Friday, November 30, 2007

Training Labor's New Ministers

Having been elected to government on 24 Nov 2007, Kevin Rudd has announced his new ministers. It includes two members who have previously been Ministers: John Faulkner and Simon Crean. Warren Snowden and Nick Sherry have had experience as Parliamentary Secretaries. The full list will shortly appear at the Australian Parliament House website . Three members of Cabinet have less than six years Parliamentary experience: Penny Wong (5); Peter Garrett (3); and Tony Burke (3).

While Kevin Rudd will have appointed minders to help his new team, it is important that neither they, nor Kevin Rudd, rule his ministers in the same way that John Howard did. Such close control would increase the risk that Kevin Rudd's Ministers will be as stifled, robotic, and mere 'appendages of power', as were many of John Howard's ministers.

It is likely that some will make mistakes. Unless the mistakes are serious, new Ministers need to be able to learn and be guided, without the heavy handed "I'll tell you what to say, when, where, how and to whom you will say it" approach that John Howard used.

That is, Ministers need a "structured workplace learning" program, similar to those used in trade and vocational training. This will help ensure that Ministers grow into their job and develop Ministerial skills that are both specific to their portfolios, and which could be applied elsewhere.

Such a program will not only help to create more effective ministers, but also ministers that more open and responsive. That could only benefit everyone, and strengthen our democracy, and develop trust from the media and voters.


Wednesday, November 28, 2007

Difficult Choices for Libs

Today, the contest for the Liberal Party leadership narrowed after Tony Abbott withdrew because he would not get enough votes. The leadership will be contested by Malcolm Turnbull and Brendan Nelson.

Turnbull seems to have won a number of vox populi polls in the media. Whether that is reflected in the party room is another matter. Of the two, Malcolm Turnbull is the better speaker, and more words of substance seem to come from him than ever came from Brendan Nelson.

Of the contenders for the Deputy Leader, SA's Chris Pyne and WA's Julie Bishop are the most discussed in the media. While he is a qualified in Law, Chris Pyne seems to only ever have worked for the Liberal Party, both before entereing Parliament in 1993, and as a Member of Parliament. This almost total lack of real-world work might well hinder his ambitionis. Julie Bishop has worked as a solicitor and barrister for almost 20 years, had experience on the board of SBS and in an institute for managers.

Andrew Robb, the former Federal Party Director, has less experience in Parliament, but more political nous that Chris Pyne or Julie Bishop, and might well have a steadying influence on Malcolm Turnbull.

The Liberal Party will elect its new leaders tomorrow (Thursday). My prediction, based on CV's and Ministerial & political competence is: Malcolm Turnbull & Andrew Robb.

What I think the Liberal Party will do? I think they will elect Malcolm Turnbull as Leader, with Andrew Robb as Deputy; Chris Pyne and Julie Bishop might withdraw, leaving Robb unopposed. They'll be rewarded with shadow Ministries with increased standing in the Party Room.


Post Script - Thursday
Today the Federal Liberal Party elected Brendan Nelson as its leader; Julie Bishop as Deputy Leader. Given Brendan Nelson's somewhat taciturn manner, Julie Bishop will provide some "personality" to the leadership. She should be able to hold her own in Parliament, given her prior performances.

Tuesday, November 27, 2007

Fixing Public Hospitals

One of Kevin Rudd’s election platforms was to negotiate better funding for public health with the states. The requirement is better health administration. His Kevin07 wesite says:

“Under Labor's Plan, in order to access funds, the States will be required to sign up to achieving specified health outcomes, such as:· Reducing avoidable hospitalisations and readmissions to hospital;· Reducing non-urgent accident and emergency presentations;· Reducing waiting times for those people who require essential hospital services such as elective surgery; and· Providing more appropriate non-acute care for older Australians.”

There are some specific problems that we, individually, collectively and politically must face. There has developed over some years a culture of division between the states and commonwealth, based largely on political differences and prejudices. This has lead to:

  1. cost-and-blame-shifting, as each tries to limit the $ exposure for “its” responsibilities.
    A reduction in the proportion of GDP provided by the commonwealth for public health care provided by the states. At the same time, the Commonwealth was happy to provide funds to support private health insurance (companies)and private hospitals.
  2. The costs of providing health care have been increasing at a rate faster than inflation and economic growth, and the states have borne the brunt of extra funding required for public hospitals
  3. Increasing “gaps” in health care, resulting from the previous two conditions.

Recent events in NSW at RNS emergency dept and RPA maternity are examples of how health care and its administration has been driven by budget constraints and not health planning and funding.

Kevin Rudd is offering an extra $2 billion over 4 years. Economically he can’t just pump money into the economy – he will need to restrain spending or eliminate unnecessary government spending to maintain an economically neutral position. The Commonwealth and States, and NSW in particular, will need to develop significant restructure plans for health administration, to be implemented over 5 years. Its likely effects will include significant changes in personnel, business process reengineering to change the way and culture of doing things, and higher levels of political accountability and responsibility.

The effects of such changes will take at least ten years to be fully felt. This requires planning well beyond the 4-years of budget forward estimates, but it must be done.


Liberal Woes Self-Inflicted

The Liberal Party implosion since it lost the election last Saturday is not surprising.

The leadership void and lack of clear direction has occurred because: John Howard ruled “his” government with an iron fist; he used his own staff to monitor and micro-manage his Ministers and Parliamentary Secretaries; he used some government members to ensure MP’s and Senators complied with his wishes. In their compliance, Liberal Ministers, MP’s and Senators have served the interests of the Liberal Party – a service Peter Costello mentioned when declining to be nominated as “leader of the Opposition”

Such “strong”, overbearing and dominating leadership stifles proper discussion, suppresses opposing views, inhibits the desirable effects of conscience & ethical principles, and stifles leadership qualities. One measure of the dominance exerted by John Howard is the number of his former Senators and Ministers now saying that they “told him (John Howard) to go”; Peter Costello has declined the leadership, having been “promised” the Prime Ministership which is now not there for him. They can say this because John Howard is no longer their leader, and he's not in Parliament any more.

Senior Liberal Party members are also now saying they should “dump WorkChoices” and support ratifying the Kyoto Protocol, and its attendant environmental targets. This is probably the correct policy direction, but it will seem to smack of hypocrisy, given their previous vigorous public defence of John Howard's position.

It also put members of the Coalition in the position of defending John Howard, even if they had misgivings. Here the list extends to WorkChoices; funding of public education, public hospitals and health; “children overboard”; attack dogs on the wharves; the Tampa affair, where Australia clearly breached its obligations under International Maritime Law; and immigration detention centres & “the Pacific Solution” to refugees. The drive to make unemployment at less than 4%, with rising inflation from the volume of money pumped into the economy hardly smacks of responsible economic management that would “keep interest rates at the lowest levels for 30 years”.

John Howard, driven by his own obsession with power, has done much to tear apart the fabric and principles of the Liberal Party, and poisoned the political careers of many Liberal Party MP’s and Senators.


Sunday, November 25, 2007

Rudd as PM But Who'll Lead the Lost?

Australia has a new Prime Minister-elect. Kevin Rudd claimed victory after a phone call and concession speech by John Howard. As the first Labor Prime Minister for 11 years, Kevin Rudd has become a hero to his party.

Both leaders have displayed graciousness - they're obviously not in Parliamentary Question Time - and are to be congratulated for that.

John Howard could well lose his seat, Bennelong, which he held since 1974. As the Liberal and National Party, which also lost seats, began preparing for life in opposition, there came another blow. Just hours after ex-Foreign Affairs Minister Alexander Downer was reported saying that "the best thing the Liberal Party can do now is get behind Peter Costello as leader", Peter Costello issued a statement saying he will NOT contest the leadership of the Liberal Party! Dear Alexander, did you not call Peter first?! Peter Costello is the Liberal Party's best performer in Parliament. There are few other worthwhile candidates: they will probably have to choose between Brendan Nelson (of marginal competence as a Minister), Malcolm Turnbull (known to leak Cabinet discussions, and waver under political pressure), or 'mad-monk' Tony Abbott.

Even if he retains his seat - a big IF - John Howard will not lead the Liberal Party. Peter Costello's decision not to lead them will leave the Liberal Party floundering, probably for some time, simply because there is no-one with the same political strength to replace John Howard. That was crushed by Howard's iron fist in the Cabinet and Party Room. Disunity and internal mistrust could be the characteristics of the new opposition. None will want to face Parliamentary questions on on WorkChoices, Iraq, Health and education funding, Federal-State relationships, or the Nationalist principles John Howard wanted.


Friday, November 23, 2007

NSW Libs' Right-Wing Attack Lindsay

Five Liberal Party members have used leaflets giving false information about Muslim group supporting the ALP has backfired.

The Muslim groups on the leaflet doesn't exist, and the statements about the ALP are false. Involved in the distribution are at least 5 Liberal Party members and supporters. The most significant members of the group that misrepresented Muslims and the ALP are:
  • NSW Liberal Party executive member, Jeff Egan
  • Retiring Liberal MP Jackie Kelly's husband, Garry Clark
  • Greg Chijoff, husband of the Liberal candidate fro Lindsay
Five Liberal Party members have been expelled, including Mr Egan. While John Howard distanced himself and condemned the action, Jackie Kelly, as retiring MP and wife of one of the participants, told the ABC it was a "joke". She said it was like a "Chaser" TV show stunt. While she thought it a joke, the Liberal Party was in full "damage control" over the stupidity of the action - an action that might be likened to Mark Latham's intimidatory handshake with John Howard, and showed the at temped bullying by him. Some will liken it to Mr Howard's "children overboard" mistruth.

Here, the action has racist and xenophobic undertones, and both Kelly and Chijoff are probably tarnished as part of the racist faction within Right-wing of the NSW Liberal Party. That the matter has been passed from the Electoral Commission to the Federal Police should stop them laughing.


Wednesday, November 21, 2007

Leaders' To-Do Lists

Kevin Rudd released his top5 "To-Do" list in an interview with The Sun-Herald last weekend.

They were:

  • climate change
  • education
  • health
  • broadband
  • computers in schools

This gives him the "soft", people-centred tasks. Signing the Kyoto Protocol and setting interim targets is largely symbolic, but allows us to have a greater say at the next round of negotiations in Bali. The Coalition won't sign, and we'll be in the back blocks, left out of key negotiations.

Education, health, fast broadband (especially for regional areas) and computers in schools will appeal to most sections of the community.

John Howard has reacted with:

  • strong economy (growth)
  • security
  • "election promises"
  • Takeover of the Murray-Darling Basin
  • talking about recognition of Indigenous people in the Constitution

The trouble for Mr Howard is that economic growth is not what is needed, and his election promises, if implemented, will drive inflation for years after he retires. Further, his economic record speaks of WorkChoices, a term he now avoids, but which he did not tell voters about last time.

He gave no detail about further "security" legislation that he wants. (shades of WorkChoices?)

John Howard believes his use of "economic management" will win votes. If voters think about his promises, and the current state of the economy, it could be political poison for him.


Sunday, November 18, 2007

Election 2007 Prediction

With the Federal election next Saturday, and many pollsters predicting a Labor landslide, the following is my prediction, based on a combination of Antony Green's Election Predictor at the ABC's Election 2007 site, polls, "history" and "art of prediction" (whatever that is!)

Labor: 76

In fact, the predictor suggested Labor 78; Coalition 70; Other 2.
However, I believe there are a few seats that will not conform to the "State-based swing" result: The Prime Minister's seat of Bennelong will possibly be retained, on the back of a "sympathy vote"; the Seat of Dobell will be a 50-50 proposition, as will be Malcolm Turnbull's seat of Wentworth in Eastern Sydney, and the SA seat of Boothby. Eden-Maonaro will be won by the ALP.

Now, we just need to wait and see.


Thursday, November 15, 2007

Howard vs Labor - the Election Promise Effects

Both major parties have now launched their election campaigns. We've had almost 4 weeks of the unofficial election campaign where travel and living expenses of our politicians have been paid by taxpayers. Many would argue that, ethically, once the election writs have been issued by the Governor-General, political parties should be paying, not the taxpayer.

John Howard, at the Liberal Party launch, promised an extra $9.5Billion to voters. This brings his total to almost $65 Billion.

Kevin Rudd, claiming the economic conservative high ground, promised an extra $2.3Billion at the Labor Party's launch. this brought his total to almost $57Billion.

The possible effects of election spending by the end of 2009 are:

  • Home Loan Interest Rates under John Howard: 11% - 12%
  • Home Loan Interest Rates under Kevin Rudd: 9% - 10%
The inflation figure from John Howard's spree is exacerbated by his ideological, but economically bad, drive to put ever more money into the hands of middle-class and wealthy taxpayers, many of whom spend it on consumer goods. This drives consumption inflation, one of the current problems identified by the Reserve Bank.

Of course, John Howard could have some "non-core" promises that he won't implement; and Kevin Rudd could increase the amount of budget surplus retained from 1% to 1.5%-2% during the current boom.

John Howard has gone for the "Go for Growth" slogan - the problem is that there is no room for growth without inflation. Both he and Peter Costello are ideologically locked into retaining only 1% of GDP, even as the economy is overheating and creating inflation. Excessive growth is NOT what the economy needs at the moment.

Kevin Rudd has gone for the "New Leadership" slogan. If elected, his leadership will be tested by the economic conditions he inherits. An overheated economy with rising inflation and significant overseas pressures. Increasing the retained budget surplus from 1% to 1.5% will be a challenge.


Wednesday, November 14, 2007

Non-Exclusive Interview - Rudd & Howard Talk

"Mr Howard, thanks for your time. I know you're busy with the election."

"Yes - so much money to give away - baby bonus, tax cuts... And so many Liberal seats to try to keep."

"But won't that be inflationary? Won't the economy suffer?"

"Inflation, schminflation - look, I won't be around next election so it won't matter .... to me at least. That'll be Peter's job, if I win"

"Yes, Mr Rudd, thanks for your time. You've also promised tax cuts."

"Yes, John, but ours aren't inflationary. See, I'm an economic conservative, unlike that economic thug, John Howard. He just throws money around willy-nilly. And it's not even his money."

"But the Reserve Bank says that inflation is likely to be higher till at least 2009, and more interest rate rises are likely. That will affect homeowners with a mortgage."

"John, Janette and I own our own home, so they won't affect us. And they won't affect the rich too much either."

"Me, too".

"Don't either of you care?"

(Howard) "Is that a rich private entity I can give taxpayer money to?"
(Rudd) "Of course the Labor Party cares - we are the caring party."

(Howard) "Any interest rate rises are because of union thugs - it's not my fault. It's not, mum"


Friday, November 09, 2007

Banks Interest in Greed

Banks have tried to "talk up" the possibility of raising interest rates by more than the 0.25% rise in the rate set by the Reserve Bank, announced on Wednesday.

They claim they have been carrying costs asociated with the troubled sub-prime markets, mostly in the US. The decision to lend money in such markets forms part of a bank's overall business strategy and business decisions are made on that basis.

Let's look at the 2007 profits for the major banks (results reported to Sept-November 2007):
"Net profit for the year to September was $1.163 billion, an increase of 11 per
cent over 2006. After adjusting for hedge fund accounting, cash profit was
$1.160 billion, an increase of 13.1 per cent over the previous year."

"3.45 billion, 12 per cent higher than this time last year."

"Macquarie says its profit for the six months to September should be up strongly
on last year's corresponding result of $730 million",
and is expecting a record
profit for the current six month period.

"met forecasts with a 20 percent rise in second-half profit, driven by strong
loan growth, and said it targeted revenue growth above the industry average in
its key consumer banking"

"For the 12 months to 30 June 2007, statutory net profit after tax was $4,470 million", a 14 percent increase, and reportedly has less exposure to the US sub-prime market.

ANZ recorded a record profit of $4.18 Billion, an increase of 13 percent.
In the face of record profits and increases of 4-5 times that of inflation, and because they admit they made business decisions that have not made as much profit as regular mortgages and bank fees, and that therefore they need to increase lending rates of existing mortgages by more than 0.25% is, I think, wrong.

If the business decisions they made are not as profitable, then they need to examine their strategic plans, and redirect their money to customers who will generate a stable return on their investment ... but not increase their loan rates by more than 0.25%.


Wednesday, November 07, 2007

Interest Rates Up - Howard says 'Sorry'

There were no surprises at all today, when the Reserve Bank announced it has lifted interest rates by 0.25%. The banks and financial institutions will follow suit.

Over the last 3 budgets (2005-2007), John Howard and Peter Costello have pumped about $70 Billion into the Australian economy in personal tax cuts alone. In May 2006, John Howard defended his tax cuts, saying they were not inflationary! He issued another $37 Billion in 2007.

His redistribution of tax money seems to favour those who are wealthier, with households in the top 10% of income taking about 30% of the tax cut money. See here.

A look at the RBA's interest rate rises shows increases in: May 2006, Aug 2006, Nov 2006, Aug 2007, Nov 2007.

The economy, for its part has had to generate an extra $100+ in value of GDP as consumers spent up big. There are only 2 ways it can do this: create more goods and services - difficult in an economy at full capacity - or the increase prices - inflation.

Part of the RBA's statement says:
Inflation in Australia has increased. ... During 2007, the pace of growth of
demand and output has also increased.

It is this growth in demand that needs to be managed. The Federal Budget needs to remove more money from the economy to help reduce demand - but that would not be popular in an election year, so political expediency takes precedence. Good economic management doesn't count.

Today, John Howard said "sorry", but 'sorry' doesn't mean "good economic management"


Sunday, November 04, 2007

Inflation - it's not my fault says Howard

On Wednesday, we will find out if the Reserve Bank lifts interest rates yet again. It would be the 6th interest rate rise since the last election. John Howard promised voters keep interest rates "at a record 30 year low".

Today, he told the ABC there are some factors that might lead to another interest rate rise: the strength of the economy, which he manages; the growing price of oil, and the drought (which is affecting food prices).

But, as with most political statements, it is what John Howard is NOT telling us that matters. In determining the underlying rate of inflation, the Reserve Bank discounts the effects of items seen as volatile, including the price of oil, and of food.

That leaves John Howard's contribution - the "strength" of an overheating economy; an economy managed by his & Peter Costello's budgets. Within hours, Mr Howard promised to pump an extra $10 Billion into the economy, as he tried to buy votes in the politically important areas of Sydney, Victoria, and south-east Queensland. These are areas with electorates he must retain to continue his (otherwise) unannounced agendas.

There are two elements in the fine print, though: the road/rail funding is targeted till 2020 - 4 government terms away; and it is as though he wants to ensure that inflation continues to grow, whatever the outcome.

Economically responsible - you bet it's not!


Friday, November 02, 2007

Madness, The Monk & The Rock Star

The last few days must have John Howard and Kevin Rudd wishing, praying, that their charges would stop having moments of madness.

Tony Abbott, Minister for Health, has been called "the mad monk". His madness erupted this week, with public abuse of Bernie Banton for (trying to) deliver a petition for PBS support for a drug to treat asbestos-related illness. Mr Banton will die from such an illness, and campaigned with unions to get compensatin from James Hardie.

Then there was the the debacle at Mersey Hospital: the Federal Government was supposed to take control, but somebody forgot to arrange for federal supervision of state doctors, and to solve the problem of not using "Workchoices" on the new emeployees. Workchoices is a particularly sensitive area for the government, and it is desperate to retain seats in Tasmania.

Then, in Victoria with Prime Minister Howard for a "policy launch". John Howard was having such a good time he kept Tony Abbott waiting to return to Canberra for a televised debate with Labor Health spokeswoman, Nicola Roxton. He was overheard saying "that's bullshit" to Roxton's taunt that he could have been on time.

All he could do was "grin and bear it" - and apologise ... often.

Today, a radio shock jock reported Labor's Peter Garrett saying to him that, if elected, Labor would "change everything" - presumably its promises and policies. And the Liberal Party wants to (as a Federal Government) take over Grafton Hospital. They haven't yet solved the (Workchoices) problems at Mersey Hospital.
Madness ... sheer madness!