John Menadue

  • David James. CommInsure expose proves spin doesn’t always win.

    One of the challenges facing business journalists in Australia is the wall of spin they face whenever they are trying to uncover an uncomfortable truth. The spin ranges from outright lying to being highly selective with the facts. Most journalists either struggle to get beyond the wall, decide it is to their benefit not to attempt to scale it, or are simply too busy to even contemplate its existence.

    Consequently the spin, by and large, wins. Journalists always need sources to create stories — it is essential to their careers — and so are readily drawn into trade-offs: access to important sources in return for adhering to a certain line in the story.

    Or, as is increasingly the case with younger journalists because of the thinning of the ranks in the media industry, they dutifully copy out the media release, a practice known as ‘churnalism’.

    That is why any reader of business news should always ask: cui bono? Who profits from the story running?

    Most spin doctors are either former journalists, who have personal experience in how the industry works, or they are extremely well schooled in its dynamics. If a story appears in the media, it is more often than not because some spin merchants want it to be there.

    Happily, there are exceptions. Gold Walkley winner Adele Ferguson did a brilliant expose of the insurance industry for Four Corners and Fairfax that was definitely not on any spin doctor’s agenda. Indeed it was a demonstration that the craft of spin has its limitations if the journalist is skilled enough to get beyond the wall. And in recent years no Australian journalist has been better at it than Ferguson.

    Ferguson’s examination of the Commonwealth Bank’s insurance arm, CommInsure, uncovered many instances of unscrupulous practices, including refusals to pay out to victims of heart attacks, multiple sclerosis, cancer and mental illness. She uncovered instances where insurers looked for additional medical opinions in order to avoid payment.

    Her interview with Ian Narev, chief executive of Commonwealth Bank, was a semi-comic exposure of how the art of spin works.

    Narev seemed to have been advised to mention the word ‘customers’ as often as possible. A cynic might suggest that it was spin doctor trick number one: reposition the discussion by talking about victims of the bank’s outrageous insurance practices as ‘customers’. The intention seemed to be to muddy the waters: are these people really victims, or just dissatisfied customers?

    It was also designed to make it look like the bank is always acting in the interests of its shareholders. Thus we had statements like: ‘The long term risk here is that satisfied customers are good for shareholders as well.’ This comment, somewhere between deflection and banality, seems intended to draw attention away from the specific issue in order to consider the ‘wider context’.

    The next step, which that cynic might suggest was spin doctor trick number two, was to claim that the news story was just an unfortunate exception: ‘Being ethical is not the same as being perfect,’ a suitably humble sounding Narev admitted. ‘We need to realise we will make mistakes … one test of how ethical we are is how we respond to those mistakes.’

    In other words, ‘Trust us, we mean well.’ It is a technique partly designed to tap into suspicion that journalists only pick out the sensationalist exceptions. The problem in this instance, however, was that, thanks to Ferguson’s incisive investigation and the moral courage of Dr Koh, CommInsure’s chief medical officer, it was clear that the mistreatment was not an aberration; it was business as usual.

    Device number three was to introduce vagueness — more deflection. Narev insisted that the ‘culture’ of the bank is ethical. ‘Culture’ is a management buzzword that is sufficiently vague to remove any threat that someone might be held accountable. At the same time it gives the impression that management is in control. What exactly such verbiage really means is anyone’s guess, but that is probably the point.

    Ferguson insisted on talking about the ‘human beings’ affected in an attempt to push Narev beyond his corporate-speak and towards a more human response, such as shame or regret or horror, about what had been done to the sick and dying by the bloodless operatives in the company’s insurance arm.

    It left one wondering what it must be like to spend one’s days being cruel and indifferent towards people in extreme distress. Presumably, in order to deal with it psychologically, these insurance bureaucrats find ways to de-personalise everything.

    Ferguson did not succeed in eliciting a human response, but she did expose the spin. Narev started to come out with sentences like: ‘The reason to do the right thing by customers is because we are here to do the right thing by customers.’ Hard to argue with that. And there’s that word ‘customers’ again.

    The Commonwealth Bank chief executive unswervingly stuck to the script. The result was not edifying. It is to be hoped that when his media advisers submit their fees, they give him a discount. This time the spin definitely did not work.

     

    David James is the managing editor of businessadvantagepng.com

    This article was first published in Eureka Street on 15 March 2016.

     

  • Bryce Barker. Of course Australia was invaded – massacres happened here less than 90 years ago.

    Much has been made in the last few days of the University of New South Wales’ “diversity toolkit” offering teachers guidelines on Indigenous terminology.

    The most controversial directive was a line about using the term “invasion” to describe Captain Cook’s arrival here:

    Australia was not settled peacefully, it was invaded, occupied and colonised. Describing the arrival of the Europeans as a “settlement” attempts to view Australian history from the shores of England rather than the shores of Australia.

    This story made the front page of the Daily Telegraph. Radio personality Kyle Sandilands quickly condemned it as an attempt to “rewrite history”.

    But detailed historical research on the colonial frontier unequivocally supports the idea that Aboriginal people were subject to attack, assault, incursion, conquest and subjugation: all synonyms for the term “invasion”.

    This was particularly the case in Queensland, where the actions of the Native Mounted Police were designed to subjugate Aboriginal resistance to European “settlers” on their traditional lands, and to protect pastoralists, miners and others from Aboriginal aggression.

    The UNSW guidelines are not “rewriting” history – they are simply highlighting a history that has never been adequately told in the first place. This history is one that certain sections of Australian society are determined to deny, led by conservative media commentators who recently whipped up an indignant storm about how a university chooses to educate their students.

    It is telling that Sandilands suggested people “get over it – it’s 200 years ago” when we so revere the notion of Lest We Forget when remembering our role in a foreign war (WW1) 100 years ago.

    It is also worth remembering in this context that large scale massacres of Aboriginal people were still being carried out through the 1920s and early 1930s in some parts of Australia.

    A newly begun project focusing on the archaeology of the Queensland Native Mounted Police and Indigenous oral histories will look at the physical evidence of frontier conflict, including the range of activities undertaken by the Queensland Mounted Police, and the effects of their presence on both Aboriginal and non-Aboriginal people.

    The first step will be to listen. As Jangga Elder Colin McLennan, from Central Queensland, said in a recent project meeting:

    this subject has been left idling too long. Aboriginal people are very sensitive about what happened. We need to investigate these places and we need to talk about them openly and honestly … I’ve kept a lot of this knowledge in my head about Aboriginal people being slaughtered and the locations of the killing fields in my country. It’s like an open wound that needs to be healed and it needs to be dealt with. This history belongs to all of us. We need to share it with each other.

    In a way, Sandilands isn’t trying to deny the scale of frontier conflict (although many do) – he just wants us to forget about it. But who we, as Australians, choose to remember and what events we commemorate are inherently entwined with how we view ourselves and how we want the world to see us as a nation.

    Official records of the Coniston massacre, which took place in the Northern Territory in 1928, admit to 31 Walpiri, Anmatyerre and Kaytetye men, women and children being killed by Constable William Murray and his men. Is not an event on this scale – which happened just 88 years ago – worth remembering? Is not a Walpiri man’s death defending his way of life just as worthy of remembrance as a World War I digger’s ten years earlier?

    Why are we as a nation so reluctant to face up to this part of our past? Inconvenient truths that risk tainting the white “pioneer/settler” narrative are, it seems, not to be commemorated but forgotten.

    Although the historical record documenting frontier conflict is a powerful and unequivocal record of our colonial past, it is mostly limited to written records that largely exclude Indigenous voices.

    Yet the magnitude, persistence and near-universality of Aboriginal oral narratives of frontier violence are surely telling.

    Combining the material evidence for frontier conflict through archaeology with written records and Aboriginal oral tradition and memory, might be the one way to track events and their repercussions more clearly.

    Along with oral tradition, monuments and sites are powerful tools in remembering. They are physical markers on the landscape of events that happened.

    For many Indigenous communities, the physical evidence of frontier conflict in Queensland in the form of Native Mounted Police camps and locations where people were killed are — just like Gallipoli — important places of remembrance that should never be forgotten.

    Hopefully one day non-Indigenous people will be able to visit these sites and reflect on our collective history, rather than being threatened by it.

    Professor Bryce Barker is Professor and Acting Head of School of Arts and Communications, University of Southern Queensland. This article was first published in The Conversation on March 31, 2016.

  • David Peetz. Productivity in the Construction Industry: Did it surge under the Coalition’s Reforms?

    On 7.30 recently  the Prime Minister dismissed the Productivity Commission’s findings on productivity growth in the construction industry in favour of those from a small consultancy firm.  He used it to support a claim that the previous Coalition government’s legislative reforms in that industry had led to a 20% increase in construction productivity, which had ‘flatlined’ under Labor.

    Actually, though, things were a bit different.  To see how we know it didn’t, and why he said it did, we look at (i) what’s it all about—what reforms are we measuring; (ii) what the official data show about productivity in that industry; (iii) why the Productivity Commission and a consultancy firm differed on the issue; and (iv) why the Prime Minister wanted to prefer the consultant’s version of events.

    What’s is all about—what reforms are we measuring?

    The debate is all about special laws on industrial relations in the construction sector.  The Howard government passed laws in 2005 that created the Australian Building and Construction Commission (ABCC).  The legislation provided for six months jail for anyone refusing to cooperate with ABCC inquiries, or speaking about them to anyone, and increased penalties for other breaches of industrial law.  It didn’t just apply to construction workers—an passerby (an academic, in fact) on a street near a building site was interrogated for hours and threatened with jail if he spoke about it.

    But even more important than the legislation itself was how it was administered.

    In September 2010 the term of the Howard government’s appointee to the top job, John Lloyd, expired and he was replaced by a Gillard appointee, Leigh Johns.  Gillard in 2009 had already imposed some restrictions on Lloyd’s activities.  During most of Lloyd’s term, the coercive powers mentioned above were extensively used.  Johns adopted a very different approach.  He was much less antagonistic to unions.  The use of compulsory interrogations dropped by nine tenths in 2010.  Johns was criticised by Lloyd for pursuing sham contracting by companies—he labelled it a ‘trendy’ issue—at the expense of prosecuting unprotected strikers.

    In June 2012 the legislation establishing the ABCC was repealed and new legislation, retaining some coercive powers but with more safeguards, took its place.  The ABCC was replaced by the Fair Work Building Industry Inspectorate (which goes by the acronym FWBC).  Johns moved across to head that body.  As the ABCC under Johns had not been using its full powers, not so much changed with the new legislation in place.  

    In October 2013, after the election of the Abbott government, Minister Abetz put Nigel Hadgkiss into the top position, replacing Leigh Johns, who had resigned.  Hadgkiss was Lloyd’s deputy in the Howard years.  Hadgkiss accused Johns of having struck ‘deals’ with the construction union.  Hadgkiss was described as ‘tough’ and the ‘right man to restore rule of law in construction’ by mining employers and as a ‘well known union basher’ by former union official Brian Boyd.  The mining employer body considered that ‘appointing the right person…is just as important as implementing the appropriate institutional and legal arrangements’.

    So there are really three distinctive periods in Commonwealth oversight of the construction industry since 2005, corresponding to the ABCC under Lloyd (2005-2010), the years of the Labor appointee, Johns (2010-2013), and the Hadgkiss years in charge of FWBC (2013-2015).  The first and the third of these corresponded to ‘tough’ regulation, the second less so (though there were still coercive powers available).

    What do the official data show about productivity in that industry?

    The chart below shows labour productivity from 2005 onwards, in the construction industry and nationally, according to the ABS National Accounts.

    What immediately strikes you on looking at this is how labour productivity in construction moved in tandem with national level productivity until 2011.  There is no discernible effect from the ABCC legislation and the Lloyd years.  

    Peetz_Chart1

    Then, in 2012 and 2013, there were large improvements in construction productivity that were not matched by the rest of the economy.  Yet these were years when Labor’s appointee, Leigh Johns, was in charge of the ABCC and the FWBC, and coercive powers were rarely used.

    Through 2014 and 2015 productivity growth in construction wound back (it ‘flat-lined’) while other industries started to catch up.  This was the period when the ‘right person’ (or the ‘union basher’) Nigel Hadgkiss was back in charge of FWBC.  Hadgkiss’ years corresponded to the poorest two years of construction productivity growth since 2005.

    The second chart makes this pattern slightly clearer.  It shows the average annual growth rates over the three periods.

    Peetz_Chart2

    Across the economy as a whole, the average annual growth rate did not vary much between these periods.  But productivity in construction did: in the Lloyd/ABCC period, at 1.6% per annum, it was fairly similar to growth in the economy as a whole; in the Johns period, at 5.1 per cent per annum, it was well above national growth; and in the Hadgkiss period, at -0.5% per year, it was well below it.  (If you want to split the Johns period into the ABCC and FWBC sub-periods, the numbers were 5.7% and 3.9% respectively, both well above the rates achieved under the more aggressive regimes.)

    In short, the evidence suggested that productivity in construction was best when coercive approaches were not followed.  

    Why did the Productivity Commission and a consultancy firm differ on the issue?

    The consultancy firm the Prime Minister referred to—originally called Econtech, then KPMG Econtech, then Independent Economics—had been commissioned by the ABCC, and later by a construction employer body, to try to prove a point (that the ABCC had done a great job).  It published and republished largely similar reports, mostly updates using the same assumptions as the previous version.

    At the core of the original Econtech analysis was a spreadsheet error, which some colleagues and I identified.  Econtech eventually admitted this, but never changed the estimated productivity gains it claimed arose from the ABCC.  Instead it made selective (and contradictory) use of start and end dates and questionable techniques to try to maintain the original finding.

    The Productivity Commission obtained the original data we and Econtech had used, and found no error in our analysis.  It concluded that ‘it cannot be maintained that the data show — even in an indicative sense — that aggregate productivity improved because of the BIT/ABCC’ (p786).

    Why did the Prime Minister want to prefer the consultant’s version of events?

    The government seeks to re-enact legislation re-introducing the ABCC.  It has claimed that this is to deal with corruption in the industry, as identified by the Royal Commission on Trade Union Governance and Corruption, but there are three big problems with this. 

    First, the content of the ABCC legislation does not deal with corruption.  That is why it cannot be extended into a ‘federal ICAC’ as sought by some: ICAC deals with corruption, ABCC deals with strikers.

    Second, it was never the intention of the ABCC legislation that it deal with corruption.  It is not mentioned once in the Ministers’ second reading speeches in either 2005 or 2013.

    Third, re-establishing the ABCC was not a specific recommendation of the Royal Commission.

    So, another rationale is necessary.  Productivity has long been used, spuriously, as the rationale for the ABCC.  The Productivity Commission, never seen as a friend of unions, has dismissed the rationale, but the consultant’s report, paid for by the ABCC and employer bodies, naturally supported it.  So the Prime Minister has chosen to make use of the only report that endorsed the preferred course of action, regardless of its origin.

    What does it all mean?

    All this is not to say that productivity would be enhanced by a more liberal regulatory regime or regulator.  

    Rather, the whole idea that the regulatory regime or the regulator determine productivity growth in construction is a furphy.

    Productivity growth in the industry (and indeed, nationally) is influenced by a range of matters.  It goes up and down from one year to the next.

    In construction one of the biggest influences is simply how much work is going on.   So the biggest fall in construction productivity in the past three decades occurred after the construction boom leading to the 2000 Sydney Olympics came to an end.  It’s the downturn in the industry, not Nigel Hadgkiss himself, that has led to the current downturn in productivity.  

    But politicians and advocates will try to use productivity figures to prove a spurious point, carefully choosing the start and end dates to do so.  If it gives the right answer, they’ll broadcast it; if it gives the wrong answer, they’ll ignore it. 

    The claims about productivity in the construction industry follow that pattern.

    David Peetz is Professor of Employment Relations, Griffith Business School, Griffith University, Brisbane.

  • Ian Marsh. What’s wrong with Australian politics? Part 3.

    Here’s a puzzle. Over the past decade or so Australian politics has veered from one crisis to another. In that same period New Zealand has enjoyed effective and constructive government. What’s the difference? Let’s start with the different records.

    First Australia. Here is a rough summary. Five prime ministers in five dysfunctional years. Internecine party warfare. Gridlocked policy. Chronic leadership and factional rivalries. Intractable internal ideological conflicts. These factors in various combinations have stymied both Coalition and Labor governments.

    Then there are failed public consultations. They meander meaninglessly as in the Turnbull/Morrison approach to tax and the Rudd government’s 2020 Summit. Or they present choices which, for political reasons, government’s fear to take up – the Henry Tax Review. Or they founder on internal divisions of opinion within both major parties – Climate Change, Marriage Equality.

    It is salutatory that the only new items to successfully pass the Australian parliament in the last decade have attracted bipartisan support – plain cigarette packaging, NDIS, and (shamefully) a refugee strategy shaped primarily by political advantage.

    Contrast this with the New Zealand record. In the past decade or so the GST has been increased (to 15%), the top tax rate has been progressively cut (by 6% to 33%), a tax deductibility boondoggle was closed off (making losses incurred by qualifying companies deductible), an ETS passed, and the minimum wage increased from $12 to $14.25. Refugees have been offered sanctuary. Further, an (advisory) citizen initiated referendum indicated 64% were opposed to further privatisation. The government has therefore commercialised rather than privatised a number of public enterprises.

    Over this period John Key has remained prime minister. Like Julia Gillard, he has led minority governments. His party gained support from 45% of New Zealanders at the 2008 election and 47% at the 2011 and 2014 election. In no case did he score sufficient seats to win a majority in his own right. He was one seat short in 2014 but shortly thereafter lost a by-election.

    Other parties in the New Zealand parliament include the Labor opposition and a variety of minor parties: ACT (free market), United Future (socially conservative), Maori, Greens and New Zealand First (populist). Their role is underwritten by the New Zealand’s proportional voting system which, provided certain threshold conditions are fulfilled, guarantees seats to minorities. This ensures expression of minority views in the public conversation, but in constructive ways.

    Finally, unlike Australia, New Zealand is a unitary political system – only one powerful House.

    John Key has deliberately opted for minority government. How has he succeeded despite an Italian style melange of parties. A threshold condition is no doubt a mature democratic electorate. Thereafter Key uses party differences creatively. He governs from the centre-right. When contentious measures arise, he reaches out to left parties on social measures and to right parties on economic measures. This was the governing formula pioneered with great success by his Labor predecessor, Helen Clark.

    What does it tell us? First, that in these more pluralised times, great party blocs that try to aggregate too many diverse forces are dysfunctional. They are like unwieldy conglomerates, behemoths left over from the collectivist era. Look no further than the disabling factions that now thwart coherent government action for Turnbull.

    In truth there is much common ground between the major parties at the centre of the political system. But you would never know. On one side, the sniff of electoral advantage seemingly trumps any possibility of sane debate (go no further than the current imbroglio on negative gearing). On the other, internal cultural differences and rivalries thwart common action (marriage equality).

    Second, adversarial incentives dominate debate. The resulting public conversation more often than not thwarts public understanding of complex challenges. Paradoxically this is at a time when the backwash of globalisation creates an even greater imperative for prudent public discussion (e.g. refugees, global banking system fragility, the continuing advantages of free trade). Far from advancing this outcome, the parliamentary conversation is corrupting – it enhances public cynicism and, for immediate political advantage, forecloses options.

    In a nutshell, we have a political system that cannot lead us into the twenty-first century. This system was formed in 1909 when the present two major parties consolidated around different domestic responses to the capitalist economy. This debate was partially seen off by Gough Whitlam and finally put to bed by the Labor government in 1983.

    You have only to look at the recent agenda of issues to see how far we have come from that earlier era.

    Climate change is an environmental issue, a cause that first gained a place on the political agenda in the 1970s. Live animal exports reflect new concerns about animal rights and the decent treatment of non-human life. Gay marriage concerns the equal rights of citizens whose identities are other than or supplemental to social class. Not that class and gay identities or environmental or animal rights (or women’s, ethnic or Indigenous rights) are mutually exclusive. Rather citizen identities have multiplied and differentiated in a way that the older class-based structuring of politics does not recognise and has trouble accommodating.

    What can be done? We cannot mimic New Zealand’s solution. Our political system is too different. But we do have historic experience of how to govern in more pluralised times. This was the situation which the first federal governments faced between 1901 and 1909. This was also one of the most creative periods in domestic Australian political development. It was incidentally the last time in which we had a succession of five prime ministers. But then change worked constructively to advance compromise and the emerging political agenda.

    One important difference concerned the role of the Senate. It functioned then more like its US progenitor. Its committees acted as gate keepers for emerging issues. This largely lifted inquiries above partisanship. They gathered evidence, held hearings around the country, attracted media attention and helped focus the public and political conversation on real choices and options. A multi-party report moderated flagrant adversarialism. It gave governments the opportunity to gauge public opinion and possible supporting coalitions. Crucially, this was before they decided what to do. No expert inquiry could deliver such a result.

    What is the present relevance of this distant period? After a decade characterised largely by policy impasse, perhaps there is now some chance that the ‘problem’ might be parsed correctly. It is much more fundamental than poor communication, inadequate leadership or deficient narrative. The real political challenge is structural and systemic.

    Ian Marsh is a Visiting Professor at the UTS Management School. 

    Ian Marsh and Mike Keating will be writing a follow-up article next week.

  • James Morley. The idea that conservatives are better economic managers simply does not stand up.

    Conventional wisdom holds that conservative politicians are more prudent stewards of the economy. These politicians are often happy to reinforce this view by citing their business acumen and denigrating the experience – or lack thereof – of their opponents.

    Think of Mitt Romney as multi-millionaire businessman versus Barack Obama, former community leader. Donald Trump also highlights his business “experience”, although his track record suggests he’s done far worse at managing his father’s wealth than a monkey throwing darts at The Wall Street Journal.

    In Australia, Prime Minister Malcolm Turnbull has positioned himself as a successful manager of economic transition in advance of the next election.

    But what if we were to take the business metaphor seriously and hold politicians to account with a performance review in terms of “measurable outcomes”? Would there actually be any evidence for the view that conservatives are better managers of the economy?

    KPIs for politicians

    The key performance indicators (KPIs) in this context are economic growth and, possibly, inflation. And you might think it obvious that conservatives outperform their progressive counterparts given their penchant for deregulation and tax cuts. Ronald Reagan’s “Morning in America” after Jimmy Carter’s era of “stagflation” would seem to settle the case.

    Or perhaps the Reagan/Carter example is too carefully selected and the actual role of politicians in guiding the fortunes of the economy is far less significant than they tend to claim. That would have been my guess before looking at the data.

    However, in a new paper, Princeton professors Alan Blinder and Mark Watson have actually looked at the data and they find a striking difference in the performance of the US economy under Democratic and Republican presidents. And the Democrats perform much better than their conservative counterparts.

    Since the second world war, average annualised growth of US real GDP has been 4.33% for Democratic presidents and only 2.54% for Republican presidents. The difference is statistically significant and robust. Inflation has also been lower under Democrats, although the difference is not significant.

    Now, you are probably thinking of a lot of possible explanations for this finding that don’t necessarily imply conservatives are worse managers of the economy. But Blinder and Watson have probably thought of even more possibilities and have addressed them thoroughly in their paper.

    In terms of the KPI analogy, the first objection might be that the executive powers of the US president are more constrained by legislative checks and balances of Congress than a CEO is by a board of directors or shareholders, let alone a prime minister at the head of a loyal party. This is certainly plausible.

    But it turns out that there is no relationship between congressional control and economic growth. Average growth was highest when Democrats controlled both houses at 3.47%, but the difference with growth when Republicans controlled both houses at 3.35% is small and insignificant.

    So, perhaps, US presidents can be held accountable for what happened under their watch.

    Measuring success

    Now you might ask, who really cares about the real GDP? Probably only a few macroeconomists like myself, right?

    But real GDP growth turns out to be correlated with a lot of other stuff that people do care about.

    For example, and probably not surprisingly, the unemployment rate fell under Democrats and rose under Republicans.

    Perhaps more surprisingly, labour productivity and real wages grew faster under Democrats than Republicans, although the statistical significance is mixed.

    Definitely more surprisingly, fiscal conditions in terms of structural budget deficits were worse under Republicans than Democrats, although not significantly so.

    Completely surprisingly, corporate profits (as a share of total income) were significantly higher under Democrats than Republicans. In the words of Blinder and Watson, “Though business votes Republican, it prospers more under Democrats.”

    So, however one sets the KPIs, the Democratic presidents come out on top.

    The secret of failure?

    Why did conservatives do worse? This is the tricky question that Blinder and Watson only partially answer.

    Republicans were in the White House for 41 of the 49 quarters since the second world war in which the US economy was classified as being in recession by the National Bureau of Economic Research.

    So maybe Republican presidents just had to deal with the hangover from the profligate Keynesian policies of their Democratic predecessors.

    But, again, there is no support for this in terms of any indicators of fiscal (or monetary) policy. Meanwhile, Republican presidents actually tended to benefit from more momentum in the economy at the start of their terms.

    Blinder and Watson find that Democratic presidents mostly had the benefit of more benign oil shocks and international economic conditions, which were arguably beyond their direct control.

    In fact, the only Keynesian story that has traction in the data is the fact that consumer confidence was higher when Democrats were elected (perhaps “Happy Days Are Here Again” after all). But, as Blinder and Watson acknowledge, sorting out causality from correlation is particularly difficult with measures of confidence.

    It’s also the politician, stupid

    It has long been thought that economic conditions have a major influence on electoral outcomes. Yet it seems the electoral outcomes can also influence economic conditions, at least with US presidents.

    Looking at the Australian context, the difference in average real GDP growth across Liberal and Labor governments is not statistically significant, although the Liberals’ average has been somewhat higher at 3.58% compared to 3.18% for Labor since 1959 when quarterly data became available.

    But a lack of significance means this could reflect just a few outliers rather than a systematic pattern. Notably, the comparison is even closer since 2008, with 2.43% for Labor in the face of the Global Financial Crisis versus 2.60% for the Liberals at the end of the mining boom.

    No matter how one cuts the data, conservative politicians simply don’t perform so much better than their opponents as they would have us believe. At the same time, the reasons for their left-wing counterparts’ economic successes cannot be easily tied to better policies. Instead, it could simply be a “feelgood factor” that, alas, few of the current US presidential contenders seem to engender.

    As for Turnbull, he might do best to focus less on his economic management skills and more on promoting confidence – or perhaps even chasing rainbows (coincidentally the name of the musical that first featured “Happy Days Are Here Again”).

    Professor of Economics and Associate Dean (Research), UNSW Australia This article was first published in The Conversation on 5 April 2016.

     

     

  • Graeme Hugo, Janet Wall and Margaret Young. Migration between Australia and South East Asia is a two-way process.

    Migration flows between countries of the Association of Southeast Asian Nations (ASEAN) and Australia are generally viewed as going in one direction: toward Australia. In practice, however, data on this migration system reveal a much more complex picture that includes Australian emigration, significant temporary movements in both directions, and close connections between the two regions even after migrants permanently return to their country of origin.

    Australia has experienced significant inflows, particularly in the post-war period; almost half of its population of 23.2 million is either foreign born or has at least one immigrant parent. Unsurprisingly, therefore, it is usually regarded as a traditional destination country, drawing students and skilled workers from around the world and across the ten-member ASEAN region. Australia also sends a significant number of emigrants out from its shores. The last official estimates, back in 2003, put Australia’s diaspora at approximately 750,000. Unpublished Department of Immigration and Border Protection (DIBP) data reveal that for every two people who moved permanently to Australia from the ASEAN region between 1991 and 2013, one person moved in the opposite direction.

    To cast Australia as a destination country and ASEAN members as sending countries thus oversimplifies this regional migration system and fails to recognize the multidirectional movement taking place. Migration flows vary significantly across ASEAN countries, and over time. For example, while flows to Australia from Malaysia and Singapore have remained constant over time, Indochinese refugees dominated flows in the 1970s and 1980s. More recently, migration from the Philippines has increased. Recent trends in part reflect a shift in Australian immigration policy away from encouraging settlement toward drawing skilled (temporary) labor migration. Today most emigration from Australia to ASEAN destinations is to the fastest-growing economies, such as those of Singapore and Malaysia. Return migration to Vietnam is notable, while few are going back to Myanmar or the Philippines.

    Aside from permanent movements, DIBP data reveal significant levels of temporary mobility between Australia and the ASEAN region, in both directions. These include the movements of new settlers, visitors from Southeast Asia, Australian residents with roots in Southeast Asia, and former Australian residents from Southeast Asia who have permanently left Australia. Many ASEAN-born Australian settlers and residents make at least one overseas trip per year; more than half of those who once resided in Australia make at least two trips to Australia per year. The data also record nearly 600,000 nonresident ASEAN nationals traveling repeatedly to Australia, with 78 percent making at least one trip a year. These data on temporary mobility reveal the circular nature of migration flows between Australia and the ASEAN region, and indicate the strong ties that nonresidents, former residents, and current residents maintain simultaneously with both Australia and their country of origin.

    Migration flows between Australia and the ASEAN region are mostly skilled. Most ASEAN residents migrate to Australia as students, or through skilled temporary worker programs. This is reflected in the educational profile of the ASEAN-born population in Australia, compared with the native born: 35 percent of the ASEAN-born population has a tertiary-level degree, compared with around 15 percent of the native-born population. Migration flows in the opposite direction are similarly highly skilled. Of those who permanently move from Australia to the ASEAN region, most work as skilled professionals (38 percent), managers (21 percent), or technicians (13 percent). Given that many ASEAN countries are experiencing skilled labor shortages, policies to engage with diaspora members and encourage skills circulation are crucial.

    Evidence on migration flows between Australia and the ASEAN region reveals that many ideas about return migration are outdated. Traditionally, return migration has been thought to primarily comprise retirees returning home after a career working abroad, or “failed” migrants who could not make a success of their time overseas. Data for returning Australian and ASEAN nationals contradict such beliefs. Most migrants returning to Australia are in their 20s, 30s, or early 40s, with return rates falling with the 40-to-44 age group and older cohorts. Most migrants returning from Australia to the ASEAN region, meanwhile, are of working age (the highest return rates are found among the 30-to-49 age group), and are often accompanied by their young children. There is clearly a window of opportunity for expatriates in their 30s and 40s to seriously consider returning to their country of origin.

    Meanwhile, considerable improvements in communications and the reduced cost of international travel mean that expatriates can significantly contribute to their country of origin without having to permanently return. This offers major opportunities for development in the ASEAN region—and improved economic links between Australia and Southeast Asia. A growing number of diaspora engagement policies encourage the temporary or even “virtual” return of expatriates, recognizing the valuable contributions they can make while settled overseas. Policymakers can seek to tap the potential of diasporas in a number of ways, such as by encouraging them to send remittances, providing them with investment opportunities in their homeland, encouraging diaspora trade with (and exports to) destination countries, and facilitating technology and information transfer back to the homeland.

    The Australia-ASEAN migration system offers prime lessons for transatlantic sending nations. Unlike many countries, Australia records the movements of individual migrants in and out of the country, along with their motivations. Such data provide a remarkable opportunity to analyse migration patterns in this region. They show that international migration increasingly consists of temporary and repeat cycles of movement, and is far from a zero-sum game. Contemporary migrants maintain close ties with both sending and destination countries, potentially opening up new economic and development opportunities for both, regardless of where they choose to permanently settle. Rather than viewing emigration through the lens of “brain drain,” and focusing efforts solely on encouraging expatriates to permanently return home, policymakers in sending nations should instead try to better engage diaspora members—wherever they may be—to benefit from their accrued skills, experience, and networks.

    This is excerpted from the Migration Policy Institute (MPI) report, The Southeast Asia-Australia Regional Migration System: Some Insights into the ‘New Emigration’, which can be read in full here.

    This article by Graeme Hugo, Janet Wall and Margaret Young is run as a tribute to Graeme Hugo who died recently after an outstanding contribution to Australia’s understanding of migration.  John Mendue

     

  • Negative gearing has created empty houses and artificial scarcity.

    In the SMH on March 28, 2016, Laurence Troy and Bill Randolph discuss the problem of negative gearing encouraging owners to leave houses empty. In this article they say

    ‘At the last census there were nearly 120,000 empty dwellings in the greater Sydney region alone, representing nearly one fifth of the projected new housing demand to be met by 2031, or equivalent to nearly five years of projected dwelling need.  When this is combined with under-utilised dwellings, such as those let out as short-term accommodation, the total number of dwellings reaches 230,000 in Sydney and 238,00 in Melbourne.’

    Dr Laurence Troy is a research associate and Professor Bill Randolph is director of the City Futures Research Centre at UNSW.

    See full article in link below.  John Menadue.

    http://www.smh.com.au/comment/negative-gearing-has-created-empty-houses-and-artificial-scarcity-20160324-gnqoeb.html

  • Jon Stanford and Michael Keating – Submarines; cost, capability and timelines.

    This article is a response to the article posted yesterday by Paul Barratt and Chris Barrie.  ‘The case for building the future submarines in Australia.’

    Both Paul Barratt and Chris Barrie have served at the highest levels in Defence and their views are clearly worthy of very serious consideration. Indeed, their contention that a military-off-the-shelf (MOTS) solution is impossible because Australia does have a unique role for a submarine and that the future submarine (FSM) should be built in locally, is shared by many people.

    Nevertheless, it is surprising that Mr Barratt and Admiral Barrie do not discuss the capability for the FSM required by the Navy, the cost of providing that capability and the timeline in which the capability needs to be delivered. The authors have not attempted to justify spending $4.2 billion each on a conventional submarine (SSK), the first of which will not be delivered for 17 years, when a MOTS conventional submarine would cost well under $1 billion and even a large, highly capable Virginia class nuclear submarine costs around $3.7 billion. These submarines could be delivered in the early 2020s, or ten years earlier than under the White Paper scenario. This would mean that a costly and highly risky upgrade of the Collins submarines would not be required.

    While the Navy’s requirement for submarine capability is ambitious, it is by no means unique. Its requirement, for example, is similar to that of the UK and French navies. The problem is that its ambitious capability requirement, particularly for force projection in the South China Sea, points to a need for nuclear submarines, which both the other two navies operate. The previous Defence Minister acknowledged this by saying: “ideally we are seeking a comparable capability to a nuclear submarine with diesel-electric motors”.

    Unfortunately this is a fantasy. If Australia is determined to operate its submarines in the South China Sea in support of the Americans, then this could only be achieved with a reasonable margin of safety by a nuclear powered submarine. In that case, Australia should make it clear that its support for the US in forward operations in the South China Sea is contingent on the US agreeing to allow Australia to acquire nuclear submarines.

    On the other hand, if Australia cannot or will not acquire a nuclear submarine, then it should abandon the strategy of force projection in far-off contested waters. In any case, as the Australian Strategic Policy Institute has pointed out, there is no evidence to suggest that the US expects the RAN to undertake this task, which, in reality is a great power role.

    Once the role of force projection in contested waters has been dropped, then contrary to what Mr Barratt and Admiral Barrie suggest, there are several off-the-shelf solutions that would meet Australia’s submarine requirements. These roles include sea denial in the approaches to Australia, together with intelligence gathering and surveillance in our region. Indeed, a small conventional submarine, readily available off-the-shelf, is more appropriate for these tasks than the large boat the Navy wants. We might need six of these submarines, delivered in the early 2020s at a total acquisition cost of less than $6 billion. Combined with the savings from not having to upgrade Collins (an impossible task, according to a former submarine captain), we would be well over $45 billion better off than under the $50 billion proposal contained in the White Paper, which in any case does not allow for the highly risky Collins upgrade.

    Of course, Australian industry participation is a good thing provided it is competitive and does not compromise the defence benefits to be provided by the new assets. If ASC could deliver six SSKs in the early 2020s on a fixed price contract within, say, five per cent of a MOTS price, then by all means go for it provided the risks are managed appropriately. But otherwise, let’s bank the $45 billion or so saved on the submarine acquisition and let ASC content themselves with the $30 billion project to build the nine large frigates they have been promised in the White Paper. They will also be tasked with sustaining the new submarines, at a through life value much higher than the acquisition cost.

    Jon Stanford and Michael Keating  are Directors of Insight Economics and formerly worked together at the Department of the Prime Minister and Cabinet, where Dr Keating was the Secretary.

  • Ian Marsh. Disaffected electorates? Dysfunctional political systems? Part 2 of 3.

    Malcolm Turnbull’s has created the grounds for a July election. This crafty electoral ploy offers short term gains. If the cross bench resist, the election is legitimate. If the cross bench cave in, he will have demonstrated bold leadership. Moreover, he will have attained legislation that is highly prized by his Liberal heartland. Then he can call the scheduled election later in the year.

    But in neither election scenario is he likely to achieve a Senate majority. Further, there is talk of preferencing the Greens. There may also be guile here. This might give him leverage on social issues against the Abbott diehards.

    But what about good government?

    To explore this more important issue, look first at changing voting patterns. In Australia’s case, an astonishing (in historical terms) around 40% of eligible citizens either vote for minor parties, vote informal or don’t register to vote. Hardly a ringing endorsement of the once dominant major parties. The preferential voting system used in the Representatives gives a totally false impression of their   public standing.

    The Senate on the other hand, is elected through a proportional voting system but based on state constituencies. Paradoxically, this yields a distribution of seats much more aligned to the actual distribution of the popular vote. The Senate represents our underlying diversity. So much for the ‘unelected swill’.

    Australia is not alone in these expressions of citizen disaffection. Perhaps the most familiar and egregious examples of disconnect between mainstream parties and voters are in the US and Britain. Trump and Sanders are both leading anti-Establishment insurgencies. In the case of the US, the political structure, the party structure and political culture vary so much from Australia’s that comparison or inference is mostly superficial.

    Britain is more familiar. Jeremy Corbyn reflects disenchantment with the neo-liberal consensus of the Blairite elite. Some say he is unlikely to survive the year although Labour Party rules on leadership elections are ambiguous. Despite his unexpected election victory, David Cameron may also later face a leadership challenge, so bitter are the fractures that the EU referendum has opened up in the Conservative party. Nicola Sturgeon and Scottish nationalism represent yet another fault-line.

    In Europe, elections this year and late last year have disavowed mainstream parties in Germany, Spain, Ireland, Portugal and Slovakia. Spain took three months to form a new semi-stable government after elections in December. Germany does not face a federal election until 2017 – but in recent local elections voters turned from the established Christian Democrats and Social Democrats to Greens, Liberals and the anti-immigrant AfD.

    The story was similar in Ireland with former Prime Minister Kenny’s Fine Gael losing 10 seats in the February election. Kenny remains Taoiseach (prime minister) but supported by an unstable coalition. There are now nine parties and four independents in the 158 seat House.

    In both Sweden and Denmark mainstream parties are hostage to anti-immigrant parties. In France, Marine Le Pen is seen as no longer the candidate of only a mad fringe.

    With 28% of Australians born overseas, it is hardly surprising anti-immigrant sentiment is more muted. Similarly, the financial crisis has not scarred the economy so deeply. But the unwanted consequences of globalisation and social differentiation both introduce new electoral fault lines.

    The end of the mining boom is one uncomfortable expression of globalisation, asylum seekers and refugees another and the off-shoring of the auto industry a third.

    For its part, social pluralisation is everywhere evident, reflected in school sex education controversies, same sex marriage debates, promotion of women, animal rights campaigns, environmental action and so on.

    In summary, a slow-burn crisis of legitimacy would seem to be enveloping politics in many states, not just Australia. This fundamental issue invites a fresh look at basic political structures: do they remain fit for purpose?

    In Australia’s case, the present system was born in 1909. Protectionist and Free Traders then joined to form a united bloc against Labour’s socialism. This adversarial structure has lingered despite the post-83 convergence of Liberal and Labor economic agendas. Yet our society and economy are transfigured.

    If the logic for a wholly adversarial system has diminished, why is it so hard to question the present political structure? One obvious reason is that an alternative is hard to imagine. The way things are is so hallowed by time and habit that it simply does not occur to people to consider that what we have is dysfunctional or that there could be a better way.

    Another explanation perhaps lies in the dominant voices in political discussion. At an expert level, economists enjoy greatest standing and respect. But neither by training nor preoccupation are political processes or structures a legitimate field of interest. In their world view, these matters simply do not figure.

    Then there are the politicians themselves. At first glance you might imagine they would be most disadvantaged by the frustrations of office – the most troubled by neutered legislative achievement. Shouldn’t they be most open to alternatives?

    But the major parties are the formal beneficiaries of current arrangements. They share the spoils of office, they receive most public benefits, and the theatre of parliament maintains the fiction of their representational dominance.

    The Senate remains the House where the newer forces in Australian politics have standing and voice. We might therefore expect the promotion of change to come from them. Surely it’s in their interest to move parliamentary debate from its present negative and reactive style towards more proactive practice? For example, the late Liberal Senator David Hamer proposed that ministerial appointments from the Senate be ended. This would pave the way for the establishment of proactive committees with real standing and a forward looking brief.

    Take the recent CEDA report on fixing the deficit. Endorsed by three former heads of Treasury and PM and C and one current Reserve Bank Board member, this is exactly the kind of document that a Senate Committee should be able to take up – hold hearings around the country – provide a platform for both conservative and liberal economists – and flush out public commitments from the myriad economic and other interests who stand to be affected.

    The committee would no doubt squabble internally about options and trade-offs. This would be transparent. Perhaps limited bipartisanship might be flushed out. A full Senate debate and a motion for the House might follow. All or some of these actions would sustain momentum. It would demonstrate how the theatre of parliament can be used constructively to reach into wider media and public opinion. But for now this is fantasy!

    Until the misalignment between the structure of politics and our newly pluralised society is recognised as a fundamental challenge, dysfunctional government will surely prevail.

    Ian Marsh is a Visiting Professor at the UTS Management School.

  • Ian Marsh. What wrong with Australia’s political system? Part 1 of 3.

    Most people are familiar with the power of incentives in economic markets. They know that efficient price signals can channel investment into productive assets and these same signals can drain funds from unconstructive pursuits. The same process more or less works at other levels. Both good and bad performance is demonstrated by similar calculations. In turn these calculations draw on a variety of other metrics – prices, volumes, demand, supply, growth estimates and so forth.

    People also know these numbers are reasonably reliable because they come from credible institutions. Thus markets are reasonably ‘free’ and undistorted. The Bureau and Census and Statistics is honest. The Stock Exchange is not manipulated. The judicial system acts according to the rule of law.

    At a tertiary level, a variety of other institutions – the Productivity Commission, APRA, the Reserve Bank – police these secondary systems and reframe them when necessary to ensure that they continue to support wider public interests. This in essence is the familiar economic system.

    Why do so many people then approach the political system with naïve or simplistic assumptions? Why do they not recognise that the political world is also a complex interdependent system where immediate incentives depend on the effective working of more embedded institutions?

    If they did, the reasons for the current impasse in public policy in Australia might be more apparent – perhaps along with the profound nature of the present political challenge.

    But let’s start with a fact. Since 1983, only one major piece of economic reform requiring legislative endorsement has passed in this country without bipartisan support. That was the GST which John Howard successfully navigated into law after winning the 1998 election. But he won that election and lost the popular vote. Hardly an auspicious signal to his successors.

    Every other major measure in Australia since 1983 has required bipartisan support.

    Why, short of a palpable crisis, is bipartisanship so elusive? Look first at immediate incentives. Politicians live in a two party, winner-takes-all world. Conceding common ground can spell disaster for a leader. Look no further than Malcolm Turnbull’s fate as Opposition Leader.

    This adversarial system was conceived to highlight the choice between major parties that differed in their basic policy orientation. In the process, common ground, which was essential to sustain continuity in governance, was deliberately disguised or concealed. The parliamentary theatre was deliberately designed to highlight programmatic differences. The forms and procedures of parliament – question time, the allocation of time, executive prerogatives etc. – work to sustain this divide. The late Bernard Crick captured this perfectly in his depiction of parliamentary routines as ‘tantamount to a continuing election campaign.’

    This political architecture was indeed appropriate and relevant for much of the period from the birth of this system in 1909 until the adoption of a softened neo-liberal programme by the Hawke-Keating government after 1983. Now party differences do not turn on the basic longer term agenda. The market system has more or less won.

    But political leaders still live in a world in which immediate incentives dictate sharp product differentiation. How to respond? Is it surprising that from Tampa on we have seen a turn to populism and worse?

    But you might say – OK, the major parties have converged in their fundamental approach. So why not share this agreement with the public and fight over the detail of measures. Why not make clear we agree that the states need more tax revenue – but we disagree about where this should come from. The blue side says a GST of 15% and the red side says the Medicare levy. Why not play the game that way?

    The old problem of incentives recurs. Earlier we noted the political incentives that, on controversial issues, discourage disclosure of even partial common ground. These are reinforced by executive arrangements. Our present political system makes it impossible to separate debate into longer term and more immediate streams. The political system as it operates in parliament is governed by three basic conventions – ministerial responsibility, collective cabinet responsibility and confidence. Note these are conventions. They are not enshrined in the constitution. They have no wider legal base. They can be changed by votes on the floor of parliament. But they do determine the structure of executive power. They are long established. They distribute many privileges. And these rules of the game are sustained by the power and force of inertia. These conventions make it impossible to separate debate into longer term and more immediate components.

    Then there are the distorting incentives that are associated with the media cycle. This reinforces populism and a short term orientation. Why does this incentive structure now exercise so much power?

    The media cycle exercises its power because it now provides the primary link between political leaders and their publics. Earlier more complex tissue has largely dissolved. Once around 50% of the community had strong or very strong affiliation to one or other of the major parties. Party organisations enrolled activists. Party brands cued public opinion. Party programmes signalled longer term values and ambitions. Each party stood for a clear and distinctive position in the eyes of its supporters.

    Political loyalty then turned primarily on class identification. This was the dominant social fault line. Class remains an important marker. But it no longer predominates. The women’s, gay, environment, consumer, animal rights, Indigenous, ethnic and other movements of the 1970s have busted that simple binary divide. And they have stimulated conservative reactions which have further compounded differentiation. Australian society is now pluralised in a way that would be unrecognisable to Alfred Deakin or Billy Hughes much less to John Curtin and Robert Menzies.

    The major parties try to contain these internal pressures, not surprisingly often not very effectively.

    So if you want to understand why the Australia political system is in trouble look no farther than this catalogue of distorting incentives and hollowed out systems. Has the two party system passed its use-by date? Such a judgment is likely to be hotly contested – not least by those who in one form or another are advantaged by the present structure of power. Or by those whose political imaginations cannot extend beyond the existing architecture.

    Were we to move beyond it, what should count as the central challenge? Surely the primary concern must be to renew the tissue that links the system to the people? In our more fluid and more pluralised society we need capacities for a more informed public conversation. We need to be able to debate single issues and we need capacities to do this initially at the level of strategy. Is this an important issue for our country? What are some options in responding?

    In other words we need an institutional design that can separate the longer term strategic conversation from a more immediate one about responses. Ideally the main parties would campaign fiercely over the latter issue – but some degree of partisan consensus would reinforce public support for the former. By such means, majority coalitions that can underwrite (or prevent) policy action could be constructed.

    How to do this? We do not need wild schemes. This is how the Senate worked from 1901 to 1909. Ministers were drawn largely from the House. The Senate and its committees were custodians of longer term issues.

    But this is a bigger story. We may need new political architecture for a more pluralised twenty-first century. But before there is even a remote possibility of that happening, the distorting incentives and dysfunctional institutions that are causing our present political discontents need to be frankly acknowledged.

    Part 2 tomorrow: Disaffected electorates/ Dysfunctional political systems?

    Ian Marsh is a Visiting Professor at the UTS Management School.

     

  • Mike Steketee. COAG and hospitals: look beyond the funding to fix our health system.

    Before Malcolm Turnbull and the states start haggling over hospital funding, it’s worth looking at why the system costs so much to run. Maybe it’s not just cash, but waste and inefficiencies that need addressing, writes Mike Steketee.

    Why do our hospitals cost so much to run? Like$55 billion a year and rising rapidly?

    It is the question worth asking before Malcolm Turnbull and the premiers start haggling at today’s COAG meeting over how best to pour more money into hospitals. Yes we are an ageing population and the health system is devising ever more clever ways to treat us.

    But that is not all that is going on. If you are 55 or over living in Fairfield in western Sydney, your chances of having knee arthroscopic surgery were 185 per 100,000 people in 2012-13. In Bunbury in Western Australia, the chances were more than seven times greater – 1319 in 100,000.

    Are there that many more dicky knees in Bunbury or at least ones that require hospital surgery? Or is it that many older people in Fairfield have been denied necessary surgery?

    Not likely on either front, according to the Australian Commission on Safety and Quality in Health Care, funded by federal and state governments. As it said in November:

    Despite the evidence that knee arthroscopy is of limited value for people with osteoarthritis and may cause harm, more than 33,000 operations were performed on this age group during 2012-13. Many of these people will have degenerative disease in their knees and will not benefit from this intervention.

    It added that, even if you argue the extremes distort the picture and take out the areas with the highest and lowest rates, hospital admission rates for arthroscopy still varied more than four times between local areas.

    The Commission found an overall variation of more than seven times for cataract surgery, which was performed 160,489 times on those 40 or over in 2012-13. Age differences between areas do not come anywhere near explaining variations of this size.

    For lumbar spine surgery for those 18 and older, the variation was 4.8 times. This included spinal fusion procedures, for which the Commission said there was limited evidence of its effectiveness for painful degenerative back conditions.

    And so on. Carried across a hospital system which saw 9.7 million admissions in 2013-14, this suggests that a great deal of money is spent unnecessarily.

    John Dwyer, emeritus professor of medicine at the University of NSW, has had a stab at estimating the waste generated by doctors across the whole health system and comes up with a figure of at least $10 billion a year. As they say, a billion here and a billion there and soon you’re talking serious money.

    A Productivity Commission research paper last year made a similar point:

    Governments and patients spend a considerable amount of money on health interventions that are irrelevant, duplicative or excessive; provide very low or no benefits; or, in some cases, cause harm.

    Despite all this, the Australian health system delivers some of the best outcomes in the world, other than for Indigenous people. But costs are rising rapidly, in part because of too little control over waste and too much emphasis on hospital treatment.

    Knees seem to be one particular problem. Knee replacement surgery was performed at the rate of 191 per 100,000 population in Australia in 2013-14 – 61 per cent higher than the average in 30 OECD countries.

    Overall, admissions for longer than day surgery in Australian hospitals are lower than some countries such as Germany but higher than those with which we often like to compare ourselves, such as New Zealand, the UK, the US and Canada. The last of these had a rate of admissions half of that in Australia.

    The Productivity Commission paper canvasses some of the weaknesses that apply across the whole health system but often culminate in expensive hospital treatment. It says governments subsidise many health treatments that have not been assessed for clinical and cost effectiveness.

    Often clinicians do not realise they are over-diagnosing patients, providing superfluous or harmful treatments or applying valuable treatments in the wrong way. Clinical guidelines … can be an effective way to promote high value medicine but they are often too complex, out of date, lack credibility or poorly implemented.

    Doctors are often resistant to change, including in acting on the findings of evidence-based medicine, arguing that their training equips them to know best the needs of individual patients. The way they charge – on a fee-for-service basis – is an incentive to provide more services than are necessary.

    The initiative announced by Malcolm Turnbull and Health Minister Sussan Ley on Wednesday to trial a different way of treating chronically ill patients, who often have multiple conditions, is an attempt to address some of these problems. At the moment, they said, such high users of the health system saw up to five different GPs a year, making it more likely they would fall through the cracks and end up in hospital.

    “Half of all potentially avoidable hospital admissions in 2013-14 were attributed to chronic conditions,” they added. Under the two year trial, one GP practice will co-ordinate the care of these patients and receive quarterly payments. This shifts the emphasis to improving the overall health of the patient, rather than charging for individual treatments.

    Turnbull and Ley hailed this as “one of the biggest health system reforms since the introduction of Medicare 30 years ago.” However, we shouldn’t get too carried away: various forms of co-ordinated care, including for chronic illnesses, have been tried for at least the last 20 years, with mixed results. Nevertheless, an increased emphasis on primary care – that is through GPs and including prevention programs – is crucial to keeping people out of hospital.

    These potential savings are before we even start talking about inefficiencies in administering the health system. With both the federal and state governments putting money into public hospitals, there is bureaucratic duplication on a large scale.

    Each level of government blames the other for deficiencies in hospitals. As well as blame shifting, each is constantly manoeuvring to shift costs on to the other. For example, hospitals, which are run by the states, are forced to keep elderly patients in beds costing $1200 a day because there are not enough places costing only $200 a day in nursing homes, which are funded by the federal government.

    Turnbull is right in suggesting this week that if the states raised more of their own revenue – for example, through his proposal to let them levy income tax – it would make them look more carefully at how money was spent. At the moment, it is much easier to beg Canberra for more money than to make voters cough up through taxes.

    It is just that experience suggests that the main effect of Turnbull’s idea would be to put even more pressure on hospitals. In most areas where they already have the power to raise taxes, the states have competed with each other to bid them down, such as through ever more generous exemptions for payroll tax and land tax.

    Of course, if Canberra stood firm on the states solving their own problems, it would force them to tackle some of the waste and inefficiency in their spending – either that or allow hospital and other services to run down and cop the wrath of voters. But then the states would just try to blame it on Canberra.

    Mike Steketee is a freelance journalist. He was formerly a columnist and national affairs editor for The Australian. This article was first published in The Drum 1 April 2016.

     

  • If we strike a deal with Japan, we’re buying more than submarines.

    In this article in the Melbourne Age, Hugh White comments

    ‘So before we decide whether to select the Japanese (submarine) bid, we have to ask if an alliance with Japan is good for Australia.’

    See link to full article below:

    http://www.theage.com.au/comment/if-we-strike-a-deal-with-japan-were-buying-more-than-submarines-20160314-gni3hl.html

  • Evan Williams. Eye in the Sky. Film review.

    I’d just come home from a screening of Eye in the Sky, Gavin Hood’s fine thriller about a terrorist cell in Kenya, when the news came through that Taliban suicide-bombers had killed more than a hundred people in Pakistan. Timely reminders of the reality of modern warfare and its distinctive horrors aren’t hard to find these days. A couple of weeks earlier we had the ISIS attacks in Brussels; before that it was Paris. Stories abound of Al-Shabah atrocities in North Africa, and the nightmare in Iraq and Syria shows no sign of ending. There’s still plenty of scope for filmmakers.

    But it’s not just its brutal topicality that gives Eye in the Sky such devastating impact. It’s a riveting suspense thriller, impeccably crafted with a clear moral dimension. We are forced to confront some troubling questions: Does individual conscience have a legitimate role in modern warfare? Are we justified in taking innocent lives in pursuit of a just and overriding military objective? Are drones an immoral weapon, as some have argued, because their “pilots” are immune from counter-attack? Hood’s film opens with an on-screen quotation of Aeschylus’s famous line: “The first casualty in war is truth.” But can there be any truthful answers to these questions?

    Eye in the Sky is fiction (the screenplay is by Guy Hibbert), but it’s rooted in real events. More than once in the film we are reminded that Al-Shabah bombers killed 67 people in an attack in Nairobi two years ago. Helen Mirren plays Colonel Katherine Powell, a US intelligence officer in charge of a joint British-American rescue mission aimed at capturing a radicalised British woman who has joined a terrorist cell. The woman has been traced (along with a radicalised American) to a safe house in a Nairobi suburb.  Powell’s orders are “to capture, not kill.” But when she discovers that the safe house shelters three suicide-bombers preparing another attack she convinces her superior officer, General Frank Benson (Alan Rickman), to launch a drone missile and blow the house to bits.

    All is ready to go. The drone hovers overhead, and far away – in some air-conditioned US base deep in Nevada or wherever – a finger is poised on the trigger. But at the last minute the drone’s spy camera detects the presence of nine-year-old Alia, a Kenyan girl selling home-baked bread on the street. Sitting at a little table outside the safe house, she would almost certainly be killed if the missile were launched. (According to the jargon, of which we hear much, it’s a case of “95 percent CDE” – an estimated 95 percent chance of collateral damage, ie, the loss of innocent lives.) Should Alia be sacrificed? The steely-eyed Colonel Powell argues that she should: many more children’s lives will be lost if the suicide bombers are spared. A nervous attorney-general sees no legal objection to the raid, but refers a decision up the line to the foreign secretary (Iain Glen), who has qualms of his own and wants the PM’s approval (not to mention that of the US secretary of state, who is playing ping-pong with Chinese officials in Beijing when the call comes through).

    Indecision and buck-passing are among the film’s main themes, and Hood pokes some gentle fun at the dithering politicos. For a moment I wondered if the PM would refer to the final call to Buckingham Palace, in which case we might once again see Helen Mirren playing Her Majesty (as she did so well in Stephen Frears’s film The Queen). But no such luck! Mirren has a big enough part as it is, and I doubt if she’s ever given a harsher and more intensely focused performance. There’s strong support also from Alan Rickman, whom many will remember as the sinister Severus Snape in the Harry Potter films, or (for those who are old enough) as the Reverend Obadiah Slope in the TV series Barchester Towers. (Rickman died last January and the film is dedicated to his memory.)

    The final moments are brilliantly suspenseful, and audiences may feel a little guilty for desperately hoping (as I’m sure they are meant to) that the deadly attack will be launched. Or is it that, addicted as we are to violent spectacle, we want a climactic big bang to round off the movie? It’s a fine film, but I wish I could say that all its moral issues are resolved. Perhaps they never can be. In 2006 I praised Hood’s film Tsotsi, also set in Africa, for its memorable portrayal of life in the impoverished black townships, the appalling contrast between the lives of the rich and the poor. I felt something similar with Eye in the Sky as I watched those political big-shots, in their elegant, softly-lit, wood-panelled chamber, plan their lethal raid while Kenyans are living in squalor.

    And when it comes to war, how do we compare numbers? Politicians had no qualms about the Allied carpet bombing of German civilians during World War II, when countless children were burnt alive. Nor did anyone lose much sleep at the time over Hiroshima and Nagasaki. But in Eye in the Sky our leaders agonise over the fate of a single child. This may well be a sign of moral progress, but somehow I doubt it.

    Four stars

    Eye in the Sky, rated M, is in national release.

    Evan Williams reviewed films in The Australian newspaper for 33 years. He is a Life Member of the Film Critics’ Circle of Australia for services to film criticism and the film industry.In 2015 he received the Geraldine Pascal Lifetime Achievement Award for critical writing.

  • Mike Steketee. Election 2016: Beware the (very) long road to ruin

    The risk with such a long election campaign is that unanticipated events can scuttle a party’s chances. And in the 2016 campaign it’s the Coalition that has everything to lose, writes Mike Steketee.

    Elections can throw up many imponderables and the longer the campaign runs the more likely they are to do so.

    After Bob Hawke won in 1983 against Malcolm Fraser, his personal popularity and that of his party kept rising. The drought broke – although not even Hawke claimed credit for that – and the economy was on the way back up after the worst recession since the Great Depression.

    Hawke called an election for December 1, 1984, only 21 months into his first term. Most prime ministers announce the election date close to the minimum time required by law, which is 33 days.

    But with the polls showing a swing to Labor, Hawke was so confident that he declared the date almost eight weeks before polling day. After all, voters loved him, and his opponent, Andrew Peacock, was a political pygmy whom he would cut down to size further during the campaign.

    Or so it seemed. But it did not turn out that way. Instead of a swing towards the government, there was a swing against it of 1.5 per cent after preferences. Its majority in the lower house was almost halved after taking into account an increase in the size of parliament.

    Hawke was reduced from political messiah to mere mortal. Paul Kelly records in his book The End of Certainty that Peacock started the campaign with a leadership rating of 19 per cent and finished on 54 per cent.

    Labor’s campaign director Bob McMullan said in his election post-mortem, quoted by Kelly, that:

    I believe it would be universally agreed that the election campaign period was too long … the party did not examine the implications of the length of the campaign for its strategy.

    This week Turnbull as good as announced the election almost 15 weeks before polling day, making the campaign nearly twice as long as in 1984. While the formal election period will not start until Parliament is dissolved, on the current assumption that the Senate will fail to pass the Australian Building and Construction Commission bill, Turnbull already has lost one advantage the system gives prime ministers – an element of surprise over the date of the election. With the election so far off but the date known, his opponents can ensure they are fully prepared.

    True, July 2 had been prominent in the speculation because of the mechanics of double dissolution elections. But long campaigns mean there is more time for things to go wrong. When British prime minister Harold Macmillan was famously (or apocryphally) asked the greatest challenge he faced as leader, he replied “events, dear boy, events”.

    Unanticipated events can damage or favour either side but the frontrunner, which is the government, has more to lose. The reason prime ministers generally call an election close to the minimum time required is to maximise the chances of a winning position holding until election day.

    One of the things that went wrong for Labor in 1984 is that the opposition set the agenda and the government spent much of the time on the defensive. Peacock seized on a theme and stuck to it: promising a Coalition government would abolish the assets test on pensions and the tax on lump sum superannuation, both introduced by the Hawke government, and running a scare campaign against a capital gains tax and death and gift duties, which he said Labor would bring in “as certain as night follows day”. (He was proved correct on the first but not on the others).

    Hawke countered with the promise of a tax summit after the election, which left Labor’s options commendably open – today’s political parties please take note – but also gave Peacock more ammunition for his scare campaign.

    Peacock repeated his core lines ad nauseum, to the point where he was ridiculed. But it proved the truth of the saying that once the political cognoscenti were completely sick of hearing the same message, voters were just starting to take notice.

    One consequence of firing the starting gun for an election is to raise the standing of the opposition leader. He or she is, after all, the alternative prime minister and the media provides increased coverage.

    In particular, the traditional leaders’ debate or debates will put Bill Shorten on an equal footing with Turnbull. Given their relative position in the polls, expectations of Shorten’s performance will be low so that, if he comes anywhere close to matching Turnbull, he will have gained.

    Then there are the policies. How will voters possibly be kept engaged over the remaining 14 weeks? Of course the answer is that they won’t. Undecided voters – the ones that election campaigns are all about – are making up their minds later and later – often in the last week or two. That is why in recent times the official election launch, one of the major media events, has been pushed closer and closer to the election date.

    Moreover there are more undecideds than in the past: major parties used to be able to rely on about 40 per cent of voters sticking with them through thick and thin. Now it is closer to 30 per cent, leaving a potential swinging vote of 40 per cent.

    But even when voters are not paying much attention, the election space has to be filled and the onus to do so rests more heavily on the government. Leaving a vacuum by having nothing much new to say for days or weeks is dangerous. It provides an opening for your opponents and it robs you of momentum. A government perceived to have run out of ideas can feed into a broader re-evaluation by voters.

    The polls suggest that there is a strong underlying sentiment that it is too early to bring back Labor and that it needs to do much more before voters are prepared to entrust it with managing the economy again.

    It does not even need the increased media attention of an election campaign for that to occur. Labor gained ground recently, at least for a while, by announcing a definite policy on taxation while the Government was dithering, as it still seems to be, over what to do.

    Turnbull has started by campaigning on the need for the building commission to police thuggery and criminal activity. The Heydon royal commission has provided him with plenty of raw meat with which to flail trade unions and Labor.

    But the Liberals have not gained a great deal of traction from union bashing in the past, perhaps because that is what voters expect the Coalition to do. Certainly Turnbull will need more arrows in his quiver to maintain momentum.

    The Government has the advantage of handing down a budget on May 3 – a major opportunity to seize the initiative and sell its wares. No doubt the Government will have a bag of goodies to deliver but how widespread will be their appeal is another matter.

    The latest in a numbing series of changes of thinking on tax policy is that the budget will not have much room for income tax cuts but will include a reduction in company tax as the best way of stimulating economic activity and higher wages. Humphrey Appleby would call that a “courageous” decision. It would be a tough sell, particularly with the stream of revelations about the creative accounting used by businesses to minimise their tax, not to mention screwing their customers.

    Besides, the budget will be two months before the presumed polling day. In election campaigns, that is an eternity.

    Elections can create their own dynamics and sometimes throw up completely unexpected outcomes – most recently the defeat of the first term Newman government in Queensland, despite its record majority, and before that Jeff Kennett’s loss in Victoria in 1999 and Paul Keating’s victory over John Hewson in 1993.

    Nevertheless it is rare for first-term governments to be defeated and in the end, none of the potential hurdles facing Turnbull may amount to much.

    In 1984, Peacock generally was judged to have won the campaign but he still lost the election. Currently, the polls suggest that there is a strong underlying sentiment that it is too early to bring back Labor and that it needs to do much more before voters are prepared to entrust it with managing the economy again.

    Turnbull’s task will be to keep those sentiments predominant in people’s minds.

    Mike Steketee is a freelance journalist. He was formerly a columnist and national affairs editor for The Australian. This article was first posted in The Drum on 25 March 2016.

  • Garry Woodard. Should Australia do more on the South China Sea?

    No. The Prime Minister’s statement in regards to the Middle East that this is not the time for gestures or machismo applies in spades to what we do in the South China Sea. Australia should act prudently and, though some will see this as a contradiction, transparently and after full parliamentary and public debate.

    Australia’s relative propinquity gives us an interest in the outcome of the territorial disputes between countries in the South China Sea, but will our interest in seeing a peaceful resolution be helped or harmed by introducing an Australian naval presence? As Australia already has a naval presence in the North China Sea, and northwest Cape supports intelligence collection there, are we not bound to see the China Sea as a strategic whole? Is this not the strategic perception of the US Seventh Fleet?

    Sir Arthur Tange wrote from close observation of ‘the US Navy’s global view and the nuisance they found in other people’s sovereignty’. If we put ourselves in China’s shoes would we not have the same strategic perception? Do we understand China’s thinking? What if the most recently reported militarisation of Woody Island is defensive, to improve intelligence gathering against a perceived threat, rather like the extensions built northward from the Great Wall to get better forewarning of the threat from the Mongols? If the strategic perception should be of the China Sea as a whole, the core problem is China’s unfinished reunification.

    Nobody who heard Deng Xiaoping on the subject could doubt the emotional pull of seeing Taiwan rejoin the motherland, even if in accordance with Mao’s timetable of 100 years.

    Australia, unlike greater powers, avoided involvement in the Chinese civil war. As Michael Fogarty described in a recent book review in Australian Outlook, had it not been for the skill of Australian diplomats it might have been an Australian warship instead of HMS Amethyst which was fired on in the Yangtze incident. The Chifley Government in 1949, unlike New Zealand, refused to send a warship to Hong Kong when the Chinese Communists took power on the mainland.

    Under Menzies, numerous attempts by the Americans to get Australia to share its residual responsibilities from involvement in the Chinese civil war for the security of Taiwan were deflected. Menzies went to Washington in an unsuccessful attempt to persuade Eisenhower that Taiwan should give up the offshore islands. In 1964 Menzies involved himself in de-escalating a crisis with Indonesia precipitated by the British sending a nuclear-armed carrier task force through the Sunda Straits: diplomatic good sense to precedence over asserting rights of innocent passage. Menzies had the confidence and stature to give Eisenhower a lecture on the danger of governments taking action which risked war without having public opinion behind them. That is not a long bow to draw in the broad context of addressing the current question. As Churchill said, and Hugh White is arguing, ‘better jaw jaw than war war’.

    Garry Woodard, former diplomat and Senior Fellow, University of Melbourne.

    This article was first published by the Australian Institute of International Affairs.

  • What a godsend politicians and journalists are to ISIS.

    In The Guardian, Simon Jenkins writes about the way that the ISIS recruiting officers will be thrilled at how things have gone since their atrocity in Belgium.  He points particularly to the ‘paranoid politicians and sensational journalists’ who have perhaps unwittingly provided great support for ISIS. Jenkins comments

    ‘The atrocities in Brussels happen almost daily on the streets of Baghdad, Aleppo and Damascus. Western missiles and ISIS bombs kill more innocents in a week than die in Europe in a year. The difference is the media response. A dead Muslim is an unlucky mutt in the wrong place at the wrong time. A dead European is front-page news. … Everyone involved in this week’s reaction, from journalist to politicians to security lobbyists, has an interest in terrorism. There is money, big money, to be made – the more terrifying it is presented, the more money.’

    Simon Jenkins is a journalist and author. He writes for The Guardian as well as broadcasting on BBC. He has edited The Times and The London Evening Standard.  See link to his article below.

    http://gu.com/p/4hzgx/sbl

  • Yang Razali Kassim. Will Mahathir and Anwar’s uneasy alliance unseat Najib?

    The unthinkable is happening in Malaysian politics. Former prime minister Mahathir Mohammad and his jailed former deputy Anwar Ibrahim have joined hands in a seemingly impossible alliance to unseat Prime Minister Najib Razak. Never before in Malaysian history have such sworn enemies buried their hatchets for a common cause.

    By launching his rainbow ‘core group’ of concerned citizens of various political stripes and leanings to ‘Save Malaysia’, Mahathir has once again thrust himself into the eye of the political storm. With Anwar still in jail, the disparate forces that opposed Najib over the 1Malaysia Development Berhad (1MDB) investment fund scandal have finally found someone of stature to rally around in a marriage of convenience. It is ironic that the man who crushed the opposition while in power has reinvented himself in retirement as the de facto leader of what in essence is a citizens’ revolt.

    Mahathir himself described this as a ‘very strange group of people’, brought together by a common goal of ousting the scandal-hit prime minister. By calling it a ‘core group’, Mahathir is indicating that this is only the beginning of more moves to come. What could emerge down the road is still hazy. But it is safe to say that a new era in Malaysian politics is unfolding with the key players jostling for a place in the shifting ground.

    Broadly speaking, politics and the people have become polarised into two groups. The first is pro-Najib, anchored around the ruling party — the United Malays National Organisation (UMNO). Opponents within and outside UMNO are being crippled or threatened one-by-one. The second group is basically the rest — the anti-Najib forces comprising of nearly 50 of the country’s public luminaries.

    As expected, Najib’s lieutenants have dismissed Mahathir’s latest strategy as leading nowhere. Some have even belittled Mahathir’s resignation from the UMNO — his second since he forced his successor Abdullah Ahmad Badawi to resign in 2008 — as something of a joke. Deputy Prime Minister Zahid Hamidi has painted Mahathir’s move as unconstitutional. And UMNO Youth have challenged the Mahathir-led movement to become a formal coalition and challenge the UMNO-led ruling coalition Barisan Nasional (BN) in a general election.

    But any misplaced sense of confidence on the part of UMNO could backfire. Mahathir’s second quitting may indeed not amount to much within UMNO, given that Najib has got the party effectively button-holed. But it would be foolhardy to take lightly what the 90-year-old warhorse is now doing. It may well lead to big changes in Malaysian politics. Although the UMNO-led BN won control of parliament in the last general election, it actually lost the popular vote. The people’s confidence has shifted towards the then Anwar-led opposition.

    Given Najib’s current scandals, which have been a lightning rod against UMNO, an election, if held today, could conceivably lead to the defeat of UMNO and the BN ruling coalition it leads. Mahathir’s son, Mukhriz, the deposed chief minister of Kedah state, said as much, noting that ‘the opposition could easily win the next general election’. The opposition says it has thrown its support behind Mahathir in a shared sense of urgency to save the country before more damage is done.

    Mahathir’s ‘core group’ could be variously described as having features of civil disobedience, a people’s power movement, even a de facto ‘new opposition’. Prior to its launch, there had been talk of similar and overlapping moves, such as Zaid Ibrahim’s initiative for a closed-door gathering of like minds on 27 March. There is also the plan by Wan Azizah, leader of the People’s Justice Party and Anwar’s wife, to convene national consensus talks. There is clearly a need for close coordination to avoid competing initiatives. Significantly, the Pan-Malaysian Islamic Party has not formally joined the anti-Najib alliance, although some of its leaders had supported Mahathir.

    So if Mahathir and his citizens’ movement can maintain their current momentum and the opposition recovers from its disunity, UMNO and BN could be in deep trouble in the next election, which is to be called by 2018. Should that happen, pressure would mount leading to two possible outcomes. The first may trigger a nation-wide awakening that could transform into an anti-Najib groundswell. The second is to push UMNO into the excruciating position of having to decide whose survival is more critical — Najib’s or UMNO’s? In that event, a pre-emptive move for a leadership change may become too tempting in order to avoid impending electoral defeat.

    And, if this trajectory holds, UMNO may be forced to explore two other options: vote Najib out, or craft unconventional strategies — such as allowing Najib to step down voluntarily. Face-saving compromises and ‘out-of-the-box’ solutions should not be ruled out, given the wide-ranging repercussions of potential political instability.

    Yang Razali Kassim is a Senior Fellow with the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore.

    This article was recently published in East Asia Forum.

  • Evan Williams. ‘The Daughter’ film review

    The ads for the new Australian film The Daughter are proudly informing us that the film comes from the same producer who gave us The Piano and Lantana. And that’s some pedigree. Lantana and The Piano were both distinguished Australian films (though the Kiwis shared some credit for The Piano), but what’s this about the “producer”? With all due respect to Jan Chapman, the producer of The Daughter, producers don’t make films. They raise the money for them, hire the main players, acquire all the rights and turn up to collect any best-picture gongs on Oscar night, but they don’t make the movie. Sam Goldwyn was one of the great Hollywood producers, but he didn’t make The Best Years of Our Lives (that was left to William Wyler), and who remembers Goldwyn anyway for Roseanne McCoy or The Adventures of Marco Polo?

    I make this rather obvious point to make the equally obvious point that whatever we may think of The Daughter, credit or blame for the finished film must lie with Simon Stone, the director (who also wrote the screenplay). It’s a visually stunning work , finely acted by a remarkable cast, and set in an unidentified region of rural Australia. So full marks to the cinematographer, Andrew Commis, and actors of the calibre of Sam Neill (who starred in The Piano) and Geoffrey Rush (who starred in Lantana). Stone’s screenplay was “inspired” by Henrik Ibsen’s play The Wild Duck, which Stone adapted for a production at Sydney’s Belvoir St Theatre in 2011. Based on my dim memories of that occasion, the stage production departed freely from Ibsen’s play and the film version departs from it even further – which pretty much absolves Ibsen from any responsibility for the movie.

    There are some resemblances, of course. Put crudely, this is a film about a daughter and a duck, in which both have prominent roles and can be seen as complementary elements in the fabric of the story. The daughter is 16-year-old Hedwig (Odessa Young), whose mother Charlotte (Miranda Otto) teaches at the local school. The duck, which we meet in the opening scene, has been wounded by a bullet fired by Geoffrey Rush’s character, Henry, who owns the local timber mill and is about to marry his much younger bride and former housekeeper (Anna Torv). Everyone is gathering for a fancy wedding. The duck, meanwhile, is rescued and nursed back to health by Walter (Sam Neill), the father of Oliver (Ewen Leslie), who is married to Charlotte.

    I confess that the details of these relationships eluded me at first (narrative lucidity isn’t the film’s most obvious virtue), but we are left in no doubt that Walter is a nice guy. He lives in a splendid mansion that looks more like a colonial palace than a country homestead, and runs a sanctuary for wounded animals – a sort of “unofficial RSPCA”, as he calls it. (I doubt if Ibsen would have thought of that.) Hedwig, incidentally, is the only character whose name remains unchanged from Ibsen’s play, though I suppose it would seem odd if the horny-handed, bush-dwelling Aussies in the story went around with names Knut, Lars or Thor.

    Without trying to summarise all the film’s emotional conflicts, it’s fair to say that nearly everyone is miserable for one reason or another. The plot is replete with disappointments, infidelities, thwarted passions, buried secrets and skeletons in closets. All good, steamy stuff, well matched by the gloom of the surroundings. A mood of desperation is established early on when the timber mill is closed and hundreds of workers find themselves out of a job (timely echoes of recent events in Queensland, though Sam Neill comes across as a more sympathetic boss than Clive Palmer).

    Stone made his cinema debut with a miniature piece called Reunion, one of a compilation of 17 short films – or fragments of short films – that made up The Turning, based on a book of stories by Tim Winton. Written by Andrew Upton, Reunion was about a Christmas Day family gathering that gets absurdly out of hand. Praising it at the time, I called it one of the best pieces in The Turning and the only one of the 17 stories with a touch of light-heartedness. And how I longed for a touch of light-heartedness in The Daughter. Stone’s colour palette is unrelievedly dark, his cameras dwelling on rows of deserted shops, empty streets and grim forests of brooding trees, with more than one scene shot in a derelict factory.

    The acting honours must go to Odessa Young, who gives a performance of lacerating honesty and pain as the daughter. As for the duck, who is given the name Lucky, I think she shows great promise, and there is no more moving moment in The Daughter when she soars into the sky at the end, as if eager to escape the cauldron of misery and confusion engulfing the rest of the cast. A lucky duck indeed.

    Three stars.

    The Daughter, rated M, is in national release.

    Evan Williams reviewed films in The Australian newspaper for 33 years. He is a Life Member of the Film Critics’ Circle of Australia for services to film criticism and the film industry.In 2015 he received the Geraldine Pascal Lifetime Achievement Award for critical writing.

     

     

     

     

  • Jonathan Karnon. No-one should get dud hospital care.

    In 2013-14, Australian governments spent A$105 billion on health; A$44 billion of that was on public hospitals.

    The Commonwealth government is increasingly concerned with the size of the health budget and has acted to reduce the inappropriate use of Medicare benefits. But the Commonwealth government has less influence on public hospitals because the state and territory governments control their expenditure.

    State governments are facing tighter budgets as demand for heath care increases due to an ageing population, greater rates of chronic disease and more service use generally.

    The collection and analysis of data on the performance of our health-care system can be used to improve the quality of health services and maybe also reduce costs.

    At a national level, the clinician-led Choosing Wisely campaign is developing lists of specific tests, treatments and procedures that may be unnecessary and sometimes harmful for individual patients. Recommendations include reducing use of CT scans in the emergency department and not ordering x-rays for patients with uncomplicated acute bronchitis.

    But while improving the decisions made by individual doctors is important, there remain other causes of substantial variation in the safety and quality of care provided in Australian hospitals. This needs to be addressed.

    Varied quality and safety

    Efforts to improve the quality of care in hospitals have traditionally been left to individual hospitals and their managers. But we now have the data to compare different hospitals. We can identify the best and worst performers and, most importantly, determine how to boost the performance of the stragglers.

    Identifying and intervening to improve low-quality care requires financial investment. But there are significant potential long-term savings, due to improved efficiency and better patient outcomes.

    In New South Wales, the Bureau of Health Information has developed and tested methods for comparing the death rates within 30 days of treatment for heart attacks, strokes, pneumonia and hip fracture surgery.

    For stroke patients, ten hospitals had noticeably higher-than-expected death rates for these conditions. An additional 16 deaths were observed in every 100 patients treated at a low-performing hospital compared to a high-performing hospital.

    Clinical auditors and review panels should investigate differences in the care provided at the high- and low-performing hospitals and approaches to improve care quality.

    Other data show the costs of treating similar conditions varies dramatically. A Grattan Institute analysis shows the average cost of performing a hip replacement at different hospitals ranges from under A$10,000 to more than A$30,000.

    Further investigation may find the higher costs are due to the use of more expensive prostheses and to keeping patients in hospital for longer after surgery. Assessments can then be made about whether more expensive prostheses or extended lengths of stay produce better patient outcomes, which justify the additional costs.

    We have analysed hospital data to compare costs, outcomes and the care pathways of patients treated for similar conditions at the main public hospitals in South Australia.

    After adjusting for differences in the types of patients presenting at emergency departments with chest pain, seven in every 100 patients presenting at a particular hospital were readmitted or died within 12 months. This compared to four to five patients at the other hospitals.

    The same hospital spent up to A$669 more on each patient than the other hospitals. Over one year, these additional costs amount to almost A$1 million.

    Analysis of the care pathways showed that the hospital with the highest rates of re-admission, premature death and costs, discharged more patients from the emergency department. This hospital also kept patients who were admitted to an inpatient bed in hospital for longer than the other hospitals.

    This suggests some patients may have been inappropriately discharged home from the emergency department, while other patients could have been discharged earlier.

    Further investigation might look more closely at how and why decisions are made to admit patients from the emergency department and at what might be causing admitted patients to stay longer in hospital.

    Investing in improvement

    State governments are increasingly interested in improving quality. The Queensland government has set up an Integrated Care Innovation Fund to invest in initiatives to improve efficiency and value. NSW set up a similar Translational Research Grants Scheme. In South Australia, the Transforming Health initiative aims to improve the quality and consistency of health care across all metropolitan public hospitals.

    But while individual efforts to improve quality may have some effect, it is more likely that co-ordinated, systematic approaches will have a greater impact.

    Data should be analysed across hospitals on an ongoing basis to identify areas of clinical activity with the greatest potential for improvement, such as the examples above. Findings that quality could be improved should be fed back directly to hospitals.

    Specialist teams should be set up to work with hospitals to further investigate areas of concern and to develop and implement improvement strategies.

    Rather than going back to the drawing board on health reform, governments need to improve what we’ve already got and bring the poor performing hospitals and departments in line with their better performing peers.

    Jonathan Karnon is Professor of Health Economics, University of Adelaide.  This article first appeared in the Conversation on 21 March 2016.

  • Greg Barton. Out of the ashes of Afghanistan and Iraq: the rise and rise of Islamic State.

    Since announcing its arrival as a global force in June 2014 with the declaration of a caliphate on territory captured in Iraq and Syria, the jihadist group Islamic State has shocked the world with its brutality.

    Its seemingly sudden prominence has led to much speculation about the group’s origins: how do we account for forces and events that paved the way for the emergence of Islamic State? In the final article of our series examining this question, Greg Barton shows the role recent Western intervention in the Middle East played in the group’s inexorable rise.

    Despite precious little certainty in the “what ifs” of history, it’s clear the rise of Islamic State (IS) wouldn’t have been possible without the 2003 invasion and occupation of Iraq. Without these Western interventions, al-Qaeda would never have gained the foothold it did, and IS would not have emerged to take charge of northern Iraq.

    Whether or not the Arab Spring, and the consequent civil war in Syria, would still have occurred is much less clear.

    But even if war hadn’t broken out in Syria, it’s unlikely an al-Qaeda spin-off such as IS would have become such a decisive actor without launching an insurgency in Iraq. For an opportunistic infection to take hold so comprehensively, as IS clearly has, requires a severely weakened body politic and a profoundly compromised immune system.

    Such were the conditions in Goodluck Jonathan’s Nigeria from 2010 to 2015 and in conflict-riven Somalia after the fall of the Barre regime in 1991. And it was so in Afghanistan for the four decades after conflict broke out in 1978 and in Pakistan after General Zia-ul-Haq declared martial law in 1977.

    Sadly, but even more clearly, such are the circumstances in Iraq and Syria today. And that’s the reason around 80% of all deaths due to terrorist attacks in recent years have occurred in five of the six countries discussed here, where such conditions still prevail.

    An unique opportunity

    The myth of modern international terrorist movements, and particularly of al-Qaeda and its outgrowths such as IS (which really is a third-generation al-Qaeda movement), is that they’re inherently potent and have a natural power of attraction.

    The reality is that while modern terrorist groups can and do operate all around the globe to the point where no country can consider itself completely safe, they can only build a base when local issues attract on-the-ground support.

    Consider al-Qaeda, which is in the business of global struggle. It wants to unite a transnational ummah to take on far-off enemies. But it has only ever really enjoyed substantial success when it has happened across conducive local circumstances.

    The Soviet occupation of Afghanistan in the 1980s provided an opportunity uniquely suited to the rise of al-Qaeda and associated movements. It provided plausible justification for a defensive jihad – a just war – that garnered broad international support and allowed the group to coalesce in 1989 out of the Arab fighters who had rallied to support the Afghans in their fight against the Soviets.

    Further opportunities emerged in the Northern Caucasus, where local ethno-national grievances were eventually transformed into the basis for a more global struggle.

    The declaration of independence by Chechnya in 1991 led to all-out war with the Soviet military between 1994 and 1996, when tens of thousands were killed. After a short, uneasy peace, a decade-long second civil war started in 1999 following the invasion of neighbouring Dagestan by the International Islamic Brigade.

    The second civil war began with an intense campaign to seize control of the Chechen capital, Grozny. But it became dominated by years of fighting jihadi and other insurgents in the Caucus mountains and dealing with related terrorist attacks in Russia.

    In Nigeria and Somalia, Boko Haram and al-Shabaab now share many of the key attributes of al-Qaeda, with whom they have forged nascent links. But they too emerged primarily because of the failure of governance and the persistence of deep-seated local grievances.

    Even in Afghanistan, al-Qaeda struggled to transform itself into a convincing champion of local interests in the 1990s. After becoming increasingly isolated following the September 11 attacks on the US, it failed to gain support from the Afghan Taliban for its global struggle.

    But something new happened in Iraq beginning in 2003. The Jordanian street thug Musab al-Zarqawi correctly intuited that the impending Western invasion and occupation of Iraq would provide the perfect conditions for the emergence of insurgencies.

    Al-Zarqawi positioned himself in Iraq ahead of the invasion and deftly rode a wave of anger and despair to initiate and grow an insurgency that in time came to dominate the broken nation.

    Initially, al-Zarqawi was only one of many insurgent leaders intent on destabilising Iraq. But, in October 2004, after years of uneasy relations with the al-Qaeda leader during two tours in Afghanistan, he finally yielded to Osama bin Laden’s request that he swear on oath of loyalty (bayat) to him. And so al-Zarqawi’s notorious network of insurgents became known as al-Qaeda in Iraq (AQI).

    From the ashes

    Iraq’s de-Ba’athification process of May 2003 to June 2004, during which senior technocrats and military officers linked to the Ba’ath party (the vehicle of the Saddam Hussein regime) were removed from office, set the stage for many to join counter-occupation insurgent groups – including AQI.

    Without the sacking of a large portion of Iraq’s military and security leaders, its technocrats and productive middle-class professionals, it’s not clear whether this group would have come to dominate so comprehensively. These alienated Sunni professionals gave AQI, as well as IS, much of its core military and strategic competency.

    But even with the windfall opportunity presented to al-Zarqawi by the wilful frustration of Sunni interests by Nouri al-Maliki’s Shia-dominated government from 2006 to 2014, which deprived them of any immediate hope for the future and confidence in protecting their families and communities, AQI was almost totally destroyed after the Sunni awakening began in 2006.

    The Sunni awakening forces, or “Sons of Iraq”, began with tribal leaders in Anbar province forming an alliance with the US military. For almost three years, tens of thousands of Sunni tribesmen were paid directly to fight AQI, but the Maliki government refused to incorporate them into the regular Iraqi Security Force. And, after October 2008 – when management of these forces was handed over by the US military – he refused to support them.

    The death of al-Zarqawi in June 2006 contributed to the profound weakening of the strongest of all post-invasion insurgent groups. AQI’s force strength was reduced to several hundred fighters and it lost the capacity to dominate the insurgency.

    Then, in 2010 and 2011, circumstances combined to blow oxygen onto the smouldering coals.

    In 2010, the greatly underestimated Abu Bakr al-Baghdadi, a local Iraqi cleric with serious religious scholarly credentials, took charge of AQI and began working to a sophisticated long-term plan.

    Elements of the strategy went by the name “breaking the walls”. In the 12 months to July 2013, this entailed the movement literally breaking down the prison walls in compounds around Baghdad that held hundreds of hardcore al-Qaeda fighters.

    Islamic State, as the group now called itself, also benefited from the inflow of former Iraqi intelligence officers and senior military leaders. This had begun with de-Ba’athification in 2003 and continued after the collapse of the Sunni awakening and the increasingly overt sectarianism of the Maliki government.

    Together, they developed tactics based on vehicle-borne improvised explosive devices and the strategic use of suicide bombers. These were deployed not in the passionate but often undirected fashion of al-Qaeda but much more like smart bombs in the hands of a modern army.

    And the US military withdrawal from Iraq in late 2011, well telegraphed ahead of time, provided an excellent opportunity for the struggling insurgency to rebuild. As did the outbreak of civil war in Syria.

    A helping hand

    Al-Baghdadi initially dispatched his trusted Syrian lieutenant, Abu Mohammad al-Julani, to form a separate organisation in Syria: the al-Nusra front.

    Jabhat al-Nusra quickly established itself in northern Syria. But when al-Julani refused to fold his organisation in under his command, al-Baghdadi rebranded AQI (or Islamic State in Iraq) Islamic State in Iraq and al-Sham/the Levant (ISIS/ISIL).

    Then, a series of events turned IS from an insurgency employing terrorist methods to becoming a nascent rogue state. These included the occupation of Raqqa on the Syrian Euphrates in December 2013; the taking of Ramadi a month later; consolidation of IS control throughout Iraq’s western Anbar province; and, finally, a sudden surge down the river Tigris in June 2014 that took Mosul and most of the towns and cities along the river north of Baghdad within less than a week.

    IS’s declaration of the caliphate on June 29, 2014, was a watershed moment that is only now being properly understood.

    In its ground operations, including the governing of aggrieved Sunni communities, IS moved well beyond being simply a terrorist movement. It came to function as a nascent rogue state ruling over around 5 million people in the northern cities of the Euphrates and the Tigris, and defending its territory through conventional military means.

    At the same time, it skilfully exploited the internet and social media in ways the old al-Qaeda could not do – and that its second-generation offshoot, al-Qaeda in Arabian Peninsula (AQAP), had only partially achieved.

    This allowed IS to draw in tens of thousands of foreign fighters. Most came from the Middle East and Northern Africa, but as many as 5000 came from Europe, with thousands more from the Caucusus and from Asia.

    Unlike the case in Afghanistan in the 1980s, these foreign fighters have played a key role in providing sufficient strength to take and hold territory while also building a global network of support.

    But without the perfect-storm conditions of post-invasion insurgency, this most potent expression of al-Qaedaism yet would never have risen to dominate both the region and the world in the way that it does.

    Even in its wildest dreams, al-Qaeda could never have imagined that Western miscalculations post-9/11 could have led to such foolhardy engagements – not just in Afghanistan but also in Iraq.

    Were it not for these miscalculations, 9/11 might well have precipitated the decline of al-Qaeda. Instead, with our help, it spawned a global jihadi movement with a territorial base far more powerful than al-Qaeda ever had.

    Greg Barton is Chair in Global Islamic Politics, Alfred Deakin Institute for Citizenship and Globalisation; Co-Director, Australian Intervention Support Hub, Deakin University. This article first appeared in The Conversation on 3 March, 2016.

  • Peter Gibilisco. Disability support services – effectiveness and efficiency.

    Let me be frank. There are many stringencies that have to be faced in the provision of disability support services. We all know this whether we are recipients of in-home one-on-one support, residents, workers or management of disability support services, or even as officials of the Department of Health and Human Services (DHHS). We all are under the pump in an economic climate where there is widespread political anxiety about budget blow-outs and a possible collapse of our financial and economic system. We all know this. So when I make my professional contribution, as a resident of such a health-care facility, my recommendations and pleas are complex.

    Many of the problems in the disability support services arise because it seems that efficiency demands a certain generalized procedure. In this case “efficient” means something like: (a person) working in a well-organized and competent way.

    And when dealing with disability support, effectiveness  is also a crucial characteristic to be balanced against any “efficiency”. This is the meaning of “effectiveness”: the degree to which something is successful in producing a desired result; success.

    I would ask that readers appreciate that I too am a citizen, a member of this polity, one who has paid my taxes, one who has worked persistently to promote the common good. Yes, what I am about to say is framed in my own interest but it is not only that. I am just as much concerned morally as any other non-disabled professional person about the serious state of our disability support services. Unless that is understood then my point will not be appreciated.

    There have been developments at the level of Federal and State Government funding – negotiated through the Council of Australian Governments (COAG) – that have brought about significant changes to the delivery of human services more generally and disability support services in particular. I do not have access to a research facility to adequately assess and evaluate all of these. I regularly seek advice from those who may know but I do not want readers to presume that I have mastered all the details of all the complex agreements, contracts and policies that are now in place.

    In all this, within the political sphere dominated by neoliberalism comes the mechanism that can negatively impact on social decisions, and that is the way in which policies are freighted with a seeming over-riding criteria introduced by this question: but what is this efficient and effective procedure doing to enhance individual profit?

    Some social decisions, concerned with human-related social services are, and should be, unrelated to efficiency.

    But there are some gross inefficiencies, I believe, that are part of the disability support sector that have very little, if anything to do, with disability support. More likely is it the support of the organisational and managerial structure that claims to be supportive of disabled people that is benefiting. The management of service providers are required by their own charters to turn a positive result in their financial returns . There are some unscrupulous service providers in the not-for-profit disability sector, like my own, who charging me $647.54 per fortnight in rent, including some shared transport – if it be available – and for food. The provision of food money is allocated to certain support workers at approximately $14 per day for residents in this facility, even though in recent times, I have complained to management about their failure to disclose provision money in their accounts.

    Such not-for-profit enterprise will follow the model of service provision that I would call the neoliberal streamline model: to put it simply it interprets organisational and managerial reality in terms that instinctively require financial profit to have precedence over people’s welfare.

    One will ask, bewildered, why should a not-for-profit organization need to show a profit? We are a shared supported accommodation residence and we are said to be in the not-for-profit disability sector. Are we simply to roll over and allow an abstract efficiency with little or no room for effectiveness, to prevail? Are we really wanting a neoliberal perspective that affirms that efficiency means money saved, while effectiveness means costs and hence a challenge to ongoing future viability?

    This state of affairs prods me to drive home an ethical perspective about residents in shared supportive accommodation. In this house we have 9 individuals with high support needs. In other words what is required for  residents in shared supportive accommodation are processes and resources that overcome a lack of human support. There are a lot of funds paid and even more is required for unmet needs of disability support. But I have come to my matured and well educated perspective, having developed it over many years living in the face of a progressive disability for over forty years.

    My conclusion is this: the disability sector has lost its way being caught up in the self-interest of an overloaded pool of management. Instead of alleviating the need for support such a sector is in danger of exacerbating the need for greater assistance!

    But all is not doom and gloom. There is a plausible and workable solution within reach to many of the failures to provide efficient and effective disability support. Through the attainable cost savings people with disabilities can actually be empowered. This is evident from schemes of direct employment techniques that have been widely used to positive effect by both DHHS and the National Disability Insurance Scheme (NDIS).

    Direct Employment has just been formally introduced into Victoria. I was involved in the initial pilot program. This is a key reform with the Disability Services that many Individual Support Package (ISP) users should consider due to its numerous benefits. It is a person-centred approach to disability, being more positive in allowing one to contribute to the community, enhancing community inclusion.

    In July 2013, I was keynote speaker at the Disabilities Support Professionals Conference at the University of Sydney. There I spoke with my computer voice about; Cindy, a 46 year old lady with a severe intellectual disability. She is involved with Direct Employment, her self-planning carried out by family members. As a result Cindy lives a more inclusive life. She is supported by three workers whose rosters, pay, training and other work conditions are managed by the O’Loughlin family, with sister-in-law Christine and brother Darren managing the accounts and finances. Cindy, and her mother Lesley, take responsibility for the recruitment, training and day-to-day management of Cindy’s workers. Thanks to Direct Employment, Cindy is receiving the support she needs, she is happier and is living as an individual in the community the way she chooses to live. Cindy’s family are the professionals involved in her support.

    The encouragement of such forms of disability support derived from their logic with a focus upon social coherence.  It is important to ensure that this kind of arrangement is flexible enough to allow some changes in a day-to-day sense, even if complete change does not take place.  The aim is to re-build trust and flexibility in disability supports, thereby creating both community inter-dependence and independence.

    Direct Employment offers flexibility, allowing people with disabilities to choose the support staff they prefer, helping them lead their own lives and make decisions for themselves. Direct Employment is better suited to cater for individual needs and lifestyles: it is, after all, an important concern for people with disabilities. Hence it allows for a more personalised approach that is better suited to meet individual support needs than the efficiency-driven of not-for-profit organisations constrained to make a profit. As a person-centred approach, I believe Direct Employment is an important reform that will be the key to the future lives of many disabled people and their families!

    Let’s hope so.

    Special thanks to, Christina Irugalbandara, Bruce Wearne and Cunxia Li

    Peter Gibilisco, B Bus (Acc) Ph.D. (Melb), Honorary Fellow University of Melbourne.

    New Book: The Politics of Disability

  • Evan Williams. The Lady in the Van. Film Review

     

    Alec Guinness is remembered for playing seven different roles in the classic English comedy Kind Hearts and Coronets. In Nicholas Hytner’s film, The Lady in the Van, Maggie Smith goes one better. At different times she’s a crazy old woman, a street beggar, a nun, a belligerent suburban mischief-maker, a well-to-do motorist, an incarcerated lunatic, a kindly old biddy and an aspiring concert pianist – all embodied in the person of Mary Shepherd, the film’s formidable central character. It’s an acting tour de force for which Dame Maggie has received awards and much critical acclaim. It seems a pity to strike a critical note.

    The film is adapted from a play by Alan Bennett. Many consider the play a classic, but it’s well to remember Bennett’s own definition of a classic book – “one that everyone is assumed to have read and often think they have.” I won’t assume that everyone has seen Bennett’s play, but audiences love it and I have warm memories of the late Ruth Cracknell playing Miss Shepherd on the Sydney stage. But Maggie Smith has made the part her own: she was in the original London production in 1999 and in a radio version Bennett adapted for the BBC. Her character can be described as a seriously deranged version of the imperious countess and family matriarch she played in Downton Abbey. And everyone, of course, remembers Downton Abbey. To judge from early box-office returns for Hytner’s movie, especially in the US, Downton Abbey fans are flocking in great numbers to The Lady in the Van.

    As an opening title informs us, it’s “a mostly true story.” One day in 1984, a woman calling herself Mary Shepherd drives a battered old van into Gloucester Crescent, a street of grand Georgian houses in a posh part of north London. Filthy, unwashed, and clad in soiled rags, Miss Shepherd makes it clear that she intends to remain in her van and leave it parked in Gloucester Crescent for as long as she wishes – a prospect that hardly appeals to Bennett’s hoity-toity neighbours , who include a certain “Mrs Vaughan-Williams” (Frances de la Tour), who may or may not be the wife of the composer. Bennett (nicely played by a wonderfully look-alike Alex Jennings) feels a little sorry for the old girl and lets her park her van in his driveway. And here she remains for the next 15 years, venturing out for short walks, rides in a wheelchair, encounters with bemused strangers and one enforced visit to a local doctor.

    Like the play, the film is an uneasy mixture of comedy, pathos and sentimental kitsch. There are plenty of clever lines (this is an Alan Bennett script, after all), but the comedy consists largely in the spectacle of Miss Shepherd behaving like a graceless old ratbag. Much is made of her bodily odour. People are constantly recoiling from her presence with a disdainful twitch of the nose or wave of the hand, and there’s a brief moment in a cathedral when Miss Shepherd, apparently a regular worshipper, crosses the floor while a priestly voice intones: “The air freshener is behind the Virgin.” She may be a pious soul, but she isn’t above stealing holy water from the church to put in the radiator of her van. All reasonable requests from other s are parried with one of two impatient lines: “I’m a busy woman” (hardly believable), or “I’m a sick woman” (probably true). No thanks are offered for casual courtesies or even for the Christmas gifts brought to the van by neighbourhood children. Miss Shepherd is very hard to like, and for the film to work I think we need to like her rather more than we can bring ourselves to do.

    With a little research Bennett discovers that Miss Shepherd’s real name is Margaret Fairchild, a pianist and former pupil of the great Alfred Cortot, with whom she has studied in Paris. Committed by her brother to an asylum for the insane (as mental hospitals were once known), she somehow manages to escape, and while driving her van on a country road collides with a motorcyclist, who is badly injured in the crash. Fearing she will blamed for the motorcyclist’s injuries, she flees the scene, only to be blackmailed by a crooked cop (Jim Broadbent), who has discovered her secret and agrees to keep silent for a price.

    All very strange – and no doubt “mostly true.” But there are too many loose ends to the story. What happens to the motorcyclist? What has brought on Margaret’s illness – the trauma of her accident or the encroachment of age and dementia? She acts like a pauper but surely she has a source of income – how else to pay her blackmailer and afford to own, not one van, but two or three (the original being replaced by a gleaming and much bigger new model)? Bennett might have done more to enlighten us. Yes, it’s a comedy of sorts, if you enjoy seeing a devout young woman succumb to illness and the rigours of penury and squalor.

    Unlike Alec Guinness, Alex Jennings plays only two roles. He is both Bennett himself and Bennett’s identical alter ego – and often they’re together in the same frame. One of them, we are told, is the “real-life” Bennett, the other the writer tapping away on his typewriter while he tells the story. It’s an unnecessary gimmick concocted for the movie, but Bennett is such a mild and self-effacing character that his double-sided presence never feels overbearing. It’s just as well we don’t get two Maggie Smiths playing two Miss Shepherds. That would be overdoing things in a film already overdone.

    Two-and-a-half stars

    The Lady in the Van, rated M, is in national release.

     

  • Sam Bateman. Defence White Paper and the China threat.

    Australia’s flawed position on the South China Sea

    Australia’s 2016 Defence White Paper says a lot about the South China Sea, both directly and indirectly. It expresses concern about land reclamation and construction activities by claimants in the sea and about the possible use of artificial structures for military purpose. It also makes much of the importance of a rules-based global order to Australia’s security, with a clear message that some countries are not following these rules.

    While the White Paper does not name China, that’s how most commentators — and China itself — have interpreted these statements. As Benjamin Schreer has claimed, the White Paper ‘reflects the reality in maritime East Asia that China has moved to re-write the rules to fit its strategic preferences and historical narratives’. But what rules are we talking about?

    Despite the White Paper’s references to a rule-based global order, the reality is not quite that simple. For one, other countries besides China also don’t follow the rules. Australia’s major security partner, the United States, is not party to many important international conventions, including the 1982 UN Convention on the Law of the Sea (UNCLOS). Admiral Harry Harris, Commander of US forces in the Pacific, has said for example that, ‘We must continue to operate in the South China Sea to demonstrate that water space and the air above it is international’. But such statements ignore the carefully balanced regime of exclusive economic zones (EEZ) established by UNCLOS.

    The South China Sea is not international water space. It is comprised of the EEZs of littoral countries, which have significant rights and duties in that water space. Other nations operating in that space must do so with due regard to those rights and duties.

    Australia itself can also be accused of not conforming to the rules-based global order.One Australian commentary, which claims that China is trashing the rules-based order by refusing to recognise international arbitration over disputed islands in the South China Sea, conveniently overlooks the fact that Australia is taking a similar position to China in its maritime boundary dispute with Timor-Leste.

    The White Paper seems to make a subtle swipe at China when it observes that Australia opposes the use of artificial structures in the South China Sea for military purposes. But this further begs the question of who is militarising the South China Sea. The short answer is: everyone. China and the United States accuse each other of ‘militarising’ the South China Sea, but in reality both are guilty.

    Who you consider to be militarising the South China Sea largely depends on what you mean by ‘militarisation’. China’s construction of defensive military facilities is not the same as the militarisation implicit in increased military activity by the United States. China acknowledges that its reclaimed features have a military purpose, but describes the measures it has taken as ‘limited and necessary self-defence facilities’ consistent with ‘the right to self-protection’ afforded under international law.

    In contrast, the United States has also raised the military ante with its provocative freedom of navigation (FON) operations, increased naval exercises and its military support for the Southeast Asian claimants in the South China Sea. Such initiatives are seen by China as an attempt to contain it.

    China’s assertive actions in the South China Sea are cast as a growing threat to American interests, particularly by the Pentagon and the US Navy. But, conversely, instability in the South China Sea helps the Navy justify its budget, particularly as it’s the minor partner of the American Army and Air Force in both Syria and the Ukraine. For example, The South China Sea has become a major theatre of operations for the US Navy.

    Demilitarising the South China Sea should be a genuine objective of all stakeholders. To this end, China should clarify its claims in the South China Sea and refrain from activities that will be seen as assertive or aggressive. The US should step back from its current naval initiatives in the region, including its provocative FON operations. A bit of ‘give and take’ is required on both sides.

    Australia would do well to take a balanced approach. But in making a big play of the South China Sea, the White Paper falls in line with what Greg Austin has called ‘The Pentagon’s Big Lie about the South China Sea’. For Austin, the lie is the claim that China’s actions in the South China Sea threaten commercial shipping.

    The White Paper replays this sentiment. To justify Australia’s concerns, it notes that ‘nearly two-thirds of Australia’s exports pass through the South China Sea, including our major coal, iron ore and liquefied natural gas exports’. This figure is incorrect. The accurate figure is a little over 20 per cent and most of this is trade with China. The White Paper actually disproves its own estimate with the map in Figure 2 showing that most of Australia’s sea freight does not pass through the South China Sea. Nor does the map does show the busy trade route between eastern Australia, Japan and South Korea that passes to the east of the Philippines, rather than the South China Sea.

    There is much to like in the White Paper, particularly its focus on increased international defence engagement including with China. But policymakers need to be cautious of the White Papers’ exaggerations about how much China threatens Australian trade and security interests in the South China Sea.

    Sam Bateman is an adviser to the Maritime Security Programme at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University.

    This article was first posted in ANU East Asia Forum.

  • Richard Woolcott. The burning question – should Australia do more on the South China Sea?

    My clear response is ‘No!’

    China, as a major trading nation, now has the same rights as the US to protect its maritime and air approaches to its mainland.  Australia should avoid provocative statements and actions at sea or in the air.

    When we talk about the need to support ‘a rules-based global order’, we overlook the fact that this order was framed mainly by the US after World War II.

    The world has changed greatly over the last 50 years and rising countries such as China, India, Indonesia, Russia and Brazil will want to be involved in reshaping an updated international and regional order.  We should be involved in cooperative discussions with the US, the above five and all countries in the Asian region.

    The Australian Government and the ALP – and the factions in both major parties – need to acknowledge this or Australia will be left behind.

    Richard Woolcott was Australian Ambassador to Indonesia and the Phillipines and the High Commissioner to Malaysia, Ghana and Singapore. He was the Australian Ambassador to the UN and President of the UN Security Council. He was Secretary of the Department of Foreign Affairs and Trade from 1988 to 1992.

     

  • Kishore Mahbubani. The China threat! What happens when China becomes number one?

    In considering the Defence White paper, it is important as Hugh White has pointed out, that we consider carefully the growing power of China and its determination to be accepted as a strong regional and global power. In this article (reposted from 27 April 2015) by Kishore Mahbubani, he describes the likely consequences of China becoming the ‘number one’ regional and possibly world power in the decades ahead. Our Defence White paper discounts the significance of growing Chinese power and the need to accommodate it.  John Menadue

     

    ALBERT H. GORDON LECTURE BY DEAN KISHORE MAHBUBANI[1]
    AT THE GREEN ROOM, KENNEDY SCHOOL OF GOVERNMENT,CAMBRIDGE, MASSACHUSETTS, 8TH APRIL 2015

    In introducing this lecture, the Harvard Kennedy School said that for the first time in more than 200 years, a non-Western power, China, will have the largest economy in the world. China’s emergence will change our world order. To understand how China will behave when it becomes number one, this lecture by Kishore Mahbubani will introduce several questions: What are the priorities of the Chinese leaders? What impact have American policies had on China? Will China behave as America does when China becomes number one?

     It is truly a great honour to be invited to deliver the Albert H. Gordon lecture this year. The hardest part is deciding how to start. Asians always start with an apology. Americans always start with a joke. Sadly, I could not find a good joke, certainly not one as good as the joke that Richard Fisher started with when he delivered this lecture in February 2009.

    This is what he said: “Yesterday morning, as I got on the plane to fly up here, I turned to Nancy and said, “In your wildest dreams did you ever envision me following in the footsteps of Mikhail Gorbachev, George H. W. Bush, David Rockefeller and Ban Ki-moon in giving the Gordon Lecture at the Kennedy School?” And she replied, “I hate to let you down, Richard, but after 35 years of marriage, you rarely appear in my wildest dreams.” My wife Anne and I recently celebrated our 30th wedding anniversary in Greece just before coming here. I am sure she would say the same as Nancy. Anyway, as a good Asian, let me apologise for the fact that I have no joke.

    It is also no joke that we are probably living through the greatest transformation in human history we have seen. This was the underlying theme of my two most recent books, “The New Asian Hemisphere” and “The Great Convergence”. However, to illustrate this point more clearly, let me cite three spectacular recent developments whose profound implications have not been adequately noticed. In the spirit of the Albert H. Gordon Lecture series, let me pick three examples from the financial sector.

    We all know that the world experienced a global financial crisis in 2008-09. We also know that the Fed launched a series of unorthodox monetary policy measures, most notably quantitative easing (QE), to avert a deep recession. What few noticed was what the Fed’s decision meant for Beijing.

    Until the onset of the crisis, Chinese leaders were happy that the US and China had settled into a comfortable pattern of mutual dependence. China relied on the US markets to generate exports and jobs. The US relied on China to buy US Treasury Bills to fund US deficit spending. Tom Friedman, in his usual brilliant way, captured this interdependence with a simple metaphor. He said, “We are Siamese twins, but most unlikely ones – joined at the hip, but not identical.”

    This Chinese belief that the US government depended on China was further reinforced when President Bush sent an envoy to Beijing in late 2008 to request Beijing not to stop buying US Treasury Bills to avoid rattling the markets further. The Chinese leaders readily agreed and probably felt very smug as this confirmed that the US was also dependent on China.

    This smugness was shattered when the US Fed announced the first round of QE measures in November 2008. The Fed’s actions demonstrated that the US did not have to rely on China to buy US treasury bills. The Fed could create its own money to do so. This decision had profound implications for the world. Axel Merk, the president of the investment advisory firm Merk Investments said, “The US is no longer focusing on the quality of its Treasuries. In the past, Washington sought to promote a strong dollar through sound fiscal management. Today, however, policymakers are simply printing greenbacks.” Merk said that by relying on the Federal Reserve’s printing press, the US has effectively told other nations that ‘it’s our dollar – it’s your problem’.

    It was clearly a mistake for the Chinese leaders to believe that they had created a relationship of mutual dependence. When China decided to buy almost a trillion dollars of US Treasury bills, it had to do so from export revenues earned from the toil and sweat of Chinese workers. However, if the US wanted to repay this trillion dollars, all the Fed had to do was to increase the size of its balance sheet. This is why several leading economists have said that the US enjoys an “exorbitant privilege” in being able to repay its debts by increasing money supply. The term was coined by Valery Giscard d’Estaing and the French economist Jacques Rueff explained its workings. Barry Eichengreen famously wrote a book on the topic in 2010.

    Let me quickly mention the two other developments whose implications have not been fully noted. It is well known that in recent years, the US has prosecuted several foreign banks, including HSBC, RBS, UBS, Credit Suisse, and Standard Chartered. For example, Standard Chartered Bank was fined 340 million dollars for making payments to Iran. Most Americans reacted with equanimity to the fine paid by Standard Chartered Bank and thought it was just that the Bank was fined for dealing with the “evil” Iranian regime. However, few Americans noticed that Standard Chartered Bank, domiciled in the UK, had broken no British laws. Nor had they violated any mandatory sanctions imposed by the United Nations Security Council. However, since almost all international payments have to go through the United States payment mechanism, the Standard Chartered Bank was fined for violating American laws.

    To put it simply, what the US was doing in this case was to say that American laws applied to non-American citizens and non-American corporations operating outside America. This is called extra-territorial application of domestic laws.

    The third development was the threat of the US to deny countries access to the SWIFT system. Since all international payments have to go through the SWIFT system, any country denied access to the SWIFT is thrown into a black hole and denied access to any kind of international trading and investment. In a recent column, Fareed Zakaria described well the Russian reaction to the possibility of being denied access to the SWIFT system. In Western media commentaries, Putin is often portrayed as the bad guy and his successor as well as predecessor, Medvedev, is portrayed as the good guy. Yet, it was the “good guy” who went ballistic when he was told of this threat. This is what Medvedev said, “Russian response – economically and otherwise – will know no limits.”

    I begin with these stories for a simple reason. Events such as these will have a deep impact in determining the answer to the biggest question of our time: what happens when China becomes number one in the world? Clearly, the answer to this question will determine significantly the course of the 21st century. Hence, we should study this question carefully.

    Let me begin with what I hope you will agree are three incontrovertible facts. First, China will become the number one economic power in the world. Second, most Americans, like most Westerners, view China’s rise with great foreboding. Third, the role that China will play as the number one economic power has not been cast in stone. How the world, especially America, reacts to China’s rise will help to influence China’s behaviour in the future. If we make the right decisions now, China could well emerge as a benign great power (even though most Americans find this virtually inconceivable).

    This is why it is timely to address the topic of what happens when China becomes number one. It is always better to prepare for the inevitable than to pretend that it will not happen. So far, on balance, America has reacted wisely to China’s rise. However, it is always easier to be wise when a power assumes that it will be number one forever. When the reality sinks in that the number one power is about to become the number two power, it is conceivable that fear may replace wisdom as the dominant driving force in American policy towards China. It would be perfectly normal for this to happen. My goal in this lecture is to try to persuade my American friends to continue to react wisely to China’s rise.

    To achieve this goal, I will make a three-part argument. First, I will try to explain what I think are the goals and ambitions of China’s leaders as China emerges as number one. Secondly, I will explain how several wise American policies have so far managed to allow the relatively peaceful emergence of a new great power. Thirdly, I would like to conclude by recommending that America can protect its long-term interests by reacting even more wisely to China’s rise.

    Let me begin with the first question: what are the goals and ambitions of China’s leaders as China emerges as number one? Since China is still run by the Chinese Communist Party (CCP), it is conceivable that the goal of China’s leaders could be the same as the leaders of the Soviet Communist Party (like Lenin, Stalin and Khrushchev): to prove the superiority of the Soviet Communist System. As Khrushchev famously said on November 18, 1956, “Whether you like it or not, history is on our side. We will bury you”.

    One of the biggest sources of misunderstanding between America and China arises from China’s decision to retain the term “Communist” in the name of its party. This may clearly signify a commitment to Communist ideology. Yet, even a brief survey of China’s deeds rather than China’s words will show that China has effectively walked away from Communist ideology. Deng Xiaoping encapsulated this shift with his famous remark, “It doesn’t matter whether a cat is black and white. If it catches mice, it is a good cat.” Effectively, Deng was saying: “It doesn’t matter if the ideology is communism or capitalism. If it helps us, we will use it.” Effectively, China behaves more as a capitalist country rather than as a Communist country, but for complicated internal political reasons, it cannot abandon the term “Communist”.

    So if the Chinese leaders are not defending or promoting Communist ideology, what cause are they trying to achieve? The answer is simple and direct: they would like to revive Chinese civilization. If there is one thing that motivates China’s leaders, it is their memory of the many humiliations that China has suffered over the past 150 years. If there is a credo that drives them, it is a simple one: “No more humiliation”. This is why they want to make China a great and powerful nation again. Xi Jinping explained this goal well in his address to UNESCO on March 27, 2014. He said, “The Chinese people are striving to fulfil the Chinese dream of the great renewal of the Chinese nation. The Chinese dream is about prosperity of the country, rejuvenation of the nation, and happiness of the people. It reflects both the ideal of the Chinese people today and our time-honoured tradition to seek constant progress. The Chinese dream will be realized through balanced development and mutual reinforcement of material and cultural progress. Without the continuation and development of civilization or the promotion and prosperity of culture, the Chinese dream will not come true.”

    The revival of the great Chinese civilization is something we should welcome. If the CCP could change its name to ‘Chinese Civilisation Party’, it would do a lot to assuage Western concerns. It has already transformed itself into a meritocratic talent-seeking mechanism that is constantly searching for the best leaders to rule China. Despite the many ups and downs in the history of the CCP, this is what the CCP has become. If the Chinese have finally succeeded in finding the right mechanism to revive Chinese civilization, we should, in theory, welcome this development.

    In practice, it is a fact that the West will not rest easy till China transforms itself into a liberal democracy. The Economist, a leading Western magazine, reflects these views. The Economist said in its issue of September 20-26, 2014 that Xi “has become the most powerful Chinese ruler certainly since Deng, and possibly since Mao.” It then calls on Xi to use this enormous power for the greater good and change the system.

    The Economist assumes, as most Westerners do, that if China’s system is changed and a Western-style democracy emerges in China, this will be an unmitigated good. This is a dangerous assumption to make. A more democratic China is likely to be a more nationalist China. A more nationalist China could well be a more assertive and aggressive China. Such a China would launch a “popular” war against Japan and act in a far more belligerent fashion over territorial disputes, like those in the South China Sea.

    In this sense, the CCP is delivering a major global public good by restraining nationalist forces and voices in China. From time to time, it has to allow some of these forces to be expressed; it has to allow its people to vent nationalist sentiments. However, the CCP also knows when to draw back from volatile situations, as it did with Japan, India, the Philippines and Vietnam in recent years. The West should be careful about wishing for early democracy in China. Its dream could become a nightmare.

    At the same time, the West must recognise and respect that China is different; that it is not going to become “Western”. Therefore, the wisest course for the West to adopt would be to allow the present system to continue and to allow it to evolve and change at its own pace.

    This brings me to the second part of my argument. As I said earlier, wise American policies have allowed China to emerge peacefully. Some of this wisdom arose out of historical necessity. At the height of the Cold War, when America genuinely feared Soviet expansionism, it reached out to China to balance the Soviet Union. Indeed, America reached out to China when China had emerged out of one of its most brutal phases. Human rights was not a factor in American policy towards China then. This paved the way for Deng to use America as an example to persuade Chinese people to switch away from central planning to free market economies.

    In the 1990s, official US-China relations went through a series of ups and downs. Despite the efforts of President George H.W. Bush to keep the relationship on an even keel, the Tiananmen Square episode on June 4, 1989 assaulted American sensibilities and constrained his ability to improve relations. Tiananmen could have derailed US-China relations. When President Clinton took office in January 1993, after having described the leaders of China as the “butchers of Beijing”, one could easily have predicted a far bumpier road. Fortunately, Bill Clinton reacted wisely. I was present at the first Asia-Pacific Economic Cooperation (APEC) leaders meeting at Blake Island in November 1993 and saw with my own eyes how Bill Clinton and Jiang Zemin made an enormous effort to reach out to each other. By the end of the day, their mutual wariness was replaced by a significant degree of personal bonhomie. This episode demonstrated that the United States had been wise in welcoming China into the APEC in 1991. Such a move not only garnered the US diplomatic goodwill but also ensured that China adopted the membership of yet another international forum whose rules and regulations it agreed to abide by. Later, the US also worked with China in the East Asia Summit. In addition, the US and China collaborate daily in the UN Security Council to manage the “hot issues” of the day.

    The tragedy of 9/11 further solidified US-China cooperation. Apprehensions about the rise of China were replaced by a focus on the War on Terror. East Asia stopped being a priority for the United States for several years. This allowed China to rise peacefully and for the two countries to avoid the “Thucydides trap”.

    America made several wise decisions during this time. Firstly, America proceeded to admit China into the World Trade Organisation (WTO) in 2001. Although the admission was made on the basis of stiff conditions, these conditions ironically benefited China and forced it to open up to world trade – leading to its current pre-eminent position as the largest economy in the world in PPP terms.

    Another judicious call was to pay attention to China’s sensitivities on Taiwan. China had always regarded Washington’s policy towards Taiwan with suspicion, as they feared that the US could use the Taiwan issue as a means to destabilise China. Instead, America reacted wisely when in late 2003, the Taiwanese President Chen Shui-bian suggested that a referendum be held to assess the views of the Taiwanese people on independence. In response, President George W. Bush made it clear that the United States did not approve of his move. He said: “The comments and actions made by the leader of Taiwan indicate that he may be willing to make decisions unilaterally to change the status quo, which we oppose.” This was wise statesmanship, even if it was partly the result of Washington’s dependence on Beijing’s support for other more pressing issues, such as Iraq and North Korea.

    Some of these wise policies emerged out of America’s selfish interests, especially during the Cold War. However, it is possible that few Americans are actually aware how wise America has been. And even fewer Americans understand that it is in America’s national interest to continue these wise policies towards China. For example, since Deng Xiaoping opened up China in 1978 American universities have educated hundreds of thousands of Chinese students. In the years 2005 to 2012 alone, 788,882 Chinese students studied in American universities. This number has risen steadily – in the 2013-2014 academic year, 275,000 Chinese students were enrolled at American universities . This is an enormous gift from America to China. Future historians will be puzzled by this massive act of generosity as many of these students then return to China to build up the Chinese economy and to create innovations in many different spheres of science and technology that propel China forward in areas ranging from space exploration to defence.

    China has also contributed to the maintenance of friendly relations between the two countries. Firstly, China has “swallowed bitter humiliation” time and again and has reacted prudently to America’s mistakes. These mistakes included the bombing of the Chinese embassy in Belgrade in 1999 and the downing of a US spy plane in Hainan Island in China in April 2001. The tact and restraint demonstrated by China in both situations averted military action between the two countries.

    I have described these events in some detail as they help to explain a contemporary geopolitical miracle. Normally, when the world’s largest emerging power is about to pass the world’s greatest power, we should be seeing a rising level of tensions between the two (with the historical exception of one Anglo-Saxon power, the US, replacing another Anglo-Saxon power, the UK). It would therefore be perfectly normal to see rising tensions between the US and China today. Instead, we see the exact opposite: perfectly normal and calm relations between the US and China. This is a miracle.

    However, miracles are by definition historical aberrations. They don’t last. Soon, we will revert to the historical norm and competition and tension could rise between America and China. To prevent this from happening, both sides will have to make a special effort to continue on their extraordinarily wise courses.

    On the part of China, this means that it will have to learn lessons from the mistakes it has made in recent years in its dealings with its neighbours, especially Japan and Southeast Asia. For example, it completely mishandled an episode in which a Chinese fishing boat collided with Japanese Coast Guard patrols near the disputed Senkaku Islands on September 7, 2010. China unwisely demanded an apology from Japan after having publicly humiliated Japan into releasing the fishing boat. Similarly, China also mishandled the Korean crisis of 2010 by not condemning North Korea’s shelling of the South Korean island of Yeongpyeong. China also made aggressive statements and adopted more aggressive positions on the South China Sea in 2010 and 2011. When China submitted to the UN Commission on the Limits of the Continental Shelf a map including the nine-dotted-line territorial claim in the South China Sea on May 7, 2009, the Philippines lodged a diplomatic protest against China. Vietnam and Malaysia followed. Indonesia also registered a protest, although it had no claims on the South China Sea. In the face of this opposition, Chinese officials refused to back down.

    China has also made mistakes vis-à-vis its relations with ASEAN as a whole. The lowest point in China-ASEAN relations occurred in July 2012 at the ASEAN Foreign Ministers’ Meeting. Until then, for every year since August 1967, ASEAN had always succeeded in issuing an agreed joint communiqué after each Foreign Ministers’ meeting. However, in July 2012, for the first time in forty five years, ASEAN failed to do so. They failed because they could not agree on the paragraph referring to South China Sea. Nine of the ten countries agreed that ASEAN should reiterate the previously-agreed paragraph on this issue. However, the host country, Cambodia, refused to do so. It later emerged that Cambodia had come under heavy pressure from Chinese officials not to agree to these previously-agreed paragraphs on South China Sea. Clearly, China’s rise had made some Chinese officials arrogant.

    While China should learn from the mistakes it has made, America should study its own recent deeds through a simple lens: would it like China to replicate these deeds when China becomes number one? The reason for using this lens is that when China clearly becomes number one, it is likely to replicate abroad America’s deeds, not its words.

    Bill Clinton saw this coming long before any other American did. In a significant speech at Yale in 2003, he said the following:

    “If you believe that maintaining power and control and absolute freedom of movement and sovereignty is important to your country’s future, there’s nothing inconsistent in that [the US continuing to behaving unilaterally]. [The US is] the biggest, most powerful country in the world now. We’ve got the juice and we’re going to use it. . . . But if you believe that we should be trying to create a world with rules and partnerships and habits of behaviour that we would like to live in when we’re no longer the military political economic superpower in the world, then you wouldn’t do that. It just depends on what you believe.”

    Actually, as I document in The Great Convergence, Bill Clinton wanted to prepare his fellow Americans for the day when America becomes number two and China becomes number one while he was President. However, all his advisers firmly told him it would be politically suicidal for any sitting American President to talk of America becoming number two. Hence, he could only speak about it after he left office. Sadly, he has not said more on this issue after raising it in Yale. Hence, I fear that Americans are not psychologically prepared for the day when America will become number two.

    All this brings me back to the three stories that I began the lecture with. America was able to and could threaten to act unilaterally in all three cases because it is clear that America is still the reigning Emperor of the global financial system. Indeed, like many strong ruling monarchs, it enjoys absolute sovereignty in these areas and is not subject to any checks and balances.

    It unilaterally controls the global reserve currency, the US dollar. In theory, the US dollar is a global public good, but in practice, it is an instrument of American domestic and foreign policies. As former Treasury Secretary John Connally said in 1971, “It’s our currency but your problem”. Clearly, global interests are not taken into consideration when the US manages the US dollar. This is why many countries, besides China, were troubled by the QE measures.

    Similarly, America acted unilaterally when it applied its domestic laws in an extraterritorial fashion to foreign banks. Its threat to use SWIFT, another global public good, to unilaterally punish Russia could have had even more devastating consequences for the global order.

    And what would the devastating consequences be?

    To understand this, I hope you will look at my latest book The Great Convergence. One reason why the world has been remarkably stable and peaceful over the past few decades is that the rest of the world, especially Asians, who have been passive for almost two centuries, had agreed to accept and work with the Western-created family of global institutions, including the UN, IMF, and the World Bank. They agreed to do so because they believed that these institutions were serving global interests, not Western interests.

    This is therefore the big danger of the US using global public goods, like the US dollar, international banking transactions, and the SWIFT system, for unilateral purposes and ends. It will encourage the world, especially China, to work towards creating an alternative global order. If that happens, the world will become a far messier place.

    This is why I was happy to deliver this lecture at this time. We stand at one of the most important forks in human history. I hope America will continue its wise policies of strengthening a global order that serves global interests, not just American interests. If America does this, China will do the same. If this happens, nothing will change fundamentally when China becomes number one. We will continue to live in a safe and predictable world.

    Therefore the final question I need to answer is, “Will China emerge as a responsible stakeholder?” – to use the famous words of Bob Zoellick. My simple answer is this “China could emerge as a stakeholder that is as responsible as the United States”. Since America is still the number one power in the world, the big question that America should ask itself is a simple one: would it feel comfortable living in a world where China behaves just as America did when it was the sole superpower?

    Dean Kishore Mahbubani is Professor in the Practice of Public Policy, Lee Kuan Yew School of Public Policy, National University of Singapore.

    [1] Kishore Mahbubani, Dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, is the author of “The Great Convergence: Asia, the West and the Logic of One World.”

  • Carol Richards, Bree Devin. Supermarkets and food waste.

    In this blog on 25 February, I noted that the French parliament has voted to ban large food stores from throwing food away.  In the story below, Carol Richards and Bree Devin highlight the way powerful supermarkets in Australia push the cost of food waste onto suppliers and charities.  John Menadue

    At a time when one billion people globally experience hunger, as much as 50% of all food produced – up to two billion metric tonnes – is thrown away every year. In Australia alone, as much as 44 million tonnes of food is wasted annually.

    Last year, French supermarket chain Intermarché launched a highly successful campaignencouraging consumers to purchase “ugly” food. This year, France became the first country in the world to implement laws cracking down on food waste, with new legislation banning supermarkets from throwing away or destroying unsold food. Under this new legislation, supermarkets are required to donate any unsold food to charities or for animal feed.

    While there is no law in Australia requiring supermarkets to donate any unsold food, both Coles and Woolworths have aligned with food rescue organisations to donate unsold or “surplus” food.

    This surplus food is distributed amongst those experiencing poverty and food insecurity and is done voluntarily by the supermarkets under the banner of corporate social responsibility.

    But our research into the issue of corporate social responsibility and wastage of fresh fruit and vegetables has identified a number of tensions and contradictions, despite leading Australian supermarkets’ zero food waste targets.

    First, the strict “quality” standards required by the Coles and Woolworths duopoly means that a large volume of food does not reach the supermarket shelves. This is produce that does not meet size, shape and appearance specifications – such as bananas that are too small, or apples that are too red. If producers do not agree to meet these standards, they will lose access to approximately 70-80% of the fresh food market in Australia.

    Second, the two major food retailers do not take ownership of produce until it passes inspection at the distribution centres. It is here where suppliers, such as farmers and growers, are “invited” – under the supermarket’s corporate social responsibility initiatives – to donate rejected food to rescue organisations at their own cost, or otherwise pay for further transportation or dump fees.

    Thirdly, in an effort to reduce the high levels of food wasted at the farm gate, Australian supermarkets have followed France’s lead by marketing “ugly” food, (or what Intermarché termed “Inglorious Food”) – food that does not meet strict cosmetic standards, but is still perfectly edible.

    While a step in the right direction, this “apartheid” between beautiful and ugly food was criticised in this study for reinforcing values that perfection comes at premium and ugly food, which is often the way nature intended, should be price discounted. Growers are also concerned about the lower prices that “ugly food” attracts, and the flow-on effects to them in reduced profits.

    A final tension regarding food waste is “who is to blame”? Supermarkets attribute their high quality standards to consumer demands – however, consumers can only buy what is available at the supermarket. Supermarkets have also been criticised for marketing tactics that encourage household food waste, such as “buy one, get one free” campaigns.

    Despite the lack of transparency regarding food waste in the supply chain, supermarkets – with their powerful market position at the end of the supply chain – are in a good position to transfer the problem of waste elsewhere.

    They do this by setting cosmetic standards in the procurement of food which results in high level of wastage, not taking ownership of produce that does not meet their own interpretation of the standard, claiming corporate social responsibility kudos for donating to food rescue organisations (while at the same time saving on dumping fees) and differentiating between “beautiful” and “ugly” foods – reinforcing difficult-to-attain standards of perfection.

    Much of the food wastage and transfer of blame for food wastage can be attributed to the market power of the duopoly. Most significant, are the proprietor-driven private standardswhich require produce to be perfect.

    Although donating to food rescue organisations may be positive for people in need, it does not address the structural problems of the supply chain. This raises the question of state-led regulation, as with the case in France, to restrict food wastage at the retailer level. However, more is needed. Food waste is one symptom of excessive market power, something that needs to be addressed to steer mass food retail in a more sustainable direction in Australia.

    Carol Richards is Vice Chancellor’s Senior Research Fellow, Queensland University of Technology.  Bree Devin is Lecturer in Public Relations, Queensland university of Technology. This article first appeared in The conversation on February 29, 2016.

  • Rosemary Breen. Living Water Myanmar

    Five years ago, when I started this project of building large water tanks to collect water during the rainy season in the Dry Zone of Central Myanmar I had no idea how many lives would be changed because of this simple concept. To date 114 water tanks have been built for villages and schools due to the generosity of so many donors in Australia, the USA and the UK.

    As the Australian coordinator, I have given talks and shown a Powerpoint presentation to many groups in order to raise funds, while Saya Toe, the coordinator in Myanmar, organises the team of builders who go from village to village building the tanks with help from the local people. Each time I visit there are requests for tanks from the village headmen or head teachers of schools and seeing the poverty and great need, it is hard to refuse. There are over 650 villages in the Dry Zone and the government has done nothing over the last sixty years to alleviate the situation.

    In January, 2015 I visited a school and the head teacher showed me a small concrete container filled with brown water from the local dam (there were even leaves floating in it) It was the drinking water for the schoolchildren. She said simply: “Please help us – we are so thirsty!” When I returned in October, 2015, I was shown the same concrete container filled with sparkling, clear water which had been piped from the large tank built several months previously. It was a moving moment watching the children come and drink there.

    So once again I am making an appeal for these children and their families in one of the most impoverished parts of our world (a country which has been shut away from the rest of the world by its repressive military regime for many years) Any donation, however small, would be gratefully received and a tax-deductible receipt given.

    Living Water Myanmar partners with Global Development Group for Project J812N Living Water Myanmar. Donations can be made online (simply google Global Development Group) but it is really important to put the project name and number.

    Cheques can also be sent to GDG,

    56, Goorari St, Eight Mile Plain, Qld 4113 (with the project number and name on back of cheque.

    It is a great help if donors could also email me (rosemary.breen6@bigpond.com)

    Saya Toe has recently set up a Facebook page (Living Water Myanmar) for anyone interested to see some of the recent work. Each village or school which receives a tank is committed to planting ten trees to help the environment.

    Each time we have a drink of water, take a shower, flush the toilet, water the garden, turn on the washing machine or dishwasher, may we remember our brothers and sisters for whom clean water is a luxury and may it remind us to share generously with them.

    In gratitude,

    Rosemary Breen

  • Merriden Varrall. The Chinese elephant in Australia–Japan relations

    Earlier this month, Foreign Minister Julie Bishop visited Tokyo, where she outlined an increasing emphasis on security cooperation between Japan and Australia. The next day she was in Beijing, where she reportedly received a frosty reception. The two are not unrelated — Beijing is not thrilled about Australia’s growing security ties with Japan.

    Because Australia is concerned about China’s increasing assertiveness in the region, but at the same time benefits from China economically, we find ourselves in somewhat of a foreign policy pickle. In this very complex situation, it is critical that Australian policymakers respond with both immediate and long-term outcomes in mind. To understand the long-term implications for Australia’s interests of policies drawing Japan and Australia closer together, we need to understand how Chinese policymakers view the world and China’s role within it.

    Opinions of Sino–Australian relations in Australia are ambivalent and often sceptical. The 2015 Lowy Institute Poll clearly shows Australia’s ambivalence towards China. While most Australian trust the United States, they are far less certain about China. Australians have conflicting views about what China’s intentions are and what they mean for Australia. Of the respondents, 61 per cent felt that China wants to dominate Asia, and just over half thought that China’s growth into an important global power does not make the world more stable.

    At the same time, 67 per cent felt that the Chinese government aims ‘to create a better life for Chinese people’, and, compared to 2014, fewer Australians in 2015 felt that China is likely to pose a direct military threat to Australia in the next 20 years.

    Despite, or perhaps because of, these uncertainties, Australians appear eager to hedge their bets and play it safe with China. 73 per cent agreed that ‘Australia should develop closer relations with China as it grows in influence’. Fifty-two per cent believed that Australia should not join with other countries to limit China’s influence.

    The Poll suggests that Australians are not sure what the consequences of China’s growing global influence will be. All the same, there is a strong sense that Australia would be wise to be on good terms with China as it becomes more powerful. This was a view that underpinned Australia’s decision to become a founding member of the Asian Infrastructure Investment Bank, despite US disapproval.

    In comparison to China, Australians view relations with Japan more positively. In a thermometer measuring warmth of feelings towards other countries, Japan rated 68 degrees, to China’s lukewarm 58 degrees. While an overwhelming majority of 84 per cent said that Australia should remain neutral in the case of a ‘military conflict between China and Japan’, 11 per cent said Australia should support Japan, and only 3 per cent said it would be better to support China. This relative warmth towards Japan is reflected in Australia’s deepening security ties with Japan, as shown in its signing in February 2016 of an agreement on new joint maritime security and surveillance operations in the Pacific.

    China does not react positively to these growing Australia-Japan security linkages. Future security agreements between Australia and Japan need to take the worldviews of China’s policymakers into consideration. Failing to acknowledge how Chinese policymakers themselves see the world, and how China fits into it, can lead to policies that are ineffective, if not counter-productive, in the longer term.

    Several worldviews within which Chinese policymakers operate are particularly relevant to Chinese understandings of its place in the world, namely: the century of humiliation, a conception of national cultural characteristics as inherent and unchanging, the idea of history as destiny, and notions of filial piety and familial obligation that apply both inside China and to its neighbours. These four ideas add up to a foreign policy paradigm that assumes China will resume the central role it once played in regional and global affairs.

    Many Chinese policymakers feel that the United States and its allies are holding China back from its rightful leadership, and from the global benefits such leadership would bring. As such, rather than providing a disincentive from further ‘bad behaviour’, this kind of security cooperation creates the serious risk of further entrenching China’s sense of exceptionalism and exclusion from — and irrelevance of — the prevailing international order. China’s disapproval is in itself counterproductive, and serves to reiterate the uncertainty and tension that led to Australia and Japan seeking closer security cooperation.

    This negative cycle of mistrust is already having consequences for the security of the region. The call to understand Chinese perspectives when determining foreign and security policy is not an argument for simply accepting China’s view of the world as correct, or appeasing China. Rather, it is about clearly surveying the reality of the regional security situation, and taking long-term goals into consideration when making policy choices now. We should be aware that what may seem to be effective deterrence policy today may be creating more complicated security dilemmas in the future.

    Dr Merriden Varrall is the Director of the East Asia Program at the Lowy Institute. This article was first published in ANU East Asia Forum on 4 March 2016.

     

  • David Isaacs. As bad as Guantanamo

    If I liken the immigration detention centres on Nauru and Manus Island to the US facility on Guantanamo Bay, even passionate advocates for those seeking asylum such as human rights lawyer Julian Burnside dismiss my concerns: “Oh we’re not as bad as that.” I will argue that we are indeed as bad as that, possibly worse.

    Many people fleeing persecution to seek asylum have been subjected to psychological trauma in the countries they are fleeing and in the often highly traumatic journeys they take to reach ‘freedom’. However, people seeking asylum who are subjected to prolonged immigration detention are significantly more likely to suffer severe mental health problems than people seeking asylum who are not detained. Furthermore, the incidence of mental health problems increases with duration of incarceration. The United Nations defines torture as “…any act by which severe pain or suffering, whether physical or mental, is intentionally inflicted on a person for such purposes as obtaining from him or a third person information or a confession, punishing him for an act he or a third person has committed or is suspected of having committed, or intimidating or coercing him or a third person, or for any reason based on discrimination of any kind, when such pain or suffering is inflicted by or at the instigation of or with the consent or acquiescence of a public official or other person acting in an official capacity. It does not include pain or suffering arising only from, inherent in or incidental to lawful sanctions”. Since prolonged detention without trial is unlawful under international law, Australia’s immigration detention policy clearly fulfils the key elements of the UN definition.

    Arguably what makes Guantanamo so bad is four things: lack of due process for imprisoning people there, lack of accountability (limited information, no transparency), indefinite imprisonment without due process (seemingly arbitrary legal processing, lack of clear end-point to imprisonment); and severe physical and mental maltreatment. Nauru and Manus share the first three characteristics with Guantanamo. Nauru and Manus, like Guantanamo, are ‘black sites’, out of sight and mind of the public, shrouded in secrecy, with severe restrictions on reporters. The Australian Border Force Act means employees including doctors, lawyers, teachers and guards who report the truth face two years imprisonment. Yet, for an Australian offshore detention policy to be successful in deterring people-smuggling, the stated intention, none of these four things are necessary. Therefore, even if you accept the Government justification for the Australian asylum seeker policy, the current treatment is unethical.

    Guantanamo is arguably worse in one respect: we know men are systematically tortured physically using techniques like water-boarding. However, Nauru is worse than Guantanamo in one hugely important respect: it includes children. When we surveyed Australian paediatricians, over 80% said immigration detention of children is child abuse. Successive Australian Governments have outdone the US Government in cruelty by torturing and abusing innocent children, all with the immoral aim of deterring other innocents.

    Furthermore, those imprisoned on Manus and Nauru are not terrorists; indeed, they are not guilty of any criminal offence, since seeking asylum is not a crime. Although the occasional innocent man was interned on Guantanamo, most knew what to expect when they went to war. In their autobiographies, Primo Levi and Nelson Mandela both astonishingly attempted without rancour to understand the motives of their captors; when they took up arms to fight injustice, they both knew the consequences if caught. On Nauru and Manus Island, in contrast, the injustice is being perpetrated against the very people seeking asylum. There can be few worse things than to be imprisoned unjustly and kept there indefinitely without right of appeal. Australia tortures innocent men, women and children who come begging for mercy. No wonder we are reviled internationally.

    When I worked on Nauru in December 2014, the predominant emotion was of utter despair and hopelessness. What would you do if you were imprisoned unjustly and indefinitely without right of appeal? In the current culture of victim-blaming, if you get depressed and self-harm or attempt suicide, you are accused by the Government of seeking preferential treatment. If you subsequently kill yourself, you had pre-existing mental health problems. If you get angry enough to riot, you are accused of violent ingratitude, with no mention of the extreme provocation that causes normally placid people to get angry enough to resort to violent protest.

    Gillian Triggs and the Australian Human Rights Commission have tirelessly and courageously exposed the harms done to children in immigration detention. The harm is also to adults, of course. But the very term ‘human rights’ implies an obligation, which risks being somewhat confrontational. Australia’s reprehensible treatment of people seeking asylum is as much a question of human decency as human rights. No civilised country should behave like this to fellow human beings. We treat refugees with respect and generosity. We treat people seeking asylum with contempt and cruelty. We talk of showing compassion, and in the same breath tell the meek to go back to where they came from. Australia is traditionally the land of the fair go, but in the words of president of the Australian Medical Association, Brian Owler, current asylum seeker policy is tearing at the moral fabric of our society. We, the public, need to prevail on all our politicians to listen to our pleas to find a new moral direction. Please help us re-discover our soul.

     

    David Isaacs is a consultant paediatrician in a University teaching hospital in Sydney, where he has run a Refugee Clinic since 2005, and is Clinical Professor at the University of Sydney

     

     

     

     

  • What has gone wrong with Malcolm Turnbull’s NBN?

    In a column in The Drum on the ABC, Paddy Manning comments that

    ‘Malcolm Turnbull’s version of the NBN is proving to be much more expensive to deliver than was originally hoped. Remember that the only merit of Turnbull’s “multi-technology mix” (MTM) was that it would be cheaper to build …’

    See link to article below:

    http://ab.co/1Sef8pS