Thursday, April 26, 2007

Ethics: by John Howard

John Howard will shortly appoint Amanda Vanstone to a diplomatic positioin, rumoured to be Italy. Amanda Vanstone resigned from the Senate today.

The arrangement goes something like this:
"Well done, Amanda. You have been a good and faithful servant to the Liberal Party, and me. I had to sack you from the Ministry in January, but here's a consolation diplomatic posting for you. You're not appointed on merit, we didn't advertise, and you don't have to suffer the effects of WorkChoices."

And don't think it's ever only been confined to conservative side of politics. Labor members will say NOTHING, because the Labor Party has also made similar postings.

But wait, there's more! According to The Canberra Times, "Senior Foreign Affairs and Trade Department sources say former arts minister Rod Kemp has been promised the plum post of Australian ambassador to France."

Ethical? What about moral? - No, to both questions.

But Mr Howard will make at least one appointment before the election. He will make it soon, so that the political fallout is finished before any sniff of the election.

The Analyst

Kevin Rudd & Labor's National Conference

Kevin Rudd faces several hurdles at the upcoming Labor Party Conference.

  • Uranium mining has always been a divisive issue within Labor's ranks. Twenty-five years ago it caused bitter division within the party. Not much has changed. There are several member sof his team opposed to more uranimium mining, let alone allowing the development of more mines. Among them are Anthony Albanese and Peter Garrett, the Federal Opposition's environment spokesman.
  • Industrial Relations: the announcement of the "Fair Work Australia" agency, to replace the Industrial Relations Commission. The Industrial Relations Commission has already been abolished by the Government's WorkChoices legislation. The new agency will bring together the Fair Pay Commission, the Office of Workplace Services and the Office of the Employment Advocate: all current government agencies uunder effective Ministerial control. The paln is to sidleine any political criticism of simply repealing Workchoices: a move that would cost Labor a considerable number of votes. Further IR changes under Labor would see secret ballots on strikes.

These two issues alone will be a test of Kevin Rudd's leadership. If the National Conference is seen by voters as degenerating into in-fighting, bickering and divisiveness, then Kevin Rudd will lose the Federal Election because voters will perceive, rightly or wrongly, the Labor Opposition as a rabble.

The Analyst

Wednesday, April 25, 2007

Low Infaltion Figure, Interest Rates & the Federal Budget

Yesterday's surprise March 2007 CPI figures are expected to prevent the Reserve Bank increasing interest rates again.

The March 2007 Quarterly CPI figure 0.1%, and the inflation rate for the year to March was 2.4%. However, total figures don't always tell the whole story. The Australian Bureau of Statistics data includes a "contribution" of -0.6% for food. The main contributor was falling fruit, especially bananas. However, last week we were told to expect food prices will increase sharply this year as the drought further reduces our ability to produce enough food to meet demand.

If food prices had remained the same, the CPI would be 0.7%, and the inflation rate 3.1% for the year. If that had happened, it is almost certain the Reserve Bank would have raised interest rates next week!

Nevertheless, newspapers were full of speculation that the budget will deliver more personal income tax cuts. What effect will this have on the economy? We know there are still significant inflationary pressures from the costs of child care, health, pharmaceuticals and education. In 2005, the CPI for the quarters after the budgeted tax cuts (effective July) were 3.0% and 2.8%; in 2006 they were 3.9% and 3.3%.

Three of those four figures are at or above the Reserve Bank's "comfort level" of 3% and led to rises in interest rates.

So, what about the budget, to be delivered in May? Personal income tax cuts effective from July this year will certainly lead to increased discretionary spending and create further pressures on inflation. Peter Costello will need to exercise considerable economic prudence in whatever tax reform he indulges in the May budget: but there's an election looming and voter bribes will be order of the day.

The Analyst

Thursday, April 19, 2007

An Election Campaign of Fear - Again

Prime Minister John Howard has won all his elections partly on on voter fear. There has been little positive policy from him during the election campaigns, other than assertions about how good he / "his government" is.

  • 1996: fear of Keatingomics of the Labor Party, and fear of (then Prime Minister) Paul Keating's arrogance.
  • 2000: fear of refugees / "boat people" and the horror of "children overboard" (later shown to be a lie, but politically useful during the election campaign
  • 2004: fear of (then Labor leader) Mark Latham.

In 2007, there is still voter fear to be exploited. However, this time there are likely to be opposing fears. John Howard will repeatedly tell voters to fear the unions and a Labor Government, and how they will "will reverse one of the biggest economic reforms this country has seen". Specifically we voters are being told to be afraid of unfair dismissal laws and the removal of WorkChoices / AWA's (individual work contracts).

But Mr Howard will have his own demons. There are and will be strong campaigns from unions and the Labor Party telling us voters to be afraid of John Howard's WorkChoices. This was a policy Mr Howard did NOT tell voters about before the last election. Mr Howard and his Ministers already know that WorkChoices is very unpopular with those who have been forced onto them. He, and his Workplace Relations Minister(s) have been most reluctant to release full statistics about the effects, and have been only selectively quoting "statistics" about how wonderful they all are.

Furthermore, Opposition Leader Kevin Rudd, in an address to a packed Press Club outlined his plans for IR in Australia, and those plans included things the unions did not want: secret ballots before strikes, no strikes during the course of an agreement; no pay during strikes. By so doing he has publicly stated that he is not, and will not, be governed by union demands. Much depends on how the Australian public perceives his plans.

It could be that Mr Howard has much to fear.

The Analyst

Tuesday, April 17, 2007

Missing Superannuation Payments

Australia has legislation that gaurantees 9% of wages are paid by employers into superannuation accounts. The Superannuation Gaurantee Act (1992) requires employers to make payments into a superannuation account only once per year.
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In 2001, Ansett Australia went into receivership, folded, and employees lost all their superannuation entitlements. A "levy" was introduced on all flights to make up for Ansett's failure to meet its obligations. ie passengers flying on different airlines paid extra to make up for Ansett's poor management of its employees entitlements, including superannuation.

The ABC reported that up to 8000 employers could be in breach of the Superannuation Gaurantee Act (1992). <>

The tax office apparently investigates up to 10,000 complaints about superannuation, each year! One wonders how many other employees don't know to complain, or are unaware they are being denied their legal entitlements.

Assistant Deputy Tax Commissioner Ian Read, says that many complaints occur after a company starts experiencing cash-flow problems., and there are occasions where the tax office never retrieves any superannuation money. ie the money is not gauranteed, as one would think from the title of the legislation.

If a company makes one superannuation payment in a year, at the end of the company's financial year, how much in superannuation earnings do employees lose? How much might have to be "made-up" by the Federal Government in pension payments?

I think the time has come to amend the law to require more frequent gauranteed contributions to superannuation, and possible that directors become more responsible for ensuring that the compulsory contributions are, in fact, made! Last year the tax office recovered more than $350 million in unpaid superannuation, yet there seems to have been no action taken against those responsible for underpaying, or not paying, compulsory superannuationpayments.

The Analyst

Friday, April 13, 2007

COAG Meeting - April 2007

The COAG meeting has finished with its usual "we're all different, but we can work with each other" press conference. These are stage-managed by agreement so that no politician can come out looking worse for wear. IMage is important.

But what really happened? Well, among the items were:

  • Health: $100m from the commonwealth; and $100m from the states (collectively) to improve the health, and productivity, of the population by helping those who are obese &/or who have ,, or have in increased risk of, diabetes. Also, the states will get some say in hospital training of specialist doctors. such as surgeons. They will need extra funding, over and above whatever else is needed, to pay for such training.
  • Education: movement towards a more uniform national school curriculum, and school starting ages.
  • Workplace Skills: Builders, carpenters, electricians and mechanics will soon be able to have their skills qualifications recognised when they move interstate.

  • Education: The states have called Julie Bishop's bluff. With a Federal election due in the next 6 months, the states have jointly expressed their concern over Julie Bishop's plan for "performance pay" for teachers, and have called her bluff. Her plan was also criticised by ACER, which completed a study for Julie Bishop's department. Whether John Howard will honour her promise to withhold $3 billion in federal funding to states for public education remains to be seen. I believe it would be electoral suicide for the Federal Government to withhold that funding so close to an election. The states will win ... this time.
  • Climate change: John Howard refused to accept the States' plan (adopted from Federal Labor leader Kevin Rudd) to set a target for greenhouse gas emissions by 20% by 2050. Politically, he could never be seen to accept a policy proposed by the Leader of the Opposition. However, if you don't have a target, you have no chance of hitting it. Perhaps there would have been a better outcome if the States' plan showed some differences from Kevin Rudd's plan.
  • Water: Victoria still refuses to agree to John Howard's national water plan. The Labor Premier, Steve Bracks, is supported by the Victorian Farmers Federation, a fact that must rile the Prime Minister and his National Party deputy.

Perhaps the COAG meeting wasn't all amicable discussion about the "new federalism".

The Analyst

Wednesday, April 11, 2007

New NSW Director-General of Education

Michael Coutts-Trotter was appointed as Director-General of Education in NSW by new Minister Michael Costa. It is no secret that Mr Coutts-Trotter was appointed because the new Minister wanted him. It is also no secret that MrCoutts-Trotter had a conviction for drug supply when 19, and that he spent 3 years in prison.

Today's media has been full of such stories, and it is reasonable to ask whether Mr Coutts-Trotter is a fit and proper person to head the Education department (DET). There are a number of underlying political considerations as well:

  1. Because of his prior record only, the NSW Liberal Party Education spokesman, Brad Hazzard, says he is not fit to serve (in Education)
  2. MrCoutts-Trotter's educational leadership qualities have also been questioned.
  1. Mr Coutts-Trotter would NOT be employed by NSW as a teacher. His criminal record would preclude that. He probably would not be able to work with Scouts or similar groups of children.
  2. Since leaving prison some 23 years ago, and being through a rehabilitation program with The Salvation Army, he has, apparently, led an exemplary life. He began working for former NSW Treasurer Michael Egan as a political adviser, and was appointed as D-G of the NSW Department of Commerce in 2004. By any stretch, this was apolitical appointment, but we need to judge the effectiveness of his time there, as well as the manner of his appointment.
  3. It seems that the Liberal Party might not believe in redemption. Former leader John Brogden was rather brutally treated and cut loose by his own Party, after they released inappropriate suggestions made by him about former Premier Bob Carr's wife. He has not been allowed to be rehabilitated within the Liberal Party. 'Redemption' is, perhaps, a concept ironically alien to the faction known as "the Religious Right".
  4. At the level of Director-General, it is probably more important to be able to show leadership, than to have a particular inside knowledge of the Department. Such knowledge can be gained quickly by experienced and competent managers

The Analyst

Saturday, April 07, 2007

NSW Parliament and Domestic Violence

Where, oh where, are the ethics and common human concern? There are some things that are absolutely right, and some that are absolutely wrong. Domestic violence is absolutely wrong. Not it seems, to members of the NSW Parliament. It apparently took a new (Labor) MP to stand up and say that what happened to Sandra Nori, MLC, in the 1990's was wrong, criminal, and the alleged perpetrator is not fit to hold a Ministerial position.

Good on her. But where were the others?

For years there have been government-sponsored ads to tell us that domestic violence is wrong. Yet it seems that apathy, and/or the interests of the Party took precedence over the interests of an apparently abused person. There are reports that matters were discussed with then Premier Bob Carr, and that Labor power broker Graham Richardson had "counselled" a member. (

But not one person seems to have done anything to help the alleged victim, nor reported it to the Police.

It seems to be just another case of "the Party comes first". All those Parliamentarians who knew, or suspected, or who saw the bruises and did nothing should hang their heads in shame.

ALL of them.

The Analyst

Friday, April 06, 2007

NSW Liberal Party Leadership Change

On Wednesday, the NSW Parliamentary Liberal Party unanimously elected Barry O'Farrell as its new leader, replacing Peter Debnam. The new leader quickly made a number of statements, distancing himself from Peter Debnam's leadership and policies; stating that the Party had recognised that it needed to change; and that he was not going to be (Liberal Prime Minister) John Howard's stooge.

If the change is to be more than a cosmetic face-lift, then the Liberal Party must change some of its policies. Doing so will test Barry O'Farrell's statement about not being the Prime Minister's stooge in NSW.

Policies that I believe they must change include:

  • Public Service: removing 20,000 public servants. (on Thursday 5 April, the policy was dropped)
  • Education; where a firm commitment to better fund public education, including schools and TAFE must be backed by policy. That policy should include support for centralised staffing, including centralised hiring and firing. Experiences in the US and Britain have shown that it increases the possibilities of inappropriate hiring and firing.
  • Health; where Area Health Services should be retained, and the policy of local boards is dropped, because they become limited in vision and scope, wanting resources that perhaps could be better spread over a larger regional area.
  • Police: a commitment to the Separation of Powers, where politicians do not ever interfere with police operations, or instruct police on who to arrest, and on what charges. We are not a Police State, and such a concept eats at the heart of any democracy.
  • Industrial Relations: commitment to, and retention of, the NSW Industrial Relations system, including State Awards, and a NSW Arbitration Commission
  • Government and Public Servant Ethics: ensuring that politicians, especially Ministers and Premiers, and Public Servants cannot work for companies with whom they have had direct or indirect dealings involving significant State Government contracts. The exclusion of employment time should be at least 1 full Parliamentary term (4 years). Furthermore, a policy that requires Ministers to actually be accountable to Parliament for the actions of their Ministry is required. Too often in NSW and Federal Parliaments, Ministers duck and weave to avoid. Accountability is not the same as personal responsibility, although in some cases Ministers need to take responsibility, too.

Instituting the type of policy changes outlined above will not be easy, since many of them clash with Prime Minster John Howard's policies (official, and unofficial). The changes he does make will determine whether Barry O'Farrell meant what he said about changes being needed, and about not being John Howard's stooge, or whether his leadership is just "air-brushing" - a soft sell of the policies largely determined by John Howard. Many of those are proving to be electorally unpopular.

The Analyst