Pearls and Irritations

John Menadue

  • John Menadue. Democratic Renewal and our loss of trust in institutions

    Fairness, Opportunity and Security
    Policy series edited by Michael Keating and John Menadue

    We speak often about the need for new ideas and policies to fill the void in the public debate.

    We will be examining these issues in this series Fairness, Opportunity and Security.

    But I think there is a prior problem.  We need political reform to restore trust in our political system and our polity.

    In the community there is a pervasive sense of powerlessness and disillusionment with governments, parliament and political parties.  We are tired of one liners, zingers and endless rhetoric. We want to be treated as adults in a serious discussion, on issues like climate change, fairness and our colonial type dependence on the US.

    That disillusionment goes much wider to many other institutions-e the churches, the media and corporations. In late April this year the Governor of the Reserve Bank Glenn Stevens criticised Australia’s major financial institutions for treating their customers poorly and forgetting that the financial system relies on trust. He spoke of ‘the erosion of a culture that placed great store in acting in a transparent way’ He added ‘where trust has been damaged, repair has to be made’ In early May this year the former Secretary of Treasury Martin Parkinson told the Australian Financial Review ‘I think our institutions are being eroded in their capabilities and eroded in public trust’

    But my focus here will not be on corporations or government departments. It will be chiefly on our ‘political’ institutions.

    In examining our institutions, I make two important assumptions.  The first is that we need institutions for stability, cohesion and progress.  The second is that over time power exercised through institutions is always abused, even by the best of our fellow citizens. Reform and renewal must be an ongoing process.

    In January this year Essential Research outlined our alarming lack of trust in institutions. Asked how much trust they had in institutions and organizations the interviewees responded as follows.

    ABC 53%
    High Court 53%
    Reserve Bank 48%
    Charitable organizations 44%
    Environment groups 33%
    Local Councils 32 %
    Commonwealth public service 32%
    Newspapers 30%
    Online News Media 27%
    Federal Parliament 25%
    The News media 25%
    State Parliament 24%
    Trade unions 23%
    Business groups 23%
    Religious organizations 22%
    Political parties 14%

     

    It is disturbing reading.  Other surveys tell the same story. Perhaps it is noteworthy that the three most trusted institutions are public institutions, the ABC, the High Court and the Reserve Bank.

    The Nordics are probably the most successful societies and economies in the world. As I have argued the key to their success in my view is trust- trust of the government by the governed and vice versa. There is preparedness to pay quite high taxes based on a confidence that the government will spend money wisely. If only!

    Major political parties in Australia are losing support.  In the 1970s over 90 % of people were basically committed to a major party. At the 2013 federal election it fell to less than 80%. According to an ANU Social Research study 43% of Australians at the last election believed it did not matter who was in power. In particular young people are opting out. About 25% of eligible people did not enrol at the last federal election, did not vote or voted informal. According to a recent Lowy Poll 40% of Australians did not believe that democracy was the best form of government.

    Membership of the ALP and the Liberal party has declined from about 300,000 after WWII to about 50,000 today.  No one will admit how bad the numbers are. Money, not party membership has replaced membership as the driving force of political campaigns.  It is called ‘donocracy’ in the US.

    In 1950, 44% of Australians claimed to attend church at least monthly. It is now about 20% and falling.   Almost all the churches have been damaged by the cover up of sexual abuse.

    Union membership is now down from over 50% in the 1950s to about 20% of the workforce today. In terms of trust unions are on a par with organizations like the Business Council of Australia.

    This breakdown in confidence and trust in institutions is not because we don’t want to participate in institutions in our community.  The republic referendum some years ago was lost because of the quite strong view by many Australians that they wanted to be directly involved in choosing our future president.

    I don’t think the alienation has occurred so much because institutions have changed.  The problem is that they haven’t changed enough. The ground has moved beneath them and they have not responded. The information and education revolution has made us much better informed and much better equipped to participate in institutions, but we are often denied the opportunity.  Women particularly have more time to be involved in institutions outside the family, but they are often excluded.

    The media and particularly TV have contributed to the alienation.  Public figures are trivialised and their personal foibles take pre-eminence over temperate and informed policy debate.  At election times, what matters is the swinging voter in the swinging electorate, rather than the important issues of concern to the wider community.

    We are clearly not the innovators we were a hundred years ago in institution building.  In 1856 Victoria led the world when it introduced the secret ballot for parliamentary elections.  It was known internationally as the ‘Australian ballot’.  In 1859 all male British subjects in the eastern states and South Australia had the vote.  In 1894 South Australia was an international pacesetter in votes for women.  The first democratically elected Labor government in the world was in Queensland in 1899. In 1901 six disparate states joined together in our federation.

    How then can we renovate at least some of our public institutions?

    Politics is about how power is exercised and for whose benefit.  It is a noble calling and disparaged too much, particularly by those who want untrammelled private power for themselves.  But to change the way our institutions operate, faces one major obstacle – the power of those who benefit from the present system.  Insiders want to hang on to power.

    In many pre-selection ballots for either the ALP or the Liberal Party, a hundred or so members select the party candidate, yet in the wider electorate there are probably 40,000 to 50,000 supporters.  As a result of declining memberships and tight control, successful candidates are, not surprisingly, insiders – staffers of politicians, friends or relatives of faction leaders. Many of these new ‘white bread politicians’ have limited life experience.

    There are possible options to address some of the clear democratic deficiencies in our major parties.  We need to debate them.  Party members in federal electorates could directly choose delegates to federal conferences and break the power of state officials.

    Whilst guarding against abuses the community as well as party members should be able to vote in party pre-selections for parliament.

    Unless the political parties broadly represent their voter constituencies, we will continue to tread the slippery road of personalities and political spin, rather than addressing the real issues and concerns of the community.  While the major parties refuse to treat the community seriously and run away from public discussion, their natural constituencies are disenfranchised.  Those that are really enfranchised are a small group of party power brokers and aspirational swinging voters in swinging electorates.  Because the major parties are out of touch with their constituencies, the debate on the big-ticket items runs into the sand – reconciliation, the republic, relations with Asia and climate change.

    Parliaments are in need of renovation.  The cabinet and party machines dominate parliament.  The executive has become arrogant ‘Question time’ is ‘spin time’.  I am sure the community would welcome parliamentary renovation which should be guided by the principle that the separation of powers must be enhanced whether it is to discourage a Prime Minister dragooning parliament or a minister intimidating the judiciary.  Particular reforms could include: four year fixed term federal parliaments to discourage excessive and almost continual electioneering; an independent speaker to encourage a more inclusive, open and less adversarial parliaments; regular audits not only of the entitlements of MPs but also their performance; more conscience votes by MPs with less party discipline on ‘non-core’ issues.

    To assist members of parliament to counter the power of the cabinet and the public service the last parliament established a Parliamentary Budget Office. It provides independent and nonpartisan analysis of the budget cycle. It was a good start. But its work is restricted to budgets. Similar offices should be established in such areas as health, defence and foreign affairs. The research resources of the Parliamentary Library should also be enhanced. In the development of Gough Whitlam’s policy program the Parliamentary Library was a critical enabler.

    We need an improved parliamentary committee system where hopefully we can begin to see again the art of negation and compromise. The Senate has shown that improvements are possible.  A good start in our next parliament would be an all-party committee to consider ways in which the performance of the parliament could be improved and the power of the executive contained.

    We need a broad agenda for parliamentary reform.  The major party that is credible on parliamentary reform will reap a large electoral dividend. The best way for Tony Abbott and Bill Shorten to prove their bona fides as parliamentarians is to demonstrate by actions how they value the Parliament and use it as their forum and not television grabs, and talk back radio. What a pleasure it would be to see the parliament as a lively forum for debating policy and asking genuine questions to elicit information rather than a means to score politicall points. If only our politicians would seriously endeavour to find common ground by starting on such issues as senate electoral reform, political donations and ending the abuse of power by lobbyists. Leadership by Tony Abbott and Bill Shorten in these areas is the best way to restore confidence in parliament and politics. Don’t talk about it. Do it.

    At the political level the Hawke Government provides us with an example of the way we need to proceed. It was about building consensus- within his government, within his party, with the opposition and with the community which responded to this consensual style of leadership by being prepared to consider the need for reform. Consensus building was politically appealing and effective in policy outcomes. We are a long way from this style of politics today.

    Institutions, like people, are all prone to error and abuse of power.  Robust democratic institutions and democratic debate are critical. Too often we avoid addressing institutional failure by suggesting that they are all leadership problems.  ‘If only we had a better Prime Minister, or a better Chairman, all would be well’.  But all leaders inevitably disappoint us.  We need institutions and a public culture which are in good order.

    In addition to renewal of our democratic institutions, I suggest there is something even more essential – the values and conventions that we need to hold in common. Decades of failure to keep promises have taken an inevitable and heavy toll. Fairness, respect for others, openness, integrity and trust, are the glue that hold us together.    A democratic and free society will remain free only if the virtues necessary for freedom are alive in our community.  Democracy cannot be separated from public morality. The democratic project and institutions within it must be informed by what is right and true. Every society needs a moral compass.

    We speak about the failures of our political leaders to outline policies. That is valid criticism. But behind that failure is an even more important issue, the failure of our institutions and the institutional processes necessary to assert the public interest in the face of very powerful vested interests.

    Like individuals, institutions also depend on trust. That trust must be shared and reciprocated.

    Moral behaviour is in the end about how our words and actions enhance human dignity and human flourishing.  Robust and well functioning institutions are an important means to that end.

    We have a lot of work to do.

  • John Menadue. The price we are paying for the Greens.

    The recent successes of the Greens in state elections in Victoria and NSW show us how populist nonsense can succeed at least in the short term. It has also shown the failure of the ALP to counter the threat of the Greens.

    There are two major issues on which the policies of the Greens have brought disastrous results for Australia. When it really mattered on climate change and asylum seekers, they sided with Tony Abbott.

    The Greens literally shed tears over the plight of asylum seekers. But they must bear a heavy responsibility for what we now see on Manus and Nauru.

    In the Senate the Greens sided with Tony Abbott against the arrangement with Malaysia, which, whilst not ideal, would have been a useful first step in curbing boat arrivals. That arrangement with Malaysia was negotiated with the understanding and broad support of UNHCR. Not only did the Greens side with Tony Abbott opposing amendments to the Migration Act to allow the arrangement with Malaysia to proceed, they embarked on an unscrupulous bashing campaign of Malaysia.

    With the collapse of the Malaysian arrangement boat arrivals in Australia increased dramatically. The result was Manus and Nauru. The Greens cannot be absolved for their populism and the consequences we now see on Manus and Nauru.

    The Greens must also accept major responsibility for the collapse in public support for effective action on climate change. In collaboration with the Coalition in the Senate they opposed the Carbon Pollution Reduction Scheme of the first Rudd Government. If the Greens had supported the Rudd Government’s CPRS in the Senate, the issue of climate change would not have been fully ‘done and dusted’ but we would be in a far better position on climate change than we are today. As a result of the Greens joining with Tony Abbott in the Senate we have no Emissions Trading Scheme, no carbon tax and a fig leaf of a policy called ‘Direct Action’.

    The Greens have inflicted disastrous damage to Australia on both climate change and asylum seekers. Their sabotage on both has set back real reform and decent policies.

  • John Menadue. Best we forget – the Frontier War and the Maori Wars.

    See below post I made on this subject in October 2013. John Menadue

    Repost.  The drumbeat grows louder. 

    In the lead-up to the centenary of Gallipoli in 2015 the military drums are growing louder. We are expected to cheer it all. In the process we will be encouraged to engage in a lot of mindless myths. Amnesia will also play a large part.

    In an interview published in the SMH on October 5 this year, Brendan Nelson, the Director of the Australian War Memorial, former Minister for Defence and Parliamentary Leader of the Liberal Party, said: ‘The soul of the nation is embedded in many ways in the [Australian War] memorial’. Is it? I certainly hope not. He then added ‘the more obscene the war, the more inexplicable for us it seems today, the more many [young people] admire these men and women who went in our name.’ What an extraordinary thing to say!  In short, he is saying that the more ‘inexplicable’ or dubious the war, the more young people admire the values of those that served in those wars.

    Inexplicable or dubious wars must surely include our involvement in Vietnam, Iraq and Afghanistan. What is the SAS really doing in Afghanistan, in our name? Even the worst of wars like these seem to be an opportunity to burnish the Gallipoli and Anzac legend. In this interview with Brendan Nelson, the correspondent Mark Dapin commented that the kind of ‘rhetoric that you hear today [from Brendan Nelson] lay dormant for decades after the Vietnam War. So there has been a recent militarisation – or a re-militarisation – of the Australian imagination.’

    This growing surge of militarism was triggered by the campaigns of the Hawke and Keating Governments to revive Anzac Day with highly publicised visits and commemorations of the Anzacs at the battle and grave sites in Turkey and France. Interestingly, this campaign to revive Anzac Day did not highlight Australian sacrifices in the Pacific where we live.

    This surge of interest in Anzac has continued. John Howard was proud to note that Anzac Day had been successfully revived.

    In the lead-up to the Centenary of Gallipoli there will be extensive media campaigns and programs in schools. The PR machines in Departments of Defence, Veterans Affairs and the War Memorial will pull out all the stops. Prime Minister Tony Abbott has appointed himself as the Minister for the Gallipoli Centenary. Michael Ronaldson will be the Minister Assisting for the Centennial.

    To help promote the Centenary, the Australian War Memorial will be exempted from reducing costs by providing an “efficiency dividend” like all other Commonwealth departments and agencies.

    Tony Abbott has committed Australia to raise its defence expenditure to 2% of GDP. This can only be directed at deterring China. How absurd it is to suggest that Australia could build a military capacity to deter China. As Mike Scrafton has commented, this is ‘naïve militarism at its worst’.

    World War II was the most critical this century for our future, even survival. But it remains quite secondary to the myth-making about World War I and our service to Britain.

    In World Wars I and II, the fallen were invariably buried overseas and the family notified by telegram or letter from the Minister for Defence. Now the bodies are returned to Australia and their valour acknowledged in a funeral, usually attended by both the Prime Minister and the Leader of the Opposition. One deceased serviceman who accidentally shot himself in Iraq was buried in his home town in Gippsland with full military honours, a three volley gun salute and even a fly past. The Prime Minister and Minister for Defence attended.

    In all this honouring of the valour of service people, we refuse to acknowledge that successive Australian governments have involved us in “inexplicable” and dubious wars. To cover our moral and political failure, we hide behind the valour of our service people. Who was it who said “the sacrifice of brave men does not justify the pursuit of an unjust cause” This hiding behind the valour of others is also a device to hide our slavish adherence to the United States with its militarism both at home and abroad which President Eisenhower warned about over sixty years ago

    In my blog of September 19 ‘Frontier War and asylum seekers’, I pointed out that the most reliable estimates show that over 30,000 indigenous people were killed in this country by police and settlers from the late 18th Century to the early 20th Century.  The killings occurred in small and isolated skirmishes over a long period. It was an epic war for control of a great land mass. In proportion to our population more people died in this war than any in our history.Many more died of disease and a broken heart. We ignore it like the Turks refuse to acknowledge the Armenian genocide. We have memorials all over our land for those that fought against the Turks and Germans in World War I, but not any monuments for the 30,000 indigenous people who died trying to stop the occupation of their land. The Australian War Memorial ignores the Frontier War completely.

    In my blog of April 22 this year, I highlighted that Australia and New Zealand did not first fight together at Gallipoli in 1915. As the State Library of South Australia records ‘between 1845 and 1872, just over 2,500 Australian volunteers saw service in New Zealand. … It took many steps including a local militia and troops rushed in from Australia … to conclude the first Maori war .. In 1860, the grab for land sparked further conflict between Whites and the Maoris … again the Australian colonies were asked for urgent assistance.  The colonies rallied and sent troops. The colony of Victoria even sent its entire navy which comprised the steam corvette HMVS Victoria. NSW also sent gunships to support the troops.’ There was no mention of these events as we celebrated the Centenary of the Australian Navy this month. What convenient memories we often have.

    As we listen to the gathering drum beats that lead us to the Centenary of Gallipoli, we should be careful not to be swept away by militarism and patriotism. We have much to be proud of in our history. We also need to be honest with ourselves.

    As Professor Henry Reynolds put it, we are encouraged to intone ‘lest we forget’ in memory of the fallen For many of our wars the public mood is ‘best we forget’. .like the Frontier War and the Maori Wars.

  • John Menadue. Murdoch is about ideology not tax dodging.

    There was an interesting exchange between Julian Clarke, News Corp’s local boss, and Senator Christine Milne in the Senate Economic References Committee into Tax Avoidance. Julian Clarke spelt it out very clearly that Rupert Murdoch was running The Australian for ideological purposes. The exchange was as follows:

    “With due respect, I don’t expect you to agree with this, but I consider The Australian to be the finest national newspaper operating in Australia,” [Clarke] said in reply to a question from Senator Milne.

    Milne: We are not agreed.

    Clarke: You are in a minority.

    Milne: Not according to your sales.

    Clarke was then asked if our ‘finest national paper’ actually had any direct competitors. He admitted “no there isn’t. But if The Australian wasn’t there, there’d be no one doing what we’re doing.”

    Milne: Precisely.

    Clarke: We have a difference of opinion about why we’re doing it. But every time you tell me we are doing it to run tax losses, I’ll tell you we’re not.

    Milne: I’m happy to accept you are doing it for ideological purposes.

    Clarke: I’m happy with that.

  • John Menadue. Tax dodging may be legal, but is it fair and ethical.

    Senior executives of companies like Google, Microsoft and Apple have all admitted to the Senate in the last week that they have avoided billions of dollars of Australian tax by a range of devices such as transfer pricing and earnings made in Australia being diverted to Singapore which has a lower tax rate. In every case they have told us that it is all perfectly legal. And apparently it is. Other companies such as Westfield and News Corp have also received earlier publicity because of their massive tax avoidance. But it’s all been legal!

    Michael West in the SMH on April 6, 2015 told us that Rupert Murdoch’s US Empire siphoned $4.5 billion from its Australian business, tax free. The Murdoch media complained to the rooftops about this report. It plays hard ball with all its opponents but really squeals when it is under attack.

    Heath Aston  in the SMH on 1 April 2015   reported that according to the Australian Taxation Office ‘Australia’s biggest 900 companies claimed deductions and exemptions worth $25 billion last year – enough to wipe out two thirds of the entire Federal deficit.’  Yet many of these companies have been leading the charge that the government needs to show some backbone and fix the budget deficit. The Abbott government seems to prefer fixing the budget at the expense of the sick and unemployed.

    Michael West in the SMH, who has been so persistent and effective in revealing tax dodging, told us on Feb. 13 2015 that documents obtained from the ATO under FOI show that ‘Australian corporation taxes are in crisis because of the explosion of tax haven dealings of multinational companies.. one of the most telling FOI finds is a comparison between trade and international-related party dealings. Together Singapore and Switzerland account for 40% of related party trade. That level of related party dealings bears little relationship to real trade’. As Michael West put it ‘In laymen’s terms the purpose of these related party deals is often to siphon profits out of Australia to avoid paying tax’.  Is this fair?

    In the SMH on Feb.9 2015 Michael West estimated that Google ‘is making off with at least $130 million a year that belongs to the Australian taxpayer and rising’. Does that sound ethical?

    Peter Martin in the SMH on May 13 last year revealed that 75 ‘ultra high earning Australians paid no tax at all in 2011-12’. Is that fair?

    Michael West again in the SMH on 20 December 2014 reported that Glencore which has recorded revenues in excess of $10 billion p.a. paid only $400 million in tax over three years.

    According to Roman Lanis of UTS the Westfield Empire paid an effective tax rate of only 8% over the last decade. With its chorus of lawyers and accountants, it was apparently able to make this legal. But was it right?

    We hear a lot about dole-bludgers and welfare cheats but is all this tax minimisation fair and right?

    The Tax Justice Network, in collaboration with United Voice, reported that 29% of Australia’s top 200 companies had effective tax rates of 10% or less. Even worse, 14% of these 200 top companies paid no tax at all. It estimated that these top 200 companies are avoiding tax per annum of $8.4 billion. These figures have not been seriously challenged.

    These massive tax avoiders say that is all legal.  They have the benefit of expensive legal and accounting advice that ordinary tax payers cannot afford. Is that fair?

    These major tax avoiders in collaboration with the Australian Taxation Office refused to have their affairs disclosed for public scrutiny. We are told it is ‘commercial in confidence’. Apparently the ATO thinks it should cosy up to wealthy companies and they will then hopefully cooperate. Does that same concern for taxpayers extend to ‘ordinary’ taxpayers?   There is a lot of unethical behaviour allowed for the powerful and wealthy which is not permitted for ordinary people and Australian companies, large and small.

    We now also know that our four big audit firms are advising these tax-dodgers on how to minimise their tax. It is noteworthy that the European Union has recently enacted legislation curtailing the activities of audit firms who have been giving tax advice. Our ATO is apparently moving in the opposite direction by employing staff from the big four audit firms to replace the loss of experienced ATO staff. Talk about Dracula in charge of the blood bank! Michael West in SMH on 15 December 2014 described this quite bizarre action as follows “The ATO is running a pilot scheme whereby it outsources the duty of tax compliance for Australia’s largest companies to none other than the company auditor….The large taxpayers are to pay their own external audit firms.. read the Big Four… to conduct their compliance work as well as doing the audit’. It is hard to think of a more obvious conflict of interest than this.

    The tax dodgers have clearly got many powerful friends amongst the political, business and professional elites. But they are friendless in the community. In March this year, Essential Research asked respondents how they felt about the tax being paid by various groups. They indicated that the following did not pay enough tax.

    Large businesses- 60% did not pay enough tax.
    People on high incomes- 59% did not pay enough tax
    Mining companies- 67% did not pay enough tax
    Companies- such as Google and Apple 73% did not pay enough tax.

    In a panel of over 1400 readers of the SMH, 83 % agreed that the ATO should be free to name and shame companies suspected of not paying their fair share of tax. (SMH April 11-12 2015)

    The same newspaper also reported that in a survey of marginal seats 90 % of people believe that the government has failed to tackle tax dodgers.

    The Swinburne Leadership Institute Survey released today said that business leaders ‘are perceived to disregard .. the wider public good’.

    The boards and CEOs of these companies have a heavy ethical and moral responsibility and dodging the issue by claiming confidentiality and that it is all legal will just not wash.

    Corporations don’t make decisions. It is individuals who make decisions – and those decisions should not only be legal but they should also be fair and ethical.  That responsibility to act fairly and ethically cannot be avoided by individuals or deflected to someone else. Joe Hockey likes to infer that his business chums are ‘lifters’ but is it true of these tax dodgers!

    There is difficulty in getting international cooperation to address this tax avoidance. A good start however  would be full disclosure including full disclosure of all subsidiaries, full disclosure of all related party transactions and balances and a breakdown of taxes paid in Australia and other countries. Jeffrey Knapp has outlined this in today’s The Conversation.

    How can Tony Abbott seriously expect public support on necessary budged repair when we see such massive tax avoidance by large and wealthy corporations many of which are foreign owned.

    Corporations have been given a privileged position in our society. It is called ‘limited liability’ in that shareholders can only be liable for the money they invest in a corporation and no more. That is an enormous advantage that has been conveyed by the community.  If and when a company goes bankrupt, the community, employees and creditors have to pick up a lot of the debts and consequences. But the advantage that we give to companies is obviously not reciprocated by many companies.

    Business people should act in an ethical manner and not inflict damage on the nation for the sake of short-term commercial or personal gain.

    These companies that are avoiding billions of dollars in tax in Australia take advantage of the infrastructure and services that have been paid for by the Australian taxpayer. They rely on highly trained and skilled Australian staff. Those staff have been educated and supported by Australian taxpayers.  In some instances, these companies have taken advantage of research grants – funded by the Australian government (and taxpayers).

    There is also a matter of trust. As a community we need to have trust in our major institutions including corporations. In recent years the media has been full of comment about our loss of trust in politicians, parliament and political parties. But commercial institutions are also critical in our society and a major loss of trust in them has very serious consequences.

    Many of our corporations are forfeiting our trust. We are getting into dangerous territory both for themselves and for ourselves.

     

     

  • John Menadue. The miners may have been better off with a super profits tax.

    As a result of the lower iron ore prices there is a dramatic shake-up coming amongst our iron ore companies, the largest of which are foreign owned.

    These companies conducted a vociferous campaign against the Resources Super Profits Tax. They were successful. As a result of the failures of the Rudd and Gillard Governments to effectively tax the mining companies, the state governments particularly of Western Australia and Queensland stepped in with very large increases in royalties. The Western Australian Government could hardly have believed its good luck in the royalties it extracted from the iron ore companies in Western Australia as a result of the China export boom.

    But that has now all changed. The mining companies are stuck with these very high royalties whilst their profits have been reduced or eliminated. There is not much doubt that companies such as Fortescue would be now much better served if there had been a Resources Super Profits Tax rather than the large increases in state royalties that they continue to pay. Professor Flavio Menezes, Professor of Economics at the University of Queensland, said in The Conversation on 7 April 2015 ‘Fortescue Metal Group’s Andrew “Twiggy” Forrest was one of the most vocal opponents of the super profits tax. Fortescue’s financial position is currently under significant pressure due to falling iron ore prices caused by oversupply, and the slowing Chinese economy. Ironically, it would likely be better off today under a well-designed RSPT than under a royalties regime.’

    In my blog of 17 October 2013, I pointed out the short-sightedness of the miners and the likely problems that they might face as a result of reduced profits and increased state royalties. See link below.

    https://publish.pearlsandirritations.com/blog/?p=827 

    I drew attention in that blog to the report of the GST Distribution Review of October 2012 that ‘Well designed rent-based taxes are likely to be more economically efficient than royalties, particularly in periods of low commodity prices or high costs. … Other factors, such as the size, variability and timing of the return received by government, as well as administration and compliance costs are also important considerations when choosing between alternative resource charging regimes.’

    Guest blogger, Dr Michael Keating in a post ‘The mining tax debacle’ of 14 September 2014, commented that what was surprising is that the Labor Government did not elect to just extend to all minerals the existing Petroleum Resource Rent Tax (PRRT) which also had a 40% tax rate. This would have been much easier to explain and as acknowledged by the Henry Review, the PRRT can approximate the impact of the Resources Super Profits Tax.  See following link to Michael Keating’s post.

    https://publish.pearlsandirritations.com/blog/?p=2424

    An appropriate mining tax regime is still a matter than needs addressing in Australia. The efforts of the Rudd and Gillard Governments were clearly in the right direction, but very badly managed. The miners took advantage of their lobbying power. Their action seemed to be of great benefit to them at the time, but many miners now and in the future will pay a heavy price for a failure to set up an appropriate taxation regime for miners in Australia.

    The miners are very likely to lament their action in destroying the Resources Super Profits Tax which was levied on profits. In its place, they have been levied with very high royalties by state governments which do not have a direct relationship to profits.

     

  • John Menadue. Cafes and restaurants are booming despite penalty rates.

    Despite the booming café and restaurant industry, the special pleading by employers on penalty rates and minimum wages goes on and on.

    Employers seem to have little appreciation that there is a difference between the market and society. The latter is much more important. The right to a decent wage and time off for recreation and relaxation with family and friends is essential. Markets are important, but they are a means to an end.

    Speaking of penalty rates, Peter Martin in the SMH  said ‘This Easter give thanks for penalty rates, they keep us human. Easter has become sacred even for the non-religious and the non-Christian.’

    Many employers who call for cuts in minimum wages or penalty rates have little appreciation of the difficulties for low income earners. Attacking the low paid is easy pickings.

    Workplace researcher Professor Barbara Pocock warns that cutting weekend penalty rates will erode the time Australians spend on informal relationship building with friends, family and neighbours. As soon as we take that wage premium off we make all time the same and we will see a lot more squeezing of that informal social time on Saturdays and Sundays.

    One of Australia’s great achievements in nationhood was in 1907, the living wage. But employers keep pleading that minimum wages are too high and they should be reduced to increase employment and presumably profits! But there is no conclusive evidence to support that proposition. Late last year more than 600 US economists, including seven Nobel Prize winners, signed an open letter to Congress calling for an increase in the minimum wage. They said that the weight of evidence showed that increases in the wage had little or no negative affect on the employment of minimum wage workers.

    The Chamber of Commerce and Industry in Australia has recently been encouraging businesses that were closed over Easter to put signs in their window saying that it was because of penalty rates that they could not open. The Small Business Minister, Bruce Bilson, repeated this line of special pleading.

    These businesses must have decided to enter business knowing what the penalty rates were. Didn’t they factor that in to their business plans?

    I suspect that a lot of special pleading on penalty rates is to divert attention from bad business decisions. It is so easy to blame ‘the system’ rather than acknowledge one’s own business mistakes.

    In the last five years, spending at restaurant and cafes has climbed 36%. According to the ABS in 2013-14, the net growth in the number of cafes and restaurants was 7%. For all businesses it was 1%. The café and restaurant business is booming, but still the sector keeps complaining about penalty rates.

    Employers who keep up their special pleading on minimum wages and penalty rates should really address the way they run their own businesses, and not always want to get the system changed to their advantage. They need to stick to their knitting.

    If the last 20 years has taught us anything about industrial relations, it is that continual change is costly for all concerned. In 1993 the Keating Government abandoned our centralised IR system. In 1996 Peter Reith downgraded the role of IR tribunals. In 2005 John Howard gave us Work Choices. Then in 2009 Julia Gillard gave us the Fair Work legislation. Now the present government wants more changes. But what we really need is more stability in our industrial relations framework because in the end good relations at the work level are necessary to improve productivity, effective local management and employee participation.

    The vested interests that want to cut penalty rates claim that we have an inflexible labour market that results in high wage costs. But all the evidence is that the annual rate of wage growth has declined substantially and that our labour market is showing considerable flexibility.

    Clearly we need to review penalty rates and minimum wages and all industrial relations from time to time but we seem fixated with the need for change and more change, mainly for ideological reasons or perhaps to hide business failure.

    Whilst employers and governments continue with their special pleading on penalty rates, the attitude of the public is very clear. According to Essential Research in January this year, 81% of voters think that people who are required to work outside normal hours should receive a higher hourly rate. 68% said that they would oppose cutting weekend and public holiday rates for hospitality and retail workers.

    The public seems to have good sense in these matters, which employers and the government would be wise to heed.

  • John Menadue.  Alcohol and junk food – winning at the expense of our health.

    If you seriously follow almost any major Australian sport as I do, you will be conscious of the saturation alcohol and junk food advertising.

    And in the run up to the centenary of Gallipoli there are no holds barred to link heroes and booze… VB now have a new television advertisement filmed at Melbourne’s Shrine of Remembrance which tells us to bow our heads to the 16 th Battalion,AIF at Gallipoli and raise a glass of VB to their heroism. How tacky can you get!

    This is a re run of the campaign that VB have been running since 2009. The 2012 campaign was fronted by General Cosgrove  now our Governor General. He sits at a bar and tells us how good VB is in supporting veterans and their families. There is an explicit link between the military, heroes and alcohol.

    The evidence is clear that  alcohol and junk food are causing long-term damage to our health. We cannot  ignore it.

    The Council of Australian Governments’ (COAG) National Partnership on Preventative Health was established because of the alarming increase in preventable chronic diseases as a result of people’s lifestyles. As Nanny Endovelicus pointed out in this blog in October last year and reposted on 22 and 23 January this year ‘These lifestyle issues – in particular smoking, poor nutrition, alcohol misuse and physical inactivity already account for some 40% of potentially preventable hospital admissions. … The growth of lifestyle diseases worrying those watching health expenditure were primarily in diabetes, various cancers, COPD, strokes and other preventable cardiovascular system diseases.’

    Alcohol Consumption

    Latest statistics are that about 20% of the population continues to drink at levels risky to their long-term health – pretty well unchanged from the ABS results in 2007-08; half of males and one third of females drank riskily for single occasion risk.  The estimated economic and social cost of alcohol is over $30 b. per year.. The good news is that since the 1970s our per capita alcohol consumption has declined although it remains above the OECD average.

    Obesity

    By mid-2012 almost two thirds of Australians over 18 years were over overweight or obese according to the ABS, a significant increase from a decade ago. The current combined level for obesity and overweight is 63% for adults.  Of children between the ages of five to 17, about 18% are overweight and 8% are obese. This is very bad news. Australia is now in the top league tables in the obesity stakes, still lower than the US, but we are catching up fast.

    Smoking

    We have clearly made progress in reducing tobacco consumption despite the activities of The Australian newspaper and Institute of Public Affairs in defending. Big Tobacco. In 1980, 35% of our population smoked. In 2012 it was down to 20%. It has been a success story and major contributing factors have been the bans on tobacco advertising on TV and radio, and major public education programs.  It is quite a success story in showing what can be done although smoking amongst our indigenous communities and country people is still high.

    We have a job ahead of us to address poor health, particularly as a result of alcohol addiction and junk food, including sugary drinks that are driving our obesity epidemic.

    But the signs are that the federal government is turning its back on the problem. .

    In the last federal budget, Program 1.2 for the Health Department which deals with drugs like alcohol, education against illicit drug use and tobacco was reduced from $224 million in 2013-14 to $161 million in 2014-15. According to the forward estimates it will be down to $131 million in 2017-18.  In money terms this is a reduction of 40%.

    The COAG Partnership on Preventative Health with the states has been abolished together with some $400 of promised funding. The programs that will be mainly affected were focused on children, community exercise, nutrition, education and lifestyle risks.

    The Australian National Preventative Health Agency was abolished in the 2014 budget.

    The Australian Institute of Health and Welfare which provided invaluable data on health risks and preventable disease has been abolished and its functions transferred to a large productivity and performance authority.

    The government’s  compromised position  on prevention was also clearly shown a year ago when the Assistant Minister of Health Fiona Nash hired a junk food lobbyist as her Chief of Staff. She tried to wipe out the industry’s voluntary food-star labelling system. With control of ministers’ staff by the Prime Minister’s Office this appointment of a junk food lobbyist could not have been a misunderstanding..

    This all adds up to a story of short term success for the alcohol and junk food industries with the complicit national sports organisations, sports people and the broadcasting media.

    It is also a good example of budgetary cuts for financial short term advantage which have long term and damaging consequences for our health. The bad health consequences of alcohol and junk food consumption don’t show up immediately. But the consequences down the track are clear and horrible.

     

    In this post I have drawn heavily on earlier posts by Nanny Endovelicus, Preventing Prevention.

  • John Menadue. Who and for what are we fighting in Iraq.

    Australia has sent troops to fight in Iraq Wars I, II and III. Our participation has been disastrous in each.

    The latest news tells us that in the battle to oust IS from Tikrit the victory belonged to the Shiite militia controlled by the Iranian Revolutionary Guard Corp. So our ‘allies’ in Iraq against IS are now Shiite militia led by Iran. This is a sectarian war in Iraq into which we should never have blundered. What side are we on now? Presumably it is the Shiite militia who have a cruel record as bad as IS.

    Perhaps the US will let us know what side we are on.

    We should get out of Iraq as soon as possible.

    See link below to an article in the SMH today by Paul McGeough about the sectarian nature of the war in Iraq.  John Menadue

    http://www.smh.com.au/world/is-crisis-brings-iraq-divisions-into-focus-20150403-1me1n1.html

  • John Menadue   We still need to address the defects in our constitutional arrangements that November 11 1975 revealed.

    We have rightly been remembering the achievements of Malcolm Fraser on human rights and race.

    But we should not forget the enormous damage that the events of November 11, 1975, did to Australian public life and trust in our institutions. Conservatives keep highlighting the shortcomings of the Whitlam governments in order to hide their complicity in the deceit and Vice-regal intrigue, even with High Court Judges, that brought about the dismissal of the Whitlam Government that had a clear majority in the ‘people’s house’, the House of Representatives.

    In speaking kindly of Malcolm Fraser in later years, Gough Whitlam said that ‘Malcolm was a ferocious opponent, but he never deceived me’.  He correctly stopped sort of absolving John Kerr of deceit.

    In my autobiography, ‘Things you learn along the way’, published in 1999, I wrote.

    ‘Governments can’t legislate for trust and decency. Those values are not anywhere in the Constitution. But they underpin the whole foundation of how we operate in a civilised community towards each other. Those values are the glue that holds us together. On 11 November, what was expedient became more important than doing what was right. Trust in ourselves and our institutions was dealt a severe blow.

     There was something quite unfair and dangerous about it all in a way that I could not accept then or now, almost 25 years later. An accelerating decline in trust in politicians, the political system and public institutions began in 1975. Conservatives had damaged state parliaments in NSW and Qld by refusing to follow the convention that casual Senate vacancies were filled by a member from the same party. Led by conservatives, the Senate broke a convention of centuries that governments are made and unmade in the ‘people’s house’. The High Court, through the political intervention of its Chief Justice, was compromised. The media, through News Ltd particularly, abused its power. The Governor-General’s Office was damaged more than any other institution. I never again felt the same confidence in our institutions. …

    The Palace was not amused by what Kerr had done. I learned of this later from a note from Tim McDonald, the Official Secretary at Australia House, London, who relayed to me a discussion he had had  with Sir Martin Charteris, who was personal secretary and political adviser to the Queen at the time. The discussion that McDonald had with Charteris was within a few weeks of the dismissal. Commenting on the Whitlam dismissal, Charteris said to McDonald that ‘the Palace shared the view that Kerr acted prematurely. If faced with a constitutional crisis which appeared likely to involve the Head of State, my advice would have been that [the Queen] should only intervene when a clear sense of inevitability had developed in the public that she must act. This had been Kerr’s mistake’. A clear sense of inevitability had not been arrived at.

    In considering whether Kerr acted prematurely in a political dispute it is important to consider three points: first, the Opposition was clearly losing momentum. Whitlam was dominating the parliamentary forum and on the deferral of supply, opinion polls showed 70 per cent favoured passing the budget and the Government had dramatically improved its political standing to be running neck and neck with the Opposition. Secondly, supply would not run out until at least 30 November. The Governor-General could have waited almost three more weeks. …. Thirdly, newspapers were full of speculation at the time and confirmed afterwards that some Opposition senators were ready to break.

    Senator Reg Withers, the Leader of the Opposition in the Senate in 1975, is quite clear. Ten years later in the Australian, on 6 November 1985, he said: For all I know, my blokes might have collapsed on the 12th. I don’t know. You just hope day after day you would get through until the adjournment … There were two Senators who told me they were prepared to go … I reckon we had another week. If I had got through that week then you would look at the following week. I would have lost them some time about 20 November onwards. I know I would have lost them in the run up to 30 November, but it wouldn’t have been two then, it would have been ten.’

    In retrospect it is clear to me that John Kerr’s intervention saved Malcolm Fraser from a humiliating defeat.

    The heartfelt tributes to Malcolm Fraser since his death, including my own, should not obscure the damage that John Kerr in particular did on November 1975. We still need to address our defective constitutional and political arrangements that made the dismissal possible. And Conservatives should stop hiding their complicity in the dismissal by referring unceasingly to the shortcomings of the Whitlam Governments.

    Note:  My full account of the dismissal in my autobiography can be obtained by clicking on ‘John Menadue website’ at the top left-hand of the home page and then clicking on ‘book’ on right-hand side. The chapter on the dismissal ‘A job on the line, John Kerr’s or Gough Whitlam’s’ commences on page 139.

  •  John Menadue.  Improving health outside the health portfolio

    Ministers for Health in Australia are seen very largely as ministers in charge of health services rather than health. The fact is that some major issues causing poor health or which could be the means to improve health are outside the normal health portfolio.

    • Major health problems are caused by junk food, alcohol and tobacco. The Australian Institute of Health and Welfare tells us that tobacco smoking is the largest cause of preventable illness and death in Australia It estimated that in 2004/5 smoking related disease cost Australia $31.5 b. The AIHW also told us that in that year the consumption of alcohol was estimated to cost Australian society $15.3 b. The Director of the Alcohol Education and Rehabilitation Foundation said that the economic and social cost of alcohol was estimated to be $36 b p a. He added that about 30% of harm to children is caused by alcohol. The scourge of alcohol, smoking and junk food are best addressed through taxation and restrictions on advertising, particularly directed at children and not through the health portfolio.  The action by the Rudd /Gillard governments on plain packaging of cigarettes was the most important health reform in years.
    • Health improvement is made very difficult when the major sponsors of sport in Australia are interests associated with alcohol and junk food. Channel Nine’s cricket coverage with slats, heals and tubby has saturation coverage of alcohol and junk food. Australian cricketers and footballers line their pockets with money from alcohol and junk food companies. There is not much leadership or role modelling here They are complicit in promoting bad health habits and undo a lot of the good work on prevention. How can our sporting codes discipline players for excessive alcohol consumption, when the main sponsors of the codes are liquor companies?
    • Improvement in the health of indigenous people will mainly occur outside the health portfolio in areas such as employment, better diet, housing and education of young people together with reduced consumption of alcohol and drugs.
    • We know that because of social and economic disadvantage, the death rate for those with the lowest socio-economic status is 13% higher than the Australian average, and for those living outside capital cities it is 8%. Poverty is the principal cause of poor health in Australia. And the health portfolio has only a limited role in the fight against poverty
    • Education, childcare, including pre-natal, spacial planning, housing, trade (particularly relating to intellectual property in pharmaceuticals), population, transport, particularly for country people, taxation and social security, employment, justice and the environment, all have direct impacts on the health of Australians.
    • We are coming to appreciate how electronic health and the national broadband network offer great opportunities for improved health services, particularly for people in remote areas. But the NBN is not within the health portfolio.

    In short, the health Minister and his department must have expertise beyond ‘health services’ and particularly economic expertise in a joined-up government approach.  Unfortunately they usually rank well down the ministerial and public service ladder.  There is reluctance by policy makers to look on healthcare as an industry and to apply the normal evaluative mechanisms which are applied to other industries. Such a blinkered view allows the development of an idea that health should be exempt from the normal economic considerations of efficiency and equity. It’s a notion that pushes economic thinking to one side, in the erroneous belief that economics is intrinsically illiberal and dismissive of human welfare.

    For a country reviewing its healthcare industry, it is useful to take a broad view and consider the whole industry and not just that part of concern to the health portfolio…

    We keep pouring money into hospitals. We never seem to appreciate that like the family refrigerator hospitals will always be kept full. Health problems are best addressed first in primary care, prevention and often outside the health portfolio

     

     

  • John Menadue. More problems with the Department of Health and Ageing.

    On 16 March, I drew attention to a Capability Review of the Department of Health and Ageing by the Australian Public Service Commission. It set out a very worrying analysis of the overall performance of DHA.

    We now have a report by the Australian National Audit Office of DHA’s administration of the Fifth Community Pharmacy Agreement (5CPA). The 5CPA is the fifth agreement which the Commonwealth Government has made to provide subsidised medicines to Australians who are eligible through the Pharmaceutical Benefits Scheme (PBS). This agreement is with community pharmacies across Australia.

    The Australian National Audit office points to major concerns about DHA’s administration of this 5CPA.

    It says ‘Six broad principles and objectives were included in the 5CPA. Limited departmental information plus shortcomings in DHA’s performance reporting and 5CPA evaluation framework mean that the department is not well positioned to assess whether the commonwealth is receiving value for money from the agreement overall, or performance against the six principles and objectives.’

    The report adds ‘Administration of 5CPA has been mixed … A number of key government negotiating objectives for the 5CPA were only partially realised and there have been shortcomings in key aspects of DHA’s administration at the development, negotiation and implementation phases. …’

    The report refers to shortcomings in the Department’s estimation methodology and that a number of the government’s strategic negotiating objectives were only partially realised.

    Like the Capability Review by the Australian Public Service Commission, this report by the Australian National Audit Office points again to the extremely worrying performance of the Department of Health and Ageing.

    The performance of the department on co-payments should not be a surprise to anyone.

    The long-time secretary of the Department of Health and Ageing has been promoted to become the Secretary of Finance.  John Menadue.

    See link below for full report.

     

     

    http://www.anao.gov.au/Publications/Audit-Reports/2014-2015/Administration-of-the-Fifth-Community-Pharmacy-Agreement/Audit-summary

  • John Menadue. Cars are killing our cities.

    At almost every election, we are being wooed with stories of more freeways to accommodated more and more cars. It is self-defeating. In our public infrastructure we waste more money on roads than on anything else. As I have argued in my re-post below, there are a whole range of policy issues that we must address to curb the growing volume of cars and the damage that they are doing to our cities.  We refuse to embrace it, but we will be forced to consider congestion taxes to limit road use.

    In the current NSW state election, the Liberal Party is proposing as a centrepiece of its policy, a WestConnex Stage 3 development, a toll road in western Sydney. The NSW government claims that this toll road will carry 120,000 each day by 2031. Unfortunately, Australia has a history of over-predicting the usage of toll roads. As Michiel Bliemer in The Conversation … see following link … points out that ‘The patronage of the Sydney cross-city tunnel was estimated to be almost 90,000 cars per day by June 2006. The actual number of cars using this tunnel was only 34,000 per day. Toll revenues were therefore much lower than predicted, leading to a bankruptcy after 16 months. Similar over optimistic predictions were made for the Lane Cove tunnel in Sydney and for Brisbane’s Clem7 tunnel and the Airport Link, which also had financial problems’.

    Governments and road builders have a direct interest in over-stating the value of toll roads and investment in roads. See link to Michiel Bliemer’s article in The Conversation below.

    http://theconversation.com/why-fewer-drivers-are-likely-to-use-westconnex-than-predicted-38286

    Re-post from 20/11/2013.

    Congestion and pollution are killing our cities. The automobile is so convenient for all of us that we put aside the enormous problems that the automobile is creating. This is not just a problem for the industrialised and wealthy western countries. It is a problem for developing countries as they upgrade from bicycles to motor cycles and then to cars.

    A constant message that we all generally endorse is that public transport, particularly trains in various forms, are the answer. But it is likely to be only a partial answer. Cities like London and Paris have excellent metros or underground public transport systems, but road congestion is still horrific and it is getting worse.

    Some hard-headed political decisions will have to be made about automobile congestion and that will involve decisions to curb the use of cars in our cities. This will not please the very powerful motoring lobby. It won’t please Tony Abbott who wants to build more roads as a major plank in upgrading infra-structure.

    One inevitable decision would be severely restrict any more new freeways… Such an approach would have to be accompanied by a congestion tax with the revenue hypothecated to public transport. With a congestion tax system the higher the level of congestion the higher the rate of tax. It would provide a clear incentive/penalty for motorists not to travel at peak times.

    I just cannot see our cities surviving without congestion taxes to limit the number of cars. With such congestion taxes, we will all be forced to make decisions whether our use of the car/van is worth it, whether for private or business purposes.

    We will also need to address other options to reduce the number of cars on the road including increased sales taxes, registration fees and the fuel excise. In almost every respect these imposts are much lower in Australia. In Denmark the sales tax on motor vehicles is 143%, in Finland 53%, the Netherlands 48% and Sweden 30%.  In Australia it is 10%

    One feature of most European cities is that their cars are much smaller than ours. That reduces both congestion and pollution. To take a local example, a Toyota Hilux 4×4 emits on average 4.6 tonnes of CO2 each year compared with a Toyota Corolla of 2.3 tonnes of CO2 each year. These larger cars not only pollute more and congest our roads, but also dominate parking facilities.

    We can’t keep putting off the debate about limiting the growth of cars in our cities. They are making city life more and more difficult and unsustainable. Public transport is only part of the solution. We have to limit cars on the road. Only in quite exceptional reasons should any more freeways be built. It is a vicious circle with more freeways encouraging more car use and really only shifting the bottlenecks.

    We need to break free from our own addiction to the car and the power of the vested interests in the motor lobby.

    We need to limit cars on the roads at peak times as well as building public metro systems. Paris and London show us that we need to do both

    When the Mayor of London directly tackled the gridlock on London’s roads many years ago he gained wide support.

  • John Menadue. Private health insurance and funding a Medicare Dental Scheme.

    In this blog I have written extensively about the damage that private health insurance (PHI) is doing in Australia. We are sleep-walking into a US style health disaster.

    If people want private health insurance, that is their right, but I see no reason why the taxpayer should subsidise a socially divisive and nationally damaging subsidy.

    The damage of PHI is increasing year on year. In my most recent blog on the subject at the time of the last annual increase in PHI premiums, I pointed out that since 1999 when John Howard introduced the subsidy on PHI, overall prices have risen by only 50% but PHI premiums have risen by over 150%.

    PHI has many damaging consequences and risks

    • It threatens our universal health system through seriously weakening the ability of Medicare as a single funder to control costs. We have seen the enormous damage that PHI has wrought in the US. We are steadily going down the same dangerous path. On present trends, we will have a divided healthcare system. One system will be for the wealthy with a safety net system for the indigent.
    • Private health insurance not only weakens Medicare, but in itself it does not have the market power to match the power of health providers who hold all the cards.
    • It favours the wealthy who can jump the public hospital queue by going to private hospitals.
    • It penalises country people who have limited access to private hospitals.
    • It has administrative costs three times higher than Medicare.
    • It has made it extremely difficult for public hospitals to retain specialists who are attracted to remuneration which is often at least three times higher in private practice and private hospitals.
    • There are government-supported trials in Queensland to extend coverage of PHI to general practice.
    • Medibank Private is pressing for PHI holders to get preference in emergency departments.

    I could go on, but I have said much of it before. We are really sleep-walking into an American style health disaster.  The future of Medicare is at stake, but the ALP which was the proud founder of Medibank/Medicare doesn’t seem to care.

    And the cost of the taxpayer subsidy which I had previously estimated at $7 billion p.a. is now approaching $10 billion p.a.  This is middle-class welfare writ large.

    Let me explain how this figure of $10 billion is calculated:

    The cost of PHI.

    Direct outlays on PHI from Budget Paper 1, 2014-15

    2013-14               $5.977 b.
    2014-15               $6.302 b.
    2015-16               $6.565 b.
    2017-18               $7.187 b.

    But there’s more! The rebate is essentially tax-free income for those who get it.  So, under the tax expenditures statement in Budget Paper 1 is the line item:

    “Exemption of the private health insurance rebate, including expense equivalent”:

    2014-15               $1.510 b.
    2015-16               $1.600 b.
    2016-17               $1.650 b.
    2017-18               $1.690 b.

    Adding these together you get:

    2014-15               $7.812 b.
    2015-16               $8.165 b.
    2016-17               $8.523 b.
    2017-18               $8.877 b.

    To this should be added the benefit of exemption from the Medicare Levy Surcharge.  That calculation, based on ATO tax tables takes some time to do and requires some assumptions to be made.  Last time I looked, quite a few years ago, it was more than $1 billion.

    We get up to about $10 billion, and that’s before looking at the inflationary effect of PHI which, if the experience of USA (and other countries) is any guide, dwarfs such budgetary expense.

    A quick back-of-the-envelope calculation using Australian Institute of Health and Welfare (AIHW) figures illustrates the point:

    In 2012-13 Australia’s total health expenditure was $147 billion.
    This was 9.7$ of GDP.
    In the USA (in 2012) it was 16.9% of GDP.
    Add another 7.2% of our GDP ($1.583 trillion in 2013-14), and
    You get an additional $114 billion.

    We are talking big money.

    It’s hard to get health ministers or health department public servants to think this way, however. The former minister, when questioned about total expenditure (government and non-government) on services within his portfolio couldn’t even give a rough answer.  I suspect the same would go for any minister. The concern of ministers is only what passes through their own budgets.  Public attention is directed from the public purpose to fiscal performance – ‘a triumph of finance over economics’.

    A MEDICARE DENTAL HEALTH SCHEME

    I am usually reluctant to propose cuts in one area of government expenditure to finance a new area. But I do believe that the future of Medicare is at stake if the expansion of taxpayer-subsidised PHI continues.

    Abolishing this $10 billion middle-class subsidy would carry risks considering the powerful PHI lobby and the associated private hospitals that are large donors to the Liberal Party, like Ramsay Healthcare. For this reason I propose that the PHI subsidy currently of $10 billion p.a. and growing should be abolished and the savings used to fund a Medicare Dental Scheme.

    Dental Costs

    I have assembled the table below from the latest AIHW data.

    Recurrent expenditure on dental services 2012-13

    Commonwealth
    Department of Veterans Affairs                  $100 m.
    Other                                                                        $843 m.
    PHI premium rebates                                     $606 m.

    Total Commonwealth                                   $1549m

    Total State                                                       $657 m.

    Total government                                                                       $2.206 b.

    Non-government
    PHI net of rebates                                          $1.396 m.
    Individuals                                                          $5.066 m.
    Other                                                                     $73 m.

    Total non-government                                                              $6.499 b.

    TOTAL expenditure                                                                                         $8.705 b.

    Those figures are a couple of years older than budget figures.  But, as a rough estimate, the Commonwealth government’s expenditure on PHI and the individual expenditure on dentistry would about balance.

    Would it result in increased demand – probably, to the extent that there is a price elasticity effect?  I doubt if there would be much by the way of “supplier induced demand” however. Unlike other health services in that regard, dentistry is different but there would need to be some constraints on public expenditure for example on cosmetic dental work.  The introduction of a dental scheme would need to be carefully phased in to take into account the availability od dentists and support facilities.

    Abolition of the $10 billion tax-payer funded subsidy to PHI would clearly be enough to fund a Medicare Dental Scheme.  To me that would make very good policy and perhaps even some political sense.

    I assume that Bill Shorten is keen to preserve the great Labor monument, Medicare. If he also wants to differentiate his health policy from that of the Coalition, the abolition of the PHI taxpayer subsidy to fund a Medicare Dental Scheme could be just what he needs.

  • John Menadue. A capability review of the Commonwealth Department of Health and Ageing (DHA)

    In this blog I have raised many times my concerns about the major shortcomings of DHA and the barrier it presents to improved  health policy and programs… We saw it most recently over the GP co-payment. I  argue that the ministerial/departmental model in health has failed and needs review…

    Since 2011 the Australian Public Service Commission ( APSC) has conducted  a series of capability reviews of Commonwealth agencies. Late last year it  released its capability review of DHA.  It highlighted many problems in the Department. These include

    • The department is ‘hierarchical and siloed’.
    • ‘The department does not have a high level strategic policy framework to support the development of coherent policies and programs …’
    • ‘The department needs to better connect sources of evidence across the organisation to support the development of a high-level whole of health system view to inform and guide the department’s advice … Policy discussions are largely constrained within work siloes.’
    • There is ‘a sense of reluctance from the department to consider new or changed policy direction … It seems likely that the department’s lack of high-level strategic policy direction is hampering policy and program agility.’
    • ‘Decision making within the department has been largely centralised at senior levels’ … ‘The department’s governance arrangements appear disconnected.’
    • ‘External stakeholders, including agencies across the APS reported they have experienced the department as increasingly insular and often outwardly defensive.’
    • ‘Some senior departmental employees noted the need to ensure that junior officers are not captured by stakeholders.’

     

    THE SUMMARY ASSESSMENT of DHA by the APSC follows

    The Commonwealth Department of Health plays an integral role in the development of health policies and the administration and delivery of health programs, to support improved Australian health outcomes.

    Over time the department’s role has changed, with functions such as sport and ageing moving in and out of the organisation through successive Machinery-of-Government changes. Nevertheless, the department’s core purpose of responding to national health trends, risks and emergencies has remained fairly consistent since it was established in 1921.

    Australia’s health delivery responsibilities are distributed between the Commonwealth, state and territory jurisdictions and the private sector. By necessity, the department regularly interacts with its state and territory counterparts, industry and the non-government sector in its pursuit of health outcomes. The significant involvement of the private sector in the health system requires a high level of commercial acumen in the department in order to understand the business drivers and market forces that influence decisions made by the private sector.

    The department operates in a complex and fluid environment, both because of its role in the health system and as an agency within the broader APS. In this context, the review team found that the department needs transformational change to develop the agility and capability required to operate strategically and contemporaneously.

    The department takes pride in its record of delivery, with 94 per cent of key performance indicators reported as met in its annual report. However, in the context of shifting roles and relationships in the federal health system, combined with a policy of smaller government, it is highly feasible in the future that the department will be less engaged in service delivery and more in health-system strategy. This will require a shift in the department’s capability profile and in the way people work together.

    In recognising the department’s capability strengths the review team also identified the following five overarching themes for capability improvement:

    • prioritise focus on organisational culture and people leadership
    • develop a high-level organisational and policy strategic capability
    • address inadequate governance arrangements and delivery frameworks
    • foster a culture that appropriately embraces and manages risks within defined tolerances
    • Lead purposeful engagement and partnership with external stakeholders.

    These themes are consistent with the almost 1500 free-form suggestions for change made by departmental employees in the 2014 APS Employee Census (the Census). These suggestions focused on the need for improved leadership and management, communication, training, skills, change and performance management.

    The following sub-sections provide further explanation of the review’s overarching findings.

    The department’s strengths

    Most employees interviewed during this review expressed deep sense of pride in, and commitment to, helping improve Australian health outcomes. They also expressed strong motivation and alignment with the department’s vision of ‘creating better health and wellbeing for all Australians’. The review team heard that the department’s high level of employee commitment has served it well in its pursuit of what has often been a voluminous policy agenda.

    The department has many highly capable employees, with deep subject matter expertise and a well-educated workforce (67 per cent of employees have university qualifications compared to 60 per cent across the APS). The department employs highly credentialed medical officers and other professionals with relevant health qualifications to help inform internal policy and program decisions. It has access to rich data repositories, is developing an Enterprise Data Warehouse and is working on a broad e-Health program which has the potential to strengthen the department’s platform for evidence-based approaches to policy development.

    Throughout the review, employees consistently noted that a central aspect of the department’s culture is its focus on delivery, especially at the tactical policy and program level. Similarly, the review team heard that employees and business areas across the department have effectively and consistently delivered on urgent work in short timeframes.

    The department is widely recognised for its ability to deliver the initiatives and reforms required of it by Government. Examples include the tobacco plain packaging strategy—an international first to reduce smoking levels—National Health and Hospital Reform, and reforms to mental health and aged care. The department has, over many years, also implemented policy ideas across a broad range of areas to improve health outcomes in Australia and internationally. These include reforms to ensure the sustainability of the Pharmaceutical Benefits Scheme, increasing private health insurance coverage rates, e-Health initiatives such as the Personally-Controlled Electronic Health Record (PCEHR), and enabling more sophisticated debate around health productivity. The department has demonstrated its ability to implement organisational change in response to external pressures such as the 2010 Strategic Review and its more recent internal changes aimed at realising improved financial efficiencies. Employee confidence in the department’s ability to manage change has also improved, up by seven percentage points from 2013, with 2014 Census data reporting that 50 per cent of employees believe senior leaders effectively lead and manage organisational change, compared to 52 per cent in like policy agencies.

    External stakeholders recognised the department’s track record of mobilising and working with public service agencies across jurisdictions and other external stakeholders to help lead the national response to domestic and international health risks and emergencies. Similar to its national efforts, the department is recognised for its positive contributions and leadership role in the international health arena.

    Until recently, the department has been led by Ms Jane Halton PSM, a respected and long-term Secretary who left to take up her appointment as Secretary of the Department of Finance before the start of this Capability Review. The review team heard that the former secretary provided clear task and policy direction for the organisation and was recognised by employees and external stakeholders for her in-depth knowledge of the health sector. Ms Halton also played an important role in her interactions with the World Health Organization, including as the chair of the World Health Assembly in her final year with the department. Ms Halton was instrumental in leading national and international health reforms and provided a strong profile and an identity for the department.

    The department needs an increased focus on organisational culture and people leadership

    The review team found that the department will need to undergo significant cultural change to develop a greater focus on people leadership and capability development.

    Throughout the review, employees described the department as strongly focused on tactical delivery and issues management with limited acknowledgement of the toll its ambitious work program had on employees. Most Senior Executive Service (SES) employees advised the review team that they work excessive hours, with many noting an average of more than 80 hours a week, substantially in excess of the reported APS Employee Census data. Executive Level (EL) 2 employees reported to the review team that they also regularly work long hours, with most volunteering that they have no desire to progress to a senior leadership position due to concerns about a further anticipated diminution of work–life balance. Evidence before the review indicated that much of this workload was attributed to inefficiency of systems and processes, duplication and rework, which all lead to significant resource and capacity waste.

    Employees and external stakeholders regularly noted that the department lacks sufficient focus on the contribution of highly skilled people to its achievements. While some individual leaders were recognised for their focus on people leadership, the review team found that the broader department has not sufficiently invested in the development of its culture, in line with high-performing organisations. Contemporary research is clear: when an organisation’s culture lacks a sufficient focus on people this can lead to a decline in productivity, negative external perceptions and the eventual devaluation of the organisation.1

    Despite the efforts of the former secretary to break down silos, most employees and stakeholders described the department as hierarchical and siloed. The review team heard a strong desire from some employees for consistent communication and greater leadership visibility. This is supported by Census data, which reported that 51 per cent of employees perceive that senior leaders are sufficiently visible, compared to 57 per cent in like policy agencies.

    The review team found strong emphasis on contributions of ‘the individual’ over collective collaboration. Employees commented that there is a lack of a sense of a united leadership ‘team’ and a lack of whole-of-organisation ownership from employees and leaders with a strong corporate versus policy–program–regulatory divide.

    The review team regularly heard evidence from employees and external stakeholders of a culture of ‘inappropriate’ behaviour in some areas, including bullying and harassment. The 2014 Census rate of 19 per cent compares with an average 15 per cent in like policy agencies. The relatively high reported rate of bullying in the Census does not correlate with the data held by the department on formal complaints about inappropriate behaviour. The department has acknowledged that this is an issue and has implemented a targeted communications campaign to encourage employees to report inappropriate behaviour and seek support.

    A number of employees reported a need for greater transparency regarding SES placements and performance pay. Many senior employees commented that they received no input into or rationale regarding their placement to a position, with many in long-term acting positions. Others advised that they had received a telephone call only days before a move with no accompanying explanation.

    APS Census data in 2014 reports on the climate of workplaces by considering the demands placed on employees and the control employees have in relation to these demands. Figure 7 plots the distribution of departments. Those in the lower right-hand quadrant represent employees experiencing the highest demand and lowest control in relation to workload. In relative terms, the department, represented in ‘red’, is a high-strain workplace. Evidence demonstrates that high demand–low control workplaces face an elevated risk of ill health among employees.

    The department needs to develop a high-level organisational and policy strategy

    The department has an ambitious, noble and compelling vision that employees aspire to achieve. But it is not clear how the department’s vision is translated through organisational strategy to inform structures, priorities, resource allocation, workforce planning and performance measurement and reporting. Organisational strategy is also needed to map how the department is going to increase its influence and where it will invest.

    The review team found that the department has a view that the Government does not welcome or value strategic policy, which contradicts the evidence provided. The department does not have a high-level strategic policy framework to support the development of coherent policies and programs that are guided by and support a single strategic intent.

    The department needs to better connect sources of evidence across the organisation to support the development of a high-level whole-of-health-system view to inform and guide the department’s advice in an increasingly contested policy environment. The department has established a Strategic Policy Unit to provide a system-wide and strategic policy capability, however policy discussions are largely constrained within work silos. The review also found limited evidence of horizon-scanning or internal discussion on whole-of-health-system policy.

    The forthcoming White Paper on the Reform of the Federation, the consequences of the Williams II High Court decision, and broader government health and economic policy decisions have the potential to change the department’s role within the Australian health system. While the department is providing input into these processes, the views expressed by external stakeholders, and by some within the department, is that greater internal consultation and connection is needed to leverage expertise and draw on policy ideas from across the department in order to provide the best advice to the Government.

    Internal and external comments to the review team also highlighted a sense of reluctance from the department to consider new or changed policy direction. While there are many examples of the department using evidence to inform policy and decisions, the review team also heard examples where new evidence did not result in a change of policy or program direction. It seems likely that the department’s lack of high-level strategic policy direction is hampering policy and program agility.

    Internal and external stakeholders described the department’s desire to maintain existing work programs, with ‘trimming around the edges’ and a limited appetite for decommissioning work. This has resulted in a lack of agility in resource allocation. The department’s current budget re-basing exercise is, in part, recognition of the need for greater flexibility in resource allocation. The review team found that greater alignment of work programs through strategy, combined with more analysis of the comparative return-on-investment in the health system, could assist the department to prioritise work activities and provide policy options to the Government.

    There is an urgent need to address inadequate governance arrangements and delivery frameworks

    Decision making within the department has been largely centralised at senior levels, with a number of senior leaders being described by employees and stakeholders as exercising a command-and-control leadership style. While this approach may be appropriate in responding to a crisis or national emergency, the review found that its application in day-to-day management has resulted in the disempowerment and poor use of its workforce, reinforced vertical silos, limited corporate ownership and potentially hampered innovation.

    The department’s governance arrangements appear disconnected, which may be a function of their design. The accountability relationship between some committees and the Executive is unclear, with some areas (such as audit and risk) assuming greater prominence on the executive-leadership agenda than others. Minutes of meetings provided to the review team indicated that the department’s People and Capability Committee has met only once in the past 12 months.

    The review team identified a number of people, system and project risks that have not been sufficiently documented through risk frameworks or identified through internal or external audits or management reports. The department needs to review its internal governance and accountability arrangements to ensure decision-making frameworks are fit-for-purpose.

    Throughout the review, employees often commented on significant inefficiencies in the department’s operations due to internal workflows, especially regarding clearance and coordination processes. The review team found that the department would benefit from streamlining internal workflows, further delegating responsibilities and ensuring that people at all levels are appropriately empowered. This shift would also help refocus SES time from detailed management to leadership and strategic matters.

    Additional financial investment is required to modernise and ensure the department’s information and communications technology (ICT) environment is secure and fit for purpose. While the department is acutely aware of the shortcomings and associated risks of its ICT systems, resolving this to an appropriate standard will likely require accelerated, concerted and sustained focus.

    The department needs to foster a culture that appropriately embraces and manages risks within agreed tolerances

    The review team regularly heard examples of risk aversion, tight control of information, micro-management, elevated decision making and an excessive focus on issues management. This approach, coupled with a reluctance from a number of employees to report potential risks or mistakes due to fear of being blamed for failures, has created ‘blind spots’ to risk exposures, disempowered people, increased residual risk and stifled innovation. Employees provided the review team with examples where red traffic lights were not placed on management reports until risks were quite advanced as they felt that bad news would not be welcomed, and they would be better off trying to mitigate risks rather than report them.

    Employees regularly commented to the review team about personal fears of making a mistake, with some commenting that the department ‘does not make mistakes’. The review team found a variable understanding of, and sophistication regarding approaches to, managing risk. This is compounded by risks being elevated or escalated to the Executive to manage.

    The department needs to engage with a broad range of risks on a daily basis. Due to the scale and complexity of its operations, it is inevitable that some risks will eventuate, regardless of mitigation efforts. Significant work is needed to change the department’s cultural appetite towards risk and acclimatise all levels of the department to embrace and engage collectively to manage risk as appropriate.

    The department should lead more purposeful engagement and partnership with external stakeholders

    The department maintains good relations with a number of external stakeholders, particularly when those relations have been managed at the most senior levels. The former secretary was highly respected by the majority of external stakeholders for her knowledge of the health system and her capacity to steer solutions to difficult issues in national and international fora. Many stakeholders also commented on the good relationships maintained with individual departmental officers at lower levels.

    However, a majority of external stakeholders, including agencies across the APS, reported they have experienced the department as increasingly insular and often outwardly defensive. Stakeholders often commented on the difficulty in interacting with the department compared to other APS policy departments which were seen as much more open, though still professional and able to manage competing interests.

    The review team heard from external stakeholders from across the broader APS, and the health portfolio and sector, that they would like to develop stronger, more collaborative relationships with the department. External stakeholders often noted that they understand the department is not always able to be open with them in a timely manner, or to cater to their views. Still, they perceive the department’s approach to consultation as excessively risk averse, narrow and at times perfunctory.

    Some senior departmental employees noted the need to ensure that junior officers are not ‘captured’ by stakeholders who can often be quite influential in their advocacy for a certain policy position. This has led to a rotation of employees or the management of relationships at senior levels in the department.

    In an increasingly contested policy environment, the department needs to ensure it adequately captures the views of stakeholder groups who often hold positions of authority and influence within the community. Incorporating a broad range of external policy perspectives into the department’s advice remains crucial to its continued position as a trusted and key policy adviser to the Government.

     

    Note that the former Secretary of DHA is now the Secretary of the Department of Finance,

     

  • John Menadue. Here we go again – more mission creep in Iraq.

    We seem unable to learn from the history of past centuries and decades as we plan to send another 300 Australian troops to Iraq to train forces fighting IS.

    To show his patriotic fervour Tony Abbott needed eight Australian flags as a backdrop for his announcement yesterday. I don’t recall seeing a Prime Minister wrapped in so many flags!

    For centuries foreigners like the Greeks, Romans and British, thought that they could subdue Iraq to their wishes. In the process, the fragile country of Iraq has been subject to imperialism, resource exploitation, despotism and religious rivalry. The most recent calamity inflicted on the long-suffering Iraqi people was at the hands of George W Bush, supported by Tony Blair and John Howard. We were told that the invasion of Iraq was to expand freedom and democracy in Iraq and free that poor country from Saddam Hussein. Not so frequently mentioned was access to the fifth largest oil deposit in the world as Rupert Murdoch told us.

    The result has been catastrophe for the Iraqi people and almost everyone except the US companies who gorged themselves on military contracts.

    In opposing IS we chose to forget that the Saudi government and wealthy Saudis, along with the wealthy in the Emirates, have been funding IS.  They did the same for Al Qaeda.

    The result of all the most recent foreign intervention has been seen most recently in Mosul where the brutal advance of IS has ended 1,600 years of Christian worship in the province.  Saddam Hussein was a monster but at least he kept the IS ‘death cult’ caged. Do George Bush and John Howard and Tony Abbott feel responsible for the consequences of earlier actions in invading Iraq?

    Have we forgotten Vietnam and all the other disastrous wars that we have got involved in at the request of the US?  Invariably these wars start with humanitarian aid, then advisers, then logistic support and all the way from there to full-scale military involvement in causes we don’t understand. In Vietnam and later in Iraq and Afghanistan our role steadily expanded with disastrous consequences for everyone concerned.

    Having withdrawn from Iraq, we are now back again. First it was humanitarian air drops. Then it was arms to elements of the Kurdish Workers’ Party in Northern Iraq, which is a proscribed terrorist organisation. Our mission creep then moved to sending 200 Special Forces to help train the Iraqi army. Then we sent 600 RAAF personnel and aircraft to operate out of the Gulf. Now we are planning to send another 300 Australian trainers. And there is probably more to come.  Prime Minister Abbott refused yesterday to rule out further military commitments. ‘I’m not going to be too prescriptive’ he said. If all that is not mission creep, I don’t know what is.

    The recent attempts to save Iraq by sending more trainers go back to 2003. Since then there have been enormous contributions of blood and money from many countries – the US, Iran, Israel, Rumania, NATO, Japan, Jordan, New Zealand, and many others including ourselves. In all, the US alone has spent between $US20 billion and $US28 billion to train the Iraqi army. But last year the Iraqi army which we thought we had trained threw its arms away and surrendered to the IS in northern Iraq. Our training of the Iraqi army has been an abject failure every step of the way. This is despite the fact that we were told ad nauseam about the enormous progress that was being made in training the army. In fact it was a failure on such a scale that it is very difficult to admit.

    At its most basic level this is a sectarian war between Shia and Sunnis. Foreign fighters make it worse.

    Foreign interests have brought disaster to the Iraqi people for centuries. The history lesson is quite clear that foreigners and particularly westerners cannot solve Iraq’s problems. We invariably make them worse. Only the Iraqis and their neighbours can solve the problem of IS.

    Our intervention over the last decade in Iraq has also made us more prone to domestic terrorism. Once again Tony Abbott won’t acknowledge the obvious that our foreign intervention is counterproductive not only in Iraq but it increases the risk of more terrorism in Australia.

    Sadly the ALP, once again allows itself to be wedged

    In The Guardian yesterday Tom Switzer a long-time supporter of Tony Abbott said ‘It pains me to say it but Abbott has learned nothing about Iraq. He’s taken the Islamic State’s bait.

    See link to article below.

    http://www.theguardian.com/commentisfree/2015/mar/03/it-pains-me-to-say-it-but-abbott-has-learned-nothing-about-iraq-hes-taken-the-islamic-states-bait

     

  • John Menadue. Health Insurance – here we go again!

    The Health Minister, Sussan Ley has just announced a 6.2% increase in private health insurance premiums.  Increases of this order happen almost every year.

    Since the Howard government introduced the rebate on private health insurance in 1999, the cost of private health insurance has increased over 150%. Overall prices have increased by less than 50% in this period.

    Because private health insurance has not got the will or ability to control prices, it is a ‘price taker’ as economists say, it underwrites large increases in health costs particularly by private specialists. That is why we are all paying more in out-of-pocket expenses. But it is even much worse than that. Private health insurance makes it more difficult for Medicare to control fees.

    The private health insurance industry receives a $7 billion p.a. subsidy from taxpayers. This subsidy is far more than the car industry ever received. This is real corporate and middle class welfare. Abolition of the subsidy and at the same time funding a Medicare dental scheme would greatly improve equity and quality of care at no extra cost to the budget.

    Abolition of the subsidy would also remove the Damocles sword that hangs over Medicare. Private health insurance has proven disastrous in the US. We must stop sleep-walking down a similar path in Australia.

    Private Healthcare Australia runs a quite dishonest campaign. Private health insurance has not taken pressure off public hospitals. By funding excessive private specialist fees, private health insurance has attracted many specialists away from public hospitals. Comparing like with like, private and public hospital costs are about the same. The administrative costs of private health insurance are three times those of Medicare.

    But subsidised private health insurance has one particular attraction. It enables wealthy people to avoid the queue for public hospital beds.

    A major beneficiary of private health insurance has been private hospitals and one hospital group in particular. That group is Ramsay Healthcare which operates 120 odd hospital and day-care surgeries in Australia and offshore. Like other supporters of private health insurance, Ramsay Healthcare seldom argues its case publicly. It knows that its case will not stand up to public scrutiny.

    Instead, Ramsay Healthcare relies on lobbying and political influence like so many other wealthy companies and people in Australia. In the last 14 years, Ramsay Healthcare and Paul Ramsay Holdings gave more than $1.8 million to the Liberal Party. Not a cent was given to the Labor Party. Paul Ramsay left an estate of over $3.4 billion recently. Before his death, he was Australia’s eleventh richest person.

    The private health insurance industry relies on lobbying and political influence and not on a publicly defensible case.

    The interests of Australian taxpayers and the Australian community would be better served if the $7 billion taxpayer subsidy was abolished and the money transferred to a Medicare dental scheme.

    The response of the ALP to the latest round of PHI premium increases shows that it has little idea of what is at stake…. Medicare

    See earlier post that I have made on this subject below:

    Two days before Christmas and to avoid scrutiny, the hard-to-notice Federal Minister for Health, Peter Dutton, announced a 6.2% increase in health insurance premiums for next year.

    We have seen the same pattern year after year with health insurance premiums increasing at well ahead of the CPI.

    The Howard Government introduced the Private Health Insurance (PHI) rebate in 1999. Since then the average health insurance premium has risen by 130% while overall prices have risen by less than 50%.

    The Chief Executive of NIB put the reason for the latest increase very bluntly. He said ‘the rise was necessary to meet the rising cost of providing health care’. But PHI is a key part of the problem of rising health care costs because PHI funds have little or no power in the market to contain costs. They are price-takers. The power to set prices in the health market is with the providers – doctors and hospitals – and only a single payer or national insurer, as in the UK or Scandinavian countries with national insurers, can and do exercise market power.

    Medicare would have more market power to control prices if it was the only single payer. But its power is eroded by the PHI companies. A clear example of this is gap insurance which the PHI funds offer. This gap insurance has underwritten the largest increase in specialist fees in Australia in the last quarter of a century.

    If Australians want to waste their money on expensive PHI that is their choice. But I see no reason for taxpayers providing an annual subsidy of $7 billion for PHI that enables the wealthy to jump the hospital queue.

    In February 10, 2013 year, I wrote about the rising cost of PHI. See repost below. I have also reposted ‘Health care and the budget deficit in the US’ which shows the enormous damage that PHI has wrought in the US.

    Repost (from February 10, 2013)

    Last week Health Minister Plibersek approved an average increase of 5.6% in private health insurance premiums from April this year. It is the same story year after year with health insurance premiums increasing at 2% to 3% ahead of the rate of inflation.

    There are two main reasons for these increases.

    The first and least important reason is that the administrative costs of private health insurance companies run at about 15% to 16% of premiums. Medicare, including the cost of tax collection, costs about 6% per year. Broadly speaking private health insurance administrative costs, including profit margin, run at about three times the administration costs of Medicare.

    The second and most important reason for the steady increases in premiums is that private health insurance funds are largely unable to control the price, quality and utilisation of services provided by doctors and hospitals. This is a problem for all insurers, both private and public, when services are provided free at the point of delivery. There is little incentive or opportunity for consumers to exercise power either over  the cost of the service or whether the service is  necessary. The power is with the provider, not the consumer. Economists call this ‘moral hazard’.

    But when a country has a single payer or a single national insurer, as in the UK or Scandinavian countries, the national insurers can and do exercise market power. That is why health services in those countries is invariably delivered efficiently and at low cost. . Private health insurance has practically no power to control prices and demand for health services. What is worse, private health insurance in Australia undermines the ability of Medicare to exercise market power.

    Evidence on the failure of private health insurance is clear. First, the standard example of private health insurance failure is the high cost and inequity of the US health service. That service provides the worst value for money of any health ‘system’ in the world. Secondly, The Economist, in an article on February 18, 2010, said ‘The biggest factor behind the cost conundrum is that insurers lack market power. Health care providers hold all the cards.’  Thirdly, our Productivity Commission said in 2005 ‘increased levels of private health insurance membership have been associated with a marked increase in the number of services performed and reimbursement for those services”.  Fourthly, in a review in 2003 of private health insurance in Australia, the OECD commented ‘Private (insurance) funds have not effectively engaged in cost controls. They seem to have limited tools and few incentives to promote cost efficient care … Private health insurance appears to have led to an overall increase in health utilisation in Australia …’

    Increases in private health insurance premiums ahead of the inflation rate are not surprising. Private health insurance is badly serving Australians and undermines the power of Medicare as a single payer.

    This is not to say that Medicare should not be improved. It is a very efficient payments vehicle. But it is much too passive. It was launched and still carries in its name, the ‘Health Insurance Commission’. If it were a proactive public health insurer, it could significantly reduce the malign influence of private health insurance in Australia.

    See also article by John Menadue and Ian McAuley ‘Private Health Insurance: high in cost and low in equity’ – reposted today below.

     

  • John Menadue. How vested interests are subverting the public interest.

    There are many key public issues that we must address. They include climate change, growing inequality, tax avoidance, budget repair, an ageing population, lifting our productivity and our treatment of asylum seekers.

    But our capacity to address these hard issues is becoming very difficult because of the ability of vested interests with their lobbying power to influence governments in a quite dis- proportionate way.

    Lobbying has grown dramatically in recent years, particularly in Canberra. It now represents a growing and serious corruption of good governance and the development of sound public policy. In referring to the so called ‘public debate’ on climate change, Professor Ross Garnaut highlighted the ‘diabolical problem’ that vested interests brought to bear on public discussion on climate change.

    These problems include:

    • There are over 900 full time independent lobbyists working in Canberra, more than 30 lobbyists for every Cabinet minister. On top of these ‘third party’ lobbyists, there are the special interests who conduct their own lobbying, such as the Australian Pharmacy Guild.
    • These lobbyists encompass a range of interests including mining, clubs, hospitals, private health funds, business and hotels that have all successfully challenged government policy and the public interest. Just think what the Minerals Council of Australia did to subvert public discussion on the Super Profits Tax and the activities of Clubs Australia to thwart gambling reform, or the polluters over an Emissions Trading Scheme and the Carbon Tax. With its lobbying power over the major parties, the hotel lobby at the State level effectively determines hotel operating hours. Violence and crime are a result.
    • With journalism under-resourced, the media depends increasingly on the propaganda and promotion put into the public arena by these vested interests The Australian Centre for Independent Journalism at UTS found in a survey of major metropolitan newspapers published in Australia in 2010 that 55 per cent of content was driven by public relations handouts from lobbyists and their associated public relations arms, and 24 per cent of the content of those metropolitan newspapers had no significant journalistic input whatsoever., relying heavily on public relations handouts.
    • The Media Council of Australia has drawn attention to how media independence is increasingly compromised by ‘advertorials’, a deliberate confusing of advertising and editorial content. The Council also drew attention to trips financed by large corporations and organisations that were not disclosed. It’s not just travel companies that do this.
    • With over 60 per cent of metropolitan newspaper circulations in Australia, News Ltd is a major obstacle to informed debate on key public issues like climate change.
    • The health ‘debate’ is really between the Minister and the Australian Medical Association, the Australian Pharmacy Guild, Medicines Australia and the Private Health Insurance companies. The debate is not with the public about health policy and strategy, it is about how the Minister and the department manage the vested interests.
    • The wealthy private schools are obstacles to needs based funding which is necessary for both equity and efficiency reasons
    • Much of the policy skills in Canberra departments has been downgraded and much of the policy work is now in the hands of young staff in ministers’ offices that are much more inclined to listen to vested interests.
    • Policy work within the government is now undertaken more in specialist organisations such as the Productivity Commission rather than in the departments. Departmental policy capability has been seriously denuded.

    What can be done?

    • Federal lobbyists have to be registered with the Department of Prime Minister and Cabinet, but this is inadequate. They should also be obliged to promptly, publicly and accurately disclose the discussions and meetings they have had with ministers, shadow ministers and senior public servants.
    • All proposals by special interest groups should be accompanied by a public interest impact statement prepared by an independent and professional body. This public impact statement would be attached to representations from the vested interest group. Many of the major private consulting firms should be excluded from this process as many of them have shown themselves to be compromised in the interests of their clients.
    • Refuse tax benefits for ‘think tanks’ like Institute of Public Affairs which are secretly funded and act as fronts for vested interests.
    • Departments such as Health which are so influenced by special interests should have different governance arrangements. The traditional minister/departmental model in Health is a happy hunting ground for vested interests that significantly influence outcomes in health. The Reserve Bank, composed of independent and professional persons, has shown the benefit of such governance arrangements in keeping vested interests at bay and promoting an informed public debate. We need such an arrangement in the health field particularly.
    • No minister or senior official should work with a vested interest group that they have been associated with for at least five years after retirement or resignation.
    • There should be increased funding to the Parliament to provide alternate public advice in key policy areas. The Parliamentary Budget Office is a good start. The current policy vacuum must be filled by independent and professional advisers. At the moment the policy vacuum is filled by special interests assisted in many cases by a compliant and under-resourced media.
    • Adequate funding of the Australian Broadcasting Commission to assert the public interest and develop good public policy is now more important than ever.
    • Major reform of election funding to stop powerful groups buying political favours.
    • A federal Independent Commission Against Corruption and in each State to examine allegations of corruption.
    • Citizen Assemblies of randomly selected people who are fully informed on key public issues to advise governments.

    Action to assert the public interest in the face of powerful vested interests is necessary on many fronts. The problem is urgent.

    This article is part of a series ‘Who speaks for and protects the public interest in Australia? published by Australia 21. Other articles in this series can be accessed by clicking on my website at the top of this page.

  • John Menadue. Mother Merkel and 800,000 refugees

    In September last year I posted an article about the Heroism of Angela Merkel in her generous response to asylum seekers arriving in Germany.

    She is holding to her course but the difficulties are increasing. The attacks on women in Cologne by men who were reported to be of Arab or North African decent on New Year’s Eve coloured attitudes. This unfortunate event and growing concern has resulted in Angela Merkel’s approval rating dropping from a high of 75% almost a year ago to 46% now.

    It was always going to be difficult and leadership in this area will always be politically fraught. It is so easy for the unscrupulous to appeal to the fear of foreigners, the outsider and the person who is different.

    The arrival of newcomers in any country is probably the greatest test of leadership.

    Ben Chifley made a courageous decision that Australia should accept large numbers of Jewish people following the disastrous events of WWII in Europe. He didn’t do any public polling or focus groups. If he had and was influenced by it, we would not have accepted Jewish refugees.

    In the 1970s, Malcolm Fraser didn’t wait for political polling to decide if we should accept refugees from Indochina. I am sure that if he had commissioned any polling, it would have told him to be careful.

    In Australia every group of new arrivals, whether migrants or refugees, has encountered opposition. but we have got through these difficulties and as a community we now look back with pride with what we have done in accepting people from Germany, the Baltic countries, Italy, Turkey, and Indochina.

    The opposition to Angela Merkel is nothing new. It will need courage and skill to see off those who resent her country helping vulnerable people.  Perhaps like Australians in receiving newcomers, the Germans will also get satisfaction out of knowing that they responded well and that not only the newcomers, but the German people were beneficiaries.

    Repost from September 2015

    With its sometimes dark history, Germany is facing a great test with the unprecedented arrival of asylum seekers .There are conflicting signs of great generosity, disappointment, anger, hope, mistrust and honesty. A great drama is being played out.

    With the support of her political opponents in the Social Democratic Party, Angela Merkel of the Conservative Christian Democratic Union is grappling with courage and determination a trial for the heart of Germany. She warned ‘If Europe fails on the question of refugees, its close connection with universal civil rights will be destroyed’. 

    In an article in Spiegel Online on 31 August, staff correspondents wrote of the ‘Dark Germany and the Bright Germany.  Which side will prevail under the strain of refugees.’

    They said

    How long will the alliance of reason hold up? … As many as 800,000 refugees and migrants may arrive in Germany this year. … and even if we don’t really know how things will develop in coming years, one thing is certain;  the numbers aren’t likely to drop appreciably … it is also certain that the newcomers will change our country. Germans have only recently become used to the idea that they live in a country of immigration and now, the next illusion is being destroyed;  that there is such a thing as controlled immigration. It isn’t just the best minds that are coming to us; it is people fleeing Assad’s barrel bombs and Islamic State brutality. They are running for their lives, whether they are illustrious or illiterate.

    The good news is that most Germans don’t have a problem with this. Sixty percent are of the opinion that the country can absorb the huge numbers of refugees currently arriving. And a new form of civility is developing, one that isn’t just being driven by pricks of conscience and the weight of the past. Rather, it is fuelled by the joy of doing good. But how long will it last?

    Mother Merkel as many refugees now call her, is showing courage and leadership, something we lack in Australia. She is finding the road rocky and hilly, but she offers great hope. She is appealing to the better angels of the German people        John Menadue

    For a full account of the Spiegel article, see link below:  http://www.spiegel.de/international/germany/spiegel-cover-story-the-new-germany-a-1050406.html

  • John Menadue. Is there intergenerational theft?

    Yes – there certainly is, but not in the ways that Tony Abbott and Joe Hockey suggest.

    In his National Press Club speech on February 2, Tony Abbott said ‘Reducing the deficit is the fair thing to do because it ends the intergenerational theft against our children and grand-children.’

    Joe Hockey has also been talking up issues of intergenerational theft in preparation for the release of the fourth Intergenerational Report (IGR).  He says we will ‘fall off our chairs’ when we see the numbers in the report. Apparently the government plans an advertising campaign to tell us how serious the problem is of our ageing population and the economic consequences.

    Joe Hockey’s rhetoric is designed to resurrect his failed sound bite about debt and deficits. Unfortunately for him, the public is not listening to his message that the budget needs to be brought into balance. We have turned off because of his and Tony Abbott’s wild exaggeration on debt and deficits, and the obvious unfairness of his 2014 budget.

    But we do have an intergenerational problem. There are several contributing factors.

    The first and by far the most important is climate change. My generation is failing to take this problem seriously. Our failures will bring major problems, even calamity for our grand-children. Global warming has major impacts – rising temperatures, changes in rainfall patterns, drier and hotter summers, more bushfires, fewer but more destructive cyclones, rising sea levels, and destruction of icons like the Great Barrier Reef. This is an intergenerational threat on an enormous scale. The Abbott government has done less than almost any government in the developed world to address the Damocles sword of climate change that is hanging over our grand-children’s future. The Abbott government has dismantled almost every program to tackle climate change.

    On the economic front the Abbott government has refused to tackle the issues that give privileges to older generations like mine.

    Superannuation tax concessions cost the taxpayer about $32 billion p.a. and rising rapidly to almost $50 billion by 2017-18. This generous middle-class welfare benefits older generations. We don’t even have to pay tax on superannuation income once we turn 60. This is intergenerational theft. The Abbott government like its predecessors is dodging the issue. Vested interests in the superannuation sector and particularly the four major banks with their large superannuation subsidiaries are doing their best to protect the wealthy and the aged.  The unfair privileges for older Australians like me are being protected.

    Older and wealthy people are putting their money into investor housing to get a tax advantage through negative gearing. The estimated tax loss of this is $7 billion p.a. Over 60% of bank loans for housing is for investor loans. Is it any surprise that first-home buyers – my grandchildren’s generation – are finding it extremely difficult to buy a house; something that my generation took for granted. A student asked the Reserve Bank Governor, Glen Stevens, at Club Central, Hurstville, ‘How am I ever going to afford a house?’.  We are engaging in intergenerational theft.

    The discount on the Capital Gains Tax is largely at the expense of younger generations

    Then there is the Abbott government’s proposal that we hear about so much from Christopher Pyne that will load up students with enormous debt in the future. Intergenerational theft!

    The Abbott government proposes to penalise the unemployed, mainly young people, by denying them unemployment benefits for a period.

    Now we learn that the government and the opposition are refusing to entertain any idea of including the home in the means test for the aged pension. Once again, the older generation like mine, will benefit, with many senior taxpayers with large and expensive mansions drawing the aged pension or aged pension concessions.

    We do have a problem with the privileges that my generation enjoys. The scales are being steadily loaded against my grand-children’s generation.

    Climate change is the most critical way in which we are refusing to acknowledge the rights of younger generations. We look like handing on to them a planet that is under serious threat.

  • John Menadue. Cover-up in the health system.

    There is an unacceptable refusal by many in the health sector to publish data and information about how services are delivered. There is a cover-up by powerful providers who don’t want transparency and exposure about the way they work.

    At the Bundaberg Hospital some years ago it was clear that surgeons had little confidence in surgeon, Jayant Patel. But they sat on their hands and did little to protect the public. It was left to nurses to blow the whistle and risk their careers.

    Judge Geoffrey Davies AO spoke of this problem in an address last October to 1,200 orthopaedic surgeons in Brisbane. The speech was reported earlier in this blog (7/12/15). It is very blunt about the performance of many orthopaedic surgeons.

    Extracts from the transcript of his speech follow:

     

    Why won’t you do something about incompetent surgeons?

    The Hon Geoffrey Davies AO

    You all know that, in your midst, there are incompetent surgeons; surgeons whom you would never recommend to your friends or family. They may have varying degrees of incompetence and for different reasons. But all are a danger. All can cause injury.

    Together you know who many of them are. But for various reasons you have done little individually and nothing collectively, to expose them or even to identify them confidentially for the purpose of retraining or limitation of practice.

    Patients are entitled to know, before they choose you for their surgery, rather than one of your competitors, not only how your fees compare with those of your competitors, but also how your success rate compares with that of your competitors; and that that latter information, in the case of much orthopaedic surgery, is recorded in your National Joint Replacement Registry.

    Why would surgeons who are otherwise honest and decent men and women and who are themselves competent, fail to speak out against what was plainly gross incompetence causing harm? The author of the Bristol Inquiry report described it as an “old boys’ culture”. But that is simply a euphemism. The true reason must surely be either a view that the reputation of your profession is more important than the health and safety of patients; or a view that the incompetence of your colleagues is none of your business. It can’t surely be a misplaced loyalty to your incompetent colleagues. It wasn’t in Bundaberg because none of the other doctors there really liked Dr Patel.

    If, individually, you don’t speak out, patients may be injured, possibly seriously.

    As you are aware, following my Inquiry, there is now a mandatory requirement that you notify the Health Ombudsman if you have a reasonable belief that another health professional has behaved in a way which constitutes a significant departure from accepted professional standards; and that such behaviour has placed the public at risk of harm. You do not appear to have responded to this obligation notwithstanding the freedom which it confers from any legal or administrative action. And the legislation invites you to notify in respect of less serious incompetence and, if you do, also offers you full protection against legal or administrative action provided your notification is made honestly.

    If, in those circumstances, you as individual surgeons will not act to protect the public from your incompetent colleagues, I have come to wonder how likely it is that your association or any other specialist association is ever likely to do so. However, as I shall point out, there are a number of ways in which it can and should do so.

    Surgeons who are the subject of multiple complaints Studies in 2006 in New Zealand and the United Kingdom both show a close correlation between complaints and preventable adverse events :

    -Two thirds of complainants had experienced adverse events; and
    -75% of those adverse events were preventable.

    And a study in 2012 of nearly 19,000 formal health care complaints against doctors, including surgeons, in Australia between 2000 and 2011 showed that two prior complaints over eleven years was a strong predictor of short term further complaints. It found that:

    – compared with doctors with one prior complaint over that period, those with two complaints had nearly double the risk of recurrence;
    – that risk increased substantially with each additional complaint.
    – and these, in turn, showed that complaint prone doctors could be identified early in their complaints trajectory.

    Together these studies show, in my view, a strong likelihood that those surgeons who have had, for example, two or more complaints within an eleven year period are incompetent.

    Evidence (also) show that incompetent surgeons are much more likely to be found among older surgeons than among surgeons in early or mid-career.

    There are three conclusions that can be reached from this evidence. The first is that the proportion of incompetent surgeons is likely to be greater in the older age group than in the mid-career group. The second is that this conclusion is not generally recognised or, at least, admitted within your profession. And the third is that there needs to be much greater scrutiny, than there is at present, of the performance of older surgeons, partly for these reasons, but partly also because there is likely to be much greater resistance, in your profession, to complaining about a once competent surgeon who is no longer so than there is about a younger incompetent surgeon.

    Individual notifications under the Legislation, like complaints by patients, can never uncover more than a small percentage of the total number of incompetent surgeons. That is why the primary responsibility for uncovering and dealing with incompetent surgeons must be upon those who can establish a system for such objective assessment.

    The view that the best way of determining competence is by assessment of actual operations appears to be rejected by you in a number of ways.

    First, you appear to ignore the fact that multiple complaints against a surgeon probably prove a pattern of incompetence.

    Secondly, you will not make participation in morbidity audits compulsory notwithstanding the overwhelming evidence of the benefit of such participation.

    Thirdly, you will not permit audits of either kind to identify and record the name of a surgeon the subject of adverse events notwithstanding the evidence that this would enable determination of a pattern of incompetence.

    And fourthly, you will not permit the NJRR to be used for this purpose notwithstanding that, as I believe, it can do so. If I am correct in that belief, I think that you have been acting improperly in failing to use it for that purpose. In saying that I appreciate that surgeons have been contributing data to the NJRR on the promise of anonymity. But that could and should have been changed before now.

    I cannot see how the imposition of a fine or suspension from practice for a period can, alone, be an appropriate remedy for incompetence. The surgeon should be retrained if that is possible. But in many cases, especially those of older surgeons, that will not be possible. In that case he must have his practice limited to exclude operations of the kind which he cannot safely perform or he must be prevented from practising. Suspension from practice, in whole or in part, is appropriate only while decisions are pending about retraining or limitation or ceasing practice.

    Why you won’t do something about incompetent surgeons?

    I regret to say that my answer to this question is not one which you will like. Yet all of the evidence that I have seen convinces me that I am right.

    What then is the answer to my question? I think that there are two.

    The first involves how you think and act individually.

    Many of you are concerned that disclosure of your own success rate or, more accurately, your failure rate might increase your risk of being sued. But realistically that is a risk for only a small minority whom you should want to see dealt with, for the health and safety of future patients.

    Many of you are also concerned that reporting another surgeon whom you believe is incompetent may rebound on you. I have said that I understand that. But that concern does not excuse you, particularly given the protection which the law now gives you.

    The second involves how you think and act collectively, as the AOA.

    Collectively you are, it seems to me, still primarily a trade union having the primary purpose of looking after the wellbeing of orthopaedic surgeons. And sadly you appear, so far, to have put that before the health and safety of patients.

    To change that you must make participation in morbidity audits compulsory for your members. You must require the recording of the names of surgeons involved in adverse events. You must use the results of these, and the results of complaints records to identify incompetent surgeons.

    And you must use the NJRR for this purpose.

    When I spoke at your annual conference in Adelaide four years ago I was still optimistic that you might, individually and collectively, do something about this serious problem. Despite your inaction since then, I remain optimistic. But time and public confidence are running out.

     

    Geoffrey Davies was a judge of the Queensland Supreme Court of Appeal for 14 years. He headed the 2005 inquiry into the Bundaberg surgeon Jayant Patel. 

    This speech was reported in The Australian on October 17, 2015.

     

     

     

  • John Menadue. Privatisation – a worn-out ideology.

    Voters are making it plain that they are not keen on privatisation. Economic research also tells us that the evidence in favour of privatisation is not conclusive.

    Conservatives claim that privately owned businesses are better managed than public ones, but I suggest that the main reason for increased productivity of businesses that are sold is not privatisation but the deregulation of the market, offered at the same time or in anticipation of privatisation.

    Essential Report in early February this year asked interviewees about their attitude to privatisation. Their responses to questions were as follows.

    • Selling off public utilities to private companies will help the economy. 25% agreed and 53% disagreed.
    • Selling government assets frees up money to reallocate to other services and infrastructure. 38% agreed and 44% disagreed.
    • Privatisation mainly benefits the corporate sector. 70% agreed and 13% disagreed.
    • Utilities like water and power supply is too important to be sold off. 72% agreed and 13% disagreed.

    As I mentioned in my blog on 4 February ‘Recent polling by Reach Tel for Stop the Selloff Campaign  reveals that 67% of people in Victoria and 74% of people in South Australia believe that they were worse off with privatised electricity networks.’

    The Swinburne Business School has studied closely the data on the effects of privatisation. It concludes that the evidence is ‘far from conclusive’ one way or another. This study was recently published in the Australian Economic Review.

    Overall I suggest that there is little evidence that privatisation has delivered improvements in living standards, but Conservatives and particularly financial advisers and underwriters who benefit from privatisation, keep spruiking about its merits.

    If we look at the big ticket privations in Australia, the story is mixed.

    Telstra was the largest privatisation but the improvements have come through increased competition and deregulation in the retail sector. If the wholesale arm of Telstra (exchanges, cables, etc.) had not been privatised – structural separation – we would be well on the way to a world class NBN. The privatisation of Telstra’s wholesale arm was an enormous mistake. We are paying dearly for it.

    Have we benefitted from the privatisation of the Commonwealth Bank? With the strong market power of the four banks today, there is little to distinguish the public contribution of the Commonwealth Bank.

    Has the privatisation of Qantas worked? The main public benefits have occurred because of market deregulation, the end of the two-airline domestic policy and increased international competition by allowing in more foreign operators. To make a political success of privatising British Airways, Maggie Thatcher fattened up BA before the sale by helping to get rid of some of BA’s competitors and by entrenching BA’s position on Atlantic routes and at Heathrow airport.

    Are we better off with the privatisation of our airports? Capital city airports are really natural monopolies with very little competition. They are able to exploit their market power by gouging consumers. Sydney Airport has been given a privileged position which will enable it to veto any effective competitor for a second Sydney airport.

    We had a clear message on privatisation from voters in both the Victorian and Queensland elections and asset sales will be a key issue in the pending NSW election.

    The NSW government is telling us that the only way to build infrastructure is to sell electricity assets. But with interest rates at record low levels it has never been cheaper than today to borrow. We don’t have a debt problem despite the shrill propaganda. Furthermore, Australian governments can borrow much more cheaply than private operators.

    The NSW government is warning that a plan by the Australian Energy Regulator to force NSW electricity networks to cut their share of household electricity prices by 30% from July 1 this year could threaten the safety and reliability of the state’s power network. What nonsense! The NSW government is opposed to this cut in prices because if it did so the profitability of the networks would be reduced and the return from the planned 49% privatisation would be significantly downgraded. The NSW government wants to fatten up the electricity utilities by denying price reductions to consumers.

    Privatisation is not a magic bullet as we have seen in so many instances. It is looking more and more like an ideological hangover. Voters are clearly not convinced.

  • John Menadue.  Climate change and the rise and demise of Tony Abbott.

    Opposition to climate change was the vehicle for Tony Abbott to rise to the leadership of the Liberal Party. It is now making a major factor in his demise as Prime Minister.

    Tony Abbott regarded climate change as ‘absolute crap’ and in December 2009 he rallied the support of the  right wing of the Liberal Party led my Nick Minchin to overthrow Malcolm Turnbull as the leader. His victory margin was one vote. Malcolm Turnbull had been negotiating with Kevin Rudd for a bipartisan commitment on an emissions trading scheme.

    But with the leadership in his grasp and with the media and climate sceptics supporting him, Tony Abbott seized on the carbon tax and did what he does best, attack.

    We have never seen such a wrecking ball campaign on such an important issue as climate change and the associated carbon tax. He was joined in his exaggerated campaign against the carbon tax and climate change by News Corp and numerous right-wing ideologues posing as serious business people.

    This campaign was highly successful and in government he attacked every arm of government associated with climate change. But the ground was slowly moving around the world as one scientific report after another confirmed the growing threat of climate change induced particularly by coal-fired electricity generation. Even though the ground was moving, Tony Abbott continued to talk about ‘king coal’ and how the world would have to rely on coal for the rest of this century.

    Then came President Obama to the G20 meeting in Brisbane in November last year. This meeting of the twenty most powerful economies in the world was hoped to be a crowning success for its Chair, Tony Abbott. But it was not to be.

    Before arrival in Brisbane, Barack Obama had announced in Beijing an historic climate change agreement with the Chinese President. But there was more to come. Barack Obama took the platform at the University of Queensland and told the world that Tony Abbott was failing on climate change. Politely and clearly President Obama affirmed the science on climate change that Tony Abbott was denying.  He said that Australia faced longer droughts and more bushfires. He added that the incredible national glory of the Great Barrier Reef was threatened. He spoke of the increased production of carbon emissions and demanded that all countries step up and do more both nationally and internationally on climate change.

    Tony Abbott had tried to keep climate change off the G20 agenda. He failed. His PR people, including Julie Bishop, did what Tony Abbott does best – attack. They attacked our principal ally the US for daring to say these things in Australia about climate change.

    Lenore Taylor in The Guardian of 13 February 2015 put it this way. ‘An authoritarian leader’s need to attack, even annihilate critics can also be devastatingly self-defeating. Tony Abbott and senior ministers were deeply angry at Barack Obama’s show-stealing climate change speech during the G20 and in true authoritarian style launched an extraordinary onslaught on an ally. They briefed multiple News Ltd columnists to that effect, including graphic accounts of how they rang up afterwards and yelled at State Department officials for failing to give a “heads up” that the president was going to “dump on” the Prime Minister. Julie Bishop said the President clearly hadn’t read a briefing on all the excellent things Australia is doing to protect the Great Barrier Reef. Andrew Robb said the President had been misinformed.’

    The denial of climate change and the campaign against a carbon tax to reduce carbon emissions was a central factor in projecting Tony Abbott into the Lodge. But now our principal ally was telling him that he was wrong. President Obama catalysed for all that Tony Abbot was not only denying the science on climate change but that he was out of step with the world.

    In the opinion polls Tony Abbott had some minor recovery in the lead up to the G20 in November last year. From then on his personal and his party’s standing have slumped dramatically.

    Many factors, including personality, have played a part in Tony Abbott’s demise, but there is no doubt that climate change which facilitated his rise is the most substantial influence in his demise.

    Climate change will be written on his epitaph.

  • John Menadue. Fairness, Opportunity and Security – Filling the policy vacuum

    I sense that there is great public concern that both the government and opposition keep playing the political and personal game at the expense of informed public discussion of important policy issues.

    We have become concerned about the trustworthiness of our political, business and media elite. Insiders and vested interests are undermining the public interest. Money is unduly influencing political decisions. There is gridlock on important issues like climate change and taxation.

    After a near death experience Tony Abbott has said the he is open to new thinking and ways of governing. ‘Good government begins today’  Time will tell. Bill Shorten has said that 2015 will be the year of ideas. I hope so.

    In this blog over the next few months I will be posting a series of articles on important policy issues. I posted a three parter on health policy on January 27, 28 and 29.

    There will be range of contributors.Some  have contributed in the past to this blog

    Each of the policy articles will be about 2000 words. They will not be “pie in the sky’ but realistic, given our political and financial constraints.

    It is planned that these policy articles will be published in a book by ATF Press in October/November this year

    Policy areas to be canvassed

    Economic policy

    Fixing the budget

    Taxation

    Federalism

    Productivity

    Job creation and participation

    Foreign policy

    Security, both military and soft power.

    Health

     Development of our human capital in the fields of education, science, research and development and innovation.

    Transport and infrastructure

    Population/migration/refugees

    Welfare priorities

    Retirement incomes

    Indigenous affairs

    Communications and the Arts

    Environment and climate change

    Inequality

    Role of government including tackling corruption and bad behaviour

    Democratic renewal – the lack of trust in government and the hollowing out of our political parties.

    Terrorism and internal security whilst protecting of our freedoms

     

  • John Menadue. The nonsense about Free Trade Agreements

    In his tormented defence of his government’s performance, Tony Abbott highlighted some of his so-called achievements.  They included the Free Trade Agreements (FTAs) with Japan, ROK and China.

    Most of the work in preparation for these agreements had been done by the Rudd and Gillard Governments, but the Abbott Government was so  politically driven to get some achievements on the board that it eagerly signed up to these three agreements.

    Andrew Robb, the Minister for Trade, described these three agreements as ‘The biggest transformational initiatives in public policy since the floating of the Australian dollar thirty years ago.’  It is hard to beat that for sheer hyperbole. I hope he doesn’t believe it!

    In several blogs over the last year, I have expressed my doubts about these types of trade agreements.

    The 2010 Report of the Productivity Commission said that it had received ‘little evidence from business to indicate that bilateral agreements to date have provided substantial commercial benefits’.  It said that while bilateral trade agreements could ‘reduce trade barriers and help meet other objectives, their potential impact is limited and other options often may be more cost-effective’. It continued that FTAs ‘lack transparency and tend to oversell the likely benefits and that pre-negotiation modelling should include realistic scenarios and be overseen by an independent body’.

    A Senate Report from the Joint Standing Committee on the FTA with Korea, chaired by a Liberal/National Party member in September last year said ‘The World Trade Organisation cautions that, although such agreements can complement the multilateral trading scheme there are a number of concerns.’ The report then elaborated on its serious concerns about trade diversion and confusing country-of-origin rules.

    The most explicit example of a failed FTA is the Australia-US Free Trade Agreement that was negotiated in great haste by the Howard Government to ingratiate itself with the Bush Administration. Shiro Armstrong, the Co-Director of the Australia/Japan Research Centre at the Crawford School of Public Policy at the ANU has pointed to the extremely disappointing results from this agreement with the US.  In the AFR on 9 February this year he said

    ‘The critics were right. Ten years after the Australia-United States Free Trade Agreement came into force, new analysis of the data shows that the agreement diverted trade away from the lowest cost sources. Australia and the United States have reduced their trade by $A68 billion with the rest of the world and are worse off than they would have been without the agreement. When the Howard Government was putting the agreement in place, there were serious concerns about whether it would distort trade and impose costs on the Australian community rather than expand and lower the cost of trade. … Enough time has now passed and there has been enough data … to update the Productivity Commission’s model estimate on the effect of the Australia-US Free Trade Agreement on trade. The agreement was responsible for reducing or diverting $US53.1 billion of trade with the rest of the world by 2012. … Trade agreements that introduce distortions and discriminatory treatment mean that winners and losers are largely determined by preferences and privileges assigned by negotiated treaties. The US agreement carries important lessons for Australia in its future trade and foreign policy strategy. Deals that are struck in haste for primarily political reasons carry risk of substantial economic damage.’

    Despite the rhetoric of the Howard Government, the FTA with the US turned out to be a real dud.  The FTA’s with Japan ROK and China will be better than the dud deal with the US but we should be very careful about the wild claims made today about new FTA’s.

     

  • John Menadue. Is the public sick of reform?

    The business sector and the media have each been asking this question. It is not surprising perhaps in view of Tony Abbott’s plummeting approval rating and the election results in Victoria, Queensland and South Australia.

    In the Australian Financial Review on 2 February 2015, Laura Tingle said ‘The biggest national question to flow from Queensland’s historic 2015 election result is not whether the Prime Minister will survive, but whether, after 30 years, voters have had enough of political rhetoric about reform and change and whether both sides of politics back away from ambitious reform as a result.’

    Perhaps election day in Queensland was ‘a disappointing day’ for the Business Council of Australia and the ‘reforms’ its rent seeking constituency would like, more privatisation.

    My contention is that the public will respond to well developed and explained policies for change. But that was not what we are being presented with. What we have been hearing about for many months is a burnt out ideological agenda from the Government and the BCA that markets are always right and that privatisation is the way of the future. Surely privatisation reached its high water mark years ago and it has been ebbing ever since.

    Queenslanders have particularly shown that asset sales are now off the agenda. Even the Liberal National Party in Queensland has now disowned asset sales.  It should have learned a lesson from former Queensland Premier, Anna Bligh, who decided that her Labor Government would sell Queensland Rail. She was defeated after a long period of Labor Governments, but the sale of Queensland Rail really soured the public attitude to her government.

    In all these cases of privatisation, there is a strong public perception that wealthy financial advisers, underwriters and brokers have drained hundreds of millions of dollars in fees at the expense of the public.

    It will be interesting to see what the NSW Premier, Mike Baird now does about his proposal to lease the state-owned transmission company Transgrid and over 50% of distribution businesses Ausgrid and Endeavour Energy for 99 years to the private sector. Recent polling by Reach Tel for Stop the Selloff Campaign reveals that 67% of people in Victoria and 74% of people in SA believe that they were worse off with privatised electricity networks.

    The question will also be asked in the NSW election in eight weeks’ time that with the interest rate at record levels, the most prudent thing to do would be to borrow rather than sell valuable assets to build new infrastructure. The 10 year bond rate is the lowest in living memory at 2.25%. We could lock in a record low interest borrowing for 10 years. With our inflation rate at about the same as the bond rate the real interest rate would be close to zero.

    At the national level Tony Abbott has not put forward well-developed and explained policies. At the last election, he had a lot of one-liners but very little developed thought on policy. Tony Abbott didn’t win the last election with his so-called ‘policies’ he won because of the shambles of the Rudd/Gillard era.

    Tony Abbott’s wrecking ball approach which was so successful in opposition is not working in government. His policies have not been carefully developed and explained. In his National Press Club speech he spent a large amount of time trying to sheet home responsibility to the Rudd and Gillard governments rather than defend his own record and explaining his vision for the future.

    The public is clearly not impressed with policies like asset sales and taxes that benefit big business and the wealthy, but leave the public the loser. That is why Joe Hockey’s budget is in ruins. It was regarded as unfair. No attempt was made to wind back the benefits of the generous superannuation concessions, concessions on the capital gains tax, negative gearing, salary packaging and the very widespread failure of wealthy companies, many of them international, to pay tax – Apple, Google, Glencorp, Westfield, News Corp and Ikea.

    I am confident that the public will respond to well-developed policies that are efficient and fair.

    Tony Abbott has never developed a credible narrative. He has not thought much beyond one-liners. He has done very little in credible reform and the bits and pieces he talks about don’t fit into a coherent story.

    Bill Shorten speaks of 2015 as being the year of ideas.  There’s a lot of policy development to do, but will he go the same way as Tony Abbott and attempt to gain office by default.

    The public is certainly sick of the type of ‘reform’ that we are being offered by the government and its friends in big business. But I am confident that the community, if treated respectfully, will respond to relevant policies that are well developed, tested, fair and properly explained. We have had very little of that in the last 18 months.

     

  • John Menadue. Stopping the boats and turn-backs at sea

    In the Saturday Paper of January 24 this year, in an article by Mike Seccombe, two refugee advocates were quoted as saying:

    ‘Things like offshore processing and TPVs, mandatory detention – these sorts of measures don’t stop the boats.  It’s turnbacks that stop the boats.  It’s when you start dragging people back to Indonesia. That’s what we saw in 2002-03. That’s what we’ve seen again now.’

    and

    ‘The one thing that stops people is sending them back.  If you look back, the way they stopped the outflow from China in 1994, it was by interdiction. The same from Haiti to the US.  Deterrent measures don’t work. Even Nauru, et cetera, by themselves, are not deterrent enough.’

    The facts tell a very different story as I pointed out in an earlier blog of 8 December 2014 “Tony Abbott did not stop the boats ‘which is reposted below. In short, that blog contended

    • It was the decision of the Rudd Government on 19 July 2013 that in future any persons coming by boat and found to be refugees would not be resettled in Australia. People arriving by boat fell dramatically from 4,145 in July 2014 to 837 in September when the change of government occurred. The number continued to fall thereafter. There are obviously lags following a government announcement but the trend after July 2013 is clear. (This downward trend was also helped by two other actions by the Rudd Government. The first was getting Indonesia to impose a visa requirement on Iranians, thereby denying them a visa transit point to Australian territory. The second was ‘enhanced screening’ of Sri Lankans that resulted in high rejection rates and fast return to Sri Lanka).
    • The effects of Operation Sovereign Borders and turn-backs of boats to Indonesia where minor by comparison. In any event OSB would have been impossible if boats had continued to arrive at 47 per month as they had in July 2013.
    • The game changer was Kevin Rudd and offshore processing and denial of resettlement in Australia and not OSB and turn backs.

    John Howard was similarly successful in stopping the boats. In 1999-2000 there were 75 boat arrivals. It fell in subsequent years to 54, 19, 0 and 3.  It worked in the short term but it was undone by two factors.

    • As the concern about long-term detention of asylum seekers in Nauru grew, the Howard Government relaxed its policy and many of the asylum seekers in Nauru were resettled in New Zealand and Australia. It became clear to people smugglers and asylum seekers that even the horrors of Nauru were acceptable if they knew that after some delay they were likely to be resettled in Australia. Andrew Metcalfe, the Secretary of the Department of Immigration and Citizenship, told the parliament that the Pacific policies of John Howard could not be repeated because asylum seekers knew that at the end of the day they were likely to be resettled in Australia or New Zealand if they were found to be refugees.
    • The Rudd Government abandoned the Pacific policies of the Howard Government and boat arrivals steadily grew. They increased from 3 in 2007-08 to 23, 117, 89, 110 and 403 by 2012-13. Asylum seekers coming by boat were confident that even if intercepted, they would eventually be settled in Australia if they were found to be refugees.

    There is a good deal that refugee advocates can do to advance the cause of asylum seekers and refugees rather than put a gloss on the facts about offshore processing and denial of resettlement in Australia.

    • Advocate a speed-up in the processing of the 30,000 asylum seekers in Australia whose status and future is still to be determined.
    • Increase the humanitarian quota to 25,000 p.a.
    • Abolish mandatory detention that punishes, does not deter and is very expensive.
    • Negotiate orderly departure arrangements with Sri Lanka and Afghanistan.

    Advocacy in these areas is likely to be more productive than continuing an argument which we as refugee advocates have lost. Offshore processing, which the Rudd Government introduced was the game changer. We may not like it but the issue of boat arrivals is really concluded for the foreseeable future. It has been decided by agreement by all the major parties.

    Refugee advocates like me have reluctantly concluded that offshore processing, coupled with denial of any resettlement in Australia did largely stop the boats. That is a fact and claiming that the turn-backs to Indonesia did the job is just not supported by the evidence.

    I concluded some time ago that offshore processing is acceptable provided it is humane, just and efficient – and supported by the UNHCR. None of that is occurring on Manus or Nauru.

     

    Repost:  Tony Abbott did not stop the boats (8 December 2014)

    The data just does not support the never-ending claims by Tony Abbott and Scott Morrison that they stopped the boats. The under-resourced and uncritical media accepts the Coalition’s line.

    I will come to the recent data, but first the evidence is clear that action by the Coalition along with the Greens in the Senate to prevent amendments to the Migration Act greatly assisted people-smugglers and boat arrivals from 2011 onwards.

    The rejection of the arrangement with Malaysia by the High Court started the rot. The High Court decision may have been sound in law, but it had powerful consequences for boat arrivals. The arrangement with Malaysia needed improvement but it did provide guarantees that Malaysia had never provided before. The UNHCR was prepared to actively cooperate. When the High Court rejected the Malaysian arrangement in August 2011, irregular maritime arrivals were running at less than 300 per month. That number increased to 1200 by May 2012, and kept on rising.

    The Labor Government attempted to amend the Migration Act to address the problems identified by the High Court but the Coalition together with the Greens blocked the amending legislation. They bashed Malaysia at every opportunity. The failure of the Malaysian arrangement sent a very clear message to people smugglers that boat arrivals would succeed. Boat arrivals were running at over 4,000 per month in July 2013.

    The action by Tony Abbott and Scott Morrison in association with the Greens triggered this dramatic increase in boat arrivals. Both Tony Abbott and Scott Morrison made it abundantly clear that they did not want to stop the boats with an arrangement such as that with Malaysia. They wanted to stop Labor stopping the boats. Their political intentions were revealed by WikiLeaks that reported that ‘a key Liberal Party strategist told the US embassy in 2009 that the more boats that come the better’. (SMH 10 December 2010). Scott Morrison became Shadow Minister for Immigration and Citizenship in December 2009.

    Action by the Coalition in the Senate triggered a large increase in boat arrivals in 2012 and into 2013.

    But did Tony Abbott and Scott Morrison really stop the boats when they came to power?

    The data shows that the downward trend in boat arrivals occurred from July 2013, two months before the Coalition came to power. See data below.

    2013 Boat people arrivals(excluding crew) Boats
    January 2013 471 10
    February 925 16
    March 2455 37
    April 3396 47
    May 3315 47
    June 2715 41
    July 4145 47
    Aug 1591 25
    September 837 15
    October 339 5
    November 207 5
    December 355 7

    Source: Department of Immigration and Border Protection, and Australian Parliamentary Library.

    What largely stopped the boats, although not completely, was the announcement by Kevin Rudd on the 19th July 2013 that in future any persons coming by boat and found to be a  refugee would not be settled in Australia. We may argue about the wisdom of that policy, but it effectively crippled the business case of the people-smugglers.

    In the data above, there are undoubtedly some leads and lags and seasonal factors, but the data shows that the Rudd announcement of 19 July 2013 dramatically cut the number of boats and people arriving by boat. The major turnaround occurred between July and August, before the Coalition came to power.

    As the Abbott Government was not sworn in until 18 September 2013, its policy on boats would also have had only marginal effect on September arrivals.

    So between July and September, people arriving by boat fell from 4,145 to 837 and the number of boats fell from 47 to 15. The trend largely continued after that time.

    Peter Hughes a former deputy secretary in the Department of Immigration and Citizenship put it this way in an article in the Canberra Times in late 2013. ‘The arrival of 546 asylum seekers in October and November 2013 represents only 14% of the number of arrivals for the corresponding months in 2012. This is a dramatic reduction … The announcement of long-term resettlement of refugees in Papua New Guinea and Nauru by the previous government has likely been decisive in changing the decision to travel to Australia on the part of those asylum seekers who have not yet handed over their money to a smuggler. ‘

    The game-changer was Kevin Rudd’s announcement of 19 July 2013 on no resettlement in Australia for boat arrivals. It is also likely that tighter visa procedures on Indonesia’s part would have helped reduce the number of boat arrivals.  In effect the Rudd Government slammed the door although the boat turn a rounds pushed the final bolt home. In other words, if there was any doubt in the minds of people smugglers and asylum seekers trying to come by boat those doubts were removed.

    The Abbott Government capitalised on a trend which the Rudd Government clearly started in July 2013.

    Tony Abbott and Scott Morrison have wrung every political advantage they could from boat arrivals. But the evidence is clear that they helped accelerate the numbers before they came to power and it was the action of the Rudd Government, before they came to power in September 2013 that put boat arrivals on a downward track

    Operation Sovereign Borders has really been quite marginal and would not have been ‘successful’ without the July 2013 decision. Navy and Customs were able to turn a few boats around. This would have been impossible if boats had continued to arrive at 47 a month as they were in July 2013. OSB has been very high profile and very expensive – and offensive to Indonesia. But OSB has not been the main game.

    The game-changer was Kevin Rudd’s announcement in July 2013.

     

  • John Menadue. Tony Abbott at the National Press Club

    In his speech today, Tony Abbott recycled many of his one-liners that we heard at the last election. Let’s examine several of them.

    First, he said that his government was a low-taxing government and that it would reduce the budget deficit by reducing spending, rather than increasing taxes. But the most recent mid-year economic forecast shows that tax receipts are increasing substantially as a result of allowing budget creep as people move into higher income tax brackets. Government receipts/taxation are projected to increase by 2% from 22.8% of GDP in 2012-13 to 24.8% in 2017-18. Further the coalition said it would reduce debt. At the end of 2013 actual net debt was $178 b. The Department of Finance tell us that at the end of 2014  the net debt was $239 b, an increase of $61 b or 35%

    Tony Abbott said that he would stop the boats. But despite being told about the success of this ‘signature policy’ and the uncritical response of the media, the facts are that Tony Abbott did not stop the boats. What started the reduction in boat arrivals  was the announcement by Kevin Rudd on 19 July 2013, two months before the last election, that any new boat arrivals would be processed offshore and if found to be refugees, would not be settled in Australia. That was the real game changer, not Operation Sovereign Borders and the turn backs of a few boats to Indonesia.The number of people arriving by boat in July 2013 was 4,145. It fell substantially to 837 by the time the Abbott Government took power. The downward trend began in July 2013, two months before Tony Abbott came to power.

    As part of a dishonest and exaggerated scare campaign, Tony Abbott said that he would abolish the carbon tax. He did. But now without a carbon tax or an emissions trading scheme, we have no credible policy in place to address the growing threat of climate change. If Malcolm Turnbull comes back as leader an emissions trading scheme will be quickly back on the agenda.

    Tony Abbott said that he would abolish the mining tax. And he did – and Australia is much worse off as a result. Giant international mining companies like Glencore are paying very little company tax at all. Is that good economic management and is it fair?

    In his press club speech, Tony Abbott said that his government was on track in the building of roads. But many of the roads he claims to be building are really recycled projects from the previous government which Anthony Albanese had announced. In any event, we don’t need more roads for the reasons I have written about in this blog. We need to invest in new public urban rail systems.

    In his press club address, Tony Abbott complained about the Senate. Certainly the Senate has refused to pass some key government budget items, but that has been because the Senate came to the view, which I generally agree with, that many of the government’s budget proposals were unfair. Furthermore, Tony Abbott now prefers that we forget that at the last election he said that he would not hesitate to take the parliament to a double-dissolution if it was necessary to tame the Senate and the ALP. We have heard nothing more about this threat if the senate continues to misbehave. The media has completely forgotten this threat or was it a promise.

    One liners may be effective in opposition and at election time but they don’t usually make for good policy.

  • John Menadue. Freedom of speech and Charlie Hebdo


    The attacks on journalists and others at Charlie Hebdo have quite rightly attracted a great deal of attention.  But Charlie Hebdo can be outrageously provocative. See below this ‘Merry Christmas’ greeting which Charlie Hebdo published in its last edition of 2014.

    It says:

    Shit in the creches
    Finish off the handicapped
    Shoot all military personnel
    Strangle the priests
    Make mincemeat of the cops
    Burn down the banks.

    hebdo
    I say no more!   John Menadue

  • John Menadue – 30th anniversary of Medicare

    John Menadue – 30th anniversary of Medicare

    This article was initially posted on 1st February last year, the 30th anniversary of Medicare. (more…)