What were you expecting - fireworks?



I was just watching some vintage Paul Keating in full rhetorical flight the other day as I was recuperating and contemplating the ramifications of Wayne Swan's Banking Package, released in early December. Which seems eons ago when you've been to Hell and back, as I have been since then. And it occurred to me, the electorate expected a Paul Keating-like 'Bang!', but instead it came with Wayne Swan's customary polite political whimper. Very Oz-like, as in Wizard of Oz-like.

Especially the bit where the Wizard tries to convince Dorothy from the (Kansas) Suburbs that he really means it when he lets out all manner of exhortations from behind his facade, painstakingly constructed so that people couldn't easily see the meek and mild-mannered guy behind it.





Same thing with Wayne Swan and his Banking Package. There he was for weeks before it was released, thumping the tub and making as much loud noise as his tiny body could muster. He would scare the pants off those porculent Bankers (I'm mainly thinking Mike Smith from ANZ, here). Then, by the time he's finished, they'll all sit down obediently and behave like he wants them to. The Banking Package won't even need to be so cataclysmic with the sorts of changes to be imposed as to rock any boats therefore, and Wayne could then retire to Brisbane for Xmas and New Year, job well done.

Except for one small matter! The Australian electorate has been spoilt of late when it came to Treasurers. Sublimely at the peak of his powers as Treasurer was the Master of Vaudeville Switch-Flicking, Paul 'Ramrod' Keating. What a hard act to follow. What a class act.

So, the electorate expected this:



but instead they got this:



'Mr Sobersides'


Not to mention the fact, and as I say so often, when it is appropriate I will do it, that the Coalition threw onto the stage a pretty handy performer as Treasurer, when they were elected in 1996. One, Peter Costello. We may have loathed his H.R.Nicholls-esque ideological tendencies, but he was as interesting to watch in Question Time, in his own uniquely gormless way, as was Keating.

And then there was Wayne. See what I mean? He could re-write Basel III for the global financial system single-handedly, and the Australian electorate would go 'Meh.' Which is sort of what happened, actually, with the Rudd government's response to the GFC. 'World's Best Practice', and 'Best In Show', by popular acclaim, globally and locally. Yet still I get the feeling that that equates to a collective shrug of the shoulders from the electorate. I'm sure, thusly, Wayne Swan spends his downtime wondering, “Why don't they love me too? What more could I do?”

Well, put simply, Wayne, get a Funny Bone transplant. Sadly, it appears that that's what the punters are crying out for. Some more 'Wicked Wit' to go with their KFC Wicked Wings, as they chow down in front of the 6 PM News each night.

It's not going to happen, though. 'Fiscal rectitude' is Wayne Swan's motto, as opposed to 'Flamboyant Rhetoric'. Such that that is the only reason I can think of for the electorate preferring the $11 Billion Black Holey Roller Joe Hockey, when it comes to Economic Management credibility. He does the 'Fizz! Pop! Whiz! Bang! Whirr!' thing better than Wayne. It's surely not because of his superior economic competence.

Anyway, onto the Banking Package itself, with which I assume you are all well familiar by now. So, a precis of sorts. Long story short, it was a bit like this:



The Curate's Egg


It certainly wasn't one of these:



So, while the Opposition and the Greens talked tough about bringing down measures to curb the outlandish behaviour of the Big Banks, Wayne Swan actually delivered a package. And no, I don't count Joe Hockey's 9 dot points without any supporting legislation as any sort of equivalent substitute from the other side. As Laurie Oakes appeared to also say at the time in Banking on Wayne Swan’s tactics a good bet

As far as the package itself goes, the headline grabber was a ban on exit fees on new mortgages written after July 2011 (although fees will remain on existing mortgages) and a plan to pump another $4 billion into the Residential Backed Mortgage Securities market, which should help improve the pool of credit available to smaller lenders, and which should also hopefully flow through to Small Business as well as home buyers.

As Wayne Swan himself said at the time, “Generally making the market more competitive is just as important for someone who has that dream of owning a small business as it is for someone who wants to buy a home.”

So, what else is in it?

Firstly, the government will set up a feasibility study, to be run by former RBA head Bernie Fraser, to examine ways to make it easier to shift deposits and mortgages, including the introduction of full account number portability, which is something the Greens have been pushing for. Account portability is something that would truly enhance competition and the Big Banks don't really want.

Secondly, the Government will set up a taskforce with the RBA to examine competition reforms around ATMs, with the Central Bank to examine whether the $2 ATM fee is fair and reasonable.

There will also be new regulations to crack down on so-called 'Price Signalling' by the banks (the process by which they make public statements about rate rises and effectively warn each other what they are going to do), and new legislation to crack down on 'unfair' credit card fees, charges and conditions.

Finally, there are a few good old government information campaigns. All new home loan customers will get a mandatory home loan information sheet, and there will be an information campaign to help consumers understand their new rights and responsibilities.

Wayne Swan is also intent on building a 5th Pillar to rival the Big 4 banks, and sees supporting the mutual sector-credit unions and building societies as the best way to do this.

To this end he will encourage the banking regulator, the Australian Prudential Regulation Authority, to fast track the approval of 20 mutuals that want to call themselves banks.

Further, the mutuals will be at the centre of a government campaign to give lenders a sort of stamp of approval, the ‘Government Protected Deposits’ symbol, which will hopefully allow the mutuals to raise funds.

The government will allow banks, credit unions and building societies to issue covered bonds, which are bonds that are secured (or 'covered') by a pool of assets if the bond issuer becomes insolvent. These bonds are seen as a key method for lenders to harness the huge pools of superannuation funds washing through the Australian financial system, and reduce the reliance of lenders on overseas sources of funding.

The Government clearly needed to do something to invigorate the bond market, and it has tried hard to do that. But while the extra $4 billion for the RMBS market will be immediately welcomed, it will of course be a little while before we actually see smaller lenders issuing covered bonds.

Patience is still very much required.

As Wayne Swan said when he released the Banking Package, “There is no 'Silver Bullet' that will immediately fix banking competition.” The GFC changed the sector forever. There is no way we can hope to go back to the way it was during the days of easy credit. Nor should we.

What do you think?

What does Tony Abbott stand for?

As a political exercise, why not begin by jotting down what you are convinced Tony Abbott stands for? It may not take you long.

Don’t feel inadequate if you can muster no more than ‘end the waste, pay back debt, stop new taxes and stop the boats’. But wait, there’s a change in the air. On the last Insiders for the year (which is well worth viewing in full) Tones launched a ‘softer, gentler’ set of slogans: "lower taxes, fairer welfare, better services and stronger borders". Now doesn’t that feel better?

When I wrote a similar piece about Julia Gillard, I looked first at her acceptance speech after election as leader, at her address to the National Press Club and then at her campaign launch speech. I attempted to do the same for Tony Abbott.

First, I searched the Liberal Party of Australia website for his acceptance speech. No matter what search words I used, I couldn’t find it. It must be there, but well hidden.

The best I could manage was an account in the Sydney Morning Herald of December 1 where there was journalist Nadia Jamal’s account of his speech headed I am humbled: Abbott.  Of course newly elected leaders always say they are ‘humbled’, when they are really as pleased as Punch. Read it and see if you can detect the vision Abbott has for this nation; play the video and see if it’s there. Check for the Abbott narrative.

After getting his ‘humbled’ out of the way, he talked about healing wounds, about his ‘stuff-ups’ for which he made a generic apology, and then promised he would be a collegial and consultative leader. He made conciliatory noises about Malcolm Turnbull whom he had just toppled, and then got onto the ETS as this was the raison d'être for his becoming leader, saying ‘‘I think that climate change is real and that man does make a contribution,’’ but added that there was argument about the level of that contribution and what should be done about it. There were several more references to the ETS, the GBNT and Copenhagen, a passing reference to WorkChoices being dead and that while no one would mention it again, Australia needed a ‘free and flexible’ economy, (watch this space!), and still more references to the ETS. He ended with “Oppositions are not there to get legislation through; oppositions are there to hold the Government to account.” The latter reflects his long-held belief in Randolph Churchill’s dictum: “Oppositions should oppose everything, suggest nothing and turf the government out.”

I suppose he was caught by surprise at being elected and that is why his acceptance speech was such a dog’s breakfast, but with his many years in Liberal Party ranks, his supporters might have hoped for passing reference to the Party’s ‘beliefs’. They are there on the website for all to see. To paint a picture of what Tony Abbott might have drawn upon to give his acceptance speech some stature, here they are:

“We Believe...
In the inalienable rights and freedoms of all peoples; and we work towards a lean government that minimises interference in our daily lives; and maximises individual and private sector initiative

In government that nurtures and encourages its citizens through incentive, rather than putting limits on people through the punishing disincentives of burdensome taxes and the stifling structures of Labor's corporate state and bureaucratic red tape.

In those most basic freedoms of parliamentary democracy - the freedom of thought, worship, speech and association.

In a just and humane society in which the importance of the family and the role of law and justice is maintained.

In equal opportunity for all Australians; and the encouragement and facilitation of wealth so that all may enjoy the highest possible standards of living, health, education and social justice.

That, wherever possible, government should not compete with an efficient private sector; and that businesses and individuals - not government - are the true creators of wealth and employment.

In preserving Australia's natural beauty and the environment for future generations.

That our nation has a constructive role to play in maintaining world peace and democracy through alliance with other free nations.

In short, we simply believe in individual freedom and free enterprise; and if you share this belief, then ours is the Party for you.”


Note that even in a statement of its beliefs, the Liberals could not resist a derogatory reference to Labor.

Next, let’s look at Abbott’s campaign launch speech

After a couple of backhanders aimed at Labor, he launched his mantra: “I’m asking for your support to end the waste, pay back the debt, stop the big new taxes, stop the boats and help struggling families.” He then went on to say; “Our task is nothing less than to save Australia from the worst government in its history.” After which the well-worn catalogue of Labor crimes and misdemeanours were trotted out, how the government had ‘lost its way’, and I think for the first time he used the word ‘toxic’ to describe Labor, this time in reference to Kevin Rudd.

Then he spoke of the ‘positive’ things he would do: “The public are asking us to do more than just replace a bad government. They are asking us to restore some sense of honour and integrity to Australia’s public life. We must offer the Australian people a better way. So I say again, if elected a Coalition government will end the waste, pay back the debt, stop the big new taxes, stop the boats and help struggling families and we will do that from day one. (We were glad he reminded us of that). From day one under a Coalition government, the mining industry could do again what it does best: creating wealth and employing hundreds of thousands of Australians without the threat of an investment killing, jobs destroying great big new tax. From day one under a Coalition government, everyone who uses energy – that’s pensioners, retirees, farmers, families and young people – could live without the threat of a carbon tax or an emissions trading scheme that would raise prices, damage industries and cost jobs.”

You will see that all of these reiterate the GBNT theme. Nothing positive there; only countering what he has decided to portray as a negative.

He announced a Debt Reduction Task Force, an economic statement on the Murray-Darling Basin plan, a National Security Meeting to be convened to ‘take back control of Australia’s borders’ along with a call to the President of Nauru, tougher penalties for people smugglers, the reintroduction of TPVs, and a promise to stop school halls ‘rip-offs’ by giving money directly to ‘P&Cs that wouldn’t waste it’.

He talked fleetingly about an emissions reductions fund and a Green Army, business reforms, health reforms, and prudent and responsible stewardship of the nation’s finances. He repeated the mantra: “Under the Coalition, spending will always be less and tax will always be lower than under Labor.”

He then went on to put a little flesh on the bones of his education, health and water policies, said he would reduce bureaucracy, spoke of his PPL scheme, and vowed to break "the cycle of welfare dependency for young indigenous people and others trapped in intergenerational poverty, provided they are prepared to renounce their welfare entitlement in return for a guaranteed job", and promised to "publish all the modelling associated with all the Henry recommendations to foster the tax debate that Australia needs and now must have".

He finished by assuring us that "...no one will accuse the next Coalition government of being all talk and no action", lambasted Labor for a ‘re-election strategy…based on fear and lies’ and an advertising blitz that ‘will be all fear and smear’. For good measure he concluded: “…let’s start, from day one, repaying the debt, stopping the big new taxes, stopping the boats and helping struggling families.”

The party faithful were ecstatic and gave him a standing ovation. In archetypical pugilistic fashion he was taking the fight up to Labor and that’s what they wanted. But where was the vision? Look carefully at what he said and you will see the bulk of it is about fixing what he characterizes as the mess that Labor has created. In other words, he created a straw man, indeed many straw men, and promised to systematically knock them over. He assumes that everyone sees these straw men, agrees that they exist and need knocking down, so he promises to put a bullseye on them all, and knock them over. But if the premise is flawed, so is the reaction.

What does that speech tell you about what Tony Abbott believes in, what he stands for? What sort of Australia is he promising? How inspiring is his vision? Read it and judge for yourself.

Tony Abbott’s pre-election speech on August 17 to the National Press Club also defied discovery on the Liberal Party website, so we have to rely on a report of it in The Australian by James Massola somewhat ambitiously titled Tony Abbott outlines vision for opportunity society.  It is not the whole speech. It contains some of the same material as his campaign launch speech, plenty of condemnation of Labor, and Massola’s idea of vision: “But it was during his unscripted speech, which ran for about 25 minutes, that Mr Abbott was best able to outline his vision for Australia which would help ‘individuals and communities to better realise their better self’. My vision for Australia is not simply that my dreams will be writ large, far from it, my vision is of an Australia where everyone's dreams can be better realised”, he said. “I don't envisage an Australia where people conform to a vision that government has created for them, I envisage an Australia where government helps individuals and communities to better realise their best selves there is a better way.” So there it is, Abbott Vision with a capital V. If this is the extent of his vision, it is not just laughable; it is tragically wanting for a man who would be PM. Yet Massola gave it a tick.

Finally, there was Abbott’s comment after the majority Labor Government was formed, this time taken from the Liberal Party website: “I now rededicate the Coalition to the task of Opposition. I believe that we will be an even more effective Opposition in the coming Parliament than we were in the last one. We want a strong Australia and we want better lives for the Australian people. To the extent that that is what the confirmed government delivers, we will give credit where it’s due. To the extent that it doesn’t, we will hold them ferociously to account because that is what the Australian people will expect of us. I rededicate the Coalition to the task of being a credible alternative government and that will be more important than ever given the inevitable uncertainties of the coming Parliament.” A slight touch of ‘vision’: “…a strong Australia and we want better lives for the Australian people” and more of “ferociously holding the Government to account.”

So that’s it. That’s the vision. That’s what Abbott has in mind for this country.

Abbott’s plan is much, much more about correcting Labor’s so-called mistakes, and replacing Labor’s so-called incompetence with a supremely competent Coalition which of course will always have lower debt and lower taxes.

Try if you will to find a positive Abbott narrative among those public statements; try to indentify what he would do to make ‘a strong Australia’ and ‘better lives for the Australian people’. You’ll have no trouble finding his negativity and obstructionist intent.

Let’s conclude this assessment of what Tony Abbott stands for by focussing on some specific policy areas.

Climate change
George Megalogenis puts it well on page 48 of his recent Quarterly Essay: Trivial Pursuit – Leadership and the End of the Reform Era where he says of Tony Abbott’s attitude to climate change. “Abbott had been a supporter of the ETS before he was against it. He said the science was ‘crap’ but still felt the undertow of the polls dragging him towards a gesture on climate change, so his first act as leader was to promise $3.2 billion in hand-outs over four years to buy emissions cuts. He ran three fantastically contradictory lines. He agreed climate change was happening, while questioning the science. He said Rudd’s scheme was a great big new tax on everything, even although it was revenue negative. And he had his own budget-draining plan to buy reductions in carbon pollution from industry and farmers, while simultaneously arguing that only a Coalition Government could pay back debt and end the waste.”

Abbott realized that what he was saying did not have to be consistent or even true. He could say whatever he liked, make it up if necessary, and get away with it so long as a compliant media allowed him.

Economics
Even a generous assessment of the Coalition’s credentials reveal they are flimsy, despite polls showing the community’s confidence in its capacity for economic management. This is a myth left over from the Howard era. Let’s look at the facts:

The ‘economics’ team
By his own admission, Tony Abbott is uninterested in economics and not once has he made a substantial statement on national economics. He pushes that to Joe Hockey or Andrew Robb. Joe Hockey, who was left holding the baby after Abbott’s reply to the 2010 Budget, himself failed to detail during his National Press Club address the savings the Coalition claimed it had made, and passed the baby to Robb, who then, in his characteristically convoluted way tried to explain what was essentially a con job.

The ‘savings’ charade
The supposed $50 billion of savings were always suspect. No self-respecting economist ever confirmed them; economics correspondents who were supportive of the Coalition declined to show how they added up; even The Australian conceded they were ‘massaged’. At least half were political smoke and mirrors illusions. The $50 billion of savings were simply not there. The contortions through which Hockey and Robb went to try to justify their ‘savings’ were a wonder to behold. They were just not believable.

The campaign costings
Again we saw a Hockey/Robb duo – Abbott was AWL – trying to convince the public that an ‘audit’, done by Liberal Party-friendly accountants, which took the Coalition’s assumptions for granted, were accurate and believable, while a Treasury assessment found an ‘$11 billion black hole’ in them. Rob and Hockey, who could argue the leg off an iron pot, reasoned this way and that about assumptions, but convinced only those who wanted and needed to believe. It was another charade – everybody with eyes to see knew it. Most of the media looked the other way and tossed the black hole off as inconsequential, a misdemeanour that was OK for the Opposition but would have lead to crucifixion for the Government.

The bank interest saga
Joe Hockey has the well-honed skill of finding a way to criticize the Government about interest rates if they go up, and as stridently if they stay the same. His genius allows him to convert any interest rate situation into a lose-lose for the Government. He takes convoluted logic to a new level.

He opportunistically seized on the banks raising interest rates beyond the RBA rate rise to propose his nine point plan which he rushed to present and thereby paint himself as a champion of the struggling mortgage holder, and in the process gazump the Wayne Swan plan that was in preparation after lengthy consultations with the banking industry and the ACCC. Hockey got a tick from several economists despite its rushed preparation; will Swan get the same for his careful approach? After all the fire and brimstone, Joe’s plan seems to have faded into the background, like so many of his half-baked ideas.

It is hard to escape the conclusion that the Coalition economics team is simply incompetent, and at times willing to pull the wool over the eyes of the public with dubious financial contortions.

Paid Parental Leave
Here is another policy area where inconsistency reigned supreme. When in government, Abbott declared such a scheme would be introduced ‘over the Coalition’s dead body’. Then he had an epiphany and decided it was needed by some female friends with whom he had spoken. He mentioned it in his book Battlelines. After election as leader, despite his post-election assurance that he would be ‘collegial and consultative’, he introduced his PPL out of the blue without consulting the party room, and to everyone’s surprise revealed it was to be funded by a tax on business, having vowed there would be ‘no new taxes’. Caught in a trap of his own making, he then promised to reduce company tax by the same amount.

All of these contortions were regarded as amusing by the media – just another of Tony’s thought bubbles not to be taken too seriously, because, after all, he was only in opposition.

In the face of this and other about-faces he has made, it is breathtaking that he has the temerity to castigate the Government if it changes its mind, when he changes his over and again to catch the prevailing breeze, weathervane-style.

Water policy
Here again we see inconsistency. The Howard Government set up the Murray-Darling Commission (now the Murray-Darling Basin Authority) as an independent body to report on the rivers’ future. The current Government allowed it to complete its work, the Basin Plan, publish it, and hold public meetings to discuss its recommendations with stakeholders, independent of Government. When the report was seen to upset irrigators and rural communities, Abbott leapt on the opportunity to condemn the Gillard Government for carrying out exactly what the Howard Government had set out to achieve – a report for discussion among stakeholders. But did you see the media pointing out Abbott’s inconsistency, hypocrisy and opportunism?

What does Tony Abbott stand for?

So there it is. I searched for evidence of the Abbott vision for this country and found just a few motherhood snippets: “...my vision is of an Australia where everyone's dreams can be better realised”. I searched for the Abbott and Coalition narrative and found mountains of negativity, a tiresome recital of the problems that he insisted Labor had created that he would fix. I looked for his positive plans for the nation should he become PM and found a tiny mound. I looked particularly for his reform agenda for crucial areas such as education, health, industrial relations and foreign affairs and found almost nothing. I examined his contribution to policy matters such as climate change, economic management, paid parental leave and water, and found a confusing set of contradictions and in the case of his ‘savings’ and ‘costings’, ineptitude and deception writ large.

Yet when I sought out the media’s response to this exhibition of monumental incompetence, I could find but a sprinkling of occasions when Abbott was confronted by journalists – in a couple of Neil Mitchell interviews on Melbourne 3AW and in the Kerry O’Brien ‘I don’t always speak the truth’ interview on the ABC's 7.30 Report. The media chose to overlook most of Abbott’s crass statements, preferring simply to echo them as if they were valid beyond doubt – ‘The Opposition leader said this’, or ‘Mr Abbott said that’, or ‘Tony Abbott accused the PM of’ - anything that happened to enter his mind at the time, or ‘The Labor brand has become toxic’ whatever that vacuous statement means. And most, particularly News Limited outlets, pumping for a Coalition defeat of Labor, chose not to highlight the Coalition’s negatives, focusing only on any fragment of positivity they could find, any poll that showed improvement in the Coalition's standiing.

How can this nation be governed responsibly while the media seems unprepared to confront the alternative PM and the alternative government with its inconsistencies, its ineptitude, its deception, its paucity of plans, its lack of a vibrant vision and a coherent narrative, its largely obstructionist and negative behaviour, preferring instead to laugh off all this as the quirks of this sometimes eccentric, but eminently likeable Tony Abbott? It is only too ready to challenge Julia Gillard and her Government, as was evident this week in Kerry O’Brien’s final 7.30 Report interview with her.

When will the media and the public begin to turn around Tony Abbott’s oft-repeated remarks about the incompetence of the Labor Party, insisting with as much vehemence as he does, that the Coalition is the most incompetent alternative government in this nation’s history?

What do you think?

They huffed and they puffed, and they haven’t blown the NBN down…yet

 


The above image says it all, really, about the NBN story thus far. There's Big Bad Tony Abbott outside the solid brick house that is the NBN edifice. He, and the 'Three Little Wolves', Malcolm Turnbull, Barnaby Joyce, and Andrew Robb (I've noticed that Joe Hockey has been strangely muted in his criticism of the NBN), have been outside the NBN house, working up a veritable cyclone of hot air, as they bellow, bloviate, and blow very hard to try to 'demolish' and blow the NBN house down.

Yet, inside the house the realisation that the 'Big Bad Wolves' haven't been able to blow their house down...yet, has, at the end of the parliamentary year and after the Structural Separation of Telstra Bill has finally been passed by the Senate and the House, led to much celebration, dancing of jigs and playing of musical instruments. There's Julia in her red top with a nice bow, playing the fife, and Stephen Conroy leading the merriment on a piano, safe inside the NBN house he built himself, brick by brick, while the Crossbenchers who have helped make Julia and Stephen's dream a reality, are joining in the fun too. They really did invent 'A Wolf Spanking Machine', which has seen the Big Bad Wolves of the Coalition go home for Christmas with their tails between their legs, licking their wounds.

Of course, the Coalition has promised to come back again next year, with every grainy, black-and-white photograph of tangled cables on a telegraph pole, and complaints from constituents about every nature strip whose blades of grass have been upset from their gentle resting place beside noisy roads, (hmm, I thought the Nature Strips were the property of the Local Councils not the householders whose houses abut them?), as that naughty NBN gets rolled out across the country.

Also, it appears, that the Coalition, and its confreres who are now in power in various States, have enunciated a new line of attack. They will be going to war with Julia Gillard and Stephen Conroy to fight for the 'Opt Out' principle for NBN customers. That is, they will want to force a decision on every household and business as to whether they want the NBN to come to their place or not. Of course, this will be followed up with a 'ferocious' (that attack dog word seems to be the favourite of the snarling and barking Opposition at the moment) assault on the desirability and 'Cost Benefit' of the NBN to those same people and businesses, from the ever-loquacious, but without a technical leg to stand on, Opposition. What will follow from that, I can safely predict, if they have any success at all, is that if the NBN take-up rate falls substantially, as a result the Coalition will gleefully label it a ‘costly White Elephant’, and a ‘massive waste of taxpayers' money’, yada yada, in the run-up to the next election.

I mean, when you examine from a distance the Coalition scenario, as it would become manifest if you took all the complaints about, and demands for reversal to the pre-NBN environment seriously, then it seems as if the Coalition really do want to return the country to some sort of bucolic ideal, where, as I have mentioned previously in my blog about the Coalition's policy of 'Undergrounding' all the power lines in the country, Australia becomes a place of no Leaf Blowers or Lawn Mowers in the early morning idyll that we experience as we wake up to the bucolic bliss of birds twittering in the trees outside our windows, while we take tea inside and Tweet on our Wireless Mobiles or iPads. No Leaf Blowers! No Telegraph Poles! No Wires!

Which is exactly where I want to take the Coalition Broadband Fairy Story today. We have all seen the NBN raked over (No Leaf Blowers!), until it has almost disintegrated into an infinite number of points of light (which the Coalition still seems to not realise it actually is, as the NBN travels at the Speed of Light effortlessly along the fibre optic cables). No, instead, I believe it's about time we started focussing our attention on what the Coalition's alternative offering for our High Tech future will be. Time we started removing the Vaseline from the lens that has so far only allowed us to see a picture of the Coalition's Broadband future for Australia in a very gauzy light, complete with Sunshine and Lollipops, and Malcolm Turnbull and Christopher Pyne gambolling in Elysian Fields of infinite Wireless and Satellite possibilities.



So, let's take a closer look at the Coalition's Fairy Story about Broadband, otherwise known as its 'Broadband and Telecommunications Policy'. 

Yes, I know, there will be those among you that support the Coalition who will say that I am being unfair to the Coalition and its policy from the outset by calling it a 'Fairy Tale'. Not so. I merely want to let their the policy speak for itself. Let's go to this statement:

“The Coalition's plan will deliver a uniform national broadband network.”

A fine motherhood statement with which no one could disagree. Except, if you think about it, and then think about the mish-mash of modalities that the Coalition states it wants to employ to achieve this 'uniform national broadband network', being HFC, DSL and Fixed Wireless, well, good luck with achieving that uniformity, I say.

The policy then quickly moves on to this aspirational goal:
“...under which 97% of premises are able to be served by high speed networks capable of delivering from 100mbps down (my bold) to a minimum of 12 Mbps peak speed, using a combination of technologies...”

Now, hold on a minute there. This is where the Coalition's policy and Labor's becomes widely and wildly divergent, and it's only the second paragraph of its policy doc!

Firstly, the aspiration is for a maximum peak speed of only 100Mbps, compared to the ALP's 1Gigabit per second! Secondly, it's all downhill from there for the Coalition's aspirations for your broadband experience. All the way down to 12Mbps. Not only that but the advocacy of Copper line-powered HFC and Pair Gain technology by Malcolm Turnbull is a crock, and means that your downloads might come in at that speed, but your uploads will never travel that fast. As this ZDNet article eloquently explains

So, no e-Health for you, Mrs Kafoops, in Outer Anywhere, Australia. Which, by the way, is just one of the potential uses for fast uploads of data.

“Let's turn it upside down. Let's add it up.” Malcolm Turnbull, November, 2010.

So, let's do that for the Coalition's Broadband policy.

Firstly, based upon the assumption, as demonstrated by the Opposition in Question Time, that the Coalition does not like unsightly cables being strung from ‘telegraph pole to telegraph pole’; also, considering this in concert with its Energy policy, which advocates for all Power Lines in Australia to be 'Undergrounded', we can draw the simple conclusion that the budget for the Coalition's Broadband and Telecommunications policy, which would by necessity be incorporated with and added to the budget for its Energy policy, would without a shadow of a doubt smash the estimates for the cost of the NBN.

The estimate mentioned 14 years ago for power undergrounding, in a paper prepared for the Parliamentary Library of Australia for John Howard, was a 'conservative' figure of $50 billion! 

Thus, I think you could safely say that that figure would now be closer to $75 billion. Also, the party of Private Enterprise and the individual-level Contractor and Sub-Contractor, would no doubt have to subsidise the concomitant roll-out of underground power and cable (that is, if they wish to remain true to written down, therefore 'gospel' official Liberal Party policies). Which would be going to areas that don't already have good enough broadband coverage, or, indeed, underground power (which, as you can see from the ZDNet article is quite a large swathe of Australia), so as to achieve the stated aim of broadband service to 97% of Australia. This subsidy would have to occur because Private Contractors are not charities, and would not want to put in the infrastructure to areas they consider incapable of providing a sufficient return on their investment: areas which begin in the Regions beyond the Capital Cities and go from there into the Rural and Outback areas of Australia.

I can see this method of having to pay for the bulk of the broadband roll out from the national Budget, as the eventual outcome. The only other alternative is for the Internet infrastructure suppliers/retailers to incorporate their costs into the charges they ultimately impose on their customers, and also use their limited shareholder funds to supply the service, on behalf of the Coalition – which is what the Coalition proposes. However, I can't see how these costs would not end up being considerable, and beyond the private sector's means, for those areas/customers outside of the most profitable markets.

The Coalition's policy document speaks about imposing a 'price cap' for internet services. Which leads me to ask myself: 'Where is the money going to come from then to cover the ISP's costs to supply services to unprofitable areas, which are above the putative Coalition government-imposed 'price cap'?' I suppose at least this part of the policy acknowledges the fact that the 'real' cost of the service would end up being politically 'toxic' for the Coalition if they allowed it to flow through to the consumer. So a hit to the national purse, with cutbacks imposed in other areas, in order to cover up uncomfortable realities, would instead be favoured and is usually favoured by weak-kneed neo-liberal political parties unwilling to make their stated ideology a manifest reality, especially when it concerns a direct hit to the hip-pocket nerve of the electorate.

Costs which don't even factor in extra charges to the consumer to provide the Internet into premises at the speeds promised, as the Coalition policy does not advocate for Fibre To The Home (FTTH), but Fibre To The Node (FTTN). I think it gets around this contradiction between the publically enunciated policy of FTTN by stating on page 15 of the policy document an aspiration to eventually have FTTH, as and when private suppliers and their shareholders decide that the time is right to allow it for their customers! Just don't hold your breath waiting for that day! On page 16 it says it wants this done by 30 June, 2014. I think that sounds ambitious, especially if you are relying on private sector companies and their shareholders to OK funds for the massive undertakings that would be necessary to satisfy the Coalition's 97% aspirational broadband coverage goal.

However I think I have found the nigger in the woodpile that would be the Coalition's 'get out clause': “We believe the right way forward to high speed broadband is through the operation of the market, stimulated by the initiatives set out in this policy document. Government's role should be that of addressing instances where private investment fails to deliver, not to replace the private sector with public monopolies. To ensure it does address those failures, government should use taxpayers' money wisely and in a carefully-targeted way – not put it recklessly at risk.”

In other words, the Coalition plans to make a show of private sector construction of its broadband network, but the bulk of the funding will also come from government, if it's to be brought in within the stated time frame, not subject to the whims of shareholder and board approval and the time lines. So, you could say that what the Coalition policy boils down to is public funding of the private sector, in the main. Hmm. So, fine sounding words in the public domain, but in their quieter moments, in the policy documents, the Coalition spells out the truth. That is, a Coalition government would provide a substantial amount of the necessary funds, just like the ALP government is now. The only difference is the Coalition would carve out a slice for the private sector to fund its works, using already existing private infrastructure, in order to save some money while the broadband network is being constructed, but ending up with a second-rate network, as opposed to the ALP completely funding it, then selling it to the private sector after a state-of-the-art network has been constructed. The motto of the story being: 'You get what you pay for.'

I'd also like to take this opportunity to look at a technical aspect of co-locating power lines and fibre-optic or copper broadband cables underground, if that truly is the intention of the Coalition. Otherwise there would just have to be more 'unsightly' cables strung between telegraph poles, would there not? And that would make the Coalition hypocrites, would it not, for complaining about the ALP's NBN cable roll out on those same power poles?

Thus, “A major issue is safety. Traditionally telephone cables are sunk at relatively shallow depths, and high voltage power lines are sunk much deeper. Currently different cables are also buried on different alignments in a street, and the organisations which dig up streets and footpaths from time to time (Oh no! What about the 'Nature Strips'!?!) are familiar with these conventions. If high and low voltage cables were encased in a common conduit or tunnel, the risks of fatal accident would be much greater.

“A second and less alarming objection is of a technical nature: that arcing and other problems could occur between the two types of cable. Particularly strong sheathing might offset some of these difficulties, but only at considerably increased cost.”


That excerpt, except for my mid-paragraph intervention, was from the Australian Parliamentary Library document linked to above, and just goes to show, yet again, the hypocrisy that lies at the heart of the Coalition's argument about the ALP's Broadband policy cost and its modality of construction. That is, the Coalition policy would cost more, be just as disruptive to people's nature strips, and probably end up being strung from telegraph pole to telegraph pole too, as to put it under the ground with the underground power would be prohibitively expensive and technically tricky and also expensive to find a satisfactory way out of. Now, as the Coalition seem to be allergic to the concept of Public Debt to fund national infrastructure, unless it can be paid for out of a Surplus Budget, then I can't see its utopian policy ideal ever becoming reality, either within its stated time frame, or ever, really, because of how much it would cost. The Private sector would also have trouble raising money in the current global economic climate. In other words, the Coalition's Telecommunications and Broadband policy just doesn't survive scrutiny when, “You turn it upside down. When you add it up”, it's a Fairy Story to be retailed to the gullible 'mob'.

What do you think?