Pearls and Irritations

John Menadue

  • John Menadue. What does Labor stand for? Part 4

    Ethical responsibility

    Those in prominent office should promote those qualities which draw on the best of our traditions and the noblest of our instincts.

    The duty of those with public influence is to encourage hope and redemption rather than despair and condemnation, confidence rather than fear. It is to promote the common good – to encourage us to use our talents. It is to respect truth and strengthen learning to withstand the powers of populism and vested or sectional interests. This would set a tone of public discourse which nurtures public institutions

    Business cannot hide behind the corporate vale. As the late Bernie Banton reminded us during the dispute with James Hardy over asbestos ‘it is people that make decisions, not corporations’

    Areas where we fall short in ethical responsibility include

    • Leaders who appeal to our worst instincts, e.g. dog whistling on refugees,
    •  Media-drenched commercialism and the values it projects.
    •  Executive salaries,
    •  Undue influence of vested interests, corporate lobbyists and political donors e.g. NSW ICAC enquiry.
    • Those in public office should help the community to deal with difficult problems which may require painful adaptive change, such as climate change, rather than provide the false comfort of ignoring or downplaying them.

  • John Menadue. What does Labor stand for Part 3

    Citizenship

    We are more than individuals linked by market transactions.

    Our life in the public sphere is no less necessary than our private lives. As citizens we enjoy and contribute to the public good. It is where we show and learn respect for others, particularly people who are different. It is where we abide by shared rules of civic conduct. It is where we build social capital – networks of trust. We need to behave in ways that make each of us trusted members of the community. ‘Do no harm’ is not sufficient.

    Citizenship brings responsibilities – political participation, vigilance against abuse of power and paying taxes.

    Areas where we fall short in citizenship include

    • Our withdrawal into the private realm –there are growing gated communities, private entertainment,
    • Use of private rather than public transport and resulting reluctance of influential people to support investment in public transport.
    •  Disregard of neighbours,
    •  Opting out of community through ‘vouchers’,
    • Government subsidies to private health insurance and private schools discourage the coalescence of socially mixed communities around shared hospitals and public schools.
    • There is a lack of respect in the language of denigration – ‘bogans’ and ‘losers’.
    • NGO’s have increasingly become part of government
    • People are valued as celebrities and their wealth rather than as contributing citizens

    Stewardship

    We have inherited a stock of assets or capital; environmental (forests/water), public and private physical capital (roads/ports), human capital (education), family capital (family and friendship bonds), social capital (trust), cultural capital and institutional capital (government and non-government institutions). That stock of assets must be retained and where possible enhanced.

    We must use our resources as efficiently and productively as possible.

    Areas where we fall short in stewardship include

    • Our infrastructure, particularly urban rail is dilapidated.
    • We are amongst the highest per capita carbon polluters in the world.
    • We are placing a heavy strain on the planet which prejudices our future. Despite the overwhelming scientific evidence on climate change we are still influenced by the sceptics who ignore the facts and cling instead to ideology.
    • We waste water and degrade the land.
    • We continue to log old growth forests
    • We are degrading the Great Barrier Reef

     

     

  • John Menadue. What does Labor stand for.  Part 2

    From values to principles

    The purpose and role of a Labor Government could be to give expression to the values set out below – to achieve as far as possible the ‘common good’.

    Values such as fairness, freedom, citizenship, stewardship and ethical responsibility would be generally accepted by most people. As the values are translated into practices however Labor makes a choice that can be further defined as principles that then lead to policies, e.g. the value of fairness can be expressed in the principle of a stronger link between contribution and reward- a link which has become severed by hugely disproportionate executive pay, high returns to rent seekers and financial speculators and the long head-start of inherited wealth.

    The following is indicative of a set of values and their expressions in principles which could underpin a Labor platform/policy statement.

    Fairness or equity

    A ‘fair go’ is primarily about economic opportunity.

    People should be provided with a good education and those who put it to socially useful ends should be rewarded. Governor Lachlan Macquarie was no socialist but his ‘tickets of leave’ gave the outcasts and underprivileged of this country another chance. We built a nation from many of this underclass. We must give a chance for newcomers and all people to have another opportunity.

    Fairness promotes social mobility and limits division and resentment.

    Fairness should not be restricted to education.

    The path to prosperity with fairness is through productivity and well-paid employment rather than government handouts. The Scandinavians have demonstrated that education and incentives for participation do produce fairness and economic prosperity.

    Fairness implies that we are tough towards ‘bludgers’, whether they be tax-dodgers, the vulgarity and indulgence of those with inherited wealth, protection from competition, government hand-outs and favouritism or cheating on social services.

    Fairness implies full employment as a macro-economic goal to ensure human capabilities are not wasted.

    Areas where we fall short in fairness include

    • neglect of early childhood education,
    • treatment of the needs of indigenous people and refugees,
    • diversion of education funding to wealthy schools,
    • neglect of public infrastructure
    • Inadequate ODA.  In Joe Hockey’s last budget we cut ODA to $5b per annum, the largest cut in spending. Yet we spend over $8b per annum on our dogs and cats. Does that reflect our values?

    Freedom

    We all have rights to the extent that they do not lessen the rights of others.

    Except where the rights of the vulnerable are at stake, the government should not intrude into the private realm.

    Denial of freedom does not happen overnight. It is eroded step by step.

    We must be vigorous in promoting our freedoms-freedom of speech, freedom of religion, the rule of law and free and fair elections

    The potential abuse of power should be minimized by the separation of powers and the separation of church and state and clear opposition to sharia law

    Areas where we fall short in freedom include

    • The growing power of cabinet and executive which is not adequately balanced by parliament. We have an ‘elected monarchy’.
    • We have no Human Rights Act.
    • We have reduced freedom as a result of counter-terrorism legislation.
    • The media increasingly fails to protect our freedoms and often facilitates abuse of power by lobbyists e.g. miners.

     

     

  • John Menadue. The Great Complacency

    Professor Ross Garnaut has spoken many times about our great complacency and our unwillingness to undertake the types of economic and social reform that we saw in the Hawke/Keating periods and in the early days of the Howard Government – think, GST.

    Have the golden days of reform gone forever?

    The former head of Treasury Ken Henry said that he has never known a period in which the standard of public debate on important issues is as bad as it is today. Ross Garnaut has spoken with obvious frustration about the ‘diabolical problem’ of sensible policies on climate change.

    In April 2012 Greg Dodds and I posted an article on this blog ’The Asian Century and the Australian smoko’. We argued that whilst we responded well to the opportunities in Asia for over a decade we went on ‘smoko’ from the mid-1990s. Our Anglo-Celtic both enriched and trapped us. Fear of Asia was promoted.  John Horward gave us permission to be ‘relaxed and comfortable’ again, to have a break from the Asian challenge and opportunities. The result was two decades of drift by business, universities, schools and the media in equipping ourselves for the region .Complacency set in.

    Ross Garnaut poses questions for us again…

    ‘Do we have a problem that requires business adjustment, income restraint and new reforms to lift productivity? Or is the Australian ‘she’ll be right’ approach to economic policy in the early 21st Century good enough? Economic modelling for today’s Forum by Victoria University’s Centre of Policy Studies suggests that Australia does indeed have a sizeable problem with the real prospect of falling living standards to 2020 if nothing is done to avert it.’

    Can we counter those vested interests in the community, those ‘diabolical problems’ that consistently run good policies off the rails? And there are serious obstacles to address. There are powerful vested interests that are hostile to risk taking and want to hold on to privileged positions. They don’t want reform and change.

    Media

    In our 24/7 media cycle the short-term, the partisan, the confrontational and personalities dominate. The attention span of the media on important policy issues is very short. Our Canberra press gallery, including the ABC, is more concerned about politics than policy. News Corporation, which controls 70% of the metropolitan newspaper circulation, runs a partisan agenda that is unprofessional and self-serving. Just look at its denialism on climate change. News Corp distorts and debases almost every public policy issue it touches. What an awful legacy Rupert Murdoch will leave!

    The mainstream media is a serious problem not only because of concentration of power but it still influences the agenda in other under resourced media. Social media, even bloggers are filling some of the vacuum but it is nowhere near enough.  Why doesn’t the ABC establish a high quality online policy portal committed to articulating the key issues that we face?

    Lobbying

    The World Economic Forum in its 2013/4 Global Competitiveness Report on ‘favouritism in decisions of government officials’ ranked Australia poorly, well behind such countries as Singapore,Sweden,Netherlands, ,Norway,Japan, Germany and the UK. In transparency in government decision making we also ranked poorly.

    So much of the influence on governments is not exercised in public and contested discussion. The secret lobbying in Canberra and the state capitals has shown how lobbyists can effectively twist the arms of ministers. Lobbyists know that they cannot win an open debate with the public, so they exercise their enormous influence in secret. Think of what the Australian Minerals Council has done to corrupt good public policy in the resources sector. Consider what happens in the health field with the secret influence of the AMA, the Australian Pharmacy Guild, the Private Health Insurance funds and Medicines Australia. We will never get worthwhile health reform until these secretive and powerful vested interests are publicly confronted and forced to publicly defend their positions. And beyond these few examples there is the influence of the Australian Hotels Association in promoting the scourge of alcohol. We need to address the destructive power of the lobbying industry and its corruption of the public interest and public debate. Favouritism in government decision making and a lack of transparency is a major obstacle to good policy making.

    Political donations

    Associated with the corrupting power of both in house and third party lobbyists is the ability of powerful and wealthy groups to win favours from politcians with political donations. The NSW ICAC inquiry has shown what charade donations have made of any sense of an open and honest public discourse. We need to consider the banning of all donations at both national and state levels. Our political system is being bought by wealthy vested interests.

    Think Tanks

    Think tanks should be providing us with independent and public advice on important public issues. But the most influential ‘think tank’ is the Institute of Public Affairs, which is secretly funded by wealthy companies like big tobacco and the mining sector. It runs phoney campaigns in service of wealthy private and secret funders. The Sydney Institute pretends that it is an independent forum, but never discloses the sources of its funding. These ‘think tanks’ that refuse to disclose their donors should be refused media access, certainly by the ABC, and denied tax deductibility for donations. If we are to have an honest and transparent public debate action must be taken against these phoney think tanks.

    Business Economists

    Most of the business economists that we see so regularly on TV or read in our newspapers are employed by the banks. The 19 member Committee of Australian Business Economists is dominated by bank and financial service employees. Some of these business economists make an important contribution to public debate on broad economic issues, but how often do they challenge the power of their employers who increasingly dominate our economy, particularly in the fast-growing area of superannuation and funds management.

    We used to have a number of independent “public intellectuals” usually from the universities. But with the exception of a few university people such as Professor Ross Garnaut, Professor Bob Gregory and Ian McAuley, these public commentators are few.

    With a few notable exceptions our climate scientists are remarkably tongue tired in the face of so much self-interest and crude ideology. Don’t they care about climate change? Do they feel that politics is beneath them?

    Dubious ‘contributors’ to this public debate are the large number of accounting and consulting firms who undertake ‘modelling’ to produce what their clients want. I am not sure how professional and independent some of this modelling is. Ross Gittins has described the problem of recent modelling on the effect on electricity prices if the Renewable Energy Target is abolished. He said ‘regrettably economic modelling has degenerated into a device for bamboozling the public’

    Leadership

    A key to the earlier periods of policy reform was political leadership supported broadly by business and the trade unions. I do think that we respond to strong leadership if we feel that the sacrifice is worth it in the national interest and that it is fair. Unfortunately today we so often have a lack of leadership and a partisan and coarse public dialogue.

    Strong and capable leaders will help to outflank the obstacles I have mentioned. But the obstacles are major reasons why complacency is winning the day.

    We are still enjoying the benefits of the reforms of the 1980s and 1990s. Can we shake ourselves free of our complacency and partisanship and stop fooling ourselves that ‘she’ll be right’.

  • John Menadue. NATO, Ukraine and Russia.

    Nato,Ukraine and Russia…Katrina vanden Heuvel Washington Post 10 September 2014

    If the United States and Europe were thinking rationally, the NATO summit in Wales last week would have been an opportunity to discuss a lasting resolution to the violent crisis in Ukraine, which has claimed thousands of lives and crippled the country’s economy. Instead, amid a fragile cease-fire agreement between Kiev and pro-Russian rebels in the east, the assembled world leaders used the summit for more belligerent talk and reckless saber-rattling, with their ultimate goal increasingly unclear. The goal seemed more preparing the NATO alliance for a new Cold War with Russia than exploring how to make peace, even as Moscow was helping to bring about the cease-fire agreement.

    The meeting was just the most recent disturbing example of how cavalierly and cynically the NATO leaders — including President Obama — have escalated tensions, while dismissing opportunities to bring the conflict to a reasonable conclusion quickly. Absent from the discussion in Wales, among other things, was any recognition of NATO members’ own roles in triggering the crisis. Despite the dominant narrative that Russia is to blame for Ukraine’s uncertain future, history tells a different story — one in which the West’s provocative behavior has had predictable repercussions.

    There would have been no civil war if the European Union’s leadership had not insisted on an exclusive association agreement that prejudiced Ukrainian industry in the east and trade with Russia, or if the United States and European nations had used their influence with the demonstrators to abide by the Feb. 21 agreement then-President Viktor Yanukovych signed, which would have handed more power to parliament and called for elections in December, or if the United States and Europe had been willing to work with Russia to restore the Feb. 21 agreement and calm worries in Crimea and the east about the rights of Russian-speaking Ukrainians.

    Instead the U.S. and E.U. have encouraged the most radical elements in the Kiev government in their campaign to subjugate the east with military force — to seek a military solution to what is essentially a political problem in a deeply divided and economically fragile Ukraine.

    Our responsibility goes beyond the immediate crisis, too. There would not have been such a concerted Russian nationalist response to the crisis had the West not sowed the seeds of suspicion and mistrust over the past 18 years by growing NATO’s presence in Eastern Europe, in spite of the assurances that Russia ostensibly received from the George H.W. Bush administration that “NATO will not expand one inch to the east.” Russia clearly views NATO expansion not only as provocative but also as a betrayal of an agreement, and it perceives NATO’s push toward its borders as an act of aggression — and Western leaders know it.

    In this sense, NATO expansion is not a consequence of tension with Russia; it is the cause. As George Kennan, known as the “father of containment,” warned some 16 years ago, NATO’s willful expansion would create lasting tension. “I think it is the beginning of a new cold war,” Kennan said in a 1998 interview with Thomas Friedman, reacting to the alliance’s pending additions of Poland, Hungary, and the Czech Republic. “I think the Russians will gradually react quite adversely and it will affect their policies. I think it is a tragic mistake.”

    In 2004, NATO admitted seven new members, including the Baltic States along the Russian border. Four years later, the George W. Bush administration failed to win acceptance for Georgia and Ukraine — a bid that faced significant opposition from Germany and France — but the alliance symbolically declared that the countries “will become members of NATO.”  Those actions have inevitably colored any developments.

    While there is no question that Russia at times has contributed to tensions in the region, what has unfolded was predictable and preventable. The West should have understood that an attempt to bring Ukraine into an exclusive arrangement with the European Union would spark deep, historical divisions within the country and itself, and raise Russian concerns. After all, we have seen this before.

    “Logic aside,” writes John Mearsheimer in Foreign Affairs, “Russian leaders have told their Western counterparts on many occasions that they consider NATO expansion into Georgia and Ukraine unacceptable, along with any effort to turn those countries against Russia — a message that the 2008 Russian-Georgian war also made crystal. Yet the hawkish outcry for a more confrontational stance toward Putin has yet to give way to common sense. Across the political spectrum, prominent figures are demanding harsher sanctions targeting Russia, as well as military assistance and NATO membership for Ukraine. These demands seem to increase regardless of what Moscow does and regardless of the fact that Russian cooperation is essential for the stabilization and rebuilding of the shattered Ukrainian economy. Never mind that Putin has just helped broker a long-sought cease-fire; sanctions, we are told, must be broadened and deepened. Punishing Russia is far more important than a political settlement in Ukraine.

    It is long past time for sober reasoning and comprehensive negotiations to end the bloody conflict. Fortunately, the parameters of a peaceful resolution are well established, and we have the cease-fire to build on.

    First and foremost, any possible membership of Ukraine in NATO or the stationing of NATO forces on Ukrainian territory must be firmly excluded. As I have written before, Ukraine’s chances for recovery depend on positive relationships with both Europe and Russia. There is only one way for Ukraine to stabilize, and that is as a bridge between Russia and the West, not a champion of either.

    Second, Ukraine should adopt a federal system that provides more autonomy for the eastern region and protects the rights of its Russian-speaking population. The E.U., Russia, and the United States should devise a joint plan to rescue the rapidly shrinking Ukrainian economy.

    Finally, the Organization for Security and Co-operation in Europe should place observers and peacekeepers to monitor progress in the war-ravaged east.This is a fateful moment. The cease-fire is a positive step, but it may well be short-lived. For now, with NATO and Russia both preparing for the worst-case scenario, it is more important than ever to stop the triumphalist rhetoric and refocus our efforts on ending the conflict, not escalating. Make no mistake: there is no military solution to this challenge. Only a reasoned dialogue and political settlement can put Ukraine on the path to long-term stability and progress.

  • John Menadue The Royal Commission into the Home Insulation Program – ’a dog’s breakfast.’

    In an article in Eureka Street on 8 September, Fr Frank Brennan described the Royal Commission report into the HIP as a ‘dog’s breakfast’. He described the reasoning behind Mr Hanger’s conclusion on commonwealth responsibility as ‘bizarre’. He added that the report was ‘inadequate and flawed’.

    See Frank Brennan’s comments at the end of this post.

    The pink batts issue has been dominated by party politicking, a relentless campaign by News Ltd and lazy journalism. The problems with the program were seized on at every opportunity to discredit the Rudd Government.

    I have long contended that the regulation of the home insulation industry is the responsibility, without any doubt, of state governments. (See my Blog of January 3, 2014 ‘Pink Batts – fact and fiction’). The states were and still are responsible for safety, however much the Royal Commissioner tried to shift the responsibility. He in effect said that the commonwealth should not have relied on the states to implement their own occupation and health safety laws, their own employment training programs, or their own building regulations. He said ‘To rely on the state and territory regimes to police their own respective workplace health and safety laws seems to me to have been misguided. ….’

    What an extraordinary thing to say. Any student of Economics I, Law 1 or Politics 1 would know that the states have clear responsibility in this area and that they jealously guard their territory. To say nothing of the responsibilities of employers!

    In all this misguided heaping of responsibility onto the commonwealth government, including the four deaths, we should also remind ourselves of issues that Michael Keating, Ian McAuley and I have raised in this blog.

    • There were 1.1 million installations completed under this program.
    • A CSIRO analysis found that the rate of fires (not deaths) under HIP was lower than previously.
    • 7% of installations had to be rectified which doesn’t seem a particularly high rate for the building industry.
    • One fatality was caused by a pre-existing fault; another electrocuted installer was employed by an electrician and the third death occurred when a contractor elected to work in oppressive heat.
    • It is suggested that the deaths occurred because the HIP was rushed. There certainly was a compelling reason for speedy implementation, but it is very problematical whether the four deaths would have been avoided if the commonwealth had taken more time.

    This has been a high politicised issue from the beginning. The Royal Commission report – the ‘dog’s breakfast’ – has not helped.It is reported to have cost $25m. It is one of the few promises that Prime Minister Abbott has actually kept!

    For the future a scheme like this might be better implemented if the program funds were paid directly to the homeowner as a reimbursement/subsidy after the insulation work was completed. This would have been much more likely to have avoided the commonwealth ever accepting responsibility for situations that it could never have prevented. But reimbursing the home owner would have been no more likely to have prevented those four deaths, assuming the relevant homeowners used the same contractors.

     

    Pink Batts – Frank Brennan – extracts from Eureka Street, 8 September 2014.

    This last week, we have seen the disastrous consequences with another royal commission which failed to take account of the role of state governments. The Royal Commission into the Home Insulation Program produced a report which is a dog’s breakfast. The mainstream media has been oblivious to the report’s glaring shortcomings, focusing more on the party politics of the blame game.

    That royal commission concluded that the Commonwealth when administering the program should not have relied on the states to implement their own occupational health and safety laws, their own employment training requirements or their own building regulations.

    The Commissioner, Mr Ian Hanger QC, reported, ‘To rely on the State and Territory regimes to police their respective workplace health and safety laws seems to me to have been misguided, as those regimes are largely reactive. That is, when an incident happens the workplace health and safety regulators or electrical safety regulators investigate, report and, if appropriate, take enforcement action. What was, in my view, required of the Australian Government with the HIP (Home Insulation Program) was the provision of some preventative measures to attempt to mitigate some of the obvious workplace health and safety risks endemic to the HIP.’

    And yet, the Commission went on to suggest that the Commonwealth should have considered having the states, rather than the Commonwealth, implement the whole program.

    The regrettable deaths of the four young men working on the Home Insulation Program were the result of problems in administration at the Commonwealth and State levels and in delayed, poor communication between Commonwealth and State officials, especially in Queensland where three of the four men worked and died.

    In reaching his bizarre conclusions, the royal commissioner received little help from government. He observed: ‘With very few exceptions, the public servant witnesses chose not to make any submissions. Quite extraordinarily, in my view, the Commonwealth chose not to make submissions when given the opportunity to do so. It made some desultory submissions in reply to the submissions of the pre-existing insulation business owners and the State of Queensland.’ A royal commission set up to investigate only the Commonwealth Government, especially when receiving inadequate co-operation from the Commonwealth Government, was bound to provide an inadequate and flawed report.

     

     

     

  • John Menadue. We ‘warn the Tsar of Russia’.

    In September 1892, the headline ‘The Hobart Mercury warns the Tsar’ did not threaten Russia sufficiently to attract a response or change its belligerent behaviour. I don’t think the Tsar thought it necessary to respond to people who have an exaggerated view of their own importance

    The Hobart Mercury over-reached itself. Australian Prime Ministers, particularly when they need a diversion from domestic issues, often do the same. There has been a lot of beating the drums of war and macho posturing lately. Perhaps we will soon see Putin-esque photos of a shirtless rider on his bare-backed horse.

    Despite all the international posturing what has really been achieved?

    • MH350 has still not been found, despite the Prime Minister telling us months ago that we had almost certainly found the black box. We have now decided to fund and contract out the further search for MH350. Why?
    • We projected ourselves quite naturally into the recovery of MH17, but it was the Malaysian Government and not the European governments that really delivered for us in the removal of 200 bodies by train and the retrieval of the black boxes. Thanking the Malaysians has been an afterthought.
    • We sent the AFP to Ukraine and the Netherlands to secure the crash site. They failed and had to be withdrawn.
    • We have become an ‘enhanced party’ in NATO.  What national interest is there in that?
    • By siding so deliberately with Japan in its dispute with China we have antagonised China, our ally in WW2
    • Now we seem exceptionally eager to commit Hornet aircraft to the war against IS in Iraq.  We don’t seem to learn from our mistakes and Tony Abbott now suggests that the failure of the Western involvement in Iraq from 2003 was the prosecution of the war rather than its flawed policy in the first place.

     

    As in the Hobart Mercury in 1892, our over-reach in foreign policy has led to extremist language. The Prime Minister has described the Islamic State (IS) as a ‘death cult’ and please ‘we should not give credence to people who are pure evil, pure evil’.  He added ‘people have been radicalised and brutalised through contact with this death cult’. He added further ‘this mob, as soon as they have done something gruesome and ghastly and unspeakable, they are advertising it on the internet’.

    Nothing could justify the barbarism that we have seen from IS in Northern Iraq, but Muslims would remember, even if Tony Abbott does not, the centuries of barbarism against Muslims.

    • In 1099 the first Christian crusaders stood ‘knee deep in blood’ of Muslims and Jews after the capture of Jerusalem.
    • The Muslim expulsion from Andalusia.
    • Tens of thousands of Muslim women were raped in Bosnia 20 years ago
    • We stood aside in 1995 from the massacre of Muslim men in Srebrenica.
    • Ethnic cleansing went on in Bosnia for years before the West intervened.
    • We cooperated in the invasion of Iraq in 2003 which George Bush called the new crusade. It resulted in the death of hundreds of thousands of Iraqi people and the break-up of their country which has helped spawn IS.
    • More recently have we really expressed sympathy for the death of over 2,000 Palestinians, mainly civilians in Gaza? Israelis, yes. But Palestinians!
    • CIA officers in control rooms in Langley, press buttons for predator drones to kill insurgents and many civilians in Pakistan and Yemen. There is no blood on their hands like we have seen on the hands of IS killers. But is mechanised killing OK?
    • We did nothing for years about our good friends in Saudi Arabia and other Middle East countries who funded the Sunni rebels.
    • For the best part of a century foreign companies have exploited the vast oil resources of the Middle East.
    • We have been invited to join ‘team Australia’ but many Muslims feel it is directed against  them and  casts doubts on their patriotism

    We should not be surprised that some young Muslim men have been radicalised. In 2004 after the train bombing in Madrid the Commissioner of the AFP warned us and said ‘If this turns out to be Islamic extremists responsible for this bombing in Spain, it’s more likely to be linked to the position that Spain and other allies took on issues such as Iraq’.

    To avoid responsibility for the response of young Muslim men, John Howard and now Tony Abbott are repeating at almost every opportunity that ‘would-be terrorists don’t hate us for what we do but for who we are and how we live’. What tosh. They will judge us by our actions…what we do.

    Some young Muslim men are responding to the humiliation of centuries in unacceptable brutality. Yet when ethnic cleansing of Christians and Yaziidis occurred in Iraq and when American hostages were murdered in Syria, our response was immediate.

    Where is our even-handedness in resisting violence and injustice in all its forms against all people? It is time our leaders looked at the history of foreign intervention in the Middle East and the great injustice that has been done. We are now reaping the harvest of what we have sown.

    Overreach, like the Hobart Mercury’s posturing 120 years, ago is not serving us well.

  • John Menadue. MH17 – At last a thank-you to Malaysia may be on the cards.

    In ten days’ time, Tony Abbott will be visiting Malaysia and India.

    The visit to Kuala Lumpur will at last be an opportunity for him to thank on our behalf the Malaysian Government’s significant contribution to ‘Operation Bring them Home’.

    Without fanfare the Malaysian Prime Minister secured two key outcomes that have been of great benefit to Australia and others who suffered losses as a result of the shooting down of MH17. The first major outcome was the release from rebel territory of the refrigerated trains that carried over 200 bodies out of rebel territory. The second major outcome that the Malaysian prime Minister secured was the handover by the rebels to the Malaysian Government of the black boxes.

    Efforts of other parties particularly the Dutch Government and our own Australian Federal Police were helpful but the substantial breakthrough was organised by the Malaysian Government.

    Yet in his overseas travels to the ‘Anglosphere’ Tony Abbot has been almost everywhere except visiting the one country that has been of the greatest help to us. For all our talk about the importance of Asia out focus is almost always Europe. That has occurred also on the Russia/Ukraine confrontation which is overwhelmingly a European issue.

    Media headlines don’t necessarily make for a good foreign policy and particularly relations with countries in our region. And by the way, in that other diversion from the budget, nothing has yet been found of MH370 although Tony Abbott told us in April that he was confident that we had found the black boxes.

    In addition to acknowledging Malaysia’s major role in ‘bringing them home’, thanking the Malaysian Government will also be a useful way to put more ballast in the relationship with the Malaysian Government particularly after the intemperate remarks that Tony Abbott made about Malaysia’s human rights record.

    Justifying his opposition to the agreement with Malaysia over asylum seekers, Tony Abbott said in June 2011 in Parliament ‘Why would the Prime Minister send illegal arrivals to Malaysia where they could be detained and tagged, when she can’t guarantee the standard and accessibility of medical care and when she can’t guarantee the access to school for the children‘. Tony Abbott then went on ‘The one thing that is absolutely certain about this deal is that this Prime Minister, this Minister and this Government cannot be sure that boat people sent to Malaysia will be treated humanely.’

    A gracious and earlier thank you to Malaysia over MH17 would have been most appropriate and helpful in many ways. But better late than never.

     

  • John Menadue. Who owns Medibank Private (continued)

    In my blog of August 14 I examined the question of who owns Medibank Private (MBP) particularly in light of the Abbott Government proposal to privatise the business. This is not an idle question or an academic issue only. MBP has 3.5 million members and the government has estimated its sale value at $4 billion.

    The Government has now announced that MBP will be sold by Christmas

    It is clear that for many years it was assumed that the policy-holders/members owned MBP. That is clear from an examination of the accounts and the comments of a former chairman of MBP. John Deeble who was an architect of Medibank/Medicare and who was a director of the Health Insurance Commission which operated MBP put the issue as follows ‘The question of ownership in 1976 (when MBP was established) wasn’t raised because it was never considered that the government owned MBP.’

    The Commonwealth Government put $10 million as seed capital into MBP. This amount was repaid. The operating capital of MBP over the years was then contributed by the members through accumulated profits… No further capital contribution by the Commonwealth Government was made until 2005 when the Howard Government injected $85 million into the business. This amount has remained unchanged for nine years.  Last year MBP paid a dividend of $450m to the government. In one year the government received in a dividend more than five times what it had contributed in equity.

    In addition to the policy issues, it is also important to consider the legal advice which has been offered to the Commonwealth Government.

    In 1981 the Fraser Government considered selling MBP. According to Cabinet documents that have been released, the issue of selling MBP was considered by the Fraser Government’s Expenditure Review Committee – ‘the razor gang’. Members of this committee were Phillip Lynch, Margaret Guilfoyle and John Howard.

    The government’s legal adviser was the Attorney General’s Department which together with the Government Actuary and the Department of Health advised the ‘razor gang’ that the Commonwealth government did not own the assets of the Health Insurance Commission. We know from publically released Cabinet documents that on 19 March 1981 the Expenditure Review Committee decided that ‘the Commonwealth does not in any legal sense have equity in the Health Insurance Commission or its assets’.

    Three days later the Committee recommended to Cabinet that the proposed sale of MBP be abandoned. And it was abandoned.

    In 1988 the Hawke Government was contemplating the sale of MBP. The chairman of the Health Insurance Commission set out clearly in the authority’s annual report at that time that the Commonwealth had no beneficial rights in the fund’s assets.

    It is hard to see that anything has materially changed since 1981 when the clear view of the Fraser Government, based on legal advice was that MBP was owned by its members and not the Commonwealth government.

    The 3.5 million members of MBP have a major interest in this business which the Commonwealth Government now values at $4 billion.

    According to Peter Martin in the SMH today, policy holders are petitioning the government for ‘free shares’. This would seem essential but will it be fair? We know that there are a lot of hanger’s on clipping the ticket- co-lead managers, co-managers, brokers, advisers, lawyers and MBP executives. They will all be making a motza. But as for the members!!

    I am indebted to George Lekakis and The New Daily for the work they have undertaken on the ownership of MBP.

  • John Menadue. Refugees and asylum seekers..a re-think on Temporary Protection Visas.

    I have long argued that Temporary Protection Visas (TPVs) should be rejected on the grounds that they don’t deter asylum seekers, people are left in limbo and because TPV holders could not sponsor family which resulted in risky boat journeys by women and children.

    It is time to think again about TPVs.

    At the present time there are over 30,000 asylum seekers in detention or in the community awaiting refugee assessment. That caseload is the result of the large influx of boat arrivals following the collapse of the Malaysian Agreement and the refusal of the Coalition and the Greens to agree to changes to the Migration Act which would have helped give effect to the agreement made with Malaysia.

    The current outstanding caseload is the highest I can recall. The previous highest number was 19,600 after Tiananmen which was a very homogeneous group.

    The large caseload of over 30,000 people from a variety of countries will take over three years to process, if all goes well!  We need to urgently consider ways to reduce this lengthy process. The introduction of TPV’s would help.

    Despite the often contentious debate on TPVs in Australia, giving a person a form of temporary protection, depending on the specifics of the arrangements, may be consistent with Australia’s obligations under the Refugee Convention. A number of countries provide some form of temporary protection alongside permanent protection arrangements. For example, people granted asylum in the US must wait one year before applying for permanent residence.

    The UNHCR acknowledges that, at times, temporary protection may be the most appropriate arrangement. For example, in circumstances where there are mass influxes (generally involving larger numbers than experienced by Australia), temporary protection may be a valid tool in ensuring protection is available for asylum seekers while allowing authorities the breathing space to more fully examine and determine the need for  permanent protection and stay in a country at a later stage.

    The Coalition Government had planned to reintroduce a form of TPV’s for irregular arrivals. But before the Senate changed on July 1, the ALP and the Greens defeated a proposal to reintroduce TPV’s. As a result of this political stalemate the government decided to use the existing Temporary Safe Haven (TSHV) and Temporary Humanitarian Concern (THCV) visa instead of TPVs.

    Asylum seekers for whom potential protection issues are identified (and satisfactory health and security checks completed) will be progressively placed on THSVs. They will then be granted a THCV for up to three years. If the assessment of protection claims does not identify any ‘potential protection issues’ asylum seekers will be placed on bridging visas. In this way the government has moved away from both the statutory and non-statutory protection visa assessment arrangement but has taken steps to ‘temporarily resolve’ cases quickly through the use of existing visa mechanisms. As the current arrangements apply, however, it would appear that many asylum seekers will remain in a state of limbo with neither a decision on their protection claim nor, if people are not refugees, on their removal. The consequences of this are that people could remain indefinitely on some form of temporary visa without a final determination of refugee status with the inevitable long-term impact this has on mental health. Extensive and expensive litigation is inevitable.

    This form of temporary status only delays a decision on the asylum claim for some time. Such an arrangement is not sustainable in the long term from the social wellbeing of asylum seekers, the cost involved as well as concerns of the broader community.

    At some point a final refugee determination needs to be made, whether it leads to temporary or permanent stay. It is quite unreasonable, where Australia has accepted that its protection obligations have been engaged, to allow people to remain in a state of limbo. It is cruel and destructive.

    In his evidence to the Human Rights Commission the Minister for Immigration and Border Protection said that asylum seekers would have trouble having their claims processed until he could offer a ‘visa product’ that only gave temporary residence. He added the absence of TPV’s at present ‘removes the possibility of considering alternative options for those currently on Christmas Island or elsewhere in Australia who arrived before July 19 2013’

    It is to be hoped that the ALP and possibly the Greens might sit down with the government and try to negotiate a satisfactory compromise.

    Negotiations to resolve this issue could include

    • The length of the visa (three to five years),
    • The assessment process at the end of that period.
    • What happens for people re-assessed and found to be refugees again?
    • Some sort of re-entry rights for TPV holders leaving the country for a short period.
    • The nature of benefits offered to people whilst on TPVs.

    The change of government and the large case load of 30,000 do require cooperation to obtain an acceptable compromise. TPVs are not ideal but they would be preferable to the present arrangements. Major effort is required to process the large caseload as quickly as possible.

  • John Menadue. The Iraq disaster – reaping what we have sown.

    The seeds of the disaster in Iraq were sown long ago. We are now reaping a very bitter harvest.

    A major contributor to the upsurge in violence, terrorism and extremism in Iraq is the sense of outrage that many young Muslim men feel about the invasion of their country by successive Western powers, including Australia.

    The Howard Government and News Corporation which supported our participation in the coalition of the willing must bear a heavy responsibility for the unfolding horror.

    I have set out below an article by Tony Walker in The Australian Financial Review of 29 March, 2003, headed ‘America’s hard history lesson’. I have also a link below to an editorial in the National Catholic Reporter of only a few days ago, entitled ‘Editorial: Path of destruction in Iraq began in 1991’

    Both articles draw attention to the futility of earlier Western interventions in Iraq.

    In 2004, Mick Keelty, the AFP Commissioner warned us that our involvement in Iraq made us a greater target for terrorism. In 2010, The Head of UK’s MI5, Baroness Manningham-Buller, told the Chilcott Inquiry that ‘ Our involvement in Iraq radicalised … a whole generation of young people, … who saw our involvement in Iraq, on top of our involvement in Afghanistan, as being an attack on Islam.’

    George Bush, Tony Blair and John Howard were obviously unaware of the history of Iraq. We are now seeing a catastrophe because of leaders who were unable to learn from history.

    John Menadue.

     

     

    AUSTRALIAN FINANCIAL REVIEW

    SAT 29 MAR 2003,

    AMERICA’S HARD HISTORY LESSON

     

    By: Story Tony Walker, DOHA    

    Through the centuries, the Middle East has proved hostile territory to invaders from the west and north. Even if the invaders won the battles, none, ultimately, won their particular war.

    ‘The people of England have been led in Mesopotamia [what is now Iraq] into a trap from which it will be hard to escape with dignity and honour. They have been tricked into it by a steady withholding of information … Things have been far worse than we have been told, our administration more bloody and inefficient than the public knows. It is a disgrace to our imperial record, and may soon be too inflamed for any ordinary cure. We are today not far out from disaster.’

    That dispatch was written for The Sunday Times by its special correspondent T.E. Lawrence (Lawrence of Arabia). It appeared on August 22, 1920. How extraordinary that the same words could be published today and seem almost contemporary, depending on your point of view.

    What Lawrence was talking about was the irredeemable arrogance of British colonial rule although he might just as easily have been referring to the consequences of a new American unilateralism. He was not talking about an all-out war, like the one we are witnessing now, but about the aftermath of conflict, namely World War I, in which the Ottoman empire crumbled and was replaced across the Middle East by Pax Britannica. In Mesopotamia it was no benevolent pax; far from it.

    As Iraq braces for a further intensification of a conflict whose aim is to rid the country of its leader and his regime, Iraqis must fear that the war itself will be only part of the horror. If history is a guide, war will be followed by an uncertain possibly bloody aftermath.

    Ten thousand Arabs were killed, according to Lawrence, by the British military governors in Baghdad in putting down an uprising in the summer of 1920, two years after the end of WWI.  ‘We said we went to Mesopotamia to defeat Turkey. We said we stayed to deliver the Arabs from the oppression of the Turkish government, and to make available for the world its resources of corn and oil … Our government is worse than the old Turkish system,’ Lawrence wrote.

    Britain’s occupation of Mesopotamia might not have ended in the disaster predicted by Lawrence, but the clumsy redrawing of the map of the Middle East under the Treaty of Sevres by the ‘Great Powers’ actually, the dividing up of WWI spoils contributed in no small way to the general volatility of and latest convulsion in the region.

    Whatever happens in Iraq over the next days, weeks, months and years, it requires a level of optimism to believe that good will necessarily come from the destruction that is being visited on Iraqis and their country.

    Baghdad’s bloody history is not encouraging. Built in 762AD by the Abbasids, it has endured war and conquest repeatedly. It was sacked by the Mongols in 1258, the streets turned into rivers of blood, the alleyways filled with corpses. It fell to Tamerlane in 1401. The Persians seized it in 1508, then it was captured by the Ottoman Turks in 1534. It was recaptured by the Persians in 1623, before the Ottomans regained control in 1638 for the next three centuries.

    While it might be argued that no fate is too dreadful for Saddam Hussein, to achieve such a desirable result as his demise it should not be necessary to raze cities. You shudder to think what Iraq and its people will look like if the bombing continues for a few more weeks, followed by an assault on Baghdad itself. The errant missiles that slammed into a suburban Baghdad market on Wednesday, killing 15 civilians and wounding many others, are unlikely to be an isolated tragedy, even though the US has said repeatedly wrongly, as it turns out that the precision of modern weaponry makes this strike the military equivalent of laser surgery: no blood, no scars. US Defence Secretary Donald Rumsfeld sounds more like Dr Strangelove every day.

    Speaking of Rumsfeld, his observation on Tuesday that the war was much closer to the beginning than the end was a belated nudge towards candour in light of the obvious that Iraqis, whatever they think of Hussein, are resisting more determinedly than expected.
    It’s interesting to note here that last week the Americans, repeating their mantra of ‘shock and awe’ to describe the initial bombing campaign, were telling people to stay in their homes and await further instructions while exhorting the Iraqi military to surrender. Now the message to people, especially in the southern city of Basra, is to rise up against their oppressors. Sceptics might conclude this is an admission that the undermanned invaders their supply lines stretched, their ability to secure their rear shaky need some help on the ground.

    If there is a querulousness in the latest statements by US officials it is quite simply because, whatever they pretend, things are not going according to the script. The regime has not imploded, the populace has not risen up, the liberators are not being welcomed with hearts and flowers. It is entirely possible that when the blowtorch is applied to Baghdad, a horrible regime will indeed collapse, or shrivel up in its burrows deep below the city. But on the evidence so far, it seems unlikely the Iraqi citadel will fall without a fight.
    In the meantime, George Bush, Tony Blair, John Howard and their advisers might reflect if it is not too late on some historical amber lights, starting with the Crusades, a campaign 900 years ago to liberate the heathen and enlighten them in the ways of Christianity (note that word: liberate). It failed.

    Lebanese writer Amin Maalouf remarks in his book The Crusades Through Arab Eyes that ‘the Arab world simultaneously fascinated and terrified by these Franj [Frankish invaders], whom they encountered as barbarians and defeated but who subsequently managed to dominate the earth cannot bring itself to consider the Crusades a mere episode in the bygone past. It is often surprising to discover the extent to which the attitude of the Arabs (and of Muslims in general) towards the West is still influenced, even today, by events that supposedly ended seven centuries ago.’

    Whether Westerners believe reference to the Crusades by Hussein or Osama bin Laden to bolster support to be legitimate, these historical events do resonate in the minds of many Arabs as if they happened yesterday.

    As the editor of the London-based Arab newspaper Asharq Al-Awsat said in one of this week’s more acute observations: ‘I think this is an emotional time rather than a rational time.’

    Princeton University professor and Middle East scholar Bernard Lewis noted in a 1990 essay, ‘The Roots of Muslim Rage’, published in The Atlantic Monthly, that just as blind Arab prejudice about the West weighed heavily, so Americans functioned in a fog of ignorance about the Muslim world. When Lewis wrote then that American policy had not suffered disasters in the Middle East comparable with those in South-East Asia or Central America, he could not have imagined that things would change so dramatically in a decade or so.

    Regime change was but a twinkle in the eyes of Richard Cheney, Paul Wolfowitz, Richard Perle and Donald Rumsfeld, and there was no sign of a malleable occupant in the White House.

    ‘There is no Cuba, no Vietnam, in the Muslim world, and no place where American forces are involved as combatants or even as “advisers”. But there is a Libya, and Iran, and a Lebanon, and a surge of hatred that distresses, alarms and above all baffles Americans,’ Lewis wrote.

    The bafflement is set to deepen in fact is deepening, as it seems that since September 11, 2001, Americans have lost a sense of proportion. Certainly normal prudence has been jettisoned.

    Among the more frequently cited historical lessons about the perils of Western hubris in the Middle East is the experience of Napoleon Bonaparte. Napoleon may have been the world’s most brilliant general, but he suffered his worst defeat in the Middle East when his forces were repelled in 1799 in a siege of a stronghold of the Ottoman Turks at Acre, in what is now Israel. Attack after attack failed, and hundreds of French soldiers died in the process. Napoleon eventually retreated to Cairo with a decimated army.

    Accounts of the siege of Acre are not recommended bed-time reading for Bush, Blair and Howard. Blair, whose troops are laying siege to Basra, may draw some encouragement from the British experience in Mesopotamia during WWI. British troops occupied Basra in 1915. By 1917, they had control of Baghdad, and a year later they took Mosul. By the end of the war they held the whole of Mesopotamia. That was when the real trouble began as nationalistic Arabs formed anti-British secret societies. Riots broke out in 1920.

    These are the events that Lawrence, doubling as journalist and agent for British military intelligence, described in his dispatch for The Sunday Times. His final paragraphs make interesting reading in light of current events, especially the need for the US to rush additional troops to the region to cope with nagging Iraqi resistance.

    ‘We have not reached the limit of our military commitments,’ Lawrence wrote. ‘Four weeks ago the staff in Mesopotamia drew up a memorandum asking for four more divisions. I believe it was forwarded to the War Office, which has now sent three brigades from India. If the North-West Frontier cannot be further denuded, where is the balance to come from? Meanwhile, our unfortunate troops, Indian and British, under hard conditions of climate and supply, are policing an immense area, paying dearly in lives for the wilfully wrong policy of the civil administration in Baghdad.’ And, in conclusion: ‘We say we are in Mesopotamia to develop it for the benefit of the world … How long will we permit millions of pounds, thousands of Imperial troops and tens of thousands of Arabs to be sacrificed on behalf of colonial administration which can benefit nobody but its administrators?’

    All this underlines just how complicated will be the task of pacifying Iraq and then reconstructing it, which is why there has been such a premium on a swift military victory causing minimum civilian casualties and avoiding large-scale destruction of infrastructure. That prospect has faded. A viper’s nest has been stirred. The legacy of bitter conflict will further contaminate what is in any case a poisonous cocktail dating back to the days of British rule.

    As a paper on regional fallout from a war in Iraq by the Middle East program at the Royal Institute of International Affairs (Chatham House) points out: ‘Iraqi politics, from the creation of the state in the aftermath of World War I, have been dominated by the deployment of organised violence by the state to dominate and shape society; the use by the state of oil revenue to give it autonomy from society; and the recreation of ethnic and communal divisions within Iraqi society. The degree to which these dynamics can be overcome will depend upon the extent and nature of external influence in the aftermath of regime change. This in turn is dependent on the way war is waged.’

    The signs at this early stage are not promising. These are worrying moments for members of the coalition of the willing, no matter what sort of face they seek to put on progress in the war. History is not necessarily a comforting guide.

     

    The National Catholic Reporter, editorial, August 25, 2014.

     http://ncronline.org/news/global/path-destruction-began-1991

  • John Menadue. Scott Morrison at the Human Rights Commission.

    Minister Morrison, assisted by the Secretary of his department, continued his aggressive ways at the hearing on August 22.

    He said that his policies discouraged asylum seekers risking their lives at sea. He described himself as the champion of the voiceless, ‘the ones that are at the bottom of the ocean’.  He clearly wants to occupy the high moral ground.

    But was it really concern about deaths at sea which motivated his campaign against asylum seekers arriving by boat? Wikileaks reported that ‘a key Liberal strategist told the US Embassy in November 2009 that the boats issue was “fantastic” for the Coalition and ‘the more that came the better’ (SMH 10 December 2010).

    In Opposition the Coalition did not want the boats to stop. It did its best to ensure that the Labor Government did not stop the boats. That is why the Coalition sided with the Greens to block the agreement with Malaysia. The collapse of that agreement set in motion a dramatic increase in boat arrivals that ultimately led to Manus and Nauru.

    Scott Morrison’s concern for deaths at sea was not reflected in numerous comments he made in opposition to demonise asylum seekers. He told us that asylum seekers bring ‘disease’, everything from TB and hepatitis C to chlamydia and syphilis. He told 2GB that boat arrivals bring ‘wads of cash’ and large displays of jewellery. He urged his parliamentary colleagues to ‘ramp up the question to … capitalise on the anti-Muslim sentiment’. He described as a ‘government-funded junket’ Commonwealth government assistance for an 8-year old boy whose parents had been drowned off Christmas Island. He complained about the cost of holding funerals in Sydney for asylum seekers who had died off Christmas Island.

    That was not the moral high ground. But If Scott Morrison now feels a sense of moral responsibility that is to be welcomed.

    At the Human Rights Commission Scott Morrison avoided answering the question whether detention of children, or adults for that matter, deterred boat arrivals. He should have said, but didn’t, that there is no evidence that mandatory detention deters boat arrivals. We now know very clearly that what has deterred boat arrivals was not mandatory detention but government policies denying resettlement in Australia for any person who come by boat. It was the Rudd Government that started taking us down this path. That is why boat arrivals stopped and not because of mandatory detention.

    Both Scott Morrison and the Secretary of his department took exception to the President of the Commission, Gillian Triggs characterising the detention centres as prisons. The detention centres may not have armed guards, but they are worse than prisons. First, the detainees are not convicted criminals and they are not illegals. They are overwhelmingly vulnerable people seeking freedom from persecution. Over 80% of boat arrivals have been found to be genuine refugees. But not being criminals or illegals, we put them in hell-holes where many of them go out of their minds.  For innocent people the result is worse than being in prison.

    Second, we locate these detention centres in remote places with the clear intention of making it very difficult for detainees to have contact with friends, family or advisers. We are frightened that if the community hears their true story, we will show more concern and compassion. So we lock them up in remote places where we cannot hear their cries. Inmates at Long Bay are treated better than that.

    There is a major problem when the Minister for Immigration is both gaoler and guardian of children. A sensible start to winding back this appalling situation in the detention of children is for the minister to separate his roles.

    More importantly we need to quickly wind back mandatory detention for almost all asylum seekers. It punishes but does not deter. The evidence is quite clear on that. Unfortunately a succession of Immigration Ministers have pretended they are political tough guys by locking up both adults and children.

    What is more there are large savings to be achieved in winding back mandatory detention. Immigration detention costs over $3b per annum. Over $2b could be saved instead of filling the pockets of Serco, Transfield, the Salvation Army and others. The Commission of Audit pointed to the enormous differences in the costs of detention. For offshore detention it was $440,000 per head in 2013-14.; for on shore detention it was $ 239,000 and for community detention it was$ 90,000.  The most cost effective and the most humane is release into the community on bridging visas which cost $22,000 per head. In 2013-14

    Humanity and cost saving points to ending mandatory detention. Few comparable countries mistreat asylum seekers the way we do.

    Just as we now have a Royal Commission on sexual abuse I am sure that down the track we will have a Royal Commission on our treatment of asylum seekers.

  • John Menadue. Keep trucking!

    At the hearings of the Royal Commission into Institutional Responses to Child Sexual Abuse in Melbourne last week, Cardinal George Pell is reported as saying that if the driver of a (trucking company) sexually assaulted a passenger they picked up along the way ‘I don’t think that it is appropriate for the .. leadership of that company be held responsible’.

    As a citizen I was angered as most people were by these comments. As a Catholic I was ashamed.

    If any trucking company, or indeed any organisation, had a record of sexual abuse like the Catholic Church I would expect that the leadership would either resign or be sacked. Responsibility cannot be avoided as Cardinal Pell suggests

    The Catholic Church faces a systemic problem that Cardinal Pell seems unable to come to grips with. In a submission with colleagues to the Royal Commission, we focused on that systemic problem, including the way bishops are chosen, church structures and an unaccountable male clerical culture. The problems go far beyond the individual truck driver or priest. This submission can be found by clicking on the website at the top left hand of this page, then clicking on religion, and then clicking on the submission of November 2013.

    It is hard going in the Catholic Church these days. For months the ugliness of the Church has been on display. But there is also great beauty, the saints, the art and particularly, the selfless service of the nuns day in and day out all around the world. The Catholic Church has kept the Christian faith alive despite its many blemishes. In my mind it is still the greatest influence for good in the world.

    Whilst the Catholic Church celebrates the Eucharist, I will be there.

     

  • John Menadue. The Bishop and the Prime Minister

    In August 1987 The Bulletin published an account by Tony Abbott of why he left the seminary. A link to Tony Abbott’s account is below.     Following Tony Abbott’s account, Fr Bill Wright on August 25, 1987, replied. He was a priest at that time in the Archdiocese of Sydney and Vice Rector of St Patrick’s College, Manly. He is currently Bishop of the Diocese of Maitland/Newcastle. He is mentioned as a possible successor to Cardinal George Pell in Sydney.

    http://nofibs.com.au/2013/03/28/tony-abbott-on-why-he-left-the-priesthood/

    Bill Wright’s Bulletin article ‘Abbott’s decision: the other side’ is published below.  John Menadue

     

    “Abbott’s Decision: the other side

    Bill Wright responds to Tony Abbott’s account last week of why he left the seminary.

    Tony Abbott came to St Patrick’s College, Manly, in 1984 after taking degrees in Economics and Law at Sydney University, tumultuous involvement in student politics – he was Students Representative Council president in 1979 – a Rhodes scholarship to study politics and philosophy at Oxford, a distinguished sporting career and a stint of journalism.

    Physically large, loud in argument or jest, with the exterior self-confidence or brashness of those who have survived some tough schools, his was a commanding presence in the college community. Some were captured by his spaciousness; his warm, hearty and loyal friendship; his candor; and the moving sense that he was a man who had given up much in life to serve his Church.  Others, however, found him just too formidable to talk to, unless to agree; overbearing and opinionated; and with his heart really still set on other things, in other places.

    His first year here was not happy. Manly is not Oxford, nor even the law school. Not only is there less brilliance, with and sparkle to the acre – we draw on a broader constituency – but here also one has not only to enjoy or admire one’s companions for some aspects of their character, one has also to strike some more fundamental chord of fellowship with them, to find that they satisfy some vision of what a man, a Christian and a priest should be. Only on the extreme Left of politics is there as much need to believe in each other’s selfless devotion to the cause: only there is there as much faction and disillusionment. Tony was not, on the whole, impressed by his companions. He was certainly not fired by the stimulation of life at Manly.

    Manly did its best for him according to its lights. He was accelerated through the first two years of study in 12 months. Law, politics and economics, however, count as well for studies in theology as they might for studies in medicine. Tony required three years’ further study in theology which meant for all practical purposes three years at Manly or at some other seminary.

    Dr Grove Johnson, the rector at Manly, liked and believed in Tony. He saw the difficulty Tony had settling down to the constraints of life in the college and he believed that Tony should be sent overseas to study, as he had been. No student had been sent away for undergraduate studies for the priesthood since 1968. It was unlikely to happen. Johnson, however, hoped to encourage Tony and mentioned the possibility to him. This was a chimera which Tony would pursue almost until the day he left.

    In 1985 Tony faced a new seminary rector and a new discipline, theology. One of the tragedies of this story is that the study of theology did not capture Tony’s imagination. He did passably: not as well as his academic background might have indicated. I do not recall that he ever talked about theology while at Manly. His concern – and it was a genuine one – was with practical churchmanship: how the Catholic Church could better commend itself to the hearts of Australians; how the individual priest could enliven and uplift those who were turning away from uninspired ministers.

    As well as finding little real engagement with theology, Tony in 1985 fell out with seminary authority. The present rector, Fr Gerry Iverson, is not a debater. What he says is what he means and, even more importantly, what he feels. Tony, on the other hand is inclined to come on strong, to score points, to skate over or hold back any reservations he might have about his case. There was ample scope for misunderstanding between these two, and misunderstanding there was.

    Iverson did his best for Tony. He tried to share his concerns with him; but Tony wanted tangible support, not an analysis of his difficulties and especially not an analysis couched in the terms of psychology. Iverson gave him a lot of time and a good measure of real support. He put to higher authority Tony’s case for some other arrangement of his studies, he urged patience on the bishops when they were irritated by Tony’s public pronouncements on the ills of the church or the seminary – an irritation which Iverson privately felt as least as much as they did. He risked the ire of the archbishop by granting Tony approval to speak on radio and finally he supported Tony, within the limits of honesty, as a candidate for priesthood before both Bishop Murphy and Bishop Heather as well as lending his support to my appeal to Heather that he consider making some rather special arrangements for Tony.

    In any case, 1985 passed and in 1986 Tony was placed in the parish of Emu Plains for 12 months. He was not happy to be in this position initially but it turned out to be, I think, the best of his three years as a seminarian. Emu Plains and places like Emu Plains are what diocesan priesthood is all about. Maybe it could or should be about many other things as well but the ministry of a priest to the people of a parish is the raison d’etre of the diocesan priesthood. It is significant that Tony comments that he could not imagine this to be his life.

    Finally we come to 1987. Heather agreed that Tony could live on in a parish and attend a theological college by day. I do not know of any similar arrangement ever having been made in Australia. I thought Tony had won as much as was winnable. There was still the soul-ache for the life of the university, still the chimera, perhaps, of studies overseas. Well, it was not to be. Tony quit, as he says, on March 27.

    Quit? The word suggests giving up a struggle. The struggle for what exactly? I no longer feel that I know. For a time I thought that it was the struggle to be accepted, the struggle to get authority to say, ‘Yes, we’re behind you’. But that struggle Tony surely won. Two years of study stood between him and diaconate without the inconvenience of seminary life, without the continual appraisal of his performance. He had only to do his own thing to be home and oiled.

    Another man, attempting to put his finger on the heart of Tony’s difficulties said that he had a developed inability to be really intimate and that ‘without the warmth and trust of real intimacy’ he would find ‘life in the celibate priesthood too frustrating and lacking in peace’. Tony himself, reflecting on that, feels that the issue of intimacy was in fact, ‘a symptom of a deeper difficulty, namely a growing fear that I was not, after all, suited for a priest’s work …’  Either way, it is tempting to consider the possibility that, once Tony had beaten the system and was no longer able to locate the ‘struggle’ as being between himself and authority, he had no one much else blocking his path but himself. For another to say this is, of course, too glib: especially if the other has a vested interest in absolving his church and his seminary from as much blame as possible. No decent historian, either, would reach such a conclusion without access to the letters and diaries. But it is the sort of working hypothesis that a reasonable historian might come to and seek to explore further.

    There are many faults in seminary training. There are faults in those who administer seminaries, too. And there are special difficulties connected with the remoteness of the final authorities from the scene. In every student’s story, the problems that should not have occurred loom large.

    How odd of Jesus to make Judas an Apostle! And to turn away the rich young man? How odd that Peter, and not someone more stable (James?), was chosen leader? How odd that Paul was first a persecuter? That Ignatius had to be struck by a cannon ball: that Aloysius died a scholastic; that Pius X is a saint? Why should a man such as Francis have lived to see the corruption of his work?

    I do not presume to think, Tony, that I understand the interplay of freedom and providence. Neither, I am sure, do you. I only know that we must try to make things come out right, in the full knowledge that it may serve some  higher purpose for them to come out wrong. Or it may not.”

     

     

  • John Menadue. Those pesky nuns.

    I was taken with an article by Nicholas Kristof. It was first published in the New York Times and yesterday in the SMH. The link to the article is below.

    In this article there is a quote from an American nun “Let me get this straight. Some priests committed sex abuse. Bishops covered it up. And so they are investigating nuns!’.

    If only the nuns were running the show, the Catholic Church would be in much better shape.

     

    http://www.smh.com.au/comment/superheroes-none-compare-to-our-heroic-nuns-the-first-frontline-feminists-20140819-105rfs.html

  • John Menadue. The ANZAC Myth.

    The four-year and well-funded carnival celebrating Anzac and WWI is now rolling. The carnival will depict WWI as the starting point of our nation, as our coming of age!

    It was nothing of the sort. It was a sign of our international immaturity and dependence on others. What was glorious about involving ourselves in the hatreds and rivalry of European powers that had wrought such carnage in Europe over centuries? Many of our forebears came to Australia to get away from this. But conservatives, our war historians and colonel blimps chose deliberately to draw us back to the stupidities and hatreds of Europe.

    It seems that the greater the political and military stupidity of wars that we have been involved in, the more we are encouraged to  hide behind the valour of our service people at Gallipoli, the Western Front and elsewhere.. The ‘leadership’ of Winston Churchill and General Ian Hamilton were catastrophic both for the British and for us. Australian and New Zealand forces at Gallipoli were commanded by a British General. No hiding behind the sacrifice of troops can avoid the facts. We should not have been there and it was a disaster.

    Unfortunately the more we ignore the political and military mistakes of the past, the more likely we are to make similar mistakes in the future. And we keep doing it. If we had a sense of our calamitous involvement in wars in the past like WW1 we would be less likely to make foolish decisions to involve ourselves in wars like Vietnam, Iraq and Afghanistan.

    Our history is littered with tragic military adventures, being led by the nose by either the UK or the US.  And it goes on through the Boer War, the Sudan War and more recently, Vietnam, Iraq and Afghanistan. In all these cases, and just like WWI, we have desperately tried to hide behind the valour of our service people.

    The most important and justified war in which we have fought as a nation was WWII, in defence of our own people and land. But WWII is rated by the Australian War Memorial and so many others as of much less significance.  WW1 Is the Holy Grail.

    On April 25 each year we are told by tongue-tied people that the great sacrifice of WWI was in defence of freedom and the right. But I don’t think that they even believe it themselves. It just does not ring true. Tony Abbott says it was a ‘just war’. But he is yet to explain what was ‘just’ about it. It is claimed that it united this country, but it divided us in a way that we had never been divided before or since with Billy Hughes exploiting the anti-Irish and anti-Catholic sentiment in the country. Only 30% of eligible men chose to enlist. WWI was a great divider. It was not a unifier despite the platitudes of Anzac Day.

    Some claim that WWI was to bring peace to Europe. But the war and its aftermath laid the ground for even greater death and destruction in WWII.

    In relation to our population, our greatest loss of lives was in the Frontier Wars where over 30,000 indigenous people died in defence of their own land. But we ignore it in favour of the myths of Anzac. Best we forget the Frontier Wars.

    The first time Australians and New Zealanders fought together was against the Maoris in New Zealand in the 1850s and 1860s. The ANZAC connection was not forged at Gallipoli but half a century before in the Maori Wars.  It’s best that we forget that too. It doesn’t do our self-respect much good to recall that we fought together with New Zealanders in a race war to quell the Maori people.

    The early and remarkable achievements of this young country at the turn of the century and early in the 19th Century are blotted out by the blood and blather of WWI, ANZAC and Gallipoli.

    Federation in 1900 was a remarkable achievement, pulling together our six colonies into a nation. We led the world in universal suffrage, the rights of women, industrial democracy and the minimum wage. The ‘Australian ballot’ or secret ballot was progressively adopted in the Australian states in the latter half of the nineteenth century. We were a world leader. Our ballot was adopted in New Zealand, Canada, UK and US

    In 1904 we had not only Australia’s first Labor Government. It was the first in the world. The rights of working people as expressed in the Harvester Judgement of 1907 put Australia as a leader on the world stage. We were an advanced social laboratory. Before WWI there were two decades of remarkable nationhood and advancement for ordinary people.

    But conservatives were frightened of the future. They wanted to drag us back to the heart break of the past. And they succeeded with the help of Billy Hughes and other Labor renegades

    In the process we broke our own heart – or as Marilyn Lake has expressed in a blog on April 23 this year ‘WWI fractured the nation’s soul’.

    It is time we were honest with ourselves and discounted the myths of WWI, ANZAC and Gallipoli.

    Instead we should celebrate the two remarkable decades of progress before the catastrophe of WW1.

     

  • John Menadue. Who triggered the disaster in Iraq?

    George Bush and his neocons must bear the principal responsibility for the disaster which is continuing to unfold in Iraq. In Australian terms, the most guilty partners are without doubt the Howard Government and News Corporation.

    The Howard Government’s decision to support the invasion of Iraq in 2002 was loudly supported by Tony Abbott. He said the invasion ‘was to liberate other people, to advance everyone’s interest and to uphold universal values that the coalition of the willing went to war in Iraq. If it’s possible to engage in an altruistic war, this was it.’

    The consequences of the war for Iraq have been almost unimaginable. Hundreds and thousands of Iraqis have died and been driven out of their homes. Genocide and ethnic cleansing is now widespread.

    We spent over $2 b on the Iraq war which the head of the AFP said made us less safe.

    We knew little and cared little about the history of Iraq and its people. Saddam Hussein was a tyrant, but he kept the clash between Shia and Sunni under some control. Christians and other minorities were tolerated. Islamic extremists did not get a foothold in Iraq. After Saddam was deposed and killed, Al-Queda grew in strength, which has now morphed into the murderous IS.  It is as if the heavens have really fallen in. Christians, minorities and moderate Sunni are being murdered.

    It is time John Howard and Tony Abbott really confessed that they made a terrible mistake in joining the coalition of the willing. They relied on dodgy intelligence information that was manipulated to support a previously determined political decision to invade Iraq. Our intelligence agencies, particularly the Defence Intelligence Organisation, were highly sceptical about alleged biological and chemical weapons.

    The best service we could have given to our US allies was to warn them against the course that they had determined to pursue.

    And there was News Corporation raucously calling for support for the war and doubting the patriotism of the war’s critics. The campaign by News Corporation in support of the Iraq war was as unscrupulous and dishonest as its campaign now in support of sceptics on climate change.

    In 2003, Rupert Murdoch said ‘We can’t back down now, where you hand over the whole of the Middle East to Saddam … I think Bush is acting very morally, very correctly … The greatest thing to come of this to the world economy … would be $US20 a barrel for oil.’ The next year, Rupert Murdoch told ABC Radio ‘There is tremendous progress in Iraq. All the kids are back at school, 10% more than when Saddam Hussein was there. There is 100% more fresh water … Most of Iraq is doing extremely well.’

    The Australian in an editorial mocked the critics of the war whom it described as ‘the coalition of the whining’. Greg Sheridan, the Foreign Editor of the Australian described George Bush as ‘a really modern Winston Churchill’. Three months after the invasion of Iraq, Sheridan still thought ‘weapons of mass destruction doubts are ludicrous’.

    Tony Abbott is now telling us of the appalling humanitarian plight of so many in Iraq. Yet he with John Howard and Rupert Murdoch, must bear a heavy responsibility for what has transpired.

  • John Menadue. Is there light at the end of the dark tunnel?

    In my blog of April 17 I outlined ways in which we might find a way out of the refugee quagmire. It is reposted below. 

    There is speculation that the government may announce an increase in the refugee intake to help the Christians and other minorities suffering dreadful persecution in Iraq and Syria. I hope this turns out to be the case and the beginning of a return to a more humane refugee policy.

    I could almost write Tony Abbott’s announcement. ‘Now that we have stopped the boats and put the people smugglers out of business, we can assist refugees in Iraq and Syria who are facing appalling persecution. By stopping the boats, we can increase our humanitarian intake in cooperation with UNHCR. This will be an orderly and regular program rather than allowing people smugglers to determine who comes to this country.’

    In my blog that I referred to, I suggested that the government should increase ‘regular arrivals from 13,750 to 20,000 per annum. This would be a useful start’.

    After the Howard Government’s pacific solution took effect, the refugee intake was increased from 7,642 in 2000-01, to 12,247 in 2006-07. In those same years, the settler/migrant intake was increased from 107,366 to 140,148.

    In that blog  of  April 17 I suggested  other actions that we could take which would be consistent with an ‘orderly’ refugee program – orderly departure arrangements with Afghanistan and Sri Lanka; alternate migration pathways and allowing asylum seekers on bridging visas in Australia to work.

    If Tony Abbott makes the announcement that I hope he will, it might be an opportunity to start rebuilding a bipartisan approach to refugee policy. 

    Even with the issue of boats off the political agenda, there are a lot of things that we can usefully do to protect the vulnerable and to restore our international reputation. John Menadue.

    Repost from April 17

    Is there a way we can turn this dross into gold, or if not gold, then a valuable metal? Is there a way through the present impasse that is both humane and practicable? I suggest there are some areas where we could have a broader discussion and decide what might be acceptable to the Coalition and the ALP. Surely some area of bipartisanship can be found. I suggest there are six areas which we should focus on.

    1. Action in the latter days of the Rudd Government followed by Operation Sovereign Borders has largely stopped boat arrivals. With so few ‘irregular’ arrivals, I suggest we should focus our attention on “regular arrivals” and increase the humanitarian program from 13,750 to 20,000 pa. This would be a useful start. It would demonstrate that the government is prepared to respond to asylum seekers and refugees in need provided they come through ‘regular channels’. (If today we took the same number of refugees that we took during the peak of the Indochina program and adjusted for population increase, our humanitarian/refugee intake would be about 35,000 p.a.)
      After the Howard Government’s Pacific Solution took effect, the refugee intake was increased from 7,642 in 2000/01 to 12,247 in 2006/07, the last year of the Howard Government. In those same years the settler/migrant intake was increased from 107,366 to 140,148.
      It is clear that having ‘stopped the boats’ as the Howard Government told us, they then considerably increased both the humanitarian and migrant intake. We should do the same again.
    2. Many Australians are concerned about the recent deaths and injuries on Manus and earlier on Nauru. It seems that asylum seekers where attacked by thugs within the Detention Centre on Manus. That is extraordinary and reflects on every Australian. A man has been killed in our name. We have a moral responsibility for any asylum seeker who comes to Australia and then is transferred to another country. To clarify the situation, I suggest that our moral responsibility should be strengthened by establishing a clear legal responsibility as well. We could do this by amending the Migration Act to ensure that there is ‘effective protection’ which is enforceable under Australian statute for any person that we transfer to another country. It would provide a discipline which is clearly lacking at the moment.‘Effective protection’ enforceable in Australian courts would need to be spelled out in the Migration Act to include such issues as non-refoulment, legal status when in another country, humane treatment consistent with the dignity and safety of the individual, and swift and efficient processing of claims. Surely the Coalition and the ALP could agree on ‘effective protection’ when asylum seekers are transferred to another country. The UNHCR should be asked to monitor ‘effective protection’.
    3. We need to address persecution and discrimination in source countries by negotiating Orderly Departure Arrangements with Afghanistan, Pakistan and Sri Lanka. Many asylum seekers coming to Australia come from these countries. We negotiated an ODA with Vietnam in 1983 whereby 100,000 Vietnamese came to Australia over many years instead of taking dangerous and irregular travel by land and sea. The Hazaras in Afghanistan and Pakistan desperately need our help through an ODA.
    4. We should consider other migration pathways that would reduce pressure on people to flee their countries. The largest number of asylum seekers coming by boat before the clamp down were Iranians.  I suggest that we should look at 457 visas or other migration pathways for young people from Iran. They would be great settlers.
    5. We need to address the issue of 30,000 asylum seekers in our detention centres and in the community whose refugee status has not yet been assessed. Immigration Detention Centres are very expensive and damaging to the individual. More asylum seekers should be carefully released into the community under bridging visas whilst their claims are being assessed. Most countries do this. In 2005 the Howard Government introduced the Community Care Pilot Scheme to assist asylum seekers in the community. Its focus was on case management. This pilot scheme became the Community Assistance Support (CAS) program and has worked well for asylum seekers in the community. Unfortunately a hostile political climate has made governments wary of developing the scheme. CAS should now be expanded.
      Further, as asylum seekers are released into the community, they should have the right to work. It is important both for their dignity as well as being in the interest of the Australian taxpayer. Surely the major political parties could agree on this. We have seen how country businesses like meatworks and fruit picking have welcomed asylum seekers.
    6. The only viable long term solution to desperate people taking risks in coming to Australia is through regional processing in transit countries and particularly in Indonesia with the cooperation of the UNHCR. We must bend our backs to do that. Julie Bishop would have an interest in this as it would help generate good will in our relations with Indonesia. We also need to build better relations with UNHCR.

    Surely we can find some bipartisan common ground in these six areas. Maybe we could find ways of turning dross into gold, or at least silver.

     

  • John Menadue. Who owns Medibank Private?

     The government has announced that it hopes to raise $4 billion from the sale of Medibank Private. But like many of its budget ‘savings’ it might find that it has to rely in this case  on the High Court rather than the Senate to decide if the $4 billion ‘saving’ can be realised.

    The case has been made by many people that the government is not the owner and certainly not the sole owner of Medibank Private. A view is strongly held that Medibank Private is owned by members/policy holders of Medibank Private. There are 3.8 million members. There is not much doubt that Medibank Private’s equity including accumulated reserves has come overwhelmingly from members’ contributions. At 30 June 2013 issued capital was $85m. Retained earnings were $1.3b. The market value of Medibank Private is estimated to be $4b by the government’s financial advisers.         .

    Medibank Private was first launched in 1976 with operations placed in the hands of the Health Insurance Commission (HIC).

    An examination of Medibank Private’s accounts by The New Daily (George Lekakis) reveals that before 1997

    • In 1988 the Chairman of Medibank Private, Fred Miller, wrote to Health Minister Neal Blewett that ‘Medibank Private is a non-profit organisation based solely on its contributors’ funds. The government has no financial interest in Medibank Private’s assets and reserves. Medibank Private’s assets and resources are the property of its contributors.’ This view by the Chairman was spelt out many times in statements and financial disclosures.
    • Members were officially recognised as ‘equity holders’ in the business from 1993 to 1996.
    • The balance sheets of Medibank Private before 1997 clearly show that the members owned the net assets of the company and not the government.

    The accounting treatment of Medibank Private was changed in 1997 by the Howard Government. This established government control and ownership of the fund.

    • In 1997 the term ‘members’ equity’ was removed from the balance sheet and replaced with a new concept of ‘fund equity’.
    • The Howard Government then directed the Health Insurance Commission to transfer equity of the fund to a new government-owned company known as Medibank Private.

    It would seem that the actions of the Howard Government and later the Rudd Government were designed to extinguish the rights of the members/contributors.

    The Australian Government can acquire the private assets of citizens under Section 51 of the Constitution but the acquisition must be on ‘just terms’. It is arguable that extinguishing completely the rights of contributors – the early ‘equity holders’ – can hardly be said to be on ‘just terms’.

    I must confess that I have a personal interest.  I have been a contributor/’equity-holder’ since 1976. I have contributed tens of thousands of dollars in premiums. Most of it has been a waste of money, but I suppose it gave me something called ‘peace of mind’ but not much more.

    Who owns Medibank Private? The High Court may be called upon to tell us.

     

    In my blog of March 26, 2014 ‘Privatising Medibank Private, who cares’ I argued the all health insurance, whether public or private is parasitical. Warren Buffett described PHI as the tapeworm that is destroying the US health system.

  • John Menadue. Missing in action when Kerry and Hagel come calling?

    I can understand Tony Abbott’s wish to direct attention away from the budget by going off to The Hague and London. But are Australia’s national and policy interests being served by his absence when John Kerry and Chuck Hegel visit us.

    In my blog of July 31 ‘Overplaying one’s hand’ I quoted Tony Abbott’s comments on MH370 in PNG. He said ‘Satellite footage shows what could be debris from the missing airline’s flight MH370’. But he was wrong.

    In Shanghai about two weeks later Tony Abbott said ‘We are confident that we know the position of the black box flight recorders to within some kilometres … we are very confident the signals we are detecting are from the black boxes on MH370’. On the same day Air Chief Marshall Angus Houston, who was in charge of the search, said ‘On the information that I have available … there has been no major breakthrough in the search for MH370’. What Angus Houston told us still stands. Apparently we are now to contract out the search for MH370 to a foreign company.

    Then Tony Abbott adopted what Paul McGeough in the SMH called ‘megaphone diplomacy’ on MH17. It has now become clear that it was the Malaysian Prime Minister who quietly contacted the rebels in Donetsk and secured the release of the refrigerated train with 200 bodies or more on board. The Malaysian Prime Minister also secured from the rebels the two black boxes of MH17. The role of the Malaysian Prime Minister clearly doesn’t suit Tony Abbott’s agenda. I have yet to hear him make any mention or thank the Malaysian Government for its role in what really mattered after the crash of MH17. Help from the Dutch and others has been helpful, but their contribution did not compare with what the Malaysian Prime Minister achieved. So Tony Abbott went to The Hague to thank the Dutch but there is still no sign of him dropping in to Kuala Lumpur to thank the Malaysian Government. Operation bring them home has become more like wait and see.

    Now Tony Abbott is on a side trip to London at the same time that the US Secretary of State, John Kerry, and the Secretary of Defence, Chuck Hagel, are in Australia. This is quite remarkable. After President Obama, John Kerry and Chuck Hagel are without doubt the two most important foreign visitors that could come to our shores at this time. But Tony Abbott was not here to discuss with them what more we might be doing in Iraq and Syria. Just imagine what News Corporation and other media might be saying if Prime Ministers Gillard and Rudd were absent at a time like this.

    Our national interest would be much better served with less grandstanding and less megaphone diplomacy.

     

  • John Menadue. Will the new Colombo Plan work?

    Julie Bishop has announced a ‘signature initiative’ of the Australian government which aims to lift knowledge of the Indo-Pacific in Australia by supporting Australian undergraduates with internships in the region.

    This initiative is commendable but I hope it avoids the problem of earlier attempts to lift Australian understanding and skills for our region. The main problem before was that young Australians who committed themselves to skills about our region couldn’t get jobs in Australia. So they drifted away. Will we make the same mistake again?

    Let me give some background.

    The early Colombo Plan which was introduced by the Menzies Government in the 1950s brought thousands of young people from our region to study in Australia. At Adelaide University where I was educated there were hundreds of such Colombo Plan students. This earlier Colombo Plan built up not only the skills of these young people but it broadened and developed relationships between Australia and regional countries. Today there would be hundreds and perhaps thousands of former Colombo Plan students who now occupy senior government and diplomatic positions in the region.

    Now the government is proposing the reverse – providing scholarships for study by Australians for up to one year in the region with internships and mentoring backup. It is designed to deepen Australia’s relationship with the region, both at the individual level and through expanded links between universities and business. The Abbott Government has committed $100 million over five years for the new Colombo Plan.

    In the 1970s and 1980s there was a major upsurge in Asian language training in Australia. It followed the quite dramatic increase in trade in our region, particularly with Japan and later with Korea. But this upsurge in foreign language learning in Australia did not last. Our schools, colleges and universities gradually lost interest in equipping Australians with skills for the region. Our education system didn’t have resources or a long-term view to really embed Asian language training in our educational system.

    But it wasn’t just the fault of our education system. It turned out to be very difficult for Australian graduates with language skills to get employment with Australian companies. I spoke to hundreds of young graduates either individually or in groups over many years about the problem. I felt a bit responsible, along with Steve FitzGerald and others for encouraging young people to acquire Asian language skills. But it turned out to be a dead end as far as employment was concerned. These young graduates invariably told me that they had put five or more years into acquiring regional cultural or language skills but couldn’t find employers who were interested. Some obtained employment with the Department of Foreign Affairs and Trade and Austrade, but many drifted overseas to work with foreign companies in, for example, Hong Kong, Singapore and Tokyo.

    Some of these young graduates may have had unreasonable expectations that a language skill would inevitably lead to employment. But I have no doubt that the lack of interest by corporate employers was a major problem.

    The lack of interest then by Australian companies continues today as far as I can tell. I have yet to learn of a single CEO or Director of our top 100 companies who can fluently speak any of our regional languages. They just don’t get it. The culture of most of their organisations is very parochial.

    It is also the experience that young Australian business people sent overseas to work in the region often resign on return to Australia because of an unsympathetic and sometimes hostile attitude to people who have worked in the region. I set this out in a blog of August 26 last year ‘Returning home can be the hard part’.

    At Qantas in the late 1980s we recruited a number of people with Asian skills. Some were given internships. But it didn’t last and within a few years most of them had left Qantas or worked in areas of Qantas where their Asian skills were not relevant. We recruited cabin crew with Japanese language skills, but it was a major problem overcoming the seniority rules for cabin crew which reserved the best routes, including the Sydney-Tokyo route for more senior cabin crew who didn’t have language skills.

    Because of the failure of previous attempts to educate young people for our region the government has now adopted a new approach in the new Colombo Plan. The government has come to the understandable view that galvanising our education system to respond to our region is very hard and that it might make more sense to send young Australians into the region to live and learn in that environment.

    My experience tells me that the experience of these young Australians in the region will be quite dramatic. It will be life-changing for many of them. But a key to the success will be the reception they get when they return to Australia. Will the business community respond in a better way than it did twenty years ago when it failed to employ so many young Australians who had acquired Asian skills in our universities?

    I hope we don’t make the same mistakes again because the new Colombo Plan is a very commendable initiative.

  • John Menadue. Diplomatic lessons for Canberra.

    In my blog of July 31 ‘Overplaying one’s hand’ I said that there were clear lessons to be learned from the disasters of MH370 and MH17. The lessons are – don’t overplay your hand or overstate your case for domestic political reasons.

    Today in the SMH, Paul McGeough, see link below, refers to the failure of megaphone diplomacy over the loss of MH17. He says ‘While Abbott and Bishop opted for megaphone diplomacy against the rebels’ sponsors in Moscow, Malaysian Prime Minister, Najib Razak, quietly made phone calls to the rebel leadership in Donetsk, in which he achieved essential outcomes – the release of the refrigerated train on which the rebels had stored the 200 or more bodies and the handling over to Malaysian officials of the Boeing 777’s black boxes, which are essential for crash investigators.’

    Now Tony Abbott is off to the Netherlands to thank the Dutch Prime Minister and  the AFP and other officials. But surely the priority call should be in Kuala Lumpur. It was the Malaysian Prime Minister who helped most of all on what really mattered. Why won’t Tony Abbott accept that? Perhaps he could make amends by dropping in to KL on his way home.

    In the same paper on the same day Peter Hartcher said that Abbott’s conduct over MH17 ‘has been impeccable’.Where has he been!

     http://www.smh.com.au/world/mh17-search-in-ukraine-turns-into-mission-impossible-20140808-101wxf.html

  • John Menadue. . Come by air – no problem!

    Many newspapers this morning are full of stories about fraud and bureaucratic negligence over air arrivals. The integrity of the visa system is being called into question.

    One June 20, last year, I posted an article ‘Come by air – no problem!’ It is reposted below. This blog highlighted the widespread preoccupation with boat arrivals.

    Other major issues have been overlooked,including the 50,000 plus in our community, who having overstayed their visa have ‘disappeared’

     

    Repost: Come by air – no problem!

    There is an easy way to solve the boat people “problem”. It is simply to get as many asylum seekers as possible to come by air. It would be a win/win for everyone. There are many reasons for proposing this.

    • The politicians and the media show no interest whatsoever in the asylum seekers who come by air. (In the last 10 years, over 78% of asylum seekers have come by air, although in the last two to three years, the proportions have changed in favour of boat arrivals.) But the fact remains, we are not concerned at all about air arrivals.
    •  This would solve the political problem We could also ignore the media misinformation
    • We don’t put many air arrivals into detention as we do boat people. So this could potentially save us up to $2 billion in detention costs.
    • Asylum seekers who come by air live freely in the community, and  are allowed to work. Boat people are not. So allowing more air arrivals to work saves the taxpayer and there is no need for asylum seekers to break the law and work in the grey economy.

    There are also good business opportunities here  for Qantas and other airlines. They need to set up joint ventures or appoint good agents to help as many asylum seekers to get visas to enter Australia  by air with Qantas or others. How can this be done?

    • Most asylum seekers who come by air promise that they are coming to Australia as a visitor, student or working holiday maker. Having got into Australia they then apply for refugee status and live happily in the community until their status is resolved.
    • So entrepreneurial agents can perform a personal and national service in helping asylum seekers come by air. We know there are some very efficient “agents” in southern China. China always tops the list for the number of asylum seekers who come by air. What a boon for both airlines and agents!
    • Clive Palmer has proposed that asylum seekers should fly to Australia. He said recently ‘All that needs to happen is that the government needs to stop telling airlines and other people not to give [asylum seekers] safe transport. If they come down here by air and if they are refugees that’s one thing. If they haven’t got a legitimate claim they can go right back on the plane the next day.’

    Clive Palmer clearly sees it as a win/win for everyone. As would other people.

    • Tony Abbott would surely applaud as it is an even better solution than his Pacific Solution to control our borders.  People smugglers would be put out of business
    • The media would obviously think it was good policy because it has shown very clearly that it is only concerned about boat people. Air arrivals are quite un-newsworthy.
    • Taxpayer money would be saved and airlines could make more money.

    But to disappoint Tony Abbott and the media, I must admit that some of the above is nonsense. You probably detected my tongue in cheek a few paragraphs ago!

    • Agents would need to encourage visa applicants to make false declarations about the reason for them coming to Australia.
    • It would be unfair to persons who genuinely faced persecution and who would have no way of getting a visa.
    • Asylum seekers who come by air, although many are quite deserving, have a success rate in refugee determination of just over 40%. For boat arrivals it is over 90%.

    Put simply, our preoccupation with boat people is a dishonest and misleading ploy. It is done deliberately to incite fear. For some reason boat people are a special threat. And Tony Abbott and the media play it for all it is worth. As reported by the SMH on 10 December 2010 “a key Liberal Party strategist told the US Embassy in 2009 that the more boats that come the better”

    The important issue is the total number of asylum seekers who come to Australia and not their mode of arrival. As an island continent we should not be surprised that really desperate people try to come by sea without a visa.

    The Coalition and the media have performed dishonestly over boat people. Following in John Howard’s footsteps, Tony Abbott and Scott Morrison are deliberately inciting fear about boat people, yet show no interest at all in air arrivals. Where is the consistency in this?  For the media it is partly political partisanship, as with The Australian, but for most others it is laziness.  Pictures of unkempt bearded men on boats are so much more newsworthy. It is much harder to get pictures and stories of asylum seekers dressed in suits who come by air every day and all day through our airports. And no group exhibits more laziness  on this issue than the ABC, particularly its Canberra correspondents.

    Why do we continue to beat ourselves up only about asylum seekers who come by boat but ignore those who come by air and treat the latter much more generously particularly as the have a much lower success rate in refugee determination?

    John Menadue

     

     

     

     

  • John Menadue. Suffer the little children to come unto me…

    Well, not so if they are Palestinian children or asylum seeker children in our detention centres.

    At last counting there were 1,230 Palestinians killed in Gaza as a result of 3,000 or more air and artillery strikes. 56 Israelis have died. Close to 1,000 of those Palestinians killed were civilians, including children. Only three Israeli civilians died. Just imagine the outcry of the Israeli lobby if those figures were reversed and 1000 Israelis had been killed… Clearly the Israel lobby and many others don’t regard Palestinian civilians and children of equal value to their own.

    In her article ‘Grief grips Gaza’ in the SMH on August 2, Ruth Pollard tells the searing story of the carnage in Gaza. For link to story, see below.

    http://www.smh.com.au/world/grief-grips-gaza-20140801-3czlw.html

    The Israelis and their apologists around the world, including President Obama and Prime Minister Abbott, say that Israel has a right to defend itself. That is true, but it is only a very small part of the truth. They refuse to honestly admit that the core of the problem in Palestine is that land was stolen by Israel from the Palestinians in 1967. There will be no peace without justice. There will be no justice until Israel withdraws from the land it has stolen from the Palestinian people.

    But whilst this political impasse continues with the support of the Israeli lobby, the people of Palestine are suffering an appalling fate.

    Closer to home we have also had a searing account of the treatment of children in our detention centres. The Human Rights President, Professor Gillian Triggs has told us of the misery and trauma of children in our detention centres. She has been vividly supported by Elizabeth Elliott who is Professor of Paediatrics and Child Health, University of Sydney and Consultant Paediatrician at the Children’s Hospital at Westmead, Sydney. She accompanied Professor Triggs to Christmas Island. Professor Elliott has described the mental and physical symptoms of disease of children in detention where they are beyond health and hope. She has spoken of escalating rates of mental ill health. The distress was expressed as overwhelming sadness and hopelessness and manifest most dramatically by the high prevalence of self-harm in young mothers and psychological symptoms in their children.

    Professor Elliott described how the children expressed their mood through drawings. These drawings were bleak and about guns, barbed wire and tears.

    By way of contrast, my wife and I visited the Archibald Prize exhibition last week which featured the ‘Young Archies’ – portraits by 5 to 15 year olds. These beautiful portraits were in such contrast to what Professor Elliott has shown us by children on Christmas Island. The Young Archies of the same age as the asylum seekers drew beautiful portraits of people they loved and who loved them – mainly family. The contrast between the two lots of drawings highlighted very graphically the trauma we are inflicting on children in our care. And to think that Scott Morrison is the legal guardian of these children in detention!

    There is not just institutional violence against children in the Catholic Church and other institutions. It is happening now in our detention centres, this very day.

    For God’s sake, for the children’s sake and for our own sake, stop this inhumanity both in Gaza and in our own detention centres. The tears of the children will not wash away our guilt. At the very least we should stop wringing our hands and do something about it.

  • John Menadue. Overplaying one’s hand.

    With the benefits that governments get with incumbency, presidents and prime ministers need to be careful not to overstate their case or overplay their hands. The temptation is great, particularly when there are national outpourings of grief and when a global stage awaits.

    Tony Abbott was certainly on the world stage over MH370. On 21 March in PNG he announced that “satellite footage showed what could be debris from the missing airline’s flight MH370”. Then he added, ‘now it could just be a container that fell off a ship … we just don’t know … we owe it to [families and friends] to give them information as soon as it is to hand’.

    His speculation about the wreckage was not correct.

    On April 11 in Shanghai, Tony Abbott said ‘We are confident that we know the position of the black box flight recorders to within some kilometres … we are very confident the signals we are detecting are from the black boxes on MH370.’ On the same day, after Tony Abbott’s press conference, Air Chief Marshall Angus Houston, who was in charge of the search said ‘On the information that I have available to me, there has been no major breakthrough in the search for MH370’. The media reported in the SMH of that day ‘[Angus Houston] gave no indication that the black boxes were any closer to being found’.

    Tony Abbott was too early and overstated in his comments.

    On MH17, Tony Abbott and July Bishop have been playing on a much bigger stage in the United Nations. (Interestingly their platform was the Security Council seat that they inherited from the previous government despite the fact that the Coalition criticised the waste of money and that time should not be wasted in talking to Africans.)

    The unanimous decision of the Security Council drew world attention to the shooting down of MH17 with 37Australians and Australian residents on board. We had a direct and legitimate interest. But that Security Council Resolution 2168 on MH17 had no enforcement mechanism for the recovery of the bodies and the necessary investigations. The lack of any enforcement mechanism is now the reason why our AFP and others, particularly the Dutch and Malaysians, have been unable to access the crash site for days. And it seems that the reason for that denial of access is not because of Russian supported separatists, but because the Ukrainian government has seized the opportunity to escalate its military actions against the separatists. This action by the Ukrainian government seems to be a clear defiance of the Security Council Resolution.

    There are clear lessons to be learnt from the disasters of MH370 and MH17. The lessons are don’t overplay your hand or overstate your case for domestic political reasons.

    Tabloid headlines from the Murdoch media are not a good guide as to how we should conduct our foreign policy.

  • John Menadue–President Jokowi and Australia

    The election of Joko Widodo as Indonesia’s seventh president is a victory for burgeoning democracy in our neighbour with 240 million people. It was a victory for civil participation by ordinary people to defeat Prabowo Subianto by a margin of 53% to 47%, by 8 million votes and winning in two thirds of Indonesia’s provinces.

    Prabowo had a very dubious performance on human rights when he was in the military. But like so many people from” born to rule” elites he now refuses to accept the result. What would the lower orders know about the need for strong leadership from his business and military friends?  It is similar to the way Tony Abbott behaved after the 2010 election. Denied the prime ministership by a vote of the House of Representatives he set about with Christopher Pyne to wreck the place.

    Jokowi will not have a majority in the Parliament. He will need to be a good negotiator

    All being well and despite Prabowo, Jokowi will be sworn as president on October 20. President Yudhoyono is likely to smooth any troubled waters in the meantime.

    What could it mean for Australia?

    In the short term I would think not much. Jokowi will be preoccupied with domestic issues that he campaigned on. He has promised two presidential regulations on corruption and expediting business permit licencing. It is also expected that he will release a third regulation that he promised on religious discrimination directed against religious radicals.

    Outgoing President Yudhoyono was well disposed towards Australia and we often tried his patience! President Jokowi does not have the same disposition. We should not take him for granted. He will approach foreign policy issues very cautiously in the early days. He will be guided by professional advisers. Who he appoints to his cabinet will be very important and a good indicator of his priorities.

    Jokowi will not have the same sensitivity as President Yudhoyono has on spying issues which offended Yudhoyono greatly. Our spying agencies are often a menace.

    For Jokowi, boats will simply not be a priority. Given Indonesia’s other problems boats will remain a third rate issue. An important issue however for the Jokowi administration is how it regards the stategic question of the South China Sea. That might begin to emerge in six months or so. All in all I don’t think we will see much departure from existing  foreign policies.

    Attitudes to foreign investment  howeverwill be coloured by economic nationalism which remains a major political issue for all Indonesian political parties.

    In all of this it should not be assumed that Australia will get any preferred treatment. We don’t deserve it and we won’t get it.

    One issue which could shore up the relationship would be a much more robust business relationship, even given Indonesian reservations about foreign investment. Our investment in Indonesia is 0.5% of our total investment abroad. Yet investment into Indonesia from Singapore and Japan pours in. Indonesia is growing rapidly at twice our rate. It is a member of the G20. But our trade with Indonesia as a trading partner ranks number 12.

    Business and economic ties could be the ballast in a relationship which has been difficult from time to time. A business underpinning of our relationship with Indonesia would be a great stabiliser.

    Our relationship with Japan was underpinned by business relationships. Leaders on both sides helped us through difficult times particularly after WW2.

    Enhanced business cooperation between Indonesia and Australia would be a great help in the years ahead. Politics and governments change but business interests usually goes on and on.

  • John Menadue–King Coal to be dethroned.

    On May 1 last year I posted “A canary in the coal mine”. It focussed on the growing and wide concern about the damage to the climate caused by coal fired electricity generation. It also drew attention to the action of Jonathon Moylan who sent a hoax email concerning Whitehaven Coal to the ANZ Bank about the risk of investing in coal. The worthy and powerful tut tutted his action but I likened it to the canary in the coal mine warning of danger ahead.

    In the Supreme Court a few days ago. Jonathon Moylan pleaded guilty but it seems unlikely that he will receive a custodial sentence. Good luck to him for acting out his concerns about our planet, the dangers of coal and that the banks should be careful in funding more coal projects

    Only a few days earlier in Texas, Tony Abbott our apparent self-styled “ambassador for coal” said “for many decades at least, coal will continue to fuel human progress as an affordable energy source for wealthy and developed countries alike”

    But the evidence is pointing in the other direction. At the recent midyear climate negotiations in Bonn, an unprecedented 60 countries including Germany called for a total phase out of fossil fuels by 2050 as part of a global agreement on climate change to be concluded in Paris in 2015. If the Paris conference next year is successful the future of coal will be even more bleak than it is now, particularly for steaming coal

    The future of coking coal produced for steel making will be more secure, but not steaming coal. About 13 % of global coal is mined for coking and steel making. Coking coal is about 40% of our total coal exports. The remainder is steaming coal.

    On a global basis 41 % of 0f the world’s electricity is generated by highly polluting steaming coal.

    The International Energy Agency has advised that even if we aim to limit the world temperature rise to only 2 degrees – it could be more in practice – we would have to achieve a reduction of 50 % in the share of global energy from coal by 2035.

    Coal may seem a cheap fuel now but it does not carry the cost of the ‘externalities’ it incurs, the damage it does to our environment and health. That is why proper pricing of coal is essential. As the real cost of steaming coal increases the cost of renewables is moving strongly downwards.

    The signs are everywhere that steaming coal pollution must be reduced in favour of less polluting alternatives. Why in the world would Joe Hockey tell us that the wind farms around Canberra are ‘utterly offensive…I think they are blight on the landscape’? Does he prefer dirty and polluting smoke stacks?

    President Obama has taken executive action to mandate a 30 % reduction in carbon emissions from fossil burning power plants by 2030. As Japan restarts its nuclear power plants it will buy less Australian coal. China is committed to reducing power generation from coal. It is a national imperative. European consumption of coal continues to fall with new air pollution requirements from 2016.

    There are reports that Deutsche Bank, HSBC, Credit Agricole and the Bank of Scotland have withdrawn their support for the Abbott Point Coal loader in Queensland. The Bendigo and Adelaide Bank have said that they would not fund coal projects.

    We are also hearing of new coal projects being deferred and many existing mines losing money. Some of this may be short term but the longer term prospects for steaming coal are bleak. In May the Queensland Resources Council said that 10% of coal mines are “in a very precarious state”

    Or as John Hewson has put it “The days of fossil fuels being burnt unabated are over. Investing in these projects is a losing bet” (AFR 11 June 2014)

    More and more pain is coming for steaming coal.

    Minister Greg Hunt told us a few days ago that clean coal is just around the corner with new technology. But we have been hearing that for over 20 years. It is politics designed to try and prop up a declining industry and shows the risk of Direct Action in handing out money to industrial friends and political supporters.

    Tony Abbott says that action on carbon must not be allowed that damages our economy.  He thinks that the planet and our economy are separate.  Just as there will be no jobs in the Murray Darling Basin if we pollute the river so our economy and jobs will be at risk if we do not safeguard our climate and planet. If our planet is severely damaged, as is in prospect, so will our economy and lot more as well.

    Interestingly the Mining Division of the CFMEU whose members jobs at risk is far more constructive about addressing climate than Tony Abbott. The union has consistently supported a price on carbon with appropriate safeguards and compensation.

    We need to stop shoring up industries that are carbon polluting. As Ian McAuley has put it capitalism thrives on change and the opportunity for countries like Australia to modernise the energy sector can be a major driver of change. There are jobs in de commissoning coal fired plants, in building solar and wind plants and the accompanying infrastructure in energy research and development and in making domestic buildings and industrial plants energy efficient. If this isn’t economic activity, what is?

    King coal is not the energy source of the future regardless of what Tony Abbott says. The canary in the coal mine is screeching louder and louder and we had better take notice.

  • John Menadue–A lot of nonsense about productivity.

    A lot of nonsense about productivity

    For years the Business Council of Australia and News Corp have been warning us about our poor productivity record and the need to change our industrial relations laws to bring trade unions to heel.  A part of this campaign against unions is now being played out in the Royal Commission into Trade Union Governance and Corruption. The partisan nature of this action is obvious when we see that the government has refused a Royal Commission on governance and corruption by the Commonwealth Bank of Australia and other banks in the treatment of thousands of investors in superannuation. But the unions are easy game for a vindictive government.

    It is not that productivity is not important, as the BCA reminds us. It is important, but we have been doing much better than the BCA is prepared to admit. We are also doing much better in labour flexibility than the BCA is prepared to admit. But invariably business interests take the political path of urging changes to industrial relations legislation rather than focussing on improved relations in the work place. That is where real labour productivity is and must be achieved…in the workplace and by members of the BCA.

    In his speech in Hobart to the Econometrics Society on 3 July this year, the Governor of the Reserve Bank of Australia, Glen Stevens, pointed out that the value of output produced per hour of labour time, increased at an annual rate of 2% in the three years to June 2013. They were the three years of the Rudd/Gillard governments. Stevens commented ‘[This] better trend for [labour] productivity, if we can sustain it, and especially if it can be further improved, would be a reliable base for optimism about the longer-run prospects for the economy and our living standards’.

    There has been no productivity crisis despite what the BCA and News Corp have been telling us month after month.

    The BCA and other large employers were also telling us that the labour market under Fair Work Commission was too rigid and that employees should be much freer to change jobs and move into areas of high demand like mining. But again the facts pull the rug out from under this specious argument.

    In the same week that Glen Stevens was speaking in Hobart, Dr David Gruen of Treasury spoke of a survey of nominal wages over the decade to March 2014. Wages in mining rose 9.7% more than the aggregate increase. Wages in construction rose by 5.4% more than the aggregate. And wages in the professional, scientific and technical sectors rose by 2.5% more than the aggregate. By contrast, wages in the manufacturing sector rose by 0.9% less than aggregate wages. In retail the increase was 4.3% less than the aggregate and in the food sector 7.6% less.

    As Ross Gittins in the SMH has pointed out ‘We now have a genuinely decentralised and more flexible wage fixing system, delivering wage growth in particular industries more appropriate to their circumstances’.

    The clear facts are that productivity and wage flexibility have been improving. Unfortunately much of the rhetoric about industrial relations legislative reform distracts from the need for both employers and employees to concentrate on the work area, in the work place where productivity and wage flexibility is best achieved. The outcomes we seek will not be obtained in ideological campaigns about industrial relations law like the Fair Work Act. Competent and engaged employers know that. But the shrill spokespeople for the BCA and News Corp don’t want to listen. They want to blame others.

  • John Menadue–Power prices – we ain’t seen nothing yet!

    We have seen wild exaggeration about the effects of the carbon tax on prices and the economy. It has all turned out to be quite a fizzer. The price increases we have seen have little to do with the carbon tax and the economy continues to grow steadily. Whyalla has survived.

    But we have a real problem just around the corner in energy policy. The price of domestic gas is likely to at least double in the next year or so as the domestic price of gas rises to meet the international price. Compared with the impact of the carbon tax, this increase in domestic gas prices will be quite severe.  By comparison, the carbon tax will be seen like a blip on the horizon.

    Deloitte Access Economics has just warned that if the gas rise goes unchecked, the manufacturing sector alone will contract by as much as $118 billion by 2021, with nearly 15,000 jobs lost. It suggests the mining sector might contract by $34 billion and agriculture by $4.5 billion.

    Australian gas consumers are naturally concerned because of the $70 billion coal seam gas export project at Gladstone. It is nearing completion and it is likely that our domestic prices for gas will increase to match the export prices from Gladstone.

    Gas is vital for a whole range of industries in Australia – electricity generation, glass and plastics, fertilisers, cement, metals and ceramics – and of course home heating and cooking. Our manufacturing sector has been struggling with the high dollar, but relatively low gas prices have been very important. That is going to change.

    As Bruce Robertson in the SMH has pointed out, historically our east coast had relatively cheap gas from Bass Strait and the Cooper Basin. It was a domestic market largely shielded from world prices. That will change dramatically with the export gas terminal in Gladstone which will draw gas out of the domestic market into the export market because of higher prices overseas, particularly in Asia.

    The coal seam gas moratorium in NSW and Victoria is peripheral at the moment. The main driver of increased gas prices in the years ahead will be the catch-up to export prices driven by the very large coal seam gas project at Gladstone.

    This seems absurd for a country that has some of the richest energy and gas fields in the world. Tony Abbott says that Australia aspires to be the ‘affordable energy capital’ of the world.

    We need to seriously consider reserving necessary gas for Australia’s domestic purposes including the 40% of our gas used by industry.

    Free marketeers will tell us that we should not interfere in the market – that we should let domestic prices rise to export prices, otherwise it will discourage investment. But how ‘free’ is the market? There is concentrated ownership of reserves and limited competition with tightly held gas fields reserved for LNG export. The major companies have joint marketing arrangements which limit competition. There is really a cosy club of big international players that distorts the market.

    We have given some of these major international companies the right to reserve our gas for export. Some of our very large gas resources are, or will be, held back for export where there will be higher prices.

    In 2012, the OECD observed ‘these [gas] markets are far from being liberalised. [They are] characterised by a lack of competition both upstream [where relevant] and downstream’.

    Many countries insist that their substantial gas reserves must pass the test of ‘value-adding’. Gas is reserved for domestic use if it can be demonstrated that that ensures greater value for the supplier country. After all, the gas belongs to the country and its people – and not the international companies. In WA the government has enacted legislation to shield domestic gas consumers. In the US, domestic gas prices are kept low by limiting export licences. In different ways most other countries with large gas reserves ensure that there is adequate domestic supply.

    On the ABC on the 30th April this year, asked by Tony Jones ‘Should a national energy policy include putting aside gas reserves for domestic use’, Jeff Kennet replied ‘Well, certainly, if you don’t provide for your own you, very quickly find out that your own aren’t there or they are of a sub-class in terms of the region in which we live’.

    The ‘debate’ about the carbon tax is really just a curtain-raiser to the very serious discussion we need to have about the reservation of Australian gas for domestic use.

    To what extent are we prepared to limit export licences for gas until the domestic market is adequately supplied? I am not persuaded that the large international gas companies will put Australia’s interests first.

  • John Menadue. Free Trade Agreement with Japan – ‘turbo charging’ our trade or mainly hype?

    Next Tuesday Prime Minister Abe will visit Australia. I expect the Free Trade Agreement with Japan or its new name the Economic Partnership Agreement with Japan will feature prominently.  I repost below what I said on March 29 about the limited value of these bilateral agreements.

    Only last week, the Productivity Commission expressed similar reservations. It said ‘Australia recently agreed to bilateral trade agreements with Korea and Japan. Trade agreements can distort comparative advantage between nations and consequently reduce efficient resource allocation. The rules of origin in Australia’s nine bilateral agreements  vary widely and are likely to impede competition and add to compliance costs of firms engaging in trade‘. 

    I expect that we will see more hype about these bilateral trade agreements. The results are invariably disappointing.  John Menadue.

    Repost

    Tony Abbott and Andrew Robb have been hyping up the Free Trade Agreement (FTA) that has recently been concluded with the Republic of Korea, although most of the preparation and negotiation had been conducted by the Rudd and Gillard Governments.

    Andrew Robb the Trade Minister has now escalated the rhetoric by saying that the pending FTA would “turbo charge” our trade with Japan. If only!

    There are many more FTAs in the pipeline, including with China. Seven FTAs are in force including one with the US.  The proposed agreements with Japan and China have both been under negotiation for 9 years!

    Unfortunately the record shows that FTAs don’t achieve very much.

    The most important way to free up trade is through multilateral agreements, not bilateral agreements. Failing multilateral agreements, the next best approach is unilateral action by ourselves to reduce protection. The third best way to improve trade and economic prospects is through bilateral FTAs. But they are seen as political trophies rather than a genuine liberalisation of trade.

    Bilateral FTAs are regarded as sub-optimal for a number of reasons.

    • They divert trade from one partner to another partner, rather than create new trade.
    • FTAs entrench the power of the larger and stronger partner e.g. USA and potentially Japan and China.
    • They increase the cost of doing business because of complex ‘rules of origin’.  A tangled and complex web of FTAs increases the cost of implementing and administering diverse FTAs.
    • They marginalise peripheral countries with smaller markets, and polarise regions.
    • Most importantly, they divert time and energy of governments, ministers and officials, from the more important issues of multilateral negotiations, which, for us, as a small to medium sized country is more likely to serve our interest.

    The FTA concluded with the US in 2004 is an example of the limited economic and trade benefits of bilateral agreements. The agreement with the US was politically hyped up but the outcome was very marginal for Australia

    • The outcome in agriculture was far less than Australia hoped and sugar was excluded completely. The US Farm Bill which subsidises US agriculture across a wide field was untouched.
    •  Australia effectively conceded that agricultural trade is different to other trade, something that Japan has always maintained.
    • Our export growth has been minimal

    Australian officials recommended that the government not sign the agreement with the US, but John Howard over-rode their objections because he wanted a deal that would be politically and strategically useful for him in Australia’s domestic politics and in our relations with the US.  Australian trade policy was subordinated to electoral, political and strategic concerns. It may happen again with Japan and China.

    A survey undertaken by the Australian Industry Group found that”5 years after the much heralded Australia-US FTA the US market remained difficult for Australia. Almost 80% of respondents said the FTA was not very effective in improving export opportunities and 85% said it had failed to help in setting up an operation in the US”.

    Rod Tiffin the Professor of  Government and International Relations at Sydney University described the agreement with the US as “a dud”( SMH March 3 2010)  He commented that “Australia’s exports to the US in the 5 years(since the agreement was signed) grew by only 2.5 % compared with double digit growth for exports to all the major Australian trading partners. America has slipped from third to fifth among Australia’s export destinations.”

    The previous government was aware of the poor quality of a lot of earlier FTA’s and was trying to improve the quality. That was a reason for slow progress. But the Abbott Government seems more intent on a rush to a good media headline than making real progress in trade liberalisation and the quality of trade agreements.

    Andrew Robb is showing inexperience and naivety about FTA’s He said he is giving priority to concluding an FTA with Japan and doesn’t want the whaling dispute to get in the way.  Furthermore in being so politically anxious he is undercutting our bargaining position.

    Tony Abbott should use his position as Chair of the G20 to breathe some life back into the stalled MTN (Doha) round. That is where our best interests lie and where we should put our effort .There is not mush political glamour in messy and lengthy international negotiations but that is where we should put our effort both in our own interests and also in the interests of other agricultural exporters.

    A second-best approach would be to unilaterally reduce our own trade barriers. That makes sense for consumers who would pay lower prices. It promotes competition, innovation and productivity.  The Productivity Commission in 2010, in examining regional and bilateral agreements said that the economic gains from trade come more from access to cheaper imports rather than from increases in exports.

    The third and least satisfactory way is to keep pursuing FTAs where the trade benefits are quite modest. These agreements are politically hyped out of all proportion to the benefits they secure.

    Few trade experts take a rosy view of bilateral FTA’s. Unfortunately governments see them as political trophies.  John Howard hailed the FTA with the USA as a great political success but it was a dud in economic and trading terms. Just wait for a lot of political exaggeration on the upcoming “agreements” with Japan and China.