John Menadue

  • Martin Laverty. Poverty and poor health go together.

    In 2008, the World Health Organisation provided an action plan to Australia and other countries to tackle the health disparity between rich and poor which sees an Australian in the lowest group of wealth-holders live with up to three times the amount of chronic illness of a person in the highest wealth-holding group.

    One year ago last week, Catholic Health Australia and the members of the Social Determinants of Health Alliance applauded a co-authored report of a Coalition, Labor and Greens Senate Inquiry that recommended the Parliament endorse the 2008 World Health Organisation’s recommendations on how to address health equity – that we had argued must be the first important step towards meaningful action on social determinants.

    But last week, on the one-year anniversary of the release of this rare tri-partisan report, there was nothing to celebrate. There was nothing to welcome. There was just a moment to bemoan the fact that yet another year had passed since the Senate Inquiry reported and the Federal Parliament has not pushed ahead with the Inquiry’s recommendations or any plan to address unacceptable disparities in the health of Australians.

    Reports seem to emerge every couple of weeks pointing to those unacceptable variances based on people’s socioeconomic status or their ethnicity or where they live or their education level. These reports – like last year’s Senate report – are not prompting action from federal politicians.

    While we have been advocating for change at the political level and in the public domain, CHA has also been presenting compelling evidence as to why action on the social determinants is crucial. One of those contributions is The Cost of Inaction on the Social Determinants of Health; a report commissioned by CHA and prepared by the National Centre for Social and Economic Modelling (NATSEM).

    That report found that $2.3 billion in savings could be found annually through avoidable hospital admissions if Australian Governments were to implement the findings of the World Health Organisation’s Closing the Gap in a Generation report. Those are the same recommendations that the Senate Committee said the Parliament should endorse.

    The NATSEM report also found implementing the WHO recommendations could see:

    • 500,000 Australians avoid suffering a chronic illness;
    • 170,000 extra Australians enter the workforce, generating $8 billion in extra earnings;
    • $4 billion in welfare support payments saved each year;
    • 5.5 million fewer Medicare services utilised each year, resulting in annual savings of $273 million;
    • 5.3 million fewer Pharmaceutical Benefit Scheme scripts being filled each year, resulting in annual savings of $184.5 million.

    These staggering opportunities are what new approaches to health policy could achieve, yet counter-intuitively they do not require change to the way our health system operates.

     

    The opportunity to reduce chronic illness and save on hospital and pharmaceutical expenditure requires action outside of the formal health system. Doing so would improve the lives of half a million Australians. It would also help the Federal Government achieve savings it is very keen to find.

     

    Australia suffers the effects of a major differential in the prevalence of long-term health conditions. Those who are most socio-economically disadvantaged are twice as likely to have a long-term health condition as those who are the least disadvantaged.

     

    Put another way, the poorest are twice as likely to suffer chronic illness and will die on average three years earlier than the most affluent. Poor health of low-income Australians can be avoided, allowing Government to spend less money on treating health conditions that should never have occurred in the first place.

    Drug-, alcohol-, tobacco- and crisis-free pregnancies are understood to be fundamental to a child’s lifelong development. So, too, is early learning that occurs in a child’s first three years of life.

     

    School completion, successful transition to work, secure housing and access to resources necessary for effective social interaction are all determinants of a person’s lifelong health. These are factors mostly dealt with outside of the health system, yet they are so important to the health of the nation.

    We can’t afford – in dollar terms, but more importantly in human terms – for this to be a political can that is kicked down the road. Action on social determinants will save lives, and deliver both government and community an extraordinary financial and social surplus.

    A resolution passed in the House of Representatives in 2010 compelled the sitting Government to respond to a Senate committee’s report with six months.

    Labor can point to the federal election – held within six months of the report being tabled – and the Coalition can point to the fact the report was tabled during the last Parliament, but we are becoming increasingly impatient with politicians who aren’t addressing the causes of poor health.

    Isn’t 12 months of increasing inequity more than enough? It’s time for action.

    Martin Laverty is the CEO of Catholic Health Australia. CHA represents the largest single grouping of non-government health, aged and community care services in Australia.

  • Graham Freudenberg on ‘The Making of Australia – A Concise History’ by Robert Murray

    When I was a teenage Tory in Brisbane in the early Fifties, Bob Murray, a bright young spark from the Melbourne Argus was the most persuasive of my newspaper contemporaries who led me gently towards the light.  In Sydney a couple of years later, at the end of 1954, in midnight to dawn sessions at the old Phillip Street Journalists’ Club, we debated the coming of the Labor Split, unwittingly laying the foundations for his classic account The Split – Australian Labor in the Fifties (1970).

    In the halcyon early Seventies, as one of the few people I knew who had actually been behind the ‘Iron Curtain’, he helped me keep Ostpolitik and  Détente in the perspective of the continuing awfulness of regimes like the East German. This clarity of views, sharpness of insights, balance and common sense abound in his octogenarian opus The Making of Australia – A Concise History (Rosenberg Publishing).

    This is the first single-volume general history of Australia since the ‘history wars’. To some extent it complements from a more conservative perspective the monumental Cambridge History of Australia edited by Stuart Macintyre, at less than a tenth of the price. Both works show how the ‘history wars’ have transformed our approach, especially about the relations between the Aborigines and the occupiers after 1788.

    For the first time, the relations between the aborigines and settlers form an integral part of the whole narrative. In the index, there are 196 entries, with substantial references, by my count, on 103 pages – one third of the book. The aboriginal story is woven into the ongoing narrative. This inclusiveness is unprecedented in Australian general histories.  We have come a long way from the great flowering of Australian historiography in the 1950s and 1960s, when Manning Clark subsequently apologised for his comparative neglect of Aborigine studies and Gordon Greenwood, in the first post-war general history Australia, ignored them altogether.

    In dealing with Australia’s military history, Bob Murray has taken a very different approach, and I think less successfully. He has chosen to lump the First and Second World Wars together in a single chapter entitled ‘The Call of Khaki’. This approach may emphasise the continuity of the two wars, at least in their European and imperial context. But, besides wrenching the chronology of the narrative somewhat, this treatment understates what I believe to be the centrality of the wars to our political, social and economic development.

    There are signs that the Anzac Centenary is going to spark another round of ‘history wars’ in much the way that the Bicentenary set in train the debate that led to the ‘history wars’ about Aboriginal Australia. Perhaps John Menadue’s blog last year about the political manipulation of the Anzac tradition was a first shot.

    This time around, I hope we are mature enough to avoid some of the nastiness that accompanied the last round. In his book on the Split, Bob Murray memorably noted ‘the absence of goodwill’ as a major factor in Labor’s self-destruction. There was a notable absence of goodwill in the waging of the first ‘history wars’.

    It would be ironic if the renewed debate on Australia’s military history came down to competing slogans of ‘best we forget’ versus ‘lest we forget’. After all, ‘best we forget’ was a sentiment often used to discourage the quest for truth about the Aborigines.

    When it comes to Anzac (as shorthand for all our wars) I uphold ‘lest we forget’ in the sense that the author of the phrase, Rudyard Kipling, used it in his poem Recessional, written for Queen Victoria’s Jubilee in 1897. Kipling meant it as a warning against the pride and arrogance of imperial power and that even the mighty British Empire would one day be ‘as Nineveh and Tyre’.

    Bob Murray and I belong to the last Australian generation for which the British Empire was still a going concern. This fine book can stand as the testimony of our generation and our understanding of what it means to be Australian.

    We were the depression babies, formed politically in the Chifley-Menzies era, with our adulthood dominated by the Cold War in all its manifestations. Despite this tumultuous and often menacing background, we have been an exceptionally lucky generation of Australians. Perhaps because the low birth rate in the Depression made our path to education and employment so easy, we were optimists. Fittingly, Bob Murray ends his book on a high note, quoting the ‘other half of Malcolm Fraser’s (and George Bernard Shaw’s) ‘Life wasn’t meant to be easy.’ – ‘But take courage, it can be delightful.’ Both halves of the quotation apply to the writing of books about Australian history. And in this case, the second half certainly applies to the reading of it.

  • John Menadue. Privatising Medibank Pte – who cares?

     

    This is a repost from 28 November 2013. My own view is that all the private health insurance companies, including Medibank Pte are parasitical and undermine Medicare. The only important political issue in my mind is whether the policy holders who have contributed over decades to Medibank Pte should receive appropriate recompense rather than the government taking the money for itself.  John Menadue

    I won’t lose any sleep if the Abbott Government proceeds to privatise Medibank Pte. It is anticipated that the sale could realise $4 billion. That will go almost half way towards the $8.8 billion that Treasurer Joe Hockey is providing as a reserve fund for the Reserve Bank, even if the Bank didn’t ask for it.

    Whether all of that $4 billion should go to the Treasury from the sale of Medibank Pte is a moot point. Don’t the policy-holders, some with as many as 37 years membership, have an entitlement to some of that accumulated value? I declare a personal interest as I became a contributor to Medibank Pte when it was established by the Fraser Government in 1976.

    Medibank Pte was established then because of the Fraser Government’s hope that it could be an alternative to the universal health insurance scheme which the Whitlam Government introduced and which later became known as Medicare under the Hawke Government.

    I am quite indifferent to whether Medibank Pte is publicly or privately owned. As Ian McAuley and I set out in an article for the Centre for Policy Development in January 2012, private health insurance is ‘high in cost and low in equity’.  See this article on my web by clicking on ‘website’ at top left hand of home page, then ‘health’ and then article of January 2012.

    Whilst Medibank Pte. Is publicly owned, it acts just like all the other health insurance firms that are privately owned.  I t serves no special social role. It is the largest health insurance fund out of the total of 40 funds. It has a market share of about 30% followed by BUPA with about 27%.

    I won’t repeat all of my objections to government subsidies for health insurance firms which cost about $7 billion p.a. for the taxpayer. But my objections remain strong.

    • The administrative costs, including profit, of health insurance funds including Medibank Pte are three times those of Medicare. Just look at the money they waste on television advertising.
    • With government approval, health insurance premiums have increased every year at well ahead of the CPI. The increase in Medibank Pte premiums are close to the industry average.
    • Private health insurance benefits high income earners at the expense of low income earners.  The more wealthy Australians use health insurance to jump the hospital queue
    • Gap insurance by health insurance funds has underwritten the largest increase in specialist fees in 25 years.
    • These health insurance firms limit the ability of Medicare to put a cap on cost increases, particularly by private hospitals and private specialists who are paid multiples of the salaries paid to equally competent specialists in public hospitals.
    • The US is the stand-out example of the havoc which high cost private health insurance (PHI) can cause. As I pointed out in my blog of March 4, 2013, ‘If the US had a health service like those in countries without heavy reliance on PHI, such as Australia, it could solve its budget deficit problem.’ Health services in the US scream out ‘Beware of private health insurance’.

    I have been a member of Medibank Pte for 37 years. It has been a waste of money. All it provided was some irrational ‘peace of mind’. I have found it hard to admit to myself that all those tens of thousands of dollars in premiums I paid over 37 years have been largely wasted. In the same way health bureaucrats in Canberra, under pressure from very powerful vested interests find it difficult to face the fact that their policy advice to governments on the subsidies to high cost  health insurance companies has resulted in appalling public policy.

    My forlorn hope is that an Australian Government will one day eliminate the $7 billion corporate welfare which the Australian taxpayer presently provides to PHI. There would be a bonus in money saved by the government, but more importantly it would shore up Medicare’s position as a single payer that could better control costs. Until that happy day occurs, I don’t really care whether Medibank Pte is public or privately owned. It makes no difference.  It is part of a high cost parasitical industry. All private health insurance is undermining the universal, efficient and equitable public health insurance system called Medicare.

  • Rod Tiffen. Abbott contempt of court.

    After the 2013 election, the ABC satirical program The Hamster Decides responded to an election night comment by the columnist for the Australian Chris Kenny that the ABC’s funding should be cut with an animated version of Kenny having intercourse with a dog.  Kenny demanded an apology and then sued for defamation.

    It is unusual for satirical programs or cartoons to be the subject of defamation actions, and such cases carry dangers for both sides in any litigation.  A jury’s reaction to something that in ordinary discourse would be bad taste or disproportionate is unpredictable.

    On March 6, Justice Beech-Jones ruled that the case could proceed to trial by jury because it carried the defamatory imputation that Kenny was a low, contemptible and disgusting person, although he rejected the imputation that the skit implied Kenny literally had sex with dogs.

    Following this partial victory by Kenny, there was a short publicity blitz by all those usual suspects who seize any opportunity to criticize the ABC.  In the short-term, Kenny and his allies seemed to be winning the propaganda war.  On the ABC panel show, Q and A (March 10), not one panelist took the program’s side.

    There were several claims that all Kenny had wanted was an apology, but this is in some doubt.  Sydney Morning Herald columnist Mike Carlton said that he had it on strong authority that Kenny had demanded a considerable sum of money, an on-air apology to be telecast after Media Watch, plus the statement that he was a fair and impartial journalist.  Presumably if the ABC holds its nerve and the case goes to trial, the truth of these early interactions will be revealed.

    Perhaps the most notable intervention was by Prime Minister Tony Abbott, who said in a TV interview: ‘Well the point I make is that government money should be spent sensibly.  And defending the indefensible is not a very good way to spend government money and, next time the ABC comes to the government looking for more money, this is the kind of thing that we would want to ask them questions about.’

    It is hard to remember any other prime minister making such an intervention into a civil case in progress.  It takes its place alongside other Abbott precedents, such as handing over his predecessors’ cabinet documents to the Royal Commission on the home insulation scheme, or using international fora such as the World Economic Forum in Davos to make domestic partisan criticisms.

    So far Abbott has had a Teflon run since becoming Liberal leader.  Partly this reflects the double standards at work in Australian politics.  If a Labor leader had made a comment like Abbott’s say about a News Corp columnist, there would have been a huge outcry.  Those media which have dutifully reported Abbott’s comments as sensible observations would instead have been filled with outrage.

    We have a novel situation in Australia at the moment, where substantial sections of the media (News Corp newspapers and commercial radio talk shows, at least in Sydney) see themselves primarily in tribal terms, that they are on side with the government.  In the process, those who seek to report politics impartially (the Fairfax press and in particular the ABC) are constantly attacked.

    Prima facie, Abbott’s statement seems to not only have decided what the outcome of the case should be, but also to threaten one side financially for continuing.  A naïve reading would consider that in a case which is sub judice and to go to a jury, this would constitute contempt of court.  But it is another Abbott precedent that is unlikely to cause him any damage.

    Rod Tiffen is Emeritus Professor in Government and International Relations, University of Sydney.

     

     

  • Wayne Gibbons. The boats were not sabotaged.

    “So we convince ourselves every cruelty we’ve inflicted – beginning with sabotaging boats along the Malaysia coast under Malcolm Fraser – isn’t a reflection on us. It’s tactical.”

    I was surprised and disturbed by this sweeping statement from David Marr in theguardian.com on 5 March. It unfairly casts a pall over the great success of Australia’s Indochina refugee program led by the Fraser government and the role of the immigration officials involved.

    From 1978 to 1980 I was based in Malaysia as Coordinator of Australia’s refugee resettlement programs in South East Asia. Prior to that fulltime roll I lead several short term missions to Guam and the East coast of Malaysia to offer resettlement in Australia to Vietnamese refugees. I have also served as private secretary to Ministers for Immigration in the Whitlam and Fraser Governments.

    From this vantage of involvement at the highest levels of government and at the coal face of refugee selection and resettlement, I am confident that no directions to sabotage boats were given to Australian immigration officers by people in authority and that no boats loaded with refugees were deliberately damaged by our officials. Though, I believe we may have disabled several empty boats to prevent their reuse to “push off” people who had already arrived on other vessels.

    I understand why some people may be confused on this point because we often spoke publicly about the need to “stop the boats”.  But far from resorting to sabotage as a tactical response, our strategy was to conduct a sizable, caring and efficient resettlement program under a Comprehensive Plan of Action with the countries of SE Asia in co-operation with the US, Canada, France, the UK, New Zealand  and ourselves.

    From the start, all resettlement countries wanted to discourage refugees taking very long and risky journeys across open seas in unsuitable craft. We all wanted refugees that were fleeing Vietnam on small boats to be landed in neighbouring first asylum countries into the care of the UNHCR. Australia and other countries had already agreed to treat all such people as refugees. This meant we could offer resettlement without first having to determine individual status under the UN Convention.

    From the fall of Saigon in 1975 until the first half of 1978, those setting out from Vietnam to cross the South China Sea were mostly rural ethnic Vietnamese. They travelled in small owner skippered fishing boats that were usually reasonably seaworthy.

    If our immigration officers came across any of these people as they arrived along the Malaysian coast they would try to counsel them to disembark and await an offer of resettlement. Most heeded that advice, but a few pressed on. At the same time, some local Malaysian officials would insist they keep going if their boat was seaworthy and in some instances resorted to towing them back to international waters.

    Being owner fishermen and competent seamen the Vietnamese were very reluctant to disable their own boats and would keep going if pushed off. Some made it to Darwin but most broke down en route and ended up in makeshift camps in Indonesia.  It is difficult to believe them allowing Australian officials to sabotage their boats.  Indeed I have been unable to corroborate such a suggestion among surviving officials who served in Malaysia during this period.

    All this changed rapidly from mid 1978 as arrivals increased dramatically. This next, far larger wave of departures consisted of urban people who paid corrupt officials and middlemen for their passage. They were predominantly ethnic Chinese who were crowded into vessels in numbers that made their journey highly dangerous. For example, a small vessel that would have carried 15‑20 Vietnamese could be packed with 100-130 ethnic Chinese in appalling conditions. Understandably they were almost always desperate to disembark at first landfall, be that in Thailand or Malaysia. Their wretched, cramped conditions and not infrequent encounters with pirates en route fuelled fears about being forced back to sea, which in turn encouraged them to scuttle their boats as soon as they reached coastal waters or if they were intercepted by Malaysian patrol boats. In any case, very few boats were able to withstand the coastal surf and most broke up within hours of beaching.

    UNHCR was very slow to gear up as arrivals skyrocketed and this created great frustration within the Malaysian Government, which was increasingly worried by the growing concerns evident among Malays living in kampongs along the east coast. Malaysia soon reacted by closing all mainland camps (except for the transit centre in Kuala Lumpur) and designating Pulau Bidong, an uninhabited island,  as the site for a major holding camp for arriving refugees. This created huge logistical difficulties for all resettlement countries, made worse by continuing UNHCR shortcomings.

    Malaysian patrols were also subsequently increased with orders to stem numbers landing in Malaysia by intercepting boats further offshore and deflecting them south. This led to a rapid build-up of refugees landing in the Indonesian Anambas Islands where the local population was quickly overwhelmed as more and more makeshift camps developed. Australia was among the first countries to organise resettlement from these new remote camps.

    Far from calculated cruelty, our approach to people leaving Indochina was generous and fair. It certainly did not include sabotage of small boats crowded with refugees.

    Despite the many difficulties, we made a significant contribution through resettlement. It was made possible through close cooperation with regional countries in a strategy that balanced their requirements and the demands of refugees with our own need to maintain public support at home.

    Whatever has happened since then, at the time of these policies it was a watershed for Australia. As John Menadue said in an earlier blog, “in accepting 150,000 refugees from Indochina …… Malcolm Fraser broke the back of White Australia”. Australia is a better society for it and I am grateful I had a role helping achieve that outcome.

    Wayne Gibbons was the Co-ordinator, Australian Indo-Chinese Refugee Resettlement Program. He was later Deputy Secretary, Department of Immigration and Multicultural Affairs and Deputy Secretary, Department of Employment, Education and Training. He was also the CEO of the Aboriginal and Torres Strait Islander Commission.

     

     

     

     

     

  • Susie Carleton. The ABC is at it again.

    Don’t we all now know from the upright Hon Scott Morrison that decent members of the Australian Armed Services would never – and did not – cause the burning of the hands of asylum seekers under their control. Nor was there any further ill-treatment of a later batch of unfortunates as claimed in ABC 7.30- Report of March 17. Servicemen told Scott – and he told us.

    Australian servicemen, according to Scott, are above such conduct and it is an insult to our nation’s Armed Services to think otherwise. Of this he is convinced because there are “Regulations” and a “Code of Conduct” which rules out the sort of behavior widely claimed by the victims.

    Isn’t there also not only a code of conduct but a criminal law to provide protection within the services against the gross ill-treatment and sexual violation of young men in the services’ playful initiation ceremonies or the sexual harassment, mistreatment, even rape of their female colleagues in the services.

    Recent years have seen, according to former Minister Steven Smith, more than 2,000 such incidents perpetrated by Mr Morrison’s upright servicemen. Almost without exception these have taken place on military establishments or vessels at sea with very senior military personnel close at hand. These offences have been committed against workmates and colleagues in the services.

    It ‘s surprising then that the same people become White Knights when operating among “enemies”, “Illegals” and “undesirables” virtually unsupervised on the high seas. Morrison said he had not bothered to question the alleged victims as they had “vested interests” in making their claims.

    In view of his “Code of Conduct” mightn’t the servicemen in question also have a vested interest in denial?

     

     

  • John Menadue. An enormous financial heist is underway.

    We saw the enormous power of the mining sector when the foreign-owned mining companies forced the Rudd government to ignominiously back down on its super profits tax. For less than $20 million in an advertising and public relations campaign the miners secured for themselves tax savings of over $60 billion. The public interest was surrendered to the mining lobby. Now the banking lobby is well on the way to pushing aside the public interest again.

    After a lengthy public enquiry and public discussion, the Gillard Government passed the Future of Financial Advice legislation (FOFA). That legislation was designed to legislate against the conflict of interest in the financial advising sector. The Coalition Government is now well down the track to restoring the privileged position that the financial advising sector held before FOFA. As Peter Martin in the SMH on 18 March put it ‘The government is removing the catch all requirement for financial advisers to act in the client’s best interest.’ The watering down of FOFA ‘will also re-allow sales commissions and other forms of conflicted remuneration where advice is general in nature.’

    This is a dramatic wind-back of FOFA. It is done in the name of ‘reducing red tape’ but it will ensure a bonanza for the financial advising industry which the previous government set out to curb. The so called “red tape” is often where the public interest is expressed.

    The growth of the Australian superannuation industry has become a honey pot which can now be more easily plundered. Last year the financial advisory industry pulled in funds of $21 billion from the super pool. With compulsory superannuation the super pool is growing rapidly. Last year it grew by $300 billion. Now Arthur Sinodinos, Assistant Treasurer and a former banker, is setting up the financial advising sector and the banks in particular to do even better in future.

    Under FOFA the Gillard Government made substantial changes.

    • Future commissions and other ‘conflicted’ payments were banned. (The Coalition will now allow commissions and allow conflicted payments on most products).
    • A legal obligation was placed on financial planners to act in the client’s best interest. (The Coalition will allow this legal obligation to be narrowed.)
    • A financial adviser who charges a continuing fee must obtain permission of the client every two years for the arrangement to continue. (The Coalition will remove this need for the client’s permission every two years.)
    • The client must receive an annual disclosure of fees. (The Coalition will limit this to new clients only.)

    The banks will be the major beneficiaries to these changes. They are finding the industry funds with their lower fees too competitive and bank profits and executive salaries clearly need boosting! Not surprisingly the bank public relations machines have been telling us every day in the media about the need to wind back FOFA and reduce red tape.

    As Daniel Brammall pointed out in this blog on February 25, there are 18,000 financial planners in Australia and four out of five of these are owned by a bank or an insurance company. He said ‘The big end of town … has influenced the new government to the extent that the issue of conflicts has been quietly brushed under the carpet. Last week the Assistant Treasurer said “The current ban on conflicted remuneration captures a far wider range of circumstances than was originally intended and has resulted in significant compliance costs for industry. Here’s the point … many thousands of Australians collectively lost hundreds of millions of dollars – some of them their life savings – in collapses like Westpoint. Conflicts of interest were primarily behind it and the intention of FOFA was to avoid this ever happening again. However, the new government is dismantling the reforms because industry has convinced it that they cost too much. In doing so, industry has successfully transferred the cost to the consumer because without reforms that squarely address conflicts of interest, Westpoint will most certainly happen again.’

    FOFA was designed to legislate against conflicts of interest in an industry riddled with conflict. FOFA is now being unwound.

    It is reported that the government is planning to unwind FOFA by regulation rather than by legislation. It is suggested that the new regulations will be put to the Governor General and Executive Council on March 28, the day after parliament rises for a six weeks break. This means that parliament would not be able to disallow the regulations for at least six weeks.

    This is a deplorable story of rent-seeking by lazy, but powerful vested interests. What a shoddy performance it has become. This heist may turn out to be even bigger than the miners’ heist a few years ago.

    Public life and the public interest are being corrupted by the power of vested interests with their lobbying power. As Ross Garnaut puts it, this power has become a “diabolical problem”. One after another these powerful interests are corrupting public debate and putting their snouts deeply into the public trough… the gaming industry, the alcohol and hotel industries the polluters and the miners. The finance lobby now looks likely to become the most powerful and dangerous of all

  • Azita Bokan. The tragedy on Manus – an eye-witness account.

    Azita Bokan was on Manus Island as an official Iranian interpreter during the recent violent clashes. What follows is an edited version of her interview by Richard Glover on ABC Radio Sydney on 21 February 2014.

    I came to Australia some 27 years ago and am a proud Australian.  My father was a writer and had a newspaper of his own. He was imprisoned in Iran as a political prisoner for his anti-government views. I escaped Iran and was forced to wait three and a half years in Turkey for my turn to migrate to Australia. At the time Turkey was unsafe and dangerous, rife with smugglers, drug dealers and organised prostitution but I had to wait there alone as a little child without a family. I was very grateful to Australia for rescuing me as a refugee which was why I recently enlisted to assist the Department of Immigration in its efforts to protect Australia’s borders.

    I was previously in Nauru and it is bad, but the situation on Manus is simply horrendous – the heat, the physical conditions, the malnutrition [mostly raw red meat without any vegetables] leading to diseases of many different kinds, and so much more. Oral hygiene is almost completely absent and what dental treatment is available results not in remedial attention but in the detainees having their teeth pulled out without anaesthetic. Most upsetting of all is the absence of anything for the inmates to do day after day and the fact that they mostly sit in dirt looking out to the surrounding fences, which have resulted in personal suffering with deep mental conditions which I can only describe as psychological numbness. When I became aware of this situation, my immediate reaction was that I would prefer to be dead than to live in a camp like this for a day.

    Until the recent troubles, I saw and heard no unruliness or misbehaviour still less violence on the part of the detainees. In fact I could not believe their calm patience, waiting seemingly for better days to come. They told me that they had been warned by departmental officials that if they misbehaved in any way or that something goes on their files suggesting that they were or might be troublemakers, their cases would not be processed and they would not be allowed access to lawyers.

    Then on the Sunday morning, with all of them holding onto the hope that they would one day get out of that hell, they were told by departmental officials that they will never see Australia, that no third country was volunteering to take them, and that because if its awful economic situation PNG would never be able to assist them.

    Despite the fact that most of the Iranians were well educated and their leader was a PhD who was against any protest or uprising, that news became a catalyst for the first real reaction among the inmates. Two guys climbed a fence even though there are many fences, each one further away than the others, and absolutely no chance of escape. The men had no weapons so they threw fruit at the guards, mostly peaches. The response of the guards was to use rocks and metal legs of dismantled tables destined for junking to attack the detainees. Some of the detainees may have thrown back the same rocks at the guards.

    On the Monday morning, we interpreters were told that there was no work for us as no lawyers were being allowed to enter and only the medical team was being admitted. After some delay, some of us were in fact allowed in to assist the medical team and from a distance of 6 or 7 metres, I saw one detainee pushing another guy in a wheelchair. The wheelchair guy was “brain dead” – his mouth was distorted, one arm was hanging down and he could not pull it back up. One of the guards called out to the man pushing the wheelchair – “Get out, get out!!!” The guy pushing the wheelchair held tight to the wheelchair and refused to let go. In very broken English, which I did my best to translate, he said that the guards had killed his mate the previous night and he did not trust them with the wheelchair man. He said he was going to stay with him in the medical room to wait for his turn with the doctor.

    Because of my efforts to interpret, the guards turned on me and accused me of interference and of sticking up for the detainee. This was nonsense as all I was doing was interpreting what he was trying to say. The man said to me that he feared the guards would kill the wheelchair guy if he left him. I offered to the guards that I would push the wheelchair or that they could get someone from the medical team to do so. There were many guards there at the time and one or more of them pushed me away and jumped on the guy pushing the chair. He was strong and would not let go of the wheelchair until 7 of the guards threw him to the ground and held him down. I pleaded with the guards to stop the violence but they and others in the pay of the Government turned against me.

    When my attention was again drawn to the guy in the wheelchair, I could see there was blood all over him. There was a needle in his arm as if for a drip but his arm was bleeding and there was no drip attached to it. No nurse would have done something like that. His head was injured, he had no eye movement and his mouth was hanging to one side. He was just hanging like a piece of meat. Any human being would want to help a person in that state.

    I remonstrated with the guards. I said that you cannot do this to people to whom you owe a duty of care. These people paid everything they had to a people smuggler, they put their lives on the line coming through a difficult journey. Many of them lost loved ones on the way yet they somehow got to Australia. Now you shift them to the most dangerous place in the world away from the media and from the eyes of good hearted Australians. I cannot believe that Australians support what you are doing to these people. You are killing them.

    This outburst had me escorted out and treated worse than a criminal. I knew I would lose my job but I refused to let them do such awful things in silence in the name of Australia so that people elsewhere can think of Australians as a violent people intent on killing innocents.

    While I was sitting in the interpreters’ room waiting to be deported myself, I heard the sound of shooting and a lot of noise and disturbance. So I went up on the roof where I saw some horrendous things. There were many people badly injured. I saw one man who had no brain, and nothing on his neck. His skull was crushed. Another man had his throat cut and a doctor was trying to push a tube through the hole in his neck but there was too much blood coming out. He could not find the man’s lung to get the fluid out while telling someone else to pump air in. I actually heard the doctor say that he was very tired after three days of constant work. I come from a country that went through a violent revolution. I have been through a war. But I have never seen anything like this. It was barbaric.

    I am for stopping the boats and the people trafficking but I want Manus and Nauru closed and the people treated properly. Australian taxpayers are paying a fortune to the Governments of Nauru and PNG to have these terrible camps in their countries. People who cannot pay their mortgages are funding these other Governments for this sinful activity. Bring them to Darwin or other places on the Australian mainland where we have ample facilities to house them. Those who are found not to be refugees should be sent back to their homes. But those who are genuine refugees should be introduced gently to the Australian way of life and culture and then into the community.

    The politicians do not like to admit they are wrong but they have made the wrong decisions here. I appeal to them – please be honest with yourselves. You have children and families. What would you do if your brother’s throat was cut? What if your children were starving, without water or showers, and standing in 50 degree heat? What if they are dehydrated, have diarrhoea vomit every day? Where are your consciences?

     

     

  • John Menadue. Gina Rinehart and the age of entitlement.

    It is a bit rich for Gina Rinehart, with the enormous privileges she has inherited, to be telling us that we all need to work harder, cut taxes and curb wasteful government spending. Born on third base, as baseball enthusiasts would understand, does give a very jaundiced view of yourself and others.

    There is a quite dishonest campaign being run about the need to cut spending and reduce taxes. It looks as if we are being softened up to help the “deserving rich”.

    The facts are clear however that Australian taxes are very low by world standards. At 28% of GDP our taxes are well below the OECD average of 34% of GDP and much lower than the taxes in some northern European countries that have very successful economies and where taxes reach about 45% of GDP.

    It is our tax system that needs attention as Ken Henry keeps reminding us, including could I suggest a stiff inheritance tax that would bring some people back at least to second base!

    One of the reasons why we have such lower tax revenue is because of ‘tax expenditures’ as economists call them. These “tax expenditures” cost our tax revenue $115 billion in 2012-13. “Tax expenditures” are government revenue foregone as the result of differential or preferential deductions and treatment of particular sectors and taxpayers. Deductions for superannuation are the most blatant of these rip offs. Ross Gittins calls those that benefit so much the “super fat cats.”

    In a working paper in January this year the IMF showed that Australia has one of the highest “tax expenditures” in the world. . We topped the list of 16 countries with “tax expenditures” as a percentage of GDP at 8.5%. For big spenders like Italy, it was 8%; for the US  7.5%; UK 6%; France 4%; Canada 2%; Germany 1% and South Korea 1%.

    The Australian Parliamentary Library in its report on January 28 this year was headed “Australia tops the charts in tax deductions”

    In Australia the “tax expenditures” that put us at the top of world ranking are in key areas  that benefit high income earners — superannuation, retirement incomes, health insurance, capital gains on short-term investment, housing (both owner occupied and investment), family trusts and the absence of inheritance taxes. These generous concessions have been designed to preserve the incomes of the wealthy and the middle class which both political parties have tried to keep onside. Such concessions have also favoured older Australians, to the disadvantage of the young, who have faced increases in university fees and more expensive housing and have been cajoled into private health insurance to pay for the healthcare of the aged.

    The IMF Working Paper highlighted the problems that high levels of “tax expenditures” cause.

    • They compromise fairness. The report says ‘Tax expenditures can be a poor way of pursuing equity objectives in a progressive tax system. For instance any policy that reduces taxable income will benefit most those in the highest marginal tax bracket and convey no benefit to those out of the tax system.’ It is surely unfair and unsustainable that if we are over 60 and regardless of the level of our income, we do not have to pay any tax on our superannuation income.
    • They can be inefficient and poorly targeted. ‘ … the current deduction of mortgage interest for instance may encourage leveraged housing finance’.
    • They are vulnerable to lobbying. ‘Special interest groups may find it easier to argue for tax breaks than for explicit spending support. Tax expenditures often bypass the scrutiny according to spending in the regular budget. … This lack of transparency may explain some of the appeal they hold … ‘

    In short, “tax expenditures” are unfair, inefficient and provide wonderful opportunities for rent seekers like the superannuation and the private health insurance industries in Australia to secretly lobby for concessions.

    If we reduced these tax expenditures by 50% we would be well on the way to meeting the $60 billion long-term structural budget deficit that we face.

    The problem is not in our spending or support for persons with handicaps or low incomes. The problem is in our taxes and particularly the system of “tax expenditures” that benefits the wealthy. But we don’t want to know about it. We complain about electricity prices and the carbon tax but they are small beer compared with the enormous rip offs by the wealthy in superannuation and aged pensions.

    The previous government made a few changes like means-testing the private health insurance rebate but it ignored the general thrust of the Henry Report for tax reform.

    Gina Rinehart and the deserving rich want to defend and expand middle-class concessions like “tax expenditures”. It is galling that people born on third base think that everyone else is wasteful and lazy.

     

     

  • Fran Baum & Paul Laris. Beware of the crocodiles, they will keep you out of the garden!

    We interviewed  20 former Australian Federal and State and Territory health ministers about the extent to which they were able to focus on promoting health, health equity and social determinants of health during their tenure. Social determinants of health are the conditions of everyday life (income, housing, food availability, employment, education) and the structural factors that shape those conditions (distribution of wealth, taxation levels, extent of political empowerment) that combine to determine health outcomes and their distribution. Evidence from the Commission on the Social Determinants of Health showed that action on the social determinants are vital to achieving equitable health outcomes.

    One health minister told us of a public servant who advised: ‘Health has two components to it. There’s health services, which is like a swamp full of crocodiles, and public health which is like a very pleasant garden’. The public servant noted that most ministers try and spend as much time ‘in the garden’ as possible but warned the minster to “make sure there’s a fence around the swamp and the crocodiles can’t get out first”.  From our interviews it was clear that nothing detracts more from a focus on social determinants than hospitals demanding ever more resources and ensuring they get on the  front pages. The strategies our ministers reported included “divide and rule”, for instance make allies with GPs at the expense of other groups of doctor  and having a very well-articulated, evidence-based policy framework to “divert money away from this monster of hospital based critical care”.

    Part of the process of fencing in the crocodiles was trying to shift the system towards primary health care, which as one minister said is “the only way to ameliorate the galloping demands and costs of the acute health care system”. Health ministers who had achieved a shift in health care resources in the direction of equity frequently reported it as a politically difficult move, given the competing, often emotive, calls for funding for the acute care sector. The good news is that when they did make a shift in the direction of primary health care they reported it as a legacy of which they were proud.

    Our interviews were with health ministers who held office between 1988 and 2010.  In the current health policy context even fewer few health minsters appear able to fence in the crocodiles. In South Australia we have seen very significant reductions in spending on our community health services, all done under the guise of a health funding crisis. Yet last year the salaried doctors received 9% pay increases, which seems to be a case of the crocodiles running the show! It will be interesting to monitor what happens in Queensland where Minister Springborg appears to be trying to fence in his crocodiles by introducing more stringent contracts, despite threats from the doctors about mass resignations unless Springborg backs down.

    Our study showed that only really brave health ministers are able to stare down vested interests sufficiently to make changes that are likely to increase health equity and bring about action on the social determinants of health. One of the most important things that might drive this action is a strong commitment to social justice and redistribution and a rejection of the current commitment to market fundamentalism as the bible which drives policy decisions. It is tempting to speculate that the influence of  content- free managerialism has joined with careerism amongst politicians  to reduce the likelihood of any effective ministerial commitment to equity.   A number of the ministers we spoke to felt that a spirit of redistribution had been more event in the 1970s and 1980s before the religion of neo-liberalism occupied the state. The introduction of Medicare was possible because it was linked to the Accord between the government, unions and business.

    If we are to see health ministers in the future who are driven to pursue health policy aimed at achieving health equity then they are going to have to stand up to some very powerful ideologies and players. These include the organised medical profession, those pushing market fundamentalism as a basis for organising society and a powerful medical-industrial complex that lobbies for privatisation of health services. With such pressures it becomes easier to see why the compelling evidence on the social determinants of health equity quite rarely translates into enacted policy.

     

    Reference

    Baum, F. Laris, P. Fisher,M. Newman, L. MacDougall C.  (2014) Dear Health Minister:  tend the garden but make sure you fence the crocodiles. Journal Epidemiology and Community Health Published 2 January 2014,  doi:10.1136/jech-2013-203040 http://jech.bmj.com/content/early/2014/01/02/jech-2013-203040.abstract.html?papetoc

    Fran Baum is the Matthew Flinders Distinguished Professor of Public Health and Director Southgate Institute for Health,Society and Equity, Flinders University. Paul Laris is Member Medical Board of Australia and adjunct researcher Southgate Institute for Health, Society & Equity, Flinders University.

     

     

  • Walter Hamilton. Calling a spade a spade in Ukraine.

    Ukraine, the U.N., the European Union and the U.S. have nine days in which to influence the tide of events in Crimea or witness the second (after the excision from Georgia of South Ossetia and Abkhazia in 2008) expansion of Russia’s military and political control beyond its post-Soviet borders. Nine days. That’s how long the Sochi Paralympics will run – during which the prestige-conscious Vladimir Putin is unlikely to declare ‘Full Ahead’.

    Everything about the Russian takeover in Crimea suggests a carefully planned, long-term strategy. The concoction of excuses being offered by the Kremlin, the disinformation about ‘fascist threats’ to Russian-speakers and Jews, comes straight from the old KGB playbook. It is utter nonsense to suggest the special forces being used in Crimea were briefed, equipped and deployed in response to an appeal for help from ousted Ukrainian president Yanukovych contained in that piece of paper produced days after the troops were on the ground. An operation like this, requiring the coordination of many external and internal elements, had to have been in the making for weeks, if not months. The reason Russia refused last month to sign the negotiated political settlement in Kiev becomes apparent: Putin had another solution in mind.

    Sitting in Sydney, thousands of kilometres from Simferopol, never having visited that part of the world, I am little qualified to comment on the events unfolding there, I admit. But I have read enough history and heard enough of Putin lamenting the ‘disastrous’ break up of the old Soviet Union to sense that Crimea satisfies more than a passing ambition for the Russian leader. Some more knowledgeable observers believe he is acting out of a need to distract attention from weaknesses in his own country’s economy and social cohesion; that what we are witnessing is opportunistic adventurism. While adventurists are not necessarily less dangerous than methodical imperialists, the implication of their analysis, that Putin is riding the tiger’s tail, smacks to me of wishful thinking. And, anyway, successful adventurism often proves habit forming, and domestic problems, and the opposition movements that in normal circumstances coalesce around them, tend to melt away when the cause of ‘national survival’ is invoked.

    The Internet offers us a bewildering array of information, commentary and analysis on the crisis. What I did not know about the history of Ukraine, up until a few days ago, was a lot; for many people, I imagine, it has been a quick swot. Yes, Ukraine has been an independent country for only a short time. Yes, it is divided along religious, ethnic and linguistic lines. Yes, Crimea occupies a special place in the survival story of the Russian people. Yes, Nikita Khrushchev may have been tipsy when he ceded Crimea to the Ukrainian Soviet Socialist Republic in 1954. But, so what? An invasion is an invasion, and no hastily organised referendum conducted under the guns of an occupying power can be considered a legitimate act of self-determination (first run a Russian flag above the parliament building, then ask the people whether they want to be part of Russia––an order of events reminiscent of the Nazi’s Lebensraum program). The use of thugs and militias to intimidate and threaten opponents––a further tool in the Kremlin’s kitbag, as we are seeing––is the present reality, and no amount of gesturing to former historical realities can cancel out what is happening on the ground today.

    Very few Europeans would welcome a return to the Cold War. Fewer still want a ‘hot’ war over Crimea. I suspect most governments would be satisfied if Putin stops there and does not extend his annexation to include eastern Ukraine. If so, there will be a touch of ‘Munich’ about the collective sigh of relief. (A Mark Twain quote is being used a lot lately: ‘History does not repeat itself, but it does rhyme.’) The planned economic and political sanctions are unlikely to have a deep or lasting effect. They’re already being be cited by the Kremlin as evidence of Western hypocrisy and anti-Russian animus; any chinks in the solidarity of the sanctioning states will be ruthlessly exploited.

    All nations bordering Russia, meanwhile, have been put on notice, especially those with significant Russian-speaking populations. Over the past 25 years, efforts have been made to draw Russia into the European sphere––under Putin now the tide is ebbing. The ancient contested ground of Central Europe faces increasing pressure to re-align national interests with Russian interests. The levers for this pressure from the east will include the threatened withdrawal of energy supplies, ‘nationalist’ agitation from within the Russian diaspora and blatant military power. There will be sweeteners, too, such as soft loans and trade privileges. All will be played out amid a geopolitical conversation about growing American irrelevance and impotency (see: Syria, Iraq, Afghanistan, Vietnam). Such is the worst-case scenario.

    A best-case scenario might be something like this: the withholding of international recognition for a Russian-annexed Crimea (the example of Burma-Myanmar is instructive about what can be achieved through a lasting international resolve); a policy of engagement with Russia based on strict reciprocity (starting with strategic trade goods) that stays Putin’s hand from turning off the gas pipelines running west; immediate material support for open and fair elections in Ukraine, with sufficient independent observers on the ground to validate the process; and encouragement for a more inclusive political culture, which might assuage Russian concerns about creeping NATO-ism. A failed and bankrupt state in Ukraine would, after all, be a more immediate threat to Russia than any member of the European Union. It could be smarter for Russia to let the E.U. and its partners pick up the tab. Now that could be the starting point for a real conversation with the Kremlin.

    Walter Hamilton reported on international affairs for the ABC for 13 years.

  • John Menadue. The lesser royals are on the move again.

    Prince William, his wife Kate and son George are to visit Australia next month. What joy awaits us. The weather should be good for a holiday and adulation from Tony Abbott and his monarchist friends.

    Seeing such a visit, the leaders in our region will again scratch their heads. In this ‘Asian Century’ why is Australia inviting a British royal to a country that says that its future is in Asia. The visit may give a short-term lift to tourism, but it will again put us on the wrong side of history.

    The royal entourage will visit Sydney, Melbourne, Brisbane and Canberra plus Uluru and the Blue Mountains. The all-up cost, based on previous royal tours, will be about $2 million, another dent in Joe Hockey’s plans to reduce our budget deficit.

    A visit by a lesser royal reminds me of Gough Whitlam’s comments to Queen Elizabeth at a Commonwealth Heads of Government Meeting in Jamaica in 1974. He had been concerned for some time about the lesser royals ingratiating themselves with state premiers to have an expenses free trip to Australia. Inevitably Gough Whitlam would receive a letter from Sir Jo Bjelke-Peterson or Sir Charles Court that it would be nice if a member of the extended royal family could visit Australia. Gough Whitlam was faced with the political problem of being seen publicly to be unfriendly to the royals. So he was cornered and the visit by the lesser royals went ahead.

    But at CHOGM in 1974, Gough Whitlam told the Queen that she and Prince Phillip were welcome – but could she please discourage other members of the family ingratiating themselves with state premiers to get a visit to Australia.

    So I was not surprised when the Queen told Australian officials on board Britannia at a reception ‘Your Prime Minister was very kind to Phillip and me. But he was a bit rude to the rest of my family.’  Importantly the message had been conveyed and she understood. She is a smart person. If only her children and grandchildren were half as smart.

    In Japan in 1979 I had the privilege of calling on Shigeo Nagano to tell him that the Fraser Government wanted to confer on him an honorary award of Companion in the Order of Australia. Shigeo Nagano had been a major contributor to the development of trade and particularly minerals trade between Australia and Japan. He had been Chairman of Nippon Steel and in 1979 was Chair of Japan’s Chamber of Commerce. He was a very nice man.

    After I described the award and its significance, the first question Nagano san asked me was ‘When can I go to London to receive the award from the Queen’. I had to let him down gently and explain that it was an Australian award and it could be presented to him either in Japan by me or he could go to Australia and receive it from the Governor General. He chose the former and a reception was held later in Tokyo for the investiture together with many of his business colleagues.

    It was just another illustration of the confusion in our region that comes from our quaint association with the British royal family.

    When will we mature and become an independent country with our own Head of State. We can do with fewer visits from lesser royals or any royals for that matter.

  • John Menadue. Conservatives, conventions and traditions.

    Conservatives extoll the importance of conventions, traditions, and respect for established institutions. But it seems to be only when it suits them.

    They lecture us and others about democracy, free elections, the separation of powers and the independence of the judiciary. Colloquially they sum it up ‘If it is not broken, don’t try to fix it’.

    There is an important convention on Cabinet papers. But the Abbott Government has decided breach that convention and hand over Cabinet papers concerning pink batts to a Royal Commission examining that issue. This is despite the clear Westminster convention as set out in my blog of February 10. The Cabinet Handbook is quite explicit.

    ‘The convention is that Cabinet documents are confidential to the government that created them and not the property of the sponsoring minister or department. Access to them by succeeding governments is not granted without the approval of the current parliamentary leader of the appropriate political party.’ (PM & C website – Cabinet Handbook, paras 17 to 19).

    It is clear that the Abbott Government has wilfully breached this long-held convention. The Prime Minister presumably instructed the Secretary of the Department of Prime Minister and Cabinet who has official responsibility in this matter, to hand over the Cabinet documents relating to pink batts to the Attorney General’s Department. This department then handed them to the Australian Government Solicitor. A PM&C official told the Legal and Constitutional Affairs Committee of the Senate on Monday February 24 “Documents were provided by the Department of the Prime Minister and Cabinet to Attorney General’s Department, who is co-ordinating compliance, in conjunction with the Australian Government Solicitor on the 31st [of January].’  PM & C cannot absolve itself of its responsibilities in this matter by passing the buck to the Attorney General’s Department or the Australian Government Solicitor.

    I have not seen any suggestion that Bill Shorten has agreed  to this handover as the Convention requires.

    Vilification of the ALP has not been enough for the Abbott Government in pursuing the pink batts issue. It has torn up a long-standing Westminster convention that Cabinet documents are the property of the government of the time.

    There are sound reasons for this Cabinet convention. Cabinet ministers should in confidence be able without fear or favour to discuss and decide important public issues. That is why the Cabinet convention stipulates that Cabinet documents are not to be released for 20 or 30 years.. Well-tried and valuable conventions should not be set aside for political point-scoring. Only in exceptional circumstances should conventions be set aside. This is not an exceptional circumstance.

    Our Westminster conventions are being breached by Conservatives who give lip service to our institutions, conventions and traditions but act quite differently.

    Malcolm Fraser broke the Westminster convention that was fought over for centuries in England that governments are made and broken only in the lower house, the people’s house.

    During the loans crisis, Sir Garfield Barwick, our Chief Justice, broke the convention of the separation of powers by briefing and politically fortifying John Kerr.

    We have also now recently learnt that High Court Judge Mason had clandestine meetings with John Kerr to support him in the dismissal of the Whitlam Government. He trashed the convention of the independence of the judiciary.

    Now Tony Abbott has trashed the convention of the confidentiality of Cabinet documents. This is no trivial matter.

    I hope the ALP can avoid the temptation of pay-back when it is next in government. There is a lot at stake.

     

  • National Council of Priests – Choosing a successor to Cardinal Pell – a pastor or a prince.

    In late February the National Council of Priests met with the Catholic Bishops Commission for Church Ministry. This is an annual dialogue. Fr Ian McGinnity who is the President of the National Council of Priests sent to his colleagues a record of the issues that were raised with the Bishops. The issues raised referred generally to the selection of bishops and archbishops. It has particular relevance to the process which will now be put in  motion for the appointment of a successor to Cardinal Pell. In its conversation with the Bishops, the National Council of Priests refers to comments by Pope Francis about the qualities he was looking for in bishops. The Council also described the issues which the Council believes should be followed in the appointment of bishops and archbishops.  John Menadue

    Episcopal appointments

    Ian McGinnity

    Since we last met two momentous events have occurred in the life of the universal Church. Firstly, the reigning Pope retired for reasons of age and health (only two other Pope’s have resigned from their post in the history of the Church, the first being St Celestine V in 1294; the last was Gregory XII, in 1415) sending a significant message to all involved in Church leadership that it was possible and also desirable to do so for the good of the Church.

    Secondly, we saw the election of a new Bishop of Rome, Francis, who has introduced a very different style of leadership in the universal Church which has given new hope and encouragement to many. Pope Francis has modelled and encouraged leaders at all levels in the Church to return to a more simple and Gospel aligned style of life.

    At the Holy Thursday Chrism Mass in Rome, Pope Francis delivered an appeal to priests to live simply, close to the needy and the suffering poor, instead of worrying about careers as “church managers”. He also said those who do not live in humility close to the people risk becoming “collectors of antiques or novelties instead of being shepherds living with the smell of the sheep”.

    On June 21 during a meeting with Nuncios and apostolic delegates he outlined the characteristics he wanted to see in candidates to serve as Bishops. He said he wanted “pastors who are close to their people, fathers and brothers, who are meek, patient and merciful, who love interior poverty and live that externally with a simple lifestyle and won’t have the mindset of a prince.”

    Candidates must be real pastors and shepherds “sustaining with love and patience the plans that God is working within his people. One who is wed to his diocese, the spouse of one church who is not constantly  seeking another.” He also stated “beware of those who are ambitious, who seek the episcopacy.”

    These criteria are challenging for all who assume this office. There is no doubt the selection process is difficult with fewer candidates and more onerous responsibilities. However a few issues still need to be faced.

    • The extraordinary length of time it takes to appoint a new Bishop, particularly in smaller dioceses.
    • The unfair expectation on elderly bishops to continue in office past the age of 75.
    • The movement of bishops between dioceses and archdioceses.
    • The lack of consultation of different groups (including the smelly sheep) in the selectionprocess.
    • The imposition of bishops with little past experience and smell of the sheep.We are aware that you have a major consultative role in the appointment of your brother bishops in conjunction with the Nuncio and the Congregation for Bishops.

      We respectfully suggest that you as a group express your hope that this process of selection will improve for the good of the people and priests.

      People rightly expect a more professional process for the selection of leaders the 21st Century.

  • John Menadue. The war on asylum seekers

    For political purposes the government has deliberately embarked on a policy and a language to militarise the asylum seeker issue in the same way the Howard Government did in the “war on terror”. It is designed to highlight the government’s resolve, to play to our fears about a threat and to lessen our rights to be informed. Failure to disclose is justified because we are ‘at war’.

    But the ‘war on terror’ and the so-called ‘war on asylum seekers’ would in fact be much better conducted by police, customs and our intelligence services.

    In this misuse of the military and language for political purposes we should not be surprised if a two-star military general is drawn into the political fray. Neither should he or his colleagues be surprised if they also get caught in political flack.  If they are in the kitchen, they can’t complain about the heat!  The military has crossed the line before. General Cosgrave showed that he was an enthusiastic supporter of the Howard Government in forcing Tampa to transfer the asylum seekers on board. He will now be our Governor General.

    Senator Conroy has been criticised for saying that General Angus Campbell, the Head of Operation Sovereign Borders, has participated in a ‘political cover-up’. In my view that is precisely what the Government and General Campbell have done. The military has been manoeuvred by the government into a role in the coordination of government agencies, most of them civil agencies like immigration and customs. To avoid public examination, the Minister Scott Morrison and General Campbell keep hiding behind the parroted phrase ‘on-water matters’. This is a political cover-up in which the military has become involved. That cover-up should be called as such.

    The Coalition has been quite clear in its language that it is at war with asylum seekers and people smugglers. Scott Morrison has described Operation Sovereign Borders as ‘a military led border security operation’. Tony Abbott has spoken of a war against people smugglers. In the first week of parliament Scott Morrison said that ‘The battle [against people smugglers] is being fought using the full arsenal of measures’.

    In war situations, the withholding of information can be justified. But surely we are not at war against unarmed people in rickety boats.

    Just consider what we heard last week in Senate Estimates about Operation Sovereign Borders and the cover ups.

    • Under the charade of ‘operational security’ the Defence Force Chief, General David Hurley would not confirm that orange lifeboats had been used. He replied ‘That is an on-water issue’. Yet we have all seen the orange boats on TV time and time again.
    • Asked if the lifeboats were Australian-flagged, Hurley responded ‘We can’t comment on on-water issues’.
    • Asked if the lifeboats were navy assets, Hurley replied ‘They are an on-water issue’.
    • Asked if there was general training for navy personnel in the handling of the lifeboats, the Chief of the Navy, Ray Griggs, said ‘If I talk about training then I would be going to “on-water matters”’.
    • How at least six Australian navy vessels intruded into Indonesian waters was a matter of ‘on-water operations’. Undoubtedly the crew of the navy vessels will be censured, but not General Angus Campbell who is in charge of OSB. That would be politically embarrassing because he has become the point man in the government’s cruel policies and the cover up.

    When public policy becomes militarised like this, no-one, including the military, can hide behind trumped up excuses, time and time again about ‘on-water issues’.

    How out of proportion this has all become. The plight of vulnerable people has become a highly politicised and military issue. This is a humanitarian issue which must be handled with firmness, but that does not mean that the military should be leading it. We also need the truth rather than senior officers and military leaders using lame excuses. We have seen too many other instances where the performance of the military, particularly at the Australian Defence Force Academy leaves a lot to be desired.

    Senator Conroy was much closer to the truth than his critics in the Canberra press gallery who so often see parliamentary events through a party political prism only and seems oblivious to the wider and more important issues of policy and principle.

  • John Menadue. The Carbon Tax and Flat-Earthers.

    Despite all the political rhetoric and hysteria, the evidence is mounting almost daily that the carbon tax is largely working as planned and that its impact on electricity prices is quite small, particularly compared with the ‘network costs’, the poles and wires, which have been the main drivers of increased electricity prices.

    But the flat-earthers in the government and News Ltd refuse to face the facts. They have run one dishonest campaign after another on the carbon tax, then pink batts and then the education revolution. We are paying an extraordinarily heavy price for the abuse of power by the Murdoch media in the dishonest and partisan campaigns they run. Are they all as ignorant as Rupert Murdoch’s favourite editor Rebekah Brooks who told a London court this week that she didn’t know that phone tapping was illegal!

    Just recall the extremist and exaggerated language of Tony Abbott in association with News Ltd on the carbon tax.

    • Whyalla will be wiped off the map.
    • Julia Gillard is trying to close down Gladstone.
    • The carbon tax is socialism masquerading as environmentalism.
    • It is a ‘great new tax on everything’.
    • The impact of the tax will be ‘almost unimaginable’

    It says something about the corruption of public debate that Tony Abbott’s campaign with News Ltd’s backing was successful. It was based on fiction and not fact.

    In October last year, one year after the introduction of the carbon tax, the impact on the CPI was almost undetectable. Treasury had estimated that a $23 per tonne emission tax would result in an increase of $9.90 in the cost of living for an average household. It turned out that the impact was even less than the Treasury has forecast.

    Earlier this week Michael West in the SMH on February 24 drew attention to the work of the Energy, Economics and Management Group at the University of Qld. These researchers found that network costs and retail costs which included the profit margin of energy retailers made up 62% of NSW residential electricity prices in 2013. The carbon tax made up only 10% of prices.

    In comparing increases in electricity prices in NSW and Qld between 2007 and 2013, the University of Qld Group found that price increases per kWh were due to the following.

    • Network costs – +7c
    • Retail costs, including profit margin – +2/3c
    • Green schemes, including carbon tax and renewable energy target, – less than 3C

    Generating costs were relatively stable over the period.

    The main increase in prices has been due to the ‘gold plating’ of the networks and the price-gouging by retailers along with large executive bonuses. Green schemes including the carbon tax have a much smaller impact – about 25% of the total increase in prices.

    Michael West put it this way. ‘Tony Abbott [must recognise] that it is not the carbon tax and renewable energy costs that are primarily responsible for energy hikes. The culprit is network costs and state governments that are making a killing’.

    Last week in Sydney the IMF chief, Christine Lagard, said that ‘environmental degradation’ [carbon pollution] was an external cost to the economy that had to be priced. She said that these ‘externalities’ must have a price. Almost every economist will tell us that a tax on ‘externalities’ like a carbon tax is much preferred to Direct Action that the Abbott Government is adopting.

    Tony Abbott has done enormous damage to good policy making to curb carbon pollution and global warming. The flat-earthers have so far won the day in Australia. But surely it cannot last. Is the Australian public so gullible to put up with these scare campaigns on the carbon tax? The flat-earthers in the coalition and News Ltd have done a great disservice to Australia.

    On top of this Tony Abbott is now hemming himself in with people who reject the overwhelming scientific evidence. The head of Tony Abbott’s business advisory group Maurice Newman and Dick Warburton the head of the review of the Renewable Energy Target both think that climate science is “group think”. Newman goes even further and describes climate science as a “scientific delusion”

    When will all this nonsense stop?

    For the sake of our children and grandchildren the flat-earthers must be strongly opposed

     

  • Daniel Brammall. Financial advisers and the conflict of interest.

    In December last year the new government announced how it was going to ‘make financial advice more affordable’ by amending the previous government’s ‘Future of Financial Advice’ (FOFA) proposals (1).

    Recall that the FOFA legislation was introduced in response to hundreds of millions of dollars of Australians’ savings  being lost in the corporate collapses of investments like Opes Prime and Westpoint, as well as financial planners like Storm Financial. These spectacular corporate implosions and the actions of incentivised planners largely took place between 2005 and 2007 — in what we now remember as the good times, before the GFC. Of the nearly $400m invested in the Westpoint group of companies, nearly half was recommended by financial planners (2).

    Given that financial planners propose to advise us on the $1.5 trillion we have in superannuation (4), what do we do about the Financial Services industry’s pink elephant: is this a sales or advice industry?

    In 2009 this prompted an investigation into the Financial Services industry by the Parliamentary Joint Committee on Corporations and Financial Services (3) which asked the question “what is the role of financial advisers in this country?”.

    The answer was unambiguous: “On the one hand, clients seek out financial advisers to obtain professional guidance on the investment decisions that will serve their interest, particularly with a view to maximising retirement income. On the other hand, financial advisers act as a critical distribution channel for financial product manufacturers, often through vertically integrated business models or the payment of commissions and other remuneration-based incentives” (3). The ASIC, as Financial Services watchdog, was more strident: “Remuneration structures used in the financial advice industry create real and potential conflicts of interest that can distort the quality of advice (5).” The ASIC says that not only are conflicts of interest inconsistent with providing quality advice but they are often not evident to consumers. It believes the most effective way to deal with this is to remove the remuneration structures that give rise to these conflicts.

    What could that look like? Simple: to hold yourself out to be a financial adviser, you must be impartial. This means no links to product manufacturers, no commissions and no ‘asset fees’ (commissions by another name). This doesn’t necessarily mean that no one can work for a bank or insurer anymore. It just means that you can’t hold yourself out to be giving impartial advice.

    However on the whole the Financial Services industry is not set up that way. Of the 18,000 financial planners in this country, four out of five are owned by a bank or insurance company. Of the remainder, virtually all of them receive commissions or charge fees calculated on the size of your wallet. In fact, fewer than 30 advisers Australia-wide appear to meet these criteria (8). A small band of independents is gathering under the brand of the Independent Financial Advisers Association of Australia (IFAAA) which last year trademarked a ‘Gold Standard of Independence’, specifically forbidding these three conflicts.

    The big end of town, though, has influenced the new government to the extent that the issue of conflicts has been quietly brushed under the carpet. Last week the Assistant Treasurer said: “The current ban on conflicted remuneration captures a far wider range of circumstances than was originally intended and has resulted in significant compliance costs for industry” (7).

    Here’s the point …

    Many thousands of Australians collectively lost hundreds of millions of dollars – some of them their life savings – in collapses like Westpoint. Conflicts of interest was primarily behind it and the intention of FOFA was to avoid this ever happening again. However the new government is dismantling the reforms because industry has convinced them it costs too much. In doing so industry has successfully transferred the cost to the consumer because without reforms that squarely address conflicts of interest, Westpoint will most certainly happen again.

    — Daniel Brammall, Brocktons Independent Advisory

    References:

    (1)   http://axs.ministers.treasury.gov.au/media-release/011-2013/

    (2)   https://westpoint.asic.gov.au/wstpoint/wstpoint.nsf/byheadline/Actions+against+financial+planners?opendocument

    (3)   http://www.aph.gov.au/binaries/senate/committee/corporations_ctte/fps/report/report.pdf

    (4)   http://www.superannuation.asn.au/resources/superannuation-statistics/

    (5)   http://www.apesb.org.au/uploads/attachment-4-c-asic-submission-to-pjc-inquiry.pdf

    (6)   http://www.smh.com.au/business/profit-above-all-else-how-cba-lost-savings-and-hid-its-tracks-20130531-2nhde.html

    (7)   “Retreat on planners to hit investors”, AFR 8 February 2014.

    (8)   http://www.superguide.com.au/how-super-works/truly-independent-financial-advisers-in-australia

     

  • Arja Keski-Nummi. Offshore Processing in Cambodia – Really?

    The idea of Cambodia as a so-called offshore processing centre is not new. For a nanosecond I recalled the former government contemplated Cambodia as a likely candidate for an offshore processing centre. Thankfully saner heads prevailed, although to their discredit they did also contemplate East Timor.

    The scramble to avoid doing the decent thing and accept our responsibility to process asylum seekers quickly and fairly is mind-boggling.  This government is following in the questionable footsteps of the former government in shirking decency for short-term political gain.

    Just consider the countries we are using for off shore processing or the one, Cambodia, now being considered.

    According to the CIA publication The World Fact Book 2013, Australia’s population of 22.2million has a life expectancy of close to 83 years, a GDP per head of $US 42 000  We have 3.85 doctors available for each 1000 people and by international comparisons negligible poverty. Compare this with PNG which has a GDP per head of $US 2700, a life expectancy of 66 years, where 37% of the population live below the poverty line and where there are only 0.05 doctors per 1000 .In Cambodia the statistics show the following for a population of 15.2milllion: life expectancy 63 years, GDP per head $US 2400, and where there are 0.23 doctors per 1 000 population and where 20% of the population live below the poverty line.

    We live in different worlds. Not only should we be embarrassed.  We should be ashamed to think that this is even considered.

    If we were truly serious about regional security and building a sustainable and dynamic regional economy and societies then we would not be offshoring our responsibilities for a small proportion of the world’s asylum seekers. We would not be decreasing our aid efforts in poverty alleviation, health and education as we have done to the tune of $250 million in the Asia Pacific region while “bribing” poor, politically unstable countries to take asylum seekers for an unknown number of years.

    The Foreign Minister cited the Bali Process as justification for the approach to Cambodia. It is a disingenuous characterization of the Bali Process to see an arrangement with Cambodia as consistent with recent Bali Ministerial communiqués that endorsed the concept of regional processing centres. It would do the government well to know how such arrangements worked in the Comprehensive Plan of Action under the Indo China program to understand how regional governments might view such arrangements now.

    It would also diminish the Bali Process if the Government uses it as merely a people smuggling forum and not actively support the development of the broader regional arrangements that Bali Process governments have endorsed in recent years and which address in a more holistic way both the people smuggling dimensions of population movements as well as protection and support arrangements for displaced people.  Admittedly such arrangements are not “quick fixes” but in the long run are more sustainable and realistic.  The pity is that Australian governments seldom have a long-term strategy in mind and are limited by their lack of imagination, the political cycle and fear of an electoral backlash.

    In 2012 there was an answer in the proposed arrangement with Malaysia that the Abbott Opposition rejected because it suited them, not because they really believed it was wrong but because they did not want the former government to succeed in “stopping the boats”.  Well, now that the Abbott Government has succeeded in that they should be big enough to revisit the Malaysia arrangement. It should see if it can be salvaged, make the necessary legislative changes and get on with the job. That arrangement was sound, it was humane, it was supported by the UNHCR and importantly it addressed the issue of displacement “in situ” unlike the arrangements on Nauru, PNG or indeed if it happens Cambodia. None of these are countries of transit or in any appreciable way countries of first asylum. Indeed with the current arrangements we are exporting those problems to them!

    If the two parties were really serious they would do what two previous Governments, the Fraser and Hawke governments did when faced with similar issues and talk to each other, agree on a way forward and show leadership by dealing with these issues not as a political free for all that creates social disharmony but rather as a responsible and humane approach to address the circumstance of vulnerable people displaced by war and civil unrest.

    Arja Keski-Nummi was First Assistant Secretary of the Refugee, Humanitarian and International Division of the Department of Immigration and Citizenship from 2007 to 2010.

     

  • John Menadue. Patriots and scoundrels.

    Samuel Johnson in 1775 said that ‘patriotism is the last refuge of the scoundrel’. That brings to mind the “patriotic” politics that both PM Abbott and the PM of Japan, Shinzo Abe, are playing. In this Tony Abbott will find more confirmation that “Japan is Australia’s best friend in Asia”, a term that irritates the Chinese.

    I am sure that Samuel Johnson was referring to false patriotism, but that is just what Tony Abbott and Shinzo Abe are appealing to in trying to reshape education and public broadcasting in both countries.

    Teaching children patriotism

    In October last year, Shinzo Abe’s education minister ordered the school board in Taketomi in Okinawa to use a text book that the school board has previously rejected. The school board refused because it included a nationalistic view of WWII history, particularly denial of the Nanjing massacre and comfort women. This order by the Abe Government was the first such order by a national government. It was not surprising that it was rejected in Okinawa which suffered enormously in WWII and continues to hold strong anti-war sentiments.

    Then in December last year, a carefully and politically appointed government committee suggested a change to more ‘patriotic teaching’ in Japan by putting local mayors in charge of their local school districts. Many people believe that this would increase political interference in text books and teaching.

    Shinzo Abe has long attempted to force Japan’s education system to be more patriotic. The word that he and his colleagues use is ‘balance’.

    The view of the Japanese people is clearly against giving more authority to local boards of education and to local Mayors. According to an Asahi poll published on February 18 this year, 59% of Japanese preferred a ‘system that is not dictated’ by local political leaders”. The Japanese people are clearly wary about ‘patriotic education’. Despite the clear view of the Japanese people, Shinzo Abe is continuing his cultural war.

    In Australia, Tony Abbott’s education minister, Christopher Pyne, is on the same track as the Japanese Government in promoting patriotic education. Christopher Pyne has appointed a politically biased curriculum review committee which is clearly designed to shape Australian education in ways that the Coalition Government wishes. Christopher Pyne says

    • Our schools curriculum should have ‘a greater focus on the benefits of Western civilisation’.
    • He wants the curriculum to ‘celebrate Australia’.
    • He would like to see ‘more of a focus on Anzac Day (he would presumably like us to ignore the frontier wars in which  30,000 indigenous  Australians were killed and the fact that Australians and New Zealanders did not first fight at Gallipoli, but in the Maori Wars in New Zealand in the 1850s and 1860s).

    In the name of ‘balance’ Tony Abbott and Christopher Pyne are waging their cultural war in education in favour of a false patriotism in the same way that Shinzo Abe is doing in Japan.

    Public Broadcasting

    Tony Abbott is also following in the footsteps of Shinzo Abe in his attacks on our own public broadcaster, the ABC.

    In my blog of February 12 this year, I pointed out how Shinzo Abe has stacked the board of NHK, Japan’s esteemed public broadcaster. PM Abe has just appointed five new members out of twelve to the NHK board. The new managing director of NHK, Katsuto Momii, and another board member, Naoki Hyakuta, have spelled out the way that NHK should pursue a more patriotic agenda. They have separately

    • Endorsed Shinzo Abe’s visit to Yasukuni Shrine.
    • Described the Tokyo War Crimes Trials as designed to fool the Japanese people.
    • The recruitment of comfort women was not peculiar to Japan.
    • The Nanjing massacre was a fiction.

    Not content with the drooling support of the entire Murdoch media, Tony Abbott complains about our public broadcaster, the ABC. He has said the ABC.

    •  Was ‘unpatriotic’ in the news coverage of the Snowden leaks.
    •  ‘Lacks affection’ for the home team.
    • ‘Instinctively, it takes everyone’s side but not Australia’s’.

    Tony Abbott has not yet had a chance to stack the ABC board but it is only a matter of time. Shinzo Abe has shown him how to do it.

    The public broadcasters in Japan and Australia are greatly admired for their professionalism and independence. The latest Nielsen Poll (17 February 2014) reveals that 59% of Australians do not believe that the ABC is biased. 67% felt that the ABC provided more balanced news and current affairs than commercial TV. Only 15% trusted commercial TV ahead of the ABC. Murdoch’s Daily Telegraph is the least trusted metropolitan newspaper in the country.

    The cultural warriors Shinzo Abe and Tony Abbott are on a unity ticket to try and force more patriotism from our education systems and public broadcasting.

    Neither PM is showing a sense of realism or integrity. They tell those close to them that they are right and much better than the rest of us. They are suggesting that they are patriotic and their opponents are not. They hold to a false and dangerous view of what it is to be a patriot.

    I have one qualification to the above.  I am less concerned about the swing to the right in Australia with its false patriotism baggage than I am about what I see stirring in Japan. In earlier decades the nationalist right was a silly and really harmless fringe parading around Japanese cities in grey vans with loud speakers. The patriotic and nationalist right is now occupying the centre of Japanese political life. The mood is changing after almost two decades of economic stagnation and frustration and now the rise of China. Shinzo Abe is facilitating this upsurge of patriotism and ultra-nationalism. There is a history he is drawing on, a history that brought tragedy to so many, including the Japanese people.

  • John Menadue. Manus and Nauru and Australia’s responsibility in regional processing.

    An asylum seeker who comes to our shores must be protected. We cannot offload that responsibility onto another country. We continue to carry a responsibility for that asylum seeker whatever happens in Manus, Nauru or even Malaysia.

    I have not always held the view that those who come to Australia could be transferred and processed in another country. I changed my mind on that partly because of the rapid increase in boat arrivals after the Agreement with Malaysia fell over in2011. The large number of boat arrivals was reducing public support for a generous and humane refugee program. I came to the view that what was important is that asylum seekers are treated with humanity and that the process is fair and just. The issue of where that processing occurred was a secondary issue.

    I also supported the proposed Malaysian Agreement for two other reasons. I saw it as part of an important building block in regional cooperation. Secondly, the UNHCR was actively supporting the proposed arrangement with Malaysia. The UNHCR does not support the transfers to Manus (PNG) and Nauru and the processing in those countries.

    Unfortunately the agreement with Malaysia was made impossible by the combined support of the Greens and the Coalition in the Senate to block amendments to the Migration Act. The action of the Coalition in the Senate was supported by refugee advocates across Australia. It was quite extraordinary to hear Tony Abbott and Scott Morrison along with refugee advocates criticising human rights abuses in Malaysia. No country is perfect, including Australia in mandatory detention, but the position of asylum seekers in Malaysia would have been a long way ahead of what is now unfolding in Manus and Nauru.

    The collapse of the Malaysian arrangement was the turning point. We have been on a slippery slide ever since. Boat arrivals quadrupled as a result of the High Court decision and the collapse of the Malaysian arrangement. Policies by the Labor Government and the Coalition since then have been punitive and cruel. The result has been Manus and Nauru.

    In my blog of January 14, I pointed out that the UNHCR has a long history of support for the transfer of asylum seekers in appropriate circumstances. Late last year the UNHCR issued a ‘Guidance Note on Bilateral and Multilateral Transfer Arrangements of Asylum Seekers’. It set out clear conditions, including important issues of non-refoulment and protection of the rights and the safety of asylum seekers in the country to which they were to be transferred.

    In the Melbourne Age on 13 December last year, Arja Keski-Nummi and I outlined a system of ‘effective protection’ that should govern any transfers of asylum seekers in our region. We set down several important criteria.

    • All countries should commit to the principle of non-refoulment.
    • Provide asylum seekers with a legal status and access to work and education.
    • Work to help not only displaced people but also host communities.
    • Increase our refugee intake from our region.
    • Work with partners in the region in association with UNHCR to create an atmosphere of safety and trust.
    • Amend the Migration Act to assert the principle of ‘effective protection’ and bind governments to that principle in any transfers of asylum seekers.

    Clearly few of the conditions have been met in the arrangements with PNG and Nauru. Importantly, the UNHCR does not support our arrangements with either country.

    Just as importantly, the Australian Government is failing to accept its responsibilities to asylum seekers that we have transferred to PNG and Nauru. We cannot offshore our responsibilities for ensuring effective protection and safety for asylum seekers. After demonizing asylum seekers for so long I don’t think the Coalition Government cares about the human rights of asylum seekers. Their rights, even their lives are just unfortunate and embarrassing collateral damage

    The horror on Manus is only one part of the havoc that Tony Abbott and Scott Morrison have wrought. They have badly damaged our relations with Indonesia. Their actions have resulted in the collapse of the rule of law in Nauru. And they are responsible for the release of details of 10,000 asylum seekers that will now be eagerly accessed by security agencies in Afghanistan, Iraq, Iran, Pakistan and Sri Lanka. What an opportunity it will be for those security agencies to now hunt down the families of asylum seekers who have fled to Australia from oppressive regimes in those countries.

    How ironic it now is that China is rebuking us for our abuse of the human rights of asylum seekers.

    One thing the ALP in Parliament should do immediately  is move to incorporate the principle of “effective protection ” in the Migration Act. It would clearly express the responsibility we have for persons transferred to another jurisdiction. We could then not shirk our responsibility by  passing the buck to others.

  • John Menadue. Cutting waste and costs in health.

    Last night on lateline, the Minister for Health Peter Dutton called for a public debate on health reform. I therefore have taken the liberty of reposting a blog of February 3 on ‘Cutting waste and costs in health’.

    The Minister for Health, Peter Dutton, has said that we must reduce waste and reduce costs in health. I agree. In 2011/12 total health expenditure in Australia was $140b up from $83b in 2001/2. Costs are rising rapidly, partly due to population increase.

    In a paper in July 2007 I estimated that there was at least $10 billion in possible savings and productivity improvements in health. That represented about 10% of our total health costs in that year. I have spoken and written extensively on the matter. See my web site.

    It is important however that as we work to reduce waste and costs we do it in a way that is fair to all and does not prejudice quality care.

    But to reduce waste and costs requires political will to stare down the powerful interests and rent seekers that are determined to protect their territory and their high costs –e.g.  the AMA, the Private Health Insurance firms, the Pharmacy Guild of Australia and Medicines Australia. In the past no governments has been game to tackle these vested interests.

    The lack of accountability in health

    Despite the rapid increases in costs and escalating demand in the healthcare industry, there is no accountability in any meaningful way for what the health industry produces. Doctors are accountable for malpractice but not for their overall performance particularly in general practise. This is despite the fact that taxpayers pay 80% of doctors’ incomes. Taxpayers have a legitimate reason to ask – ‘Are we getting value for money?’  In a survey a couple of years ago by the Health Council of Canada, 97% of over 1,800 senior respondents said that healthcare providers should be required by law to reach certain service benchmarks in such areas as patient outcomes , the use of preventive strategies like screening and waiting times.

    The Council also asked the group ‘Do you believe healthcare in Canada will improve if the government spends more money on healthcare?’  58% said ‘no’. There is the same lack of accountability in Australia.

    Managing the demand for health services

    The demand for health services is increasing rapidly across all age groups and not just among the old. We are over-diagnosed and over-treated. In 1984-85, medical services per head were 7.1 per annum. In 2007-08 they were 13.1 per annum – about double. The trend continues. We need to address this over servicing particularly by GPs and specialists such as pathologists and radiologists.

    • We must accept that we cannot have all that we want in health and that governments, in consultation with the community, have to set priorities. Can we afford continuing existing levels of funding for IVF and end-of-life treatments at the expense of funding for mental health and indigenous health?
    • We need to rationalise our co-payments to make them efficient and equitable. We all should take more responsibility for the way we use health services, particularly as we are now much wealthier than we were 30 years ago when Medicare was introduced. A universal health scheme does not have to be free. But it must be fair and efficient. But co-payments are a dog’s breakfast! We pay about 18% of health costs out of our own pockets, but there is very little rhyme or reason in how this is done. The $6 GP levy would make the confused situation worse.
    • We need to change the perverse incentives, such as fee-for-service, which is associated with bulk-billing. Clinicians are rewarded by the number of transactions rather than health outcomes. FFS is particularly inappropriate for chronic care like mental health and services with high fixed costs and low variable costs, such as imaging. The government should move away from fee for service and set budgets for general practitioners when they prescribe drugs, order pathology tests or imaging services. We need more doctors on salaries and capitation payments for caring for patients-not on a service by service basis.
    • We need to tackle the wide variations in the incidence of clinical practice across the country, e.g. caesarean sections and cataracts. Medicare should be much more proactive in exposing and limiting very expensive and inexplicable variations in clinical practice.

    Getting costs down

    •  The government should abolish the subsidy for private health insurance which costs all up about $6-7 billion p.a. This subsidy favours the wealthy, is inefficient, has underwritten rising specialist fees through gap insurance, has not taken the pressure off public hospitals and has weakened Medicare’s ability to control costs. The immediate abolition of this subsidy would do more to improve our health system than almost anything else. This is corporate welfare big time-more even the welfare to the motor industry.
    • We need a more productive workforce. Health is the largest and fastest growing sector in the Australian economy. Despite all the talk of improving productivity in Australia no-one has been game to take on the entrenched privileges in the health workforce.Where is the honesty and consistency here? The blue collar workforce is fair game but not doctors and lawyers. We need expanded roles across the board particularly for nurses, pharmacists, allied health workers and ambulance officers. The Productivity Commission in its February 2007 report estimated that a 5% improvement in the productivity of health services would deliver savings of about $3 billion p.a. This is a very conservative estimate. The health sector in Australia is rife with demarcations and restrictive work practices. eg 5 % of normal births in Australia are delivered by mid wives. In the Netherlands it is 70%, in the UK 50% and in NZ 95%. We have a few hundred nurse practitioners when there should be thousands. The work practices at Holden, Toyota and Ardmona are light years ahead of the work practices in the health sector.
    • We could save about $2 billion p.a. in drug costs if we paid drug suppliers the same prices that are paid in NZ. See my blog of January 17.We also pay a high price for the protection of  pharmacists through the 5000 limit on the number of community pharmacies and the restrictions on where new pharmacies can be located. Pharmacies cannot be established in supermarkets.
    • We need to raise productivity in our hospitals. The Productivity Commission suggests that the productivity gap from best practice in public hospitals ranges from 3% to 89%. In private hospitals the range is 22% to 37%.  There is major governance problems in many hospitals with a dis- connect between management and clinical functions. Running hospitals is very difficult with clinicians coming and going from private practise like the cottage industries of old.
    • The Commonwealth/State fragmentation in healthcare results in blame-shifting, the evasion of responsibility and higher costs. If for example the Commonwealth Government or a joint Commonwealth/State body had responsibility for all health care in a state, there would be a clear incentive for focus on treatment in the community and in homes to ensure that the high cost hospitals are really a last resort. They are now often a first resort.
    • The real elephant in the room in health care cost reduction is avoidable mistakes, including deaths. They are euphemistically called “adverse events”. But Ministers, clinicians and managers do their best to avoid the issue. Based on earlier surveys in NSW and SA I estimated, very conservatively the cost of avoidable mistakes in our health sector at $5b pa (see my blog of June14, 2013). Despite a great deal of money and effort there is no sign of improvement. Insiders won’t solve the problem Good people are caught in a bad system

    We need to address waste and cost-cutting in a measured way. We should not panic, but we should get it done.  Australian healthcare costs are 9-10% of GDP. This is not high by world standards. It is below the OECD average. A major reason why we have been able to do better than others is that we have Medicare as a public insurer. One lesson is clear all around the world. The countries that have high levels of private health insurance, like the US, have high costs.

     

  • John Menadue. Opinion and fact on climate change.

    Tony Abbott keeps telling us that climate change is not a factor in the current drought in eastern Australia. Last October he ruled out climate change as a factor in October’s early season bushfires in the Blue Mountains.

    He keeps giving us opinions when the facts, supported by overwhelming scientific research, tell us that Australia is already experiencing more frequent and more intensive heatwaves, and that we can expect the number of hot days to continue to increase. He said that the climate change will not be a factor in the drought aid package he will announce soon. That aid package should take into account climate change and the necessity for marginal farmers on marginal land to find other occupations.

    Tony Abbott’s confusion of opinion and fact reminds me of the comment made by the late Senator Daniel Moynihan that ‘Everyone is entitled to their own opinion, but no-one is entitled to their own facts’.

    Reputable people and reliable organisations are all pointing to the challenge that climate change presents to Australian agriculture.

    CSIRO says ‘forecasts show Australia will have to cope with less rainfall, longer dry periods and struggling crops’. (ABC News 15 January 2013). Mark Howden from CSIRO’s Climate Adaption Flagship Program tells us that ‘Increases in temperature … and decreases in rainfall will increase drought periods and increase dry spells’. (ABC News 3 February 2013). Steve Crimp, a Senior Research Scientist at CSIRO says that southern Australia faces ‘warmer and dryer conditions’. (ABC 3 February 2013).

    The Garnaut Climate Change Review said ‘Climate change is likely to affect agricultural production through changes in water availability, water quality and temperatures. Crop production is likely to be affected directly by changes in average rainfall and temperatures, in distribution of rainfall during the year and in rainfall variability. The productivity of livestock industries will be influenced by the changes in the quantity and quality of available pasture, as well as by the effects of temperature increases on livestock. … A range of studies indicate that grain protein contents are likely to fall in response to combined climate and carbon dioxide changes. There could be substantial protein losses … which would lower prices.’(p129)

    The Department of Environment of the Australian Government reported last year on “Climate Change Impacts in Australia” which included the impact on agriculture.

    • For NSW it said that ‘potential changes in climate may reduce productivity and output in agricultural industries in the medium to long term through higher temperatures, reduced rainfall and extreme weather events.’ It predicts possible falls in agricultural production in NSW by 2030 of 8.4% for wheat, 8.1% for sheep meat and 5.5% for dairy.(p35)
    • In respect of Queensland this report says ‘Future productivity growth in agriculture may be affected by climate change in the medium to long term…’ It mentions that ABARE estimates possible production declines by 2030 of 19% for beef and 12% for sugar (p45).
    • The report says in respect of WA, ‘By 2070 south-west WA is likely to experience yield reductions in wheat. Cropping may become non-viable at the dry margins with strong warming and significant reductions in rainfall.’ The report highlights that wheat production could decline by 9% by 2030 with similar declines for sheep meat.(p34)
    • For SA the report says ‘Since 1997 SA’s agricultural regions have experienced a marked decline in growing season rainfall. This decline is mostly due to a drying trend in autumn and to a lesser extent in winter. … Overall the trend in annual rainfall since 1950 shows a decline across the agricultural region. … Rising temperatures are likely to have a major influence on wine grapes bringing the harvest forward by a month and yielding lower quality grapes. … ‘(p35)

    In 2011 CSIRO published a report by Chris Stokes and Mark Howden on “Adapting agriculture to climate change” They say ‘The Australian climate is already changing and these changes have a measurable impact on primary production as the drying of the Murray Darling basin and the wheat belt bear witness” (p85) They add “ areas of farming that are economically marginal today are among the most vulnerable to climate change; here impacts are most likely to exceed the regions adaptive capacity, stressing their communities, farming systems and natural resources. Such areas include outer wheat belt zones subject to drying, warmer dairying or fruit growing areas, or irrigation communities whose water resources are in decline-all areas where quite small changes in climate can have quite large economic and social consequences”

    Tony Abbott refuses to face these facts.

    At the same time US Secretary of State John Kerry calls climate change “a weapon of mass destruction” and the IMF calls on Australia as the Chair of the G20 to show leadership on the issue

    What is just as remarkable is that the National Party which claims to represent farmers and country people is as quiet as mice in the haystack on climate change. The National Party relies on people like Gina Reinhart for financial support. It ignores the long-term interests of its own farming constituency by following the climate sceptics in the Liberal Party.

    No group in Australia is as vulnerable to climate change as Australian farmers. Historically they have shown themselves very good at adapting to change but they are not helped by the lack of leadership by the National Party.

  • John Menadue. The squandered mining boom.

    We are now paying a heavy price for our failure to manage the mining boom. The consequences are all too clear, particularly in the manufacturing sector. The mining boom drove up our exchange rate and wage costs. A Sovereign Wealth Fund (SWF) and the Resource Super Profits Tax (RSPT) would have minimised the problems. However, few seriously proposed a SWF. The Coalition and the powerful mining companies did everything possible to destroy the RSPT.

    The squandering of the benefits and opportunities of the mining boom is causing major disruption across the economy. What have we really got to show for the national treasure that we have squandered?

    We can take some late remedial action by cutting back on business and middle class welfare which I have written about. We should also increase our very low levels of taxation, particularly to fund our long term infrastructure needs, both physical and human.

    The Norwegians point the way for us in their establishment of a SWF in 1990. It was called the Government Pension Fund Global.

    • Last month each Norwegian became a theoretical millionaire through ownership in the Fund, but they would not have been able to spend the money. It was saved and invested for future generations.
    • The fund was set up to avoid the temptation by governments and the public to splurge the windfall returns following the discovery of oil and gas in the North Sea in 1969.
    • The funds the government receives in oil and gas revenue are invested almost exclusively abroad, rather than in Norway.
    • Exchange rate remained relatively stable and cost rises were checked. Unemployment has been kept low.
    • The Norwegian Finance Minister in January this year said “Many countries have found that temporary large revenues from natural resource exploitation produce relatively short-lived booms that are followed by difficult adjustments”.

    This is not to say that Norway doesn’t have problems but the fund has helped iron out big swings in oil and gas prices, stabilised the economy and allowed Norwegians to invest for the future rather than squandering money in the boom times

    We should have done the same. But at least we can be ready for the next mining boom which will inevitably come. Will it be in gas?

    Our Futures Fund just does not cut it alongside the successful funds established in Norway and elsewhere. Large SWFs operate in Saudi Arabia, UAE, China, Kuwait, Hong Kong, Singapore and many other countries.

    Instead of a SWF, we could have run much larger budget surpluses from 2003 onwards when the China boom kicked in. But there was always a political temptation of the Howard Government followed by the Rudd and Gillard Governments to win political popularity by spending the revenue from the mining boom. An SWF would have made it much easier to persuade Australians that we needed to save for the future and invest in key infrastructure. We showed that in our political support for the Disability Scheme. We were willing to pay the tax levy for the scheme because we agreed with the objectives of the scheme.

    The mining boom produced enormous profits for the mining industry. The industry squandered a great deal of it in foolish investments and wage increases that flowed through to other parts of the economy. The miners acted as if they were playing with monopoly money. Rio Tinto alone had to write off $35 billion in failed investments. Its business management in China was a debacle. With so much money flowing through its hands it lost any sense of rigor and discipline. Just imagine what the Institute of Public Affairs and its bulletin board the Australian Financial Review would say if any government in Australia lost money on such a grand scale.

    In addition to their foolish investments, they paid extremely high wage rates to attract skilled staff to the mining areas. In the five years to June 2013 hourly rates of pay in the mining sector increased by 24%, excluding bonuses. These pace-setting wages dragged up wages in other sectors – manufacturing up 17%, construction up 20% and retail trade up 16%.

    With so much income flushing through the mining companies a Resources Super Profits Tax (RSPT) would have helped average out mining company profits with high taxes in boom times and lower taxes during periods of lower prices. Paul Keating would have called it an automatic stabiliser. It was just what we needed in terms of equity in sharing the benefits of the mining boom, but it was also desirable for good economic management to slow down the boom and force companies to be more realistic about spending “monopoly” money. The RSPT would have better secured our future, bringing the budget into surplus much earlier.  We also know that taxing profits is a better means of raising revenue than through royalties based on production.

    We also know that the Rudd/Gillard Governments made a political mess of the RSPT.And in taking advantage of this mess the Coalition sided with the powerful mining lobby which was very good at engineering and protection of its narrow interests but not very good in prudent investments for the future.

    There is a painful adjustment ahead. We should make sure we learn from the failures of our last squandered mining boom.

     

  • Andrew Babkoff. The human side of refugees.

    (*names have been changed to maintain privacy)

    There is a significant amount of misinformation and misunderstanding surrounding asylum seekers (in particular ‘boat people’) and refugees in Australia. In response, a number of people outside of the mainstream media have highlighted the need for refugees’ stories to be presented through mainstream outlets. My personal experience as a teacher of refugees and migrants has allowed me to see the human side of the refugee issue by hearing about the stories of people who have been granted asylum in Australia.

    Below is a reflection I wrote after a numeracy class I had with a group of refugees and migrants in Brisbane in 2013.

    We had our tests today in numeracy. I gave them the shopping docket test and the one on the ANZAC biscuits recipe. Attendance was good. I spent the first twenty minutes pre-teaching vocabulary and reminding the students to show their working on the test paper. When they started the test, a hush of concentration fell over the room, and I kept a lookout for anyone who needed help. Some students, especially the younger ones, worked quickly, only needing a little help with concepts and the wording of questions. A couple of the mature age students, Afghan men, lagged behind and needed a lot of explaining, although their maths skills were quite good. Hassan, who seems around seventy, laboured faithfully over his paper, scribing his working and answers methodically and accurately. Several times, when they were speaking to each other in Dari, I had to remind Hassan and Mustafa, a man in his late forties, to ask only me if they had any problems, as it was a test. I sensed their frustration building, but I had to keep it fair for all students and maintain the standards of the process.

    I ended up spending another half an hour with Hassan after class. Apologetic and grateful for my help, he felt compelled to explain his slowness. His wife, in a beginner English class, came in and, after seeing us talking, sat down at the front of the room facing us. In what most people would call broken English (which was a huge improvement from when I first met him), Hassan recounted to me how he’d been denied the opportunity of an education in Afghanistan. He said, “I couldn’t have an education. Neither could my wife. Many times I’ve thought, ‘Why am I alive? What am I living for? Wouldn’t I be better off dead?’”

    For many years, he had done business in Afghanistan and neighbouring Pakistan and Iran, so spoke five languages fluently, but he lacked the English to be able to work and support his family in Australia. He told me, with heartbreak on his weathered face, how in Afghanistan he and his sons had run a successful used car business and that, when he had refused to share his profits with the Taliban, they had killed two of his sons. As he spoke, tears ran down his face and his wife wept silently. Despite her very limited English, I felt she knew what her husband was talking about. After he told me they had brought their three daughters to Australia, he and his wife lit up with joy as they expressed their gratitude at being given a second chance at life.

    Hassan came to Australia by boat with his wife and three daughters. Sadly, his third son and daughter-in-law died en route to Australia.

    Many refugees have similar stories of escaping horrors such as the torture, rape and murder of people in their family or community. In many cases, the journey to asylum is long and painful. It can also include years enduring the conditions of overcrowded refugee camps. In some cases, mothers even resort to prostitution to attain limited food for their children while staying in a camp. Some asylum seekers have to go to several different countries before they are finally granted refugee status. For some, getting on an old boat to come to Australia is the last option for survival, not an easy way to a better life by ‘cutting the queue’. If someone is willing to leave their home country and give AUD20, 000 or more to a ‘people smuggler’ to make the perilous journey across the sea to Australia, then it must be an act of extreme desperation to escape a situation that promises dangers such as persecution, even death. Some families send their eldest son with all their savings, a gamble for safety.

    In my nine years of teaching, I have never seen such determination to learn as I see among my refugee students. People like Hassan have rescued their families from imminent danger, giving them the chance to have a full and productive life. Though they may have experienced or witnessed horrific abuse, they live with a spirit of resilience and profound gratitude.

    As Hassan told me, “Here, in Australia, I feel for the first time I am free. I have started to live here. I and my family are very happy here.”

    Andrew Babkoff was an English language teacher in Seoul for five years. He is now an ESL teacher in Brisbane.

     

     

  • John Menadue-Refugees – the demographic dividend.

    As responsible members of the human family, we have a strong moral case to provide protection for the victims of persecution and violence.

    There is also a strong case in our own self-interest – that refugees almost by definition are risk-takers and entrepreneurial. It can be argued that they are amongst the most highly motivated and determined in the Australian community.

    Most importantly if we want to see economic growth and rising productivity we need young people. Even the hard headed economists know that it is people that matter and not how they have come here. We need to open our minds as well as our hearts.   Let’s look at asylum seekers and refugees from an economic perspective as well as a humanitarian perspective.

    Along with many other developed countries, Australia has a problem with its rapidly ageing population. Treasury and others have pointed out that in the future there will be many more old Australians than there are today. The number of Australians 65 and over is expected to increase rapidly from around 2.5 million in 2002 to 6.2 million in 2042. That is, from around 13% of the population to around 25%. For Australians aged 85 and over, the growth is even more rapid from around 300,000 in 2002 to 1.1 million in 2042. In 2002 there were more than 5 people of working age to support every person aged over 65. By 2042 there will only be 2.5 people of working age supporting each person aged over 65.

    Data published by Professor Graeme Hugo at the University of Adelaide has highlighted the much younger age structure of refugees. Refugees are not only younger than the Australian population, but also younger than migrants. Migrants and refugees will not be a silver bullet. We need to respond in many wages including lifting the retirement age, but refugees can make a significant contribution to slowing down the ageing of the Australian population. In his report published in May 2011, Professor Hugo pointed out the following:

    • ‘An important characteristic of the contemporary refugee/humanitarian intake … is that it is substantially younger than the national Australian population. … The medium age of the refugee/humanitarian intake over the 2003-09 period was 31.8 years compared with the medium age of 42.9 years in the population.’
    • ‘Not only is the refugee intake young when compared to the national resident population, it is very young when compared with the total immigration intake. … Dependent aged children and young adults aged 15-24(from a refugee background) are significantly over-represented compared with all migrants, while the middle and older working aged group (25-49) (of refugees) are significantly under-represented.’
    • ‘Refugee/humanitarian entrants… are disproportionately concentrated in the age groups which contribute towards a demographic dividend.’

    There has been recent comment about the increased number of Iranian asylum seekers. There is a debate whether they are really asylum seekers or economic migrants. There is no doubt however that they are young, well-educated and very determined. Most would make excellent settlers and are a very good example of how young migrants and refugees can lower our age profile. We need to open more migration pathways for young people who face discrimination within their own country but cannot be regarded as refugees as they have not fled their country.

    But an expanded refugee intake would not only deliver us a “demographic dividend”. Refugees make other important contributions as outlined by Professor Hugo

    • They are increasingly settling in regional Australia.
    • They place a high store on education for their children. 48% of second generation people who are Australian born have post-school qualifications. For the total refugee groups, the percentage is much high at 59%, with some refugee groups showing remarkably high levels of post-school qualifications, e.g. Estonia 65%, Latvia 65%, Slovakia 65%, Sri Lanka 61%.
    • Refugees are more likely to demonstrate entrepreneurial and risk-taking attributes than the Australian community as a whole. They have a higher incidence of owning their own businesses than other migrant groups.
    • The second generation of refugee settlers have a much higher level of labour force engagement than the first generation and in many cases, the level is higher than for second generation Australians.

    Their commitment to Australia is also shown in their uptake of citizenship.  A study prepared for OECD by the Department of Immigration and Citizenship (October 2010) reveals that the naturalisation rate by birthplace for all foreign-born is 80%. For significant refugee groups it is much higher – Croatia 97%, Poland 96% and Vietnam 97%. For New Zealand it is 45%, for the United Kingdom 71% and the United States 70%.

    Not surprisingly, refugees in their early years are ‘takers’ of Australian generosity. But year by year they increasingly become great contributors. They pay back many times the generosity they initially receive. They contribute to Australia out of all proportion to their number. It is a great success story for all Australians.

    We can draw inspiration from the very successful refugee programs of the past. Australian business and society generally have been great beneficiaries. It is in our self-interest, as well as for sound moral reasons that we need to break with the stalemate and toxic debate that surrounds refugees. Doing the right thing really pays off.

    Refugees deliver many dividends including a “demographic dividend”. They are much younger than the Australian population and migrants.

  • Mark Gregory. NBN – ageing copper network and structural separation.

    The Australian telecommunication industry is in crisis and centre stage is an ageing copper network that some would have you believe is good for another hundred years and others argue it is time to move to an all fibre access network.

    But the problems extend far beyond copper versus fibre and go to the heart of what an industry needs if it is to be a successful contributor to the Australian economy. As Australia struggles to find out how this sorry saga will end, questions should be asked of our politicians and telecommunication industry leaders why there is no plan for the future.

    To understand why criticism can be levelled at the development of one of Australia’s most important industries it is necessary to wind back the clock to 1982 when the Davidson Enquiry recommended the introduction of a competitive telecommunications industry.

    At the time Australia had three telecommunication organisations. The Australian Telecommunications Commission (ATC), trading as Telecom Australia, was responsible for the provision of terrestrial telecommunication services within Australia. Aussat Pty Ltd was responsible for satellite telecommunication and broadcasting services within Australia, and the Overseas Telecommunications Commission (OTC) was responsible for the provision of international telecommunication services. Aussat was established with a restrictive license that prevented competition with Telecom Australia, and to ensure this was adhered to, Aussat was effectively prevented from raising the capital it needed to flourish and two directors of Telecom were appointed to the Aussat Board.

    The Davidson Enquiry’s recommendation was timely and if it was implemented carefully the Australian telecommunications industry could have entered a period of expansion, competition and prosperity. So what went wrong? Everything.

    The first mistake, which has never been corrected, was a failure to map out the future of the fixed infrastructure, which at the time was largely copper in the access network and coaxial cable, microwave radio or copper pairs in the transit links.

    Optical fibre was new in 1982 and the Telecom Research Labs had started the process of introducing optical links into the Australian telecommunications network. Enough was known about the potential future capabilities of optical fibre for forward network planning to incorporate it into all major trunk routes by year 2000 and access networks thereafter.

    During the 1950s the then Postmaster General’s Department expanded the copper network beyond urban areas and commenced an ongoing maintenance and upgrade program. A key reason the copper network expanded beyond the urban areas was the recently adopted universal service principal by government that resulted after a robust campaign by regional and remote Australians for telephone services.

    The modern Australian copper network was progressively rolled out in the 1950s, first in urban areas and then to regional areas, with an anticipated lifetime of 50 years. In some areas the copper network is now more than 10 years beyond the anticipated lifetime. Copper networks do degrade over time, due to the effects of water leakage, the environment and mechanical damage. Over the decades the cost of maintaining the copper network has been steadily climbing.

    In the period 1982 to 1992 the fate of the three monopoly telecommunications providers was debated within the federal government, and initially the focus appeared to be on how to ensure each organisation remained viable rather than how to promote competition. For example, proposals for Aussat and OTC to merge were rejected in favour of OTC being merged with the ATC which was renamed AOTC in 1991 and finally became Telstra Corporation in 1993. Aussat was sold to a new entrant, Optus, as part of a deal enabling it to share a duopoly with Telstra in 1991-97 as a first step towards national infrastructure competition.

    Guidance on how the fixed infrastructure network could be expected to change over the next 50 years was not provided and was put into the hands of the telecommunications market to best determine, within the constraints of an amended Trade Practices Act (1997). But the reality was and remains that the future of the fixed infrastructure remained largely in Telstra’s hands until the advent of the 2009 National Broadband Network (NBN) policy, though this policy was flawed and Telstra retained ownership of exchanges, pits, ducts, traps and other infrastructure to be utilized by the NBN.

    In 1997 the government made extensions to the Trade Practices Act 1974 that guaranteed access to Telecom (Telstra) infrastructure on terms that were to be negotiated and ultimately regulated by the Australian Competition and Consumer Commission (ACCC). In 1997 the Australian telecommunications market was formally opened to full competition in accordance with the Telecommunications Act 1997.

    Or so the government would have us believe, because by carefully restructuring the existing incumbents the government created two monopolies that remain today: Telstra (national copper access network) and Aussat (later Optus – satellite broadcasting).

    Whilst other companies have launched satellites, installed undersea cables, installed fibre networks and built mobile cellular networks, Telstra and Optus remain dominant because each was provided with public infrastructure and in Telstra’s case the public infrastructure included the thousands of telephone exchanges and tens of thousands of kilometres of pits, ducts and traps that house the copper network.

    So Australia slipped into a regime where “competitors” would pay Telstra and Optus to utilise their infrastructure at rates negotiated or set by the ACCC, which ultimately include a profit component that ensures Telstra and Optus remain viable. The degree to which Optus retains an anti-competitive advantage has diminished more than Telstra’s anti-competitive advantage.

    Telstra in particular has taken every opportunity to leverage its infrastructure to optimise profit, often arguably at the expense of competition. As mobile telephone networks became more prevalent Telstra was able to convince the government that the mobile network should be used to provide aspects of black spot remediation, provision of emergency information and services that might be considered to be better provided under the universal service for which Telstra was most recently awarded another contract for 20 years in 2012.

    What this means is that Telstra has been able to draw on local, state and federal government funds to assist in the build out of the Telstra mobile cellular network. The extent of public funding received by Telstra for mobile network expansion has been difficult to quantify.

    At the last election the government announced that $100 million would be provided to assist with mobile cellular network expansion and black spot remediation. Telstra will argue that its network is best placed to facilitate the government’s aims, but only if all the money or the greater proportion goes its way.

    By the early 2000s Telstra found itself with two infrastructure competitors in the mobile cellular market and about 10 infrastructure competitors in the provision of DSL over the copper network. Prior to 2008 Telstra charged DSL providers for fixed telephone connection line rental in conjunction with a line rental cost for the provision of DSL. Effectively for every DSL provider customer Telstra would benefit through the provision of a fixed telephone service ensuring Telstra’s profit related to the copper network remained high.

    The decision by the ACCC, which Telstra fought all the way to the High Court in 2008, to introduce unconditioned local loop provisions effectively ended Telstra’s ability to force DSL providers to include fixed telephone connections with DSL.

    The loss of this income and the ACCC’s ongoing review of the charges that Telstra could levy DSL providers for DSL only connections meant that Telstra put the fixed network infrastructure into a holding pattern whilst Telstra focused its investment on expanding and upgrading its mobile cellular network.

    In the Howard government years between 1996 and 2007 questions were asked of Telstra about upgrading the copper network to FTTN for broadband delivery, and as time progressed the FTTP option was also discussed. The Rudd government asked the same questions and received the same answers, which amounted to Telstra asking for a government handout to upgrade to FTTN or overbuild to FTTP.

    By the 2000s there was a dawning realisation that effective competition would only flourish if there was a way to do what should have been done in the mid-1980s and that was to split Telstra into retail and wholesale organisations, so that future privatisation would facilitate effective retail growth whilst ensuring the wholesale organisation could go to the market when demand dictated to upgrade or overbuild infrastructure.

    In the Australian context this means upgrading or overbuilding the entire network, no piecemeal approach, no urban cherry picking of high value areas, because the universal service legislation effectively enshrines the right of every Australian to fair and equal access to a standard telephone service (it does not dictate fair and equal access to broadband or mobile services, which are left to the market). The 2012 government review and update of the universal service obligation did not include the provision of data services in the legislation and for this reason the outcome was flawed. Any thought that regional and remote Australia would accept anything less than a socially acceptable national outcome would return us to the robust campaign days of the early 1950s that led to the universal service in the first place.

    Whilst not discussing the national broadband network at this point, but staying focused on the reasons why the Australian telecommunications industry is not truly open and competitive, it needs to be pointed out that by “leasing” access to Telstra’s infrastructure for the national broadband network the government has effectively ensured that Telstra will retain its market dominance, because it can undercut any provider using the national broadband network knowing that it can make up the income shortfall through the profit it receives through the infrastructure lease agreement and maintenance arrangements.

    So where to from here? Australia is long overdue for a non-political rethink of how to facilitate an open and competitive telecommunications industry that results in effective structural change that includes Telstra’s separation into retail and wholesale organisations and also provides forward looking guidance on what the industry’s infrastructures needs will be over the next millennium.

     

    Mark Gregory is a Senior Lecturer in the School of Electrical and Computer Engineering at RMIT University. His blog can be found here.

     

  • John Menadue. Pink batts and the Royal Commission – a bridge too far.

    There are good grounds for Kevin Rudd and Julia Gillard to refuse to provide documents to the Royal Commission on Pink Batts. The Royal Commission is a very vindictive act by the Abbott Government. And the government looks like continuing to use other Royal Commissions for political purposes!

    In separate blogs by Michael Keating on January 8, 2014 and by me on July 11, 2013, we have pointed out the following.

    • 1.1 million installations were completed under the Home Insulation Scheme (HIS) – a considerable achievement.
    • The rate of fires during this scheme was three times less than prior to the HIS.
    • The regulation of programs such as this, including safety, is clearly in the hands of state governments, not the Commonwealth.
    • Only 7% of installations had to be rectified – a quite low figure.
    • One fatality was caused by a pre-existing fault; another was caused when an electrical installer was employed by another electrician, and a third death occurred when a contractor elected to work in oppressive heat.

    But beyond these issues which the media and The Australian in particular, ignored, there is an important issue of whether the Royal Commission should have access to Cabinet documents. Media reports suggest that Kevin Rudd and Julia Gillard may refuse to provide Cabinet documents.

    There is an important principle in the Westminster parliamentary tradition that new governments do not rifle through the documents of a previous government. This is set out very clearly in the Cabinet Handbook issued by the Department of Prime Minister and Cabinet in the name of the Australian Government. (7th edition, 2012). Paragraphs 17 to 19 say the following:

    • Cabinet records (files) are held on behalf of a government in the care and control of the Secretary of the Department of the Prime Minister and Cabinet (PM & C) and are issued to ministers and departments on a need-to-know basis. Once a minister or department no longer has any immediate need of them, and, in any event, when the minister vacates office or a change of government occurs, any copies of Cabinet documents must be returned to the Cabinet Secretariat or destroyed.
    • The convention is that Cabinet documents are confidential to the government that created them and not the property of the sponsoring minister or department. Access to them by succeeding governments is not granted without the approval of the current parliamentary leader of the appropriate political party.
    • Cabinet records and cabinet notebooks are accessible to the public through the National Archives of Australia after the expiration of the statutory closed period. The closed period, which for Cabinet documents currently varies between 20 to 30 years, seeks to provide the best balance between the competing priorities of, on the one hand, the need to safeguard privacy, security and confidentiality of the Cabinet, and to use available resources to best effect, on the other hand, maximising public access to records.

    I would expect that the Secretary of PM & C would now be advising the Abbott Government that the Cabinet documents relating to the Home Insulation Scheme (pink batts) should not be released.

    When Malcolm Fraser became Prime Minister at the end of 1975 he was being urged by party colleagues to release documents of the Whitlam Government relating to the ‘loans affair’ – a matter of far greater moment than pink batts. Some members or supporters of the Liberal Party had commenced legal action in the court in Queanbeyan against the former PM and and former senior ministers. Despite the opportunity to make more political mischief, Malcolm Fraser refused to have the documents released.  In my autobiography ‘Things you learn along the way’, page 173, I wrote ‘[Malcolm Fraser] was … persuaded that it was unwise for one government to be raking through the documents of another government and that if the matter came to court the Commonwealth Government should refuse to release them’. I was Secretary of PM & C at the time.

    It is one thing for parties to make political mischief in Opposition. In Government, they need to act more responsibly and with due regard to the established government and parliamentary conventions that have stood the test of time.

    Where there was a good case for a Royal Commission would have been for the Rudd and Gillard Governments to initiate a Royal Commission into how Australia became involved in the disastrous Iraq and Afghanistan wars. Fortunately, neither Kevin Rudd nor Julia Gillard chose a Royal Commission to settle a political score.

     

     

  • John Menadue. Cutting back government spending – does it include middle-class and corporate welfare?

    Tony Abbott told his listeners recently at Davos that small government was the best form of government.

    The Minister for Health, Peter Dutton, has said that waste must be reduced in our health sector.

    The Minister for Social Services, Kevin Andrews, has told us that our welfare system is unsustainable and has appointed Patrick McClure to review welfare in Australia.

    And the Treasurer, Joe Hockey, has established a Commission of Audit to look at ways to reduce ‘big government’ with priority to reducing government outlays. He said that the age of entitlement had to end. But for whom! He said ‘it is .. essential that the Commonwealth government lives within its means and begins to pay down its debt’. We know of course that by any international measure we do not have a debt problem but let us pass on that for the moment.

    Before we look at fair and efficient ways to improve our public finances, there are a few broad issues to be considered.

    First, we do have a long term ‘structural deficit’ of about $60 billion p.a. The IMF has told us that the most recent culprits were the Howard/Costello governments that reduced tax rates year after year when we were flush with revenue from the mining boom. The Gillard and Rudd governments did face the GFC and sensibly increased government spending. They made some attempt to reduce middle class welfare, but they failed to grasp the major recommendations of the Henry Review to reform our tax system.

    Second, Australia does not have a growing public sector. As Ian McAuley, Jennifer Doggett and I have set out in our submission to the Senate Select Committee on the Commission of Audit, there is no evidence of any sustained increase in government spending (see my website by clicking on at top left of this blog). In fact, outlays have been trending downwards since the mid-1980s. Andrew Podger, who is Professor of Public Policy at the ANU and former Secretary of the Department of Health and Ageing, said on January 22 in the AFR, ‘The claim that Australia’s welfare system is unsustainable would surprise observers in most other OECD nations which spend a much higher percentage of their GDP on social security payments. Our emphasis on flat rate, means-tested payments rather than earnings-related social insurance has limited the burden on Australian taxpayers.”

    Third, our tax as a percentage of GDP has fallen steadily since 2002 from 30% to 28%, well below the OECD average of 34%.

    Fourth, our health expenditure runs at about 9% to 10% of GDP which is much the same as the OECD average, mainly because of the efficiency of our public insurer, Medicare. We could save substantial amounts in the health sector however if the government would confront the vested interests in health that force up government spending – the AMA, the Private Health Insurance firms, Medicines Australia and the Pharmacy Guild of Australia.

    The issue that stands out is that we need to improve our revenue base. This is where middle class and business welfare is a major problem – the tax-deductions or ‘tax expenditures’ that reduce the effective level of tax and provides disproportionate benefits to the well-off in the community. FlagPost, published by the Australian Parliamentary Library noted on January 29 2014 that Australia has the highest level of tax deductions in the OECD

    • Treasury estimate that the concessions for super contributions and tax-free payments of superannuation to persons over 60 years of age, like me, costs about $32 billion p.a. A phase-in of a 15% tax on superannuation draw-downs would quickly raise $5 billion p.a.
    • The Grattan Institute estimates that property investors get a benefit of about $7 billion p.a. through negative gearing and the capital gains tax discount. These concessions help inflate property prices and push home ownership out of the reach of young people.
    • The Grattan Institute also estimate that the government provides about $36 billion p.a. in benefits to home owners through exempting the principal house of residence from capital gains tax and aged pension entitlements. The aged pension is asset-tested, but that test excludes the principal residence. The Minister for Social Services is not prepared to address this issue. The aged pension is excluded from his review. Yet the aged pension costs $36 billion p.a. and accounts for roughly half of the welfare budget. If the government was serious about winding back welfare it would not exclude the aged pension from any review.
    • The government has also excluded from the McClure Review Tony Abbott’s $5.5 billion pa parental leave scheme in which the baby’s primary carer would receive six months leave on full pay up to a maximum of $75,000 p.a. This is middle class welfare in neon lights.

    There are also large hand-outs to the corporate sector, particularly the finance sector

    • There is a subsidy of $6 billion to $7 billion p.a to the high cost Private Health Insurance companies who keep pushing up their premiums which are really private taxes.
    • If we had blinked just before Christmas, we would have missed the largesse that Assistant Treasurer Sinodinos handed out to the financial services industry. The previous government took action to stop superannuation advisers automatically collecting commissions year after year – trailing commissions. It was estimated by the Industry Super Network that this reform by the previous government in stopping these commissions would add $144 billion to private savings by 2027. But Arthur Sinodinos has announced that the Abbott Government will roll back this reform and give financial advisers a chance to plunder our superannuation savings again. The government has given the all clear to the financial advising industry to re impose a private tax on superannuation contributors. There is also no sign that the government is acting to stop the super funds owned by the big banks funnelling their cash exclusively into their parent banks for relatively low returns. It is a private tax on super contributors. That is surely abuse of power or worse but neither ACCC nor APRA seems concerned!
    • The Abbott Government has announced that it will retain the fringe benefits salary packaging for expensive, mainly foreign cars at a cost of almost $2 over four years.
    • The government shows no interest in saving $2 billion pa in drug costs by being as rigorous as New Zealand in negotiating drug prices with suppliers in Australia.
    • Large polluters will be subsidised by removing the market discipline of a price on the carbon that they emit.

    There are also other ways that the Commonwealth Government could address the structural deficit. It should expand the GST to include food, education, health and financial products. Most countries do not have the exclusions that we have. The extension of the GST would raise about $16 billion this year and $70 billion by 2016-17.

    In short, we need to lift taxation. Taxes in Australia are too low. It is the truth we refuse to name.

    In global terms we don’t have a government expenditure problem, although a great deal of middle class and business welfare should be rolled back.

    We also need to look urgently at areas of real need, particularly the disabled, those in need of special help in social housing, those who receive meagre benefits in Newstart (the dole) and refugees.

    We should all share the pain in getting our budget into shape, even though the problem is nowhere as severe as we were told in the election. My concern is that so-called “dole-bludgers “of talk back fame will be the target and the wealthy and politically powerful will be largely exempt. The government has already cut aid to the poor in developing countries.

    I live in hope but I am not expecting an end to the age of entitlement for the rich and powerful. Just think executive salaries, transfer pricing and tax havens! But maybe Joe Hockey has something up his sleeve!.

    Given the present weakness in the Australian economy it is also  important that the reduction in our structural budget deficit is done carefully and not in the drastic way that brought so many problems in Europe.

  • John Menadue. Sharks and asylum seekers

    Over the weekend we have seen thousands of people crowding onto our beaches on both sides of the country to protest against the culling of sharks in Western Australia.  I happen to think that the protesters are right, that people who swim in dangerous seas know the risks but are prepared to take them. Compared with the carnage on our roads, the number who die from shark attacks is quite minor.

    But the protests made me ask why we do not see the same protests supporting asylum seekers, fellow human beings fleeing terror of a different sort.

    Why are we so exhausted in defending the rights of asylum seekers? Maybe it is because the problem is so large, it’s long-term and seems to be intractable. What can we do to make a difference?

    I think our willingness to “pass by on the other side” is because for over a long period deliberate and successful attempts have been made to anaesthatise our consciences to the plight of asylum seekers and refugees. We have become numb to the tragedy that we have allowed to happen in our name.

    I suggest that there are a string of events and actions that have made us less sensitive.

    • John Howard was the first Prime Minister in Australia since the war to show us the great political benefit in appealing to our fear and our worst instincts. Tony Abbott has followed in the same path.
    • We were told at the time of the ‘children overboard’ event that asylum seekers were so inhuman and degraded that they would even throw their children overboard.
    • Tony Abbott continues to call boat people ‘illegals’, akin to criminals, when they are not. As a colleague of Tony Abbott’s at a Jesuit college put it ‘They are not illegals, they are our brothers and sisters’.
    • Scott Morrison told the Coalition Caucus that most people believe that asylum seekers are Muslims and that that should be exploited.
    • He later told us that asylum seekers bring disease and wads of money.
    • The new Member for Lindsay at the last election told us that asylum seekers are blocking the M4 in Sydney.
    • Eric Abetz in Opposition told us that asylum seekers in the community who offended, even in a trivial way, should be treated like paedophiles.

    The demonization of asylum seekers and refugees continues almost daily. The media is largely silent. Its major interest is the politics of boat arrivals, not the plight of the persecuted. The leadership of our churches, synagogues and mosques is scarcely heard. The Vietnamese community that was given a haven in Australia more than 30 years ago is silent. The Labor Party is largely silent as are many members of the Coalition who I know are privately very concerned about what is happening.

    What is it that sharks have that seems to make their plight more important than that of asylum seekers and refugees? Our consciences have become numb. The demonization of asylum seekers is proving to be a political winner.

    It seems to be worth making the effort to save sharks but not human beings also fleeing terror.

     

  • Walter Hamilton. The ABC and its Japanese Cousin.

    If the board and management of the ABC need to firm up their ideas about the proper relationship between a public broadcaster and the government of the day they might consider what is happening in Japan.

    NHK, that nation’s public broadcaster, is a $7bn enterprise largely funded from television licence fees, with a board of governors appointed by the prime minister. It exerts enormous influence through its highly rating news and information programs, but the situation in which it now finds itself––criticised for being a mouthpiece for the conservative national government––is in sharp contrast to the ABC’s predicament. In thinking about how to respond to the attacks of Tony Abbott and others, managing director Mark Scott and chairman Jim Spigelman might reflect on their Japanese cousin.

    There are direct parallels. The ABC has an international service that must report on controversial issues such as the Navy’s involvement in forcing back boats of asylum seekers from Indonesia. NHK has an international service that must report on issues just as touchy, including the territorial disputes Japan has with China and South Korea.

    On 25 January, at his first news conference after being appointed NHK president, Katsuto Momii (a former business executive with no background in broadcasting) was asked how the organisation should approach the subject of the Senkaku (Diaoyu) islands. He replied: ‘International broadcasting will be different from domestic programs. Regarding the territorial issue, it will only be natural to clearly present Japan’s position. It would not do for us to say “left” when the government is saying “right”’. In responses to other questions, he effectively endorsed the Abe government’s position on visits to the Yasukuni Shrine, the use of ‘comfort women’ during the war and the necessity of a new state secrets law.

    Though clearly embarrassed by this kowtowing performance, the government’s chief spokesman later excused Momii’s remarks on the basis that he was expressing his ‘personal views’––as if that made them irrelevant. (Former ABC chairman, Donald McDonald, while still in that position, continued his fund-raising activities for the Liberal Party according to the same logic, so there is an Australian precedent.) On Friday, summoned before a parliamentary committee, a nervous Momii heard an opposition member express the concern of some that NHK was becoming ‘the public relations department of the government’. Also last week, an economics professor quit an NHK radio program, on which he’d been a commentator for 20 years, after being told to refrain from criticising the nuclear power industry during the current Tokyo gubernatorial election. Keeping silent on the election issue, he was advised, was NHK’s way of maintaining balance.

    By some accounts, the man that Momii replaced at the top of NHK, Masayuki Matsumoto, decided not to seek a second term because of complaints from within Shinzo Abe’s Liberal Democratic Party that NHK gave too much prominence to critics of nuclear power and the American military bases in Japan. It must be said, however, Matsumoto’s presidency was marked by other scandals and for most of his three years the now-opposition DPJ (Democratic Party of Japan) was in office.

    Nevertheless, for someone who watches NHK daily (via satellite) a change in tone and content of its news and current affairs programs has become more apparent since the Abe government returned to power. Conspicuous has been the switch from prominent coverage of anti-bases activities in Okinawa to muted and irregular coverage of this issue. For such a thing to be apparent is significant because, for as long as I can remember, NHK’s news product has been predictably middle-of-the-road. Never flamboyant or opinionated, its programs could be boring through avoidance of controversy, and thus culturally conservative, but rarely did they carry political bias on their sleeve. Now, according to Momii, the policy is: what’s right for the LDP government is right for NHK.

    How this will play out with the Japanese public remains to be seen. Already one in four television owners is refusing to pay the NHK licence fee, for whatever reason. In this respect, NHK is more exposed to the public mood than the ABC, which is funded directly by parliament. It is easier for the Abbott government to punish the ABC by, for instance, taking away the Australia Network (which is funded separately through the Department of Foreign Affairs and Trade).

    There are some within the ABC who would welcome this step. They have always felt the international service sapped resources from the corporation’s primary, domestic functions and would rather have the battle-lines with the Coalition drawn along the issue of how the ABC serves its Australian audience.

    But this would be risky and shortsighted. Australia Network, if it is to project the nation’s values to the world, must be able to report without fear or favour, a core value in a society that embraces free speech. Here and now is the place to stand up and be heard. Secondly, the ABC’s critics obviously believe it is easier to make the case that the corporation has grown ‘too big’ than it is to win the ‘bias’ argument. (Donald McDonald himself took this line during a recent appearance on the ABC, though when asked for examples to prove the ABC was overstretched only mentioned seeing errors in Supers, the text that appears on screen identifying people during news items.) Chopping off the Australia Network, if achieved without great political cost, could embolden more and deeper cuts aimed at specific domestic services.

    In making a defence for the role of a vigorous public broadcaster the ABC’s bosses might look down the path NHK is sliding and take heart from the alarm being raised in Japan. The ABC’s journalists and other program-makers, meanwhile, though understandably eager to rush to the barricades to counter the apparent threat from the conservative side of politics should think again. It would be much better for them and for their organisation not to treat this as a partisan cause (Labor, when in power, also wants a co-operative ABC) and avoid openly siding with critics on the left (including on Facebook). The principles of free speech and openness that form part of the fabric of our democracy are, and must remain, above party politics. If the ABC, in upholding the highest standards of professional journalism, must sometimes say ‘right’ when the government says ‘left’, then the Australian public can be relied upon to know and respect the difference.

    Walter Hamilton, a former Tokyo correspondent, worked at the ABC for 33 years.