Turnbull’s benchmarks for failure

Dennis Shanahan was the first to use the term ‘benchmark’ in his 27 November piece in The Australian Rudd sails on perilous waters to identify the criteria of success, or failure, of the Rudd Government’s budget strategy according to the economic oracle, Malcolm Turnbull.

Leaving aside Shanahan’s applause for Turnbull’s tactical moves, he identified three benchmarks that to Turnbull would denote failure of economic management.

First benchmark, going into a deficit.  As Shanahan put it, “Malcolm Turnbull had cornered Rudd and Wayne Swan over the deficit by establishing a budget surplus as a benchmark for economic success.”  So by corollary, a budget deficit would be a benchmark for failure.  And the longer the deficit lasts, the greater the failure, according to Turnbull: "Experience and history tell us that Labor deficits are never temporary. The last Labor deficit lasted for six years. It only came to an end with the election of a Coalition government."

Next benchmark, rising unemployment.  Shanahan’s take is “...Turnbull and the Liberals are starting to frame the argument that any rise above the current 4.3 per cent unemployment rate is another benchmark for economic failure.”

Third benchmark – recession.  Shanahan ends with a prediction: “The next challenge for the Government will come as Turnbull begins to demand it keeps the nation out of recession.”

So here we have the setting of benchmarks for failure of the Rudd Government, two of which cannot be avoided, and a third that also might be unavoidable. 

Turnbull knows full well that Australia has been hit by an extreme economic storm not of its own making, that if the nation is to avoid a severe economic downturn and loss of jobs, radical fiscal measures will be needed which will likely create a budget deficit.  To not take these measures would be economically irresponsible, so knowing the Government will take them Turnbull is setting it up for economic failure by his own definition.

Regarding unemployment, last month’s forecasts for unemployment of more than 100,000 have worsened over the past three weeks.  So rising unemployment is an unavoidable given. The Government cannot meet Turnbull’s benchmark.

Finally, since ‘recession’ is an academic term for two successive quarters of negative growth, a product of the economic circumstances, over which the Government has limited control, another benchmark is looming on the horizon, one the Government would find it difficult to avoid unless it took extreme fiscal measures which in itself would create a deficit, another benchmark of failure. 

So Turnbull is trying to establish a lose-lose-lose situation for the Government, a win-win-win for the Coalition and of course himself, and seems prepared in the process to accept a lose-lose-lose situation for the nation and its people. More...

The genius in the Opposition

We’ve a pretty smart Government, but what would it be without the guidance of the genius that suffuses the Opposition benches?

Ever since the top genius was elected to the position of Opposition Leader, there has been a flood of sage advice flowing from him to the Government on all matters financial and economic to keep it on course as it works to minimize the damage to Australia from the GFC tsunami.  In fact even before that Malcolm Turnbull as Shadow Treasurer offered plenty of gratuitous guidance to Kevin Rudd, and particularly Wayne Swan, trying as he was to keep vertical on his training wheels.  One cannot blame Turnbull for offering his counsel, as, after all, he once was a merchant banker and he did make a lot of money at it.  It follows that he must be supremely qualified on all matters banking, the economy of the country, and fiscal management at a governmental level, even in the once-in-a-century circumstances that now engulf the world.  Genius knows no bounds; genius is built to manage the unusual, the unique.  And he has the ego and confidence to match his genius.

The fact that we’re all in this desperate situation because of the inspired work of banking genius in the US and indeed all around the world, the fact that US Treasury Secretary Hank Paulson, previously Turnbull’s boss at Goldman Sachs, has so far been unable to devise a solution, and has changed his mind radically in the space of a few weeks, should cause us to marvel at Turnbull’s capacity as an ex-banker to read and correct financial catastrophes.  With his obvious ability and authority, Turnbull should offer his help to Paulson, and thereby help us all.

In contrast to Turnbull’s unquestioned ability, Rudd and Swan are characterized by him as not knowing what they were doing, as incompetent on matters financial, as indeed all Labor Governments are by definition.  ‘They just don’t understand’ is an oft-repeated phrase.

Turnbull’s advice has been ubiquitous; space will not allow all of it to be captured here.  The first of the Turnbull gems came when Swan declared the ‘inflation genie was out of the bottle’. We know this was part of a strategy to diminish the financial credentials of the Howard Government, and that it was not the smartest metaphor, since genies are notoriously difficult to get back into their dwelling place.  But it was the cue for Turnbull to pounce and accuse the Government of ‘talking up inflation’, a theme to which he has returned again and again.  Neither he nor anyone else in the Opposition, or for that matter in the media, has explained how it is possible to ‘talk up inflation’, if by that Turnbull meant that talk was capable of increasing inflation.  If he meant ‘talk about inflation’ he should have said so.  It was a natural segue to go onto say that by ‘talking up inflation’, Swan was ‘egging the Reserve Bank to raise interest rates’.  Since the fierce independence of the Reserve Bank was established beyond doubt during Peter Costello’s Treasurer-ship, it’s improbable it would dissipate immediately after his exit, to the point that the Bank would be susceptible to ‘egging’ from anyone.  In any case, why would an incumbent Government want interest rates to rise immediately after its arrival, especially after the pillorying Labour suffered for years for its period of high interest rates?  So the Turnbull mantra was always fanciful, and being the smart man he is, he knows that too.  But that has been no impediment to his repeating it ad nauseam. Expect more. More...

The ‘deficit’ wedge

In an earlier piece on The Political Sword The emerging Opposition strategy I wrote that one of Malcolm Turnbull’s strategies “...seems to be to try to anticipate Government moves and pre-empt them by stating what should be done, and occasionally what he would do.  The former is preferable because several options can be offered, some of which might hit the mark and make him look prescient, whereas the latter is more risky as it commits him.”

At the National Press Club on Monday, Turnbull said "Given the strong public finances Mr Rudd has inherited and the growth forecasts we are relying on for next year, Australians rightly regard the prospect of a deficit Budget next year as a failure in economic management - an admission that Mr Rudd could not maintain a strong economy and above all could not live within his means."

So there’s the wedge.  If the Government goes into deficit, Turnbull insists that will indicate failure.   Julie Bishop has been singing the same song, saying that with the forecasts the Government has made, there is no reason for it to go into a deficit.  This is a double wedge; she is seeking also to hoist the Government on its own forecast petard.

Access Economics released a report on Monday predicting the Budget will be in deficit by $1.1 billion next financial year and around $4.3 billion in each of the following two years.  Chris Richardson explained that this would be due to diminished revenues.  But in commenting on the prospect of a budget deficit, he insisted that going into deficit would be the appropriate thing to do, and that the Government should not shy away from doing so.  Other economists agree, including Stephen Koukoulas of TD Securities who said “The case for a substantial fiscal easing is strong, even if that means the Budget falls into deficit by 2 or even 3% of GDP.” and “It would be dumb to try to keep the Budget in surplus at a time of weak growth and rising unemployment.”

Yet despite that advice, which with his background he must understand, Turnbull is pressing on with his wedge to gain political advantage even if that is at the expense of good economic management.

Wayne Swan is backing Treasury forecasts: Swan sticks by surplus forecast  "The official forecasts of the Commonwealth are for modest growth and modest surpluses but there are always differences when there are private sector forecasters out there. We are projecting a modest surplus - Access is not. There is simply a difference in the forecasts when it comes to the revenue."  The message is similar from other ministers.  The Government is determined not to be wedged on this issue.  But the large deficit left by the previous Labor Government, which the Coalition exploited politically for its entire time in office and beyond, has become somewhat of a bogey for Labor.  This is not without good reason; Monday’s Newspoll figures showed that 56 per cent of those polled would be concerned if the Government were to fall into deficit due to further spending. More...

Rudd’s First Year – What the papers say

The weekend and today’s media have been full of assessments of Kevin Rudd’s and his Government’s first year.

First the positive.  Paul Kelly writing in The Weekend Australian 22-23 November begins his piece First among equals with “Kevin Rudd never imagined a year like this. Australia's control-minded Prime Minister has been hit by an out-of-control financial hurricane that will define his first term, disrupt his plans and pose a challenge he never conceived.”  He goes on to say "Almost before his prime ministership is well established, it must be remade in economic and political terms. This task has just begun, yet, so far, Rudd's political skills have been supreme."  In a video in The Weekend Australian Kelly begins with the statement that Kevin Rudd should be very happy with his first year as PM and that he finishes in a stronger polling position than at the election.  He describes the two halves of the year, the latter after the GFC, and says that will become the fundamental narrative for the Rudd Government which will try to make sure Australian does not sink into recession.  He ends “His response will determine his fate at the next election and the character of his Government.”  He said similar things on the ABC TV’s Insiders on Sunday morning.

Then there was a nice series of visuals in The Weekend Australian that includes a scorecard, a poll tracker, promises, timeline, gallery, quotes and travel map.  All well worth a look.  On the scorecard Samantha Maiden rates Kevin Rudd a 7/10 and Malcolm Turnbull 8/10, which may tell us something about her orientation.  She rates Julie Bishop lowest at 5/10.

In the same paper Dennis Shanahan starts with a headline Living up to its promise and then proceeds via a long anecdote involving Joel Fitzgibbon to point to Rudd’s ‘habits, attitudes and character’.  Dennis does concede that “...he has had a good first year of delivering promises, including the early high point of the apology to the Stolen Generations. He also has avoided ministerial scandals, big mistakes and instability.”  High praise from Dennis indeed.   Then almost as if that stuck uncomfortably in his craw, he proceeds to point out what he sees as Rudd’s many shortcomings.  He finishes, somewhat incongruously, “That's the positive side of Rudd's unquenchable thirst for information, his tireless need to be in control and his interference from on high: he's taking nothing for granted and is adjusting his political strategy to stay in government.”  If you’ve the stomach, see if you can find the plusses.

Lenore Taylor in a piece More than a term for electoral endearment in commenting on the Rudd Government’s first anniversary raises the spectre of the Government being a ‘oncer’, something she says is in the interests of both sides to readily acknowledge.  She concludes that ”...there's no real reason to assume that the crisis will eat into the Government's political capital on the same scale that it eats into its surplus. Handled competently, it could bolster Labor's economic management credentials and Rudd's image as a leader with mettle rather than a former bureaucrat who doesn't need much sleep.” More...

Blog Watch

This new page points to material posted on political websites, initially in Australia.  It can be accessed by clicking the Blog Watch link in the upper right margin under 'site pages'.  It is provided as a service along the lines Crikey provides Richard Farmer's Breakfast Media Wrap, which make perusing the daily online newspapers much easier. 

As many visitors to political blogs are unable to visit daily, the updates will be in weekly batches, so that users can see the whole week at a glance.  Where possible links are provided.  The sites will be grouped under three categories initially: psephology, political, and social/economics

The sites listed to date are:

The Poll Bludger
Oz Politics
ABC Elections  

Political blogspots
The Political Sword
Lavartus Prodeo
The Piping Shrike
Peter Martin
Andrew Bartlett
Politically Homeless

Social and economics blogspots
John Quiggin
On Line Opinion
Club Troppo

Time will tell if I can keep this page sufficiently up to date.

The gathering media assault on Rudd-speak

The call for Kevin Rudd to use his speechwriter seems to be gathering momentum.  There have been calls for this from Bob Hawke, Paul Keating’s speech-writer, Don Watson, Bob Ellis and sundry columnists, most recently Samantha Maiden, online political editor for The Australian in a piece on 19 November, He does exist - Rudd's speechwriterShe reveals that Tim Dixon, a lawyer and economist, is Kevin Rudd's speechwriter, that he "writes perfectly good speeches for Rudd before the PM gets to them".  She then gives Rudd both barrels: "But do not blame him for the Prime Minister's mangled message in his jargon-filled orations and attempts at homespun schtick.”  She continues "According to Labor insiders, Mr Dixon writes a perfectly lovely speech, as do other colleagues in the PM's office.  Until Mr Rudd gets his clunky control mitts on it."  I’m sure we’d all love to read Dixon’s ‘perfectly lovely speeches’.  If Maiden had done so, she would have had some basis for her assertion that Rudd ‘mangles’ them.

The call for Rudd to use a speechwriter results from the view that Rudd’s oratory is not up to scratch.  In reaching that judgement, it’s uncommon for the critics to state their criteria for acceptable public speaking, or a role model that Rudd might emulate.  Speechwriter to Labor politicians, Bob Ellis, attempted to do so this morning on ABC 774 radio when, referring to speeches for which a speechwriter would be appropriate, said that they needed ‘muscular’ emotion, and rhythm that reinforced the message.  That was as far as he got.

The Canberra press gallery are among the most critical of Rudd’s oratory.  They miss what they considered to be the outstanding debating talent of Peter Costello, and acknowledge Paul Keating had a clever turn of phrase.  I can’t recall them extolling John Howard’s performances, in or out of parliament, nor can I recall any of his other ministers being granted their seal of approval.  They rate Malcolm Turnbull as a good parliamentary performer, so perhaps he is the one Rudd should copy.

Bob Hawke feels that Rudd "... may have spent a little too much time on writing his own speeches...You can see that he wants to be sure that he's across everything. You can call that a control freak, but it's not a bad thing of itself."  No, not a bad thing to know what you’re talking about.  Howard also gave the impression that he did; I can’t recall him being criticized for that.

What Maiden accuses Rudd of is that “He loves to back up the truck and dump facts, figures, details and acronyms into his speeches as his own special personal touch.”  Are you getting the drift?  Presumably she thinks facts, figures and details are not de rigueur. Presumably soaring oratory, devoid of these ‘distractions’, will do.   Acronyms of course are ‘uncool’.  But how many times do we want to hear the same longhand phrase in the one speech, when an acronym would be a reasonable substitute?  Acronyms that are not generally understood confuse, but surely we can cope with the common ones.  For example, do we want ASIC and APRA spelt out each time these bodies are mentioned?  More...

The Rudd Report Card one year in

Since the anniversary of the election of the Rudd Government is now upon us, a handful of commentators have already attempted an appraisal of Kevin Rudd’s first year.  Their focus has been more on Rudd than his Government.  The general tenor is that, almost grudgingly, they acknowledge he’s not doing such a bad job, and the people seem to like him, but the commentators have plenty of negatives, and warn of a variety of ‘dangers’ lurking for him in the days ahead, which may reverse his popularity.

This piece attempts an analysis from the starting point of labels applied over the year by the media, most of them uncomplimentary.

All talk and no action

This was a favourite until recently, until the GFC arrived.  Since then Rudd and his ministers have been engaged in feverish activity taking steps to minimize its effect on our economy – the $10.6 billion economic stimulus package, the bank guarantee, the $6.2 billion car industry plan, and now the $300 million local government package.  Although there has been criticism of some actions, there now seems to be a consensus that the actions were timely and largely correct, apart from ‘a few mistakes around the edges’.  Not bad, considering the uniqueness of the situation and the rapidity of its advance.  The mantra has now been put to bed, at least for the time being.

Of course reviews, committee deliberations, expert reports and departmental input were never seen as ‘action’ by the commentariat.  It was just talk, or if a number of people were involved, a ‘talkfest’.  The idea of gathering information and soliciting expert opinion, analysing it, and having stakeholders debate the issues before formulating a plan of action seemed alien.  They longed for gung-ho rapid action that all could see.  John Howard was their man.

The Howard Years now screening on ABC shows that our last PM was indeed gung-ho, ‘all action and no talk’ when it came to many initiatives.  On such major matters as, for example, the GST and the Murray Darling Water initiative, there was virtually no consultation, just unilateral action.  If journalists feel this is the way politics should be done, it’s not surprising that Rudd’s careful ‘bureaucratic’ approach is anathema to them.  This is the first of several examples in this piece where it seems that it is the mindset of the commentariat, the prism through which it views the world, its idea of how things should be done, that determines how it rates Rudd and his Government.  Like an old boys club, it sits in judgement, but never bothers to state its criteria.

All symbolism, no substance

Although the media applauded the signing of the Kyoto Protocol and ‘The Apology’ they were quick to label these nation-changing events as ‘symbolic’, sometimes ‘merely symbolic’.  They seemed unable or unwilling to place these ‘symbols’ alongside the substance of the Garnaut Report, commissioned by Rudd while in Opposition, and subsequently the Green Paper, the Treasury modelling, and the soon-to-be-released White Paper, and the continuation of the NT intervention and its recently-completed review.  If these studies, reviews, reports and actions are not substance, what on earth are they?  Again, the mindset of the commentators allows them to overlook these and continue to mouth the weary ‘all symbolism, no substance’ mantra.  Even respected social researcher Hugh Mackay, in an article by Simon Mann in last Saturday’s Age, says Rudd’s symbolism has fuelled the euphoria generated by his election, which he declares is ‘dangerous’ as the “euphoria bubble has to burst”. He too seems oblivious of the substance that has enveloped the symbolism, and given it meaning.  The fact that so many reviews and reports, complete with recommendations, will conclude next year has now moved some journalists to predict that the Government will be overwhelmed by them, swamped by too much substance to manage.  They seem unable to be satisfied.  Wait for the criticism that Rudd has ‘bitten off more than he can chew’. More...

Will world leaders do a climate change Nero?

Last week, two young women, concerned about the environment, made the telling comment on TV that those who will make decisions about climate change mitigation will be dead by the time their efforts at mitigation will be felt; they will not have to live with their decisions, good or bad.

The Government’s White Paper on its Carbon Pollution Reduction Scheme is due soon, and after debate, legislation will be introduced.  How do the various stakeholders line up as decision day for Australia approaches? 

The majority of climate scientists are showing increasing concern, at times almost panic, as more and more adverse data accumulates that suggests climate change, CO2 accumulation and global warming are accelerating much faster than expected, and the outward signs of this, such as the threat to polar ice caps, permafrost and natural icons, are accumulating more rapidly than predicted.  Conservationists warn that ten of Australia's iconic places will be lost without a commitment to reduce carbon pollution by a third by 2020.  Don Henry of the Australian Conservation Foundation says this may be our last chance to get Australia into a strong leadership position on climate change so we can get a good international agreement that can save icons such as the Kakadu Wetlands, the Murray-Darling Basin, the Australian Alps and the Great Barrier Reef.  A Barrier Reef expert, University of Queensland marine biologist Ove Hoegh-Guldberg, confidently asserts that sea temperatures are likely to rise 2 degrees C over the next three decades which would kill the reef.  Others, such as Tim Flannery, have strongly supported the need for urgent action.  He too exhibits the same deep apprehension that climate scientists are increasingly feeling. Some scientists say that in a worst case scenario the temperature rise may even be as much as a 6 degrees C, with catastrophic consequences for sea levels.

Ross Garnaut’s final paper pulls no punches in describing the effects that climate change is likely to produce, and what radical action is needed to mitigate them.  Although some have said that his recommendations are not tough enough, he denies this, saying that Australia should make a ‘proportionate response’ and aim for targets as high as can be achieved within the global community.  He is trying to balance optimal mitigation with what is achievable.  Garnaut prefers a 450 ppm target for atmospheric CO2, but concedes that 550 ppm may be all that is achievable, which Barrier Reef scientists say will destroy all but the northern part of the reef.  He recommends Australia aims for a reduction in emissions of 10 per cent by 2020, a carbon permit price of $34.50 by the same date, and a cut in emissions by 80 per cent by 2050.  He says the 10 per cent cut in emissions would be conditional on achieving an international agreement to stabilise carbon emissions at 550 ppm, and although this may not be achievable at the Copenhagen conference at the end of next year because it would be too soon after the new United States president is inaugurated, he is optimistic about the chances of a global agreement not too long after that. More...

The emerging Opposition strategy

Malcolm Turnbull believes the Coalition can win the next federal election.  To do so he has to reverse the stubbornly persistent opinion polls that show the Coalition is around ten points behind the Government on a two-party preferred basis, and he is now 40 points behind Kevin Rudd as preferred PM.  Although the polls showed a gradual narrowing of the gap between the parties from a record gap in March, the narrowest it ever came was the week after Turnbull became Opposition leader, when we saw the so-called ‘Turnbull bounce’.  It dissipated soon after and the gap widened to around a steady 55/45.  So Turnbull cannot, at least at present, rely on the gradual erosion that often occurs as Governments moves through their term.  This may occur later, but Turnbull feels he can’t wait.  Nor does he seem prepared to wait for the global financial crisis to wear away support for the incumbent Government, as so often occurs in such circumstances.  So far the electorate has applauded the actions of the Government in handling the crisis. 

So what is Turnbull’s and the Coalition’s strategy to gain traction?  The following suggests a strategy and an array of tactics that seem to be in play, if not formally, at least in daily practice.

The well-tried strategy of proposing policies alternative to those of the Government that might prove to be more attractive to the electorate has not been evident, but might be so nearer to the election.  The broad strategy to date has been to criticize, attack and sometimes ridicule Government moves, both policy and action plans.  It seems as if it is following Tony Abbott’s admonition to follow Randolph Churchill’s dictum: Oppositions should oppose, propose nothing and kick the Government out.  In doing so, another dictum has been applied: truth is irrelevant; all that counts is perception.

Turnbull’s first tactic seems to be to make a comment on every subject.  This gives him headlines and radio and TV grabs – the exposure all leaders crave.  His supposition seems to be that the more he’s exposed, the more erudite he’ll appear, and the more people will like him.

The next seems to be to try to anticipate Government moves and pre-empt them by stating what should be done, and occasionally what he would do.  The former is preferable because several options can be offered, some of which might hit the mark and make him look prescient, whereas the latter is more risky as it commits him.

Then criticize everything the Government does.  The criticism does not have to be immediate; endorsement can morph into trenchant opposition in a day or two.  Inconsistency is not a problem; people soon forget.  This tactic was seen with the economic stimulus package and the bank guarantee.  In both instances, Turnbull promised bipartisan support but later said that he would have done things differently.  The trick is to support measures that are likely to be, or in fact are proving to be popular, but suggest he could have done them better. More...

The hazard of uncertainty

For most people uncertainty is an uncomfortable feeling.  Yet we are forced to live with it every day.  The farmer wonders if rain will arrive in time to save his crop.  Many a cancer sufferer lives with the uncertainty of cure or recurrence.   The self-funded retiree endures the uncertainty of the stock market.  Uncertainty is an ever-present hazard and erodes confidence.

Prediction is fraught with uncertainty.  Yet prediction is what we rely on to make important decisions.  When an adverse event occurs, we ask what happened, why did it occur, and how can we avoid it recurring.  In some instances, such as a road crash, what happened is often obvious, why it has occurred is usually resolved by careful investigation, but how to avoid a similar event may defy even the wisest.  In medicine, what has happened, the diagnosis, is often patently clear; why it occurred is largely known; and the outcome, the prognosis, is generally predictable from experience.  But sometimes neither diagnosis nor prognosis is certain, so both patient and clinician live with uncertainty until the resolution is possible.

In financial systems, what has happened is usually there for all to see, but why it’s happened is often obscure, complex, and possibly inexplicable, so that avoiding a similar situation is beyond comprehension.  Without understanding the cause, no preventive action is possible.  This is where we find ourselves with the stock market decline, the global financial crisis, and the economic downturn.  We are working within a multifaceted complex financial system which operates like all systems – every part influences every other part.

Given this known complexity, the numerous imponderables, the paucity of reliable information, and sometimes the deliberate hiding of it, it is surprising, even dismaying, that so many voice their opinions with such confidence, such assurance that they understand the problem and have the solution at hand.  Some such commentators have prima facie authority because they are economists, or experts in monetary matters; others – politicians, economics correspondents, and sundry columnists, are less well credentialed.  But lack of suitable qualifications to give an informed opinion seems to be no barrier to loudly and authoritatively voicing one.  This would not be so much of a problem were it not for the fact that no one, no one at all, knows enough to give a reliable opinion.  So it’s all hot air, dangerously masquerading as learned comment.

No one knows, not even Warren Buffett, what the stock market will do this week, next week, next year.  About all that can be said is that if this market downturn follows the pattern of previous ones, recovery will occur eventually.  The trajectory is anyone’s guess.  Likewise, no one can predict the trajectory of the economic downturn.  We just have to live with the uncertainty.  Moreover, the effects of moves made by the Government, such as the bank guarantee, made in a near-vacuum, are not predictable with any real precision.  So what a pity it is that so many, qualified or otherwise, try their hand at the hazardous process of predicting.  What a shame it is that people make such bold assertions without even rudimentary evidence to back them, and use them to inflict political damage. More...

Barack Obama’s message to Australian politics

Barack Obama began his acceptance speech “If there is anyone out there who still doubts that America is a place where all things are possible; who still wonders if the dream of our founders is alive in our time; who still questions the power of our democracy, tonight is your answer.”  He went on to say “It’s the answer spoken by young and old, rich and poor, Democrat and Republican, black, white, Latino, Asian, Native American, gay, straight, disabled and not disabled – Americans who sent a message to the world that we have never been a collection of Red States and Blue States: we are, and always will be, the United States of America. It’s the answer that led those who have been told for so long by so many to be cynical, and fearful, and doubtful of what we can achieve to put their hands on the arc of history and bend it once more toward the hope of a better day.”

There’s a message there for Australia, for Australian politics, for the Australian media.  We have a multicultural society, we have the same groups, we have the same political divide, and we have the same cynicism, fear and doubt, much of it generated not just from contemporary circumstances, but by politicians and particularly the mainstream media.  At this time of international crisis, we need what Obama offered – hope.  He said: “The road ahead will be long. Our climb will be steep. We may not get there in one year or even one term, but America – I have never been more hopeful than I am tonight that we will get there. I promise you – we as a people will get there.”

The message is not just one of hope, not just that ‘we will get there’, but most importantly ‘we as a people will get there’.  At times of war, we in Australia have stood together as a people.  Now with the global financial crisis inundating us, we need to stand together, put aside partisan positions and work together to stay above the tidal wave and ride it until it dissipates.  To do this we need statesmen, not politicians.  Martin Luther King said "The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy."  All politicians should have that hanging in their walls, stamped on the top of their letterheads - it may drive them towards statesmanship.  Those in the media should rally round the politicians as they stand together, as they strive for statesmanship.

That there is a long way to go is evidenced by the coverage of the Mid-Year Economic and Fiscal Outlook, MYEFO to the in-group.  More...

Glenn Milne – the mischievous journalist

If a politician or bureaucrat wants to gain some publicity for a rumour, some gossip, or a little dirt on an opponent, or wants to make a damaging leak or insert an uncomfortable wedge, to whom would he or she go?  High on the list would be Glenn Milne, the mischievous maestro of scuttlebutt and ‘inside information’.  Presumably that is why Paul Keating was known to refer to him as ‘The Poison Dwarf’, a nickname that has stuck.  Milne is a Canberra journalist and political commentator with News Ltd, political editor of The Sunday Telegraph, and a columnist for The Australian.  He appears regularly on the ABC’s Insiders.  Formerly he was chief political correspondent for the Seven Network and political editor of The Australian.  He is vice president of the National Press Club, and is currently a candidate for the presidency.

Look at recent Milne articles.  They’re an unusual mixture.
Rudd rides high but wears out weary staffers – another piece on Milne’s well-worn theme that Kevin Rudd is overworking his staff.  This article and its scuttlebutt are explored below.

Anger at Rudd's leaked Bush call – Milne’s account of the “ongoing consequences for relationships between the two countries”.
Pragmatic Abbott heeds lessons of Coalition's fourth term – some timely advice to Tony Abbott and the Coalition on how to regain government.

Hairy-chested PM bids up Turnbull – an article that depicts Kevin Rudd and Turnbull as participants in some crazy poker game, trying to outbid each other, but Rudd of course is more ‘hairy-chested’.

New class warfare – a piece that focuses on class warfare in education, wanders around other topics, but concludes with ‘the Opposition can win’ theme.

Malcolm Turnbull's chance  - sage advice to Turnbull arising from the Henson affair and some timely political philosophy for the Coalition.

Market injection well planned – an article that lauds Wayne Swans’ $4 billion injection “of confidence boosting taxpayers' money into the non-bank mortgage lending sector”.

Writing material such as Milne’s effort of 3 November in The AustralianRudd rides high but wears out weary staffers demands some skill and well-tried techniques, which are elaborated upon below

First say something positive, something that even adversaries can scarcely deny, then follow with the all-powerful qualifier – but.  Milne’s piece begins: “On the basis of all recent published polls, voters are very happy with the Government, rating Kevin Rudd as the most popular prime minister. But there is another set of numbers that suggests there is deep unhappiness, if not dysfunction, within the Government.”

When stating the qualification, use words like suggest.  Such words don’t pin the writer down irretrievably as would words like show or demonstrate or prove.  So Milne says “But there is another set of numbers that suggests there is deep unhappiness...”

Then add a more sinister rider, usefully preceded by if not.  So Milne adds “..., if not dysfunction, within the Government.”

Now you’ve set up an enticing morsel of intrigue. More...

The CPRS, Treasury modelling, and the predictable reaction

Now that the long-awaited Treasury modelling for the Carbon Pollution Reduction Scheme has arrived, it is a salutary exercise to check how well the predicted reactions of the players match their actual response.

Predictably the Government has used the modelling to reinforce its determination to start the scheme by 2010.  2010 is a whole year, so there is twelve months’ flexibility in the start date.  But since 2010 is an election year, the timing of the introduction to some extent will be governed by the poll date.  To support its case for an early start, the Government has used the modelling data that shows that delay in implementation will be costly.  Kevin Rudd and his Minister for Climate Change and Water Penny Wong have injected a note of urgency, citing the increasing evidence of steadily accelerating global warming.  They have pointed to the relatively modest cost of a dollar a day increase in electricity and gas prices based on emission prices between $23 and $32 per tonne, leading to a oneoff rise in the consumer price index of between 1 and 1.5 per cent.  They also assert that early global mitigation will reduce longterm costs and that “delaying mitigation action in the global economy will increase climate change risks, lock in more emissionintensive industry and infrastructure, defer cost reductions in lowemission technologies and heighten distortions associated with tradeexposed industries. This will increase the cost of achieving any given environmental goal.”  On the positive side, the report shows that demand for lowemission goods and services will increase with a CPRS and that an emission trading market would create new sources of revenue.  The consolidated fact sheets are here

Predictably, Ross Garnaut agrees that the Government's proposed emissions trading scheme should go ahead as planned despite the global financial crisis and that 2010 is the best possible time to push ahead with the scheme.

For its part the Opposition has been as predictable in its response.  Having called for months for the modelling to be released urgently to inform those preparing a response to the Government’s Green Paper, and insisting that it was ridiculous to expect submissions in its absence, it has bucketed the modelling.  First, it has ridiculed the modelling on the grounds that it has not taken into account the current financial crisis.  The argument sounds plausible enough.  But the report itself says “The modelling focuses on the medium to longterm transformation of the Australian economy.  Market fluctuations, such as the current global financial crisis, will not materially affect the analysis.”  Since the timeframes modelled are 2020 and 2050, it’s hard to see how the 2008 financial crisis is relevant.  It might be to the start date which is likely about two years ahead, but even then the effects of the crisis are likely to be much less than now.  And in any case these effects will govern the trajectory of the introduction.  So the complaint about the current crisis not being factored in is spurious.

The strategy of mounting seemingly plausible arguments, but which on cursory analysis are clearly invalid, is one we have seen from the Opposition before.  Something similar occurred over the Government guarantee when Malcolm Turnbull ridiculed Rudd for not consulting with the Reserve Bank governor prior to the October 12 decision, superficially a preposterous thing to do.  But Turnbull knew full well that a Reserve Bank member, head of Treasury Ken Henry, was present and was the direct conduit from the governor to the PM.  The barb was soon blunted, but no doubt Turnbull hoped that it had had its desired effect.  Is this strategy deliberate and therefore disingenuous, or does the Opposition really believe its own rhetoric, which is even more disturbing. More...