30 August 2011

Swallow it up

For they have sown the wind, and they shall reap the whirlwind: it hath no stalk; the bud shall yield no meal: if so be it yield, the strangers shall swallow it up.

- Hosea 8:7 (The Bible, King James Version)
Destroying opposition leaders is brutal work and it is a relief to see the Prime Minister realise finally that it is an essential part of her job. Some pests can't just be swatted away: there comes a point where you have to get out some strong and smelly chemicals and blast them to kingdom come (starting with some Old Testament can really get the blood moving!). She finally got up on her hind legs in Question Time last week, and she really gave it to Milney and News Ltd and seems to have stunned Andrew Bolt into silence. While welcome, this won't matter if it isn't part of a pattern that shows that she will not tolerate empty stunts from The Situation as somehow balancing substantive achievement.

Niki Savva believes that it's just a "mission" for the Opposition to have a go at the Government, but if the Government dishes it back, horror!
IF the Gillard government could pin the Ibrahim family's gang wars in Sydney and Mick Gatto's successful auction bid for lunch at the Lodge on Tony Abbott, then it would. Throw in the London riots, too. After all, the Opposition Leader visited there around the same time.
That's what passes for wit from Savva; its lowest form, certainly, but standard fare for someone who's spent far too long in Canberra. It's the sort of thing Peter Costello used to come out with when flailing various members of the ALP, the sorts of performances that weaker personalities on his staff like Savva and Tony Smith absorbed into their core perspectives on life. It's the sort of thing that journalists complain about when coming from bloggers or "the twittersphere".

Now that the Liberals aren't in government Savva believes it's somehow illegitimate for Liberals to be on the receiving end of any form of criticism, hype or bluster. Savva's kernel of truth is neutered by her hypocrisy. She has put the Liberals in breach of one of the basic laws of politics: if you're big enough to dish it out, you have to be big enough to cop it.
In the last little while Labor and its acolytes have blamed Abbott's scare campaign on the carbon tax for making it impossible for the government to sell its policy, and further that some of his lines of attack are either xenophobic or racist. His negativity about May's budget made it flop. He has talked down the economy so much he has shaken business and consumer confidence. He created sovereign risk and devalued assets by getting stuck into the coal-seam gas industry. The workers he claims to stand up for will be destroyed by Son of Work Choices.
When you've been around politics for as long as I have, you'll remember Peter Costello or Keating or even Malcolm Fraser's Treasurers getting stuck into every opposition leader and most of their frontbenchers for talking down the economy, creating sovereign risk, shaking business and consumer confidence, doing over the workers, etc. The last budget "flopped" about as much as any of Costello's budgets "flopped". That's politics for ya.

I don't blame Abbott for failing to sell the carbon tax, but then again it would be lazy to assume I'm some sort of Labor acolyte.
[Abbott] has trashed democracy, breached the divide between the justice system and the executive, and infected Australia with down and dirty Tea Party politics.
Let's see how Savva addresses these strong claims with her very next paragraph:
Meanwhile, the Craig Thomson scandal ...
Let's not admit that critics of The Situation have a point: let's just complain that what's sauce for the goose shouldn't be sauce for the gander.
If you want scandal, look at that female Liberal senator charged with shoplifting $92 worth of goods from the supermarket. And Abbott hid it for two months! Shame.
Don't forget the question of assaulting a guard who apprehended Fisher, Niki; a guy doing his job and standing up for his employer gets thumped by some pampered jobsworth from Canberra, without so much as a phone call from George Brandis. Surely your long-standing concern for health sector workers extends to those protecting struggling retail outlets from smash-and-grab raids.

Mary Jo Fisher was charged in South Australia and will be tried there. Policing and courts are run by state governments, and the State Government of South Australia is a Labor government. If a Liberal senator had been charged by the NSW Police when Labor was in State Government here, they would have used it to absolutely negate the next attack by state or federal Liberals. Maybe the SA government really has run its course.

Anyway, back to Savva:
Not only is Abbott culpable for asking questions about this and ignoring massive job losses in manufacturing as if that is suddenly a good news story, which I guess comparatively it is [sic], he is also remiss for not asking them sooner.
Shit happens, eh Niki?
She insists it would have been unremarkable for her adviser to call a public servant to check a fact.
Did Peter Costello never call Ken Henry or any other public servant to check matters of fact? Really?
... when Abbott calls for an explanation, attack puppy Craig Emerson denounces him for maliciously smearing the Prime Minister and calling her a liar.

Never mind they had set the hounds after George Brandis, CSI, for calling the NSW Police Minister and the Police Commissioner to advise he was seeking an investigation into Thomson's activities.
Savva is complaining that the government is giving the opposition as good as it gets.

Let's assume the "CSI" thing is a typo for "SC": maybe a public servant could have helped check that. Besides, it calls to mind George looking into dead things, which one or two actual lawyers might doubt is within George's competence.
Emerson had to spoil it all by being unable to answer questions on travel warnings to the US during Cyclone Irene, forgetting his day job was Acting Foreign Minister.
I thought it was "attack puppy".
And they reckon this issue is not distracting the government.
Since when is the Australian government distracted by Cyclone Irene? What vast numbers of travellers planning a trip to the United States listen in to Question Time for a travel advisory? Or, could it be that a supposedly experienced journalist and staffer (i.e. someone who lives and dies by the way they express themselves) has flung some sloppy wording at the reader in a fit of partisan frustration?

Not a word about The Situation's economic policy failure on manufacturing, and how Emerson skewered him well and truly. Costello was right about Abbott, Niki, as are Emerson and Paul Kelly: the guy really is an economic moron. Why would anyone want an economic moron running this country? So Greek.
In a revealing interview on Friday, Leon Compton, of ABC Statewide in Tasmania, valiantly and repeatedly tried to elicit from Gillard some expression of concern about allegations of gross misuse of union members' hard-earned contributions. All he got were platitudes ...
No, this is a standard thing with journalists who confuse themselves with big-time interviewers Holding To Account. It's dumb, it's boring, but they keep doing this terrible journosphere cliche. It goes like this: an investigation is underway, so the journalist asks the politician about it. The politician says let the investigators investigate, I won't interfere. The journalist keeps on asking anyway: this pantomime is what journalists call "hard-hitting".

The Prime Minister gave a reasonable and responsible response, but Leon sucked up all her time with some sort of insistence that she interfere with an official investigation: so hard-hitting, so valiant.
[Gillard] thinks her only hope is to make [Abbott] appear unacceptably risky, hopelessly negative, internally inconsistent and completely ill-equipped to be prime minister.
Yep. Perhaps not her only hope, but this could be the closest thing you'll get to cogent political analysis from Niki Savva.
He is drawn into every story, every scenario when really, if the government wants people to recognise and focus on its achievements, ministers should talk about them more and him less.
They do, then journalists - harried by imaginary notions of "balance" - chuck in one of his stunts and insist that the government comment on it. They've sunk into the abyss by giving him respect and courtesy, which includes ignoring his more unhinged remarks. What they're doing now is dishing it back to The Situation and his cronies, and they can't handle it at all.
They make [Abbott] seem effective and unstoppable; however, where they have succeeded, with a lot of help from him, is in making him scary.

Destroying prime ministers is brutal work and it is painful to watch Abbott day after day, Terminator-like, fulfilling his mission. It has paid dividends for the Coalition vote, but it has kept his personal standing low. Until now he has been willing to pay that price. He can't afford to do that indefinitely and if he is looking for a role model to avoid, and one that shows how difficult it is to change perceptions once they are set, she stands before him.
It's at this point that a Coalition apologist will blithely insist that The Situation will flick the switch to Prime Ministerial mode, coming out with good and sensible policies, toning down the over-the-top rhetoric, and doing all those things that The Situation can no more do than fly to the moon.
Abbott has time to soften the negatives ...
But not the capacity, Niki, nor the inclination. If you knew Abbott at all, and were being honest with your readers, you'd know that and you'd admit it.
With Arthur Sinodinos entering the Senate, he has an immediate opportunity to re-weight economic debate. Sinodinos could have a new portfolio of productivity, which gets him into the heart of economic policy without having to unseat anyone already there.
If the Coalition doesn't have anyone focused on productivity, as implied by that proposal, then everyone in the opposition's economic policy team deserves to be "unseated", if not dumped at sea in a chaff bag. Productivity has been a vital concern to this country's economy since the latter term of the Howard government; you'd think that after four years, and with WorkChoices having caused more problems than it solved, they would have come up with a few ideas. If not, they are not ready for government and may never be.

If Sinodinos is the answer, then never mind the Senate - why isn't he candidate for Dobell?
Then, unless he has a new prime minister to deal with ...
Or an old one with a new ticker and a sense of perspective, and who already has form in knocking The Situation into a cocked hat ...
... Abbott should take the summer break to modify and refine his approach. He can afford to ease off. She is pretty much dead woman walking.
That has to be the stupidest political advice since Fraser called an early election in 1983 hoping to pin Hayden to the Labor leadership. Firstly, The Situation might get photographed in his sluggos again, and secondly when he spent a week away the press gallery realised what a vacuous dickhead he really is and he's been battling ever since.

The Situation doesn't have an off-switch, he can't be softened and he doesn't have much of a mind to change. The Situation will go on and on while the Gillard government does grown-up governing work, so that at the next election an imperfect government offers itself for re-election against a clownish alternative that can dish it out but can't cop it. Niki Savva knows The Situation isn't good enough, and her painful equivocations show this; yet, she can't admit it when the critics have a point. Savva should be big enough to realise that you have to be able to cop it if you dish it out, but she isn't. That's politics for ya, Niki, swallow it up.

Gold and soil and wealth for toil

Who'll manage our sovereign mineral wealth? That's the answer to who'll win the next Federal election. Labor have put the next election on the carbon price and the mining tax. The Coalition, it would seem, are softening us up for a sovereign wealth fund (SWF).

I got halfway through writing an article like this, but not as good, to show how the Coalition had bet everything on being able to knock off the carbon tax - only to find that Jane Shaw had already written it. Read Shaw's piece, it's good; see you when you get back.

Shaw is right about the frantic attempts to get rid of Thomson. If the Coalition had been smart they would have gone after him during the negotiations with the independents: Crook, Wilkie and Oakeshott would have found it difficult to support Labor and Gillard would probably have forced Thomson out for the sake of keeping them on board. If Thomson survives until the election then Ross Cameron (hi Ross! I know you Google your name often and end up here) will be absolutely spewing.

This article by Josh Frydenberg is the tipoff. There are two things you need to realise about Frydenberg. First, he's intensely ambitious. Second, he's not smart enough to live up to the expectations placed upon him. He works hard at nothing other than networking, and he's a sillyhead. It's a poor article and normally I'd rip straight in, but there's a broader issue here to which Josh thoughtfully alerts us:
... the calls for a sovereign wealth fund from senior business leaders like Mike Smith at ANZ, Ralph Norris while heading CBA and CSL's Brian McNamee ... the IMF and Australia's own Reserve Bank governor Glenn Stevens ... OECD secretary-general Angel Gurria .. my colleague Malcolm Turnbull has made a thoughtful and considered speech on the subject, and Joe Hockey ... Both are more attune to the debate than the government.
And that's the heart of the article: arse-covering and name-dropping, an authentic product of its author.

Seriously though, there might well be a case for a sovereign wealth fund. It's just that Josh isn't the one to make it. The first quarter of the article is a nice rundown of Australia's macroeconomic situation. Then there's this:
Ensuring the competitiveness of our manufacturing base and other important exchange rate-exposed sectors like tourism will not be easy.
No, it won't be easy, and that's why Josh won't refer to those industries again in this article.

As far as tourism goes, what more do they want? If ever there was a lazy industry that has to be weaned off the public teat that has to be it. We've given them the Olympics and the Rugby World Cup three years later. The renovation craze that swept pubs, licensed clubs and people's homes has bypassed the tourism sector. They are still relying on products from another age as good enough for the likes of us, still keening for Americans when millions in Asia have the time and the money to come see us but aren't being pitched to by dull-witted government tourism bureaucrats and the spivs they notionally serve.
Workplace reform and productivity gains will be key.
No they won't, they'll be fiddling at the margins. As I said recently, if the employees at Bluescope worked for nothing it would still be run into the ground.
But at the same time, Australia has a unique opportunity.
Yes it does. That's Josh's code for "let's move on from hard issues".
We must save some of the proceeds of the boom and invest them for a time when they are needed most.
When will that time come? How will we know when it has arrived and what does Maximum Need look like?

Are the guys who rolled over so completely on the mining tax really the guys who'll stand up and demand a sovereign wealth fund? Are they strong enough to fend off vested interests from pecking it to death?

Imagine we had a sovereign wealth fund today:
  • Should we have given SWF money to the flooding of our third-biggest city? You'll remember how the Coalition wailed about a flood levy.
  • Should we have given SWF money to build education facilities? What if we could guarantee those projects had a 97% acceptance rate?
  • Should we give SWF money to high-speed rail? What about the Christchurch quake victims or those burnt out of Marysville? Maybe a Tasmanian AFL team (you know, productive assets).
Let's look at those engines of global growth, China and India. What are they investing in? Infrastructure: roads, rail, optic fibre networks, education, urban communities. What are they not investing in? Shutting apples out of import markets, and whatever other pissant measures that Josh and his pals consider to be extremely important.

Why not actually invest in productive assets directly? Why bother setting up some Great Artesian Fund that just second-guesses speculative investments? Why not identify major projects that promise a productive return to the country as a whole, and invest in those? We have a number of shocking roads in Sydney that were built by merchant bankers, there is no reason why we can't have better infrastructure funded directly from mining income.
International experience indicates that a sovereign wealth fund for a commodity-driven economy like ours could be an appropriate vehicle towards this end.

Sovereign wealth funds are not new. Kuwait established one in 1953, Abu Dhabi in 1977 and Norway in 1990. Owned by the government, these funds and others like them in Chile, Russia and Qatar hold, manage or administer a diverse set of financial assets in the pursuit of commercial objectives.
It's hardly a ringing endorsement to say that a SWF "could be appropriate". You'll notice that Josh has neglected to mention the SWFs in France and Ireland, which are stuffed chock-full of - um, what?
A sovereign wealth fund can perform a number of different functions: it can be the source of long-term wealth creation, otherwise known as intergenerational equity, or have a shorter-term objective to stabilise revenue cycles.

In the case of the former, when the finite resources run out, future generations will still benefit from the wealth created.
This can be done by investing directly in productive assets. Texas and California have pretty much run out of oil but they still have the educational institutions and the hi-tech economies that came from shrewd and direct investments. God only knows what those states would have spent a SWF on.
And in the case of the latter, when commodity prices take a downward turn, there will be money available for governments to call on should it be required.
Just like Ireland and France.
In both instances countries that use the significant reserves of a sovereign wealth fund to invest offshore may see downward pressure on their exchange rate ...
May see? First he's ambivalent about whether it's appropriate at all, now he's not sure whether it will have any sort of effect of the kind so often advanced as a prime reason to set up a SWF. Don't go cold on us Josh!
In terms of determining the best fit for Australia, Chile's sovereign wealth funds are quite instructive. In 2006, they morphed their existing Copper Stabilisation Fund into two new funds: first, a pension/savings fund, which they seeded with $600 million and which receives 0.2 per cent of the previous year's GDP on an annual basis.

In the event the fiscal surplus is greater than 0.2 per cent, the fund can receive a maximum of up to 0.5 per cent of GDP. Significantly, no withdrawals are allowed from this fund for the first 10 years.

The second fund, which began with $5bn and now has more than $20bn, is the recipient of fiscal surpluses when they are above 1 per cent of GDP.

Given Chile's strong commodity-based economy, both these funds are designed to provide the government with fiscal flexibility should the commodity cycle turn.
Why two funds? If the first is about pension/savings, what does the other one do? Why are commodities less valuable depending on whether or not the government has a surplus? How is Chile's manufacturing and tourism bearing up under all of this: thriving, is it?

I could look up the answers to all those questions but I'm not the one making the case for an Australian SWF. Given that the government can't withdraw money it doesn't provide any sort of flexibility: it isn't an option.
Domestic superannuation fund is not a sovereign wealth fund as [Shorten] likes to tell us. It provides no insurance against a downturn in the commodity cycle; nor does it impact the exchange rate in the way a major sovereign wealth fund can.
Australia's superannuation is the fourth-largest such fund in the world and keeps on accruing so long as fund members stay employed. It is possible that unemployment could rise coincidentally with a commodity price fall but the two are not linked. It's worrying that the exchange rate impact still seems to be a matter of theory rather than fact.
Joe Hockey has called the sovereign wealth fund idea the "Maserati of public policy".
What could this mean? It's flashy, all the merchant bankers want one but it breaks down regularly?
the Coalition, when last in government, put in place a Future Fund to meet the unfunded superannuation liabilities of commonwealth public servants ...
That was from the sale of Telstra, and why were those liabilities unfunded in the first place?
... now, five years on, Australia should actively consider a new, broader sovereign wealth fund as a means of securing its long-term economic interests.
But are our longterm economic interests really served best by measures other than investment in infrastructure?

This could be the answer to the great gaping hole where the heart of the Liberal pitch at the next election should be. If they are going to cut $70b from the budget then they can't promise much (well, they can if the press gallery keep letting them get away with it). When BHP Billiton announced a record profit immediately after crying poor over a RSPT, and when miners celebrated their great victory by squabbling amongst themselves, the idea of getting more money out of our finite resources took on considerable popular appeal. Thankfully, though, Josh is pushing it back on the list of priorities:
Before establishing a sovereign wealth fund, a number of relevant issues would need to be canvassed around governance, mandates and the overall opportunity cost involved.

Crucially, it would also be necessary to first return the budget to surplus and pay down Labor's $107bn of government debt.
He's run this idea by Joe Hockey and it hasn't exactly been seized upon with inarticulate cries of delight. Any idea, good or bad, can be shunted to the back of the queue with this fixation on debt and deficit. Hockey saw how Peter Costello established his authority over Howard's ministry in '96 by telling them what they could and couldn't do with their shiny new portfolios, and he wants some of that for himself. That imperative has clearly come ahead of one big idea that could lend a bit of credibility to promises in need of funding (or the appearance thereof).

Watch for the idea of a sovereign wealth fund to become more and more prominent from the Liberal side. Any idea floated by Turnbull and Frydenberg has deniability for The Situation; candidates will be unable to help themselves in indicating that it might be a good idea, allowing Liberals to claim the appealing aspects without facing the scrutiny that comes from an official policy (assuming, of course, that the press gallery get back into the business of scrutinising what the Liberals come out with).

In terms of the rights and wrongs of a SWF I had to go hunting for stuff like this. It was simply not possible to trust Josh Frydenberg and his half-baked equivocations on this important issue. As with nuclear power, a SWF needs to be highly and forcefully regulated in the face of powerful interests. Josh isn't the man to do that or even propose it with any credibility.

This isn't to say that the idea is dead, far from it; Frydenberg has a reputation as a thinker and a smart operator among the journosphere, provided you have no experience of thinking nor any sense for a tragedy waiting to happen. In this environment a sovereign wealth fund is an easy sell. Expect the Liberals, their camp-followers in the press gallery and more than a few Queenslanders to be all over it.

29 August 2011

The Situation in this blog

A week or so ago I read an article about a US TV show called Jersey Shore. The character known as The Situation reminded me of Tony Abbott: for his me-me-me sense of priority, perspective and propriety; his in-depth knowledge of the Australian economy, and his vision for our society and this country generally.

In this blog, references to "The Situation" should be read as: The Hon A J Abbott, MA Oxon BEc LLB Syd, MP, etc., Leader of Her Majesty's Opposition in Australia pro tem.

28 August 2011

The next federal Coalition government

In what is basically a job application for the Senate vacancy created by Helen Coonan, Arthur Sinodinos engages in a lot of blue-sky thinking about what the next Liberal government should look like. Any other newbie backbencher who tried this would get chewed out by Loser Loughnane, or by one of the timid and vacuous little bunnies who report to him or his wife.

The trouble with it is that the good stuff isn't realistic, and the realistic-sounding stuff is no good at all. The historical interpretation is tendentious at best and the stuff about the future is too ambitious to be sustainable in an environment where the Shadow Treasurer wants to cut $70b from the budget. The projection of the Howard government's record into some sort of sunlit upland future is ridiculous; someone of Sinodinos' reputation should know better.
THERE are eerie parallels between the present Labor malaise in Canberra and the final chapter of the Whitlam government.
No, there aren't.
Tony Abbott will be contemplating an early by-election or vote of no confidence in the government, citing reprehensible circumstances as Malcolm Fraser did in 1975.
He can contemplate all he likes, but Abbott's moment has passed:
  • The Senate is not lineball like it was in 1975; as of 1 July it now has a majority of Labor and Green Senators, who cannot be assumed to be played for suckers like Reg Withers played Ken Wriedt in passing the 1975 Budget on the afternoon of 11 November that year;
  • While he had his chance, The Situation could have won over the independent MPs - four of whom were conservative guys from rural electorates. Most of them have since hardened against him and become more confirmed in their decision for Gillard;
  • While he had his chance, The Situation could have blocked or at least modified a piece of legislation - just one, any one, turning a full stop into a semi-colon or perhaps decreasing a nominated amount by $1 - anything. He has barely slowed down the Gillard government's legislative agenda, let alone stopped anything;
  • Dobell 2011 aint Bass 1975, as I've said already;
  • Abbott forfeits the moral high ground regarding Thomson on three counts: a) he should've gone in harder before the last election, when all this stuff was known; b) his record of caring about the working conditions of health sector workers, and what they do with their money, isn't strong; and c) he isn't going all old-school unctuous about Thomson renting a warm body to use as a masturbation aide, like the shock-jocks are; and
  • A nine-year-old sex scandal? Is that the stuff that changes governments? Is The Situation seriously going to crawl into office over something like that? You'd have to hope it was all up from there, but I doubt it;
It's one thing for a new backbencher might want to praise his leader (especially given Sinodinos' role in shooting down Abbott's sillier proposals in the Howard government), but having squandered his main chance over the past year The Situation has much more past than future. If Labor develop a reputation for having delivered in the face of adversity, The Situation is finished. All those stunts and outlandish contradictions impress nobody but journalists.
Abbott's remarkable performance in effectively defeating Labor last year ...
At first blush it's easy to see the inherent flaw here: John Howard "effectively defeated" Labor in four elections, that's why he became Prime Minister. Who is Prime Minister today? How many Liberals and Nationals sit around the Federal Cabinet table (not counting COAG meetings)? Then how come Arthur says the Liberals effectively ... but there's a deeper problem here that no amount of snark can address.

By repeating this idea, here and elsewhere, that the Coalition pretty much won the last election - how does someone like Sinodinos expect Liberals to lift that extra bit necessary to actually win government? The smugness that comes from having "effectively defeated" Labor comes from the same toxic swamp as the resentment at having been actually defeated by Labor and Gillard, which leaves the Coalition in a sorry place from which to campaign. You can't gee up the believers and nor can you attract the uncommitted with this bipolar approach of smugness and resentment.

Regardless of whether he makes it to the Senate, Sinodinos is NSW State President of the Liberals. He's meant to have strategies about how the Liberals can get those extra votes, seats and donations necessary to improve on the last result. How can he do that if government is "effectively" in the bag?

Strap the seatbelts on for a sudden lunge into history:
The Fraser government of 1975 to 1983 was very active and implemented a variety of measures, including for the environment, but the perception within the Coalition was that it was an opportunity missed to push through more radical economic and social changes.

Whitlam was so on the nose that Fraser did not need a radically new policy manifesto for the purposes of political differentiation.

The subtext of Fraser's policy framework was the restoration of a sense of stability after the chaos of the Whitlam years.

For example, the Liberals' industry policy promised to give Australian industry the protection it needed.
Right there is the intellectual failure of the reactionary conservative approach, embodied by Gerard Henderson and others, which says that Liberals must never initiate policy but wait for Labor to do so and just knock that down.

Australian industry didn't "need" protection in the 1970s. Protection from what, from whom? In 1975 Mao Zedong was implementing policies directly opposite to those that have made China such an economic powerhouse. Fraser could never have delivered economic stability with protectionism. It offered no defence against oil price instability, which had a similar impact to the economy then as the riptides hitting our floating currency exchange rates do today (and no, this isn't being smart after the event; the oil shocks of 1973 should have seen at least one Liberal MP or candidate, just one, rise above the storms over Junie Morosi's knickers or Al Grassby's ties and give some serious thought about the sorts of issues that Paul Keating worked out a decade later).
The frenetic pace of that era, culminating in the dismissal of Whitlam in 1975, was not conducive to new policy development or thought leadership. The result was that the Fraser government never settled on a clear philosophical direction.
Sounds like a pre-emptive excuse for the vacuity of the Abbott frontbench.
The struggle over the policy direction of the Coalition continued in opposition but was largely resolved in favour of the market as reflected in the Coalition's economic policies at the 1993 and 1996 elections. This consistency of approach served the Liberals well in government and while Work Choices may now be seen as a bridge too far for the punters, it is fitting that Howard went down fighting for another significant economic reform.
Workchoices made bugger-all difference as economic reform. It was too legalistic to enable nimble responses by Australian business to changing market conditions - and the fact that Arthur refers again to his fellow Australians and would-be constituents as "punters" shows how silly the assumptions behind it were politically.

Firstly, workplace relations reform was not accompanied by an upsurge in skills training; the absence of skilled workers bit us hard in 2007-08 (and when I refer to "us", I mean all involved in the Australian economy - not those Liberal MPs and staffers forced into alternative employment after Kevin 07).

Secondly, take an Australian company like Bluescope: Chinese steelmakers have been emerging as a competitors since before Howard came to office. As recently as 2006 they faced the prospect that China would become a net exporter of steel. If the good people of Port Kembla volunteered to work for Bluescope for free, like they do at school tuckshops or community sporting matches, then there would still be no saving a company so badly managed.
In the face of another Whitlam scenario, the Coalition should not waste the opportunity for policy boldness.
But it has already: its only policy is to cut $70b from the budget, a scorched-earth approach from which no policy initiatives can survive.
If the punters have stopped listening to Julia Gillard, then surely her scare campaigns against Coalition plans will not wash with them.
If you keep calling us punters, Arthur, maybe she's worth a listen - particularly after she seems to be delivering the goods now. Read that sentence again: a lot rides on that first word, hardly a vote of confidence in the more rabid Coalition boosters at The Australian.
This is not a counsel to reproduce a radical economic blueprint such as the 1993 Fightback platform but the economy has reached a tipping point. Costs are rising relative to overseas and some industry sectors are in recessionary conditions.

... Once voters no longer feared for their jobs, they were free to jump on the government for wasteful spending. Labor's economic credentials have not recovered.

The public is ripe for a different approach in which government harnesses market forces while setting strategic direction.
The Coalition can't deliver this strategic direction.

Sinodinos is right about the politics of Rudd's neo-Keynesian approach: Labor gets no credit. He overestimates massively the ability of today's Liberals to come up with any sort of coherent direction, and is wrong to assume (and represent to others) that it is baked into Liberal DNA and that it can or will just be trotted out at the next election.

For example: does our country need a steel industry, and if so why? Labor have an answer to that, borne from its history and the hold that relevant unions have over it. What is the Liberal answer to this question (never mind what the Liberal answer to Labor might be. Reaction is no good)?
Higher productivity growth will follow a more flexible industrial relations system and address the No 1 issue in the country: the cost of living.
This was why Workchoices failed politically, Arthur. Any workplace relations system that depresses wages and increases job insecurity makes cost of living concerns worse, not better, and counts against parties promoting reform in this area.
The test of government measures today must be whether they increase supply relative to demand, reduce the costs of doing business, incentivise work and investment and encourage exports and import substitution.
Nothing about skills. Nothing about the sorts of onshore processing mandates promoted by people like Paul Howes. Trimming a bit of red tape is not going to help, for example, lazy Australian retailers who have wilfully neglected online sales, marketing and delivery channels. This guy has been asleep since 2007.
Rather than adding new taxes, we need across-the-board tax cuts financed by lower spending to improve labour supply, augmenting skilled immigration.
That's why the US and UK economies are in such rude health.
The federal government should also move to review the pricing and investment plans of statutory authorities and utilities, in consultation with affected state governments. Following the practice of the new government in NSW, limits should be placed on dividends extracted by treasuries and the consequent pressure to raise prices.

At some stage Canberra should contemplate a package to buy out state taxes and charges that inflate business and infrastructure costs.

While old-style industry policies may be de rigueur, removing barriers to manufacturing in Australia should be examined. The Australian-born head of Dow Chemical, Andrew Liveris, has drawn up a blueprint for advanced manufacturing in Western economies. It does not rely on protective devices such as tariffs but deploys innovation and research and development to underpin smart manufacturing.
The first two paragraphs are trimming, high-intensity but low-impact stuff. The next paragraph relies on intensive investments in education, which requires the sort of multi-generational investments we've seen from countries like Germany or South Korea. Australia can't just turn it on, and with a policy to cut $70b from the budget, the Coalition won't.

Dow Chemical is hardly making lemonade with the lemons besetting the US economy and western chemical industries. Liveris may have some ideas as to how the taxpayer might spend or forgo money that he considers belongs in his company, but he should stick to his knitting before wowing easily-impressed punters like Arthur.
Another priority is to formally recognise and support the role of the artistic and creative industries, including higher education, in underpinning the rise of world-class cities that dictate the pattern of global economic activity. One important piece of unfinished business is to improve the framework for commercialising public sector research, including through better gainsharing between institutions and researchers.

Research does not need to go overseas to have access to a world market.
What? Who does he think he is, Chris Puplick?

Didn't this guy say the Liberals should emulate the Howard government? Nobody seriously believes that a government led by Tony Abbott (of Sydney and Oxford Universities, a man so populist he would happily kick down the ladders up which he has climbed) - a wannabe government looking to cut $70b from the budget - would be any good at all for creative industries, education and research.
Australia has the potential to be the Saudi Arabia of alternative energy.
And is this more likely without a carbon tax, Arthur; or much, much less likely?
In the absence of a global framework on climate change, Australia should not squander its fossil fuel advantage but energy security dictates investing in alternatives through exploitation of new research into commercial-scale technologies. This will also facilitate the transition to alternative fuels at lower cost.
Remember the Fraser Government's re-election slogan in 1983: "We're not waiting for the world". Can't happen without a shift in carbon price that wipes out rubbish like Victoria's brown coal from the options for Australia's future.
Abbott is now the default prime minister, he appeals to a broad spectrum of voters in the suburbs and the bush.
Well, he doesn't need any votes from anyone who didn't vote for him last year, does he. He's about as popular as Gillard and is holding people back from voting Liberal: he has to go.
His challenge is to harness the frustration of business in the service of a comprehensive set of policies to create certainty and confidence in the economic future.
He can't do it. There is no proof that he can turn the sow's ear of dissatisfaction into the silk purse of government-winning policies. It's wrong to think that he has either the capacity or the inclination, and wrong to misrepresent him otherwise to "punters". People like Hockey and Robb have taken it upon themselves to develop serious policy because they understand that it is important. This is not to say that they will necessarily come out with good policy, but if it was left to the leadership of The Situation there would be no policy at all.

Arthur Sinodinos and Peter Reith are the only Liberals engaging in the sort of root-and-branch rethink of policy and general direction for the Liberal Party. These are men who will be gone from active politics in a decade, and given flawed inadequate offerings like that it may be no bad thing. Years ago I would have placed great faith and hope in respected party figures like Sinodinos pointing to higher education and research as the way forward, but not under these circumstances, not with a record of which Sinodinos bears some responsibility.

Mind you, nobody a decade or so younger than Abbott (let alone Sinodinos) is taking up the challenge of considering issues as broadly as Sinodinos does. Hockey, Tony Smith, Greg Hunt, Chris Pyne, Michael Keenan, Peter Dutton: none of them show any evidence of giving any thought to the general direction of the party and the nation. Scott Morrison offers a rehash of old policies, including accepting notions such as the imaginary "queue", and has not so much as uttered a word about skilled migration (time to start scouting in Europe and the US, perhaps?). The once-highly regarded Jamie Briggs flirts with Hansonism in his own electorate. Josh Frydenberg puffs his fluff into the void of Coalition foreign policy, which doesn't make his contributions any less vacuous for their lack of comparison to those of his peers. I thought that Stephen Ciobo or Kelly O'Dwyer, free from frontbench 'responsibilities' (if you can assign any gravitas at all to the Coalition frontbench), might come out with some considerations of the broader issues before us; I was wrong about that, too.

Sinodinos shows that the next Liberal government might promise much but will be able to deliver little, and that's why it goes into the next election at a far-reaching, crippling and probably inescapable strategic disadvantage. You can only reap dissatisfaction with the incumbents if you can persuade punters people that you'd do a better job: the Coalition can't make that case, and they won't be able to blame the media for turning against them either. The hint Sinodinos offers about the next federal Coalition government is that it will not take office for many years yet.

23 August 2011

Comparing apples

When you ask a politician a question about policy that they find uncomfortable, their standard fob-off is to say "I think you're comparing apples with oranges", and then to recite the talking-points that has been prepared for them, forming a protective shell for the half-baked assumptions that you were attempting to examine with your question.

The debate over importing New Zealand apples has been fascinating for someone whose political outlook began with the whole role-of-government-in-the-market perspective, one that used to be fairly strong within the Liberal Party.

Firstly, I expected the Kiwis to be faster out of the blocks in spruiking the excellence of their apples. I thought they would present the scientific evidence that allayed the WTO in more consumer-friendly terms to Aussie consumers, in keeping with that "100% pure" image, maybe handing out free samples on Martin Place or Collins Street. WTO rulings are a start but you only get income when consumers actually stump up cash for the product. At the moment NZ need all the export income they can get.

Secondly, I expected someone in the Liberal Party to stand up for consumers (other than Mary Jo Fisher). Cheaper and better apples: what's not to like? At a time when banana prices skew the Consumer Price Index, does that not fit with notions of "easing the squeeze on Australian working families"?

Apparently not: the Liberals have no opinion on cheaper produce as any sort of bonus for consumers. To find their stance on this policy, you have to click the "Regional" tab, because apparently city-slickers in Liberal seats like me don't consume apples. People in marginal seats apparently don't consume apples. That's why they've flicked their position on the issue to the Nationals:
‘The retrograde protocols agreed today by the Gillard government to import apples from New Zealand almost guarantee the import of the disease fire blight to Australia,’ the Shadow Minister for Agriculture and Food Security John Cobb said today.
You're meant to start a press release with a statement that grabs the reader's attention. This is such bullshit that the reader is repulsed.
‘The acceptance of standard New Zealand orchard practices without on-farm checking by Australian inspectors is an abrogation of Government responsibilities.

‘The Minister in his wisdom has implemented his new secret weapon in the fight against fire blight:

“A supply chain trace-back system for apples from orchard to arrival in Australia”

‘Wow!!! The Minister has really outdone himself. This means that when Australia gets fire blight we will know which orchard it came from in New Zealand.
When negotiation fails to get you into government, use sarcasm?

Seriously though, what does this mean for a Coalition in government? Are we really going to have Australian quarantine inspectors travelling far and wide, inspecting NZ orchards and Indonesian abattoirs and Malaysian palm oil plantations? Forget the Navy, join AQIS and see the world. No wonder they hid this over on the Regional tab: Joe Hockey's search for $70b of savings is doomed once he discovers this hidden batallion of the Green Army.
‘Unlike the government the Coalition believes Australia’s robust, science-based quarantine protections must not be compromised.
That is rich: the Coalition, standing up for science and acting on the basis of its findings.

Mostly, the Coalition generate more heat than light with their blanket opposition to everything the government does. There are times, however, where you have to stop rolling your eyes and pleading for a political debate that is worthy of this country and the issues facing it - and just have a good laugh. I mean: Coalition! Science! Who is the Shadow Minister for Science anyway? Talk about laugh.
Our pest and disease-free status has been hard won and the government’s rubber stamping of NZ apples imports into Australia, without the same checks and balances applied to other countries, sets a dangerous precedent.
If the WTO were satisfied with NZ's scientific position, on what scientific basis is the Coalition not satisfied?
‘I am so concerned about the disease risk that this government presents for our nation that I have been forced to take the extraordinary measure of introducing this Quarantine Legislation Amendment (Apples) Bill 2011 to safeguard against fire blight.

‘This Bill, to be introduced on Monday 22 August ...
Here is the list of bills before parliament as at close of business on Monday 22 August 2011. Protection of the Sea, Remuneration ... what, nothing? For all their talk they really are rubbish at blocking legislation, aren't they. Why would Cobb do such a thing, break a promise in order to stand up for the science?

Oh wait, Coalition MPs are going to second-guess the scientists:
Opposition agriculture spokesman John Cobb was due to introduce a private bill to parliament yesterday ... But he said in a statement he's holding off until he and a small coalition delegation return from New Zealand.
Wouldn't it be easier just to read what the WTO said? Cobb will find NZ has scientists of its own, and people every bit as committed to stamping out fire blight as Cobb appears to be. This might be another "Wow!!" moment for the excitable Mr Cobb, and at least some Nats will get a junket in. There is no indication as to what will happen upon his return, or whether the cheap headlines of Monday 22 August will result in expensive policy of any sort.

Cobb has capitalised the Apple Industry, the first time I've seen it referred to in that way: I assume that puts it on par with the Aboriginal Industry.

All this mucking-about by Cobb and the Coalition created the perfect environment for someone to step in with a clear policy direction. Nick Xenophon represents a state with a small number of orchardists and a large number of apple consumers. You'd think he'd stand up for consumers, right? It would be consistent with every other position he's held.

Not a bit of it:
Senator Xenophon says his bill will be based on scientific evidence and will be compliant with World Trade Organisation rules ... "Fire blight is like the herpes of fruit, once you get it, you can never get rid of it, it just keeps coming back and back."
NZ apples will fuck with your mouth, eh?

If John Cobb and his junketeers can't find the science, I'd love to see what Xenophon comes up with. We haven't even addressed the whole issue of NZ as a market for >$8b of Australian exports, and their rights to exact reprisals for the sort of Cobb-lers proposed above.

Politically, the free market is down 2-0. Apart from partisan support for the government, where to turn for intellectual support in understanding what is going on?

I looked to Catallaxy to see if they had anything to say on the subject: at time of writing (and with that crucial day 22/8/11 fading into history), nothing.

I looked to the oligopolists of free market theory in Australia, the CIS and the IPA. Nothing from the IPA: the CIS had a useful summary from before last year's Australian election but that's about it. These omissions support the theory that the CIS and IPA are lobbyists rather than purely interested in free and open markets for their own sake.

The case for any sort of reform has to be made continuously by its adherents: either you believe in the idea and the benefits that flow from it or you don't. If you're going to stand against one form of restrictive trade practice (e.g. tobacco packaging) surely you will praise incidents where restrictive trade practices go down (e.g. apples), particularly measures where the technology is ahead of where it was in 1921. All the Australian apple orchardists "protected" by that measure are now dead; as are the NZ apple exporters disadvantaged by it, enacted just six years after the ANZAC bonds forged at Gallipoli.

The case for free market reform has waxed and waned within Australia's right-of-centre parties. The IPA and CIS have always enjoyed close links with the Liberals but we are now in an age where libertarians have to wonder what they get from an arrangement where they are so obviously being played for mugs.

People like Chris Berg and John Roskam keep their profile up and hope the Liberal Party will notice them, rather than offering intellectual coherence and badly-needed research capacity to a major party in opposition - a party that bears out what Hayek meant when he insisted that he was not a conservative. In Victorian Liberal preselections Roskam is everybody's third preference rather than a force to be reckoned with and accommodated, in terms of both positions and policy. A libertarian who wants to get things done must push aside the IPA and CIS, with all the dead weight of its Fellows and what have you. C D Kemp would be disgusted at this avoidance of real debate over real issues, especially with so little to show for it in terms of achievement and impact.

Whatever game the libertarians are playing, it better be lucrative - otherwise they'll have sold out with nothing much to show for it. The Coalition and Xenophon aren't going to get many votes out of apple prices either way, but a bit of relief from scaremongering as a substitute for science-led debate would have been nice. Next time farmers complain about "food security" I'm going to be sceptical, aren't you?

This leaves us with a policy outcome forced on the Australian government, an outcome that could be good for consumers or terrible for both consumers and producers in this country (well, insofar as a temporary disease-led shortage of apples might be considered "terrible"; I miss cheap bananas but let's keep things in perspective). Where do we go with this?

Public debate over policy issues is impoverished where nobody who isn't turning a dollar from one possible outcome participates in the debate. Journalism and politics both fail when it can't present quotes and stunts within that wider context. You can participate and do what you can, but you're still at a disadvantage when those who set the context are in thrall to the most hysterical advocates and especially their insistence that they are the only "players" who count.

22 August 2011

The subtle art of Dobell

The Liberals' targeting of Craig Thomson is more likely to ensure that he and the Labor government survives than falls, they are sprinting in a marathon across terrain they barely understand. I would not bet against Labor winning Dobell at the next election: their chances are better than the Liberals', polls be damned.

Dobell covers part of the Central Coast, north of Sydney. It is not part of Sydney suburbia and nor is it part of the Newcastle-Hunter region; neither the townships of Wyong or Gosford, nor the spread-out shopping malls at Tuggerah and Erina, can claim to be true centres of a region that can feel hard for visitors to come to grips with.

Yes, Dobell was held by the ALP under Hawke-Keating and by the Liberals under Howard, and since 2007 it's held by Labor again. This encourages people remote from the area to think it is some sort of pushover for a standard marketing campaign, and that it can be taken for granted. Some of those people are in the Liberal Party, and some more are journalists too enthralled by politics to not know hubris when they see it.

The stand-out Liberal candidate for Dobell would be Michael Gallacher. He's got support from the branches and among the party's executive. Had the Liberals managed to snatch defeat from the jaws of victory at the last state election, or had O'Farrell denied him the post he has worked toward for a quarter-century at least, Gallacher would be endorsed and campaigning in Dobell every day.

The next best candidate would be Doug Eaton. Eaton is a former mayor, a businessman and a Christian, but the Libs have rubbed him up the wrong way and aren't big enough to sort something out. A compliant Eaton on the ground campaigning in Dobell would see the Libs assured of winning that seat whenever the (by-)election is held.

For the kind of Liberals who fancy themselves as hard-headed political operatives, their preferred candidate would be Ken Ticehurst. Ticehurst is a proven winner, having won the seat in 2001 (would Mark Latham have become Labor leader had Michael Lee retained his seat? Discuss) and 2004. Ticehurst has a reputation as a nice man, which is handy in marginal-seat politics but far from essential in the wider scheme of things.

Ticehurst lost to Thomson in 2007 and made a mistake in lining up for another go in 2010. Ticehurst looked like the risk-averse choice that he was: he's in his mid-sixties and had made little impact over his six years in Canberra: he is not a rock upon which you build your party's future.

The Federal Parliamentary Liberal Party is convinced that the 2007 election was some sort of accounting error. For Ticehurst to run again after having been defeated is not the sign of some indomitable political will, as was the case with Patterson's Bob Baldwin or even Howard himself. It looked like a guy having another go at a cushy job in which he'd already had a good go, and from which he had been regretfully, politely but firmly evicted. The same problem applies to these people. With Ticehurst 2010, the Liberals asked "are you sure?", to which Dobell answered, again emphatically: yes.

In 2013 Ticehurst will be 68. This good man should not be put into a position where his local community rejects him thrice again. The area has a strong community of older people (what community in today's Australia doesn't?), but Coasties know that a man who is still working at 68 rather than enjoying the local lifestyle in retirement has botched it. You can be sure the so-called hardheads will blame Ticehurst for his failure and not themselves.

The other prominent Liberals in the area are State MPs for Wyong and The Entrance. Either would be insane to bring on a state byelection in pursuit of a Federal seat that is hardly in the bag, and anyway not so safe as to support longterm political careers.

That leaves a Liberal candidate who would be a chancer from the local area or someone to be parachuted in. In other words, a Liberal candidate for Dobell would be in the same position as anyone the ALP would choose.

The ALP would be mad to recycle (disinter?) the former MPs for Wyong or The Entrance. The last thing Federal Labor needs is any sort of connection with the former NSW state government. When a party loses office there is a process of sorting out what's worth keeping from what isn't, but the choice of John Robertson as NSW Opposition Leader means the party cannot begin that process without his position becoming part of the sorting-out. For the moment, assume that everything about NSW Labor is crap and keep them well away from Dobell.

Besides, it was Bitar and Arbib who are to blame for Thomson in the first place. It will be a sign of Labor's growing maturity that there is no coincidence between what those guys might want and what actually happens.

Let's take it for granted that Thomson is finished. In state politics Labor showed their talent for portraying dead bodies twisting in the wind as active and lifelike. The argument that he's done nothing illegal with his union credit card is feeble: when persuading hospital workers to part with their hard-earned and spruiking the benefits of union membership, HSU organisers raise issues other than the simple truth-in-advertising that your dues will help our boss get his rocks off. Labor owes Thomson nothing and he offers them less than nothing.

Thomson could try and charm his way out of it by cultivating an image as some sort of Casanova, but his grey persona can't go there. Being a root-rat didn't work for Ross Cameron or Bob Ellis, and is further proof against the idea that any publicity is good publicity for a politician. A guy who signs off questionable credit card receipts offers little to Labor candidates as a fundraiser and nobody will pay to hear him speak.

No amount of dull, worthy committee work will save Thomson. If you want to spend your days grinding out dull, worthy public service work, why not join the public service? Same pay or better than a political staffer but much less hours and angst, and away from the office you can shag yourself silly.

The best possible representative for Dobell would be an unpretentious person, probably not university educated but someone with enough ability to muster people and money and able to relate to both kinds of Coast residents: those who work on the Coast and commuters to Sydney. There are plenty of people like that in Dobell; the problem is not with the people but the parties.

The major parties are so small a proportion of the local community that they wouldn't know where to start in looking for such a person. The other issue is that the major parties are full of people with whom unpretentious, unaffected people would not wish to associate, let alone work closely with, and this especially includes The Situation.

If you think it is some sort of statistical oddity that the high poll ratings for the Liberals contrasts with the lukewarm respect for The Situation as their leader, go to Dobell. The Situation does not have the same ease that Howard had, or that Gillard has, in dealing with working people one-on-one or in small groups.

Dobell's major employers are in retail and warehousing/distribution: watch The Situation blame the carbon tax for the peril facing the former industry in particular. Dobell has very high unemployment: watch The Situation fake sympathy for unemployed and hardly-employable people. Dobell has commuters who get up early to get to Sydney: watch The Situation dodge direct questions about improving the rail service and fail to realise people have switched off.

The disability and injury scheme would be a huge issue in Dobell: watch the media act all surprised, watch the Liberals fail to deal with the sheer depth and breadth of it.

Watch The Situation waddle around and try to both protect the jobs of power station workers while at the same time decrying the smoke chuntering from those same stations, as said workers battle harder and harder to maintain ageing infrastructure and keep the lights on. Coal-fired power is both the only game in town and absolutely unsustainable: people know both these things and are looking for political leadership to guide them away from that logical loop. Neither The Situation nor Gillard offer that.

Gillard would impress people with her guts and determination if only she would lose her cool just once. Just once, in a speech at the Mingara Club railing against injustice, just once in telling some Alan Jones bobblehead to get stuffed. There is nothing wrong with wearing your heart on your sleeve. It is unfair to say that Coasties want someone who goes right off, but it is accurate to say they (well, enough to form a majority of votes anyway) will forgive such a person ahead of the person who is always smooth and talks in soundbites.

To the north of Dobell is the electorate of Charlton, held by former power station engineer Greg Combet. The whole idea that the carbon tax is the Liberals' rails run to office assumes that Combet won't fire up and push the issue at the core of his portfolio. The confidence Liberals have about the carbon tax as an issue that helps them reminds me a lot of the confidence they/we had in Fightback! in 1993. Never mind Gillard or The Situation, I want to see Combet confronted by local people shrieking about the carbon tax and gently talking them around.

The guy who ran against Thomson for Labor preselection two years ago must look like some sort of seer now, but it is in the nature of NSW Labor that such a person must be punished not rewarded. What they need is a candidate like Deb O'Neill, who won the neighbouring seat of Robertson.

O'Neill knocked off the mad, bad creature of the NSW Labor Right, Belinda Neal. In itself, this was not enough as the Liberals had a candidate and a campaign that was more than credible and a national swing behind them. However much the wide boys of Sussex Street might yearn to claim credit, it was O'Neill who won Robertson fair and square in her own right. As a capable politician, O'Neill has the potential that Thomson was assumed to have.

Smarter Liberals in the area have learned to be wary of those who assume O'Neill is some inevitable casualty of a Liberal swing. Bob Carr built a long career upon lazy Liberals underestimating him; O'Neill and the next Labor candidate for Dobell could well enjoy similar fortune.

The last place to turn to get an understanding of Dobell and what the (by-)election there might mean is the mainstream media. Watch the journalists who think following a politician around is the essence of their 'profession', elbowing aside people in shopping centres and giving local voters the shits. Political journalists have no idea about how issues work in the community: half-baked interpolations of polls and focus group data obscures understanding rather than improving it. They can't give you information that they don't look for and can't understand.

The Liberals will not trust any candidate, no matter how good, to campaign as their own person and run the risk of winning in their own right. The Liberal candidate for Dobell will have to be an accessory for The Situation, laughing at his jokes and furiously agreeing that traffic problems in Berkeley Vale really are caused by lax border protection. Even somebody of good standing in the community will be assumed - rightly - to have been turned into some sort of robot by the grasping crew surrounding The Situation.

For the Liberal Candidate for Dobell, a five-minute grab for national television with The Situation will be followed by days and days of campaigning to assure people that they won't go off to Canberra and get sucked in to the bullshit machine rather than represent the community.

Given the weakness of The Situation against the far right, it is entirely possible that the Liberals will preselect some proselytising idiot from a shed-church who rails against Long Jetty Skirts, Unwed Mothers or other such Sinners who abound in Dobell. The resulting backlash would be the apogee but not the vindication of the grievance politics embodied in The Situation, even as it caused Dobell voters to recoil from a self-righteous dickhead.

A Labor candidate will have to stand on their own two feet given the unpopularity of the government. The same people who took NSW Labor from power to oblivion are still running the party: their capacity to choose some voter-repellent arseclown need not be underestimated. The fact that they regard "polls be damned" as a heresy or a sign of lack of seriousness is a big part of the problem.

Even so, there is still a chance that Labor might choose a Deb O'Neill or a Greg Combet and let them run their own race, using national figures as support rather than as calipers. There is no chance the Liberals will do this: any candidate, with or without experience, will have the life sucked out of them by The Situation and his support crew.

The Liberals will probably not win Dobell without Labor's help. Dobell is theirs to lose, and the hunt for a "proven winner" shows they are more risk-averse than Labor and makes a Liberal loss more likely. As goes Dobell so go the chances of The Situation becoming Prime Minister.

16 August 2011

Fracking politics

The debate over land use with gas extraction (and other mining) versus farmland is vital for Australia. Do we have to go grubbing for every gobbet of gas that may or may not be out there? Do we have to transport gas vast distances across the continent or is it better to just pipe it from under our feet? If we screw up our continent at a deep, structural level, a few degrees' warming won't matter and we'll all have to take to the boats and find a refuge where people won't laugh at us.

This issue gives rise to moral and legal issues every bit as big as those arising from the Mabo and Wik cases. Politically, it is an existential threat to the Nationals. It is every bit as serious and far-reaching for them, and the Coalition, as Communists and Catholic worker movements fighting over the ALP during the 1950s. Only now are the Nats starting to wake up to it, apparently:
The opposition spokesman for resources and energy, Ian Macfarlane, said prime agricultural land should be exempt from mining altogether. Mr Macfarlane, who lives in the Darling Downs where coal seam gas is heavily concentrated, said "in terms of prime agricultural land, the very best land in Australia, there needs to be a clear exemption for that land from mining". But he, too, rejected the Greens bill, saying it was a ploy to wedge the Coalition.

"It will be a cold day in hell when they are the friends of farmers," he said.
He doesn't just live there, or sleep there. Macfarlane is the elected representative of part of the Darling Downs. The runoff from that land, whether artificial nutrients from fertiliser or mining residue chemicals, contaminates a vast swathe of the country's productive capacity. Nobody with any understanding of politics begrudges Macfarlane for standing up for his patch.

In his shadow ministerial capacity, however, he has a wider responsibility that isn't addressed by that statement (or which reveals more about his thinking than might be wise politically).

There is plenty of farming country around Australia which is not Prime Agricultural Land (good luck to those who'll have to draft the legislation defining that term), but which nonetheless regard themselves as farming communities and Coalition voters. If Macfarlane is only sticking up for squatters on big holdings in black-soil country, the Nats and the Liberals can give up on dozens of rural seats that form the core of their political base.

Macfarlane's snarl at the Greens is not the sort of idle comment you'd expect from his leader: it is more like a defensive measure from a cornered animal, aggression as a transparent mask for mortal fear.

Labor went through something similar with the decline of manufacturing industries and unionised workers, but it has had a generation to adjust while the Coalition faces a collapse at the next election: just as government seemed so tangible, so close.

The main threat to the Libs and Nats is not the Greens in themselves. Your standard urban Greens activists, with their multiple piercings and scent of patchouli, are going to experience a slight increase in the Green vote in rural electorates but can hardly claim authentic leadership of particular local communities and organic representation of their concerns. The main threat posed by the Greens is that they funnel preferences away from the Coalition toward local people who had not been particularly political but who decide to take a stand on this issue, and who get swept up in activism to the point where they start knocking off Libs and Nats from key political positions (and, who have been forced from a livelihood compromised by aggressive miners whose half-baked PR strategy annoys more than it allays).

Tony Windsor built his career by portraying himself as the people's champion against physically and mentally remote public servants - and including the Nationals as part of the problem. This is also the ground that Katter has slapped his brand-name on: Farmers First and Always. Liberals and Nationals have a massive task in finding and implementing a political solution (from which laws and public policy measures flow) that stops Windsor wannabes from pushing the conservatives off the land and into the suburbs).

Canberra commentators go on and on about how freaky the current configuration of the government is, kept in office by rural independents (leaving aside for a moment the Members for Melbourne and Denison). If the Coalition botch the politics of this issue, as they will under their current 'leadership', the current parliament could be the model for future parliaments: city-based brand names parties with city-based leaders jostling for minority government with coalitions of sui generis rural-and-regional independents. Tony Abbott won't be able to make that work for him or his party either, and neither will anyone else accustomed to parties that expect and get tight control over their members.
Senator Joyce said if the Greens were serious about protecting the property rights of farmers, they would broaden the private members' bill to also override state laws that prevent the clearing of native vegetation.
See, there's a time for ambit claims and a time when issues like clearing becomes a distraction from truly vital all-encompassing issues. Joyce is pissing at a bushfire, he's warding off a flood with a mop, he is showing his inadequacy to face the task before him.

Same applies to Abbott:
TONY ABBOTT has said prime arable land should be protected from mining but has rejected supporting a Greens bill that would prevent miners having untrammelled access to farmland.

Mr Abbott said yesterday mining and farming were important but the coal seam gas issue was primarily one for the states.

"We support the mining industry but we don't want to see prime agricultural land destroyed," he said. "We think the rights of farmers should always be respected.

"It's important that we come to a balanced approach which acknowledges the importance of the mining industry to Australia's economic future but which protects prime agricultural land and respects the rights of farmers."
As usual, Abbott is trying to cover all bases. If he faced the sort of light-and-fluffy media coverage he has enjoyed throughout his career, and if "punters" take their media at face value as the journosphere would assume, he would get away with that. On this issue, however, hard choices must be made - and Tony Abbott cannot make them.

Abbott's first task should be to do what the Nationals are doing, and shore up the base first. Unlike the Nationals, this need not mean siding with the farmers against the miners, but in political triage the farmers need public attention first. By going into a flat spin of all-things-to-everyone Abbott shows once again he's not a man for complexity under pressure. Even after many, many examples over many, many years, Canberra commentators who are both highly experienced and half-witted continue to claim seriously that Abbott really has an option to "flick the switch to a more positive agenda". These are the wrong people to help us understand how we are governed.

To put it simply, but hopefully not flippantly, farmers and gas extractors are not in a win-win situation. Use of particular land is often mutually exclusive and a decision one way or the other can be hard to reverse. There's more to it than simply standing up for farmers over miners (Windsor and Katter own that ground and the Nats and Libs have not fully reclaimed it). There's more to it than simply asserting the reverse (foreign gas extractors might have plenty of cash and be willing to donate it to friendly political parties, but in all other respects they offer bugger-all as a political base. You can't eat money and you can't just stuff it into ballot boxes either: nobody wants or needs a gold-plated how-to-vote card).

The whole model by which Tony Abbott and other modern careerist politicians have got to where they are involves being ignorant of issues except for the way they have been framed by others, picking a side and fighting for one interest or another over that issue, ignoring any collateral damage to those with greater knowledge of the issue and whose stake in that issue goes beyond "the media cycle". This has obviously been effective to some extent for the participants but it has meant important issues become lumbered with legal and policy outcomes that don't really address the issues.

As recently as the 1990s we saw Mabo and Wik transform traditional legal understandings of property title. Farmers and miners argued their corners and they developed a solution which balanced their interests against those of traditional owners. The political campaign against this, waged by the Libs and Nats with a support cast of "culture warriors" like Windschuttle and Chris Kenny, had the faint whiff of racism about it. By the late '90s traditional owners faced a harder task in establishing their claims: another one of those Howard government triumphs that left everyone but a small number of participants worse off and cheapened.

Racism won't play in this debate. Gas companies are often but not always foreign-owned, and so are vast tracts of Prime (and sub-prime) Agricultural Land. It wouldn't be politically incorrect so much as fundamentally dumb strategy to inject an element into the debate that has no place there, that increases confusion over what is already fraught and complicated. Bob Katter himself has been careful not to do so, and he has greater standing in dealing with Aborigines than the entire Coalition and the rest of the parliament put together: for all that, he cannot vouch for or rein in some of his more exuberant supporters and the candidates who will be his political franchisees, who are almost certain to play that worthless card in this debate.

Abbott too has not played the race card, one of the few things he can be proud of; but he hasn't achieved much else either in this debate. His verbal discipline under pressure isn't great and the Stockdale re-election shows he always cleaves to the far right when it really counts. That mealy-mouthed bullshit quoted above isn't a policy, and it won't even hold off a media that has magically become less enthralled. People can be "respected" even when the decision goes against them, but when everything goes against them they may not accept either the decision or those who make it.

It isn't good enough to flick this issue to the states. Ever since Bolte, Askin and Bjelke-Petersen ganged up on John Gorton no Federal Coalition leader has been able to use that as the excuse that trumps all others. Abbott is the most anti-states leader the Liberal Party has ever had: for him to claim "states rights" would only show that patriotism isn't the last refuge of people like him. With Coalition governments in three states (and more than likely to win the next elections in the three states Labor governs currently), such a feeble defence would be unsustainably, lose-more-credibility-than-you-gain stupid.

That leaves us with the current federal government. I'd back Gillard to grind out some lawyerly behind-closed-doors agreement that kind-of addresses the interests of miners and farmers as represented behind said doors. The record of this government suggests that any such agreement would please no-one with intense focus on the negatives, fatally fracking any rose-coloured framing slapped on it by so-called issues management professionals within the government. Under the rules of transactional, PR-driven politics such an outcome means you abandon the issue entirely and keep looking for a good headline (until Tony Abbott dumps all over your lovely headline, whereupon you just keep on looking, looking as though your whole way of operating isn't inherently broken).

Some issues are so pressing, so important on so many levels to so many people and so many big corporate interests, that they cannot be abandoned and will not be shunted off the political stage. One of these is the issue of managing land use conflicts between gas extractors (and other miners) and farmers:
  • The Nationals can't address the issue, being inseparable as a political force from farmers.
  • The Liberals can't address the issue, because they're led by someone whose idea of rising above a fight where he can't just pick a side is to be mealy-mouthed.
  • The Greens, Katter and Windsor (and local activists so busy coming to terms with ideas like BTEX that they can barely articulate the predicament that may lead them to where the Greens, Katter and Windsor are today) can't address the issue because their political operations and perspectives do not encompass the wider national interest, of which (yes, Virginia) foreign-based corporate interests do form part. These capacities and perspectives may emerge over time but in 2011 it is more hopeful than true to assert otherwise.
  • Then there's Labor (you there, stop laughing). They should be able to do more than gibber about "sovereign risk". They are the political heirs of those who came up with the legal framework around Mabo, the same crowd who were powerless/disinterested to stop it becoming the half-baked legal morass it is today. The farming-mining conflict affects a far greater and more densely populated part of the country than so-called terra nullius ever did.
No Australian who is neither a farmer or a miner (and that's most of us) wants to see the water table fracked and/or the land ravaged with DDT and superphosphate.

I don't have a solution to this issue either. Not being a Liberal any more I do have respect for those who are working to find one. I have no respect for those clogging up the country's political offices and just fighting one corner, confusing themselves with lobbyists; or trying to be all things to everyone, or ignoring the issue while jonesing for the magic headline/TV image that will render us all as forgetful as they.

09 August 2011


In the media and other forums for public debate there is a consensus among economic commentators saying that Australia needs to boost productivity, and that an important element in that is greater labour market flexibility.

I'm fascinated by the absence of "productivity sceptics". Is the economics of declining productivity truly settled? Where is the quibbler armed with stats determined to prove that labour market productivity is not going down, but up? Where is the person who says that because they and everyone they know work like dogs, the idea of "declining productivity" is crap (or at least "just a theory")? Who dares to take on "political correctness" and say that the Fair Work Act is not the usual half-arsed political compromise but the very pinnacle of legislative achievement - and that those who disagree hate Australia and Australians, and should be thrown out to sea in a chaff bag?

If there were any productivity sceptics - and I'm not one - then Andrew Michelmore would definitely be described as 'elite'. At the very least, a jumped-up accountant should not be describing anybody as "soft".
"People can't be bothered moving 25 kilometres to get a job because they will live off social welfare instead, and it's a real worry for me watching Australia have a luxurious time at the benefit of our relationship with China," he said.
People can't be bothered moving 25 kilometres to get a job in an era of <5% unemployment are the very sort of people who are not wanted by the mining industry. They don't have the combination of a work ethic and skill with machinery that mining operations need. Michelmore's worst nightmare would be to give him exactly what he says he wants: empty out the waiting areas of Centrelink offices in low-income, high-unemployment areas of Australia and send them to mining sites, ready to start the next shift. You wouldn't have to send them far. Some of the highest unemployment in Australia is in the Illawarra, south of Sydney, right near some of Australia's busiest coal mines. The same goes for the Latrobe Valley in Victoria. When Aboriginal communities in remote parts of the continent negotiate permissions and royalties with mining companies, would it not be too much to ask to offer jobs to locals rather than fly people in from the coastal cities? Andrew Forrest's Generation One initiative seems to be the most significant step in that direction, but even it may be accused of being a PR exercise with little to show for its efforts.

The good news for the mining industry is that there are thousands of Australians capable of physical work for long periods under arduous circumstances, and who have skills and experience with specialised machinery: farmers and farm-labourers. Some of them are grey-hairs and women. Until recently most of them were unemployed or underemployed: rather than tootling about on dusty farms or mooching around dying country towns, these people should have been out at the mines building up capital to sink back into their farms (assuming those farms could ever have been productive).

Instead, the farmers ignored long-range forecasts by CSIRO scientists that warned of extended drought. They ignored generations of experience that said that droughts in Australia tend to end with flooding. They screamed for handouts and got them, far above the standard welfare payments.
Mr Michelmore said more seniors and women should be returned to a workforce that was dominated by people with "airy fairy", "idealistic" and "altruistic" attitudes.

"We need to get the grey hairs back into industry and working, we need to get more women involved in work," he said.

"We need to get some hunger and drive back into this country, we are becoming soft."
Grey-hairs are back in the workforce because business leaders like Andrew Michelmore can't keep their share prices and dividend payments high enough to maintain their superannuation payouts.

One of the key drivers of increased productivity and economic performance for Australia is education. Grey-hairs have a role in passing on what they know; but to do that they'll need the kind of altruism, and an "airy-fairy" faith in the future, that Michelmore decries. Increased productivity will always elude us if public servants from foreign governments business leaders are going to send mixed messages like that.
Mr Michelmore added that Australia needed to be putting its money into infrastructure projects, and warned that China would "look elsewhere" for investments if Australia's regulatory environment became too complex.
No regulatory environment could be simpler than those of many parts of Africa, where you bribe the local dictators and put up with infrastructure far worse than Australia's. Australia is more attractive than such locations and we shouldn't let clowns like Michelmore bully anyone into believing otherwise. Never mind luncheon venues in Melbourne, why don't you piss off to Kinshasa or "elsewhere" and not even mention anywhere so "complex" as Australia?

Who is this Michelmore anyway? He came up through Western Mining Corporation and sat at the feet of Hugh Morgan. Morgan offset mediocre economic performance with regular commentary about wider issues, hoping that "boldness" and "vision" might cause people to blame others for his shortcomings. The more his ineptitude made itself felt on WMC's bottom line, the harder he shook his fist at Hawke and Keating's "socialism". It is because of Morgan and Michelmore that Western Mining Corporation collapsed in the face of a mining boom, broken up and run by people who can actually make more money than they spend and who know what to invest in - not Collins Street popinjays making idle chat over lunch.

In a rare moment of lucidity, Gerard Henderson points out that flexibility is an issue across the workforce:
The mineral industry [sic
Indeed it is. Henderson is right to decry the lack of labour market flexibility in that industry, as well as acknowledging that it is hardly foremost among that industry's problems. Who does he blame for this lack of flexibility? The same people he blames for everything:
... members of the industrial relations club, who favour highly regulated labour markets, along with government-funded academics and scientists ...
I'm surprised that ABC Radio National, Robert Manne and Stalin didn't cop a serve while he was at it.

Henderson's reference to "the industrial relations club" brings to mind his seminal 1985 article in Quadrant - well, it was seminal in its day. The idea that the Industrial Relations Club persists today to the extent that it did in 1985 is silly.

It took Peter Reith to nail the culprits for labour market inflexibility in retail:
... at the behest of the powerful shoppies union, Gillard disallowed working hours of less than three hours in the retail sector. This immediately cost young people their after school jobs in newsagencies and like businesses. Gillard said she would get the kids back to work, but after nearly two years the problem is still not fixed.
Quite so. The "shoppies union" (SDA) is run by people who, like Gerard Henderson, were formed politically by the National Civic Council in the 1950s. Casual workers, particularly younger workers, tend not to join the union but if they do, they can be more active and harder to please than an organisation busy with other agendas would like. I've had a go at them and believe the behind-the-scenes model is unsustainable in a modern democracy, particularly when you see how unsustainable that "hidden" agenda is. Too socially conservative for Labor, not as market-oriented as the Liberals and too urban for the Country Party, they are more focused on infiltrating political parties to exert power behind the scenes. Henderson is not going to bag these people because he agrees with what they're trying to achieve and the way they're doing it.

Just as the United Auto Workers of America bear some responsibility for locking employers into agreements that helped bring about the decline of US vehicle manufacturers, so too the SDA bear some responsibility for the complacency and lack of innovation besetting that industry. That said, the SDA are not the whole problem with retail.

Reith goes on:
And the [Productivity Commission] notes that the restriction is not just about young people but for all casual workers.

There has been an ongoing effort to solve the issue but the PC says of the latest bandaid solution "there is a risk that the restriction will have a perverse effect on many of the casual employees it is seeking to protect". "It may ... create an incentive for retailers to engage students where they might have otherwise preferred to have engaged a more mature or experienced adult worker".
Quite so: retail management skimps on deploying staff, so that shoppers seeking assistance with their purchases cannot find it and give up (and stores forgo not only intended sales but upselling opportunities). Young workers with minimal training and minimal recompense lack the experience and commitment to add value to the retail experience for customers. We all have examples of asking a shop assistant for something, only to be told to go to a competitor or to a website.

The entire burden of labour market productivity in the retail industry doesn't fall on young and/or casual workers, nor on regulators; it falls upon managers who've complacently assumed that what has always worked in retail will continue to work, and that the internet was only an issue for far-away Americans and low-spending g33ks. Moribund, risk-averse managers can't demand greater flexibility from a workforce that is considerably more flexible than they are.

Australian retail needs an operating model other than cheap and unskilled labour, and there are $billions on offer for finding it. Australian mining needs to be smarter about the workers they hire, and even in using machinery to further reduce the number of bodies they put in harm's way. Sometimes you've just got to stop calling for flexibility from others, and start being flexible yourself. There are productivity issues in other industries I'm sure, but the media seems only to focus on those two.

The productivity issue in journalism seems to be hoping for more revenue while churning out more of the same: a bit like retail. I work in an industry whose sole justification is productivity improvement, but I'm not going there in this forum.

Moribund, risk-averse managers can't demand greater flexibility from a workforce that is more flexible than it gets credit for, and whose flexibility is not enhanced by any sort of investment, e.g. in training or incentive-based wages. You don't design simplistic and rigid jobs to avoid training, and then complain that low-paid people in rigid jobs aren't flexible. To give the SDA their due: the union often provides staff with the only formal training they receive.

Moribund, risk-averse managers can't demand greater flexibility from a Liberal Party that is also struggling with attracting and retaining market-share of votes. Reith cruelly taunts the Coalition:
The Coalition's response was that the Government's proposed review of the legislation should be brought forward. But the review will be an internal one, the bureaucrats will be handpicked by the ACTU and if the report says anything useful it will be buried.

A comprehensive review is a good idea, but for the retail sector we now have the PC report. The Coalition said it will respond to real problems with practical answers. Well, the PC has spelt out the problems in graphic detail so how about some policy?
How about what? The most flexible regulatory system for employment this country ever had was WorkChoices. It was so flexible only lawyers could understand it: it gave the Taxation Act the immediate impact of graffiti by comparison. It was so flexible that unemployment has higher when it was in force than it is today. It was so flexible that when the politicians who introduced it copped some heat, business leaders like Andrew Michelmore went quiet and shut their wallets, creating a disincentive for the Liberals to rally when they called. It was so flexible that the government that enacted it got chucked out on its ear and a member of the Cabinet who survived (a former Industrial Relations Minister) has publicly, repeatedly promised not to reintroduce it ... or anything else either, and there's no reason to buy from someone who sells nothing but hype (helping create an environment that dissuades people from buying retail - it all fits together).

When it comes to flexibility, government regulation and apathetic, insufficiently trained employees are the least of our worries. Those who can overcome those and other problems are the sort of entrepreneurial heroes that business and conservative people (and even libertarians such as the CIS-IPA duopoly) should applaud.

If I was a journalist I'd rely more heavily on cliches than I do, so let me end this piece with two of them:
  • Be the change you want to see; and
  • Shut your fucking trap and get on with it.