Category: Politics

  • Richard Butler. The Iran Nuclear Agreement: Safe if Implemented.

    The Joint Cooperative Plan of Action (JCPOA), signed with Iran by the UN Security Council’s five Permanent members, plus Germany and the EU, (Vienna, July 14th), is unprecedented. No comparable arms control plan has been as detailed or thorough. Above all, it is vastly preferable to any of the proposed alternative approaches, the main one of which has been war.

    If the negotiation of this agreement had failed, there would have been further proliferation of nuclear weapons in the Middle East, in addition to whatever Iranian capability may have emerged. Israel already has them and Saudi Arabia has been contemplating them. Then, war with Iran, the preferred option in US Republican circles and Israel, would have almost certainly ensued with devastating and global effects, and, war would not have prevented Iran from acquiring nuclear weapons capability thereafter, for which it would have been given a massive incentive.

    The Plan and its technical annexes comprise some 150 pages. At root, it establishes four pillars:

    1. Cutting off Iran’s access to the weapons grade fissile material needed for a nuclear explosive device. 98% of the relevant material it now holds will be removed, 65% of the centrifuges it has employed to enrich uranium will be removed and the core of its reactor at Arak will be modified to remove its ability to make plutonium.
    2. The UN’s nuclear Agency (IAEA) will be given an unprecedented level and extent of access to all relevant materials and technologies within Iran to verify its compliance with the Plan. This access by the Agency exceeds the level given to the UN Special Commission (UNSCOM) to disarm Iraq.
    3. Sanctions on Iran will be phased out.
    4. A review and dispute settlement process has been established comprised of the parties to the Plan and the role of the UN Security Council in seeking to enforce compliance with its decisions. The Council already exercises a similar role with respect to reports to it on compliance with the Treaty on the Non Proliferation of Nuclear Weapons (NPT). It was such reports that triggered the existing sanctions on Iran.

    JCPOA states that Iran “ reaffirms that under no circumstances will Iran ever seek, develop or acquire any nuclear weapons”.

    On the face of it and in its text, JCPOA is very much an agreement on material and technical matters, but it is overwhelmingly a political agreement. It is for this reason that if it is to be correctly understood and its chances for success are to be usefully assessed, a little of the relevant history needs to be recalled.

    The discussion/negotiation on the subject of Iran’s possible attempts to develop nuclear weapons has been going on for 12 years. This originated in the IAEA reporting that it was having difficulty in verifying Iran’s compliance with its obligations as a non nuclear weapon state party to the NPT. The main such obligation is the one Iran has reaffirmed in JCPOA, quoted above: Never to acquire nuclear weapons.

    Iran’s conduct had been disturbing and uncooperative and when this was reported to the UN Security Council, sanctions were imposed upon it. The US and the EU also imposed severe sanctions. These significantly harmed the Iranian economy.

    On the other hand no unambiguous report that Iran was pursuing nuclear weapons had been produced. Indeed, the CIA, in its last two major reports to the US government has stated that it has no evidence of an Iranian nuclear weapons program.

    The motivations to find a negotiated solution to the Iranian problem have been various, but two concerns have been dominant: the wish of the Iranians to bring the sanctions to an end and, the wish of the Obama administration to avoid yet another war in the Middle East and to prevent Israel, from dragging it into a war with Iran.

    Back a little further, in 1953, the UK and US external intelligence Agencies staged a coup in Iran removing its democratically elected government. They did this to protect the interests of their oil companies in Iran. They then propped up the Shah of Iran as their preferred Iranian leader until the Iranian Revolution overthrew him in 1979, The revolution instituted an Islamic government and installed Ayatollah Khomenei as supreme leader. Later that year the US Embassy hostage crisis began, lasting 444 days.

    The Islamic Republic of Iran retains the system of government established by the Revolution, and continues to insist that the US is hostile to it and has a policy of seeking regime change in Tehran. It has also repeatedly expressed extreme, sometimes terminal hostility, towards Israel.

    The Obama Administration has attempted to reset US relations with Iran, but its attempts to do so have been strongly opposed by Republican, Congressional, pro-Israel, and media circles, mainly Murdoch outlets in the US. Their stated preference is clearly for war with Iran. It has been farcical and deceitful that, in such circles, the past role of the US within Iran is never mentioned.

    The negotiation of JCPOA also had at least surreal, if not farcical aspects. On one side of the table there were five nations, all nuclear armed. Two of them, the US and Russia possess tens of thousands of nuclear weapons, representing 90% of such weapons in existence globally, and as the negotiations proceeded they each announced plans to enhance their nuclear arsenals.

    The position of each of the five, with varying degrees of emphasis, was that it was of supreme importance that Iran not become anything remotely like them. While they insist that their national security demands retention of these weapons, it is inadmissible for Iran to think the same.

    Strictly excluded, not simply physically, but also as a subject for deliberation, was the only regional country possessing nuclear weapons – Israel. The staunchest defender of this abuse of the logic of proliferation is the US, which rejects any suggestion that Israel’s nuclear weapons status might encourage others in the region, including Iran, to obtain such weapons.

    For reasons such as these, the agreement of Vienna represented a triumph of pragmatism.

    The two main motivations, mentioned above, were satisfied, concessions were made all round, none proved to be deal breakers, and a basically sound set of behavioural conditions was established, designed to verify that Iran is not making nuclear weapons.

    But, within hours of the agreement being announced, but not yet published, the Prime Minister of Israel denounced it as a mistake of historic proportions, the Republican leadership in the US Congress pledged to reject it, President Obama stated that he would veto any legislation that sought to reject the agreement, and a few days later, in a statement made at the end of Ramadan, the Supreme Leader of Iran said Iran would honor the agreement but did not intend to change any of its other policies, particularly given US arrogance. There was dancing in the streets of Tehran at the prospect of the lifting of sanctions.

    It will be a rough ride in the US Congress, Iran will continue to support Shia causes in the region, including the Assad regime in Syria, and the P5+1 and the IAEA will try to make the agreement work in order to stop the proliferation of nuclear weapons in the Middle East, all the while continuing to refuse to address the elemental hypocrisy of their own possession of nuclear weapons.

    The central lesson of UNSCOM’s experience in Iraq was that the arms control system will work reliably if the subject country will let it work.

    So, the outcome for the Vienna Plan will largely be in Iran’s hands.

    It will work, if Iran wants to make it so and provided that some others are prepared to let that unfold, given the difficulty that they will clearly have at taking yes for an answer.

    Richard Butler AC, Former Head of the UN Special Commission to disarm Iraq, (UNSCOM) appointed by Prime Minister Keating, Convenor of the Canberra Commission on the Elimination of Nuclear Weapons.

  • Tony Smith. Wasting money on domestic violence?

    The implementation of most Government policies requires some kind of expenditure. One of the laziest approaches an Opposition can adopt is to cite slogans about cost. This sloganeering is at its most shallow when arguing that the Government is just ‘throwing money at the problem’. Needless to say, there are occasions when this criticism is true. Governments can decide that by giving an issue some funding, it can silence the demands of groups pressuring for action.

    There are times when Governments decide to fund a campaign, but then undermine the campaign by their actions in other areas. There is no doubt at all that domestic violence is a terrible problem for Australian society. The Abbott Government recently announced that it would spend millions of dollars on a publicity campaign alerting people to the problem and the unacceptability of domestic violence, particularly against women and children. Unfortunately, there are indications that the campaign might be undermined.

    While the Government is right to condemn physical violence in domestic relationships, it has not given enough credence to lower levels of abuse. Physical violence might erupt spontaneously but it seems much more likely that it will be preceded by other forms of disrespect. In particular, verbal abuse is likely to occur before physical assault. This means that a campaign which focuses exclusively on physical violence will not address the problem adequately. A holistic approach to domestic violence should make it clear that any behaviour which demeans people or removes their dignity is unacceptable.

    Perhaps one reason that governments might not be inclined to fund such a broad campaign is that verbal abuse and demeaning behaviour are endemic to politics. When members of the Government, particularly Ministers, attack women inside and outside parliament, they make such abusive attitudes seem legitimate. The Immigration Minister has recently attacked Human Rights Commissioner Professor Gillian Triggs in terms which were personal and insulting. Earlier this year when Prime Minister Abbott survived a challenge to his leadership, he emerged with a promise that he was about to start ‘listening’. Interestingly, Abbott responded to some criticisms of his leadership style with a suggestion that attacks on his protective Chief of Staff were worse because she was a woman.

    But within days of making his promise about listening, Abbott refused to hear what the Human Rights Commission had found in its inquiry into children in immigration detention. Not only did he refuse to listen but he did it in such a way that sought to undermine the credibility of Professor Triggs. He made statements about Professor Triggs which were demeaning, and precisely the kind of personal attack which is a likely forerunner of violence.

    The Immigration Minister also found it convenient to attack Greens Senator Hanson-Young. Hanson-Young was told by an insider at an asylum seeker detention camp that she had been under constant surveillance during a fact-finding trip to an ‘offshore’ centre. It might be argued that such surveillance is in itself a form of abuse but the Minister seems to believe that the Senator has no right to complain. This attitude is highly informative about the Government’s understanding of the importance of personal dignity and the ways in which it can easily be damaged.

    Anyone who watches Question Time in Parliament must also wonder about the Government’s understanding of the processes of domestic violence. Whether the question comes from a male or female member, Ministers use the opportunity to make personal criticisms of their opponents. This legitimates for those who look for such examples in our political leaders, sneering, ridicule and demeaning language.

    Politicians sometimes argue that in a representative democracy, parliament should reflect society in all its variety. They use this argument not to attempt to make parliament more inclusive, but in order to justify conflict. They argue that people actually expect their representatives to argue vigorously on their behalf, and that it is better to have such conflicts contained within the arena of parliament rather than outside in broader society where conflict can erupt into violence.

    This argument denies the possibility of leadership. It holds that parliament can only ever respond to social demands, and never lead social trends and individual behaviours. This argument is clearly incompatible with an expectation that parliament – and government particularly – should show some leadership in addressing domestic violence.

    Until the Prime Minister and other Ministers model some dignified behaviour in their comments both within and outside parliament, there will be little progress on any campaign that aims to address domestic violence. Unless the expenditure is backed up by personal changes, the money is likely to be wasted.

     

  • John Menadue. What a dreadful week.

    Last week an important public debate on key issues facing Australia was sabotaged by Tony Abbott, Joe Hockey and News Corp. The old scare campaigns were back again. Bill Shorten’s timidity did not help. Paul Keating commented ‘We have a political culture that has the ambition of a gnat’. He is right.

    Instead of a sensible discussion on climate change and carbon pollution, News Corp, via The Australian and the Daily Telegraph picked up a draft options paper on climate change which was being prepared for the ALP Federal Conference. This options paper suggested that the ALP is considering an emissions trading scheme. The paper apparently did not propose a carbon tax and it should be quite clear that an emissions trading scheme is not the same thing as a carbon tax. But that didn’t concern the Daily Telegraph which attempted to derail any sensible public discussion by depicting Bill Shorten as a zombie crawling from the carbon tax grave.

    It is worth noting that The Australian, together with the Australian Financial Review, is sponsoring a summit next month on policy reform. But what hypocrisy it is for News Corp to be sponsoring a summit whilst it is a major contributor to debasing public debate on climate change in Australia as it does also consistently in the US and the UK.

    Of course Tony Abbott couldn’t help joining in the ‘debate’ on an emissions trading scheme and a carbon tax when News Corp, as is the usual practice, gave him the lead in he wanted. We saw again the one-liners. He said ‘We’ve always said … that if Labor came back the boats would be back, the mining tax would be back and now we find that if Labor came back the carbon tax would be back’. He didn’t rerun his old one-liners on Labor increasing the deficit and the debt because his own policies have done just that.

    It was John Howard who first proposed an emissions trading scheme in 2007. Malcolm Turnbull supported Kevin Rudd’s carbon pollution reduction scheme in 2009 and crossed the floor to do so. Almost every reputable economist believes that a market mechanism like an emissions trading scheme is the best way to reduce carbon pollution. It is the lowest cost and most efficient way and one would think that it would appeal to a government that espouses a belief in market mechanisms. Neither News Corp nor Tony Abbott can help themselves in their politics of demolition on climate change. Only the previous week Tony Abbott had stepped up his attacks on renewable energy.

    The public wants something better in public discussion on climate change. The Business Council of Australia, the Australian Industry Group, the Australian Conservation Foundation and the Australian Council of Social Services have established an Australian Climate Round Table. They called for a ‘civil and constructive’ discussion on the subject. Clearly Tony Abbott and News Corp are not interested in such a discussion.

    It is ironic that last week The Australian and Australian Financial Review also announced that they would be sponsoring a summit ‘to fix Australia’ The agenda includes ‘reforms to the federal and state taxation systems that taken as a whole are both efficient and fair’. Yet Neil Chenoweth reported in the AFR on May11 this year the ‘the Australian Tax Office has only one company in its highest risk category for tax avoidance- Rupert Murdoch’s News Corporation’. On April 9 this year Michael West in the Sydney Morning Herald wrote ‘Rupert Murdoch’s US empire siphons $4.5b from Australian business virtually tax free’. That may be efficient for News Corp but it does not sound fair for other taxpayers.

    Last week Joe Hockey told us once again that we needed tax reform. But he has already ruled out key reform measures like changing superannuation deductions and payouts. He has also ruled out negative gearing that even the Reserve Bank now says we must consider. The ALP has made some timid proposals in both these areas, but instead of treating them as a useful contribution to a public debate on tax reform, both Tony Abbott and Joe Hockey seized on it an opportunity for attack and ruled out reform in both these areas.

    Joe Hockey said again last week that we needed to reform the GST, but then ruled it out unless all the states and territories agreed. Surely national leadership on tax reform must come from the Australian Treasurer and not run for cover as soon as the states disagree. Joe Hockey shirked his responsibility.

    The only tax change that is now in prospect is bracket-creep which is increasing government revenue.

    During the week the Business Council of Australia president, Catherine Livingstone said

    ‘Within hours of the Treasurer outlining a compelling case for the need for fundamental tax reform and balancing of the tax mix, both major parties began ruling out key elements of sensible tax reform, including changes in the GST. Our political representatives are elected and paid by the community to implement policies that will best serve the country. Their leadership responsibility is to ensure that there is a constructive, well informed debate, leading to implementable outcomes; it is not to undermine the debate in the cause of party-political posturing. Leadership requires being open and honest with the community about the challenges we are facing. It requires the energy and conviction to take on difficult and complex reform imperatives.’

    Catherine Livingstone spelled out very clearly that we have had a very bad week.

    See link to the policy articles that Mike Keating and I have edited on the need for policy reform in Australia. https://publish.pearlsandirritations.com/blog/?p=3719.

    As Ken Henry said in the foreword to the series

    ‘I can’t recall a poorer quality of public debate on almost any issues, that we have had in recent times in Australia.’

    Perhaps it is always darkest before the dawn!

  • Robert Manne. Laudato Si’ : A political reading.

    Robert Manne describes the Papal Encyclical as the first work that has risen to the full challenge of climate change. Robert Manne ads:

    There can be little doubt that the Papal Encyclical is the most consequential intervention in the discussion of climate change since Al Gore’s film, ‘An Inconvenient Truth’.  … Like Al Gore, indeed, like all rational people, Pope Francis accepts the consensual conclusions of the climate scientists.  … For Pope Francis the climate crisis is the most extreme expression of a destructive tendency that has become increasingly dominant through the course of industrialisation. … The Encyclical argues that we have become slaves both to what is called the technological paradigm and the theory of market fundamentalism. … In the Encyclical, the analysis of the condition of contemporary culture in turn provides the explanation for the most troubling puzzle of the modern era, our abject failure thus far to rise to the challenge of global warming. … Climate change denialism is the most obvious self-interest of the economically powerful voices of society who, in the words of the Encyclical “mask the problems … and conceal the symptoms”.

    This article by Robert Manne was published in The Monthly on 1 July 2015. For link to the article see https://www.themonthly.com.au/blog/robert-manne/2015/01/2015/1435708320/laudato-si-political-reading .

    John Menadue

  • John Menadue. Refugees- from toxic politics to a humanitarian policy.

    The ALP Federal conference which will be meeting in a week’s time, will be considering refugee policy along with other major issues.

    I have re-posted below a post from 22 June on refugees .  

    Media reports suggest that boat ‘turnbacks’ will be a contentious issue at the conference. There are several issues that I think should be kept in mind on this issue.

    The first is that the dramatic drop in boat arrivals has not been due to turnbacks, but the decision by the Rudd Government announced on 13 July 2013, that any people arriving by boat in future would never be settled in Australia. That was the game-changer. Tony Abbott’s actions were quite marginal, including some turnbacks. These turnbacks had a great deal of publicity but they were not significant in curbing the flow of boats. 

    Second, turnbacks should only be considered as part of a regional agreement that importantly involves Indonesia, Malaysia and the UNHCR. Unilateral turnbacks should be rejected. 

    Third, the issue of turnbacks reminds us again how important it is to build trust and arrangements with regional countries. This will require considerable diplomatic effort and resources. It will take time. Unfortunately, as I mentioned in the post below, we treat regional countries as fair-weather friends and go to them when we have a problem, but turn our backs when they have a problem.  John Menadue

    Refugees – from toxic politics to a humanitarian policy (repost from 22 June 2015.

    The old Irish story tells of the guide who spoke to a lost Irishman. If you want to get to Dublin I wouldn’t start from here.

    The same is true of refugee politics today. We are in a dreadful position at the moment but we need to be pragmatic and determined to get to a humane and generous policy.

    Before looking at practical ways to an improved future for refugees, there are several things that we need to keep in mind.

    First, the Australian public in my view will not support a generous refugee policy if arrivals are seen to be irregular and not under the control of the Australian government, particularly if the arrivals are being determined by people-smugglers.

    Second, the generous acceptance of Indochinese refugees in Australia thirty years ago would not have been possible if we had had the arrivals of boat people that we had in Australia in 2013. At one stage, boat arrivals that year were running at the rate of close to 50,000 p.a. At the height of the outflow of over a million people from Indochina in the late 1970s and 1980s, the largest number of people arriving in Australia by boat was 1423 in 1977-78. From my experience as Secretary of the Department of Immigration and Ethnic Affairs from 1980, I was very conscious that a large numbers of boat arrivals would have prejudiced the Indochina program. We put a great deal of effort into minimizing and downplaying boat arrivals.

    Third, the success of the Indochina program depended on two related features. The first was that countries of the region would hold asylum seekers for a period for processing on the understanding that, secondly, countries like Australia, the US, Canada and France would resettle large numbers of those refugees. It was called burden-sharing.

    Fourth, the collapse of the arrangement with Malaysia triggered the dramatic increase in boat arrivals in 2012 and 2013. People-smugglers realised that there was no effective Australian counter to their activities. The collapse of that arrangement with Malaysia was the result of the collaboration and joint action in the Senate by the Coalition, the Greens and supported by major refugee advocate organisations in Australia.

    Fifth, Tony Abbott did not stop the boats. As I set out in my blog of 8 December 2014 the decisive factor in stopping the boats was the decision by the Rudd Government on 13 July 2013 that no future boat arrivals would ever be settled in Australia. People arriving by boat fell from 4,145 in July 2013 to 1,591, 837, 339, 207 and 355 in subsequent months. The number had dramatically fallen by the time the Abbott government came to power. The new government attracted a lot of attention with turn-backs to Indonesia but these were really only minor operations with boat arrivals dramatically reduced by then. The decision of the Rudd Government on 13 July 2013 was the game-changer, not the Coalition rhetoric about ‘stopping the boats’. The media seems remarkably willing to accept Tony Abbott’s one-liner on the subject and refuses to examine the facts. The result of all this was Manus and Nauru. What a price we are now paying for the collapse of the arrangement with Malaysia with which the UNHCR was prepared to cooperate and which would have been an important building block in regional cooperation.

    Against that background, how should we now proceed? For further background see article by Peter Hughes,Arja Keski- Nummi and myself.

    The key to an acceptable future refugee arrangement is joint responsibility and burden-sharing with our regional neighbours. Countries of the region have severe problems with irregular people flows as we have seen recently in arrivals from Myanmar and Bangladesh. As co-chair with Indonesia on the Bali process, our foreign minister should have shown good faith by seeking to convene a meeting with affected regional countries to tackle people-smuggling and trafficking. But too often we are fair-weather friends with our neighbours, and show interest only when we have a problem. We say ‘nope, nope, nope’ when they have a problem We need to give high priority to building effective cooperation on refugees in the region, together with UNHCR.   It is in that context that turn-backs should be addressed and not through unilateral action.

    Regional cooperation is the only long-term arrangement that makes sense. But it will take a lot of time and trust. We are not really trying at the moment. We must accept that Manus and Nauru are not sustainable in the future.

    We should negotiate Orderly Departure Arrangements where possible to address problems at source. I would expect that Myanmar would be interested in Australia taking some Rohingya . Sri Lanka would also be likely to be cooperative in our taking of Tamils. In both cases the arrangements would be part of an orderly program.

    We should focus part of our aid and trade programs on regional countries that have persecuted or alienated minorities.

    We should increase our refugee increase to 20,000 plus. At the peak of the Indochina program we were taking about 35,000 refugees p.a., adjusted for our population increase since then.

    We should consider new migration pathways, e.g. 4-5-7 Visas, for vulnerable persons. There were over 800,000 temporary entrants, excluding tourists, in Australia at 30 September 2014.

    We should think again about blanket opposition to offshore processing. The important issue is not where the processing occurs, but is it fair and effective, and is it done in cooperation with UNHCR. Some years ago I was opposed to offshore processing, but I changed my mind in light of the dramatic increase in asylum numbers in 2012 and 2013 after the collapse of the Malaysian arrangement. A consequence of the collapse of that arrangement is that we are now faced with Manus and Nauru.

    We should formally end mandatory detention. It was introduced by the Keating government. It is very expensive, cruel and does not deter asylum seekers. With the near-end of boat arrivals, the numbers who are in Immigration detention has declined dramatically. We should formally end mandatory detention except for detention necessary for safety, security and health checks.

    We should set a time limit for the final processing of the 30,000 asylum seekers who arrived by boat and whose status has not yet been determined.

    The unfortunate souls on Manus and Nauru must be treated with dignity and respect and either repatriated if found not to be refugees or resettled as soon as possible in third countries with the cooperation of UNHCR.

    The key to resolving the political problem surrounding refugees is to insist that vulnerable people that we accept in future must be part of an orderly program. I see that as the best way to gain the support of the Australian community and develop refugee programs that we can again be proud of.

  • Stuart Whitman. Labor 2035

    This article is posted from Grassroots, The Local Labor Journal – Party Reform: Past Present and Future.

     

    It’s 2035, and Labor members from an inner suburb of Australia’s largest city are gathering in their local community centre to welcome the new Labor Prime Minister on her first official visit to the electorate. 

    The recently elected Prime Minister is returning to her childhood community to congratulate its Labor branch on their Community Action Programs and to celebrate the 20th anniversary of the ALP National Conference that changed everything.

    Since the party reforms were passed at the 2015 ALP National ALP Conference, the Australian ‘Labor Party has been transformed into Australia’s largest grassroots activist and political movement of nearly 200,000 members with Labor branches overseeing sustainable neighbourhood projects coordinating everything from community gardens, to small cooperative businesses and neighbourhood literacy programs across the country, as well as being engaged in community dialogue and participation in the development of Labor policies and the election of Labor candidates.

    Tonight is an important opportunity for the Prime Minister to reflect on how her own life was changed by joining her local Labor branch, and how that experience might serve as a lesson to her party and her country about engagement and participation.

    This is her speech.

    “Men and women of the Australian Labor Party, my friends, comrades and Labor supporters.

    I feel I have returned home.

    You know, I grew up just a few streets away in government housing not long after my family arrived as refugees from South Sudan. I went to the state school just around the corner from this community centre.

    This is where it all started for me. This is where I found my sense of belonging in this strange new country that gave my family safety. This is where I was inspired to give back by serving my community and my fellow Australians in public life and this is where I was provided the opportunities to realise that dream.

    I am pleased that so many of my Labor friends and mentors from that time are here physically and virtually tonight to share this celebration.

    I am grateful that we are also joined by some veteran delegates of the 2015 ALP National Conference who were able to put their factional and personal differences aside long enough to embrace a new way of thinking for Labor, a higher standard for the way we conduct ourselves as a party and as a result breathed new life into our Labor cause for our times, changing politics forever in Australia.

    Who would have thought back in 2015, when Australia’s  prospects looked so bleak under the short-lived but destructive Abbott Government that we could have come so far as a nation. In those years we saw rapidly rising unemployment as our manufacturing sector crumbled under a Government that didn’t care while jobs flowed offshore. And just as the numbers of jobless were soaring they were removing the foundations of our world-renowned social safety net and increasing the burden on the most vulnerable of our citizens, while closing off     future job and education opportunities to our youth. And when the world’s scientists were warning us Australia would be the nation most impacted by climate change, our Government was doing everything possible to place obstacles in the way of our transition to a low carbon economy.

    Australia was at the cross-roads. We were faced by the dual challenges of being left behind by the third industrial revolution as countries that invested in digital infrastructure, education and innovation overtook us, and with a declining capacity to mitigate and adapt to the ravages of climate change. We needed an alternative government  that not   only understood the difficult choices to be made by our country at that cross-roads but that it would take the full engagement and participation of our people and their collective talent to chart a better way ahead. 

    The reforms that were passed at the 2015 National Conference unleashed the great, untapped potential of Labor members that for too long had been taken for granted by power blocs that sought only to sustain their own power. As a result, many other Australians were drawn to join the ALP because they saw it as an organisation that really acted on our commitment to social democracy and the empowerment of the powerless.

    You see the key to the success of any organisation or community is the extent to which members feel they belong. If the community embraces the individual, and values and empowers him or her to share their knowledge and experience, then the whole community thrives. It was the same for my family arriving in Australia at time when Australia did not have a good record on the treatment of refugees. But by being welcomed by my local community, and finding a home in my local Labor branch, I discovered my voice and my potential.

    At the 2015 conference we embraced the participation of our rank and file members across the country in selecting our federal and state leaders and key party officers, a greater say for local members in choosing their lower and upper house candidates over the will of the central machine, the resourcing of sustained community organising campaigns for local branches and supporters between elections, multiple ways of engaging with the party’s policy development, the engagement of our local communities in Labor pre-selection contests, and training programs for branch office holders and branch rebuilding initiatives.

    These reforms enabled us to become the party that we are today.

    In the age where technology allows participatory democracy on a scale unmatched in human history, we became the Labor Party for our times. The Australian people in all of their diversity responded in kind, many more voted for us and many more saw the value in joining us in our Labor cause.

    These reforms enabled us to become the party of participation.

    In the age where technology allows participatory democracy on a scale unmatched in human history, we became the Labor Party for our times. The Australian people in all of their diversity responded in kind, many more voted for us and many more saw the value in joining us in our Labor cause.

     

    The transformation of the Labor Party into a 21st century political movement and organisation has also transformed Australia into a proud republic with flourishing social capital that has overcome its fears and toxic politics and that is adapting to the great economic and environmental upheavals of the past two decades and has healed past divisions, not least the treaty we have signed with Australia’s indigenous people. The rest of the world now looks to Australia as an example of what can be achieved by a progressive and fair society that seeks to empower its citizens to solve problems for their common good.

    We look back with gratitude to the foresight of the delegates to the 2015 ALP National Conference, because their courage made possible a Labor Party that fully lives our values of democracy, fairness and empowerment, and as a result we have built an Australia where all of our citizens can politically, socially and economically participate in our local communities and national life. And we are the better for it.

    Stuart Whitman has been National Convener of Local Labor since 2011 and is a former Secretary of the Malvern branch. Stuart has worked as an electorate officer to Mark Dreyfus, Federal Member for Isaacs and he is currently assisting Senator Jacinta Collins in her work as Deputy Chair of   the Senate Legal and Constitutional Affairs Committee.

  • Peter Blackrock. Germany in control.

    What is happening in the European Union and Eurozone? Clearly, there is a seismic shift underway. Here is one interpretation of what is happening.

    The key driving force behind the shift is the German Finance Minister, Wolfgang Schaeuble. He is the number two in the right-wing Christian Democratic Union, behind Chancellor Angela Merkel, although many say he really calls the shots. He is 72.  He’s a nationalist. He is a fiscal conservative. He doesn’t believe Germans should keep paying for the sins of their fathers by prostrating themselves before the European Ideal. He wants to leave behind a legacy.  Time is short.  He must move fast.

    His plan is to winnow out the dead-beat nations in the Eurozone (e.g. Greece) and create a Northern European Co-prosperity Sphere with close political integration and one fiscal czar. This will be a taut and terrific team under the control of a German coach and German captain.

    Indeed, the main reason why Germany refuses to give Greece (or other struggling Euro-nations) serious debt relief is because debt gives Germany tremendous political control.  It can squeeze out any nation it doesn’t want on the team (e.g. Greece) and force other states to agree to greater political integration (under the German coach and captain).

    In the recent negotiations over Greece’s debt, Schaeuble made it very clear that he wanted Greece to exit from the Eurozone. He was not bluffing or posturing. Indeed, he must be very surprised that the Greek Government (full of lefty types who believe much more strongly in Europe than Schaeuble does) were so desperate to accept the Carthaginian Peace on the table.

    However, Schaeuble will not be denied. He knows that, if he keeps squeezing, Grexit is inevitable, sooner rather than later. Then Germany will move on to expel any other weaklings in the Eurozone. Then those nations will be off the Eurozone’s books and there will be no more bail-outs or whining about diktats from Brussels.

    The French and Italians, of course, are desperate to join the first team that Schaeuble is building. That’s why, in the last few days, the French President, Francois Hollande, has started talking about greater political integration in Europe.  He can see the writing on the wall and wants to look like he led the charge to closer integration rather followed it.

    The United Kingdom is a separate case. It won’t be on the new team because it has an unruly democracy and isn’t a team player. It will soon drop out of the European Union all together.

    Greece should accept it will never be invited to join the first team and accept its inevitable demotion to the second division.  However, if it plays smart (and uses a pegged currency to maintain discipline) it might do rather well, eventually.

    Thus ironically the Eurozone, which was originally designed to control Germany, has become an instrument of Germany control.

     

     

     

  • James Button. A Moment of Unexpected Hope

    From the local Labor journal, Grassroots – Party Reform, Past, Present and Future.

    This should be a moment of unexpected hope for the ALP. Remarkable election wins in Victoria and Queensland, theopinion polls tracking well, another Liberal Government exposed as mean, tricky and out of touch…it all suggests that after the debacle of the last federal election Labor might be back in power far sooner than anyone could ever have hoped for. The climate of ideas should be on Labor’s side, too. The great policy challenge of the day – how to sustain economic and jobs growth while expanding opportunity and protecting the environment – is going to require smart, interventionist government; laissez-faire won’t do it. 

    “The world is waiting for the Labor Party,” said former Western Australian Premier Geoff Gallop when launching an Open Labor group in Sydney last year.Why, then, do ALP members an supporters  feel  so uninspired?

    Perhaps it is because the party’s recovery seems fragile, even a mirage. Eighteen months after our lowest federal vote in more than 100 years, the ALP is still in trouble. What we stand for, and whether we have the capacity for renewal on the basis of big ideas and a compelling platform, remains unclear. Even if disenchantment with Tony Abbott or his successor gifts Labor the next election, what then? What’s the long-term plan for changing Australia? Winning for its own sake is not enough.

    Bill Shorten has said he wants to rebuild the party and grow the membership to 100,000. He has set the scene for the July National Conference to enact reforms to make party structures and the preselection of parliamentary candidates more democratic.

    Shorten’s focus on party reform is admirable, and if he has a real shot it could place him with Labor leaders like Ben Chifley, Gough Whitlam and Bill Hayden, all of whom renewed the party from opposition, but will this Bill be bold? And if so, can he bring the factions with him?

    Based on the ideas of his reform speech in April last year, Shorten is likely to push for increased rank- and-file say in selecting candidates and delegates to National Conference, consideration of trials of primary-style preselections that involve Labor supporters as well as members, and lower fees and a one-click sign-up model to supersede the absurd obstacles that confront many people trying to join the party today. These are all worthy ideas, but unless Shorten’s ambition is greater than he has revealed to date, they fall well short of a substantial reform package.

    Reform matters for many reasons; for one, it might break down the mistrust that runs deep between the leadership and ordinary members, and renew hopes that there is still a place for ordinary people in politics beyond working the phones and handing out cards in election campaigns.

    The members mistrust the party professionals, whom they see, with important exceptions, as focused on personal advancement over principle and unwilling to share power with the rank-and-file. The leadership, for its part, mistrusts the members – they are too few, too old, too prone to fighting lost causes and too out of touch with the realities of Australian life to be entrusted with a real say in candidate selection or party policy. The mistrust is partly a predictable consequence of professionalised politics, yet it must end if the party is to flourish again. How?

    The onus is on the leadership to take a risk and to commit itself to internal democracy in the faith that a party in which ordinary people have a say will   be a larger, stronger and more representative party.

    Opening up preselections to members is a good place to start. For the Senate and state upper houses, which should be forums for Labor’s best policy thinkers not retirement homes for party functionaries, members should get 50 per cent of the vote now, and a commitment for the proportion to increase as party membership grows. Imagine the democratic potential of a statewide campaign for Senate places, candidates having to sell their platform to the people. Similarly, in lower house seats, the proportion of the local vote should gradually increase in line with membership increases in the electorate.

    A growing proportion of delegates to state and national conferences should also be directly elected from the membership.

    At the same time, the leadership needs to retain the capacity to intervene in local votes to ensure the selection of a particularly high quality candidate or when a vote looks like it will be compromised by low numbers or by mischief. But these should be the exception and when the leadership does intervene, it needs to be honest about why it has done so. At present it rarely is. Major decisions, such as central intervention in the Victorian Upper       House preselections in late 2013, or last year’s bringing forward of the Senate preselections of Kim Carr and Steve Conroy to ensure they are exempted from the party’s own unanimously endorsed affirmative action rules, are made behind closed doors and never explained to the membership.

    The party should be able to explain everything it does with a clear, honest statement on its website. If it can’t, the action is almost certainly something it shouldn’t be doing it in the first place.

    Secondly, the ALP must begin the long and difficult conversation about reforming its relationship with the union movement. This should be an opportunity for democratic renewal on both sides. Unions affiliated to the party have a million members; another million belong to unaffiliated unions. Most of these people are natural Labor supporters; if Labor is to expand its franchise for selecting candidates for office, this would seem a good place to start. But it must be on the basis of one vote, one value, in elections conducted by secret ballot. The bloc votes wielded by a small number of union secretaries on behalf of their factions is indefensible in a party that professes to be democratic.

    A democratic party that respects its own people can’t run this way.

    Giving ordinary unionists a direct say in party processes could go a long way towards renewing not only the ALP but the union movement as well, as senior party figures John Faulkner and Greg Combet have written.

    Open Labor and Local Labor have also jointly proposed reforms that would enfranchise ordinary union members while removing the power of bloc union secretary votes.

    Among the four million Australians who voted Labor at the last federal election are many of the country’s smartest and most engaged people. Many of them, even after years of disillusionment, would welcome the opportunity to contribute to Labor policy. Imagine a party that engaged the country’s best minds to help it develop policy through an open process that included not only private advice but public meetings, online forums and wikis.

    Such a process could help Labor embed itself back in the community. While a growing membership is vital, at a time when most people aren’t joiners, the party must find other ways to draw on the ideas and energies of its supporters.

    None of this is easy or without risk.

    But the alternative – doing nothing – is a recipe for slow decline as the leadership and membership grow further apart, and the party becomes ever more closed off from the main currents of Australian life.

    There is a great opportunity for brave, democratic reform. The people who see the need for it – in the party, unions and the electorate – are dispersed but their number is growing. The time to act, though, is now. The world is waiting for the Labor Party. It won’t wait forever..

    James Button is a member of the operating group of Open Labor, a movement created in late 2014 to work toward a more democratic and open ALP and a braver, more principled politics in Australia. New supporters welcome: sign up to our mailing list at www.openlabor.net.au

  • Race Mathews. ‘Let us now begin’

    A local Labor journal Grassroots, has been advocating reform of the ALP to ’empower members, branches and communities’. With the ALP Federal Conference on July 24-26 I will be posting three articles on party reform ‘past, present and future’. I will also be re-posting an article on refugee policy.  John Menadue.

    The philosopher George Santayana wrote famously ‘Those who cannot remember the past are condemned to repeat it.

    A case in point is failure by the Australian Labor Party (ALP) to remain mindful of the circumstances and shortcomings that denied it office from the middle -1950s federally until 1972 and until 1982 in Victoria.

    When I joined the ALP in 1956, it was in dire straits – reeling in the aftermath of the failed Santamaria Movement takeover of the Party and the subsequent splitting off of the Democratic Labor Party (DLP), and in the grip already of yet another extremist and in this instance ostensibly Left external body, known variously as ‘The Trade Unionists’ Defence Committee’, ‘the Ticketing Committee’ or simply and succinctly, ‘the Junta’.

    As noted by Gough Whitlam in an historic address to the 1967 Victorian State Conference:

    The TUDC is not mentioned in the Constitution of the Party. There is no formal link between the TUDC and the handful which selects the Central Executive. It happens, however, that the membership of both bodies is predominantly the same. Thirteen years ago, few delegates at the Conference would have known of the Movement or Mr Santamaria. No one doubts the influence that they had on the Party’s affairs at the time. The Party’s controllers have swung from one extreme to another.

     

    The TUDC’s domination of the Party was achieved through a ’democratic centralism’ that enabled it to dictate the composition of the Victorian Central Executive and Victoria’s representation on the Federal Conference and the Federal Executive.

    Prior to each Victorian conference, an initial meeting of representatives from thirteen TUDC-dominated unions compiled an ‘Official Ticket’ for all Central Executive, Federal Conference and Federal Executive vacancies.

    Subsequently, the ‘Official Ticket’ was endorsed at a further meeting, where representatives of up to twenty-eight more unions were added to the original thirteen.

    With the conference delegations from up to fifty unions thus locked in under caucus rules to support the ‘Official Ticket’, the winner-take-all’ voting system of the day delivered all the available vacancies to the TUDC nominees.

    Domination of the Party by the TUDC cost it an otherwise certain victory at the 1961 elections, together with a further probable electoral victory two years later.

    At the very least, it is likely that if Labor had done less badly at the1958 elections the breakaway DLP would have taken root less successfully and been shorter-lived.

    A Labor government elected in 1961 or 1963 would not have involved Australia in the Vietnam war, or failed so dismally as the Liberals to harness up behind programmes and projects of lasting national worth the great economic prosperity which Australian enjoyed between the middle nineteen-sixties and the oil price shock engendered tougher times of the following decade.

    Nor was this all. As Whitlam’s 1967 Victorian Conference speech also emphasised, the need for Party reform and renewal was no less acute.

    We cannot convincingly oppose the conservatism of our political opponents with a conservatism of our own; we cannot stand as a Party of change when we fear change in our own structure. We cannot expect the people to trust us with the great decision-making processes of this nation, when we parade, by retaining an exclusive and unrepresentative Party structure, our manifest distrust of our own rank and file within the decision-making processes of the Party.

    And again:

    All organisations, including radical parties, have establishments which resist change; all have vested interests. All the arguments for and against for a national organisation, with a national conference directly representing Federal electorates and unions, boil down to this question: Is the Party to be organised in this last third of the 20th century on modern national lines representative of the whole membership of the Party, or is it to remain a committee or coterie composed chiefly of State Branch officers, a significant proportion of whom are paid servants of the Party?

     

    By the early nineteen-sixties, frustration within the Party over the incompetence and authoritarianism of the TUDC was acute.

    The flash point was reached with the decision by the TUDC in 1965 that the provision for the election of three Central Executive members by and from Branch delegates to the Conference as adopted the previous year should be rescinded.

    An official Party body of which I was secretary, the Scoresby State Electorate Council, established a ‘Committee of Inquiry into Representation and Decision-making in the ALP’, which addressed to Branches throughout the state a letter seeking information about their memberships and fund-raising, on which a case for the restoration of their representation might be made.

    The State Secretary, Bill Hartley, thereupon issued instructions to Branch secretaries requiring that the committee’s letters should be returned to him immediately, without providing the opportunity for members to hear them read. Hartley wrote:

    I have consulted on this matter with the state president, Mr W. Brown, and it is to be referred to the Executive Officers next week … Mr Brown has also suggested that all recipients of the correspondence should take no action on it other than endorsing it with the Branch, time and circumstances of receipt, and forwarding it to the Australian Labor Party as soon as possible.

    Concurrently with the Scoresby Affair – and perhaps prompted by it – disaffected Party activists including John Cain, John Button, Dick McGarvie, Xavier Connor, Barney Williams, Michael Duffy, and Barney Cooney established ‘The Participants’, as a group seeking Party reform and democratisation through untiring grassroots advocacy and agitation around the widely circulated ‘Labour Comment’ newsletter, as edited by Bob Murray.

    Their efforts in conjunction with those of Whitlam and other nationally prominent allies including the National Secretary Mick Young and the Shadow Minister for Industrial Affairs Clyde Cameron succeeded ultimately in bringing about the 1970 Federal Intervention and dismissal of the TUDC dominated Victorian Executive.

    The subsequent comprehensive re-writing of the Party Rules and adoption of proportional representation voting for Party office cleared the way for the election of the Whitlam, Hawke and Keating governments.

    Internally, the Victorian Party experienced what is remembered by many as ‘a golden age’ of creative policy development and debate, culminating in 1982 with the election of the Cain government.

    Even so, the hard-won gains have proved to be ephemeral, and a new hegemony indistinguishable for all practical purposes from that of the TUDC has emerged.

    What were in the immediate aftermath of the 1970 Intervention the ideologically differentiated Socialist Left and rightist Labour Unity factions have merged in all but name, through a so-called ‘Stability Pact’ which enables them to divide between themselves the pre-selections for ‘winnable’ parliamentary seats.

    Concurrently the need for strict adherence to secret ballot criteria in the selection process is routinely ignored. ‘Democratic centralism’ is again as endemic as under the TUDC. The effect is to all but wholly exclude from pre-selection or party office members other than those who have factional endorsement.Frustrated on rare occasions in the achievement of their preferred outcomes, the factions routinely refer them to the party’s National Executive where their dominance is all but complete and uncontested, and inconvenient decisions can be overturned.

    It remains for the current generation of ALP members to secure the reinstatement of democracy and the rule of law within the Party, and ensure that it is passed on unimpaired to those who come after us.

    As Whitlam reminds us:

    ‘Those of us who were there have a duty to educate those who were not’

    ‘Let us now begin’.

     

    Race Mathews is a former Principal Private Secretary to Labor Leaders including Gough Whitlam, local government councillor, Federal MP, Victorian MP and minister and academic. He joined the ALP in 1956, and is a life member of fifty-eight years standing.

     

     

     

     

  • Bruce Duncan. Pope Francis calls for a global economy with a conscience

    In his July trip to Ecuador, Bolivia and Paraguay, some of the poorest countries in Latin America, Pope Francis has voiced the anguish and concerns of millions of people struggling to rise out of severe poverty and marginalisation, yet are “exploited like slaves”.

    Speaking to a crowd of two million people in Santa Cruz on 9 July, Francis attacked a mentality that “has room only for a select few, while it discards all those who are ‘unproductive’, unsuitable or unworthy, since clearly those people don’t ‘add up’.”

    It is a world Francis knows well from his own extensive personal experience in Argentina but also from his role as one of the key figures coordinating the ten-yearly meeting of the bishops of Latin America at Aparecida in Brazil in 2007. Not only did he help Pope Benedict prepare his speeches to that conference, but as then Cardinal Bergoglio, Francis supervised the writing of the 160-page final document, reaffirming the role of the Church in confronting poverty and injustice as an essential part of its mission. This document is a forerunner for Pope Francis’s major statements and policies, including the new encyclical, Laudato Si’: on care for our common home.

    A high point of his visit to Bolivia was his hour-long speech to the two thousand delegates to the Second World meeting of Popular Movements in Santa Cruz on 9 July, when he demanded “real change, structural change” to reform “intolerable” conditions for farm-workers, labourers, communities and the earth itself.  He warned that time “seems to be running out” to save the planet from “perhaps irreversible harm” according to the scientific consensus. “Do we not realise that something is wrong in a world where there are so many farm-workers without land, so many families without a home, so many labourers without rights, so many persons whose dignity is not respected?”

    He condemned the “unfettered pursuit of money” as “the dung of the devil”. When “capital becomes an idol” and “greed for money presides over the entire socioeconomic system”, they ruin society and put “at risk our common home”.

    Francis said he had no “recipe” for a social program or a monopoly on truth, but everyone, governments, popular movements and other social forces had to find a way forward together.

    First he insisted on the moral principle that the economy be at the service of peoples, not people at the service of money. “Let us say NO to an economy of exclusion and inequality, where money rules, rather than service. That economy kills. That economy excludes. That economy destroys Mother Earth.”

    It was not enough to offer a “decent sustenance”, but people needed rights to land, lodging and labour, he said, along with access to education, health care, technologies, art and cultural activities, sports and recreation. “A just economy must create the conditions for everyone to be able to enjoy a childhood without want, to develop their talents when young, to work with full rights” and enjoy a dignified retirement. He insisted this was not utopian thinking, but was possible and ‘an extremely realistic prospect”.

    “Working for a just distribution of the fruits of the earth and human labor is not mere philanthropy. It is a moral obligation. For Christians, the responsibility is even greater: it is a commandment.” He urged the popular movements to strive for “the common good to be achieved in a full and participatory democracy”.

    Secondly, he called for peace and justice internationally, and attacked what he called the “new colonialism”. “At times it appears as the anonymous influence of mammon: corporations, loan agencies, certain ‘free trade’ treaties, and the imposition of measures of ‘austerity’ which always tighten the belt of workers and the poor.” He criticised monopolistic media that “impose alienating forms of consumerism” as “ideological colonialism”.

    To a roar of approval from the crowd, Francis also said that “many sins were committed against the native peoples of America in the name of God.” He called on Catholics to beg forgiveness for these past crimes, and to commit themselves to supporting the struggles of the indigenous peoples of Latin America.

    Thirdly, he lamented that “Our common home is being pillaged, laid waste and harmed with impunity.”  “Cowardice in defending” our common home “is a grave sin.” He said they cannot allow certain global interests “to take over, to dominate states and international organisations, and to continue destroying creation.” “I ask you, in the name of God, to defend Mother Earth.”

    Many commentators have been critical of Pope Francis for these views, and the question is how will he manage when he arrives in New York to address the US Congress on 24 September and the United Nations General Assembly. On the flight back from Latin America, Francis said he would study what his critics had been saying to see what he could learn.

    He will certainly not resile from his call for global responsibility to address the threat of ‘catastrophic’ global warming, as well as urging a revolution of conscience about our moral obligations to the millions of impoverished and excluded people. He will not reject capitalism in principle, since he knows there are many forms of capitalism, some with strong social and communitarian features.

    Nor is the Pope opposed to a type of economic growth needed to lift people out of hunger and poverty, as long as this is done equitably, encourages more modest lifestyles and does not damage the environment for future generations.

    But he is strongly opposed to the neoliberal versions of capitalism, the dominance of financial capital, and the belief that free markets of themselves will resolve most problems of distribution and poverty.

    No one familiar with Catholic social teaching, going back to Pope Leo XIII’s social encyclical On the Condition of the Working Class (Rerum Novarum) of 1891, should be surprised at this. The Church has long taught that the earth is given by God for everyone; the right to private property is not absolute but conditional on benefiting the common good, by maintaining productivity in goods and services for the benefit of all. Since Leo, the Church has consistently urged that property be distributed as widely as possible, so everyone had a share sufficient to provide for their family and for security against sickness and old age.

    The neoliberal ideology, on the other hand, exalts the rights of wealthy individuals over and against the common good, and propagates the extreme inequality that has left millions destitute. Francis is calling for worldwide resistance against this ideology, and for reforms to economic systems and business practice to ensure far more equitable distribution of wealth and opportunity. He will undoubtedly appeal for business leaders and governments to help refashion the global economy so that everyone has a place at the table. He is highlighting the moral imperative to build a more just global economy, an economy with a conscience.

    Bruce Duncan is a Redemptorist priest who lectures in social ethics at Yarra Theological Union within Melbourne’s University of Divinity. He is one of the founders of the ecumenical advocacy network, Social Policy Connections.

  • John Menadue. Q&A – Why bother with Ministers?

    The ABC has tied itself into a knot in trying to appease the government and get ministers back on Q&A.  But why bother? If ministers aren’t allowed or don’t want to go on the program, so be it. They would not be missed and neither would most members of the shadow ministry.

    I must confess that I am only an occasional viewer of Q&A.  It is not for me. It unfortunately follows the adversarial and confrontational approach that is so debasing so much of public discussion in Australia on important issues.

    ABC viewers would be much better served in my view by hearing from experts in their own fields telling us the prospects on such important issues as climate change, infrastructure, regional relations, inequality, security and refugees. Unfortunately politicians now invariably obfuscate and confuse the issues, and dish out one-liners and clichés.

    For the ABC to suggest that it would shift Q&A from general programs to news and current affairs has been an invitation for editorial interference by the government. It should be resisted. Who is running the ABC, its board or the government? By suggesting that it would shift Q&A to another department it has given Tony Abbott an opportunity to get himself off the hook that he has impaled himself on.

    In the 1960s Gough Whitlam objected to the ABC insisting that on current affairs programs they would not allow an opposition leader to appear unless there was a minister to provide an alternate view. In the name of ‘balance’ the ABC in effect allowed the government, by refusing to have ministers appear effectively vetoed an opposition leader from appearing.  Fortunately, Talbot Duckmanton, the General Manager of the ABC, was persuaded that the government should not be allowed to veto appearances of opposition leaders.

    Neither should the ABC allow the government now to dictate to Q&A. If ministers don’t want to appear, that would be their loss. In most cases viewers would applaud.

    Tony Abbott said that heads would roll at the ABC over the Q&A spat. Where heads should be rolling is at ASIO for its incompetence over the handling of Man Haron Monis. He was a real danger compared with Zaky Mallah in the Q&A audience. Could there have been a series of more serious mistakes than we saw from ASIO, the AFP and other agencies over Man Haron Monis? Despite enormous increases in funding and powers, our security services escape effective responsibility and scrutiny.  Heads should roll at ASIO, but we needn’t hold our breath.

    There is one rule for the ABC and a different one for ASIO regardless of mistake after mistake.

  • Bob Debus. A breach of faith on renewable energy.

    Well, this is just getting stupid. We are entitled, after events last week, to ask if the Federal Government has the capacity any longer to act in good faith when the interest of the coal industry is at stake.

    Tony Windsor and Barnaby Joyce, whatever their manifest differences, reflected the opinion of local people, the normal application of the precautionary principle and everyday common sense when they protested last week’s approval of the giant Watermark coal mine immediately adjacent to the aquifers and rich farmland of the Liverpool Plains in northwest New South Wales. In any event, no conditions of approval can prevent the destruction on site of 800 hectares of highly endangered box-gum woodlands, their associated rare bird and animal life.

    Australian scientists were also correct last week to wearily dismiss the ‘embarrassing’ support offered by Dennis Jensen MP and other members of the Liberal Party for the establishment of yet another ‘review’ of climate science. It is certain that no country representative at the UN Climate Change Summit in Paris later this year will be questioning established climate science.

    Indeed international concern about the Australian Governments’ climate policies is increasing and condemnation has been coming from some unexpected quarters for a while now. Lord Deben, a former Thatcher Government Minister and head of the Committee on Climate Change in Britain, said last year that, “Mr Abbott is recklessly endangering our future as he is Australia’s”. A leading advisor to the conservative chancellor of Germany described Tony Abbott’s single-minded promotion of the coal industry as an ‘economic suicide strategy’.

    In the last fortnight an exceptionally broad coalition of Australia’s peak business and social groups have come together to support emissions reductions far deeper than anything proposed so far by the Government. They specifically pointed out that “delayed, unpredictable and piecemeal action will increase the costs and challenges of achieving goals and maximising the opportunities” for doing so.

    Unrepentant, Abbott Government Ministers last week moved to take unpredictable and piecemeal action to undermine an agreement reached only in May, which had the acknowledged purpose of returning some certainty for investment in the renewable energy sector. Here is the background.

    The Abbott Government came to office promising to abolish the demonised Emissions Trading Scheme, actually very similar in substance to the scheme previously proposed by John Howard and in principle advocated by Milton Friedman. Last July it became the only Government anywhere in the world to abolish a carbon-pricing scheme: emissions from electricity generation have begun in consequence to climb again.

    Over 60 countries have established renewable energy targets and the Abbott Opposition promised to maintain Australia’s already established, bipartisan 20% Renewable Energy Target (RET) when it came to office. However, in the event it moved quickly to establish a Review of the RET headed by a well-known climate sceptic, an initiative that caused large-scale investment in renewables to freeze almost entirely. Nevertheless, the Review found that the RET was succeeding in cutting emissions and that it would benefit electricity consumers into the future. That is to say, it was made clear that the only beneficiaries of a reduced RET are coal fired generators.

    The Government however, would not relent. Without coherent explanation it conducted protracted negotiation over 15 months before the Opposition reluctantly agree to legislate a reduction in the RET from 41,000 GWh to 33,000 GWh, held steady until at least 2018. Australia became the only country in the world to have reduced a renewable energy target but it seemed at least that an industry that already employs 20,000 people could at least resume growth in a more certain investment environment. But not so.

    The Gillard Government had established the Clean Energy Finance Corporation (CEFC) in 2012 for the same purpose: to assist the application of capital ‘through a commercial filter to facilitate increased flows of finance into the clean energy sector, thus preparing and positioning the Australian economy and industry for a cleaner energy future”. The CEFC has typically contributed funds as part of a consortium, encouraging private banks into the field, across a range of technologies, while ensuring a solid return on its own investment. At any other time in Australia’s political history it would have been regarded as a welcome success.

    However, it too is a victim of the clumsy mash up of anti-regulation neoconservative political ideology, technical error, inconsistency and idiosyncratic prejudice with which the Abbott government approaches the world. The Government’s free market ideals have not caused it to curtail massive subsidies to the fossil fuel industry but it did come to office promising to abolish the CEFC: at first making the demonstrably incorrect argument that its activity crowded out private finance. However, the Senate has frustrated its intention.

    Now, unable to delay investment by stalling the RET or abolishing the CEFC, the Treasurer and the Finance Minister are doing what they see, presumably, as the next best strategy to dampen investment in renewables.

    They have instructed the CEFC not to invest in small solar or wind technology, the two areas which are at present most easily rolled out on a large scale and therefore most likely to bring about rapid increase in actual renewable energy production. The government seeks to suggest that the CEFC should be used only for developing emerging technologies, but this is disingenuous.

    The essential point of the CEFC is to increase the amount of capital investment flowing into technology that increases the production and use of renewable energy. The action of the government is calculated to stop it and if anybody has an explanation that does not involve a breach of good faith I’d like to hear it.

    Bob Debus AM was an ALP member of the NSW Parliament and Attorney General, Minister for the Arts and Minister for the Environment. He was also a member of the House of Representatives and Minister for Home Affairs in the Rudd Government.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

  • John Howard on political Royal Commissions.

    Last September John Howard said

    ‘I am uneasy about the idea of having Royal Commissions or enquiries into essentially a political decision. … I don’t think you should ever begin to go down the American path of using the law for narrow targeted political purposes. I think the special prosecutions in the US are appalling.’

    See link below to John Howard’s comments.   John Menadue

    http://gu.com/p/4xhj7/sbl

  • Miriam Lyons. On inequality of opportunity

    The myth of meritocracy is today’s version of the divine right of kings, and it is playing much the same political function. Call it the divine right of King’s School alumni.

    Another week, another report on the growing gap between rich and poor. The latest, from ACOSS, reminds us that the top 10% of households has been racing ahead of the rest, with the result that almost half of Australia’s wealth is now in their hands.[1] Housing wealth is particularly skewed, a finding unlikely to surprise any first-time buyer who has tried to find a house in Sydney or Melbourne without bankrupting themselves. If Charles Dickens were to reincarnate in Australia, he’d probably make Ebenezer Scrooge a small-time property magnate from Mosman or Toorak, with a penchant for penning angry letters to The Australian in defence of negative gearing.

    The Coalition has made its position on this situation quite clear. Hockey’s latest advice[2] to those locked out of the housing market – “get a good job that pays good money” – is only the latest in a string of pearlers. It follows the same logic as last year’s helpful explanation of how he expected out-of-work young people to survive without an income: “I would expect you’d be in a job”.[3]

    Welcome to the world of lifters and leaners, where the haves and have-nots are all equally deserving of their fate. In this world it is pointless to mention that there are five people out of work[4] for every available vacancy[5]: when one of them does find a job they are to be congratulated for ‘lifting’ and the remaining four condemned for ‘leaning’.

    What does it mean when Hockey and others say that “governments must pursue equality of opportunity, not equality of outcome”[6] while vigorously pursuing greater inequality on both fronts? Last year NATSEM modelling[7] showed that the federal budget would significantly worsen income inequality, with the disposable income of the bottom fifth of households down 6.6% (for couples with kids) or 10.8% (for single parents) by 2017/18, while the top fifth would barely be touched.

    But the government backed down[8] this year right? Ahem. As of this year’s budget, NATSEM’s modelling[9] finds that Coalition policies would hit the disposable income of the bottom fifth of households by…wait for it… 7.1% (for couples with kids) or 8% (for single parents) by 2018/19, while the top fifth will still be pretty much unscathed. Our political conversation is so stunted[10] that a slight slowdown in the rate at which we’re screwing over single parents has been welcomed as progress.

    In this context, the real appeal of equality of opportunity as an idea lies not in its implementation but the aura of moral legitimacy it confers upon inequality of outcomes. As Bill Garner put it in his response[11] to the lifters and leaners speech, it is “the version of equality you claim to believe in when you do not believe in equality at all.”

    As a thought experiment, imagine the likely response of the Coalition (or most other parties for that matter) to the following proposals:
    *100% inheritance taxes (any leaner can be lucky enough to be born to rich parents – unequally distributed windfalls are a clear example of unequal opportunity)
    *Mandating anonymous shortlisting of job applications (one study found that candidates with a Middle Eastern name, for example, have to submit 64% more applications to get the same number of interviews as candidates with an ‘Anglo’ name,[12] while another found that a female fellowship applicant had to be 2.5 times more productive than a male applicant to be deemed equally competent.)[13]
    *Switching to 100% needs-based schools funding, with punitively high luxury taxes on fee-charging schools (surely equality of access to education from birth is ground zero for equality of opportunity?)

    Perhaps Milton and Rose Friedman had policies such as these in mind when they wrote “No arbitrary obstacles should prevent people from achieving those positions for which their talents fit them and which their values lead them to seek. Not birth, nationality, colour, religion, sex, nor any other irrelevant characteristic should determine the opportunities that are open to a person…”[14]

    If we genuinely believe that every human has equal worth at birth, then paying lip-service to social mobility is not enough. There is more than enough evidence to show that we live in a decidedly unmeritocratic world. In fact, this evidence is so strong that it justifies a shift in the burden of moral proof. Rather than assuming that an unequal world is fair unless proven otherwise, let us assume that an unequal world is unfair unless proven otherwise.

    Miriam Lyons is the former Executive Director of the Centre for Policy Development. With Ian McAuley, she has just co-authored ‘Governomics’ which has been published by Melbourne University Press. 

    
    [1] http://www.acoss.org.au/wp-content/uploads/2015/06/Inequality_in_Australia_FINAL.pdf
    [2] http://www.smh.com.au/federal-politics/political-news/joe-hockeys-advice-to-first-homebuyers–get-a-good-job-that-pays-good-money-20150609-ghjqyw.html
    [3] http://www.theguardian.com/world/2014/may/15/joe-hockey-tells-australians-doctor-fee-cheaper-beer
    [4] http://www.abs.gov.au/ausstats/abs@.nsf/latestProducts/6202.0Media%20Release1May%202015
    [5] http://www.abs.gov.au/ausstats/abs@.nsf/mf/6354.0
    [6] http://www.joehockey.com/media/speeches/details.aspx?s=133
    [7] http://www.natsem.canberra.edu.au/storage/2014-15%20Budget%20Research%20Note.pdf
    [8] http://www.afr.com/news/policy/tax/joe-hockeys-budget-backdown-20150204-136ebw
    [9] https://theconversation.com/worst-off-hit-hardest-by-coalition-policies-natsem-modelling-42300
    [10] http://www.canberratimes.com.au/business/the-economy/how-the-abbott-government-stopped-us-talking-about-natsems-modelling-of-their-budget-20150611-ghjm1u.html
    [11] http://www.theage.com.au/comment/lifters-and-leaners-why-the-idea-of-equality-of-opportunity-is-a-big-con-20140617-zsa6d.html
    [12] http://www.canberratimes.com.au/comment/job-hunt-success-is-all-in-a-name-20130303-2feci.html
    [13] http://www.albany.edu/~scifraud/data/sci_fraud_3943.html
    [14] Friedman & Friedman (1980), Free To Choose, p. 145

     

  • John Menadue. London Postcard-some impressions.

    We have just spent three weeks in the UK in Bath and London. But I kept the blog going with the help of friends.

    For years I have largely avoided the UK. When I first visited London in 1963, I was very conscious of social and economic class. It seemed quite unhealthy. Most people knew their place, particularly working people. In 1963 I found it quite a relief to go to Ireland that did not show the same obsession with class. That initial impression in 1963 was followed by the harshness, in my view of the Thatcher years.

    I sensed in my recent holiday that things have changed, at least in the places I visited. There seemed a new social mobility and vibrancy, greater openness and certainly more multiculturalism. The black kids were lively and attractive. There were many East Europeans working in restaurants and shops and they were much more helpful than I recall my experiences of British customer service back in 1963. People on trains were much more courteous than I am used to in Sydney. In short, I have had to revise my views on the UK somewhat.

    I enjoyed the National Gallery more than the Louvre. It was not as overpowering. The art was well selected and the gallery much less crowded. The British Library had a superb Magna Carta exhibition. The impact at the time of the Magna Carta has been exaggerated but it has had a substantial long-term influence around the world.

    With the Greek crisis I was keen to see the Elgin marbles at the British Museum. I hadn’t realised that the British Library was formerly housed in the British Museum where Karl Marx had researched and studied in the Reading Room for years. But the Elgin marbles were my main interest. They were more remarkable and stunning than I expected. I stood in a vast hall with the Elgin or Parthenon marbles on every wall’. And in the next room there were Greek sculptures that I felt were even better than those in the Louvre. .

    Not surprisingly, Gough Whitlam was a campaigner for the return of the Elgin/Parthenon marbles to Greece. The British Museum presents a threadbare argument that the ‘marbles’ in the British Museum ensures even better public access to them than would have been possible had they stayed in Athens! And to add to this threadbare defence of the British, the Museum asserted that they were obtained legally. That might be technically true, but in the early 19th Century when the marbles were removed, Athens was occupied by the Ottoman Turks.

    The early 19th Century was a period of enormous art theft particularly by the British and the French. When considering Greek debt today perhaps the British and French might consider how much they really owe the countries of the Mediterranean that they plundered 200 years ago.

    I have always been an admirer of the National Health Service and in London I found it as good as I had always believed it to be. As a university student in the 1950s, Nye Bevan had been a political hero of mine. The NHS has outlived and outperformed its self-interested critics. It was no surprise that the NHS was the prime feature at the opening ceremony of the recent London Olympics

    In London the public transport system is in good shape and carries an enormous number of passengers each day. We could learn much from the London underground. But despite public transport, London still has major road traffic problems. It illustrated to me again that more and more express and toll roads will largely induce more traffic and will contribute little and at great cost to improving urban living. That is the experience of all major cities but the motor and construction lobbies want us to waste more and more money for their benefit. Good public transport must be associated with effective road-user charges that reflect the real cost, particularly in peak periods that we each impose on other users of the road system. Road tolls and road congestion taxes may be difficult politically but they are essential for urban living in big cities. More and more roads are not the answer.

    Our UK visit was just a few weeks after the general election with the return of the Conservative Party to government with a narrow majority in its own right. The Conservative Party gained 36% of the vote but with the vagaries of first-past-the-post polling, it won 51% of the seats in the House of Commons. The real wipe-out was the Liberal Democrats across the country and the Scottish National Party taking 56 of the 59 seats in Scotland with massive swings. Scotland, had always voted overwhelmingly Labour until this election. The UK Independence Party, which campaigned against continued UK participation in the European Union polled 12% of the vote but only won one seat.

    The Cameron Government may yet reap a bitter harvest from the last election. It has promised a referendum by the end of 2017 on whether the UK should exit the EU. This will give vent to the parochialism that I had hoped the UK had left behind. For the next two years, the issue of UK remaining or leaving the EU will be the focus of political attention and distract from many other key issues. If the UK decides to turn its back on Europe, I think the UK and Europe will be the losers.

    Additionally, if the UK decides to exit the EU, that is likely to trigger a new referendum in Scotland and encourage a Yes vote for Scotland to leave the UK.

    The Scots have little to thank David Cameron for. A major thrust of his recent election campaign, encouraged by his Australian advisers, was to warn the English that if they voted Labour, they could finish up with a Labour Party/Scottish coalition government. Cameron strongly played the anti-Scotland card in England. That deliberate and successful tactic meant that the Conservatives won well in England. The message was clear. Beware of the Scots.

    History may yet reveal that the significance of the UK election was that the UK left the EU and that was followed by a breakup of the UK itself. The Scottish Labour Party is committed to the United Kingdom but the Scottish National Party seeks separation from the United Kingdom. Gordon Brown, a Scot and former UK Prime Minister has warned that as a result of Conservative tactics the United Kingdom may be on ‘life support’

    In London there was understandable outrage over the deaths of over 30 UK tourists in Tunisia. In response and like Tony Abbott, David Cameron described IS as an ‘existential threat’. Clearly it is not. The existence of neither the UK nor Australia is threatened by IS. It is one thing for David Cameron and Tony Abbott to promote fear about the terrorism threat for political purposes. It is much harder to combat the causes of terrorism and IS in particular. Yet it is the policies of the UK, Australia, the US and others in Iraq, Afghanistan and Libya that have mainly served to worsen the terrorism threat. The history of Western aggression, exploitation and colonisation over centuries in the Middle East has played into the hands of extremists. Our policies have created anarchy in the region. We side with the despots like Saudi Arabia and the Gulf monarchies. Australia and the UK recruits to IS are transiting through Turkey. But we don’t want to offend Turkey by insisting that it closes these transit routes.

    I was reminded again in the UK that we will not begin to contain IS unless we first accept that our policies in the region have been counter productive to our own security as well as the security of the people in the Middle East. We need to build strong partners in the region and that includes Iran.

  • Warwick Elsche. Heads must roll at ABC, but not at ASIO

    “Heads must roll;” words from the Prime Minister Tony Abbott. And in case you missed them he said them twice – on national TV.

    He was talking of the ABC and presumably some executives who failed to detect the “threatening” presence of a convicted Islamist sympathizer Zaky Mallah in the audience of popular current affairs program “Q&A”.

    Tony dislikes the ABC because it is not as imaginatively sycophantic as the Murdoch Press. He has branded it on this and other occasions as cruelly politically biased – despite the fact that the Head of his own media office was recently recruited from this source.

    For those unfamiliar with the now accepted dictum in politics that for Tony “things are not what they are, they are what Tony says that are” – he actually believes this – such public anger from the Prime Minister on a virtual non-event could indeed be puzzling.

    The ABC, after all, is not a security organization. It is merely a major national media outlet and the man whose appearance on the program so outraged the Prime Minister, has appeared more than a dozen times in other media, including Abbott’s favoured Murdoch newspapers and the most hopelessly pro-Government Sydney Radio Station 2GB without a murmur of protest from the zealous Tony. Indeed some of those reports had indicated a significant change of heart by the man in question.

    But despite the fact the ABC has no role in security detection or prevention, weeks later Tony remains righteously outraged and continues to rattle on about the ABC’s failure and the threat which Tony thinks was posed by Zaky’s appearance for the first time in one of its studio audiences.

    Consequently, according to Abbott, “heads have got to roll.”

    The Australian Security Intelligence Organization – unlike the ABC – is a security body; Australia’s most senior where internal intelligence and subversion are concerned. It is much-loved by Prime Minister Abbott.

    ASIO had dealings with an Iranian refugee from whom they hoped to gain intelligence on the running of a country which seems to be an implacable enemy of the United State and therefore of Australia under Tony. Contact continued with this Iranian for a good long time. Like the man who slipped under the ABC radar, this individual had two convictions for offences which might indicate profound terrorists sympathies. He sent abusive mail to parents of Australian soldiers who had died fighting terrorism in Afghanistan. He was also on bail as an accused accessory in the stabbing and burning murder of his wife. He was also on bail on no fewer than 40 serious sex charges. He had landed in Australia fraudulently, and over the period of a fortnight ASIO, Federal Police and other so called security bodies had received more than a dozen individual calls warning of threats this man might pose. Yet no action was taken.

    The ASIO contact was Man Haron Monis. At the end of that two week period of warnings the contact held up some 20 hostages in the Lindt Coffee Shop in Sydney’s Martin Place in a 17 hour siege which resulted in three deaths including his own.

    When asked how this murderer escaped the special attention which might have prevented the Martin Place tragedy, the Chief of ASIO explained simply “he did not come up on our radar.” It was later also learnt that Man Haron Monis had written to Australia’s most senior law officer, Federal Attorney General George Brandis, virtually seeking permission to contact the leader of ISIS, the terrorist organistion in the Levant to which Australian Air Force and Army forces are opposed. He seems to have slipped under this law officer’s radar also. Brandis later explained the letter seeking the ruling on contact with ISIS leaders indicated no support for either side despite the background of the author. And it seems he slipped under the radar of Senator Brandis’ office and departmental staff again, because despite misleading statements to Parliament, information about his desire for a contact with the terrorists was not even provided to the joint Federal-State enquiry into Man Haron Monis and the Martin Place siege. Once the Parliamentary deception was uncovered it took a full three days until Parliament was informed on the misinformation – and then only after the possibility of revelation by one of the principals in the enquiry became a threat.

    Extraordinarily, Abbott has had nothing to say about these spectacular failures by security and supposedly legally responsible organizations while continuing to berate the ABC – as if it matters.

    The game now is to cover up, despite demands from the New South Wales Coroner probing the Martin Place deaths as to how the killer with his background and convictions and his string of pending charges remained on bail. The Feds seem desperate to keep it covered up – they went so far as to pressure the New South Wales DPP to keep concealed the reasons that a man facing such charges could be bailed. Who are they saving from embarrassment? Tony doesn’t seem to care or want to know – not while the ABC is there to be attacked.

    One wonders at the competence, the political judgement and maybe even the honesty of a Prime Minister whose values seem so hopelessly skewed. Far more serious failures which led to the raid and deaths seem to have attracted no comment at all from the man who spends a good part of his public time rattling on about threats and security.

    Not a word about rolling craniums in ASIO, not one either about George Brandis, his office or his department.

    The real threat, to Tony, remains the ABC. They must be punished.

    Remember! Tony really believes that in politics ‘Things are not what they are. They are what Tony says they are’.

    It might also be worth asking what one might have to do, given Man Haron Monis’ record, to actually come to the attention of the super sleuths of ASIO.

  • Michael Keating. Greece’s Predicament

    The front page news story for weeks now has been what is happening to Greece and what will happen. The markets, the various authorities and the media all treat Greece’s predicament as if it were solely a matter of excessive debt. Therefore austerity is justified as being essential to bringing the debt back under control, and gradually paying it back.

    But this is very much a financier’s view of Greece’s problems and those Governments whose views are coloured by their involvement in arranging and/or guaranteeing the finance. What has so far escaped attention is how Greece, while locked into the Euro, has become completely uncompetitive.

    Competitiveness is best represented by what has been happening to Greece’s unit labour costs, and since 1990 unit labour costs have risen by almost 300 per cent in Greece compared to only 36 per cent in Germany. Even if we assume that Greece was fully competitive when it entered the Euro in 2001 – and it almost certainly wasn’t – then between 2001 and 2010 Greece’s unit labour costs rose by 48 per cent compared to only a 4 per cent rise in Germany. These are massive differences in the evolution of costs between the two countries, which have now made Greece completely uncompetitive.

    Furthermore it has been this loss of competitiveness that has mainly been responsible for driving Greece into debt. Thus as imports became less expensive relative to Greek products, the higher Euro denominated wages that Greeks were paying themselves allowed the Greeks to buy more than they were able to sell. And the sad fact is that this loss of competitiveness and markets not only led to increasing debt but also to rising unemployment as both Greek and foreign customers switched away from Greek products.

    So where to from here? One thing we can be certain about is that while Greek costs continue to be uncompetitive there is little hope that full employment and stability can be restored.

    Instead the present policy response with its focus on increased “austerity” is intended to reduce consumption by the Greek’s, and their living standards, and in that way reduce the Greek national debt. The burden of this strategy, however, falls almost entirely on those who don’t have jobs – be they pensioners or workers and their families who can no longer gain employment.

    Over time there is of course a chance that the rising unemployment may lead to lower costs and thus a slow improvement in Greek competitiveness. Indeed since 2010 unit labour costs have fallen a little in Greece and risen a little in Germany, thus reversing a small part of the previous loss of Greek competitiveness. But as Keynes pointed out in a similar situation in the Great Depression, in such a long run we will all be dead before full employment is restored.

    Frankly as was discovered a long time ago, the reality is that fixed exchange rates usually cannot be maintained indefinitely , and they have no hope of working unless there is much more policy coordination than has been apparent in the Euro Zone to date. Instead Greece would be much better off if it devalued and thus restored its competitiveness. The resulting reduction in Greek costs would enable Greece to sell as much as it can produce, while imports would become less affordable. The overall result would be lower debt and an increase in employment.

    This devaluation would, however, only work if it led to a genuine reduction in Greek labour costs, which implies a comparable reduction in living standards. The difference between this and continuing austerity is that the reduction in living standards following a devaluation would be widely shared instead of falling largely on the increasing number of Greeks who do not have a job.

    The sad thing is that the Greek Government having won a referendum against the austerity package, still seemed determined to avoid a Grexit, although that is the only strategy that will actually succeed. Nevertheless, a Grexit is not without its dangers, but these dangers multiply if preparations for it are postponed. The worst outcome would be for a Grexit to effectively be forced by markets after a disorderly capital flight, and the longer the delays the greater the risks.

    Finally for those who regard a major devaluation and a writing-down of a country’s debt obligations as akin to a disaster, it is worth remembering that this is what Argentina did not so long ago, and it was generally conceded to have worked then. But it only worked while the authorities maintained a strong discipline on costs and accepted the loss of borrowing capacity and the implications for living standards. This is the message that the Greek leadership should be delivering, and again the delays are not propitious.

     

     

  • John Menadue. Is the European Project finished?

    Perhaps the Greek crisis will force a fundamental rethink and Europe will find the way to rekindle again the idealism and hope that gave rise to the European Project in the aftermath of WWII.

    By any means ‘Europe’ has been a remarkable success in social development, human rights, economic growth, the mobility of people and capital – but most importantly of all, a seventy year period of peace. After centuries of war, mainly religious wars, followed by WW1, Hitler, the Holocaust and Stalin, Europe has been at peace.

    The founders of the European Project spoke with great idealism of ever-closer union in Europe.

    But the signs are not good today. This is highlighted particularly by the political and moral gap between the ‘hard-working’ Germans, the ‘lay-about’ Greeks, with France looking more insipid every day. The early success of Europe depended on France to balance the power, strength and even threat of Germany.

    Germany’s reputation and its development in almost every way have been remarkable since WWII. That success has been in part due to its own efforts, but also through the generosity of the US and others in forgiving Germany its sins and its debt. The allies learnt from Versailles after WWI that punishing a defeated Germany only produced more tragedy.

    Unfortunately today Germany shows all the signs of bullying Greece for its mistakes and repeating the mistakes of Versailles.

    In an interview a few days ago with German newspaper Die Zeit, Thomas Picketty called for a major conference on European debt and emphasized that Germany in particular should not withhold help from Greece. Picketty said

    ‘My book (Capital in the 21st Century) recounts the history of income and wealth, including that of nations. What struck me while I was writing is that Germany is really the single best example of a country that, throughout its history, has never repaid its external debt. Neither after the first nor the Second World War. However, it has frequently made other nations pay up such as after the Franco-Prussian war of 1870 when it demanded massive reparations from France and indeed received them. The French state suffered for decades under this debt.’

    In the current fevered atmosphere the signs are not good with the European Union, the European Central Bank and the IMF, together with Germany, bullying Greece to comply with their austerity program.

    The European Project has been littered in recent years by serious mistakes and problems

    • The Euro is a major problem. It is very difficult to envisage how a monetary union can work effectively without a fiscal union. The result has been that Germany and Northern European countries have benefitted from a weak Euro at the expense of Greece and other Southern European countries.
    • There is widespread unemployment particularly in Southern Europe which has been foisted on the Greeks, Spanish and others in the name of budgetary reform and austerity. The message has been clear both explicitly and implicitly to the Greeks – change your policies or we will destroy your government.
    • In the last few days the European Central Bank has cut off Greek access to additional funds and helped precipitate the panic in Greece. The Greek Central Bank has worked in league with the European Central Bank.
    • It wasn’t just irresponsible borrowing by the Greeks that caused the problems. Ther was irresponsible lending by the banks and companies such as Goldman Sacks that helped Greek debt-managers manipulate the debt figures. The financial sector must be contained.
    • Political extremism on both the Left and the Right is today flourishing in Europe. It is no surprise.
    • Quite contrary to what Presidents Regan and Gorbachev agreed, NATO has extended itself eastwards to the Ukraine and the border with Russia with inevitable dangerous consequences. Have Europe and NATO forgotten WWII and the tragedy and losses on the Eastern Front?
    • The ‘Little Englanders’ in the UK are now reasserting themselves with David Cameron proposing a referendum in 2017 on possible UK exit from the European Union and with the UK Independence Party polling 12% at the last general election.
    • Hungary is planning to build a fence along its border with Serbia.

    The fraying of Europe is obvious. It shows not only in political but also has a moral dimension. The Italian Prime Minister, Matteo Renzi, recently commented on Europe’s failure to properly address the difficulties of thousands of refugees coming to Europe. He said ‘If this is your idea of Europe, keep it to yourself … You do not deserve to call yourself Europe. Either we have solidarity or we are wasting our time.’

    The Germans seem to have ignored the advice of former German Chancellor, Helmut Schmidt, three years ago when he said ‘If we Germans allow ourselves to be seduced into claiming a political leading role in Europe or at least playing first among equals, based on our economic strength, an increasing majority of our neighbours will effectively resist this. The concern of the periphery about an all too powerful European centre would soon come racing back. The possible consequences of such development would be crippling.’ That crippling is occurring today and Angela Merkel doesn’t seem to understand.

    Can we dare hope to see again the moral and political leadership that we saw from people like Helmut Kohl, Helmut Schmidt , Francois Mitterrand and many more. None of them had forgotten the horrors of WWII and set about with idealism and hope to build a new Europe. The current generation of leaders has never known the travail that these earlier leaders experienced.

    This is about much more than Greece and its debts and austerity. But hopefully this crisis will force European leaders to show the courage and foresight that its forbears showed decades ago. The European Project is in trouble, but it is worth renewing. Will the bankers and small-minded get out of the way? With no vision from their leaders, the people of Europe are suffering.

  • Greek Crisis

    See below links to two interesting articles.

    The first is by Paul Krugman, ‘Ending Greece’s Bleeding’ in the New York Times.

    The second is by Thomas Picketty ‘Germany has never repaid’ from the German newspaper Die Zeit.

    http://www.nytimes.com/2015/07/06/opinion/paul-krugman-ending-greeces-bleeding.html?rref=collection%2Fcolumn%2Fpaul-krugman

    https://medium.com/@gavinschalliol/thomas-piketty-germany-has-never-repaid-7b5e7add6fff

  • Failure in Afghanistan. We don’t want to talk about it.

    On the 24th June, I posted a link to a review from the London Review of Books.  (See  https://publish.pearlsandirritations.com/blog/?p=3957) In referring to the UK involvement in Afghanistan, it was headed ‘Worse than a defeat: shamed in Afghanistan’. The review by James Meek said

    ‘The extent of the military and political catastrophe [in Afghanistan] it represents is hard to overstate. It was doomed to fail before it began and fail it did, at a terrible cost in lives and money. How bad was it? In a way it was worse than a defeat because to be defeated an army and its masters must understand the nature of the conflict they are fighting. Britain never did understand and now we would rather not think about it.’

    We have had few independent examinations of the Australian failure in Afghanistan in which 40 Australian soldiers were killed, 261 wounded and with untold tragedy for the Afghan people. Operation Slipper was our longest war in history and cost $7 b. to $8 b.

    Few and certainly not our major political parties want to talk about this failure for which they were responsible. In particular, the Coalition parades its credibility on security matters and prefers that we forget its military disasters from Vietnam to Iraq, to Afghanistan, and now to Iraq again. Ministers and a succession of Generals and ‘advisers kept telling us nonsense about the progress we were making in Afghanistan. Honesty would have been helpful then and now.

    The SMH on 4 July sheds some light on our failure in Afghanistan. Sune Engel Rasmussen reports that ‘Despite an eight year mission costing billions of dollars, unrest and instability remain.’ (See http://www.smh.com.au/good-weekend/all-that-remains-our-questionable-legacy-in-afghanistan-20150702-ghpley.html)

    Rasmussen is a freelance journalist based in Kabul. He writes for the SMH, The Guardian, The Economist and other media organisations.

  • Pearls and Irritations Policy Series

    Link to Fairness, Opportunity and Security.
    Policy Series edited by Michael Keating and John Menadue. 

    https://publish.pearlsandirritations.com/blog/?p=3719

  • John Menadue. The Greek crisis and regime change.

    Current Affairs

    A lot of the blame for the present crisis should be borne by many countries and institutions, but the one group that is least responsible is the present left-wing government of Greece, Syriza.

    The major blame must rest first with the previous Greek governments that mired the Greek people in corruption and cronyism. The second group that must bear immediate responsibility is the incompetence of the Troika – the EU, the European Central Bank and the IMF, led very much by the German Government. The austerity campaign inflicted on Greece has resulted in the GDP shrinking by 25%, accompanied by unemployment of 25%, and youth unemployment of 50%. Such a situation is unacceptable and is likely to result in extreme outcomes. Something just has to give in Greece.

    In this situation there are now suggestions reported by the London Times that ‘Germany will demand the Greek Prime Minister, Alexis Tsipras and Finance Minister, Yanis Varoufakis, resign as a condition for a new Eurozone bailout.’ If this is correct it sounds very much as if regime change is being engineered. Is the object of such a plan to break the Greek Government so that the austerity plan of the northern European countries can continue? Such a plan is outrageous. These austerity plans have caused not only major social problems in Greece, but also in Spain where an election is due in December this year.

    In retrospect, the Euro looks a bad idea, particularly when it links such diverse economies as Germany and Greece. Germany has gained economically from a weak Euro caused largely by the weak economies of southern Europe. It may not be overstating it to describe the Euro as really the Deutsche Mark in disguise. The Euro has given considerable benefits to German business and exporters. In turn, it has made southern European countries less competitive.

    The austerity driven by the Troika with German leadership has resulted in political extremism of both the Left, as in Greece, and the Right, as in France.

    For over a decade sensible economic management in Greece has been frustrated by widespread corruption and cronyism. Tax avoidance on a wide scale became acceptable by previous Greek governments. Urging Greece today to raise taxes to meet its budget deficits does not make a great deal of sense when so much tax is avoided. The crony friends of previous governments have become rich at the expense of the Greek economy and society.

    The banks in Europe and in Greece have behaved irresponsibly with their loose lending. Just as it was incorrect to blame low paid Americans for accepting sub-prime mortgages, so the blame for borrowing by the Greek people cannot be sheeted home to poorly paid Greeks who needed credit to survive. It is noteworthy that in the present negotiations the banks have refused to include debt-relief as part of a settlement package.

    Escalating public debt has been made worse by the irresponsible behaviour of that doyen of international finance, Goldman Sacks. In 2002 Goldman Sacks helped Greece to mask its true debt. Goldman Sacks persuaded the Greek debt managers that they could avoid Maastricht rules on budget deficit limits. The result of the Goldman Sacks device was that $1 b. did not show up in the Greek debt statistics.

    The overbearing attitude of the victors after WWI imposed a severe burden on the defeated Germany which it never forgot, with appalling consequences. In the US, the US Treasury decided to let Lehmann Bros fail to teach the market a lesson. The Troika in northern Europe seems intent on teaching the Greeks a lesson.

    Instead of their resolve to crush the Greek upstart government, the Troika in Germany should look at their own failures and also the long-term future of Europe. What has happened to ‘European values and solidarity’ that inspired Europe in the past? The Troika has a lot to answer for in the current crisis. Hopefully a resolution can be found that respects the rights of the Greek people and places Europe on a continuing path of development.

    Surely in the cradle of democracy the Greeks will want more control over their own destiny!

    See link below for an account by Jeffrey Sachs. He describes the behaviour of the Troika and others as ‘petulant, naïve and fundamentally self-destructive’. He adds that many of Greeks citizens are hungry, with conditions reminiscent of those in Germany in 1933.

    Jeffrey Sachs is Professor of Sustainable Development and Professor of Health Policy and Management, at Columbia University. He is also Special Adviser to the UN Secretary General on the Millennium Development Goals.

    http://www.spiegel.de/international/europe/greek-debt-crisis-how-goldman-sachs-helped-greece-to-mask-its-true-debt-a-676634.html

     

  • Bob Kinnaird. China FTA ‘labour mobility’ fight looms

    Current Affairs

    The ALP National Conference at end-July will likely have before it an urgency motion demanding changes to the foreign worker provisions in the China FTA as a condition for supporting the agreement, according to The Australian (‘Change or block unjust trade deals, MPs told’, 26 June 2015).

    Driving the move is a cross-factional group of eight unions concerned about the impact on Australian workers of FTA provisions mandating easier access to Chinese 457 visa workers, in some cases unrestricted access.

    On top of that, it has now emerged that an FTA side-letter removes mandatory skills assessments for Chinese 457 workers in ten trades including electricians and the main construction trades. This directly contradicts Abbott government assurances in November 2014 that Australia had committed only to ‘improving access to skills assessments” in the China FTA.

    Opposition Leader Bill Shorten wants Parliament to scrutinise the FTA and “the government to come clean on potential downside for Australian jobs and Australian safety and labour standards” (‘Union trying to cause a diversion: Robb’, The Daily Telegraph 29 June 2015).

    Trade Minister Andrew Robb has said the government would not change the provisions in the deal “one wit” (sic) – presumably The Daily Telegraph meant ‘whit’. He was sure that unions opposing the deal ‘don’t understand’ the China agreement.

    The unions increasingly understand what the China FTA labour mobility provisions actually mean for Australian workers, blue-collar and white-collar alike, but no thanks to Mr Robb. Instead of explaining and justifying these momentous provisions, Mr Robb and other Coalition Ministers have done everything to conceal the truth from the Australian community.

    Immigration Minister Dutton or Assistant Immigration Minister Cash issued three media releases on the China FTA between 17 June when the deal was signed and 26 June – ‘New pilot visa to boost Australian tourism’, ‘New visa measures generate international buzz’ and ‘Minister Cash to visit China’.

    In none of these statements do the Immigration Ministers even mention the momentous immigration concessions by Australia in the China FTA or their broader implications. The 457 visa program does not rate a mention, let alone that the China FTA removes the ability of all future Australian governments and Parliaments to apply labour market testing to all Chinese citizens in the standard 457 program.

    Nor do the Ministers bother to even mention two other unprecedented immigration concessions by Australia in an FTA, or even outside an FTA: the ‘Infrastructure Facilitation Arrangements’ (IFAs) agreement with China allowing concessional 457 visas for skilled and semi-skilled Chinese workers, and the non- reciprocal ‘Work and Holiday’ visa agreement that provides ‘up to 5,000’ 462 visas each year for young Chinese to live and work in Australia for a year (extendable) with no reciprocal visa arrangement allowing any young Australians to visit and work in China, let alone 5,000.

    These releases instead are mostly puff-pieces about the benefits for the tourism industry of changes to visitor visa rules for Chinese people, making it easier for Chinese tourists to visit and stay in Australia.

    Minister Cash’s latest release informed us that in China this week she ‘will undertake meetings with Chinese government counterparts, industry stakeholders, and China-based Australian businesses’. This ‘is particularly timely given the historic China Australia Free Trade Agreement’ (among other things), her release said.

    No further information was given about the Minister’s agenda for these China discussions. It may be that Australia’s Assistant Immigration Minister is, cap in hand, seeking Chinese approval for how the Australian government proposes to implement its FTA commitments on the IFAs in favour of Chinese 457 workers. The Australian Parliament will surely have a view about governments making Australian immigration laws in this way if it is presented with a fait accompli by the Minister when she returns.

    Hopefully before the ALP National Conference the government does ‘come clean about the potential downside for Australian jobs’ in the China FTA, as the Opposition Leader has called for. If this was an honest government, it would admit two more downsides to its China FTA concessions that are fatal to its claims to be in Australia’s national interest.

    First, the FTA 457 concessions give China increased scope to export some of its unemployment to Australia if things go bad in the Chinese economy, eg by pressuring Australian firms wanting Chinese market access or investment to take on Chinese workers over qualified Australians. By removing any legal obligation on employers to even look for Australian workers, the Abbott government is opening the door wide to this abuse of the 457 visa program.

    Second, removing the ability of all future Australian governments to legislate in favour of Australian citizens and residents over Chinese citizens in the standard 457 visa program greatly increases the risk of future Australian job losses. It removes a vital policy tool Australia will need to manage future economic shocks including those arising from our increased exposure to China. On this ground alone it is reckless and irresponsible.

    Bob Kinnaird is Research Associate with The Australian Population Research Institute and was National Research Director CFMEU National Office 2009-14.

     

  • John Tulloh. Why Eritreans are crossing the Mediterranean.

    Current Affairs.

    ERITREA: THE NORTH KOREA OF AFRICA 

    It is the seventh youngest nation in the world. It was born in 1993 after a 30-year war. Its flag was raised for the first time as an independent nation with high hopes for democracy in a continent dominated by too many despots. In its first years it set an example of frugality when its people were encouraged to ride bikes and, what vehicles there were, had to be modest small ones. Its original leader is still in charge 22 years later. Time for an election? ‘Never’, he said. Instead he has created a harsh dictatorship with thousands of desperate citizens deciding life must be better elsewhere. Hundreds have died in the process. Their country has been likened to North Korea.

    Such is life in Eritrea, the sun-baked former Italian colony on the African shore in the south of the Red Sea. Its people today cause nervousness in the capitals of Europe. They make up a considerable proportion of asylum-seekers risking their existence among the huddled masses crossing the Mediterranean to make a future in Europe.

    Recently, the UN took a look at how the fledgling nation was doing. Its report was damning. The initial sense of democracy, it said, ‘has been extinguished by the government under the pretext of national defence’. The UN investigators said the regime of President Isaias Afewerki was guilty of extra-judicial killings, widespread torture, sexual slavery, Orwellian mass surveillance and enforced labour. In short, it may have committed crimes against humanity.

    Eritrea has a system known as ‘national service’. The report says this really involves ‘arbitary detention, torture, sexual torture, forced labour and absence of leave’. Compulsory military service can be open-ended, continuing for years. Avoidance can lead to execution. Women recruits are rounded up to satisfy the lust of their commanders. Eritrea is a country ruled not by law, but by fear, said one of the UN investigators.

    No wonder five percent of Eritreans have fled, according to the UN. Even that can be dangerous. Abandoning the country is regarded as treachery and until last year soldiers at border crossings routinely shot anyone trying to escape. It is a similar story for North Koreans who’ve had enough of their country.

    It is a sad tale when the birth of Eritrea was greeted with such lofty expectations. A reporter for the Washington Post was moved to write:

         On a continent of millionaire dictators, where broken promises of democracy dovetail with collapsing living standards and unpayable debts, Eritrea’s revolutionaries hold out the possibility of an efficient, self-reliant African nation, run by Africans who have had 26 years to learn from the failures of independent Africa. 

         The trouble is that they didn’t learn or didn’t want to know. As a result, Eritrea has ended up like the Ethiopian regime – the Derg – which it fought for the three decades to get rid of. Its ratified constitution was suspended with no explanation and has now been abandoned altogether. Promised elections at the outset never took place and again without explanation. All private newspapers were closed and their journalists detained. Land was nationalised. Aid agencies were driven from the country. ‘Short of North Korea or an ISIS slave cave, there’s no more hopeless place on earth’, wrote Spectator columnist Mary Wakefield last month.

    Eritreans in exile are unanimous in saying the villain for all this is President Alwerki. He apparently regards himself as indispensable and clearly sees himself as president for life – just like the Kim dynasty trio of tyrants in  North Korea. In a strange twist of irony, Eritrea in its written response denouncing the UN report lifted lines word for word from a North Korean fulmination to the UN on another matter:

    “We are fully ready for any confrontation with the U.S. and will shatter the reckless “human rights” racket by the hostile forces through our toughest reaction. 

    “The moves of the hostile forces to dare provoke the socialist system of the DPRK which was chosen and has been consolidated by the Korean people will not be able to escape disgraceful doom.”

    The West pays little attention to Eritrea other than warning people travelling there. The EU in April approved an aid package of 122 million euros. ‘The more it gives, the faster the population decamps’, observed Wakefield.

    The country is of little strategic value despite the Soviet Union once having a naval base there before independence. While Eritrea has a majority Christian population, more than 40 per cent of its people are followers of Islam. But no doubt the West is content in the knowledge that Eritrea’s brutal president will keep any Islamic radicals in their place.

    Just as North Korean defectors have a tough time adjusting to life among even their own kith and kin in the south, for Eritreans it is an entirely new challenge in a new continent where they are far from wanted. ‘They were in Africa until yesterday and are fleeing like lost goats in Rome’, a social worker was quoted in The Times about newly-arrived Eritreans now trying to evade a different type of authority.

    The number of Eritreans who made it to Italy by the boat last year was 40,000 or 23 percent of all asylum-seekers. That compares with just 32,000 of all asylum-seekers who made it to Australia by the dreaded boat in the 18 months to June 2013. The Immigration Minister, Peter Dutton, can only pale when this year’s likely record-breaking exodus across the Mediterranean is totted up.

    If there is a glimmer of hope for Eritreans, it may be it’s because gold has been discovered in their benighted country and other minerals could be there as well. That’s if President Alwerki doesn’t follow the example of other African dictators by pocketing the money for himself and keeping his country to remain among the 10 poorest in the world.

    FOOTNOTE: Australia has had a connection with Eritrea ever since 1987 when the late Fred Hollows began his work there to restore sight to thousands of people. Despite the crackdown on NGOs, the foundation in his name continues his work there today.

     

    John Tulloh had a 40-year career in foreign news.

  • Ian McAuley. The ABC and a second chance.

    Current Affairs

    Most reasonable people would be fully behind Mark Scott’s spirited defence of the ABC “as a public broadcaster, not a state broadcaster”, reminding us that “at times, free speech principles mean giving platforms to those with whom we fundamentally disagree.”

    Tony Abbott’s reaction to Zaky  Mallah’s remarks on Q&A is comparable to the religious fundamentalists’ hysterical reaction to the Charlie Hebdo cartoons. When Abbott said “heads should roll”, he was undoubtedly speaking metaphorically, but such language spurs hotheads to extreme violence. It’s a chilling reminder that journalists have been beheaded for upsetting the delicate sensitivities of religious bigots.

    How could Abbott, so familiar with Catholicism and English history, forget the unintended violence King Henry incited when, in a similar offhand remark, he said “who will rid me of this meddlesome priest”?

    Of course Abbott and his loyal followers would be happy if all the media, particularly the highly-trusted ABC, were as uncritically supportive of the government as the Murdoch papers are. But the government doesn’t usually react so strongly as it has to the Q&A incident. Perhaps it touched a couple of raw nerves that other criticisms do not.

    The first raw nerve was touched when Mallah suggested that the intemperate language of government ministers (“dog whistling”) has encouraged people to go to Syria to join IS. His statement was hardly elegant, and if taken out of context could be interpreted as urging people to join IS, but if one listens to the full interchange that is certainly not what he was saying.

    It is quite plausible that government ministers and their strident supporters on talkback radio, have intentionally or otherwise contributed to a feeling of isolation and rejection among some young Muslim Australians, thus elevating the attraction of movements such as IS.  It’s a possibility worthy of serious consideration.

    An academic or professional journalist would not have put the question in the same way that Mallah did, but Mallah is not an academic or journalist. As Shakespeare reminds us fools often speak truths in ways that more respectable people tend to avoid.

    The other raw nerve touched by the incident was the audience reaction to Mallah’s suggestion that Steve Ciobo should leave the country. In one aspect it was simply a tit-for-tat return of Ciobo’s rudeness. But, asAnnabel Crabb  points out, what may have grated with the government was the applause from the audience.

    Maybe the applause was just a normal “goodonyermate” approval of someone giving as good as he gets when confronted with ill-mannered behaviour, particularly when that behaviour is from a politician of the governing party.

    But maybe it was more. A group of Australians, be they in a television studio or any other setting, carries the legacy of our convict history. That history is a rough one as Robert Hughes pointed out, but at its core is the story of redemption – the criminal whose death sentence was commuted to transportation and who made good in New South Wales, and whose genes so many of us now carry. Even though such successes were in the minority, the idea of redemption has helped shape our nation.

    Mallah presented himself as the ticket-of-leave redeemed criminal. The audience was in no position to know whether that was contrived or genuine. But the reaction to the story was a very Australian one, by people who are on the side of redemption.

  • Europe’s attack on Greek democracy.

    See below link to article by Joseph Stiglitz in Project Syndicate. Joseph Stiglitz is a Nobel Laureate in Economics and University Professor at Columbia University. He was also Senior Vice President and Chief Economist of the World Bank.  John Menadue.

     

    http://www.project-syndicate.org/commentary/greece-referendum-troika-eurozone-by-joseph-e–stiglitz-2015-06

  • Rod Tiffen. Murdoch’s declining influence.

    Current Affairs

    Labor might not have noticed it yet, but Rupert Murdoch’s capacity to influence the outcome declines with each passing election. Over the past eight months, Victoria and Queensland have voted out first-term Liberal governments despite the best efforts of the Murdoch press in those states. Their slanted front pages, unfair coverage and combative editorials only highlighted their growing irrelevance to the electoral process.

    The central reason for this decline in influence is the radically shrinking reach of News Ltd’s newspapers. Last year, the total circulation of all Australian daily newspapers was a little over 2.1 million, fully one million lower than it was at the turn of the century.

    If we factor in the growth of the Australian population, the picture is even more dramatic. Not long after the second world war, in 1947, roughly two copies of a metropolitan daily newspaper were sold for every five people in Australia. By 2014, the figure was one for every fourteen people, reflecting a decline in penetration from 38.6 to 7.2 per cent. And the decline was accelerating: between 1996 and 2014, penetration halved from 14.1 to 7.2. Murdoch papers, with roughly a 60 per cent share of Australian daily circulation, are now bought by about 4 per cent of the Australian population.

    Not only do newspapers have a shrinking readership, they also have an ageing readership. Older people, already disproportionately Coalition voters, are more settled in their political preferences and outlooks. The key to a Labor victory will be how the younger age groups, perhaps especially those under forty, will vote, and these groups are not reading Murdoch’s newspapers.

    Among regular Murdoch readers, there may not be many more Labor voters left to convert. The papers’ anti-Labor propaganda line has been consistent for quite some time; if their readers were going to switch from Labor the overwhelming likelihood is that they would have done so already. What could these papers do that they haven’t already done to convince continuing Labor voters to change their allegiance?

    Not much, probably, because readers of the Murdoch tabloids also seem to regard the papers with a healthy scepticism. In recent years Essential Research has used a series of surveys to find out how much trust Australians have in the paper they regularly read. Among the six papers included, the three “quality” papers – the Age, the Sydney Morning Herald and theAustralian – rank the most highly, all with 60 per cent plus, and the first two sometimes registering over 70 per cent.

    The three Murdoch metropolitan tabloids, meanwhile, come in at the bottom. In August 2014, 51 per cent of Daily Telegraph readers said they trusted it; for the Herald Sun the figure was 53 per cent and for the Courier-Mail 54 per cent. In other words, nearly half their readers don’t trust these papers. There’s worse: in three of the five polls, the Telegraph’s level of trust dropped below 50 per cent, and after the 2013 election it dipped to 41 per cent. All this suggests that many people may be attracted to these papers for their sporting coverage or their entertainment value, and take their political coverage with a large grain of salt.

    So, in terms of direct consumption, the Murdoch papers are reaching less than 10 per cent of voters (assuming each paper sold is read by just over two people). This is probably about half of their reach when they supported John Howard in the 2001 election. Among this disproportionately elderly tenth of the population, more than half already vote against Labor, and most are probably fairly settled in their political attitudes and largely immune to the papers’ persuasive efforts.

    There are two partial qualifications to this general picture of declining political relevance. First, because they often set the agenda for other media, newspapers’ influence extends beyond those who read them. Insofar as the Murdoch press influences the priorities and tone of television news – which still draws a sizeable number of viewers not firmly committed to one major party or the other – it will have some influence.

    But the main medium that picks up on the tabloids’ coverage is commercial talkback radio, which then amplifies the papers’ sense of outrage even further. It should be remembered, though, that their elderly listeners are quite similar to the readers of the tabloid newspapers. Together, the two media form a self-aggrandising and self-referential noise machine, and their volume and bluster should not be mistaken for outreach.

    The second qualification is that, on the face of it, the radical drop in print sales of newspapers is matched by the rising readership of their websites. Of all the media, though, tabloid newspapers are perhaps the most challenged by the digital revolution. The most successful transition has been made by the British Daily Mail, which has become a global leader among newspapers for web traffic. Interestingly, the content mix of that paper’s website is quite different from its print edition, with far more celebrity news and less sport, crime and politics. The British newspaper is vociferously right-wing and populist in its print pages, but that tone and presentation would look silly on the internet. Online, its right-wing political coverage is more sparse and less strident.

    It is true that there is considerable traffic to Australian newspaper websites. But whereas a reader of the print edition of the Daily Telegraph might have spent fifteen minutes a day reading the paper, most visits to the website are much more fleeting, often thirty seconds or less. “Readership” here means something much less than it used to. Not only is it hard to imagine these visits attracting strong advertising revenue, it is also difficult to believe they will have much political impact.

    Labor first suffered a Murdoch onslaught in 1975, after the proprietor decided that the Whitlam government had to go. The negative coverage continued through the 1977 and 1980 elections. But Labor’s return to office under Bob Hawke and Paul Keating in 1983 led to a rapprochement between Murdoch and the party’s leadership. Murdoch and Packer are the only mates we’ve got, Hawke famously told his cabinet during a deadlocked discussion of media policy reform.

    It was during this period that Murdoch, with the help of Labor’s eventual rule changes, acquired the Herald and Weekly Times group. By the end of the party’s reign in 1996, the reach of Murdoch-owned newspapers had increased from just under a quarter of daily circulation to around 60 per cent. Hawke’s short-term pragmatism made Murdoch’s anti-Labor bias a much more serious problem for his successors. At nearly every election since 1993 the weight of coverage in the Murdoch press has been against Labor, sometimes overwhelmingly so, and its large share of circulation meant considerable potential for impact.

    The hostility is not surprising. Murdoch’s own political views have been fixed since the mid 1970s, when he embraced the nostrums of the conservative wing of the American Republican Party – more recently embodied in a Tea Party agenda that is quite alien to Australian and British political traditions of a mixed economy with a strong, socially constructive public sector. When it’s been clear that a party of the left would win an election, Murdoch has sometimes been prepared to modify his right-wing instincts, marrying the business incentive to be on side with the incoming government with the journalistic advantages of riding a populist wave.

    His Australian newspapers split their editorial support in 2007 when it was clear that Kevin Rudd and Labor would win, but by 2010 and 2013 were fully back behind the Liberals. “Kick This Mob Out” proclaimed the editorial covering the front page of his Daily Telegraph, setting the tone for its coverage of the 2013 campaign.

    The eighty-four-year-old Murdoch now seems less ready to bend his views for the sake of political pragmatism. Several of his former editors have said that their first thought about any big story was always “What would Rupert think of this?” The result is an unhealthy level of conformity in the upper editorial levels of the organisation.

    As well as a hardening of the political arteries, there is an increasing sense of editorial desperation among the Murdoch papers as their commercial plight worsens. Like a one-trick pony, they try ever-bigger versions of the old sensationalist ploys. Politically, the result is even less willingness to report fairly on parties and views they don’t support. Where there was once a populist touch, now there is just a grinding predictability. Where there was once a profitable balance between sensationalism and credibility, now the confected outrage and the beat-ups rarely hit home.

    Labor can expect the full Murdoch treatment at the next federal election. The papers’ stable of largely interchangeable and wholly predictable columnists will pour out their anti-Labor analyses. Embarrassing trivia (such as Kevin Rudd’s not saying much to a make-up artist before a TV debate) will be pursued relentlessly and breathlessly magnified. Photoshop and crude caricatures will be used extensively to demean the party’s leaders. But the more interesting question is not how the Murdoch press will cover the election, but whether it will have much effect.

    Two decades ago, political pragmatism dictated that Labor would seek to ingratiate itself with such a large press oligopolist, grateful for any crumbs thrown its way, but that logic is rapidly disintegrating. On top of that, the two Australian policy issues in which Murdoch’s corporate interests have the greatest stake are both ones where public opinion is very much on the other side. First, News Ltd has become the number one target in terms of evading Australian taxation. Second, for decades News has lobbied against the anti-siphoning rules, whereby free-to-air television gets first option for many popular sporting events. Abolishing this rule would please Foxtel but would annoy those who could no longer watch for free events they have been long accustomed to viewing without charge.

    The reputation for power often outlives its objective basis. The decay of the news media as a means for reaching the electorate, and its decline as a central forum for political debate, brings its own problems for the quality of our democratic processes. But one of the benefits of the rise of digital media and changing media habits among young adults is that they are breaking down the power of the old gatekeepers. The decline in press circulation has reduced Murdoch’s power to make mischief.

    Rodney Tiffen is Emeritus Professor, Government and International Relations, Faculty of Arts and Social Sciences, University of Sydney. He is the author of ‘Rupert Murdoch: A Reassessment’ (NewSouth, 2014). This article was first published in ‘Inside Story’ on 23 June, 2015.

  • John Menadue. Triple-dipping by Big Pharma.

    Current Affairs

    The major pharmaceutical companies in Australia, almost all foreign owned, keep pushing their luck at the expense of Australian consumers and taxpayers.

    In my series on health reform, I pointed to a minimum of $2 b. p.a. that we could save in drug costs if we had a government purchasing system like the New Zealanders. In the last budget the Minister for Health made a few changes around the edges but the high prices charged by Big Pharma will continue.

    It is the same story around the world. Many American consumers find it worthwhile to cross into Canada to buy pharmaceuticals.

    It is no surprise to know that Big Pharma is also highly influential in the secret negotiations for the Trans-Pacific Partnership (TPP). It is quite a scandal that we are kept in the dark on a trade arrangement which could have quite serious consequences for Australia.

    Apart from the secrecy there are major concerns. As Choice Magazine has pointed out ‘The leaked chapters of the TPP indicate that the agreement may contain an investor-state dispute settlement clause(ISDS), which allows foreign corporations to sue Australia’s government for loss of future profits.’ Dr Matthew Rimmer, Associate Professor at the ANU College of Law, has said ‘Australian consumers have been betrayed. The intellectual property chapter of the TPP is a monster. The proposals in respect of copyright law, trademark law, patent law and data-protection would hit Australian consumers hard’.

    There is major concern that the Australian government could become more vulnerable to law suits from multinational companies and particularly, Big Pharma. As Choice has pointed out, after the introduction of tobacco plain packaging rules in Australia, cigarette companies unsuccessfully challenged the new laws twice in the High Court and lost. Philip Morris then announced its decision to challenge plain packaging again, this time under international law by invoking a 1993 bilateral investment treatment that included ISDS provisions between Australia and Hong Kong.

    And we know from experience, that US corporations have massively disproportionate lawyering power compared to our legal defence resources in Australia.

    Joseph Stiglitz, the Nobel Prize winning economist, told us recently on the ABC about the benefits to the drug companies of TPP. He said ‘I talked to all the other trade negotiators involved in the drug provisions [of the TPP] and we know that the US is negotiating for a position that would make it much more difficult to get access to generic medicines and that would drive up drug prices.

    Then there is the problem of tax avoidance. The Australian Parliamentary Library told a recent Senate Committee that in total the top five pharmaceutical suppliers to the PBS in Australia received $2.8 b. in public money. Their total Australian sales were $4.8 b. But research found their combined profits were only $50 m. They paid $53 m. in tax between them, or roughly one cent in tax for every dollar earned in Australia. For a full report by the SMH for June 15, see link here. http://www.smh.com.au/federal-politics/political-news/pharmaceutical-companies-called-on-to-explain-tiny-tax-contribution-20150602-ghf59s.html

    We are really in triple-dipping country here – high prices for Australian consumers, attempts through TPP to weaken Australia’s bargaining position and widespread tax avoidance.

    I think we are being taken for a ride.

  • David Charles. Innovation in Australia.

    Policy Series. 

    Australia is currently facing a challenging situation in which the economy needs to transform from one very largely driven by investments in the minerals and energy sector to one which has a wider spread of investment drivers. The overall economic growth rate, while still reasonably strong by OECD standards, is below the long term rate of about 3 to 3 and one half per cent per annum. 

    The famous three Ps – productivity, population and participation – all need to play their part if Australia is to get back to its long term growth path. 

    Arguably rather too much attention is focused on lifting productivity by the usual list of microeconomic reforms, including greater labour market flexibility. While these matters deserve a place in a comprehensive strategy, they need to be complemented by action designed to improve Australia’s innovation performance and in particular its performance in terms of technological innovation. Raising the rate of technological change is central to competitiveness and long term economic growth. 

    At the outset it should be said that innovation is not just about stimulating knowledge flows. In order to create new business opportunities and lift economic performance there must be economic actors who can exploit new knowledge. The importance of individuals and the innovation system as a whole is sometimes overlooked by central agencies of government who tend to think in terms of more macroeconomic frameworks. They are also too willing on occasions to trade off good long term policy for short term budgetary savings. 

    How has Australia Performed? 

    The optimistic view expressed in some parts of the Australian innovation literature is that we have done remarkably well over the course of last 200 years in terms of adding value to our latent minerals and primary resources. It is not hard to identify major innovations that enabled mineral resources and primary products to be taken to world markets. 

    Beyond mining and primary production, there are also some outstanding examples of innovation in the medical and telecommunications fields which have gone global. 

    The pessimistic view is based on the reality that with a small, developed country most of the innovations that set the framework of our daily lives tend to come from elsewhere. Australia’s performance as an exporter of high value added products and services is modest at best. 

    Of greater concern is the fact that many Australian innovators have had to move to the United States and elsewhere to tap the capital and complementary resources they need for global success. 

    Moving from the anecdotal to a more evidence-based approach to measuring the effectiveness of the Australian innovation system, the Global Innovation Index finds that Australia is placed 17th but well behind the top 10 (which include countries like Singapore, Switzerland, Sweden, Denmark and the Netherlands). Australia is more a tail light rather than a leading light among the top group. We should and must do rather better if we want higher living standards in a much more challenging world for commodity prices. 

    One of the data points that gives real cause for concern is the relatively low level of collaboration between researchers in Australia’s universities and publicly funded research agencies and business. Given the relatively large investment of public funds involved improving this situation offers real potential for improving the impact of our research and innovation system. 

    Given the importance of small to medium sized enterprises (SMEs) in the Australian economy – it is from this group the future Hidden Champions will emerge, lifting collaboration will of necessity mean improving the connectivity between Australia’s SMEs and the research community. This is no small thing. 

    Key Requirements for Innovation Success 

    The literature suggests that there are four dominant requirements that must be present for sustained and widespread innovation success. 

    The first requirement is the presence of a highly educated and skilled workforce. The world leading sources of innovation all have strong school and university systems. They all place a strong emphasis on so-called STEM skills (science, technology, engineering and mathematics). 

    The second requirement is the capital available to support innovation. This is not just a question of the availability of financial capital but just as importantly the availability of what might be called “smart” capital, ie, entities and individuals who understand innovation and markets and the likely time horizons for success. 

    The third requirement is a high degree of connectivity between university and publicly funded research entities and business. World class research by itself is no guarantee of successful innovation. The successful innovation nations have all found ways of strengthening connectivity between researchers and business. 

    The fourth requirement and in some ways the most challenging is to encourage the development of supportive eco-systems generally focused on particular emerging technologies. Silicon Valley is the parade example in the IT field but there are many other examples in the US and elsewhere of clusters of excellence centred on a range of fields. 

    How does Australia Rate? 

    Australia does well on the first requirement. We possess a highly educated and skilled workforce. Depending upon the measure used, six to eight universities in the global top 100 speaks for itself for a nation Australia’s size. We cannot rest on what has been achieved to date. The bar is being raised all the time. 

    The Chief Scientist has rightly identified STEM skills as being highly important and an area where Australia needs to do better. Fundamentally we need to at least maintain our global position and if possible improve it. 

    The other positive sign is that Australia has thought leaders in at least some of the fields from which disruptive technologies with great potential impact are emerging. 

    Australia’s performance in terms of the availability of capital for innovation is something of a mixed bag. The global mining companies have demonstrated over long periods that they are able to marshal the capital to support innovation in their businesses. Capital has also been forthcoming for innovations related to the provision of new internet enabled services provision businesses. Sometimes these have come from wealthy individuals with a strong understanding of the potential of these businesses or multinational companies. 

    Where performance has been less impressive is for innovations outside these areas where there is a lack of “smart” investors with deep pockets. This either puts pressure on Australian innovators to go offshore or to proceed to early to an IPO to tap equity capital markets. Efforts have been made to kick start a venture capital sector in Australia but it is clear more needs to be done. AVCAL points out that Australia only invests a small amount in new businesses compared to the US and Israel. 

    As pointed out in many studies on Australia’s innovation system, Australia rates poorly in terms of research collaboration involving both research entities and business. Efforts have been made to address this weakness, most notably through the long running Co-operative Research Centres program, and gains have been made in some areas but much more needs to be done. 

    Apart from the notable eco-systems that exist around Australia’s leading minerals and primary production industries, it is much harder to detect the presence of effective eco-systems in other areas of potential strength to the Australian economy. A lot of effort has been directed to building the conditions for strong clusters to emerge but for the most part they have not been notably successful. 

    Building eco-systems remains important to future innovation and competitiveness and has recently received serious attention from the Commonwealth Government. 

    What is to be done? 

    For the optimists and the commentators who believe that innovation is purely a matter for the private sector, the answer is either nothing or at most identifying and removing regulatory barriers. 

    For the less ideologically driven amongst us, there are a number of things that need to be done by governments, research and education organisations and businesses if the full potential of Australia’s innovation system is to be realised. Some of these matters are now being addressed, but there are others which need to be given attention. 

    The Industry Innovation and Competitiveness Agenda announced by the Commonwealth Government in October last year represents an important step forward in encouraging innovation and improving the national innovation system. The main measure is designed to establish five industry growth centres in:

    Food and agribusiness;

    Mining equipment, technology and services;

    Oil, gas and energy resources;

    Medical technologies and pharmaceuticals; and

    Advanced manufacturing sectors. 

    $188.5 million has been provided to fund these industry-led centres which are expected to foster better use by industry of Australia’s world class researchers so that the community sees stronger commercial returns from the $9.2 billion annual Commonwealth investment in research. 

    The industry growth centres are expected to be in operation by the second half of this year. Chairs of the five industry growth centres have already been announced. These bodies have the potential to contribute to both building the relevant eco-systems and strengthening collaboration between researchers and business. 

    The Industry Innovation and Competitiveness Agenda also announced measures to encourage employee share ownership and to promote STEM skills in schools.

    Subsequently, it has been announced the Ministers for Industry and Education will look into ways of tweaking University block grants to strengthen university researchers incentives to connect with business. Better aligning researcher incentives with business is a key to strengthening Australia’s innovation system. 

    The other important announcement of the Commonwealth Government concerns the response to the Miles Report on the future of the Co-operative Research Centres program. This important program is to be continued but with reforms to ensure it is in fact industry-led and subject to a streamlined system of administration. Clarity around the relationship between the CRCs and the industry growth centres has been achieved which should ensure they work together in a complementary manner. 

    The industry Minister announced on 26 May this year funding of $74 million over 7 years for two industry-led Cooperative Research Centres, namely, the CRC for Optimising Resource Extraction and the Innovative Manufacturing CRC. Both have clear links to a number of the Industry growth centres. 

    While all these measures are welcome and are pointing in the right direction, the main criticism of them is that they don’t go far enough and leave some important areas untouched. 

    The explicit aspiration to obtain a better return on the $9.2 billion annual Commonwealth investment in research is certainly right but the suspicion is that the measures announced to date fall short of what is needed to achieve nationally significant impact. 

    This reality becomes all to palpable when regard is had to the size of the resources countries in Asia Pacific are devoting to boosting their innovation systems and competitiveness. We need look no further than Singapore to see the efforts being made by the Island State. While every nation has their own place and structures to deal with, there do seem to be some consistent threads to the strategies adopted by the winners. We need to be prepared to learn from others where we can. The Miles Report does point to the German Fraunhofer Institutes as an example Australia could do well to learn from. Other examples in Asia Pacific readily spring to mind. 

    When push turns to shove effective innovation systems turn on education/skills and finance. At this stage Australia’s efforts in relation to providing “smart” capital for start ups and businesses with the potential for global growth are not really world class. 

    We need to bring to the development of innovation policy the sort of mindset that is crucial to successful innovation more generally, ie, a willingness to experiment and to shake up old ways and institutions. But at the same time a degree of certainty for planning purposes is needed with long running innovation policy measures. Bipartisanship is therefore important. 

    A point that should be made is that to this stage the focus has really been on supply-side policies for innovation. The literature in Europe and the really innovative countries in Asia strongly suggests that demand-side policies also need to be considered. These are particularly relevant when it is necessary to create space in the market for new technologies which provide high external benefits and the promise of game changing reductions in costs over time. 

    It is virtually impossible to think about innovation without recognizing the debt we all owe to Joseph Schumpeter. He put innovation at the centre of economic growth and recognized the crucial role played by the entrepreneur – the person that recognizes the market potential of emerging technologies. Part of the challenge to raising Australia’s innovation performance is to strengthen innovation entrepreneurship. This is a task that has more to do with our management education institutions than its does with Government policy. But as in most things, to raise Australia’s innovation performance to world leading we need a balanced portfolio of mutually reinforcing actions by governments, business and our research and education institutions. 

    The pay-off from getting things right can be very large indeed. We are facing a situation characterized by the emergence of potentially disruptive technologies in fields as diverse as 3D printing, robotics, energy technologies, genomics and large scale data analysis systems. Exploiting these technologies for business and health applications offers huge possibilities for Australia. 

    David Charles was the Chair of the Advanced Manufacturing CRC and will be a Director of the recently announced Innovative Manufacturing CRC. He is a Director of Insight Economics Pty Ltd.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

  • John Menadue. Facts on the $11b per annum private health insurance industry subsidy.

    The Minister for Health and Ageing, Sussan Ley has said she wants to canvas community and expert views on PHI (private health insurance).

    If she does consult the community on this issue that will be a welcome change, for consideration of the PHI is usually a private discussion with the vested interests – the PHI industry, doctors and private hospitals.

    I am not holding my breath about real consultation with the community. So much ‘consultation’ is purely token. Furthermore the community is genuinely confused about the range of look-alike policies that are very hard to understand until the patient has to pay. (more…)