Big Tax Bucks for Private ATCs

John Howard today announced his $2 Billion plan for 100 more Australian Technical Colleges. Thirty of these would be "offered" to States and private schools - for which they will receive $10 Million. That's a total of $300 or 15% of the $2 Billion. 30% (state/private schools) get 15% of the money. 70% - all private entities- get 85% of taxpayer money.

The other 70, will receive $1.99 Billion of taxpayer money, to go to private organisations. The private organisations will get 85% of taxpayer money for just 70% of the ATC's. States and private schools will get 0.5% of funding for 30% of the ATCs. This seems to be another instance of John Howard splurging taxpaer dollars to private entities.

Then ther eis the issue of performance and accountability. The Auditor-General's (Performance) Report #3 on DEST's funding of current ATCs showeed that enrolments were only 2/3 of those projected by ATCs in their requests for funds, and funded by DEST. They also show that they are not achieving the numbers of School-Based Apprentices and Trainees required. (only 74 of projected 460). There were problems of accountability identified by the A-G, but which won't be addressed till 2008-2009. Significant numbers had problems with their RTO status, and have had to "sub-contract" to TAFEs

ATC's are inefficient in terms of their funding model, and represent John Howard's policy of providing great amounts of taxpayer dollars to private entities, at the expense of public facilities. The current arrangements are unsatisfactory, but Mr Howard will continue to fund private entities with 99.5% of the funding for only 70% of the facilities. Meanwhile, universities, TAFE and public schools have had their share of federal funding cut.

John

Coalition At Odds with Itself

"A week is long time in politics" is a well-worn clichè. Kevin Rudd had his blooper this week at a gathering of seniors in Tasmania, where he received a spray from one Howard supporter. Then there were the days of Coalition criticism of Kevin Rudd about his removal of CFMEU Assistant Secretary Joe McDonald's from the ALP.

This weekend must seem an eternity to John Howard, his minions, and his minders. Consider the following weekend events:

• Joe Hockey told journalists that the Coalition is simply running a "fear campaign" about unionists.
• While John Howard would not commit to a % of unionists that would be representative, Hockey said 20%. He then struggled to name 3 former union members who were ministers. He tried to count a student association and the AMA as unions. Tony Abbott might be the only one - hardly "representative", as Hockey would want.
• The Sunday Telegraph ran a story that Malcolm Turnbull had previously urged Mr Howard to sign the Kyoto Protocol (on global warming). No only had Cabinet discussions been leaked, but this was contrary to the position Mr Howard enforced on his ministry. Liberal sources were blaming Mr Turnbull for the leak - possibly to destroy any future leadership roles he might desire - saying he was only interested in retaining his own seat.
• Mr Howard was questioned by Channel 9's Laurie Oakes about his promise to keep interest rates at the "lowest levels for 30 years". There have been 5 interest rate rises sisnce the last election, and a sixth seems likely on 6 November when the Reserve Bank board meets to discuss inflation.
• The Sun-Herald today revealed that Federal Territiroes Minister, Jim Loyd, has tried to have a memorial to the people of SIEV-X who died at sea, removed. The memorial was previously approved, by the government, the ACT Government and the NCA. IT became unacceptable after the election was called. It is consistent with John Howard's policy that refugees, boat people, and "foreigners" should be dehumanised, and used to create fear in the comunity.

John Howard must be cringing that he can't hold all his ministers' hands, all the time. Cher's "If I Could Turn Back Time" would be an appropriate chorus for them.

John

Howard's Inflation His Own Poison

Today's economic news was all about interest rates and inflation. Treasurer Costello tried to use the media to put pressure on the Reserve Bank to not lift interest rates when it meets on Melbourne Cup Day by citing only the official 12-month figure for inflation. He avoided any mention of: the underlying rate of of inflation (the cpi was almost 1% for the quarter) or the rate at which that figure is increasing.

With a big budget surplus, Howard and Costello are spurging in election-promise spending. But it is not good economic management. In November 2006, I wrote:

"Monetary Policy (interest rates) is a blunt instrument against inflation. ...
Successive "tax cuts" have produced more spending than the value of the tax
cuts. That is, we created more money and inflation than the tax cut."

The underlying rate of inflation, and the speed at which that is increasing is a concern for the Reserve Bank. In July 2006, John Howard said that it was important that the Reserve Bank focus on underlying inflation. (it was when banana prices were very high after a cyclone ruined much of Nth Queensland's crop). That Peter Costello is studiously trying to ingnore that fact right now is a measure of his desperation and lack of candour with the Australian people.

High, and an increasing rate of, underlying inflation indicates poor economic management by the Federal Government in its budget spending - poor management that will likely see an unprecedented rate rise in an election campaign.

It's as though the government has decided that, if it's going to lose, it should make things as difficult for the Australian people and the next government as possible.

John

Election Debate: Skills Crisis

A John Howard and Kevin Rudd exchanged insults during the "Election Debate", it became apparent that, as always, it was about many things. Debating wasn't one of them. It was about TV image and political point-scoring before a panel of journalists, and a government tantrum about "the worm"

John Howard was critical of the use of the "worm" to show audience reaction to his and Mr Rudd's statements: he knows he doesn't always argue well. However, the journalists panel was critical of his attitude, saying that there was ever-more government interference in the media for purely political purposes. Indeed, the Federal Government cut Channel 9's feed when the "worm" went to air. Media manipulation by the Federal Government is, indeed, something that ought to frighten voters.

Among the issues raised during the debate were:

• education: Mr Howard looked uncomfortable when Mr Rudd talked about a recent OECD report that was critical of Australia's investment in public tertiary education. It is certainly true that John Howard, Julie Bishop and Andrew Robb have been responsible for funding cuts to universities and TAFE across Australia, as a % of GDP. They have also used threats to withhold funding unless universities and TAFE adopted the Liberal Party's agenda on WorkChoices.
• optimism: despite both leaders expressing optimism, John Howard's response was to assert that Kevin Rudd is "pessimistic". No argument, just an assertion.
• industrial relations: John Howard was very careful to NOT mention the "W" word (Workchoices) when IR was discussed. He does not like voters' response to the lowering of wages, and tries to avoid the issue, or rattle off statistics hoping to confuse people.
• climate change: Mr Rudd wants to set targets, sign the Kyoto Protocol and work locally and internationally to reduce carbon dioxide emissions. Mr Howard has a reactionary view that "whatever you do, don't damage the economy". The reality is that climate change will damage the economy, to our land, our rivers, our coastal living if we do nothing; if we do, there will still be some damage to the economy in reducing carbon emissions, but it can adapt and remain strong.
• economic management: Mr Howard is still seen by many voters as economically responsible. It is an assertion he repeats often, hoping that voters will not remember the 5 interest rate rises since the last election, that his economic management redistributes wealth to those who have most, that poverty has risen from 7% to 10% of our people. Those are parts of his economic management he tries to avoid people remembering.

As I have said before, to win this election both sides must target the 12-15% of voters who are "undecided". Whether this debate helped either leader do that, or whether voters see it like as one long policical ad remains to be seen.

John

Tax Cuts, Interest Rates and Public Facilities

Tax cuts and negative name-calling: it must be election time.

John Howard has once again trotted out tax cuts during an election campaign. He asserts that HE is the most responsible economic manager for Australia, yet he knows that the $34 Billion in tax cuts he is offering will surely lead to higher interest rates and higher inflation. There are enough arguments to NOT have these tax cuts:

• by themselves, they will be inflationary. The economy will have to produce nearly $50 Billion of EXTRA GDP. It is already groaning under the strain of other pressures such as the US sub-prime mortgage market, rising oil prices, rising food prices, and rising prices of other goods.
• many voters believe such money would be better spent on public facilities that benefit society: public education (universities, TAFE, public schools); public health and hospitals, and public roads (national highways, and major state roads). Providing funding to states for public facilities goes against what John Howard stands for. He will willingly give public money to private entities, and redistribute wealth to those who have more, but providing adequate funds to states for public benefit is not high on his agenda.
• there will be less money to spend on climate change and renewable energy sources. Again, this is not one of John Howard's favourite topics, having picked his position as a "climate sceptic".

John Howard is hoping that voters will not think about the implications of such large tax cuts, much of which will go to those with more wealth. Kevin Rudd is probably smart to pause and give a considered response, rather than a "me-too" reaction.

It seems as though whatever economic responsibility John Howard might have had went out the window when he mentioned the word "election". We need responsible economic management, not inflationary tax cuts.

John

It's the 24th November!

After several months of speculation, Prime Minister John Howard has called the Federal election for 24 November 2007. He announced the date at a media conference at Parliament House at noon today.

In his following speech, he made a number of assertions:

• "people must decide who is most able to not only to preserve Australia's prosperity, but build it to make sure it is fairly spread"
  QUESTION: Is WorkChoices designed to fairly spread the nation's wealth, or to reduce pay and conditions of millions of "worker units"?
  COMMENT: in his 11 years as Prime Minister, the number of people living in poverty in Austrlia has increased from 7% to 10% of people.
• "There is no reason why the current unemployment can't go lower"
  QUESTION: An admirable aim. What effect will even lower employment have on inflation? Interest rates? When interest rates have moved in the last two years, what has been the movement? (UP)
• "I have always wanted to achieve reconciliation (with indigenous people)", he said.
  QUESTION: Demonstrate your track record on reconciliation over the last 11 years?
• Mr Howard said that if reelected as Prime Minister, Peter Costello would be Treasurer.
  QUESTION: Won't Peter Costello become Prime Minister next term?
• Mr Howard asserts that there is "nothing balanced" in having a Federal Labor Government and Labor state governments.
  QUESTIONS: When has the financial bullying and political blackmailing by the Federal Government over funding to states been balanced? Is forcing a politically-set history curriculum on states "balanced"?
• Climate Change and reconciliation positions seem have have been reversed, or at least seemingly altered.
  QUESTION: Is that just political opportunism, cynicism, or both?

Update: Kevin Rudd's Response

Kevin Rudd has said, in response

• that the election IS about a new style of leadership that is needed. That was John Howard's attack on Paul Keating way back in 1996!
  COMMENT: Kevin Rudd's leadership, like John Howard's, is "Presidential" in style. John Howard like power, Kevin Rudd wants voters to focus on his popularity.
• he has a plan, and understands the challenges facing Australia.
  COMMENT: Perhaps, but it is not yet fully articulated, except for Workchoices. That will come during the campaign, we hope.
• he will ratify the Kyoto Protocol, and will NOT develop nuclear power stations.
  COMMENT: this will certainly attract voters away from John Howard, whose plan is really about extra profit-driven "Carbon-trading", but this will mean reliance on coal, or gas-fired, power stations.

This campaign will be a long six weeks for many voters. Much of it is likely to be negative.

John

Leaders Campaign But No Date Yet

John Howard and Kevin Rudd are both campaigning in Sydney today.

John Howard is promising Federal funding for storm-water harvesting ... but only in his electorate of Bennelong. Kevin Rudd is continuing his criticism of John Howard's "government advertising" just before the election is called. It will stop when the Parliament is dissolved: then the Liberal Party will pay for advertisements that support the government.

Mr Rudd has announced $50 for a cancer centre for Sydney. A worthy cause. Federal funding, as a % of GDP has fallen, while states share of hospital funding has increased. A visionary government/leader would recognise that what voters want is a commitment, from either party, that they will provide a greater share of funds to the states for public hospitals. John Howard's vision from the last 11 years has been to foster private entities at the expense of public ones.

Short-term electioneering is a reality near elections, but neither side has yet articulated well enough its vision for services to the public, by public utilities.

Many voters are already disengaging from the campaign, and just want the election to be called, and over. Meanwhile there is still much speculation in the media about when the election will be officially called, and dates of 17th or 24th November are being mentioned. John Howard will only use those dates if he bets the Reserve Bank will NOT raise interest rates after its November meeting. I still believe he will use 1-December for the election.

John

Reba's Health Woes

NSW Health Minister Reba Meagher has been under intense pressure and media scrutiny over problems in the NSW hospital system. Royal North Shore Hospital (RNS) has been a constant problem since a pregnant woman miscarried in the emergency waiting room toilet became known about 2 weeks ago. Yesterday, there were reports about missed cancers and delayed x-ray reports at Liverpool Hospital.

NSW Premier Morris Iemma is supporting his minister, despite calls for a parliamentary inquiry from the Opposition. Mr Iemma will resist such an inquiry for a number of reasons:

• Mr Iemma is a former Minster for Health
• party factionalism
• personal friendship
• the mere fact that the Opposition wants an Inquiry
• the total Health budget is essentially determined by Mr Iemma (as Premier) and Michael Costa (as Treasurer). Neither want to be called to give evidence.

There probably should be a Parliamentary Inquiry: it is an important step to determine what is actually wrong and, perhaps, recommend ways to fix it. It would also be one way to ensure accountability and responsibility from our State politicians. Politics will determine that there isn't one.

In the meantime, Reba Meagher will be accountable through media scrutiny and analysis. They seem to hang on every nuance, inflexion and facial expression. Some time after the Federal election, Morris Iemma might decide on a Cabinet reshuffle. Perhaps Reba Meagher will move to a ministerial position more suited to her talents. At this stage of her career, Health seems to have been too much of a challenge.

John

A Reading From the Book of History by John Howard

Today, the Prime Minister will announce that Federal funding to States for schools will only be provided if they teach an Australian History curriculum set by John Howard.

The curriculum move comes after John Howard dumped recommendations by a Melbourne history academic, and had them rewritten on his terms by right-wing (conservative) historian and a supporter of John Howard. Further, John Howard seems to have set the curriculum: students will have to learn about 70 facts of Australian History: emphasis on "facts". But history is not just about facts. Date-and-event is pretty dry content. History needs to be about people, context, environment, and ... not included in Mr Howard's curriculum ... balance.

There are some significant omissions from Australia's history, from which valuable lessons could have been learnt:

• the White Australia Policy, and its parallel in current xenophobic policies
• the "Rum Rebellion": a conflict between Governor William Bligh and Macarthur & his army officer supporters over the reduced number & size of land grants, especially to the wealthy
• the Eureka Stockade
• the Stolen Generation; and the broarder issue of treatment of orphans
• attitudes and treatment of indigenous people, apart from 1 or 2 major incidents
• other aspects of changing attitudes of the world and Australia. eg Britain's nuclear weapon testing in Australia (MonteBello Islands & Maralinga), and subsequent move to the EU; Australia's change to follow US foreign policy

What John Howard wants:

• power over states
• power to personally set school curricula
• a politically-set quite prescriptive curriculum (HIS curriculum) It is similar to Japan's former politically-set history of WWII- a history that denied Japanese atrocities and war crimes - in that important key facts and political sensitivities are omitted or treated lightly.

The Prime Minister has also insisted on the attendance of the Principal and school captains at Moorebank High School. They are on school holidays and Mr Howard wants to use them for his own media promotion. He wants voters to think, by association, that the Principal and children are on his side. It is marketing manipulation, paid for by us voters.

Should politicians set the content of school curricula? Vote now - see top right section of my blog.

John

Social Happiness and Government Policies

Many economists find the concept of "social happiness" too difficult. This is especially true of those who subscribe to economic rationalism, where the main argument is for less government intervention.

John Howard would like to think of himself as an economic rationalist. He has expressed the view "let the market decide", most recently about a carbon emissions trading scheme. That is, if business thinks there's money to be made, let them do it. He certainly did not want his government to interfere and set binding emissions targets. At the other end of the spectrum, he has been most happy for government intervention when it is to his own political advantage: the takeover of Mersey Hospital in Tasmania is an example. So is the growth of "public servants" and "media advisers" for government self-promotion. Kevin Rudd might be a little less "dry" in his economic thinking, but he, too, is prone to promised intervention if it suits.

"Social happiness" is sometimes expressed as the "sum of all individuals' happiness". But this is difficult to measure. Are people happy because they have another tax-cut? Are they happy knowing that the collective money could be used for public good? Individual people know that Public utilities (public hospitals, other health facilities, public schools, national highways) are essential, but are "happy" to take the money themselves ... until they need to use the public facilities. Then they ask "why isn't the government funding this properly?"

Government policies at State and Federal levels have been geared to individualism and privatism for too long. It is time to better fund our Public utilities for public good, rather than political expediency.

John

Polls Still Bad But PM Has Hope

The latest Herald-AC Nielson Poll continues the bad news for Prime Minister John Howard. The numbers show voter consistency of opinion over months: The 2-party-preferred count shows Labor 56%; Coalition 44%. However, as with other polls, this does not include the "uncommitted", a figure of about 12%.

Number-crunching shows the approximate figures as:

• Labor: 49%
• Coalition: 39%
• Uncommitted: 12%

It is this 12% of uncommitted voters that gives John Howard hope. I expect that about 7 in 10 of these will vote for the government (Coalition), just because they are in government, and because such voters are more likely to be befuddled by a government scare campaign. That would give figures close to:

• Labor: 52%
• Coalition: 48%

and result in a much closer election result.

The challenge for John Howard is to harness the scare campaign. He really only has 3 bullets: voter perceptions of his economic management (multiple successive rises in interest rates notwithstanding) and fear of refugees. He and his ministers will continue their assertions on these issues. The third bullet is pork-barrelling the voters. He's started with highway funding, and will continue on to hospitals, both of which are areas of voter concern. "But wait, there's more - ..."!

The challenge for Kevin Rudd is to continue to push the image of a leader who has a vision, and who wants to restore public faith in public structures such as health, education and transport; and the image of leader who wants to undo the worst degradations of WorkChoices without alienating businesses.

John

Hospitals Can't Heal Themselves

Assertions about Hospital funding, emergency department procedures, ministerial competence, a promised inquiry and changes of minds, and much finger-pointing have been the result of a recent traumatic miscarriage at Royal North Shore (RNS) Hospital in Sydney.

Since 1995-96, the proportion of Federal Government funding towards public hospitals in NSW has fallen from 45% to 41% (2005-06) of the the total funding. The States increased their proportion from 55%-59%. Many will also find unsurprising that the proportion, and dollar amounts, going to private hospitals has increased. Much of that probably comes through the 30% Health Insurance rebate given to taxpayers who then use private hospitals. Still, in NSW 30o people per 1000 people will visit an emergency department - that's a number equivalent to 30% of the population.

Education, transport, universities, TAFE, health. The Federal Government's agenda is to provide more taxpayer support for "private", rather than "public". (The same is true for NSW roads.)

"The time has come", the Walrus said, "to talk of many things ..."

• We taxpayers might need to pay more tax to fund the public services, such as hospitals, that we want.
• Or, since State Governments are severely hamstrung in raising revenue by taxes, the Federal Government needs to increase its spending on these.
• The Federal Government has restricted the number of doctors that can be trained by our universities. It is time they went, with a plan to increase the number of graduating doctors. The plan might also involve lower degree costs for doctors who work in public hospitals after completing their training. Similarly, for nurses.
• The proposal for local hospital boards is simply about divide, conquer and control by the Federal Government. Let's put that plan to rest.
• NSW Health Minister Reba Meagher needs to be more productive in her office, and spend more time understanding her portfolio, and less on holidays.
• Federal Health Minister Tony Abbott must spend less time trying to snipe at, and blame, others (states) and look for ways to work for the people of Australia.
• NSW Area Health Services need to find failures in all their procedures, staffing levels, staff training, staffing needs (in terms of experience) and infrastructure needs. Then, they can be brutally honest with their departmental and political masters. Only through such a traumatic and cathartic evaluation will a viable 5-10 year plan be possible. We will need that long to fix the systemic and political errors of the last 10 years.

All of these will require a radical change in perspective from all participants.. Economically, we cannot just pump more money in: it needs to be redistributed from elsewhere. As a society we need to set the agenda. We also need politicians and governments who will act in the public interest, not the party interests. Instead of being belligerent, controlling, and blackmailing, governments must actually consider the public good in how they deal with each other.

John