Category: Politics

  • Richard Butler. ISIL. Ask the right questions.

    Any assessment of what, if anything, countries outside the region should do about the seizure by ISIL of substantial portions of Syria and Iraq, should be based on the answers to three basic questions: what is the significance of this event; whose fight is it; what can be done about it, effectively.

    On the principle that you will only get the right answer if you ask the right questions. It is important that these three questions be the right ones. They appear to be.

    In arriving at the decision to, immediately join the US organized coalition to “ degrade and destroy” ISIL, the Abbott government advanced a simple answer to these questions.

    In its view ISIL’s actions: pose a significant threat to Australia’s security and that of it’s friends; it is, thus, our fight; and, presumably it believes that the international coalition organized by the US can win this fight.

    The elemental assessment of threat to Australia will have been made by competent Australian Agencies, in consultation with those of friends; particularly US and UK Agencies.

    Barring a leak, we will not know what the Agencies have advised the Government and it has ruled out a Parliamentary discussion of the decision to commit Australian forces.

    The main contours of the Agencies’ advice has possibly been shown by the remarkable media conference by the Prime Minister and the retiring Head of ASIO, David Irvine, in which the Prime Minister announced a significant elevation of the status of the threat to Australia but said no specific threat had been identified. Although we are now, apparently seriously threatened, Australians, he said, should go about their business as normal.

    The Prime Minister has proven interesting in this context through the extent to which he seems to think: the people are truly simpletons; won’t get it but are able to be frightened; and, that he can rely on the reasoning that whatever is in US interest is in ours. Some people believe that, some don’t. Prime Minister Abbott seems not to feel the need to address it, or have it debated, publicly.

    Much more important than such tired reasoning would prove to be, are the other two questions. Here, there is a serious dilemma.

    By invading Iraq in 2003, the US and its friends, including Australia, played a fundamental part in creating the circumstances we now witness. Subsequent actions by the US occupying authority, then the Maliki Government in Iraq and the Assad Government in Syria, made their own

    destructive contributions. The list of those who have also sought to influence, manipulate the situation to their own ends, both overtly and covertly, is very long.

    It is not an oversimplification to state that the answer to the second question: whose fight is it, is that the fight belongs to those where it is taking place, in the region. No one else can solve the nationalist, political, and ethno-confessional problems involved

    The states concerned, such as Iraq, are free, of course to ask for outside help. But there’s the rub.

    It was intervention from the outside which authored the problem; it is such intervention which forms an extended and popular narrative within the region of: western aggression, transparent interests in oil, anti- Muslim policies etc. It is extremely difficult to see how another burst of intervention can be the cure to problems triggered initially by such intervention.

    Thoughtful people in Washington and London have been making this point. Has the same been true in Canberra?

    Then there’s the third question; the core dilemma: – can there be effective action?

    There seems to be serious doubt that air strikes on ISIL will defeat them. The Chair of the US Joint Chief’s of Staff has recognized, in the Congress’ Armed Services Committee, that the US advisors now back in Iraq may need to be assigned to combat missions. Remember that President Obama came to office on the promise of ending US combat in Iraq.

    There is also deep unrest about what action might be taken inside Syria that either does not have the agreement of the Assad government or would appear to be in support of that government. This would be unacceptable, for the obvious reasons: the innumerable dead in Syria and the 3 million refugees, from its civil war.

    The idea that the self described civilized world should do nothing about a group as criminal as ISIL seems compelling, and indeed ISIL seems, perversely, to rely on this. That is presumably the point of the beheading of western prisoners; to cause western intervention, thus supporting the narrative referred to above. But knowing what exactly to do. What would be effective is still unclear.

    The only solution to this dilemma on offer at present is the military action against ISIL now being set in motion, with Australian participation.

    But, the necessary condition for this to succeed is actually not a military one but the forging of a common political purpose amongst the States of the region. They have a basic interest in ensuring that legitimately constituted States remain the actors in international relations, not self proclaimed entities such as the so called Caliphate. But, it is not yet clear that this common purpose is at hand.

    Australia can readily endorse that interest and principle but it is not clear that this motive will be attributed to us by the States concerned rather than their seeing, once again, our simply siding with the US, on a Middle East issue, for alliance reasons, rather than because of the principle of State sovereignty.

    The government should have emphasized our political and diplomatic support for that principle, rather than the allegedly heightened threat within Australia. This would have been the right decision, for the right reason.

    But then, if we were to be consistent in our foreign policy we would vote in favour of a Palestinian State membership of the United Nations at the current session of the General Assembly. There’s another rub.

    Richard Butler is a former Australian Ambassador to the United Nations and Executive Head of the UN Special Commission to disarm Iraq. He is a Professor of International Affairs at Penn State University.

  • John Menadue. The Great Complacency

    Professor Ross Garnaut has spoken many times about our great complacency and our unwillingness to undertake the types of economic and social reform that we saw in the Hawke/Keating periods and in the early days of the Howard Government – think, GST.

    Have the golden days of reform gone forever?

    The former head of Treasury Ken Henry said that he has never known a period in which the standard of public debate on important issues is as bad as it is today. Ross Garnaut has spoken with obvious frustration about the ‘diabolical problem’ of sensible policies on climate change.

    In April 2012 Greg Dodds and I posted an article on this blog ’The Asian Century and the Australian smoko’. We argued that whilst we responded well to the opportunities in Asia for over a decade we went on ‘smoko’ from the mid-1990s. Our Anglo-Celtic both enriched and trapped us. Fear of Asia was promoted.  John Horward gave us permission to be ‘relaxed and comfortable’ again, to have a break from the Asian challenge and opportunities. The result was two decades of drift by business, universities, schools and the media in equipping ourselves for the region .Complacency set in.

    Ross Garnaut poses questions for us again…

    ‘Do we have a problem that requires business adjustment, income restraint and new reforms to lift productivity? Or is the Australian ‘she’ll be right’ approach to economic policy in the early 21st Century good enough? Economic modelling for today’s Forum by Victoria University’s Centre of Policy Studies suggests that Australia does indeed have a sizeable problem with the real prospect of falling living standards to 2020 if nothing is done to avert it.’

    Can we counter those vested interests in the community, those ‘diabolical problems’ that consistently run good policies off the rails? And there are serious obstacles to address. There are powerful vested interests that are hostile to risk taking and want to hold on to privileged positions. They don’t want reform and change.

    Media

    In our 24/7 media cycle the short-term, the partisan, the confrontational and personalities dominate. The attention span of the media on important policy issues is very short. Our Canberra press gallery, including the ABC, is more concerned about politics than policy. News Corporation, which controls 70% of the metropolitan newspaper circulation, runs a partisan agenda that is unprofessional and self-serving. Just look at its denialism on climate change. News Corp distorts and debases almost every public policy issue it touches. What an awful legacy Rupert Murdoch will leave!

    The mainstream media is a serious problem not only because of concentration of power but it still influences the agenda in other under resourced media. Social media, even bloggers are filling some of the vacuum but it is nowhere near enough.  Why doesn’t the ABC establish a high quality online policy portal committed to articulating the key issues that we face?

    Lobbying

    The World Economic Forum in its 2013/4 Global Competitiveness Report on ‘favouritism in decisions of government officials’ ranked Australia poorly, well behind such countries as Singapore,Sweden,Netherlands, ,Norway,Japan, Germany and the UK. In transparency in government decision making we also ranked poorly.

    So much of the influence on governments is not exercised in public and contested discussion. The secret lobbying in Canberra and the state capitals has shown how lobbyists can effectively twist the arms of ministers. Lobbyists know that they cannot win an open debate with the public, so they exercise their enormous influence in secret. Think of what the Australian Minerals Council has done to corrupt good public policy in the resources sector. Consider what happens in the health field with the secret influence of the AMA, the Australian Pharmacy Guild, the Private Health Insurance funds and Medicines Australia. We will never get worthwhile health reform until these secretive and powerful vested interests are publicly confronted and forced to publicly defend their positions. And beyond these few examples there is the influence of the Australian Hotels Association in promoting the scourge of alcohol. We need to address the destructive power of the lobbying industry and its corruption of the public interest and public debate. Favouritism in government decision making and a lack of transparency is a major obstacle to good policy making.

    Political donations

    Associated with the corrupting power of both in house and third party lobbyists is the ability of powerful and wealthy groups to win favours from politcians with political donations. The NSW ICAC inquiry has shown what charade donations have made of any sense of an open and honest public discourse. We need to consider the banning of all donations at both national and state levels. Our political system is being bought by wealthy vested interests.

    Think Tanks

    Think tanks should be providing us with independent and public advice on important public issues. But the most influential ‘think tank’ is the Institute of Public Affairs, which is secretly funded by wealthy companies like big tobacco and the mining sector. It runs phoney campaigns in service of wealthy private and secret funders. The Sydney Institute pretends that it is an independent forum, but never discloses the sources of its funding. These ‘think tanks’ that refuse to disclose their donors should be refused media access, certainly by the ABC, and denied tax deductibility for donations. If we are to have an honest and transparent public debate action must be taken against these phoney think tanks.

    Business Economists

    Most of the business economists that we see so regularly on TV or read in our newspapers are employed by the banks. The 19 member Committee of Australian Business Economists is dominated by bank and financial service employees. Some of these business economists make an important contribution to public debate on broad economic issues, but how often do they challenge the power of their employers who increasingly dominate our economy, particularly in the fast-growing area of superannuation and funds management.

    We used to have a number of independent “public intellectuals” usually from the universities. But with the exception of a few university people such as Professor Ross Garnaut, Professor Bob Gregory and Ian McAuley, these public commentators are few.

    With a few notable exceptions our climate scientists are remarkably tongue tired in the face of so much self-interest and crude ideology. Don’t they care about climate change? Do they feel that politics is beneath them?

    Dubious ‘contributors’ to this public debate are the large number of accounting and consulting firms who undertake ‘modelling’ to produce what their clients want. I am not sure how professional and independent some of this modelling is. Ross Gittins has described the problem of recent modelling on the effect on electricity prices if the Renewable Energy Target is abolished. He said ‘regrettably economic modelling has degenerated into a device for bamboozling the public’

    Leadership

    A key to the earlier periods of policy reform was political leadership supported broadly by business and the trade unions. I do think that we respond to strong leadership if we feel that the sacrifice is worth it in the national interest and that it is fair. Unfortunately today we so often have a lack of leadership and a partisan and coarse public dialogue.

    Strong and capable leaders will help to outflank the obstacles I have mentioned. But the obstacles are major reasons why complacency is winning the day.

    We are still enjoying the benefits of the reforms of the 1980s and 1990s. Can we shake ourselves free of our complacency and partisanship and stop fooling ourselves that ‘she’ll be right’.

  • Rod Tucker. Broadband projects fail reality test.

    In an article in The Conversation on 8 September 2014, Rod Tucker points out that the broadband projections will fail a reality test.  He said ‘If they [the Vertigan report] had used realistic data for growth in demand, their cost benefit analysis may well have shown that a FTTP network will provide Australia with the best long term value for money.’  Rod Tucker is Laureate Emeritus Professor at University of Melbourne.  See link to full article below.

    http://theconversation.com/broadband-projections-fail-reality-test-31341

  • Tessa Morris-Suzuki. The CIA and the Japanese media: a cautionary tale.

    When Japan surrendered at the end of the Pacific War, the occupation authorities pledged to democratise the country. They carried out many reforms and introduced a new peace constitution, guaranteeing human rights and freedom of expression. The reforms had a profound and lasting effect, but there was also a less democratic side to US-Japan relations in the immediate postwar era.

    It has long been known that the occupation authorities chose to retain media censorship for their own purposes. But new dimensions of US media manipulation in postwar Japan have come to light in a large number of CIA documents declassified over recent years.

    Today, the Japanese media is riven by fierce infighting, as key national newspapers swing their weight behind the current Japanese government’s campaigns to rewrite history and reopen nuclear power stations. In this context, the information revealed in the CIA files has disturbing contemporary relevance.

    The declassified documents on Japan are now available online (http://www.foia.cia.gov/). One person who figures prominently in their pages is Ogata Taketora, Deputy Prime Minister in the Yoshida government of the early 1950s. Ogata began his prewar career as a journalist with the Asahi newspaper. But when Japanese freedom of speech crumbled in the face of political repression, Ogata joined the government, becoming head of Japan’s wartime intelligence bureau. He was purged during the occupation, but was soon depurged and elected to parliament.

    In 1954, Ogata sponsored the creation of a Japanese “Central Investigation Agency”: a private venture run by leading figures from the main Japanese news agencies. The funding came from the government, and the Agency’s main role was “feeding information to the recently-formed intra-Cabinet body, the Anti-Democratic Activities Countermeasure Council”.

    The Agency operated from the offices of Japan’s Jiji Press Agency, and its board of directors included leading figures from the two main postwar news agencies, Jiji and Kyodo.

    US intelligence documents on this media-government collaboration survive because Ogata was himself a registered high-level CIA informant, passing damaging information about his political rivals to the Americans in return for sensitive US information to use in his political battles at home.

    But Ogata was not the only important Japanese figure engaged in murky arrangements with US intelligence. Another was Shoriki Matsutaro, the immensely influential owner of the Yomiuri newspaper, who in the 1950s became head of Japan’s State Security Committee and its Nuclear Power Commission.

    Shoriki had begun his career in the prewar police, where, as a report on the CIA files notes, he gained notoriety by “his ruthless treatment of thought cases and by ordering raids on universities and colleges”. After leaving the police he took over the presidency of the bankrupt Yomiuri, revived its fortunes, and went on to be closely involved in the information policies of the wartime government.

    Investigated for war crimes, Shoriki was released without trial in 1952, and not long after began what was to be a new and covert element in his career: a role as an informant and propaganda agent for the CIA under the code-names PODAM and POJACKPOT-1. By now his empire included not only the Yomiuri, but also Japan’s first commercial TV station, Nippon TV.

    At least one other senior member of Shoriki’s business empire also seems to have been working with the CIA.

    Shoriki was particularly useful to the USA because of his enthusiastic collaboration in a propaganda campaign to persuade Japan to adopt nuclear power. By 1955, the media mogul had “committed his empire to a full blast favourable treatment of the atom, not neglecting to feature himself as the Prometheus who was bringing this fire to Japan”. Part of the campaign was a massively publicised touring “Atoms for Peace” exhibition, which Shoriki conceived and largely funded, with wholehearted CIA backing. Shoriki helpfully came up with the idea that Japanese artists could be employed to “rework” the information that the CIA provided for the exhibition “to play down or conceal [the] original source of this material”

    The exhibition was just one of a litany of clandestine connections between Japan’s leading media magnate and the CIA.

    In the run up to the 1958 general election, for example, the Yomiuri’s owner and the CIA hatched a bizarre scheme to import US colour TV sets (then the latest high-tech invention) to Japan so that they could be set up in public, ostensibly to demonstrate the new technology, but in fact to broadcast propaganda for the ruling Liberal Democratic Party. (The TV sets were shipped, but sadly arrived to late for the election).

    The relationship went well beyond Japan’s borders: in one case, Shoriki expressed willingness to send a Yomiuri correspondent to Syria so that the journalist could serve as a CIA contact there.

    Today, the Yomiuri, now Japan’s most widely sold broadsheet newspaper, is a leading participant in Japan’s media and history wars. Vocally supporting government approaches to history and to nuclear power, the newspaper presents itself as a guardian of media integrity, fiercely attacking competitors for failing to correct errors of reporting.

    But the Yomiuri’s own response to the explosive content of the CIA archives has been a deafening silence.

    The newspaper has never apologised or conducted an investigation, and has never explained how extensive this secret relationship with a foreign intelligence agency was, nor when it ended.

    Two large questions emerge from this sorry history. In how many other countries did the CIA have similar relationships with leading media moguls? And just what sort of back-door relationships between politics and the media are still at work in Japan today?

     

  • John Tulloh. Islamic State – The Saudi Connection.

    How ironic it was that last week Saudi Arabia should host a meeting between the foreign
    ministers of the Arab League and U.S. Secretary of State, John Kerry, to discuss what to
    do about the growing crisis about Islamic State (IS). The fact is that IS is inspired by
    Salafism, a small branch of Islam sponsored by Saudi Arabia. What’s more, it is said to
    have got plenty of its money from Saudi supporters.
    Salafism represents only about three percent of the world’s Moslems. It eschews modern
    morality and the accepted ways of 21st century life. It wants what it regards as a pure form
    of Islam which is really what applied in medieval times. It supports sharia laws long
    abandoned by most Moslems. Within the space of a fortnight last month in Saudi Arabia 19 people were beheaded, nearly half of them for non-violent crimes. That may be why IS
    adherents apparently regard this as the norm and acceptable practice.

    The Saudis find themselves in a terrible dilemma. King Abdullah wants his country to move forward from some of its questionable practices, such as its strict dress code, zealous religious police and suppression of women’s rights, and put an end to cruel movements like IS. But he is a prisoner of the Salafi clerics.

    ‘The king is a moderniser’, says Ed Husain, a Moslem and adjunct senior fellow at the
    Council on Foreign Relations in the U.S. ‘But he and his advisers do not wish to disturb the
    270-year-old tribal pact pact between the House of Saud and the founder of Wahhabism,
    an austere form of Islam close to Salafism. It is time to nullify that 1744 desert pact’.
    Easier said than done, of course. While compromise is always possible in political matters,
    it is out of the question when it comes to deep-rooted religious extremism.
    Saudi Arabia faces another dilemma: What to do? It has already outlawed IS, has donated
    $100 million to the United Nations to help with counter-terrorism, has banned public and
    private donations to support IS (though they still happen) and has signed up to the U.S.-
    led campaign to destroy IS. But the extent of that support is unclear. All U.S. officials would say was that the Saudis have agreed to provide bases for the training of moderate Syrian rebels fighting both the Assad regime in Damascus and IS militants in their country.
    The U.S. is reluctant to push Saudi Arabia when for so long it has been an ally of
    Washington, never mind its vast oil wealth and the influence that goes with it plus it being
    greatest customer of American defence companies. Three years ago it signed the biggest
    defence contract in history – $60 billion worth of weapons. Indeed Washington tends to tip-toe around sensitive matters in its relationship with Saudi Arabia. It continues to suppress 28 pages of the report of the Joint Congressional Inquiry into the September 11 attacks because, it is speculated, they contain evidence of Saudi complicity in the terrorist strikes.
    Even though John Kerry has Saudi Arabia and nine other Arab states on board to crush IS,
    it is hardly a case of ‘Here comes the cavalry’. They are mainly all Sunni countries which
    do not want to risk disaffecting their people over a Sunni movement no matter how evil
    they regard it. They will do their best to blacken the name of IS, choke off funding to it,
    curb local support and punish countrymen who have joined the movement. The rest will be left to the U.S. and its traditional allies, including Australia. Arab states usually are reluctant to go to war. The last incident among them of any kind was in 2011 when a popular uprising in Bahrain threatened the dynastic regime there. Saudi Arabia despatched its national guard, the Emiratis sent their police forces and Kuwait assigned its gunboats to patrol the Bahrain coastline. The uprising was put down and the U.S. with its large naval presence there no doubt felt relieved.

    For the Saudis, their most immediate concern is combatting the terrorist threat within,
    including the Yemen-based al-Qaeda. They are also on the lookout for plots to assassinate
    religious and Government officials as urged by Saudi IS members fighting in Syria.
    They might also start quietly removing textbooks from schools and universities which teach Salafism. Next they could tackle the university in the holy city of Medina which, according to Ed Husain, recruits students from around the world to indoctrinate them in ‘the bigotry of Salafism’ with the aim to spread the word back in their own countries.
    IS today has an estimated 30,000 active followers on the Iraqi and Syrian battlefields.
    Australia, now that we are plunging back into this dangerous and unpredictable region,
    should be ready for the long haul and the greater risk to our way of life. This crisis has all
    the elements of a long-running one.
    John Tulloh had a 40-year career in foreign news.

  • Hugh Mackay. Does every moral lapse make the next one easier?

    The political decline of the Abbott government has been remarkable. No other federal government in recent history has fallen from favour so soon after an election, nor languished in the polls so intractably (consistently trailling Labor 47-53 for more than six months).

    The question is: why?

    There are at least two answers. The obvious one is political incompetence: in particular, the government’s blindness to the reality of its situation. By “its situation” I don’t just mean its challenging relationship with the Senate; I mean the fact that, like many oppositions coming to power, it had less to crow about than it was prepared to admit.

    Forgive me if I repeat a well-worn argument: oppositions don’t win elections, governments lose them. If a government is doing reasonably well, we don’t throw it out. (In fact, we are so unwilling to change federal governments, we’ve only done it six times since 1949.) A government must be seen to be terminally incompetent, or worn out, before we replace it.

    The Coalition came to power in 2013 courtesy of a deeply divided Labor government with a hopelessly discredited leader. The majority of voters did not want Tony Abbott as their prime minister, but their urge to thump Labor was overwhelming. Put bluntly, they voted for the Coalition because it was not Labor.

    A smart leader, newly into office, would respect the implications of that. Be modest in your first-term goals, so you can take the people with you; let the voters learn to trust you; build consensus as a platform for your longer-term policy objectives.

    Not this lot. Having promised “no surprises”, having foreshadowed a measured and steady approach, they went berserk: from the lunacy of knights and dames and the assault on welfare support for the young unemployed to Senator Brandis’s disastrous foray into the “bigotry” debate and Christopher Pyne’s unheralded proposals for new university fee-structures, they have kept the surprises coming. Worse, they claim a mandate for whatever they do, as if the electorate had pondered a long list of policy options and decided, on balance, that they preferred the Coalition’s over Labor’s.

    All this is read by the voters as arrogance. And arrogance, in Australia, is the cardinal sin.

    There’s a less obvious explanation for the government’s woes that runs even deeper than any of that: this is a government that appears to have lost its moral authority.

    Moral authority is a subtle, nuanced thing: once lost, it is hard to win back. It’s partly a matter of whether the electorate trusts the leader and cabinet, and partly a question of whether the voters’ nobler nature is being appealed to. But moral authority is also a function of the moral tone of a government’s policies – especially its signature policies – and the way they affect its approach to government.

    So which policies set this government’s moral tone?

    No one could have failed to notice that “stop the boats” was, and remains, one of the signature policies of the Abbott government – right up there with repealing the carbon tax.

    If “stop the boats” only meant “let’s find a way to stop people-smugglers from exploiting refugees as profit-fodder”, we could all sign up to that, though it’s obviously a regional challenge that calls for skilled diplomacy. But the slogan loses all its moral force when it is used as an excuse to brutalise legitimate asylum-seekers who are already here.

    And it becomes even less defensible when it is used not only to imprison and abuse refugees seeking asylum in Australia, but to palm them off to countries far less well-equipped to absorb them than we are. (Cambodia? Are we serious?)

    One of the most devious aspects of the government’s defence of its treatment of asylum-seekers is that “we are trying to stop people drowning at sea”. (Labor employed precisely the same sophistry.) If this were true, it would have resulted in a vigorous policy of air-and-sea rescue patrols committed to saving any refugees at risk of drowning. So the claim is self-evidently hypocritical.

    That piece of silliness aside, “stop the boats” has become such a totemic, mesmeric slogan, it’s tempting to fall for the idea that the legitimacy of the policy has been established by its apparent success. Perhaps the government doesn’t realise that, even though it has persuaded many voters to support the policy, the grim reality of its execution was always bound to set alarm bells ringing in the national conscience. We know that dark deeds are being performed in our name that will eventually come back to bite us.

    But the government’s loss of moral authority does not spring from just that one policy: the real problem is that when there is a moral black hole at the very centre of a government’s rationale (“the end justifies the means”), a more general moral laxity becomes possible.

    This taps into an ancient issue: if a man betrays his wife, does that make it easier for him to betray his country? Does stealing once make stealing a second time more likely? Does every moral lapse make the next one easier?

    Let’s see how the dominoes might fall in this case.

    Once you have learnt to live with a policy that hits desperate refugees where it hurts most – denying them identity, dignity, freedom and hope – it becomes easier to be tough on your own poor, elderly, unemployed and marginalised. Thus, the inherent unfairness of the May budget can be traced to this malaise at the core of the government’s philosophy.

    Similarly, once you ignore your international obligations regarding the treatment of asylum seekers, it becomes easier to ignore other obligations to the global community – like the need to decarbonise the economy by urgently ramping up our production of clean energy. Thus, the proposed scrapping of the Clean Energy Finance Corporation and the scaling back of the emissions target can also be linked to a general reluctance to accept moral responsibility (except when it comes to military support for the US in the Middle East).

    In such a relaxed moral climate, it becomes easier to break promises. The long list of broken election promises, from pensions to ABC funding, is extraordinary even by the low standards of contemporary politics.

    It’s not only easier to break promises, it’s also easier to be blithe about doing it. Once you’ve enshrined a Big Lie at the heart of your signature policy – insisting that “these people have come here illegally” when they most assuredly have not – other lies are easier, whether it’s the lie about school funding (“We’re on the same page as Labor”) or the lies that deny promises have been broken (“No, we haven’t broken our promise about superannuation …”).

    The Abbott government might not yet fully appreciate the cumulative effect of all this on voter sentiment – an effect compounded, of course, by its extravagant pre-election posturing about integrity, probity, promise-keeping and “Labor’s lies”.

    Any government can recover from political ineptitude, and the heightened terrorist threat and redeployment of troops in Iraq will probably lift this government’s stocks in the short term. But the loss of moral authority is an underlying problem that won’t go away, because it is a loss that diminishes us all.

     

    Hugh Mackay’s new book ‘The Art of Belonging’ is published by Macmillan on 30 September 2014.

  • Gavan McCormack. Disturbing trends in Japan Part 4

    Friendship, states, peoples and Australia

    The government of Japan struggles to reconcile servile incorporation in today’s US hegemonic project with Japan’s own nationalism, but the circle is not easily to be squared. Nationalism is distorted, denied and channeled into a ‘correct history’ movement, beautiful Japan campaigns, and antagonism to China and Korea. The wave of xenophobic abuse of China and Korea, speculation about a possible war, and ‘hate speech’ bullying of Zainichi resident Koreans, helps consolidate Abe’s support base and justify frontier militarisation. It constitutes the reverse side of his stealth revision of the constitution and promotion of military-first, US-serving priorities. Furthermore, basic insecurity is exacerbated by neoliberal policies that for more than a decade now have functioned to replace regular jobs with part-time, temporary or other non-regular ones (now accounting for 19 million people, or 38 per cent of the total workforce).

    It is not as though the Abe agenda has widespread national support. He took office after the lower-house election in December 2012 delivered his party a substantial majority on the basis of 27.6 per cent of the vote in the national ‘bloc’ component (hardly different from 2009, when it took 26.7 per cent and suffered a humiliating defeat), and 16.62 million votes in the small electorate seats, more than two million fewer than the 18.81 million it took on the occasion of its 2009 defeat. Since then support levels have wavered, kept high through his first year of government by the rhetoric of Abenomics but suddenly dropping below 50 per cent (from 54 to 47 per cent] in July 2014 as the ‘collective self-defence’ doctrine was adopted.

    There is now a thick fabric of cooperation and exchange between Australia and Japan. In both countries, the image of the other is generally positive, and they are urged to the embrace by their key security partner and ally, the United States. However, official Australia has a distinctive agenda not necessarily widely shared or understood in the community. It has long favoured Japanese constitutional revision and showed no sign in 2014 of concern at the way the Abe government was going about accomplishing it. It also favours an expanded Japanese regional military role and closer integration of Australian, Japanese and American forces. Official Australia is not known to have any reservations about the way the government of Japan has gone about constructing a new facility on Okinawa for the US Marine Corps or to have any apparent qualms about moves to switch the Japanese nuclear power grid (frozen in the wake of the 2011 Fukushima disaster) back on and promote the export of nuclear-power-generation systems as a core sector of the Japanese economy. Australian silence on issues such as Yasukuni and the ‘comfort women’ is also appreciated in Tokyo, and naturally taken to signify agreement, or ‘shared’ values.

    In short, Australia has yet to disentangle affection and respect for the Japanese people from identification with the values and policies of the Abe government. For the moment, few seem conscious of the distinction and so support for the Abe government and its agenda is scarcely challenged. However, those who believe they share values with the Abe government should look carefully at contemporary Japan’s complex crisis of identity, history and role; at the radical but contradictory agenda pursued by Prime Minister Abe; and not least at the burgeoning confrontation in Oura Bay in Okinawa, where the juggernaut of the state, with its monopoly of force and readiness to sacrifice nature to military ends threatens the local, non-violent, democratic and fundamentally ‘conservative’ citizenry.

  • Gavan McCormack. Disturbing trends in Japan (Part 3 of 4)

    Abe, the radical

    Nominally conservative, Abe’s political career has been devoted to an extraordinarily radical agenda, nothing less than revision of all three of the country’s basic charters: the Constitution (1946), the Fundamental Law of Education (1947) and Ampo (the 1951/1960 security treaty with the United States). He aspires to ‘liquidate the post-war regime’ and replace it with a ‘new’ and ‘beautiful’ Japan.

    Abe’s party has from its inception in 1955 been committed to revising the constitution, especially Article 9, the declaration of state pacifism. The current LDP draft constitution (of 2012) widens state prerogatives while narrowing citizen rights and transforms the existing Self-Defense Forces into a ‘national defence army’. But overt revision has never been politically feasible given the strength of public opposition. Abe has chafed especially under the constraint that all previous governments had accepted—that Japan might possess an ‘inherent’ right to collective self-defence, but the constitution ruled out its exercise. On the eve of his Australian visit Abe’s cabinet disposed of this problem by simply adopting a new interpretation, reversing the restrictive interpretation and freeing Japan’s forces for future global missions. The Japan that under its constitution from 1947 to 2014 could not go to war now can.

    The evasion of constitutional principle by the simple device of reinterpretation, praised by Abbott and by the Obama government, was widely seen in Japan as a constitutional coup-d‘etat. It was in keeping with Deputy Prime Minister Aso Taro’s encomium (in a speech to party faithful on 29 July 2013) that Japan should learn from the Hitler example, the people in Germany simply waking one morning to find that their constitution no longer meant what they had thought it did. The New York Times editorialised that Japan was ‘facing a genuine test of its democracy’.

    As for education, in his first term Abe succeeded in revising the Fundamental Law of Education, making it an educational requirement that schools promote ‘love of country’. Early in 2014, Abe’s Education Ministry announced that moral education was henceforth to be given a core part in the school curriculum and that history, geography and civics texts for junior and senior high schools would, from April 2016, have to ‘reflect the government’s official position on contentious historical issues’.

    As for the security treaty with the United States, revision in 1960 caused such political turmoil that it has not been formally revised since then. Instead, however, de facto revision has been unceasing and fundamental, in accord with high-level governmental and inter-governmental understandings, including the National Defense Guidelines (1978, 1997 and forthcoming 2014) and the 2005–06 Agreements on ‘Transformation and Realignment’ of US forces in Japan. The fullest expression of the Abe security stance is expected to come in the late-2014 National Security Guidelines, but it is indicative that he has already opened the door to the export of Japanese weapons, established a National Security Council that concentrates power in his office, passed a ‘secrets protection’ law that prescribes draconian penalties for whistleblowers and investigative journalists and reminds some of the infamous 1925 ‘Peace Preservation Law’, is planning or constructing new Japanese bases in the far-southwestern islands of Amami, Miyako, Ishigaki and Yonaguni, and is working on plans to establish Japanese versions of the CIA and the US Marine Corps.

    Australia has no known stance on educational policy, but it has long favoured constitutional revision and a ‘normal state’ (‘strong’ and war capable) agenda for Japan. The fact that Abe takes aim in particular at Japan’s democratic, citizen-based and anti-militarist elements, preferring instead a paradoxical mix of the Shintoist, the American, the beautiful and the new, seems not to have registered in the Australian consciousness.

    Though Abe offends and worries the United States on many fronts, his redeeming quality is the enthusiasm he brings to the security agenda, implementing a substantial military build-up, merging with and functionally subordinating Japan’s military to that of the United States and building major new facilities for the Marine Corps in Northern Okinawa (as well as, more recently, in US territory (Guam and the Marianas)). For the cash-strapped Pentagon the prospect of such largesse,and of a 225,000-person subsidiary force, all costs met by Japan, well-trained and -equipped and ready for action on the Pentagon’s behalf under ‘collective self-defence’ principles in future wars, is irresistible.

  • Michael Keating. The mining tax debacle

    Tony Abbott has finally achieved another “triumph” with the end of the mining tax.  Of course mining royalties continue, and have even been increased recently, and oil and gas are subject to a similar sort of resource rent tax that Abbott decried when it was applied to mining.

    No doubt the mining industry, their largely foreign owners and the cheer squad in the Murdoch press are pleased, but what about the rest of the Australian community? After all it is we who are the actual owners of the resources, and we have now lost a useful source of revenue. And what does this sorry saga say about the chances of getting genuine tax reform in this country in the future?

    Why we need a mining tax

    The Government and the mining industry would have us believe that a resource rent tax on mining will reduce investment and cost jobs. Nothing could be further from the truth. Of course for most industries a tax on profits will generally reduce the rate of return on the investment, leading to less investment and fewer jobs. But mining, which involves the extraction of non-renewable resources is different for the following reasons:

    1. The resources are owned by the community, and the community should receive a return for allowing the private firms to exploit those resources
    2. Present taxation arrangements frequently fail to collect a sufficient return for the community because they fail to reflect and obtain a fair share of the super profits, or economic rents, that mining can generate
    3. The reason why mining, unlike other industries, can generate these super profits (or economic rents) is because the supply of the resource is finite; that is the supply of minerals cannot be readily increased, so if demand rises relative to that supply it will sell at a price that more than covers its cost of production and thus generate super profits. Even if other mines later come on stream in response to these super profits, this normally takes a lot longer than for most other goods and services, and the new mines typically involve less attractive deposits that cost more to mine. Consequently the market will settle at a new price that exceeds the costs (including a normal return on capital) of the most productive mines, which are thereby enabled to generate super profits, especially in the short run and even in the long run.
    4. Given that a properly designed resource rent tax is only ever taxing super profits over and above the normal rate of return on the investment then, contrary to the Government’s and the industry’s protestations, such a resource rent tax cannot deter investment nor lead to a reduction in employment. Indeed, if further empirical evidence in support of this logical conclusion is needed, think of the history of the Petroleum Resource Rent Tax, which is now nearly thirty years old, and during this time there has been massive investment in the oil and gas industry in this country.

    Indeed the Henry Review of Australia’s Future Tax System, considered the amount of taxation revenue that we have been missing out on by not having a resource rent tax for the mining industry. Thus back in 2001-02 taxation absorbed almost 50 per cent of mining profits, but as minerals prices and profits rose in the mining boom, by 2008-09 taxation’s share of the profits fell to a bit less than 15 per cent of mining profits. By comparison in the petroleum industry that had a resource rent tax, taxation’s share of profits stayed fairly stable fluctuating between around 30 and 40 per cent over this decade. Of course the prices of some important minerals have now fallen compared to 2008-09, but they are still higher than a decade ago and we are still missing out on an important potential source of revenue.  Indeed, at the height of the mining boom a rough estimate is that the Government missed out on about $10 billion in a single year compared to if it had taxed minerals in the same way as oil and gas are taxed.

    How best to tax mining super profits

    In 2010 the Rudd Government introduced the ‘Resources Super Profits Tax’ (RSPT) covering all minerals, based on the recommendations of the Henry Review. Furthermore, the intention was that this new tax would replace the existing State Government royalties with consequent efficiency gains.  Overall this RSPT appeared to be an academically elegant way of raising revenue while having a perfectly neutral impact on future investment decisions. It was, however, complex and difficult to explain. Furthermore it depended on the government being accepted as a full (but silent) partner in each mining project, taking 40 per cent of both the losses and the profits. However, as the government postponed taking on its share of the losses, and only contributed its share of the capital as the mine was written down through depreciation, there was a legitimate question as to whether the cost of capital to a mining company was in fact as low as assumed in these taxation arrangements.

    In any event, in the face of strenuous opposition from the mining industry, the Labor Government panicked and the new Prime Minister Gillard and Treasurer Swan negotiated with just the three biggest mining companies – BHP Billiton, Rio Tinto and Xstrata – a replacement ‘Minerals Resource Rent Tax’. This tax only applied to iron ore and coal, had a lower tax rate, allowed accelerated depreciation, and brought in far less revenue.

    What is surprising, and not only in retrospect, is that the Labor Government did not elect to just extend to all minerals the existing petroleum resource rent tax (PRRT), which also has a 40 per cent tax rate. This would have been much easier to explain, and as acknowledged by the Henry Review, the PRRT can approximate the impact of the RSPT, although the particular features of the present PRRT are a bit more generous to the mining companies than under the proposed RSPT.

    Clearly Gillard and Swan’s Minerals Resource Rent Tax (MRRT) was inferior to the PRRT. Its coverage was limited, and as no attempt was made to rationalise the interaction of MRRT with the State’s existing royalties, the tax rate for the MRRT had to be kept low. Another criticism was that the MRRT did not raise the expected revenue. However, a principal reason for lower than expected revenue was the accelerated depreciation, so while mining investment was booming, the miners were able to write down their profits for taxation purposes enormously.  But that also means that these new assets will be depreciated quickly and then these allowances will cease. Now the irony is that the MRRT could have been expected to raise more revenue from here on if it had not been abolished. Thus despite its flaws, the Parliamentary Library has estimated that the MRRT would have raised a handy $1 billion this year, $1.4 billion next year, and $2.2 billion in 2016-17. 

    State taxes and their role

    The RSPT as proposed by the Henry Review and subsequently by the Rudd Government was intended to supersede the existing State royalties, with the States receiving adequate compensation from the new Commonwealth RSPT revenue.  That compensation would, however, have been fixed so that the Australian Government did not fund any future increases in State royalties. Indeed it may have been necessary for the Australian Government to introduce financial penalties on the States so as to discourage them from introducing any such future increase in royalties. Unfortunately the States, possibly sensing the political winds, showed no inclination to negotiate with the Rudd Government so as to achieve a better rationalisation of mining taxes.

    In the rush that followed the change in Prime Ministers, the new Gillard Government did not even consider the value of rationalising the State royalties so that they were absorbed into a profits-based system of mining taxation. Instead there were two systems: with the new Commonwealth MRRT co-existing alongside the pre-existing State royalties which were typically based on the quantum of production or its value, and which accordingly paid no regard to the profitability of the mine. As such the opportunity to shift to a more neutral system of mining taxation was lost, thus foregoing a principal objective of the Henry Review. Furthermore, despite Abbott’s hysteria about taxing resource rents, two conservative State governments have seen fit to increase their mining royalties since the introduction of the MRRT, thus adding to the confusion, and the Gillard Government apparently felt unable to intervene.  

    The flawed policy process and how this mess eventuated

    Nevertheless, whatever its faults, the MRRT was still better than nothing. But now with the abolition of the MRRT that is where Australia has returned, with the additional disadvantage that it will now be that much more difficult in the future to introduce a more adequate and neutral system of mining taxation. So how did this sorry situation come about and what does it say about the policy process in Australia at this time.

    In my view the principal culprits are first, the Henry Review’s proposals which while academically elegant were clearly too complicated for any government to sell. Instead the Review, and later the Rudd Government, should have had the wit to embrace an extension of the existing PRRT. This would have been relatively easy to sell, especially as it clearly had not damaged investment or employment in the oil industry, thus negating Tony Abbott and the mining industry’s main stated reasons for opposing the tax.

    Second, the Rudd Government clearly failed to consult, as promised, before introducing this major tax change. This led the industry to lose trust in the Government, and may have helped the industry to justify its opposition – at least to itself.  Instead the Rudd Government should have released the Henry Report much earlier when it was received, and then used it as the basis for consultation. The recommendations in the Report would have given the Government the necessary authority, rather than trying to impose a tax that neither the Prime Minister nor the Treasurer ever seemed to really understand, and certainly could not explain.

    Third, the Gillard Government put quickly ending the dispute with the mining industry ahead of obtaining a good policy outcome. As a consequence that Government far too readily accepted the terms devised by three big mining companies with insufficient thought and expert advice regarding the consequences.

    Fourth big business was distinguished by its silence through all this process. While quite prepared to pontificate about lower taxes for themselves, it seems that big business will shy away from any engagement, let alone taking some responsibility, for the difficult decisions and trade-offs that genuine tax reform will inevitably require. Indeed judging by its performance over recent years, big business is more a hindrance than a help in the pursuit of tax reform.

    Finally the Australian Government for the most part ignored the States in introducing its mining tax proposals. But like it or not, the States are necessary partners in mining taxation (and in a number of other important policy fields) and reform is difficult unless they are brought into the consultations fairly early.

    Michael Keating was formerly Secretary of Prime Minister and Cabinet.

     

  • Mike Steketee. Politics vs Science.

    “THE laws of physics are non-negotiable,” observed Michel Jarraud, secretary-general of the World Meteorological Organisation, this week. https://www.wmo.int/pages/mediacentre/press_releases/pr_1002_en.html

    You wouldn’t think so listening to the often frenzied debate about global warming or, according to Tony Abbott’s senior business adviser Maurice Newman, what is really global cooling http://www.theaustralian.com.au/opinion/were-illprepared-if-the-iceman-cometh/story-e6frg6zo-1227023489894 .

    Jarraud was commenting on the release of the WMO’s annual greenhouse gas bulletin https://www.wmo.int/pages/mediacentre/press_releases/documents/1002_GHG_Bulletin.pdf  , based mainly on data collected by 50 countries. It shows a 34 per cent increase in the warming effect of greenhouse gases between 1990 and 2013. Most of this is attributable to carbon dioxide, atmospheric concentrations of which have risen by 142 per cent since the start of industrialisation in the 18th century, “primarily because of emissions from combustion of fossil fuels and cement production”. The WMO recorded an increase of 2.9 parts per million in 2013 – the largest rise since 1984 – although it added the figure was subject to seasonal and regional variations, such as a changing balance between photosynthesis and respiration or the amount of biomass burned.

    The figures put the best face on things, more or less. The WMO’s bulletin reports on concentrations of greenhouse gases rather than emissions – that is, what remains in the atmosphere after the estimated 25 per cent of emissions that are absorbed by the oceans and a similar amount by the biosphere, particularly plants. That means we are producing around twice as much long-lived greenhouse gases than can be taken up by the earth and the oceans. Moreover, the increasing amounts of CO2 going into the ocean is causing acidification at a rate that “appears unprecedented at least over the last 300 million years”. The consequences are not fully known but include reduced calcification, relied on by corals, molluscs and other organisms.

    Jarraud said the bulletin “provides a scientific base for decision-making. …Pleading ignorance can no longer be an excuse for not acting.”

    So much for the science. Back in the world of politics, where just about anything is negotiable, apparently including the future of the planet, Australia has decided that it has been doing far too much to deal with global warming. The price on carbon emissions has been removed, despite the evidence, both direct and indirect, that it worked. Most of the sharp increase in electricity prices in recent years has been due not to the carbon tax but the cost of upgrading infrastructure – the poles and wires – often unnecessarily because of perverse incentives. But the response from consumers has been exactly what you would expect from a price rise, whatever its origins – they have reduced their demand for electricity. This has been one of the factors in the break since 2010 in the long-term trend towards rising electricity demand. file:///C:/Documents%20and%20Settings/Kate/My%20Documents/Downloads/IP%2014%20Power%20down_0.pdf

    Prices in the electricity market have responded in another way. In the words of the report https://retreview.dpmc.gov.au/ret-review-report-0 of the inquiry established by the Abbott government into the renewable energy target, “analyses suggest that, overall, the RET is exerting some downward pressure on wholesale electricity prices. This is not surprising, given that the RET is increasing the supply of electricity when electricity demand has been falling”.

    Indeed, if the reduction is passed on in lower retail prices, as it should be in a competitive market, and offsets the higher cost of producing renewables, it might be thought of as a positive outcome by a government that hails the reduction in electricity prices brought about by the abolition of the carbon tax. However, the inquiry into the RET, headed by businessman and climate change sceptic Dick Warburton, had another purpose: to find a way of scaling back or eliminating the RET. As a result, the report argued that “artificially” low wholesale electricity prices could distort investment decisions.

    Thankfully, the report did not ignore some other facts, even if it put its own peculiar interpretation on them. Modelling it commissioned found the net impact of the RET on retail prices was small, including into the future. It concluded that the scheme had broadly met its objectives, with output from large scale renewable generators, mainly wind farms, almost doubling and that from small scale systems, mainly solar, already exceeding levels forecast for 2020. The cost of renewables had fallen, particularly for rooftop solar and the small scale renewable industry was becoming commercially viable.

    All this might sound like good news but the report thought otherwise. It found the RET to be a high cost approach to reducing CO2 emissions – $35 to $68 a tonne and $100 to $200 a tonne for small-scale renewables.

    So it is but it depends on the alternatives. At the moment there are none. The Gillard government set the carbon price at $23 a tonne and the international market price has moved much lower since. The report suggests the Abbott government’s direct action policy would produce cheaper abatement than renewables. But that remains to be seen – that is, if the policy is ever implemented in a viable form, given that it currently is blocked in the Senate.

    The government says it remains committed to reducing emissions by 5 per cent from 2000 levels by 2020, although the Climate Change Authority, among others, argues that this is less than required for Australia to meet its fair share of the international effort. The RET is the only remaining significant mechanism for at least heading in the right direction. Its role is to increase the share of emissions-free electricity, not, as the Warburton report argues, to solve the problems facing fossil fuel generators because of falling demand by winding back the RET.

    According to Andrew Blakers, director of the Centre for Sustainable Energy Systems at the Australian Natonal University, Australia could achieve 90 per cent renewable energy by 2040 by replacing coal and gas fired stations that are due to be retired over the coming decades http://theconversation.com/renewable-energy-target-review-experts-respond-31050 . Solutions would need to be found for storing power from wind and solar, given their intermittent nature, but developments in battery technology suggest that this is in prospect. Blakers offers another option that he says would be cheaper: “pumped hydro”, under which water is pumped up to a reservoir when there is spare electricity from renewables and then run downhill through a turbine when needed. http://theconversation.com/how-pushing-water-uphill-can-solve-our-renewable-energy-issues-28196

    In a world that gradually is doing more to address climate change but still not enough to meet the target of limiting warming to 2C, Australia  has become the international laggard, despite being one of the highest producers of greenhouse gases per capita in the world. The International Energy Agency has estimated http://www.iea.org/publications/freepublications/publication/25recom_2011.pdf  that taking a range of measures merely to improve the efficiency with which we use energy can reduce total global energy consumption by 17 per cent by 2030, making a big contribution towards cutting greenhouse gases.

    But according to an American study http://aceee.org/portal/national-policy/international-scorecard , Australia ranks 10th out of 16 OECD countries in overall energy efficiency and last in transport. Under the Abbott government, it “has dramatically reduced its investment in efficiency and has rolled back its efficiency incentive programs, causing its score to decline.” An example is this year’s budget, which withdrew commonwealth funding of public transport projects and increased it for roads.

    Given the relentless long-term trend towards global warming (memo Maurice Newman: periods of short-term cooling have been declining http://theconversation.com/99-999-certainty-humans-are-driving-global-warming-new-study-29911?utm_medium=email&utm_campaign=The%20Weekend%20Conversation%20-%201899&utm_content=The%20Weekend%20Conversation%20-%201899+CID_02ac31e1fe595615139d593549d1aefb&utm_source=campaign_monitor&utm_term=99999%20certainty%20humans%20are%20driving%20global%20warming%20new%20study ), it should be a case of all hands on deck. The opposition already has voted against direct action legislation in the House of Representatives on the grounds that it is a poor substitute for an emissions trading scheme. Perhaps it is but that does not mean the kind of projects that could attract funding under direct action, such as for increased energy efficiency in commercial buildings and industry, reafforestation and improved soil carbon, are not worth doing.  Labor should reverse its position and support the legislation in the Senate.

    As the WMO’s Michel Jarraud put it this week, “we are runnning out of time”.

    This article was first published in The Drum on 12 September, 2014.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

  • Gavan McCormack. Disturbing trends in Japan (Part 2 of 4)

    Shared values

    Much was made during the visit of the ‘shared values’ that unite Australia and Japan. But are the values of Abe or his government really widely shared? From the time of his entry into the national Diet in 1993, Abe immersed himself in the historical revisionist cause, resisting moves towards formal apology for the war and compensation for war victims and objecting to what he and his colleagues refer to scathingly as a ‘Tokyo Tribunal view of history’. He believes Japan was unjustly blamed for the China and Pacific wars of 1931 to 1945. As his friend Hyakuta Naoki, Abe-appointed director of national broadcaster NHK, put it earlier this year, the Nanjing massacre of 1937 never occurred and Americans had ‘fabricated war crimes against Japanese leaders in order to cover up American atrocities’. He and most of his cabinet today belong to organisations that look back to wartime Japan for inspiration, with names such as Dietmembers Associations ‘for the Passing on of a Correct History’, for a ‘Bright Japan’ and ‘Reflection on Japan’s Future and History Education’, and the ‘Shinto Politics League’. The basic principle of Shinto politics was articulated in January 2000 by then prime minister Mori Yoshiro, who referred to Japan as an ‘emperor-centred country of the gods’—precisely the view held by those who led Japan to the disastrous wars of the 1930s and 1940s.

    The politician Abe professes to admire most is his own (maternal) grandfather, Kishi Nobusuke (1896–1987). Kishi was economic czar of Manchuria (Northeast China) in the 1930s, became minister for trade and industry in the Tojo Hideki cabinet from 1941 and signed the declaration of war against the United States, holding office in the wartime government till shortly before war’s end and being then held for three years as a suspected Class ‘A’ war criminal. Released, however, in December 1948, he became prime minister from 1957 (in which capacity he first visited Australia) to 1960. Tim Weiner’s History of the CIA refers to him as ‘one of the two most influential agents the United States ever recruited … [and who] helped carry out the CIA mission to control the government’ (which continued up to the 1970s). Commonly seen as nationalists, Abe and his grandfather are both better seen as servants of the United States posing as nationalists.

    Unlike Australia, in the United States it is clear some harbour serious doubts over what values are shared with Japan. When Tony Abbott extended the invitation to Mr Abe to address a joint sitting of the Australian parliament, one wonders whether he was aware:

    • that the US government has consistently denied the honour of a formal congressional address to Japan’s leaders, even though it has extended such an honour to successive Korean presidents (five in all).
    • that Abe in his first spell in government (2006–07) had been subject to formal rebuke by the United States on human-rights grounds (House of Representatives Resolution 101 of 2007) for failure to acknowledge and compensate the victims of the wartime ‘comfort women’ system, and that similar resolutions had also been adopted by Canada and the EU.
    • that while Abe in 2013 had to be satisfied with a businesslike White House lunch with President Obama, with no shared press conference, Chinese president Xi Jinping shortly afterwards got a respectful reception and spent a couple of days with Obama on a California ranch.
    • that, when Abe brushed off strong US objections and in December 2013 visited Yasukuni Shrine, the US embassy in Tokyo released a statement that ‘the United States is disappointed [sic.] that Japan’s leadership has taken an action that will exacerbate tensions with Japan’s neighbours’, and ordered him not to repeat it.
    • that President Obama himself directly rebuked Abe (in reference to his China policy) in front of a Tokyo press conference in April 2014. 

    In short, the present government of the United States has serious differences with the Abe Japanese government on both war memory and China (and Korea) policy. Japanese governments have striven desperately to secure from Washington the sort of honour bestowed on them in July 2014 by Canberra. Indeed it may well be that it was Washington’s ‘Japan handlers’—some at least of them also its ‘Australia handlers’—who put together the Australia honour. Much as the George W. Bush administration put together a visit by Prime Minister Koizumi in 2007 to the Elvis Presley shrine in Memphis to compensate him for the invitation to Congress he too desired but could not be granted, so for Abe Canberra would substitute for Washington. In its apparently unlimited enthusiasm over its new ‘special relationship’, Australia now is notably out of step with Washington, and Abe’s uncritical and extravagant Australian reception must have delighted him.

     

  • John Menadue. NATO, Ukraine and Russia.

    Nato,Ukraine and Russia…Katrina vanden Heuvel Washington Post 10 September 2014

    If the United States and Europe were thinking rationally, the NATO summit in Wales last week would have been an opportunity to discuss a lasting resolution to the violent crisis in Ukraine, which has claimed thousands of lives and crippled the country’s economy. Instead, amid a fragile cease-fire agreement between Kiev and pro-Russian rebels in the east, the assembled world leaders used the summit for more belligerent talk and reckless saber-rattling, with their ultimate goal increasingly unclear. The goal seemed more preparing the NATO alliance for a new Cold War with Russia than exploring how to make peace, even as Moscow was helping to bring about the cease-fire agreement.

    The meeting was just the most recent disturbing example of how cavalierly and cynically the NATO leaders — including President Obama — have escalated tensions, while dismissing opportunities to bring the conflict to a reasonable conclusion quickly. Absent from the discussion in Wales, among other things, was any recognition of NATO members’ own roles in triggering the crisis. Despite the dominant narrative that Russia is to blame for Ukraine’s uncertain future, history tells a different story — one in which the West’s provocative behavior has had predictable repercussions.

    There would have been no civil war if the European Union’s leadership had not insisted on an exclusive association agreement that prejudiced Ukrainian industry in the east and trade with Russia, or if the United States and European nations had used their influence with the demonstrators to abide by the Feb. 21 agreement then-President Viktor Yanukovych signed, which would have handed more power to parliament and called for elections in December, or if the United States and Europe had been willing to work with Russia to restore the Feb. 21 agreement and calm worries in Crimea and the east about the rights of Russian-speaking Ukrainians.

    Instead the U.S. and E.U. have encouraged the most radical elements in the Kiev government in their campaign to subjugate the east with military force — to seek a military solution to what is essentially a political problem in a deeply divided and economically fragile Ukraine.

    Our responsibility goes beyond the immediate crisis, too. There would not have been such a concerted Russian nationalist response to the crisis had the West not sowed the seeds of suspicion and mistrust over the past 18 years by growing NATO’s presence in Eastern Europe, in spite of the assurances that Russia ostensibly received from the George H.W. Bush administration that “NATO will not expand one inch to the east.” Russia clearly views NATO expansion not only as provocative but also as a betrayal of an agreement, and it perceives NATO’s push toward its borders as an act of aggression — and Western leaders know it.

    In this sense, NATO expansion is not a consequence of tension with Russia; it is the cause. As George Kennan, known as the “father of containment,” warned some 16 years ago, NATO’s willful expansion would create lasting tension. “I think it is the beginning of a new cold war,” Kennan said in a 1998 interview with Thomas Friedman, reacting to the alliance’s pending additions of Poland, Hungary, and the Czech Republic. “I think the Russians will gradually react quite adversely and it will affect their policies. I think it is a tragic mistake.”

    In 2004, NATO admitted seven new members, including the Baltic States along the Russian border. Four years later, the George W. Bush administration failed to win acceptance for Georgia and Ukraine — a bid that faced significant opposition from Germany and France — but the alliance symbolically declared that the countries “will become members of NATO.”  Those actions have inevitably colored any developments.

    While there is no question that Russia at times has contributed to tensions in the region, what has unfolded was predictable and preventable. The West should have understood that an attempt to bring Ukraine into an exclusive arrangement with the European Union would spark deep, historical divisions within the country and itself, and raise Russian concerns. After all, we have seen this before.

    “Logic aside,” writes John Mearsheimer in Foreign Affairs, “Russian leaders have told their Western counterparts on many occasions that they consider NATO expansion into Georgia and Ukraine unacceptable, along with any effort to turn those countries against Russia — a message that the 2008 Russian-Georgian war also made crystalYet the hawkish outcry for a more confrontational stance toward Putin has yet to give way to common sense. Across the political spectrum, prominent figures are demanding harsher sanctions targeting Russia, as well as military assistance and NATO membership for Ukraine. These demands seem to increase regardless of what Moscow does and regardless of the fact that Russian cooperation is essential for the stabilization and rebuilding of the shattered Ukrainian economy. Never mind that Putin has just helped broker a long-sought cease-fire; sanctions, we are told, must be broadened and deepened. Punishing Russia is far more important than a political settlement in Ukraine.

    It is long past time for sober reasoning and comprehensive negotiations to end the bloody conflict. Fortunately, the parameters of a peaceful resolution are well established, and we have the cease-fire to build on.

    First and foremost, any possible membership of Ukraine in NATO or the stationing of NATO forces on Ukrainian territory must be firmly excluded. As I have written before, Ukraine’s chances for recovery depend on positive relationships with both Europe and Russia. There is only one way for Ukraine to stabilize, and that is as a bridge between Russia and the West, not a champion of either.

    Second, Ukraine should adopt a federal system that provides more autonomy for the eastern region and protects the rights of its Russian-speaking population. The E.U., Russia, and the United States should devise a joint plan to rescue the rapidly shrinking Ukrainian economy.

    Finally, the Organization for Security and Co-operation in Europe should place observers and peacekeepers to monitor progress in the war-ravaged east.This is a fateful moment. The cease-fire is a positive step, but it may well be short-lived. For now, with NATO and Russia both preparing for the worst-case scenario, it is more important than ever to stop the triumphalist rhetoric and refocus our efforts on ending the conflict, not escalating. Make no mistake: there is no military solution to this challenge. Only a reasoned dialogue and political settlement can put Ukraine on the path to long-term stability and progress.

  • Gavan McCormack Disturbing trends in Japan (Part 1 of 4)

    These posts (published over 4 days) are extracts from an article by Gavan McCormack, entitled ‘Partnership 135 Degrees East’ which will be published in Arena.org.au. 

     

    Our best friend

    The current Japanese and Australian governments came into being in December 2012 and September 2013 respectively. Both are headed by conservative, neoliberal, climate-denialist, pro-American leaders, of similar age, who quickly established a close rapport. Following their first meeting, at an ASEAN summit in October 2013, Abbott declared Abe Australia’s ‘best friend in Asia’. In meetings that followed, in Tokyo in April and Canberra in July 2014, they resolved to transform the ‘strategic partnership’ into a new ‘special relationship.’ Both made unprecedented invited appearances at the highest-level national-security-council meeting of their counterpart country, and signed agreements for free trade and defence cooperation (including ‘trilateral security cooperation with the United States’) and closer scientific and academic links.

    Before the national parliament, Prime Minister Abbott delighted his guest and astonished many Australians by referring to the ‘skill and sense of honour’ of the imperial Japanese soldiers of seventy years ago. For his part, Abe resolved to ‘stay humble against the evils and horrors of history’, offering ‘sincere condolences towards the many who lost their lives’ and expressing his determination to do more to enhance peace.

    The Murdoch press waxed hot with excitement. The Australian’s Greg Sheridan declared the Abe performance ‘masterful … as intricate as a fine Noritake pottery work, with as many moving parts seamlessly working together as the robotics of a Nagoya car plant’, signifying ‘nothing less than the birth of a new Japan’.

    Abe’s expression of ‘condolences’ and his resolve to further the cause of peace were widely praised. Yet his ‘condolences’ were calibrated to convey sympathy while avoiding responsibility, and the greatest Japanese crimes—of Nanjing, Unit 731, and the sexual enslavement of hundreds of thousands of women across Asia—went unmentioned. It was as if those who ‘lost’ their lives at Kokoda and Sandakan had fallen victim to some mysterious ailment. Furthermore, by his references to peace, Abe plainly meant shedding the shackles of post-war constitutional pacifism and joining the United States in future wars because he sees it as heading the cause of global peace. Peace, in short, calls for war. It is a proposition worthy of Orwell.

    As for his professed commitment to settling disputes by dialogue and the rule of law, Abe in fact has ruled out discussion with China on the territorial issue that China sees as critical (contested sovereignty over the uninhabited islets known in China as Diaoyu and in Japan as Senkaku). There is, he insists, no dispute, no room for discussion or negotiation. What is called for is ‘not negotiation but physical force incapable of being misunderstood’ (brute force, in other words).

    Gavan McCormack is emeritus professor of the Australian National University, coordinator of The Asia-Pacific Journal: Japan Focus (http://japanfocus.org), and author of many books and articles on modern and contemporary Japan and East Asia.

  • John Menadue The Royal Commission into the Home Insulation Program – ’a dog’s breakfast.’

    In an article in Eureka Street on 8 September, Fr Frank Brennan described the Royal Commission report into the HIP as a ‘dog’s breakfast’. He described the reasoning behind Mr Hanger’s conclusion on commonwealth responsibility as ‘bizarre’. He added that the report was ‘inadequate and flawed’.

    See Frank Brennan’s comments at the end of this post.

    The pink batts issue has been dominated by party politicking, a relentless campaign by News Ltd and lazy journalism. The problems with the program were seized on at every opportunity to discredit the Rudd Government.

    I have long contended that the regulation of the home insulation industry is the responsibility, without any doubt, of state governments. (See my Blog of January 3, 2014 ‘Pink Batts – fact and fiction’). The states were and still are responsible for safety, however much the Royal Commissioner tried to shift the responsibility. He in effect said that the commonwealth should not have relied on the states to implement their own occupation and health safety laws, their own employment training programs, or their own building regulations. He said ‘To rely on the state and territory regimes to police their own respective workplace health and safety laws seems to me to have been misguided. ….’

    What an extraordinary thing to say. Any student of Economics I, Law 1 or Politics 1 would know that the states have clear responsibility in this area and that they jealously guard their territory. To say nothing of the responsibilities of employers!

    In all this misguided heaping of responsibility onto the commonwealth government, including the four deaths, we should also remind ourselves of issues that Michael Keating, Ian McAuley and I have raised in this blog.

    • There were 1.1 million installations completed under this program.
    • A CSIRO analysis found that the rate of fires (not deaths) under HIP was lower than previously.
    • 7% of installations had to be rectified which doesn’t seem a particularly high rate for the building industry.
    • One fatality was caused by a pre-existing fault; another electrocuted installer was employed by an electrician and the third death occurred when a contractor elected to work in oppressive heat.
    • It is suggested that the deaths occurred because the HIP was rushed. There certainly was a compelling reason for speedy implementation, but it is very problematical whether the four deaths would have been avoided if the commonwealth had taken more time.

    This has been a high politicised issue from the beginning. The Royal Commission report – the ‘dog’s breakfast’ – has not helped.It is reported to have cost $25m. It is one of the few promises that Prime Minister Abbott has actually kept!

    For the future a scheme like this might be better implemented if the program funds were paid directly to the homeowner as a reimbursement/subsidy after the insulation work was completed. This would have been much more likely to have avoided the commonwealth ever accepting responsibility for situations that it could never have prevented. But reimbursing the home owner would have been no more likely to have prevented those four deaths, assuming the relevant homeowners used the same contractors.

     

    Pink Batts – Frank Brennan – extracts from Eureka Street, 8 September 2014.

    This last week, we have seen the disastrous consequences with another royal commission which failed to take account of the role of state governments. The Royal Commission into the Home Insulation Program produced a report which is a dog’s breakfast. The mainstream media has been oblivious to the report’s glaring shortcomings, focusing more on the party politics of the blame game.

    That royal commission concluded that the Commonwealth when administering the program should not have relied on the states to implement their own occupational health and safety laws, their own employment training requirements or their own building regulations.

    The Commissioner, Mr Ian Hanger QC, reported, ‘To rely on the State and Territory regimes to police their respective workplace health and safety laws seems to me to have been misguided, as those regimes are largely reactive. That is, when an incident happens the workplace health and safety regulators or electrical safety regulators investigate, report and, if appropriate, take enforcement action. What was, in my view, required of the Australian Government with the HIP (Home Insulation Program) was the provision of some preventative measures to attempt to mitigate some of the obvious workplace health and safety risks endemic to the HIP.’

    And yet, the Commission went on to suggest that the Commonwealth should have considered having the states, rather than the Commonwealth, implement the whole program.

    The regrettable deaths of the four young men working on the Home Insulation Program were the result of problems in administration at the Commonwealth and State levels and in delayed, poor communication between Commonwealth and State officials, especially in Queensland where three of the four men worked and died.

    In reaching his bizarre conclusions, the royal commissioner received little help from government. He observed: ‘With very few exceptions, the public servant witnesses chose not to make any submissions. Quite extraordinarily, in my view, the Commonwealth chose not to make submissions when given the opportunity to do so. It made some desultory submissions in reply to the submissions of the pre-existing insulation business owners and the State of Queensland.’ A royal commission set up to investigate only the Commonwealth Government, especially when receiving inadequate co-operation from the Commonwealth Government, was bound to provide an inadequate and flawed report.

     

     

     

  • John Menadue. We ‘warn the Tsar of Russia’.

    In September 1892, the headline ‘The Hobart Mercury warns the Tsar’ did not threaten Russia sufficiently to attract a response or change its belligerent behaviour. I don’t think the Tsar thought it necessary to respond to people who have an exaggerated view of their own importance

    The Hobart Mercury over-reached itself. Australian Prime Ministers, particularly when they need a diversion from domestic issues, often do the same. There has been a lot of beating the drums of war and macho posturing lately. Perhaps we will soon see Putin-esque photos of a shirtless rider on his bare-backed horse.

    Despite all the international posturing what has really been achieved?

    • MH350 has still not been found, despite the Prime Minister telling us months ago that we had almost certainly found the black box. We have now decided to fund and contract out the further search for MH350. Why?
    • We projected ourselves quite naturally into the recovery of MH17, but it was the Malaysian Government and not the European governments that really delivered for us in the removal of 200 bodies by train and the retrieval of the black boxes. Thanking the Malaysians has been an afterthought.
    • We sent the AFP to Ukraine and the Netherlands to secure the crash site. They failed and had to be withdrawn.
    • We have become an ‘enhanced party’ in NATO.  What national interest is there in that?
    • By siding so deliberately with Japan in its dispute with China we have antagonised China, our ally in WW2
    • Now we seem exceptionally eager to commit Hornet aircraft to the war against IS in Iraq.  We don’t seem to learn from our mistakes and Tony Abbott now suggests that the failure of the Western involvement in Iraq from 2003 was the prosecution of the war rather than its flawed policy in the first place.

     

    As in the Hobart Mercury in 1892, our over-reach in foreign policy has led to extremist language. The Prime Minister has described the Islamic State (IS) as a ‘death cult’ and please ‘we should not give credence to people who are pure evil, pure evil’.  He added ‘people have been radicalised and brutalised through contact with this death cult’. He added further ‘this mob, as soon as they have done something gruesome and ghastly and unspeakable, they are advertising it on the internet’.

    Nothing could justify the barbarism that we have seen from IS in Northern Iraq, but Muslims would remember, even if Tony Abbott does not, the centuries of barbarism against Muslims.

    • In 1099 the first Christian crusaders stood ‘knee deep in blood’ of Muslims and Jews after the capture of Jerusalem.
    • The Muslim expulsion from Andalusia.
    • Tens of thousands of Muslim women were raped in Bosnia 20 years ago
    • We stood aside in 1995 from the massacre of Muslim men in Srebrenica.
    • Ethnic cleansing went on in Bosnia for years before the West intervened.
    • We cooperated in the invasion of Iraq in 2003 which George Bush called the new crusade. It resulted in the death of hundreds of thousands of Iraqi people and the break-up of their country which has helped spawn IS.
    • More recently have we really expressed sympathy for the death of over 2,000 Palestinians, mainly civilians in Gaza? Israelis, yes. But Palestinians!
    • CIA officers in control rooms in Langley, press buttons for predator drones to kill insurgents and many civilians in Pakistan and Yemen. There is no blood on their hands like we have seen on the hands of IS killers. But is mechanised killing OK?
    • We did nothing for years about our good friends in Saudi Arabia and other Middle East countries who funded the Sunni rebels.
    • For the best part of a century foreign companies have exploited the vast oil resources of the Middle East.
    • We have been invited to join ‘team Australia’ but many Muslims feel it is directed against  them and  casts doubts on their patriotism

    We should not be surprised that some young Muslim men have been radicalised. In 2004 after the train bombing in Madrid the Commissioner of the AFP warned us and said ‘If this turns out to be Islamic extremists responsible for this bombing in Spain, it’s more likely to be linked to the position that Spain and other allies took on issues such as Iraq’.

    To avoid responsibility for the response of young Muslim men, John Howard and now Tony Abbott are repeating at almost every opportunity that ‘would-be terrorists don’t hate us for what we do but for who we are and how we live’. What tosh. They will judge us by our actions…what we do.

    Some young Muslim men are responding to the humiliation of centuries in unacceptable brutality. Yet when ethnic cleansing of Christians and Yaziidis occurred in Iraq and when American hostages were murdered in Syria, our response was immediate.

    Where is our even-handedness in resisting violence and injustice in all its forms against all people? It is time our leaders looked at the history of foreign intervention in the Middle East and the great injustice that has been done. We are now reaping the harvest of what we have sown.

    Overreach, like the Hobart Mercury’s posturing 120 years, ago is not serving us well.

  • Ian McAuley. A Year Of Tony Abbott.

     The Abbott Government was elected one year and one day ago. Ian McAuley celebrates the countless successes that have slipped under the radar.

     A year into the Abbott Government’s term we can reflect on its impressive economic achievements.

    The highlight is the repeal of the carbon tax. It’s easy to stand up against tree huggers and left‑wing romantics who prat on about global warming, but it takes political courage to stand up against scientists and economists.

    A close second has to be repeal of the mining tax. Some people refuse to understand how Australia works. For 200 years, ever since Macarthur opened up the wool trade, we have been selling raw materials for cleverer people to make into useful products.

    For a few years after 1945 we thought we could be clever ourselves and make things like cars and airplanes – even Menzies got carried away by that delusion – but thankfully that era of unreality has passed.

    The world needs a quarry and we’re in the business of providing it.  Australia can be the Saudi Arabia of the twenty‑first century.

    The Government hasn’t scrapped the Renewable Energy Target, but, with a bit of help from Dick Warburton, it has created enough uncertainty to kill this crazy scheme. Joe Hockey is right when he says windmills are ugly – they distract one’s attention from advertising billboards on the roadside.

    More seriously, all this renewable energy eats into power companies’ profits.

    Some say that Australia shouldn’t break a long‑standing bipartisan commitment on the RET because to do so increases our sovereign risk, but don’t they realize that there has never been a sovereign risk as bad as six years of a Labor Government?

    Six years when foreign investment fell to the lowest on record! (The ABS statistics on investment erroneously show high foreign mining investment mining during Labor’s term – proof if ever you needed it that you can’t trust public servants).

    Australia is open for business, but not all businesses – certainly not businesses that undermine our world‑standard coal industry.

    The cuts to science are well‑directed: $75 million from the Australian Research Council; $120 million from the Defence Science and Technology Organisation; $8 million from the Institute of Marine Science; and $111 million from the CSIRO.

    We don’t need all these boffins. The CSIRO served us well in the past when it focussed on crop yields and sheep fertility; it could serve us well in the future if it concentrates on mining research.

    One of the Government’s least‑understood achievements is reversal of most of the Future of Financial Advice changes – Labor’s meddle in the financial market, which made it hard for financial advisers to reward themselves with ongoing commissions.

    These are proper, respectable, upstanding people, not like the unionised riff‑raff who work in car plants or in companies like SPC‑Ardmona. Their jobs need support. In fact, with re‑training, unemployed scientists could find useful work in the finance sector, or in the tax avoidance salary packaging industry.

    Then there is repeal of small business tax concessions. These concessions – instant asset write‑offs and offsetting future losses against past losses – were highly favourable to new companies and to companies expanding into new ventures.

    The trouble with encouraging such businesses is that they put competitive pressure on existing businesses to improve their performance or lower their prices. That’s just not fair.

    In any case the concessions were introduced by the Labor Government – a clear indication that they were not good for the country.

    An achievement which has passed almost unnoticed is the abolition of the Australian National Preventative Health Agency. ANPHA was one of those wacky Labor nanny‑state bureaucracies, all about getting people to lead healthier lifestyles in order to take pressure off health care resources.

    Had it survived it could have moved through the health sector like a wrecking ball, putting specialists out of work, and hitting the profits of pharmaceutical firms and private health insurers.

    Worse, their first campaign was on obesity – an obvious threat not only to the bariatric surgery industry (literally one of our promising growth industries) – but also to our successful fast food chains.

    Don’t they realize that corpulence is the new chic? Public money should not be in the hands of scrawny vegetarian do‑gooders.

    Getting rid of that fibre‑to‑the‑premises National Broadband Network idea was timely – nipped in the bud before it got its own momentum. It could have spelled the end of telegram boys and could have put the telex network out of business.

    Unfortunately some of the Coalition’s most far‑reaching reforms are having a hard time in the Senate.

    One of these, the proposed changes to higher education, are truly far‑reaching. Let’s face it, there are just too many over‑educated people in this country.

    We need a few mining engineers and technicians, but we can get them on 457 visas. Our economy needs more taxi drivers, nannies, cleaners and others to attend to the worthy classes.

    The Coalition is having a hard time putting to rest Labor’s highfalutin idea that Australia could become an internationally competitive industrialised country. It’s hard to put down a stupid idea like that.

    People just don’t understand the Coalition’s education and labour market policies. We need people who can read and write if they’re going to operate a mining truck or work in the market gardens of our northern food bowl. But take education too far and people become sceptical and start thinking critically.

    It’s dangerous in a democracy if people think too much for themselves. Our state education system should take people to the level that they can read Sydney’s Telegraph or Adelaide’s Advertiser, but no further.

    Our private schools can teach higher‑order skills, such as negotiating with a BMW dealer or getting a coal loader proposal past legislative roadblocks.

    Another set of blocked initiatives are the cuts to the Newstart allowance, the extension of retirement age to 70, and the reductions in the Age Pension.

    These are all designed to get people into the workforce. Some armchair economists say there aren’t enough jobs, particularly not enough unskilled jobs, but they don’t see the vision in the policy.

    It’s intended to put supply‑side pressure on the minimum wage. If Australia can get rid of the minimum wage we can have a labour market more like America’s – a tremendously successful economy to emulate.

    If only people would stop whingeing about unfairness in the Government’s Budget measures. There’s nothing wrong with giving a leg‑up to those who have done well.

    The rich wouldn’t be rich unless they were competent and deserving. The poor blow their money on things like rent, food and fuel: it’s the rich who invest and create jobs for the less deserving.

    That was the essence of President Reagan’s successful “supply side” economics, a policy which has generally been followed by both Democratic and Republican administrations. OK – there has been a little collateral damage, like the GFC, but give America’s business‑friendly policies time and it will all come good.

    About the only economic idea the Coalition has wrong is the plan to re‑introduce fuel tax indexation, sensibly dropped by the Howard Government in 2001.

    There’s plenty of oil in the world, and one of life’s few remaining pleasures in a country where the nanny state has encroached on almost all our freedoms is to hoon around in a hotted‑up V8 ute, topping it off with a drag race and a burnout.

    That’s the freedom our diggers fought for when they thrashed the Turks at Gallipoli. Thankfully the Greens have the good sense to block this proposal.

    And lest readers believe this contribution to be partisan, I should give credit to the Rudd‑Gillard Government for their demonstrated commitment to cutting taxes.

    Out of the most prosperous 18 OECD countries, only the USA has lower taxes than Australia. That’s some achievement.

    While high‑tax countries like Germany have wasted money on schools, universities, public transport, fast trains, and autobahns, we have wisely made sure the government hasn’t crowded out productive private sector investments, such as casinos and dinosaur parks.

    Perhaps the Coalition’s greatest economic achievement, however, has been to convince the electorate of its economic competence.

    The Essential opinion poll shows they are well ahead of Labor on the question “which party – Labor or Liberal – do you think is best when it comes to handling the economy well?”

    Labor scores only 23 per cent, while the Liberal Party scores 37 per cent.

    Not all credit for this score goes to the Government, however, for Labor still seems to be reluctant to engage with the community on economic policy.

    This article by Ian McAuley was published in New Matilda on Sunday, 7 September 2014.

  • Annette Brownlie. No new war in Iraq.

    Both major political parties are once again standing shoulder-to-shoulder with the US, in support of what amounts to a new military intervention in Iraq.

    The process began with the dropping of humanitarian aid supplies to the Yezidi. It has now moved on to the delivery of weapons and munitions to Kurdish Peshmerga forces. Meanwhile, Defence Minister David Johnston has indicated that Australian armed forces (Super Hornet warplanes and C130s) are to be made available to support whatever action the US decides upon.

    All of this has happened with scarcely any discussion – in or outside of the parliament. No questioning or dissent has been heard in this drive towards intervention and, possibly, eventual war. (However, a recent poll shows that 78% of the population opposes having Australian ‘boots on the ground’ in Iraq.)

    Even the proposal that there be a parliamentary debate about the intervention, so that the government could make its case to the Australian people, has been opposed by both major parties. There is no possibility for the parliament to take any part in the decision to send Australian forces overseas.  Nor has the Abbott government explained the sudden need to switch from aid to arms. And it has certainly not explained what Australia hopes to achieve.

    The horror in Iraq today is a direct consequence of the war on that began with the invasion of 2003. John Howard’s government joined that invasion on the basis of falsehoods and against the opinion of the majority of the population. It appears that the present government is eagerly waiting for a request to follow the US once again.

    The massive “shock and awe” bombing and the 11-year occupation of Iraq created huge numbers of civilian casualties – including more than 1 million dead – and massive internal displacement of people. The West’s propping up of the repressive regime that followed, laid the basis for the emergence of the Islamic State (IS) fundamentalists. IS has become the latest reason for intervention. Ironically, it is using weapons captured from the Iraqi army and originally supplied by the US.

    The lesson that should have been learnt from Iraq is that military meddling in the affairs of the Middle East does not work. There was a disastrous outcome last time and no evidence to indicate anything different this time.

    Australia and the US do not recognise Kurdistan as an independent state. Sending arms to the Kurds means that Australia is continuing to meddle – in this case within the movement for Kurdish self-determination.

    If the Australian government was serious about helping the Iraqi minorities, rather than following the US into military intervention, it would immediately:

    • Expand the refugee program and offer sanctuary to the displaced and traumatised
    • Send humanitarian aid – food; engineers; doctors and constructions workers. 

    Sending yet more armaments to the area, which is already wracked by years of warfare, will not reduce the level of violence it is experiencing. The area needs less weaponry, not more.

    Annett Brownlie is a member of IPAN (The Independent and Peaceful Australia Network)

  • John Tulloh. Canberra’s fork in the road – the humanitarian way or the warpath?

    What interesting, fraught and changing times we live in. This month marks the 75th anniversary of the start of World War Two. Britain and France with little ado told Germany to get out of Poland or else. Three days later King George VI made a radio speech to the British nation that good must prevail. Robert Menzies, the Australian Prime Minister, did his ‘melancholy duty’ via ABC radio and without further ado off went the men of both countries to war again. It all seemed so straight forward.

    But today we face another fearful dilemma about another occupying force:  how to handle the Islamic State (IS) insurgents whose barbaric behaviour in Iraq has been as evil as that of the Nazis. The need for humanitarian assistance by the West for IS’s victims required no debate. But then what? Another invasion was out of the question, of course. But clearly, IS cannot be left unchecked when its followers roam elsewhere in Iraq like primitive bandits imposing their brutal rule in the name of Islam.

    Other Arab countries have shown little or no interest in intervening, while Iraq’s own army appears not up to the task despite the billions of dollars the U.S. spent in training them. That leaves the West. In fact, it’s the West’s biggest and most acute predicament: how do what are essentially Christian democracies deal with Islamic extremism?

    Tony Abbott has been characteristically cautious in discussing any plans beyond the humanitarian air drops in conjunction with other Western countries and now the delivery of military supplies to friendly forces. But he has confirmed what is obvious: that he has already discussed with Washington a wider military role.

    Mr Abbott might care to refresh himself about what happened in the 1991 Gulf War and the 2003 Iraq invasion. Neither conflict incurred Australian casualties as a result of warfare. The Gulf War was a UN-sanctioned operation to drive Saddam Hussein’s forces out of Kuwait which they had invaded the previous year. Bob Hawke, the Australian Prime Minister then, restricted our involvement to helping patrol the Persian Gulf and demining operations.

    In 2003, Mr Abbott’s mentor, John Howard, was in charge and more accommodating of Washington’s interests., He kept the public and the media guessing right up to the last minute. Once he had decided or rather confirmed that we would join President George W. Bush’s plan to invade, Australian SAS troops were operating in western Iraq with considerable success two days before the bombing of Baghdad began.

    Our intention to be part of the coalition of the willing was never in doubt despite all the ducking and weaving by Mr Howard. A few weeks before the invasion, the Sydney Morning Herald, ran a memorable cartoon showing an enthusiastic George Bush waving his Stetson and a grinning Tony Blair aboard a rocket bound for Baghdad with an alarmed-looking John Howard sitting on the tail and saying something to the effect of ‘Seriously, though, we haven’t decided yet’.

    Greg Sheridan, the well-connected foreign editor of The Australian, is in little doubt in the current case. He says Canberra is ‘considering deploying SAS soldiers, F18 Super Hornet jet fighters and sophisticated airborne early warning and control aircraft as part of a military contribution to US-led efforts in Iraq’. Here we go again.

    Our military involvement to date has been the delivery of weapons to the Kurdish militia, the peshmerga (‘One who faces death’). The U.S. are looking to these fierce fighters as a kind of first line of defence in Northern Iraq where IS followers have been rampant.

    Then what? How will the West deal with IS units terrorising communities elsewhere in Iraq? The era of ground troops is over. The new battles are being fought from the sky by warplanes and drones. As the Americans discovered 40 years ago over North Vietnam during that war, relying on just bombing is a futile exercise.

    The most the West could hope for is to drive IS followers back into their original sanctuary, Syria. Then what? You can almost imagine President Obama saying ‘I wish I knew’ when to date he’s had no idea how to deal with Syria and its nasty Assad regime. It would widen the conflict with who knows what consequences for Australia as well as the other participants.

    James Brown, a former Australian military officer who served in Iraq and Afghanistan and is now a fellow of the Lowy Institute, claims that Mr Abbott is using the military as ‘a tool of international policy’. He cited not only the Iraq developments, but now Australia’s startling involvement with faraway Ukraine. He told ABC radio that staff in the Prime Minister’s office are talking about an Abbott doctrine. ‘It’s a doctrine that’s reactive, it’s a doctrine that leads with the military and it’s a doctrine that’s very values driven’.

    For now Abbott’s biggest worry is the possibility of jihadists slipping through the cracks with the potential to cause mayhem to our safe and comfortable way of life. There is also the unthinkable: a fellow Australian – a media person, an NGO or even a soldier – being taken prisoner and beheaded. However, Mr Abbott can take some comfort from the fact that the overwhelming Moslem community in Australia feel the same way about IS as he does.

    The conflict has thrown up some developments which future historians will pore over.

    One is that the Kurds, having been ignored by the West for years, cannot believe their good fortune in finally being the centre of favourable attention and in such demand. But they know there will be a limit to the West’s attention lest their long-held ambitions for an independent homeland lead to the break-up of Iraq.

    Another is the steady exodus of Christians from the Middle East where they have existed since the first century. Many are fleeing brutal oppression, such as from IS. Others see little future when sectarian differences and hostility dominate daily life. It is estimated that the region’s 12 million Christians will drop to 6 million by 2020.

    For Mr Abbott, he now has more rapidly changing developments than ever before to take into account in determining Australia’s future direction in foreign matters. While still playing a humanitarian role anywhere, it might be safer and more practical to focus on where our future really lies – East Asia.

    FOOTNOTE: In late 2002, the notoriously secretive Defence Dept in Canberra called a meeting of all media representatives to discuss accreditation in the event of a potential conflict, i.e. the looming Iraq invasion. The rules had been drawn up by a leading Australian legal company for some bizarre reason. They included censorship of all news reports. So much for ‘live’ reporting. The location of the UAE base where RAAF jets might be stationed was never to be mentioned despite them presumably being visible to passers-by. Violators of the rules would have their accreditation revoked. All this was part of what was code-named ‘Operation Chad’. As the RAN was also involved, the brigadier in charge of the briefing was asked why such a name was chosen. ‘Why not?’ he replied as if this were a stupid question. Chad is land-locked, he was informed. He still look puzzled. Needless to say, the media were unanimous in rejecting the terms of accreditation.

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

  • John Menadue. MH17 – At last a thank-you to Malaysia may be on the cards.

    In ten days’ time, Tony Abbott will be visiting Malaysia and India.

    The visit to Kuala Lumpur will at last be an opportunity for him to thank on our behalf the Malaysian Government’s significant contribution to ‘Operation Bring them Home’.

    Without fanfare the Malaysian Prime Minister secured two key outcomes that have been of great benefit to Australia and others who suffered losses as a result of the shooting down of MH17. The first major outcome was the release from rebel territory of the refrigerated trains that carried over 200 bodies out of rebel territory. The second major outcome that the Malaysian prime Minister secured was the handover by the rebels to the Malaysian Government of the black boxes.

    Efforts of other parties particularly the Dutch Government and our own Australian Federal Police were helpful but the substantial breakthrough was organised by the Malaysian Government.

    Yet in his overseas travels to the ‘Anglosphere’ Tony Abbot has been almost everywhere except visiting the one country that has been of the greatest help to us. For all our talk about the importance of Asia out focus is almost always Europe. That has occurred also on the Russia/Ukraine confrontation which is overwhelmingly a European issue.

    Media headlines don’t necessarily make for a good foreign policy and particularly relations with countries in our region. And by the way, in that other diversion from the budget, nothing has yet been found of MH370 although Tony Abbott told us in April that he was confident that we had found the black boxes.

    In addition to acknowledging Malaysia’s major role in ‘bringing them home’, thanking the Malaysian Government will also be a useful way to put more ballast in the relationship with the Malaysian Government particularly after the intemperate remarks that Tony Abbott made about Malaysia’s human rights record.

    Justifying his opposition to the agreement with Malaysia over asylum seekers, Tony Abbott said in June 2011 in Parliament ‘Why would the Prime Minister send illegal arrivals to Malaysia where they could be detained and tagged, when she can’t guarantee the standard and accessibility of medical care and when she can’t guarantee the access to school for the children‘. Tony Abbott then went on ‘The one thing that is absolutely certain about this deal is that this Prime Minister, this Minister and this Government cannot be sure that boat people sent to Malaysia will be treated humanely.

    A gracious and earlier thank you to Malaysia over MH17 would have been most appropriate and helpful in many ways. But better late than never.

     

  • Walter Hamilton. Copy and Paste

    The Japanese have coined a new word, kopipe, from the English phrase ‘copy and paste’. It featured, for instance, in recent reporting of the discredited stem-cell researcher caught out copying images and data from one research paper to another. But the word kopipe has many possible applications, such as in the ongoing debates about history and Japan’s expanding security alliance with the United States.

    On the matter of history, let me do some copying and pasting of my own from the text of the San Francisco Peace Treaty which Japan signed in 1951 to formally bring to an end the Second World War. Here is what it says in Article 11:

                Japan accepts the judgments of the International Military Tribunal for the Far East [IMTFE] and of other Allied War Crimes Courts both within and outside Japan, and will carry out the sentences imposed  thereby upon Japanese nationals imprisoned in Japan. The power to grant clemency, to reduce sentences and to parole with respect to such prisoners may not be exercised except on the decision of the Government or Governments which imposed the sentence in each instance, and on recommendation of Japan.

    What are we to make, then, of Japan’s current prime minister, Shinzo Abe, who patently does not accept the judgments of the war crimes tribunals? Abe, on the contrary, is a determined revisionist who apparently thinks that those responsible for making war on their neighbours and conducting or condoning systematic atrocities are worthy of celebration. (For the record, the President of the IMTFE was Justice William Webb of Australia.)

    During a parliamentary budget committee hearing last year Abe said the war crimes trials were a case of the Allies imposing their view of events on the Japanese. And in April this year Abe sent a message of support to a Buddhist event honouring Japanese who died after being convicted of war crimes. Abe wrote that they had ‘staked their souls to become the foundation of the fatherland,’ according to a report in the Asahi newspaper. The annual ceremony is held before a memorial statue that describes the war crimes tribunals conducted by the Allied powers as ‘retaliatory’ and calls executed Japanese war criminals ‘Showa Era (1926-1989) martyrs.’ Showa is the era name of the reign of Emperor Hirohito by whose authority Japan waged war in China and the Pacific. The memorial statue records the names of about 1,180 war criminals who were either executed or who died of illness or committed suicide in detention camps.

    It’s not the first time Abe has sent a message of encouragement to the event. Last year he wrote: ‘I want to establish the existence of a new Japan that would not be an embarrassment to the spirit of the war dead.’

    Abe’s maternal grandfather, Nobusuke Kishi, wartime Munitions Minister, was held as a suspected Class ‘A’ war criminal himself though never put on trial. He later made a political comeback and served as prime minister between 1957 and 1960. Abe could be described as a kopipe of his blood relation. But while Kishi’s unpopular policy of closer military co-operation with the United States eventually cost him the leadership, Abe’s pushing through of a new interpretation of Japan’s post-war constitution that effectively strips away its pacifist intention has come at little political cost. The Japan of 2014 is much less alert to its wartime responsibilities than the Japan of 1960. (It is worth noting that Abe’s language when addressing the subject during his speech to the Australian Parliament in July was not as conciliatory as that used by Kishi when he visited Australia in 1957.)

    The Japanese Government makes a lot of noise about the importance of observing international law­­­­ in its territorial disputes with China and South Korea, and over issues such as whaling. When convenient, however, it seems ready to bend or ignore laws and commitments. The official explanation that Abe was acting purely in a ‘private’ capacity when he honoured Japan’s war criminals is the usual ‘copy and paste’ for the double standard.

    Abe’s kopipe method was evident, too, during last month’s ceremonies marking the end of the war and the atomic bomb attacks on Hiroshima and Nagasaki. The war dead would be more than embarrassed, one imagines, if they had been able to hear the Prime Minister read out a statement in Hiroshima that was, in large part, identical to the one he made at last year’s ceremony. Some official had simply copied and pasted from the old speech and so little concerned was Abe for reflecting sincerely on the past he read the whole thing without either noticing or caring.

    Finally, and probably most importantly, there is the continuing ‘copy-and-paste’ militarization of Okinawa, the island prefecture that occupies less than 1% of Japan’s landmass but plays host to 74% of its US-only military bases. For decades politicians have promised the people of Okinawa that their disproportionate share of the burden would be reduced. A primary focus of groups campaigning for the pledge to be fulfilled has been the Futenma Air Station operated by the US Marines in the centre of Ginowan City. The facility is an obstacle to local development and seriously affects the lives of nearby residents with its noise pollution and constant danger of aircraft accidents.

    In 1996, the US agreed to return the land––but only on condition that another location was found in Okinawa.  As a result, work preliminary to the construction of a new facility recently began in Oura Bay at Henoko, Nago city, near the existing American base Camp Schwab. The city’s mayor and many others are fiercely opposed to the project, so the Japanese coast guard has been mobilized to haul in any protestors trying to breach a large exclusion zone in the bay proclaimed under a little-used provision of the criminal law.

    According to Professor Gavan McCormack of the Australian National University, Oura Bay ‘happens to be one of the most bio-diverse and spectacularly beautiful coastal zones in all Japan. It hosts a cornucopia of life forms from blue––and many other species––of coral…through crustaceans, sea cucumbers and sea weeds and hundreds of species of shrimps, snails, fish, tortoise, snake, and mammal.’ McCormack goes on to say: ‘If the project proceeds, it will rival in scale Kansai International Airport in Osaka Bay, take a decade or more to complete and cost somewhere in the vicinity of $25 billion. Those [foreign leaders such as Tony Abbott] who believe they share values with [Shinzo Abe] should look carefully at the burgeoning confrontation in Oura Bay between the Abe state, with its monopoly of force, and local, non-violent, democratic citizens.’ 

    Kopipe, rather than original thinking and genuine engagement, seems to be the fashionable way in Japan these days.

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

     

  • Cavan Hogue. Stick versus Carrot in Ukraine?

    A major problem with the situation in Ukraine is that you can’t believe anything anyone says because they all have their political agendas to push and don’t hesitate to lie.

    Crimea, Odessa and the Donbas region of Eastern Ukraine have Russian majorities who would produce a majority for being part of Russia in any free and fair plebiscite. So the issue is one of self-determination versus territorial integrity. There is also the question of Russian minorities elsewhere but only where they occupy a definable territorial area.

    Russia wants friendly states around it and Putin has pushed a highly nationalistic line domestically which has been popular. He says he will protect Russians wherever they may be.  Domestic perceptions are vital to his continued success at home.. He is now in a position where he either bows publicly to Western pressure which will do him great harm domestically or continues to stand up to the wicked West which will be popular domestically..There is nothing unusual about Russians telling porkies about what they are doing. This is typical Russian behaviour and not unknown in the West.

    It is increasingly clear that Russia has gone from arming and supporting the separatists (cf the US in Nicaragua and Chile) to the insertion of “volunteers” to actually fight (cf US and Australian advisers in Vietnam). It is highly unlikely that Russia would go beyond the Russian speaking areas because that would be a whole new ball game where the Russians would find themselves amidst a hostile population. However, they are unlikely to stop supporting the separatists and presumably the ultimate aim is separate Russian states well disposed towards Russia.

    Putin’s reminder that Russia is a major nuclear power should be seen as simply tweaking the American nose because he knows that neither the US or the Europeans will commit troops. Kiev’s talk about full scale war is an obvious plea for stronger Western support which goes beyond threats of sanctions.

    The problem for the West is that sanctions will only strengthen Putin’s resolve and any solution must involve some kind of face saving formula which the Ukrainians will not be interested in finding. The Europeans are also vulnerable to counter sanctions from Russia in a way the Americans are not. Ukrainian membership of NATO would probably be seen by Russia like the US saw Soviet missiles in Cuba and, in any case, the Europeans would not be interested in this. Pushing NATO right up to the border with Russia was not a smart move.

    Australia’s hairy chested approach has lost our farmers export markets and achieved nothing else. We are not a serious player but are vulnerable if Russia wants to punish the monkey as a way of getting at the American organ grinder. Our approach has served to show our neighbours that, for all our talk about Asia, Europe is still our focus otherwise why would we be so strident about what is essentially a European problem? The Government’s aim is probably to appear tough domestically and to get our tummy tickled by Washington.

    So, in summary, Putin shows no sign of backing down and the West shows no sign of going beyond ineffective sanctions. The only solution would seem to be some kind of autonomy for the Russian speaking area of Ukraine achieved through a negotiated political solution. Russia has been backed into a corner where bowing to sanctions would be an enormous loss of face and the strident rhetoric by the West makes it hard to back down without loss of face.Perhaps less stick all round and a bit more carrot?

    Cavan Hogue was former Australian Ambassador to USSR and Russia.

  • John Menadue. Who owns Medibank Private (continued)

    In my blog of August 14 I examined the question of who owns Medibank Private (MBP) particularly in light of the Abbott Government proposal to privatise the business. This is not an idle question or an academic issue only. MBP has 3.5 million members and the government has estimated its sale value at $4 billion.

    The Government has now announced that MBP will be sold by Christmas

    It is clear that for many years it was assumed that the policy-holders/members owned MBP. That is clear from an examination of the accounts and the comments of a former chairman of MBP. John Deeble who was an architect of Medibank/Medicare and who was a director of the Health Insurance Commission which operated MBP put the issue as follows ‘The question of ownership in 1976 (when MBP was established) wasn’t raised because it was never considered that the government owned MBP.’

    The Commonwealth Government put $10 million as seed capital into MBP. This amount was repaid. The operating capital of MBP over the years was then contributed by the members through accumulated profits… No further capital contribution by the Commonwealth Government was made until 2005 when the Howard Government injected $85 million into the business. This amount has remained unchanged for nine years.  Last year MBP paid a dividend of $450m to the government. In one year the government received in a dividend more than five times what it had contributed in equity.

    In addition to the policy issues, it is also important to consider the legal advice which has been offered to the Commonwealth Government.

    In 1981 the Fraser Government considered selling MBP. According to Cabinet documents that have been released, the issue of selling MBP was considered by the Fraser Government’s Expenditure Review Committee – ‘the razor gang’. Members of this committee were Phillip Lynch, Margaret Guilfoyle and John Howard.

    The government’s legal adviser was the Attorney General’s Department which together with the Government Actuary and the Department of Health advised the ‘razor gang’ that the Commonwealth government did not own the assets of the Health Insurance Commission. We know from publically released Cabinet documents that on 19 March 1981 the Expenditure Review Committee decided that ‘the Commonwealth does not in any legal sense have equity in the Health Insurance Commission or its assets’.

    Three days later the Committee recommended to Cabinet that the proposed sale of MBP be abandoned. And it was abandoned.

    In 1988 the Hawke Government was contemplating the sale of MBP. The chairman of the Health Insurance Commission set out clearly in the authority’s annual report at that time that the Commonwealth had no beneficial rights in the fund’s assets.

    It is hard to see that anything has materially changed since 1981 when the clear view of the Fraser Government, based on legal advice was that MBP was owned by its members and not the Commonwealth government.

    The 3.5 million members of MBP have a major interest in this business which the Commonwealth Government now values at $4 billion.

    According to Peter Martin in the SMH today, policy holders are petitioning the government for ‘free shares’. This would seem essential but will it be fair? We know that there are a lot of hanger’s on clipping the ticket- co-lead managers, co-managers, brokers, advisers, lawyers and MBP executives. They will all be making a motza. But as for the members!!

    I am indebted to George Lekakis and The New Daily for the work they have undertaken on the ownership of MBP.

  • Michael Keating. Budget Choices

    Faced with the rejection of a significant part of its Budget, the Government is reportedly looking around at alternative compromises. Essentially the Government wants to ensure that the Budget is balanced by 2017-18. Consequently if some of the present savings are rejected the Government wants to insist that alternative expenditure cuts are adopted or there are more tax increases, or we finish up with some combination of alternative expenditure savings and tax increases.

    Unfortunately, however, there is considerable public confusion about what the Budget delivered last May actually does and how it achieves its apparent return to balance in 2017-18. In order to properly debate Budget alternatives it is essential that we all have a clear understanding of the Government’s original Budget as it will be the starting point for any future negotiations.

    First, there appears to be considerable agreement about the desirability of returning to a balanced budget. Certainly the Labor Party was equally committed to restoring fiscal balance, and the projected rate of fiscal consolidation over the next four years – an annual average of 0.6 per cent of GDP – seems about right given the present softness of the economy.

    Second, of the actual policy decisions in the Budget, 77 per cent of the savings come from changes to expenditure programs, and only 23 per cent from decisions to increase revenues, such as the increase in petrol excise and the 2 per cent “temporary Budget repair levy”. In fact the level of public expenditure by all governments in Australia is lower than in any other developed country relative to GDP. Thus there is no compelling economic case for reducing public expenditure, and given the already tight targeting of the Australian welfare system, further reductions in public expenditure in Australia are difficult.

    Nevertheless, when it took office, the Government was facing a large increase in expenditure, with real outlays projected to increase by as much as 5.9 per cent between 2016-17 and 2017-18, mainly because of the large increases in expenditure associated with the Gonski reforms of school funding and the National Disability Insurance Scheme.  In the circumstances it is not altogether surprising that the Government focussed so heavily on trying to reduce its expenditures. Instead my criticism is that the Government has focussed far too heavily on reducing people’s access to assistance and services, whereas it would have been better to achieve expenditure savings by improving the efficiency of services and the value for money, especially in relation to school education, health and infrastructure (see my posting on May 21).

    Third, an often unremarked feature of this Budget is that despite the focus of decision-making on expenditure savings, total government expenditure is still projected to be 24.8 per cent of GDP in 2017-18, which is actually more than it was in 2012-13 when Australian Government outlays were only 24.1 per cent of GDP[1].  In effect without the Government’s expenditure savings decisions, the projected budget balance would have been $20.3 billion worse in 2017-18, which would have meant a projected Budget deficit in 2017-18 equivalent to 1 per cent of GDP.

    Fourth, because the Government has in net terms only been able to stabilise the growth of expenditure and not actually reduce it relative to GDP, this has meant that much of the real heavy lifting to restore the Budget balance in this Budget is on the revenue side. Furthermore, this increase in revenues does not come from actual decisions to increase taxes, but rather from bracket creep as peoples’ incomes rise and they move into higher tax brackets. Thus Budget receipts are projected to rise from 23.1 per cent of GDP in 2012-13 to 24.9 per cent of GDP in 2017-18. That is over this period receipts are projected to rise by 1.8 per cent of GDP whereas expenditures are projected in the Budget to fall only marginally as a percent of GDP and arguably they will actually rise a little, depending on the base date chosen.

    So what are we to make of these key facts describing the Government’s Budget? Perhaps the most important conclusion is that the Government does not really have a plan to restore the Budget to surplus even if it could get its Budget passed in its entirety. This is because as it stands the Budget is relying heavily on increasing taxes through bracket creep, rather than adjusting the tax scales for inflation, and it must be questioned whether this is really sustainable.

    Indeed the Secretary of the Treasury, Martin Parkinson, has pointed out that the Government’s present budget projections, which keep the income tax scales fixed, will ‘pull someone on average full-time earnings into the 37 per cent tax bracket from 2015-16, and will increase the average tax rate faced by a taxpayer earning the projected average from 23 to 28 per cent by 2024-25 – an increase in their tax burden of almost a quarter’.  Furthermore, Deloitte Access Economics has calculated that fixing the Budget in this way will be highly regressive. For example, someone earning between $35000 and $40000 will be paying 25 per cent more tax by 2017-18, with their average tax rising from 13 per cent to 16.3 per cent, while high income earners with salaries of $200000 or more will face only a 1.8 per cent lift in their tax.

    Realistically it must be expected that in the next few years the Government will feel compelled to introduce tax cuts at least sufficient to offset these effects of bracket creep. But that means that the Government’s projected budget balance by 2017-18 then disappears unless there are further expenditure cuts or there are other forms of tax increases.

    In a previous comment on an ‘Alternative Budget Strategy’ (posted July 22/ 23) I showed how additional revenue totalling some $42 billion could be raised in 2017-18 by real tax reform that reduced various tax expenditures (ie concessions) and closed a number of tax loopholes that are presently used to avoid paying tax. This alternative approach would result in a much fairer budget and would still restore the budget balance. Furthermore this alternative would be much more credible than the Government’s budget which rests on increases in taxation that cannot be sustained. Instead for the moment the Government’s budget projections of a return to balance represent a sleight of hand, and really cannot be believed. Sooner or later the Government will have to introduce further measures, but after all the recent fuss and distrust, what chance will these have?



    [1] The estimated Budget outlays for last year, 2013-14, was reported in the Budget to be equivalent to as much as 25.9 per cent of GDP, but this high figure reflects some deliberate bringing forward of expenditures by the new Abbott Government, and also the payment of $8.8 billion to increase the capital of the Reserve Bank, which has no direct economic impact. Without this payment Budget outlays in 2013-14 would have only been 25.3 per cent of GDP compared with the reported 25.9 per cent and only half a percentage point above the projected 24.8 per cent of GDP in 2017-18.

  • John Menadue. Refugees and asylum seekers..a re-think on Temporary Protection Visas.

    I have long argued that Temporary Protection Visas (TPVs) should be rejected on the grounds that they don’t deter asylum seekers, people are left in limbo and because TPV holders could not sponsor family which resulted in risky boat journeys by women and children.

    It is time to think again about TPVs.

    At the present time there are over 30,000 asylum seekers in detention or in the community awaiting refugee assessment. That caseload is the result of the large influx of boat arrivals following the collapse of the Malaysian Agreement and the refusal of the Coalition and the Greens to agree to changes to the Migration Act which would have helped give effect to the agreement made with Malaysia.

    The current outstanding caseload is the highest I can recall. The previous highest number was 19,600 after Tiananmen which was a very homogeneous group.

    The large caseload of over 30,000 people from a variety of countries will take over three years to process, if all goes well!  We need to urgently consider ways to reduce this lengthy process. The introduction of TPV’s would help.

    Despite the often contentious debate on TPVs in Australia, giving a person a form of temporary protection, depending on the specifics of the arrangements, may be consistent with Australia’s obligations under the Refugee Convention. A number of countries provide some form of temporary protection alongside permanent protection arrangements. For example, people granted asylum in the US must wait one year before applying for permanent residence.

    The UNHCR acknowledges that, at times, temporary protection may be the most appropriate arrangement. For example, in circumstances where there are mass influxes (generally involving larger numbers than experienced by Australia), temporary protection may be a valid tool in ensuring protection is available for asylum seekers while allowing authorities the breathing space to more fully examine and determine the need for  permanent protection and stay in a country at a later stage.

    The Coalition Government had planned to reintroduce a form of TPV’s for irregular arrivals. But before the Senate changed on July 1, the ALP and the Greens defeated a proposal to reintroduce TPV’s. As a result of this political stalemate the government decided to use the existing Temporary Safe Haven (TSHV) and Temporary Humanitarian Concern (THCV) visa instead of TPVs.

    Asylum seekers for whom potential protection issues are identified (and satisfactory health and security checks completed) will be progressively placed on THSVs. They will then be granted a THCV for up to three years. If the assessment of protection claims does not identify any ‘potential protection issues’ asylum seekers will be placed on bridging visas. In this way the government has moved away from both the statutory and non-statutory protection visa assessment arrangement but has taken steps to ‘temporarily resolve’ cases quickly through the use of existing visa mechanisms. As the current arrangements apply, however, it would appear that many asylum seekers will remain in a state of limbo with neither a decision on their protection claim nor, if people are not refugees, on their removal. The consequences of this are that people could remain indefinitely on some form of temporary visa without a final determination of refugee status with the inevitable long-term impact this has on mental health. Extensive and expensive litigation is inevitable.

    This form of temporary status only delays a decision on the asylum claim for some time. Such an arrangement is not sustainable in the long term from the social wellbeing of asylum seekers, the cost involved as well as concerns of the broader community.

    At some point a final refugee determination needs to be made, whether it leads to temporary or permanent stay. It is quite unreasonable, where Australia has accepted that its protection obligations have been engaged, to allow people to remain in a state of limbo. It is cruel and destructive.

    In his evidence to the Human Rights Commission the Minister for Immigration and Border Protection said that asylum seekers would have trouble having their claims processed until he could offer a ‘visa product’ that only gave temporary residence. He added the absence of TPV’s at present ‘removes the possibility of considering alternative options for those currently on Christmas Island or elsewhere in Australia who arrived before July 19 2013’

    It is to be hoped that the ALP and possibly the Greens might sit down with the government and try to negotiate a satisfactory compromise.

    Negotiations to resolve this issue could include

    • The length of the visa (three to five years),
    • The assessment process at the end of that period.
    • What happens for people re-assessed and found to be refugees again?
    • Some sort of re-entry rights for TPV holders leaving the country for a short period.
    • The nature of benefits offered to people whilst on TPVs.

    The change of government and the large case load of 30,000 do require cooperation to obtain an acceptable compromise. TPVs are not ideal but they would be preferable to the present arrangements. Major effort is required to process the large caseload as quickly as possible.

  • John Menadue. The Iraq disaster – reaping what we have sown.

    The seeds of the disaster in Iraq were sown long ago. We are now reaping a very bitter harvest.

    A major contributor to the upsurge in violence, terrorism and extremism in Iraq is the sense of outrage that many young Muslim men feel about the invasion of their country by successive Western powers, including Australia.

    The Howard Government and News Corporation which supported our participation in the coalition of the willing must bear a heavy responsibility for the unfolding horror.

    I have set out below an article by Tony Walker in The Australian Financial Review of 29 March, 2003, headed ‘America’s hard history lesson’. I have also a link below to an editorial in the National Catholic Reporter of only a few days ago, entitled ‘Editorial: Path of destruction in Iraq began in 1991’

    Both articles draw attention to the futility of earlier Western interventions in Iraq.

    In 2004, Mick Keelty, the AFP Commissioner warned us that our involvement in Iraq made us a greater target for terrorism. In 2010, The Head of UK’s MI5, Baroness Manningham-Buller, told the Chilcott Inquiry that ‘ Our involvement in Iraq radicalised … a whole generation of young people, … who saw our involvement in Iraq, on top of our involvement in Afghanistan, as being an attack on Islam.’

    George Bush, Tony Blair and John Howard were obviously unaware of the history of Iraq. We are now seeing a catastrophe because of leaders who were unable to learn from history.

    John Menadue.

     

     

    AUSTRALIAN FINANCIAL REVIEW

    SAT 29 MAR 2003,

    AMERICA’S HARD HISTORY LESSON

     

    By: Story Tony Walker, DOHA    

    Through the centuries, the Middle East has proved hostile territory to invaders from the west and north. Even if the invaders won the battles, none, ultimately, won their particular war.

    The people of England have been led in Mesopotamia [what is now Iraq] into a trap from which it will be hard to escape with dignity and honour. They have been tricked into it by a steady withholding of information … Things have been far worse than we have been told, our administration more bloody and inefficient than the public knows. It is a disgrace to our imperial record, and may soon be too inflamed for any ordinary cure. We are today not far out from disaster.’

    That dispatch was written for The Sunday Times by its special correspondent T.E. Lawrence (Lawrence of Arabia). It appeared on August 22, 1920. How extraordinary that the same words could be published today and seem almost contemporary, depending on your point of view.

    What Lawrence was talking about was the irredeemable arrogance of British colonial rule although he might just as easily have been referring to the consequences of a new American unilateralism. He was not talking about an all-out war, like the one we are witnessing now, but about the aftermath of conflict, namely World War I, in which the Ottoman empire crumbled and was replaced across the Middle East by Pax Britannica. In Mesopotamia it was no benevolent pax; far from it.

    As Iraq braces for a further intensification of a conflict whose aim is to rid the country of its leader and his regime, Iraqis must fear that the war itself will be only part of the horror. If history is a guide, war will be followed by an uncertain possibly bloody aftermath.

    Ten thousand Arabs were killed, according to Lawrence, by the British military governors in Baghdad in putting down an uprising in the summer of 1920, two years after the end of WWI.  ‘We said we went to Mesopotamia to defeat Turkey. We said we stayed to deliver the Arabs from the oppression of the Turkish government, and to make available for the world its resources of corn and oil … Our government is worse than the old Turkish system,’ Lawrence wrote.

    Britain’s occupation of Mesopotamia might not have ended in the disaster predicted by Lawrence, but the clumsy redrawing of the map of the Middle East under the Treaty of Sevres by the ‘Great Powers’ actually, the dividing up of WWI spoils contributed in no small way to the general volatility of and latest convulsion in the region.

    Whatever happens in Iraq over the next days, weeks, months and years, it requires a level of optimism to believe that good will necessarily come from the destruction that is being visited on Iraqis and their country.

    Baghdad’s bloody history is not encouraging. Built in 762AD by the Abbasids, it has endured war and conquest repeatedly. It was sacked by the Mongols in 1258, the streets turned into rivers of blood, the alleyways filled with corpses. It fell to Tamerlane in 1401. The Persians seized it in 1508, then it was captured by the Ottoman Turks in 1534. It was recaptured by the Persians in 1623, before the Ottomans regained control in 1638 for the next three centuries.

    While it might be argued that no fate is too dreadful for Saddam Hussein, to achieve such a desirable result as his demise it should not be necessary to raze cities. You shudder to think what Iraq and its people will look like if the bombing continues for a few more weeks, followed by an assault on Baghdad itself. The errant missiles that slammed into a suburban Baghdad market on Wednesday, killing 15 civilians and wounding many others, are unlikely to be an isolated tragedy, even though the US has said repeatedly wrongly, as it turns out that the precision of modern weaponry makes this strike the military equivalent of laser surgery: no blood, no scars. US Defence Secretary Donald Rumsfeld sounds more like Dr Strangelove every day.

    Speaking of Rumsfeld, his observation on Tuesday that the war was much closer to the beginning than the end was a belated nudge towards candour in light of the obvious that Iraqis, whatever they think of Hussein, are resisting more determinedly than expected.
    It’s interesting to note here that last week the Americans, repeating their mantra of ‘shock and awe’ to describe the initial bombing campaign, were telling people to stay in their homes and await further instructions while exhorting the Iraqi military to surrender. Now the message to people, especially in the southern city of Basra, is to rise up against their oppressors. Sceptics might conclude this is an admission that the undermanned invaders their supply lines stretched, their ability to secure their rear shaky need some help on the ground.

    If there is a querulousness in the latest statements by US officials it is quite simply because, whatever they pretend, things are not going according to the script. The regime has not imploded, the populace has not risen up, the liberators are not being welcomed with hearts and flowers. It is entirely possible that when the blowtorch is applied to Baghdad, a horrible regime will indeed collapse, or shrivel up in its burrows deep below the city. But on the evidence so far, it seems unlikely the Iraqi citadel will fall without a fight.
    In the meantime, George Bush, Tony Blair, John Howard and their advisers might reflect if it is not too late on some historical amber lights, starting with the Crusades, a campaign 900 years ago to liberate the heathen and enlighten them in the ways of Christianity (note that word: liberate). It failed.

    Lebanese writer Amin Maalouf remarks in his book The Crusades Through Arab Eyes that ‘the Arab world simultaneously fascinated and terrified by these Franj [Frankish invaders], whom they encountered as barbarians and defeated but who subsequently managed to dominate the earth cannot bring itself to consider the Crusades a mere episode in the bygone past. It is often surprising to discover the extent to which the attitude of the Arabs (and of Muslims in general) towards the West is still influenced, even today, by events that supposedly ended seven centuries ago.’

    Whether Westerners believe reference to the Crusades by Hussein or Osama bin Laden to bolster support to be legitimate, these historical events do resonate in the minds of many Arabs as if they happened yesterday.

    As the editor of the London-based Arab newspaper Asharq Al-Awsat said in one of this week’s more acute observations: ‘I think this is an emotional time rather than a rational time.’

    Princeton University professor and Middle East scholar Bernard Lewis noted in a 1990 essay, ‘The Roots of Muslim Rage’, published in The Atlantic Monthly, that just as blind Arab prejudice about the West weighed heavily, so Americans functioned in a fog of ignorance about the Muslim world. When Lewis wrote then that American policy had not suffered disasters in the Middle East comparable with those in South-East Asia or Central America, he could not have imagined that things would change so dramatically in a decade or so.

    Regime change was but a twinkle in the eyes of Richard Cheney, Paul Wolfowitz, Richard Perle and Donald Rumsfeld, and there was no sign of a malleable occupant in the White House.

    There is no Cuba, no Vietnam, in the Muslim world, and no place where American forces are involved as combatants or even as “advisers”. But there is a Libya, and Iran, and a Lebanon, and a surge of hatred that distresses, alarms and above all baffles Americans,’ Lewis wrote.

    The bafflement is set to deepen in fact is deepening, as it seems that since September 11, 2001, Americans have lost a sense of proportion. Certainly normal prudence has been jettisoned.

    Among the more frequently cited historical lessons about the perils of Western hubris in the Middle East is the experience of Napoleon Bonaparte. Napoleon may have been the world’s most brilliant general, but he suffered his worst defeat in the Middle East when his forces were repelled in 1799 in a siege of a stronghold of the Ottoman Turks at Acre, in what is now Israel. Attack after attack failed, and hundreds of French soldiers died in the process. Napoleon eventually retreated to Cairo with a decimated army.

    Accounts of the siege of Acre are not recommended bed-time reading for Bush, Blair and Howard. Blair, whose troops are laying siege to Basra, may draw some encouragement from the British experience in Mesopotamia during WWI. British troops occupied Basra in 1915. By 1917, they had control of Baghdad, and a year later they took Mosul. By the end of the war they held the whole of Mesopotamia. That was when the real trouble began as nationalistic Arabs formed anti-British secret societies. Riots broke out in 1920.

    These are the events that Lawrence, doubling as journalist and agent for British military intelligence, described in his dispatch for The Sunday Times. His final paragraphs make interesting reading in light of current events, especially the need for the US to rush additional troops to the region to cope with nagging Iraqi resistance.

    We have not reached the limit of our military commitments,’ Lawrence wrote. ‘Four weeks ago the staff in Mesopotamia drew up a memorandum asking for four more divisions. I believe it was forwarded to the War Office, which has now sent three brigades from India. If the North-West Frontier cannot be further denuded, where is the balance to come from? Meanwhile, our unfortunate troops, Indian and British, under hard conditions of climate and supply, are policing an immense area, paying dearly in lives for the wilfully wrong policy of the civil administration in Baghdad.’ And, in conclusion:We say we are in Mesopotamia to develop it for the benefit of the world … How long will we permit millions of pounds, thousands of Imperial troops and tens of thousands of Arabs to be sacrificed on behalf of colonial administration which can benefit nobody but its administrators?’

    All this underlines just how complicated will be the task of pacifying Iraq and then reconstructing it, which is why there has been such a premium on a swift military victory causing minimum civilian casualties and avoiding large-scale destruction of infrastructure. That prospect has faded. A viper’s nest has been stirred. The legacy of bitter conflict will further contaminate what is in any case a poisonous cocktail dating back to the days of British rule.

    As a paper on regional fallout from a war in Iraq by the Middle East program at the Royal Institute of International Affairs (Chatham House) points out: ‘Iraqi politics, from the creation of the state in the aftermath of World War I, have been dominated by the deployment of organised violence by the state to dominate and shape society; the use by the state of oil revenue to give it autonomy from society; and the recreation of ethnic and communal divisions within Iraqi society. The degree to which these dynamics can be overcome will depend upon the extent and nature of external influence in the aftermath of regime change. This in turn is dependent on the way war is waged.’

    The signs at this early stage are not promising. These are worrying moments for members of the coalition of the willing, no matter what sort of face they seek to put on progress in the war. History is not necessarily a comforting guide.

     

    The National Catholic Reporter, editorial, August 25, 2014.

     http://ncronline.org/news/global/path-destruction-began-1991

  • John Menadue. Scott Morrison at the Human Rights Commission.

    Minister Morrison, assisted by the Secretary of his department, continued his aggressive ways at the hearing on August 22.

    He said that his policies discouraged asylum seekers risking their lives at sea. He described himself as the champion of the voiceless, ‘the ones that are at the bottom of the ocean’.  He clearly wants to occupy the high moral ground.

    But was it really concern about deaths at sea which motivated his campaign against asylum seekers arriving by boat? Wikileaks reported that ‘a key Liberal strategist told the US Embassy in November 2009 that the boats issue was “fantastic” for the Coalition and ‘the more that came the better’ (SMH 10 December 2010).

    In Opposition the Coalition did not want the boats to stop. It did its best to ensure that the Labor Government did not stop the boats. That is why the Coalition sided with the Greens to block the agreement with Malaysia. The collapse of that agreement set in motion a dramatic increase in boat arrivals that ultimately led to Manus and Nauru.

    Scott Morrison’s concern for deaths at sea was not reflected in numerous comments he made in opposition to demonise asylum seekers. He told us that asylum seekers bring ‘disease’, everything from TB and hepatitis C to chlamydia and syphilis. He told 2GB that boat arrivals bring ‘wads of cash’ and large displays of jewellery. He urged his parliamentary colleagues to ‘ramp up the question to … capitalise on the anti-Muslim sentiment’. He described as a ‘government-funded junket’ Commonwealth government assistance for an 8-year old boy whose parents had been drowned off Christmas Island. He complained about the cost of holding funerals in Sydney for asylum seekers who had died off Christmas Island.

    That was not the moral high ground. But If Scott Morrison now feels a sense of moral responsibility that is to be welcomed.

    At the Human Rights Commission Scott Morrison avoided answering the question whether detention of children, or adults for that matter, deterred boat arrivals. He should have said, but didn’t, that there is no evidence that mandatory detention deters boat arrivals. We now know very clearly that what has deterred boat arrivals was not mandatory detention but government policies denying resettlement in Australia for any person who come by boat. It was the Rudd Government that started taking us down this path. That is why boat arrivals stopped and not because of mandatory detention.

    Both Scott Morrison and the Secretary of his department took exception to the President of the Commission, Gillian Triggs characterising the detention centres as prisons. The detention centres may not have armed guards, but they are worse than prisons. First, the detainees are not convicted criminals and they are not illegals. They are overwhelmingly vulnerable people seeking freedom from persecution. Over 80% of boat arrivals have been found to be genuine refugees. But not being criminals or illegals, we put them in hell-holes where many of them go out of their minds.  For innocent people the result is worse than being in prison.

    Second, we locate these detention centres in remote places with the clear intention of making it very difficult for detainees to have contact with friends, family or advisers. We are frightened that if the community hears their true story, we will show more concern and compassion. So we lock them up in remote places where we cannot hear their cries. Inmates at Long Bay are treated better than that.

    There is a major problem when the Minister for Immigration is both gaoler and guardian of children. A sensible start to winding back this appalling situation in the detention of children is for the minister to separate his roles.

    More importantly we need to quickly wind back mandatory detention for almost all asylum seekers. It punishes but does not deter. The evidence is quite clear on that. Unfortunately a succession of Immigration Ministers have pretended they are political tough guys by locking up both adults and children.

    What is more there are large savings to be achieved in winding back mandatory detention. Immigration detention costs over $3b per annum. Over $2b could be saved instead of filling the pockets of Serco, Transfield, the Salvation Army and others. The Commission of Audit pointed to the enormous differences in the costs of detention. For offshore detention it was $440,000 per head in 2013-14.; for on shore detention it was $ 239,000 and for community detention it was$ 90,000.  The most cost effective and the most humane is release into the community on bridging visas which cost $22,000 per head. In 2013-14

    Humanity and cost saving points to ending mandatory detention. Few comparable countries mistreat asylum seekers the way we do.

    Just as we now have a Royal Commission on sexual abuse I am sure that down the track we will have a Royal Commission on our treatment of asylum seekers.

  • Richard Woolcott. Indonesia under President Widodo.

    Australia will be dealing with a new Indonesian government in just two months. This will involve challenges and opportunities for both countries.

    The Constitutional Court in Jakarta has now confirmed the election of Joko Widodo as President-elect with 53.15% of the eligible vote. The Court’s decision is not appealable and he will be sworn in as President on the 20th of October.

    All Australians, especially our political leaders and senior officials, should be in no doubt that no bilateral relationship will be more important in the future than that with Indonesia.

    Indonesia stretches across our north, a distance from Broome in Western Australia to Christchurch in New Zealand. It is a country of some 250 million people, 81% of whom are Muslims. It has a literacy rate of 94%, an increasing middle class, and its economy is growing rapidly.

    Prime Minister Abbott has described the relationship with Indonesia as “our most important relationship” in many respects. His policy that his foreign affairs approach would be “more Jakarta and less Geneva” was shorthand for this approach.

    Our relations with the United States, China, and Japan, as well as neighbouring New Zealand and Papua New Guinea, are also of great importance to us. The future stability and prosperity of a democratic Indonesia is, however, of paramount importance to us.

    President-elect Joko Widodo, 53, represents a generational change and the potential for a significant shift away from established Indonesian politics. From central Java, he is a businessman who made furniture. He was the mayor of Solo, and then served 18 months as the Governor of Jakarta. He has a reputation of being a nationalist and a relaxed and friendly “man of the people”.

    While his experience of politics and of foreign policy issues is limited, he has indicated that he wants to unwind corruption and patronage in Indonesian politics and focus on raising the standard of living of the poor. His vice President, Yusuf Kalla, has more experience having been Susilo Bambang Yudhoyono’s first vice President for several years.

    Our government will need to discuss in depth with Widodo and Kalla, and the foreign minister when appointed, bilateral and wider foreign policy issues. Widodo has said that he is looking to make professional rather than political appointments, and it may be that Marty Natalegawa will be reappointed as foreign minister because of his wide knowledge and experience of foreign policy issues, with which Widodo is not familiar.

    Joko Widodo has said he wants good and consistent relations with Australia, but Indonesian sensitivities about territorial integrity and earlier allegations of phone tapping are seen as irritants in the relationship. Joko himself has referred to a “lack of trust” and he is aware that many Indonesian politicians and officials consider Australia as unpredictable and untrusting of Indonesia.

    The Joint Understanding on a Code of Conduct to manage more effectively the reaction to allegations that the Defence Signals Directorate was monitoring the phones of the President, his wife, and members of his staff is hopefully an important step forward if it is implemented to the satisfaction of both parties.

    The reason for the Indonesian reaction was that SBY had understood from his discussions with then Prime Minister Rudd that Australia was seriously seeking a closer, friendlier strategic relationship with Indonesia. Indonesia therefore saw the allegations as undermining trust. It was not, foreign minister Natalegawa argued, the way to treat a major neighbouring strategic good friend.

    It would be unwise not to acknowledge that the relationship has been damaged. In the 2014 Lowy Institute poll, 40% of Australians polled considered the relationship to be “worsening”. According to the Lowy institute the priorities on which Australia and Indonesia will need to consult most closely are asylum seekers, security, and terrorism. This will be a prickly task, calling for a courteous, culturally sensitive, sophisticated, and professional approach to restore and maintain the firmly based relationship we need.

    In our future relations with Indonesia Australia also will need to avoid several approaches, which have been disruptive in the past. One is “gesture politics” that is making statements and appointments that are insubstantial gestures in response to perceived public opinion.

    Australia should also avoid making statements on foreign policy issues which are essentially made for domestic political reasons but which are criticized by Indonesia, for example the suspension of live cattle exports without any prior consultation and towing boats back to Indonesian territorial waters.

    I believe we should listen more and lecture less. We also need to avoid making unnecessary statements that are seen as unbalanced in the region, for example alleged “assertiveness” by China and Japan are widely seen in Indonesia as responses to United States and Japanese assertiveness towards China.

    Joko Widodo is likely to make it clear that Indonesia will not take sides in China/US disputes, in China/Japan disputes, or on the South China Sea claims. Indonesia is not a claimant and has been assured by China that it does not claim any Indonesian territory. This underlines the desirability for Australia of a more nuanced focus on the region we share, and the regional problems that we need to manage.

    In this context I believe Australia does need a fundamental change to our national psyche, that would focus more on Asia than our traditional and well established links with the United States, the United Kingdom, Canada (collectively the “Anglosphere”), and Europe.

    We do need a continuous and sustained approach to the main countries of Asia. In this context a key task for the Australian government, when the new government is formed in Indonesia next October, will be to determine an appropriate and updated balance with our relationships with the United States, China, and Japan and to reinforce the government’s rhetoric about our role in the Asia-Pacific region with action and funding. We should consult Indonesia on a range of political issues, such as the Middle East for example, rather than limit our consultations to the United States, the United Kingdom, and Europe.

    There will be a major role for public diplomacy in that Australians and Indonesians do need to know much more about each other. It is regrettable that many Australians still regard Indonesia as a mysterious, chaotic, and corrupt country in which the rule of law is weak.

    According to the Lowy institute polls many Indonesians still see Australia as a potential military threat. This is largely because of historic fears, Indonesia’s size, its proximity, and its presumed potential instability as well as the situation in West Papua.

    While Indonesia, like Australia, welcomes a constructive and continuing United States involvement in the Asia-Pacific there is concern in Indonesia about the so-called “pivot to Asia” – now referred to as “rebalancing”. Many Indonesians regard Australian policy as too closely tied to the United States.

    The incoming Indonesian government can be expected to be concerned, for example, about close cooperation on the reported use of US missiles by the Australian navy and the purposes of drone flights from Australia.

    Also there will be concern that the Cocos Islands, so close to Indonesia and Malaysia, yet now part of Western Australia, might be used for security purposes in South-East Asia and the South China region. Such activities would be seen as directed at the containment of China, notwithstanding rhetoric to the contrary.

    To conclude, the importance of our bilateral relations with Indonesia, and regionally in the context of the Asian century, cannot be overstated.  As a nation we need to be genuinely and continuously engaged with the incoming Widodo government of our very large neighbour of increasing global and regional importance.

     

    Richard Woolcott was formerly Head of the Department of Foreign Affairs and Trade and Australian Ambassador to Indonesia

  • John Menadue. The Bishop and the Prime Minister

    In August 1987 The Bulletin published an account by Tony Abbott of why he left the seminary. A link to Tony Abbott’s account is below.     Following Tony Abbott’s account, Fr Bill Wright on August 25, 1987, replied. He was a priest at that time in the Archdiocese of Sydney and Vice Rector of St Patrick’s College, Manly. He is currently Bishop of the Diocese of Maitland/Newcastle. He is mentioned as a possible successor to Cardinal George Pell in Sydney.

    http://nofibs.com.au/2013/03/28/tony-abbott-on-why-he-left-the-priesthood/

    Bill Wright’s Bulletin article ‘Abbott’s decision: the other side’ is published below.  John Menadue

     

    “Abbott’s Decision: the other side

    Bill Wright responds to Tony Abbott’s account last week of why he left the seminary.

    Tony Abbott came to St Patrick’s College, Manly, in 1984 after taking degrees in Economics and Law at Sydney University, tumultuous involvement in student politics – he was Students Representative Council president in 1979 – a Rhodes scholarship to study politics and philosophy at Oxford, a distinguished sporting career and a stint of journalism.

    Physically large, loud in argument or jest, with the exterior self-confidence or brashness of those who have survived some tough schools, his was a commanding presence in the college community. Some were captured by his spaciousness; his warm, hearty and loyal friendship; his candor; and the moving sense that he was a man who had given up much in life to serve his Church.  Others, however, found him just too formidable to talk to, unless to agree; overbearing and opinionated; and with his heart really still set on other things, in other places.

    His first year here was not happy. Manly is not Oxford, nor even the law school. Not only is there less brilliance, with and sparkle to the acre – we draw on a broader constituency – but here also one has not only to enjoy or admire one’s companions for some aspects of their character, one has also to strike some more fundamental chord of fellowship with them, to find that they satisfy some vision of what a man, a Christian and a priest should be. Only on the extreme Left of politics is there as much need to believe in each other’s selfless devotion to the cause: only there is there as much faction and disillusionment. Tony was not, on the whole, impressed by his companions. He was certainly not fired by the stimulation of life at Manly.

    Manly did its best for him according to its lights. He was accelerated through the first two years of study in 12 months. Law, politics and economics, however, count as well for studies in theology as they might for studies in medicine. Tony required three years’ further study in theology which meant for all practical purposes three years at Manly or at some other seminary.

    Dr Grove Johnson, the rector at Manly, liked and believed in Tony. He saw the difficulty Tony had settling down to the constraints of life in the college and he believed that Tony should be sent overseas to study, as he had been. No student had been sent away for undergraduate studies for the priesthood since 1968. It was unlikely to happen. Johnson, however, hoped to encourage Tony and mentioned the possibility to him. This was a chimera which Tony would pursue almost until the day he left.

    In 1985 Tony faced a new seminary rector and a new discipline, theology. One of the tragedies of this story is that the study of theology did not capture Tony’s imagination. He did passably: not as well as his academic background might have indicated. I do not recall that he ever talked about theology while at Manly. His concern – and it was a genuine one – was with practical churchmanship: how the Catholic Church could better commend itself to the hearts of Australians; how the individual priest could enliven and uplift those who were turning away from uninspired ministers.

    As well as finding little real engagement with theology, Tony in 1985 fell out with seminary authority. The present rector, Fr Gerry Iverson, is not a debater. What he says is what he means and, even more importantly, what he feels. Tony, on the other hand is inclined to come on strong, to score points, to skate over or hold back any reservations he might have about his case. There was ample scope for misunderstanding between these two, and misunderstanding there was.

    Iverson did his best for Tony. He tried to share his concerns with him; but Tony wanted tangible support, not an analysis of his difficulties and especially not an analysis couched in the terms of psychology. Iverson gave him a lot of time and a good measure of real support. He put to higher authority Tony’s case for some other arrangement of his studies, he urged patience on the bishops when they were irritated by Tony’s public pronouncements on the ills of the church or the seminary – an irritation which Iverson privately felt as least as much as they did. He risked the ire of the archbishop by granting Tony approval to speak on radio and finally he supported Tony, within the limits of honesty, as a candidate for priesthood before both Bishop Murphy and Bishop Heather as well as lending his support to my appeal to Heather that he consider making some rather special arrangements for Tony.

    In any case, 1985 passed and in 1986 Tony was placed in the parish of Emu Plains for 12 months. He was not happy to be in this position initially but it turned out to be, I think, the best of his three years as a seminarian. Emu Plains and places like Emu Plains are what diocesan priesthood is all about. Maybe it could or should be about many other things as well but the ministry of a priest to the people of a parish is the raison d’etre of the diocesan priesthood. It is significant that Tony comments that he could not imagine this to be his life.

    Finally we come to 1987. Heather agreed that Tony could live on in a parish and attend a theological college by day. I do not know of any similar arrangement ever having been made in Australia. I thought Tony had won as much as was winnable. There was still the soul-ache for the life of the university, still the chimera, perhaps, of studies overseas. Well, it was not to be. Tony quit, as he says, on March 27.

    Quit? The word suggests giving up a struggle. The struggle for what exactly? I no longer feel that I know. For a time I thought that it was the struggle to be accepted, the struggle to get authority to say, ‘Yes, we’re behind you’. But that struggle Tony surely won. Two years of study stood between him and diaconate without the inconvenience of seminary life, without the continual appraisal of his performance. He had only to do his own thing to be home and oiled.

    Another man, attempting to put his finger on the heart of Tony’s difficulties said that he had a developed inability to be really intimate and that ‘without the warmth and trust of real intimacy’ he would find ‘life in the celibate priesthood too frustrating and lacking in peace’. Tony himself, reflecting on that, feels that the issue of intimacy was in fact, ‘a symptom of a deeper difficulty, namely a growing fear that I was not, after all, suited for a priest’s work …’  Either way, it is tempting to consider the possibility that, once Tony had beaten the system and was no longer able to locate the ‘struggle’ as being between himself and authority, he had no one much else blocking his path but himself. For another to say this is, of course, too glib: especially if the other has a vested interest in absolving his church and his seminary from as much blame as possible. No decent historian, either, would reach such a conclusion without access to the letters and diaries. But it is the sort of working hypothesis that a reasonable historian might come to and seek to explore further.

    There are many faults in seminary training. There are faults in those who administer seminaries, too. And there are special difficulties connected with the remoteness of the final authorities from the scene. In every student’s story, the problems that should not have occurred loom large.

    How odd of Jesus to make Judas an Apostle! And to turn away the rich young man? How odd that Peter, and not someone more stable (James?), was chosen leader? How odd that Paul was first a persecuter? That Ignatius had to be struck by a cannon ball: that Aloysius died a scholastic; that Pius X is a saint? Why should a man such as Francis have lived to see the corruption of his work?

    I do not presume to think, Tony, that I understand the interplay of freedom and providence. Neither, I am sure, do you. I only know that we must try to make things come out right, in the full knowledge that it may serve some  higher purpose for them to come out wrong. Or it may not.”

     

     

  • John Dwyer. The structural reform of Medicare rather than its funding is the real challenge.

    Part 2: Attracting the future work force needed to provide Primary Care.

    There is another imperative for introducing Integrated Primary care (IPC),the new model of primary care described in part one of this review; the recruitment of the next generation of GPs.

    Recent surveys of the career intentions of medical graduates show only 13% are interested in a primary care career and only 13% of them have any interest in working in rural Australia. They see that 70% of GPs do not want to be tax collectors for the government and note that the Medicare rebate for a standard occasion of service has been reduced to $31.60. GPs are specialists aren’t they? This is not attractive remuneration especially when socio-economic circumstances leave 80% of GPs with little option but to bulk bill their patients. This in turn leads to “turnstile medicine: unsatisfactory to both practitioner and patient, and the well documented poorer health outcomes associated with this form of practice. Many GPs want to move away from the “fee for service” model and try to do so by joining the “corporate” GP world. There many are dissatisfied with the model of care imposed on them.

    On the other hand young doctors considering a career in primary care are attracted to the IPC model; after all they have seen team medicine as a normal activity in our hospitals.  In New Zealand 85% of GPs have voluntarily abandoned fee for service payment in favour of salaried or contractual payments.  The same is true for 65% of US GPs. Currently about 65% of GP practices in Australia feature three or fewer doctors. However good the care on offer these are not strong economic units. IPC practices, established as companies with community representation on their boards, offer great flexibility and the chance for the clinicians working in the clinic to develop equity in the business. This is important as our GP specialist on average earn far less that many of their colleagues.

    IPC Clinics also facilitate the introduction of other urgent reforms. Pre-agreed per capita funding for patients with defined chronic conditions, if established competently by peer review, offers opportunities for better outcomes to be rewarded. There is an excellent opportunity for the planned replacement of “Medicare Locals” with “Primary Care Networks” to facilitate the introduction of IPC into Australia. Current discussions suggest that there are to be 21 PHNs established across the country. There mission statements are yet to be clearly defined but the better integration of patient care will be a major focus. By sponsoring geographically local sub-units (Lets call them Primary Health Care “hubs”) within defined Local Hospital Districts, affiliated IPC clinics in the area could be provided with the centralised assistance needed to better operate their care model.  IT expertise, bulk purchasing, continuing education resources, in house review of new drugs, meeting with local hospital clinicians re patients frequently readmitted to hospital and many other initiatives could be available. Although the review commissioned by the government recommended that PHNs not engage in clinical work, a number of primary care hubs in New Zealand offer acute care services and even run observation wards where patients can be treated for many hours while a decision re the need for hospital admission is made.

    So can we afford to introduce these structural reforms? The reality is that we cannot afford not to. Hospital expenditure dwarfs Medicare expenditure and increases more rapidly. The future of affordable quality hospital care is inextricably linked to better primary care reducing the demand for hospital services.

    IPC would provide us with many more healthy Australians whom we are predicting will need to work longer .A 40% reduction in avoidable hospital admissions would save us at least $12.5 billion a year and reduce much personal suffering. It can be estimated that these results would require an additional $5-7.5 billion a year being spent on Primary Care by the time the changes are fully introduced nation wide. Diverting the dollars spent on subsidising private health insurance would almost supply the money needed but there are many other savings that would follow structural reforms. Increasing the level of health knowledge among Australians would see them stop looking for health out of a bottle and provide the almost $3 billion they spend on unnecessary supplements, vitamins and “good bacteria’ for better primary care help. Better attention of many doctors to the need for an evidence base for the care they give could save $20 billion spent on low value or no value procedures. Nine departments of health for 23 million Australians comes with duplication costs of at least $3 billion.

    The reality at this time of course is that the Abbott government has shown no interest in structural reform for our health system. The peak advisory body on Prevention has been discontinued. However we must continue to engage the community in a discussion of what they want from their health system and alert Australians to the benefits of IPC. Adequate penetration of the new IPC model with all the structural and cultural changes required would take at least a decade.  We can all live with this journey providing the destination remains clear. The journey needs public support and bottom up implementation from within the health professions themselves. Politicians need not fear the slowness of progress within the election cycle. These reforms are achievable as we can note from numerous successful implementations elsewhere. The community will applaud the political leadership that commits us to the journey and supplies the infrastructure to drive the initiative. Ideally a transition authority would be established to guide us on the journey. The challenge now is to find that political understanding and leadership that will help us take that “first step” that must start all journeys.

    John Dwyer is Emeritus Professor of Medicine UNSW

     

     

     

     

  • Michael Keating. Government Concedes and Declares Victory

    For months the government and its various spokesmen in the Australian have been warning us that the nation faces a catastrophe if the Budget does not pass the Parliament intact. Essentially we were told that there was ‘no alternative’ if economic progress and certainty were to be maintained. Indeed Paul Kelly, to the considerable delight of many in the business community, waxed eloquent in the Australian about how the country risked becoming ungovernable if the government did not get its way.

    For the government, this line made political sense so long as the government was confident that its Budget would eventually pass, after the Senate changed on 1 July. In effect its strategy was to characterise the Labor Party and the Greens as being irresponsible, while it could soon expect to bask in the glory of achieving its chosen path to restoring the Budget surplus over time.

    Now, however, the government has had to recognise that the new Senate since July is just as obdurate as the last, and possibly even less predictable.  Instead, compromise is now the order of the day. Accordingly the spin also has to change. So now the story, faithfully reported in today’s Australian, is that most of the Budget has already been passed by the Parliament. The measures still outstanding will no doubt be watered down in the present negotiations, but despite the previous dire warnings, none of the still-to-be-announced changes will matter.

    Well I agree they will not matter much. Indeed they may matter even less than the government lets on as the proceeds of the higher fuel excise and the medicare co-payment were going to be spent on extra road funding and health research respectively, and in themselves did not represent a saving to the budget bottom line; now that extra money can be saved, which probably represents a better economic outcome.

    But what does matter to the government is that it will declare another victory as it properly moves to restoring the Budget surplus. And what should matter to the rest of us is that this required restoration of the Budget surplus over time could have been achieved more efficiently and fairly in other ways, with much less of the burden being imposed on the most disadvantaged members of our community, by relying more on real tax reform. See my three earlier postings ‘An alternate budget strategy’ on July 21, 22 and 23.