John Menadue

  • John Menadue. Joe Hockey and class warfare.

    In his speech to the Sydney Institute last night, Joe Hockey said that the criticism of the budget was unfair and reminiscent of ‘class warfare’ of the 1970’s.

    Joe Hockey was right on one thing. There is class warfare and he is waging it particularly against the young and the aged in Australia. Warren Buffet a multi billionaire put it pungently in the US recently ‘There is certainly class warfare going on and my class is winning it’.

    There has been wide-spread commentary about the unfairness of the budget. Ross Gittins for example has said: ‘This is the most ideologically driven budget we have seen … They cut the real growth in pensions but left high income earners absurdly generous superannuation tax concessions untouched. They tightened up the family allowance and cut young people’s access to the dole, but didn’t tackle the concessional taxation of capital gains, negative gearing or company cars, while ignoring the miners’ diesel fuel rebate and other business welfare. They imposed a co-payment on GP visits, but didn’t abolish the private health insurance rebate. … So it’s the “end of entitlement” for people in the bottom half, but no change to the entitlements of the well-off, save for a small three year tax levy.’ (SMH June 9)

    Joe Hockey complains about welfare in Australia, yet government outlays here as a percentage of GDP are one of the lowest in the world. The OECD recently published a report on government outlays for the 18 highest income OECD countries in 2012. Australia was the second lowest in terms of government outlays. Only Switzerland was lower. Countries such as Denmark, France, UK, Germany, Norway, Japan and the US all spent more on government outlays than we did.

    At less than 36% of GDP (all levels of government ) Australia’s public sector is a dwarf. The OECD average size of government is 40.4% of GDP and successful northern European countries such as Germany, Netherlands and the Nordic countries, all have public sectors above 43% of GDP.

    Furthermore Australia has one of the most effective means-tested welfare systems in the world. This needs continual updating but it does ensure that support goes to those in greatest need. This means of course that if welfare payments are reduced it’s going to hit hard those least able to afford it.

    There is increasing concern around the world about growing inequality in developed countries. It is much worse elsewhere such as in the US but the trend in Australia is significant. In the blog which I posted on June 9. ‘What to do about growing inequality in Australia’ you will find the following.

    • In Australia in 2011-12, the mean household net worth of the lowest 20% of our population was $31,205. The highest 20% had a mean household net worth of $2,215,032.
    • The same report quoted from a paper by Andrew Leigh, ‘from the mid-1970s, full-time wages for the bottom tenth of the income distribution had grown only 15%, while full-time earnings for the top tenth have increased by 59%. In recent decades the income share of the top 1% has doubled, the wealth share of the top 0.001% has more than tripled and the share of the top 0.0001% (the richest one millionth) has quintupled. In 2009, the top 20 CEOs earned more than 100 times the average wage. (We saw an example of this this week with the CEO of Australia Post being paid $4.8 million p.a., almost ten times the salary of the Prime Minister whilst sacking 900postal workers.)

    There are numerous examples of corporate welfare and subsidies for the wealthy. This is where the real ‘welfare’ is to be found. Some examples include

    • Superannuation concessions costing $36 billion p.a.
    • Negative gearing costing $4 billion p.a.
    • Subsidies to private health insurance costing $5 billion p.a.
    • Income-splitting trusts costing $3 billion p.a.
    • Capital gain discounts costing $5 billion p.a.
    • Fossil fuel subsidies for polluters costing $11 billion p.a.
    • Funding of private schools costing $9 billion p.a. that benefit a lot of wealthy schools
    • Tax avoidance that I mentioned in my post of June 10 costing perhaps $10 billion p.a. or a lot more!

    There is enough corporate and high income welfare here…$82b pa and counting …to more than meet the “structural budget deficit” of $65b pa. And of course there is also  paid parental leave.

    In the face of growing inequality, government largesse and benefits are being increasingly distributed to the more prosperous members of our community. Joe Hockey probably regards all these benefits as incentives rather than welfare.Or as he more insultingly puts it, the government “should be rewarding lifters and not leaners”

    His comments about class warfare are an ideological smoke screen to hide the unfairness of his budget. It is he and his supporters who are waging class warfare. And they are winning. The age of entitlement is still very much alive for the people Joe Hockey listens to…like the people on the Business Council of Australia or his own North Sydney Forum.

    We need a just and efficient society. Growing inequality acts counter to both those objectives. But in the end the case for greater fairness and equality is a moral one. Taxes are the price we have to pay for a civilised and decent society.

     

  • Nicholas Carney. Advancing the Australia-India relationship under Prime Minister Modi

    Narendra Modi’s ascension to the prime ministership of India has sparked interest around the globe, including here in Australia.

    The world is right to pay attention to Mr Modi’s rise. In the recent Lok Sahba (‘House of the People’) election, the Bharatiya Janata Party (BJP) that he leads took 282 of the 543 seats in the Lok Sahba. The result gives the BJP a majority for the first time in its history, and India its first majority government since the 1984 election. The new government’s majority rises to a commanding 336 seats if those won by the BJP’s coalition partners in the National Democratic Alliance are included.

    Mr Modi and the BJP were expected to perform well in the election – after all, Indian economic growth languishes between 4-5%, inflation is stuck around 9%, corruption is rife, and the former United Progressive Alliance (UPA) government appeared impotent to respond – but nobody expected a victory of this magnitude.

    The electorate has given Mr Modi a resounding mandate to pursue his promised program of growth, governance and infrastructure, and savaged the once-dominant Congress Party that led the UPA. The Congress Party, which has long been controlled by the Gandhi dynasty, recorded easily its worst result, as its seats fell from 206 in 2009 to just 44.

    It should surprise no one that Prime Minister Tony Abbott was quick to call and congratulate the new Indian leader on his victory. India represents a golden economic opportunity for Australia: it is enormous (with approximately 1.2 billion people), young (with a median age of 27), and on course to become the world’s most populous country by 2025 (leapfrogging China).

    The India that Mr Modi has pledged to deliver – a resurgent India, growing again at 8%, building and benefiting from new and long-overdue infrastructure, investing in its relatively young population – will have an insatiable appetite for resources, commodities, education and agriculture from Australia, just as China has over the last decade. Mining services, infrastructure and project management, and healthcare present extraordinary opportunities as well if we can seize them.

    India is also a key actor and potential strategic partner for Australia in our increasingly contested neighbourhood. Both countries have a clear interest in the stability and security of the Indian Ocean but our mutual interests extend further in the Indo-pacific region.

    The new Indian PM may be singularly focused on growth at home but he has made clear that isolationism is not an option if this goal is to be achieved. India will continue to pursue its ‘Look East’ foreign policy under Mr Modi but the emphasis will be on investment and trade opportunities.

    If Mr Modi’s approach as Chief Minister of Gujarat is anything to go by we should expect an assertive style of ‘economic diplomacy’ focusing on China, Japan, Singapore and other South East Asian nations, where the Indian government is not shy to promote its companies. Mr Modi courted these countries in his former role in Gujarat and developed good relations with leaders, especially with Japan’s Prime Minister Shinzo Abe.

    India has long been seen as a logical counterweight to China, a country that, in recent months, has adopted a more aggressive approach towards territorial disputes with its neighbours. However, Mr Modi will however be loathe to antagonise China because of its importance to his growth mission. How effectively he manages this relationship could have grave implications for the region and Australia.

    For Australia, a confident, regionally-engaged India is in our interest, particularly at a time when the US commitment to military engagement has diminished.

    With so much on Mr Modi’s plate and so many other countries queuing up for his attention – President Obama was also quick to call after the election – what, if anything, can Mr Abbott do to advance the Australian relationship in the halls of Delhi and Mumbai?

    A meeting with the new Indian PM is essential. Fortunately for Mr Abbott and Australia, Mr Modi is almost certain to attend the G20 Leaders Summit in Brisbane in November. This will be the first time an Indian PM has visited Australia since Rajiv Gandhi in 1986. Mr Abbott must make the most of this serendipitous opportunity by locking in a bilateral meeting during the visit.

    The agenda for the meeting will be critical. The following topics must be discussed: finalisation of the uranium export agreement; a roadmap to resolve any outstanding issues in the Australia-India Comprehensive Economic Cooperation Agreement negotiations; cooperation in the Indian Ocean; as well as specific Australian trade and investment proposals that will support Indian growth – for example, how Australian education providers can assist India to meet its goal to deliver vocational education to 500 million citizens by 2022 when its current capacity is only 5 million, or how our mining sector can help India to access more efficiently its substantial iron ore deposits.

    Their meeting must not be a one-off. Prime Minister Abbott should follow former NSW Premier Barry O’Farrell’s example and lead annual or biennial trade delegations to India. These delegations create people-to-people links and put Australia front of mind for Indian businesses and diplomats.

    Another way the Australian Government can promote these links is by including India in the new Colombo Plan, which funds student exchange and internships in Asia, and funding the Australia India Strategic Research Fund (funding was not renewed in the recent budget).

    Having Australian students and researchers studying in India, or undertaking joint projects with Indian colleagues, will form life long friendships and academic and business partnerships which will serve Australia well in trade and security matters.

    India’s young population means connections with Indian youth are especially important. The Government should foster these connections by supporting organisation like the Australia India Youth Dialogue, which brings together passionate and energetic young people from both countries to consider issues central to bilateral relations.

    Prime Minister Abbott can also wield soft power by embracing the Indian diaspora in Australia. According to the 2011 census, there were 295,000 Indian migrants in Australia and 390,000 people who claimed Indian ancestry. At its best, the Indian diaspora can be a cheer-squad for Australia in Delhi and Mumbai, with better access to government and business than our diplomats can hope for.

    Given Mr Modi will have his hands full trying to lift Indian growth, improve governance and kick-start infrastructure projects, Australia must be proactive in promoting this important relationship. Mr Modi’s second visit to Australia later this year is an opportunity that cannot be wasted.

    Nicholas Carney is a Senior Associate at Herbert Smith Freehills and he sits on the Council of the University of New South Wales. In 2014, he was a participant in the Australia India Youth Dialogue. The views set out in this article are his own.  

  • Persecution of Tamils.

    Last weekend Tamil asylum seeker Leo Seemanpillai committed suicide in Geelong. His colleagues are bereft as a result. They believe that he feared deportation back to Sri Lanka and would suffer persecution. Tamil refugee advocate Aran Mylvaganam said ‘the particular area where Leo is from you are automatically branded as a Tamil Tiger sympathasiser if you get deported back to Sri Lanka and Leo had genuine fears of being tortured by the Sri Lankan army and possibly even getting killed … if he was sent back to Sri Lanka’.

    The Human Rights Law Centre released a report last month in which it expressed serious concerns first about the actions of the Sri Lankan government, supported by Australia, to stop Tamils fleeing from Sri Lanka. The second concern was that Australia’s ‘enhanced screening processes’ was denying Sri Lankans access to proper refugee status determination. The report by the Human Rights Law Centre can be found at this link:

    http://hrlc.org.au/report-launch-australias-cooperation-with-sri-lanka-to-intercept-asylum-seekers-is-in-urgent-need-of-rethink/

    John Menadue

  • Mark Isaacs. The Salvos on Nauru.

    Judging the Salvation Army’s role in Nauru is difficult. Their job was to provide humanitarian support to asylum seekers in a detention centre that was established to deter desperate people from seeking protection by subjecting them to cruel conditions. The contradictory nature of the Salvation Army’s position meant they were damned by the government if they assisted the asylum seekers, and damned by their staff if they didn’t. Despite this the employees of the Salvation Army, my colleagues, showed utmost care for the asylum seekers we worked with and implemented a wide range of programs that alleviated some of the mental pressure placed upon these people This justified the need for a humanitarian organisation to act as a service provider within detention centres.

    Having said that, my introduction to Nauru highlights several issues in the Salvation Army’s implementation of their contract in Nauru that were not confined to my initial experiences, but rather became consistent, systemic failures.

    I was hired by the Salvation Army in September 2012 to work in the Nauru Regional Processing Centre as a support worker, or ‘mission worker’. The camp had been established just two weeks prior.  The Salvation Army were desperately hiring people to fly out to Nauru on four week contracts. Accounts from members of the Salvation Army suggest that the organisation wasn’t expecting the camp to be opened so quickly, that they thought they had more time to prepare.

    I was hired without a job interview and without training of any kind. I was given no concept of what work I was about to become involved in. There was no job description or mission brief provided to staff in these early days. There was no idea of what the Salvation Army hoped to achieve by accepting the contract to run the centre. There were no clear directives to the staff in how we could meet these mysterious goals of the mission that one would assume the Salvation Army had discussed before accepting the contract. There was no education provided on the type of men we would be working with; where they came from, their cultural sensitivities, the types of stories we might hear, or why they were coming to Australia. I was given no guidance on how to work with traumatised refugees, or mentally ill clients who could be, and some proved to be, suicidal. The only advice given was to ‘go out and help the men’. My experiences were not isolated. In fact, in the first deployments, the most common characteristic of the Salvation Army support workers was an inexperience in working with asylum seekers and refugees.

    The Salvation Army have since responded to these claims by stating that the role of a support worker was to ‘fulfil unskilled duties in support of the provision of basic needs for transferees’ and that ‘support worker roles typically do not require individuals to have particular skills or experience’. The Salvos also refute my claim that I wasn’t interviewed prior to being offered a position in Nauru, suggesting that a phone interview was conducted before deploying me. I would assert that this brief phone conversation was not a sufficient format through which to assess my skills for a role as important as a support worker for asylum seekers. Having said that, the role I was taking did not require me to have ‘particular skills or experience’.

    I believe that, although the Salvation Army’s motives were admirable in accepting the brief to assist some of the world’s most desperate people, the inexperience of their managing staff in working in the refugee sector was detrimental to the well-being of the men they were contracted to care for and the workers they employed to enact this task. The statement mentioned above, provided almost eighteen months after my initial deployment, either demonstrates a complete lack of understanding of the needs of asylum seekers in a place such as Nauru, or an equally complete disregard for the workers’ and the asylum seekers’ welfare.

    I believe that from day one there emerged a trend of the government pressuring the Salvation Army into submission. It was a commonly accepted view amongst my colleagues that the government would argue points of contention by threatening to ‘tear up the contract’, and the Salvation Army management would toe the line. Often this was at the expense of the asylum seekers well-being and that of Salvation Army staff. Greg Lake, former head of the Department of Immigration in Nauru, states that the Salvos were contracted by the government as the lead agency in the Processing Centre. The ramifications of the Salvos inability to assume the lead agency role meant that the humanitarian care for the men suffered.

    I can support all my claims with a number of examples, but in this blog I have only space for one.

    It took the Salvation Army over a month to hire their first professional case managers whose role it was to monitor the men’s well-being, a responsibility that we were led to believe was one of the Salvation Army’s contractual obligations. Prior to this Wilson Security assumed the responsibility of welfare services. The first two Salvo case managers were expected to establish case management practices in a camp that housed over two hundred men, the numbers increasing weekly. The impracticality of my colleague’s workload became apparent when one of her clients became involved in a prolonged hunger strike. The Department of Immigration demanded a file be presented on the client, a file that did not exist. Rather than support my colleague, Salvation Army management demanded she write a case file retrospectively.

    I believe the Salvos did not do enough to defend the human rights of the asylum seekers, and that this was a disservice, not only to the men imprisoned in Nauru, but to the Australian public who could rightly assume that the presence of a humanitarian organisation in Nauru would mean that human rights would be upheld and if those human rights were being abused, then the Salvos would voice their concerns.

    In summation, I believe that although the original motives of the Salvation Army were admirable, the implementation of the ‘Nauru mission’ suffered due to inexperience, poor preparation, and the Salvation Army’s inability to defend the asylum seekers’ human rights and handle government pressure. This resulted in a far more oppressive atmosphere for inmates that could have been avoided. Furthermore, the lack of respect shown to their own employees has left many embittered against the organisation and the experience of working in Nauru.

    Having recently been employed as a case manager for an asylum seeker settlement service in Sydney, I see how organisations can work in this intricate political space of advocating for clients while still being contracted by the government, reinforcing my belief that the role of humanitarian support in these camps is essential to the asylum seekers’ welfare.

    Mark Isaacs also wrote a guest blog which was posted on March 28 – ‘Deterring boat arrivals’.

     

    Mark Isaacs is the author of ‘The Undesirables: Inside Nauru’

     

    www.markjisaacs.com

    https://twitter.com/MarkJIsaacs

    https://www.facebook.com/isaacsmark1

     

  • Mary Chiarella. Nurses – debt and job satisfaction.

    In the AFR Laura Tingle rightly points out that nurses do not tend to fit the mould as one of those groups of fortunate students who may reap significant income returns for the cost of their university education. She goes on to point out that “modelling released by Universities Australia this week suggest nurses’ uni debts will rise from $19,398 to as much as $37,390 under the budget proposals. This is for a job paying a starting income of $48,729”. She calculates that a nursing graduate who works 6 years full time on graduation, followed by six years part-time before returning to full time work, would have a debt of $66, 195 that would take 22 years to repay.

    So this brave new world of market forces is pretty bad news for nursing recruitment. That is even if you consider that caring ought to be commodified in the first place or whether there are some things that are so important the market should protect them rather than hang them out to dry. Remarkably people often feel quite differently about these matters when they are in need of intensive or palliative care.

    But wait, there are more spanners to throw into the works. It’s also ipso facto bad news for nursing retention. This comes not long after Health Workforce Australia’s report Health Workforce 2025 (HWA, March, 2012) modelled future requirements for registered nurses and identified that, with no changes to the status quo, there would be a shortfall in registered nurses of 109,000 or 27%. As it turns out the government also decided to get rid of HWA in the last budget, so these data won’t bother them for much longer.

    Note this is a report on registered nurses. This distinction matters for safety and quality in health care.  We have an abundance of information about the impact of baccalaureate prepared RN staffing on reduction of adverse events. If the cumulative evidence from these studies were a pill, they would have stopped the trials and given the pill to everybody. Duffield et al’s work (2007) in NSW looked at the relationship between skill mix and adverse events, and governments and their advisory bureaucracies should ignore it at their peril. It is the biggest study ever undertaken examining the relationship between these two issues at unit level and she has received international acclaim as a result of it. For every 10% increase in RNs there is a 27% decrease in failure-to-rescue –we have wards way below that level today.

    But HWA’s report points out that we wouldn’t need that many nurses if we only retained 1 in 5 (ONE IN FIVE!!)  of the ones we currently lose. A 20% improvement in retention would ameliorate the predicted RN shortage –so we really only need to understand why they are leaving and do something about it. Elementary.

    A synthesis of serial investigations and reports demonstrates that the two primary reasons why nurses leave the profession are a sense that they are not valued and a belief that they are not able to deliver high-quality care. Job satisfaction is therefore connected with both skill mix and shortages. The work environment plays an important role in job satisfaction and patient safety as well, as Aiken and colleagues’ multi-country studies indicate (2010). In a number of their studies, hospitals providing “supportive” environments, in terms of staffing levels and organisational factors, were more likely to have better patient outcomes compared to less “supportive” hospitals. These findings are consistent with other surveys indicating the central role of the work environment in job satisfaction and patient safety. So a simple question, will increasing the HECs debts and anxiety improve the work satisfaction of our RN workforce Mr Abbott?

    Mary Chiarella is Professor of Nursing, University of  Sydney.

  • John Menadue. Taxes and the free riders.

    Our tax system is in a mess. It is easily exploited by the wealthy who can afford expert financial and taxation advice. We hear from Alan Jones and the Daily Telegraph about dole-bludgers. The Minister for Social Services Kevin Andrews says that disabled pensioners should get off the couch.

    Tax avoidance and tax bludging however are much greater problems.

    The Henry Review of Taxation addressed many problems but by and large the Rudd and Gillard Governments did not grasp the tax nettle. The scandal continues.

    Let us look at a few recent examples.

    Peter Martin in the SMH on 13 May reported that the latest tax statistics show that 75 ultra-high-earning Australians paid no tax at all in 2011-12.  Their average income from investments and wages was $2.6 million each. They paid no income tax, no Medicare levy, no Medicare surcharge, even though 60 of them paid private health insurance premiums. PHI always favours the wealthy. These 75 ultra-high-earning Australians had a taxable income of $1.10 each. It is hard to believe but it is true.

    The AFR on 23 May reported that ‘Almost 9,200 self-managed super funds have a balance of more than $5 million, a rise of 75% in the past three years, and that the number of funds with over $10 million had doubled. These self-managed superannuation funds are really on shore tax havens for the rich. The AFR continued ‘A lot of these tax strategies involve shuttling money in and out of super funds to trigger a lower tax rate or glean tax deductions on personal expenses. The most popular are 55 year old executives who start drawing a tax-free pension from their fund, while tipping their entire salary into it and effectively reducing their tax rate from 46.5% to about 15%. Another common strategy is to put money into super to get a tax deduction and then pull the money straight out tax-free.’

    The AFR of 21 May this year, reported the Deputy Commissioner of Taxation, Mark Konza, as saying ‘While the global debate about how to tax multi-nationals has centred on such companies as Google and Apple, energy and resources companies were also a target. The tax office is reviewing international transactions by 233 multinationals and has identified 86 of these as high risk.’ In 2011-12 according to the AFR, Australian companies shifted $130 billion offshore, mainly to minimise tax.

    In its last annual report Google Australia disclosed annual revenue of $3.6b and paid tax of only $296,000.  What was that about ending the age of entitlement!

    There are numerous tax havens. Mark Zirnsak of the Uniting Churches’ International Mission Unit examined the tax subsidiaries of Australia’s top 100 companies. He found that News Corp topped the list with 146 such subsidiaries. AMP had 15, Telstra 19 and Toll Holdings 64. All the banks had them.

    In its 2010 annual report Westfield had 56 subsidiaries. But surprise, surprise we learn from the Saturday Paper that the Westfield report of 2013 did not mention a single subsidiary in Jersey or Luxembourg.

    In May last year Business Day revealed that all but one of Australia’s top 20 companies listed on the stock exchange have subsidiaries in low tax countries or tax free jurisdiction including Hong Kong and Singapore. At least half those companies have subsidiaries in tax havens such as Bermuda, Switzerland, Jersey and the British Virgin Islands.

    We have the continuing problem of hobby-farmers who purchase vineyards or dairy farms for lifestyle reasons and also to minimise tax. In the wine industry, these hobby farmers are responsible for a significant part of the over-production of wine. to the detriment of full-time wine producers.

    According to Roman Lanis at UTS, the Westfield empire paid an effective tax rate of only 8% over the last decade. That 8% tax rate was well below the 22% average rate paid by ASX 200 companies which in turn is below the 30% company tax rate. Lanis said that tax minimisation like this is common in the real estate sector. If the full 30% tax rate had been paid Australians would have an extra $2.6b in tax revenue. This behaviour of Westfield is undoubtedly legal, but is it right?  Further the privileged children of Frank Lowy are the highest paid executives in Australia. Last year Peter Lowy was paid $11.5 m up 43% on the previous year.  Steve Lowy was paid $10.9 m, up 23%.  Westfield’s small business lessees, consumers and taxpayers are subsidising these excessive salaries. As the Americans say it is an enormous advantage to be born on third base.

    The Auditor General, Ian McPhee, has just released a report on the Australian Tax Office’s handling of high wealth individuals (HWI). He said that ‘Tax compliance of the 2,650 HWIs and 3,700 potential HWIs who had a total estimated wealth of $500 billion in 2012-13 represented a “significant revenue risk”. He added ‘These wealthiest people use a complex web of trusts and companies to hide what could be potentially billions of dollars from the tax office.’

    All this sounds like a catalogue of artful tax dodging. The age of entitlement is not over for the rich, particularly for those with inherited wealth and with tax havens littered around the world. Don’t tell me about dole bludges and people lounging on couches.

    Our problem is not government spending. It is overwhelmingly the decline in government revenue. There are some good examples above of why and how that is occurring

     

  • What to do about growing inequality in Australia.

    On Wednesday 11 June at Parliament House Canberra, former Liberal Leader, Dr John Hewson will launch a report on ‘What do do about growing inequality in Australia’. The report has been prepared by Australia21, ANU and the Australia Institute. The report can be found by clicking on below. It is embargoed until Wednesday at 11am.

    Final InequalityinAustraliaRepor (1)

    If you would like more information please contact CEO Australia21, c/- Lyn.stephens@australia21.org.

     

    John Menadue

  • Walter Hamilton. Postcard from Poland and Auschwitz

    Poland this month is celebrating the 25th anniversary of its rebirth as a democratic state. It is also marking 10 years since it became a member of the European Union. The country thus provides an interesting vantage point from which to observe Europe’s schizophrenic politics.

    To the west––notably in the UK, France and Germany––so-called Eurosceptic parties took the spoils in recent elections for the Strasbourg Parliament (with every intention, too, of being spoilers); to the east, meanwhile, Ukraine is struggling to attach as much of itself as Vladimir Putin will allow to the EU locomotive. It is the Disenchanted versus the New Believers. While voters in the west have flocked to rightwing parties opposed to sharing their baguette with new arrivals, in the east, where they’re still biting on black bread (to extend the metaphor), and where stateless Africans are scarce, most believe the opportunities flowing from European unity far outweigh the costs.

    Today’s Poland is where Ukraine hopes to be in a decade or two––which is why Kiev is willing to give almost anything––including, tragically, a measure of its people’s blood––to grab on to the EU. Poland, they tell me, is the only country in Europe to have experienced 20 years of uninterrupted growth. Able for the time being to use its own (undervalued) currency, it is experiencing a tourism boom, while the many new manufacturing and distribution plants of international firms erected on the periphery of major cities attest to an investment surge.

    That’s not to say Poland’s EU journey has been all smooth sailing. One might describe the general appearance of the country as one of ‘receding decay’. The downtown precincts of cities like Poznan and Wroclaw are sophisticated, smartly dressed and thriving; the suburbs tend to be graffiti-scarred and grey. The new rich want more, while many others on meagre wages need to work long hours to stay afloat. In a Warsaw supermarket, a woman of 70+ years who served me at the checkout at 8am was still there when I went back 11 hours later. Our host in Warsaw, a retired teacher, also in her 70s and still working part time, bemoaned the 13% national unemployment rate and the much higher joblessness (26%) among the young. As we drove out of the capital she pointed out abandoned industrial plant (Soviet-era and obsolete), which she blamed on the EU experience. And where was the livestock that every family farm once proudly displayed? Disappeared under mass-produced food imports. But if I detected nostalgia for the past, she quickly corrected me: ‘Communism was awful through and through; nobody, except perhaps some party boss, wants to go back to that’. Food queues are no more, inflation is zero and, even if unacceptably high, current unemployment is below the long-term trend, and falling.

    Poland, historically a gateway between East and West, now emphatically faces west. When President Obama was in Warsaw recently, the Polish government repeated its request for NATO to establish new bases on its territory. Sensibly, Obama refused to be drawn.

    If Polish history teaches us one thing, it is that all frontiers lie: they lie to those who believe they can secure the homeland, and they represent lies to those who wish to change them. Heading north out of Krakow, our driver Michael pointed out two buildings on either side of the road ahead. ‘Prepare your passports,’ he joked. ‘We are now leaving Austria and about to enter Prussia.’ The border checkpoints, operational until 1918, stand as reminders of the eighteenth-century partition of Poland when it ceased to exist as a nation (as it did again from 1939). The idea behind European union––distinct nations united by a shared destiny––is an undoubted improvement for Poles after centuries of partition and domination. Affirming this, as they do, they take a wary glance back in the direction of their old nemesis, Russia. Though the fighting in Ukraine seemed far removed from the beer and food-laden tables of Krakow’s teeming Old Square, the ordinary Poles I spoke with believed Moscow’s territorial ambitions extend well beyond Crimea.

    Frontiers are a European obsession these days, much as they are in Australia. With internal borders essentially open, an unauthorized entrant can make his or her way to any of the member nations of the EU. If they survive their journey in a leaky boat across the Mediterranean (Italy has received 40,000 unauthorised arrivals, mainly crossing from Libya, so far this year), theoretically they might end up in Bayeux or Bonn or Birmingham (or so the sloganising goes; the reality is somewhat different). This, more than any other issue, is hardening attitudes and inflaming rhetoric, and threatening the European experiment. New scapegoats have been found to blame for economic dysfunction and social stress, in a pattern that has terrible antecedents.

    In Block 6 at Auschwitz, the main hallway is covered with photographs of former inmates of the notorious concentration camp. Nothing, not all the books and films, can completely prepare you for a visit to Auschwitz-Birkenau. It is fine and warm on the day we are there, and many hundreds of tourists are being guided through the two camps (Birkenau, or Auschwitz II, the purpose-built extermination camp, is many times bigger than the other). Among the images on the wall at Block 6, I come across that of a Polish girl aged about 10. The caption tells me that she survived only a fortnight after being brought to Auschwitz in 1942. My eye alights on the next photograph: her identical twin sister.

    There is something about their expressions I cannot immediately fathom. Bewilderment I see, certainly, and fear; but what is the other thing? It would be grotesque to compare the sufferings of the 1.3 million people, mainly Jews, who perished in Auschwitz to the present-day treatment of asylum seekers in Italy or Australia, and I do not intend to do so; and yet, as I walk past the rows of photographs, taking in the individual faces and reading the individual names, it occurs to me how easy it is to forget that, behind barbed wire somewhere bleak and inhospitable today, and also incarcerated for no crime and provided no date of release, are many nameless, faceless individuals for whom we have a duty of care. It becomes a compelling thought when in Auschwitz, but it should not be necessary to travel here to feel it.

    And now I understand what it is about the portraits of the twin sisters that has so puzzled and disturbed me. In their anguished moment before the camera they ceased to be photographer’s subjects, just two more victims of a distant horror. Rather, they became cameras pointing at us, capturing an image of our souls, interrogating our hearts and consciences. It seems facile to speak of ‘ghosts’ in such a context, but for the first time in my life I truly felt that the mirror had been reversed.

    Walter Hamilton is the author of Children of the Occupation: Japan’s Untold Story.

     

  • John Menadue. Have we too many doctors?

    There are no international comparisons that I can find that show that we have a shortage of doctors in Australia. In fact, we may be moving into a situation of having a surplus of doctors.  In its “Health at a glance” the OECD found that we are above the average in our supply of doctors. The OECD provided details of “practising doctors per 1000 of population in 2011” for over 40 major countries. The OECD average was 3.2 practising doctors per1000 of population. Australia was slightly above the average with3.3 practising doctor’s per1000 of population. For the Netherlands it was 3.0, for the UK 2.8, for NZ 2.6 and Canada 2.4. The top four countries with over 4 practising doctors per 1000 were Greece, Russia, Austria and Italy. The OECD is quite explicit about trends in Australia It says “in several countries (e.g. Australia, Canada, Denmark, the Netherlands and the UK) the number of medical graduates has risen strongly since 2000 reflecting past decisions to expand training capacity…In Australia the number of medical graduates has increased two and a half times between 1990 and 2010 with most of the growth occurring since 2000”

    In 2004 when Tony Abbott was Minister for Health he decided against advice that we had a shortage of doctors. As a result the number of domestic students graduating from medical schools in Australia increased dramatically from 1,287 in 2004 to 2,507 in 2011. It has been described as a “tsunami” of medical graduates. The OECD found that in 2011 with 12.1 medical graduates per 10,000 of population we were well above the OECD average of 10.6. We know that this increase in numbers is making it very difficult to find training places for the increased number of medical graduates.

    We also know that with bulk billing and with patient dependence on the advice of their doctor about future appointments, tests and referrals, doctors have an ability to generate work for themselves and other professionals. Doctors can and do drive the demand for their services through fee for service.  That has serious cost implications.
    Apart from the total numbers the other important issue is the distribution of doctors across Australia.  All the data shows serious shortages of doctors and other health professionals in rural and remote Australia. These shortages are occurring despite the fact that we now have about 3,000 International Medical Graduates (IMGs) who are tied to areas of need. These IMGs have performed a useful role in rural areas although there has been some concern over language and sometimes professional skills. However it seems logical and legally defensible (“civil conscription”) that if we can determine where IMGs can work, why can’t we do the same for Australian medical graduates and insist that new provider numbers only be issued according to need in Australia. We don’t need more provider numbers and doctors in Belleview Hill and Toorak, but we do need them in rural and remote Australia.  Through governments, taxpayers subsidise medical education and about 80% of the remuneration of doctors comes from government. There is a legitimate interest in new doctors working in areas of need, at least in the early stages of their career. Hopefully they will find professional and personal satisfaction in country areas and decide to stay.

    Another option to overcome shortages of doctors in rural Australia would be to auction provider numbers by postcode but that would probably be too radical for many professional people who don’t like open markets.

    In short we are moving to a surplus in the total number of practising doctors but serious shortages still exist in rural and remote Australia which could be addressed, at least in part by limiting new provider numbers to areas of need.

    Why can we send teachers to areas of need but not doctors?

     

  • John Menadue. The Blame Game in health

    Attempts to resolve the Commonwealth/State blame game have been unsuccessful and expensive. Time and time again federal governments try and buy off state criticism by spending more taxpayer’s money without any real improvements in the delivery of health services.

    This futile blame game is not surprising in a federation where there are nine departments of health for a population of 23 million.

    Over many years there has been confusion about the role of the Commonwealth in hospitals. In 2007 John Howard offered to underwrite community organisations prepared to take over State hospitals. (The issue at the time was the Mercy Hospital in Launceston.) In 2009 in his book Battlelines, Tony Abbott said that a Commonwealth withdrawal from hospitals would be a ‘cop out’. It would be “anachronistic and inefficient”.  Kevin Rudd threatened to take over State hospitals if a satisfactory arrangement could not be made with the States but backed down even though opinion polling showed strong support for a Commonwealth takeover of State Hospitals.

    The Abbott Government now seems intent on winding back the commonwealth’s role in health. It is proposing a reduction of $80 billion in school and hospital funding over the decade to 2024-25.As a result the states are into the blame game again

    The budget announcement is a major breach of faith between the Commonwealth and the States.

    • The Commonwealth has unilaterally cut $1 billion from State budgets from 2017.
    • The Commonwealth will no longer honour an agreement to fund some growth in State hospital costs. The Commonwealth had pledged to partly fund this growth in State hospital costs, provided those costs were based on efficient costs determined by The Independent Hospital Pricing Authority. (We know that there are major differences in costs not only between hospitals but also within hospitals.) This increase in funding based on improved performance by State hospitals has now been abandoned.
    • Furthermore, by sharing the costs of hospital growth for the first time, the Commonwealth had a direct interest in containing hospital costs by making primary care work better and reduce hospital admissions.

    Following this threatened withdrawal of $80 million to the states, the Prime Minister went on the front foot in describing the federation as ‘dysfunctional’. He said that we needed to ‘fix the federation’ and to ensure that ‘the states are sovereign in their own sphere’.

    I can understand his frustration with the federation, but his proposal would take us backwards in a quite dangerous way. His comments on federalism are quite contrary to what he was saying several years ago and now derive more from ideology about ‘state rights’ than common sense and a modern view of our economy and society.

    As Michael Keating in his five part series on this blog, pointed out, there are good reasons for the pre-eminence of the national government in many fields.

    • Unlike the 1890s before federation we now have a national market in almost all key aspects .That national market has to respond to growing global pressures and competition.
    • Responsibilities of the federation have grown enormously since federation. In the 1900s for example pensions did not exist.
    • The national government’s dominance of taxation is clear-cut and will not be reversed. That domination is essential for good economic management.

     

    But that still leaves us with the fact that many commonwealth and state functions are inter-related. Those inter-relationships must be sensibly managed.

    Personally, I would favour a Commonwealth takeover of all state health functions and particularly hospitals. We need national leadership and clear responsibility. In an optimal situation I would like to see the states abolished altogether and replaced by a smaller number of consolidated local governments.

    But that is not going to happen, short of a major crisis. That is why I have proposed what I have called a ‘Coalition of the willing’. In such an arrangement the Commonwealth should offer to set up a Joint Commonwealth/State Health Commission in any state that will agree.  That Commission would be jointly funded by the Commonwealth and the State. There would be one pool of money. This joint commission would plan the delivery of health services in the State and so provide more cohesive hospital and non-hospital health services. It would be a small planning and funding commission with little or no net increase in bureaucratic overheads. In any event any small increase in these costs would be minimal compared with the enormous present costs of commonwealth and state systems duplication and the costs arising from lack of integration between commonwealth and state services. For example the Productivity Commission estimated that 750,000 state hospital admissions could be avoided annually if there were effective interventions in the three weeks before hospitalisation. Those interventions are in the hands of the commonwealth that funds general practise

    In such a joint funding and planning arrangement the delivery of health services would continue through existing health agencies, Commonwealth, State and local government. The new Commission would be jointly appointed by the two governments and with agreed and transparent dispute resolution arrangements. In the event of a disagreement, the Commonwealth position should prevail as it would be the chief funder.

    Tasmania and SA should be obvious starters for such a joint commission given their size and difficult financial position. Hopefully success in one State would then encourage other states to swallow their pride and improve their health services by cooperating with the Commonwealth in a joint commonwealth/state health commission.

    In March 2007, I set out this proposal in more detail .

    I still believe that this is the most sensible and practical way to solve the commonwealth/state impasse and blame game in health. This proposal could also be applied in the education field to resolve the disputes and the blame game in education between the commonwealth and the states.

    I think most Australians are sick of the blame game in health. The problem can be resolved but, in the first instance it requires a political agreement between the commonwealth government and any state that wants to cooperate. With such political agreements implementation would be relatively easy. Politics is the hard part.

    A more modest start would be for the Commonwealth and a State to establish joint arrangements on a regional basis.Commonwealth and State funds would be pooled in that region and agreement negotiated for a health plan for the delivery of all health services in that region.

    We need to coordinate Commonwealth and State health services.

     

  • Tuong Quang Luu, AO. Cambodia, a deterrent or an opportunity lost?

     

    My old friend looked straight at the stage with a strong determination, and perhaps, a touch of sadness. Sitting next to him, I sensed that the events of 60 years ago for Bern Brent, were rolling back to him as he mentally relived his teenage years. The occasion was a celebration of the 60th anniversary of the Dunera Boys’ arrival at SydneyHarbour in 1940.

    I first met Bern in the late 1950’s when he taught me English as a lecturer at the University of Saigon. He was my first contact with Australia. Unbeknown to me at the time, Bern had been a ‘displaced person’ or an unattached refugee minor prior to the 1951 UN Refugee Convention. It was an unforeseen irony for both of us that I should follow in his foot steps a quarter of a century later.

    Berlin-born to parents of Jewish background, the 16 year-old Bern was sent by his mother to London to escape the Nazi tyranny and persecution. His search for safety went terribly wrong when he and thousands of others in the same circumstance were shipped on HMT Dunera by mistake to Australia. He became unwittingly a ‘boat person’ joining the First Fleeters in 1788 and other subsequent arrivals by boats from the United Kingdom. The Crown or more correctly His / Her Majesty’s Government organised these transportations as a state policy, so no one and much less the Aboriginals dared to label the organisers as today’s ‘people’s smugglers’

    Indeed, Australia has resettled many hundreds of thousands of displaced persons mainly from post-war Europe and refugees from all parts of the world, including those who came directly to Australia.

    In 1977, Hieu Van Le, a young man in his twenties, waded with his wife and scores of other exhausted Vietnamese asylum seekers to the shores of Darwin in search of freedom. Found to be refugees, they were allowed to stay permanently in this country. Hieu Van Le has subsequently gone on to become the longest serving member and chairperson of South Australia Multicultural and Ethnic Affairs Commission, and is currently lieutenant governor of the state.

    Of course not everyone amongst the Australians of a refugee background can be as successful as Bern Brent or Hieu Van Le in their respective careers, or as Frank Lowy, an entrepreneur in the business world. By and large, surviving refugees tend to possess a strong will to overcome calamities and generally demonstrate a good entrepreneurial spirit to succeed. Their contribution to Australia has never been in doubt and their commitment to this country as a democracy has never been questioned.

    Until 2013, Australia normally allowed on-shore asylum seekers who were found to be Convention refugees to resettle, subject to security clearance. Only when both sides of politics, in my view, competed against one another for electoral advantage that denial of a permanent residency in Australia became part of a suite of deterrent measures against potential asylum seekers.

    But why was Cambodia chosen?

    The government has said correctly that Cambodia is now a signatory of the 1951 Refugee Convention. But Cambodia – and for that matter, Papua New Guinea and Nauru – are the poorest amongst developing countries. One can assume that these three countries have agreed to settle refugees only on the basis of generous financial aid from Australia, but one cannot assume that Australian tax payers’ monies will be properly spent as intended, because local corruption is rampant.

    Cambodia has promised that it will provide welfare and education to refugee families who come ‘voluntarily’ as settlers, while at the same time failing to look after its own people, including around 1 million ethnic Vietnamese Khmers without citizenship, employment and education.

    As a signatory of the 1951 Convention, Cambodia has an abysmal record of treating refugees and at times has sold them down the river as in their dealings with Beijing (relating to Uighur asylum seekers), and Hanoi (relating to Vietnamese dissidents). Some Vietnamese dissidents supposedly under the UNHCR protection in Cambodia had to escape a second time to Thailand to avoid forced repatriation back to the Socialist Republic of Vietnam.

    To force those asylum seekers who are found to be refugees by Australia under the Australian legal mechanism is not just to deny them a legitimate desire to live in a democracy after fleeing authoritarian regimes, but also to take away from Australia a group of potentially good contributors

    The writer came to Australia as a Vietnamese refugee and is a former Head of SBS Radio (1989-2006)

     

  • John Menadue. Get ready for El Nino, Tony

    The late Senator Moynihan from New York famously said that everyone is entitled to their own opinion, but no one is entitled to their own facts. Tony Abbott and Greg Hunt along with Alan Jones and Andrew Bolt have strong opinions on climate change that are not based on facts.

    If El Nino develops as presently indicated, Tony Abbott and Greg Hunt will tell us that its severity has nothing to do with global warming. Yet the facts tell us otherwise about the relationship between El Nino and global warming.

    In their political opportunism over the carbon tax, Tony Abbott and Greg Hunt have done our children and our planet a great disservice. The carbon tax is good policy but handled in a most politically inept way. But when will Messrs Abbott and Hunt tell us that they have got in wrong on global warming – that it is a serious problem and must be addressed with strong leadership and courage. And by the way, where is Malcolm Turnbull on climate change and global warming? He is nowhere to be found.

    On May 8 the Climate Prediction Centre and the International Research Institute for Climate and Society in their monthly report said that the chance that El Nino will develop in Australia has a probability of 80%. It is likely to occur during our late autumn and early winter this year. This group of scientists remained non-committal on the strength of El Nino, preferring to wait for another month. They did suggest however that the next El Nino could be severe.

    Previous El Ninos, particularly the Super El Ninos in 1982 and 1997, led to major disruptions of fishing and agriculture, severe bushfires and high death rates. And science tells us there is a link between global warming and El Ninos.

    • On 28 October last year the UNSW Climate Change Research Centre (CCRC) said

     “Our research suggests in a warming world we are likely to see more extremes of El Nino and La Nina events which over the past decade in Australia have been related to extreme flooding, persistent droughts and dangerous fire seasons.”

    • On 11 November 2013, CCRC said “Unusual El Ninos, like those that led to the extraordinary Super El Nino years of 1982 and 1997 will occur twice as often under even modest global warming scenarios.”
    • On 20 January this year, CCRC said “Extreme weather events fuelled by unusually strong El Ninos such as the 1983 heatwave that led to the Ash Wednesday bushfires in Australia are likely to double in number as our planet warms.”

    It is a case of ‘watch this space’. According to the experts, there is an 80% chance of El Nino occurring later this year. It may be a very severe El Nino. It is also clear that global warming is increasing the risk of severe El Ninos.

    Are Tony Abbott and Greg Hunt ready to explain the next El Nino and its relationship to global warming? The Coalition budget is premised on a set of optimistic economic assumptions concerning growth, trade and employment, which are based particularly on our agricultural and mineral production.

    We should keep a close eye on El Nino and what scientists tell us in the next few months. They tell us that El Nino could fizzle, but the probability of that occurring is low. We already know that at present Eastern Australia is drier and hotter than usual.

    El Nino may put global warming and climate change back on the political agenda in a way that Tony Abbott and Greg Hunt never expected.

     

  • NY Times – Capitalism Eating its Children.

    Yesterday I posted a blog ‘Are our Bankers Listening or Caring’. It referred to speeches by the IMF Chief, Christine Lagarde, and the Governor of the Bank of England, Mark Carney. They were speaking at a ‘Inclusive Capitalism’ conference in London. 

    Today the New York Times has carried an op ed piece by Roger Cohen entitled ‘Capitalism Eating Its Children’. Cohen draws extensively on the speech by Mark Carney. The op ed piece in the New York Times can be found at:

    http://nyti.ms/1owYMKI

    John Menadue

  • John Menadue. Are our bankers listening or caring?

    On Wednesday in London at a conference on ‘inclusive capitalism’ the Governor of the Bank of England, Mark Carney, and IMF Chief, Christine Lagarde, gave the international banking community the most severe pasting that I can ever recall of a  particular industry, or at least one that  operates “legally”.

    They said that bankers regarded themselves as different and not bound by the need for economic and social inclusion that is essential in a modern society. Both Carney and Lagarde said that the actions of the banks were excluding them from mainstream society. It is true of banks in Australia as much as banks in Europe and the US.

    Mark Carney said

    • “Capitalism is at risk of destroying itself unless bankers realise that they have an obligation to create a fairer society”
    • “Bankers had operated a heads-I-win-tails-you-lose system”. He questioned whether “Traders met ethical standards and that those who failed to meet high professional standards should face ostracism.”
    • “The basic social contract at the heart of capitalism was breaking down with rising inequality.”
    • “The most severe blow to public trust was the revelation that there were scores of too-big-to-fail institutions operating at the heart of finance. Bankers made enormous sums in the run-up to the [GFC] and were often well compensated after it hit. In turn taxpayers picked up the tab for their failures.”
    • “One of the lessons of the GFC was that compensation schemes had delivered large bonuses for short-term returns and encouraged individuals to take on too much long-term risk. In short, the present was over-valued and the future heavily discounted.”

    Christine Lagarde also cut through the bankers’ self-deluding spin.

    • “The financial services industry had not changed fundamentally in a number of dimensions since the crisis”. She reeled off ‘a list of scandals, including money-laundering and the manipulation of bench marks such as Libor.”
    • “Progress on building a safer financial system has been too slow, primarily because of industry attempts to halt the introduction of tougher new laws.”
    • “While some changes in behaviour are taking place, these are not deep or broad enough. The industry still prizes short-term profit over long-term prudence, today’s bonus over tomorrow’s relationship.”

    The details of banking behaviour in Australia may be marginally different but the thrust of Carney and Lagarde’s criticism is valid in Australia. The moral centre of gravity of our bankers and their boards of directors is hard to discern. Consider

    • The combined cash profit of the big four Australian banks last year was over $27 billion. They enjoy a government guaranteed oligopoly.  Time and time again the banks refused to pass on reductions in official interest rates in Australia or the reduction of offshore rates. Surely we need a banking supertax and a Tobin tax on international financial transactions. A 0.2% levy on bank assets above $100m would raise an estimated $11 b over four years The super profits of the banks are promoting the “rising inequality” that Mark Carney warned about.
    • The CEOs of the our four banks last year had a combined take-home pay of over $35 million; Cameron Clyne, NAB $7.8 million; Mike Smith, ANZ, $10.4 million; Gail Kelly, Westpac, $9.2 million and Ian Narev, Commonwealth Bank, $7.8 million. There are various share rights on top of this. These salary packages are ethically indefensible. The market is rigged by so called independent remuneration “experts”, board directors and senior executives’. Why should such CEOs expect wage restraint from anyone else? In 2001 CEOs in Australia were paid about 20 times average weekly earnings. It is now over 70 times. I see no reason why anyone should be paid more than the $500,000 salary package of the Prime Minister who works harder and takes more risks than any bank CEO. If shareholders won’t address this corporate greed, the government should do so through the tax system. The banks are working against a “fairer society” that the Governor of the Bank of England referred to.
    • We recently saw on 4-Corners the Commonwealth Bank financial planning scandal which victimised thousands of retirees. Instead of facing up to the moral issues involved, the bank set its spin doctors to work. It is the sort of “scandal” that the IMF Chief would have had in mind
    • The banks have been leading the charge to roll back the Future of Financial Advice (FOFA) which is designed, amongst other things, to protect superannuation contributors from the conflict of interest of financial planners employed by financial institutions. Financial advice has become a honey pot for the banks.  Last year the financial advising industry pulled in $21 billion from the superannuation pool. There are 18,000 financial planners in Australia and four out of five of these are owned by a bank or an insurance company.  In the name of ‘winding back red tape’ the bankers are lobbying hard to protect their oligopoly rents. Their greed must be contained. But as Christine Lagarde put it the banks want to “halt the introduction of tough new laws”
    • We have grown tired of the campaign by the Coalition concerning our public debt of $300 billion. But the serious debt is household debt owed principally to the banks of almost $2 trillion. In proportion to our household disposable income this is one of the highest debts in the world. But where are the business economists, mainly employed by the banks, in warning us of the risks of this level of private debt which has been induced mainly by their employers. The banks are promoting what  Mark Carney warned about  ,”individuals taking on too much long term risk”

    The warnings of Carney and Lagarde are highly relevant to the behaviour of Australian banks. They still regard themselves as a privileged and untouchable elite. They are losing our trust fast. They are eroding our social capital.

  • Geoff Hiscock. Onus on Abbott to forge closer ties with India

    ​As a young man, Tony Abbott backpacked across India in 1981, and spent six weeks at the Australian Jesuit mission in Bihar state. He was fascinated by the country’s many contrasts, from its bullock carts to its nuclear power stations.

    His Indian exposure since then has been limited, but the Australian Prime Minister says he has always taken India seriously and has made it clear in his speeches and his interaction with the Indian community in Australia that he wants a much closer and deeper relationship.

    With Narendra Modi as India’s new leader, he has chance to do just that. Abbott was quick to call Modi and congratulate him when his Bharatiya Janata Party (BJP) scored a decisive electoral victory earlier this month, saying on May 17 that he looked forward to strengthening ties between the two countries.

    Modi’s priorities, of course, are not the same as Abbott’s. Modi lives in a much more volatile world, where relations with Pakistan, China, Sri Lanka, Bangladesh, Myanmar, Nepal and Afghanistan take precedence, and where domestic terrorism, social stability, food and energy security, job creation, infrastructure development and health issues are of overwhelming importance.

    Still, like Abbott, Modi is conservative, pragmatic and pro-business, with a mandate to get things done. Abbott and Modi may not otherwise be natural soul mates, but Abbott is eager to turn what he calls a “neglected” Australia-India relationship into something much more substantial and balance it against the other Asian heavyweight, China, in the areas of trade, strategic cooperation and people to people ties.

    India’s GDP of $1.8 trillion lags well behind China’s $10 trillion, but with an economic pick-up on the cards and a growing middle class of several hundred million out of a total population of 1.25 billion, India is a target market of considerable size.

    For Australia, there is potentially much more trade in energy and resources (including ultimately, uranium) and agribusiness, and in services such as education, engineering and finance. For India, there are opportunities in manufactures such as medicines, jewellery and motor vehicles and in services such as tourism and information technology. In terms of direct foreign investment, India already has built stakes in Australian coal mines, other metals and food.

    The raw statistics show just how much work remains.  Australia’s total two-way trade in goods and services runs at about $625 billion a year, but India accounts for only about $17 billion of this, or less than 3 per cent. That is roughly the same amount of business Australia does with Malaysia, but is way behind trade with the big four of China ($150 billion), Japan ($70 billion), the United States ($54 billion) and South Korea ($30 billion). Even Singapore ($27 billion), New Zealand ($21 billion) and the UK ($19 billion) rank ahead of India among Australia’s main trading partners.

    In his first major foreign policy speech in Melbourne last year, Abbott ascribed the relatively modest trade flows partly to “India’s long preoccupation with the non-aligned movement and statist economics; and partly because of Australia’s historical amnesia and fascination with China.”

    Certainly Australia’s economic relationship with China has rocketed ahead in the past two decades and it would be fair to say that while Abbott is a little more wary of China than his recent predecessors Julia Gillard and Kevin Rudd were, he has continued the fascination. In April Abbott led a large trade delegation to China, Japan and South Korea; at the Boao Forum on the Chinese island of Hainan, he told his hosts: “Australia is not in China to do a deal, but to be a friend. We don’t just visit because we need to, but because we want to.”

    His avowed goal is to add a China free trade agreement as quickly as possible to those already signed with Australia’s two other big North Asian trade partners. So far, we haven’t seen much sense of urgency about a free trade agreement with India, though in 2011 Australia and India did begin negotiations for an FTA-style “comprehensive economic cooperation agreement.”

    But it’s not an “either-or” thing with China and India. There is ample opportunity for Australia to grow its business ties with India without threatening anything it has with China. The first step is for Abbott to build some personal rapport with Modi and to take any residual heat out of the relationship left by past kerfuffles over perceived discrimination and the attacks on students in Melbourne.

    Unless Abbott can shuffle his packed schedule to squeeze in a visit to India in the next few months, it is likely his first chance to meet Modi as Prime Minister will be at the G20 leaders’ summit in Brisbane in November. Before that, Australia will host the G20 trade ministers’ meeting in Sydney in July, with India’s new Trade Minister likely to attend. At both these events, the focus will be global rather than bilateral.

    In Melbourne last December, Abbott observed that “no one should underestimate India now, nor its potential to be a global superpower in this century.” His challenge – and to a lesser extent that for Modi – is to expand trade, investment and defence ties, and nurture some new areas of mutual interest that go beyond the old staples of democracy, rule of law, the English language, and a love of cricket.

    Geoff Hiscock writes on international business and is the author of several books, including “Earth Wars: The Battle for Global Resources” and “India’s Global Wealth Club,” both published by Wiley

     

  • Michiya Matsuoka. Japanese collective ‘atmosphere’ and the power of the media.

    In John Menadue’s blog of 31 March, 2014, he expressed strong concern for recent events concerning Japan’s Prime Minister, Shinzo Abe, and warned that Japan was fast approaching a nationalistic agenda and revisionist view of history. (See re-post today)

    I have these same misgivings about Japan and fully agree with John Menadue’s concern, including the role and responsibility of NHK (the Japanese public broadcaster similar to the Australian ABC and British BBC).

    Although NHK is an independent corporation, its annual budget is subject to review and approval by the Diet.

    A twelve member Board of Governors oversees NHK and makes final decisions. Under the Board of Governors, NHK is managed on a full-time basis by an Executive Board.  The new Director General of the Executive Board is Katsuto Momii, a very close friend of Prime Minister Abe.  Abe also appointed another four members of the Board of Governors.

    On Katsuto Momii’s first day as Director General, 25th January 2014, he asked all members of the Executive Board to submit “a resignation paper with signature and without date” – which they did. In April, Momii withdrew the resignation papers following criticism by the public.  At the press conference on the same day, Momii said it was his personal view that the recruitment of comfort women during WWII was not a problem. He also said that current members of the Executive Board were appointed by the former Director General – and as the new Director General, he would do things in his own way.

    In February, Naoki Hyakuta, a new member of the Board of Governors close to PM Abe, spoke in support of a candidate for governor of Tokyo Metropolitan, the ex-Chief of Staff of the Air Self Defence Force. Hyakuta has been reported as saying that the Tokyo War Crimes Trial was designed to “fool people”.

    Another new member of the NHK Board of Governors, Ms Michiyo Hasegawa, a philosopher and University Professor Emeritus, whilst claiming that the public broadcaster is politically neutral, wrote an article praising a right-wing activist who committed suicide. She also attracted public dispute in January this year saying “Women’s most important job is to give birth and raise children. Women should prioritise children more than actively working outside”.

    The new Director General and members of the NHK Board of Governors are known to share PM Abe’s views on amending the Constitution, his interpretation of history and his visit to Yasukuni Shrine – among other things.

    As a citizen, I am extremely worried that NHK, the most influential public media outlet which should be politically neutral, might be leading Japan in the wrong direction.

    Why do these new members continue to speak out and take actions that do not respect NHK’s essential political neutrality? Why did all the members of the NHK Executive Board submit their resignation papers to the newly-appointed Director General Momii, without hesitation?

    We can find a key to answering these questions in a book widely read in Japan for nearly half a century.  In 1977 Shichihei Yamamoto, a prolific Japanese writer, wrote “’Kuuki’ no Kenkyuu”, usually translated as ‘The Study of the Atmosphere’ – where ‘kuuki’ or ‘atmosphere’ refers to a collective socialised mentality that Japanese people are said to feel or share without actually questioning its basis. Yamamoto pointed out that this ‘atmosphere’ is created by leaders and has the power to lead people as a group in a particular direction without any logic or contention.  I believe many Japanese people tend to make decisions influenced by this ‘atmosphere’ without thinking logically or accepting scientific data – especially if they belong to influential groups or organisations. Yamomoto’s thesis is that ‘atmosphere’ allows overwhelming emotions and group pressure to transcend logical behaviour.

    NHK’s series of incidents may well be the result of ‘atmosphere’, created by PM Abe, who has the power and authority, supported by the majority of Diet seats and the support of his Cabinet (51% as of April 2014).

    I am very concerned that NHK, managed and overseen by Director General Momii and other PM Abe supporters, will take us in a dangerous direction.  Influenced by NHK, the largest public media outlet, the Japanese people may be caught up in Abe’s ‘atmosphere’ and become incited towards war.

     

    Michiya Matsuoka is a former executive of a major advertising agency in Japan. He was also CEO of the agency in Australia from 1989 to 1993 after nine years in New York.

  • John Menadue. Australia-Japan – friends should be frank.

    Tony Abbott is shortly to visit Japan. He should be aware of the serious ultra-nationalist trend in Japan. That ultra-nationalism in the past has brought tragedy to the Japanese people and our region. The chief exponent of this ultra-nationalism in Japan is Prime Minister, Shinzo Abe,who will be his host.

    I believe that Japan is at a tipping point in its domestic politics and in its relations particularly with China and the Republic of Korea – countries that it has invaded and colonised in the past. 

    I am presently in Japan and my friends express to me increasing concern about the rising trend of ultra-nationalism. The nature of that ultra-nationalism is set out in my earlier post, which is below. My friends grew up in Japan where the majority was clearly influenced by the tragedies of the past and wanted to maintain a pacifist approach to the future. That approach has served Japan well since 1945. There is now concern however that generations of young people in Japan have never experienced the tragedy that war brought to their parents and grandparents. 

    There are encouraging signs that elements within Prime Minister Abe’s government and also Coalition partners, Komeito, are concerned about what Prime Minister Abe proposes. Hopefully they will prevail. Tony Abbott would be wise to urge caution on his host when he visits Japan. But I wonder if he understands what is at stake.      John Menadue

    Tony Abbott has told us that Japan is Australia’s best friend in the region. I don’t think the relationship with Japan should be expressed that way, but if we take what Tony Abbott says literally, a good friend should tell the Prime Minister of Japan Shinzo Abe that there is disquiet in the region and amongst Japan’s many friends about the ultra-nationalist course that Prime Minister Abe is pursuing.  His actions and those of his colleagues including the Foreign Minister are causing particular concern in China and in the Republic of Korea who suffered from Japanese occupation. This is not just a silly cultural war that PM Abe is conducting over words and with few consequences. With Japan’s history this is serious. Germany has gone to great pains to purge so much of its past. But Japan’s past keeps coming to the surface when it is bidden.

    Prime Minister Abe upped the ante in a visit to Yasukuni Shrine, the core of the discredited State Shinto of earlier years that brought tragedy to Japan and the countries of the Pacific. Prime Minister Abe says it was a private visit but it was a public denial of Japan’s wartime atrocities. Yasukuni honours the souls of 2 million war dead but also fourteen Class A war criminals. It features a museum that attempts to whitewash Japan’s war record. The US Embassy in Tokyo objected immediately to Prime Minister Abe’s visit to Yasukuni.  Julie Bishop took a month to respond and in a very lame way. “Such events (as the visit to Yasukuni Shrine) escalate the already tense regional environment”she said.

    Prime Minister Abe has clearly set out to rewrite history and provoke both China and the ROK. His actions also offend the memories of Australian service people who suffered at the hands of the Japanese Imperial Army. It is remarkable that he attacks the ROK which is led by a conservative Korean President. His ultra-nationalism blots out any affinity with a fellow conservative. In his plans to rewrite Japanese history he continues to apply pressure to the Education Ministry and teachers to ensure that their textbooks are rewritten to be more “patriotic”.

    Prime Minister Abe has made it clear that he wants to amend Article 9 of Japan’s war renouncing constitution and develop a significant counter-strike military capability. I have not yet heard any suggestion that he will discuss this with Japan’s neighbours or Australia.

    With his symbolic visit to Yasukini Shrine PM Abe can rely on a coterie of acolytes to carry on his revision of history.  He has appointed five new members out of twelve to NHK, Japan’s public broadcaster which is similar to our ABC. All the five new members are close to the Prime Minister. That is not so surprising, but one of the appointees, Naoki Hyakuta, described the Tokyo War Crimes Trials as designed to ‘fool people’. Hyakuta went on to add that the 1937 Nanjing massacre of possibly 300,000 Chinese by the Japanese Imperial Army was a fiction.

    Katsuto Momii, with the strong backing from Prime Minister Abe, has been appointed Director-General of NHK. At his first press conference Momii said that the recruitment of ‘comfort women’ was not a problem. He has refused to retract that comment. He endorsed Abe’s visit to the Yasukuni Shrine.

    The Asahi Shimbun reported this week that “books and periodicals highly critical of China and South Korea are flying off the bookshelves”. At the Tokyo Municipal election last weekend Toshio Tamogami an ultra-nationalist candidate ran fourth with 611 000 votes or 12% of total votes. He was a former Air Self-Defence chief who said during the election as reported by Asahi Shimbun that “the war of aggression, the 1937 Nanking Massacre and comfort women were all fabricated”. The Secretary General of PM Abe’s LDP party said that “Tamogawa was in complete agreement with LDP policies.” The public mood is moving to the nationalist right.  More and more people including officials will bend with the prevailing wind that PM Abe is generating.

    To show his friendship to Japan, Tony Abbott sided with Japan over the disputed islands in the East China Sea. Australia should stay out of that dispute. In respect of the dispute over the islands with China, Prime Minister Abe has suggested that war between Japan and China is possible as he made clear by likening the situation to 1914.

    One cannot visit the sins of the grandfather on the son or the grandson, but Prime Minister Abe  is pursuing the same hostile and ultra-nationalistic attitudes to the region as shown earlier by his grandfather, former Prime Minister Nobusuki Kishi. In 1935 Kishi became a top official in the industrial development of Manchuko, where he was subsequently accused of exploiting Chinese labour.  He was appointed Minister of Munitions by Prime Minister Hideki Tojo. After the war, Kishi was held at Sugamo prison as a Class A war crimes suspect.  Unlike Tojo, he was released from Sugamo prison in 1948 and was never indicted or tried. Kishi’s relationship with grandson Abe may seem unimportant but they both share similar ultra-nationalist aspirations.

    When Tony Abbott visits Japan in April he should tell Prime Minister Abe that neighbours and many friends of Japan are worried about the course on which he is set. He is the most belligerent leader that we have seen in Japan for decades. He foolishly attempts to conduct diplomacy with the US and Australia over the heads of his neighbours. Their hostile response is not surprising. We have an interest in telling the Japanese Prime Minister and being frank with him that we are concerned.

    Many countries and many people have put great effort into reconciliation with Japan and its people. I have tried to do my part. We must ensure that that reconciliation is not undermined by a reckless Japanese Prime Minister.

    John Menadue was Australian Ambassador to Japan 1977-1980. He was instrumental in the establishment of the Australia Japan Foundation and was subsequently Chair of the Foundation. He was also instrumental in establishment of the Working Holiday Agreement with Japan, the first between Australia and a country in the Asian Region. He was awarded the Grand Cordon of the Order of the Sacred Treasure by the Japanese Emperor in 1997 for services to Australia-Japan relations.

  • John Menadue.The vendetta against the ABC and the cost to Australia

    Tony Abbott’s vendetta against the ABC is prejudicing Australia’s regional diplomacy.

    The ABC is the most trusted media organisation in the country but Tony Abbott wants to bring it to heel. He has grown used to the fawning Murdoch media.

    According to Essential Research, 70% of Australians have a lot of or some trust in ABC TV news and current affairs. For commercial news and current affairs, it is 38%; for news and opinion in daily newspapers it is 48% and for commercial TV news and current affairs it is 41%.

    In his attacks on the ABC, Tony Abbott has become quite brazen, suggesting even that the ABC is unpatriotic.

    In the recent budget ABC funding has been cut by $29 million p.a. But the real attack on the ABC was the decision to axe the $223 million contract which the ABC has to produce and broadcast Australia Network which Australia needs to project itself into the region.

    The cutback to Australia Network will not only damage our projection into the region but it will also prejudice the ABC’s already limited number of correspondents in Asia, even though the ABC’s coverage and performance in Asia is superior to other media.

    The Coalition made it clear in advance that it would axe the Australia Network. It was pay-back for the ABC even though the ABC has seven years to run on the contract.

    Yet this axing came within weeks of the ABC signing a contract with the Shanghai Media Group to broadcast Australia Network throughout China. Only CNN and BBC have been able to negotiate such an arrangement. Rupert Murdoch tried for years to get a foothold in China but not surprisingly he failed ignominiously.

    Malcolm Turnbull, the Minister for Communications, to whom the ABC is responsible, did not effectively defend the ABC. Julia Bishop the Minister for Foreign Affairs won the day.

    It is noteworthy that during Tony Abbott’s recent visit to China we were told by the embedded Canberra Gallery journalists who travelled with him that the ABC had been able to secure this arrangement in China because of the good relations that Tony Abbott had forged with China. There must be some red faces in the Canberra Gallery to now see what’s happened to the ABC in China.

    I have no doubt that the ABC is better equipped than any other media organisation to undertake this soft diplomacy in China and generally in our region. But close observers would conclude that Australia Network’s performance has been quite ordinary. It cannot be compared with the successful projection of the UK through the BBC World Service. The ABC’s performance in Asia reflects the derivative nature of all our media. Our media still perform as is if we are an island parked off London and New York.  Not one member of the eight-person ABC Board has lived or worked in Asia. Only one out of the eleven senior ABC executives has worked in Asia.

    The very ordinary performance of the Australia Network is not surprising. It has not had leadership that understands and knows about our own region. ‘Soft diplomacy’ requires a close knowledge of the nuances and sophistication of the people of our region. The ABC, along with other media in Australia, is not sensitive or seriously interested in our region. Domestic trivia invariably wins the day.

    The botched tender process and the performance of Australia Network have not helped the ABC’s case. But even allowing for that, Australia’s interests would be better served if the government had not pursued its continuing vendetta against the ABC and allowed our national broadcaster to continue and to develop its services into China and into our region.

  • Caroline Coggins. Art and prayer

    What do we pay attention to, what do we look for? It sounds like such an innocent question, yet it is a reflection of who we are, and how we have been shaped.

    I went to a Matisse exhibition when I was in London recently. What struck me was a comment the artist made as an older man, with only fourteen years of life left to him, that it was only now that he had to learnt how to ‘ see’.  And this seeing would take him on a totally other path, and would revolutionize what was considered art.

    Of course artists, poets and mystics have always been involved in a kind of stripping of the layers, cleaning the windscreens of perception, of dust. Whatever we spend time thinking about and how we have chosen to live are what we will become. And this in turn will also shape our  seeing/ hearing/feeling.

    Matisse would learn to see each object and give it its life.

    As I live my life right now, I’m away from the familiar, live and pray in a bedroom, I have few props, and no buddies. I am interested to see what this does to me. Can I stay open and flexible, change my moods, do things because I always have?  When it comes to prayer, do I begin, do I start with those so familiar processes and what will happen then?

    I hear the same things going on in my mind, and often the familiar instructions from the outside are the same. But acting on instructions is not the point as they are meant only to guide and focus the intelligence and spirit.  But subtly we can be seduced into thinking that these instructions, this knowledge, are the thing itself.

    I sit at dinner parties and conversation is about things, but rarely are our fine gifts of intelligence given any room to develop and discern. We become governed by our world of thoughts and rarely do we actually get the chance to look at the thinker of the thoughts.

    Of course this is what starting to contemplate is about. Yet the mind is very interested in what it has thought before, what it already knows and it is rarely interested in what it doesn’t know. It will be interested in unknown facts to increase the stockpile of facts, because this can appear as intelligence (aren’t we often impressed by people who know a lot about everything!). But are we really curious about entering into the wordless world?

    Not having a formula to control our movements at this time puts us at risk as we grope blindly. We often need to invite silence to hear what is initially wordless.  Our darker places inside emerge: fear of the unknown, risk of being wrong, seen as lacking.  Yet all of these qualities keep us on the wheel that spins faster and faster as we seek to be in control.

    Like Matisse, I think we are developing ourselves to become sensitive, to see from our own experience?  But the first thing is to know that we will need courage and a kind of solidarity with ourselves.  Matisse would live his whole life outside of what was acknowledged as “good art”, yet now people will queue for months to taste and see this freedom.

    The trick to finding a way forward is to recognize that we are the only ones who can do this, there is no formula, the only pointer is that others have set this course and have done it before us.  Usually people we admire can show us how. But I often wonder if we want it enough for ourselves, I mean the deeper desires, those that will really satisfy us. We may not at the time be appreciated by  our fellow travellers,  but it will certainly bring aliveness and creativity.

    The last part of Matisse’s statement is that in truly learning to see, we learn to love. That sounds like a good outcome.

     

  • John Falzon. Time to stand and fight

    There are measures in this Budget that rip the guts out of what remains of a fair and egalitarian Australia. These measures will not help people into jobs but they will force people into poverty.

    You don’t help young people or older people or people with a disability or single mums into jobs by making them poor. You don’t build people up by putting them down.

    This Budget is deeply offensive to the people who wage a daily battle to survive. The content of the Budget is offensive. The lies told to justify the Budget are offensive.

    As philosopher Slavoj Zizek explains:  “…we are told again and again that we live in a critical time of deficit and debts where we all have to share a burden and accept a lower standard of living – all with the exception of the (very) rich. The idea of taxing them more is an absolute taboo: if we do this, so we are told, the rich will lose the incentive to invest and create new jobs, and we will all suffer the consequences. The only way to escape the hard times is for the poor to get poorer and for the rich to get richer.”

    The government wanted us to believe that its first Budget was tough but fair. It has since explained that its outright cruelty to people living in poverty is actually good for them because by strengthening the economy everyone, especially the poor, will benefit. Wealth, you see, trickles down, when the wealthy are treated well and their privilege preserved. Thus goes the message it has been trying to dangle before us.

    It is still trying.

    But all we can hear is the sound of the excluded still waiting for the trickle-down to trickle down.

    Budget 2014, you see, has the wealth trickling up! Not that this is all that unusual when market forces are allowed to trample on the lives of people who bear the brunt of inequality.

    Even Pope Francis has something to say about this: “Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralised workings of the prevailing economic system. Meanwhile, the excluded are still waiting.”

    When you’ve got a rich country like ours “unable” to afford to ensure that the more than 100,000 people experiencing homelessness or the more than 200,000 people on the waiting list for social housing have a place to call home, it is not a misfortune or a mistake. It is the sound of the excluded still waiting

    When you’ve got more than 700,000 people unemployed and around 900,000 underemployed, on top of those who are set to lose their jobs due to company closures, the dismembering of the public service and government cuts to social spending, it is also the sound of the excluded still waiting. Let us not forget the woeful inadequacy of the Newstart payment, at only 40% of the minimum wage. Neither let us forget the single mums who were forced onto the Newstart payment at the beginning of last year, and let us not forget the working poor for there are some who would like to squeeze them even more by reducing the minimum wage and taking away what little rights they have.

    When you’ve got David Gonski, not generally seen as representing the vanguard of the working class, working alongside his fellow review panellists to recommend a package of education funding reforms to address the outrageous inequality that besmirches education funding in Australia, and then the government does a triple back-flip and declares it is not committed to seeing this redistribution of resources through, you loudly hear the sound of the excluded still waiting.

    The long, fruitless wait of the excluded for some of the wealth, some of the resources, some of the hope, to trickle down, is one of the most audacious and sadly successful con jobs in modern history. It is not misfortune. It is not a mistake. It is certainly not, as perversely asserted by those who put the boot in, the fault of the excluded themselves! Rather, it is an attack, sometimes by omission as well as by commission, against ordinary people, from the First Peoples to the most recently arrived asylum seekers and everyone in-between who has been residualised and demonised and made to bear the burden of inequality.  That is why there is absolutely nothing unusual about understanding this as an issue of class. And why Warren Buffett was quite correct when he said: “There’s class warfare alright, but it’s my class, the rich class, that’s making war, and we’re winning.”

    The public response to the Budget reflects the deep feeling of injustice in the community. The powerful thing about the Budget response is that people are banding together to defend our egalitarian values of fairness and respect. People are saddened not only because the Budget affects them but because it hurts and humiliates the people they love and care about: young people, older people, people with a disability, single mums, struggling families. As we can see from the strength of the response to it, now is the time not to watch and weep but rather to stand and fight.

     

    Dr John Falzon is Chief Executive of the St Vincent de Paul Society and the author of The language of the Unheard.

  • Geoff Hiscock. Economic time is right in India for Modi and his mandate

    ​Narendra Modi comes to office in India with two big advantages: the economic cycle is starting to turn up at last, and his Bharatiya Janata Party (BJP) has a clear majority in parliament that frees him from the coalition-style shackles that plagued his predecessor, Manmohan Singh.

    The timing is right for Modi. After two years of sub-5 per cent growth, it looks like India’s economy will grow 5.2 per this year and 6.0 per cent in 2015, according to the latest outlook from regional analysis firm IMA Asia.

    While that is still a long way from the 8 to 9 per cent boom days of 2010 and 2005-07, it offers hope of better times ahead for India’s 1.25 billion people, particularly for lower income earners who are eager to join the spending class.

    One caveat is that the livelihoods of many of India’s 800 million rural dwellers will depend on how much rain this year’s southwest monsoon brings. The first monsoon rain is expected in Kerala in the south around June 5, but there is also a 60 per cent chance of a strong El Nino this year, according to the Indian Meteorological Department. That could bring drought conditions, which would have a big impact on rural incomes.

    Whatever the weather, the new government’s policy settings will play a big role in how the economy performs.  Indian ratings and research agency CRISIL says the election result has created “the best environment in a long time to bite the bullet on government finances.” It says an agenda that improves India’s competitive stance by tackling inflation, introducing the long-awaited GST, reducing subsidies, recapitalising banks, fostering corporate debt markets and giving a “booster shot” to manufacturing will pave the way for a shot at 6.5 to 7 per cent annual GDP growth.

    More broadly, Modi’s decisive win and pro-business outlook should encourage multinationals and domestic companies alike to dust off their investment expansion plans. The one area where this won’t happen is in the modern retail sector, where Modi and the BJP remain opposed to foreign direct investment in multi-brand retailing.

    That is a pity, because retailing is a job-intensive business of the type India desperately needs. The services sector, along with manufacturing and construction, is where growth must occur if Modi is to make any headway against one of India’s biggest challenges: providing jobs for the 13 to 15 million young people who seek to enter the labour market every year. International retailers such as Tesco want to expand their operations in India and would bring new skills, technology and job opportunities to the table if allowed. But for now, Modi and the BJP are more concerned about protecting the livelihoods of the 13 million “kirana,” or family-owned corner stores, that are the backbone of India’s retail scene.

    Consulting firm McKinsey estimates that India needs to add 115 million new non-farm jobs over the next decade to cater for a growing population and to reduce agriculture’s overall share in employment. Labor market flexibility and more vocational training for the poor and uneducated are among the steps it says are required.

    One of India’s biggest handicaps remains its poor performance in infrastructure development. It has hundreds of road, rail, port and power projects on its books, but they seem forever mired in red tape, corruption and disputes about land zoning, jurisdiction, relocation and environmental factors. Modi brings to the table the model of his home state Gujarat, where the electricity always runs – courtesy of profitable private power stations — and where businesses such as automotive plants have been encouraged to set up. The central government’s role in state-based infrastructure development is limited, but Modi’s mantra of “minimum government, maximum governance,” should at least encourage some movement on the national infrastructure front.

    Internationally, Modi will find the existing policy settings do not require too much fiddling. Pakistan, as always, is the key security challenge, but at least Modi is amenable to a dialogue with his counterpart Nawaz Sharif, who has already invited him to visit Islamabad. Modi talks tough on China over territorial issues, yet is pragmatic enough to want expanded business ties. Likewise, China says it wants to take relations with India to a “new height.” Modi likes Vladimir Putin and got a congratulatory call from Barack Obama, so he may be able to improve India’s energy security outlook in the way he deals with Russia and the United States over oil and gas supplies and nuclear technology, though the nuclear civil liability issue is not fully resolved. He also likes Japan’s assertive leader Shinzo Abe – the pair follow each other on Twitter – with Abe tweeting this week: “Great talking to you, Mr Modi. I look forward to welcoming you in Tokyo and deepening our friendly ties.”

    And what of the man Modi is replacing, the long-serving Manmohan Singh?  Widely regarded as a good and decent man, Singh was brought low by the dynastic politics of the Congress Party, and the sheer complication of heading a fractious agglomeration of self-interested parties. His best legacy goes back to the early 1990s; as finance minister he brought in a series of reforms that allowed India to slough off the Raj-era mindset and embark on a more vigorous growth path. Sadly, too many of his colleagues at the state and federal level still believe in the “pay to play” approach to governing the world’s biggest democracy. Let’s hope Modi’s mandate cuts corruption and gives India the boost it so desperately needs.

    Geoff Hiscock writes on international business and is the author of several books, including “Earth Wars: The Battle for Global Resources,” and “India’s Global Wealth Club,” both published by Wiley.  

     

  • John Menadue. Think tanks, cash for comment and the corruption of public debate.

    In recent months we have been partly appalled and partly amused by the urgers and spivs from both sides of politics that have been paraded in Sydney before the Independent Commission against Corruption. Most recently we have seen developers and others using fronts to launder money to hand on to political parties. Even the Young Liberals have decided to get into the act with their ‘Black Ops’.

    But there are other more serious problems with think-tanks that receive large amounts of money, seldom disclose their sponsors or donors and then conduct overt political campaigns, invariably on behalf of business and the conservative side of politics. These cash for comment think-tanks hawk themselves around as ‘independent’! They are often nothing of the sort. They are propagandist fronts for the laundering of money for special interests. Yet organisations like the ABC give them remarkable free time to espouse the views of their secret funders.

    Consider the Institute of Public Affairs (IPA). In 2010 an IPA Director, Alan Moran, told the Productivity Commission ‘We’ve got about 4,000 funders … there are occasions when we may take decisions which are somewhat different from those of the funders. Obviously that doesn’t happen too often, otherwise they’d stop funding us, but it does happen occasionally.’  I could rest my case there but the IPA has a colourful record in fronting for special interests.

    In his 2007 book on the PR industry ‘Insider Spin’ Bob Burton wrote ‘A little funding routed by a think-tank [like IPA] enables the policy agenda of corporate funders to be projected to a broader audience with more credibility than if it did it for themselves’.

    In 2008 the IPA wrote an article “Big Fat Beat up” questioning the relationship between obesity and junk foods. We were not told whether the junk food industry was a funder of IPA

    In 2010 the Gillard Government announced legislation to force all cigarettes to be sold in plain packages. With the help of the ABC, the IPA attacked the government at every opportunity on this issue. The ABC gave IPA’s Tim Wilson almost unending interviews. He also got a run on seven commercial radio stations. Asked by Media Watch whether the IPA received funding from Big Tobacco, Tim Wilson’s response was ‘The IPA does not disclose its membership list’.

    IPA’s John Roskam argued last year for more investment in dams and roads in the Northern Territory together with special economic zones. What IPA did not mention was that its policy proposals on the Northern Territory followed very closely what Gina Rinehart had been saying. Interestingly she was the guest at IPA’s 70th anniversary dinner last year. Asked if Gina Rinehart was a donor to IPA, James Patterson responded ‘The IPA is funded by voluntary contributions of our 3,256 … members and supporters. We are very grateful for their support and we respect their privacy’.

    IPA’s major successful campaign has been to give a platform to client change sceptics. It funded two full-page advertisements in The Australian, costing about $100,000. The advertisements attacked the government’s climate change policies.  Who funded this campaign?  The IPA did not tell us. Was it the fossil fuel industry? Was it Exxon, Shell, Caltex and BHP Billiton? With a policy of non-disclosure IPA provides a front for powerful rent-seekers.

    In the year to June 30, 2010, the IPA hosted forty events around the country against the carbon tax. I suspect that the polluters paid the cash and the IPA provided the comment.

    The IPA told us in the Drum those pub lockouts and 3 a.m.  closing where a bad idea “because the Australian public consumes a large quantity of alcohol and gets into very few fights” How much does IPA receive from the alcohol industry.

    A few years ago the IPA launched a sustained attack on NGOs as being unaccountable, unrepresentative and not worthy of charitable status. But the IPA enjoys charitable tax status. Has the Tax Commissioner examined the murky financial world of the IPA?

    Why should the ABC which the IPA so desperately wants to get rid of, give the IPA extended coverage to its ‘scholars and fellows’. The ABC does this on a wide range of its programs – The Drum, TV Breakfast, Radio National and more.

    Businesses are attracted to front organisations which will espouse and promote their views. The IPA and others are part of a rigged and prejudicial public debate. They are doing more to damage our democratic life than the shifty developers we see parading before the ICAC.

    The Free Enterprise Foundation of the NSW Liberal Party and Joe Hockey’s North Sydney Forum are small beer compared with the IPA which fronts for rent-seekers who hide behind the scenes.

    Professor Ross Garnaut has spoken of the ‘diabolical problem’ of conducting in Australia a balanced and informed debate on important public policy issues. We had such a debate during the Hawke and Keating periods of the 1980s and the early days of the Howard Government. The IPA and their ilk are a major part of the “diabolical problem” that Ross Garnaut refers to. They are debasing public debate. They will not disclose who funds them and organisations like the ABC give them an armchair ride.

    Surely at the least, the ABC should not put to air anyone from a “think tank” that does not disclose its donors because the assumption must be that they are a cash for comment enterprise.

    Think tanks are important players in the battle of ideas but this battle needs to be conducted honestly and transparently

     

    I was founding Chair and am a Fellow of the Centre for Policy Development. We disclose our major supporters and donors.

     

    I will be writing further about the corruption of public debate; the role of lobbyists, the influence of News Ltd, a rogue organisation and the public influence of “independent” business economists who are employed by vested interests and particularly the banks. Where are the independent and informed public commentators? They seem to have abandoned the field and their public responsibilities.

  • Julian McDonald. We will right this terrible wrong.

    With searing eloquence, 11 men bravely told the Royal Commission into Institutional Responses to Child Sexual Abuse in Perth of the devastating impact of physical and sexual abuse at the hands of Christian Brothers in residences at Castledare, Clontarf, Bindoon and Tardun in Western Australia more than 50 years ago.

    No one could be but moved by these men, who told of their painful experiences of stolen innocence, of being subjected to physical brutality and the depths of sexual depravity by supposedly religious men from whom they had every right to expect care, nurture and respect. Instead they were betrayed and treated as objects for sexual gratification.

    A regret I have is that every Christian Brother in Oceania was not present to hear the testimony of the men, victims of an earlier generation of Christian Brothers.

    The ongoing suffering of children so wantonly abused by those charged with their protection demands of their carers an immediate and effective response. That response is demanded from Christian Brothers for survivors now in the later stages of their lives.

    At the Christian Brothers’ Congregation Chapter held in Nairobi in March, I went on the record as saying there will be no future for the Christian Brothers unless and until we do all in our power to address the devastation inflicted on the lives of children and vulnerable adults by the sexually, emotionally and physically abusive conduct of some of our number. However, I am conscious that rhetoric is validated only by appropriate action. We have to find additional ways of engaging with those victimised so their voices are heard.

    As the representative of all the decent, committed Christian Brothers living and working throughout Oceania, I accept our shame and ask forgiveness of those whom my Brothers have harmed. I have spent the past 25 years reaching out to victims to try to address the hurt they suffer. I ­acknowledge that there have been times when my efforts have been less than perfect. I can only promise to work at doing better. However, I am confident this royal commission, at which I was a witness, will give us some direction. I pledge the co-operation of the Christian Brothers in working with the royal commission in whatever way we are able.

    And as we wait for the findings to provide a pathway for the future, the Christian Brothers commit to continuing our work with survivors each and every day, knowing that help, care and compassion are needed in the present. I commit the Christian Brothers to working with survivors now on their individual needs and circumstances in an atmosphere of care, compassion and dignity.

    I also urge the Catholic Church, of which the Christian Brothers are but part, to open itself to examining the causes and embracing the learnings from what has been a shameful episode in our history.

    We cannot delegate our ­response to others to formulate but rather must look inside ourselves for the way forward, listening to views from within, however confronting we might find them.

    The report into sexual abuse by Christian Brothers published by Brother Gerry Faulkner some 16 years ago offered some analysis of causes, some learnings and some suggested ways forward.

    Moreover, I believe that the church cannot continue to ignore the voices of people such as Bishop Geoffrey Robinson and Sister Angela Ryan, who have campaigned for decades to ­address the blight of sexual abuse by priests and religious orders. They have been the conscience for us all in this matter, but at times it would appear that they have even been punished for their courage.

    I would like to thank Judge Peter McClellan and the other commissioners and their staff for their work and dedication in pursuit of the painful truth, and I can assure them of our continuing support and co-operation.

    And to the men who continue to suffer so greatly, we will not abandon you.

    Brother Julian McDonald is deputy province leader, Christian Brothers Oceania Province. This piece was run in The Australian 12 May 2014.

  • Fran Baum and Sara Javanparast. Demise of Medicare Locals.

    Demise of Medicare Locals: impact on community health, partnership and PHC research

    Fran Baum and Sara Javanparast  
    Southgate Institute for Health, Society and Equity, Flinders University, Adelaide

    Tuesday’s budget announced the abolition of the 61 Medicare Locals and that they will be replaced with an unknown but smaller number of Primary Health Networks. Regional primary health care organisations are widely acknowledged to be vital to effective   coordination of PHC activities, reducing service fragmentation, making the health system easier to navigate for users, and reducing health care cost. Primary Health Care Trusts in England, New Zealand Primary Health Care Organisations, Canada/Ontario Local Health Integration Networks, and Scotland Community Health Partnerships are examples of overseas regional PHC organisations which support GPs and other PHC providers and plan for population health initiatives. The World Health Organization  recommends that PHC should be comprehensive and not just concentrate on clinical issues but also emphasise population-based approach, including disease prevention and health promotion, equity of access, responsiveness to community needs and community engagement.

    In Australia, various models of PHC have been established including Medicare-funded General Practice, State-funded multi-disciplinary community health centres and Aboriginal community controlled services. In 2009, the National Health and Hospital Health Reform Commission recommended that ‘service coordination and population health planning priorities should be enhanced at the local level through the establishment of Primary Health Care Organisations’. This has resulted in the establishment of Medicare Locals to fulfil the role of co-ordinating PHC services at the local level, improving access and preventing hospital admissions.

    The establishment of MLs, introduced by the Gillard Labor government, commenced in July 2011, with a total of 61 MLs operational from July 2012. Since then, the MLs have been conducting community needs assessment, identifying and building partnership with key health, community and social organisations in their region, and developing population health plans that are based on and responsive to local needs. A range of local programs and services have been designed. These include mental health, after hours care plan, Aboriginal health, E-health, aged care, and migrant health. Many resources have been spent building positive relationship with key stakeholders and community members within each ML with some good examples of collaborative work, joint planning and community engagement strategies. Taking the Pulse program in a number of ML including the Gold Coast ML, ACT ML, and Metro North Brisbane ML enabled consultation about health and wellbeing with people from all walks of life. The priorities that emerged from these consultations have been used in the formulation of needs assessment and informed the development of their strategic plans to ensure they respond to local need. The Tasmania ML is addressing social connection and other social determinants of health using strategies including community capacity building. Our local research suggests the MLs are co-ordinating with local health authorities on issues of joint concern. They have begun to fill identify and fill service gaps.

    All these programs and initiatives have taken staff and local PHC health providers’ (including many GPs) time, and cost a lot of taxpayers’ money to develop and establish.  Now is the time when Australians should be able to capitalise on this investment and see better co-ordinated local health services, community alternatives to hospital services (which will save money), Aboriginal health programs, and local mental health programs. It takes time to establish the trust and connections needed to develop and co-ordinate PHC services and this social capital that the MLs have established will be squandered by the decision to abolish them in the budget. Of course, the ML model and its programs need to be scrutinised and evaluated, but its demolition while it is still in its infancy will have many negative impacts on the community’s health and represents a failure to capitalise on investment.

    The short term life of such large national initiatives also makes it difficult for primary health care researchers to produce rigorous evidence on the effectiveness of existing models and to evaluate the programs in terms of population health and cost benefits that need to be followed through for a longer period of time. “Lack of evidence on program effectiveness” is one the key justifications for budget cuts was evident in the Review of Medicare Locals by John Horvarth (http://www.health.gov.au/internet/main/publishing.nsf/Content/review-medicare-locals-final-report) . Such evidence can hardly be produced in the current rapid changing policy environment which makes rigorous evaluation impossible.

    Undoubtedly, replacement of MLs with Primary Health Networks that are more clinically focused will move our primary health care system away from its broader mandate of disease prevention, health promotion, equity and social determinants of health. Of course, communities particularly those most in need are the ones who will suffer the most from these continuing political battles and health system changes.

    We now face an uncertain period when the work of the existing ML is undone and new Primary Health Networks are established. The budget papers say this process will be open to tender and that the new organisations will be able to “partner with private health insurance” presumably opening the ways for the privatisation of the Networks and a further move away from equitable and efficient health care. We could see big providers such as BUPA winning tenders to run these PHNs!

    As a postscript we note that had the budget taken the fiscally responsible step and abolished the private health insurance subsidies this would have released around $5.5 billion dollars for investment in PHC services and the existing MLs which would have represented a far better investment in our health.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

  • John Menadue. For some the age of entitlement continues.

    Joe Hockey talks endlessly that the days of entitlement are over. They may be over for the unemployed, students, the sick and pensioners – in fact the majority never had days of entitlement. But they are certainly not over for the miners and the financial sector. These two sectors survived unscathed from the budget. This tells us a lot about who is running this government.

    For the miners, the mining tax and the carbon tax will end at a cost to the taxpayer of at least $10 billion per annum. The rebate on diesel fuel will remain. The government tells us that it had to honour these promises.  The same commitment to honouring promises was easily discarded in the case of the unemployed and the sick.

    And then there were the promises to the financial sector and particularly to the superannuation industry and the private health insurance industry. Promises to them had to be honoured. There was no attempt to scale down the tens of billions of dollars in rip-offs in these sectors that benefit the rich. Not only is the government determined to protect the privileged position of the financial sector, but it is also trying to water down the Future of Financial Advice (FOFA) legislation to advance the position of the banks and AMP. Senator Sinodinis and the government are obviously determined to allow the conflict of interest by the banks and the AMP and their financial planners to continue.

    The $5b p.a. corporate welfare subsidy to private health insurance sector will continue. But not content with this corporate handout PHI will seek to get a foothold in the new Primary Health Organizations, formerly known as Medicare Locals.

    Just look at who is untouched in this budget – the miners and the financial services sector. That tells us a lot about who is pulling the strings. This is crony capitalism. As Paul Keating put it the Liberals are about business, not markets. Or as Tony Abbott put it on election night – ‘Australia is open for business’ – the business of the miners and finance sector. Their entitlements will continue.

  • John Menadue. Seven dollar GP co-payment – and an unintended consequence

    If the co-payment takes effect, it is likely to result in an increase in doctor’s fees. As Ian McAuley has pointed out, the attraction of bulk-billing for the doctor is that it removes the cost of handling and accounting for transactions. The invoice is sent directly to Medicare.

    Once the doctor is obliged to handle the $7 co-payment, another transaction occurs; either by cash or probably credit card. This inevitable patient/doctor money transaction will provide the doctor with an opportunity to charge above the bulk billing rate.

    As soon as doctors stop bulk-billing we can expect a rapid rise in doctor’s fees on top of the $7 co-payment. And the $7 co-payment may be just the beginning!

  • John Menadue. The Budget: Robin Hood in reverse.

    There was a real risk that Tony Abbott and Joe Hockey believed their windy rhetoric of the last two years about debt and deficits. Having won the election they have had to face the reality that they have been grossly exaggerating our economic problems.

    The real risk was that Tony Abbott and Joe Hockey would act on their own exaggerations and savagely attack the economy. Fortunately, the Budget tells a very different story. In terms of managing the macro-economy, the government has got it about right in the budget. It hasn’t cracked down in the way many feared.

    But what the Budget has done is to inflict pain on the poor and the vulnerable in our society; the unemployed, young people, the sick and the poor. Unlike Robin Hood, Joe Hockey robs the poor to protect the rich. And more pain is to come for the disabled and pensioners. The $80 billion cutback in health and school funding for the states will also result in severe problems. State Premiers are already protesting. This hit on the states will probably force them to press for a broader and/or an increase in the rate of the Goods and Services Tax. Perhaps that is what Joe Hockey intends.

    The most glaring example of cruel policies is the cut in our overseas development assistance program.  It is the largest single saving in the Budget. The political logic must be that the poor in the world that we should help can’t vote in Australia and can’t protest. They are an easy target, like vulnerable asylum seekers. As a wealthy country we should hang our heads in shame.

    I have written before about the need to address our revenue shortfall and the enormous advantages that flow to rich taxpayers in Australia. Our tax as a percentage of GDP has fallen steadily since 2002 from 30% to 28%. This is well below the OECD average of 34% of GDP. We need to fix our revenue base and not punish the poor and vulnerable.

    A major reason for our revenue shortfall is not so much our low tax rates but the high level of tax expenditures or tax deductions that we have. In 2012-13, Treasury reported that there were 363 ‘tax expenditures’ under our tax system. Those tax expenditures had a total value of $115 billion. These tax expenditures range across the field – deductions for charities, religious, scientific and community organisations. The largest of all tax expenditures is for superannuation. This ‘tax expenditure’ costs the Budget over $30 billion per annum. About 30% of these superannuation tax deductions or concessions go to the top 5% of income earners.

    The IMF has reported that Australia forgoes more revenue as a proportion of GDP from tax expenditures than all other OECD countries. It is in this area of tax expenditures that we need to direct our attention.

    Quite apart from the scale of these tax expenditures or deductions and loss to revenue, there is very little transparency. Direct welfare payments for example are easily identified. The IMF points out those tax expenditures are often granted as a result of secret lobbying. The IMF recommends regular and systematic reviews of tax expenditures in the same way we review direct government expenditures, like unemployment benefits. Parliament and the Parliamentary Budget Office would do a great service if they conducted and published such a regular review. If they did, a large number of these expensive tax expenditures like superannuation, negative gearing and subsidies for private health insurance would be brought to public attention and curbed or abolished.

    The ‘welfare cheats’ and ‘dole bludgers’ which are so much part of the stock in trade of tabloid newspapers and talk-back radio are easy game. The real rackets are run by vested interests that reap enormous benefits from tax expenditures which are often largely hidden from view.

    We badly need revenue reform and of tax expenditures in particular.

    Taxes are the price we pay for a civilised society. We need to face up to the need for adequate tax revenue to ensure that all Australians can live in a civilised way.

  • John Menadue. Health Co-payments and $7 for a GP visit!

    We do need to take action to curb our visits to the doctor. In 1984-85 we averaged about 7 Medicare services per head. By 2012-13 it had doubled to over 15 Medicare services per head. The increase was across all age groups and not just for the elderly. Bulk billing, fee for service, and the ability of doctors to generate demand for more and more visits, tests and referrals contributed to this dramatic doubling of Medicare services. It must be addressed for both fairness and efficiency reasons.

    The media seems convinced that the budget will include a co-payment of $7 to $8 for visits to GPs.

    If this fee is part of a general reform of co-payments as I set out in my blog of May 1 ‘The dog’s breakfast’ and reposted below, it should in principle be supported. But I suspect that it will not be part of a broader reform of co-payments that I suggested. I said that on its own, a $6 co-payment (or maybe $7 to $8) was a silly suggestion. On its own it would be inequitable and discourage many people from going to their GP.

    There is also no sign that the government is likely to address more glaring examples of budget problems which aid the rich, e.g. the superannuation concessions that Michael Pascoe, a business commentator on the SMH who has described these superannuation concessions as ‘on-shore tax havens for the rich’. The other benefits for the wealthy which will presumably not be altered include negative gearing, capital gains concessions, fossil fuel subsidies and the funding of rich private schools.

    I have also reposted below an article by Ian McAuley ‘Pay for a GP visit’.

    Repost: John Menadue. Health Co-payments. The dog’s breakfast will continue.

    There has been a lot of superficial comment following the thought bubble of a proposed $6 co-payment for GP visits.

    What we should be addressing is first, the chaotic nature of our co-payments and second, whether individuals and families should be making a greater direct contribution to their health expenses. The last Nielson Poll suggests that Australians are open to making a greater direct contribution.

    We already have a high level of co-payments in Australia. This has been pointed out repeatedly by Jennifer Doggett.  In this post I draw on the background which she has presented over several years .

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

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

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

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

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

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

    The National Centre for Social and Economic Modelling has found that ‘more and more families are finding it difficult to stretch the family budget to meet the costs of healthcare’.

    This chaotic mess in co-payments is not surprising. Ian McAuley and I referred to this problem many years ago. In a paper by the Centre for Policy Development in 2007 we said ‘These co-payments have been introduced without any coherence and therefore inequities and perverse incentives abound. Some services such as public hospital services are free. Some such as pharmaceutical benefits are capped by the government. Some, such as the co-payment for medical services below the safety net thresholds are open-ended; the public subsidy is fixed, leaving the user to bear an open-ended risk. Some such as the medical safety net provisions are proportional to the price of the service. Some safety nets are set on a family basis, others on an individual basis. Some are on a calendar year basis and others on a financial year basis.

    In light of the chaotic nature of co-payments we need to restructure our co-payments.  How should these co-payments be restructured? Several years ago at CPD, Ian McAuley and I set out some criteria which should be adopted in the design of future co-payments. We suggested

    • That co-payments be controlled by the government rather than left open-ended to be set by service providers.
    • That there be only one channel of collecting co-payments, with one set of criteria rather than the separate channels operating at present.
    • That the level of co-payments relate to means, including people’s access to liquidity.
    • That means-tested compensation be separated from service delivery, rather than having service providers check the income or welfare status of users.
    • That co-payments be structured in a way not to distort resource allocation on the basis of needs.
    • That gap insurance, which is designed to evade co-payments, be prohibited.

    In summary,

    1. We already have high levels of co-payments.
    2. These co-payments lack rhyme or reason.
    3. Most Australians have much higher incomes than when Medicare was introduced. Subject to means-testing we should contribute more to our health costs. Co-payments, if well-structured, can help people make better choices with what economists call “price signals” They can provide also some relief to public budgets. A universal health service like Medicare does not have to be free. But it must be a high quality service available to all regardless of means.

    The $6 thought bubble on co-payments for visits to GPs must be considered in a much wider context.  On its own it is a silly suggestion.

  • Peter Menadue. Should corporations have political rights?

     

    There is an old legal saying that a corporation has no body to be burnt or soul to be damned.  In other words, it is just a legal fiction designed to confer limited liability upon its shareholders.

    Despite that, there is an insidious and very dangerous notion abroad that corporations have political rights and should be allowed to make political donations and engage in political advertising.  That notion is a terrible threat to the health of our democracy.

    The United States Supreme Court recently gave that idea a massive boost in the Citizens United case, when it decided (5-4) that the First Amendment right of free speech allowed corporations to engage in as much political advertising as they liked. In dissent, Justice Paul Stevens, one of the great justices in the history of the court, wrote that the First Amendment did not protect corporations.  He said that corporations were not “We the People” for whom the Constitution was established.  Rather corporate spending on politics should be viewed as a business transaction designed by the officers or the boards of directors for no purpose other than profit-making. Stevens called corporate spending “more transactional than ideological”.

    In Australia, we have recently seen what happens when corporations are allowed to engage in such transactional politics.  When the Rudd government tried to introduce a mining tax, major corporations (mainly foreign owned) funnelled huge sums into an advertising campaign to force the government to back down – which it did.

    Corporations must be pushed out of our political system and denied any political rights.  They should not be allowed to use their balance sheet to either make political donations or engage in political advertising.  Only citizens (including, of course, those who are employees or shareholders of corporations) should be allowed to do either.  Further, there should be a cap on how much individual citizens can spend (say $1,000 a year).  Indeed, one option is for the government to give each citizen a political donation voucher which he or she can direct to the party of his or her choice.

    However, that does not mean there will be no role at all for business organisations (like the Mining Council), trade unions or even corporations.  They should be allowed to collect money from citizens (up to the prescribed limit) on behalf of political parties.  However, all donors must be identified (to ensure they are citizens).  That would mean that, to fund its attacks on the Rudd Government, the Mining Council would have had to attract contributions from individual citizens (presumably in the mining community) who felt strongly enough about the issue. My guess is that the money collected wouldn’t have bought the council a 3am advertising slot on a regional TV station.  However then, at least, the citizenry would have spoken through their wallets, not major foreign-owned multinationals.

    The next time a progressive party takes power in Canberra,  the very first item on its agenda should be amending our electoral laws to exclude corporations from politics and to cap donations.  If it doesn’t, it might as well throw away the rest of its agenda.

  • John Menadue. Increasing the petrol tax is good policy.

    It may not be good short-term politics for the Abbott Government but it will be of long-term benefit to Australia if we lift the excise on petrol which has been frozen since 2001.

    The motor industry will protest. It should be faced down, just as we should have faced down the mining lobby when it was being asked to make a fair return to the public for its depletion of our national endowments.

    Our petrol prices are amongst the lowest in the world. That results in less revenue for the government, reduced fuel efficiency, increased congestion in our cities and more carbon pollution. I have reposted below a blog that I posted on November 20 last year ‘Cars are killing our cities’.

    In the December quarter 2013 our petrol prices were the fourth lowest amongst the 28 OECD countries. Only Canada, US and Mexico had lower prices. Our diesel prices were the sixth lowest amongst OECD countries.

    The action of John Howard in 2001 in freezing the indexation of fuel excise has cost us about $24 billion in cumulative losses of revenue. It has also been a contributor to the long term structural budget deficit we face. The IMF has made it clear that the Howard Governments were the major contributors to the structural deficit and not the Rudd/Gillard Governments. The Howard Government decision to freeze the indexation of the fuel excise and more importantly the income tax reductions year after year during the mining boom, were the major contributors to the structural deficit we now face. Unfortunately the Rudd/Gillard Governments didn’t act quickly enough. For example the Henry Tax Review recommended an end to the freezing of the fuel excise but the Rudd/Gillard Governments took no action.

    The increase in fuel prices does make good budgetary sense. As Dr Paul Burke from the ANU has pointed out, allowing the excise to rise with inflation could generate enough revenue to fund Gonski.

    Higher fuel prices will also encourage people to purchase smaller and more fuel efficient cars. As Dr Burke has pointed out ‘Higher fuel prices lead to consumers using less petrol and also consumers deciding to purchase cars that are more fuel-efficient’. He added that we are probably using about 3% more petrol as a result of the Howard Government’s decision in 2001.

    It would be a mistake if Tony Abbott decides to try to placate the motor lobby by building more roads. That will just increase the damage. We need more and better public transport rather than more roads and cars. We need to break free from the addiction we all have to the car and the power of the motor lobby. Cars are destroying our cities and damaging our planet.

    The Abbott Government decision on fuel excise looks like being a sensible and good start for a whole range of reasons. Can road congestion taxes be next!

    Repost: Cars are killing our cities.

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

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

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

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

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

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

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

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

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

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

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