sacking themselves, and that is just not going to happen. It is because of this state of affairs that a recall election seems like such an appealing idea.

It is a process which already exists in other parts of the world, most famously in California where it was a recall election which saw Arnold Schwartzenegger take office in 2003. It also exists in the Canadian province of British Columbia, which has a similar system of government to our own. A recall election process simply allows ordinary citizens to sign a petition for an election on the grounds that the government is not meeting performance standards. If enough signatures are collected, an election is called. It’s power to the people in the most direct and democratic manner.

Of course, it is important how performance standards are defined, and how many signatures are required, so that we are not running off to elections at the drop of a hat, but the overseas experience shows that the system can work well. While our experiment with fixed four year terms has been disappointing, a recall election mechanism would provide an escape clause which would help to ensure that governments maintain standards throughout their term. It doesn’t mean that the fixed terms would be superseded, just made to work better.

Barry O’Farrell is promising to call the required referendum to introduce recall elections should he become Premier in 2011. Ironically, that means that while the current government will stubbornly serve out its fixed four year term, Mr. O’Farrell would himself be subject to the provisions of any such recall election law. It would mean that his government, and all successive governments, will be subject to a higher level of accountability and that can only be a good thing. It is more power to the people, and that is something that politicians very rarely give away.

Thursday, December 10, 2009

Westpac’s Banana Republic

Interest rates are rising, unemployment is falling and the Westpac Bank is apparently selling banana smoothies. Today’s unemployment figures have unexpectedly shown an increase in fulltime jobs and a fall in overall unemployment, down from 5.8% to 5.7%. Yes, it is only a modest fall, but the crystal ball gazers were expecting any movement to be up not down. Even more significantly, this is the second time this year that the number has fallen against expectations. After peaking at 5.9% in July, the rate fell to 5.8% in August where it has remained steady until now, despite predictions of a peak around 6.5%.

So what happened to all the doom and gloom and predictions of unemployment reaching 8.5% or even higher? Does this second fall mean that the peak has passed and the recovery from the Global Financial Crisis is powering ahead? At the very least it is a positive sign for the Australian economy, and at the best it could well mean that we are actually on the way out of the woods that everybody seems to be so fond of talking about. Of course the risk of further international instability still means that we shouldn’t count chickens which have not yet hatched. What we can count on however is that we are likely to see more interest rate increases as a result.

Meanwhile, the happy folk at Westpac have been busy explaining themselves after increasing mortgage rates by 20 basis points more than the official rate increase. Princess Gail Kelly seems to think it has something to do with the price of bananas, although how the price of bananas can affect interest rates is something I haven’t quite figured out yet. Perhaps it has something to do with the banana republic economy Paul Keating warned us about years ago, or perhaps Westpac executives just think of their customers as monkeys.

Either way, this will not be the end of it. As the recovery continues, official rates will rise further and banks including Westpac will continue to increase their rates too. Never mind that rates are still considerably lower than they were before the crisis hit, there will still be complaints every time they go up over the next twelve months. But given the severity of the public backlash against Westpac this time, I wonder if they will be quite so enthusiastic about leading the way to higher rates next time around.

Wednesday, December 9, 2009

Magic Pudding Policy

Tony Abbott’s choices for his new shadow cabinet line up have been described as a triumph for climate skeptics. Obviously, hard line climate doubters such as Nick Minchin and Barnaby Joyce have come out as winners, being given important frontline portfolios. Senator Minchin has been made shadow minister for energy and resources, while Senator Joyce has been made shadow minister for finance. Both of these portfolios have a direct and significant impact on climate change policy. But the choices made by Tony Abbott have much wider implications than climate change policy alone.

The new line up has also been described as a sharp turn back to the political right, a return to the Howard era, and a signal that industrial relations reform is back on the table. The mere fact that the reshuffle has seen the return of significant figures from what might be described as the old guard, is in itself enough to inspire comparisons to the Howard era. But it’s not just the personalities that are significant, but the policy ideas that are seen to represent. For example, Kevin Andrews was a central figure in the design of Work Choices, as well as the immigration minister who presided over the Haneef affair. Now he has been given the shadow portfolio of families and community services. Does this mean he has the opportunity to show his more compassionate side, or does it mean we can expect harsher policies for welfare recipients?

On several fronts the new line up could be seen as a throw back to a bygone era with former ministers back on the front bench, more right wing policies, and a more skeptical position on climate change, but it can also be seen in a different light. It can be seen as a return to core Liberal Party principles and a move to make a clear differentiation from the centrist Labor government. And if the support for the Liberal candidates at last weekend’s two by-elections is anything to go by it’s a gamble that might seem to be working. Tony Abbott himself has said that if he wins the next election his front bench choices will seem to be an act of genius, but if he loses he is likely to become political roadkill.

If nothing else, Tony Abbott is a realist in that respect. That’s because he knows the political game as well as or better than anyone else. In the end however, that is also the weakness. Tony Abbott’s choices are more a reflection of politics than of policy. In fact, at the moment there is no policy, just a promise to develop a policy which will appeal to the populist instincts of the electorate. From a political point of view that can be a winning strategy, just so long as nobody has the hide to stand up and reveal that the emperor is wearing no clothes, and that’s only a matter of time.

Right now it appears as if peace has broken out within the coalition parties. But beneath the surface, divisions remain. Tony Abbott’s plan depends upon being able to please both the climate change believers and the skeptics in his own party with a yet to be devised policy which cuts emissions without affecting the economy. Whether you call it a paradox or a magic pudding, it is an illusion which cannot be sustained for any length of time, which is why Tony Abbott may be more likely to go down in history as political roadkill than as a genius.

Tuesday, December 8, 2009

Agreement To Make An Agreement Delays Health Reform

Two years ago, Kevin Rudd and the Labor Party were elected to government after a campaign which promised two major reforms. One was the end of Work Choices. The other was health and hospitals. Specifically, Kevin Rudd promised that he would end the so called “blame game” and that the buck would stop with him. He promised that the States would be held accountable and that if they failed to deliver improved health care he would bring about a federal takeover of the hospital system. He set a clear deadline for that to happen. That deadline came and went on the 30th of June this year.

Progress has been made, with increased funding arrangements and the landmark inquiry by the National Health and Hospitals Reform Commission, but so far there has been no attempt to address the structural reform needed to make the system fair, efficient and sustainable. In the light of that election promise two years ago, expectations were high that yesterday’s Council Of Australian Governments meeting would result in a significant step forward towards that reform. Instead, what we got from that meeting was an agreement to make an agreement next year.

This has led to widespread condemnation form doctors, nurses, and the community. Why the wait? Don’t we have the Reform Commission recommendations? Haven’t the politicians had enough time to formulate a plan? The opposition has accused him of being a bureaucrat who makes promises, establishes inquiries and committees, but never actually does anything. It certainly seems as if Kevin Rudd is a politician who is very good at delivering the grand symbolic gesture, signing the redundant Kyoto Protocol, and making the apologies to the stolen generations and the forgotten Australians, but it seems actually doing something is a bit more of a challenge.

The Prime Minister insists that it is important for the government to “get it right”. While that’s true, haven’t we already been patient? The inquiry is over, the report has been completed, the doctors and nurses, not to mention the patients, deserve to know what’s going to happen. And while we are all waiting, the system continues to struggle and deteriorate, prompting questions of how much longer it can last without suffering a major failure. Prue Power of the Australian Healthcare and Hospitals Association described the hospital system as being in a holding pattern and said, “If the government is not careful, the plane may run out of fuel before it has a chance to land safely."

One possible explanation for the delay is the timing of elections. The next federal election is due at the end of next year, and some other State elections are also on the way. Could it be that that the Prime Minister and his Labor Premier colleagues are staging this process to deliver a favourable outcome at just the right time to make them look good going into an election campaign? That might appear to be a very cynical question to ask, but it would be far more cynical if the answer turned out to be “yes”.

Monday, December 7, 2009

Climate Change Leaves Abbott On Thin Ice

The change of leadership in the federal Liberal Party seems to have given them a lift in the opinion polls, boosting them from abysmal to simply miserable, with the latest Newspoll showing the Labor government remaining well ahead on the two party preferred figures of 56% to 44%. Nevertheless, Tony Abbott has struck a chord among some voters and his own rating as preferred Prime Minister is now 23% compared to Malcolm Turnbull’s 14% in the previous poll. He appears to have made this difference by establishing a clear distinction between his policy and that of the government by rejecting Mr. Turnbull’s bipartisan support for the amended Emissions Trading Scheme. But don’t for one moment believe that the internal division within the Liberal Party is over. It is not.

Malcolm Turnbull has made a very public and a very scathing assessment of the new leader’s new policy. To be completely blunt he described it as “bullshit”. Mr. Turnbull claims that the Liberal Party is now led by people who believe that climate change does not exist and there is no need to do anything about it. In fact, the new opposition leader doesn’t even have a climate change policy yet. All he has so far is a policy to have a policy, which does not include either an emissions trading scheme or a carbon tax, by the time parliament resumes in February. He has a position driven by politics, not policy, and as a result has left himself and the opposition he now leads at risk of losing any semblance of credibility.

Tony Abbott has indicated that his yet to be devised policy will be based around emissions mitigation measures such as regulatory controls on emitters, land management reform, and bio-sequestration, all without a tax or a trading scheme. All of these proposed measures are good sound ideas and should be included in any climate change program, but relying in these ideas alone ignores, or misrepresents, some important realities. None of these measures can be implemented without some kind of cost, and the Shadow Treasurer Joe Hockey is reported to have estimated the cost at around $50 billion. That money would have to come from somewhere, and if it isn’t from a tax then it will be from higher consumer prices.

The other important matter which is carelessly brushed aside by Tony Abbott’s policy to come up with a policy is the simple fact that he has apparently ignored that research done by his own party. In opposing any form of Emissions Trading Scheme at all, Mr. Abbott has not only overturned the policy of Malcolm Turnbull, but he has ignored everything that went before it. In 2007, the taskforce set up by Prime Minister John Howard came to the conclusion that the most cost effective way to address climate change is a choice between an emissions trading scheme and a carbon tax. And yet, Mr. Abbott has rejected both. Was John Howard wrong?

Malcolm Turnbull has already indicated that he will vote in favour of the government’s emissions trading scheme legislation when it returns to the parliament in February. Don’t forget that he lost the leadership by just one vote in the most volatile circumstances, and that many of his colleagues share his views. The leadership battle might be over, but if Tony Abbott’s promised climate change policy turns out to be anything less than miraculous the internal instability will remain. The ice beneath Mr. Abbott’s feet is already showing cracks… and that really is a direct result of climate change.

Friday, December 4, 2009

The Puppet Premier

I am reminded of the scene at the end of the original version of "The Planet Of The Apes” when Charlton Heston stood on the beach staring at the wreckage of the Statue of Liberty, saying something like “We finally really did it…. You maniacs! You blew it up! Ah, damn you! God damn you all to hell!” That’s the moment when he realizes that mankind has caused its own destruction, and that there is no salvation at hand.

Now, instead of the Statue of Liberty, think of the state of New South Wales and in particular the Labor government. If there was any lingering doubt before, this is the moment when we should all be standing on the beach witnessing the wreckage, realizing that there is utterly no hope of salvation until this government is gone. This is the moment which proves beyond any doubt that the New South Wales Labor party has become so introspective that they have completely abandoned the people they are supposed to serve.

Time and again successive Premiers have promised to lift the game of the government. They have promised to deliver improvements to hospitals, public transport and infrastructure, announcing plans only to have them overturned by the next candidate to blow in through the revolving door of the Premier’s office. It has become so bad that they aren’t even in office long enough to keep the seat warm for the next sacrificial victim.

This is not a judgment of Kristina Keneally, nor of her abilities or otherwise, but a judgment of the party itself and its record in office. It may yet turn out that Ms Keneally is the best thing since sliced bread, but sadly I fear that even if she is she would only suffer the same fate as her predecessors. Nathan Rees had the audacity to attempt to assert his authority as leader and now serves as an example to all who follow. The lesson is that the real power resides elsewhere, starkly illustrating Mr. Rees claim that whoever succeeded him would be a puppet Premier.

Every time there has been leadership speculation over the past couple of years I have expressed the opinion that the only thing a change of leader would achieve would be the creation of yet another ex Premier. That is exactly what has just happened, and I see no reason to believe that the government’s chances of re-election have improved in any way at all. In fact, quite the opposite, as I believe that Nathan Rees was actually starting to win some admirers for standing up to the bully boys who have been hiding in the shadows pulling the strings.

The tragedy is that things such as the public transport blueprint are likely to be delayed yet again as a new Premier announces more new plans, even though the old ones have never been delivered. Public hospitals are still crying out for more money and resources, schools are still waiting for their maintenance and repairs to be done, and Rome is still burning while the fiddling goes on. It has been suggested that some members of the Labor government have given up all hope of being re-elected and instead have opted to extract revenge on Nathan Rees while they still can. That in itself is a damning indictment of both the government and the individuals who run it, illustrating just how little they care about actually doing the job they were supposed to be elected to do.

Thursday, December 3, 2009

Tony Abbott’s Work Choices

Well, that didn’t take long. Just two days on the job and already Tony Abbott is promising to bring back work choices. Although he refuses to use the phrase, and insists that he is not returning to the full catalog of elements which comprised the failed policy, he has indicated an enthusiasm for restoring individual workplace contracts. It is these contracts which formed the central plank of work choices, and which were the instrument by which rights and conditions were removed form workers whether they liked it or not. No matter whether they are called Australian Workplace Agreements or any other name, it was these individual contracts that were rejected by the people of Australia at the last election.

Mr. Abbott is quoted on the front page of the Herald as saying “Our policy will be to have freer, more flexible and fair labour markets without going anywhere near that dreaded policy that must not speak its name.” But he also made it clear that such a policy includes a place for individual workplace contracts, so what exactly is he talking about? Individual contracts can be appropriate in the case of individuals who command negotiating power because they have a specialist skill or a unique talent. Bert Newton for example might have a contract with Channel Nine because he is a unique talent and there is only one Bert Newton. He cannot simply be replaced by another person playing the part of Bert Newton.

The same can be said for high value individuals who have specific skills or abilities, such as a specialist engineer or a technical expert, where having the right individual for the job makes a material difference to the results. However, the same cannot be said for process workers, fruit pickers, sales clerks, construction workers and so on. In those cases, if one individual leaves, another is found to replace him to perform essentially the same function. The distinction is that the position is defined by the work performed, not by the individual performing it. In such circumstances, it is only fair and reasonable to have a standard minimum set of pay and conditions, which apply no matter who fills the position.

This truth is reflected by the reality that so called individual workplace contracts are in most cases not individual at all. It would be an enormous waste of time and resources for a company with 2000 employees all doing the same job to sit down and negotiate unique individual contracts with every single one of them. Instead, a template contract is drawn up and presented to all of the employees, whose only choice in the matter is to either sign up or not have a job. Far from offering choices, such agreements reduce an individual worker’s choices, along with his bargaining power.

When Tony Abbott talks about flexibility in the labour market, just ask yourself “flexible for whom?” Obviously the ability to unilaterally reduce pay and remove conditions is more flexible for the employer, but it offers no flexibility for the employee, along with no security, and no choice. It’s a one way street that reloads the power balance to favour the big corporate entity against the insignificant individual deprived of the assistance of that other corporate entity, a union. Make no mistake. When Tony Abbott is talking about restoring individual contracts he is talking about returning to work choices, no matter what name he wants to give it.

Wednesday, December 2, 2009

Tony Abbott’s Great Gamble

So, what now? After all of the huffing and puffing, it’s all over for the government’s hope to have legislation for its emissions trading scheme in place before the end of the parliamentary year, and more importantly, before the Copenhagen summit starting on Monday. It has been an extraordinary period of unprecedented political upheaval, not for the government, but for the opposition, culminating in this week’s dramatic change of leadership. But now that the vote has finally been taken and the dust will slowly begin to settle the question will inevitably arise: what now?

Despite the noise made by the rowdy band of climate change skeptics, the fact remains that mainstream opinion continues to recognize the need to take action to reduce emissions. That recognition exists on both sides of politics, with Tony Abbott explicitly saying that the coalition remains committed to emissions reduction targets, and will present what he calls an effective policy on climate change. That means that far from being dead, the emissions trading scheme is still the most likely means by which climate change will be addressed.

While Tony Abbott has reached the leadership of his party with the support of those who believe that there is no need to do anything about climate change, he cannot afford to deliver a do nothing policy. Instead, he must devise a policy which meets the emission reduction targets that he has already agreed to, provides industry with certainty for their investment decisions going forward, and is somehow different from the scheme that he has just torpedoed, which was after all negotiated by the coalition just days ago.

The magnitude of the challenge is illustrated by the real risk that he may have already shot down the best deal that he is ever going to get. Weeks of negotiation by Ian McFarlane achieved billions of dollars worth of concessions from the government to the point where a significant number of Liberal members were prepared to support it. More importantly, support from the business community was also strong because of the concessions made and the certainty of having a plan locked in. All that is gone now, and it remains to be seen if Tony Abbott can come up with a better deal that will satisfy business, environmentalists, and the public.

The chances are that the government will deliver an emissions trading scheme with or without the opposition. That could happen either through a double dissolution election, a deal with the Greens, an increased majority at a general election, or even through another leadership change in the Liberal Party. Tony Abbott is gambling instead that he can take climate change as an issue to an election and win. If he is going to have any hope of achieving that he is going to have to come up with an amazing policy.

Tuesday, December 1, 2009

One Vote Does Make A Difference

Caesar is dead, long live Caesar. Malcolm Turnbull’s reign as Liberal Party leader has come to an end in a stunning and dramatic spectacle in keeping with his meteoric rise. Elected to Parliament in 2004, Minister for the Environment in 2007, Shadow Treasurer that same year, and Leader of the Opposition in 2008. Now, after not quite fifteen months as Leader, the express train of Malcolm Turnbull’s political career has been derailed in unprecedented circumstances.

Never before has there been such deep division within the Liberal Party. There may have been extraordinary rivalries in the past, such as that between Andrew Peacock and John Howard, but this time the divisions have been driven as much by principle as by personality. Never before has a leadership contest played out in such a manner with a result just one vote the difference, one vote informal and one member absent for medical reasons. The tiniest of variations could have caused the greatest of differences in the outcome.

With just one vote the difference, not only has the leadership of the Liberal Party been decided, but so too has the fate of the government’s Emissions Trading Scheme legislation. With just one vote the difference, the entire future history of our country has been rewritten. With just one vote the difference, Australia will go to Copenhagen without a Climate Change policy in place, and Australian industry can no longer make investment decisions with any certainty of how their plans might be affected.

It would not be in character for Malcolm Turnbull to slink away with his tail between his legs. In fact, having staked his career on his convictions and his principles, rather than caving in to pressure from his critics, he can hold his head high. But it remains to be seen if he will have the interest or even the patience to wait in the wilderness of the backbench for another chance to become Leader. It may be that he has already achieved everything he set out to in the corporate world and is happy to remain in politics for the rest of his days, but that just doesn’t sound like him. My guess is that he will leave the Parliament at the next election, looking for a new dominion to conquer.

As for the Liberal Party, the page has been wiped blank. The reset button has been pushed. Everything is back to square one. Tony Abbott has already made clear his course of action on the Emissions Trading Scheme, but everything else is also up for grabs. Some have seen this result as a move back towards the so called hard right approach of the Howard era, and it is true that Tony Abbott was an instrumental part of that regime. Whether this means we should expect a return to a hard line on such things as industrial relations and immigration policies only time will tell. But one thing is certain: the direction of the Liberal Party has taken a sharp turn today and as a result the shape of any future Liberal Government has been altered.

Don’t ever let anybody tell you that one single vote can’t make a difference.

Monday, November 30, 2009

No Winners In Liberal Leadership Battle

No matter which way you look at it, the clock is ticking on Malcolm Turnbull’s leadership of the Liberal Party. It remains to be seen whether or not Joe Hockey will be convinced he should contest the leadership at 9am tomorrow, but if he doesn’t Tony Abbott most certainly will. At last weeks party meeting when Kevin Andrews mounted his tilt at the leadership, there were 35 members ready to dump Malcolm Turnbull then and there. How many more will there be tomorrow when either Tony Abbott or Joe Hockey is the candidate can only be guessed, but the indications are that it will be more than enough.

Of course, it is always possible that Malcolm Turnbull could stare down his opponents and somehow survive the challenge. But even if he could manage that apparent miracle, surely the dramatic divisions of the past week have left him in an untenable position, unable to command clear support among his own colleagues. Of course, the responsibility for that state of affairs lies not with the leader but with those who refused to follow, but it’s a moot point because the effect is the same. A leader without sufficient followers cannot continue to be the leader, so even if Mr. Turnbull wins the day tomorrow, it can only be a matter of time before there is a fresh challenge.

Those who are behind the plot to remove Malcolm Turnbull seem to have decided that they want Joe Hockey to become leader, even though he has so far remained loyal to Mr. Turnbull. If Mr. Hockey gives in to that pressure and puts himself forward, there is little doubt that he will become the new Leader. In doing so, he will have to bring himself to do three things. One, betray his pledge of loyalty to the current leader. Two, go back on his word to support the negotiated amendments to the emissions trading legislation. And three, take an enormous gamble on his own political career by accepting the poison chalice of leadership at a time when an election victory is almost impossible, whereas refusing the opportunity now and remaining loyal would actually reinforce his claim to be the heir apparent further down the line.

If Joe Hockey decides that he does not want to contest the leadership now, that will leave Tony Abbott to challenge Mr. Turnbull. Although support for Mr. Abbott is probably not as strong as for Mr. Hockey, he is still likely to win and become the new Leader. In either case, whichever of the two is the new leader, the opposition will vote against the emissions trading scheme in the Senate, delaying its introduction and possibly triggering an early election which neither Tony Abbott nor Joe Hockey can win. In the end, whether there is a double dissolution election or not, the government will pass an emissions trading scheme, possibly with the help of the Greens. For that to happen, the scheme will have to be a lot more aggressive than the current proposal, and you would think that is the last thing the Liberals would want.

If Malcolm Turnbull had had his way, the emissions trading scheme would have passed as amended and would no longer be an issue, leaving him free to fight the government on his own terms. Instead he has been forced into fighting his own party members. The irony is that his opponents are not only destroying his leadership, they are also destroying the credibility of the party. If there was something to be gained it would all make some kind of sense, but the truth is that there is nothing to be gained for the Liberals in any of this sad sorry mess. Just as the climate skeptics insist that the emissions trading scheme will wreck the economy for no perceptible benefit to the environment, the same skeptics are wrecking the Liberal Party for no perceptible political benefit.

No matter who is the Leader after Tuesday morning, he will be presiding over the wreckage of a party that will not be elected to government anytime soon.

Friday, November 27, 2009

Perhaps Malcolm Should Practice His Diplomacy

It has been described as a Liberal Party meltdown. A dozen senior party members have resigned their front bench positions. Tony Abbott has launched a leadership challenge with the support of senior colleagues such as Nick Minchin and Eric Abetz, and it now appears that all of them are prepared to swing their support around to Joe Hockey as a consensus candidate should he be prepared to put his hand up. Malcolm Turnbull has vowed to remain leader until such time as his party removes him, while his deputy has denied reports that she has tapped him on the proverbial shoulder and told him to step down. Could it possibly be any more dramatic?

Well, yes it could, because if a change of leadership takes place before the Senate gets to vote on the proposed emissions trading scheme then the deal brokered by Ian McFarlane with Climate Change Minister Penny Wong will be dead in the water and the legislation will be rejected. That’s when things could become really dramatic. It would be the second rejection of the bill and therefore a trigger for a double dissolution election. Of course it would be up to the Prime Minister to decide whether or not to pull that trigger, but under the circumstances that might well be seen as a very tempting option.

In that case, the government could be expected to win the election, and a joint sitting of both houses of the parliament could be expected to pass the legislation. The catch for Kevin Rudd though is that he will miss his self imposed deadline for passing the legislation before the Copenhagen climate summit in December. It is now four weeks to Christmas and there is no way to fit in an election before then, and absolutely no chance that any politician would ever call an election for Boxing Day. Even a January election date would be highly unusual, so the chances are that any double dissolution would be in February at the earliest.

But having missed the Copenhagen deadline, and with the scheduled date for a normal election rapidly approaching, the case for having a double dissolution election in February is debatable. Either way, it appears that the Rudd government Emissions Trading Scheme is not going to be passed on time, and that means that the whole question of Climate Change Policy will be a central election issue, whenever the election might be held. That is, unless Malcolm Turnbull somehow manages to hang on to his leadership, regain control of his party, and deliver the passage of the legislation in the Senate. Now that would be a miracle.

Unfortunately, Mr. Turnbull appears to be in a no win situation. Even if he survives the present leadership challenge, the substantial lack of support exhibited by such a large chunk of his party means that it is very difficult to see his leadership regaining legitimacy. There are 35 Liberals who wanted to dump him on Wednesday, and at least a dozen who should resign from the party if they fail to dump him now, because they can no longer coexist. Of course, they won’t do that. Instead they will lie in wait for their next opportunity to challenge again. In some respects it is kinder for Malcolm Turnbull to be put out of his misery now.

He shouldn’t worry too greatly however. With Kevin Rudd’s habit of finding jobs for former Liberal politicians, I’m sure Mr. Turnbull can look forward to a plum posting in the diplomatic service. If only he could learn to be a bit more, well… diplomatic.

Thursday, November 26, 2009

Saving Lives Should Be More Important Than Saving Money

It’s hard to believe that it has happened again. After all of the promises that the system would be fixed, that procedures would change, that people would be better trained, a 000 operator this week has hung up on a caller because he could not provide a street address. After so many failures in the past, and especially the tragedy which saw 17 year old David Iredale die alone in the wilderness, the people of New South Wales were promised that the lessons would be learned. Obviously, they haven’t been.

On Monday this week, Stuart Jamieson called 000 from a remote property near Moree because his friend had become seriously unwell working in the extreme heat. Following the prepared script for the standard procedure, the operator asked for the address. When told that the property does not have a street number, the operator apparently insisted that “every house in Australia has a street number”, and ended the call. She hung up. She did not send an ambulance. Fortunately, Mr. Jamieson was eventually able to get help from paramedics from Goondiwindi, across the border in Queensland.

It’s obvious that there are shortcomings in having all emergency calls taken in a centralized call centre which is hundreds of kilometers away. Operators have no local knowledge, leading to mistakes where ambulances have been sent to the wrong town because of similar sounding names. There are shortcomings in having operators follow an inflexible script on a computer screen in front of them which depends on a street address, but allows for no variation in unusual circumstances. But the most astounding shortcoming of all is that apparent inability of some people to make a common sense judgment call, and make a decision without a computer program telling them what to do.

What has happened to people? Why are some of them so stupid? And why are they getting jobs where they have life and death responsibilities? Surely any reasonably sane and sensible person would realize that just because a street address can’t be located doesn’t mean you can pretend the person in distress doesn’t exist, or doesn’t matter. Surely any reasonable person would know that if the system isn’t able to deal with a problem then it’s time to exercise the one thing that makes human beings better than machines: the ability to think for ourselves. Or, have we somehow created a generation of people who no longer have that ability, who are stupid, or who simply just don’t care?

I suspect that the whole debacle is based on the stupendously stupid notion of economic rationalism, where the cheapest option is always seen as the most cost efficient. It’s cheaper to answer all emergency calls at a centralized location so therefore it must be better. It’s cheaper to employ people who cannot think for themselves so therefore it must be better. It’s cheaper to accept criticism for sometimes getting it wrong than it is to strive to always get it right. The trouble is that it’s just not true. It is a belief which is based on the false assumption that saving money is more important than the quality of the outcome, and in this case the outcome is whether or not we save lives.

Wednesday, November 25, 2009

CPRS Is Not The End Of The World

The Telegraph today has run a front page story telling us that the proposed Carbon Pollution Reduction Scheme will cost us all $1100 per year in increased living expenses. According to the Telegraph, electricity will increase in price by more than 20% by 2012, while grocery prices are expected to rise by 5%. Gas and other fuels will also increase in price, although the impact on the price of petrol will be softened by a reduction in excise. Altogether, there is no doubt that things generally will cost more. But is that really any surprise?

The whole point of manipulating the price of anything in this fashion is to influence behavior. In this case, the idea is to change the nature of the entire economy, encouraging a move away from activity which is emissions intensive towards the so called “low carbon” economy. In that respect, a scheme which did not make such things as coal fired electricity more expensive would simply be a waste of time. In fact, the concessions already given to emissions intensive trade exposed industries have been criticized by climate crusaders for that very reason.

So why go to all the trouble of changing people’s behavior and shifting the focus of the economy? It certainly seems to be a lot of expense and trouble to go to, so there must be a motivation for doing so, especially when it involves added expense and inconvenience. What we have been told is that the cost of doing nothing would actually be greater. What we have been told is that paying a little more now will save us all from a much worse cost as time goes by. Although the emissions trading scheme might well increase our cost of living by $1100 a year, we are told that not having such a scheme will cost us all a great deal more.

But how are we to know if that’s right when it seems there is no shortage of sceptics, some of them with impressive scientific credentials, who are prepared to say that the science is wrong, or that emissions trading won’t make a difference, or that the whole thing is a massive fraud to cover up the redistribution of the world’s wealth? There’s no shortage of conspiracy theories, ranging from the downright whacky, right through to ideas that sound pretty reasonable, such as the view that climate change is occurring naturally and anything we as human beings do is insignificant and potentially futile. It can be tempting to throw up the hands and plead that it is all too hard, and simply give up.

Unfortunately, the truth is that the bulk of credible scientific opinion is that climate change is real, that human activity is having an impact, and that if we don’t do something to change our behavior it will only get worse. It is true that the cost of living will go up, but it always goes up anyway, and if the climate crusaders are even halfway right it’s a small price to pay to prevent a far greater cost. But it is also true that there will be money to be made from not just emissions trading, but from renewable energy technologies, ecologically friendly manufacturing, and a whole range of new opportunities. Money is made from economic activity, and nothing generates more activity than large scale change.

Yes, change of such magnitude also inevitably brings dislocation and displacement, which means that there will be winners and losers. Some people will be better off, and others will be worse off. The challenge for any government presiding over such a change is to provide assistance for those who are left worse off, to compensate them if necessary, and to help them to find their way to the new opportunities which will be created. But the bottom line is that just because the price of electricity is going to go up doesn’t mean that it’s the end of the world. In fact, it could be said the end of the world, at least as we know it, is precisely what this is supposed to prevent.

Tuesday, November 24, 2009

Financial Services Reform Must Remove Conflict Of Interest

Amidst all of the attention on the proposed carbon pollution reduction scheme, the report by the parliamentary committee examining the collapse of Storm Financial has been overshadowed. That’s unfortunate because there are significant issues arising from the report, and the events with which it deals, which deserve some attention. While the emissions trading scheme will have an effect on all of us and the way we live our lives, the way that the financial services industry does business also directly affects everybody who has investments. And thanks to compulsory super, that means pretty much all of us.

One of the central concerns of the report was expected to be commissions paid to financial advisers by the originators of investment products. Such commissions could be reasonably presumed to have some influence over which financial products an advisor might recommend, rather than simply considering the best interests of the investor. The simple solution would be to abolish the commissions altogether and replace them with a fee for service model, where the customer might perhaps pay an hourly rate for advice, rather like a lawyer or an accountant. The committee however did not make that recommendation.

Instead, while calling for an examination of possible alternative methods of payment, the committee recommended the creation of a fiduciary duty for financial advisors, which would legally require them to place the interests of their clients first. It also recommended that a professional standards board and a compensation scheme should both be established to help protect the best interests of investors. But as long as financial advisors are being paid by the companies which provide the investment products there will continue to exist the potential for a conflict of interest.

The fact is that many people who are employed as so called financial advisors are really just salesmen for the products that they recommend. They are primarily answerable to the companies that pay them, as any other employee would be. Even if they believe that a product is not necessarily the best choice for their client, they remain under pressure to recommend it anyway. Many finance professionals in such a position would welcome the clarity provided by a legal obligation to put the customer’s financial best interests first.

There are also broader questions about the impact of trailing commissions and management fees on the long term value of investments. That is something which directly impacts all of us through our superannuation, and over the lifetime of our investment can make a dramatic difference to the final result. That question is subject to another review currently under way, but until there is fundamental change in the way investment services are sold, the best interests of the customer will continue to come second.

Monday, November 23, 2009

The User Has Already Paid

When the expression “user pays” was first coming into frequent usage some years ago, I took exception and complained at every opportunity that the user has already paid, and that such fees and charges amount to double dipping. The rot began to creep in with an ever expanding range of government charges for things which we had previously been able to take for granted. We all pay our taxes, both direct and indirect, to state and federal governments, as well as hefty local government rates and charges. And yet we were still expected to dip our hands into our pockets and come up with even more spare change to pay ever increasing “user pays” charges.

Such rip-offs range in size from a few dollars for tolls on roads which should have been paid for by registration fees and fuel taxes, through to developer levies adding up to six figure sums to pay for utilities infrastructure which was supposed to be paid for out of our rates money. But even the small charges of a few dollars here and a few more there quickly add up to amounts which severely dent the family budget. Just ask the people who are spending a hundred dollars a week or more for the privilege of driving their car to work and parking it in the city. Never mind that they have no choice because the public transport is either inadequate or nonexistent.

Of course, it wasn’t long before private enterprise realized that governments were onto something here, and were sucking copious amounts of cash out of the pockets of ordinary everyday people who are left with no choice but to pay up. Banks began introducing fees for customers who had the audacity to keep an account with them, another fee for daring to withdraw their own money, and then fees for closing accounts, changing accounts, or for even receiving a printed statement. Once it became obvious that the banks were getting away with robbery, it wasn’t long before other corporations followed suit, culminating recently in the outrageous demand by Telstra that customers who want to pay their bill should also pay a fee for doing so.

Now, the latest attack on the financial health of average everyday Australians has come from the real estate rentals racket, er sorry industry. It seems that estate agents are engaging third party operators to collect rent from their tenants, which is all very well, but it’s the tenants who are expected to pay a fee for this so called service. The fact of the matter is that the tenants have an obligation to pay the amount of their rent, no more and no less. They should have the right to pay in cash, by cheque, by bank deposit, or any means of legal tender. If the landlord, or the landlord’s agent wishes to engage a rent collector, that is their responsibility.

Even if you accept the obnoxious concept of “user pays”, this practice is still repugnant. It is the agency, not the tenant, who enjoys all of the benefits of such an arrangement. The agency can operate a cashless office, employ fewer staff, and generally reduce overheads. It is the agency who is the “user” in this case, not the tenant, and so the agency should pay for the service provided by any such third party operator. Efforts to coerce the tenant to pay this ridiculous fee are simply wrong, and should be illegal.

The good news is that there are some encouraging signs that the tide is turning. We have seen the banks begin to wind back some of their fees, and we should encourage them to do more in that respect. We have seen Telstra respond to customer pressure and abolish its stupid and insulting fee for payment of you bill. And it appears that the New South Wales government is likely to deal with this obscene rent collection fee in next year’s revision of tenancy law. But there is a long way still to go to undo the damage of unfair “user pays” fees and charges, and the only way to beat them is to keep on refusing to be treated like mugs.

Friday, November 20, 2009

Raising The Drinking Age Is Not The Solution

Rising concerns about the prevalence of binge drinking, and the associated incidence of offensive, abusive and violent behavior, have led to renewed debate about the regulation of alcohol in our society. This week, the Police Commissioners of the nation have joined together to launch “Operation Unite” cracking down on bad behavior, while renewing calls for changes to the law. Health authorities are also calling for changes, with one prominent expert, Professor Ian Hickey proposing that the legal drinking age should increase to nineteen.

While there is growing evidence that exposure to alcohol at an early age has significant consequences in terms of brain development, that’s not really an issue by the time a person is eighteen. By that age it would seem that the issue is more related to people’s propensity to engage in risky activity such as drink driving, getting into fights, or simply having physical accidents because they are drunk. As for becoming violent and abusive while under the influence, older people can be just as badly behaved.

It is clear that there is a problem with alcohol related violence, and it should be recognized that there is a range of contributing factors. While age might be one of them, other factors include an apparent increase in belligerence in society in general, a decline in respect for authority, increased opportunity through longer alcohol trading hours, and a decline in personal responsibility. For some people, it seems that everything is someone else’s fault, and instead of minding their own behavior they become arbiters of everybody else’s behavior. If someone is seen to step out of line, they take it upon themselves to punish that person, whether verbally or otherwise. Add alcohol and the confrontation is magnified out of all proportion.

This is supposed to be a free society, and as such we should be able to enjoy our freedom to go where we please, as we please. But that freedom comes with a responsibility to respect each other, and to be courteous and well behaved. That respect comes along with people taking responsibility for their own behavior, choosing not to take offense at others, choosing not to be belligerent, and choosing to drink at safe and responsible levels.

I don’t believe that simply being intoxicated should be illegal. That’s a personal choice, regardless of whether it is good or bad for your health. But being abusive and violent is already illegal, and if getting drunk makes you abusive or violent then you should not be surprised if you wind up in trouble with the law. That’s personal responsibility. There is a good argument for regulating trading hours as a means of discouraging people from becoming a nuisance in the early hours of the morning. There is also a good argument for regulating advertising, and for running education campaigns to change people’s attitudes.

But raising the legal drinking age is not a practical solution. It might reduce the total number of 18 year old drinkers, but those who do still drink would now be doing so illegally and would therefore increase the underage drinking problem. The likelihood of risky behavior among those people would also increase. But most importantly, it removes personal responsibility rather than fostering or encouraging it. It penalizes all 18 year olds who do drink responsibly, and punishes them for the actions of those who are irresponsible. At the age of 18 people can vote, get married, go to war and die for their country, and are expected to be responsible for their own actions in every respect. So if they are expected to be responsible adults, they should be allowed the opportunity to prove it.

Thursday, November 19, 2009

Police Need Better Support For Dealing With Mentally Ill People

There is no doubt that the death of Adam Salter is a tragedy. But it seems to have an even greater poignancy when you consider that the Adam’s father called 000 because he needed help. 36 year old Adam was apparently suffering from mental health problems and was stabbing himself with a kitchen knife. When paramedics and police arrived they tried to assist him, but Adam is reported to have leapt to his feet and lunged with the knife at the police officers. One of them made what has been described as a spit second decision to draw her gun and shot Adam in the shoulder. Adam later died in hospital.

At this point it is unclear whether he died from the gunshot or from the knife wounds he inflicted upon himself. Either way however, questions are now being asked about why the police officer used her pistol when she was also carrying a taser. There are also questions about the training and procedures given to police for dealing with such confrontations, because in the heat of the moment a police officer’s actions and reactions are usually the result of the training they have been given. There just isn’t the luxury of taking a moment to stop and think about things before making a life and death decision.

This is a crucial question, not only because of the potentially devastating outcomes of hostile confrontations, but more importantly because of the changing nature of the situations police are asked to deal with. We probably think of police spending most of their time dealing with hardened criminals, and when we think of police using lethal force we might imagine that it’s like the shows we see on TV featuring gun battles with bad guys who must be stopped. But the truth is that more and more violent confrontations involve people who are not necessarily criminals, but are in mental distress. They need help and support, not lethal force.

So the question is whether our police are being given the right training, equipment and support to deal with the growing problem of mentally disturbed people who find themselves in great distress. Do they have the tools that they need to deal with such complex and challenging situations? Or is their training focused more around dealing with the sort of criminals which exist in our traditional idea of police work? Are police trained to reach for the pistol, even in situations where the pistol may not be the best solution?

These questions are of great importance, not only for the benefit of poor unfortunate people who might find themselves looking down the barrel of a police officer’s pistol, but also for the benefit of the police themselves. Although police officers should not be expected to take the place of mental health professionals, they are so often the first on the scene when somebody is in a mentally distressed state. We owe it to our police, who do put their lives on the line for our safety, to give them the best possible training, so that they are properly equipped to deal with such situations.

Wednesday, November 18, 2009

Sport Report Recommends Robbing The Poor To Give To The Rich

The release of the Crawford Report into sports funding has unleashed a flurry of controversy, debate, and downright fury. The reason for this is the central recommendation that money currently spent on Olympic sports, such as canoeing and archery, should be redirected into popular professional sports, such as AFL, rugby league, cricket and so on. It seems that the panel in charge of the report is unable to see any value in the Olympic Games, and instead want to direct funding into sports which are already so well funded through corporate sponsorship and broadcast rights as to be not only self sustaining, but highly profitable businesses in their own right. It’s as if the report has been complied by bean counters instead of sportspeople.

The report suggests that money should be directed into sports which are more in tune with the national psyche, while at the same time it states that the public should be re-educated as to what constitutes Olympic success. That’s not only a contradiction in terms, it’s insulting to the Australian people. On the one hand it suggests that sports funding should reflect what people think and feel, and on the other hand it says that people should be told what to think and feel. The fact is that the Australian people already know what they think and feel, and they know what constitutes Olympic success. It’s winning medals. If you’re not winning medals then you cannot claim to be successful at the Olympics. There is no substitute for winning medals.

More importantly, a big part of the Australian psyche is reflected by the unexpected victory of the perceived underdog. Without government funding it is unlikely that we would have enjoyed the Olympic moments of magic delivered by Steven Bradbury, Tatiana Grigorieva, and even Cathy Freeman. But bean counters don’t understand moments of magic, they only look at spreadsheets and ledgers. That much is clear from another extraordinary assertion found in the report, which is that there is no evidence that high profile sporting events materially influence participation rates in sport. That is just utter nonsense. If that was true, then where did all of today’s competitors come from? What motivated and inspired them to pursue their sports? If there was nothing for them to aspire to, and no role models for them to admire, they would never have become the people they are now.

But removing support for Olympic sports such as archery and tae kwon do and redirecting that money into cricket and football makes no sense either. The big, popular, professional sports are already well supported. They attract corporate sponsorship, media money, and community support at every level. Some of the money that goes in at the top finds its way down to the junior development level. The avenues for pursuing success in those sports are well paved with dollars. Taking the money away from Olympic sports to put into mass market sports is basically stealing from the poor to give to the rich. The whole point of government support is to provide opportunities to the community which would not otherwise exist.

Unfortunately, the raw reaction to the silly ideas in this report has overshadowed any useful recommendations that it might contain. Among them are the suggestion to put sport and fitness back into education, and a call to boost community sport, including money for local sporting infrastructure. These are good ideas, but they are lost in the sea of noise created by the astoundingly dense suggestion that we can succeed at the Olympic Games without actually winning any medals. That makes about as much sense as making an omelette without any eggs.

Tuesday, November 17, 2009

Let ’Em In!

According to the Workplace Futures Report, Australia confronts a potential workforce shortfall of 1.4 million people by 2025. The report has been prepare by the Victorian Employers Chamber of Commerce and Industry, and is based on current trends of population growth, retirement rates and the ageing population. Even though population growth has been stronger than expected, with projections of 35 million people by mid century, it will still not be sufficient to support the even faster growing pool of ageing Australians. One or more of four things will need to happen to address the imbalance. Migration and birth rates will need to increase, the retirement age will have to be lifted, the participation rate will have to increase, and productivity will also have to increase.

While there is a great deal of concern in some quarters about rampaging hordes of boat people descending upon Australia, perhaps it is misdirected. It might be that instead of telling the boat people to go back to where they have come from, we should be encouraging more of them to come to Australia. After all, these are people who seek liberty and freedom and a better life, and who are prepared to go to great lengths to achieve those things. We need people like that in the workforce to continue driving the county’s prosperity, and to pay the income taxes which will pay for our pensions in retirement. At the same time, we should all do our part to keep the birth rate increasing so that there is a healthy mix of New Australians from both offspring and offshore, thus maintaining the character of Australian culture and traditions. Are there any volunteers?

Of course, there are many people who are concerned that Australia does not have the natural resources to sustain such a large total population. In particular, there are concerns about water supply and environmental degradation, but if increasing the population is not acceptable the alternative is for all of us to keep on working for longer. Without sufficient younger workers entering the workforce it will be necessary for the retirement age to be increased. In fact, the government has already taken steps in that direction with the plan to lift the pension age to 67 in the years ahead, but that alone won’t be enough. Unless the workforce is increased by other means it is likely that the pension age will rise further, perhaps to 70, in the not very distant future. Again, are there any volunteers?

Wait a minute. Do we really want to keep on working longer? What about all those other people who aren’t working full time, or even working at all? Can’t we get some of them back into the workforce? While there has been an increase in unemployment thanks to the Global Financial Crisis, that is only a temporary effect and the underlying shortage of people hasn’t changed. So that leaves the single parents, the stay at home spouses, the disabled pensioners, and delinquent teenagers who wag school. Surely there’s a way to put all of them to work and force them to make a contribution to the economy instead of sponging off welfare that this country can no longer afford. After all, why should I do all the work when my disabled cousin just sits around in a wheel chair all day?

While it may sound appealing to some to force welfare recipients into the workforce whether they are capable of working or not, it may not be a terribly practical solution. It may also be considered inhumane. But we are running out of options here, so what’s left. We’ve ruled out population growth because we don’t like immigrants and besides the environment can’t handle it. We’ve ruled out working till we drop dead because retirement is part of the great Australian dream, and it’s about the only time most of us will ever have the chance to drive a caravan around Australia. And we just don’t have the heart to turn disabled pensioners into slaves.

That leaves only one option. Productivity. Now that sounds like a great idea, and in some circumstances it actually is. For example, if new technology means that one person can now achieve the same output as ten people once did, that’s a good thing. It means we can all benefit from the substantial and real gain in productivity which promotes prosperity and a better way of life for all of us. Unfortunately, that’s usually not what the boffins mean when they are talking about productivity. Nine times out of ten what they really mean is the you and I have to work harder and faster to produce more and more using less and less materials and supplies, for lower and lower pay. That’s not the kind of productivity increase that is going to provide prosperity for all Australians, and I am not even going to ask if there are any volunteers.

So where does that leave us? After all that, maybe the population growth answer is the right choice after all. Maybe instead of trying to stop the boat people, we should be doing everything we can to help them get here safely. Of course my motives are selfish. I don’t really want to raise any more children, I don’t want to work past a decent retirement age, I don’t want to work harder for less, and I don’t want to be forced to work if I become disabled. And I could really use somebody to polish my shoes, clean my house, and pay for my pension, so I say let ’em in!

Monday, November 16, 2009

You Can’t Say Nathan Rees Didn’t Warn Us

You can’t say he didn’t warn us. From the beginning of his time as Premier, Nathan Rees has observed that he has been underestimated by people all of his life. It seems that his own Labor Party colleagues are the latest to fall for the trap, finding themselves stunned and amazed by his move at the Party Conference over the weekend to literally take command. Nobody expected it, and nobody was ready for it, so when Mr. Rees demanded the authority to appoint his own cabinet it was given to him. While there may have been those who went along with it because they felt that they had been snookered, I suspect that many rank and file party members might have been happy with the opportunity to allow their Parliamentary Leader to actually make leadership decisions.

This is a significant step, something which itself should not be underestimated. It overturns more than a century of Labor tradition, a tradition which in many ways is central to the Labor philosophy of consensus and compromise. But it also recognizes the reality that the old way has left the party struggling with the practicalities of modern politics, as well as leaving it mired in internal divisions when it needs to be focusing on external imperatives such as building infrastructure and fostering economic growth. For much of the current term this government has been seen as not only ineffective but also incompetent. It has developed a reputation for promising everything and delivering nothing.

As premier, Nathan Rees has had his fair share of stumbles. Most notably, the infamous mini budget of last year was tremendous misstep as it tightened fiscal policy to the detriment of economic growth, while abandoning the original Metro plan seemed to confirm that nothing the government promised could actually be counted upon. Nevertheless, as repeated reports emerged of internal plots to replace the Premier, Mr. Rees stood his ground time and time again. As more and more Ministers fell by the wayside through their own folly, such as the couch dancing Matt Brown, Mr. Rees stuck to his guns. As the opinion polls fell to near fatal levels, Mr. Rees has simply become even more determined.

I have said repeatedly that this government cannot survive the next election, and that changing the leader now would not make any difference. None of the likely contenders have shown anything to indicate that they would fare any better, and in many cases quite the opposite. If there is to be any hope at all for the government to reverse its fortunes before the next election it can only come from one thing. Leadership. And that is exactly what Nathan Rees has done on the weekend. He has made a decision, taken decisive action, and put his own position on the line, but done it in a cool calculated way which left his opponents little if any option.

There’s no need for the party to be looking for a leader… they already have one. The sad truth however is that the disaffected powerbrokers will most likely continue to conspire to replace the Premier. If and when they do, it will be clear that they do so out of personal motivation for revenge and power rather than any consideration for what’s in the best interests of the party, the government, or, most importantly, the people of New South Wales. Ultimately, that would be just one more indication that the party really doesn’t deserve to be in government at all. But if Nathan Rees can successfully keep the plotters and schemers at bay between now and then, perhaps it would also be a mistake to underestimate his chances of winning the election.

Friday, November 13, 2009

A Bully Is A Bully, Regardless Of Race Or Religion

The report that a year five student at Punchbowl primary school was abused by a group of Muslim children for eating a salami sandwich during Ramadan is enough to outrage anyone. Young Antonios Grigoriou was allegedly punched in the eye and kicked in the leg after a confrontation with students who demanded to know why he was eating ham in Ramadan, and told him that eating pig is disgusting. It is also claimed that this is not an isolated incident. Of course, this behavior is utterly unacceptable, from anybody regardless of race or religion.

First and foremost, this is a matter of bullying, something which is not new, and is not specific to any particular ethnic group, religion, or culture. Throughout history, there have been those who mistreat others who are different, or more vulnerable, or less powerful. Issues such as race and religion are often associated, but are not themselves necessarily the real driving force behind the bullying. Rather it is the fact that a perceived difference exists. Whether it is a difference of skin colour, personality, sexual orientation, socio-economic status, or anything else, it is the perceived difference which is the underlying factor, combined with a primitive desire for superiority.

Superiority is also to be found in numbers, so it’s no great surprise that people with similar ethnic, religious, or cultural backgrounds are likely to stick together. When they also share prejudice, intolerance, and a propensity for bullying, it follows that they will use the superiority of numbers to gang up on their victims, and become more bold in their actions. Inevitably, they will come to be identified by their ethnic or religious background, rather than by the actual behavior of bullying. The fact is that such behavior is not the monopoly of any one ethnic or religious group, but occurs in every society and every culture as an aspect of human nature.

When members of a minority ethnic group act in a racist manner it is sometimes called reverse racism. But there is nothing reverse about it. It is just plain racism, and in this case, if the allegations are true, those Muslim students have been racist. They have, allegedly, vilified and set upon another individual based on differences of race and religion. That’s no different from a situation where white Australians do the same to a Muslim person, a black person, an Asian person, or whatever example you care to choose.

The fact is that this alleged abuse did not happen because the perpetrators are Muslim. It happened because they are bullies. The same was true when the Skippies picked on the Wogs, when the Anglican kids beat up the Catholics, and when the big kids taunted the little kids. The only difference today is that every time a Muslim kid does something wrong, there’s no shortage of people ready to blame the religion rather than to blame the individual.

We claim to be a tolerant society, and by and large it is true. We say that Muslims are welcome so long as they too are tolerant, and do not impose their beliefs and standards upon everybody else. But when push comes to shove, and a small number of Muslims act in an intolerant manner, it seems that some of us are quick to blame all of them. In doing so we both insult all those Muslims who do behave in a peaceful and tolerant manner, as well as abandon our own commitment to tolerance and respect.