Pearls and Irritations

John Menadue

  • John Menadue. Health Part 2 – what can we learn from overseas health services?

    Part 2 in this series was originally posted in August last year.

    In my blog of 6th October on what we can learn from overseas health systems, I drew attention and warned against government subsidised private health insurance. Any growth in this industry spells trouble for a good health service.

    Another thing that we could learn from overseas experience is that our fee for service (FFS) for GP consultation results in higher costs and inferior treatment. There are many disadvantages in FFS.

    • It drives up costs
    • It encourages ‘turnstile medicine’ whereby the GP earns more money the more patients he or she treats. It is sometimes called ‘ten minute medicine’. Follow up appointments are encouraged.
    • FFS leads to overprovision of care through over servicing. In Australia for example we see our doctor much more than patients in the UK or NZ where FFS is not practised at all or is being wound back.
    • For many patients with chronic or multiple health problems, FFS is inappropriate.
    • FFS is paid to the general practitioner in such a way that it discourages ‘team medicine’ and the use of other health professionals, particularly practice nurses, nurse practitioners and many other allied health persons, such as dieticians and physiotherapists.

    Many countries have moved away from FFS in favour of paying GPs, at least in part, on a capitation basis. Patients are enrolled in a practice and the GP is paid for ‘looking after them’. FFS may be appropriate for occasional care but it is not appropriate for long-term care of chronic patients.

    Capitation arrangements are widespread in NZ particularly for those with chronic healthcare problems. For 100 years capitation has been the principal means of paying GPs in the UK. In ‘managed care’ in the US capitation is widely used.

    A capitation scheme in Australia could not be introduced overnight but we need to scale back FFS to improve the quality of care and to discourage over-servicing and over prescribing. FFS is a perverse incentive. It rewards doctors when patients are sick. Doctors should be paid to keep people healthy.

    Another matter that we could learn from overseas is that we must find ways to overcome the split between commonwealth and state responsibilities in health. Broadly, the commonwealth funds general practice in the community and the states run public hospitals.

    This division of responsibility between hospital and non-hospital care is a major barrier to integrated and effective health care. Successful countries in health care, again like the Nordics and the UK, don’t have this split responsibility. They all have unitary systems with delegated health delivered  to local levels within a defined national policy.

    A major objective of any health service should be to keep people out of hospital. Hospital care is intrinsically more expensive and much more traumatic for patients. In his blog on August 20      Professor John Dwyer pointed out that if we had had a more effective integration of hospital and non-hospital care, we could have avoided 600,000 hospital admissions if there had been appropriate general practice care in the three weeks before hospital admission. That would be a very large saving.

    A good health service must have a strong grounding in primary care and general practice. This is one reason why the UK system is so good. In the UK they understand better than we do that hospitals should be the last and not the first resort.  Unfortunately government ministers put priority into iconic hospitals rather than primary care. We spent for too much in hospitals and not enough in primary care

    Primary and GP care provides the cheapest and best quality care and it can keep hundreds and thousands of people out of hospital. And when we have a good linkage between hospital and non hospital care, patients discharged from hospital can be effectively supported again by their local doctor.

    But because of our federal system the integration of hospital and non-hospital care is difficult. In my blog of June 3, 2014 I outlined a way to address this issue through a single funder in each state. This is fundamentally a political problem which causes difficulties in the health sector. Unfortunately commonwealth and state health ministers and their health bureaucracies seem more concerned about health territory rather than a health system that best serves our needs. The ‘blame game’  in health is unresolved.

     

  • John Menadue. Health Part 1 – what can we learn from overseas health systems?

    This article was initially posted in June last year.

    There has recently been quite a number of articles, including in The Conversation, about what we can learn from overseas health systems.

    Before looking at these international comparisons, it is worth reminding ourselves that we do have a pretty good health service in Australia. It is not as good as it should be, but Medicare has stood the test of time since 1974. It costs less than the average of all OECD countries, as a percentage of GDP. Nevertheless there are some things that we can learn from overseas experience that should guide us.

    In my view the most important thing we can learn from overseas experience is to be extremely wary of corporate welfare to the private health insurance industry. If it is allowed to grow in Australia through government subsidies it will represent a major challenge to an efficient and universal system of health care. The taxpayer subsidy to the private health insurance industry in Australia is about $5b billion per annum. That subsidy is about three times the annual subsidy which we used to pay to our automobile industry. Private health insurance is an expensive financial intermediary that does not deliver any health services.

    The evidence around the world is clear that private health insurance is both extremely costly and very unfair. At one end of the spectrum is the US which has one of the worst health systems in the world in terms of equity and value for money. It is horrendously expensive. That is due largely to the fact that the funding of so much of health care in the US depends on private health insurance.

    Americans pay about 8% of their GDP in private health insurance premiums. These premiums are really private taxes. If these premiums could be transferred to the federal government, the US would have a better health service through a single funder and it would also eliminate in one swoop the US federal deficit. See my joint blog with Ian McAuley of December 26, 2013.  The scale of these private health premiums in the US gives some idea of the cost and the political power that private health insurance brings to bear. Experience in the US shows that a multitude of private health insurers cannot control costs and they weaken the power of the public funder to do so as well.  President Obama may have expanded coverage of health care but reliance on private health insurance instead of a strong public payer, or price control, means that he will not be able to control costs.

    At the other extreme in private health insurance is the UK and the Nordics who all have strong public funders and health service and with little or no reliance on private health insurance. The result is that these countries have amongst the best health services in the world.

    The growth of private health insurance in Australia is the greatest risk we face in health… This threat should not be underestimated. The $5 billion p.a. subsidy should be abolished and transferred to a Medicare Dental scheme. This would shore up Medicare as a strong public funder for the future and expand the coverage of Medicare.

    But the signs are that the Coalition Government wants to go in the opposite direction and extend private health insurance. We know from experience in this country that the administrative cost of private health insurance are three times higher than Medicare, that private health insurance favours the wealth and , that private health insurance particularly through gap insurance  makes it more difficult for Medicare to control costs because of such policies as gap insurance. Furthermore private health insurance has not taken pressure off private hospitals.

    Private health insurance enables the wealthy to jump the hospital queue ahead of other people. The private health insurance industry is now trialling in Queensland, and is lobbying to extend its role into general practice. An inevitable outcome of that would be that privately insured patients would be able to jump the queue in seeing their general practitioner.  But there is more from these destructive private health insurers. Despite the denial by the CEO of Medibank Pte, George Savvides, the AMA insists that Savvides told an AMA dinner in March this year that he would like to see private health insurance policy holders receiving priority in admission and treatment in emergency departments of public hospitals.

    International warnings are clear. Private health insurance is a real threat to an efficient and equitable health service. Maintaining Medicare as a single funder of health services in a critical issue.

    Whether health services are delivered by the private sector or the public sector is a secondary issue. For example in Australia at the moment private medical services are overwhelmingly delivered by private doctors even though Medicare is a public funder. Health services should be delivered by people and organisations that can ensure quality and best value for money. But a single public funder is essential in my view.

    The private health insurance lobby in Australia is unremitting. It never convincingly argues its case. It relies heavily on secret lobbying. Before the 2007 election the industry made a secret deal with Kevin Rudd that a Labor Government would maintain the government subsidy for private health insurance.

    If people want to waste their money on private health insurance that is their choice. But it is extremely bad public policy for taxpayers to subsidise this pernicious industry. Warren Buffet described private health insurance as the tapeworm in the American health service.

    It is the same problem in Australia and we must resist any growth in taxpayer subsidised private health insurance that would take us closer to an American style disaster.  The corporate privileges for the inefficient and dangerous private health insurance sector must be rolled back.

    That is the most important lesson to learn from looking at overseas health services.

  • John Menadue. Murdoch, Abbott and Credlin

    In August 2013 I wrote about Rupert Murdoch’s abuse of power and his intense fascination with party politics. That blog is reproduced below.

    Rupert Murdoch is a frustrated politician. He loves the political game. Usually he works indirectly through ultra-loyal and uncritical editors and journalists. But new technology, particularly twitter, allows him to indulge his love of political intrigue more personally. The family must hope that sometime soon he will call it a day, but I think Murdoch will persevere to the end.

    I can’t recall such a blatant abuse of power as Murdoch’s call on Tony Abbott to sack Peta Credlin. ‘If [Abbott] won’t replace Peta Credlin she must do her patriotic duty and resign’. Murdoch should admit that his unprofessional and biased support of Tony Abbott at the last election was misplaced. But rather than directly state the view he clearly holds about Tony Abbott, he blames a staffer and a woman. What a gallant performance by Murdoch.

    This personal attack on Tony Abbott via his chief of staff is even more bizarre than the appointment of Prince Phillip as an Australian knight. Tony Abbott described the social media reaction to Sir Phillip’s appointment as ‘electronic graffiti’. He may think the same now about Murdoch’s social media effort.

    Murdoch wants to micro manage Tony Abbott’s office but failed in managing scores of telephone hackers in the London Sun and News of the World!

    Every politician that Murdoch supports pays a price in the end. Tony Abbott is now paying that price and his attempts to oblige Murdoch particularly with his attacks on the ABC, count for very little once Murdoch has determined that a political change is necessary.

    Perhaps Julie Bishop gave Murdoch an insightful briefing when she called on him when she called on him a few days ago in New York.

    Hopefully this latest bizarre twitter effort by Murodch will bring home to him and his family how much he has overplayed his hand. How much more will his loyalist staffers be prepared to accept?

    I have no doubt that Murdoch’s intervention will produce a quite contrary effect to what he intends. If Tony Abbott gave way to Murdoch’s demands and sacked Peta Credlin, he would make himself look quite absurd.

    Rupert Murdoch’s abuse of power (First published 7 August 2013)

    Controlling 70% of Australia’s metropolitan newspapers, one would hope that Murdoch would exercise some responsibility in the use of that power. But none of that responsibility for Rupert Murdoch!

    The Australian is the ‘intellectual’ leader of the mad-hatter’s tea party in Murdoch’s Australian media. No matter how badly the government is performing, The Australian can always make it worse. Then the Murdoch tabloids follow.

    I worked for Rupert Murdoch for seven years 1967-74 as the General Manager of his Sydney newspaper operations. Looking back on those years, what strikes me most is his convenient memory about important events. The Murdoch media played an important role in backing Whitlam in 1972. Murdoch wanted a favour in return. He raised with me his possible appointment as the Australian High Commissioner to London. He said he would put his newspapers and television interests in a trust so that there would not be a conflict of interest. He also told me that he believed that he could influence other Australian media proprietors in order to avoid flak for the new government. I put Murdoch’s request to Gough Whitlam. In  rather colourful language he said ‘no way!’.  Rupert Murdoch denies that he sought the London job. I stand by my account. (For more background see ‘Things you learn along the way’ on my website at page 113.)

    I had lunch with Rupert Murdoch in Canberra four days before the Whitlam dismissal on November 11, 1975.  He told me that he was quite certain that there would be an election before Christmas and an election specifically for the House of Representatives. I pointed out that the half-Senate election was the only possibility. He rejected my view and said that he would be staying in Australia for the election. To reassure me, as I was then the Secretary of Prime Minister and Cabinet, he said that I had no need to worry as I would be appointed in the event of a Liberal victory as the Ambassador to Japan. Malcolm Fraser had obviously told him. About 18 months later I was in Japan as Rupert had predicted. Once again, Rupert denies my account but I stand by it. (See page 157)

    What drives Murdoch is that he is really a frustrated politician. He wants to play the political game. He can’t help himself. He is a political addict. He loves the exercise of power.  He once discussed with me that he might seek to become a member of the Australian parliament. He was close to Jack McEwen who was the leader of the Country Party. I assumed he would seek Country Party pre-selection for the seat of Hume within which his country residence of Cavan near Yass was situated.

    What impertinence it is for the Murdoch media which abuses its power everywhere and hacked telephone conversations up and down the UK to tell the Australian voters in such an aggressive way how they should vote. He leads an organisation without a moral compass.

    Rupert Murdoch is not even an Australian citizen. For business advantage in the US, he gave up his Australian citizenship long ago. What role should a grumpy 80 year old American Republican billionaire play in Australian politics today?

    In the 1975 election, journalists on the Australian went on strike  over Murdoch’s election bias. I wonder if any of his courtiers now, whether executives or journalists, will make a stand for editorial independence and integrity.

  • John Menadue. Health Policy Reform: Part 3 – Principles for reform

    In Part 1 of this series I described the areas in our health sector that need reform. In Part 2 I spoke of the obstacles, particularly those imposed by vested interests in the health sector to protect their own interests by delaying or stopping reform. In this article, I will be suggesting ways in which we can overcome these obstacles to health reform. But make no mistake: it will be hard without political leadership and political will.

     

    Don’t rush the process

    The political process encourages parties seeking election or re-election to address problems with high political salience – waiting lists in public hospitals, needs among certain groups with chronic illness, and identified funding gaps. The political response is to develop specific proposals, usually involving carefully-calculated calculations of budgetary costs.

    Such a process, while providing short-term solutions to proximate problems, fails to address the structural problems identified in Part 1 – the fragmented nature of our health care arrangements, inequities, gaps in services, such as dental care, the allocation of resources towards high-cost hospital interventions at the expense of promotion, prevention and primary care, and the distortions associated with private health insurance.

    It also privileges those vested interests outlined in Part 2, who can mobilize resources to block all but the most minor reforms.

    Those pursuing reform need to go over the heads of the vested interests and find out what the community really wants, rather than paternalistically assuming that they know what’s best. In recent years the paternalistic assumption has been that the community prefers tax cuts to improved health services, even though evidence tends to point in the opposite direction.

    System-wide reform takes time. And it takes open minds. Governments need to realize that even when they can set aside their own financial or professional interests, “insiders” find it hard to imagine any significant departures from existing arrangements. That was a major shortcoming of the Rudd Government’s Health and Hospital Reform Commission. Outside perspectives are important.

    In order to lift the process beyond immediate concerns, those pursuing reforms can set out a basic set of principles, and, in a well-managed consultation process, can inform the community of options, and invite the community to discuss and agree or amend these principles. Such a path to reform contrasts with the quick-and-dirty proposals which emerge from processes such as the Abbott Government’s Commission of Audit. Rather, reform can draw on the tradition of white paper – green paper policy development and the reform process pursued by the Hawke-Keating Government. The Senate Committee system should also be utilised.

    Guiding principles

    As in any public policy the basic principle should be pursuit of efficiency and equity. Contrary to some simplistic notions, there is not necessarily a trade-off between these principles. An inefficient system is a high-cost system, and a high-cost system generally tilts the balance towards those who have most ability to pay. That is the basic failure of the United States system.

    Economic considerations should extend beyond governments’ own fiscal costs. Rather they should take into account costs and benefits throughout the community. There is no benefit in saving people $1.00 in taxes through Medicare if the result is that they have to pay $1.10 of $1.50 for the same or inferior services in private markets through PHI.

    Equity should be concerned with ensuring that income, wealth or personal influence does not give individuals preference in treatment, displacing those with greater needs but lesser means.  A related principle should be one of solidarity or social inclusion. This means that all should have access to the same high-quality services, rather than a segregated system with special services for the poor or “indigent”, to use the derogatory American term. In Australia we should resist most strongly the conservative notion that Medicare should be reduced to a safety net for the poor. The same high quality service should be available for all .While people with different means may make different payments, they should all be using the same services. The present “two tier” arrangements, where those with means are more likely to use private hospitals, violate this principle.

    Within such a shared system, there should be scope for users to exercise autonomy and choice, so long as these do not impose costs on other users. Financial incentives on providers and users should not detract from the principles of personal responsibility. Health care services need to be perceived as components of a set of policies promoting good health. In this regard, the community’s health should be seen as an asset worthy of attention in all government policies – taxation, urban design, trade agreements (patents), labour relations and wages policy, social security, environmental protection, sport etc. Public health should be of concern across all portfolios, and health ministers, state and federal, should have the same standing as treasurers.

    The government should consider alternatives to fee-for-service remuneration for primary care and other services. The New Zealand Government, for example, pays episodic care by doctors on a fee-for service basis but chronic care is paid on an annualized basis.

    Health programs should have a user focus, rather than a provider focus. The user drawing on different services should not have to confront multiple institutions with their own funding arrangements, records and protocols of care. Policies should aim to integrate and not merely coordinate medical services, pharmaceutical care, hospital care and rehabilitation. Such flexibility should be guided by the principle of subsidiarity. That is, services should be managed at the most feasible local level, provided such autonomy does not conflict with needs for central standards in important areas.

    Funding needs to be based on a judicious balance between individual (“out-of-pocket”) payments and pooled payments. While a lack of means should never present a barrier to those who need care, there is no reason why those with means should not make personal contributions.

    The balance between individual and collective funding is one which needs community consultation. There are arguments for a completely free, tax-funded system, and there are arguments for more individual payments where price signals play a role, but the choice needs to be put to the community in a way that explains the costs and the benefits of each method of payment. Most probably the community, presented with an informed choice, will opt for some balance.

    For that proportion of costs the community chooses to share, this sharing should be through a single national insurer, with the capacity to use its purchasing power to keep costs under control, and guided by principles of ensuring access for those with limited means and covering all against high expenses. As with other high-cost and heavily-subsidised industries, such as clothing and footwear, the $7b plus per annum subsidy to PHI should be steadily phased out. If people wand private health insurance that is their right but there is no reason for the taxpayer to provide a subsidy.

    While the government should take responsibility for pooled funding, provision of health services should allow for both government and private involvement. In regulated markets private providers should be assured of reasonable returns on their investments (including their investment in human capital), but they should not be permitted to take advantage of any privileged position in the market. Public policies should recognize that commercial incentives which are about expanding markets and good public policy which is often about encouraging personal responsibility and reducing dependence on health services do not always align.

    All systems of remuneration, to private or public providers, should be subject to full accountability, and all services should be subject to the general principles of competition policy but without promoting competition where it serves no public purpose, such as a proliferation of look-alike high-cost private insurers. Accounting systems should expose all instances of cost-shifting – from Commonwealth to state governments, from governments to individuals, and from present outlays to future outlays. While there may be reasons for costs to be reallocated between different parties, such reallocations should be for reasons of equity or efficiency, and not for budgetary impression management.

    All health care services should be subject to professional governance and accountability, with clear charters of responsibility but at arm’s length from executive government. We really don’t know much about how doctors perform in private practise. We hear about occasional mal practise but very little about general performance and competence.

    The related issue of Commonwealth-state relations needs resolution. There are many possible paths to reform. One possibility for consideration is for health services to be administered by joint Commonwealth-state commissions in each state, with pooled Commonwealth and state funding. Tasmania with its small and comparatively aged population could provide the basis for a trial.  See link to ‘The Blame Game in Health’ that I posted on 3 June last year  https://publish.pearlsandirritations.com/blog/?p=1756/.

    The role of institutions

    Health reform is too important to be left to health departments particularly the Commonwealth Department of Health and Ageing and bodies with superficial mandates such as the recent Commission of Audit.

    Fortunately the Commonwealth has bodies such as the Productivity Commission, an organisation with not only technical expertise to analyse policy proposals, but also with the capacity to sound out those with policy interests. It gives all a forum to voice their concerns, to tease out likely unintended consequences of policy proposals, and to direct corporate interests to contribute to problem-solving and policy design rather than to defending their vested interests. Most important, it can bring an “outside” view to public policy, addressing questions and options that may be beyond the imagination of “insiders”.

    While the Productivity Commission can bring forth practical recommendations, the questions in health reform are so basic, however, that they require a wider and more inclusive process before specific issues can be addressed. Questions such as how costs are shared, and how scarce resources should be allocated, particularly for high-cost interventions with minor benefits, involve basic moral considerations.

    One possibility is to establish a Health Reform Commission composed of independent and professional people to inform and lead public discussion and advise on important health reform issues. Clinicians should be included, but not the AMA or any of the vested interests. The Law Reform Commission established by the Whitlam Government in 1975 is an example of how enquiries and consultations can be conducted with the community in order to make recommendations to government that are well-informed. The Law Reform Commission estimates that over 85% of its reports have been either substantially or partially implemented making it an effective and influential agent for reform. The Reserve Bank is another example of how a respected, professional and independent body can be a leader in public discussion of important issues. A major objective of a Health Reform Commission would be to outflank the vested interests and carry an informed discussion with the community, particularly of the key principles that should drive health care. Ahead of establishing such a commission in government it would be useful to establish an interim group of professional and independent people who can facilitate informed public discussion and provide advice.

    There are various ways to deal with public participation but the basic approach and method is that communities should be consulted to find what they want, and in successive rounds experts should analyse and report back on the costs and consequences of their proposals. For example, explaining that a completely free system would involve higher taxes and may involve greater waiting times.

    One other model is the “citizen jury” – so named because the citizens to be consulted are selected on a random basis, and are informed by professional and independent experts. They could be asked to provide their advice back to government on such key issues as: to what extent do we want to share the costs of healthcare; how co-payments should be reformed; how to overcome the commonwealth state blame game; how the workforce should be reformed.  End of life issues could also be canvassed as well as many expensive interventions that have limited effectiveness. These citizens’ juries in health could be important vehicles for a national conversation on health, a conversation that we do not have at present.

    I see parts 1,2and 3 on Health Policy Reform as outlined as, hopefully, a means to put the debate on health reform onto a more constructive and pragmatic path. Unless we get our processes working more effectively and particularly how to bypass vested interests, reform will continue to be very difficult. When we improve our processes we can be more confident of addressing the particular policy issues outlined in these three papers.

    Unless we address the issue of power and how and who exercises that power in the health sector we will not achieve worthwhile reform. Power is in the hands of providers. It is not in the hands of the public or governments. That is the key issue. We need leadership, institutions and processes to focus on how we overcome this central issue.

  • John Menadue. Health Policy Reform: Part 2 – Why reform is difficult. Health ministers are in office but not in power.

    In Part 1 on health policy reform I outlined the main areas where health reform is necessary. In Part 2 I examine the reasons why I think health reform is so hard. In part 3 I will consider ways in which the necessary path of health reform can be quickened.

    There is a major barrier to health reform. It is the power of providers or at least their assumed power. When I was asked by the National Hospital and Health Reform Commission to describe in a sentence or even one word the obstacles to health reform I said ‘power’, the power of providers. I don’t the Commission got what I was driving at!

    A succession of Australian health ministers may have been in office but they have not been in power. Aneurin Bevan who launched in the 1940’s in my view the best health service in the world knew a few things about health but more importantly he knew much more about political power and how to exercise it in the public interest. He drew on the strong support of the community, a minority of doctors and the majority of nurses. He won the day and not surprisingly the UK National Health Service was the centre piece at the London Olympic opening ceremony in 2012.

    The previous Australian health minister said we needed a conversation on health. The new minister says she will consult widely after the fiasco on co-payments. But if past practise repeats itself the conversation and consultation will be limited to the AMA and the Pharmacy Guild.

    The difficulties of sensible reform are obvious in the health field but they are a generic problem in public policy today. It has been most obvious in climate change policy where Ross Gaunaut has described the power of vested interests as a ‘diabolical problem’.

    The power of insiders – or the faintheartedness of politicians

    Reform disrupts established arrangements. In general, the longer those arrangements have persisted, the greater becomes the pent-up need for reform, meaning that reform is going to be disruptive to existing interests. By the same token, as arrangements become more entrenched, the more do those who benefit from them feel threatened, and the more political clout they develop to resist reform.

    That resistance is often based on financial self-interest, but it also aligns with a general fear of change and professional conservatism. It is difficult for those who are “inside” a system – be they administrators, professionals or policymakers – to conceive of other ways of delivering services.  Institutional inertia is a strong force. And in health care it is easy to lose sight of the fact that delivering services is not, in itself, the objective. That objective surely is serving the community by helping to keep the population healthy.

    One group with a stake in current arrangements are those who administer health services. Health is a highly technical, large and complex field that is difficult for outsiders to come to grips with. This gives disproportionate power to health administrators on the inside.

    “Joined at the hip” with these administrators are much the same vested interests (rent seekers) that batten on the health service and dominate the public debate. These are much the same vested interests who so selfishly and ferociously led the opposition to Medibank in 1975. They are still with us today but in a different guise. The AMA has a long and dubious history in opposing key health reforms going back to its opposition to the Pharmaceutical Benefits Scheme In 1942.

    These vested interests include the Australian Medical Association (AMA), the Australian Pharmacy Guild, the private health insurance funds, Medicines Australia and the state and territory health department bureaucracies. In addition, there is a general “pro-business” push to open up all aspects of health care more to the private sector, particularly pathology and radiology.

    The AMA in its role as a medico- political organisation opposes reform of the fee for service (FFS) system of remuneration. FFS is an administratively convenient means of remuneration, but it carries perverse incentives because it rewards over-servicing, over-referring and over-prescribing. It is particularly inappropriate for care of the chronically ill.

    Even among the most dedicated professionals, financial incentives influence behaviour, and tend to reinforce professionals’ desire to apply their skills to problems – rather than encouraging people to become less dependent on health services.

    Where possible, financial incentives should encourage practitioners to keep people healthy, rather than to deliver services to the sick. There is no “one-size-fits-all” method of remuneration – FFS has its place, but it should stand alongside other systems, such as capitation and salaried payments.

    The perverse incentives in FFS come to play particularly strongly when health care takes on a corporate structure, where business objectives such as return on shareholders’ funds displace professional service objectives traditionally associated with medical practices. Businesses operate on the basis of expanding their markets, not on the basis of telling customers they may be over-using their services. The AMA, however, is turning a blind eye to the growing corporate takeover of general practise and the associated vertical integration into radiology and pathology.

    Excuse me for dropping names but in a round table I attended with Margaret Thatcher in the late 1980s she was asked, “Now that you have fixed the restrictive work practices of the miners and the printers, what are you going to do about the restrictive work practices of the doctors? She replied that she would leave it to her last term. She never got around to it.” And so far neither have we.

    The Pharmacy Guild strongly defends the privileged position pharmacists have gained through political influence. On the one hand the Guild strongly defends the many restrictions on competition enjoyed by pharmacists – prohibition on pharmacies in supermarkets, prohibition on price advertising, restrictions on location of pharmacies and exclusive rights to sell many non-prescription medications. On the other hand it does nothing to encourage integration of pharmacy with general practice. Thus there persists the anachronistic practice of a separation of pharmaceutical from medical services.

    It is not only in retail pharmacy that Australians are overpaying. Governments are also generous with taxpayers’ money for the mainly foreign pharmaceutical firms who are able to exploit their power in patents. Medicines Australia, the body representing manufacturers and distributors of drugs, has successfully lobbied the Commonwealth to pay high prices for prescription pharmaceuticals. Twenty years ago Australia stood out as a world leader in using government purchasing power to keep pharmaceutical prices under control. Now Australia pays top prices: for example, Australians pay $2 billion per annum more than New Zealanders pay for equivalent drugs.

    The private health insurance companies are expensive financial intermediaries, receiving a $7b annual taxpayer subsidy through the rebate, and additional support in the form of the Medicare Levy Surcharge, which subsidises those with high incomes to hold PHI. Not even at the height of manufacturing industry protection were people actually given cash subsidies to buy Holdens and Falcons.

    Private insurers don’t deliver any health services; they are simply high-cost financial intermediaries taking commissions. As I outlined in Part 1, PHI benefits the wealthy and most importantly weakens the power of Medicare to control prices. Gap insurance through PHI has underwritten an enormous increase in specialist fees. Now the private insurers are edging their way into general practice. The Managing Director of Medibank Private also reportedly told doctors that private health insurance policy holders should have priority in public emergency departments. What an outrageous proposal.

    Government subsidized private insurance is a major threat to health care in Australia. At first sight it may appear to relieve public budgets and to take pressure off public hospitals, but that’s not the way it plays out. It actually sucks resources out of the public hospitals. The remeration of most specialists in private hospitals are multiples of the remuneration of specialists in public hospitals. And as PHI pushes up costs, governments, still left with funding a large part of health services, find that they become passive players, accepting prices set by private service providers and insurers. As a result, In the United States the government’s partial programs – Medicare and Medicaid – now cost more as a proportion of GDP than do completely publicly-funded insurance systems in the United Kingdom and many other European countries. The cause of this problem in the US is PHI.

    Yet, in spite of this economic danger, and the example of the clearly dysfunctional American system, governments in this country – Coalition and Labor – have been reluctant to take on the PHI industry. Before the 2007 election Kevin Rudd wrote to the industry assuring it that their taxpayer subsidies would continue.

    In an economy where many traditional industries, from manufacturing through to print media, are facing huge competitive pressure and disruption, health care is seen as one last remaining growth sector, offering easy picking for business – if only the government would get out of the way.

    Those are the private interests. We also have eight state and territory health department bureaucracies supported by their ministers. In a nation where state governments feel that more and more financial and political power is accruing to the Commonwealth, it is natural that they defend their shrinking turf. Such considerations override any concern to see an integrated national system. In response, the Commonwealth is reluctant to stare down the parochialism of the states.

    Reform is possible

    Australian governments have a strong record on economic reform. In the 1980s the Hawke-Keating Government took on vested interests, and negotiated a wide-ranging set of reforms in the manufacturing, transport and financial services industries. Earlier, in the mid-1970s, the Whitlam Government, when it introduced Medibank, successfully stared down the AMA and the health insurers. Although the Fraser Government unwound many of these reforms, the Hawke Government successfully resurrected universal public insurance in the form of Medicare.

    But there has been no significant reform of the health sector since then. In 1977 the Productivity Commission recommended a comprehensive inquiry into health financing, but no government has initiated such an inquiry. Corporate interests have become more involved in health care, and PHI has become established once again.

    Governments generally over-estimate the power of lobby groups. They can make a lot of noise – particularly when, as a result of successful rent-seeking in the past, they have accumulated large funds to spend on scare campaigns at the public’s expense, but the capacity to make noise does not equate to a capacity to influence voters. Opinion polls consistently show that the public believe Coalition governments are too much influenced by big business, which means reforming governments should be able to gain electoral advantage from standing up to rent-seekers.

    The problem is not just about financial self-interest, however. It is also about the inertia of established practices, and an incapacity of those on the “inside” to imagine any significant variation on current arrangements. Practices such as the separation of pharmacies from medical services, fee-for-service funding, the dependence of private hospitals on private insurance, the separation of medical from hospital services in private hospitals, and so on, have become entrenched in the thinking of policymakers, politicians and many journalists. There is a deficit of imagination, an incapacity to think beyond the present.

    A large part of the problem lies in the Commonwealth bureaucracy. Commonwealth Ministers for Health are very dependent on the Department of Health and Ageing, particularly, as is often the case, when ministers are not across the issues and don’t have a clear policy program themselves. Aneurin Bevan showed how important political leadership is.

    The Department is ill-equipped to cope with policy reform. Rather, its objective seems to be to keep the peace with provider lobbies, and to keep the minister out of any public brawl or argument.

    The Department is structured in ways that reflects the interests of providers such as doctors and pharmacists, rather than on the basis of community interests, such as acute care, chronic care or demography. It has expertise in administering existing programs but it has little economic expertise. Fiscal concerns tend to crowd out any consideration of economics.  One very senior Commonwealth official said to me that the Department does not have any strategic sense in health policy.

    In fact the Department doesn’t even effectively integrate the Commonwealth’s own major programs, let alone make any real progress in bridging the Commonwealth and state divide. During the difficult negotiations with the states on health reform during the Rudd Government period, the Department of Prime Minister and Cabinet effectively had to step in because DHA was not up to the job. Even the task or rolling out e-health, a minor but important reform, proved to be a difficult one for the Department. DHA sees Medicare as a funding vehicle and not a policy instrument. Medicare is, in fact, is not even within DHA. Health policy is an after-thought and health reform is right off the agenda.

    The Ministerial/Departmental model in health has failed. It is incapable of contesting the power of the rent seekers. The community is effectively excluded.

    Unless the health debate is taken to “outsiders”, away from the insiders – the rent seekers and vested interests– we are unlikely to see significant progress in health reform. The vested interests invariably win out over the public interest, time and time again.

    Political struggles between the public and rent-seekers are not uncommon, but there are reasons why in health care the public interest has a hard time securing a voice. Most of the public most of the time have little contact with health services. The intense users tend to be the chronically ill (who are reasonably active but do not constitute a majority) and those who are nearing the end of their lives and are not in a position to exert political influence. It is unlike services we all experience such as education or transport, where strong public lobby groups naturally arise. Also, health lobby groups are able to exploit the public’s trust in health care provider’s services – a trust which is well-justified on the grounds of professional competence, but which should not logically extend to trust on financial or political matters.

    The media stories tend to be about failures – often in public hospitals because they handle the most difficult cases – and about corporate activities. Press releases from pharmaceutical firms, health insurers and other rent-seekers provide easy material for under-resourced journalists. It is easy for governments and so-called “business interests” to raise scare campaigns about the affordability of government health services. They don’t mention that when those services are privatized they are generally more expensive), but it is very hard to engender a debate about health policy. The superficial slanging match about the Commonwealth’s GP co-payments is illustrative of the paucity of the public “debate”.

     

    In Part 3 I will address governance and issues of process which are necessary to break through the inertia and counter the power of the vested interests that batten on the health system.

     

  • John Menadue. Health Policy Reform: Part 1 – Why reform is needed.

    I will be posting three articles on health policy.

    This article outlines the priority areas where reform is necessary.

    Part 2 will explain why reform is so difficult but not impossible. The key issue is power and how it is exercised

    Part 3 will be about processes and governance issues that are necessary to move us beyond the present inertia, incrementalism and tinkering, with suggestions for policy directions. I will not be proposing specific policies. 

    The Rudd-Gillard Government – lost opportunities

    Traditionally, in Australia and elsewhere, Labor and similar governments have been the initiators of health reform. Conservative governments, in general, have opposed or wound back health reform.

    In Australia the Labor Party, guided by principles of universalism, equity and economic efficiency, gave us publicly-funded health insurance – initially through Medibank and then through Medicare.

    In spite of high expectations in health reform, however, in its 2007-2013 period in government Labor really did little more than muddle through. Kevin Rudd promised to take over state hospitals if the states continued to stonewall, and polling suggested that the public agreed with his approach. But in the end he gave way: fragmentation of services between the Commonwealth and the states continued, as did the practices of cost and responsibility shifting between those two tiers of government. He focussed on hospitals and not on primary care.

    The Rudd Government established a National Hospital and Health Reform Commission (NHHRC), but it was composed largely of health insiders who seemed to be incapable of seeing health policy from a broad perspective, and who failed to grasp the basic economics of health care. The process achieved very little and chewed up a great deal of time and money. It was a wasted opportunity.

    To its credit the Rudd and Gillard Governments had one major policy achievement – plain-packaging of cigarettes, and before it lost office was making progress on other aspects of public health. The success of these public health reforms, in contrast with the minor achievements of health care programs, is consistent with the possibility that reform of these programs is impeded by institutional inertia and the power of rent-seekers, a point taken up in Part 2. The tobacco industry is well-heeled, but it does not have friends in health departments.

    Case mix funding to improve hospital efficiency was also a useful reform

    Indigenous, mental and rural health all remain in a parlous state. Health programs operate in isolation from one another. The funding of health care through multiple public, corporate and private channels results in serious inequities. And, in general, there are administrative inefficiencies and a poor allocation of scarce resources.

    Since 2013 the situation has worsened. The Abbott Government has abolished the Australian National Preventive Health Agency and Medicare Locals, has foreshadowed deep cuts in funding for state hospitals, and has put up ill-considered proposals for GP co-payments.

    Getting the most from what we have

    In considering health reform, we need to start with an appreciation that we have one of the best health services in the world in both efficiency and equity, thanks to Medicare. But Medicare was established over 40 years ago. It is now a bits and pieces operation – some parts added in good times and with cut-backs in difficult times. Some additions have been made by Labor governments and some by anti-Labor governments. There is little coherence or consistency in what we have at the moment. Our health care arrangements could not be called a ‘system’. They have no clear and underlying principles or philosophy.

    As a result of that lack of coherence and fragmentation there is waste in our health care arrangements. Nurses, doctors, paramedics and others are all working hard and professionally, but there are managerial inefficiencies and high bureaucratic costs in both the private and public sectors: I have estimated that reforms would result in a saving of at least ten per cent of our health bill or about $15b in today’s costs. Abolition of the taxpayer subsidy of over $7b per annum to private health insurance would represent about half of these savings.

    But a big waste is in misallocation of scarce resources. Capacity to pay often overrides consideration of therapeutic needs. Governments seek savings in public health and primary care – savings which are more than offset by higher needs for hospitalization and high cost specialist care. Demarcation rigidities result in overwork for some and under-utilisation of skills for others such as nurses. In all, the whole is far less than the sum of its parts.

    Seldom do we stand back and ask the central issue: what do we need and expect from a health system? That question should be a starting point for reform.

    The concerns of health policy – a system approach

    Incremental reforms addressing real or perceived shortcomings in particular programs, even if they achieve some economies, are going to do no more than to perpetuate existing problems. Reform needs to cut across programs, and concerned with the following six issues.

     

    1. Primary care. Primary care has been largely ignored in health reform. It should be the starting point for any consideration however of preventive health and chronic care. Early interventions and health check-ups can head off costly and debilitating illnesses.

    Specialist care has become very expensive. We have an obsession with hospitals. But hospitals should be the last resort rather than the first. Countries such as the United Kingdom and New Zealand have high quality care in part because of the philosophy underlying their systems, but also because those systems are grounded in primary care, which is the most efficient and equitable way to deliver health services for all regardless of income. It is where care is best integrated.

    Fee for service (FFS) remuneration in primary care has encouraged “turnstile medicine”, excessive treatment and increasingly the corporatisation of general practice.  FFS is a major barrier to reform in primary care. FFS may be appropriate for episodic or occasional care for walk-in patients but it is not appropriate for chronic and long term care, particularly mental and indigenous health care. Our governments have failed in this key area.

    A major barrier of course to improved health services through primary care is that the Commonwealth funds GPs and other medical services, other than those in public hospitals, while the states operate public hospitals. There are substantial savings in keeping patients out of hospitals but with different funding steams there are few incentives to do so. In fact, when the Commonwealth is more concerned with its fiscal balance than with sound economics, it has every temptation to skimp on primary care, essentially imposing higher costs on the states and poorer health outcomes on the community. The Commonwealth’s fiscal obsession has outweighed any sense of economic responsibility

    2. Workforce. Health is the largest and fastest growing sector of the Australian economy. Its structure and workforce are riddled with 19th Century demarcations and restrictive work practices. For example there are several hundred nurse practitioners in Australia when there should be thousands, performing routine functions such as administering regular vaccinations. About 10 per cent of normal births in Australia are delivered by midwives: in New Zealand that figure is over 90 per cent.

    We don’t have a shortage of doctors so much as a misallocation of doctors. Nurses, allied health workers and ambulance staff are denied opportunities to upgrade and realise their professional potential and improve services.

    Pharmacies should be providing more basic health services for the community and should be active partners with doctors in the front line. Pharmacists are the most underutilised and highly-qualified professionals in our health sector. They need to be integrated into primary health care.

    There will never be adequate delivery of service to people, particularly the aged, without radical workforce reform, mainly within primary care. As Minister for Health, Nicola Roxon enabled some nurse practitioners and midwives to access the Medical Benefit Scheme but the access was quite minor. The MBS can be the lever for major workforce renewal.

    It is quite remarkable that we have endless talk about the need for workforce reform everywhere but in the health sector. Surely governments could not be frightened of the AMA! In our modern economy the restrictive work practices and demarcations in the health sector are a disgrace.

     

    3. Program structures. Health services are structured and funded around providers – medical services by doctors, pharmaceuticals through big Pharma and the Pharmacy Guild, and hospitals through state governments and private agencies. The structure of the Department of Health and Ageing reflects this provider focus rather than a focus on consumers.

    Such a provider-based structure, rather than a user- or customer-based structure, is reminiscent of corporate structures abandoned in the private sector a half-century ago, and is inconsistent with the “outcomes” focus of public sector reforms of the 1980s. Yet it survives in the health sector with the only institutional recognition of consumers is through the Health Consumers Forum of Australia, a body funded by the Commonwealth and which seems more like a marketing arm of the Department of Health and Ageing than a group representative of consumer interests.

    We need to progressively change the focus of health programs to serve the community rather than providers. One possible structure would be around types of users – acute, chronic and occasional. It would help reduce the competition between different provider areas for limited resources. The Department of Health and Ageing shows no serious interest in consumers but together with the Minister always seems to have an open door for the rent seekers such as the Pharmacy Guild.

     

    4. Funding. Funding of health services is a mess, resulting in serious inequities, high administrative costs, and misallocation of scarce resources. Some services, financed either through private health insurance or Medicare, are free at the point of delivery, while others can leave consumers with massive out-of-pocket expenses.

    We have some of the highest co-payments in the developed world but they lack rhyme or reason. They are a “dog’s breakfast” with the level of government subsidies varying enormously. Some co-payment arrangements work on a safety-net basis, while others, such as for psychologists, leave the consumer bearing open-ended risks. The Abbott Government’s “reforms”, if implemented, would make the situation worse. Medical and pharmaceutical co-payments have little in common, and dental services are much more poorly funded than medical services. The safety nets are unfair and lead to abuse.

    Persons on high incomes should pay more for health services through efficient and defensible co-payments. A “universal” service does not necessarily mean it should be free. Subject to a means test, there needs to be more discipline by consumers in their use of health services. Jennifer Doggett at the Centre for Policy Development has proposed workable means-tested reforms in this area with a Health Credit Card. See http://cpd.org.au/2009/07/out-of-pocket-rethinking-health-copayments/ There is no sign the Commonwealth is concerned about the problem however, even though most other countries have better models to emulate. The Nordic countries, for example, insist on a single public funder and universality but with efficient and equitable co-payments.

    The other great funding distortion in Australian health care arrangements is private health insurance (PHI) – essentially a high-cost mechanism which allows some, particularly those with high incomes, to jump the queue for health services, thus worsening waiting times in public hospitals and diverting resources to private hospitals, contrary to the claim that it takes pressure off public hospitals.  It penalises country people because there are few private hospitals in the bush. Australia’s arrangements also mean that private and public hospitals operate on different funding streams and with little integration of services.

    The government, through means testing rebates for PHI, has removed some inequities, but PHI remains a costly and inequitable way to do what the tax system and Medicare do much better. Also, PHI is administratively inefficient with bureaucratic costs about three times higher than Medicare.

    Private gap insurance promoted by PHI has facilitated enormous increases in specialist fees. Most importantly, the expansion of PHI progressively weakens the ability of Medicare to control costs. The evidence world-wide is clear that countries with significant PHI have high costs without any better health outcomes.

    The stand-out example of PHI causing high costs and poor outcomes is the United States.  President Obama may have substantially achieved universal coverage, but PHI with its lack of cost control will ultimately cripple and finally destroy his reforms. Warren Buffett has described PHI companies as the “tape worm” in the US health sector.

    The Commonwealth already has a sound model of a single payer operated through the Department of Veterans Affairs – a model which retains the strong control of a single payer accountable to the community whilst allowing private practise involvement in service delivery.

    The Commonwealth has failed to understand the damage that PHI is already doing in Australia. PHI is a Damocles sword hanging over Medicare. We must assert the key importance of a single public funder.

    It is interesting to note that the $7b plus per annum taxpayer subsidy to PHI is more than would be required to fund a Medicare dental scheme!

     

    5. Defining Medicare. This great Labor monument needs a review. Medicare has become a passive but efficient funding mechanism, providing a partial subsidy for certain health expenses, rather than the public insurer it was intended to be. After all, it is still called the “health insurance commission”, but it is nothing of the sort, and it is not even within the health portfolio.

    Medicare has a remarkable database which should be used to highlight and inform policy concerning over and underutilisation of services across the country. Why for example do rates of caesarean section vary enormously across the country and why are Australian rates very high in world rankings? There are many other large variations in clinical procedures that must be made public and explained.  Medical services should be subject to the same rigorous cost-benefit examination as pharmaceutical services. Medicare is not doing it.

    Even more potential lies in the use of that database for research into efficacy of treatments. This was an intention of Medicare’s designers, who envisioned the day when computing power could extract clinical information from that database. That day has arrived, but the government, although willing to invest billions in some areas of medical research, shows no interest in using this valuable resource, or in the integration of MBS and PBS data which would provide rigorous pharmaceutical evaluation at a tiny fraction of the cost of clinical trials.

     

    6. Cost and blame shifting. Governments, more concerned with their fiscal balances than with economic efficiency, try to shift costs on to other governments, Commonwealth to state and vice versa, on to individuals, or on to future generations for example in neglect of public health. Attempts to resolve the Commonwealth/state blame and cost shifting have been largely unsuccessful and certainly expensive with the Commonwealth succumbing to state political pressure without fixing the lack of integration.

     

    In Part 2 I will be looking at the major obstacles to health reform, including the influence of the vested interests who are concerned to protect their own territory rather than serve the public interest.

  • John Menadue. Health Workforce Reform.

    Conservative commentators and the Business Council of Australia speak endlessly about the need for industrial and workforce reform particularly in the blue-collar area where there has already been very substantial reform and improvement. Changes in the Australian workforce have helped transform the Australian economy in the last 30 years. It was begun under the Hawke/Keating governments and continued under the Howard governments.

    But the health sector has scarcely been touched. I ‘guesstimate’ that there is a potential productivity dividend of at least 40% in health workforce reform over the next decade. That 40% may be on the low side. The Productivity Commission estimated a few years ago that a 10% efficiency improvement in health would deliver an $8 b dividend at that time.

    Reform of the health workforce structure, work practices, multi skilling, teamwork, and flexible training, are the key micro-reform issues that we face.  The most obvious example of restrictive practices in health is in obstetrics and midwifery.  In Australia, less than 10% of normal births are managed by midwives.  In the Netherlands it is over 70% and in the UK over 50% In NZ it is 90%.  The reason why Australia is so far behind the field is opposition by obstetricians who want to protect their market share and high incomes. They are highly favoured through the Medical Benefits Scheme.

    Health is Australia’s largest industry, and employs about 7% of the civilian workforce.  About 70% of every health dollar of expenditure is in labour costs. Such a large area of expenditure cannot be excluded from workforce reform. It is more important than any other workforce issue. Health workforce reform will not be easy but it is essential. Above all else it requires political courage to face down the special and entrenched interests that dominate the health sector.

    Several years ago, an emeritus professor at University of Sydney, Professor Kerry Goulston described the problems he saw as follows.

    Our medical workforce management in hospitals is rigid and antiquated. Job sharing is rare. … Most hospitals are staffed on the front line at nights and weekends by junior medical staff, often without onsite supervision…. The traditional roles of doctor, nurse and allied health personnel have to be redesigned around the patients’ needs.  Many procedures carried out by doctors could be done by non-doctors. Many medical duties could be done by other health professionals. In places where it has proven impossible to recruit doctors, nursing staff have been upskilled to provide a higher level of clinical care. It is clearly possible to extend this model for use in public hospitals where better supervision is available, but would require a reduction in the strict demarcation of clinical roles. … The morale of our hospital workforce is low. Disengagement and loss of commitment is a real issue.

    We clearly need to dramatically reshape our health workforce. The Productivity Commission made the first serious attempt to address the problem. But progress has been very slow.

    My own view is that the financial lever of the Medical Benefits Scheme is the best way to promote reform. Nicola Roxon made a few changes in this regard but it was quite minor.

    We need concerted and strong political and administrative action to break down  the old historic workforce boundaries and boxes and  establish new ways of working – teams working across professional and organisational boundaries; flexible working to make the best use of the range of skills and knowledge of staff; streamlined workforce planning and development which stems from the needs of patients not of professionals; maximising the contribution of all staff to patient care, doing away with barriers which say only doctors or nurses can provide particular types of care; modernising education and training to ensure that staff are equipped with the skills they need to work in a complex, changing health system; developing new, more flexible careers for staff in all professions; expanding the workforce to meet future demands and more flexible deployment of staff to maximise the use of their skills and abilities.  .

    We need for example to consider nurses undertaking greater responsibility for prescribing, diagnosis and triage in hospitals; nurse anaesthetists complementing and substituting for medically qualified anaesthetists; enrolled nurses taking on some of the tasks currently done by registered nurses; midwives substituting for obstetricians; new allied health assistants supporting allied health workers to increase their capacity to treat more patients; practice nurses undertaking some of the work currently performed by GPs, including some prescribing, screening and triage.

    Professor Peter Brooks  has drawn attention to the 60,000 physician assistants in the United States who grew out of the ‘medics’ in Vietnam. They are trained for about two years in 100 professional programs across the United States, concentrating on science and clinical aspects.

    Clearly nurses, allied health, ambulance officers and community health workers could undertake more skilled work except for the barriers erected by other professionals.  Pharmacists need to employ their professional skills in primary care with less of their time spent as shop keepers.

    The great problem is that our health and community services workforce is trained and works in boxes – ‘there are boxes everywhere’. We need dramatic change, up-skilling, multi-skilling, broad banding and teamwork.

    Failure to tackle these major workforce problem results in clear loss of morale and high staff turnover across the health and community sector. We see the problems like the tip of the iceberg, only when they are revealed before a court or medical board. The powerful sectional interests still call the shots and resist change. If they had blue collars, rather than white coats, the story would be different.

    What is lacking is courage and determination to address the problem. Excuse me dropping names but in the late 1980s, I attended a round table discussion with UK Prime Minister, Maggie Thatcher in Sydney.  She was asked ‘now that you have reformed the work practices of the printers and coal miners in the UK, what do you propose to do about the restrictive practices of doctors and lawyers?’  She replied, ‘It is a very serious problem, but if you don’t mind I will leave it until my last term’.  The coal miners and printers were fair game, but not the doctors and lawyers who were put in the ‘too hard’ basket.

    The health and community workforce structure is at the end of its design life. The whole health system is built around provider demarcations. It must be efficiently built around patients’ needs.

     

     

  • John Menadue. Why are the Nordics so successful? Part 2.

    You might be interested in part 2 of these articles on the Nordics.

    In my earlier postcard from Denmark, I described the Nordic success.

    I didn’t mention that they are rated the happiest people in the world, have the lowest rates of corruption and are on track to achieve their target of 50% renewable energy by 2020. Copenhagen is a very liveable city.

    But why have Denmark and other Nordics, Finland, Sweden and Norway been so successful?

    Obviously a small country like Denmark with less than six million people has advantages in terms of social cohesion. A small population makes for stronger personal and community ties, and national unity. But a smaller population does not have the advantages of scale although with higher value added production this is probably less of a problem than in earlier years.

    Amongst their other features, the Vikings were great traders. That tradition continues today with Danes actively pursuing overseas markets. The people are well equipped to do so. In my admittedly brief stay in Copenhagen I did not find any local who was not reasonably fluent in English. It contrasts sharply with our failures in developing Asian languages to equip us in our region.

    In the 1970s and early 1980’s Denmark came to the conclusion that it’s remarkably high taxes and high welfare was not sustainable. Changes needed to be made, but in the process they did not shred everything from the old model. The country continues to have high taxes and provides very generous welfare. This reflects the close linking of national identity and social responsibility which is central to Denmark’s welfare model.

    On discovering that the old social democratic consensus was no longer working, Denmark let some of it go with remarkably little fuss and introduced new ideas from across the political spectrum. They were determined to push through reforms. There was a hard-headedness and pragmatism about it.

    This pragmatism explains why the new consensus so quickly replaced the old one. Few social democratic politicians now want to dismantle the conservative reforms put in place in recent years. Denmark has seen an amalgam of left and right wing policies that are broadly agreed across the community. Winners don’t take all in Denmark. Compromise is essential. A left wing coalition led by Social Democrats and Social Liberals was returned to power in 2011.

    An underlying factor in the successful changes in recent years has been strong trust in government. The Danes do not see the state as a dead hand. They see government as enabling opportunity, promoting individual autonomy and social mobility. They trust their government and politicians to a remarkable degree. What a contrast it is to Australia.

    This Danish trust in institutions is quite remarkable. A survey by the European Commission in November 2012 found that 53% of Danes had public trust in institutions. In Europe it was only 32%. By comparison in Australia, Essential Media reports that our ‘trust in institutions’ ranges from above 50% for the High Court, the ABC and the Reserve Bank but down to 20% or lower for trade unions, business groups and political parties. We have a long way to go to catch up to the Danes and other Nordics in trust in public institutions. We badly need to renew our public institutions that have been badly damaged. Just think of the deliberately created chaos in our last Parliament.

    Trust in government has been a feature in Denmark for centuries. That results in high quality people joining the public service. Citizens and companies pay their high taxes without a great deal of complaint, and play by the rules. Government decisions are widely accepted and few go to the courts to settle disputes.

    This trust in institutions is reflected in the fact that Danes expect their public leaders to keep their word. In his History of Denmark, Professor Knud J.V.Jespersen puts it this way.

    ‘The fundamental attitude of modern Danes is that the state is a friend and ally, not adversary, a protector and not an enemy. This is very much an unconscious result of the fact that for generations, the Danes have been accustomed to a state of law fashioned by the Danish Law to express… the relationship between the individual, society as a whole and the state. … The code stated that any promise intended to create obligations of a legal nature should be considered as binding irrespective of the form of the promise and whether it related to commerce or any other contractual circumstance. Even a verbal promise to give a present or to sell a property was considered as binding as if it had been in writing. … It is still true in Denmark that a man is a man, his word is his word, and should anyone in public life in modern Denmark fail to deliver on his word or promise, the public will judge him accordingly….

    The most recent and spectacular example of this was when the previous Prime Minister, Poul Nyrup Rasmussen made a public promise in the run-up to the 1998 elections not to tamper with the rules for early retirement. When he did so anyway, after forming a government, he was embroiled in a crisis of confidence from which he never recovered. He lost the next election in 2001, not so much because he had chipped away at the system of early retirement benefits, which most people anyway thought was a sensible thing to do, but because he had breached a fundamental principle of Danish Law, the binding contract, which dates back to the Fifth Book of the Danish Law.’

    As part of this trust in government Danes insist on honesty and transparency. They insist on rigorous scrutiny with access to almost all official records.

    In the economic sphere, they let the economy rip but underpin that very liberal approach with support and retraining for those who are unemployed. The labour market is very flexible. Universal and free education encourages all students, regardless of social background, to achieve their potential. In taxation, husbands and wives are treated separately and on equal footing. Universal day-care for children makes it possible for both parents to work full time. This Danish emphasis on building human capital is not only a key to greater equity but major economic benefits.

    That commitment to human capital development is dramatically shown in its support for skilling in architecture, design and film.

    The Danes have clung to a strong public funder in health and have refused to go down the path of subsidised, costly and inequitable private health insurance

    The Danes have clearly shown the benefits of getting a few important things right. They are pragmatic enough to make major changes when necessary. We could learn something from that in Australia at the present time.

    At its core, the Danes have trust in institutions and government in particular. They see the government as a positive influence. Freeloading by any group or person is not tolerated. Governments in turn must earn that trust. Trust is perhaps a little fuzzy and hard to define. But we instinctively know it is essential in both private and public life.

    The greatest damage to public trust in my lifetime was the dismissal of the Whitlam Government in 1975.Our Governor General and High Court Justices deceived the Prime Minister and damaged our public institutions. We have not recovered from that appalling episode. Our ‘betters’ who extol the importance of institutions and the value of conventions, trust and tradition were the very people who caused such damage.

    We could learn from the Danes about good governance and trust, and the importance of developing human capital. They are the keys to their success.

     

  • John Menadue. What does Labor stand for? Part 6

    You might interested in this repost of part 6 on the economic role of government.

    The economic role of government

    In addition to key principles the second immediate issue is the economic role of government. Those who would benefit from weak and distrusted government have deliberately undermined the legitimacy of the public sector.

    We are often told that there is really no difference between the major parties. In some respects that is unfortunately true but I suggest there is a major and continuing difference. And that difference is over the role of government. The Labor Party has always rejected the view set out in the Liberal Platform ‘that only businesses and individuals are the creators of wealth and employment’

    Australians have been encouraged to forget that their prosperity is based on both public and private goods. To many people government has become ‘invisible’, except as a vehicle for distributive welfare. Australians have lost sight of the contribution of the mixed economy, not only in providing public goods, but also in ensuring that the forces of greed and short-sightedness don’t lead to economic and social collapse. It is noteworthy that despite the continued denigration of government and the public sector, the three most trusted institutions in Australia are public institutions – the High Court, the ABC and the Reserve Bank. In the survey by Essential Research there was not a private group in the top eight most trusted groups and institutions in Australia. The three least trusted groups were business, trade unions and political parties.

    Even conservatives acknowledge that only the public sector can provide some services such as national defence and management of the money supply. In addition, however there are economic functions where private funding or provision is possible but only at high economic cost, with distorted incentives and with serious consequences for equity. These include education, health insurance, energy and water utilities and communication and transport infrastructure. In these and other areas there are market failures for which prudent economic principles require a strong government role in funding or provision. Unless Labor articulates and defends the proper economic role of government – a pre-requisite to improving Australia’s weak taxation base – economic growth will be restrained by inadequate public spending and investment.

    Of these investments, the most important is human capital to ensure that people can develop their capabilities so that they can contribute to their full potential through employment, business or unpaid work. In the competitive global economy of this century, human capital is a nation’s only secure asset. Scandinavian countries demonstrate this. A population with skills and with incentives which match rewards to contribution will draw less on distributive welfare, preserving public revenue for needed social insurance and public goods. The best antidote to disadvantage and low self-esteem is not welfare but well paid and meaningful employment.

    Labor will find it hard to make these investments if it allows itself to be depicted as the party of big welfare spending. In fact conservative governments, because of under-investment in human capital and physical infrastructure, and neglect of economic adjustment, have spent strongly on distributive welfare to compensate for inequalities rising from a weakened economic structure. Over the last 50 years, social security assistance has risen from 5% of Australians’ household disposable income to 12%. Examples of this expanded social security assistance are baby-bonuses, family allowances and superannuation concessions for the wealthy. Governments are moving to wind back some middle class welfare, but the justification is more about immediate budgetary management rather than an expression of principles. Rather, Labor should be the party which ensures that Australia becomes less reliant on distributive welfare. Instead of referring to ‘the education revolution’ in isolation, it should present its human capital policies in the context of a unified set of principles in infrastructure, education, health, environmental  protection, underpinned by principles of investing in capabilities, nurturing individual freedom and autonomy and supporting social inclusion.

    There is an opportunity to differentiate Labor from what has emerged as continuity between Howard and Abbott in that both are strong on distributive welfare while ready to sacrifice other aspects of government which would strengthen the economy’s capacity to provide well-paid and productive employment with less need for social transfers.

    A reframing of policy in terms of strengthening the economy in order to reduce the need for distributive welfare would not only neutralise the ‘right’s’ attack on Labor as the party of the welfare state but would also give a unifying theme to many policies. It would link policies in industry adjustment, infrastructure, education, health and social inclusion. It would overcome the false framing of a trade-off between equity and efficiency. It would give Labor parliamentarians an opportunity to engage more openly with the public without the need for spin and carefully prepared texts.

     

    In the last 5 blogs I have argued that Labor should be explicit about the principles that drive policies and programs. Those key principles were

    Fairness

    Freedom

    Citizenship

    Stewardship and

    Ethical responsibility

    In addition to these principles Labor should stand for democratic renewal, including of itself and the key role of government in a strong economy and society.

     

  • John Menadue. Postcard from Denmark on the Nordic Success

    For holiday reading, you may be interested in this repost.

    I have been interested for many years in the economic and social success of the Nordic countries, Sweden, Denmark, Finland and Norway. Together they have a population of about 26 million.

    But what triggered my recent interest and decision to visit Denmark was the sheer pleasure of watching several Danish TV series –Borgen, The Killing, The Bridge. They are the best TV series that I have seen in years and far superior to the tosh that we often get from the US and sometimes from the UK. The Danish film industry receives government finance, but more importantly the Danes have invested heavily in human capital and the talent shows in these TV series. Portrayal of a country’s cultural life is important for the country to understand itself better. But in the case of Danish films, I have found them attractive enough to come and visit Copenhagen and spend some tourist dollars. Although I should say that Copenhagen is expensive.

    In 2012, the World Economic Forum and several related agencies ranked the four Nordic countries the best performing in the world. The ratings covered global competitiveness, ease of doing business, global innovation, corruption perception, human development and prosperity. Whilst the Nordics ranked 1 to 4 in the world, Australia ranked number 12.

    Last year The Economist, a conservative magazine, published a special survey of ‘The next supermodel’. The Nordics were the supermodel. It said ‘If you had to be reborn anywhere in the world as a person with average talents and income, you would want to be a Viking. The Nordics cluster at the top of league tables of everything from economic competitiveness to social health to happiness. They have avoided both southern Europe’s economic sclerosis and America’s extreme inequality. Development theorists have taken to calling successful modernisation “getting to Denmark”.’

    It added ‘The Nordics also offer something for the progressive Left by proving that it is possible to combine competitive capitalism with a large state; they employ 30% of their workforce in the public sector compared with an OECD average of 15%. They are stout free-traders who resist the temptation to intervene even to protect iconic companies. Sweden let Saab go bankrupt and Volvo is now owned by China’s Geely. But they also focus on the long-term – most obviously through Norway’s ($US884billion) sovereign wealth fund and they look for ways to temper capitalism’s harsher effects. Denmark, for instance, has a system of “flexicurity” that makes it easier for employers to sack people, but provides support and training for the unemployed. Finland organises venture capital networks.’

    The Nordics have traditionally had high taxes and high welfare spending along with strong economic growth and low unemployment. But the global financial crisis and membership of the European Union has forced readjustment and reform to reduce taxes and welfare spending.

    These changes are broadly supported by all the major parties. But the sales tax on new cars is still 180%. There are also heavy fuel and parking charges. This shows up in Copenhagen where it is one of the few major cities in the world not being strangled by cars. On the road you have to watch out for bicycles as much as cars. The 25% VAT includes food and restaurants.

    Taxes generally are amongst the highest in the world but the community seems broadly to accept them because it is confident that the government will spend the tax money for worthwhile purposes and with equity.

    In Denmark there are two or three strong parties and four or five other significant parties. No party has won an outright majority since 1901. No single party has formed a government alone since 1982. With multi parties, negotiation and compromise is essential. The record shows that new governments maintain the thrust of previous government policies although making changes around the edges.

    Capitalism is given a fairly free hand and there is acceptance that firms will go bust. But the Danes and others go all out to protect the most valuable resource, their human capital. People who lose their jobs through structural change are given good income support and meaningful retraining.

    The Danes have excellent schools and government funded and free health care. They root out corruption and rent seekers. If only we would do the same! Denmark has one of the most liberal labor markets in Europe with a very high rate of social mobility. In information technology and the internet they are ahead of most. 79% of eligible men work and 72% of eligible women work. Child care is readily available. The Danish gross government debt as a proportion of GDP is well below the US and Europe.

    In Denmark there is a strong tradition of different classes getting along with each other which is not surprising with such a small population (5 million) and a strong neighbour like Germany to the south.

    The absolutist monarchy took serious note of the French Revolution and decided that their survival depended on not resisting democracy and living modestly. Politicians think that it is smarter to be seen riding a bike to work rather than using a government limousine.

    The Nordic model is still work in progress with many changes necessary with I suspect more means testing. But they have probably reached the future ahead of others and are grappling with problems that others will face in the years ahead.

    The major stain on public life in Denmark, as it is with so many other countries in Europe, and even in far-away Australia, is the xenophobic attacks against refugees and migrants by political conservatives. Only last weekend in neighbouring Sweden the anti-immigration party, Sweden Democratic, polled 13% of the vote.

    In my next postcard from Denmark, I will try to describe why the Nordics and Denmark in particular have been so successful, despite high taxes, generous social services and more recently, significant increases in refugees at least compared with the size of their populations.

    Obviously organisation is easier in countries with small populations, but I suspect that the most important reason for Denmark’s success is good government. The Danish people see government not as a dead hand or the purveyor of red tape, but very largely an enabler of opportunity and freedom.

     

     

  • John Menadue. What does Labor stand for. Part 1

    You might be interested in this repost .  It was part 1 of a six part series. Part 6 will be reposted tomorrow.  John Menadue

    Labor’s constituency

    The Labor primary vote has declined from about 45-50% fifty years ago to 35-40% today. Labor has lost its clear identity with the ‘working class’ and what it stands for. Its natural constituency and membership has declined. To contain the loss, Labor has increasingly committed itself to focus groups, marginal seat strategies and ‘whatever it takes’. Values, principles and ideas have given way to marketing of products .Money has replaced membership as the driving force of campaigns. The trade unions remain the most important institutional Labor supporter. The unions have a proud record but their influence is out of proportion to their role in the community and the ‘Labor constituency’.

    Principles as the basis for policy

    If Labor is to differentiate itself from conservative parties, it needs to express that difference in a clear set of principles which accord with the best of Australians’ values. Otherwise the political contest is reduced to satisfying short-term materialist ‘aspirations’, appeasing vested interests and managing the media cycle. In such a contest, Labor is engaged in a futile struggle, for the Coalition is adept at conveying the misleading impression that it is the ‘natural party of government’, particularly because of its supposed competence in economic management. Joe Hockey’s performance as Treasurer shows that this supposed competence is a myth but conservative commentators still persist with the myth.

    From community values a set of principles of public policy can be developed – principles which define Labor in contrast to other parties. Those principles can underpin a coherent set of policies and programs which implement those policies.

    Values > principles > policies > programs.

    Moving to the ‘right’ on issues such as refugee policy and health care simply legitimises the conservative position – a position from where exploitation of people’s fear is likely to drive out sensible and reasonable political debate. Selectively compromising – a little socialism here, a little free market there – as was the strategy of Britain’s New Labour – only confuses Labor supporters and the electorate because it presents inconsistent values.

    Social democrat parties, including Labor, were founded on an optimistic view of human nature and on recognition of the public sphere where people realise their full capabilities. These ideas can be expressed in consistent and coherent principles such as stewardship, the common wealth, including enhancement of social, environmental and institutional capital and protection of natural resources.

    In his emphasis on the ‘social question’, John Curtin gave effect to these principles, acknowledging that only a strong society, including a strong and respected government, can support a strong economy. And of course there is no point in an economy that does not serve social ends.

    Curtin’s social democratic vision contrasts sharply with the Liberal Party platform ‘that only businesses and individuals are the creators of wealth and employment’, a view that reduces government to a burden rather than a contributor to the common wealth. Curtin’s vision contrasts with the notion that ‘a rising tide lifts all boats’, which legitimises destructive social divisions, which encourages people to separate themselves from society in physical or metaphorical gated communities (private schools, private health insurance), which allows the connection between contribution and reward to be severed, which encourages rent-seeking, speculation and protection of privilege rather than productive investment and which compensates the ‘losers’ with social security handouts.

    Just as Labor governments provided leadership to face great challenges in the 1980s, so too today Australia faces even greater challenges – climate change, population ageing, dilapidated infrastructure, commodity based exports, deficits in human capital and a weak base for public revenue. The politics of ‘what’s in it for me’ discourages us from facing these challenges, for there will have to be trade-offs: some will have to pay more than others and some will have to forego benefits now for the sake of longer term benefits. Such transitions can be painful, but are more likely to gain support when people understand the principles underpinning public policy.

    When the Labor Party is unified around a set of principles it can still have a robust debate about how to give effect to those principles. But it would be in control of its message because its parliamentary representatives can engage with the electorate in a consistent and sincere voice, with less reliance on ‘talking points’ and spin and with less concern with the immediate reaction of focus groups. Labor supporters would be much more prepared to accept political compromise if they know that there is strong leadership and there is broad agreement on key values and principles. Labor leadership has to be patient and consistent around these values and principles – and never go backwards. Authenticity and sincerity are then easily recognised.

     

  • John Menadue. Co-payments and the government’s attack on general practice.

    You might be interested in this repost.  

     

    A strong primary health care system based on general practise is the key to a sustainable health service. Unfortunately the government is doing its best to weaken general practice.

    Primary care offers the best prospect of improved quality of care and increased efficiency, particularly through new work practices. The evidence is worldwide that primary care provides

    • A greater focus on prevention and chronic care for our ageing population.
    • Care at lower cost e.g. specialist care in Australia is more than double the cost of care by a general practioner.
    • Faster medical treatment
    • Consolidated service delivery to overcome fragmentations.
    • A seamless one-stop approach
    • Consolidated history with test results
    • Better access for all.

    Primary care reform is the single most important strategy for improving our health and making the health system sustainable This is true for all countries, developed and undeveloped..

    Community level prevention and primary care is essential to restoring universality and efficiency in Australian healthcare. Further, health services should be delivered at the most local level possible – the principle of subsidiarity.  The dignity of patients is best safe guarded by treating patients in their homes or as close to their homes as possible.

    Hospitals should be the last resort. They are very expensive. A visit to a hospital emergency department costs ten times the cost of a visit to a GP. Too often politicians, the hospital lobby and the media keep telling us that hospitals and hospital beds are the top priority. They are not.

    We need to improve general practice rather than weaken it as the government is doing. At the same time we need to review the way doctors are remunerated. Fee-for-service puts up costs and discourages integrated care. The government should consider two possible changes. The first is that the MBS schedule be amended to permit private practices to remunerate a supervising general practitioner in their practices. That supervising GP would be remunerated for over-sighting the treatment and referral of patients and their records. The second is that the government should offer to negotiate contracts with practices, both corporate and non-corporate, that will commit to the delivery of integrated care. I expect that the government would be agreeably surprised at the number of GP practices that would respond because of their concern about the ‘turnstile’ nature of a lot of general practice in Australia today. Doctors should be remunerated for keeping patients healthy rather than remunerating them when their patients are sick. What a perverse incentive we have in FFS!

    A related key to a sustainable heath system is health workforce reform, particularly in primary care. We have tens of thousands of health professionals whose skills are underutilised or undeveloped – nurses, allied health, pharmacists and ambulance officers. About 10% of normal births in Australia are managed by midwives. In NZ it is over 90%. We have about 400 nurse practitioners when we should have thousands. The medical colleges have disproportionate influence in controlling access to the professions.  Medical training is strongly focused on acute care in hospitals, whereas most of the work of future doctors will be with chronically ill patients in the community. Few are trained to work in team practices. Primary care is not seen as an attractive option for young doctors. Only 13% of final year students have any interest in working in primary care, and only 13% would consider working in rural areas. General practice must be made more attractive and better paid compared with specialist care, but not via fee-for-service.

    Our health sector is wracked by nineteenth century work practices. It is the largest part of the Australian workforce. It is the fastest growing. We are regularly told that we need to improve the productivity of the Australian workforce. But the largest part of the Australian workforce in the health sector is not mentioned. We have seen the dramatic benefits in productivity improvements through workforce reform in many areas. But those gains are small beer compared with the potential gains with health workforce reform, leveraged by such means as wider access to MBS and making all Commonwealth health funding conditional on substantial workforce reform.

    We need substantially improved health work practices to improve the efficiency of our health sector and to lower health costs. It is also necessary to expand the professional opportunism for tens of thousands of health care workers.

    But workforce reform is hard because the AMA is determined to protect the territory of doctors in the name of quality and safety in health care.

    The key to a sustainable health system is in primary care and general practise associated with workforce reform. But the government is undermining general practise and talks endlessly about the need for workforce reform but is not game to tackle the vested interests in the health sector.

     

  • John Menadue. Be careful what you wish for.

    You may be interested in this repost.  John Menadue

     

    Be careful what you wish for.

    With the Victorian election result the Labor Party may be hoping to see the demise of Tony Abbott in the New Year. But it should be careful what it hopes for.

    Gough Whitlam successfully crippled Billy Snedden as the leader of the Liberal Party in 1974 and got Malcolm Fraser in his place, a much more substantial leader.

    Paul Keating pulled the rug from under Alexander Downer and got John Howard instead. We know that John Howard proved to be a much more formidable opponent than Alexander Downer.

    What if Tony Abbott was deposed or stood aside and a new leader, after a brief honeymoon, went to an early election?

    What is not clear at this stage is when Rupert Murdoch will tap Tony Abbott on the shoulder and tell him that he is no longer marketable and that a new leader would be easier to sell!

    Sitting behind the serious problems of the Liberal Party is a nagging concern, what does the Labor Party stand for?

  • John Menadue. Mission creep in Iraq again

    I have reposted below my blog of September 1 last year about the developing pattern of mission-creep in Iraq. Now, four months later, we are seeing it happening again. Last week in Iraq Tony Abbott made it clear that Australia was receptive to any further requests to send more Australian military to Iraq. 

    Tony Abbott, with John Howard, have both been part of our disastrous intervention in Iraq. We now intend to continue and expand it. 

    War is a serious business, but Tony Abbott doesn’t seem to think so, given how easily he makes one military commitment after another. Last week he was pictured admiring the vinyl decal stickers on the side of an RAAF fighter denoting each Iraq bombing mission. What a thoughtless, provocative piece of stupidity to have decals on our fighter in the first place, let alone having the Australian Prime Minister looking on approvingly.

    The mission creep continues and how obviously our Prime Minister seems to be enjoying it.  

     

    In an excellent article in the SMH  [31.8.2014], Paul McGeough writes of our still being at the beck and call of the US and the mission creep already evident as we rejoin the war in Iraq.

    http://www.smh.com.au/federal-politics/political-opinion/australia-still-at-americas-beck-and-call-20140831-10albb.html

    Have we forgotten Vietnam and all the other disastrous wars that we have got involved in at the request of the US? Invariably they started with humanitarian aid, then advisers, then logistics support and all the way from there to full-scale military involvement in causes we didn’t understand – except that the US was an ally and we had to be loyal. In Vietnam we lost with disastrous consequences for ourselves, but mainly for the Vietnamese people. In Vietnam and later in Iraq and Afghanistan our role steadily expanded. We are already seeing this mission creep again today in northern Iraq.

    We are now committed again to Iraq whilst refusing debate in our parliament. We were told by the Minister for Defence that ‘Were we to delay making decisions as the events confront us, people’s lives will be seriously at risk.’  This is an echo of the false reasoning we have been given in the past. Just forget that our ill-advised decision to join the war in Iraq was based on flawed information and costs hundreds of thousands of Iraqi lives. That foreign intervention in Iraq sowed the seeds of the disaster we are now seeing in that country. For centuries foreign interests have failed dismally in trying to control events in Iraq and Afghanistan. Don’t we ever learn?

    Our latest commitment to help the people of Iraq began as humanitarian air-drops. Now we are to provide arms to a break-away province in the north of Iraq. In that province there are strong elements of the Kurdistan Workers’ Party which is a proscribed terrorist organisation. How will we ensure that the arms we are supplying will not finish in the hands of the PKK?

    The mission creep has occurred quickly. It has now moved from humanitarian and military supplies to include our Special Air Services to protect air drops of food and deliveries of weapons. It won’t be long before the SAS is asked to extend its role.

    But what are our ‘friends’ doing to combat the Iraqi State? There is speculation at the moment rather than clear information that IS is receiving support from some of our friends.

    • France, Switzerland, Austria and Spain seem to have paid ransom money to IS for the release of their nationals. Presumably that has been done with the support of those governments. It is estimated that over the last five years IS has earned Pds75 million in ransoms for more than 50 European captives.
    • The Director of the Centre for Research and the Arabian World at the University of Mainz in Germany has commented recently that ‘The most important source of ISIS funding to date has been support coming out of the Gulf States, primarily Saudi Arabia, Qatar, Kuwait and UAE. Aren’t these countries our friends with strong trade, investment and aviation links? The Director added ‘Saudi citizens now compose the largest contingent of foreign fighters in ISIS.’ He commented further that the funding was ‘less from the Saudi Government than rich Saudis’.

    IS is also drawing on local resources. It looted the Central Bank in Mosul of $US429 million. The Iraqi Army that we had helped train fled and left their uniforms and weapons behind. IS has access to oil wells in Syria and Northern Iraq.  In the same way as the mafia it extorts taxes from businesses and individuals.

    Surely we should be told more about what is involved in our recent rejoining of the war and what we are attempting to do, and how we will avoid the mistakes of the past. Surely the Australian Parliament should be the primary forum for this debate. With Simon Crean as Leader of the Opposition the ALP opposed our joining the US invasion of Iraq in 2003. That same leadership is sadly lacking today.

    In terms of our own security, we will now be less safe. The head of ASIO has told us.

  • John Menadue. Getting back on the front foot.

    The tide is turning on climate change. It is going out on Tony Abbott and Rupert Murdoch. They will never admit it but the efforts of the Rudd and Gillard Governments will be vindicated.

    It is time for the ALP to really go onto its front foot on climate change. In recent months they have been extraordinarily quiet. It is not good enough to rely on the failures of the Abbott Government. The ALP needs to develop and prosecute its own policies.

    People in South Australia must be extremely worried about recent bushfires and now predicted heavy rainfalls. But we are hearing little from the ALP about climate change. The Opposition’s Shadow Minister for The Environment, Climate Change and Water, Mark Butler, comes from South Australia.

    The evidence on the dangers of climate change is mounting almost daily. Australians are feeling and sensing that weather patterns are changing significantly. The climate change deniers, like Tony Abbott, Alan Jones, Maurice Newman, Dick Warburton and Rupert Murdoch, will surely find that their denial has been unwise and damaging to our national interest.

    Tony Abbott tells us that one of his great political successes has been the abolition of the carbon tax. His opposition to the tax was one of his ‘signature policies’. Increasingly we are coming to see that he has misled us. The carbon tax and the associated emissions trading scheme were necessary and good policies.

    The evidence on climate change is mounting month after month after month.

    Last week the Australian Bureau of Meteorology told us (see link here) http://www.bom.gov.au/climate/current/annual/aus/

    • 2013 was our warmest year since records began in 1910. 2014 was our third warmest year. The 2014 spring was the warmest on record. Our mean average temperature in 2014 was 0.91 degrees above the 1961-1990 average.
    • Globally, 2014 may be the warmest year on record. No year since 1985 has observed a below average global mean temperature and all of the ten warmest years have occurred since 1998.
    • In Australia there was near average rainfall in 2014, but it was dry in the East and along the West coast.
    • Sea surface temperatures have remained high around Australia, with all five years between 2010 and 2014 within the eight warmest years on record.
    • There was extreme heat and significant warm spells.
    • There were significant bush fires, particularly in early spring.

    Despite Tony Abbott and Rupert Murdoch and the deniers, public opinion is shifting. In a survey released in 2014 the Lowy Institute showed the first increase in public concern over climate change in six years.  Almost two thirds of respondents said the government should be giving leadership on climate change.

    The international climate change conference in Peru late last year showed an increasing willingness by countries to take action on climate change.

    Despite attempts by Tony Abbott to sideline climate change at the G20 meeting in Brisbane, the presidents of the US and China signed a major agreement to combat climate change.

    In the fifth report of the Intergovernmental Panel on Climate Change, the world’s most eminent climate scientists overwhelmingly agreed that climate change is a serious and developing problem.

    Pope Francis will weigh in in a few months’ time with the first ever Vatican teaching on climate change.

    But here, the Australian Government is rolling out its pay the polluter Direct Action Plan and trying to wind back the renewal energy target.

    Agriculture Minister Barnaby Joyce in October last year outlined his plans on competitiveness in agriculture and how farmers needed to adapt to climate variability. But there was no mention of climate change. This is quite remarkable as there is probably no group in Australia that is likely to be more affected by climate change than Australian farmers. But tagging along behind the Liberal Party for the sake of a few ministerial posts, the National Party is failing to provide effective leadership for rural Australia.

    The tide is turning on climate change.

  • John Menadue. If I were a Muslim…

    The brutality and assasination of the editors and cartoonists of Charlie Hebdo must be condemned. Those responsible must face and perhaps have faced the full consequences.

    But if I were a Muslim, I would have been offended by the Charlie Hebdo cartoons. They were not a critique of Islam but gratuitous insults. I expect my Christian faith to be respected. Religious tolerance requires respect for other people’s beliefs.  The cartoonists at Charlie Hebdo did not do that.

    We live in a fragile and pluralistic world and we must be aware of the consequences of what we do and say. Surely that is what fraternity and solidarity is about – respecting the rights and beliefs of others.

    Both the New York Times and The Guardian have refused to publish the Charlie Hebdo cartoons. I believe that shows mature judgement.

    Charles Walton of the the University of Warwick sets out in the link below the problem when free speech becomes a kind of fundamentalism. This article was published in The Conversation on 9 January.

    http://theconversation.com/when-free-speech-becomes-a-kind-of-fundamentalism-36039

    Extremism in any religion is a major concern. We need to consciously build relations with moderate Islam so that the extremists can be isolated. Building relations with Islam goes far beyond anti terrorism action. It involves economic, social and political action so that young Muslims in particular are not isolated in frustration and urban ghettoes.

    The west has exploited the Middle East and antagonised Islam from the time of the Christian Crusades. The Middle East has been attacked, colonised and its resources exploited. That inevitably leaves a legacy of hostility.  That hostility must be addressed on a range of fronts.

    Andrew MacLeod in The New Daily writes about the need for the West to undertake a wide range of activities that will encourage and support moderate Muslims and at the same time isolate extremists. The link to this article is below.

    http://thenewdaily.com.au/news/2015/01/09/must-rethink-islam/?utm_medium=email&utm_campaign=The+New+Daily+Saturday+10115&utm_content=The+New+Daily+Saturday+10115+CID_c2ce349d983fb49cc7796b4c588d8994&utm_source=&utm_term=Why+a+heavy+handed+approach+to+Islamic+extremism+will+not+work#.VLGlodSO5uc.gmail

  • John Menadue. Australia and the White Man’s Media

    I have said many times that a person from Mars who read and listened to Australian media would conclude that we are an island parked off London or New York with little relationship to Asia. Our news and media coverage is so derivative, relying heavily on the BBC, CNN and other news and entertainment houses in the UK and the US .We are recyclers.  Tony Abbott delights in our being part of this Anglosphere with its British monarchy, Sirs and Dames.

    My main concern about the ABC is its meagre coverage of our region by its foreign correspondents. That coverage is grossly inadequate at the present time and I expect that with the current funding cutbacks the situation will worsen.

    Having said that about the ABC, it must be conceded that it is much more regionally oriented and less derivative and parochial than the commercial media in Australia.

    But the ABC has a particular responsibility to project and respond to our regional interests. The importance of our region was on show only last week with the visits of President’s Xi and Widodo and Prime Ministers Abe and Modi and others. The Asian region accounts for almost 60% of Australia’s two way trade.  Seven of our top trading partners are from the Asian region.  Asian investment is increasing. China, Japan and Korea are three major sources of tourists. Our educational institutions depend very heavily on foreign students, particularly from China and India. India is now the top source of migrants. These trends are clear and are likely to accelerate.

    We speak glibly about our future in the Asian Century and the need to equip Australia for its future in Asia, but our media remains fixated on London and New York.

    I don’t accept that the ABC should cut its foreign correspondents in our region. A Board that is seriously interested and concerned about Australia’s future would be expanding our coverage in and of the region and cut costs in lower priority and domestic areas. Unfortunately the Board and senior management of the ABC is largely bereft of anyone with experience in or of Asia.

    I am also inclined to the view that there are pockets of waste in the ABC that need excising.

    The Prime Minister has clearly broken another promise with funding cuts to the ABC and SBS and Malcolm Turnbull made a futile effort to explain away the clear breach of promise.

    The government also throws a red herring across the track by suggesting that the ABC cuts are about getting the budget into shape. There is also a nasty factor at play and it is called political revenge by the Abbott Government which would like the ABC to be as compliant and supportive as the Murdoch media. Cutting funds to the ABC also does a favour to Rupert Murdoch who supported the Coalition in such an unprofessional and unprincipled manner at the last election. Further, Rupert Murdoch and his sons have conducted a relentless campaign against both the BBC and the ABC.  They don’t like public broadcasters. News Corp has polluted the media in the three major English-speaking countries of the world.  It is too horrible to contemplate the consequences for Australia if there was no ABC and News Corp filled the space.

    But my main concern at the moment is about the failure of our media, including the ABC to respond appropriately to the facts of our geography and our national interests. The structure of our media was laid down over 100 years ago. It is still north Atlantic oriented.

    In the White Paper ‘Australia in the Asian Century’, October 2012, the government was advised in the following terms about our media.

    ‘Media is central in shaping perceptions and enhancing communications between Australia and the region, and the information revolution offers unprecedented opportunities to connect in new ways. … The content and coverage of the region in Australia’s media needs to improve. This is the responsibility of media organisations themselves. It is an important part of the whole of Australia approach to building links and engaging with Asia that is needed. … We will request the boards of the ABC and the SBS to examine how to promote more extensive coverage of the Asia region in all aspects of their content and programming, with special attention to news and information coverage, to ensure their content reflects the depth and diversity of our regional connections.’ P271/2

    We have been warned and told directly, and in quite explicit terms, about the importance of our media for our future in the region.

    The only media organisation that will redress our north Atlantic orientation is the ABC. Only the ABC can fill the gap as the business model for commercial media and journalism collapses.

    But with the cutbacks to the ABC, it will now be much harder.

    The commercial media has failed its responsibilities in regional coverage. The ABC has done much better, but that is now at risk.

    We really do have a White Man’s Media that is failing to advance our interests and responsibilities in the Asian region.

     

     

  • John Menadue. Is the state being captured by special interests?

    In his recent book, ‘The Origin of Political Order and Political Decay’ Francis Fukuyama of ‘End of History’ fame, focuses on how even developed and democratic societies can be captured by powerful vested interests. He suggests that this has happened in the US with the coalition of extremists in big business, the Republican Party and the Tea Party.

    First there was the crippling of the political process in the US with money and lobbying; then followed the capture of the state.

    It is a warning for us. We have the institutions of democracy- responsible government, a parliamentary system, the rule of law and a ‘free’ press. But we run a serious risk of these institutions being hollowed out by powerful, wealthy and unrepresentative vested interests.  In Australia we are seeing what Ross Garnaut has called a ‘diabolical problem’, the power of the polluter lobby. Ken Henry has spoken of the appalling public debate on key issues.

    Perhaps the only US lobby group that we are not tracking is the gun lobby

    There is no better illustration of the threats we face than donations by the rich and powerful to buy favours from political parties and the state. The US sets an appalling precedent with its Supreme Court opening the flood gates for political donations.

    Our mining sector has an effective veto on mining tax reform. For $20 million the mining lobby threatened the elected government and saved itself billions of dollars in tax. Will any Australian government in future ever seriously address reform of our mining taxes?

    The payment of tax in Australia by many wealthy people and large corporations is optional. It is costing us tens of billions of dollars each year. Fifty seven percent of our ASX100 companies have subsidiaries in tax havens. One third of the top ASX200 companies pay company taxes of 10 % or less. The statutory rate is 30%. We need to hear from senior executives before a Royal Commission how  companies like Westfields, Glencore, Ikea, Google, Apple and News Ltd can avoid so much tax.

    Wealthy and powerful interests are handed out tax benefits in superannuation deductions, capital gains, negative gearing, family trusts, salary packaging and subsidies to coal, oil and gas companies. Yet we are told that we have to cut back on welfare concessions to fund the disability program. Australian government expenditure is one of the lowest in the developed world but wealthy interests keep proposing cuts to government spending and cuts in taxation.

    With over 60% of newspaper circulations in Australia, News Ltd is a major supporter of vested interests including Big Tobacco. It is an obstacle to informed debate on key public issues. News Ltd aided our disastrous involvement in Iraq and is vehemently opposes serious action on carbon emissions. News Ltd is polluting the public debate in Australia more than any other company.

    The ABC is under attack by News Ltd and other powerful interests.

    With journalists under-resourced, the media depends increasingly on the propaganda and promotion put into the public arena by 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% of content was driven by public relations handouts from lobbyists and their associated public relations arms.

    There are over 900 full time independent lobbyists working in Canberra. That is over 30 lobbyists for every Cabinet minister. On top of these third party lobbyists there are special interests who conduct their own lobbying, e.g. Australian Mining Council and Australian Pharmacy Guild. On top of these lobbyists in Canberra, there are the lobbyists in state capitals. These lobbyists encompass the whole range of interests; mining, clubs, hospitals, private health funds, business and hotels that have all successfully challenged government policy and the public interest.  They are doing great damage in undermining the public interest.

    The health ‘debate’ is really between the Minister and the Australian Medical Association which opposes workforce reform, the Australian Pharmacy Guild that restricts competition, Medicines Australia which exploits its monopoly pricing power and the private health insurance companies which get a taxpayer funded subsidy of over $6 b per annum to undermine Medicare. All these vested interests effectively push aside the public interest.

    The wealthy private schools, with their influential alumni, lobby against needs-based funding which is necessary for both equity and efficiency.

    Most of the business economists that we see on television to ‘inform’ us are employees of banks and other financial institutions. They are unlikely to tell us about the conflict of interest of financial advisers employed by the banks. Public intellectuals have gone missing in action.

    Many of the ‘think tanks’ that pose as independent are funded by secret and  powerful interests. Yet we take them seriously.

    The wealthy polluters successfully destroyed an emission trading scheme and the carbon tax. We no longer have any credible program to reduce carbon emissions.

    We have seen enormous concessions given to casino operators without proper public processes and transparency.  The casino operators lobby both sides of politics.

    The wealthy and powerful have little sense of their enormous privileges and the damage that they are wreaking. During the debate on the mining tax we had the richest people in Australia such as Gina Rinehart and Twiggy Forrest protesting from the back of trucks about how the poor mining companies were being threatened. They should have been laughed off the political stage but we took them seriously. They tell us that the sky will fall in if their privileges are challenged. .

    One of the objectives of the privileged and News Ltd in particular is the discrediting of the whole political process and politicians. They are concerned because it is through political action that their privileges will be challenged. They tell us that only the private sector produces benefits for the community and that the government is both a burden and inefficient. Yet governments have been great contributors in the past and must be in the future.

    The discrediting of our parliament and government reached a peak during the last parliament with disruption and wild accusations of corruption. We need to improve our political processes because they are essential to any reform of our democratic institutions and countering vested interests.

    We face a serious threat with the hollowing out of our democratic institutions through the actions of wealthy and powerful vested interests. We should not take our liberal democracy for granted. It faces a serious threat from within.

    It is getting late and dark.

    Where is the protest movement to check the abuses by the wealthy and powerful and the takeover of the state for their own purposes?

  • John Menadue. Our love affair with cars.

    We are infatuated by the convenience of our cars, particularly at holiday time.

    There are clearly major economic and social benefits but the costs both economic and social are going to become much more apparent. How can we continue to realise the benefits of car travel, but minimise future costs.

    There are enormous political problems in addressing the cost of traffic accidents, traffic congestion and carbon pollution from cars, but we need to start thinking seriously about a suite of options to minimise the damage that cars will continue to inflict on our economy and society. It is not only a political problem in terms of disruption of our lifestyles but the political problem is intensified because of the power of the automobile lobby and the large construction firms who want to keep building more and more freeways and tollways.

    I posted two earlier blogs on this subject. They were ‘Increasing the petrol tax is good policy’ on 9 May 2014 which included an earlier post, ‘Cars are killing our cities’.

    Some people suggest that public transport is the answer to the damage caused by car accidents, car congestion and pollution. But it is only part of the answer. Cities like London and Paris have very good public transport systems, but they still have problems of car congestion, accidents and pollution.

    The fact is we need to curb our use of cars.

    In 2013 a report by eight of the nation’s transport, health and planning organisations estimated that congestion on our roads is costing Australia about $10 billion p.a. This is projected to increase to $20 billion by 2020.

    The Bureau of Transport and Regional Economics estimated the cost of road accidents at $17.85 billion in 2006. When the cost of loss of life is included, the total cost of road crashes increased to $28 billion in 2006. There are reservations about these estimates, but they are the best that are available. Almost all commentators believe that the cost of road accidents is conservative and in any event the data is eight years old.

    According to the Australian Government Department of the Environment, ‘transport’ contributed 17% of our greenhouse emissions in 2013-14. The highest contribution of greenhouse gasses was ‘electricity’ which contributed 33% of greenhouse emissions.  Clearly greenhouse emissions from transport are a serious problem.

    We need to consider seriously a range of measures to maximise the benefits of car travel and to minimise the cost.

    We invariably complain about the cost of petrol, but we pay some of the lowest petrol prices in the OECD and petrol prices in Australia today are the lowest for four years. In the September quarter this year only Canada, Mexico and the US amongst OECD countries paid less for petrol than we did. The tax component of our petrol prices was the fourth lowest in the OECD. For these and other reasons, I support the government’s reintroduction of the indexation of petrol taxes which John Howard abandoned in 2001. Reintroduction of the indexation of fuel excise would be useful transport policy to discourage car use as well as making a small contribution to the budget.

    The Henry Tax Review recommended a traffic congestion tax. Well implemented, a congestion tax would encourage more rational use of our roads. We would have an incentive to travel outside peak congestion periods. It would provide an incentive for employers and for schools to move to more flexible work and school hours. London and Singapore have taken action on traffic congestion with clear public support.

    Just as the sensible carbon tax was designed to impose a charge on companies that pollute so motorists should pay a tax when they choose to travel in peak hours. Such a tax would have to be a state tax. Who is game!

    We need to consider increased sale taxes and registration fees. In almost every respect these imposts in Australia are much lower than in the rest of the world. In Denmark the sales tax on cars is 143%, in Finland 53%, the Netherlands 48% and Sweden 30%. In Australia it is 10%.

    A feature of many European countries is smaller cars, not the large SUVs that are so common in Australia. A Toyota Hilux emits double the carbon dioxide of a Toyota Carola. In addition to the high levels of pollution from large vehicles they obviously occupy more road and parking space. A useful approach would be to increase the sales tax and registration fees of these larger vehicles and reduce the fees for smaller vehicles with a neutral financial result for the government. Higher fuel excise would also discourage car use.

    We also need to tighten emission standards for all our vehicles. The Climate Change Authority says that the new tougher emission standards to operate from 2018 are one of the best and least costly options available to reduce carbon emissions from cars. In doing so we would bring Australian emissions into line with international standards.

    We also need to ensure that in future there is effective integration of transport and urban development policies. So often urban planning is deficient where there is no convenient or efficient means of transport except by car.

    These issues will involve hard political decisions. We cannot put off indefinitely addressing the problems of car use.

    In the short term we should be very cautious about repeated proposals from federal and state governments for more and more ‘freeways’ that only shift the bottleneck and line the pockets of construction and finance companies..

    We do need improved public transport and many major cities of the world show that that is possible. But we can’t avoid facing up to our own infatuation with cars. We are all guilty of helping to kill our cities.

    .

  • John Menadue. What a remarkable thing to say!

    As reported in the SMH of December 22/21 this year, Dyson Haydon, who heads the Royal Commission into Trade Union Governance and Corruption, said the following in respect of Julia Gillard. Her ‘intense degree of preparation, her familiarity with the materials, her acuteness [and] her powerful instinct for self-preservation made it difficult to judge her credibility’.

    What an extraordinary and remarkable things to say by a Commissioner who is a former High Court Judge.  Would he have preferred Julia Gillard to be un-prepared and incompetent before the Royal Commission? If he could not find against her credibility he should have left it at that and refrained from gratuitous comments.

    The Royal Commission that we really need is an enquiry into massive tax avoidance by wealthy individuals and large corporations who are paying minimal or no tax at all.

    There is a lot of privilege and unfairness in Australia that needs exposure and correction.

  • John Menadue. Capitalism and the fall of communism

    In this blog on 5 November I drew attention to an article by the Economics Editor of the Guardian Larry Elliott. In that article Elliott said “As the Berlin Wall fell, checks on capitalism crumbled.”  The principal thesis of that article was that with the end of communism capitalism became more aggressive and less inhibited. He said

    “The fear that workers would ‘go red’ meant that they had to be kept happy. The proceeds of growth were shared. Welfare benefits were generous. Investment in public infrastructure was high. But there was no need to be so generous once the Soviet Union was no more. What was known as neoliberal economics was born in the 1970s but it was not until the 1990s that market forces reigned supreme. The free market spread to poorer parts of the world where it has previously been off limits, expanding the global workforce. That meant cheaper goods, but it also put downward pressure on wages. What’s more, there was no longer any need to be inhibited. Those running companies could take a bigger slice of profits because there was nowhere else for workers to go. If its citizens did not like ‘reform’ of welfare states, they just had to lump it.”

    This is not a new thesis, but it is becoming more and more urgent as a result of growing inequality.

    And inequality is becoming more entrenched and apparent as we see the massive scale of tax avoidance by large multinational companies like Google, Westfields, Apple, Amazon, Ikea, News Corp, Glencore/Xstrada and hundreds of others. Taxes which we pay to maintain a civilised society are becoming optional for the wealthy and powerful.

    In the next week or so I will be posting articles by Ian McAuley on this issue – capitalism, society and morality.

    I think that there is widespread evidence that with the end of communism and the fall of the Berlin Wall 25 years ago, capitalism has become less restrained, and more aggressive. The neoliberal theorists told us that if the rich have more money through tax reductions and other benefits they will invest more and the poor would get the ‘trickle down’ benefits.  This has not happened.

    • There is growing concern across the world about the rise of inequality and the destructive social and economic consequences. Thomas Piketty in his book Capital in the Twenty First Century draws attention to the long term trend to greater inequality. This book is terrifying conservatives. Inequality has become a major issue in the US where the process began with Ronald Regan and his neoliberal supporters. Alan Kohler in the Business Spectator points out that “rising inequality began in the 1980s and was the direct result of Reganomics and its pursuit of tax breaks for the rich”. Regan also set about quite deliberately to cripple the trade unions. This crippling of the trade unions and the tax benefits for the rich in the US have bought enormous benefits for the wealthy and a major skewing of income with disastrous effects on the economy and political life where wealthy vested interests can, in effect, buy governments. Even Rupert Murdoch has shown his concern by hopping on the bandwagon about growing inequality. But his concern is not convincing when we know that in the last 16 years he has paid $US 600 million in salaries to himself, his children and a few senior executives.
    • Maggie Thatcher followed suit in the UK. She said there was no such thing as society, only individuals and markets. This has culminated in what the Governor of the Bank of England said in May this year that “capitalism is at risk of destroying itself and that bankers have an obligation to create a fairer society”. He added “the basic social contract at the heart of capitalism was breaking down with rising inequality.” He warned “my core point is just that as any revolution eats its children, unchecked market fundamentalism can devour the social capital essential to the long term dynamism of capitalism itself…Capitalism loses its sense of moderation when the belief in the power of the market enters the realm of faith”.
    • The neoliberals present their case in terms of how they favour an open and competitive market when in practice a major objective is to favour capital against labour and reduced competition. In Australia, market based approaches to climate change through carbon taxes or an emissions trading scheme are rejected in favour of government handouts to polluters. Vested interests are able to bring influence or buy governments in a way not possible 25 years ago before communism collapsed.
    • We have seen rapacious banks with their obscene executive salaries bring the world economy to its knees in the global financial crisis.
    • In Australia we have a government that speaks about ending the age of entitlement but seems more determined to extend the benefits of the privileged. We have a Royal Commission that is allegedly about corruption but I suspect that the real agenda is to cripple the trade unions, the strongest countervailing force for justice in the Australian economy and society. The CFMEU and the HSU are fair game but not the much more culpable Commonwealth Bank.

    In my blog of 20 September this year, What does Labor stand for?” I emphasised that only a strong society, including a strong and respected government can support a strong economy. There is no point in an economy that does not serve social ends.

    There is a prevailing view by the present government, as the Liberal Party platform says “that only businesses and individuals are the creators of wealth and employment”.  As I said in that September blog this Liberal Party view sees government as a burden rather than a contributor to the common wealth. There is a danger that the increasingly unrestrained power of capital and big business legitimises destructive social divisions which encourages people to separate themselves from society in physical or metaphorical gated communities such as schools and hospitals. It allows the connection between contributions to be severed. It encourages rent-seeking, speculation and protection of privilege rather than productive investment. Increasingly, companies in Australia are paying large amounts out in dividends, buying back shares and sitting on idle cash rather than investing in the future of the Australian economy and Australian jobs. There are not many ’trickle down’ benefits in all of this.

    The fall of communism has emboldened the exponents of capitalism. There is a continual assertion of the importance of business over and against society and the community.

    Pope Francis is one clarion voice saying that business and the market must be underpinned by morality.  He has challenged market fundamentalists who hawk ‘trickle down’ theories as naive. He has denounced the new tyranny of unfettered capitalism and calls inequality ‘the root of social evil’. He is a lonely voice at the moment.

    Ian McAuley will be discussing these issues in a series of articles starting later this week in this blog.

    The fall of communism is proving to be a great boon for the powerful at the expense of the powerless. The restraints on the powerful are crumbling.

  • John Menadue. The accident prone Julie Bishop.

    I have written before about Julie Bishop’s mistakes as Foreign Minister despite the media spin that she has successfully generated. Those articles were: ‘Julie Bishop – Substance and Style’ on the 18th November; and ‘Julie Bishop -‘Undiplomatic, politically partisan and wrong’ on 22 November. Just recall her foolish attack on President Obama over the Great Barrier Reef.

    Since then Julie Bishop has continued on her merry way with a pliant media.

    In the recent budget cuts Julie Bishop volunteered a further cut in her foreign aid allocation of $3.7 billion. Together with the May budget cuts that she agreed to this represents a cut of over $12 billion in our aid program over four years.

    Julie Bishop has clearly decided that it is easiest to attack politically soft targets like the poor in our region. Australian foreign ministers do not have a domestic constituency to defend and so she attacks people who can’t vote or protest about her decisions.

    Michael Keating in this blog has noted that foreign aid has been the fastest growing item in the UK budget over the last four years, increasing by 25%, while expenditure on most other UK government functions has fallen. Indeed the Conservative Prime Minister, David Cameron, is on record as saying that the increase in foreign aid is his proudest achievement in government. In Australia, however we are moving in the opposite direction with Julie Bishop cutting help for the powerless and the poor.

    As Caritas has pointed out, ‘The budget cuts mean that in terms of OECD rankings, Australia’s contributions to overseas aid are now at the lowest level ever since OECD records began in 1954. These cuts are severe and will put Australia near the bottom of OECD rankings as a contributor to international aid and development. … Australia is the third wealthiest country on a per capita basis in the world yet we will now slide to around 20th position as a contributor to international development.’

    Perhaps we have also forgotten that Julie Bishop led the charge against Julia Gillard over the so-called union ‘slush funds’. I recall the day when she was the sole opposition questioner and every question was directed at Julia Gillard’s association with Slater & Gordon and the AWU. Accusations of criminal conduct were made against Julia Gillard, but the Royal Commissioner Deyson Haydon has now found that there were no grounds for criminal action over Julia Gillard’s involvement in the so-called slush fund.

    Julia Gillard has called for her accusers to show decency and apologise. But Julie Bishop who led the charge has said nothing and the media continues to give her a free ride on this and on the litany of mistakes she has made.

    Julie Bishop was the loyal deputy to both Malcolm Turnbull and Tony Abbott. She sided with leaders who took diametrically different positions on climate change and the need to address carbon emissions. She shows great flexibility in all things.

  • John Menadue. What does it mean?

    We have all been moved by the outpouring of grief and emotion by the deaths in Martin Place, the school children killed in Peshawar and eight children murdered in Cairns. The flood of floral tributes has been remarkable. We saw it only a few days earlier with the untimely death of Phillip Hughes. There was an even more remarkable outpouring with the death of Princess Di in 1997.

    But what does our response mean? How do we interpret these events?

    Let me try.

    We all have brokenness, loss and grief in our lives that so often we suppress. The recent public tributes are a means to release some of this personal anxiety we all have. In a sense it is almost a public therapy for something we don’t really understand but need to express about our own lives. There is something deep within each us that breaks through,unbidden, to the surface.

    We need ceremonies and rituals to help us express our grief. Sometimes those ceremonies and rituals are formal memorial services in a church, a synagogue, a mosque, a temple or a shrine. But for many an informal ‘memorial service’ with massed flowers shows the same purpose. It is a way of expressing both our grief and our respect. Ceremonies to mark death, like other ceremonies in our life, are very important milestones.

    We particularly respond to untimely deaths, particularly of children. They are lives of great or unknown potential that are cut short. These untimely deaths remind us of the fragility of life. Though we try to manage and organise our lives to limit risk and the unknown, the fact remains that there is a fragility and mystery about human life that is beyond our understanding.

    Perhaps in such public memorial services we are determined to show that evil will not triumph. We are determined to show that goodness and generosity, despite our shortcomings, is part of each of us and is essential in any decent society.

    In these informal declarations of respect and support, we are also asserting that human relationships are more important than economic prosperity and success. In effect we are saying that there is a dimension to our lives that is more important than the material.

    Perhaps we are also saying that the human person is precious and valuable. Some would say that it is sacred, that we all have a touch of the divine and when we plumb our humanity we will find the divine.

    In our daily lives, dying has become different. In the extended family the death of grandparents and the viewing of the body were common place. Our parents wore mourning clothes. With our nuclear family, much of that has changed. Death is so often transferred to the hospital where doctors and nurses are in charge. We have removed death from the common place. Something is lost.

    In the memorial of dying we want to hang on to a place, a cemetery, a war memorial or a road-side cross that can be the focus of grief. That is why we are likely to see a memorial erected in Martin Place and perhaps in Cairns. Like ceremonies, markers are needed in our lives.

    The mystery of life and death will always be with us. That is what these floral tributes say to me.

  • John Menadue. Normalising Crime.

    I was astounded when I read what Archbishop Antony Fisher told The Australian last week. The report said ‘Australia’s most senior Catholic cleric has proclaimed that families are more likely than priests to abuse children and rejected a church report that linked celibacy to sexual abuse. Archbishop of Sydney Antony Fisher said that celibacy could not be to blame for abuse, which occurred in every church, regardless of whether it was celibate. The thing about child abuse is most of it happens in families. It is an awful thing we hate to even touch on it, but it can’t be about celibacy because you look around society at the moment, it’s in every church, celibacy or not. It’s in many families and their not celibate, generally speaking.’

    The Archbishop is falling into a tendency we all have to normalize crime in our own group, church or community by saying that the rate of crime in our own group is no worse than in other groups.

    Cardinal Ratzinger who as Pope failed the Church so badly on sexual abuse of children used this argument at a conference in Spain in 2002 ”…the percentage of these (sexual) offences among priests is not higher than in other categories and perhaps it is even lower…less than 1%of priests are guilty of acts of this type. The constant presence of these news items does not correspond to the objectivity of the information or to the statistical objectivity of the facts”.

    Professor Patrick Parkinson of the Faculty Law at the University of Sydney   released last year a sobering Paper “Suffer the Teenage Children. Child Sexual Abuse in Church Communities”. Twice he reviewed the Catholic Churches protocol “Towards Healing”. He was a key adviser to the Catholic Church on sexual abuse issues. He is a remarkably well informed commentator. He has seen the problems close at hand and over several years.

    As he says in his Paper he terminated his work with the Catholic Church over the failure of the Salesians in Australia to address sexual abuse issues. He then called for a Royal Commission.

    In his Paper he acknowledges the patchy data on sexual abuse but the information pointed in one direction. The Catholic Church has a special problem which is outside the “normal”.

    He noted that at “a particular (Catholic) seminary in Melbourne 4.75 % of priests ordained between 1940 and 1966 sexually abused children”. Drawing on US data he concluded that “the rate of conviction (of these priests) is much higher than in the general population”.

    In comparing the Catholic Church with other churches in Australia he concluded, “When all explanations have been offered the rate of conviction of Catholic personnel does seem to be strikingly out of proportion with the size of this faith community compared with other faith communities”. Go to ssrn.com/abstract=2216264 for the Parkinson paper

    It is no help to try to distract attention from the problems that the Catholic Church faces  by saying that the Catholic Church is no different to others. As Parkinson points out ‘the conviction of Catholic personnel does seem to be strikingly out of proportion’

    To say nothing about the abuse of trust.

    This is not an encouraging start for the new Catholic Archbishop of Sydney

     

     

  • John Menadue. The Sydney seige and social misfits. Will we ever learn?

    I posted the following blog ‘Will we ever learn?’ on 27 October this year. Amongst other things it highlighted the domestic risks that would result from the Abbott Government’s decision to join the war in Iraq and Syria.

    Keysar Trad from the Islamic Friendship Association has today  described the hostage taker and killer as a ‘nutter’.It is also clear that there were numerous warning signs in the previous  behaviour of the attacker,

    John Menadue.

    The Coalition and conservative commentators have told us for years that international action by Australia in taking the lead on climate change would only be symbolic and would not really have any effect.

    But the Abbott Government has stood this argument on its head by urging and agreeing to join the war in Iraq and Syria. Our participation in this war will be militarily insignificant and symbolic– eight fighter jets, four support aircraft and 200 Special Forces. Our involvement won’t have any strategic effect. But the government wants to be seen to be ‘doing something’ .Whilst it may pay short term political dividends, it will not work in the longer term.

    With our symbolic act of joining in the war against IS we are making Australia less secure despite what Tony Abbott says. It is clear from opinion polling that Australians believe that our involvement in Iraq and Syria will make us more prone to attacks at home. The Canadians are experiencing that right now with social misfits and publicity seekers trying to make heroes of themselves. We are being bated into the use of more and more force against IS

    When intelligence officials and police are allowed to tell us openly what they believe, they tell us that we will be more vulnerable. The Chilcott Enquiry in the UK was told by the Head of MI5 that UK participation in the Iraq War substantially increased the threat of terrorism in the UK. A former head of the AFP in Australia told us several years ago that we faced the same risk because of our involvement in Iraq.

    We have been told many times that our security and economic future is in cooperation with our region. We have endorsed the US ‘pivot to Asia’, but now we are pivoting back to the Middle East again. Two of our key associates in regional cooperation and security are Indonesia and Malaysia. Neither of them or indeed any other significant countries in our region are committing their military against IS.

    Julie Bishop has now announced that we are to deploy 200 Special Forces to advise and assist the Iraqi military. She chooses to disregard the fact that the US spent billions of dollars to train the Iraqi army, but because of the sectarianism of the Iraqi Government, the Iraqi military collapsed and ran away from ISIS, abandoning its US supplied equipment? How absurd is it to think that our 200 Special Forces will make any difference.  But some people feel good, by ‘doing something’.

    The government is hoping, as Hugh White has said, that there will be a good, cheap and successful war against ISIS. But all the evidence is against that hope.

    • The US and other air forces will soon run out of targets. After three weeks of the air war in Afghanistan, former Secretary Rumsfeld said that the US air force had run out of targets. The RAAF may already be finding this out.
    • As Malcolm Fraser has pointed out, without a ground force and an end point, the war against IS will be a farce.
    • Allied forces in Iraq and Syria will only be there for the short term, but IS, in whatever form, will always be there.
    • In Vietnam, Iraq and Afghanistan, together with our allies, we started the escalation with military advisers, then bombing, and then limited ground forces and then large-scale ground forces. It will be the same again as our intervention flounders.
    • Foreign involvement in civil and sectarian wars never works. In the end ‘success’ depends on the motivation of the participants in the conflict.
    • The countries and groupings in the Middle East are a maelstrom of religion, ideology and tribal groups. We are taking sides in a constantly changing and complex political, sectarian and ethnic struggle. Hezbollah, the Kurds and the Assad regime were believed to be the ‘baddies’. Now it seems that they are the ‘goodies’ in opposing IS. Iran may yet turn out to be on the side of the ‘goodies’.
    • Tony Abbott has said that IS is an ‘existential threat to Australia’. Does he seriously think that IS represents a threat to our survival? If such a threat exists, why don’t nearby countries like Saudi Arabia, Jordan, Turkey and the Emirates join in a united front to oppose IS? Yet night after night we see Turkish tanks sitting on the hill side outside Kobari and refusing to intervene against IS.
    • We are appalled when we see public executions by IS fighters, but we  turn a blind eye when US drones directed from CIA headquarters in Langley direct hellfire missiles and kill scores of citizens at wedding celebrations in Yemen and Afghanistan. We ignore our own ferocious violence.

    Conservative governments have led us to our three most recent debacles in Vietnam, Iraq and Afghanistan – and they still keep repeating their mistakes. Will we ever learn?

    Until the leaders and the people of the Middle East address their own domestic and regional problems our intervention will only make things worse.

    There has been a history of Western intervention in the Middle East – colonisation, supporting authoritarian rulers, military occupation and exploitation of Middle Eastern land and resources such as oil. The CIA overthrew the democratically elected Mosaddegh government of Iran in 1953, for the benefit of the Anglo Iranian Oil Company, now BP.

    When will we ever learn?

    From what we are feeling

    Will we ever learn?

    As sorrows deepen.

  • John Menadue. The dog’s breakfast in co-payments has got worse.

    The government is trying to dump its co-payment mess on to doctors. If doctors decide not to absorb the reductions in the Medicare rebate, many will pass it on to patients and dramatically reduce bulk billing. What a mess!

    In justification for their ill-considered GP co-payment in the budget, the Minister for Health Peter Dutton and Prime Minister Tony Abbott kept parroting that we need some improved price signal in health in order to make our health system sustainable. But this argument is not valid. We have one of the best and most sustainable health services in the world. The Commonwealth Fund ranks Australia fourth in the world for the quality and efficiency of its health service after UK, Switzerland and Sweden. That is due to Medicare.

    That does not mean however that we don’t need to address some major problems in our health system.

    The main reason for our rising health costs is the ability of powerful health providers to extract monopoly rents from taxpayers and the community. These powerful providers exploit their market position in many ways.

    • The private health insurance industry receives a government subsidy of over $6 billion p.a. and through its actions weakens Medicare’s ability to control costs. Gap insurance has underwritten an enormous increase in specialist fees.Just look also at what has happened to health costs in the US as a result of private health insurance.
    • The AMA insists on fee-for-service for treatment of patients and resists any significant workforce reform, particularly for nurses.
    • The Australian Pharmacy Guild uses its political power to restrict competition.
    • Medicines Australia extracts high wholesale prices for its products.
    • The fragmentation of services between the commonwealth and the states increases costs and misallocates resources in favour of hospitals.

    So far all governments have not been prepared to challenge these vested interests. Instead the present government focuses on ill-considered co-payments  which would disadvantage low income people and discourage people from seeing their GP which results in higher specialist and hospital costs.

    In Australia co-payments contribute over $A24 billion p.a. to our health sector. These co-payments are the third highest as a source of health funding – after Federal and State funding.

    This amount of $24 billion p.a. or 17% of our total health funding is high by world standards. Australians pay a higher proportion of their healthcare costs through co-payments than citizens of most other OECD countries. The Commonwealth Fund has found that when healthcare spending is adjusted for the cost of living in Australia, we pay more in direct co-payments than all other counties surveyed apart from Switzerland and the US. Our annual health co-payments per capita are about $US750 compared with Germany $US600, New Zealand $US330 and the UK $US 310.

    The problem with our co-payments is not that they are low. It is that this whole area of co-payments lacks any rhyme or reason. It is a dog’s breakfast.

    Consider how the percentage of total funding from consumer co-payments varies.

    • Public hospitals 2.5%
    • Private hospitals 11%
    • Medical services 12%
    • PBS medicines 16%
    • Dental services 56%
    • Aids and appliances 69%
    • Non-PBS medicines 92%

    There is a wide variation in the impact of co-payments on people with different illnesses and disabilities. For example  people with conditions that can be largely treated by GPs or within the public hospital system, generally incur lower co-payments than those with conditions that require allied healthcare and over-the-counter medicines. This is the case independently of the length or severity of the illness/disability and its impact on both individuals and society. In fact, people with ongoing chronic conditions often end up receiving lower levels of subsidy for their healthcare than those with one-off or self-limiting conditions. Another result of this ad hoc and uncoordinated approach to co-payments is that some people receive almost all their healthcare free at the point of service, and others, with conditions which may be more serious or longer term, face crippling costs for their treatment. For example, someone receiving emergency surgery for, say, the removal of an appendix in a public hospital, can incur no out-of-pocket costs for their treatment, whereas someone with a long-term genetic condition such as Cystic Fibrosis can incur high ongoing costs. The result is a very inequitable allocation of healthcare resources which has a particularly negative impact on people with chronic conditions.

    This chaotic mess in co-payments is not surprising. These co-payments have been introduced without any coherence and therefore inequities and perverse incentives abound. Some services such as public hospital services are free. Some such as pharmaceutical benefits are capped by the government. Some, such as the co-payment for medical services below the safety net thresholds are open-ended; the public subsidy is fixed, leaving the user to bear an open-ended risk. Some such as the medical safety net provisions are proportional to the price of the service. Some safety nets are set on a family basis, others on an individual basis. Some are on a calendar year basis and others on a financial year basis.

    I addition to sorting out the dog’s breakfast of co-payments to ensure greater fairness and efficiency, it is important that we move away from the fee-for-service system by which doctors are remunerated. This type of remuneration promotes turnstile medicine or what is sometimes called ‘six minute medicine’.  FFS may be appropriate for occasional and episodic care but it is not appropriate for long-term and chronic care. We need a major review of remuneration practices in primary care with more emphasis on capitation and bulk charges for chronic care, to keep people well at minimum cost. The British single-payer system has many advantages. One advantage is as the Economist of May 31 this year put it ‘Doctors in the UK are paid to keep people well, not for every extra thing they do so they don’t make money performing unnecessary tasks and tests’.

    The way we remunerate GP’s is far more important for quality of care and efficiency than fiddling with co-payments.

    Even more important is costly specialist care, not the cost of  GP’s in primary care.

    The whole structure of co-payments needs to be reformed.

    And tackling the power of providers is the most important of all to ensure a sustainable health system. As an example just look at the present ‘debate’ over co-payments. It is dominated by the Government and the health provider, the AMA. The voice of the community is scarcely heard in the land!

     

  • John Menadue. Temporary Protection Visas and the Senate cross-bench.

    I wish that the Rudd, Gillard and Abbott Governments had done things very differently on refugee policies. But faced with the impasse at the present time, I welcome the compromise arrangement which the government has negotiated with the senate cross benches – two senators from the Palmer Group, Nick Xenophon, Ricky Muir, Bob Day and David Leyonhjelm. But like the curate’s egg it is good and bad in parts.

    As a result a negotiated package has been achieved that will enable the government to get the refugee processing system moving again to assess the claims of over 30,000 asylum seekers who are in detention or in the community with very restricted rights. The package includes

    • The introduction of Temporary Protection Visas (TPVs) which will grant three year residency for those found to have a legitimate refugee claim. At the end of that period they will not be guaranteed a permanent visa, but may re apply.
    • The introduction of Safe Haven Enterprise Visas (SHEVs) for five years if the asylum seeker spends that time either working or studying in a designated regional area whilst their claim is being processed.
    • There will be an increase in the humanitarian intake of 7,500 places over several years.
    • Asylum seekers on bridging visas will have the right to work.
    • All children in detention, except those on Nauru, will be released into the community.
    • Medicare will be made more readily available.

    This cannot be the end of the process, but I have no doubt that worthwhile progress has been made. The blockage in the system has been removed and processing will start. This is very important.

    It will be important to hold the government to account for this increase in the humanitarian intake to ensure ‘changed circumstances ‘does not result in a failure to implement the increase.

    In the past I have opposed TPVs for maritime arrivals because they leave the claimants in limbo about their future, they denied family reunion and did not deter asylum seekers as successive governments have suggested. But with 30,000 people already in limbo, some progress through TPVs would materially help their position. In a different political landscape, both in Australia and in countries from which asylum seekers have fled, it is not unreasonable to expect that over 80% of asylum seekers issued with TPVs will become permanent residents or citizens within the next ten years.

    Even with rights to work and some Medicare support, the large number of asylum seekers who will be moving into the community will present a major challenge for NGOs, churches and asylum seeker centres who generously support asylum seekers in their need. The government will need to urgently address this financial burden.

    There are other significant problems which will have to be addressed; the increased powers for defence and customs personnel; refoulment; compatibility with the Refugee Convention and judicial oversight.

    To cover its own failure, the ALP has said that the government was using children in detention as pawns in the negotiations. I understand that view and it is true that the government could have released these children at any time as also the last ALP government could have but didn’t.  But as part of a package the release of children is an excellent outcome, whatever the antecedents or background.

    The purists will not like this package. As a friend of mine said, he would not want to have these purists advocating on his behalf. ‘If I were starving, I expect I would die because these purists would deny me access to bread and water while fighting for my entitlement to a three-course meal’.

    I am surprised that the ALP didn’t take the opportunity to negotiate hard over the package. Instead it ceded asylum policy negotiations to the senate cross benches. What a sad abrogation of responsibility by the ALP to leave the outcome to Ricky Muir and others.

    I have written before about the abject failure of the Greens on both climate policy and refugees. On climate policy the Greens voted with the coalition in the Senate in 2009 to vote down Kevin Rudd’s Climate Pollution Reduction Scheme. Always the purists, the Greens wanted more than was on the table. Legislation was defeated in the Senate and we have gone backwards on climate policy ever since. The policy purity of the Greens and their incessant posturing has caused great damage to Australia on climate change.

    And the same is true on asylum seekers and refugees. Here again the Greens sided with the coalition in theSenate over two years ago to vote down theArrangement with Malaysia which the UNHCR said it could work with. The failure of the Senate to pass the enabling legislation after the High Court decision in 2011 meant that the Malaysian Arrangement failed. That triggered the enormous increase in boat arrivals in 2013. This led to Manus and Nauru. For this the Greens must bear a heavy responsibility. But they still continue to wash their hands of responsibility and parade their policy purity. Their posturing has delivered awful consequences for asylum seekers and refugees.

    It is also time both the ALP and the Greens showed some tactical nous. For the present, they have dealt themselves out of effective participation and negotiation on a very difficult but critical issue – the plight of 30,000 asylum seekers whose claims are waiting assessment.

    These amendments to the Migration Act must be seen as work in progress. There are many important issues that will hopefully be corrected with a change of government. There many important things that need to be done

    • Increase the humanitarian intake to at least 25 000 pa
    • Abolish mandatory detention which is cruel, expensive and does not deter.
    • Establish Orderly Departure Arrangements with Sri Lanka, Iraq and Afghanistan
    • Open more migration pathways, like 457 visas for persons who may be borderline refugees
    • De militarise our refugee policies and programs.

    A lot more must be done. But breaking the deadlock on the 30,000 forgotten people in detention or on bridging visas is an important step.

    As refugee advocates we have some hard thinking ahead.  To date we have failed comprehensively   to win improvements for people in great need. The perfect has become the enemy of the good. Needy asylum seekers are the losers.

    Sometimes harm minimisation is the best course, a course that the ALP and the Greens chose not to take on the Migration Act amendments.

    Aren’t 30,000 strangers in our land in need of help today, not in one or two years’ time!

  • John Menadue. Tony Abbott did not stop the boats.

    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. Outsourcing and redundancy at the ABC.

    Mark Scott has expressed concern at the pain being felt by staff losing their jobs and careers. He announced that he and his senior team would take a pay freeze for a year.

    When it was pointed out that there would not be sufficient staff left to fill the program schedule, some senior manager apparently announced that the money achieved through some of the budget savings would be used to commission some individual programs and short series from some of those very people who are about to be made redundant. So, the ABC management is proposing to sack long serving and loyal staff with proper jobs, and use their salaries to bring them back on short term contracts and commissions with no security of employment.

    The cuts will fall most heavily in program making areas. Over the past several years the ABC has closed its television production centres in Perth, Hobart and now Adelaide which has so upset Christopher Pyne. At the same time it has radically cut internal production in Sydney, until virtually the only in-house TV programs left are Compass and Catalyst. Now they are moving the outsourcing philosophy into Radio. The cuts will fall most heavily on staff in programs requiring depth of production, research and analysis; in TV and Radio News and Current Affairs, and in radio documentaries and features.

    Mark Scott says the ABC needs to target younger audiences. The ABC has been talking about that for decades. And the same commercial formula for doing so is being trotted out again: Make it shorter, make it lighter, make it cheaper, and if possible make it funny.  What was that about dumbing down?

    The intent it seems is to transform the ABC from a production house, reflecting the geographic and cultural diversity of the nation, into a commissioning and transmission agency, serving a few big commercial co-production houses, such as Southern star and Endemol.

    The difficulty with this model is that commercial co-production partners may cover their costs plus a few percent doing a deal with the ABC, but their real mark-up comes from selling the product on the global market. This means productions skewed to their commercial sales potential rather than editorial merit for Australia.

    The second consequence of this model is that with journalists and producers on casual and short term contracts, staff are going to be very timid about offending the powerful. This form of short term, run of show, contract employment poses a significant threat to independent vigorous program making, and to a free media. It risks the public purpose of the ABC.

    The major industrial problem facing staff is that the ABC has told them that all redundancies will be individually targeted. This breaks a long standing expectation of staff. As the cuts have come in waves every decade or so and staff numbers have shrunk from around five and half thousand to around three thousand, staff have been allowed to volunteer for redundancy, and where possible to arrange for staff who wish to go to substitute for staff who wish to stay, so long as the targeted savings can be met. This was generally done as a way of cushioning the pain and gaining maximum staff co-operation in a difficult situation. This time round management have pre-emptively declared No Voluntary redundancies, and No Substitutions. Faced with industrial laws that make striking illegal, except during a once in 3 year wage bargaining period, staff are faced with the prospect of risking punitive legal retribution if they protest.

     

     

  • John Menadue. Our Environment Minister is not going to Lima

    Almost all countries will have their climate change or environment ministers at the UN Climate Change Conference which commences this week in Lima, Peru. This conference is in preparation for the crucial conference on climate change in Paris next year.

    But our Environment Minister, Greg Hunt, will not be there. Tony Abbott is sending his Foreign Minister, Julie Bishop, but is also sending Andrew Robb, our Trade Minister to keep an eye on her. It is reported that Julie Bishop went ‘bananas’ over this insult to her.

    News reports suggest that Tony Abbott had no intention of sending  a minister to Lima. Julie Bishop asked for approval to go and was refused. When she asked a second time approval was given but only on the condition that Andrew Robb went with her. How very odd!

    But clearly Tony Abbott has major doubts about the reliability of Greg Hunt on climate change. As Michelle Grattan put it The Conversation on 3 December 2014, ‘In 2008 when the Coalition was committed to an emissions trading scheme, Shadow Treasurer Turnbull, Hunt, the environment spokesman and Bishop, the deputy Liberal leader, oppose Nelson’s desire to link an ETS to when the big emitters took action rather than to a specific date. In 2009 when Turnbull was leader, climate spokesman Robb … spectacularly repudiated Turnbull’s proposed compromise with the Rudd Government to get Labor’s ETS through parliament. Robb’s dramatic intervention, made during a long party room meeting on the highly contested issue, was a devastating blow to Turnbull’s leadership, which was under pressure over this stand on the ETS and his non-consultative style. Robb has documented the story in his book” Black Dog Days”. Turnbull quickly lost his job and Abbott became leader.’

    We have seen a consistent pattern by the Coalition in opposition and now in government to dismantle and defund almost attempts that have been made to address the threat which climate change presents to our planet.

    Even this week the NSW and ACT governments combined with researchers at the University of NSW’ Climate Change Research Centre, which predicted increasing hot days, longer dry spells, increased fire danger and fewer wet days.

    The science is trending overwhelmingly in one direction; that action on climate change is essential. But still the Abbott Government obfuscates and dissembles, even refusing to send the Environment Minister to the critical meeting in Lima.