Friday, April 24, 2009

Budget Season

Budget season is underway. It’s that time of year when the speculation, and the leaks, about just what will and will not be included in the Federal Budget really begin to ramp up. It follows the extended lead-up period where a cavalcade of interest groups put forward their wish lists for government spending, usually including calls for increased spending and reduced taxes. In the current economic climate most of these spending requests are described as an opportunity to stimulate the economy.

Throughout all this the government has maintained that the extra boost to the first home buyers grant is scheduled to end at the 30th of June, despite almost everybody pleading for it to continue. The argument is that it has clearly been a success in helping to prop up the real estate industry. Today’s Telegraph says they have the exclusive story that the increased grant will be extended in the Budget, but in a modified form to further favour new construction. Whether this an intentional leak, and unintentional leak, or merely speculation, it would make sense to focus the benefits more specifically on new construction. I suspect that the story is probably right, and that the modified form of the grant will both redirect the focus away from existing properties and set the stage for the boosted grant to be phased out at a later stage rather than simply cut off.

Of course, most people would see the continuation of the grant program as good news, not withstanding those who argue that it acts to inflate prices, and the usual practice with Budget leaks is to leak the bad news, and sometimes even exaggerate it, so that when the announcements are made on the night everybody has already been softened up and might even breath a sigh of relief because the news isn’t so bad after all. That being the case, it is unlikely that the government will stick to it’s advertised timetable and simply cut off the grant at the end of June, but at the same time, don’t expect it to remain in its present form.

Speaking of bad news, it would seem that high income earners might be in for tax increases to help pay for the promised boost to age pensions. While the phrase tax increase is almost never welcome, there is some speculation that top marginal tax rates might rise to clip the incomes of some of our high fliers. There is considerable logic to this if such a move is applied to incomes that are many multiples above the average wage. But rather than increases to income tax for the wealthy, it is far more likely that they will be hit in other ways. For example, the concessional tax rate for superannuation contributions is likely to be scaled back for high income earners who essentially use it as a way to reduce their total tax and who are likely to be wealthy in retirement anyway even without the tax concession.

It is also likely that the subsidy for private medical insurance will be means tested. If that’s the case, it is unfortunate that money which is currently spent on health, even though in an indirect fashion, is really only going to go propping up the bottom line, rather than being redirected into public hospitals where it is desperately needed.

So far there hasn’t been too much bad news leaked, so it’s tempting to wonder just how harsh this budget will turn out to be, even though the government keeps telling us it will be tough. The problem of course is that if it is not harsh enough the deficit blow out will lead to an ongoing debt burden which will ultimately cripple the recovery, while if it is too harsh the economic downturn will cut much more deeply into the lives of everyday Australians.

Thursday, April 23, 2009

2020 Vision

With all of the gloom doom and disaster taking place at the moment, such as the impact of the Great Recession, the growing realization that the Carbon Pollution Reduction Scheme will fail to achieve anything much aside from making certain bankers and lawyers richer, and of course the sudden onslaught of desperados in leaky boats fleeing the very regimes and organizations that we denounce as evil, it’s easy to forget that not so long ago Australia was enjoying a euphoric burst of optimism.

The Rudd Government was elected at a time when few suspected that the long years of prosperity were about to reach an abrupt halt, and most were celebrating the end of the Howard years which had become just a tad tedious and boring. It was time for some excitement, and Kevin Rudd was just about as exciting as it gets in Australian politics with his ability to speak a foreign language without relying on a phrase book as Alexander Downer had done. Even better, Kevin was an ideas man. Not so much that he had lots of his own, but that he wanted to hear everybody else’s ideas, and that was a bit of a surprise after so many years of autocratic rule. It seemed almost every five minutes a new inquiry or review was announced so that the new government could determine the best way to proceed, presumably because they hadn’t really thought too much further ahead than winning the election and signing the Kyoto protocol.

Of course, the biggest and best round table examination of all the many options for future endeavour was the cleverly named 2020 summit, a name evoking both vision for the future and a timetable for its implementation. At great expense and some organizational difficulty, one thousand carefully selected Australians spent a weekend enjoying scones with jam and cream along with each other’s company coming up with brilliant ideas to make our nation even greater than it already is. Out of that shindig emerged a list of one thousand bright ideas. Remember that? I know it was a while ago, and like I said, we’ve been distracted lately by all the pessimism associated with the end of the world as we knew it.

Now, however, after all this time, the government has announced that out of all those proposals, nine will actually go ahead. Now that doesn’t necessarily mean that they will come to fruition, just that they will go ahead to the next stage of development. Some of these are indeed magnificent ambitions, like the commitment to spend $50 million on research towards the development of a bionic eye, while others are perhaps more ethereal such as the idea of so called “Golden Gurus”, which involves retirees providing the rest of us with the benefit of their experience and advice.

One of the nine is the proposal by the ABC and the Childrens’ Television Foundation to create a dedicated childrens’ TV channel. Of all the schemes approved, this is one of the most sensible and worthwhile, because it will provide a service for which there is a clear need, and which the commercial networks would be unlikely to pursue for the simple reason that it would be hard to achieve a viable commercial return.

For the ABC however, it is a different matter, as it exists as a public resource which is not driven by commercial imperatives, but by community needs. Dedicating a children’s channel achieves exactly that, and for the taxpayers who will foot the bill it is both a community service and an investment in the future of the nation. It’s even a bonus for people who do not have children, because that means that other channels are less likely to all have kids programming on at the same time. Best of all, it means there will be at least one channel where there is no Gordon Ramsay.

Wednesday, April 22, 2009

The Spin Cycle

A report in the Sydney Morning Herald claims that the New South Wales Premier’s Chief Of Staff, Graeme Wedderburn, has criticized the media performance of the Premier, and his Cabinet colleagues. Apparently, Mr. Wedderburn addressed the Ministerial staffers whose job it is to guide their bosses through the jungle of public opinion and make them look good. Or at least, not so bad. It is apparently his opinion that our Premier and his colleagues would benefit in some training in how to handle the media.

He is quoted as saying this: “It's no secret most of cabinet are poor performers and that stays in this room.” That’s an absolute gem which is so contradictory that it borders on being an oxymoron. Really! If “it’s no secret”, why on earth is there a need for it to stay “in this room”? Obviously, the truly hilarious thing is that it didn’t stay in the room, but instead wound up in the pages of the Herald. That is, of course, if the report is accurate.

But wait a minute. If Mr. Wedderburn is such a keen proponent of manipulating public image, controlling the agenda, and influencing exactly what appears in the media, maybe this is part of his plan. Maybe he wants us to think of poor Nathan Rees as being a good bloke who is at the mercy of a hostile press and sadly ill equipped to deal with it. Maybe that’s the image he wants us to have, so that we might be more inclined to be sympathetic towards the Premier who has been handed the poison cup and the impossible challenge of getting re-elected in two years time. Yes, that would be a public relations masterstroke, and something of which any political media advisor could be proud to pull off. It’s positively Machiavellian.

It is all beginning to make sense now. Nathan Rees is seen by many as a nice enough bloke, and his direct manner is appealing. But so often he appears to be caught out by events beyond his reach, such as misbehaving ministers, or embarrassing power failures, or faulty public transport, or… well the list goes on. The Premier always responds with a sincere determination that would be hard to fake, and an increasing sense of frustration at having to pick up the pieces from the mess made by his predecessors. How clever then to manipulate his image this way to portray him as being “bad” at managing spin. If the Premier really is bad at spin, doesn’t that mean he is good at telling the truth? Or is that also just more spin? No wonder nobody believes in anything anymore.

The greatest irony of all is that the best way for the government to enjoy a good public image is and always has been to actually serve the public interest well. Forget about telling everybody how good you are, and just get on with doing the job that is expected of you. Actually deliver better hospitals, better transport, better schools, and the public image will take care of itself. Relying on spin, as the government has for so long, is merely a symptom of a government which is incapable of actually doing anything properly.

Tuesday, April 21, 2009

Stimulus Packages Are Not A Failure

The admission by our Prime Minister that recession is inevitable, was itself inevitable. While there are very good reasons for those in government not to jump the gun and make such a declaration ahead of the official figures, it was always only a matter of time before the admission would have to be made. After all, it would be pointless to appear to be stupidly holding out hope for a miraculous improvement in conditions while all the evidence was pointing the other way. It would be like standing in a burning house and saying that there was no fire because the smoke detector had not yet sounded the alarm.

Of course, if we continue with the same analogy, it is obviously more important to reach for the fire extinguisher than it is to stand about wondering when to shout “Fire!” That’s why the government moved so quickly to introduce the stimulus packages even before it was clear just how bad the downturn would become. Now that it has become evident that the fire is much worse than initially feared doesn’t mean that reaching for the fire extinguisher was the wrong thing to do. But it would appear that that is exactly what Malcolm Turnbull is saying.

The federal opposition has taken the line that the continuing deterioration in the economy is an indication that the stimulus packages have not worked, and have been a waste of money. Unfortunately, that is a view which misses the point. It is, in effect, like standing in the blackened ruins of that burning house and suggesting that having saved only half of your possessions means that using the extinguisher was a waste of time.

The scope of the Global Financial Crisis is such that Australia is being subjected to the effects of a worldwide economic tsunami, and the implementation of stimulus policies cannot be expected to stop that from happening. That might have been the case if the downturn had been less severe, but the real purpose of the stimulus policies is to reduce the damage as much as possible so that once the fire is over, rebuilding can begin.

The opposition has also highlighted concerns that the current level of government spending will leave the nation in debt for generations to come, suggesting that this will inevitably lead to higher taxes, and that is a concern with considerable legitimacy. But let’s not kid ourselves; we are still going to be paying taxes no matter who is in government. What counts is what those taxes are spent on, and if the government has chosen to hand some money back to us now to see us through the difficult times, perhaps the important thing is for all of us to use the money wisely.

For some that will mean paying off some bills or reducing some debt, for others that will mean putting the money towards savings, and for others it will mean buying something useful. But to say that the stimulus packages have not worked simply because the rest of the world continues to fall apart is misleading, because the purpose was never to stop the tide from coming in, but to provide some sandbags.

Monday, April 20, 2009


There are reports today that New South Wales Police are under siege from criminals who attack them, break into their cars and damage their stations. The reported figures add up to three incidents per day, ranging from such things as spitting at a police officer through to the theft of fire arms and body armour. The Shadow Minister for Police, Mike Gallacher, says that such criminals not only have no respect for police, but also no fear of being apprehended. The problem however is much deeper than that, because it’s not just hardened criminals who have no respect for authority, it’s a big proportion of the general community. Many of the incidents involve abusive drunks who are not criminals until they pick a fight and find themselves guilty of assaulting a police officer.

The problems confronting police are only a symptom of a much more widespread contagion which has seen an elevated level of aggression in the community. It is often said that young people today grow up lacking discipline, but that is a cheap and easy explanation to a more difficult social problem. The same thing has been said of young people since the days of Socrates, and not all young people turn out badly, in fact most don’t. Equally, it’s not just young people who are capable of hostility, aggression and violence. It is instead a cultural phenomenon where more and more people are quick to anger, and feel entitled to express that anger in an offensive manner. Self righteous indignation has become the default response to almost any perceived slight, whether it is intended or not.

The rise of road rage has been followed by a variety of different of forms of rage. Car park rage. Shopping trolley rage. Phone rage. Sports rage. Random events seem to spark massively disproportionate outbursts of rage where the slightest mistake in traffic can see a motorist subjected to a barrage of vocal abuse in language that would once have been cause for arrest. In extreme cases, a driver might be physically attacked.

There has also been much discussion of alcohol and drug related violence, especially at or near late night pubs, clubs and bars. While there have always been some people who become aggressive when they drink, it now seems that violence is becoming so widespread that the alcohol is being blamed for what is really a behavioural issue. Whatever happened to the people who could enjoy a few drinks, even a few too many drinks, and still have a laugh and be good natured? It would seem that the alcohol is unmasking a more deeply held attitude of hostility.

There are many reasons why this problem of obnoxious behavior is becoming more widespread. One of them is a mass media entertainment industry which promotes a stereotypical image of the anti-hero, while at the same time making foul and offensive language so commonplace that some kids growing up today don’t even know that such words are actually considered rude. Another contributing cause is the mentality of entitlement which has sprung up from well intentioned social policies which championed the importance of rights without sufficiently reinforcing responsibilities. Then there’s the education system that teaches children that getting the right answer isn’t as important as feeling important. There are laws that prevent parents from intervening if their teenager goes off the rails and decides to leave home at fifteen, even though the first question asked when it all goes wrong is inevitably: “Where are the parents?”

All of these factors are complex, and there’s no simple right or wrong, but the end result is that courtesy has disappeared, tolerance is wafer thin, and the slightest misunderstanding can lead to abuse in language strong enough to strip the paint off the walls. The end result is that respect has dried up, and for whatever reason people no longer respect authority, they no longer respect each other, and in many cases they no longer respect themselves.

The thing about respect is that we often labor under the misapprehension that it is everybody else who must earn it while we ourselves should be entitled to it without question. The worst abuses occur when someone takes it upon himself to “teach some respect” to someone else, when the reality is that the one doing the “teaching” is without any respect himself. Instead, taking the opposite view that everybody else should be entitled to a basic level of respect, while we ourselves must earn it, is an approach which could transform the world, because if we all followed such a path it would guarantee that we all receive the same in return.

Is that naïve? Perhaps. But unless we start somewhere we become part of the problem.