Your vote is valuable


Over the past couple of months, Turnbull, Shorten, Di Natalie and others have been attempting to convince you that they are worthy of your first preference vote. The usual claim is that your vote is valuable. Guess what — it is. Every first preference vote cast at the election on 2 July is worth $2.62784 to the political entity that gets the vote (provided certain conditions are met). Ironically, the ‘value’ of your vote is indexed every six months to the CPI — which is more than the politicians are willing to do for Medicare rebates for doctors’ visits.

Given that 16,295,463 of us (as at 30 June 2015) will vote this weekend, that is around $42.8 million that will be taken straight from the taxpayers’ pocket and given to political parties, with no strings attached. Of course those that convince more of us to vote for them will get more of this largesse, which probably explains why it is rare to see members of political parties running the pub raffles or fundraising at community events — they don’t need to.

Public funding of political parties in Australia was ‘invented’ by a New South Wales ALP member, Rodney Caviler, who now admits it was the biggest mistake of his life. While originally intended to be a method for anyone who felt the need to stand up and represent a community in parliament to re-coup their costs in running for election (within an upper limit cap), it is now a free-for-all where the money is usually given straight to the political party’s head office with no strings attached.

The reality is that the major parties have no real need for branches and membership fees: the majority of their costs are met by public funding and donations from corporate sponsors. This gives them a large advantage over smaller parties and those who are trying to establish a party. The major parties have the financial ability to get their message out to a far greater extent because they can afford the research, preparation and production costs that this type of marketing requires, which in return ‘earns’ more votes at the next election. The Greens (probably the next largest political party in Australia) claim that almost all their donations are from individuals and the value is nearly always under $500, although they would also receive public funding.

On 23 May 2016, ABCTV’s 4 Corners program devoted an episode to political donations in Australia. The program included interviews with corporate donors, former party fundraisers and the Chairman of the NSW Electoral Commission, Keith Mason QC, who at the time was withholding $4.4 million from the NSW Liberal Party due to non-disclosure of donor information relating to the 2015 NSW State Election. Mason was asked:
How important is it, in your view, to the proper functioning of democracy that ... that donors are open and transparent?

KEITH MASON QC, CHAIR, NSW ELECTORAL COMMISSION: It, it, it's really vital. And it's equally important — ah, perhaps some would say more important — to make sure that, that representatives in government respond only to the, the voting decisions; not to corrupting decisions of, of undisclosed financial donations.
The donations in question were sent to the Liberal Party through a claimed third party in Canberra known as the Free Enterprise Foundation.

Former Liberal Party Federal Treasurer Michael Yabsley was also interviewed by 4 Corners and suggested a return to community fundraising rather than corporate donations would be a good thing for our democracy:
MICHAEL YABSLEY: Now, you know, the political parties — and you can hear it now: they'll be saying, "Oh, you know, we'll have to do sausage sizzles and, and lamington stalls."

In terms of the health of democracy: that would be a damn good thing, if that's how fundraising needs to take place. Far better to take the fundraising to the sausage sizzles, um, than, than some sort of, um, um, arcane process around a boardroom table.

QUENTIN MCDERMOTT: So back to the future?

MICHAEL YABSLEY: In, in many respects, ah, I'm, I'm all for it. It would be a very, very healthy thing for democracy.
In the last week, the world has found out that asking electors for their opinion doesn’t necessary get the answer the politicians expected. The referendum asking if the UK should leave the European Union (EU) was an unexpected victory for those that wanted to leave. The proponents of the leave cause were the ‘right wing’ of the Conservative Party, led by former London Mayor Boris Johnson and the ultra-conservative United Kingdom Independence Party (UKIP). Interestingly, The [UK] Spectator magazine noted in 2014 that Prime Minister David Cameron was leading his ‘conservative’ MPs on by forcing through
… the EU referendum bill — originally introduced in a panic by Number 10 as a symbolic measure to unite the party and highlight Labour and Lib Dem opposition to giving the British people a say on Europe
Well, that political move ended well. The current resident of ‘Number 10’ resigned the day after the Referendum, admitting the failure of his ‘remain’ campaign.

It could be argued that Abbott tried the same thing with the same sex marriage plebiscite in Australia. He pushed it out hoping that it would unite his party and highlight the lack of traditional ‘morals and ethics’ of the ALP and Greens, possibly something he could capitalise on at the 2016 election.

At the time Abbott came up with the plebiscite proposal, the Australian Electoral Commission estimated the cost of the special plebiscite at close to $160 million. The AEC helpfully publishes the cost of all federal elections since 1901, so the estimate is readily verified. Assuming a public vote is necessary to determine the marriage equity issue (which legally it isn’t by the way — the Howard Government inserted the condition that marriage is between a man and a woman into the Marriage Act in 2004), the referendum could have been run in conjunction with the current election campaign. The cost estimate for that scenario was around $44 million. Turnbull (who claims he supports marriage equity) is still planning on the plebiscite which he now claims is non-binding — so we pay the money out and his side of politics (at least) will vote according to their individual personal beliefs. Turnbull is effectively pouring $160 million of your and my money down the drain in what could be described as a vain attempt by his predecessor to hold his political party together.

And before we conclude, here’s another thing to consider. The election campaign was eight weeks. The ALP campaign launch was at the beginning of week 6, the Coalition campaign launch at the beginning of week 7. Considering that the timing of the election was picked by the Coalition, why would they leave it so late to ‘open’ their campaign? The reason is simple: until the campaign launch, the travel by the Prime Minister, Leader of the Opposition and most other politicians is paid for by you and me — not the political party. That’s right, you and I are paying for Malcolm and Bill’s ‘Magical Mystery Tours’ until they launch their campaign!

This either makes the ALP stupid or better off than the Coalition as they will be paying for Bill’s ‘Magical Mystery Tour’ for an additional week. However, there is no redeeming value here in the ALP’s actions. It’s similar to suggesting the Olympics being ‘opened’ on day 7 is better than performing the opening on day 9 of the 10 day competition. It’s not logical and it only makes sense if you support the current ‘norm’ of politicians being able to take what they believe is necessary from the public purse, without worry about privacy or the funding constraints imposed on the health, education and support mechanisms for members of our community in need; not to mention an interesting definition of morals and ethics.

A software company (Parakeelia) wholly owned by a political party charges MP’s for the (mandatory) use of its product, the charge is paid by the MP from taxpayer funds and the profits are returned to the political party. Also, the workings of the Free Enterprise Foundation only became known because the NSW Electoral Commission decided to use the tools they had available to force the details of how hundreds of thousands of dollars ended up in the NSW Liberal Party’s bank account. Political parties are paid for every vote they receive. All of this is apparently legal. It’s not hard to see who writes the rules and who they benefit.

Probably, the worst abuse of power is that all the donations (provided they are over the generous threshold of $13,000) will be released to the public — 24 weeks after the election. You and I have little influence when large organisations can write cheques for thousands to reinforce the policy that they want to get over the line (and the major parties have the marketing skills, techniques and funding to sell ice to Eskimos). When will this stop?

While we have a two party system, these arrangements will continue into the future. The reality is that in the majority of the electorates in Australia, either an ALP or Coalition candidate will be elected. It has been demonstrated across Australia and around the world that a parliament without a majority forces people to work together, which usually creates a better result. New Zealand has worked in this manner since the 1990’s and most western European countries have worked in this way for far longer — without the revolving door to the prime minister’s office that Australia has endured. While no one can tell you how to vote on 2 July, remember your vote does have some value — the person or party you choose to give you first preference to receives $2.62. Make sure the respective political machine earns it.

What do you think?
Should WE pay for political parties’ campaigns?

Should parties be required to fund all of their costs from when the election is called (or when parliament is dissolved), not just after their ‘official’ launch?

Let us know in comments below.

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Turnbull’s Medicare backflip — or is it?


Turnbull recently announced that his government, if re-elected, will not change any element of Medicare. It came in response to Labor’s campaigning that Medicare was under threat, that it would be privatised under a Liberal government. The general media response was to take Turnbull at his word and that Labor’s continuing use of the campaign was no more than a ‘scare campaign’ now based on a ‘lie’. But let’s take a closer look, including a careful examination of the words he first used.

First we need to understand Medicare. Although we associate Medicare with medical services, it actually does not deliver a single such service. In essence, it is no different to private health funds insofar as it provides cover for the costs when people purchase medical services — or as it is sometimes described, a ‘universal health insurance scheme’ and we pay the Medicare levy as our insurance policy payment. Of course, it has ‘bulk billing’ which allows that medical services, if provided at a cost stipulated by Medicare, can be provided at no cost to the ‘consumer’. It is basically a payment system. The government controls policy and sets the ‘prices’ it will pay for services and also determines what services are included in the Medicare benefits schedule (which is the other work of Medicare staff, advising on those prices and services). There have been policy decisions over the years that provided additional funding (‘incentives’) to service providers, such as pathology and diagnostic imaging, if they bulk billed.

So it is similar to government provision of pensions. Government sets the policies but provides only a payment and no direct service. By way of comparison, think about the Bureau of Meteorology or the Australian Bureau of Statistics: government again controls policy but its funding of those bodies is for the direct provision of a service.

Back in February it was revealed that a task force had been established within the public service to examine the Medicare payment system, including the ‘commercial possibilities’. The government described this, however, as only the ‘back office operations’ of Medicare. From the description of Medicare, you will see that the payment system is not a ‘back office operation’ but is the core business of Medicare.

The proposed change was described as:
… part of our commitment to ensuring the government embraces innovation and is agile and responsive to changes in the digital economy.
No doubt you will recognise the words ‘innovation’ and ‘agile’ and their obviously intended link to Turnbull’s previously announced national innovation agenda. The implication being that we should support the proposed changes to Medicare as part of a much broader agenda in the national interest.

And:
Any outsourcing would only apply to back office operations and the administrative actions of making payments to individuals and providers. It doesn’t include setting fees or rebates and it doesn’t have any impact on the cost of health care, other than it may result in services being delivered more efficiently.
The latter are Turnbull’s words in parliament and remember this was only four months ago. He wasn’t denying it then.

Labor attacked then and continued the attack that the Liberal government did not support Medicare. It had plenty of ammunition including the continued freeze of Medicare rebates (now continuing until 30 June 2020) and the cessation of incentive payments for bulk billing to pathology and diagnostic imaging services. For the election, Turnbull announced that stopping the incentive payments had been put off for six months, will be reviewed, and that rents for pathologists will be reduced. How he can achieve the rent reduction is a vexed question — surely a Liberal government would not wish to interfere in the market in that way! All Turnbull has done is remove it temporarily while the election takes place. He has not said it is off the table permanently.

Labor’s attack was obviously gaining traction in the electorate forcing Turnbull to come out and say:
It will never, ever be sold. Every element of Medicare services that is being delivered by government today, will be delivered by government in the future. Full stop.
Apparently this was a ‘captain’s call’ by Turnbull but still Labor wasn’t convinced.

And I had to ask myself why did he spell out ‘every element of Medicare services that is being delivered by government’. As far as I can glean the only services not delivered by Medicare, but associated with it, are some registries of diseases kept by non-profit organisations in the medical sector. Or did he mean that payments are not a ‘service’? Or when he referred to ‘government’ was he limiting it to the ministers in his cabinet who govern the country? — in that case, what the government ‘delivers’ is the policy of Medicare. He was so specific in his statement that it hints at obfuscation.

Also he claims that these services ‘will be delivered by the government in the future’. What does that clause actually mean? It doesn’t preclude the possibility that payments could be contracted out: that is still a ‘government service’ but it has simply asked someone else to do it. Consistent with Turnbull’s statement it is not ‘selling’ the provision of Medicare payments, merely hiring someone else to undertake the task. Remember he is a trained lawyer and understands the use of words.

Subsequently Turnbull had to clarify his meaning and spelled out that payments would not be outsourced and upgrading of the payment system would take place 'within government'. The fact he was forced to do so emphasises that his opening explanations were less than clear but more importantly not convincing the electorate.

As Labor initially continued the attack, despite the denial, Turnbull said that Labor was ‘peddling an extraordinary lie, so audacious it defies belief’. Surely it shouldn’t defy belief within the Liberal party: after all they used a similar tactic regarding Gillard’s words about a carbon tax.

Turnbull also made a point of saying that the issue had not gone before cabinet and, therefore, there was no government decision. However, when Labor made an FoI request on the issue it was denied a number of documents because they involved ‘briefing the minister on a submission which is proposed to be submitted to cabinet’. Clearly the public servants had been preparing briefs and submissions on the issue: that doesn’t happen without someone in cabinet knowing about it and such submissions to cabinet are coordinated by Turnbull’s own Department of Prime Minister and Cabinet. So Turnbull’s nit-picking that the issue did not go to cabinet was a little disingenuous.

Although the task force seems no longer to be operating, Labor also points to a Productivity Commission report requested by Treasurer Scott Morrison:
… to review all aspects of human services delivered by government, including community services, social housing, prisons, disability services and Medicare.

The terms of reference include examining ‘private sector providers and overseas examples like the United States’ for alternative service delivery models.
One could ask why the United States is specifically picked out as an overseas example. If the government wished only to improve efficiency but retain services within government, it could have listed a few European countries as examples for study. No, looking to America, with its heavy emphasis on the private sector, is clearly indicating the model the government wants.

I still question Turnbull's stronger dismissal of Labor's argument. If payments by the Department of Human Services are outsourced on an American model, it would become logical in the future to also outsource Medicare payments — we already see Centrelink and Medicare in the same shopfronts and it would make sense for staff to have access to the same payment system on their computer screens. Would such an approach still be 'within government'? — it could, simply by fully moving the Medicare payments system to the Department of Human Services.

Whatever else may be said, Labor achieved its purpose and forced Medicare to front and centre of the election debate. For a while it moved discussion onto its favoured ground forcing the Liberals to respond with border security and turning back boats and revealing information they normally claim is a secret operational matter. Yes, when it comes to an election operational secrecy no longer matters!

Turnbull, as are many politicians, is a trained lawyer and knows how to choose his words carefully. He knows how to avoid outright lies but also how to avoid the truth. He knows how to say only what he wants to say and avoid adding any flourish that may reveal more than he wishes. The fact he was forced to change his words does imply that he was less than truthful in his initial statements or, at the least, was attempting to keep his options open. And perhaps even his stronger denial still has an element of keeping his options open but I leave that for you to think about.

What do you think?
Let us know in comments below.


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Your call is important
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To paraphrase, hell hath no fury like a politician scorned. Dennis Jensen, MP for the seat of Tangney, was not preselected by the Liberal Party to recontest the seat in Parliament. He is running as an independent. Jensen recently claimed Liberal MPs use database software to profile constituents and decline requests for help from decided voters, even their own supporters. The system is apparently called “Feedback”.
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Your call is important


To paraphrase, hell hath no fury like a politician scorned. Dennis Jensen, MP for the seat of Tangney, was not preselected by the Liberal Party to recontest the seat in Parliament. He is running as an independent. Jensen recently claimed Liberal MPs use database software to profile constituents and decline requests for help from decided voters, even their own supporters. The system is apparently called “Feedback”.

Let’s be realistic here, Feedback is a form of Customer Relations Management. It the same concept as you scanning your ‘Woolworths Rewards’ card at the supermarket or disclosing your frequent flyers number when making a travel booking. Companies use this information to target their information to convince you to purchase more from them, rather than their competition. To convince you to allow them to track your purchases, there is a reward of some form. It could be a discount on your petrol purchase if you spend a certain value in the supermarket, a ‘free’ flight from Sydney to Melbourne or access to a marketplace where they offer various trinkets (sorry ‘quality merchandise’) for the points you have accumulated.

That is why if you do use a Woolworths Rewards card, you occasionally get emails with ‘specials just for you’. It also explains that if you are searching on the internet because you need to purchase a new vacuum cleaner, all the advertising on the internet sites you visit for a while afterwards seem to have advertising for vacuum cleaners or retailers selling vacuum cleaners. Basically, it’s profitable for retailers and manufacturers to pay for a system to track your interest in various items and present options to you — hopefully convincing you to purchase their item rather than the option presented by the competition. Rather than sticking an ad on the side of a bus and hoping someone who is in the market sees it, they target ‘qualified’ consumers.

It’s the same with ‘Feedback’. The Liberal Party tracks your interactions with them. So, for example, if you choose to write a letter to Immigration Minister Dutton protesting at the inhumane treatment of refugees in the concentration camps located on Manus Island and Nauru, your name and address details together with some information on why you contacted the Minister will be recorded on ‘Feedback’. Now, say you live in a seat that the Liberal Party deem to be at risk — either one of theirs they think they will lose or one held by another party they think they can win — they use this information when the election is called. The system will ensure that the ‘tough on border protection’ personalised material is mailed to others around you but you are more than likely to get some marketing about (again for example) how some grant to an Indigenous community is assisting them to break the poverty cycle.

The logic is simple. Sending you a letter boasting how tough they are on border protection would in the normal course reinforce your existing opinion of the Liberal Party and why you would not vote for them. The alternative on a ‘closing the gap’ initiative would, in the opinion of the marketing experts, demonstrate to you that the Liberal Party does have a concern for the standard of living of those that are less well off in the society we live in and make you more likely to vote for the Coalition.

If you’re an ALP member and read this far saying ‘we wouldn’t do that’ — well you’re wrong. The ALP version of the customer management software is called ‘Campaign Central’ and the same decisions are made by a different group of marketing experts for exactly the same reasons. The ALP purchases a third party solution (in other words, someone else develops and sells a customer management system which is probably customised for the ALP’s needs). An internet search on the ‘Campaign Central’ suppliers name, Magenta Linas, has their official site at the top of the listing.

ABCTV’s 7.30 program reports:
Feedback is owned by a company called Parakeelia, which is wholly owned by the Liberal Party.

Its directors include federal party boss, Tony Nutt, and former minister, Richard Alston.

Former Melbourne Lord Mayor and Liberal figure Ron Walker is listed as a major shareholder on ASIC documents.

Mr Walker told 7.30 that was a mistake and he was involved in the company's establishment but resigned in December 2002.

He said party figures confirmed to him he had resigned, and his remaining on the company documents was an error.
There also doesn’t appear to be a website for the company which is strange considering the company writes software and apparently understands how to market to potential customers.

Jensen claims that he was ‘requested’ to pay $2500 to Parakeelia along with all other Liberal MPs. It is alleged that usually the payment comes from the funding provided by the parliament for the operation of the Member’s electorate office. The company, wholly owned by the Liberal Party, then provides software and training to electorate office staff on the operation and data mining abilities of the system to determine the political preferences of those who contact the electorate office. The electorate office staff are instructed to assist those who are more inclined to be an additional vote for the Coalition to a greater extent than those the system determines would vote for (or never vote for) the Coalition anyway.

So we have federal MP’s being told to use a particular software system to manage enquiries to the electorate offices that has been designed and developed by a firm wholly owned by the political party the MP represents. Furthermore, the MP is told to use taxpayer funds to make the ‘mandatory’ payment to use the system. While it’s probably legal and some software to manage your customer relations is probably more efficient than going through paper files to see where you are at — that’s not all. It seems that Parakeelia is the Liberal Party’s second biggest source of funds.

From Fairfax:
Last financial year, Parakeelia transferred $500,000 to the federal Liberal division, making it the party's second-biggest single source of funds. The year before it came in fourth with $400,000; before that $200,000.
While it all may be legal, what part of it is morally or ethically correct?

Gabrielle Chan wrote an opinion piece in The Guardian recently that commented on the morals and ethics of the Liberal Party owning Parakeelia and then accepting large donations. She also points out that during the current election campaign you can meet the ALP Shadow Minister of your choice for a ‘measly’ $10,000. Tony Windsor (candidate for the federal seat of New England currently held by the Nationals Leader Barnaby Joyce) has released the records of political donations by a mining company to the Nationals around the time the Coalition government was trying to expunge legislation relating to water use. The mining company rejected the allegations pointing out their (publicly reported) donations to Labor were actually higher than to the Nationals since 2011. While it may be numerically accurate, that’s hardly the point is it?

While Dennis Jensen dumped on the Liberal Party over the use of Feedback, to be honest his motives were not exactly honourable:
Jensen said: “Labor is no better. The company they use for Campaign Central doesn’t donate to the party but they use their tool in exactly the same way.”

Jensen complained that since he lost preselection he no longer had access to the Feedback database.

“The fact they pulled this from me, and the Liberal candidate will now have access to it, tells you everything you need to know about the extent to which it is a tool for constituents versus a tool for party political purposes,” he said.

“The taxpayer paid for my constituents’ information to be put into Feedback and yet the Liberal party and Parakeelia think they can pull it from me.
Clearly there is some information in Feedback that Dennis Jensen ‘needs’ or ‘wants’ to give him what he believes to be a good chance of retaining his seat in Parliament as an independent. It is probable that the information isn’t how his office processed his electorate’s gripes with government services or payments.

Under federal law, donations to political parties under $13,000 do not have to be disclosed to the authorities. During May 2016, the Liberal Party in New South Wales finally provided a list of donors to the NSW Electoral Commission after the Commission withheld $4million in taxpayer funds ordinarily given to political parties after an election based on the votes they received. The dispute was over the bona-fides (under NSW law) of some donors who chose to provide funds through a related identity to the political party totalling some $700,000:
Arthur Sinodinos, the party’s treasurer and chairman of its finance committee at the time, has denied knowing that a “substantial” amount of the $700,000 donated by the foundation had come from property developers.
Arthur Sinodinos is the current federal cabinet secretary and while no ICAC corruption finding has been made against him, ICAC has yet to release its final report.

When the presumptive prime minister stands behind a lectern on the night of 2 July, he will no doubt tell us all that he will work for all Australians. That may well be the intent, but while anyone can buy access to a shadow minister for $10,000 or Liberal Party MP’s have to spend $2500 of taxpayer funds (provided to run their office) purchasing a licence to a particular piece of software owned by the Party’s head office as well as clearing donations through related entities, there is going to be some doubt as to who they really represent.

It seems that there is a competition between political parties for donations so we all can be bombarded with the respective travelling roadshows and glossy advertising come election time. While the particular winners in the 2016 ‘campaign arms race’ may claim to represent us all, the acknowledged acceptance of donations gives the impression that the donors interests will take precedence — even if the politicians personally are the model of independence, morals and ethics.

The bigger problem here is politicians and political parties are exempt from privacy laws. When you tell your local MP that Centrelink has miscalculated your entitlements, Child Support has misunderstood your circumstances, the Tax Office is picking on you or anything else that is somewhat personal, according to Jensen the information is apparently punched into the customer relationship management system, regardless of it being Feedback or Campaign Central. It stands to reason that political operatives employed by the party also have access to the system and its cross referencing to the electoral roll — otherwise how would those personally addressed missives get to you so quickly after an election was called (and the one that you get is different to your neighbours)?

The popularity of the ‘frequent flyer’ type customer relationship schemes for airlines and supermarkets is undoubted and we all happily give up some privacy for the potential free flight or $10 off our grocery bill. It seems not to matter to most that using the pretty card will disclose that they regularly fly from Brisbane to Sydney or buy a particular brand of Corn Flakes. Really, while the information may be useful for the business (it needs more seats on the planes or to keep a particular brand of Corn Flakes in stock to keep you coming back), some of the information given to MP’s when they are asked to help you is somewhat more confidential, and the information is shared with the political party’s headquarters without your knowledge or approval.

Jensen claims:
"It was a very clear understanding that there's Feedback training provided to staff members and basically the training is to use it as a database politically rather than to assist constituents," he said.

"Indeed, the instruction given by Feedback trainers is if there's not a vote in it, don't do it."
It seems your call is important – as your call will tell the politicians your social grouping, your politics, your belief system, maybe your income and determine if they really do give a damn about your problem.

We elect Members of Parliament to represent us without judging if we are on their side or supportive of their financial donors. If ‘computer says no’ and that leads to nothing happening to assist you, there is a problem.

What do you think?
Do you think that we are well represented by our politicians?

Is there a problem with Parakeelia donating funds to the Liberal Party?

Let us know in comments below.

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The tale of two Daleks



Good Daleks are hard to find. They’re expensive. But for the Treasury and the Department of Finance, no cost is too high. So they spared no expense in their search for reliable Daleks that could repeat their messages tirelessly. They had hoped to find some with a rudimentary knowledge of economics and some understanding of finance, but had to settle for ones that at least could recite mind-numbing messages repeatedly and consistently.

After a long search, and after discarding some defective ones that seemed incapable of learning their lines, they settled on DM and DC as their primary Daleks, and KO’D as a trainee.

DC had had previous experience in finance, and had been programmed so often to repeat the same words and phrases that he needed no further programming. He was brilliant. No matter what the question, he would repeat the same mantras and catchphrases with his inimitable accent, which had an insistent Germanic tone to it. Indeed, he was so good that he became a tutor for DM who previously had been used in Immigration. DC tried to tutor KO’D, but gave up – she was too inclined to go off-message.

When DM was in Immigration, he had been programmed to repeat ‘Stop the boats’; ‘We’ll turn the boats around when safe to do so’; ‘We don’t discuss on-water operational matters’; ‘This government is not running a shipping news service for people smugglers’; ‘We are running a military-led border security operation which is stopping the boats’; and ‘We’ve taken the sugar off the table’.

When he was used in Social Services he would repeat: ‘The age of entitlement is over’, a mantra used by another Dalek, discarded because he was past his expiry date and had been exported second-hand to the US. It must have been an oversight, but DM was not programmed to label people as either ‘lifters’ or ‘leaners’.

The programmer of these Daleks was so skilful that they always repeated the same phrases, word perfect, again and again and again, so much so that anyone remotely interested in politics could recite them by heart. Some voters, too wedded to political discourse on TV for their own good, slowly became obsessive-compulsive, and sat in their corner of the psychiatric ward muttering the lines they had heard so often. “Jobs and Growth’ was so imprinted that it was impossible to erase this mindless utterance. Every time the TV was turned on, there were the Daleks regurgitating their lines, over and over, monotonously, word perfect.

What’s more, they were carefully programmed:
  • to talk quickly, as if firing verbal bullets’;
  • to talk loudly;
  • to talk incessantly;
  • to repeat their words over and again;
  • to talk over their interviewers, and ’never take a breath’;
  • to avoid answering questions they didn’t like’; and
  • to answer such questions with “I don’t accept your characterisation".
The programmer guaranteed that with such tactics it would be impossible to ignore them, impossible to escape them.


Joseph Goebbels knew that if you told a lie often enough, the people would eventually believe it. What’s more, he knew that the bigger the lie, the more the people would be drawn to it. The Dalek programmer knew this too, so it was of no consequence if the words he programmed into the Daleks were wrong, were untrue, were senseless, or had no meaning, so long as they served a political purpose.

Any new device needs testing, so the programmer got DM and DC together to try them out with some talented ABC interviewers, Leigh Sales and Michael Brissenden, who took it in turns to see if they could trip them up.

Leigh Sales began by trying to catch DC off guard:

LEIGH SALES: Against the backdrop of the campaign, Australia has just posted the slowest wage growth in decades. Between that, low inflation, low productivity and a stubborn deficit, do politicians need to level with Australians and say to them that they're unlikely to continue enjoying rising standards of living?

DC: Well our economy's an economy in transition. We're dealing with global economic headwinds, we're dealing with lower global economic growth and we're dealing with much lower global prices for our key commodity exports and that is of course why it is so important that we continue to implement our plan for jobs and growth. And, I mean, if you look at the results that we've achieved so far, the economy is growing at three per cent - higher than any of the G7 economies, double the rate of Canada, employment growth is strong, the unemployment rate at 5.7 per cent is not as low as we would want it to be, but it is much lower than what had been anticipated when we came into government in 2013. So we've got to keep heading in the same direction, we've got to keep implementing our plan for jobs and growth, including a more competitive enterprise tax rate.

Head spinning, she turned to DM:

LEIGH SALES: You talk a lot about your ‘plan’; the electorate still doesn’t understand what it is:

DM: The budget is an economic plan to ensure that we provide for growth and jobs to drive this transition that is occurring in our economy.

Australians know that our economy is transitioning and they know there are great risks and threats to it. This budget is the economic plan, which will support that growth that supports those jobs by backing in the investment that is needed to make it happen.

Michael Brissenden jumped in to chance his arm with DC:










MICHAEL BRISSENDEN: Alright. On the broader economic policy issues, what exactly did Treasurer Scott Morrison mean when he said the government may have to ‘recalibrate’ its policy mix after the election?

DC: Well you know, obviously we have a very clear national economic plan for jobs and growth but as you know, we have always - as we have done in the past and as we continue to do moving forward, we'll always make judgements based on the circumstances as they evolve to ensure Australia's…

MICHAEL BRISSENDEN: So everything could be back on the table?

DC: No, that is not right. I don’t accept that characterization. I think that everybody knows that we are focused on implementing our plan for innovation to support start up businesses everywhere.

Everybody knows we're focused on implementing our defence industry plan to support local high-end manufacturing.

Everybody knows we're focused on rolling out our export trade deals, which help our exporting businesses.

And everybody knows that we're focused on making our tax system more growth friendly, delivering business tax cuts paid for by crack downs on tax avoidance and by better targeting relevant tax concessions.

Now, obviously as economic circumstances evolve and as we continue to face economic headwinds, we pursue opportunities and we will continue to do everything we can to ensure that Australia is as strong as possible.

An economic foundation to take advantage of the opportunities but also to be resilient in the face of any challenges. We must live within our means!

MICHAEL BRISSENDEN: And the political realities may mug you as well after the election, you may be forced to change things because you can't get stuff through the Senate for instance.

Nick Xenophon tells us that he has some pretty serious reservations about the company tax cut, extending beyond businesses earning over the turnover of 10 million.

So you may have to compromise on some things including some of the centrepiece of your election budget strategy.

DC: Well our message to the Australian people is that if you want us to implement our plan for jobs and growth, if you want us to implement a plan that would help secure our successful transition from resource investment driven growth to broader drivers of growth, then support our candidates, yes in the House of Representatives but also give us your vote in the Senate because it is in our judgement in the national interest for us to have the capacity to get our plan for jobs and growth through the Senate as well as through the House of Representatives on the other side of the election.

MICHAEL BRISSENDEN: And if that doesn't happen, you may have to compromise, might you?

DC: Well our message to the Australian people is that if you want us to implement our plan for jobs and growth, if you want us to implement a plan that would help secure our successful transition from resource investment driven growth to broader drivers of growth, then support our candidates.

MICHAEL BRISSENDEN (exasperated): Okay. DC, we'll leave it there!

He decided to try his hand with DM and tackle him about priorities (Sales sat quietly head in hands):

MICHAEL BRISSENDEN: You talk about a $50 billion tax cut for businesses, but you say you can't afford $37 billion for schools.

I mean it is about where you're putting your priorities.

DM: And you know what our priority is – growth, economic growth – because if you don't have economic growth, you don't have jobs.

If you don't have economic growth, you don't have the growth in revenue that pays for schools and for hospitals and for all of these things. And we must live within our means.

Now what Labor is doing in this election is running around committing money that it doesn't have.

MICHAEL BRISSENDEN: And we still have a spending problem under you, your own budget papers show that tax...

DM: I don’t accept that characterization. We're getting it down to 25.2 and what we've learnt this week is Labor's big defence yesterday was to say oh well, it's not as much as $67 billion. It's only $37 billion.

Now what it also admitted to yesterday is that all of the revenue they say they save by, or gain again by not going ahead with our small and medium sized tax cuts for businesses, all of that is already spent because they have to make up 18 billion in measures that they're already blocking.

So when Bill Shorten says 'I'm paying for this on schools or hospitals because we're not going ahead with the company tax cuts', well that's a lie.

It's not true because he's already spent them. He's spent every single cent of that going ahead with those company tax cuts, not on paying for schools or hospitals but for paying for the things he already opposes. We intend to live within our means!

DC chipped in:

DC: Well our message to the Australian people is that if you want us to implement our plan for jobs and growth, if you want us to implement a plan that would help secure our successful transition from resource investment driven growth to broader drivers of growth, then support our candidates.

Irritated by DC’s repetition, Brissenden jumped in to see if he could give a more plausible response to his question to DM. Could he trip him up?

MICHAEL BRISSENDEN: How come you can afford a $50 billion tax cut for businesses, but you can't afford $37 billion for schools?

DC: Well, I don’t accept your characterization. You know what our priority is – growth, economic growth - because if you don't have economic growth, you don't have jobs.

If you don't have economic growth, you don't have the growth in revenue that pays for schools and for hospitals and for all of these things. And we have to live within our means!

DM could not resist having his say:

DM: The budget is an economic plan to ensure that we provide for growth and jobs to drive the transition that is occurring in our economy.

Australians know that and they know there are great risks and threats to it. This budget is the economic plan, which will support that growth that supports those jobs by backing in the investment that is needed to make it happen.

It’s all about jobs and growth, jobs and growth, jobs and growth, jobs and growth, jobs and growth…

Brissenden’s eyes glazed over. He turned to Sales. Leigh, how on earth do you turn these things off?

Don’t know Michael. I guess they will stop when their batteries run out. But I suspect someone recharges them every night. We may never escape them!

As Sales and Brissenden retreat defeated, DM and DC chatter on:



Jobs and Growth, Jobs and Growth, Jobs and Growth; Our economy is transitioning, Our economy is transitioning, Our economy is transitioning; The budget is the economic plan, The budget is the economic plan, The budget is the economic plan; If you don't have economic growth, you don't have jobs, If you don't have economic growth, you don't have jobs, If you don't have economic growth, you don't have jobs. It’s all about Jobs and Growth, Jobs and Growth, Jobs and Growth, Jobs and Growth…….

As Sales and Brissenden disappear, DC and DM smile knowingly at each other: Together they babble:
We won. We won. We won! Again!!!

What do you think?
What do feel about our Daleks?

Do they irritate you?

Do you listen to them any more, except for amusement?

Let us know in comments below.

Time for a new economic model


Late in the 1970s Keynesian economics was largely abandoned when it failed to explain the stagflation that had occurred during that decade. Recently, in my piece ‘What economic plan?’, I quoted an Australian analyst with the CBA who suggested that recent national data released by the ABS was showing ‘bizarre’ results, an ‘anomaly’. That sounds suspiciously like the criticism of Keynesian economics in the ’70s. It suggests that it is time we reconsidered the current dominant economic models.

Under Keynesian economics inflation was normally associated with an expanding economy and increasing employment, leading to rising wages and prices. In the 1970s, however, inflation was rising but so was unemployment and production was falling — stagflation. Many put this down to the ‘oil-price shocks’ (which occurred twice during the decade) but Milton Friedman, with his monetary theory, put it down to faulty monetary policy on the part of governments and central banks. Although he had been developing his theory since the 1950s, the problems of the 1970s meant it was ready and waiting to be adopted and was initially taken up by the Reagan and Thatcher governments.

Friedman argued that inflation is always a monetary phenomenon: that prices could not increase without an increase in the money supply — he pointed out that the money supply should be matched to economic growth (GDP) to keep inflation under control and also to prevent governments simply printing as much money as they pleased. He also believed there was a ‘natural’ level of unemployment and inflation would also occur if unemployment fell below that level.

In his work Capitalism and Freedom he espoused the free market as the solution to many problems rather than leaving problems to government to resolve: government should keep an eye on the money supply and allow the market to take care of itself — the market was considered more efficient in dealing with inflation and unemployment.

His emphasis on monetarism and the free market led to two related approaches: supply-side economics and the rise of neoliberalism.

The free market which Friedman emphasised is based on the individual’s rights over private property, which the individual then uses to engage in the market. That was used by the neoliberals to place the individual at the forefront, not only economically but socially. The approach had been spelt out by the philosopher Robert Nozick during the 1970s.

Nozick considered that as each individual owns the products of her or his own endeavours and talents, it is possible for an individual to acquire property rights (as long as they are not gained by theft, force or fraud) over a disproportionate amount of the world. Once private property has been acquired in that way, it is ‘morally’ necessary (in a philosophic sense) for a free market to exist so as to allow further exchange of that property — it is only individual private property rights and market mechanisms that are logically important.

That captures much of the approach adopted by the neoliberals and helped give their approach a philosophic underpinning.

Nozick also posited that the state’s single proper duty is the protection of persons and property and that it requires taxation only for that purpose. That matches the current neoliberal argument for small government and minimal taxes and also fits with supply-side economics.

The basic argument of supply-side economics is that high taxes, particularly high marginal tax rates, are a disincentive to work, saving, investment and the efficiency of resource use. Some other taxes can also distort investment decisions by treating different types of capital investment unequally.

Supply-side proponents argue that:

  • lower taxes on wages will increase labour supply and increase employment by reducing the pre-tax real wage but increasing the post-tax real wage
  • lower taxes on interest and capital gains will lead to an increase in savings, leading to more savings flowing into capital markets and raising investment
  • for governments, lowering taxes will actually lead to higher tax revenue as people will work or invest more, thus increasing the size of the tax base
What have these approaches actually achieved since the 1980s?

Following supply-side economics, many governments around the world have, since the 1980s, lowered marginal tax rates on income, including company tax rates, and the rates for earnings from investments and capital gains. Many other economists accepted that some of the outcomes suggested by the supply-side theories were possible but their impact was measurable only in decimal points of a percentage and the benefits were not as large as claimed by supply-side theories. The tax cuts made by the Reagan government were a classic example of supply-side theory but led not to an increase in government revenue but a huge increase in government debt, which other economists suggested over-rode any potential benefit.

Economists acknowledge that supply-side actions take a long time to show their benefits — although governments usually prefer to take short-term actions.

In 1996 one researcher wrote of the USA:
Economic growth, at its simplest, is the result of more people working and more output per hour (ie, increased productivity). Given two facts — annual productivity growth of about 1.1 per cent for more than two decades, and a slowdown in the growth of the working-age population — slower economic growth is the inevitable result. Since cutting (or raising) taxes has made no obvious, large difference in productivity, the idea that tax cuts will noticeably increase long-term economic growth is without merit.
More recently, to cover the long term nature of supply-side changes, some research has looked at the history of tax cuts in the USA going back to 1945, thus covering a period of about 65 years (at the time of the research). The research was conducted by the Congressional Research Service and first appeared in 2012. It found that there was no correlation between lower tax rates and saving, investment or productivity. What was found was that the changes had helped concentrate wealth in the hands of the top 1%, and particularly the top 0.1% of income earners, as their tax rates had fallen by more than 50%.

The market emphasis on the individual, supported by the neoliberal approach, basically endorses inequality because it results from individual ‘effort’. It ignores social responsibility and the common good. I won’t go into this as we have covered it before on TPS but it leads to the economists and neoliberals seeing no role for government in ameliorating the situation, or as the philosopher Nozick put it:
While it is true that some individuals might make sacrifices of some of their interests in order to gain benefits for some other of their interests, society can never be justified in sacrificing the interests of some individuals for the sake of others. [emphasis added]
Under this approach, governments should not intervene in the market, nor over-rule individual rights to reduce the increasing inequality, although it has been government decisions, under pressure from supply-side economists and neoliberals, that has exacerbated the situation.

Greg Jericho, writing recently in The Guardian, also pointed to the unusual outcomes occurring under the current economic approach:
The OECD has just released its latest compendium of productivity indicators and it shows that across the world productivity growth was slower in the decade from 2004‒2014 than it was from 1996‒2004.

But as the OECD notes, the slowdown in productivity growth has come during a time of “rapid technological change” and increasing participation of firms and countries in the global market — things which should see improved growth.

It is a “paradox” which the authors of the paper rather unsettlingly attribute to among other things, difficulties of measurement.
For its failures, supply-side economics has been disparaged and dismissed as ‘voodoo economics’ (used by George H Bush as regards Reagan’s economic approach during the 1980 presidential primaries), although it still lingers among many governments, including the Liberal government in Australia. Despite the evidence, our government still believes that lowering taxes will help investment, economic growth and ultimately government revenue. In Fairfax papers on 9 June, Peter Martin wrote that the government’s company tax reduction would cost a nett $8 billion a year (after some increased income from personal taxation). For that cost, the benefit would be an improvement in gross national income of between 0.5% and 0.7% ‘after several decades’ or less than 0.1% per year (so low that at one decimal point it rounds to zero):
And the boost to jobs would be even smaller. Independent Economics says employment would eventually climb by 0.17% if the tax cut was funded by a tax on households, or by as little as 0.02% if it was funded by cutting government spending. That’s an eventual increase of between 2400 and 20,400 jobs. By way of comparison employment has climbed by an average of 24,000 per month over the past year. It means that after 20 to 30 years the $8 billion per year holds out the prospect of delivering an extra month’s worth of employment growth.
That certainly echoes the long-held criticism of supply-side economics that it produces only marginal improvements over very long time spans.

Another common problem is the acceptance of Friedman’s ‘natural’ level of unemployment: our government does nothing to reduce unemployment below 5%. That figure is the accepted norm within the Australian Treasury and its longer term projections, such as in the Intergenerational Reports, use that figure consistently over many years (linked to stable inflation). While it is all but impossible to achieve zero unemployment, prior to Friedman’s approach unemployment at about 2% was considered ‘full employment’. If we now accept that another 3% of the labour force (over 300,000 people in Australia) should always remain unemployed, doesn’t that also have an impact on demand and production?

To me, as an economic layman, controlling the money supply seems to have become more difficult because financial institutions have created artificial financial products that do not appear to bear any relationship to their actual value. In relation to the GFC, there was a small number of economists and market analysts, who pointed out that the total value of derivatives and futures traded was greater than the money supply in the US and of the total value of the goods being traded — so something had to give!

Following Friedman’s approach, perhaps that situation indicated the money supply was too low but, in fact, it was too high — deregulation of financial markets had seen to that!
Friedman and other monetarists envisioned strict controls on the reserves held by banks, but this has mostly gone by the wayside as deregulation of the financial markets took hold and company balance sheets became ever more complex. As the relationship between inflation and the money supply became looser, central banks stopped focusing on strict monetary targets and more on inflation targets.
For that reason, some argue that Friedman’s theory has not failed but that governments have moved away from it. Rather than controlling inflation through the money supply, control is now more focused on interest rates set by the central banks. On the other hand, Friedman argued for freedom in the markets and deregulation is just a way of achieving that — so is there an inconsistency in his arguments?

A number of governments around the world, have engaged in increasing the money supply (quantitative easing) following the GFC but it has not increased inflation (and growth) as Friedman’s theory suggests. Instead national economies are stagnating or growing painfully slowly and employment and production are not rising significantly. So if increasing the money supply is not working what will?

Whichever way you look at it there are more and more questions and anomalies in the current economic situation not explained by Friedman’s monetarism or supply-side theory.

A Keynesian would increase government spending and, if necessary, government debt to stimulate the economy. Friedman, however, warned that government debt is bad because it encourages governments to allow inflation to rise as a way to effectively reduce the debt — which was how many governments paid the debt they had accumulated during WW2. But as explained in ‘Bankers 3 Democracy 0’, such inflation is resisted by financial institutions because they are the ones that stand to lose.

Finally, some investment advisers in the US are warning that there is a danger that America could face the return of stagflation. While advising that it is only a small risk at this time, they are suggesting that investors may wish to hedge their position by placing more of their investments in gold and government bonds. If even Friedman’s approach is potentially leading to stagflation, shouldn’t it also be abandoned?

Do we return to Keynesian economics? Although supply-side economists say it shouldn’t work, it worked for Australia in the GFC: the Rudd government provided cheques to households to spend. That was pure Keynesian because it allowed a demand-driven boost to the economy without changing the underlying tax base (and thus future government revenue).

Which Australian political party will be brave enough to stand up to the economists, including those in Treasury, and say your current economic theories aren’t working? — reconsider what you are telling us and tell us something that will actually work! There are other economic approaches available, such as Modern Monetary Theory (MMT) and what is sometimes termed ‘middle out’ economics which uses a demand-driven model that emphasises the capacity for spending of the middle class to drive economic growth. Perhaps it is time that government, and the Treasury, gave these approaches more heed because Friedman’s monetary theory and supply-side economics certainly aren’t working.

What do you think?
Why should we stick by Friedman’s approach and supply-side economics when it is clear they are not explaining current ‘anomalies’ or ‘paradoxes’?

How can we support an economic approach whose greatest achievement seems to be increasing inequality?

Let us know in comments below.


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Feed a man a fish


Those who missed the ABC’s Lateline last Wednesday night lost the opportunity to learn about a private (they would prefer the term ‘independent’) school in Sydney that actually seems to want to make a difference.

Barker College, a co-educational school in the Anglican tradition, based at Hornsby in Northern Sydney owns and operates the Darkinjung Barker School near Wyong, on the New South Wales Central Coast. The Darkinjung Barker School is small and operates in association with the local Aboriginal Land Council to provide an education to children of aboriginal background in an area where there appears to be significant educational underachievement.

Featured in the Lateline report was the Darkinjung Barker School’s principal Jamie Shackleton. He justified the small size of the school and the better than usual resourcing (the teacher to student ratio) is around 1 to 7 by observing:
We couldn't do it with a class of 30. It would be - it would be children again slipping - slipping through the cracks. And we're lucky enough now to have two classes with two teachers and two teachers' aides where it's nearly a ratio of one to seven. And that, for those children, is a need.
The school is an attempt to ‘close the gap’. Some of the statistics are scary. From their website

  • YEAR 3 - In all assessed areas of NAPLAN and for most States and Territories the mean score for Indigenous students is only at the 20th percentile score for non-Indigenous students (NAPLAN report 2013, p63)
  • YEAR 5 – Only 65.8% of Indigenous students across Australia are at or above the minimum standard for persuasive writing compared to 93.3% for non-Indigenous students (NAPLAN report 2013, p 127)
  • YEAR 7 – In NSW the mean scores for Indigenous students are between 59 and 73 points below the mean scores for non-Indigenous students. (NAPLAN report 2013, p191)
  • YEAR 9 – By Year 9 the gap between Indigenous and non-Indigenous students ranges from 57 scale points in spelling, to 88 points in persuasive writing (NAPLAN report 2013, p225)
Not that Darkinjung Barker School is a new idea. The St Andrew’s Cathedral School in Sydney founded Gawura Primary School, based in Central Sydney, in 2007. The school caters for 28 students from prep to year 6 and attendees are granted scholarships to attend. Gawura’s website suggests
Gawura has three full-time staff, one full time teacher’s aide and one part-time teacher’s aide working with 23 students. This exceptional student/teacher classroom ratio allows us to specifically address the individual academic and pastoral needs of the students. Dialogue between home and school is openly encouraged and reinforces the attention devoted to our students
Darkinjung Barker School openly admits the idea for their school was ‘pinched’ from the Gawura St Andrew’s Cathedral School. Gawura claims their process is simple:
Gawura has a simple formula; the continuity of practice, work habits, expectations and attendance being paramount. The classroom programmes are systematic and intensive, with an emphasis on literacy and numeracy, delivered in a culturally supportive and enriching environment. The Gawura programme continues to promote identity and cultural understanding. Our students are proud of their Aboriginal and Torres Strait Islander heritage. Wiradjuri classes are always a highlight of the week and the students take great pride in every cultural performance. Eminent educationalist, Dr Chris Sarra, once commented that “Education strengthens Aboriginality”.
The Lateline report linked above records the stories of two of Gawura’s graduates, who are now first year university students, in the accompanying video.

Dr Chris Sarra was appointed the principal of Cherbourg State School in South East Queensland in the 1990s. Cherbourg is an Indigenous community and Sarra (who is of Indigenous/Italian decent) introduced his ‘Stronger Smarter’ philosophy which led to dramatic improvement in the educational outcomes of the school.
When Dr Chris Sarra arrived as the principal in 1998 he set about making fundamental changes to school. He challenged school staff to look at their attitudes towards students and raise their expectations of the children. He also challenged children to raise their own expectations and required them to meet higher standards of behaviour, attendance and learning.

This seems to have worked. Over an eighteen-month period unexplained absences dropped by 94%. Improved attendance also led to better educational outcomes. The diagnostic reading tests of year two students originally showed that 100% of children were below expected reading rates. Two years later, less than half were below expected reading levels. These shifts were also evident for older children. In 1999 all of the year 7 students were significantly below the state average for literacy, by 2004, 17 of 21 year 7 students were achieving within the state average range
Sarra left Education Queensland in 2005 after several complaints were made against him during his time at Cherbourg. The principal who replaced him did not share Sarra’s commitment to the ‘Stronger Smarter’ system and the results achieved by Sarra diminished. A new principal in 2011 welcomed Sarra and his philosophy back into the school and the outcomes are again on the rise. Dr Chris Sarra is now the chairman of the Stronger Smarter Institute

While Sarra seems to support the actions of Barker College and St Andrew’s Cathedral School, in the interview with Tony Jones and Phillip Heath (the Head of Barker College), available here, he has concerns with those who for some reason cannot access the services provided for the ‘select few’.

The Gillard government negotiated with federal MPs as well as state governments of varying political persuasions to introduce the changes (and generally increase) to education funding across the country known as the Gonski reforms. Gonski was a needs based system whereby if a school was in a lower socio-economic area, it received funding appropriate to ensure that the students of that school were not educationally disadvantaged, through the introduction of additional staff and facilities to make a difference. The statistics from the Darkinjung Barker School website suggest that Indigenous schools are generally seeing the results of the disadvantages of lower socio-economic areas.

The evidence from both Cherbourg State School and the Darkinjung Barker School discussed above suggests that smaller class sizes and overcoming issues such as transport are essential to ‘close the gap’ in Indigenous education. The Gonski model of education funding recognised this and made the necessary adjustments.

Prime Minister Turnbull’s overwhelming message in the current election campaign is yet another Abbott style three-word slogan ‘jobs and growth’. Turnbull claims that one of the parts of the plan to deliver ‘jobs and growth’ is advising voters that their children and grandchildren can get good jobs ... That is what they want to know.

Ensuring their children and grandchildren can get good jobs is a lofty ambition and one that most Australians would wholeheartedly agree with. The evidence suggests that to get a good job, a good standard of education is required, and in this society there is an expectation that all children will have the opportunity to receive a comprehensive education at a government school for little cost.

In 2010, David Gonski chaired a review of the existing school funding models and determined that in part, the resourcing of schools affected the outcomes produced. The Gillard government negotiated with politically diverse state governments and members of parliament and after some false starts, implemented the Gonski school funding model. The funding model proposed by Gonski and implemented by Gillard funded schools according to the individual needs of the students who attend the particular school. If schools get additional resources based on the perceived needs of their students, they can use the funding to provide support in a number of different ways – whether it be reducing class size, professional development for staff, increasing specialist teachers or providing assistance for students with special needs.

Abbott, in the lead up to the 2013 federal election claimed that he and then Prime Minister Rudd ‘were on a unity ticket’ in relation to ‘Gonski’ funding. By November that year, Education Minister Pyne was suggesting that the Coalition government would ‘go back to the drawing board’ on school funding by 2015. In the now famed 2014 budget, the Coalition government changed its position again and decided to fund education on the Gonski model until 2017.

Current Coalition Prime Minister Turnbull has not changed the previously announced Coalition government position on Gonski funding. The ALP under Gillard, Rudd and now Shorten committed to funding education according to the Gonski model in full. While there is a cost, what is more important – tax concessions to Multi-National Companies as proposed by the Coalition or comprehensive quality education of all Australians? That additional funding needs to be applied to schools in lower socio-economic areas speaks volumes of the inadequacies of previous funding models.

Turnbull is correct – today’s parents and grandparents want their families to have a good job. To get a good job, you need an education. So how does Turnbull reconcile his decision not to reinstate the education funding system, the system the Coalition government under Abbott and Pyne scrapped, with his aim of todays children getting a good job (and potentially growing the economy).

He can’t logically.

The evidence would suggest that the Gonski funding model works. Dr Chris Sarra and Phillip Heath both agreed to the proposition last Wednesday night on Lateline. Apparently Aristotle (rather than the Catholic Church Jesuits religious order) was responsible for the saying, ‘Give me a child until he is 7 and I will show you the man’. Those who have watched the 7 Up television documentaries over the years may dispute the accuracy of the statement. Another old maxim is ‘give a man a fish and you feed him for a day; teach him how to fish and you feed him for a lifetime’. This demonstrates the benefits of education over handouts.

Education is important. If Australia’s future is going to be in high technology areas (because it sure won’t be mining), surely we need to ensure that all Australian children get an equally good education – regardless of the socio-economic standard of the area they grow up in. Who knows where the next Australian to potentially invent something as useful as Wi-Fi is going to school. Independent schools and other groups shouldn’t have to pick up the responsibility for funding initiatives to ‘close the gap’ on education ‘one person at a time’ and eventually provide equal opportunity to all. Governments over the past 200 years have created the problem, they need to fix it.

What do you think?
Let us know in comments below.

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The economics of debating
2353NM, 5 June 2016
Economists will tell you that they practise a science in a similar way to chemists, biologists and physicists. If certain inputs are made to solve an economic problem, there will be a certain result. Other scientists also use the same process, a chemist will tell you if you add certain quantities of two chemicals together, it might change colour, smoke or (everyone’s favourite) create an explosion. Others who are less enamoured with …
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Turnbull is selling us a pup
Ad Astra, 8 June 2016
You all know what that idiomatic expression means – being tricked into buying something that is worthless. It arose from the old swindle of selling a bag that purportedly contained a piglet, but instead there was a puppy inside.

PM Turnbull wants you to believe that his bag contains a piglet, but all you will find is a pup. The piglet is called ‘Jobs and Growth’. Every day, many times every day, he is out there …
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The real Malcolm
2353NM, 10 June 2016
Since Malcolm Turnbull’s elevation to the role of Prime Minister, there has been consistent reference to his stated ideals and beliefs last time he was the Leader of the Liberal Party plus his public comments on ‘social issues’ such as same sex marriage, internet connectivity, climate change, the republic and so on versus his actions as Prime Minister. For a member of the same party as Abbott and Bernardi, he was really quite ‘small L’ liberal. At times he was more ‘liberal’ …
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Turnbull is selling us a pup



You all know what that idiomatic expression means – being tricked into buying something that is worthless. It arose from the old swindle of selling a bag that purportedly contained a piglet, but instead there was a puppy inside.

PM Turnbull wants you to believe that his bag contains a piglet, but all you will find is a pup. The piglet is called ‘Jobs and Growth’. Every day, many times every day, he is out there on the streets crying ‘Jobs and Growth’, ‘Jobs and Growth’, ‘Jobs and Growth’, like a door-to-door snake oil salesman.

The piglet that Turnbull says he has in his bag sounds attractive. Who would deny the benefit of more jobs? And only a nihilist would eschew the notion of growing the economy.

Trouble is that he won’t let you peep inside to check out the piglet. And he won’t tell you where he got it. He doesn’t want you to know its bloodline, whether or not it’s diseased, and whether it's able to do what piglets do best.

He wants you to buy his ‘Jobs and Growth’ piglet sight unseen; he does not want you to question its soundness.

How does he intend to feed his Jobs and Growth piglet? He says he will feed it with tax cuts for businesses, not just small businesses that we are told are the life blood of our economy and the leading employer of our workers, but also large businesses right up to multinational corporations, owned mainly by overseas investors.

How does he know that feeding the Jobs and Growth piglet with tax breaks will make it develop into a fat and succulent pig? Well, he has a theory.

It goes like this: cut taxes to businesses and they will use the extra money in their pockets to expand their business, produce more, and employ more. That’s it! Turnbull didn’t invent it, nor did his daleks Treasurer Morrison or Finance Minister Cormann. It’s been around a long while. It goes by the name ‘Supply-side economics’. If you want to learn more about its origins and modus operandi read this detailed account in Wikipedia, which begins:
“Supply-side economics is a macroeconomic theory which argues that economic growth can be most effectively created by investing in capital, and by lowering barriers on the production of goods and services.

“According to supply-side economics, consumers will then benefit from a greater supply of goods and services at lower prices; furthermore, the investment and expansion of businesses will increase the demand for employees and therefore create jobs. Typical policy recommendations of supply-side economists are lower marginal tax rates and less government regulation.”
You’ve heard about lower marginal tax rates and less government regulation before, and how the benefits of these measures will trickle down to those at the bottom of the pile. We’ve written about: ‘Trickle down economics’ on The Political Sword’. Its original name, coined by economist John Kenneth Galbraith, was: ‘Horse and sparrow economics’ – “If you feed enough oats to the horse, some will pass through to the road for the sparrows.” Read The trickle down effect by 2353NM, How the economic rationalists tried to steal our hearts and minds by Ken Wolff, and Trickle down economics breeds inequality by Ad astra.

Turnbull’s propositions might sound plausible to the casual observer, but does supply-side economics do what its proponents insist it does? Does it work? Is Turnbull’s Jobs and Growth piglet capable of developing into a large edible pig?

This question is not one that conservatives intend to address, although there is plenty of evidence that might provide an answer. They have an extraordinary capacity to ignore evidence. In an article in Alternet, Noam Chomsky quotes political scientist Norman Ornstein’s description of the fervently conservative US Republican Party: “…a radical insurgency that doesn’t care about fact, doesn’t care about argument, doesn’t want to participate in politics, and is simply off the spectrum.” Here we have the Liberal Party – same mind-set.

So does supply-side economics work? We have written often about the fallacy of trickle down economics, (see above) but there is much more. Sometimes you hear this economic theory described as ‘Reaganomics’ or ‘Thatcher economics’.

Let’s start with a blistering critique of Reaganomics, or ‘Riganomics’ as she prefers to call it, by Rachel Maddow, an American television host, political commentator and author who hosts a nightly television show, The Rachel Maddow Show, on MSNBC. The critique is titled: How Reaganomics Destroyed The Middle Class...And Maybe America. It’s worth watching the whole 8 minutes 26 seconds of this YouTube clip:



If that hasn’t convinced you of the fallacy of supply-side or trickle down economics, read this appraisal in Wikipedia. Part of the theory, which some describe as ‘voodoo economics’, posits that rather than federal revenue falling when tax cuts are made, it would rise, as portrayed by the mythical Laffer curve, debunked long ago. The theory is refuted here:
”Economist Gregory Mankiw used the term "fad economics" to describe the notion of tax rate cuts increasing revenue in the third edition of his Principles of Macroeconomics textbook in a section entitled "Charlatans and Cranks":

“An example of fad economics occurred in 1980, when a small group of economists advised Presidential candidate, Ronald Reagan, that an across-the-board cut in income tax rates would raise tax revenue. They argued that if people could keep a higher fraction of their income, people would work harder to earn more income. Even though tax rates would be lower, income would rise by so much, they claimed, that tax revenues would rise.

“Almost all professional economists, including most of those who supported Reagan's proposal to cut taxes, viewed this outcome as far too optimistic. Lower tax rates might encourage people to work harder and this extra effort would offset the direct effects of lower tax rates to some extent, but there was no credible evidence that work effort would rise by enough to cause tax revenues to rise in the face of lower tax rates…

“People on fad diets put their health at risk but rarely achieve the permanent weight loss they desire. Similarly, when politicians rely on the advice of charlatans and cranks, they rarely get the desirable results they anticipate. After Reagan's election, Congress passed the cut in tax rates that Reagan advocated, but the tax cut did not cause tax revenues to rise.”
Writing in Business Insider Australia, about the US economy in an article titled BOMBSHELL: New Study Destroys Theory That Tax Cuts Spur Growth, Henry Blodget says:
“One economic theory has been repeated so often for so long in this country that it has become an accepted fact: Tax cuts spur growth. Most Americans have gotten so used to hearing this theory that they don’t even question it anymore.

“One of our two Presidential candidates is so convinced of the theory that he has built his entire economic plan around it, despite the huge negative impact additional tax cuts would likely have on our debt and deficit.

“But is the theory true? Do tax cuts really spur growth?

“The answer appears to be “No.”

“According to a new study by the Congressional Research Service (non-partisan), there’s no evidence that tax cuts spur growth.

“In fact, although correlation is not causation, when you compare economic growth in periods with declining tax rates versus periods with high tax rates, there seems to be evidence that tax cuts might hurt growth…

“One thing that tax cuts do unequivocally – at least tax cuts for the highest earners – is increase economic inequality. Given that economic inequality is one of the biggest problems we face in this country right now, this conclusion is very important…

“…this topic has become highly politicized, so it’s impossible to discuss it without people howling that you’re just rooting for a particular political team. Second, no one likes paying taxes. Third, everyone would like a tax cut, including me.

“So I think we can all agree that everyone would prefer that tax cuts actually did spur economic growth.

“Alas…”
Blodget goes on to prove his point with a number of charts.

He asks: “So, have these declining tax rates for the rich – the ‘job creators’ who are being given a bigger incentive to invest by the reduced tax rates led to faster economic growth?

“Nope.”


Later he says: “Although tax cuts do not appear to spur economic growth, they DO appear to lead to greater economic inequality. Inequality in the United States recently hit a level that has not been seen since the 1920s: The country’s top earners are taking home more of the national income than at any time in 70 years.”

Referring to his charts, he says:
“And now let’s look at the correlation between this rise in inequality and tax rates – the lower the top marginal rates go, the bigger the share of national income that goes to the top 0.1% of wage earners. And it’s the same for capital gains rates.

“Meanwhile, the share of national income that goes to “labour”– a.k.a., most Americans – goes up as the top tax rates increase.

“Why is the rise in inequality so troubling? Well, beyond the issues of fairness and stability, increasing inequality is hurting the economy. Unlike middle class and upper middle class folks the country’s highest earners don’t spend all the money they earn. So this money doesn’t get circulated back into the economy, where it can become revenue for other companies and salaries for other workers. (If there were a dearth of investment capital, the money might get invested, but we’ve got plenty of investment capital right now. Our problem is a lack of demand).

“So, what’s the bottom line?

“Well, the bottom line appears to be that low taxes do not spur economic growth and DO cause greater economic inequality.

“So, although it sounds like heresy, presidents and Congress-people who actually want to fix the economy might want to consider raising taxes rather than cutting them. Or, at the very least, keeping them the same.”
You can read the whole article here.

Along with tax cuts for businesses, Dalek Morrison keeps repeating that we don’t have a revenue problem, only a spending problem! He and Dalek Cormann are programmed to say this mindlessly and endlessly. The unavoidable consequence is spending cuts, which also go by the name ‘austerity’. Austerity has been tried in many places with little success.

An article in the Australian edition of The Guardian by Larry Elliott, Austerity policies do more harm than good, IMF study concludes, subtitled: Economists give strong critique of neoliberal doctrine ushered in by Ronald Reagan and Margaret Thatcher in the 1980s begins: “A strong warning that austerity policies can do more harm than good has been delivered by economists from the International Monetary Fund, in a critique of the neoliberal doctrine that has dominated economics for the past three decades.”

In response to the UK Chancellor of the Exchequer George Osborne’s wish to introduce austerity measures “…to give the government more flexibility in the event of a future crisis”, IMF economists:
“…rejected the notion that austerity could be good for growth by boosting the confidence of the private sector to invest. They said that in practice, ‘episodes of fiscal consolidation have been followed, on average, by drops rather than by expansions in output. On average, a consolidation of 1% of GDP increases the long-term unemployment rate by 0.6 percentage points.’

“The IMF economists summarised what a growing consensus among economists across the globe now think, that Osborne-style austerity economics increases inequality and instability, and undermines growth.”
They concluded:
“…that the increase in inequality threatened to be self-defeating.

“The increase in inequality engendered by financial openness and austerity might itself undercut growth, the very thing that the neoliberal agenda is intent on boosting. There is now strong evidence that inequality can significantly lower both the level and the durability of growth.”
In yet another article in The Guardian: You’re witnessing the death of neoliberalism – from within, Aditya Chakrabortty quotes IMF research: “The results, the IMF researchers concede, have been terrible. Neoliberalism hasn’t delivered economic growth – it has only made a few people a lot better off.”

It seems that if neoliberalism is not yet dead, it is moribund.

How much more evidence do we need to be convinced that Turnbull is selling us a pup? There is no Jobs and Growth piglet in his swag. What’s more, even if there were, it could not grow into the jobs and growth he promises every day. His much-vaunted ‘plan’ has no substance. Ken Wolff goes into this in his TPS Extra piece: What economic plan?

Turnbull’s Jobs and Growth promise will not, indeed cannot be achieved. The food he says he will feed his Jobs and Growth piglet: lower taxes for businesses and spending cuts, will not make it grow. Indeed all the evidence, gathered over fifty years, indicate that his food will not even keep his Jobs and Growth piglet going.

Instead, the opposite will occur – it will starve. There will be no more jobs, and growth will not occur. Inequality will increase.

The rich will get richer and the poor will languish waiting for the promised benefits that will never trickle down.

In fact, the piglet Turnbull is trying to sell us is a pup.

Why do Turnbull, Morrison, Cormann and fellow ministers fly in the face of the facts? Why do they persistently cling to supply-side economics, which has been discredited over and over again? Ornstein’s answer rings true: Neoliberals are 'a radical insurgency that doesn’t care about fact, doesn’t care about argument, doesn’t want to participate in politics, and is simply off the spectrum.’ They adhere to their preferred economic theory because it suits them and their top-end-of-town supporters, replete with top hats.  

How can we argue with such people? We can’t. The only way to destroy their dangerously flawed economics, which threatens not just our economy, but also the social fabric of this egalitarian nation of the ‘fair go’, is via the ballot box.

July 2 is our best chance to tell Turnbull that he is selling us a pup.


What do you think?
Do you feel you are being sold a pup?

If not, what is Turnbull selling us?

Let us know in comments below.

The economics of debating


Economists will tell you that they practise a science in a similar way to chemists, biologists and physicists. If certain inputs are made to solve an economic problem, there will be a certain result. Other scientists also use the same process, a chemist will tell you if you add certain quantities of two chemicals together, it might change colour, smoke or (everyone’s favourite) create an explosion. Others who are less enamoured with economics will suggest that if you put 100 economists in a room and give them a problem, they will come up with a solution. When the solution doesn’t work (because it usually won’t), the same economists will give you 150 reasons why it didn’t.

Really, economists get a bad rap. There will be those of us who remember the time years ago when weather forecasters plied their trade only to receive general hilarity from the rest of the country. The science has improved and, while weather forecasters don’t get it right 100% of the time in your particular bit of Australia, on a regional level they are usually pretty close to the mark. Economists believe that the market will always react rationally. The problem is that people are by nature irrational; their personal beliefs or circumstances will normally overrule ‘rational’ decision-making.

For example, most people who find $500 on the ground at a shopping centre would hand it in to the centre management or police, rationalising that $500 is a substantial sum of money to have lost. Only a minority would pick it up and keep on walking, rationalising that their need was more important (without obviously knowing the needs of the person who lost the money). Most would at least consider the circumstances around pocketing the money before acting rationally. The temptation of the minority to take the money would overrule the ‘rational’ decision-making process.

A similar behaviour pattern can be shown in the current election campaign. Let’s assume for a minute that there are 24 million people living in Australia. If you didn’t watch the ‘Leaders Debate’ last Sunday night, you’re in good company. Something like 23.5 million of us didn’t. Maybe it demonstrates the economists’ argument that people generally make rational decisions.

Surely a large majority of voters would like to hear the plans and aspirations of each leader for the future of Australia? The ‘Debate’ would be a perfect opportunity for some statements and (well) debate about our collective future. To put it into the basest of terms — why does Turnbull or Shorten think his side better than the other side? The ‘Debate’ didn’t include the Greens and Nick Xenophon. It would be fair to say they have a reasonable probability of influencing the way the ALP or Coalition govern from July 3 until hopefully sometime in 2019, so surely their views should be considered as well.

If those who watched the ‘Debate’ thought there was going to be a common interest in explaining policies and principles across the political parties in Australia they would have been sorely disappointed last Sunday night. Most of the media called the ‘Debate’ a draw. The Conversation’s Michelle Grattan called the ‘Debate’ a disappointment where ‘both men did a disservice by resorting to scares and simplistic attacks during their encounter’ while Fairfax’s Mark Kenny wrote ‘Sunday night's election debate did little to animate a fresh image for Australia nor even to lift a surprisingly formulaic election campaign from its desultory torpor’. Other media outlets were similarly damning in their assessment.

Those who chose to watch a vision actually being fleshed out were probably viewing Channel 7’s House Rules. Other choices included a show where people are supposed to recite their lines — The Voice on Channel 9. Probably the most ironic show on television last Sunday night at the time of the Debate was Seconds from Disaster which was on ABC2. Despite Seconds from Disaster being on a ‘digital’ channel with a smaller audience than the ‘Debate’, it was probably the better choice — at least they were investigating why a disaster happened, rather than watching one happen in front of their eyes on ABC’s main channel.

It is a sad reflection on Australian political parties that they are so gun shy of a bad headline that they won’t let their potential leaders debate who is the better option to run the country. The Guardian’s Lenore Taylor discussed the format, which was agreed prior to the debate occurring:
The format — no interruptions by the questioners or the other prime ministerial candidate — meant that despite the best efforts of the panel, even those voters not lured back to the more dramatic Sunday night offerings on the commercial television stations would have finished the hour-long debate not much the wiser.

Neither leader really won the encounter, because it wasn’t really a contest, but rather an opportunity to deliver speaking notes in stereo.
It seems that the personality of people like former PM Hawke is a foreign concept to today’s politicians. Prime Minister Hawke and his Treasurer, Paul Keating, over a period of a decade, completely restructured the Australian economy. It was their work that allowed Howard and his Treasurer Costello to be able to introduce a significant amount of middle class welfare while ‘banking’ surpluses. Certainly the mining boom helped prime the economy, but Hawke and Keating gave them the tools to collect and manage the income they received.

While Hawke was prime minister, his exploits were well known and in comparison to today’s ‘perfect’ role models. Hawke had an ‘interesting life of beer, women and song. A considerable section of the population really didn’t approve of Hawke’s ‘private’ life prior to politics but most admitted that he had some personality. Turnbull and Shorten may be seen on the nightly news with a beer sitting in front of them but it is infrequent to see them actually drink any of it and that’s about as risqué as it gets. Personality is limited to the standard stump speech with daily variations to demonstrate that the prime ministerial contender is actually where the television footage seems to place him at the time rather than standing in front of a ‘green screen’ at a studio in one of our large cities.

So we have a number of planes (and buses) running all over the country doling out a few dollars here and there to demonstrate to people that those allegedly running the joint haven’t forgotten about them. For example, on the day this article was written, Turnbull (if re-elected) was going to allocate $20million to some Sydney researchers to enable them to identify earlier cancer in children. Worthwhile? — certainly: however, it could be suggested that this would have happened anyway regardless who was in government at the time.

At the same time Shorten was ‘slumming it’ in Cairns announcing (if he is elected) funding for protection of the Great Barrier Reef. Again, highly worthwhile but almost certain to happen anyway.

In both cases, as they both ‘believe’ in the effects of climate change you’d have to ask how much carbon was released and dollars were expended in getting everyone to a pretty backdrop (either a research lab or out on the reef) to make the announcement. Why are we force fed these thematic announcements that somehow are supposed to demonstrate that Turnbull cares about research to a greater level than Shorten — and conversely Shorten cares more about the reef.

The ongoing theme of this election so far has been the size of the ‘black holes’ that various funding announcements have created in the country’s budget. In reality, the ‘black holes’ don’t matter. We started off talking about economists and how their predictions usually are incorrect because circumstances change. Without disparaging the work of the ‘beancounters’ in the Treasury and Finance Departments, the real surplus or deficit for the financial year is announced some months after the event. What it’s going to look like next year is anyone’s guess, let alone ten years’ time.

To paraphrase a former onion eating Prime Minister, stuff happens. Financially the ‘stuff’ has an effect on the economic plan (or Budget) announced usually in May to the fascination of some and the snores of others. To expect a political party (even with help from Treasury and Finance) to understand all the variables in a policy or program that hasn’t been implemented is fantasy. Furthermore, to expect considerable accuracy around what is going to occur in ten years’ time is lunacy. To bring this back to your household economy: you have calculated that in two years you’ll be able to take the kids to Disneyland and figure you need $10,000 to do it. So things are plodding along nicely until the fridge blows up three months into your plan and then a further six months on the transmission in your car fails. The funds you are saving now pay for a new fridge and car and Disneyland is now three or more years away. Yes, the numbers are bigger in the Australian economy, but so are the inputs.

If the polling is correct, the election will be a close run thing. The reality of the 2016 election is that neither of the presumptive prime ministers is likely to obtain a large majority in both houses of parliament, accordingly they will have to convince another political group to work with them to pass legislation and provide certainty in matters of supply and confidence. Various minority governments around Australia have demonstrated they are much more efficient and consultative than Abbott/Turnbull’s parliament has been to date. A minority government (or one with a third group having the balance of power in the Senate) really isn’t a bad outcome and hopefully stops the excesses of absolute political power such as ‘Workchoices’ or sections of the 2014 budget becoming law.

Having said that, both Turnbull and Shorten have to convince others they can win and win both houses of parliament. It seems that the way they are doing this is by playing ‘me too’, by making large announcements over miniscule funding issues (Australia’s GDP is around $1.5 trillion so announcements that commit millions really aren’t that ‘big’) and flying around the country to be seen in areas their party machine think are liable to be gained or lost.

There is a lot of cost (hiring a 100 seat jet for each party isn’t cheap), lots of happy snaps but no actual benefit. You can’t help but wonder if one of the leaders stopped the set piece daily round of flying into some poor unsuspecting location with their entourage, making the announcement, doing the pre-planned ‘doorstop’, possibly walking around the local business area and repeating ad nausem, they might actually contribute something to the discussion. Then there might be some interest and substance instead of what is fast becoming Malcolm and Bill’s respective road trips.

Another common saying is that if you’re not making mistakes, you’re not trying hard enough. On that basis, there is clear evidence that neither leader is really trying. As a result, most electors are acting rationally and going along with their lives, to the detriment of this country in the future.

What do you think?
Let us know in comments below.

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2353NM, 31 May 2016
Charles Dickens wrote a book called Oliver Twist. It is undoubtedly a classic. The book has been the subject of numerous reviews, movies and is frequently a subject for study in English Literature classes. Perhaps the best known section of the book is where young Oliver asks the Master of the Workhouse for ‘more’.

The poor, disabled and incapable who were unfortunate enough to live in what is now the United Kingdom from the 1700s …
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It’s all their fault
2353NM, 1 June 2016
Have you ever noticed that politicians in general have a great ability to blame others? As an example, here Labor is blaming Prime Minister Turnbull (as he was the former communications minister) for a $15 billion cost blowout in the construction of the NBN. Here’s Turnbull in 2013 accusing Labor of the same thing (only the value is $12 billion in this case). Let’s put this simply — they both can’t be right!

The two major political parties have a number …
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What economic plan?
Ken Wolff, 3 June 2016
Prime Minister Malcolm Turnbull declared that GDP growth of 3.1%, reported by the ABS on 1 June, showed that his plan for the economy was on track:
You cannot succeed without a clear economic plan. Everything we have is encouraging companies to invest, to employ.


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It’s all their fault


Have you ever noticed that politicians in general have a great ability to blame others? As an example, here Labor is blaming Prime Minister Turnbull (as he was the former communications minister) for a $15 billion cost blowout in the construction of the NBN. Here’s Turnbull in 2013 accusing Labor of the same thing (only the value is $12 billion in this case). Let’s put this simply — they both can’t be right!

The two major political parties have a number of differences in their policies, history and generally their philosophy on life. For the purpose of this discussion, it’s probably valid to suggest that parts of each party’s policy on any specific issue are genuinely useful but other parts of the policy look after the history and philosophy of the party rather than the common good.

Recently I took my kids to see Zootopia at the cinema. It is what you would expect to see from a kids’ movie from Disney, really well done animation, a reasonable story line, some ‘humour’ for the parents as well as the kids and, of course, a moral to the tale. Without giving away the plot completely, in a world where animals live in a civilisation like ours there are of course little tensions: in this case between the predators (lions, tigers etc) and the prey (sheep, rabbits and so on). The first rabbit to try and join the Police Department, which is predominately staffed by predators, is met with some difficulties and finally overcomes them through hard work and a lot of perseverance. Sure, the rabbit has self-doubt and at times seemingly insurmountable problems, but she finds a way to overcome the difficulties and eventually rises to the top. Hence the moral, if you work really hard and take the opportunities that are presented to you, you will achieve your aims.

Back in real life, people pay small and large fortunes to try and improve their lifestyle: it could be to make themselves fitter, improve their mind, improve their financial position or even to try to find a ‘soul mate’. To meet the demand there are a multitude of people and organisations that are prepared to ‘help’ you achieve your aims, usually at some cost and sacrifice to your time, wallet and current usual routine. While there is an element of dodgy behaviour by some in these industries, a lot of suppliers are good at what they do and do produce the results they claim to be capable of.

If we talk about making you fitter (the implication being that you would also be healthier, live longer and so on), gyms seem to be the current fashion. Gyms in general promote that if the participant works to their individually designed program, which over time encourages increases to the time exercising as well as the effort expended (heavier weight or more repetition), the participant’s goal of being a better person is achieved and they can then move mountains (probably not literally but you get the point). Weightwatchers and similar organisations work using the same methods, weekly motivational events with a somewhat competitive process around actual weight loss since the last meeting attendance — those who lose what is considered to be a healthy amount each week are congratulated for their work while those who fail are given time for self-reflection.

Self-help classes and literature are a dime a dozen. The premise here is that the participant is not a worthless person but does add value to not only their life, but the lives of those around them. It is usually a gradual process where the participant is exposed to literature, lectures or ‘one on one’ meetings that promote the concept that each person (including the participant) is a valuable member of the community and can overcome whatever their immediate problem is. Of course if a person has been told for years that they are not worthwhile, the self-help process may take years but still, if the program is followed, the participant should believe they are capable, productive and valued at the end of the process.

There are thousands of avenues available to potentially increase personal wealth and surprisingly a lot of them are legal. While this isn’t the place to discuss them, negative gearing and the use of tax havens (if you already have a lot of wealth) are popular conversation topics at present. There are also schemes that involved multi-level marketing, working a second job, as well as the usual range of books, lectures and methods promoted on line, through the real estate industry, share brokers, and so on. Again each of them has a plan that if a participant strives to complete the program and maybe foregoes that annual trip overseas to put the money into an investment, you will end up wealthier than when you start.

Everyone has probably seen the advertising for companies such as eHarmony, RSVP and so on: they all promise that you will meet your ‘soul mate’ provided you play by their rules (and pay the money of course). Generally, there is a listing of people who ‘match’ the participant’s personality profile and through communicating with the suggested matched people, a strong and long lasting partnership will develop. However, participants are expected to complete a personality profile and actively manage their membership to achieve success.

Regardless of the perceived improvement need, there are two recurring themes here. The first is that there is some work to be done. If someone going to a gym for six months can now lift an additional 40 kilos repetitively, it’s progress towards an objective. In a similar way, if a person with issues regarding their self-worth starts to work out why they loathe themselves, it really is progress.

The second issue is the sacrifice needed to get the results. They person going to the gym is probably not eating and drinking the same ‘comfort’ items that they used to consume over and above the continuing gym membership fees, while the person with self-worth issues is probably being assisted to process a lot of hurt and anger from issues that occurred in their past.

There is a point to this article — and here it is. If we teach our kids that they can achieve anything they want provided they put the work in, and there are probably millions of groups that will assist you and me to rectify some perceived issue that we have, why on earth do we accept the argument that the fault for [insert problem here] is solely the result of the ‘other’ side of politics?

Think about it. Zootopia tells our kids that they can be like Judy Hopp, the rabbit that wants to become a Police Officer; Weightwatchers (and similar programs) can show people how safely to take 60kg from their weight (with the resulting physical and mental good that come from that); people can be taught to treat themselves as a worthwhile member of the community; there are financial strategies that will increase your wealth to an extent provided you stay within the rules laid down by the authorities; and yes, eHarmony and RSVP do produce partnerships that last until ‘death do they part’.

Yet we started this article with an example of both of the major political parties blaming the other for an adverse outcome in a program that was seen to be in the public good. Labor’s NBN and the Coalition’s NBN are really two different animals. The Labor plan was to connect most Australian dwellings directly to a fibre-optic cable that at the moment could be used for fast internet and phone communications (and who knows what else in the future). The Coalition plan is for partly fibre optic cable to junction boxes on street corners, then existing copper cable to the dwelling; other parts of the system would use upgraded existing cable-television cable generally strung from power poles or in the same pits as the power cables in newer areas. It is slower and potentially cheaper (as there is less new work involved) but the maintenance costs are higher as the junction boxes need electricity to operate and the copper/cable TV cable is not new (with a greater potential to fail due to age). So they are not directly comparable in any case.

To be fair, Labor started the NBN journey and in all likelihood decided to make the ‘headline’ cost of the work the option where not much goes wrong – it makes sense, that’s the cheapest option. However, as we all know, Murphy was an optimist and things do go wrong; the hoped for cheapest option inevitably doesn’t happen. When the Coalition came to power in 2013, part of their platform was that the country could not afford Labor’s NBN, so they ‘reviewed’ it and changed it. Regardless of the benefits of each party’s plan and the cost differences, it is pretty unlikely that the Communications Minister has any more input to the day to day construction operations of NBNCo than initial policy setting and reviewing a budget — to claim that ‘the other side’ were the reason the estimate was ‘out’ is gilding the lily to some extent. Both sides have been in power for considerably more than the time needed to develop realistic estimates and discuss with the public the difference between an estimate and a guaranteed price. Clearly they both chose not to.

Perhaps unsurprisingly, this isn’t the first article on The Political Sword that questions the wisdom of short term expediency versus the long term good of various policies (by all sides of the political fence) for the country and those who live here. Ad Astra wrote ‘The curse of adversarial politics’ in December 2008 and I commented about the problems with ‘absolutely’ ruling something in or out in ‘You reap what you sow’ in July 2014. Ironically, Ad Astra also asked in December 2008 Why does Malcolm Turnbull make so many mistakes. It seems that the more things change …

There is still a considerable percentage of the public who accept the argument that because the red team said this or the blue team said that, they should vote for the side making the accusation. There could be a million and one reasons why this is the case — although a lot of it is probably that people are just not interested, precisely because of the standard of debate and discussion in this country. Those that ‘don’t care’ are the real bunnies here. The first thing any ‘self-improvement’ program, like the ones we talked about above, will tell you is you have to do the work and make the sacrifice — which means that you have to stop blaming others for your problem and take responsibility for changing something that you can’t accept.

Regardless of how the Coalition would have run government between 2007 and 2013 (when Labor was in power), the fact is they weren’t and need to accept that we are at a certain point with the NBN, taxation, industrial relations or any one of a number of other functions of government. Should the current government want to change or improve on where we are, how about doing the work and making the sacrifice rather than suggesting it’s all the other side’s fault. After all, they were handed the keys to the prime minister’s office over two years ago.

And rather than blame the previous guy, perhaps next time they are in power, the ALP should comment that while they might have done it differently, the current position is what it is. Immediately following is an acknowledgement that they are in charge, they are prepared to do the work and sacrifice to make it better, and this is what is proposed.



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