Abbott vs Economists

Tony Abbott has continued his politically-motivated aggression against any price on carbon pollution. This time he has attacked Australian, and international, economists. They are in general agreement that a carbon tax is a good, simple, short term measure to reduce carbon pollution, before an ETS is introduced. Speaking at The Australian-Melbourne Institute Growth Challenge conference (of economists) in Melbourne, he said:

“It may well be, as you say, that most Australian economists think that the carbon tax or emissions trading scheme is the way to go. Maybe that’s a comment on the quality of our economists.”

It is classic political “shoot-the-messenger” response. He tried it, with only mixed success, on Ross Garnaut.  Of course, it does nothing for public debate, and is merely an assertion to be reported in the media. I’m not aware of any research on Australian media, but with Rupert Murdoch having significant interests in the UK, the USA and Australia, I’d hypothesise that the figures in the chart below would not be too different for the media & public opinion. (the chart also links to the original site)

His figures for climate scientists consensus are supported by Anderegg, W. et al. in  Proceedings of the National academy of Sciences of the United States of America (PNAS) (Link 5, below)

The Productivity Commission Report (http://www.pc.gov.au/projects/study/carbon-prices/report ) made the following points in its conclusion:

“The cost effectiveness of these actions (carbon emissions reductions policies) in achieving abatement, and the amount of abatement actually achieved, also varies widely, both across programs within each country and in aggregate across countries.
–  Explicit carbon pricing in the United Kingdom appears to have been a cost-effective way of achieving considerable abatement.
–  At the other end of the scale, policies to encourage small-scale renewable generation are substantially less cost effective and have led to relatively little abatement.
…
The relative cost effectiveness of a price-based approach is illustrated for Australia by stylised modelling that suggests that the abatement from existing policies could have been achieved at a fraction of the cost.”

That is, a carbon tax or emissions trading scheme is a more cost-efficient way to use the tax system to reduce emissions than subsidies for small-scale projects, such as household solar panels, for example.

John

In researching this article, I also looked at:
1)  http://www.petermartin.com.au/2011/06/impact-of-carbon-tax-will-be-how-small.html
2) http://www.smh.com.au/business/productivity-commission-backs-carbon-pricing-20110609-1fu2j.html
3) http://www.theaustralian.com.au/national-affairs/opposition-leader-tony-abbott-defies-economists-on-carbon-tax/story-fn961iy1-1226085675981
4)  http://renegadeconservatoryguy.co.uk/wp-content/uploads/2010/07/Climate-Change-Infographic1.pdf
5) http://www.theage.com.au/environment/climate-change/climate-debate-appalling-20110621-1gdms.html 

Abbott’s Plebiscite Another Stunt

Tony Abbott has suggested a National Plebiscite to determine whether Australia should have a Carbon Tax.

Plebiscites and Referenda are somewhat different. In Australia, we use the term ‘Referendum’ when a question of Constitutional change is put to the people. If it passes by a majority of Australian voters, AND a majority of voters in a majority (4 –6) states, then the Government is bound to implement the change. A Plebiscite, or Advisory Referendum, has no requirement for Government action, regardless of the voting result.


Independent MP’s and Senators, the Greens, and the Labor Government have been critical of Abbott’s proposal. They have generally cited:

1. the $80 Million estimated cost of a vote that does not require Government action
   and
2. it is just a political stunt, being nothing more than an opinion poll.

Independent Senator Nick Xenophon (SA) was less critical, saying the question to asked should be “neutral”, avoiding the word ‘tax’. You can almost see Tony Abbott, and his faceless advisers, wince with pain.

There have been only 3 other national plebiscites:

1916	Conscription	LOST
1917	Conscription	LOST, but Billy Hughes introduced conscription anyway.
1977	Change National Anthem	Anthem Changed to Advance Australia Fair

Tony Abbott has produced a media stunt derived purely from his own political pursuit of power. It would contribute nothing to debate about good policy: he wanted a question that effectively would have asked “Do you want to pay more tax? He did, however, admit that he would ignore the voice of the people if the vote went against him, while he would have insisted the Government follow the vote if it went against the Government!

While researching for this post, I came across the following sites. The third one, about Billy Hughes, is an interesting, because he tried to use Plebiscites to change the attitudes of his own (Labor) party, and opposition Senators.

1. Australian Electoral Commission information, at http://www.aec.gov.au/Elections/referendums/Advisory_Referendums/
2. article from Peter Brent, in The Australian. You can see it at http://blogs.theaustralian.news.com.au/mumble/index.php/theaustralian/comments/fielding_does_abbott_a_favour/
3. Information about Billy Hughes’ plebiscites on Conscription at the Museum of Australian Democracy – Old Parliament House, at http://billyhughes.moadoph.gov.au/conscription/

John

Problems and Polls

It has been a bad few days for the Federal Labor Party: its Primary vote in a poll is down to 27%; Kevin Rudd is preferred PM over Julia Gillard by 60% to 31%; Kevin Rudd had provided multiple media interviews about Thursday’s 1-year anniversary of being dumped as Prime Minister, and there are reports he will have an anniversary party to remember his “assassination”, as Prime Minister. Following the flurry of media stories, a number of Labor people have anonymously suggested he should be sacked as Minister for Foreign affairs & Trade.
Kevin Rudd has been accused of being arrogant, and a bully. Tony Abbott has accused Julia Gillard of being arrogant. Tony Abbott is arrogant and a bully; and so was  John Howard. Many leaders, as with many elite sports people, have an arrogant, confident streak in them. However, it would have been in his party’s interests had Kevin Rudd declined all interviews about the events of June 2010, despite media interest. It is certainly not in his party’s interest for him to hold an anniversary of assassination party.
Tony Abbott continues to effectively cause the government grief. His relentless use (misuse?) of the media for negativism has resulted in a significant rise in his, and the Coalition’s preference. The Labor Government’s problems include:

Problem	Concerns
Immigration	Off-shore processing proposals at Timor failed. Manus Island seems unlikely at this stage. The Malaysian Solution, with possibly 800 refugees being sent, with 4000 UN-determined refugees in exchange is seen as a ‘bad deal’, the UN has so far refused to sanction it and Malaysia is not a signatory to the UN Convention on Human Rights. Nauru is being relentlessly pushed by Tony Abbott, because they used it when in government. This is why Labor will not use it. Abbott also does NOT mention the criticism from the UNHCR on its Pacific Solution.  Many voters have a perception that the Coalition is better/tougher on asylum-seekers than Labor, and Abbott's repetition is designed to reinforce that perception.
Carbon Tax	One of the problems here has been the required input from the Independent MP’s Andrew Wilkie and Rob Oakeshott; and The Greens. It means that the government cannot publicly discuss the details, and uncertainty is political poison.
The Economy	It’s not the Government’s fault, with so many external influences, and so much information being made available to people through news reports. However, the Coalition tries to trade on its perceived economic record, even though they caused considerable pain to homebuyers because the last 7 movements in interest rates were increases when the Coalition was led by John Howard.
Factionalism	The existence of Labor’s Left & Right factions is well known. At present, the right faction, which installed left-wing Julia Gillard, still dominates. While the same is true of the Liberal Party, they have hidden their power struggles better. The exception was in NSW in 2007, when the extreme Right, reportedly led by Alex Hawke, caused significant media problems for the NSW Liberal Party. While Labor’s factions are known about, even Tony Abbott acknowledged their use in the Liberal Party, in an interview with the ABC’s Tony Jones. http://www.abc.net.au/lateline/content/2007/s2199048.htm The Liberal Party factions are currently showing more discipline than Labor.
Media	While Tony Abbott fronts the media almost daily with tightly-scripted, staged, TV & radio grabs, Labor is NOT responding with their own message, explanations and counters, or certainly not responding with effective coverage. Consequently,  people who see or hear any news, hear Tony Abbott, and the message is repetitive. They then see little of nothing from the government, and, understandably, they develop a perception that Tony Abbott is better.

While these are not all the problems facing the Federal Labor Government, they are significant. Members of Julia Gillard’s Government need to display much more discipline, and loyalty to the party. Any chance at good government requires it, and less effort on internal factional business. Tony Abbott is running a small target campaign, with very little policy. It is a tactic that was very successful for Barry O’Farrell in NSW, and he has unleashed a right-wing attack early in his term. Public Servants and the IRC have been the main targets.They also need to work towards solving all of the above problems, else the right faction will lead Labor to defeat at the next election, even though Julia Gillard is from the left faction.

John

In Search of a Moral Compass

The Current Events
Andrew Wilkie, MP, accused Labor of losing its moral compass on live exports (of cattle, in particular) and in its treatment of refugees. 

The public backlash after 4-Corners graphic video report on the slaughter of cattle forced the government to impose a 6-month ban on live export of cattle to Indonesia. Joe Ludwig,  Minister for Agriculture, Fisheries and Forestry, had his hands full managing the new stories about the mistreatment of Australian cattle in some Indonesian abattoirs, and responses from the National Party, and cattle graziers from northern Australia. They depend heavily on live exports. He has not responded to the comments about Labor’s loss of its moral compass, but did respond to the 4-Corners report with a statement that read, in part,

"I asked industry at the beginning of this year for proposals on how welfare outcomes could be improved, particularly after animals arrive in importing countries. I am currently considering these proposals.” Mr Ludwig’s full statement can be read at http://www.abc.net.au/4corners/special_eds/20110530/cattle/docs/statement_ludwig.pdf

If true, this might go some way to answering Andrew Wilkie’s assertion about Labor’s moral compass. However, reports can take an indeterminate amount of time to consider, once in government hands, and the test will be how quickly Mr Ludwig responds, and in what manner.

Immigration Minister, Chris Bowen, was quicker to respond to the assertion that Labor had lost its moral compass. He told The Age

''everyone has got their own moral compass … the government's moral compass is driven by trying to avoid the risk of [people] getting on boats, and to increase our humanitarian intake''.
 http://www.theage.com.au/national/malaysian-deal-critics-slammed-20110606-1fpb5.html#ixzz1P3mawXfl

So, exactly what is a “moral compass”?

The terms ‘morals’ and ‘ethics are often used interchangeably. They are somewhat different.
Morals represent the shared beliefs of a group or society about what is 'true’ or right in behavioural terms. Morals are not the exclusive domain of religions, or religious groups. Different societies have different moral codes, sometimes at odds with religious groups within their society.

Ethics refers to a study of what is right & wrong; and how that determines our actions. Some things are deemed to be absolutely right or wrong. For example, murder, rape and child abuse are seen as absolutely wrong. However, in many cases, what is ethical behaviour is much more difficult to determine. Ethical behaviours are commonly written as “professional standards”.

However, what is ethical, need not be moral, and neither might be legal. Extreme legislation such as that allowing slavery, or apartheid, made such actions legal, but almost everyone would say they were neither moral, nor ethical.

The Centre for Defined Ethics says that

“a Moral Compass promotes the intellectual idea of a moral vision that's based on a worldcentric vision and the necessity for care towards each other.” http://www.themoralcompass.co.uk/case.htm

Do Governments & Political Parties Have a ‘Moral Compass’?

If they did, I suggest they have lost it.
Federally:
Members of the ALP’s right-wing factions have said privately to journalists that if they don’t effectively demonise boat people, and send them to long-term detention, or off-shore, they believe they will not win the next election. Our society’s ‘morals’ are that these people do not deserve to be treated humanely, because they arrived by boat, and used people-smugglers to get here. Voters’ morals & ethics are not based on ethics requiring “the necessity for care towards each other”. Labor’s policy is based on matching, or being even harsher than, the Liberal-National Parties’ policy. The policy of both Labor and Liberal-National parties is based on what will get us elected. John Howard’s successful strategy was to demonise refugees, and it changed our society’s morals. Those morals have been reflected in the treatment of other refugees, such as those granted asylum after working for, and helping, Australian troops in Afghanistan. They have reportedly been vilified and subject to racial abuse in Queensland and Victoria. Labor’s policy on those asylum-seekers that arrive by boats is based on political expediency, and the desire to be re-elected, not on any moral compass.

The Liberal-National Parties’ policy contributions, in Opposition, are confined to: ‘No’; and a burning, and largely unstated desire to return to the extremism called Howardism: demonising all asylum seekers; personal wealth at the expense of societal wealth; redistribution of wealth to those with more, and to private companies; and with IR controls in the hands of politicians and big business, not courts.

In NSW:
The previous Labor government passed the so-called Part 3A Planning legislation. It allowed the Minister for Planning to arbitrarily introduce regulations, over-riding local planning laws; environmental and heritage laws; and  put a straitjacket on the courts. It allowed approval of for example, the approval of a car park at the Barangaroo site without the developer having to clean contaminated soil; it allowed the approval of coal-seam gas extraction on farmland. There appears to be not much influence of a moral compass there.

The current Liberal-National government in NSW proposes to introduce IR legislation that will straitjacket the IR court. Like the Part 3A Planning laws, a Minister will determine what judgement the court will make. It is motivated by a right-wing desire to attack public-sector unions. That is, it is based on political extremism. There appears to be not much influence of a moral compass there.

Our political parties are not guided by any moral compass. They are guided by ‘spin doctors’ and party power-brokers whose only desire to gain political power, and to keep it.

John

Australia's Asian Solution

The Prime Minister, Julia Gillard, has announced a deal with Malaysia to receive and process 800 asylum-seekers. These asylum seekers have paid people-smugglers to send them to Australian territory by boat, and frequently travel illegally through Malaysia and Indonesia.

The 800 boat people will be processed by the UNHCR, but will join the end of the queue to be processed. In return, Australia will take 4000 refugees from the UNHCR in Malaysia.

The in-principle agreement is designed to

• be a public deterrent to people arriving by boat, rather than through established UNHCR programs.
• provide a partial solution to the number of asylum-seekers arriving by boat that are self-funded, paying money to people smugglers.
• improve populist public perception of the Government's policy on asylum-seekers. This is an important area for the ALP (in and out of Government), and one where it has historically trailed the Liberal-National Coalition.
• avoid the Labor Government having to use Nauru, which was used by the former Coalition Government under John Howard, and about which the then Labor Opposition was very critical.

The Coalition has repeatedly called for Nauru to be used as an off-shore processing centre. Labor has consistently refused, but has not argued its case, apart from earlier statements about Nauru not being a signatory to UN Conventions on Refugees. Neither, though, is Malaysia. This gives Tony Abbott and the media the freedom to speculate and question why not, other than embarrassment such a reversal would cause.

Not that Nauru is an ideal country, nor was it ultimately effective for the Liberal-National Coalition government, which included Tony Abbott. ALL of the people they sent there were ultimately granted asylum in Australia, and it cost Australian taxpayers $2m /day even when empty!

Other reasons for it being less than ideal include:

• it has had an ongoing history of corruption and incompetence within the government and public service
• it had a reported history of allowing money laundering and tax evasion
• it is not a party to the UN Convention against Transnational Organized Crime 
• it is not a party to the 1988 UN Drug Convention
• it is not a party to the UN Convention against Corruption

Julia Gillard's Labor Government learnt from its mistakes with its proposed East Timor processing centre, which was announced during the election without having consulted the Government of East Timor. This time, the Government has reached an in-principle agreement before announcing it. But it has not yet learnt effective communication and how to lead policy debate in Australia.

As with most Federal, and state, politics, there is no debate among the political parties; just press releases and spin from both sides, and negativism from Tony Abbott and the Liberal-National Coalition.

John

Divisive Abbott In Front

This week, Tony Abbott was saying that the government should listen to the unions. The context is over the carbon tax and some unions have publicly expressed concerns about their fears. In particular, Paul Howes from the Australian Workers Union, which represents many workers in the manufacturing, steel, aluminium, glass, oil & gas, aviation, agriculture, construction, state public services, local government, health, plastics, hospitality, food, paper, resources, aquaculture, events and racing industries. Many of the industries above will be affected in some way by a carbon tax.

Back to Tony Abbott.

• As a Minister in the Howard government, Tony Abbott voted for, and defended, WorkChoices legislation. WorkChoices was designed to lower wages, and prevent unions from representing members in pay negotiations. That is, he wanted to stop unions speaking up for members. This week, he thinks they should, because it suits him politically.
• On 9-December-2010, Tony Abbott gave an interview in which he said: http://www.liberal.org.au/Latest-News/2010/12/09/Tony-Abbott-Doorstop.aspx
• “The Labor Party is in government but the Greens are in power. “
  and
• “… we’ve had more WikiLeaks today which demonstrates that the unions are in charge … they’re effectively running the Government”. (most of us would think that, if the Greens were in power, they’d also be in charge. Not, apparently, Tony Abbott, who thought the unions ran the government, and therefore had power!)
• Here, he clearly wanted Prime Minister Julia Gillard to NOT listen to union officials.
• On 16-April-2011, Tony Abbott thought (http://www.liberal.org.au/Latest-News/2011/04/16/Tony-Abbott-Doorstop.aspx )
• “I just think it’s very important that the Prime Minister should listen to the people who are at last expressing the concerns of Australians workers.”
• Today’s position by Tony Abbott seems to be the exact opposite of what he wanted when in Government, and as Leader of the Opposition last December.

For all of that, Tony Abbot’s short slogans, frequent media “doorstop” statements, and frequent visits to backdrop sites to which voters relate is effective. While it is driven by his need to be divisive – a tactic he believes will eventually make him PM -  By contrast, Julia Gillard and Labor seems to want to debate the issue, with no one, certainly not PM Julia Gillard, visiting workplaces with the same frequency as Tony Abbott. No wonder the latest polls show a drop in support for Labor, and for Julia Gillard as PM.
The chart shows the figures from Newspoll.




Back to Julia Gillard. If she wants to counter Tony Abbott’s popularity, she, and her ministers, need to adopt the same tactics as Abbott:

• frequent “doorstop” interviews
• these interviews need to have a backdrop/setting that voters will connect with.
• there needs to be constant repetition of short slogans.  eg ‘carbon tax – for the environment’; ‘carbon tax – for our children’
• she should not stop proper debates, but, since most voters are unthinking, and respond to the number of media appearances/mentions, Abbott’s techniques are effective. They're not good for public debate, but effective.

John

Climate Change Compromised

Compromise usually means that no one gets what they want, and the compromise is accepted by all because they realise that no one is completely happy, but everybody got something.

 

So it is with today's announcement that, from July 2012, there will be a fixed price on carbon (pollution), with an eventual move to an Emissions Trading Scheme in about 3 years. (2015) Business, especially big business, wanted, and lobbied both Coalition & Labor Governments for it. Then Labor PM Kevin Rudd acceded to this, and former Coalition Minister and then Leader of the Opposition, Malcolm Turnbull, supported it. The right wing of the Liberal Party shafted him, and installed Tony Abbott as Leader of the Opposition. Abbott promptly labelled climate change as 'crap', in direct opposition to Australia's Chief Scientist, and the CSIRO.

 

Last year's Federal election resulted in a hung Parliament, and Julia Gillard only became Australia's current Labor Prime Minister after gaining the support of Independent MP's. The result included a multi-party Committee on Climate Change. The Committee members are listed at http://www.climatechange.gov.au/en/government/initiatives/multi-party-committee/members.aspx Prime Minister Gillard Chairs the Committee. No Coalition members are listed, although the Coalition was invited to nominate 2 members of the Committee.

The compromise reached by the Committee is a fixed price on carbon for 3 years, then a transition to an ETS. All parties have compromised:

• The Greens wanted an ETS, including on-farm activities.
• Rob Oakeshott and Tony Windsor wanted an ETS, not including on-farm activities. They represent rural and regional voters.
• Labor wanted an ETS, but different from that, and it had twice lost a vote in Parliament.

So, all parties wanted an ETS, except the Coalition which chose not to have members on the Committee. However, none could agree on the form of the ETS. Hence, a compromise, fixed-price on carbon, that shows they want to do something about climate change, but none have got what they really wanted. If it is introduced, I hope that imported goods are also subject to it, including the carbon-cost of transport to Australia. Otherwise, companies manufacturing in Australia will be further disadvantaged.

Politics is sometimes defined as 'the art of comprommise', but it seems to me that it often compromises good public policy.

John

Healthy Change From Gillard

Prime Minister Julia Gillard has announced proposed changes to the Health Funding agreement to be discussed, and possibly agreed, at the COAG meeting on Sunday.

The proposed changes include:

• Dropping the proposed loss of 30% of GST to the Federal Government. Ms Gillard referred to it as a "merry-go-round of GST money". It was to be used to raise the Federal Government's funding from 40% to 60% of health funding.
• the proposal for the Federal Government to fund 100% of out of hospital health services.
• direct funding of hospitals has gone. This is a good thing, I think. Direct funding by bodies under the control of a Prime Minister, Premier, or Minister removes some transparency, and allows for politically-driven funding. Think WorkChoices, where the independent Industrial relations Commission was disbanded, and a federal pay authority established under the effective control of former Prime Minister John Howard.
• The Federal Government will commit to funding 50% of future increases in health funding, subject to "performance targets" being met. This is less than the 60% under the previous model, and indicates to the states, especially those led by Liberal Party Premiers, that the cost of retaining control over all their GST is that the Federal Government will commit less.
• Funding will be paid by Federal & state governments to a new Health authority, to be independent of Federal & state government interference, similar to the Reserve Bank. This is a much improved policy to the direct funding model previously proposed by Kevin Rudd.

The changes are largely politically driven to gain the approval of states which have a Liberal Party Premier, including Barry O'Farrell who is expected to be NSW Premier after the 24-March election. Politics is, after all, the art of compromise.

Liberal Opposition Leader Tony Abbott has, predictably criticised the changes, calling them "the biggest backdown since the surrender of Singapore" (in WW2). Abbott has a history of criticising absolutely everything from the Federal Government, so his comments are no surprise.

It was disappointing that no journalist, not one, asked Abbott the following questions:

• Mr Abbott is this new proposed policy 'bad policy'? [Abbott would have effectively answered 'Yes']
• If it is such bad policy, why will 2 Liberal Premiers, and one Premier-in-waiting, agree to it?

Also disappointing was that no journalist asked Ms Gillard:

• Ms Gillard wasn't the direct funding model, proposed by former PM Kevin Rudd just bad policy, because it opens the possibility of future governments funding hospitals for their own political ends, and isn't it better that state governments be given a pool of funds to allocate to hospitals through their Health Departments? [this would have been awkward, because it would require criticism of Kevin Rudd's proposals, something she was at pains to try to avoid]
• GST revenue to states will fall during some future economic downturn. How will health funding be affected by future economic downturns, given that the states use GST money to partly fund health?

  John

Abbott's Levy Too Far

Tony Abbott has sent an email to Liberal Party supporters, at the end of which he asks for a donation to fight the (proposed) flood levy. It will really be a short-term addition to the rate of Medicare Levy. Both sides are playing politics with this.

The email bears Tony Abbott's signature, and will have been approved by him, but would have been sent by a political staffer.

Notwithstanding the words of the email, Tony Abbott has no bipartisan cooperation in mind, and has, indeed, been pressuring the Independent MP's to support him and bring down the government.

The post script plea for donations to campaign against flood levy is rather tacky in its implication. That is, that there should be no levy, and perhaps that taxpayers should be more self-centred and contribute less to society. It is Liberal Party philosophy that "user pays" ... unless there is political capital to be made for them.

Abbott's plea seems to be backfiring. It seems that some older members/supporters of the Liberal Party actually think using an income tax levy to rebuild infrastructure is entirely appropriate, and Tony Abbott risks alienating not only Liberal supporters who hold such beliefs, but many Queenslanders, too. Queensland is a state vital to both parties' electoral success.

For its part, members of the current Labor government have hit the media with criticism of the email, again for purely to score political points. Abbott tried to laugh it off, saying he believes Labor emails also solicit donations. But it's what he doesn't say that's important here - that Labor has not asked for donations to fund ads opposing a mechanism to rebuild infrastructure after a natural disaster. It was just tacky and rather cheap politics by Tony Abbott & the Liberal Party. So is the "point-scoring" by Labor.

John

The Politics Of Rebuilding

This week saw a return to normal partisan politics.

Having flown the kite in the media, Prime Minister Julia Gillard announced the proposed addition to the Medicare levy to fund the reconstruction of public infrastructure, especially in Queensland. The levy will fund about 30% of the reconstruction and will be collected for only 1 year. It will levy an extra 0.5% of income over $50000 and less than $100000; and 1%  for incomes over $100000. You can see the proposed weekly effect at http://www.smh.com.au/business/how-the-flood-levy-will-affect-you-20110127-1a69i.html 

Politically, Julia Gillard wants to ensure the budget surplus as promised in 2012-13. It will be her first surplus, with the previous and current Labor Government having rightly gone into deficit to ensure Australia did not slide in recession during the Global Financial Crisis, but she also needs to prove wrong Tony Abbott's assertion that Labor would never deliver a budget surplus. Never mind the extenuating global financial and exceptional flood-induced circumstances.

Meanwhile, Opposition Leader Tony Abbott and Shadow Treasurer Joe Hockey have been relentlessly pursuing the "great big new tax" line in as many 5-second media grabs as possible, rather like Chicken Little's "the sky is falling, the sky is falling". His solution to finding the extra money is to cut government programs and other spending. Again, for political purposes, he suggests dumping the National Broadband Network. This is despite his alternative plan from the election being generally regarded as slower, and creating more congestion in the Internet wireless bandwidth.

Tony Abbott and Joe Hockey have been critical of the levy, because it's an income tax levy. But they supported the levies introduced and imposed by former Liberal Prime Minister John Howard: the gun buy-back levy after the Port Arthur massacre, and the airline flight levy to pay employee entitlements after Ansett went broke. They also both proposed an income tax levy to fund a paid parental leave scheme at the 2010 election. A levy on income tax is not a philosophical problem for them; the problem is that they are not in government, and they therefore see the need to whinge about it.

Meanwhile Abbott has also applied political pressure to the Independent MP's, with whose support Julia Gillard remains Prime Minister. There's nothing "bipartisan" about that, despite any public comments to the contrary by him.

Tony Abbott's negative politics, which reinforces the selfish "why should I pay more" and "I already donated to the flood relief" attitudes will be a challenge for Gillard, and Treasurer Wayne Swan, to overcome. We have just celebrated Australia Day, and given ourselves a pat on the back for wanting to help our society. To now whinge about a 1-year small levy to help rebuild our flood-ravaged physical and social infrastructure is, perhaps, hypocritical, selfish, and not the kind of Australian we say we want to be.

John

Political Vacuum

As Stephen Conroy defends the National Broadband Network (NBN) from criticism by an OECD report, there are also other things to consider.
The OECD has criticised a number of policies. The Federal Opposition is beating its slogan drum, and both sides of politics have much to work on.

The policies comments on Australia by the OECD include:

• Response to the global financial crisis: Tick. Good for Labor, unhelpful to the Liberal/National Parties' Coalition.
• GST: Cross - the OECD believes it's too low, and we should tax (fresh) food. Not good for either Labor, or the Coalition. Flat taxes are regressive, and hurt those with lower incomes more. Neither side wants to raise taxes, even if they should to fund the services taxpayers demand.
• NBN: Cross. The OECD believes it's anti-competitive. Unhelpful for Labor, good for the Coalition, which doesn't want it.  The Coalition wants the private Internet and phone companies to build a spaghetti network of copper and wireless. But wireless is already overcrowded, not likely to get any better, and none of the companies want to invest in new infrastructure.
• Emission Trading Scheme: Cross. the OECD believes we should have one. Not good for either Labor, or the Coalition. The criticism stems because Labor has not implemented this policy, or even a simpler carbon tax. It was spooked by voters' acceptance on the Coalition's sloganeering.

Meanwhile Tony Abbott has been spruiking his "stop the boats" slogan in Parliament. He does this knowing that he doesn't have to. Indeed, he doesn't even have to have a policy - just a slogan. Meanwhile the UN has expressed its concern about "off-shore processing", including Labor's Timor solution, and the Coalition's "Pacific Solution" on Nauru.

The fact is that many of the OECD's criticisms, but not all, stem from the fact that our politicians, and their parties, do not, and will not, determine good public policy and run with it. They simply spend too much time palying politics, and paying 'media advisers' with taxpayers' money.

John
 

Federal Politicians Work Too Hard

Do they? Last weekend, Federal Liberal MP, Dr Mal Washer, said that the longer working hours for current MP's and Senators are "unsustainable". The argument is that the tight numbers in the House of Representatives mean that MP's have to be available to rush to the House if required by their Party.

Previously a number of MP's from either side of politics could mostly absent themselves from the House or Senate without any great consequence. there was also a "pairing" arrangement, which meant that if a member were absent on Parliamentary or government business, a member of the other side would either absent themselves, or abstain from voting. (Liberal) Opposition Leader tony Abbott refused this practice as a routine matter, and has only decided on a "case-by-case basis". this increases the uncertainty, and the requirement for members to at least attend Parliament House.

The second thing that has increased over the last 10 years is the amount of time politicians spend on "party-political" duties. That is, using work time, and taxpayer-funded advisers, to perform work for their political party.

Thirdly, the time spent on seeking advice about, preparing, rehearsing, and finally presenting the 3/5/10 second media grab has increased exponentially. These mostly consist of untested political assertions, short slogans (remember, I discussed 'sloganeering' during the recent election) designed to get attention, but contribute nothing to any debate on issues. While there is undoubted pressure from sections of the media for a media grab, politicians are not bound by duty to be media tarts. And rather too many of them are. 'The media' is seen as something to be managed, to be used for party political advantage, and for self-promotion. Too often whether a story will look good in local news, News Ltd papers, Sky News, or other media is more important than working towards good policy and contributing to sensible, rational debate.

I don't doubt that politicians work long hours. I just question how many of all the hours, and taxpayer dollars, are spent on the job we employ them to do, and how many are spent on party work, and self-promotional work. I do think that, if the thoughts of Dr Mal Washer are valid, politicians need to restructure their work, to focus on their work as representatives (of either voters, or states), and to have better defined times when they are available to the media.

John

Hockey Alone on Economics

Joe Hockey is alone on economic policy. Opposition Leader, Tony Abbott, was stunned into silence this morning when asked if he supported Hockey's 9-point plan to control the banks. Twice he was asked if he supported Hockey's plan; twice he  gave an unrelated response. Later, he was asked if that was all just a bit of a misunderstanding withe 9-point plan. His reported response was "Umm ...", followed by a longish silence.

Later still, Abbott made phone calls to radio stations with essentially pre-prepared statements and answers.

Meanwhile, Jon Howard said that Hockey is "not in the same league" as (former Treasurer) Peter Costello. On 22 October, The Australian reported: "Senior Liberal MPs, including frontbenchers, told The Australian yesterday they did not agree with the position Mr Hockey had taken on the banks and said it demonstrated lack of judgment. "This is certainly not Coalition policy," one frontbencher said."

Among the ideas were:

• legislation to regulate the interest rates banks can charge.
• An investigation by the Prudential Regulation Authority to investigate the risks banks take.
• More pressure from the ACC on alleged price-collusion the big 4 banks
• other points in the plan are more difficult to find,  but legislative regulation of the banks is definitely contrary to the Liberal Parties free-market policies.

For all the bagging Hockey has received, a new Banking Inquiry might not be such a bad idea. They make noises about rising costs of funds (ie overseas interest rates,because about 2/3 - 70% of their loan funds are sourced overseas. However, they quite deliberately left out the bit about the high $Aus benefiting them enormously while they (re)negotiate their 3 and 5 year loans!

Deregulating the banking sector created an oligopoly: the big 4 banks control the vast majority of home loans, and they flex their individual & combined market power. Their repetitive statements about the need to increase interest rates is classic consumer softening by repetition and frequency. It should be resisted, especially in light of the significant increases in their profits, and profit margins! An inquiry is one way, but not the only way, for more people to be aware of this information, and counter the banks advertising-by-repetitive-statement tactic.

For all that, I believe Joe Hockey is rather alone in the Liberal Party on economic policy, and the "amended", watered-down plan taken to Shadow Cabinet and ultimately approved by them was really them saving Hockey's backside. They won't do it too many more times.

John

Hockey's Bank Bashing Blooper

This week saw Shadow Treasurer Joe Hockey indulge in a little bank-bashing as he tried to score a few political points and be seen as 'hero' to those with a mortgage. It seems to have backfired, on a number of levels.

First, he proposed legislative controls on bank interest rates. That is, he has proposed either aan extreme socialist policy, or an extreme right policy. It is certainly a policy that seems contrary to Liberal Party policy and beliefs, which say that "we simply believe in individual freedom and free enterprise". Legislating interest rates is contrary to both of those beliefs. Malcolm Turnbull, perhaps the Liberal Party's only moderate with any public profile, did his best to distance himself from the comment. Tony Abbott said nothing. (Aside: John Howard and Peter Costello would have publicly decried the suggestion and privately carpeted the perpetrator, while making public statements about banks not needing to raise rates.). Liberal backbencher Don Randall said it was a "typical lunatic fringe idea", not realising it had come from a member of his own party with leadership ambitions.

Second, he proposed an inquiry into the financial services, particularly of banks. The concept is worth considering, but Hockey showed he was just a talking head by indicating he had no plan for any terms of reference.

It seems that, in his quest for a headline and populist policy, Joe Hockey has somewhat alienated members of his own party, and earned the criticism of business and economists, especially in the media, and the Government. While Tony Abbott does not want the instability, real or perceived in polls, associated with a reshuffle, Joe Hockey's days as Shadow Treasurer could well be numbered. Post-Christmas / New Year would be, perhaps, the least damaging time for an Opposition reshuffle.

Populist announcments are never good policy.

John

Abbott Cops a Kloppering

Marius Kloppers has publicly stated his preference for a carbon tax. Opposition Leader, Tony Abbott, must have fainted. Kloppers was instrumental in the advertising campaign against the mining super profits tax, is head of the world's largest resources and mining company (BHP Billiton).

Kloppers is an experienced business man and engineer. He most certainly wants the realistic 'best' for his company. European countries are already moving to limit carbon emissions and have improved their energy efficiency since the 1980's, following oil crises in 1973 & 1979 which saw the supply of oil limited, and its price rise significantly. While there is plenty of coal for BHP to mine, sell, & use, Kloppers perhaps recognises moves within the world's economies to limit carbon emissions.

A carbon tax is simple, fixed and easily incorporated in business plans. An emissions trading scheme (ETS)was favoured by John Howard (who resisted actually doing anything) and the previous and current Labor Governments under Kevin Rudd and Julia Gillard. But under ETS, carbon permits would be traded, like shares, on current and 'futures' markets. Their price, like shares could fluctuate wildly, making business planning more difficult. There have also been suggestions that, with such a low level of proposed reductions, an ETS would achieve little except make 'winners' and 'losers' in business.

Kloppers might well be making a pre-emptive strike to achieve a level of certainty his business needs. Nevertheless, a carbon tax might well be a worthwhile inclusion in Australia's plan to reduce carbon emissions from its people, and its businesses.

Also, remember that some of the media, notably News Ltd publications The Australian and The Daily Telegraph will argue against carbon reduction on the basis of their support for the opposition Liberal  Party.

My view is that we should probably have a combination: the carbon tax introduces a level of certainty, and a limited ETS reduces the effect of the open-market price volatility.

The last thing Tony Abbott wanted was for a significant business leader to publicly state his preference for a carbon  reduction scheme, let alone a carbon tax! Phone calls will made, and emails sent from the Liberal Party. So too, press releases and media grabs from a congo line of Coalition members will be cheap as chips from the Opposition.

You can read more at:

• http://www.asb.unsw.edu.au/newsevents/mediaroom/media/2009/march/Pages/emissionscarbontax.aspx 
• http://www.globalpolicy.org/component/content/article/216/45883.html 

John

Gillard Announces Ministry

Prime Minister-elect Julia Gillard has announced her Ministry to start Labor's second term of government. It is, as you know, a minority government, dependent on The Greens and 3 Independent MP's.

You can read the full Ministry at http://www.smh.com.au/national/the-gillard-ministry-20100911-155qc.html . After swearing-in on Monday, they will be listed (via a link) at http://www.aph.gov.au/whoswho/index.htm

There are some things worth noting:

• Kevin Rudd, former Prime Minster, has been given Foreign affairs. That was widely tipped, following a deal made between him and Julia Gillard during the election campaign. It also recognises his standing within the Parliamentary Labor Party.
• Former Foreign Affairs Minister, Stephen Smith, has been given Defence. He insists it's not a demotion, and this is still a senior Ministry. It also paves the way for the government to drop construction of 12 new submarines at Adelaide. Defence military officials are not convinced that lessons have been learnt from the rather disastrous contracts for Collins-class submarines. Only one of the six is currently in service. The new submarines were a project which had the support of Kevin Rudd, when he was Prime Minister.
• Peter Garrett has moved to Education, away from environmental repsonsibiities. He had problems with the home insulation scheme, in particular.
• Former Minister for Climate Change, Penny Wong, has been given the Finance portfolio. Again, the former government had been unable to negotiate an Emissions Trading Scheme, which The Greens thought was too watered-down, and which was not the carbon-tax recommended by Prof. Ross Garnaut in he report for the government.
• Mark Arbib and Bill Shorten are both in the outer Ministry. They were major players in the moves that dumped Kevin Rudd and appointed Julia Gillard as Prime Minister. Mark Arbib was formerly ion the outer Ministry, but this is a promotion for Bill Shorten.
• Independent Rob Oakeshott turned down the offer of a Ministerial position - Regional Australia & Regional Development. I think that was smart; among other reasons, it does put the onus, and responsibility squarely with Julia Gillard and the Labor Party, and it allows him to retain his independence.

Nevertheless, there seems to be reasonable correlation between Ministers' strengths, abilities and their portfolios. The proof, of course, will be in their performances.

Tony Abbott has yet to announce his Shadow Cabinet.

John

Govt Decided, Politics Continues

Two days after the 3 Independent MP's made their decisions, the politicians, political parties and their supporters are back to basics. Independent Bob Katter, from north Queensland made his decision to support the Liberal-National Coalition shortly before lunch on Tuesday. Tony Windsor and Rob Oakeshott from NSW announced their decision to support a Labor government later in the afternoon.

Today, we had "news" stories of both Prime-Minister-in-waiting, Julia Gillard, and Liberal Opposition Leader, Tony Abbott, addressing their respective party 'meetings'. These were stage-managed media 'events' for PR-via-the-news; they were for public consumption to 'appeal' to voters.

But all is not as it seems: Liberal Andrew Robb wanted to challenge 3-different-leader-Deputy Liberal leader, Julie Bishop, but was convinced not to challenge for the sake of public perception. Likewise, it is probable that former (deposed) Prime Minister,Kevin Rudd, will get his choice of Ministerial position - probably Foreign affairs & Trade - as part of pre-election deal with Julia Gillard. While Labor has significant internal party issues to deal with, there will be strenuous efforts to keep them behind closed doors. That will probably suit Bill Shorten, Mark Arbib, and those from the NSW Labor Party backroom who controlled the Federal election campaign. But Labor must deal with the issues created by Shorten, Arbib and their Federal Party factions, and those from NSW's right faction who controlled the election campaign.

Meanwhile Liberal and National Party members appear to have been behind campaigns of insult and innuendo run against Tony Windsor and rob Oakeshott. The Liberal and National Parties will undoubtedly continue to undermine and character-assassinate the Independent MP's, while Tony Abbott (Liberal) and Warren Truss (National Party) will try to exude a facade of niceness.

John

Treasury Comparison

The Independent MP's have had briefings from Treasury officials about the costings of the election policies of both the ALP and Liberal-National Party Coalition. These costings, and some policies important to them, will form the basis of which side of politics forms a minority government in Australia: a largely centrist-conservative Labor government; or a more right-wing conservative Liberal-National Coalition government.

A summary of the costings can be viewed at

Coalition-costings

Labor Party Costings

So, which is the better economic manager? I doubt you could form an opinion based on these documents. the only possible conclusions are that: there is little difference between the final figures from Treasury; that the Liberals did not use standard Treasury methods for their costings (based on the number of adjustments Treasury made). In terms of economic management, the sharemarket is indifferent, perhaps indicating that investors largely recognise that there is little or no significant economic difference between Labor and the Coalition. The market is more concerned about its ties to what happens in the US economy/sharemarket, and, to a lesser extent, in Europe.

My conclusion from the Treasury costings and the parties' public policy documents is hat the Liberals & Nationals lean more towards personal wealth, rather than community (public) wealth. That is, they want to distribute more public money (tax) to private entities, both individuals, and private companies, than does Labor.

I think it is important to retain, and enhance, our community/public wealth through investment in public education at all levels, public health and social programs that benefit individuals, communities and society. Becaue of those beliefs, I was once called a "latte-sipping, chardonay-drinking, left-wing (John) Howard-hater" by a Liberal Party supporter. I took it as a compliment.

John

Wilkie Signs With Labor

Independent Andrew Wilkie, from Tasmania, has today signed an agreement to support a Labor minority government, IF Julia Gillard is able to form one. That might be more likely, but by no means certain, as Bob Katter, Rob Oakeshott and Tony Windsor consider their positions over the weekend.

The terms agreed to include $340 Million for Hobart Hospital, and $1.8 Billion for hospitals across the nation; and a commitment to force states to use smart cards on poker machines, if they don't agree voluntarily. This will take some negotiation, and the states, addicted to gambling revenue, will resist staunchly.

Wilkie reportedly rejected an offer of almost $1 Billion for Hobart Hospital from Tony Abbott - perhaps he was prepared to forget about the rest, or cut another $Billion from their funding.

Simply throwing money at one electorate would have readily been seen by the electorate as "pork barrelling" - corruption by any other name. Julia Gillard seems to have at least provided it as part of a greater level of funding for other hospitals.

Given his treatment by the former Liberal PM, John Howard, after Wilkie's whistle-blowing about questionable intelligence being used to justify the invasion of Iraq, it was always hard to see him agreeing to terms with members of that same former, Liberal-National Coalition government.

John

Abbott-Hockey Swallowed By Own Black Hole

It really didn't a take long for some details, at least the "bottom line", on Tony Abbott's costings to appear. Secretary of treasury, Ken Henry, was involved in briefing the 3 Independents about Treasury costings of Coalition election promises. Treasury estimates a shortfall - "black hole" - ob between 4& Billion and $11 Billion.


In typical politician style, Tony Abbott tried to brush aside concerns, saying that they were merely "differences of opinion". One  of the differences is that Treasury refused to allow the Coalition to adjust the conservative bias allowance, a $2.5 billion blow to its costings. This allowance, used by Treasury in all its costings, ensures that the extremes of "estimates" by politicians are moderated. It seems to imply that the Coalition used the most optimistic figures it could, perhaps a more economically reckless approach.

Joe Hockey put in his 2-bit's worth, saying "It is not a black hole because fundamentally we are taking this out of surplus." But it's a surplus they don't have, and which they seem to have estimated at the most optimistic figure they could think of.

 This whole concept of not using Treasury ( a principle created by John Howard & Peter Costello, because it gave them an advantage in government; it's just come back to bite the Coalition parties!); of planning it back before June ( at least 2 months before the election was called); of using a company with links to the Liberal Party; and using the most optimistic figures have all contributed to The Liberal Party's problems, real or perceived, as NOT being better economic managers than Labor.

mmm .. what's that old saying??? Oh, yes! "When first you practise to deceive ... "

John