28 November 2008

Turn on and drop out

Telstra has, hopefully, overplayed a weak hand in their bid for the National Broadband Network.

If you want to use your market power to crush competitors, go your hardest - but don't whinge about the prospect of enforcing anti-competition laws. If you are enjoying a monopoly gifted to you by the government, enjoy it - don't complain when the carnival ends, just lift your game. Just because Eddy Groves hasn't learned the lessons he's been taught doesn't mean that Telstra can't and won't go the same way. Incompetence burns market share and credibility, no matter what base you work from.

Hopefully anyone but Telstra get the gig of rolling out the NBN, and unless Conroy is more craven than I think he is then they won't. A letter from the chairman might have been sufficient back when western-district graziers lkike McGauchie ran the country, but it goes against everything that the telecommunications revolution of the past twenty years or so has promised/threatened. A new player has the ability to leapfrog Australia out of the backwater in which Trujillo would have us languish. Telstra is not about best practice in telco delivery - it's about keeping marginally ahead within a market it is actively depressing. It is really hard to respect this approach, let alone rally to its defence.

Yeah, thousands of Australians will lose their jobs if Telstra reverts to its cardigan culture and goes down. Given my earlier comments about the car industry I must seem pretty insouciant about jobs, eh. Then again, that's what you get when history moves on: thousands of Australians lost their jobs in the demobilisations of 1919 and 1945, many more when Cobb & Co and Qintex went to the wall. Nothing kills jobs like mismanagement.

If TransACT win their corner of the continent, it could transform Canberra in ways not foreseen in their bid. Canberra is the second-biggest IT market in the country and to have the country's best broadband will see it become an innovation hub. Canberra's public-service culture isn't ready for this. You are going to have dynamism and stasis side-by-side, economic and population growth - any politician who thinks they can ride such a tectonic shift is kidding themselves.

If a bidder other than Telstra rolls out the NBN, the challenge will be on the incumbents to roll out a solution that beats the winning bidder, preferably before said bidder completes the job. They would also be free to concentrate on the economical parts of the country, the part which bushies call the SCAM triangle (which would have to include SE Queensland these days). This would require a reversal of the sloth of Telstra's traditional culture, or the just-enough-and-whinge culture of Trujillo, McGauchie and Phil Burgess. It will require a realignment of which Telstra is just not capable, and they'll end up begging for the disaggregation that should always have preceded privatisation. If Telstra don't win the NBN contract Trujillo and McGeachie should be sacked immediately.

If Telstra win, the Rudd government is shot in terms of credibility on forward-thinking and innovation. They'll take the money and roll it out whenever as Australia slips further behind in terms of telecommunications - and just as backwater status starts to bite economically, Trujillo will piss off with the sort of plunder that leaves us all poorer.

The less said about Conroy's anyone-who-opposes-it-is-a-child-molester firewall, the better. Nobody believes Conroy is any sort of moral guardian, nobody believes the thing will do its intended job, and neither that nor anything else will keep Xenophon and Fielding voting with the government.

27 November 2008

Oo er, he said a rude word

Media coverage of Rudd using the word "deficit", referring to the possibility likelihood that next year's Federal budget will go into that state, has been another piece of press-gallery silliness.

If the government cancelled its $6b handout to the car industry, that would forestall a deficit right away. If you really can't cope with subsidy junkies going cold turkey, add another impost onto the price of petrol (then the absurdity of propping up the motor industry will be revealed).

Nonetheless, this article by Paul Kelly is right. Rudd does appear to want it both ways, at a time when the possibility of a financial position that is both expansionary and defensive becomes less feasible. This is an impression that can only be sharpened over time, in areas beyond the economy:

  • Defence: what is the plan in Afghanistan? What is Australia's response to the S-22 Sukhoi (apart from my favoured option, buying it)?

  • NT intervention: back to full paternalism or not? The history of Aboriginal policy has been the attempt to impose self-determination without asking the people most affected what that might mean for them, and blaming them for any failure; here is yet another round of a sad old game.

  • Health: more doctors/ nurses/ therapists/ paramedics, or bureaucrats? Or both?

A little bit of everything and a whole lot of nothing, it would seem.

I'll believe infrastructure spending when if I see it, and if Rudd was serious you'd expect more progress than has happened so far. Is infrastructure a cost, or an investment? If you can't work that out, your ability to address more complex economic questions is questionable to say the least.

The 2020 summit has melted into air. The next time Rudd wants to gather people together, on tax reform or infrastructure or whatever, people can be forgiven for being cynical.

Perhaps Rudd was never big on consultation, happy to sup with celebrities who kept their opinions lite-brite-'n'-trite (and only conventional-wisdom zombies would assume I'm talking about Heather Ridout). Be it on his own head, then. It will be fascinating to see how long Rudd lasts once the government dips below 53% on 2PP polling.

None of this is to say that the Coalition are ready for government again. They haven't resolved any of the above issues to anyone's satisfaction, and the dead hand of Howard hangs over this Opposition like Fraser's (or McMahon's) never did. Turnbull - and Paul Kelly's article - rely upon historical memories of deficits that are fading fast, and Rudd is spending his political capital wisely in making the case for a deficit. Taking the high ground over the deficit will not get Turnbull anywhere near the Lodge.

These are the issues the press gallery should be exploring. Kerry O'Brien looked idiotic trying to get Wayne Swan to use the word "deficit" before he was ready (all the more so because he failed - could Wayne Swan be the first politician to be able to put O'Brien in the same place as any other journalist?).

At a time when the economic landscape has fundamentally changed, the old political cliches will not do. The wreckage of the career of David Pemberthy, not yet 40, who followed the Mark Day tabloid playbook to the letter and has bugger-all to show for it, should demonstrate to the press gallery that the same-songsheet model is doomed.

12 November 2008

Making excuses

Take this pudding away. It has no theme.

- Winston Churchill

The NSW mini-budget is a whole bunch of press releases looking for an overall set of principles, how to address the fact that NSW is an economic basket case, what to do about it, how not to make it worse. Rees and Roozendaal have shown that it is not patriotism, but toughness, that is the last refuge of the scoundrel.

I have long been critical of Marxists who have skipped past the moderate centre and popped up in the far right to fill its intellectual vacuum. No longer: the extremists have more in common with each other than with the moderate centre. Imre Salusinszky started off on the far left, ricocheted off the right and end up as an apologist for Australia's worst government. I'd rather be politically homeless than be a joke like Salusinszky.
HOW has it come to this? How can NSW be staring at a $915million budget deficit after reaping GST and stamp-duty windfalls from the mid-1990s through the mid-2000s?

Wha'? There I was, having lunch with Bob Carr and enjoying a disquisition on Tocqueville in response to a question about the Parramatta to Chatswood rail line, now you're telling me it's 2008? Wha' happened?
The trend towards corporatisation, begun by former Liberal premier Nick Greiner in the late 1980s and continued by former Labor premier Bob Carr in the mid-1990s, brought an enormous productivity dividend.

However, this productivity growth flattened at the beginning of this decade.

Yeah, because the momentum generated by the Greiner government could only go so far. When you're no longer interested in government, when you're only focused on tomorrow's headlines and being advised by dills like Nathan Rees, you're going to stall. At a time of unparalleled growth in the history of humanity in this decade, there is no excuse for NSW Labor not to have put the infrastructure in place to ensure this state grows.
Payroll tax ... has remained robust in recent years, even as stamp duties have pulled back. It will now decrease, as a result of unemployment, and also as a result of $1.9billion worth of payroll tax relief unveiled in the June budget.

Bloody regressive taxes eh? Just when you need your revenue it's going to fall away! Whose idea of economic good sense is that?
Michael Egan, who was treasurer under Carr, and Michael Costa, treasurer under Morris Iemma, are formidable economic rationalists. They protected the public purse from most of the lunacies dreamed up by ministers.

No, they were clowns. What a shame that the only policy suggestions on offer were "lunacies", like giving parents a token $50, or getting public sector employees to give some productivity trade-off for their pay.

With that as the intellectual platform for understanding NSW's current predicament, no wonder he comes out with crap like this:
a gaping budget hole caused by the global economic crisis.

No, the gaping hole was caused by sheer indolence on the part of the State Government following the Olympics.
The Government will also collect an extra $939 million by deferring the abolition of a raft of so-called “nuisance taxes” that were supposed to be sacrificed by the states in exchange for the GST in 2000.

Those taxes are so-called, Imre, because they actually depress economic activity. You don't crow about takings that depress economic activity at a time like this.
the Sydney Harbour Bridge and Tunnel will be the first motorways in Australia to use time-of-day tolling ... The measure is designed to improve traffic flow in the Sydney CBD but will also raise $12 million each year.

In my observation, Imre, traffic into CBD Sydney does not only enter from the north. Rees and Roozendaal are playing class-war smart-alecks here, and they have no right to have their figures taken on trust.
On capital spending, the biggest surprise in the mini-budget is a commitment by the NSW Labor Government to build a $4 billion metro rail system in Sydney's CBD and inner west.

When he announced the CBD metro last month, NSW Premier Nathan Rees was hoping the project would be funded by the Federal Government as part of its planned $20 billion infrastructure spend designed to increase national productivity.

Deafening silence from Canberra, Imre. Not exactly a lot of clamour for yet another urban metro (isn't that what the monorail does? Or the Central to Lilyfield tram?) or for the huddled masses yearning for a trip to Rozelle. Do you really think these guys should be taken on face value?
In his speech to parliament at midday _ and his first ever visit to the NSW lower house _ Mr Roozendaal said he had crafted “a tough, decisive and detailed mini-budget demanded by the times in which we live.”

Yeah, he would say that, wouldn't he Imre. You make Glenn Milne look like Chris Masters.
The mini-budget was brought on by a $1 billion collapse in stamp duty revenues, as the Sydney property market sinks deeper into the doldrums, and a $450 million writedown of anticipated GST revenue as families cut back on spending in the face of the global economic downturn.

Also, the parliament's rejection in September of the Government's plan to privatise $10 billion in state-owned electricity assets has meant future capital spending needs to be re-ordered.

That, and 13 years of lazy government - helped by lazy reporting like yours, Imre. O the shame of being shown up by the SMH, here and here.
The Government will also introduce a licence fee for child-care centres of $700 a year for small services and $1100 for large services, to be introduced from 2009-10.

Nice one: just when this sector is at its most vulnerable, Nafe 'n' Eric go stealing food from the mouths of toddlers, and opportunities from their parents. This is clumsy, counterproductive policy at its worst: real journalists and proper oppositions should be all over this.

See Imre, Clenell illustrates by contrast:
"We have crafted a tough, decisive and detailed mini-budget demanded by the times in which we live."

Even though the North West Metro was dumped, the level of capital spending over the next four years only dropped from $57.6 billion to $56.8 billion.

Roozendaal had want to be so, so tough, because he's dopey and ineffective. Right up there with Tony Abbott and Nick Minchin in terms of "tough" and dumb - and politically doomed.

11 November 2008

Stable for days in cars

Here in my car
I feel safest of all
I can lock all my doors
It's the only way to live in cars

Here in my car
I can only receive
I can listen to you
It keeps me stable for days in cars

Here in my car
Where the image breaks down
Will you visit me please
If I open my door in cars

- Gary Numan Cars (1981)

Advertisements for motor vehicles in this country take pains to stress their product is "fully imported", which does not happen in any of the other fourteen countries that can apparently build a car from scratch (nor in any of the countries that can't, presumably, as it would be redundant).

Apart from the Holden Commodore and the Toyota Corolla, all cars manufactured in this country are rubbish. They cost more than they are worth and should not be made. There are better ways to spend six billion dollars for the future of this country than more and more Mitsubishi 380s: why spend it on vehicles when the roads they drive on are so inadequate? Stephen Kirchner is right when he says that investment in the car industry is investment denied elsewhere, but I wish he'd been more specific and less dogmatic.

Why not concentrate on Australian R&D, without the focus on manufacturing? The Toyota hybrid to be made in Victoria is a stop-gap solution because it's not linked to any concerted R&D effort that reduces emissions without sacrificing grunt.

The reason why Labor loves the idea of Australian-made cars is because of the major role that the Australian Manufacturing Workers' Union plays in its affairs. Kill the car industry and a large union with much clout becomes as irrelevant as the French Polishers' Guild. It's clear that a Labor Government will never do anything sensible with the car industry.

The next Coalition government should support R&D and the manufacture of Australian cars that people actually want to buy. There will be some social dislocation within Labor seats (both in communities and in terms of preselections), but we all must make sacrifices. The rustbelts of other countries - including those countries that can go from drawing board to production, etc. - should serve as a warning to those regions within this country clinging to doomed industries. Those communities had a glimpse of their future in the early '90s when the eternal footman held their coats and snickered, they have no right to complain if they have failed to learn that lesson.

Rudd's Labor won its victory not in the rustbelt, but in the sunbelts of the country where growth is being held back through lack of infrastructure. Stopping the mendicant car industry in its tracks would have rewarded the faith of those who put Rudd into office, and who can remove him if when he disappoints them.