Friday, January 16, 2009

Employment Figures Point To New Challenges

This week’s unemployment figures are both better and worse than expected. Better, in the sense that the overall unemployment rate has increased only marginally from 4.4% to 4.5%, reflecting a net loss of about 1200 jobs in December. Worse, because the facts behind that figure paint a more disturbing picture. Almost 44 000 full time jobs vanished in December, while at the same time almost as many part time positions were added. It appears that more of the workforce is becoming casualised.

There could be a number of interpretations to explain this phenomenon. It could be that as the Global Financial Crisis pushes our economy closer to recession businesses are cutting hours instead of cutting jobs in an effort to minimize the damage. Or it could simply be an exaggeration of the seasonal effect of a surge of pre-Christmas part time jobs co-inciding with the sudden drop in full time employment. It could even be an extension of the long term trend of the casualisation of the workforce as businesses seek to place themselves to have some flexibility in the face of the oncoming challenges of both the looming recession, and the forthcoming changes to industrial relations law.

Whichever spin is put onto the figures though it still amounts to a strong warning of more difficult times ahead. If the first explanation is correct, the move to more part time jobs is just a precursor to further job cuts as the downturn becomes more severe. If the Christmas surge is the explanation the obvious trouble is that Christmas is now behind us and as the stock take sales wind down the retail sector is entering what is always its quietest period of the year. As for the flexibility argument, well that’s just another way of saying that cutting jobs is made easier.

At this time, business leaders are pushing for the Government to delay its Fair Work Australia bill because they say it could potentially add to unemployment. Business wants to keep wages growth low, and be free of unfair dismissal constraints or the imposition of increased union negotiating power. On the other hand, unions are insisting that the legislation should go ahead as soon as possible, arguing that wage claims and job protection are justified because every dollar in the pocket of working families is a dollar that will be circulated into the economy, helping to stave off recession.

Paradoxically, they are both right. The more workers have job security and wages growth, the better it will be for the economy. But at the same time, if individual businesses are suffering revenue loss in the economic downturn they simply cannot afford to pay higher wages without risking their own viability. It is a catch 22, but that is why the most important factor is the capacity for government to invest in economic stimulation.

Despite the ongoing argument about the ethics of taxpayers being forced to bail out a financial system which has been brought down by corporate greed, there really is no alternative. Not only Australia, but around the world the taxpayer funded bailout is the only way to cut the losses and help to restore prosperity. And if we are to be perfectly honest about it, the taxpayers are not entirely without blame for this mess. Governments around the world have presided over regulatory regimes which happily gave corporate pirates the tick of approval and allowed the whole sorry mess to happen in the first place.

That’s why government efforts to stimulate employment are not only essential, they are a moral obligation.

Thursday, January 15, 2009

The Iceberg Has Already Struck

The reports of a plot to overthrow New South Wales Premier Nathan Rees may or may not be true, but either way they are yet another indication of the desperation of the Labor Government. If true, such a plan is nothing more than the irrational death-throws of a government that is so far past its use-by date that it has become rancid. Even if it is not true, the fact that the story has had such an impact merely illustrates just how little credibility this government has.

Of course, it would be blatant act of desperation to unseat the Premier after such a short period of time. Nathan Rees was offered the job in the hope that he could undo the damage done under the leadership of Morris Iemma, and to some extent, Bob Carr. In the 132 day since then there has been no sign that anything has improved. More promises have been revoked, more health and hospital scandals have emerged, and more Ministers have been caught out misbehaving. The fact is that blaming Nathan Rees doesn’t address the real problem. The truth is that Nathan Rees could be the Messiah and he would still need more than two short years to turn the ship around.

The speculation has been that Frank Sartor would step in to take over, although other names have also been put forward, including Deputy Premier Carmel Tebbutt, Planning Minister Kristina Keneally, and recently appointed MLC John Robertson. Mr. Sartor has been put forward because although many people do not like him, he is seen as a good manager, more than competent, and as tough as nails, all good qualities in a leader. The others also have positive qualities that they might offer, and may well be candidates as future leaders. But the real risk for any of them, and for the party, is that those qualities will go to waste when they lose the election in 2011.

It’s always dangerous to suggest that any election is unwinnable, or unloseable. But it is very hard to see any hope for this government whatsoever. After the endless litany of broken promises and empty rhetoric, nobody believes a word that they say. Nobody believes that they are capable of clearing up the mess, even if we give them the benefit of the doubt on whether or not they want to. As I said last year, it is already too late for this government. The iceberg has already struck and the ship is already going down.

For that reason it really doesn’t matter who is Premier, and appointing a new Captain now won’t stop the ship from sinking. All it is likely to achieve is to create yet another ex-Premier to be pensioned off into retirement.

Wednesday, January 14, 2009

The Real Racists Are Far More Offensive Than The Royal Family

In a world where Noddy and Big Ears can no longer consort with Golliwogs because it’s Politically Incorrect and somebody somewhere has been offended by interpretations which were never intended by the author, but which have been inferred by the intellectually febrile self appointed arbiters of modern manners, it should come as no surprise that Prince Charles has come under attack for calling a friend of his by the nickname “Sooty”. You see, it turns out that “Sooty” is a fellow of Indian extraction and consequently has what Silvio Berlusconi would refer to as a “very good suntan”. Rather than playfully acknowledge a fact which is quite literally as plain as the nose on his face, it is apparently a requirement of Political Correctness to completely ignore the blindingly obvious. That is, “Sooty” has dark skin.

After the pathetic attempts to denigrate Prince Harry for behaving in pretty much the precise manner in which most of his colleagues would behave, and thus demonstrating that he is a pretty straight up and down sort of a bloke, it would be easy enough to shrug it all off with the suggestion that the members of the Royal Family have become easy targets for character assassination by a mass media starved of any ability to report and analyze any real news of any substance. It’s simply more material for the mills of Fleet Street feeding the voracious appetite of the masses for any kind of meaningless titillation involving the rich and the famous.

But the truth is worse than that. Political correctness has taken such a deep root in our society that there is now no distinction between good humoured familiarity and the more sinister uses of language. We might pride ourselves on resisting the worst of the excesses of Political Correctness, but it has become insidiously embedded in much of our unconscious so that we can no longer tell the difference between genuine racism, and mere impudence.

As Australians, we take some pride in our larrikinism, out irreverence, out healthy disrespect for authority. Ours is a culture which takes pride in celebrating impudence, even if we do sometimes take it a little too far. For that reason, perhaps it is easier for us to see that there is a world of difference between bad taste, and real racism, which is the discrimination against or the persecution and vilification of individuals or groups on the basis of their ethnic heritage. Yes, light hearted banter can be racist, but it can also be harmless.

In Britain, there has been a cultural revolution taking place. It is a revolution where the traditional British character, as exemplified by Enid Blyton, W.E. Johns and P.G. Wodehouse, has been eroded away by a combination of multiculturalism and misguided Political Correctness. Now, multiculturalism in itself is a marvelous thing, but when the PC brigade make it impossible for British people to be British, well it’s just not cricket.

The Royal Family might be seen by some as anachronisms in the 21st Century, and it is a challenge for the family to play a relevant role in modern life. But that has nothing to do with the denigration of Prince Harry or his father. The cheap moral outrage expressed by the tacky tabloids in London, whether it is directed at the Royal Family or any other celebrity, should be seen for what it is. In fact, it is something that Australians ought to be quite familiar with: the tall poppy syndrome. The real racists are the extremist suicide bombers who hate the rest of us so much they are prepared to die killing us.

Tuesday, January 13, 2009

Not So Happy New Year

The chances of the New Year being a happy one appear to be diminishing. While it is not necessarily foolish to hope for better times ahead, the indications for the economy continue to point towards more gloom before any sunshine might break through. It seems that just as experts are cautiously wondering whether the corner has been turned, more bad news emerges. The latest is the continuing decline in job vacancies, which is readily interpreted as a precursor to rising unemployment.

While an increase in unemployment is not unexpected, forecasts vary as to just how high the unemployment rate will go. The ANZ job advertisements survey has shown a dramatic dip in advertised vacancies: almost 10% in December and almost 25% since July. These figures are reported to be of a greater magnitude than the decline in job advertisements prior to the early nineties recession. You remember the one… the recession we had to have. The natural assumption is that we are once again heading for a recession.

Optimists continue to cling to the notion that the recent era of unprecedented prosperity will somehow cushion the effects. Pessimists might suggest that the dizzy heights of economic growth which prevailed for so long simply mean we have further to fall. It can be hard to resist the temptations of false optimism, but the truth is that past performance is no guarantee of future success. That is a fundamental principal so important that it must by law be provided as a warning in any prospectus for an investment. It applies just as much to the whole economy. No matter how robust the Australian economy has been up to date, it can still be overwhelmed by global forces.

We have been told repeatedly that the fundamental strength of the Australian economy, along with the sound financial position of the Federal Government, will shield us from the worst of the downturn. That’s true in so far that the Government is well equipped to spend its way through the downturn, but even that will only go so far. Remember the great axiom of financial management: No fortune is so great that it cannot be squandered. If the global economic storm is still raging when the money runs out, there will remain no option but a budget deficit. We are close to that point now.

While the strength of the Australian economy has been vaunted as our salvation, the real truth is that prosperity has left us with overinflated house prices, propped up only by a shortage of supply. As unemployment rises, repossessions will also increase. Regardless of how short the supply, if people can’t afford the houses they won’t buy them. And it’s not just housing. There is a whole raft of living expenses to which we have all been made captive, expenses that never existed a generation ago, mobile phones, internet, pay TV, user-pay fees for everything that moves, and as unemployment rises, people will no longer be able to afford what has become accepted as a normal way of life.

The pitfall of course is that all these expenses make up a sizeable chunk of the economy, and as the money stops flowing the recession will bite more deeply. While the optimists are suggesting that unemployment will reach about 6% or so, the pessimists are warning of 9% or even more. The indicators of a bubble have been plain to see for a long time. The relationship between incomes and housing costs is so far out of balance it can only go one way, regardless of the level of supply and demand. While I am not keen to be a merchant of doom and gloom, I do believe it is wise to prepare for the worst, even if we still allow ourselves to hope for the best.

Monday, January 12, 2009

Promises Mean Nothing

EDITORIAL 12.01.09.
However great the temptation might be to cling to the idea that a new Premier and a Ministerial reshuffle might have revitalized the New South Wales Government, the evidence is not very encouraging. The reputation of the government for failing to honour its promises appears to be in no danger of being overturned under the current regime, as the New Year begins with more stories of appalling failures of the health system to provide adequate care.

The revelations over the past few days that three different women have come forward telling of their experiences at Maitland Hospital when suffering miscarriages are not only shocking, they are a massive breach of faith. After the terrible treatment delivered to Jana Horska at Royal North Shore Hospital a year ago, the then Minister, Reba Meagher, promised that such things would not be allowed to happen again. And yet they have, repeatedly.

The new minister, John Della Bosca, has responded with an audit of the guidelines which were supposed to have prevented this from happening. No doubt, explanations will be made and apologies given, but the real question is will anyone in New South Wales believe them, or trust the government to actually deliver on promises it has so far been unable to keep.

While we are still awaiting the government’s response to the Garling Inquiry, it remains clear that previous assurances that the system would be fixed have amounted to nothing. For that reason it would seem reasonable to place little faith in any future assurances. Nevertheless, the problems are not going to be resolved by throwing up our hands in despair.

At the heart of most of the failures of the system is the simple matter of not having enough money to provide for the needs of the public. Compounding that has been the development of a culture of denial, blame shifting and bullying which has arisen out of the pressure of attempting to meet impossible demands without sufficient resources, along with the staff shortages which arise from a lack of trained professionals. That means that even when the money is made available, it can be impossible to actually fill the positions because there simply aren’t enough doctors and nurses who are prepared to take on the job.

It’s a mess that can’t be resolved overnight, but promises mean nothing. Action is needed now, and the first step has to be to make more money available to deliver the standard of care we all deserve.