Category: Politics

  • An abuse of power by the Israeli lobby.

    In 1967 the Israeli military attacked the USS Liberty, an American spy-ship which had been monitoring Israeli transmissions about the conflict during the Six-day War. Intercepted Israeli communications indicated that the goal was to sink the Liberty and leave no survivors. 

    As the story reveals, – see link below – both the US President Lyndon Johnson and the Secretary of Defence, Robert Macnamara, did their best to ensure that this action by the Israeli military – an attack on the US navy – never became public. 

    This story is written by Ray McGovern who works with Tell the Word, the publishing arm of the ecumenical Church of the Saviour in inner-city Washington. After serving as an army infantry/intelligence officer, he spent a 27-year career as a CIA analyst. He is co-founded of Veteran Intelligence Professionals for Sanity (VIPS).

    During the tenure of President George Bush, he provided daily intelligence briefings to the Vice President and the Heads of National Security.   John Menadue

     

    http://consortiumnews.com/2014/08/17/a-uss-libertys-heros-passing/

  • John Menadue. Who triggered the disaster in Iraq?

    George Bush and his neocons must bear the principal responsibility for the disaster which is continuing to unfold in Iraq. In Australian terms, the most guilty partners are without doubt the Howard Government and News Corporation.

    The Howard Government’s decision to support the invasion of Iraq in 2002 was loudly supported by Tony Abbott. He said the invasion ‘was to liberate other people, to advance everyone’s interest and to uphold universal values that the coalition of the willing went to war in Iraq. If it’s possible to engage in an altruistic war, this was it.’

    The consequences of the war for Iraq have been almost unimaginable. Hundreds and thousands of Iraqis have died and been driven out of their homes. Genocide and ethnic cleansing is now widespread.

    We spent over $2 b on the Iraq war which the head of the AFP said made us less safe.

    We knew little and cared little about the history of Iraq and its people. Saddam Hussein was a tyrant, but he kept the clash between Shia and Sunni under some control. Christians and other minorities were tolerated. Islamic extremists did not get a foothold in Iraq. After Saddam was deposed and killed, Al-Queda grew in strength, which has now morphed into the murderous IS.  It is as if the heavens have really fallen in. Christians, minorities and moderate Sunni are being murdered.

    It is time John Howard and Tony Abbott really confessed that they made a terrible mistake in joining the coalition of the willing. They relied on dodgy intelligence information that was manipulated to support a previously determined political decision to invade Iraq. Our intelligence agencies, particularly the Defence Intelligence Organisation, were highly sceptical about alleged biological and chemical weapons.

    The best service we could have given to our US allies was to warn them against the course that they had determined to pursue.

    And there was News Corporation raucously calling for support for the war and doubting the patriotism of the war’s critics. The campaign by News Corporation in support of the Iraq war was as unscrupulous and dishonest as its campaign now in support of sceptics on climate change.

    In 2003, Rupert Murdoch said ‘We can’t back down now, where you hand over the whole of the Middle East to Saddam … I think Bush is acting very morally, very correctly … The greatest thing to come of this to the world economy … would be $US20 a barrel for oil.’ The next year, Rupert Murdoch told ABC Radio ‘There is tremendous progress in Iraq. All the kids are back at school, 10% more than when Saddam Hussein was there. There is 100% more fresh water … Most of Iraq is doing extremely well.’

    The Australian in an editorial mocked the critics of the war whom it described as ‘the coalition of the whining’. Greg Sheridan, the Foreign Editor of the Australian described George Bush as ‘a really modern Winston Churchill’. Three months after the invasion of Iraq, Sheridan still thought ‘weapons of mass destruction doubts are ludicrous’.

    Tony Abbott is now telling us of the appalling humanitarian plight of so many in Iraq. Yet he with John Howard and Rupert Murdoch, must bear a heavy responsibility for what has transpired.

  • Saree Makdisi. The catastrophe inflicted on Gaza – and the costs to Israel’s standing.

    The Israeli public relations is almost as powerful as the Israeli military machine. An alternative view is expressed below by Saree Makdisi, a professor of English and comparative literature at UCLA, and the author of ‘Palestine Inside Out: An Everyday Occupation’. This article was published in ‘Mondoweiss’ which describes itself as ‘a news website devoted to covering American foreign policy in the Middle East, chiefly from a progressive Jewish perspective’.  John Menadue

    http://mondoweiss.net/2014/08/catastrophe-inflicted-standing.html

  • John Menadue. Is there light at the end of the dark tunnel?

    In my blog of April 17 I outlined ways in which we might find a way out of the refugee quagmire. It is reposted below. 

    There is speculation that the government may announce an increase in the refugee intake to help the Christians and other minorities suffering dreadful persecution in Iraq and Syria. I hope this turns out to be the case and the beginning of a return to a more humane refugee policy.

    I could almost write Tony Abbott’s announcement. ‘Now that we have stopped the boats and put the people smugglers out of business, we can assist refugees in Iraq and Syria who are facing appalling persecution. By stopping the boats, we can increase our humanitarian intake in cooperation with UNHCR. This will be an orderly and regular program rather than allowing people smugglers to determine who comes to this country.’

    In my blog that I referred to, I suggested that the government should increase ‘regular arrivals from 13,750 to 20,000 per annum. This would be a useful start’.

    After the Howard Government’s pacific solution took effect, the refugee intake was increased from 7,642 in 2000-01, to 12,247 in 2006-07. In those same years, the settler/migrant intake was increased from 107,366 to 140,148.

    In that blog  of  April 17 I suggested  other actions that we could take which would be consistent with an ‘orderly’ refugee program – orderly departure arrangements with Afghanistan and Sri Lanka; alternate migration pathways and allowing asylum seekers on bridging visas in Australia to work.

    If Tony Abbott makes the announcement that I hope he will, it might be an opportunity to start rebuilding a bipartisan approach to refugee policy. 

    Even with the issue of boats off the political agenda, there are a lot of things that we can usefully do to protect the vulnerable and to restore our international reputation. John Menadue.

    Repost from April 17

    Is there a way we can turn this dross into gold, or if not gold, then a valuable metal? Is there a way through the present impasse that is both humane and practicable? I suggest there are some areas where we could have a broader discussion and decide what might be acceptable to the Coalition and the ALP. Surely some area of bipartisanship can be found. I suggest there are six areas which we should focus on.

    1. Action in the latter days of the Rudd Government followed by Operation Sovereign Borders has largely stopped boat arrivals. With so few ‘irregular’ arrivals, I suggest we should focus our attention on “regular arrivals” and increase the humanitarian program from 13,750 to 20,000 pa. This would be a useful start. It would demonstrate that the government is prepared to respond to asylum seekers and refugees in need provided they come through ‘regular channels’. (If today we took the same number of refugees that we took during the peak of the Indochina program and adjusted for population increase, our humanitarian/refugee intake would be about 35,000 p.a.)
      After the Howard Government’s Pacific Solution took effect, the refugee intake was increased from 7,642 in 2000/01 to 12,247 in 2006/07, the last year of the Howard Government. In those same years the settler/migrant intake was increased from 107,366 to 140,148.
      It is clear that having ‘stopped the boats’ as the Howard Government told us, they then considerably increased both the humanitarian and migrant intake. We should do the same again.
    2. Many Australians are concerned about the recent deaths and injuries on Manus and earlier on Nauru. It seems that asylum seekers where attacked by thugs within the Detention Centre on Manus. That is extraordinary and reflects on every Australian. A man has been killed in our name. We have a moral responsibility for any asylum seeker who comes to Australia and then is transferred to another country. To clarify the situation, I suggest that our moral responsibility should be strengthened by establishing a clear legal responsibility as well. We could do this by amending the Migration Act to ensure that there is ‘effective protection’ which is enforceable under Australian statute for any person that we transfer to another country. It would provide a discipline which is clearly lacking at the moment.‘Effective protection’ enforceable in Australian courts would need to be spelled out in the Migration Act to include such issues as non-refoulment, legal status when in another country, humane treatment consistent with the dignity and safety of the individual, and swift and efficient processing of claims. Surely the Coalition and the ALP could agree on ‘effective protection’ when asylum seekers are transferred to another country. The UNHCR should be asked to monitor ‘effective protection’.
    3. We need to address persecution and discrimination in source countries by negotiating Orderly Departure Arrangements with Afghanistan, Pakistan and Sri Lanka. Many asylum seekers coming to Australia come from these countries. We negotiated an ODA with Vietnam in 1983 whereby 100,000 Vietnamese came to Australia over many years instead of taking dangerous and irregular travel by land and sea. The Hazaras in Afghanistan and Pakistan desperately need our help through an ODA.
    4. We should consider other migration pathways that would reduce pressure on people to flee their countries. The largest number of asylum seekers coming by boat before the clamp down were Iranians.  I suggest that we should look at 457 visas or other migration pathways for young people from Iran. They would be great settlers.
    5. We need to address the issue of 30,000 asylum seekers in our detention centres and in the community whose refugee status has not yet been assessed. Immigration Detention Centres are very expensive and damaging to the individual. More asylum seekers should be carefully released into the community under bridging visas whilst their claims are being assessed. Most countries do this. In 2005 the Howard Government introduced the Community Care Pilot Scheme to assist asylum seekers in the community. Its focus was on case management. This pilot scheme became the Community Assistance Support (CAS) program and has worked well for asylum seekers in the community. Unfortunately a hostile political climate has made governments wary of developing the scheme. CAS should now be expanded.
      Further, as asylum seekers are released into the community, they should have the right to work. It is important both for their dignity as well as being in the interest of the Australian taxpayer. Surely the major political parties could agree on this. We have seen how country businesses like meatworks and fruit picking have welcomed asylum seekers.
    6. The only viable long term solution to desperate people taking risks in coming to Australia is through regional processing in transit countries and particularly in Indonesia with the cooperation of the UNHCR. We must bend our backs to do that. Julie Bishop would have an interest in this as it would help generate good will in our relations with Indonesia. We also need to build better relations with UNHCR.

    Surely we can find some bipartisan common ground in these six areas. Maybe we could find ways of turning dross into gold, or at least silver.

     

  • Peter Sivey. Health budget: GP care isn’t the problem, costly specialist care is.

    The opening of eight new medical schools in Australia in the past decade has seen a massive increase in the number of new doctors entering the workforce. The number of new junior doctors graduating in Australia doubled between 2004 and 2011. But while fears of an overall shortage of doctors seem assuaged, we don’t have the right mix of doctors.

    A recent trend is the increasing specialisation of the medical workforce. In 1999, 45% of Australian doctors were general practitioners (GPs) but this proportion had fallen to 38% by 2009. Similar trends can be observed in the United States and United Kingdom.

    This trend is concerning because primary care, provided by general practitioners, is the most efficient and equitable type of health care, particularly preventive care and the management of chronic disease. These components of GP-provided care have the potential to improve health outcomes, lower costs and reduce the need for future more costly interventions.

    In contrast, specialists tend to be reactive and expensive, seeing patients only when a health condition has taken a turn for the worse, when surgery, expensive pharmaceuticals, or other intensive treatments are required.

    Of course, a modern health-care system needs a high-quality specialist sector; specialists are the doctors patients rely on when they’re sickest. But workforce planners should strike the right balance between primary care and specialist physicians.

    So what is causing the growing imbalance towards specialism in medical career decision making?

    Our recent study asked junior doctors in Australia about their job preferences. We did this using a discrete-choice experiment, where respondents made hypothetical but realistic choices about their future career. By analysing their responses statistically, we could tell what factors drove their choices.

    Our results show a range of factors affect choice of speciality. Opportunity to practice procedural work and academic opportunities are some of the factors that drive junior doctors to specialise rather than choose general practice. But the elephant in the room is money.

    Specialists in Australia earn almost twice as much as GPs. Survey data shows average earnings in 2012 of $194,000 for GPs and $360,000 for specialists. Even when adjusted for the longer hours that they work, specialists’ hourly wages are still 60% higher than GPs.

    We found expected earnings have a large effect on choice of speciality. But lowering the income gap could redress the situation. Our modelling shows that increasing GPs’ earnings by A$50,000 per year (a 28% increase from 2008 levels) would increase the number of junior doctors choosing general practice by 11%, or 247 more trainee GPs per year.

    So, how can policymakers increase GPs earnings relative to specialists?

    The main policy tool available is Medicare. Medicare influences GPs’ earnings via rebates for the consultations they provide. Increasing Medicare rebates for GP services would therefore be a simple way of increasing their earnings. Of course, this is entirely the opposite of current government policies to introduce co-payments for bulk-billed consultations and reduce rebates.

    Innovative payment mechanisms may provide a more cost-effective way of increasing GPs’ relative earnings. Introducing additional funding sources using capitation (where doctors are paid for looking after enrolled patients for a whole year, not just per consultation) and pay-for-performance would allow earnings increases to be linked to higher quality of care, rather than just the number of consultations provided.

    Increased earnings for GPs needn’t blow a hole in the budget either. Offsetting savings could come from targeted reductions to Medicare rebates for specialist services, which would reduce the earning power of specialists, especially those working in private hospitals on privately-insured patients.

    In 2012/13, the government spent $3.9bn subsidising private specialist consultations. A proportion of these Medicare subsidies could be redirected to GP consultations.

    Together, these measures could reduce the relative earnings advantages of specialists over GPs, encouraging more junior doctors into general practice.

    Peter Sivey is Senior Lecturer, School of Economics at La Trobe University. This article was first published in The Conversation on 7 August 2014.

     

  • John Menadue. Missing in action when Kerry and Hagel come calling?

    I can understand Tony Abbott’s wish to direct attention away from the budget by going off to The Hague and London. But are Australia’s national and policy interests being served by his absence when John Kerry and Chuck Hegel visit us.

    In my blog of July 31 ‘Overplaying one’s hand’ I quoted Tony Abbott’s comments on MH370 in PNG. He said ‘Satellite footage shows what could be debris from the missing airline’s flight MH370’. But he was wrong.

    In Shanghai about two weeks later Tony Abbott said ‘We are confident that we know the position of the black box flight recorders to within some kilometres … we are very confident the signals we are detecting are from the black boxes on MH370’. On the same day Air Chief Marshall Angus Houston, who was in charge of the search, said ‘On the information that I have available … there has been no major breakthrough in the search for MH370’. What Angus Houston told us still stands. Apparently we are now to contract out the search for MH370 to a foreign company.

    Then Tony Abbott adopted what Paul McGeough in the SMH called ‘megaphone diplomacy’ on MH17. It has now become clear that it was the Malaysian Prime Minister who quietly contacted the rebels in Donetsk and secured the release of the refrigerated train with 200 bodies or more on board. The Malaysian Prime Minister also secured from the rebels the two black boxes of MH17. The role of the Malaysian Prime Minister clearly doesn’t suit Tony Abbott’s agenda. I have yet to hear him make any mention or thank the Malaysian Government for its role in what really mattered after the crash of MH17. Help from the Dutch and others has been helpful, but their contribution did not compare with what the Malaysian Prime Minister achieved. So Tony Abbott went to The Hague to thank the Dutch but there is still no sign of him dropping in to Kuala Lumpur to thank the Malaysian Government. Operation bring them home has become more like wait and see.

    Now Tony Abbott is on a side trip to London at the same time that the US Secretary of State, John Kerry, and the Secretary of Defence, Chuck Hagel, are in Australia. This is quite remarkable. After President Obama, John Kerry and Chuck Hagel are without doubt the two most important foreign visitors that could come to our shores at this time. But Tony Abbott was not here to discuss with them what more we might be doing in Iraq and Syria. Just imagine what News Corporation and other media might be saying if Prime Ministers Gillard and Rudd were absent at a time like this.

    Our national interest would be much better served with less grandstanding and less megaphone diplomacy.

     

  • Cavan Hogue. Russia boycott.

    Anyone with any knowledge of Russia could have told the Prime Minister that
    his gratuitous public and personal attacks on Mr Putin and on Russia in
    general would lead to retaliation. Russia was left with no other option
    except humiliation and Russians are too proud and too sensitive to accept
    that. So the Australian Government must have known that banning of our
    exports was the most probable Russian response and therefore prepared
    contingency plans to deal with this event. So why all the panic now? Why has
    the National Party not protected the interests of its constituents simply so
    Mr Abbott can engage in a contest with Mr Putin to show who has the hairiest
    chest?

    This is not about MH17 although our attacks on Russia after that can only
    have made things worse. The sanctions and insults to which Russia is
    responding took place before the plane was shot down. While we do not know
    for sure who did it, the most likely explanation is that some incompetent
    separatist thought he was shooting down a plane out of Kiev. Whether Russia
    was directly or indirectly involved is not clear. What would Russia have to
    gain by deliberately shooting down a Malaysian airliner? If stupidity will
    explain something, we shouldn’t look for devious plots.

    The Australian Government claims to have an Asian oriented policy so why are
    we getting involved in a European problem in which we have no direct
    interest? How will publicly insulting Russia promote our interests? And when
    will the Government explain what Australian interests have been served that
    outweigh the damage done to innocent Australian farmers?

    Cavan Hogue is a former Australian Ambassador to USSR and Russia.

  • David Stephens. The children suffer.

    Osbert Sitwell’s The Next War, published in 1918, depicts some plutocrats deciding what would be an appropriate war memorial. The senior plutocrat puts a suggestion which his colleagues eagerly take up.

    “What more fitting memorial for the fallen
    Than that their children
    Should fall for the same cause?”

    Rushing eagerly into the street,
    The kindly old gentlemen cried
    To the young:
    “Will you sacrifice
    Through your lethargy
    What your fathers died to gain?
    The world must be made safe for the young!”
    And the children
    Went . . .

    Are we in Australia just as keen on roping children into war as Sitwell’s plutocrats were? We do not explicitly say to them, ‘you must fall for a cause’ but we sanitise and normalise and proselytise ‘sacrifice’ in war in a way that cannot fail to be attractive to some children, even while we protest that we abhor war and wish to save future generations from it. Teaching children about war can so easily become teaching war to children.

    Politicians keep track of the involvement of children in war remembrance. The then prime minister, Julia Gillard, said last year that she always looked for the number of children at Anzac Day services and noted there were ‘more and more’ and that parents admitted they had been ‘dragged’ along by their children.

    So it’s actually the children who are driving the next level of engagement and I think that that means that for all of time, we will commemorate Anzac Day and think about who we are as Australians on that day.

    This attitude is bipartisan. The current Minister for the Centenary of Anzac, Senator Michael Ronaldson, said to the New South Wales Branch of the RSL earlier this year that

    2014 to 2018 means that you and I have another opportunity to teach another generation of young Australians what their obligations are. And if we do not do so ladies and gentlemen, then we have failed them and we have failed ourselves.

    When I asked the Minister’s office what sort of obligations he was referring to (social? moral? legal?) the answer was non-committal. More recently, the Minister told Sydney Legacy that he wanted by the end of 2018 to have

    the next generation of young Australians doing what you and I are doing at the moment. They will be carrying the torch …

    And when they hop on a school bus, or they walk home, or they go shopping, or they go out at night with relative freedom – that they realise in many instances that freedom has been paid for in blood. And they must understand that.

    The Minister’s department, Veterans’ Affairs, runs an extensive education program, with booklets, posters and teaching aids flowing to schools or downloadable without charge. Marilyn Lake and others have questioned the appropriateness of this activity and have suggested it is government-sponsored indoctrination. Some teachers, nevertheless, say the DVA material is ignored, thrown away or balanced with other resources. Honest History’s research suggests that another flagship commemorative program, the Simpson Prize, is very much a minority activity and is, in any case, tentatively moving from civics education with a military flavour towards a genuine history activity.

    On the other hand, children are referred to the jingoistic tosh of retired Colonel Arthur Burke OAM, who wrote of the torch of freedom being passed from dying hands on the beach at Gallipoli to children today, or they sit through Anzac services with scripts downloaded from the Australian Army website. The Australian War Memorial encourages primary school age children to write messages on little crosses to be planted in the graves of dead soldiers in war cemeteries in France and Belgium. The Memorial has also commenced the Roll of Honour Soundscape project, where thousands of children are being invited to recite names from the World War I Roll of Honour for replaying in the Memorial’s cloisters continuously for the next four years. Questions about whether this is a sensible activity for 12 year-olds are brushed aside with rhetoric about helping children ‘connect’ with the dead.

    Meanwhile, school visits to the Memorial continue to be subsidised and perhaps half a million children a year visit. The Memorial continues to offer its mini-theme park ‘Discovery Zone’ (‘touch, listen and smell’ but no corpses in the imitation World War I trench), its Memorial boxes, and various other resources and activities, at minimal charge. Projects in schools feature prominently in the Anzac Centenary Local Grants Program and schools compete for the Commonwealth’s Anzac Day School Awards and many similar Anzac-themed competitions and events in the States and Territories.

    When you question teachers or resource providers about the ethics of teaching children about war, the answer is often along the lines of ‘we give the children something that is appropriate to their age’ or ‘they get a nuanced view when they are younger and then more details later’. That this process may never work its way towards honesty is indicated by the continuing tendency of adult, official spruikers of war commemoration to use euphemisms like ‘fallen’ and ‘sacrifice’ in relation to dead soldiers, to avoid terms like ‘eviscerated’, ‘decapitated’, or ‘blown to bits’ to describe the circumstances of those deaths, and to continue to peddle overblown rhetoric about ‘dying for freedom’. What is involved in the rather nebulous concept of ‘connecting’ with the dead is never really spelled out. Connect with what purpose?

    We adults are champions at ‘nuance’ in relation to war so it is no wonder that children are fed loads of it. The essential message that war requires soldiers to kill or be killed is lost in nonsense about connecting or ‘understanding’ or smothered by sanitised collections of war memorabilia and dress-ups.

    I saw the Anzac Day march in Lismore, New South Wales, this year. There were lots of school children there in uniform, some of them marching in step, like soldiers. I wrote to the local RSL afterwards, suggesting it was wrong for children to imitate military practice. Had the gentleman replied, I’m sure he would have said something about ‘not glorifying war’. He would also have avoided the question of whether relentless, ubiquitous, sentimental commemoration gives children a rosy impression of war. He would have skirted the implications for future generations of their ‘obligations’ to carry the torch of remembrance.

    This torch carries many messages – has many ‘nuances’ – including the usually unspoken one that freedom, allegedly ‘paid for in blood’, may have to be redeemed in similar fashion in the future. Meanwhile, there is a club in Lismore, a club where old Diggers go after the Anzac march. It has a neon sign, ‘The price of liberty is eternal vigilance’ The vigilant are getting younger every year.

     

    David Stephens is secretary of Honest History (honesthistory.net.au). Honest History is a broad coalition of historians and others, committed to frank debate and expressing a diversity of opinions on specific issues. Views in this article are the author’s own. The Honest History website contains a version with links.

     

  • John Menadue. Diplomatic lessons for Canberra.

    In my blog of July 31 ‘Overplaying one’s hand’ I said that there were clear lessons to be learned from the disasters of MH370 and MH17. The lessons are – don’t overplay your hand or overstate your case for domestic political reasons.

    Today in the SMH, Paul McGeough, see link below, refers to the failure of megaphone diplomacy over the loss of MH17. He says ‘While Abbott and Bishop opted for megaphone diplomacy against the rebels’ sponsors in Moscow, Malaysian Prime Minister, Najib Razak, quietly made phone calls to the rebel leadership in Donetsk, in which he achieved essential outcomes – the release of the refrigerated train on which the rebels had stored the 200 or more bodies and the handling over to Malaysian officials of the Boeing 777’s black boxes, which are essential for crash investigators.’

    Now Tony Abbott is off to the Netherlands to thank the Dutch Prime Minister and  the AFP and other officials. But surely the priority call should be in Kuala Lumpur. It was the Malaysian Prime Minister who helped most of all on what really mattered. Why won’t Tony Abbott accept that? Perhaps he could make amends by dropping in to KL on his way home.

    In the same paper on the same day Peter Hartcher said that Abbott’s conduct over MH17 ‘has been impeccable’.Where has he been!

     http://www.smh.com.au/world/mh17-search-in-ukraine-turns-into-mission-impossible-20140808-101wxf.html

  • Michael Sainsbury. Will China’s crackdown save or sink the Communist Party?

    In launching an investigation into former security chief Zhou Yongkang, Chinese President Xi Jinping has entered uncharted and possibly dangerous territory. It not only raises the stakes for Xi’s increasingly iron fisted rule, but also for the Communist Party itself.

    The case announced last week targets an official who until recently was ranked the third most senior member of the party hierarchy as a senior member of the elite seven-man Politburo. Zhou controlled the police, paramilitary, courts and state security.

    Never before has such a senior figure faced a corruption probe in Communist China, a sign that Xi is going after some of the biggest “tigers” in the party as part of a wide-reaching fight against corruption. Former Energy Commission chief Liu Jiemin, retired army general Xu Caihou and Guangdong party chief Wan Qingling have already been targeted. Wang Qishan, a current Politburo member and the head of the party’s Central Discipline and Inspection Committee is leading a purge that includes hundreds of people around Zhou.

    In Wang, Xi has chosen one of his most capable lieutenants to head the campaign. Wang, an erudite former banker, is very well regarded in international business circles, and was seen as a certainty to be Premier Li Keqiang’s chief deputy. In trying to trace the tortuous money trails that lead off key officials and their families, who is better qualified than a banker?

    The main target has been the state oil industry clique of which Zhou was the godfather – many previously under him are now under investigation. Zhou is by any measure a reprehensible human being. He sanctioned a program of extra-legal kidnappings and torture, and rumors remain over the death of his first wife in a car crash in 2000, leaving Zhou free to remarry a famous television anchor 28 years younger than him.

    The Chinese press have hinted in recent weeks that foul-play may have been at work. The corruption probe against 71-year-old Zhou represents a clear warning that no one is safe, and China is increasingly rife with rumor about who could be next. Chinese state media – without naming anybody – is making increasingly unsubtle noises that Xi’s administration could next target former president Jiang Zemin, a still powerful figure in the so-called “Shanghai clique” and the man who propelled Xi himself to power.

    There have been strategic purges at state-owned companies and government departments in recent weeks, all of which eventually lead back to Jiang. “Who cultivated the corrupt officials of today? Were they promoted for a reason?” Asked the state-run Xinhua in a blog published in early July.

    After previous anti-corruption campaigns withered away, many doubters failed to take Xi’s effort seriously, seeing it as just another purge against internal enemies as the propaganda department cast him as a man of the people. Both Xi and predecessor Hu Jintao named corruption as the single biggest threat to the Communist Party’s survival. Hu also launched a drive against corruption early on during his presidency, but never on a scale or reaching the party heights seen so far under Xi.

    “This is massive,” says Kerry Brown, executive director of the China Studies Centre at Sydney University. “I think they know that the sort of tribal style of looking after your patronage networks that was practiced par excellence by Zhou is old style, the sort of method of someone in charge when China was pumping out double-digit GDP growth. Now those years are over and the terrain is tougher.”

    Xi appears ready to destroy the party faithful for the good of the collective, and with an expected seven more years at the helm, many more senior purges are expected. The detention of Zhou is the clearest signal so far that party is deeply concerned that the odds of its own survival are slimming.

    The Communist Party has reached an intellectual cul-de-sac, appears ideologically bankrupt and bereft of any purpose save power for its own sake and its associated wealth, apparently the target of Xi’s pogrom. At the center of his plan is a raft of wide ranging economic reforms. The corruption campaign is central to them in two regards: cowing officials into submission, and making sure under-the-table deals are not derailing those reforms.

    But there is a dark side to Xi’s campaign. Like the crackdown on high ranking officials of the regime, the campaign against religion – particularly Islam and Christianity – has gathered pace with stricter measures against Muslims in western Xinjiang and orders to remove hundreds of crosses in eastern Zhejiang province. China’s emperors old and new have always viewed themselves as the moral authority, and Xi appears to be determined to restore the party to this lofty position.

    It’s by looking within China and its history that Xi’s actions make the most sense: he, like the rest of the Politburo, studied in China. None come from the growing ranks of those who have been exposed to higher education in the West. The general disturbing lack of exposure to the outside world is probably why the leadership continues in the belief it can conduct deep and serious economic reform with barely a pretense of political change.

    “There is obviously a consensus view amongst the current leaders on this,” Brown says. “They are risk averse, and doing something like this means they feel it will deal with a profound crisis in the party of being able to maintain its legitimacy and authority as the country undertakes some of the hardest possible changes over the next few years.”

    Xi appears to be choosing the path of lesser risk, taking a stand now that threatens far-reaching and unpredictable repercussions in the hope of staving off a bigger crisis down the line.

    He clearly believes there is little time left. But convincing those around him he can steer everyone to safety only by tossing friends and colleagues overboard is a hard sell, especially when you haven’t told them who – in fact – is going to be sacrificed.

    Michael Sainsbury is a Bangkok-based journalist and commentator. 

    This article was first published in ucanews.com on 7 August 2014.

    Read more at: http://www.ucanews.com/news/will-chinas-crackdown-save-or-sink-the-communist-party/71609

  • Tessa Morris-Suzuki Rare Earth, politics and human rights.

    On 5 July 2014, the ABC’s PM program ran a report which revealed that “a leading Asian human rights activist has urged the Federal Government to investigate a Queensland-based resources company and a prominent Australian geologist over mining deals with North Korea that he believes may breach United Nations sanctions”. (http://www.abc.net.au/pm/content/2014/s4061381.htm)

    The report looked at a project by the firm SRE Minerals to develop rare earth mines in North Korea. The prominent geologist in question is Brisbane based scientist Louis Schurmann. This scheme has come under attack from Japanese activist Ken Kato, head of an organisation known in English as “Human Rights in Asia”, and in Japanese as the “Asian Investigation Organization” (Ajia Chosa Kiko). Kato, as PM reported, has lodged a complaint with Australia’s Department of Foreign Affairs and Trade, stating that Schurmann’s activities may be in breach of UN sanctions because “rare earths are an indispensable material for guided missiles”.

    The activities of SRE Minerals in North Korea should certainly be discussed in the public realm. If this project is likely to contribute to North Korea’s missile program, it is clearly an international problem. On the other hand, UN sanctions do not ban all economic contact with North Korea. Further information and debate is needed to determine the rights and wrongs of this project.

    But that debate must also include a careful look at the background of Ken Kato’s “Human Rights in Asia”. This is not (as one might assume from its English title) a broad based major human rights organisation, but rather a body that targets virtually all its criticism at North Korea, with an occasional barb at China. Kato describes himself on his blog, not as a “leading human rights activist” but as a “conservative lobbyist” (hoshukei robi katsudoka), which is clearly what he is. (see http://kenkato.blog.jp/)

    His organisation exists in the space that emerged following the 2002 revelation that a number of Japanese citizens had been kidnapped by North Korea in the late 1970s and early 1980s. Five of these victims have returned to Japan, but an uncertain number – at least eight and almost certainly more – have never returned. North Korea officially claims that they all died, but negotiations between the Japanese and North Korean governments are now underway, and it seems likely that further revelations about the fate of the remaining abductees may come to light in the coming months, and that some may still be alive in North Korea.

    Meanwhile, various groups have emerged in Japan claiming that hundreds of other Japanese missing people were in fact abducted by North Korea, and that Japan must force the DPRK to return them all. Kato’s group is one of these. For the past several years it has been conducting an campaign to “strangle” North Korea until it “spits out” the hundreds of abductees whom Kato believes it is still holding. The campaign involves persuading the group’s members to lobby organisations and foreign governments which, it thinks, are engaged in any activities from which North Korea might earn foreign currency. An article appearing on the Internet under Kato’s name states that the only way to deal with North Korea is to confront its leader with a choice between “being killed in a coup d’etat or returning the abduction victims”. (http://kakutatakaheri.blog73.fc2.com/blog-date-201203.html)

    The activities of “Human Rights in Asia” are not exclusively focused on North Korea. For example, in 2011, under the heading “Save our Sacred Territory”, Kato appealed to his readers to send messages to the New York Times condemning it for publishing an opinion piece in which a commentator (who was otherwise very critical of China) expressed the personal view that China has a viable claim to the disputed Senkaku/Diaoyu Islands. Now, under the heading “We Did It! A Huge Step Forward”, his blog is proclaiming vitory in its Australian campaign.

    The issue of human rights in North Korea is an enormously important one – too important to let it become entangled in such messy nationalist politics. We need a careful and calm debate about the rights and wrongs of economic engagement with North Korea, not a campaign initiated and dominated by self-proclaimed conservative lobbyists.

     

    Tessa Morris-Suzuki is an Australian National University College of Asia and the Pacific Japanese history professor and an Australian Research Council Laureate Fellow.

  • ‘The real danger to Israel comes from within’ interview with Eva Illouz and De Spiegal.

    This interview in De Spiegal is of interest and merit on the Gaza crisis. See link below.  John Menadue.

    http://www.spiegel.de/international/world/interview-with-sociologist-eva-illouz-about-gaza-and-israeli-society-a-984536.html

  • Richard Butler. US: What Leadership?

    There is continuous debate, within the US, about President Obama’s handling of international affairs. To some, he has responded to their wish to see the US less entangled, everywhere; to others, he’s a feckless weakling and should be impeached. The only thing that seems clear about this debate is that it is agitated, apparently, interminable and operates on a low factual base. 

    The role of the Washington Post, in print and on line, in this discourse in the US and beyond, is believed to be significant. This makes the thoughts and decisions of Fred Hiatt very important. He is editor of the Post’s opinion page, which publishes 4 or 5 op-ed pieces each morning, chosen by him, and Hiatt’s own piece once a week.

    At the end of July, his piece lamented President Obama’s alleged disengagement with the world and the evacuation of US leadership it had produced: “We have witnessed as close to a laboratory experiment on the effects of US disengagement as the real world is ever likely to provide”. He gave as examples of such disengagement: the withdrawal of US troops from Iraq, the failure to adequately support the opposition to Assad in Syria, the failure to ensure a better post-Qaddafi Libya, and, the acceptance of the Russian proposal to dispose of Syria’s Chemical Weapons, rather than to bomb Syria.

    Hiatt began his piece by acknowledging that the world is currently facing a somewhat bewildering array of disturbances and that opinions of Obama’s and his Administration’s responses to them varies widely.

    But, he offered no concrete policy suggestions, relying instead on an unspecific notion of “leadership”, which it is fair to say, accurately translates, for most purposes in the US, as the achievement of US aims and interests, mainly through the threat or use of military force. Indeed, this identification of foreign policy with military actions has become entrenched in the US public discourse. This cast of mind is also reflected in the fact that the US maintains some 800 US military bases in the world.

    Hiatt’s uncertainty in his own outlook, is underlined by his concluding remarks, drawing on his introduction of the laboratory analogy:

    “There are no true laboratory experiments in international relations. Even with different US policies the Arab Spring might have fizzled and the Iraqi army may have crumbled. No one can say for sure what would have happened if the United States had not signaled its exhaustion with external affairs, downgraded its interests in Europe and the Middle East, abandoned Iraq and stayed aloof from Syria”.

    It must be pointed out that, astonishingly absent from this reflection, is any notion that at least one important source of current malaises is US military and political intervention, such as in Iraq.

    If the need to examine so called US leadership in the world is to be taken seriously, it would be best if it were first defined in a way which went beyond the achievement of US purposes and was thus, able to attract some acceptance, because of its substantive goals.

    One such goal was articulated by President Obama in Prague in April 2009. “I state clearly and with conviction America’s commitment to seek the peace and security of the world without nuclear weapons”. This US policy goal, articulated publicly, at the highest level won world wide acclaim, And, President Obama was awarded the Nobel peace prize.

    The current facts with respect to attempts to both control the spread of nuclear weapons and to eliminate them, are multifarious and depressing. Here are some highlights: the US is increasing it’s expenditure on it’s arsenal and reducing it’s expenditure on non-proliferation ( see: Douglas Birch in Politico, July 30); Russia is developing a new generation of warheads and it seems has recently violated the intermediate range nuclear arms treaty by testing a prohibited missile; India is significantly expanding it’s missile delivery range and capability; Pakistan is producing new nuclear weapons at a rate faster than any other country; a few days ago, the US and the UK signed a 10 year extension of it’s nuclear weapons cooperation agreement, keeping the UK’s Trident system alive; North Korea continues it’s nuclear weapons and delivery capability development.

    To this list, which is merely some highlights, should be added the continued US protection of Israel’s nuclear weapons capability and the immensely fractious and plainly hypocritical business of attempting to prevent Iran from acquiring nuclear explosive capability, while others maintain and expand theirs.

    Incidentally, to introduce Ukraine into this picture, because of the current crisis; in 1994, the newly independent Ukraine decided to return to Russia the substantial number of nuclear weapons the USSR had stationed on its territory, and to join the NPT as a non-nuclear weapon state party to the Treaty. In return, its independence and territorial integrity was guaranteed by the UK, US, and Russia, the depository states of the NPT. This was an Agreement signed by those three and Ukraine, in Budapest. It seems to have been forgotten in Moscow and Donetsk.

    Fred Hiatt accuses President Obama of thinking: “he could engineer a cautious, modulated retreat from US leadership”. This is Hiatt’s characterization of Obama’s decisions which wound down costly, misbegotten, failed foreign interventions, something which has widespread support within the US and which decency should recognize, as desirable.

    Many contend, and it is clear, that President Obama has, in fact, shown determined leadership in these contexts, in the face of vituperative criticism from the right, within the US polity.

    But, US leadership is, in fact, in deep deficit in the areas of: nuclear weapons and reform of the UN Security Council, which the US Ambassador to the UN Samantha Power has publicly acknowledged is needed.

    Nothing will happen in those areas without US engagement, and that of the other Permanent Members of the Council.

    If nothing happens, the five permanent members of the Security Council will continue to abuse their veto power and neuter the UN in the performance of it’s responsibility for ”the maintenance of international peace and security” ( look, for example, at photos of Aleppo today, and the devastation in Gaza); and as was pointed out in 1995 by the Canberra Commission on the Elimination of Nuclear Weapons, as long as nuclear weapons exist, they will one day be used either by accident or decision and, that any use would be catastrophic.

    These are fit subjects for leadership

    Richard Butler AC, was Australian Ambassador to the United Nations and was appointed by Prime Minister Keating to Chair the Canberra Commission on the Elimination of Nuclear Weapons.

  • John Tulloh. The Grief and Pain of Life in Gaza.

    ‘Gaza is a tragic place’, observed John Lyons, The Australian’s Middle East correspondent, the other day. It certainly is. Gaza must be one of the worst places in the world in which to live or at least try to survive. For starters, its population of more than 1.7 million long-suffering Palestinians has to live in an area of just 365 sq km. Compare that with Sydney’s 12,145 sq km. They have no control over their Mediterranean waters or their air space. That belongs to Israel. Israel, along with Egypt, controls who and what come in and out, making it as some see it the occupying power even though it officially disengaged from there in 2005.

    The people of Gaza live under the rule of Hamas which has done little to advance their economic prospects. While Hamas was democratically elected, its leaders have shown scant concern for the well-being of the electorate. They have mounted relentless rocket attacks on neighbouring Israeli towns and other Jewish targets, knowing full well the deadly consequences. The Israel Defence Force website tracks the number of rockets launched. Since Hamas came to power in 2006 the total is a figure many Australians would find hard to comprehend as part of our daily life: 11,687.

    Three times in the past six years, Israel has been sufficiently provoked to go to war against Hamas with punishing and lopsided results for Gazans as we are witnessing at present. For them, that means Israeli shells whistling in from tanks on the sand dunes along the border or warships off the coast or missiles from the air. Homes are destroyed or blown up in an instant. So are what normally would be thought to be safe places for Gazans to seek shelter, such as schools, mosques, hospitals and even refugee camps. Currently, the U.N. says 167,000 Gazans are displaced.

    Israel says it targets only sites which it claims Hamas uses to store rockets or from which to fire them. It tries to warn residents in the vicinity that an attack is just minutes away. While this may be noble in the absence of rules in today’s warfare, the Israeli human rights group, B’Tselem says more than half the Gazan dead are innocent civilians. The total Gaza death toll in the current offensive is more than 1350 as well as 56 Israeli soldiers and three civilians. The Gaza Health Ministry says the number of injured is 6000. Who knows what the long-term trauma might be for Gazans, not to forget those Israelis having to live with the constant threat of rockets hitting them.

    Gazans may well hope that the U.S. will arrange a settlement to bring them peace. John Kerry, the Secretary of State, mishandled the talks to try to achieve that, according to many observers. He has virtually walked away from them now, much to the satisfaction of hardline Israelis. President Obama urged Benjamin Netanyahu to cease the Israeli bombardment. The Israeli leader simply ignored him and increased the attacks just as he did with the same plea from the U.N. Secretary-General, Ban Ki-moon. It is yet another example of  Washington’s influence in foreign affairs counting for so little these days, even with one of its closest allies.

    It also must be yet another cause for disillusionment by Gazans. Some may even hark back to the days when Israel occupied their tormented land. The economy was much better then, thanks in part to the 9000 Israelis who settled there. They brought industry and agriculture, creating hundreds of jobs. But the settlers were evicted when Israel relinquished control of Gaza in 2005.

    When Hamas came to power in 2006, the U.S. and the European Union refused to recognise it and suspended direct aid. They regarded it as a terrorist organisation. Hamas had to rely on aid from friendly countries like Turkey, Qatar and Iran.Then Hamas and Fatah, which controlled the West Bank under the Palestinian Authority umbrella, fell out. This led to more distress for Gazans: power struggles and Palestinians (Gazans) killing each other – 600 no less.

    Next, Israel imposed economic blockades in response to Hamas rocket attacks. Egypt, which controlled the south-west border, joined in because of suspected connections between Hamas and terrorist groups operating in the Sinai. All this led to shortages of fuel, urgently-needed medical supplies and cement and building materials. At times the border was closed altogether, preventing Gazans carrying out employment in Israel. At one stage, they had no power for seven weeks. In fact, this week’s Israeli bombardment has knocked out the power station again.

    But Gazans were not without ingenuity. They dug tunnels from Egypt in particular to smuggle in all manner of supplies, including rockets. Emboldened, they also dug a network of tunnels to infiltrate Israel. Given Israel’s record of security vigilance, it is astonishing that the tunnels managed to escape detection. Their discovery further inflamed Israel, resulting in the ferocity of its current action to destroy them along with Hamas’ weapons arsenal.

    The chances of a permanent settlement are remote. Israel says it is determined to crush Hamas and would not consider any deal until its foe was fully disarmed. Hamas says it has no interest in any deal with conditions. Indeed it would be contrary to its whole raison d’être of wanting to drive Israel from occupied land. So for now we can expect a continuation of those distressing images of anguish and tears as Gazans learn of the deaths of their loved ones and return to what is left of their homes and of Israelis as they bury their soldiers and run for cover when sirens alert them of another Hamas rocket on its way.

    The overwhelming military might of Israel and its destructive deeds against its comparative Dad’s Army neighbour have been a disaster for the Jewish state’s international image. It has provoked ugly attacks of anti- Semitism, especially in Europe. But a poll shows that the overwhelming majority of Israelis are in favour of the offensive against Hamas.

    Wars have never brought genuine peace to the Middle East. They never will, given the deep historic, cultural and religious differences. The antagonists have created so much hostility among themselves that the likelihood of any enduring peace settlement is remote and the cycle of violence will continue its terrible toll.

    FOOTNOTE: In 1972, five years after Israel drove out the Egyptian forces and began its occupation of Gaza, I visited the territory. I was amazed to encounter a small factory where Gazans were making Israeli military uniforms. ‘Why not?’ someone said. ‘We need jobs’. Nothing has changed except the relaxed atmosphere in Gaza then is anything but today.

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

  • Walter Hamilton. One Man’s War.

    Japan both treasures and abhors its status as the only nation to have suffered a nuclear attack. The bombings of Hiroshima and Nagasaki are perceived, because of their unique and extraordinary destructiveness, as moral markers: warnings to the world and proofs that Japan paid in full for its part in the war.

    The A-bomb attacks are also portrayed in some Japanese narratives as events outside history, in the sense that they cannot be compared to anything else, acts that should never have happened and should not happen again. Rather than being the historical full stop in a sentence that begins with Nanjing or Pearl Harbor or Singapore, the atomic wastelands shame to silence attempts at arguing the logic of cause and effect.

    August 9th will be the 69th anniversary of the A-bombing of Nagasaki, which followed by three days the destruction of Hiroshima. In those two cities more than 200,000 people were killed outright or died within six months from wounds or radiation sickness. Even if one accepts the argument that the first bomb was necessary to shock Japan’s leaders into surrendering, the use of the second so soon afterwards seems wantonly cruel. For a Japanese person, therefore, any thought that he or she had a hand in delivering Nagasaki to its fate would be the stuff of nightmares. Which is exactly what 85-year-old Satoru Miyashiro says he has been struggling with these many years.

    To explain Satoru’s story is to open up the Hiroshima-Nagasaki narrative to a more subtle interpretation of responsibility, adding new ironies to the decisions that produced the mushroom clouds.

    Satoru Miyashiro was just 16 when employed at the famous Yahata Steel Works near the city of Kokura in northern Kyushu. Whenever the air raid sirens sounded it was his job to help light drums of coal tar placed near the steel works to create a smoke screen to prevent the B-29 pilots gaining a clear sight of their target. This counter-measure had been devised as early as 1936 because of Yahata’s importance as an industrial asset; by 1945, the local air defenses were so depleted little else stood in the way of Bomber Command.

    The Americans identified Yahata early on as a prime target, but initial bombing raids proved ineffectual. Everyone in the city of 250,000 knew they were living on borrowed time.

    The list of Japanese cities targeted for incendiary attacks was a long one: the sort of hit parade nobody would want to be on. A much shorter list of cities was drawn up in April-May 1945 for the atomic bombs. The American military-civilian committee given this task included the old capital, Kyoto, among them. The cultural treasure-trove was assessed as a major industrial centre.

    The Secretary of War, Henry Stimson, however, was familiar with Kyoto from having visited there some years before and vetoed the decision. In its place Nagasaki was added to the list.

    Young Satoru, of course, knew nothing of these high deliberations in Washington. He was fully occupied at Yahata fighting fire with smoke. Then came news of a terrible new kind of weapon unleashed on Hiroshima the morning of August 6th; like many in Yahata, which was still largely unscathed, Satoru feared what was coming next. Sure enough, two days later, the B-29s arrived overhead. But it was a conventional, not a nuclear attack (though 20 per cent of the urban area was destroyed by incendiaries the Americans rated the results only ‘fair’).

    The next day Bomber Command set off from the Pacific island of Tinian with the second nuclear weapon. Their principal target was Kokura, site of a large arsenal, less than 10-kilometres from Yahata (both cities are now incorporated into Kitakyushu). Official war histories state that when the B-29 carrying the A-bomb reached Kokura the weather had closed in, forcing the pilot to divert to his secondary target, Nagasaki. Visibility was bad there also until the clouds opened up just long enough for the bomb to be detonated, as it turned out, right above the main Christian neighbourhood in that port-city.

    But is it true that Kokura was spared, and Nagasaki laid waste, because of the vagaries of the weather? Ever since that day Satoru Miyashiro has believed otherwise. On the 9th, an hour before the A-bomb flight approached Kokura, the air raid sirens sounded again, sending Satoru and his colleagues running to light the coal-tar drums. Black smoke soon filled the sky and floated on the wind across to Kokura. The weather in the area that day, according to meteorological records, was fair­­––not cloudy as the history books say––although a mixture of smoke and mist hung in the air. Rainsqualls had doused the worst of the fires from the incendiary attack on Yahata the day before, and it was probably vapour plumes mixed with coal-tar smoke that blocked the nuclear flash––and sent it on to Nagasaki: the hand of man, rather than nature, determined events.

    ‘I’ve been hearing this story ever since I was a child,’ says Satoru’s daughter Yumiko. ‘But my father did not mention it to others because he felt a sense of guilt at having brought suffering to the people of Nagasaki.’ Now, as he approaches the end of his life, Satoru has finally gone public adding his recollections to the complex tangle of history.

    Was a teenage boy charged with lighting a line of coal-tar fires responsible for destroying Nagasaki? Of course not. The significance of Satoru’s story relates not so much to the past as to the present. Japanese are losing touch with the generation that experienced the war; they are vulnerable to the patriotic pitch of revisionists and others who wish to throw clouds of doubt over Japan’s war responsibility. Sometimes, however, one man’s conscience and sense of personal responsibility is able to throw new light on great events, and in that human affirmation we recognise a necessary truth.

    The original report about Satoru Miyashiro was published in the Mainichi newspaper. Walter Hamilton is the author of Children of the Occupation: Japan’s Untold Story.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

  • Noura Erakat. Five Israeli Talking Points on Gaza Debunked.

    Five Israeli talking points on Gaza debunked.  Why does the mainstream media keep repeating these false claims?

    Israel has killed almost 800 Palestinians in the past twenty-one days in the Gaza Strip alone; its onslaught continues. The UN estimates that more than 74 percent of those killed are civilians. That is to be expected in a population of 1.8 million where the number of Hamas members is approximately 15,000. Israel does not deny that it killed those Palestinians using modern aerial technology and precise weaponry courtesy of the world’s only superpower. In fact, it does not even deny that they are civilians.

    Israel’s propaganda machine, however, insists that these Palestinians wanted to die (“culture of martyrdom”), staged their own death (“telegenically dead”) or were the tragic victims of Hamas’s use of civilian infrastructure for military purposes (“human shielding”). In all instances, the military power is blaming the victims for their own deaths, accusing them of devaluing life and attributing this disregard to cultural bankruptcy. In effect, Israel—along with uncritical mainstream media that unquestionably accept this discourse—dehumanizes Palestinians, deprives them even of their victimhood and legitimizes egregious human rights and legal violations.

    This is not the first time. The gruesome images of decapitated children’s bodies and stolen innocence on Gaza’s shores are a dreadful repeat of Israel’s assault on Gaza in November 2012 and winter 2008–09. Not only are the military tactics the same but so too are the public relations efforts and the faulty legal arguments that underpin the attacks. Mainstream media news anchors are inexplicably accepting these arguments as fact.

    Below I address five of Israel’s recurring talking points. I hope this proves useful to newsmakers.

    1) Israel is exercising its right to self-defense.

    As the occupying power of the Gaza Strip, and the Palestinian Territories more broadly, Israel has an obligation and a duty to protect the civilians under its occupation. It governs by military and law enforcement authority to maintain order, protect itself and protect the civilian population under its occupation. It cannot simultaneously occupy the territory, thus usurping the self-governing powers that would otherwise belong to Palestinians, and declare war upon them. These contradictory policies (occupying a land and then declaring war on it) make the Palestinian population doubly vulnerable.

    The precarious and unstable conditions in the Gaza Strip from which Palestinians suffer are Israel’s responsibility. Israel argues that it can invoke the right to self-defense under international law as defined in Article 51 of the UN Charter. The International Court of Justice, however, rejected this faulty legal interpretation in its 2004 Advisory Opinion. The ICJ explained that an armed attack that would trigger Article 51 must be attributable to a sovereign state, but the armed attacks by Palestinians emerge from within Israel’s jurisdictional control. Israel does have the right to defend itself against rocket attacks, but it must do so in accordance with occupation law and not other laws of war. Occupation law ensures greater protection for the civilian population. The other laws of war balance military advantage and civilian suffering. The statement that “no country would tolerate rocket fire from a neighboring country” is therefore both a diversion and baseless.

    Israel denies Palestinians the right to govern and protect themselves, while simultaneously invoking the right to self-defense. This is a conundrum and a violation of international law, one that Israel deliberately created to evade accountability.

    2) Israel pulled out of Gaza in 2005.

    Israel argues that its occupation of the Gaza Strip ended with the unilateral withdrawal of its settler population in 2005. It then declared the Gaza Strip to be “hostile territory” and declared war against its population. Neither the argument nor the statement is tenable. Despite removing 8,000 settlers and the military infrastructure that protected their illegal presence, Israel maintained effective control of the Gaza Strip and thus remains the occupying power as defined by Article 47 of the Hague Regulations. To date, Israel maintains control of the territory’s air space, territorial waters, electromagnetic sphere, population registry and the movement of all goods and people.

    Israel argues that the withdrawal from Gaza demonstrates that ending the occupation will not bring peace. Some have gone so far as to say that Palestinians squandered their opportunity to build heaven in order to build a terrorist haven instead. These arguments aim to obfuscate Israel’s responsibilities in the Gaza Strip, as well as the West Bank. As Prime Minister Netanyahu once explained, Israel must ensure that it does not “get another Gaza in Judea and Samaria…. I think the Israeli people understand now what I always say: that there cannot be a situation, under any agreement, in which we relinquish security control of the territory west of the River Jordan.”

    Palestinians have yet to experience a day of self-governance. Israel immediately imposed a siege upon the Gaza Strip when Hamas won parliamentary elections in January 2006 and tightened it severely when Hamas routed Fatah in June 2007. The siege has created a “humanitarian catastrophe” in the Gaza Strip. Inhabitants will not be able to access clean water, electricity or tend to even the most urgent medical needs. The World Health Organization explains that the Gaza Strip will be unlivable by 2020. Not only did Israel not end its occupation, it has created a situation in which Palestinians cannot survive in the long-term.

    3) This Israeli operation, among others, was caused by rocket fire from Gaza.

    Israel claims that its current and past wars against the Palestinian population in Gaza have been in response to rocket fire. Empirical evidence from 2008, 2012 and 2014 refute that claim. First, according to Israel’s Ministry of Foreign Affairs, the greatest reduction of rocket fire came through diplomatic rather than military means. This chart demonstrates the correlation between Israel’s military attacks upon the Gaza Strip and Hamas militant activity. Hamas rocket fire increases in response to Israeli military attacks and decreases in direct correlation to them. Cease-fires have brought the greatest security to the region.

    During the four months of the Egyptian-negotiated cease-fire in 2008, Palestinian militants reduced the number of rockets to zero or single digits from the Gaza Strip. Despite this relative security and calm, Israel broke the cease-fire to begin the notorious aerial and ground offensive that killed 1,400 Palestinians in twenty-two days. In November 2012, Israel’s extrajudicial assassination of Ahmad Jabari, the chief of Hamas’s military wing in Gaza, while he was reviewing terms for a diplomatic solution, again broke the cease-fire that precipitated the eight-day aerial offensive that killed 132 Palestinians.

    Immediately preceding Israel’s most recent operation, Hamas rocket and mortar attacks did not threaten Israel. Israel deliberately provoked this war with Hamas. Without producing a shred of evidence, it accused the political faction of kidnapping and murdering three settlers near Hebron. Four weeks and almost 700 lives later, Israel has yet to produce any evidence demonstrating Hamas’s involvement. During ten days of Operation Brother’s Keeper in the West Bank, Israel arrested approximately 800 Palestinians without charge or trial, killed nine civilians and raided nearly 1,300 residential, commercial and public buildings. Its military operation targeted Hamas members released during the Gilad Shalit prisoner exchange in 2011. It’s these Israeli provocations that precipitated the Hamas rocket fire to which Israel claims left it with no choice but a gruesome military operation.

    4) Israel avoids civilian casualties, but Hamas aims to kill civilians.

    Hamas has crude weapons technology that lacks any targeting capability. As such, Hamas rocket attacks ipso facto violate the principle of distinction because all of its attacks are indiscriminate. This is not contested. Israel, however, would not be any more tolerant of Hamas if it strictly targeted military objects, as we have witnessed of late. Israel considers Hamas and any form of its resistance, armed or otherwise, to be illegitimate.

    In contrast, Israel has the eleventh most powerful military in the world, certainly the strongest by far in the Middle East, and is a nuclear power that has not ratified the non-proliferation agreement and has precise weapons technology. With the use of drones, F-16s and an arsenal of modern weapon technology, Israel has the ability to target single individuals and therefore to avoid civilian casualties. But rather than avoid them, Israel has repeatedly targeted civilians as part of its military operations.

    The Dahiya Doctrine is central to these operations and refers to Israel’s indiscriminate attacks on Lebanon in 2006. Maj. Gen. Gadi Eizenkot said that this would be applied elsewhere:

    What happened in the Dahiya quarter of Beirut in 2006 will happen in every village from which Israel is fired on. […] We will apply disproportionate force on it and cause great damage and destruction there. From our standpoint, these are not civilian villages, they are military bases.

    Israel has kept true to this promise. The 2009 UN Fact-Finding Mission to the Gaza Conflict, better known as the Goldstone Mission, concluded “from a review of the facts on the ground that it witnessed for itself that what was prescribed as the best strategy [Dahiya Doctrine] appears to have been precisely what was put into practice.”

    According to the National Lawyers Guild, Physicians for Human Rights-Israel, Human Rights Watch and Amnesty International, Israel directly targeted civilians or recklessly caused civilian deaths during Operation Cast Lead. Far from avoiding the deaths of civilians, Israel effectively considers them legitimate targets.

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    5) Hamas hides its weapons in homes, mosques and schools and uses human shields.

    This is arguably one of Israel’s most insidious claims, because it blames Palestinians for their own death and deprives them of even their victimhood. Israel made the same argument in its war against Lebanon in 2006 and in its war against Palestinians in 2008. Notwithstanding its military cartoon sketches, Israel has yet to prove that Hamas has used civilian infrastructure to store military weapons. The two cases where Hamas indeed stored weapons in UNRWA schools, the schools were empty. UNRWA discovered the rockets and publicly condemned the violation of its sanctity.

    International human rights organizations that have investigated these claims have determined that they are not true. It attributed the high death toll in Israel’s 2006 war on Lebanon to Israel’s indiscriminate attacks. Human Rights Watch notes:

    The evidence Human Rights Watch uncovered in its on-the-ground investigations refutes [Israel’s] argument…we found strong evidence that Hezbollah stored most of its rockets in bunkers and weapon storage facilities located in uninhabited fields and valleys, that in the vast majority of cases Hezbollah fighters left populated civilian areas as soon as the fighting started, and that Hezbollah fired the vast majority of its rockets from pre-prepared positions outside villages.

    In fact, only Israeli soldiers have systematically used Palestinians as human shields. Since Israel’s incursion into the West Bank in 2002, it has used Palestinians as human shields by tying young Palestinians onto the hoods of their cars or forcing them to go into a home where a potential militant may be hiding.

    Even assuming that Israel’s claims were plausible, humanitarian law obligates Israel to avoid civilian casualties that “would be excessive in relation to the concrete and direct military advantage anticipated.” A belligerent force must verify whether civilian or civilian infrastructure qualifies as a military objective. In the case of doubt, “whether an object which is normally dedicated to civilian purposes, such as a place of worship, a house or other dwelling or a school, is being used to make an effective contribution to military action, it shall be presumed not to be so used.”

    In the over thee weeks of its military operation, Israel has demolished 3,175 homes, at least a dozen with families inside; destroyed five hospitals and six clinics; partially damaged sixty-four mosques and two churches; partially to completely destroyed eight government ministries; injured 4,620; and killed over 700 Palestinians. At plain sight, these numbers indicate Israel’s egregious violations of humanitarian law, ones that amount to war crimes.

    Beyond the body count and reference to law, which is a product of power, the question to ask is, What is Israel’s end goal? What if Hamas and Islamic Jihad dug tunnels beneath the entirety of the Gaza Strip—they clearly did not, but let us assume they did for the sake of argument. According to Israel’s logic, all of Gaza’s 1.8 million Palestinians are therefore human shields for being born Palestinian in Gaza. The solution is to destroy the 360-kilometer square strip of land and to expect a watching world to accept this catastrophic loss as incidental. This is possible only by framing and accepting the dehumanization of Palestinian life. Despite the absurdity of this proposal, it is precisely what Israeli society is urging its military leadership to do. Israel cannot bomb Palestinians into submission, and it certainly cannot bomb them into peace.

    Noura Erakat, a human rights attorney and activist, is an Abraham L. Freedman Fellow at Temple University, Beasely School of Law, and a contributing editor of Jadaliyya. 

    This article was first published in Alternet.org on July 28,2014.

     

     

     

  • Wiryono Sastrohandoyo. The new Indonesian President Joko Widodo.

    ​Joko Widodo is an upright, decent and honourable person.

    It is the general feeling in Indonesia that his election is a victory for the Indonesian people and the generally peaceful election process. This is a sign of the growing maturity of Indonesia’s young democracy.
    Jokowi was great during his two terms as mayor of Solo, a small city of half a million people in central Java. He has been less impressive during his two years as Governor of Jakarta with a diverse population of more than ten million people. Now he has to deal with a larger and even more diverse population of 240 million.

    Indonesians are proud that their nation is the third largest democracy. But we also know that whilst our democracy is maturing , the democratisation process must continue. It will not be easy. But since the first elections in 1999 in the post-Suharto period, Indonesians have been able to have free and fair elections. So I am hopeful.

    Probowo’s rejection and withdrawal from the electoral process reflects the inability of his party’s elites and himself to see the reality of his loss. What we need is reconciliation with his supporters who won 47% of the popular vote. They are a significant part of the Indonesian population and must be heard.
    ,
    But Jokowi’s electoral victory was achieved in a very close race. If the president was elected by parliament, the Prabowo-Rajasa team would have beaten Jokowi-Kalla easily. Jokowi-JK is supported by a coalition of parties controlling only 37% of the seats in Parliament while Prabowo-Hatta is supported by a coalition controlling 52.1% of the seats.

    But the president is directly elected and a majority of parliamentary seats does not mean victory. The new president’s first problem, if he is to govern effectively, is how to swing enough of the Prabowo’s coalition parties’ MPs to his side. At this time it is not clear how he is going to do it. But it is not impossible. Party discipline is weak and some politicians have indicated the willingness to swing. Usually – politics being what it is – at a price.

    A problem is how independent is Jokowi going to be? During the campaign Party Chairwoman Megawati Sukarnoputri stressed that Jokowi is mandated by the party and that he is to implement party policy. This involves reviving what is known as Trisaki, that Indonesia is sovereign in the field of politics, self-sufficient in economic affairs and with its own distinctive cultural identity. Fortunately this was not  so strongly emphasized later in the campaign but the relationship between President Jokowi and the Party leadership will have to be worked out. Time will tell. Coalition building is not only done for the purpose of implementing desired policy goals but also as rewards.
    .
    During the campaign, Jokowi indicated that he wanted a cabinet of professionals. This will be a good indicator of his intentions and priorities.

    Jokowi sees foreign policy as a tool for obtaining benefits for the sake of domestic economic and political growth. He said that Indonesian ambassadors should be the salesmen of Indonesia. In other words: promoting business. And in business relations, business usually takes a longer term and more consistent view. It is in other areas of relations that we usually have worrying problems.

    On the South China Sea issue Jokowi’s statements suggest that he does not see Indonesia in dispute with China. Indonesia will seek to play a constructive role for we need both China and the West in the Pacific. We need to ensure that the rising power of China and the pivoting US do not end in conflict.

    Relations with Australia will continue to be over shadowed by other more important issues. This is particularly so because Jokowi sees that foreign investment should serve domestic economic growth. His focus of attention in this will mainly be people at the bottom, those who are surviving on one dollar a day. Their living standard has to be improved and fast. During his youth he was one of them. But he is also an experienced businessman who knows that Indonesia needs foreign investment. His view on Australia is still to be developed but  he is not confrontational by nature although not unwlling to be tough. In the past there has been too many breakdowns of dialogue. Australians tend to hold dialogue on a head-to-head basis. The Indonesian way is to hold a dialogue on a heart-to-heart basis. The challenge is for both countries to have more cross cultural communication. Australia and Indonesia need to know how to communicate better.

    Wiryono Sastrohandoyo was Indonesian Ambassador to Australia from 1996 to 1999.
    This article is in response to questions I asked.   John Menadue

     

     

  • Ben Saul. The Occupation of Palestine.

    There is very partisan criticism of Hamas for firing home-made rockets into Israel. But the core problem is not rockets. It is the occupation of Palestine by Israel and the imprisonment of two million Palestinians in a sliver of land called ‘Gaza’.

    I often think how we should or could respond if our country was occupied by a foreign power. Surely there would be resistance to that occupation. That is fundamentally what the dispute between Israel and the Palestinians is about.

    In a speech given at Parliament House, Canberra, on July 16, Professor Ben Saul, says

    ‘The root cause of the Israel-Palestine conflict is the near fifty year occupation of Palestinian territory by Israel and the illegal colonisation of Palestinian land. Violence to liberate Palestine is inevitable unless Israel withdraws and complies with international law. Australian governments have failed to understand that there will never be peace unless there is justice.’

    A link to Professor Ben Saul’s speech is below.  He is the Professor of International Law at the University of Sydney.  John Menadue

  • Michael Kelly SJ. Today’s Totalitarianism’s Powerful Forms.

    Australian eyes are focused on the unspeakable brutality and pointlessness of the downing of MH 17. But alongside this event, Australian minds and hearts are assailed daily by barbarism across the Middle East and in different parts of Asia.

    It’s the paradox of liberalism that pluralistic secular democracies like Australia afford citizens far greater freedoms than some of its citizens would be ready to concede if they were in charge. Australian authorities readily approve the right of Muslims to build mosques, get government subsidies for their schools and dress as they wish.

    Not so for Christians in parts of the Middle East like Saudi Arabia and Iran where churches are outlawed and Christians are persecuted, even condemned to death if they convert from Islam. In States where the mullahs govern and Sharia Law prevails, there is no margin for the concessions freely granted in secular, pluralistic democracies.

    Some Western societies that have received Muslims as workers or refugees have Islamic citizens who would welcome the day that Sharia Law trumps the hard won victory of the independence of the judiciary, the rule of law and the weighty tradition of the West’s secular processes.

    The flash point that shows all the signs of the new totalitarianism is the collapse underway in Iraq. According to the UNHCR, the greatest dislocation is occurring in Iraq where Sunni forces operating for the Islamic State of Iraq and Syria (ISIS) are cutting a swathe through northern Iraq, adding to the 1.2 million internally displaced people there on a daily basis, including half a million displaced coming from one Province alone since January.

    ISIS forces are targeting Christians in particular, fleeing parts of the Kurdistan region of Iraq ending up staying outside UNHCR camps with “host families” and general facilities like schools and municipal buildings. Churches and monasteries are bombed by the Sunni insurgents of ISIS, along with religious shrines of their Muslim opponents, the Shia.

    These are expulsions from cities and monasteries where Christians have lived in parts of Syria and Iraq sometimes for over one and a half millennia (See:http://www.ucanews.com/news/iraq-jihadists-pursue-christians-who-fled-from-mosul/71501).

    What are we to make of this mayhem? Reactions in the West vary from the impotent outrage  of those looking at the mess to the nonchalance of secularists who just murmur, “I told you so. Religion brings nothing but trouble”.

    But these reactions – including such ones in Australia – need to keep in mind that for many hundreds of years, Europeans have indulged in just such exercises in intolerance and brutality, costing countless millions of lives. The mere mention of the wars of religion (16th to 17th Centuries) that followed the Protestant Reformation, and proved to be the most costly in history for the human lives it claimed relative to the population of Europe at the time, should give anyone from the West pause before denigrating Muslims.

    The whole sorry history of the two World Wars of the 20th Century is testimony to how little we humans learn from our experience. And this apparently never ending catastrophe begs the question of how we humans can live together peacefully, tolerating our differences and each other’s peculiarities?

    While the West has little to boast about in its record, there is something that Europe, the US, Australia and all those countries in the world that can be described accurately as secular states have in common. And the course of its development is the subject of one of the most significant books of the last decade – A Secular Age by the Canadian philosopher, Charles Taylor. (See: http://en.wikipedia.org/wiki/A_Secular_Age)

    A monumental work of almost 800 pages, Taylor’s thesis is rather simple: where the marriage of Altar and Throne kept Western society relatively well regulated during the reign of Christendom, the Protestant Reformation broke the political consensus and the controlling devices holding Europe together; it broke up and Europeans behaved badly; slowly but surely they came to recognize that civilized life meant self-control, the rule of law and the resolution of disputes in a rational way was the only way for humanity to thrive.

    As Europe unravelled, the Church lost its role as the moral regulator, kings and queens lost their all-controlling rule by divine right, the voice of democratic change became heard through Parliaments and Assemblies and the function of an independent judiciary was progressively defined.

    Islam had its reformation very soon after The Prophet’s death when the basic division between Shias and Sunnis occurred. But there has never been any equivalent of the Enlightenment, the French Revolution or the US Declaration of Independence that all shaped what rationally operating Western political states inherited.

    What there has been over the last century is the growing oil wealth of many Islamic states able to finance the opportunism of fanatics along with poor diplomacy by Western States right from the start in the way the Middle East was divided up and then dealt with.

    Many will be the calls for external intervention to bring hordes of marauding militias to heel. Many will be the expressions of despair over the international community’s impotence before this and other offences to our shared humanity and sense of what civilized humanity requires.

    Europe and the US became civilized, started to develop and respect the rule of law and saw better ways of resolving disputes than killing opponents the hard way. Let’s hope that Islam can learn the same lesson fast, separate religion and law, learn how intellectually unsustainable and practically destructive it is to read a literal truth into a fifteen hundred year old document (the Holy Qur’an) and join the post-modern world.

    If the Islamic world can learn the lesson, the world will be a better place.

     

  • Another Israeli massacre of Palestinians.

    One thousand and thirty-five Palestinians in Gaza, mainly innocent civilians, women and children have been massacred and so far the world turns its head away. And the number is increasing by the hour. We don’t want to feel the suffering of the Palestinian people.

    Alongside this 1,035 dead Palestinians there are 42 Israeli’s who have died. Just imagine what the Israeli lobby would be saying if 1,035 Israelis had died.

    We are angry and concerned that 297 innocent people lost their lives when MH17 was shot down by separatists in the Ukraine. These separatists were obviously funded and armed by Russia. That is of concern to us. But the US supports, funds and arms the Israeli army which is now conducting this massacre in Gaza. When will we get the balance right.  But it is not only the US government and the Israeli lobby that must be held accountable for what is happening today in Gaza. The Australian government has consistently sided with Israel against the Palestinians and even wants to deny the term ‘occupied’ which is a way any reasonable person would describe what Israel is doing on Palestinian land. The Israelis are occupying Palestinian land and imprisoning Palestinian people.

    There has been a pattern of Israeli massacres and the Gaza massacre is one of many. Just think of the massacres in  Sabra and Shatila in Lebanon in 1982.

    Israel is naturally concerned about home-made rockets being fired out of Gaza into Israel but the response is out of all proportion. What is more, the core reason for the dispute is not these rockets, it is occupation by Israel of Palestinian land. That occupation and colonisation must be ended if there is to be a just peace.

    See below an article this weekend by Robert Fisk for The Independent. It is headed ‘Eight hundred dead Palestinians. But Israel has impunity.’  John Menadue

    ​

    http://www.independent.co.uk/voices/comment/eight-hundred-dead-palestinians-but-israel-has-impunity-9629726.html

  • John Menadue–President Jokowi and Australia

    The election of Joko Widodo as Indonesia’s seventh president is a victory for burgeoning democracy in our neighbour with 240 million people. It was a victory for civil participation by ordinary people to defeat Prabowo Subianto by a margin of 53% to 47%, by 8 million votes and winning in two thirds of Indonesia’s provinces.

    Prabowo had a very dubious performance on human rights when he was in the military. But like so many people from” born to rule” elites he now refuses to accept the result. What would the lower orders know about the need for strong leadership from his business and military friends?  It is similar to the way Tony Abbott behaved after the 2010 election. Denied the prime ministership by a vote of the House of Representatives he set about with Christopher Pyne to wreck the place.

    Jokowi will not have a majority in the Parliament. He will need to be a good negotiator

    All being well and despite Prabowo, Jokowi will be sworn as president on October 20. President Yudhoyono is likely to smooth any troubled waters in the meantime.

    What could it mean for Australia?

    In the short term I would think not much. Jokowi will be preoccupied with domestic issues that he campaigned on. He has promised two presidential regulations on corruption and expediting business permit licencing. It is also expected that he will release a third regulation that he promised on religious discrimination directed against religious radicals.

    Outgoing President Yudhoyono was well disposed towards Australia and we often tried his patience! President Jokowi does not have the same disposition. We should not take him for granted. He will approach foreign policy issues very cautiously in the early days. He will be guided by professional advisers. Who he appoints to his cabinet will be very important and a good indicator of his priorities.

    Jokowi will not have the same sensitivity as President Yudhoyono has on spying issues which offended Yudhoyono greatly. Our spying agencies are often a menace.

    For Jokowi, boats will simply not be a priority. Given Indonesia’s other problems boats will remain a third rate issue. An important issue however for the Jokowi administration is how it regards the stategic question of the South China Sea. That might begin to emerge in six months or so. All in all I don’t think we will see much departure from existing  foreign policies.

    Attitudes to foreign investment  howeverwill be coloured by economic nationalism which remains a major political issue for all Indonesian political parties.

    In all of this it should not be assumed that Australia will get any preferred treatment. We don’t deserve it and we won’t get it.

    One issue which could shore up the relationship would be a much more robust business relationship, even given Indonesian reservations about foreign investment. Our investment in Indonesia is 0.5% of our total investment abroad. Yet investment into Indonesia from Singapore and Japan pours in. Indonesia is growing rapidly at twice our rate. It is a member of the G20. But our trade with Indonesia as a trading partner ranks number 12.

    Business and economic ties could be the ballast in a relationship which has been difficult from time to time. A business underpinning of our relationship with Indonesia would be a great stabiliser.

    Our relationship with Japan was underpinned by business relationships. Leaders on both sides helped us through difficult times particularly after WW2.

    Enhanced business cooperation between Indonesia and Australia would be a great help in the years ahead. Politics and governments change but business interests usually goes on and on.

  • Tony Smith. Dubious celebrations of war.

    On 28 July 1914, the world was thrown into a terrible conflict. On that day, a Serbian nationalist assassinated an Austrian archduke and his wife. Because European states belonged to alliances which were heavily armed and many countries on other continents belonged to their empires, the war spread until it had consumed over a million lives. Between 2014 and 2018 those terrible events will be remembered in various ways. Some of those commemorations might be regarded as neutral, but inevitably, many will be matters of controversy. While Australia’s events will start in earnest around the centenary of the Gallipoli landing next year on 25 April, the screening of a television series on Anzac nurses suggests that one theme will be the evocation of sentimental responses in admiration of those who enlisted.

    The Anzac legend has been exploited cynically by politicians over the last 100 years. In all conflicts, there is a distinct pattern that most of the population opposes Australia entering a war until such time as troops are committed. Then people understandably feel an obligation to support the ‘diggers’ as they engage in their dangerous tasks. There is a desire to get the fighting over with and then return to normal politics.

    This leaves opponents of war in a difficult situation. During times of conflict, the expression of any doubts about the wisdom or correctness of engaging in military action is construed as disloyalty to the troops and to the country. At other times, however, the issues do not have the urgency to grip the popular imagination and so opportunities to discuss matters of war and peace are limited. It is understandable that people do not want to be forced to discuss such matters when they are enjoying peace. They want to get on with the ordinary everyday things that help them to develop their lives – work, play and building relationships.

    Over the next five years the nature of the commemorations could mimic either war or peace. It is important to discuss the issues critically. As the shooting down of a Malaysian airliner over Ukraine shows, the world is over armed today, and the situation is more serious than it was in 1914. Alliances still cause blind responses to crises. Russia has been reluctant to condemn the Ukrainian separatists and the USA has been weak in its response to Israel’s military actions in Gaza. The international agencies which could assist to ameliorate the problems are weakened by states which refuse to compromise on matters of national sovereignty. The archduke’s assassination may have been the spark which ignited a conflagration in 1914, but the background conditions of war are just as dangerous in 2014. This suggests that merely contemplating earlier tragedies has not enabled the world to progress in its thinking over the last century.

    An alternative explanation for the failure to learn from the 1914-18 war is that discussion has been stifled by cynical forces. Patriots have been reluctant to allow a focus on the folly, waste and evils of war because they are afraid that our veterans might be dishonoured. They fear also that if killing in war is condemned as evil, then the stories of Australia’s wars might be revised. By most popular interpretations, Australia has prevailed in its wars because its cause has always been just and its engagement reluctant. The controversy over the Vietnam conflict shows that veterans can indeed be hurt when the political motivation behind a commitment is questioned. We do however have a duty not to despatch the military for dubious reasons such as the call by a powerful ally.

    Recently deceased Tasmanian Governor Peter Underwood caused some controversy in an Anzac Day address this year when he questioned the importance of studying Simpson’s donkey rather than scrutinising the reasons for Australia’s lengthy involvements in Iraq and Afghanistan. During the election campaign, the Coalition suggested that Gallipoli was not studied enough in schools and critics immediately argued the desire to include more about the Anzac legend in education programs was a part of the broader ‘history wars’. Formerly this cultural controversy has focussed in on the treatment of Australia’s Indigenous peoples. Despite some positive statements about Indigenous policy, the Prime Minister recently attracted the criticism of Labor’s first female Indigenous parliamentarian when he suggested that Australia was undeveloped until the British arrived in 1788.

    Over the next five years, all thinking Australians should regard it as their duty to look critically at First World War commemorations. They should be very sceptical about any events which could make it easier for a future Australian Government to commit the military to conflicts overseas. In particular, they should scrutinise the statements of current politicians who, unfortunately, are likely to cynically exploit every occasion to enhance their popularity.

    Tony Smith is a former academic and regular contributor to Eureka Street , The Australian Review of Public Affairs and the Australian Quarterly

     

     

     

  • John Menadue–King Coal to be dethroned.

    On May 1 last year I posted “A canary in the coal mine”. It focussed on the growing and wide concern about the damage to the climate caused by coal fired electricity generation. It also drew attention to the action of Jonathon Moylan who sent a hoax email concerning Whitehaven Coal to the ANZ Bank about the risk of investing in coal. The worthy and powerful tut tutted his action but I likened it to the canary in the coal mine warning of danger ahead.

    In the Supreme Court a few days ago. Jonathon Moylan pleaded guilty but it seems unlikely that he will receive a custodial sentence. Good luck to him for acting out his concerns about our planet, the dangers of coal and that the banks should be careful in funding more coal projects

    Only a few days earlier in Texas, Tony Abbott our apparent self-styled “ambassador for coal” said “for many decades at least, coal will continue to fuel human progress as an affordable energy source for wealthy and developed countries alike”

    But the evidence is pointing in the other direction. At the recent midyear climate negotiations in Bonn, an unprecedented 60 countries including Germany called for a total phase out of fossil fuels by 2050 as part of a global agreement on climate change to be concluded in Paris in 2015. If the Paris conference next year is successful the future of coal will be even more bleak than it is now, particularly for steaming coal

    The future of coking coal produced for steel making will be more secure, but not steaming coal. About 13 % of global coal is mined for coking and steel making. Coking coal is about 40% of our total coal exports. The remainder is steaming coal.

    On a global basis 41 % of 0f the world’s electricity is generated by highly polluting steaming coal.

    The International Energy Agency has advised that even if we aim to limit the world temperature rise to only 2 degrees – it could be more in practice – we would have to achieve a reduction of 50 % in the share of global energy from coal by 2035.

    Coal may seem a cheap fuel now but it does not carry the cost of the ‘externalities’ it incurs, the damage it does to our environment and health. That is why proper pricing of coal is essential. As the real cost of steaming coal increases the cost of renewables is moving strongly downwards.

    The signs are everywhere that steaming coal pollution must be reduced in favour of less polluting alternatives. Why in the world would Joe Hockey tell us that the wind farms around Canberra are ‘utterly offensive…I think they are blight on the landscape’? Does he prefer dirty and polluting smoke stacks?

    President Obama has taken executive action to mandate a 30 % reduction in carbon emissions from fossil burning power plants by 2030. As Japan restarts its nuclear power plants it will buy less Australian coal. China is committed to reducing power generation from coal. It is a national imperative. European consumption of coal continues to fall with new air pollution requirements from 2016.

    There are reports that Deutsche Bank, HSBC, Credit Agricole and the Bank of Scotland have withdrawn their support for the Abbott Point Coal loader in Queensland. The Bendigo and Adelaide Bank have said that they would not fund coal projects.

    We are also hearing of new coal projects being deferred and many existing mines losing money. Some of this may be short term but the longer term prospects for steaming coal are bleak. In May the Queensland Resources Council said that 10% of coal mines are “in a very precarious state”

    Or as John Hewson has put it “The days of fossil fuels being burnt unabated are over. Investing in these projects is a losing bet” (AFR 11 June 2014)

    More and more pain is coming for steaming coal.

    Minister Greg Hunt told us a few days ago that clean coal is just around the corner with new technology. But we have been hearing that for over 20 years. It is politics designed to try and prop up a declining industry and shows the risk of Direct Action in handing out money to industrial friends and political supporters.

    Tony Abbott says that action on carbon must not be allowed that damages our economy.  He thinks that the planet and our economy are separate.  Just as there will be no jobs in the Murray Darling Basin if we pollute the river so our economy and jobs will be at risk if we do not safeguard our climate and planet. If our planet is severely damaged, as is in prospect, so will our economy and lot more as well.

    Interestingly the Mining Division of the CFMEU whose members jobs at risk is far more constructive about addressing climate than Tony Abbott. The union has consistently supported a price on carbon with appropriate safeguards and compensation.

    We need to stop shoring up industries that are carbon polluting. As Ian McAuley has put it capitalism thrives on change and the opportunity for countries like Australia to modernise the energy sector can be a major driver of change. There are jobs in de commissoning coal fired plants, in building solar and wind plants and the accompanying infrastructure in energy research and development and in making domestic buildings and industrial plants energy efficient. If this isn’t economic activity, what is?

    King coal is not the energy source of the future regardless of what Tony Abbott says. The canary in the coal mine is screeching louder and louder and we had better take notice.

  • Richard Rigby. Tiananmen 25 years on.

    On the night of June 3-4, units of the Peoples Liberation Army entered Beijing, killing some hundreds of ordinary Beijing citizens as they made their way to their objective, Tiananmen Square, the focal point of massive protests that had begun in late April following the death of former Party Secretary Hu Yaobang. The square was cleared of protestors. Further killings and arrests ensued over following days. A small number of soldiers were also killed. Protests in scores of other Chinese cities were simultaneously brought to an end, with varying degrees of violence. Significant protests in Shanghai were settled largely peacefully. Beijing was the worst. This much is known; although a final, credible death toll has not been published to this day.

    After the event Deng Xiaoping famously said ‘this storm was bound to happen’. Not necessarily. The country wide protests, against corruption, against rising prices, against an array of contradictions between what opening and reform seemed to promise and the realities of daily life, and yes, in the case of some, demands for greater freedom and democracy – these were almost certainly inevitable; but the bloody denouement in the nation’s capital was not. The crucial element here was a serious power struggle at the centre of China’s leadership, a struggle that was both exacerbated by, and in which the contending parties sought to use, the popular protests.

    There were of course other, contingent, elements as well: the sensitive 70th anniversary of the May 4th Movement, the meeting of the Asian Development Bank, and, in particular, the historic visit of Mikhail Gorbachev, which made Beijing the focus of global media attention, quite apart from the events in the square – which also led to the humiliation for the government of having to cancel the official welcome at that site; and there were divisions amongst the student leaders and their supporters too, between those favouring a degree of accommodation with the authorities, with others more intransigent. But in the end it was the hard-liners in the government who won the power struggle, and who, backed by Deng Xiaoping, must take responsibility for the tragic way in which the protests were suppressed.

    It was this same Deng, though, who also ensured that, against the clear inclinations of a number of those on the winning side, this did not mean turning back from the policies of opening and reform that he had himself initiated at the Third Plenum of the Eleventh Central Committee in late 1978. He understood, even if not all his colleagues did, that his own dictum that stability takes precedence over all else demanded that those processes, and the resultant economic growth, be pushed forward. The domestic and international shocks resulting from the events of June 1989 notwithstanding, his Southern Tour of 1992 unleashed the second wave of the process of opening and reform that has resulted in the China we see today, with unprecedented levels of prosperity, openness to the world, international standing and influence.

    For one who lived through and closely followed the events of 1989 in Beijing, it is at times hard to realise that a quarter of a century has now past, and that vast numbers of adult Chinese today were only children, or not even born, when those events took place. June 4 means little or nothing to many of them. At the same time, China, and Beijing, have changed beyond recognition, and in terms of people’s lives, in many ways for the better. Millions of Chinese travel overseas on holidays every year, and when the holidays are over, they return home with no greater reluctance than tourists of any other country. Their lives are not bad. They take pride in China’s global standing. For many Chinese, particularly intellectuals and students, the 1980s were a period of unalloyed admiration for the West, but this has been tempered not only by patriotic education and warnings of the dangers of peaceful evolution, but much more effectively by Western failures in Iraq and Afghanistan, the Asian Financial Crisis, the Global Financial Crisis, the negative examples and unmet policy challenges of the Arab Spring, Israel/Palestine, the Ukraine…the list goes on.

    Of course China has huge problems and challenges of its own, some of which, such as pollution, result from its own successes, while others are more traditional, such as the corruption which now greatly exceeds that which was such an issue in 1989. But while ‘mass incidents’ resulting from particularly egregious and localised causes continue to take place across the country, the idea that the central leadership is vulnerable to challenge by mass protests in the heart of the nation seems inherently implausible. This is not what people want, and even if it were, the range of coercive means – lethal, and significantly, non-lethal –  at the disposal of the authorities gives them a far greater degree of flexibility and effectiveness than was the case 25 years ago.

    And yet, those same authorities are worried. They have not forgotten what happened. Some of them are the direct or indirect beneficiaries of the power struggle that Zhao Ziyang lost and Li Peng won, resulting in the subsequent promotion of Jiang Zemin, still exercising at least some influence despite his advanced age. (It is perhaps noteworthy, though, that Xi Jinping’s father Xi Zhongxun honourably but fruitlessly opposed the decision to use the PLA.) Neither have millions of Beijing citizens who themselves lived through the events forgotten, whatever roles they played or didn’t play, and whatever they thought then or think now. Neither have the parents, siblings, relatives, teachers, friends, of those who died, and the greater numbers injured or imprisoned or exiled.

    June 4, like it or not, is another of those dates, like March 18, May 4, May 30, September 18, and more, that have entered Chinese history, and as such demand an explanation. From time to time an official Chinese spokesperson says, usually responding to a journalist, that this issue has been settled years ago. It hasn’t. Were this the case, the date would not be as sensitive as it is. Every year in late May numbers of people associated with the events of 1989 are encouraged in one way or another to keep quiet, take a holiday, or something less pleasant. This year, a significant anniversary, has already seen a number of arrests, but also newer forms of activism, including a privately sponsored seminar and a series of messages on Weibo, China’s Twitter. The truth is, the issue is not going to go away, and the truth is…the truth. About what happened, and why.

    One may fully understand the desire of the Chinese authorities, faced as they are with massive challenges, to avoid rancorous disputes and whatever runs the risk of undermining China’s hard-won stability and prosperity. One should wish them every success in their efforts to achieve their stated goals for the the ‘two centenaries’ (of the Party and of the PRC), including moderate prosperity for all (2021) and democracy (2049). But sooner or later it should become clear that a truthful accounting should help, not hinder, the realisation of a China that is the stronger for the acknowledgment of its tragedies as well as its stunning achievements.

    Some years ago, invited by two graduate students of my acquaintance from the PRC, I visited the February 28 Memorial Museum in Taipei. I had wondered whether they wished to remind me of the sins of the KMT, but this was not their point. As we walked out, one of them said to me, ‘we wanted you to see this – the day we can take you to the June 4 Memorial Museum in Beijing, we’ll know our beloved Motherland has come of age.’*

     

    Richard Rigby was an Australian diplomat with postings in Tokyo, Beijing (twice), Shanghai (Consul General), London and Israel (Ambassador). He was also Assistant Director General of ONA. 

    May 18 Beijing

    *The February 28 incident occurred in 1947. Martial Law was lifted by President Chiang Ching-Kuo in 1987. The Executive Yuan promulgated a Research Report into the Incident in 1992. In 1995 President and KMT Chairman Lee Teng-Hui issued a formal apology and declared February 28 as an official day of commemoration for the victims. It took a long time.

     

  • John Menadue–A lot of nonsense about productivity.

    A lot of nonsense about productivity

    For years the Business Council of Australia and News Corp have been warning us about our poor productivity record and the need to change our industrial relations laws to bring trade unions to heel.  A part of this campaign against unions is now being played out in the Royal Commission into Trade Union Governance and Corruption. The partisan nature of this action is obvious when we see that the government has refused a Royal Commission on governance and corruption by the Commonwealth Bank of Australia and other banks in the treatment of thousands of investors in superannuation. But the unions are easy game for a vindictive government.

    It is not that productivity is not important, as the BCA reminds us. It is important, but we have been doing much better than the BCA is prepared to admit. We are also doing much better in labour flexibility than the BCA is prepared to admit. But invariably business interests take the political path of urging changes to industrial relations legislation rather than focussing on improved relations in the work place. That is where real labour productivity is and must be achieved…in the workplace and by members of the BCA.

    In his speech in Hobart to the Econometrics Society on 3 July this year, the Governor of the Reserve Bank of Australia, Glen Stevens, pointed out that the value of output produced per hour of labour time, increased at an annual rate of 2% in the three years to June 2013. They were the three years of the Rudd/Gillard governments. Stevens commented ‘[This] better trend for [labour] productivity, if we can sustain it, and especially if it can be further improved, would be a reliable base for optimism about the longer-run prospects for the economy and our living standards’.

    There has been no productivity crisis despite what the BCA and News Corp have been telling us month after month.

    The BCA and other large employers were also telling us that the labour market under Fair Work Commission was too rigid and that employees should be much freer to change jobs and move into areas of high demand like mining. But again the facts pull the rug out from under this specious argument.

    In the same week that Glen Stevens was speaking in Hobart, Dr David Gruen of Treasury spoke of a survey of nominal wages over the decade to March 2014. Wages in mining rose 9.7% more than the aggregate increase. Wages in construction rose by 5.4% more than the aggregate. And wages in the professional, scientific and technical sectors rose by 2.5% more than the aggregate. By contrast, wages in the manufacturing sector rose by 0.9% less than aggregate wages. In retail the increase was 4.3% less than the aggregate and in the food sector 7.6% less.

    As Ross Gittins in the SMH has pointed out ‘We now have a genuinely decentralised and more flexible wage fixing system, delivering wage growth in particular industries more appropriate to their circumstances’.

    The clear facts are that productivity and wage flexibility have been improving. Unfortunately much of the rhetoric about industrial relations legislative reform distracts from the need for both employers and employees to concentrate on the work area, in the work place where productivity and wage flexibility is best achieved. The outcomes we seek will not be obtained in ideological campaigns about industrial relations law like the Fair Work Act. Competent and engaged employers know that. But the shrill spokespeople for the BCA and News Corp don’t want to listen. They want to blame others.

  • Michael Keating. An alternative budget strategy – part 3

    Part 3. An Alternative Budget Strategy 

    The previous comment in this series showed that there are alternatives to the Government’s particular strategy for restoring a Budget surplus over the next four years. In particular, it was shown that action to protect the revenue could raise around $42 billion in 2017-18. That is about 2¼ per cent of 2017-18 GDP and meets the Government’s Budget targets. Furthermore this objective is achieved without relying on bracket creep that would move a full-time male worker on average earnings into the 37 per cent tax bracket from 2015-16.

    However, it was also recognised in the first part of this series, that Australia faces a continuing budget problem of matching expenditure and revenue over the longer term. On the basis of Treasury projections in its last Intergenerational Report (2010), it is estimated that resolution of this problem will require further budget tightening in some form or other roughly equivalent to another 2¼ per cent of GDP between 2017-18 and 2049-50. The aim of this third comment is therefore to briefly discuss some of the alternatives which might need to be considered in the future. It is further suggested that these alternatives will essentially involve improving expenditure program effectiveness so that more is achieved with less, or if then necessary, increasing existing taxes.

    Improving expenditure effectiveness

    The projected increase in public expenditure relative to GDP over the next 30 years or so mostly reflects increasing health expenditures, much of it associated with an aging population, and similarly increases in age related pensions and aged care. Indeed expenditures on these three areas were projected by Treasury to increase by 5 per cent of GDP between 2010 and 2050 if then present policies were continued, and so far that is pretty much the case.

    The introduction of superannuation was intended to limit future demands for the age pension, and some further tightening up of superannuation to further limit dissipation of superannuation entitlements would help further reduce expenditure on age pensions. But the big demands for additional expenditure are concentrated in health, and that is where there are the greatest opportunities for future expenditure restraint by improving the cost effectiveness of care.  Already the introduction of activity based funding by the Rudd Government provides the opportunity to move to funding on the basis of cost effectiveness, noting that very substantial differences in costs have been sustained over long times for what are the same procedures. In addition, there are other ways of funding health care, particularly for those suffering chronic conditions, that would improve the incentives for cost effective care, compared to the incentives towards over-servicing with fee for service arrangements.

    Schools represent another major area whose demands for funding might be reconsidered. Real public funding per student in primary government schools increased by 31 per cent between 1999 and 2011, while there was a 20 per cent increase for government high schools. There is no evidence that this increase in funding (and the further increase since 2011) has led to improved student results. Instead the key equity objectives of the Gonski reforms should be capable of being realised by redeployment of funding within the education system. In short, instead of promising that no school should ever lose through funding changes, we need to accept that genuine reform has to involve some of the funding to the schools that are most generously funded relative to need should be transferred to other more needy schools. Not to do so is the worst possible example of ‘middle-class welfare’.

    The final major area of expenditure that stands out as a source of potential waste is the sacred cow of infrastructure. Australia has a history of over-investing in public infrastructure in the sense that proposals have been poorly evaluated, or not at all, and the returns (including the non-financial returns) have been totally inadequate relative to the costs. Indeed, as Bert Kelly, the former ‘modest member of Parliament’ remarked many years ago, he knew an election was coming on whenever he heard an announcement for a new dam.

    In the last ten years expenditure on infrastructure by Australian governments has grown at twice the rate of GDP, and in the present Commonwealth Budget the Abbott Government’s extra spending on infrastructure reduced the total medium term expenditure savings achieved by about one third. Now this might be a good outcome if that additional infrastructure spending were warranted, but in fact a number of the infrastructure proposals that have been approved for funding in this Budget have not completed a proper cost-benefit evaluation.

    Increasing taxes

    The balance between expenditure restraint and increasing taxation is of course a matter of political values and an area for some discretion.  If in the event, a decision is reached that expenditure restraint should not be solely relied upon to achieve fiscal sustainability there are really only three substantial taxes capable of raising the amounts of additional funding that might then be needed in the longer term out to 2049-50:

    • GST
    • Company tax, and
    • Personal income tax

    As has been widely remarked the Abbott Government’s Budget does seem to envisage allowing the States to demand an increase in the GST if they consider that they cannot restrain their health and education expenditures sufficiently. So an increase in GST revenue seems quite possible sometime in the future, either through base broadening to include at least food, or through an increase in the rate or both. That may represent a reasonable solution, although the way in which it is implemented might have been better if there were a proper conversation in COAG (and more widely) about how best to proceed and the possible alternatives.

    The common view is that company tax should be reduced rather than increased. The argument relies heavily on the view that capital is highly mobile, and so competitively we need to match the company tax rates of other countries or we will lose investment. This view however deserves a little more scrutiny. First it takes no account of the fact that Australia is unique in allowing dividend imputation. That means that Australian investors have much less incentive to invest overseas than their equivalents in other countries. Second, it is arguable whether we need lower company tax rates to attract overseas investors. In most instances the rates of returns here are high enough after allowing for risk. Indeed right now the Reserve Bank is on record as considering the present exchange rate to be too high, and the most obvious reason is the attractiveness of Australia to foreign capital. So while an increase in company tax may not be likely, there is a good case, especially given the long term fiscal outlook, for resisting any decrease in company tax.

    Finally, it may be that an increase in personal income tax will (eventually) be considered to be at least part of the optimal approach to sustaining a balanced Budget in the longer-run, if we want to maintain our traditional social values and the services that we expect from government. In that case it is suggested that an increase in income tax should be achieved by an increase in the tax rates, rather than by stealth through bracket creep leading to effectively lower tax thresholds.

    There is nothing sacrosanct about the present income tax rates. First, the top rate has been as high as 60 per cent in the past, compared with a current 48.5 per cent rate[1], and no great change in any behaviour was observed when that 60 per cent was lowered. Second, other countries operate successfully with markedly higher personal tax rates than we have in Australia. Third, we are already raising income tax rates, but failing to recognise it, as the adjustments are described as temporary (the deficit levy) or hypothecated (the Medicare levy). Instead maybe we would be better off if our government(s) just came clean and acknowledged that we will not be able to pay for what we want in the way of future public services without a modest upward adjustment of the income tax rates.

    Conclusion

    Like most countries, Australia is facing a potential long-term structural problem with its public finances.  With the modest resources available to the author it is not possible, nor even desirable, to propose a complete and detailed solution. Rather the point of this series is to show that there are a range of plausible alternative strategies for achieving long-term fiscal sustainability.  The argument that the Government’s proposed Budget strategy is the only way forward is false.

    Moreover as a nation we are unlikely to succeed in charting a viable way forward to fiscal sustainability until governments are prepared to subject their views to a proper conversation based on a clear appreciation of the pros and cons of the different alternatives.  Only in that way can the public support be built that is required to achieve future fiscal sustainability.  In present circumstances it is hardly surprising that this necessary support is not forthcoming, when less than twelve months ago the government promised in the election to both spend more and tax less and now seeks to impose a most unfair Budget on the community with no prior warning nor any such mandate.

    If, instead, we are to chart a way forward and establish the necessary public understanding and consensus, we particularly need to drop the ideology surrounding the merits of taxation versus expenditure and consider the claims of each tax and expenditure proposal on their merits. Unfortunately for the moment at least the Government, egged on by its cheer squad, seem determined to prevent any further discussion of other alternative fiscal options and strategies on the basis that only the present government can be trusted to fix a mess that they themselves have helped create.

    [1] This rate of 48.5% includes the 1.5% Medicare levy and the Government’s proposed 2 per cent ‘temporary budget repair levy’.

  • Michael Keating. An alternative budget strategy – Part 2

    Part 2. An Alternative Budget Strategy 

    In the previous part of this comment, I suggested that the Budget did need to return to surplus over much the same time path as intended by the Government. There is nothing new in that, and as previously noted, Labor also had the same intention when it was in Government.  The issue in dispute is whether an alternative Budget Strategy is available to restore a Budget surplus over the next four years and which would be more equitable and less damaging to future economic growth. What follows shows that such alternatives are available; in particular the alternative explored here would rely more on taxation and would avoid the cuts to welfare and education and to research and innovation that are central to the Government’s Budget.

    The scope for increasing taxation

    In the most recent financial year, 2013-14, government receipts represented 23.0 per cent of GDP compared to a long-run average over the previous twelve years of 24.3 per cent. Some of this current low level of receipts reflects the soft economy, and the ratio of receipts to GDP can be expected to improve somewhat as economic growth recovers. Indeed the Government’s Budget projects that revenue will rise to 24.9 per cent of GDP by 2017-18; that is by almost 2 percentage points, which on its own goes a long way to removing the present Budget deficit.

    As John Daley at the Grattan Institute has pointed out, however, three quarters of this improvement in receipts and the budget bottom line represents the impact of bracket creep as (with no tax indexation) people find themselves moving into higher tax brackets as their incomes rise with inflation. As a result someone on average full-time earnings will be pulled into the 37 per cent tax bracket from 2015-16, and the average tax rate faced by a taxpayer earning this projected average income will rise by nearly a quarter from 23 to 29 per cent by 2024-25[1]. Accordingly it seems prudent to assume that any government is likely to raise the tax thresholds from time to time and that the projected income tax receipts will be reduced accordingly.

    So what are the other options for improving the revenue? It is suggested that these broadly comprise action to:

    • Reduce tax expenditures which in many cases are equivalent to outlays
    • Limit tax avoidance
    • Restore the Carbon Tax and the Mining Resources Rent tax
    • Removing the tax rebates for the fuel excise for miners and farmers and the private health insurance rebate
    • Lift tax rates but in a considered way

    The potential for each of these actions are considered briefly below. 

    Reduced tax expenditures

    Many of the largest tax expenditures would be seen as justified and/or have considerable popular support. For instance the list of tax expenditures published by the Treasury includes no capital gains tax on people’s principal residence, deductions for philanthropic gifts, and the exemptions of education and health from the GST, and it seems unlikely that any government will want to remove these “concessions”. Instead it is suggested that reform of tax expenditures should focus on only two – the special taxation treatment of superannuation contributions and earnings and the capital gains discounts for individuals and trusts. Some might question adding negative gearing, but it is not included, as it is not considered by Treasury to be a tax expenditure, and there are legitimate issues of principle for allowing interest deductions against a taxpayer’s income irrespective of how that income was earned.

    In 2013-14Treasury estimated that the revenue foregone from the concessional tax treatment of superannuation was $32.1 billion. Rough projections by the author suggest that this amount might increase to around $39 billion in 2017-18 if there is no change to these concessions. However, not all of that $39 billion would be saved if the concessions were removed because some behavioural response could be expected. Even more significantly, some concessional treatment of superannuation savings is probably justified, given its compulsory nature and the restrictions put on accessing superannuation accounts. Clearly a number of options for possible reform of the tax treatment of superannuation are available for further consideration, but further exploration of those options would be a major exercise in its own right. For present purposes it is the author’s judgement that savings of the order of the order of $15.5 billion should be available in 2017-18 if the tax treatment of superannuation were reformed. Savings of this order would not be so much as to change the incentive for people to continue to save through superannuation.

    As part of its 2001 tax reform package, the Howard Government introduced a 50 per cent deduction for capital gains for individuals and trusts. Realised capital gains are just as much income as any other form, and there was never any justification for this 50 per cent discount, especially in a tax system which ensures that there is no double taxation of dividends accruing to Australian residents.  Furthermore, the Murray Inquiry into Australia’s Financial System concluded last week that the concessional treatment of capital gains “encourages leveraged and speculative investment – particularly in housing”.  The resulting high levels of household debt represent the major financial risk to the economy – much more than government debt.  Accordingly there is a strong case for   restoring the full taxation of capital gains, which is projected here to save around $5 billion in 2017-18.

    Reducing tax avoidance

    Before the Labor Government fell last year it introduced legislation to protect the corporate tax base from various loopholes. The most significant of these was “thin capitalisation” whereby the operating Australian subsidiary of an overseas company is loaded up with debt to its parents, so that it makes little or no profits in Australia. The Abbott Government has seen fit to drop these reforms, but if they proceeded the author projects (on the basis of information provided by the Labor Government last year) that these anti-avoidance measures could produce around $1.5 billion extra revenue in 2017-18.

    In addition, with the third biggest mining corporation operating in Australia (Glencore) reportedly paying next to no tax in Australia, it would seem that the time is ripe to review the tax treatment of transfer pricing arrangements. These arrangements occur when Australian subsidiaries sell at below market prices to their parent company so as to minimise their profits and tax paid in Australia. However, in the absence of more precise information, no allowance has been made for extra revenue from this source.

    Restore the carbon and mining resource rent tax

    While these taxes seem to have been contentious, there is a very good economic case for both of them. Indeed most economists strongly favour pricing carbon as the best way to reduce the harmful effects of carbon pollution. And the MRRT is only levied on above normal profits and as such cannot be a disincentive to mining investment. Indeed, if any further proof were needed, the experience over almost 30 years since the PRRT was introduced for offshore petroleum and gas shows that properly constructed resource rental taxes do not affect resource investment.

    Based on information in the 2012-13 Budget, the author estimates that in 2017-18 restoration of the carbon tax and the MRRT would bring in around an extra $3 billion and $2.5 billion respectively.

    Removing tax credits for fuel and private health insurance

    There is no economic justification for providing tax credits to farmers and miners for their fuel use. First, why subsidise the use of any particular input into the production process? And if fuel is subsidised why not also subsidise other input costs, including for example, labour costs? Second, why subsidise some of the costs of two particular industries – farming and mining – but not other industries, including other industries that are competing with these two industries for resources such as labour.

    Equally many evaluations have pointed to the cost ineffectiveness of the subsidy for private health insurance. Contrary to the alleged justification for this subsidy, more patients would be treated if the same amount were spent on public hospitals rather than subsidising the inefficient operations of the private health funds and the overcharging by private medical practitioners.

    Technically these two subsidies are not regarded as tax subsidies and instead are reported on the expenditure side of the Budget. On the basis of the forward estimates of these expenditures it is projected by the author that in 2017-18, $7.6 billion and $7.2 billion could be saved by abolishing the fuel credits and the private health insurance rebate respectively.

    Total revenue savings

    The sum of the budget savings identified above is estimated to be around $42 billion in 2017-18 or equivalent to about 2¼ per cent of the projected GDP (see table below). This structural saving to the Budget of an annual $42 billion by 2017-18 is about the same as the total turnaround that the Government expects to achieve in its Budget.

     

    Possible Budget Savings on the Revenue Side

    2017-18, $billion

    Tax Expenditures
    Reduce favourable treatment of superannuation

    15.5
    Capital gains discount for individuals & trusts

    5
    Restoring anti avoidance measures dropped

    1.5
    Restoring tax measures dropped
    Carbon pricing

    3
    MRRT (net after allowing for impact on Company tax)

    2.5
    Removing tax credits
    Fuel excise rebate

    7.6
    Private health insurance rebate

    7.2
    Total budget savings

    42.3

    Of course, the list of revenue measures identified here can only be illustrative of what can be achieved on the revenue side of the Budget.  It may be that others would want to amend the list in various ways. For example, it may be that in the present political climate the carbon tax would not be renewed, but even if not all the measures identified were taken up or only partially adopted, what is clear is that there is a lot of scope for raising additional revenue and achieving a fairer Budget outcome.

    In addition, as noted above, most of the Government’s Budget turnaround is also achieved through higher income tax revenue, but that revenue is brought about by bracket creep rather than efficient decisions.   Indeed, after allowance for the one-off payment of $8.8 billion to the Reserve Bank last year, and for various additional expenditures principally on new infrastructure and defence, the Government’s budget actually achieves very little in expenditure savings on a net basis, amounting to only 0.3 per cent of GDP in 2017-18. By contrast the proposals presented here do not make the unrealistic assumption that bracket creep in the tax system will be allowed to continue to bring in extra revenue without any of those proceeds being handed back through tax cuts. Instead if most of the measures proposed in this comment were substituted for the government’s budget then there would be scope for tax cuts by increasing tax thresholds to offset the impact of bracket creep.

    Nevertheless, as pointed out in the first part of this Alternative Budget Strategy, Australia faces a longer term fiscal problem, and the assessment is that over time by 2049-50 further structural savings will be needed of the order of another 2¼ per cent of GDP – that is as much again.  Those issues will be discussed further in the next part of this series.

    Suffice for now to say that while clearly more work would be needed to determine the details of where savings should be made to achieve the necessary restoration of the Budget surplus by around 2017-18, enough has been shown here to establish that credible alternative budget strategies are available. Conservatives should not be allowed to hide behind the convenient myth that their strategy is the only one, and that any questioning of it is irresponsible and a failure of governance and our political system.

    [1] This fact needs to be considered in perspective. In reality around 80 per cent of the full-time male employees earn less than average full-time earnings. If allowance is made for those who work less than full-time, who are females, and who do not work at all, then considerably less than 20 per cent of the adult population have an income equivalent to full-time average earnings or more.

  • John Menadue–Power prices – we ain’t seen nothing yet!

    We have seen wild exaggeration about the effects of the carbon tax on prices and the economy. It has all turned out to be quite a fizzer. The price increases we have seen have little to do with the carbon tax and the economy continues to grow steadily. Whyalla has survived.

    But we have a real problem just around the corner in energy policy. The price of domestic gas is likely to at least double in the next year or so as the domestic price of gas rises to meet the international price. Compared with the impact of the carbon tax, this increase in domestic gas prices will be quite severe.  By comparison, the carbon tax will be seen like a blip on the horizon.

    Deloitte Access Economics has just warned that if the gas rise goes unchecked, the manufacturing sector alone will contract by as much as $118 billion by 2021, with nearly 15,000 jobs lost. It suggests the mining sector might contract by $34 billion and agriculture by $4.5 billion.

    Australian gas consumers are naturally concerned because of the $70 billion coal seam gas export project at Gladstone. It is nearing completion and it is likely that our domestic prices for gas will increase to match the export prices from Gladstone.

    Gas is vital for a whole range of industries in Australia – electricity generation, glass and plastics, fertilisers, cement, metals and ceramics – and of course home heating and cooking. Our manufacturing sector has been struggling with the high dollar, but relatively low gas prices have been very important. That is going to change.

    As Bruce Robertson in the SMH has pointed out, historically our east coast had relatively cheap gas from Bass Strait and the Cooper Basin. It was a domestic market largely shielded from world prices. That will change dramatically with the export gas terminal in Gladstone which will draw gas out of the domestic market into the export market because of higher prices overseas, particularly in Asia.

    The coal seam gas moratorium in NSW and Victoria is peripheral at the moment. The main driver of increased gas prices in the years ahead will be the catch-up to export prices driven by the very large coal seam gas project at Gladstone.

    This seems absurd for a country that has some of the richest energy and gas fields in the world. Tony Abbott says that Australia aspires to be the ‘affordable energy capital’ of the world.

    We need to seriously consider reserving necessary gas for Australia’s domestic purposes including the 40% of our gas used by industry.

    Free marketeers will tell us that we should not interfere in the market – that we should let domestic prices rise to export prices, otherwise it will discourage investment. But how ‘free’ is the market? There is concentrated ownership of reserves and limited competition with tightly held gas fields reserved for LNG export. The major companies have joint marketing arrangements which limit competition. There is really a cosy club of big international players that distorts the market.

    We have given some of these major international companies the right to reserve our gas for export. Some of our very large gas resources are, or will be, held back for export where there will be higher prices.

    In 2012, the OECD observed ‘these [gas] markets are far from being liberalised. [They are] characterised by a lack of competition both upstream [where relevant] and downstream’.

    Many countries insist that their substantial gas reserves must pass the test of ‘value-adding’. Gas is reserved for domestic use if it can be demonstrated that that ensures greater value for the supplier country. After all, the gas belongs to the country and its people – and not the international companies. In WA the government has enacted legislation to shield domestic gas consumers. In the US, domestic gas prices are kept low by limiting export licences. In different ways most other countries with large gas reserves ensure that there is adequate domestic supply.

    On the ABC on the 30th April this year, asked by Tony Jones ‘Should a national energy policy include putting aside gas reserves for domestic use’, Jeff Kennet replied ‘Well, certainly, if you don’t provide for your own you, very quickly find out that your own aren’t there or they are of a sub-class in terms of the region in which we live’.

    The ‘debate’ about the carbon tax is really just a curtain-raiser to the very serious discussion we need to have about the reservation of Australian gas for domestic use.

    To what extent are we prepared to limit export licences for gas until the domestic market is adequately supplied? I am not persuaded that the large international gas companies will put Australia’s interests first.

  • Michael Keating. An alternative budget strategy – Part 1

    In May this year I posted five articles by Dr Michael Keating on the economic and social consequences of the recent Hockey budget. Over the next three days I will be posting three follow-up articles by Michael Keating on an alternative budget strategy.  Dr Michael Keating was formerly Secretary of the Department of Finance and Secretary of the Department of Prime Minister and Cabinet. John Menadue

    Part 1. An Alternative Budget Strategy 

     Two months later and the Abbott Government’s Budget is the worst received in living memory. There is widespread community agreement that this Budget is basically unfair.

    Readers will not need reminding of the various cuts to welfare, health and education, but in the absence of the usual Budget information from the Government, perhaps the best summary of the distributional impact of this Budget has been provided by NATSEM. In short, NATSEM modelling found that by 2017-18, “Low income families with children (bottom 20 per cent) are worse off by around 6.6 per cent while single parents are worse off by around 10.8 per cent”.  In contrast “High income families are marginally better off thanks to the carbon tax removal”. And this analysis does not include other measures such as the Medicare copayment, the cuts to education and training, and possibly the harshest measure of all, the denial of access to any income support for young unemployed people every other six months.

    But is there an alternative to the Government’s budget strategy  –  contrary to the assertion by the Government and its supporters that in fact ‘there is no alternative’ (which is of course a familiar refuge for conservatives)?

    First, the Government is right that we do need to restore the Budget to surplus; indeed the previous Labor Government was equally committed to that, and over much the same time-frame. Furthermore, the projected rate of fiscal consolidation over the next four years – 0.6 per cent of GDP – is not draconian and seems to get the balance about right in terms of its impact on a still soft economy.

    Second, Australia also faces longer term fiscal pressures, partly because of our aging population, but more importantly because of rising expectations for increasing public services as incomes rise, combined with new technological enhancements impacting particularly on health services. In short, the Treasury estimated in its most recent 2010 Intergenerational Report that these structural budget pressures were likely to add as much as a net 4½ percentage points of GDP to total outlays by 2049-50 if the (then) present policies were maintained. And since then spending pressures under the previous Labor Government probably further increased, notwithstanding some savings initiatives, because of big new spending programs associated with the Gonski reforms of schools funding and the National Disability Insurance Scheme. Three years out from now, in 2017-18, these fiscal pressures start biting significantly, and given the long lead-times in effecting budget reform, prudent budgeting would start making preparations for financing these demands now by some combination of greater revenue and/or greater efficiencies.

    Where the Government and its cheer squad are wrong, however, is their assumption that their proposals represent the only tenable strategy to achieve the goal of a budget surplus. In effect the Government asks us to believe that the Government’s ‘tough’ budget decisions were absolutely necessary because no alternative course was possible. For example, the retiring Secretary of the Treasury, Martin Parkinson, in an almost unprecedented intervention into the political debate, has seemed to suggest that ‘vague notions of fairness’ should not be invoked to oppose the government’s program of fiscal consolidation.  Equally Paul Kelly has pontificated in the Australian that our budgetary problems are such that the ’harsh medicine’ being handed out is necessary, and that opposition ‘reveals an immaturity in political debate that the nation was meant to have left behind decades ago’.

    In fact, quite to the contrary, it is a sign of the maturity of our democratic system if there is a proper debate about the best policies for the future.  We should not be silenced by claims that any opposition to the Government’s particular strategy for restoring a budget surplus is irresponsible. Equally, however, that proper debate does require some appreciation of what are the alternatives to the Government’s proposed fiscal strategy.

    Clearly the country needs something better than the present approach by the Senate. The necessary budget surplus cannot be restored while the Senate rejects so many of the Government’s savings measures, while passing most of the tax reductions. Indeed at the time of writing it is reported that the Senate’s votes have led to a situation where so far the Budget will be $7 billion worse off over the next four years than if the Budget had contained no policy changes at all.

    In the following comment I therefore sketch the outlines of an alternative approach to restoring the Budget to surplus over the next four years and sustaining that surplus in the long run. Fundamentally this comment attempts to sketch how a fairer outcome could be achieved by relying more on measures to increase the revenue, and less on cuts to welfare.  By comparison, of the decisions taken in the Government’s Budget, 77 per cent of the projected improvement reflected decisions to reduce spending.

    It is contended that this proposed rebalancing in favour of higher taxation can be done without damaging economic growth. In fact there is no correlation between levels of taxation and the rate of growth in GDP per capita among the developed OECD countries. Of course, there is likely to be a point where a particular tax is so high that it could affect economic growth and/or employment, but the ratio of government revenue to GDP is lower in Australia than in almost all other Western democracies, and our starting point fiscal position is also much better (see Table below). Indeed, spending some of the proceeds from higher taxation, so as to avoid the cuts to tertiary education and training and research and development, would even help to improve the rate of future economic growth.

    Country*

    Total Tax Revenue as a proportion of GDP 2011

    (%)

    General Government Net Lending as proportion of GDP 2013 (%)

    General Government Net Financial Liabilities as proportion of GDP 2013 (%)
    Australia

    26.5

    -1.4

    11.8
    Canada

    30.4

    -3.0

    40.4
    Japan

    28.6

    -9.3

    137.5
    United Kingdom

    35.7

    -5.9

    65.4
    United States

    24.0

    -6.4

    81.2
    OECD

    34.1

    -4.6

    69.1

    *The figures for each country refer to all levels of government, and the net lending by general government is equivalent to the Budget deficits of all governments

    Source: OECD Statistics, http://www.oecd-ilibrary.org/economics/government, accessed 13 July 2014.

    Note that Australia is the lowest on each of the three indicators except for tax revenue, but if borrowing is added tax revenue then Australia is the lowest at about 28% of GDP compared to more than 30% in the US.

  • Walter Hamilton. When Local Becomes Global

    Why is Vladimir Putin calling down upon himself the ire of the world by failing to help secure the crash site of MH-17 for international investigators? The answer, I think, is pretty obvious. He does not want to demonstrate how much influence, if not control, Russia has over events in eastern Ukraine. Putin’s response has been to blame the government in Kiev and hold it responsible for the situation.

    Since the fall of the Moscow-backed regime in Kiev, it has been Russian policy to destabilize its neighbour so as to discredit and weaken the pro-Western government that has taken over. It has used existing ethnic and religious divisions in Ukraine to hive off the Crimean peninsula and turn a large swathe of territory in the east into a war zone.

    For historical reasons many people living in the east of Ukraine identify with Russia; in Europe, where borders have changed often in the past century, this kind of cross-border allegiance is not unusual. Before now Hitler and Stalin, among others, exploited similar sources of tension. Putin has used pro-Russian Ukrainians––advised, trained and equipped by his own military intelligence services––together with a ‘free corps’ of Cossacks and other Russian mercenaries, some of them veterans of the fighting in Chechnya, to pursue his anti-Western agenda.

    He may have good reason to fear the loss of a satellite state, but his actions only serve to underscore why most of Ukrainian citizens want a future in the EU.

    Putin’s particular approach has been conditioned by a desire to localize the conflict as much as possible, thus avoiding a direct confrontation with member states of the European Union. Until this week he had been partially successful. Although both the United States and the EU imposed sanctions against Moscow following its invasion of the Crimea, there have been signs recently of a split in the trans-Atlantic response to Russia’s aggression. Washington expanded its sanctions regime after it determined that Moscow was supplying ever-more sophisticated weapons to the rebels, including surface-to-air missile launchers, but the EU did not follow suit. German Chancellor Angela Merkel and French President Francois Hollande (who have not been the most outspoken of world leaders condemning the attack on MH-17) are the chief architects of a ‘slowly-slowly’ approach to Putin. Their approach, along with Putin’s ‘localizing’ strategy, has crashed just as surely as the ill-fated Malaysian Airlines plane.

    Local has become global. In an interconnected world, a conflict in the very centre of Europe in which the most sophisticated types of conventional weapons are deployed was never going to remain local for long. International travel is just one way in which humanity is knitted together; we cannot turn our backs on any festering conflict and hope it goes away. The complaint that the aircraft should not have been using air space above a conflict zone (as was done by many other commercial flights) completely misses the point. Whoever supplied and wantonly fired the missile, having failed to even identify the target, bears the whole responsibility.

    Putin has been hoisted with his own petard: if he continues to stand aside from this tragedy he is condemned as irresponsible and ruthless; if he exercises the authority of his office to clear the disaster area for a proper recovery and investigation, he demonstrates the true extent of Russia’s involvement. Alternatively, if indeed he cannot influence the disparate militias that are roving over the disputed territory, it will become clear that he has engineered a crisis over which he has lost control.

    Putin faces an unenviable choice, as far as his own prestige is concerned (and that, rather that the dignified recovery of the remains of 298 innocent people, seems to be the overriding consideration in Moscow). It is hard to imagine how this terrible situation can play out to his advantage. The best outcome, and the best memorial to the lost lives, would be an end to the fighting and a political settlement that respects the sovereignty of Ukraine and the rights of all its citizens.

    Walter Hamilton reported from foreign bureaus for the ABC and AAP for 14 years.