Sunday, May 31, 2009

So Long, Sol

Telstra's now-former CEO, Sol Trujillo, has left early. He was due to to finish at the end of June, but he left in May, and left Australia. He proceeded to badmouth Australia in a BBC interview, calling us racist, and being here "like stepping back in time". I wonder how much the BBC had to pay him for the interview. Australia is not racist. It has a small number of people who are, as with every other country. Australians' dislike of Sol Trujillo is not based on race, but his "achievements".

In 4 years as CEO this is his list of achievements:
  • took A$30 million in pay & bonuses

  • took a confrontational, even belligerent, approach to Industrial Relations. He offered his employees dreaded, and dreadful WorkChoices: individual contracts which offered no pay rises for up to 5 years, and a reduction in conditions. He took large increases, and exceedingly generous bonuses

  • Telstra's share price has fallen from just over A$5 to just over A$3. Concerns about the share price slide were expressed by the former Coalition Government as far back as 2006, well before the current Global Financial Crisis.

  • Trujillo brought over two US friends. Phil Burgess was charged with taking on the Australian Government and the ACCC (competition regulator). They lost. Trujillo seems to have thought that privatising a government-owned monopoly must automatically create a private monopoly. To its credit the (then Coalition) Federal Government did not.

  • Under Trujillo's leadership, some reports suggest that the rate of customer complaints against Telstra increased by 240%! ( )

  • Perhaps contributing to the rise in complaints, Telstra's total workforce has fallen from 56000 to 47000 people.

  • Trujillo oversaw Telstra's bid to install Australia's proposed new broadband infrastructure. He knew the bid did not meet tender requirements; and apparently believed that public (government) money should be used to build national infrastructure which would be privately owned and controlled by Telstra, to the detriment of competition. The bid failed; and Trujillo's last failure might well leave Telstra in a poor strategic position.
It is entirely possible that Sol Trujillo's legacy might be as a prime example of "what not to do as CEO/manager". His name might live in corporate training manuals for years.

So long, Sol. You won't be missed, or forgotten.


Wednesday, May 27, 2009

Swines Spreading Flu

The number of Australians reportedly suffering "swine flu" - H1N1 Type A is NOT really swine flu -has grown significantly over the last 3 days to at least 65 cases. Many have returned from cruise ships, flown in from LA, or been in contact with those who have.

Many returning from the cruise ships have been told to stay in "home quarantine" for at least a week. However, it seems some parents didn't follow the message with sick teenagers being allowed to go to work at a fast food outlet at an Epping Plaza (northern Melbourne) shopping mall. The Mall, and food outlet were closed for some time. Such behaviour, from the parents, and the teenagers, is socially irresponsible. The teenagers might be forgiven for their naivete, but the parents ought to have known better.

So too, health authorities who allowed possibly infected passengers from the cruise ship Pacific Dawn to fly from Sydney to Queensland. Quarantine should have been in Sydney, at least until the blood test results were confirmed. Immigration, and Federal and State Health authorities have a responsibility to do more than say 'stay home for 7 days' - it is clear that more cases of this human swine flu are arriving in Australia, and that those identified as being at high risk need to be cleared by their GP before returning to work. While anti-viral drugs, such as Tamiflu, might help reduce the severity of symptoms, they are not a vaccine, and their widespread use would not be appropriate. A vaccine is not likely to be available till at least September.

This flu is apparently likely to be more severe in younger children, older people, and those who are otherwise frail. Most people will not suffer severe symptoms, yet they have a social responsibility to ensure that they are not responsible for spreading to other people. If you're told to stay home, stay home. If your children are sick, do not send them to school, sport, or work -keep them at home; yes that's inconvenient, but it IS socially responsible!


Monday, May 25, 2009

Kevin Rudd's Unfinished Business

Prime Minister Kevin Rudd has unfinished business. Specifically he has two formerly independent bodies determining wages, that are not independent.

In 2005, John Howard effectively sidelined the Federal Industrial Relations Commission, which had been presided over by Judges, and established his own "Fair Pay Commission", using Federal Corporations Law to do so. In October 2005, then PM Howard announced Melbourne Professor Ian Harper as the first Fair Pay Commissioner. Far from being independent, the Fair Pay Commission, and Prof. Harper, sat as a unit within the Dept of Employment and Workplace Relations, under the control of Minister Kevin Andrews, and Prime Minister Howard. It was always subject to political interference: that was one way that Howard could lower the wages of Australians in real terms. As an example, witness the extended delay in announcing the Fair Pay Commissioner, that the Commissioner was a political appointment by Howard, and the extended delay in announcing considerably-less-than-CPI wage increases.

The Australian Fair Pay Commission still sits within the Ministry (Dept of Education, Employment & Workplace Relations) where the current (Deputy Prime) Minister Julia Gillard, and PM Kevin Rudd can still exercise considerable political influence. It is the political interference and the policy of using the Commission to lower the wages of the lower paid workers that so rankled the union movement, and many other Australians. Under the current structure, kept by Kevin Rudd, that can happen again. The Australian Fair Pay Commission is NOT as independent as was the Federal IR court. It is no wonder, then, that the states & territories have not signed up to Kevin Rudd's proposed industrial relations takeover. Only Victoria has signed up. The states, with some historical justification, given the history behind John Howard's partial takeover, with the political objective of lowering average wages, have a distrust of the intentions of this and future Federal Governments.

The second unfinished business concerns the Remuneration Tribunal. In 2001, John Howard made Tony Abbott "responsible for" the Remuneration Tribunal. It had once been a statutory independent body that reported to Parliament, not to a Minister or Prime Minister. Every pay rise was justified because the "Remuneration Tribunal is an independent body". Politicians of all parties made similar announcements, knowing that it is patently untrue. It reports to the Minister, and indirectly to the Prime Minister. Malcolm Turnbull said it on 2o-May-09; Kevin Rudd said it though a 'spokesman' on 28-Apr-09.

I believe it is a good idea to debate the Federal politicians' salaries, their allowances and associated auditing requirements, and how they are determined. Not surprisingly, the pollies don't want any auditing of how they spend their allowances, or how frequent flier points earned from Government business might be used for personal travel of family & friends. But for politicians to continually refer to "the independent remuneration tribunal" is specious at best, and more likely, deceptive, on their part.

Kevin Rudd has unfinished business with both the politically abused 'Fair Pay Commission' and the less-than-independent Remuneration Tribunal.


Further Reading:,com_remository/Itemid,26/func,fileinfo/id,37/

Sunday, May 17, 2009

What the NRL Must Do

Volumes have been written this week about Andrew Johns, his involvement in group sex with a NZ woman 7 years ago, his sacking by both Channel 9, the Melbourne Storm NRL team, and the NRL.

I would make the following points about the matter:
  • what Johns did was wrong: allowing other players to enter; cheating on his wife; knowingly indulging in behaviour that might contribute to the spread of STD's; many would argue it was ethically, even morally, wrong.
  • Australians have a term for those other players who "got off" on watching - we call them 'wankers', and it's a term of derision. It might well be literally & figuratively true, given how they've scurried into the shadows this week.
  • those team members who took part, and the club officials, who knew of the behaviour, and did nothing, are also responsible. Legally, it might be called "accessory after the fact". Although no crime appears to have been committed, the 'fact' ahs brought the game, and the reputations of some people, into disrepute.
  • the NRL has concentrated on players only, and Johns in particular. The media has largely done the same, although the Daily Telegraph (15/5/09) carried front page silhouettes of other players allegedly involved.
  • having been complicit in the scapegoating of Johns, it now behoves the NRL to provide appropriate counselling for Johns, and his family.

So, is Andrew Johns a scapegoat? Yes - in biblical times a scapegoat was the goat upon whose head the sins of the people were laid on the Day of Atonement, and which was afterwards sent off into the wilderness (Lev. 16: 21-22). This seems to fit with the actions, or inactions, of the NRL, Channel 9, the Melbourne Storm, Johns's former team-mates, his most recent work-mates, and a multitude of social commentators. There is abundant literature on the psychology of scapegoating (See for an example.) Essentially, scapegoating is a form of bullying whereby others (see above list) avoid admitting to, or consequences of, their wrongdoing. In Johns's case, he appears to have been chosen because of his higher profile that the others.

While Johns had pleaded his 'me culpa' publicly, somewhat reluctantly, and under considerable psychological strain, the others, players and officials, have retreated to the shadows like cowards.

Here are my suggestions for the NRL, but applicable to other sports, male & female:

  • ban alcohol sponsorship: ban new contracts, and the renewing of existing ones. Start with your own representative teams. Ban players, officials, clubs and associations from alcohol sponsorship. If you choose to provide alcohol to your teams, do it behind closed doors, with no outsiders; none. Yes, I know the Brisbane Broncos are sponsored by a brewery, some players drink like they're in a brewery, and some have brought themselves, and the game, into disrepute becausse of it. Ban it anyway.
  • don't just target one player. All players involved need to be reported, if too cowardly to own-up. Officials bear responsibility, too. If it was right to sack Johns from any role with the NRL, it is right that officials who knew should also go. You can't have one rule for "the players" and another for officials: that would be hypocrisy.
  • For away games, especially, it is no longer appropraite to let players do as they please. At home, and away, players represent the club, the team, and the NRL. Consider inviting the girlfriends, parners, wives.
  • introduce a common code of conduct for officials, and players; and enforce it with significant bans. eg cannot be a club official, or be involved club management or board; if an NRL contract is terminated, it ought to be concurrent with a ban on playing.
  • the player education program about how treat women should be extended to all officials, including NRL managemenet, who should attend with the players. This will let them see just how bad are the attitudes of some players towards women.
  • given the claim that this is a common occurrence, test every NRL player for STD's. Do it discretely, and the results should be private, but players should know this is a possible consequence of their chosen NRL lifestyle


Saturday, May 16, 2009

Budget Realities & Politics

Did I say I was busy in teh last post?! - you bet I have been. For the record, however, I have NOT been working on the Federal. or any State, budget.

As far back as 2000, John Howard's & Peter Costello's budgets were in, or near, "structural deficit". They recorded a "surplus" because they won an economic lottery - overseas demand for our minerals ensured huge amounts of taxes paid that were outside the normal economy's scope; and they sold more of Telstra and the country's Internet infrastructure. You can read more of the expert discussion on the ABC's 7:30 Report of 10-May-200. Further, in February 2005, Treasury Secretary Ken Henry warned the Howard Government that the US current account deficit could (would?) cause a severe economic correction in the US, with worldwide implications. John Howard's response was "There's no prospect, in my view, if you're asking me for my view, there is no prospect of the American economy crashing." ! Either his skills weren't as good as he wants us to believe, or he was being deceptive.

For their parts Labor PM Kevin Rudd and Treasurer Wayne Swan, have a budget that looks "tough, but socially responsible", but which is has some poor policy choices: a second attempt at an alcopops tax; lots of money for universities, and school infrastructure, but not much about the extra funds public schools and TAFE will need for students staying on after the COAG "compact"(15-20 year olds will be either at school, or receiving training to help with teh recovery)

Alcohol ought to be taxed on its alcohol content, not the type of drink (beer, spirits, alcopop, wine) Further, if the desired socailly engineered position is to reduce alcohol consumption and binge drinking, the cost ought to escalate at higher levels. ie not a linear tax based on %alcohol, but a tax based on an exponential curve.

The Lib/National Coalition's plan to raie the tobacco tax to reduce the budget deficit and discouage smoking won't work - it will just be a regressive tax. And the Liberal PArty still accepts donations from ... tobacco companies. Malcolm Turnbull knows the increase in tax won't stop smokers. Essentially they show the same traits as drug addicts - by and large they will pay whatever price is asked. So the increase is just an greater regressive tax, and tobacco consumption will be unchanged.

I think means testing the Private Health Insurance Rebate is worthwhile. Effectively it is means whereby the government pays 1/3 of the private premiums. Mind you, the Coalition will oppose this measure, despite their fundamentalism on "user-pays"! Turnbull is still playing the "I'm-in- Opposition,-so-'No' " game.

As far as the already-distributed cash handouts go, Australia relies heavily on the retail sector, because reforms to industry have effectively reduced the contribution manufacturing makes to our economy. In that respect, they will likey mean the structural deficit will not be as great as it could have been.


Sunday, May 03, 2009

Budget: Mixed News, As Always

Oh, dear. I have been so busy that I have not had time to post for 2 weeks. It seems like an eternity. It's 2009 Budget time, a time when politicians like to sprout, er, "leak" good news to the voters by using the media. They also like to prepare us for bad news, by leaking possible increases in taxes.

So, Prime Minister Rudd, and the State leaders have reached a "compact with young Australians", specifically those under 20. The following extract is from the press release via the PM's office:
"This compact with young Australians will ensure that every Australian under the age of 25 will be entitled to an education or training place. This is an important undertaking to the nation, an important undertaking to mums and dads concerned out there about their kids, an important undertaking to young Australians themselves."

Sounds good ... but just how many young Australians under 20 were at the COAG meeting that decided this. Hint: it's a nice round number! And its dressed up nicely with references to "mum and dad". There is also a sting in the tail, not just for the kids, but for "mum and dad" who receive Family Tax benefit A.
"The other part of this initiative is that we've also strengthened conditionality in welfare payments. To support this new Compact, the Commonwealth Government will strengthen the conditions unemployed young people must pass to receive the youth allowance. Anyone under the age of 20 without a year 12 equivalent qualification must be in education or training in order to receive Youth Allowance. The same conditions must be met if parents of young people in the same circumstances wish to receive Family Tax Benefit A."

Ah, yes. We'll not only make it harder for the kids, but we'll possibly punish the parents as well. Notwithstanding that the part about education & training might be good policy, the second part, about the Family Tax Benefit A, is social engineering, with a big stick, using tax policy.

There's the news about the massive investment, over 20 years, in defence capability. The fine print is that "savings" of about $2 million /year are to be made from the current defence budget: savings additional to those required under the Howard government. There will be plenty of opportunities for re-"announcements" of this future spending in this, and later, budgets. I suspect that not much of the new spending will occur soon.

News, too, that the budget "might" defer tax cuts announced last year, especially for "the rich" - applying the same formula used for the RuddBank's personal stimulus tax rebate, those earning more that $100,000 should worry. Just a little: it is after all, only a "leak", and many kites are flown to test voter reaction. There will be some bad news in the budget though, because this is a recession, and 2009 is not an election year.