Category: Politics

  • John Menadue. Repost: NBN; the rot set in with John Howard.

    The current NBN mess started with the decision of the Howard Government to privatise the whole of Telstra and not just its retail arm. If the wholesale arm of Telstra had remained in public hands we would have been well on our way to a successful NBN. 

    Unfortunately, at Tony Abbott’s urging, Malcolm Turnbull also let ideology take over with the resulting problems of an NBN that is slow, obsolete and expensive. See below, a repost of an article on John Howard’s responsibility beginning the problem.  John Menadue.

    The confusion and the delay that we have got ourselves into with the NBN can be traced back very directly to John Howard and Senator Minchin when they decided to privatise the whole of Telstra and not just its retail arm. That privatisation was in three stages; 1997, 1999 and 2006.

    If there had been ‘structural separation’ with the wholesale arm being kept in public ownership, we would now be well on the way to completing the NBN. But with the wholesale arm of Telstra sold off with the rest of the business, the Labor government had to start again.

    Malcolm Turnbull clearly didn’t want good advice on the NBN which would have run counter to his ideological leanings and that of his coalition colleagues. He got rid of all the board directors including sacking Brad Orgill, a director of NBN. Malcolm Turnbull didn’t even consult the board before he acted so rashly. Surely the NBN directors had a lot to offer. Institutional memory doesn’t come cheaply or easily in any organisation.

    Brad Orgill who would not have been welcome by the Coalition and the News Group for his investigations into the Rudd Government’s Building the Education Revolution said in an article in the Australian Financial Review last Friday (October 4, 2013)

    “Would NBN even exist if earlier governments had not made the grave error of privatising Telstra as a vertically integrated business? No. And for me this is the most galling. The privatisation of Telstra’s wholesale business was clearly a mistake. If its wholesale business had continued as government-owned there would be no need for NBN and replacement of copper with fibre would have been progressively undertaken, as has happened in the rest of the world by an established incumbent operator with substantial advantages in resourcing, access and intellectual property. NBN illustrates the risks of privatising natural monopolies.’

    Natural monopolies should remain in public hands. We accept that case for example in respect of water and sewerage. We don’t need competitors laying competing and parallel water and sewerage pipes. Competition is best left to the retail level. So it is with telecommunications where exchanges, cables, wires, poles and the pits of the natural monopoly should remain in public hands to serve the whole of Australia regardless of location or class. Opportunist businesses should not be allowed to “cherry pick” the most profitable parts…

    The new chair of NBN, Dr Switkowski has been parachuted in by the Liberal party. He has little experience in roll out of construction projects which must dominate the future of NBN. I wonder what he now makes of the Liberal party nonsense of copper connection from the node to the premises when in a 2009 interview he said:

    ‘The NBN was an important project and that an all fibre networks is a desirable end point. I think the government strategy of investing in a high speed fibre optic base broadband network is a good one. I think it will make a difference to us as a nation and it will ensure more equity in access to relevant services for all Australians.’(AFR 4 October 2013)

    Malcolm Turnbull and the Liberal party have described the NBN as a ‘white elephant on a massive scale”. Initially the Coalition described the NBN as “a dangerous delusion”’ and given us quite exaggerated estimates of cost blow-outs. Whilst the NBN has failed badly to achieve its planned roll-out, it is still on budget at $43 billion according to the retiring CEO of the company.

    Yet Rio Tinto has had to write-off over $US35 billion in bad investments over the last five years. More write-offs are likely from its coal investments in Africa. BHP has also written off billions. In the clamour to decry public investment in the NBN, the ideologues, including the politicians and business commentators, chose to scarcely mention the appalling business decisions of Rio Tinto and BHP.

    The Labor government was criticised because it has not presented a cost-benefit study of the NBN. But I suggest that this criticism has been a quite conscious device to discredit and hopefully delay and then destroy the NBN. A cost-benefit study may be appropriate for private investments with a life of 10 to 15 years. But the NBN will have a public life of perhaps 50 years or more. How useful is a cost-benefit study in those circumstances?

    Brad Orgill has commented that a cost-benefit study would not have been required if the Howard government had not sold Telstra as a vertically integrated telco.

    Cost-benefit studies of NBNs have been carried out all around the world and the results have been overwhelmingly favourable There has been almost unanimous agreement that fibre to the premises is the best option. McKinsey reported that the financial case for a NBN was strong. Access Economics and IBM have also reported positively on the productivity benefits to the nation of the NBN.

    On balance a cost-benefit study would have been useful if for no other purpose than to silence the politically driven critics. In the Howard years there were 25 enquires into telecoms without any serious progress on structural issues.

    John Howard left Australia with a major structural deficit in our budget which many commentators, including the IMF, have highlighted. In the same way, the Howard government’s ideological blinkers about privatisation have put us back ten years in developing a world-class NBN. Malcolm Turnbull has told us that he hopes to get politics out of the issue. But it was John Howard’s ideology and politics above everything else, through the privatisation of a vertically-integrated Telstra that has got us into this predicament. Malcolm Turnbull will be hard-pressed to free himself of the political baggage which he and the coalition carry on this vital project.

  • John Menadue. ‘The Big Short’

    Paul Krugman reviews ‘The Big Short’, a film that the enemies of financial regulation hope you won’t see or believe.  See link below.

    http://www.nytimes.com/2015/12/18/opinion/the-big-short-housing-bubbles-and-retold-lies.html?smprod=nytcore-ipad&smid=nytcore-ipad-share

  • Crony capitalism, lobbyists and markets.

    In the AFR today, John Kehoe writes about the power of lobbyists and crony capitalists who are killing faith in markets. He refers particularly to the US where ‘crony capitalism’ is sapping vitality out of the US economy. He adds that

    ‘If you analyse the very richest Australians, beyond lucky inheritance, many have built their enormous wealth in industries heavily influenced by government regulation. Media, gaming and real estate development dominate the c.v.s of the upper echelons of the BRW rich list.’

    See link to John Kehoe’s article: http://www.afr.com/opinion/regulation-crony-capitalists-are-killing-faith-in-the-markets-20160104-glyr2q

    I am also reposting an article I wrote in May this year for our policy series. It was entitled ‘Vested interests and the subversion of the public interest‘.

     

  • John Quiggin. Piketty and the Australian exception.

    Over the past forty years, leading developed economies, most notably the United States have experienced an upsurge in inequality of income and wealth. Most of the benefits of economic growth have accrued to those in the top 1 per cent of the income distribution. Meanwhile, living standards for those in the bottom half of the income distribution have stagnated or even declined.

    Piketty’s work, published in reports and academic journals, has documented these trends. His book, Capital, not only brought the issues to the attention of a broader public, but presented an analysis suggesting that worse is to come. Piketty argues that we are in the process of returning to a ‘patrimonial’ society, in which income from inherited wealth is the predominant source of inequality.

    Piketty’s work has previously focused mainly on the United States, but the research presented in Capital points to similar trends in the United Kingdom. Although inequality has grown much less in France, the third country on which he has detailed data, Piketty argues that the same trend will emerge unless there is a substantial change in political conditions.

    To the extent that there is a general trend of the kind described by Piketty, we would expect it to emerge first in the English speaking world, where the shift to market liberalism and financialised capitalism was earlier and more complete. And, indeed, a sharp increase in inequality may be observed in other English speaking countries including Canada and New Zealand.

    Australia, on the other hand, looks like a counterexample. On most measures of inequality Australia looks more like France than like the rest of the English speaking world. Although Australia’s have experienced an increase in inequality on most measures, the general picture is one of broadly distributed improvements in living standards, as illustrated by Peter Whiteford’s contribution to a recent seminar on Piketty published by the Australian Economic Review (AER). As Whiteford notes:

    Income growth was highest for the richest 20 per cent of the population, at close to 60 per cent in real terms, but even for the poorest 20 per cent, real incomes grew by more than 40 per cent between 1996 and 2007.

    Other measures such as the Gini coefficient and the ratio of median to mean income tell a similar story. Inequality has increased over the period since the 1980s, but only modestly and with frequent reversals.

    Turning to the top 1 per cent of the income distribution, evidence from tax data, presented by Roger Wilkins in the AER volume suggests that the share of income accruing to this group has risen, but not to the same extent as in other English speaking countries This is consistent with the observations of Piketty himself, who notes:‪

    the upper centile’s [top 1 per cent] share is nearly 20 percent in the United States, compared with 14–15 percent in Britain and Canada and barely 9–10 percent in Australia.

    Much of the credit for this comparatively benign outcome must go to the Labor government that held office from 1983 to 1997 and implemented a relatively progressive version of the market liberal reform agenda. Labor managed a reform of the Australian tax and welfare system that shielded low income Australians from the worst effects of the market liberal revolution that swept the English speaking world in the 1970s and 1980s.

    In most countries, policies of financial deregulation, privatisation and microeconomic reform were accompanied by regressive changes to the tax and welfare systems. By contrast, Labor introduced broadly progressive tax reforms including a capital gains tax and a crackdown on tax avoidance.

    Rather than treating welfare payments and tax policy as separate, the restructuring sought to integrate the two, taking account of the combined impact of means tests and tax policies to optimise the balance between efficiency and redistribution.

    These changes weren’t sufficient to prevent growing inequality of income and wealth, and some of them were eroded over time. Nevertheless, in broad terms, a redistributive tax–welfare system was maintained under the succeeding conservative government, even as it was being eroded in other English-speaking countries.

    Labor returned to office in 2007, just in time to make its next big contribution: the fiscal stimulus that allowed Australia to avoid the recession generated by the Global Financial Crisis in nearly every other country. In combination with previous successful pieces of macroeconomic management, such as the Reserve Bank’s handling of the Asian Financial Crisis in the 1990s, the result has been an economic expansion lasting nearly 25 years, unparalleled in Australia’s economic history, and scarcely equalled anywhere in the world. The strength of the labour market has encouraged a broad spread of prosperity not seen elsewhere.

    Together these factors explain why Australia has avoided the drastic increases in inequality seen in other English speaking countries. On the other hand, although Australia’s a long way from the plutocracy that already characterises the United States, there is no room for complacency.

    Australia’s relatively equal distribution of income and wealth depends on a history of strong employment growth and a redistributive tax–welfare system. Neither can be taken for granted. The end of the mining boom has inevitably resulted in slower growth which bears hardest on those at the bottom of the income distribution. And, as elsewhere, the political pressure to take burdens from the rich and shift them to the poor is never-ending.

    Moreover, Australia has not proved itself immune to the political dynamic, noted by Piketty, by which increasing personal wealth allows the wealthy to dominate politics, then enact policies that protect their own wealth. The archetypal example is Silvio Berlusconi in Italy but the situation in the United States is arguably worse. The majority of members of the US Congress are millionaires, with not much difference between Democrats and Republicans.

    Given the pattern of highly unequal incomes, and social immobility observed in the US today, we can expect inheritance to play a much bigger role in explaining inequality for the generations now entering adulthood than for the current recipients of high incomes and owners of large fortunes. Inherited advantages in the patrimonial society predicted by Piketty will include direct transfers of wealth as well as the effects of increasingly unequal access to education, early job opportunities and home ownership.

    The move towards a patrimonial society already happening in the US is evident at the very top of the Australian income distribution. As in the US, the claim that the rich are mostly self-made is already dubious, and will soon be clearly false. Of the top 10 people on the Business Review Weekly (BRW) rich list, four inherited their wealth, including the top three. Two more are in their 80s, part of the talented generation of Jewish refugees who came to Australia and prospered in the years after World War II. When these two pass on, the rich list will be dominated by heirs, not founders.

    The same point is even clearer with the BRW list of rich families. As recently as 20 years ago, all but one of these clans were still headed by the entrepreneurs who had made the family fortune in the first place. Now, all but one of the families are rich by inheritance.

    So, Australians have no room for complacency. In an economy dominated by capital, and in the absence of estate taxation, there is little to stop the current drift towards a more unequal society from continuing and even accelerating.

    On the other hand, Australia’s relative success in using the tax and welfare systems to spread the benefits of economic growth provides grounds for optimism elsewhere in the world. Australia’s experience belies the claim that any attempt to offset the growth of inequality must cripple economic growth. On the contrary, the evidence suggests that there is plenty of scope for progressive changes to tax policy that would partly or wholly offset the trends towards greater inequality documented by Piketty.

    This article was first published on John Quiggin’s blog on 2 January 2016.

     

     

  • Jenny Hocking. The Dismissal Forty Years Later: When Everything Old is New Again

    Repost from 10/12/2015

    The 40th anniversary last month of the dismissal of the Whitlam government by the Governor General Sir John Kerr met with the predictable flurry of breathlessly delivered revelations and history-making hyperbole. Among the excitable claims of dramatic new ‘never before released’ material we were offered the charred remains of a burnt Liberal party memo showing – surprise! – dissension in the ranks [http://www.afr.com/news/politics/afr10featuresgraphic–20151110-gkvd2c ]; a found, lost, and found again hand-written note by Malcolm Fraser written during his conversation with the Governor-General on the morning of 11 November 1975 – first revealed in 1986 and reproduced in 2005 and 2010 before its latest rediscovery; and even a statutory declaration from Fraser swearing that, this time, he really was telling the truth about their contested conversation. http://www.theage.com.au/comment/its-time-to-dismiss-knockout-punch-politics-20151105-gkrvzz.html

    The dismissal exhibits that rare capacity in political history – to continue to fascinate, animate and agitate us, even decades later. To a large extent this is because, at heart, we have always known that there was more to be told than the potted schematic narrative that had long passed as the history of the dismissal of the Whitlam government. That narrative and that history had changed irrevocably in 2012 with the revelations from Kerr’s archival records of his secret and long denied meetings and communications, all documented in his papers in the National Archives, in Gough Whitlam: His Time. Kerr’s own records had laid bare the extent of his significant secret interactions with the Palace, with the High Court justice Sir Anthony Mason, even with the law school of the ANU, and with the leader of the Opposition Malcolm Fraser. The extraordinary cultivation by the Governor-General of this network of unauthorised advice and support stands in dramatic and total contrast to his calculated deception of the Prime Minister, Gough Whitlam, his decision to ‘remain silent’ to him over this critical period.

    And so, as the dust settles on the numerous ‘exclusives’ and the shamelessly recycled old news as new that have marked the 40-year anniversary of the dismissal, have we actually learnt anything new? Two things in particular have emerged from the recent contributions: firstly, that Kerr was in secret contact with the leader of the Opposition Malcolm Fraser not just on the morning of 11 November 1975 but as early as the week before, despite their repeated public denials of this much rumoured contact and despite their mutual assurances to Whitlam that they would meet only with the Prime Minister’s knowledge and approval. This secret communication had been consistently and insistently denied by both Kerr and Fraser and its revelation has been seen as the ‘smoking gun’ of collusion and prior planning in the dismissal that had been suspected for decades. For the Governor General and the leader of the Opposition – between whom there is no constitutional or political relationship – to act in secret and in defiance of the Prime Minister in this way was a complete subversion of Kerr’s fundamental duty to act on the advice of his ministers. That both Fraser and Kerr then kept this contact secret until the end attests to the enormity of their actions and that neither would have been able to remain in office had this become known at the time.

    Secondly, we now also know from Kerr’s former Official Secretary David Smith, that he had contacted the Palace on Kerr’s behalf shortly before the dismissal to discuss the Governor General’s overwhelming concern for his own position – his concern that Whitlam might recall him if he became aware that Kerr was secretly considering, together with members of the High Court, the leader of the Opposition and the Palace itself, dismissing him from office. Which would have been an entirely reasonable action on Whitlam’s part given the level of his deception by the Governor General. At the same time, this acknowledgment that Kerr had been in secret contact with the Palace to discuss his own tenure – the prerogative of the Australian Prime Minister to determine – without Whitlam’s knowledge, also confirms Kerr’s description of his communications with the Palace regarding dismissal.

    It is simply counter-factual to claim as some commentators do, that the Palace was not aware that Kerr was contemplating dismissing Whitlam, and to claim even that the Queen disagreed with Kerr’s actions. This claim is unsupportable and simply defies the facts as they have now been revealed. From the moment Kerr first mentioned to Prince Charles in September 1975 that he was ‘considering having to dismiss the government’, from where it passed to the Queen’s Private Secretary Sir Martin Charteris and then to the Queen, the Palace was already involved in Kerr’s deliberations. By failing to immediately share this dramatic communication from the Governor General with Whitlam, the Palace was itself playing an active role. Their failure to act told Kerr that there would be no adverse response from the Palace should he act to dismiss Whitlam and it also told Kerr that the Palace would not themselves warn Whitlam of the Governor General’s deception. As I wrote in The Dismissal Dossier, the failure on the part of the Palace either to remind Kerr that he must consult his Prime Minister, or to warn Whitlam themselves of Kerr’s deception, could only be taken as a ‘royal green light’ by Sir John Kerr. And it was.

    It is simply astonishing to read the repeated efforts to recast this now clear element in the history as its opposite – to claim that the Palace was somehow embarrassed by Kerr’s actions and even disagreed with it. http://www.abc.net.au/radionational/programs/breakfast/the-dismissal-of-gough-whitlam:-40/6910462 All the evidence shows us otherwise. Within days of the dismissal Kerr received a personal letter of support for his ‘courageous and correct’ actions from the Queen’s cousin, Lord Louis Mountbatten, who then paid Kerr a private visit at Admiralty House early the following year while staying with the new Prime Minister Malcolm Fraser at Kirribilli House. In March 1977 the Queen bestowed on Kerr the highest order of her personal honour, personally investing him as Knight Grand Cross of the Royal Victorian order during her visit to Australia. The Royal Victorian order recognises ‘personal service to the monarchy’ and is ‘entirely within the Sovereign’s personal gift’. Hardly a sign of royal dismay at the Governor-General’s unprecedented action in dismissing the twice elected Prime Minister Gough Whitlam without warning.

    Certainly by 1977 the Queen was finding Kerr’s behaviour highly embarrassing – but then, by 1977 everyone was finding Kerr’s behaviour highly embarrassing. That was the year after Kerr’s alcohol fuelled trajectory first landed him face-down in the mud at the Tamworth Show, only to be matched  at the Melbourne Cup where Kerr, in an ill-fitting top hat and tails, gave a repeat performance, this time remaining largely upright as he struggled to award the cup to the owners of the winning horse. Gough Whitlam was moved to consider, ‘how much better a pro-consul the horse would have made’. It is not surprising then that the Queen soon joined the long list of those who then wished the Governor General to make a hasty early retirement, which can hardly be taken as reflecting on the attitude of the Palace to the dismissal two years earlier.

    It is now also clear despite the long historical obscuring of these critical facts, that Whitlam had reached a political solution to the blocking of Supply in the Senate, with his decision to call a half-Senate election. Whitlam had told Kerr of this decision to call the half-Senate election 5 days earlier, the key documents had been exchanged, the election date set and the final wording of the call for the election agreed to – when Kerr dismissed Whitlam without warning. Malcolm Fraser, the Governor General’s appointed Prime Minister, was then defeated in a motion of no confidence in the House of Representatives which also called on the Governor-General to re-commission the Whitlam government. We have known since 2012 that at this point Kerr contacted his old friend and secret advisor Sir Anthony Mason who, in complete breach of the separation of powers and the fundamental tenet of parliamentary democracy, told Kerr to ignore the House of Representatives motion of no confidence as ‘irrelevant’. There is no doubt however that Whitlam should have been restored to office on the afternoon of 11 November 1975, as Governor Sir Dallas Brooks had done in Victoria in 1952 following a Supply crisis in the Upper House – dismissing the government, passing Supply and then re-commissioning the government with the confidence of the lower House. This was the precedent that should have been followed in 1975, as Whitlam fully anticipated and as Sir Richard Eggleston and others have also argued. As it was, Kerr allowed Malcolm Fraser to remain in office with no electoral or parliamentary authority, dependent only on the Governor-General’s personal determination of a government of his own choice.

    Finally, we have the entirely unexpected historical revisionism of the current Liberal Prime Minister, Malcolm Turnbull. In a complete volte face for long established Liberal representations of the dismissal as a moment of national salvation, Turnbull marked the 40th anniversary by proclaiming that Sir John Kerr was wrong to dismiss Whitlam without warning, and that Malcolm Fraser was wrong to have blocked Supply in order to achieve it. Turnbull’s frank and significant concession shows just how far the judgment of history of the dismissal has come in the intervening 40 years.

    Nevertheless, some notable gaps remain: firstly, the ‘Palace letters’ between Kerr and the Queen, Prince Charles and Sir Martin Charteris are historically significant documents relating to the dismissal, their continuing embargo at the personal decision of the Queen is a denial of our access to our own history and they ought now to be released. The National Archives of Australia has categorised these letters rather perversely as ‘personal’ rather than official, thereby removing them from the usual 30 year (now 20 year) release requirements under the Archives Act and enabling either party – the Palace or Kerr – to set their own terms for release. This claim of their ‘personal’ status is absurd and not sustainable. The letters were written in Kerr’s capacity as Governor-General, they were sent from Government House at Yarralumla and Admiralty House, and they covered the immediate contemporary political events as related to the Palace by Kerr as Governor-General. We also know that Kerr’s letters did not in fact canvas personal matters but set out his view of the on-going political situation because he left extracts of his letters to the Queen among his papers, which I identified in 2012 as extracts from Kerr’s letters to the Queen, defying their apparent embargo.

    If these are indeed ‘personal’ letters as the National Archives has advised, then they should also be released since Kerr had made it clear that he wanted and had actively sought the release of all these letters – to the Queen, Prince Charles and Sir Martin Charteris, and of Charteris’ letters to him. As I described in Gough Whitlam: His Time, Kerr contacted the Palace in early 1980 seeking the release of these letters, believing they would support his decision to dismiss Whitlam. The Queen’s then private secretary Sir Philip Moore was reportedly horrified at the suggestion and insistent on its rejection. The question is – why? Given that Kerr was not only happy but determined to release his own letters, whose privacy then is being protected here? Certainly not Kerr’s, yet it is in his name that his own apparently ‘personal’ letters to the Palace have been and remain embargoed.

    Secondly there is one final detail of Sir Anthony Mason’s role, the extent of which had been hidden until 2012, that is yet to be revealed. Mason conceded three years ago that he had drafted a letter of dismissal for Kerr, and this letter should now also be released. Like the secret Palace letters, Mason’s letter is also a critical document in the still evolving history of the dismissal of the Whitlam government and, like the Palace letters, it too is part of our history we all have a right to know.

    Professor Jenny Hocking is Research Professor and Australian Research Council DORA fellow, National Centre for Australian Studies, Monash University. Her most recent book ‘The Dismissal Dossier’ was published by Melbourne University Press.

  • Jenny Hocking. ‘Why Didn’t They Warn Whitlam?: Where Politics and Ethics Collide’

    Repost from 16/11/2015

    On the 40th anniversary of the dismissal of the Whitlam Labor government a remarkable thing happened – a Liberal Prime Minister finally acknowledged that the Governor-General Sir John Kerr was wrong. In a stark break with the coalition’s long insistence that Kerr had ‘saved the country’ by stepping in and appointing Malcolm Fraser Prime Minister, Malcolm Turnbull repeated his consistently held view that Kerr should not have taken this unprecedented action of removing an elected government without first warning Gough Whitlam.

    There are few who would now disagree with Turnbull’s assessment – with the obvious and predictable exceptions of Gerard Henderson, David Smith and David Flint – that Kerr should have warned Whitlam. After all, Kerr had already shared this momentous decision with at least two High Court justices, with the leader of the Opposition Malcolm Fraser – and he had even told his wife Lady Anne Kerr, two days before the dismissal. And Kerr had also confided widely his fear of his own recall, a fear which existed only in the context of his considering dismissing Whitlam. Kerr had made this concern clear to Prince Charles, the Queen’s private secretary Sir Martin Charteris and the Queen herself. It seems that everyone knew something about the Governor-General’s planning, except the Prime Minister Gough Whitlam.

    In a remarkable passage from his private papers, Kerr reveals that he had decided to conceal his thoughts from Whitlam, ‘to remain silent to him’, from as early as September 1975 – one month before Supply had even been blocked by the coalition Senators – not only deceiving Whitlam of his thinking from that point on but in the process precluding any opportunity for a more conciliatory resolution. We now know that the extent of Kerr’s deception of the Prime Minister was far greater and more widespread than previously imagined. With every release of new material – posthumous records, interviews, archives and confessional reminiscences – not only has the detail of the dismissal become clearer, the history of it that we had been spun for decades has become weaker.

    Whitlam had been elected Prime Minister for barely a year when he said; ‘The importance of an historical event lies not in what happened, but in what later generations believe to have happened’. It reads now as a prescient take on the unsettled history of the dismissal of his government. The simple fact is, we had all been sold a pup. As I set out in Gough Whitlam: His Time and most recently in The Dismissal Dossier, Kerr had told the Palace of his concern for his own position on several occasions and his office had even privately contacted Charteris to discuss it, unknown to Whitlam; Kerr had secretly sought the advice and comfort of not one but two High Court justices; and he had been in secret communication with the leader of the Opposition from at least the week before the dismissal. Each of these critical factors had been at best hidden and at worst denied for years, and the history had been distorted and incomplete while-ever these deceptions continued.

    Even Sir Anthony Mason, the High Court justice whose secret involvement in Kerr’s planning and the dismissal was more significant than any, now states that he told Kerr that he must warn Whitlam of his intention, ‘or run the risk that people would accuse him of being deceptive’. While the role of the Chief Justice of the High Court Sir Garfield Barwick had long been known, Mason’s extensive role had been hidden for 37 years, one of the many startling historical secrets to have come from Kerr’s private papers, revealed in Gough Whitlam: His Time. Kerr and Mason’s secret interactions began in August 1975 in Kerr’s words, ‘fortifying me for the action that I was to take’. Mason’s involvement was not merely advisory it was direct, to such an extent that he prepared a draft letter of dismissal for Kerr. It is simply extraordinary that Mason can yet claim that he did not ‘encourage’ Kerr to dismiss Whitlam. The capacity of all parties to deny any active role much less responsibility for what followed, despite their own failure to warn Whitlam, reflects a moment where politics and ethics collide.

    The long-secret exchanges between Kerr and Mason not only compromised the separation of powers and the relations between the High Court and the executive, in keeping them hidden from public view for 37 years a further deception was played out on its history. In Sir Anthony Mason’s now well-known words to me on this, ‘I owe history nothing’. It is hardly surprising then that questions have been raised over Mason’s statement that he urged Kerr to warn Whitlam.

    A critical element in Kerr and Mason’s differing views on this aspect of their pre-dismissal interaction is Barwick’s advice to Kerr. Barwick’s advice was written on 10 November by which time, as Barwick describes it, Kerr had already ‘determined’ on dismissing Whitlam. Barwick concludes that Kerr’s decision was ‘consistent with your constitutional authority and duty’, and makes no mention of Kerr having to warn Whitlam. On the morning of 10 November, between High Court sittings in Sydney, Barwick showed his advice to Mason, who ‘quite agreed with the view I had expressed’. Mason himself later wrote that he did not differ on any ‘matter of importance’ with Barwick’s advice – despite the fact that Barwick’s advice did not raise in any way the need to warn Whitlam.

    It is difficult if not impossible to reconcile Mason’s unqualified agreement with Barwick’s advice with his more recent claim to have told Kerr that he must warn Whitlam, ‘as a matter of fairness’, before taking the unprecedented step of removing him and his government from office. The history of the dismissal is clearly not over yet.

     

    Jenny Hocking is professorial Fellow with the National Centre for Australian Studies at Monash University and the Inaugural Distinguished Whitlam Fellow at the Whitlam Institute at the University of Western Sydney.  Her most recent book is ‘The Dismissal Dossier, everything you were never meant to know about November 1975’ published by Melbourne University Press.

     

  • John Menadue. High Court judges.

    Former High Court judges have been in the news recently and not just Dyson Heydon

    In the 40th anniversary of the Whitlam Dismissal, two High Court judges at the time of the dismissal have been very much in the news. We were reminded again of the role of Sir Garfield Garwick in briefing and encouraging the Governor General to dismiss the Whitlam government. We also learnt more about the role of Sir Anthony Mason who not only coached the Governor General on what he might do but on the afternoon of the Dismissal advised the Governor General he need not see the Speaker of the House of Representatives who was kept waiting at the gate of the Governor General’s residence for an hour. The Speaker of the House of Representatives wished to inform the Governor General that Malcolm Fraser did not have the confidence of the House of Representatives and that he should recall Gough Whitlam and recommission him as Prime Minister. Sir Anthony Mason told Sir John Kerr that the speaker was irrelevant and should be disregarded. How extraordinary that a High Court judge, and later Chief Justice, could so easily put aside any concern about the separation of powers and the role of the Speaker in the Westminster system.

    I had an acquaintance with another Chief Justice of the High Court when I was on the Council of the Order of Australia. In my book, ‘Things you learn along the way’ published in 1999 I said

    ‘As Secretary of the Department of Special Minister of State I was a member of the Council of the Order of Australia for about 12 months in 1983/84. The Chairman of the Council was Sir Harry Gibbs, the Chief Justice. I proposed that Lionel Murphy receive an AC, the senior award in the Order of Australia. Gibbs asked that the matter be deferred as he would like to consider it further. At the next meeting, Gibbs said that he had spoken to Murphy and Murphy was not interested in such an award. I was very surprised. My proposal lapsed.’ 

    But that was only half the story. Several years later when I was on the board of Qantas from 1986/89, I had a discussion with Ray Gietzelt who was also a member of the board. We privately discussed the Order of Australia. Knowing that Ray Gietzelt had been a very close friend of the late Lionel Murphy, I expressed surprise that Murphy had declined any interest in an award in the Order of Australia. Ray Gietzelt said that he also would be very surprised if Murphy had declined. He said however that he would speak to Ingrid, Murphy’s wife. At the next Qantas board meeting, Ray Gietzelt went out of his way to tell me that he had spoken to Ingrid Murphy who was also confident that an offer of an award in the Order of Australia had never been made to Lionel Murphy.

    All the key people in this matter are now deceased, so it is unlikely that we will get any further clarification.

  • Victoria Rollison. The WorkChoices Zombie

    Let’s put aside the irony of a Liberal government, the preacher of the ills of ‘big government’, spending $45 million to reach its expensive Royal Commission tentacles into the operation of trade unions. Let’s put aside the obvious political nature of such a witch-hunt, designed to reduce the power of unions to negotiate on behalf of workers, a seek and destroy mission with the pincer-movement aim of a) benefiting employers at the big end of town, b) reducing unions’ capacity to contribute funds to Labor election campaigns and c) to discredit Labor MPs with union backgrounds. For now, putting these contradictions and political trickery aside, which are so wholly obvious to us but strangely not apparently obvious nor interesting to commentators in the mainstream media, let’s instead look at the Trade Union Royal Commission’s findings in relation to the lives of those people the commission paradoxically claim to represent the interests of; workers.

    Using my own situation as a worker and union member as a representative case study, I note with alarm that the Prime Minister, Malcolm Turnbull, has proclaimed the findings of the Trade Union Royal Commission (TURC) as justification to fight an election over industrial relations. Clearly Turnbull thinks that there is a large enough problem in the trade union movement, a movement just as separate to the operations of government as a private company, that he’s pushing this problem to the top of his government’s agenda. The handful of bogey-man union officials who have been cited in the TURC findings as having acted not in the best interest of workers, are now the government’s enemy number one. As a union member, I don’t like to hear about my union funds being used to fund union officials’ extravagant lifestyles, nor do I appreciate reports of criminal activity, which appear to be almost entirely confined to rogue elements in construction unions. But, as a worker and a member of a young family, a woman, a parent to a young child who has childcare and then her whole education in front of her followed by a job search, a mortgage holder, a South Australian, a buyer of groceries, a daughter of aging parents, a wife to a husband who works in the manufacturing industry and a member of a society experiencing the scary and increasingly apparent effects of climate change, I must admit, the conduct of a few dodgy union officials in industries I don’t work in, whose conduct hasn’t been proven to adversely impact the conditions of workers they represent, is about as high on my list of ‘what is the government doing about this?’ priorities as the fate of Johnny Depp’s girlfriend’s court case over the illegal entry of small dogs.

    And even if I did care deeply about the conduct of some dodgy union officials in the construction industry (which I don’t), I care a thousand times more deeply about those union officials having the freedom to do their job to help safeguard the safety of workers on construction sites. I’m pleased there are union officials stopping work when they see risks to workers, because it’s blatantly clear that if the union officials didn’t care, no one would. This is because it’s obvious that many construction employers care far more about the speed of their profit making than they do the safety and wellbeing of their employees. So if it wasn’t for the unions stepping in to insist on safety, far more accidents and deaths would occur. I would have thought a responsible government would be more concerned about safety on construction sites than the isolated actions of a few bad apple unionists. Especially after that very same government were so upset about the deaths of four insulation installers that they held a Royal Commission into a government program that funded the private companies whose unsafe work practices led to the tragic deaths of workers. Another Royal Commission aimed at hurting the Labor Party; do you see a pattern forming here?

    I notice a day after the release of the TURC findings, the ABC News Radio poll asking ‘In your experience, are unions riddled with ‘deep-seated’ and ‘widespread’ misconduct?’, after 3,466 votes have been cast, found 74% said ‘no’.

    This result suggests I’m not alone in my perception of the TURC findings as more of a political statement than the experience of union members.

    As a worker, it would be wholly irrational for me to congratulate, or indeed vote for a government vowing to smash the power of unions. As a worker in an economy with stagnant wage growth, it would be counterproductive for me to encourage my government to give employers, who already hold an elephant-on-a-seesaw-unequal position of power in the Goliath-capital battle with David-the-workers, any more power to define my working conditions. Because let’s face it, not every employer wants to pay the minimum wage, without penalty rates, minimum entitlements and no chance of a pay rise. But enough employers do (take a look at 7-eleven) so that the entire wage structure of the country would be pulled down without unions pushing back against the floodgates. When former PM Tony Abbott said WorkChoices was dead-buried-and-cremated, workers always knew that it would only take a second-term Liberal government 5 minutes to resurrect the WorkChoices zombie from the grave; a zombie who’s bite is fatal to workers’ rights.

    Therefore, if Turnbull wants to play this game and if he is really serious that dodgy union officials are the biggest threat facing our country, and his highest agenda item in an election, I echo Bill Shorten’s words on hearing Turnbull’s plans: BRING IT ON. And so say all of us.

    Victoria Rollison is a political blogger, working in marketing and communications.

  • Wayne McMillan. Rewriting the Rules: Lessons for Australia

    The Roosevelt Institute’s Chief Economist Joseph Stiglitz a Nobel Economics prize winner in his own right, has come up with a block buster report on the social and economic problems facing American society. This115 page report which was published as a book in November 2015 was put together with valuable assistance and input from a broad cross-section of people under the stewardship of Stiglitz. Notable economists such as Brad De Long and Robert Reich were among the consulting researchers.

    Stiglitz’s team of researchers have revealed that the USA is in big trouble and at the heart of it are misplaced rules, laws and economic policies, based on faulty economic theory. If you combine this with an over-arching, pervasive, narrow minded neo-liberal ideology, then you have a recipe for economic and social disaster.

    American neo-liberal ideology and orthodox economic thinking have produced income and wealth inequality of immense historical proportions. Lowly paid workers are in the majority whilst the greater percentage of income and wealth is transferred to an ever decreasing smaller number of people.

    “Over the last 35 years, America’s policy choices have been grounded in false assumptions, and the result is a weakened economy in which most Americans struggle to achieve or maintain a middle-class lifestyle while a small percentage enjoy an increasingly large share of the nation’s wealth. Though these lived experiences and personal challenges are important, they are only the tip of the iceberg that is the crisis of slow income growth and rising inequality. To fully understand the scope of the problem, we must also examine the array of laws and policies that lie beneath the surface—the rules that determine the balance of power between public and private, employers and workers, innovation and shared growth, and all the other interests that make up the modern economy.” Dominant economic frameworks over the past 35 years—like “trickle-down” economics, and the idea that markets work perfectly on their own—paved the way for an onslaught of policies that decimated America’s middle class. This paper presents an evidence-backed alternative framework:

    • Markets are shaped by laws, regulations, and institutions. Rules matter.
    • The rules determine how fast the economy grows, and who shares in the benefits of that prosperity.
    • Concentrated wealth can hurt economic performance. Under the right rules, shared prosperity and strong economic performance reinforce each other. There is no trade-off.
    • A tentative, piecemeal policy response to help the neediest will not suffice. We must rewrite the rules of the economy with a focus on restoring a balance of power between the competing interests that make up the modern economy” p.7

    What should and can Americans do to rectify this appalling predicament? According to Stiglitz and his researchers they must:-

    1. Ensure that the financial sector becomes responsive to consumer needs, by removing hidden financial charges and fees. Bring in rules that penalises risky investments.
    2. Make full employment the goal.
    3. Introduce legislation to protect vulnerable workers. Allow workers to organise and strengthen their right to collective bargaining.
    4. Change the tax system to make it fairer, by removing corporate welfare tax expenditures and raising taxes on capital gains and dividends. Introduce a financial speculation tax to deter short-term trading and encourage long-term investment.
    5. Ensure some reasonable level in the remuneration of chief executive officers with ordinary salary/ wage earnings.

    The most dramatic recommended changes were to:-

    • Overhaul American social security, by introducing a universal Medicare and affordable health care.
    • Expand Social Security with a supplemental public investment program modelled on private Individual Retirement Accounts, and raise the payroll cap to increase revenue.
    • Invest in young children through child benefits, early education, and universal pre-kindergarten.
    • Increase access to higher education by reforming tuition financing, restoring protections to student loans, and adopting universal income-based repayment.
    • Expand access to banking services through a postal savings bank. Create a public option for the supply of mortgages.

    The lessons learnt from the USA are there as a warning to Australia. Australians should be very careful now about allowing the present government to focus on deficit reduction via fiscal cutbacks, instead of new job creation. Full employment for anyone who wants to work is the keystone for any just and healthy society and should be the number one priority for any government. In addition, workers should be on guard where they have no union coverage or their union protection is whittled away by new industrial legislation that prevents unions from operating effectively in workplaces. Reducing deficits and worker protections during economic slumps will only impoverish workers, the unemployed and the poor and should be resisted vigorously by all ordinary Australians.

    The Anglo-American variety of neo-liberalism has been a dismal failure in the UK and the USA, where it has caused only hardship and poverty for the populace, Australia should take the right steps not to make the same mistakes.

    [Wayne McMillan is a keen follower of current economic trends and policies. He has been studying Economics for over 30 years, he lives in Whalan NSW.]

  • Jenny Hocking. The Dismissal in History

    Repost from 10/11/2015

    This week marks the 40th anniversary of one of the most divisive and corrosive episodes in our history, the dismissal of Gough Whitlam as Prime Minister by the Governor General, Sir John Kerr. Kerr’s action in removing the twice-elected Whitlam government and appointing the leader of the Opposition, Malcolm Fraser, Prime Minister on 11 November 1975 was an abject subversion of our political process and it continues to be vigorously contested. The dismissal was steeped in deception then and since and the history of it has been similarly flawed – incomplete, politicised and at times deliberately distorted. It is only now, 40 years later that we have if not the full story, then most of it. If the dismissal is a battle over the judgment of history, the evidentiary direction has been all one way. For Kerr and Fraser in particular, it is damning.

    In my book The Dismissal Dossier I reveal the startling posthumous revelations from Malcolm Fraser and his former strategist and coalition Senate leader, Reg Withers, both of whom left embargoed interviews in the National Library. In an interview embargoed until after his death, Withers finally confirms that Fraser and Kerr had been in secret telephone contact prior to the dismissal of the Whitlam government. Withers recounts his presence in Fraser’s office when Kerr rang on Fraser’s private line, after which Fraser said to Withers, ‘You never heard that conversation’. This secret private contact was repeatedly and consistently denied by both Fraser and Kerr, its posthumous confirmation carries implications not only for the historical record. As John Menadue wrote in his recent post on this critical revelation; ‘It also highlights personal deceit by the Governor General’ and, it must be said, of both Fraser and Withers. (See also Menadue post, The dismissal. How John Kerr saved Malcolm Fraser forty years ago.)

    In the course of establishing this corrective to history the question of how much the Palace knew has come more clearly into view. Much of this has come from the wealth of archival material I uncovered in 2012 during research for the second volume of my biography of Gough Whitlam, Gough Whitlam: His Time. In these private papers, notes, journal and extensive reflections, Kerr reveals that the Palace knew that he was considering the prospect of dismissing Whitlam from as early as September 1975, when he confided his concern for his own position to Prince Charles in Port Moresby. Kerr raised with Prince Charles his concern that Whitlam might move to recall his commission if he became aware of the possibility of dismissal, and Kerr recounts Charles’ solicitous response, ‘But surely Sir John, the Queen should not have to accept advice that you should be recalled at the very time when you were considering having to dismiss the government’. This is an astonishing revelation by Kerr, one that profoundly challenges our previous understanding of the dismissal.

    Kerr here is stating that Prince Charles knew that he was ‘considering having to dismiss the government’ as early as September – one month before the Supply bills were even blocked in the Senate, and two months before the dismissal. Kerr’s concern was conveyed from Charles to the Queen’s private secretary Sir Martin Charteris who then wrote to Kerr just weeks before the dismissal and told him that should this ‘contingency’ arise, the Queen would try to delay things for as long as possible. The implications of this are startling, the Palace had conveyed to Kerr that it would delay implementing a decision of the Prime Minister of Australia on his recall, a decision that was entirely and properly Whitlam’s to make. The Queen has consistently been portrayed as determined not to become involved in the events of 1975, and yet by entering into this communication with Kerr over his own position, and agreeing even to consider a means of delaying it, the Palace had interposed itself directly into matters of Australian politics. In the process it had highlighted the real effect of what Whitlam termed the ‘post colonial relics’ still impeding our national sovereignty.

    Kerr’s letters to the Palace are embargoed for 50 years from the end of Kerr’s tenure as Governor General, until 2027, and I was only recently denied access to them. I was informed by Government House that the letters remain embargoed, ‘At her Majesty, the Queen’s instructions’. As if it were not bad enough that our access to critical documents in our own history is determined by a foreign monarch, even once this 50 year embargo is lifted, it is the Queen’s private secretary who will advise on later requests for access. In other words, we may never see this correspondence unless the Palace determines that we can.

    Prime Minister Malcolm Turnbull has indicated that he will request that Buckingham Palace release ‘the Palace letters’. For the full story to finally be told it is essential that this request include not only Kerr’s correspondence with the Queen, but also his correspondence with both Sir Martin Charteris and Prince Charles.  Much of Kerr’s letters to the Queen is in fact already known, since Kerr himself revealed it.

    However, among Kerr’s private papers are 6 ‘extracts from letters’ in the weeks leading up to the dismissal that I identified also in 2012 as extracts from his letters to the Palace. In his own way Kerr had left a posthumous record of the key points from his letters to the Palace that he knew would be long embargoed. In all but one of those letters Kerr refers to the prospect of having to dismiss Whitlam and it simply defies the mounting evidence to the contrary to continue to deny that the Palace knew of this possibility.

    Also among Kerr’s private papers is a handwritten note headed ‘Dismissal’ in which Kerr lists key points in the trajectory of the dismissal and which includes, ‘Charteris’s advice to me on dismissal’. There could scarcely be a stronger indication of the prior knowledge of, if not involvement in, Kerr’s thinking than this, that not only was the Palace aware that Kerr was considering the possibility of dismissal, the Queen’s private secretary had provided ‘advice’ to him on it. The insistent claims that the Palace was entirely unaware that Kerr was considering dismissing Whitlam, now appear as increasingly desperate attempts to shore up a crumbling historical position.

    Few would deny that Kerr should, at the very least, have warned Whitlam. That he did not do so was Kerr’s great moral and political failing – and the very reason why the Palace became immediately drawn into the furore that followed. Yet despite knowing of Kerr’s concerns for his own position in the context of his consideration of dismissal, the Palace at no stage urged Kerr to warn Whitlam first, nor warned Whitlam themselves of the substance of their communications with Kerr. Their silence on this point could only have been read by Kerr as a ‘royal green light’. It told him that the Palace held no fundamental concern for the act of dismissal itself – for if so they would surely have advised him of it. Kerr certainly read their silence as such as his papers make clear The few comments from Palace officials in the decades since have confirmed this view, the response has never been to demur from Kerr’s action in dismissing Whitlam, merely to suggest that in their view Kerr acted too soon. Their only concern about the dismissal appears to have been one of timing.

    The dismissal of the Whitlam government was so contentious and so polarising that its history inevitably became bound up with its politics. With such political urgency embedded in its history, every unfolding revelation and every reinterpretation of that dramatic time has become part of the struggle to secure the historical record. The dismissal of the Whitlam government is simply too significant, and far too interesting, to continue to constrain in this way. It is time we let the dismissal pass from politics to history and, forty years later, to finally accept what that history tells us.

     

    Professor Jenny Hocking is the author of The Dismissal Dossier: Everything You Were Never Meant to Know About November 1975 Melbourne University Press. 2015

     

  • John Menadue. The Dismissal – Forty years on. A smoking gun

    Repost from 27/10/2015

    The evidence continues to mount against those who collaborated in the dismissal of the Whitlam government. To obfuscate and cover their tracks, those who collaborated in the dismissal and their establishment friends spare no effort to criticize the performance of the Whitlam government. Those attacks are becoming quite threadbare. It is amazing what people with guilty consciences do to try and justify outrageous behavior or avoid responsibility or change the subject!

    The fact is that they collaborated in the dismissal of a democratically elected government.

    In contrast Gough Whitlam, after forty years, is more and more vindicated.

    Those who collaborated in the dismissal of the Whitlam government were our ‘betters’ – a governor-general, two high court judges, parliamentary leaders, a media magnate and the business elite.

    I have written in my book ‘Things you learn along the way’ (pages 148-167) about the deceit of many of the collaborators. In a post in this blog on 21 October last year ‘Farewell to Gough Whitlam’, I drew attention to the words of the late Senator Reg Withers, the leader of the coalition in the senate, that he could not have held the numbers much longer in the senate. My strong view is that John Kerr’s premature intervention saved Malcolm Fraser.

    Now Professor Jenny Hocking, in her new book ‘The Dismissal Dossier: Everything You Were Never Meant to Know about November 1975’ adds to the revelations of not only Sir Garfield Barwick and Sir Anthony Mason. She tells us that John Kerr was in direct and secret telephone contact with Malcolm Fraser in the critical period before the dismissal. In her research Jenny Hocking has found a posthumous record of the late Senator Reg. Withers. This record, quoted below highlights conversations between John Kerr and Malcolm Fraser.

    “Withers reveals that not only had Kerr decided to act against Whitlam in the week before 11 November 1975, but that both he and Fraser knew this. Withers confirms that the Governor-General and the Leader of the Opposition were in secret telephone contact, using their secure private numbers. Withers recounts that he was in Fraser’s office in early November when Kerr contacted Fraser using the private number for the Leader of the Opposition’s parliamentary office. Nobody knew what his private number was except Tamie, Withers said. Fraser told the caller that he could be contacted on that number at any time … Fraser then asked the called for their number, repeating as he wrote it down, ‘I can also ring you on this number?’ … As Fraser hung up he said to Withers ‘You never heard this conversation’. “

    This really is a smoking gun.

    It confirms what I said in 1999 in my book.

    “ … Fraser believed that Kerr was in fear of dismissal. Further confirmation that Kerr had revealed to Fraser his insecurity was given to me by Fraser in a discussion on 28 January 1976. My file note reads ‘Governor-General encouragement to the Opposition. On 28 January this year – 1976 – Mr Fraser said – on the street outside West Block that on his first meeting with the Governor General during the supply crisis -21 October – the Governor-General had said that he could not give Whitlam any inkling of what he had in mind or Whitlam would be immediately on the telephone to London seeking the Governor-General’s dismissal.’

    “Malcolm Fraser has denied saying this to me as reported by Paul Kelly in November 1975. Kelly reported ‘When I asked Fraser about Menadue’s account of his note, he insisted that he (Menadue) was wrong. Fraser said that during the crisis he was aware that Kerr felt his position was at risk from Whitlam but Fraser is adamant that Kerr did not act improperly by saying this to him during their talks’. I stand by my account.” End of quote from book.

    In light of Jenny Hocking’s revelations, I stand even more in support of my account that John Kerr conveyed to Malcolm Fraser that he had in mind to dismiss the Whitlam Government.

    That is an outrageous thing for a Governor-General to do. It was quite contrary to convention developed over centuries that the Head of State acts on the advice of his or her Prime Minister. It also highlights personal deceit by the Governor- General.

    I am also certain that Rupert Murdoch knew that a dismissal was in prospect. In my book in 1999, I recorded a discussion with Rupert Murdoch.

    “I did have lunch with (Rupert Murdoch) and Ken Cowley on 7 November 1975, in Canberra at a Kingston restaurant. … In my record of 11 December about that lunch with Murdoch five weeks earlier I wrote

    ‘Rupert Murdoch told many of his friends that Mr Fraser had informed him that the Governor-General had given him (Fraser) an assurance that if he held on long enough there would be a general election before Christmas … although I have no direct information. He did tell me however on 7 November that he was quite certain that there would be an election before Christmas and an election specifically for the House of Representatives. I suggested to him that a half-Senate election was the only possibility. He rejected this view and said that he believed that there would certainly be a House of Representatives election before Christmas and that he would be staying in Australia until this occurred. He was very confident of the outcome of any election and even mentioned to me the position to which I might be appointed in the event of the Liberal victory – Ambassador to Japan. ‘

    “Murdoch denies my account of our lunch. I stand by it. Murdoch was intimately involved with Fraser in the dismissal.” End of quote from book.

    Eighteen months later I was on my way to Japan.

    I have found on other occasions that Rupert Murdoch has very convenient memory lapses, like his request to become the Australian High Commissioner to London.

    Once again, the Jenny Hocking revelations add strong support to the view that Malcolm Fraser knew what John Kerr was going to do. It also explains why Rupert Murdoch threw his newspapers into a frontal attack on the Whitlam Government in October and November 1975. He also applied direct public pressure on John Kerr to ‘do his duty’ and dismiss Gough Whitlam.

    What do the collaborators now say in light of these new revelations about the propriety of a Governor-General dismissing an elected government that had a majority in the House of Representatives? In that process he collaborated with judges, senior members of parliament and the media.

    We used to think that our ‘betters’ believed in tradition, conventions, parliament and the independence of the judiciary. People of power and privilege find it hard to keep their head and accept that they must play by the rules that they expect others to observe.

    How naïve we were to trust them then and even now!

    Yet our society depends on trusting other people. So for me that betrayal of trust is the most wounding of all.

    Many of these collaborators have left or been purged from public life. Rupert Murdoch  seems to spend much of his time twittering. He now has to be content with the head of a National Rugby League chief.

    I will be writing separately about Jenny Hocking’s revelations on the role of the Queen and Buckingham Palace in the dismissal.

  • Chris Bonnor . Unhappy New Year, struggling schools and parents!

     

    Prime ministers come and go but the timing of nasty announcements doesn’t change. And so it was with the dumping of Gonski funding beyond 2017, announced in the traditional period of national lethargy between Christmas and New Year. It came despite earlier rumours which suggested Turnbull would pull a rabbit out of the hat – but the December MYEFO showed an increasing deficit of fiscal rabbits.

    Aside from a very few, the reaction was one of dismay, including from NSW. Amongst the few was Jennifer Buckingham who joined the usual ‘more money doesn’t deliver’ chorus, drawing attention to recent findings which suggested funding makes little difference to student achievement. But the full report on the impact of National Partnership funding in NSW shows that, with certain programs and practices in place, targeted funding is certainly effective.

    Alas it seems that the solution is now to simply cap the funding rather than focus on support and accountability to ensure such programs are indeed in place. And of course, with no continuity of funding the successful programs will fade and new and better ways of doing school will disappear off the agenda. The trickle of Gonski funding to date won’t mean much long term. It somewhat reminds me of the laggards who exist in every school who would respond to new ideas with ‘we tried that but it didn’t work’. Governments have thrown a few dollars at equity programs and gee, NAPLAN scores didn’t go through the roof. What’s the point!

    With the Gonski deck now clear Education Minister Birmingham will just revert to the toolbox of useless school fixes paraded by his predecessors on both sides of politics. There will inevitably be some attention to equity, accompanied by high rhetoric and low dollars. And, as Buckingham implies, extra funding will be presumably accompanied by pressure for assured tangible benefits, by itself not a bad thing.

    But the pressure to show these benefits will be placed on the struggling schools, even though much of existing expenditure is poorly distributed and not particularly effective. My School shows that private schools in Australia spend $4 billion more on their students than do similar government schools – but with almost no difference in measurable student results. At the moment the government share of this unproductive investment is around $1.5 billion. A nice little amount to divert to low SES schools.

    The abandonment of Gonski has much wider implications and is going to multiply the range of problems identified by Gonski, problems which have worsened in recent years. Here are a few which have emerged from my work with Bernie Shepherd and reported in Gonski, My School and the Education Market.

    1. Socio-educational gradients (SEGs) – key measures of school equity – have worsened. For all Australian schools the gradient shifted from 32% to 37% between 2010 and 2014. SEGs for some schools, for example secondary schools, have steepened even more than 5%.
    2. Student performance varies between states and sectors, but the most significant and under-reported trend is a flat-lining of achievement in higher socio-educational advantage (SEA) schools and a noticeable decline in lower SEA schools.
    3. The SEA difference in student enrolment in the different sectors continues, but the rate of recurrent funding increases per student have favoured sectors enrolling the most advantaged.
    4. The funding differences between the sectors has reached the point where, if current trends continue, the level of public recurrent funding of students in non-government schools will exceed the level of funding of students in similar government schools. Regardless of possible future trends, the current operation of all the school sectors must be reviewed.
    5. There are stark examples, within and especially between sectors, of a disproportionately high public and privately sourced expenditure on some schools which is not yielding a return in measurable student achievement.
    6. My School data reveals a significant difference between the level of SEA of schools and the equivalent measure of the communities in which schools are located. Recent research shows that this extends to the ethnic composition of school enrolments.

    As I repeat rather too often, at some stage we’ll feel the need to have a review of the mounting unsustainability of our framework of schools. In the meantime, buckle up for a ride back to the future.

     

     

     

  • John Menadue. What has the government done for us?

    Repost from 25/02/2015

    Many will recall in the Monty Python film, the Life of Brian, an anti-Roman revolutionary played by John Cleese, but who reminds me of Joe Hockey, asks rhetorically about the Romans, ‘What have they ever given us?’  Expecting the answer ‘Nothing’, he is irritated when he is told that they provided aqueducts. Cleese’s character slowly concedes further points, until he asks ‘Apart from the sanitation, medicine, education, wine, public order, irrigation, roads, fresh water system and public health – what have the Romans ever done for us?’  And still someone chips in with another suggestion of what the Romans have done.

    Clearly the Liberal Party holds a similar view to the anti-Roman revolutionary. Its platform says ‘That only businesses and individuals are the creators of wealth and employment’.

    The Commission of Audit in its highly ideological report assumes also that government and ‘red tape’ must be cut back.

    Like the John Cleese character, conservatives choose to ignore the great pioneering and continuing role of governments in our community and mixed economy – roads and railways, power, water and sewerage, law and public order, security, education, hospitals, galleries, museums and national parks.  I could go on!

    In world terms, we have a small public sector in Australia. Including all levels of government, our public sector is less than 35% of GDP. The OECD average size of government is over 40% of GDP. In the successful northern Europeans countries such as Germany, the Netherlands and the Nordics, the public sector exceeds 43% of GDP. And they have taxes to pay for their successful public sectors.

    Just think of what Norway has done in establishing its public Pension Fund. This fund now has $1 trillion in investment. The fund was established by the Norwegian government in the 1970s when Norway began to develop its oil and gas resources. If only we had done something similar to tax the super profits of mining companies in the recent mining boom. We would now have a stronger and more diversified economy. Instead we have companies like Rio Tinto returning $7.8 b to shareholders in a share buyback.

    The successful economies of the world have all invested heavily in the public sector to enhance human capital in areas such as education, science, research and development, and innovation. But in the name of economy and reducing waste, we are reducing government funding in these areas. We don’t even have a Minister for Science.

    No country has ever achieved greatness by cutting back on key government activities. This is not to say that the government sector should be large. But it should be effective and efficient.

    Just look at some of the false economies that are part of the current political environment in Australia that would damage the public sector and the public interest.

    • The government is considering cutting back the Australian Bureau of Statistics and possibly the five year census. But so much of ABS data is essential for good decision-making in both the public and private sectors.
    • We have cut back on policy and administrative skills in commonwealth departments and more and more we contract it out to so-called independent and professional management companies that have little or no corporate memory. One consequence of the scaling back of government expertise was the pink-batts mess.
    • The economists we see and hear so much of on TV are usually in the pay of big corporations and the banks. They are unlikely to give us an independent assessment in such areas as privatisation and superannuation. Cut backs in university funds have resulted in fewer intellectuals working in the public square.
    • Late last year the former Assistant Commissioner of the Australian Tax Office warned in a letter to the Australian Financial Review that repeated efficiency dividends had seriously hurt the ATO’s ability to collect tax. In the recent budget, the ATO had its funding slashed by $189 million with more than 3,000 jobs to go. With corporate tax avoidance almost endemic what a strange time to be cutting back ATO staff.  My mother would have said it was ‘penny wise and pound foolish’. Economists would call it a false economy.
    • The public sector is often more efficient than its private counterparts. For example, private health insurance firms have operating costs, including profit that are three times higher than Medicare.
    • Comparing ‘apples with apples’ public hospitals are as efficient as private hospitals. Schools in the public and private sectors that enrol similar students turn out much the same results
    • The derided ‘red tape’ is often the means to protect the public interest. No wonder private ideologues don’t like it.
    • Governments can borrow much more cheaply than private corporations, but it is seldom mentioned.

    We have been encouraged to forget that our prosperity is based on both public and private goods. To many people government has become ‘invisible’, except as a vehicle for welfare. Australians have lost sight of the contribution of the mixed economy, not only providing public goods, but also in ensuring that the forces of greed and short-sightedness don’t lead to economic collapse.

    It is noteworthy that despite the continued denigration of government and the public sector, the three most trusted institutions in Australia are public institutions – the High Court, the ABC and the Reserve Bank. In the survey by Essential Research, there was not a private group in the top eight most-trusted groups and institutions in Australia. The three least trusted groups were business, trade unions and political parties.

    There is a major and important role for governments to play. We need to assert the importance of the economic role of government in our mixed economy. We should stop apologising for government.

  • John Menadue and Peter Hughes. Slogans vs Facts on Boat Arrivals, Part 2

    Reposted from 23/09/2015

    Tony Abbott did not stop the boats

    In this blog yesterday (22 September 2015) we pointed out that Tony Abbott kept the door open for tens of thousands of boat arrivals by opposing legislation that would have enabled implementation of the Malaysia Arrangement in September 2011. By this action, he helped turn on the green light for people smugglers.

    Moreover, the data just does not support the claim that, after coming to power in September 2013, Tony Abbott “stopped the boats”. The media uncritically accepted the Coalition’s line in the confused period of the changeover of governments and in the context of drama and secrecy surrounding a small number of boat turn-backs.

    The data shows that the downward trend in boat arrivals began in August 2013. By October and November 2013 maritime asylum seeker arrivals had dropped by 90% compared to the corresponding two months in 2012 (547 arrivals versus 5115 arrivals). These reductions occurred well before the first boat turnaround by the Coalition Government on 19 December 2013. See table below:

    Number of illegal maritime arrivals who arrived in Australia by month            (1 January 2011 to 31 December 2014), by port arrival date.

     

    SIEVS/BOATS IMAs
    2011 January 3 223
    February 3 149
    March 7 419
    April 6 318
    May 6 333
    June 4 235
    July 4 228
    August 5 335
    September 4 319
    September Abbott failure to support Malaysian Arrangement
    October 5 259
    November 10 734
    December 13 1,070
    TOTAL 70 4,622
    2012 January 5 301
    February 9 849
    March 3 110
    April 11 837
    May 16 1,286
    June 24 1,642
    July 31 1,756
    August 37 2,078
    September 31 2,062
    October 47 2,452
    November 44 2,663
    December 18 1,017
    TOTAL 276 17,053
    2013 January 11 541
    February 17 973
    March 35 2,320
    April 47 3,329
    May 47 3,252
    June 40 2,750
    July 48 4,230
    19 July 2013 Rudd announcement not to settle IMAs in Australia
    August 25 1,585
    September 15 829
    October 5 339
    November 5 208
    December 7 355
    19 Dec 2013 First Abbott turn-backs
    TOTAL 302 20,711
    2014 January 0 3
    February 0 1
    March 0 0
    April 0 0
    May 0 0
    June 0 0
    July 1 157
    August 0 0
    September 0 3
    October 0 0
    November 0 0
    December 0 4
    TOTAL 1 168

    The source of this data is the Senate Select Committee on the Recent Allegations relating to Conditions and Circumstances at the Regional Processing Centre in Nauru: Submission 31 from the Department of Immigration and Border Protection (DIBP). Crew are excluded. 

    Note that the table refers to the number of ‘Illegal’ Maritime Arrivals (IMAs). ‘Illegals’ is not a term that we think is appropriate, but the term is used in the material from DIBP.

    Three measures put in place by the Labor Government before the election caused the dramatic fall in the number arrivals, (allowing for a short time lag).

    The first was “enhanced screening” of Sri Lankans and quick return of non-refugees to Sri Lanka.

    The second was a decision by Indonesia, at Australia’s urging, that Iranians could not enter Indonesia without visas.

    The third and most important was the announcement by Kevin Rudd on the 19 July 2013 that in future any persons coming by boat, who were found to be refugees, would not be settled in Australia. We may argue about the wisdom of that policy, but it effectively crippled the people-smugglers.

    Fortuitously for the Abbott Government when it was sworn in on 18 September 2013, the flow of maritime arrivals was well on its way to being finished as a result of measures already taken.

    By the time Operation Sovereign Borders geared up for its first boat turn-back on 19 December 2013, the number of boats was down from 48 in July to 7 in December.

    Operation Sovereign Borders was applied to the “tail end” of a phenomenon that had largely been stopped. The game-changer was Kevin Rudd’s announcement in July 2013.

    Arguably, boat turn backs would not have been ‘successful’ at all without the July 2013 decision. For example, the Navy and Customs were able to turn back three boats in December 2013. It’s hard to believe that it would have been physically possible to turn back 48 boats if they had continued to arrive at the monthly rate that occurred in July 2013 and that Indonesia would have quietly acquiesced.

    Tony Abbott’s role in “stopping the boats” was at the margins and vastly overrated.

    John Menadue was Secretary, Department of Immigration and Ethnic Affairs 1980-83. Peter Hughes was a senior officer in the Department of Immigration and Citizenship for 30 years until he retired as Deputy Secretary in 2011.

     

  • Jack Waterford. It’s time: The Dismissal gave us knockout punch politics, now we should get rid of it.

    One has to be of a certain (old) age to remember intimately, as I do, the tumultuous events of November 11, 1975. I knew then that I was being a witness to history and, sometimes, metaphorically pinched myself to be sure I remembered.

    Nearly 40 years on, it remains the most sensational event of Australian politics since federation, but it is now, for three quarters of the population something that happened before they were born or before they had the least interest in Australian politics.

    Paul Kelly, emeritus editor-at-large of The Australian, has issued or re-issued what must be the fifth update of his book about the Dismissal, each fresh version containing more material and documents from the player and the archives. He has written other books, some the size of house bricks, but perhaps his first, second, third and subsequent drafts of the history of 1975 are the best.

    This week he (and the co-author of the latest version, Troy Bramston) announced that they had fresh documentary material tending to suggest that the Governor-General, Sir John Kerr, had tipped the wink to Malcolm Fraser, Leader of the Opposition, before dismissing Gough Whitlam. They have a statutory declaration from Malcolm Fraser, a (relatively recently rediscovered) contemporaneous note of a phone call between Fraser and Kerr, and testimony from Sir Victor Garland, the last of the players in the room as Fraser was taking the call and scribbling down notes.

    The suggestion that Fraser knew what was going to happen is not new. There were always allegations of the wink having been given, in spite of explicit denials by Kerr. Reg Withers, who was leader of the opposition in the senate, said soon after he and Fraser fell out that Fraser had been tipped off, by Kerr, about his intentions. This meant that Whitlam, as Prime Minister, went into a final parliamentary confrontation with Fraser, and the ultimate meeting at Government House, where he was given a document sacking him, completely unaware that Kerr had already drafted his letters of dismissal. [Nor did Whitlam know, as several High Court judges did, that Kerr had taken advice about his actions from the Chief Justice, Sir Garfield Barwick, against explicit instructions from Whitlam himself.]

    Similarly, Fraser had said, once the event was ancient history, that Kerr’s questions to him, on the morning of the Dismissal, made him certain that Kerr was about to act to sack Whitlam and to appoint Fraser to lead a caretaker government pending a double dissolution election.

    Kerr, in his memoirs, agreed that he had called Fraser to confirm that the opposition’s refusal to grant supply “remained the same. But, he claimed “I said nothing to him about the situation”.

    By whatever version, it is fairly plain that Whitlam was ambushed, and had little idea of what Kerr had been contemplating. Supporters of Kerr defend Kerr’s secretiveness and deception on a reasonable fear, given things Whitlam had said, that if he had suspected Kerr planned to sack him, he would have rung the Queen at Buckingham Palace and had Kerr dismissed instead. In the selfless version of this, Kerr’s motive was not to save his own job, or skin, but to prevent the Queen getting involved in politics.

    The latest draft of the history adds weight to the idea that Kerr was a shit. He consciously deceived Whitlam. But I doubt that its new disclosures much alter whatever instinctive views people who remember had at the time. For some, the sacking was an assassination, a dastardly deed done to a legitimate (and wonderful) government. To others, the sacking seemed to be the deliverance of the Australian people (and the economy) from the greatest vandals and incompetents the nation had ever known.

    Merely proving that the actual story was a little more complicated than one thought at the time is unlikely, for most, to affect such emotional and passionate views of the time. For some on both sides, indeed, there had always been some sense that desperate times required desperate deeds, with means being judged by ends.

    I should think that most of those who were not born, or can’t remember the event, have at best only an intellectual curiosity in the points of detail. At worst they could not care less, because, even if they are dimly aware that it happened (as they are dimly aware of Gallipoli, or World War II, or the Spanish Armada, or the Vietnam War), they have no feel for how it has influenced events.

    I am one of the Whitlam sentimentalists who thought then, and still does, that Kerr should not have sacked Whitlam.

    But I have always parted company with the most ardent Whitlamites in that I never doubted, as they did, that a governor-general had the power, perhaps the duty, to dismiss a government which was unable to get parliamentary approval for its spending programs. My argument with Kerr is about his timing, about his judgment of events, and about his getting into the ring. A wiser man would have waited, and then, probably, nothing would have happened requiring his intervention

    I am bolstered in this opinion by the fact that Sir Paul Hasluck, a very good governor-general who had been a Liberal politician, thought much as I did, and, as it seems, so did most of the Queen’s constitutional advisers at Buckingham Palace. One does not, of course, know what HM thought, but the hint has always been that she did not approve.
    Whitlam, and both his attorney-general and solicitor-general, denied that a GG had the power to dismiss a government with the confidence of the House of Representatives. This was an arguable view, but far from the conventional one, and there were many, including former Labor leaders, who had never doubted this “reserve” power . Whitlam took too much for granted in assuming that Kerr saw himself as a mere constitutional rubber stamp of the government of the day.

    Whitlam’s righteousness and belligerence was bolstered by the way that Liberal and Country Party premiers, with some connivance from their federal colleagues, had stacked the Senate. Had convention been followed after (Labor) Senator Lionel Murphy had gone to the High Court and (Labor) Senator Bertie Milliner gone to his reward, they would have been replaced by Labor nominees, and Labor would have had the numbers to get its appropriation bills through the Senate. But NSW premier Tom Lewis and Queensland premier Joh Bjelke Petersen ignored convention, with the result that the Senate numbers involved, at best, a tie, at worst an opposition win. And, in the Senate, a tie is a defeat.
    Fraser said Coalition senators would not pass the supply bills unless Whitlam agreed to an immediate election of the House of Representatives. The Senate never actually refused supply; it simply failed to pass it. Fraser believed he had, in his own words, caught Labor “with its pants down”. The government was suffused in (Loans Affair) scandal, and there were murky insinuations of corruption, lying to Parliament, and moral turpitude. Heady days!

    Fraser was relying on legal advice, from a shadow minister who had been a former solicitor-general, as well as a top Sydney barrister later to become a governor-general, on what had to happen to a government which could not secure supply. This said that Sir John Kerr would have to act once it seemed likely that the government’s money would run out. Whitlam, by contrast, said the Senate had no business in refusing supply, and that he would govern on without its assent, if necessary by an elaborate system of bank IOUs.
    Until the money looked like running out, it was a political crisis, not a constitutional one.
    It was also a game of political chicken.

    Both sides pretended they would not give an inch, but there were clear signs of nervousness in Coalition ranks about how long the confrontation could go on. It is generally accepted that some opposition senators had been close to “cracking” – which would have almost certainly caused the political demise of Fraser. But Fraser kept his nerve, and refused even a late concession by Whitlam offering a half-senate election instead of a House of Representatives one.

    Kerr had made an offer to mediate between Whitlam and Fraser, meaning he had formal conversations with both sides alone and formally knew their thinking. But he had a number of conversations with Whitlam which had the effect of making Whitlam think Kerr was on-side.

    The strongest continuing criticisms of Kerr involve his deception of Whitlam and the argument that he acted before he had to. The political crisis had not reached the point of requiring vice-regal intervention. Kerr was thinking less of when the money would run out, and more of the last day in which there could be a pre-Christmas election, then, back-counting, the deadline for an election to be called. Given school holidays, and the effective impossibility of a January election, November 11 was the deadline for dissolving Parliament; if it were to be later, there could be no election, and, possibly no supply, until mid-February. That set his timetable.

    Supply crises were rare but not unknown in Westminster systems. But taking the chicken game to its ultimate conclusion has not been done, whether in Canada, Australia or its states, in other old British colonies.

    But it has now happened in Washington, though it had not (at least in any serious way) in 1975. If a president cannot settle a budget with both houses of congress, government can shut down, with many public servants having to be laid off, and many pensions and programs being in suspense. Generally this has led to major compromise by both sides, in the manner that America’s division of powers seemed to intend.

    Both Bill Clinton and Barack Obama have confronted very hostile legislatures and let their money run out. They have reasoned, as it turned out accurately, that the American public would blame legislatures if pensions were not paid and operations of government were allowed to grind to a halt. It’s been untidy, but effective politics. Here it may be – but is not yet – an argument that in a future crisis a governor-general might allow a Whitlam to carry on without supply (and without any nonsense about IOUs).

    Maybe preserving supply is not, from a governor-general or president’s point of view, the highest aim of government.

    But while one can regret that Whitlam was deceived, ambushed and politically destroyed, one must still criticise him for his blindness about his legal and constitutional position, and his willfulness about not covering his back.

    Fraser was the beneficiary, at least in the sense of winning three terms in government. But it came at a high cost, not least of political legitimacy, and friction in ordinary government and administration. A majority were for him, but a big minority was bitter and rancorous, determined, as Whitlam put it, to “maintain the rage”. The anger was such, sometimes, as to undermine that general consent of the governed without which ordinary government is next to impossible.

    And it set the stage for decades of practical politics – still happening – in which animosity between politicians from each side has been visceral, without any tendency for co-operation, compromise or sense of bipartisan national interest.

    If that was dying down by the end of the Howard era, after nearly all of the 1975 players had departed the scene, it gained new gall with the spirit that Tony Abbott brought into opposition and later into government. Hard, tough, vicious and highly personalised politics can lead to success, but, often, at a significant cost.

    Malcolm Fraser, on being elected prime minister, spoke hopefully of a time when politics was off the front page, and, perhaps, sport dominated the news. That was never allowed him because of the abrasive way he had played the game, and the unsporting manner in which he had gained power. Likewise, John Howard wanted a more relaxed and comfortable Australia, but his own sense of running affairs on full choke made the relaxation of his enemies impossible. Neither Malcolm Turnbull nor Bill Shorten (or, I guess, soon Mark Dreyfus) are so focused on the knockout punch, shirtfronting, or running out the person at the bowler’s end.

    It’s time.

    Jack Waterford was formerly Editor in Chief of the Canberra Times. He is now Editor at Large of the Canberra Times. This article was first published in The Age on 6 November 2015.

  • John Menadue and Peter Hughes. Slogans versus facts on boat arrivals. Part 1

    Reposted from 22/09/2015

    How Tony Abbott helped to keep the door open for people smugglers.

    The ABC provided us with excellent coverage of the Turnbull-Abbott shoot out, but the various commentators still swallowed the myth that Tony Abbott stopped the boats. That is a great piece of spin, but the reality is different.

    This blog on 26 July 2015 argued that Tony Abbott did not stop the boats. The game changer was the announcement by Kevin Rudd on 19 July 2013, two months before the election, that any persons arriving irregularly by boat would not be settled in Australia. Boat arrivals fell quickly and dramatically as a result of this announcement, coming on top of other measures the Labor government had already taken. We will update that blog in the next day or so in Part 2.

    For the present, however, our argument is that Tony Abbott kept the door open for tens of thousands of boat arrivals in the first place. His failure to support the Malaysia Arrangement in September 2011 resulted in the surge of boat arrivals over the next two years.

    Consider key dates. In May 2011 the Australian and Malaysian governments announced an ‘in principle’ arrangement that up to 800boat arrivals would be transferred from Australia to Malaysia for their asylum claims to be heard and, in response, Australia would be prepared to accept 4,000 refugees from Malaysia. The arrangement with Malaysia was signed on 25 July 2011. The United Nations High Commissioner for Refugees (UNHCR) gave it qualified support.

    At that stage, people arriving irregularly by boat were running at about 2-300 per month. The table below shows the numbers at that time and what followed in the following 28 months.

    Number of illegal maritime arrivals who arrived in Australia by month            (1 January 2011 to 31 December 2014), by port arrival date. 

    SIEVS/BOATS IMAs
    2011 January 3 223
    February 3 149
    March 7 419
    April 6 318
    May 6 333
    June 4 235
    July 4 228
    August 5 335
    September 4 319
    September Abbott failure to support Malaysian Arrangement
    October 5 259
    November 10 734
    December 13 1,070
    TOTAL 70 4,622
    2012 January 5 301
    February 9 849
    March 3 110
    April 11 837
    May 16 1,286
    June 24 1,642
    July 31 1,756
    August 37 2,078
    September 31 2,062
    October 47 2,452
    November 44 2,663
    December 18 1,017
    TOTAL 276 17,053
    2013 January 11 541
    February 17 973
    March 35 2,320
    April 47 3,329
    May 47 3,252
    June 40 2,750
    July 48 4,230
    19 July 2013 Rudd announcement not to settle IMAs in Australia
    August 25 1,585
    September 15 829
    October 5 339
    November 5 208
    December 7 355
    19 Dec 2013 First Abbott turn-backs
    TOTAL 302 20,711
    2014 January 0 3
    February 0 1
    March 0 0
    April 0 0
    May 0 0
    June 0 0
    July 1 157
    August 0 0
    September 0 3
    October 0 0
    November 0 0
    December 0 4
    TOTAL 1 168

    The source of this data is the Senate Select Committee on the Recent Allegations relating to Conditions and Circumstances at the Regional Processing Centre in Nauru: Submission 31 from the Department of Immigration and Border Protection (DIBP). Crew are excluded. 

    Note that the table refers to the number of ‘Illegal’ Maritime Arrivals (IMAs). ‘Illegals’ is not a term that we think is appropriate, but the term is used in the material from DIBP.

    On 31 August 2011 the High Court found against the Minister for Immigration and Citizenship’s powers to transfer people to Malaysia under the Arrangement. In response, on 21 September 2011, the Gillard government introduced legislation – the Migration Amendment (Offshore Processing and Other Measures) Bill 2011 – which was designed to modify those parts of the Migration Act which caused the problem in the High Court. There was strong opposition to the Bill in the House of Representatives by the Coalition led by Tony Abbott and Scott Morrison who were bitterly critical of Malaysia. Bandt (Greens), Katter and Wilkie also opposed the Bill. Oakeshott said he would also oppose the Bill if there were not specific amendments. As the Bill was doomed, the government decided not to proceed with the legislation. (It was subsequently passed by the parliament in August 2012 after the Houston Report).

    There were some lags in the response of asylum seekers and people smugglers to gear up to the opportunities the Coalition and others had left open for them. The timing of boat arrivals were also affected by bad weather and heavy seas, typically in the period December-March.. Surges of people  of different ethnic background can also change the dynamics of people flow. But it is clear that after the legislation stalled, there was a substantial increase in boat arrivals, particularly from Sri Lanka and Iran. People smugglers saw the High Court decision and the failure of the Australian Parliament to amend the Migration Act as a clear signal that their business could proceed.

    From November 2011 monthly asylum seeker arrivals began to trend up again. In the month of May 2012 they reached 1286 and, allowing for seasonal variations, kept rising inexorably to a monthly peak of 4230 in July 2013.

    The Coalition had made clear its opposition in every possible way to the Malaysia Arrangement. That left the way open for a dramatic increase in boat arrivals.

    The Coalition under Tony Abbott was not interested in stopping the boats at that time. Its primary interest was to stop Labor stopping the boats – and they succeeded. Wikileaks revealed that a key Liberal Party strategist in 2009 told the US Embassy that ‘the more boats that come the better’.

    Political objectives drove Tony Abbott’s actions with little regard for the national interest and or the government’s attempts, in cooperation with Malaysia, to start building a regional cooperation framework to manage boat arrivals.

    There can be no doubt that the implementation of the Malaysia Arrangement, in the context of the numbers at the time, would have stopped the flow of maritime arrivals. It simply removed all incentive to make the last leg of the journey. It is unlikely that all of the 800 places would have been used. Coalition turn-backs have amounted to less than 700 people over a period of two years according to a recent announcement by the Minister Dutton.

    Tony Abbott must bear some responsibility for the more than 32,000 people who arrived irregularly by sea between September 2011 when he frustrated the Malaysia Arrangement and mid-2013 when harsher measures were reluctantly taken by the Labor government.

    As we mentioned above, we will also be updating an earlier blog that shows that Tony Abbott’s actions after the 2013 election were not the key to stopping the boats. The new Abbott Government dealt with the tail end of a dramatically reduced flow of people, but the real game changer was the announcement by Kevin Rudd on 19 July 2013 that any further boat arrivals would not be settled in Australia.

    The secrecy and drama surrounding a small number of boat turn-backs created the impression that they were the decisive factor, but, it’s time for a cooler assessment of the facts.

    John Menadue was Secretary Department of Immigration and Ethnic Affairs 1980-83. Peter Hughes was a senior officer in the Department of Immigration and Citizenship for 30 years until he retired as Deputy Secretary in 2011.

     

  • What is the driving force behind Jihadist terrorism?

    In this article, (link below) Olivier Roy identifies the patterns of radicalism which have led to terrorism. He describes these patterns

    • Frustration and resentment against society seems to be the only psychological trait they share.
    • The majority of the radicals come from second generation Muslims born in Europe
    • Many have histories of petty delinquency and drug-dealing.
    • It is clearly a youth movement.
    • Very few of them have a history of militancy, either political or religious.
    • There is an unusually high proportion of converts.
    • The more recent pattern is the recruitment of young women to marry jihadists.
    • The main motivation of young men joining jihad seems to be the fascination for a narrative.
    • The revolt is expressed in religious terms.
    • Radicals have a loose or no connection with the Muslim communities in Europe.

    Olivier Roy suggests that the aim of policies should be to accentuate the estrangement of radicals from the Muslim population and to dry up the narrative of Islam as the religion of the oppressed.

    I first saw this article reproduced in ‘Inside Story’ on 18 December 2015.

    http://insidestory.org.au/what-is-the-driving-force-behind-jihadist-terrorism

  • ISIL is really a revolt by young Muslims against their parents’ generation.

    In Quartz on 7 December 2015, Australian journalist, Emma-Kate Symons, shines a particular light on young Muslim terrorists. She argues that ISIL is really a revolt by young Muslims against their parents’ generation. We have seen that many times on numerous issues – younger people who reject the values and materialism of earlier generations.

    See link to article below.

    http://qz.com/562128/isil-is-a-revolt-by-young-disaffected-muslims-against-their-parents-generation/

  • Magical thinking about ISIS.

    Adam Shatz is the contributing editor at the London Review of Books. He lives in New York. In this article he says

    ‘The attacks in Paris don’t reflect a clash of civilisations, but rather the fact that we really do live in a single, if unequal world, where the torments in one region inevitably spill over into another, where everything connects, somethings with lethal consequences.  … For all its medieval airs, the caliphate holds up a mirror to the world we have made, not only in Raqqa and Mosul, but in Paris, Moscow and Washington.’

    See link to article below.

    http://www.lrb.co.uk/v37/n23/adam-shatz/magical-thinking-about-isis

  • John Menadue. Drownings at sea.

    Repost from 22/04/2015

    The recent tragic loss of 800 Libyans in the Mediterranean has given once again an opportunity for the Government to infer that Australia’s refugee policies are designed particularly to stop people drowning at sea.

    It is self-deception or worse for the Government to suggest that its policies towards refugees have been motivated by humanitarian concerns and not political advantage. Perhaps with guilty consciences self-deception is necessary.

    In Opposition the Coalition was not interested in stopping the boats to save people drowning at sea. Its political objective was to stop the Labor Government stopping the boats. That is why the Coalition with cooperation from the populist Greens voted in the Senate against amendments to the Migration Act which would have allowed the Malaysian Arrangement to proceed and curb boat arrivals, in cooperation with UNHCR. By frustrating the government, the Coalition showed no interest in stopping drownings at sea.

    On 10 December 2010 the SMH reported from Wikileaks that ‘A key Liberal Party strategist’ had told a US diplomat in Canberra in November 2009 that the issue of asylum seekers was ‘fantastic’ for the Coalition and ‘that the more boats that come the better’. With such a cynical approach, it’s hard to see much concern for innocent asylum seekers who might drown at sea.

    Scott Morrison told us on many occasions that asylum seekers bring disease, everything from TB to Hepatitis C, to Chlamydia and Syphilis. He told talk-back radio that he had seen asylum seekers bring wads of cash and large displays of jewellery. He urged the Coalition to ramp up its questioning … to capitalise on anti-Muslim sentiment. Does that sound like genuine concern for the lives of asylum seekers?

    Scott Morrison and Senator Abetz both called for the registration of asylum seekers moving into residential areas on bridging visas, just like paedophiles. Does that sound like genuine concern for asylum seekers?

    To provoke hostility to asylum seekers, Tony Abbott and Scott Morrison both continue to call asylum seekers ‘illegals’. They hope that we would think that asylum seekers were akin to criminals. That didn’t show much concern for the rights of asylum seekers.

    The Coalition’s campaign to demonise asylum seekers was overwhelmingly for political reasons. They succeeded.

    But please spare us the propaganda of suggesting that the Coalition’ policy on refugees was to stop drownings at sea.  It was not. It was crass and cruel politics.

  • Richard Woolcott. Australia’s role is in our region.

    There is no doubt that Malcolm Turnbull’s visit to Indonesia and his and Lucy’s contacts with President Jakowi and his wife have very substantially improved the situation between Indonesia and Australia that existed before Malcolm’s visit.

    The most recent and important meeting was between the Indonesian Ministers for Foreign Affairs and Defence with our Ministers for Foreign Affairs and Defence.  This meeting of the “two plus two”, as it is called and the press conference which followed underlined how the situation between Australia and Indonesia has changed and substantially improved.  This does not mean however that there are no on-going differences.  It was clear from the responses to the questions at the press conference that Indonesia, which is not a claimant state, is very careful not to adopt a negative attitude towards China’s activities in the South China Sea.  Both the Indonesian Foreign Minister and Defence Minister made it plain that all countries in the region shared an important interest in a stable peaceful approach to claims.

    Both the Indonesian Ministers for Defence and Foreign Affairs made it clear that they wanted Australia to maintain firmly the position that West Papua was a part of Indonesia.  The Australian Ministers in response to these comments indicated that Australia acknowledged West Papua as a part of Indonesia.  This does not entirely rule out Indonesian fears that we may over time change our position as we did in respect of East Timor.  But  East Timor had never been a part of the Dutch East Indies, as was the case with West Papua.

    My considered view is Australia needs to refocus on the important interests in our own Region – South East Asia, North Asia and the South West Pacific in what is now generally called the Asian Century.  Former Indonesian Ambassador to Australian Sabam Saigian and currently the Editor in Chief of the Jakarta Post wrote earlier this year the blunt commentary that “Australia is still stuck in the 20th Century mode.  It is a Monarchy with a Head of State in London and its security arrangements are largely Cold War relics…..Australia is out of sync with the emerging geo-political environment of Asia today”.

    I do consider we need to establish an updated and more balanced approach to the vital relationship between the United States and China.  There is a danger that adversarial attitudes towards China could become a self fulfilling prophecy.  The present debate on China mainly assumes that Australia has no choice but to support American primacy in Asia against the perceived rising Chinese hegemony, something which Xi Jinping has always denied.  Former Prime Ministers Hawke, Keating and the late Malcolm Fraser as well as most former Ambassadors to China and a number of academics can be expected to resist American” hegemony“ although they accept a cooperative and constructive United States role in Asia.  In my view Australia should not take sides on China Japan disputes or on rival territorial claims.  Our focus should be on unimpeded passage through international waters and trade routes.  Provocative actions by all claimants should be avoided.  Malcolm Turnbull was in his very recent visit to Japan cautious in this respect and very firm in opposing the resumption of whaling by Japan.

    Turning to the Middle East we should acknowledge that while there were reasons for joining the US led invasion of Afghanistan in 2002, fourteen years later with forty Australians killed, over five hundred billion dollars spent and more than thirteen thousand Afghan civilians killed on objectives once deemed to be indispensible such as national building and effective counter insurgency have been downgraded or abandoned because there are  no longer adequate resources, time or even a clear US will to achieve them.  Polls suggest that the US public  opposes US ground forces being involved in further conflicts in the Middle East.

    Australia needs a fundamental change in our national psyche focused more on Asia than on our well established links with the United States, United Kingdom, Canada, New Zealand (the “anglosphere”), and Europe.    We need a much more sustained conversation with our neighboring countries in Asia and the South West Pacific.

    Essentially terrorism has to be dealt with in each country, although discussion on dealing with it internationally can be useful and there was evidence  of new discussions between the AFP and the Indonesian police ,, although the Indonesian Foreign Minister did say that Indonesia wanted to check some of the information which they had received from the AFP.

    In the long term no bi-lateral relationship will be more important to Australia than that of Indonesia.  The stability, unity and economic growth of a predominantly (81%) moderate Muslim nation of two hundred and fifty million people stretching across our north and trade routes a distance from Broome to Christchurch in New Zealand is vital to Australia.

    There is some discussion in New York at present about an Australian interest in the Secretary Generalship of the United Nations, at present held by Ban Ki-Moon.  This will come up in the middle of next year.  It would normally be for the Eastern European group to nominate a candidate but there is some doubt that they will be able to agree on a candidate.  Although he publicly says he is not a candidate, it is quite widely regarded that Kevin Rudd is interested in the position and is privately working on securing it.

    We are to some extent locked into participation in the Middle East through our cooperation with the present Iraq Government and our role in support of British air activity. The essential fact however is that Australia cannot influence the outcome of the kaleidoscope  of changing activities between extremist Shiites,  Sunnis and Kurds and a range of countries with different objectives including Saudi Arabia,  Iran, Russia, Syria, Turkey, Israel, China and the Yeman.  Because our role is symbolic in that it will not lead to a solution in the foreseeable future, it would be desirable for Australia to withdraw from the enormously complex situation in the Middle East and focus our attention on our region of the world when we can do so.

    Tony Abbott on a number of occasions said that the first duty of a PM was to increase the safety of the Australian people.In fact his approach has made the Australian people LESS safe.

  • Spencer Zifcak. Co-opting the Judiciary: Counter-Terrorism Laws at Work

    Regrettably, one matter that has drifted to the sidelines in Australian debates about the operation of counter-terrorism laws is that these laws consistently marginalise and undermine the role of the judiciary. Judicial power, and hence the rule of law, is being incrementally distorted and diminished.

    Counter-terrorism law continues to burst from the executive and the legislature.   Just a few months ago, three enormous tranches of such law swept through the parliament. These were the National Security Legislation (Amendment) Act protecting and preventing disclosure of information about special intelligence operations; the Foreign Fighters Act; and the metadata legislation.  (See my chapter on Counter-terrorism and human rights in this blog on 28/05/2015.)

    Now, only months later, three more counter-terrorism laws have passed or are imminent. These are a law to strip dual-nationals involved in terrorist activity of their citizenship; one to imprison people convicted of terrorist offences indefinitely; and another to extend the application of control orders to children as young as 14. In each of these instances, the proper exercise of judicial power is, to a greater or lesser extent, being compromised.

    Take first the citizenship-stripping law. What this does is remove Australian citizenship from any dual-national suspected of engagement with terrorism. Whether or not a suspected individual will have their citizenship revoked is made a matter for executive government. This is so, even though revocation is plainly punitive.

    Traditionally, a person suspected of engaging in criminal activity would be charged and tried. If found guilty, it would be for a court of law to determine an appropriate penalty. Under the rather remarkable new scheme created by the citizenship law, however, the judiciary is cast aside. Revocation is to occur automatically once it is determined that the prohibited behaviour has occurred.

    The scheme is remarkable because this legislation is silent upon the question of who is to decide that terrorist activity has occurred. In a previous draft, the Minister was given a role. But that would have breached the separation of powers by empowering a Minister rather than a judge to decide matters of fact and law and to impose a punishment.

    So, the automaticity mechanism was created instead. A person’s citizenship will be revoked automatically upon engaging in conduct defined with reference to enumerated terrorism offences in the Criminal Code.

    The legislation applies only to cases where the person concerned engages in the relevant conduct outside Australia or where the person has left Australia before (s)he has been tried for the offences alleged. The mechanism is not to be used against a person in Australia and, therefore, available for trial. This narrowing of the legislation’s scope is welcome.

    From thereon, however, the process is a mess. Revocation is said to occur instantly upon a determination that the terrorist activity has been engaged in. But there is no one identified to make that determination.

    Instead, it appears that the law will apply itself. This is a constitutional novelty. How it could work in practice is anyone’s guess. The High Court will have something to say about it.

    If a fair and considered decision is to be made as to whether a person has engaged in a prohibited activity and is to be punished for it, in our system of government that is a decision that should be in the sole province of the judiciary. It is not to be left to some uncertain, mysterious and secretive intra-governmental process.

    At the recent meeting of the Council of Australian Governments, the Prime Minister and the State Premiers agreed to introduce uniform State laws to provide for the indefinite detention of people convicted of terrorist activities. Indefinite detention may be authorised where it is determined that a relevant person is due for release after serving a term of imprisonment but remains a potential threat to national security.

    There is precedent for the establishment of a regime of indefinite detention. Several States have laws providing for the continuing detention of serious sexual offenders and others convicted of serious acts of violence. Somewhat surprisingly, the High Court has decided that such laws are constitutional.

    The problem with indefinite detention laws, however, is that they require State Supreme Courts to engage in deliberations that are not traditionally regarded as part of the proper exercise of judicial power. Judicial power is the power that courts have to decide upon controversies between contesting parties on the basis of pre-existing law. The existence of some pre-existing law as the basis upon which legal disputes are to be resolved is normally regarded as essential.

    In laws providing for indefinite detention, however, legal criteria for decision are absent. Instead, what the court is asked to do is make no more than an educated guess as to whether past criminal behavior is likely to be repeated at some time in the future. How is a rigorous judgment to be made that a person convicted of a single terrorist offence, say a decade ago, remains a threat to national security after the effluxion of that time?

    Psychiatric and psychological research has demonstrated consistently that predictions as to dangerousness are notoriously unreliable. And that is even where the people making those predictions are experts in the field. Judges are not.

    That is why Justice Michael Kirby dissented in the constitutional case. He said that courts should apply punishments only in relation to criminal acts committed in the past. Judges, he said, should not be co-opted into imposing penalties “for crimes that are feared, anticipated or predicated to occur in the future on evidence that is notoriously unreliable and otherwise would be inadmissible, and by people who do not have the gift of prophecy.”

    If prisoners have committed a crime while imprisoned, whether of incitement to violence, conspiracy, threat, intimidation, the infliction of actual physical harm or some other similar offence – charge and try them. If guilty, impose a new sentence.

    If not, they should be released upon the completion of their prescribed term of imprisonment, under surveillance and subject to notification requirements if necessary. And that way, the judiciary will not be required by law to perform functions that are alien to it.

    Finally, there are control orders for children. In Australia, control orders have been part of the counter-terrorism mosaic for several years. They have almost never been used. The former Independent National Security Legislation Monitor, Brett Walker SC, has cast doubt on their effectiveness. Britain recently dispensed with them.

    Control orders may be imposed upon a person where it is anticipated that the person affected may engage in terrorist activity. The controls imposed may include a prohibition on the use of electronic communications, a ban on meeting certain people or doing certain things, restrictions upon movement, and even house arrest.

    The problem here, again, is that the judicial procedures associated with the imposition of control orders are unusual and unfair. A court may issue a control order in a secret hearing and in the absence of the person subject to it. The person will know nothing about it until he or she is arrested and served with the order. Neither the subject of the order nor their legal representative is provided with a full brief of the evidence against them. Without access to the evidence, the prospects for a successful appeal are minuscule. The judge hears only one side.

    The application of such a draconian process and penalty to a 14 year old child is hardly to be contemplated. It may reasonably be anticipated that such a partial procedure is as likely to alienate and radicalise a young person as it is to rehabilitate them.

    Speaking of this expansion of the control order regime, the former Independent National Security Legislation Monitor said recently that ‘I have a well-known opposition to control orders as, I think, a distraction from what is the fundamental task of the criminal law of investigation, prosecution and, if there’s a conviction after trial, sentencing.”

    There is a better solution to the problems these new laws attempt to address. It can be summarized in three words: ‘charge or release’. We give investigation, prosecution, trial and conviction away at our peril.

    Spencer Zifcak is Allan Myers Professor of Law and Director of Research at the Academy of Law, Australian Catholic University.  He is immediate past president of Liberty Victoria.

     

     

     

  • Ray Markey. The myths surrounding penalty rates.

    The article below by Professor Ray Markey was posted before the release of the recent Productivity Commission Report on penalty rates.

    Following the release of the report, Professor Markey commented as follows:

    ‘The Productivity Commission report presents no new evidence for increased employment from reduced penalty rates. Mainly there are theoretical economic arguments and modelling based on it. Time use survey data is very selectively cited and dated anyway since the last survey was in 2006. It clearly shows that people prefer weekends for being with family and friends and does not refer to studies showing it is difficult to make up during the week for this weekend time being lost due to work. The one new argument in the report is very interesting, namely that the onus of proof about the impact of reduced penalty rates on employment should be reversed i.e. employers shouldn’t have to prove this is the case to get changes – clearly an admission of a lack of evidence.

    It is tiring to hear penalty rates linked with productivity as the minister responsible, Senator Cash, did on radio this morning. It has nothing to do with productivity and neither the Productivity Commission nor the main employer submissions made this claim. Productivity increases would require increased output relative to inputs (labour). Reducing penalty rates will increase employer income and potentially profits, but it is inconceivable how it affects productivity positively. If the argument that employment will increase as a result of reduced penalty rates is true, it may have a negative impact on productivity. Cheaper labour costs certainly provide incentives for employers not to engage in innovation to increase productivity and this is the trap for low wage economies such as New Zealand, where they struggle with lower productivity than Australia and lower wages. Reducing penalty rates, therefore, is a distraction from the Prime Minister’s focus on an innovation agenda.’

     

    In the current review of modern awards before the Fair Work Commission, employers are challenging the level of penalty rates. At the same time, the Productivity Commission says excessive penalty rates for Sundays reduce hours worked, mean unemployment is higher than it needs to be, and reduce options for businesses and consumers. It wants Sunday penalty rates in some sectors to be set at the Saturday rate.

    A penalty rate for Sunday work was first implemented in Australia for working “unsocial” hours in 1919. The 1947 ‘Weekend Penalty Rates Case’ expanded penalty rates to Saturdays, while Sundays were set at a rate of double time. Later decisions specified that workers would need to be compensated for the loss of opportunity for family life and social time resulting from weekend work.

    More than 60 years on, employers argue the world has changed. It has, but many of the arguments employers make are not supported by the evidence.

    Myth 1: Given extended trading hours, it’s no longer abnormal for people to work weekends

    Most employees still do not work unsocial hours. According to the Australian Work and Life Index, 38 per cent of workers work unsocial hours; only 32.2 per cent of workers work weekends and 18.9 per cent of workers work evenings after 9pm regularly. These figures include the 13.1 per cent of workers who work both evenings and weekends regularly.

    Myth 2: It’s only young single people that work weekends.

    While being single with no children is more common than other family types among these workers, they are not a majority: there are also many couples both with and without children, and sole parents.

    Women are also more likely than men to work weekends. HILDA data indicates that only 22 per cent of male and 21 per cent of female weekend workers were dependent students; in other words, 78 per cent of all weekend workers were not dependent and pay their own bills.

    Myth 3: The disadvantages of working weekends are only bad for those who work very long hours.

    Employers argue that the adverse effects associated with working weekends are only relevant to those who work very long hours, and that the days and times themselves are no longer relevant, either because people no longer engage in the activities which previous decisions attempted to protect, or because these activities can be made up on other days and at other times.

    But those who work on weekends do so at the sacrifice of time with friends and family, time which cannot be simply made up through time spent at other times during the week. This is particularly acute on Sundays, which remain a time for spending time with family. In spite of claims to the contrary, the differentiation between Saturdays and Sundays remains relevant in modern Australian society.

    In general, the recompense of penalty rates is the key reason for willingly working weekends; with far fewer doing so to meet their own flexibility needs. However, the experience of the Work Choices era, and the importance and power of employer expectation, does suggest that many employees would not, in the absence of penalty rates, be able to avoid weekend work due to fear of losing their jobs, and indeed employees being forced to work weekends for no extra pay seems the most likely consequence of removing penalty rates.

    Myth 4: Those who work in industries that pay penalty rates are not low paid.

    Many workers on penalty rates are among the low paid. According to the Australian Work and Life Index, 37.8 per cent of workers who work weekends only and receive penalty rates rely on these to meet household expenses. This increases to 48.8 per cent for those working both evenings and weekends, and 52.2 per cent for Sundays only.

    Myth 5: Reducing or eliminating penalty rates would increase employment.

    The empirical evidence for increased employment as a result of reducing penalty rates is non-existent. Employer arguments have been based essentially on economic theory, which is merely hypothesis in the absence of empirical confirmation. What may be relevant in terms of the impact of wages on employment is that none of the available empirical evidence suggests minimum wages have a significant effect on net employment, a point reiterated by the Productivity Commission.

    While some studies do suggest a substitution effect, this would be a matter of balancing one set of employed workers against another — older workers versus youth. However, a number of studies suggest no effect at all, and some suggest a positive effect.

    Given the evidence, it is difficult to see any benefits likely to accrue from the abolition or reduction of penalty rates for employees, employment levels or greater availability of services to the public.

    Professor Ray Markey is Director of the Centre for Workforce Futures.
    This article was originally published on The Conversation on 2 December 2015.

  • John Menadue. Our innovation-averse business culture

    Malcolm Turnbull’s Innovation statement sounded new, but was it? So much of what he said used to be called industry policy-technology parks, offsets, defense technology, support for inventors, and quality assurance. But Malcolm Turnbull dwelt particularly on the need for cultural change in business.

    I think that was new. He said that Australian businesses should be more willing to take risks and less fearful of failure. Many times he said that cultural change in business is essential. He is right.

    We do have a risk-averse business culture. And our society is much the same. We want to be comfortable. After all that is what John Howard urged us to become.

    In 2008, Dr Terry Cutler produced a Green Paper ‘Adventurous Australia’ for the Rudd Government. Following his disappointment with the Rudd government’s response on innovatio he said

    ‘Too many of our business owners or manager have what we might describe as a life-style approach to business. Even many of our so-called business success stories look like under-performers when bench-marked globally. This lifestyle model of business strategy imposes a false ceiling on ambition. Success is having the designer car in the garage and a holiday home or two. … At a recent forum, I actually heard people saying they didn’t need to expand or export because they were doing it quite comfortably as things are.’ 

    In 2012, David Gruen, Deputy Secretary of Treasury said

    ‘Management practices in Australia are mid-range. … We are well below top performers like the US, Germany, Sweden, Japan and Canada, but more similar to France, Italy and the UK. … Australia, like some other countries has a somewhat larger tail of companies with relatively poor management performance.’ 

    In August last year the Governor of the Reserve Bank told a Parliamentary committee that Australian companies were “too risk averse’ in focusing on sustaining a flow of dividends and returning capital rather than investing in future growth.

    We have been told many times about our risk averse business culture. Research and analysis confirm this.

    For example, in association with The Conversation, Roy Green, the Dean of UTS Business School and drawing mainly on OECD data, points to the following problems.

    • Australia still has a long way to go to catch up to its regional and global counter-parts in innovation. We trail well behind China, ROK and Singapore.
    • Australia’s pivot to a digital economy has stalled.
    • Venture capital investment has turned around in countries like the US, South Africa and Hungary, but in Australia it fell significantly between 2009 and 2014.
    • Australia has done little in the past ten years to lower barriers to entrepreneurship.
    • Australian businesses lack a high performance innovation culture.
    • Australia performs poorly on collaboration between the business and research sectors.

    These problems are highlighted in failure of regional linkages. Despite our heavy economic dependence on our region, our business sector has been very slow to respond. It gives lip service to building Asian expertise. But I have yet to learn or meet a board member or a senior executive of any of our top ASX 200 companies who can fluently speak a language of our region. How can we really cooperate well on innovation or indeed many other business areas with such an impediment! Those 200 companies would have over 3,000 senior executives and board members, but no Asian language expertise. That is quite extraordinary. It tells me a lot about business complacency The white male directors’ club keeps appointing people like themselves. They are comfortable as they are in their Anglo comfort zone. But comfortable people are unlikely to be good at innovation

    What is most indicative of the lack of innovation, risk-taking and entrepreneurial flair is the way our Business Council of Australia and other employer groups are invariably pressing governments to change economic policy and industrial relations in their favour. Now they are pressing for reduced company and individual tax and changes in penalty rates. Why don’t they concentrate on managing their own business instead of lobbying governments to fix their problems? They should stick to their knitting.

    So much business energy was spent lobbying against a carbon tax or an ETS that we have missed a decade in developing a new economy based on renewable energy. Many of our entrepreneurs in this field have gone overseas.

    It is not as if our business executives are poorly paid. They are extremely well paid but too often the salary packages are geared to short-term results rather than medium or long term results. Innovation takes time.

    Too often we all become complacent. We acknowledge a problem, take some remedial steps and then go on ‘smoko’ again.

  • Laurie Patton. Data Retention: How not to introduce complex legislation.

    One of my first tasks shortly after joining Internet Australia (nee ISOC-AU) was to front the Parliamentary Joint Committee on Intelligence and Security (PJCIS). Our appearance at the hearing into the (Telecommunications (Interception and Access) Amendment (Data Retention) Act 2015) came at the end of a long day of mostly opposing submissions.

    With our president and the head of our policy committee sitting beside me I boldly told the committee that the Data Retention Bill was “fundamentally flawed” and had clearly been drafted by lawyers who didn’t understand how the Internet actually works. How prescient those comments have proven to have been.

    We highlighted the Internet’s critical role in our emerging digitally enabled economy and the danger in legislation that might cause people to lose trust in the Internet. We reminded the PJCIS of the debacle, back in March 2013, when ASIC’s well-meaning attempt to block a few shonky online operators had inadvertently shut down more than 1000 innocent websites.

    We noted that international experience has not found data retention schemes to have had much effect. Indeed, during the limited public debate that accompanied the passing of the Data Retention Bill certain high profile individuals took to the media to explain the many ways that determined wrongdoers, or even completely innocent people, can easily bypass the long arm of the data retention law.

    At the committee’s behest, we subsequently provided a confidential briefing paper listing some of the more significant problems with the legislation. When it brought down its report there were 39 amendments recommended, all of which were agreed to by the government and the opposition. Unfortunately, as is the way with these things, the PJCIS did not put its mind to the more difficult question of how to deal with the serious drafting issues we warned them about. Then, nor did the Attorney General’s Department.

    No-one knows how many Internet Service providers (ISP’s) there are in Australia. This is because there is no requirement for ISP’s to be licensed. Estimates range from around 250 to more than 500. With few exceptions, each of these is required to comply with the Data Retention Act. This involves reconfiguring their internal IT systems and then storing a good deal of information that was previously discarded immediately after its use, or not long thereafter. They are required to keep it for two years. For large telcos this is probably not a major issue. However, for some smaller independent ISP’s, especially those in regional areas, the cost of complying could be so onerous as to see them go out of business.

    Also appearing before the PJCIS hearing late in 2014, a senior Telstra executive warned that we would be creating “honeypots” – large masses of private and confidential data that would be very enticing to hackers.

    The journalists union, the MEAA, raised its fear that the legislation would be used to identify sources, pointing to the important role that “whistle blowers” often play. At the last minute the media companies secured what some thought was a form of protection. Before they can use a journalist’s data law enforcement agencies must seek a court warrant. However, it is arguable that by the time they’ve trawled through the honeypots and subsequently discovered that the data belongs to a journalist they will have enough prima facie evidence to justify a warrant.

    Nine months after the Data Retention Act received Royal Assent the implementation process is in disarray. It is likely that implementation is at least another year away. So much for a law that was needed urgently!

    The drafting of the Data Retention Act is so complex and fundamentally flawed that there remains, after months of consultations and discussion with the Attorney General’s Department, widespread confusion and even some disagreement about what it requires of ISP’s.

    Telstra, Australia’s biggest ISP, found the going too tough; seeking and receiving an 18 months extension on its requirement to comply. So imagine how the rest of the industry is going.

    There is no guarantee that we will ever get to the point where all ISPs (however many there might be) are complying. And probably no way for the Attorney General’s Department, or for law enforcement agencies, to know how many are not.

    Internet Australia recently raised with Senator Brandis our concerns about the implementation process, pointing to the poor drafting as a major contributor. His sensible response was “I’m always happy to look at fixing flawed legislation”. We have since written to Senator Brandis and to the Prime Minister’s office calling for an urgent review of the provisions of the Data Retention Act so that at the very least the drafting issues are addressed.

    The history of the data retention scheme provides a spectacular case study in how not to introduce complex legislation. It is a classic example of a badly designed law that has been rushed through the parliament in the dubious belief that urgency was justified and would not impede the efficient implementation of a new regulatory regime. This haste in the design and implementation has almost certainly ensured ultimate failure to achieve the Government’s stated aims. It has also resulted in a lot of unnecessary cost to industry, and to consumers.

    It is perhaps timely to observe that Prime Minister Turnbull has reversed an Abbott Government decision and recommenced the process for Australia joining the global Open Government Partnership. A bit more openness from the Attorney General’s Department would have been a good idea in the case of the data retention scheme.

    Laurie Patton is CEO of Internet Australia, the peak body representing Internet users, and a chapter of the global Internet Society – see www.isoc.org

  • Laurie Patton. Malcolm Turnbull: NBN killer?

    The ABC Online News headline on the 14th of September 2010 was pretty blunt: “Abbott orders Turnbull to demolish NBN”. In the article itself then Opposition Leader Tony Abbott is quoted as saying: “The Government is going to invest $43 billion worth of hard-earned money in what I believe is going to turn out to be a white elephant on a massive scale”.

    Fast forward five years and the cost of the Coalition’s NBN is now put at $46-56 billion, with many experts maintaining that this significantly understates the likely real cost. Confusion and disagreement reign as to how long it will take to complete our much needed broadband rollout.

    We’ve moved from a state-of-the-art fibre to the premises (FttP) strategy to the so-called Multi-Technology Mix (MTM), which heavily relies on using the ageing Telstra copper network and the not so old, but not very modern, Hybrid Fibre-Coaxial (HFC) networks originally built for pay television. Both will require considerable remediation work before they are fit for purpose and there is a solid argument to be put that in the end we’ll have to replace much of them at some point anyway.

    Meanwhile, we are told that our future rests on innovation. Internet Australia agrees. We have consistently drawn attention to NBN issues in this context, including the fact that we are way down the list of broadband enabled countries. Average connection speeds of 7.8Mbps saw Australia sitting at 46th position on global rankings in the third quarter this year. Surely an innovation nation needs to do better than that?

    Much is being made of the lessons we can learn from countries such as Israel and Singapore. Fair point. However, what has allowed them both to become world leading technology hubs is a broad consensus on that being a national priority. To achieve our potential as a digitally enabled society we need a road map and consensus among all parties on the direction we should take. Underpinning that must be a speedy completion of the NBN.

    This year saw the establishment of the Digital Transformation Office, modelled on an organisation of the same name and with the same purpose in the UK. The DTO is charged with streamlining access to government services online. This is a worthy objective, however Internet Australia’s concerns were raised when a visiting expert from the UK highlighted the potential downside from moving government service provision online. The message was that there have been both winners and losers over there. It is fine for people who have access to the Internet and are digitally savvy, but disadvantaged groups and individuals who are not connected can struggle to get access to essential government services.

    2016 is the National Year of Digital Inclusion. See www.godigi.org.au. What better time to acknowledge that the NBN is not only necessary for our economic future it is also critical for our social development?

    I’ve heard it said that Malcolm Turnbull tried to appear to be following his leader’s instruction to kill the NBN while actually doing his best to make sure that it survived. If that’s the case, then now, delivered to the top job, can we hope to see our new prime minister show his true colours? Will the highly regarded ‘tech head’ reverse the Abbott Government’s half-hearted approach to broadband just as he has reversed a number of other high profile, but unpopular, policies of his predecessor?

    Sadly, the signs are not great. As internationally renowned industry expert, Paul Budde, was quick to observe there was scant mention of the national broadband network in the Government’s Innovation Statement this month. Others have argued that the MTM option was a political solution not a technology solution. If that’s the case then we should put politics aside for the sake of the nation and get on with building the NBN.

    Opposition spokesman Jason Clare has indicated that a future Labor government would roll out more FttP, while conceding that it would not, immediately at least, abandon MTM where construction was under way or MTM had been deployed. Surely such an approach would appeal to Malcom Turnbull? Compromise and a bipartisan strategy might just be the answer.

    It appears that one of the roadblocks in recent times has been that ‘big business’ either doesn’t get it, or hasn’t wanted to rock the boat by telling the Coalition (especially under Prime Minister Abbott) that we need the NBN and we need it ASAP. Now’s the time for the peak industry bodies and the country’s ‘top business leaders’ to speak up. We didn’t argue over the need to provide other essential services such as roads, rail, water and power, so why are we doing it over this piece of critical 21st Century infrastructure?

    We can continue to debate technology choices, but we cannot wait any longer to get Australians connected. History will ultimately reveal the best Internet delivery technology for a vast country like ours. However, history will also certainly judge us poorly if we lag behind in the next era of global innovation because we failed to provide an open and accessible Internet underpinned by ubiquitous high speed broadband.

    Laurie Patton is CEO of Internet Australia, the peak body representing internet users and a chapter of the global Internet Society – www.internetsociety.org

     

  • Ranald Macdonald. Meet Mark Scott’s heir apparent, a businesswoman with close ties to the Murdochs.

    “The announcement of Michelle Guthrie as the new ABC supremo by ABC Board Chairman Jim Spigelman is shrewd and just maybe a winner.

    Of course, one cannot judge the performance of a driver until she is actually behind the wheel and showing her stuff.

    An “A” for innovation, though, for the Board on its decision – and (perhaps) it is an appointment which will not be slammed by the News Empire (after all, M’s Guthrie worked for the Murdochs for some 13 years).

    To that I would add, at least a potential “B-plus” for her performance as an administrator, someone with international experience in media and new technology and the excitement of being the first woman to be executive head of our National broadcaster.

    Those concerned with the budget cuts, the increasingly Sydney-centric nature of our ABC, the 500 staff reduction and the dreadful impact of the breaking of the Australia Network contract, plus the loss of ‘spread’ around the continent,  know that M’s Guthrie has many challenges filling her inbasket.

    (Incidentally, an interesting finding on Q & A was the imbalance on the panels with the Sydney domination, which would have been worse but for Christopher Pyne’s regular appearances! How to stop the ABC becoming the Sydney-ABC?)

    For an understanding of the benefits and challenges of the new media, no worries. For living within budget – and perhaps providing government with further budget savings and introducing advertising revenue (will iview be charged for?), perhaps a slightly concerned “B”.

    For a commitment to quality programming for all of Australia and fighting for the funds to achieve it, that is a challenge.

    As is, how to deal with editorial leadership and defence of independent reporting in the public interest, programming decisions and a commitment to present an authentic Australian voice into SE Asia and the Pacific – and Australians reporting back to us in terms relevant and understandable.

    We await outcomes, so with the hope for an improvement of a provisional, but concerned, “C-plus” – though there is an important debate to be held as to whether the job is too multi-faceted for one person and whether an editor-in-chief should be appointed by M’s Guthrie, responsible to her. It would at least provide a shield for journalistic decision-making and choices, which politicians noisily seek to influence.

    Anyway, a welcome to the new CEO from ABC Friends – and we hope to meet and discuss where Michelle Guthrie wishes to take the ABC to. We suspend judgement, but my provisional marking on her appointment averages a “B-plus” – without being influenced by the Murdoch years on her C/V.

    Ranald Macdonald – former MD of The Age and National Campaign Manager of the ABC Friends.

  • Peter Burdon. Why is the business world suddenly clamouring for a global carbon tax?

    Among the various interests at the Paris climate talks, it is arguably the voice of business that has emerged most clearly. Many business leaders are now saying that if the world is intent on reducing greenhouse gas emissions, there must be a worldwide price on carbonand a framework for linking the 55 schemes that exist in areas such as China, the European Union, and California.

    Momentum has been building since May, when six of Europe’s largest oil and gas companies, including Royal Dutch Shell and BP, issued a letter calling for global carbon pricing system. That month, leaders from 59 international companies also signed a statement calling for carbon pricing to feature in the Paris agreement.

    Advocacy has continued during the Paris negotiations. For example, Patrick Pouyanné, chief executive of French oil and gas giant Total, argued that the shift from coal to gas “will not happen without a carbon price”. He suggested that a price of US$20-$50 in Europe was required (well above the current price).

    Oleg Deripaska, president of the world’s largest aluminium producer Rusal, put the issue in stronger terms, describing the idea of voluntary national emissions commitments (upon which the Paris agreement largely hinges) as “balderdash”.

    Asked what success would look like from the Paris negotiations, Deripaska replied:

    A success [for most people] would be lunch at a nice French banquette with foie gras and oysters. But no, seriously, it is carbon tax or die.

    Carbon tax on the menu?

    It is not clear whether a carbon price will figure in the Paris agreement. But it is important to consider what is motivating some of the world’s highest-emitting companies to advocate for a carbon price. And what other, perhaps more intrusive plans for tackling climate change would be taken off the table?

    Businesses have a stronger presence at COP21 than at any previous climate negotiation. They know which way the wind is blowing and realise that governments might require painful and complex interventions to reduce emissions. Moves are afoot to decarbonise the world economy some time after 2050 (see Article 3 of the latest draft text, and there has been strong advocacy for a moratorium on new coal mines.

    Helge Lund, chief executive of British oil multinational BG Group, argues that a carbon price reduces government intervention and attempts at “pick[ing] winners in terms of energy technologies.” Instead, he argues: “the market will dictate the most efficient solution”.

    Forecasts from the International Energy Agency suggest that fossil fuels (including coal) will provide the bulk of energy demand for developing countries going into the future. Companies intend to meet that demand. Thus, Shell can simultaneously advocate putting a price on carbon and make plans to drill in the Arctic where production will not begin until 2030.

    While that might sound perverse, there is actually nothing inconsistent about those two positions.

    One way for energy companies to maintain economic growth in a carbon-priced economy is to shift investments gradually away from coal and oil, and towards gas. That is why Shell has paid US$70 billion for the BG Group.

    Of course gas might come under similar pressure in time, but as the Financial Times has reported:

    …oil companies’ skills and assets mean that finding and extracting gas is a short and natural step. Moving into renewable energy is a much bigger leap.

    This can be seen in the many examples where energy companies have struggled to develop other forms of energy, such as BP’s ill-starred attempt to brand itself as “beyond petroleum” and invest US$8 billion over ten years in renewable energy. The company has since backtracked on that goal, has left the solar market, and has no plans to expand its onshore wind investments.

    Beyond markets

    Of the 185 countries that have submitted climate targets ahead of the Paris talks, more than 80 have referenced market mechanisms.

    Clearly, a price on carbon is going to play a role in attempts to tackle climate change. This is a good thing but it is not sufficient and must not become a distraction from other serious interventions.

    Recent research confirms that we do not have time to wait for energy companies to transition at their own pace from fossil fuels to renewable energy. For example, last week Kevin Anderson from the Tyndall Centre for Climate Change Research published a paper in Nature Geoscience which argued:

    The carbon budgets associated with a 2℃ threshold demand profound changes to the consumption and production of energy … the IPCC’s 1,000 gigatonne budget requires an end to all carbon emissions from energy systems by 2050.

    A carbon budget consistent with 2℃ (let alone 1.5℃) requires a dramatic reversal in energy consumption and emissions growth. Governments should treat overtures from business with caution, even if businesses are making the right moves. They need to ensure that these moves are made at a speed that suits the climate, rather than just business.

    Peter Burdon is Senior Lecturer, Adelaide Law School, University of Adelaide. This article was first published in The Conversation on 11 December, 2015

  • Andrew Leigh. Putting the spotlight on company tax dodgers

    Every year, the International Tax Review nominates its ‘Global Tax 50’ — the people and organisations who are most influential in improving tax systems around the world. Two years ago, David Bradbury made the list, for being “a vocal and proactive voice on a variety of tax issues”.

    One of Bradbury’s award-winning reforms was tax transparency — laws that required the tax office to report the tax paid by firms with total income above $100 million. The Liberals didn’t like the change, and voted against it at the time. After winning government, they set about trying to repeal it — first by warning of kidnap risk, and then by suggesting that it might embarrass some firms if the public knew how little tax they paid.

    Farcically, the government said that it wouldn’t pass its own multinational tax package unless the parliament agreed to wind back secrecy. In effect, Scott Morrison was holding a gun to his own head, but the Greens fell for it. On the last day of parliament for 2015, the Greens Party agreed to amendments that kept two in three private companies out of the tax transparency net.

    This week’s release of tax transparency data has shown the value of letting the sunlight in. The 1300 economic groups covered by the report had a combined taxable income of $170 billion, and contributed $40bn in tax towards funding Australia’s schools, hospitals and roads.

    Worryingly however, the tax office report also reveals that one in four of these companies paid no tax despite earning over $100m in revenue. In the energy and resources sector, 57 per cent of multinational firms paid no tax, while in the banking and financial sector the figure was 45 per cent. The companies concerned will no doubt want to explain these figures further to their customers and the Australian community.

    Tax transparency matters because without it, we have no way of knowing if big companies are paying their fair share. There are plenty that do, and their contribution deserves acknowledgment.

    More importantly, though, it is clear some firms don’t. When companies are paying tax at a fraction of the standard rate, Australians should ask why. At a time when the government is talking about raising the GST to 15 per cent — a decision that would hit low-income Australians hardest — it is right that we should look closely at whether all taxpayers are making a fair contribution.

    While Labor has supported the Government’s baby steps on multinational tax, we don’t believe they are enough. We are particularly concerned about the government’s unwillingness to address the practice of companies loading debt into Australia to artificially inflate their tax deductions.

    Thanks to the ongoing corporate tax inquiry — particularly the work of Labor senators Sam Dastyari and Chris Ketter — we know that some big companies are transferring money into their Australian arms and dressing this up as a loan, even though it’s really just shifting money from one pocket to the other. In paying back these artificial loans, companies can send their profits overseas while pocketing a tax deduction at the same time.

    That’s the problem Labor’s package zeros in on. By moving to a worldwide gearing ratio approach, companies would only be able to claim deductions against the average amount of debt they owe to banks around the world.

    Labor’s plan is grounded in careful OECD work, and costed by the Parliamentary Budget Office. By closing loopholes, we recognise that Australia needs a tax system that rewards the productive, the innovative, the resilient, the clever and the competitive. Not a tax system that rewards those willing to push the envelope the furthest.

    We need a plan to win investment from the world, yes. But this plan should work because big firms think it is worth buying into Australia — not because our government thinks they have to cut special deals that sell us out. A plan that leverages the ingenuity of the Australian workforce, the strength of Australia’s institutions and the quality of Australia’s infrastructure.

    Our plan for winning investment from the world should not be premised on how big a tax break companies can get here, because that is not a competition we’re ever going to win. If we want to join the countries at the top of the global league table, we need to invest in growth, not engage in a race to the bottom with our tax loopholes.

    In recent weeks the OECD has handed down the final set of deliverables for its Base Erosion and Profit Shifting Action Plan. This plan has been more than two years in the making and lays out a comprehensive 15-point agenda to close the loopholes that have opened up in the tax net due to changing technology and an increasingly global business environment.

    The 15 items on the action plan tackle everything from the taxation of intangible goods to hybrid instrument rules and the creation of a multilateral tax instrument to allow more rapid co-ordination of rules between OECD countries in the future. Australia is making progress in some of these areas — for example, the effort to extend the GST to digital downloads, which was supported by both Labor and Liberal state and territory governments. But there is still a lot of work to do.

    The Treasurer has the OECD’s blueprint, and Labor’s costed proposals. He must now choose between his regressive measures and our progressive proposals. Unlike a 15 per cent GST, closing multinational tax loopholes won’t impede growth, worsen inequality or make housing less affordable. There should be no more excuses and no more delays when billions of dollars in tax revenue are potentially at stake.

     

    Andrew Leigh is the Shadow Assistant Treasurer. This article first a appeared in the Business Spectator on 17 December 2015.

     

     

     

     

  • John Duggan. The effect of healthcare privatisation on patient outcomes

    Recent actions by the Federal Minister of Health and her predecessors indicate the government’s aim to shift hospital care from the public to the private sector. Associated with this is the   developing perception that private hospitals are superior just as private schooling is increasingly held to be superior to publicly funded schooling.

    However, while there are massive data available comparing standards and outcomes in the school system, public, private and Catholic, there are virtually no Australian data comparing the two hospital systems; the only study found is a Productivity Commission report outlining the equal inefficiency of both systems.    http://www.pc.gov.au/inquiries/completed/hospitals/report

    The Federal, State and Territory Health Departments are treasuries of relevant data awaiting the will, finance and logistics to convert data to information and information into knowledge.. The absence of such  data comparing quality of care and outcomes in the two healthcare systems, contrasting with educational data may be attributed to apathy or to the power of vested interests ,.However, studies from the US and , Canada indicate that it can be done,. recognising that in Australia, as the Productivity Commission reported,, the data sources are multiple and ill-coordinated. and that both systems function at 20 % below best practice,.,

    To interpret the US data, it is necessary to understand that, at least until the Obama legislation, there were several hospital systems and funding mechanisms. There were the not-for-profit hospitals often run by religious or community//civic groups , for- profit institutions, generally investor owned and part of a chain, and thirdly, those owned by cities or universities.

    A detailed analysis of 14 studies in the US, totalling 36 million admissions to 26,399 US hospitals 1982 – 1995 http://www.ncbi.nlm.nih.gov/pubmed/12054406 .compared  for-profit versus not-for-profit hospitals .It showed  a small but statistically significant 2% elevation in mortality in for-profit hospitals. Six of the component studies showed a statistically significant advantage for not-for- profit institutions; while only one study           showed a similar advantage in for-profit hospitals. The only obstetric study, that of 1,642,002 patients in 241 hospitals showed a highly significant 9.5% increase in mortality rates for babies in for-profit hospitals.

    In another study the U.S. Health Care Financing Administration studied data on 3100 hospitals, adjusting for differing patient characteristics. Lower mortality rates were associated with teaching hospitals, a higher proportion of board-certified medical staff (specialist qualifications), a higher proportion of registered nurses and higher payroll expenses i.e. staffing levels. A higher mortality rate was associated with for profit and public (in Australian parlance state-owned) hospitals compared with not-for-profit hospitals .http://www.ncbi.nlm.nih.gov/pubmed/?term=NEJMED++19

    The U.S. Joint Commission on Accreditation of Healthcare Organisations and the Centers for Medicare and Medicaid Services studied data submitted in 2004 to the American Hospitals Association on coronary occlusion, heart failure and pneumonia. Detailed statistical analysis showed that “for-profit hospitals consistently underperformed not- for-profit hospitals”. The conclusion reached was that “Patients are more likely to receive high quality care in not-for -profit hospitals and in hospitals with high registered nurse staffing ratios and more investment in technology”.http://www.ncbi.nlm.nih.gov/pubmed/?term=landon+in+Arch

    Of several studies of specific conditions, one of the largest compared outcomes in for-profit and not-for-profit renal dialysis centres in the U.S http://jama.jamanetwork.com/article.aspx?articleid=195538. In a review based on 500,000 patient years from 1973 to 1997 in 1342 facilities, six of the eight studies showed a statistically significant increase in mortality in for-profit facilities, one only suggested the same and one suggested lower mortality in for- profit institutions. The authors conclude that “there are annually 2500 (with a plausible range of 1200-4000) excess deaths in U.S. for-profit centres”.

    Another study examined the evidence for performance differences between for-profit and not-for-profit psychiatric inpatient facilities since 1980. All but one of these

    studies found that not- for- profits performed as well as or better than the for-profit psychiatric organisations. http://www.ncbi.nlm.nih.gov/pubmed/12556598

    In view of the Federal government’s push for cost savings through efficiency we should compare health care administration costs in the U.S. and Canada (http://www.nejm.org/doi/full/10.1056/NEJMsa022033) .While the two countries share many social characteristics with excellent databases, their health care systems are quite different. Canada had a centrally funded health care system and a single payer – the government, while the U.S, .like Australia, had a multitude of health insurance systems with multiple payers. In 1999, health administration costs were at least   $1059 per head in the US compared with $307 per head in Canada. Thus, administration accounted for 31% of health care expenditure in the US but only 16.7% in Canada. In the 30 years to 1999 administration’s share of healthcare labour force expenditure went from18.2% to 27.3% in the US whereas in Canada it rose from 16.0% to 19.1%.

    Privatization also uses more doctor’s time. A recent study of treating doctors in the U.S. showed that they devote an average of one sixth of their time to administration; psychiatrists top the bill at 20% whereas paediatricians only spend 14%.http://www.ncbi.nlm.nih.gov/pubmed/25626223

    Only one study comparing Quality of Care issues in investor owned and not-for-profit Health Maintenance Organisations in the U.S. has been found. http://www.ncbi.nlm.nih.gov/pubmed/10411197 Data from the National Committee for Quality Assurance’s Quality Compass on 329 HM0 plans showed that the 248 investor owned plans had lower scores for all the quality of care indices than the 81 not- for- profit plans.

    There is, however, one aspect of the U.S. studies relevant to Australia. A recurrent theme there is the association of better outcomes with medium and large size hospitals, and for procedures performed by experienced doctors with specialist qualifications.http://www.nejm.org/doi/full/10.1056/NEJMsa0907130 http://www.nejm.org/doi/full/10.1056/NEJMsa012337 http://www.nejm.org/doi/full/10.1056/NEJMsa035205

    Whether there is significance in the fact that there are in NSW 380 public hospitals but more than 600private hospitals remains speculative.

    Overall, while the U.S. findings are relevant to the U.S,  their application to Australia is debatable; unfortunately we lack any data to indicate that the deplorable US system is replicated here. With the enormous and growing cost of Healthcare in Australia, surely the time has come to consider an analysis of the costs and patient benefits of the various healthcare systems in Australia , such as has been done in North America..

    Conjoint Professor John Duggan, School of Medicine and Public Health, University of Newcastle.